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https://www.courtlistener.com/api/rest/v3/opinions/3106304/ | NO. 07-10-00451-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
AUGUST 3, 2011
CLARENCE CERF, APPELLANT
v.
THE STATE OF TEXAS, APPELLEE
FROM THE 251ST DISTRICT COURT OF POTTER COUNTY;
NO. 55,527-C; HONORABLE PATRICK PIRTLE, JUDGE
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
ORDER OF ABATEMENT AND REMAND
Appellant, Clarence Cerf, filed a notice of appeal from his conviction for assault
on a public servant, and sentence of 55 years’ incarceration and $5,000 fine. The
appellate court clerk received and filed the trial court clerk=s record on March 17, 2011.
The official court reporter filed the reporter’s record with the Clerk of this Court on May
19. Consequently, appellant’s brief was due to be filed on or before June 20. Appellant
filed a request for extension of time to file the brief on June 22. This motion was
granted and the deadline for the brief was extended to July 11. On July 18, this Court
sent appellant notice that his brief was past due. In that letter, this Court informed
appellant that, if he failed to file his brief by July 28, the appeal will be abated and the
cause remanded to the trial court without further notice. To date, appellant has not filed
his brief nor responded to our July 18 correspondence.
Accordingly, we now abate this appeal and remand the cause to the trial court.
See TEX. R. APP. P. 38.8(b)(2). Upon remand, the judge of the trial court is directed to
immediately cause notice to be given of and to conduct a hearing to determine: (1)
whether appellant desires to prosecute this appeal; (2) if appellant desires to prosecute
this appeal, whether appellant is indigent and whether appellant desires that counsel be
appointed to represent him on the appeal; and (3) what orders, if any, should be entered
to assure the filing of appropriate notices and documentation to dismiss appellant=s
appeal if appellant does not desire to prosecute this appeal or, if appellant desires to
prosecute this appeal, to assure that the appeal will be diligently pursued. If the trial
court appoints counsel for appellant or if appellant retains counsel, the court should
cause the Clerk of this Court to be furnished the name, address, and State Bar of Texas
identification number of the newly-appointed or newly-retained attorney.
The trial court is directed to: (1) conduct any necessary hearings; (2) make and
file appropriate findings of fact, conclusions of law, and recommendations and cause
them to be included in a supplemental clerk=s record; (3) cause the hearing proceedings
to be transcribed and included in a supplemental reporter=s record; (4) have a record of
the proceedings made to the extent any of the proceedings are not included in the
supplemental clerk=s record or the supplemental reporter=s record; and (5) cause the
records of the proceedings to be sent to this Court. See TEX. R. APP. P. 38.8(b)(3). In
2
the absence of a request for extension of time from the trial court, the supplemental
clerk=s record, supplemental reporter=s record, and any additional proceeding records,
including any orders, findings, conclusions, and recommendations, are to be sent so as
to be received by the Clerk of this Court not later than August 31, 2011.
Per Curiam
Do not publish.
3 | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/3106284/ | COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00116-CR
Ex parte D’Anate Lee Shaw § From the 89th District Court
§ of Wichita County (176,379-C)
§ January 24, 2013
§ Opinion by Justice Gabriel
§ (p)
JUDGMENT
On the Court’s own motion, we withdraw our December 21, 2012 opinion
and judgment and substitute the following. This court has again considered the
record on appeal in this case and holds that there was error in the trial court’s
judgment. It is ordered that the trial court’s order denying habeas relief is
reversed and this case is remanded for further proceedings including releasing
Appellant on personal bond or reducing the amount of bail required in the two
cases that formed the basis for the writ.
It is further ordered that the State shall pay all costs of this appeal, for
which let execution issue.
