url
stringlengths 54
59
| text
stringlengths 0
3.41M
| downloaded_timestamp
stringclasses 1
value | created_timestamp
stringlengths 10
10
|
|---|---|---|---|
https://www.courtlistener.com/api/rest/v3/opinions/1745031/
|
702 S.W.2d 295 (1985)
The FARMER'S MUTUAL PROTECTIVE ASSOCIATION OF TEXAS, Appellant,
v.
B.S. WRIGHT and wife, Myrna M. Wright, Appellees.
No. 11-85-171-CV.
Court of Appeals of Texas, Eastland.
December 19, 1985.
*296 Zollie C. Steakley, Wilks & Steakley, Sweetwater, for appellant.
Davis Scarborough, Scarborough, Black, Tarpley & Scarborough, Abilene, for appellees.
McCLOUD, Chief Justice.
B.S. Wright and his wife, Myrna M. Wright, insureds, sued Farmer's Mutual Protective Association of Texas, insurer, for recovery on a fire insurance contract. At the time of trial, the insureds were 70 years old, and they had been married about six-and-a-half years. At the time of their marriage, each owned a house. The house owned by Mrs. Wright is located in the town of Rotan (Rotan house), and the house owned by Mr. Wright was located fourteen miles outside of the town of Rotan (country house). The insureds lived in the country house until January 1984 when they moved to the Rotan house because they were unable to find a tenant for the Rotan house. The country house was destroyed by fire in September 1984. The insureds seek to recover $40,000 under their fire insurance policy on the country house. The insurer denies liability based upon the "unoccupied property" clause of the policy which states:
UNOCCUPIED PROPERTYInsurance on an occupied dwelling and its appurtenances automatically terminates six months after the dwelling becomes unoccupied. If the member wishes to retain insurance thereon, the member must report the unoccupancy to the local adjuster or sales representative within such first six months, and must then pay (before such first six months had expired) the increased rates fixed by the Board for unoccupied property.
In a nonjury trial, the trial court entered judgment for the insureds for $40,000. We affirm.
The insurer asserts both no evidence and factually insufficient evidence points for review. The insureds claim that the insurer waived its factually insufficient evidence points of error because the insurer failed to file a motion for new trial under TEX.R.CIV.P. 324(b).[1] Prior to the April 1, 1984, amendment to Rule 324, the rule in a nonjury case was that "neither an attack upon the legal or factual sufficiency of the evidence required a motion for new trial as a predicate to an attack on appeal of the legal or factual sufficiency of the evidence." Litton Industrial Products, Inc. v. Gammage, 668 S.W.2d 319, 323 (Tex.1984); See Brown v. Brown, 590 S.W.2d 808 (Tex.Civ.App.Eastland 1979, writ dism'd). The amendment to Rule 324 makes it clear that a motion for new trial is not required in a nonjury case to attack on *297 appeal the legal or factual sufficiency of the evidence.
There were no findings of fact and conclusions of law requested by the insurer or made by the trial court. In this situation the judgment of the trial court imports all findings necessary to support it, and this Court must affirm the judgment if it can be upheld on any legal theory that finds support in the evidence. In re W.E.R., 669 S.W.2d 716 (Tex.1984); Lassiter v. Bliss, 559 S.W.2d 353 (Tex.1977).
Insurer argues that the trial court erred in its "implied finding" that the country house was occupied because there is no evidence to support this implied finding. In considering the no evidence point, we view the evidence in the light most favorable to the judgment "considering only the evidence and inferences which support the findings, and rejecting the evidence and inferences contrary to the findings." Martinez v. Delta Brands, Inc., 515 S.W.2d 263, 265 (Tex.1974). Under a no evidence point of error, this Court must determine whether there is some evidence to support the judgment. Keller Industries, Inc. v. Reeves, 656 S.W.2d 221, 226 (Tex.App.Austin 1983, writ ref'd n.r.e.); See Schaefer v. Texas Employers' Insurance Association, 612 S.W.2d 199 (Tex. 1980).
The Supreme Court in Blaylock v. American Guarantee Bank Liability Insurance Company, 632 S.W.2d 719, 721 (Tex. 1982), defined the term "occupied":
A house is "occupied" when human beings habitually live in it as a place of abode; a house is unoccupied when it ceases to be used for living purposes or as a customary place of human habitation. Republic Ins. Co. v. Watson, 70 S.W.2d 441 (Tex.Civ.App.Beaumont 1934, writ dism'd); Transcontinental Ins. Co. of New York v. Frazier, 60 S.W.2d 268 (Tex.Civ.App.Waco 1933, no writ); 4A Appleman, Insurance Law and Practices sec. 2833; 8 Couch on Insurance 2d sec. 37:836.
The term "abode" is a synonym for residence or dwelling. Germania Farm Mutual Aid Association v. Anderson, 463 S.W.2d 24, 25 (Tex.Civ.App.Waco 1971, no writ).
The insurer and the insureds disagree over whether two houses can be "occupied" at the same time. The insurer argues that only one of the two houses can be "occupied" as the insureds' customary place of habitation and abode. We disagree. Instead, we agree with the rationale of the Supreme Court in East Texas Fire Ins. Co. v. Kempner, 34 S.W. 393, 400 (Tex.1896):
[I]n ascertaining the meaning of the words "vacant and unoccupied," they should not be taken in a technical and narrow sense, but should be taken in their ordinary sense, as commonly used and understood, and, if the sense in which they are used is uncertain, they should be construed more favorably to the insured.
More recently, the Supreme Court applied this reasoning in Blaylock v. American Guarantee Bank Liability Insurance Company, supra:
[W]hen the language used [in an insurance contract] is subject to two or more reasonable interpretations, the construction which affords coverage will be adopted. Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Tex. 1977); United Founders Life Ins. v. Carey, 363 S.W.2d 236 (Tex.1962). The policy of strict construction against the insurer is especially strong when the court is dealing with exceptions and words of limitation. Ramsay v. Maryland American General Ins. Co., 533 S.W.2d 344 (Tex.1976).
We hold that the term "unoccupied property," as used in the insureds' policy covering the country house, does not limit the insureds to only one occupied house.
There is some evidence that the country house was occupied because there is evidence that the country house was used for living purposes, used as a place of abode, and it was a customary place of human habitation. The record demonstrates *298 the following: Mr. Wright would go out to the country house every day to check on and feed their cattle; he frequently, if not daily, took naps at the country house; on occasion Mrs. Wright would accompany her husband, and she would also take naps at the house; the yard at the country house was mowed twice a month; all of Mr. Wright's furniture was left in the country house; the country house retained all utilities except electricity up until the time of the fire; and the insureds would have moved back to the country house from the Rotan house had they found a tenant for the Rotan house. Therefore, we find that there is some evidence to support the trial court's implied finding that the country house was occupied at the time it was destroyed by fire.
The insurer also argues that the evidence is factually insufficient to support the trial court's "implied finding" that the country house was occupied at the time of the fire. In considering this factually insufficient evidence point, this Court must consider and weigh all the evidence and reverse the trial court only if the finding that the country house was occupied is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Dyson v. Olin Corporation, 692 S.W.2d 456, 457 (Tex.1985); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). The insurer argues that the following additional facts establish that the country house was unoccupied: the insureds had moved to the Rotan house; the insureds admitted that they were "living" in the Rotan house; the country house was listed by the insureds with a real estate agent for sale, and the listing was not revoked; Mrs. Wright's furniture had been moved out of the country house and into the Rotan house; the insurance on the contents of the country house was cancelled; telephone service had been terminated; the insureds never spent the night at the country house after moving to the Rotan house in January 1984; mail was received by the insureds at the Rotan house; and the insureds chose to live in the Rotan house.
Whether or not a house is "occupied" is generally a question of fact for the trier of fact. See Transcontinental Ins. Co. of New York v. Frazier, 60 S.W.2d 268 (Tex.Civ.App.Waco 1933, no writ); Hudson Ins. Co. v. McKnight, 58 S.W.2d 1088 (Tex.Civ.App.Waco 1933, no writ). We find that the evidence in the instant case presented a question of fact for determination by the trial court.
After carefully reviewing all the evidence, we hold that the trial court's implied finding, that the Wrights customarily used and occupied the country house as a place of human habitation or dwelling, is not so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.
The insurer's points of error are overruled.
The judgment of the trial court is affirmed.
NOTES
[1] TEX.R.CIV.P. 324(b) provides:
(b) Motion for New Trial Required. A point in a motion for new trial is a prerequisite to the following complaints on appeal:
(1) A complaint on which evidence must be heard such as one of jury misconduct or newly discovered evidence or failure to set aside a judgment by default;
(2) A complaint of factual insufficiency of the evidence to support a jury finding;
(3) A complaint that a jury finding is against the overwhelming weight of the evidence;
(4) A complaint of inadequacy or excessiveness of the damages found by the jury; or
(5) Incurable jury argument if not otherwise ruled on by the trial court. (Emphasis added)
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1873719/
|
586 So. 2d 994 (1991)
Dana Lee SELLERS
v.
STATE.
CR-89-1240.
Court of Criminal Appeals of Alabama.
August 23, 1991.
Dana Lee Sellers, pro se.
Hugh Davis, Gen. Counsel, Ala. Bd. of Pardons and Paroles, for the State.
PATTERSON, Presiding Judge.
Dana Lee Sellers appeals the trial court's denial of his petition for writ of habeas corpus, wherein he sought review of the action of the Alabama Board of Pardons and Paroles (hereinafter "the Board") revoking his parole.
While the trial court gave no reason for denying the petition other than the fact that it did so on the pleadings, its denial was proper, because review of an action of the Board is not by a habeas corpus proceeding. Generally, habeas corpus is inappropriate as a remedy to review the actions of an administrative board or commission, such as the Board. The appropriate remedy is an appeal pursuant to the Alabama Administrative Procedure Act, § 41-22-1 et seq., Code of Alabama 1975 (hereinafter "the Act"), if the administrative agency from which the appeal is taken comes within the purview of that Act. However, if the agency is exempted from the judicial review provisions of the Act *995 and there is no other provision for statutory review, review is by petition for writ of certiorari. See Ellard v. State, 474 So. 2d 743 (Ala.Cr.App.1984), aff'd, 474 So. 2d 758 (Ala.1985) (in the absence of a right to appeal or other adequate remedy, the writ of certiorari lies to review the rulings of an administrative board or commission). See also Ex parte Baldwin County Com'n, 526 So. 2d 564 (Ala.1988) (an extraordinary writ will not lie if there is a right of appeal).
The actions of the Board in granting or denying paroles cannot be reviewed under the Act's provisions for judicial review because, the Act exempts the Board from review. Section 41-22-3(3). No other right of review from the actions of the Board has been provided by statute. Thus, there being no statutory right to appeal or other adequate remedy at law for reviewing the actions of the Board in reference to the granting, denying, or revocation of paroles, certiorari is the appropriate remedy for review of such actions. Accordingly, the trial court's denial of Sellers's petition for writ of habeas corpus is due to be, and it is hereby, affirmed.
AFFIRMED.
All Judges concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600654/
|
186 P.3d 746 (2008)
In the Matter of Stephen J. JONES, Respondent.
No. 99,884.
Supreme Court of Kansas.
June 27, 2008.
*747 Alexander M. Walczak, deputy disciplinary administrator, argued the cause, and Stanton A. Hazlett, disciplinary administrator, was with him on the brief for petitioner.
Stephen J. Jones, respondent, argued the cause and was on the brief pro se.
ORIGINAL PROCEEDING IN DISCIPLINE
PER CURIAM:
This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Stephen J. Jones, a Wichita attorney admitted to the practice of law in Kansas in 1968.
This disciplinary case arose out of the respondent's conduct as the administrator of a probate estate. The estate was opened in 1998. By early 2000, all of the property of the estate had been liquidated and all of the debts had been paid. Although the estate could have been closed at that time and the proceeds distributed to the heirs, the respondent took no action to prepare the final accounting to close the estate and distribute the proceeds to the heirs.
In February 2006, one of the heirs filed a complaint with the Disciplinary Administrator's office. The respondent failed to respond to the complaint and failed to cooperate with the investigator assigned to handle the complaint. A subpoena duces tecum was issued to the respondent to appear before the investigator and produce certain records of the estate. The respondent appeared for the deposition, but he did not have all of the records of the estate's bank account. At the deposition he stated he would produce them, but he never did.
One week after the deposition, in late December 2006, the respondent petitioned the court for final settlement of the estate. On December 22, 2006, a journal entry of final settlement was filed and the estate was distributed to the heirs.
A hearing was held before a panel of the Kansas Board for Discipline of Attorneys as required by Kansas Supreme Court Rule 211 (2007 Kan. Ct. R. Annot. 304). The hearing panel concluded that the respondent violated *748 Kansas Rules of Professional Conduct (KRPC) 8.1(b) (2007 Kan. Ct. R. Annot. 553) (failure to respond to demand for information); KRPC 8.4(d) (2007 Kan. Ct. R. Annot. 559) (engaging in conduct prejudicial to administration of justice); KRPC 8.4(g) (engaging in conduct adversely reflecting on fitness to practice law); Kansas Supreme Court Rule 207(b) (2007 Kan. Ct. R. Annot. 288) (duties of the bar and judiciary); and Kansas Supreme Court Rule 211(b) (formal hearings).
The hearing panel unanimously recommends that the respondent be suspended from the practice of law for 2 years. Jones filed exceptions to the final hearing report pursuant to Supreme Court Rule 212(d) (2007 Kan. Ct. R. Annot. 317).
The panel made the following findings of fact:
"FINDINGS OF FACT
"The Hearing Panel finds the following facts, by clear and convincing evidence:
. . . .
"2. On June 23, 1998, John E. Regan, a resident of Wichita, Kansas, died intestate. Mr. Regan worked at Cessna, owned a liquor store in Wichita, and owned a home in Wichita. Mr. Regan never married and had no children. Mr. Regan's parents were deceased and his only heirs were his uncles, aunts, and cousins. None of his heirs lived in Kansas.
"3. Mr. Regan's cousin, Peter Regan, lived in Anchorage, Alaska. Peter Regan traveled from Alaska to Wichita, Kansas, to arrange for his cousin's burial and to initiate his estate.
"4. While in Wichita, Peter Regan met with Michael Jones regarding John E. Regan's estate. Michael Jones is the Respondent's brother. The Respondent and Michael Jones maintain separate law offices in the same building. Michael Jones recommended that the Respondent serve as Administrator of John E. Regan's estate.
"5. Peter Regan retained Michael Jones to probate his cousin's estate and paid $500 in attorneys fees.
"6. On July 1, 1998, Michael Jones filed a Petition for Appointment of Administrator and Special Administrator. The Court approved the Petition and the Respondent was appointed to serve as the Administrator of John E. Regan's estate.
"7. At the time of his death, Mr. Regan had a pending workers' compensation case against Cessna. In that case, the Respondent represented Mr. Regan. Shortly after Mr. Regan's death, the Respondent received a settlement check from Cessna in the amount of $32,469.60 in full settlement of Mr. Regan's workers' compensation case. After attorneys fees, Mr. Regan's estate received $22,708.45.
"8. Thereafter, Michael Jones filed an Amended Petition in the probate proceeding. According to the Amended Petition, John E. Regan had 16 heirs.
"9. After the probate case was filed, Peter Regan inventoried John E. Regan's real property, personal property, and stock at the liquor store. The Respondent paid creditors of the estate approximately $16,000.00 and liquidated the liquor store inventory.
"10. On October 29, 1999, the Court approved the sale of John E. Regan's home. On December 23, 1999, the Respondent completed the sale of the house and paid himself $4,045.56 as Administrator.
"11. After the Respondent liquidated the assets, paid the creditors, and paid himself, the probate estate consisted of $27,301.00. The Respondent placed the net proceeds in a non-interest bearing checking account in his name as administrator of the estate of John E. Regan.
"12. Thereafter, the Respondent took no action to distribute the net proceeds of the estate.
"13. Finally, on February 25, 2006, Dorothy Brown, one of the heirs, filed a complaint with the Disciplinary Administrator's office against the Respondent for his conduct as Administrator of the estate. On March 7, 2006, the Disciplinary Administrator forwarded a copy of Ms. Brown's letter to the Respondent and requested *749 that the Respondent provide a written response to the complaint within fifteen days. The Respondent failed to respond to the request for a written response.
"14. On May 24, 2006, the Disciplinary Administrator again requested in writing that the Respondent provide a written response to the complaint. The Respondent did not respond to the second request for a written response to the complaint.
"15. On July 18, 2006, the Disciplinary Administrator wrote to the Respondent for a third time. The Disciplinary Administrator requested a written response to the complaint filed by Ms. Brown. The Respondent did not provide a written response to the complaint in response to that third request. Thereafter, the Disciplinary Administrator called the Respondent and spoke to him by telephone. The Respondent promised to immediately send a written response via facsimile. The Respondent did not do so.
"16. On September 19, 2006, the Disciplinary Administrator wrote to the Respondent and informed him that the case would be docketed for investigation.
"17. On October 6, 2006, John Seeber, the attorney appointed to conduct an investigation of the complaint, wrote to the Respondent and requested that the Respondent provide a written response to the complaint. The Respondent failed to respond.
"18. Thereafter, Mr. Seeber caused a subpoena to be issued requiring the Respondent's appearance for a deposition. On December 8, 2006, Mr. Seeber took the Respondent's deposition. Additionally, Mr. Seeber requested that the Respondent provide certain bank records. The Respondent failed to provide the requested records.
"19. On December 15, 2006, the Respondent petitioned the Court for final settlement of the estate. On December 22, 2006, the Respondent finally made a distribution of the assets to the heirs.
"20. Between December, 1999, and December, 2006, Peter Regan and other heirs contacted the Respondent on a number of occasions seeking information regarding the distribution of the estate's net assets. Additionally, the Respondent received monthly statements from the Intrust Bank regarding the estate's checking account. Despite the repeated reminders to distribute the net assets of the estate, the Respondent took no action.
"21. Three of the heirs slated to inherit from John E. Regan's estate died after the estate should have been distributed but before it was actually distributed. The three heirs lost the opportunity to benefit from their inheritance."
The respondent filed exceptions to the panel's findings of fact contained in paragraphs 4, 9, 10, 11, and 18.
STANDARD OF REVIEW
The applicable standards of review in disciplinary cases are well settled:
"In a disciplinary proceeding, this court considers the evidence, the findings of the hearing panel, and the arguments of the parties and determines whether violations of KRPC exist and, if they do, what discipline should be imposed. Attorney misconduct must be established by substantial, clear, convincing, and satisfactory evidence. In re Comfort, 284 Kan. 183, 190, 159 P.3d 1011 (2007); In re Lober, 276 Kan. 633, 636, 78 P.3d 442 (2003); Supreme Court Rule 211(f) (2006 Kan. Ct. R. Annot. 284).
"This court views the findings of fact, conclusions of law, and recommendations made by the hearing panel as advisory only, but we give the final hearing report the same dignity as a special verdict by a jury or the findings of a trial court. Therefore, the hearing panel's report will be adopted where amply sustained by the evidence, but not where it is against the clear weight of the evidence. When the panel's findings relate to matters about which there was conflicting testimony, this court recognizes that the panel, as the trier of fact, had the opportunity to observe the witnesses and evaluate their demeanor. We do not reweigh the evidence or assess the credibility of witnesses. 284 Kan. at 190, 159 P.3d 1011. Rather, this *750 court examines any disputed findings of fact and determines whether clear and convincing evidence supports the panel's findings. In re Kellogg, 269 Kan. 143, 153, 4 P.3d 594 (2000). If so, the findings will stand. Moreover, it is not necessary to restate the entire record to show substantial competent evidence to support the hearing panel's findings. 269 Kan. at 153[, 4 P.3d 594]." In re Trester, 285 Kan. 404, 408-409, 172 P.3d 31 (2007).
EXCEPTIONS TO FINDINGS OF FACT
We turn now to the exceptions filed to the findings of fact.
There are fatal flaws in all five exceptions which preclude our consideration thereof on the merits. Each of the five findings of fact to which exceptions have been made were set forth in essentially the same language in the formal complaint filed herein. At the hearing before the panel, respondent admitted all factual allegations set forth in the formal complaint. Additionally, respondent does not cite to the record in his brief in support of his exceptions, nor does he argue in his brief that any of the findings of fact to which he filed exceptions are not supported by the record. In re Bishop, 285 Kan. 1097, 1106, 179 P.3d 1096 (2008) (exceptions not argued or supported by citation to the record in the respondent's brief are deemed abandoned).
We turn to the conclusions of law contained in the final hearing report.
"CONCLUSIONS OF LAW
"1. Based upon the findings of fact and the Respondent's stipulation at the hearing, the Hearing Panel concludes as a matter of law that the Respondent violated KRPC 8.1(b), KRPC 8.4(d), KRPC 8.4(g), Kan. Sup.Ct. R. 207(b), and Kan. Sup.Ct. R. 211(b). . . .
"2. `It is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice.' KRPC 8.4(d). Justice required the Respondent to distribute the net proceeds of John E. Regan's estate in late 1999 or early 2000. His failure to do so for a period of seven years resulted in significant prejudice to the administration of justice. Accordingly, the Hearing Panel concludes that the Respondent violated KRPC 8.4(d).
"3. `It is professional misconduct for a lawyer to . . . engage in any other conduct that adversely reflects on the lawyer's fitness to practice law.' KRPC 8.4(g). The Respondent owed a duty to provide reasonable communication to John E. Regan's heirs. The Respondent failed to do so. The Respondent owed a duty to John E. Regan's heirs to distribute the net proceeds of the estate in a diligent fashion. Again, the Respondent failed to do so. The Respondent's failures in his position as Administrator adversely reflect on his fitness to practice law. As such, the Hearing Panel concludes that the Respondent violated KRPC 8.4(g).
"4. Lawyers must cooperate in disciplinary investigations. KRPC 8.1(b) and Kan. Sup.Ct. R. 207(b) provide the requirements in this regard. `[A] lawyer in connection with a . . . disciplinary matter, shall not: . . . knowingly fail to respond to a lawful demand for information from [a] . . . disciplinary authority, . . .' KRPC 8.1(c).
`It shall be the duty of each member of the bar of this state to aid the Supreme Court, the Disciplinary Board, and the Disciplinary Administrator in investigations concerning complaints of misconduct, and to communicate to the Disciplinary Administrator any information he or she may have affecting such matters.' Kan. Sup.Ct. R. 207(b).
The Respondent knew that he was required to forward a written response to the initial complaint he had been instructed to do so in writing by the Disciplinary Administrator and by Mr. Seeber. Additionally, the Respondent knew that he was to provide certain bank records to Mr. Seeber, as Mr. Seeber asked him directly to do so. Because the Respondent knowingly failed to provide a written response to the initial complaint filed by Ms. Brown as requested by the Disciplinary Administrator and Mr. Seeber and because the Respondent knowingly failed to provide *751 the bank records requested by Mr. Seeber, the Hearing Panel concludes that the Respondent violated KRPC 8.1(b) and Kan. Sup.Ct. R. 207(b).
"5. The Kansas Supreme Court Rules require attorneys to file Answers to Formal Complaints. Kan. Sup.Ct. R. 211(b) provides the requirement:
`The Respondent shall serve an answer upon the Disciplinary Administrator within twenty days after the service of the complaint unless such time is extended by the Disciplinary Administrator or the hearing panel.' Kan. Sup.Ct. R. 211(b).
In this case, the Respondent violated Kan. Sup.Ct. R. 211(b) by failing to file an Answer to the Formal Complaint. Although the Respondent appeared at the hearing and admitted the allegations of the Formal Complaint, because there is no express procedure for default, his failure to file an answer or other response to the Formal Complaint caused the Disciplinary Administrator to expend unnecessary time to prepare for the hearing and call witnesses to the hearing who might not have been required. Thus, the Hearing Panel concludes that the Respondent violated Kan. Sup.Ct. R. 211(b)."
The respondent filed exceptions to the panel's conclusions of law in paragraphs 1, 2, and 3.
EXCEPTION TO CONCLUSION OF LAW PARAGRAPH 1
Conclusion No. 1 is simply an enumeration of KRPC and Supreme Court Rules found to have been violated by respondent. Subsequent paragraphs set forth the violations individually.
EXCEPTION TO CONCLUSION OF LAW PARAGRAPH 2
The respondent takes issue with the panel's conclusion that his failure to close the estate for 7 years was conduct prejudicial to the administration of justice in violation of KRPC 8.4(d). In support thereof, he argues that the panel's findings were based on his actions as administrator, not his actions in actually practicing law. Moreover, he argues that the responsibility for closing the estate rested with his brother as the attorney for the estate, not with him as the administrator and, thus, the delay in closing the estate was not his fault. The violation of KRPC 8.4(d) as charged in the formal complaint was admitted by respondent at the formal hearing and, accordingly, cannot be a proper subject of an exception.
EXCEPTION TO CONCLUSION OF LAW PARAGRAPH 3
Respondent reasserts his position that KRPC 8.4(g) is inapplicable as the charged misconduct is based on his conduct while acting as an administrator of an estate as opposed to actions of an attorney. There is no merit in this contention.
This court has repeatedly held that a lawyer is bound by the Code of Professional Responsibility in "every capacity in which the lawyer acts, whether acting as a lawyer or not." State v. Russell, 227 Kan. 897, 902, 610 P.2d 1122, cert. denied 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980) (rules of professional conduct apply to lawyer campaigning for public office). As the Disciplinary Administrator notes, this court has disciplined attorneys for their conduct as trustees, executors, administrators, and conservators. See In re Wright, 276 Kan. 357, 76 P.3d 1018 (2003) (attorney who converted money while acting with power of attorney found to have violated KRPC 1.15 [safekeeping property], KRPC 8.4[a] [violating rules of professional conduct], KRPC 8.4[c] [conduct involving dishonesty], KRPC 8.4[d] [conduct prejudicial to administration of justice], and KRPC 8.4[g] [conduct that adversely reflects on fitness to practice law]); In re Rickman, 266 Kan. 658, 972 P.2d 759 (1999) (attorney acting as administrator of an estate violated KRPC 8.4[c] [conduct involving dishonesty] for converting estate funds and KRPC 8.4[d] [conduct prejudicial to administration of justice] and KRPC 8.4[g] [conduct that adversely reflects on fitness to practice law] for failing to comply with court order to appear and for lack of diligence in locating the estate file); In re Williamson, 260 Kan. 568, 918 P.2d 1302 *752 (1996) (attorney's conduct as executor in converting estate funds and in failing to act with diligence in handling estate violated KRPC 1.3 [diligence], KRPC 1.15 [safekeeping property], and KRPC 8.4[c] and [d] [conduct involving dishonesty and conduct prejudicial to the administration of justice]); State v. Freeman, 229 Kan. 639, 629 P.2d 716 (1981) (attorney disciplined for mishandling funds as co-trustee).
Respondent further argues that he should not be held accountable for the delay in closing the estate because there was nothing more he could do. Thus, he contends, he has no fault. This contention is without merit. The respondent, as the administrator, had the duty to prepare a final accounting to be submitted with the petition for final settlement. K.S.A. 59-1502; K.S.A. 59-2247. At his deposition, the respondent admitted that without an accounting, the attorney for the estate could not do anything to close the estate.
EXCEPTION TO CONCLUSION OF LAW PARAGRAPHS 4 AND 5
Respondent argues that paragraphs 4 and 5 of the conclusions of law are inappropriate. He filed no exception to these paragraphs and, accordingly, these paragraphs should be deemed admitted. See Supreme Court Rule 212(c) (2007 Kan. Ct. R. Annot 317) ("Any part of the hearing report not specifically excepted to shall be deemed admitted.").
However, because respondent's argument that the recommended discipline is too harsh is so intertwined with his claims as to these conclusions, they will be discussed briefly.
The respondent acknowledges in his brief that "technically" he is guilty of failing to respond to the initial inquiry by the Disciplinary Administrator. He argues, however, that he did not respond because he "felt that this was the duty and obligation of the attorney for the estate and relied on the response filed by that entity."
The respondent also argues about the conclusion in paragraph 4 concerning his failure to provide the bank records that John Seeber requested in the deposition. He contends that he did provide Seeber with information showing the account balance and that the "balances were simply monthly statements and many of them were unavailable even though unchanged." However, he does not explain how this excuses his omission of satisfying the subpoena or his failure to supply the missing records later as was discussed in the deposition.
The respondent also complains about paragraph 5 of the final hearing report in which the panel concluded that the respondent's failure to file an answer to the formal complaint caused the Disciplinary Administrator to expend unnecessary time to prepare for the hearing and in producing witnesses to testify at the hearing. The respondent argues that this could have been avoided had the Disciplinary Administrator either issued a request for admissions "or simply accept[ed] the respondent's statement that the allegations were true." He suggests that the "expense" incurred by the Disciplinary Administrator's office "appears to be due to over-enthusiastic prosecution by the Disciplinary Administrator rather than necessity."
The Disciplinary Administrator responds by noting that Rule 211(b) required the respondent to file an answer to the formal complaint and, because there is no default judgment procedure in Kansas, it has the duty to present evidence at the hearing to prove the allegations of the formal complaint by clear and convincing evidence. See Supreme Court Rule 211(f). In this case, the respondent failed to cooperate and file responses as required, up to and including the formal complaint.
It was the respondent's duty under the rules to file an answer. It is not the duty of the Disciplinary Administrator's office to issue requests for admissions where there has been a failure to file an answer. Moreover, given the respondent's complete failure to respond at any point prior to the formal hearing, there is no reason to believe that even if a request for admissions had been issued, the respondent would have responded.
The previous statements as to the appropriate standards of review are equally applicable *753 to the panel's conclusions of law. We conclude the findings of fact are supported by substantial, clear, convincing, and satisfactory evidence which amply supports the panel's conclusions of law. We adopt the panel's findings of fact and conclusions of law. We turn now to determining the appropriate discipline to be imposed.
RECOMMENDED DISCIPLINE
The panel stated:
"In making this recommendation for discipline, the Hearing Panel considered the factors outlined by the American Bar Association in its Standards for Imposing Lawyer Sanctions (hereinafter `Standards'). Pursuant to Standard 3, the factors to be considered are the duty violated, the lawyer's mental state, the potential or actual injury caused by the lawyer's misconduct, and the existence of aggravating or mitigating factors.
"Duty Violated. The Respondent violated his duty to John E. Regan's heirs to diligently administer the estate. Additionally, the Respondent violated his duty to the legal profession to cooperate in the disciplinary investigation.
"Mental State. The Respondent knowingly violated his duties.
"Injury. As a result of the Respondent's misconduct, the Respondent caused actual injury. Three of the heirs died before they realized their inheritance. The Respondent's misconduct cannot be remedied.
"Aggravating or Mitigating Factors. Aggravating circumstances are any considerations or factors that may justify an increase in the degree of discipline to be imposed. In reaching its recommendation for discipline, the Hearing Panel, in this case, found the following aggravating factors present:
"Prior Disciplinary Offenses. The Respondent has been previously disciplined on two occasions. In 1987, the Disciplinary Administrator informally admonished the Respondent for neglecting an estate matter for a period of five years. On October 29, 1993, the Kansas Supreme Court placed the Respondent on probation for having neglected four cases. In re Jones, 253 Kan. 836, 861 P.2d 1340 (1993).
"A Pattern of Misconduct. The Respondent failed to distribute the net proceeds of the estate for a period of seven years despite regular reminders to do so. Accordingly, the Respondent engaged in a pattern of misconduct.
"Multiple Offenses. The Respondent violated KRPC 8.1, KRPC 8.4(d), KRPC 8.4(g), Kan. Sup.Ct. R. 207(b), and Kan. Sup.Ct. R. 211(b). As such, the Respondent committed multiple offenses.
"Bad Faith Obstruction of the Disciplinary Proceeding by Intentionally Failing to Comply with Rules or Orders of the Disciplinary Process. The Respondent knew that he was required to provide a written response to the complaint filed by Ms. Brown. The Respondent never filed a response. The Respondent knew that he was required to provide certain bank records. The Respondent never provided the bank records. The Hearing Panel, therefore, concludes that the Respondent obstructed the disciplinary proceeding.
"Vulnerability of Victim. The estate of John E. Regan was vulnerable to the Respondent's misconduct because none of the heirs lived in this area.
"Substantial Experience in the Practice of Law. The Kansas Supreme Court admitted the Respondent to practice law in 1968. At the time the Respondent engaged in misconduct, the Respondent had been practicing law for a period of more than 30 years. Accordingly, the Hearing Panel concludes that the Respondent had substantial experience in the practice of law at the time he engaged in the misconduct.
"Indifference to Making Restitution. To date, the Respondent has made no effort to pay interest to the heirs of the estate of John E. Regan for failing to distribute the net proceeds of the estate for a period of seven years.
"Mitigating circumstances are any considerations or factors that may justify a reduction in the degree of discipline to be imposed. In reaching its recommendation for discipline, the Hearing Panel, in this *754 case, found the following mitigating circumstances present:
"Absence of a Dishonest or Selfish Motive. Dishonesty and selfishness were not motivating factors in this case.
"The Present and Past Attitude of the Attorney as Shown by the Respondent's Cooperation During the Hearing and the Respondent's Acknowledgment of the Transgressions. Despite his failure to cooperate prior to the hearing, at the hearing, the Respondent fully admitted the misconduct.
"Remoteness of Prior Offenses. The discipline imposed in 1987 and 1993, is remote in time . . . but not in character to the misconduct in this case.
"In addition to the above-cited factors, the Hearing Panel has thoroughly examined and considered the following Standards:
`Suspension is generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed to the profession, and causes injury or potential injury to a client, the public, or the legal system. Standard 7.2.
. . . .
"The Deputy Disciplinary Administrator recommended that the Respondent be indefinitely suspended from the practice of law in the State of Kansas. The Respondent recommended that he be censured for the misconduct.
"Based upon the findings of fact, conclusions of law, and the Standards listed above, the Hearing Panel unanimously recommends that the Respondent be suspended for a period of two years from the practice of law in the State of Kansas.
"Costs are assessed against the Respondent in an amount to be certified by the Office of the Disciplinary Administrator."
DISCUSSION AS TO APPROPRIATE DISCIPLINE
Supreme Court Rule 212(f) provides:
"The recommendation of the panel or the Disciplinary Administrator as to sanctions to be imposed shall be advisory only and shall not prevent the Court from imposing sanctions greater or lesser that those recommended by the panel or the Disciplinary Administrator."
Respondent complains that the recommended discipline is too harsh. In support thereof he reiterates his position that all of his KRPC offenses occurred while he was acting as an administrator rather than as an attorney and, accordingly, cannot be grounds for discipline thereunder. This position has no merit, as we have previously discussed.
Respondent again argues the failure to respond to the initial complaint was due to his reliance on his brother to handle the matter, who he blames for not closing the estate. Respondent also argues the prior offenses should not have been considered by the panel.
Respondent concludes his brief with the following statement:
"The conclusions and recommendations of the Hearing Panel are far more than this particular set of circumstances demands. The failure to cooperate was only in the failure to answer the charges, they were thereafter admitted at the hearing and it was essentially the decision of the prosecutor that no suggestion of an admission or a request for admissions was filed. The respondent regrets the situation and would submit that the failure to complete the estate in a timely fashion should not be laid solely at his feet. The attorney for the estate failed to respond to either the respondent or to the heirs. Respondent would submit that censure would be the proper decision that is fully supported by the evidence."
It is clear that respondent does not appreciate the seriousness of his misconduct. During the 7 years the estate remained open unnecessarily, three of the heirs died. Respondent was previously disciplined for a similar delay in closing an estate and was placed on probation for neglect of four cases. In the latter case, the panel noted: "`Respondent is guilty of serious misconduct. Suspension from the practice of law is the customary and appropriate discipline for such conduct; however, the panel is loathe to recommend such unconditional discipline in *755 this case.'" In re Jones, 253 Kan. 836, 838, 861 P.2d 1340 (1993). Despite his prior disciplinary experience, he, again, delayed closing an estate, keeping it open even longer than the earlier case. He, obviously, found no obligation to follow our rules and file a response to the initial complaint or to file an answer to the formal complaint. Respondent, apparently, learned little from his prior disciplinary experiences.
We conclude that the appropriate discipline herein is indefinite suspension from the practice of law in Kansas.
IT IS THEREFORE ORDERED that Stephen J. Jones be and he is hereby indefinitely suspended from the practice of law in Kansas, effective upon the filing of this opinion.
IT IS FURTHER ORDERED that Stephen J. Jones shall comply with Supreme Court Rule 218 (2007 Kan. Ct. R. Annot. 337).
IT IS FURTHER ORDERED that this opinion be published in the official Kansas Reports and that respondent pay the costs of these proceedings.
NUSS, J., not participating.
LEBEN, J., assigned.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600645/
|
186 P.3d 321 (2008)
220 Or. App. 362
Troy Randall COLE, Petitioner,
v.
BOARD OF PAROLE AND POST-PRISON SUPERVISION, Respondent.
A125008.
Court of Appeals of Oregon.
Argued and Submitted April 30, 2008.
Decided June 11, 2008.
Irene B. Taylor, Deputy Public Defender, argued the cause for petitioner. With her on the opening brief were Peter A. Ozanne, Executive Director, and Peter Gartlan, Chief Defender, Legal Services Division, Office of Public Defense Services. With her on the *322 reply brief was Peter Gartlan, Chief Defender, Legal Services Division.
Ryan Kahn, Assistant Attorney General, argued the cause for respondent. With him on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.
Before HASELTON, Presiding Judge, and ARMSTRONG, Judge, and ROSENBLUM, Judge.
HASELTON, P.J.
Petitioner seeks review of an order of the Board of Parole and Post-Prison Supervision, based on State ex rel Gonzalez v. Washington, 182 Or.App. 112, 47 P.3d 537 (2002), that denied him re-release after his parole had been revoked and set his prison term for 79 months. We reject without discussion each of petitioner's arguments except those pertaining to the applicability of OAR 255-75-096,[1] as addressed in Gonzalez. As explained below, we affirm the board's disposition, adhere to Gonzalez, and write only to correct one misstatement in Gonzalez that is internally irreconcilable with other, correct statements in Gonzalez and with our ultimate holding in that case.
The question in this case, and in Gonzalez, concerned the board's authority to deny re-release on parole to parole violators. As explained in Gonzalez, there is no doubt that the board has statutory authority to do this. 182 Or.App. at 116-18, 47 P.3d 537. The arguments in Gonzalez, as here, related to certain administrative rules that pertain to re-release on parole. In Gonzalez, in addressing the board's authority under its own rules, we noted that OAR 255-75-090 required the board to impose as sanctions for parole violations certain "additional prison term[s]" between four and 12 months in length unless the board "denies parole." 182 Or.App. at 117, 47 P.3d 537. We further noted that OAR 255-75-095 contains "aggravation" and "mitigation" factors that can be applied to the terms described in OAR XXX-XXX-XXXX. 182 Or.App. at 117, 47 P.3d 537.
We then addressed the applicability of OAR 255-75-096, which is the focus of the parties' present dispute: "In contrast [to OAR 255-75-090 and OAR 255-75-095], OAR 255-75-096 expressly provided authority for the board to deny parole after a violation and to require, instead, the service of the remainder of a sentence." 182 Or.App. at 117-18, 47 P.3d 537. Later, we reiterated that point:
"[T]here are indications outside the text of OAR 255-75-090 that the board's discretion was not fettered by OAR 255-75-090's presumptive terms when it decided to revoke parole and require service of the remainder of a sentence. In OAR 255-75-096, the board was expressly granted authority to deny parole and require service of the remainder of a sentence * * *."
Id. at 118-19, 47 P.3d 537. We adhere to those statements: OAR 255-75-096 permitted the board to deny parole and require an inmate to serve out a sentence.
The problemwhich petitioner emphasizes hereis that, in Gonzalez, after making the first of the above-quoted statements and before making the second, we also said the following:
"The language in OAR 255-75-090 indicated that its presumptive prison terms did not apply to parole violators like appellant whose parole had been revoked. Said differently, OAR 255-75-090 through OAR 255-75-096 were not the rules that governed the `rerelease' of revoked inmates."
182 Or.App. at 118, 47 P.3d 537 (emphasis added). The emphasized statement contains a typographical error. It should have read: "Said differently, OAR 255-75-090 through OAR 255-75-095 were not the rules that governed the `rerelease' of revoked inmates." (Emphasis added.) As the other portions of the text in Gonzalez, quoted above, correctly *323 recognized, OAR 255-75-096 did, in fact, govern the "rerelease" of revoked inmates.
Thus, with that clarification, we adhere to our conclusion in Gonzalez that the board had the authority to revoke an inmate's parole and require the service of the remainder of the inmate's sentence or, as was the case in Gonzalez and is the case here, to require the inmate to serve the sentence until shortly before the statutory "good time" date. Accordingly, the board's action here was authorized under OAR 255-75-096.
Affirmed.
NOTES
[1] All references to OAR 255-75-096 are to the version in effect when petitioner committed the crime. The pertinent portion of that rule stated: "The Board may deny reparole consideration and require the parole violator to serve to the statutory good time date." OAR 255-75-096(1). The pertinent portion of the current version of OAR XXX-XXX-XXXX(1) provides that "the Board may deny rerelease on parole and set the parole release date up to two (2) days before the statutory good time date."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/999960/
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 98-4713
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
ALEJANDRO CARDENAS GONZALEZ, a/k/a Alejandra
Gonzalez Cardenas,
Defendant - Appellant.
Appeal from the United States District Court for the Middle Dis-
trict of North Carolina, at Durham. William L. Osteen, District
Judge. (CR-97-193)
Submitted: September 30, 1999 Decided: October 5, 1999
Before NIEMEYER, WILLIAMS, and MICHAEL, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Daniel J. Clifton, Charlotte, North Carolina, for Appellant.
Walter C. Holton, Jr., United States Attorney, Clifton T. Barrett,
Assistant United States Attorney, Greensboro, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Alejandro Cardenas Gonzalez pled guilty to conspiracy to pos-
sess cocaine with intent to distribute, see 21 U.S.C. § 846 (1994),
and was sentenced to a term of 115 months imprisonment. The dis-
trict court informed him after imposing sentence that, if he wished
to appeal, his appeal must be filed within ten days after the entry
of judgment. The judgment order was entered on February 6, 1998.
On September 21, 1998, Gonzalez filed an application to proceed in
forma pauperis and indicated his desire to appeal from the judg-
ment. The district court treated this document as a notice of
appeal, see Smith v. Barry, 502 U.S. 244, 248 (1992), and granted
the motion to proceed in forma pauperis.
Rule 4(b) of the Federal Rules of Appellate Procedure requires
that a notice of appeal must be filed within ten days of judgment.
The district court may extend the time for filing a notice of
appeal for thirty days upon a showing of excusable neglect with or
without a motion being filed. The district court may not otherwise
extend the time for filing a notice of appeal. See United States
v. Reyes, 759 F.2d 351, 353 (4th Cir. 1985); United States v.
Schuchardt, 685 F.2d 901 (4th Cir. 1982). Gonzalez's notice of
appeal was filed well beyond the forty-day appeal period. The
notice of appeal was thus ineffective.
We therefore dismiss the appeal. We dispense with oral argu-
ment because the facts and legal contentions are adequately pre-
2
sented in the materials before the court and argument would not aid
the decisional process.
DISMISSED
3
|
01-03-2023
|
07-04-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1873734/
|
752 N.W.2d 35 (2008)
IN RE D.B.
No. 08-0262.
Court of Appeals of Iowa.
April 9, 2008.
Decision without published opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1986490/
|
660 F. Supp. 351 (1987)
H/R STONE, INC., Plaintiff,
v.
PHOENIX BUSINESS SYSTEMS, INC., the Ultimate Corp., Ernest T. Sabato, Michael London and Grant C. Beeney, Defendants.
No. 82 Civ. 3633 (JMW).
United States District Court, S.D. New York.
May 18, 1987.
*352 Richard Raysman, of Brown, Raysman & Millstein, New York City, for plaintiff.
Robert M. Trien, New York City, for defendants.
OPINION
WALKER, District Judge:
INTRODUCTION
The instant controversy arises out of a contract under which Plaintiff H/R Stone, Inc. ("H/R Stone"), a New York corporation, purchased computer hardware and software from Defendant Phoenix Business Systems, Inc. ("Phoenix"), a New Jersey corporation. Plaintiff also has named as defendants The Ultimate Corp. ("Ultimate"), a New Jersey corporation and supplier of computer hardware and software, for whom Phoenix acted as exclusive sales agent and authorized dealer in the New York area, Michael London ("London"), the vice president and a director of Phoenix, Ernest J. Sabato ("Sabato"), the president of Phoenix and an Ultimate officer, and Grant C. Beeney ("Beeney"), the marketing manager of Phoenix.
Plaintiff alleges claims sounding in breach of contract, breach of warranty, and fraud, and seeks compensatory damages of $2,268,000, including lost profits, as well as punitive damages of not less than $1,000,000, against Phoenix and Ultimate. Defendant Phoenix filed a counterclaim *353 against H/R Stone, alleging that plaintiff breached an implied covenant of good faith and fair dealing by unjustifiably refusing both to approve software specifications and to pay Phoenix all sums due under the computer contract.[1]
At the close of plaintiff's case, the Court dismissed plaintiff's fraud claims. This resulted in the elimination of Defendants Sabato, London, and Beeney from the suit, as well as any claim of punitive damages. The Court also found an insufficient nexus between any defendant conduct and the termination of plaintiff's business, and therefore eliminated that damage issue from the case. During plaintiff's direct case in this non-jury trial, the Court bifurcated the trial and concluded the trial as to liability only.
STATEMENT OF FACTS
During the instant trial, the Court listened to the several witnesses called by each side, and carefully appraised their credibility, examined the exhibits in evidence, and heard extensive arguments by counsel. Based thereon, and after a careful post-trial review of the Court's trial notes, the Court finds the following facts.
Prior to its sale in 1981, Plaintiff H/R Stone served as an advertising representative for various radio stations, selling air time to advertising agencies and receiving a commission based on the amount of its sales. Plaintiff was organized with a central New York office and eight branch offices located at major media markets throughout the United States. In 1979, with rising competition in radio advertising, plaintiff's President, Saul Frischling ("Frischling"), decided that his company should upgrade its computer systems.
In late 1979, Frischling initiated negotiations with representatives of Defendant Ultimate, a supplier of computer hardware and software, and Defendant Phoenix, Ultimate's sales agent. These negotiations culminated in a May 9, 1980 agreement signed by representatives of H/R Stone and Phoenix. Under the agreement, Phoenix promised to furnish, within 150 days, both computer hardware and software to plaintiff. Paragraph 2 of this agreement specified that H/R Stone would pay Phoenix a total of $220,000: $160,000 for computer hardware, and an additional $60,000 for software. The agreement also stated that Phoenix would provide hardware "to cover the 8 remote locations at a cost not to exceed $8,000 per installation."
Plaintiff paid a ten percent downpayment of $22,000 when the contract was executed. On subsequent dates, plaintiff made $146,000 in additional payments to Phoenix,[2] bringing plaintiff's total payments to Phoenix to $168,000. Under the May 9 agreement, Phoenix in turn promised that "upon payment of the contract price Seller shall deliver to Buyer all source and object programs plus system and operations documentation."
The contract also provided that Phoenix would forfeit five percent of the software price if the software was not completed within 150 days of the agreement. Phoenix agreed to further penalties if the software was not completed within 210 days of the agreement. In addition, the contract specified penalties for any failure by Phoenix *354 to install the promised hardware promptly.
The contract included a clause limiting plaintiff's remedies in the case of a defendant breach:
[I]f the Software is not in accordance with the mutually agreed upon design specification, Buyer [plaintiff] shall have the right to return the Equipment and to receive a refund on any advance made toward the Equipment Price. Furthermore, Buyer shall not be required to make any further payments of the Software Price, and all right, title, and interest in and to that portion of the Software which has been completed shall belong to Buyer.
During 1980 and 1981, Defendant Ultimate sold computer hardware and software to Phoenix, including the equipment which Phoenix in turn sold to H/R Stone. At the same time, Ultimate hired Automated Systems Design ("ASD") as a subcontractor to design computer software for use by plaintiff. Plaintiff's software purchase under the contract was divided into two categories: business software and research software. The business software purchased by plaintiff included some 85 "BASIC" programs and 99 more specialized programs. Plaintiff signed an "acceptance" of defendants' business software specifications on July 29, 1980.
In July 1980, H/R Stone approved business software specifications, and by January 1981 defendants had completed design work on the business software programs. Plaintiff formally accepted the business software on March 17, 1981, and in this action makes no complaint as to the quality of defendants' business systems. Instead, plaintiff's action arises out of dissatisfaction with defendants' development and installation of the research software systems.
During early 1980, Plaintiff H/R Stone and Defendants Phoenix and Ultimate, as well as ASD, participated in a number of meetings which focused on plaintiff's research software needs. At these meetings, plaintiff told defendants that a so-called "reach and frequency formula" formed an important part of H/R Stone's software package. A "reach and frequency formula" refers to a method for determining how many listeners will hear an advertisement broadcasted on a particular segment of a radio station's programming. A computer program allowing plaintiff to calculate a reach and frequency formula would estimate the number of listeners hearing a particular program on any station, and the appropriate rate to charge for advertising spots on that program. H/R Stone provided ASD with some information on the method used for calculating a reach and frequency formula, including a new math slide rule, a Westinghouse booklet, a handheld calculator, and calculator cards. However, Inge Jacobson, plaintiff's research director, admitted that plaintiff did not supply ASD with all information needed for writing reach and frequency formula software programs. ASD's President Howard Marks credibly testified that he was unable to complete the reach and frequency program based on the information provided.
Under its subcontract with Ultimate, ASD was required to prepare specifications for plaintiff's research software, including plaintiff's reach and frequency formula programs. ASD's attempts to develop acceptable specifications were hindered by plaintiff's failure or delay in providing ASD with certain background information that ASD needed to develop such specifications. On October 29, 1980, ASD presented incomplete specifications to H/R Stone, which Stone rejected. By this time, ASD had spent more than $90,000 to perform its subcontract obligations. ASD thereafter phased out its work on plaintiff's programs. ASD was ultimately paid only $32,000. Despite frequent inquiries from plaintiff, neither ASD nor any defendant or its agent ever produced complete research specifications, or any specifications for reach and frequency formula programs.
During early 1981, plaintiff's President, Frischling, received complaints from employees working in plaintiff's branch offices, who insisted that their divisions needed the research systems promised by Phoenix. On May 5, 1981, plaintiff provided *355 Phoenix with a letter which included a detailed list of complaints regarding Phoenix's alleged failure to perform under the contract, a statement that plaintiff viewed Phoenix as having breached the contract, and a threat that plaintiff planned to bring suit against Phoenix and "engage the services of another company to complete the portion of this project left undone by you...."
In response to the May 5 letter, Phoenix entered into further negotiations with plaintiff. These negotiations led to a supplementary letter agreement, dated July 13, 1981, under which Phoenix approved various deadlines for installation of specific hardware and software programs. Phoenix also promised to deliver to H/R Stone "immediately" the source code "for software to date" and to complete the software system, "pursuant to approved specifications," within ninety days. Using a new software supplier, Phoenix supplied plaintiff with a number of software research systems by early October 1981.
However, Phoenix never supplied plaintiff with the promised source code, without which plaintiff was unable to develop new software programs or make corrections to old ones. At trial, an ASD employee testified credibly that he knew the source code, but that defendant officers instructed him to withhold this code from plaintiff. Similarly, an employee of plaintiff credibly testified that when he asked ASD for the source code, he was told that it would not be provided until H/R Stone's difficulties with Ultimate and Phoenix were resolved.
After October 1981, plaintiff and defendants became involved in an increasingly hostile exchange of correspondence, and defendants ceased all further work on plaintiff's computer system. At a meeting between plaintiff and defendant in October 1981, the latter's officers refused to turn over the source code, which they had in their possession, absent a settlement of the dispute. Subsequently, all attempts at negotiating a settlement failed.
Regarding the agreement to supply hardware for the eight remote locations set forth in Schedule A of the May 9, 1980 contract, Phoenix, in a letter dated August 11, 1980, described a system costing less than the $8,000 contract price. H/R Stone rejected the system, since its units required use of modems or telephone hook-ups to the main frame at the home office.
Commencing in 1981, plaintiff suffered several business setbacks, including the loss of some important clients. Two clients that left H/R Stone in 1981, radio stations KMEL in San Francisco and WYNY in New York, previously had accounted for 30 percent of plaintiff's business. However, at trial the Court heard substantial credible evidence that H/R Stone remained a relatively healthy business, despite its 1981 difficulties. Further, most of plaintiff's difficulties, such as the loss of a few valued employees and clients, bore scant relationship to plaintiff's problems with its computer system. On November 30, 1981, H/R Stone ceased doing business, other than collecting receivables. The owners of H/R Stone sold the agency contracts for $285,000 and collected outstanding receivables of slightly more than $1 million, while satisfying outstanding obligations of approximately $650,000. Thereafter, H/R Stone ceased all business activities.
On June 24, 1982, H/R Stone filed the complaint in the instant action. The Court thus makes its findings after a trial only on the liability issues, leaving relevant damages questions for later proceedings.
DISCUSSION
Breach of Contract
Defendant Phoenix admits that it failed to provide plaintiff both with the source code for the software supplied under the agreement, and with some of the research software sought by plaintiff, including software pertaining to the reach and frequency formula. Plaintiff asserts that these failures constituted a breach of the May 9, 1980 computer contract between H/R Stone and Phoenix, and the July 13, 1981 supplemental agreement. In addition, plaintiff asserts that defendant breached the agreement by failing to provide appropriate *356 hardware for the eight remote locations.
In response to plaintiff's breach of contract argument, defendants first assert that the May 9 computer agreement did not constitute a binding contract with respect to research software. Alternatively, defendants argue that even if the May 9 agreement was a binding contract, either plaintiff's failure to cooperate in providing research specifications or plaintiff's failure to pay the full $220,000 owed under the contract amounted to a total breach of this contract, which relieved defendants of any duties under the contract. Finding neither of these arguments supported by the evidence at trial, this Court holds that the May 9 agreement was a binding contract with respect to, inter alia, research software and that defendants breached the contract by failing to provide the promised source code and research software.
"[I]t is rightfully well settled in the common law of contracts in this State that a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable." Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109-10, 436 N.Y.S.2d 247, 249, 417 N.E.2d 541, 543 (1981) (citations omitted); accord Candid Productions, Inc. v. International Skating Union, 530 F. Supp. 1330, 1336 (S.D.N.Y.1982); Mitchell v. Hart, 41 F.R.D. 138, 141 (S.D.N.Y.1966). However, even where parties explicitly designate a material term "`to be mutually agreed upon' in the future," language absent in the instant case, courts may still find the presence of a binding agreement where "the parties intend to enter into a binding contractual relationship." Allen & Co. v. Occidental Petroleum Corp., 382 F. Supp. 1052, 1057 (S.D.N.Y.1974), aff'd, 519 F.2d 788 (2d Cir.1975).
"[T]he existence of a contract may be established through the conduct of the parties recognizing the contract." Apex Oil Co. v. Vanguard Oil & Service Co., 760 F.2d 417, 422 (2d Cir.1985); accord Kolein-import "Rotterdam" N.V. v. Foreston Coal Export Corp., 283 F. Supp. 184, 186 (S.D.N.Y.1968). In determining whether the parties' conduct is consistent with the existence of a binding contract, "[i]t is necessary that the totality of all acts of the parties, their relationship and their objectives be considered." P.J. Carlin Construction Co. v. Whiffen Electric Co., 66 A.D.2d 684, 684, 411 N.Y.S.2d 27, 29 (1st Dep't 1978).
In the instant case, the Court concludes that the parties intended, in the May 9 agreement, to enter into a binding contract with respect to research software. The May 9 agreement makes explicit reference to such software. Under Article 2 of the agreement, plaintiff agreed to pay Phoenix ten percent of the $60,000 software price upon plaintiff's acceptance of research software specifications, and an additional 15 percent of this sum upon completion of the research software. Further, the testimony describing the negotiations leading up to the May agreement established that both parties viewed the supply of research programs as an important element of defendants' obligations under the contract. On the basis of this evidence, this Court holds that the May 9 agreement represented an enforceable contract under which defendants were obligated to supply research software.
The only area where the Court finds that the parties did not enter a binding contract relates to the Remote Office Equipment. This becomes clear when the highly non-specific remote location computer hardware provision contained in Schedule A is compared to the detailed specifications in the body of the 1980 agreement relating to the home office equipment, and from the fact that remote hardware payments were not included in the "Equipment Price" of $160,000. While a promise to "provide hardware to cover the 8 remote locations at a cost not to exceed $8,000 per installation" with such hardware to "include a printer, a CRT device and intelligence" might, in other contexts, amount to an enforceable agreement, in the context of this agreement the Court finds that it was merely a statement of future intent subject to negotiation.
*357 That this was the intention of the parties was born out by their subsequent conduct. Conversations followed whereby the defendant put various remote hardware options before plaintiff, offering two systems priced over $8,000 and one priced below that figure. Plaintiff rejected the latter since it required a telephone hook-up to the main office, even though it was fully consistent with the general terms of Schedule A that required simply that each remote system include "a printer, a CRT device, and intelligence (Memory)." Plaintiff at one point verbally agreed to a more expensive system, but then refused to sign agreements, taking the unreasonable position that he wanted a "stand alone" hardware system at each remote location costing no more than $8,000 that would be comparable to what plaintiff was receiving at the home office.
The resulting impasse over the remote office equipment was not resolved by the July 1981 agreement, whereby defendant agreed to provide "specifications for the remote hardware referred to in Schedule A" within ninety days. Defendant orally reproffered the lower priced system specified in the August 11, 1980 letter and plaintiff again rejected it. Based on the foregoing, the Court has no hesitation in finding that no enforceable agreement as to the remote office locations was reached. Even if Schedule A could be construed as an enforceable agreement as to the remote office equipment, Phoenix did not breach it since the equipment offer, rejected by plaintiff, would have satisfied its terms.
Defendants also contend that plaintiff's failure to agree with ASD upon detailed and complete specifications for the research software constituted a total breach of the contract, relieving defendants of all obligations under the software portion of the contract. In assessing defendants' argument, this Court begins from the proposition that typically a breach of a contractual obligation "does not nullify the contract, but rather entitles the party not in breach to recover damages." Iligan International Corp. v. S.S. John Weyerhauser, 372 F. Supp. 859, 870 (S.D.N.Y.1974), aff'd sub nom., Iligan Integrated Steel Mills, Inc. v. S.S. John Weyerhauser, 507 F.2d 68 (2d Cir.1974), cert. denied, 421 U.S. 965, 95 S. Ct. 1954, 44 L. Ed. 2d 452 (1975); accord Zimmer v. Wells Management Corp., 348 F. Supp. 540, 542 (S.D.N.Y.1972).
This Court cannot conclude that H/R Stone's failure to approve defendants' specifications constituted a total breach, relieving defendants of all responsibilities under the contract. "It is well established that an owner has an obligation to facilitate the work of a contractor and not to do anything that would obstruct or impede the contractor's work ... but obstructions or delays are actionable only if they were not within the parties' contemplation when they made their agreement." Niagara Mohawk Power Corp. v. Graver Tank & Manufacturing Co., 470 F. Supp. 1308, 1322 (N.D.N.Y.1979) (citations omitted). In Niagara Mohawk Power, a federal district court held that plaintiff's adoption of several changes in the design of a container for a nuclear reactor did not relieve defendant from its contractual obligations to supply plaintiff with the container, where "the making of such design changes was, in general, within the contemplation of the parties." Id. In the instant case, this Court similarly finds that the parties contemplated the changes in specifications requested by plaintiff. The parties' initial discussion of research specifications in relatively general terms, together with their subsequent and frequent sessions focusing on these specifications, shows that the parties expected plaintiff to modify or change some specifications before all work on the computer system was complete. The willingness of defendants to sign the July 13, 1981 agreement supports a finding that defendants did not oppose plaintiff's refinement and development of the research specifications.
Moveover, any lack of cooperation by plaintiff regarding the completion of research software specifications is immaterial with respect to defendants' failure to provide plaintiff with the source code, a necessary component of a complete research, as well as business, software package. *358 Although defendants possessed the source code to plaintiff's system, which Phoenix first promised to provide under Article 8 of the May 1980 contract, and under the July 1981 supplemental agreement consented to turnover "immediately," defendants flatly refused to provide plaintiff with this code. Such defendant conduct is nothing other than a pure breach of contract, for which defendants, and not plaintiff, bear the responsibility. See Data Probe, Inc. v. 575 Computer Services, Inc., 72 Misc. 2d 602, 607, 340 N.Y.S.2d 56, 59 (Civ.Ct.N.Y.Co.1972).
This Court also finds that plaintiff's payment of only $168,000 of the $220,000 owed under the contract does not excuse defendants' nonperformance. As discussed in more detail below, this Court accepts Phoenix's argument that failure to pay $52,000 of the contract price constituted a breach of contract. However, the Court cannot accept Phoenix's argument that this failure to pay the $52,000 relieved defendants of all duties under the contract. During the first few months of the parties' contractual relationship, plaintiff made payments in a timely and responsible fashion. Plaintiff's delinquency in making payments began only after problems in completing the computer system became apparent. These problems resulted both from plaintiff's failure to approve defendants' specifications, and defendants' independent nonperformance of contractual obligations, such as defendants' failure to deliver the source code. Since defendants' breach of contract influenced plaintiff's decision to withhold payments, defendants may not be permitted to argue that plaintiff's refusal to make payments relieved them of all contract responsibilities. See Tri-Mar Contractors, Inc. v. Itco Drywall, Inc., 74 A.D.2d 601, 602, 424 N.Y.S.2d 737, 739 (2d Dep't 1980).
In sum, this Court finds that the defendants were not in breach of any agreement with respect to the remote office equipment, but that Defendants Phoenix and Ultimate[3] breached the May 1980 computer contract, as modified by the July 13, 1981 letter agreement, by failing to supply to plaintiff bargained for research software and the source code, with one exception pertaining to the reach and frequency formula, discussed below.
Phoenix's Counter-Claim for Breach of Contract.
At trial, Defendant Phoenix not only argued that it did not breach the contract, but also presented evidence in support of a counterclaim alleging that plaintiff breached the computer contract. Specifically, defendant argues that H/R Stone breached an "implied covenant of good faith and fair dealing" by: 1. Failing to provide defendants with the specifications needed to develop research software, and 2. Failing to pay $52,000 of the purchase price owed under the software contract.
"In every contract there is an implied covenant of good faith and fair dealing which precludes each party from engaging in conduct that will deprive the other party of benefits of the agreement." Filner v. Shapiro, 633 F.2d 139, 143 (2d Cir.1980); accord Associated Capital Services Corp. v. Fairway Private Cars, 590 F. Supp. 10, 16 (E.D.N.Y.1982). This convenant embodies "an implicit understanding that neither party will intentionally do anything to prevent *359 the other party from carrying out his part of the agreement." Lowell v. Twin Disc, Inc., 527 F.2d 767, 770 (2d Cir.1975).
In the instant case, this Court finds that plaintiff breached this implied covenant by failing to agree with ASD, acting for Phoenix, upon a complete set of research specifications. Plaintiff's duty to approve specifications without delay clearly was implied by the computer contract, which required that defendants either complete all software within 150 days or forfeit five percent of the software price.[4]See Old Dutch Farms, Inc. v. Milk Drivers and Dairy Employees Union Local 584, 222 F. Supp. 125, 130 (E.D.N.Y.1963) (explicit arbitration provision, which imposed penalty on party seeking reconsideration of dispute resolved in prior arbitration proceedings, supported court's finding that contract included implicit provision requiring parties to complete arbitration promptly).
Plaintiff engaged in a particularly flagrant breach of the implied covenant of good faith and fair dealing by failing to provide Phoenix with sufficient information to enable it to develop specifications for the reach and frequency formula. Although plaintiff's employees often had calculated this formula without computer assistance, the method used in such calculations remained a mystery to individuals, such as defendants, not intimately involved in the broadcast industry.
Despite plaintiff's familiarity with the reach and frequency formula, plaintiff did not provide it to the defendants. Plaintiff only provided Phoenix with the tools it had used to manually perform reach and frequency calculation in the past: a new math slide rule, a Westinghouse booklet, a hand-held calculator, and calculator cards. These were admitted by plaintiff's own witness to be insufficient information for a layman to calculate the formula. Plaintiff thus took the bizarre position of both demanding that defendants complete software related to the reach and frequency formula, and refusing to provide defendants with the formula itself. This Court cannot conceive of conduct more fundamentally inconsistent with the implied covenant good faith and fair dealing, and holds that this conduct went so directly to this aspect of the bargain so as to relieve defendants of their obligations to furnish a reach and frequency program. See Lowell v. Twin Disc, Inc., 527 F.2d 767, 771 (2d Cir.1975); Rochester Park, Inc. v. City of Rochester, 38 Misc. 2d 714, 718, 238 N.Y.S.2d 822, 827 (Sup.Ct. Monroe Co. 1963), aff'd, 19 A.D.2d 776, 241 N.Y.S.2d 763 (4th Dep't 1963). This holding is limited, however, to defendants' obligations with respect to the reach and frequency program. Neither this breach by plaintiff, nor any other for which plaintiff would be liable in damages, relieved defendants of their other unperformed contractual obligations.
Phoenix also argues that plaintiff's failure to pay the $52,000 owed under the computer contract constituted a breach of the implied convenant of good faith and fair dealing. Case law has established that the failure to pay sums promised under a contract constitutes a breach of this implied covenant. See, e.g., Filner v. Shapiro, 633 F.2d 139, 143 (2d Cir.1980); Jamaica Savings Bank v. Lefkowitz, 390 F. Supp. 1357, 1361-62 (E.D.N.Y.1975).
Plaintiff argues that its failure to pay the full contract price does not constitute a breach of contract, since defendants failed to supply all research software promised under the contract. In rejecting plaintiff's argument, this Court notes that the lack of research software resulted not only from defendants' failure to provide plaintiff with some completed software systems, such as the source code, but also from plaintiff's failure to approve specifications necessary to complete other programs. "Every contract implies that neither party will do anything to prevent performance by the other party ... and a party who violates *360 this rule, which is founded on fair dealing, may not rely on such failure to excuse his own nonperformance." Bass v. Sevits, 78 A.D.2d 926, 927, 433 N.Y.S.2d 245, 247 (3d Dep't 1980).
Accordingly, this Court holds that plaintiff breached its implied convenant of good faith and fair dealing by: 1. Failing to provide the reach and frequency formula, thereby excusing defendants from their obligation to supply the research program related thereto; 2. Failing to approve other research specifications; and 3. Failing to pay the full amount owed under the contract.
CONCLUSION
To summarize, the Court finds that defendants' failure to supply plaintiff with research software constitutes a breach of contract. The Court also holds that plaintiff committed a breach of contract by failing to pay Phoenix the full amount owed under the computer contract and by failing to approve research specifications. The precise amount of damages recoverable by either party must await determination after a trial thereon.
SO ORDERED.
NOTES
[1] During trial and in their post-trial submissions, defendants have not pursued counterclaims set forth in their pre-trial order alleging fraud and tortious interference with a business relationship between Phoenix and its software subcontractors, and seeking punitive damages and foreclosure of a security interest in computer equipment provided to plaintiff. These counterclaims are deemed abandoned.
[2] Plaintiff made the following payments to Phoenix after May 9, 1980, totaling 146,000:
1. An August 9, 1980 payment of $6,000.
2. An October 1, 1980 payment of $20,000.
3. An October 24, 1980 payment of $100,000.
4. A January 9, 1981 payment of $20,000.
At trial, plaintiff attempted to recharacterize the final $120,000 of these contract payments as a loan, arguing that Phoenix is now obligated to repay the "principal" ($120,000), as well as "interest" on this loan.
The Court finds that plaintiff's $100,000 October 24, 1980 payment was an advance upon which defendant agreed to pay "interest" of .041%, from October 24, 1980. To the extent that defendant is responsible for the payment of interest, such interest may be proved at the trial on damages.
[3] Although both the May 9, 1980 and the July 13, 1981 agreements were signed on behalf of Phoenix, Ultimate is liable as well. Throughout the negotiations leading to the contract the individual defendants named in plaintiff's complaint acted on behalf of both Ultimate and Phoenix, and Phoenix was represented to plaintiff as Ultimate's sales agent. This continuing participation establishes Ultimate as a principal of Phoenix, and liable for misconduct on the part of Phoenix. Interocean Shipping Co. v. National Shipping and Trading Corp., 523 F.2d 527, 537 (2d Cir.1975), cert. denied, 423 U.S. 1054, 96 S. Ct. 785 (1976); Riverside Research Institute v. KMGA, Inc., 108 A.D.2d 365, 370, 489 N.Y.S.2d 220, 223-24 (1st Dep't 1985), aff'd, 68 N.Y.2d 689, 506 N.Y.S.2d 302, 497 N.E.2d 669 (1986).
This Court's finding of liability on the part of Ultimate also receives support from the fact that Ultimate supplied all of the computer hardware and software purchased by plaintiff under the contract. See Hewett v. Marine Midland Bank of Southeastern New York, N.A., 86 A.D.2d 263, 271, 449 N.Y.S.2d 745, 751 (2d Dep't 1982) ("If the principal accepts the benefits of its agent's misdeeds, with actual or imputed knowledge, it ratifies the agent's action.").
[4] The contract required that Phoenix forfeit another five percent of the software price if the software was not completed within 210 days from the May 9 agreement. Phoenix would forfeit a further five percent of the software price for each additional 30 day period during which the software remained incomplete.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/999957/
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-1788
JAMES ARTHUR YOUNG, Candidate for US Senate, MD,
Plaintiff - Appellant,
versus
UNITED STATES OF AMERICA; UNITED STATES DE-
PARTMENT OF JUSTICE; UNITED STATES DEPARTMENT
OF DEFENSE; NATIONAL SECURITY AGENCY; CENTRAL
INTELLIGENCE AGENCY; HOUSING & URBAN DEVELOP-
MENT; NATIONAL AERONAUTICS; NATIONAL AERO-
NAUTICS AND SPACE AGENCY (NASA); SOCIAL
SECURITY ADMINISTRATION, and other agencies;
STATE OF MARYLAND DEPARTMENT OF LABOR,
LICENSING AND REGULATION, Glen Burnie Office;
UNEMPLOYMENT INSURANCE ADMINISTRATION; BELL
ATLANTIC CORPORATION; SPRINT; COMPUTER BASED
SYSTEMS, INCORPORATED,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Benson E. Legg, District Judge. (CA-99-
1479-L)
Submitted: September 30, 1999 Decided: October 5, 1999
Before NIEMEYER, WILLIAMS,* and MICHAEL, Circuit Judges.
*
Judge Williams did not participate in consideration of this
case. The opinion is filed by a quorum of the panel pursuant to 28
U.S.C. S 46(d).
Affirmed by unpublished per curiam opinion.
James Arthur Young, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
James Arthur Young appeals the district court’s order dis-
missing his civil action as legally frivolous. We have reviewed
the record and the district court’s opinion and find no reversible
error. Accordingly, we affirm on the reasoning of the district
court. See Young v. United States, No. CA-99-1479-L (D. Md. June
2, 1999). We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials before
the court and argument would not aid the decisional process.
AFFIRMED
2
|
01-03-2023
|
07-04-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1902121/
|
390 So. 2d 361 (1980)
Stephen GROFF, Petitioner,
v.
STATE of Florida, Respondent.
No. 79-1811.
District Court of Appeal of Florida, Second District.
July 2, 1980.
Rehearing Granted In Part, Denied In Part September 24, 1980.
Rehearing Denied November 19, 1980.
Thomas F. Granahan, P.A., Tampa, for petitioner.
E.J. Salcines, State's Atty., and John W. Jennings, Asst. State's Atty., Tampa, for respondent.
HOBSON, Acting Chief Judge.
Petitioner Stephen Groff, a psychiatrist, seeks certiorari to review a circuit court order which reverses a county court order granting petitioner's motion to dismiss the amended information. We grant certiorari and vacate the challenged order.
On May 5, 1978, the State filed an amended information charging petitioner with failure to report child abuse under Section 827.07(4), Florida Statutes (1977).[1] The information alleged that:
STEPHEN H. GROFF between March 1, 1977 and March 31, 1978 ... did unlawfully fail to report the abuse of LESLIE ANN HOOVER, a child, to the Department of Health and Rehabilitative Services, when the said STEPHEN GROFF had reason to believe that the said LESLIE ANN HOOVER was being abused... .
*362 In order to be valid, an information must allege each of the essential elements of a crime, and the offense charged must be described by such a statement of facts and circumstances as will inform the accused of the specific offense, coming under the general statutory description, with which he is charged. United States v. Slepicoff, 524 F.2d 1244 (5th Cir.1975); State v. Dye, 346 So. 2d 538 (Fla. 1977).
In the instant case, the information is defective because its allegations do not show that Dr. Groff is subject to penalties under Chapter 827, Florida Statutes (1977).[2] Section 827.07(14), Florida Statutes, provides that the following persons may be found guilty of a second degree misdemeanor:
(a) Any person responsible for the care of a child who fails to report a case of known or suspected child abuse... .
(b) Any person who knowingly or wilfully prevents another person from making such report... .
The information in this case does not allege that Dr. Groff was responsible for the care of Leslie Ann Hoover or that he knowingly and wilfully prevented another person from making a report of child abuse. An essential element of the offense is therefore omitted, and such omission is fatal.
We find no merit in the other points raised by petitioner.
Accordingly, the petition for writ of certiorari is granted and the order of the circuit court is quashed.
GRIMES and OTT, JJ., concur.
ON MOTION FOR REHEARING
PER CURIAM.
The State's motion for rehearing is granted to the extent that we now hold that Section 827.07(11), Florida Statutes (1975), contained a penalty provision which is applicable to the petitioner, Dr. Groff, as to any alleged failure to report child abuse which occurred prior to October 1, 1977, the effective date of Section 827.07(4)(a), Florida Statutes (1977).
In our initial opinion we held that the information filed against Dr. Groff did not sufficiently charge the crime of failure to report child abuse because the information failed to allege facts to show that Dr. Groff was subject to penalties under Section 827.07(14), Florida Statutes (1977). In its motion for rehearing the State points out that Dr. Groff was not charged under the 1977 statute, but under the 1975 child abuse statute, Section 827.07(4), Florida Statutes (1975), under which the applicable penalty section subjects to penalty "anyone knowingly and willfully violating the provisions of this section." § 827.07(11), Fla. Stat. (1975). We therefore agree that the information sufficiently alleged facts to show that Dr. Groff was subject to penalty for failure to report child abuse, as to any of the alleged conduct occurring before October 1, 1977. On that date, however, the 1977 penalty section of Chapter 827 became effective. Therefore, as to any alleged conduct occurring after the effective date of Section 827.07(14), Florida Statutes (1977), we adhere to the view expressed in our original opinion, that the information does not sufficiently allege facts to show that Dr. Groff was subject to penalty.
Accordingly, the order of the circuit court is affirmed in part and quashed in part, and the cause remanded for further proceedings consistent with this opinion. The motion for rehearing is otherwise denied.
HOBSON, Acting C.J., and GRIMES and OTT, JJ., concur.
NOTES
[1] 827.07(4) REPORTS OF ABUSE REQUIRED.
(a) Any person, including, but not limited to, any physician, nurse, teacher, social worker, or employee of a public or private facility serving children, who has reason to believe that a child has been subject to abuse shall report or cause reports to be made to the department... .
[2] There are no penalties set forth for failure to report child abuse under § 827.07(4). Chapter 827 was amended in 1979 to provide a penalty for circumstances such as exist in this case.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/999946/
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-1883
FEDERAL TRADE COMMISSION,
Plaintiff - Appellee,
versus
DORIAN REED; AUDREY REED,
Defendants - Appellants,
and
THOMAS MAHER; INTERNET BUSINESS BROADCASTING,
INCORPORATED, a Nevada Corporation,
Defendants.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. William M. Nickerson, District Judge.
(CA-98-495-WMN)
Submitted: September 30, 1999 Decided: October 6, 1999
Before NIEMEYER, WILLIAMS, and MICHAEL, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Dorian Reed, Audrey Reed, Appellants Pro Se. Lawrence DeMille-
Wagman, FEDERAL TRADE COMMISSION, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
The Federal Trade Commission (“FTC”) filed an action against
Dorian and Audrey Reed, alleging violations of the Federal Trade
Commission Act. The district court entered a default judgment
against the Reeds for failing to answer the complaint or file other
defensive pleadings and then entered a final judgment against the
Reeds. The Reeds appeal, raising no issues concerning the final
judgment, but claiming that the default judgment was inappropriate
because they had served upon the FTC an answer and a motion to
quash.*
The appropriate remedy for challenging a default judgment is
to file in the district court a motion to set aside the default
judgment. See Fed. R. Civ. P. 55(c), 60(b). The Reeds failed to
file such a motion in the district court. We therefore affirm the
district court’s final judgment without prejudice to the Reeds’
right to file in the district court a motion to set aside the
default judgment. We deny the Reeds’ motion seeking to stay the
appeal and to remand the case to the district court. We dispense
with oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.
AFFIRMED
*
The court’s docket sheet does not reflect the filing of this
answer.
2
|
01-03-2023
|
07-04-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/450870/
|
760 F.2d 244
Frieda Joyce JOHNSON, personal representative of the Estateof Horton Winfield Johnson, for herself and for the benefitof Kevin Lee Nix, Cynthia Anne Johnson and Tamara Joyce Nix,Plaintiffs-Appellants,v.UNITED STATES of America, Defendant-Appellee.
No. 83-5764.
United States Court of Appeals,Eleventh Circuit.
April 24, 1985.
Podhurst, Orseck, Parks, Josefsberg, Eaton, Meadow & Olin, P.A., Joel D. Eaton, Miami, Fla., for plaintiffs-appellants.
Jeffrey D. Fisher, Spec. Asst. U.S. Atty., Linda Collins-Hertz, Jonathan Goodman, Asst. U.S. Attys., Miami, Fla., Robert S. Greenspan, U.S. Dept. of Justice, Nicholas Stephen Zeppos, Washington, D.C., for defendant-appellee.
Appeal from the United States District Court for the Southern District of Florida; Jose A. Gonzalez, Judge.
ON SUA SPONTE RECONSIDERATION
(Opinion January 10, 1985, 11th Cir., 1985, 749 F.2d 1530)
Before GODBOLD, Chief Judge, RONEY, TJOFLAT, HILL, FAY, VANCE, KRAVITCH, JOHNSON, HENDERSON, HATCHETT, ANDERSON and CLARK, Circuit Judges.
BY THE COURT:
1
A member of this court in active service having requested a poll on the application for rehearing en banc and a majority of the judges in this court in active service having voted in favor of granting a rehearing en banc,
2
IT IS ORDERED that the cause shall be reheard by this court en banc without oral argument on a date hereafter to be fixed. The clerk will specify a briefing schedule for the filing of en banc briefs. The order denying rehearing and rehearing en banc entered on March 26, 1985, 758 F.2d 660, and the prior panel's opinion are hereby VACATED.
|
01-03-2023
|
08-23-2011
|
https://www.courtlistener.com/api/rest/v3/opinions/2232079/
|
16 Wis. 2d 333 (1962)
ARNOLD JOERNS COMPANY, Respondent,
v.
ROBERTS, Appellant.
Supreme Court of Wisconsin.
March 8, 1962.
April 3, 1962.
*334 For the appellant there was a brief by Morrissy, Morrissy, Sweet & Stowe of Elkhorn, and oral argument by Ralph R. Stowe and Lowell E. Sweet.
For the respondent the cause was submitted on the brief of William H. Freytag of Elkhorn.
*335 FAIRCHILD, J.
1. Construction of complaint. The alleged oral "agreement" was twofold: Defendant promised to pay plaintiff a commission if plaintiff introduced anyone who later (a) purchased property from defendant or (b) contracted with defendant for the construction of a house. Plaintiff seeks the agreed commission for introducing persons for each of whom defendant "built a home." Defendant argues that because the complaint did not allege that these persons entered into a contract with defendant for construction of a house, so as to fall squarely under part (b) of the "agreement" they must have bought real estate from defendant and plaintiff's claim must be under part (a). Since the agreement was oral, there can be no recovery under part (a).[1]
But the allegations of a pleading must be liberally construed, with a view to substantial justice between the parties,[2] and the pleading is entitled to all reasonable inferences that can be drawn from the facts pleaded.[3] This complaint will bear the construction that plaintiff introduced prospects seeking the building services of a contractor and that defendant furnished those services to the prospects named. In construing the complaint, we may infer that contracts were made before the services were rendered, that being the ordinary course of dealing in such matters.
A promise to pay a commission for finding persons who will contract for the services of a building contractor need not be in writing to be valid.
2. Claimed lack of mutuality. On oral argument, defendant suggested that there was no contract between plaintiff and defendant because, although defendant allegedly promised *336 to pay a commission if plaintiff produced a customer, plaintiff did not promise to seek customers. This is true of the oral "agreement" made in 1954. That amounted to a continuing offer by defendant.[4] When, however, plaintiff produced a prospective customer, a unilateral contract arose, binding defendant to pay the commission if he and the customer made a contract.[5]
3. Contract not to be performed within one year. The parties also presented the question whether the oral agreement made in 1954 was void because not to be performed within one year.[6] The statute referred to is not, however, applicable to an agreement which by its terms is capable of being performed within one year.[7]
By the Court.Order affirmed, except that defendant may answer within twenty days after filing of remittitur in circuit court.
NOTES
[1] Sec. 240.10, Stats., makes void an oral contract to pay a commission for selling real estate.
[2] Sec. 263.27, Stats.
[3] Boek v. Wagner (1957), 1 Wis. (2d) 337, 342, 83 N. W. (2d) 916.
[4] Hopkins v. Racine Malleable & Wrought Iron Co. (1909), 137 Wis. 583, 586, 119 N.W. 301; 12 Am. Jur., Contracts, p. 506, sec. 8.
[5] See Restatement, 1 Contracts, pp. 10-12, sec. 12, and comment.
[6] Sec. 241.02 (1), Stats.
[7] Nelsen v. Farmers Mut. Automobile Ins. Co. (1958), 4 Wis. (2d) 36, 52, 90 N. W. (2d) 123.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1587609/
|
33 So. 3d 662 (2008)
EX PARTE JAMES ALBERT RAGLAND.
No. CR-08-0308.
Court of Criminal Appeals of Alabama.
December 12, 2008.
Decision of the Alabama Court of Criminal Appeal Without Published Opinion Mandamus petition dismissed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/999954/
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-6448
CHARLIE HARRIS CLAY,
Petitioner - Appellant,
versus
RICK JACKSON,
Respondent - Appellee.
Appeal from the United States District Court for the Western Dis-
trict of North Carolina, at Charlotte. Graham C. Mullen, Chief
District Judge. (CA-99-31-MU)
Submitted: September 30, 1999 Decided: October 6, 1999
Before NIEMEYER, WILLIAMS, and MICHAEL, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Charlie Harris Clay, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Charlie Harris Clay seeks to appeal the district court’s order
denying relief on his petition filed under 28 U.S.C.A. § 2254 (West
1994 & Supp. 1999). We have reviewed the record and the district
court’s opinion and find no reversible error. Accordingly, we deny
a certificate of appealability and dismiss the appeal on the rea-
soning of the district court. See Clay v. Jackson, No. CA-99-31-MU
(W.D.N.C. Mar. 11, 1999).* We dispense with oral argument because
the facts and legal contentions are adequately presented in the ma-
terials before the court and argument would not aid the decisional
process.
DISMISSED
*
Although the district court’s order is marked as “filed” on
March 10, 1999, the district court’s records show that it was
entered on the docket sheet on March 11, 1999. Pursuant to Rules
58 and 79(a) of the Federal Rules of Civil Procedure, it is the
date that the order was entered on the docket sheet that we take as
the effective date of the district court’s decision. See Wilson v.
Murray, 806 F.2d 1232, 1234-35 (4th Cir. 1986).
2
|
01-03-2023
|
07-04-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1873804/
|
752 N.W.2d 31 (2008)
STATE
v.
HARMON.
No. 06-1990.
Court of Appeals of Iowa.
February 13, 2008.
Decision without published opinion. Reversed and Remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981424/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0949n.06
No. 10-3226
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Aug 27, 2012
REGINALD PURNELL, ) LEONARD GREEN, Clerk
)
Petitioner-Appellant, )
) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
) SOUTHERN DISTRICT OF OHIO
v.
)
)
UNITED STATES OF AMERICA, )
)
Respondent-Appellee. )
Before: GUY and CLAY, Circuit Judges; HOOD, District Judge.*
DENISE PAGE HOOD, District Judge. Defendant Reginald Purnell appeals the denial
of his motion for relief from judgment pursuant to Federal Rule of Civil Procedure 60(b), seeking
to reopen his 28 U.S.C. § 2255 motion. On appeal, Purnell argues that he was actually innocent
of robbery in violation of the Hobbs Act, 18 U.S.C. § 1951, to which he entered a plea of guilty.
For the reasons stated below, we AFFIRM the district court’s ruling.
I.
On August 16, 2005, a confidential informant (CI) with the Bureau of Alcohol, Tobacco,
and Firearms (ATF) contacted codefendant Zechariah Barber to arrange purchase of a firearm and
a quarter ounce of crack cocaine. The CI had purchased crack cocaine from Barber on other
*The Honorable Denise Page Hood, United States District Judge for the Eastern District of Michigan,
sitting by designation.
No. 10-3226, Purcell v. USA Page 2
occasions. That evening, Barber and Purnell arrived at the CI’s residence. Purnell pulled a
firearm from his waistband and pointed it at the CI’s head. Barber took $650 of pre-recorded
government funds from the CI, which was provided to the CI to purchase drugs and a firearm.
Barber and Purnell requested additional money and ordered the CI upstairs where they bound the
CI’s hands and feet. Purnell and Barber then went downstairs and took various items from the
CI’s residence, including dvds, cash, a wallet, a social security card, a birth certificate, and a Play
Station controller. The entire incident was videotaped by the ATF.
Upon leaving the residence, Purnell and Barber fled by car and were pursued by ATF
agents and members of the Columbus Police Department. Two small baggies were tossed from
the car during pursuit. The contents of these baggies later tested positive for cocaine. Barber and
Purnell were arrested and taken into custody.
On September 15, 2005, the grand jury returned a five-count indictment against Purnell
and Barber. Purnell was charged with two counts of possession of more than five grams of
cocaine with the intent to distribute in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(iii), 846 and
18 U.S.C. § 2, and one count of brandishing a firearm in relation to a drug trafficking offense.
The government provided a superseding information on November 9, 2005, charging Purnell with
robbery in violation of 18 U.S.C. §§ 1951 and 2, and brandishing a firearm in relation to a crime
of violence, 18 U.S.C. § 924(c)(1)(A). Purnell pled guilty to both counts in the superseding
information. Barber also accepted a plea. The district court sentenced Purnell to a term of
64 months imprisonment for robbery and 84 months, the mandatory minimum, for brandishing
No. 10-3226, Purcell v. USA Page 3
a firearm to run consecutively. The district court also sentenced him to a term of three to five
years supervised release to run consecutively. On appeal, this Court affirmed the sentence.
Subsequent to this appeal, Purnell filed a number of motions with the district court.
Purnell filed an amended motion to vacate, set aside, or correct sentence pursuant to 28 U.S.C.
§ 2255 on November 18, 2007. Purnell argued in this motion that his counsel was ineffective for
failing to raise the issue of whether Purnell’s conduct was sufficient to satisfy jurisdiction under
the Hobbs Act. Purnell further contended that he was actually innocent of robbery under the
Hobbs Act. Because he did not have the requisite intent since he did not know that the victim was
a CI or about his co-defendant’s previous interactions with the CI. He asserted that he was
“coached and coerced into pleading guilty to a crime that is not covered by” 18 U.S.C.
§§ 924(c)(1)(A)(ii) and 2. Purnell argued that he should not be allowed to plead to charges that
are not covered by statute.
Purnell requested to amend his motion to add a claim that the district court lacked
jurisdiction. He later moved to supplement his motion to argue that his counsel’s ineffectiveness
resulted in double jeopardy, a violation of the due process right to a fair trail, and violation of the
right to be informed of the charges against him. He later requested that the court allow him to add
a claim for judicial misconduct. The magistrate judge denied Purnell’s request to add claims for
lack of subject matter jurisdiction, double jeopardy, and judicial misconduct because the one-year
statute of limitations had expired on the claims. The magistrate judge allowed Purnell to amend
his motion to include the claims that his counsel’s ineffectiveness denied him the right to fair trial
and right to be informed of charges against him related back to the initial motion to vacate.
No. 10-3226, Purcell v. USA Page 4
In response to Purnell’s motion, the government provided the affidavit of Alison Clark,
Purnell’s trial attorney. She indicated that Purnell’s case was difficult due to the existence of
videotape evidence. She sought to secure the shortest sentence possible, which she believed
would be the robbery under the Hobbs Act and brandishing a firearm. In return for Purnell
accepting a guilty plea, the Government did not pursue additional charges against him and
Purnell’s sentence exposure was reduced by three levels. The magistrate judge found“[t]he record
indicate[d] that counsel made a reasonable strategic decision, after investigation, that petitioner
faced probable conviction under the Hobbs Act, and that a guilty plea to that charge, as opposed
to the drug charges, would result in a less severe sentence.” The magistrate judge also determined
that Purnell’s actual innocence claim was without merit because the record showed Purnell’s
guilty plea was knowing, intelligent, and voluntary. On June 4, 2009, the district court accepted
the magistrate judge’s report and recommendation, over Purnell’s objection, and dismissed the
case.
Purnell then filed a motion to dismiss arguing that the district court did not have
jurisdiction over the geographic area where the offense took place. In denying the motion, the
district court noted that 18 U.S.C. § 3231 gives federal courts jurisdiction over “all offenses
against the laws of the United States” and Article I, section 8 of the United States Constitution
allows Congress to create and punish crimes regardless of where they were committed. The
district court concluded that Purnell’s plea conferred jurisdiction. The district court also noted
that Purnell’s claim was more appropriate for a section 2255 motion and that a successive section
2255 motion required consideration by this Court.
No. 10-3226, Purcell v. USA Page 5
Purnell next filed a Motion for Relief from Judgment pursuant to Federal Rule of Civil
Procedure 60(b). Therein Purnell argued that the Assistant United States Attorney (AUSA) had
committed fraud on the district court by wrongfully invoking subject matter jurisdiction. Purnell
noted that leave to amend his section 2255 motion was requested before the action was dismissed
and should have been freely given. The district court found that these arguments “mirror[ed]
those made in Purnell’s Motion to Dismiss for Lack of Jurisdiction” and denied the motion.
Purnell filed a motion for a certificate of appealability on February 22, 2010. The district
court denied Purnell’s request noting that reasonable jurists would not debate whether the denial
of Purnell’s Rule 60(b) motion was proper and that appeal of the denial of the section
2255 motion was untimely. We granted Purnell a certificate of appealability. This Court has
appellate jurisdiction pursuant to 28 U.S.C. § 1291.
II.
A.
We review the district court’s denial of Purnell’s Rule 60(b) motion for abuse of
discretion. Workman v. Bell, 484 F.3d 837, 839–40 (6th Cir. 2007).1 The district court’s ruling
should be affirmed unless there is “a definite and firm conviction that the trial court committed
a clear error of judgment.” Logan v. Dayton Hudson Corp., 865 F.2d 789, 790 (6th Cir. 1989)
(citing Balani v. INS, 669 F.2d 1157, 1161 (6th Cir. 1982)). Such error occurs when the district
1
Purnell provides the Court with the standard of review for a denial of a section 2255 motion and
the standard of review for denial of a Rule 60(b) motion. This Court did not specify the issue certified for
appeal; the certificate of appealability was issued after the district court entered its order denying Purnell’s
Rule 60(b) motion. An appeal from the order denying the section 2255 motion would be untimely. Fed.
R. App. P. 4(a)(1)(B) (In a civil case “[t]he notice of appeal may be filed by any party within 60 days after
entry of the judgment or order appealed from if one of the parties is . . . the United States”).
No. 10-3226, Purcell v. USA Page 6
court applies the incorrect legal standard, misapplies the legal standard, or relies on clearly
erroneous findings of fact. In re Ferro Corp. Derivative Litigation, 511 F.3d 611, 623 (6th Cir.
2008).
B.
Purnell argues that his conduct did not violate federal law because the Hobbs Act does not
cover the robbery of an individual in a private home. He contends that the district court did not
address this argument below and, therefore, the district court erred in denying his Rule 60(b)
motion. The government counters that Purnell’s Rule 60(b) motion was not a successive motion
and was properly denied by the district court. The government also asserts that the district court
considered Purnell’s actual innocence argument and the Rule 60(b) motion did not raise a claim
of actual innocence.
Federal Rule of Civil Procedure 60(b) allows a party to seek relief from a district court’s
final judgment or order for a limited number of reasons: (1) mistake, (2) newly discovered
evidence, (3) fraud, (4) void judgment, (5) satisfied, discharged or released judgment, or (6) any
other reason that justifies relief. Fed. R. Civ. P. 60(b). A true Rule 60(b) motion does not attack
“the substance of the federal court’s resolution of a claim on the merits, but some defect in the
integrity of the federal habeas proceedings.” Gonzales v. Crosby, 545 U.S. 524, 532 (2005). In
a habeas case, when “[a] Rule 60(b) motion . . . attempts ‘to add a new ground for relief ‘[it] is
effectively a motion to vacate, set aside, or correct the sentence, and thus should be considered
a § 2255 motion.” In re Nailor, 487 F.3d 1018, 1022 (6th Cir. 2007) (citing Gonzales, 545 U.S.
at 532). A Rule 60(b) motion that attacks the resolution of a former claim on the merits will also
No. 10-3226, Purcell v. USA Page 7
be considered a section 225 motion. Id. at 1023. A successive motion to vacate that is simply
labeled as a Rule 60(b) motion should be transferred to this Court. 28 U.S.C. § 2244(b)(3); 28
U.S.C. § 1631; In re Sims, 111 F.3d 45, 47 (6th Cir. 1997).
In the Rule 60(b) motion, Purnell relied on subsection (3) to argue that the AUSA
perpetrated a fraud on the district court by wrongfully invoking subject matter jurisdiction. He
asserts that a Rule 60(b) motion is also the proper mechanism to request relief when the district
court has failed to address a habeas claim. See Spitznas v. Boone, 464 F.3d 1213, 1225 (10th Cir.
2006) (noting that “[t]he defect lies not in the district court’s resolution of the merits . . . , but in
its failure to make any ruling on a claim that was properly presented”) (citing Gonzales, 545 U.S.
at 532). However, Purnell’s Rule 60(b) motion does not argue that the district court failed to
address the actual innocence claim in its resolution of the section 2255 motion. Rather, Purnell
argued that his request to amend the section 2255 motion to include a subject matter jurisdiction
challenge was improperly denied.2 He contended that “the evidence clearly demonstrate[d] that
no district court of the United States [had] valid statutory jurisdiction over any offense under
either Titles 18 or 21.” He further claimed that the AUSA frauded the district court by
prosecuting the crime in the absence of jurisdiction.
Even a liberal reading of the section 2255 motion is not indicative of an actual innocence
argument. See Martin v. Overton, 391 F.3d 710, 714 (6th Cir. 2004) (noting that “liberal
construction [of a pro se petitioner’s pleadings] does not require a court to conjure allegations on
2
Purnell asked that the district court “set aside the [section 2255 motion] judgment . . . ;
permit the record to be enlarged by the amendment sought . . . ; and reach the merits sought to
have been made part of this case, that would conclusively demonstrate the fraud perpetuated by
the Assistant United States Attorney.”
No. 10-3226, Purcell v. USA Page 8
a litigant's behalf”) (quoting Erwin v. Edwards, 22 Fed.Appx. 579, 580 (6th Cir. 2001)). It
appears that Purnell was attempting to argue that the district court did not have jurisdiction over
his claim because the offense was not committed on federal land. There was no new substantive
claim; Purnell had already challenged the district court’s jurisdiction in his previous motion to
dismiss. Purnell’s claim attacked the integrity of the criminal proceedings due to the AUSA’s
decision to prosecute, knowing that the district court lacked jurisdiction.
The district court denied Purnell’s Rule 60(b) motion as a successive petition under
28 U.S.C. § 2244(b)(3) because it had already addressed his claim when it denied his motion to
dismiss for lack of subject matter jurisdiction. Although the district court found that the motion
was successive, which would have required it to transfer the motion to this Court, the district
court did not abuse its discretion. There could be no fraud based on the AUSA’s wrongful
assertion of subject matter jurisdiction when the district court already determined that it had
jurisdiction based on Purnell’s violation of three federal statutes.
C.
On appeal, Purnell refashions his argument below into a challenge of the government’s
ability to meet the jurisdictional element of the Hobbs Act. Nowhere in the Rule 60(b) motion
does Purnell argue or suggest that he was actually innocent because the jurisdictional element of
the Hobbs Act was not met.
Generally, the Court does not consider arguments that are raised for the first time on
appeal. See United States v. Ellison, 462 F.3d 557, 560 (6th Cir. 2006). However, considering
Purnell’s argument, the Hobbs Act punishes an individual who, “in any way or degree obstructs,
No. 10-3226, Purcell v. USA Page 9
delays, or affects commerce or the movement of any article or commodity in commerce, by
robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence
to any person or property in furtherance of a plan or purpose to do anything in violation . . .”
18 U.S.C. § 1951(a). The Hobbs Act requires that the government prove “two elements:
(1) interference with interstate; (2) in the course of a substantive criminal act.” United States v.
Ostrander, 411 F.3d 684, 691 (6th Cir. 2005).
When the robbery involves a private individual and not a business enterprise, the
government must show that there is a substantial connection between the private individual and
the business engaged in interstate commerce. United States v. Wang, 222 F.3d 234, 239–40 (6th
Cir. 2000). A substantial connection may be shown if there was a large number of victims, a
large sum of money involved, or the defendant was motivated by or knew of the victim’s
connection to interstate commerce. Id.
Citing Waucaush v. United States, Purnell urges the Court to set aside his guilty plea.
380 F.3d 251 (6th Cir. 2004). In Waucaush, this Court set aside the petitioner’s guilty plea to a
RICO charge because the record did not support an interstate connection. 380 F.3d at 256–58
(finding that the enterprise “was intrastate, noneconomic, and without substantial effects on
interstate commerce”). We noted that the government failed to provide any evidence that there
was an economic component to the crime charged. Id. at 257 (“Even if we assume that some of
the people that the CFP killed were drug-dealers, we have no evidence that they were dealing
drugs or carrying drug money when they were killed, or that their deaths significantly disrupted
the interstate market for drugs.”). Based on the lack of evidence that the enterprise affected
No. 10-3226, Purcell v. USA Page 10
interstate commerce, we concluded that the defendant was “actually innocent of violating RICO.”
Id. at 258.
Here, Purnell’s reliance on Waucaush does not dictate the same result. Purnell went to
the CI’s home under the guise of an economic transaction: the sale and purchase of a firearm and
cocaine. The sale of a firearm has been found to affect interstate commerce. See United States
v. Fish, 928 F.2d 185, 186 (6th Cir. 1991). The sale of cocaine invariably affects interstate
commerce. See United States v. Cecil, 615 F.3d 678, 691–692 (6th Cir. 2010); Ostrander,
411 F.3d at 692.
Purnell and his co-defendant went to the CI’s home for the sole purpose of purchasing
drugs and a firearm. In anticipation of this transaction, the CI had secured pre-recorded
government funds or “buy money.” It could be assumed that Purnell knew that the CI would have
money to complete the transaction. Instead of completing the drug transaction, Purnell
brandished a firearm and robbed the CI of the “buy money” and other items. The robbery
significantly depleted the CI’s assets to purchase cocaine. See Waucaush, 380 F.3d at 257 (noting
that there was no evidence that the gang charged with RICO activity killed drug-dealers, or that
those individuals killed were carrying drug money when they were killed); United States v.
Turner, 272 F.3d 380, 387 (6th Cir. 2001) (finding that the government had failed to show de
minimis effect on interstate commerce when it could not demonstrate that the business robbed was
actively engaged in interstate commerce or that the robbery would have hindered the business’
ability to engage in interstate commerce); Wang, 222 F.3d at 240 (finding jurisdictional nexus not
satisfied when defendant “robbed private citizens in a private residence of approximately $4,200,
No. 10-3226, Purcell v. USA Page 11
a mere $1,200 of which belonged to a restaurant doing business in interstate commerce”). Unlike
the defendants in the above-mentioned cases, the purpose of the meeting, albeit a guise, was to
engage in a drug and firearm transaction. This transaction was only thwarted by Purnell’s
commission of the robbery. Purnell’s act deprived the CI of his “buy money” to make a drug
transaction involving interstate commerce. The parties in Wang, Turner, and Waucaush were not
brought together based on an economic transaction. In Wang and Turner there was no connection
to interstate commerce beyond the money taken. Purnell’s very relationship with the CI was
based solely on interstate commerce and an economic transaction. This jurisdictional nexus is
sufficient to defeat Purnell’s actual innocence claim
However, the Court need not determine whether there was actually a sufficient
jurisdictional nexus between the victim and interstate commerce because Purnell accepted a guilty
plea. Unlike the defendants in Wang and Turner, Purnell did not proceed to trial and the
government did not present evidence to demonstrate a jurisdictional nexus. “A voluntary and
unconditional guilty plea waives all non-jurisdictional defects in the proceedings.” United States
v. Ormsby, 252 F.3d 844, 848 (6th Cir. 2001). To challenge jurisdiction, Purnell must show that
the face of the indictment did not charge the elements of a federal offense. Turner, 272 F.3d at
389–90 (finding that defendant had admitted the facts supporting the indictment and had,
therefore, waived his challenge to the government’s failure to prove a connection between the
crime and interstate commerce when he accepted an unconditional guilty plea). Under the Hobbs
Act, “the failure of the government to prove a nexus between the crime and interstate commerce
No. 10-3226, Purcell v. USA Page 12
is not jurisdictional in the sense that it deprives the district court of subject matter jurisdiction.”
Id. at 390.
Purnell does not argue that the indictment itself was insufficient, but rather that his
conduct did not form the basis of a federal crime. At the arraignment, the facts supporting the
superseding information were read into the record and the district court asked Purnell whether he
accepted the facts. Purnell did not object and he plead guilty to the charges. Purnell “admitted
the factual basis for jurisdiction as charged in his indictment . . . [and, therefore, his] challenge
is nonjurisdictional and has been waived.” Turner, 272 F.3d at 390.
III.
For the reasons stated above, we AFFIRM the district court’s denial of the Rule 60(b)
motion.
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/888193/
|
December 16 2008
DA 07-0246
IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 420
IN THE MATTER OF
J.D.N.,
A Youth.
APPEAL FROM: District Court of the Seventh Judicial District,
In and For the County of Richland, Cause No. DJ 06-5
Honorable Katherine M. Irigoin, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Terrence Lee Toavs, Attorney at Law, Wolf Point, Montana
For Appellee:
Hon. Mike McGrath, Montana Attorney General; Jennifer Anders, Assistant
Attorney General, Helena, Montana
Mike Weber, Richland County Attorney; T.R. Halvorson, Deputy County
Attorney, Sidney, Montana
Submitted on Briefs: January 29, 2008
Decided: December 16, 2008
Filed:
__________________________________________
Clerk
Justice John Warner delivered the Opinion of the Court.
¶1 The Seventh Judicial District Youth Court, Richland County, found J.D.N. guilty of
felony criminal mischief pursuant to § 45-6-101(3), MCA. It also declared him a delinquent
youth, placed him on juvenile probation with conditions, and entered judgment. J.D.N. now
appeals the Youth Court’s determination that the offense was a felony. We reverse and
remand for a new disposition.
¶2 We restate the issue as whether the Youth Court erred in determining J.D.N.
committed the offense of felony criminal mischief as set forth in § 45-6-101(3), MCA.
BACKGROUND
¶3 Shortly after midnight on February 7, 2006, Alfred Anderson was driving home from
work when he saw what he believed to be three young men trying to break into a vehicle
belonging to Matthew Loomer. The young men retreated to another vehicle when they saw
Anderson’s car and immediately left the scene. Judging by the short time it took for them to
flee, Anderson assumed a driver must have been waiting in the car. Anderson called 911
shortly thereafter.
¶4 Sidney Police Officer Steven Reidel was dispatched. During a brief investigation,
Reidel determined the vehicle belonged to Matthew Loomer and notified the Loomer family
of the damage. Based on conversation with the Loomers, Reidel’s ongoing investigation
focused on J.D.N. and three other young men.
¶5 One of the other young men implicated himself, J.D.N., and the others during
questioning by the police. He testified at the adjudicatory hearing that the group damaged
Loomer’s vehicle because of an ongoing dispute with Matthew’s brother, who was using the
2
car in Matthew’s absence. They noticed the Loomer vehicle parked on the street while
driving around town and stopped to damage it.
¶6 Dave Loomer, Matthew’s father, testified he bought the 1988 Ford Thunderbird for
his son a number of years earlier for $2,000. He had no estimate of its worth when it was
damaged. Matthew Loomer testified the car became his when he paid off the loan, and later
sold the car after it was damaged for $500. Jackie Washechek of 1st Choice Collision Center
testified that repairing the vehicle would cost over $8,000.
¶7 At the conclusion of the adjudicatory hearing, the Youth Court found J.D.N. guilty of
felony criminal mischief based, in part, on its determination that “the value of the car at the
time it was damaged was at least $1,000.” The court subsequently declared J.D.N. a
delinquent youth and placed him on probation, with conditions, until his twenty-first
birthday. J.D.N. appeals only from the felony designation made by the Youth Court pursuant
to § 45-6-101(3), MCA.
STANDARD OF REVIEW
¶8 As discussed further below, the issue in this case boils down to whether the Youth
Court properly interpreted and applied § 45-6-101(3), MCA. The interpretation and
construction of a statute is a matter of law, and we review de novo whether the trial court
interpreted and applied a statute correctly. See State v. Triplett, 2008 MT 360, ¶ 13, 346
Mont. 383, ¶ 13, 195 P.3d 819, ¶ 13 (citation omitted).
DISCUSSION
¶9 Did the Youth Court err in determining that J.D.N. committed the offense of felony
3
criminal mischief pursuant to § 45-6-101(3), MCA?
¶10 Before addressing the issue presented on appeal, we clarify certain matters. As
indicated above, the present case is a Montana Youth Court Act case as provided in Title 41,
Chapter 5, of the Montana Code Annotated. No adjudication by a youth court regarding the
status of any youth may be deemed a criminal conviction. See § 41-5-106, MCA. Rather, if
the evidence supports the commission of the offense contained in the petition alleging the
youth to be a delinquent youth, a youth court may adjudicate a youth as a delinquent youth.
See § 41-5-1502, MCA.
¶11 Here, the Youth Court purportedly “convicted” J.D.N. of felony criminal mischief. It
then declared J.D.N. a delinquent youth, meaning in this case that he was a youth “who has
committed an offense that, if committed by an adult, would constitute a criminal offense.”
See § 41-5-103(11)(a), MCA.
¶12 A person commits the offense of criminal mischief if the person knowingly or
purposely injures, damages or destroys any property of another without consent. See § 45-6-
101(1)(a), MCA. If the person commits the offense of criminal mischief and causes
pecuniary loss in excess of $1,000, the offender shall be fined an amount not to exceed
$50,000 or be imprisoned in the state prison for a term not to exceed 10 years, or both.
Section 45-6-101(3), MCA. In other words, the offense of criminal mischief is a felony if it
results in a “pecuniary loss in excess of $1,000.”
¶13 As noted above, the Youth Court found at the close of the adjudicatory hearing that
the vehicle’s value was “at least $1,000.” J.D.N. does not contest that finding. His argument
4
is that § 45-6-101(3), MCA, requires a finding of a loss “in excess of $1,000” to establish a
felony criminal mischief offense, and the Youth Court’s finding of a loss of “at least $1,000”
is insufficient as a matter of law to meet that statutory requirement. We agree.
¶14 In construing a statute, our function is “simply to ascertain and declare what is in
terms or in substance contained therein, not to insert what has been omitted or to omit what
has been inserted.” Section 1-2-101, MCA; State v. Farmer, 2008 MT 354, ¶ 13, 346 Mont.
335, ¶ 13, 195 P.3d 800, ¶ 13. A criminal mischief offense must cause pecuniary loss “in
excess of $1,000” to constitute a felony. See § 45-6-101(3), MCA. The statute does not
state the loss must be “equal to or in excess of $1,000.” The Youth Court found that the
car’s value immediately before the offense was “at least $1,000.” We conclude this finding
is insufficient, as a matter of law, to support the Youth Court’s legal conclusion that J.D.N.
committed felony criminal mischief as defined in § 45-6-101(3), MCA.
¶15 The parties present arguments regarding the restitution awarded during the
dispositional hearing. As contemplated in § 41-5-1511, MCA, the dispositional hearing is
separate from, but held as soon as practicable after, the adjudicatory hearing. J.D.N. does not
challenge the $1,000 restitution awarded in this case. Nor has either party established that
the restitution has any bearing on whether J.D.N. committed a felony or misdemeanor
offense. Thus, we decline to address these arguments.
¶16 Finally, J.D.N. asserts that, if we conclude--as we have--that the Youth Court erred in
determining the offense was a felony rather than a misdemeanor, the appropriate disposition
is to remand with instructions to dismiss the petition charging him as a delinquent youth. He
5
does not support his request for dismissal with any developed argument or authority,
however, as required by M. R. App. P. 12(1)(f). We are not obligated to conduct legal
research or develop legal analysis that might support an appellant’s position. State v.
Torgerson, 2008 MT 303, ¶ 36, 345 Mont. 532, ¶ 36, 192 P.3d 695, ¶ 36 (citations omitted).
Therefore, we decline to address J.D.N.’s unsupported assertion regarding the appropriate
disposition.
¶17 Having concluded the Youth Court erred in determining J.D.N. committed the offense
of felony criminal mischief, we reverse the Youth Court’s disposition of March 2, 2007, and
remand for entry of a disposition upon a finding that J.D.N. committed an act that would be a
misdemeanor if he were an adult.
/S/ JOHN WARNER
We Concur:
/S/ KARLA M. GRAY
/S/ PATRICIA COTTER
/S/ BRIAN MORRIS
/S/ JAMES C. NELSON
6
|
01-03-2023
|
06-05-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/8326461/
|
Moses, Richard T., J.
INTRODUCTION
The present action was filed by George Brenner (“Brenner”) who is a licensed real estate broker and president of the plaintiff, Brenner Realtors, Inc. (“Brenner Realtors”). Named as defendants are Frank Marchione (“Marchione”) and Nicola Marchione as trustees of Catahoula Realty Trust (the “Trust”). The plaintiffs’ claims arise out of a listing agreement entitled “Authorization to Sell” and dated May 15, 2008. The amended complaint sets forth four claims for relief.
Count I asserts a claim for breach of contract alleging that a commission is owed in connection with a buyer who purportedly agreed to purchase the premises which were the subject of the listing agreement for $3,000,000.00.
Count II asserts a claim for breach of contract alleging that a commission is owed in connection with the sale of the premises to a buyer procured by plaintiff at a selling price of $5,275,000.00.
Count III asserts a breach of the terms of the listing agreement by way of removal of the property from the market prior to the alleged expiration date of the listing agreement.
Count IV asserts a claim of the breach of the covenant of good faith and fair dealing.
BACKGROUND
The summary judgment record reveals the following facts.
Brenner, acting on behalf of Brenner Realtors, had, on at least several occasions, acted as a real estate broker for Frank and Nicola Marchione and/or one or more entities controlled for them. At all relevant times of this proceeding, the Trust was and is the owner of the real estate situated at 240 Hartwell Street and 350 Rodman Street, Fall River, Massachusetts, which are contiguous parcels bounded by Hartwell Street, Rod-man Street, Plymouth Avenue and Route 195. On or about June 18, 2007, Brenner, on behalf of Brenner Realtors and Frank Marchione on behalf of the Trust, executed an open listing agreement listing a portion of the Trust’s premises with Brenner Realtors as a nonexclusive broker. The term of the agreement was ninety days. Brenner Realtors was unsuccessful in marketing the premises. The listing agreement entitled “Authorization to Sell,” was executed by the parties on or about May 15, 2008 and also related to a portion of the premises owned by the Trust. Such listing agreement describes as the premises which are subject to sale, “gas station, C-store, Dunkin Donuts franchise operation, and Chinese restaurant; to be built at 240 Hartwell Street, Fall River, MA.” The listing agreement further references that Brenner would list the premises with Multiple Listing Service (“MLS”) and Rhode Island statewide MLS. The duration of the agreement was for 180 days with the provision that it would remain in effect for an additional 180 days “... during which additional period the seller may terminate this agreement by 30 days notice, in writing, certified or registered mail to the realtor.” The listing agreement further provides in part:
In the event that a buyer is procured in accordance with the terms of this agreement, ready, willing and able to purchase the property, or if said property is sold or exchanged by the seller or any other person during the term of this agreement or within six months after this agreement terminates, the property is sold or exchanged by the seller, or any other person to a buyer who has been referred to or shown the property by the Realtor, or through the Realtor’s office in cooperation with another real estate broker or any other person in accordance with the terms of this agreement, the seller agrees to pay the Realtor a fee for professional services of 6% of the selling price.
The listing agreement also contains a provision that:
*216A 3% processing fee of the aforementioned listed selling price shall be paid by the seller to the Realtor should the seller remove the property from the market prior to the expiration of this agreement.
It is apparent from the record that at the time of the execution of the listing agreement, the Trust was in the process of taking the necessary steps to construct the structures necessary for the operation of the several entities described in the listing agreement.
In response to questioning from the defendants’ counsel, Brenner testified that he may very well have had a conversation with Frank Marchione that if there were no buyers for the premises by the time the facility was built, Marchione would operate the facility himself. There is little or no evidence as to what, if any, additional information was provided to Brenner on or around the time that the listing agreement was signed. It appears that as the project evolved, certain circumstances changed. Brenner purportedly was under the impression that a Dunkin Donuts franchise already existed at the site and that Dunkin Donuts had approved a drive-thru. The record establishes that Marchione felt reasonably sure that he could obtain both. Furthermore, Marchione had purportedly received a verbal commitment as to a Chinese restaurant operating at the site although no lease was signed at the inception of the listing agreement. The summary judgment record fails to contain evidence of a request by Brenner for copies of any lease or franchise agreement in connection with the premises. Furthermore, Brenner asserts some misrepresentation by Marchione relating to the absence of a commitment to an oil company with respect to the providing of fuel to the gas station. Marchione committed to a company at some time into the project after the execution of the listing agreement, however the record fails to establish when such commitment was made.
The summaiy judgment record demonstrates that the development of the subject premises by the Trust constituted an extremely complex project which would require detailed terms for any purchase and sale agreement between the Trust and a buyer procured by Brenner. On its face, the listing agreement is woefully inadequate in describing precisely what Brenner was marketing for the sum of $3,000,000.00. For instance, there are no provisions as to the terms of any lease or leases for the Chinese restaurant or for any other part of the site, nor is there any explanation as to precisely what was “. . . to be built at 240 Hartwell Street . . There are no building specifications in connection with the project, nor any indication as to whether anything that was to be built would be equipped with fixtures and, if so, what such fixtures it would be. There is also no timeline as to the completion of the buildings.
The record reveals that an individual named Ankit Patel (“Patel”) executed a one-page “Offer to Purchase Real Estate” form on or about August 21, 2008, offering to purchase the premises for $2,500,000.00. This offer was rejected by the Trust. On November 10, 2008, a second offer to purchase for the sum of $3,000,000.00. This one-page offer to purchase was contingent upon “owner or conventional bank financing at 6.5% or prevailing commercial rate, whichever is less, in the amount of $2,400,000.00.”
When asked at deposition about this provision, Brenner testified, “(i]t means that the buyer can get his financing either commercially, through a bank, a conventional bank, or through the owner or any other type of financing that is satisfactory to the buyer at 6.5% for $2,400,000.00.” When asked whether or not if the buyer could not obtain financing upon those terms he would have an obligation to proceed with the purchase, Brenner responded that would depend on the contents of the subsequent purchase and sale agreement. The aforementioned offer to purchase was subject to “the execution of a mutually satisfactory purchase and sale agreement for the properly which shall then become the agreement between the parties, no later than November 17, 2008.” Additional provisions of the offer included:
Sale to include completed gasoline service station, convenience store, Chinese restaurant, leasing agreement, Dunkin Donuts’ franchising agreement with drive-thru: said leasing and franchising agreements to be acceptable to buyer. Sale subject to buyer being able to purchase all business supplies, including gasoline, from vendors of buyer’s choice.
These were all provisions that were not included in the listing agreement and make apparent that the referenced documents had not been presented to Patel. Marchione testified that he had no interest in providing owner financing and that the drive-thru was yet to be settled at the time of the offer. Furthermore, he disagreed with conditions relative to purchasing supplies, including gasoline, as well as other vendors of the buyer’s choice. Up to such point in time, the Trust had incurred additional expenditures in developing the property relating to infrastructure which had been installed in connection with the tying into the convenience store of a car wash which was situated on a portion of the Trust property which was not being sold. At around such time it was concluded by the Trust that it made more sense to sell the remaining parcels along with the parcel that was subject to the listing agreement, as one entity.
After the rejection of the Patel offer, Marchione conferred with Brenner and discussed marketing the entire site for a revised selling price of $5,500,000.00. For the first time, a detailed addendum to the listing agreement was prepared by the Trust’s attorney and submitted to Brenner. The detailed thirteen-page, single-spaced addendum deals with terms which would be required to be agreed upon in order to arrive at a binding agreement with a potential buyer. The addendum includes, inter alia, a reference that the proposed shopping center was being sold as a complete package *217“. . . in its present state of construction.” The addendum describes the premises presently consisting of one building to be completed to house two retail/commercial stores or restaurant and a larger building to be occupied by a convenience store, gas station or office set up, a Dunkin Donuts franchise cart system and a second unit to be a Chinese restaurant. Also referenced is the transaction was subject to a Mutual Oil/gasoline distribution agreement which must be assumed by the buyer. Also addressed is the matter of payment for inventory, the transfer of a liquor license which was attached to the premises and multiple other conditions with the entire mall being offered for $5,500,000.00. Also contained in the document are provisions as to potential condominiumizing of the units, a scheduling of the lease agreements in effect which related to the premises and reference to various easements which were proposed to be granted to the buyer incidental to the transaction. Such addendum further required that the price for the sale of the property would increase as the seller made additional improvements to complete the proposed car wash for the subject site. .
On or about January 7, 2009, Marchione advised Brenner that Messias Pedro (“Pedro”) was interested in purchasing the property. Pedro was someone who Brenner did not know prior to this introduction. Thereafter, Pedro met with Brenner. At such time, Brenner had in his possession the aforementioned addendum to the listing agreement which neither Brenner nor Marchione had signed. Pedro verbally offered the sum of $5,000,000.00 and subsequently verbally raised his offer to $5,275,000.00. There is a dispute between the parties as to whether or not Pedro had ever verbally agreed to pay the asking price of $5,500,000.00 and then reneged as claimed by Marchione. Marchione claims that his brother, Nicola, was not agreeable to lowering the sale price to $5,275,000.00. A draft purchase and sale agreement listing a selling price of $5,275,000.00 was prepared by the Trust’s attorney, however, that agreement was never signed by either party and the Trust determined that it would not accept less than the asking price of $5,500,000.00 for the premises. There is no evidence in the summary judgment record that Pedro was willing to meet this price nor is there any evidence in the summary judgment record of any written offer to purchase or for that matter, any writing being submitted by Pedro in connection with the premises.
On February 4, 2009, the Trust, through Frank Marchione as trustee, sent Brenner a letter by certified mail stating in part:
Pursuant to today’s conversation, my brother and I have decided to terminate the Sell Agreement dated May 15, 2008. The termination includes all land, buildings and businesses. We appreciate your diligent efforts associated with this project; however we feel it is in our best interest to operate and develop the business/property at this time. In addition, since we are days away from opening the convenience store, we have many obligations, the most important of which is to the people who have committed to join our operating staff.
Looking forward if our position changes and we decide to once again market the property, we would be delighted to discuss the opportunity with you.
The summary judgment record fails to contain any evidence of a written response to such letter by Brenner nor does it contain evidence of the substance of the conversation referred to in the letter. The summary judgment record includes a MLS printout for the entire premises showing a listing price of $5,500,000.00. The listing references that the sale includes a new operational gasoline station, convenience store, and leases for two tenants, Dunkin Donuts and a Chinese restaurant. Also included in the listing is an adjacent site with plans for a fully automated car wash. The listing further states, “[a] third parcel is available with a full liquor license for future retail package store.” The listing notice indicates a listing date of May 15, 2008 and “off-market” date of 5/15/2009.
The defendants now move for summary judgment claiming that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law that they did not breach the listing agreement for the sale of the subject premises.
The plaintiffs have filed an opposition to the aforesaid motion for summary judgment and a cross motion for partial summary judgment alleging that there are no genuine issues of material fact as to the plaintiffs’ claims under Count III for a cancellation fee based upon defendants’ termination letter dated February 4, 2009.
DISCUSSION
Summary judgment shall be granted where there are no genuine issues as to any material fact and where the moving party is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community Nat’l Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of affirmatively demonstrating the absence of a triable issue and that the summary judgment record entitles the moving party to judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). The moving party may satisfy this burden either by submitting affirmative evidence that negates an essential element of the opposing parly’s claim or by demonstrating that the opposing party has no reasonable expectation of proving an essential element of her case at trial. Flesner v. Technical Comm. Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).
*218The Status of the Listing Agreement
In Tristram’s Landing, Inc. v. Wait, 367 Mass. 622 (1975), the Supreme Judicial Court prospectively adopted certain rules which would govern a broker’s right to a commission. The court held that when a broker is engaged by an owner of property to find a purchaser for it, the broker earns a commission when: (a) he produces a purchaser ready, willing and able to buy on the terms fixed by the owner; (b) the purchaser enters into a binding contract with the owner to do so; and (c) the purchaser completes the transaction by closing the title in accordance with the provisions of the contract. If the contract is not consummated due to the lack of financial ability of the buyer or because of another default by him, there is no right to a commission from a seller. The court held however, that if the failure of completion of the contract results from the wrongful act or interference of the seller, the broker’s claim is valid and must be paid. Id. at 629.
The court observed that this rule could be easily circumvented by language in a purchase and sale agreement or in an agreement between a seller and broker and that in many states, a signed writing is necessary for an agreement to pay commission to a real estate broker, although there is no such requirement in Massachusetts. While the court suggested that legislative consideration might be appropriate, it declined to judicially legislate such a rule. 1
In the case at bar, it is clear from the summary judgment record that the circumstances surrounding the premises initially listed with Brenner by virtue of the agreement of May 15, 2008 continued to evolve. This evolution was in the form of ongoing development of the premises by the seller, the ultimate leasing of a portion thereof, the execution of franchise agreements and finally, the additional listing of other parcels and assets.
On the face of the listing agreement there are numerous ambiguities. It describes at best, the skeletal frameworks of a potential transaction. Furthermore, it is clear that Brenner knew or, as a competent broker, should have known that the listing agreement did not contain all essential terms for a sale. The listing agreement fails to provide sufficient information to a prospective buyer as to precisely what was being sold and what conditions the sale was subject to. Neither side has offered parol evidence in order to explain the meaning and scope of the broker’s exclusive right to sell the property described as “gas station, C-store, Dunkin Donuts franchise operation, and Chinese restaurant; to be built at 240 Hartwell Street, Fall River, MA.” The listing agreement also fails to provide any description of the precise parcels which were included in the sale. On the face of the listing agreement, there is no indication as to the square footage of any of the operations proposed to being sold nor are there any plans or specifications describing what was to be built and when it would be completed. On its face, the subject listing agreement, due to its insufficiencies, is clearly an invitation for a lawsuit.
The holding in Tristram’s Landing requiring that the purchaser be procured on terms fixed by the owner and that the purchaser enter into a binding contract with the owner go hand in hand. It would be expected that the terms fixed by the owner would substantially correspond to the terms contained in the purchase and sale agreement. The skeletal agreement could not be expected to contain all of the necessary terms for this transaction. The record also raises the question of whether the terms and conditions of the original listing agreement were waived by the parties. It is clear that after the rejection of the second Patel offer an effort was made by the parties to provide a precise definition as to what was to be included in the sale. Also the scope of the property and other assets to be sold was substantially expanded resulting in a new selling price of $5,500,000.00. Brenner’s acceptance of such modification is evidenced by the MLS listing for the property at $5,500,000.00. The lengthy Addendum to Authorization to Sell which was prepared by the Trust’s counsel and provided to Brenner could be found to constitute an amendment to the terms of Brenner’s right to sell the premises, particularly in light of the fact that such terms were apparently used in the negotiations with Pedro.
Patel’s Offer of August 21, 2008
On August 21, 2008, Patel submitted to the Trust, through Brenner, his offer to purchase for $3,000,000.00. On its face, the offer to purchase fails to comply with the very limited terms contained in the listing agreement. In particular, it provides for owner or conventional bank financing. As previously referenced, at deposition, Brenner was asked as to his understanding of such term.
It means that the buyer can get his financing either commercially, through a bank, a conventional bank, or through the owner or any other iype of financing that is satisfactory to the buyer at 6.5% for $2,400,000.00.
Question: And if the buyer were unable to obtain financing in accordance with those terms, the buyer would not have an obligation to go forward with the purchase, would he?
Brenner’s Answer: That would depend on the content of the subsequent purchase and sale agreement
Question: And what do you mean by that Mr. Brenner?
Brenner’s Answer: I mean its customary that subsequent to an acceptance of this proposal two, attorneys would get involved, one for the buyer, one for the seller, and they would draft an approved purchase and sale agreement setting forth the conditions for the financing.
*219The offer to purchase also states that the sale would include the completed gasoline service station, convenience store, Chinese restaurant, leasing agreement, Dunkin Donuts franchise agreement with drive-thru and car wash business with 120-foot tunnel car wash.
There is no reference in the listing agreement to a drive-thru being provided nor is there any reference in the listing agreement as to the car wash business.
Furthermore, the agreement is subject to “the execution of a mutually satisfactory purchase and sale agreement for the property which shall then become the agreement between the parties no later than August 28, 2008.” It is clear that even if the so-called offer to purchase were accepted that the contents thereof would not constitute a valid, enforceable and binding agreement. The circumstances in the case at bar are substantially dissimilar from those in the case of McCarthy v. Tobin, 429 Mass. 84 (1999), where the court noted that in order for the offer to purchase to serve as a binding contract, the facts must indicate an intent on the part of the seller and buyer to be bound by the terms of the offer to purchase. In McCarthy, the fact that the seller and buyer had agreed upon all the essential terms of the transaction and the offer to purchase reflected their intent to be bound by the offer to purchase. Id. at 88; see also Coldwell Banker/Hunneman v. Shostack, 62 Mass.App.Ct. 635, 639 (2004).
At best, the Patel offer to purchase, even if accepted, represented an invitation and acceptance of an offer to continue negotiating towards a purchase with either party being in the position to terminate the parties’ dealings if a purchase and sale agreement were not entered into.2
Brenner argues that because Marchione testified that he was not inclined to sell the property for $3,000,000.00 when the Patel offer was submitted, that such circumstance entitles him to a commission. This testimony does not save the day since the summary judgment record does not establish either of the first two criteria for the collection of a commission established by Tristram’s Landing, Inc. v. Wait, 367 Mass. 622 (1975).
Brenner further argues that the language of the listing agreement permits Brenner to potentially circumvent the requirements of Tristram’s Landing. The pertinent language of the listing agreement states:
In the event that a buyer is procured in accordance with the terms of this agreement, ready, willing and able to purchase the property, or if said property is sold or exchanged by the seller or any other person during the term of this agreement. . .
As noted in Tristram’s Landing, ordinarily when an owner of property lists it with a broker for sale, his expectation is the money for the payment for the commission will come out of the sale proceeds. Id. at 628. The Supreme Judicial Court has acknowledged that where brokers who have legitimate expectations that if they bring the parties together on mutually acceptable terms they would expect a commission. The court however concluded that a broker is in a better position than the seller to protect such expectations by including in the brokerage contract"... a provision that the broker is entitled to his commission when it produces a ready, willing and able buyer whom the seller, for whatever reason, refuses to accept.” Capezzuto v. John Hancock Mut. Life Ins. Co., 394 Mass. 399, 403-04 (1985). In the case at bar, the language of the listing agreement fails to contain any language that the broker is entitled to its commission where, after finding a ready, willing and able buyer, the seller, for whatever reason, refuses to accept.3
It is clear that the overly broad language of the subject listing agreement fails to contain the specific language exempting the broker from the Tristram’s Landing requirements. Furthermore, as previously stated, there is no evidence that a buyer was found on terms acceptable to the seller.
Also, Brenner’s claim for a commission fails since our courts have held that in order to take advantage of the Tristram’s Landing exception as to a seller thwarting the sale, the seller must have agreed to sell the property to the broker’s client and a binding purchase and sale agreement executed. Capezzuto v. John Hancock Mut Life Ins. Co., 394 Mass. 399, 402 (1985).
The Alleged Bad Faith of the Trust
Brenner alleges that the summary judgment record supports a claim that the sale of the subject premises was prevented by virtue of the bad faith actions of the Trust. The Supreme Judicial Court has held that liability to pay a commission may exist where:
[UJnethical conduct of the employer . . . results in preventing full performance by the broker although the benefit which the employer sought from the broker’s exertion is obtained by him . . . Unethical conduct or bad faith . . . means a purpose on the part of the defendant to obtain without payment a profit from the plaintiffs exertions . . . Bad faith exists where the employer revokes the broker’s authority or makes the sale through other means when the broker has performed all he has undertaken, or is plainly or evidently approaching success in his undertaking
Bonin v. Chestnut Hill Towers Realty Corp., 392 Mass. 58, 70 (1984), citing Kacavas v. Diamond, 303 Mass. 88, 92 (1939).
To establish liability on a theory of bad faith by the seller, the broker must, at the very least, show that he had produced a customer ready, willing and able to purchase on acceptable terms. Bump v. Robbins, 24 Mass.App.Ct. 296, 307 (1987). In the case at bar, Brenner has failed to establish that Patel was ready, willing and able to purchase the subject premises *220upon acceptable terms to the Trust and furthermore, has failed to demonstrate that any conduct engaged in by the Trust constituted a bad faith attempt to obtain the payment of a profit from Brenner’s exertions. In the case at bar, the subject premises was not sold and was ultimately retained and operated by the Trust. The court therefore concludes, that there is no showing of bad faith in connection with the subject transaction or that there is any prospect of such a showing.
Brenner’s Claim of a Commission in Connection with Dealings with Pedro
It is undisputed that Pedro was introduced to Brenner by Marchione for the purpose of Brenner attempting to negotiate the sale of the subject premises to Pedro. The Trust does not argue that the mere fact of the subject introduction by the Trust somehow precludes the recovery of a commission but rather claims that Marchione was never willing to purchase the premises upon the terms established by the Trust as seller. As hereinabove indicated, the court can infer that the terms of the listing agreement were at least expanded at some point in time to include additional property with a total purchase price of $5,500,000.00. The summary judgment record establishes that while Frank Marchione considered accepting an asking price of $5,275,000.00 for the premises that his brother, Nicola, would not agree to the same and insisted upon an asking price of $5,500,000.00.
The summary judgment record is devoid of any written offer or any purchase and sale agreement signed by Pedro. There is no admissible evidence in the summary judgment record that Pedro ever accepted such terms or, for that matter, any other terms of purchase. Brenner argues that an intention on the part of the Trust to sell for $5,275,000.00 was manifested by the drafting of a purchase and sale agreement by the Trust’s attorney reflecting such amount as a purchase price. Even if both Frank Marchione and Nicola Marchione had considered such proposal, there is no evidence that they ever executed a writing which would have bound them to sell the property for such amount nor that the subject terms were ever accepted by Pedro. Even if the Trust considered lowering its asking price, until such terms were memorialized in writing and accepted by Pedro, the Trust was free to withdraw its offer to sell at a reduced price. The court thus concludes, even taking the evidence in the light most favorable to Brenner, that the summary judgment record fails to establish that Pedro was a buyer ready, willing and able to purchase the premises upon terms satisfactory to the Trust. Furthermore, there is no evidence of bad faith conduct by the Trust in the form of attempting to deprive Brenner of the fruits of his labor for the purpose of personal gain or profits by the Trust. To the contrary, it is undisputed that the Trust referred Pedro to Brenner for the purpose of having Brenner take the appropriate steps to bring the sale of the premises to fruition.
Brenner’s Claim of Breach of Listing Agreement by Termination Letter Dated February 4, 2009
Brenner argues that the February 4, 2009 termination letter did not provide the requisite thirty days stated in the parties’ agreement thus entitling Brenner Realtors to a commission of three percent (3%) of the listing price. The Trust alleges that in light of this court’s previous ruling denying a motion for real estate attachment based upon a claim of alleged premature termination that such ruling is the law of the case. The court concludes that such finding was only in the context of whether or not there was a substantial likelihood of success on the merits and does not constitute the law of the case. The court finds, notwithstanding the contentions of both sides, that there are genuine issues of material fact as to whether such letter was intended to constitute an immediate withdrawal of the subject premises from the market or whether it was intended to constitute compliance with the listing agreement with an understanding that it would continue to be listed for thirty days from the date of receipt thereof. There are also genuine issues of material fact as to whether or not there was a waiver of said thirty-day period even if the letter was intended to constitute immediate withdrawal and whether such alleged withdrawal from the market was accepted or acknowledged by Brenner in light of the continued listing of the premises. Lastly, the letter was issued after an alleged conversation between the parties and was not responded to which may support defendants’ claim that the letter was pursuant to the contract’s terms. These issues cannot be resolved on the basis of the record which is before this court.
ORDER
For the foregoing reasons, it is ORDERED that defendants’ motion for summary judgment be ALLOWED in part and that judgment enter in favor of the defendants on Counts I and II which counts are ORDERED to be DISMISSED. Defendants’ motion for summary judgment on Count III and plaintiffs’ motion for summary judgment on Count III are each DENIED.
The court ORDERS that defendants’ motion for summary judgment as to Count IV is ALLOWED with the exception of so much thereof as alleges bad faith in connection with the alleged premature termination of the listing agreement.
Agreements with real estate brokers continue to be exempt from G.L.c. 259, §7. Meredith & Grew, Inc. v. Worcester Lincoln, LLC, 64 Mass.App.Ct. 142, 152 (2005).
Patel’s affidavit to the effect that he was ready, willing and able to purchase is purely conclusory and speculative.
The court notes that the basic listing agreement appears to be an MLS form. The Greater Boston Real Estate Board agreement for exclusive nght to sell provides that a commission is due if “a buyer is procured ready, willing and able to buy said property or any part thereof, in accordance with the *221price, terms and conditions of this agreement or such other price, terms and conditions as shall be acceptable to the seller, whether or not the transaction proceeds." (Emphasis added). Eno & Hovey, Real Estate §36.2.
|
01-03-2023
|
10-17-2022
|
https://www.courtlistener.com/api/rest/v3/opinions/1874545/
|
889 So. 2d 964 (2004)
Van Ngoc TRUC, Appellant,
v.
KIMMINS CORPORATION and Crawford & Company, Appellees.
No. 1D04-4419.
District Court of Appeal of Florida, First District.
December 20, 2004.
*965 Katherine Stone of Barbas, Koenig, Nunez, Sanders & Butler, Tampa, for appellant.
No appearance for appellees.
PER CURIAM.
On the authority of Mintz v. Broward Correctional Institute, 800 So. 2d 343 (Fla. 1st DCA 2001), we dismiss this appeal of an order that merely grants the employer/carrier's motion to dismiss appellant's petition for benefits. Appellant's reliance on Martinez v. Collier County Public Schools, 804 So. 2d 559 (Fla. 1st DCA 2002), as a basis for treating the appeal as being taken from a final order is misplaced, since Martinez involved the review of an order that actually dismissed the pending claim for benefits, rather than one that merely granted a motion to dismiss. Appellant's request that the court undertake certiorari review of the order in this case is likewise misguided, since appellant will have an adequate and available remedy by appeal, once a final order dismissing his petition is rendered.
APPEAL DISMISSED.
BOOTH, VAN NORTWICK and PADOVANO, JJ., concur.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981034/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0404n.06
No. 10-2225
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
) Apr 13, 2012
In re: MQVP, INC., )
LEONARD GREEN, Clerk
)
Debtor, )
) ON APPEAL FROM THE UNITED
WILLIAM HINDELANG and GLOBAL ) STATES DISTRICT COURT FOR THE
ONLINE CERTIFICATIONS, INC., ) EASTERN DISTRICT OF MICHIGAN
)
Appellants, )
)
v. )
)
MID-STATE AFTERMARKET BODY )
PARTS INC., KEYSTONE )
AUTOMOTIVE INDUSTRIES, INC., )
LKQ CORPORATION, and CHAPTER 7 )
TRUSTEE CHARLES J. TAUNT, )
)
Appellees. )
)
BEFORE: GIBBONS, GRIFFIN, and DONALD, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. This case arises out of a Chapter 7 bankruptcy
proceeding involving debtor MQVP, Inc. Before conversion to Chapter 7, MQVP had been litigating
two separate lawsuits alleging trademark infringement. The trustee of the MQVP estate sought
approval from the bankruptcy court of a settlement to resolve these suits, which involved a payment
of $1.2 million to the estate. Appellants and MQVP creditors William Hindelang and Global Online
Certifications, Inc. objected to the proposed settlement on grounds that the trustee had not met his
-1-
No. 10-2225 In re: MQVP, Inc.
burden of showing that the settlement was reasonable. After a hearing, the bankruptcy court
approved the settlement, and the district court subsequently affirmed.
For the following reasons, we affirm.
I.
Debtor MQVP, Inc. maintained the registered service mark MQVP, which represented a
supply chain quality and assurance program in the aftermarket auto crash parts industry. The
purpose of the MQVP program, in which aftermarket car part manufacturers, distributors, and
insurance companies participated, was to certify the quality and traceability of aftermarket parts that
were manufactured and sold. On August 17, 2006, MQVP filed a voluntary petition for bankruptcy
under Chapter 11 of the Bankruptcy Code. On July 18, 2007, the bankruptcy court converted the
case to a Chapter 7 proceeding, and Charles J. Taunt was appointed trustee.
MQVP was involved in two lawsuits that are relevant to this case. In the first, known as the
“Arkansas litigation” because it was filed in the Eastern District of Arkansas, Mid-State Aftermarket
Body Parts filed suit against MQVP seeking a declaratory judgment that it had not infringed
MQVP’s trademark. MQVP counterclaimed, alleging violations of the Lanham Act, unfair business
practices, tortious interference, unfair competition, and conversion. The district court granted
summary judgment in favor of Mid-State, but the Eighth Circuit reversed and remanded, finding that
there were material, disputed issues of fact for trial. Mid-State Aftermarket Body Parts, Inc. v.
MQVP, Inc., 466 F.3d 630, 631–32, 634 (8th Cir. 2006.)
In the second proceeding, known as the “Michigan litigation” because it was first filed in
bankruptcy court in the Eastern District of Michigan, MQVP filed suit against Keystone Automotive
-2-
No. 10-2225 In re: MQVP, Inc.
Industries, claiming violations of the Lanham Act, unfair business practices, tortious interference,
unfair competition, and conversion. Keystone filed various counterclaims. Although the case began
in the bankruptcy court in the Eastern District of Michigan, it was later transferred to the district
court. Thus, prior to the conversion of its bankruptcy case to Chapter 7, MQVP was actively
litigating two federal cases. The entities against which MQVP was litigating—Keystone and Mid-
State—are associated with the LKQ Corporation and are collectively referred to as “LKQ.”
Although settlement negotiations in Michigan failed, the parties eventually reached a
proposed agreement in the Arkansas litigation that covered both lawsuits. In relevant part, the
proposed settlement provided for (1) the dismissal with prejudice of both the Arkansas and Michigan
litigations; (2) the payment of $1.2 million by LKQ to the trustee; (3) the assignment of certain
intellectual property of MQVP to LKQ; and (4) the withdrawal of all claims filed by LKQ against
the estate.
The trustee then asked the bankruptcy court to approve the proposed settlement. Two
creditors, Global Online Certifications, Inc. and William Hindelang, the former sole shareholder of
the debtor (collectively, “Global Online”), objected to the settlement agreement. In a non-
evidentiary hearing before the bankruptcy court, Global Online argued that the dollar amount of the
settlement was too low and that the trustee had failed to meet his burden of showing that the
settlement was reasonable. Global Online admitted that it had submitted no evidence in support of
its objection; it maintained only that the trustee had not met his burden. It also acknowledged that,
under the settlement, it would receive around $130,000. No other creditors had any objections; in
fact, MQVP’s largest creditor supported the settlement.
-3-
No. 10-2225 In re: MQVP, Inc.
The bankruptcy court approved the settlement. The bankruptcy judge noted that the
following factors influenced her decision to approve the settlement: (1) there was no evidence of
collusion among the parties, as competent counsel for the plaintiff and defendants had engaged in
serious litigation for several years; (2) counsel was experienced in trademark infringement litigation,
the basis of both the Michigan and Arkansas suits; (3) there was sufficient time for discovery in each
case, even though the plaintiffs might have wanted more; (4) going to trial in each case would have
been both time-consuming and risky; (5) a $1.2 million settlement was more beneficial to the estate
than the possibility of a zero dollar recovery; (6) the largest creditor supported the settlement, while
the two objecting creditors were relatively small; (7) the major witness for the plaintiff was
potentially uncooperative and might have weakened plaintiff’s chances of recovery; and (8) the area
of law was complex.
Global Online appealed to the district court the bankruptcy’s court’s order approving the
settlement. Global Online argued that the trustee did not offer, and the bankruptcy court did not
require, any evidence regarding the propriety of the proposed settlement. After a hearing, the district
court upheld the decision of the bankruptcy judge.
We review “the bankruptcy court’s decision directly, according no deference to the district
court.” Nat’l Union Fire Ins. Co. v. VP Bldgs., Inc., 606 F.3d 835, 837 (6th Cir. 2010) (internal
quotation marks omitted). We review the bankruptcy court’s findings of fact for clear error and
questions of law de novo. Id. The bankruptcy court’s approval of a settlement agreement is
reviewed for an abuse of discretion. Lyndon Prop. Ins. Co. v. E. Ky. Univ., 200 F. App’x 409, 413
(6th Cir. 2006).
-4-
No. 10-2225 In re: MQVP, Inc.
II.
At the heart of this case is whether the bankruptcy court abused its discretion by approving
the settlement agreement that the trustee proposed.1 A trustee in bankruptcy has the authority to
seek a settlement of claims available to the debtor, but any proposed settlement is subject to the
approval of the bankruptcy court, which enjoys “significant discretion.” See Fed. R. Bankr. P.
9019(a); In re Rankin, 438 F. App’x 420, 426 (6th Cir. 2011). “The very purpose of such a
compromise agreement ‘is to allow the trustee and the creditors to avoid the expenses and burdens
associated with litigating sharply contested and dubious claims.’” In re Bard, 49 F. App’x 528, 530
(6th Cir. 2002) (quoting In re A & C Props., 784 F.2d 1377, 1380–81 (9th Cir. 1986)). Indeed,
“‘[t]he law favors compromise and not litigation for its own sake . . . .’” In re Fishell, 47 F.3d 1168,
1995 WL 66622, at *2 (6th Cir. 1995) (table) (quoting A & C Props., 784 F.2d at 1380–81)).
1
Also before this court is LKQ’s Motion to Take Judicial Notice or Supplement the Record.
LKQ filed this motion in response to Global Online’s assertion in its reply brief that LKQ had cited
docket entries and pleadings which it had failed to designate pursuant to Federal Rule of Appellate
Procedure 6(b)(2)(B)(ii). Global Online contends that LKQ’s citations to these items must be
stricken.
We find it unnecessary to resolve this question because the bankruptcy court already had
before it the documents—in one form or another—to which Global Online objects. Although LKQ
cites a handful of un-designated entries on the bankruptcy court docket sheet to describe this case’s
procedural background, those same facts are found in other docket entries that were properly
designated. Further, assuming that LKQ was required to designate certain pleadings in the Michigan
and Arkansas lawsuits under Rule 6(b)(2)(B)(ii) before citing them, the bankruptcy court judge had
before her the entire docket sheets in both the Michigan and Arkansas district court
cases—documents which Global Online itself designated as part of the record on appeal. Finally,
although LKQ refers to a few un-designated pleadings in the Michigan litigation when it was still
in bankruptcy court, these pleadings were filed before the very same judge who conducted the
hearing at issue here.
-5-
No. 10-2225 In re: MQVP, Inc.
When determining whether to approve a proposed settlement, the bankruptcy court may not
rubber stamp the agreement or merely rely upon the trustee’s word that the settlement is reasonable.
Reynolds v. C.I.R., 861 F.2d 469, 473 (6th Cir. 1988). Rather, “the bankruptcy court is charged with
an affirmative obligation to apprise itself of the underlying facts and to make an independent
judgment as to whether the compromise is fair and equitable.” Id. The Supreme Court has set forth
the general factors to be considered by the bankruptcy judge in determining whether a proposed
settlement is fair and equitable:
There can be no informed and independent judgment as to whether a proposed
compromise is fair and equitable until the bankruptcy judge has apprised himself of
all facts necessary for an intelligent and objective opinion of the probabilities of
ultimate success should the claim be litigated. Further, the judge should form an
educated estimate of the complexity, expense, and likely duration of such litigation,
the possible difficulties of collecting on any judgment which might be obtained, and
all other factors relevant to a full and fair assessment of the wisdom of the proposed
compromise. Basic to this process in every instance, of course, is the need to
compare the terms of the compromise with the likely rewards of litigation.
Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414,
424–25 (1968). In Bard, this court summarized how other federal courts had implemented the
Supreme Court’s guidance in TMT Trailer—and distilled four factors for bankruptcy courts to
consider:
(a) The probability of success in the litigation; (b) the difficulties, if any, to be
encountered in the matter of collection; (c) the complexity of the litigation involved,
and the expense, inconvenience and delay necessarily attending it; (d) the paramount
interest of the creditors and a proper deference to their reasonable views in the
premises.
Bard, 49 F. App’x at 530. Though Bard is an unpublished opinion, we have continued to apply its
four-factor test when considering challenges to proposed settlement agreements in bankruptcy cases.
-6-
No. 10-2225 In re: MQVP, Inc.
See Lyndon Prop. Ins. Co. v. Katz, 196 F. App’x 383, 387 (6th Cir. 2006); see also Bauer v.
Commerce Union Bank, 859 F.2d 438, 441 (6th Cir. 1988) (setting forth three-part test similar to that
articulated in Bard). Importantly, however, “[a] bankruptcy judge need not hold a mini-trial or write
an extensive opinion every time he approves or disapproves a settlement. The judge need only
apprise himself of the relevant facts and law so that he can make an informed and intelligent
decision, and set out the reasons for his decision.” Fishell, 1995 WL 66622, at *3 (quoting In re Am.
Corp., 841 F.2d 159, 163 (7th Cir. 1987)). Finally, bankruptcy courts and district courts in this
jurisdiction generally accord some deference to the trustee’s decision to settle a claim. See In re
Media Cent., Inc., 190 B.R. 316, 321 (E.D. Tenn. 1994) (citing Bauer v. Commerce Union Bank, 859
F.2d 438, 441 (6th Cir. 1988)); In re Smithey, No. 10-30310, 2011 WL 3102308, at *6–7 (Bankr.
N.D. Ohio, July 25, 2011); In re Engman, 331 B.R. 277, 298–99 (Bankr. W.D. Mich. 2005); In re
West Pointe Props. L.P., 249 B.R. 273, 281 (Bankr. E.D. Tenn. 2000).
A.
The first two Bard factors—the probability of success in the litigation and the difficulties in
the manner of collection—are related and can be analyzed together. In this inquiry, we attempt “to
estimate both the value of the proposed settlement and the likely outcome of litigating the claims
proposed to be settled” in order to determine whether the bankruptcy court abused its discretion. In
re Nicole Energy Servs., Inc., 385 B.R. 201, 239 (S.D. Ohio 2008) (internal quotation marks
omitted). However, we “need not make a precise determination of the outcome . . . since an exact
judicial determination of the values in issue would defeat the purpose of compromising the claim.”
Id. (internal quotation marks omitted). We consider both the stated reasons of the bankruptcy court
-7-
No. 10-2225 In re: MQVP, Inc.
judge as well as additional facts in the record that could have supported her decision. See Fishell,
1995 WL 66622, at *3; In re Haven, Inc., 326 B.R. 901, 2005 WL 927666, at *4 (6th Cir. BAP
2005) (table).
Regarding the first two Bard factors, the bankruptcy judge noted that: (1) there was a risk that
there would be no recovery at all; (2) competent counsel had litigated the case and had “a sense of
the value of the case and the time value of money;” and (3) a key witness for the plaintiff might not
have been cooperative. And, although not specifically discussed by the bankruptcy judge, the
following evidence was also before her: (1) an order from the Arkansas litigation, indicating that
many documents that were key to the plaintiff’s case had been lost or destroyed; (2) unsworn
statements by the trustee that jury verdicts in similar cases averaged between $40,000 and $50,000
in Arkansas, and between $80,000 and $90,000 in Michigan; and (3) an indication by the trustee’s
counsel that, even if MQVP were successful in either litigation, it was likely that there would be an
appeal—which the estate could not afford to litigate. All of these considerations, which inform the
general inquiry into the probability of success and the difficulties of collecting judgments in the two
litigations, appear to weigh in favor of the bankruptcy court’s approval of the settlement.
Nonetheless, Global Online makes several arguments why these considerations are insufficient to
render the settlement reasonable.
First, Global Online cites In re Cohara in support of its argument that it was impermissible
for the bankruptcy court to rely upon the trustee’s unsworn statement that $1.2 million was
significantly higher than the average jury verdict in Michigan and Arkansas for similar cases. In re
Cohara, 324 B.R. 24, 28 (6th Cir. BAP 2005) (“Assertions by counsel do not constitute probative
-8-
No. 10-2225 In re: MQVP, Inc.
evidence.”) (internal quotation marks omitted). Yet decisions of bankruptcy appellate panels do not
bind this court. Phar-Mor, Inc. v. McKesson Corp., 534 F.3d 502, 507 (6th Cir. 2008). Moreover,
in Cohara, the bankruptcy appellate panel was particularly loath to rely on the debtor’s unsworn
statements because that was the only evidence she submitted in support of her argument that she
should be allowed to voluntarily dismiss her Chapter 7 case. 324 B.R. at 28. That is not the case
here: the lengthy and complex litigation history and the approval of the largest creditor provided
additional evidence upon which the bankruptcy court could rely. See Parts B–C, infra. Further, the
debtor made the unsworn statements in Cohara, whereas here the trustee made the statements in
question. A trustee, unlike debtors or creditors, owes “fiduciary obligations to the estate and its
myriad interests,” In re Big Rivers Elec. Corp., 355 F.3d 415, 440 (6th Cir. 2004), and his decision
to settle a claim is accorded some measure of deference. In re Media Cent., Inc., 190 B.R. at 321.
Finally, there is little concern that the bankruptcy judge was unduly swayed by the trustee’s
statements regarding average verdicts; she openly acknowledged that the trustee’s testimony was not
sworn—and in so doing signaled that she was according it less weight.
Second, Global Online claims that the bankruptcy court erred by observing that the plaintiff’s
key witness had not been cooperative and would have weakened the chances of success in the
litigations. The bankruptcy judge made this observation on the basis of an affidavit submitted by
the trustee that indicated that, based on several email communications, the witness was not being
cooperative. Unlike the trustee’s testimony about average verdicts, this statement was presented in
the form of a sworn affidavit. And although Global Online is correct that it was not given a chance
to cross-examine the trustee regarding this statement, Global Online was not automatically entitled
-9-
No. 10-2225 In re: MQVP, Inc.
to an evidentiary hearing on this issue. Depoister v. Mary M. Holloway Found., 36 F.3d 582, 586
(7th Cir. 1994); cf. In re Century Offshore Mgmt. Corp., 119 F.3d 409, 412 (6th Cir. 1997) (holding
that bankruptcy court was not required to conduct evidentiary hearing before granting summary
judgment). In any event, the bankruptcy judge herself downplayed the significance of this fact,
recognizing that Global Online objected to the assertions made in the affidavit. She stated the
following:
There is some concern, although that was rejected by the objecting creditor, that the
. . . major witness here is at odds to some extent with the trustee in this case and was
not necessarily going to be an easy witness for the plaintiffs . . . to have to work with.
It was certainly a concern, although primarily what the Court is looking at is the
risks of litigation . . . in a case where the law is very complex and the time already
spent in this case is enormous.
(emphasis added). It appears that the bankruptcy judge considered this piece of evidence but did not
rely upon it heavily, much as she did in the case of the trustee’s statements regarding average
verdicts. To do so was to use—not abuse—her discretion.
Finally, and perhaps most persuasively, Global Online asserts that the bankruptcy court failed
to analyze the probabilities of winning at trial and how much could be won, instead merely noting
that there was a risk that recovery could be zero. It is true that the risk of a zero recovery exists in
every lawsuit, and it might have been preferable for the trustee to have compared the rough
probability of a zero recovery with the probability of success and the potential range of recoveries
at trial and to have presented this data to the bankruptcy court. However, the trustee’s failure to
quantify the probabilities of success is not fatal.
-10-
No. 10-2225 In re: MQVP, Inc.
In Bard, the trustee presented no expert testimony on the value of the debtor’s lawsuit, while
the debtor offered expert testimony that placed the probability of success at 75% and estimated
damages of up to $4 million, with a lowest reasonable settlement offer of $750,000. Bard, 49 F.
App’x at 531. Despite this expert testimony, we affirmed a settlement agreement that netted just
$92,500 because other evidence suggested that the lawsuit was somewhat weak and that “any
recovery at all for the Bards was far from a certainty.” Id. at 529, 532–33. Here, Global Online did
not articulate its objections to the proposed settlement in any detail or attach exhibits or affidavits,
and so is in a comparably weaker position than the debtor in Bard, who introduced expert testimony
valuing likely jury awards and reasonable settlement offers. Admittedly, there were factors in Bard,
absent here, that severely undermined the prospects of a successful litigation outcome. See id. at
532. Nonetheless, the bankruptcy court in this case did have before it evidence of problems that
dampened the ultimate chances of litigation success: discovery problems due to numerous missing
documents, a potentially uncooperative key witness, and an inability to fund an appeal. Moreover,
adversarial and competent parties, acting at arm’s length, arrived at the $1.2 million settlement figure
after rather intense negotiations and years of litigation—a fact not easily disregarded.
It may have been preferable for the trustee to have attempted to calculate the probabilities of
success and the range of recoveries more concretely and to have presented this evidence in an
affidavit. See, e.g., In re Doctors Hosp. of Hyde Park, Inc., 474 F.3d 421, 428–29 (7th Cir. 2007)
(setting forth range of litigation outcomes). But Global Online has not cited, and research has not
revealed, a single case in which the bankruptcy court’s failure to demand or rely upon a numerical
calculation of the odds of success and potential gains of litigation constituted an abuse of discretion.
-11-
No. 10-2225 In re: MQVP, Inc.
Accordingly, the first two Bard factors weigh in favor of the bankruptcy judge’s approval of the
settlement.
B.
The third Bard factor—the “complexity of the litigation involved, and the expense,
inconvenience and delay necessarily attending it”—strongly supports the bankruptcy court’s ruling.
See Bard, 49 F. App’x at 530. On this point, the bankruptcy court noted that the parties had been
locked in serious litigation for seven years in Arkansas and for three years in Michigan. She also
observed that “the law is very complex and the time already spent in this case is enormous.” The
bankruptcy judge had a solid basis upon which to make this assessment: MQVP first filed the
Michigan trademark infringement complaint in her own court. She also had before her the extensive
docket sheets in both cases. Moreover, the trustee’s counsel noted that the case presented legal
complexities, stating that “[t]he product that MQVP had was very specific and very unique, and
finding case law, finding the exact situation to—or the exact discovery to prove to the Court the case
was not a simple task.” The mere fact that the Arkansas litigation had already been to the Eighth
Circuit—resulting in remand to hold a trial—further demonstrated the complexity of the case.
Indeed, the Eighth Circuit found that “[t]he many uncertain and outright disputed issues of material
fact . . . permeate the chaotic record in this case . . . .” Mid-State, 466 F.3d at 634. Global Online
appears to admit so much in its brief, but it contends that “[t]he fact that a case is very fact intensive
does not mean that the case is complex.” Yet as this court’s own bankruptcy jurisprudence
recognizes, “[t]he fact-intensive nature of [a] dispute also means that any litigation would be time-
-12-
No. 10-2225 In re: MQVP, Inc.
consuming and expensive.” Fishell, 1995 WL 66622, at *4. And this case has already been both
expensive and time-consuming, dragging on ten years if the two lawsuits are combined.
C.
The fourth Bard factor, which considers “the paramount interest of the creditors and a proper
deference to their reasonable views,” also strongly supports the bankruptcy court’s decision. Bard,
49 F. App’x at 530. As the bankruptcy judge recognized, the largest creditor, Results Systems
Corporation (“Results”), supported the settlement. Results stood to lose the most by settling if the
litigation was in fact worth more than $1.2 million; thus, its views were properly given substantial
weight. Results stated that it had already spent “hundreds and hundreds of thousands of dollars to
litigate in four different courts” to recover on its claim and that as a result, “we’d really like to get
paid. We’ve waited long enough. . . . We don’t want to take the risk of a zero at trial. We can’t
afford a zero at trial.” Results had indeed already waited nearly ten years to be paid—a long period
of time in bankruptcy cases by this court’s own measure. See Bard, 49 F. App’x at 533 (finding
noteworthy the fact that creditor had already waited five years for payment). Finally, the bankruptcy
court noted that the two objecting creditors were only a “minority . . . of the creditor pool.” The near
unanimity among creditors here, including the largest one, weighs in favor of approval of the
settlement. See In re Bell & Beckwith, 87 B.R. 476, 480–81 (N.D. Ohio 1988) (affirming bankruptcy
judge’s approval of settlement in part on grounds that only one creditor had objected to the
settlement, while the rest of the creditors, including the largest, had no objections); see also Matter
of Foster Mortg. Corp., 68 F.3d 914, 917 (5th Cir. 1995) (“While the desires of the creditors are not
-13-
No. 10-2225 In re: MQVP, Inc.
binding, a court should carefully consider the wishes of the majority of the creditors.”) (internal
quotation marks omitted).
III.
Upon analyzing the Bard factors, we find that the bankruptcy judge did not abuse her
discretion in approving the settlement and therefore affirm the decision of the district court.
-14-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1873811/
|
752 N.W.2d 32 (2008)
IN RE J.W.
No. 07-2039.
Court of Appeals of Iowa.
February 13, 2008.
Decision without published opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600706/
|
186 P.3d 96 (2008)
The PEOPLE of the State of Colorado, Plaintiff-Appellee,
v.
Cesar HERNANDEZ-CLAVEL, Defendant-Appellant.
No. 06CA1807.
Colorado Court of Appeals, Div. IV.
February 7, 2008.
*97 John W. Suthers, Attorney General, Corina Gerety, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
Douglas K. Wilson, Colorado State Public Defender, Alan Kratz, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.
Opinion by Chief Judge DAVIDSON.
Defendant, Cesar Hernandez-Clavel, appeals the sentence imposed following the judgment of conviction entered upon his guilty plea to theft by receiving. The issue presented is whether the circumstances relating to defendant's status as an illegal alien subject to deportation were proper considerations in the sentencing court's decision to grant or deny probation. We conclude that they were and, therefore, we affirm.
Pursuant to a plea agreement, defendant pleaded guilty to one count of theft by receiving in exchange for the dismissal of other charges against him. Defendant is in this country illegally and is subject to deportation.
At sentencing, defense counsel informed the court that defendant had been rejected by community corrections because he would not be able to work legally and by the probation department because he was deemed a flight risk. Counsel acknowledged that Immigration and Customs Enforcement (ICE) had placed a hold on defendant, and presented several likely scenarios depending on the sentence he received:
If defendant were sentenced to probation, he would likely be held in custody and deported.
If ICE released its hold, defendant would be able to complete probation, obtain a job, and pay restitution.
If defendant were sentenced to the Department of Corrections (DOC), he would serve the sentence and then be deported.
Defense counsel expressed concern that, although, in his view, defendant was an excellent candidate for probation, defendant might be denied that opportunity because of his immigration status.
The prosecutor opposed probation for defendant because he had an immigration hold, would possibly be deported, and, therefore, would not be adequately punished for his offense.
The court denied defendant's probation request. In its ruling, the court stated its firm belief in defendant's culpability, despite defendant's denials during allocution. The *98 court emphasized that all defendant's difficulties were self-inflicted:
[H]e chose to come into this country illegally. He may have exited and come back in, but then he doesn't have the ability to lawfully work at a job while he's here, and the consequences that befall that, including the crimes for which he was being sentenced, "are circumstances that he put into place."
The court also expressed concern that adequate punishment should be imposed:
There has to be a consequence for [the criminal conduct], and probation certainly under these circumstances would clearly not work. He'll be quickly, probably, whisked out of the United States, and I don't know what he's going to choose to do. It doesn't seem to me that that answers all of the questions, and it certainly doesn't address the fact that there has to be more of a consequence for [his conduct].
The court sentenced defendant to two years in the DOC plus a three-year period of mandatory parole. Defendant then filed this direct appeal.
I.
As a threshold matter, we address and reject the People's argument that the appeal should be dismissed. We agree with the People that the grant or denial of probation, as a discretionary determination, is not subject to appellate review. See § 18-1.3-104(1)(a), C.R.S.2007; People v. Newman, 91 P.3d 369, 374 (Colo.2004). But, the statute is not so limited as the People suggest. Here, defendant's contention is that the denial of probation was based on considerations not statutorily or constitutionally authorized. We consider that a proper issue for appeal. See People v. Rossman, 140 P.3d 172, 174 (Colo.App.2006) (appellate review of probationary sentence is warranted when defendant alleges that the trial court exceeded its statutory authority in imposing the sentence); cf. People v. Young, 987 P.2d 889, 894 (Colo.App.1999) (vacating sentence for improper consideration of defendant's right to silence); People v. Wilson, 43 Colo. App. 68, 71, 599 P.2d 970, 973 (1979) (vacating sentence for improper consideration of trauma to victims caused by their having to testify).
II.
Defendant contends that the sentencing court exceeded its authority by basing its decision to deny probation on impermissible factors. Raising a question of first impression, he argues that the court improperly considered his status as an illegal alien and the possibility he could be deported. We disagree.
Colorado courts are given wide discretion in determining an appropriate sentence. This includes the discretion to consider a wide variety of factors, including the circumstances of the offense, individual characteristics of the offender, and prior conduct. See People v. Garberding, 787 P.2d 154, 158 (Colo.1990) ("the sentencing court's responsibility is to individualize and tailor a sentence to fit the crime and the particular defendant before the court"); People v. Graham, 678 P.2d 1043, 1048-49 (Colo.App.1983) ("in determining an appropriate sentence, the trial court may conduct a broad inquiry, largely unlimited as to the kinds of information it may consider").
Such broad discretion serves the purposes of protecting the public, punishing and rehabilitating the offender, and deterring other offenses. See § 18-1-102, C.R.S.2007; Adair v. People, 651 P.2d 389, 392 (Colo. 1982) ("All relevant factors may be considered to determine which alternative is most appropriate to meet the sentencing goals and policies of deterrence, punishment, rehabilitation, and protection of the public.").
A court may not base any sentencing determination on a defendant's race or national origin, or on the fact that he or she is a citizen of a foreign state. See, e.g., United States v. Leung, 40 F.3d 577, 586 (2d Cir. 1994) (defendant's race or nationality may play no adverse role in the administration of justice, including sentencing); United States v. Onwuemene, 933 F.2d 650, 651 (8th Cir. 1991) (defendant's right to due process violated when court imposed harsher sentence based on his national origin and alienage) *99 (citing United States v. Borrero-Isaza, 887 F.2d 1349, 1352 (9th Cir.1989)); People v. Gjidoda, 140 Mich.App. 294, 364 N.W.2d 698, 701 (1985) (sentencing based on national origin or alienage violates equal protection). Here, however, nothing in the record indicates that in denying probation, the sentencing court was punishing defendant for his race, national origin, or Mexican citizenship.
Nonetheless, defendant points out, the sentencing court considered the circumstances of his illegal alien status and the possibility of his deportation in its decision to deny probation. Relying on United States v. Alvarez-Cardenas, 902 F.2d 734, 737 (9th Cir.1990), and State v. Mendoza, 638 N.W.2d 480, 484 (Minn.Ct.App.2002), he argues that such circumstances are not relevant to the nature of the defendant or to the crime and are impermissible factors in the decision whether to grant or deny probation. We disagree.
A sentencing court "may grant probation to a defendant unless, having regard to the nature and circumstances of the offense and to the history and character of the defendant," it determines that imprisonment is more appropriate for the protection of the public. § 18-1.3-203(1), C.R.S.2007. In making that determination, the court may consider, inter alia, whether a sentence to probation would diminish the seriousness of the offense; whether defendant has led a law-abiding life for a substantial period of time prior to the crime; or whether the defendant is likely to respond affirmatively to probationary treatment. § 18-1.3-203(1)(c), (2)(g), (j), C.R.S.2007 (listing criteria for granting probation).
A sentence to probation requires that a defendant live successfully in the community. Accordingly, conditions of probation generally include specific requirements that the defendant obtain employment, pay restitution, live peaceably, and report regularly to a probation officer. See § 18-1.3-204, C.R.S. 2007. In determining the appropriateness of a sentence to probation, a trial court, therefore, must evaluate the likelihood that a defendant has the ability to successfully comply with these conditions.
Although consideration of a defendant's status as a foreign national, in and of itself, is improper, we agree with those courts in other jurisdictions that have determined that the surrounding circumstances of a defendant's alien status may be relevant to a sentencing court's decision whether to grant or deny probation. See People v. Sanchez, 190 Cal. App. 3d 224, 231, 235 Cal. Rptr. 264, 267 (1987) (fact of illegal alien status does not preclude grant of probation, but court may consider that fact with all other relevant factors); Yemson v. United States, 764 A.2d 816, 819 (D.C.2001) (sentencing court may not treat defendant any differently from other defendants solely because of alien status; however, in considering a sentence of probation, court is not required to "close its eyes" to a defendant's status as an illegal alien); see also State v. Martinez, 38 Kan. App. 2d 324, 165 P.3d 1050, 1055-57 (2007) (the fact that defendant is an illegal alien may, under certain circumstances, be a substantial and compelling reason to depart from sentencing guidelines and deny probation).
As some courts have pointed out, the circumstances of a defendant's illegal alien status can be relevant to a court's probation determination because they may demonstrate the defendant's unwillingness to conform his or her conduct to the conditions of probation. See United States v. Gomez, 797 F.2d 417, 419 (7th Cir.1986) (sentencing judge has wide discretion to consider all reliable and pertinent information which might reasonably bear on the court's decision; illegal entry into this country is no different from any other recent prior illegal act); Alexander v. State, 837 N.E.2d 552, 556 (Ind.Ct.App.2005) (defendant's illegal status and the fact that he took no steps to rectify it demonstrated his disregard for the law), disapproved of on other grounds by Ryle v. State, 842 N.E.2d 320 (Ind.2005); State v. Zavala-Ramos, 116 Or.App. 220, 840 P.2d 1314, 1317 (1992) (immigration status cannot be considered as a per se aggravating factor but it is not irrelevant to whether a defendant can conform his conduct to legal requirements).
Other courts have reasoned that a defendant's inability to remain in the jurisdiction to benefit from probation, or if he stays, his inability to comply with a condition of probation, is relevant to whether a probation sentence *100 would be at all effective. See People v. Espinoza, 107 Cal. App. 4th 1069, 1076, 132 Cal. Rptr. 2d 670, 675 (2003) (trial court free to exercise discretion to deny probation where defendant faces substantial likelihood of imminent deportation); State v. Svay, 828 A.2d 790, 794 (Me.2003) (possibility of deportation may be considered by the court because the impact that a particular sentence will have on the offender is relevant to the offender's likelihood of rehabilitation).
At defendant's sentencing hearing in this case, the court was presented, as relevant here, with the following information:
Defendant was in the United States illegally.
He had been back and forth across the border several times.
He admitted using false residence cards to obtain entry into this country.
He had a 2006 conviction for attempted illegal entry and had received a three-day jail sentence.
He claimed that he had pleaded guilty so he could return quickly to Mexico.
He was not legally able to obtain employment.
ICE recently had placed an immigration hold on defendant, and unless it released the hold, defendant would be deported either immediately, if sentenced to probation, or as soon as he had finished a sentence to DOC.
Costs and restitution were likely to be in the thousands of dollars.
In its sentencing ruling, after discussing its disbelief of defendant's post-plea protestations of innocence, the court found that it was through defendant's own actions that he could not maintain lawful employment and, consequently, could not successfully meet that condition of probation. The court also was concerned that, because it appeared that defendant was likely to be deported, he could not benefit from participation in probation and would suffer no consequences for his criminal behavior. The court also considered, based on the information presented, that it appeared that defendant probably would be deported immediately if he received probation and, therefore, costs and restitution, which were significant, would never be paid.
But, defendant points out, whether he would be deported was not within the control of the sentencing court. Thus, he contends, the possibility of his deportation was too speculative to have been fairly considered. However, even assuming that under some circumstances that might be so, the court's concern here that defendant would not be available to participate in probation either by deportation or by his own actions has ample record support.
Defense counsel suggested at the sentencing hearing that defendant thought his prior conviction for illegal entry was "inaccurate," but every other fact pertaining to the circumstances of defendant's history and illegal status was admitted or undisputed. Moreover, the court knew that the probation department had rejected defendant because it considered him to be a flight risk, that defendant admitted he had pleaded guilty only so he could go back to Mexico, and that whether defendant was sentenced to DOC or sentenced to probation, he was likely to be deported.
Accordingly, we conclude that the sentencing court did not err in considering the circumstances surrounding defendant's status as an illegal alien in its decision whether to grant or deny defendant a sentence of probation. Contrary to defendant's contention, we find no violation of defendant's equal protection rights. Although principles of equal protection require that similarly situated persons be treated in a similar manner, they do not require that a defendant receive an identical sentence to that imposed on another defendant for the same offense so long as the statutory sentencing ranges are the same for all persons convicted of the same or similar offenses. People v. McCarty, 851 P.2d 181, 185 (Colo.App.1992), aff'd, 874 P.2d 394 (Colo.1994); see also People v. Jenkins, 180 Colo. 35, 38, 501 P.2d 742, 743 (1972) (the individualized nature of sentencing arises from the discretion granted to the sentencing court and does not implicate equal protection). Defendant's sentence here falls within *101 the applicable statutory range. See §§ 18-1.3-401(1)(a)(V)(A), 18-4-410, C.R.S.2007.
The sentence is affirmed.
STERNBERG[*] and KAPELKE[*] JJ., concur.
NOTES
[*] Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S.2007.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2614969/
|
252 Kan. 564 (1993)
847 P.2d 1219
STATE OF KANSAS, Appellee,
v.
DAVID G. THOMAS, Appellant.
No. 67,429
Supreme Court of Kansas.
Opinion filed March 5, 1993.
Benjamin C. Wood, special assistant appellate defender, argued the cause, and Jessica R. Kunen, chief appellate defender, was with him on the brief for appellant.
Debra S. Byrd, assistant district attorney, argued the cause, and Nola Foulston, district attorney, and Robert T. Stephan, attorney general, were with her on the brief for appellee.
The opinion of the court was delivered by
SIX, J.:
This case is about jury instructions, evidentiary rulings, the identity of a confidential informant, and the manner in which a first-degree murder trial was conducted by the trial judge. David G. Thomas was convicted under K.S.A. 1992 Supp. 21-3401. He contends he is entitled to a new trial because the trial judge: (1) was partial and unfair; (2) did not permit him to present his defense; (3) improperly instructed the jury on first-degree murder; (4) failed to instruct on accomplice or on lesser included offenses; (5) admitted evidence of Thomas and his girlfriend threatening witnesses and of a previous conviction of Thomas' girlfriend; and (6) did not require the State to disclose the identity of a confidential informant.
*566 Our jurisdiction is under K.S.A. 1992 Supp. 22-3601(b)(1) (based on Thomas' conviction of a class A felony or on his maximum sentence of life imprisonment).
We find no reversible error and affirm.
Facts
Thomas borrowed a .22 rifle from Joy and Stan Austin in March 1991, indicating that he wanted to go hunting. The next evening, two brothers of his longtime girlfriend, Duchess Couser, were with Thomas when he drove to Wichita's north side looking for rock cocaine.
Thomas previously had told Eddie Wynn, one of Duchess' brothers, and others that someone "had ganked him" (sold bad cocaine or drugs). Thomas pulled into a driveway next to a recreation center and asked a man standing nearby if he had any cocaine. The man replied that he did. Thomas got out of the car, reached into the back seat, and pulled out a gun. Earl testified that Thomas aimed the gun at the man, who was standing nearby. The man started to run to the back of a building and was pursued by Thomas. Eddie heard two shots, Earl heard three. At trial, neither Eddie nor Earl were able to describe the man they had seen that evening. When Thomas returned to the car he showed Eddie some crack rocks and said, "I got this." Earl asked Thomas if he "shot the guy." Thomas replied, "Pussy ass nigger sold me some bad drugs."
The trio drove to the Austins' house, where Thomas wiped with alcohol and towel-dried the .22 rifle. Joy Austin testified Thomas said he wiped off the gun because "he didn't want anybody to do something with it and blame him because his fingerprints were on it." Earl testified that Thomas again, when asked about the cocaine rocks, said he got them "off the guy he shot." The body of Veotis Richmond, who was known to sell drugs, was found the next morning. Richmond died from a single gunshot to the head. The bullet was retrieved during an autopsy. The pathologist testified that the shot had been fired from some distance. Richmond also had sustained several injuries to his face, which the pathologist speculated were caused by foot stomping. According to the pathologist, the marks and abrasions on Richmond's neck and knees and the lacerations on his fingers could *567 have been due either to an offensive or defensive injury. A firearms examiner testified that the bullet removed from Richmond's head came from the gun Thomas had borrowed from the Austins. Richmond's death was reported on the five o'clock evening news. After seeing the news report, Earl asked Thomas, "Do you know you killed him?" Earl testified that Thomas replied, "It's just another nigger dead."
The month after Richmond's death, Duchess called Earl to the phone. Thomas was on the line. Earl testified that Thomas "just said, you know, "Why did you have to say it on me,' you know, just he said, you know, `I could have had my family come down here and just' pow pow, you know, just like that." Earl stated that he understood Thomas' words to be a threat to kill him "[f]or telling on him." During the homicide investigation, a confidential informant (CI) spoke to Officer Terry Fettke. According to Fettke, the CI indicated that he or she had heard two women (Tracy Jackson and Evelyn Robinson) discussing an incident where a black male, known as "Roger," had made threatening comments about someone named Veotis who had sold Roger bad drugs. Thomas filed a motion to disclose the identity of the CI. The motion was denied.
A Fair and Impartial Judge
According to Thomas, the trial judge "repeatedly injected himself into the trial," and, thus, Thomas' case was prejudiced. Specifically, Thomas complains that the trial judge discounted defense evidence, belittled defense counsel, impeached witnesses, argued with defense counsel, applied the rules of "reality of evidence," gave speech after speech on evidentiary theories in front of the jury, curtailed and interfered with defense cross-examinations, denied the defense the right to put on evidence, and so saturated the trial with interference corrosive to Thomas' right to fairness that the very fabric of the trial fell apart. Thomas emphasizes that he is entitled to a trial before a fair and impartial judge. He relies on State v. Hamilton, 240 Kan. 539, 731 P.2d 863 (1987), in which a conviction was reversed for judicial misconduct.
The State insists that Thomas' contentions are based upon his slanted characterization of the trial. The State emphasizes that Thomas bears the "burden to prove error in the judge's conduct. *568 State v. Stoops, 4 Kan. App. 2d 130, 132, 603 P.2d 221 (1979)." We agree. According to the State, (1) appellate counsel has gone to extraordinary lengths to distort the record in an attempt to argue Thomas was denied a trial before a fair and impartial judge, (2) Thomas' claims are simply not supported by the record, (3) the trial court made every effort to ascertain the truth of the charges against Thomas and to insure that the trial was properly conducted, and (4) the jury was specifically instructed that nothing the court did was meant to influence the verdict.
We have examined the record of the specific incidents complained of by Thomas. The complaints are similar to those asserted by the defendants in State v. Diaz & Altemay, 232 Kan. 307, 654 P.2d 425 (1982), which involved the same trial judge. We recently reaffirmed the Diaz & Altemay approach to the issue of judicial misconduct. State v. Nguyen, 251 Kan. 69, 79-80, 833 P.2d 937 (1992).
Thomas contends the trial court spontaneously interrupted his counsel's cross-examination of Eddie in a manner which was implicity critical of counsel.
Example:
"Q. [Defense counsel] I'm asking you. When you testified earlier, as I understood your testimony, show me which alley you can use this as a pointer. Show me which alley you were indicating the vehicle you were riding in went in.
"THE COURT: Are you saying he said an alley?
"Q. [Defense counsel] Or driveway. Show me where the vehicle went."
Example:
"Q. [Defense counsel] So, to answer my question, you're fairly certain that this is the driveway you entered into and not any of these other two driveways?
"A. Yes.
"THE COURT: For the sake of the record, in case someone ever reviews it, would you mind specifying some spot, location, direction or landmark somewhere on the diagram about which questions have been asked?
"[Defense counsel]: Yes, your Honor. Point well taken."
Example:
"Q. [Defense counsel] How certain are you of your testimony?
"THE COURT: Counselor, at what time are you asking about right now? Leaving his house? Leaving the other person's house? Leaving the liquor *569 store or leaving the residence which he testified about? I just I [sic] trying to remove ambiguities, that's all.
"Q. [Defense counsel] Mr. Wynn, as Mr. Thomas, yourself, and Earl Couser are leaving your residence, getting ready to leave and go to the liquor store, was any mention ever made by Mr. Thomas that he was upset over being cheated on a drug transaction?"
Example:
"Q. [Defense counsel] Now, previously, you've testified that you rode around approximately 40 minutes after you left the liquor store; is that what you're telling us today?
"THE COURT: Well, counselor, I'm sorry, but are you referring to some other occasion? Or are you talking about earlier this afternoon?
"[Defense counsel]: Well, actually, I'm talking about his previous testimony at preliminary hearing.
"THE COURT: Well, then you're going to have to lay a foundation and ask it if a certain question was asked and a certain answer was given."
Example:
"Q. [Defense counsel] ... Would you read aloud the lines I have marked in yellow, starting at line two and concluding with line 21?
"THE COURT: You may ask him to read it to himself, and ask him if he were asked those questions and gave those answers, but that's the way you'll have to proceed.
"[Defense counsel]: Okay. Thank you, Your Honor."
Example:
"Q. [Defense counsel) Now, Mr. Wynn, having reread your preliminary hearing testimony, at preliminary hearing you testified that
"THE COURT: No, wrong.
"Q. [Defense counsel] Mr. Wynn, having reread your preliminary hearing testimony, does that refresh your recollection as to whether or not anything in addition to a six pack of beer was purchased at the liquor store?"
Thomas complains of the trial judge's comment at the time the gun was introduced.
Example:
"Q. [The State] Mr. Wynn, I'm showing you
"THE COURT: Just a moment. Check that. (A sheriff's officer examined the exhibit.)
"THE COURT: Please. I didn't mean to order you about.
"[The State]: It's been checked.
"THE COURT: Well, Ms. Fitch, we don't take anybody's word for anything, we check it every single time. We don't point guns at people we don't intend to shoot, ever.
"[The State]: Good point, Your Honor.
*570 "Q. Mr. Wynn, I'm showing you what's been marked as State's Exhibit No. 1. Have you ever seen this before?
"[Defense counsel]: Let me object, Your Honor. This is not part of my cross examination. This exhibit was not presented during direct. If I have to limit myself to the scope of direct, I think
"THE COURT: Counsel, you went into great detail or some detail about the use of the gun. This is redirect on your cross.
"[Defense counsel]: Thank you, Your Honor."
Thomas asserts that the trial judge expressed panic in front of the jury about Thomas not being present.
Example:
"[Defense counsel]: I understand, Your Honor. I wanted to clean up this from prior to lunch.
"THE COURT: I don't want to
"[The State]: Your client's not here.
"THE COURT: We have a real time problem here now, so if you're going to call this particular witness, please call him now.
"[Defense counsel]: Judge, do you want me to proceed?
"THE COURT: Oh, God, where's the defendant? We seem to have lost track of the defendant. Have you looked at those instructions, ma'am?
"[The State]: Somewhat, yes, Your Honor.
"THE COURT: I could change the elements instruction if the lawyers want it changed, but
(The defendant entered the courtroom.)"
Thomas complains of numerous additional instances of a similar nature. Thomas argues that the right to a fair trial is fundamental, so the usual "harmless error" standard of review does not apply. The purpose of trial is to ascertain the truth or falsehood of the charges against Thomas. It is a part of the duty of the trial judge to see that the full truth is developed by the evidence. Diaz & Altemay, 232 Kan. at 313. Allegations of judicial misconduct during trial must be decided on the particular facts and circumstances surrounding the alleged misconduct. The conduct complained of must be examined and a determination made as to whether it was prejudicial to substantial rights. Where a construction can properly and reasonably be given a remark which will render it unobjectionable, the remark will not be regarded as prejudicial. Diaz & Altemay, 232 Kan. at 313.
Thomas has failed to show that the trial court's conduct constituted prejudicial error.
*571 The Right to Present a Defense
Thomas relies on Chambers v. Mississippi, 410 U.S. 284, 303, 35 L. Ed. 2d 297, 93 S. Ct. 1038 (1973), which held Chambers was denied a fair trial by evidentiary rulings which disallowed testimony that a third party had confessed. Thomas applies the Chambers criteria to the facts in the case at bar, i.e., the trial court's failure to admit Officer Fettke's testimony for the truth of the matter regarding the CI. Thomas concludes that the Chambers factors were met; consequently, Thomas should have been allowed to present statements made by a man named "Roger" that a different person committed the crime. Chambers identified four factors which provided "persuasive assurances of trustworthiness," so as to require admission. First, each of the declarant's confessions was made spontaneously to a close acquaintance soon after the murder took place. Second, each confession was corroborated by some other evidence. Third, each confession was clearly self-incriminating and against the declarant's interest. Finally, the declarant was available for cross-examination if any question arose concerning the truthfulness of his out-of-court statements. Chambers, 410 U.S. at 300-01.
Thomas explains that in State v. Jackson, 244 Kan. 621, 772 P.2d 747 (1989), we indicated that a trial court should allow defense counsel to show that another party committed an offense in the situation where there is a declaration against interest on the part of the involved third party. The State counters by discussing the relevant testimony at the pretrial hearing in the case at bar. According to the State, Tracy Jackson testified that she was with Roger on March 26, and she never told anyone she took Roger to 9th Street (the area where the murder occurred) the day of the crime. She did, however, take him to 9th Street the previous day, but Roger did not threaten to kill Richmond. Furthermore, Evelyn Robinson testified that on March 26 she was not present when Roger was allegedly dropped off at 9th Street and she did not hear him make any threats against Richmond. The State highlights the fact that at trial, neither side called Tracy, Evelyn, or Roger as witnesses even though Tracy and Evelyn were present at trial and Roger was available in the Sedgwick County jail. The State explains that although the trial *572 court would not admit the evidence to prove the truth of the matter asserted, the court did allow Fettke to testify regarding the fact that the statement was made by the CI.
The State asserts that Thomas' application of Chambers to the case at bar is flawed for a variety of reasons. First, there is no positive evidence that Roger made the statements. Furthermore, unlike the confessions at issue in Chambers, the statements attributed to Roger did not possess the "considerable assurance of their reliability" that impressed the Chambers court. 410 U.S. at 300. The State argues that the statement attributed to Roger did not constitute a confession to the crime Thomas was charged with. (If the CI was believed, Roger at most told the two women that he was going to "get" someone.) Second, there was no corroborative evidence that Roger murdered Richmond. There was no evidence that Roger was in possession of a rifle, let alone the rifle used to kill Richmond. Furthermore, if Thomas seeks to prove the murder was committed by someone who had a fight with Richmond, there is no evidence that Roger and Richmond were in a fight. Testimony that Roger was present in the area the day before the murder, contrary to Thomas' assertion, provides no corroboration for the statements he allegedly made to the two women. Third, Roger's statement that he was going to get someone was not "unquestionably" against his interest as was the third-party confession in Chambers. Finally, unlike Chambers, Thomas did not produce Roger at trial. In addition, he did not call either of the two women.
Thomas' reliance on Chambers does not persuade us to conclude that the trial court erred in refusing to admit Fettke's testimony for the truth of the matter asserted. The facts in Thomas do not meet the Chambers criteria.
Thomas argues in the alternative that Roger's statements to the CI should have been admitted based upon the hearsay exception, K.S.A. 1992 Supp. 60-460(j), declarations against interest. The standard of review on exclusion under 60-460 is abuse of judicial discretion. State v. Quick, 226 Kan. 308, 317, 597 P.2d 1108 (1979). K.S.A. 1992 Supp. 60-460(j), like Chambers, rests on the assumption that hearsay statements which rise to a level of reliability and trustworthiness may properly be admitted. The facts in the case at bar do not demonstrate such reliability.
*573 Thomas, in framing his "right to present a defense" claim, asserts that he has been denied his right to due process, to a fair trial, and to compulsory process. Thomas does not present an independent analysis for these four claims. The due process and fair trial arguments are aspects of the right to present a defense. Thomas is correct when he advances the premise that he has a right to present a defense. See State v. Irons, 250 Kan. 302, 309, 827 P.2d 722 (1992). However, this right is subject to statutory rules and case law interpretation of rules of evidence and procedure. For example, as the State points out, we have repeatedly held that a trial court can exclude, as irrelevant, circumstantial evidence that someone other than the defendant committed the crime in situations where the State's case is built on direct evidence. Jackson, 244 Kan. at 625. In the case at bar, the State's case was based on direct evidence.
Thomas also asserts that the trial court erred in refusing to admit Eva McDonald's testimony. However, Thomas does not indicate what her testimony would have been. The State informs us that Eva would have testified that Richmond was acting overbearing and combative prior to his death. We find no error in the exclusion of Eva's testimony.
The trial court did not err in limiting Officer Fettke's testimony.
Jury Instructions First-Degree Murder
The trial court instructed the jury on first-degree murder as follows:
"Defendant is charged with the crime of Murder in the First Degree. Defendant pleads not guilty. To establish this charge each of the following claims must be proved. Defendant killed a human being, Veotis E. Richmond, in Sedgwick County, Kansas, between March 26 to March 27, 1991:
A. Committed in the perpetration of or attempt to perpetrate a felony, or
B. Committed:
1. maliciously,
2. willfully,
3. deliberately, and
4. with premeditation.
Felony Murder Rule: If the death of a human ensues in the perpetration or attempt to perpetrate a felony dangerous to human life, then Murder in the First Degree is committed even though the death of a human being is not intended.
"Aggravated Robbery and Robbery, and attempt to commit same, are felonies dangerous to human life."
*574 Thomas objected to this instruction as being confusing and not in conformity with the Pattern Instructions for Kansas (PIK). Thomas' counsel stated that the felony-murder instruction should not be included with the premeditated murder instruction.
Thomas observes that the instruction did not specify the felony that the jury needed to determine had been committed in order to satisfy the felony-murder elements. Thomas' counsel made a general objection to the trial court's failure to follow PIK. However, he did not assert that the failure to specify the felony was error. Thomas declares that "[t]o one unschooled in the law, the killing itself could be considered a felony." Thomas emphasizes that PIK requires the relevant element to be instructed on as follows: "2. That such killing was done while (in the commission of) (attempting to commit) [the felony is to be specified here], a felony." PIK Crim.2d 56.02 (1992 Supp.). The trial court defined aggravated robbery, robbery, and attempt.
"`Aggravated Robbery' is a robbery committed by a person who is armed with a dangerous weapon or who inflicts bodily harm upon any person in the course of such robbery.
"`Robbery' is the taking of property from the person or presence of another by threat of bodily harm to that person or another person or by force.
"An `attempt' is any overt act toward the perpetration of a crime done by a person who intends to commit such crime but fails in the perpetration thereof or is prevented or intercepted in executing such crime.
"It shall not be a defense to a charge of attempt that the circumstances under which the act was performed or the means employed or the act itself were such that the commission of the crime was not possible."
According to Thomas, these instructions failed to limit the jury to a consideration of specific felonies. Thomas also alleges that the last paragraph of the instruction was confusing and unnecessary.
Thomas argues that the most significant flaw in the murder instruction was the failure to include all of the essential elements of the offenses of robbery and aggravated robbery. The instructions for robbery and aggravated robbery omitted the element of intent. Thomas reasons that in State v. Clingerman, 213 Kan. 525, 516 P.2d 1022 (1973), we granted a new trial based upon the failure of the trial court to include one of the necessary elements of robbery in its elements instruction on felonious intent. *575 Thomas states that his counsel objected to the elements instruction and that he "need not show that the error was clear, only that it existed." However, Thomas does not provide a citation to the record. We find no specific objection to the robbery and aggravated robbery instructions.
Thomas contends that in a felony-murder case: (1) Where there can be a reasonable doubt as to what underlying felony a defendant might be guilty of, a trial court must instruct on each of those felonies; (2) where certain of those felonies are not inherently dangerous, the jury must be so informed; and (3) the jury must be informed that it cannot convict on felony murder if it finds that the underlying felony was not inherently dangerous.
Thomas indicates that he was not separately charged with aggravated robbery and robbery and that there was no direct evidence of exactly what happened. Thomas advances a hypothetical scenario in support of his claim that the evidence could have easily justified an instruction on possession of cocaine or on theft as a lesser crime of robbery. Thomas concludes that just as there was evidence to support the instruction upon aggravated robbery and robbery as inherently dangerous underlying felonies, there was arguably evidence to support the instruction upon the not inherently dangerous felonies of possession of cocaine and theft. According to Thomas, it was clear error to select only the inherently dangerous felonies for inclusion as underlying felonies.
The State responds by explaining that it is well established that "instructions are to be considered together and read as a whole, without isolating any one instruction. [Citation omitted.] If the instructions properly and fairly state the law as applied to the facts in the case, and if the jury could not reasonably have been misled by them, then the instructions do not constitute reversible error although they may be in some small way erroneous." State v. Morris, 244 Kan. 22, 23, 765 P.2d 1120 (1988).
According to the State, sections A and B of the instruction on first-degree murder were patterned after K.S.A. 1990 Supp. 21-3401(a) and (b). The State also believes that when all of the instructions are read together it is clear that robbery, aggravated robbery, or the attempt to commit those crimes were the pertinent felonies. The State next insists that the last paragraph following the attempt instruction properly mirrors the law in *576 K.S.A. 1992 Supp. 21-3301(b) and, therefore, should not serve as a basis for setting the conviction aside.
The State explains that the proper standard of review on the omission of the element of intent is stated in State v. Redford, 242 Kan. 658, Syl. ¶ 4, 750 P.2d 1013 (1988): "When a trial court errs in omitting from its instruction an element of the crime charged, the omission is reversible error if the appellate court is firmly convinced there is a real possibility the jury would have returned a different verdict had the error not be made."
The State addresses Thomas' theft and possession of cocaine claims by contending that there was evidence produced at trial about what happened. Thomas told Eddie he shot the victim in the legs, the victim fell to the ground, and Thomas took the cocaine from him. The only contradictory evidence was that the victim was shot in the head, not the legs. The State asserts that there was no evidence that the taking of cocaine was anything but intentional. We agree. Thomas' argument does not provide a basis for setting aside his conviction.
The standard of review applied to jury instruction error requires an objection before the jury retires, stating distinctly the matter objected to and the grounds for the objection, unless the instruction or the failure to give the instruction is clearly erroneous. K.S.A. 22-3414(3). State v. Crabtree, 248 Kan. 33, 39, 805 P.2d 1 (1991).
Thomas asserted specific errors when he objected to the first-degree murder instruction. However, he failed to object to the lack of the intent element. A general objection to the failure to use PIK should not mean that counsel also objected to the failure to specify the underlying felony. We apply the clear error standard of Crabtree to Thomas' argument concerning the absence of the intent element. Counsel should have specified this alleged error. Otherwise, trial counsel would be able to generally object to the failure to use a PIK instruction and new arguments advancing specific objections arising from an analysis of PIK notes and comments could be used by appellate counsel for the first time on appeal.
With respect to the failure to include the intent element in the aggravated robbery and robbery instructions, State v. Lucas, 221 Kan. 88, 557 P.2d 1296 (1976), controls the case at bar. In *577 Lucas, clear proof of intent was established by defendant's use of a deadly weapon. Intent was never made an issue in Lucas. Lucas failed to lodge an objection to the instructions given. We held it was not reversible error to fail to instruct on intent. 221 Kan. at 90-91. We observed in Lucas that it would be better practice to include the element of intent as suggested in PIK Crim.2d 56.30, 56.31 (1975 Supp.). 221 Kan. at 91. Thomas, like Lucas, used a deadly weapon. Thomas failed to specifically object to the absence of the intent element in the instruction. Jury instructions are to be considered together and read as a whole without isolating any one instruction. Crabtree, 248 Kan. at 39. The trial court did give an instruction on the State's burden to prove the required criminal intent.
We analyzed a jury instruction challenge in State v. Morris, 244 Kan. at 23, and reasoned that if the instructions properly and fairly state the law as applied to the facts in the case and if the jury could not reasonably have been misled by them, then the instructions do not constitute reversible error although they may be, in some small way, erroneous. We have previously addressed the merits of using PIK instructions. State v. Macomber, 244 Kan. 396, Syl. ¶ 5, 769 P.2d 621 (1989). In Macomber, we concluded that the failure to give the PIK instruction did not prejudice the defendant's substantial rights. 244 Kan. at 406. Combining the premeditated murder and felony-murder instructions in the case at bar did not prejudice Thomas' substantial rights. The felonies of robbery, aggravated robbery, and attempt of same were the focus of the total set of jury instructions. The evidence did not support the hypothetical facts regarding the possession of cocaine and theft advanced by Thomas' appellate counsel.
We find no prejudical error in the instructions on premeditated murder and felony murder.
Lesser Included Offenses
Thomas objected to the trial court's failure to give second-degree murder and voluntary manslaughter instructions. According to Thomas, the evidence indicated that the firing of the rifle could have resulted from anger arising from a fight with Richmond.
*578 The State contends Thomas was either guilty of first-degree murder or he was not guilty. We agree. His defense at trial was that someone else committed the crime. Lesser included offense instructions are not required in felony-murder cases unless the evidence of the underlying felony is weak or inconclusive. State v. Bailey, 247 Kan. 330, 338-39, 799 P.2d 977 (1990), cert. denied 114 L. Ed. 2d 108 (1991). We recently discussed the rules regarding lesser included instructions in State v. Deavers, 252 Kan. 149, 843 P.2d 695 (1992), a premeditated murder case. Instructions on lesser included offenses must be given even though the evidence is weak and inconclusive and consists solely of the testimony of the defendant. An instruction on a lesser included offense is not required, however, if the evidence at trial excludes a theory of guilt on the lesser offense.
In the case at bar, the evidence indicated that Richmond's murder was committed in the course of an aggravated robbery. Therefore, under the Bailey and Deavers analyses, lesser included offense instructions were not required.
The evidence does not support Thomas' theories regarding second-degree murder and voluntary manslaughter. In Deavers, we noted that "[s]talking someone, firing a shot, pausing, and shooting again is evidence of premeditation." 252 Kan. at 153. A similar scenario, in the case at bar, was described by both Eddie and Earl. Thomas went to the north side in Wichita with the intent to locate Richmond. He borrowed a rifle, got out of the car with the rifle, and shot Richmond. The facts support a finding of premeditation.
An Accomplice Instruction
Thomas asserts that an accomplice instruction is proper in all circumstances where an accomplice testifies, citing State v. Anthony, 242 Kan. 493, 501, 749 P.2d 37 (1988). Thomas argues that the testimony of Eddie and Earl is suspect because both men went with Thomas to Wichita's north side. Thomas believes that both men "could be deemed aiders and abettors" because there "was some evidence that Earl and Eddie were enlisted with knowledge that their mission was to seek out the seller of bad drugs."
*579 The State reminds us that Thomas did not request an instruction on accomplice testimony. The standard of review is limited to determining whether the failure to give the instruction was clearly erroneous. K.S.A. 60-251(b). The evidence suggested the trip to the north side was either unexpected or a detour taken because Thomas had been sold bad drugs. Thomas is not entitled to an accomplice instruction. See State v. Young, 14 Kan. App. 2d 21, 37, 784 P.2d 366, rev. denied 245 Kan. 788 (1989). Thomas has not demonstrated clear error. He was not prejudiced by the trial court's failure to give an accomplice instruction.
Evidence of Threats and of A Previous Conviction For Aggravated Intimidation of A Witness
Thomas insists that the admission of testimony regarding threats that he had allegedly made against Eddie if Eddie testified was prejudicial error. The threat testimony was objected to at trial on the grounds of relevance. Thomas also asserts that the State should not have been allowed to introduce Duchess Couser's previous conviction for aggravated intimidation of witnesses. Thomas believes that evidence of Duchess' alleged threats to witnesses regarding his case, including threats allegedly made in chambers, was improperly admitted.
The State claims the evidence was relevant. Relevant evidence is statutorily defined as "evidence having any tendency in reason to prove any material fact." K.S.A. 60-401(b). Relevancy is more a matter of logic than law. Evidence is relevant if it renders the desired inference more probable than it would be without the evidence. State v. Faulkner, 220 Kan. 153, Syl. ¶ 6, 551 P.2d 1247 (1976). The State identifies the rule that the admission of evidence rests within the sound discretion of the trial court, subject to exclusionary rules. State v. Carmichael, 240 Kan. 149, 157, 727 P.2d 918 (1986). In State v. Wilson, 108 Kan. 433, 435, 195 P. 618 (1921), we reasoned that "attempts by the accused to conceal or destroy evidence, or to fabricate or procure false evidence, are incriminating circumstances that may be presented to the jury." See State v. Williams, 196 Kan. 628, 633, 413 P.2d 1006 (1966). The evidence of Thomas' threat to Eddie was properly admitted.
*580 The State concludes that, based on Thomas' own threats and on his long-term relationship with and control over Duchess, there was a connection between Thomas and threats made by Duchess. Consequently, the State claims that discretion was not abused in admitting evidence of Duchess' threats. Furthermore, the State contends that when Duchess denied making any such threats, her conviction for aggravated intimidation of a witness was properly admitted to rebut her denials. The State reasons, however, that if error occurred in the admission of either Duchess' threats or her conviction, it was harmless. We agree.
The erroneous admission of evidence in a criminal trial does not require a reversal of conviction in every case, but only where it is of such a nature as to affect the outcome of the trial and deny substantial justice. State v. Walker, 239 Kan. 635, 644, 722 P.2d 556 (1986). We need not decide whether admission of the questioned testimony was error because Thomas has not shown that the admission might have affected the outcome of the trial and denied substantial justice. See Walker, 239 Kan. at 644.
The Identity of A Confidential Informant
Our standard of review on the trial court's failure to disclose the identity of a confidential informant is abuse of discretion. State v. Pink, 236 Kan. 715, Syl. ¶ 2, 696 P.2d 358 (1985).
Thomas insists that the CI had material, exculpatory information for the defense. Thomas believes that the refusal to disclose the CI's identity denied him due process and the right to access exculpatory evidence. Thomas explains that the informer's privilege is codified at K.S.A. 60-436. He emphasizes that the identity of an informant should be revealed if the disclosure is essential to assure a fair determination of the issues. Thomas asserts that the denial of fundamental fairness and due process is "glaring" because the trial court did not allow him to bring the CI into the courtroom to testify about his conversations with Officer Fettke for the purpose of proving the truth of the matter asserted.
The "mere tipster" is an informant whose information precipitates an investigation. In contrast to the tipster, the informant who actually engages in or observes the criminal activity of the defendant is in a position to provide independent evidence relevant *581 to the defense of the case. State v. Washington, 244 Kan. 652, 658, 772 P.2d 768 (1989).
The State contends that the CI was a tipster; consequently, disclosure was not essential to assure a fair trial. According to the State, the CI had no direct knowledge of the events forming the basis of the criminal charges against Thomas.
A CI who is a mere tipster and whose information precipitates an investigation is generally not subject to identity disclosure. Washington, 244 Kan. at 657. We must determine "[w]hether the informant could provide information essential to a fair trial by providing information relevant and helpful to the defense." 244 Kan. at 657.
The trial court heard testimony from Officer Fettke and knew exactly what information the CI had provided the police. The informant was not a participant in or an observer of Thomas' criminal activity. The CI had information that two other people had taken a third party to the area where Richmond was murdered on the date of the crime but at some unknown time. The individual allegedly made some threatening type remarks about a drug dealer. The CI was not a party to this occurrence. The whereabouts of the principal players in this scenario, two women and allegedly Roger, were known to Thomas. The two women denied any such occurrence. The State is correct. The CI in the case at bar lacks direct knowledge regarding the events in question and is a mere tipster.
Speculation and suspicion regarding what an informant might possibly testify to is not sufficient to require disclosure. State v. Pink, 236 Kan. at 722. Thomas has not met his burden to prove the identity of the CI is relevant and material. The trial court did not abuse its discretion. The facts and circumstances were carefully considered at two pretrial hearings on the motion to reveal the identity of the CI.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981076/
|
Affirmed as Modified and Opinion filed January 27, 2015.
In The
Fourteenth Court of Appeals
NO. 14-13-00572-CV
LUC J. MESSIER, Appellant
V.
KATY SHUK CHI LAU MESSIER, Appellee
On Appeal from the 311th District Court
Harris County, Texas
Trial Court Cause No. 2009-45158
OPINION
Luc J. Messier appeals from the trial court’s order purporting to enforce and
clarify portions of the final decree of divorce between Luc and his ex-wife, Katy
Shuk Chi Lau Messier. The issues below and on appeal revolve around
community property stock options held in Luc’s name. A portion of these options
were awarded to Katy in the decree, and the principal dispute concerns whether
Luc was required to exercise the options upon Katy’s demand or, instead, was
entitled or required to use his own discretion in deciding when to execute them.
The trial court determined that the options had to be exercised on Katy’s demand
and issued an order providing for enforcement mechanisms. The trial court further
found that, in failing to exercise the options on Katy’s demand, Luc breached his
fiduciary duty to Katy, and the court awarded Katy attorney’s fees.
In four issues, Luc contends that the trial court erred in (1) construing the
decree as requiring Luc to exercise the options on Katy’s demand, (2) “clarifying”
the decree by adding detailed orders for Luc to perform and consequences for
failure to do so, (3) holding Luc breached his fiduciary duty, and (4) awarding
Katy her attorney’s fees. Because certain claims and issues have become moot
during the pendency of the appeal, we vacate the portions of the trial court’s order
that purport to clarify the divorce decree and that hold Luc breached his fiduciary
duty to Katy, and we dismiss those claims. Additionally, we modify the award of
Katy’s attorney’s fees. We affirm the trial court’s order as modified.
I. Background
The final decree was signed on February 11, 2011. Among other things, the
decree divided the marital estate and determined issues relating to the custody of
the children of the marriage.1 As part of the division of property, Katy was
awarded a 60% interest and Luc a 40% interest in a number of stock options that
Luc had earned through his employment during the marriage as a senior executive
for ConocoPhillips.2 Specifically, as to Luc’s share, the decree awarded him “[t]he
following ConocoPhillips Stock Option Awards, representing 40% of the
1
In a prior appeal from the decree, Katy, a native of Hong Kong, challenged the trial
court’s grant of permanent injunctions concerning international travel with the children. Messier
v. Messier, 389 S.W.3d 904, 905 (Tex. App.—Houston [14th Dist.] 2012, no pet.). This court
modified the decree to remove certain requirements that were not supported by the record, but
otherwise affirmed the travel restrictions and the decree. Id. at 911.
2
The decree confirmed certain other stock options were his separate property.
2
community portions from [Luc’s] employment, subject to all related tax liabilities
and withholdings . . . .” The decree then listed specific numbers of options from
among nine sets of options earned on particular days, for example: “16,320
options of the vested options attributable to the 40,800 options from the 02/08/07
award with an exercise price of $66.37.” In the portion of the decree awarding
property to Katy, it awarded her “[a] portion of the benefits, if any, received by
Luc . . . upon exercise of the following ConocoPhillips Stock Option Awards,
representing 60% of the community portions from [Luc’s] employment, subject to
all related actual tax liabilities and withholdings . . . .” It then listed nine sets of
options corresponding to the nine sets listed for Luc, for example, “24,480 options
of the vested options attributable to the 40,800 options from the 02/08/07 award
with an exercise price of $66.37.”
A subsequent section of the decree contained “Special Provisions Regarding
Stock Options.” This section stated in part:
The award to [Katy] of a portion of the community stock
options is subject to all of the terms, conditions and restrictions of the
Company’s Stock Incentive Plan . . . as well as other restrictions that
may be imposed by the Company, such as those designated in the
Company’s insider trading policy.
Pursuant to the terms of the Plans, the stock options awarded to
[Katy] cannot be assigned and/or transferred from [Luc] to [Katy] by
the Company. The parties acknowledge that (i) the stock options
awarded to [Katy] may be exercisable only by [Luc] (or [Luc’s] legal
representative or estate) and (ii) the exercise of the stock options may
be subject to restrictions by reason of [Luc’s] employment, including
but not limited to the applicable insider trading rules and regulations.
However, [Katy] shall have equitable ownership of the stock options
awarded to [Katy].
[Katy’s] stock options are subject to a constructive trust.
[Katy’s] rights in and to the stock options awarded to [Katy] herein,
and all benefits appurtenant thereto, shall inure to the benefit of
3
[Katy’s] heirs, executors and assigns. Similarly, [Luc’s] obligations
as set forth herein shall be binding on [Luc] and on [Luc’s] heirs,
executors, administrators and assigns. Upon the death of [Luc], any
stock options awarded to [Katy] which are still exercisable shall be
exercised by [Luc’s] executor or administrator, or by the person who
acquires such stock options by will or the laws of descent and
distribution, or otherwise by reason of the death of [Luc], as directed
by [Katy].
[Luc] shall account for taxes assessed on the exercised stock
options and shall cause the proceeds from the stock option exercise,
net of taxes assessed, to be transferred to [Katy]. [Katy] shall pay all
taxes related to any portion of benefits awarded to her herein by either
reporting the income and related withholdings on her return(s), or
reimbursing [Luc] for any taxes he is required to pay on amounts
awarded to her that are in excess of the related withholdings on her
portion.
When [Luc] exercises any option in which [Katy] has an
interest . . . , he will account to her by delivering the net proceeds.
The division of the options will be proportionate between [Luc’s]
separate property and the community property portions henceforth
owned jointly between [Luc] and [Katy], and the division of the
community property portions of the options shall be 60% to [Katy]
and 40% to [Luc].
In April 2012, Katy filed suit in the court of continuing jurisdiction after Luc
declined to exercise the stock options on her demand.3 In her Third Amended
Motion, her live pleading at the time of trial, Katy essentially contended that the
final decree unambiguously established rights and duties that Luc had failed to
follow. On that basis, she sought enforcement of the decree, damages for breach of
fiduciary duty, imposition of a fine among other relief for contempt, an accounting,
and declaratory judgment setting forth Luc’s obligations relating to the options. In
the alternative, she sought clarification of the decree.
3
Between the time the final decree issued and Katy filed the present action, the presiding
judge of the trial court retired and a new judge was appointed.
4
During a hearing on December 19, 2012, Luc testified that he believed that
under the final decree, he had a duty as the constructive trustee to use his discretion
in deciding when to exercise the options so as to maximize the benefit for Katy.
Luc introduced evidence that the options had increased significantly in value from
the time of Katy’s demand to the time of trial. Luc acknowledged, however, that at
least a part of his motivation in refusing to exercise the options upon Katy’s
demand was to prevent Katy from leaving the country with the children in
violation of travel restrictions placed upon her in the final decree. Katy presented a
financial expert who emphasized the significant differences between the financial
situations of Luc and Katy and suggested Katy had a more immediate need for
access to the options proceeds than did Luc.
The court signed an Order of Enforcement of Final Decree of Divorce and
Order of Clarification of Property Division on March 25, 2013. In the order, the
court held that Luc breached his fiduciary duty as constructive trustee of Katy’s
stock options by failing to exercise the options on her request. The order also
included declarations or clarifications requiring Luc to exercise within 24 hours the
options that Katy already had requested be exercised and imposing a fine of $5,000
a day for each business day that he failed to do so.4 The court further ordered Luc
to exercise any options requested by Katy no later than 10 a.m. on the first day
following the expiration of 48 hours from the receipt of written notice to exercise
the options. The order additionally included provisions governing the possibility
that requests may come during periods when Luc was prohibited from exercising
the options and provisions ensuring distribution of the proceeds to Katy.
In its order, the court further awarded Katy her “reasonable and necessary”
4
The section of the order in which the instructions appear is titled “Declaratory Judgment
& Clarification.”
5
attorney’s fees and costs of $59,198.75, plus additional amounts in the event Luc
filed an appeal.5 The court stated that the fees were “warranted for numerous
reasons including the delay caused by [Luc’s] refusal to exercise [options] upon
[Katy’s] request.” The court also stated that Luc had stipulated to the amount and
reasonableness of the fees. The court subsequently issued a set of 134 separately
numbered findings of fact and conclusions of law. Luc requested additional
findings. Among the findings, the court stated that Luc “did not have unlimited
discretion as to whether to exercise the stock options awarded to Katy” and he
breached his fiduciary duty and failed to comply with the decree when he refused
to exercise options as Katy requested. During oral argument before this court,
counsel representing both parties informed the court that Luc has exercised all of
the stock options that were the subject of this action and delivered the proceeds to
Katy.
II. The Mootness Doctrine
As stated, counsel for both parties have represented to this court that Luc
has, in fact, exercised all of the options assigned to Katy in the decree and
delivered the proceeds to her as per her request. In post-submission briefing,
Katy’s counsel has indicated acceptance of Luc’s performance and no intention to
pursue any further enforcement, claims, or remedies concerning the exercise of the
options and distribution of the proceeds. We cannot decide moot issues. See, e.g.,
Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000) (per curiam)
(holding appeal of trial court’s order became moot once appellant complied with
order and court of appeals was notified of compliance and court of appeals erred in
5
As will be discussed below, the order required the appellate fees to be paid the day after
a notice of appeal was filed for an appeal to the court of appeals and the day after the Texas
Supreme Court requested briefing if a petition for review was filed with that court. The appellate
fees were not made contingent on a successful defense by Katy. The amount for an appeal to the
court of appeals was set at $25,000, and the amount for a petition for review was set at $15,000.
6
issuing advisory opinion on merits of appeal).6 The question then becomes which,
if any, of Luc’s appellate issues still present live controversies requiring resolution
by this court. See Robinson v. Alief I.S.D., 298 S.W.3d 321, 324 (Tex. App.—
Houston [14th Dist.] 2009, pet. denied) (“The mootness doctrine precludes a court
from rendering an advisory opinion in a case where there is no live controversy.”);
Thompson v. Ricardo, 269 S.W.3d 100, 103 (Tex. App.—Houston [14th Dist.]
2008, no pet.) (“[I]f a judgment cannot have a practical effect on an existing
controversy, the case is moot and any opinion issued on the merits in the appeal
would constitute an impermissible advisory opinion.”).
As set forth above, Luc raises four issues in this appeal, contending the trial
court erred in (1) construing the decree as requiring Luc exercise the options on
Katy’s demand, (2) “clarifying” the decree by adding detailed orders for Luc to
perform as directed and consequences should he fail to do so, (3) holding Luc
breached his fiduciary duty, and (4) awarding Katy attorney’s fees. The attorney’s
fees issue clearly still presents a live controversy as Katy has not relinquished her
claim to the award and Luc has not conceded that he should have to pay the fees.
See Allstate Ins. Co. v. Hallman, 159 S.W.3d 640, 642-43 (Tex. 2005) (holding
that a dispute concerning attorney’s fees preserved a live controversy in an
otherwise moot appeal); Camarena v. Tex. Emp’t Comm’n, 754 S.W.2d 149, 150-
51 (Tex. 1988) (same). Similarly, the question of who possessed the right to
decide when the options would be exercised is likewise a live controversy because
in exercising the options and distributing the proceeds to Katy, Luc did not
concede that she had the right to demand he take these actions and, if Luc is correct
that he had the right to determine when to exercise the options, there would be no
6
Mootness is a jurisdictional issue, and we are required to review such issues even if not
raised by the parties. See M.O. Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004); Robinson
v. Alief I.S.D., 298 S.W.3d 321, 330 (Tex. App.—Houston [14th Dist.] 2009, pet. denied).
7
basis for awarding attorney’s fees to Katy. See Camarena, 754 S.W.2d at 151
(noting propriety of attorney’s fees award was in part dependent on success on the
merits). These two issues are, therefore, not moot and still need to be resolved in
this appeal.
However, because the trial court’s “clarifications” no longer have any
possible force or effect, given that the options have been exercised and proceeds
distributed to Katy’s satisfaction, the clarifications and the appellate issue
challenging them have been rendered moot. Likewise, because the only remedy
clearly provided based on the breach of fiduciary duty finding was the
clarifications, and they have no possible force or effect, the breach of fiduciary
duty issue is also rendered moot. Accordingly, we vacate the portions of the trial
court’s judgment that purport to clarify the divorce decree and that hold Luc
breached his fiduciary duty to Katy, and we dismiss Katy’s causes of action
seeking clarification and alleging breach of fiduciary duty. See Houston Mun.
Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 153-54, 156-57 (Tex. 2007)
(vacating portions of court of appeals’ judgment and trial court’s order that became
moot after plaintiff nonsuited cause of action and dismissing that cause of action);
Daftary v. Prestonwood Mkt. Square, Ltd., 399 S.W.3d 708, 710 (Tex. App.—
Dallas 2013, pet. denied) (vacating portion of judgment awarding possession of
property and dismissing moot claim); Lawton v. Lawton, No. 01–12–00932–CV,
2014 WL 3408699, at *1, 5 (Tex. App.—Houston [1st Dist.] July 10, 2014, no
pet.) (mem. op.) (vacating portion of order granting summary judgment on moot
claims and dismissing those claims); McConnell v. State Farm Lloyds, No. 03-98-
00078-CV, 1999 WL 816736, at *5 (Tex. App.—Austin Oct. 14, 1999, pet.
denied) (not designated for publication) (vacating judgment on claim rendered
8
moot by change in the law and dismissing that claim).7
We will now proceed to consider the remaining live issues concerning the
trial court’s construction of the decree and award of attorney’s fees. See In re
Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005) (orig. proceeding)
(“A case is not rendered moot simply because some of the issues become moot
during the appellate process.”).
III. Construction of the Decree
In his first issue, Luc contends that the trial court erred in interpreting the
decree as requiring him to exercise the options on Katy’s demand. To the contrary,
Luc asserts that the decree afforded him the discretion to decide when to exercise
the options. As explained above, this issue still presents a live controversy as it
7
Luc asserts that issues two and three, concerning, respectively, the clarifications and
breach of fiduciary duty finding, also are relevant to the question of whether the trial court
properly awarded attorney’s fees to Katy. As will be discussed more fully below, because we
find the award of attorney’s fees is supported by the trial court’s determination that Katy had the
right to decide when the options would be exercised, we need not consider whether the award
was additionally supported by the clarifications or the breach of fiduciary duty finding. We
further note that attorney’s fees are generally not recoverable for breaches of fiduciary duties.
See Hollister v. Maloney, Martin & Mitchell LLP, No. 14–12–00529–CV, 2013 WL 2149823, at
*2 (Tex. App.—Houston [14th Dist.] May 16, 2013, no pet.) (mem. op.). Issues two and three
are therefore moot.
In post-submission briefing, Luc urges application of the collateral consequences
exception to the mootness doctrine. “The ‘collateral consequences’ exception has been applied
when Texas courts have recognized that prejudicial events have occurred ‘whose effects
continued to stigmatize helpless or hated individuals long after the unconstitutional judgment had
ceased to operate. Such effects were not absolved by mere dismissal of the cause as moot.’”
Gen. Land Office v. OXY U.S.A., Inc., 789 S.W.2d 569, 571 (Tex. 1990) (quoting Spring Branch
I.S.D. v. Reynolds, 764 S.W.2d 16, 19 (Tex. App.—Houston [1st Dist.] 1988, no writ)). Luc’s
arguments appear premised on the notion that the mootness of these issues would leave the trial
court’s order unchanged, including the finding of a breach of fiduciary duty. He makes no
argument that any disadvantage he perceives from the court’s order would persist even once the
portion of the order he complains about has been vacated. We find no merit in his argument.
See Reule v. RLZ Invs., 411 S.W.3d 31, 33 (Tex. App.—Houston [14th Dist.] 2013, no pet.)
(declining to apply collateral consequences exception where appellant failed to explain why
perceived disadvantage would persist after judgment was vacated).
9
pertains to the question of whether Katy is entitled to her attorney’s fees.
A trial court’s ruling on a motion for enforcement is reviewed under an
abuse of discretion standard; however, issues regarding interpretation of a divorce
decree are subject to de novo review on appeal. Shanks v. Treadway, 110 S.W.3d
444, 447 (Tex. 2003). The general rules regarding the construction of judgments
are applied. Id. “If the decree, when read as a whole, is unambiguous as to the
property’s disposition, the court must effectuate the order in light of the literal
language used.” Id. We agree with the trial court that the decree unambiguously
afforded Katy the right to determine when her portion of the options should be
exercised.
Luc’s primary argument is a negative one: at no point in the decree does it
expressly require him to exercise the options on Katy’s demand. The decree,
however, also is devoid of any express language authorizing or requiring Luc to
use his own discretion regarding when to exercise the options. Moreover, the
decree clearly awards certain of the options to Katy as her property and gives her
control over that property.
Luc acknowledged in his testimony that Katy’s options could be exercised
separately from his own options, even those awarded on the same day. 8 Indeed,
the decree culls out a specific number of options for Katy for each date on which
options were awarded to Luc. As explained in the decree, the ConocoPhillips
Stock Incentive Plan prevented transfer of ownership of the options themselves;
Katy could receive the proceeds only upon exercise. For this reason, the decree
awarded her “[a] portion of the benefits, if any, received by Luc . . . upon exercise
8
Luc suggests in his brief that “Katy can be assured that Luc’s decision to exercise
options will be made with the utmost consideration for time and price as he will be acting, in
part, for his own financial benefit, having been awarded 40% of the divisible options, with others
confirmed as his separate property.” But nothing in the record supports this assurance.
10
of the following . . . Awards,” and it described her ownership of the options as
“equitable ownership” and established a constructive trust over the options prior to
their exercise. Equitable ownership is commonly defined as “the present right to
compel legal title.” See, e.g., AHF-Arbors at Huntsville I, LLC v. Walker Cnty.
Appraisal Dist., 410 S.W.3d 831, 837 (Tex. 2012). The court, by awarding
equitable ownership, therefore intended to give Katy the right to direct when the
options would be exercised.9 The decree repeatedly describes the award to Katy as
“[t]he award to [Katy] of a portion of the community stock options” and “the stock
options awarded to [Katy].” It is clear that this was Katy’s property.
Luc insists that the creation of a constructive trust necessarily provided him
with the authority and discretion to determine when the options awarded to Katy
were to be exercised, but in doing so, he appears to misunderstand the nature of a
constructive trust.10 A constructive trust is imposed when one party holds property
that legally belongs to the other. See In re Marriage of Harrison, 310 S.W.3d 209,
214 (Tex. App.—Amarillo 2010, pet. denied) (“[C]onstructive trusts are used to
right a wrong or prevent unjust enrichment . . . .”). The scope and application of a
constructive trust is generally left up to the court imposing it. Baker Botts, L.L.P.
v. Cailloux, 224 S.W.3d 723, 736 (Tex. App.—San Antonio 2007, pet. denied).
There is no indication in the court’s creation of a constructive trust or the language
of the decree that gave Luc discretion to determine when to exercise the options.
9
Luc suggests that the fact Katy could not own the options as per the Stock Incentive
Plan means that the reference to her equitable ownership was a “contradiction in terms.” But it is
the very fact that she cannot legally own the options that apparently led the court to describe her
ownership as equitable. Moreover, the fact that she could not legally own them does not
necessarily mean she cannot control their exercise.
10
In his reply brief, Luc states without supporting citation that “imposition of a
constructive trust . . . vests in Luc the right to exercise the [options] at his discretion in Katy’s
best interest.” At trial and in his briefing, Luc emphasized that he has significant expertise
regarding his employer and the market value of its stock, and he asserts that the decree required
him to use his discretion in exercising the options in order to maximize the benefit to Katy.
11
Luc additionally points to language in the decree providing that “[w]hen [he]
exercises any option in which [Katy] has an interest . . . , he will account to her by
delivering the net proceeds” as indicating he was to exercise his discretion in
determining when to exercise her options. This language, however, merely
reiterates the fact that only Luc could legally perform the mechanical process of
exercising the options and describes what must happen once he performs that
function. It does not suggest that he had the right to determine when the options
were exercised.
Next, Luc points to decree language providing that Katy had a right to direct
the exercise of any remaining options upon Luc’s death. Luc relies on this
language to argue that, in parallel fashion, the decree would have expressly
authorized Katy to direct the exercise of any remaining options during Luc’s
lifetime if the trial court had intended to create such a right. However, as discussed
above, the decree clearly gave Katy the right to exercise her options during Luc’s
lifetime. The additional language regarding who had control of the options in the
event of Luc’s death may have been included simply to prevent any confusion
should Luc die before the options were exercised.
The trial court did not err in holding that the decree unambiguously gave
Katy the right to determine when the options assigned to her would be exercised.
Accordingly, we overrule Luc’s first issue.
IV. Attorney’s Fees & Expenses
In his fourth issue, Luc challenges the trial court’s award of $59,198.75 in
attorney’s fees, costs, and expenses. We review a trial court’s decision to grant
attorney’s fees under an abuse of discretion standard, but we review the amount of
attorney’s fees awarded under a legal sufficiency standard. Am. Risk Ins. Co. v.
Abousway, No. 14–13–00124–CV, 2014 WL 2767402, at *5 (Tex. App.—Houston
12
[14th Dist.] June 17, 2014, no pet.) (mem. op.).
Luc raises numerous sub-issues related to this award, and we have grouped
them into the following categories for discussion purposes: (1) the award was in
error because Katy did not succeed on her contempt claim, (2) the evidence is
legally insufficient to support the award, (3) there is no legal or factual basis for
the award of expert fees, (4) Katy failed to properly segregate fees for causes of
action on which fees are recoverable from those for which they are not, and (5) the
award of appellate fees was in error for multiple reasons. We will address each set
of arguments in turn, finding merit in some but not all.
A. Contempt Claim
We begin with Luc’s assertion that Katy was not entitled to recover
attorney’s fees because the trial court did not hold Luc in contempt. The gist of the
argument appears to be that (1) the trial court did not hold Luc in contempt; (2)
therefore, it must have granted Katy judgment based on her breach of fiduciary
duty cause of action; and (3) attorney’s fees generally cannot be recovered on a
claim for breach of fiduciary duty. See Hollister v. Maloney, Martin & Mitchell
LLP, No. 14–12–00529–CV, 2013 WL 2149823, at *2 (Tex. App.—Houston [14th
Dist.] May 16, 2013, no pet.) (mem. op.).
Katy pleaded generally for attorney’s fees and pleaded several grounds that
could potentially support an award of attorney’s fees, including a declaratory
judgment action and enforcement and clarification of the decree. In making the
award, the court did not state the basis for its decision but stated that “[t]he award
of attorneys’ fees to [Katy] is warranted for numerous reason[s] including the
delay caused by [Luc’s] refusal to exercise upon [Katy’s] request, options
equitably owned by [Katy].” This language links the award to the necessity of
filing the enforcement action. A trial court may award reasonable attorney’s fees
13
in an enforcement or clarification action. See Tex. Fam. Code § 9.014; McKnight
v. Trogdon-McKnight, 132 S.W.3d 126, 132 (Tex. App.—Houston [14th Dist.]
2004, no pet.). Although the trial court did not provide Katy with all of the relief
she requested related to the enforcement action (i.e., the trial court did not hold Luc
in criminal contempt), it did order Luc to exercise the options as Katy had
previously directed and turn the proceeds over to her. Contempt is not the only
available remedy in a suit to enforce a divorce decree. See generally Tex. Fam.
Code §§ 9.001-.014. Because Katy was required to file suit in order to enforce her
right to determine when the stock options were to be exercised, the trial court did
not abuse its discretion in awarding attorney’s fees to Katy. See Tex. Fam. Code §
9.014; Pahlavan v. Ghods, No. 14-02-00585-CV, 2003 WL 21981819, at *1-2
(Tex. App.—Houston [14th Dist.] Aug. 21, 2003, no pet.) (mem. op.).11
Regardless of whether the trial court held Luc in criminal contempt, Katy
nonetheless was required to pursue the lawsuit after Luc refused to exercise the
options upon her demand and deliver the proceeds to her.12
11
See also John J. Sampson & Harry L. Tindall, et. al, Sampson & Tindall’s Texas
Family Code Annotated 140 (2014) (“Before passage of [section 9.014] there was no provision
for the recovery of attorney’s fees against an uncooperative party after a divorce. Thwarting the
order of the court elicited no punitive consequences, even when a party was found to be the
wrongdoer. This section now makes clear that the award of attorney’s fees is appropriate in such
a fact situation.”).
12
At least one court of appeals has observed that Section 9.014 does not expressly require
that the trial court find a party as the prevailing party before awarding attorney’s fees to that
party. See In re S.E.C., No. 05–08–00781–CV, 2009 WL 3353624, at *3 (Tex. App.—Dallas
Oct. 20, 2009, no pet.) (mem. op.). “Rather, by its express language, the statute’s only
requirements are that the award be ‘reasonable’ and in connection with a proceeding to enforce a
decree of divorce or annulment providing for a division of property.” Id.
Luc cites one case in support of his argument, Preston v. Preston, No. 04-03-00333-CV,
2004 WL 1835765 (Tex. App.—Houston [14th Dist.] Aug. 18, 2004, no pet.) (mem. op.). In
Preston, we determined that the four-year statute of limitations governing breach of fiduciary
duty causes of action applied where a constructive trust had been created rather than the two-year
statute which generally governs suits to enforce the property. Id. at *2. We addressed the breach
of fiduciary duty cause of action, however, as an action “to enforce the divorce decree.” Section
14
B. Sufficiency of the Evidence
Luc next challenges the sufficiency of the evidence to support the
reasonableness of the attorney’s fees awarded. We will reverse a determination of
the reasonableness of attorney’s fees on the basis of a legal sufficiency challenge
only if there is no evidence to support it. See Redwine v. Wright, No. 14–10–
00030–CV, 2010 WL 5238572, at *2 (Tex. App.—Houston [14th Dist.] Dec. 16,
2010, no pet.) (mem. op.). Factors that a factfinder should consider when
determining the reasonableness of a fee include: the time, labor and skill required
to properly perform the legal service; the novelty and difficulty of the questions
involved; the customary fees charged in the local legal community for similar legal
services; the amount involved and the results obtained; the nature and length of the
professional relationship with the client; and the experience, reputation and ability
of the lawyer performing the services. Arthur Andersen & Co. v. Perry Equip.
Corp., 945 S.W.2d 812, 818 (Tex. 1997). The trial court does not need to hear
evidence on each factor but can consider the entire record, the evidence presented
on reasonableness, the amount in controversy, the common knowledge of the
participants as lawyers and judges, and the relative success of the parties. In re
Marriage of C.A.S. & D.P.S., 405 S.W.3d 373, 387 (Tex. App.—Dallas 2013, no
pet.); Hagedorn v. Tisdale, 73 S.W.3d 341, 353 (Tex. App.—Amarillo 2002, no
pet.).
Luc begins by assailing the trial court’s statement in its order and in its
findings of fact and conclusions of law that Luc had stipulated to the
reasonableness of Katy’s fees. The supposed stipulation occurred when, toward
the end of the trial, Katy’s counsel began his testimony in support of fees:
9.014 authorizes trial courts to award reasonable attorney’s fees in a proceeding to enforce a
decree. Nothing in Preston restricts this authority.
15
[Luc’s counsel]: Your Honor, I will stipulate that if he testifies, he
will testify that the amount that he’s claimed here [apparently
indicating Exhibit M150, which was a billing statement] is his fees in
connection with this matter.
[Katy’s counsel]: That’s correct. And my fees, [expert] fees, which
have been paid through my firm. My fees, [expert] fees through my
firm and [co-counsel’s] fees. So if I understand the stipulation, he’s
stipulating not that they be paid, but that the rates and amounts
charged are reasonable and necessary.
[Luc’s counsel]: I stipulate that’s what you’re going to testify to.
[Katy’s counsel]: All right. Well, do you stipulate to my qualifications
and rate?
[Luc’s counsel]: Yes.
[Katy’s counsel]: All right. And [co-counsel’s]?
[Luc’s counsel]: All your experts, yes.
[Katy’s counsel]: Very good. I would offer Exhibit M150, fees that
were incurred solely for this enforcement.
....
[Luc’s counsel]: May I see it? Your honor, we have no objection to
this as the testimony he would give. We do object to paying fees.
Although it is not entirely clear exactly how broad the stipulation was
intended to be, at a minimum, Luc’s counsel stipulated to Katy’s counsel’s
qualifications and rate and that Katy’s counsel’s would testify that “the rates and
amounts charged [were] reasonable and necessary.” At the conclusion of this
exchange, the trial court admitted the detailed billing statement, and Katy’s counsel
further testified that “all of the actions on the [statement] were taken and all of the
fees were reasonable and necessary in and around Harris County for similarly
complex cases for similarly qualified lawyers.” Luc’s counsel did not ask any
questions or present any opposing evidence regarding fees. In addition to its
statement regarding the stipulation, the court further specifically found that the
attorney’s fees awarded were reasonable given the experience and expertise of
16
counsel and the circumstances presented in the case.
On appeal, Luc contends that the stipulation regarding what Katy’s counsel
would testify to was insufficient to support the award of fees because it was only
an admission regarding what counsel would say and not an agreement the fees
were reasonable and necessary. While this much is true, having stipulated to
Katy’s counsel’s qualifications and that he would provide testimony supporting the
reasonableness of his fees (without the necessity of actually having to provide such
testimony), and having failed to contest the evidence of fees, Luc’s counsel
essentially conceded that there was at least some evidence to support the
reasonableness of the fees. At the time, Luc’s counsel expressed concern only
about whether Luc would be required to pay the fees, not about the reasonableness
of the fees charged. Moreover, Katy’s counsel then went on to testify as to the
reasonableness of the fees and provide a detailed billing statement and a contract
showing services provided, time spent, and amount charged. The trial court was
entitled to and—according to its findings and conclusions—did consider the entire
record, the particular circumstances of the case, and the common knowledge of the
participants as lawyers and judges. See In re Marriage of C.A.S. & D.P.S., 405
S.W.3d at 387; Hagedorn, 73 S.W.3d at 353. The evidence is sufficient to support
the trial court’s award of attorney’s fees.13
C. Expert Fees
Luc further challenges the award of expert fees in the amount of $27,090.76
13
Luc specifically mentions that the billing statements contained a few entries for an
associate attorney and a paralegal. The evidence was sufficient to support these fees as well. As
discussed, Luc’s counsel stipulated that Katy’s counsel was qualified and would testify regarding
the reasonableness of the charged fees. Katy’s counsel also testified in support of the
reasonableness and necessity of the amounts contained within the billing statement. The charged
rates were listed in the attorney-client contract that was admitted into evidence, and the trial
judge was permitted to take her own knowledge into account regarding the case and the practice
of law.
17
on the grounds that there is no legal or factual basis for the award.14 Generally
speaking, the fee of an expert witness constitutes an incidental expense in
preparation for trial and is not recoverable as costs. In re Weisinger, No. 14-12-
00558-CV, 2012 WL 3861960, at *2-3 (Tex. App.—Houston [14th Dist.] Sept. 6,
2012, orig. proceeding) (mem. op.); see also Stanley Stores, Inc. v. Chavana, 909
S.W.2d 554, 563 (Tex. App.—Corpus Christi 1995, writ denied) (holding the trial
court erred in making an equitable award of expert witness fees absent statutory
authorization). As we explained in Weisinger, expert fees have been awarded
under certain provisions of the Family Code, such as chapters 6 (governing suits
for dissolution of marriage) and 106 (concerning suits affecting the parent-child
relationship). Each of the cited chapters, however, contains provisions permitting
courts to award expenses in addition to costs and attorney’s fees. See Tex. Fam.
Code §§ 6.708 (authorizing court to award attorney’s fees, costs, and expenses in a
divorce action), 106.001 (authorizing award of costs in SAPCR), 106.002
(authorizing award of attorney’s fees in SAPCR). In contrast, chapter 9,
subchapter A, governing enforcement actions such as this, only authorizes the
award of attorney’s fees and costs. Id. §§ 9.013 (authorizing award of costs in an
enforcement action), 9.014 (authorizing award of attorney’s fees in an enforcement
action). Indeed, section 9.013 expressly states that costs may be awarded in such
actions “as in other civil cases.” Because expert fees are neither attorney’s fees nor
costs, and because chapter 9, subchapter A does not allow an award of expenses in
an enforcement action, the trial court erred in awarding Katy her expert witness
fees.15 Accordingly, we modify the trial court’s judgment to decrease the award of
14
The expert fees were included as a line item in the billing statement by Katy’s attorney
that was admitted into evidence. In her briefing to this court, Katy does not offer any rebuttal to
Luc’s arguments concerning expert fees.
15
In dicta in In re Slanker, 365 S.W.3d 718, 720 (Tex. App.—Texarkana 2012, orig.
proceeding), the Sixth Court of Appeals interpreted dicta in another court of appeals’ opinion,
18
fees and costs by $27,090.76.
D. Segregation
Next, Luc argues that Katy failed to properly segregate the fees expended in
regards to causes of action on which attorney’s fees are recoverable, such as the
enforcement action, from those expended on causes of action for which fees are
generally not recoverable, such as breach of fiduciary duty. Absent a contract or
statute, trial courts do not have inherent authority to require one party to pay
another party’s attorney’s fees; thus, claimants generally are required to segregate
fees between claims for which they are recoverable and claims for which they are
not. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex. 2006).
However, when discrete legal services advance both a recoverable and
unrecoverable claim, the resulting fees are considered “intertwined” and need not
be segregated in order to be recovered. Id. at 313-14; Alief I.S.D. v. Perry, 440
S.W.3d 228, 245 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). Still, if any
attorney’s fees relate solely to a claim for which fees are unrecoverable, a claimant
must segregate the recoverable from the unrecoverable fees. Chapa, 212 S.W.3d
at 313; Perry, 440 S.W.3d at 246.
The party seeking to recover attorney’s fees has the burden of demonstrating
that fee segregation is not required. Westergren v. Nat’l Prop. Holdings, L.P., 409
S.W.3d 110, 138 (Tex. App.—Houston [14th Dist.] 2013), aff’d in part, rev’d in
part on other grounds, No. 13-0801, 2015 WL 123099 (Tex. 2015). Here, when
the trial court rejected Luc’s segregation argument, the court had before it the
Parliament v. Parliament, 860 S.W.2d 144, 147 (Tex. App.—San Antonio 1993, writ denied), as
recognizing that expert witness fees were authorized in enforcement actions. We do not agree
with this reading of the Parliament analysis, wherein the court was merely presenting and
rejecting a party’s argument. Regardless, as dicta from a sister court, the discussion in In re
Slanker is not precedential. See generally Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d
303, 330 n.22 (Tex. App.—Houston [14th Dist.] 2003, pet denied).
19
parties’ pleadings, the evidence presented on the substantive issues in the case, the
testimony of Katy’s counsel, and Katy’s counsel’s billing statements. All of
Katy’s causes of action involved essentially the same allegations regarding the
same facts and sought essentially the same ultimate relief: exercise of the options
as she directs and disbursement of the proceeds to her. Even if segregation were
required in this case, Katy’s counsel testified that the billing statements admitted
into evidence represented “fees that were incurred solely for this enforcement.”
Luc’s counsel did not object, cross-examine Katy’s counsel regarding this
statement, or present any evidence contradicting this representation. For the
foregoing reasons, Luc’s segregation arguments are without merit.
E. Appellate Fees
Lastly, Luc raises several complaints regarding the trial court’s award of
appellate fees to Katy. The court awarded Katy $25,000 in the event of an appeal
to an intermediate court of appeals and $15,000 in the event a petition for review
was filed with the Texas Supreme Court. Luc specifically complains that the
award was not supported by sufficient evidence, was not conditioned on Katy’s
success on appeal, and was ordered to be paid the day after appeal was perfected,
and that Katy was awarded post-judgment interest accruing on the amount of
appellate fees from the date of the trial court’s order.
(i) Sufficiency of the Evidence
We generally review a trial court’s award of appellate attorney’s fees for an
abuse of discretion. See, e.g., Law Offices of Windle Turley, P.C. v. French, 164
S.W.3d 487, 493 (Tex. App.—Dallas 2005, no pet.). To be proper, there must be
evidence of the fees’ reasonableness pertaining to appellate work. State and
County Mut. Fire Ins. Co. ex rel. S. United Gen. Agency of Tex. v. Walker, 228
S.W.3d 404, 410 (Tex. App.—Fort Worth 2007, no pet.). Luc acknowledges that
20
at trial, Katy’s lead counsel testified that if the case were appealed, the amounts
awarded by the court were reasonable for attorneys with similar experience to
himself and his co-counsel. Luc asserts, however, that this statement was too
conclusory and unsupported by other evidence. The statement, however, was not
made in a vacuum. As discussed above, Luc’s counsel stipulated to the
qualifications and rate charged by Katy’s counsel, billing statements were admitted
into evidence showing the work done on trial of the case, and the judge herself
would have been familiar with the complexity of the case, the size of the record,
and potential issues on appeal. This evidence was sufficient to support the trial
court’s award of appellate attorney’s fees.
(ii.) Unconditional Award
Next, Luc complains that the award of appellate fees was not conditioned on
Katy’s success in the appeal. A trial court may not grant a party an unconditional
award of appellate attorney’s fees because to do so could penalize a party for
taking a meritorious appeal. In re Ford Motor Co., 988 S.W.2d 714, 721 (Tex.
1998); Watts v. Oliver, 396 S.W.3d 124, 135 n.3 (Tex. App.—Houston [14th Dist.]
2013, no pet.). However, an unconditional award of attorney’s fees for appeal does
not require reversal; instead, we may modify a trial court’s judgment to make the
award of appellate attorney’s fees contingent upon the receiving party’s success on
appeal. Keith v. Keith, 221 S.W.3d 156, 171 (Tex. App.—Houston [1st Dist.]
2006, no pet.). Accordingly, we will modify the trial court’s award of appellate
fees in the present case to make it contingent on Katy’s success on appeal.
(iii.) Date Due and Accrual of Interest
Lastly, Luc complains that the trial court ordered him to pay Katy’s
appellate fees within a day after she perfected her appeal in an intermediate
appellate court or sought review in the Texas Supreme Court and provided that
21
post-judgment interest would begin to accrue on the amount awarded for appellate
fees as of the date the trial court entered its judgment. We have previously
explained that, because an award of appellate fees depends on the outcome of the
appeal, it is not a final award until the appeal is concluded and the appellate court
issues its judgment; thus, the fees would not be due and interest on those fees
should not begin to accrue until the appellate court issues its judgment. See Watts,
396 S.W.3d at 134-35 (citing Apache Corp. v. Dynegy Midstream Servs., Ltd.
P’ship, 214 S.W.3d 554, 566–67 (Tex. App.—Houston [14th Dist.] 2006), rev’d in
part on other grounds, 294 S.W.3d 164 (Tex. 2009), and Protechnics Int’l, Inc. v.
Tru–Tag Sys., Inc., 843 S.W.2d 734, 736 (Tex. App.—Houston [14th Dist.] 1992,
no writ)). Accordingly, we further modify the trial court’s judgment to clarify that
payment of the fees is not due and interest on the fees does not begin until the
appellate court issues its judgment. See id.
V. Conclusion
We vacate the portions of the trial court’s order that purport to clarify the
divorce decree and that hold Luc breached his fiduciary duty to Katy, and we
dismiss those causes of action. Additionally, we modify the amount awarded as
attorney’s fees and costs by subtracting $27,090.76 from the amount awarded. We
further modify the trial court’s award of appellate fees to make such fees
contingent on Katy’s success on appeal and to clarify that payment of the fees is
not due and interest on the fees does not begin to accrue until the appellate court
issues its judgment. We affirm the remainder of the trial court’s order.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Boyce, Jamison, and Donovan.
22
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1873848/
|
752 N.W.2d 453 (2008)
STATE
v.
ANDERSON.
No. 07-1010.
Court of Appeals of Iowa.
May 14, 2008.
Decision without published opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981664/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0111n.06
No. 12-1281
FILED
UNITED STATES COURT OF APPEALS Jan 30, 2013
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
SPENCER WILLIAMS, )
)
Petitioner-Appellee, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR
HUGH WOLFENBARGER, Warden, ) THE WESTERN DISTRICT OF
) MICHIGAN
Respondent-Appellant. )
)
OPINION
Before: SILER and COOK, Circuit Judges; STEEH, District Judge*
STEEH, District Judge. Spencer Williams pleaded guilty to second-degree murder after his
involvement in an armed robbery resulting in the death of Daniel Garcia. Williams was sentenced
to life in prison by the State of Michigan. He subsequently filed a writ of habeas corpus, contending
that his guilty plea was involuntary and thus unconstitutional. The district court agreed and granted
him a conditional writ of habeas corpus. For the following reasons, we reverse.
I.
*
The Honorable George C. Steeh, United States District Judge for the Eastern District of
Michigan, sitting by designation.
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
On December 8, 2007, Williams and an accomplice, Davell Johnson, planned a robbery to
steal marijuana from Mr. Garcia. During the robbery, Johnson shot and killed Mr. Garcia. Williams
was subsequently charged with first degree felony murder, armed robbery, and being a habitual felon.
On March 3, 2009, Williams’s counsel indicated that Williams intended to enter a plea of guilty to
second-degree murder. Echoing the State’s offer, the trial court stated that Williams could plead
guilty to second-degree murder or go to trial for first-degree felony murder. Williams responded,
“second-degree murder? No, Sir. I don’t understand how it can become second-degree murder.”
The prosecutor then put the offer on the record and explained to Williams that “if you enter a plea
to murder second, then we would drop the felony murder and you would have no chance of life
without parole, that’s gone, and we’d drop the armed robbery and we’d drop the [habitual felon
charge].” Williams proceeded to plead guilty to second-degree murder.
At sentencing on March 25, 2009, Williams moved to withdraw his guilty plea. He stated
to the court that when he entered his plea, “I was just sayin’ ‘Yes, yes,’ but basically, sir, I swear to
you, I didn’t understand a word you were sayin’.” The court indicated to Williams that “[t]he Court
made sure you understood what the prosecution’s offer was. You agreed to plead guilty to second-
degree murder. You were put under oath. You gave testimony that established the factual basis for
second-degree murder . . .” The court found that Williams’s “plea was voluntarily made,
understanding, knowing, willing, and there would be substantial prejudice to the prosecution if [it]
let [him] withdraw [the] plea.” The court then denied his motion to withdraw his plea.
-2-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
Williams appealed to the Michigan Court of Appeals, arguing that his plea was not knowing
and voluntary. Williams argued that his allegedly involuntary plea violated “state and federal
constitutional due process guarantees.” The Michigan Court of Appeals denied Williams’s appeal
for lack of merit. Williams then submitted an application for leave to appeal to the Michigan
Supreme Court. The Michigan Supreme Court also denied Williams’s application.
Williams petitioned the district court for a writ of habeas corpus, again asserting that his plea
was not knowing and voluntary. Williams attached to the petition the brief he submitted to the
Michigan Court of Appeals and the Michigan Supreme Court. The Magistrate Judge issued a Report
and Recommendation that the district court grant Williams his requested relief. The Magistrate
Judge concluded that Williams’s plea of guilty was not voluntarily, knowingly, and intelligently
made because Williams did not understand the nature and elements of second-degree murder. Thus,
the trial court’s decision that the plea was knowing, intelligent and voluntary involved an
unreasonable application of clearly established federal law. The district court adopted the Magistrate
Judge’s Report and Recommendation and granted Williams a conditional writ of habeas corpus.
The State timely appealed.
II.
Before addressing the merits of the claim on appeal, we must first decide whether Williams’s
due process claim was exhausted in the state courts. Wagner v. Smith, 581 F.3d 410, 415 (6th Cir.
2009) (explaining that exhaustion of state remedies is a threshold barrier to reaching the merits of
-3-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
a claim). The respondent argues that the claim upon which habeas relief was granted was
unexhausted because Williams never argued in the state courts that he did not understand the nature
or elements of second-degree murder. The respondent contends that Williams’s argument in the
state court of appeals and Michigan Supreme Court focused solely on the sentencing consequences
of his plea, hence that the district court erroneously granted habeas relief on a claim that was not
fairly presented to the state courts.
A habeas petitioner’s claim must have been “fairly presented” to the state courts in order to
be considered properly exhausted, meaning that the state courts must have been “given the
opportunity to see both the factual and legal basis for each claim.” Id. at 415 (citation omitted). To
satisfy this requirement, the petitioner must argue his claim under the same legal theory that was
presented to the state courts. Carter v. Mitchell, 693 F.3d 555, 568 (6th Cir. 2012); see also Pillette
v. Foltz, 824 F.2d 494, 497 (6th Cir. 1987). “General allegations of the denial of rights to a fair trial
and due process do not fairly present claims that specific constitutional rights were violated”; the
claim must allege the denial of a specific constitutional right. Slaughter v. Parker, 450 F.3d 224,
236 (6th Cir. 2006) (internal quotations and citations omitted).
Here, Williams argued in the state courts that his plea of guilty to second-degree murder was
not voluntary, knowing, or intelligent. A plea that is not voluntarily, knowingly, or intelligently
made is a violation of one’s due process rights, Henderson v. Morgan, 426 U.S. 637, 645 (1976),
and results in the denial of a specific constitutional right. Thus, Williams did argue the denial of a
-4-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
specific constitutional right; but, he did not do so under the same legal theory advanced in this
proceeding.
We agree with the State of Michigan that Williams did not argue in the state courts the claim
upon which habeas relief was granted. The facts Williams relied upon in his state court briefing
focused solely on the State’s promise of a sentence well below that of life in prison. He repeatedly
suggests that he should be permitted to withdraw his plea of guilty because of a “misapprehension
of the value of commitments made to him,” as they pertain to his sentence. Williams argued that he
firmly believed that he would receive eighteen years’ imprisonment for pleading guilty to second-
degree murder and that after receiving a life sentence, the State’s promise as to the plea bargain
became illusory. As such, Williams’s argument hinged on his “lack of understanding of the potential
consequences of the alleged ‘plea bargain.’” However, knowing the consequences of a guilty plea
to second-degree murder is not the same legal theory as knowing the elements of second-degree
murder.
Despite Williams’s many statements that “he was panickin’,” that he was “goin’ crazy,” or
that he didn’t “understand what[] [was] going on,” nowhere in his analysis at the state level does he
argue that he was unaware of the elements of the offense of conviction or that his attorney or the
court should have explained the elements of second-degree murder but failed to do so. Accordingly,
because the claim that Williams presented to the state courts was not argued under the same legal
-5-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
theory, as our precedent requires, we find that Williams’s claim as it was presented to the district
court for habeas review is unexhausted.
III.
Even if we were to find that Williams’s claim was sufficiently exhausted, it would
nonetheless fail on the merits.1 “On a federal habeas appeal from a state court judgment, we review
a district court’s legal conclusions and mixed questions of law and fact de novo, and we review its
factual findings for clear error.” Ruelas v. Wolfenbarger, 580 F.3d 403, 408 (6th Cir. 2009) (citation
omitted). The State of Michigan argues that if the claim upon which habeas relief was granted was
exhausted, habeas relief is still not warranted. The State contends that the district court failed to
afford the state courts the appropriate deference as required by the Antiterrorism and Effective Death
Penalty Act (“AEDPA”).
Under AEDPA, federal courts are prohibited from setting aside a state court judgment
sustaining a prisoner’s conviction on any claim adjudicated on the merits, unless: (1) the decision
“was contrary to, or involved an unreasonable application of, clearly established Federal law, as
determined by the Supreme Court of the United States[,]” or (2) the decision “was based on an
unreasonable determination of the facts in light of the evidence presented” to the state courts. 28
U.S.C. § 2254(d). “A state court decision is ‘contrary to’ established federal law if the state court
1
We are permitted to review the merits of a claim even when the petitioner has failed to
exhaust his claim in the state courts. See 28 U.S.C. 2254(b)(2).
-6-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
arrived at a conclusion opposite to one reached by the Supreme Court on a question of law or if it
decides a case differently than the Supreme Court on materially indistinguishable facts.” Ruelas, 580
F.3d at 408 (citation omitted). While “clearly established” law includes only the holdings of the
Supreme Court, not its dicta, Bailey v. Mitchell, 271 F.3d 652, 655 (6th Cir. 2001), courts may look
to the decisions of lower federal courts to assess whether a principle has been “clearly established.”
A defendant waives several federal constitutional rights when pleading guilty, and to ensure
that the defendant appreciates the consequences of this waiver, the Supreme Court mandates that the
plea must be voluntarily, knowingly, and intelligently made. Brady v. United States, 397 U.S. 742,
748-50 (1970). A plea cannot be voluntarily and intelligently made where a defendant does not
receive “real notice of the true nature of the charge against him, the first and most universally
recognized requirement of due process.” Smith v. O’Grady, 312 U.S. 329, 334 (1941). “Without
adequate notice of the nature of the charge against him, or proof that he in fact understood the
charge, the plea cannot be voluntary.” Henderson, 426 U.S. at 645. And where a defendant pleads
guilty to a crime and he is not informed of the elements of that crime, the standard for a “voluntary,
knowing, and intelligent” plea is not met and the plea is invalid. Bradshaw v. Stumpf, 545 U.S. 175,
183 (2005).
During the plea colloquy, the trial court is not required to inform the defendant of the nature
and elements of the crime, so long as “the record accurately reflects that the nature of the charge and
the elements of the crime were explained to the defendant by his own, competent counsel.” Id.
-7-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
(citation omitted). Where competent counsel assures the court that the defendant has been informed
of the nature and elements of the crime, we may rely on this assurance to find that the defendant has
been properly informed. Id. Indeed, even absent a clear showing on the record, we presume that
counsel did in fact explain the nature of the offense to the defendant. Henderson, 426 U.S. at 647.
But even if our presumption is incorrect, the record indicates that Williams admitted facts
establishing each element of second-degree murder.
In Michigan, the elements of the lesser-included offense of second-degree murder are: (1)
a death; (2) caused by an act of the defendant; (3) with malice; and (4) without justification. People
v. Mendoza, 664 N.W.2d 685, 689 (Mich. 2003). Malice is defined as “an intent to commit an
unjustified and inexcusable killing[,]” id. at 691 (citation omitted), or “the wanton and wilful
disregard of the likelihood that the natural tendency of such behavior is to cause death or great bodily
harm.” People v. Werner, 659 N.W.2d 688, 692 (Mich. Ct. App. 2002) (internal quotation marks
and citation omitted). Williams repeatedly denies any intent to kill the victim, and the prosecutor
agrees that Williams did not intend to kill anyone. However, Michigan law does not require
Williams to have the specific intent to kill in order to satisfy the intent element of second-degree
murder. Here, Williams admits to planning the robbery with the shooter, a Davell Johnson. He
admits to fleeing with Johnson, who had taken the drugs from the victim after the shooting.
Williams never claimed that he tried to intervene to stop the shooting, despite “panicking” during
the robbery or trying to make Johnson gain control of himself. Williams also never denies knowing
his accomplice had a gun. Williams’s protestation that he was “guilty of setting Dan up with some
-8-
No. 12-1281
Spencer Williams v. Hugh Wolfenbarger
fools that basically don’t know the meaning of life” indicated that Williams used his friendship with
the victim to render the victim vulnerable to the robbery. Unfortunately for Williams, the required
element of malice is established by his admission that he planned an armed robbery, thereby creating
a high risk of violence and harm to the victim. See Werner, supra. These facts, as admitted by
Williams and recited by the trial court, establish the factual basis for the plea of guilty to second-
degree murder. Accordingly, Williams’s plea was knowingly and voluntarily made.
IV.
For all of the foregoing reasons, we REVERSE the district court’s grant of habeas relief.
-9-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/872359/
|
245 P.3d 498 (2011)
DISCOVER BANK
v.
TOMISATO.
No. 29995.
Intermediate Court of Appeals of Hawai`i.
January 11, 2011.
Summary dispositional order Affirmed.
|
01-03-2023
|
05-25-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1647618/
|
870 F. Supp. 983 (1994)
WASHINGTON WILDERNESS COALITION, a Washington Corporation, Okanogan Highlands Alliance, a Washington corporation, and Atlantic States Legal Foundation, Inc., Plaintiffs,
v.
HECLA MINING COMPANY, a Delaware Corporation, Defendant.
No. CS-94-233-FVS.
United States District Court, E.D. Washington.
October 21, 1994.
*984 *985 Michael D. Axline, Deborah N. Mailander, Western Environmental Law Center, Eugene, OR, Richard A. Smith, Seattle, WA, for plaintiffs Washington Wilderness Coalition, a Washington nonprofit corp., Okanogan Highlands Alliance, a Washington nonprofit corp., Atlantic States Legal Foundation, Inc., a New York nonprofit corp.
Jerry K. Boyd, Paine Hamblen Brooke Coffin Miller, B. Mark Hausman, Paine Hamblen Coffin & Hampton, Spokane, WA, Mark Wielga, Elizabeth H. Temkin, Scott W. Hardt, Ballard Spahr Andrews & Ingersoll, Denver, CO, for defendant Hecla Min. Co., a Delaware corp.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' CAUSE OF ACTION UNDER THE CLEAN WATER ACT
VAN SICKLE, District Judge.
BEFORE THE COURT is Defendant's motion to Dismiss Plaintiffs' First Cause of Action, which arises under Section 301 of the Clean Water Act, 33 U.S.C. § 1311 ("CWA"). (Ct.Rec. 9). Plaintiffs are represented by Michael Axline, Deborah Mailander and local counsel Richard Smith; Mark Wielga, Elizabeth Temkin and local counsel B. Mark Hausman represent Defendant. Having reviewed the record and considered the arguments of counsel, the Court enters this Order to memorialize its ruling denying defendant's motion.
Background
This case concerns Hecla Mining Company's Republic, Washington facility, which is a placer mine for gold and silver ore. In extracting gold and silver from ore, raw material is processed in a liquid solution containing cyanide and other chemical agents. This generates a significant amount of wastewater, which Hecla, pursuant to a state waste discharge permit[1], pumps from its mill into a 38 acre tailings impoundment ("Aspen Pond").
Plaintiffs' complaint alleges three sources of water pollution: (1) the Aspen Tailing Pond; (2) Tailing pond # 1; and (3) Tailing pond # 2. The Aspen Tailing Pond was allegedly constructed without an impermeable line. Plaintiffs allege that some chemicals and heavy metals bypass a water collection system installed by Hecla, and seep through the pond into waters of the United States.
Tailing ponds # 1 and # 2 are filled with dirt, and are no longer used in mining operations. Plaintiffs allege that inactive tailings in the ponds "seep and leach" contaminated waste water, some of which is intercepted and pumped into the Aspen pond, but some of which escapes and enters the waters of the United States.
In their first cause of action, Plaintiffs claim that Hecla is violating Section 301 of the CWA, by discharging pollutants into navigable waters without a National Pollutant Discharge Elimination System ("NPDES") permit. Plaintiffs' second cause of action, not the subject of the instant motion, is for CERCLA violations.
Standards
Hecla moves to dismiss the CWA claim on two grounds: (1) lack of subject matter jurisdiction, *986 and (2) failure to state a claim. Fed. R.Civ.P. 12(b)(1) & (6). In challenging subject matter jurisdiction, Hecla suggests that a citizens suit is not authorized under the CWA to enforce state water quality standards, which operate in lieu of federal standards in Washington. Hecla further questions the sufficiency of Plaintiffs' allegations of pollution from a "point source" into "navigable waters" of the United States.
When ruling on a motion to dismiss, whether for lack of subject matter jurisdiction or for failure to state a claim, the court accepts all factual allegations as true and draws all reasonable inferences in favor of Plaintiffs. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 1686, 40 L. Ed. 2d 90 (1974). The complaint will not be dismissed unless it appears to a certainty that Plaintiffs can prove no set of facts which would entitle them to relief. Elias v. Connett, 908 F.2d 521 (9th Cir.1990).
Discussion
1. Subject Matter Jurisdiction.
Federal jurisdiction over citizens suits to enforce the CWA is grounded in Section 505, which authorizes private litigation "(1) against any person ... who is alleged to be in violation of (A) an effluent standard or limitation under this chapter." 33 U.S.C. § 1365(a)(1). Hecla argues that Plaintiffs have not shown violation of an "effluent limitation", since they challenge Hecla's failure to obtain a limitation-setting permit in the first place. Hecla further asserts that citizens suits under the CWA are not authorized when a state NPDES permit process operates in lieu of the EPA-administered process.
Hecla's first argument has no support in the language of the CWA. Section 1365(f) defines "effluent limitation" to include "an unlawful act under subsection (a) of section 1311." Section 1311(a), in turn, makes it unlawful to discharge any pollutant except in compliance with the NPDES permit required in Section 1342. Thus, a citizens suit to enforce an "effluent limitation" can be based on allegations that the defendant is discharging without an NPDES permit. Plaintiffs cite several cases in which citizens have brought suit to require the issuance of a permit. E.g. Sierra Club v. Abston Constr. Co., Inc., 620 F.2d 41 (5th Cir.1980); United States v. Earth Sciences, Inc., 599 F.2d 368, 370 (10th Cir.1979); Hawaii's Thousand Friends v. Honolulu, 806 F. Supp. 225, 229 (D.Hawaii 1992). The only court to address the question directly concluded: "obtaining a permit is itself an important effluent limitation, and private attorneys general may enforce that limitation via citizens suits." Hudson River Fishermen's Ass'n v. Westchester Cty., 686 F. Supp. 1044, 1050 (S.D.N.Y.1988).
Hecla suggests that the Ninth Circuit would limit the scope of citizens suits to enforcement of permit limitations. Citing Northwest Environmental Advocates (NWEA) v. Portland, 11 F.3d 900 (9th Cir. 1993). In NWEA, the court noted that "effluent limitations" are "end-of-pipe limitations and permit violations", and that citizens suits are not authorized to establish general water quality standards. Id. at 908. The court did not suggest that a permit must be in place before a citizens suit may be brought; rather, it distinguished between suits to enforce discharge limitations that would be the subject of a permit and those to enforce general water quality standards. There is no question in this case that Plaintiffs' challenge is to discharge limitations subject to NPDES permit. This clearly falls within the jurisdictional sweep of the CWA.
Hecla's second argument is that the CWA does not provide jurisdiction for citizens suits when a state NPDES permit program operates in lieu of the federal program. This argument is based on 33 U.S.C. § 1342(c), which suspends the issuance of federal NPDES permits once a state permit program acceptable to EPA is in place. Washington has had an EPA-approved permit program since 1973. See 39 Fed.Reg. 26,061 (July 16, 1974).
The courts addressing whether citizens suits are available in a state with its own permit process are divided on the issue. Some hold that private suits are not authorized, on the theory that federal enforcement is suspended entirely by a state permit program. E.g. City of Heath, Ohio v. Ashland Oil, Inc., 834 F. Supp. 971 (D.Ohio 1993) (no *987 citizen suit under similar RCRA state permit program) (citing Dague v. City of Burlington, 935 F.2d 1343, 1353 (2d Cir.1991)); Thompson v. Thomas, 680 F. Supp. 1 (D.D.C. 1987). These cases treat federal and state programs as separate universes, and conclude that citizens suits are authorized only under a state provision.
Other courts emphasize the unity of purpose behind state and federal CWA programs, and hold that citizens may enforce effluent limitations regardless of whether the EPA or a state agency issues the NPDES permits. E.g. Lutz v. Chromatex, Inc., 725 F. Supp. 258, 261 (M.D.Pa.1989); United States v. Hooker Chem. & Plastics, 749 F.2d 968 (2d Cir.1984); McClellan Ecological Seepage Situation ("MESS") v. Weinberger, 707 F. Supp. 1182, 1190-91 (E.D.Cal.1988). This conclusion is suggested by the definition of "effluent limitation" in section 1362(11), which includes "any restriction established by a state or the [EPA] Administrator."
With respect to identical state enforcement provisions of the Resource Conservation and Recovery Act ("RCRA"), the EPA itself has taken the position that citizen's suits may be brought in states that have received authority to operate permit programs in lieu of the federal program. Lutz v. Chromatex, Inc., 725 F. Supp. 258, 261 (M.D.Pa.1989) (citing EPA statement in 45 Fed.Reg. 85016 (Dec. 24, 1980)). MESS points out that state permit programs are essentially part of federal law, since they must be approved by the EPA, and must comport with stringent federal requirements. 707 F.Supp. at 1190-91; see also, 40 C.F.R. § 122.1 et seq. (setting forth program criteria for NPDES permits, applicable to both EPA and state administered programs). Several mandatory federal standards are expressly recognized as "effluent limitations" in the citizens suit provision of the CWA. 33 U.S.C. § 1365(f) (referencing standards in 33 U.S.C. §§ 1311, 1312, 1316, 1317, 1343; 33 U.S.C. § 1342(b)(1)(A)).
Hecla asserts that the state program for issuance of NPDES permits is intended to supplant all other methods of CWA enforcement. The court is not persuaded. Section 1342(c), which suspends the federal permit program upon approval of a state program, simply guarantees that the state will be the sole entity issuing NPDES permits. The EPA retains full authority to carry out its other duties under the CWA, and to supervise state programs to ensure compliance with federal guidelines. As to private action, the CWA generally authorizes citizens suits unless the responsible government agency has commenced proceedings for the same purpose; in that case, citizens are guaranteed a right to intervene in the government action. See Hooker Chemicals, 749 F.2d at 978; 40 C.F.R. § 25.1 et seq.
Nothing in the language or structure of the CWA suggests that citizens suits are incompatible with state administration of the NPDES permit program. Indeed, it would be bad policy to remove a key component of private enforcement from the CWA simply because the EPA has approved a state permit program in lieu of the federal bureaucracy. Accordingly, the court is persuaded by the line of authority holding that citizens suits may proceed in states administering their own NPDES permit program. Hecla's motion to dismiss for lack of subject matter jurisdiction is denied.
2. Failure to State a Claim.
The CWA makes it unlawful for any person or entity to "discharge any pollutant" without an NPDES permit. 33 U.S.C. § 1311(a) & § 1342(a). "Discharge of any pollutant" is defined as "any addition of any pollutant to navigable waters from a point source." 33 U.S.C. § 1362(12)(A) (emphasis added). Hecla argues that plaintiffs have not stated a claim under the CWA, because the mining runoff at issue does not flow from a "point source", and does not enter "navigable waters."
(a) "Point Source."
Section 1362(14) defines "point source" as:
any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.
*988 A nonpoint source is anything else. Idaho v. Hanna Mining Co., 699 F. Supp. 827, 832 (D.Id.1987), aff'd, 882 F.2d 392 (1988).
Hecla argues that its tailings ponds are not point sources, but merely "areas of low topography into which mine tailing from mineral processing activities have been deposited and through which water may percolate." (Δ's memo at 13). Noting that a point source is usually a pipe or a ditch, Hecla points out that here we are dealing here with a 38 acre man-made pond.
Initially, it is clear that the size of the pond is not relevant to determining whether or not it is a point source. As plaintiffs explain, it would be irrational to conclude that the bigger the source of pollution, the less likely it is to be a "source" under the CWA. Cases cited by defendants support the conclusion that man-made ponds, designed to receive tailings, are "conveyances" or "containers" under the definitions in the clean water act. See United States v. Earth Sciences, Inc., 599 F.2d 368, 370 (10th Cir. 1979) (system of sump pumps, ditches, and hoses is "point source"); Appalachian Power Co. v. Train, 545 F.2d 1351, 1373 (4th Cir. 1976) (distinguishing point sources from "unchanneled and uncollected surface waters"); Consolidated Coal Co. v. Costle, 604 F.2d 239, 249 (4th Cir.1979) (point sources include slurry ponds, drainage ponds, and coal refuse piles); Trustees for Alaska v. E.P.A., 749 F.2d 549, 557-58 (9th Cir.1984) (adopting Earth Sciences interpretation of point source to apply to placer mine). To similar effect is Abston Constr., where the Fifth Circuit noted: "gravity flow (from rain or runoff water) ... may be part of a point source discharge if the miner at least initially collected or channeled the water and other materials"). Sierra Club v. Abston Const. Co., 620 F.2d 41 (5th Cir.1980); see also, Committee to Save Mokelumne River v. East Bay Util., 13 F.3d 305, 308 (9th Cir.1993) (holding that an NPDES permit is required for "surface runoff that is collected or channelled" into a Mine Run Dam Reservoir).
These cases make clear that the touchstone for finding a point source is the ability to identify a discrete facility from which pollutants have escaped. Particularly persuasive is the reasoning of the Earth Sciences court, adopted by the Ninth Circuit in Trustees for Alaska. 599 F.2d at 370[2]. There, the court noted that "point source" must be interpreted broadly to effectuate the remedial purposes of the CWA. 599 F.2d at 373. The non-point source designation is limited to uncollected runoff water from, for example, oil and gasoline on a highway, which is difficult to ascribe to a single polluter. Trustees for Alaska, 749 F.2d at 558. Discharges from a pond or refuse pile can easily be traced to their source. Thus, even though runoff may be caused by rainfall or snow melt percolating through a pond or refuse pile, the discharge is from a point source because the pond or pile acts to collect and channel contaminated water. Id. at 374.
It appears that EPA agrees with the Earth Sciences analysis. The preamble to EPA's NPDES Permit Application Regulations for Storm Water Discharges, 55 Fed. Reg. 47990 (Nov. 16, 1990), states that the agency "intends to embrace the broadest possible definition of point source consistent with the legislative intent of the CWA." (See ¶'s opposition memo, appendix A at 3). Accordingly, the federal regulations define "discharge of a pollutant" to include "surface runoff which is collected or channeled by man." 40 C.F.R. 122.2. In a letter from EPA region VIII, "point source" is defined to include "any seeps coming from identifiable sources of pollution (i.e., mine workings, land application sites, ponds, pits, etc.). Defendants correctly note that the EPA statements from Region VIII are not authoritative. See Village of Oconomowoc Lake v. *989 Dayton Hudson Corp., 24 F.3d 962 (7th Cir. 1994). Nonetheless, they are persuasive, as they reflect a view which was endorsed by the Ninth Circuit in Trustees for Alaska.
Even if it is not certain that the ponds in this case are similar enough to those in other cases to constitute a point source under the CWA, dismissal would be premature. Several courts note that the question whether a discharge occurred from a point source is fact-laden; the court must consider evidence of the "precise nature" of the Defendant's facility. See Abston Const. Co., 620 F.2d at 47; Hanna Mining, 699 F.Supp. at 832; Concerned Area Residents v. Southview Farm, 834 F. Supp. 1410, 1417 (W.D.N.Y.1993). Thus, at this stage in the proceedings, plaintiffs' allegations are sufficient to establish that Hecla's tailings ponds are point sources within the meaning of the CWA.
(b) "Navigable Waters."
Hecla next argues that Plaintiffs merely allege discharge to groundwater, which is not part of the "navigable waters" of the United States. In fact, the complaint does allege that polluted wastewater from the Hecla mine enters surface waters, including Eureka Creek and Mud Lake[3]. (Complaint at 7). The connection to groundwater is Plaintiffs' acknowledgement that a large volume of discharge "seeps and leaks" from the ponds into the soil and groundwater, and thereafter into the surface waters. Given this indirect path of discharge, the court must decide whether the Clean Water Act's prohibition of the discharge of any pollutant into "navigable waters" encompasses discharges which migrate through groundwater.
The Clean Water Act generously defines "navigable waters" as "waters of the United States." 33 U.S.C. § 1362(7). Given the Act's purpose to regulate as fully as possible all sources of water pollution, the Supreme Court recognized that "the term navigable is of little import." United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 133, 106 S. Ct. 455, 462, 88 L. Ed. 2d 419 (1985). To the extent permitted under the Constitution, Congress intended "navigable waters" to embrace virtually "every creek, stream, river or body of water that in any way may affect interstate commerce." Quivira Min. Co. v. E.P.A., 765 F.2d 126, 129 (10th Cir.1985); accord Leslie Salt Co. v. Froehlke, 578 F.2d 742, 755 (9th Cir.1978).
Nonetheless, Congress did not intend to include isolated groundwater as part of the "navigable waters." The language and structure of the Act make this clear. First, the CWA consistently refers to "navigable waters and ground waters" in those portions of the Act dealing with EPA program development as well as the study of water pollution. E.g. 33 U.S.C. § 1252(a), § 1254(a)(5), & § 1256(e)(1). In the provisions for water quality standards and discharge permitting, on the other hand, only the phrase "navigable waters" is used. E.g. 33 U.S.C. § 1312(a), § 1342(a)(4). If the terms were synonymous, it would not be necessary for Congress to make distinct references to groundwater and navigable water.
More importantly, the legislative history of the CWA demonstrates that Congress did not intend that discharges to isolated groundwater be subject to permit requirements. The Report of the Senate Committee on Public Works that accompanied the bill stated:
Because the jurisdiction regarding groundwaters is so complex and varied from State to State, the Committee did not adopt this recommendation [to approve groundwater standards]. The Committee recognizes the essential link between ground and surface waters and the artificial nature of any distinction.
S.Rep. No. 414, 92d Cong., 1st Sess. 73 (1971), U.S.Code Cong. & Admin.News 1972, pp. 3668, 3739, reprinted in 2 Congressional Research Service of the Library of Congress, A Legislative History of the Water Pollution *990 Control Act Amendments of 1972, 93d Cong., 1st Sess., at 1491 (Comm.Print 1973) (hereinafter "Leg.Hist."). Congress rejected an amendment offered by Senator Aspin to "bring groundwater into the subject of the bill." 118 Cong.Rec. 10,669 (1972), 1 Leg. Hist. 597. (See Remarks of Sen. Aspin). Congress's main concern was expressed by Representative Harsha: "We do not have the knowledge or the technology to devise water-quality standards for ground water; we do not as yet know how to do that." 1 Leg.Hist. 594 (remarks of Rep. Harsha).[4]
Guided by the legislative history, courts that have considered the issue agree that "waters of the United States" do not include "isolated/nontributary groundwater." See, Exxon Corp. v. Train, 554 F.2d 1310 (5th Cir.1977); United States v. GAF Corp., 389 F. Supp. 1379 (S.D.Tx.1975). They are split, however, on the present question of whether tributary groundwater, which is naturally connected to surface water, is subject to CWA regulation.
On the one hand are published decisions which hold that Congress intended regulation of "discharges of pollutants that could affect surface waters of the United States." McClellan (MESS), 707 F.Supp. at 1196; Sierra Club v. Colorado Refining Co., 838 F. Supp. 1428 (D.Colo.1993) ("discharge of any pollutant into `navigable waters' includes such discharge which reaches `navigable waters' through groundwater"). On the other hand are those courts which conclude that the possibility of a hydrological connection between ground and surface waters is insufficient to justify CWA regulation. Oconomowoc Lake, 24 F.3d 962 (7th Cir.1994)[5]; Kelley v. United States, 618 F. Supp. 1103 (W.D.Mich.1985). One court, rather than sorting through the conflicting authorities, deferred to an agency interpretation excluding groundwater from coverage under the CWA. Town of Norfolk v. Corps of Engineers, 968 F.2d 1438, 1450 (1st Cir.1992).
After reviewing the authorities, this court comes down on the side of MESS and Colorado Refining. The logic of these cases is compelling: since the goal of the CWA is to protect the quality of surface waters, any pollutant which enters such waters, whether directly or through groundwater, is subject to regulation by NPDES permit. Applying effluent limitations to tributary groundwater does not change nature of CWA monitoring. As MESS explains, Plaintiffs must still demonstrate that pollutants from a point source affect surface waters of the United States. 707 F.Supp. at 1196. It is not sufficient to allege groundwater pollution, and then to assert a general hydrological connection between all waters. Rather, pollutants must be traced from their source to surface waters, in order to come within the purview of the CWA. Id.
This approach to groundwater pollution has been favorably acknowledged by EPA on at least one occasion. Preamble, NPDES Permit Regulations for Storm Water Discharges, 55 Fed.Reg. 47990, 47997 (Nov. 16, 1990). Citing to MESS and Exxon, EPA stated that rulemaking in 40 C.F.R. parts 122, 123, and 124, does not apply to groundwater, "unless there is a hydrological connection between the ground water and a nearby surface water body." Id. The court in Oconomowoc Lake dismissed the EPA statements as a "collateral reference to a problem." *991 24 F.3d at 966. It appears to this court, however, that the preamble explains EPA's policy to require NPDES permits for discharges which may enter surface water via groundwater, as well as those that enter directly.
Plaintiffs' complaint alleges a hydrological connection between seepage into groundwater and the nearby surface waters of Eureka creek and Mud lake. Taking the allegation as true, the complaint is thus sufficient to support a claim under the CWA.
Conclusion
Hecla's Motion to Dismiss must be denied. The Court has subject matter jurisdiction over citizens suits to require issuance of a NPDES permit through state CWA administration. The tailings ponds are "point sources", since they collect and channel contaminated water into a discrete conveyance. Plaintiffs allege discharge into "navigable waters", by describing pollution which migrates from ground waters beneath the tailings ponds into surface waters of the United States.
IT IS HEREBY ORDERED: Defendant's Motion to Dismiss Plaintiffs' First Cause of Action (Ct.Rec. 9) is DENIED.
IT IS SO ORDERED.
NOTES
[1] The state permit should not be confused with the NPDES permit required by the CWA for discharges from a point source into navigable waters. See 33 U.S.C. § 1342. The State permit merely authorizes Hecla to "discharge mill tailings, seepage return, and mine drainage to the Aspen tailings impoundment", subject to certain effluent limitations. See permit, (Ct.Rec. 1, ex. C).
[2] Both Earth Sciences and Trustees for Alaska involved placer mining operations similar to Hecla's Republic facility. In Earth Sciences, unusually large spring runoffs caused an overflow of a sump pump system, resulting in discharges of pollutants into a nearby creek. In Trustees for Alaska, discharge water was released from a sluice box, which the Ninth Circuit concluded was a "confined channel" under the statutory definition of point source. Like the tailing ponds at Hecla's facility, sumps and sluice boxes are designed to gather the sodium cyanide-sodium hydroxide water solution used to extract gold and silver from ore.
[3] In a side-note, Plaintiffs also suggest that the tailings ponds themselves constitute "navigable waters." (¶'s brief at 11). This is wrong. The EPA definition of navigable waters includes only "natural" ponds, as opposed to manmade collection systems. Besides, it is illogical for plaintiffs to maintain that the tailings ponds can be both a "point source" of discharge and "navigable water." See Oconomowoc Lake, 24 F.2d at 963.
[4] Plaintiffs read too much into the comments of Representatives Clausen and Dingell during debate on the 1972 amendment. See 1 Leg.Hist. 590-92. While the comments reflect an understanding that the Aspin amendment would bring ground water within the "enforcement provisions relating to the standards" of the CWA, they do not draw a distinction, as plaintiffs suggest, between "enforcement standards" and "permitting." To the contrary, the Representatives opposed the amendment precisely because they understood it to extend to ground water "the types of controls that are required for navigable water." 1 Leg.Hist. 591. The Ninth Circuit recently recognized that a feature of the 1972 amendments was to shift the focus of the CWA away from water quality enforcement standards toward permit limitations. Northwest Environmental Advocates (NWEA), 11 F.3d at 909-10. Thus, it would be natural for the language of "enforcement standards" and of "permitting" to overlap.
[5] Curiously, Oconomowoc Lake makes no reference to the Seventh Circuit decision in United States Steel Corp. v. Train, 556 F.2d 822, 852 (7th Cir.1977), which held that the EPA is authorized to regulate tributary groundwater, "at least when the regulation is undertaken in conjunction with limitations on the permittee's discharges into surface waters."
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2982345/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0433n.06
Case No. 13-6416 FILED
Jun 13, 2014
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
TERESA E. BANKS, )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE MIDDLE DISTRICT OF
ARGOS RISK MANAGEMENT SERVICES, ) TENNESSEE
LLC, )
)
Defendant-Appellee. )
)
BEFORE: SUTTON and GRIFFIN, Circuit Judges; SARGUS, District Judge.*
SUTTON, Circuit Judge. Argos Risk Management Services fired Teresa Banks after
learning that her work history was not what she claimed it was. In response, Banks filed a
wrongful-termination claim under Tennessee common law. The district court granted summary
judgment to Argos. We affirm.
I.
Argos is a third-party administrator of workers’ compensation claims. After working for
almost a year as a claims adjustor at Argos, Banks was allegedly injured at work. What her
injury was and how it happened remain something of a mystery. According to Banks, an
*
The Honorable Edmund A. Sargus, Jr., United States District Judge for the Southern District of
Ohio, sitting by designation.
Case No. 13-6416, Banks v. Argos Management Services, LLC
overhead filing cabinet door fell on her hand, and sometime down the road a doctor
recommended that she undergo reconstructive shoulder surgery.
Banks filed a workers’ compensation claim, and Argos did what it normally does for
others but now did for itself: It investigated the claim. The investigation raised several “red
flags.” R. 18-7 at 8. No one saw Banks get injured. After the accident, Banks told her
supervisors that she was okay, but nonetheless asked for information as to how she could file a
workers’ compensation claim. The next day she submitted a workers’ compensation form.
When an Argos investigator attempted to reenact the injury using an “identical” filing cabinet,
she could not do so. Id. at 9.
More digging uncovered more red flags. Argos ran an “Index Report” of Banks’ social
security number and found that she had filed at least eight workers’ compensation or general
liability claims against previous employers. A cross-check of these claims against Banks’ job
application revealed that she had been less than forthcoming with her Argos interviewers. The
claims showed that Banks had recently worked for a company called “Dawg, Inc.,” for example,
but Banks had not listed this company in the employment-history section of her application. Id.
at 11.
Résumé omissions were not Banks’ only problem. She also had embellished the history
that did appear on her application. Argos found that Banks had filed for bankruptcy in 2010 and
had listed her employer as “Genco Distributing System,” but this information did not match
Banks’ résumé, which said that Banks was an employee of the State of Tennessee during that
period. Id. at 13. And, perhaps most importantly, when Banks applied to Argos, she claimed to
have seven years of experience with “American International Group” as a “worker’s
2
Case No. 13-6416, Banks v. Argos Management Services, LLC
compensation disability specialist.” Id. at 16; R. 18-3 at 4. But that was not true. Banks was an
entry-level “clerk” with AIG, not a specialist of any kind, R. 18-7 at 16, and she worked at AIG
for two years, not seven.
Argos fired Banks on March 5, 2012, almost four months after her alleged injury at work.
As Argos saw things, Banks had lied on her employment application and could not be trusted.
On top of that, the lies indicated that she did not have the requisite employment experience to
serve as a claims adjustor. The job demanded “five . . . years continuous employment in a
position responsible for the overall handling of workers’ compensation claims,” R. 18-3 at 2, and
Banks did not have any experience in this line of work at all.
Banks filed a state-law diversity action against the company in federal court, contending
that she was wrongfully terminated and that Argos had engaged in outrageous conduct. The
district court granted summary judgment to Argos on both claims. On appeal, Banks challenges
the rejection of her wrongful-termination claim.
II.
As this case comes to us, the parties share common ground about how to handle a
wrongful-termination lawsuit under Tennessee law: Banks must show that she was an employee
of Argos at the time of her injury; she must show she made a claim against Argos for workers’
compensation; she must show that Argos fired her and that the workers’ compensation claim was
a “substantial factor” in Argos’s employment decision; at that point, the burden shifts to Argos to
establish that it had a legitimate reason for firing her; and if the company shoulders that burden,
it becomes Banks’ burden to show that the company’s reason was pretextual. See Canady v.
3
Case No. 13-6416, Banks v. Argos Management Services, LLC
Gillette Co., 547 F. App’x 670, 678 (6th Cir. 2013); Anderson v. Standard Register Corp.,
857 S.W.2d 555, 558–59 (Tenn. 1993).
(As a side note, there is some debate about whether this Tennessee common-law claim
contains all of these requirements at summary judgment, in particular the final pretext burden-
shifting requirement. Compare Gossett v. Tractor Supply Co., 320 S.W.3d 777, 782–85 (Tenn.
2010), with Canady, 547 F. App’x at 678. Cf. Scola v. Publix Supermarkets, Inc., No. 12-6458,
2014 WL 756708, at *5–7 (6th Cir. Feb. 27, 2014); Theus v. GlaxoSmithKline, 452 F. App’x
596, 602 n.8 (6th Cir. 2011). But the issue does not go to our jurisdiction, and we thus take the
case as it comes to us and as the parties have opted to litigate it.)
Banks’ claim fails as a matter of law. Argos had many legitimate reasons for firing her
separate and apart from the filing of her workers’ compensation claim. When she applied to
work at Argos, she repeatedly misled her interviewers. Where was Dawg, Inc. on her application
forms? Was she really a civil servant for the years listed on her résumé? What exactly did she
do at AIG, and for how long did she do it? When Argos looked for answers to these questions, it
found only omissions, embellishments and lies, all of which supply a fair reason for ending an
employment relationship. Shazor v. Prof’l Mgmt., Ltd., 744 F.3d 948, 959 (6th Cir. 2014).
Banks does not dispute that all of this in the normal course would supply a legitimate reason for
ending an employment relationship.
What Banks does dispute is whether these concededly legitimate reasons for firing her
were Argos’s real reasons for firing her. Her evidence of pretext, however, falls short of creating
a genuine issue of material fact. She starts by pointing to positive work reviews from Argos
supervisors. If Argos was happy with her work, she asks, how can it later claim that she was
4
Case No. 13-6416, Banks v. Argos Management Services, LLC
unqualified for the job? The argument has a dubious factual premise and is beside the point to
boot: dubious because the evidence shows that Banks’ work was rife with “rookie mistakes” that
a veteran claims adjustor would not make, see, e.g., R. 18-7 at 6; and beside the point because,
by the time the company fired Banks, it knew that she could not be trusted given her serial and
material lies in her job application.
Banks persists that Argos’s reason was pretextual because its explanation “shifted” over
time. Banks is right in one sense: “Shifting justifications over time [may] call[] the credibility
of those justifications into question.” Cicero v. Borg-Warner Auto., Inc., 280 F.3d 579, 592 (6th
Cir. 2002). But she is wrong to think that rule applies here. Argos’s justification never changed.
Two Argos supervisors described the company’s rationale for firing Banks. Jan Peine told
Banks that Argos fired her because she was not qualified for the claims adjustor position. Todd
Larry likewise said that Argos fired Banks because she “had falsified her employment history
and did not have the requisite . . . qualifications necessary for the” job. He added that Banks
“lacked the honesty/integrity necessary for the position.” R. 18-3 at 4. These are not
inconsistent, shifting justifications that render summary judgment inappropriate. They are two
sides of the same coin: Peine said Banks was unqualified, and Larry explained why.
As a last resort, Banks engages in some “shifting” storytelling of her own. Argos decided
to fire her, Banks now alleges, not in March 2012 (when the company formally let her go) but in
November 2011, just a few days after she suffered her injury. The evidence does not support the
point. Yes, Peine learned early in her investigation that Banks had a long history of repeated
workers’ compensation claims, that Banks might be a “[p]rofessional claimant,” and that Banks
could be “trouble.” R. 18-7 at 12; R 22-2 at 14. But there is no evidence that anybody in a
position to fire Banks decided to exercise that option until (at the earliest) February 2012, when
5
Case No. 13-6416, Banks v. Argos Management Services, LLC
Todd Larry, the president and chief executive officer of Argos, learned the extent of Banks’s
employment-history fabrications. At the end of the day, Banks has not produced any direct
evidence of pretext and cannot show temporal proximity between the claimed workers’-
compensation-covered injury (November 8, 2011) and her notification of discharge (March 5,
2012). Banks’s unsupported allegations do not change this fact. The district court correctly
rejected this claim as a matter of law.
III.
For these reasons, we affirm.
6
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/890022/
|
October 22 2012
DA 12-0145
IN THE SUPREME COURT OF THE STATE OF MONTANA
2012 MT 231
IN THE MATTER OF:
D.B.,
A Youth in Need of Care.
APPEAL FROM: District Court of the Twenty-First Judicial District,
In and For the County of Ravalli, Cause No. DN 2010-02
Honorable James A. Haynes, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Elizabeth Thomas, Attorney at Law, Missoula, Montana
For Appellee:
Steve Bullock, Montana Attorney General; Mardell Lynn Ployhar, Assistant
Attorney General, Helena, Montana
Michael L. Hayes, Special Deputy County Attorney, Hamilton, Montana
Submitted on Briefs: July 25, 2012
Decided: October 22, 2012
Filed:
__________________________________________
Clerk
Justice Brian Morris delivered the Opinion of the Court.
¶1 J.B. (Father) appeals an order of the Twenty-First Judicial District Court, Ravalli
County, that terminated his parental rights. We affirm.
¶2 Father raises the following issues:
¶3 Did the District Court abuse its discretion in determining that the Department
proposed an appropriate treatment plan?
¶4 Did the District Court abuse its discretion in determining that Father would be
unlikely to change within a reasonable amount of time?
¶5 Did Father receive ineffective assistance of counsel?
¶6 Father and M.S. (Mother) are the biological parents of D.B. Mother had D.B. in
2000. Mother primarily raised D.B. Father had lived with D.B. for a few months when D.B.
was less six months old. Father has had few visits with D.B. since that time with the
exception of weekend visitations during 2008 and 2009. This visitation ended when Father
moved to Mississippi in 2009. Father’s departure left D.B. entirely in the physical custody
of Mother.
¶7 Authorities removed D.B. from Mother’s custody in 2010 after Mother was arrested
for partner or family member assault. D.B. and his stepbrother had been subject to numerous
domestic violence incidents before Mother’s 2010 arrest. The District Court accordingly
granted the Department of Public Health and Human Services (Department) emergency
protective custody. Father stipulated at the show-cause hearing to D.B.’s status as a youth in
need of care. He further stipulated that Department should have temporary legal custody.
¶8 The Department developed a treatment plan for Father. The treatment plan set out
2
numerous reasons for D.B.’s abuse and neglect. The treatment plan detailed Father’s
criminal history. The history included the fact that Father had violated his probation in 2009
by driving under the influence and leading officers on a high-speed chase. The treatment
plan also noted Father’s history of drug and alcohol abuse. The plan further identified
Father’s history of domestic violence. Police had been called to Father’s residence on
numerous occasions. Father ran up three assault charges between 2001 and 2004. The
treatment plan also noted that Father possessed a “self-admitted anger problem.” Finally, the
plan noted that Father had demonstrated an inability to meet D.B.’s physical and emotional
needs, and that D.B. did not want to live with Father.
¶9 Father stipulated to all these findings. He also stipulated to various tasks that he
would need to complete. The District Court approved the treatment plan in March 2010.
The court ordered that Father complete the plan by July 28, 2010.
¶10 Father complied with parts of the plan, but he continually demonstrated an issue with
one problem in particular—an inability to develop a parenting relationship with D.B. The
Department sought extensions to the treatment’s completion date due to Father’s difficulties
in establishing a relationship with D.B.
¶11 The Department scheduled a supervised visit between Father and D.B. in Montana for
one week in 2011. It also arranged for a parenting evaluation—a requirement of his
treatment plan—during this visit. The Department purchased a plane ticket for Father and
offered to pay for his hotel room in Montana. Department officials could not recall offering
to pay for a hotel room for any other parent. A few days before this visit, however, Father
discovered that D.B. did not want to see him. Father also disliked the fact that the proposed
3
visits would be supervised. Father eventually refused to come to Montana.
¶12 These problems had arisen in advance of Father’s scheduled supervised visit. D.B.
apparently feared his Father. D.B. often refused to speak to Father during weekly phone
calls. D.B. showed signs of anxiety during these phone calls. D.B. had trouble with bed-
wetting on days of the phone calls. D.B. also conveyed stories of Father yelling at him to
child protection specialists. D.B. further told his therapist about two incidents where Father
had become violent with other family members in D.B.’s presence.
¶13 The therapist noted that Father’s failure to empathize with D.B. continually proved to
be a significant obstacle. D.B.’s therapist explained to Father that D.B. would not feel safe
with him unless Father would stop questioning the validity of D.B.’s feelings. Father
insisted that D.B. was not actually afraid of Father. Father claimed that Mother’s family had
manipulated D.B. into lying about the violent incidents. D.B.’s therapist ultimately
concluded that Father’s unwillingness to empathize with D.B. made it impossible for the two
to form a relationship. She also noted that D.B.’s continuing fear of Father contributed to his
unresolved post-traumatic stress disorder.
¶14 Department officials similarly concluded that Father was more interested in blaming
others than he was in forming a relationship with D.B. A child protection specialist noted
that Father responded to D.B’s fear of Father by suggesting that D.B. should be given a lie
detector test. Father also accused the Department officials of failing to do their job. Father
threatened to retaliate against the Department after the termination proceedings. Father went
so far as to state that his attorney would be coming after money, but that Father would be
coming for blood.
4
¶15 Father also focused more on Mother’s treatment than his own. He refused to come to
Montana for supervised visits when Mother had unsupervised visits. Father also claimed that
he had hired a private investigator to follow Mother.
¶16 The Department ultimately determined after 20 months of poor cooperation from
Father that it would seek termination of his parental rights. Father challenged the treatment
plan’s validity, and argued alternatively, that he should be given more time to comply with
the treatment plan. The District Court terminated Father’s parental rights. Father appeals.
STANDARD OF REVIEW
¶17 We review for an abuse of discretion a district court’s decision to terminate parental
rights. In re D.B., 2007 MT 246, ¶ 16, 339 Mont. 240, 168 P.3d 691. We will not disturb a
district court's decision on appeal under these circumstances unless “there is a mistake of law
or a finding of fact not supported by substantial evidence that would amount to a clear abuse
of discretion.” In re M.N., 2011 MT 245, ¶ 14, 362 Mont. 186, 261 P.3d 1047.
DISCUSSION
¶18 Did the District Court abuse its discretion in determining that the Department
proposed an appropriate treatment plan?
¶19 A district court, in terminating parental rights, must consider whether “an appropriate
treatment plan that has been approved by the court has not been complied with by the parents
or has not been successful.” Section 41-3-609(1)(f)(i), MCA. Courts accordingly must first
determine whether the Department has provided an “appropriate” treatment plan. In re D.B.,
¶ 31. No bright-line test exists for courts to determine whether a treatment plan is
appropriate. Instead, courts consider various factors, including whether the parent was
5
represented by counsel, whether the parent stipulated to the plan, and whether the plan “takes
into consideration the particular problems facing both the parent and the child.” In re D.B.,
¶ 32.
¶20 Father concedes that he failed to engage in a parenting assessment as required by his
treatment plan. He nevertheless argues that this assessment constituted an inappropriate
requirement. Father acknowledges that he stipulated to this requirement while represented
by counsel. Father argues that the parties were suffering from a fatal assumption in agreeing
to this requirement—that D.B. would engage actively in a relationship with Father.
¶21 Father contends that the Department stubbornly failed to re-evaluate his treatment
plan in light of D.B.’s resistance to a relationship. Father contends that he was left in an
untenable situation: undergo the parenting evaluation and possibly cause D.B. further
trauma; or skip the parenting evaluation to prevent trauma to D.B. and not comply with the
parenting evaluation.
¶22 Father never previously expressed concern, however, about D.B.’s well-being when
he declined to return to Montana. Father instead became angry over D.B.’s fear. Father
expressed concern about being arrested if he returned to Montana. Father refused to visit
D.B. if the Department required supervised visits while Mother had unsupervised visits.
Father never raised the concern that his visit to Montana could cause potential trauma to
D.B. The record offers no support, other than Father’s testimony, of Father’s contention that
he failed to comply with the treatment plan to spare trauma to D.B.
¶23 Moreover, no fatal assumption existed regarding D.B.’s attitude towards Father. The
Department’s petition to designate D.B. a youth in need of care stated that D.B. had no desire
6
to live with Father. The Department deemed a parenting assessment necessary to better
understand the potential problems regarding the relationship. The Department hoped that the
assessment would help address D.B.’s fear of Father. The Department also sought the
assessment to assist its development of a plan to build a relationship between D.B. and
Father. Father took no issue with this approach when he stipulated to the treatment plan
while being advised by counsel. Father offers no alternative to how the Department should
have addressed D.B.’s fear without this parenting evaluation.
¶24 Did the District Court abuse its discretion in determining that Father would be
unlikely to change within a reasonable amount of time?
¶25 A district court must determine whether the parent’s behavior will change within a
reasonable amount of time. Section 41-3-609(2), MCA. This determination requires that the
District Court primarily consider the physical, mental, and emotional needs of the child.
Section 41-3-609(3), MCA. That is, the court must be foremost concerned with the child’s
best interest when evaluating whether to terminate parental rights. See § 41-3-609(3), MCA;
In re B.S., 2009 MT 98, ¶ 32, 350 Mont. 86, 206 P.3d 565.
¶26 The District Court noted Father’s testimony at the termination hearing demonstrated
“rigid and concrete thinking.” Father continually refused to put D.B.’s needs over his own
interests. Indeed, Father repeatedly failed to cooperate with the Department. The
Department paid for Father’s plane tickets to Montana and arranged to pay for his hotel room
for parenting assessment. Father still refused to attend parenting assessment.
¶27 Father also threatened Department officials and D.B.’s therapist on numerous
occasions. When D.B.’s therapist advised Father that empathizing with D.B. would make
7
D.B. less afraid of Father, Father responded by accusing his son of lying. Father alleged that
Mother’s family had manipulated D.B. He threatened to hire a private investigator to
validate these accusations. Father took no responsibility for his poor relationship with his
son.
¶28 Despite Father’s actions, the Department continually extended the deadline for
Father’s completion of the treatment plan. The Department initiated termination proceedings
only after 20 months of Father’s continued failures to engage in a parenting relationship. By
that point, Father told the Department that he did not see the point in completing his
treatment. Father continually manifested, over an extended period of time, that he would not
take the steps necessary to form a relationship with D.B. The District Court did not abuse its
discretion in concluding that Father’s behavior would not change within a reasonable amount
of time.
¶29 Did Father receive ineffective assistance of counsel?
¶30 The Due Process Clause of the Montana Constitution provides a parent in a
termination of parental rights proceeding with the right to effective assistance of counsel. In
re A.S., 2004 MT 62, ¶¶ 12, 20, 320 Mont. 268, 87 P.3d 408. A parent may sustain no
ineffective assistance claim, however, when the parent cannot demonstrate prejudice as a
result of the ineffective assistance. In re C.M.C., 2009 MT 153, ¶ 30, 350 Mont. 391, 208
P.3d 809.
¶31 Father argues that effective counsel would have advised him not to stipulate to the
treatment plan at the show-cause hearing and would have contested that D.B. qualified as a
youth in care. Father emphasizes that D.B. had entered the Department’s temporary legal
8
custody due to Mother’s substance abuse and domestic violence issues. Father contends that
insufficient evidence existed, other than his stipulation, to determine that Father’s actions
had contributed to D.B.’s abuse and neglect. Father argues that counsel should have
recommended that Father not sign any stipulations due to his status as the non-offending
parent.
¶32 Father cannot establish prejudice even if we were to assume that his counsel had acted
ineffectively. Father’s extensive criminal history included arrests for violent behavior and a
recent violation of Father’s probation. Father had little contact with D.B. throughout his life.
Moreover, D.B. had no desire to live with Father based on these limited interactions.
Finally, Father admitted to having had substance abuse problems. The Department readily
would have uncovered these facts had Father’s counsel engaged in an adversarial process.
These factors sufficiently established that a decision by the court to place D.B. in Father’s
custody would have put D.B. in danger of being abused, neglected, or both. Father can
demonstrate no prejudice in light of these circumstances. He accordingly lacks any basis for
this Court to determine that he received ineffective assistance of counsel. In re C.M.C., ¶ 30.
¶33 Affirmed.
/S/ BRIAN MORRIS
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JIM RICE
9
10
|
01-03-2023
|
06-05-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/4516807/
|
03/16/2020
Case Number: DA 19-0652
IN THE SUPREME COURT OF THE STATE OF MONTANA
Supreme Court Cause No. DA 19-0652
John M. SHEA,
Plaintiff and Appellee,
-vs-
Order Granting
PAUL BABB, Appellant MMIA’s Unopposed
Defendant, Motion for Extension of Time to
File Reply Brief
MONTANA MUNICIPAL
INSURANCE AUTHORITY,
Defendant and Appellant,
and
JOHN DOES A-Z,
Defendants
Pursuant to Montana Rule of Appellate Procedure 26(1), Appellant Montana
Municipal Insurance Authority (MMIA) filed an unopposed motion for a 30-day
extension of time in which to file its reply brief. The brief is presently due March
26, 2020.
MMIA’s motion is GRANTED and its opening brief is now due on or before
April 27, 2020.
DATED this ______ day of March, 2020.
By:
2
Electronically signed by:
Bowen Greenwood
Clerk of the Supreme Court
March 16 2020
|
01-03-2023
|
03-16-2020
|
https://www.courtlistener.com/api/rest/v3/opinions/4516812/
|
Case: 19-40161 Document: 00515346037 Page: 1 Date Filed: 03/16/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-40161 March 16, 2020
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
RODOLFO RODRIGUEZ-LEOS,
Defendant - Appellant
Appeals from the United States District Court
for the Southern District of Texas
Before DENNIS, GRAVES, and WILLETT, Circuit Judges.
JAMES L. DENNIS, Circuit Judge:
Rodolfo Rodriguez-Leos appeals his sentence for unlawful possession of
ammunition by a person admitted to the United States under a nonimmigrant
visa. Rodriguez-Leos argues that he is entitled to a three-level reduction for
attempt under U.S.S.G. § 2X1.1(b)(1) because when he was arrested, he was
not about to complete all the acts necessary for the separate offense of
exportation of ammunition. We agree and accordingly VACATE Rodriguez-
Leos’s sentence and REMAND for resentencing.
I.
Rodriguez-Leos pleaded guilty to unlawful possession of ammunition, in
and affecting interstate and foreign commerce, by a person admitted to the
Case: 19-40161 Document: 00515346037 Page: 2 Date Filed: 03/16/2020
No. 19-40161
United States under a nonimmigrant visa. According to the presentence report
(PSR), federal agents conducting surveillance operations at the Academy
Sports and Outdoors store in McAllen, Texas, observed Rodriguez-Leos
purchase a case containing 520 rounds of 7.62 x 39mm caliber Monarch
ammunition and leave the store. A record check of the vehicle driven by
Rodriguez-Leos revealed that he entered the country at the Hidalgo Port of
Entry earlier that same day. Agents followed Rodriguez-Leos after he left
Academy and drove to a residence in McAllen. Rodriguez-Leos got out of his
vehicle with the box of ammunition, walked toward the front of the home out
of sight of the agents, and returned to his vehicle shortly thereafter without
the box. Rodriguez-Leos left, and a surveillance unit followed, while other
agents stayed behind to speak with the homeowner, who consented to a search.
Agents discovered and seized the box of ammunition concealed underneath a
bush near the front entrance of the home.
The surveillance unit followed Rodriguez-Leos to a used auto parts store
in nearby Hidalgo, Texas. There, the agents made contact with Rodriguez-
Leos and questioned him regarding the ammunition. After waiving his
Miranda rights, Rodriguez-Leos admitted that he had purchased the
ammunition for an individual named “El Chivo” and had left the ammunition
at the residence in McAllen because he did not want to have the ammunition
in his vehicle. He also acknowledged that he had purchased ammunition for
El Chivo twice during the previous month and received $50 each time. With
respect to the two prior occasions, Rodriguez-Leos told the agents that he met
El Chivo at the port of entry and received money to purchase ammunition, and
Rodriguez-Leos then purchased the ammunition. On the day of or the day after
each purchase, El Chivo called Rodriguez-Leos and instructed him to meet an
unidentified individual who drove a Dodge Caliber at the Whataburger
restaurant in Hidalgo. Rodriguez-Leos went to Whataburger and gave the
2
Case: 19-40161 Document: 00515346037 Page: 3 Date Filed: 03/16/2020
No. 19-40161
ammunition to the unknown male. At some point later, according to
Rodriguez-Leos, he understood that the male would smuggle, or recruit
someone else to smuggle, the ammunition into Mexico.
The PSR assigned Rodriguez-Leos a base offense level of 14 and a four-
level enhancement because Rodriguez-Leos possessed the ammunition “with
knowledge, intent, or reason to believe that it would be transported out of the
United States,” resulting in an offense level of 18. U.S.S.G. § 2K2.1(b)(6)(A).
However, because Rodriguez-Leos possessed the ammunition in connection
with another offense—namely, the exportation of ammunition without a valid
export license—the PSR applied the cross reference in § 2K2.1(c)(1), which
directs the use of § 2X1.1 if the resulting offense level is greater than previously
determined. This resulted in a base offense level of 26. §§ 2M5.2(a)(1),
2X1.1(a).
The Guidelines state that a three-level reduction under § 2X1.1(b)(1) is
warranted where the defendant attempted but did not complete the
substantive offense “unless the defendant completed all the acts the defendant
believed necessary for successful completion of the substantive offense or the
circumstances demonstrate that the defendant was about to complete all such
acts but for apprehension or interruption by some similar event beyond the
defendant’s control.” § 2X1.1(b)(1). The PSR stated the decrease was not
warranted because Rodriguez-Leos “completed all the acts necessary and, but
for the apprehension, was able to complete all the acts.”
Rodriguez-Leos objected in writing to the PSR, arguing primarily that
he did not know that El Chivo was involved in organized crime or that the
ammunition would be smuggled into Mexico. Because he did not know the
ammunition would be used in connection with another felony offense,
Rodriguez-Leos argued, he should not have received a four-level increase under
§ 2K2.1(b)(6), and the cross-reference provision should not have been utilized.
3
Case: 19-40161 Document: 00515346037 Page: 4 Date Filed: 03/16/2020
No. 19-40161
Rodriguez-Leos also argued that “[t]here is no evidence that [he] attempted
exportation of the ammunition,” and “[i]t can’t be said that [he] completed all
necessary acts under [§] 2X1.1(a).” Finally, Rodriguez-Leos asserted that he
was entitled to a two-level minor role reduction, and an additional two-level
reduction for acceptance of responsibility. § 3B1.2(b) (minor role); § 3E1.1(a)
(acceptance of responsibility).
At the sentencing hearing, the district court applied a three-level
reduction for acceptance of responsibility; with a new total offense level of 23,
Rodriguez’s guidelines range became 46 to 57 months. The district court then
addressed the evidence as it pertained to Rodriguez’s knowledge that the
ammunition was going to Mexico. After reviewing interview transcripts and
hearing from counsel, the court overruled Rodriguez’s objection, stating it was
“clear” from the transcripts of Rodriguez’s interviews with agents that he knew
the ammunition he possessed was going to be smuggled to Mexico. The district
court did not explicitly address Rodriguez’s objections to (1) the application of
the cross-reference, (2) the minor participant objection; or (3) the three-level
decrease based on Rodriguez-Leos not “complet[ing] all necessary acts under
[§] 2X1.1(a).” The court implicitly overruled these objections, however, by
adopting the PSR with one change concerning acceptance of responsibility.
The court sentenced Rodriguez-Leos within the guidelines range to 50 months
in prison; no term of supervised release was ordered. Rodriguez-Leos timely
filed a notice of appeal.
II.
In his sole issue on appeal, Rodriguez-Leos asserts that the district court
erred by failing to assign him a three-level reduction for attempt under
§ 2X1.1(b)(1) because there was no evidence that, before his arrest, he
completed or was actually about to complete all the acts that he believed were
4
Case: 19-40161 Document: 00515346037 Page: 5 Date Filed: 03/16/2020
No. 19-40161
necessary for the successful completion of the substantive exportation-of-
ammunition offense.
A.
Before we reach the merits, we must determine our standard of review.
We typically review the district court’s interpretation of the Guidelines de novo
and its factual findings for clear error. See United States v. Soto, 819 F.3d 213,
216 (5th Cir. 2016). However, if an appellant raises an objection for the first
time on appeal or raises an objection that is different from the one he raised in
the district court, review is limited to plain error. United States v. Rodriguez,
15 F.3d 408, 414-15 (5th Cir.1994); United States v. Medina-Anicacio, 325 F.3d
638, 643 (5th Cir. 2003).
“There is no bright-line rule for determining whether a matter was
raised below.” United States v. Soza, 874 F.3d 884, 889 (5th Cir. 2017) (quoting
United States v. Brown, 561 F.3d 420, 435 n.12 (5th Cir. 2009)) (cleaned up).
“If a party wishes to preserve an argument for appeal, the party must press
and not merely intimate the argument during the proceedings before the
district court.” Id. (quoting Dallas Gas Partners v. Prospect Energy Corp., 733
F.3d 148, 157 (5th Cir. 2013)) (alteration omitted). The objection must be
“sufficiently specific to alert the district court to the nature of the alleged error
and to provide an opportunity for correction.” United States v. Neal, 578 F.3d
270, 272 (5th Cir. 2009); see also United States v. Hernandez-Montes, 831 F.3d
284, 290 (5th Cir. 2015) (“Key is whether the objection is specific enough to
allow the court to take evidence and receive argument on the issue.”). “[T]he
objection and argument on appeal need not be identical; the objection need only
‘give the district court the opportunity to address’ the gravamen of the
argument presented on appeal.” United States v. Nesmith, 866 F.3d 677, 679
(5th Cir. 2017) (alteration and internal quotation marks omitted) (quoting
United States v. Garcia-Perez, 779 F.3d 278, 281-82 (5th Cir. 2015), overruled
5
Case: 19-40161 Document: 00515346037 Page: 6 Date Filed: 03/16/2020
No. 19-40161
on other grounds by United States v. Reyes-Contreras, 910 F.3d 169 (5th Cir.
2018)).
The Government argues that Rodriguez-Leos’s written objection to the
PSR arguing that “[t]here is no evidence that [he] attempted exportation of the
ammunition,” and “[i]t can’t be said that [he] completed all necessary acts
under [§] 2X1.1(a)” 1 was insufficient to preserve his argument on appeal. We
disagree.
1Paragraph 21 of the PSR stated, in full:
In this case, the defendant entered into an agreement with “El Chivo,” an
individual associated with organized crime, to purchase ammunition in
exchange for financial compensation with the knowledge that the ammunition
would be smuggled into Mexico. In the instant case, the defendant purchased
520 rounds of ammunition used for AK style assault rifles. Additionally, there
is no record that anyone involved secured a license to export the ammunition
to Mexico. Thus, the possession of ammunition would have the potential to
facilitate the felony offense of exportation of ammunition without a required
validated export license. Based on the defendant’s involvement in the
attempted exportation of ammunition without a required validated export
license, the base offense level for the offense is 26, pursuant to U.S.S.G. §
2M5.2(a)(1). It should be noted that there is no Specific Offense Characteristic
enhancement under U.S.S.G. § 2M5.2. The resulting offense level pursuant to
U.S.S.G. § 2M5.2 is 26, which is greater than the above determined offense
level of 18, pursuant to U.S.S.G. § 2K2.1. Therefore, the resulting offense level
pursuant to U.S.S.G. § 2X1.1(a), is 26. Pursuant, to U.S.S.G. § 2X1.1(b)(1), a
decrease is not warranted as the defendant completed all the acts necessary and,
but for the apprehension, was able to complete all the acts.
(emphasis added). In Rodriguez’s written objections, he stated in section 3 of 7:
Defendant objects page 7, paragraph 21 in that the agreement had nothing to
do with the criminal organization or if “EL CHIVO” was involved with said
criminal organization or associated with said organization. There is no
evidence that defendant attempted exportation of the ammunition it don’t
matter if without or with a valid export license. It can’t be said that defendant
completed all necessary acts under U.S.S.G. 2X1.1 (a). Apprehension or no
apprehension there is zero evidence to indicate that defendant did it with
knowledge or intent that the ammunition was going to Mexico. We would have
to make evidences up to come to that conclusion or make up a theory to support
a 4 level increase. A base level of 26 is not a warranted and therefore the base
level should be 14.
(emphasis added).
6
Case: 19-40161 Document: 00515346037 Page: 7 Date Filed: 03/16/2020
No. 19-40161
We first note that while Rodriguez-Leos cited the proper section of the
Guidelines—U.S.S.G. § 2X1.1—he cited subsection (a), whereas subsection (b)
is the subsection that is central to his argument. Subsection (b) instructs that
a three-level decrease for attempt applies “unless the defendant completed all
the acts the defendant believed necessary for successful completion of the
substantive offense,” while subsection (a) simply instructs that the base offense
level is determined by reference to the substantive offense. In quoting the
language from § 2X1.1(b) while citing § 2X1.1(a), Rodriguez-Leos addressed the
proper subsection in substance, but not in name.
We have previously held that an objection was preserved where the
defendant lodged a written objection and “did not specifically cite to the USSG
section which the PSR applied,” but used terminology identical to that used in
the portion of the Guidelines the defendant was challenging. United States v.