SECOND DISTRICT COURT OF APPEALS
By_________________________________
Justice Lee Gabriel
2
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00116-CR
EX PARTE D’ANATE LEE SHAW
----------
FROM THE 89TH DISTRICT COURT OF WICHITA COUNTY
----------
OPINION
----------
Introduction
On the court’s own motion, we withdraw the original opinion issued on
December 21, 2012, and substitute the following in its place. In a single point,
Appellant D’anate Lee Shaw appeals the trial court’s denial of his application for
relief on habeas corpus. See Tex. R. App. P. 31. The issue is whether the trial
court abused its discretion by not reducing Appellant’s bond amount or releasing
3
him on a personal bond when the evidence showed that the State was not ready
for trial within ninety days of Appellant’s arrest. We reverse and remand for
further proceedings consistent with this opinion.
Background Facts and Procedural History
In February 2012, Appellant applied for a writ of habeas corpus, seeking
pretrial release because the State was not ready for trial within ninety days of the
commencement of his detention as required by article 17.151 of the code of
criminal procedure. Article 17.151, “Release Because of Delay,” provides, in
pertinent part:
Sec. 1. A defendant who is detained in jail pending trial of an
accusation against him must be released either on personal bond or
by reducing the amount of bail required, if the state is not ready for
trial of the criminal action for which he is being detained within:
(1) 90 days from the commencement of his detention if he is
accused of a felony. . . .
Tex. Code Crim. Proc. Ann. art. 17.151 (West Supp. 2012).
The trial court granted the writ and ordered a hearing. At the hearing, the
evidence showed that Appellant had been arrested in November 2011 on three
felony charges: manufacture or delivery of a controlled substance, which is a
second-degree felony, Tex. Health & Safety Code Ann. § 481.112(c) (West
2010); theft of a firearm, which is a state-jail felony, Tex. Penal Code Ann.
§ 31.03(e)(4)(C) (West Supp. 2012); and felon in possession of a firearm, a third-
degree felony, id. § 46.04(e) (West 2011). The evidence also showed that
Appellant had been held in jail continuously for more than ninety days. Finally,
4
the evidence showed that the grand jury had returned an indictment on the felon-
in-possession-of-a-firearm charge within the statutory ninety-day window, but the
State stipulated that indictments had not been returned on the drug or theft
charges.
Based on these facts, Appellant argued that because the State was not
ready for trial on the unindicted charges, he was entitled to release on personal
bond or by a bond reduction on those charges. He did not contend that he was
entitled to release on the indicted charge of felon in possession of a firearm and
consequently that issue is not before us.
Standard of Review
We review a trial court’s decision to deny relief on a claim that the trial
court violated article 17.151 for an abuse of discretion. Ex parte Craft, 301
S.W.3d 447, 448 (Tex. App.––Fort Worth 2009, no pet.); Ex parte Karlson, 282
S.W.3d 118, 127–28 (Tex. App.––Fort Worth 2009, pet. ref’d); see Jones v.
State, 803 S.W.2d 712, 719 (Tex. Crim. App. 1991). In reviewing the trial court’s
ruling, we view the evidence in the light most favorable to the ruling. Craft, 301
S.W.3d at 449; Karlson, 282 S.W.3d at 127–28; Ex parte Bruce, 112 S.W.3d 635,
639 (Tex. App.––Fort Worth 2003, pet. dism’d); see Ex parte Amezquita, 223
S.W.3d 363, 367 (Tex. Crim. App. 2006).
Analysis
Although the grand jury returned an indictment on one charge, it did not on
those charges for which Appellant claimed in his application for writ that article
5
17.151 required his release on either a personal or reduced bond. Because the
State stipulated that indictments were not filed on those cases, it could not have
been ready to try them. See Kernahan v. State, 657 S.W.2d 433, 434 (Tex.
Crim. App. 1983); Pate v. State, 592 S.W.2d 620, 621 (Tex. Crim. App. 1980);
Craft, 301 S.W.3d at 449.
As for the unindicted charges on which Appellant was held past the
statutory ninety-day window, the trial court had two options: release Appellant on
personal bond or release him by reducing the bond to an amount he could afford
to pay. Tex. Code Crim. Proc. Ann. art. 17.151; see Rowe v. State, 853 S.W.2d
581, 582 (Tex. Crim. App. 1993); Kernahan, 657 S.W.2d at 434; Ex parte McNeil,
772 S.W.2d 488, 489 (Tex. App.––Houston [1st Dist.] 1989, no pet.). Bond was
set at $25,000 for the drug case and $20,000 for the theft.