Ocana, 204 F.3d 585, 589, 589 n.2 (5th Cir. 2000) (defendant’s written objection
“that the information in the [PSR] is not relevant conduct” sufficiently notified
district court that defendant was objecting to base-level adjustment for her role
in the offense). Similarly, in United States v. Neal, we concluded that an error
was preserved where the defendant stated in writing that he “object[ed] to the
Probation Office’s finding that, pursuant to U.S.S.G. § 4B1.4(A), defendant
should be considered an armed career criminal in that he used or possessed a
firearm or ammunition in connection with a crime of violence or controlled
substance offense as defined in U.S.S.G. § 4B1.2(a).” 578 F.3d at 272. On
appeal, the defendant argued that “simple possession of drugs is not a
‘controlled substance offense’ for purposes of the Guidelines enhancements in
§ 4B1.4(b)(3) & (c)(2),” which he “never specifically alleged” in the district court.
Id. Moreover, the district court construed defendant’s objection as a factual
one, “objecting solely to the proximity of the drugs,” not a legal objection as to
whether the simple possession of drugs was a controlled substance offense as
7
Case: 19-40161 Document: 00515346037 Page: 8 Date Filed: 03/16/2020
No. 19-40161
defined by the Guidelines. Id. The defendant did not clarify the basis of his
objection after the district court’s initial response. Id. Still, we concluded that
“[w]hile Neal could certainly have been more clear and more persistent in
raising an objection based on the definition of ‘controlled substance offense,’ . .
. his actions were sufficient to preserve error.” Id. at 272-73.
Here, the application of § 2X1.1(b)(1) turns entirely on whether “the
defendant completed all the acts the defendant believed necessary for
successful completion of the substantive offense or [whether] the
circumstances demonstrate” that he was “about to” complete all such acts
before he was apprehended. Therefore, in arguing to the district court that he
did not complete all necessary acts and citing § 2X1.1, Rodriguez-Leos was
arguing to the district court that he was entitled to a three-level reduction. Cf.
Ocana, 204 F.3d at 588-89 (defendant’s written objection “that the information
in the [PSR] is not relevant conduct” sufficiently notified district court that
defendant was objecting to base-level adjustment for her role in the offense).
This argument was “sufficiently specific to alert the district court to the nature
of the alleged error and to provide an opportunity for correction.” Neal, 578
F.3d at 272.
The Government indicated at oral argument that Rodriguez-Leos could
have pressed this written objection at sentencing. While this is true, such a
lack of persistence is not fatal to Rodriguez-Leos’s argument being preserved,
as “once a party raises an objection in writing, if he subsequently fails to lodge
an oral on-the-record objection, the error is nevertheless preserved for appeal.”
United States v. Medina-Anicacio, 325 F.3d 638, 642 (5th Cir. 2003); see also
Neal, 578 F.3d at 273 (“The central inquiry is the specificity and clarity of the
initial objection, not the defendant’s persistence in seeking relief.”).
In sum, we conclude that Rodriguez-Leos’s written objection that “[i]t
can’t be said that defendant completed all necessary acts under [§] 2X1.1(a)”
8
Case: 19-40161 Document: 00515346037 Page: 9 Date Filed: 03/16/2020
No. 19-40161
was “sufficiently specific to alert the district court to the nature of the alleged
error and to provide an opportunity for correction,” Neal, 578 F.3d at 272, and
“‘g[a]ve the district court the opportunity to address’ the gravamen of the
argument presented on appeal,” Nesmith, 866 F.3d at 679 (quoting Garcia-
Perez, 779 F.3d at 281-82). We therefore conclude that Rodriguez’s challenge
was properly preserved.
B.
Because Rodriguez-Leos properly preserved this argument, we review
the district court’s finding that he was not entitled to the three-level reduction
for clear error. See Soto, 819 F.3d at 216 (district court’s statement, for
purposes of U.S.S.G. § 2X1.1, “that a defendant had completed all acts believed
necessary for completion of the offense is a factfinding” (alteration omitted)).
To prevail, Rodriguez-Leos must show that the finding is “implausible in light
of the record as a whole.” United States v. Griffith, 522 F.3d 607, 611-12 (5th
Cir. 2008). The standard is “deferential,” and we “will conclude that a finding
of fact is clearly erroneous only if a review of all the evidence leaves us ‘with
the definite and firm conviction that a mistake has been committed.’” United
States v. Rodriguez, 630 F.3d 377, 380 (5th Cir. 2011) (quoting United States
v. Castillo, 430 F.3d 230, 238 (5th Cir. 2005)).
In the case of an attempt offense, the Guidelines direct that the offense
level should be decreased by three “unless the defendant completed all the acts
the defendant believed necessary for successful completion of the substantive
offense or the circumstances demonstrate that the defendant was about to
complete all such acts but for apprehension or interruption by some similar
9
Case: 19-40161 Document: 00515346037 Page: 10 Date Filed: 03/16/2020
No. 19-40161
event beyond the defendant’s control.” U.S.S.G. § 2X1.1(b)(1). 2 The
background note to § 2X1.1 explains this adjustment:
In most prosecutions for conspiracies or attempts, the substantive
offense was substantially completed or was interrupted or
prevented on the verge of completion by the intercession of law
enforcement authorities or the victim. In such cases, no reduction
of the offense level is warranted. Sometimes, however, the arrest
occurs well before the defendant or any co-conspirator has
completed the acts necessary for the substantive offense. Under
such circumstances, a reduction of 3 levels is provided under
§ 2X1.1(b)(1) or (2).
§ 2X1.1, cmt. (backg’d). The issue in this case, therefore, is not whether
Rodriguez-Leos is guilty and will be punished. Instead, the question is
whether he is entitled to a reduction for not “substantially complet[ing]” or
being “on the verge of completi[ng]” the offense of exporting ammunition
without a valid license. Id.
In United States v. Waskom, we explained that determining whether a
reduction under § 2X1.1(b) is warranted “necessarily requires a fact-specific
inquiry” that “resists a precise standard” and, in providing guidance to the
inquiry, set forth four 3 non-exhaustive principles to guide district courts: (1)
“focus[] on the substantive offense and the defendant’s conduct in relation to
that specific offense”; (2) no reduction is required “for a conspirator who has
made substantial progress in his criminal endeavor simply because a
2 Section 2X1.1(b)(2) contains a provision for conspiracies that parallels the attempt
provision in § 2X1.1(b)(1). The Government argues Rodriguez’s offense conduct is best
described as a conspiracy, not an attempt. In an analogous situation, we noted the “nearly
identical” language in the two subsections of § 2X1.1(b) and stated that we would only address
the attempt subsection (rather than the conspiracy subsection, as urged by Government
counsel at oral argument), because, inter alia, “the difference is immaterial to the outcome in
this case.” Soto, 819 F.3d at 217 n.3. We take the same approach here.
3 Waskom set forth a fifth consideration, but following an amendment to the
Guidelines, only four considerations remain applicable. United States v. John, 597 F.3d 263,
283 (5th Cir. 2010).
10
Case: 19-40161 Document: 00515346037 Page: 11 Date Filed: 03/16/2020
No. 19-40161
significant step remains before commission of the substantive offense becomes
inevitable”; (3) a defendant is entitled to the reduction unless “the
circumstances . . . demonstrate that the balance of the significant acts
completed and those remaining tips toward completion of the substantive
offense,” considering the quality, not just the quantity, of the completed and
remaining acts; and (4) “consider the temporal frame of the scheme and the
amount of time the defendant would have needed to finish his plan, had he not
been interrupted” because “[a]s the completion of the offense becomes more
imminent, the reduction will become less appropriate.” 179 F.3d 303, 308-09
(5th Cir. 1999) (citations omitted); see also Soto, 819 F.3d at 217-18 (applying
Waskom considerations to the attempt reduction under § 2X1.1(b)(1)).
We previously found clear error in a district court’s denying a three-level
reduction under § 2X1.1(b)(1) where “all [the defendant] had done was buy
ammunition and put it in his car” three days prior to his arrest, and there was
no evidence as to when the defendant planned to deliver the ammunition. Soto,
819 F.3d at 215, 218-20. The scheme in Soto was similar to the arrangement
here: There, the defendant, Soto, had purchased the ammunition for someone
named Compadre, Compadre had given him the money to buy the ammunition,
the ammunition was destined for Mexico, and this was the second time Soto
had purchased ammunition for Compadre. Id. at 214-15. Soto was on his way
home from his mother’s house when he was pulled over for a traffic violation
and arrested after the ammunition was found in his vehicle’s trunk. Id. at 215,
219. We held that the district court’s finding that Soto “was on the verge of
delivering the ammunition to [his co-conspirator]” was clearly erroneous
because at the time of his arrest, the defendant was on his way home from his
mother’s house, and the sentencing documents “were silent as to the ‘temporal
frame of the scheme.’” Id. (quoting Waskom, 179 F.3d at 308).
11
Case: 19-40161 Document: 00515346037 Page: 12 Date Filed: 03/16/2020
No. 19-40161
Similar to Soto, “all [Rodriguez-Leos] had done was buy ammunition.”
Id. at 220; see also id. at 219 (rejecting government’s contention that
“purchasing the ammunition was the most significant step in exporting the
ammunition and the only remaining step for [the defendant] was to give the
ammunition to [his co-conspirator]”). Moreover, at the time of his arrest,
Rodriguez-Leos was not en route to deliver the ammunition; he was shopping
at an auto parts store. See id. at 214-15, 220 (“No evidence before the district
court supported its finding that Soto was en route to deliver the ammunition
for smuggling to Mexico when he was arrested.”). And unlike Soto, Rodriguez-
Leos did not even have possession of the ammunition at the time of his arrest.
Further, there is no definitive evidence of a temporal timeframe here.
The evidence based on previous encounters suggests only a possible timeframe.
Rodriguez-Leos admitted to the agents that with his first purchase of
ammunition, he received a call from El Chivo and delivered the ammunition
on the same day he purchased it, 4 and he stated in his acceptance-of-
responsibility letter that he was supposed to receive a phone call from El Chivo
when he got to the Academy store. There was some evidence in the record,
however, that for the second purchase, El Chivo might have called Rodriguez-
Leos the day after he made the purchase. In his interview with agents prior
to his arrest, the agent asked Rodriguez-Leos whether El Chivo was waiting
for him to deliver the ammunition, and Rodriguez-Leos responded, “No no, . . .
sometimes he calls me today, calls me tomorrow,” and later explained that El
Chivo “always takes one or two days to call.” Therefore, the record does not
show with clarity when El Chivo would have called Rodriguez-Leos or when
4While the Government contends that the “delivery occurred later on that day” with
the second purchase, the record is not so clear. The record indicates only that the delivery to
the Whataburger took place around 7:00 or 8:00 p.m.; it does not indicate that Rodriguez-
Leos purchased the ammunition earlier that day.
12
Case: 19-40161 Document: 00515346037 Page: 13 Date Filed: 03/16/2020
No. 19-40161
the crime would have been completed had the officers not seized the
ammunition and arrested Rodriguez-Leos.
Considering the language of the guidelines, the Waskom factors, and our
decision in Soto, we conclude that the district court clearly erred in finding that
Rodriguez-Leos “completed all the acts necessary and, but for the
apprehension, was able to complete all the acts” necessary for completion of
the substantive offense of the exportation of ammunition. See § 2X1.1(b)(1);
Soto, 819 F.3d at 219. Significantly, this is not a case in which the defendant
had actual possession of the ammunition and was on his way to deliver it to
another person. Here, the agents apprehended Rodriguez-Leos “well before
[he] or any co-conspirator ha[d] completed the acts necessary for the
substantive offense,” so that it cannot be said that the offense was “on the verge
of completion.” § 2X1.1, cmt. (backg’d).
The Waskom factors support our conclusion. First, the completion of the
exportation offense was not “inevitable” but for one remaining significant step.
See Waskom, 179 F.3d at 308 (no reduction required “for a conspirator who has
made substantial progress in his criminal endeavor simply because a
significant step remains before commission of the substantive offense becomes
inevitable”); cf. United States v. Torres-Vazquez, 770 F. App’x 164, 167 (5th Cir.
2019) (finding no clear error in the district court’s declining to apply the
reduction where the defendant had made substantial progress toward
completing the substantive offense of alien smuggling and “the only step
remaining was the actual transportation of the undocumented individuals”). 5
5 The dissent relies on Torres-Vazquez to support the proposition that Rodriguez is
ineligible for the § 2X1.1(b) reduction. Besides providing only persuasive authority, we find
Torres-Vasquez distinguishable. When Torres-Vasquez was arrested, he had arranged to
pick up the individuals in a hotel parking lot and was in the process of looking for them to
transport them across the border. Here, Rodriguez-Leos was not in the process of retrieving
13
Case: 19-40161 Document: 00515346037 Page: 14 Date Filed: 03/16/2020
No. 19-40161
As explained in further detail below, several significant steps remained before
commission of the exportation offense became inevitable.
Second, completion of the exportation offense was not “imminent.” See
Waskom, 179 F.3d at 308 (instructing courts to consider “the amount of time
the defendant would have needed to finish his plan, had he not been
interrupted” and “the reduction will become less appropriate” “[a]s the
completion of the offense becomes more imminent”). Rodriguez-Leos needed a
significant amount of time to finish his plan, given that he had to receive and
answer a call from El Chivo that was expected to come at some point that day
or the next day, drive from Hidalgo to McAllen to recover possession of the
ammunition, and drive back to Hidalgo to deliver the ammunition.
And finally, in both quantity and quality, the balance of the significant
acts completed and those remaining does not tip toward completion of the
substantive offense. See Waskom, 179 F.3d at 308 (explaining that “the
circumstances must demonstrate that the balance of the significant acts
completed and those remaining tips toward completion of the substantive
offense” “in order to support a denial of the reduction under § 2X1.1(b)(2)”
(emphasis added)). When Rodriguez-Leos was arrested, only the first two steps
of the scheme had been completed: he had met El Chivo at the port of entry to
collect money to purchase ammunition and had purchased the ammunition.
The completion of Rodriguez-Leos’s portion of the offense was dependent on
several things that had not yet occurred. El Chivo had to call and instruct
Rodriguez-Leos regarding when and where to deliver the ammunition. 6 Even
after securing such instructions, Rodriguez-Leos would have had to decide to
or delivering the ammunition when he was apprehended; instead, he was shopping at a used
auto parts store.
6 The record does not indicate that Rodriguez-Leos had received a phone call from El
Chivo.
14
Case: 19-40161 Document: 00515346037 Page: 15 Date Filed: 03/16/2020
No. 19-40161
carry them out: he had to drive from Hidalgo to McAllen, 7 recover possession
of the ammunition, and then, if this delivery was to be similar to the prior two,
drive from McAllen to the Hidalgo Whataburger to deliver the ammunition to
an unidentified individual. And of course, the final step—delivery of the
ammunition—depended on the unidentified person meeting Rodriguez-Leos at
the Whataburger and receiving the delivery of the ammunition.
The district court’s finding that Rodriguez-Leos was “about to” complete
or “on the verge of” completing all the acts by him and his co-conspirators
necessary for completion of the exportation offense but for his apprehension,
see § 2X1.1(b)(1), id. cmt. (backg’d), leaves us “with the definite and firm
conviction that a mistake has been committed.” Rodriguez, 630 F.3d at 380
(quoting Castillo, 430 F.3d at 238); see Soto, 819 F.3d at 219-20; Waskom, 179
F.3d at 308-09 (explaining that “the question is only whether [defendants] were
‘about to’” complete all acts they thought necessary to commit the substantive
offense). Rodriguez-Leos was arrested “well before [he] or any [of his] co-
conspirator[s] ha[d] completed the acts necessary for the substantive offense.”
§ 2X1.1, cmt. (backg’d).
For the foregoing reasons, we VACATE Rodriguez-Leos’s sentence and
REMAND for resentencing.
7 While the record reveals that these towns neighbor each other, it does not reveal how
far the home in McAllen was from the used auto parts store or the Whataburger.
15
Case: 19-40161 Document: 00515346037 Page: 16 Date Filed: 03/16/2020
No. 19-40161
DON R. WILLETT, Circuit Judge, dissenting:
My review of the record does not “leave[] [me] ‘with the definite and firm
conviction that a mistake has been committed’ ” by the district court. 1 So I must
respectfully dissent.
* * *
As a preliminary matter, I disagree with the majority opinion’s
determination that we should review for clear error instead of plain error.2
Rodriguez-Leos’s claim on appeal is that the district court erred in failing to
apply a 3-level reduction to his sentence. But Rodriguez-Leos never argued for
such a reduction before the district court. Sure, “[t]here is no bright-line rule
for determining whether a matter was raised below,” but a party wishing to
preserve an argument for appeal “must press and not merely intimate the
argument during the proceedings before the district court.” 3 For an argument
to be adequately pressed, “[t]he raising party must present the issue so that it
places the opposing party and the court on notice that a new issue is being
raised” and the district court must have an opportunity to rule on it. 4
Rodriguez-Leos’s objection to Paragraph 21 of the PSR reflects an
objection to the imposition of a base-level increase, not to the omission of a 3-
level decrease. Tellingly, the only language that could be said to have preserved
1 United States v. Rodriguez, 630 F.3d 377, 380 (5th Cir. 2011) (quoting United States
v. Castillo, 430 F.3d 230, 238 (2005)).
2In addition to demonstrating that the district court’s error was clear or obvious, plain
error review requires Rodriguez-Leos to also demonstrate that the error affected his
substantial rights. See Puckett v. United States, 556 U.S. 129, 135 (2009). If he makes such a
showing, we may then exercise our discretion to remedy the error, but only if the error
“seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.” Id.
(internal quotations omitted).
3 United States v. Soza, 874 F.3d 884, 889 (5th Cir. 2017) (internal quotations and
alterations omitted).
4 Id. (internal quotations omitted).
16
Case: 19-40161 Document: 00515346037 Page: 17 Date Filed: 03/16/2020
No. 19-40161
Rodriguez-Leos’s claim for appeal is the statement that “[i]t can’t be said that
defendant completed all necessary acts under U.S.S.G. 2X1.1(a).” But the
section of the sentencing guidelines that authorizes a sentence reduction is
§ 2X1.1(b)(1), 5 to which Rodriguez-Leos makes no reference.
The majority opinion concludes that Rodriguez-Leos merely cited the
wrong subsection of U.S.S.G. § 2X1.1, and because he “quot[ed] the language
from § 2X1.1(b) while citing § 2X1.1(a), [he] addressed the proper subsection in
substance, but not in name.” 6 Though we have excused similar blunders in
other cases, 7 the circumstances here do not warrant the same result. The
entirety of Rodriguez-Leos’s objection to Paragraph 21 concerns why the
district court should not impose an enhancement to his sentence—arguing that
§ 2X1.1 should not apply at all. In the context of the objection, Rodriguez-Leos
seems to have been arguing that the court should not impose the enhancement
because he did not actually complete the offense. His objection on appeal is
materially different. He no longer contests that § 2X1.1 should apply; he now
believes that under that section—the one he previously rejected being
applicable—he should receive a 3-level reduction. Because Rodriguez-Leos did
not raise this issue in the district court with sufficient specificity, 8 and
certainly did not press the argument, I would review his claim for plain error.
5U.S.S.G. § 2X1.1(b)(1) (“If an attempt, decrease by 3 levels, unless the defendant
completed all the acts the defendant believed necessary for successful completion of the
substantive offense or the circumstances demonstrate that the defendant was about to
complete all such acts but for apprehension or interruption by some similar event beyond the
defendant's control.”).
6 Maj. Op. at 7.
7 See United States v. Ocana, 204 F.3d 585, 589, 589 n.2 (5th Cir. 2000); United States
v. Neal, 578 F.3d 270, 272 (5th Cir. 2009).
8 See Neal, 578 F.3d at 272.
17
Case: 19-40161 Document: 00515346037 Page: 18 Date Filed: 03/16/2020
No. 19-40161
But even assuming that Rodriguez-Leos did preserve this issue for
appeal, he has not demonstrated clear error on the part of the district court. A
district court’s factual determination is not clearly erroneous, “[u]nless the
factual finding is implausible in light of the record as a whole.” 9 This
“deferential” standard of review prohibits us from overturning a district court
simply because we would have weighed the evidence differently or reached a
different conclusion if we had been sitting as the trier of fact. 10 To the contrary,
we may only find clear error “if a review of all the evidence leaves us with the
definite and firm conviction that a mistake has been committed.” 11
Here, the majority opinion’s balance of factors demonstrates a “close
call”: two steps completed, three steps remaining; some evidence that the drop-
off would occur the same day, some evidence it would occur the next day;
certain similarities to Soto, key distinctions from Soto. And it is this closeness
that forecloses “the definite and firm conviction” necessary to find clear error
and reverse the district court.
The parties reference two cases to guide our review: Soto 12 and Torres-
Vazquez. 13 In Soto, we concluded that the district court committed clear error
in failing to provide a 3-level reduction where (1) the defendant had not
delivered the ammunition to his co-conspirator; (2) there was no evidence
regarding the arrangements or plans for making such a delivery; (3) the
ammunition was in the truck at the time of his arrest, but there was no
evidence to contradict his testimony that he was simply driving to his mother’s,
9 United States v. Griffith, 522 F.3d 607, 612 (5th Cir. 2008) (emphasis added).
10 Rodriguez, 630 F.3d at 380.
11 Id. (internal quotation omitted).
12 United States v. Soto, 819 F.3d 213 (5th Cir. 2016).
13 United States v. Torres-Vazquez, 770 F. App’x 164 (5th Cir. 2019) (unpublished).
18
Case: 19-40161 Document: 00515346037 Page: 19 Date Filed: 03/16/2020
No. 19-40161
not heading to a delivery; and (4) even though Soto had made a delivery once
before, there was no evidence of the circumstances of that transaction to
provide information about the likely circumstances of the incomplete
transaction. 14
In Torres-Vazquez, on the other hand, we concluded that the district
court did not err in finding that the defendant was about to commit the
attempted offense. 15 There, Torres-Vazquez had taken substantial steps
toward transporting undocumented individuals across the border into Texas,
but he had not actually completed the crime. 16 At the time of his arrest, Torres-
Vazquez did not have the individuals in his vehicle; he had made arrangements
to pick them up in a hotel parking lot and was in the process of looking for
them when he encountered border patrol officers. These circumstances, the
panel concluded, demonstrated that “Torres-Vazquez’s offense was
‘interrupted or prevented on the verge of completion by the intercession of law
enforcement authorities.’ ” 17
This case is not on all fours with either Soto or Torres-Vazquez, again
demonstrating the closeness of the question before us. Certainly, it is tempting
to conclude that the facts are more similar to Soto because our case involves
the same crime, but the circumstances diverge on key points. For instance, in
Soto, the defendant had purchased the ammunition three days prior to his
arrest, and there was no information regarding when delivery would actually
be made. In this case, however, Rodriguez-Leos had purchased the ammunition
that morning and was expecting to make the delivery that same day or evening
14 Soto, 819 U.S. at 219.
15 770 F. App’x at 167.
16 Id.
17 Torres-Vazquez, 770 F. App’x at 167 (quoting § 2X1.1, cmt. backg’d).
19
Case: 19-40161 Document: 00515346037 Page: 20 Date Filed: 03/16/2020
No. 19-40161
based on his prior experiences with delivering ammunition to El Chivo. 18
Rodriguez-Leos also knew he would hand off the ammunition in the parking
lot of the Jackson Street Whataburger and that he would likely deliver it to an
individual driving a Dodge Caliber. Unlike in Soto, where the court was
persuaded by the lack of information regarding a potential delivery, Rodriguez-
Leos here had all the information he needed except for the exact time. And he
was expecting a phone call with that detail at any moment. 19
Despite these glaring distinctions between our case and Soto, specifically
that two of the four factors that persuaded the Soto court favor the opposite
result in our case, the majority opinion finds clear error. To do so, it takes great
strides to count the number of steps remaining, which, in its view, amounts to
three: (1) receive and answer a call from El Chivo; (2) drive from Hidalgo to
McAllen to retrieve the ammunition; and (3) drive from McAllen to the Hidalgo
Whataburger to deliver the ammunition. 20 But the “quantity” of steps
completed or remaining is just one subfactor of the four-factor inquiry set forth
in United States v. Waskom. 21 We are cautioned against giving undue weight
18 The majority opinion avers that “the record is not so clear” as to whether Rodriguez-
Leos previously delivered the ammunition on the same day or the next day because “[t]he
record only indicates that the [second] delivery to the Whataburger took place around 7:00
or 8:00 p.m.; it does not indicate that Rodriguez-Leos purchased the ammunition earlier that
day.” Maj. Op. at 12 & n.4. Assuming there is ambiguity in the record, the parties’ briefs on
appeal are not so unclear. In its brief, the Government twice stated that Rodriguez-Leos made
his second delivery on the same day that he purchased the ammunition (at 7:00 or 8:00 p.m.
that evening). And Rodriguez-Leos, represented by competent counsel, made no effort to
refute this assertion in his reply brief. I would not be so quick to cry ambiguity where the
defendant himself does not refute the Government’s statement of facts.
19The majority opinion seems to doubt whether Rodriguez-Leos was expecting the
phone call from El Chivo that day or the next, see Maj. Op. at 12–13, but Rodriguez-Leos
himself seemed confident that El Chivo would ring any minute and, in fact, told the district
court that he had expected to receive the phone call when he got to the Academy to buy
ammunition.
20 Maj. Op. at 14.
21 179 F.3d 303, 308–09 (1999) (instructing courts to look at the circumstances,
considering the quality, not just the quantity, of the completed and remaining acts); see also
20
Case: 19-40161 Document: 00515346037 Page: 21 Date Filed: 03/16/2020
No. 19-40161
to step-counting quantity alone, lest inventive arithmetic yield a preferred
number of “significant steps.” Certainly, Rodriguez-Leos had to retrieve the
ammunition from its hiding spot—a delay of his own creation—before he could
drive it to the Whataburger. He also had to put his key in the ignition and turn
the car on. The number of remaining steps is just one consideration of many,
in part because step-counting is no hard science, yet this is the basket holding
all the majority opinion’s eggs.
If counting steps is our true guide, then Torres-Vazquez provides a clear
answer here. Torres-Vazquez had completed only two steps (just like
Rodriguez-Leos): he’d made arrangements to pick up undocumented
individuals in a parking lot, and he’d driven to the parking lot. Three steps
remained (just like for Rodriguez-Leos): he needed to find the individuals, load
them into his car, and drive them across the border. But, because the number
of significant steps completed and remaining are in the eye of the counter, we
must consider the circumstances holistically to answer whether a defendant
was “about to” complete the crime in question. In reality, Torres-Vazquez, just
like Rodriguez-Leos, had completed all of the necessary acts except for the
actual drop-off, which Rodriguez-Leos had planned to do that same day but for
the interception of law enforcement. 22 He had the who, the what, and the
where; he was just waiting for the imminent “when.”
United States v. John, 597 F.3d 263, 283 (5th Cir. 2010) (clarifying that only four of the five
Waskom factors remain effective).
22 The majority opinion claims that Rodriguez-Leos could not have been “about to”
complete his portion of the offense, in part, because “the final step—delivery of the
ammunition—depended on the unidentified person meeting Rodriguez-Leos at the
Whataburger and receiving the delivery of the ammunition.” Maj. Op. 15. Likewise, the
completion of Torres-Vazquez’s crime depended on the undocumented aliens actually
showing up, entering his vehicle, and staying with the plan until they reached the border.
Yet we still found that the district court did not clearly err in declining to reduce Torres-
Vazquez’s sentence because, under the totality of the circumstances, its determination was
plausible.
21
Case: 19-40161 Document: 00515346037 Page: 22 Date Filed: 03/16/2020
No. 19-40161
Whether Rodriguez-Leos was “about to” deliver the ammunition to El
Chivo’s men is a close question, but on balance the district court’s conclusion
is plausible. And if the district court’s conclusion is plausible, we cannot
possess the definite and firm conviction necessary to overturn it.
I respectfully dissent.
22
|
01-03-2023
|
03-17-2020
|
https://www.courtlistener.com/api/rest/v3/opinions/3359620/
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION
The defendant, Edna G. Mills, has attempted to set up special defenses to the suit on a note which, apparently, are grounded on the status of the defendant as an accommodation guarantor and the existence of a mortgage and other security securing the principal's debt. Quite simply, the court is, at present, unable to ascertain the exact nature of the special defenses as presently pled. In this circumstance, since the plaintiff may require the defendant to more specifically plead the special defenses, the court will deny the motion to strike without CT Page 9920 prejudice to the plaintiff seeking such clarification and reasserting its motion to strike.
McDONALD, J.
|
01-03-2023
|
07-05-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/3359621/
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
MEMORANDUM OF DECISION ON SUMMARY JUDGMENT CT Page 565
This action is the defendant's, Mercedes-Benz of North America, Inc. (hereinafter "Mercedes"), motion for summary judgment on counts three, four, nine and ten of the plaintiffs' complaint. The plaintiffs consist of four individuals (hereinafter the "individual plaintiffs") and the individual plaintiffs' corporate identity, Trans-Oceanic Motors Ltd. (hereinafter "Trans-Oceanic").
FACTS
On or about October 24, 1989, two of the individual plaintiffs, John P. Lanza and Michael A. Rakosky entered into a written buy/sell agreement to acquire the assets of a Mercedes-Benz automobile dealership owned by T.N.M. Lathrop, Inc. (hereinafter "Lathrop") under a franchise contract with Mercedes. Lanza and Rakosky entered into this agreement as trustees for themselves and two other individual plaintiffs, Michael D. Smith and Stanley Cardinal. The individual plaintiffs' rights were transferred to their corporate nominee, Trans-Oceanic. The agreement was contingent upon Mercedes' approval of the plaintiffs' application for the franchise.1
It is undisputed that on November 9, 1989 attorneys for Mercedes, Lathrop and the individual plaintiffs met. The plaintiffs allege that at the meeting, Mercedes orally agreed to diligently process the plaintiffs' application and to not unreasonably withhold its approval. The plaintiffs allege that there was also an implied agreement that Mercedes would exercise good faith and deal fairly with the plaintiffs in regard to its processing and consideration of said application. The plaintiffs further allege that Mercedes agreed not to entertain any other applications for the Lathrop franchise for a ninety day period. In consideration of these alleged agreements, the plaintiffs allege that they agreed that they would not seek the intervention of the Bankruptcy Court in the proposed sale of the franchise.
Subsequent to the November 9, 1989 meeting, Mercedes provided the plaintiffs with application materials. CT Page 566 The plaintiffs completed the application and submitted it to Mercedes. Mercedes then informed the that the proposed franchise name had to be changed and advised the plaintiffs to modify the financial information submitted. The plaintiff's resubmitted their application to Mercedes with the suggested modifications. On February 8, 1990 Mercedes rejected the plaintiffs' application.
On August 4, 1990, the plaintiffs filed an amended complaint in ten counts against Mercedes. There are five causes of action in these ten counts. Counts one, three, five, seven and nine assert causes of action for breach of contract, violation of General Statutes 42-133cc(10) of the Connecticut Franchise Act (hereinafter the "franchise act"), fraudulent and negligent conduct, violation of the Connecticut Unfair Trade Practices Act and tortious interference with contract rights, respectively. These five counts are being brought on the basis that the alleged agreement of November 9, 1989 was between Mercedes, Lathrop and the plaintiffs. Count two, four six, eight and ten also assert causes of action for breach of contract, violation of General Statutes 42-133cc(10) of the Connecticut Franchise Act, fraudulent and negligent conduct, violation of the Connecticut Unfair Trade Practices Act and tortious interference with contract rights, respectively. As compared to count one, three, five, seven and nine, these counts are asserted on the alternative theory that the November 9, 1989 agreement was between Lathrop and Mercedes and that the plaintiffs are third party beneficiaries of the alleged agreement.
On September 14, 1992, the defendant filed a motion for summary judgment on counts three, four, nine and ten. On September 14, 1992, the defendant filed a memorandum of law in support of its motion for summary judgment. In it the defendant argues that the court should grant summary judgment as to counts three and four, which allege a violation of the franchise act, because the plaintiffs do not have standing as mere prospective franchisors to bring an action under the act. As to count nine, the defendant argues that summary judgment is appropriate as to the individual plaintiffs because the individual plaintiffs assigned their rights to Trans-Oceanic and therefore no longer have justiciable interest in the controversy. The defendant argues in the alternative that the allegations for tortious interference CT Page 567 set forth in counts nine and ten fail to state a cause of action for which relief can be granted because the defendant is a party to the contract with which the defendant allegedly interfered. The defendant further argues that it was legally privileged to reject the plaintiffs' application. Therefore, summary judgment on counts nine and ten is appropriate as to all the plaintiffs.
On October 29, 1992, the plaintiffs filed a memorandum of law in opposition to the motion for summary judgment. On November 11, 1992, the defendant filed a reply to the plaintiffs' memorandum.
DISCUSSION
Pursuant to Practice Book 384, summary judgment is appropriate where the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as matter of law. Lees v. Middlesex Ins. Co.,219 Conn. 644, 650, 594 A.2d 592 (1991). "The party moving for summary judgment bears the burden of proving the absence of a dispute as to any material fact." Nolan v. Borkowski,206 Conn. 495, 500, 538 A.2d 1031 (1988). The court must view the evidence in the light most favorable to the nonmovant. Id. Once the moving party has presented evidence in support of the motion for summary judgment, the opposing party must present evidence that demonstrates the existence of a material fact in dispute. State v. Gogin, 208 Conn. 606,616, 546 A.2d 250 (1978). A material fact is a fact which will make a difference in the outcome of the case. Id.
A. Counts three and four.
In count three, the plaintiffs allege that:
[On or about November 9, 1989] . . . there was an agreement between Lathrop, Mercedes-Benz and the individual plaintiffs acting by and through their respective attorneys, that the individual plaintiffs and the proposed corporate nominee would file an application with Mercedez-Benz to operate the franchise, that Mercedes-Benz would diligently CT Page 568 process said application and would not unreasonably withhold its approval; and there was an implied covenant that Mercedes-Benz would exercise good faith and deal fairly with regard to its processing and consideration of said application.
The defendant Mercedez-Benz, in breach of its obligations pursuant to General Statutes 42-133cc(10), unreasonably withheld its consent to the sale of the franchise to the plaintiffs who were qualified buyers capable of being licensed as a Mercedes-Benz dealer and by letter dated February 8, 1990 rejected the plaintiffs' application.
Based on these allegations, the plaintiffs assert a cause of action under General Statutes 42-133cc(10). In count four, argued in the alternative, the plaintiffs allege that the November 9, 1989 agreement referenced above was between Lathrop and Mercedes and the plaintiffs were third party beneficiaries to this agreement. As in count three, the plaintiffs allege the breach of this agreement as the basis for their cause of action under General Statutes42-133cc(10).
To sum up, the plaintiffs' cause of action for the alleged violation of General Statutes 42-133cc(10) is based not on the buy/sell agreement between themselves and Lathrop. Rather, the plaintiffs' claim is based on Mercedes' alleged breach of the alleged verbal agreement of November 9, 1989 wherein Mercedes is alleged to have promised to use good faith and reasonableness in Mercedes consideration of the plaintiffs' application. The plaintiffs allege that they were either a direct party to the agreement of November 9, 1989 or (count three) or a third party beneficiary of the agreement (count four) and that the breach of said agreement gave rise to their cause of action in both counts.
General Statutes 42-133cc(10) provides:
No manufacturer or distributor shall: . . . (10) Unreasonably withhold CT Page 569 consent to the sale, transfer or exchange of the franchise to a qualified buyer capable of being licensed as a dealer;. . .
General Statute 42-133ee further provides:
Notwithstanding the terms, provisions or conditions of any agreement or franchise . . . any consumer who is injured by a violation of sections 42-133r to 42-133ee, inclusive, or any party to a franchise who is so injured in his business or property by a violation of said sections relating to that franchise, or any person so injured because he refuses to accede to a proposal for an arrangement which, if consummated would be in violation of said sections, may bring a civil action in the superior court to enjoin further violations, and to recover the actual damages sustained by him together with the cost of the suit, including a reasonable attorney's fee.
The court finds first that the statutory language of 42-133ee is clear and unambiguous as to who may bring an action for a violation of General Statutes 42-133cc(10): (1) consumers; (2) parties to a franchise; and (3) any person so injured because he refuses to accede to a proposal for an arrangement which, if consummated would be in violation of said sections.
The facts show that the plaintiffs are not in the first or third classes of plaintiffs. The plaintiffs argue that they are a party to the franchise, and therefore within the franchise act's scope, either as a direct party to the November 9, 1989 agreement or a third party beneficiary of the agreement.
The plaintiffs' assertion is erroneous because throughout their pleadings and briefs they do not characterize themselves to be anything more than applicants for a franchise. They do not allege nor do they provide any facts which would indicate that they are a party to a CT Page 570 franchise agreement. Accordingly, the plaintiffs do not have standing to bring a cause of action under the franchise act for an alleged violation of General Statutes 42-133cc(10). In conclusion summary judgment is appropriate as to counts three and four because there is no dispute as to any issue of material fact and the defendant is entitled to judgment as a matter of law.
B. Count nine in regard to the individual plaintiffs.
As to count nine, the defendant argues that summary judgment is appropriate because the individual plaintiffs assigned their rights to Trans-Oceanic and therefore no longer have a justiciable interest in the controversy. It is noted that issues of standing are more appropriately raised in a motion to dismiss.
The defendant's argument ignores the allegations contained in the amended complaint (count nine, paragraph 21) and other proof in the pleadings that the individual plaintiffs were harmed by the alleged actions of the defendant. Therefore, summary judgment on count nine as to the individual plaintiffs is inappropriate.
C. Counts nine and ten in regard to all the plaintiffs.
The plaintiffs allege in count nine that they were a direct party to the November 9, 1989 agreement and that when Mercedes breached this agreement, that action constituted tortious interference with the plaintiffs' contract rights and expectations arising out of the plaintiffs' October 24, 1989 agreement with Lathrop. The plaintiffs argue in the alternative in count ten that they were third party beneficiaries of the November 9, 1989 agreement and that when Mercedes breached this agreement, that action constituted tortious interference with the plaintiffs' contract rights and expectations arising out of the plaintiffs' October 24, 1989 agreement with Lathrop. The underlying contract with which interference is alleged, namely the October 24 buy/sell agreement, is the same in both counts. For purposes of this motion for summary judgment, the characterization of the plaintiffs' relationship to the allegedly tortious acts of the defendant is irrelevant.
The essential elements of this cause CT Page 571 of action [for tortious interference with a contract] are: (1) the defendant's conduct was tortious in that it was fraudulent; and (2) as a proximate consequence of that fraudulent conduct, the plaintiff suffered actual loss, as alleged, in being deprived of an opportunity which he would otherwise have had. . . . (Citations omitted.)
Selby v. Pelletier, 1 Conn. App. 320, 323-24, 472 A.2d 1285
(1985).
The plaintiffs allege that the tortious aspect of the defendant's actions was the defendant's "fraudulent misrepresentation" to the plaintiffs that it had provided the plaintiffs with all necessary standards for application and application materials. Further, the plaintiffs allege that Mercedes fraudulently misrepresented that it would use good faith and reasonableness in receiving the plaintiffs' application. The defendant's representations allegedly arose out of the November 9, 1989 agreement. The plaintiffs allege that these actions constituted tortious interference with the October 24, 1989 buy/sell agreement between Lathrop and the plaintiffs and gave rise to the cause of action in count nine.
The defendant argues that it is legally privileged to reject the plaintiffs' application as a valid exercise of its business judgment and right to contract.2 Therefore, the defendant argues that the plaintiffs cannot maintain a cause of action against them for tortious interference.
The defendant's argument ignores the fact that the plaintiffs allege that a verbal agreement exists in which the defendant allegedly agreed to act reasonably and in good faith when considering the plaintiffs' application. The facts surrounding the existence, terms and performance of this verbal agreement are material to the resolution of the tortious interference counts and are disputed. Therefore, there is a genuine issue of material facts as to counts nine and ten and the court hereby denies the defendant's motion or summary judgment as to these counts.
CONCLUSION CT Page 572
Summary judgment is hereby granted to counts three and four because the plaintiffs are not within the class of plaintiffs allowed by statute to bring the causes of action set forth in these two counts.
Summary judgment as to counts nine and ten is hereby denied because a genuine dispute of material fact exists in regard to the cause of action set forth in these two counts.
Hurley, J.
|
01-03-2023
|
07-05-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/3359622/
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] FINDING OF FACT AND CONCLUSIONS OF LAW
The plaintiff Advantage Office, LLC brought a complaint against Ralph Gangitano and Corpinteriors, Inc. The matter was tried to the court without a jury on July 13, 2000. The complaint was in three counts. The first count alleged breach of contract against Corpinteriors, Inc. The second count, essentially on a theory of piercing the corporate veil, alleged that Ralph Gangitano was personally liable for the debt of Corpinteriors, Inc., and the third count alleged a violation of the Connecticut Unfair Trade Practice Act against both the corporate defendant and the individual defendant.
The defendants claimed a setoff of $140,000.00 for machinery, equipment and product delivered to the plaintiffs and filed a counterclaim that the CT Page 9574 plaintiff tortuously interfered with the defendants' relationship with the New York Power Authority.
At the conclusion of the trial the court ruled for the defendant Ralph Gangitano on the question of personal liability for breach of contract. The court ruled for both the corporate and individual defendant on the Connecticut Uniform Unfair Trade Practice Act. The court reserved decision on the breach of contract claim against the corporate defendant, Corpinteriors, Inc. After the court had ruled from the bench on counts two and three, the defendants withdrew the counterclaim.
COUNT TWO: PERSONAL LIABILITY
1. The court found that the plaintiff failed to prove that Gangitano employed the company as a mere instrumentality or agent of himself and failed to prove that there was no distinct identity between the two in law and equity.
2. The plaintiff failed to prove that Gangitano used his control of Corpinteriors to direct the cash of his business operations to his personal use rather than to pay creditors of Corpinteriors.
3. The plaintiff failed to prove that the control exercised by Gangitano was used to commit a fraud or wrong upon the creditors of the corporation, to strip the corporation of its ability to pay its creditors in the ordinary course of business or to commit a dishonest or unjust act in contravention of the plaintiff's legal rights.
4. Based upon the above findings of fact, the court finds that the plaintiff failed to sustain its burden of proof on Count Two and enters judgment for the defendant Ralph Gangitano.
COUNT THREE: CUTPA
1. The findings of fact made with regard to Count Two are also found as facts with regard to Count Three.
2. The plaintiff failed to prove any practice which is immoral, unethical or oppressive and/or unscrupulous on the part of either defendant.
3. Based upon the above findings of fact, the court concludes that the plaintiff is not entitled to recover damages from either defendant pursuant to Connecticut General Statute § 42-110a, et. seq. and enters judgment on Count Three for each defendant. CT Page 9575
COUNT ONE: BREACH OF CONTRACT
1. The plaintiff has sold and delivered goods to Corpinteriors and Corpinteriors has failed and refused and continues to fail and refuse to pay for those goods.
2. The defendant is indebted to Advantage Office, LLC in the amount of $44,632.77. [See Plaintiff's Exhibit 5].
3. The defendants have failed to prove that the plaintiff continues to be indebted to either defendant in any amount.
4. The defendants have failed to prove the claimed setoff of $140,000.00.
5. Based upon the facts found, the court enters judgment for the plaintiff Advantage Office, LLC against the defendant Corpinteriors, Inc. only in the amount of $44,632.77.
THE COURT
By _______________ Kevin E. Booth, J.
|
01-03-2023
|
07-05-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/2493803/
|
281 F.Supp.2d 795 (2002)
UNITED STATES of America, Plaintiff,
v.
Brian Patrick REGAN, Defendant.
No. CRIM.01-405-A.
United States District Court, E.D. Virginia, Alexandria Division.
December 17, 2002.
*796 *797 *798 *799 Patricia Haynes, Esquire, Assistant United States Attorney, United States Attorney's Office, Alexandria, VA, for Plaintiff.
James Clyde Clark, Esquire, Land, Clark, Carroll & Mendelson, Nina J. Ginsberg, Esquire, DiMuro Ginsberg & Mook, Joseph McCarthy, Esquire, Delaney McCarthy & Colton, Jonathan Shapiro, Esquire, Alexandria, VA, for Defendant.
MEMORANDUM OPINION
LEE, District Judge.
THIS MATTER is before the Court on the Government's Motion for Leave to Image Computer Media in the Courthouse Secure Classified Information Facility ("SCIF"). The issue before the Court is whether the Government has demonstrated probable cause to believe that the Defendant may be engaged in ongoing criminal activity using the Court's computers in his lawyers' SCIF, such that a search of the SCIF's computer(s) ought to be conducted *800 by Court Order. Because the Government's evidence shows that the Defendant has not complied with the special measures rules, that he has secreted non-privileged materials in his cell, and that a recent seizure from the Defendant suggests he may be trying to communicate in code with persons outside the jail to secrete or destroy evidence, the Court finds probable cause to search his lawyers' computer(s) and floppy disk in the Court Secure Information Facility for evidence of ongoing criminal activity. For the reasons set forth below, the Court GRANTS the Government's Motion under very narrowly circumscribed measures.
I. FACTS
Defendant Brian Patrick Regan has been indicted on several charges of attempted capital espionage against the United States. Defendant is accused of attempting to sell classified information to Iraq, Libya, and China. After Government surveillance of Regan, the authorities were led to believed that before Regan's arrest, he secreted classified information in various unknown locations. The Government has not yet located the classified information it alleges that Regan has hidden.
The Government has brought Regan before the Court on three occasions in the past two months to review issues of non-privileged documents being seized from Regan's cell at the Alexandria Adult Detention Center (the "Alexandria Jail"). This motion to image the Defendant's Computer in the SCIF follows yet a third incident involving a seizure of non-privileged information from Regan's cell. This most recent random jail search and seizure, (a "shakedown"), revealed letters to Regan's wife and his children, and a one-page document of code (an alphanumeric series of letters and numbers), which appears to have been typewritten. The Government contends that the letters to Regan's wife and his children are written a code, which can only be understood by Regan's family or others and refers to hidden items and a variety of locations in the community. The letters appear to refer to buried items. Additionally, the Government alleges that the one-page document of code is a message intended for a particular recipient, with possible instructions for the destruction of documents that Regan has allegedly secreted in various locations. The Government suspects that Regan created these documents and that the electronic versions of the documents are contained on the hard drive on Defendant's lawyers' computer(s) in the SCIF, or on floppy disks in the SCIF because Regan has no access to computers or printers at the jail. The Government contends that Regan's possession of these items demonstrates that Regan is improperly using the Court's computer(s) in the SCIF to further his crimes and to obstruct justice. The Government further asserts that Regan is trying to communicate with persons outside the jail, in an effort to arrange the destruction or further concealment of classified information that he allegedly misappropriated from his employer.
Defendant, on the other hand, contends that the SCIF is the Defendant's attorneys' private law office, and, therefore, is not subject to search in the absence of probable cause. Moreover, the Defendant contends that the Government's evidence does not demonstrate probable cause that justifies the search of the contents of the SCIF's computers.
The Court grants the Government's Motion to Image Computer Media in the SCIF, for the reasons to follow.
STANDARD OF REVIEW
I. Probable Cause
The parties agree that the Government's motion is in effect an application *801 for a search warrant. The Fourth Amendment[1] requires the Government to demonstrate probable cause before a search warrant may issue. Probable cause is the level of suspicion necessary to justify intrusions by the government into a person's reasonable expectation of privacy. See Ornelas v. United States, 517 U.S. 690, 695, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996); Illinois v. Gates, 462 U.S. 213, 238, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983). The Fourth Amendment shields citizens from unreasonable searches and seizures of property. Katz v. United States, 389 U.S. 347, 357, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). The Supreme Court has defined probable cause to search as "a fair probability that contraband or evidence of a crime will be found in a particular place." Gates, 462 U.S. at 238, 103 S.Ct. 2317. Therefore, in order for the Government to secure a search warrant of the Defendant's SCIF computer(s), it must establish that a fair probability that contraband or evidence of a crime will be found on a disk or on a computer(s) in the SCIF. Moreover, because the Defendant's SCIF is an area that he and his attorneys must use to access classified information, the Government must overcome the attorney-client privilege and the attorney work product privilege. The Court first examines the Defendant's claim that the SCIF serves as a law office for him and his counsel. Next, the Court considers the applicability of the attorney-client privilege and the attorney work product doctrine to the areas the Government seeks to search. Finally, the Court explores whether either of those privileges can be overcome by the crime fraud exception.
II. Area to Be Searched SCIF as Defense Counsel's Law Offices
The SCIF is a secure facility located in the courthouse where the Defendant and his attorneys may lawfully view classified information. Defense counsel may not remove certain classified information from the SCIF, and the Defendant may not remove classified information from the SCIF. The analogy of the SCIF to Defendant's attorneys' law office is proper in this context. The SCIF has been provided to the espionage defendant and his counsel so that they may have access to classified information to prepare for trial. The Defendant and his counsel must have access to classified information in a "prosecution free zone." Defense counsel and their client reasonably expect to be free to work in the SCIF to compose work papers, trial memoranda, and trial strategy, free from the roving eye of the prosecutor or the Court. Because the classified information involved in this case relates to national security, the information must be kept secure. The SCIF affords the Government a place to continue to protect classified information. While the attorney-client and the attorney-work-product privileges are important and vital to ensuring effective assistance of counsel, the Court will not allow the SCIF/law office to be used to conceal evidence of an ongoing or future crime.
In fact, the Defendant and his counsel are well aware that the Defendant's access to classified information in the SCIF requires strict adherence to certain rules. As a matter of fact, Defendant was recently reminded of these procedures when he was brought back before the Court for *802 having contraband in his cell. Therefore, Defendant is well aware that he may access classified information and review documents on computers in the SCIF, but he may not use the computer to compose correspondence to his family or friends. Defendant Regan is in custody under special measures, which restrict contact to his family, the outside world, and certain inmates at the Alexandria Jail.
In this case, a substantial question is presented by Defendant's conduct, certain information contained in unprivileged documents found in Defendant's possession, and certain observations about the supervision, or lack thereof, of Defendant while in the SCIF. Indeed, if the Government does establish that the SCIF is being used as an instrumentality in furtherance of a crime, the crime fraud exception operates to deny the attorney client privilege to prevent ongoing criminal activity.
Courts have long upheld the search and seizure of law offices. See Andresen v. Maryland, 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976); In re Impounded Case (Law Firm), 840 F.2d 196 (3d Cir. 1988); Klitzman, Klitzman & Gallagher v. Krut, 744 F.2d 955 (3d Cir.1984). Furthermore, searches and seizures of items from law offices are not unreasonable, per se, if measures are taken to protect certain privileges that might attach to documents contained therein. For example, the court in Law Firm used special measures to ensure that the warrant authorizing the search of the law firm protected privileged documents from being searched and seized. Law Firm, 840 F.2d at 202. That court held that it was "satisfied that the attorney-client privilege [would be] sufficiently protected by the procedure established by the magistrate requiring that the government obtain leave of the court before examining any seized items." Id. It further held that the procedure would "provide assurance that disclosure will be limited to those materials sought by the government." Id.
The "appropriate role of the reviewing court" of a warrant to search a law office "is to scrutinize carefully the particularity and breadth of the warrant authorizing the search, the nature and scope of the search, and any resulting seizure." Klitzman, 744 F.2d at 959.
III. Attorney-Client Privilege
The Government's motion poses a difficult and challenging problem for the Court, because the Court is well aware of the sanctity of the attorney-client privilege, which "is one of the oldest recognized privileges for confidential communications." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). See also Swidler & Berlin v. United States, 524 U.S. 399, 403, 118 S.Ct. 2081, 141 L.Ed.2d 379 (1998); Hunt v. Blackburn, 128 U.S. 464, 470, 9 S.Ct. 125, 32 L.Ed. 488 (1888). The client is the holder of this privilege. In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir. 1994). Therefore, the Court wants to ensure that privileged information does not fall into the hands of the Government, absent sufficient justification.
The purpose of the attorney-client privilege is to "encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice." Swidler & Berlin, 524 U.S. at 403, 118 S.Ct. 2081. The privilege "rests on the need for the advocate and counselor to know all that relates to the client's reasons for seeking representation if the professional mission is to be carried out." Hawkins v. Stables, 148 F.3d 379, 383 (4th Cir.1998) (quoting Trammel v. United States, 445 U.S. 40, 51, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980)). When the privilege *803 applies "it affords confidential communications between lawyer and client complete protection from disclosure." Hawkins, 148 F.3d at 382. However, "the attorney-client privilege is to be narrowly construed." Id.See also United States v. Oloyede, 982 F.2d 133, 141 (4th Cir.1992) (same); In re Grand Jury Proceedings, 727 F.2d 1352, 1355 (4th Cir.1984) (holding that attorney-client privilege is "recognized `only to the very limited extent that ... excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth'") (quoting Trammel, 445 U.S. at 51, 100 S.Ct. 906 (1980)).
The Fourth Circuit has adopted the "classic test" for determining whether the attorney-client privilege applies to certain communications:
The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to an act of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort and (4) the privilege has been (a) claimed and (b) not waived by the client.
United States v. Jones, 696 F.2d 1069, 1072 (4th Cir.1982) (quoting United States v. United Shoe Machinery Corp., 89 F.Supp. 357, 358-359 (D.Mass.1950)). The proponent of the privilege bears the burden of demonstrating its applicability. Jones, 696 F.2d at 1072.
However, as will be shown below, the attorney-client privilege is not without its costs. Mainly, if the Government is correct in its assertion that the Defendant is using the Court's SCIF to further criminal activity or to obstruct justice, then, by law, the crime fraud exception will override the attorney client privilege.
IV. Work-Product Doctrine
Although not raised by the defense, the Government must overcome the attorney work product privilege, which protects work done in preparation for litigation, before it may successfully assert the crime-fraud exception. See Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947); In re Grand Jury Proceedings, 33 F.3d 342. There are two types of work product: fact work product and opinion work product. Fact work product, "can be discovered upon a showing of both a substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship." Id. at 348. Opinion work product, "is even more scrupulously protected as it represents the actual thoughts and impressions of the attorney. ..." Id. "Opinion work product enjoys a nearly absolute immunity and can be discovered in very rare and extraordinary circumstances." Id. Protection of the attorney's work product may be asserted by either the client or the attorney. See In re Grand Jury Proceedings, 33 F.3d at 348.
V. Crime-Fraud Exception to Attorney-Client and Work-Product Privilege
A. Crime-Fraud Exception to Attorney-Client Privilege
Courts have long recognized that, in certain circumstances, the attorney-client privilege "ceases to operate as a safeguard on the proper functioning of our *804 adversary system," when the privilege is used to commit future crimes. United States v. Zolin, 491 U.S. 554, 562-563, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989). The purpose of the attorney-client privilege to promote honest communication between an attorney and client"ceas[es] to operate at a certain point, namely, where the desired advice refers not to prior wrongdoing, but to future wrongdoing." Id. at 562, 109 S.Ct. 2619 (quoting 8 J. Wigmore, Evidence, § 2298, p. 573 (emphasis in original)). The purpose of the crime-fraud exception is to ensure that the "`seal of secrecy' between lawyer and client does not extend to communications `made for the purpose of getting advice for the commission of a fraud' or crime.'" Zolin, 491 U.S. at 563, 109 S.Ct. 2619 (quoting O'Rourke v. Darbishire, [1920] A.C. 581, 604 (P.C.)).
The question becomes, though, after a party has opposed the assertion of the attorney-client privilege, how does the Court determine whether the crime-fraud exception applies. Initially, the party asserting the privilege must demonstrate that the privilege is applicable. Thereafter, the "government must make a prima facie showing that the communications sought to be reviewed fall within the crime-fraud exception," in order to overcome the attorney-client privilege. In re Grand Jury Subpoena, 884 F.2d 124, 127 (4th Cir.1989). Additionally, the Supreme Court has held that the existence of the crime-fraud exception does not have to be determined by evidence independent of allegedly privileged information; rather, the district court may conduct an in camera review of the allegedly privileged information itself to determine whether the crime-fraud exception applies. Zolin, 491 U.S. at 556-557, 109 S.Ct. 2619. Furthermore, review of the allegedly privileged material by the district court under these circumstances does not waive the attorney-client privilege. Id. at 568, 109 S.Ct. 2619. The Government may not, however, request an in camera review of privileged information as a "groundless fishing expedition, with the district courts as their unwitting (and perhaps unwilling) agents." Id. at 571, 109 S.Ct. 2619.
In order for an in camera review to be triggered, the district court judge "should require a showing of a factual basis adequate to support a good faith belief by a reasonable person ... that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies." Id. at 572, 109 S.Ct. 2619 (internal citation omitted). After the factual basis has been established, it is within the sound discretion of the Court to conduct the in camera review. Id.
B. Crime-Fraud Exception to Work-Product Doctrine
The Fourth Circuit has also recognized that the crime-fraud exception can be invoked to vitiate the attorney work-product privilege. See In re John Doe, 662 F.2d 1073, 1079 (4th Cir.1981), cert. denied, 455 U.S. 1000, 102 S.Ct. 1632, 71 L.Ed.2d 867 (1982). However, the burden of overcoming the privilege is on the party opposing the privilege to show a "substantial need" for the attorney's work product. The Government must make the same prima facie showing to overcome the work product privilege as is required to overcome the attorney-client privilege, discussed above.
VI. Application
A. Probable Cause
The Government's evidence, as set forth in its motion, meets the probable cause standard, because the documents sought by this search warrant demonstrate that the Defendant used a computer to *805 create letters to persons outside the jail to communicate with others about secreted material. Further, the Government's motion shows that Regan had in his possession three computer-generated documents, written in code, describing hidden objects. Additionally, the record shows that Regan allegedly copied classified information which has not been recovered. Furthermore, the Defendant has been brought to Court three times in the past two months for violating the special measures rules for the jail. On the first occasion, the Defendant was allegedly caught with contraband documents in his cell by an Alexandria Jail Deputy Sheriff, but before the materials could be confiscated, the Defendant ran to his cell and flushed the documents down the toilet. On the second incident, officers at the Alexandria Jail discovered a detailed map of a park, drawn by the Defendant, indicating where items were buried. On this most recent search, letters to the Defendant's wife and children, along with a one-page document of code were discovered in Defendant's possession. The contents of those documents indicate that the Defendant wants to use his family and others to retrieve secreted materials in order to destroy them before the Government is able to retrieve them. Moreover, the object of the Government's application for a search here are several of the documents that were found in Defendant's cell. The documents are type-written, and the Government has established, through testimony of the FBI agent responsible for Regan's security at the jail, that the Defendant does not have access to a typewriter, computer, or other word-processor at the jail. The only place where Defendant does have access to a computer and printer is in Defendant's SCIF. The Court concludes that these facts demonstrate more than a fair probability that evidence of a crime, obstruction of justice, will be found on the hard drive of the computer(s) in the SCIF.
B. Area to be Searched SCIF/Defense Law Offices
Courts have frequently held that searches of law offices are not per se unreasonable, as long as the Court established procedures to ensure that privileged material is not inadvertently revealed. The procedures set forth in this Order will limit the search to four documents: (1) two letters to Defendant's wife Anette, (2) a letter to Defendant's children, and (3) a one-page document of code. As will be discussed, neither of these documents are privileged, so there is no risk of harming the Defendant's trial preparation by this very limited search.
C. Attorney-Client Privilege Does Not Apply
In order to be protected by the attorney client privilege, the communication must be disclosed to the lawyer for the purpose of gaining legal advice. The letters sought by the Government do not fall within this privilege because they were not addressed to defense counsel. The letters were addressed to members of Defendant's family. Furthermore, on one of Defendant's visits to Court, after having violated the Alexandria Jail's procedures, the Judge instructed the Defendant that he was to clearly mark all materials for his lawyer "Attorney Client Privilege" or some other reasonable method to indicate that the information was for his attorney. Neither of the documents sought by this application had such a marking, nor can it be said, after reviewing the recovered documents, that they were created for the purpose of gaining legal advice from Defendant's counsel. Therefore, the documents are not protected by the attorney-client privilege.
D. Work-Product Privilege
This privilege does not apply here because the documents are not the opinions *806 or the impressions of Defendant's attorneys, made in connection with this case. The documents were created by the Defendant. However, assuming, arguendo, that the work product privilege did apply, the privilege could be overcome by the Government's showing of a "substantial need" for the documents and an inability to retrieve the documents from another source without undue hardship. As indicated in Count Four of the Indictment, the Government charges the Defendant with copying and secreting classified documents, which it has yet to recover, in locations known only to the Defendant. According to the contents of the three documents at issue, the Defendant is trying to have documents or items destroyed by persons outside the jail, before they can be recovered by the Government. This scenario undoubtedly presents a substantial need to search the Defendant's computer(s) in the SCIF for these documents, and the Court knows of no other alternative measure to retrieve the documents. Therefore, the attorney work product privilege cannot protect these documents from the scope of this search.
E. Crime Fraud Exception
In the interests of the Defendant, the Court assumes that both the attorney-client privilege and the attorney-work-product privilege apply to the contents of the hard drive or the SCIF's computer(s) and floppy disks. Regardless, the circumstances are such that the crime fraud exception overrides those privileges because the Government has made a prima facie showing that the exception applies through the following: the nature of Defendant's behavior, and the content of the documents retrieved from Defendant. Furthermore, the Court has conducted an in camera review of the documents allegedly falling within the exception, and the Court concludes that there is an adequate factual basis to support a good faith belief by a reasonable person that the crime fraud exception applies.
Because the Defendant's conduct gives rise to probable cause to believe that the Defendant is using the Court-provided law offices to create prohibited forms of communication to persons outside the jail, in an effort to have important classified documents destroyed, the Government must have access to the SCIF's computer media to search for evidence of a crime. These documents potentially affect national security. For obvious reasons, the crime fraud exception applies to vitiate any privilege which might normally apply.
Having demonstrated probable cause, and having overcome all applicable privileges, the Court GRANTS the Government's Motion for Leave to Image Computer Media in the Courthouse SCIF, under the narrowly circumscribed directions set forth in the accompanying Order.
VII. Pre-Trial Search Procedures
The Court is mindful that the Defendant's SCIF computers may contain attorney-client information and memoranda; therefore the Court will carefully circumscribe the parameters and method of the search.
In order to avoid any claims that the Government has had access to defense counsel's pre-trial preparation, the Court is not going to allow the United States Attorney or the Federal Bureau of Investigation to conduct the search. Rather the Court is going to refer this matter to a United States Magistrate Judge to supervise the process of securing the defense's SCIF computer hard drives and disks for imaging and their return to counsel. The United States Magistrate Judge will work with a court selected neutral computer expert with proper security clearances to image the Defendant's computer hard *807 drives and to search for the enumerated four items: (1) two letters to Anette Regan; (2) letters or memoranda to his children; and (3) a page of code composed of letters and numbers. All of the items listed above will be attached to the court's Order, UNDER SEAL. If these items are found on the hard drive, then the computer expert will provide this information in electronic and hard copy to the United States Magistrate Judge for review. The United States Magistrate Judge is directed to report the computer expert's findings to all counsel and the District Judge. CIPA Court Security Officer Christine K. Gunning is directed to maintain the imaged hard drive in a secure location until the verdict is reached in this case and further order of the court. The accompanying order will provide specific details regarding the logistics of the computer imaging and search process.
VIII. Post-Verdict Search Procedures
After the jury has reached its verdict in this case, the Government may seek leave of Court to conduct a further search on the hard drives and floppy disks. The Government shall notify defense counsel of its intentions by a written motion. The Government must notice its motion for a hearing with the Clerk's Office, and then the motion shall be heard by the Court. Once the Government has reviewed the material that was seized pursuant to the search, the Government may make use of the items as it deems proper.
Additionally, the appointed computer expert shall not reveal the contents of the search to anyone except the Magistrate Judge appointed to work on this case.
This Memorandum Opinion and its accompanying Order SHALL be placed UNDER SEAL, to avoid revealing any information that might adversely affect a potential juror in the trial of Defendant Brian Patrick Regan.
The Clerk is directed to forward a copy of this Order to counsel of record.
NOTES
[1] "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." U.S. Const. amend. IV.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981028/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0413n.06
No. 10-2672
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT FILED
UNITED STATES OF AMERICA, ) Apr 16, 2012
) LEONARD GREEN, Clerk
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE WESTERN
PATRICK WAYNE BRIDGES, ) DISTRICT OF MICHIGAN
)
Defendant-Appellant. ) OPINION
)
BEFORE: WHITE, STRANCH, and FARRIS, Circuit Judges.*
PER CURIAM. Patrick Wayne Bridges appeals the district court’s order denying his motion
to dismiss the indictment.
In 2001, Bridges was convicted of misdemeanor domestic violence in a Michigan court. The
trial court did not impose a term of incarceration, but sentenced Bridges to one year of probation.
In 2010, Bridges was indicted for possessing a firearm after being convicted of a misdemeanor crime
of domestic violence, in violation of 18 U.S.C. § 922(g)(9). Bridges moved to dismiss the
indictment, arguing that despite his domestic violence conviction, he was not prohibited from
possessing a firearm because he qualified for one of the exceptions to the firearm restriction listed
in 18 U.S.C. § 921(a)(33)(B)(ii). The district court denied the motion, concluding that Bridges did
not qualify for the exception. Bridges pleaded guilty to the firearm charge, reserving his right to
*
The Honorable Jerome Farris, Circuit Judge for the United States Court of Appeals for the
Ninth Circuit, sitting by designation.
No. 10-2672
United States v. Bridges
appeal the district court’s denial of his motion to dismiss the indictment. The district court sentenced
Bridges to 21 months in prison.
On appeal, Bridges argues that the district court erred by denying his motion to dismiss the
indictment. We review de novo matters requiring statutory interpretation. Roberts v. Hamer, 655
F.3d 578, 582 (6th Cir. 2011). Section 922(g)(9) prohibits an individual who has been convicted of
a misdemeanor crime of domestic violence from possessing a firearm. Section 921(a)(33)(B)(ii)
provides, as relevant here, that “[a] person shall not be considered to have been convicted of such
an offense . . . if the conviction . . . is an offense for which the person . . . has had civil rights restored
(if the law of the applicable jurisdiction provides for the loss of civil rights under such an offense).”
Under Michigan law, misdemeanants lose their civil rights only while confined in a correctional
facility. See Mich. Comp. Laws § 168.758b.
Bridges argues that, under § 921(a)(33)(B)(ii), individuals in his position, who are not
subjected to a loss of their civil rights as a result of their conviction, should be treated equivalently
to individuals who lose their civil rights and subsequently have those rights restored. This court
reached such a conclusion in United States v. Wegrzyn, 305 F.3d 593 (6th Cir. 2002). In 2007,
however, the Supreme Court held that the “civil rights restored” clause in the analogous provision
of § 921(a)(20) does not apply to an offender such as Bridges who lost no civil rights. See Logan
v. United States, 552 U.S. 23, 37 (2007). Further, the Court noted that the words “civil rights
restored” in § 921(a)(33)(B)(ii) do not cover a person whose civil rights were never taken away. Id.
at 36-37. Under the reasoning of Logan, which we are bound to follow, see Smith v. Cupp, 430 F.3d
766, 773 n.3 (6th Cir. 2005), Bridges does not qualify for an exception to the firearm restriction in
§ 922(g)(9), and the district court properly denied his motion to dismiss the indictment.
-2-
No. 10-2672
United States v. Bridges
Accordingly, we affirm the district court’s order.
-3-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2981043/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0400n.06
No. 10-2567
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LORI MARIE McCOLMAN, ) FILED
) Apr 12, 2012
Plaintiff-Appellant, )
) LEONARD GREEN, Clerk
v. )
)
ST. CLAIR COUNTY, ST. CLAIR )
COUNTY SHERIFF’S DEPARTMENT, ) ON APPEAL FROM THE UNITED
and SERGEANT HERNANDEZ, ) STATES DISTRICT COURT FOR THE
) EASTERN DISTRICT OF MICHIGAN
Defendants, )
)
and )
)
DEPUTY GREG DOAN, )
)
Defendant-Appellee. )
Before: GIBBONS, GRIFFIN and DONALD, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. Lori McColman, a double amputee
with below-the-knee prosthetics, sued St. Clair County, its Sheriff’s Department, and two
St. Clair County police officers alleging that the officers used excessive force and were
grossly negligent in connection with her arrest for drunk driving. McColman brought claims
for deprivation of her civil rights and use of excessive force in violation of 42 U.S.C. § 1983;
assault and battery; and gross negligence pursuant to Michigan Compiled Laws § 691.1407.
After the parties stipulated to the dismissal of all defendants except St. Clair County
Sheriff’s Deputy Greg Doan, Doan moved for summary judgment. The district court granted
Doan’s motion, concluding that Doan did not use excessive force when he pulled McColman
into the back seat of his police vehicle after her arrest and that, even if he did, he was entitled
to qualified immunity. The district court further held that Doan was not grossly negligent
in placing McColman sideways in the back seat of the police vehicle and that Doan was not
grossly negligent when he left McColman sitting on a gurney in the hospital emergency
room under the supervision of another officer. McColman appeals. For the reasons that
follow, we affirm the judgment of the district court.
I.
Lori McColman, a double, below-the-knee amputee who ambulates with prosthetics,
was arrested for drunk driving on August 28, 2008. The week before her drunk driving
arrest, police officers were called to the house of McColman’s husband, Donald McColman,
Jr., to respond to a domestic dispute. Doan and Sergeant Joseph Hernandez responded to the
call and interviewed McColman and her husband. From these interviews, they learned that
McColman had set the couple’s marriage certificate on fire and had pushed her husband, and
that he knocked her down, causing her to fall, hit her head, and black out. McColman’s
husband alleges that she only pretended to black out, at which point he called 9-1-1. The
officers separated the couple for the night, sending McColman to her own home.
In the early morning hours of August 28, 2008, Doan observed McColman’s car
weaving between lanes, pulled her over, and gave her several field sobriety tests.
McColman performed poorly on at least one of these tests. Doan then administered a
breathalyzer test which revealed that McColman’s blood alcohol level was .18, which was
over the legal limit. He told McColman that she was being arrested for drunk driving and
directed her to place her hands behind her back. Doan then handcuffed McColman.
2
McColman testified that Doan placed the handcuffs on her “[w]ay too tight[ly,]” causing her
to scream out in pain, “I’m hurting. You’re hurting me, you’re hurting me.” She further
testified that the handcuffs were so tight that they were cutting into the skin on her wrists,
but Doan did not adjust the handcuffs in response to her complaint. Doan testified that he
checked the tightness of the handcuffs by inserting a finger along McColman’s wrist bone,
determined that they were not too tight, and left them as they were.
Doan then sat McColman on the back seat of the police car, and asked her to scoot
into the vehicle. McColman told Doan she couldn’t “scoot” into the back seat because she
needed her hands to propel her. Doan then walked around to the other side of the car,
opened the door, grabbed McColman by her upper arms, and pulled her across the seat and
into the car. McColman testified that she was “yanked . . . across the seat” in a manner that
“caused excruciating pain.” When Doan pulled McColman into the back seat, one of her
prosthetic legs fell off, but Doan reattached it to her residual limb. At the time of her arrest,
McColman weighed approximately 170 pounds.
Doan testified that he left McColman sitting sideways on the back seat because he
thought that she would have difficulty getting her prosthetic legs around and underneath the
cage of the vehicle. Doan began to drive McColman to the jail, but as a result of her sitting
sideways on the back seat, when Doan made a right turn, McColman fell over and hit her
head on the car seat or door. McColman testified that she blacked out from the extreme pain
she was feeling in her wrists—from the handcuffs—and from hitting her head. Doan heard
a thud in the back seat, stopped the police car, and checked on McColman. McColman was
breathing and moving, but not talking. Because McColman was unresponsive, Doan took
her to the hospital.
3
Doan radioed for backup to meet him at the hospital, and Deputy Martin Stoyan was
dispatched to assist Doan. Doan testified that he radioed for backup to avoid having to leave
McColman unattended while he was doing paperwork at the hospital. When they reached
the hospital, Doan and Stoyan helped McColman onto a gurney and an orderly took her into
an examination room. McColman testified that she was then left unattended in the
examination room with the police officers standing outside the door of the room.
At some point, McColman fell off the gurney and hit her right elbow on the floor.
She testified that one of her prosthetic legs was slipping off, and, as she was trying to hold
it on with her other leg, she fell off the gurney after she lost her balance due to her hands
being handcuffed behind her back.
McColman testified that after her fall, she experienced excruciating pain in her wrists
and hands, which were going numb, and in her right elbow. Despite her complaints of pain,
McColman was medically cleared to go to jail, and Doan transported her there. McColman’s
handcuffs were only removed when she reached the jail.
McColman saw two doctors in the aftermath of the arrest, one of whom testified that
her pre-existing carpal tunnel syndrome was exacerbated as a result of the way she was
handcuffed.
II.
Doan moved for summary judgment, and the district court held a hearing on the
motion on September 29, 2010.1 At the hearing, Doan argued that McColman had never
1
Prior to the hearing, the parties stipulated to the dismissal with prejudice of all defendants
except Doan, and to the dismissal of Count IV of the Complaint, which alleged that St. Clair County
and the St. Clair County Sheriff’s Department violated McColman’s civil rights in violation of 42
U.S.C. § 1983 by failing to properly supervise, monitor, and train their police officers and by
4
pled a claim that Doan used excessive force in handcuffing her. Although her complaint
contained allegations of excessive force, it did not allege that Doan subjected her to
excessive force by handcuffing her too tightly. The court agreed that there was no excessive
force handcuffing claim pled in the complaint and that such a claim was therefore not before
the court. McColman argued that Doan was on notice, through discovery, that McColman
was pursuing an excessive force claim related to her handcuffing and orally moved to amend
the complaint to allege this claim. The district court declined to grant the motion orally,
directing McColman’s counsel to file a motion if he wished to amend the complaint.
McColman’s counsel indicated that he would move for leave to amend. However, more than
one month later, when the district court granted Doan’s motion for summary judgment,
McColman’s counsel still had not moved for leave to amend the complaint.
In its opinion granting Doan’s motion for summary judgment, the district court held
that McColman’s excessive force handcuffing claim was not before the court; that Doan did
not use excessive force when he pulled McColman across the back seat of the police car, and
that even if he did, he was entitled to qualified immunity; that Doan was not grossly
negligent when he situated McColman sideways in the back seat or when he left McColman
under Stoyan’s supervision at the hospital; and that Doan was entitled to governmental
immunity on the state law assault and battery claims. Accordingly, the district court entered
summary judgment in Doan’s favor. McColman appealed but abandoned her assault and
battery claims on appeal.
III.
establishing a pattern and practice of violating their citizens’ constitutional rights.
5
We review a district court’s grant of summary judgment de novo. Alspaugh v.
McConnell, 643 F.3d 162, 168 (6th Cir. 2011). “Summary judgment is appropriate 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
movant is entitled to a judgment as a matter of law.’” Binay v. Bettendorf, 601 F.3d 640,
646 (6th Cir. 2010) (quoting Fed. R. Civ. P. 56(c)). The moving party bears the burden of
proving that no genuine issue of material fact exists, but it can discharge that burden by
showing “that there is an absence of evidence to support the nonmoving party’s case.”
Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005) (internal quotation marks
omitted). In reviewing a summary judgment motion, we view the evidence and the
inferences therefrom “in the light most favorable to the non-moving party.” Id. (citing
Matsushita Elec. Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
A.
McColman argues that the complaint properly pled an excessive force claim based
on handcuffing. We do not agree.
“[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.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (internal quotation marks
omitted). “A pleading that offers labels and conclusions or a formulaic recitation of the
elements of a cause of action will not do.” Id. (internal quotation marks omitted). “Nor does
a complaint suffice if it tenders naked assertions devoid of further factual enhancement.”
Id. (internal quotation marks and alteration omitted). “[W]here the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the complaint has
6
alleged—but it has not shown—that the pleader is entitled to relief.” Id. at 1950 (internal
quotation marks and alteration omitted).
McColman cites paragraphs 10–11 and 22–23 of her complaint as those that contain
sufficient factual and legal allegations to plead her excessive force handcuffing claim.
Paragraph 10 states, in full, “That the officers determined that an arrest should be made for
operating while intoxicated. The Plaintiff was handcuffed, hands behind her back, and then
ordered to get into the police vehicle.” (R. 1, at ¶ 10.) Paragraph 11 merely alleges that
because McColman is a double amputee she could not get into the police car “without
assistance while her hands were handcuffed behind her back.” (Id., at ¶ 11.) These
paragraphs describe the fact that McColman was handcuffed, but nothing in these paragraphs
can be construed as an allegation that Doan used excessive force in placing handcuffs too
tightly on McColman’s wrists.
Paragraphs 22 and 23 of the complaint allege that Doan violated 42 U.S.C. § 1983
and the Constitution by using excessive force and that a reasonable officer in his position
would have known he was violating McColman’s constitutional rights. (Id., at ¶¶ 22–23.)
These paragraphs do not even mention handcuffing but merely recite the legal elements of
an excessive force claim.
The well-pleaded facts of McColman’s complaint do not permit an inference that
Doan violated 42 U.S.C. § 1983 by using excessive force in handcuffing McColman too
tightly. Accordingly, the district court correctly concluded that McColman failed to plead
an excessive force handcuffing claim.
Further, the handcuffing claim was not tried by consent, as McColman argues.
Federal Rule of Civil Procedure 15(b)(2) provides:
7
When an issue not raised by the pleadings is tried by the parties’ express or
implied consent, it must be treated in all respects as if raised in the pleadings.
A party may move—at any time, even after judgment—to amend the
pleadings to conform them to the evidence and to raise an unpleaded issue.
But failure to amend does not affect the result of the trial of that issue.
By its plain terms, Rule 15(b)(2) only applies to claims that are tried, and this case
was disposed of on summary judgment. Further, Doan did not consent to trying the
handcuffing claim—he objected to the claim in both his motion for summary judgment and
at oral argument on that motion. Cf. Siler v. Webber, 443 F. App’x 50, 58 (6th Cir. 2011)
(holding that an issue cannot be tried by the parties’ consent pursuant to Rule 15(b)(2) where
one of the parties opposes trial by moving for summary judgment).
The fact that Doan would not have been prejudiced or surprised by an amendment
is irrelevant, given that McColman never moved for leave to amend her complaint. The
district court properly declined to consider a claim that was not pled.
B.
McColman next argues that the way in which Doan pulled her across the back seat
of the police vehicle constituted excessive force in violation of 42 U.S.C. § 1983. We
conclude that Dona’s use of force was reasonable.
The Fourth Amendment prohibits officers from using excessive force in the course
of making an arrest. Graham v. Connor, 490 U.S. 386, 394–95 (1989). “To determine
whether a constitutional violation based on excessive force has occurred, this Court applies
the objective-reasonableness standard, which depends on the facts and circumstances of each
case viewed from the perspective of a reasonable officer on the scene and not with 20/20
hindsight.” Binay, 601 F.3d at 647 (internal quotations marks omitted).
8
Factors relevant to the reasonableness inquiry include “the severity of the crime at
issue, whether the suspect poses an immediate threat to the safety of the officers or others,
and whether he is actively resisting arrest or attempting to evade arrest by flight.” Graham,
490 U.S. at 396.
As we have explained:
Not every push or shove, even if it may later seem unnecessary in the peace
of a judge’s chamber, violates the Fourth Amendment. The calculus of
reasonableness must embody allowance for the fact that police officers are
often forced to make split-second judgments—in circumstances that are
tense, uncertain, and rapidly evolving—about the amount of force that is
necessary in a particular situation.
Dunigan v. Noble, 390 F.3d 486, 493 (6th Cir. 2004) (emphasis omitted) (quoting Graham,
490 U.S. at 396–97).
In granting Doan’s motion for summary judgment, the district court noted that
McColman was arrested for driving while under the influence of alcohol, “an unquestionably
serious crime which can, under certain circumstances, lead to a volatile situation.” The court
acknowledged that McColman did not actively resist arrest and that the manner in which
Doan pulled her into the car caused her prosthetic leg to fall off and caused bruising on her
arms. However, the district court concluded that Doan’s pulling McColman into the back
seat was not objectively unreasonable because his previous encounter with her after her
domestic dispute apprised him of her aggressive behavior, and he had to use some force to
get a woman of her weight into the police vehicle. Doan did not use “gratuitous violence”
or “gratuitous force” to get McColman into the car. The court also concluded that even if
Doan’s use of force was objectively unreasonable, he was entitled to qualified immunity.
9
The district court’s analysis is sound. Doan knew that McColman had previously set
a fire in her husband’s home, suggesting she was inclined toward dangerous behavior when
she was upset. He also knew that she had been driving while intoxicated. The severity of
the crime justified keeping McColman in handcuffs after she was arrested, especially given
Doan’s knowledge that McColman could present a threat to the safety of others. See
Graham, 490 U.S. at 396. Thus, Doan’s decision not to remove McColman’s handcuffs was
objectively reasonable. McColman told Doan she could not scoot into the back seat
of the police car without the use of her hands. Thus, Doan, having made a reasonable
decision not to remove McColman’s handcuffs, had to apply some force to get her into the
back seat so that he could close the door and transport her to jail. See Graham, 490 U.S. at
396 (holding that a government officer has the right to use some degree of physical coercion
to effect an arrest). Grabbing her by her upper arms and pulling McColman across the seat
was not a gratuitous use of force, even if it did result in some minor bruising to McColman’s
arms. See Miller v. Sanilac Cnty., 606 F.3d 240, 252 (6th Cir. 2010) (“In determining
whether there has been a violation of the Fourth Amendment, we consider not the ‘extent of
the injury inflicted’ but whether an officer subjects a detainee to ‘gratuitous violence.’”
(quoting Morrison v. Bd. of Trs. of Green Twp., 583 F.3d 394, 407 (6th Cir. 2009))). Doan
applied force sufficient, but not greater than necessary, to get McColman into the vehicle
without removing her handcuffs. Accordingly, Doan did not use excessive force in pulling
McColman across the back seat of the vehicle.
C.
McColman next argues that the district court erred in holding that Doan was not
grossly negligent in placing McColman in the back seat of the police vehicle in a manner
10
that allowed her to fall and hit her head when he turned a corner. She also argues that the
district court erred in concluding that Doan was not grossly negligent in leaving her
unattended on the gurney at the hospital, from which she fell while she was trying to keep
one prosthetic leg on with the other.
Under Michigan’s Governmental Immunity Act, Mich. Comp. Laws § 691.1407, “a
governmental employee is not liable in tort for personal injuries so long as the employee’s
‘conduct does not amount to gross negligence that is the proximate cause of the injury or
damage.’” Oliver v. Smith, 715 N.W.2d 314, 317 (Mich. Ct. App. 2006) (quoting Mich.
Comp. Laws § 691.1407(2)(c)). Under Michigan law, a police officer may be held liable in
tort only if “the officer has utilized wanton or malicious conduct or demonstrated a reckless
indifference to the common dictates of humanity.” Bennett v. Krakowski, __ F.3d __, No.
10-2455, 2011 WL 5604055, at *6 (6th Cir. Nov. 18, 2011) (internal quotation marks
omitted). Further, tort liability will not lie unless the officer’s conduct “is the proximate
cause of the injury or damage.” Livermore ex rel Rohm v. Lubelan, 476 F.3d 397, 408 (6th
Cir. 2007) (internal quotation marks omitted). “[T]he Michigan Supreme Court [has]
defined ‘the proximate cause’ under § 691.1407(2)(c) to mean ‘the one most immediate,
efficient, and direct cause preceding an injury.’” Id. (quoting Robinson v. City of Detroit,
613 N.W.2d 307, 317 (Mich. 2000)).
Viewing the facts in the light most favorable to McColman, Doan was not grossly
negligent in placing McColman sideways in the back seat of the police car. Doan placed
McColman sideways because he believed she would have difficulty getting her prosthetic
legs underneath the cage if he turned her facing forward. McColman did not tell Doan she
was unstable in the position in which he situated her. There is no evidence in the record that
11
Doan was driving at an excessive rate of speed or recklessly when McColman fell over and
hit her head.
Doan’s response when McColman hit her head undermines any claim that Doan’s
conduct was “wanton or malicious . . . or demonstrated a reckless indifference to the
common dictates of humanity.” Bennett, 2011 WL 5604055, at *6 (internal quotation marks
omitted). When Doan heard a thud in the back seat, he stopped the police car and checked
on McColman. McColman was breathing and moving but not talking. Doan immediately
took McColman to the hospital because she had fallen over and was unresponsive. At most,
Doan’s failure to anticipate that McColman would fall over and hit her head because she was
positioned sideways was garden-variety negligence, not gross negligence. Accordingly, the
district court correctly concluded that Doan was not grossly negligent in placing McColman
sideways in the back seat of the police car and that he was therefore entitled to governmental
immunity.
Similarly, Doan was not grossly negligent in leaving McColman under Stoyan’s
supervision when he went to fill out hospital paperwork and paperwork necessary to obtain
a warrant for a blood draw. Doan anticipated that he would need backup at the hospital,
called for backup, and was met at the hospital by Stoyan. McColman testified that she was
left unattended in the examination room with the police officers standing outside the door
of the examination room. At some point, McColman fell off the gurney and hit her right
elbow on the floor. McColman testified that one of her prosthetic legs was slipping off, she
was trying to hold it on with her other leg, and she fell off the gurney after she lost her
balance due to her hands being handcuffed behind her back.
12
Crediting McColman’s version of events, as we must at the summary judgment stage,
Doan is still entitled to governmental immunity because Doan exercised due care in asking
Stoyan to supervise McColman while he filled out paperwork. Even if Stoyan failed to stay
in the room with McColman, and she was therefore left unattended, it was reasonable for
Doan to ask another officer to supervise an arrestee while he could not. There is no evidence
in the record that Doan knew or should have known that Stoyan would not watch McColman
at all times. On these facts, Doan did not engage in conduct that was “wanton or malicious
. . . or demonstrated a reckless indifference to the common dictates of humanity.” See
Bennett, 2011 WL 5604055, at *6 (internal quotation marks omitted).
Moreover, Doan’s actions were not the proximate cause of McColman’s fall and
consequent injury. See Mich. Comp. Laws § 691.1407(2)(c). According to McColman’s
own testimony, she only fell because she was trying to keep one prosthetic leg on with the
other, and lost her balance because her hands were handcuffed behind her back. The most
direct cause of McColman’s injury was her decision to use one of her prosthetic legs to try
to keep on the other, which was falling off. Because McColman’s actions, not Doan’s, were
the most direct cause of her fall and injury, Doan was entitled to governmental immunity.
See Livermore, 476 F.3d at 408.
IV.
For the foregoing reasons, we affirm the district court’s judgment.
13
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2614990/
|
847 P.2d 772 (1993)
In re OKLAHOMA BREAST IMPLANT CASES.
No. SCAD 92-15.
Supreme Court of Oklahoma.
February 16, 1993.
*778 SIMMS, Justice, dissenting:
I must respectfully dissent for, in my opinion, the Administrative Order entered today is an arbitrary and unauthorized exercise of judicial power. It is based entirely on federal law, 28 U.S.C. § 1407, the Multidistrict Litigation Act, which has no application to our state court system or proper procedures for transferring litigation under state law.
In Section 1407, Congress empowered the Chief Justice of the Supreme Court of the United States to appoint a judicial panel on multidistrict litigation comprised of seven circuit and district judges with the authority to transfer federal cases involving one or more common questions of fact to any district for coordinated or consolidated pretrial proceedings. The act further provides for review of any order directing transfer by extraordinary writ, but no provision is made for review of an order of the federal panel denying transfer. There can be no judicial review of this Administrative Order.
Oklahoma, however, has no similar statute or court rule. Neither does Oklahoma have districts and district courts which are the equivalent of those within the federal system.
Our state constitutional provisions, Art. VII, Sections 4 and 6, are cited as authority for the Court's action. Unlike my colleagues, I do not subscribe to the theory that this Court's authority is unlimited by reason of Sections 4 and 6. I see nothing in our constitution which supports the majority's determination that we have an administrative power through which we may reach out and control the daily affairs of the district courts.
*779 Section 4 confers upon this Court its appellate jurisdiction and gives it superintending control over all inferior courts, however, that power of superintending control is exercised only by the use of the common law writs of prohibition, mandamus, and injunction. Butler v. Breckinridge, 442 P.2d 313 (Okla. 1967). Section 4 does not grant this Court the authority to supervise or superintend the daily docket control of the district courts unless an extraordinary writ is employed.
Article VII, sec. 6, vests in this Court general administrative authority over all courts in this state and authorizes us to temporarily assign judges to another court and conduct the fiscal affairs of the district courts. Section 6 cannot be read as a grant of authority to this Court to transfer cases from county to county under the theory of the federal multidistrict litigation act.
Even if we could follow the federal model in imposing this administrative directive on these parties and the district court, the majority's order does not provide the procedural prerequisites set forth in the federal act. That act provides for notice to all parties in which transfers are contemplated, and for a hearing so that any party who would be affected by the transfer can offer material evidence for the panel's consideration. The list of breast implant cases appended to the paperwork indicates that all the cases, save and except two, are filed in Oklahoma county. The remaining two are filed in Tulsa county. The paperwork before us does not show that the Tulsa county parties received notice or any timely opportunity to be heard as to their thoughts about conducting their pretrial in Oklahoma County jointly with other litigants. The order creates a rebuttable presumption of the correctness of the transfer, and after the fact the parties may then voice their objection to the transfer. While the federal act provides the parties a hearing before transfer, today's order denies them a pre-transfer hearing.
There is no doubt in my mind that the objectives of the order are intended for the benefit of the district courts and the parties. These same laudable and desirable objectives may be obtained in a manner that is legitimate, legal, and orderly, however. In 1969, this Court adopted Rules on Administration of Courts, 20 Ohio St. 1991, Ch. 1, App. 2. Rule 2 gives the Presiding District Judge plenary control over all judicial personnel serving in the district. Rule 3 reads in part, "* * * Temporary assignments may be made for a single case, for multiple cases * * * with the approval of the presiding judge."
I submit the proper procedure to be followed in this litigation is to request the Presiding Judge in each of the two judicial districts to assign one judge for the purpose of conducting all pretrial proceedings, including discovery, in all the breast implant cases pending in their respective judicial district. This Court's summary appointment of one judge to conduct all the pretrial proceedings pending or yet to be filed in the State of Oklahoma is an unauthorized exercise of judicial power.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981660/
|
NOT RECOMMENDED FOR PUBLICATION
File Name: 13a0107n.06
No. 12-1140
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
FILED
Jan 30, 2013
)
DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
)
v. ) ON APPEAL FR OM THE UNITED
) STATES DISTRICT COURT FOR THE
PETER SIMONE, ) WESTERN DISTRICT OF MICHIGAN
)
Defendant-Appellant. )
Before: SUTTON and STRANCH, Circuit Judges, and STEEH, District Judge*
STEEH, District Judge. A federal jury convicted Peter Simone of conspiracy, bank fraud,
and aggravated identity theft. He appeals the district court’s denial of his motion to suppress and
upward variance in the 48-month sentence imposed for the conspiracy and bank fraud counts.
Finding his claims without merit, the district court is AFFIRMED.
On May 2, 2011, Sergeant Lound of the Meridian Township Police Department (MTPD)
effectuated a traffic stop of Simone and co-defendant Kimberly Kirkby. Lound made the stop based
on a description of the two individuals and the vehicle they were driving that had been broadcast by
MTPD dispatch regarding an attempt to cash a stolen check at a Meridian Township Bank of
America branch.
The Fourth Amendment allows law enforcement officers to stop citizens as long as they have
reasonable suspicion to believe that a crime has been committed and the person being stopped
*
The Honorable George Caram Steeh, United States District Court Judge for the Eastern
District of Michigan, sitting by designation.
committed the crime. See Terry v. Ohio, 392 U.S. 1, 20-22 (1968). Where the officer "lacks
probable cause, but possesses a reasonable and articulable suspicion that a person has been involved
in criminal activity, he may detain the suspect briefly to investigate the suspicious circumstances."
United States v. Bentley, 29 F.3d 1073, 1075 (6th Cir. 1994). The totality of the circumstances must
be evaluated to determine the validity of a Terry investigative stop. United States v. Martin, 289
F.3d 392, 396 (6th Cir. 2002) (citing United States v. Roberts, 986 F.2d 1026, 1029 (6th Cir. 1993)).
Sergeant Lound, a 24-year veteran of MTPD, stopped Simone's vehicle based on the
information he received from dispatch, his experience as a road patrol sergeant, and what he
witnessed while he followed the vehicle. The dispatch report referred to the Bank of America branch
on Grand River Avenue, which was less than two miles from Lound's location on road patrol. The
report further stated that a male was driving a white Chevrolet Impala with a female passenger,
heading east on Grand River. Lound used his knowledge of the area and his experience as a road
patrol officer and sergeant to determine that the white Impala he observed driving eastbound on
Grand River was at a location consistent with the time that had passed and the posted speed limit on
that road.
Lound testified that Simone reacted to being followed by a police vehicle by speeding up and
making an erratic turn onto another street. Simone's reckless turn provides additional support for
a Terry investigative stop. Based on all of the circumstances known to Lound at the time of the stop,
he acted reasonably in determining that the Impala he stopped was the one described by the
dispatcher as containing the individuals who attempted to commit a fraud on the bank.
"[A]n investigative detention must be temporary and last no longer than is necessary to
effectuate the purpose of the stop." United States v. Davis, 430 F.3d 345, 354 (6th Cir. 2005)
2
(quoting Florida v. Royer, 460 U.S. 491, 500 (1983)) (internal quotation marks omitted). The scope
of activities conducted during an investigatory stop "must reasonably be related to the circumstances
that initially justified the stop." United States v. Richardson, 949 F.2d 851, 856 (6th Cir. 1991). The
Supreme Court has stated that "[i]n assessing whether a detention is too long in duration to be
justified as an investigative stop, we consider it appropriate to examine whether the police diligently
pursued a means of investigation that was likely to confirm or dispel their suspicions quickly, during
which time it was necessary to detain the defendant." United States v. Sharpe, 470 U.S. 675, 686
(1985).
Within moments of making the traffic stop, Sergeant Lound knew that the occupants of the
Impala matched the description of a white man and woman, that the man was driving, and that the
man had a dark tan and buzz-cut hair. The vehicle had Pennsylvania plates, although the driver had
a Florida driver's license. The driver attempted to evade Lound when he realized he was being
followed. When stopped by Lound, the driver appeared nervous and lied about heading home from
a Target store in East Lansing, which Lound knew not to exist. See United States v. Torres-Ramos,
536 F.3d 542, 553 (6th Cir. 2008) (officer's initial information justified investigatory traffic stop, and
additional facts learned justified expansion of the detention beyond its original scope).
Sergeant Lound reasonably suspected the Impala's occupants of attempting to defraud the
bank, so bringing the bank employees to make a potential eyewitness identification is directly related
to the brief investigation. A 15-minute wait for the officers to arrive with the employees was
reasonable in this case. See United States v. Garcia, 496 F.3d 495, 504 (6th Cir. 2007) (duration of
investigatory stop was reasonable where canine sniff performed within half an hour of the stop).
3
Officers searched Simone’s vehicle and seized evidence minutes before the bank employees
arrived and identified Simone as the suspect of the attempted fraudulent check scheme. Simone and
Kirkby were then arrested. Upon effectuating an arrest, it is MTPD protocol to impound the vehicle
and conduct an inventory search. (Page ID #730)
The doctrine of inevitable discovery is an exception to the exclusionary rule and allows a
court to admit evidence that is otherwise illegally obtained if the evidence inevitably would have
been discovered through independent, lawful means. Nix v. Williams, 467 U.S. 431, 443-44 (1984).
There is nothing speculative about the inevitable lawful discovery in this case because it was
mandated by a standard police protocol. Once the bank employees identified Simone, Lound had
probable cause to arrest and the inventory search would have happened without regard to any
allegedly unlawful search. See United States v. Kennedy, 61 F.3d 494, 497-98 (6th Cir. 1995).
Defendant proceeded to a jury trial and was convicted of all counts on October 20, 2011. (R.
57) The Presentence Report (PSR) recommended that the district court impose guidelines
enhancements based on loss amount, theft from a person, and for sophisticated means, under USSG
§§ 2B1.1(b)(1)(B), (b)(3), and (b)(10)(C). (Page ID #778) Neither the PSR nor the parties addressed
whether the obstruction of justice enhancement under § 3C1.1 should apply. The week before
sentencing, the district court notified the parties that it was considering imposing a sentence above
the guidelines. (Page ID #912)
At sentencing, the district court applied not only the loss, theft, and sophisticated means
enhancements, but also the two-level enhancement for obstruction of justice. (Page ID #896) The
court premised this last calculation on Government trial exhibits that consisted of post-arrest notes
from Simone to co-defendant Kirkby urging her either not to talk with law enforcement or to
4
affirmatively lie by exculpating him. (Page ID #895-96) Commenting on one such note, which
stated, “[t]ell them in court that I had nothing to do with anything,” the district court noted, “[a]t the
very least that’s obstruction of justice. It may even be suborning perjury.” (Page ID #896)
The enhancements resulted in a criminal history category IV and an offense level of 15,
which produced an advisory range of 30 to 37 months on Counts 1 and 2. Simone objected to the
obstruction enhancement. He argued that he should receive a sentence below the guidelines because
co-defendant Kirkby had been more involved in the conspiracy but had received only a one-year
sentence. (Page ID #898)
Before imposing a sentence, the district court noted the advisory nature of the guidelines,
considered the “extensive, elaborate [and] serious” nature of the scheme, and noted the serious
nature of identity-theft as a species of fraud. (Page ID #909-910) The court assessed the scope and
nature of defendant’s “lengthy criminal history of theft offenses, of drugs, and of violence,”
concluding it was “really not a very pretty picture overall.” (Page ID #910) The district court
imposed a 48-month sentence on Counts 1 and 2, which was 11 months over the advisory guidelines
range, followed by the mandatory 24-month sentence for Count 3. (Page ID #911)
This court has held that a sentence is procedurally unreasonable if the district court
incorrectly calculates the guideline scoring range, finds the guidelines to be mandatory, fails to
consider § 3553(a) factors, selects a sentence based on clearly erroneous facts or fails to adequately
explain a sentence. United States v. Baker, 559 F.3d 443, 448 (6th Cir. 2009). In this case defendant
argues that the court improperly enhanced the adjusted offense level by relying on exhibits that had
been redacted for trial and that were therefore incomplete, and that the court did not adequately
explain the basis for its ruling.
5
The exhibits were admitted at trial and therefore were part of the record in this case. It was
not unreasonable for Judge Neff, as the sentencing judge, to consider the notes in the context of the
case as a whole in calculating the appropriate Guideline range. As for explaining the basis for her
ruling, Judge Neff made clear that she felt Simone did not accept responsibility in this case, and in
fact attempted to obstruct justice and possibly to suborn perjury. (Page ID #896) Judge Neff
explained that her reasons for going 11 months over the Guideline range were to deter and to protect
the public, given her strong belief that Simone was likely to reoffend. (Page ID #911)
Simone’s substantive due process argument is based on the disparity of his sentence
compared to Kirkby’s sentence. “A district judge is not required to consider the disparity between
the sentences of co-defendants.” United States v. Wallace, 597 F.3d 794, 803 (6th Cir. 2010). The
district court stated its reasoning for imposing a sentence that was 11 months above the advisory
guidelines range: “I think that to deter, to protect the public, particularly as I said in response to my
belief that Mr. Simone’s history makes him highly likely to reoffend, . . . we therefore need to keep
him out of circulation for as long as possible.” (Page ID #911) The disparity between Simone’s and
Kirkby’s sentences is readily explained by the fact that Simone’s criminal history was far more
extensive than Kirkby’s, and Kirkby received a three-level downward departure for testifying at trial
and providing substantial assistance that resulted in sentences for others involved in the overarching
fraud conspiracy.
Accordingly, we AFFIRM the district court’s judgment.
6
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2446538/
|
5 A.3d 21 (2010)
HARDING
v.
KING.
No. 09-CV-483.
District of Columbia Court of Appeals.
September 30, 2010.
DECISION WITHOUT PUBLISHED OPINION
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/8326463/
|
Hines, Geraldine S., J.
Plaintiff Norma H. Graham (“plaintiff’) brought this action against the creditors, mortgage brokerage corporation, mortgage brokers, real estate attorney, and the foreclosure auctioneer allegedly involved in the initial purchase and financing of, and ultimate foreclosure on, the plaintiffs home. This action is before the court on the plaintiffs motion for partial summary judgment as to the auctioneer defendant Edward A. Sweeney’s (“defendant”) liability for “unfair or deceptive trade practices” under the Massachusetts Consumer Protection Act, see G.L.c. 93A. For the following reasons, the plaintiffs motion is DENIED.
BACKGROUND
The undisputed facts, taken in the light most favorable to the defendant, are as follows. The plaintiff resides in her home at 19-21 Vera Street in Dorchester, Massachusetts (“property”), which she purchased in December 2005. She financed the purchase using loans secured by a first and second mortgage on the property. In an assignment dated December 20, 2005 and recorded at the Registry of Deeds on October 11, 2007, the mortgage lender Aames Funding Corporation (“Aames”) purportedly conveyed the first mortgage to Deutsche Bank National Trust Company (“Deutsche Bank”), as trustee for Soundview Home Loan Trust 2006-2 (“Soundview”). The plaintiff contends that Soundview was not created until a March 1, 2006 Pooling & Servicing Agreement.
After making her mortgage payments for approximately two years, the plaintiff defaulted. On March 3, 2008, the defendant, a licensed auctioneer employed by Commonwealth Auction Associates, Inc. (“Commonwealth”), conducted a foreclosure auction of the Vera Street property and Deutsche Bank purchased it. While the plaintiff alleges that Deutsche Bank engaged the defendant to conduct the auction, the defendant asserts that his employer assigned him to conduct the foreclosure. According to an affidavit filed by Ira D. Tarlin, the Treasurer of Commonwealth, Commonwealth was retained by Harmon Law Offices, P.C. to conduct the auction.
The defendant Sweeney concedes that between November 27, 2007, the auction’s originally scheduled date, and the actual date of auction in March 2008, he made no effort to determine whether his client had legal authority to foreclose on the house and did not attempt to ascertain the value of the property.
The plaintiff filed the complaint in this case on October 15, 2009 alleging claims against the parties involved in financing her mortgage and the subsequent foreclosure action. The plaintiff filed a motion for partial summary judgment on the defendant’s liability for unfair or deceptive trade practices in violation of G.L.c. 93A and that motion is now before the court.
DISCUSSION
The court will grant summary judgment where there is no genuine dispute of material fact and the plaintiff is entitled to judgment as a matter of law. Mass.R.Civ.P. 56(c). The plaintiff, as the moving party, bears the burden of affirmatively demonstrating the absence of a triable issue and that she is entitled to judgment as a matter of law based on summary judgment. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). The plaintiff will satisfy this burden by showing that the defendant is unlikely to prove an essential element at trial. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 739 (1991) (citation omitted). In assessing the plaintiffs motion for summary judgment, the court will view the facts in the light most favorable to the defendant as the non-moving party. Terra-Nova v. Fray-Witzer, 449 Mass. 406, 411 (2007). However, in opposing the motion for summary judgment, the defendant cannot rest on his pleadings or bare assertions of disputed facts. LaLonde v. Eissner, 405 Mass. 207, 209 (1989).
The Massachusetts Consumer Protection Act creates a private right of action for consumers injured by a party’s “unfair or deceptive acts or practices in the conduct of any trade or commerce.” G.L.c. 93A, §§2(a), 9; see also Leardi v. Brown, 394 Mass. 151, 160 (1985) (the consumer must show that the practices caused an injury by demonstrating a “loss of money or property” or “an invasion of a legally protected interest”). According to the attorney general’s regulations, an act is unfair or deceptive in violation of G.L.c. 93A, §2, if “(i]t fails to comply with existing statutes, rules, regulations or laws, meant for the protection of the public’s health, safety or welfare promulgated by the Commonwealth or any political subdivision thereof intended to *223provide the consumers of this Commonwealth protection.” 940 Code Mass.Regs. §3.16(3) (1993). As such, when a party violates a statute intended to protect consumers, it may be subject to liability under G.L.c. 93A. See Hershenow v. Enterprise Rent-A-Car Co. of Boston, 445 Mass. 790, 795.
In this case, the plaintiff alleges that the defendant engaged in unfair or deceptive trade practices in violation of G.L.c. 93A when he conducted an unlawful foreclosure auction of her home in violation of G.L.c. 244, §14.2 The plaintiff contends that, although Aames purported to assign the mortgage to Soundview on December 20, 2005, Soundview did not exist until the March 1, 2006 Pooling & Service Agreement. Because Soundview did not exist at the time of the assignment, the plaintiff argues that the assignment is void and that Deutsche Bank therefore did not have the power to conduct the foreclosure under G.L.c. 244, § 14. Accordingly, the plaintiff alleges that the defendant conducted an unlawful foreclosure auction under G.L.c. 244, §14, constituting an unfair or deceptive trade practice in violation of G.L.c. 93A, §2. See 940 Code Mass. Regs. §3.16(3).
Assuming that the plaintiff is correct that the assignment was defective and the foreclosure sale was therefore unlawful under G.L.c. 244, §14, the court will nonetheless decline to allow the plaintiffs motion for partial summary judgment as to the defendant’s liability under G.L.c. 93A. In her motion for partial summary judgment, the plaintiffs arguments focus on Deutsche Bank’s, not the defendant’s, alleged violations of G.L.c. 244, §14. The plaintiff has not offered any evidence that implicates the defendant directly in any violations, knowing or otherwise, of the statute. The statute is binding on “(t]he mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person.” G.L.c. 244, §14. General Laws c. 244, §14, does not discuss or imply the powers or duties of the auctioneer. More importantly, the plaintiff has not cited any legal authority imposing on the defendant an independent legal duty to examine Deutsche Bank’s authority to pursue foreclosure on the home.3 Accordingly, the court finds that the plaintiff has not presented sufficient evidence to demonstrate she is entitled to judgment as a matter of law.
ORDER
For the foregoing reasons, it is hereby ORDERED that the plaintiffs motion for partial summary judgment be DENIED.
General Laws c. 244, §14, provides in relevant part “[t]he mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power.”
The authorities cited by the plaintiff in order to establish the auctioneer’s duty are insufficient because they suggest a duty on the part of the mortgagee, and do not impose an independent duty on the auctioneer. See, e.g., Union Market Nat’l Bank of Watertown v. Derderian, 318 Mass. 578, 582 (1945) (internal quotations omitted) (“[a] mortgagee’s duty is more exacting when it becomes the buyer of the property, where he will be held to the strictest good faith and the utmost diligence for the protection of the rights of his principal”); Clark v. Simmons, 150 Mass. 357, 359 (1890) (mortgagee has duty to “obtain for the property as large a price as possible”).
|
01-03-2023
|
10-17-2022
|
https://www.courtlistener.com/api/rest/v3/opinions/1873956/
|
752 N.W.2d 35 (2008)
SNYDER
v.
FELTON.
No. 07-0617.
Court of Appeals of Iowa.
April 9, 2008.
Decision without published opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2044773/
|
87 N.Y.2d 384 (1995)
663 N.E.2d 289
639 N.Y.S.2d 977
Peter Dalton, as Parent and Natural Guardian of Brian M. Dalton, an Infant, Respondent,
v.
Educational Testing Service, Appellant.
Court of Appeals of the State of New York.
Argued October 19, 1995
Decided December 7, 1995.
White & Case, New York City (Philip H. Schaeffer, J. Stepan Wood and William R. Spiegelberger of counsel), and Wilmer, Cutler & Pickering (Bruce Berman and Michael F. Bennet, of the District of Columbia Bar, admitted pro hac vice, of counsel), for appellant.
Nicolosi & Sciacca, Bayside (Vincent F. Nicolosi and Laurie S. Hershey of counsel), for respondent.
Judges TITONE, BELLACOSA, SMITH and CIPARICK concur with Chief Judge KAYE; Judge LEVINE dissents and votes to reverse in a separate opinion in which Judge SIMONS concurs.
*386Chief Judge KAYE.
The primary question before us is whether defendant, Educational Testing Service (ETS), a standardized testing firm, complied with procedures specified in its contract with high school senior Brian Dalton in refusing to release Dalton's Scholastic Aptitude Test (SAT) score. Because the factual findings underlying the trial court's determination that ETS failed to act in good faith in following those procedures were affirmed by the Appellate Division, have support in the record and are consequently beyond the scope of our review, we conclude as did the trial court and Appellate Division that ETS breached its contract with Dalton. Though we agree, moreover, with the *387 courts below that specific performance is the appropriate remedy, we nevertheless conclude that the promised performance was good-faith compliance with the stated procedures, not release of the questioned scores as ordered by those courts.
I
In May 1991, Brian Dalton took the SAT, which was administered by ETS, at Holy Cross High School in Queens where Dalton was a junior. Six months later, in November, he took the examination a second time, as a senior, this time at John Bowne High School in Queens, and his combined score increased 410 points.
Because Dalton's score increased by more than 350 points, his test results fell within the ETS category of "Large Score Differences" or "discrepant scores." In accordance with ETS policy, members of the ETS Test Security Office therefore reviewed his May and November answer sheets. Upon a finding of disparate handwriting, the answer sheets were submitted to a document examiner, who opined that they were completed by separate individuals. Dalton's case was then forwarded to the Board of Review, which preliminarily decided that substantial evidence supported cancelling Dalton's November score.
Upon registering for the November SAT, Dalton had signed a statement agreeing to the conditions in the New York State edition of the Registration Bulletin, which reserved to ETS "the right to cancel any test score * * * if ETS believes that there is reason to question the score's validity." The Registration Bulletin further provided that, if "the validity of a test score is questioned because it may have been obtained unfairly, ETS [will] notif[y] the test taker of the reasons for questioning the score" and offer the test-taker the following five options: (1) the opportunity to provide additional information, (2) confirmation of the score by taking a free retest, (3) authorization for ETS to cancel the score and refund all fees, (4) third-party review by any institution receiving the test score or (5) arbitration.
As specified in the Registration Bulletin, ETS apprised Dalton of its preliminary decision to cancel his November SAT score in a letter from Test Security Specialist Celeste M. Eppinger. Noting the handwriting disparity and the substantial difference between his May and November test results, Eppinger informed Dalton that "[t]he evidence suggests that *388 someone else may have completed your answer sheet and that the questioned scores may be invalid." She advised him that he could supply "any additional information that will help explain" this or, alternatively, elect one of the other options.
Eppinger enclosed the Procedures for Questioned Scores pamphlet with her letter, which reiterated the test-taker's right to "submit additional relevant information" to the Board of Review supporting the validity of questioned scores. In cautioning test-takers to provide only information "relevant to the questions being raised," the Procedures for Questioned Scores explained, "[f]or example, character references or testimonial letters do not explain handwriting differences." As to the four additional options, the guide further explained, "ETS also offers other options * * * if additional information doesn't resolve the questions about the validity of the scores. The option to provide additional information to resolve these questions may be used in combination with one or more of the[se] options."
Dalton opted to present additional information to the Board of Review, including the following: verification that he was suffering from mononucleosis during the May examination; diagnostic test results from a preparatory course he took prior to the November examination (he had taken no similar course prior to the May SAT) that were consistent with his performance on that test; a statement from an ETS proctor who remembered Dalton's presence during the November examination; and statements from two students one previously unacquainted with Dalton that he had been in the classroom during that test. Dalton further provided ETS with a report from a document examiner obtained by his family who concluded that Dalton was the author of both sets of answer sheets.
ETS, after several Board of Review meetings, submitted the various handwriting exemplars to a second document examiner who, like its first, opined that the May and November tests were not completed by the same individual. As a result, ETS continued to question the validity of Dalton's November score.
At this point plaintiff Peter Dalton, father and natural guardian of Brian Dalton, filed a CPLR article 78 proceeding, later converted to an action at law, to prohibit ETS from cancelling Dalton's November SAT score and to compel immediate release of the score. Following a 12-day nonjury trial, the trial court found that ETS failed "to make even rudimentary efforts to evaluate or investigate the information" furnished by *389 Dalton and thus concluded that ETS failed to act in good faith in determining the legitimacy of Dalton's score, thereby breaching its contract (155 Misc. 2d 214, 225). The trial court premised this conclusion on its determination that the ETS Board of Review members failed to evaluate the information submitted because they believed Dalton's presence at the November SAT to be wholly irrelevant to the handwriting issue and that he could controvert the Board's preliminary finding that the score was invalid solely by taking a retest. As a remedy for the contractual breach, the trial court ordered ETS to release the November SAT score.
The Appellate Division affirmed. It too found that ETS ignored the documentation provided by Dalton and considered only the reports of its own document examiners. Like the trial court, the Appellate Division concluded that this failure to evaluate as well as to investigate Dalton's information constituted a breach of contract. In light of these factual determinations, we agree that ETS breached its contract with Dalton but differ as to the scope of the relief.
II
By accepting ETS' standardized form agreement when he registered for the November SAT, Dalton entered into a contract with ETS (see, AEB & Assocs. Design Group v Tonka Corp., 853 F Supp 724, 732). Implicit in all contracts is a covenant of good faith and fair dealing in the course of contract performance (see, Van Valkenburgh, Nooger & Neville v Hayden Publ. Co., 30 N.Y.2d 34, 45, cert denied 409 U.S. 875).
Encompassed within the implied obligation of each promisor to exercise good faith are "`any promises which a reasonable person in the position of the promisee would be justified in understanding were included'" (Rowe v Great Atl. & Pac. Tea Co., 46 N.Y.2d 62, 69, quoting 5 Williston, Contracts § 1293, at 3682 [rev ed 1937]). This embraces a pledge that "neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract" (Kirke La Shelle Co. v Armstrong Co., 263 N.Y. 79, 87). Where the contract contemplates the exercise of discretion, this pledge includes a promise not to act arbitrarily or irrationally in exercising that discretion (see, Tedeschi v Wagner Coll., 49 N.Y.2d 652, 659). The duty of good faith and fair dealing, however, is not without limits, and no obligation can be implied that "would be inconsistent with other terms of the contractual relationship" (Murphy v American Home Prods. Corp., 58 N.Y.2d 293, 304).
*390The parties here agreed to the provisions in the Registration Bulletin, which expressly permit cancellation of a test score so long as ETS found "reason to question" its validity after offering the test-taker the five specified options. Nothing in the contract compelled ETS to prove that the test-taker cheated. Nor did the invitation to the test-taker to furnish ETS with relevant information reasonably and realistically translate into any requirement that ETS conduct a field investigation or gather evidence to verify or counter the test-taker's documentation. Indeed, such an obligation would be inconsistent with the contractual language placing the burden squarely on the test-taker to overcome the ETS finding of score invalidity. ETS, therefore, was under no duty, express or implied, to initiate an external investigation into a questioned score.
The contract, however, did require that ETS consider any relevant material that Dalton supplied to the Board of Review. The Registration Bulletin explicitly afforded Dalton the option to provide ETS with relevant information upon notification that ETS questioned the legitimacy of his test score. Having elected to offer this option, it was certainly reasonable to expect that ETS would, at the very least, consider any relevant material submitted in reaching its final decision.
Dalton triggered this implied-in-law obligation on the part of ETS by exercising his contractual option to provide ETS with information (compare, Matter of Yaeger v Educational Testing Serv., 158 AD2d 602 [where test-taker declined to invoke any of the proffered options, ETS cancelled score in good faith and in accordance with terms of the contract]). Significantly, Dalton heeded the advice in the Procedures for Questioned Scores and tendered numerous documents that did more than simply deny allegations of wrongdoing or attest to his good character, such as medical evidence regarding his physical condition, statements by fellow test-takers, the statement of a classroom proctor and consistent diagnostic test results (compare, Swencki v Educational Testing Serv., No. C 81-0689 [WD KY] [test-taker sent letter to ETS explaining that he could not have cheated]; Matter of K. D. v Educational Testing Serv., 87 Misc. 2d 657 [test-taker submitted sworn statement that he did not cheat]).
Nevertheless, with the exception of the document examiner's report, ETS disputes the relevancy of this information. Specifically, ETS maintains that the sole issue before the Board of Review was the disparate handwriting and that evidence regarding Dalton's health (apart from a damaged arm) or presence during both examinations is irrelevant to resolving that issue.
*391To be sure, the Procedures for Questioned Scores warned Dalton "to provide only additional information that is relevant to the questions being raised." The Eppinger letter to Dalton, however, informed him that his November score was possibly invalid precisely because ETS believed "that someone else may have completed [his] answer sheet." Thus, ETS expressly framed the dispositive question as one of suspected impersonation. Because the statements from the classroom proctor and November test-takers corroborated Dalton's contention that he was present at and in fact took the November examination, they were relevant to this issue.
Likewise, inasmuch as the medical documentation concerning Dalton's health at the time of the May SAT provided an explanation for his poor performance on that examination, and the consistent diagnostic test results demonstrated his ability to achieve such a dramatic score increase, these items were also germane to the question whether it was Dalton or an imposter who completed the November examination. Indeed, in its manual, Policies and Procedures Concerning Scores of Questionable Validity which details internal ETS procedure regarding questioned scores ETS offers several examples of "relevant information" that a test-taker might provide, including "a doctor's report that the candidate was under the influence of medication at the time the low score was earned." Regarding "a case of possible impersonation" in particular, the manual suggests that "other test results might demonstrate that the questioned score is not inconsistent with other measures of the candidate's abilities." Thus, Dalton's material fell within ETS' own definition of relevancy, as expressed in its manual and letter to Dalton.
The critical question then is whether the Board of Review made any effort to consider this relevant information submitted by Dalton. That is a factual inquiry. Both the trial court and the Appellate Division concluded that the Board utterly failed to evaluate the material. Given these affirmed findings, "our scope of review is narrow. This Court is without power to review findings of fact if such findings are supported by evidence in the record" (Humphrey v State of New York, 60 N.Y.2d 742, 743).
Several Board of Review members each member alone had the power to order release of Dalton's November score testified that they believed information establishing Dalton's presence during the November examination to be irrelevant to *392 their determination[*] and, moreover, that only a successful retest would validate Dalton's score. Thus, there is support in the record for the factual determinations of the trial court and Appellate Division and they are binding on us. This is so notwithstanding inconsistent testimony by Board members that the Board did review Dalton's information but found it unpersuasive. In light of the affirmed findings, the Court of Appeals simply does not have authority to weigh conflicting evidence and make its own factual determinations, as the dissent would do.
Consequently, this case is factually distinct from those relied upon by ETS, where the testing service considered but then rejected information provided by the test-taker (see, e.g., Langston v ACT, 890 F.2d 380; Denburg v Educational Testing Serv., No. C-1715-83 [NJ Super Ct]; cf., Johnson v Educational Testing Serv., 754 F.2d 20, 26, cert denied 472 U.S. 1029 [noting that ETS provided test-taker with opportunity to be heard and to be represented by counsel]). When ETS fulfills its contractual obligation to consider relevant material provided by the test-taker and otherwise acts in good faith, the testing service not the courts must be the final arbiter of both the appropriate weight to accord that material and the validity of the test score. This Court will not interfere with that discretionary determination unless it is performed arbitrarily or irrationally.
Where, however, ETS refuses to exercise its discretion in the first instance by declining even to consider relevant material submitted by the test-taker, the legal question is whether this refusal breached an express or implied term of the contract, not whether it was arbitrary or irrational. Here, the courts below agreed that ETS did not consider the relevant information *393 furnished by Dalton. By doing so, ETS failed to comply in good faith with its own test security procedures, thereby breaching its contract with Dalton.
The dissent urges that because the trial court and Appellate Division relied in part on ETS' failure to investigate Dalton's information, they arguably employed an erroneous legal standard. Overlooked, however, is that both courts also concluded that ETS' refusal to evaluate the material breached the contract with Dalton and, thus, employed a correct legal standard. Moreover, the crucial factual inquiry under the correct standard whether ETS considered Dalton's relevant material has already been resolved by those courts. Because this factual finding dictates the legal conclusion that ETS breached the contract, remittal is unnecessary.
III
We agree with the trial court and Appellate Division that Dalton is entitled to specific performance of the contract. Dalton is not, however, entitled to release of his score as though fully validated. The goal of specific performance is to produce "as nearly as is practicable, the same effect as if the contract had been performed" (Farnsworth, Contracts § 12.5, at 823 [1982]). Had the contract here been performed, ETS would have considered the information provided by Dalton in reaching a final decision. ETS never promised to release a score believed to be invalid, and the validity of Dalton's November SAT score has yet to be determined. Indeed, the trial court specifically noted that it was not resolving the question whether Dalton in fact took the November test.
In an analogous context, we have refused to compel a university to issue a degree to a student who had not fulfilled the academic requirements (see, Matter of Olsson v Board of Higher Educ., 49 N.Y.2d 408). This reluctance to interfere with the exercise of academic discretion is motivated by sound considerations of public policy. "When an educational institution issues a diploma to one of its students, it is, in effect, certifying to society that the student possesses all of the knowledge and skills that are required by his [or her] chosen discipline" (id., at 413). Likewise, we have held that a college did not act arbitrarily in declining to "round off" a student's failing grade so that she could graduate (see, Matter of McIntosh v Borough of Manhattan Community Coll., 78 AD2d 839, affd 55 N.Y.2d 913).
The comparison between ETS and academic institutions is surely not exact, inasmuch as judicial restraint in matters of *394 academic achievement is based, in part, on the inherently subjective nature of the evaluation to be made by professional educators (see, Tedeschi v Wagner Coll., 49 N.Y.2d 652, 658, supra). Still, similar policy concerns militate against directing ETS to release a questioned score. When a standardized testing service reports a score, it certifies to the world that the test-taker possesses the requisite knowledge and skills to achieve the particular score. Like academic credentials, if courts were to require testing services to release questioned scores, "the value of these credentials from the point of view of society would be seriously undermined" (Olsson, supra, at 413). Given the reliance that students, educational institutions, prospective employers and others place on the legitimacy of scores released by ETS, requiring challenged scores to be reported would be contrary to the public interest and exceed the scope of ETS' promised performance.
While courts as a matter of policy are reluctant to intrude upon academic discretion in educational matters, they stand ready as a matter of law and equity to enforce contract rights. Where a contract is breached, moreover, and the injured party is entitled to specific performance, the remedy must be a real one, not an exercise in futility.
Dalton is entitled to relief that comports with ETS' contractual promise good-faith consideration of the material he submitted to ETS. We cannot agree with Dalton's assumption that ETS will merely rubber-stamp its prior determination without good-faith attention to his documentation and that reconsideration by ETS will be an empty exercise. Our conclusion that the contract affords Dalton a meaningful remedy rests also on the provision in the Procedures for Questioned Scores allowing Dalton to utilize one or more of the remaining four options in combination with renewed consideration by the Board of Review. Those options including third-party review by any institution receiving the test score as well as arbitration remain available should ETS determine that the information submitted fails to resolve its concerns about the validity of the November score.
Accordingly, the Appellate Division order should be modified in accordance with this opinion and, as so modified, affirmed, without costs.
LEVINE, J. (dissenting).
I agree with the majority that the Educational Testing Service (ETS) had no duty, express or implied, to investigate the information submitted by Brian *395 Dalton. However, I do not agree that we are bound by the factual determinations of the lower courts, which are based on an erroneous legal standard, or that the record contains any evidence that ETS arbitrarily failed to consider the materials submitted by Dalton. I, therefore, respectfully dissent.
A primary obligation of ETS as administrator of the SAT and other scholastic aptitude tests heavily relied upon by institutions of higher education is to certify that released scores accurately reflect the performance on the test of the identified test taker. The college admission process is highly dependent on the authenticity of the SAT scores released by ETS, as are other test takers whose scores are valued in relation to those of all others who take the exam and are competing for admission. In order to ensure the reliability of its certification process, ETS has established elaborate procedures that balance the harms to institutions and other candidates of the release of possibly invalid scores against the detriment to students whose scores are challenged as potentially invalid. The procedures established by ETS are unquestionably fair; they give test takers whose scores are questioned opportunity after opportunity to validate their scores. In the end, however, ETS as a practical necessity must be the final arbiter of whether it can honestly certify the validity of a student's score. Thus, the standard contract between ETS and test takers reserves to ETS the right "to cancel any test score * * * if ETS believes that there is reason to question the score's validity [emphasis supplied]."
Peter Dalton, Brian Dalton's father, brought this suit based on the claim that ETS treated Brian Dalton unfairly because it did not conduct a thorough investigation of the material Brian submitted to ETS when his scores were questioned. The trial court accepted Dalton's argument.[*] Thus, to support its conclusion that ETS failed "to make even rudimentary efforts to evaluate or investigate the information furnished by" Dalton and thus failed to act in good faith in carrying out its obligations to Dalton, the court pointed to ETS's failure to make contact with or question the proctor, the test administrator, or other students who gave evidence that tended to show that Dalton was present, and to ETS's refusal to conduct fingerprint *396 or lie detector tests on Dalton (155 Misc. 2d 214, 225). Likewise, the Appellate Division clearly considered ETS's failure to investigate as a factor in its ultimate conclusion that ETS acted without good faith: "The practice of ignoring Dalton's evidence without even initiating a preliminary investigation clearly demonstrate a lack of good faith by ETS" (206 AD2d 402, 403 [emphasis supplied]).
My colleagues in the majority here, however, correctly conclude that ETS had no express or implied duty to investigate. Thus, it seems indisputable that the ultimate determinations of the courts below that ETS breached its implied covenant of good faith and fair dealing were reached at least in significant part by reliance on an erroneous legal standard, that ETS had a duty to investigate. Thus, at a minimum, reversal and remittal for new findings based on the proper legal standard is required here.
However, applying the correct legal standard to the record evidence, it is my conclusion that ETS fulfilled its contractual obligations as a matter of law and, therefore, we should reverse and dismiss the Daltons' complaint.
As the Chief Judge concludes, ETS was contractually obligated to consider any relevant material that Dalton supplied the Board of Review (majority opn, at 390). After considering that evidence, ETS had the stated right to cancel Dalton's test score if it possessed "a reason to question" the score's validity. Thus, it seems self-evident that ETS expressly reserved to itself substantial discretion on whether to refuse to certify a test score.
To be sure, there is a covenant of good faith and fair dealing implicit in the contract between Dalton and ETS (see, Rowe v Great Atl. & Pac. Tea Co., 46 N.Y.2d 62, 68; Van Valkenburgh, Nooger & Neville v Hayden Publ. Co., 30 N.Y.2d 34, 45, cert denied 409 U.S. 875). It requires that "neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract" (Kirke La Shelle Co. v Armstrong Co., 263 N.Y. 79, 87). In this way, the implied covenant "is in aid and furtherance of other terms of the agreement of the parties. No obligation can be implied, however, which would be inconsistent with other terms of the contractual relationship" (Murphy v American Home Prods. Corp., 58 N.Y.2d 293, 304 [rejecting application of implied covenant to at-will employment contracts]). Where good faith is an express condition of a contract that contemplates a wide scope of discretion on the part of one party, there *397 is no breach if the discretionary act performed is "not arbitrary and capricious" (Smith v Robson, 148 N.Y. 252, 255; see also, 3A Corbin, Contracts § 647, at 104-106). The implied covenant does no more; it works only to ensure that a party with whom discretion is vested does not act arbitrarily or irrationally (see, e.g., Tedeschi v Wagner Coll., 49 N.Y.2d 652, 659).
Thus, the issue here is whether there is evidence that ETS performed its discretionary functions arbitrarily or irrationally, or with bad faith in fact (cf., Langston v ACT, 890 F.2d 380, 386; Johnson v Educational Testing Serv., 754 F.2d 20, cert denied 472 U.S. 1029 [American College Testing Program only contractually required to act in good faith]).
Here, there was no evidence of bad faith in fact. Moreover, ETS had two definitive reports of highly qualified handwriting experts, of proven reliability, that the November 1991 answer sheet was filled out by someone other than the person who filled out the May 1991 exam answer sheet and the documents known to have been signed or produced by Brian Dalton. Surely it was not irrational or arbitrary for ETS to find that the unexplained disparate handwriting on the November 1991 answer sheet gave it reason to question the validity of the second test score. The courts below did not find otherwise. Nor can it be said that, as a matter of law, the evidence submitted by Dalton totally obviated the reasons ETS had to question the test score. It was, therefore, not a breach of the implied covenant of good faith to refuse to certify Dalton's scores after consideration of the evidence submitted, and the majority does not so hold.
Rather the majority holds that there is evidence that ETS breached its implied covenant of good faith in its deliberative process in failing "to consider" Dalton's submissions (majority opn, at 391). However, the uncontroverted evidence accepted by the courts below and the majority here is that when ETS received the information submitted by Dalton it did not totally disregard it. Rather, it considered it and judged it weighty enough to merit further evaluation. Thus, it is undeniable that ETS responded to the submissions by retaining another handwriting expert to get a third evaluation of the documents. In addition, ETS submitted Dalton's additional handwriting samples to its first handwriting expert for a second evaluation.
To overcome this concrete evidence of consideration, the majority points to selectively narrow portions of the record in which ETS Board of Review members testified that they deemed irrelevant Dalton's evidence that tended to show he *398 was in the room on the day the test was given as evidence that ETS "failed to consider" Dalton's submissions, which in turn supported the determination of its breach of the implied covenant of good faith and fair dealing. I disagree.
Again, it is uncontroverted that each member of the ETS Board of Review gave a reason why he or she found Dalton's submissions irrelevant. Therefore, a breach of the implied covenant of good faith and fair dealing could only be established if the reason the Board members gave to deem irrelevant Dalton's submissions was arbitrary, capricious or irrational. Each Board member testified that the evidence did not explain their one lingering crucial doubt, the disparate handwriting, which was the exact doubt communicated to Dalton by ETS "someone else may have completed [the] answer sheet" (Dec. 11, 1991 letter to Brian Dalton). Because the reason to deem irrelevant Dalton's evidence of presence was not irrational, arbitrary or capricious it cannot, as a matter of law, form the basis of a breach of the implied covenant of good faith. It is only by substituting its judgment for that of ETS as to what should have been deemed relevant evidence that the majority finds evidence of bad faith. However, "[w]hen an [institutional decision maker] * * * acts within its jurisdiction, not arbitrarily but in the exercise of an honest discretion based on facts within its knowledge that justify the exercise of discretion, a court may not review the exercise of its discretion" (Matter of Carr v St. John's Univ., 17 AD2d 632, 634, affd 12 N.Y.2d 802; see also, Matter of Harris v Trustees of Columbia Univ., 98 AD2d 58, 70 [Kassal, J., dissenting], revd on dissenting opn below 62 N.Y.2d 956).
In sum, ETS acted within its discretion in continuing the security process rather than releasing the score after considering and rejecting Dalton's evidence. There is no evidence that ETS acted arbitrarily in its discretionary decision-making process. Hence there is no evidence that ETS breached any express or implied covenant in its contract with Dalton. Accordingly, I would reverse the order of the Appellate Division and dismiss the complaint.
Order modified in accordance with the opinion herein and, as so modified, affirmed, without costs.
NOTES
[*] For example, when Shirley Kane-Orr chairperson of the Board of Review and a member of the three-member panel of the Board that initially reviewed Dalton's case on December 11, 1991, the panel that again considered his case on January 3d, 1992, and the final panel to review Dalton's case on February 7, 1992 was asked whether she "or any member of the panel or the test security office ever question[ed] [Dalton's] presence in the classroom," she answered, "[n]o"; when further asked by Dalton's counsel, "[s]o am I to assume * * * that since you didn't question his presence in the classroom, that it was not an issue in this case," she responded, "[i]t was a non-issue in the sense that [it] was not an issue at all to be considered whether or not he was in the classroom." Likewise, Sydell Carlton, member of the panel that considered Dalton's case on January 17, 1992, was also asked whether she ever questioned Dalton's presence in the classroom, to which she replied, "[t]hat was not an issue for us to decide. The issue for us to decide was, why are those handwritings disparate? His presence in the room was not, for us, in issue."
[*] Notably, Dalton's scores had not been finally cancelled at the inception of this suit. Dalton had been offered, but refused, the opportunity to validate his scores by taking another test at the expense of ETS and scoring within a specified range of his November score, or to submit the matter to arbitration.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600717/
|
41 P.3d 154 (2001)
Hassan ZOK, Appellant,
v.
MUNICIPALITY OF ANCHORAGE, Appellee.
No. A-7863.
Court of Appeals of Alaska.
December 14, 2001.
Hassan Zok, pro se, Anchorage, for Appellant.
John E. McConnaughy III, Assistant Municipal Prosecutor, and William A. Greene, Municipal Attorney, Anchorage, for Appellee.
Before: COATS, Chief Judge, and MANNHEIMER and STEWART, Judges.
OPINION
STEWART, Judge.
In November 1999, the district court entered a default judgment against Hassan Zok for failing to respond to a traffic citation. Nearly a year after this judgment was entered, Zok filed a "Request and Order to Set Aside Judgment." He alleged in this request that he had not received notice of any hearing. The Municipality opposed, countering that Zok had never requested a hearing as provided in the traffic citation he received. *155 The Municipality also asserted that Zok had not carried his burden of showing that "good cause" existed for setting aside the judgment. Magistrate Ron Wielkopolski denied Zok's request, and Zok appeals. Because the record does not show that Zok was notified that a default judgment would be entered as required by District Court Criminal Rule 8(d)(5), we vacate the district court's order and remand for further proceedings.
Facts and Proceedings
On August 4, 1999, Zok was issued a citation for careless driving. The citation provided for an optional court appearance: Zok could either pay the fine listed on the citation, or appear in court within five days to contest the ticket. He did neither, and the court entered a default judgment on November 17, 1999. On November 6, 2000, Zok moved to have the default judgment set aside.
Zok sought relief from the judgment under District Court Criminal Rule 8(i) for "lack of notice." On the form Zok used to request that the default judgment be set aside, he admitted he had failed to respond to the ticket. And in an affidavit attached to the form, Zok admitted that he had not paid the fine or contacted the court as instructed by the citation. But Zok also claimed that he had not received notice of any hearing.
As set out above, the Municipality opposed Zok's request, asserting both that he had not requested a hearing and that he had not shown that there was good cause for setting aside the judgment. Magistrate Wielkopolski denied Zok's request.
Discussion
District Court Criminal Rule 8(d)(5) permits the district court to enter a judgment of conviction against a person who, like Zok, is charged with a minor offense and fails to respond within the required period.[1] However, this rule also provides that "[a]t least 15 days before judgment is entered, a notice advising the person of the consequences of a failure to respond must be sent to the person at the address on record with the Division of Motor Vehicles or the address shown on the citation." There is nothing in the record that shows that this notice was sent to Zok. Although the Municipality asserts that Zok waived this claim because he did not specifically cite Rule 8 in his argument below, looking at the pleadings in the light most favorable to Zok, and assuming his allegations to be true, his motion and his affidavit indicate that he sought to set aside the default judgment because he had not received notice under Rule 8(d)(5).
In this case, after judgment was entered, Zok sought relief under District Court Criminal Rule 8(i), which provides that "[u]pon a showing of good cause, the court may vacate or modify a judgment of conviction entered under (d)(5)." Although we have not previously decided in a published opinion what constitutes "good cause" to vacate a judgment under Rule 8, the general analysis of whether there is "good cause" to set aside a default judgment in the civil context includes three considerations: "1) whether the plaintiff will be prejudiced; 2) whether the defendant has a meritorious defense; and 3) whether culpable conduct of the defendant led to the default (whether he acted willfully or in bad faith)."[2] The moving party generally has to allege a meritorious defense,[3] and allege a "reason, such as *156 excusable neglect, for not answering on time."[4] We believe that these considerations are appropriate when determining whether "good cause" exists to vacate a default judgment under Rule 8.
However, under Pew v. Foster,[5] the requirement that the moving party show a meritorious defense does not apply when a due process violation is the basis for requesting relief from a default judgment.[6] Looking at Zok's request in the light most favorable to him, and assuming that his allegations are true, the court did not mail Zok the notice that a default judgment would be entered if he did not respond to the traffic citation. Thus, Zok's request to set aside the judgment was based on a lack of notice, a due process violation. Under Pew, this lack of notice would justify vacating or setting aside the default judgment.
In light of Pew, the district court should have conducted a hearing to resolve this contested issuethat is, whether the court sent Zok the notice that the court intended to enter default judgment under Rule 8(d)(5). If the trial court determines that the court did not send Zok notice of the court's intention to enter default judgment, then the default judgment should be set aside.
Conclusion
The order of the district court denying Zok's request to set aside the judgment is VACATED and this case is REMANDED for proceedings consistent with this decision. We do not retain jurisdiction.
NOTES
[1] District Court Criminal Rule 8(a) provides that Rule 8 "is intended to provide for the just determination of [minor offenses] and to that effect shall be construed to secure simplicity and uniformity in procedure, fairness in administration and the elimination of unjustifiable expense and delay."
[2] Hertz v. Berzanske, 704 P.2d 767, 771 (Alaska 1985) superseded by statute on other grounds as stated in McConkey v. Hart, 930 P.2d 402, 407 n. 4 (Alaska 1996).
[3] See id. at 771 n. 5 ("... a default judgment will not be set aside, except in very unusual cases, unless the defendant has presented a meritorious defense.") (citing Gregor v. Hodges, 612 P.2d 1008, 1009-10 (Alaska 1980); Balchen v. Balchen, 566 P.2d 1324, 1328 n. 11 (Alaska 1977); Markland v. Fairbanks, 513 P.2d 658, 659-60 (Alaska 1973)); cf. Disciplinary Matter Involving Beconovich, 884 P.2d 1080, 1083 (Alaska 1994) ("respondent attorney must show a meritorious defense and excusable neglect to warrant relief from the operation of Bar Rule 22(a)," which provides that failure to answer grievance within prescribed time will be deemed an admission.).
[4] Gregor, 612 P.2d at 1009-10 (citing Balchen, 566 P.2d at 1328).
[5] 660 P.2d 447 (Alaska 1983).
[6] See 660 P.2d at 448-49.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600719/
|
30 Kan. App. 2d 210 (2001)
41 P.3d 293
STATE OF KANSAS, Appellee,
v.
ARNOLD E. JONES, Appellant.
No. 86,452[1]
Court of Appeals of Kansas.
Opinion filed November 16, 2001.
Randall L. Hodgkinson, assistant appellate defender, and Jessica R. Kunen, chief appellate defender, for appellant.
*211 Ron Ludwig, county attorney, and Carla J. Stovall, attorney general, for appellee.
Before PIERRON, P.J., ELLIOTT, J., and WAHL, S.J.
WAHL, J.:
Appellant Arnold E. Jones appeals the trial court's extension and revocation of his probation. He had entered a plea of guilty to one count of possession of cocaine in violation of K.S.A. 1998 Supp. 65-4160(a). A chronology of the dates pertinent to this case is helpful:
December 1, 1998: Jones was sentenced to the presumptive sentence of 24 months' probation under the supervision of community corrections, with an underlying prison term of 11 months.
May 25, 2000: K.S.A. 2000 Supp. 21-4611 took effect.
June 27, 2000: The State filed an application for revocation of Jones' probation.
July 7, 2000: The district judge notified the parties it would hold a hearing on August 4, 2000, to determine whether Jones' probation should be extended because Jones failed his drug tests, failed to maintain employment, and failed to complete necessary counseling.
August 4, 2000: Jones appeared and asked for a continuance of the hearings to extend his probation and to revoke his probation until September 1, 2000. The court continued the hearings until September 1, 2000.
September 1, 2000: Jones failed to appear because he was incarcerated in the McPherson County Jail on new charges. Jones' counsel appeared and agreed to an extension of Jones' probation. The court extended Jones' probation to December 1, 2000, the term imposed at his original sentencing, "for the reasons set forth in the motion for extension of probation." The hearing on the revocation of Jones' probation was set for October 2, 2000.
October 2, 2000: Jones appeared and requested a continuance of the hearing until December 1, 2000, which the court granted.
*212 October 27, 2000: The State filed a second application for revocation of probation for Jones again testing positive for cocaine, and a bench warrant was issued.
December 1, 2000: The district court revoked Jones' probation and ordered him to serve the prison portion of his sentence.
December 4, 2000: Jones filed his notice of appeal.
Jones argued the district court did not have jurisdiction to revoke his probation because the application for revocation was not filed until after K.S.A. 2000 Supp. 21-4611 took effect on May 25, 2000. Whether the district court has jurisdiction to revoke probation is a question of law over which this court's review is unlimited. State v. Williams, 20 Kan. App. 2d 142, 145, 884 P.2d 743 (1994).
The newly amended K.S.A. 21-4611 sets the nonprison sanction for a severity level 4 drug crime at a maximum of 12 months. K.S.A. 2000 Supp. 21-4611(c)(3). The statute also addresses the effect these provisions have on probationary periods already in existence:
"The provisions of subsection (c), as amended by this act, shall be applied retroactively. The sentencing court shall direct that a review of all persons serving a nonprison sanction for a crime ... in severity levels 3 or 4 of the sentencing guidelines grid for drug crimes be conducted. On or before September 1, 2000, the duration of such person's probation shall be modified in conformity with the provisions of subsection (c)." K.S.A. 2000 Supp. 21-4611(d).
Jones argued that with the statute's enactment effective May 25, 2000, his probation ended on December 1, 1999, 12 months after his sentence was originally imposed, and the district court did not have jurisdiction to extend or revoke his probation at any later time.
The Kansas Supreme Court rejected this argument in State v. Ferguson, 271 Kan. 613, 23 P.3d 891 (2001), based on the statute's plain language. Because subsection (d) gives the district court until September 1, 2000, to review and modify the existing sentence, the district court retained jurisdiction until that date. "[N]othing in the amendment requires that prior nonprison sentences made in excess of the new requirements be immediately revoked and altered." 271 Kan. at 617. Therefore, the district court properly retained jurisdiction over Ferguson for the purpose of revoking her probation on May 26, 2000. 271 Kan. at 617.
*213 In this case, the district court likewise retained jurisdiction to modify Jones' probation until September 1, 2000. Although the district court did not revoke Jones' probation until December 1, 2000, 3 months after the statutory period for review had expired, it continued to retain jurisdiction to order the revocation of Jones' probation. A district court has jurisdiction to revoke probation as long as proceedings are commenced before the expiration of the probation term. Williams, 20 Kan. App. 2d 142, Syl. ¶ 1. The State filed its first motion for revocation on June 27, 2000, while Jones' probation was still in effect.
Jones asserts the district court's extension of his probation did not meet the requirements of K.S.A. 2000 Supp. 21-4611(c)(5) because the order did not set forth with particularity the reasons for extending his probation on September 1, 2000. He argues the extension was invalid and, hence, the probationary period was not enlarged and so the revocation of his probation must be reversed.
The district court had jurisdiction to modify Jones' probation on September 1, 2000. The order extending probation simply states: "[A]fter having considered the evidence, and as authorized by K.S.A. 21-4611, ... defendant's probation is extended from December 1, 1999, to December 1, 2000, for the reasons set forth in the motion for extension of probation." The court was apparently referring to its notice of hearing on motion for extension of probation where it stated the probation should be extended for "failing drug testing, failing to maintain employment, and failing to complete counseling."
Two subsections of K.S.A. 2000 Supp. 21-4611 may set the standard for the extension of probationsubsections (c)(5) and (c)(8). The interpretation of a statute is a question of law over which this court has unlimited review. State v. Engles, 270 Kan. 530, 532, 17 P.3d 355 (2001). The State does not argue with Jones' assertion that the outcome of this issue depends on the interpretation of K.S.A. 2000 Supp. 21-4611(c)(5), which states:
"If the court finds and sets forth with particularity the reasons for finding that the safety of the members of the public will be jeopardized or that the welfare of the inmate will not be served by the length of the probation terms provided in subsections (c)(3) and (c)(4), the court may impose a longer period of probation. *214 Such an increase shall not be considered a departure and shall not be subject to appeal."
It appears from the record that the district court was proceeding under this section of the statute.
The district court's brief statement falls short of the statute's requirement of setting forth with particularity the reasons for finding the safety of the public will be jeopardized or the welfare of the inmate will not be served by the shorter period of probation. See State v. Huskey, 17 Kan. App. 2d 237, Syl. ¶ 2, 834 P.2d 1371 (1992) ("When something is to be set forth with particularity, it must be distinct rather than general, with exactitude of detail, especially in description or stated with attention to or concern with details."). Simply stating the reasons for revoking Jones' probation does not explain how the public safety will be jeopardized or how Jones' welfare will not be served by the shorter period of probation.
Without this preliminary finding, the district court's extension of probation was an abuse of discretion which resulted in an illegal sentence. See State v. Childers, 16 Kan. App. 2d 605, 618, 830 P.2d 50 (1991), rev. denied 250 Kan. 806 (1992). See Carmichael v. State, 255 Kan. 10, 16, 872 P.2d 240 (1994), which defines an illegal sentence as a sentence which does not conform to the statutory provision, either in character or the term of the punishment authorized. An illegal sentence may be corrected at any time. K.S.A. 22-3504; State v. Palmer, 262 Kan. 745, 752, 942 P.2d 19 (1997).
While we have found no cases construing K.S.A. 2000 Supp. 21-4611, we find the issue before us to be somewhat analogous to the situation when a district court fails to consider placement of a defendant at the Labette Correctional Conservation Camp and the case must be remanded to the district court for resentencing. State v. Schick, 25 Kan. App. 2d 702, 703, 971 P.2d 346 (1998), rev. denied 266 Kan. 1114 (1999).
This matter must be reversed and remanded for the district court to make the findings required by K.S.A. 2000 Supp. 21-4611(c)(5).
Reversed and remanded.
NOTES
[1] REPORTER'S NOTE: Previously filed as an unpublished opinion, the Supreme Court on February 8, 2002, ordered the opinion to be published, pursuant to Rule 7.04 (2000 Kan. Ct. R. Annot. 46).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2896125/
|
NO. 07-06-0457-CR
07-06-0458-CR
07-06-0459-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
JANUARY 24, 2007
______________________________
DUSTIN LEE ALLEN, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
_________________________________
FROM THE 320
TH
DISTRICT COURT OF POTTER COUNTY;
NO. 49,984-D, 49,985-D, 53,537-D; HONORABLE DON R. EMERSON, JUDGE
_______________________________
Before CAMPBELL and HANCOCK and PIRTLE, JJ.
ON ABATEMENT AND REMAND
Appellant, Dustin Lee Allen, seeks appeal of his conviction in three cases. We abate and remand for further proceedings.
In each case, appellant’s notice of appeal was presented to the trial court and signed by appellant’s attorney, Timothy Pirtle. Since that time, our court has had no further communication from appellant. Appellant has failed to file an adequate docketing statement as required under Rule 32.2 of the Texas Rules of Appellate Procedure. Further, the trial clerk’s office and the court reporter have both requested extensions of time for filing of their respective records citing appellant’s failure to make a request for the record or payment arrangements.
(footnote: 1)
See
Tex. R. App. P.
34.5(b)(2), 34.6(b)(1), 35.3.
We now abate this cause and remand it to the 320th District Court of Potter County. It is ordered that the judge of said court convene a hearing, after due notice to all parties, to determine:
1) whether appellant desires to prosecute this appeal;
2) whether appellant continues to be represented by Timothy Pirtle or whether counsel for appellant has abandoned the appeal;
3) if appellant is not represented by counsel, whether appellant is indigent and, therefore, is entitled to appointed counsel and a record of the trial court proceedings free of charge.
We further direct the trial court to issue findings of fact and conclusions of law addressing the foregoing subjects. Should the trial court find that appellant desires to pursue his appeal, is not represented by counsel and is indigent, we then further direct the court to 1) appoint counsel to assist in the prosecution of the appeal, and 2) issue an order requiring the preparation of a clerk's record in accordance with Rule 34.5 of the Texas Rules of Appellate Procedure. The name, address, phone number, fax number, and state bar number of any counsel who is appointed to represent appellant on appeal must also be included in the court's findings of fact and conclusions of law. Furthermore, the trial court shall also cause to be developed 1) a supplemental clerk's record containing the findings of fact and conclusions of law and all orders of the trial court issued as a result of its hearing on this matter and 2) a reporter's record transcribing the evidence and arguments presented at the aforementioned hearing. Additionally, the trial court shall cause the supplemental records to be filed with the clerk of this court on or before February 26, 2007. Should additional time be needed to perform these tasks, the trial court may request same on or before February 26, 2007.
It is so ordered.
Per Curiam
FOOTNOTES
1: The court reporter has graciously offered to prepare the reporter’s record upon a request from this Court. Without knowing whether appellant wishes to continue his appeal, we must decline the reporter’s invitation.
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2601482/
|
243 P.3d 830 (2010)
239 Or. App. 60
Paul E. FOLAND, Respondent Cross-Petitioner, and
Constance J. Foland, Respondent,
v.
JACKSON COUNTY, Respondent below, and
Oregon Department of Transportation, Petitioner Cross-Respondent.
Daniel Folliard, James Mcintosh, Lois Langlois, Dan Baty, John Easter, and Michael Bianco, Respondents,
v.
Jackson County, Respondent below, and
Oregon Department of Transportation, Petitioner.
Allen Baker, John Weisinger, Steven Stolzer, Jean Morgan, Michael Morgan, Suzanne Frey, and Gail Zaro, Respondents,
v.
Jackson County, Respondent below, and
Oregon Department of Transportation, Petitioner.
2009109, 2009112, 2009113; A145890.
Court of Appeals of Oregon.
Argued and Submitted August 25, 2010.
Decided November 24, 2010.
Karla H. Ferrall, Assistant Attorney General, argued the cause for petitioner-cross-respondent. With her on the briefs were John R. Kroger, Attorney General, and David B. Thompson, Interim Solicitor General.
Anne C. Davies argued the cause and filed the brief for respondents and respondent-cross-petitioner.
Before HASELTON, Presiding Judge, and ARMSTRONG, Judge, and DUNCAN, Judge.
HASELTON, P.J.
Petitioner Oregon Department of Transportation (ODOT) seeks judicial review, and respondent Paul Foland cross-petitions for judicial review, of an order of the Land Use Board of Appeals (LUBA) in which LUBA remanded Jackson County's decision approving ODOT's application to site an interstate highway rest area and welcome center on land that is zoned for exclusive farm use and is approximately 500 feet south of the urban *831 growth boundary of the City of Ashland. We reject without discussion Foland's seven assignments of error on cross-petition. We write only to address ODOT's sole legal contention that LUBA erred in concluding that Goal 11, which concerns the planning and development of public facilities and services, "prohibits the extension of city water services to serve [ODOT's] urban use[, viz., the rest area and welcome center,] on rural land without an exception to Goal 11." We determine that LUBA's order in that regard was not "unlawful in substance," ORS 197.850(9)(a), and, consequently, affirm on petition and cross-petition.
Because it provides context for the parties' contentions, before turning to the facts, we describe the general policy underlying Goal 11 and OAR XXX-XXX-XXXX, its implementing rule concerning water systems. Generally, Goal 11 concerns the "plan[ning] and develop[ment of] a timely, orderly and efficient arrangement of public facilities and services to serve as a framework for urban and rural development." Such development "shall be guided and supported by types and levels of urban and rural public facilities and services[[1]] appropriate for, but limited to, the needs and requirements of the urban, urbanizable, and rural areas to be served." (Emphasis added.)
Consistently with those requirements, the goal establishes several guidelines to aid in the planning of public facilities and services. Each guideline "is advisory, not mandatory," and "suggests an approach designed to aid agencies and others to comply with the Goal." Audubon Society v. Dept. of Fish and Wildlife, 67 Or.App. 776, 780, 681 P.2d 135 (1983).[2] As pertinent here, Guideline A(2) provides that "[p]ublic facilities and services for rural areas should be provided at levels appropriate for rural use only and should not support urban uses" and Guideline A(3) provides that "[p]ublic facilities and services in urban areas should be provided at levels necessary and suitable for urban uses."
In short, Goal 11 concerns the provision of public facilities and services. Specifically, the goal requires an "orderly and efficient arrangement of public facilities and services" and is intended to regulate development by limiting facilities and services to "the needs and requirements of the urban, urbanizable, and rural areas to be served." In other words, by limiting facilities and services to the needs and requirements of the land to be served (i.e., urban, urbanizable, rural), Goal 11 helps prevent the proliferation of urban uses in rural areas that might otherwise result from the extension of urban-level facilities and services outside an urban growth boundary (UGB) to rural land.
Goal 11 expressly contemplates the regulation of two types of "public facilities and services'that is, sewer systems and water systems. In 1998, the Department of Land Conservation and Development promulgated OAR XXX-XXX-XXXX and OAR XXX-XXX-XXXX, two rules to implement the specific goal provisions concerning sewer and water systems. With regard to sewer systems, the text of the goal and OAR XXX-XXX-XXXX, as a general matter, prohibit the establishment or extension of a sewer system to serve land outside of a UGB, without an exception to Goal 11.[3]
*832 Conversely, with regard to water systems, the goal and the pertinent rule, OAR XXX-XXX-XXXX(2), do not, as a general matter, categorically prohibit the establishment or extension of water systems to serve land outside of a UGB. Instead, the goal provides that
"[l]ocal governments shall not rely upon the presence, establishment, or extension of a water or sewer system to allow residential development of land outside urban growth boundaries or unincorporated community boundaries at a density higher than authorized without service from such a system."
In turn, OAR XXX-XXX-XXXX(2) provides:
"Consistent with Goal 11, local land use regulations applicable to lands that are outside urban growth boundaries and unincorporated community boundaries shall not:
"(a) Allow an increase in a base density in a residential zone due to the availability of service from a water system;
"(b) Allow a higher density for residential development served by a water system than would be authorized without such service; or
"(c) Allow an increase in the allowable density of residential development due to the presence, establishment, or extension of a water system."
Of significance, although the goal and the rule are clearly concerned with a local government's use of the establishment or extension of a water system as a justification to increase residential densities in an area outside a UGB, the goal and the rule are silent as to whether Goal 11's underlying objectives permit the extension of water systems to rural lands to serve a nonresidential urban use without an exception.
In Gisler v. Deschutes County, 149 Or. App. 528, 535, 945 P.2d 1051 (1997), we noted that the goal's specific proscriptions concerning sewer and water systems did not circumscribe the three "overall objectives" that Goal 11 was intended to further.[4] In that case, the petitioner sought to build a subdivision in a "low-density residential zone" that was outside a UGB. Id. at 530, 945 P.2d 1051. With regard to subdivisions, the Deschutes Development Code required that all lots be connected to a "`Department of Environmental Quality-permitted community or municipal sewer system.'" Id. However, the petitioner's proposed development "[was] not connected to an existing sewer system, and there [was] *833 no existing city or community sewer system that [was] located or ha[d] facilities outside the UGB and that [was] near the subdivision site." Id. In rejecting petitioner's argument that the county requirement was invalid because it was inconsistent with the Goal 11 proscriptions concerning sewer systems, we explained the objectives underlying the goal.
Citing 1000 Friends of Oregon v. LCDC (Curry Co.), 301 Or. 447, 724 P.2d 268 (1986) (Curry County), we reasoned that
"the overall objectives of [Goal 11] are to regulate development as well as services and facilities, to coordinate development levels with service and facility levels and, together with Goal 14, to channel intensive uses and development to existing urban and urbanizable land first before allowing the conversion of or intense nonresource uses on the rural land that comprises the areas outside UGBs."[5]
Gisler, 149 Or.App. at 535, 945 P.2d 1051. In sum, we concluded that "the requirements of Goal 11 go well beyond" the limitations on sewer and water systems and that more generally Goal 11 "regulates the location, pace and direction of residential and other development, and it limitsand requires coordination betweenthe placement of urban-level development and urban-level services and facilities on rural land * * *." Id. at 536, 945 P.2d 1051.