The State argued to the trial court as it does now in its brief that article
17.151 does not apply because Appellant was also being held on the indicted
felon-in-possession-of-a-firearm case. It points to section 2 of the statute, which
provides that “[t]he provisions of this article do not apply to a defendant who
is . . . detained pending trial of another accusation . . . as to which the applicable
period has not yet elapsed[.]” Tex. Code Crim. Proc. Ann. art. 17.151 § 2(2).
While the State’s position is reasonable, we have found no binding precedent
holding that the exception is triggered by a pending charge for which the State is
ready for trial after the applicable time period has elapsed. Absent such
authority, prudence dictates that we read the statute as literally as we can. Here,
6
although the felon-in-possession-of-a-firearm case was indicted within the
statutory ninety days, the writ hearing was held after the ninety-day window had
closed. At that time, Appellant was still being held on the unindicted charges. In
other words, he was not being detained pending trial of another accusation as to
which the applicable period had not yet elapsed. Rather, he was being detained
pending trial of another accusation as to which the applicable period had
elapsed. Under the plain language of section 2, the exception does not apply.
We find nothing in the statute or the case law to suggest that once the
statutory window is no longer open, the legislature nonetheless intended to allow
the State to maintain a hold on an accused for an unindicted charge simply
because it had gotten ready on another case before the shutters came down. To
the extent that the State’s brief suggests that article 17.15 allows a trial court to
disregard the provisions of 17.151, we reject that suggestion. See Tex. Code
Crim. Proc. Ann. art. 17.15 (West 2005). The terms of 17.151 are mandatory,
and the State points to no binding authority, nor are we aware of any, requiring
us to hold that 17.15 may be used to trump 17.151.1 Regardless of whether
17.15 sets out factors a trial court may in its discretion consider when
1
We are aware that the State has filed a petition for discretionary review
complaining that we failed in our original opinion to address this issue, which the
State contends is dispositive. We did not address the issue originally because
the State inadequately briefed it and it is not dispositive. Even if 17.15 allows a
trial court to consider, among other things, safety of the community, in setting
bail, 17.151 still requires the accused’s release on personal bond or reduced bail
when the State is not ready for trial within the period prescribed by the statute.
See Jones, 803 S.W.2d at 715.
7
determining the amount of bond, given the plain, nondiscretionary language of
17.151, we conclude that the legislature intended that persons detained without
formal charges should be released on those unindicted charges when the State
is not ready for trial within the time the legislature set.2 See Jones, 803 S.W.2d
at 715 (noting “the obvious legislative intent to provide assurance that an
accused will not be held in custody indefinitely while the State is not at least
prepared to bring him to trial”).
The trial court, however, rather than issuing an order reducing the bond
amount or releasing Appellant on personal bond, expressly denied the
application for writ on the grounds that article 17.151 did not entitle Appellant to
relief.3 Because the terms of the statute are mandatory, we hold that the trial
court abused its discretion to so rule.
Conclusion
Having held that the trial court abused its discretion, we reverse the trial
court’s order denying habeas relief and remand this case to the trial court for
2
We do not hold nor does Appellant assert that he is entitled to be released
on the charge for which the State secured an indictment while the window was
still open.
3
From the record it appears that the trial court was willing to lower the bond
amount by $5000 in each of these cases by granting an oral motion to reduce
bond and directed Appellant to prepare an order to that effect. However, on the
record the trial court specifically “found in the State’s favor,” and the only written
order in the record before us is the trial court’s order denying Appellant’s
application for writ of habeas corpus. Thus, that ruling is the only one we
consider in this appeal. See Ex parte Wiley, 949 S.W.2d 3, 4 (Tex. App.––Fort
Worth 1996, no pet.).
8
further proceedings including releasing Appellant on personal bond or reducing
the amount of bail required in the two cases that formed the basis for the writ.
LEE GABRIEL
JUSTICE
PANEL: LIVINGSTON, C.J.; MEIER and GABRIEL, JJ.
PUBLISH
DELIVERED: January 24, 2013
9 | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1809761/ | 269 So.2d 9 (1972)
STATE of Florida ex rel. VOLUSIA COUNTY, Relator,
v.
Fred O. Bud DICKINSON, Jr., Comptroller of the State of Florida, Winston W. Wynne, Director, State Beverage Department of the State of Florida, Respondents.
No. 42571.
Supreme Court of Florida.
November 1, 1972.
Rehearing Denied December 6, 1972.
*10 Warren O. Tiller, Volusia County Atty., and Wilson W. Wright, Tallahassee, for petitioner.
Larry Levy, Gen. Counsel, Tallahassee, for respondent Comptroller.
Herbert M. Klein, Miami, and Glenn Terry, Tallahassee, for respondent Dept. of Business Regulation.
ERVIN, Justice.
We have for consideration an alternative writ of mandamus issued on Petition of the Relator, Volusia County, a charter county under the State Constitution, directed to Respondents, the State Comptroller and the Director of the State Beverage Department.
The cause is at issue, answers having been filed to the writ. Briefs of the parties have been received and studied by us.
We have accepted jurisdiction because this cause clearly raises questions of constitutional construction and is an important public controversy, as will hereinafter appear. The pertinent question raised is as follows:
Did Volusia County, as a charter county, have the power in 1971 to levy an excise tax upon the sale of cigarettes in the unincorporated areas of the county and have said tax collected by the Director of the Department of Business Regulation and have the proceeds so collected returned to the County by the State Comptroller in accordance with the procedures under the provisions of Section 210.20(2) (c), F.S.?
Our answer to the question is in the affirmative.
Volusia County became a home rule charter government pursuant to the authority of Section 1(c), Article VIII, State Constitution, F.S.A., by the enactment of a special act of the Legislature establishing its county charter, Chapter 70-966, which was ratified by a referendum vote of the electors. In Section 202 thereof it is expressly provided the county shall have such municipal powers as may be required to fulfill the intent of the charter.
Respondents deny the Legislature by general law has expressly given charter counties similar authority as municipalities have been given to adopt a cigarette tax levy, relying upon City of Tampa v. Birdsong Motors, Inc., Fla., 261 So.2d 1. Birdsong Motors notes that under Section 9(a), Article VII, State Constitution, counties and municipalities may be authorized by general law to levy "other taxes" for their respective purposes.
When Section 1(g), Article VIII and Section 9(a), Article VII are read together, it will be noted that charter counties and municipalities are placed in the same category for all practical purposes. That upon a county becoming a charter county it automatically becomes a metropolitan *11 entity for self-government purposes. This is so because Section 1(g) of Article VIII provides a charter county "shall have all powers of local self-government not inconsistent with general law... . The governing body of a county operating under a charter may enact county ordinances not inconsistent with general law." This all inclusive language unquestionably vests in a charter county the authority to levy any tax not inconsistent with general or special law as is permitted municipalities.
Read together, Sections 9(a), Article VII and 1(g), Article VIII, clearly connote the principle that unless precluded by general or special law, a charter county may without more under authority of existing general law impose by ordinance any tax in the area of its tax jurisdiction a municipality may impose.
The issue here is quite analagous in principle to the one considered by us in State ex rel. Dade County v. Brautigam, Fla., 224 So.2d 688. There, specific constitutional home rule authority was found to be reposed in Dade County to adopt a cigarette tax levy to apply in the county's unincorporated area. The Dade County home rule amendment provided "Dade County may exercise all the powers conferred now or hereafter by general law upon municipalities." Section 6(f), Article VIII, State Constitution. As we have noted, similar authority is logically reposed in any county becoming a home rule charter county by the all-inclusive language of Article VIII of the 1968 Revised Constitution. Non-charter counties, on the other hand, shall only have the power of self-government as is provided by general or special law. Section 1(f), Article VIII, State Constitution.
The foregoing considered, it is ordered that peremptory writ issue directed to the Respondents granting the relief sought.
It is so ordered.