With that essential understanding of the goal, we turn to the facts of this case, as recounted in LUBA's order. In 2008, ODOT applied to site a rest area and welcome center (rest area) on an 18-acre parcel of land located approximately 500 feet south of the UGB of the City of Ashland and zoned for exclusive farm use. ODOT's application indicated that it would obtain water service "from the City of Ashland by extending city water lines to the subject property."
As LUBA explained, the county, in approving ODOT's application,
"granted exceptions to Goals 3 and 14 for the proposed rest area to be sited on rural land. In approving an exception to Goal 14 for the rest area, we understand the county to have determined that a rest area serving over a million visitors a year is an urban use of rural land that would otherwise be prohibited by Goal 14 without an exception."
With regard to the extension of city water service to the property, however, the county did not take an exception to Goal 11 because it determined that "`[t]he extension of water * * * service to the Rest Area is consistent with [that goal].'"[6]
Foland and others appealed the county's decision to LUBA. As pertinent to the applicability of Goal 11, they contended that the county should have taken an exception to Goal 11 for the extension of water service to the property because the proposed rest area "is an urban use" on rural land and that Goal 11 "prohibits the extension of urban-level facilities and services onto rural lands."
ODOT intervened and asserted that the county correctly determined that an exception to Goal 11 was not required. Specifically, ODOT contended that the text of OAR XXX-XXX-XXXX controlled and "limited a need for a goal exception for water service to residential uses." ODOT explained that,
"[a]lthough water systems and water are discussed in Goal 11, the current rule does not prohibit extending water service outside of a UGB to non-residential development. The Safety Rest Area/Welcome Center is not a residential development. If [the Land Conservation and Development Commission (LCDC)] had intended otherwise, it could have said so as clearly *834 as the policy against extension of sewer systems."
(Emphasis in original.)
Based on the text of Goal 11 and the history of the amendments to the goal, and the promulgation of OAR XXX-XXX-XXXX, LUBA ultimately concluded that "Goal 11 prohibits the extension of city water services to serve that urban use[, viz., the rest area,] on rural land without an exception to Goal 11." Specifically, LUBA reasoned:
"OAR XXX-XXX-XXXX took effect in July, 1998, in response to the Court of Appeals' decision in Dept. of Land Conservation v. Lincoln County, 144 Or.App. 9, 925 P.2d 135 (1996)[, rev. den., 324 Or. 560, 931 P.2d 99 (1997)]. In Lincoln County, DLCD challenged the county's approval of 113 residential lots on a 50-acre parcel of land outside of an urban growth boundary (the `Mariner's Village' development). The property was within the boundaries of an existing water district, and the proposed density of the subdivision was higher than would otherwise be permitted without the property's location within the water district boundaries. LUBA held that under a prior version of Goal 11, the proposed extension of water lines to each individual lot from the main water district line violated Goal 11 because it was an `extension of a water system' under the then-applicable Goal 11 language. * * * The Court of Appeals disagreed, finding that the phrase `establishment or extension of a water system' referred to the `new or expanded presence of water systems in areas where none was present before.' Id. at 17 [925 P.2d 135] (emphasis in original).
"In response to the court's holding, LCDC enacted OAR XXX-XXX-XXXX * * *. The rule does make clear that Goal 11 is concerned with the presence or availability of a sewer or water system facilitating increased residential density on rural land, presumably because that could lead to rural land being put to urban use in contravention of Goal 14. However, the history of the enactment of that rule indicates that LCDC did not intend to address the universe of concerns under Goal 11 in enacting the rule, or to in all circumstances allow a water system to serve non-residential urban uses on rural land without an exception to Goal 11. Thus, we agree with [the petitioner] that OAR XXX-XXX-XXXX does not purport to identify the universe of Goal 11 concerns regarding extension of water systems onto rural land. Where the extension of a water system onto rural lands is proposed to facilitate an urban use of that land, the extension is prohibited without an exception to Goal 11. In the present case, the county granted an exception to Goal 14 for the rest area * * *, presumably because a use that attracts over a million visitors a year constitutes an urban use. Goal 11 prohibits the extension of city water services to serve that urban use on rural land without an exception to Goal 11."
(Footnotes omitted; emphasis added.)
ODOT petitioned for judicial review. On review, the parties renew the core contentions presented to LUBA. Specifically, ODOT reiterates that, although "[t]he underlying policy of Goal 11 is to match public facilities with appropriate development plans[,]" the text and context of Goal 11 and the history surrounding the enactment of OAR XXX-XXX-XXXX conclusively demonstrate that Goal 11 only "prohibits a local government from increasing residential densities in rural areas, based on * * * an extension" of "city water services outside the [UGB]." (Emphasis added.) In other words, ODOT contends, without qualification, that the goal does not "limit the extension of water systems to non-residential uses on rural land." (Emphasis added.) For the reasons that follow, we disagree with ODOT and conclude that the county was required to take an exception to Goal 11 to extend water service to the rest area.
Resolution of the parties' competing contentions requires that we discern the meaning of Goal 11. In doing so, we are guided by the principles described in PGE v. Bureau of Labor and Industries, 317 Or. 606, 859 P.2d 1143 (1993), as amplified in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). In sum, here, we attempt to determine the meaning of the goal most likely intended by LCDCthe agency that adopted itexamining *835 the text in context along with the history concerning the goal's amendments offered by the parties.
ODOT is correct thatunlike the provisions concerning sewer systemsneither the goal nor OAR XXX-XXX-XXXX governing water systems expressly and categorically prohibits the extension of water services to rural areas. Nonetheless, reference to the overarching policies of Goal 11 and the history of amendments to the goal contradict ODOT's characterization of the significance of that distinction.
As noted, at the time that we decided Gisler, the text of Goal 11 included substantively similar proscriptions concerning water and sewer systems. See 239 Or.App. at 66 n. 4, 243 P.3d at 832 n. 4. In Gisler, we reasoned that a proper understanding of Goal 11 required that we look at the goal in its entirety rather than with a view only to the particular proscriptions concerning water and sewer systems. Ultimately, we concluded that Goal 11 "regulates the location, pace and direction of residential and other development, and it limitsand requires coordination betweenthe placement of urban-level development and urban-level services and facilities on rural land * * *." Gisler, 149 Or.App. at 536, 945 P.2d 1051 (emphasis added). Consistently with that objective, we conclude that, in this case, the extension of water services to the rest area a nonresidential urban useon rural land does not comport with Goal 11 and, consequently, the county was required to take an exception to extend the water services in this case.
Further, we disagree with ODOT that the history surrounding the 1994 and 1998 goal amendments and the promulgation of OAR XXX-XXX-XXXX in 1998 conclusively lead to a contrary conclusion. Specifically, as further support for its contention that Goal 11 does not "limit the extension of water systems to non-residential uses on rural land," ODOT refers to various documents from the Department of Land Conservation and Development (DLCD) as well as LCDC that demonstrate that the 1994 and 1998 changes were grounded in an intent to prevent urban-level residential densities in rural areas due to the establishment or extension of a water system.
Although we agree with ODOT that the prevention of urban-level residential densities was the chief concern that led to the amendments to the goal and the promulgation of the rule, the documents do not, as LUBA indicated, "purport to identify the universe of Goal 11 concerns regarding extension of water systems onto rural land." In fact, in a memorandum from DLCD to LCDC regarding a public hearing concerning the 1998 amendments, DLCD acknowledges that, even in light of the 1998 amendments,
"[t]he other general requirements of Goal 11, especially the definitions of rural facilities and services, could be interpreted to mean that water systems to serve rural areas are inappropriate in some circumstances. That question is not addressed by this report."
In other words, the documents on which ODOT relies do not purport to identify the "universe" of cognizable Goal 11 concerns or demonstrate that the general policies underlying Goal 11 as described in Gisler were somehow circumscribed by subsequent amendments. Rather those documents indicate merely that the amendments were designed to deal only with a specific concern about water systems (viz., the prevention of urban-level residential densities in rural areas due to the establishment or extension of a water system).[7]
In sum, we conclude, as did LUBA, that "Goal 11 prohibits the extension of city water services to serve that urban use on rural land without an exception to Goal 11." As LUBA reasoned,
"where an exception to Goal 14 is required in order to site an urban use on rural land, a corresponding exception to Goal 11 will be required where the intensity of urban use of land requires the provision of public *836 sewage facilities and services for health and safety reasons. In that circumstance, it may well be that the same factors that justify an exception for extending the city's sewer system onto the subject property, or the same factors that justify the Goal 14 exception to site the urban use on rural land, could serve as justification for extending water service onto the property. However, an exception to Goal 11 to extend water service is still required."
Accordingly, we affirm.
Affirmed.
NOTES
[1] Goal 11 defines "rural facilities and services" to mean "facilities and services suitable and appropriate solely for the needs of rural lands" and "urban facilities and services" to mean "key facilities and * * * appropriate types and levels of at least the following: police protection; sanitary facilities; storm drainage facilities; planning, zoning and subdivision control; health services; recreation facilities and services; energy and communication services; and community governmental services." (Emphasis added.)
[2] See ORS 197.015(9) ("`Guidelines' means suggested approaches designed to aid cities and counties in preparation, adoption and implementation of comprehensive plans in compliance with goals and to aid state agencies and special districts in the preparation, adoption and implementation of plans, programs and regulations in compliance with goals. Guidelines shall be advisory and shall not limit state agencies, cities, counties and special districts to a single approach.").
[3] To illustrate the point, the goal provides:
"Local Governments shall not allow the establishment or extension of sewer systems outside urban growth boundaries or unincorporated community boundaries, or allow extensions of sewer lines from within urban growth boundaries or unincorporated community boundaries to serve land outside those boundaries, except where the new or extended system is the only practicable alternative to mitigate a public health hazard and will not adversely affect farm or forest land.
"Local governments may allow residential uses located on certain rural residential lots or parcels inside existing sewer district or sanitary authority boundaries to connect to an existing sewer line under the terms and conditions specified by Commission rules."
Consistently, OAR XXX-XXX-XXXX(2) provides:
"Except as provided in [other sections] of this rule, and consistent with Goal 11, a local government shall not allow:
"(a) The establishment of new sewer systems outside urban growth boundaries or unincorporated community boundaries;
"(b) The extension of sewer lines from within urban growth boundaries or unincorporated community boundaries in order to serve uses on land outside those boundaries;
"(c) The extension of sewer systems that currently serve land outside urban growth boundaries and unincorporated community boundaries in order to serve uses that are outside such boundaries and are not served by the system on July 28, 1998."
[4] We decided Gisler in 1997, before the 1998 amendments to the goal and the promulgation of OAR XXX-XXX-XXXX and OAR XXX-XXX-XXXX. Instead, our decision in Gisler was predicated on the 1994 version of the goal, which contained the following provisions concerning sewer and water systems:
"Counties shall not allow the establishment of new sewer systems outside urban growth boundaries or unincorporated community boundaries, or allow new extensions of sewer lines from within urban growth boundaries or unincorporated community boundaries to land outside those boundaries.
"For land that is outside urban growth boundaries and unincorporated community boundaries, county land use regulations shall not rely upon the establishment or extension of a water system to authorize a higher residential density than would be authorized without a water system."
Because the provisions of the current version of the goal are substantively similar to the provisions in Gisler on which we relied and because the administrative rules were promulgated to implement those provisions, our reasoning in Gisler controls our understanding of the general policies underlying Goal 11.
[5] As we recognized in Gisler, although Goals 11 and 14 are interrelated, Goal 14 concerns urbanization and has a distinct underlying purpose viz., "[t]o provide for an orderly and efficient transition from rural to urban land use, to accommodate urban population and urban employment inside urban growth boundaries, to ensure efficient use of land, and to provide for livable communities." See also Curry County, 301 Or. at 474, 724 P.2d 268 (reasoning that "the policy of Goal 14 is to contain urbanization within acknowledged UGBs").
[6] The county, however, did take an exception to Goal 11 with regard to the extension of sewer services to the site.
[7] We also note that the documents also indicate that, although an outright prohibition was preferred with regard to the establishment and extension of sewer systems, a similar approach was not preferred concerning water systems because of the interrelationship between the goal and federal drinking water standards.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2615020/
|
847 P.2d 909 (1993)
118 Or. App. 450
Stephanie PIERCE, Appellant,
v.
MT. HOOD MEADOWS OREGON, LTD., and Mt. Hood Meadows Development Corp., Respondents.
9101-00311; CA A70313.
Court of Appeals of Oregon.
Submitted on Record and Briefs April 23, 1992.
Decided March 3, 1993.
*910 Stephanie G. Pierce, Portland, filed the brief pro se.
Brad C. Stanford, F. Scott Farleigh and Farleigh, Wada & Witt, P.C., Portland, filed the brief for respondents.
Before RICHARDSON, C.J., and DEITS and DURHAM, JJ.
DURHAM, Judge.
Plaintiff appeals from a summary judgment for defendants. ORCP 47 B. We review the facts in the light most favorable to plaintiff, Seeborg v. General Motors Corporation, 284 Or. 695, 699, 588 P.2d 1100 (1978), and reverse and remand.
Defendants operate a skiing facility on Mt. Hood. Plaintiff purchased defendants' ski-school package, which included equipment rental, a lift ticket and instruction. The equipment rental agreement stated, in part:
"I accept and clearly understand that there are inherent and other risks involved in the sport of skiing, for which this equipment is to be used; that injuries are a common and ordinary occurrence of this sport, and I freely assume those risks. I understand that the ski-boot binding system which I have rented will not release at all times nor under all circumstances, nor is it possible to predict every situation in which it will release, and it is therefore no guarantee of my safety. I therefore release Mt. Hood Meadows and its owners, agents and employees from any and all liability for damage and injury to myself or to any person or property resulting from negligence, the selection, adjustment, and use of this equipment, accepting myself the full responsibility for any and all such damage or injury of any kind which may result."
The lift ticket stated:
"The purchaser of this ticket understands that skiing can be hazardous and accepts and assumes the inherent risks of skiing, including but not limited to: changing weather conditions, variations or steepness in terrain, snow or ice conditions, surface or subsurface conditions, bare spots, creeks and gullies, forest growth, rocks, stumps, lift towers and other structures and their components, collisions with other skiers, and the skier's failure to ski within the skier's own ability. Always ski in control.
"IN CONSIDERATION FOR EACH AND EVERY RIDE ON ANY SKI LIFT DEVICE, THE USER OF THIS TICKET HEREBY RELEASES MT. HOOD MEADOWS AND ITS AGENTS FROM ANY AND ALL CLAIMS ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS TICKET INCLUDING BUT NOT LIMITED TO SKIING ACTIVITIES."
ORS 30.975 provides:
"In accordance with ORS 18.470 and notwithstanding ORS 18.475(2), an individual who engages in the sport of skiing, alpine or nordic, accepts and assumes the inherent risks of skiing in so far as they are reasonably obvious, expected or necessary."
ORS 30.970(1) provides:
"`Inherent risks of skiing' includes, but is not limited to, those dangers or conditions which are an integral part of the sport, such as changing weather conditions, variations or steepness in terrain, snow or ice conditions, surface or subsurface conditions, bare spots, creeks and gullies, forest growth, rocks, stumps, lift towers and other structures and their components, collisions with other skiers and a skier's failure to ski within the skier's own ability."
Plaintiff had never skied before, but a friend gave her two hours of instruction before her formal lesson began. Plaintiff *911 felt that she had learned the skills taught in the A-level class, so she joined the more advanced B-level lesson. She told the B-level instructor that she had never skied before. She rode the lift up the hill, but the slope looked too steep for her, so she rejoined the A-level class. The A-level instructor later sent plaintiff and another student back up the slope on the lift. There she saw the B-level instructor and told him what she had learned. She asked him the time, discovered that she had to meet a friend in ten minutes and decided to ski down the hill. The B-level instructor was partially down the slope before plaintiff began her run. She said that she had not rejoined the B group at this time but was continuing the A-level lesson. She skied down the hill, lost control in a turn, fell and was injured.
Plaintiff claimed that defendants negligently supervised and instructed her. The trial court ruled:
"1. That the rental agreement signed by Plaintiff and the language of the release printed on Plaintiff's lift ticket constituted an agreement of release enforceable under Oregon law; [and]
"2. ORS 30.975 prevents Plaintiff from recovering against Defendants since the inherent risks of skiing were the sole cause of her injury."
Plaintiff assigns error to the trial court's conclusion that the rental agreement and the lift ticket release defendants from claims for negligent supervision and instruction in defendants' operation of the ski school. The documents do not expressly mention defendants' liability for injuries incurred in the operation of the ski school. They relate to claims arising from the use of the ski equipment and the lift. Plaintiff assumed the inherent risks of skiing. We cannot discern from the documents whether they were intended to apply to claims arising from negligent instruction and supervision during ski school lessons. They are "capable of more than one sensible and reasonable interpretation." Deerfield Commodities v. Nerco, Inc., 72 Or.App. 305, 317, 696 P.2d 1096, rev. den. 299 Or. 314, 702 P.2d 1111 (1985). The ambiguity presents a fact question requiring evidence relating to the parties' intent and cannot be settled on a motion for summary judgment. Mann v. Wetter, 100 Or.App. 184, 188, 785 P.2d 1064, rev. den. 309 Or. 645, 789 P.2d 1387 (1990); Guinn v. Avia Group International, 94 Or.App. 560, 563, 766 P.2d 421 (1988), rev. den. 307 Or. 514, 770 P.2d 595 (1989).
Plaintiff also argues that the court erred when it held that ORS 30.975 shielded defendants from liability for negligence arising out of their ski school operation. She contends that, on this record, defendant's negligence is a question of fact. ORS 30.975 insulates defendants from liability resulting from the inherent risks of skiing. The statute bars plaintiff's claim only if her injury is due solely to the inherent risks of skiing. We considered the legislative history of ORS 30.975 in Jessup v. Mt. Bachelor, Inc., 101 Or.App. 670, 673, 792 P.2d 1232, rev. den. 310 Or. 475, 799 P.2d 646 (1990), and said:
"[T]he legislature intended to bar recovery for an injury caused solely by an inherent risk of skiing. But, if the injury is caused by a combination of an inherent risk of skiing and operator negligence, then the doctrine of comparative fault would apply."
Nolan v. Mt. Bachelor, Inc., 115 Or.App. 27, 836 P.2d 770 (1992), involved a claim of negligence by a student who was injured during a skiing lesson with an instructor employed by the ski area operator. We held that the statute does not shield ski area operators from liability for collisions caused by an employee's negligence:
"[W]hen both an inherent risk and a ski operator's negligence assertedly contribute to an injury, the questions of liability and apportionment of fault are for the trier of fact." 115 Or.App. at 30, 836 P.2d 770.
As in Nolan, plaintiff here claims that her injury was caused by defendant's negligence, specifically, in failing to properly supervise her skiing and in failing to explain to her how to slow down or check her speed. Defendants argue that she voluntarily left her lesson before she fell and *912 that the injury was due solely to an inherent risk of skiing. There is evidence in the record to support the parties' conflicting versions of the facts. There remain unresolved material factual questions regarding whether defendants were negligent, whether any negligence by defendants contributed to the injury, and whether plaintiff was injured solely due to an inherent risk of skiing. The court erred in granting summary judgment.
Reversed and remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2896141/
|
NO. 07-06-0117-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
JANUARY 23, 2007
______________________________
JAMES RAY BARROW, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
_________________________________
FROM THE 242
ND
DISTRICT COURT OF CASTRO COUNTY;
NO. B2969-0410; HONORABLE ED SELF, JUDGE
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
MEMORANDUM OPINION
Appellant James Ray Barrow appeals from a judgment revoking his community supervision and imposing sentence pursuant to a conviction for assault on a family member enhanced by a previous assault against a family member. We affirm.
Background
On October 26, 2004, the State indicted appellant for the offense of assault on a family member committed on October 7th and enhanced by a prior family violence assault conviction. Appellant was convicted of the prior offense on September 8, 2004. On December 22, appellant pled guilty to the offense and was sentenced to three years confinement in the Institutional Division of the Texas Department of Criminal Justice. The trial court suspended the sentence and placed appellant on community supervision for three years. Appellant’s terms and conditions of community supervision were later amended to include treatment for drug or alcohol abuse by confinement in a substance abuse felony treatment facility as well as attendance and successful completion of its treatment programs. Subsequently, the State filed a motion to revoke appellant’s community supervision alleging that appellant failed to successfully complete the program at the substance abuse felony treatment facility and failed to refrain from the use of controlled substances. The trial court found that appellant had violated the conditions of community supervision, revoked the order placing him on community supervision, and ordered that appellant serve the sentence of three years confinement in the Institutional Division of the Texas Department of Criminal Justice.
Appellant appeals the order revoking his community supervision contending that the trial court did not have jurisdiction to find him guilty of the offense, and that the evidence was factually insufficient to support the trial court’s finding of true to the alleged violations of community supervision. We affirm.
Court’s Jurisdiction
In general, the validity of a conviction in which the defendant is placed on community supervision cannot be raised on appeal from a revocation order.
See
Burrell v. State
, 492 S.W.2d 482, 484 (Tex.Crim.App. 1973). However, a judgment by a court without subject matter jurisdiction is void and can be attacked at any time.
See
Nix v. State
, 65 S.W.3d 664, 667-68 (Tex.Crim.App. 2001) (en banc). Since appellant contends that the district court lacks subject matter jurisdiction, appellant’s contention fits within the void judgment exception and, thus, is properly before this court.
Appellant was indicted for an assault on a family member enhanced by a prior family violence conviction.
(footnote: 1) Appellant contends that a prior conviction used for enhancement purposes must have been final before the commission of the second assault. Since the two assaults occurred 29 days apart, appellant contends the time for appealing the first assault had not yet run and, thus, the first assault was not a final conviction and could not have been used for enhancement purposes. Without a prior conviction of family violence to enhance the second assault, appellant contends the assault would be a misdemeanor and the district court would be without jurisdiction.
See
Tex. Code Crim. Proc. Ann
. art. 4.05 (Vernon 2005).
A prior conviction for which the time for filing an appeal has not run prior to the commission of a second offense may be used for enhancement purposes as long as there is no evidence that an appeal was ever filed.
Woolsey v. State
, 314 S.W.2d 298, 300 (Tex.Crim.App. 1958) (one day old conviction used for enhancement purposes). When a prior conviction is used for enhancement purposes, the trial court must be able to determine the finality of the prior conviction at the time the trial court is charged with making a decision affected by the enhancement.
See
Milburn v. State
, 201 S.W.3d 749, 752 (Tex.Crim.App. 2006). In this case, the time for filing an appeal on the first conviction of family violence assault had expired by the time the case was before the trial court on December 22.
See
Tex. R. App. P.
26.2(a). Thus, the trial judge would know, or could reasonably suppose, “that an appeal or a motion for new trial had not in fact been filed because the time for filing would have expired.”
Id
. (
citing
Jordan v. State
, 36 S.W.3d 871, 876 n.35 (Tex.Crim.App. 2001)). Since the finality of the first assault conviction of family violence was ascertainable at the time the trial court rendered judgment on the second family violence assault, the second assault on a family member was properly enhanced to a third degree felony and the district trial court had jurisdiction.
Id
. at 753. We overrule appellant’s first issue.
Probation Revocation
A probation revocation proceeding is neither a criminal nor a civil trial, but is rather an administrative proceeding.
Cobb v. State
, 851 S.W.2d 871, 873 (Tex.Crim.App. 1993). The State must prove by a preponderance of the evidence that a defendant violated the terms of his community supervision.
See
id
. Our review of an order revoking community supervision is limited to determining whether the trial court abused its discretion.
See
Cardona v. State
, 665 S.W.2d 492, 493 (Tex.Crim.App. 1984).
In its amended motion to revoke community supervision, the State alleged that appellant violated his community supervision in that: (1) “the defendant has failed to successfully complete the Substance Abuse Felony Treatment Facility; TO WIT . . . the defendant was unsuccessfully discharged from the Substance Abuse Felony Treatment Facility Billy Meeks Transition Treatment Center,” and (2) “the defendant [failed] not [to] use any controlled substances; TO WIT: A urine sample submitted by the defendant . . . did test positive for cocaine.” Appellant contends that the evidence is factually insufficient to establish either violation.
The trial court had evidence that appellant’s urine tested positive for cocaine while on community supervision. Evidence of a positive urine sample is sufficient evidence to establish that appellant has failed to refrain from use of controlled substances as required by community supervision.
See
Stevens v. State
, 900 S.W.2d 348, 352 (Tex.App.–Texarkana 1995, pet. ref’d). A single violation of the conditions of community supervision is sufficient to support a trial court’s revocation of the community supervision order.
Id
. Hence, the trial court did not abuse its discretion in finding that appellant had violated the terms of his community supervision.
Conclusion
For the foregoing reasons, we affirm.
Mackey K. Hancock
Justice
Do not publish.
FOOTNOTES
1:Although an assault on a family member is generally a class A misdemeanor, a second conviction for assault on a family member is considered a third degree felony.
See
Tex. Penal Code Ann.
§ 22.01(b)(2) (Vernon Supp. 2006).
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2600721/
|
41 P.3d 455 (2002)
179 Or. App. 674
STATE of Oregon, Appellant,
v.
Daryl BARBER, Respondent.
00C42159; A111533
Court of Appeals of Oregon.
Argued and Submitted August 24, 2001.
Decided February 27, 2002.
Katherine H. Waldo, Assistant Attorney General, argued the cause for appellant.
*456 With her on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.
No appearance for respondent.
Before LANDAU, Presiding Judge, and DEITS, Chief Judge,[*] and BREWER, Judge.
LANDAU, P.J.
The state appeals a pretrial order granting defendant's motion to suppress statements made following a waiver of Miranda rights on the ground that defendant failed "intelligently" to waive those rights. We reverse and remand.
The following facts are not in dispute. Marion County Sheriff's Deputy Nicoloff received a report from a 14-year-old girl that she and defendant, her 19-year-old boyfriend, had engaged in sexual intercourse. Nicoloff called defendant on the telephone and asked him to come to the police station to talk. Defendant agreed to meet at the station later that day.
Defendant arrived at the station with his father, albeit an hour after he had told Nicoloff that he would be there. Nicoloff invited defendant into the interview room; defendant's father waited outside. At the beginning of the interview, Nicoloff read defendant his Miranda rights and had defendant sign the back of a Miranda card indicating that he understood and waived those rights. Nicoloff then questioned defendant about his relationship with his girlfriend. Defendant admitted to engaging in sexual intercourse with her. At the end of the 20-25 minute interview, defendant made the comment: "I'm retarded." Nicoloff asked defendant what he meant, and defendant replied that he had difficulty reading and that he stuttered. At no time during the interview did defendant ask to leave or ask for his father to be present.
Defendant was charged with third-degree sexual abuse and contributing to the delinquency of a minor. He filed a motion to suppress, arguing that, because of his retardation, he did not knowingly, intelligently, and voluntarily waive his Miranda rights. At the hearing on the motion, his case manager testified that defendant has an IQ of 61, which puts him in the range of "mild" retardation, that he cannot read beyond the first grade level, and that he has a limited ability to understand abstract principles and to "project out into the future." Defendant also testified. He stated that "[n]o one told me that I had to talk to [Nicoloff] or nothing" and that "I didn't have to talk to him, but I went in and talked to him anyhow." He stated that he knew that he could have left the interview but that he also thought he was going to be arrested. He also said that he wanted to leave but did not do so.
The state argued that whether defendant validly waived his Miranda rights is beside the point. According to the state, defendant was not in custody or under compelling circumstances, so Miranda warnings were not even required. In the alternative, the state argued that defendant in fact knowingly, intelligently, and voluntarily waived those rights.
The trial court granted defendant's motion, finding as follows: " * * * [Nicoloff] made no mistake that I can see. His conduct was right [all] along. My only comment would have been that he might have inquired a little further into [defendant's] intelligence and his ability to understand. But I find that he made no mistake at all; there's no misconduct or no mistake.
"But I do find that under the circumstances of the contact, thatand especially considering the IQ of the defendant, that I think the defendant probably thought he was in custody, and so therefore, I do find that Miranda was required under these circumstances.
"As to the second question, I relied heavily upon the defendant's responses to questions on the witness stand, and also his counselor's testimony with respect to his history of being able to understand matters that come to his attention. So I do find that heand I think I stressed the word `intelligently' when I made my conclusion, *457 and that he may have been voluntary and may have been responsive, but I find that [he] lacked the necessary intelligence for him to have been adequately warned of his rights."
On appeal, the state argues that the trial court erred in concluding that the interview amounted to custodial interrogation. In the alternative, the state argues that defendant, in fact, intelligently waived his Miranda rights. Because we agree with the state on the first argument, we need not address the second.
Under Article I, section 12, of the Oregon Constitution, Miranda warnings are required when a defendant either is "in custody" or in a setting that, even if not custody as such, nevertheless is "compelling." State v. Goree, 151 Or.App. 621, 636, 950 P.2d 919 (1997), rev. den. 327 Or. 123, 966 P.2d 216 (1998). The rationale for the requirement is that individuals should not be put into situations in which they are likely to feel psychologically compelled to testify without the benefit of a clear warning that they do not have to do so. Id. at 636-37, 950 P.2d 919. Whether a given setting amounts to custody or is compelling is a question of law. State v. Werowinski, 179 Or.App. 522, 529, 40 P.3d 545 (2002).
We first consider whether defendant was in custody. Our decision in State v. Hickam, 71 Or.App. 471, 692 P.2d 672 (1984), is close in point. In that case, the defendant, who was "significantly retarded," was suspected of having committed sexual abuse. The officer asked the defendant to go to the police station for questioning; the officer told the defendant that he was not required to go. The defendant agreed to go. At the station, the officer interviewed the defendant in a small, windowless room with the door closed. After the defendant admitted to the sexual abuse, the officer gave him Miranda warnings, and the state charged him with sexual abuse. The defendant moved to suppress on the ground that he had made the admission while "in custody" without having been given Miranda warnings. He contended that he functioned at the level of an eight- to ten-year-old and that he did not feel that he was free to leave the police station. The trial court denied the motion to suppress, and we affirmed, explaining that: (1) the defendant had voluntarily accompanied the officer to the station; (2) the detention was brief, taking less than one hour; (3) the defendant's freedom of movement was not restrained in any way; (4) although the defendant subjectively may have believed that he could not leave, nothing in the record suggested that he was justified in so believing. Id. at 476, 692 P.2d 672.
In this case, too, defendant voluntarily went to the station for brief20 to 25 minutes questioning. His freedom of movement was not restrained in any way. And, although the trial court found that defendant "probably" subjectively believed that he was not free to go, that is not determinative. The question is whether anything in the record suggests that defendant was reasonable in so believing. In this case, as in Hickam, there is evidence of retardation. But, also as in Hickam, there is nothing in the record to suggest that even an individual in those circumstances reasonably would have understood that he or she was not free to leave.
We turn to whether defendant nevertheless was in "compelling" circumstances. The relevant inquiry is whether a reasonable person in the suspect's position would have understood the circumstances to be compelling. Werowinski, 179 Or.App. at 529 (citing State v. Clem, 136 Or.App. 37, 42, 900 P.2d 1064 (1995) (under federal constitution, whether circumstances are compelling depends on how a reasonable person would have understood the situation)).
In this case, as we have noted, defendant was asked to come to the police station for questioning. He was not told that he had to come. Defendant agreed to the interview, set an appointment, and then arrived an hour late. He was taken to an interview room, where he was questioned briefly. He never asked to leave. In fact, he testified that he understood that he did not have to attend the interview and that he was free to leave. The trial court nevertheless found that, because of defendant's low IQ, he "probably" did not understand that he was free to leave. That, however, is not the end of the inquiry. As *458 we have noted, the determinative question is whether a defendant in the foregoing circumstances reasonably would understand that he or she was not free to leave. In this case, assuming that defendant subjectively believed that he could not leave, nothing in the record suggests that the belief was reasonable. Although he had a low IQ, there is no evidence that he lacked the ability to appreciate fully his ability to leave. See Hickam, 71 Or.App. at 476, 692 P.2d 672.
Reversed and remanded.
NOTES
[*] Deits, C.J., vice Warren, S.J.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600722/
|
41 P.3d 600 (2002)
202 Ariz. 62
In the Matter of Richard A. ALCORN, Attorney No. 6657, and
Steven Feola, Attorney No. 4197, Respondents.
No. SB-01-0075-D.
Supreme Court of Arizona, En Banc.
January 9, 2002.
As Corrected March 21, 2002.
*601 State Bar of Arizona, By: Shauna R. Miller, Phoenix, Attorney for State Bar of Arizona.
Nancy A. Greenlee, and Lewis and Roca, L.L.P., By: Jeremy E. Butler, Susan M. Freeman, Phoenix, Attorneys for Respondents.
OPINION
FELDMAN, Justice.
¶ 1 We took review of this bar disciplinary matter for two reasons: first, to clarify ethical obligations of lawyers who make agreements that may affect the conduct of a trial; and second, to review the disciplinary proceedings and assess the propriety and proportionality of the sanctions imposed on the lawyers involved in this unusual disciplinary case.
¶ 2 Because this matter affects the practice of law and the conduct of Arizona lawyers, we have appellate and revisory jurisdiction pursuant to article VI, §§ 1, 3, 5(4), and 5(5) of the Arizona Constitution, together with Rules 31, 32, 41, and 42, Arizona Rules of the Supreme Court.[1]
PROCEDURAL HISTORY
¶ 3 Steven Feola and Richard Alcorn (Respondents) were charged with violating the rules of professional conduct governing all lawyers admitted to practice before the Arizona courts. The specific violations charged were of Ethical Rules (ER) 3.3(a) and ER 8.4(c) and (d), adopted under Rule 42. ER 3.3(a) concerns the lawyer's duty of candor toward the tribunal and forbids false statements of material fact while requiring disclosure of material fact under certain circumstances.[2] ER 8.4 addresses similar concerns, but it is broader in scope than ER 3.3.[3]
¶ 4 The State Bar filed charges against Respondents in November 1998. After taking testimony at a May 1999 hearing, the hearing officer concluded that the State Bar had "failed to meet its burden to show, by clear and convincing evidence, that Respondents knowingly violated the ethical duty imposed under ER 3.3(a)(1) and (a)(2)." Findings of Fact, Conclusions of Law and Recommendations (Report), filed July 24, 2000. The hearing officer also found that the State Bar had not met its burden of proving that Respondents violated ER 8.4(c) or (d). Id. She therefore recommended that the complaints be dismissed. Id.
¶ 5 After the State Bar filed an objection and requested oral argument, the Disciplinary *602 Commission of the Supreme Court of Arizona (Commission) heard the matter in October 2000. The State Bar argued that Respondents had violated the rules as charged and should be suspended from the practice of law for not less than six months and one day. Respondents took the position that the hearing officer's findings, conclusions, and recommendation for dismissal should be approved.
¶ 6 By a 5-to-2 vote, the Commission agreed with the hearing officer that the State Bar had failed to meet its burden in proving violations of ER 3(a)(1) and (2) but concluded there was clear and convincing evidence that Respondents had violated ER 8.4(c) and (d). Disciplinary Commission Report, filed January 28, 2001. Commissioner Carson, a public member, joined the majority but wrote separately, stating that he agreed with the majority only because he feared that otherwise the final vote "might lead to a dismissal as recommended by the hearing officer." Id. at 17. He would have accepted the State Bar's request for a suspension of six months and one day but felt that "[d]isbarment might well have been appropriate." Id. Commissioners Bowman and Mehrens dissented from the majority and would have accepted the hearing officer's findings, conclusions of law, and recommendation.
¶ 7 The Commission majority ostensibly adopted the hearing officer's findings of fact in deciding there was clear and convincing evidence that Respondents violated ER 8.4(c) and (d). Yet in explaining the reasons for its decision, the majority effectively made different factual findings. To some extent, this is understandable because many of the hearing officer's "findings of fact" are actually either conclusions of law or mixed findings of fact and conclusions of law. Having concluded that Respondents violated ER 8.4(c) and (d), the Commission considered the appropriate sanction, discussed factors in aggravation and mitigation, made a proportionality analysis, and recommended that this court impose a thirty-day suspension on each Respondent and assess the costs of the disciplinary proceedings against them.
¶ 8 Neither Respondents nor the State Bar sought our review of the Commission's findings and recommendation. This court, however, has the ultimate authority to decide whether a sanction of suspension or disbarment will be imposed. See Rule 53(d)(4) and (e)(1). When neither a respondent nor the State Bar seeks review of the Disciplinary Commission's recommendation, that recommendation automatically takes effect unless we take sua sponte review. See Rule 53(e)(7). Having considered the Commission's report in this matter, we entered an order granting sua sponte review, asked the parties for supplemental briefs, and heard oral argument. We now conclude that several of the hearing officer's findings of fact were clearly erroneous.[4] We further conclude that Respondents violated ER 3.3(a)(1) and ER 8.4(c) and (d). We disagree, however, with the Commission's recommendation of a thirty-day suspension. Believing that Respondents' violations were quite serious, we conclude that the proper and proportionate sanction is a six-month suspension of each Respondent.
FACTS
¶ 9 This proceeding arises from a medical malpractice action filed by a father, on his own behalf and on behalf of his infant daughter (Plaintiffs), against Dr. Bair and Scottsdale Memorial Health Services (the Hospital). Plaintiffs claimed that Dr. Bair and the Hospital were negligent in delivering the child, causing the mother's death and catastrophic injuries to the child. Plaintiffs sought damages for wrongful death and for the child's injuries. Dr. Bair's insurer was insolvent, leaving the doctor to shoulder the financial burden of his own defense. He retained Respondents to represent his interests, but because of his financial condition he told them to do as little work as possible in defending the action. Dr. Bair's exposure, however, was great, and the undertaking to represent him naturally put Respondents in *603 a pressure-filled situation. According to the hearing officer in this case, Respondents did the best they could in attempting to protect their client.
¶ 10 At first, the Hospital assumed a key role in defending the action; it retained counsel and provided funding for expert witnesses and other costs of defense. The Hospital's position seemed to be that neither it nor Dr. Bair had been negligent, and so Respondents were able to ride the Hospital's coattails in defending the doctor. Unfortunately for Dr. Bair and Respondents, the Hospital eventually moved for and obtained summary judgment in its favor. This, of course, left the doctor as the only defendant who would appear at trial. The trial date was fast approaching, and while Plaintiffs had moved for reconsideration of the order granting summary judgment to the Hospital (technically a motion for a new trial under Rule 59(a), Ariz.R.Civ.P.), the trial against Dr. Bair was scheduled to start before the judge heard arguments on that motion. Thus, Respondents were faced with the necessity of preparing for trial without the benefit of the Hospital's participation or its expert witness.
¶ 11 Help arrived in the nick of time. Not long before trial, Mr. Hmielewski, one of Plaintiffs' lawyers, wrote to Respondents with a proposal. Letters were exchanged between Hmielewski and Respondents, but it is sufficient for our purposes to set forth the essence of the unusual agreement made through their exchange.
1. Plaintiffs would give Dr. Bair a covenant not to execute.
2. Notwithstanding the covenant and the fact that Dr. Bair would be the only defendant participating, the trial would proceed with the entire panoply of court proceedingsjudge, jury, and witnesses.
3. On behalf of Dr. Bair, Respondents "would not object to the scope or form of any inquiry [Plaintiffs' counsel] conducted at trial, including the witnesses [he] chose to call." See December 20, 1995 letter from Hmielewski to Alcorn.[5]
4. The agreement would remain confidential. Hmielewski was "comfortable" with this secrecy agreement because Respondents' agreement regarding the conduct of trial would only apply "if Dr. Bair is the only defendant at trial." Id.
5. Most remarkable is the following provision: "Specifically, [Plaintiffs] agree that, at the close of plaintiffs' case, [Plaintiffs] will agree to voluntarily dismiss with prejudice their claims and action against Dr. Bair and his corporation. Further, [Plaintiffs] agree that Dr. Bair or his corporation will not be named by them as a defendant in any subsequent action relating to this matter." December 27, 1995 letter from Alcorn to Hmielewski.
¶ 12 The benefit to Respondents' client is apparent; the agreement would effectively release Dr. Bair from any liability for the events described in the complaint. The benefit to Plaintiffs is more difficult to ascertain. Their claim against Dr. Bair was worth little absent the Hospital's liability because Dr. Bair was without liability insurance or assets to satisfy the kind of judgment Plaintiffs expected in light of their injuries. The purpose of the agreement, as we understand it, was to "educate" the trial judge as to the Hospital's culpability so he could use this background in deciding whether to reconsider his grant of summary judgment to the Hospital.[6]
*604 ¶ 13 The hearing officer found that before signing the agreement, Respondents researched the case law to determine whether the confidentiality provision was valid and whether they would be ethically obligated to disclose the existence of the agreement to the trial judge. Having performed this research, and believing the case law unclear, they consulted with other lawyers, both within and outside their firm. They reportedly received some conflicting opinions, but the conclusion seems generally to have been that the agreements might not be enforceable but that they need not be disclosed. We shall consider that legal conclusion later in this opinion.
¶ 14 Based upon the foregoing considerations, Respondents signed the letter agreements and then proceeded to trial before judge and jury. The trial took ten days over two or three weeks. The hearing officer found that Respondents not only cross-examined Plaintiffs' witnesses but, by dint of some arrangement with Plaintiffs' counsel, called a witness during Plaintiffs' case. The witness was Dr. Clark, an obstetrical expert the Hospital had hired for its own defense. Evidently, the Hospital attempted to help Dr. Bair by lending its expert to Respondents, even going so far as to pay the expert's fees. Of course, in providing this help, the Hospital and its lawyers were not told of the secret agreementbut then, neither was the trial judge. Respondents agreed to allow Plaintiffs to call one witness, Dr. Washburn, in exchange for Plaintiffs' consent to Respondents' calling Dr. Clark.
¶ 15 Plaintiffs moved for a mistrial at the conclusion of their case in chief, claiming among other things that "[t]he court and jury have been the victims of untruthful testimony which goes to the very foundation of plaintiffs' claims for relief, and if the untruthful testimony is believed, plaintiffs will be effectively precluded from their claims and remedies." Plaintiffs' Motion for Mistrial, Newcomb v. Bair, January 22, 1996 (CV 92-22705). The trial judge denied this rather unusual motion, and Plaintiffs' counsel thereupon performed their obligation under the letter agreement by moving to dismiss with prejudice. The trial judge was surprised by this turn of events and inquired. At that point, seeking to quell the trial judge's suspicions, Alcorn initiated the following colloquy:
MR. ALCORN: May I be heard very briefly, your honor? I think we'vewhat we've done is shifted gears from the Motion for Mistrial. Correct me if I'm wrong, Mr. Hmielewski. And now counsel is avowing to the Court that he is willing to dismiss his entire case against Dr. Bair and his professional corporation with prejudice. Obviously, if the Court's not disposed to grant the Plaintiffs' motion [for mistrial], I would move that the case be dismissed with prejudice. And if they will stipulate to it, that may provide a basis.
THE COURT: All right.
MR. ALCORN: But it seems like I am being forced to subject my client to a jury when in fact I've got a chance to get out of the case once and for all with prejudice.
THE COURT: Mr. Alcorn, if you and Mr. Hmielewski agree to settle this case with a dismissal with prejudice against Dr. Bair, I'll call the jury in and tell them the case is settled, and it's all over. I am perfectly willing to do that. As a matter of fact, I don't know that I have any power to do anything else or would even consider it.
MR. HMIELEWSKI: May we have five minutes?
THE COURT: But I am not going to leave the case unconcluded on the basis of what's been presented to me so far.
MR. ALCORN: I understand. I think we do have an agreement, but I suppose we need a few minutes to formalize that.
* * *
THE COURT: And you know, if you all what I'm going to do is bring the jury back in and recess them for lunch, and that will give you until 1:30 to do whatever it is you think you might be able to do. But I will tell you now, I don't want any sweetheart deals that I am not fully informed about anywhere. You have to take this situation as you now find it. And I don't want it crafted in some way or another that is that would be misleading to me. Okay.
*605 MR. JOHNSON (Hmielewski's co-counsel): Absolutely, your honor.
* * *
MR. ALCORN: Your Honor, could I make a couple of points briefly?
THE COURT: Please.
MR. ALCORN: The dismissal should be with prejudice.
MR. HMIELEWSKI: Agreed.
MR. ALCORN: And counsel is in agreement with that. Secondly, although we think we have a binding stipulation under Rule 80, Mr. Hmielewski or Mr. Johnson will formalize that and present it to the Court, as he indicated. And we want to give our assurances to the Court that there will be no sweetheart deals. There's no agreements regarding future testimony by Dr. Bair or the substance of any testimony by Dr. Bair. There's no payment of any consideration from either side in connection with the settlement.
THE COURT: Okay. Well, good. I'm glad to hear that.
Reporter's Transcript on Appeal (RT), January 8, 1996, at 297-300 (CV 92-22705). Thus, the trial judge ordered the case dismissed with prejudice.
¶ 16 Later, during the hearing on Plaintiffs' motion for new trial on the summary judgment granted to the Hospital, the trial judge discovered the true nature of the agreement, including the confidentiality provision, and ordered a hearing on the question of sanctions. After that hearing, the judge ordered sanctions imposed on all of the lawyers, based on his finding that, in failing to disclose the agreement to the court, they violated ERs 3.3 and 8.4. The judge consequently imposed a $15,000 fine on each lawyer. Respondents appealed the sanction order, claiming they had not violated the ethical rules, but the order was affirmed on appeal. See Hmielewski v. Maricopa County, 192 Ariz. 1, 960 P.2d 47 (App. 1997). We denied review. The State Bar then initiated proceedings against all of the lawyers involved.[7]
DISCUSSION
A. Duty to disclose
¶ 17 Respondents still contend that they had no duty to disclose their agreement to either the judge or the Hospital. The hearing officer believed that Respondents held this view "in good faith." Report at 5. The hearing officer therefore concluded there was no violation of ER 8.4(c) and (d). Id. We turn first to the issue of whether Respondents had a duty to disclosean issue of importance in both this and future cases.
1. Arizona's law on disclosure of settlement agreements, partial settlement agreements, and quasi-settlement agreements
¶ 18 The Arizona Reports are replete with discussion of various types of agreements made between trial counsel. We have examined Gallagher agreements, Damron agreements, Morris agreements, Bradshaw agreements, and agreements that have yet to be dignified with case names, such as high-low agreements and guaranty agreements. Having read the past cases, Respondents concluded there was no duty to disclose their unique agreement. They argue that their reading of the cases was correct or at least arguably so.
¶ 19 We first alluded to such agreements in Damron v. Sledge, 105 Ariz. 151, 460 P.2d 997 (1969). Damron was a damages action against two defendants, only one of whom was defended by insurance counsel. The insurers for the second defendant refused to provide a defense, claiming there was no *606 coverage, thus leaving the second defendant to his own devices. Eventually the uninsured defendant and the plaintiff's lawyer agreed that the former would receive a covenant not to execute in exchange for assigning to the plaintiff the bad faith claim against his putative insurer. The plaintiff would then dismiss with prejudice against the insured defendant while the agreeing defendant would withdraw his answer and allow the plaintiff to take a default judgment. The agreement was disclosed to the trial judge and to the lawyer for the insured defendant, who for some reasonperhaps shock at the use of this new techniqueobjected vehemently to the whole process, saying that he thought the agreement was "tainted with conspiracy, chicanery, and fraud...." Id. at 153, 460 P.2d at 999. The trial judge, perhaps also surprised, concluded that the agreement was collusive and fraudulent and therefore dismissed the entire case. We reversed on appeal, holding that the deal was not "ipso facto collusive." Id. We also held that while the trial judge had inherent power to dismiss a collusive case, the judge could not do so without taking evidence to establish such collusion:
It cannot be held that as a matter of law collusion exists simply because a defendant chooses not to defend when he can escape all liability by such an agreement, and must take large financial risks by defending. If, at a hearing, where the testimony comes from sworn witnesses rather than from arguments of the attorneys, it appears the defendant instead of defaulting agrees to perjure himself ..., or if some other definite evidence of collusion is adduced by proper testimony, a dismissal of the entire action may be justified.
Id. at 155, 460 P.2d at 1001 (emphasis added).
¶ 20 There are significant differences between Damron and the present case. The Damron agreement was disclosed and the parties did not undertake a sham[8] trial in front of a judge and jury. Finally, unlike the present case, the court only held a default hearing, not a supposedly adversarial trial. Nothing we said in Damron legitimizes what was done here.
¶ 21 In City of Tucson v. Gallagher, 108 Ariz. 140, 493 P.2d 1197 (1972), the plaintiff gave a covenant not to execute to one of two defendants, but it was to be effective only above a certain amount, thus guaranteeing the plaintiff a minimal recovery from one or both of two defendants. We found no deprivation of a fair trial because, under the circumstances, this type of agreement could change neither the agreeing defendant's motive nor trial tactics in defending the case, and nothing that occurred during the trial demonstrated any impropriety. Id. at 142-43, 493 P.2d at 1199-1200. As in Damron, there are important differences between Gallagher and the present case. First, the Gallagher agreement was disclosed to the trial judge.[9] Second, the trial that followed the making of the covenant was real. There was no agreement that the plaintiff would dismiss at the end of the plaintiff's case; the second defendant was present and could and did defend as its trial strategy dictated. See id. Gallagher is no help to Respondents.
¶ 22 Respondents next rely on Mustang Equipment v. Welch, 115 Ariz. 206, 564 P.2d 895 (1977). The Mustang agreement did contain a confidentiality clause. Mountain States, one of two defendants, and the plaintiff agreed that if a verdict was returned against both Mountain States and Mustang, the plaintiff would execute only against Mustang. This, of course, gave Mountain States a motive to blame Mustang for the accident that caused the plaintiff's damages. Id. at 208, 564 P.2d at 897. We concluded that the "particular agreement entered here did not encourage fraud or collusion" because Mountain States had already cross-claimed against Mustang, and even without the agreement it would have attempted to show that Mustang's negligence had been the only cause of the accident. Id. at 210, 564 P.2d at 899.
*607 ¶ 23 Thus, we were "satisfied" that non-disclosure of the agreement had not affected "the integrity of the trial." Id. at 211, 564 P.2d at 900. But we were disturbed by the non-disclosure and believed that failure to disclose such agreements could improperly affect many aspects of a case, including settlement, trial strategy, and arguments. Consequently, we concluded it was "better policy to require candid disclosure of all Gallagher-type agreements to the court and to all parties concerned...." Id. In closing the opinion we used the following words, which we believe should have controlled Respondents' duty to disclose in the malpractice action against Dr. Bair:
Finally, we think this is a matter of public policy. While we recognize that under the particular fact situation of this case there was neither fraud, collusion nor unethical conduct involved, we cannot condone secret agreements between a plaintiff and defendant which, by their very secretiveness, may tend to encourage wrongdoing and which, at the least, may tend to lessen the public's confidence in our adversary system.
Pursuant to the foregoing, we hold the agreement entered into between Welch [plaintiff] and Mountain States [defendant 1] to be unenforceable due to the failure of the parties to disclose the agreement to counsel for Mustang [defendant 2] and to the court.
Id.
¶ 24 The Mustang language is particularly applicable to the present case because the agreement before us is considerably less benign than that in Mustang. The trial in Mustang was to be a real trial with real results, not a pretense. The Mustang plaintiff did not agree to dismiss with prejudice before the case was submitted to the jury, nor did either Mustang defendant agree to allow the plaintiff's counsel free rein to do anything they wanted in presenting the case.
¶ 25 But, say Respondents, our court of appeals made it clear that the holding in Mustang had no application to cases like theirs, in which there was only a single party defendant. See State Farm Mut. Auto. Ins. v. Paynter, 122 Ariz. 198, 593 P.2d 948 (App. 1979). We disagree with this contention for two reasons. First, there were two defendants in this case, and both were parties at the time the agreement was made. The Hospital was still a party because Plaintiffs had moved for a new trial with regard to the order granting it summary judgment; therefore, any judgment entered in favor of the Hospital was not yet final and appeal was possible. Moreover, while the motion was pending, the Hospital was very much "directly interested in the subject matter of the suit...." See State v. Lamberton, 183 Ariz. 47, 49, 899 P.2d 939, 941 (1995). Second, the Hospital was still active in the case, assisting Respondents by providing and paying for an obstetrical expert to testify for Dr. Bair.
¶ 26 Thus, we do not believe Paynter validates the procedure Respondents followed in Dr. Bair's case.[10] In Paynter, the court of appeals held that the failure to disclose the agreement did not require reversal because the language in Mustang and Gallagher applied to agreements "between the plaintiff and only one of two defendants." Paynter, 122 Ariz. at 202, 593 P.2d at 952. Thus, the hearing officer found that Respondents took considerable comfort in Paynter and had a genuine belief that it freed them from any duty to disclose their agreement.
¶ 27 Accepting this for whatever it is worth, we now put an end to any comfort that others might feel in the future. We must reject Respondents' single-party argument and, insofar as it may be supported by Paynter, we must reject such an interpretation *608 of that case. Respondents' argument and their reliance on Paynter overlook the presence of a very important participant in the casethe trial judge. The judge is not just a casual observer of the passing scene but has important responsibilities in an adversarial system. While the judge is not a party as are litigants who produce evidence or argue the case, he or she is more than a referee presiding in a merely formal or ritualistic role. In an adversarial system, the judge is responsible for ensuring that justice is accomplished according to the substantive rules and procedural mechanisms established by law. Those procedural rules do not contemplate hoodwinking judges any more than jurors. While some things must be excluded from jurors' consideration to focus their attention on matters legally relevant, the rules do not contemplate hiding the true nature of the proceeding from the judge. Nor do they permit lawyers to remain silent when it is evident that the judge has been misled about what is occurring in his own courtroom.
¶ 28 Thus, the words we used in Mustang should have been considered the law of this state. Any agreement that, by its nature, "may tend to encourage wrongdoing" or "may tend to lessen the public's confidence in our adversary system" cannot be condoned if kept secret. Mustang, 115 Ariz. at 211, 564 P.2d at 900. We hold today, as strongly as possible, that any agreement that has the potential of affecting the manner in which a case is tried is one that may encourage wrongdoing and must therefore be disclosed to the trial judge and all litigants in the case. Thus, Respondents did have a duty to disclose. The hearing officer found, however, that after adequate research Respondents had a good faith belief that they had no duty to disclose. So far as Respondents' failure to disclose the covenant not to execute is concerned, we accept the finding and on that basis conclude that Respondents made only an error of law rather than a violation of the ethical rules. We do not sanction lawyers for good faith errors of law. See In re Myers, 164 Ariz. 558, 560, 795 P.2d 201, 203 (1990).
2. Actual fraud and collusion
¶ 29 We turn then to the core of the problemthe question of conducting a trial without disclosing to the trial judge that there was no result expected other than dismissal before the case went to the jury. While research and consultation on and about our previous cases might have led Respondents to conclude there was no duty to disclose the covenant, no research could have produced the conclusion that a lawyer could fail to tell a trial judge that the case being tried for two weeks was actually a moot court exercise. But the hearing officer actually found that the interests of Dr. Bair and Plaintiffs "remained adverse"; that, because the agreement might be unenforceable, there was "no assurance that Plaintiffs' counsel would in fact dismiss the case with prejudice at the close" of Plaintiffs' evidence; and that Respondents therefore had to prepare and try the case as if there had been no agreement. Report at 5. Thus, the hearing officer concluded, there was neither "collusion, fraud [n]or unethical conduct." Id.
¶ 30 We reject these findings as clearly erroneous and the conclusion as legal error. The agreement is, on its face, collusive. Any agreement by which one purported opponent must allow another to conduct a supposedly adversarial trial in any manner it wants is inherently collusive. If the adversary system means anything, it means that opposing parties will adopt a self-serving strategy. Based on the facts and the law, this strategy may or may not require preventing one opponent from doing whatever it wants. But, the agreement in question provided that Dr. Bair would make no objection to whatever evidence and witnesses were presented by Plaintiffs, without regard to whether that evidence was helpful to Dr. Bair, whether it was admissible, or whether the witnesses were disclosed or even competent to testify. Whatever may have happened during the trial, the agreement itself transformed Dr. Bair from an adversary into a marionette that Plaintiffs' counsel could manipulate in furtherance of their own ends. In the long run, the agreement would have furthered Dr. Bair's interests because he benefitted from the covenant not to execute, but the agreement *609 was inherently collusive because it committed Respondents to further a scheme to use a seemingly adversarial trial for an improper purpose.
¶ 31 We come then to the question of fraudthe so-called trial. Plaintiffs were obligated to put on their evidence and then dismiss with prejudice. While Respondents claim they had no way to know that the agreement was enforceable on this point, we are not so naive as to believe they would not have made every attempt to extricate their client from his precarious position by attempting to enforce the agreement. The combination of the agreement about presentation of evidence, the agreement to dismiss before the case went to the jury, and the covenant not to execute rendered this socalled jury trial a charade, evidently intended to improperly influence the trial judge. We can describe it best by quoting the words of Judge Moroney, the trial judge. When he finally discovered what had occurred, he had the following to say:
The lawyers involved duped the court into conducting a mock trial at the taxpayers' expense to serve their own ends. Because of that fraud on the court, at least the following wrongful acts occurred. Nine citizens of this county were ordered by the court to set aside nine working days of their lives at $12.00 a day, minus parking, so that they could serve as props in a charade. This judge, the court staff, and the facilities of this division, were occupied for over two weeks to further a devious private purpose, thus robbing legitimate litigants of what it is this court is here to do. Lawyers, as officers of the court, abused their licenses and ordered persons to be witnesses, coercing their presence by the illegitimate invocation of the contempt power of this court. This judge was even induced to order a non-party to produce a witness who did not wish to play in the game.
Minute Entry, May 20, 1996, at 5 (CV 92-22705).
¶ 32 Strong words, but we believe they were justified. The agreement was inherently collusive, and the manner in which it was implemented worked a fraud on the court, to say nothing of the jury, the witnesses, and the Hospital; all were led to believe Plaintiffs and Dr. Bair were engaged in a real trial with a real purposeto decide whether Dr. Bair was liable and, if so, to assess appropriate damages. In reality, it was prearranged that neither issue would be decided. The only explanation given for this entire charade was patently illegitimate. If the trial judge was to be educated for the pending motion on the order granting summary judgment to the Hospital, the parties should have presented whatever newly discovered evidence or argument there might have been in the motion proceedings and not by means of a mock trial in which the Hospital did not participate. The trial judge's characterization, quoted above, is accurate. Such conduct is inherently prejudicial to the administration of justice. Cf. In re Shannon, 179 Ariz. 52, 67, 876 P.2d 548, 563 (1994) (attorney's failure to execute satisfaction of judgment before cashing check, resulting in motion to compel and five-month delay, was undue waste of court resources and prejudicial to administration of justice).
¶ 33 We thus conclude that Respondents violated ER 8.4(d), which forbids conduct prejudicial to the administration of justice. Wasting weeks of court time and inconveniencing jurors and witnesses in a sham proceeding is a paradigm of such conduct.
3. Failure to respond to the trial judge's inquiries
¶ 34 The hearing officer concluded that Respondents "neither ignored their duty to the court nor negligently or knowingly violated it." Report at 5. We reject this mixed finding and conclusion as factually unsupported and legally erroneous. Even assuming, as the hearing officer found, that after adequate research Respondents reached a good faith conclusion that they had no duty to disclose the existence of the agreement, this certainly would not justify failing to tell the trial judge that it had been agreed that the trial would not go to verdict, that there was to be no result except to inform the judge's decision on an issue not even being tried. Obviously, the lawyers involved wished to keep this from the judge *610 because they knew he would never have knowingly permitted it. As noted above, no Arizona case stands as authority permitting non-disclosure on these facts, and so far as we know, there is no case in the country legitimizing such confidentiality. But the lawyers went beyond thisthey actively misled the trial judge. In fact, the trial judge went so far as to state that the lawyers "deliberately misrepresent[ed] facts." See Minute Entry of May 20, 1996, at 6.
¶ 35 Although the hearing officer seemed to believe there was no misrepresentation or misleading statement, the limited record before us indicates otherwise. The trial judge expressed his views during the trial as follows:
I just want to mention some things that are beginning to concern me. Based on the testimony or examination of Dr. Crowe, I've almost come to the conclusion that there has been some sort of agreement to throw out the rules of procedure for medical malpractice cases, not to mention good chunks of the rules of evidence. And I don't mind that. If you want to do that, that's fine. It's not my province to tell lawyers how to try their cases. But I am very concerned that we're going to be running over, and that is something that is my problem.
See Hmielewski, 192 Ariz. at 6 ¶ 26, 960 P.2d at 52 ¶ 26 (emphasis added). As the court of appeals noted:
[When the trial judge observed] that the trial was proceeding in an unusual manner, Hmielewski assured him that the trial was proceeding as expected, allaying his concerns. Of course, he and the other attorneys knew that only the plaintiffs' case would be presented, while the court did not have that information. It appears the trial court noticed that something was askew and that whatever it was, it was affecting the trial. The judge's statement shows that the agreement was having a noticeable effect on the evidence and the length of the trial.
Id.
¶ 36 Respondents' contribution to the exchange between Hmielewski and the judge was no more revealing than Hmielewski's; the judge said:
Well, what I am getting here from Mr. Hmielewski is that he's going to call all of your witnesses, and that means that when he rests, you rest? How's that Mr. Alcorn?
Alcorn replied:
I don't know. I had a brief discussion with Mr. Hmielewski where we raised these issues, but clearly I'm not at this moment totally comfortable with the time line he's putting on this. There may be two or three other witnesses we would want to call, not in the nature of expert witnesses certainly.
RT at 201-02. What was Respondents' legitimate interest in calling witnesses when the case was to be dismissed at the close of Plaintiffs' evidence? If, as Respondents claim, they had to be ready to go forward if Hmielewski breached his agreement to dismiss, it was incumbent upon them to be honest with the judge. They hoped not to put on any witnesses because they believed Plaintiffs would dismiss.
¶ 37 Later, when Plaintiffs proposed to dismiss with prejudice, the judge inquired again about the unusual nature of the proceeding and made his concern clearhe did not "want any sweetheart deals that [he was not] fully informed about anywhere." See supra ¶ 15 for full quote. The trial judge did not want anything "crafted" in a way that "would be misleading to" him. Id. Respondents gave their "assurances to the Court that there will be no sweetheart deals." Id. True, the judge's inquiry was not as precise as it might have been; true, Respondents correctly represented that there was no agreement regarding future testimony or payment of consideration. But, to paraphrase Justice Stewart, while we may not be able to define a sweetheart deal, we know enough to recognize one when we see it. If ever there was such a deal, this was it, and we believe that Respondents, like any other experienced trial lawyers, knew what the trial judge meant and knew that they had such a deal. Instead of being frank and open when the judge made it clear he wanted to know what was happening, they gave the *611 judge a response that must be characterized as knowingly evasive at best and deliberately misleading at worst.
¶ 38 There is no question regarding how the trial judge characterized the situation when he later learned the truth. He felt he was "duped," that there had been "fraud on the court," and that the lawyers' conduct was "misleading." See Minute Entry of May 20, 1996, at 5-6. "Deliberately concealing" the agreement was "tantamount to knowingly making a false statement of a material fact to a tribunal." Id. Relying on our opinion in In re Fee, 182 Ariz. 597, 898 P.2d 975 (1995), however, Respondents argue that they did not lie but merely remained silent with respect to the subject of the judge's inquiry. Even if this was a proper characterization of the events, Fee does not justify silence that misleads the court. In Fee we said that the lawyers could have either disclosed the fee agreement with the client or "politely declined any discussion of fees." Id. at 601, 898 P.2d at 979. Either alternative would have put the court on notice that the lawyers did not consent to the settlement judge's attempts to intervene in the agreement between themselves and their client and would have left the issue of attorneys' fees to be decided by the trial judge. But Fee does not give any legitimacy to the idea that a lawyer can remain silent while knowing that such silence has the effect of misleading the court. Fee stands for the opposite principlewe held that the lawyers in Fee violated both ER 3.3(a)(1) and ER 8.4(c) and (d) for remaining silent when it was obvious that the judge was misled. Silence may be golden but not when the lawyer misleads the court by failing to speak.
¶ 39 Respondents' view of their exchanges with the trial judge is quite benign: in essence, they would have us hold that the judge did not ask the right question, so they did not tell a falsehood. Even were we to accept this factual predicate, as the hearing officer evidently did, we would reach the opposite conclusion. Applying the most generous characterization, Respondents' evasions violated ER 8.4(c), which prohibits "conduct involving... fraud, deceit or misrepresentation." Fraud, as used in Rule 42, "denotes conduct having a purpose to deceive and not merely negligent misrepresentation or failure to apprise another of relevant information." Terminology, Preamble to Rule 42. In answering the trial judge's inquiries, Respondents went beyond mere failure to apprise or disclose and affirmatively misled; they deceived the trial judge by answers that purposefully disguised the true situation when any "lawyer of reasonable prudence and competence" would have known that the judge's inquiry required disclosure. See id.; Fee, 182 Ariz. at 601, 898 P.2d at 979. Thus, Respondents' answers to the trial judge violated ER 8.4(c).
¶ 40 Respondents were also charged with violating ER 3.3(a)(1), prohibiting false statements of fact or law to a tribunal. The hearing officer found the ER 3.3 charge unsupported and recommended dismissal. The Commission agreed and dismissed the charge. We believe that Respondents' conduct violated ER 3.3(a)(1), and that the contrary findings by the hearing officer and the Commission are clearly erroneous. Under some circumstances, failure to make a necessary disclosure is tantamount to an affirmative misrepresentation. See Fee, 182 Ariz. at 600, 898 P.2d at 978 (citing comments to Rule 3.3); see also In re Wilka, 638 N.W.2d 245 (S.D.2001), 2001 SD 148 (attorney who made truthful statements in course of "intentionally evading plain and understandable questions" misled the court by misrepresenting the evidence). In this instance it is enough for us to note that the conduct violating ER 8.4(c) may be more specifically identified by reference to ER 3.3(a)(1).
Modern lawyer codes contain one or more provisions (sometimes referred to as "catch-all" provisions) stating general grounds for discipline, such as engaging "in conduct involving dishonesty, fraud, deceit or misrepresentation" (ABA Model Code of Professional Conduct, Rule 8.4(c) (1983)).... Such provisions are written broadly both to cover a wide array of offensive lawyer conduct and to prevent attempted technical manipulation of a rule stated more narrowly. On the other hand, the breadth of such provisions creates the risk that a charge using only such language would fail to give fair warning of the *612 nature of the charges to a lawyer respondent... and that subjective and idiosyncratic considerations could influence a hearing panel or reviewing court in resolving a charge based only on it.
1 RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 5 cmt. c. (2000). Respondents violated ER 3.3(a)(1).
B. Appropriate sanction
¶ 41 This court has long held that "the objective of disciplinary proceedings is to protect the public, the profession and the administration of justice and not to punish the offender." In re Kastensmith, 101 Ariz. 291, 294, 419 P.2d 75, 78 (1966). That does not mean, however, that we will be swayed by the character of the offending attorney's practice, the impact of sanctions upon the attorney's livelihood, or the resulting degree of any psychological pain experienced by the attorney. In re Scholl, 200 Ariz. 222, 224 ¶ 10, 25 P.3d 710, 712 ¶ 10 (2001) (citation omitted). Instead, we will look to the American Bar Association's Standards for Imposing Lawyer Sanctions (1991) (Standards) for guidance. See, e.g., In re Higgins, 180 Ariz. 396, 400, 884 P.2d 1094, 1098 (1994). After finding a lawyer's misconduct, we consider the following factors in imposing a sanction: (a) the duty violated; (b) the lawyer's mental state; (c) the actual or potential injury caused by the lawyer's misconduct; and (d) the existence of aggravating or mitigating factors. Standard 3.0.
¶ 42 As to the first two factors, we have already determined that Respondents violated ER 8.4(c) and (d), thus abdicating some of the most fundamental obligations of professional and personal integrity by affirmatively misleading the judge when he became suspicious. We are deeply troubled by these serious violations of duty, which could lead to disbarment. But the record supports the finding that Respondents' intentional deceptions and evasions were more likely the result of a failure to grasp their true obligations to the tribunal rather than an attempt to misuse the process for personal gain. We also accept the finding that Respondents were motivated by an honest desire to do everything within their power to help their client. In light of these factors, disbarment is not indicated.
¶ 43 As to the third factor, we note that the misconduct caused very serious injury. Not only was the system injured by a waste of time and scarce resources, it was also damaged in the sense that the jurors and witnesses had their time wasted and lives disrupted in furtherance of a farce, thus eroding public confidence in the integrity of our profession. Furthermore, the scheme was intended to improperly set up the Hospital for liability on a claim with damages potentially measuring in the millions. Finally, Respondents' own client was damaged; Dr. Bair was once again left facing trial as the sole defendant, notwithstanding that he incurred $45,000 in attorneys' fees to Respondentsfees computed in part as charges for ten days of so-called trial.
¶ 44 Finally, we consider any aggravating and mitigating factors. Each Respondent has had a prior disciplinary sanction, which is normally an aggravating factor under Standard 9.22(a); however, because the time and facts of their prior offenses are remote from those at issue today, we do not view them as seriously aggravating. Standard 9.32(m). We do find another aggravating factor applicable under the facts of this case: each Respondent has significant experience in the practice of law and should have known better than to participate in a show trial and actively mislead a judge.
¶ 45 Several mitigating factors apply as well. First, as noted above, we find no selfish motive. Standard 9.32(b). But doing everything within one's power to help one's client is not the same as license to do anything. Ordinarily, a lawyer should do everything morally and ethically proper in presenting a client's case or helping to resolve the client's problems. But this does not permit conduct that deceives the court, deceives an opposing party, and wastes the time of judge, jury, and witnesses by an undisclosed and meaningless performance. It is often said that a lawyer is an officer of the court. If the phrase is to have any real meaning, it must require that ethical obligations *613 to the court be put ahead of the duty to assist a client. As the Ohio Supreme Court stated in Office of Disciplinary Counsel v. Greene, 74 Ohio St. 3d 13, 655 N.E.2d 1299, 1301 (1995):
While an attorney, as a zealous advocate, may characterize facts favorable to the attorney's client, the attorney's duty, as an officer of the court, is to uphold the legal process and demonstrate respect for the legal system by at all times being truthful with a court and refraining from knowingly making statements of fact or law that are not true. Respect for the law and our legal system, through both an attorney's words and actions, should be more than a platitude.
In this case, therefore, we are not disposed to attach much mitigating weight to the fact that Respondents were only attempting to assist their client. The ethical rules set limits to how lawyers may assist their clients and require that lawyers' primary allegiance be to the system of justice.
¶ 46 Second, Respondents have exhibited a cooperative attitude toward the disciplinary proceedings. Standard 9.32(e). Third, also noted above, they have already suffered the $15,000 fines and public record of their misconduct. Standard 9.32(k). And finally, we see no danger that Respondents will repeat such misconduct in the future; they have apparently practiced without incident since the time of the underlying action. Thus, we see no need to impose a suspension of six months and one day. Any suspension longer than six months requires that the suspended lawyer apply for reinstatement and make a showing of rehabilitation once the suspension period has expired. See Rule 71(d) and (h); Rule 72. From a pragmatic standpoint, of course, the process of application and consideration of a petition for reinstatement may extend the suspension period far beyond six months and one day. A suspension of six months or less, on the other hand, results in eligibility for reinstatement upon filing of an affidavit pursuant to Rule 71(c) at the end of the suspension period.
¶ 47 Given the very serious nature of Respondents' conduct, suspension is the only appropriate sanction. Moreover, the Standards' suspension provision addresses their conduct directly:
Suspension is generally appropriate when a lawyer knows that false statements or documents are being submitted to the court or that material information is improperly being withheld, and takes no remedial action, and causes injury or potential injury to a party to the legal proceeding, or causes an adverse or potentially adverse effect on the legal proceeding.
Standard 6.12. The Standards also indicate that when suspension is appropriate, it should generally be imposed for a term of six months or more but not exceeding three years. See Standard 2.3.
¶ 48 Perhaps more important than rehabilitation of an individual attorney, however, is the value of discipline as a deterrent to other attorneys and as a process that maintains "the integrity of the profession in the eyes of the public." In re Fioramonti, 176 Ariz. 182, 187, 859 P.2d 1315, 1320 (1993) (citation omitted). The critical importance of these interests compels us to impose a sanction greater than that recommended by the Commission. It is within this court's power as the ultimate authority in disciplinary matters to "up the ante" when necessary. See In re Walker, 200 Ariz. 155, 159 ¶ 15, 24 P.3d 602, 606 ¶ 15 (2001).[11]
*614 ¶ 49 Finally, we look to other, similar cases in determining whether the sanction imposed is proportionate to the misconduct charged. The Fee case is the closest analogue to the present matter. In Fee, the settlement judge proposed a structured settlement, largely to reduce attorneys' fees, but the plaintiff and her counsel reached an agreement whereby the plaintiff was to pay a portion of her settlement proceeds as attorneys' fees, matching the contingent fee she had originally agreed to. When the settlement judge read aloud what he thought were the terms of settlement, the plaintiff's lawyers made no mention of their new fee agreement. We held that, instead of remaining silent, the plaintiff's lawyers "should have either disclosed the complete arrangement or politely declined any discussion of fees." Fee, 182 Ariz. at 601, 898 P.2d at 979. The court ultimately imposed only a censure.
¶ 50 There are, however, crucial distinctions between Fee and the present case. First, in Fee we concluded that Fee's conduct was prejudicial to the administration of justice but decided not to pursue the issue pertaining to ER 8.4. Id. at 600, 898 P.2d at 978. By contrast, such conduct goes to the heart of the present case. Second, the Fee court specifically noted an absence of actual or potential injury to a party. Id. n. 10. Here, unlike Fee, Respondents have caused both actual and potential injuries through their conduct, and these substantial injuries extend to the system, the jurors, the witnesses, their client, and perhaps even to the Hospital. To a large extent the damage was not only foreseeable but certain to occur, at least with respect to the waste of time for judge, jury, and witnesses. The failure to disclose in Fee related to the contractual arrangements between the lawyers and their client, not to the lawyers' conduct in the courtroom. Finally, unlike Respondents, the Fee attorneys never made an affirmative misrepresentation to the judge. These distinctions do not excuse the intentional omission in Feethey simply highlight the magnitude of Respondents' affirmative misconduct. Even if Respondents had been correct in concluding in the first place that there was no duty to disclose the sham nature of the trial, that would not have justified affirmatively misleading the judge when he tried to find out what was occurring. We simply cannot condone affirmative acts that misled the court, nor can we overlook the substantial damage that resulted.
¶ 51 Accordingly, Respondents are hereby suspended from the practice of law in Arizona for a period of six months beginning sixty days from the date this opinion is filed. Respondents are ordered to pay costs pursuant to Rule 52(a)(8).
CONCURRING: THOMAS A. ZLAKET, Chief Justice, CHARLES E. JONES, Vice Chief Justice, and RUTH V. McGREGOR, Justice.
NOTES
[1] Ariz.R.Sup.Ct. will hereafter be referenced with "Rule" followed by the relevant rule's numerical designation.
[2] ER 3.3 states in pertinent part:
(a) A lawyer shall not knowingly:
(1) make a false statement of material fact or law to a tribunal;
(2) except as required by applicable law, fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client;
* * *
[3] ER 8.4 states in pertinent part:
It is professional misconduct for a lawyer to:
* * *
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
* * *
[4] In reviewing the hearing officer's findings of fact, the Commission and the court must apply a clearly erroneous standard, while questions of law are reviewed de novo. Rule 53(d)(2) and (e)(11).
[5] Evidently one reason for the provision about witnesses was that Plaintiffs had decided, at the last minute, to exhume the deceased mother's body and were hoping to offer some expert testimony on the cause of death. The expert, as far as we can tell, was named only in the joint pretrial statement, dated one day prior to trial.
[6] We are bewildered by this theory. The trial judge's grant of summary judgment was, of course, made on the basis of the record as it existed at the time he heard the motion. The propriety of the order granting summary judgment was to be evaluated in the same manner, unless Plaintiffs could show newly discovered evidence. See Rule 60(c), Ariz.R.Civ.P. If Plaintiffs had newly discovered evidence, one would think it would have to be established in the hearing on the motion rather than in the type of trial contemplated by this secret agreementa proceeding in which the Hospital would not be a participant. We doubt that able counsel for the Hospital would consider their client bound by the education imparted to the trial judge without benefit of any adversary proceedings.
[7] Censure was the only sanction that our bar imposed on Hmielewski, who is not a member of the Arizona bar. Although Rule 33(d) provides an avenue to hold disciplinary proceedings for out-of-state counsel, any disciplinary action beyond what was done in this matter would have to be taken in Florida, the offending attorney's home state bar, as a matter of comity. Thus, we content ourselves with the censure and revocation of Hmielewski's pro hac vice status. His Arizona co-counsel was Rodney G. Johnson of Phoenix. See Hmielewski, 192 Ariz. at 2 ¶ 5, 960 P.2d at 48 ¶ 5. Johnson, who played only a passive part in these events, made a consent agreement with the State Bar, and the hearing officer recommended a censure. See State Bar file number 96-1107.
[8] We use the term "sham" because in our case the parties to the trial had agreed that the trial would have no result of any kindthe action would be dismissed at the end of Plaintiffs' case in chief.
[9] See City of Tucson v. Gallagher, 14 Ariz.App. 385, 387, 483 P.2d 798, 800 (App.1971).
[10] Again, there are significant differences between Paynter and this case. Paynter was similar to the Damron situationthere was no coverage, and State Farm refused to indemnify or defend its insured against Paynter's damage claim. Paynter and the insured therefore made a pretrial agreement in which the defendant assigned his rights against his insurer in exchange for the plaintiff's covenant not to execute on any judgment. In effect, the defendant allowed the plaintiff to take judgment by default. Id. at 199, 593 P.2d at 949. There was no sham adversary trial. Further, the court pointed out that it "would certainly have been better practice to advise the trial court of the existence of the Damron agreement, particularly in order to ensure the trial court's fair scrutiny of damages." Paynter, 122 Ariz. at 202, 593 P.2d at 952.
[11] "[S]hort-term suspensions with automatic reinstatement are not an effective means of protecting the public. If a lawyer's misconduct is serious enough to warrant a suspension from practice, the lawyer should not be reinstated until rehabilitation can be established. While it may be possible in some cases to show rehabilitation in less than six months, it is preferable to suspend a lawyer for at least six months in order to ensure effective demonstration of rehabilitation." Standard 2.3, cmt. We impose no more than a six-month suspension because to do so under the present circumstances would be unduly harsh. See supra ¶ 46. Although under Rule 71(h) Respondents will not be required to prove rehabilitation prior to being reinstated, the Commission may choose to oppose reinstatement. See Rule 71(c). There is no need to prove rehabilitation in this case. Respondents will have learned their lesson. We are less concerned with rehabilitation in this case and more concerned with deterring others and maintaining the integrity of the profession.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600724/
|
41 P.3d 461 (2002)
2002 UT App 5
Keith W. BOURGEOUS, Plaintiff and Appellant,
v.
STATE of Utah, DEPARTMENT OF COMMERCE, Defendant and Appellee.
No. 20000780-CA.
Court of Appeals of Utah.
January 10, 2002.
*462 Cass C. Butler, Callister, Nebeker & McCullough, Salt Lake City, for Appellant.
Mark L. Shurtleff, Atty. Gen., and William Loos, Asst. Atty. Gen., Salt Lake City, for Appellee.
Before JACKSON, P.J., and GREENWOOD and ORME, JJ.
OPINION
GREENWOOD, Judge:
¶ 1 Keith Bourgeous appeals the trial court's ruling affirming the Utah Department of Commerce's (the Department) decision denying him a professional engineer's license for failure to meet the Department's educational requirements. Bourgeous argues the trial court should not have affirmed the Department's decision because (1) Bourgeous's engineer-in-training certificate meant that he irrevocably met the education requirements for licensure, and (2) the Department violated the Utah Administrative Procedures Act. We conclude the trial court correctly affirmed the Department's decision.
BACKGROUND
¶ 2 On June 9, 1989, Bourgeous graduated from Weber State University with a Bachelor of Science degree in Electrical Engineering Technology. At that time, Weber State was accredited by the Technology Accreditation Commission/Accreditation Board of Engineering and Technology (TAC/ABET), but was not accredited by the Engineering Accreditation Commission/Accreditation Board of Engineering and Technology (EAC/ABET). After graduation, Bourgeous was eligible to take the Fundamentals of Engineering (FE) exam. Bourgeous passed the FE exam and was issued an engineer-in-training certificate (the Certificate).
¶ 3 Once Bourgeous obtained the Certificate, he began working towards the four years of work experience required to obtain a license. However, Bourgeous's employer could only provide part-time experience, so it took eight years to complete the equivalent of four years of full-time experience. During these eight years, the legislature amended the statutes regulating licensing requirements, but Bourgeous did not believe that the changes would affect him since he held the Certificate.
¶ 4 Bourgeous took and passed the Principles of Engineering (PE) exam in April 1997. Bourgeous completed his work experience and applied for licensure in September 1997. The Department denied Bourgeous's application because his educational qualifications were no longer valid under the current licensing criteria. See Utah Code Ann. § 58-22-302 (Supp.2001);[1] Utah Admin. Code R156-22-201, -202, -204 (2001). Bourgeous administratively appealed the Department's decision without success.
¶ 5 Bourgeous appealed the Department's decision to the Third District Court in January 1998. Bourgeous filed a motion for summary judgment, which was denied. After denying Bourgeous's motion for summary *463 judgment, the trial court certified the issues for appeal under Rule 54(b) of the Utah Rules of Civil Procedure. This appeal followed.
ISSUES AND STANDARD OF REVIEW
¶ 6 Bourgeous's primary argument is that the Certificate created a vested, statutory right that could not be revoked. Because statutory interpretation is an issue of law, we review this argument for correctness. See Rushton v. Salt Lake County, 1999 UT 36, ¶ 17, 977 P.2d 1201.
¶ 7 Bourgeous also argues that the trial court erred in failing to rule that the Department violated the Utah Administrative Procedures Act by (1) erroneously interpreting or applying the law, and (2) arbitrarily and capriciously treating Bourgeous differently than other similarly situated professional engineer applicants. When a statute grants discretion to an agency to interpret and apply the law, this court reviews the agency interpretation and application for reasonableness. See Tasters Ltd. v. Department of Employment Sec., 863 P.2d 12, 19 (Utah Ct.App.1993). Finally, "We review claims that an agency action was arbitrary and capricious for reasonableness." Anderson v. Public Serv. Comm'n, 839 P.2d 822, 824 (Utah 1992).
ANALYSIS
I. STATUTORY BACKGROUND
¶ 8 This case involves three different versions of the Professional Engineers Licensing statute. See Utah Code Ann. § 58-22-5 (1986) (the 1986 Act); Utah Code Ann. § 58-22-5 (1992) (the 1992 Act) (repealed before taking effect); Utah Code Ann. § 58-22-302 (Supp.2001) (the 1996 Act). The 1986 Act was in effect when Bourgeous graduated from Weber State University in 1989. Under the 1986 Act, an applicant must have graduated with a Bachelors degree from either a TAC/ABET or an EAC/ABET accredited university before applying for professional licensure. See Utah Code Ann. § 58-22-5(2)(a)(i); Utah Admin. Code R.153-22-2(a)(1)(a) (1989). After graduation, an applicant could take the FE exam. See Utah Code Ann. § 58-22-5(2)(b) (1986). After passing the FE exam, an applicant received the Certificate, which entitled him or her to begin the required four years of work experience. See id. § 58-22-5(3). Upon completing the four years of work experience, an applicant could take the PE exam. See id. § 58-22-5(3)(c). Upon passing the PE exam, an applicant could apply for licensure as a professional engineer. See id.
¶ 9 In 1992, the legislature substantially changed these requirements. Under the 1992 Act, the legislature expressly stated that a degree from an EAC/ABET university was the only degree that would suffice for licensure. See Utah Code Ann. § 58-22-5(2)(a), (9) (1992). The University of Utah and Utah State University were the only Utah universities accredited by the EAC/ABET. Because this change would affect many TAC/ABET graduates, the legislature delayed the effective date of the 1992 Act until July 1, 1996. See id. § 58-22-5(2), (9). However, if a TAC/ABET graduate failed to complete all of the requirements of the 1986 Act before July 1, 1996, he or she would have to return to school and obtain an engineering degree from an EAC/ABET university. See id. § 58-22-5(9).
¶ 10 Shortly before the 1992 Act was to take effect, the legislature repealed it and replaced it with the 1996 Act. Under the 1996 Act, the legislature expressly granted the Department discretion to decide which degrees would be acceptable for professional licensure. See Utah Code Ann. § 58-22-302(2)(d) (Supp.2001). The Department's rules, promulgated pursuant to section 58-22-302(1)(d), allow only an EAC/ABET degree for licensure. See Utah Admin. Code R156-22-201 (2001). The legislature also granted the Department discretion to determine the qualifying experience and exam requirements necessary for licensure. See Utah Code Ann. § 58-22-302(1)(e), (f) (Supp. 2001). Pursuant to section 58-22-302(1)(f), the Department requires successful completion of both the FE and the PE exams for full licensure. See Utah Admin. Code R156-22-204. All of the requirements of the 1996 Act took effect July 1, 1996.
*464 ¶ 11 To illustrate the differences between each statutory scheme, we provide the following table explaining the requirements for licensure under each statutory version.
|-----------------------------------|----------------------------------|--------------------------------|
| The 1986 Act | The 1992 Act | The 1996 Act |
| § 58-22-5 (1986) | § 58-22-5 (1992) (repealed | § 58-22-302 (Supp. 2001) |
| | before taking effect) | |
|-----------------------------------|----------------------------------|--------------------------------|
| Prior to July 1, 1996 all | Effective July 1, 1996 all | Effective July 1, 1996 all |
| applicants must: | applicants must: | applicants must: |
| | | |
| 1. Graduate from a TAC/ABET | 1. Graduate from an EAC/ABET | 1. Graduate from an |
| or EAC/ABET accredited college | accredited university with an | engineering program that meets |
| or university with an engineering | engineering degree. | the accreditation requirements |
| degree. | | of the Department. The |
| | 2. Pass the FE exam. | Department requires graduation |
| 2. Pass the FE exam. | | from an EAC/ABET accredited |
| | 3. Complete four years of | university. |
| 3. Obtain the Certificate | qualifying experience. | |
| | | 2. Complete the qualifying |
| 4. The Certificate authorized | 4. Pass the PE Exam. | experience requirements set by |
| the holder to complete the | | the Department. The |
| required four years of | 5. Apply for licensure. | Department requires four years |
| progressive experience. The | | of experience. |
| Certificate was not renewable | 6. All individuals who graduated | |
| and was good for 10 years. | from a TAC/ABET accredited | 3. Pass all the examinations |
| | school must obtain an | required by the Department. |
| 5. Complete four years of | EAC/ABET degree. However, | The Department requires both |
| progressive experience. | TAC/ABET graduates could still | the FE and PE exams for full |
| | take the FE exam. | licensure. |
| | | |
| 6. Pass the PE Exam. | | 4. Apply for licensure. |
| | | |
| 7. Apply for licensure. | | |
---------------------------------------------------------------------------------------------------------
II. THE CERTIFICATE
¶ 12 Bourgeous contends that once the Department issued him the Certificate, he had a vested, statutory right that prevented the legislature from changing the education requirements to Bourgeous's detriment.[2] Under the 1986 Act, the Department was required to issue the Certificate to an applicant who obtained an engineering degree from a TAC/ABET accredited university and passed the FE exam. See Utah Code Ann. § 58-22-5(2) (1986). Because Bourgeous graduated from a four-year curriculum that was approved by the Department, Bourgeous was properly issued the Certificate.
¶ 13 Under the 1986 Act, an applicant for a professional engineer's license must hold the Certificate, complete four years of experience, and pass the PE exam before applying for licensure. Bourgeous contends that because he met the educational requirements to obtain the Certificate, and because the Certificate was a requirement for licensure, he irrevocably met the education requirements as a matter of law pursuant to section 68-3-5 of the Utah Code. Section 68-3-5 states: "The repeal of a statute does not revive a statute previously repealed, or affect any right which has accrued, any duty imposed, any penalty incurred, or any action or proceeding commenced under or by virtue of the statute repealed." Utah Code Ann. § 68-3-5 (2000). Therefore, Bourgeous argues, since he met the educational requirements under the 1986 Act, he obtained a vested right in the sufficiency of his educational *465 background that the Department could not abrogate after the repeal of the 1986 Act. We disagree.
¶ 14 It is axiomatic that a license does not create any vested rights in its holder because a license is not a contract. See, e.g., Riggins v. District Court of Salt Lake County, 89 Utah 183, 51 P.2d 645, 658 (1935); Chance Mgmt. v. South Dakota, 97 F.3d 1107, 1119 n. 13 (8th Cir.1996) (stating a license is not a contract and does not create any vested rights in its holder); Blum v. Ford, 194 Ark. 393, 107 S.W.2d 340, 344 (1937) ("[A] license is not a contract between the government and the licensee, and it creates no vested rights." (citation and quotations omitted)). In Riggins, the Utah Supreme Court stated:
[A] license is not a contract, it is clear that it does not in itself create any vested right, or permanent right, and that free latitude is reserved by the legislature to impose new or additional burdens on the licensee, or to alter the license, or to revoke or annul it. And this is the general rule notwithstanding the expenditure of money by the licensee in reliance thereon, and regardless of whether the term for which the license was given has expired.
51 P.2d at 658 (citation and quotations omitted). Furthermore, the court stated that because the legislature cannot pass irrepealable legislation, the legislature is free to change licensing requirements to serve the public good. See id. Therefore, since Bourgeous's completion of the educational requirements under the 1986 Act cannot create a vested right, section 68-3-5 does not apply as no "right [has] accrued."[3] Utah Code Ann. § 68-3-5 (2000).
III. THE ADMINISTRATIVE PROCEDURES ACT
¶ 15 Bourgeous next argues that the Department violated the Utah Administrative Procedures Act in several ways. Utah Code Ann. § 63-46b-16(4) (1997) states:
The appellate court shall grant relief only if, on the basis of the agency's record, it determines that a person seeking judicial review has been substantially prejudiced by any of the following:
....
(b) the agency has acted beyond the jurisdiction conferred by any statute;
....
(d) the agency has erroneously interpreted or applied the law;
....
(h) the agency action is:
....
(iv) otherwise arbitrary or capricious.
Id. Since Bourgeous argues that the Department acted beyond its jurisdiction because it misinterpreted the 1996 Act, we analyze this argument in conjunction with our analysis of whether the Department erroneously interpreted or applied the law. Finally, we discuss whether the Department's action was otherwise arbitrary and capricious.
A. Interpretation and Application
¶ 16 Bourgeous argues the Department erroneously interpreted the law for two reasons. First, Bourgeous argues that the repeal of the 1992 Act proves that the legislature meant to change its prior rejection of TAC/ABET degrees for licensure. Second, because the legislature repealed its prior rejection of TAC/ABET degrees, the Department misinterpreted the 1996 Act by not including TAC/ABET degrees in its regulation specifying the education requirements for licensure. These arguments fail.
¶ 17 First, the 1992 Act expressly stated that only EAC/ABET degrees were acceptable for licensure, and that those graduates from a TAC/ABET school must complete an EAC/ABET program to be licensed *466 as professional engineers. See Utah Code Ann. § 58-22-5(9) (1992). Bourgeous argues that because the legislature repealed the 1992 Act before it took effect, it necessarily intended to revive its acceptance of TAC/ABET degrees for professional licensure. However, this argument contradicts his previous argument under section 68-3-5, which states, "The repeal of a statute does not revive a statute previously repealed." Utah Code Ann. § 68-3-5 (2000). Hence, when the legislature repealed the statute disqualifying TAC/ABET degrees from licensure, the legislature did not revive its previous acceptance of TAC/ABET degrees under the 1986 Act.
¶ 18 Second, while Bourgeous vehemently argues that the only reason for the repeal of the 1992 Act and passage of the 1996 Act was to accept TAC/ABET degrees, he fails to support that conclusion. The legislature gave the Department discretion to determine acceptable education requirements, and "an agency's interpretation of statutory provisions is entitled to deference when there is more than one permissible reading of the statute and no basis in the statutory language or the legislative history to prefer one interpretation over another." See Morton Int'l Inc. v. Utah State Tax Comm'n, 814 P.2d 581, 588 (Utah 1991). Therefore, we look to the plain language to determine whether Bourgeous's reading of the statute should be preferred over the Department's. See Biddle v. Washington Terrace City, 1999 UT 110, ¶ 14, 993 P.2d 875.
¶ 19 The plain language of the 1996 Act reflects the legislature's concern over who makes decisions regarding licensing requirements rather than what those requirements should be. Under the 1996 Act, "Each applicant for licensure ... shall ... have graduated and received an earned bachelors or masters degree from an engineering program meeting criteria established by rule by the division in collaboration with the board." Utah Code Ann. § 58-22-302(1)(d)(i) (Supp. 2001). The legislature granted the Department broad discretion to determine the educational requirements and provided no guidance other than that the applicant must have a bachelors or masters degree. Hence, the plain language of the 1996 Act establishes that the reason the legislature repealed the 1992 Act and adopted the 1996 Act was to change the government body that made licensing requirement decisions. In fact, the primary reason for the change was to allow the Department and the Professional Engineers and Professional Land Surveyors Licensing Board to determine whether the TAC/ABET degree was equivalent to the EAC/ABET degree. See Utah Code Ann. § 58-22-201 (1998) (describing board, its members, and duties). In other words, the legislature delegated these responsibilities to those with expertise in engineering qualifications. See id. Therefore, there is no basis in the plain language to suggest that Bourgeous's reading should be preferred over the Department's.
¶ 20 Bourgeous further argues that section 58-22-306 evidences that the legislature intended TAC/ABET and EAC/ABET degrees to be on equal footing for licensure. Under section 58-22-306, the legislature states that either a TAC/ABET degree or an EAC/ABET degree qualifies for the purpose of taking the FE exam. See Utah Code Ann. § 58-22-306 (1998). Therefore, Bourgeous argues, because TAC/ABET and EAC/ABET degrees are on equal footing for qualifying an applicant to take the FE exam, the legislature implicitly required the Department to consider both degrees equal for the purpose of licensure.
¶ 21 Again we examine the plain language of the statute. To help determine the meaning of the plain language, we assume that "the expression of one should be interpreted as the exclusion of another." Biddle, 1999 UT 110 at ¶ 14, 993 P.2d 875 (citation omitted). According to the plain statutory language, TAC/ABET and EAC/ABET degrees are on equal footing for the purpose of taking the FE exam only. If the legislature intended TAC/ABET degrees to be acceptable for licensure, it would have specifically so stated. Therefore, Bourgeous's argument regarding section 58-22-306 is unavailing. The 1996 Act does not allow TAC/ABET *467 degrees to qualify for licensure, but leaves that decision to the Department.[4]
B. Arbitrary and Capricious
¶ 22 Bourgeous argues that the Department treated him arbitrarily and capriciously by treating him differently than other similarly situated applicants. If the Department treated Bourgeous differently than other similarly situated applicants, the Department's decision is arbitrary and capricious as a matter of law. See Steiner Corp. v. Auditing Div., 1999 UT 53, ¶ 12, 979 P.2d 357 ("It is as arbitrary and capricious to apply the same law to the same facts and reach a different result as it is to apply a different rule in a factually similar situation."). Bourgeous argues he was treated differently than similarly situated applicants because: (1) John Hunter (Hunter) was granted a license after July 1, 1996 even though he had a TAC/ABET degree; and (2) the Department's rules governing licensure by endorsement of foreign applicants recognizes TAC/ABET degrees. We address each argument separately below.
1. John Hunter
¶ 23 Bourgeous claims that the Department acted arbitrarily and capriciously by not granting Bourgeous a license because the Department granted John Hunter a license, even though Hunter had a TAC/ABET degree and applied for licensure after the July 1, 1996 deadline. Hunter took the PE exam before July 1, 1996, but received a failing score. After his exam was rescored, he passed. The Department gave Hunter his license on the theory that the passing grade related back to the date of his "initial application." However, Hunter never made an "initial application" and did not apply until January 1997. The Department concedes that it may have erred in its reasoning for granting Hunter a license, but argues that the outcome was still correct because Hunter finished his PE exam and his work experience before the July 1, 1996 deadline, even though he did not apply until January 1997. Essentially, the Department made an exception for Hunter because it was their mistake in scoring the PE exam that prevented Hunter from timely filing his application.[5]
¶ 24 Bourgeous argues that because Hunter's correct test score and application related back to qualify his application as timely, the Department should have granted Bourgeous a license based upon his initial application in 1989 when he obtained the Certificate. However, the 1986 Act clearly states that an applicant must obtain the Certificate and complete other requirements before applying for licensure. See Utah Code Ann. § 58-22-5(3) (1986). Thus, if an applicant must obtain the Certificate before applying for licensure, the Certificate itself cannot be the equivalent of an application for a license.
¶ 25 The Department also claims that Hunter is different than Bourgeous because Hunter completed both the PE exam and work experience before July 1, 1996. Hunter completed all requirements before the deadline even though he did not turn in proof of completion until after July 1, 1996 as part of the application process. Bourgeous, however, had not completed his work experience nor had he taken and passed the PE exam prior to July 1, 1996. As a result, Bourgeous and Hunter were not similarly situated, and the Department was not obligated to accept Bourgeous's application. Furthermore, because the 1992 Act was not to take effect until 1996, Bourgeous had four years notice that he needed to complete the licensure process prior to July 1996, but did not do so.
2. Foreign Applicants for Licensure by Endorsement
¶ 26 Bourgeous finally argues the Department treated him arbitrarily and capriciously *468 because it granted licenses to foreign applicants even though those applicants have TAC/ABET degrees. Under Utah Code Ann. § 58-22-302(4)(d) (Supp.2001), foreign applicants must:
[S]ubmit satisfactory evidence of:
(i) current licensure in good standing in a jurisdiction recognized by rule by the division in collaboration with the board; and
(ii) have successfully passed any examination established by rule by the division in collaboration with the board; and
(iii) full-time employment as a licensed professional engineer ... as a principal for at least five of the last seven years immediately preceding the date of the application.
Under this statute, if an applicant is licensed by another state, and has only a TAC/ABET degree, the Department will still consider the applicant for licensure if he meets the other requirements of the statute. Bourgeous argues he is substantially similar to the foreign applicants, and because foreign applicants with TAC/ABET degrees are awarded licenses, he should also be awarded a license.
¶ 27 Bourgeous's argument is unpersuasive because the foreign applicants with TAC/ABET degrees are substantially different than he. First, the foreign applicants must be licensed in good standing in another state. See id. Second, the foreign applicants must have been a principal professional engineer for five of the last seven years. See id. Therefore, because of these material differences, the Department did not act arbitrarily or capriciously in its treatment of Bourgeous.
CONCLUSION
¶ 28 Bourgeous has no vested right to a professional engineers license based on the Certificate, and the legislature has the right to change licensing requirements at any time to protect the public health and welfare. Therefore, Bourgeous was subject to the licensure requirements of the 1996 Act. Also, the Department complied with the Utah Administrative Procedures Act because its interpretation of the 1996 Act is consistent with a plain reading of the statute. Finally, because Hunter and foreign applicants are not situated similarly to Bourgeous, the Department did not act arbitrarily or capriciously in denying Bourgeous a license.
¶ 29 Affirmed.
¶ 30 WE CONCUR: NORMAN H. JACKSON, Presiding Judge, GREGORY K. ORME, Judge.
NOTES
[1] Because no substantive changes occurred between the passage of the 1996 Act and the current version, we cite the current version.
[2] Bourgeous also argues that he should be treated as a "Professional engineer intern" under the 1996 Act. A "Professional engineer intern" is:
[A] person who has completed the education requirements to become a professional engineer, has passed the fundamentals of engineering examination, and is engaged in obtaining the four years of qualifying experience for licensure under the direct supervision of a licensed professional engineer.
Utah Code Ann. § 58-22-102(10) (1998). Since the issue in this case is whether Bourgeous "completed the education requirements to become a professional engineer," this argument is not relevant. Id.
[3] Bourgeous attempts to distinguish Riggins by saying that Riggins dealt with the revocation of an existing license, in that case a liquor license, and not the nullification of a requirement before licensure. Bourgeous claims the Certificate established a right and that the Department retroactively disturbed that right, which is something the legislature never intended to do. In effect, Bourgeous is arguing that those who do not have licenses deserve more protection than those that have licenses. However, Bourgeous provides no legislative history or textual interpretation which would indicate that Riggins should be so limited, and such a limitation is not logical.
[4] Because we hold that the Department did not misinterpret the 1996 Act, Bourgeous's argument that the Department exceeded its jurisdiction because it misinterpreted the 1996 Act also fails a fortiori.
[5] Bourgeous asserts that the Department cannot claim that Hunter would have timely applied but for his misscored exam because it never made a finding of fact to that effect on the record. However, because the Hunter record is not part of the record in this case, we cannot consider that argument. See Reliable Furniture Co. v. Fidelity & Guar. Ins. Underwriters, 14 Utah 2d 169, 380 P.2d 135, 135 (1963) ("[W]e cannot consider matters not in the record before the trial court.").
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600726/
|
41 P.3d 391 (2002)
2002 OK 5
Michael GORDON, individually and as father and next friend of Joshua Taylor Gordon, Plaintiff-Appellee,
v.
Jodi Lynn GORDON, Defendant-Appellant.
No. 94,678.
Supreme Court of Oklahoma.
January 22, 2002.
Rex K. Travis and Patricia Travis, Oklahoma City, for Plaintiff-Appellee.
Randy D. Witzke and Anastasia S. Pederson, Edmonds, Cole, Hargrave, Givens & Witzke, Oklahoma City, for Defendants-Appellants.
*392 OPINION
WATT, Vice Chief Justice.
¶ 1 On February 11, 1993, Defendant, Jodi Gordon was involved in a multi-car accident in which her son, Joshua, was injured. At the time of the accident Jodi Gordon was driving her Geo Metro, which was insured by Farmers Insurance Company. Jodi Gordon and her husband, Michael Gordon, were the insureds on the policy, as well as on an identical policy on a Volkswagen the Gordons owned. The limit of liability to each person under the Geo policy was $100,000 and $10,000 under the Volkswagen policy. Plaintiff, Michael Gordon, sued Jodi Gordon on behalf of his son, Joshua.
¶ 2 There were two issues before the trial court: (1) whether plaintiff was entitled to the entire $100,000 policy limit under the policy covering the Geo or whether he was limited to only $10,000 because of the provision in the policy excluding members of the insured's household from coverage; and (2) whether plaintiff was entitled to "stack" the $10,000 coverage provided by the Volkswagen policy to the amounts he recovered under the Geo policy. The trial court held in favor of plaintiff on both issues and held that the amount of insurance available under the Geo policy was $100,000 and that the $10,000 liability coverage under the Volkswagen policy was also available.[1]
¶ 3 The Court of Civil Appeals reversed the trial court. The Court of Civil Appeals held that under the teaching of Nation and *393 Hartline, the household exclusion in the Geo policy violated public policy to the extent it deprived plaintiff of the statutorily mandated $10,000 coverage but the household exclusion applied with respect to the balance of the coverage. The Court of Civil Appeals also reversed the trial court's judgment holding that Nation authorized plaintiff's recovery of the $10,000 liability limit under the Volkswagen policy in addition to his recovery under the Geo policy.
¶ 4 Plaintiff sought certiorari on the ground that the Court of Civil Appeals had erroneously held that Nation did not support Plaintiff's contention that he could stack the coverages in the Geo and Volkswagen policies. In her answer to plaintiff's petition for certiorari, defendant conceded that the Court of Civil Appeals had correctly limited plaintiff's recovery under the Geo policy to $10,000 in accordance with the teachings of Nation and Hartline. Thus, the only issue before us is whether plaintiff was entitled to stack the Geo and Volkswagen coverages.
¶ 5 Plaintiff urges us to hold that Nation supports his claim to a right to stack the liability coverages under the Geo and Volkswagen policies. In support of his argument, plaintiff points out that in Nation we allowed the recovery of the statutorily mandated minimum amount, $10,000, from each of the three policies there involved. Defendant resists plaintiffs argument, pointing out first, the right to stack was not an issue in Nation; second, in Nation only four justices unqualifiedly joined in the majority opinion; and finally, one of the three insurance policies at issue in Nation was owned by a third party.
¶ 6 Whether multiple liability coverages may be stacked under Oklahoma law presents a matter of first impression. For the reasons discussed below, we hold that Nation does not stand for the proposition that liability coverages in automobile liability insurance policies may be stacked.
DISCUSSION
¶ 7 As noted above, we did not consider the issue of whether stacking of liability coverages is allowable under Oklahoma law in Nation. Further, there is no indication in either the majority opinion in Nation, nor in any of its several concurring and dissenting opinions, that there was anything in the policies there involved that would prohibit the stacking of coverages we allowed there. Here, however, both the Geo and the Volkswagen policies contain identical provisions, which we hold expressly prohibit stacking of liability coverages. Because of the significant differences between the facts and the nature of the analysis in Nation and the analysis that is required here, we limit Nation to its facts insofar as its holding that $10,000 from each of the three policies there involved should be paid to the plaintiff.
¶ 8 The "Exclusions" section of the Gordons' policies provides in material part as follows:
We will pay no more than the maximum limits provided by this policy regardless of the number of vehicles insured, insured persons, claims. Claimants. Policies. or vehicles involved in the occurrence.
[Emphasis as in the original.] Such provisions are often called "limits of liability" clauses. The "Other insurance" section of the policies states:
If any applicable insurance other than this policy is issued to you by us or any other member company of the Farmers Insurance Group of Companies. The total amount payable among all such policies shall not exceed the limits provided by the single policy with the highest limits of liability.
¶ 9 The courts that have construed provisions prohibiting stacking of liability coverages, such as those in the policies at issue here, have overwhelmingly held that such provisions "are not unconscionable and may properly be enforced." Further, the result is not changed where multiple vehicles are covered in a single policy. 12 Couch on Ins. (3d Ed.) § 169:109. Opinions from the United States Courts of Appeals for the Fourth and Fifth circuits, as well as opinions from at least nineteen state appellate courts, which will be discussed below, all have refused to allow liability coverages to be stacked.
¶ 10 The Supreme Court of North Dakota succinctly and accurately summarized the *394 state of the law in Houser v. Gilbert, 389 N.W.2d 626, 629 (N.D.1986). Quoting with approval from Oarr v. Government Employees Insurance Company, 39 Md.App. 122, 383 A.2d 1112, 1117 (1978), the North Dakota court said:
When considering liability coverage "the courts, with near uniformity, have held the first party coverage cases [on medical payment and uninsured motorist coverages] to be inapplicable and have found the policy to be unambiguous and to preclude `stacking.'"
[Bracketed material as in the original.]
¶ 11 As may be inferred from the quote from the North Dakota Supreme Court's Houser opinion, whether medical payment coverages may be stacked has been considerably more controversial than whether liability coverages may be stacked. Nevertheless, this Court refused to allow the stacking of medical payment coverages in Frank v. Allstate Insurance Company, 1986 OK 42, 727 P.2d 577 because a "limit of liability" provision in the policy there at issue, similar to those in the Gordons' policies here, limited the amount recoverable to the amount stated in the policy, regardless of the number of insured automobiles. In Frank, we enforced the policy provision as written for two reasons. First, "the policy terms in question clearly and unambiguously preclude the stacking of medical payment coverage." [Emphasis as in the original.] Frank, 1986 OK 42 at ¶ 5, 727 P.2d 577. Second,
There exist no statutory or other public-policy requirements which would provide a basis for either invalidating or modifying the medical payment provisions of the insurance policy here in contest. The matter must simply rest on contract between the insurer and its insured.
[Emphasis as in the original.] Frank, 1986 OK 42 at ¶ 6, 727 P.2d 577.
¶ 12 As noted by both the Frank majority and its several dissenting opinions, there are serious public policy arguments to be made in favor of refusing to enforce "other insurance" clauses where medical pay coverages are concerned. Other courts have so held. Those courts that have held medical pay coverages may be stacked have observed that such coverages are first party coverages, for the direct benefit of the insured, as are uninsured motorists coverages. Nevertheless, this Court rejected those arguments and concluded that clear and unambiguous policy language should be enforced, even in the area of medical payment coverages. Here, we hold, as have virtually all courts that have considered the issue, that there is no public policy basis for refusing to enforce clear and unambiguous terms of automobile liability insurance policies that serve to prohibit stacking of liability coverages. Liability coverages are for the ultimate benefit of third parties, so the arguments that have been made, often successfully, in uninsured motorist cases and, in other states, in medical pay cases simply do not apply in cases involving liability coverage. Thus, plaintiff is not entitled to have the liability coverages of the Gordons' Geo and Volkswagen policies stacked.
¶ 13 A variety of theories supporting the proposition that liability coverages should be stacked has been advanced in the many opinions from around the country that have addressed the issue. Among those arguments were that the anti-stacking provisions violated public policy, that stacking should be allowed because a separate premium was paid for each car,[2] or because the coverages were provided by separate policies instead of one policy covering several vehicles. These arguments have been uniformly rejected by the courts that have considered them.[3]
*395 CONCLUSION
¶ 14 Nation does not support plaintiff's claim that the liability coverages here involved should be stacked. That issue was not addressed by the Court in Nation. Further, we considered a "limit of liability" provision in Frank that was similar to the policy language at issue here and held that stacking of medical pay coverages was prohibited by that language. Finally, the courts from other jurisdictions that have addressed the propriety of giving effect to "limit of liability" and "other insurance" clauses to prohibit stacking have overwhelmingly held such clauses are valid and that stacking will not be allowed. We hold, therefore, that plaintiff cannot stack the liability coverage in the Gordon's Volkswagen policy to the coverage in the Geo policy. The trial court's judgment is reversed and the matter is remanded with instructions to conduct further proceedings in accordance with this opinion.
CERTIORARI PREVIOUSLY GRANTED, COURT OF CIVIL APPEALS' OPINION VACATED, AND MATTER REVERSED AND REMANDED WITH INSTRUCTIONS.
LAVENDER, OPALA, KAUGER, SUMMERS, BOUDREAU, and WINCHESTER, JJ., concur.
HODGES, J., concurs in part, dissents in part.
HARGRAVE, C.J., disqualifies.
NOTES
[1] Although the "Household Exclusion" would, by its terms deprive plaintiff of any right to recovery at all, we decided in Nation v. State Farm Ins. Co., 1994 OK 54, 880 P.2d 877, that Oklahoma's Compulsory Liability Insurance Act, 47 O.S.2001 §§ 7-600-7-607, Incl., requires the payment of the statutory minimum, $10,000, despite the policy's ostensible exclusion of family members from any coverage. We recently refined our jurisprudence on this issue in Hartline v. Hartline, 2001 OK 15, 39 P.3d 765 by holding that household exclusion clauses would be valid if, but only if, they expressly provided for the payment to an injured family member the statutorily mandated minimum (currently $10,000); but we held household exclusion clauses would be invalid if they purported to deny all coverage to a resident family member. We made our holding in Hartline prospective, however, "in order to afford insurers ample notice and opportunity" to appropriately amend their policy forms.
[2] Note that in Frank we rejected the argument that stacking should be allowed because separate premiums had been paid because each "premium was for an additional and separate risk of loss which did not occur." [Emphasis as in the original.] Frank, 1986 OK 42 at ¶ 5, 727 P.2d 577.
[3] See, for example, Emick v. Dairyland Insurance Company, 519 F.2d 1317 (4th Cir.1975); Greer v. Associated Indemnity Corp., 371 F.2d 29 (5th Cir.1967); Noll v. Shelter Insurance Companies, 774 S.W.2d 147 (Mo.1989); Bishop v. Washington, 331 Pa.Super. 387, 480 A.2d 1088 (1984); Agnew v. American Family Mutual Insurance Company, 150 Wis. 2d 341, 441 N.W.2d 222 (1989); Ruppe v. Auto-Owners Insurance Company, 329 S.C. 402, 496 S.E.2d 631 (1998); Hilden v. Iowa National Mutual Insurance Company, 365 N.W.2d 765 (Minn.1985); Rando v. California State Automobile Association, 100 Nev. 310, 684 P.2d 501 (1984); Butler v. Robinette, 614 S.W.2d 944 (Ky.1981); Houser v. Gilbert, 389 N.W.2d 626, 629 (N.D.1986); Payne v. Weston, 195 W.Va. 502, 466 S.E.2d 161 (1995); Allstate Insurance Company v. Zellars, 462 S.W.2d 550 (Tex.1970); Pacific Indemnity Company v. Thompson, 56 Wash.2d 715, 355 P.2d 12 (1960); Maine v. Hyde, 350 So. 2d 1161 (Fla.App.1977); American Standard Insurance Company of Wisconsin v. Ekeroth, 791 P.2d 1220 (Colo.App. 1990); Auto Club Insurance Association v. Lanyon, 142 Mich.App. 108, 369 N.W.2d 269 (1985); Georgia Farm Bureau Mutual Insurance Company v. Shook, 215 Ga.App. 66, 449 S.E.2d 658 (1994); Williams v. Louisiana Farm Bureau Mutual Insurance Company, 445 So. 2d 211 (La. App.1984); Basso v. Allstate Insurance Company, 19 Ariz.App. 58, 504 P.2d 1281 (1973); Oarr v. Government Employees Insurance Co., 39 Md. App. 122, 383 A.2d 1112 (1978).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2982295/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0243n.06
Case No. 13-1856 FILED
Mar 31, 2014
DEBORAH S. HUNT, Clerk
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
JOHN WILSON, ) MICHIGAN
)
Defendant-Appellant. )
)
)
BEFORE: KEITH, SILER, and ROGERS, Circuit Judges.
SILER, Circuit Judge. Defendant John Wilson appeals his sentence, arguing that the
district court erred in assessing a two-level vulnerable victim enhancement and a four-level
aggravating role enhancement. We AFFIRM.
BACKGROUND
From 2000 to 2010, Wilson defrauded incarcerated individuals and their families by
selling them legal services under the false representation that he was an attorney, despite never
having attended law school. He performed legal research and drafted legal documents and filed
them either under actual attorneys’ names with forged signatures or “pro se” on behalf of the
inmates. He employed at least a dozen individuals in furtherance of the scheme and advertised
Case No. 13-1856, United States v. Wilson
his services through direct mailings to inmates, whose names he obtained from accessing various
state government websites.
In 2003, the State Bar of Michigan obtained a permanent injunction prohibiting Wilson
from providing legal advice or services, from acting as a representative or intermediary in legal
matters, and from holding himself out as an attorney authorized to practice law. However, he
continued soliciting inmates and misrepresenting the nature of his business. Throughout the
scheme, he failed to file federal income tax returns and received approximately $2.6 million from
the inmates and their families. In total, the fraudulent scheme victimized more than 2,100
individuals. Wilson eventually pleaded guilty to two counts of mail fraud and one count of
failure to file a federal income tax return.
At sentencing, the district court overruled Wilson’s objection to assessing a two-level
vulnerable victim enhancement. The court also overruled Wilson’s objection to assessing a four-
level aggravating role enhancement for his role as an organizer or leader of a criminal activity
that involved five or more participants or that was otherwise extensive, finding a total of nine
knowing and unknowing participants in the conspiracy, plus Wilson. The court assessed two
additional levels pursuant to USSG § 3A1.1(b)(2) for the large number of vulnerable victims, as
well as two levels pursuant to USSG § 2B1.1(b)(9)(C) because Wilson continued to commit the
offense in violation of the injunction. It sentenced him to concurrent imprisonment terms of 240
months for the mail fraud counts and 12 months for failure to file an income tax return.
-2-
Case No. 13-1856, United States v. Wilson
DISCUSSION
I. Vulnerable Victim Enhancement
Wilson argues that the district court erred in finding that the incarcerated individuals and
their families qualified as vulnerable victims because they did not have particular characteristics
that rendered them likely prey to his fraudulent scheme.
“We review a district court’s findings regarding the vulnerability of a victim for clear
error.” United States v. Brawner, 173 F.3d 966, 972 (6th Cir. 1999). Under the vulnerable victim
enhancement, a defendant’s base offense level for determining his Guidelines range is increased
two levels “[i]f the defendant knew or should have known that a victim of the offense was a
vulnerable victim.” USSG § 3A1.1(b)(1). A vulnerable victim is a victim of the offense of
conviction “who is unusually vulnerable due to age, physical or mental condition, or who is
otherwise particularly susceptible to the criminal conduct.” USSG § 3A1.1 cmt. n. 2.
Victims are “otherwise particularly susceptible to the criminal conduct” within the
meaning of the Guidelines where they are “predisposed to the very scam” used to defraud them.
Brawner, 173 F.3d at 973. Evidence of initial targeting followed by a “reloading” process may
be used to indicate their susceptibility. Id. For example, in Brawner, the defendant bought a
“leads list,” which identified persons willing to send in money in the hope of winning a valuable
prize. Id. Then, through a reloading process, the defendant repeatedly contacted persons who had
already succumbed to the scheme. Id. We held that the victims’ susceptibility was “clearly
covered” by § 3A1.1(b)(1) and was evinced by the defendant’s “refined [and] verified ‘sucker’s’
list.” Id.
The district court found that Wilson’s incarcerated victims were particularly susceptible
to his criminal conduct because of their limited education, cognitive abilities, and ability to
-3-
Case No. 13-1856, United States v. Wilson
understand the legal technicalities of their case, and because of their limited communication with
and isolation from the outside world due to their incarceration. It also found that the families
were vulnerable victims because of their desperation, lack of recourse and information, and
unsophistication. The court found, and Wilson admitted, that Wilson sought out certain classes of
incarcerated persons, including those of Hispanic heritage, because he believed they were more
apt to pay for his services. The court concluded that Wilson devised the scheme specifically to
prey upon these perceived vulnerabilities. Also, as in Brawner, Wilson used a reloading process
in the form of a list of old paying clients to identify clients who were thus more likely to pay for
new services.
Therefore, Wilson’s initial targeting procedures, followed by his use of a reloading
process, demonstrate that Wilson targeted individuals he knew to be particularly susceptible to
his criminal conduct. Brawner, 173 F.3d at 973. The district court did not clearly err in finding
that Wilson’s victims were vulnerable.
II. Aggravating Role Enhancement
Wilson argues that the district court erred in finding that his criminal activity involved
five or more participants or, alternatively, that the court erred in finding that his criminal activity
was otherwise extensive. Wilson conceded that he was a leader because he accepted a two-level
enhancement for his leadership role. Therefore, whether a four-level enhancement was justified
depends on whether the offense involved five or more participants or was otherwise extensive.
We review a district court’s findings of fact for clear error. United States v. Washington,
715 F.3d 975, 982 (6th Cir. 2013). Usually, we review its legal conclusions de novo; however,
we review the legal conclusion that a person is an organizer or leader for the aggravating role
enhancement under a deferential standard of review. Id. at 982–83.
-4-
Case No. 13-1856, United States v. Wilson
Pursuant to the aggravating role enhancement, a defendant’s base offense level for
determining his Guidelines range is increased four levels “[i]f the defendant was an organizer or
leader of a criminal activity that involved five or more participants or was otherwise extensive.”
USSG § 3B1.1(a). “The two tests are equivalent, meaning that an upward departure is not
appropriate under the ‘otherwise extensive’ test unless the offense in question was somehow the
functional equivalent of a crime involving five or more participants.” United States v. Anthony,
280 F.3d 694, 699 (6th Cir. 2002).
First, in determining the number of participants for the five or more participants test,
those who are criminally responsible for the commission of the offense are counted, even if they
were not convicted. USSG § 3B1.1 cmt. n.1. Further, persons who were aware of the criminal
objective and knowingly offered assistance qualify as participants. Anthony, 280 F.3d at 698.
Wilson agreed at sentencing that he and his employee Lari Zeka were participants and, on
appeal, he concedes that James Roberts, the attorney who agreed to provide a gloss of legal
representation to Wilson’s scheme, was also a participant. The district court found that Ashley
Fournier and Reynaldo Rodriguez were participants and explicitly noted that they would be
chargeable as aiders and abettors. Fournier conducted boilerplate legal research without any legal
training, which she knew was sold to the victims. Fournier further admitted she had reason to
believe Wilson was running a scheme, she knew Wilson was not an attorney but that he was
holding himself out as one, and she did not believe the research was helpful. She also stated that
one of the reasons she resigned was because she knew Wilson was not running a legitimate
business. Rodriguez had likewise been suspicious that Wilson was perpetrating fraudulent
activities and had acted as a bodyguard to protect Wilson from those he had defrauded.
-5-
Case No. 13-1856, United States v. Wilson
Therefore, there was ample evidence that Fournier and Rodriguez were both aware that
they were involved in a fraudulent scheme when working for Wilson and that they knowingly
offered their assistance to Wilson in perpetrating the fraud, thus qualifying them as participants.
Because Wilson admits that there were three participants and because the evidence indicates that
there were at least two more participants, the district court did not err in finding that Wilson was
an organizer or leader of a criminal activity that involved five or more participants pursuant to
§3B1.1(a). Washington, 715 F.3d at 983.
Second, although the district court also found the criminal activity was otherwise
extensive pursuant to § 3B1.1(a), it is unnecessary for us to decide that issue, as we have
affirmed on the alternative theory of finding five knowing participants.
AFFIRMED.
-6-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2084884/
|
91 N.Y.2d 336 (1998)
693 N.E.2d 740
670 N.Y.S.2d 393
Hernando Uribe et al., Appellants,
v.
Merchants Bank of New York, Respondent.
Court of Appeals of the State of New York.
Argued February 19, 1998
Decided March 31, 1998.
Tolmage, Peskin, Harris & Falick, New York City (Alexander J. Wulwick of counsel), for H. Uribe, Inc., appellant.
Simon, Meyrowitz & Meyrowitz, L. L. P., New York City (Mitchell B. Shenkman of counsel), for respondent.
Chief Judge KAYE and Judges TITONE, SMITH, LEVINE, CIPARICK and WESLEY concur.
*337BELLACOSA, J.
This case is about the effort of appellant H. Uribe, Inc. to recover *338 for an alleged theft from its safe-deposit box rented from defendant Merchants Bank of New York. Cash, gems and other items, worth approximately $2,000,000, were allegedly missing or stolen.
The issue on appeal is whether the term "valuable papers," among the items specified in the rental agreement as allowed for storage in the box, may be interpreted to include currency or cash. We conclude that "valuable papers" in this juridical context and contest is unambiguous as used in this rental agreement, is sufficiently specific and exclusive in its usage, and was not intended to encompass legal tender. Thus, the defendant bank is not liable for the allegedly missing currency.
I.
Defendant Merchants Bank's standard safe-deposit box rental agreement provides in pertinent part:
"The safe is leased solely for the purpose of keeping securities, jewelry, valuable papers, and precious metals only, and the Renters agree not to use the said safe for any other purpose" (emphasis supplied).
Paragraphs (7) and (12) of the bank's Safe Deposit Department Rules and Regulations also contain language limiting the bank's potential liability:
"It is expressly agreed that this Lease is not to be construed to establish any relation of bailor and bailee between Renters and Bank, and that Bank has no knowledge of and exercises no supervision over the deposit of property, examination or removal of any property at any time contained in the Safe. Renters assume all risks arising out of the deposit of property or securities in the Safe. Renters expressly waive every presumption of law that loss shall have occurred through Bank's negligence, and agree that Bank shall not be liable for any loss sustained by Renters unless the loss was caused by some specific, clearly proven and willful act of Bank. Bank shall not be liable for any act or omission of persons not employed by it" (emphasis supplied).
In December 1990, Hernando Uribe, a wholesale gem dealer, leased a box at the Manhattan West 47th Street branch of Merchants Bank of New York. One year later, title to the box *339 was transferred to his corporate entity, plaintiff-appellant, H. Uribe, Inc.
In a transaction on November 30, 1992 at Merchants Bank, Hernando Uribe sold 15 emeralds of 78 carats weight to a Korean purchaser. Uribe had allegedly received the emeralds on consignment from a Colombian gem dealer. Uribe claims that he placed the entire cash proceeds of the sale in the safe-deposit box, expecting to remit the money to the consignor of the merchandise when the latter returned to New York a few days later.
On December 4, 1992, the cash, gems and other property were reportedly stolen from the safe-deposit box. Uribe originally sued in his individual and corporate capacity, but only H. Uribe, Inc. is now involved on this appeal. The prayer for relief seeks damages specifically for an unrecovered $170,270 in cash, which was part of the $555,000 allegedly stored in the box. Merchants Bank moved for partial summary judgment to dismiss the claim insofar as it was directed against the bank for recovery of the missing cash. Supreme Court granted partial summary judgment, dismissing the missing currency claim.
The Appellate Division affirmed (239 AD2d 128). It concluded that "the clear qualifying language of the safe deposit box rental agreement, which expressly limited authorized items for deposit `only' and `solely' to those listed, was unambiguous and unequivocally excluded currency as an authorized item for deposit" (id., at 129). The Presiding Justice dissented in part on the ground that the average depositor would not "appreciate * * * the crucial distinction between valuable paper and valuable papers" and could believe that "currency, undoubtedly a type of valuable paper, was expressly permitted" (id., at 130). The dissent further urged that "the provision upon which the bank presently relies expresses no limitation of liability whatsoever" (id., at 131).
II.
Appellant concedes that "at first blush `valuable papers' might be thought of as referring only to various kinds of legal or business documents." It nonetheless suggests that "valuable papers" is an ambiguous term that may be read to include the singular usage "paper." It urges, therefore, that the phrase would connote and import its own recognized intrinsic value, like currency and cash. That would, however, constitute a semiotic and substantive transformation.
*340In usual parlance and understanding, the term "valuable papers" is customarily limited to various kinds of legal or business documents (see, Goncalves v Regent Intl. Hotels, 58 N.Y.2d 206, 217, n 2 [quoting Bouvier's Law Dictionary 1080 (Baldwin's Students ed 1940) (defining "safe" as "receptacle * * * for containing money, valuable papers, or the like")]; Flores v Mosler Safe Co., 7 N.Y.2d 276, 279; Matter of Robinson, 257 App Div 405, 407; cf., Matter of Swade, 65 App Div 592, 596; Black's Law Dictionary 1551 [6th ed 1990]; compare, Banking Law § 234 [9] [authorizing savings banks to "rent() safe deposit boxes in which to keep personal property and papers of any kind"]; General Business Law § 200 [permitting deposit of "money, jewels, ornaments, bank notes, bonds, negotiable securities or precious stones" in hotel, motel, inn or steamboat safes or safe-deposit boxes] [emphasis added]; General Construction Law § 39 [personal property includes "chattels, money, things in action, and all written instruments themselves"] [emphasis added]).
Traditional rules of construction further enlighten our analysis and prompt our conclusion. In the rental agreement at issue, "valuable papers" is included among a list of depositable items, exclusively specified as "jewelry," "securities" and "precious metals."
The principle of ejusdem generis (of the same kind) instructs that "valuable papers" in this context should be given a limited interpretation (see, Matter of Riefberg, 58 N.Y.2d 134, 141-142; see also, McKinney's Cons Laws of NY, Book 1, Statutes § 239 [b]). A narrow sweep is emphasized by two adverbs, "solely" and "only," used within the same sentence.
Thus, we are not persuaded by appellant Uribe's argument that paper money and stacked bills, because they are not expressly excluded, may be treated as included within the term of art "valuable papers" (see, McKinney's Cons Laws of NY, Book 1, Statutes § 240; see also, Two Guys from Harrison-N. Y. v S.F.R. Realty Assocs., 63 N.Y.2d 396, 404). That notion is further dispelled by another canon of interpretive construction: inclusio unius est exclusio alterius (the inclusion of one is the exclusion of another). This maxim more readily comports with our view that the omission of "cash," "currency," "legal tender" or "paper money," in the context of the surrounding precisely limited and specific language and exclusive listings, is intentional and unambiguous. Therefore, the term "valuable papers" should not be enlarged and transformed by the courts to allow the deposit of cash, a specific authorization the box *341 rental agreement failed to specify. The definition this commercial dealer now proposes rests on an impermissibly "strain[ed reading] to find an ambiguity which otherwise might not be thought to exist" (Loblaw, Inc. v Employers' Liab. Assur. Corp., 57 N.Y.2d 872, 877).
III.
It is universally understood and accepted that a bank is authorized to rent safe-deposit boxes "upon such terms and conditions as may be prescribed" (Banking Law § 96 [3] [b]; see, Gaita v Windsor Bank, 251 N.Y. 152; Radelman v Manufacturers Hanover Trust Co., 61 Misc. 2d 669; Goldbaum v Bank Leumi Trust Co., 543 F Supp 434 [SD NY]). To be sure, the commercial terms may not be unconscionable or violative of a supervening public policy (see, Lombardo v Manufacturers & Traders Trust Co., 120 AD2d 941, 942; Goldbaum v Bank Leumi Trust Co., 543 F Supp 434, supra). None of that is involved or claimed to be at issue in this case.
Next, an exculpatory provision ordinarily will be enforced when its language "expresses in unequivocal terms the intention of the parties to relieve a defendant of liability for the defendant's negligence" (Lago v Krollage, 78 N.Y.2d 95, 100; see, Seaboard Sur. Co. v Gillette Co., 64 N.Y.2d 304, 311). Although "ambiguities * * * are * * * to be construed against the [drafter], particularly when found in an exclusionary clause" (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 N.Y.2d 390, 398), it is well established that "when the meaning of [a] * * * contract is plain and clear * * * [it is] entitled to [be] enforced according to its terms * * * [and] not to be subverted by straining to find an ambiguity which otherwise might not be thought to exist" (Loblaw, Inc. v Employers' Liab. Assur. Corp., 57 N.Y.2d 872, 877, supra).
This Court has held that "`reasonable expectation and purpose of the ordinary business [person] when making an ordinary business contract'" serve as the guideposts to determine intent (Album Realty Corp. v American Home Assur. Co., 80 N.Y.2d 1008, 1010 [quoting Bird v St. Paul Fire & Mar. Ins. Co., 224 N.Y. 47, 51]). Thus, the "tests to be applied * * * are common speech * * * and the reasonable expectation and purpose of the ordinary business [person]," in the factual context in which terms of art and understanding are used, often also keyed to the level of business sophistication and acumen of the particular parties (Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., supra, 60 NY2d, at 398; see, Michaels v City of Buffalo, 85 N.Y.2d 754, 757; *342 Miller v Continental Ins. Co., 40 N.Y.2d 675, 676).
IV.
Plaintiff-appellant H. Uribe, Inc. would supplant these formidable propositions for this case by suggesting that it is not unusual for gem merchants to hold large sums of cash in safe-deposit boxes for short periods of time. Even assuming that is so, this claimed custom of the gem trade should not be imputed to the average merchant and should not supersede the more generally applicable rules for deciding this case.
We conclude that the average commercial dealer would more likely and ordinarily secure cash by deposit in accounts, not by stacking the cache in a safe-deposit box. Uribe's theory, in any event, should not be allowed to trump the more usual general practices and expectations of those who trade in the market-place and use commercial storage mechanisms. The defendant bank should not have to stand, therefore, for the currency loss since legal tender (a term of art, among other synonyms, to aptly describe the lost commodity and its unique value) was not a specified item for authorized storage in the box, within the "valuable papers" term (another distinct term of art), as it is used in the lease.
Because interpretive language "should not compel resort to a magnifying glass and lexicon" (Gross v Sweet, 49 N.Y.2d 102, 107) to discern its legal import and consequences, we are satisfied to apply the more usual, plain and common meaning of the key term in the rental lease. In sum, therefore, we agree that the Appellate Division properly concluded that the safe-deposit box rental agreement, used and controverted in this case, excludes cash, currency or legal tender and provides the bank with a cognizable rejection of Uribe's claim for loss of that kind of contents from the safe-deposit box.
Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.
Order affirmed, etc.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1902558/
|
120 B.R. 163 (1990)
In re Herbert SHOTWELL, Debtor.
Bankruptcy No. 389-35115-H13.
United States Bankruptcy Court, D. Oregon.
October 22, 1990.
Magar E. Magar, Portland, Or., for debtor.
Karen E. Stratton, Sp. Asst. U.S. Atty., D. Or., for creditor.
Robert W. Myers, Portland, Or., trustee.
*164 OPINION
HENRY L. HESS, Jr., Chief Judge.
This matter came before the court upon the debtor's objection to claim # 1 of the Internal Revenue Service ("IRS"). The debtor is represented by Magar E. Magar of Portland, Oregon and the IRS is represented by Karen E. Stratton, Special Assistant U.S. Attorney for the District of Oregon.
Findings of Fact
The following facts do not appear to be disputed. This case was filed on 11-3-89. The IRS filed a claim for $67,767.62 representing the debtor's 1979-87 income tax liabilities. $21,533.38 of the claim of IRS is filed as an unsecured, priority claim for tax years 1982-87.
The debtor objected to the classification of the priority claim on the ground that the taxes in question were for years where the return was due more than 3 years before the case was filed and assessed more than 240 days before the case was filed.
The returns in question were all due more than 3 years before the case was filed. The returns were all filed in February, 1989, which is more than 240 days before the case was filed. The IRS's "summary record," however, was signed by the IRS assessment officer in April, 1989 for tax years 1984-87 and July, 1989 for 1982 and 1983. Both dates (April, 1989 and July, 1989) fall within 240 days of the date the case was filed.
Issue
When is a tax "assessed" as that term is used in Section 507(a)(7)(A)(ii)?
Conclusions of Law
The court is persuaded by the reasoning in In re Hartman, 110 B.R. 951 (D.Kan. 1990) and adopts that reasoning. Thus, the term "assess" has the same meaning in the Bankruptcy Code as it does in the Internal Revenue Code and regulations.
Internal Revenue Code Regulation 301.6203-1 provides that: "The date of the assessment is the date the summary record is signed by an assessment officer." Since the summary record was signed within 240 days of filing, the 1982-87 taxes were assessed within 240 days of filing and are entitled to priority, to the extent they are unsecured.
Result
The debtor's objection is overruled. The IRS is directed to prepare a proposed order allowing its claim in accordance with this opinion and submit it to the court and opposing counsel. If counsel does not object within 10 days, the court will enter the order.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/4106751/
|
OSCN Found Document:IN THE MATTER OF APPLICATION OF THE OKLA. TURNPIKE AUTHORITY
OSCN navigation
Home
Courts
Court Dockets
Legal Research
Calendar
Help
Previous Case
Top Of Index
This Point in Index
Citationize
Next Case
Print Only
IN THE MATTER OF APPLICATION OF THE OKLA. TURNPIKE AUTHORITY2016 OK 124Case Number: 115345Decided: 12/13/2016THE SUPREME COURT OF THE STATE OF OKLAHOMA
Cite as: 2016 OK 124, __ P.3d __
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.
IN THE MATTER OF THE APPLICATION OF THE OKLAHOMA TURNPIKE AUTHORITY FOR APPROVAL OF NOT TO EXCEED $480,000,000 OKLAHOMA TURNPIKE SYSTEM SECOND SENIOR LIEN REVENUE BONDS, SERIES 2016
ORIGINAL PROCEEDING TO DETERMINE VALIDITY OF
PROPOSED STATE REVENUE BONDS
¶0 The Oklahoma Turnpike Authority (Authority) seeks to issue revenue bonds for use in the construction of certain turnpike projects. Pursuant to 69 O.S.2011, § 1718, the Authority filed an application in this Court seeking approval of the proposed bonds. The Protestant, Jerry R. Fent, challenges the validity of the requested bonds. We accepted original jurisdiction to determine the issue of the bonds' validity.
APPLICATION FOR APPROVAL OF THE ISSUANCE OF OKLAHOMA TURNPIKE
SYSTEM SECOND SENIOR LINE REVENUE BONDS, SERIES 2016, IN AN
AMOUNT NOT TO EXCEED $480,000,000.00 IS GRANTED.
Gary M. Bush, Jered T. Davidson, The Public Finance Law Group PLLC, Oklahoma City, Oklahoma, for applicant.
Jerry R. Fent, Oklahoma City, Oklahoma, Pro Se Respondent.
WINCHESTER, J.
¶1 The Oklahoma Turnpike Authority (the "Authority"), pursuant to 69 O.S.2011, § 1718, applies to this Court for approval of an issuance of bonds captioned "Oklahoma Turnpike Authority Oklahoma Turnpike System Second Senior Lien Revenue Bonds, Series 2016" (the "Series 2016 bonds") in an amount not to exceed $480,000,000. The Authority has requested the funds in order to: (1) finance a portion of the capital costs of certain turnpike projects and improvements known as the "Driving Forward Projects," (2) refund the outstanding principal amount of the Authority's Oklahoma Turnpike System Refunding Second Senior Lien Revenue Bonds, Series 2007A dated June 6, 2007, issued in the original principal amount of $45,680,000 (the "Refunding"); (3) satisfy the Reserve Account requirements; and (4) pay the costs related to the issuance of the Bonds.
¶2 This Court is vested with exclusive, statutory original jurisdiction to hear and determine applications for bond approval from the Authority. 69 O.S.2011, § 1718.1 The Authority provided the requisite notice of its application and Jerry R. Fent (the "Protestant"), filed his objection to the application and was given an opportunity to be heard.2 We assumed original jurisdiction to resolve the matter.
BACKGROUND
¶3 The Authority has issued bonds for the operation and construction of the state's turnpike projects since 1950. This Court has previously approved bonds requested by the Authority on ten separate occasions, having never disallowed a bond issuance in each of those cases.3
¶4 In 1987, the Legislature authorized three new projects (the "1987 Projects") to include construction of the OKC Outer Loop, South Tulsa Bypass, and a new turnpike between State Highway 33 and U.S. 69, codified at 69 O.S. § 1705 (e)(20)-(22). The Legislature also approved the statute in question, 69 O.S.2011, § 1705 (f), which provides that the Authority is empowered to issue turnpike revenue bonds, payable solely from revenues, for the "purpose of paying all or any part of the cost of any one or more turnpike projects." The statute further provides that "any bonds issued for the construction of the proposed turnpike referred to in subparagraphs (10), (20), (21) and (22) of paragraph (e) of this section shall be issued as one issue for all four of the proposed turnpikes and shall be financed, constructed and operated under one bond indenture."4 69 O.S.2011, § 1705 (f).
¶5 In 1989, the Authority sought validation of its bonds to construct the 1987 Projects and to refund prior bonds (the "1989 Bonds"). Under this application, the Authority sought to consolidate all previously constructed projects under one master Trust Agreement to operate as one turnpike system. The Court approved the bonds in In re Application of Oklahoma Turnpike Authority, 1989 OK 21, ¶ 22, 770 P.2d 16.
¶6 On October 29, 2015, the "Driving Forward" initiative was announced by Governor Mary Fallin. According to the Authority, the initiative consists of six major projects to provide for "safe travel, relieving congestion to shorten commutes, and sustaining economic development for years to come." The Authority states that two of the Driving Forward projects relate to additional construction of the OKC Outer Loop, which was validated by the Court in 1989. In re Application of Oklahoma Turnpike Authority, 1989 OK 21, ¶ 22, 770 P.2d 16. As a result of this initiative, the Authority submitted the current application for approval of the bonds.
DISCUSSION
¶7 The Protestant raises the issue of the constitutionality of the financing plan to fund the turnpike projects in question. The Protestant maintains that the statute in question, 69 O.S.2011, § 1705 (f), provides funding for four separate turnpikes under one bond issue and that this constitutes logrolling in violation of Okla. Const., Art. 5, § 57. The Protestant further argues that the Authority's refunding statute, 60 O.S.2011, § 1719, is unconstitutional as the debts created by the statute exceed twenty-one years in violation of Okla. Const., Art. 2, § 32.
A. LOGROLLING
¶8 The Protestant urges that because there are four turnpike construction projects being "financed, constructed and operated with one bond indenture" that this constitutes logrolling in violation of the Oklahoma Constitution's single subject rule, Okla. Const., Art. 5, § 57.5 The Protestant contends that the smaller turnpikes need the larger turnpikes to pay them off through refunding and that this equates to logrolling.
¶9 The Protestant cites Fent v. State ex rel. Oklahoma Capitol Improvement Authority, 2009 OK 15, 214 P.3d 799 for support of his claim of logrolling. In Fent, the Court found the challenged bill unconstitutional because it tied financing for three separate and unrelated projects to one bond. In addressing the bond's validity, the Court stated that the single subject rule should be interpreted using a "germaneness" test. Fent, supra, at ¶ 16. If the "provisions are germane, relative, and cognate to a readily apparent common theme and purpose, the provisions" will not be found to violate the single subject rule. Id.
¶10 We find the instant matter distinguishable as the projects to be funded are not unrelated and, in fact, all concern the construction or maintenance of turnpikes. Each turnpike's stated purpose is to "facilitate vehicular traffic throughout the State." 69 O.S.2011, § 1701. Further, funding multiple projects under one bond issue is not new. The Legislature has specifically authorized the Authority to consolidate projects for funding:
The Authority may provide by resolution, at one time or from time to time, for the issuance of turnpike revenue bonds of the Authority for the purpose of paying all or any part of the cost of any one or more turnpike projects. The Authority, when it finds that it would be economical and beneficial to do so, may combine two or more, or any part thereof, or all of its proposed projects into one unit and consider the same as one project to the same extent and with like effect as if the same were a single project.
69 O.S.2011, § 1709(A).
¶11 In Application of Oklahoma Turnpike Authority, 1966 OK 139, 416 P.2d 860, the Authority sought to approve construction projects for multiple turnpikes and a refunding of certain bonds under one single bond. The Court concluded that the Authority may combine and operate the named turnpikes in question as a single project. Application of Oklahoma Turnpike Authority, 1966 OK 139, ¶ 81, 416 P.2d 860. Likewise, in Application of Oklahoma Turnpike Authority, 1961 OK 15, 359 P.2d 680, the Court approved the combining of the Southwestern (H.E. Bailey) Turnpike Project and Eastern Turnpike Project for financing purposes into one unit under a single sinking fund for all the bonds.
¶12 Here, the Authority has the express legislative authority to issue bonds for turnpike projects. 69 O.S.2011, § 1701. The Authority is also authorized to combine multiple projects for purposing of issuing bonds. 69 O.S.2011, § 1709(A). Because the requested bonds all relate to the construction and/or improvement of turnpikes, we find the Authority's application does not violate the single subject rule.
B. RULE AGAINST PERPETUITIES
¶13 The Authority's request for approval of the bonds from the Council of Bond Oversight reflects a stated, expected maturity date of January 1, 2046. The Protestant urges that this maturity date violates the rule against perpetuities, Okla. Const., Art. 2, § 32. Section 32 provides: "[p]erpetuities and monopolies are contrary to the genius of a free government, and shall never be allowed, nor shall the law of primogeniture or entailments ever be in force in this State."
¶14 The Protestant cites no Oklahoma cases in support of his argument. Instead, he relies only on Hawks v. Hamill, 288 U.S. 52, 53 S.Ct. 240, 77 L.Ed. 610 (1933), a U.S. Supreme Court case where county commissioners in McClain County, Oklahoma, granted a franchise to individuals to build and operate a toll bridge across the Canadian River. The proposed grant was to be perpetual. Id. 288 U.S. at 53-54, 53 S.Ct. at 240-241. The Court narrowed down the issue in Hawks to the validity of a privilege or claim of privilege to obstruct a bridge across a public stream, and not for a decision as to the ownership of the structure of the bridge. Id., 288 U.S. at 59-60, 53 S.Ct. at 243-244. The Court, making no ruling as to any issue concerning the rule against perpetuities, ultimately determined not to insert itself in the case and upheld the dismissal of the cause by the federal district court. Hawks, therefore, does not support the Protestant's claim of a violation of the rule against perpetuities in the instant matter.
¶15 The Protestant fails to cite supporting legal authority showing how there is a violation of the rule against perpetuity concerning the issuance of government bonds with a concrete maturity date. We need not consider propositions unsupported by convincing argument or authority in an original action unless it is apparent without further research that they are well taken. S.W. v. Duncan, 2001 OK 39, ¶ 31, 24 P.3d 846, 857.
CONCLUSION
¶16 The proposed bond issue was properly authorized. We find that valid notice of this application was given and that the Authority and the Protestant were fully heard. The Protestant has advanced no legally or factually supportable reasons to disapprove the application. Accordingly, the Authority's application is granted.6
APPLICATION FOR APPROVAL OF THE ISSUANCE OF OKLAHOMA TURNPIKE
SYSTEM SECOND SENIOR LINE REVENUE BONDS, SERIES 2016, IN AN
AMOUNT NOT TO EXCEED $480,000,000.00 IS GRANTED.
ALL JUSTICES CONCUR.
FOOTNOTES
1 69 O.S.2011, § 1718 provides:
The Authority is authorized in its discretion to file an application with the Supreme Court of Oklahoma for the approval of any bonds to be issued hereunder, and exclusive original jurisdiction is hereby conferred upon the Supreme Court to hear and determine each such application. It shall be the duty of the Court to give such applications precedence over the other business of the Court and to consider and pass upon the applications and any protests which may be filed thereto as speedily as possible. Notice of the hearing on each application shall be given by a notice published in a newspaper of general circulation in the state that on a day named the Authority will ask the Court to hear its application and approve the bonds. Such notice shall inform all persons interested that they may file protests against the issuance of the bonds and be present at the hearing and contest the legality thereof. Such notice shall be published one time not less than ten (10) days prior to the date named for the hearing and the hearing may be adjourned from time to time in the discretion of the Court. If the Court shall be satisfied that the bonds have been properly authorized in accordance with this article and that when issued, they will constitute valid obligations in accordance with their terms, the Court shall render its written opinion approving the bonds and shall fix the time within which a petition for rehearing may be filed. The decision of the Court shall be a judicial determination of the validity of the bonds, shall be conclusive as to the Authority, its officers and agents, and thereafter the bonds so approved and the revenues pledged to their payment shall be incontestable in any court in the State of Oklahoma.
2 The Protestant filed an objection to the application sought herein as well as filed a separate action challenging the bonds' issuance in Jerry R. Fent v. State of Oklahoma, ex rel Oklahoma Turnpike Authority, Case No. 115,270. We previously assumed original jurisdiction in Case No. 115,270, denied the Protestant's requested relief, and found his request for affirmative relief duplicative of the relief sought in this matter and, therefore, dismissed that case.
3 See In re Oklahoma Turnpike Authority, 1950 OK 208, 221 P.2d 795 (finding that the Authority's enabling act was not a special law, did not violate the single subject rule, was not enacted in excess of the Legislature's constitutional authority, and that any bonds issued by the Authority were not obligations of the State); Application of Oklahoma Turnpike Authority, 1952 OK 247, 246 P.2d 327 (approving supplemental bond and determining when bonds can be sold at less than par); Applications of Oklahoma Turnpike Authority, 1954 OK 341, 277 P.2d 176 (approving bonds which combine one or more projects); Application of Oklahoma Turnpike Authority, 1960 OK 1, 348 P.2d 510 (determining validity of trust fund and its pledge to turnpike revenue bonds); Application of Oklahoma Turnpike Authority, 1961 OK 15, 359 P.2d 680 (approved financing of two projects under single structure); Application of Oklahoma Turnpike Authority, 1961 OK 212, 365 P.2d 345 (approving bond issuance and allocation of trust fund revenues); Application of Oklahoma Turnpike Authority, 1963 OK 234, 386 P.2d 165 (validating the bonds and approving several issues relating thereto); Application of Oklahoma Turnpike Authority, 1966 OK 139, 416 P.2d 860 (new money and refundings authorized in one issuance); Application of Oklahoma Turnpike Authority, 1969 OK 176, 460 P.2d 952 (approving Cimarron Turnpike and validating revenue fund apportionments and reiterating that debts are not the obligation of the State); Application of Oklahoma Turnpike Authority, 1989 OK 21, 770 P.2d 16 (finding bonds properly issued).
4 The four turnpikes referenced in paragraph (f) of 69 O.S.2011, § 1705 refer to:
(10) A turnpike or any part or parts thereof beginning in the vicinity of Duncan extending east to the vicinity of the City of Davis, and extending in a northeasterly direction, by way of the vicinity of the City of Ada, to a connection in the vicinity of Henryetta or in the vicinity of the intersection of State Highway 48 and Interstate 40; and a turnpike or any part or parts thereof from the vicinity of Snyder extending north to the vicinity of Woodward.
(20) All or any part of an Oklahoma City Outer Loop expressway system beginning in the vicinity of I-35 and the Turner Turnpike and extending west into Canadian County and then south to I-40; and then south and east to I-35 in the vicinity of Moore and Norman; and then extending east and north to I-40 east of Tinker Field; and then extending north to the Turner Turnpike to complete the Outer Loop.
(21) All or any part of the Tulsa south bypass expressway system beginning in the vicinity of the Turner Turnpike near Sapulpa and extending south and east to U.S. 75 in the vicinity of 96th Street to 121st Street; and then east across the Arkansas River to a connection with the Mingo Valley Expressway; and then south and/or east to a point on the Tulsa-Wagoner County Line near 131st street south in the city of Broken Arrow.
(22) A new turnpike or any part thereof from near the west gate of the Will Rogers Turnpike south to the west end of south Tulsa Turnpike at the Tulsa-Wagoner County Line.
69 O.S.2011, § 1705 (e).
5 Art. 5, § 57 of the Oklahoma Constitution provides: "Every act of the Legislature shall express but one subject, which shall be clearly expressed in its title. . . ." This provision is more commonly known as the "single subject rule."
6 Title 20 O.S.2011, § 14.1 provides that this Court shall fix the time for rehearing. Rehearing shall follow Okla.Sup.Ct.R.1.13.
Citationizer© Summary of Documents Citing This Document
Cite
Name
Level
None Found.
Citationizer: Table of Authority
Cite
Name
Level
Oklahoma Supreme Court Cases
CiteNameLevel
1989 OK 21, 770 P.2d 16, 60 OBJ 312, Oklahoma Turnpike Authority, Application ofDiscussed at Length
1952 OK 247, 246 P.2d 327, 206 Okla 617, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
2001 OK 39, 24 P.3d 846, 72 OBJ 1479, S. W. v. DUNCANDiscussed
1954 OK 341, 277 P.2d 176, APPLICATIONS OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
1960 OK 1, 348 P.2d 510, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
1961 OK 15, 359 P.2d 680, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed at Length
1961 OK 212, 365 P.2d 345, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
1963 OK 234, 386 P.2d 165, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
1966 OK 139, 416 P.2d 860, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed at Length
1969 OK 176, 460 P.2d 952, APPLICATION OF OKLAHOMA TURNPIKE AUTHORITYDiscussed
2009 OK 15, 214 P.3d 799, FENT v. STATE ex rel. OKLAHOMA CAPITOL IMPROVEMENT AUTHORITYDiscussed
1950 OK 208, 221 P.2d 795, 203 Okla. 335, In re OKLAHOMA TURNPIKE AUTH.Discussed
Title 20. Courts
CiteNameLevel
20 O.S. 14.1, Application for Evidences of IndebtednessCited
Title 69. Roads, Bridges, and Ferries
CiteNameLevel
69 O.S. 1701, Purpose - Authority to Construct, Maintain, Repair and Operate ProjectsDiscussed
69 O.S. 1705, Authority - Powers and DutiesDiscussed at Length
69 O.S. 1709, Turnpike Revenue BondsDiscussed
69 O.S. 1718, Judicial Determination of Validity of BondsDiscussed at Length
|
01-03-2023
|
12-13-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/2981736/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0387n.06
No. 11-2632 FILED
Apr 18, 2013
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
IN RE: SETTLEMENT FACILITY DOW )
CORNING TRUST. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
DOW CORNING CORPORATION, ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
Interested Party-Appellant, )
) AMENDED OPINION
v. )
)
CLAIMANTS’ ADVISORY COMMITTEE, )
)
Interested Party-Appellee. )
)
BEFORE: BATCHELDER, Chief Judge; McKEAGUE and GRIFFIN, Circuit Judges.
McKEAGUE, Circuit Judge. In this case arising from its Chapter 11 reorganization, Dow
Corning Corporation seeks Time Value Credits to account for the timing of certain payments it made
to the Depository Trust set up for the benefit of breast implant tort claimants. The district court
denied Dow’s requests except for the instances where the Funding Payment Agreement expressly
provides for Time Value Credits. We affirm.
I. BACKGROUND
Bankruptcy
The saga of the Dow Corning silicon breast implant litigation settlement has been told before,
so we will not repeat it here. See, e.g., In re Dow Corning Corp., 255 B.R. 445 (E.D. Mich. 2000),
No. 11-2632
In re: Settlement Facility Dow Corning Trust
aff’d and remanded, 280 F.3d 648 (6th Cir. 2002). Suffice it to say that faced with thousands of
lawsuits brought by women who had received silicon breast implants that it manufactured, Dow
Corning Corporation (“Dow”) filed for Chapter 11 bankruptcy on May 15, 1995. The Bankruptcy
Court confirmed the Amended Joint Plan of Reorganization (the “Plan”) on November 30, 1999.
Much litigation followed, and the Plan finally took effect on June 1, 2004.
The Plan outlines the procedures for resolving breast implant claims. Claimants can choose
to settle their claims through a Settlement Facility or litigate their claims against a Litigation Facility.
Plan § 5.4. Claims and administrative expenses are paid with monies held in a trust known as the
Depository Trust (the “Trust”). Plan § 5.3. The responsibilities of the Trustee are enumerated in a
Depository Trust Agreement (the “Trust Agreement”), the first version of which was dated March
27, 2001.
The Funding Payment Agreement
Dow’s payment obligations are set forth in a Funding Payment Agreement (the “Funding
Agreement”), which is the document at the center of this appeal. The Funding Agreement requires
Dow to make payments to the Trust1 up to a maximum aggregate amount of $3.172 billion. Funding
Agreement § 2.01. However, the Funding Agreement does not require Dow to make this payment
all at once, but spreads out Dow’s payment obligations over time. To account for the timing of these
payments, the Funding Agreement provides that Dow’s funding obligation cannot exceed a net
present value of $2.35 billion, calculated as of the Effective Date (June 1, 2004). Funding
1
Although the Funding Agreement uses the term “Settlement Facility,” it means the same
thing as the Depository Trust. Funding Agreement § 1.03.
-2-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
Agreement § 2.01. To compare the net present value of Dow’s payment stream with the net present
value funding cap, all payments—with a possible exception identified below—must be discounted
to the Effective Date using a rate of 7% per year compounded annually. Funding Agreement § 2.01;
Plan §§ 1.102, 5.3.2
The method by which Dow fulfills its payment obligations under the Funding Agreement is
remarkably complicated. We need not describe all the details of the Funding Agreement, but several
aspects of the Funding Agreement are important for purposes of this appeal.
First, before the Effective Date, Dow made a series of payments totaling $985 million.
Funding Agreement § 2.01(a). When executing the Plan, the parties anticipated that appeals might
be filed that would delay the Plan’s implementation. Plan § 7.4. To prepare for that contingency,
the Plan provided that Dow would make an initial payment of $985 million to the Trust to “be held
in escrow pending the outcome of the appeal, with any interest accruing thereon to be held as part
of the fund.” Plan § 7.4. The Plan further provided that these funds could be used for administrative
expenses by the Settlement Facility to prepare “to begin processing Claims promptly after the
Effective Date.” Plan § 7.4. If the confirmation of the Plan was upheld on appeal, these funds would
be disbursed to pay claims; if the confirmation of the Plan was overturned on appeal, the remaining
2
“Net Present Value” is defined in the Plan as “the value of an amount of money to be paid
in the future or over a period of time that has been adjusted or discounted to reflect that amount as
of a single earlier date.” Plan § 1.102. The time value of money is a concept central to the Funding
Agreement. Simply put, “[t]he time value of money refers to what the value of a dollar amount is
today (present value) versus what the value of that same dollar amount will be in X amount of time
(future value).” James A. Elfter, Discounted Cash Flow, in The Portable MBA in Finance and
Accounting 103, 103 (Theodore Grossman & John Leslie Livingstone, eds., 4th ed. 2009).
-3-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
funds would be returned to Dow. Plan § 7.4. Of course, the confirmation of the Plan was in fact
appealed, so these payments were made—mostly in 2001—pursuant to a detailed provision in the
Trust Agreement. See Trust Agreement § 4.01(a). Collectively, they are referred to as the “Initial
Payment.” Funding Agreement § 2.01(a).
Another important aspect of the Funding Agreement is that Dow’s payment obligations are
spread out over time. The Funding Agreement creates a series of sixteen “Funding Periods.”
Funding Agreement § 2.01(b). Each Funding Period lasts exactly one year, and the first begins
exactly one year after the Effective Date. Funding Agreement § 2.01(b). Each Funding Period has
a corresponding “Annual Payment Ceiling” which determines Dow’s maximum payment obligation
during that Funding Period. Funding Agreement § 2.01(b). Every three months, the Claims
Administrator sends Dow a notification informing Dow of the amount of claims and expenses
expected to be paid out in excess of reserves each month. Funding Agreement § 2.02(a). At the end
of each month, the Claims Administrator sends Dow a notification informing Dow of the actual
claims and expenses paid out in excess of reserves during the preceding month. Funding Agreement
§ 2.02(b). Dow must promptly pay that amount. Funding Agreement § 2.02(b)(i). Dow is not
required to pay more than necessary to cover the actual claims and expenses paid in excess of
reserves, Funding Agreement § 2.02(b)(iii), and cannot be required to pay more than the Annual
Payment Ceiling. Funding Agreement § 2.02(b)(i).
-4-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
But the Annual Payment Ceilings really only limit Dow’s obligations with respect to cash
payments. “Insurance Proceeds”3 received by Dow before the Effective Date were required to be
held in trust by Dow and paid to the Trust 90 days after the Effective Date. Funding Agreement
§ 2.01(a)(ii). After the Effective Date, Insurance Proceeds are supposed to be paid by the insurers
directly to the Trust, and if Dow receives Insurance Proceeds, it must transfer them to the Trust
immediately, whether or not they exceed the applicable Annual Payment Ceiling. Funding
Agreement §§ 2.01(a)(i), 2.02(c). Of course, requiring Insurance Proceeds to be paid to the Trust
without regard to the Annual Payment Ceilings means that Dow’s payment of cash and Insurance
Proceeds during a Funding Period could exceed the Annual Payment Ceiling. Recognizing this fact,
the Funding Agreement provides that when Dow’s payments during a Funding Period exceed the
applicable Annual Payment Ceiling, Dow receives a credit for the excess amount that operates to
reduce the Annual Payment Ceiling in a future funding period.4 As explained in more detail below,
sometimes this credit is applied to the very next Annual Payment Ceiling, and sometimes it is
applied to an Annual Payment Ceiling farther in the future.
In addition to crediting the nominal value of the excess amount against a future Annual
Payment Ceiling, the Funding Agreement sometimes also expressly credits the time value of the
3
“Insurance Proceeds” is a defined term with a complicated definition in the Funding
Agreement. Funding Agreement § 1.02(a). It essentially means funds received from Dow’s
insurance providers.
4
Similarly, if the expenditures are less than the Annual Payment Ceiling so that Dow is
required to pay less than the Annual Payment Ceiling, the very next Annual Payment Ceiling is
increased by the difference, plus 7%. Funding Agreement § 2.02(e).
-5-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
excess amount. This so-called “Time Value Credit” recognizes that Dow has essentially paid its
obligation early, and credits Dow for the timing of the payment as well as the nominal amount. The
Time Value Credit is calculated at the rate of 7% per year—the same rate used to calculate the net
present value of the total payments for purposes of comparing it with the net present value funding
cap.
Dispute
The Claims Administrator is charged with the responsibility of adjusting the Annual Payment
Ceilings. In 2004, Dow requested that the Claims Administrator adjust the Annual Payment Ceilings
to take into account several different payments it had made. Dow claimed it was entitled to Time
Value Credits for making these payments early. Specifically, Dow sought Time Value Credits for
the following eight payments:
(1) The $985 million Initial Payment, paid mostly in 2001.
(2) $18.4 million paid in 2001 to settle Class 6D claims.
(3) $211,456,278 in Insurance Proceeds that were received by Dow before the Effective Date
and paid in June 2004.
(4) $2.9 million paid from Dow’s MDL 926 escrow account in June 2004.
(5) $2,180,656 paid from Dow’s MDL 926 escrow account in June and September 2004.
(6) $7.2 million paid in June 2004 to Class 4A claimants.
(7) $214,363,369 in Insurance Proceeds that were received by Dow after the Effective Date
and paid in June 2004.
(8) $57,736,990 in Insurance Proceeds paid in Funding Period 3.
The Claimants’ Advisory Committee (“Committee”), which represents the tort claimants,
objected to Dow’s request for Time Value Credits for most of these payments. When the Claims
Administrator did not grant its request, Dow filed a motion in the United States District Court for
-6-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
the Eastern District of Michigan requesting that the court require the Claims Administrator to award
the Time Value Credits.
The district court found that the Funding Agreement is unambiguous. It determined that Dow
is entitled to Time Value Credits only in those instances where the Funding Agreement expressly
provides for them. It concluded that if the parties had intended Dow to receive Time Value Credits
for particular payments, the Funding Agreement would specifically provide for them. Since the
Funding Agreement specifically provides a Time Value Credit for the $214,363,369 in Insurance
Proceeds that were received by Dow after the Effective Date and paid in June 2004 (payment number
7 above), the district court found that Dow was entitled to one. It further found that the Funding
Agreement specifically provides a Time Value Credit for the $211,456,278 in Insurance Proceeds
received before the effective date and paid in June 2004 (payment number 3 above), but only for the
period from the date of payment until the beginning of Funding Period 1. The Funding Agreement
does not specifically provide a Time Value Credit for the other payments, so the district court denied
Dow’s request for Time Value Credits for these payments. Unsatisfied with this outcome, Dow
appealed the district court’s order.
II. ANALYSIS
A. Standard of Review
We apply principles of contract interpretation when interpreting a confirmed bankruptcy plan.
See In re Dow Corning Corp., 456 F.3d 668, 676 (6th Cir. 2006). New York law governs our
interpretation of the Plan and related documents. Id.; Plan § 6.13. Under New York law, the first
step in interpreting a contract is to determine whether the contract is ambiguous. See Space Imaging
-7-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
Europe, Ltd. v. Space Imaging L.P., 38 F. Supp. 2d 326, 333-34 (S.D.N.Y. 1999). “A contract is not
ambiguous when the language in it has a definite and precise meaning, unattended by danger of
misconception in the purport of the contract itself, and concerning which there is no reasonable basis
for a difference of opinion.” Id. at 334 (quotation marks omitted). “Where an agreement is
unambiguous on its face, it must be enforced in accordance with the plain meaning of its terms.”
Vintage, LLC v. Laws Const. Corp., 920 N.E.2d 342, 343 (N.Y. 2009) (mem.). In this case, the
district court found that the Funding Agreement is unambiguous.
The district court judge whose order Dow is appealing has presided over the Dow Corning
settlement since 1995. Another panel of this Court recently discussed the standard of review we
apply when reviewing this judge’s determination that a plan document in the Dow Corning
bankruptcy is not ambiguous. See In re Settlement Facility Dow Corning Trust, 628 F.3d 769, 771-
73 (6th Cir. 2010). The majority observed that “[o]ur court is reasonably well-equipped to determine
whether a plan provision is ambiguous—we construe contracts all the time.” Id. at 772. But it noted
that when slogging through the morass of the Dow Corning settlement, we should recognize this
judge’s many years’ experience in exploring this potentially treacherous area. Id. Ultimately,
though, the majority concluded that “the determination whether a plan provision is ambiguous is not
a point on which we substantially defer.” Id. If we stay within the bounds of the plan documents
and do not stray into extrinsic evidence, we can traverse the Dow Corning slough as well as the
district court. We thus evaluate de novo the district court’s determination that the Funding
Agreement is unambiguous.
B. Nature of the Dispute
-8-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
As a preliminary matter, we think it is important to note what is and is not disputed in this
case. What is NOT disputed is Dow’s total payment obligation. The plan documents clearly state
that Dow is not required to pay a net present value in excess of $2.35 billion, calculated as of the
Effective Date and using a discount rate of 7% per year.5 Plan § 5.3; Funding Agreement § 2.01.
What is disputed here is the method used to ensure that Dow’s payments do not exceed this
funding cap. The gist of Dow’s position is that if a Time Value Credit is not awarded for every early
payment, its payments might exceed the net present value funding cap. Dow contends that the
Annual Payment Ceilings must be reduced every time it makes a payment early. In other words,
Dow argues that Time Value Credits are impliedly provided for all early payments, regardless of
whether they are expressly set forth in the Funding Agreement, as they are for some payments but
not for others. The Committee, on the other hand, contends that except in those instances where the
plan documents explicitly provide for a credit to an Annual Payment Ceiling, the net present value
funding cap is accomplished through the “true-up” provision which takes effect after the last Funding
Period. See Funding Agreement § 2.05(a)(ii). The first issue we must resolve, then, is whether Time
Value Credits are necessary for all early payments to enforce the net present value funding cap.
C. Meaning and Operation of “Time Value Credit”
“Time Value Credit” is the term at the center of this dispute, so the logical point to begin our
analysis is by figuring out exactly what it means. Since “Time Value Credit” is capitalized in the
Funding Agreement, it is a defined term. Funding Agreement § 1.01. Unfortunately, it is a very
5
As discussed below, there is a possible exception to this funding cap.
-9-
No. 11-2632
In re: Settlement Facility Dow Corning Trust
poorly defined term. The Funding Agreement incorporates definitions from several other plan
documents, including the Plan itself, Funding Agreement § 1.01, but Time Value Credit is not
defined in those documents. The term appears only in the Funding Agreement. And it appears in
the Funding Agreement three times—twice in § 2.01(a)(ii) and once in § 2.02(d)—before it is finally
defined in § 2.03(b). The term also appears several times after § 2.03(b), but only in a section
governing modification, which is not relevant to this appeal.
The first two appearances of Time Value Credit are in a provision dealing with Insurance
Proceeds received by Dow before the Effective Date. Funding Agreement § 2.01(a)(ii). It provides
that Dow receives a credit for the nominal amount of Insurance Proceeds it held in trust on the
Effective Date and paid immediately after the Effective Date. The credit is to be applied toward the
Annual Payment Ceiling in Funding Period 1. In addition to crediting the nominal amount of the
Insurance Proceeds, Dow is entitled to a Time Value Credit of 7% per year calculated from the date
the Insurance Proceeds were received by the Trust until the beginning of Funding Period 1.
The third appearance of Time Value Credit is in a provision dealing with payments received
by the Trust after Funding Period 2. Funding Agreement § 2.02(d). It provides that if during any
Funding Period after Funding Period 2 the total amount of cash and Insurance Proceeds received by
the Trust exceeds the applicable Annual Payment Ceiling, the excess amount will be credited against
the Annual Payment Ceiling in the next Funding Period, “together with a Time Value Credit
calculated at the rate of 7% per annum from the date of receipt of the excess by the [Trust] until the
beginning of the next Funding Period.” Funding Agreement § 2.02(d).
- 10 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
The two provisions described above refer to payments—either cash or Insurance
Proceeds—received before the Effective Date or after Funding Period 2. Insurance Proceeds
received between the Effective Date and the end of Funding Period 2 receive special treatment in the
Funding Agreement, and Time Value Credit is finally defined in the provision dealing with these
Insurance Proceeds.
If Insurance Proceeds received between the Effective Date and the end of Funding Period 2
exceed the Annual Payment Ceilings of Funding Periods 1 and 2, the excess amount receives its own
defined term: “Excess Insurance Proceeds.” Funding Agreement § 2.03(a). Insurance Proceeds and
cash received in other Funding Periods that exceed the Annual Payment Ceilings of those Funding
Periods are described generically as “excess,” see Funding Agreement § 2.02(d), and are not within
the definition of “Excess Insurance Proceeds.”
“Excess Insurance Proceeds” are credited against future Annual Payment Ceilings in a unique
way. Although received before the end of Funding Period 2, they are not credited toward the Annual
Payment Ceiling of Funding Period 3. Instead, they are credited in Funding Periods 5-8 in specified
proportions, thereby “smoothing out” the effect these credits have on the Annual Payment Ceilings,
as discussed at oral argument. Funding Agreement § 2.03(b)—the only instance where Time Value
Credit is defined—provides the following:
Excess Insurance Proceeds shall be credited against future Annual Payment
Ceilings as provided in this Section 2.03 to adjust the Annual Payment Ceilings in
Section 2.01(b) so as to maintain a net present value for the aggregate maximum
payments of $2,350,000,000, discounted at the rate of 7% per annum, to the Effective
Date. To achieve this, the amount of such credit shall equal the amount of the Excess
Insurance Proceeds plus an additional amount (the “Time Value Credit”) calculated
at the rate of 7% per annum, compounded annually, from the date of receipt of the
- 11 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
Excess Insurance Proceeds until the first day of the Funding Period for the Annual
Payment Ceiling against which they are to be credited becomes due. Excess
Insurance Proceeds together with the applicable Time Value Credit will be credited
against Annual Payment Ceilings due in each of Funding Periods 5 through 8, in the
following proportions:
Funding Period 5: 50% of Excess Insurance Proceeds and the applicable
Time Value Credit thereon;
Funding Period 6: 30% of Excess Insurance Proceeds and the applicable
Time Value Credit thereon;
Funding Period 7: 10% of Excess Insurance Proceeds and the applicable
Time Value Credit thereon;
Funding Period 8: 10% of Excess Insurance Proceeds and the applicable
Time Value Credit thereon.
To the extent that the amount to be credited under this subsection exceeds the
relevant Annual Payment Ceiling obligation, the excess amount will be credited
against Annual Payment Ceilings due in the immediately succeeding Funding
Period(s) including the applicable Time Value Credit.
This provision is obtuse to be sure, but it does provide some insight into the meaning of
“Time Value Credit.” Viewing together this provision dealing with “Excess Insurance Proceeds”
and the other provisions dealing with generic excess payments, the following meaning of Time Value
Credit can be discerned: If a payment is to be credited against a future Annual Payment Ceiling, the
Funding Agreement sometimes provides that the amount credited shall include both the nominal
amount of the payment and an additional amount—a Time Value Credit—that accounts for some
or all of the period between the receipt of the payment by the Trust and the time the credit is applied.
But the Funding Agreement does not provide a Time Value Credit for every payment credited against
- 12 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
a Future Annual Payment Ceiling, and as will be seen below, the Time Value Credits provided for
are not always calculated in the same way.
D. Time Value Credit and Net Present Value Adjustment Distinguished
When considering the meaning of “Time Value Credit,” it is also crucial to distinguish
between a credit to a future Annual Payment Ceiling and a net present value adjustment. Dow
asserts that the concepts are the same, but they clearly are not. The Funding Agreement refers to
adjusting Dow’s payments to the Effective Date to compare their net present value with the net
present value funding cap. Funding Agreement § 2.01. “Net present value adjustment” is a
convenient way to refer to this adjustment calculation, but it is not a defined term. As mentioned
above, with a possible exception identified below, all payments must be adjusted to the Effective
Date to ensure that the net present value of all the payments does not exceed a total net present value
of $2.35 billion. Time Value Credits, on the other hand, perform a different function altogether. A
Time Value Credit is only applicable when a payment is required by the Funding Agreement to be
credited against a future Annual Payment Ceiling. The key word is “credit.”
In an effort to equate Time Value Credits with net present value adjustments, Dow has
created a hybrid term. Dow’s briefs refer to a “Time Value Credit adjustment.” But this term does
not appear in the Funding Agreement itself, and it conflates the distinct concepts of credits and
adjustments. Although the Claims Administrator must “adjust” the Annual Payment Ceilings when
Dow receives a Time Value Credit, by its terms and by its operation, a Time Value Credit is a
- 13 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
“credit,” not an “adjustment.” A Time Value Credit is only applicable when Dow is entitled to credit
a payment against a future Annual Payment Ceiling. In that situation, sometimes Dow is entitled to
credit the time value of the payment as well as the nominal amount, and sometimes it is not.
Crediting the time value of an excess payment against a future Annual Payment Ceiling is a separate
calculation from adjusting Dow’s total payments to the Effective Date to compare their net present
value with the net present value funding cap.
Furthermore, and most importantly, Time Value Credits are not necessary to ensure that the
net present value of Dow’s total payments does not exceed the $2.35 billion net present value
funding cap. The cornerstone of Dow’s position in this case is that unless it receives the Time Value
Credits it seeks, it may be required to pay an amount greater than the net present value funding cap.
Dow states that “[o]nly by giving [Time Value Credit] adjustments for both pre- and post-Effective
Date funding in excess of or at a time when there was no outstanding Annual Payment Ceiling can
the Plan’s net present value funding cap be enforced.” Appellant Br. 15.
Time Value Credits certainly benefit Dow because they operate to reduce the Annual
Payment Ceilings and thus reduce its obligation to make cash payments to cover any deficiencies in
reserves and Insurance Proceeds. But Time Value Credits are not necessary to enforce the net
present value funding cap because the Funding Agreement contains two other provisions that
perform this function. First, the Funding Agreement contains a “true-up” provision that requires the
Claims Administrator, after the final Funding Period, to calculate the net present value as of the
Effective Date of all payments Dow has made. See Funding Agreement § 2.05(a)(ii). This
provision ensures that at the end of the last funding period, with a possible exception identified
- 14 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
below, all Dow’s payments will be adjusted to the Effective Date to compare their net present value
with the net present value funding cap.
Of course, Dow might legitimately worry that this true-up will be performed too late. If it
turns out that the net present value of Dow’s payments exceeds the net present value funding cap,
Dow might not be able to recover funds already paid out to claimants. But this potential problem
is solved by another provision in the Funding Agreement—a provision that neither Dow nor the
Committee has cited in their briefs. Funding Agreement § 2.01(c) provides that at any time, if Dow
has paid “all amounts required by this Agreement”—that is, if the net present value of its total
payments equals $2.35 billion—then Dow can seek confirmation from the district court that its
funding obligations are terminated. This provision completely undermines Dow’s position that Time
Value Credits are necessary to enforce the net present value funding cap. So long as Dow keeps
track of the net present value of its payments and promptly petitions the district court to declare its
funding obligations terminated, it will never be required to pay more than it agreed to pay.
When a Time Value Credit is viewed as a credit that merely benefits Dow in the short run
but is not designed to enforce the net present value funding cap in the long run, Dow’s position
evaporates. The true-up and termination provisions protect Dow from paying more than it agreed
to pay. Time Value Credits are an additional benefit that Dow should receive only where the
Funding Agreement specifically provides for them. The next issue, then, is whether the district court
failed to award Time Value Credits for payments when the Funding Agreement specifically provided
for them. As explained below, the answer is no, although we must correct one erroneous conclusion
in the court’s order.
- 15 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
E. Payments at Issue
1. Initial Payment ($985 million)
Before the Effective Date, Dow made an Initial Payment of $985 million. See Funding
Agreement § 2.01(a). Dow claims that it was not required to make this payment until the Effective
Date and therefore should receive a “Time Value Credit adjustment” for making the payment early.
The district court found that Dow is not entitled to a Time Value Credit for the Initial Payment. We
agree.
As explained above, a Time Value Credit is not an adjustment. The nominal amount of the
Initial Payment is not credited against any of the Annual Payment Ceilings, so neither should its time
value be credited against those ceilings. Because the Funding Agreement does not provide a Time
Value Credit for the Initial Payment, Dow is not entitled to one.
2. Pre-Effective Date Payment for Class 6D Claims ($18.4 million)
Dow paid $18.4 million to settle Class 6D claims before the Effective Date. It claims that
it is entitled to a “Time Value Credit adjustment” for this payment. The district court found that
because this provision does not use the term Time Value Credit, Dow is not entitled to a Time Value
Credit for this payment. We agree.
The Funding Agreement provides:
All payments to be made by Dow Corning directly to the 6A-6D Funds on or
before ninety (90) days after the Effective Date shall be deducted from the next
payment due from Dow Corning under this Agreement, and Dow Corning shall
receive appropriate credit, including [a net present value] adjustment in its funding
obligation in this Funding Payment Agreement.
- 16 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
Funding Agreement § 2.10(c). If Dow were entitled to a Time Value Credit for these payments, the
Funding Agreement would say so. The parties certainly knew how to specify when a Time Value
Credit was required, since they did so elsewhere in the Funding Agreement.
However, the phraseology in this provision is admittedly confusing. The provision says that
Dow “shall receive appropriate credit, including [a net present value] adjustment in its funding
obligation.” We have explained that Time Value Credits and net present value adjustments are
separate concepts, but this phrase almost appears to conflate the two. But it is important to note the
nature of the payment to which this phrase refers. In contrast to most of the other payments
described in the Funding Agreement, this phrase refers to payments that Dow is making not to the
Trust but instead directly to separate funds. Funding Agreement § 2.10(c). Since § 2.01 says that
Dow agreed to make payments “to the Settlement Facility”—i.e. the Trust—up to a maximum net
present value of $2.35 billion, § 2.10(c) needed to specify that Dow would receive “credit” for its
direct payments to these other funds for purposes of the net present value funding cap.
Furthermore, it is noteworthy that the provision does not say that Dow will receive the “[net
present value] adjustment” in the “next payment due”—the point at which it receives credit for the
nominal value of the payment. Instead, the phrase “appropriate credit, including [a net present value]
adjustment in its funding obligation” is best read to mean that both the nominal amount and the
timing of these payments will be taken into account through a net present value adjustment to Dow’s
total “funding obligation.” In short, the nominal value of this payment is credited against the “next
payment due,” and the net present value of the payment is included when determining the net present
value of Dow’s total payments.
- 17 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
3. Insurance Proceeds Paid in Funding Period 3 ($57,736,990)
The Trust received $57,736,990 in Insurance Proceeds in Funding Period 3. Dow claims that
this payment exceeded the Annual Payment Ceiling of Funding Period 3 ($374 million), and
therefore it is entitled to have this excess amount, with a “Time Value Credit adjustment,” credited
against successive Annual Payment Ceilings. The district court found that Dow was not entitled to
a Time Value Credit for this payment. We agree.
This payment would only have exceeded the Annual Payment Ceiling of Funding Period 3
if we held that Dow was entitled to a Time Value Credit for the Initial Payment and that amount was
credited against the Annual Payment Ceilings of Funding Periods 1-3. Otherwise the money
received in Funding Period 3 would fall below the Annual Payment Ceiling . Having concluded
above that Dow is not entitled to a Time Value Credit for the Initial Payment since the Funding
Agreement does not provide for one, the $57,736,990 in Insurance Proceeds paid in Funding Period
3 did not exceed the Annual Payment Ceiling, and Dow is not entitled to a Time Value Credit for
this payment.
Although Dow is not entitled to a Time Value Credit for these specific Insurance Proceeds
because they did not exceed the Annual Payment Ceiling, we disagree with the district court to the
extent it found that Dow is never entitled to Time Value Credits in Funding Periods after Funding
Period 2. See R. 836, Order, PageID # 14197. This finding ignores Funding Agreement § 2.02(d),
which provides:
In any Funding Period after Funding Period 2 in which the total amount of
cash and Insurance Proceeds received by the Settlement Facility exceeds the
applicable Annual Payment Ceiling (as adjusted pursuant to Sections 2.03-2.05), the
- 18 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
excess over the Annual Payment Ceiling will be credited against the Annual Payment
Ceiling in the next Funding Period(s), together with a Time Value Credit calculated
at the rate of 7% per annum from the date of receipt of the excess by the Settlement
Facility until the beginning of the next Funding Period.
This provision clearly entitles Dow to Time Value Credits if the Trust receives funds in
excess of the Annual Payment Ceiling in any Funding Period after Funding Period 2. Therefore, to
the extent the district court’s order says that Dow will never be entitled to a Time Value Credit for
Insurance Proceeds received after Funding Period 2, the order is in error. Although we have
determined that the Annual Payment Ceiling was not exceeded in Funding Period 3, we have no way
of knowing whether a future Annual Payment Ceiling might be exceeded.
4. Pre-Effective Date Insurance Proceeds ($211,456,278)
Dow received $211,456,278 in Insurance Proceeds before the Effective Date. Funding
Agreement § 2.01(a)(ii) required the following:
Insurance Proceeds held by Dow Corning on the Effective Date shall be held in trust
for the benefit of the Trust and paid to the Trust 90 days after the Effective Date and
credited against the Annual Payment Ceiling for Funding Period 1, together with a
Time Value Credit calculated at the rate of 7% per annum from the date of receipt of
such excess by the Settlement Facility until the beginning of Funding Period 1. To
the extent the amount to be credited (including the Time Value Credit) exceeds the
Annual Payment Ceiling for Funding Period 1, such excess shall be credited against
the Annual Payment Ceiling for Funding Period 2.
The district court found that “Dow Corning is entitled to Time Value Credit on Insurance
Proceeds upon receipt by the Settlement Facility only until the beginning of Funding Period 1, to be
credited, if in excess of the Annual Payment Ceiling for Funding Period 1, against the Annual
Payment Ceiling for Funding Period 2.” R. 836, Order, PageId # 14194. In other words, it found
- 19 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
that Dow was not entitled to a second Time Value Credit for the excess that rolled over into Funding
Period 2.
Having found that a Time Value Credit is a benefit that Dow receives only when the Funding
Agreement explicitly provides it, we agree. The Funding Agreement says that Dow gets a Time
Value Credit from the date of receipt of the excess Insurance Proceeds until the beginning of
Funding Period 1. It does not provide another Time Value Credit for the amount that rolls over into
Funding Period 2. Therefore, we conclude that Dow receives only the Time Value Credit
specifically provided for in the Funding Agreement.
5. Payment for Settlement Facility Access to MDL 926 Claims Office Materials ($2.9
million); Payment from Dow’s MDL 926 Escrow Account ($2,180, 656); Payment to Class
4A Claimants ($7.2 million)
The parties each briefly address whether Dow should receive Time Value Credits for these
three relatively small payments, all of which were made after the Effective Date and before the start
of the first Funding Period. The district court found that Dow was not entitled to a Time Value
Credit for these payments because the Funding Agreement does not provide for one. We agree.
Because the Funding Agreement does not provide a Time Value Credit for these payments, Dow is
not entitled to one.
F. Net Present Value Adjustment for the Initial Payment
In addition to disputing the eight Time Value Credits sought by Dow, the parties also dispute
whether Dow should receive a net present value adjustment for the Initial Payment which was paid
several years before the Effective Date. (Recall that the Initial Payment was placed into escrow with
the interest accruing to the benefit of the Trust.) The Funding Agreement has a special provision
- 20 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
addressing the effect the actual interest received on $905 million of the Initial Payment would have
on the net present value funding cap. It provides that the interest received on this amount “shall not
be included in calculating the payment of the net present value of $2,350,000,000 under this
Agreement.” Funding Agreement § 2.01(a). Although clearly the actual interest is disregarded when
calculating the net present value, the parties dispute whether the $905 million should be adjusted to
the Effective Date using the 7% discount rate used to adjust the other payments.
This issue was not decided by the district court. The litigation below centered on Time Value
Credits, not on net present value adjustments. Because the issue of a net present value adjustment
for the Initial Payment was not resolved in the first instance by the district court, we decline to
address it for the first time on appeal. See Elkins v. Richardson-Merrell, Inc., 8 F.3d 1068, 1072 (6th
Cir. 1993) (“This court does not normally address issues raised for the first time on appeal.”).
III. CONCLUSION
The district court was correct to distinguish between Time Value Credits and net present
value adjustments. Time Value Credits are credits that operate to reduce the Annual Payment
Ceilings when expressly provided for in the Funding Agreement. Net present value adjustments, on
the other hand, are the adjustments made to compare the net present value of Dow’s total payments
with the $2.35 billion net present value funding cap. Accordingly, we AFFIRM the district court’s
order with respect to every finding except its determination that Dow is never entitled to a Time
Value Credit for Funding Periods after Funding Period 2. The Funding Agreement clearly states that
if the cash and Insurance Proceeds received by the Trust during these Funding Periods exceeds the
applicable Annual Payment Ceiling, Dow is entitled to a Time Value Credit for the excess. We hold
- 21 -
No. 11-2632
In re: Settlement Facility Dow Corning Trust
that the Funding Agreement is unambiguous and that Dow is entitled to Time Value Credits only
where expressly provided by the Funding Agreement. We express no opinion as to whether Dow
is entitled to a net present value adjustment for the Initial Payment.
- 22 -
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1843660/
|
694 So.2d 180 (1997)
Floyd KEITH, et ux.
v.
UNITED STATES FIDELITY & GUARANTY COMPANY, et al.
No. 96-CC-2075.
Supreme Court of Louisiana.
May 9, 1997.
Rehearing Denied June 13, 1997.
Larry Alan Stewart, Andrew Parker Texada, Stafford, Stewart & Potter, Alexandria, for Applicant.
*181 Daniel E. Broussard, Broussard, Bolton, Halcomb & Vizzier, Alexandria, for Respondent.
KNOLL, Justice.[*]
This litigation involves an action to recover damages for injuries Floyd H. Keith (Keith) suffered in an oilfield accident on February 27, 1991, while he was employed with K & D Well Service (K & D) as a floor hand on a land based drilling rig. Keith and his wife sued Blaney's Oilfield Specialty, Inc. and/or Blaney's Oilfield Supply, Inc. (Blaney), the lessor/owner of a set of slips in use at the time of the accident, and its liability insurer, United States Fidelity & Guaranty Company (USF & G), alleging that the accident was caused by Blaney's fault, negligence, and strict liability in furnishing K & D with defective, worn, and dangerous rental equipment.
Blaney and USF & G answered, denying liability and affirmatively pleading that the accident was caused by the fault of Keith and his co-employees. Subsequently, they supplemented their answer to plead the fault of Keith's employer, K & D, as an affirmative defense to the action. In particular, they stated:
In the alternative, defendants, allege that the accident complained of herein occurred as a result of the negligence and fault of plaintiff's employer, K & D Well Service, in the following nonexclusive particulars:
a) Failing to inspect equipment before putting it in use;
b) Failing to apply the proper lubrication prior to putting the product in use and while using the product;
c) Failing to keep the product clean;
d) Failing to employ a chain, safety clamp or other similar safety devices;
e) Continuing to use the equipment after they knew or should have known that the equipment was slipping;
f) Failing to repair the equipment or request it to be repaired or replaced.
Keith, relying on Cavalier v. Cain's Hydrostatic Testing, Inc., 94-1496 (La.6/30/95); 657 So.2d 975, responded by filing a motion to strike the allegation that the accident was caused by the fault of Keith's employer, K & D.
After hearing oral argument, the trial court granted Keith's motion to strike. Thereafter, Blaney and USF & G unsuccessfully sought a supervisory writ from the Louisiana Court of Appeal, Third Circuit.[1] On application of Blaney and USF & G, we granted supervisory writs[2] to consider the correctness of the lower courts' rulings and to further consider the continued efficacy of Cavalier in light of the 1996 legislative amendments regarding the quantification of employer fault in third-party tort litigation. We reverse, finding that those provisions applicable to the quantification of employer fault found in Act 3 of the First Extraordinary Session of 1996 are applicable retroactively, and remand.
The quantification of employer fault in third-party tort litigation has indeed been marked by differences of opinion among us, and is best reflected in our differing, scholarly treatments of the issue between 1991 and the present. In Guidry v. Frank Guidry Oil Co., 579 So.2d 947 (La.1991), and the companion case of Melton v. General Electric Co., 579 So.2d 448 (La.1991), we held that the worker's compensation principle made the concept of employer fault excludable in tort actions against third-party tortfeasors. Shortly thereafter, in Gauthier v. O'Brien, 618 So.2d 825 (La.1993), we overruled Guidry and Melton, and determined that La. Code Civ.P. art. 2324(B) mandated the quantification of employer fault. Finally, in Cavalier, 657 So.2d 975, our most recent pronouncement on the issue, we revisited Gauthier, rejected its holding, and reinstated our determination in Guidry and Melton that excluded the quantification of employer fault.
When Cavalier overruled Gauthier, we focused on the lack of legislative intent on the *182 quantification of employer fault, focusing specifically on the provisions of La.Code Civ.P. art. 1812(C) and La.Civ.Code art. 2324(B). We determined that the Legislature had not specified which parties should have their fault quantified as directed in Article 1812(C). Cavalier, 657 So.2d at 980-981. We likewise held that the mention in the last sentence of Article 2324(B) of a joint tortfeasor's "immunity" was "not indicative of a legislative intent to make quantification of employer fault mandatory." Id. at 984.
Although we decided Cavalier in June of 1995, Cavalier was not the last treatment of employer fault in third-party tort actions. Rather, shortly thereafter in an Extraordinary Session of the Legislature in early 1996, the Legislature specifically addressed this issue. In the 1996 Extraordinary Legislative Session, the Legislature enacted Act 3, approved April 16, 1996, amending La.Civ. Code. art. 2323 to provide as follows:
A. In any action for damages where a person suffers injury, death, or loss, the degree or percentage of fault of all persons causing or contributing to the injury, death, or loss shall be determined, regardless of whether the person is a party to the action or a nonparty, and regardless of the person's insolvency, ability to pay, immunity by statute, including but not limited to the provisions of R.S. 23:1032, or that the other person's identity is not known or reasonably ascertainable. If a person suffers injury, death, or loss as the result partly of his own negligence and partly as a result of the fault of another person or persons, the amount of damages recoverable shall be reduced in proportion to the degree or percentage of negligence attributable to the person suffering the injury, death, or loss.
B. The provisions of Paragraph A shall apply to any claim for recovery of damages for injury, death, or loss asserted under any law or legal doctrine or theory of liability, regardless of the basis of liability.
C. Notwithstanding the provisions of Paragraphs A and B, if a person suffers injury, death, or loss as a result partly of his own negligence and partly as a result of the fault of an intentional tortfeasor, his claim for recovery of damages shall not be reduced.
With this clear pronouncement from the Legislature on the heels of Cavalier, it is clear that the holdings in Cavalier are no longer applicable as to the quantification of fault "of all persons causing or contributing to the injury, death, or loss ... regardless of whether the person is a party to the action or a nonparty, and regardless of the person's insolvency, ability to pay, immunity by statute, including but not limited to the provisions of R.S. 23:1032, or that the other person's identity is not known or reasonably ascertainable." We must now decide whether this legislative enactment is applicable retroactively or prospectively.
APPLICATION OF LEGISLATIVE ACT 3
Blaney and USF & G contend that Acts 3's amendment to La.Civ.Code art. 2323 in the First Extraordinary Session of 1996 was procedural, remedial, or interpretive; thus, this Act should be applied retroactively. In opposition, Keith contends that this portion of the Act was substantive and should only be applied prospectively.
Comparing La.Civ.Code art. 2323, as amended, to its predecessor, it is apparent that the basic structure for comparative fault is unchanged. However, we observe that the Legislature added more specific language to Art. 2323 making it mandatory for the determination of the percentage of fault of all persons contributing to an injury, whether those persons are unidentified non-parties, statutorily immune employers, or others.
Having reviewed this act of the First Extraordinary Session of the 1996 Legislature, it is evident that the Legislature met the concerns we expressed in Cavalier regarding how it intended that employer fault be treated in third-party tort actions. Notwithstanding, the act did not express whether it intended that the amendment to La.Civ.Code art. 2323 be given retrospective or prospective application.
The general rule against retroactive application of legislative enactments and its exceptions, is codified in La.Civ.Code. art. 6. *183 Cole v. Celotex Corp., 599 So.2d 1058 (La. 1992). Article 6 provides:
In the absence of contrary legislative expression, substantive laws apply prospectively only. Procedural and interpretive laws apply both prospectively and retroactively, unless there is a legislative expression to the contrary.
Additionally, La.R.S. 1:2 provides that no statute is retroactive unless it is expressly so stated. Unlike La.Civ.Code art. 6, La.R.S. 1:2 does not distinguish between substantive, procedural and interpretive laws. However, the jurisprudence has generally construed the two provisions as being co-extensive. See Manuel v. La. Sheriff's Risk Mgmt. Fund, 95-406 (La.11/27/95); 664 So.2d 81; St. Paul Fire & Marine Ins. Co. v. Smith, 609 So.2d 809 (La.1992).
Article 6 requires a two-fold inquiry. First, we must ascertain whether the enactment expresses legislative intent regarding retrospective or prospective application. If such intent is expressed, the inquiry ends unless the enactment impairs contractual obligations or vested rights. If no such intent is expressed, the enactment must be classified as either substantive, procedural or interpretive. St. Paul Fire & Marine Ins. Co., 609 So.2d at 816; Cole, 599 So.2d at 1063. It is well accepted that substantive laws either establish new rules, rights, and duties or change existing ones, while interpretive laws merely establish the meaning the statute had from the time of its enactment. St. Paul Fire & Marine Ins. Co., 609 So.2d at 817. Procedural laws prescribe a method for enforcing a previously existing substantive right and relate to the form of the proceeding or the operation of the laws. 19 Segura v. Frank, 93-1271, 93-1401 (La.1/14/94); 630 So.2d 714. Nonetheless, since the application of legislative enactments has constitutional implications under the due process and contract clauses of both the United States and Louisiana Constitutions, even where the Legislature has expressed its intent to give a substantive law retroactive effect, the law may not be applied retroactively if it would impair contractual obligations or disturb vested rights. Id.
As we pointed out hereinabove, Act 3 contains no clear and unmistakable expression of legislative intent regarding retrospective application. After noting this lack of express legislative intent, two appellate court cases from the Court of Appeal, First Circuit, have considered the retroactivity of Act 3. Moore v. Safeway, Inc., 95-1552, 1996 WL 684184, ___ So.2d ___ (La.App. 1 Cir. 11/22/96); Thornhill v. State, Dept. of Transp. & Dev., 95-1950 (La.App. 1 Cir. 6/28/96); 676 So.2d 799. In Moore, the appellate court declined to express an opinion regarding the amendments to La.Civ.Code art. 2323, but stated that the amendments to La.Civ.Code art. 2324, the other codal article included in Act 3, were substantive and had prospective application only. In Thornhill, another panel from the First Circuit construed Act 3's amendments to La.Civ.Code arts. 2323 and 2324 as substantive and applied them prospectively only.
After carefully considering Act 3, we find that the legislative amendment of La. Civ.Code arts. 2323 was procedural legislation. Act 431 of 1979 amended and reenacted La.Civ.Code arts. 2103, 2323, and 2324 to usher a comparative fault system into Louisiana. This act eliminated the doctrine of contributory negligence and provided the framework for a comprehensive scheme of loss apportionment in multi-party litigation. Cole, 599 So.2d 1058. Since the adoption of a pure comparative fault system, it has been the task of the factfinder to allocate shares of negligence. Socorro v. City of New Orleans, 579 So.2d 931 (La.1991).
Viewing the applicability of Act 3 to the case sub judice, it is clear that the substantive right to allocate fault was created in 1979 with the introduction of comparative fault. As such, Act 3 simply delineates a method for enforcing that substantive right as particularly applied to the statutory employer.
Accordingly, we conclude that the legislative changes reflected in Act 3 are procedural, and can be applied retroactively. Thus, we find that employer fault must be quantified in the present case, as indicated in conformity with the amendment to La.Civ.Code art. 2323. Accordingly, we find that the trial court and court of appeal erred in ordering *184 Blaney and USF & G to strike the allegations of employer fault from their answer.
For the reasons assigned, the judgments of the trial court and the court of appeal are reversed and this case is remanded for further proceedings in accordance herewith.
REVERSED AND REMANDED.
CALOGERO, C.J., concurs and assigns reasons.
CALOGERO, Chief Justice, concurring.
I agree with the majority that the 1996 legislative amendment of Civil Code article 2323 effected only a procedural change to the article, thereby permitting the amended article to be applied retroactively in this case, which has not yet been tried. I write separately, however, to emphasize that the retroactive application of article 2323 to the instant case will accomplish nothing more than permitting the quantification of the statutorily immune employer's fault, if any. The issue of whether the quantification of the employer's fault can be used to reduce the amount that plaintiff may recover from other non-immune defendants is reserved for another day, when we might address a case where a statutorily immune employer has been found, after trial on the merits, to be partially at fault for a plaintiff-employee's injuries. For these reasons, I respectfully concur.
NOTES
[*] Lemmon, J. not on panel. Rule IV, Part 2 § 3.
[1] W96-588 (La.App. 3 Cir. 7/11/96), an unpublished writ ruling of the Louisiana Court of Appeal, Third Circuit.
[2] No. 96-CC-2075 (La.11/15/96); 682 So.2d 745.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/3341996/
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] MEMORANDUM OF DECISION ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT #117
Plaintiff and the passengers in his vehicle claim to have been injured by a collision caused by the alleged tortfeasor Heinz, Jr. Of more direct relevance to this summary judgment motion, however, is the fact that plaintiffs allege their injuries were a direct result of Heinz, Jr. having been served alcohol while intoxicated1 by the co-defendants, who are affiliated with Teezer's Cafe.2
Permittee Hatem has filed a motion for summary judgment on counts thirteen through twenty as they apply to her on the ground that there are no genuine issues of fact, and that as the permittee of Teezers, she could not be liable as a matter of law under § 30-102 or for reckless service of alcohol to Heinz, Jr. The plaintiffs have filed an objection and both Hatem and the plaintiffs have filed replies and surreplies.
A. Liability Under the Dram Shop Act
CT Page 14043
Hatem argues that she is not liable under § 30-102, since she is not in a position to effect a change in the alcohol policies of Teezers. Hatem also contends that she was not in a position to terminate an employee of Teezers who sold alcohol to a patron who was already intoxicated, based on the fact that she is not an owner of Teezers but only a part-time bartender. Hatem argues that although she is designated as a permittee, she in fact is only named as such due to that fact that she has no criminal history.
The plaintiffs argue that there is a question of fact concerning whether Hatem had the authority to hire and fire Teezer's employees. The plaintiffs also argue that pursuant to § 30-102, a permittee is liable as a "seller" of alcoholic beverages even though the permittee does not personally serve patrons. The plaintiffs also rely on other regulations which impose liability on permittees for the actions of their agents or employees. Hatem responds by arguing that the status of "permittee" does not automatically render one so designated personally liable under § 30-102. Rather, Hatem argues, whether a permittee is liable under the statute can only be determined on a case by case basis.
Hatem avers that she became permittee of Teezers in early 1997 because she has no criminal record. (Motion For Summary Judgment, Affidavit of Pamela Hatem, ¶ 4). The plaintiffs have submitted a copy of a Department of Consumer Protection — Liquor Division form dated August 21, 1998, which lists Pamela Hatem as the permittee and a backer of Teezers. (Plaintiff's Supplemental Reply). The form is signed by Pamela Hatem, and indicates that there is no change regarding the status of permittee for Teezers. (Id.) Also supplied is a Department of Liquor Control form dated February 25, 1995 which substituted Pamela Hatem as the permittee of Teezers. (Documentation In Support of Objection To Motion For Summary Judgment). This form, which is signed by Hatem, indicates that the backer vested in Hatem "full authority and control of said premises and the conduct of all permit business thereon." (Id.). This 1995 representation contradicts sworn statements made by Hatem in her current affidavit in support of the motion for summary judgment, where Hatem avers that she has no control over the premises or employees at Teezers. (Affidavit of Pamela Hatem, ¶ 13).
"It is true that a permit to sell liquor is a privilege, and by engaging in the liquor business, the permittee `assumes of CT Page 14044 necessity the risk of a great variety of situations which could impose liability upon him.' Pierce v. Albanese, 144 Conn. 241,252, 129 A.2d 606 (1957). Among this `great variety of situations,' for instance, are actions that arise under the Dram Shop Act, General Statutes § 30-102, under which a permittee may be held liable as a `seller' of alcoholic beverages to an intoxicated person, and therefore liable for injuries received suffered by third parties `in consequence of such intoxication,' even if the permittee or his or her agents did not sell or serve alcohol to the intoxicated person. See Pierce v. Albanese,supra, [141 Conn.] 252; Price v. Roy B. McHugh Post 4740 VFW,
[Superior Court, judicial district of Hartford/New Britain at Hartford, Docket No. 383863 (January 18, 1991, Purtill, J.) (3 CONN. L. RPTR. 179, 180-81)]. Thus, a permittee, where providedby statute, may be held responsible for some injuries simply by his holding a permit." Kendrick v. Daniel's. Inc., judicial district of Hartford/New Britain at Hartford, Docket No. 365929 (April 20, 1992, Wagner, J.) (6 CONN. L. RPTR. 322, 323).
Hatem has not disputed the fact that she is the permittee of Teezers, and the plaintiff's assertion that she was the permittee at the time of the accident has been shown by other documents. Hatem has failed to produce any authority to support her contention that although she serves as the permittee of Teezers on paper, she did not exercise the powers of permittee and therefore should not be held liable under § 30-102. As the permittee of Teezers, Hatem is considered a "seller" for purposes of § 30-102. See Price v. Roy B. McHugh Post 4740 VFW, supra,3 CONN. L. RPTR. 181, relying on Pierce v. Albanese. Accordingly, Hatem's motion for summary judgment as to counts thirteen through sixteen of the complaint are denied.
B. Reckless Service of Alcohol
Hatem argues that since she is not the owner of Teezers, she can only be found liable for recklessly serving alcohol if she personally served alcohol to Heinz on the day of the accident. Hatem also argues that a permittee can only be held liable based on the acts of his or her agents, servants and/or employees who act recklessly in serving alcohol to intoxicated patrons. Hatem contends that because she herself is merely an employee, she should not be vicariously liable for the actions of other employees.
The plaintiffs argue that whether Hatem has the authority to CT Page 14045 regulate other employees' conduct is a factual question which is in dispute. The plaintiffs contend that since Hatem may have the authority to hire and fire employees, she may be liable for her employees' reckless service of alcohol to Heinz. Hatem has responded that although she may have had the power to hire and fire employees by virtue of the fact that she is the wife of the corporate backer's president, she did not exercise this power.
Hatem admits that she is the permittee of Teezers. (Affidavit of Pamela Hatem, ¶ 4). She further avers, however, that she is a part-time bartender, has no say in creating alcohol policies at Teezers, has no agents who are under her authority at Teezers, does not control the scheduling, hiring or firing at Teezers and does not own Teezers. (Affidavit of Pamela Hatem, ¶¶ 3,10-15).
Victor Orr testified that at the time of the accident, he was the manager of Teezers. (Motion For Summary Judgment, Deposition of Victor Orr, p. 13). When faced with a problem relating to his managerial duties, Orr seeks the advice of Edward Hatem. (Deposition of Victor Orr, p. 15). Orr described Pamela Hatem's duties with Teezers as "bartender and the permittee . . . She orders beer and liquor, stuff like that." (Deposition of Victor Orr, p. 63). When specifically asked whether Hatem has the right to hire and fire other employees, Orr answered no. When asked the same question again immediately thereafter, he answered that Hatem did have the authority to hire and fire other employees, although Orr characterized the task of hiring and firing as basically his own duty. (Deposition of Victor Orr, p. 63).
A genuine issue of material fact exists as to whether Pamela Hatem acted or was authorized to act as an employer at Teezers. This dispute is not only patent on review of all the evidence at hand but within the statements of Hatem. Therefore, the court cannot determine whether Hatem may be held vicariously liable for the actions of the employees of Teezers. Accordingly, Hatem's motion for summary judgment as to counts seventeen through twenty is denied.
NADEAU, J.
|
01-03-2023
|
07-05-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/1562319/
|
4 F.2d 355 (1925)
MILLER, Alien Property Custodian, et al.
v.
HERZFELD.
No. 3197.
Circuit Court of Appeals, Third Circuit.
February 26, 1925.
Walter G. Winne, U. S. Atty., of Hackensack, N. J., and Dean Hill Stanley and Adna R. Johnson, Jr., both of Washington, D. C., for appellants.
Harrison & Roche, of Newark, N. J. (Joseph H. Choate, Jr., of New York City, of counsel), for appellee.
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
DAVIS, Circuit Judge.
This is an appeal from a final decree adjudging that certain property held by the Alien Property Custodian belonged to Felix Herzfeld, and directing the plaintiffs in error, defendants below, to transfer and deliver the property to him.
Joseph Herzfeld was born in Germany, but became an American citizen and was admitted to practice law at the bar of the state of New York in January, 1881. He practiced for a while, but subsequently went to Germany, became a German citizen, and a member of the Reichstag. He had considerable property, consisting largely of stocks and bonds, in the United States, which was held by the New York brokerage firm of Herzfeld & Stern. "Herzfeld" was his brother, Felix Herzfeld. On February 6, 1917, three days after the severance of diplomatic relations between the United States and Germany, Joseph Herzfeld sent the following radiogram to Herzfeld & Stern: "Transfer account Felix." The firm transferred the account on their books, held for Joseph Herzfeld, to Felix Herzfeld. After the United States entered into the war with Germany, and it became necessary to report property held for alien enemies, Felix Herzfeld consulted counsel as to what he should do with the property transferred to him pursuant to the radiogram. He had nothing to indicate the intention of his brother, except the radiogram. Counsel advised him to report it as held in trust for his brother until the contrary appeared. This he did. Subsequently, upon demand, he transferred and delivered the property to the Alien Property Custodian.
After the war, Felix Herzfeld, in accordance with the provisions of section 9 of the Trading with the Enemy Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115½e), filed with the Alien Property Custodian a notice under oath of his claim to the property and instituted suit in the District Court to establish his title to it. Joseph Herzfeld testified that it was his intention, *356 in sending the radiogram, to make an absolute gift of the property to his brother; that it was his, and no one else had any interest in or title to it. The court decreed that the property belonged to Felix Herzfeld and directed that it be transferred to him. The defendants appealed from that decree.
The defendants contend that, assuming that Joseph Herzfeld intended to give the property to his brother, his intentions failed, because it was not accepted before it was seized by the Alien Property Custodian; that the beneficial ownership of the property was therefore, at the date of the seizure, in Joseph Herzfeld, and acceptance afterward cannot give title to Felix Herzfeld.
It has long since been firmly established in England that, while a man may not be made to accept a gift which he does not desire to possess, yet, when the gift has been made, it vests in him, subject to his repudiation, and remains vested until he repudiates it. Standing v. Bowring, 31 Chancery Division, 282, 286. This rule has been followed with practical uniformity in the United States. Jones et al. v. Kerr, 59 Kan. 179, 181, 52 P. 429; Bangs v. Browne, 149 Mich. 478, 482, 112 N. W. 1107; In re Bell's Estate, 150 Iowa, 725, 729, 130 N. W. 798.
In order to constitute a valid gift, there must be, first, an intention on the part of the donor to make a delivery or transfer of the thing given to the donee; and, second, an acceptance. It is not necessary, however, that the acceptance be contemporaneous with the gift in order that title may pass. When there is doubt as to whether or not the transfer was intended as a gift, the subsequent declarations of the alleged donor may be sufficient proof to show the nature of the transaction. Doty v. Willson, 47 N. Y. 580; Beaver v. Beaver et al., 117 N. Y. 421, 428, 22 N. E. 940, 6 L. R. A. 403, 15 Am. St. Rep. 531; Van Cleef v. Maxfield, 196 App. Div. 734, 739, 188 N. Y. S. 322.
Whether or not as a final fact Joseph Herzfeld intended the transfer of this property as an absolute gift, in which he has no interest, present or future, may be questioned, but that he so testified may not be questioned, and there is nothing to impeach his testimony. Felix Herzfeld did the perfectly natural thing in consulting counsel as to what to do with the securities transferred to him, and his counsel, in view of all the circumstances, advised him wisely. He did not assume absolute ownership of the property, but he was always willing to accept it as a gift, and has done so. It has not been shown that the learned District Judge committed error. The testimony, on the contrary, indicates, if it does not force the conclusion, that the transfer constituted a gift, and that title passed to Felix Herzfeld at the time of the transfer, and was in him when the property was seized by the Alien Property Custodian. He is therefore entitled to immediate possession of it.
The decree of the District Court is affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1875675/
|
458 F. Supp. 252 (1977)
Alta CHRAPLIWY et al., Plaintiffs,
v.
UNIROYAL, INC., et al., Defendants.
Civ. No. 72 S 243.
United States District Court, N. D. Indiana, South Bend Division.
May 31, 1977.
*253 *254 *255 *256 *257 Thomas R. Ewald, Washington, D.C., Thomas R. Fette, St. Joseph, Mich., R. Wyatt Mick, Jr., Mishawaka, Ind., James F. Groves, South Bend, Ind., for plaintiffs.
Don G. Blackmond and Timothy W. Woods, Jones, Obenchain, Johnson, Ford, Pankow & Lewis, South Bend, Ind., Harry N. Turk, Arthur, Dry & Kalish, New York City, Rody P. Biggert and Gerald D. Skoning, Seyfarth, Shaw, Fairweather & Geraldson, *258 Chicago, Ill., Harley M. Kastner and Charles R. Armstrong, Akron, Ohio, James J. Olson, Mishawaka, Ind., for defendants.
MEMORANDUM
GRANT, District Judge.
I INTRODUCTION
On 28 November 1972, twenty-six named plaintiffs brought this suit under 42 U.S.C. § 2000e, [the "Act"],[1] individually and on behalf of other female employees, against the Uniroyal Corporation and their collective bargaining representative, Local Union No. 65, alleging various discriminatory employment practices on the basis of sex. Jurisdiction is founded upon 42 U.S.C. § 2000e-5(f)(1).
On 4 September 1974, plaintiffs filed a motion for summary judgment on all issues of class liability and a motion for a preliminary injunction. Approximately two years later, Uniroyal filed a cross-motion seeking summary judgment with respect to four specific matters at issue. All motions and supporting briefs have been timely filed with the court.
1. Motions for Summary Judgment
Summary judgment should only be entered when the pleadings, depositions, answers to interrogatories, affidavits, and admissions filed in the case "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". Rule 56 F.R.C.P. Under this rule the movant bears the heavy burden of demonstrating the absence of all material factual issues; furthermore, all factual uncertainties shall be resolved in favor of the non-moving party. Rose v. Bridgeport Brass Co., 487 F.2d 804, 808 (7th Cir. 1973); Albert Dickinson Co. v. Mellos Peanut Co., 179 F.2d 265, 268 (7th Cir. 1950). As for cross-motions for summary judgment, see 10 Wright & Miller, Federal Practice & Procedure, § 2720 p. 459 (1973).
This court, however, does not begin with a clean slate. On 5 July 1973, the late Judge Beamer[2] entered partial summary judgment against Uniroyal on the following matters:
(1) The company has conducted layoffs in the Mishawaka plant on a segregated basis according to sex;
(2) At all times up to and including 1970, defendant company paid new employees at the plant according to discriminatory starting pay rates on the basis of sex, and
(3) Defendant company refuses to consider female employees for assignment, transfer, or promotion to jobs which were restricted to male employees only, regardless of the seniority or qualifications of the female employees. Those jobs are listed in plaintiffs' requests to admit facts filed 2 March 1973.[3]
This order was based upon the Company's failure to respond to plaintiffs' requests for admissions in accordance with Rule 36, F.R.C.P. There has been much discussion by the parties concerning the significance of this order. Having considered the respective arguments, the court concludes that Judge Beamer's findings merely establish in plaintiffs' favor a prima facie case of sex discrimination which defendant may seek to now justify. The 5 July 1973 order, therefore, will not be considered dispositive of the above issues unless no viable defense is presented by the Company. See, *259 Griggs v. Duke Power Co., 401 U.S. 424, 91 S. Ct. 849, 28 L. Ed. 2d 158 (1971).
This being a motion for summary judgment with respect to the issue of class liability, the court's inquiry must be limited to a comparison between the disparate effects, if any, that a particular employment practice has upon two groups or classes of individuals. The focus during the first stage of this bifurcated class action is "inter-class" as opposed to "intra-class" which, of course, is the proper inquiry during the second, or individual relief stage. The distinction must be clearly drawn at the outset since Uniroyal has, in many instances, raised arguments that would have the court examine the merits of individual claims. See, Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437, 443-44 (5th Cir. 1974). Before examining plaintiffs' motion for summary judgment, the court shall first examine several preliminary issues raised by Defendant Uniroyal and Defendant Local No. 65.
II UNIROYAL'S CROSS-MOTION FOR SUMMARY JUDGMENT
1. Alleged Discriminatory Layoffs
The Company first seeks a ruling that this court lacks subject matter jurisdiction with respect to claims of discriminatory layoffs occurring more than ninety days prior[4] to the filing of charges with the Equal Employment Opportunity Commission.
Beginning in November 1968, the Company began laying off several hundred employees over a two-year period as the plant's footwear divisions (which employed approximately 42% of the work force at the Mishawaka facility) were being closed and transferred to locations in the East. On 13 January 1970 plaintiffs filed charges with the EEOC specifically complaining that the layoffs were conducted in a discriminatory fashion to the detriment of female employees; therefore, the applicable cut-off date is 15 October 1969 (ninety days prior to the filing of charges with the EEOC).
Generally, Title VII provides that to present a cognizable claim in federal court, an aggrieved party must first file a complaint with the EEOC within ninety days after the alleged unlawful employment practice has occurred. This basic limitation, however, may be extended (or tolled) in those instances where the alleged discriminatory conduct is considered to be a "continuing violation" of the Act. Robinson v. Lorillard Corp., 444 F.2d 791 (4th Cir. 1971); Cox v. United States Gypsum Co., 409 F.2d 289 (7th Cir. 1969).
Here, Uniroyal contends that individual claims which allege discriminatory layoffs prior to 15 October 1969 should now be dismissed. It is defendant's contention that such layoffs are not "continuing violations" of Title VII.
This is the second time Uniroyal has advanced this argument before the court. On 23 March 1973 Judge Beamer, in an order denying Uniroyal's motion to dismiss and/or strike portions of plaintiffs' complaint, rejected the Company's position:
Finally, defendant contends that the claims of discriminatory layoffs . . . are not continuing violations and, therefore, only eleven of the plaintiffs have made a timely presentation of this claim to the EEOC. As noted above . . . the court must assume that this is a proper class action and, accordingly, all of the plaintiffs need not have made a timely presentation of this charge. Oatis v. Crown Fellerback Corp., 398 F.2d 496 (5th Cir. 1968); Bowe v. Colgate-Palmolive Co., 416 F.2d 711 (7th Cir. 1969). Therefore, we need not reach the question of whether such charges constitute continuing violations.[5]
The court refuses to set aside Judge Beamer's earlier determination. However, the court is unable to agree with plaintiffs that the issue raised by the Company is wholly immaterial to this case. Whether or not the tardy claims are barred by the statutory limitation is a question which the *260 March 23rd order, and cases cited therein, did not reach. Consequently, the court must reserve judgment on this matter until the individual relief stage of this case when it shall be appropriate for the court to conduct an "intra-class" examination of individual claims.
2. Duty of Affirmative Action
Uniroyal next asks for a ruling that it did not violate Title VII with respect to plaintiffs' allegations that subsequent to November 1971 the Company failed to adopt a credible policy of equal employment opportunity.
The Company maintains that an employer has no obligation under the Civil Rights Act of 1964 to fashion and implement an affirmative action program unless so ordered by a judicial decree. Defendant's claim has no merit. See, Local 189, United Papermakers & Paperworkers, A.F. L.-C.I.O., C.L.C. v. United States, 416 F.2d 980, 987-91 (5th Cir. 1969); Myers v. Gilmore Paper Co., 392 F. Supp. 413, 420 (S.D. Ga.1975); Stevenson v. International Paper Co., 352 F. Supp. 230 (S.D.Ala.1972); United States v. Central Motor Lines, Inc., 338 F. Supp. 532 (W.D.N.C.1971); United States v. Virginia Electric & Power Co., 327 F. Supp. 1034 (E.D.Va.1971); and Irvin v. Mohawk Rubber Co., 308 F. Supp. 152 (E.D. Ark.1970). The more difficult question now facing the court is whether Uniroyal breached its duty of affirmative action. As a practical matter, that issue cannot be determined until the full extent of Uniroyal's discriminatory practices before November 1971, if any, is established. The matter shall be examined with respect to plaintiffs' motion for summary judgment.
III UNION'S BRIEF IN OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Apart from alleging the existence of factual issues requiring trial, the Union has set forth various reasons why plaintiffs, as a matter of law, cannot succeed in their effort. Plaintiffs' motion states that:
Contrary to its duty the defendant Local No. 65, United Rubber Workers, in its agreements with Uniroyal has discriminated against the female members of its collective bargaining unit, including all of the dues-paying female members of the Local, by negotiating pay rates for the Mishawaka plant which discriminate against female workers as a class and by agreeing to discriminatory bidding, bumping, and disqualification rules that perpetuate segregation and discrimination against the female employees it has the duty to represent. The defendant union has acquiesced while Uniroyal has maintained a segregated system of employment that has discriminated against the female members of its collective bargaining unit as a class with respect to job assignments, promotions, transfers, layoffs, recalls, and terminations.
The Union's first defense is that any and all discriminatory employment practices were solely the result of Uniroyal's policies and procedures. Without citing any authority, the Union submits that acquiescence by a union to an employer's unlawful employment practices is a valid defense in a Title VII action. However, all authorities located by the court have reached the opposite conclusion. For example, in Myers v. Gilman Paper Co., supra, the court's memorandum reads as follows:
In general, the defendant Unions argue that they took no part in any discriminatory practices prior to or after 1965, and that Gilman Paper Corporation was solely responsible for all racial discrimination in employment, assignments, promotions, and transfers . . .
Assuming, without finding, that Gilman was solely responsible for all racial discrimination in employment, assignments, promotions, and transfers prior to and after 1965, that fact raises no defense for the Unions. The essence of the plaintiffs' claim against the Unions is that the collective bargaining agreements tended to perpetuate and, in fact, perpetuated past discrimination, thus constituting present discrimination.
*261 Recent decisions by the Court of Appeals for the Fifth Circuit leave this Court with the clear understanding that Title VII, as construed in this circuit, places an affirmative duty on labor unions, as well as employers, to take corrective steps to prevent present discriminatory practices, to remove impediments that perpetuate past discrimination, and to place discriminatees into their "rightful place". (Citations omitted.)
Id. at 419-420; see also, Johnson v. Good-year Tire & Rubber Co., Synthetic Rubber Plant, 491 F.2d 1364, 1381-82 (5th Cir. 1974); and Machlin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69 at 79, 478 F.2d 979 at 989 (1973). Furthermore, the Union's implication that it acted at all times in good faith is inconsequential under the Act. Griggs v. Duke Power Co., supra, 401 U.S. at 432, 91 S. Ct. 849.
The Union next challenges on three grounds the plaintiffs' allegation that the Local failed to represent its membership in a fair manner as mandated by the National Labor Relations Act, 29 U.S.C. § 158 (1970). See Steele v. Louisville & N. L. Co., 323 U.S. 192, 65 S. Ct. 226, 89 L. Ed. 173 (1944). Relying upon Miranda Fuel Co., 140 N.L. R.B. 181, 51 L.R.R.M. (BNA) 1584 (1962) and Local Union No. 12 United Rubber Workers v. N.L.R.B., 368 F.2d 12 (5th Cir. 1966), the Local first argues that plaintiffs' claim should be presented before the National Labor Relations Board rather than this court. In other words, the Union maintains that the Board's jurisdiction pre-empts this court of the authority needed to entertain the instant matter.
However, after Miranda Fuel and Local Union No. 12 were decided, the Supreme Court, in Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967), had this to say about the pre-emption doctrine:
A primary justification for the preemption doctrine the need to avoid conflicting rules of substantive law in the labor relations area and the desirability of leaving the development of such rules to the administrative agency created by Congress for that purpose is not applicable to cases involving alleged breaches of the union's duty of fair representation. The doctrine was judicially developed in Steele and its progeny, and suits alleging breach of duty remained judicially cognizable long after the NLRB was given unfair labor practice jurisdiction over union activities by the L.M.R.A. Moreover, when the Board declared in Miranda Fuel that a union's breach of its duty of fair representation would henceforth be treated as an unfair labor practice, the Board adopted and applied the doctrine as it had been developed by the federal courts.
Thus, the court has the power to adjudicate the § 158 claim.
The Union further argues, without supporting authority, that the representational duty is in some way limited to unions which have historically refused membership to black individuals. The court is unable to discern any such limitation. While many of the reported cases have involved racially segregated unions, the Steele decision makes clear that the statutory duty extends to all labor organizations defined by N.L. R.A., and is designed to eliminate all irrelevant and invidious classification schemes, including discrimination on the basis of sex. Cf. Adkinson v. Owens-Illinois Glass Co., Inc., 10 FEP Cas. 710 (N.D.Ga.1975); and Glus v. Murphy Co., 329 F. Supp. 563 (W.D. Pa.1971).
Lastly, the Union contends that plaintiffs' claim must fail since plaintiffs did not exhaust their intra-union remedies before commencing this suit. As a general rule, an aggrieved party must first resort to such remedies before his claim may be adjudicated in federal court. The purpose of this rule is well stated in Ruficka v. General Motors Corp., 523 F.2d 306, 311 (6th Cir. 1975):
The reason for this requirement is that intra-union remedies are part and parcel of the industrial in-house procedure for settling labor disputes. The primary benefit of requiring initial submission of employee complaints against a union . . . is that the internal machinery can settle difficulties short of court action.
*262 It is quite apparent in this case that to find in defendant's favor would not effectuate the purpose of the exhaustion requirement. The conciliatory mechanisms of Title VII have failed to produce amiable results. To now separate the N.L.R.A. claim and return the plaintiffs to their union remedies in hope of reaching an accord would certainly be a fruitless endeavor. Therefore, the court shall now consider the instant claim, together with those arising under Title VII. See, Jones v. Trans-World Airlines, Inc., 495 F.2d 790 (2d Cir. 1974).
IV PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
1. Pre-Act Employment Practices
Plaintiffs begin their motion and brief arguing that prior to the effective date of Title VII, 2 July 1965, Uniroyal openly segregated job opportunities according to an individual's sex. Specifically, plaintiffs maintain that Uniroyal (1) classified each job within the plant as a "male" or "female" job; (2) operated a segregated personnel office on the basis of sex; (3) paid male employees a higher wage rate than female employees, and (4) kept seniority lists for each department within the plant on a segregated basis according to sex.
It is today well settled that the provisions of Title VII are not retroactive in effect; discriminatory employment practices happening prior to 2 July 1965 and ending thereafter will not, when standing alone, give rise to a cause of action. See, e. g., James v. Stockham Valves & Fittings Co., 394 F. Supp. 434, 493 (D.Ala.1975). However, Title VII places an affirmative duty upon an employer to rectify the current effects of wrongful discrimination which existed before passage of the Act. See, e. g., Myers v. Gilmore Paper Co., supra, at 420. Subsequent to 2 July 1965, then, failure on the part of an employer to voluntarily remove the discriminatory effects of its pre-Act employment practices will constitute an encroachment of Title VII, provided the aggrieved party can establish a causal nexus between past discrimination and present conditions of employment. James v. Stockham Valves & Fittings Co., supra, at 493. For this reason, the Company's employment practices and policies in effect before 1965 are relevant to this case.
When discrimination in employment practices and conditions is alleged, the plaintiff must first establish a prima facie case by showing disparate treatment between two classes of individuals. Generally, statistical evidence is used to accomplish this task. Ibid. at 492. Assuming the plaintiff meets this challenge, the burden then shifts to the defendant to justify its actions. Unintentional discriminatory practices as well as discrimination founded upon a compelling "business purpose" are viable defenses under the Act. See, Kober v. Westinghouse Electric Corp., 480 F.2d 240 (3d Cir. 1973); and Griggs v. Duke Power Co., supra, 401 U.S. at 432, 91 S. Ct. 849, respectively.
In the present case, Uniroyal does not dispute plaintiffs' allegations of discriminatory conduct described above; it does, however, seek to justify the "male"-"female" job classification scheme. According to the Company, the scheme resulted from the personal preferences of female employees to perform the less physically demanding "female" jobs as opposed to the more strenuous tasks of a "male" job. Defendant has submitted several affidavits of employees which state, in essence, that no female worker ever expressed a willingness to hold a traditionally designated male position. The Company, therefore, concludes that the "concentration" of female workers in certain departments within the plant was the result of factors other than Uniroyal's employment practices and policies.
The question which immediately arises is whether an employer, whose female employees prefer to hold the lower paying and less strenuous positions, is in violation of federal law. The obvious answer to this question is no, provided all qualified employees possess the unfettered right to seek any job available within the plant. That situation did not exist at Uniroyal *263 prior to 1965. The record clearly shows that defendant deliberately constructed a system of classifying jobs in which the determinative factor was an individual's sex and not his or her abilities. Although ostensibly based upon good faith, Uniroyal's presumption that all female workers could perform none of the male jobs because of their supposed physical limitations is precisely the evil Congress had in mind when it enacted Title VII. See, e. g., Phillips v. Martin Marietta Corp., 400 U.S. 542, 91 S. Ct. 496, 27 L. Ed. 2d 613 (1972); Willingham v. Macon Telegraph Publishing Co., 507 F.2d 1084 (5th Cir. 1975); and Sporgis v. United Air Lines, 444 F.2d 1194 (7th Cir. 1971).
Uniroyal's conduct is clearly outside the purview of 42 U.S.C. § 2000e-2(e) which provides an exception to the general prohibitions of Title VII when "sex . . is a bona fide occupational qualification" [BFOQ]. Recently, the same defense came before the Ninth Circuit Court of Appeals in Rosenfeld v. Southern Pacific Co., 444 F.2d 1219 (9th Cir. 1971). In that case the court rejected defendant's BFOQ argument, stating at pages 1224-25:
. . . on the basis of a general assumption regarding the physical capabilities of female employees, the company attempts to raise a commonly accepted characterization of women as the "weaker sex" to the level of a BFOQ . . . Based on the legislative intent and on the Commission's interpretation, sexual characteristics, rather than characteristics that might, to one degree or another, correlate with a particular sex, must be the basis for the application of the BFOQ exception. See Developments in the Law Title VII, 84 Harv.L.Rev. 1109, 1178-1179 (1971). Southern Pacific has not, and could not allege such a basis here, and section 703(e) thus could not exempt its policy from the impact of Title VII. There was no error in the granting of summary judgment on this issue.
There being no indication in the present case that the sexual characteristics of an employee are crucial to the successful performance of a "male" job (as would be the case, for example, with the need for an actor or actress) the court must similarly reject defendant's contention. See, 29 C.F.R. § 1604.1(a). The Company's position is strengthened neither by the allegation that it did not intentionally discriminate on the basis of sex, Griggs v. Duke Power Co., supra, 401 U.S. at 432, 91 S. Ct. 849, nor the fact that no female employee ever challenged the system by trying to obtain a male job. See Sagers v. Yellow Freight System, Inc., 388 F. Supp. 507, 515 (N.D.Ga. 1973); Pittsburgh Press Co. v. Pittsburgh Comm'n on Human Relations, 4 FEP Cas. 325, 329 (Pa.Cmwlth.1972). Rodriguez v. East Texas Motor Freight Co., 505 F.2d 40, 58 (5th Cir. 1974); Ostapowicz v. Johnson Bronze Co., 369 F. Supp. 522 (W.D.Pa.1973).
Defendant has not challenged the remaining allegations of discriminatory conduct. Consequently, the court finds that prior to 2 July 1965, Uniroyal segregated jobs at the Mishawaka facility on the basis of sex; maintained a segregated personnel office on the basis of sex; kept segregated seniority lists according to sex; and paid male employees a higher wage rate than female employees. As stated above, however, such findings do not constitute violations of Title VII unless plaintiffs establish a nexus between the discriminatory practices just described and post July 1965 employment conditions. To that matter the court now turns.
2. 1965-1970
Although the Civil Rights Act of 1964 became effective July 2nd of that year, the provisions of Title VII did not take effect until 2 July 1965. The enforcement delay was permitted so that employers would have sufficient time in which to familiarize themselves with the new legislation as well as to remove from their employment systems all unjustified forms of segregation. In this case, plaintiffs claim that from the effective date of Title VII until the end of 1970, Uniroyal maintained the same segregated employment system which existed before passage of the Act. In their brief, *264 plaintiffs have enumerated eight specific instances in which Uniroyal allegedly continued to discriminate against the class of female employees throughout the first five years of Title VII. Each allegation will be examined seriatim.
A The Alleged Segregated "A-B" System
The first issue before the court is whether the Company abolished the segregated "male-female" job classification system following the enactment of Title VII. Having considered the evidence, the court finds that Uniroyal's action had the effect of merely disguising the former discriminatory system. The only change discernable to the court is one of form; the traditionally designated "male" jobs were reclassified as "Class A" jobs, and the traditional "female" positions were reclassified as "Class B" jobs. Of significance is the fact that Uniroyal also began categorizing all employees on the basis of sex. All male workers were known as "A" workers and assigned to Class A jobs, and all female workers were known as "B" workers and assigned to Class B jobs.
Unsurprisingly, the statistical evidence overwhelmingly indicates that the new "A-B" system operated to restrict an employee's job opportunities to the same extent as before the enactment of Title VII.[6] Such evidence establishes for plaintiffs a prima facie case which defendant has not attempted to justify other than to say that the system was not intentionally designed with discriminatory consequences in mind, and that no female employee outwardly expressed a desire to hold a Class A job. However, as we have indicated before, such arguments do not present tenable defenses in a Title VII suit. See p. 11, infra. Plaintiffs are therefore entitled to a decree that Uniroyal's dual system of designating both employees and jobs within the plant was discriminatory on the basis of sex.
B Alleged Discriminatory Practices Regarding Job Bidding, Bumping and Promotion
Plaintiffs next seek a judgment that Uniroyal maintained unlawful bidding, bumping and promotion rules from 1965 through 1970. It appears that very little actually changed at the Mishawaka facility after Title VII went into effect. Under the Company's "A-B" system, no female employee ever held a traditionally designated "male" job during this period of time.[7]
Bidding Rules
The terms of the labor agreement then in force (1965-1970), provided that qualified employees were permitted to bid on jobs located anywhere in the plant; the agreement contained no reference to an individual's sex. Although seemingly innocuous, in operation this proviso presented an obstacle to female employees wishing to enter the Class A job market.[8]
When a particular job became available in his department, a plant foreman was required to categorize each vacancy as a Class A or Class B job. Employees desiring to bid on the job would have to act according to those designations since "A" jobs were filled by Mr. Edgar Kavanaugh, Supervisor of Male Employment, and the "B" jobs were filled by Mrs. Elizabeth Hoffer, Supervisor of Female Employment. See Part IV, 2-E. Thus, if a female worker wanted to bid on an "A" job, she would have to obtain that job through an office which has traditionally placed male workers in the plant and which, by its very name, gave the appearance of continued preferential *265 treatment. Female workers, therefore, would have to challenge Uniroyal's employment system in order to successfully bid on jobs historically held by men. The rules posed an uncertain risk to females, which members of the opposite sex solely because of their sex did not have to encounter. The graph below shows the discriminatory impact that the bidding rules had in the plant.
JOB BIDDING
1968-1970
Bids by Bids by
Jobs Total Male Female
Posted Bids Employees Employees
"Class A" 1,869 1,868 1
"Class B" 1,197 2 1,195
Bumping Rules
From 1965 through 1968,[9] the labor agreements at Uniroyal also provided that each employee affected by the shutdown of a product line or division had the option, regardless of sex, of (1) bumping a less senior employee on a job which the affected worker could perform within a reasonably short training period; (2) bumping a less senior employee on a job in which the former employee had previous experience; or (3) by accepting an "open" job located anywhere in the plant. When considered in isolation, the contractual bumping rules appear to be consonant with the demands of Title VII. However, when set against the discriminatory "A-B" system, the provisions also had the effect of restricting job opportunities on the basis of sex.
Before 1971, an incumbent employee seeking to bump into a Class A job did so by going through Mr. Kavanaugh's office. If, on the other hand, a worker wanted to bump into a Class B job, the request was channeled through Mrs. Hoffer's office. By its very nature, this system of filling different jobs and job opportunities through different offices labeled "male" and "female" is presumptively invalid. Cypress v. Newport News, 375 F.2d 648 (4th Cir. 1967). Once again, in order to move into a higher paying Class A job, a female worker would have to break precedent and challenge the traditional employment practices of Uniroyal. Male employees, on the other hand, did not have to undertake such a task (at least with respect to the "A" jobs). It is not surprising then, that no female employee successfully bumped into a Class A job until Frances Klaer did so in 1971.
For these reasons, the same result must also obtain in connection with Uniroyal's practice of promoting employees within the plant. Consequently, the court finds as a matter of law, that Uniroyal maintained discriminatory bidding and promotion rules from 1965 until and including 1970, and discriminatory bumping rules from 1965 to 1968, in violation of the Act's prohibition against sex discrimination.[10]
C Alleged Exclusion of Female Employees from Most of the Departments and Jobs in the Plant
It is plaintiffs' contention that following the enactment of Title VII, Uniroyal continued to exclude female employees from most of the departments in the plant. In June 1970, for example, defendant operated 89 departments of which 61 were restricted to male employees. Four departments were restricted to females; the remaining 24 departments contained both Class A and Class B jobs. The graph below portrays a prima facie case of discrimination.
*266
JUNE 1970
Department Employment Statistics by Sex
24 Male
Departments 61 Male 4 Female & Female
Male Employees 782 -0- 268
Female Employees -0- 25 370
___ ___ ___
Total Employees 782 25 638
___ ___ ___
Plaintiffs further maintain that defendant excluded female employees from most of the jobs in the plant. In 1969, for instance, the Company designated 1,251 jobs as "A" jobs and only 460 jobs as "B" jobs. Thus, female workers were restricted to one-fourth of the available jobs. Having advanced no justification for this statistical disparity (other than those resolved earlier in plaintiffs' favor), the court finds that due to discriminatory employment practices described above, Uniroyal wrongfully restricted female employees to particular departments and jobs solely on the basis of sex.
D Allegations that Uniroyal Paid Female Employees Less than Male Employees
Plaintiffs next seek a determination that Uniroyal paid female workers with Class B jobs a lower wage rate than male workers with Class A jobs, and that the reason for this differentiation was based solely upon sex. Evidence submitted by the plaintiffs for the year 1969, for example, clearly shows that in eight of Uniroyal's 14 plant divisions, the lowest paid male workers holding an "A" job received a higher wage rate than the highest paid female worker with a "B" job. Thus, in many instances, male employees, including new male employees, were paid a higher wage rate than their female counterparts.
Section 2000e-2(h) of the Act provides in pertinent part:
It shall not be an unlawful employment practice under this subchapter for any employer to differentiate upon the basis of sex in determining the amount of the wages or compensation paid or to be paid to employees of such employer if such differentiation is authorized by the provisions of section 206(d) of Title 29.
Section 206(d), or the Equal Pay Act, forbids wage discrimination "between employees on the basis of sex" when employees perform "equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions." Under this section, the court's initial inquiry is always: Are the jobs held by a male and a female substantially equal? Walker v. Columbia University, 407 F. Supp. 1370, 1374 (S.D.N.Y.1976); Shultz v. Kimberly-Clark Corp., 315 F. Supp. 1323, 1326 (W.D.Tenn. 1970). The statute requires an aggrieved party to demonstrate to the court that all factors other than sex are constant, such that the only variable which can possibly explain the wage differential is sex.
In this case, plaintiffs have failed to meet this threshold burden since there is no allegation that females performed tasks substantially similar to those of males. Because ". . . Congress did not intend to put . . . the courts in the business of evaluating jobs and determining what constitute[s] a proper differential for unequal work," movants' request for a decree in their favor must be denied at this time. Hodgson v. Corning Glass Works, 474 F.2d 226, 231 (2d Cir. 1973). This conclusion, however, does not preclude plaintiffs from showing that Uniroyal unlawfully prevented women from obtaining the higher paying positions. Hodgson v. Golden Isles Convalescent Home, Inc., 468 F.2d 1256 (5th Cir. 1972) (per curiam).
E Alleged Segregated Personnel Office
The court further finds that during the years 1965 through 1970, the Company continued to maintain a segregated employment office in the plant. Mr. Kavanaugh continued to serve as Supervisor of Male Employment and Mrs. Hoffer continued to serve as Supervisor of Female Employment. The Supervisor of Male Employment had personnel office responsibility for "A" workers and Class A jobs; Kavanaugh continued to conduct recruiting, hiring, job assignment, job bidding, promotions, transfers, layoffs, and recalls of all male employees with respect to the Class A jobs. On the other hand, the Supervisor of Female *267 Employment was responsible for "B" workers and Class B jobs; Hoffer continued to conduct recruiting, hiring, job assignment, job bidding, promotions, transfers, layoffs and recalls of all female workers with respect to the Class B jobs.
F The Segregated Seniority System
Under the "A-B" System existent in the plant from 1965 through 1970, Uniroyal continued to maintain seniority lists for each department on a segregated basis according to sex. Such a practice, when used to the detriment of a particular class of employees, will be violative of federal law unless sufficiently justified. It has often been repeated that:
[e]mployers which lay off female employees while retaining male employees with less seniority than the females commit unlawful employment practices if the discrimination against such females is on the basis of their sex.
See, Trivett v. Tri-State Container Corp., 368 F. Supp. 137, 141 (E.D.Tenn.1973) and cases cited therein. Allegations respecting illegal use of this seniority system will be examined in more detail below.
G The 1968-1970 Close-Down of the Footwear Divisions; Alleged Discriminatory Layoffs and Recalls on the Basis of Sex
(i) Layoffs
On 22 March 1968, Uniroyal publicly announced plans to transfer the production of waterproof and canvas footwear from Mishawaka to the Company's plants in Naugatuck, Connecticut, and Woonsocket, Rhode Island. The decision, calling for a phaseout of footwear production over a two-year period, was expected to have a direct and substantive impact upon Uniroyal's operations and employees. The employment picture at Uniroyal before the shutdown was as follows:
EMPLOYMENT BEFORE SHUTDOWN
Male Female Total
Employees in Footwear
Div. 562 802 1,364
Employees in Non-Footwear
Div. 1,152 529 1,681
_____ _____ _____
TOTALS 1,714 1,331 3,045
_____ _____ _____
The move, therefore, came at a time when 42% of Uniroyal's work force was employed in the footwear divisions and was expected to have a disproportionate impact on female employees since approximately 59% of all females working in the plant were assigned to footwear jobs, compared to only 30% of all male workers.
Plaintiffs maintain that female employees were discriminatorily laid off by the Company as the footwear divisions were in the process of being closed down. They claim that female employees having more seniority than males were laid off while junior male employees were retained in active employment; and at the same time new male employees were hired to fill Class A jobs. The crux of plaintiffs' claim is that female employees who were affected by the shutdown could not avail themselves of the many Class A job opportunities that were available to the junior men. Plaintiffs conclude that with fewer opportunities of active employment available to them, the plaintiff class was exposed to a greater risk of being laid off than were male employees.[11]
A determination as to the validity of this claim requires examination of the labor agreement then in effect, particularly the provisions respecting the discontinuation of a product line or division. Under the 1968 agreement, an employee who was affected by such events had several alternative courses of action available to him or her. Each employee, depending upon individual circumstances, could elect to (1) retire under the provisions of the Pension, Insurance, and Severance Pay Agreement; (2) terminate employment with the Company; (3) go on layoff and, if eligible, collect supplemental *268 unemployment benefits,[12] (4) bid on a "posted" job; (5) accept an "open" job; or (6) bump a less senior employee in accordance with Articles VII and VIII of the Wage Employee Agreement. However, considering the significant number of employees to be affected by the footwear shutdown and the fact that many workers would undoubtedly try to bump in order to remain actively employed there was great concern among Company officials that the bumping rules of Articles VII and VIII would seriously impair the overall operations of the plant. Based upon these fears, the Company and the Union mutually agreed upon a new set of bumping rules designed to minimize bumping by encouraging affected employees to go on layoff, quit, or retire; the determinative factor was "previous experience". The modified rules permitted employees having two or more years of seniority to bump less senior employees located anywhere in the plant, provided the affected worker had "previous experience" in the job then held by the junior employee.[13]
Thus, upon learning that his job would be affected by the footwear shutdown, a male employee met with Mr. Kavanaugh and a Union representative to discuss the various options available to him. It will be recalled that Kavanaugh's duties at this time included the selection and placement of all male employees for the Class A jobs. Thus, an affected male employee could elect to retire, quit, go on layoff, or try to stay actively employed by bidding, bumping into, or accepting another Class A job.
On the other hand, a female worker affected by the shutdown met with Mrs. Hoffer and a Union representative. Hoffer's duties under the "A-B" system complemented those of Kavanaugh; her responsibilities included the selection and placement of female employees for the Class B jobs. Thus, like her male co-workers, a female could choose to retire, quit, or go on layoff. But unlike the male worker, a female wishing to stay actively employed in the plant was restricted to seeking the "B" designated jobs. In short, Uniroyal's "A-B" employment system without regard to the bumping requirement of previous experience discouraged female employees from moving into 1,252 Class A jobs then present in the non-footwear divisions, thereby exposing the plaintiff class to a greater risk of layoff, termination, or retirement. As a result, female workers were being laid off by the Company while it retained junior male workers in the plant and hired 92 new male employees to fill openings in various Class A jobs.[14]
Additionally, the court finds that the modified bumping requirement of "previous experience" also had a discriminatory impact. Because of the fact that Class A jobs were held by male workers, only males could possibly have had experience needed to transfer into the remaining "A" jobs. The clause therefore had the effect of increasing a female's chance of layoff, etc., for now, in order to bump into an "A" job, she had to overcome not only the "A-B" designations, but also the requirement of previous experience.
(a) Business Necessity
Uniroyal maintains that during the phaseout of the footwear divisions, continuation *269 of its discriminatory transfer rules was required as a matter of "business necessity". If that be true, then plaintiffs' claims with respect to such discriminatory practices from 1968 to 1970 cannot stand. Griggs v. Duke Power Co., supra 401 U.S. at 431, 91 S. Ct. 849. Our first task is to define the proper standard by which to measure the Company's contentions.
Defendant urges the court to adopt the rationale espoused in Trivett v. Tri-State Container Corp., 368 F. Supp. 137 (E.D.Tenn. 1973). In that sex discrimination case, demand for defendant's products was reduced to the extent that layoffs were required. Although Tri-State maintained a plant-wide system of seniority, Class B female folders, who were senior to some of the male general floor helpers, were laid off while the men remained in the plant. Also, at this time, the Company hired new male workers as general floor helpers. The court rejected the women's claim that Tri-State's practices infringed upon their Title VII rights:
It appears to the Court that Tri-State had a valid judgmental decision to make concerning which employees should be laid-off during such slack periods. The lack of work occurred in the A&P department. General floor helpers could do whatever work of the class B folders as might be required, although management would be required to pay the general floor helpers 15¢ an hour more for services therein than would have been paid class B folders for the same work. On the other hand, class B folders were not qualified to do some of the heavier and higher classification work required of general floor helpers, if the latter were laid off. The Court finds, therefore, that the decision of Tri-State's management to lay off class B folders rather than general floor helpers with less seniority was for reasons other than the sex of the class B folders, and hence that there was no violation of the Civil Rights Act of 1964, Title VII, in the instance described.
Id. at 141.
The Trivett analysis is entirely too broad a standard for purposes of justifying discriminatory actions. Its holding would ostensibly exempt from the Act all employment decisions having a business purpose; but necessity, not purpose, is the proper test. United States v. N. L. Industries, 479 F.2d 354 (8th Cir. 1973). The sweeping definition suggested in Trivett would seriously undermine the policy of Title VII, which today represents the principal means of ensuring that an individual's ability will be the determinative factor in employment opportunities. If the Act is to remain a potent force against discriminatory employment practices, the defense must be narrowly construed and confined to those unusual instances where a segregative policy is absolutely essential to the achievement of a legitimate business need.
This is the rationale which underlies the test announced by the Fourth Circuit in Robinson v. Lorillard Corp., 444 F.2d 791 (4th Cir. 1971). There the court stated that:
The test is whether there exists an overriding legitimate business purpose such that the practice is necessary to the safe and efficient operation of the business. Thus, the business purpose must be sufficiently compelling to override any racial impact; the challenged practice must effectively carry out the business purpose it is alleged to serve; and there must be available no acceptable alternative policies or practices which would better accomplish the business purpose advanced, or accomplish it equally well with a lesser differential racial impact.
Id. at 798 (emphasis added);[15] see also, United States v. St. Louis-San Francisco Ry. Co., 464 F.2d 301 (8th Cir. 1972); United States v. Jacksonville Terminal Co., 451 *270 F.2d 418 (5th Cir. 1971); and United States v. Bethlehem Steel Corp., 446 F.2d 652, 662 (2nd Cir. 1971).
There can be no doubt that Robinson's three-pronged test represents the better view; however, a problem arises with respect to the burden of establishing the final portion of the defense (no acceptable alternative policy). The difficulty was explained and resolved fairly in Crockett v. Green, 388 F. Supp. 912 (E.D.Wisc.1975).
Literally applied, the "no alternative" approach to "business necessity" in the case law and the E.E.O.C. Guidelines, 29 C.F.R. § 1607.3, places upon an employer the practically impossible burden of proving an absolute negative, i. e., the nonexistence of any alternative procedures. A fair and preferable allocation of the burden of proof on the existence of alternatives would place upon the plaintiff the burden of initially proposing or suggesting reasonable alternative practices while leaving to the employer the ultimate burden of demonstrating that any suggested alternatives are not adequate substitutes for its present practices.
Id. at 920.
Since the court is now considering plaintiffs' motion for summary judgment, however, the ultimate burden of demonstrating the adequacy of a suggested alternative must also be shouldered by plaintiffs.[16] Rule 56, F.R.C.P. It is with these factors in mind that we turn to the allegations presented in this case.
The Company maintains that if employees affected by the footwear close-down had bumped in accordance with the pre-1968 transfer rules as written, the effect would have been the loss of business, severe economic losses, and consequently the loss of more jobs.
(b) Training Costs
Defendant's initial contention is that the implementation of nondiscriminatory transfer rules during the footwear shutdown would have been prohibitively expensive. The following graph is taken from the affidavit of Uniroyal's Manager of Industrial Engineering, William T. Bailey.
GRAPH NO. 1
1968 1969 1970
Adhesives NS[*] NS NS
Automats 5.3% 4.2% 2.8
Coated Fabrics (Incl.
Knitting) 4.5 3.2 .4
Custom Processing No Sales No Sales NS
Auto Foam & Foam
Specialties 20.9 19.1 2.3[**]
Engineered Systems
(Incl. Filatex) 17.2 752.6[**] 2.4[**]
ENSOLITE 6.0 2.4 .3
____ _____ ___
Weighted Average
Loss (NIAT) 9.2% 8.2% 2.5%
____ _____ ___
These projections are based upon the anticipated cost of having to train affected employees for their new positions; training costs for each commodity are set forth on the following page.
Defendant's first "business necessity" argument fails to raise a cognizable defense. Uniroyal's expectation of an additional $1,885,658.00 in expenses is premised upon the assumption that each affected worker would bump on the average of 2.8 times. Graph No. 2, Column III. As plaintiffs suggest, however, these expenses could have been significantly reduced without discriminating on the basis of sex by permitting all employees only one opportunity to bump. Such a plan would have reduced costs by an estimated $1,212,209.00. Training costs could have been further minimized by requiring employees to bump into those jobs where the average costs were low, and prohibiting employees from bumping into jobs where costs were high. Graph No. 2, Column V.
*271
GRAPH NO. 2
TRAINING COST BY COMMODITY[*]
================================
I II III IV V VI
Net Training Cost
Displaced Bumps (Including
% of Footwear Per Disqualification Scrap) Per Cost to
Commodity Population × Personnel × Occur. × Rate × Occur. = Commodity
1968 Knit Fabrics 9.0% 468 2.8 1.15 $ 367.78 $ 49,880
Coated Fabrics 6.6 468 2.8 1.15 2,083.24 207,193
Automats 10.5 468 2.8 1.15 453.34 71,733
ENSOLITE 7.3 468 2.8 1.15 430.86 47,398
KOYLON 23.8 468 2.8 1.15 1,272.60 456,426
Fuel Cells 38.4 468 2.8 1.27 477.04 304,855
Filatex 4.4 468 2.8 1.15 448.45 29,734
____ __________
TOTAL 1968 100.0% $1,167,224
1969 Knit Fabrics 9.0% 288 2.8 1.15 $ 367.78 $ 30,696
Coated Fabrics 6.6 288 2.8 1.15 2,083.24 127,506
Automats 10.5 288 2.8 1.15 453.34 44,144
ENSOLITE 7.3 288 2.8 1.15 430.86 29,168
KOYLON 23.8 288 2.8 1.15 1,272.60 280,877
Fuel Cells 38.4 288 2.8 1.27 477.40 187,745
Filatex 4.4 288 2.8 1.15 488.45 18,298
_____ __________
TOTAL 1969 100.0% $ 718,434
COMBINED 1968 & 1969 TOTAL $1,885,658[**]
==========
Using defendant's data, it appears that the adoption of a nondiscriminating bumping policy would have cost the Company less than $600,000, thereby reducing NIAT by roughly 3% in 1968, 2.8% in 1969, and .8% in 1970. The question, therefore, is whether Title VII may require an employer to withstand a 2.2% [(.03 + .028 + .008)/3] average reduction in NIAT over a three-year period in order that both male and female workers have the same employment opportunity available to them.
The court has examined many cases wherein defendants have similarly raised the cost factor as a defense. What evolves from these cases is the notion that dollar cost alone is an immaterial consideration under the business necessity doctrine, except when expenditures of monies may curtail operations to the extent that incumbent employees may lose their jobs.
The principle that employers who wrongfully discriminate must bear the cost of remedying that discrimination is exemplified in Johnson v. Pike Corp. of America, 332 F. Supp. 490 (C.D.Cal.1971). There the court noted that:
The sole permissible reason for discriminating against actual or prospective employees involves the individual's capability to perform the job effectively. This approach leaves no room for arguments regarding inconvenience, annoyance or even expense to the employer.
Id. at 495. (Emphasis added.)
Similarly, the Robinson court held "that avoidance of the expense of changing employment practices is not a business purpose that will validate the [discriminatory] effects of an otherwise unlawful employment practice". 444 F.2d at 800. See also, United States v. N. L. Industries, supra, at 366; and United States v. St. Louis-San Francisco Ry. Co., 464 F.2d 301, 310, 311 (8th Cir. 1972), Cf. 84 Harv.L.Rev., supra, at 1149-50. *272 In the case at bar there is no claim that incumbent employees would lose their jobs as a consequence of the additional expenses; hence, the court must reject the Company's initial contention.
(c) Decreasing Sales and the Possible Loss of Jobs
The record does show that in 1968 Company officials feared the consequences that mass bumping might have upon the sales of non-footwear products as hundreds of inexperienced laborers transferred into those divisions. Donald Frey, the Company's Manager of Industrial Relations, testified that:
. . . In the business we're in today it's a highly competitive business. And we deal a great deal with the motor industry. And the motor industry is notorious for not having a single source for parts for their cars. And you either supply them what they want at the time they want it or they'll go to another source. It can mean loss of business to you.
* * * * * *
Well, at the time we started the Footwear phaseout, approximately fifty per cent of the membership in Local 65 were in Footwear Operations, which would have meant that we would have affected every commodity in the plant adversely.
* * * * * *
Better than fifty per cent of our business was automotive at the time of the Footwear phaseout. . . . discounting the Footwear.
(Deposition of Donald Frey, pp. 18, 137-139.)
Frey also testified that more jobs may have been lost as a result of the pre-1968 bumping rules.
Although additional expenses and a decline in sales may, at least for accounting purposes, reduce NIAT by the same amount, a court must be sensitive to the differing impacts the two transactions may have. Depending upon the nature of a particular employer and his customers, plummeting sales may have weightier affects than extraordinary expenses. For example, if, because of a sudden drop in the efficiency of his workers, an employer is unable to supply the demands of his buyers, product sales will immediately fall and customers may be permanently lost. If the reduction in sales is substantial, it may mean a similar reduction in the size of the existing work force. Unlike extraordinary expenses, the impact of which is generally limited to the year in which it is paid or incurred, a decrease in sales volume may likely have more severe short-term and long-term affects and should, therefore, be accorded more significance under the business necessity defense.
The above scenario closely describes Uniroyal's predicament in 1968. With approximately 600 persons expected to transfer into jobs which they never before held, inefficiency was expected to seriously hamper production and sales. The need for maximum efficiency at Uniroyal appears to be especially acute in view of the fact that greater than 50% of the company's business was then derived from the "highly competitive" auto industry. Frey's affidavit states that if Uniroyal was unable to meet a buyer's immediate demands, another manufacturer would be most willing to do so.
It will be recalled that the first part of Robinson's test, requiring the challenged practice to effectively carry out the purpose it is alleged to serve, is undoubtedly satisfied in this case. Certainly, maintenance of the discriminatory transfer rules kept inefficiency in the non-footwear divisions to an absolute minimum.
However, as for the second part of the test, that the alleged business purpose must be sufficiently compelling to override its discriminatory impact, a material issue of fact exists. Here, the court must judicially balance the competing interests of the litigants; in other words, the adverse impact that less discriminatory transfer rules would have had from 1968 through 1970 upon production, sales, and workers in the plant, must be measured against the degree of sex discrimination experienced in the plant. Although the latter factor has been *273 presented to the court, plaintiffs have failed to show, as they must on a motion for summary judgment, the full extent that nondiscriminatory rules would have had on the enterprise. Defendant has shown that such a program could have meant the loss of business and possibly jobs. The evidence, which plaintiffs do not challenge, presents an argument which may at some point constitute a compelling reason for not implementing a nondiscriminatory employment system. To now conclude as a matter of law that defendant's argument cannot prevail would contravene the narrow purpose of Rule 56, F.R.C.P. Therefore, without adequate information to place on both sides of the scale, the court is unable to properly evaluate the business necessity defense. Since there is not sufficient information before the court to resolve the matter, each party shall submit such evidence as it deems necessary to support its respective position. Plaintiffs shall file their information within 60 days of this Order, and defendant shall have 30 days from the filing of such data to respond.
Likewise, an issue requiring additional evidence also exists in connection with the final portion of the business necessity test, i. e., that no acceptable policy or practice would accomplish the business purpose equally well with a lesser discriminatory impact. Plaintiffs have suggested that Uniroyal could have limited each employee to one opportunity to bump into any job in the plant; also, efficiency may have been preserved by prohibiting employees from moving into jobs requiring long training periods.[17] Perhaps the affects of the proposed slow-down could have been further mitigated by having experienced employees work overtime or by building inventories prior to the footwear shut-down. Whether such steps were either practical or feasible in 1968 is a matter not ascertainable from the record now before the court. Alternative policies must be framed in more precise terms in order to satisfy movants' burden of proof.
See, Crockett v. Green, supra, at 320. The parties shall provide the court with the necessary information in the manner prescribed in the preceding paragraph.
(ii) Recalls
The Company's admissions to plaintiffs' requests to admit facts show that from June to December 1969, and again from June to August 1970, the Company recalled some of its laid-off employees to active employment. In making these recalls, Uniroyal unlawfully segregated job opportunities on the basis of sex in at least two respects. First, the Supervisor of Male Employment recalled male employees to fill vacancies in traditionally "male" or "A" jobs; the Supervisor of Female Employment recalled female employees to fill vacancies in "female" or "B" jobs. Once again, females did not have equal access to the many Class A jobs. Irrespective of an individual's present wishes and abilities, employees were considered for certain jobs and not others based upon his or her sex.
Secondly, recalls were made using different seniority dates for male and female workers. Because the female seniority date was always earlier than the male seniority date, the Company recalled junior male employees in active employment while senior female employees remained laid off. See Part IV, 2, F. Defendant does not and, indeed, cannot rely upon the business necessity defense discussed above.
H Allegations that Uniroyal Discriminatorily Caused Its Female Workers to Quit
(i) Terminations Due to Alleged Discriminatory Cutoff of Supplemental Unemployment Benefits
The Supplemental Unemployment Benefit Agreement of 1967 provided that employees *274 who are laid off as the result of an operation or plant shut-down and who have more than one but less than five years seniority are eligible to receive 80% of his or her weekly straight-time rate.[18] In March 1968 the Company decided to extend this privilege to employees with five or more years of service who had been laid off out of line of seniority as the footwear phaseout began. These workers were "gratuitously" deemed by the Company to be on "temporary layoff" within the meaning of § 4(a) of the S.U.B. agreement. The affidavit of Donald L. Frey states:
[t]he reason for this decision was that (1) the Company was anticipating new business which might entail recalling the laid-off employees, and (2) the S.U.B. would soften the economic impact of the layoff in regard to the seven employees.
By November 1969, however, product sales indicated that it would be "highly unlikely" that persons laid off would be recalled. Uniroyal therefore decided to change its previous position by revoking the economic largess it had bestowed upon employees with five or more years of experience. A letter[19] was drafted by Company officials and mailed to affected workers, advising each employee that S.U.B. had been terminated and that he or she could elect to take a termination allowance and lose all service and seniority with the Company, or elect to stay on layoff and hope to some day be recalled to active employment. Plaintiffs maintain that these notices were delivered to a disproportionate number of female employees and that the letters caused a greater proportion of females to terminate their employment relationship with Uniroyal. The Company also seeks a decree in its favor with respect to this claim.
The S.U.B. termination letters were mailed on three different occasions; the first was 12 November 1969. The record shows that these letters were first sent to employees on layoff having seniority dates ranging from 1959 to 1963 inclusive ("Group I"). Despite the fact that on November 12th the Company had 92 male and 171 female workers in active employment or on layoff status with such seniority dates, all 157 letters sent that day by the Company were delivered to female employees.[20]
On 26 December 1969, a second wave of notices were mailed to a group of laid-off workers with seniority dates ranging from 7 September 1955 to 29 August 1959 ("Group II"). Once again, only female workers had their benefits discontinued even though the Company had 140 males and 236 females in active employment or on *275 layoff status with the appropriate time of company service.[21]
On 13 January 1970, plaintiffs filed a complaint with the E.E.O.C., charging Uniroyal with various discriminatory practices on the basis of sex, including complaints concerning the Company's cutoff of S.U.B. payments. Shortly thereafter, on 6 February 1970, Uniroyal released a final wave of letters. These notices were sent not only to the oldest seniority group of employees (1952-1955, "Group III"), but also to workers with dates ranging from 1955 to 1963. For the first time Uniroyal terminated the benefits of male workers. In February the Company delivered the last letters to 159 men and 192 women at a time when it had 534 males and 216 females in active employment or on layoff with seniority dates from 1952 to 1963.
It is clear that both the November and December letters were mailed to a disproportionate number of females in Groups I and II. It is equally clear that a greater proportion of said females terminated their employment relationship soon after receiving the S.U.B. letters. The evidence shows that 169 females having their S.U.B. payments cut off in 1969 decided to quit; at least 93 of these women did so before the first male worker received a similar notice.
Uniroyal, however, looks to the overall statistical results of its policy to show that it was not discriminatory. The Company maintains that when the impact of the third wave of letters are considered, plaintiffs' case must fail. Uniroyal points out that 57.23% (91/159)[22] of the males receiving an S.U.B. letter chose to quit as compared to only 36.21% (201/555)[23] of the women.
Defendant's argument fails to raise a valid defense. Action taken by an employer subsequent to the filing of E.E.O.C. charges cannot moot issues of discrimination occurring prior to that time. To hold otherwise would permit a potential defendant to simply manipulate the statistical evidence in order to avoid liability under Title VII. Although Title VII encourages conciliatory action, it does not condone concealment. Thus, once having restricted an employee's job opportunities on the basis of sex, it is no excuse that members of another group were subjected to similar limitations after E.E.O.C. charges were filed. See, McCoy v. Safeway Stores, Inc., 5 FEP Cas. 628 (D.C.1973). See, also, Jenkins v. United Gas Corp., 400 F.2d 28 (5th Cir. 1968) (corrective action taken subsequent to filing of lawsuit in federal court considered irrelevant).
The Company also argues that since it voluntarily and gratuitously extended S.U.B. payments to employees with five or more years of experience, it may revoke its largess in any manner and at any time as it sees fit. The court is unable to agree. Section 2000e-2, which is entitled to "broad construction", Sale v. Waverly Shell Rock Bd. of Educ., 390 F. Supp. 784, 788 (N.D.Ia. 1975), is in no way limited to contractual duties; rather, it is designed to prohibit all practices which "in any way" limit or restrict an individual's employment opportunities. Focus must be placed upon the consequences of a particular policy in contradistinction to the nature or source of that activity. Griggs v. Duke Power Co., supra, 401 U.S. at pp. 429-30, 91 S. Ct. 496.[24]
Next, Uniroyal submits that the instant claim is without merit because the resignations *276 which eventually ensued do not fall within the strict definition of a "constructive discharge." This concept, which was originally developed under the National Labor Relations Act and later extended to Title VII actions, is explained in Young v. Southwestern Savings & Loan Ass'n., 509 F.2d 140, 144 (5th Cir. 1975):
[I]f the employer deliberately makes an employee's working conditions so intolerable that the employee is forced into an involuntary resignation, then the employer has encompassed a constructive discharge and is as liable for any illegal conduct involved therein as if it formally discharged the aggrieved employee.
Here, defendant reasons that because working conditions at the Mishawaka plant are not at issue, and because there is no evidence that S.U.B. letters forced any female worker to quit her job, the doctrine of constructive discharge is inapplicable. The court, however, is unconvinced.
Whenever a legal concept is taken from its original context and applied in another, it must adapt itself to the many different nuances encountered in the new environment. A court must stand ready to refine the general principles underlying the doctrine without losing sight of its intended purpose.[25] In the present case, at least one factor of a constructive discharge, which appears to be an essential ingredient in N.L.R.A. cases, loses much of its significance when placed alongside the "well-settled" principles of Title VII.
To illustrate, Uniroyal urges the court to dismiss plaintiffs' claim since there are no allegations of oppressive or unbearable working conditions. However, the atmosphere in which an employee must perform his assignments represent just one means or form of coercion. In a case such as this, the nature and form of defendant's conduct is immaterial. The Supreme Court recently stated that "in enacting Title VII . . . Congress intended to prohibit all practices in whatever form which create inequality in employment opportunity." Franks v. Bowman, Inc., 424 U.S. 747, 763, 96 S. Ct. 1251, 1263, 47 L. Ed. 2d 444, 461 (1976). (Emphasis added.) The Act, then, directs the court to examine the substance and affect of a challenged practice, rather than the form in which it appears. Cf., Griggs v. Duke Power Co., supra, 401 U.S. at 432, 91 S. Ct. 496.
Additionally, Uniroyal maintains that dismissal is warranted since there is no evidence that termination of S.U.B. payments actually "caused" or "forced" any worker to quit his or her job. But plaintiffs' burden is not that great, at least for purposes of this motion. The court has determined that termination of S.U.B. payments in 1969 had discriminatory consequences against the class members of Groups I and II. That is the only question that may be resolved at this juncture. Whether an individual member of the class was forced to resign as a result of Uniroyal's actions, or whether her decision to quit was voluntary will present a series of factual issues for the trier of fact.
Similarly, defendant cannot rely upon the defense of business necessity. Although it appears that sound business reasons supported the decision to cut off S.U.B. payments, there is no explanation as to why the policy had to be conducted in a manner such that only women with seniority dates ranging from 7 September 1955 to 28 June 1963 received S.U.B. letters, while male workers with similar dates remained unaffected until February 1970.
Lastly, with respect to the class members of Group III, summary judgment must be denied both parties. In order to rule on this matter, it is essential to know the number of male and female employees on layoff status as of 6 February 1970 having seniority dates from 1952 to 1955; the number of S.U.B. letters sent to members of both sexes; and the number of employees who later resigned. That information, although given with respect to Groups I and *277 II, is not available for the third group. Thus, whether females having the 1952-1955 seniority dates were also discriminated against is a question the court is unable to answer at this juncture. The court invites each side to submit, in the manner prescribed above, all information needed to resolve this question. (If it so desires, defendant may also move for summary judgment on this point when it responds to plaintiffs' brief.)
(ii) Terminations Due to Alleged Discriminatory Layoffs and Recalls
It is plaintiffs' contention that during the footwear phaseout discussed above, the Company wrongfully laid off female employees with more seniority than men who remained working in the plant. The record shows that many of these women on layoff subsequently decided to quit by accepting early pensions, by taking severance pay, or otherwise. Plaintiffs therefore conclude that Uniroyal unlawfully caused senior female employees to quit by first conducting discriminatory layoffs and then by preventing them from reentering the plant by conducting segregative recalls.
The instant claim, of course, hinges in part upon a finding that the Company conducted illegal layoffs from 1968 through 1970. As noted, however, additional evidence is needed to finally resolve the matter. Thus, plaintiffs' claim cannot be decided until the layoff issue has been determined.
3. 1971 Present
A Alleged Discriminatory Classification of Jobs
Defendant's admissions to plaintiffs' requests to admit facts established the following: In January 1971, Company officials requested its Manager of Safety and Security, Mr. Von G. Cork, and its plant physician, Dr. N. C. Johns, to observe certain traditional "male" jobs in the plant to determine whether those jobs should be performed by female employees. Cork and Johns toured the facility once each week from 13 January through 30 June 1970, observing the various tasks performed. From January through July 1971, Dr. Johns issued to E. L. Kavanaugh and Elizabeth Hoffer 14 lists of jobs that, in his opinion, "should not be performed by female employees". The Company notified the Union of Dr. Johns' recommendations and in March 1971 Uniroyal incorporated the doctor's observations into its regular procedure of writing job descriptions.
Plaintiffs maintain that Uniroyal's classification of certain jobs as those which "should not be performed by females" unlawfully discriminates on the basis of sex. The court agrees. In Rosenfeld v. Southern Pacific Co., 444 F.2d 1219 (9th Cir. 1971), the Ninth Circuit considered the question of whether strenuous physical demands and long working hours constituted a "bona fide occupational qualification". 42 U.S.C. § 2000e-2(e) (1974). The court replied in the negative, explaining at page 1225:
The premise of Title VII, the wisdom of which is not in question here, is that women are now to be on equal footing with men. Weeks v. Southern Bell Tel. & Tel. Co., 408 F.2d 228, 236 (5th Cir. 1969). The footing is not equal if a male employee may be appointed to a particular position on a showing that he is physically qualified, but a female employee is denied an opportunity to demonstrate personal physical qualification. Equality of footing is established only if employees otherwise entitled to the position, whether male or female, are excluded only upon a showing of individual incapacity. See Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 718 (7th Cir. 1969). This alone accords with the Congressional purpose to eliminate subjective assumptions and traditional stereotyped conceptions regarding the physical ability of women to do particular work. See Weeks v. Southern Bell Tel. & Tel. Co., 408 F.2d 228, 235-236 (5th Cir. 1969); Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 717 (7th Cir. 1969). See also Shultz v. First Victoria Nat'l Bank, 420 F.2d 648, 656 (5th Cir. 1969), *278 (interpreting the Equal Pay Act of 1963, 29 U.S.C. § 206(d)(1)).
(Emphasis supplied.)
An employer may not, therefore, exclude females from particular jobs on the grounds they involve laborious tasks and long hours of work. Title VII rights are individual rights; they are not lost or forfeited because some members of a group having similar sex, racial or religious characteristics are unable or unwilling to perform certain jobs. Defendant presents nothing to remove the instant claim from Rosenfeld's holding. Consequently, the court finds that Uniroyal's classification of jobs as those which "should not be performed by females" is violative of Title VII. The inherent danger of such classification scheme can be seen in the case of Frances Klaer, a female employee who, in 1971, tried to exercise her seniority by transferring into a job designated as one that "should not be performed by female employees". In November 1971, Uniroyal had Dr. Johns reexamine the job that Klaer wanted and to discuss it with her. Johns' conclusion was that Klaer "could not qualify physically for the job". The Company relied upon Johns' opinion in its defense before an arbitrator. The arbitrator rejected the company's defense and ordered Uniroyal to award Klaer her job together with back pay. She had worked regularly on the job since 1972.
B Alleged Discriminatory Recalls of Employees Subsequent to December 1970
In December 1970 the Company abandoned its practice of using separate seniority dates for purposes of recalling laid-off male and female employees and began using a single seniority date for all employees. Although at first blush the new system appears to be nondiscriminatory, in operation it is detrimental to female employees. Under the new system, employees on layoff were considered for job vacancies on the basis of company service. However, the Company solely determined whether or not the most senior employees were capable of performing a particular job based upon the job's description and the physical attributes of the employee, including sex.
It will be recalled that beginning in 1971, descriptions of many traditionally "male" jobs were designated as jobs that "should not be performed by female employees". The Employment Office used the job descriptions when recalling employees, placing only male workers in those jobs which Dr. Johns had found to be injurious to a woman's health.[26] Thus, a female who is senior to a male employee would first be considered to fill a job vacancy but she would not be recalled if the job was one that "should not be performed by female employees". In many instances then, a female's sex, rather than her relative seniority and individual capabilities, is the determinative factor with respect to recalls occurring subsequent to December 1970.
Furthermore, in 1971 the Company hired 45 males as new employees and assigned them to traditional "A" jobs without considering any of its 130 female employees who were on layoff throughout the entire year.[27] Many of these jobs have since been *279 successfully held by members of both sexes.[28]
C Alleged Discriminatory Bidding and Disqualification Rules
Since 1964 the collective bargaining agreement between the defendants has contained the following rules: (1) an employee who is disqualified from a job has no right to bump junior employees; (2) a disqualified worker may only bid on a "posted" job vacancy or agree to accept an "open" job through the Employment Office; and (3) each employee is limited to two voluntary job transfers through bidding within one year. It is required that thirty days must elapse between transfers by bidding.
Plaintiffs interpret these provisions to mean that an employee who successfully bids on a job but is disqualified within thirty days can remain in active employment only by accepting an "open" job through the Employment Office. If there are no such jobs available, the employee is laid off. Once laid off, the employee cannot bid on a "posted" job vacancy even when the 30-day period following the worker's last bid has elapsed. It is plaintiffs' contention that the rules operate so as to perpetuate the effects of Uniroyal's prior discriminatory practices in violation of Title VII. While not disputing plaintiffs' interpretation of the bargaining agreement, defendant does challenge the legal conclusions which have been drawn. Defendant says that because the same bidding rules apply with equal force to both males and females, they are valid under the Act. Each party moves the court for an order in its favor.
Without question, the provisions of the bargaining agreement apply equally with respect to members of both sexes. But, contrary to defendant's contention, that factor alone does not end the inquiry for neutral employment practices which tend to "lock in" the affects of prior discrimination are also unlawful. See, e. g., Griggs v. Duke Power Co., supra; United States v. Georgia Power Co., 474 F.2d 906 (5th Cir. 1973); and United States v. Bethlehem Steel Corp., supra.
The bidding and disqualification rules now under consideration have the prohibited affect of "locking" female employees to the formerly designated "female" or "Class B" jobs. To illustrate, suppose that M and F were hired by the Company prior to 1972 and assigned to positions on the basis of sex M being assigned to a "male" or "Class A" job, and F to a "female" or "Class B" job. Suppose further that F now seeks to voluntarily transfer into a position traditionally held by male employees. To do this, she must bid in accordance with the above rules which, as seen, expose her to the possibility of layoff and possibly unemployment, should she fail to satisfactorily perform her new duties.
Undoubtedly, the serious penalties which lurk beneath the rules can only discourage F and other females from voluntarily transferring within the plant. Although clearly permitted to do so, a transfer may ultimately cost the employee active employment with the Company. Irrespective of their intended results, the rules help to "immobilize" defendant's work force by encouraging F to remain in her original job. The rules therefore tend to "freeze" the segregative effects of defendant's prior discriminatory practices and permit them to continue into the present. For that reason the Company's bidding and disqualification rules are unlawful. See Note 9.
The following chart shows the virtual standstill which has existed under Uniroyal's bidding rules from 1970 to 1974:
Number of Departments
Year All Male All Female Male & Female
1970 61 4 24
1974 51 1 23
*280 It is inconsequential that male employees are also subject to the possibilities of layoff and unemployment when considering a voluntary transfer. The determinative factor here is not whether the employment practice applies equally to both sexes, but whether it tends to perpetrate the effects of prior discriminatory conduct.
See, Ibid.
D Alleged Discriminatory Bumping and Disqualification Rules
Both parties next seek a determination of whether the bumping and disqualification rules contained in the 1970 collective bargaining agreement encroach federal law. The agreement provides penalties for bumping which track those respecting job bidding. That is, an employee who bumps into a job but is later disqualified because of his or her inability to do the work, can stay in active employment only by bidding on a "posted" job vacancy or being placed on an "open" job by the Employment Office. If such jobs are unavailable, the employee is laid off. For reasons stated in the preceding section, these rules are found to be violative of Title VII.
The parties are also at odds concerning the bumping requirement that an employee have "previous experience" in the job which he or she desires to hold. The applicable portion of the agreement reads as follows:
Where an employee's job is eliminated either due to method and equipment changes, or where a product or a division is permanently discontinued, said employee may
1. Accept open jobs within the plant,
2. Replace less senior employees on jobs within the plant for which they can qualify by previous experience,
3. Replace less senior employees on jobs within the plant for which they can qualify within a reasonably short training period.
The qualifications of the employee and the length of training periods for various jobs shall be subject to negotiation.
* * * * * *
4. Any person replaced by an employee entitled to job elimination rights shall be entitled to the same degree of replacement rights as was actually exercised by the preceding employee.
* * * * * *
Whenever new products are established in production and changes are made in the first six (6) months of the products manufacture which result in what would normally involve job elimination rights, any individual so affected shall have surplus labor rights and not elimination rights.
* * * * * *
Where employees with over two (2) years seniority who are surplus labor on any job in any department for reasons other than noted in Paragraph B above, they shall be subject to the following provisions:
1. Accept "open" jobs within the plant.
2. Senior employees may bump less senior employees on jobs anywhere in the plant provided they can qualify by reason of previous experience.
3. They may remain in the department by bumping less senior employees provided they can qualify within a reasonably short training period.
4. If not qualified by previous experience or cannot qualify within a reasonably short training period, they shall replace the least senior employee in the division. The least senior employee thereby affected shall replace least senior employees in the plant.
* * * * * *
Such a proviso has already been found by the court to be discriminatory on the basis of sex. See Part IV, 2-G. In short, the reason for this conclusion is that only male employees have the experience needed to bump into the formerly designated "male" or "Class A" jobs. As a consequence, female employees are "locked" into *281 their original assignments. There being no tenable explanation for restricting one's privilege to bump on the basis of previous experience, the court finds the requirement invalid under Title VII.[29]
V PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AGAINST DEFENDANT LOCAL UNION NO. 65
Defendant Local Union No. 65, United Rubber Workers, is the exclusive collective bargaining representative of all production and maintenance employees at the plant. Plaintiffs claim that the Union discriminated against female employees on the basis of sex in contravention of Title VII and the National Labor Relations Act, 29 U.S.C. § 151 et seq. (1970).[30]
With regard to the National Labor Relations Act, the plaintiff class maintains that Local No. 65 failed to represent fairly the female membership of the collective bargaining unit when negotiating with the Company. This representative duty is not expressly provided for in the N.L.R.A. Its existence stems from a series of decisions by the Supreme Court which have construed Sections 157 and 158(b)(1)(A) of Title 29 as impliedly placing an obligation upon a labor representative to represent fairly the interests of its membership. Clark, The Duty of Fair Representation: A Theoretical Structure, 51 Tex.L.Rev. 1119 (1973). The Court has stated that "[a] breach of the statutory duty of fair representation occurs only when a union's conduct towards a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith". Vaca v. Sipes, 386 U.S. at 190, 87 S.Ct. at 916. (Emphasis supplied.) Although the court was silent with respect to the "type" of discrimination it intended to prohibit, the duty has been held to require equal treatment on the basis of sex. Glus v. Murphy Co., supra. Thus, where a labor representative negotiates a contract which in operation discriminates among its members according to their sex, it will have failed to meet the dictates of the N.L.R.A. Ibid.; cf. Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 79-88, 478 F.2d 979, 989-990 (1973).
Plaintiffs have divided their claims into three categories, the first of which involves allegations that the Union maintained discriminatory wage rates for both new and incumbent employees on the basis of sex. It will be recalled that this claim cannot prevail on motion for summary judgment unless the evidence shows that jobs performed by male and female employees "requires equal skill, effort, and responsibility". 29 U.S.C. § 206(d). Having failed to adduce such evidence, plaintiffs' request must be denied. See Part IV, 2, D.
Second, plaintiffs contend that Local No. 65 negotiated rules for bidding, bumping, and disqualification which discriminate against female employees because of their sex. These rules have been examined by the court and, although facially neutral, were found to operate in a discriminatory fashion.[31] In large part, this is due to Uniroyal's classification and restriction *282 of jobs according to sex. The question, therefore, is whether a union violates its representation duty when it negotiates a labor contract which is fair in form, but which operates to the detriment of female employees. Although the cases referred to the court involve labor contracts containing facially discriminatory provisions, this court is unable to discern any meaningful distinction between a labor contract which, on its face, is discriminatory, and one which has the appearance of fairness but discriminates nonetheless. See, Glus v. Murphy, supra. Thus, the court concludes that Local No. 65 failed to meet its duty of fair representation by negotiating rules which had the effect of segregating job opportunities on the basis of sex.[32]
Finally, plaintiffs contend that Defendant Union breached its representational duty by acquiescing in Uniroyal's practice of discriminating against its members according to sex with respect to job assignments, promotions, transfers, recalls and terminations.[33] The issue to be resolved is whether a union's acquiescence in an employer's wrongful practices is grounds for a violation of duty of fair representation. Although the case law is not in total agreement, this court is convinced that the conclusion reached in Macklin v. Spector Freight, Inc., 156 U.S.App.D.C. 69, 478 F.2d 979 (1973) represents the better view. There, Judge J. Skelly Wright, speaking for the undivided court stated:
A union's duty, in representing its members and protecting them from invidious treatment, must certainly be broader than simply refusing to sign overtly discriminatory agreements. Where blacks are in a minority, as they so often are in large industrial unions like the Teamsters, tacit union acquiescence in an employer's discriminatory practices effectively produces the same end result that was condemned in Steele. One means of avoiding this outcome, short of forcing the individual member to the recourse of time-consuming litigation against the employer, is for the union, in its vital role as bargaining agent, to negotiate actively for nondiscriminatory treatment in aid of its black members.
Id. at 79, 478 F.2d at 989; see also, Peters v. Missouri-Pacific R.R. Co., 483 F.2d 490, 498 (5th Cir. 1973); but see, Atkinson v. Owens-Illinois Glass Co., 10 FEP Cas. 710 (N.D.Ga. 1975). Macklin therefore requires a labor representative to resort to the bargaining table to obtain nondiscriminatory treatment of its female membership. The onus is placed upon the union rather than its constituents to obtain equal treatment.
This court has already determined that since 2 July 1965 Uniroyal has maintained a variety of employment policies which discriminated against the female class because of sex. Acquiescence by Local No. 65 in those unlawful policies, therefore, constitutes an encroachment of its duty of fair representation.
*283 Lastly, plaintiffs contend that by negotiating bidding, bumping and disqualification rules which have the effect of restricting a female's job opportunities in the plant, the Union also violated Title VII. In Johnson v. Goodyear Tire & Rubber Co., Synthetic Rubber Plant, 491 F.2d 1364 (5th Cir. 1974), the court stated that "it would be difficult to fasten liability on one party to the labor contract which was a substantial cause of the discriminatory employment practices and grant total immunity from such liability to the other party." Id. at 1381. It is clear then, that each participant to the various agreements now at issue must bear the same responsibility under Title VII for the ultimate consequences of their joint efforts. Therefore, liability against the Union may also be established pursuant to 42 U.S.C. § 2000e et seq. (1970).
The same result must similarly obtain with respect to allegations of union acquiescence in Uniroyal's discriminatory policies and procedures. The Act clearly places an affirmative duty upon a labor organization to alleviate sex discrimination in employment. Such action must be initiated whether or not a female employee complains to the Union of discriminatory conduct. See, e. g., Myers v. Gilman Paper Co., 392 F. Supp. 413, 420 (S.D.Ga.1975).
VI MOTION FOR PRELIMINARY INJUNCTION
Section 2000e-5(g) reads in pertinent part:
If the court finds that the respondent has intentionally engaged in or is intentionally engaging[34] in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate
Issuance of a preliminary injunction is a matter which lies within the sound discretion of the trial judge; thus, a court's decision to grant or deny a preliminary injunction may be reversed on appeal only when the decision is tantamount to an abuse of discretion. The factors to be considered by a district court are mentioned by Professor Wright in his treatise, Federal Practice & Procedure, § 2948 pp. 430-31 (1973); they include:
(1) the significance of the threat of irreparable harm to plaintiff if the injunction is not granted;
(2) the state of the balance between this harm and the injury that granting the injunction would inflict on defendant;
(3) the probability that plaintiff will succeed on the merits; and
(4) the public interest.
Having considered the criteria in the context of this case, the court concludes that issuance of a preliminary injunction is proper. The requisite injury has been demonstrated; United States v. Hayes International Corp., 415 F.2d 1038, 1045 (5th Cir. 1969) and United States v. Virginia Elec. & Power Co., 327 F. Supp. 1034 (E.D.Va.1971); neither defendant alleges that plaintiffs' request will have an injurious impact upon them; liability with respect to the plaintiff class has been established; and the importance of the public interest at stake is evident from the statute itself.
The remaining issue, therefore, concerns the terms of the order. Section 2000e-5(g), which authorizes a court to enjoin and "order such affirmative action as may be appropriate," must be broadly construed so that discriminatory employment practices may be effectively terminated and aggrieved parties made whole. Rosen v. Public Service Elec. & Gas Co., 477 F.2d 90 (3d Cir. 1973); Bowe v. Colgate-Palmolive Corp., 416 F.2d 711, 719-20 (7th Cir. 1969). It is the court's conclusion that the following provisions will effectuate the purpose of the act without imposing an undue burden upon either defendant:
*284 A Defendant Uniroyal is hereby enjoined from continuing to follow its discriminatory rules for bidding, bumping, and disqualification during the pendency of this case. The Company shall permit any female hereinafter determined by the trier of fact to have been wrongfully disqualified from a traditionally designated "male" job (1) to return to the last job she held successfully and which is still being operated within the plant, or (2) to bid on any posted job without restriction, or (3) to accept placement by the Employment Office on an "open" job.
B Defendant Uniroyal is hereby ordered to make the following announcement immediately to all of its management, supervisory, and wage personnel at the Mishawaka plant:
1. The Company today has abolished its segregated and discriminatory employment system at the Mishawaka plant.
2. The Company has discontinued classifying any of the jobs at the plant as "male" jobs or "female" jobs or as "Class A" jobs or "Class B" jobs.
3. The Company no longer classifies its employees as "Class A" employees or "Class B" employees.
4. There no longer are any jobs in the plant that should not be performed by female employees.
5. All jobs in the plant are equally available to all employees on the basis of their seniority and ability to do the work, without regard to sex.
6. The Company encourages female employees to exercise their seniority to bid and bump into traditionally "male" jobs as well as traditionally "female" jobs and new jobs.
7. Any female employee who is wrongfully disqualified from any traditionally "male" job shall be allowed (a) to bump back into the last job she held successfully and which is still being operated in the plant, or (b) to bid on any posted job without restriction, or (c) to accept placement by the Employment Office in an "open" job.
8. The Company guarantees full equality of employment opportunity at the plant to every employee on the basis of seniority and ability, regardless of sex.
C Defendant Union is hereby ordered to make the same announcement to its members, together with the statements that the Union encourages female employees to bring any complaints of employment discrimination at the plant to the attention of the officers of the Local.
D Defendant Uniroyal is hereby offered to file with the court by the tenth (10th) day of each month during the pendency of this case, the following information:
1. A report of every instance during the preceding month in which the Defendant Company has disqualified any female employee from any job other than a traditionally "female" job or "Class B" job and containing (a) the female employee's name, (b) the date she applied for the job, (c) the date she entered the job and the manner (whether by bid, bump, placement, or otherwise), (d) the date and reason she was disqualified, (e) the name of the management or supervisory employee who disqualified her, and (f) her present job.
2. A report showing the number of male and female employees in each department at the plant during the preceding month.
3. A chronological list showing the name, sex, and seniority date of each employee laid off and each employee recalled from layoff during the preceding month.
NOTES
[*] The Act, or Title VII, was enacted as part of the Civil Rights Act of 1964. The legislative history of this statute may be found at 1964 U.S.Code Congressional and Administrative News, p. 2355, and 1972 U.S.Code Congressional and Administrative News, p. 2137: cf. Willingham v. Main Telegraph Publishing Co., 507 F.2d 1084, 1090-91 (5th Cir. 1975).
[**] Judge George N. Beamer of this United States District Court died in October, 1974. This case was left pending for some time following his death.
[*] See, 6 FEP Cas. 98 (N.D.Ind.1973). Judge Beamer later refused to set aside this order at 7 FEP Cas. 343 (N.D.Ind.1973).
[**] This period was later enlarged to 180 days by the 1972 Amendments to Title VII; see 42 U.S.C. § 2000e-5(e) (1972).
[*] The Act, or Title VII, was enacted as part of the Civil Rights Act of 1964. The legislative history of this statute may be found at 1964 U.S.Code Congressional and Administrative News, p. 2355, and 1972 U.S.Code Congressional and Administrative News, p. 2137: cf. Willingham v. Main Telegraph Publishing Co., 507 F.2d 1084, 1090-91 (5th Cir. 1975).
[**] Judge George N. Beamer of this United States District Court died in October, 1974. This case was left pending for some time following his death.
[*] See, 6 FEP Cas. 98 (N.D.Ind.1973). Judge Beamer later refused to set aside this order at 7 FEP Cas. 343 (N.D.Ind.1973).
[**] This period was later enlarged to 180 days by the 1972 Amendments to Title VII; see 42 U.S.C. § 2000e-5(e) (1972).
[5] Court Order of 23 March 1973 at 6.
[6] The evidence shows that no female employee held a traditionally designated "male" job until 1971. However, in March 1966, the Company did reclassify four "female" jobs as Class A positions. Thus, some females did hold Class A jobs. But the fact remains that from 1965 to 1970, females held essentially the same jobs as they did prior to the Act.
[7] Ibid.
[8] Under Title VII, neutral employment practices and policies which operate to "freeze" the status quo of prior discriminatory conduct cannot be maintained by an employer. Griggs v. Duke Power Co., 401 U.S. 424, 91 S. Ct. 849, 28 L. Ed. 2d 158 (1971); United States v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971).
[9] In 1968 the Company changed its rules with respect to bumping. The validity of those rules are examined in Part IV, G, infra.
[10] Uniroyal's efforts to raise a material issue of fact based upon statements contained in the affidavits of Mr. Kavanaugh and Ellen A. Seltzer, a female worker, must fail. Kavanaugh's conclusory statement that the "A-B" system was nondiscriminatory is clearly insufficient when evidence establishing a prima face case is presented before the court. See, Jones v. Lee Way Motor Freight, Inc., 431 F.2d 245, 247 (10th Cir. 1970) and cases therein cited. Seltzer's contention that she was never discriminated against by the Company is irrelevant to the issue of class liability. Whether or not individual members of the plaintiff class were wrongfully denied equal employment opportunities is a matter properly raised during Stage II.
[11] Plaintiffs also contend that female employees were also exposed to a greater risk of having to quit. See Part IV-2, H, infra.
[12] These benefits provided the employee with an amount equal to 80% of his or her weekly wage rate.
[13] Additionally, an affected employee having at least two years of Company service had the right to bump less senior employees in the department provided the employee could qualify within a reasonably short training period. Also, an affected employee with two or more years of experience could bump the least senior employees in the division. These provisions had only short-term affects however, since all footwear departments and divisions were closed by the end of 1970.
[14] While it may be true that female employees could have remained in active employment by moving into another Class B job, their chances of doing so were significantly less than a male's chances of moving into a Class A job. As the graph on page 267 indicates, the 802 affected females had only 529 "B" jobs in which to move, whereas the 562 affected males had 1,252 "A" jobs available to them.
[15] Although Robinson involved racial discrimination, the business necessity exception in a racial context has been said to apply with equal force in a sexual context. See Chastang v. Flynn & Enrich Co., 365 F. Supp. 957, 966 (D.M. 1973), affirmed 541 F.2d 1040, 1042-43 (4th Cir. 1976).
[16] The Crockett decision is mentioned by the court in response to defendant's concern about the burden of proof imposed upon an employer under the "no-alternative" approach. Crockett's allocation of burdens will be controlling in this case.
[17] The average training periods per commodity were as follows:
Commodity Average Number of Days
Knit Fabrics 13
Coated Fabrics 11
Automats 7
Ensolite 5
Koylon 10
Fuel Cells 30
Filatex 30
[18] On the other hand, employees possessing five or more years of Company service are eligible for a termination allowance as provided by the Pension, Insurance and Severance Pay Agreement. That Agreement also provides that persons with at least ten years of seniority and 62 years of age are eligible for certain pension benefits.
[19] The letter reads in pertinent part:
Dear Fellow Employee:
As a result of analyzing our employment needs in the foreseeable future, the probability of your being recalled from layoff is very remote. Based on this information, together with the recent closing down of the Footwear section of the Plant, it has been determined that you are eligible for a benefit in the form of a termination allowance under the provisions of the Pension, Insurance and Severance Pay Agreement. Since you are eligible for this benefit, under the terms of the Supplemental Unemployment Benefits Plan you are no longer eligible for S.U.B. after November 21, 1969. You have the right to exercise the following options:
A. You may elect to take a termination allowance, in which case your service and seniority with the company will be terminated, or
B. You may elect to remain on the recall list and take your chances that some day you may be recalled.
[20] The court is primarily interested in the sex and number of employees on layoff status having seniority dates from 1959 to 1963. Plaintiffs' evidence, however, includes the number of employees who were also actively working in the plant. Although the figures may be somewhat misleading, they do not require the court to deny plaintiffs' claim. The statistical disparity would exist so long as some males and some females were on layoff when the notices were delivered only to members of the latter group.
[21] Ibid.
[22] Of the 159 men receiving an S.U.B. letter, 91 later quit.
[23] Of the 555 women receiving an S.U.B. letter, 201 later quit.
[24] The foregoing conclusion is analogous to the Supreme Court's construction of the Due Process Clause of the Fifth and Fourteenth Amendments to the Constitution. The Court has made it clear that once the government gratuitously bestows some benefit or privilege upon its citizenry, that benefit or privilege may be revoked, but only in accordance with the Due Process Clause. See, e. g., Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970); Note, Reputation as a Constitutionally Protectible Interest, 52 Notre Dame Law 290, 300-302 (1976). It does not, therefore, appear to be too onerous a task to require an employer, when withdrawing its largess, to do so within the parameters of Title VII.
[25] In Young v. Southeastern Savings & Loan Ass'n., supra, it was the district court's failure to recognize this important factor that required the Circuit Court to reverse the lower ruling. See, 509 F.2d 140 (5th Cir. 1975).
[26] In an intra-office memorandum dated 16 March 1971, E. L. Kavanaugh, Uniroyal's current Employment Manager, stated:
Although we have only one seniority layoff date, we operate with a more "realistic" date as far as men are concerned, in order to:
* * * * * *
B. Keep jobs manned where the plant physician and safety department recommend should not be performed by females as they would be injurious to their health.
[27] The following chart shows the number and sex of workers hired by Uniroyal as new employees from 1968 to 1973:
Year Male Female
1968 92 0
1969 0 0
1970 11 0
1971 45 0
1972 158 0
1973 4 0
[28] During 1971 the defendant Uniroyal assigned 12 of its 45 newly hired male employees to the following jobs and departments without considering senior female employees for them: Janitor (197), inspect and pack (234), roller die operator (255), clean molds (264), pour and control (264), demold (265), and clean molds (265). Thereafter, as the defendant Company opened those jobs to female employees gradually during the period 1971-1973, fifty-seven senior female employees obtained those jobs and worked them successfully.
[29] Defendant states that the discriminatory requirement of "previous experience" is valid because a female employee can bump into jobs traditionally reserved for male workers by following one of the alternative nondiscriminatory routes. Uniroyal's position, if accepted, would produce anomalous results under Title VII. It would permit an employer to retain and implement discriminatory provisions in a collective bargaining contract so long as nondiscriminatory alternatives existed. Such an outcome directly contravenes the intent of Congress to alleviate all employment preferences based on sex, except those grounded upon bona fide occupations qualifications or mandated by business necessity. See Note 1, infra.
[30] Plaintiffs may pursue both causes of action since the doctrine of election of remedies does not bar an aggrieved party from simultaneously seeking relief under the N.L.R.A. and Title VII. Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011, 39 L. Ed. 2d 147 (1974). However, if certain employment practices are violative of Title VII, it does not necessarily follow that such conduct is also violative of the N.L.R.A. Emporium Capwell Co. v. Western Addition Community Organization, 420 U.S. 50, 95 S. Ct. 977, 43 L. Ed. 2d 12 (1975).
[31] The validity of the rules from 1968 to 1970, however, cannot be determined at this time.
[32] Contrary to Defendant Union's contention, this result is not inconsistent with the principle of majority rule which is such an important part of an employee's rights under the N.L.R.A. See, Emporium Capwell Co. v. Western Addition Community Organization, 420 U.S. 50, 61-65, 95 S. Ct. 977, 43 L. Ed. 2d 12 (1975). That is, a labor representative may not defend a bargaining agreement which in operation discriminates according to sex on the grounds that a majority of its members approved of such provisions. Although Congress has given unions broad discretion to select their own policies and rules, it did not "authorize a tyranny of the majority over minority interests". Ibid. at 64, 95 S.Ct. at 985. Consequently, a union may not choose a position which interferes with a "policy Congress had imbedded in the labor laws." Scofield v. N.L.R.B., 394 U.S. 423, 430, 89 S. Ct. 1154, 1158, 22 L. Ed. 2d 385 (1969). Clearly, the elimination of sex discrimination is one such policy. The Supreme Court has remarked that "[i]n [enacting] the Civil Rights Act of 1964 . . . Congress indicated that it considered the policy against discrimination to be of the `highest priority'." Alexander v. Gardner-Denver Co., 415 U.S. 36, 47, 94 S. Ct. 1011, 1019, 39 L. Ed. 2d 147 (1973); See, Bowe v. Colgate-Palmolive Corp., 416 F.2d 711, 719-20 (7th Cir. 1969). A union is therefore not free to negotiate terms which operate unequally on the basis of sex merely to please the majority of its members.
[33] The court's remarks are, of course, limited to those practices found to be discriminatory as a matter of law.
[34] "Intentionally engaging" in an unlawful employment practice is defined as conduct which is deliberate rather than accidental. Sporgis v. United Airlines, Inc., 444 F.2d 1194 (7th Cir. 1971).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1902199/
|
390 So. 2d 1231 (1980)
Isaac FELDMAN, Appellant,
v.
Zena K. FELDMAN, Appellee.
No. 80-62.
District Court of Appeal of Florida, Third District.
December 9, 1980.
*1232 Weintraub, Weintraub, Seiden, Dudley & Press and Albert L. Weintraub, Miami, for appellant.
Markus & Winter and Laurie S. Silvers, Miami, for appellee.
Before HUBBART, C.J., and BASKIN and DANIEL S. PEARSON, JJ.
DANIEL S. PEARSON, Judge.
The portions of the final judgment of dissolution of marriage which awarded attorneys' fees in the amount of $10,000 to the wife, Zena Feldman, and ordered Isaac Feldman to transfer to Zena twenty-six per cent of the operating capital of American Men's Wear Clothing Company, Inc., are reversed upon holdings that (1) the failure of the wife to offer expert testimony to establish the reasonableness of the attorneys' fees vitiates the award, Alexander Muss & Sons, Inc. v. Nelson, 366 So. 2d 532 (Fla. 3d DCA 1979); Wilson v. Wilson, 362 So. 2d 1030 (Fla. 3d DCA 1978); Segal v. Segal, 353 So. 2d 894 (Fla. 3d DCA 1977); Lee v. Gilbert, Silverstein & Hellman, P.A., 350 So. 2d 1147 (Fla. 3d DCA 1977); (2) the trial court, although well within its authority to order, as it did, the husband to transfer to the wife stock owned by him in American Men's Wear Clothing Company, Inc., was not empowered to order the transfer of the assets of a corporation which was not a party to the litigation, see Couture v. Couture, 307 So. 2d 194 (Fla. 3d DCA 1975).
Since the wife's failure to offer expert testimony on the reasonableness of attorneys' fees may have resulted from the trial court's premature award of such fees, we remand this cause with directions that the wife be afforded an opportunity to present such testimony at a further hearing before the trial court. In all other respects, the final judgment of dissolution is affirmed.
Affirmed in part; reversed in part and remanded.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981277/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0728n.06
No. 11-2614 FILED
Jul 05, 2012
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT LEONARD GREEN, Clerk
JERRY A. GROVE, )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
GENE HANSEN AND SONS TRUCKING, ) MICHIGAN
)
Defendant-Appellee. )
Before: MARTIN and CLAY, Circuit Judges; HOOD, District Judge.*
PER CURIAM. Jerry A. Grove, a Michigan resident proceeding pro se, appeals the district
court judgment dismissing his employment discrimination complaint filed pursuant to the Age
Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621–34, and Title VII, 42 U.S.C.
§§ 2000e–e-17.
Grove worked for Gene Hansen and Sons Trucking as a general laborer doing maintenance,
cleaning work, physical labor, and other tasks. After his employment was terminated, he filed a civil
rights complaint alleging that he was discriminated against because of his age. A magistrate judge
ultimately recommended that summary judgment be granted to the defendant. Upon de novo review
of the magistrate judge’s report, the district court granted summary judgment to the defendant.
On appeal, Grove argues that the defendant misstated facts; that the court erred in not
ordering the defendant to provide certain documents in discovery; that Grove was not part of a
workforce reduction; and that the defendant discriminated against him on the basis of his age.
*
The Honorable Joseph M. Hood, United States District Judge for the Eastern District of
Kentucky, sitting by designation.
No. 11-2614
-2-
The district court’s judgment is reviewed de novo. Dowling v. Cleveland Clinic Found., 593
F.3d 472, 476 (6th Cir. 2010). Summary judgment is appropriate where “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see also Jones v. Muskegon Cnty., 625 F.3d 935, 940 (6th Cir. 2010).
Grove alleges that the defendant discriminated against him on the basis of his age. To
establish a prima facie claim under the ADEA, a plaintiff must show that he or she was: (1) a
member of a protected class; (2) subjected to an adverse employment action; (3) qualified for the
position; and (4) replaced by someone outside the protected class. Schoonmaker v. Spartan Graphics
Leasing, LLC, 595 F.3d 261, 264 (6th Cir. 2010). Where an individual is terminated as part of a
workforce reduction, the fourth prong requires that the plaintiff “provide additional direct,
circumstantial, or statistical evidence tending to indicate that the employer singled out the plaintiff
for discharge for impermissible reasons.” Geiger v. Tower Auto., 579 F.3d 614, 622–23 (6th Cir.
2009) (citation and internal quotation marks omitted). “A plaintiff may establish a violation of the
ADEA by either direct or circumstantial evidence.” Provenzano v. LCI Holdings, Inc., 663 F.3d 806,
811 (6th Cir. 2011). If the plaintiff establishes a prima facie case, the burden shifts to the defendant
to show that the plaintiff was terminated for a legitimate, nondiscriminatory reason. The plaintiff
can then challenge that reason by showing that the defendant’s proffered reason was actually a
pretext for discrimination. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–04 (1973); see
also Geiger, 579 F.3d at 622.
We conclude that, whether we assess Grove’s termination under the workforce reduction
analysis or as a general termination, his ADEA claim fails because Grove has not provided sufficient
evidence supporting the fourth prong of his claim. Although he has repeatedly argued that he has
a witness that can testify that younger workers were hired to replace him, he has never offered any
significant information about that witness or provided the witness’s testimony to the court. Further,
although Grove claimed that other employees told him that his work was given to younger workers,
he has not provided statements from those employees or described in any detail what their testimony
would be. Cf. Schoonmaker, 595 F.3d at 265–67. Even if Grove had established a prima facie case,
No. 11-2614
-3-
the defendant provided unrefuted evidence demonstrating that Grove was fired for nondiscriminatory
reasons. Grove has failed to introduce evidence establishing a genuine issue of material fact and the
district court did not err in granting the defendant’s motion for summary judgment on the existing
record.
Similarly, Grove has not established that he was entitled to any additional discovery. We
review decisions regarding the scope of discovery for an abuse of discretion. Hahn v. Star Bank, 190
F.3d 708, 719 (6th Cir. 1999). Grove has not explained how the information he seeks would support
his prima facie case or rebut the defendant’s evidence of a nondiscriminatory motive. Further, he
has not explained why the material that he was previously provided addressing the same topics was
insufficient.
The district court’s judgment is affirmed.
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2896237/
|
NO. 07-08-0006-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
DECEMBER 30, 2008
______________________________
In the Matter of the Marriage of MARY PALACIOS
and JESUS PALACIOS and In the Interest
of LORENA PALACIOS, A Child
_________________________________
FROM THE 140
TH
DISTRICT COURT OF LUBBOCK COUNTY;
NO. 2005-532,385; HON. JIM BOB DARNELL, PRESIDING
_______________________________
Opinion
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
Jesus Palacios (Jesus) appeals from a final judgment divorcing him from Mary Palacios (Mary) and dividing property. Through three issues, he effectively contends that the trial court’s failure to enter findings of fact and conclusions of law prevents him from assessing the legitimacy of the property division. We reverse and remand.
On September 23, 2008, we abated the cause back to the trial court to file findings of fact and conclusions of law pursuant to §6.711 of the Texas Family Code.
(footnote: 1) The trial court had until October 23, 2008, to file same. That date has now passed without compliance, and subsequent efforts to secure the findings were unsuccessful.
The failure of the trial court to file sufficient findings of fact and conclusions of law when properly requested is presumed to be harmful unless the contrary appears on the face of the record.
Tenery v. Tenery
, 932 S.W.2d 29, 30 (Tex.1996). From the face of the record before us, we cannot say that the trial court’s omission was harmless. This is so because we do not know what the trial court considered to be separate property; nor do we know the valuation placed on the property that was subject to the division order. Thus,
the appropriate remedy is to reverse and remand the cause for a new trial.
Tenery v. Tenery
, 932 S.W.2d at 30;
see Liberty Mut. Fire Ins. v. Laca
, 243 S.W.3d 791, 796 (Tex. App.–El Paso 2007, no pet.).
Accordingly, we reverse the trial court’s judgment and remand the case for a new trial.
Brian Quinn
Chief Justice
FOOTNOTES
1:Section 6.711 of the Texas Family Code states that (a) In a suit for dissolution of a marriage in which the court has rendered a judgment dividing the estate of the parties, on request by a party, the court shall state in writing its findings of fact and conclusions of law concerning:
(1) the characterization of each party's assets, liabilities, claims, and offsets on which disputed evidence has been presented; and (2) the value or amount of the community estate's assets, liabilities, claims, and offsets on which disputed evidence has been presented.
Tex. Fam. Code Ann
.
§6.711(a) (Vernon 2006).
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2524155/
|
945 N.E.2d 697 (2007)
375 Ill. App. 3d 1144
PRIDMORE
v.
ARRIAGA.
No. 1-07-0297.
Appellate Court of Illinois, First District
September 28, 2007.
Rev'd & rem. with directions.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/33422/
|
351 F.3d 183
Azel P. SMITH; Jacqueline Butler; Ruthie Porter; Gloria Burns; Willie Allen; et al., Plaintiffs-Appellants,v.CITY OF JACKSON, MISSISSIPPI; Police Department of the City of Jackson, Mississippi, Defendants-Appellees.
No. 02-60850.
United States Court of Appeals, Fifth Circuit.
Filed November 13, 2003.
Revised December 4, 2003.
Dennis L. Horn (argued), Horn & Payne, Madison, MS, for Plaintiffs-Appellants.
Samuel Lee Begley (argued), Begley Law Firm, Jackson, MS, for Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Mississippi.
Before KING, Chief Judge, and HIGGINBOTHAM and STEWART, Circuit Judges.
KING, Chief Judge:
1
Plaintiffs-appellants, thirty police officers and public safety dispatchers employed by the defendants-appellees, the City of Jackson and the Police Department of the City of Jackson, appeal the district court's order granting summary judgment in favor of the defendants. The appeal presents an issue of first impression in our circuit regarding whether a disparate impact theory of liability is available to plaintiffs suing for age discrimination under the Age Discrimination in Employment Act of 1967. The district court ruled that, as a matter of law, claims of disparate impact cannot be brought under the Act. We agree and therefore affirm the judgment of the district court as to this issue. However, because the district court granted summary judgment in favor of the defendants on the plaintiffs' disparate treatment claim before addressing pending motions related to the plaintiffs' ability to fully develop the summary judgment record, we vacate the district court's final judgment insofar as it dismissed the plaintiffs' disparate treatment claim.
I.
PROCEDURAL HISTORY
2
On May 14, 2001, thirty police officers and public safety dispatchers — all over the age of forty and all employed by the defendants — filed suit pursuant to the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (2000). They claimed injuries as a result of an allegedly age-discriminatory performance pay plan ("the plan") implemented by the defendants in order to grant substantially larger salary increases to police officers and public safety dispatchers (collectively "officers") under the age of forty. The plan was implemented by the defendants on October 1, 1998, and revised by the defendants on March 1, 1999. Under the plan, those officers and dispatchers with five or fewer years of tenure with the department received proportionately greater raises when compared to their former pay than those with more than five years of tenure. As stated by the district court:
3
The plan accordingly created three categories for the purposes of the analysis of this case: 1) those officers and dispatchers with less than five years of tenure, most, if not all, of whom would have been under 40 years of age; 2) those 40 years of age or older, most, if not all, of whom would have had more than five years of tenure, and; 3) those under 40 years of age with more than five years of tenure.
4
On December 11, 2001, the plaintiffs moved to compel certain fiscal and personnel discovery related to the implementation and revision of the plan; the magistrate judge overseeing disputes related to discovery in this matter granted this motion on January 16, 2002, concluding that "the fiscal and personnel discovery requested by the Plaintiffs is not privileged... and should be produced." On June 5, 2002, the plaintiffs filed a "motion for sanctions, a default judgment, attorneys' fees and expenses, expert witness fees and a continuance," seeking to have the defendants comply with disclosure and discovery obligations as set forth in the Federal Rules of Civil Procedure and the order of the magistrate judge. Two days later, the defendants moved for summary judgment, and the plaintiffs thereafter moved to strike certain exhibits to the defendants' motion, in part because the existence of the documents attached as exhibits had been previously denied by the defendants.
5
On September 6, 2002, while the plaintiffs' motions were pending, the district court granted summary judgment in favor of the defendants on the plaintiffs' disparate impact and disparate treatment claims and denied the plaintiffs' pending motions as moot. Final judgment was entered on this same date.
6
The plaintiffs appeal this final judgment, maintaining that: (1) the district court erred in concluding that a disparate impact theory of liability is not cognizable under the ADEA, and (2) the district court erred in improvidently dismissing the plaintiffs' disparate treatment claim pending production by the defendants of requested discovery materials.
II.
STANDARD OF REVIEW
7
We review the grant of summary judgment de novo, applying the same standards as did the district court. Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir.), cert. denied, 534 U.S. 951, 122 S.Ct. 347, 151 L.Ed.2d 262 (2001). Summary judgment should be granted if there is no genuine issue of material fact for trial and the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c). In determining if there is a genuine issue of material fact, this court reviews the evidence in the light most favorable to the non-moving party. Daniels, 246 F.3d at 502.
III.
THE PLAINTIFFS' DISPARATE IMPACT CLAIM
8
The plaintiffs raise both disparate treatment and disparate impact theories of liability here. Regarding their disparate treatment claim, the plaintiffs allege that the defendants were motivated by age to implement a plan that discriminated against them intentionally. Regarding their disparate impact theory, the plaintiffs allege that the implementation of the facially neutral plan by the defendants gives rise to liability without a showing of intentional age motivation because the plan resulted in pay increases to officers under forty years of age that were four standard deviations higher than the raises received by officers over forty. In support of their disparate impact theory, the plaintiffs proffered to the district court statistical data demonstrating that the average pay increases made pursuant to the plan differed by age and that older officers received smaller raises than their younger counterparts.
9
In a disparate treatment case, liability depends on whether the protected trait — here, age — actually motivated the employer's decision. Hazen Paper Co. v. Biggins, 507 U.S. 604, 610, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993). The employer may have relied on a facially discriminatory policy requiring adverse treatment of older employees or may have been motivated by age to discriminate against an individual on an ad hoc basis — "[w]hatever the employer's decisionmaking process, a disparate treatment claim cannot succeed unless the employee's protected trait actually played a role in that process and had a determinative influence on the outcome." Id. Proof of discriminatory motive is thus critical to the success of a plaintiff's discriminatory treatment claim. Id. In contrast, in a disparate impact case, liability may result without a demonstration of discriminatory motive. Id. at 609, 113 S.Ct. 1701. Disparate impact claims arise from "employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity." Id. (quoting Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335-36 n. 15, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977)).
10
In 1971, the Supreme Court held that plaintiffs may bring disparate impact claims under Title VII. Griggs v. Duke Power Co., 401 U.S. 424, 430-31, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). This judicial construction of the statute was codified by Congress in 1991 to make clear that such a theory was available to plaintiffs. See Civil Rights Act of 1991, Pub.L. No. 102-166, § 105(a), 105 Stat. 1071, 1074-75 (adding 42 U.S.C. § 2000e-2(k)).1 The availability of a disparate impact theory under the ADEA, however, is not so clear. In Hazen Paper Co. v. Biggins, the Supreme Court expressly declined to weigh in on whether the ADEA entitles a plaintiff to bring a disparate impact cause of action, stating that "we have never decided whether a disparate impact theory of liability is available under the ADEA, and we need not do so here." 507 U.S. at 610, 113 S.Ct. 1701 (internal citation omitted).
11
This express reservation has led to a debate amongst the courts of appeals regarding whether the ADEA, like Title VII, entitles a plaintiff to bring a disparate impact claim. Those courts of appeals extending the holding in Griggs to the ADEA do so based on the textual similarities between the prohibitory sections of the ADEA and Title VII. See Frank v. United Airlines, Inc., 216 F.3d 845, 856 (9th Cir.2000) (stating, post-Hazen, that "[w]e see no reason to depart from our conclusion ... and we again hold that a disparate impact claim is cognizable under the ADEA"); Criley v. Delta Air Lines Inc., 119 F.3d 102, 105 (2d Cir.1997) (following, without discussion, pre-Hazen law in stating that "in our circuit, we have recognized such a[ ] [disparate impact] action"); Smith v. City of Des Moines, 99 F.3d 1466, 1470 (8th Cir.1996) (stating that "even if we believed that Hazen Paper cast doubt on the validity of [pre-Hazen case law], Houghton [a post-Hazen case] represents the law of this Circuit" and must therefore be followed). Those courts of appeals declining to hold that a disparate impact theory is cognizable under the ADEA recognize the significant textual overlap in the prohibitory sections of the ADEA and Title VII, but they also look beyond this similarity, examining the entire ADEA statute (and the purpose behind its enactment) and finding important differences between the ADEA and Title VII that counsel against extending the Griggs holding to the ADEA context. See Adams v. Fla. Power Corp., 255 F.3d 1322, 1325-26 (11th Cir.) (holding that disparate impact claims may not be brought under the ADEA, in part because "the history of the ADEA differs from the legislative history of Title VII, which the Supreme Court in Griggs relied on to find a cause of action for disparate impact"), cert. granted, 534 U.S. 1054, 122 S.Ct. 643, 151 L.Ed.2d 561 (2001), cert. dismissed, 535 U.S. 228, 122 S.Ct. 1290, 152 L.Ed.2d 345 (2002); Mullin, 164 F.3d at 703 ("Congress never intended to make a disparate impact cause of action available under the ADEA."); Maier v. Lucent Tech., Inc., 120 F.3d 730, 735 (7th Cir.1997) ("[S]uch a theory of liability [disparate impact] is not cognizable under the ADEA."); Ellis, 73 F.3d at 1001 ("[W]e hold that ADEA claims cannot be based on a disparate impact theory of discrimination.").2
12
After surveying the well-traversed arguments on either side of this debate, we hold that the ADEA was not intended to remedy age-disparate effects that arise from the application of employment plans or practices that are not based on age. Fundamental to our decision is the ADEA's express exception permitting employer conduct based on "reasonable factors other than age" — an exception absent from Title VII — and the inapplicability to the ADEA context of the policy justifications identified by the Supreme Court (in Griggs, 401 U.S. at 430-31, 91 S.Ct. 849) for recognizing a disparate impact cause of action in the Title VII context.
13
A. Similarities Between the ADEA and Title VII
14
The construction of a statute begins with the text of the statute itself. The ADEA prohibits discrimination on the basis of age. See 29 U.S.C. § 623 (2000). It was enacted in 1967, before the Supreme Court first interpreted Title VII to allow employees to prove discrimination by showing disparate impact. See Griggs, 401 U.S. at 431, 91 S.Ct. 849. The plaintiffs correctly identify the core sections expressly prohibiting discrimination "because of [an] individual's age" in the ADEA — § 623(a)(1) and (a)(2) — as overlapping almost identically with the core sections expressly prohibiting discrimination "because of [an] individual's race, color, religion, sex, or national origin" in Title VII — 42 U.S.C. § 2000e-2(a)(1) and (2).3 This is no coincidence; "the prohibitions of the ADEA were derived in haec verba from Title VII." Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978). The only differences in the prohibitory language contained in these statutes are: (1) Title VII protects against discrimination on the basis of "race, color, religion, sex, or national origin," while the ADEA protects against discrimination on the basis of "age"; and (2) Title VII extends protection also to "applicants" for employment, while the ADEA does not.
15
Although the ADEA's prohibitory provisions are at first blush read most naturally as outlawing only conduct motivated by age — the statute refers to actions taken "because of" age — Griggs of course held that parallel language in Title VII prohibited actions that had a race-disparate impact, irrespective of motive or intent. The significant overlap between the prohibitory sections of the ADEA and of Title VII persuaded the Second Circuit to hold early on, with little discussion, that a disparate impact theory of liability is likewise available under the ADEA. See Geller v. Markham, 635 F.2d 1027, 1031-32 (2d Cir. 1980).4 The Eighth and Ninth Circuits soon followed suit, again without any significant inquiry apart from drawing a parallel to Title VII. See Leftwich v. Harris-Stowe State Coll., 702 F.2d 686, 690 (8th Cir.1983); Douglas v. Anderson, 656 F.2d 528, 531 n. 1 (9th Cir.1981).5 As noted earlier, these circuits continue to follow that position.6
16
While the First, Seventh, Tenth, and Eleventh Circuits have likewise approached the statutory construction of the ADEA by looking at the text of the ADEA, they have (we think correctly) declined to limit their construction calculus solely to the prohibitory sections of the ADEA and Title VII. Instead, as we explore below, they look to the entire statute and legislative history of the ADEA to recognize important textual and policy-based differences between the ADEA and Title VII that demonstrate an intention on the part of Congress to allow for claims of intentional age discrimination, but not for claims of disparate impact discrimination.
17
B. Differences Between the ADEA and Title VII
18
(1) Section 623(f)(1) of the ADEA
19
The ADEA's prohibitions against age discrimination in employment are qualified by several exceptions to employer liability set forth in § 623(f). Pursuant to one of these exceptions, an employer can avoid liability under the ADEA if the adverse employment action is "based on reasonable factors other than age." 29 U.S.C. § 623(f)(1).7
20
Neither the "reasonable factors other than age" exception nor a parallel provision is found in Title VII. Facially, the exception appears to serve as a safe harbor for employers who can demonstrate that they based their employment action on a reasonable non-age factor, even if the decision leads to an age-disparate result. In a pre-Hazen dissenting opinion, Judge Easterbrook argues against recognizing a disparate impact theory of liability under the ADEA based on this "reasonable factors other than age" exception:
21
[Section (f)(1)], which says that "reasonable factors other than age" may be the basis of decision — impl[ies] strongly that the employer may use a ground of decision that is not age, even if it varies with age. What else could be the purpose of this language? Surely it does not mean simply that "only age discrimination is age discrimination." "The prohibition and the exception appear identical. The sentence is incomprehensible unless the prohibition forbids disparate treatment and the exception authorizes disparate impact."
22
Metz v. Transit Mix, Inc., 828 F.2d 1202, 1220 (7th Cir.1987) (Easterbrook, J., dissenting) (quoting Douglas Laycock, Continuing Violations, Disparate Impact in Compensation, and Other Title VII Issues, 49 L. & CONTEMP. PROBS. 53, 55 (1986)). Post-Hazen case law likewise reads the inclusion of the "reasonable factors other than age" exception to imply a congressional intent to remedy only intentional discrimination because of age through the passage of the ADEA. For example, the First Circuit states:
23
A critical asymmetry in the texts of the ADEA and Title VII counsels convincingly against recognizing a disparate impact cause of action under the former statute.... This ["reasonable factors other than age"] proviso permits employers to utilize factors other than age as grounds for employment-related decisions that differentially impact members of the protected class (individuals between the ages of 40 and 69). When this exception is read with the ADEA's general prohibition against age-based discrimination, the resulting construction follows: it shall be unlawful to "discriminate against any individual ... because of such individual's age," except when "based on ... factors other than age." Thus, if the exception contained in section 623(f)(1) is not understood to preclude disparate impact liability, it becomes nothing more than a bromide to the effect that "only age discrimination is age discrimination."
24
Mullin, 164 F.3d at 701-02. We too find that the inclusion of the "reasonable factors other than age" exception to the ADEA creates a critical "asymmetry" between the ADEA and Title VII.8 The addition of this broad exception to the ADEA, on its face, appears to preclude a disparate impact theory of liability under the ADEA; at a minimum, it amounts to a salient textual difference between the substantive liability provisions of the ADEA and Title VII—a difference not mentioned by any of the courts of appeals which have extended Griggs to the ADEA context.9
25
While we believe that the "reasonable factors other than age" provision counsels against recognizing a disparate impact theory under the ADEA, we would not go so far as to say that it rules out any alternative reading. As the dissent argues, the prohibitory section and the "reasonable factors other than age" clause could together be read as announcing a general rule that disparate impact is actionable but then carving out a defense for adverse impacts that can be justified as a business necessity. The dissent's position is, of course, essentially how the courts have treated claims under Title VII. We do not believe this course is open to us, however. This circuit long ago held that § 623(f)(1)'s "reasonable factors other than age" provision does not create an affirmative defense to liability; rather, it allows the defendant to bring forward evidence to negate the plaintiff's prima facie case. See Marshall v. Westinghouse Elec. Corp., 576 F.2d 588, 590-91 (5th Cir.1978). Furthermore, whether or not § 623(f)(1) is technically treated as a defense, we do not think that the reference to "reasonable factors other than age" can be taken to mean that all practices having a disparate impact are illegal unless they meet the stringent requirements of "business necessity." Indeed, the Supreme Court has suggested a different meaning for the clause, stating that it "insure[s] that employers [are] permitted to use neutral criteria not directly dependent on age." EEOC v. Wyoming, 460 U.S. 226, 232-33, 103 S.Ct. 1054, 75 L.Ed.2d 18 (1983) (emphasis added); cf. Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 88, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000) ("The exception simply makes clear that `[t]he employer cannot rely on age as a proxy for an employee's remaining characteristics, such as productivity, but must instead focus on those factors directly.'" (quoting Hazen, 507 U.S. at 611, 113 S.Ct. 1701)). Therefore, we would not read the "reasonable factors other than age" clause as a limited derogation from a general prohibition against disparate impact. Instead, we believe that the soundest reading of the whole text is that the ADEA does not prohibit employers from taking actions based on non-age factors, except when those non-age factors are so related to age that they are mere proxies.10 This reading of the text is also powerfully supported by the legislative history, to which we turn in Part III.B.2 of our opinion.
26
The conclusion that this "reasonable factors other than age" exception textually precludes a disparate impact theory of liability under the ADEA is arguably strengthened by the Supreme Court's treatment of a similar exception to the Equal Pay Act. The Equal Pay Act was originally enacted in 1963 (as an amendment to the Fair Labor Standards Act) to prohibit discrimination in wages based on gender. Corning Glass Works v. Brennan, 417 U.S. 188, 195, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974). Under subsection (d), entitled "Prohibition of sex discrimination," in Title 29, section 206, the Equal Pay Act contains an exception similar to the "reasonable factors other than age" exception found in the ADEA:
27
No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex ... except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex: Provided, That an employer who is paying a wage rate differential in violation of this subsection shall not, in order to comply with the provisions of this subsection, reduce the wage rate of any employee.
28
29 U.S.C. § 206(d)(1) (emphasis added). The Supreme Court has interpreted this exception to preclude actions based on disparate impact theories under the Equal Pay Act. See County of Washington v. Gunther, 452 U.S. 161, 169-71, 101 S.Ct. 2242, 68 L.Ed.2d 751 (1981); Los Angeles Dep't of Water & Power v. Manhart, 435 U.S. 702, 710, 98 S.Ct. 1370, 55 L.Ed.2d 657 (1978). For example, in Manhart, a class action was brought on behalf of female employees of the Los Angeles Department of Water and Power challenging the Department's requirement that female employees make larger contributions to its pension fund than male employees. 435 U.S. at 704, 98 S.Ct. 1370. The requirement was based on a study of mortality tables which revealed that, on the average, the Department's female employees lived a few years longer than its male employees. Id. at 705, 98 S.Ct. 1370. In footnote 20, Justice Stevens, writing for the Court, interpreted the "any factor other than sex" exception to the Equal Pay Act:
29
A variation on the Department's fairness theme is the suggestion that a gender-neutral pension plan would itself violate Title VII because of its disproportionately heavy impact on male employees. Cf. Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158. This suggestion has no force in the sex discrimination context because each retiree's total pension benefits are ultimately determined by his actual life span; any differential in benefits paid to men and women in the aggregate is thus "based on [a] factor other than sex," and consequently immune from challenge under the Equal Pay Act....
30
Id. at 710 n. 20, 98 S.Ct. 1370 (alteration in original).
31
The Court's willingness to find that the Equal Pay Act's "any factor other than sex" exception precludes disparate impact theories of liability under the Equal Pay Act is helpful to our statutory construction of the ADEA. Many provisions in the ADEA have their roots in the Fair Labor Standards Act and the Equal Pay Act. See, e.g., Lorillard, 434 U.S. at 577-82, 98 S.Ct. 866 (discussing the Fair Labor Standards Act as the "model" for the enforcement and remedial provisions to the ADEA). Although legislative history on § 623(f)(1) is slim, we find it likely that the ADEA's "reasonable factors other than age" exception was spawned from the Equal Pay Act's "any factor other than sex" exception, especially given that no parallel exception is found in Title VII.11
32
We recognize that the exceptions found in the ADEA and the Equal Pay Act are not identical. The most notable difference, emphasized by our colleague in dissent, is the inclusion of the word "reasonable" in the ADEA's exception. However, we, like the Eleventh Circuit in Adams, decline to infer from the inclusion of the word "reasonable" that Congress meant to create an implicit background rule that actions resulting in an age-disparate impact are as a general matter proscribed. See 255 F.3d at 1325 n. 6. As we explained above, we believe the better reading is not that the clause acts as a limited defense against disparate impact claims but rather that the clause signals that impacts resulting from neutral criteria not directly dependent on age are not prohibited in the first place. At the very least, we recognize the "reasonable factors other than age" exception as a clear textual difference between the ADEA and Title VII regarding employer liability — a distinction that, if nothing else, plainly contradicts the argument that the cognizability of a disparate impact claim under Title VII (as set forth in Griggs) controls the cognizability of a disparate impact claim under the ADEA.12
33
(2) Legislative History and Policy Considerations
34
In addition to the § 623(f)(1) exception to the ADEA, strong policy considerations, revealed in the legislative history of the ADEA, underscore the differences between the ADEA and Title VII. Because the broad remedial purpose behind Title VII was central to the Court's statutory construction of Title VII in Griggs, the difference between the purposes behind the ADEA and Title VII is directly relevant to whether a disparate impact theory is cognizable under the ADEA.
35
Congress enacted the ADEA after receiving a 1965 report by the Secretary of Labor regarding the problems of older workers. See EEOC v. Wyoming, 460 U.S. at 230-31, 103 S.Ct. 1054. For our purposes, it is significant that the Secretary's report finds "no evidence of prejudice based on dislike or intolerance of the older worker" and concludes that the main problem older workers faced in the workplace was arbitrary age discrimination — namely explicit age limitations — based on misconceptions about the abilities of older workers. U.S. DEP'T OF LABOR, THE OLDER AMERICAN WORKER: AGE DISCRIMINATION IN EMPLOYMENT 2, 6 (1965) (the "Report"), reprinted in EEOC, LEGISLATIVE HISTORY OF THE AGE DISCRIMINATION IN EMPLOYMENT ACT 16 (1981) (hereinafter LEGISLATIVE HISTORY). The Report further specifically finds that the concept of age prejudice is unique and differs from the concept of race prejudice because the process of aging "is inescapable, affecting everyone who lives long enough," regardless of distinct social and economic environments. Id. at 6. The Report likewise distinguishes between "arbitrary discrimination" based on age and other institutional arrangements that have a disproportionate effect on older workers, finding that different solutions were appropriate for these different problems. Id. at 21-25; see also Mullin, 164 F.3d at 703 (describing the Report as "recommend[ing] that arbitrary discrimination be statutorily prohibited, but that systemic disadvantages incidentally afflicting older workers be addressed through educational programs and institutional restructuring").13 These findings were "confirmed throughout the extensive factfinding undertaken by the Executive Branch and Congress" in conjunction with the enactment of the ADEA. EEOC v. Wyoming, 460 U.S. at 230-31, 103 S.Ct. 1054.
36
On January 23, 1967, the Secretary transmitted to Congress proposed legislation entitled "Age Discrimination in Employment Act of 1967." Letter from W. Willard Wirtz to Hon. John W. McCormack and Hon. Hubert H. Humphrey, Jan. 23, 1967, reprinted in LEGISLATIVE HISTORY at 62-63. In this letter, the Secretary notes that the bill "provides for attention to be given to institutional arrangements which work to the disadvantage of older workers," but that "[r]easonable differentiations not based solely on age ... would not fall within the proscription" of the bill. Id. Instead, the Secretary recommended that "research ... be undertaken and promoted with a view to reducing barriers to the employment of older workers." Id. at 63. The Report, this proposed bill, and subsequent factfinding by the Executive Branch and Congress led Congress to limit the purpose of the ADEA specifically "to prohibit[ing] arbitrary age discrimination in employment." 29 U.S.C. § 621(b).
37
In contrast to the refined purpose evidenced in the historical underpinnings of the ADEA's enactment, the Supreme Court's opinion in Griggs discusses Title VII's broad remedial purpose. The defendant company in Griggs instituted a policy of permitting incumbent employees who lacked a high school education to qualify for transfer from the labor and coal handling department to an "inside" department by passing two tests of general intelligence — "[n]either [of which] was directed or intended to measure the ability to learn to perform a particular job or category of jobs." 401 U.S. at 427-28, 91 S.Ct. 849. Prior to the effective date of Title VII, the defendant had instituted a policy of "restricting Negroes" to the labor and coal handling department in 1965. Id. at 427, 91 S.Ct. 849.
38
Chief Justice Burger, writing for the Court, held that Congress's objective in enacting Title VII was to "achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees." Id. at 429-30, 91 S.Ct. 849. Based on this objective, the Court held that "practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to `freeze' the status quo of prior discriminatory employment practices." Id. at 430, 91 S.Ct. 849.
39
The cornerstone of Griggs's holding that disparate impact is cognizable under Title VII is thus the link between the history of educational discrimination on the basis of race and the use of that discrimination to continue to disadvantage individuals on the basis of their race. Id. at 432, 91 S.Ct. 849 (stating that "good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as `built-in headwinds' for minority groups and are unrelated to measuring job capability"); see also Gunther, 452 U.S. at 178, 101 S.Ct. 2242 (describing the "broad approach" of Title VII as aimed at "overcoming and undoing the effect of discrimination") (internal quotation marks omitted). However, absent from the scope of the ADEA are the historical and remedial concerns that, in the Title VII context, led to the recognition of disparate impact claims directed at overcoming the consequences of past societal discrimination.
40
As Justice Stevens explained in his concurring opinion in Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976), it is "inappropriate simply to transplant... standards in their entirety into a different statutory scheme having a different history." Id. at 255, 96 S.Ct. 2040 (Stevens, J., concurring). We heed this advice today and therefore follow the majority of circuit courts to have addressed this issue in holding that a disparate impact theory of liability is not cognizable under the ADEA. We find insufficient textual support for the recognition of a disparate impact theory of liability in the ADEA. Further, as we see it, the conclusion that the holding in Griggs should be extended to the ADEA context based on the similarities in the prohibitory sections of the ADEA and Title VII ignores important considerations. It ignores the existence of § 623(f)(1) — an express exclusion of employer liability that is present in the ADEA but not present in parallel form in Title VII — and it ignores the differing purposes behind the ADEA and Title VII.14
IV.
THE PLAINTIFFS' DISPARATE TREATMENT CLAIM
41
In contrast to the plaintiffs' disparate impact claim, the plaintiffs' disparate treatment claim is cognizable under the ADEA.
A. McDonnell Douglas Framework
42
We have interpreted the now-familiar McDonnell Douglas framework to apply to disparate treatment claims brought under the ADEA. Tyler v. Union Oil Co. of Cal., 304 F.3d 379, 395 (5th Cir.2002). To make out a prima facie case of discriminatory treatment based on age, the plaintiffs are required to prove: (1) they are within the protected class; (2) they are qualified for the position; (3) they suffered an adverse employment decision; and (4) they were replaced by someone younger or treated less favorably than similarly situated younger employees (i.e., suffered from disparate treatment because of membership in the protected class). Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 897 (5th Cir.2002); see also Kelliher v. Veneman, 313 F.3d 1270, 1275 (11th Cir.2002).
43
If the plaintiffs make out their prima facie case, then the burden of production shifts to the defendants to articulate a legitimate, nondiscriminatory reason for the adverse employment action. Tyler, 304 F.3d at 395. If the defendants meet this burden of production, the inference of discrimination drops, and the plaintiffs may then attempt to prove discrimination by offering evidence that the defendants' stated reason is pretextual. Id. ("In a disparate treatment case ... a plaintiff must produce sufficient evidence to rebut a showing by the employer that there was a legitimate, non-discriminatory reason for [differentially treating] a particular employee.").
44
Here, the district court dismissed the plaintiffs' disparate treatment claim because the plaintiffs could not make out their prima facie case based on the evidence available to them at the time their responsive briefing was filed. The district court cited this evidence as consisting of: (1) evidence that the Personnel Director for the City of Jackson, Dr. George Terry, represented that the plan considered tenure only once; and (2) evidence that certain officers were subjected to age-related comments by Dr. Terry, Officer Deric Hearn, and Deputy Chief Cleon Butler. The district court additionally held that the plaintiffs' evidence, as a matter of law, was insufficient to disprove the defendants' legitimate nondiscriminatory reasons for their employment decision — to bring starting salaries for police officers up to the regional average, to develop a more generous pay scale within the confines of the city budget, and to consider tenure in the pay scale.
B. The Plaintiffs' Pending Motions
45
When the district court dismissed the plaintiffs' disparate treatment claim, two motions were pending: (1) a "motion for sanctions, a default judgment, attorneys' fees and expenses, expert witness fees and a continuance," filed by the plaintiffs on June 5, 2002; and (2) a "motion to strike exhibits to defendants' motion for summary judgment," filed by the plaintiffs on July 11, 2002.
46
The June 5, 2002, motion sought comparative wage data relating to the plan, as originally implemented in October 1998 and as revised in March 1999. It also sought to compel disclosure of any related fiscal and personnel discovery in accordance with the order of the magistrate judge granting the plaintiffs' motion to compel. Finally, the motion sought a continuance of the discovery period in order to allow the defendants to produce discovery materials previously requested and to allow the plaintiffs an opportunity to further develop their case based on this new evidence.
47
The July 11, 2002, motion sought to strike certain exhibits from the defendants' motion for summary judgment, in part because as to certain of these data produced as exhibits, "[t]he counsel for the Defendants [had] insisted that no such wage data existed," and "these data's purported existence and importance were never provided to the Plaintiffs until it was utilized by an Expert for the Defense."
48
Curiously, the district court did not rule on these motions. Instead, in deciding to grant the defendants' motion for summary judgment, the district court simply considered the evidence available to the plaintiffs at the time of their responsive briefing. After granting summary judgment in favor of the defendants as to the plaintiffs' disparate treatment claim, the court then disposed of the plaintiffs' pending motions by stating that "[b]ecause the Court finds that Plaintiffs cannot meet their burden of proof for claims of disparate treatment under the ADEA, the other motions of Plaintiffs in opposition to the Motion of Defendant for Summary Judgment related to claims for disparate treatment are moot."
49
On appeal, the plaintiffs contend that the dismissal of their disparate treatment claim was premature because they "were not allowed to enforce their requests for discovery or to complete scheduled depositions that had been recessed when the plaintiffs learned that significant information had been willfully withheld from them."
50
C. Analysis of the District Court's Conclusions
51
The district court may have conflated the plaintiffs' burdens of production and persuasion in concluding that the plaintiffs failed to meet their burden of demonstrating a genuine fact issue regarding their disparate treatment claim.15 However, we need not address this issue because, upon review, we agree with the plaintiffs that summary judgment on the plaintiffs' disparate treatment claim was premature in light of the plaintiffs' pending motions before the district court, particularly given the allegation included in these motions that the defendants have failed to comply with the order of the magistrate judge.
52
The magistrate judge clearly ordered the defendants to turn over various discovery documents, including documents that were responsive to the plaintiffs' initial disclosure request. These documents apparently include the working papers used by city officials in drafting the new and revised plans, as well as evidence regarding comparative wage data — including memoranda and other documentation related to the March 1, 1999, City of Jackson Pay Plan Revision, signed by all pertinent department heads, the existence of which was initially denied by the defendants. The plaintiffs allege that this evidence provides additional documentation verifying the extent of the disparity between wage increases for officers under the age of forty and officers over the age of forty. The plaintiffs also allege that this evidence provides them with documentation regarding the defendants' knowledge that, at least at the time the defendants revised the plan, the plan would result in inferior pay status for older workers when compared to younger workers. This evidence appears to us to be relevant to the plaintiffs' prima facie case and to their ultimate burden required to counter the defendants' proffered reasons for implementing the pay plan.16 While much of this evidence relates primarily to the plaintiffs' now-dismissed disparate impact claim, the impact evidence may also support a permissible inference of intentional discrimination and, as the plaintiffs argue, may relate to whether one of the defendants' proffered justifications — to bring salaries up to the regional average — is false.
53
We do not decide whether the defendants have, in fact, failed to comply with the magistrate judge's order, whether the motion to continue discovery should be granted, or whether the plaintiffs' other pending motions have merit. Rather, we simply hold that the district court should have addressed these motions before it ruled, on an apparently incomplete summary judgment record, that the plaintiffs had not met their burden of demonstrating the existence of genuine fact issues regarding their disparate treatment claim. If the defendants did not comply with their discovery obligations such that the plaintiffs were prohibited from presenting their best case to the district court, summary judgment in favor of the defendants improperly denied the plaintiffs an opportunity to continue discovery and supplement the record. Sunbelt Sav., FSB v. Montross, 923 F.2d 353, 357, 358 (5th Cir.1991) (holding that summary judgment was premature when discovery was still pending).
54
The history of the discovery disputes plaguing this case and the existence of pending motions alleging that the plaintiffs' ability to present their best case was significantly hindered by the defendants' failure to comply with their discovery obligations convinces us that the summary judgment dismissal of the plaintiffs' disparate treatment claim was premature. On remand, the district court may want to take into account, in ruling on the pending motions, our decision on the viability of the disparate impact claim.
V.
CONCLUSION
55
We AFFIRM in part, VACATE in part, and REMAND the case to the district court. Costs shall be borne by appellees.
Notes:
1
We note that the same statute did not make a parallel amendment to the ADEA, although it did amend the ADEA in other ways. Some of our sister circuits have concluded that this omission (together with other factors) indicates a congressional intent that a disparate impact cause of action not be available under the ADEASee Mullin v. Raytheon Co., 164 F.3d 696, 703 (1st Cir.1999); Ellis v. United Airlines, Inc., 73 F.3d 999, 1008 (10th Cir. 1996). Such congressional inaction is susceptible of multiple interpretations, however, and so we should hesitate before we draw inferences from it. See Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 306, 108 S.Ct. 1145, 99 L.Ed.2d 316 (1988). The Civil Rights Act of 1991 was mainly aimed at overriding certain interpretations of Title VII, and so we do not find it especially probative with respect to the question before us today. Accordingly, our interpretation of the ADEA, set forth later in this opinion, rests on other grounds.
2
AfterHazen, the Third and the Sixth Circuits have both expressed "considerable doubt" regarding whether a claim of age discrimination may be stated under a disparate impact theory. Lyon v. Ohio Educ. Ass'n & Prof'l Staff Union, 53 F.3d 135, 139 n. 5 (6th Cir.1995) ("The Court's focus in Hazen Paper on Congress's intent to prevent discrimination based on inaccurate and damaging stereo-types suggests that incidental discriminatory effects arising from facially age-neutral policies are not redressable."); DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 732 (3d Cir.1995) (opinion of Greenberg, J.) (stating that "the analysis in Hazen casts considerable doubt on the viability of the theory"). However, in neither case was the issue directly before the court.
3
Section 623's prohibitory subsections provide, in relevant part, that it is unlawful for an employer:
(1) to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age;
(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's age....
29 U.S.C. § 623(a)(1)-(2). The prohibitory subsections of Title VII provide, in relevant part, that it is unlawful for an employer:
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or
(2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.
42 U.S.C. § 2000e-2(a)(1)-(2).
4
Then-Justice Rehnquist dissented from the denial of certiorari inGeller, 451 U.S. 945, 101 S.Ct. 2028, 68 L.Ed.2d 332 (1981). In so doing, he stated that "[i]n my opinion, the decision of the Court of Appeals is inconsistent with the express provisions of the ADEA and is not supported by any prior decision of this Court." Id. at 947, 101 S.Ct. 2028.
5
At around the same time, the EEOC issued new interpretive guidelines for the conduct of ADEA cases. We note that one portion of those guidelines seems to be based on the assumption that theGriggs framework applies to ADEA cases. See 46 Fed.Reg. 47,724, 47,725 (1981) (Sept. 29, 1981) (amending 29 C.F.R. § 1625.7(d)). Such guidelines are not entitled to Chevron deference. Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000); EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 256-58, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991). We are of course still bound to treat them as having persuasive force, to the extent that they are thoughtfully considered. See Christensen, 529 U.S. at 587, 120 S.Ct. 1655. The guideline in question does not purport to affirmatively establish that a disparate impact theory is available. Instead, it simply assumes, on the basis of Griggs, that such a theory is available. See 46 Fed.Reg. at 47,725. Given the absence of significant analysis, and in light of subsequent developments that have cast doubt on that assumption, we do not believe that this administrative guidance is convincing authority.
6
The Seventh Circuit, which had originally permitted disparate impact suits under the ADEA, changed course afterHazen. See EEOC v. Francis W. Parker Sch., 41 F.3d 1073 (7th Cir.1994).
7
Section 623(f)(1) provides, in relevant part:
It shall not be unlawful for an employer, employment agency, or labor organization —
(1) to take any action otherwise prohibited under subsections (a), (b), (c), or (e) of this section where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age....
29 U.S.C. § 623(f)(1).
8
In his dissent from the denial of certiorari inGeller, then-Justice Rehnquist likewise focused on § 623(f)(1) to support his view that Congress did not intend that a disparate impact claim be cognizable under the ADEA:
In my view, Congress did not intend the ADEA to have the restraining influence on local governments which will result from the decision below. Congress revealed this intention in 29 U.S.C. § 623(f)(1), which provides that it shall not be unlawful for an employer to take any action otherwise prohibited "where the differentiation is based on reasonable factors other than age."
Geller, 451 U.S. at 948-49, 101 S.Ct. 2028 (Rehnquist, J., dissenting from denial of cert.).
9
This difference between the statutes also means that the rule ofin pari materia, heavily relied upon by our colleague in dissent, is largely inapplicable to this case. For while we usually endeavor to give like language the same meaning, it is a cardinal rule of statutory interpretation that we are to consider the whole act, reading each section in light of the others. E.g., United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988) ("Statutory construction, however, is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme....").
10
In order to resolve this case, we need not speculate on what such factors might be. The Supreme Court held inHazen that adverse employment actions based on job tenure do not, without more, amount to disparate treatment based on age. 507 U.S. at 611-12, 113 S.Ct. 1701.
11
See Mack A. Player, Wards Cove Packing or Not Wards Cove Packing? That Is Not the Question: Some Thoughts on Impact Analysis Under the Age Discrimination in Employment Act, 31 U. RICH. L.REV. 819, 833-34 (1997) ("Note the similarity of the Equal Pay Act and ADEA `factor other than ...' defenses. Guess the origins.... Until the mid-1970s the Secretary of Labor administered and enforced the Equal Pay Act. The Secretary of Labor was charged by Congress ... to prepare a report on age discrimination and recommend legislation to Congress. The initial drafts of what eventually became the ADEA were thus prepared by the Secretary of Labor.... It would seem, therefore, that the Secretary who was then enforcing the Equal Pay Act, lifted language and concept from the Equal Pay Act and placed it in the ADEA.").
12
Before turning to the legislative history of the ADEA, we note that we do not share the dissent's view of the import of the Older Workers Benefit Protection Act, Pub.L. No. 101-433, 104 Stat. 978 (1990) ("OWBPA"). The OWBPA added a provision to the ADEA requiring employers in certain circumstances to provide laid off employees with data relating to the ages of employees who are laid off versus those who retain their jobsSee 29 U.S.C. § 626(f). According to the dissent, such statistics would have little use if the ADEA did not allow a disparate impact cause of action. We would not draw that inference, however, for such statistical evidence is quite useful in disparate treatment cases. See Teamsters, 431 U.S. at 339, 97 S.Ct. 1843; McDonnell Douglas Corp. v. Green, 411 U.S. 792, 805, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Anderson v. Douglas & Lomason Co., 26 F.3d 1277, 1285 (5th Cir.1994). Moreover, the legislative history of the OWBPA shows that Congress believed that such statistics would help to alert discharged employees to the possibility that they might have suffered disparate treatment based on age. See H.R. REP. No. 101-664, at 22 (1990) (expressing the concern that in large-scale layoffs, "an individual employee would not reasonably be expected to know or suspect that age may have played a role in the employer's decision, or that the program may be designed to remove older workers from the labor force").
13
We recognize that the Report found that discriminatory practices were often "defended on grounds apparently different from their actual explanation." Report at 7. We disagree, however, with the dissent's conclusion that Congress therefore must have intended to create a cause of action for disparate impact. The practices to which the Report was referring were age limitations, a form of disparate treatmentSee id. Age limitations were, in fact, the dominant form of arbitrary discrimination addressed in the Report. Such restrictions are "arbitrary," according to the Report, in that they are based on stereotype-driven assumptions about older workers rather than on older workers' actual abilities. Id. at 2, 8. When an employer's practices are motivated by neutral, non-age factors, however, "the problem of inaccurate and stigmatizing stereotypes disappears." Hazen, 507 U.S. at 611, 113 S.Ct. 1701. The mischief identified in the Report is therefore more accurately targeted by a disparate treatment theory, not a disparate impact theory.
14
Although it was not essential to the Court's holding inHazen Paper Co., there is language in the opinion that supports our conclusion that a disparate impact claim is not cognizable under the ADEA. There, a discharged employee (who was 62) brought suit against his employers after they discharged him only a few weeks before his pension rights were to vest, contending that the employers' decision was motivated by his age. 507 U.S. at 606, 113 S.Ct. 1701. The First Circuit affirmed the judgment for the plaintiff employee, entered by the district court consistent with the jury verdict in favor of the employee. Id. at 607, 113 S.Ct. 1701. In so doing, the court of appeals gave "considerable emphasis" to the evidence of pension interference because, in the court of appeals's view, the jury could reasonably have found that age was inextricably intertwined with the decision to fire the employee before his pension rights vested. Id. The Supreme Court vacated this judgment. Id. at 617, 113 S.Ct. 1701. Importantly, the employee did not base his claim for relief on a disparate impact theory of liability. Id. at 610, 113 S.Ct. 1701. Nonetheless, in holding that "an employer does not violate the ADEA just by interfering with an older employee's pension benefits that would have vested by virtue of the employee's years of service," id. at 613, 113 S.Ct. 1701, the Court stated that "[d]isparate treatment ... captures the essence of what Congress sought to prohibit in the ADEA." Id. at 610, 113 S.Ct. 1701. Further, the Court specifically discussed the decided purpose of the ADEA — i.e., to prevent "arbitrary" discrimination based on inaccurate stereotyping regarding older workers: "When the employer's decision is wholly motivated by factors other than age, the problem of inaccurate and stigmatizing stereotypes disappears. This is true even if the motivating factor is correlated with age, as pension status typically is." Id. at 611, 113 S.Ct. 1701 (emphasis omitted).
15
For example, although not ultimately relevant to our determination on appeal, the district court required that the plaintiffs prove, as part of their initial prima facie burden, "unlawful motive" to discriminate because of age instead of requiring that the plaintiffs demonstrate replacement by someone younger or differential treatment of younger, similarly situated officersSee Sandstad, 309 F.3d at 897. The district court also appears to have used pre-Reeves case law in discussing the plaintiffs' ultimate burden of proving unlawful discrimination under the ADEA. See, e.g., Ross v. Univ. of Tex. at San Antonio, 139 F.3d 521, 525 (5th Cir.1998). As the Supreme Court stated in Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 148, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000), "a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated." Further, the district court here apparently declined, without discussion, to consider any of the plaintiffs' evidence that the plan resulted in a disparity of four standard deviations between workers over forty and workers under forty. Such statistical evidence can be relevant to a claim of intentional discrimination. See supra note 12.
16
Our ability to determine the degree to which this requested evidence will ultimately benefit the plaintiffs is made difficult by the absence in the record of the parties' briefs in support of and against the defendants' motion for summary judgment and the failure of the plaintiffs to request that these briefs be supplemented to the record on appeal
56
CARL E. STEWART, Circuit Judge, concurring in part, dissenting in part:
57
While I agree with the majority's disposition of plaintiff's disparate treatment claim in Part IV of the opinion, I also believe that the district court erred in improvidently dismissing the plaintiff's disparate impact claim and, therefore, I must dissent with regard to Part III.
58
This marks the first time our court has had to squarely decide, in the aftermath of Hazen Paper v. Biggins, 507 U.S. 604, 113 S.Ct. 1701, 123 L.Ed.2d 338 (1993), whether a disparate impact claim may be formulated under the ADEA. I, however, am not thoroughly convinced by the majority's attempt to distinguish between two statutes — the ADEA and Title VII — whose text is virtually the same, that Congress meant to imply a disparate impact claim to the latter, but to preclude such a claim in the former. Equally, I am not persuaded by the majority's emphasis on the "reasonable factors other than age" ("RFOA") exception. When Congress enacted the ADEA in 1967, the courts had yet to develop a disparate impact theory. Thus, at the time of enactment, it appears that Congress most likely intended the RFOA to apply solely to claims of disparate treatment. Based upon a close reading of the text, the relevant legislative history, subsequent legislative actions, and concerns of public policy, I submit that a proper interpretation of the ADEA allows a disparate impact cause of action.
I. STATUTORY INTERPRETATION OF THE ADEA
59
The majority's analysis begins with the premise that the RFOA exception of the ADEA facially appears as a safe harbor to employers. To the majority, the language of the RFOA exception clearly rejects the theory of disparate impact. The majority relies in part on a pre-Hazen dissent by Judge Easterbrook in Metz v. Transit Mix, Inc., for the proposition that the RFOA exception is "incomprehensible unless the prohibition forbids disparate treatment and the exception authorizes disparate impact." 828 F.2d 1202, 1220 (7th Cir.1987) (emphasis added).
60
Contrary to the majority's conclusion, it is not at all clear from the text that the RFOA exception has no alternative interpretation other than to preclude disparate impact. The RFOA exception aside, the language of the ADEA and Title VII are similar in every other respect. Thus, I cannot conclude, in the absence of expressed language to the contrary, that Congress meant to apply the disparate impact theory to Title VII, but not to the analogous language of the ADEA. Until the United States Supreme Court expressly rules on this issue, I continue to believe that the majority viewpoint is in error. Despite the obvious similarities between Title VII and the ADEA, today's majority joins our fellow courts of the First,1 Third,2 Sixth,3 Seventh,4 Tenth,5 and Eleventh6 Circuits in disclaiming a disparate impact theory under the ADEA.
61
As shown through persuasive precedent from other circuits, however, there is another side to this debate. For example, while acknowledging that post-Hazen the availability of disparate impact claims under the ADEA is unsettled among the circuits, the Second Circuit held that it "generally assesses claims brought under the ADEA identically to those brought pursuant to Title VII, including disparate impact." Smith v. Xerox, 196 F.3d 358, 367 n. 5 (2d Cir.1999). The Second Circuit is not alone. The Eighth Circuit has also stated that it "continues to recognize the viability of ... [ADEA disparate impact] claims." Lewis v. Aerospace Cmty. Credit Union, 114 F.3d 745, 750 (8th Cir.1997); See also EEOC v. McDonnell Douglas Corp., 191 F.3d 948, 950 (8th Cir.1999) (stating that "the law of this circuit is that disparate impact claims are cognizable under the ADEA"). Thus, precedent from other circuits show that a contrary facial interpretation of the RFOA is reasonable.
62
Moreover, the strongest argument against the language of the RFOA exception precluding disparate impact lies in the substantive provisions of the ADEA and Title VII. In a similar case, a concurrence by Eleventh Circuit Judge Barkett acutely noted:
63
[I]n every statutory discrimination case, a decision based upon legitimate business necessity will never support a claim for liability. Griggs itself recognized and repeatedly emphasized that disparate impact is a basis for relief only if the practice in question is not founded on "business necessity," or lacks "a manifest relationship to the employment." [401 U.S. 424, 430-31, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971)]. [The RFOA exception] of the ADEA adds nothing new.
64
... In light of the parallels between the substantive provisions of the ADEA and Title VII, and in light of the fact that Congress has amended the ADEA several times but has never explicitly excluded disparate impact claims, a reasonable interpretation of the [RFOA exception] is that it codifies the business necessity exception to disparate impact claims.
65
Adams, 255 F.3d at 1327-28 (Barkett, J., concurring).
66
I find Judge Barkett's reasoning fully persuasive. Under a theory of disparate impact, employers will still be able to have employment practices and policies that may burden over-age workers in a disproportionate way. These practices will be permissible, despite the disproportionate impact, provided the employer shows they are supported by a business necessity. Upon proving business necessity, the burden shifts to the employee to show that the practice in question was established not because of the legitimacy of the necessity, but merely as a pretext for invidious stereotyping. Therefore, I am not persuaded that adopting a disparate impact theory will lead to any inconsistencies with the RFOA exception.
67
That said, the cornerstone of the majority's holding relies on an analogous provision in the Equal Pay Act ("EPA"). Because the RFOA exception does not exist under Title VII, the majority looks instead to the EPA, which precludes disparate impact claims via its "any factor other than sex" language. The majority attempts to show that the similarities between the RFOA and EPA "any factor" exception should be construed by courts to demonstrate that the RFOA should similarly prohibit disparate impact. See Washington v. Gunther, 452 U.S. 161, 170, 101 S.Ct. 2242, 68 L.Ed.2d 751 (1981) (juxtaposing the EPA's "any factor other than sex" language with Title VII's broadly inclusive prohibition against gender discrimination and stating that the language "confine[d] the application of the Act to wage differentials attributable to sex discrimination.").
68
The flaw in the majority's logic is that the terms "any" and "reasonable" are not synonymous. Under the ADEA, an employer with a disparate impact policy may be liable for age discrimination if factors relied on were not reasonable. Pursuant to the EPA, however, if an employment policy causes wage differences among men and women workers, the employer will not be liable unless the policy in question was based solely on gender. Thus, the ADEA and EPA exceptions cannot be read to have the same meaning unless the word "reasonable" is omitted from the RFOA exception. In this light, the premise of the majority opinion appears little more than ironic in that when it compares statutory language of the ADEA and Title VII to preclude disparate impact, the court advocates a dissimilar reading of almost identical statutes. Yet, when comparing the ADEA to the EPA, with the intent of precluding disparate impact, the majority applies a similar reading of exceptions which differ significantly. I disagree with the majority's analytical approach and its reading of Gunther as indicating that the ADEA cannot bar some "reasonable factors other than age" practices which have a disparate impact on workers over forty.
69
Additionally, the majority's contention that the ADEA and Title VII are not similar statutes, insofar as their application of the disparate impact theory, disregards the doctrine of in pari materia. It has long been held that judicial interpretations of one statute may be informed by interpretations of similar statutes. Lorillard v. Pons, 434 U.S. 575, 580-81, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978) ("[When] Congress adopts a new law incorporating sections of a prior law, Congress normally can be presumed to have had knowledge of the interpretation given to the incorporated law, at least insofar as it affects the new statute."). Under this well established statutory canon, "the interpretation of one statute may be influenced by language of other statutes which are not specifically related, but which apply to similar persons, things, or relationships." Nat. Fed'n of Fed. Employees v. Dep't. of Interior, 526 U.S. 86, 119 S.Ct. 1003, 1013, 143 L.Ed.2d 171 (1999) (defining the doctrine of in pari materia, citing several cases where the Court applied this doctrine to aid in its construction of a variety of statutes, and arguing that the doctrine was now "well established") on remand, 174 F.3d 393 (4th Cir.1999).
70
In the context of the ADEA and Title VII, adhering to this canon is particularly well suited because, as the majority concedes, the ADEA grew out of debates on Title VII. Furthermore, in pari materia has relevance because both aforementioned statutes apply to similar persons (here, the employees) and similar relationships (here, the employment context). Moreover, Congress carefully chose identical language for its statutes dealing with both discrimination against older workers and discrimination against those due to race or gender. Therefore, the majority should have applied the doctrine of in pari materia and interpreted the disparate impact theory as applicable to the ADEA.
II. THE ADEA LEGISLATIVE HISTORY
71
My second point of disagreement with the majority concerns its portrayal of the legislative history of the ADEA. The majority opinion subtly recognizes that the legislative history of the ADEA is not directly on point. Although the majority's opinion properly recognizes that the Supreme Court's 1971 endorsement of the disparate impact theory in Griggs, 401 U.S. at 430-31, 91 S.Ct. 849, was later in time than Congress's enactment of the ADEA in 1967, the majority attempts to support its position by focusing on the underlying purposes of the legislation.
72
Although the language of Title VII and the ADEA are almost identical, the majority essentially dismisses Griggs as irrelevant to the calculus of age discrimination. The majority distinguishes Griggs from the ADEA on the grounds that Griggs interpreted Congress's intent underlying Title VII as sweeping in nature. The majority argues, "[i]n contrast to the refined purpose evidenced in the historical underpinnings to the ADEA's enactment, the Supreme Court's opinion in Griggs discusses Title VII's broad remedial purpose." While it is undoubtably true that Griggs recognized disparate impact theory as an available tool in the employment discrimination toolbox to remedy past discrimination under Title VII, it does not necessarily follow, as the majority asserts, that the disparate impact tool is available only in a remedial context.
73
I disagree in two respects with the majority's holding that disparate impact theory should be limited to the context of Title VII. First, the textual similarity between Title VII and the ADEA evinces a congressional intent to provide similar protection against employment discrimination under the two statutes. Second, it is arguable whether historical discrimination should be a necessary precondition for recognizing a disparate impact theory. I acknowledge, as the majority does, that the ADEA and Title VII are distinct because the former lacks a history tied to past discrimination. In the absence of a clear statement to the contrary, however, I cannot assume that Congress intended to limit the remedial measures available under anti-discrimination statutes with almost identical language merely because the statutes arose out of distinct historical contexts. The Supreme Court in Griggs, for example, did not posit historical discrimination as the sole reason for disparate impact under Title VII; Griggs merely held that a showing of disparate impact was available to remedy this type of discrimination. See Jennifer J. Clemons and Richard A. Bales, ADEA Disparate Impact in the Sixth Circuit, 27 Ohio N.U. L.Rev. 1, 23 (2000). Moreover, the majority's emphasis on the historical posture of the ADEA and Title VII unduly minimizes the statutes shared aim of ridding from the workplace an environment of concealed discrimination. Griggs, 401 U.S. at 431, 91 S.Ct. 849 (stating that Title VII "proscribes not only overt discrimination but also practices that are fair in form, but discriminatory in operation"); EEOC v. Wyoming, 460 U.S. 226, 231, 103 S.Ct. 1054, 75 L.Ed.2d 18 (1983) (stating that the ADEA seeks to remedy "arbitrary" forms of age discrimination "based in large part on stereotypes unsupported by objective facts, and often defended on grounds different from its actual causes"). Consistent with such an aim, a disparate impact theory may be a plaintiff's only tool in counteracting sophisticated discrimination. Therefore, due to the similarity of the ADEA and Title VII language, it is my view that the protection available under both statutes, including that from disparate impact, should also be similar.
74
The majority ignores the fact that Griggs does not stand alone as the only relevant decision applying disparate impact theory. Under Supreme Court precedent, the disparate impact theory has grown beyond its original purpose of alleviating racial discrimination claims. See Dothard v. Rawlinson, 433 U.S. 321, 329-32, 97 S.Ct. 2720, 53 L.Ed.2d 786 (1977) (applying disparate impact theory to Title VII sex discrimination claims). Furthermore, under the 1991 Civil Rights Act, 42 U.S.C. § 2000-e2(k)(1)(A)(I) (1994), disparate impact claims are readily available not only to plaintiffs alleging racial discrimination, but also to those claiming discrimination on the basis of gender, national origin, and religion.7 In light of these developments, I cannot agree with the majority that the ADEA must be limited solely to disparate treatment claims.
75
I also do not agree with the majority's interpretation of the most prominent documentation of all ADEA legislative history, the Wirtz Report.8 The majority uses the Report to bolster its argument that the ADEA was not premised on eradicating past discrimination. The flaw with the majority's use of this most critical evidence of congressional intent is its failure to acknowledge the argument, embodied within the Wirtz Report, that age discrimination was in fact "based in large part on stereotypes unsupported by objective fact, and was often defended on grounds different from its actual cause." See EEOC, 460 U.S. at 231, 103 S.Ct. 1054. The aforementioned conclusion seems to indicate that the ADEA's purpose may not have been limited to eradicating animus, as the majority suggests. Rather, and in contrast to the majority's view, the Wirtz Report indicates that Congress merely intended to utilize the ADEA to eliminate stereotypes that workers' productivity declines with age. That said, I acknowledge that the Wirtz Report is supportive evidence of Congress's intent concerning the ADEA and that the Report did in fact distinguish age discrimination as "rarely based on the sort of animus motivating some other forms of discrimination." My position merely suggests that because the Wirtz Report sheds the best light on Congress's intent in enacting the ADEA, a point the majority does not refute, this Report arguably provides more support for affirming, rather than denying, that the ADEA contains a disparate impact cause of action.
76
Furthermore, the legislative intent indicating that Congress meant to allow the disparate impact theory in ADEA actions may be discerned from a Congressional amendment. In 1994, Congress amended the ADEA by adding the Older Workers Benefit Protection Act ("OWBPA"). 29 U.S.C. § § 623, 626, 630(f) (1994). The statute requires an employer to provide the employee with information regarding the ages of workers offered severance pay and those who were not let go before the employee waives any potential discrimination claims. 29 U.S.C. § 626(f)(1)(E)-(G), (H)(ii) (1994). These statistics, comparing the ages of those terminated and those retained, would be of little relevance if the employee could not bring a disparate impact claim. Therefore, the addition of the OWBPA is additional evidence that the disparate impact theory should be available under the ADEA.
III. CONCLUSION
77
The majority today fails to heed the Griggs recognition that in a complex society, not all discrimination is apparent or overt. Often, such discrimination will be subtle and concealed. The practical consequence of the majority's decision is that it will allow an employer to exclude older workers from lower-level jobs simply on the basis of pretext, without an additional tool at the employee's disposal to counteract such sophisticated discriminatory acts. Contrary to the majority's stance, I agree with the Supreme Court's determination in Hazen that the disparate impact liability was designed to detect employment decisions that reflect "inaccurate and stigmatizing stereotypes." 507 U.S. at 610, 113 S.Ct. 1701. Thus, I find no incompatibility with using disparate impact theory to prove liability under the ADEA.
78
Instead, I am concerned that by not allowing a disparate impact cause of action under the ADEA, the majority has essentially held such plaintiffs to the heightened evidentiary standard of Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976), where sophisticated and concealed discrimination must be proved solely through intentional acts. The majority, however, fails to fully absorb the spirit of Justice Stevens's concurrence in Davis that "the line between purpose and discriminatory impact is not nearly as bright, and perhaps not quite as critical, as the reader of the court's opinion may assume." Id. at 254, 96 S.Ct. 2040. Applied to our context, Justice Stevens's concurrence demonstrates that the majority's opinion, which distinguishes between intentional discrimination based on disparate treatment on the one hand and a disparate impact cause of action absent proof of intent on the other, may not be as clear as the majority seems to opine. Therefore, with regards to Part III of the majority opinion, I respectfully dissent.
Notes:
1
Mullin v. Raytheon Co., 164 F.3d 696, 703-04 (1st Cir.1999) cert. denied, 528 U.S. 811, 120 S.Ct. 44, 145 L.Ed.2d 40 (1999).
2
DiBiase v. SmithKline Beecham Corp., 48 F.3d 719, 732 (3d Cir.1995).
3
Lyon v. Ohio Educ. Ass'n and Prof'l Staff Union, 53 F.3d 135, 139 n. 5 (6th Cir.1995).
4
EEOC v. Francis W. Parker School, 41 F.3d 1073, 1076-77 (7th Cir.1994).
5
Ellis v. United Airlines, Inc., 73 F.3d 999, 1006-07 (10th Cir.1996).
6
Adams v. Fla. Power Corp., 255 F.3d 1322, 1325 (11th Cir.2001).
7
Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, provides in pertinent part:
Sec. 703. (k)(1)(A) An unlawful employment practice based on disparate impact is established under this subchapter only if — (i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity;
....
42 U.S.C. § 2000e-2 (2003).
8
The term "Wirtz Report" refers to a congressional report commissioned by the former Department of Labor Secretary W. Willard Wirtz which, pursuant to section 715 of Title VII, instructed the Secretary of Labor to conduct a study with recommendations for "legislation to prevent arbitrary discrimination in employment because of age." The origins of the ADEA's rationales and objectives can be traced to the resulting report entitled,The Older American Worker: Age Discrimination in Employment (1965). See also EEOC, 460 U.S. at 229-31, 103 S.Ct. 1054 (tracing legislative history of the ADEA and central role of the Secretary of Labor Report).
|
01-03-2023
|
04-25-2010
|
https://www.courtlistener.com/api/rest/v3/opinions/2600751/
|
41 P.3d 1204 (2002)
STATE of Washington, Respondent,
v.
Sean Paul NATION, Appellant.
No. 19698-4-III.
Court of Appeals of Washington, Division 3, Panel Seven.
March 7, 2002.
*1206 John Troberg, Colville, for Appellant.
Allen C. Nielson, Deputy Prosecuting Attorney, Colville, for Respondent.
*1205 KURTZ, C.J.
Sean Paul Nation appeals from Stevens County convictions of possession of methamphetamine, possession of marijuana, and bail jumping. He contends the court erred in (1) denying his motion to sever the bail jumping count, and (2) allowing a crime lab supervisor to give hearsay testimony pertaining to chemical analysis performed by a nontestifying subordinate technician. We affirm the bail jumping conviction, but reverse and dismiss the two drug charges.
Mr. Nation was charged on June 22, 2000, with the two possession counts involving methamphetamine and marijuana, and one count each of use of drug paraphernalia and third degree driving while license suspended. The charges stemmed from a vehicle stop in Colville.
John A. Troberg was appointed as Mr. Nation's counsel; Mr. Nation was granted conditional release pending trial. He acknowledged in writing that he understood the release conditions, including that failure to appear as required for all future court hearings is a crime punishable by imprisonment. When Mr. Nation failed to appear as required for a September 1 trial status hearing, the court issued a bench warrant for his arrest. On September 13, the State filed a supplemental information adding a bail jumping charge.
Mr. Nation filed a motion to sever the bail jumping charge based upon the following affidavit of Mr. Troberg:
Status hearing was set for Friday, September 1, 2000. Mr. Nation failed to appear. Monday was Labor Day. On Tuesday, September 5, 2000, I had court in Republic and preparations for a jury trial commencing Wednesday, September 6, 2000. On... September 6, ... I called Mr. Nation and reminded him of his court date; he agreed to appear the following day and in fact did appear in court on September 7, 2000. In the meantime, the State filed a Supplemental Information charging Bail Jumping on September 6, 2000.
The undersigned is therefore in a position of being a witness on Mr. Nation's behalf on the substance of my telephone conversation with him on ... September 6.... Since I cannot ethically serve as his advocate in court and also a witness on his behalf, it is respectfully submitted that the court should grant this request to sever the bail jumping count from the previous four counts and to appoint separate counsel *1207 so that the undersigned would be free to testify on Mr. Nation's behalf.
Clerk's Papers (CP) at 26.
Mr. Troberg apprised the court as an offer of proof that Mr. Nation had told him he was cutting firewood with his stepfather and simply forgot about his September 1 court date. The court denied the motion to sever on the basis any testimony of Mr. Troberg would be inadmissible self-serving hearsay.
At trial, the State produced substantial evidence of Mr. Nation's possession of the purported marijuana and methamphetamine. To prove the actual content of these substances, the State produced the testimony of Kevin Fortney, a forensic scientist who supervises the chemistry section of the Washington State Patrol Crime Laboratory. The testing was actually performed by one of Mr. Fortney's technicians, Arnold Melnikoff, who was unavailable to testify because he was on vacation.
Mr. Fortney testified that since he does the same type of work as Mr. Melnikoff and reviews it on a routine basis, he could identify the substances based upon Mr. Melnikoff's notes. Mr. Fortney gave further foundation testimony that a technician writes notes of test observations, places those notes in a case file, and then generates a report. That report is subjected to technical peer review by another analyst or by Mr. Fortney himself. The report is then sent back to the submitting agency along with the evidence. As custodian of the office files, Mr. Fortney personally obtained Mr. Melnikoff's notes from the files and recognized the handwriting and methodology to be Mr. Melnikoff's. Mr. Fortney said the peer review is an example of how forensic scientists use the notes and observations of other forensic scientists to formulate their own opinions.
Over standing defense objection based on hearsay, the court then allowed Mr. Fortney to use Mr. Melnikoff's notes to explain the types of testing and analyses performed and the results of each test. Mr. Fortney then gave his own opinion based upon this data that the substances involved were without a doubt marijuana and methamphetamine.
With regard to the bail jumping count, the State produced evidence at trial that Mr. Nation failed to appear for the September 1 status hearing despite signing the order stating conditions of pretrial release. Mr. Nation testified he missed the hearing because he was cutting wood with his stepfather, William Gumm, and "just forgot." Report of Proceedings (RP) at 101. He would have attended the hearing had he remembered. He received a telephone call from Mr. Troberg on September 6, refreshing his recollection of when he was supposed to be in court. Following that phone call, the plan was for Mr. Nation to come to court the next day to work things out. He did so and was again conditionally released. Mr. Gumm similarly testified that Mr. Nation was cutting firewood on September 1, and that he gave Mr. Nation a ride to court on September 7.
The prosecutor asked Mr. Nation on cross-examination whether his attorney told him on September 6 that a warrant had been issued for his arrest. Mr. Nation responded in the affirmative, but said he nevertheless came to court the next day of his own free will and not because of the warrant. The prosecutor then confirmed with Mr. Nation that it still took him one day to come to court.
Mr. Nation renewed his motion to sever at the close of all the evidence, arguing the prosecutor's inquiries on cross-examination put Mr. Troberg in the position of being a witness because he was the only one who knew that court scheduling caused the reappearance delay. The court denied Mr. Nation's motion and entered into evidence the following stipulation agreed to by both counsel:
The parties stipulate that on September 6, 2000, Mr. Nation was contacted by his attorney in regard to coming to court to quash a warrant for his failure to appear on September 1, 2000. No judge was available on September 6, 2000, and Mr. Nation appeared before the court by arrangement of the parties on September 7, 2000.
RP at 123-24. The court also gave the following curative instruction proposed by the defense:
The issue of whether the defendant appeared in Court on September 6, 2000 or September 7, 2000, is irrelevant to your verdict on the charge of bail jumping. The *1208 fact that he did not appear in Court the same day he was contacted by his attorney, on September 6, 2000, appearing instead the following day, is not to be considered by you in reaching a verdict on this charge.
CP at 74, Instr. No. 19.
Mr. Nation appeals from his convictions for methamphetamine and marijuana possession and bail jumping.[1]
Mr. Nation first contends the court committed reversible error by denying his motion to sever the bail jumping count because Mr. Troberg became a witness who Mr. Nation was entitled under the Sixth Amendment right of compulsory process to call at trial. This required Mr. Troberg to withdraw on that charge and the court to sever it for trial. RPC 3.7; Wilkins v. Lasater, 46 Wash.App. 766, 733 P.2d 221 (1987). Mr. Nation argues the error was prejudicial, given that bail jumping is not a strict liability crime and Mr. Troberg was the only person who knew that court scheduling caused the one-day delay in reappearing. Mr. Nation concludes these circumstances may be critical to the jury's determination of whether he knowingly failed to appear in the first instance, thus entitling him to present Mr. Troberg's live testimony instead of being forced into a written stipulation. State v. Pirtle, 127 Wash.2d 628, 652, 904 P.2d 245 (1995) (citing State v. Rice, 110 Wash.2d 577, 598-99, 757 P.2d 889 (1988)). We find no error.
First, CrR 4.3(a)(2) authorizes joinder of offenses "based on the same conduct or on a series of acts connected together." For joinder purposes, a charge of bail jumping is sufficiently connected to the underlying charge if the two offenses are related in time and the bail jumping charge stems directly from the underlying charge. State v. Bryant, 89 Wash.App. 857, 866-67, 950 P.2d 1004 (1998), review denied, 137 Wash.2d 1017, 978 P.2d 1100 (1999). Joinder is proper as a matter of law if these requirements are met and the defendant is not prejudiced thereby. Id. at 867, 950 P.2d 1004. CrR 4.4(b), on the other hand, requires the court to sever offenses whenever "the court determines that severance will promote a fair determination of the defendant's guilt or innocence of each offense." A court's ruling on a motion to sever charges is reviewed for abuse of discretion. State v. Bythrow, 114 Wash.2d 713, 717, 790 P.2d 154 (1990).
Mr. Nation's severance request stems from RPC 3.7, which provides: "A lawyer shall not act as advocate at a trial in which the lawyer ... is likely to be a necessary witness." An attorney must withdraw when it is likely he or she will present testimony related to substantive contested matters. See Wilkins, 46 Wash.App. at 781-82, 733 P.2d 221; Wagner v. Wagner, 1 Wash. App. 328, 333, 461 P.2d 577 (1969). A defendant is entitled to a new trial if, as a matter of law, a breach of a professional canon prevented a fair trial. See State v. Sullivan, 60 Wash.2d 214, 373 P.2d 474 (1962); Ryan v. Ryan, 48 Wash.2d 593, 600, 295 P.2d 1111 (1956); Wagner, 1 Wash.App. at 333, 461 P.2d 577.
The Sixth Amendment to the United States Constitution provides: "In all criminal prosecutions, the accused shall enjoy the right ... to have compulsory process for obtaining witnesses in his favor...." This right applies to the states through the Fourteenth Amendment. Washington v. Texas, 388 U.S. 14, 17-19, 87 S.Ct. 1920, 18 L.Ed.2d 1019 (1967). The right to compel attendance of witnesses "is in plain terms the right to present a defense." Id. at 19, 87 S.Ct. 1920.
An error impacting a defendant's Sixth Amendment right to compel attendance of witnesses is of constitutional magnitude and will be considered harmless only if the state can show beyond a reasonable doubt that the jury would have reached the same result in the absence of the error. State v. Maupin, 128 Wash.2d 918, 928-29, 913 P.2d 808 (1996). But the right applies only to witnesses who are material to the defense. State v. Smith, 101 Wash.2d 36, 41, 677 P.2d 100 (1984) (citing Washington, 388 U.S. at 23, 87 S.Ct. 1920); State v. Wimbish, 100 Wash. *1209 App. 78, 82, 995 P.2d 626, review denied, 141 Wash.2d 1022, 10 P.3d 1075 (2000). It is the defendant's burden to establish materiality. Wimbish, 100 Wash.App. at 82, 995 P.2d 626.
Mr. Nation has not met that burden. First, Mr. Troberg's offered testimony that Mr. Nation told him he missed the court date because he simply forgot is inadmissible, self-serving hearsay offered to bolster Mr. Nation's assertion he did not knowingly fail to appear. State v. Stubsjoen, 48 Wash.App. 139, 147, 738 P.2d 306 (1987) (out-of-court admissions of party not admissible as exception to hearsay rule when self-serving). And, Mr. Nation gave the same explanation when he testified, making Mr. Troberg's proffered testimony repetitious in any event. See State v. Stirgus, 21 Wash.App. 627, 640-41, 586 P.2d 532 (1978).
In addition, the agreed stipulation explaining that Mr. Nation waited one day to come to court because no judge was available clarified his own testimony as to the events of September 6 and 7. A written stipulation is binding on the parties and the court. Reilly v. State, 18 Wash.App. 245, 253, 566 P.2d 1283 (1977). Moreover, the court also gave Mr. Nation's proposed curative instruction that his waiting one day to reappear was not to be considered in reaching a verdict. See State v. Fitzgerald, 39 Wash.App. 652, 662, 694 P.2d 1117 (1985) (instruction proposed by defense cannot be later cited as error). In these circumstances, Mr. Nation's cases, cited for the proposition that parties are not required to accept stipulations and may prove their case by producing evidence, are not controlling. Pirtle, 127 Wash.2d 628, 904 P.2d 245 (no abuse of discretion when state allowed to refuse stipulation as to murder victim's identity and use in-life photos to prove identity); Rice, 110 Wash.2d 577, 757 P.2d 889 (defendant's offer to stipulate to victim's identity did not negate relevance of in-life photographs).
Given the stipulation and curative instruction, any possible prejudice arising from the State's confirming with Mr. Nation on cross-examination that he waited an extra day to reappear was cured beyond a reasonable doubt. See State v. Colbert, 17 Wash.App. 658, 665, 564 P.2d 1182 (1977) (corrective instruction may neutralize prejudice arising from prosecutor's improper examination of defendant). Mr. Nation thus fails to show that Mr. Troberg became a material defense witness who was required to withdraw. Accordingly, the court did not abuse its discretion in refusing to sever the bail jumping count. Bythrow, 114 Wash.2d at 717, 790 P.2d 154.
Mr. Nation next contends the court erred in permitting Mr. Fortney to give opinion testimony under ER 703 based upon Mr. Melnikoff's hearsay notes and report that the substances involved were methamphetamine and marijuana. Such hearsay statements repeating opinions of third parties are not subject to any hearsay exception and are inadmissible. State v. Martinez, 78 Wash.App. 870, 879-80, 899 P.2d 1302 (1995); People v. Campos, 32 Cal.App.4th 304, 308, 38 Cal.Rptr.2d 113 (1995); State v. Towne, 142 Vt. 241, 453 A.2d 1133 (1982). Furthermore, ER 705 cannot be used to make admissible the specific notes, testing data, and reports by a nontestifying witness otherwise barred as hearsay. State v. Anderson, 44 Wash.App. 644, 652, 723 P.2d 464 (1986).
The State responds that admission of Mr. Fortney's testimony based on Mr. Melnikoff's notes may be upheld under the business records exception to the hearsay rule because Mr. Fortney was custodian of the records and testified how the test notes were made in the regular course of business. State v. Ecklund, 30 Wash.App. 313, 319-20, 633 P.2d 933 (1981). And, as Mr. Melnikoff's supervisor, it was permissible under Ecklund for Mr. Fortney to rely on those notes to formulate his own opinion. We disagree with the State.
The court's decision to admit expert testimony is reviewed for abuse of discretion. State v. Stenson, 132 Wash.2d 668, 715, 940 P.2d 1239 (1997), cert. denied, 523 U.S. 1008, 118 S.Ct. 1193, 140 L.Ed.2d 323 (1998). A court abuses its discretion when its decision is based on untenable grounds or is manifestly unreasonable or arbitrary. State ex rel. Carroll v. Junker, 79 Wash.2d 12, 26, 482 P.2d 775 (1971). This includes when its discretionary decision is contrary to law. State v. Williamson, 100 Wash.App. 248, 257, 996 P.2d 1097 (2000).
*1210 1. ER 703
Washington case law allows admission of expert opinion based on data interpreted by another when certain requirements of ER 703 are met. Ecklund, 30 Wash.App. at 318-19, 633 P.2d 933; see also State v. Russell, 125 Wash.2d 24, 74-75, 882 P.2d 747 (1994). ER 703 provides:
The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.
But if these requirements are not met, ER 705[2] may not be used as a mechanism for admitting otherwise inadmissible evidence as an explanation of an expert's opinion. Anderson, 44 Wash.App. at 652, 723 P.2d 464 (citing 5A KARL B. TEGLAND, WASHINGTON PRACTICE § 312 (2nd ed.1982)); see also Martinez, 78 Wash.App. at 879, 899 P.2d 1302.
And, absent an exception to the hearsay rule, hearsay statements of the opinions of third parties are inadmissible. See Martinez, 78 Wash.App. at 880, 899 P.2d 1302 (ER 703 not designed to allow witness to summarize and reiterate all manner of inadmissible evidence); Campos, 32 Cal. App.4th 304, 38 Cal.Rptr.2d 113 (expert may not reveal on direct examination the content of reports prepared or opinions expressed by non-testifying experts); Towne, 142 Vt. 241, 453 A.2d 1133 (one expert may not put in evidence of the opinion of a nontestifying expert without running afoul of the hearsay rule).
In Ecklund, the court set out the framework for admitting expert testimony under ER 703. First, the judge should find the underlying data are of a kind reasonably relied upon by experts in the particular field in reaching conclusions. And second, since the rule is concerned with trustworthiness of the resulting opinion, the judge should not allow the opinion if (1) the expert can show only that he customarily relies upon such material, and (2) the data are relied upon only in preparing for litigation. Ecklund, 30 Wash.App. at 317-18, 633 P.2d 933. Thus, as stated in the Comment to ER 703, "The expert must establish that he as well as others would act upon the information for purposes other than testifying in a lawsuit." See Ecklund, 30 Wash.App. at 318, 633 P.2d 933.
In Ecklund, an FBI serology expert was permitted to give opinion testimony based upon results of laboratory tests performed by his subordinate technician and recorded on laboratory work sheets and a final report not introduced into evidence. Although the expert based his conclusions significantly on the opinion of the technician, he was also the laboratory supervisor with knowledge and ultimate responsibility for all office testing procedures and decisions. There was also testimony that information furnished by the laboratory was relied upon by law enforcement officials for investigations when no particular suspect is involved. Although such investigations may eventually result in a criminal prosecution, the tests were not being specifically prepared for use in litigation. Ecklund, 30 Wash.App. at 318, 633 P.2d 933. The court thus upheld admission of the testimony under ER 703 because both prongs of the second sentence of the rule were met. Ecklund, 30 Wash.App. at 318-19, 633 P.2d 933.
Just like the expert in Ecklund, Mr. Fortney testified to the procedures used by everyone in his office and to his ultimate supervisory responsibility over the methods and results reached by Mr. Melnikoff. He also said it is typical to rely on the data of a subordinate technician to reach his own conclusion. But he gave no testimony that others outside his office customarily rely on the material other than for litigation purposes. When voir dired by defense counsel, he stopped short of giving such information and in essence stated the tests are prepared for *1211 court testimony. Thus, the second part of the ER 703 test was not met and it was an abuse of discretion for the court to admit Mr. Fortney's testimony under the rule. Williamson, 100 Wash.App. at 257, 996 P.2d 1097.
2. Business Records ExceptionRCW 5.45.020
The State contends Mr. Fortney's testimony was nevertheless admissible under the business records exception to the hearsay rule, RCW 5.45.020, because the record supports that theory. See State v. Butler, 53 Wash.App. 214, 217, 766 P.2d 505 (1989) (admission of evidence on incorrect basis is not error if other proper basis exists); Ecklund, 30 Wash.App. at 319, 633 P.2d 933.
RCW 5.45.020 provides:
A record of an act, condition or event, shall in so far as relevant, be competent evidence if the custodian or other qualified witness testifies to its identity and the mode of preparation, and if it was made in the regular course of business, at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission.
In Ecklund, the court also upheld admission of the FBI expert's testimony under the business records exception to the hearsay rule because the testimony made clear that the summary report and laboratory worksheets made in the regular course of business at or near the time of the act would have been admissible under RCW 5.45.020 had they been admitted into evidence. Ecklund, 30 Wash.App. at 319, 633 P.2d 933; see also State v. Medley, 11 Wash.App. 491, 499, 524 P.2d 466 (1974) (law enforcement fingerprint record properly admitted as a business record even though person who took the fingerprint not called as a witness).
The recent decision in State v. Neal, 144 Wash.2d 600, 30 P.3d 1255 (2001), pertaining to admissibility of reports of nontestifying chemical experts is analogous here. The question in Neal was whether the court abused its discretion in admitting into evidence a certified copy of a laboratory test report, when the certificate lacked the name of the person from whom the evidence was received for testing as required by CrR 6.13(b). The report at issue was hearsay because it was an out-of-court statement by the expert who tested a substance and the statement was offered to prove the truth of its contents as methamphetamine. Neal, 144 Wash.2d at 605, 30 P.3d 1255 (citing ER 802) ("[h]earsay is not admissible except as provided by these rules, by other court rules, or by statute").
CrR 6.13(b) establishes one such exception to the hearsay rule, allowing for admissibility of a certified lab report in lieu of a forensic scientist's live testimony. The rule provides:
(1) Certification Required. Subject to subsection (b)(3) of this rule, the official written report of an expert witness which contains the results of any test of a substance or object which are relevant to an issue in a trial shall be admitted in evidence without further proof or foundation as prima facie evidence of the facts stated in the report if the report bears or has attached a certification stating that the certifier has performed a test on the substance or object in question, the name of the person from whom the substance or object was received, the certificate is attached to a true and complete copy of the certifier's official report, the report was made by the certifier, and the qualifications of the certifier to make such tests. The certificate shall be signed by the certifier with the title of his office and his business address and telephone number.
CrR 6.13(b). The rule does not violate a defendant's constitutional right to confront witnesses so long as all of its substantive requirements are strictly complied with. Neal, 144 Wash.2d at 607-08, 30 P.3d 1255.
In Neal, the certificate was insufficient and thus inadmissible hearsay because it stated only that the tester received the substance from the "Tacoma Crime Laboratory Evidence Vault," and did not specify the name of the person from whom it was received. Id. at 606, 30 P.3d 1255. The court's abuse of discretion in admitting the report was prejudicial error because without it the evidence was insufficient to support the conviction. Id. at 608-09, 611, 30 P.3d 1255.
*1212 Neal forecloses the State's claim that the business records exception applies here. The notes and report of the nontestifying expert, Mr. Melnikoff, were not admitted into evidence. And, there is no evidence in the record as to the particular person from whom the tester, Mr. Melnikoff, received the substances. Mr. Fortney gave no such testimony. The deficiency in proof is tantamount to that in Neal and carries through to Mr. Fortney, whose opinion testimony stemmed solely from Mr. Melnikoff's work. Thus, unlike the records in Ecklund and Medley, it cannot be said on the record presented that Mr. Melnikoff's report would have been admissible if offered into evidence.[3] This court therefore cannot uphold on business record grounds the admission of Mr. Fortney's opinion testimony.
Because Mr. Fortney's opinions do not comply with ER 703, and no other hearsay exception applies, the court abused its discretion allowing his testimony that the controlled substances were marijuana and methamphetamine. State v. Williamson, 100 Wash.App. 248, 257, 996 P.2d 1097 (2000). The error is prejudicial because without Mr. Fortney's testimony, the State has not produced evidence from which a rational trier of fact could find each element of the possession of marijuana and methamphetamine crimes beyond a reasonable doubt. State v. Salinas, 119 Wash.2d 192, 201, 829 P.2d 1068 (1992). The appropriate remedy is therefore to reverse and dismiss those two charges. Neal, 144 Wash.2d at 611-12, 30 P.3d 1255.
The bail jumping conviction is affirmed. The possession of marijuana and possession of methamphetamine convictions are reversed and the matter remanded for dismissal of those charges.
SCHULTHEIS and KATO, JJ., concur.
NOTES
[1] The jury acquitted Mr. Nation of the paraphernalia charge and he earlier pleaded guilty to driving while license suspended.
[2] ER 705 provides:
"The expert may testify in terms of opinion or inference and give reasons therefor without prior disclosure of the underlying facts or data, unless the judge rules otherwise. The expert may in any event be required to disclose the underlying facts or data on cross examination."
[3] The State's additional cites cases, State v. Kreck, 86 Wash.2d 112, 119, 542 P.2d 782 (1975) and State v. Walker, 83 Wash.App. 89, 97-98, 920 P.2d 605 (1996), are also not on point. In both cases, the expert reports were admitted in evidence without needing to prove that the test author was unavailable. The State's other cited case, State v. Ross, 42 Wash.App. 806, 811, 714 P.2d 703 (1986), similarly recites the principle that a properly admissible business record, if sufficiently reliable, does not violate the confrontation clause. None of these cases involved the situation presented here.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/219829/
|
642 F.3d 1191 (2011)
DISTRICT OF COLUMBIA, Appellee
v.
Chike A. IJEABUONWU and Law Offices of Chike A. Ijeabuonwu, LLC, Appellants.
No. 09-7092.
United States Court of Appeals, District of Columbia Circuit.
Argued January 18, 2011.
Decided June 28, 2011.
*1192 Jude C. Iweanoge argued the cause for appellants. With him on the brief was John O. Iweanoge II.
Carl J. Schifferle, Assistant Attorney General, Office of the Attorney General for District of Columbia, argued the cause for appellee. With him on the brief were Peter J. Nickles, Attorney General, Todd S. Kim, Solicitor General, and Donna M. Murasky, Deputy Solicitor General.
Before: GINSBURG and GRIFFITH, Circuit Judges, and RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge GINSBURG.
Concurring opinion filed by Senior Circuit Judge RANDOLPH.
GINSBURG, Circuit Judge:
The District of Columbia filed this suit to recover its attorneys' fees from Chike Ijeabuonwu, a lawyer who brought an administrative complaint against the District on behalf of a student with special educational needs. Under the Individuals with Disabilities Education Act (IDEA), a court may award attorneys' fees to the "prevailing party," whether it be the plaintiff or the defendant. The district court held D.C. was a prevailing party and awarded it attorneys' fees. For the reasons that follow, we reverse that judgment.
I. Background
Ijeabuonwu's client in the administrative matter was a student who lived in the District of Columbia and was eligible for special education under the IDEA, which guarantees "all children with disabilities" access to "a free appropriate public education." 20 U.S.C. § 1400(d)(1)(A). After evaluating the student in 2007, the District of Columbia Public Schools (DCPS) determined it could best meet this statutory requirement by paying for him to attend a certain private school.
In July 2008, after the student's first year there, the school convened a so-called multidisciplinary team (MDT) meeting, as required by the IDEA. Neither a DCPS official nor the student's parents were present at the meeting; the student was represented by Ijeabuonwu's brother, who is employed as an "education advocate" at Ijeabuonwu's law firm. The MDT recommended *1193 the student's psychological therapy be increased by 30 minutes each week and that he be given "a comprehensive psychological eval[uation]," including psychological, educational, and social history assessments.
On September 9, 2008 Ijeabuonwu filed an administrative complaintsometimes called a "due process complaint"on behalf of the student and his mother. The complaint alleged the DCPS had not yet conducted the evaluation recommended by the MDT and also had failed to conduct an "appropriate triennial evaluation." For relief, Ijeabuonwu sought a "[t]imeline to evaluate" the student, additional meetings to discuss the evaluations, "compensatory education," attorneys' fees, and several specific declarations.
Nine days later Richard Nyankori, a Special Assistant to the Chancellor of the DCPS, faxed a letter to Ijeabuonwu authorizing "an independent comprehensive psychological evaluation (which includes cognitive, educational, and clinical components as well as a social history), and a psychiatric evaluation," to be done at the expense of the DCPS. Ijeabuonwu neither informed his client of the letter nor withdrew his administrative complaint, and on October 14 the parties proceeded to an administrative hearing.
Shortly thereafter, Hearing Officer Terry Banks issued a written order and decision stating "the only issue before [me] is DCPS' alleged failure to conduct psychological, educational, and social history evaluations that were ordered by the MDT on July 1st"; that issue, however, "was mooted by DCPS' prompt authorization of an independent comprehensive psychological evaluation." The hearing officer nonetheless went on to devote three paragraphs of commentary to the merits of Ijeabuonwu's complaint, concluding he had failed to show the DCPS was notified of and had ignored the MDT's recommendations, and that the student "ha[d] suffered no educational harm as a consequence of the evaluations not having been conducted." Neither party appealed that decision.
D.C. then filed this suit against Ijeabuonwu to recover the attorneys' fees it had incurred in defending itself against his administrative complaint. The district court entered a summary judgment, ordering Ijeabuonwu to pay such fees as D.C. incurred once Ijeabuonwu had received Nyankori's letter, after which it had been unreasonable for Ijeabuonwu to continue pursuing the case to a hearing. District of Columbia v. Ijeabuonwu, 631 F. Supp. 2d 101, 106 (D.D.C.2009). Ijeabuonwu now appeals that ruling.
II. Analysis
Although the American Rule is that parties bear their own attorneys' fees, the Congress has modified the rule in a number of civil rights statutes. Pursuant to the IDEA, for one, a court may award attorneys' fees
to a prevailing party who [sic] is a State educational agency or local educational agency against the attorney of a parent who ... continued to litigate after the litigation clearly became frivolous, unreasonable, or without foundation.
20 U.S.C. § 1415(i)(3)(B)(i)(II). Addressing de novo the issue of law whether D.C. is a "prevailing party" in this case, we hold it is not. Because we reverse the judgment of the district court on that ground, we need not decide whether, as D.C. maintains, Ijeabuonwu's pursuit of an administrative hearing was unreasonable.
As both parties recognize, this case follows closely in the wake of our decision last term in District of Columbia v. Straus, 590 F.3d 898 (D.C.Cir.2010). The defendant Straus had filed an administrative *1194 complaint under the IDEA on behalf of a student seeking (1) an order requiring D.C. to pay for the independent psychiatric evaluation recommended by the student's assessment team, (2) a declaration that the delay in obtaining the evaluation had denied the student a free appropriate public education, and (3) attorneys' fees. Id. at 899-900. Within a week thereafter, Richard Nyankori of the DCPS sent Straus a letter substantively identical to the one he would later send to Ijeabuonwu. Id. at 900. Straus nonetheless pursued the matter to an administrative hearing at which, as here, Hearing Officer Banks presided. In a written decision, the hearing officer stated the "only issue" before him was the "alleged failure to conduct a psychiatric evaluation" as recommended by the MDT, which he concluded had been "mooted by DCPS' prompt authorization of an independent evaluation." Id. at 901. As in the precursor to the present case, neither party appealed, id. at 900, but D.C. filed suit in the district court seeking reimbursement of its attorneys' fees pursuant to § 1415(i)(3)(B)(i), id. That court held D.C. was not a "prevailing party" in the administrative proceeding because its own change of position was what had mooted the dispute, causing the case to dismissed, and we agreed. Id. at 900, 903.
We began our analysis in Straus with the Supreme Court's teaching in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 603-05, 121 S. Ct. 1835, 149 L. Ed. 2d 855 (2001), that to be a prevailing party "requires more than achieving the desired outcome." Straus, 590 F.3d at 901. Following Buckhannon, in Thomas v. National Science Foundation, 330 F.3d 486, 492-93 (D.C.Cir.2003), we had identified three requirements for prevailing party status: There must be (1) "a court-ordered change in the legal relationship of the parties"; (2) a "judgment... in favor of the party seeking the fees"; and (3) "judicial relief" accompanying the "judicial pronouncement." Straus, 590 F.3d at 901 (citing Thomas, 330 F.3d at 492-93) (internal quotation marks omitted). Only the latter two of these requirements apply when the party seeking fees is a defendant. Id. at 901.
In Straus, as here, the only contested issue was whether D.C. had obtained any "judicial relief" in the administrative proceeding as to which it was seeking to recover attorneys' fees. We answered in the negative because the hearing officer had dismissed the case based not upon its merits but rather upon the mootness the District itself had brought about. Id. at 901-02.
We decided Straus after the district court had issued its opinion in this case but before that court denied Ijeabuonwu's motion for reconsideration. In denying reconsideration, the district court said Straus "does not change the outcome" because in this case "the hearing officer did reach the merits of the student's complaint and resolved the issue in favor of the District."
On appeal Ijeabuonwu, of course, argues Straus is controlling. The hearing officer here, he points out, stated both that D.C.'s failure to conduct an evaluation was the "only issue" and that the Nyankori letter had rendered that issue moot; therefore, as in Straus, it is of no moment that the hearing officer also volunteered his opinion that the student had "suffered no educational harm."
D.C. attempts to navigate around Straus by emphasizing our observation there that the hearing officer's obiter dicta concerning the merits had begun with a counterfactual subjunctive statement ("The facts of this case suggest that even if DCPS had not authorized an independent evaluation, *1195 Petitioner would have faced an uphill burden of proving educational harm"), making clear that the hearing officer's later statement the student had "suffered no educational harm" was only his "speculation about what might have happened had DCPS refused to provide the evaluation." Id. at 901. Because the hearing officer here, the District continues, did not couch his comments upon the merits in the counterfactual subjunctive, he was squarely resolving the issue.
The District errs in implying our decision in Straus turned upon the tense in which the hearing officer couched his dicta. The underlying point was that in Straus, as in this case, the hearing officer recognized the want of an evaluation was the sole issue the student's attorney had raised before him and then determined the Nyankori letter had already resolved that issue. The counterfactual subjunctive in Straus reflected and reinforced that point but was not essential to it. What matters is the hearing officer's determination in each case that there was before him no live issue on the merits.
D.C. next argues the Nyankori letter did not moot the entire case because Ijeabuonwu's complaint sought not only an evaluation but also "compensatory education," which we have described as the belated provision of "educational services the child should have received in the first place," Reid v. District of Columbia, 401 F.3d 516, 518 (D.C.Cir.2005). As the District notes, in Lesesne v. District of Columbia, 447 F.3d 828, 833 (D.C.Cir.2006), we said an "explicit demand for compensatory education" is sufficient to forestall mootness, and so it is. In Lesesne, however, we reviewed a judgment of the district court holding a plaintiff's IDEA claim was moot, id. at 833, whereas here the administrative order that adjudged the case moot is not before us; that order was not challenged administratively or otherwise appealed. Accordingly, just as D.C. itself argues concerning a different point, the law of the case doctrine precludes us from revisiting the hearing officer's conclusion the entire dispute is moot. See United States v. Thomas, 572 F.3d 945, 949 (D.C.Cir.2009) ("a legal decision made at one stage of litigation, unchallenged in a subsequent appeal when the opportunity to do so existed, governs future stages of the same litigation" (internal quotation marks and alterations omitted)); Kaseman v. District of Columbia, 444 F.3d 637, 641-42 (D.C.Cir.2006) (administrative IDEA proceeding and later fee claim are part of same case).
Finally, D.C. argues the res judicata effect of the hearing officer's having dismissed the administrative complaint with prejudice "is itself a form of `judicial relief'" and therefore sufficient to make D.C. a "prevailing party." In response to a similar argument in Straus, we noted that in some cases the "[r]es judicata effect would certainly qualify as judicial relief," for example, where "it protected the prevailing school district from having to pay damages or alter its conduct." 590 F.3d at 902. In that case, however, res judicata provided no such protection because the District "had already agreed to pay for the requested evaluationthe only issue then before the hearing officer." Id.
D.C. would have us distinguish Straus upon the basis of the last-quoted clause: In this case, it says, res judicata gives the District meaningful relief because the student's claim for compensatory education is now precluded on the ground that it arose from the same nucleus of facts as did the claims the hearing officer held were moot. See Apotex, Inc. v. FDA, 393 F.3d 210, 217 (D.C.Cir.2004) ("a judgment on the merits in a prior suit bars a second suit involving *1196 identical parties or their privies based on the same cause of action," which "turns on whether [the two suits] share the same nucleus of facts" (internal quotation marks omitted)). What D.C. overlooks is that the evaluation for which it agreed to pay is but a preliminary step; if the evaluation shows a need for compensatory education, then D.C. will still have to provide it. The dismissal therefore "protected the District from nothing at all." Straus, 590 F.3d at 902; see also Drake v. FAA, 291 F.3d 59, 67 (D.C.Cir.2002) (res judicata "does not bar a litigant from doing in the present what he had no opportunity to do in the past").[*]
In consequence, we see no principled reason to depart from our holding in Straus. As we said then:
If the District were considered a prevailing party under these circumstances, then DCPS could ignore its legal obligations until parents sue, voluntarily comply quickly, file for and receive a dismissal with prejudice for mootness, and then recover [attorneys'] fees from the parents' lawyers.
Straus, 590 F.3d at 902. To allow this practice would deter lawyers from taking IDEA cases and thereby deprive parents of their most effective means of enforcing the statute.
III. Conclusion
We hold the District of Columbia is not a "prevailing party" under the IDEA and, accordingly, is not eligible for an award of attorneys' fees. The judgment of the district court is therefore
Reversed.
RANDOLPH, Senior Circuit Judge, concurring:
Although I have my doubts about the result in District of Columbia v. Straus, 590 F.3d 898 (D.C.Cir.2010), I agree that the decision requires us to reverse. But I do not agree with the majority's implicit criticism of the District for even seeking attorneys' fees. Maj. Op. at 1195-96.
The District invoked the portion of the statute allowing an educational agency to collect attorneys' fees from a parent's attorney if the agency is a "prevailing party" and if the attorney "continued to litigate after the litigation clearly became frivolous, unreasonable, or without foundation." 20 U.S.C. § 1415(i)(3)(B)(i)(II). The District had ample grounds for its claim: the attorney, Chike Ijeabuonwu, did not tell his clients that the District had agreed to his demands, he persisted in his administrative complaint after the case thus became moot, and he admitted that he was prolonging the litigation in order to collect fees for himself. That is the sort of conduct that deserves a sanction, and requiring Ijeabuonwu to pay attorneys' fees would have accomplished that end.
The portion of Straus the majority quotes at the end of its opinion seems to me incorrect. Straus seemed to assume the District could collect attorneys' fees if it "ignore[d] its legal obligations until parents sue[d], voluntarily compl[ied] quickly, [and] file[d] for and receive[d] a dismissal with prejudice for mootness...." Maj. Op. *1197 at 1196 (quoting Straus, 590 F.3d at 902). The majority states, as did Straus, that this would deter lawyers from taking IDEA cases. But it would not. It would deter only attorneys who sought to prolong the case after litigation became "frivolous, unreasonable, or without foundation"and that is all to the good.
NOTES
[*] D.C. similarly contends the res judicata effect of the hearing officer's decision forecloses the student from renewing his claim related to the DCPS's "failure to conduct an `appropriate' triennial evaluation." As D.C. acknowledges elsewhere in its brief, however, any such claim would be moot because Nyankori's letter authorized the student to obtain a psychiatric evaluation, which was part of the triennial evaluation but not of the evaluation called for by the MDT. If a claim for triennial evaluation would be dismissed as moot in any event, then res judicata is of no benefit to D.C.
|
01-03-2023
|
06-28-2011
|
https://www.courtlistener.com/api/rest/v3/opinions/2896595/
|
NO. 07-06-0335-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
OCTOBER 13, 2008
______________________________
ADRIAN BIERA, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
_________________________________
FROM THE 140TH DISTRICT COURT OF LUBBOCK COUNTY;
NO. 2005-410,709; HONORABLE JIM BOB DARNELL, JUDGE
_______________________________
Before CAMPBELL and HANCOCK and PIRTLE, JJ.
DISSENTING OPINION
While I agree with the majority conclusion that the trial court erred by failing to give
an accomplice as a matter of fact instruction pertaining to the testimony of Stephanie
Yzaguirre, I respectfully disagree with the majority conclusion that the omission was not
harmless error. Because I would find such error harmless, I dissent.
A conviction cannot be had upon the testimony of an accomplice witness unless that
testimony is “corroborated by other evidence tending to connect the defendant with the
offense” committed. Tex. Code Crim. Proc. art. 38.14 (Vernon 2005). When the evidence
raises a question of fact concerning whether or not a witness is an accomplice, the trial
court must submit an accomplice witness instruction, and failure to do so is error.
Oursbourn v. State, 259 S.W.3d 159, 180 (Tex.Crim.App. 2008). However, the failure to
submit an accomplice witness as a matter of fact instruction may amount to harmless error
if some non-accomplice evidence tends to connect the accused to the offense. Herron
v. State, 86 S.W.3d 621, 632 (Tex.Crim.App. 2002).
The harmless error analysis for the omission of an accomplice witness instruction
should be flexible, taking into account the existence and strength of any non-accomplice
evidence and the applicable standard of harm. Id. In determining the strength of a
particular item of non-accomplice evidence, an appellate court must examine (1) its
reliability or believability and (2) the strength of its tendency to connect the defendant to
the crime. Id.
When, as here, the error is properly preserved, a reversal is required if “some harm”
is shown. Under the “some harm” standard, the omission of an accomplice witness
instruction is harmless if it does not affect the substantial rights of the appellant. Tex. R.
App. P. 44.2(b). A substantial right is affected when the error had a substantial and
injurious effect or influence in determining the jury’s verdict. Russell v. State, 113 S.W.3d
530, 549 (Tex.App.–Fort Worth 2003, pet. ref’d) (citing King v. State, 953 S.W.2d 266, 271
(Tex.Crim.App. 1997)).
In order to determine whether the testimony of an accomplice witness tends to
connect the defendant to the crime, an appellate court must disregard all accomplice
witness testimony and instead focus solely upon the remaining non-accomplice witness
evidence. Munoz v. State, 853 S.W.2d 558, 559 (Tex.Crim.App. 1993). It is not necessary
that the non-accomplice evidence prove all the elements of the offense charged, nor is it
necessary that the evidence directly link the defendant to the crime. Gill v. State, 873
S.W.2d 45, 48 (Tex.Crim.App. 1994). Although the non-accomplice evidence may be
weak, if it fails to connect the defendant to the offense the evidence is insufficient to
support a conviction. Munoz, 853 S.W.2d at 560. In evaluating the sufficiency of the non-accomplice evidence, each case must be considered on its own facts and circumstances,
and only non-accomplice evidence presented to the jury may be considered. Id.
In the instant case, aside from the testimony of the accomplice witnesses, the State
presented testimony from Adam Salazar, one of the Whataburger employees who was
robbed, to the effect that he recognized the eyebrows and eyes of Appellant. While the
strength of the tendency of this non-accomplice witness testimony to connect Appellant to
the crime is great (such testimony is tantamount to an eye witness identification), it can be
argued that the reliability or believability factor is weak. Where the evidence of a witness’s
status as an accomplice was tenuous (barely enough to support submission as an
accomplice as a matter of fact), the Court of Criminal Appeals has found error harmless
under the “some harm” standard when the non-accomplice evidence consisted of
eyewitness testimony connecting the defendant to the crime. Medina v. State, 7 S.W.3d
633 (Tex.Crim.App. 1999).
Having considered the non-accomplice evidence, the strength of its tendency to
connect Appellant to the crime, its relative reliability, and the tenuous status of Yzaguirre
as an accomplice witness, I remain convinced that the trial court’s failure to submit an
accomplice witness instruction as to Yzaguirre did not have a substantial and injurious
effect or influence on the jury’s verdict. Because I would find the error harmless, I would
overrule Appellant’s issue.
Patrick A. Pirtle
Justice
Publish.
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2896191/
|
NO. 07-06-0226-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
JANUARY 12, 2007
______________________________
IN THE INTEREST OF M.L.M., A CHILD
_________________________________
FROM THE 100TH DISTRICT COURT OF CHILDRESS COUNTY;
NO. 9286; HONORABLE PHIL VANDERPOOL, JUDGE
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
MEMORANDUM OPINION
Stefani Hobbs Moore appeals a judgment by which the trial court terminated
appellant's parental rights to her daughter MLM and named the child's father Jerome
Flemons permanent managing conservator. Appellant now challenges the trial court's
findings that the Texas Department of Family and Protective Services established each
ground for termination by clear and convincing evidence. We affirm.
After the arrest of appellant and her boyfriend, Mickey Charles Hill, for attempting
to manufacture methamphetamine in October 2004, the Department took custody of one-year-old MLM. MLM was released to Hill's mother and grandmother with the stipulation
that appellant not have unsupervised visitation. When that condition was violated and
appellant was charged with additional offenses in July 2005, the Department placed MLM
in foster care. It also filed a petition seeking termination of the parental rights of appellant,
Flemons, and another potential father. As to appellant the petition alleged nine grounds
for termination and that termination was in the best interest of the child. See Tex. Fam.
Code Ann. § 161.001 (Vernon Supp. 2006). A September 2005 order adopted the
Department's service plan listing tasks appellant was required to accomplish to regain
custody of MLM. In October, the Department filed a permanency plan and progress report
that stated appellant was compliant with several aspects of the prior plan but that more
work was necessary toward compliance with other requirements, including maintaining
stable employment and timely response to requests for random drug tests. The plan's
stated goal was family reunification.
After a December 2005 permanency hearing the trial court issued an order finding
appellant had not demonstrated adequate compliance with the Department's service plan.
Also in December the Department received test results confirming Flemons was MLM's
natural father. It took a nonsuit as to the other potential father and, after conducting a
home study, placed MLM with Flemons and his wife Amanda in February 2006. She
remained there through the time of trial in May 2006.
The evidence at trial consisted of testimony from four witnesses called by the
Department: caseworker LaRae Alexander, Jerome Flemons, Amanda Flemons and
appellant. At trial the Department requested that Flemons be named permanent managing
conservator. Alexander testified to appellant's limited compliance with the conditions of
the service plan. Appellant told Alexander she was employed before her most recent
arrest but Alexander was unable to confirm that. Appellant had completed drug and
alcohol use assessments but, according to Alexander, did not complete the required
counseling. Alexander recounted appellant passed one drug screening but had not
responded to "approximately five" requests for random screening. Appellant had moved
two or three times since Alexander was assigned to the case the previous July, and had
failed to maintain contact with Alexander. According to Alexander, MLM had been doing
well while living with the Flemons.
Amanda Flemons expressed interest in adopting MLM. Jerome Flemons agreed
it would be in MLM's best interest to terminate appellant's parental rights, and that he and
Amanda would be able to support and care for MLM. During trial the Department
abandoned five of its alleged grounds supporting termination of appellant's parental rights.
Through her attorney, appellant invoked her Fifth Amendment right against self-incrimination when questioned about her drug use but did assert she had attempted to
meet all the conditions of the service plan. She also explained that her inability to perform
some requirements was caused by the lack of resources such as transportation.
On appellant's motion at the close of the Department's case, the trial court found
the Department had not proven its contention she failed to support MLM in accordance
with her ability. The court found the Department established the three remaining grounds
and that termination was in the best interest of the child. Those grounds were that
appellant knowingly placed or allowed the child to remain in conditions which endangered
her physical or emotional well-being, engaged in conduct or knowingly placed the child with
persons who engaged in conduct which endangered her physical or emotional well-being,
and failed to comply with the provisions of a court order specifically establishing the actions
necessary to obtain return of the child. See Tex. Fam. Code Ann. § 161.001(1)(D), (E),
(O) (Vernon Supp. 2006).
Family Code Section 161.001 authorizes termination of parental rights on proof of
two elements by clear and convincing evidence: first, that the parent committed any one
of the enumerated acts or omissions; and second, that termination is in the best interest
of the child. Tex. Fam. Code Ann. § 161.001 (Vernon Supp. 2005); In re A.V., 113 S.W.3d
355, 362 (Tex. 2003); In re S.A.P., 169 S.W.3d 685, 695 (Tex.App.-Waco 2005, no pet.);
In re S.M.L.D., 150 S.W.3d 754, 756 (Tex.App.-Amarillo 2004, no pet.). Clear and
convincing evidence is that measure or degree of proof that will produce in the mind of the
trier of fact a firm belief or conviction as to the truth of the allegations sought to be
established. Tex. Fam. Code Ann. § 101.007 (Vernon 2002); In re J.L., 163 S.W.3d 79,
84 (Tex. 2005). Accordingly, appellate review of the sufficiency of evidence supporting a
termination finding must determine and address whether the evidence is such that the trier
of fact could reasonably form a firm belief or conviction about the truth of the allegation.
In re C.H., 89 S.W.3d 17, 25 (Tex. 2002). Our review must encompass the entire record.
In re J.F.C., 96 S.W.3d 256, 266 (Tex. 2002).
Appellant's first point assigns error to the trial court's finding that termination of her
parental rights was in the best interest of MLM. She initially argues the Department "failed
to offer clear and convincing evidence as to how terminating appellant's parental rights
improved [MLM's] situation greater than by appointing [appellant] as possessory
conservator of the child and requiring her to pay child support." Texas law long has
recognized a strong presumption that the best interest of a child is served by preserving
the parent-child relationship. Wiley v. Spratlan, 543 S.W.2d 349, 352 (Tex. 1976). By
statute, that relationship may be terminated only by findings based on clear and convincing
evidence. But by statute also, the issue the court must address is whether termination is
in the best interest of the child, not whether the child's situation will be improved more by
one action than another.
In 1976 the Texas Supreme Court listed factors our courts have considered when
determining whether termination is in the best interest of the child. See Holley v. Adams,
544 S.W.2d 367 (Tex. 1976). The non-exclusive list set out in Holley includes the desires
of the child; the emotional and physical needs of the child now and in the future; the
emotional and physical danger to the child now and in the future; the parental abilities of
the individuals seeking custody; the programs available to assist these individuals to
promote the best interest of the child; the plans for the child by these individuals or by the
agency seeking custody; the stability of the home or proposed placement; the acts or
omissions of the parent which may indicate that the existing parent-child relationship is not
a proper one; and any excuse for the acts or omissions of the parent. Id. at 372. The best
interest analysis evaluates the best interest of the child, not that of the parent. In re S.A.P.,
169 S.W.3d at 707.
Appellant does not argue the court's judgment is unsupported by the Holley factors,
but she cites Horvatich v. Texas Dep't of Protective & Regulatory Svcs., 78 S.W.3d 594
(Tex.App.-Austin 2002, no pet.), in support of her contention the court's failure to consider
"a lesser alternative than termination" rendered the evidence of best interest insufficient.
The court in Horvatich found the evidence of best interest insufficient under the applicable
factors. (1) But there, the caseworker then assigned to the case was not permitted to testify
because she was not designated as a witness. Id. at 599. As a result, there was no
evidence before the court on the status, at the time of trial, of the children in foster care,
the Department's plans for the children or why it did not seek placement with an available
relative. (2) On appeal, the court found the uncertainty of the parent's plans for the future
inadequate to show termination was in the child's best interest, where the Department was
not able to present evidence of its plans. Id. at 601. Here, the Department presented the
evidence lacking in Horvatich. The Department showed its plans for permanent placement
of MLM, including evidence of her functioning in that placement pending trial and testimony
of her natural father and his wife who desired to adopt MLM. The evidence also showed
the stability of the Flemons' home, their parental abilities, and MLM's bonding with the
Flemons and their daughter.
There is scant, if any, evidence in this record supporting a conclusion that naming
appellant possessory conservator and requiring her to pay child support, as she suggests,
would promote stability for MLM (3) or otherwise is in the child's best interest. At the time of
the hearing, appellant was on felony deferred adjudication probation, and was in the county
jail facing further criminal proceedings. The record shows appellant had failed to make any
support payments during this proceeding and, by her own testimony at the hearing, she
had no capability to make support payments. As fact finder, the trial court was permitted
to draw inferences adverse to appellant concerning her illegal drug use when she asserted
her constitutional right against self-incrimination on being asked why she had not submitted
to the required drug tests. See In re C.J.F. 134 S.W.3d 343, 352 (Tex.App.-Amarillo 2003,
pet. denied) (applying, in termination case, rule that adverse inferences may be drawn from
assertion of Fifth Amendment privilege). The evidence showing appellant engaged in
conduct endangering to her child, discussed in our consideration of appellant's third point
of error, also is relevant to the issue of the child's best interest. See In re C.H., 89 S.W.3d
at 28 (holding same evidence may be probative both of best interest and other termination
issues).
Under either the legal or factual sufficiency standards of review, we conclude the
evidence was sufficient to permit the court to reach a firm belief or conviction that
termination of appellant's parental rights was in the best interest of MLM. We overrule
appellant's first point.
Appellant's third point addresses the sufficiency of the evidence that she engaged
in conduct or placed the child with others who engaged in conduct which endangered the
child's physical or emotional well-being. See Tex. Fam. Code Ann. § 161.001(1)(E)
(Vernon Supp. 2006). She argues the evidence showed, at most, sporadic and disjointed
drug use. She does not deny the risks posed by her drug use, but argues the Department
was obligated to show a course of conduct, rather than individual acts or omissions, citing
In re D.M., 58 S.W.3d 801, 812 (Tex.App.-Fort Worth 2001, no pet.). We agree a single
episode of endangering conduct typically is insufficient. See In re S.M.L.D., 150 S.W.3d
at 758. But the evidence here establishes that appellant had engaged in a course of
endangering conduct. There was evidence appellant's amphetamine use had resulted in
termination of her parental rights to two other children before MLM was born. (4)
Here again,
the trial court could draw adverse inferences from appellant's invocation of her Fifth
Amendment rights in response to questions about her drug use. See In re C.J.F. 134
S.W.3d at 352. There was evidence appellant's conduct was not limited to use of illegal
drugs. The Department's involvement with MLM arose from appellant's arrest for
attempting to manufacture methamphetamine. (5) Appellant's drug use continued after MLM
was removed and she knew regaining custody depended on foregoing the use of drugs.
The record shows appellant's drug use was part of a continuing course of conduct.
Alexander also testified to the risks created by appellant's drug-related conduct. In
Alexander's experience as a caseworker methamphetamine use results in the type of
instability in the child's environment found here, including the parent's inability to maintain
stable employment and housing. Courts may consider a parent's pattern of drug use and
its effect on children in determining whether the conduct endangered the children. See
In re T.N., 180 S.W.3d at 383; Vasquez v. Texas Dept. of Protective & Regulatory
Services, 190 S.W.3d 189, 196 (Tex.App.-Houston [1st Dist.] 2005, pet. denied);
S.M.L.D., 150 S.W.3d at 758; In re R.W., 129 S.W.3d 732, 739 (Tex.App.-Fort Worth
2004, pet. denied); In re U.P., 105 S.W.3d 222, 234 (Tex.App.-Houston [14th Dist.] 2003,
pet. denied). The evidence is sufficient to support a firm conviction or belief that appellant
engaged in conduct that endangered MLM's well-being, and thus is legally and factually
sufficient to support the court's finding. We overrule appellant's third point.
Our disposition of appellant's first and third points is dispositive of her appeal. We
need not address her second or fourth points. See In re A.V., 113 S.W.3d at 362 (only one
finding under Family Code section 161.001(1) is necessary for termination, along with a
best interest finding). We affirm the trial court's judgment.
James T. Campbell
Justice
1. The opinion in Horvatich does state the evidence in that case "at least suggests
that the Department did not adequately consider reunification or placement with relatives
as viable alternatives to termination." 78 S.W.3d at 602. As the opinion makes clear,
however, that weakness was only one of several causing the court to conclude the
Department's evidence on best interest was insufficient.
2. See In re T.N., 180 S.W.3d 376, 385 (Tex.App.-Amarillo 2005, no pet.) (also
distinguishing Horvatich).
3. Another case appellant cites, In re M.A.N.M., 75 S.W.3d 73 (Tex.App.-San
Antonio 2002, no pet.), recognizes a child's need for permanence as "the paramount
consideration for the child's present and future physical and emotional needs." Id. at 77.
4. Appellant acknowledged during her testimony that one of her children tested
positive for amphetamine. See Cervantes-Peterson v. Texas Dept. of Family & Protective
Services, No. 01-05-0307-CV, 2006 WL 2195241 (Tex.App.-Houston [1st Dist.] August 3,
2006, no pet.) (citing drug use during another pregnancy as evidence mother would
continue to endanger child). See also In re Baby Boy R., 191 S.W.3d 916, 925 (Tex.App.-
Waco 2005, pet. denied) (considering conduct toward stepchild).
5. Appellant pled guilty to this charge and, as noted, was placed on deferred
adjudication probation.
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2600730/
|
273 Kan. 72 (2002)
41 P.3d 798
EMPIRE MANUFACTURING COMPANY, n/k/a/ SMTM, INC., and KENT A. MISEMER, individually, and as Trustee under the KENT A. MISEMER REVOCABLE TRUST, dated December 24, 1992, Appellees,
v.
EMPIRE CANDLE, INC., Appellant.
No. 86,347.
Supreme Court of Kansas.
Opinion filed March 8, 2002.
Terrence J. Fleming, of Lindquist & Vennum P.L.L.P., of Minneapolis, Minnesota, argued the cause, and Kim Ruckdaschel-Haley, of the same firm, and Ron Bodinson and and Jason Pepe, of Shook, Hardy, & Bacon L.L.P., of Overland Park, were with him on the briefs for appellant.
Richard S. Wetzler, of Holman, Hansen, Colville & Coates, P.C., of Overland Park, argued the cause and was on the brief for appellees.
The opinion of the court was delivered by
ALLEGRUCCI, J.:
This is an appeal from the judgment of the district court in a breach of contract action. The defendant, Empire Candle, Inc., (Empire) appeals from a judgment of $1,200,000 entered in favor of the plaintiff, Empire Manufacturing Company (Misemer).
Empire argues on appeal that the district court erred: (1) in awarding Misemer $1,200,000 in damages; (2) in concluding that Empire committed an anticipatory breach of contract; and (3) in granting the temporary restraining order.
The parties tried this case to the district court, which took the matter under advisement and later issued a journal entry/memorandum *73 decision. The journal entry contains findings of fact in numbered paragraphs, which Empire has not appealed from. Thus, the trial court's determinations of fact are final and conclusive. Klose v. Wood Valley Racquet Club, Inc., 267 Kan. 164, 975 P.2d 1218 (1999).
The district court's findings of fact, with the names we are calling the parties substituted for the terms, plaintiffs and defendant, are as follows:
"1. Plaintiff Kent Misemer was the owner of a company known as Empire Manufacturing Company from August of 1991 to February of 1997. The company engaged in the manufacturing and sale of candles and related products.
"2. On February 28, 1997, Misemer sold the assets of his company to defendant [Empire Candle] which was a wholly owned subsidiary of a company called Diamond Brands Incorporated, for approximately $26,000,000. Part of the assets included inventory worth approximately $7,500,000 half of which consisted of raw materials and half of finished goods.
"3. The sales contract contained the following clause which is the subject of the dispute in this case:
`10.03 Obsolete Inventory; Disposal. If, on the first anniversary of the Closing Date, there remains any Inventory which also existed on the Closing Date, then buyer must, within 10 business days of that first anniversary, determine the book value of that remaining Inventory and deliver a written copy of that determination (including a reasonable amount of detail to support that determination) to Seller and Shareholder. Within 5 days of Seller's and shareholder's receipt of that written determination, Seller and Shareholder, jointly and severally, must pay to Buyer the book value of that remaining Inventory. Buyer must dispose of that remaining Inventory in accordance with the past practices of Seller regarding the disposal of obsolete or slow-moving Inventory. Each month following the first anniversary of the Closing Date until all of the remaining Inventory has been disposed of, Buyer must remit to Seller and Shareholder any consideration received by Buyer from the disposal of that Inventory, less Buyer's direct cost of such disposal. In the event Buyer's direct cost of disposal exceeds the amount of consideration received by Buyer for the disposal of the Inventory, Seller and Shareholder, jointly and severally, must promptly remit an amount equal to such excess. Buyer agrees to use all reasonable efforts during the 12-month period following the Closing Date to continue marketing all inventory items which buyer purchased from Seller if those types of items were sold by Seller during 1996. Buyer will also use all reasonable efforts to sell (provided the items are salable) those inventory items which Buyer purchased from Seller before selling any products which are produced after the Closing Date and which are exactly the same types of products as the existing inventory.'
*74 "4. The uncontradicted evidence of Misemer establishes clearly what their past practices consisted of regarding the disposal of inventory more than one year old. They would continue to market product at national shows and sales meetings at a discount and to solicit orders for which it would convert raw materials into finished goods and sell them at reduced price. It rarely if ever sold raw materials by themselves.
"5. Misemer almost always recouped its cost of the old inventory by engaging in the practices above. Only very rarely did it dispose of this inventory at below its cost. Occasionally, it received more than its cost.
"6. Shortly after the one year anniversary date of the sale, Empire sent a letter to Misemer claiming that it had inventory (`Misemer inventory') on hand unsold after one year from the date of sale with a book value of approximately $1,800,000.00. This greatly exceeded any amount plaintiffs ever had on hand at the end of a year during the time he operated the business. At the end of 1995, plaintiff had on hand inventory more than two years old of a value of $70,000.00. At the end of 1996, the value of such was $150,000.00.
"7. Plaintiffs disputed the amount of unsold inventory and the parties agreed to arbitrate. The arbitrators found that the book value of the unsold inventory amounted to $1,329,653.00. They awarded this amount to Empire plus costs, interest, and attorney fees.
"8. Misemer paid the foregoing amounts to Empire.
"9. Empire made only one payment to Misemer for disposal of inventory that remained on hand after the one year anniversary date of the contract. That occurred in October, 1999, in the amount of $28,430. This was over one and a half years after the first anniversary date of the contract.
"10. About this time Empire decided to exit the candle business. In connection with this decision it entered into a contract with one Tom Mastaw to liquidate the `Misemer inventory' by means of an auction. Empire decided on the auction at this time partially because the lease at the warehouse where the inventory was being stored was about to expire and the approaching holidays were thought to be favorable for candle sales.
"11. Before Empire decided on the auction, it discussed with Mastaw the obtaining of bids from potential buyers of the inventory. It only gave Mastaw five days to obtain bids for the entire `Misemer inventory.' Mastaw would have utilized other methods to dispose of the inventory had he been given more time. Representatives of Empire told Mastaw that the inventory had a value of $1,300,000.00. Misemer told Mastaw that it had a value of $1,200,000.00.
"12. Prior to the sale of the business to Empire, Misemer had never disposed of or sold older inventory by means of an auction. Nor had Misemer ever engaged the services of anyone to liquidate older inventory in one bulk sale.
"13. On November 5, 1999, Misemer filed this action and obtained a temporary restraining order stopping the auction.
"14. Prior to the scheduled auction, Empire had decided to sell its assets. It completed the sale except for the `Misemer inventory' in December 1999 to a company by the name of Empire Candle Manufacturing, L.L.C.
*75 "15. To the whatever extent Empire exists today, its president and CEO is Naresh Nakra, the president and CEO of Diamond Brands, Inc. There are no other employees.
"16. In January, 1999, Empire had approximately one hundred employees. About eighty of these worked in manufacturing. The sales force consisted of three or four people plus fourteen or fifteen employees of Diamond Brands, Inc.
"17. Empire has no manufacturing capability at the present time and no longer engages in any business of any kind.
"18. Diamond Brands, Inc. has no capability on its own to convert any of the raw materials in the `Misemer inventory' into finished goods. In order to accomplish this Empire would have to contract with some other entity and pay for the manufacturing.
"19. There was some confusion as to what constituted the `Misemer inventory' after Empire sold its assets to Empire Candle Manufacturing L.L.C. The latter [inadvertently] co-mingled some of it with what it had purchased from Empire and then converted it to finished product and sold it.
"20. It appears that Empire disposed of millions of dollars of the inventory that it purchased from Misemer. The record does not clearly reflect why it was not able to dispose of the amount now in question particularly in light of Empire's argument that it still is able to dispose of the `Misemer inventory' in accord with Misemer's past practices."
The district court concluded as a matter of law that Empire committed an anticipatory and partial breach of the contract by selling its assets, except the Misemer inventory, in December 1999 to a company called Empire Candle Manufacturing, L.LC. After the sale of its assets, Empire had no manufacturing capability and no longer engaged in business of any kind. Empire's parent company, Diamond Brands, Inc., had no capability to convert any of the raw materials in the Misemer inventory into finished goods.
The district court concluded, in these circumstances, that Empire would "incur more direct costs of inventory disposal than if it retained its own manufacturing capability." The district court further concluded that, after the sale of its assets, Empire was not in a position to dispose of the Misemer inventory "in a manner in which [Misemer] will realize the type of recovery that resulted from `the past practices of [Misemer] regarding the disposal of obsolete or slow-moving inventory.'"
The district court figured the amount of damages suffered by Misemer on account of the breach as $1,200,000. The district court's damages computation centers on an approximation of the *76 book value, which was based on several sources. (1) The book value of the Misemer inventory as determined by the August 1999 arbitrator's award was $1,329,653. Between the arbitration award and the time of the breach, Empire paid one remittance of $28,430 to Misemer. (2) Empire told the auctioneer that the inventory had a value of $1,300,000. (3) Misemer told him it had a value of $1,200,000. The district court's awarding the estimated book value to Misemer as the amount of damages resulting from the breach was based on Misemer's uncontroverted evidence that, during the time Misemer operated the business, it almost always recovered its cost, i.e., book value, when it disposed of old inventory, sometimes by recovering a little more and sometimes a little less. By the terms of the agreement, Empire was required to dispose of old inventory in accordance with Misemer's past practices. The district court's assumption was that Empire, using Misemer's methods, ought to have recovered near book value. But for the breach, that recovery less direct costs of disposal would have been remitted to Misemer. Hence, according to the district court, Misemer suffered a financial loss of $1,200,000 as a result of the breach.
We review the district court's decision in this case to determine whether its findings of fact are sufficient to support its conclusions of law, which involves a question of law based on given facts. Kansas Gas & Electric Co. v. Will Investments, Inc., 261 Kan. 125, 128, 928 P.2d 73 (1996). Our review of questions of law is unlimited. Lindsey v. Miami County National Bank, 267 Kan. 685, 690, 984 P.2d 719 (1999).
The choice-of-law provision in the agreement at issue provides that "[a]ll questions concerning the validity, operation, enforceability, interpretation, construction, and effect of this Agreement" are governed by Minnesota law. The general rule, and the Minnesota rule, governing damages in a breach of contract action is that the damage award should be a monetary amount sufficient to place the plaintiff in the same situation as if the contract had been performed. Christenson v. Milde, 402 N.W.2d 610, 613 (Minn. App. 1987). Under the terms of the agreement between Misemer and Empire, Misemer was to pay book value of Misemer inventory remaining after one year. Misemer paid $1,329,653. Empire was *77 to continue disposing of the Misemer inventory according to Misemer past practices and remit the amounts it recovered less direct costs of disposal. Empire remitted $28,430 recovered from the disposal of some remaining Misemer inventory. Misemer was out of pocket $1,301,223. On the basis of the evidence, the district court awarded Misemer $1,200,000.
Empire first argues that there was insufficient evidence to support the damages award. Empire cites several loss-of-profit cases for the well-known sister principles that contract damages must be shown with a reasonable degree of exactness and that speculative damages are not recoverable. Cardinal Consulting Co. v. Circo Resorts, 297 N.W.2d 260, 266-67 (Minn. 1980); Leoni v. Bemis Co., Inc., 255 N.W.2d 824, 826 (Minn. 1977). The cases he cites are Minnesota cases, in keeping with the choice-of-law provision in the agreement. The district court considered the circumstances of this case to be analogous to loss of profits and cited a Kansas loss-of-profit case on assessing damages, Vickers v. Wichita State University, 213 Kan. 614, 518 P.2d 512 (1974). The Minnesota and Kansas cases are not in conflict on the basic principle that there must be reasonable certainty in proof of loss. Absolute certainty is not required. In Cardinal Consulting, the Minnesota court stated that lost profit damages may be recovered where
"their amount is shown with a reasonable degree of certainty and exactness. This means that the nature of the business or venture upon which the anticipated profits are claimed must be such as to support an inference of definite profits grounded upon a reasonably sure basis of facts.... This rule does not call for absolute certainty." 297 N.W.2d at 266.
In Leoni, the Minnesota court approved an award of damages for loss of future profits of a new business in spite of its general rule that such loss would be too speculative. The Minnesota court stated: "This general rule derives from the fact that, lacking a history of profits, new businesses rarely have evidence upon which an award of damages may be based with the requisite degree of certainty. McCormick, Damages, § 29, p. 107." 255 N.W.2d at 826.
In the present case, there was evidence of Misemer's history of, on average, recovering book value by sometimes recovering a little less and sometimes recovering a little more than book value when *78 it disposed of old inventory. This evidence establishes Misemer's damages to a reasonable degree of certainty.
On this point, Empire also cites Faust v. Parrott, 270 N.W.2d 117 (Minn. 1978). Although superficially similar to the present case in that both involve partial breaches of asset purchase agreements, Faust differs in material facts. Faust purchased the business assets and goodwill of a salvage business; Parrott contractually promised not to compete within 100 miles. A jury found that Parrott breached the covenant not to compete. The measure of damages was profits lost by Faust as a direct result of Parrott's competitive activities. Under these facts, Faust's burden was to show that its decline in profitability was directly attributable to Parrott's competition as opposed to being the result of factors other than Parrott's breach.
The parallel that Empire would have the court draw with Faust is that Misemer failed to show that without the breach it would have recovered the approximate book value of the old inventory. In Faust, there were many potential explanations for the decline in profits, but plaintiffs had not presented evidence that would rule out or even diminish the likelihood of nonbreach reasons. Under the agreement in the present case, Misemer paid $1,329,653 to Empire for book value of the old inventory. Empire remitted only $28,430. Empire breached the agreement by selling its assets, thereby putting itself in a position where it was unable to employ Misemer's past practices to dispose of the remaining old inventory. Misemer lost recovery of the book value he paid as a consequence of Empire's breach. Causation of the loss, which lay at the heart of the court's remand in Faust, is not an issue here.
Empire also argues that Misemer presented no evidence on the critical damages questions regarding the aging inventoryhow much value it had lost, what Empire's costs of disposal would have been, if there was a market for the aging inventory, and whether an auction would have recovered more than disposal by Misemer's past practices. The premise on which Empire builds this argument is a misstatement of the district court's decision. Empire states that it breached its contract not only by selling all its assets but also by attempting to sell the old inventory at auction. Empire's attempt *79 to auction the old inventory, however, was enjoined before it could become a breach of the contract. The district court concluded that Empire "committed an anticipatory and partial breach of the contract when it sold its assets to Empire Candle Manufacturing L.L.C. in December 1999." The sale of the assets constituted a breach of the contract provision that required Empire to dispose of Misemer inventory according to Misemer's past practices because the sale of the assets stripped Empire of the capability to engage in Misemer's past practices. The damages that Misemer had the burden to show were those caused by Empire's not having the capability to dispose of Misemer inventory according to Misemer's past practices. Accordingly, Misemer's evidence was of past practices and the recovery from disposal of old inventory using those practices. Misemer had no evidence to offer regarding diminishing value or marketability of aging inventory because Misemer's evidence of its past practices was that there was a
"need to make sure that any of inventory that was left over at the end of the season was sold. So from the very beginning, we made sure that we moved out the inventory that was left over at the end of the season. We did that every year. With every season, we talked about it and moved that inventory out."
Engaging in the practice of promptly disposing of old inventory, Misemer had no old inventory in 1993 or 1994, and in 1995 "it was somewhere in the seventy thousand dollar range and in [19]96 it was $147,000."
Misemer had the burden of proving its damages. It did so with evidence of the amount it paid, according to the agreement, out of pocket for book value of the Misemer inventory and evidence that on average it recovered approximately book value when it disposed of old inventory. A reduction of damages asserted by the defendant, like mitigation of damages in cases of breach of contract, is for the defendant to show. 22 Am Jur.2d Damages § 908, p. 930, citing Miller v. Kruggel, 165 Kan. 435, 195 P.2d 597 (1948). Evidence that the value of Misemer inventory was reduced due to age, costs of disposal, marketability, and whether an auction would have recovered more than disposal by Misemer's past practices was Empire's responsibility. In any event, there was evidence on those subjects, most of it introduced by Misemer.
*80 Thomas Mastaw, who had been hired by Empire to auction the Misemer inventory, was called as a witness by Misemer. He testified that he had been told that the inventory was worth $750,000. He expressed the opinion that auction proceeds would have been between $350,000 and $450,000. He believed that an auction would garner as much as sale of the inventory. He stated no basis for his belief.
Drummond Crews also was a plaintiffs' witness. He was hired by Kent Misemer in August 1991 as national sales manager for Empire Manufacturing. Within a few months, Crews became president of the company. He remained in that position until February 1997, when the assets of the business were purchased by Empire Candle. He continued working as president of the successor company, Empire Candle. He no longer had full say about operations, and he did not agree with some of the changes instituted by new management in manufacturing and marketing. Crews believed that time proved him right. In December 1999, Crews purchased the assets of Empire Candle and became the president of Empire Candle Manufacturing, L.L.C. Crews excluded the Misemer inventory from the assets he purchased. He paid approximately 15 cents on a dollar for the inventory he purchased from Empire, "a ridiculously low low price." He described the Empire inventory as being similar to the Misemer inventory. The Misemer inventory was excepted from the noncompete clause of the agreement.
Crews testified that when he worked for Misemer, they disposed of 1-or 2-year-old inventory either by creating a special item and pricing it to sell or displaying items along with regular products at trade shows. The aim was to recover cost and "[m]ost of the time [they were] pretty successful." They did not use inventory liquidators or salvagers or auctioneers.
Crews testified that in August 1997 he was instructed to dispose of new inventory before getting into the Misemer inventory. He also reported a subsequent, less pointed conversation with another member of management on the same topic.
With regard to reduction of the value of the Misemer inventory, Crews testified that inventory depreciates over time. He said that Misemer's sales force remained after Empire bought the assets and *81 that personnel changes did not occur until early 1998. In the first year after the sale, a significant percentage of the Misemer inventory was disposed of.
Kent Misemer testified that the one remittance check he received from Empire was for $28,000, which was less than half the book value of the inventory that had been disposed of.
Empire also argues that Misemer failed to show that he sustained monetary damage as a result of the breach because the evidence establishes that the proceeds of an auction would have exceeded a sale of the Misemer inventory at the going market rate. This argument seems to be based on Crews' testimony that he purchased Empire's inventory for 15 cents on the dollar. He characterized the price as "ridiculously low low." There is nothing in the evidence even to suggest that what Crews paid for Empire inventory was "the going market rate."
Empire argues that the district court computed damages as if the breach occurred in February 1998, rather than in December 1999. The general rule is that damages are to be measured as of the date of the breach. 22 Am Jur.2d Damages § 79, p. 92. Empire's argument seems to be that the district court violated the general rule by awarding $1,200,000. The evidence, however, does not support the assertion that $1,200,000 would have been the amount of the damages had they been computed in February 1998. In February 1998, Empire claimed that the book value of the Misemer inventory was more than $1,800,000. The arbitration hearings were held in late June and early July 1999. After arbitrating the amount, Misemer paid Empire $1,329,653.
In addition to the book value, as determined by arbitration, the district court based its damages award on "the statements of both plaintiff and defendant to the auctioneer as to the value of the Misemer inventory and that defendant has previously paid a small amount to plaintiff for inventory disposal." The statements of plaintiff and defendant were the subject of the district court's finding number 11: "Representatives of defendant [Empire] told Mastaw that the inventory had a value of $1,300,000.00. Plaintiff [Misemer] told Mastaw that it had a value of $1,200,000.00." Empire has not challenged the district court's finding. Because Mastaw, the auctioneer, *82 did not enter the picture until late October or early November 1999, we can assume that the valuations given by the parties for the Misemer inventory were current at that time. The breach occurred approximately a month after the scheduled auction.
Empire argues that the district court mistakenly relied on the book value of the Misemer inventory in computing damages without regard for depreciation. In essence, this argument is simply a rephrasing of the previous argument that damages had not been calculated as of the time of the breach. This argument, too, fails from lack of supporting evidence.
As stated in the preceding paragraph, in addition to the book value determined by arbitration in August 1999, the district court based its damages award on the parties' valuations of the Misemer inventory as communicated to the auctioneer, presumably in late October or early November 1999.
There was testimony by Crews that inventory generally depreciates with age. With regard specifically to the condition of the Misemer inventory, Empire refers the court to this question to Crews and his answer: "Q. I believe you testified in your deposition you would expect significant deterioration to the missing inventory by November of 1999? A. Yes." Empire, in the statement of facts in its brief, makes Crews'"expectation" out to be an established fact"By November 1999, the inventory was almost three years old, had depreciated in value, and its physical condition had significantly deteriorated." Crews' testimony, however, was nothing more than conjecture. Empire urges the court to accept Crews' testimony that he paid 15 cents on the dollar for Empire's inventory as establishing the value of the Misemer inventory. Determining the value of Misemer inventory to be 15% of book value would not be a reasonable inference from the "ridiculously low low" price Crews paid. The circumstances in which that price was set were unique in that the inventory sale was part of Crews' agreement to purchase Empire's assets, and Crews' characterization of the price seems to indicate that he regarded it as bearing no relation to reasonable value. Crews' excluding the Misemer inventory from the purchase cannot be construed as evidence of its lack of value *83 because there is no evidence of the reason for the exclusion, which likely was due to its being the subject of this dispute.
Empire urges the court to consider the amount of its postarbitration remittance as evidence of the depreciated value of the Misemer inventory. Misemer testified that he received a check in approximately the amount of $28,000. He believed that the book value on the inventory that had been disposed of was "in the 60some thousand dollar range."
We do not know how much of the difference between the approximately $60,000 book value and the $28,000 remittance was accounted for by Empire's direct costs of disposal. This evidence of the difference between book value and remittance from one sale of a small portion of the inventory seems to be the best evidence of depreciated inventory, and it is inexact and amounts to very little.
Empire also urges the court to consider the $350,000-to$450,000 estimate of what the auction revenues would have been if it had not been enjoined. The estimate is of auction revenues. It is not an estimate of the depreciated value of the inventory. Nor is it an estimate of the revenue that could be generated by disposing of the inventory according to Misemer's past practices. Even if an estimate of the auction revenues were material to Misemer's damages, the $350,000-to-$450,000 estimate would not be reliable evidence for valuing the Misemer inventory. Misemer testified that Mastaw told him Empire hired him to auction $1,300,000 worth of merchandise, but the inventory Empire turned over to Mastaw was about half that amount.
It appears that the damages award put Misemer in a somewhat better situation than he would have been in if the contract had been performed. The damages award, however, accurately reflects the evidence. Misemer's damage award was $1,200,000. Misemer's evidence showed that he was out of pocket $1,301,223, which was the amount of the arbitration award he paid to Empire less Empire's $28,430 remittance. Misemer's evidence showed that, in its experience of disposing of old inventory, Misemer generally recovered cost of the inventory. The measure of the damages was how much of his out-of-pocket amount he would have recovered if Empire had disposed of the remaining Misemer inventory according *84 to Misemer's past practices. The one small remittance, which did not show actual book value of the inventory or costs of disposal, is not sufficient to support a reduction in established damages. The evidence that would have established to a reasonable degree of certainty how much of his out-of-pocket amount Misemer would have recovered if the contract had been performed was evidence that Empire should have presented. The remaining Misemer inventory was under Empire's control, disposal of it was up to Empire, and Empire's costs of disposal depended on its methods.
In Peters v. Mutual Ben. Life Ins. Co., 420 N.W.2d 908, 916 (Minn. App. 1988), the court stated: "The trial court has broad discretion in determining whether to grant a new trial for excessive damages." The trial court in Peters "expressly found that an award of $365,000 for a business generating $114,000 in profits was fully supported by the evidence and was not excessive." 420 N.W.2d at 916. The award was upheld on appeal because the trial court's "finding was not a clear abuse of discretion." 420 N.W.2d at 916. Here, the damages award was supported by the evidence.
The final argument that Empire makes with regard to the damages award is that the district court failed to recognize the effect of the arbitration award in calculating damages. Empire argues it constitutes res judicata, collateral estoppel, or issue preclusion. There is no merit to the argument because the premises on which it is based are faulty. Empire misstates what the district court determined constituted the breach. Empire asserts that "[t]he district court's decision focuses on events that took place prior to March 1, 1999, as a springboard for determining that Empire breached the Agreement by not disposing of the Misemer inventory in accordance with Misemer's prior practices." Contrary to this assertion, the district court found that Empire breached the agreement in December 1999 by selling its assets, thereby placing itself in a position where it was incapable of disposing of the Misemer inventory in accordance with Misemer's prior practices. Empire also misstates the scope of the arbitration decision. Empire asserts that the arbitration panel determined that Empire followed Misemer's prior practices for 2 years and that, after those 2 years, inventory *85 with a book value of $1,300,000 remained unsold. The arbitration award expressly settles claims "based on any event occurring before March 1, 1999." The inventory disposal provision of the agreement had no utility until February 28, 1998, which was 1 year after the agreement was executed. Thus, the arbitration decision involved only 1 year of disposal practices. In any event, whether Empire adhered to Misemer's past disposal practices before it sold the assets in December 1999 is irrelevant to the question of breach. If Empire's argument is that the district court should have reduced the damages award based on an inference based on the arbitration decision that the inventory could not be disposed of using Misemer's past practices, the argument fails because the arbitration decision does not support such an inference. The arbitration decision settled accounts as of March 1, 1999, by which date Empire had by one method or another disposed of all but $1,300,000 of the original $7,500,000 Misemer inventory.
Empire next argues that the district court erred in concluding that Empire committed an anticipatory breach of contract. We find no merit to this argument. It is based entirely on a false premise. In arguing that it did not commit the breach the district court determined, Empire misstates the nature of the breach. Empire asserts that "[t]he district court judge found that Empire breached its contract because of the failure to follow Misemer's past practices." In fact, the district court determined that the breach occurred when Empire sold its assets in December 1999. Whether Empire followed Misemer's past practices is not an issue.
Empire's final argument is that the district court abused its discretion in granting the temporary restraining order. The granting of injunctive relief involves the exercise of judicial discretion and will be reviewed by this court for abuse of discretion. Kansas East Conf. of the United Methodist Church v. Bethany Med. Ctr., 266 Kan. 366, 377-78, 969 P.2d 859 (1998).
The district court's Temporary Restraining Order is dated November 5, 1999. It contains nine "specific findings":
"1. That the defendant has indicated that it intends to dispose of certain inventory by auction on November 6, 1999 at 10:00 a.m.
*86 "2. That the inventory that is to be disposed of includes inventory that is the subject of an agreement between the plaintiffs and the defendant.
"3. That under the terms of the agreement between the parties defendant is to dispose of unsold inventory in accordance with past practices of the plaintiffs.
"4. Plaintiffs in their verified petition have indicated that never in the history of the company has inventory been disposed of by auction.
"5. Plaintiffs in their verified petition have represented their belief that if the property is disposed of by auction the amount received will not be adequate.
"6. Plaintiffs in their verified petition have represented that to the present date defendant has not consulted with the plaintiffs regarding its intention to dispose of the property that is the subject of the agreement by auction.
"7. The Court is of the view that the defendant should be restrained from disposing of the inventory by auction until such time as the Court has had an opportunity to consider the testimony of the parties regarding disposal of the inventory through auction.
"8. The Court finds that unless the defendant is restrained from disposing of certain inventory by auction that there is substantial likelihood that the plaintiffs will sustain irreparable harm.
"9. Accordingly, the Court finds that in order to maintain the status quo it should enter its order restraining the defendant from disposing of the inventory that is subject to section 10.3 of the agreement between the parties by auction."
Based on the findings, the district court temporarily restrained Empire from disposing of the Misemer inventory by auction. In the order, the district court scheduled a hearing on the Application for Temporary Injunction for November 17, 1999.
Empire argues that Misemer had a legal remedy in damages for breach of contract and therefore would not have suffered irreparable harm if the November 6 auction had taken place. Empire cites Sampel v. Balbernie, 20 Kan. App. 2d 527, 530-31, 889 P.2d 804 (1995), where the court enumerated criteria for obtaining injunctive relief:
"Injunctive relief is an equitable remedy. To obtain injunctive relief from a prospective injury, the movant must show: (1) there is a reasonable probability of irreparable future injury to the movant; (2) an action at law will not provide an adequate remedy; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) the injunction, if issued, would not be adverse to the public interest."
Here, Misemer sought injunctive relief in order to prevent Empire from breaching the contract by disposing of the inventory *87 by auction. Misemer's petition for relief alleged that disposal of the inventory by auction would constitute a breach of the agreement.
Monetary damages for the breach of contract would have been available to Misemer if the district court had not enjoined the auction. The district court's action, therefore, was taken without regard to the criteria set out in Sampel. This court, as well as the Court of Appeals, has stated the necessity for a party seeking injunctive relief to show that an action at law will not provide adequate remedy. Mid-America Pipeline Co. v. Wietharn, 246 Kan. 238, 242, 787 P.2d 716 (1990), and 266 Kan. 366, 382-83. Here, Misemer would have had an adequate remedy at law for breach of contract.
The question is whether the district court's granting injunctive relief in order to prevent a breach of contract constitutes an abuse of the district court's discretion. "Judicial discretion is abused when judicial action is arbitrary, fanciful, or unreasonable, which is another way of saying that discretion is abused only where no reasonable person would take the view adopted by the trial court." Simon v. Simon, 260 Kan. 731, Syl. ¶ 2, 924 P.2d 1255 (1996). Here, the measure of the trial court's discretion is bounded by the above criteria. Thus, the trial court's action in granting injunctive relief when the criteria were not satisfied is an abuse of discretion.
Without citing authority for the remedy it seeks, Empire asks this court to remand the matter to the district court for determination and award of costs it wrongfully incurred as a result of the restraining order. Empire mentions out-of-pocket expenses in setting up and advertising the auction, which was enjoined 1 day before it was scheduled to take place. Empire also asserts that the inventory now will be less valuable than it was at the time the district court prohibited the auction, and it wants to recover the loss in value. We reject Empire's request to remand. The trial court considered those factors in determining the damages award. Further, as Misemer points out, the injunctive relief never went beyond the temporary restraining order and Empire has not been prohibited from disposing of the Misemer inventory by auction since shortly after the November 6 auction was cancelled. In fact, on November 17, 1999, just 12 days after the restraining order was *88 issued, the parties jointly agreed to dissolve the temporary restraining order.
The district court's judgment on liability and damages is affirmed.
DAVIS, J., not participating.
LEE A. JOHNSON, J., assigned.[1]
NOTES
[1] REPORTER'S NOTE: Judge Johnson, of the Kansas Court of Appeals, was appointed to hear case No. 86,347 vice Justice Davis pursuant to the authority vested in the Supreme Court by K.S.A. 20-3002(c).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600735/
|
273 Kan. 89 (2002)
41 P.3d 809
STATE OF KANSAS, Appellee,
v.
RUTH HAMMAN, Appellant.
No. 86,509.
Supreme Court of Kansas.
Opinion filed March 8, 2002.
Steven L. Davis, of Emporia, argued the cause and was on the brief for appellant.
R. Clark Allemang, II, assistant county attorney, argued the cause, and Marcus Goodman, county attorney, and Carla J. Stovall, attorney general, were with him on the brief for appellee.
The opinion of the court was delivered by
ALLEGRUCCI, J.:
Ruth Hamman appeals from the district court's denial of her motion to suppress evidence seized and obtained during a traffic stop and her detention and subsequent convictions of driving under the influence of alcohol and transporting an open container. The case was transferred from the Court of Appeals pursuant to K.S.A. 20-3018(c).
The issue is whether the stopping and detaining of Hamman in Lyon County by a Coffey County deputy sheriff was illegal.
The trial court entertained Hamman's motion to suppress while hearing the evidence in the case. Coffey County Deputy Sheriff Eric Smith testified in the Lyon County trial court about the circumstances in which he stopped Hamman.
On June 12, 2000, Deputy Smith was called to assist a Lyon County deputy. There were juveniles with alcohol at the boat ramp *90 on the east side of Hartford. The boat ramp is on the line between Coffey and Lyon Counties. The juveniles were on the Coffey County side.
In order to get to the boat ramp, Deputy Smith drove what he called the "main thoroughfare" to Hartford from Coffey County into Lyon County and back again into Coffey County. The "main thoroughfare" is a paved road, which is called Angus Road, that generally follows the north/south border between Coffey and Lyon Counties. For some distance, Angus Road is in Lyon County.
After completing the call to the boat ramp, Deputy Smith drove back the way he had come. While in Lyon County, Smith noticed a Plymouth Neon ahead of him that was going approximately 40 miles per hour. Deputy Smith was traveling approximately 55 miles per hour, and he slowed to keep from getting too close to the Neon. The road was generally straight and had lane markings. Smith observed the Neon going to the right side of the road and then veering back toward the center line.
Due to oncoming traffic, Smith was not able to pass the Neon right away. As oncoming traffic approached the Neon, it moved to the right side of the lane. As oncoming traffic cleared, the Neon veered back toward the center line. He observed the Neon going from side to side in its lane two or three times. From his training and experience, Smith recognized that driving pattern as an indication that the driver might be under the influence of alcohol. Due to his safety concerns, Smith decided to follow the vehicle.
Within a short time, the driver of the Neon turned on the right turn signal and turned off the pavement onto a gravel road. Smith observed the Neon go off to the left side of the gravel road and the driver "struggle slightly" with the steering wheel to get the car back on the right side of the gravel road. Back on the right side of the road, the Neon slowed almost to a stop before proceeding. Then Smith observed the Neon being driven very slowly and on the far right side, not in the ditch, but right alongside it.
Smith decided that for the sake of safety he should stop the vehicle. Smith asked his dispatcher if there was a Lyon County deputy in the area. He asked his dispatcher to let Lyon County know that he needed a Lyon County deputy to come to his location. *91 Smith was advised that there was a Lyon County deputy in the area.
Smith turned on his emergency lights, and the Neon stopped. Before he got out of his patrol car, Smith was advised that a Lyon County deputy was en route. Smith got out of his patrol car and approached the Neon. The driver of the Neon had very watery eyes, she moved sluggishly, and she smelled of alcoholic beverage. She produced her driver's license.
Smith described to Hamman what he had observed and told her that he stopped her on account of the way she was driving. He advised her that he was a Coffey County deputy, that they were in Lyon County, and that they would wait for a Lyon County deputy to arrive and investigate the circumstances. Hamman remained in her automobile.
Deputy Miller, the Lyon County deputy who had been at the Hartford boat ramp a short time earlier, came to where Smith had stopped the Neon. Smith stayed while Miller investigated the offense. Hamman consented to a preliminary breath test, and she was placed under arrest by the Lyon County deputy. With Hamman's consent, the Lyon County deputy searched the Neon and found an open can of beer in the armrest console.
On the motion to suppress, the trial court made the following ruling on the record:
"I do find that this is an officer who has been trained in alcoholdetection of alcohol impaired drivers. He has been to the Kansas Law Enforcement Training Center as well as the KDOT training class for 24 hours on the arrest and detection of alcohol impaired drivers. So he has the foundation to determine what are alcohol influence indicators. In this case he did testify that he saw the defendant, I think he used the term veer between the lines, instead of weave but go back and forth two or three time between the lines. He also noticed the slow speed of about 40 m.p.h. on the first county road and then about 10 to 15 m.p.h. on the second county road. He also observed, probably more telling was the wide, he described it as a wide turn onto the county road and then hugging the ditch on the second county road that she was traveling on. All of these things are, of course, legal activities or at least possible legal activities but they do add up to an alcohol indicator for this Court or it led the officer to believe, and in fact, he did testify, that he believed that he had probable cause that he had an alcohol impaired driver at this point because the driving that he observed and so as a police officer he would have been well within hisit would have been a proper car stop. The only *92 question is, well, he was not responding to a Lyon County request so what jurisdiction does a person, as an individual then have under [State v. Miller, 257 Kan. 844, 896 P.2d 1069 (1995),] to make an arrest or the intention in this case and that's governed by K.S.A. 22-2403, arrest by a private person and it does, under that statute, allow a person to make an arrest for any crime other than a traffic infraction. This, of course, is not a traffic infraction, it is a traffic misdemeanor, has been or is being committed by the arrested person in the view of the person making the arrest. Well, this officer believed that he had probable cause that this person was committing the crime of DUI in some form so I do believe that he did have that probable cause. I believe that this act wasI don't know if I should characterize it as an arrest or a detention. I think that once somebody is stopped by a policeman and the lights are flashing and they are told not to leave, that probably constitutes an arrest or just real close to it. I also know the law and K.S.A. 22-2406 anticipates those cases when the officer has probable cause to stop the vehicle and then subsequent determination leads to believe that they no longer have probable cause and they can release the individual and that is what could have happened here if that evidence would have gone that way so I do believe that based upon the facts, especially the fact that in light of the belief that there was a person, DUI, driving the vehicle, it is certainly a serious safety concern. I believe it was probable cause to stop if he was a law enforcement officer under K.S.A. 22-2403 that probable cause would also allow a private person to make that arrest having observed those facts at that time. So based upon those findings the Court is of the opinion that the Motion to Suppress as filed by the defendant in this case, should be denied."
In summary, the trial court concluded that it was proper for Smith, as a private person, to arrest Hamman. The trial court reasoned as follows: Smith was trained and experienced in recognizing indicators of driving under the influence. Smith observed indicators of driving under the influence in Hamman's driving. Smith, therefore, had probable cause to stop Hamman. DUI is a traffic misdemeanor, which is subject to a citizen's arrest. See K.S.A. 2001 Supp. 22-2403(2). Because Smith had probable cause to stop Hamman, he could do so as a private person regardless of the Lyon County location pursuant to 22-2403(2) and State v. Miller, 257 Kan. 844, 896 P.2d 1069 (1995).
K.S.A. 2001 Supp. 22-2401a(1) provides: "[S]heriffs and their deputies may exercise their powers as law enforcement officers: (a) Anywhere within their county; and (b) in any other place when a request for assistance has been made by law enforcement officers from that place or when in fresh pursuit of a person." The trial *93 court determined, and the State concedes, that 22-2401a is not applicable and did not authorize Deputy Smith to arrest Hamman in Lyon County.
With regard to a citizen's arrest, Hamman argues that Deputy Smith, as a private person, did not have authority to stop her pursuant to K.S.A. 2001 Supp. 22-2403, which provides:
"A person who is not a law enforcement officer may arrest another person when:
(1) A felony has been or is being committed and the person making the arrest has probable cause to believe that the arrested person is guilty thereof; or
(2) any crime, other than a traffic infraction or a cigarette or tobacco infraction, has been or is being committed by the arrested person in the view of the person making the arrest."
Subsection (1) does not apply because the offenses Hamman was charged with were not felonies.
Hamman contends that subsection (2) does not apply because she did not commit a crime in Deputy Smith's view. She relies on Miller for support of her construction of K.S.A. 2001 Supp. 22-2403(2).
In Miller, the court considered whether an Osage City police officer's arresting the defendant at his home in Lyndon, without a request for assistance or fresh pursuit, affected the validity of the arrest. Because the Osage City police officer was acting outside his jurisdiction, as set out in 22-2401a, the court considered the validity of the arrest under 22-2403. The court stated: "As recognized by this court in [State v.] Shienle, 218 Kan. [637], 640-41, [545 P.2d 1129 (1976)], the general rule is that a law enforcement officer who makes a warrantless arrest outside the territorial limits of the officer's jurisdiction must be treated as a private person." 257 Kan. at 851.
Thus, in determining whether Deputy Smith's stop of Hamman in Lyon County was authorized by the citizen's arrest statute, K.S.A. 2001 Supp. 22-2403(2), the court need look no further than the question of probable cause. The trial court found that there were indicators of driving under the influence in Hamman's driving that were readily recognizable to Smith. According to the trial court, on the basis of the driving patterns observed by Smith, he *94 had probable cause to believe that Hamman was committing the offense of driving under the influence.
On the probable cause issue, Hamman makes two points in her brief. First, Hamman asserts that Deputy Smith admitted that when he stopped her he did not have probable cause to arrest her and that he observed no violation of the law. The testimony Hamman refers to was given by Smith in response to questions about what further steps he would have taken before arresting Hamman if he had stopped her in Coffey County. Smith said that if he had been acting as an arresting officer in Coffey County, he would have continued his observations after stopping her and would have conducted some roadside testing, such as the preliminary breath test. Smith was first asked:
"Q. Now it's my understanding that at the time you detained her you didn't place her under arrest because you didn't feel like you had authority to do so?
"A. Correct."
Then the following questions were asked and answered:
"Q. Did you also testify on direct examination that the person possibly was driving under the influence?
"A. Yes, I did.
"Q. Officer, had this been a stop within your jurisdiction, would you have proceeded to obtain additional information in order to determine if you had probable cause to arrest this person?
"A. No, I would not.
"Q. You would have just arrested her?
"A. I'm sorry. At which point are you talking about?
"Q. Had you made this stop in Coffey County.
"A. Yes.
"Q. Would you have requested or obtained additional information, such as observations, testing, PBT to ascertain if you had probable cause to make an arrest?
"A. I understand. Yes I would have.
"Q. But at that point, but at that point you didn't have that?
"A. No, I did not."
Then, on redirect, Smith testified:
"Q. At that point she was not under arrest, was she?
"A. No she was not.
"Q. Have you, in your experience as a law enforcement officer in Coffey County and/or the City of Burlington made an investigatory detention under the conditions that you've described you saw in this case?
*95 "A. Yes I have."
Smith's testimony was given in reference to making a formal arrest of Hamman, which he did not do, but left that to the Lyon County deputy. The trial court found that Hamman's driving patterns provided Smith with probable cause to arrest her pursuant to the citizen's arrest statute, K.S.A. 2001 Supp. 22-2403(2). That Smith continued his observations once he approached the car and would have conducted some roadside testing in other circumstances does not mean that he did not have probable cause. Writing about warrantless arrests, this court has defined probable cause as "the reasonable belief that a specific crime has been committed and that the defendant committed the crime. It does not require evidence of each element of the crime or evidence to the degree necessary to prove guilt beyond a reasonable doubt." Key v. Hein, Ebert & Weir, Chtd., 265 Kan. 124, Syl. ¶ 2, 960 P.2d 746 (1998). In the present case, Smith had a reasonable belief that Hamman was driving under the influence at the time he turned on his emergency lights to stop her. Once he stopped her and observed her and smelled alcoholic beverage, he had a reasonable belief that she should be detained until a Lyon County deputy arrived.
Second, Hamman contends that the trial court ignored precedent, specifically Miller. The parties in Miller stipulated that the Osage City police officers knew that a burglary and theft had occurred in Osage City. A third person, who was not involved in the burglary and theft, told an arresting officer that Miller might have been involved. On the basis of that information, the Osage City police officers went to Miller's house in Lyndon in the early morning hours and arrested him. The magistrate judge dismissed the theft and burglary charges against Miller; on stipulated facts, the district court affirmed. This court determined that the stipulation did not contain probable cause to support a citizen's arrest. 257 Kan. at 852. This court remanded, however, directing the trial court to consider whether the arrest may have been valid, not as a citizen's arrest, but as an arrest by law enforcement officers in exigent circumstances, pursuant to 22-2401a. 257 Kan. at 852-53.
Miller is entirely distinguishable from the present case on the facts. The basis for the officers' extraterritorial arrest of Miller was *96 an informant's statement that Miller might have been involved in a burglary and theft. The basis for Smith's arrest of Hamman was his personal observation of her driving.
Although not raised by the State, there is an additional justification for Deputy Smith stopping Hamman. In State v. Vistuba, 251 Kan. 821, 840 P.2d 511 (1992), the deputy sheriff stopped Vistuba after observing him driving in much the same way as Hamman did in the present case. The deputy testified that he had no reason to believe Vistuba committed or was about to commit any crime or traffic violation. He stopped Vistuba because he believed Vistuba was falling asleep. The deputy proceeded to arrest Vistuba for DUI. We upheld the arrest on appeal, holding that "[a] civil or criminal infraction is not always essential to justify a vehicle stop. Safety reasons alone may justify the stop if the safety reasons are based upon specific and articulable facts." 251 Kan. 821, Syl. ¶ 1. And further, such a stop does not violate either the 14th Amendment to the United States Constitution or Section 15 of the Kansas Constitution Bill of Rights. At issue is public safety, and in Vistuba we found persuasive the following observation by the United States Supreme Court in upholding a warrantless search of defendant's vehicle based on public safety reasons:
"`Local police officers ... frequently investigate vehicle accidents in which there is no claim of criminal liability and engage in what, for want of a better term, may be described as community caretaking functions, totally divorced from the detection, investigation, or acquisition of evidence relating to the violation of a criminal statute.'" 251 Kan. at 824 (quoting Cady v. Dombrowski, 413 U.S. 433, 441, 37 L. Ed. 2d 706, 93 S. Ct. 2523 [1973]).
Here, the stop was made in Lyon County rather than Coffey County, but that is a distinction without a difference. In our view, there is no valid reason to limit a valid safety stop by Deputy Smith to Coffey County.
Affirmed.
DAVIS, J., not participating.
BRAZIL, S.J., assigned.[1]
NOTES
[1] REPORTER'S NOTE: Judge J. Patrick Brazil was appointed to hear case No. 86,509 vice Justice Davis pursuant to the authority vested in the Supreme Court by K.S.A. 20-2616.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2600736/
|
273 Kan. 113 (2002)
41 P.3d 281
STATE OF KANSAS, Appellant,
v.
DONATO L. STOUGH, Appellee.
No. 87,079.
Supreme Court of Kansas.
Opinion filed March 8, 2002.
Robert D. Hecht, district attorney, argued the cause, and Deborah L. Hughes, assistant district attorney, was with him on the brief for appellant.
Thomas G. Lemon, of Fisher, Cavanaugh, Smith & Lemon, P.A., of Topeka, argued the cause, and Todd D. Powell, of the same firm, was with him on the brief for appellee.
The opinion of the court was delivered by
LARSON, J.:
This appeal raises questions of whether a trial court has jurisdiction to consider a motion to withdraw nolo contendere or guilty pleas and, if it does, whether it is an abuse of discretion to permit withdrawal of the pleas and dismissal of charges after the *114 defendant had pled guilty, or nolo contendere and been sentenced, granted probation, and discharged from probation.
In May 1995, Donato M. Stough was charged with 22 drugrelated counts, including numerous counts of unlawful use of a communications facility (telephone) in violation of K.S.A. 1994 Supp. 65-4141, and numerous counts of possession of illegal substances in violation of K.S.A. 1994 Supp. 65-4163(a)(3). The charges arose from conduct during February 1995. Shawnee County Sheriff's Officer Timothy Oblander, who was acting as an undercover agent, observed Stough's illegal acts and collected evidence, including the controlled substances seized throughout the investigation, according to the affidavit of the assistant district attorney requesting arrest warrants.
On December 8, 1995, Stough pled guilty to one count of violating K.S.A. 1994 Supp. 65-4141 and one count of violating K.S.A. 1994 Supp. 65-4163(a)(3). He was sentenced on February 23, 1996, to a controlling sentence of 22 months in prison. The court suspended the sentence and placed Stough on 36 months' probation. He successfully completed the terms of his probation and was discharged therefrom by an order filed July 17, 1998.
On March 28, 2001, Stough moved to set aside his pleas and for dismissal of the charges with prejudice because, as stated in his motion, "[a]fter completing probation, the defendant discovered there was a strong potential that former Sheriffs Department deputies tampered with the evidence in this matter" and "[o]n May 11, 1999, in case number 95CR1809, the Honorable Judge Eric Rosen [held] similarly situated defendants in cases with potential tampering could file for appropriate relief consistent with the court's order."
The State's response noted Stough had completed his sentence and Judge Rosen's order was issued after Stough had been released from probation. It contended the court lacked jurisdiction to "enter any orders whatsoever in regards to the case, the pleadings, the plea, the sentence, post-sentence matters or otherwise." The response suggested that if Stough had a post-conviction challenge, the appropriate remedy was to exercise the proceedings contemplated by K.S.A. 60-1507.
*115 At the extremely abbreviated hearing, the trial judge who had earlier sentenced Stough and granted him probation noted that Stough's motion "emanates[d] from the Hernandez situation." Defense counsel apprised the court that the delay had resulted from previous counsel not taking action on Stough's behalf, that an arresting officer had told him Stough fell within the perimeters of the court's order in the Hernandez case, and that charges against two of Stough's codefendants had been dismissed, one when Officer Oblander claimed his Fifth Amendment right to remain silent and refused to testify.
The State orally argued the contentions of its written response that the court lacked jurisdiction and the motion would need to be brought under K.S.A. 60-1507. Stough's counsel orally moved to seek the requested relief pursuant to K.S.A. 60-1507. The court granted Stough's motion.
The court then said:
"And we also don't need to get into a great deal of those facts, because this Court and Mr. Rues [the prosecutor] have been down this road several times before and are intimately aware of all the allegations that relate to the Oblander situation and the Hernandez case, and so we don't need to restate all those matters."
The State responded that it would oppose the motion on previous grounds raised (apparently in reference to cases previously before the court where the same issues had been argued) by stating: "We stand on previous grounds that we had before in terms of the ability to prove that all the evidence was tampered with that we previously appeared in front of you on."
The court did not ask Stough's counsel for any evidence or for any further statement and immediately sustained Stough's motion to set aside his pleas and dismissed the charges with prejudice. The court said:
"Well, again this Court has extensively heard that evidence and has come to the conclusion that certainly the activities by the sheriff's office during the critical dates, and I don't think there is any dispute that this case falls within those dates, would raise any evidence seized in that situation and being held by the sheriff's department would have been tainted and that it was all due to the very outrageous conduct of the sheriffs department during that time period.
*116 "The Court is going to go ahead and sustain the defendant's motion."
From this ruling, the State has appealed.
Although the trial court failed to directly rule on the State's claim of lack of jurisdiction, the ruling made must be considered to be a denial of the State's response and a finding that jurisdiction existed. Therefore, we first consider the State's argument that the district court lacked jurisdiction to consider Stough's motion because he had completed the term of his sentence and had been discharged from his probation.
Jurisdiction is a question of law over which this court has unlimited review. State v. Snelling, 266 Kan. 986, 988, 975 P.2d 259 (1999). It logically follows that if an order of the district court was entered without jurisdiction, this court does not acquire jurisdiction on appeal. See Board of Sedgwick County Comm'rs v. Action Rent to Own, Inc., 266 Kan. 293, 296, 969 P.2d 844 (1998).
In support of its argument of lack of jurisdiction, the State relies on State v. Farmer, 16 Kan. App. 2d 419, 824 P.2d 998 (1992), and State v. Underwood, 228 Kan. 294, 615 P.2d 153 (1980). In Farmer, the defendant was discharged from probation by the trial court. In a later order the trial court attempted to rescind the discharge. The Court of Appeals reversed the trial court and held that once the defendant was discharged the court was without jurisdiction to order him back on probation. 16 Kan. App. 2d at 422.
Farmer is not applicable to the facts of our case. It specifically relates to and directly involves the court's probationary powers under K.S.A. 21-4611(1). Unlike the Farmer case, the trial court in our case did not attempt to exercise jurisdiction over Stough to place him back on probation after his probation had been terminated. Here, Stough's case involves the power of the trial court to permit withdrawal of a plea after sentence under K.S.A. 22-3210(d), which specifically states:
"A plea of guilty or nolo contendere, for good cause shown and within the discretion of the court, may be withdrawn at any time before sentence is adjudged. To correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw the plea."
Underwood is on point, but, contrary to the State's argument, it is supportive of jurisdiction to consider the motion to withdraw the *117 pleas after sentence. In Underwood, the defendant appealed the trial court's refusal to permit him to withdraw his plea for a previously committed crime, the conviction of which was essential to upholding his guilt of felony murder. Underwood argued that as to the plea to his previous crime, he had been promised that no sentence would be imposed and that after successfully serving 2 years of probation, the case would be dismissed or automatically expunged. The trial court held:
"`The defendant has served his period of probation and has been released by the court. The judgment has been completed, the order executed, and the defendant released by the court. Therefore, the court has no jurisdiction to carry out the provisions under K.S.A. 22-3210(7), [now K.S.A. 22-3210(d)] as requested by the defendant.'" 228 Kan. at 297.
Our court upheld the decision of the trial court, but on the grounds it was not an abuse of discretion to refuse to allow the plea to be withdrawn. At no point did we conclude the trial court lacked jurisdiction to permit withdrawal of the plea, and the effect of our decision was directly to the contrary. After reviewing the record, we quoted the last sentence of K.S.A. 22-3210(7) (Weeks), held that Underwood's testimony had been rejected by the trial court, and then stated:
"A plea of guilty or nolo contendere may be withdrawn after sentence as provided in K.S.A. 22-3210(7) for good cause shown only when in the discretion of the trial court it becomes necessary to correct manifest injustice. Not every deviation from the requirements of the statute governing entry of pleas will require withdrawal of a plea. Trotter v. State, 218 Kan. 266, 269, 543 P.2d 1023 (1975). In Hicks v. State, 220 Kan. 279, 283, 552 P.2d 889 (1976), we held the failure of the sentencing court to advise the defendant as to his parole eligibility did not require withdrawal of defendant's plea of guilty. Withdrawal of a plea is discretionary with the trial court. Considering the lapse of time and the facts of this case we cannot find the trial court abused its discretion in refusing to permit the appellant to withdraw his plea." 228 Kan. at 300.
Underwood does not support the State's argument. The court specifically declined to reach its conclusion based on lack of jurisdiction, but rather found the existence of jurisdiction and that the court had properly exercised its discretion in refusing to permit the withdrawal of the plea "to correct manifest injustice."
*118 This result and holding is entirely consistent with the history of proceedings in Kansas where withdrawal of a plea has been requested. The cases are legion in number, and the overwhelming result is that the request is denied.
When the present statutory provision was enacted in 1970 as 22-1210(7) (with language nearly identical to K.S.A. 22-3210[d]), the comment in the October 1969 Kansas Judicial Council Bulletin, p.68, stated: "Many current post-conviction proceedings raise questions concerning pleas of guilty. Claims of coercion, lack of advice and lack of understanding are common in such cases. The proposal seeks to avoid these problems."
The problems have not been avoided as we continue to have large numbers of cases where pleas are asked to be withdrawn, but the statutory language mirrors what was the Kansas common law prior to 1970.
The standard incorporated in the statute is well set forth in State v. Byrd, 203 Kan. 45, 52-53, 453 P.2d 22 (1969), were we stated:
"An analysis of our decisions indicates permission to withdraw a plea depends upon the facts and circumstances of each case. Generally, it is a question of fact for the trial court to determine if the plea was voluntarily and understandingly made. The issue to be determined is whether the ends of justice will be served by permitting the withdrawal. If a manifest injustice to the defendant would result from refusal then permission to withdraw should be granted. [Citations omitted.]"
An excellent summary of this issue is set forth by Chief Justice Harvey in State v. Nichols, 167 Kan. 565, 207 P.2d 469 (1949), where nine cases beginning with City of Salina v. Cooper, 45 Kan. 12, 25 P. 233 (1890), and ending with State v. Bowser, 155 Kan. 723, 129 P.2d 268 (1942), were reviewed. In discussing motions to set aside a plea, Nichols opinion stated:
"The appropriate method of seeking to have that done is for defendant to file a motion in the same court and in the same case in which the plea was entered. The motion should set up the facts in issuable form showing or tending to show grounds upon which the plea should be set aside. Ordinarily it is required to allege that the defendant is not guilty of the crime charged. The time of the filing of the motion, whether before or after the sentence, is not controlling. Neither is the fact that defendant has appealed his case, or is serving the sentence imposed, controlling, but it should be filed with reasonable promptness, as soon as defendant or his counsel learns facts which would justify the court in setting aside the *119 plea. It is possible, of course, that defendant may file such a motion when no such grounds exist. When the motion is filed alleging facts which would justify the court granting it, if established by competent evidence, a hearing may be offered in favor of or opposed to the motion. The court has jurisdiction to hear and rule upon the motion. It is not a motion for a new trial, though if granted the result is to give defendant another opportunity to have a trial, if he wants it. The motion is addressed to the sound judicial discretion of the court. This discretion should never be abused." 167 Kan. at 577-78.
The Nichols opinion recognized that at that time there was "no statute specifically pertaining to motions to withdraw pleas of guilty in criminal cases. The matter [was] handled in each case upon principles of natural justice as applied to the facts of the case and the legal situation." 167 Kan. 565, Syl. ¶ 4.
When the statutory provisions of L. 1970, ch. 129, sec. 22-3210(7) (now K.S.A. 2000 Supp. 22-3210[d]) were enacted, the legislature placed no limitation on the time within which a motion to withdraw a plea after sentence must be filed. We will not impose such a limit when the legislature has not so provided. We hold the trial court has jurisdiction at any time after a sentence is imposed to permit a defendant to withdraw his or her plea in order to correct manifest injustice. This has been our court-designated rule through the years and remains our statutory rule under K.S.A. 2000 Supp. 22-3210(d).
Although the State's response to Stough's motion only contended the trial court lacked jurisdiction to consider the relief requested, it also suggested that if a remedy existed, it would be under K.S.A. 60-1507. The State now admits this assertion to be erroneous because Stough was not in custody under any sentence. We agree.
In addition to its jurisdiction argument, the State at the hearing before the trial court said it relied on "previous grounds ... that we previously appeared in front of you on." It appears the State realized from previous cases where the same issues and facts had been presented that there was "manifest injustice" in the actions of Officer Oblander, and the State chose in this case to primarily make its stand on the lack of jurisdiction argument. That argument is fully briefed on appeal, but the State also now for the first time alleges:
*120 (1) There is no right to attempt to withdraw a plea when a defendant has previously been found guilty after a nolo contendere plea,
(2) Stough was required to and failed to allege he was not guilty of the crimes charged,
(3) withdrawal of the pleas and setting aside the convictions still require the convictions to exist for subsequent sentencing purposes, resulting in no essential difference between the relief granted here and expungement relief, which is available and so precludes any showing of "manifest injustice,"
(4) it was an abuse of discretion to permit withdrawal of the pleas and dismissal of the charges without showing the drug evidence against Stough was tampered with,
(5) a hearing should have been held requiring proof that the specific evidence in Stough's case had been tampered with, and
(6) allowing withdrawal of the plea and dismissing the charge of unlawful use of a communications facility (telephone) was improper because the charge was not connected to drug evidence.
While it might appear proper to refuse to consider these arguments as they involve questions and issues not presented to the trial court, which we do not generally consider for the first time on appeal, see State v. Smith, 268 Kan. 222, 243, 993 P.2d 1213 (1999), the overriding single issue these contentions collectively raise is that the trial court abused its discretion in granting Stough the relief he requested. And, since Stough's motion asked the court "to correct manifest injustice," the question of whether the trial court abused its discretion in granting the requested relief is an issue properly raised on appeal which we must consider.
When the question is raised as to whether judicial discretion was abused, we have said: "Judicial discretion is abused when judicial action is arbitrary, fanciful, or unreasonable, which is another way of saying that discretion is abused only when no reasonable person would take the view adopted by the trial court." State v. Williams, 268 Kan. 1, 8, 988 P.2d 722 (1999).
We do not endorse the summary manner in which the motion was considered and are in fact severely restricted by the limited record in this case. However, Stough correctly argues an appellant *121 has the burden of furnishing a record which affirmatively shows that prejudicial error occurred in the trial court. In the absence of such a record, an appellate court presumes the action of the trial court was proper. State v. Moncla, 262 Kan. 58, 68, 936 P.2d 727 (1997).
The trial judge and the prosecutor had clearly been involved in several earlier cases where the precise questions and issues raised here had been resolved against the State. The trial court took judicial notice of the conduct of Officer Oblander. He was the only substantial witnesses against Stough and had refused to testify against a codefendant of Stough's after claiming his Fifth Amendment rights against self-incrimination. It is questionable that judicial notice of these actions was proper under K.S.A. 60-409, see Jones v. Bordman, 243 Kan. 444, 459, 759 P.2d 953 (1988), but there was no objection by the prosecutor. See K.S.A. 60-404, State v. Deiterman, 271 Kan. 975, 984, 29 P.3d 411 (2001). In fact, the prosecutor's statement that "[w]e stand on previous grounds that we had before in terms of the ability to prove that all evidence was tampered with that we previously appeared in front of you on" appears to be an admission that the evidence had been tampered with as Stough had alleged.
The State unconvincingly argues that when Stough entered his plea, he waived his rights to later withdraw that plea. While K.S.A. 22-3209(2) does say that a "plea of nolo contendere is a formal declaration that the defendant does not contest the charge," this does not override or nullify the rights granted by 22-3210(d) to withdraw that plea "to correct manifest injustice."
We have recently answered the State's contention that Stough's motion must allege that he was not guilty in State v. Vasquez, 272 Kan. 692, 36 P.3d 246 (2001). In a unanimous opinion with Justice Allegrucci speaking for the court we analyzed the precise issue, although the request there was for withdrawal of a plea before sentencing. We said: "It is apparent that this court does not require an allegation that the defendant is not guilty as charged as a prerequisite for withdrawing a plea of guilty or nolo contendere prior to sentencing." 272 Kan. at 696. We hold that such a rule would also apply when the request was made after sentencing.
*122 The effect of the trial court's order as to Stough's criminal history in a subsequent sentencing hearing and whether expungement is available is not a question that has any bearing on our decision in this case and will not be considered.
The State's argument that because Oblander's conduct only affected the drugs seized, it was unreasonable for the trial court to permit withdrawal of a plea and to dismiss with prejudice the charge of unlawful use of a communications facility (telephone) fails for one primary reason. The arrest affidavit shows that all of the telephone calls upon which the charges were based were between Stough and Oblander. Where Oblander had claimed the Fifth Amendment in Stough's codefendant's case, it is not unreasonable for the court to expect the same conduct on Stough's charges.
As to the contention that a hearing should have been held, that is exactly what the proceedings before the trial court purported to be. While it would have been more desirable for the purpose of our review to have the ability to examine the precise testimony with which the parties were apparently familiar, we must deal with the record that we are presented.
The State apparently realized its only chance for success was on its lack of jurisdiction argument. As we have held, that attempt fails. We can only conclude from the record presented that the State conceded sufficient facts existed to find the pleas should be withdrawn and the charges dismissed "to prevent manifest injustice." It was not an abuse of discretion for the trial court to so rule.
Affirmed.
DAVIS, J., not participating.
BRAZIL, S.J., assigned.[1]
NOTES
[1] REPORTER'S NOTE: Judge J. Patrick Brazil was appointed to hear case No. 87,079 vice Justice Davis pursuant to the authority vested in the Supreme Court by K.S.A. 20-2616.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981874/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0549n.06
No. 12-5858
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
UNITED STATES OF AMERICA, ) Jun 04, 2013
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
TELLIS T. WILLIAMS, ) COURT FOR THE MIDDLE
) DISTRICT OF TENNESSEE
Defendant-Appellant. )
) OPINION
BEFORE: COLE and COOK, Circuit Judges; KATZ, District Judge.*
KATZ, District Judge. Defendant Tellis T. Williams pleaded guilty to armed bank robbery
and was sentenced to 168 months of incarceration. Now, on direct appeal, he says that he received
ineffective assistance of counsel that rendered his guilty plea other than knowing and voluntary. In
the alternative, he says that ineffective assistance of counsel tainted the sentencing process and he
should be resentenced. Because these claims are better addressed in a post-conviction motion, we
affirm the conviction and the sentence but order the district court to reopen Mr. Williams’ 28 U.S.C.
§ 2255 case and consider these claims there.
*
The Honorable David A. Katz, United States District Judge for the Northern District of
Ohio, sitting by designation.
No. 12-5858
United States v. Williams
I.
This is a direct appeal from a case that began in 2009 and, at least by initial appearances,
reached resolution just months later. On April 15, 2009, Mr. Williams brandished a handgun and
robbed a U.S. Bank branch in Murfreesboro, Tennessee. Law enforcement apprehended him the
following day and a grand jury indicted him on one count of armed bank robbery. 18 U.S.C. §
2113(a) & (d). The district court appointed an assistant public defender as Mr. Williams’ counsel.
The government incarcerated Mr. Williams at the Robertson County Detention Facility
(RCDF) during most of the time this case pended. While there, Mr. Williams complained to his
counsel and to the district court about the conditions at RCDF, particularly the lack of food and the
insufficient nutritional quality of the food. The district court took his complaints seriously and, after
an initial status hearing, conducted six days of evidentiary hearings regarding the conditions at
RCDF. Mr. Williams’ appointed criminal counsel represented him during those proceedings and Mr.
Williams testified at the hearings.
Four days into the evidentiary hearings on the RCDF conditions (and while Mr. Williams was
still detained at RCDF), Mr. Williams informed his counsel that he wished to plead guilty to armed
bank robbery as charged. Counsel entered a plea petition and the district court held a hearing the
following day at which it accepted the plea and found Mr. Williams guilty. Weeks after entry of the
plea – but before sentencing – the district court issued its findings on the RCDF conditions and
ordered Mr. Williams to be moved to another detention facility because of those conditions. Later,
at sentencing, the court found Mr. Williams to be a career offender, calculated a Sentencing
-2-
No. 12-5858
United States v. Williams
Guidelines range of 188 to 235 months, and sentenced him to 168 months of incarceration. The
district court varied twenty months below the Guidelines range because of Mr. Williams’
contribution as a whistleblower regarding the RCDF conditions.
No notice of appeal was filed, and the time to do so lapsed in late 2009. Mr. Williams then
filed a § 2255 motion claiming ineffective assistance of counsel on several points, including the fact
that no direct appeal was filed. The district court agreed that Mr. Williams should be afforded the
right to a delayed direct appeal, so it vacated its prior judgment and entered an identical judgment
and sentence on July 11, 2012, which opened a new window of time in which Mr. Williams could
appeal. The district court did not address Mr. Williams’ other claims, which are essentially those
before this Court now. This appeal timely followed the reentry of judgment.
II.
Generally, claims of ineffective assistance of counsel are addressed via collateral attack rather
than direct appeal. United States v. Ferguson, 669 F.3d 756, 762 (6th Cir. 2012) (citing Massaro v.
United States, 538 U.S. 500, 504 (2003)). We require this so that the litigation may fully develop
such that we might be able to see the distinction between an attorney’s calculated risk and a true
mistake; to help assure that issues are completely developed before we decide them; to avoid putting
appellate counsel in the position of relying on the trial counsel for assistance while simultaneously
arguing he was deficient (or, worse, to avoid compelling appellate counsel to argue that he, himself,
was ineffective in the trial court); and to allow the district court to first decide the factual and legal
issues underlying the ineffective assistance claim. See Guinan v. United States, 6 F.3d 468, 473 (7th
Cir. 1993) (Easterbrook, J., concurring) abrogated by Massaro, 538 U.S. at 500; see also United
-3-
No. 12-5858
United States v. Williams
States v. Sypher, 684 F.3d 622, 626 (6th Cir. 2012); United States v. Walden, 625 F.3d 961, 967 (6th
Cir. 2010).
This case’s disposition is atypical because an initial § 2255 motion came before this direct
appeal. Over two days in June 2012, the district court conducted evidentiary hearings in the § 2255
case, heard Mr. Williams’ and his public defender’s testimony, and admitted 35 exhibits, including
the transcripts of the six days of evidentiary hearings regarding the RCDF conditions. Williams v.
United States, No. 3:10-cv-1176, Doc. 28 (M.D. Tenn, Jun. 6, 2012) (witness and exhibit list); id.
at Docs. 29 & 30 (hearing transcripts). Based on this record, the district court agreed that Mr.
Williams was entitled to a delayed direct appeal and reentered its judgment and sentence to create
a new appeal window. Id. at Doc. 36 (Order); id. at Doc. 35 (Memorandum); see also Johnson v.
United States, 146 F. App’x 4, 5-6 (6th Cir. 2005) (endorsing this procedure for creating a new
appeal window when a court finds ineffective assistance of counsel led to a missed appeal). The
court did not address Mr. Williams’ other claims, leaving them for the direct appeal:
Here is my current thinking. That the issue about assistance of counsel on the notice
of appeal is the first issue that has to be addressed. If that has merit, then it appears
to me all the other issues are moot because the remedy for ineffective assistance of
counsel regarding notice of appeal would be to allow a delayed appeal, and then all
those other issues could be presented on a delayed appeal.
(Hearing Tr., Cause 3:10-cv-1176, Doc. 30 at 169.) The district court included the record from Mr.
Williams’ § 2255 case in the criminal case now on appeal.
Both Mr. Williams and the government say that the inclusion of the § 2255 record affords
this court a complete record from which to decide these issues. (Appellant Br. at 13; Appellee Br.
at 34-35.) The rule against addressing ineffective assistance claims on direct appeal is prudential,
-4-
No. 12-5858
United States v. Williams
not jurisdictional; when appropriate, we may delve into such analyses. Ferguson, 669 F.3d at 762
(citing United States v. Pierce, 62 F.3d 818, 833 (6th Cir.1995); United States v. Wunder, 919 F.2d
34, 37 (6th Cir. 1990)). Whether to consider ineffective assistance claims on direct appeal depends
on whether the record is sufficiently developed to evaluate and rule on the claims. United States v.
Bradley, 400 F.3d 459, 461-62 (6th Cir. 2005). In rare cases where the record is completely
developed, we have considered ineffective assistance claims, but, in the vast majority of cases, we
defer consideration until the district court has had the opportunity to consider and rule on the factual
allegations and legal theories underpinning the ineffective assistance claim.
Even though both sides agree they presented evidence on every allegation of ineffective
assistance, the record lacks findings of fact and conclusions of law on all but the filing of the late
appeal. The district court declined to address Mr. Williams’ additional § 2255 claims because it
opted to open the time window for a direct appeal and wished to wait for a resolution of that before
considering the other matters in the § 2255 motion. The district court’s deferral of the issues until
after the direct appeal is not without merit; many issues require presentment on direct appeal before
they can be cognizable on collateral review. Bousley v. United States, 523 U.S. 614, 621 (1998).
Furthermore, in considering the § 2255 motion and granting the late appeal, the district court had no
way of knowing whether Mr. Williams would raise other issues that are addressable at this level.
Nevertheless, a variety of questions remain unresolved, and the district court must address
them before we can determine whether Mr. Williams’ counsel’s performance was deficient and
whether that deficient performance prejudiced his defense. See Massaro, 538 U.S. at 505 (“Under
the rule we adopt today, ineffective-assistance claims ordinarily will be litigated in the first instance
-5-
No. 12-5858
United States v. Williams
in the district court, the forum best suited to developing the facts necessary to determining the
adequacy of representation during an entire trial. The court may take testimony from witnesses for
the defendant and the prosecution and from the counsel alleged to have rendered the deficient
performance.”). The judge who heard the testimony and reviewed the evidence is better suited to
decide these issues. See, e.g., United States v. Lopez-Medina, 461 F.3d 724, 737 (6th Cir. 2006);
Porterfield v. Bell, 258 F.3d 484, 487 (6th Cir. 2001) (directing the district court to rule on the
certificate of appealability, “because the district court is already deeply familiar with the claims
raised by petitioner, it is in a far better position from an institutional perspective than this court to
determine which claims should be certified for appeal.”).
III.
Even though the district court must rule on the ineffective assistance claims before we can
consider them, this direct appeal is not the vehicle for returning the matter to the district court. Were
we to remand the criminal case to the district court with instructions to consider these questions, the
matter would still be in the mode of the original case and its direct appeal, and we have just said that
ineffective assistance claims are not best considered in that disposition. On the other hand, were we
to simply deny the claims, Mr. Williams may not be able to raise these same issues again in a second
§ 2255 motion. See 28 U. S.C. § 2255(h). This outcome runs contrary to the interest of being able
to fully raise each issue. Therefore, we AFFIRM Mr. Williams’ conviction and sentence but we
REMAND this matter to the district court with the instruction that the district court reopen Mr.
Williams’ § 2255 case and rule on the issues of ineffective assistance of counsel.
-6-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2981892/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0665n.06
No. 13-5001 FILED
Jul 18, 2013
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE WESTERN
) DISTRICT OF TENNESSEE
DEWAYNE GHOSTON, )
)
Defendant-Appellant. )
BEFORE: KEITH and McKEAGUE, Circuit Judges; WATSON, District Judge.*
PER CURIAM. Dewayne Ghoston appeals his fifteen-year mandatory minimum sentence
under the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e). We affirm.
Ghoston pleaded guilty to possession of a firearm by a felon in violation of 18 U.S.C.
§ 922(g)(1). Prior to sentencing, Ghoston objected to his classification as an armed career criminal,
asserting that his prior conviction for attempted aggravated burglary under Tennessee law does not
constitute a violent felony under the ACCA and that the ACCA’s residual clause is
*
The Honorable Michael H. Watson, United States District Judge for the Southern District
of Ohio, sitting by designation.
No. 13-5001
United States v. Ghoston
unconstitutionally void for vagueness.1 The district court overruled Ghoston’s objections and
imposed the ACCA’s mandatory minimum sentence of fifteen years of imprisonment.
In this timely appeal, Ghoston argues that his attempted aggravated burglary conviction does
not constitute a violent felony under the ACCA. We review de novo the district court’s
determination that a conviction constitutes a violent felony under the ACCA. United States v.
Eubanks, 617 F.3d 364, 366 (6th Cir. 2010). The ACCA provides that a defendant convicted of
possession of a firearm by a felon who has three prior convictions for a violent felony or a serious
drug offense is subject to a mandatory minimum sentence of fifteen years of imprisonment. 18
U.S.C. § 924(e)(1). The ACCA defines “violent felony,” in part, as “any crime punishable by
imprisonment for a term exceeding one year . . . that . . . is burglary, arson, or extortion, involves 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) (emphasis added). To fall within the italicized residual
clause, the crime must be “roughly similar, in kind as well as in degree of risk posed,” to the
enumerated violent felonies. Begay v. United States, 553 U.S. 137, 143 (2008).
In James v. United States, 550 U.S. 192 (2007), the Supreme Court held that attempted
burglary under Florida law falls within the ACCA’s residual clause, stating that “the risk posed by
an attempted burglary . . . may be even greater than that posed by a typical completed burglary,”
given the possibility of a face-to-face confrontation “when the attempt is thwarted by some outside
intervenor—be it a property owner or law enforcement officer.” Id. at 203–04. In reaching this
1
Ghoston did not dispute that his two prior convictions for aggravated burglary, which is the
burglary of a habitation, Tenn. Code Ann. § 39-14-403(a), are violent felonies under the ACCA.
-2-
No. 13-5001
United States v. Ghoston
conclusion, the Supreme Court relied, in part, on this court’s holding that attempted burglary under
Tennessee law falls within the ACCA’s residual clause: “[T]he propensity for a violent
confrontation and the serious potential risk of injury inherent in burglary is not diminished where
the burglar is not successful in completing the crime. The potential risk of injury is especially great
where the burglar succeeds in entry or near-entry despite not fully completing the crime.” Id. at 204
n.3 (quoting United States v. Bureau, 52 F.3d 584, 593 (6th Cir. 1995)). This case is controlled by
James and Bureau.
Ghoston contends that James was wrongly decided because statistical analysis, endorsed by
the Supreme Court in Sykes v. United States, 131 S. Ct. 2267, 2274 (2011), demonstrates that
attempted burglary is not similar in degree of risk to completed burglary and that the intuitive
assumptions underlying the Supreme Court’s decision in James are incorrect. In Sykes, the Supreme
Court did not require the use of statistics to determine whether a crime is similar in degree of risk
to an enumerated violent felony, stating that “statistics are not dispositive.” Sykes, 131 S. Ct. at
2274. Nor did the Supreme Court call into question its prior decision in James. In fact, the Supreme
Court quoted and applied the following test set forth in James: “a crime involves the requisite risk
when ‘the risk posed by [the crime in question] is comparable to that posed by its closest analog
among the enumerated offenses.’” Sykes, 131 S. Ct. at 2273 (quoting James, 550 U.S. at 203).
According to Ghoston, the Supreme Court’s intuitive assumptions regarding the risk posed
by attempted burglary are undermined by the Tennessee burglary statute. Under Tennessee law, a
burglary is complete upon entering a building with intent to commit a felony, theft, or assault. Tenn.
Code Ann. § 39-14-402(a)(1). Ghoston asserts that attempted burglary occurs when the defendant
-3-
No. 13-5001
United States v. Ghoston
fails to actually enter the building, which creates very little potential for a violent confrontation with
the property owner. The Florida statute at issue in James similarly defined burglary as “entering or
remaining in a structure or a conveyance with the intent to commit an offense therein.” James, 550
U.S. at 197 (quoting Fla. Stat. § 810.02(1)). In analyzing the degree of risk posed, the Supreme
Court recognized that attempted burglary did not involve an entry: “Interrupting an intruder at the
doorstep while the would-be burglar is attempting a break-in creates a risk of violent confrontation
comparable to that posed by finding him inside the structure itself.” Id. at 203–04.
Ghoston also contends that the ACCA’s residual clause is unconstitutionally void for
vagueness. We review de novo whether a criminal statute is unconstitutionally vague. United States
v. Hart, 635 F.3d 850, 856 (6th Cir. 2011). We have previously rejected vagueness challenges to
the ACCA’s residual clause, pointing out the Supreme Court’s statements that the statute is
sufficiently definite. See United States v. Perry, 703 F.3d 906, 911 (6th Cir. 2013) (citing James,
550 U.S. at 210 n.6), cert. denied, 133 S. Ct. 1844 (2013); United States v. Taylor, 696 F.3d 628,
633 (6th Cir. 2012) (citing Sykes, 131 S. Ct. at 2277, and James, 550 U.S. at 210 n.6).
For the foregoing reasons, we reject Ghoston’s arguments on appeal and find no error in the
sentencing. We acknowledge that the district court was understandably troubled by the lengthy
prison term it was required to impose under the ACCA. The record also shows that Ghoston’s
counsel and the Assistant United States Attorney worked cooperatively to facilitate a less onerous
outcome. But for Ghoston’s failure to fully cooperate, the efforts might have been more successful.
In the end, even as we acknowledge that the sentence mandated by Congress appears to be harsh,
there is no cognizable legal error. We therefore AFFIRM the judgment of the district court.
-4-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2981940/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0761n.06
No. 10-1198
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
REGINALD WALKER,
FILED
Aug 16, 2013
DEBORAH S. HUNT, Clerk
Petitioner-Appellant,
v. ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR THE
BONITA HOFFNER, Warden, EASTERN DISTRICT OF MICHIGAN
Respondent-Appellee.
/
BEFORE: KEITH, CLAY, and COOK, Circuit Judges.
CLAY, Circuit Judge. On March 1, 2001, Petitioner Reginald Walker was convicted of
first degree murder in violation of Mich. Comp. Laws § 750.316, and possession of a firearm in the
commission of a felony in violation of Mich. Comp. Laws § 750.227b, for the fatal shooting of Larry
Troup. Petitioner filed a petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 on
December 21, 2006, claiming that his counsel had been ineffective because he failed to investigate
and present an insanity defense despite Petitioner’s known, extensive, and well-documented history
of mental illness. On January 14, 2010, the United States District Court for the Eastern District of
Michigan denied his petition. On February 18, 2010, that court granted Petitioner a Certificate of
Appealability pursuant to 28 U.S.C. § 2253(c)(1) on the question of whether the state court’s
decision that Petitioner had not been prejudiced by his attorney’s failure to raise an insanity defense
No. 10-1198
was an unreasonable application of federal law. On September 2, 2011, this Court reversed the
decision of the district court, and granted the writ. Walker v. McQuiggan, 656 F.3d 311 (6th Cir.
2011). The United States Supreme Court granted a writ of certiorari, vacated this Court’s decision,
and remanded the case back to this Court. Howes v. Walker, 132 S. Ct. 2741 (2012) (Mem.). In its
remand order, the Supreme Court directed us to reconsider the case in light of their decision in
Parker v. Matthews, 567 U.S. —, 132 S. Ct. 2148 (2012).
Upon reconsideration, we REVERSE the decision of the district court, and GRANT
Petitioner’s application for a writ of habeas corpus.
BACKGROUND
A. Facts
The facts of this case were laid out in detail in our prior decision. Walker v. McQuiggan, 656
F.3d 311, 312–13 (6th Cir. 2011) (Walker I). The underlying crime was the killing of Larry John
Troup by Petitioner Reginald Walker on the night of April 11, 2000. Id. at 312. Quoting extensively
from the decisions of the Michigan Court of Appeals, we found that:
The prosecution presented testimony that at about midnight, Walter Gaiter and Troup
entered the store to purchase some beer. After paying for the beer at the checkout
counter, Gaiter leaned back into defendant, who was behind them. After Gaiter
apologized for bumping into defendant, defendant told him that he did not like being
touched, which defendant repeated after he paid for his purchases. Pausing, defendant
then pulled an automatic handgun from under this [sic] jacket and fired three or four
shots, killing Troup instantly. Neither Gaiter nor Troup was armed. Defendant then
picked up the clip that had fallen to the floor, put it in his pocket, and walked out the
store.
2
No. 10-1198
Id. (quoting People v. Walker, No. 233494, 2003 WL 133057, at *1 (Mich. Ct. App. Jan. 3, 2003)
(per curiam)).
Petitioner had a long history of mental illness. Despite being only 46 years old at the time
of trial, he received Social Security Disability benefits as a result of mental health issues. Id. at 315.
His medical history indicated that Petitioner had been hospitalized many times, starting in 1983, for
various “schizophrenic” illnesses. While he had been prescribed anti-psychotic medications since
1983, he had not always taken them. Treatment at several different hospitals had resulted in
diagnoses of “paranoid schizophrenia, generalized schizophrenia, schizoaffective disorder,
depression, bi-polar disorder, and alcohol dependence.” Id. At multiple times, Petitioner reported
to doctors that he had suicidal or homicidal feelings, and that he had been hearing voices. Within
the six months preceding the shooting, Petitioner’s mother, who was an appointed guardian to him,
had him involuntarily committed to a treatment facility because of acute psychotic symptoms. Id.
at 315.
All of the evidence at trial identified Petitioner as the culprit. Both the store clerk and Gaiter
testified that Petitioner was the shooter, and that there had been a brief, non-violent encounter
between Gaiter and Petitioner, when Gaiter had accidently bumped into Petitioner, and that after a
brief exchange of words, Petitioner shot Troup. Both also testified that Petitioner then picked up the
ammunition clip that had fallen out of the gun, and walked out of the store. The police arrested
Petitioner shortly afterwards in a nearby semi-abandoned house. Petitioner’s hand was bleeding,
because he had punched a hole in the drywall in the house, and hidden the gun inside. No evidence
suggested that Petitioner had been attacked by Troup or Gaiter. Id. at 313.
3
No. 10-1198
Petitioner admitted to the killing, but “presented a mixed defense of accident, self-defense
and intoxication.” Id. at 313. Despite having the option to request that an independent clinical
psychiatrist of his choice evaluate Petitioner, Defense counsel chose to rely on the examination of
Dr. Dexter Lee Fields, the Wayne County Circuit Court Psychiatrist, who had found that Petitioner
was criminally responsible at the time of the shooting. Id. at 314. Fields had examined Petitioner
before, and on at least one occasion had concluded that Petitioner was mentally ill. Id. at 314 n.3
Defense counsel did not use an insanity defense;1 instead, he chose to present a “mixed
accident/self-defense/intoxication theory.” Id. at 314. Walker was convicted of first-degree murder,
Mich. Comp. Laws § 750.316, and possession of a firearm in the commission of a felony, Mich.
Comp. Laws § 750.227b, and was sentenced to life in prison without the possibility of parole, and
an additional two years’ imprisonment on the firearm charge. Walker I, 656 F.3d at 313.
On direct review of his conviction, Walker alleged that his attorney had provided ineffective
assistance of counsel because he had failed to investigate or raise an insanity defense. Id. at 315.
The Michigan Court of Appeals found that counsel’s failure to investigate the possibility of an
insanity defense constituted deficient performance, and remanded the case to the trial court for a
Ginther hearing2 as to whether Petitioner had been prejudiced by counsel’s deficiencies. People v.
Walker, No. 233494, 2003 WL 133057, at *3 (Mich. Ct. App. Jan. 3, 2003) (per curiam). After the
Ginther hearing, the trial court found no prejudice, and the Michigan Court of Appeals affirmed that
1
Petitioner’s attorney at that point was William Winters. He declined to pursue an insanity
defense, although his predecessor as defense counsel had filed a notice of intent to do so. Id.
2
Named for People v. Ginther, 390 Mich. 436 (1973), a Ginther hearing is a type of
evidentiary hearing under Michigan law for claims of ineffective assistance of counsel.
4
No. 10-1198
decision. People v. Walker, No. 249406, 2005 WL 657727, at *2 (Mich. Ct. App. Mar. 22, 2005)
(per curiam). The Michigan Supreme Court declined to hear the case, issuing the following order:
“Disposition: On order of the Court, the application for leave to appeal the March 22, 2005 judgment
of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the
question presented should be reviewed by this Court.” 474 Mich. 873 (2005) (table). Under the
Antiterrorism and Effective Death Penalty Act of 1996 (“AEDPA”) this Court reviews the last
reasoned state court decision. See Cullen v. Pinholster, 563 U.S. —, 131 S. Ct. 1388, 1402 (2011)
(“Section 2254(d) applies even where there has been a summary denial.”). In this case, the Michigan
Court of Appeals’ decision in 2005, People v. Walker, No. 249406, 2005 WL 657727, (Mich. Ct.
App. Mar. 22, 2005) is the last reasoned state court decision.
B. Procedural History in the Federal Courts
In December 2006, Petitioner asked the United States District Court for the Eastern District
of Michigan to grant a writ of habeas corpus, based on the same claim of ineffective assistance of
counsel that he alleged in the state courts. In January 2010, the district court accepted the report and
recommendation of the magistrate judge,1 which found that the Michigan court had correctly
identified the constitutional rule governing claims for ineffective assistance of counsel, and had not
unreasonably applied the law to the facts of the case and denied the petition, but granted a certificate
of appealability on the question of whether the state court’s decision that Petitioner had not been
prejudiced by his attorney’s failure to raise an insanity defense was an unreasonable application of
1
The magistrate recommended that the district court deny the petition, because the state
court’s finding that there was no prejudice to Petitioner was not unreasonable. (R. 14, Report &
Recommendation, Nov. 13, 2009, at 8.)
5
No. 10-1198
federal law. Walker appealed to this Court, and we granted the writ. See Walker I, 656 F.3d at 322.
The Supreme Court granted certiorari, vacated our decision, and remanded “for further consideration
in light of Parker v. Matthews, 567 U.S. —, 132 S. Ct. 2148 (2012).” Howes v. Walker, 132 S. Ct.
2741 (2012).
DISCUSSION
A. Standard of Review
Where a district court has denied a habeas petition, and issued a certificate of appealability,
“we review the district court’s legal conclusions de novo and its factual findings for clear error.”
Hanna v. Ishee, 694 F.3d 596, 605 (6th Cir. 2012) (citing Smith v. Mitchell, 567 F.3d 246, 255 (6th
Cir. 2009)). The district court’s findings of fact are clearly erroneous when “we are left with the
definite and firm conviction that a mistake has been committed.” United States v. Canipe, 569 F.3d
597, 600 (6th Cir. 2009) (citing United States v. Ellis, 497 F.3d 606, 611 (6th Cir. 2007)).
Under the AEDPA, a federal court may not grant a writ of habeas corpus with respect to any
claim adjudicated on the merits in state court unless the state adjudication:
(1) resulted in a decision that was contrary to, or involved an unreasonable
application of, clearly established federal law, as determined by the Supreme Court
of the United States; or
(2) resulted in a decision that was based on an unreasonable determination of the
facts in light of the evidence presented in the State court proceeding.
28 U.S.C. § 2254(d). A federal court may not issue the writ “simply because it concludes in its
independent judgment that the relevant state-court decision applied clearly established federal law
erroneously or incorrectly. Rather, that application must also be unreasonable.” Williams v. Taylor,
529 U.S. 362, 411 (2000). “[C]learly established federal law, as determined by the Supreme Court
6
No. 10-1198
of the United States” refers to the holdings, rather than dicta, of the decisions of the Supreme Court.
Howes v. Fields, — U.S. —, 132 S. Ct 1181, 1187 (2012) (quoting Williams, 529 U.S. at 362).
A decision that is “contrary to” clearly established federal law where “the state court arrives
at a conclusion opposite to that reached by this Court on a question of law . . . [or] confronts facts
that are materially indistinguishable from a relevant Supreme Court precedent and arrives at a [the
opposite] result.” Williams, 529 U.S. at 405. Furthermore, an unreasonable application must be
distinguished from an incorrect application. Harrington v. Richter, 562 U.S. —, 131 S. Ct. 770, 785
(2011) (quoting Williams, 529 U.S. at 410). A state court decision which is merely incorrect, rather
than unreasonable, is still entitled to deference by a federal court in a habeas proceeding. Id. As a
result, the more general the rule, the greater the leeway accorded to a state court’s decision under
federal habeas review. Id. at 786.
C. The Decision of the Michigan Court of Appeals
It is clearly established law that the question of ineffective assistance of counsel is analyzed
pursuant to the two-part test established in Strickland v. Washington, 466 U.S. 668 (1984).
Petitioner must show that counsel’s performance was deficient, and that he was prejudiced because
of this ineffective assistance of counsel. Id. at 687–92; Roe v. Flores-Ortega, 528 U.S. 470, 476–77
(2000) (“A defendant claiming ineffective assistance of counsel must show (1) that counsel's
representation ‘fell below an objective standard of reasonableness,’ and (2) that counsel's deficient
performance prejudiced the defendant.”) (citing Strickland) (internal citations omitted); Kimmelman
v. Morrison, 477 U.S. 365, 383 (1986).
7
No. 10-1198
The Michigan state court’s decision in 2005 both violated and unreasonably applied clearly
established federal law,2 and accordingly, the writ should issue. In Walker I, we held that the
Michigan Court of Appeals both unreasonably applied clearly established federal law and
unreasonably determined facts in light of the evidence. We found that the Michigan court
improperly applied the prejudice prong of Strickland, 466 U.S. at 687. In doing so, however, we
incorrectly applied our own standard, which states that a defendant suffers prejudice when he is
deprived of a “substantial defense” by the deficient performance of his counsel. Walker I, 656 F.3d
at 321. The Supreme Court held in Parker that a circuit court cannot use its own precedents, but
must only use those of the Supreme Court, “in assessing the reasonableness of the [state court’s]
decision.” Parker, 132 S. Ct. at 2155. Upon reconsideration, under the standard as given by the
Supreme Court, we nevertheless find that the Michigan court’s decision does not survive habeas
review.
Strickland has long held that counsel’s performance is deficient where it falls below an
objectively unreasonable standard. Strickland, 466 U.S. at 686–87; Richter, 131 S. Ct. at 787. “A
court considering a claim of ineffective assistance must apply a ‘strong presumption’ that counsel’s
representation was within the ‘wide range’ of reasonable professional assistance.” Richter, 131 S.
Ct. at 787 (quoting Strickland, 466 U.S. at 689). Petitioner bears the burden of overcoming the
“presumption that the challenged conduct might be considered sound trial strategy.” Hanna, 694
F.3d at 612. That is to say, Petitioner must show that counsel made errors “so serious that counsel
2
We first find that the Michigan court failed to apply the correct rule, but we also find that
even were we to construe its decision as stating the rule correctly, the result would be an
unreasonable application of federal law.
8
No. 10-1198
was not functioning as the counsel guaranteed the defendant by the Sixth Amendment.” Richter, 131
S. Ct. at 787 (internal quotation marks omitted).
“To establish Strickland prejudice a defendant must ‘show that there is a reasonable
probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been
different.’” Lafler v. Cooper, 132 S. Ct. 1376, at 1384 (2012) (quoting Strickland, 466 U.S. at 694).
“‘A reasonable probability is a probability sufficient to undermine confidence in the outcome.’”
Richter, 131 S. Ct. at 787 (quoting Strickland, 466 U.S. at 694). “Counsel’s errors must be so
serious as to deprive the defendant of a fair trial, a trial whose result is reliable.” Id. at 787–88
(internal quotation marks omitted).
In its decision in 2003, the Michigan Court of Appeals found that counsel’s failure to
investigate the possibility of an insanity defense consituted deficient performance, but remanded the
case for further findings with respect to the question of prejudice. Walker, 2003 WL 133057, at *3.
After the lower court conducted a Ginther hearing, where it determined that Petitioner had not
suffered prejudice, the Michigan Court of Appeals issued the decision we review today. In that
decision, the court determined that counsel’s performance was inadequate,3 Walker, 2005 WL
657727, at *1 n.6, but on the question of prejudice, it found that Petitioner had not shown that “the
defense was meritorious and the failure to present it deprived [him] of a reasonably likely chance of
acquittal.” Id. at *1.
3
The Michigan Court of Appeals based at least part of this decision on the law-of-the-case
doctrine, finding that it was bound by the earlier panel’s determination of deficient performance.
9
No. 10-1198
This was an incorrect statement of the constitutional rule, and a court’s failure to analyze a
claim of ineffective assistance under the correct standard, under appropriate circumstances, can give
rise to a grant of habeas corpus. Williams, 529 U.S. at 397. The Supreme Court has stated that
deficient performance is prejudicial when: “there is a reasonable probability that, but for counsel’s
unprofessional errors, the result of the proceeding would have been different. A reasonable
probability is a probability sufficient to undermine confidence in the outcome.” Strickland, 466
U.S. at 694. Thus, a reasonable probability of acquittal is not a requirement to be shown by a
defendant seeking to demonstrate prejudice resulting from his counsel’s deficient performance;
rather, a defendant is required to demonstrate a reasonable probability of a different outcome—a
somewhat lower burden for a defendant. And even if the difference between a reasonable probability
and “reasonably likely” is not, by itself, enough for us to characterize the Michigan court’s decision
as so unreasonable as to give rise to a grant of habeas, Williams, 529 U.S. at 411, the Michigan court
also erred in stating that this reasonable probability was related to the chance of an acquittal, rather
than only related to undermining confidence in the result.4 There were other possible outcomes,
including a hung jury, or guilty by reason of mental insanity, that would have been better outcomes
4
Furthermore, the state court decision did not otherwise recite the Strickland standard, so we
cannot conclude that this statement of the rule was some form of permissible shorthand. See
Holland v. Jackson, 542 U.S. 649, 654–55 (2004). The court referenced the Strickland standard in
two other parts of the decision. In footnote 6, the court describes the prejudice prong as requiring
a defendant to show that his attorney’s representation “was so prejudicial to him that he was denied
a fair trial.” Walker, 2005 WL 6577727, at *1 n.6. The court also stated that “[it] conclude[s] that
there was not a reasonable probability that defendant had a likely chance of acquittal.” Id. at *2.
Neither of these constructions can be fairly described as effective shorthand for the actual Strickland
standard. See Woodford v. Visciotti, 537 U.S. 19, 23–24 (2002).
10
No. 10-1198
for Petitioner. The Michigan court stated outright that “defendant failed to show that he had a
meritorious insanity defense, and thus, failed to show that counsel was ineffective for failing to
present such a defense.” Walker, 2005 WL 657727, at *1. Nevertheless, in any event, there is no
way that Petitioner could demonstrate that he was likely to prevail with a defense that he was
prevented from presenting because of his lawyer’s deficient performance.
The Supreme Court has never held that prejudice under Strickland requires a court to
examine whether acquittal was likely; the standard has always been concerned with the probability
of a different result based on the fairness of the proceeding. See Woodford, 537 U.S. at 22–24.
(“Undermin[ing] confidence in the outcome is exactly Strickland’s description of what is meant by
the reasonable probability standard. A reasonable probability is a probability sufficient to undermine
confidence in the outcome.”) (quoting Strickland, 466 U.S. at 694) (internal quotation marks
omitted, alteration in original); see also Lockhart v. Fretwell, 506 U.S. 364, 372 (1993). Defendant
was not required to show that but for the failure to present the insanity defense, he would have been
acquitted, but only that because he was unable to present such a defense, his trial was unfair such that
we can no longer be confident in the verdict.
Moreover, even were we to consider the Michigan Court of Appeals’ statement of the
Strickland prejudice standard as reasonably correct, the court also improperly applied the standard.
First, virtually all of its reasoning focused on reasons why defense counsel did not pursue the
insanity defense as a strategy. Walker, 2005 WL 657727, at *1. But that is immaterial to the
question of prejudice. It is only relevant insofar as it might show that defense counsel’s performance
was not deficient. As the court acknowledged, there had already been a finding of deficient
11
No. 10-1198
performance by the Michigan Court of Appeals in its 2003 decision, and under the law-of-the-case
doctrine, the court had no basis upon which to disturb that finding. Id. Having found deficient
performance, the court was required to analyze prejudice, which it failed to do in anything but the
most conclusory terms, and its failure to do so was error. See, e.g., Sears v. Upton, 561 U.S. —, 130
S. Ct. 3259, 3264–65 (2010).
No “fairminded jurist,” Harrington, 131 S. Ct. at 786 (quoting Yarborough v. Alvarado, 541
U.S. 652, 664 (2004) (internal quotation marks omitted)), could be confident in the verdict given by
the jury here. The jury never heard any evidence about Petitioner’s long and well-documented
history of severe mental illness, which included incidents of psychosis, hallucinations, and
schizophrenia, over a period of approximately thirty years preceding the trial, starting when
Petitioner was sixteen years old. Nor did the jury hear any evidence of his course of treatment,
which included multiple hospitalizations as well as out-patient care from various facilities, or
regarding his medication history, including his irregular usage of prescribed anti-psychotic drugs.
Petitioner’s mental health was seriously impaired enough for him to receive Social Security disability
benefits, and he was under the guardianship of his mother due to his psychiatric disability. All of
this evidence was presented to the trial court at the Ginther hearing, but not to the jury, and to find
that there was no reasonable probability of a different outcome that would have been favorable to
Petitioner, such as guilty but mentally ill, had this evidence been presented, was an unreasonable
application of clearly established federal law. See Kyles v. Whitley, 514 U.S. 419, 434 (1995); cf.
Porter v. McCollum, 558 U.S. 30, 41 (2009) (per curiam) (granting habeas relief on Strickland
grounds where defense counsel failed to present any mitigation evidence at a capital sentencing).
12
No. 10-1198
In sum, the Michigan Court of Appeals’ decision in 2005 failed to apply the correct rule.
Having found, in its earlier decision, that defense counsel’s performance was deficient, the court was
required to examine whether there would have been a reasonable probability of a different outcome
had defense counsel presented an insanity defense. Furthermore, even if we construed the court’s
reasoning as stating the correct rule, the court failed to properly apply the rule, because it focused
its inquiry on improper factors. Finally, it was unreasonable for the court to find that there was no
reasonable chance of a different outcome given Petitioner’s extensive history of mental illness that
the jury was never confronted with. Accordingly, we reverse the district court’s denial of the writ.
However, in light of the Supreme Court’s instructions to reconsider our prior decision in light of
Parker v. Matthews, 567 U.S. —, 132 S. Ct. 2148 (2012) (per curiam), we will specifically address
the application of that decision to the instant case.
D. The Supreme Court’s Decision in Parker v. Matthews
In Parker v. Matthews, the Supreme Court reversed a decision of this Court, Matthews v.
Parker, 651 F.3d 489 (6th Cir. 2011), which concerned a capital murder conviction in Kentucky.
In that case, this Court granted a writ of habeas corpus to Petitioner David Matthews with respect
to two of his claims. First, we found that the Kentucky court had improperly shifted the burden of
proof onto Matthews to show extreme emotional disturbance (“EED”), in violation of the familiar
rule of In re Winship, 397 U.S. 358 (1970). Matthews, 651 F.3d at 504. We further found that it was
13
No. 10-1198
unreasonable for the Kentucky courts not to find that prosecutorial misconduct had rendered the
proceeding unfair.5 Id. at 507.
While the facts of that case have been recounted by courts many times before, some bear
repeating here. Petitioner David Matthews drank in a bar, where he also took Valium and
Dexedrine. Matthews,651 F.3d at 494. While at the bar, he borrowed $50.00 from a his companion,
a woman he had been seeing, having told her that he wanted to use the money to buy a gun. Id. He
then broke into his wife’s home and killed his mother-in-law. Id. After killing his mother-in-law,
he had sex with his wife, and stayed with her for several hours, until about 6:00 a.m., when he shot
and killed her. Id. He then went back to his mother’s house, hid the gun in the yard of the house,
asked his mother to wash his clothes, took more Valium, and went to sleep. Id. Later that day, he
was taken into custody, and was eventually indicted for the two murders and burglary. Id.
Under the Kentucky murder statute as it existed at the time of the killings, the absence of
EED was an element of the crime.6 See id. at 499. However, based on the Kentucky Supreme
5
The prosecutor made several inappropriate remarks during closing arguments that
impermissibly denigrated petitioner’s claim of EED.
6
The Kentucky statute stated that a person commits murder when:
with the intent to cause the death of another person, he causes the death of such
person or of a third person; except that in any prosecution a person shall not be guilty
under this subsection if he acted under the influence of extreme emotional
disturbance, the reasonableness of which is to be determined from the viewpoint of
a person in the defendant's situation under the circumstances as the defendant
believed them to be.
Ky. Rev. Stat. § 507.020(1)(a) (quoted in Matthews, 651 F.3d at 499).
14
No. 10-1198
Court’s decision in Gall v. Commonwealth, 607 S.W.2d 97, 108–09 (Ky. 1980) (“Gall I”), the
government bore the burden of proof on the absence of EED, but a jury did not need to find the
absence of EED beyond a reasonable doubt unless the defendant had met an initial burden of
production on the issue. Sometime after Matthews committed the murders, the Kentucky Supreme
Court explicitly placed the burden of proof with respect to EED on defendants.7 Matthews, 651 F.3d
at 500. In Matthews’ case, the later rule was in place by the time that the Kentucky Supreme Court
decided his direct appeal, but Gall I had been good law when Matthews committed his crimes.
Therefore, under the familiar rule of Bouie v. City of Columbia, 378 U.S. 347, 354–54 (1964), the
Kentucky courts were required to use the Gall I rule in deciding Matthews’ case. Matthews, 651
F.3d at 500. However, the Kentucky Supreme Court, in examining Matthew’s argument that the
state had failed to carry its burden of proof with respect to EED, applied the later rule.
This Court found that this violated clearly established federal law. Id. In particular, we
found that under In re Winship, 397 U.S. 358, 364 (1970), the state must prove every element of a
crime beyond a reasonable doubt, and that once Matthews had introduced sufficient evidence of EED
to trigger its absence as an element of the crime, the prosecution had to prove the absence of EED
beyond a reasonable doubt. Because the prosecution had introduced no independent evidence to
contradict Matthews’ evidence of EED, and had not undermined Matthews’ evidence, no rational
trier of fact could have found that the state had proven the absence of EED beyond a reasonable
7
The Kentucky Supreme Court, in Wellman v. Commonwealth, 694 S.W.2d 696 (Ky.1985),
stated that “[t]o the extent that . . . cases declare absence of extreme emotional distress to be an
element of the crime of murder, they are expressly overruled.” Id. at 697.
15
No. 10-1198
doubt. Matthews, 651 F.3d at 503–04. This Court further found that the Kentucky Supreme Court
had unreasonably applied federal law by failing to grant Matthews’ appeal on the basis of
prosecutorial misconduct. During closing arguments the prosecutor made several remarks
denigrating Matthews’ use of an EED defense. In evaluating that claim, we applied the test for
prosecutorial misconduct used in Broom v. Mitchell, 441 F.3d 392 (6th Cir. 2006).
The United States Supreme Court reversed our decision, finding that the Kentucky courts had
not violated clearly established law in allocating the burden of proof on the EED element because
the jury had been properly instructed, Parker, 132 S. Ct. at 2151–52; and because habeas challenges
to the sufficiency of evidence must be doubly deferential, a court must defer to the findings of the
jury, which will not be disturbed unless no rational trier of fact could have reached the result. Id.
at 2152 (quoting Jackson v. Virginia, 443 U.S. 307, 319 (1979)). The Supreme Court found that
because the jury had been properly instructed on EED, and the proof offered at trial could support
a finding that the state had proven the element, the Kentucky Court’s invocation of the improper
standard was immaterial. Id. at 2151–52. Discussing our grant of the writ based on prosecutorial
misconduct, the Supreme Court found that our decision was flawed because the Kentucky court’s
decision “was [not] so lacking in justification that there was an error well understood and
comprehended in existing law beyond any possibility for fairminded disagreement.” Id. at 2155
(quoting Harrington, 131 S. Ct. at 786–87 (2011) (internal quotation marks omitted)).
In particular, the Supreme Court criticized this Court for reliance on our own circuit court
precedents as to what constitutes clearly established law. Parker, 132 S. Ct. at 2155. In
reconsidering our decision in the instant case, we recognize that we applied the “substantial defense”
16
No. 10-1198
standard used in this Circuit, Walker I, 656 F.3d at 321, and this was inappropriate in light of Parker,
132 S. Ct. at 2155. However, recognizing that the Supreme Court has rejected the application of the
Sixth Circuit substantial defense standard within the context of habeas review of state court
decisions, upon further consideration we find that the traditional Supreme Court standard as
articulated in Strickland itself justifies granting the writ in the case before us.
Unlike in Parker, where the jury had considered the claim of EED, here the claim of insanity
was never presented to the jury. Accordingly, rather than the twice-deferential standard accorded
to jury determinations, we only defer to the reasonable conclusions of the state court. See Parker,
132 S. Ct. at 2152–53. And these determinations were patently unreasonable. If anything, the
reasoning of Parker strengthens our belief that the Michigan court’s decision was unreasonable,
because the state appellate court usurped the fact-finding province of the jury, which was never
permitted to consider Petitioner’s claim of legal insanity. See id. at 2152. While we are mindful of
our obligation to uphold all reasonable jury determinations of what conclusions should be drawn
from the evidence presented at trial, see, e.g., Cavazos v. Smith, 565 U.S. —, 132 S. Ct. 2, 3–4
(2011) (per curiam), at Petitioner’s trial, no evidence was presented. It is precisely this inability to
have a jury consider the defense, because of the ineffective assistance of his counsel, and the
prejudice resulting therefrom, that entitles Petitioner to the writ.
In Parker, the Kentucky courts had a full record with which to evaluate the sufficiency of the
proof of EED in the context of a jury verdict. But there is no such record in the instant case for the
Michigan Court of Appeals to have evaluated. The only findings, anywhere in the record, with
respect to Petitioner’s mental state, were at the Ginther hearing. And those findings of fact appear
17
No. 10-1198
to support a conclusion that Petitioner suffered Strickland prejudice when his attorney failed to
present an insanity defense. In Parker, there was evidence of rational behavior and premeditation
that could have precluded a finding of EED, and the Supreme Court determined that it was not
unreasonable for the Kentucky appellate court to find that a properly instructed jury’s finding meant
that the state had met its burden. In the instant case, the Michigan Court of Appeals selectively used
facts, such as Petitioner’s attempt to hide the gun used in the killing, that had never been examined
in the context of Petitioner’s long history of mental illness. Given the Michigan Court of Appeals’
finding of deficient performance, and given the Supreme Court’s statement of the reasonable
probability standard, this was an unreasonable conclusion to draw.
Accordingly, upon reconsideration, we find that the Supreme Court’s decision in Parker v.
Matthews does not alter the result in our prior decision in this case. While we are mindful of the
Supreme Court’s admonition to consult only precedent from the Supreme Court as the basis for
clearly established law, Petitioner’s claim is based on his right to effective counsel as established in
Strickland, and we have no doubt that this constitutes clearly established law as determined by the
Supreme Court. We further find that because the properly instructed jury in the Parker case was
presented with the evidence of EED, there was a reasonable factual basis for the state court’s
decision in Parker that is entirely absent in the instant case. In light of that key distinction, the
primary application of the Parker decision must be to limit this Court’s analysis to clearly
established law as determined by the Supreme Court. Having analyzed the case on those terms, we
find that the writ should issue.
18
No. 10-1198
CONCLUSION
The district court erred in failing to grant Petitioner a writ of habeas corpus based on the
ineffective assistance of counsel. Therefore, we REVERSE the decision of the district court,
GRANT Walker’s petition for a writ of habeas corpus, and order that Walker be released from
custody unless the State of Michigan commences a new trial within 180 days of the date of this
order.
19
No. 10-1198
COOK, Circuit Judge, dissenting. Though addressing the problem highlighted in Parker
v. Matthews, 132 S. Ct. 2148 (2012), the court’s revised opinion persists with many aspects
questioned by my prior dissent. I therefore stand by that earlier dissent, adding the following
observations about the new opinion.
The majority retreats from its earlier criticism of the state court’s interpretation of
Michigan’s legal insanity statute. Cf. Walker I, 656 F.3d at 320–21 (concluding that “[t]he state
appeals court’s determination, based on its own assessment that the ‘evidence that defendant had the
consciousness of guilt’ outweighed all evidence regarding Walker’s mental illness, is a thinly veiled
and unsupportable conclusion that it simply did not believe that Walker was legally insane”). It
likewise eschews its sua sponte, independent rationale for habeas relief under § 2254(d)(2). Id. at
319 (finding that the Michigan Court of Appeals unreasonably determined facts in light of the
evidence ). In its place, however, the court now claims that the state court failed to apply the correct
Strickland rule, denying in a footnote that the state court even recited the correct standard. See
supra n.4.
This reasoning departs from the court’s finding in Walker I that the state court had “properly
stat[ed] the Strickland standard for prejudice,” 656 F.3d at 320, and, more importantly, overlooks
the fact that the state court did. Compare People v. Walker, 2005 WL 657727, at *1 n.6 (citing state-
court authority in its discussion of Strickland, and defining prejudice as “a reasonable probability
that, but for counsel’s errors, the result of the proceeding would have been different”), with
Strickland, 466 U.S. at 694 (“The defendant must show that there is a reasonable probability that,
20
No. 10-1198
but for counsel’s unprofessional errors, the result of the proceeding would have been different.”).
In this battle of the footnotes, the state court has the upper hand.
The above portion of the state court’s opinion correctly stated the Strickland standard, and
its conclusion also utilized Strickland’s “reasonable probability” language. People v. Walker, 2005
WL 657727, at *2 (finding that “there is not a reasonable probability that defendant had a likely
chance of acquittal”). Given this context, the fact that the state court twice referred to a “likely
chance of acquittal” in its application of the rule—without corresponding language excluding other
outcomes—does not reflect an attempt to raise Strickland’s prejudice bar. Cf. Cullen v. Pinholster,
131 S. Ct. 1388, 1404 (2011) (clarifying that a “reasonable probability . . . sufficient to undermine
confidence in the outcome,” under Strickland, “requires a ‘substantial,’ not just ‘conceivable,’
likelihood of a different result” (citation omitted)); Knowles v. Mirzayance, 556 U.S. 111, 127–28
(2009) (reversing habeas relief and rejecting Strickland claim where petitioner failed to show a
“‘reasonable probability’ that he would have prevailed on his insanity defense had he pursued it”
(emphasis added)).
Nor does the state court’s characterization of Strickland prejudice as ineffective assistance
that “was so prejudicial to [the defendant] that he was denied a fair trial,” People v. Walker, 2005
WL 657727, at *1 n.6; it closely tracks Strickland’s description of the concept, see Strickland, 466
U.S. at 687 (observing that prejudice “requires showing that counsel’s errors were so serious as to
deprive the defendant of a fair trial, a trial whose result is reliable”). As the Supreme Court has
reminded us, AEDPA requires that we give state-court decisions “the benefit of the doubt” and
“presum[e] that state courts know and follow the law” unless shown otherwise. Holland v. Jackson,
21
No. 10-1198
542 U.S. 649, 654–55 (2004) (citations omitted). Today’s majority does neither. See id. (reversing
this court’s grant of habeas relief and rejecting Strickland claim, where the state court properly
recited the Strickland prejudice standard, and stray references to a preponderance-of-the-evidence
standard did not evince a departure from that standard).
Compounding the error, the majority dismisses the state court’s prejudice analysis as
“conclusory,” and seems to fault the state court for expressing doubts about its previous ineffective-
assistance finding. See People v. Walker, 2005 WL 657727, at *1 (concluding that “defendant failed
to show that he had a meritorious insanity defense, and thus, failed to show that counsel was
ineffective for failing to present such a defense”). As explained in the Walker I dissent, the state
court weighed petitioner’s new mitigating evidence against Dr. Fields’s contrary reports and
defendant’s multiple attempts to conceal the murder, ultimately agreeing with defense counsel that
petitioner’s insanity defense would be unavailing. That conclusion is not objectively unreasonable;
fairminded jurists could (and did) disagree on this point. In light of this analysis, I fail to see how
the state court’s reservations on the ineffectiveness issue elevates this case to an “extreme
malfunction[] in the state criminal justice system[]” warranting relief under AEDPA. Harrington
v. Richter, 131 S. Ct. 770, 786 (2011) (citation omitted).
I respectfully dissent.
22
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/4097358/
|
Swift Funding, LLC v Isacc (2016 NY Slip Op 07406)
Swift Funding, LLC v Isacc
2016 NY Slip Op 07406
Decided on November 10, 2016
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on November 10, 2016
Tom, J.P., Sweeny, Richter, Manzanet-Daniels, Webber, JJ.
2156 155770/12
[*1]Swift Funding, LLC, Plaintiff-Respondent,
vYousef Isacc also known as Yousef Isaac, et al., Defendants, Peter Sim, also known as Sang J. Sim, etc., Defendant-Appellant. [And a Third-Party Action]
Sim & Record, LLP, Bayside (Sang J. Sim of counsel), for appellant.
Law Office of Raul J. Sloezen, Yonkers (Raul J. Sloezen of counsel), for respondent.
Order, Supreme Court, New York County (Cynthia S. Kern, J.), entered on or about June 11, 2015, which, insofar as appealed from as limited by the briefs, denied the motion of defendant Sim for summary judgment dismissing the complaint as against him, unanimously affirmed, without costs.
The record presents triable issues of fact regarding whether Sim had notice of the existence of assignments of a portion of litigation proceeds by a client of defendant law firm, Sim & Park, LLP, in which Sim was a partner, to plaintiff. One who interferes with another's possessory rights in property by disposing of it, as plaintiff alleges here, may be liable for conversion, and thus, Sim is not entitled to summary judgment dismissing the conversion claim as against him (see Glass v Weiner , 104 AD2d 967, 968-969 [2d Dept 1984]). Moreover, any determination by the trier of fact that Sim had knowledge of the assignment but disbursed the money anyway without making payment to plaintiff may raise an inference that he aided and abetted the client's alleged conversion and tortiously interfered with plaintiff's right to repayment under the funding agreement, or both. Accordingly, Sim was not entitled to summary judgment dismissing the aiding and abetting conversion and tortious interference with contract claims against him. Because he was not entitled to summary judgment dismissing the tort claims against him, Partnership Law § 26(b) does not shield him from liability (see Partnership Law § 26[c][i]).
Furthermore, where attorneys are on notice of an assignment of their client's recovery of litigation proceeds and they disburse such proceeds in disregard of the assignment, they may be held liable to the assignees (see Leon v Martinez , 193 AD2d 788 [2d Dept 1993], affd 84 NY2d 83, 88-89 [1994]). While plaintiff did not plead such a cause of action, any defect in the pleading would not be the basis for summary judgment against plaintiff where, as here, plaintiff adduced evidentiary facts in
support of such an unpleaded cause of action (see Alvord & Swift v Muller Constr. Co. , 46 NY2d 276, 280 [1978]; see also Rubenstein v Rosenthal , 140 AD2d 156, 158 [1st Dept 1988]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: NOVEMBER 10, 2016
CLERK
|
01-03-2023
|
11-10-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/2982812/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0230n.06
No. 14-1424
FILED
Mar 26, 2015
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE EASTERN DISTRICT OF
JOHN GESING, ) MICHIGAN
)
Defendant-Appellant. )
BEFORE: GUY, MOORE, and McKEAGUE, Circuit Judges.
PER CURIAM. John Gesing, a federal prisoner, appeals through counsel the 24-month
sentence of imprisonment imposed upon the revocation of his period of supervised release.
In 2011, Gesing entered a guilty plea to a charge of interstate transportation of stolen
property. He was sentenced to 36 months of probation. After only two months, his probation
was revoked and he was sentenced to seven months of imprisonment and two years of supervised
release. After Gesing served his term of imprisonment and commenced his supervised release,
the terms of his release were amended to call for placement in a community corrections center
for the duration. Gesing again violated the terms of his supervised release by, among other
things, using controlled substances, associating with a known criminal, and failing to pay
restitution.
A hearing was held at which Gesing admitted these violations. The sentencing guidelines
range was computed at four to ten months of imprisonment. The district court imposed a
No. 14-1424
United States v. Gesing
sentence of two years in prison, stating, “I hope while you are in prison . . . that you could take
advantage of a short-term drug program, there is a longer drug program which I really would like
to see you get into but I understand you need more time than that, and the statutory maximum I
can give you is two years.” The term was not to be followed by any additional supervised
release period. Counsel for Gesing objected that two years was longer than necessary for
punishment, deterrence, or protection of the public. The district court agreed that the two-year
sentence was not necessary for protection of the public or punishment, but explained “that the
element that affects this case the most is the one with providing the defendant with needed
medical care.” The court concluded by advising Gesing that he needed three things: “a strong
showing that you can’t get away with this type of conduct,” . . . “a lot of time to sit and think
about what you have done,” and “help.”
We review a sentence imposed on revocation of supervised release for reasonableness
under an abuse of discretion standard. United States v. Bolds, 511 F.3d 568, 575 (6th Cir. 2007).
A sentence based on an impermissible factor is substantively unreasonable. United States v.
Deen, 706 F.3d 760, 762 (6th Cir. 2013). In Tapia v. United States, 131 S. Ct. 2382, 2391-93
(2011), the Supreme Court held that a court may not impose or lengthen a prison sentence to
promote rehabilitation. That holding applies to sentences imposed on revocation of supervised
release. Deen, 706 F.3d at 765–67. In Deen, we recognized that a sentencing court may discuss,
encourage, and even recommend a defendant’s participation in prison treatment programs. Id. at
768. Cognizable error occurs only when the perceived rehabilitative benefits of incarceration are
“the reason” for imposing or lengthening a prison sentence. Id. (quoting United States v. Grant,
664 F.3d 276, 282 (9th Cir. 2011)).
-2-
No. 14-1424
United States v. Gesing
The government contends the district court’s discussion of Gesing’s need for drug abuse
treatment was in the nature of a recommendation and did not run afoul of Tapia, citing United
States v. Krul, 774 F.3d 371 (6th Cir. 2014). In Krul, the sentencing court justified imposition of
a 63-month sentence by considering such factors as the defendant’s extensive criminal history,
the seriousness of the offense, the need to promote respect for the law, the need to afford
adequate deterrence, and the need to protect the public. Id. at 373–74. The court noted that the
period of incarceration would also afford opportunity for participation in educational,
correctional and medical programs. We upheld the sentence because we found no basis for
concluding that the court impermissibly calculated the length of the sentence to ensure receipt of
certain rehabilitative services. Id. at 375–76. We thus refused to give Tapia such an expansive
reading as to require resentencing whenever “it is merely possible” that rehabilitation was a
sentencing factor. Id. at 375.
This case is different. Considering the district court’s history with defendant Gesing,
Gesing’s repeated failures, and the court’s use of progressive discipline, we would be inclined to
hold there was no abuse of discretion, consistent with Krul—but for what the court said in
response to Gesing’s counsel’s objection. As the court varied upward from the guidelines range
of four to ten months, exceeded the government’s recommendation of a sentence at the upper end
of the range, and imposed the statutory maximum of 24 months’ imprisonment, the court
candidly acknowledged that the most significant factor was Gesing’s need for medical care. The
court expressly disclaimed reliance on the need for punishment or the need for protection of the
public as justifications for the admittedly “hard sentence.” On this record, we cannot but find
that the district court’s “hope” for rehabilitation played a determinative role in the length of the
prison term imposed. The two-year sentence, as imposed, thus contravenes Congress’s
-3-
No. 14-1424
United States v. Gesing
admonition in the Sentencing Reform Act “that imprisonment is not an appropriate means of
promoting correction and rehabilitation,” as interpreted in Tapia. 18 U.S.C. § 3582(a).
Accordingly, we hold that the sentence imposed, based in part on an impermissible
factor, is substantively unreasonable. We therefore VACATE the judgment of sentence and
REMAND the case to the district court for resentencing.
-4-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1000188/
|
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-7224
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
JOSEPH MCKNIGHT,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern Dis-
trict of Virginia, at Alexandria. T.S. Ellis, III, District Judge.
(CR-96-24-A, CA-99-858-AM)
Submitted: November 4, 1999 Decided: November 10, 1999
Before NIEMEYER, MICHAEL, and KING, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Joseph McKnight, Appellant Pro Se. Timothy Joseph Shea, Assistant
United States Attorney, Alexandria, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Joseph McKnight seeks to appeal the district court’s order de-
nying his motion filed under 28 U.S.C.A. § 2255 (West Supp. 1999).
We have reviewed the record and the district court’s opinion and
find no reversible error. Accordingly, we deny a certificate of
appealability and dismiss the appeal on the reasoning of the
district court. See United States v. McKnight, Nos. CR-96-24-A;
CA-99-858-AM (E.D. Va. Aug. 23, 1999).* We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before the court and argument would not
aid the decisional process.
DISMISSED
*
Although the district court’s order is marked as “filed” on
August 20, 1999, the district court’s records show that it was
entered on the docket sheet on August 23, 1999. Pursuant to the
Federal Rules of Civil Procedure, it is the date that the order was
entered on the docket sheet that we take as the effective date of
the district court’s decision. See Wilson v. Murray, 806 F.2d
1232, 1234-35 (4th Cir. 1986).
2
|
01-03-2023
|
07-04-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2896192/
|
NO. 07-06-0226-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
JANUARY 12, 2007
______________________________
IN THE INTEREST OF M.L.M., A CHILD
_________________________________
FROM THE 100
TH
DISTRICT COURT OF CHILDRESS COUNTY;
NO. 9286; HONORABLE PHIL VANDERPOOL, JUDGE
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
MEMORANDUM OPINION
Stefani Hobbs Moore appeals a judgment by which the trial court terminated appellant’s parental rights to her daughter MLM and named the child’s father Jerome Flemons permanent managing conservator. Appellant now challenges the trial court’s findings that the Texas Department of Family and Protective Services established each ground for termination by clear and convincing evidence. We affirm.
After the arrest of appellant and her boyfriend, Mickey Charles Hill, for attempting to manufacture methamphetamine in October 2004, the Department took custody of one-year-old MLM. MLM was released to Hill’s mother and grandmother with the stipulation that appellant not have unsupervised visitation. When that condition was violated and appellant was charged with additional offenses in July 2005, the Department placed MLM in foster care. It also filed a petition seeking termination of the parental rights of appellant, Flemons, and another potential father. As to appellant the petition alleged nine grounds for termination and that termination was in the best interest of the child.
See
Tex. Fam. Code Ann. § 161.001 (Vernon Supp. 2006). A September 2005 order adopted the Department’s service plan listing tasks appellant was required to accomplish to regain custody of MLM. In October, the Department filed a permanency plan and progress report that stated appellant was compliant with several aspects of the prior plan but that more work was necessary toward compliance with other requirements, including maintaining stable employment and timely response to requests for random drug tests. The plan’s stated goal was family reunification.
After a December 2005 permanency hearing the trial court issued an order finding appellant had not demonstrated adequate compliance with the Department’s service plan. Also in December the Department received test results confirming Flemons was MLM’s natural father. It took a nonsuit as to the other potential father and, after conducting a home study, placed MLM with Flemons and his wife Amanda in February 2006. She remained there through the time of trial in May 2006.
The evidence at trial consisted of testimony from four witnesses called by the Department: caseworker LaRae Alexander, Jerome Flemons, Amanda Flemons and appellant. At trial the Department requested that Flemons be named permanent managing conservator. Alexander testified to appellant’s limited compliance with the conditions of the service plan. Appellant told Alexander she was employed before her most recent arrest but Alexander was unable to confirm that. Appellant had completed drug and alcohol use assessments but, according to Alexander, did not complete the required counseling. Alexander recounted appellant passed one drug screening but had not responded to “approximately five” requests for random screening. Appellant had moved two or three times since Alexander was assigned to the case the previous July, and had failed to maintain contact with Alexander. According to Alexander, MLM had been doing well while living with the Flemons.
Amanda Flemons expressed interest in adopting MLM. Jerome Flemons agreed it would be in MLM’s best interest to terminate appellant’s parental rights, and that he and Amanda would be able to support and care for MLM. During trial the Department abandoned five of its alleged grounds supporting termination of appellant’s parental rights. Through her attorney, appellant invoked her Fifth Amendment right against self-incrimination when questioned about her drug use but did assert she had attempted to meet all the conditions of the service plan. She also explained that her inability to perform some requirements was caused by the lack of resources such as transportation.
On appellant’s motion at the close of the Department’s case, the trial court found the Department had not proven its contention she failed to support MLM in accordance with her ability. The court found the Department established the three remaining grounds and that termination was in the best interest of the child. Those grounds were that appellant knowingly placed or allowed the child to remain in conditions which endangered her physical or emotional well-being, engaged in conduct or knowingly placed the child with persons who engaged in conduct which endangered her physical or emotional well-being, and failed to comply with the provisions of a court order specifically establishing the actions necessary to obtain return of the child.
See
Tex. Fam. Code Ann. § 161.001(1)(D), (E), (O) (Vernon Supp. 2006).
Family Code Section 161.001 authorizes termination of parental rights on proof of two elements by clear and convincing evidence: first, that the parent committed any one of the enumerated acts or omissions; and second, that termination is in the best interest of the child. Tex. Fam. Code Ann. § 161.001 (Vernon Supp. 2005);
In re A.V.
, 113 S.W.3d 355, 362 (Tex. 2003);
In re S.A.P.
, 169 S.W.3d 685, 695 (Tex.App.–Waco 2005, no pet.);
In re S.M.L.D.
, 150 S.W.3d 754, 756 (Tex.App.–Amarillo 2004, no pet.). Clear and convincing evidence is that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. Tex. Fam. Code Ann. § 101.007 (Vernon 2002);
In re J.L.
, 163 S.W.3d 79, 84 (Tex. 2005). Accordingly, appellate review of the sufficiency of evidence supporting a termination finding must determine and address whether the evidence is such that the trier of fact could reasonably form a firm belief or conviction about the truth of the allegation.
In re C.H.
, 89 S.W.3d 17, 25 (Tex. 2002). Our review must encompass the entire record.
In re J.F.C.
, 96 S.W.3d 256, 266 (Tex. 2002).
Appellant’s first point assigns error to the trial court’s finding that termination of her parental rights was in the best interest of MLM. She initially argues the Department “failed to offer clear and convincing evidence as to how terminating appellant’s parental rights improved [MLM’s] situation greater than by appointing [appellant] as possessory conservator of the child and requiring her to pay child support.” Texas law long has recognized a strong presumption that the best interest of a child is served by preserving the parent-child relationship.
Wiley v. Spratlan
, 543 S.W.2d 349, 352 (Tex. 1976). By statute, that relationship may be terminated only by findings based on clear and convincing evidence. But by statute also, the issue the court must address is whether termination is in the best interest of the child, not whether the child’s situation will be improved more by one action than another.
In 1976 the Texas Supreme Court listed factors our courts have considered when determining whether termination is in the best interest of the child. See
Holley v. Adams
, 544 S.W.2d 367 (Tex. 1976). The non-exclusive list set out in
Holley
includes the desires of the child; the emotional and physical needs of the child now and in the future; the emotional and physical danger to the child now and in the future; the parental abilities of the individuals seeking custody; the programs available to assist these individuals to promote the best interest of the child; the plans for the child by these individuals or by the agency seeking custody; the stability of the home or proposed placement; the acts or omissions of the parent which may indicate that the existing parent-child relationship is not a proper one; and any excuse for the acts or omissions of the parent.
Id.
at 372. The best interest analysis evaluates the best interest of the child, not that of the parent.
In re S.A.P.
, 169 S.W.3d at 707.
Appellant does not argue the court’s judgment is unsupported by the
Holley
factors, but she cites
Horvatich v. Texas Dep’t of Protective & Regulatory Svcs.
, 78 S.W.3d 594 (Tex.App.–Austin 2002, no pet.), in support of her contention the court’s failure to consider “a lesser alternative than termination” rendered the evidence of best interest insufficient. The court in
Horvatich
found the evidence of best interest insufficient under the applicable factors.
(footnote: 1) But there,
the caseworker then assigned to the case was not permitted to testify because she was not designated as a witness.
Id.
at 599. As a result, there was no evidence before the court on the status, at the time of trial, of the children in foster care, the Department’s plans for the children or why it did not seek placement with an available relative.
(footnote: 2) On appeal, the court found the uncertainty of the parent’s plans for the future inadequate to show termination was in the child’s best interest, where the Department was not able to present evidence of its plans.
Id.
at 601. Here, the Department presented the evidence lacking in
Horvatich
. The Department showed its plans for permanent placement of MLM, including evidence of her functioning in that placement pending trial and testimony of her natural father and his wife who desired to adopt MLM. The evidence also showed the stability of the Flemons’ home, their parental abilities, and MLM’s bonding with the Flemons and their daughter.
There is scant, if any, evidence in this record supporting a conclusion that naming appellant possessory conservator and requiring her to pay child support, as she suggests, would promote stability for MLM
(footnote: 3) or otherwise is in the child’s best interest. At the time of the hearing, appellant was on felony deferred adjudication probation, and was in the county jail facing further criminal proceedings. The record shows appellant had failed to make any support payments during this proceeding and, by her own testimony at the hearing, she had no capability to make support payments. As fact finder, the trial court was permitted to draw inferences adverse to appellant concerning her illegal drug use when she asserted her constitutional right against self-incrimination on being asked why she had not submitted to the required drug tests.
See In re C.J.F.
134 S.W.3d 343, 352 (Tex.App.–Amarillo 2003, pet. denied) (applying, in termination case, rule that adverse inferences may be drawn from assertion of Fifth Amendment privilege). The evidence showing appellant engaged in conduct endangering to her child, discussed in our consideration of appellant’s third point of error, also is relevant to the issue of the child’s best interest.
See In re C.H.
, 89 S.W.3d at 28 (holding same evidence may be probative both of best interest and other termination issues).
Under either the legal or factual sufficiency standards of review, we conclude the evidence was sufficient to permit the court to reach a firm belief or conviction that termination of appellant’s parental rights was in the best interest of MLM. We overrule appellant’s first point.
Appellant’s third point addresses the sufficiency of the evidence that she engaged in conduct or placed the child with others who engaged in conduct which endangered the child’s physical or emotional well-being.
See
Tex. Fam. Code Ann. § 161.001(1)(E) (Vernon Supp. 2006). She argues the evidence showed, at most, sporadic and disjointed drug use. She does not deny the risks posed by her drug use, but argues the Department was obligated to show a course of conduct, rather than individual acts or omissions, citing
In re D.M.
, 58 S.W.3d 801, 812 (Tex.App.–Fort Worth 2001, no pet.). We agree a single episode of endangering conduct typically is insufficient.
See In re S.M.L.D.
, 150 S.W.3d at 758. But the evidence here establishes that appellant had engaged in a course of endangering conduct. There was evidence appellant’s amphetamine use had resulted in termination of her parental rights to two other children before MLM was born.
(footnote: 4) Here again, the trial court could draw adverse inferences from appellant’s invocation of her Fifth Amendment rights in response to questions about her drug use.
See In re C.J.F.
134 S.W.3d at 352. There was evidence appellant’s conduct was not limited to use of illegal drugs. The Department’s involvement with MLM arose from appellant’s arrest for attempting to manufacture methamphetamine.
(footnote: 5) Appellant’s drug use continued after MLM was removed and she knew regaining custody depended on foregoing the use of drugs. The record shows appellant’s drug use was part of a continuing course of conduct.
Alexander also testified to the risks created by appellant’s drug-related conduct. In Alexander’s experience as a caseworker methamphetamine use results in the type of instability in the child’s environment found here, including the parent’s inability to maintain stable employment and housing. Courts may consider a parent’s pattern of drug use and its effect on children in determining whether the conduct endangered the children.
See In re T.N.,
180 S.W.3d at 383;
Vasquez v. Texas Dept. of Protective & Regulatory Services
, 190 S.W.3d 189, 196 (Tex.App.–Houston [1st Dist.] 2005, pet. denied);
S.M.L.D.
, 150 S.W.3d at 758;
In re R.W.
, 129 S.W.3d 732, 739 (Tex.App.–Fort Worth 2004, pet. denied);
In re U.P.
, 105 S.W.3d 222, 234 (Tex.App.–Houston [14
th
Dist.] 2003, pet. denied). The evidence is sufficient to support a firm conviction or belief that appellant engaged in conduct that endangered MLM’s well-being, and thus is legally and factually sufficient to support the court’s finding. We overrule appellant’s third point.
Our disposition of appellant’s first and third points is dispositive of her appeal. We need not address her second or fourth points.
See In re A.V.
, 113 S.W.3d at 362 (only one finding under Family Code section 161.001(1) is necessary for termination, along with a best interest finding). We affirm the trial court’s judgment.
James T. Campbell
Justice
FOOTNOTES
1: The opinion in
Horvatich
does state the evidence in that case “at least suggests that the Department did not adequately consider reunification or placement with relatives as viable alternatives to termination.” 78 S.W.3d at 602. As the opinion makes clear, however, that weakness was only one of several causing the court to conclude the Department’s evidence on best interest was insufficient.
2:
See In re T.N.
, 180 S.W.3d 376, 385 (Tex.App.–Amarillo 2005, no pet.) (also distinguishing
Horvatich
).
3: Another case appellant cites,
In re M.A.N.M.
, 75 S.W.3d 73 (Tex.App.–San Antonio 2002, no pet.), recognizes a child’s need for permanence as “the paramount consideration for the child’s present and future physical and emotional needs.”
Id.
at 77.
4: Appellant acknowledged during her testimony that one of her children tested positive for amphetamine.
See Cervantes-Peterson v. Texas Dept. of Family & Protective Services
, No. 01-05-0307-CV, 2006 WL 2195241 (Tex.App.–Houston [1st Dist.] August 3, 2006, no pet.) (citing drug use during another pregnancy as evidence mother would continue to endanger child).
See also In re Baby Boy R.
, 191 S.W.3d 916, 925 (Tex.App.– Waco 2005, pet. denied) (considering conduct toward stepchild).
5: Appellant pled guilty to this charge and, as noted, was placed on deferred adjudication probation.
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2982804/
|
NOT RECOMMENDED FOR PUBLICATION
File Name: 15a0250n.06
No. 14-5972
UNITED STATES COURTS OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
FILED
) Apr 07, 2015
Plaintiff-Appellee, ) DEBORAH S. HUNT, Clerk
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
EFREM RAHOMAN DOUGLAS, ) COURT FOR THE EASTERN
) DISTRICT OF TENNESSEE
Defendant-Appellant. )
)
)
BEFORE: SUHRHEINRICH, CLAY, and ROGERS, Circuit Judges.
ROGERS, Circuit Judge. The defendant, Efrem Rahoman Douglas, appeals the district
court’s denial of his motion for reduction of sentence under 18 U.S.C. § 3582(c)(2), based on
Amendments 706 and 750 to the United States Sentencing Guidelines. On June 20, 2005,
Douglas pled guilty to possessing with intent to distribute “fifty grams or more of a mixture and
substance containing a detectable amount of cocaine base,” in violation of 21 U.S.C. § 841(a)(1).
The district court sentenced Douglas to 300 months’ imprisonment, a term near the middle of the
advisory guidelines range applicable to Douglas as a career offender, and which had been
stipulated to by both parties in his Federal Rule of Criminal Procedure, Rule 11(c)(1)(C) plea
agreement. Douglas later filed motions for reduction of sentence under 18 U.S.C. § 3582(c)(2),
based on amendments to the crack cocaine sentencing guidelines that retroactively lowered the
base offense level for Douglas’s drug offense. The district court denied Douglas’s motions,
No. 14-5972, United States v. Douglas
finding him ineligible for a sentence reduction because the changes to the crack cocaine
sentencing guidelines did not lower his initial guidelines range—a range that had been based on
his status as a career offender. Douglas appeals. Because Douglas’s sentence was based on his
Rule 11(c)(1)(C) plea agreement and his status as a career offender, rather than the U.S.S.G.
§ 2D1.1 crack-cocaine guidelines, the judgment of the district court must be upheld.
On June 20, 2005, Efrem Rahoman Douglas pled guilty to possessing with intent to
distribute “fifty grams or more of a mixture and substance containing a detectable amount of
cocaine base,” in violation of 21 U.S.C. § 841(a)(1). Pursuant to the Rule 11(c)(1)(C) plea
agreement, the parties stipulated to a term of 300 months’ imprisonment, a length of
incarceration near the middle of the advisory guideline range applicable to Douglas as a career
offender. In the same agreement, the parties acknowledged that “the statutory penalty provision
of 21 U.S.C. § 841(b)(1)(A), of a minimum of twenty years imprisonment up to life[,] . . . applies
in this case.” This 240-month mandatory minimum reflected the government’s decision—at
defense counsel’s request—not to submit an enhancement under 21 U.S.C. § 851 for Douglas’s
second qualifying prior conviction, an enhancement that would have resulted in a mandatory life
sentence. The district court accepted Douglas’s guilty plea, but reserved until sentencing the
decision of whether or not to accept the Rule 11(c)(1)(C) agreement.
Douglas’s presentence investigation report established an advisory guidelines range of
262 to 327 months’ imprisonment, based on his total offense level of 34 and criminal history
category of VI. This final offense level was in turn based—independently of the guidelines
range applicable to the immediate drug offense—on his status as a career offender. The report
correctly indicated that though Douglas was responsible for 62 grams of cocaine base, which
would ordinarily result in a base offense level of 32, his status as a career offender due to his two
-2-
No. 14-5972, United States v. Douglas
prior felony convictions for controlled substance offenses independently required a base offense
level of 37.1 The probation officer applied a three-level reduction for acceptance of
responsibility to yield the total offense level of 34. Douglas’s status as a career offender
similarly automatically increased his criminal history category from V to VI. U.S.S.G.
§ 4B1.1(b). Finally, the report indicated that the sentence stipulated to by the parties fell within
the advisory range, and noted that “the defendant would have been subject to a mandatory life
sentence based on his two prior felony convictions for controlled substance offenses” had the
government not “filed an amended notice of enhancement which established a minimum
mandatory term of imprisonment of 20 years.”
On September 19, 2005, at Douglas’s sentencing hearing, the district court expressed
concern regarding potential sentencing disparities between Douglas—who had received a
favorable plea agreement in light of the government’s decision to forgo a 21 U.S.C. § 851 prior
conviction enhancement—and similarly situated defendants, who may not be so fortunate.
Nevertheless, after briefly mentioning Douglas’s guidelines range2 and finding the proposed
incarceration term reasonable in light of the 18 U.S.C. § 3553(a)(2)(A) factors, the district court
accepted Douglas’s Rule 11(c)(1)(C) agreement and accordingly sentenced Douglas to 300
months’ imprisonment. The district court made no mention of crack cocaine sentencing
disparities at the hearing.
1
“Career offender status” specifies an offense level of 37 for offenses (like Douglas’s) carrying a
statutory maximum of life (unless the applicable offense level exceeds 37). See U.S.S.G.
§ 4B1.1(b).
2
During Douglas’s sentencing hearing, the district judge made only two brief references to
Douglas’s advisory guidelines range. First, the district judge noted that there had been “no
objections filed as to the guideline calculations,” which the presentence report established as
262 to 327 months. Second, the district judge explained that in finding Douglas’s stipulated
sentence reasonable, he had “considered the advisory guideline range of 262 to 327 months.”
-3-
No. 14-5972, United States v. Douglas
After passage of Amendments 706 and 750 to the Sentencing Guidelines, amendments
that retroactively lowered the base offense levels for most offenses involving crack cocaine,
Douglas filed several 18 U.S.C. § 3582(c)(2) motions for modification or reduction of sentence.
Douglas alleged that “to the extent . . . the Court was advised of the U.S.S.G. § 2D1.1 [crack
cocaine] guideline range, [Douglas’s] sentence was at least in part ‘based on’ the guideline’s
range that resulted from the amount of crack he possessed,” entitling him to a sentence
modification as a result of the change in the crack cocaine sentencing guidelines. The district
court denied his motions, finding Douglas ineligible for a sentence reduction because “changes
to the Sentencing Guidelines did not affect” his sentencing guidelines range—a range based on
his status as a career offender, rather than his possession of a certain quantity of crack cocaine.
Douglas now appeals, alleging that because his sentence was based, in part, on the later amended
crack cocaine sentencing provisions, the district court erred in finding that he could not seek a
sentence modification under 18 U.S.C. § 3582(c)(2).
Douglas is not eligible for a sentence reduction under 18 U.S.C. § 3582(c)(2) because
Douglas’s sentence was “based on” his Rule 11(c)(1)(C) agreement—which does not refer to a
sentencing guidelines range—rather than a later amended crack cocaine sentencing range. To be
eligible for a sentence reduction, the defendant must have been “sentenced to a term of
imprisonment based on a sentencing range that has been lowered by the [Sentencing]
Commission pursuant to 28 U.S.C. § 994(o).” United States v. Thompson, 714 F.3d 946, 948
(6th Cir. 2013) (emphasis added); 18 U.S.C. § 3582(c)(2); U.S.S.G. § 1B1.10(a)(2)(B). “[T]he
term of imprisonment imposed by a district court pursuant to an agreement authorized by Federal
Rule of Criminal Procedure 11(c)(1)(C) . . . is ‘based on’ the agreement itself, not on the judge’s
calculation of the Sentencing Guidelines.” Freeman v. United States, 131 S. Ct. 2685, 2695
-4-
No. 14-5972, United States v. Douglas
(2011) (Sotomayor, J., concurring). Douglas’s Rule 11(c)(1)(C) agreement neither expressly
used an advisory sentencing range to establish the 300-month term of imprisonment, nor
explicitly referred to the crack cocaine sentencing provisions; consequently, Douglas’s sentence
was based solely on the stipulated term of incarceration, not on any crack cocaine sentencing
guideline range. A defendant’s sentence—for purposes of 18 U.S.C. § 3582(c)(2)—is “‘based
on’ a guideline range only when that guideline range is explicitly referenced in a plea agreement
and expressly relied upon to determine a defendant’s sentence.” United States v. Riley, 726 F.3d
756, 760 (6th Cir. 2013) (emphasis added). Because neither Amendment 706 nor 750 would
“have the effect of lowering the defendant’s” stipulated term of incarceration, Douglas is not
eligible for an 18 U.S.C. § 3582(c)(2) sentence modification.
Further, assuming arguendo that the district court’s brief references to the advisory
guidelines range calculated in the presentence report indicate that Douglas’s sentence was “based
on” the 262 to 327 month range as opposed to the Rule 11(c)(1)(C) agreement, Douglas would
still be ineligible for a sentence modification under 18 U.S.C. § 3582(c)(2) because his range was
based on the career offender guideline, U.S.S.G. § 4B1.1, rather than on the later amended (and
lowered) crack cocaine guideline, U.S.S.G. § 2D1.1. We have repeatedly held that “[a]lthough
Amendment 750 is retroactive, it cannot benefit [a defendant whose] sentence was derived from
his status as a career offender, rather than from the quantity of drugs for which he was held
responsible[,] . . . because that amendment did not lower the career offender sentencing
guidelines range.” Riley, 726 F.3d at 759 (quotation marks and citation omitted); see also United
States v. Tillman, 511 F. App’x 519, 521 (6th Cir. 2013); United States v. Perdue, 572 F.3d 288,
292–93 (6th Cir. 2009).
-5-
No. 14-5972, United States v. Douglas
Douglas correctly asserts that the presentence report calculated an initial base offense
level of 32 based on drug quantity. However, Douglas’s status as a career offender under
U.S.S.G. § 4B1.1(b) ultimately determined his sentencing range. Because Douglas’s offense
level as a career offender (37) was greater than his base offense level determined by drug
quantity (32), the career offender guideline—not the later-amended crack cocaine guideline—
controlled. “[I]f the offense level for a career offender from the table in [§ 4B1.1(b)] is greater
than the offense level otherwise applicable, the offense level from the table in this subsection
shall apply.” U.S.S.G. § 4B1.1(b). Further, as a career offender, Douglas’s criminal history
category was necessarily VI, irrespective of the drug quantity. “A career offender’s criminal
history category in every case under this subsection shall be Category VI.” U.S.S.G. § 4B1.1(b)
(emphasis added). Had Amendments 706 or 750 existed at the time of his original sentence,
therefore, Douglas would have been subjected to the same sentencing range.
Because the only sentencing guidelines range discussed by the district court was one
based on Douglas’s status as a career offender, and the court ultimately accepted a stipulated
sentence that fell within that range, the case relied on by Douglas—United States v. Jackson,
678 F.3d 442 (6th Cir. 2012)—to show that designation as a career offender does not
automatically preclude resentencing under § 3582(c)(2), is easily distinguished. In Jackson, the
defendant pled guilty to one count of intent to distribute more than five grams of cocaine base.
Id. at 443. The presentence report calculated a sentencing range of 188 to 235 months based on
Jackson’s status as a career offender. Id. After delaying sentencing in anticipation that Congress
would pass legislation reducing the penalties associated with the crack cocaine laws, the district
court ultimately chose not to apply the “career offender” guideline sentence, sentencing him
instead to 150 months, a range within the “old advisory guideline range for crack cocaine
-6-
No. 14-5972, United States v. Douglas
violations that would have otherwise applied . . . if he were not a career offender.” Id. In
remanding to the district court for resentencing following the passage of the Fair Sentencing Act
a mere three weeks after the defendant’s sentencing, we explained,
If a sentencing judge, having found a defendant to be a career offender, then
decides to sentence defendant below the range for career offenders and notes his
policy disagreement with the crack cocaine guidelines, ordinary review would say
that the sentence was as much ‘based on’ the crack cocaine guidelines as the
career offender guidelines.
Id. at 445. Unlike the district court in Jackson, however, the district court here accepted a
sentence within the career offender guideline range. Further, the district court did not discuss—
let alone express a policy disagreement with—the crack cocaine guidelines when sentencing
Douglas. In fact, instead of expressing concern that Douglas’s sentence, as a result of the crack
cocaine laws, would be too harsh, the district court appeared concerned that Douglas’s sentence
might be too lenient, thus creating sentencing disparities between similarly situated defendants.
The district court, for instance, repeatedly noted the substantial benefit Douglas had received as a
result of the U.S. Attorney’s decision not to file a second prior conviction enhancement: reduction
of the mandatory minimum sentence from life imprisonment to twenty years. Because, unlike in
Jackson, no record evidence supports a finding that Douglas’s sentence was “based on” the crack
cocaine sentencing guidelines, Douglas is not eligible for resentencing under § 3582(c)(2).
Finally, Douglas’s contention that he was not sentenced “based on” his classification as a
career offender because he never “agreed” to be classified as a career offender is not persuasive
because the record clearly indicates that Douglas was aware of—and did not object to—such
classification at the time of sentencing. The presentence investigation report calculated his
sentencing guidelines range based on his status as a “career offender within the meaning of USSG
§ 4B1.1.” Douglas, in his sentencing memorandum, agreed that the report accurately reflected his
-7-
No. 14-5972, United States v. Douglas
“applicable advisory range,” and at his sentencing hearing, stated that he had had an opportunity
to review the report with his counsel. In addition, Douglas’s counsel, in a letter to the U.S.
Attorney requesting the withdrawal of one of the prior conviction enhancements under 21 U.S.C.
§ 851, explicitly stated that “[t]he advisory Sentencing Guidelines likely will result in a
recommended career offender classification providing a 262 to 327 month . . . incarceration
range.” (Emphasis added.)
The judgment of the district court is affirmed.
-8-
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/2614970/
|
68 Wash. App. 897 (1993)
847 P.2d 488
THE STATE OF WASHINGTON, Respondent,
v.
TERRY LEE JENKINS, Appellant.
No. 26200-9-I.
The Court of Appeals of Washington, Division One.
March 8, 1993.
Elaine Winters of Washington Appellate Defender Association, for appellant.
Norm Maleng, Prosecuting Attorney, and Brenda Bannon and Peter Goldman, Deputies, for respondent.
COLEMAN, J.
Terrance L. Jenkins appeals his judgment and sentence for one count of delivery of a controlled substance, alleging that the Superior Court applied an incorrect seriousness level in calculating the standard sentence range. In addition, Jenkins contends that the Superior Court erred in admitting certain testimony, in admitting evidence of prior felonies, and in failing to give a limiting instruction. Finally, Jenkins contends that he was denied effective assistance of counsel. We affirm.
On October 6, 1989, five Seattle police officers conducted a sting operation in the 2000 block of East Union Street. Accompanied by Officer Lisa Fenkner and Detective Joe Lam, Detective Linda Hill drove a dented 2-door Lincoln Continental slowly by a bus shelter. The officers made eye contact with individuals at the shelter and pulled up to the *899 curb. According to the officers, one of the individuals pushed through the group and leaned in the car window asking, "Are you looking?" He held up a baggie which contained a hard white substance and stated, "I have got some good stuff, man." At that point Officer Fenkner handed the man a previously Xeroxed $20 bill, exchanging it for the white substance.[1]
The undercover officers identified Terrance Jenkins as the person who exchanged the cocaine for the $20 bill. Detective Lam then radioed a description of Jenkins to two other police officers, George Shilipetar and Kenneth Hicks. Shortly thereafter, Officers Shilipetar and Hicks arrested Jenkins at the bus shelter, searched him, and found the Xeroxed $20 bill. Officers Fenkner, Lam, and Hill then drove by and identified Jenkins as the individual who made the buy.
Terrance L. Jenkins was charged by information with one count of violation of RCW 69.50.401(a), the Uniform Controlled Substances Act. At a pretrial hearing held on March 9, 1990, the State moved to admit evidence of Jenkins' prior VUCSA convictions for impeachment purposes. After weighing the factors enunciated in State v. Alexis, 95 Wash. 2d 15, 621 P.2d 1269 (1980), the court determined that the State could offer evidence of three prior VUCSA convictions by eliciting from Jenkins that he had been convicted of three prior felonies. However, the court refused to allow the State to introduce evidence that those three felonies were drug related.
At trial, Officer Hicks stated during cross examination that no weapons and no drugs were found on Jenkins at the time of his arrest. The court permitted Officer Hicks to testify on redirect that in his opinion, based on his training and experience, Jenkins' failure to carry drugs or weapons was not surprising.
Jenkins took the witness stand on his own behalf. He testified that he was at the bus shelter on East Union, that he observed three drug dealers approach the Lincoln Continental, *900 and that he pushed his way to the front of the group. Jenkins further testified that he asked to see the undercover officer's money, took the $20 bill out of her hand, and left without giving her any cocaine in exchange. Although he denied selling cocaine on October 6, 1989, he testified that he had been convicted of crimes in the past. On cross examination, he admitted that he had been convicted of felonies in January 1987, June 1988, and October 1988.
At the close of trial the Superior Court instructed the jury. However, the Superior Court failed to give a limiting instruction which informed the jury that evidence of Jenkins' prior felonies could be used only for impeachment purposes. Neither the State nor the defendant objected to this omission. However, after jury deliberations had begun, the State requested a limiting instruction, which the defendant concurred in. The court denied the request, stating that Jenkins testified as to the conviction on his direct examination. At that point, Jenkins did not offer a written limiting instruction, did not object to the Superior Court's refusal to give one, and did not state reasons supporting such an objection.[2]
Subsequently, the jury returned a verdict of guilty. On April 20, 1990, Jenkins was sentenced to serve 116 months in prison, a sentence within the standard range. Jenkins appeals.
We initially determine whether the Superior Court applied an incorrect seriousness level in calculating the standard range. Laws of 1989, ch. 271, the Omnibus Alcohol and Controlled Substances Act, raised the seriousness level for delivery of cocaine and heroin from 6 to 8 and became effective prior to the date on which the charged drug delivery occurred. During sentencing, the Superior Court applied seriousness level 8 in determining Jenkins' standard range. Jenkins alleges error on three grounds.
[1] First, Jenkins contends that the seriousness level stipulated under the act does not apply because the act violates *901 the single subject requirement of the Washington State Constitution, article 2, section 19, which provides: "No bill shall embrace more than one subject, and that shall be expressed in the title." A broad and comprehensive title is permissible. However, the title must give notice of a bill's contents. See Washington Toll Bridge Auth. v. State, 49 Wash. 2d 520, 523, 304 P.2d 676 (1956). In addition, there must be a "rational unity" between the subject of the title and the incidental subdivisions within the bill. See State v. Grisby, 97 Wash. 2d 493, 498, 647 P.2d 6 (1982), cert. denied sub nom. Frazier v. Washington, 459 U.S. 1211, 75 L. Ed. 2d 446, 103 S. Ct. 1205 (1983).
[2] The title of the act gave adequate notice of its contents and that there was rational unity between all of the bill's provisions. The act was entitled the Omnibus Alcohol and Controlled Substances Act, and the title gave notice that the Legislature had enacted laws relating to the consumption of alcohol and controlled substances. The act addressed alcohol and drug problems by enacting provisions promoting public safety, by providing prevention and rehabilitation programs, and by increasing punishment upon conviction of specific offenses.[3] Although the civil and criminal provisions within the act cover a broad range of activities, each of those provisions furthers the legislative purpose of counteracting drug problems which are prevalent within our society. Thus, we conclude that the act does not violate the single subject requirement of the constitution.
[3] Next, Jenkins contends that the seriousness level stipulated under the act does not apply because the act *902 violates the proscription against "logrolling" implicit within article 2, section 19 of the constitution.
Article 2, section 19 of our state constitution has a dual purpose: (1) to prevent "logrolling", or pushing legislation through by attaching it to other necessary or desirable legislation, and (2) to assure that the members of the legislature and the public are generally aware of what is contained in proposed new laws.
Flanders v. Morris, 88 Wash. 2d 183, 187, 558 P.2d 769 (1977). However, Jenkins provides no evidence to support his allegation. In addition, because all the provisions within the act work to counteract drug and alcohol problems, the act raises no inference of special interest legislation unrelated to the act's general purpose.[4]
Finally, Jenkins contends that the seriousness level provided within the act does not apply because the act was superseded or repealed by subsequent enactments. The Omnibus Alcohol and Controlled Substances Act was one of four bills enacted during the 1989 legislative session which amended the seriousness level list contained within RCW 9.94A.320.[5] Each bill changed the seriousness level for different, specific crimes listed within RCW 9.94A.320, was enacted without reference to the other, and stated the Legislature's intent to reenact and amend RCW 9.94A.320.
*903 The four bills were filed in the following order. Laws of 1989, ch. 99 was filed in the Secretary of State's office on April 20, became effective July 1, and placed several previously unranked felonies on the seriousness level list. Laws of 1989, ch. 271, the Omnibus Alcohol and Controlled Substances Act, was filed on May 7 and raised the seriousness level for delivery and manufacture of cocaine from level 6 to level 8. Because the act contained an emergency clause, the relevant section became effective on the date of filing. Laws of 1989, ch. 405 was filed on May 13, took effect on July 23, and moved alcohol-related vehicular homicides from level 7 to level 8. Finally, Laws of 1989, 2d Ex. Sess., ch. 1 was filed on May 13 and placed residential burglary at level 4 and moved second degree burglary from level 2 to level 3. Although the section of chapter 1 which amended RCW 9.94A.320, the seriousness level list, was vetoed by the Governor, that veto was overridden on May 20 and the amendment took effect on July 1, 1990.
Citing State ex rel. Gebhardt v. Superior Court, 15 Wash. 2d 673, 131 P.2d 943 (1942), Jenkins contends that the amendment to RCW 9.94A.320 contained in chapter 271, the Omnibus Alcohol and Controlled Substances Act, which raised the seriousness level for delivery of cocaine from 6 to 8, was superseded or repealed by chapters 99, 405 and 1, which became effective after chapter 271 and listed the seriousness level for delivery of cocaine at level 6. In Gebhardt, the 1941 Legislature passed two bills which amended section 4776 of Remington's Revised Statutes. Each bill was passed without reference to the other. Gebhardt, at 683. The first bill, Laws of 1941, ch. 42, protected teachers from termination without notice, was passed on March 5, provided that Remington's Revised Statutes § 4776 was "amended to read as follows", and was to become effective 90 days after the legislative session ended. Gebhardt, at 681-82. The second bill, Laws of 1941, ch. 179, authorized school directors to make joint purchases of school supplies, provided that Remington's Revised Statute § 4776 was "amended to read as follows", and took *904 effect on March 24 because it contained an emergency clause. Gebhardt, at 682-83. Thus, chapter 179, the later enacted statute, took effect before chapter 42. The Gebhardt court held "that chapter 179, being enacted after chapter 42, and having an emergency clause, became the law, and that chapter 42 never became effective." Gebhardt, at 687.
Jenkins' reliance on the Gebhardt rule is misplaced. First, Gebhardt is inapposite to the relationship between chapter 271 and chapters 405 and 1, because chapter 271, the earlier enacted statute, contained the emergency clause and took effect before chapters 405 and 1 (the later enacted statutes) were even filed. Second, Gebhardt is inapposite to the relationship between chapter 271 and chapters 99, 405, and 1 because Gebhardt was decided prior to the adoption of RCW 1.12.025(1), which states in relevant part:
If at any session of the legislature there are enacted two or more acts amending the same section of the ... code, each amendment without reference to the others, each act shall be given effect to the extent that the amendments do not conflict in purpose, otherwise the act last filed in the office of the secretary of state in point of time, shall control[.]
(Italics ours.) Therefore, under this provision, failing a conflict in purpose, each amendment may be given effect.
[4, 5] The various amendments to RCW 9.94A.320 adopted in 1989 do not conflict in purpose. Each amendment made different and specific changes to the 1988 seriousness level list, and each change was prompted by a specific concern relating to the seriousness level of a specific crime. There is no reason to believe that the Legislature's purpose, as it responded one by one to each of these concerns, was to repeal its solution to the previous problem. Because each amendment can be given effect without affecting the result intended by the other, it cannot be said that the amendments conflict in purpose. Failing a conflict in purpose, RCW 1.12.025(1) requires that each amendment to RCW 9.94A.320 be given the force of law.
*905 Moreover, treating subsequently enacted amendments as superseding and repealing the earlier ones would violate the principle that "implied repeals of statutes are disfavored and courts have a duty to interpret statutes so as to give them effect." Bellevue Sch. Dist. 405 v. Brazier Constr. Co., 103 Wash. 2d 111, 122, 691 P.2d 178 (1984). Implied repeals are found only where the later statute is "evidently intended to supersede prior legislation on the subject" or where the two statutes are so inconsistent "that they cannot be reconciled and both given effect[.]" Walton v. Absher Constr. Co., 101 Wash. 2d 238, 242, 676 P.2d 1002 (1984) (quoting U.S. Oil & Ref. Co. v. Department of Ecology, 96 Wash. 2d 85, 88, 633 P.2d 1329 (1981) (quoting In re Chi-Dooh Li, 79 Wash. 2d 561, 563, 488 P.2d 259 (1971))).
The Legislature clearly did not intend chapters 99, 405, and 1 to supersede chapter 271 as it pertained to the seriousness level for delivery of cocaine. First, even though chapter 271 took effect prior to chapters 99, 405, and 1, chapters 99, 405, and 1 were passed by both houses of the Legislature before chapter 271 chapter 99 passed the House on March 29 and the Senate on April 10, chapter 1 passed the House on April 11 and the Senate on April 17, chapter 405 passed the House on April 14 and the Senate on April 18, and chapter 271 passed both houses on April 22, 1989. It is illogical to assume that the Legislature intended its earlier bills to repeal its later one. Second, when the Legislature again amended RCW 9.94A.320 in 1990, it recognized the continuing vitality of chapter 271 by listing delivery of cocaine within the existing list of seriousness level 8 offenses.
Where there is no intent to supersede and where each amendment to RCW 9.94A.320 can be given effect, we find no basis for holding that chapter 271 was superseded by chapters 99, 405, and 1. Thus, we conclude that seriousness level 8 was correctly applied in determining Jenkins' sentence.
The judgment and sentence of the Superior Court are affirmed.
*906 The remainder of this opinion has no precedential value. Therefore, it will be filed for public record in accordance with the rules governing unpublished opinions.
PEKELIS, A.C.J., and AGID, J., concur.
Review denied at 121 Wash. 2d 1032 (1993).
NOTES
[1] The substance was later tested by the Washington State Patrol Crime Laboratory and found to contain cocaine.
[2] Defense counsel stated only that testimony concerning prior felonies was elicited on direct as a trial tactic, because counsel was aware that such testimony would be used for impeachment during cross examination.
[3] Public safety was fostered by the provision authorizing the Department of Social and Health Services to involuntarily commit persons for detoxification and by enactment of the neighborhood blight provisions. See Laws of 1989, ch. 271, §§ 307, 239. Prevention and rehabilitation was promoted through the community mobilization grant program and early intervention program contained in the act. See Laws of 1989, ch. 271, §§ 315, 310. Law enforcement was enhanced by the 1-party consent statute permitting police to place a "wire" on undercover agents during drug transactions, by modification of the civil forfeiture laws, and by modifications pertaining to school locker searches. See Laws of 1989, ch. 271, §§ 201, 211, 244. Stiffer punishment was provided by increasing the seriousness level for delivery of heroin and cocaine from 6 to 8. See Laws of 1989, ch. 271, § 102.
[4] We find no merit to Jenkins' contention that the act also violated article 2, section 19 of the constitution because it contained both civil and criminal provisions. Jenkins supports his contention with citations to State v. Tieman, 32 Wash. 294, 298, 73 P. 375 (1903) (civil provision for compelling child support for illegitimate child not properly included within criminal statute) and State ex rel. Henry v. Macdonald, 25 Wash. 122, 126, 64 P. 912 (1901) (criminal provision for failing to send a child to school not properly included within "`[a]n act to establish a general and uniform system of public schools in the state of Washington"). However, Tieman and Henry do not state that criminal and civil provisions can never be combined. Where, as here, the title of an act is broad enough to encompass both its criminal and civil provisions, no article 2, section 19 violation arises.
[5] RCW 9.94A.320 consists solely of a table which lists the crimes included within each of the 15 seriousness levels identified under the Sentencing Reform Act of 1981. These crimes are grouped by seriousness of harm, are otherwise unrelated to one another, and range from aggravated murder at seriousness level 15 to vehicle prowling, eluding police, and reckless burning at seriousness level 1.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1874607/
|
288 Wis. 2d 459 (2005)
706 N.W.2d 702
2005 WI App 254
ODA v. PORT WASHINGTON STATE BANK.
No. 2004AP001799.
Court of Appeals of Wisconsin.
October 5, 2005.
Unpublished Opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2897371/
|
NO. 07-08-0195-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
MAY 6, 2008
______________________________
IN RE JESSE BLAKE WELTY, RELATOR
_________________________________
FROM THE 181ST DISTRICT COURT OF RANDALL COUNTY;
NO. 19,358-B; HONORABLE JOHN B. BOARD, JUDGE
_______________________________
MEMORANDUM OPINION
________________________________
Before CAMPBELL and HANCOCK and PIRTLE, JJ.
By this original proceeding Relator, Jesse Blake Welty, seeks to be released from
his present confinement in the Randall County Jail. On January 24, 2008, Relator was
held in “contempt” for violation of a condition of the appearance bond he filed in the
underlying criminal case, and he was ordered into custody for a term of ten days. On May
5, 2008, Relator filed his Petition for Writ of Habeas Corpus. We dismiss for want of
jurisdiction.
This Court is obligated to determine, sua sponte, its jurisdiction in each case. Welch
v. McDougal, 876 S.W.2d 218, 220 (Tex.App.–Amarillo 1994, writ denied). That
jurisdiction is established by various constitutional and statutory provisions. Ex Parte
Lewis, 663 S.W.2d 153, 154 (Tex.App.–Amarillo 1983, no pet.). The Texas Constitution
grants this Court original jurisdiction only where specifically prescribed by law. Tex. Const.
art. 5, § 6.
Relator purports to invoke the jurisdiction of this Court pursuant to § 22.221(d) of
the Texas Government Code, which provides that the court of appeals, or a justice of the
court of appeals, “may issue a writ of habeas corpus when it appears that the restraint of
liberty is by virtue of an order, judgment, or decree previously made, rendered, or entered
by the court or judge in a civil case.” Tex. Gov’t Code Ann. § 22.221 (Vernon 2004)
(emphasis added). As such, that provision does not grant this Court original jurisdiction
to issue a writ of habeas corpus in a criminal proceeding. Ex Parte Hawkins, 885 S.W.2d
586, 588 (Tex.App.–El Paso 1994, no pet.).
Article 11.05 of the Texas Code of Criminal Procedure Annotated (Vernon 2005)
lists the courts which are authorized to issue a writ of habeas corpus stemming from a
criminal proceeding. Absent from that list are the courts of appeals. Greenville v. State,
798 S.W.2d 361, 362 (Tex.App.–Beaumont 1990, no pet.). This Court’s habeas corpus
jurisdiction in criminal matters is appellate only. Denby v. State, 627 W.W.2d 435
(Tex.App.–Houston [1st Dist.] 1981, original proceeding), cert denied, 462 U.S. 1110, 103
2
S. Ct. 2461, 77 L. Ed. 2d 1338 (1983). Thus, we have no jurisdiction to entertain Relator’s
petition.
Accordingly, Relator’s Petition for Writ of Habeas Corpus is dismissed for want of
jurisdiction.
Per Curiam
3
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/4561184/
|
Case: 19-2131 Document: 67 Page: 1 Filed: 08/28/2020
United States Court of Appeals
for the Federal Circuit
______________________
OMG, INC.,
Plaintiff-Appellee
v.
UNITED STATES,
Defendant-Appellant
MID CONTINENT STEEL & WIRE, INC.,
Defendant-Appellee
______________________
2019-2131
______________________
Appeal from the United States Court of International
Trade in No. 1:17-cv-00036-GSK, Judge Gary S.
Katzmann.
______________________
Decided: August 28, 2020
______________________
NED H. MARSHAK, Grunfeld, Desiderio, Lebowitz, Sil-
verman & Klestadt LLP, New York, NY, argued for plain-
tiff-appellee. Also represented by DAVID M. MURPHY;
KAVITA MOHAN, ANDREW THOMAS SCHUTZ, Washington,
DC.
SOSUN BAE, Commercial Litigation Branch, Civil Divi-
sion, United States Department of Justice, Washington,
DC, argued for defendant-appellant. Also represented by
Case: 19-2131 Document: 67 Page: 2 Filed: 08/28/2020
2 OMG, INC. v. UNITED STATES
ETHAN P. DAVIS, JEANNE DAVIDSON, PATRICIA M.
MCCARTHY; NIKKI KALBING, Office of the Chief Counsel for
Trade Enforcement and Compliance, United States De-
partment of Commerce, Washington, DC.
ADAM H. GORDON, The Bristol Group PLLC, Washing-
ton, DC, for defendant-appellee. Also represented by PING
GONG.
______________________
Before PROST, Chief Judge, MOORE and STOLL, Circuit
Judges.
STOLL, Circuit Judge.
The Government appeals a decision of the United
States Court of International Trade affirming a remand de-
termination of the United States Department of Com-
merce. Commerce originally determined that imports of
certain masonry anchors are within the scope of relevant
antidumping and countervailing duty orders. On appeal,
the Court of International Trade concluded that Com-
merce’s original scope ruling was contrary to law and the
anchors were outside the scope of the orders, remanding to
Commerce for reconsideration. On remand, Commerce de-
termined under protest that the subject anchors are not
within the scope of the relevant orders. The Court of Inter-
national Trade affirmed Commerce’s remand determina-
tion. We affirm.
BACKGROUND
Domestic industry participants believing that “a class
or kind of foreign merchandise is being, or is likely to be,
sold in the United States at less than its fair value” may
petition Commerce to impose antidumping duties on im-
porters of foreign merchandise. 19 U.S.C. §§ 1673,
1673a(b). If Commerce determines that the subject foreign
merchandise is being, or is likely to be, sold in the United
States at less than its fair value, and the International
Case: 19-2131 Document: 67 Page: 3 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 3
Trade Commission (ITC) determines that an industry in
the United States has been materially injured or is threat-
ened with material injury, Commerce will issue an anti-
dumping duty order. Id. §§ 1673, 1673e(a). The
antidumping duty order “includes a description of the sub-
ject merchandise, in such detail as [Commerce] deems nec-
essary.” Id. § 1673e(a)(2).
Similarly, domestic industry participants believing
that a government or public entity within a foreign country
is providing a countervailable subsidy for a class or kind of
merchandise that is imported, sold, or likely to be sold into
the United States may petition Commerce to impose coun-
tervailing duties on such merchandise. Id. §§ 1671(a),
1671a(b). If Commerce determines that a countervailable
subsidy is being provided to such merchandise and the ITC
determines that an industry in the United States has been
materially injured or is threatened with material injury,
Commerce will issue a countervailing duty order. Id.
§§ 1671(a), 1671e(a). Like an antidumping order, a coun-
tervailing duty order “includes a description of the subject
merchandise, in such detail as [Commerce] deems neces-
sary.” Id. § 1671e(a)(2). After an antidumping or counter-
vailing duty order has issued, “[a]ny interested party may
apply for a ruling as to whether a particular product is
within the scope of an order.” 19 C.F.R. § 351.225(c)(1).
In 2014, Mid Continent Steel & Wire, Inc. filed a peti-
tion with Commerce requesting the imposition of anti-
dumping and countervailing duties on imports of certain
steel nails from India, the Republic of Korea, Malaysia, the
Sultanate of Oman, Taiwan, the Republic of Turkey, and
the Socialist Republic of Vietnam. In 2015, Commerce is-
sued antidumping and countervailing duty orders based on
Mid Continent’s petition. See Certain Steel Nails from the
Socialist Republic of Vietnam: Countervailing Duty Order
(“Countervailing Duty Order”), 80 Fed. Reg. 41,006 (Dep’t
of Commerce July 14, 2015); Certain Steel Nails from the
Republic of Korea, Malaysia, the Sultanate of Oman,
Case: 19-2131 Document: 67 Page: 4 Filed: 08/28/2020
4 OMG, INC. v. UNITED STATES
Taiwan, and the Socialist Republic of Vietnam: Antidump-
ing Duty Orders (“Antidumping Duty Order”), 80 Fed. Reg.
39,994 (Dep’t of Commerce July 13, 2015) (collectively, “the
Orders”).
As relevant here, the Orders cover:
certain steel nails having a nominal shaft length
not exceeding 12 inches. Certain steel nails in-
clude, but are not limited to, nails made from round
wire and nails that are cut from flat-rolled steel.
Certain steel nails may be of one piece construction
or constructed of two or more pieces. Certain steel
nails may be produced from any type of steel, and
may have any type of surface finish, head type,
shank, point type and shaft diameter. Finishes in-
clude, but are not limited to, coating in vinyl, zinc
(galvanized, including but not limited to electro-
plating or hot dipping one or more times), phos-
phate, cement, and paint. Certain steel nails may
have one or more surface finishes. Head styles in-
clude, but are not limited to, flat, projection,
cupped, oval, brad, headless, double, countersunk,
and sinker. Shank styles include, but are not lim-
ited to, smooth, barbed, screw threaded, ring shank
and fluted. Screw-threaded nails subject to this
proceeding are driven using direct force and not by
turning the nail using a tool that engages with the
head. Point styles include, but are not limited to,
diamond, needle, chisel and blunt or no point.
Countervailing Duty Order, 80 Fed. Reg. at 41,006 (empha-
sis added to disputed language) (footnote omitted); see also
Antidumping Duty Order, 80 Fed. Reg. at 39,995 (same).
The Orders set out several exclusions, but they do not ex-
pressly exclude anchors.
OMG, Inc. imports zinc masonry anchors from Vi-
etnam. OMG’s anchors consist of two components: a zinc
alloy body and a zinc-plated steel pin. The anchors are
Case: 19-2131 Document: 67 Page: 5 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 5
designed to attach termination bars to concrete or masonry
walls. Installing OMG’s zinc anchors requires predrilling
a hole with a diameter that matches the shank diameter of
the anchor and is at least half an inch deeper than the an-
chor embedment. J.A. 53. The anchor is then inserted into
the predrilled hole and “tap[ped] lightly” with a hammer
“until [the] head of [the] anchor body is set gently against
the termination bar.” J.A. 54. To complete installation,
the hammer is used to drive the head of the steel pin flush
with the head of the anchor body, thereby expanding the
anchor body in the predrilled hole to fix the anchor in place.
See J.A. 29, 54.
In 2016, OMG submitted a scope ruling request to
Commerce asking that Commerce find its zinc anchors out-
side the scope of the Orders. Commerce determined that
“OMG’s anchors should not be considered a ‘composite
good,’ but rather a single item.” J.A. 504. Examining the
Orders’ scope language, Commerce found it “unambiguous
as to whether zinc anchors can be classified as subject mer-
chandise” and concluded that “the inclusion of the anchors
is stated clearly.” J.A. 502. Focusing on the steel pin, Com-
merce reasoned that “[t]he galvanized pin is a steel nail
with a body or attachment. By this logic, OMG’s zinc an-
chors are, in fact, a steel nail with two components, which
matches the plain description of the scope covering certain
steel nails of two or more components plated in zinc.” Id.
In reaching this conclusion, Commerce noted “the identical
function of both steel nails and steel pins as fasteners, and
[that] each is installed into position with the use of a ham-
mer.” J.A. 503. Commerce further concluded that the fac-
tors enumerated in 19 C.F.R. § 351.225(k)(1) supported its
conclusion. Accordingly, Commerce issued a final scope
ruling determining that OMG’s anchors are within the
scope of the Orders.
OMG challenged Commerce’s final scope ruling before
the Court of International Trade (CIT). The CIT agreed
with Commerce that the Orders’ scope language is
Case: 19-2131 Document: 67 Page: 6 Filed: 08/28/2020
6 OMG, INC. v. UNITED STATES
unambiguous and noted that the plain meaning of the lan-
guage of the Orders therefore governed its determination
as to whether OMG’s anchors were within the Orders’
scope. OMG, Inc. v. United States, 321 F. Supp. 3d 1262,
1268 (Ct. Int’l Trade 2018). Considering the plain meaning
of the term “nail,” the CIT consulted several dictionary def-
initions, which it determined “present a ‘single clearly de-
fined or stated meaning’: a slim, usually pointed object
used as a fastener designed for impact insertion.” Id.
at 1268–69 (citation omitted). The CIT then reasoned that
OMG’s anchors are unambiguously outside the scope of the
Orders because they are not nails within the plain meaning
of the word. Id. at 1269. Specifically, OMG’s anchors are
“not inserted by impact into the materials to be fastened.”
Id. The CIT faulted Commerce for simultaneously
“mak[ing] its determination based upon the steel pin” and
acknowledging in its final scope ruling that OMG’s anchors
are unitary articles of commerce. Id. The CIT noted that
the parties did not dispute that “the steel pin fits within
the common definition of a nail.” Id. But that was not the
relevant question—rather, because the anchors are unitary
articles, “the entire product, not just a component part,
must be defined as a nail to fall within the scope of the
[O]rders.” Id. Accordingly, the CIT “remand[ed] to Com-
merce for further consideration consistent with [its] opin-
ion.” Id.
On remand, Commerce found “that OMG’s zinc anchors
fall outside the scope of the Orders, but” issued its “remand
redetermination under respectful protest.” J.A. 518. The
CIT affirmed Commerce’s remand determination.
The Government appeals. We have jurisdiction pursu-
ant to 28 U.S.C. § 1295(a)(5).
DISCUSSION
The Government argues that the CIT erred in conclud-
ing that OMG’s anchors are outside the scope of the Orders.
According to the Government, the plain language of the
Case: 19-2131 Document: 67 Page: 7 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 7
Orders covering nails “constructed of two or more pieces”
unambiguously includes OMG’s anchors. We disagree.
We review decisions of the CIT de novo, applying the
same standard used by the CIT in considering Commerce’s
determination. Union Steel v. United States, 713 F.3d
1101, 1106 (Fed. Cir. 2013) (citing Dongbu Steel Co.
v. United States, 635 F.3d 1363, 1369 (Fed. Cir. 2011)).
“When reviewing antidumping duty scope rulings, we ap-
ply the same substantial evidence standard of review as
does the CIT.” Meridian Prods., LLC v. United States,
890 F.3d 1272, 1277 (Fed. Cir. 2018) (citing Shenyang Yu-
anda Aluminum Indus. Eng’g Co. v. United States,
776 F.3d 1351, 1354 (Fed. Cir. 2015)). At the same time,
we give “great weight” to the informed view of the CIT.
Quiedan Co. v. United States, 927 F.3d 1328, 1330
(Fed. Cir. 2019) (quoting Nan Ya Plastics Corp. v. United
States, 810 F.3d 1333, 1341 (Fed. Cir. 2016)).
“[T]he first step in a scope ruling proceeding is to de-
termine whether the governing language is in fact ambig-
uous.” ArcelorMittal Stainless Belgium N.V. v. United
States, 694 F.3d 82, 87 (Fed. Cir. 2012). “If it is not ambig-
uous, the plain meaning of the language governs.” Id. But
“[i]f the language is ambiguous, Commerce must next con-
sider the regulatory history, as contained in the so-called
‘(k)(1) materials.’” Mid Continent Nail Corp. v. United
States, 725 F.3d 1295, 1302 (Fed. Cir. 2013) (first citing
19 C.F.R. § 351.225(k)(1); then citing Tak Fat Trading Co.
v. United States, 396 F.3d 1378, 1382–83 (Fed. Cir. 2005);
and then citing Duferco Steel, Inc. v. United States,
296 F.3d 1087, 1097 n.14 (Fed. Cir. 2002)). “If the
(k)(1) materials are not dispositive, Commerce then consid-
ers the (k)(2) criteria . . . .” Id. (first citing 19 C.F.R.
§ 351.225(k)(2); and then citing Walgreen Co. of Deerfield,
Ill. v. United States, 620 F.3d 1350, 1352 (Fed. Cir. 2010)).
Thus, we first address whether the scope language
“nails . . . constructed of two or more pieces” is ambiguous.
Case: 19-2131 Document: 67 Page: 8 Filed: 08/28/2020
8 OMG, INC. v. UNITED STATES
Although the parties reach different conclusions regarding
the ultimate issue of whether this language includes
OMG’s anchors, they both contend that this language is not
ambiguous. The CIT agreed, holding that “‘nail’ is an un-
ambiguous term.” OMG, 321 F. Supp. 3d at 1269. “[T]he
question of whether the unambiguous terms of a scope con-
trol the inquiry, or whether some ambiguity exists, is a
question of law that we review de novo.” Meridian Prods.
LLC v. United States, 851 F.3d 1375, 1382 (Fed. Cir. 2017)
(citing Allegheny Bradford Corp. v. United States,
342 F. Supp. 2d 1172, 1183 (Ct. Int’l Trade 2004)).
Here, we agree with Commerce, the CIT, and the par-
ties that the term “nails . . . constructed of two or more
pieces” is unambiguous. We appreciate that the language
of the Orders may not unambiguously define the universe
of “nails . . . constructed of two or more pieces” in every
context. For instance, considering injury to domestic in-
dustry, the ITC identified several examples of nails “pro-
duced from two or more pieces.” J.A. 339. Seemingly
straightforward examples include “a nail with a decorative
head, such as an upholstery nail” and “a nail with a large
thin attached head”—products in which two parts together
form a nail. Id. Less clear-cut because it includes a nail
and some additional item is the ITC’s example of “a nail
with a rubber or neoprene washer assembled over its shaft
(to seal the nail-hole in metal or fiberglass roofing, or sid-
ing).” Id. But we need not determine at this time whether
the ITC appropriately concluded that all of these examples
are, in fact, nails constructed of two or more pieces, because
we consider ambiguity in the context of the merchandise at
issue in this case. See 19 C.F.R. § 351.225(a) (“‘[S]cope rul-
ings’ . . . clarify the scope of an order or suspended investi-
gation with respect to particular products.”). Indeed, “the
primary purpose of an antidumping order is to place for-
eign exporters on notice of what merchandise is subject to
duties.” ArcelorMittal, 694 F.3d at 88. Thus, for purposes
Case: 19-2131 Document: 67 Page: 9 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 9
of this appeal, we consider ambiguity of the Orders’ scope
language in the context of anchors.
We agree with the CIT, OMG, and the Government
that the scope language “nails . . . constructed of two or
more pieces” is unambiguous in this context. The language
requires one or more pieces that form a nail. No party ap-
pears to dispute that for purposes of the Orders, “nails” are
fasteners designed for impact insertion. See Appellant’s
Br. 19–22 (taking issue with every aspect of the CIT’s defi-
nition for “nail” other than its use as a fastener and its de-
sign for “impact insertion”); Appellee’s Br. 34 (defining
“nail” as “a slender piece of metal with a point at one end
that is driven into construction materials by impact” (cita-
tions omitted)). This understanding is sufficient to allow
us to address the next step in the analysis: whether OMG’s
anchors meet the unambiguous scope language “nails . . .
constructed of two or more pieces.”
“The question of whether a product meets the unam-
biguous scope terms presents a question of fact reviewed
for substantial evidence.” Meridian Prods., 851 F.3d
at 1382 (citing Novosteel SA v. United States, 284 F.3d
1261, 1269 (Fed. Cir. 2002)). “Substantial evidence is ‘such
relevant evidence as a reasonable mind might accept as ad-
equate to support a conclusion.’” Id. at 1381 (quoting Eck-
strom Indus., Inc. v. United States, 254 F.3d 1068, 1071
(Fed. Cir. 2001)). We agree with the CIT that substantial
evidence does not support Commerce’s original conclusion
that OMG’s anchors are nails constructed of two or more
pieces. On the other hand, substantial evidence supports
Commerce’s conclusion on remand that OMG’s anchors fall
outside the scope of the Orders.
Though OMG’s anchors are constructed of two or more
pieces, they are not nails. As an initial matter, we agree
with both Commerce and the CIT that OMG’s anchors
should be treated as unitary items. J.A. 504 (“OMG’s an-
chors should not be considered a ‘composite good,’ but
Case: 19-2131 Document: 67 Page: 10 Filed: 08/28/2020
10 OMG, INC. v. UNITED STATES
rather a single item.”); OMG, 321 F. Supp. 3d at 1269
(“OMG’s zinc anchor is a unitary article of commerce.”).
Considering OMG’s anchors as unitary items, no reasona-
ble person could conclude that OMG’s anchors are nails be-
cause unlike nails, OMG’s anchors are not designed for
impact insertion. Rather, OMG’s anchors require a
predrilled hole at least half an inch deeper than the anchor
embedment with a diameter matching the shank diameter
of the anchor. To fasten “termination bars to concrete or
masonry walls, [OMG’s] [z]inc [a]nchors are inserted into
predrilled holes,” and “then installed with a hammer,
which is used to drive the steel pin, thereby expanding the
zinc body in the predrilled hole.” J.A. 29. Expansion of the
zinc body against the interior of the pre-drilled hole fixes
the anchor in place, thereby fastening the termination bar
to the wall. Though nails and OMG’s anchors are both in-
stalled with the use of a hammer, unlike nails, OMG’s an-
chors are not driven by impact through the materials to be
fastened.
We further conclude that Commerce’s original decision
that OMG’s anchors are unambiguously within the scope
of the Orders is contrary to law and not supported by sub-
stantial evidence because Commerce failed to consider the
relevant question. Commerce based its conclusion that
OMG’s anchors are “nails . . . constructed of two or more
pieces” on the steel pin component of OMG’s anchors when
it should instead have considered OMG’s anchors as uni-
tary articles of commerce. See, e.g., J.A. 502 (“The galva-
nized pin is a steel nail with a body or attachment. By this
logic, OMG’s zinc anchors are, in fact, a steel nail with two
components.”). Commerce’s focus on the steel pin runs con-
trary to both its determination that OMG’s anchors should
be considered “a single item” and the Orders’ plain scope
language. J.A. 504. Indeed, the Orders cover “nails . . .
constructed of two or more pieces,” not fasteners of two or
more pieces, one of which is a nail. Countervailing Duty
Case: 19-2131 Document: 67 Page: 11 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 11
Order, 80 Fed. Reg. at 41,006; Antidumping Duty Order,
80 Fed. Reg. at 39,995.
During oral argument, the Government also asserted
that the Orders’ scope unambiguously includes OMG’s an-
chors because the tariff classification subheading covering
OMG’s anchors, Harmonized Tariff Schedule of the United
States (HTSUS) Subheading 7907.00.60.00, is specifically
included in the language of the Orders. See Oral Arg.
at 3:44–5:03, http://oralarguments.cafc.uscourts.gov/de-
fault.aspx?fl=19-2131.mp3. The Orders state: “Certain
steel nails subject to this order also may be classified under
HTSUS subheadings 7907.00.60.00, 8206.00.00.00 or other
HTSUS subheadings.” Countervailing Duty Order, 80 Fed.
Reg. at 41,007; Antidumping Duty Order, 80 Fed. Reg.
at 39,995. But contrary to the Government’s argument,
the Orders’ inclusion of “[c]ertain steel nails . . . classified
under HTSUS subheading[] 7907.00.60.00” does not sweep
in all products classified under subheading 7907.00.60.00,
which broadly covers “Other articles of zinc: Other.” The
plain language of the Orders limits covered products clas-
sified under subheading 7907.00.60.00 to “certain steel
nails.” Indeed, it is easy to imagine zinc products that are
not steel nails (such as a zinc key ring) that may nonethe-
less fall within subheading 7907.00.60.00. Classification of
OMG’s anchors under subheading 7907.00.60.00 does not
make OMG’s anchors nails any more than classification
under subheading 7907.00.60.00 would make a key ring a
nail. Accordingly, classification of OMG’s anchors under
subheading 7907.00.60.00 does not support the conclusion
that OMG’s anchors are unambiguously within the scope
of the Orders.
Though it is not dispositive in view of our analysis
above, we are compelled to address the Government’s ar-
gument that the CIT’s reliance on dictionary definitions to
determine the plain meaning of the word “nail” was im-
proper and impermissibly changed the scope of the Orders.
As a threshold matter, the CIT may consult dictionary
Case: 19-2131 Document: 67 Page: 12 Filed: 08/28/2020
12 OMG, INC. v. UNITED STATES
definitions to assist in determining the plain meaning of a
term in an antidumping or countervailing duty order. See
Smith Corona Corp. v. United States, 915 F.2d 683, 686
(Fed. Cir. 1990) (explaining that “the scope of a final order”
may be “clarified,” but not “changed in a way contrary to
its terms”); NEC Corp. v. Dep’t of Commerce,
74 F. Supp. 2d 1302, 1307 (Ct. Int’l Trade 1999) (“In deter-
mining the common meaning of a term, courts may and do
consult dictionaries, scientific authorities, and other relia-
ble sources of information including testimony of record.”
(citation omitted)); see also Meridian Prods., 851 F.3d
at 1381 n.7 (adopting dictionary definition of “unambigu-
ous” as the standard for determining whether the scope
terms of an antidumping or countervailing duty order are
unambiguous); cf. Medline Indus., Inc. v. United States,
62 F.3d 1407, 1409 (Fed. Cir. 1995) (explaining, in the tar-
iff classification context, that “[t]ariff terms are construed
in accordance with their common and popular meaning,
and in construing such terms the court may rely upon its
own understanding, dictionaries and other reliable
sources.” (citing Marubeni Am. Corp. v. United States,
35 F.3d 530 (Fed. Cir. 1994)); Mita Copystar Am. v. United
States, 21 F.3d 1079, 1082 (Fed. Cir. 1994) (“A court may
rely upon its own understanding of terms used, and may
consult standard lexicographic and scientific authorities, to
determine the common meaning of a tariff term.” (citations
omitted)). Indeed, the Government conceded as much at
oral argument. See Oral Arg. at 41:47–42:44.
Moreover, we do not agree that the CIT in this case
used dictionary definitions inconsistently with the Orders’
scope language. Though some of the dictionary definitions
the CIT considered are, indeed, narrower than the Orders’
scope language, the CIT did not rest its conclusion on these
differences. As the Government notes, the scope language
is broader than the definitions the CIT considered in that
the scope language includes nails with blunt or no points,
nails of any shaft diameter, and nails constructed of two or
Case: 19-2131 Document: 67 Page: 13 Filed: 08/28/2020
OMG, INC. v. UNITED STATES 13
more pieces. But the CIT did not conclude that OMG’s an-
chors are not nails because they are blunt, have a particu-
lar shaft diameter, or include two or more pieces. Rather,
consistent with our analysis above, the CIT held that
OMG’s anchors are not nails because the dictionary defini-
tions “define a nail as a fastener inserted by impact into
the materials to be fastened,” and “[t]he “merchandise at
issue is not inserted by impact into the materials to be fas-
tened.” OMG, 321 F. Supp. 3d at 1269. Accordingly, the
CIT did not err in relying on dictionary definitions.
Having concluded that OMG’s anchors are unambigu-
ously outside the scope of the Orders, that Commerce’s re-
mand decision is supported by substantial evidence, and
that Commerce’s original decision to the contrary is not
supported by substantial evidence, we need not address the
Government’s argument that the (k)(1) sources support
Commerce’s determination. See Meridian Prods., 890 F.3d
at 1277 (“If the scope is unambiguous, it governs.” (quoting
Meridian Prods., 851 F.3d at 1381)).
CONCLUSION
We have considered the parties’ remaining arguments
and do not find them persuasive. For the foregoing rea-
sons, we affirm the decision of the CIT.
AFFIRMED
|
01-03-2023
|
08-28-2020
|
https://www.courtlistener.com/api/rest/v3/opinions/1913592/
|
981 A.2d 923 (2009)
COM.
v.
JOHNSON, M.
No. 2698 EDA 2008.
Superior Court of Pennsylvania.
July 9, 2009.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1196990/
|
992 P.2d 545 (2000)
99 Wash.App. 338
John DOE, Respondent/Cross-Appellant,
v.
GONZAGA UNIVERSITY, a Washington Non-profit corporation, Julia M. Lynch, Roberta S. League, and Susan J. Kyle, Appellants/Cross-Respondents.
No. 43437-3-I.
Court of Appeals of Washington, Division 1.
January 31, 2000.
*549 Charles Wiggins and Kenneth Masters, Bainbridge Island, WA, for Appellant.
Lauren Siddoway, Spokane, for Respondents. *546 *547
*548 APPELWICK, J.
John Doe, a former student in Gonzaga University's department of education, sued Gonzaga and three of its staff members for spreading allegations that Doe had sexually assaulted another student, and for refusing to submit a moral character affidavit supporting Doe's application for teacher certification. The primary issues before us on appeal are whether any of the defendants can be liable for allegedly defamatory statements that Gonzaga employees made only to one another, and whether Gonzaga was entitled to judgment as a matter of law on Doe's claims for negligence, breach of educational contract, invasion of privacy, and violation of 42 U.S.C. § 1983. Holding in favor of Gonzaga on these issues, we reverse and remand for a new trial on the defamation claim only. We also reverse certain of the trial court's discovery and evidentiary rulings.
FACTS
On October 5, 1993, Roberta League, the certificate specialist in Gonzaga's school of education, overheard Gonzaga student Julia Lynch telling a friend the following:
[W]hen I was an RA, my resident, [Jane Doe], was in obvious physical pain. She couldn't eat, she couldn't sleep, and she was having blood in her urine, stomach cramps, she said it was a result of having sex with [John Doe], this man she has been seeing, and no one from the school bothered to ask her any questions or find out what really happened. They had a little bit of information that she was hurt and tucked it away.
The conversation concerned League because John Doe, a student in the school of education, was at that time student teaching. Soon afterward, League discussed the matter with Dr. Susan Kyle, the director of field experience for student teachers at Gonzaga.
Kyle and League decided that they needed to investigate the situation further. They were concerned that the allegations League had overheard about John Doe might affect *550 the dean's ability to submit an affidavit supporting Doe's application for teacher certification. Pursuant to RCW 28A.410.010, the Washington State Board of Education has promulgated rules governing the teacher certification process. See WAC 180-77, 180-78, 180-86, 180-87, and former 180-75. The rules require a designated official from a certification applicant's school to contact several members of the faculty who know or knew the applicant. The dean must then swear that he or she and the faculty members consulted have "no knowledge that the applicant has been convicted of any crime and [have] no knowledge that the applicant has a history of any serious behavioral problems." WAC 180-75-082(3).[1]
On October 14,1993, Kyle and League met with Lynch, According to written declarations that Kyle and League drafted in February 1994., which were admitted at trial, Lynch told them that Jane Doe had admitted to her that John Doe had sexually assaulted her three times, in late November or December, 1992. Lynch said further that Jane Doe had claimed that John Doe verbally coerced her into participating in `aberrant sexual behavior' with `other objects besides his penis,' and had urged her to engage in multiple partner sex. Lynch told League and Kyle that she had accompanied Jane Doe to the health center soon after the sexual assaults, and that the nurse had concluded that Jane Doe was date raped. At trial, however, Lynch testified that the behaviors Jane Doe had described to her were in fact normal, non-aberrant sexual activities, and that she did not remember telling. League and Kyle about foreign objects. Lynch further testified that she did not remember whether Jane Doe had told her that John Doe said he wanted to sleep with more than one person at a time, only that she told her that he wanted to sleep with both Jane Doe and another girlfriend of his. League admitted at trial that Lynch told her in the October 1993 meeting that Jane Doe had denied the rape allegations when Lynch spoke to Jane Doe in December 1992.
At the meeting with Kyle and League, Lynch agreed to approach Jane Doe. When she did, Jane Doe became angry and told Lynch that she did not want to pursue a rape charge.
Soon after conferring with Kyle, League telephoned Adelle Nore, a senior investigator with the Office of the Superintendent of Public Instruction (OSPI), which regulates teacher education programs. All together, Gonzaga personnel contacted Nore on at least six occasions in relation to the allegations against John Doe. During this initial conversation, League told Nore that a teacher education student had possibly date raped another student. League identified John Doe by name in a subsequent telephone call. Nore advised League to "talk to the girl who made the date rape charge in person." In her notes, Nore recorded that League had informed her that the "girl" was willing to come forward. Nore testified that her consistent understanding in her conversations with League and Kyle, was that the victim was credible and prepared to make a statement.
On October 28, 1993, Kyle met with Jane Doe, and told her about the date rape allegations. According to Kyle, Jane Doe would not comment on the relationship, and stated, "I guess I don't really know what rape is," and, "I promised [John Doe] I wouldn't tell. He made me promise." Jane Doe refused to make a formal statement.
Immediately after leaving Kyle's office, Jane Doe met with Professor William Sweeney. According to Sweeney, Jane Doe was "near hysteria" and weeping uncontrollably. Sweeney testified that Jane Doe told him during the meeting that John Doe had sexually assaulted her on three occasions, each time more and more violent and abusive, and that she had screamed and tried to get away. According to Sweeney, Jane Doe also said that John Doe repeatedly threatened her life, and that she did not believe the university could protect her from him.
*551 On January 26, 1994, Jane Doe met with Janet Burcalow, chair of the department of teacher education. Jane Doe tried to persuade Burcalow not to pursue the matter. But according to Burcalow, Jane Doe refused to say that nothing serious had happened in the relationship, and admitted being afraid of what might happen if John Doe found out she had talked about their relationship.
Cheryl Lepper, an instructor in the teacher education department, testified that Jane Doe had told her about the sexual assaults in the spring of 1993. According to Lepper, Jane Doe said that John Doe had restrained her and forced her to have sex, and had then stalked her after she broke up with him.
Some time in February 1994, Dr. Corrine McGuigan, the dean of the school of education, met with Kyle, Burcalow, League, and Sweeney. The dean concluded after the meeting that sufficient evidence of a serious behavioral problem precluded her from signing the affidavit supporting John Doe's application for teacher certification.
John Doe did not hear about Gonzaga's investigation into the date rape allegations until March 4, 1994. On that date, Doe was called into Dean McGuigan's office, where he was escorted to a private room, and left to read a letter that the dean had signed. The letter informed Doe that the dean would not give him the moral character affidavit required to support his application for certification to teach, due to the sexual assault allegations. Doe was not told who had made the allegations.
John Doe sued Jane Doe for defamation, and Gonzaga for defamation, negligence, breach of educational contract, and violation of 42 U.S.C. § 1983 for releasing his name to OSPI in violation of the Family Educational Rights and Privacy Act (FERPA). Two years later, John Doe sued Lynch, League and Kyle separately. The two actions were consolidated.
Jane Doe counter-claimed against John Doe for sexual assault. John Doe and Jane Doe settled their lawsuit in 1996, dismissing their claims against each other.
A jury trial was held between March 17 and April 1, 1997 on the remaining claims. In response to pretrial and trial motions, the trial court made several rulings that are at issue in this appeal. The court admitted several documents that Gonzaga personnel had prepared at the request of corporate counsel, over Gonzaga's objections that the documents were protected by attorney-client privilege. The court refused to admit the settlement agreement between John Doe and Jane Doe. The court also refused to admit the testimony of two witnesses who came forward after trial had begun; both witnesses would have testified that Jane Doe had told them that she had been sexually assaulted by a boyfriend. Gonzaga offered the evidence not to prove the truth of the allegation, but to impeach Jane Doe's testimony that she had not used the terms `rape' or `date rape.'
By the time of trial, Jane Doe had moved to North Carolina and was unwilling to attend. Instead, John Doe presented Jane Doe's testimony through a 1997 videotaped deposition, portions of which were shown to the jury. In both the videotaped testimony and an earlier 1995 deposition, Jane Doe essentially denied both that John Doe had sexually assaulted her, and that she had made most of the statements that Gonzaga personnel attributed to her. Specifically, in her videotaped testimony, Jane Doe testified that Lynch had "really blown things out of proportion," and that there were "wild things" and other falsehoods in Kyle's, Sweeney's, and Burcalow's testimonies. She denied speaking to Cheryl Lepper, using the word "rape," or being afraid for her life. Jane Doe testified that she had tried to dissuade Kyle and Burcalow from pursuing the allegations, but that the two women were "trying to get me to agree that this had happened," and were uninterested in hearing anything other than what they already believed. Jane Doe admitted, however, that some things had happened in her relationship with John Doe which had made her uncomfortable.
The jury returned a verdict for John Doe on all five theories of recovery. The jury awarded damages in the following amounts:
*552
Defamation $ 500,000
Invasion of privacy $ 100,000
Violation of FERPA $ 150,000
Punitive damages under FERPA $ 300,000
Breach of educational contract $ 55,000
Negligence $ 50,000
__________
Total $1,155,000
The jury was not instructed to segregate the damages, and did not specify which of Gonzaga's wrongful behaviors gave rise to which damages. Gonzaga now appeals.
DEFAMATION
A.Prins Instruction
The first issue before us is whether the trial court properly instructed the jury regarding the defamation claim. Gonzaga asked the court to instruct the jury that neither Gonzaga nor the individual defendants could be liable for communications made only among Gonzaga personnel. The court rejected the instruction. We hold that the court's decision was in error.
Jury instructions are sufficient if they permit each party to argue his or her theory of the case, are not misleading, and when read as a whole, properly inform the trier of fact of the applicable law. State v. Rice, 110 Wash.2d 577, 603, 757 P.2d 889 (1988).
Communications made only among corporate personnel are not published for the purposes of defamation. Prins v. Holland-North America Mortgage Co., 107 Wash. 206, 208, 181 P. 680 (1919). In Prins, the Court held that a letter from one officer of a corporation to another did not constitute publication because a corporation acting through its agents and employees "is but communicating with itself." 107 Wash. at 208, 181 P. 680.
Consistent with the Prins rule, Gonzaga University could not be liable for any defamatory communications made only among its employees. Here, the rule shields the individual defendants as well; after all, the corporation can speak to itself only through the individuals who work for it. Therefore, the trial court erred in rejecting Gonzaga's proposed Prins instruction.
Moreover, the court's error was not harmless. Testimony at trial focused primarily on the communications that Gonzaga personnel made only among themselves. The only allegedly defamatory statements that fall outside the Prins exception, are those made to Adelle Nore at OSPI. Because the error was not harmless, we reverse the defamation award and remand for a new trial on that claim. On remand, the trial court is instructed to give the jury a Prins instruction.
B. Actual Malice Instruction
Gonzaga also contests the trial court's defamation jury instructions on the ground that they misstate the standard for determining whether the communications at issue were protected by a qualified privilege. John Doe responds that the error was not properly preserved because Gonzaga's proposed instruction was deficient.
A claim that the trial court has applied an incorrect standard of proof under the First Amendment may be considered for the first time on appeal, because it is an issue affecting fundamental constitutional rights. Richmond v. Thompson, 130 Wash.2d 368, 385, 922 P.2d 1343 (1996). Therefore, even if Gonzaga's proposed instruction was deficient, it may raise the issue for the first time on appeal.
Here, Gonzaga had a qualified privilege to make the allegedly defamatory statements at issue. The WAC provision governing Gonzaga's role in the teacher certification process, gives Gonzaga a qualified privilege to contact several members of the faculty and staff about an applicant's potential behavioral problems. See WAC 180-79A-122(3). This same provision also implicitly grants Gonzaga a qualified privilege to seek guidance from OSPI regarding the certification process. If not for this qualified privilege, schools like Gonzaga would be discouraged from investigating claims of a future teacher's potential behavioral problems. The ultimate purpose of the qualified privilege is to protect school children.
When a defendant like Gonzaga has a qualified privilege to communicate potentially defamatory statements, the privilege may be lost by showing that the defendant *553 made the statements with actual malice. Parry v. George H. Brown & Assocs., Inc., 46 Wash.App. 193, 197, 730 P.2d 95 (1986); Story v. Shelter Bay Co., 52 Wash.App. 334, 342, 760 P.2d 368 (1988). Actual malice exists when a statement is made with knowledge of its falsity or with reckless disregard of whether it was false or not. Richmond v. Thompson, 130 Wash.2d 368, 376, 922 P.2d 1343 (1996). "[R]eckless disregard" is a subjective standard, and requires the plaintiff to prove that the speaker "acted with a high degree of awareness of [the statement's] probable falsity, or in fact entertained serious doubts as to [its] truth." Story, 52 Wash.App. at 343, 760 P.2d 368. A plaintiff cannot show actual malice by merely showing that a defendant unreasonably failed to investigate the truth of a statement. See Parry v. George H. Brown & Assocs., Inc., 46 Wash.App. 193, 197, 730 P.2d 95 (1986). But when a speaker does in fact conduct an investigation and the investigation does not support the false statement or brings to the speaker's attention facts that rebut the false statement, that is evidence from which a jury can infer reckless disregard. Herron v. KING Broadcasting Co., 112 Wash.2d 762, 776 P.2d 98 (1989).
Here, the court correctly instructed the jury that the statements at issue were protected by a qualified privilege, and that John Doe had to prove by clear and convincing evidence that Gonzaga had made the statements with actual malice. The jury was further instructed that, "abuse of privilege occurs if the maker of the allegedly false and defamatory statement knew, at the time the statement was made, that the statement was false, or acted with reckless disregard as to the truth or falsity of the statement." But the court did not define "reckless disregard" for the jury. Gonzaga argues that the court's instruction is deficient because it failed to make clear to the jury that "reckless disregard" is a subjective standard. Gonzaga contends that the jury could have incorrectly inferred that an unreasonable failure to investigate the truth of the date rape allegations was evidence of recklessness.
Gonzaga's argument is well taken. On remand, the court is directed to instruct the jury regarding the subjective nature of the "reckless disregard" standard.
SECONDARY CLAIMS
Gonzaga next argues that the trial court erred in failing to grant it a directed verdict on the remaining claims of negligence, invasion of privacy, violation of 42 U.S.C. § 1983, and breach of educational contract. In reviewing a trial court's decision to deny a motion for directed verdict, we apply the same standard as the trial court. A directed verdict is appropriate if, when viewing the material evidence most favorable to the nonmoving party, the court can say, as a matter of law, that there is no substantial evidence or reasonable inferences to sustain a verdict for the nonmoving party. Industrial Indem. Co. of the Northwest v. Kallevig, 114 Wash.2d 907, 915-16, 792 P.2d 520 (1990).
A. Negligence
Gonzaga asserts it is immune from liability for negligent reporting about John Doe, pursuant to RCW 4.24.510. We agree with John Doe, that this claim is an affirmative defense which may not be raised for the first time on appeal. We do not decide that the defense does or does not have application to these facts.
Gonzaga next argues that it cannot be liable for negligence in this case because it had no duty to John Doe to exercise reasonable care in collecting information regarding his potential behavioral problems. John Doe responds that we should create or extend such a duty. There are no cases interpreting the WAC provision that governs Gonzaga's role in the teacher certification process, to guide us in addressing this issue.
The WAC provision authorizing Gonzaga to collect information regarding a teacher certification candidate's potential behavioral problems does not expressly impose a duty on the university to investigate formally any unfavorable allegations that arise. See WAC 180-75-082. To the contrary, WAC 180-75-082 requires only that a designated official of an applicant's school contact several faculty members who know or knew *554 the applicant. Only if both the school official and the faculty members consulted have "no knowledge that the applicant has a history of any serious behavioral problems" may the dean sign an affidavit under penalty of perjury supporting the candidate's application. WAC 180-75-082.
In arguing that Gonzaga owed him a duty to investigate, John Doe analogizes the present case to several cases that address Department of Social and Health Services (DSHS) caseworkers' duties in reporting child abuse allegations. In those cases, Washington courts held that caseworkers have a duty to exercise reasonable care when investigating child abuse allegations. But the caseworker cases are distinguishable because a statute and administrative regulations impose a duty to investigate on caseworkers. See Lesley v. Department of Soc. and Health Servs., 83 Wash.App. 263, 273, 921 P.2d 1066 (1996) ("[A] specific statute provides that DSHS caseworkers have a duty to investigate. RCW 26.44.050. A cause of action for negligent investigation thus exists against DSHS caseworkers."); Yonker v. Department of Soc: and Health Servs., 85 Wash.App. 71, 81-82, 930 P.2d 958 (1997) (RCW 26.44.050 imposed duty to investigate reports of possible occurrence of child abuse); Dunning v. Pacerelli, 63 Wash.App. 232, 239, 818 P.2d 34 (1991) (DSHS caseworkers potentially liable for negligent investigation into allegations of child abuse).
In the alternative, John Doe contends that Gonzaga did undertake an investigation in this case, and that once it began the investigation, it owed a duty to Doe not to be negligent. But the cases that Doe cites in support of this argument are not on point. In those cases, the courts held that a person who chooses to assist another, even gratuitously, inducing reliance on that assistance, may be liable for failure to exercise reasonable care. See Alston v. Blythe, 88 Wash. App. 26, 943 P.2d 692 (1997); Roth v. Kay, 35 Wash.App. 1, 664 P.2d 1299 (1983); Sheridan v. Aetna Cas. & Sur. Co., 3 Wash.2d 423, 100 P.2d 1024 (1940). These principles are inapplicable here because Gonzaga did not undertake to render aid or warn John Doe.
WAC 180-75-082 requires the applicant for certification to submit an affidavit about the applicant's criminal history, serious behavioral problems and past teaching history. The applicant must also submit an affidavit of good moral character and personal fitness from the designated official at the school of education. The regulation provides that the applicant must submit a statement, as opposed to an affidavit, if it is not possible for the school official to execute an affidavit with the required content. In that statement, the applicant must explain why it is impossible or impractical to obtain the affidavit. In all respects the only duty imposed is on the applicant.
The affidavit from the school of education contemplates signature under penalty of perjury. The school official must attest to contacting "several faculty" who know or knew the applicant. The regulation does not require contacting all faculty who know or knew the applicant, nor those who know or knew the applicant best, nor even anyone who knew the applicant most recently. The scope of the effort is up to the school.
The affidavit, if filed, must indicate that the affiant and the several faculty contacted have no knowledge that the applicant has not been "convicted of any crime," nor that the applicant has "a history of any serious behavioral problems." The regulation provides no further definition of "crime," "serious behavioral problems" or "knowledge." The answers from the faculty may be wholly subjective as a result. Any consulted faculty member's belief, based on rumor or personal observation that an applicant had a serious behavioral problem, is enough to prevent the execution of the school's affidavit.
Clearly, this regulation does not contemplate the kind of investigation undertaken by child protective services.
Schools of education have a vested interest in seeing their graduates certificated. The inability or unwillingness of the school to provide the affidavit is evidence of concerns that overcome this vested interest. These concerns about criminal conduct and serious behavioral problems are issues that OSPI should hear about and should investigate. It is in the interest of school children and the *555 public to have such reporting by the schools of education and investigation by OSPI.
We find no basis for the creation of a new duty on the part of the school of education to conduct an independent investigation. That is a legislative prerogative that we will not exercise. The judgment on the negligence claim is therefore reversed.
B. Invasion of Privacy
Gonzaga next argues that it is entitled to judgment as a matter of law on the invasion of privacy claim. We hold that the facts here do not support a claim for invasion of privacy.
John Doe's invasion of privacy claim is based on Restatement (2d) of Torts § 652B (1977): "One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person." The common law right to privacy exists in Washington, and individuals may bring a cause of action for invasion of that right. Reid v. Pierce County, 136 Wash.2d 195, 206, 961 P.2d 333 (1998).
The evidence here is insufficient to support a claim for invasion of privacy. Again, WAC 180-75-082 authorizes officials from a teacher certificate applicant's school to contact several faculty members regarding the candidate's potential behavioral problems. The provision also implicitly authorizes school officials to consult with OSPI regarding their concerns about particular students. In this process, the school personnel must be able to discuss highly personal matters, which may reasonably be offensive to the certificate candidate in another context. But the candidate waives his right to object to those discussions on the grounds of invasion of privacy once he identifies himself as a potential candidate for teacher certification. Gonzaga did not invade John Doe's privacy to any greater degree than what the WAC provision contemplates. Therefore, we reverse the invasion of privacy judgment.
C. 42 U.S.C. § 1983
Gonzaga next argues that the court erred in refusing to grant it a directed verdict on the 42 U.S.C. § 1983 claim. Gonzaga argues that it cannot be liable under 42 U.S.C. § 1983 because the federal law at issue, Family Educational Rights and Privacy Act (FERPA), does not create any right or privilege that private individuals can enforce under § 1983. Again, we agree.
The Federal Civil Rights Act, 42 U.S.C. § 1983, provides for a private cause of action when a state violates certain federal statutory rights. See Maine v. Thiboutot, 448 U.S. 1, 4, 100 S. Ct. 2502, 2504, 65 L. Ed. 2d 555 (1980). Section 1983 provides a remedy for violation of federally conferred rights, not simply violation of federal law. See Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 509, 110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990).
A court must ask three questions in deciding whether a federal statute gives rise to an enforceable right under § 1983: (1) whether the provision in question was intended to benefit the plaintiff; (2) whether the right protected by the statute is so "vague and amorphous" that its enforcement would strain judicial competence; and (3) whether the statute imposes a binding obligation on the state. Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498, 509, 110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990); Blessing v. Freestone, 520 U.S. 329, 117 S. Ct. 1353, 137 L. Ed. 2d 569 (1997).
The question before us is whether FERPA creates a federal right that individuals can enforce under § 1983. U.S. Supreme Court case law provides guidance in answering this question. In Wright v. City of Roanoke Redev. and Hous. Auth., 479 U.S. 418, 107 S. Ct. 766, 93 L. Ed. 2d 781 (1987), the Court considered whether the Brooke Amendment gave rise to individual rights enforceable under § 1983. The Brooke Amendment and its implementing regulations imposed a ceiling on the rent which public housing projects could charge low income tenants. The regulations defined rent to include charges to tenants for " `reasonable amounts of utilities,'" and defined *556 how that amount would be determined. Wright, 479 U.S. at 420-21 n. 3,107 S. Ct. 766 quoting 24 CFR § 860.403 (1982). The Court held that the law was intended to benefit tenants, who could therefore sue to enforce the law under § 1983. Wright, 479 U.S. at 432, 107 S. Ct. 766. In Wilder v. Virginia Hosp. Ass'n, 496 U.S. 498,110 S. Ct. 2510, 110 L. Ed. 2d 455 (1990), the Court considered whether the Boren Amendment to the Medicaid Act created individual rights enforceable under § 1983. The Boren Amendment required the states to reimburse Medicaid providers according to rates that were "`reasonable and adequate'" to meet the costs of "`efficiently and economically operated facilities.' "Wilder, 496 U.S. at 503,110 S. Ct. 2510, quoting 42 U.S.C. § 1396 (1982). Again the Court held that the law was intended to benefit providers seeking reimbursement, who could therefore challenge the state's rates by suing under § 1983. In both Wilder and Wright, the laws at issue were enforceable under § 1983 because they were intended to provide particular and well-defined benefits to the plaintiffs.
In two later cases, however, the Court held that certain federal laws did not confer substantive rights on the plaintiffs. In Suter v. Artist M., 503 U.S. 347, 112 S. Ct. 1360, 118 L. Ed. 2d 1 (1992), the Court considered whether private individuals had the right to enforce by suit a provision of the Adoption Assistance and Child Welfare Act of 1980. The act required participating states to submit a plan to the Secretary of Health and Human Services. The plan had to provide that the state would make "reasonable efforts" to avoid removing children from their homes, and to return children to their homes. Suter, 503 U.S. at 351, 112 S. Ct. 1360. The Court held that the act did not create an enforceable right under § 1983 because the term "reasonable efforts" imposed "only a rather generalized duty on the State, to be enforced not by private individuals, but by the Secretary." Suter, 503 U.S. at 363, 112 S. Ct. 1360. In Blessing v. Freestone, 520 U.S. 329, 117 S. Ct. 1353, 137 L. Ed. 2d 569 (1997), custodial parents whose children were eligible to receive child support services from the state pursuant to Title IV-D of the Social Security Act, sued the director of Arizona's child support agency under § 1983. The act required participating states to certify that they would operate a child support enforcement program in "substantial compliance" with the act, and would submit a detailed plan to the Secretary of Health and Human Services. The Court held that the act did not create individual rights enforceable under § 1983 because:
[f]ar from creating an individual entitlement to services, the [`substantial compliance'] standard is simply a yardstick for the Secretary to measure the system-wide performance of a State's Title IV-D program. Thus, the Secretary must look to the aggregate services provided by the State, not to whether the needs of any particular person have been satisfied.
Blessing, 520 U.S. at 343,117 S. Ct. 1353. In both Suter and Blessing, the federal laws at issue did not create individual substantive rights enforceable against the states because they were not intended to confer particular benefits on the plaintiffs.
The case currently before us is more akin to Suter and Blessing than to Wilder and Wright. The federal law at issue, FERPA, provides that "[n]o funds shall be made available under any applicable program to any educational agency or institution which has a policy or practice of permitting the release of education records ... or personally identifiable information contained therein ... of students without the written consent of their parents." 20 U.S.C. § 1232g(b). Like the federal law at issue in Blessing, FERPA requires participating schools to have in place a system-wide plan; the law is not intended to ensure that "the needs of any particular person have been satisfied." Blessing, 520 U.S. at 343, 117 S. Ct. 1353. We hold FERPA does not create individual rights privately enforceable under 42 U.S.C. § 1983. Therefore, we reverse the 42 U.S.C. § 1983 judgment.
Furthermore, even if FERPA did create individual rights enforceable under § 1983, we would nonetheless hold that a teacher candidate waives those rights when he or she applies for teacher certification. *557 WAC 180-75-082 requires the candidate to file an affidavit from the school of education as a precondition for the state's award of a teacher certificate. In the affidavit, the dean must certify that he or she and several faculty members who know the applicant have "no knowledge that the applicant has a history of any serious behavioral problems." WAC 180-75-082. Moreover, the WAC provision implicitly authorizes school officials to contact OSPI directly with questions regarding the certification process. This process necessarily entitles the school to release personally identifiable information to OSPI. Gonzaga's actions did not exceed its authority in this case.
D. Breach of Contract
Gonzaga finally argues that it is entitled to judgment as a matter of law on the breach of contract claim. Gonzaga argues that any implied agreement between John Doe and Gonzaga does not apply to moral character affidavits. Once again, we agree.
In its student handbook, Gonzaga states that the admission of a student to the university constitutes an "agreement of mutual responsibility." The "student's obligation is to accept the published policies of the University and to act in a manner consistent with these policies." In return, "the University's responsibility is to provide an environment in which the student's educational goals may be achieved." In the same paragraph, Gonzaga further states that it "recognizes its obligation to provide students with an opportunity to be heard in matters affecting their welfare." In another section, the handbook also specifies that the university will follow certain notice and hearing procedures when disciplining students who misbehave. John Doe's theory at trial was that Gonzaga breached this "agreement" by failing to discuss the sexual assault allegations with him before reaching a final decision not to issue him an affidavit.
Without addressing whether the student handbook creates any enforceable substantive or procedural rights with respect to purely internal issues, we hold that the student handbook does not confer substantive or procedural rights with respect to WAC 180-75-082(3), which governs Gonzaga's responsibilities to the state in regard to the moral character affidavit of applicants for teacher certification. Therefore, Gonzaga is entitled to judgment on the contract claim as a matter of law, and we reverse the award for breach of contract.
Even if we did not reach this result, we would nonetheless strike the contract damages as duplicative. The jury was instructed to consider only economic injury in deciding how much compensation to award on the breach of contract claim. The only economic injury that John Doe alleged was the injury to his career resulting from Gonzaga's release of his name to OSPI, and its decision not to sign the moral character affidavit. These injuries flowed directly from the allegedly defamatory communications. Therefore, the contract damages duplicate the defamation damages.
EVIDENTIARY AND DISCOVERY ISSUES
A. Work Product Documents
Gonzaga argues that the trial court abused its discretion in ordering it to disclose, and admitting into evidence, four documents that Gonzaga personnel prepared at the direction of corporate counsel. In his cross-appeal, John Doe argues that the court erred in refusing to impose sanctions on Gonzaga for its failure to produce one of those documents.
1. Discoverability
John Doe sought to discover four documents that certain Gonzaga employees had prepared in anticipation of litigation in this case. Of greatest concern here is a six-page chronology that Roberta League and Susan Kyle prepared, which listed relevant dates and the events that occurred on those dates. Gonzaga argued below that the chronology was not discoverable because it was protected by attorney-client privilege. The trial court disagreed, characterizing the document as work product. The court allowed discovery of the document, finding that John Doe had substantial need for it and could not obtain the information that it contained in *558 any other way. Gonzaga argues again on appeal that the documents are privileged.
Documents prepared by a client or his or her attorney "in anticipation of litigation" are characterized as work product. CR 26(b)(4). Work product is not discoverable unless the party seeking discovery can show that he "has substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means." CR 26(b)(4). John Doe concedes that the four document are work product. We cannot say that the trial court abused its discretion in determining the issues of "substantial need" or "undue hardship." We therefore affirm these rulings by the trial court.
Because John Doe now is familiar with the documents, and can obtain the information they contain by deposing the relevant witnesses, he cannot show substantial need for them on remand. Gonzaga is not required to produce them on remand, and the documents remain privileged and inadmissible.
2. Discovery Sanctions
In his cross-appeal, John Doe argues that the trial court should have imposed sanctions on Gonzaga for failing to produce the chronology in response to an interrogatory. We review sanctions decisions for abuse of discretion. Washington State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wash.2d 299, 338, 858 P.2d 1054 (1993). We hold that the trial court abused its discretion here.
Upon completion of early discovery in this case, John Doe pieced together an initial chronology of Gonzaga's internal meetings and communications regarding the sexual abuse allegations. John Doe then provided Gonzaga with this chronology, along with an interrogatory asking Gonzaga to identify any communications and meetings not reflected in the chronology. Gonzaga did not answer the interrogatory, claiming that it was "unduly burdensome [and] oppressive." Gonzaga assured John Doe that he already had all the information he needed to answer the interrogatory. Several years later, through an independent motion, John Doe's counsel finally received the chronology at issue. John Doe claims the chronology contained numerous references to meetings that Gonzaga had not previously disclosed, requiring him to re-depose two witnesses. John Doe filed a CR 26(g) motion for sanctions. The trial court found that John Doe had suffered no harm because he ultimately obtained possession of the chronology; the court therefore denied the motion for sanctions.
The relevant rule here is CR 26(g), which requires an attorney to respond to a discovery request after making "reasonable inquiry," and to certify that the response is: (1) consistent with the rules, (2) not interposed for any improper purpose, and (3) not unreasonable or unduly burdensome or expensive. Whether an attorney has made a reasonable inquiry is to be judged by an objective standard. Fisons, 122 Wash.2d at 343, 858 P.2d 1054. The purpose of CR 26(g) is to encourage a "spirit of cooperation and forthrightness during the discovery process." Fisons, 122 Wash.2d at 342, 858 P.2d 1054. Sanctions are mandatory if the court finds that a party violated the rule. Fisons, 122 Wash.2d at 346, 858 P.2d 1054.
Here, the record reflects that Gonzaga responded to the interrogatory without making reasonable inquiry. Gonzaga's counsel could have responded to the interrogatory by asking his clients to provide a chronology of relevant events based on their own knowledge. After all, Roberta League had already prepared a chronology for Gonzaga. Gonzaga's response was also misleading. Relying on Gonzaga's assurances that he already had all the relevant information, John Doe did not move to compel a response. Gonzaga's response was inconsistent with the spirit and intent of the rules. The court therefore abused its discretion in failing to impose a sanction, and is ordered to impose an appropriate sanction on remand.
In determining an appropriate sanction, the trial court has wide latitude. Fisons, 122 Wash.2d at 356, 858 P.2d 1054. The court must impose the least severe sanction *559 that will be adequate to serve its purposes, but the sanction should not be so minimal that it undermines those purposes. Fisons, 122 Wash.2d at 356, 858 P.2d 1054. The purposes of sanctions are to deter, to punish, to compensate and to educate. Fisons, 122 Wash.2d at 356, 858 P.2d 1054.
B. Settlement Agreement
Gonzaga next argues that the trial court abused its discretion in refusing to admit the settlement agreement between John Doe and Jane Doe. Gonzaga claims the settlement agreement is relevant in determining the credibility of Jane Doe's testimony. We agree.
A trial court's decision to admit or exclude evidence is reviewed for abuse of discretion. State v. Lynch, 58 Wash.App. 83, 792 P.2d 167 (1990).
According to ER 408, evidence of a settlement agreement is not admissible to prove whether a party is liable on a particular claim. But the rule "does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness." ER 408. The purpose of the rule is to encourage parties to make whatever admissions may lead to a successful compromise without sacrificing portions of their case in the event these efforts fail. Comment ER 408.
Here, John Doe's and Jane Doe's settlement agreement and release provides that John Doe may resume his lawsuit against Jane Doe if any new evidence surfaces suggesting that Jane Doe has accused him of sexual assault. The agreement therefore is probative of the truth of Jane Doe's claims in her videotaped testimony that John Doe never assaulted her. Furthermore, Gonzaga did not offer the settlement agreement as a means of proving Jane Doe's liability; she was no longer a party to the lawsuit. ER 408 allows admission of a settlement agreement for Gonzaga's intended purpose to prove Jane Doe's bias. Therefore, the trial court abused its discretion in excluding the settlement agreement. The court is instructed to admit evidence of the agreement on remand.
C. Impeachment Evidence
Gonzaga argues that the trial court abused its discretion in refusing under ER613 to allow Gonzaga to admit the testimony of two witnesses who were disclosed late into the trial. Gonzaga offered the testimony for the purposes of proving that Jane Doe had made prior statements inconsistent with her deposition testimony at trial. However, we need not reach this issue in light of our decision to remand the case.
CONCLUSION
We reverse and remand for a new trial on the defamation claim. On remand, the trial court must include a Prins jury instruction. The court must also define "reckless disregard" for the jury in a manner that makes clear the subjective nature of that standard. We reverse the negligence, invasion of privacy, 42 U.S.C. § 1983, and breach of contract judgments. On remand, Gonzaga need not produce the four work product documents. The settlement agreement between Jane Doe and John Doe, and the testimony of Ashlock and Green, are admissible.
REVERSED and REMANDED.
AGID, A.C.J., and ELLINGTON, J., concur.
NOTES
[1] WAC 180-75-082 was repealed, effective March 8, 1997. It was replaced by WAC 180-79A-155, which similarly requires a teacher candidate to submit a moral character affidavit from the school of education in support of the application for certification. The change in the law does not affect the outcome in this case.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2896442/
|
NO. 07-08-0055-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL C
NOVEMBER 13, 2008
______________________________
CESAR ANGEL DURAN,
Appellant
v.
THE STATE OF TEXAS,
Appellee
_________________________________
FROM THE 181ST DISTRICT COURT OF RANDALL COUNTY;
NO. 16917-B; HON. JOHN B. BOARD, PRESIDING
_______________________________
Memorandum Opinion
_______________________________
Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.
Cesar Angel Duran was convicted on four counts of indecency with a child and two
counts of aggravated sexual assault. He seeks reversal by contending that the trial court
erred in 1) failing to instruct the jury that “it was improper for the Prosecutor to, in closing
argument at the guilt/innocence phase, characterize the Defendant’s non-testimonial
demeanor during the trial in a way that would lead to an inference of guilt,” and 2) failing
to sustain his objection to the State’s reference to his silence during closing argument in
the punishment phase. We affirm the judgment.
Issue 1 - Comment on Demeanor
With regard to the failure to properly instruct the jury regarding consideration of
appellant’s non-testimonial demeanor, the record illustrates that appellant objected to the
argument, which objection the trial court sustained. Then, when appellant asked “for an
instruction,” the one given by the court tended to contradict its decision to sustain the
objection. Yet, appellant did not object to the instruction. Consequently, his complaint was
waived. See Cockrell v. State, 933 S.W.2d 73, 89 (Tex. Crim. App. 1996) (holding that a
litigant must object to preserve the alleged error for review). At the very least, an objection
not only would have given the trial court opportunity to address the inconsistency but it also
would have helped clarify or explain what it actually intended. Thus, the issue is waived.
Issue 2 - Improper Jury Argument
Appellant next argues that the trial court erred in “allowing” the State to refer to
appellant’s silence during its closing. While appellant objected to the utterance, he did not
do so until the State had finished its argument. Yet, an objection must be asserted
contemporaneously with or as soon as possible after the wrong occurs; if it is not, then the
complaint is waived. Starks v. State, 252 S.W.3d 704, 706 (Tex. App.–Amarillo 2008, no
pet.); accord, Cunningham v. State, 848 S.W.2d 898, 905 (Tex. App.–Corpus Christi 1993,
pet. ref’d) (stating that an objection made after the argument is untimely). Because
appellant waited until the end of the State’s argument to voice his objection, he waived the
purported error. The issue is overruled.
2
Accordingly, the judgment of the trial court is affirmed.
. Per Curiam
Do not publish.
3
|
01-03-2023
|
09-08-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1874610/
|
288 Wis. 2d 460 (2005)
706 N.W.2d 702
2005 WI App 254
STATE v. VOIGT.[]
No. 2004AP002706 CR.
Court of Appeals of Wisconsin.
October 4, 2005.
Unpublished Opinion. Affirmed.
NOTES
[] Petition to review filed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/3348777/
|
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] Memorandum of Decision
The issue in this administrative appeal is whether the hearing officer for the defendant Connecticut Department of Motor Vehicles (DMV) properly denied a protest filed by four automobile dealers to the decision of defendant General Motors Corporation (GMC) to establish a GMC light truck dealership in Hamden. Argument of the appeal took place on September 26, 2001. For the reasons stated below, the court dismisses the appeal.
BACKGROUND OF THE CASE
Sections 14-133r through 14-133ee of the General Statutes govern franchising relationships between manufacturers and dealers of motor vehicles. Together, these provisions "recognize the need for intra-brand competition. " McLaughlin Ford, Inc. v. Ford Motor Co.,192 Conn. 558, 569 n. 14, 473 A.2d 1185 (1984). The statutes use the concept of "relevant market area" as "the area within a radius of fourteen miles around an existing dealer or the area of responsibility defined in a franchise, whichever is greater." General Statutes § 14-133r (14). The act "does not guarantee an exclusive right to operate a dealership within a fourteen mile radius, but rather requires the commissioner of motor vehicles to demonstrate good cause, as defined in the statute, for denying the addition or relocation of a dealer in the objecting dealer's "relevant market area." McLaughlin Ford, Inc. v. FordMotor Co., supra. According to General Statutes § 42-133dd (c), "[i]n determining whether good cause has been established for not entering into CT Page 14065 a franchise establishing a new dealer or relocating an existing dealer for the same line make, the commissioner shall take into consideration the existing circumstances, including, but not limited to" eleven factors enumerated in the statute.1
On or about March 23, 2000, pursuant to General Statutes § 42-133dd
(a),2 GMC notified DMV and GMC light truck dealers within the relevant market area of its intention to establish a GMC light truck dealership at defendant Mauro Motors, Inc., which was an existing dealership located at 1635 Dixwell Avenue in Hamden. Four dealers, the plaintiffs here, filed protests pursuant to § 42-133dd (a): Mario D'Addario Buick, Inc., d.b.a. Mario D'Addario Buick-Nissan-GMC Truck, Frank Buick-GMC Truck, Inc., Wallingford Auto Company d.b.a. Wallingford Buick-GMC, and Zee Buick-GMC Truck, Inc.
DMV held an administrative hearing pursuant to § 14-133dd (a) on September 6, 7, and 8, 2000. The hearing officer issued a decision on September 18, 2000 denying the protest. The decision applied the statutory criteria of General Statutes § 42-133dd (c) and concluded that good cause did not exist for denying the establishment of a GMC light truck dealership in Hamden. This appeal followed.
DISCUSSION
I
At the outset, the defendants attempt to dismiss the appeal for mootness and laches on the ground that the plaintiffs failed to request a stay of DMV's decision, thereby allowing Mauro Motors to open the contested GMC light truck dealership in Hamden and continue to operate it. The court rejects this attempt. Parties are not required to move for a stay of administrative appeals and do not automatically waive their appeal rights if they chose not to do so. See General Statutes § 4-183
(f). By deciding not to seek a stay, the plaintiffs ran the risk of losing business to a new GMC light truck dealership during the pendency of this appeal. The plaintiffs, however, can still obtain practical relief if the court reverses the DMV decision and effectively prevents Mauro Motors from doing such business in the future. Accordingly, this appeal is not moot. See Loisel v. Rowe, 233 Conn. 370, 378, 660 A.2d 323
(1995). Further, the plaintiffs did not delay in prosecuting this appeal. Although Mauro Motors, as it alleges, may have expended considerable money and time in establishing its new dealership during the pendency of this case, it did so at its own peril. Therefore, the plaintiffs are not guilty of laches. See Cummings v. Tripp, 204 Conn. 67,88, 527 A.2d 230 (1987). CT Page 14066
II
The plaintiffs first contend that DMV abused its discretion by failing to require discovery of various documents requested from General Motors. The plaintiffs initially made a request of GMC for written documents in April, 2000. In May, 2000, the plaintiffs filed a motion for an order to have DMV compel GMC to produce the documents.
At a prehearing conference in June, 2000, however, the parties did not raise any discovery issues and instead "expressed confidence that these issues could be resolved outside the hearing process." (Return of Record ("ROR"), Item 34 (Hearing Officer's Decision), p. 2.) The parties did "resolve the vast majority of the disputes," but the plaintiffs wrote DMV a letter on June 30, 2000 requesting another conference because some documents remained undisclosed. (Amended Return of Record ("Amended ROR"), Item 27.) In response, GMC wrote the hearing officer that the remaining discovery requests were unreasonable. (Amended ROR, Item 31.)
On or about August 1, 2000, the plaintiffs filed a second motion for an order with DMV. The motion mentioned the outstanding document production requests, but specifically requested only that DMV order GMC to produce certain persons for depositions. (Amended ROR, Item 33.) The hearing officer construed the motion as one requesting her to "order the Respondent to produce certain persons for depositions," and denied the motion on August 2, 2000. (Amended ROR, Item 33.) The plaintiffs did not renew the matter at the hearing.
Although the Uniform Administrative Procedure Act ("UAPA") allows each party in a contested case "the opportunity . . . to inspect and copy relevant and material records, papers and documents not in the possession of the party or such agency, except as otherwise provided by federal law or any other provision of the general statutes . . . General Statutes § 4-177c (a)(1), there was no abuse of discretion by the hearing officer in this case. The plaintiffs' August 1, 2000 motion for an order is confusing and unclear. The hearing officer reasonably could have concluded that the motion did not request an order for production of documents. If the plaintiffs did not intend to limit the motion in that regard, they should have renewed the motion or otherwise pursued the matter once the hearing officer construed the motion as only seeking an order concerning depositions. They did not. See Dragan v. ConnecticutMedical Examining Board, 223 Conn. 618, 632-35, 613 A.2d 739 (1992). The record reveals that the defendants disclosed the vast majority of documents and the record does not reveal how the plaintiffs were harmed by the absence of documents that the defendants failed to disclose. For all these reasons, the plaintiffs cannot prevail on this claim. CT Page 14067
III
The principal issue concerns the hearing officer's approach to the statutory concept of "relevant market area." ("RMA") Judicial review of an administrative agency's action is governed by the UAPA. General Statutes § 4-166 et seq. The scope of that review is very restricted. See MacDermid, Inc. v. Department of EnvironmentalProtection, 257 Conn. 128, 136-37, ___ A.2d ___ (2001). Section 4-183 (j) of the General Statutes provides as follows:
The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) In violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
"It is fundamental that a plaintiff has the burden of proving that the [agency], on the facts before [it], acted contrary to law and in abuse of [its] discretion (Internal quotation marks omitted). Murphy v.Commissioner of Motor Vehicles, 254 Conn. 333, 343, 757 A.2d 561 (2000).
At the hearing, the plaintiffs proposed using a "combined RMA," which consisted of the combined area encompassed by drawing fourteen mile rings around each of the protesting GMC dealers. Although this proposal had the advantage of examining an area around an existing dealer," as General Statutes § 14-133r (14) requires, there is no particular support for combining several RMAs when there are several protesting dealerships as opposed to evaluating the RMA for each protesting dealer separately. Employment of the plaintiffs' proposal led, somewhat impractically, to the inclusion of dealers that were over twenty miles from the proposed Hamden location and over forty miles from each other. (ROR, Item 34, p. 2, ¶ 2.) The hearing officer accordingly concluded that using the combined RMA was "too expansive to be considered relevant to the establishment of a franchise in Hamden. " (ROR, Item 34, p. 11, § IIIA.) CT Page 14068
Initially, the hearing officer identified the relevant market area as "a radius of fourteen (14) miles around the proposed Hamden dealership. " (ROR, Item 34, p. 2, ¶ 1.) This definition, to be sure, was in direct conflict with the statutory definition of an RMA as a fourteen mile radius "around an existing dealer." General Statutes § 42-133r (14). The ultimate question, however, is whether this unauthorized definition affected "substantial rights." General Statutes § 4-183 (j).
Of the eleven criteria enumerated in § 42-133dd (c), only six — numbers (1), (2), (3), (5), (7), and (10) — expressly employ the "relevant market area" standard. See note 1 supra. The parties agree that criteria number (7) does not apply to this case. An examination of the hearing officer's evaluation of criteria number (2) reveals that, despite initially misdefining "relevant market area" in terms of the proposed dealership, the hearing officer expressly examined the "combined RMA." (ROR, Item 34, p. 6, ¶¶ 24., 25.) In evaluating factor number (3), the hearing officer used a standard similar to the combined RMA, which she labeled the "vicinity of each of the other GMC dealers in the relevant market area." (ROR, Item 34, p. 6 ¶ 27.) Although the hearing officer also examined the Hamden RMA under the latter two factors, the hearing officer found no significant difference in the results under either standard. (ROR, Item 34, p. 6, ¶¶ 24, 25, 26, 27.) Thus no harm to the plaintiffs' case resulted from any reliance on the Hamden RMA for these two factors.
For the remaining factors — (1), (5), and (10) — the hearing officer actually examined evidence affecting some or all of the four protesting existing dealers and thus, in effect, looked at least at the centers of the market area as the plaintiffs defined it.3 The plaintiffs' case thus reduces to the proposition that the hearing officer did not expressly make findings for three of the ten criteria concerning the automobile market in the outer part of the combined RMA. The court finds that this approach did not significantly affect the plaintiffs' case. The automobile market towards the perimeter of the combined RMA was necessarily less relevant to the protest than the market between the existing and the proposed dealers, which the hearing officer examined in great detail. Further, the hearing officer was not required to put any special weight on the three criteria in question, or even all ten criteria, but rather had to "take into consideration the existing circumstances, including but not limited to" all ten relevant criteria. General Statutes § 42-133dd (c). Finally, the plaintiffs, who bear the burden of proof in this appeal, have not shown how the hearing officer's failure to consider the outer part of the combined RMA in analyzing these three factors had any affect on the ultimate outcome. Thus, this court cannot say that any error by the hearing officer affected "substantial rights" of the plaintiffs. General Statutes § CT Page 140694-183 (j).
IV
The plaintiffs' final argument is that the hearing officer improperly made a comparison between GMC's local market penetration and its adjusted national performance, rather than its performance in this state, for purposes of evaluating criteria number (9). In full, criteria (9) requires an examination of:
the reasonably expected market penetration of the line-maker motor vehicle for the community or territory involved, after consideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory.
General Statutes § 42-133dd (c)(9). As its plain language reveals, criteria (9) does not specify whether DMV should compare a manufacturer's penetration in the "community or territory involved" to the state market, the national market, or, indeed, to any market. Instead, the statute essentially gives the hearing officer discretion to evaluate "all factors which may affect said penetration . . .
The hearing officer did not abuse her discretion in this regard. The hearing officer found that, for purposes of dealer network planning, GMC itself determines dealer penetration of the light truck market by using a national average adjusted for local segment popularity, rather than a state standard. (ROR, Item 34, p. 8, ¶ 41.) Further, the Superior Court had previously upheld DMV's use of a comparison between local and national market penetration under criteria (9). See A-1 Auto Service,Inc. v. Department of Motor Vehicles, Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 558549 (July 18, 1996Maloney, J). Thus, the hearing officer's approach to this issue was not arbitrary, capricious, or an abuse of discretion. General Statutes §4-183 (j).
Further, the hearing officer specifically found that GMC's penetration in the local market was lower than expected when compared to both the adjusted national standard and "the State standard which was used by the Petitioners." (ROR, Item 34, p. 9, ¶ 50.) Therefore, because the evidence reflected the same market penetration deficiencies under either standard, the plaintiffs cannot show that the hearing officer's decision affected their substantial rights. CT Page 14070
CONCLUSION
For the foregoing reasons, the appeal is dismissed.
Carl J. Schuman Judge, Superior Court
|
01-03-2023
|
07-05-2016
|
https://www.courtlistener.com/api/rest/v3/opinions/1913600/
|
126 B.R. 165 (1991)
In re CHATEAUGAY CORPORATION, Reomar, Inc., the LTV Corporation, et al., Debtors.
The LTV CORPORATION, for itself and on behalf of all affiliated debtors in these cases; the Official Committee of Unsecured Creditors of LTV Steel Company, Inc.; the Official Committee of Parent Creditors of the LTV Corporation; the Official Committee of Equity Security Holders; and the LTV Bank Group, Plaintiffs,
v.
PENSION BENEFIT GUARANTY CORPORATION, Defendant.
Bankruptcy Nos. 86 B 11270 (BRL) through 86 B 11334 (BRL), 86 B 11402 (BRL) and 86 B 11464 (BRL), Adv. No. 89-6122A.
United States Bankruptcy Court, S.D. New York.
April 4, 1991.
*166 Davis Polk & Wardwell by Karen E. Wagner, Thomas P. Ogden, Regina E. Shannahan, Kaye, Scholer, Fierman, Hays & Handler by Michael J. Crames, Arlene R. Alves, New York City, LeBoeuf, Lamb, Leiby & MacRae by Frank Cummings, Washington, D.C., for debtors, plaintiffs.
Pension Ben. Guar. Corp. by Raymond M. Forster, Jeffrey B. Cohen, pro se.
Cleary, Gottlieb, Steen & Hamilton, by George Weisz, New York City, Skeptoe & Johnson, by John R. Labovitz, Washington, D.C., for Pension Ben. Guar. Corp.
Wachtell, Lipton, Rosen & Katz by Harold S. Novikoff, Stroock & Stroock & Lavan by Brian Cogan, Stuart M. Riback, Lawrence M. Handelsman, New York City, for LTV Steel Creditors Committee, plaintiffs.
Blank, Rome, Cominsky & McCauley by Raymond L. Shapiro, Faith R. Greenfield, Jane Flickstein, Philadelphia, Pa., for LTV Parent Creditors Committee, plaintiffs.
Warshaw Burstein Cohen Schlesinger & Kuh by Edgar H. Booth, Mary S. Zitwer, Martin R. Lee, New York City, for LTV Equity Committee, plaintiffs.
O'Melveny & Myers by Robert M. Hayes, New York City, for Counsel to LTV Bank Group.
MEMORANDUM DECISION ON THE DISCOUNT RATE TO BE USED IN CALCULATING THE ALLOWABLE AMOUNT OF A CLAIM BY THE PENSION BENEFIT GUARANTY CORPORATION
(FINDINGS OF FACT AND CONCLUSIONS OF LAW PURSUANT TO 28 U.S.C. § 157(c)(1) AND BANKRUPTCY RULE 9033)
BURTON R. LIFLAND, Chief Judge.
This adversary proceeding is before the Court pursuant to a withdrawal of the reference *167 and referral for findings of fact and conclusions of law subject to de novo review in accordance with 28 U.S.C. § 157(c)(1)[1]. The instant matter deals with discrete objections to, and the allowance of, certain claims of the Pension Benefit Guaranty Corporation. This issue is distinguished from those involving the LTV pension plan terminations recently reviewed in the United States Supreme Court. Pension Benefit Guaranty Corporation v. LTV Corporation, ___ U.S. ___, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990), reversing and remanding, 875 F.2d 1008 (2d Cir. 1989), aff'g 87 B.R. 779 (S.D.N.Y.1988). The dispute involves the specific discount rate to be used in calculating the value of a claim of the Pension Benefit Guaranty Corporation against the LTV Corporation and all affiliated debtors.[2] The claims of the Pension Benefit Guaranty Corporation are by far the largest group of filed claims, and their resolution will have a major impact upon the ultimate plan or plans of reorganization to be confirmed in these cases which are among the largest and most complex pending in the nation.[3] Unfortunately, determining the discount rate to be used in valuing the Pension Benefit Guaranty Corporation's claim is not an exact science, and the ultimate valuation rests upon assumptions about future events which are not ascertainable at this time.[4]
BACKGROUND
The prior proceedings and essential facts relevant to a determination of the issue presented are not in dispute and can be summarized as follows:
On July 17, 1986 (the "Filing Date") and thereafter, the LTV Corporation ("LTV") and sixty-six of its affiliates (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (the "Code"). Since the Filing Date, the Debtors have been continued in the management and operation of their respective businesses and properties as debtors-in-possession pursuant to §§ 1107 and 1108 of the Code. The Debtors' Chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to orders of this Court. No trustee or examiner has been appointed in any of the Debtors' Chapter 11 cases.
The Debtors are a large and highly complex group of companies principally engaged in the steel, aerospace/defense and energy products industries. LTV Steel Company, Inc. ("LTV Steel") is a major producer of hot and cold rolled sheets for the automotive and consumer durable goods markets and has been a major producer *168 of high quality bar products[5]. LTV Steel is one of the largest steelmakers in the United States as a result of LTV's June 29, 1984 acquisition of Republic Steel Corporation ("Republic Steel"), and the subsequent merger of J & L Steel, a former wholly-owned subsidiary of LTV, into Republic (the surviving corporation thereafter being renamed LTV Steel).
The Pension Benefit Guaranty Corporation (the "PBGC") is a wholly-owned United States government corporation established under Section 4002 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1302, to administer the pension plan termination program created under Title IV of ERISA. 29 U.S.C. §§ 1301-1461 (1982), as amended by the Single-Employer Pension Plan Amendments Act of 1986, Pub.L. No. 99-272, 100 Stat. 237 (April 7, 1986) (codified at 29 U.S.C.A. §§ 1301-1461 (West Supp.1987)) ("SEPPAA").[6] Under ERISA, single-employer pension plans may be voluntarily terminated under certain circumstances by plan administrators under ERISA Section 4041, 29 U.S.C. § 1341. The plans may also be involuntarily terminated by the PBGC under ERISA Section 4042, 29 U.S.C. § 1342, for various reasons such as the employer's inability to adequately fund the benefit programs. The PBGC is required to guarantee payment of non-forfeitable benefits under terminated plans, subject to certain limitations. See, ERISA Sections 4022, 4022B, 4061, 29 U.S.C. §§ 1322, 1322b, 1361. To finance the payment of these benefits, the PBGC uses funding obtained from two sources: (1) the annual insurance premiums paid by the administrators of covered plans pursuant to Sections 4006 and 4007 of ERISA, 29 U.S.C. §§ 1306 and 1307; and (2) the employer liability payments collected under Section 4062 of ERISA, 29 U.S.C. § 1362, which make employers whose plans terminate with insufficient assets liable to the PBGC for part of the terminated plan's unfunded guaranteed benefits. See, 29 U.S.C. § 1362(b). When a covered pension plan terminates without sufficient funds to pay benefits guaranteed under Title IV, the PBGC takes over the assets and liabilities of the plan, makes up the deficiency in plan assets, and pays benefits to plan participants.
As of the Filing Date, the Debtors were sponsors and LTV was the administrator of a number of pension plans which provided a variety of benefits to employees and retirees. The four largest plans were those sponsored by LTV Steel. The four plans included: (1) the Jones & Laughlin Hourly Pension Plan (the "J & L Hourly Plan"); (2) the Jones & Laughlin Retirement Plan (the "J & L Salaried Plan"); (3) the Pension Plan of Republic Steel Corporation Dated and Effective as of March 1, 1950 (the "Republic Hourly Plan"); and (4) the Republic Retirement Plan (the "Republic Salaried Plan").
After the Filing Date, the PBGC decided to terminate these four plans (collectively the "Terminated Plans"). Thus, on September 30, 1986, the PBGC moved in the United States District Court for the Southern District of New York (the "District Court") to terminate the Republic Salaried Plan under the involuntary termination provisions of Title IV of ERISA. 29 U.S.C. § 1301-1461. On January 12, 1987, the PBGC moved in the District Court to terminate involuntarily the J & L Salaried Plan, the J & L Hourly Plan and the Republic Hourly Plan. As administrator of those plans, LTV consented to each of the terminations. The District Court entered the termination orders effective September 30, 1986 and January 13, 1987, respectively (collectively the "Termination Dates").
*169 The PBGC subsequently attempted to administratively restore three of the Terminated Plans. The Debtors moved in this Court for an order declaring restoration to be in violation of § 362 of the Code. The District Court withdrew that action from this Court pursuant to the PBGC's motion under 28 U.S.C. § 157(d), and considered both matters together. In re Chateaugay Corp., 86 B.R. 33 (S.D.N.Y.1987). On September 12, 1988, the District Court entered an order vacating the PBGC's Notice of Restoration, finding, inter alia, that the PBGC had acted in an arbitrary and capricious manner. In re Chateaugay Corp., 87 B.R. 779 (S.D.N.Y.1988). On May 12, 1989, the United States Court of Appeals for the Second Circuit (the "Second Circuit") affirmed the District Court's decision. PBGC v. LTV Corp., 875 F.2d 1008 (2d Cir.1989). On September 11, 1989, the PBGC filed a petition for writ of certiorari, which was granted by the United States Supreme Court on October 30, 1989. PBGC v. LTV Corp., ___ U.S. ___, 110 S.Ct. 321, 107 L.Ed.2d 311 (1989). In its recent decision the Supreme Court concluded:
that the PBGC's failure to consider all potentially relevant areas of law did not render its restoration decision arbitrary and capricious. We also conclude that the PBGC's anti-follow-on policy, an asserted basis for the restoration decision, is not contrary to clear congressional intent and is based on a permissible construction of § 4047. Finally, we find the procedures employed by the PBGC to be consistent with the APA. Accordingly, the judgment of the Court of Appeals is reversed and the case is remanded for further proceedings consistent with this opinion.
PBGC v. LTV Corp., ___ U.S. ___, 110 S.Ct. 2668, 2681, 110 L.Ed.2d 579 (1990). The Supreme Court's restoration opinion does not directly affect the claim objection and valuation proceedings as to filed PBGC claims.
On November 24, 1987, in accordance with this Court's bar order, the PBGC filed sixty-one proofs of claim under the caption "The LTV Corporation, et al., Case No. 86-B-11272," which were deemed filed in each of the Debtors' cases.[7] Twenty-seven of the proofs of claim filed by the PBGC are based on the Terminated Plans. All Plaintiffs[8] filed objections or adoptive pleadings with respect to the PBGC claims, and pursuant to this Court's "Case Management Order" all objections and/or pleadings have been consolidated into the adversary proceeding herein (the "Adversary Proceeding").
On September 8, 1989, the PBGC moved to withdraw the reference of this Adversary Proceeding to the District Court. The PBGC's motion to withdraw the reference was assigned to Judge Duffy, who granted the PBGC's request. Judge Duffy, however, acknowledged this Court's familiarity with the parties and issues in this Adversary Proceeding and consequently referred the proceeding to this Court for findings of fact and conclusions of law under 28 U.S.C. § 157(c)(1), subject to de novo review by the District Court. In re Chateaugay Corp., 108 B.R. at 29.
On November 21, 1989, the Plaintiffs filed their motion for partial summary judgment with respect to specified aspects of the status and priority of the PBGC claims relating to the Terminated Plans. On January 16, 1990, the PBGC crossed-moved for partial summary judgment with respect to certain issues raised by the Plaintiffs' objections and counterclaims to the PBGC's claims.
The findings of fact and conclusions of law transmitted to the District Court on May 24, 1990, dealt with issues of the status and priority of the PBGC claims. In re Chateaugay Corp., 115 B.R. 760 (Bankr.S. D.N.Y.1990). Included in the findings of *170 fact and conclusions of law transmitted to the District Court on the motions for partial summary judgment were the following holdings germaine to the instant discount rate issue:
Federal bankruptcy law requires that discount or interest rate assumptions used to determine the allowable amount of claims must be those realistically likely to result in the determination of the full economic value of the claim, rather than those serving other policy goals. "Once an entity has been brought into the jurisdiction of the Bankruptcy Court, it is this Court's province to determine the interest rate". In re Caudill, 82 B.R. 969, 978 (Bankr.S.D.Ind.1988). Clearly, "[t]he Bankruptcy Code controls the allowance of claims including those arising under ERISA." In re Columbia Motor Express, Inc., 33 B.R. 389, 394 (M.D.Tenn. 1983).
* * * * * *
Once the value of the aggregate future liabilities has been determined, the present value of those future liabilities is determined as a matter of bankruptcy law so that all similar claims for future liabilities are treated in an economically similar manner. Thus, once it is determined that there is a valid obligation arising from non-bankruptcy law, the court will "still have to decide whether allowance of the claim would be compatible with the policy of the Bankruptcy Act". Vanston [Bondholders Protective Committee v. Green], 329 U.S. [156] at 162 [67 S.Ct. 237, 240, 91 L.Ed. 162 (1946)] (footnote omitted).
While state law ordinarily determines what claims of creditors are valid and subsisting obligations, a bankruptcy court is entitled . . . to determine how and what claims are allowable for bankruptcy purposes, in order to accomplish the statutory purpose of advancing a ratable distribution of assets among the creditors.
In re Brints Cotton Marketing, Inc., 737 F.2d 1338, 1341 (5th Cir.1984). See also, In re Shelter Enterprises, Inc., 98 B.R. 224, 229 (Bankr.W.D.Pa.1989) (the existence of a claim is determined by state law; the allowability of the claim is determined by bankruptcy law). The determination of the allowability of a claim includes the choice of an appropriate interest rate. See e.g., In re Caudill, 82 B.R. at 978. The determination of the allowability of ERISA claims is not exempted from this general rule. See, In re Columbia Motor Express, Inc., 33 B.R. at 394.
In re Chateaugay Corp., 115 B.R. 760, 769-770 (Bankr.S.D.N.Y.1990).
After the findings of fact and conclusions of law were transmitted to the District Court, and pending his consideration of them, Judge Duffy directed the parties to return to this Court for a determination of the specific discount rate to be applied to the claims based on the Republic Salaried Plan.
DISCUSSION
The PBGC's employer liability claims against the Debtors as of The Plan Termination Dates are quantified by reference to "(I) the total amount of unfunded guaranteed benefits (as of the termination date) of all participants and beneficiaries under the plan. . . ." 29 U.S.C. § 1362(b) (Supp. IV 1986). Section 1301(a)(17) defines the "amount of unfunded guaranteed benefits" of a participant or beneficiary as of any date under a single-employer plan as an amount equal to the excess of
(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 1344 of this title) of the benefits of the participant or beneficiary under the plan which are guaranteed under section 1322 of this title, over
(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefits under section 1344 of this title. . . .
29 U.S.C. § 1301(a)(17).
Pursuant to these statutory provisions, when an underfunded plan terminates, the PBGC is charged with determining the amount of unfunded guaranteed benefits *171 under the plan. Under § 2619.43(a) of the Code of Federal Regulations (the "CFR"), the PBGC is also charged with determining the present value of all future plan benefits when a plan is terminated, and applies a range of discount rates for the purpose of determining termination liability, dependent on when the plan will have to pay out benefits. (PBGC Notice of Proposed Rulemaking, 41 Fed.Reg. 48, 485-86 (Nov. 3, 1976)). Although this Court has previously held that bankruptcy law controls the applicable discount rate to be used in determining the value of a claim based on the Debtors' liability for cash payments subsequent to the Filing Date, the PBGC argued that the assumptions which it used in determining the value of its claim, based upon the statutory law and regulations, do in fact result in a determination of the full economic value of the claim. Mr. Charles David Gustafson, the manager of PBGC's actuarial policy division, testified that the mortality and interest rate assumptions are directly related in these calculations. Depending on different mortality rate assumptions, Mr. Gustafson would apply a discount rate between 7.25 percent and 8.50 percent.
The PBGC also presented evidence on two alternative methodologies for ascertaining the amount of the claim. The first alternative methodology presented by the PBGC approaches the value of the claim directly, determining the value by equating the price that would have been charged by insurance companies, in a competitive bidding situation, for a nonparticipating annuity contract to meet the guaranteed benefit obligations. It should be noted that the PBGC indicated this is the same "price" which the statutory law and regulations attempt to replicate. Mr. Michael J. Mahoney, an actuary with experience in negotiating annuity contracts, testified that it would have cost LTV between $223.1 million and $246.1 million to purchase the annuity contract for the Republic Salaried Plan. The range of Mr. Mahoney's most likely prices for an equivalent annuity was $229.6 million to $239.5 million.
The PBGC's second alternative approach would use the fundamental economic and financial concept of valuation which equates the present value of future cash payments with the cost of replicating the payments through a portfolio strategy of equivalent risk. Further, the PBGC argued that since future benefit payments must be considered to be certain in terms of amount and timing[9], they are risk-free in economic terms and, accordingly, the proper discount rate for determining the amount of the claim is the rate on a risk-free security, a United States Treasury Bond, of like maturity. Dr. Zvi Bodie, a professor of Finance at Boston University and a member of a task force of the Financial Accounting Standards Board (the "FASB") examining the use of present value principles in accounting, testified regarding the risk-free rates. Dr. Bodie testified that the internal rate of return (a proxy for the discount rate) ranged from 7.32 percent to 7.34 percent under various sets of assumptions.[10]
The Debtors presented evidence to support a contention that the appropriate discount rate is a "risk-adjusted discount rate". This discount rate is based not only on the time value of money (measured by risk-free United States Treasury Bond rates), but also the risk that LTV Steel would not meet its obligations. The evidence indicated that the "risk-adjusted discount rate" may be determined by reference *172 to the interest rates observed in the market for bonds of similar duration and priority issued by LTV Steel or Republic Steel at the same time as the pension obligations to employees arose (as opposed to the Plan Termination Dates, or the Filing Date). Dr. Richard Leftwich, a professor of Accounting and Finance at the Graduate School at the University of Chicago and an outside consultant to Lexecon, Inc., testified for the Debtors. Using various weighing assumptions, Dr. Leftwich testified that the discount rate would range between 11.8 percent and 14.5 percent. The average would be between 12.3 percent and 14.0 percent.[11] In his opinion, the blended discount rate to be used in valuing the claim is 14.3 percent.[12]
The Steel Committee's expert witness differed, and testified that the appropriate approach for determining the discount rate is based upon an analysis of "the rate of return achievable by a reasonable, prudent, long-term [pension fund] investor who seeks to achieve the best long-term return on his investment consistent with preserving his capital and minimizing risk". Mr. Carmine Grigoli, Director of Quantitative Analysis and Chief Equity Portfolio Strategist at The First Boston Corporation, testified that the discount rate under this methodology would be 11.5 percent.
In summary, this Court has been presented with five different methodologies to determine the appropriate discount rate to be used in calculating the value of a claim based on obligations of the Debtors to make cash payments subsequent to the Filing Date:
1) The rate calculated by the PBGC utilizing its interpretation of statutory law and regulations;
2) The PBGC's direct method of determining the amount of the claim by reference to the prices charged by private insurance companies for guaranteed annuity contracts;
3) The PBGC's approach utilizing present value theory, specifically, a risk-free discount rate;
4) LTV's risk-adjusted discount rate employing a company-specific risk of default, and making these calculations over the time the obligations to employees (as opposed to the PBGC) were incurred; and
5) The Steel Committee's pension fund portfolio theory using a risk-adjusted discount rate (minimizing risk with an orientation toward the future).
I. The PBGC's Statutory Law and Regulations Approach
The PBGC's first approach is simply a restatement of the proposition that the PBGC should have the prerogative to set its own discount rate. This Court has already held that the allowance of a claim is within the province of the Bankruptcy Court, including the setting of an economically appropriate discount rate designed to assure equal treatment of all creditors. In re Chateaugay Corp., 115 B.R. at 770. Therefore, even if its approach produces the "right" discount rate as the PBGC contends, it is the Bankruptcy Court, not the claiming creditor, which makes the determination as to the appropriate discount rate. Giving deference to an agency's interpretations only "sets the framework for judicial analysis; it does not displace it." United States v. Cartwright, 411 U.S. 546, 550, 93 S.Ct. 1713, 1716, 36 L.Ed.2d 528 (1973). See, Subheading II below.
II. The PBGC's Annuity Contract Approach
The PBGC, perhaps realizing the inappropriateness of arbitrarily utilizing a claimant-controlled approach has, alternatively, recommended that the price of a private annuity contract be used as a proxy for the value of a claim that requires the Debtors to make cash payments subsequent to the Filing Date. As indicated by *173 the PBGC's expert witnesses and expressed by counsel, the price of a private annuity contract is the standard which the statutory law and regulations attempt to replicate.
An annuity is a fixed sum payable at specified intervals for a specific period of time. A private guaranteed single premium annuity contract is a contract between a purchaser and an insurance company which guarantees the payment of specific sums at specific times in return for an initial purchase price. The issuer of the annuity is able to charge less than the total amount to be paid out because of the ability of the issuer to earn interest on the initial purchase price until the periodic payments are made (i.e., an annuity priced at $450 today in return for payment of $100 per year over five years). The price of a private annuity also includes a "markup" for administrative and marketing costs, as well as an expected profit.
The PBGC relies upon the defined meaning of "actuarial present value" under generally accepted accounting principles to bolster its argument. The definition is:
The value, as of a specified date, of an amount or series of amounts payable or receivable thereafter, with each amount adjusted to reflect (a) the time value of money (through discounts for interest) and (b) the probability of payment (by means of decrements for events such as death, disability, withdrawal, or retirement) between the specified date and the expected date of payment.
Statement of FASB No. 87 ("FASB 87"), Employers Accounting for Pensions, Appendix D (Glossary) (emphasis added). FASB 87, ¶ 44, also states how pension liabilities are to be discounted to present value for an ongoing plan:
Assumed discount rates shall reflect the rates at which the pension benefits could be effectively settled. It is appropriate in estimating those rates to look to available information about rates implicit in current prices of annuity contracts that could be used to effect settlement of the obligation (including information about available annuity rates currently published by the Pension Benefit Guaranty Corporation). In making those estimates, employers may also look to rates of return on high-quality fixed-income investments currently available and expected to be available during the period to maturity of the pension benefits. . . .
FASB 87, ¶ 44 (emphasis added).
While instructive, the pronouncements of the FASB are not binding in the context of the present dispute. Even if the accounting principles were binding, they do not unequivocally support the PBGC's position on the use of private annuity contracts. Indeed, FASB 87 only suggests that private annuity rates are an appropriate, but certainly not exclusive, factor in determining a discount rate to be used for accounting purposes.
In addition, PBGC regulations seem to undercut its position on the appropriate discount rate to be used in determining plan insufficiency claims:
The current value of a benefit as of a specific date is equal to the amount of money needed on that date in order to be able to pay the benefit over future years, taking into account reasonable and current expectations as to mortality, administrative expenses [both of which are important in calculating future obligations] and interest earnings (i.e., the rate of return to be earned on the investment of the money).
45 Fed.Reg. 38,416 (1980) (emphasis added). Therefore, although the price of private annuity contracts may have some relevance to the discount rate to be used in valuing claims for future cash payments, they are not determinative.
Even if the PBGC's annuity approach were determinative, its methodology is faulty. For example, the PBGC methodology requires information regarding annuity prices. There is no reliable source of public information on such prices. Until 1990 the PBGC's surveys of insurance companies to determine annuity prices did not even ask the companies to exclude expected profit from their quotes. In addition, the surveys do not appear to take into account volume-price reductions available in connection *174 with the settlement of the liabilities of large pension plans.
III. The PBGC's Risk-Free Interest Rate Approach
As a third alternative, the PBGC urges this Court to utilize economic and financial theories of valuation, specifically, the present value method of valuing future cash flows. The present value theory of valuation is based on discounting future cash flows because of both the time value of money ($100 is worth more today than in one year because of the risk of inflation and the fact that the money could be invested to yield a return for the year), and various types of risk associated with the cash flows (primarily the risk of late payment or default).
The PBGC contends that the appropriate discount rate is the risk-free rate. The interest rate on Treasury Bonds is traditionally utilized as a proxy for the risk-free rate. For example, a Treasury Bond with ten years to maturity incorporates both the lost opportunity cost (if the money were not invested in the Bonds, it could be invested elsewhere) and the effect of expected inflation over the investment period, but does not include any factor for other risks. The PBGC argues that a risk-free rate is proper since, in its view, the future benefit payments must be considered to be certain in terms of amount and timing, and are accordingly, risk-free in economic terms.
While this third theory advanced by the PBGC is an improvement over its other suggested methodologies, in that this one looks toward the future in attempting to set an appropriate discount rate, it is nonetheless insufficient because of its treatment of risk. Although the PBGC's right to its own claim based on the claims of the plan's participants may be unassailable, and therefore risk-free, its analysis begs the question. The correct question is what amount of cash (the amount of the claim) would the PBGC have to receive (not the amount of the Republic Salaried Plan's obligation to the participants) to be able to pay the Debtors' future obligations as they become due. See, Subheading V below.
IV. LTV's Approach
LTV contends that the discount rate used to bring the PBGC's claim to present value must reflect both the specific risk associated with the obligations of LTV Steel or its predecessor and the discount associated with any claim for nominal dollars payable over time. Further, LTV argues that:
[t]he PBGC's claims in these cases arose as labor was performed by LTV Steel's employees, and result from its obligation to pay beneficiaries claims over time. The claims must therefore be brought to present value by reference to the risk associated with claims of similar average maturity arising when these pension claims arose.
Pretrial Memorandum, pp. 20-21.
LTV's contention that the claim of the PBGC must be valued as of the date the employee's claims arose is not correct, and in any event would result in an incredible, if not insoluble, accounting problem in calculating the amount of the PBGC claim. In the first instance, the claim of the PBGC is valued as of the Filing Date Code § 502(e)(2).[13] Further, LTV's proposed methodology of valuing the PBGC's claim based on when the employee's claims arose prepetition would create an unworkable system for determining the amount of the PBGC's claim.
If LTV's methodology were followed to its logical conclusion, every time (possibly every pay period) a single employee accrued pension benefits which were later assumed by the PBGC, a discount rate (determined as of the date the liability to the employee accrued) would have to be calculated to discount that single discrete *175 contingent liability. LTV attempts to circumvent this problem by using an averaging process which aggregates all employee claims on an annual basis and then uses some type of weighted average discount rate calculated, at least to some degree, on the amount of employee claims in any particular year. Even if LTV's assertions as to the proper time(s) for determining the applicable discount rate(s) were correct, their proposed methodology does not appear to yield a rate which this Court could find to be a close enough approximation of their theoretical position to warrant using the rate(s) in valuing the PBGC's claim.
In addition, LTV's assertions as to the "risk" factors to be used in calculating a discount rate are incorrect. LTV insists that the discount rate should reflect the default risk associated with LTV Steel when the claim arose, but cites no authority which is on point to bolster its argument. Instead, it relies heavily on this Court's prior decision concerning original issue discount. In re Chateaugay Corp., 109 B.R. 51 (Bankr.S.D.N.Y.1990).[14] That case concerned an entirely different issue, i.e., determination of the value of a claim based on a bond received in an exchange offer. This Court ruled that whatever the face amount of the bond, the value of the claim is determined by the actual value the "market" places on the bond on the date of the exchange. Additionally, the bondholder would have a claim for the amortized portion of the imputed interest (the difference between the face amount of the bond and its market value on the date of the exchange adjusted to reflect the maturity of the bond). This imputed interest reflects the discount applied by the market based upon the possibility of default given the debtor's financial characteristics, as well as the time value of money.
In contrast, the task here is to determine the amount of money needed, as of the Filing Date, to meet obligations of the Debtors to make cash payments subsequent to the Filing Date.[15] While LTV is correct in its assertion that there is a "risk" factor that has to be incorporated into the discount rate determination, the proper "risk" is not a company specific risk of default at the time the obligation arose, but rather, the "risk" associated with the possibility of defaults in an appropriate portfolio of investments which, if made on the Filing Date, would satisfy the Debtors' obligations to make cash payments subsequent to the Filing Date. See, Subheading V below.
V. The Steel Committee's Portfolio Theory
The Steel Committee presented evidence that the correct approach for determining the discount rate is based upon an analysis of "the rate of return achievable by a reasonable, prudent, long-term [pension fund portfolio] investor who seeks to achieve the best long-term return on his investment consistent with preserving his capital and minimizing risk." Analysis of the Appropriate Discount Rate for Use in the Determination of the PBGC Claim, Carmine J. Grigoli (November 28, 1990) (the "Analysis"). The theoretical framework offered by the Steel Committee is grounded on the proposition that claims for a series of cash payments in the future should be discounted to present value by a discount factor which would result in estimating the amount of cash required, as of the petition date, which when prudently invested would allow the obligations to be met as they became due. This method is used by financial analysts every day to determine the present value of long term *176 obligations. The methodology also satisfies the Court's prior holding that "[f]ederal bankruptcy law requires that the discount or interest rate assumptions used to determine the allowable amount of claims must be those realistically likely to result in the determination of the full economic value of the claim. . . ." In re Chateaugay Corp., 115 B.R. at 769.
The profile of a prudent investor assumes that:
1) the investor is experienced in the field of investing funds and is aware of the returns available in alternative securities;
2) the investor is aware of the risks associated with alternative investments;
3) the investor chooses to invest in a diversified portfolio to minimize risk; and
4) the investor does not actively manage the portfolio.
This hypothetical investor would choose investments which would produce a yield reflecting the returns achievable in the market as a whole. Thus, this investor would be an "average" investor earning "average" returns or, as currently referred to by the investment community, an "index fund" investor.
The prudent investor would invest in a "prudent" portfolio of diversified investments to minimize risk. This investor would not allocate 100 percent of the funds to either the stock or the bond market, but instead would allocate the funds between the two markets. The Steel Committee's expert testified that he had considered several model portfolios and chose to use the investment practices of private pension funds in creating a model portfolio. Mr. Grigoli testified that:
the pension fund is a reasonable surrogate for the prudent long-term investor because: (i) the pension fund has a fiduciary responsibility for its beneficiaries and (ii) the objectives of pension fund investors are to maximize return while preserving capital such that future obligations can be met.
The record indicates that Mr. Grigoli used the average asset allocation of private pension funds because it most accurately reflects the risk profile of the reasonable prudent investor. This asset allocation presumably reflects the best interests of beneficiaries as determined by professional investors. Mr. Grigoli looked at the mix used by administrators of private pension funds as represented by the average investment policy of $733.8 billion of pension fund assets. This led to the conclusion that 61.5 percent of funds would be invested in equities and 38.5 percent of the funds would be invested in fixed income securities including Treasury obligations, high quality, investment grade corporate securities and mortgage backed securities.
The Analysis reflects the prospective returns achievable at the end of October 1990, while incorporating the actual returns on the balanced portfolio from July 1986 through October 1990. This approach, which is applicable in this case because of the timing of the present summary judgment motion, leads to the most accurate discount rate since it accounts for what has already transpired as well as for expectations of future returns.
To determine the return a pension fund might have experienced investing in both the stock and bond market, Mr. Grigoli combined the Shearson Lehman Hutton Aggregate Bond Index (the "Shearson Index"), the benchmark for returns in the fixed income market, with the Standard & Poor 500 Index (the "S & P 500 Index"), the benchmark for returns in the equity market. The Shearson Index consists of approximately 53 percent government bonds, 18 percent investment grade corporate bonds (rated BAA or better) and 29 percent mortgage backed securities, representing the return on all U.S. fixed income securities rated BAA or better, and is widely considered to be the best indicator of returns achievable in the bond market. The S & P 500 Index is determined by aggregating each of the estimated returns for the 500 component companies, and is widely used by investment professionals as representative of a highly diversified portfolio of common stocks. Additionally, the *177 use of index funds minimizes transaction costs and management fees.
Mr. Grigoli calculated the actual returns for the period from July 1986 through October 1990, combined the results with the projected yields at October 1990, and found that a prudent investor who places approximately 61.5 percent of the invested funds in stocks and 38.5 percent of the invested funds in bonds would achieve a combined return of 11.5 percent.
While some of the technical specifications of Mr. Grigoli's model, as applied to the present controversy, may be open to academic dispute, the methodology applied by the Steel Committee's expert is the most rational approach to deal with the problems that inevitably arise when attempts are made to apply a theoretical model to a practical problem.
CONCLUSION
In valuing claims for obligations of a debtor to make cash payments to a creditor at some time subsequent to the date a bankruptcy petition is filed, what is determined is how much cash would have been needed on the date of the petition, when prudently invested, to be able to satisfy the future cash obligations as they become due.
In summary, the proper methodology for valuing a claim based on an obligation of the Debtors to make cash payments subsequent to the Filing Date requires an examination of the rate of return available to a reasonable, prudent private pension fund investor who invests in a "prudent" portfolio. That investor's guiding objective is to earn the highest return on the invested capital consistent with preservation of the capital and minimization of risk. This projected rate of return should then be used to discount the Debtors' obligations to make cash payments subsequent to the Filing Date to determine the present value of the claim.
The analysis of the Steel Committee's expert produces the best approach. None of the major assumptions used in constructing that model were shown to be insupportable. Accordingly, the 11.5 percent discount rate produced by the Grigoli model is to be used in valuing the PBGC's claim for the obligation of the Debtors relating to the Republic Salaried Plan.
The foregoing constitutes this Court's findings of fact and conclusions of law pursuant to 28 U.S.C. § 157(c)(1) and Bankruptcy Rule 9033.
NOTES
[1] In re Chateaugay Corp., 108 B.R. 27, 29 (S.D.N.Y.1989).
[2] Only the claim relating to the Republic Salaried Plan is at issue at this time because the three other LTV Steel plans remain subject to the District Court's jurisdiction in connection with the Pension Benefit Guaranty Corporation's separate efforts to enforce restoration. PBGC v. LTV Corp., 122 B.R. 863 (S.D.N.Y.1990). However, it is assumed that the economic principles discussed in these findings of fact and conclusions of law will apply, where appropriate, to all claims by the Pension Benefit Guaranty Corporation and other claimants with claims based on obligations of the LTV Corporation and all affiliated debtors to make cash payments subsequent to the date a bankruptcy petition was filed, other than those claims specifically dealt with by the Bankruptcy Code. See, Bankruptcy Code § 502(g).
[3] On February 28, 1991, at a hearing to consider extending the exclusive period under Bankruptcy Code § 1121, the LTV Corporation and all affiliated debtors agreed with the Committees to file a plan of reorganization and disclosure statement pursuant to Bankruptcy Code §§ 1121 and 1125 within forty-five days, barring unforeseen developments.
[4] "On pensions, companies go through a fantastically complicated calculation to come up with one number to put on a balance sheet or income statement. But the truth is that the amount of the ultimate pension liability is unknown and unknowable. How can you know how long your employees will live, or whether they will quit before retirement time, or how much medical costs will go up over the next 50 years? The one thing you do know is that single number isn't going to be accurate." Linden, If Life Is Volatile, Account For It, Forbes, Nov. 12, 1990, at 121 (interview with Richard C. Breeden, Chairman, Securities & Exchange Commission) (emphasis added).
[5] This Court approved Debtors' motion for the sale of its bar division in 1989.
[6] On December 22, 1987, Congress amended Title IV of ERISA by enacting the Pension Protection Act (the "PPA") of 1987, Subtitle D of Title IX of the Omnibus Budget Reconciliation Act of 1987, Pub.L. No. 100-203, 101 Stat. 1330 (Dec. 22, 1987). Because the PPA antedated, and thus does not apply to events that give rise to this litigation, ERISA's statutory scheme as described herein does not reflect the 1987 amendments, and all citations to ERISA, as amended by SEPPAA, are to U.S.C. (Supp, 1987), except where expressly noted otherwise.
[7] See, Bankruptcy Rule 3001(f).
[8] Pursuant to this Court's "Case Management Order", dated October 4, 1989, the following parties have been joined as plaintiffs in this Adversary Proceeding: the Debtors, the Official Committee of Unsecured Creditors of LTV Steel, the Official Committee of Equity Security Holders, the Official Committee of Parent Creditors of LTV, and the LTV Bank Group (collectively, the "Plaintiffs").
[9] The PBGC, LTV, and the Steel Committee all used the same projections of the future benefit payment stream, prepared by LTV's actuaries, Lexecon, Inc., for the purposes of this proceeding. The PBGC has indicated that it will be correcting and refining these projections based on information received and yet to be received from LTV. The final determination as to the exact amount of future cash payments has no effect on the present proceeding. For example, the PBGC's recent discovery of an apparent error in the second page of the 1982 Form 5500 sent to Lexecon, Inc., for plan year 1981 has no effect on these proposed findings of fact and conclusions of law.
[10] On cross-examination, Dr. Bodie testified that these rates are based upon a yield curve for coupon bonds, and that if pure discount rates were calculated, they could be up to ten basis points lower or higher.
[11] See, Reply Affidavit of Richard W. Leftwich, January 21, 1991.
[12] Based on Dr. Leftwich's post-hearing affidavit dated January 22, 1991, and premised upon Lexecon, Inc. finding an error in its calculations, Dr. Leftwich changed the discount rate he advocated from 14.3 percent to 14.0 percent.
[13] § 502(e)(2) A claim for reimbursement or contribution of such an entity that becomes fixed after the commencement of the case shall be determined, and shall be allowed under subsection (a), (b), or (c) of this section, or disallowed under subsection (d) of this section, the same as if such claim had become fixed before the date of filing of the petition. See also, Code §§ 502(g)-(i). Except for administrative expense priority claims under Code § 503, there are no claims against an estate which are valued as of any time other than the petition date.
[14] LTV also relies upon cases involving valuation analysis in the context of plan confirmation proceedings. See, Debtors Pretrial Memorandum pp. 17-20. The reorganized debtor's default risk was relevant in those cases, but the debtor's pre-petition default risk was not considered in any way.
[15] LTV's argument that a claim payable in the future should be discounted to take into account the default risk of the Debtors, simply because the interest rate imputed in valuing a claim based on bonds issued with original issue discount includes a component for the default risk of the debtor at the time that the bond was issued, is clearly an unwarranted extension of this Court's ruling in In re Chateaugay Corp., 109 B.R. at 55-56.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2615075/
|
668 P.2d 1333 (1983)
James SCHULER, Appellant (Defendant),
v.
The STATE of Wyoming, Appellee (Plaintiff).
No. 83-33.
Supreme Court of Wyoming.
September 9, 1983.
Rehearing Denied October 11, 1983.
*1335 Leonard Munker, Sylvia L. Hackl, State Public Defenders, Cheyenne, Gerald M. Gallivan, Director, Wyoming Defender Aid Program, J. Scott Burnworth, Student Intern, Wyoming Defender Aid Program, Laramie, for appellant.
A.G. McClintock, Atty. Gen., Gerald A. Stack, Deputy Atty. Gen., John W. Renneisen, Sr. Asst. Atty. Gen., Terry J. Harris, Asst. Atty. Gen., Cheyenne, for appellee.
Before ROONEY, C.J., and THOMAS, ROSE, BROWN and CARDINE, JJ.
ROSE, Justice.
James Schuler appeals from a four- to eight-year burglary sentence which was enhanced to a life sentence under the habitual-criminal statute, § 6-1-110, W.S. 1977.[1]
We will affirm.
Schuler and two other persons were apprehended in the Mountain Bell building in Casper and were thereafter charged with burglary. One defendant pled guilty, while Schuler and the other defendant went to trial together. The jury found Schuler guilty of burglary and his co-defendant guilty of criminal trespass. Following the burglary trial, Schuler was found to be an habitual criminal, as defined by § 6-1-110, supra. The trial judge sentenced Schuler to four to eight years in the state penitentiary for burglary and then enhanced this sentence to life imprisonment under the habitual-criminal statute. The issues raised by *1336 the appellant are described in his brief as follows:
"I. Whether the trial court abused its discretion in not considering probation or suspension at sentencing even though the only crime appellant was convicted of was burglary.
"II. Whether the trial court erred in sentencing appellant twice on the separate matters of burglary and criminal habituality.
"III. Whether there is a reasonable doubt as to the guilt of the appellant based on inconsistent verdicts between co-defendants when the evidence against each was identical."
The Fourth Issue:
After the filing of the briefs, a fourth issue surfaced for the first time in argument which asks this question:
Is it error to charge a defendant with being an habitual criminal in a separate information?
Two separate informations were lodged against the defendant the first, in May of 1982, on the burglary charges; the second, in November 1982, wherein Schuler was charged as a person who would be convicted of burglary and who had previously been convicted of three other felonies. The first information, describing the underlying burglary charge, was incorporated by reference in the second complaint, which asked the jury to find Schuler to be, and the court to sentence him as, an habitual criminal.
Rule 16(b)(2), W.R.Cr.P.,[2] specifies that the trial court may not hear a case if the information fails to charge an offense. For the first time in argument before this court, the appellant claimed that the trial court was without authority to entertain the habitual-criminal proceedings, because, contrary to the provisions of § 6-1-111, W.S. 1977,[3] the defendant was charged with burglary and with being an habitual criminal in two separate criminal complaints.
Under normal circumstances, we would not consider this contention because it was not brought to the attention of the trial court nor was it brought to the attention of this court until the issue was raised in argument here.[4] We choose to address the question in this opinion because some of the prosecutors throughout the state appear to be unclear about the manner in which *1337 the habitual-criminal issue should be brought to the district court's attention.
Prosecutors seeking enhanced sentences under the habitual-criminal statute must bring allegations of habitual criminality under § 6-1-110, W.S. 1977 (see n. 1) in the same information with the underlying felony charge. That is, as in this case, if the charge is burglary and the prosecutor seeks to enhance a burglary sentence with the life-imprisonment penalty provided for those proven to be habitual criminals under § 6-1-110, supra n. 1, then both of these allegations should be contained in the same information. The rationale for this will be made more clear as the opinion progresses, but, in short, the reason that the habitual-criminal sentencing enhancement must not be described in a separate information is that being an habitual criminal is not a crime it is a status. To be an habitual criminal under the statute simply changes the sentencing process so that the sentence which could be imposed for the crime charged (if less than life imprisonment) becomes enhanced to a mandatory life sentence. We said as much in Evans v. State, Wyo., 655 P.2d 1214, 1225 (1982), where we explained:
"The habitual criminal statute does not create a new or separate crime and does not authorize or contemplate the conviction of the charge of being an habitual criminal. The distinct crime of being an habitual criminal is unknown. The habitual criminal act only prescribes a punishment and provides that in cases of a fourth felony conviction the penalty shall be enhanced. The repetition of criminal conduct aggravates the offense and provides greater penalties. The punishment is for the fourth felony, but it is enhanced because the defendant is an habitual criminal. The prior felony convictions are not integral parts of the principal offense charged in the information, but are instead matters of aggravation concerning the punishment to be imposed. Habitual criminality is a status, not an offense, and its finding calls for an enhancement of the punishment for the crime charged.
"`* * * Since habitual criminality is a status, not a crime, * * * a judgment of conviction of an accused as an "habitual criminal" is considered null and void, there being no such offense, and on conviction under an indictment alleging prior convictions there can be but one judgment or sentence imposed.' 24B C.J.S. Sentence of Judgment § 1971, p. 521 (1962).
"`* * * Habitual criminality is a status rather than an offense, and allegations of previous convictions made in indictments or informations brought under an habitual criminal statute do not constitute a distinct charge of crime, but go only to the punishment of the criminal. * * *' 42 C.J.S. Indictments and Informations § 145, p. 1065 (1944), quoted with approval in Waxler v. State, 67 Wyo. 396, 224 P.2d 514, 519 (1950)."
We spoke to the question of pleading repeated convictions in Waxler v. State, 67 Wyo. 396, 224 P.2d 514, 518-519 (1950), quoting from 42 C.J.S. Indictments and Informations, § 145, p. 1057, as follows:
"* * * Where, in case of repeated convictions for similar offenses, the statute imposes an additional penalty, it is generally held that an indictment for a subsequent offense should allege facts showing that the offense charged is a second or subsequent crime within the contemplation of the statute, * * * and also that it is necessary to allege both the present offense and the previous convictions."
The concept was earlier announced in Bandy v. Hehn, 10 Wyo. 167, 67 P. 979, 980 (1902), where we said:
"But we think that, in reason and by the great weight of authority, as the fact of a former conviction enters into the offense to the extent of aggravating it and increasing the punishment, it must be alleged in the information and proved like any other material fact, if it is sought to impose the greater penalty. The statute makes the prior conviction a part of the description and character of the offense *1338 intended to be punished. Tuttle v. Com., 2 Gray, 505; Clark, Cr.Proc. 204."
Both Waxler and Bandy, supra, were decided under the predecessor of § 6-1-111, supra:
"Provisions of this Act [the habitual-criminal statute] shall apply only when previous convictions are set forth in the information or indictment charging the defendant, and proof thereof shall be made." Section 9-111, W.C.S. 1945.
The predecessor statute was enacted in 1937 and remained in effect until the revised habitual-criminal statutes were passed in 1973. The language of the predecessor statute is unambiguous: the habitual-criminal charge must be brought in the same information that charges the current underlying felony. By comparison, we agree that the language of § 6-1-111 is not as free from doubt where it says:
"In charging a person with being an habitual criminal, the information or indictment shall set forth the felony committed within the state and shall allege the * * previous convictions or felonies relied upon by the state." Section 6-1-111(a), W.S. 1977.
Some of the prosecuting attorneys in our state apparently take the position that this statute is open to the interpretation that it only demands that the information charging habitual criminality be complete, in the sense that it should set forth both the prior and the current felonies but does not require that these charges all be made within the four corners of a single information. However, in light of the long history of criminal pleading in this state requiring a single information to charge both the underlying felony and the prior felonies upon which the State relies to enhance the punishment, the proper interpretation of § 6-1-111(a) leads to the conclusion that one and only one information should be brought, despite the fact that two informations would give adequate notice to a defendant.
We turn our attention here to the question having to do with whether there was error committed in this case through the filing of two separate informations, the first of which charges the defendant as follows:
"* * * JAMES SCHULER * * * did unlawfully
"COUNT I
"agree with one or more persons, namely: CHRISTOPHER HUSS AKA JOHN ROBERT McCUTCHEON, to commit a crime, to-wit: burglary (W.S. 1977, § 6-7-201), and did an overt act to effect the object of the agreement, in violation of W.S. 1977, § 6-1-203, which is
"COUNT II
"and intentionally enter a building, to-wit: the Mountain Bell Phone Center store building, without the consent of the person in lawful possession and with the intent to steal therein, in violation of W.S. 1977, § 6-7-201(a)(i) * * *."
Subsequently, a criminal information was filed which is in pertinent part as follows:
"* * * JAMES SCHULER [is] a person who will be convicted in this State of the felony of burglary as set forth in the Information filed in Criminal Action Number 8645 in the Seventh Judicial District, attached hereto as Appendix A and incorporated herein by reference, and who has previously been three (3) times convicted of a felony upon charges separately brought and tried, which have arisen out of separate occurrences, including the following: the felony of unauthorized use of an automobile on or about the 5th day of February, 1975 in the State of Wyoming, the felony of attempted escape from the Wyoming State Penitentiary on or about October 9, 1979 in the State of Wyoming, and the felonies of escape and grand larceny on or about the 17th day of October, 1977 in the State of Wyoming, is a habitual criminal, in violation of W.S. 1977, § 6-1-110, which is contrary to the form of the statute in such case made and provided, and against the peace and dignity of the State of Wyoming." (Emphasis added.)
*1339 Does the Second Information Charge an Offense?
Appellant's position in arguing this appeal is that the document which urges the habitual-criminal sentencing enhancement is fatally defective in that it fails to charge an offense. It is to be emphasized, however, that the second information incorporates by reference the first information which had properly charged the crime of burglary.
Black's Law Dictionary (5th Ed. 1968) defines "incorporation by reference" as:
"The method of making one document of any kind become a part of another separate document by referring to the former in the latter, and declaring that the former shall be taken and considered as a part of the latter the same as if it were fully set out therein."
As applied to this case, "incorporation by reference" means that the burglary charge contained in the first criminal complaint becomes a part of the second criminal complaint, thus amending the face of the second. By this device, the second instrument must be read to include both the burglary and the prior felonies and, as so interpreted, it meets the requirements of § 6-1-111(a), W.S. 1977.
The force of the record in the instant case is to the effect that the second information stands as an amendment to the first one. Rule 9(c), W.R.Cr.P. contemplates that the filing of an amended information will be accomplished by leave of court. The rule says:
"An information may be amended in matter of form or of substance at any time before the defendant pleads without leave of court. The court may permit an information to be amended at any time before verdict or finding if no additional or different offense is charged and if substantial rights of the defendant are not prejudiced."
Appellant had already been arraigned on the burglary charges, so it would have been preferable to obtain leave of court. However, it is not error to amend an information without leave of court. Whiteley v. State, Wyo., 418 P.2d 164, 166 (1966); Whiteley v. State of Wyoming, 293 F. Supp. 381, 383 (D.Wyo. 1968), rev'd on other grounds, sub nom. Whiteley v. Warden, 401 U.S. 560, 91 S. Ct. 1031, 28 L. Ed. 2d 306 (1971). And where the defendant has raised no question concerning the propriety of the amendment, he waives his right to attack it. Whiteley, supra, 418 P.2d at 166. Appellant was given notice of the charges against him, raised no objection to the peculiar procedure and, in fact, moved the court to consolidate the two informations for trial.
It is customary that an amended information be styled as such and that the same criminal action number be retained. Here the second information was not designated as an amendment and a second criminal action number was assigned. To proceed in this manner is misleading and confusing, but does not, however, constitute reversible error. It is well established that (formal defects in the pleadings not prejudicial to the defendant will be disregarded.)
"* * * [A]ny * * * defect or imperfection which does not tend to prejudice any substantial right of the defendant upon the merits or to mislead the defendant to his prejudice shall not be grounds for dismissal of the indictment or information or for reversal of a conviction. * *" Rule 9(a), W.R.Cr.P.
Even before this rule was adopted, this court had held that the amendment of an information was procedural and not jurisdictional. McGinnis v. State, 17 Wyo. 106, 96 P. 525 (1908); State v. Kusel, 29 Wyo. 287, 213 P. 367 (1923). More recent cases carry forth this rationale under the rules. Fuller v. State, Wyo., 568 P.2d 900 (1977); Sanville v. State, Wyo., 553 P.2d 1386 (1976). The amendment of an information is "one of form and not of substance." Valerio v. State, Wyo., 445 P.2d 752, 753 (1968).
Rule 9(c) allows amendment of an information only if no "additional or different" offense is charged. The amendment the second information does not charge appellant with an "additional or different" offense, because habitual criminality is not a *1340 crime, but serves only to enhance the punishment for the underlying felony.
Neither does the amendment prejudice substantial rights of the defendant. Rule 9(a), supra, provides that when the substantive rights of the defendant on the merits are protected, minor defects in the formal proceedings will be ignored.
The safeguards in habitual-criminal cases are set forth in § 6-1-111(b). See n. 3, supra.
Here, appellant was tried first on the burglary count. All reference to the prior convictions were excluded from the first stage by grant of defendant's motion. Only after appellant had been convicted of burglary was the jury informed of the habitual-criminal charges, and that trial was held the following morning. Thus, the proceedings followed in this case conform to what they would have been had one information (either an original or a properly denoted amended information) charged the defendant with both burglary and being an habitual criminal. Because the protections were the same and adequate, it is difficult to see how the result would have been different. No substantial right of the defendant was placed in jeopardy. In fact, appellant does not urge that the two informations served to prejudice his defense. Thus, the defects in the amended information are not grounds for reversal.
ONE SENTENCE
It is improper to impose two sentences, one for the underlying felony, and one for the habitual charges.
"The effect of two sentences would be tantamount to sentencing a defendant for being an ex-convict. Separate sentences would violate the double jeopardy prohibition." Evans v. State, supra, 655 P.2d at 1225.
A separate sentence cannot be imposed for an habitual-criminal conviction because there is no "crime" of habitual criminal. Evans v. State, supra, 655 P.2d at 1225.
We will hold that the trial judge imposed but one sentence: life imprisonment. The burglary sentence was enhanced on the basis of the jury finding that defendant was an habitual criminal as defined by § 6-1-110, supra.
The record fully supports our holding on this issue. Before oral sentencing, in a discussion with counsel, the trial judge said:
"* * * [A]s I understand, [we must] not regard this as two separate sentences but one enhancing sentencing." (Emphasis added.)
The trial judge then sentenced the defendant as follows:
"James Schuler, it will be Judgment and Sentence of the Court that in the burglary case, Case 8645, you be remanded to the custody of the Sheriff of Natrona County and be by him conducted to the Wyoming State Penitentiary, there to serve a term of not more than four years and not excuse me not less than four years and not more than eight years, with credit against both the minimum and maximum on account of the time that you may have spent in jail here, pursuant to this charge.
"That further, with respect to Case 8827, which is the habitual criminal charge, this sentence previously passed, I think is the way to say it, be enhanced per statute to a sentence of life imprisonment." (Emphasis added.)
The language in the two judgment and sentence orders parallels that at oral sentencing:
"NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that you, JAMES SCHULER, be remanded to the custody of the Sheriff of Natrona County, Wyoming, to await transfer to the Wyoming State Penitentiary in Rawlins, Wyoming, to serve a term of not less than four (4) years nor more than eight (8) years with credit for 248 days already served in the Natrona County Jail, to be deducted from both the minimum and maximum terms." Judgment and Sentence, Criminal Action No. 8645, dated January 11, 1983.
*1341 The judgment and sentence in Criminal Action 8827 again emphasizes that the sentence is enhanced:
"* * * to serve a term of life imprisonment which shall be an enhanced sentence for the imprisonment ordered in Criminal Action No. 8645, * * *." (Emphasis added.) Dated January 11, 1983.
In addition, a February 1, 1983, letter from the trial judge to defendant indicates that one sentence was imposed.
"There is but one sentence of life imprisonment in the burglary case, 8645; in that case the sentence to a term of years is enhanced to life by the separate action in which you are charged as an habitual criminal. I repeat; There is but one sentence for these two cases, not a sentence to a term of years in addition to a life sentence." (Emphasis added.)
We refer back to the language in Whiteley v. State of Wyoming, supra, 293 F. Supp. at 386, where the defendant also was sentenced first on the underlying felony and then given an enhanced sentence (although there was only one judgment and sentence form):
"The record does not support petitioner's claim that he was * * * given one penalty for the crime of breaking and entering and another penalty for being an habitual criminal."
In the instant case, both the sentencing record and the record as a whole are crystal clear. We have said that the record of judgment is not dispositive when it conflicts with the actual sentence imposed orally by the trial judge in open court. Lane v. State, Wyo., 663 P.2d 175 (1983). No such conflict between the two appears in this record.
We cannot say why the judge entered two sentence orders to impose but one sentence. Perhaps this was a response to the formal defect of two separately numbered informations filed in this case. At any rate, the language utilized by the trial judge at oral sentencing, in the orders and in the follow-up letter, leaves no doubt that a single, enhanced sentence was imposed.
PROBATION
The trial judge had no authority to consider probation or suspension of sentence and his failure to do so in this case was not error. Defendant was found guilty of burglary, under § 6-7-201, W.S. 1977.[5] Because of the habitual-criminal statute, § 6-1-110, supra, the burglary sentence was enhanced to life. Where a crime carries a mandatory life sentence, as does this appellant's enhanced conviction of burglary, the trial judge has no discretion to consider probation. Section 7-13-301, W.S. 1977,[6] specifically excludes from the trial court's discretion crimes for which a life sentence is mandatory. We adhere to the principle that habitual criminality is not a crime, but a status. Evans, supra, 655 P.2d at 1225. However, by virtue of a particular defendant's status as an habitual criminal, his sentence, for whatever his fourth felony may be, becomes life imprisonment. The defendant is not thereby sentenced to life imprisonment for the "crime" of being an habitual criminal. Rather, because he is an habitual criminal, he is sentenced to life imprisonment for his fourth felony.
By virtue of § 7-13-301, supra, the trial judge must consider probation or suspension of sentence in the sentencing phase, despite the fact that all criminal statutes prescribe mandatory minimum and maximum sentences. The trial judge must do this even in an habitual-criminal conviction *1342 under § 6-1-109, W.S. 1977,[7] which carries a 10-to-50-year sentence. It does not follow that the trial court must consider probation in an habitual-criminal conviction under § 6-1-110, supra, which carries a life sentence. Section 7-13-301, supra, specifically exempts crimes carrying mandatory life imprisonment from consideration of probation. The power to punish is with the legislature. Chavez v. State, Wyo., 604 P.2d 1341, 1353 (1979), cert. denied 446 U.S. 984, 100 S. Ct. 2967, 64 L. Ed. 2d 841 (1980). The courts can only impose such a sentence as is authorized by the legislature. Sorensen v. State, Wyo., 604 P.2d 1031, 1036 (1977). It is within the legislative prerogative thus to allow the trial judge discretion when a sentence is enhanced by § 6-1-109, supra, and to remove it when the sentence is enhanced by virtue of § 6-1-110, supra.
"* * * We further hold that § 7-13-301, W.S. 1977, is a proper exercise of an inherent legislative power to prohibit suspension of sentence in a given case. * * * "The legislature is free to retain or delegate sentencing discretion when defining and setting punishment. It may properly delegate sentencing discretion in part and retain sentencing discretion in part." Evans, supra, 655 P.2d at 1224.
The instant case is distinguishable from Peterson v. State, Wyo., 586 P.2d 144 (1978), where we held that the trial judge read § 7-13-301, supra, too narrowly in refusing to consider alternatives to life imprisonment. There the maximum statutory sentence was life imprisonment and the minimum was a term of years. We decided only that in such cases life imprisonment is not mandatory and thus the trial judge does have discretion to order probation under § 7-13-301, supra. However, under § 6-1-110, supra, the life sentence for the fourth felony is mandatory and it is improper for the trial judge to consider probation.
INCONSISTENT VERDICTS
Lastly, defendant appeals to this court to reverse his conviction on the burglary charges because the jury found his co-defendant guilty of the lesser-included crime, criminal trespass. The two verdicts are not inconsistent with the finding that defendant is guilty beyond a reasonable doubt of burglary. The evidence against the defendant and his co-defendant was not identical in all respects. The record reflects an adequate basis for finding defendant guilty of the specific-intent crime of burglary while finding that his co-defendant lacked the requisite intent to commit a felony within the building.
"Defendant argues that the convictions * * * must be reversed because of inconsistency with the verdicts acquitting his co-defendant * * *. The character and quality of the defenses of Hopkinson and Hickey were so different that the jury had a reasonable basis for return of different verdicts. Hopkinson had a motive * * *. No motivation is shown for Hickey * * *. In any event, consistency in verdicts is not required. Hamling v. United States, 418 U.S. 87, 101, 94 S. Ct. 2887, 2899, 41 L. Ed. 2d 590. See also United States v. Beitscher, 10 Cir., 467 F.2d 269, 274." United States v. Hopkinson, 631 F.2d 665, 668 (10th Cir.1980).
We affirm the judgment and the imposition of a single, enhanced life sentence for burglary.
NOTES
[1] Section 6-1-110, W.S. 1977 (now §§ 6-10-201 and 6-10-202, as revised by Ch. 75, 1982 S.L. of Wyoming and Ch. 171, 1983 S.L. of Wyoming) provides:
"Every person convicted in this state of a felony, who shall previously have been three (3) times convicted of a felony upon charges separately brought and tried, which have arisen out of separate occurrences either in this state or elsewhere, shall be punished by imprisonment in the state penitentiary for the term of his or her natural life; provided, that nothing in this act [§§ 6-1-109 to 6-1-111] shall abrogate or effect the punishment of death in any and all crimes for which the punishment of death is now, or hereafter, may be inflicted."
[2] Rule 16(b)(2), W.R.Cr.P. provides:
"(2) Defenses and Objections Which Must Be Raised. Defenses and objections based on defects in the institution of the prosecution or in the indictment or information other than that it fails to show jurisdiction in the court or to charge an offense may be raised only by motion before trial. The motion shall include all such defenses and objections then available to the defendant. Failure to present any such defense or objection as herein provided constitutes a waiver thereof, but the court for cause shown may grant relief from the waiver. Lack of jurisdiction or the failure of the indictment or information to charge an offense shall be noticed by the court at any time during the pendency of the proceeding."
[3] Section 6-1-111, W.S. 1977 (now § 6-10-203, as revised by Ch. 75, 1982 S.L. of Wyoming and Ch. 171, 1983 S.L. of Wyoming) provides:
"(a) In charging a person with being an habitual criminal, the information or indictment shall set forth the felony committed within the state and shall allege the two (2) or more previous convictions or felonies relied upon by the state.
"(b) The trial on the felony committed within the state shall proceed as in other cases, except that the jury shall not be informed of the previous convictions of felonies. If the jury returns a verdict of guilty, then the defendant shall be tried immediately by the same jury upon the issue of whether or not he has been previously convicted of two (2) or more felonies, unless the defendant has entered or enters a plea of guilty to the information or indictment charging the prior convictions.
"(c) In any trial under the provisions of this act [§§ 6-1-109 to 6-1-111], a duly authenticated copy of the record of former convictions and judgments of any court of record for any of the offenses charged against the defendant indicted or informed against by the state shall be prima facie evidence of such convictions and may be used in evidence against the defendant."
[4] Ordinarily the Supreme Court refrains from inquiring into questions not raised by the parties or trial court. Matter of Parental Rights of PP, Wyo., 648 P.2d 512 (1982); Pritchard v. State, Division of Vocational Rehabilitation, Wyo., 540 P.2d 523 (1975).
[5] Now § 6-3-301, W.S. 1977, as revised by Ch. 75, 1982 S.L. of Wyoming and Ch. 171, 1983 S.L. of Wyoming.
[6] Section 7-13-301, W.S. 1977, reads:
"After conviction or plea of guilty for any offense, except crimes punishable by death or life imprisonment, the court may suspend the imposition of sentence, or may suspend the execution of all or a part of a sentence and may also place the defendant on probation or may impose a fine applicable to the offense and also place the defendant on probation. With the consent of a defendant charged with a crime, except a crime punishable by death or life imprisonment, the court may suspend trial and place such defendant on probation."
[7] Now § 6-10-201, W.S. 1977, as revised by Ch. 75, 1982 S.L. of Wyoming and Ch. 171, 1983 S.L. of Wyoming.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1913447/
|
981 A.2d 934 (2009)
COM.
v.
SCHWARTZ.
No. 1081 EDA 2008.
Superior Court of Pennsylvania.
July 31, 2009.
Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/2981816/
|
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0477n.06
No. 12-1778 FILED
May 13, 2013
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
LEAH ALLYN NORTON, )
) ON APPEAL FROM THE
Plaintiff-Appellee, ) UNITED STATES DISTRICT
) COURT FOR THE WESTERN
v. ) DISTRICT OF MICHIGAN
)
HEATHER STILLE, in her individual capacity, ) OPINION
)
Defendant-Appellant. )
BEFORE: KEITH, COLE and ROGERS, Circuit Judges.
COLE, Circuit Judge. This case comes to us on interlocutory appeal from a district court’s
denial of Defendant-Appellant Sheriff Deputy Heather Stille’s motion requesting summary
judgment. Plaintiff-Appellee Leah Norton brought a § 1983 suit against Stille alleging that Stille
used excessive force when booking Norton into federal district court lock-up. The district court held
that, taking the facts in the light most favorable to Norton, Stille was not entitled to summary
judgment on qualified immunity. We affirm.
I.
The facts in this case, although caught on audio-less video tape, are still highly disputed.
They are presented below in the light most favorable to Norton, the non-moving party, as assumed
by the district court for purposes of the summary judgment motion. See Sabo v. City of Mentor, 657
F.3d 332, 336 (6th Cir. 2011) (holding that on interlocutory appeals for summary judgment on the
No. 12-1778
Norton v. Stille
grounds of qualified immunity this court has jurisdiction over only legal issues and must adopt the
district court’s version of the facts).
On October 12, 2010, the day of the incident, Norton was a fifty-eight-year-old woman with
bipolar disorder and a history of panic attacks. She stood five-feet four-inches tall, weighed 130
pounds, and used a four-wheel handicap scooter for mobility due to a recent surgery on her right
foot. She also wore a boot on her injured foot. Stille was five-feet two-inches tall and weighed 105
pounds at the time of the incident.
Norton—unaware of the jury selection date and time—was fined $150 for not being present
to pick a jury in a misdemeanor trespass case against her. She did not have $150 with her and was
therefore remanded into custody for contempt of court until her husband could provide the funds.
Unnerved, she began to devolve into a panic attack when placed into custody.
Norton was escorted by a bailiff to the booking area where Stille was on duty. There,
according to Norton, she asked for a minute to compose herself due to her anxiety and panic. Stille
asked her to remove her jewelry, and Norton complied. Norton then said she needed to blow her
nose and picked up a roll of toilet tissue from the booking desk. Stille said “I’ll tell you when you
can use a tissue,” and took the tissue out of Norton’s hand. Norton, while still suffering from the
panic attack, then picked up a paper towel to blow her nose as well as a bottle of soda, stating that
she needed something to drink. At that point, Stille grabbed Norton’s arm in order to get her to drop
the soda bottle. Stille and Norton struggled over the bottle for a few seconds, until it dropped to the
floor. According to Norton, and as found by the district court, the bottle was never raised into a
position that was “even remotely threatening to the officer.”
-2-
No. 12-1778
Norton v. Stille
After the bottle had fallen to the floor, and any conceivable threat to Stille had dissipated,
Stille pulled Norton’s left arm behind her back, swinging Norton off her scooter, pushing the scooter
against the wall and breaking Norton’s arm. Norton informed Stille that her arm was broken and
Stille responded, “Yes, I know.” According to Norton the break was audible. Norton was pinned
against the wall and unstable at this point. Stille then proceeded to use a takedown technique so that
Norton ended up facedown on the floor. Norton’s arm was broken another time during the
takedown. Norton then passed out from the pain. Norton’s arm was broken in three separate places
as a result of the encounter and she remains permanently disabled.
On October 11, 2011, Norton filed suit against Stille in the United States District Court for
the Western District of Michigan under 42 U.S.C. § 1983 and Michigan common law, seeking
damages for excessive force and assault and battery. Stille filed a motion for summary judgment
arguing that Norton’s suit is barred by the Heck bar—a doctrine that prohibits federal lawsuits which
assert a theory inconsistent with existing criminal judgments—and asserting qualified immunity.
See Heck v. Humphrey, 512 U.S. 477 (1994). The district court denied the motion in an oral opinion
on May 30, 2012, holding that Stille was not entitled to qualified immunity and that the Heck
doctrine did not apply.
Stille filed a timely appeal. We address these claims in turn.
II.
Qualified immunity protects government officials from liability for discretionary functions
performed in the course of duty so long as “their conduct does not violate clearly established
statutory or constitutional rights of which a reasonable person would have known.” Harris v. City
-3-
No. 12-1778
Norton v. Stille
of Circleville, 583 F.3d 356, 364-65 (6th Cir. 2009) The district court held that Stille was not
entitled to qualified immunity with regard to Norton’s claims because Norton’s constitutional right
to be free from excessive force was clearly established at the time of the incident and a reasonable
jury could find that Stille violated that right.
This Court has jurisdiction under 28 U.S.C. § 1291 to hear appeals only from “final
decisions” of the district court. “A district court’s denial of qualified immunity is a final decision
for purposes of § 1291 only to the extent that it turns on an issue of law.” Harris, 583 F.3d at 364
(citation omitted). “[I]nterlocutory jurisdiction is conferred only where the defendant’s appeal
involves the abstract or pure legal issue of whether the facts alleged by the plaintiff constitute a
violation of clearly established law.” Bomar v. City of Pontiac, 643 F.3d 458, 461 (6th Cir.
2011)(internal quotations and citation omitted). “[W]e lack jurisdiction to consider a district court’s
summary judgment order insofar as that order determines whether or not the pretrial record sets forth
a ‘genuine’ issue of fact for trial.” Sabo, 657 F.3d. at 336 (citations and internal quotations omitted).
As far as Stille has challenged Norton’s version of the facts, we are without jurisdiction. See id.
“That the Defendant[] here make[s] the occasional factual argument does not, however, destroy
jurisdiction over the legal issues presented.” Harris, 538 F.3d at 364. This Court therefore considers
only the legal question of whether the facts adopted by the district court constitute a violation of
clearly established law, ignoring any attempt by Stille to dispute the version of the facts adopted by
the district court. We review this question de novo. Id.
In assessing a claim for qualified immunity we engage in a two-step analysis: First, taking
into account the totality of the circumstances, we determine if “the facts alleged show the officer’s
-4-
No. 12-1778
Norton v. Stille
conduct violated a constitutional right.” Saucier v. Katz, 533 U.S. 194, 201 (2001). If so, we
determine whether the right in question was clearly established at the time of the incident. Pearson
v. Callahan, 555 U.S. 223, 232 (2009) (citing Saucier, 533 U.S. at 201).
A.
A claim for excessive force during a seizure or booking arises under the Fourth Amendment
and its objective reasonableness standard. Phelps v. Coy, 286 F.3d 295, 299 (6th Cir. 2002). In
deciding if an officer’s use of force was reasonable under the Fourth Amendment, we balance “the
nature and quality of the intrusion on the individual’s Fourth Amendment interests against the
countervailing governmental interests at stake.” Graham v. Connor, 490 U.S. 386, 396 (1989).
“The ‘reasonableness’ of a particular use of force must be judged from the perspective of a
reasonable officer on the scene, rather than with the 20/20 vision of hindsight.” Id. Proper
application of the reasonableness test requires attention to particular aspects of each individual case,
“including the severity of the crime at issue, whether the suspect poses an immediate threat to the
safety of the officers or others, and whether he is actively resisting arrest or attempting to evade
arrest by flight.” Id. Our analysis contains built-in deference to officers’ frequent need to make
split-second decisions. Burchett v. Kiefer, 310 F.3d 937, 944 (6th Cir. 2002). In making the
reasonableness determination, a court should consider the totality of the circumstances. Graham,
490 U.S. at 396.
Taking the district court’s version of the facts, Stille’s use of force was unreasonable and a
violation of Norton’s Fourth Amendment rights. All of the Graham factors—severity of the crime,
whether the suspect poses an immediate threat to the safety of the officers or others, and whether she
-5-
No. 12-1778
Norton v. Stille
is actively resisting arrest or attempting to evade arrest by flight—favor a finding of excessive force.
Graham, 490 U.S. at 396. First, Norton’s crime was not particularly serious. See id. She was being
booked for failure to pay a $150 contempt of court fine because she did not show up for jury
selection on a misdemeanor charge. See Harris, 583 F.3d at 366 (finding that non-violent crimes
are not particularly serious in the Graham analysis).
Second, Norton never posed any real threat to Stille. See Graham, 490 U.S. at 396. Norton
was a handicapped fifty-eight-year-old woman constrained by a motorized scooter. Although she
displayed some passive resistance—she grabbed the paper towel and the soft drink knowing Stille
had not given her permission for these actions—the bottle was never placed in a position that Stille
could have reasonably interpreted as threatening.
Stille, at most, was “justified only [using] the amount of force that a reasonable officer in the
heat of the moment could have believed was needed to end [Norton]’s passive resistance.” Shreve
v. Jessamine Cnty. Fiscal Court, 453 F.3d 681, 687 (6th Cir. 2006). Stille’s use of force far
exceeded this standard. During the takedown, Norton’s arm was broken twice in three separate
places. The first break did not occur until long after the bottle had already dropped to the floor. At
that point, any arguable threat to Stille from the bottle had been eliminated. After the first break,
Stille had Norton pinned against the wall and partially removed from her scooter. She was informed
that Norton’s arm was broken. Norton is said to have been “unstable” at that point. Stille, ignoring
the audible first break in Stille’s arm, proceeded to “take Norton down” breaking her arm a second
time and eventually leaving her permanently disabled. “[E]ven to a reasonable [officer] in the heat
-6-
No. 12-1778
Norton v. Stille
of the moment, the [officer’s] interest in [controlling the situation] could not have justified” breaking
the arm of a disabled woman two separate times when she posed no danger to the officer. Id.
Finally, Norton was not actively resisting arrest or attempting to evade arrest by flight. See
Graham, 490 U.S. at 396. Although Norton may have defied Stille by grabbing a tissue, paper
towels and a soda bottle, there is no indication that she was actively resisting or trying to flee.
Norton was not only contained in a secure area, with other officers around, but she was limited in
movement by the scooter and boot on one foot. It is hardly plausible that she would be fleeing
anywhere quickly.
Taking into account the totality of the circumstances and balancing “the nature and quality
of the intrusion on the individual’s Fourth Amendment interests against the countervailing
governmental interests at stake,” id., Stille’s use of force was excessive. Considering the facts in the
light most favorable to Norton, it is difficult to conceive of any reasonable purpose that Stille would
have had for breaking Norton’s arm the first time, and it is even harder to justify the take down,
when Stille allegedly knew Norton’s arm was already broken. Stille had control of the situation, and
given that Norton posed no identifiable threat to her safety, Stille’s use of force was unreasonable
and therefore violated Norton’s Fourth Amendment right to be free from excessive force.
B.
We must also determine if Norton’s rights were clearly established at the time of the incident.
Saucier, 533 U.S. at 201. The relevant question is if it would have been “clear to a reasonable
officer that [her] conduct was unlawful in the situation [s]he confronted.” Id. at 202. A plaintiff
must show that“[t]he contours of the right . . . [were] sufficiently clear that a reasonable official
-7-
No. 12-1778
Norton v. Stille
would understand that what [she was] doing violate[d] that right.” Anderson v. Creighton, 483 U.S.
635, 640 (1987). However, “there need not be a case with the exact same fact pattern, or even
‘fundamentally similar’ or ‘materially similar’ facts; rather, the question is whether the defendants
had ‘fair warning’ that their actions were unconstitutional.” Cummings v. City of Akron, 418 F.3d
676, 687 (6th Cir. 2005) (quoting Hope v. Pelzer, 536 U.S. 730, 741 (2002)).
It is clearly established that officers may not use force on a detainee who is subdued and
controlled. See, e.g., Grawey v. Drury, 567 F.3d 302, 314 (6th Cir. 2009). “[P]eople who pose no
safety risk to the police [have a right] to be free from gratuitous violence during arrest.” Shreve, 453
F.3d at 688. When force is used on a detainee who poses no threat to officers or anyone else, that
force is excessive and it is a violation of the detainee’s Fourth Amendment rights. Griffith v.
Coburn, 473 F.3d 650, 659-60 (6th Cir. 2007).
As discussed above, any conceivable threat to Stille had been eliminated long before
Norton’s arm was broken. After the bottle was already on the floor, Stille broke Norton’s arm by
pushing her up against a wall, and then broke it again by taking her down to the floor. It was clearly
established law at the time of the incident that applying force to an incapacitated, subdued detainee
was excessive. Therefore, it would have been clear to a reasonable officer that Stille’s actions were
unlawful at the time of the incident.
C.
Because Stille’s actions, based on the facts as alleged by Norton and assumed by the district
court for summary judgment purposes, were a violation of Norton’s Fourth Amendment rights and
-8-
No. 12-1778
Norton v. Stille
those rights were clearly established at the time of the incident, Stille is not entitled to summary
judgment on the basis of qualified immunity.
III.
Stille additionally appeals the district court’s refusal to bar Norton’s suit under Heck v.
Humphrey, 512 U.S. 477 (1994). The Heck doctrine has been interpreted to bar § 1983 suits that are
attempts to invalidate a conviction. Schreiber v. Moe, 596 F.3d 323, 334 (6th Cir. 2010). After her
exchange with Stille during booking, Norton was charged under Michigan Compiled Laws
§ 750.81d(1) for obstructing and resisting. Stille argued on summary judgment that Heck bars
Norton’s suit. The district court dismissed this argument and Stille urges us to review this judgment
on appeal. This Court, however, has no jurisdiction to do so.
The collateral order doctrine allows appeals from “a small category of decisions,” which are
“conclusive, . . . resolve important questions separate from the merits, and . . . are effectively
unreviewable on appeal from the final judgment in the underlying action.” Swint v. Chambers Cnty.
Comm’n, 514 U.S. 35, 42 (1995). The Supreme Court has cautioned, and this Court has held, that
an appellate court’s discretion in exercising jurisdiction over issues which are not directly reviewable
is very limited. Id. at 42-51; Vakilian v. Shaw, 335 F.3d 509, 521 (6th Cir. 2003). The parties do
not dispute that the district court’s holding on the Heck issue is not independently reviewable under
the collateral order doctrine; interlocutory review is permitted only if this court can exercise pendent
appellate jurisdiction over the issue.
-9-
No. 12-1778
Norton v. Stille
In order to exercise pendent appellate jurisdiction over a claim that is not independently
appealable, the claim must either be inextricably intertwined with the appealable issue or must be
“necessary to ensure meaningful review” of the appealable issue. Swint, 514 U.S. at 51.
“Inextricably intertwined” has been interpreted by this Circuit “to mean that the resolution of the
appealable issue ‘necessarily and unavoidably’ decides the non-appealable issue.” Vakilian, 335
F.3d at 521; see also, e.g., Chambers v. Ohio Dep’t. of Human Servs., 145 F.3d 793, 797 (6th Cir.
1998) (“[S]uch jurisdiction only may be exercised when the appealable issue at hand cannot be
resolved without addressing the non-appealable collateral issue.”). This Court has similarly declined
to exercise jurisdiction when resolving the issues requires application of separate or distinct legal
questions. Summers v. Leis, 368 F.3d 881, 889-90 (6th Cir. 2004) (declining to review the district
court’s decision not to abstain under Younger because the issue required the application of “distinct
legal standards” from the qualified immunity analysis over which the Court had jurisdiction).
The Heck issue is neither inextricably intertwined with, nor “necessary to ensure meaningful
review” of, the qualified immunity claim. See Swint, 514 U.S. at 51. First, the analysis of the
qualified immunity question did not “necessarily and unavoidably” decide the Heck question. If we
were to resolve the Heck issue it would require a careful analysis of the Michigan criminal law,
specifically M.C.L. § 750.81d(1) under which Norton was convicted, and its interaction with the
Fourth Amendment. No such analysis was required for the qualified immunity claim. Therefore,
separate and distinct legal standards and questions apply to each of the two issues and the Heck issue
is not inextricably intertwined with the qualified immunity claim.
- 10 -
No. 12-1778
Norton v. Stille
The Heck issue is furthermore not “necessary to ensure meaningful review” of the qualified
immunity claim. The qualified immunity claim has been analyzed and would not benefit from
consideration of the Heck issue. Cf. Cunningham v. Gates, 229 F.3d 1271, 1285 (9th Cir. 2000)
(“The Heck issue is not ‘inextricably intertwined’ with the qualified immunity issues properly before
us in interlocutory appeal, nor is it necessary to decide the issue to ensure meaningful review of the
defendants’ qualified immunity claims.”); Limone v. Condon, 372 F.3d 39, 51 (1st Cir. 2004) (“Here,
the linchpin [qualified immunity] issue and the pendent [Heck] issue cannot fairly be described as
intertwined, let alone inextricably intertwined.”).
IV.
For the foregoing reasons we affirm the district court on the issue of qualified immunity and
find that we lack pendent appellate jurisdiction to hear the Heck claim.
- 11 -
|
01-03-2023
|
09-22-2015
|
https://www.courtlistener.com/api/rest/v3/opinions/1279864/
|
156 Wis. 2d 752 (1990)
457 N.W.2d 557
GENERAL CASTINGS CORPORATION, and Employers Mutual Casualty Company, Plaintiffs-Respondents,
v.
Lois WINSTEAD, Defendant-Appellant,[]
LABOR & INDUSTRY REVIEW COMMISSION, Defendant.
No. 89-2205.
Court of Appeals of Wisconsin.
Submitted on briefs May 2, 1990.
Decided May 23, 1990.
*754 On behalf of the defendant-appellant, the cause was submitted on the briefs of David L. Weir of Zubrensky, Padden, Graf & Maloney of Milwaukee.
On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Patti J. Kurth and Michael C. Frohman of Kasdorf, Lewis & Swietlik, S.C. of Milwaukee.
Before Nettesheim, P.J., Brown and Scott, JJ.
NETTESHEIM, P.J.
Lois Winstead, a former employee of the now defunct General Castings Corporation, appeals from a circuit court judgment reversing a decision and order of the Labor and Industry Review Commission (LIRC) awarding worker's compensation benefits to Winstead pursuant to sec. 102.565, Stats., for a nondisabling silicosis disease. Since Winstead's employment terminated because General Castings closed its foundry operation and not because of Winstead's nondisabling silicosis, we conclude the circuit court properly reversed the LIRC decision.
The facts are not disputed. General Castings operated an industrial foundry in Waukesha, Wisconsin. Winstead began working for General Castings at the age of twenty-one in November 1956. During his employment over the next thirty years, Winstead was extensively exposed to fumes from molds and to sand dust.
*755 On January 30, 1987, General Castings shut down its foundry operations. As a result, all General Castings employees, including Winstead, were terminated. Prior to the termination, Winstead had not been treated for any lung problems or disease, nor did he have any reason to believe that his ability to perform foundry work was restricted because of such problems. Winstead did not learn of his silicosis disease until September 1987after his employment with General Castings had concluded.
After the silicosis diagnosis, Winstead was medically instructed to not engage in foundry work. Winstead followed this advice and as a result suffered a wage loss. Winstead then initiated this claim pursuant to sec. 102.565(1), Stats., which allows the department to award wage loss compensation not to exceed $13,000 to an employee rendered susceptible to disability as the result of exposure to "toxic or hazardous substances or conditions" when such employee is "discharged from or ceases to continue the employment."
General Castings argued that the phrase "ceases to continue the employment" requires linkage between the employee's medical condition and the employment cessation. The Administrative Law Judge (ALJ) disagreed, concluding that the phrase "ceases to continue the employment" embraced the facts of this case where the employer, General Castings, had shut down its operations. Thus, the ALJ ruled that Winstead did not have to show that he ceased his employment with General Castings due to his nondisabling silicosis. Instead, the ALJ held that Winstead only had to "show that because of the silicosis he [Winstead] is unable to return to foundry work." The ALJ reasoned that to hold otherwise would render sec. 102.565(1), Stats., meaningless in a plant closure situation where the employee did not know of the nondisabling disease at the time of the shutdown. *756 The ALJ awarded Winstead $9928 in lost wages. LIRC affirmed the award.
General Castings sought judicial review. In its written decision, the circuit court noted the strong equitable arguments in favor of Winstead's position. However, after examining the statute and its history, the court concluded that the statutory language required that the employee's termination be linked to the specific employment which caused the susceptibility to the disease. The court therefore reversed the LIRC award. Winstead appeals to us.
[1]
We first address our standard of review. As to the circuit court ruling, our scope and standard of review is the same as that applied by the circuit court. Probst v. LIRC, 153 Wis. 2d 185, 190, 450 N.W.2d 478, 480 (Ct. App. 1989). This court owes no deference to the decision of the circuit court. Id.
[2-4]
This case requires us to interpret sec. 102.565(1), Stats. Where the interpretation of a statute is involved, a question of law is presented and we generally are not required to follow the agency interpretation. Probst, 153 Wis. 2d at 190, 450 N.W.2d at 480. However, when an administrative agency determination requires a value judgment premised upon the agency's expertise, we must accord the agency determination great weight, although it is not controlling. Id. We defer to such an agency conclusion if it is reasonable. Id.
However, sec. 102.565(1), Stats., has not previously been construed by the agency or the appellate courts of this state. The Wisconsin Supreme Court recently addressed whether the "great weight" deferential standard of review applies to an agency decision construing a statute which had not been previously interpreted by the *757 agency or the appellate courts in Drivers Local No. 695 v. LIRC, 154 Wis. 2d 75, 452 N.W.2d 368 (1990) (Drivers II). Drivers II acknowledges the traditional "practical interpretation" rulethat great weight is to be given to statutory applications or interpretations that have a rational basis. Id. at 83, 452 N.W.2d at 371. This approach recognizes that regular and repeated interpretations of statutes or rules that have been applied in practice by an agency charged with the special duty of administering the statute are presumed to be premised upon some special expertise not acquired by the courts. Id. at 83, 452 N.W.2d at 371-72.
This court in Drivers I believed that deference was appropriate because the agency was charged with administering the statute in question. Drivers Local No. 695 v. LIRC, 147 Wis. 2d 640, 642, 433 N.W.2d 638, 640 (Ct. App. 1988) (Drivers I), rev'd, 154 Wis. 2d 75, 452 N.W.2d 368 (1990). Such deference was premised upon the agency's experience, technical competence and specialized knowledge in applying the statute. West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 12, 357 N.W.2d 534, 539 (1984); see also Drivers II, 154 Wis. 2d at 88, 452 N.W.2d at 374 (Abrahamson, J., dissenting). However, Drivers II clarifies that such deference is not appropriate where the statutory construction is not the result of a "course of uniform interpretation over a period of time." Drivers II, 154 Wis. 2d at 84, 452 N.W.2d at 372.
[5]
Section 102.565(1), Stats., in its present form, has not been previously interpreted by the agency or the appellate courts. Therefore, our standard of review pursuant to Drivers II is de novo and "we give the application of the statute to the facts a new look as a matter of *758 original statutory interpretation by this court." Drivers II, 154 Wis. 2d at 84, 452 N.W.2d at 372.
Section 102.565(1), Stats., reads in relevant part:
Toxic or hazardous exposure; medical examination; conditions of liability. (1) When an employe working subject to this chapter, as a result of exposure in the course of his or her employment over a period of time to toxic or hazardous substances or conditions, develops any clinically observable abnormality or condition which, on competent medical opinion, predisposes or renders the employe in any manner differentially susceptible to disability to such an extent that it is inadvisable for the employe to continue employment involving such exposure and the employe is discharged from or ceases to continue the employment, and suffers wage loss by reason of such discharge, or such cessation, the department may allow such sum as it deems just as compensation therefor, not exceeding $13,000. [Emphasis added.]
Winstead argues that the phrase "ceases to continue the employment" refers to his employment as a foundry worker generally and not to his specific employment as a foundry worker with General Castings. Thus, he reasons that his medical inability to pursue foundry work after General Castings' closurenot the closure itselfwas the event which "ceased" his employment within the meaning of the statute. We disagree.
[6, 7]
Winstead's construction views the phrase "ceases to continue the employment" in a vacuum without giving proper consideration to the entire language of the statute as a whole. In ascribing a meaning to the words of a statute, the words are to be considered in their context within the statutory section as a whole. Falkner v. Northern States Power Co., 75 Wis. 2d 116, 124, 248 *759 N.W.2d 885, 890 (1977). A statute should be construed to give effect to its leading idea and should be brought into harmony with its purpose. State v. Wimmer, 152 Wis. 2d 654, 660, 449 N.W.2d 621, 623 (Ct. App. 1989).
The "leading idea" and purpose of sec. 102.565(1), Stats., is to compensate an employee who develops a medically diagnosed condition which renders the employee susceptible to disability as the result of employment exposure to toxic or hazardous substances or conditions. Having established that this employment-related condition exists, the employee must additionally demonstrate: (1) that it is medically inadvisable to continue the employment involving such exposure; and (2) that the employee has been discharged from or has ceased the employment. Id.
[8]
The scheme and language of this statute clearly connotes that the word employment, as variously used in the statute, refers to the specific employment which caused the risk in the first place. In its opening segment, the statute speaks of employment exposurean event which obviously is linked to specific employment or employments. Yet, when the statute later speaks of employment cessation, Winstead contends that the legislature meant the employee's occupation, not the specific employment. We reject an interpretation which ascribes different meanings to the same word as it variously appears in a statute unless the context clearly requires such an approach. This is all the more true where, as here, the word reappears in the same sentence of the statute at issue. Such an interpretation borders on the unreasonable. We must avoid such interpretations. See Riley v. Doe, 152 Wis. 2d 766, 770, 449 N.W.2d 83, 84 (Ct. App. 1989).
*760 Section 102.565(1), Stats., was amended to its present form by sec. 28, ch. 278, Laws of 1979, effective May 13, 1980. Winstead argues that an analysis of the statute prior to this amendment demonstrates legislative intent to compensate employees in a plant closure situation. However, the "predecessor" statute Winstead quotes without citation we discovered in sec. 102.565(1), Stats. (1935). This statute was repealed and recreated by ch. 180, Laws of 1937. Since then, the statute has undergone numerous changes. We do not see a fifty-three-year-old legislative repeal as meaningfully bearing upon the interpretation of a statute which did not assume its present form until 1980.
[9]
Winstead argues that our construction of sec. 102.565(1), Stats., renders the law meaningless in a plant closure case where the employee is unaware of his employment-related medical condition at the time of the shutdown. This same concern was recited by the ALJ in his ruling. We fully agree with Winstead that this is the effect of our interpretation of the statute, for we conclude that this is precisely what the legislature intended.
Whether the statute should be further expanded to cover Winstead's situation is a matter of public policy for the legislature. It is not one for us to "judicially legislate." We recognize and respect the body of law which holds that the worker's compensation act should be liberally construed to effect as fully as possible its beneficent objective. See West Allis School Dist. v. DILHR, 116 Wis. 2d 410, 422, 342 N.W.2d 415, 422 (1984). This principle assumes that the act applies in the first instance. It does not here.
By the Court.Judgment affirmed.
NOTES
[] Petition to review denied.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1323957/
|
554 S.E.2d 204 (2001)
251 Ga. App. 295
MOORE
v.
The STATE.
No. A01A2186.
Court of Appeals of Georgia.
August 9, 2001.
Reconsideration Denied August 20, 2001.
Certiorari Denied January 9, 2002.
*205 William D. Moore, pro se.
Kenneth W. Mauldin, Dist. Atty., Phillip C. Griffith, Asst. Dist. atty., for appellee.
ELLINGTON, Judge.
William D. Moore appeals from the denial of his motion to vacate an illegal sentence. Finding no error, we affirm.
An Athens Clarke County jury convicted Moore of armed robbery, OCGA § 16-8-41. On May 6, 1992, he was sentenced as a recidivist to life imprisonment without the possibility of parole, pursuant to former OCGA § 17-10-7(b).[1] That statute read as follows:
Any person who, after having been convicted under the laws of this state for three felonies ..., commits a felony within this state other than a capital felony, must, upon conviction for such fourth offense or for subsequent offenses, serve the maximum time provided in the sentence of the judge based upon such conviction and shall not be eligible for parole until the maximum sentence has been served.
Ga. L. 1984, p. 760, § 2. Upon a finding that the defendant is a recidivist under this provision, the mandatory sentence for an armed robbery is imprisonment for life without parole. OCGA § 16-8-41(b) (Ga.L. 1985, p. 1036, § 1); Howard v. State, 233 Ga.App. 724-725(1), 505 S.E.2d 768 (1998).
During sentencing on Moore's armed robbery, the State presented evidence that Moore pled guilty on October 22, 1974, to murder and was sentenced to life imprisonment. On the same day that he pled guilty to murder, Moore also pled guilty to robbery by force against a separate victim, and was sentenced to 20 years imprisonment. The State also showed that, in February 1992, Moore pled guilty to armed robbery and was sentenced to a 20-year term to run concurrent with his life sentence.
Moore appealed his conviction, which was affirmed by this Court. Moore v. State, 207 Ga.App. 802, 430 S.E.2d 115 (1993). Moore filed a habeas corpus petition in 1997, raising ineffective assistance of counsel. On December 27, 2000, Moore filed a motion to vacate, correct, or modify his sentence. The trial court denied the motion on April 27, 2001, and this appeal followed.
1. Moore contends the aforementioned murder and robbery by force should be treated as one felony, not two, for recidivist sentencing purposes. Moore argues that, because the pleas were entered on the same day and resulted from a two-day "crime spree," the felonies were "consolidated for trial" and must be treated as one felony pursuant to OCGA § 17-10-7(c).[2] Under this statute, for recidivist sentencing purposes, "conviction of two or more crimes charged ... in two or more indictments or accusations consolidated for trial[ ] shall be deemed to be only one conviction."
The trial court, however, specifically found that the murder and robbery by force had not been "consolidated for trial" just because Moore "entered guilty pleas and was sentenced on the same day and ... the sentences ran concurrent[ly]." We agree. The convictions at issue arose from separate *206 crimes against different victims which occurred on different days. They were indicted separately, and a separate sentencing order was entered on each indictment. "Under these circumstances, the fact that the sentences were entered on the same day and that the sentences on the one charge ran concurrent with the other sentence does not require the conclusion that the two prior convictions had been "consolidated for trial" within the meaning of OCGA § 17-10-7(c)." (Citation and punctuation omitted.) Thompson v. State, 237 Ga.App. 466, 471(6), 517 S.E.2d 339 (1999). See also Philmore v. State, 263 Ga. 67, 70(6), 428 S.E.2d 329 (1993); Robinson v. State, 232 Ga.App. 280(2), 501 S.E.2d 536 (1998). Cf. Stone v. State, 245 Ga.App. 728, 729, 538 S.E.2d 791 (2000) (when a single incident gives rise to multiple offenses, they should be considered as one conviction for recidivist sentencing purposes, regardless of whether the defendant went to trial or pled guilty on the charges). The record supports the trial court's finding that, for the purpose of recidivist sentencing, the prior convictions were not consolidated for trial.
2. We have examined Moore's remaining enumerations of error and find them to be without merit.
Judgment affirmed.
JOHNSON, P.J., and RUFFIN, J., concur.
NOTES
[1] Currently OCGA § 17-10-7(c).
[2] Currently OCGA § 17-10-7(d).
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1874008/
|
752 N.W.2d 452 (2008)
IN RE ESTATE OF GUTHRIE.
No. 07-1427.
Court of Appeals of Iowa.
May 14, 2008.
Decision without published opinion. Affirmed.
|
01-03-2023
|
10-30-2013
|
https://www.courtlistener.com/api/rest/v3/opinions/1902213/
|
390 So. 2d 370 (1980)
RODEWAY INNS OF AMERICA, an Arizona Corporation, Rodeway Inns of America, a Nevada Corporation; and Rodeway Inn-Clearwater, Ltd., a Florida Limited Partnership, Appellants,
v.
Robert E. ALPAUGH and Kathleen P. Alpaugh, His Wife; Charles W. Birdsong, Sr., and Dorothy Birdsong, His Wife; and E. Eugene Sitton and Donna L. Sitton, His Wife; and Abs, Inc., Appellees.
No. 79-1452.
District Court of Appeal of Florida, Second District.
October 10, 1980.
Rehearing Denied November 26, 1980.
J. Philip Plyler of Hill, Hill & Dickenson, Tampa, for appellants.
*371 Milton D. Jones of Wightman, Weidemeyer, Jones & Turnbull, Clearwater, for appellees.
OTT, Judge.
The judgment below holds appellant liable on a mortgage which it had placed on the premises in order to obtain financing to construct a motel thereon, even though appellee owners had evicted appellant and taken possession. We affirm the judgment, but deem it worthwhile to explain why that result was proper.
The pertinent facts are quite simple. Rodeway leased appellees' land for 55 years for the purpose of constructing and operating a motel thereon. In order for Rodeway to obtain construction financing, appellees agreed to become signatories to a mortgage on the premises, which provided in pertinent part:
20. The undersigned by their joinder in this mortgage do hereby subordinate and make inferior any and all rights they have or in the future may have by virtue of any lease agreement by or between them on above described property and covenant that no parties are in possession other then mortgagors.
21. The Owner joins in the execution of this mortgage solely for the purpose of constituting this mortgage a first lien upon the fee simple title to the premises herein described and the Owner shall have no personal liability for the payment of any sums secured by this Mortgage and no personal liability or personal judgment may ever be taken against the Owner by reason of its execution hereof.
Pursuant to and consonant with that concession by appellees, Rodeway agreed in the lease (as amended) that:
Article X
Remedies
Section 1. Defaults. The LESSOR may terminate this lease or may evict the LESSEE from the premises and re-let the same for the account of the LESSEE upon the happening of any one of the following events: (a) failure of the LESSEE to pay the rent ...; (b) failure to pay real estate taxes ...; (c) failure to pay the monthly mortgage installment... .
Section 2. Re-entry. Upon the occurrence of any defaults hereinabove provided for or otherwise provided by law, whether the LESSOR elects to terminate this lease or evict the LESSEE and retake the premises for the account of the LESSEE, the LESSOR shall have the right to re-enter the premises.... Upon and after such re-entry by the LESSOR the LESSEE shall remain liable to pay the mortgage... .
Due to various local and national problems in the economy, the motel was not a success. Rodeway defaulted in payment to suppliers, to appellees for rent, and on the mortgage to the construction financier. Appellees terminated the lease, regained possession of the premises with Rodeway's acquiescence, paid the delinquent operating expenses and brought the mortgage current. They then brought this action and obtained judgment for reimbursement of all such payments, and for collection of the rent accruing prior to the termination of the lease.
This appeal by Rodeway attacks only the portion of the judgment granting reimbursement for the mortgage payments which fell due after the termination of the lease. What Rodeway does not contend on this appeal is as revealing and significant as what it does contend. First, it makes no contention at any time that the provisions of the lease are in any way ambiguous. Moreover, although it advances many reasons for avoiding its obligation to satisfy the mortgage regardless of appellees' termination of the lease and repossession of the premises, Rodeway never once denies that the literal language of the lease requires it to do so. Equally significant is the fact that Rodeway has never claimed that its officers who negotiated and signed the lease were in any way misinformed or otherwise laboring under a mistaken impression of the effect of such language. Moreover, *372 Rodeway has never denied that the lease was terminated. In fact, that was expressly asserted to be so in the affirmative defenses Rodeway attempted to raise in the trial court.
In the absence of contrary agreement, a landlord whose tenant has defaulted in payment of rent can re-enter and dispossess the tenant. §§ 83.05 et seq., Fla. Stat. If there is a lease, however, its provisions are conclusively controlling, and a court will not substitute its judgment for that of the parties by rewriting that lease.[1]S.H. Kress & Co. v. Desser & Garfield, Inc., 193 So. 2d 192 (Fla. 3d DCA 1966). Although the Florida Residential Landlord & Tenant Act (§§ 83.40 et seq., Fla. Stat.) permits courts to override the terms and conditions of residential leases if they are deemed inequitable, there is no such control over business leases. As to those, the rule governing contracts in general is applicable-a party will not be relieved of obligations deliberately undertaken merely because they prove burdensome or otherwise improvident. Nussey v. Caufield, 146 So. 2d 779 (Fla. 2d DCA 1962).
To counteract that general rule, Rodeway relies almost exclusively on Mandell v. Fortenberry, 290 So. 2d 3 (Fla. 1974) for the proposition that the claims of a landlord who retakes possession of premises which have been improved by the defaulting tenant are subject to setoff, under the equitable doctrine of unjust enrichment, for the net value added to the repossessed premises by the improvements. There is dictum[2] in Mandell to that effect, but it must be noted that (1) the landlord did win that lawsuit and (2) the landlord's theory of recovery was predicated on the doctrine of equitable subrogation, which explains the inapplicability of the normal rule that equitable defenses are not cognizable in actions at law unless they would suffice to avoid the judgment if one were obtained. Klein v. G.F.C. Corp., 103 So. 2d 120 (Fla. 1958).
A shorter answer to any reliance on Mandell, however, is that the contract there did not specifically grant the relief sought, as does the one here. Rodeway agreed to pay the mortgage even though appellees terminated the lease and regained possession. The lease in Mandell contained no such provision. It is hardly surprising, under those circumstances, that the landlord found his equitable action met by the equitable defense of unjust enrichment-the inequity of allowing enforcement of the tenant's continuing obligation on the mortgage with no offsetting credit for improvements which might have enhanced the value of the premises. There is no reasonable predicate for concluding that such a defense has validity where, as here, the agreement of the parties specifically and unequivocally dictates precisely that result.
The lease before us provided appellees with two alternative remedies when Rodeway breached the lease-terminate and reenter for their own benefit, or evict Rodeway and relet for Rodeway's account. In either event, (1) appellees had a right to re-enter and (2) Rodeway remained obligated to pay the mortgage. Those provisions are in no way inconsistent or ambiguous-or in any way contrary to Florida law or public policy. We agree with the able trial judge, who ruled that the language in question was "as clear as spring water", and it is significant that Rodeway itself has never professed to find any ambiguity in that language.
The applicability of Coast Federal Savings & Loan Ass'n. v. DeLoach, 362 So. 2d 982 (Fla. 2d DCA 1978), on which Rodeway relies, is flawed by the fact that there the landlord sought two remedies that are patently incompatible, i.e., repossession for his *373 own account and continued liability of the tenant for the accruing rent. There is no such inconsistency here-appellees terminated the lease and made no claim against Rodeway for further rent. They merely sought to enforce Rodeway's explicit promise to satisfy the mortgage even if the lease were terminated and appellees took over the facilities constructed with the proceeds of the loan for which the mortgage was given.
For reasons which the parties deemed compelling at the time, they agreed that appellees would not be responsible for the improvements Rodeway planned to construct. The lease clearly reveals Rodeway's awareness that such provision could result in an ordinarily anomalous situation-loss of the improvements without release from the obligation to pay for them. Rodeway was under no compulsion to proceed with the project under those conditions. It chose to do so of its own free will and volition, and it would be naive to think that it had no pecuniary motive or incentive for doing so. The trial court properly refused to tamper with the solemn commitments of astute business men.
In our opinion the terms of the lease, negotiated by the parties in good faith and with full awareness of the legal consequences, fully support the conclusion reached by the trial court. The judgment is affirmed.
SCHEB, C.J., concurs.
CAMPBELL, J., dissents with opinion.
CAMPBELL, Judge, dissenting.
I must respectfully dissent. The issue here is not whether the value of the improvements by appellants-lessees should be set off against the amount remaining due on the mortgage, but rather whether appellees-lessors should be allowed to collect the mortgage payments from a third person lessee after termination of the lease with appellants and also require appellants to pay the amounts due as mortgage payments after termination under the provisions of the lease, thereby resulting in a windfall to appellees in the amount of the double payment of some $325,214.05.
A more detailed recitation of the facts of the case than is presented by the majority is necessary to adequately explain this dissent.
Some two and one-half years after completion of the motel, appellees gave appellants notice of default and intent to terminate the lease, alleging failure to keep rent and mortgage payments current. Negotiations between the parties resulted in an agreement whereby appellants cured the defaults then existing and an "Amendment to Lease" was executed by the parties. The remedies provision of the amended lease provided that upon failure to pay the rents or mortgage when due or upon other specified defaults, the appellees could terminate the lease or evict appellants from the premises "and re-let [sic] the same for the account of the LESSEE." The amended lease further provided that whether the appellees elected to terminate the lease or evict appellants and retake the premises for the account of appellants, appellees would have the right to re-enter and "Upon and after such re-entry by the LESSOR the LESSEE shall remain liable to pay the mortgage... ."
Approximately six months later appellees again notified appellants of their default as a result of failure to keep rent and mortgage payments current. Appellees expressed their intent to terminate the lease and immediately re-enter possession of the motel property. Appellants acquiesced and allowed appellees to retake possession. From that point on, the appellees operated the motel or leased it to third parties to operate.
Appellees claimed damages for the monthly mortgage payments that were made after their re-entry with ten percent interest on those payments.
Appellants' first answer and affirmative defenses raised defenses of: Failure to state a cause of action, waiver of appellees' rights under the lease by reason of a novation between the parties, estoppel by reason of unjust enrichment if the claim for damages *374 was allowed, and estoppel for failure to properly mitigate damages. No specific facts were alleged to support any of the defenses. Appellees' motion to strike those defenses was granted on the grounds that the first defense was actually a motion to dismiss and was not specifically pled as required by Florida Rule of Civil Procedure 1.140(b), and that the other defenses failed to state with particularity any facts to support them.
A first amended answer and affirmative defense was thereafter filed. The court also struck those amended defenses with leave to amend. The orders in the case up to this point were entered by one trial judge and thereafter the proceedings in the trial court were presided over by another judge.
Appellants then filed a second amended affirmative defense. They alleged that with their acquiesence, appellees took possession of the motel and thereafter operated it themselves or leased it to third parties, receiving therefrom more than sufficient funds to pay mortgage payments and all other operational costs of the motel. Appellants alleged that appellees would be unjustly enriched if, in addition to the funds they received from the motel operation which enabled them to make the mortgage payments, they were also allowed to recover from appellants the amount of those mortgage payments together with ten percent interest. The trial court struck this second amended affirmative defense without leave to amend on the basis that the defense of unjust enrichment was legally insufficient in view of the express provisions of the lease.
Subsequently, appellants filed a motion to allow them to plead affirmative defenses and a counterclaim. The essence of the defenses sought to be raised by appellants were that negotiations and communications between the parties resulted in an oral agreement providing that if appellants acquiesced in appellees' termination and immediate occupancy, appellants would not thereafter have any continued liabilities; that appellants relied on these representations and acquiesced in appellees' re-entry and appellees, therefore, should be estopped from claiming the full amount of the mortgage payments thereafter made; that appellants were entitled to a set-off and counterclaim against appellees' claims in the amount of the value of the assets left on the premises by appellants; that appellees' claim for the mortgage payments was an action for specific performance and barred by the statute of limitations; that the claims for damages occurring after re-entry should have been mitigated by the appellees; and finally, that to enforce the provisions of the lease requiring appellants to pay the mortgage in addition to the receipt by appellees of income from the motel operations to pay the mortgage would constitute an unenforceable penalty.
The trial court granted appellants' motion to add these defenses and counterclaim, but also granted appellees the right to test the sufficiency of the new defenses and counterclaim by motion.
The trial court then struck those final amended defenses and counterclaim as a result of appellees' motions to strike and dismiss, holding the defenses were legally insufficient as an attempt to alter the terms of the lease by parol evidence, and further that failure to raise them initially caused prejudice to the appellees and they had, therefore, been waived or abandoned.
The first defenses of appellants may not have been factually sufficient, but they at least alerted the appellees to the nature of the claimed defenses, as did the second amended affirmative defenses. The thrust of the factual allegations consistently pled by appellants in their several defensive pleadings, however labeled, was directed toward showing that the motel had been self-sustaining since appellees' re-entry and that appellees, by operation of the motel themselves or by leasing it to third parties, had received more than sufficient funds to pay the mortgage payments and all other costs of the motel operation and appellants, therefore, should be entitled to credit for the amount of those funds against any continued liability they might have to pay the *375 mortgage payments. Although each of appellants' defenses had been struck for various reasons, it cannot reasonably be said that the appellees were surprised or prejudiced when those same defenses were raised again by appellants' final amended defensive pleadings in more detail. Note that after the trial court struck these final defenses and before the nonjury trial some three months later, the court allowed appellees to amend and supplement their claim for damages. The court at the same time denied appellants any opportunity to proffer at the trial evidence that would pertain to any of its affirmative defenses stricken by the court. Since I cannot conceive how appellees could have been surprised or prejudiced by these defenses, I would find that the trial court erred in dismissing them on grounds of waiver and abandonment or prejudice to the appellees.
The other ground for the court's striking the defenses was that they were legally insufficient. The trial court found that appellants' final amended pleading was an attempt to vary the terms of the lease agreement by parol evidence and, thus, legally insufficient. If allowed to have been pled and proved, however, appellants' allegations could have shown the intent of the parties after termination and upon the re-entry and subsequent reletting by the appellees rather than the intent of the parties in entering into the lease agreement. When a lessor re-enters leased premises, the question of whether its re-entry and subsequent use of the premises is for its own account, for the account of the lessee, or is an outright termination and abandonment of the lease, is a question of fact for a jury. Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954); Diehl v. Gibbs, 173 So. 2d 719 (Fla. 1st DCA 1965).
The remedies provision of the amended lease seems to be the primary villain that causes the struggles of the parties in their pleadings, the efforts of the trial court to untangle them, and my concern in deciding whether appellants' defenses were properly struck for being legally insufficient. In examining these lease provisions, it appears that the original lease provides only a single remedy or option to the appellees upon default by appellants; appellees could terminate. They then had the option to re-enter and remove all persons and property from the premises, in which case appellants would remain liable upon the mortgage to the extent appellees would be required to repay the same "and hold the LESSOR harmless in respect thereto."
There appear to be two alternatives available to appellees under the terms of the lease as amended. They could either terminate or evict appellees and relet for the account of appellants. Whichever option was chosen, the amendment provided that upon appellees' re-entry appellants would be required to pay the mortgage. Under Florida law, it is inconsistent to provide for a lessor to re-enter and relet for the account of the lessee and yet require the lessee to remain obligated to pay the mortgage in full without an accounting by the lessors for sums received by such re-entry and reletting. The amended lease provision here is, thus, vague and ambiguous regarding the intent of the parties after a reletting by the appellees following a re-entry.
Florida adheres to the minority view that upon an outright termination of a lease without assuming to do anything further, a lessor has no duty to mitigate damages by reletting or otherwise. Rather than adhering to the majority view that a lessor always has a duty to mitigate, Florida instead recognizes that a duty arises only as a result of which one of three alternative courses of action a lessor chooses upon a breach by a lessee. These alternatives were stated by this court in Coast Federal Savings and Loan Association v. DeLoach, 362 So. 2d 982, 984 (Fla. 2d DCA 1978):
The lessor may treat the lease as terminated and retake possession for his own account, thus terminating any further liability on the part of the lessee; or the lessor may retake possession of the premises for the account of the lessee, holding the lessee liable for the difference between rental stipulated to be paid under *376 the lease agreement and what, in good faith, the lessor is able to recover from a reletting; or the lessor may stand by and do nothing, holding the lessee liable for the rent due as it matures, which means all remaining rent due if there is an acceleration clause and the lessor chooses to exercise the right to accelerate. Williams v. Aeroland Oil Co., 155 Fla. 114, 20 So. 2d 346 (1944); Jimmy Hall's Morningside, Inc. v. Blackburn & Peck Enter., Inc., 235 So. 2d 344 (Fla. 2d DCA 1970).
Clearly, pursuant to both Florida law and the terms of the lease, appellees could have terminated and assumed to do nothing further and appellants would have been liable for the mortgage payments as they became due. Appellees did not elect that alternative. They elected to terminate the lease and re-enter for their own use and benefit. That alternative is not specifically stated in the lease, though it is an alternative recognized and discussed in Coast Federal Savings. There, in discussing that alternative and the one specifically provided for in the lease here, re-entry for the account of appellants, this court said:
Either of the first two choices excludes the third. By retaking possession either for his own account or for the account of the lessee, a lessor loses the right to recover the full amount of remaining rental due on the basis of an acceleration clause. The two positions are inconsistent. Geiger Mutual Agency, Inc. v. Wright, 233 So. 2d 444 (Fla. 4th DCA 1970); Jimmy Hall's Morningside, Inc. v. Blackburn & Peck Enter., Inc., supra. If the lessor retakes possession for the account of the lessee, two results follow. First, the lessor acquires a duty to exercise good faith in attempting to relet the premises, and second, any rentals received by the lessor as a result of the reletting must be deducted from the balance of rent due from the lessee. Kanter v. Safron, [sic] 99 So. 2d 706 (Fla. 1958); Jimmy Hall's Morningside, Inc. v. Blackburn & Peck Enter., Inc., supra.
362 So.2d at 984. Even in Florida, it is only when the lessor elects to terminate and do nothing more, that no duty to mitigate arises. Lessees in that event are then liable to pay in full whatever the lease requires. Appellees here say they did not elect that alternative, but instead the alternative not specifically provided for by the lease. The problem here arises because the lease does not specifically address the rights of the parties in light of appellees' stated election to terminate and re-enter for their own use and benefit. Though appellees could have elected an option which would have required no duty on their part to mitigate, they chose instead an option not specifically provided for by the lease but which would normally, under Florida law, raise such a duty. Appellants' position here goes even another step, for they argue that whether or not there arose a duty to mitigate, appellees did in fact choose an alternative that mitigated the damages. It is in that light that the legal sufficiency of appellants' pleadings must be examined.
The Florida courts have not specifically addressed the rights of a lessee when there arises no specific duty to mitigate, but the lessor chooses to take actions upon re-entry that in fact do mitigate its damages. A case close in point, however, is Kanter v. Safran, 99 So. 2d 706 (Fla. 1958). There the supreme court held that though lessees had deposited a specific sum as a security fund to be forfeited upon a failure to pay rents, when the lessors elected to relet the premises for the lessees' account, the lessors' claim for damages would be measured by the rents agreed to be paid and what in good faith the lessors are able to recover from a reletting. The court held:
The measure of general damages was abundantly clear and to set them off against the security deposit it was incumbent upon the lessors to prove them. As part of this proof it was necessary for the lessors to establish that they had in good faith attempted to recoup what they could, consistent with their own interests as well as those of the defaulting lessees. (Emphasis added.)
Id. at 707-08.
This court has decided two cases which aid in the determination of that question. *377 The liability of the lessees upon termination in each of these cases is analogous to the liability of appellants here. In both cases, upon termination the lessees had an obligation to pay the full amount of accelerated rent for the remaining term of the lease. Here the obligation is instead to continue to make mortgage payments for the full period of the mortgage.[1]
The first of the two cases is Jimmy Hall's Morningside, Inc. v. Blackburn & Peck Enterprises, Inc., 235 So. 2d 344 (Fla. 2d DCA 1970), wherein the lessee who had assigned the lease to a third party refused to accept the premises back or pay the rent after the assignee abandoned the premises. The lessor relet the premises and also brought action against the lessee for the full amount of the accelerated rent without allowing credit for the amounts received by the reletting. This court recognized the three alternatives available in Florida to a lessor on a breach by lessee. It then held that though rent acceleration clauses are valid and enforceable, it is error to allow a lessor to choose the option of re-entering and reletting without accounting for the amounts received from the reletting so as to credit them against the amounts due as accelerated rents.
This court subsequently decided Coast Federal Savings. The lessor there appealed, citing as error the failure of the trial court to award the full amount of accelerated rents. The lessor had brought suit to recover accelerated rent payments after the lessee had vacated and ceased paying rent before the end of the lease term. The trial court reduced by eighty percent the amount of accelerated rents the lessor could recover because of its failure to use reasonable methods to mitigate. In reviewing the trial court's judgment, this court recognized the three alternatives available in Florida to a lessor on breach by the lessee. The trial court had not made a specific finding in its final judgment that the lessor had in fact retaken possession and relet. Without stating a reason, the final judgment simply reduced the accelerated rents the lessee would be required to pay. This court relinquished jurisdiction back to the trial court for specific findings as to why it was reducing the lessee's liability for the full amounts of accelerated rents. If the trial court had determined only an outright termination and nothing more, the lessee would be liable in full. If it found that the lessor chose to retake possession for the account of the lessee, then it could properly find the lessee only liable for the difference between the full rental payments as accelerated and the amounts that in good faith the lessor should have or did recover from reletting. However, if the trial court reduced the liability of the lessee, not upon election of an option by the lessor requiring mitigation but upon a duty of the lessor to mitigate absent a choice which raised the duty, then the trial court committed error.
Both parties here cite Mandell v. Fortenberry, 290 So. 2d 3 (Fla. 1974), as support for their positions. In Mandell, our supreme court considered on certiorari a decision of the District Court of Appeal, Fourth District,[2] reversing a trial court's judgment. The facts bear a similarity to those before us here. The plaintiffs in the trial court owned land which they leased to defendants. Defendants secured a loan to finance improvements to be placed on the land. Plaintiffs executed the mortgage securing the loan for the sole purpose of imposing the mortgage lien on the real property and not to assume any liability on the mortgage. The defendants defaulted on the note and mortgage which the plaintiffs then paid. The note was assigned to the plaintiffs and after they retook possession of the leased premises they sued for the full amount of the note. In awarding judgment for the defendants, the trial court found that the plaintiffs had not sustained their burden of *378 proving damages, since they had not shown the value of the improvements placed on the leased premises in order that their value might be set off against their claim for damages. It does not appear from either the supreme court decision or the decision of the District Court of Appeal, Fourth District, that the defendants affirmatively pled that the plaintiffs were unjustly enriched by reason of the value of the improvements placed by defendants on the leased premises. Both courts held that unjust enrichment was an affirmative defense which must be specifically pled and proved by the defendant.
However, the decisions of both the supreme court court and the district court in Mandell appear to more strongly support appellants' position that the trial court was in error in striking its defenses. The supreme court held:
Although the lease provided that all improvements added to the land would belong to the lessors upon being placed thereon, we are of the opinion that if, in a similar situation, the lessors were to receive substantial unjust enrichment, a court of equity could consider same, and reduce the damages payable to the lessors accordingly. As the District Court properly observed, the duty to plead and prove such unjust enrichment is on the defendants, since "it would have been an affirmative defense or an avoidance as to which the burden of proof would rest on defendants".
.....
If it had been demonstrated, in this instance, that the lessors sold their property for a greater price, because of the new buildings and golf course, then they could have received from the naked land, the chancellor could have properly considered that fact. No such proof appears here.
There is a presumption that the parties signing legal documents are competent, that they mean what they say, and that they should be bound by their covenants. This being so, it is only in those cases in which the unjust enrichment is substantial, and obviously inequitable, that courts should grant relief to those who break their valid contracts.
290 So.2d at 6-7.
It appears here that the appellants' construction of the motel on the previously vacant property placed appellees in a better position to relet the premises and thereby reduce their losses or increase their profits. Appellees could conceivably receive from their operation of the motel or from subletting it sums sufficient to completely pay back the mortgage and pay for all operational costs and lost rents. In that event, appellees, without cost to them, would have their then unencumbered real property increased by the value of the motel. The judgment being reviewed here was for the amount of the mortgage payments, principal and interest, appellees made after re-entry and through the final hearing. Even if the mortgage is completely paid off without costing appellees anything, their position, sustained by the trial court's judgment, still allows them to collect from appellants the full amount of the mortgage unpaid at the time of appellees' re-entry plus ten percent interest. The trial court's judgment was inevitable once the court struck appellants' defenses.
As are rent acceleration clauses, the provisions of the lease agreement here are closely akin to a provision for stipulated or liquidated damages. If the amounts stipulated in an agreement to be forfeited as liquidated damages are so grossly disproportionate to any damages that actually follow or that might reasonably follow a breach, they are considered to be intended only to insure no detriment arising by lack of the performance rather than as liquidated damages. Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954). When actual damages contemplated by the parties upon a breach are susceptible of ascertainment, and if the stipulated amount is disproportionate to the actual damages, it will be regarded as a penalty. The purpose of damages in a breach of contract action is to place the injured party in the same financial position he would have occupied if the contract had been fully performed. Juvenile Diabetes *379 Research Foundation v. Rievman, 370 So. 2d 33 (Fla. 3d DCA 1979).
In Stenor, Inc. v. Lester, 58 So. 2d 673, 675 (Fla. 1952), the supreme court in stating that rule held:
The prime factor is whether the sum named is just compensation for the damage resulting from breach. Though it is proper for parties to provide in advance for a sum to be paid or retained as liquidated damages, equity will not permit one seeking its aid to retain payments as liquidated damages in excess of his actual damages. Taylor v. Rawlins, 1905, 90 Fla. 621, 106 So. 424.
Appellants alleged facts in their affirmative defenses which tend to show that appellees regained possession for their own use or for the purpose of reletting, or for the account of appellants. They alleged that in either event it would constitute a penalty to allow appellees to keep the sums received from their own use or from reletting and to additionally require appellants to make the mortgage payments under the lease without an accounting and a credit for those sums received by the appellees. As the supreme court said in Mandell, even though parties are presumed to be bound by the covenants of their contracts, there are still "those cases in which the unjust enrichment is substantial, and obviously inequitable, that courts should grant relief to those who break their valid contracts." 290 So. 2d at 7. At least a party ought to be allowed to plead such a defense where the parties do not act precisely within the express terms of the contract or where the terms of the contract are ambiguous.
I would conclude, therefore, that the court below erred in striking those defenses on the grounds of waiver and abandonment and legal insufficiency. If those defenses had been allowed, appellants should also have been granted their request for trial by jury. I would reverse and remand.
NOTES
[1] We are not unmindful that Rodeway claims that the parties themselves, in effect, rewrote the lease by an oral novation at the time appellees re-entered the premises. In our opinion the trial court properly struck that affirmative defense. The release, surrender or rescission of a lease for a term in excess of one year must be in writing signed before witnesses. § 689.01, Fla. Stat.; 11 Fla.Jur.2d 469, Contracts § 162.
[2] The actual basis of the denial of certiorari was lack of jurisdiction.
[1] If, by reason of the manner of his termination and re-entry, a lessor becomes obligated to use good faith efforts to mitigate, those good faith efforts should not be limited to only those damages for rent payments that lessee might be liable for, but any other damages that could in good faith be mitigated.
[2] Fortenberry v. Mandell, 271 So. 2d 170 (Fla. 4th DCA 1972).
|
01-03-2023
|
10-30-2013
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.