CARLTON, ADKINS, BOYD and DREW (Retired), JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1872219/ | 594 So. 2d 372 (1991)
STATE of Louisiana
v.
George BROWN.
No. KA 88-1266-R.
Court of Appeal of Louisiana, First Circuit.
September 23, 1991.
*373 Bryan Bush, Dist. Atty. by Sue Bernie, Asst. Dist. Atty., Baton Rouge, for plaintiff-appellee.
Office of the Public Defender by Kathleen Richey, Asst. Public Defender, Baton Rouge, for defendant-appellant.
Before SAVOIE, CRAIN and FOIL, JJ.
CRAIN, Judge.
George Bernard "Benny" Brown (defendant) was indicted by the East Baton Rouge Parish Grand Jury for the second degree murder of Sheri Lynn Daigle, a violation of LSA-R.S. 14:30.1. Defendant entered a plea of not guilty; and, at trial, the jury found defendant guilty as charged. Subsequently, the trial court sentenced defendant to the mandatory term of life imprisonment at hard labor, without benefit of probation, parole, or suspension of sentence. Defendant appealed, urging thirteen assignments of error, but noting in his original brief, his abandonment of assignments of error numbers four, five, seven, eight and twelve.
In finding reversible error in assignment of error number eleven, we pretermitted review of defendant's other briefed assignments of error, reversed defendant's conviction and sentence, and remanded this case to the trial court for further proceedings. State v. Brown, 549 So. 2d 323 (La. App. 1st Cir.1989). The state's application for supervisory writs was granted, State v. Brown, 558 So. 2d 556 (La.1990); and in State v. Brown, 562 So. 2d 868 (La.1990), in a five to two decision, the Louisiana Supreme Court reversed our decision, reinstated defendant's conviction and sentence, and remanded the case to us for consideration of defendant's assignments of error pretermitted on the original appeal. Our *374 consideration of the pretermitted assignments follows.
The record reveals that, during the early afternoon of May 7, 1987, Brett Fontenot came to the residence of Randall Johnson in Baton Rouge. Fontenot informed Johnson of his intention to "take a ride" and look for redwood that would be used to build kitchen cabinets. Johnson agreed to assist Fontenot in his efforts to locate redwood in return for Fontenot's agreement to assist Johnson in building some cabinets for Johnson.
They then proceeded to ride around in Fontenot's pickup truck looking at various locations. At about 5:30 p.m. that afternoon, they drove to a "boarded up" house at 10443 Siegen Lane, still seeking redwood. Although Johnson had not been there before, Fontenot was familiar with the location, having once known an individual who lived there. Fontenot and Johnson exited the truck, walked around the house and stepped onto the back porch of the house. The area behind the house was overgrown with vegetation. When they turned around and looked into the area behind the house, they observed a "fresh trail" leading away from the house and into the overgrown area. Johnson and Fontenot became curious and began walking down the trail which was not "very long." In the middle of the trail, they observed a small pool of blood. Surmising that an animal might have been wounded, they began looking for something.
The trail led directly to three concrete culverts (septic tanks). After looking around, Fontenot returned to where Johnson was standing and asked him if he had taken the top off one of the culverts. Johnson replied in the negative, and Fontenot then removed the lid from the middle septic tank and observed two shoes protruding from the water inside the septic tank.
Johnson and Fontenot then went to the St. George Fire Station and telephoned the police. In response to the call, Randy Walker, who was then a deputy sheriff of the East Baton Rouge Parish Sheriff's Office, met with and spoke to Johnson and Fontenot at the fire station before proceeding with them to 10443 Siegen Lane. There, Johnson and Fontenot took Walker to the rear of the house and down the path to the three round concrete septic tanks, which Walker estimated were about two to three feet in diameter. Inside one of the tanks, Walker saw moccasins "sticking out;" and he confirmed that a body had been found.
Walker then notified other law enforcement personnel. The record reveals that numerous agents of various law enforcement agencies responded to the notification. With the assistance of the next officer who arrived at the location, Walker cordoned off the scene with evidence tape to preserve the scene. In doing so, they cordoned off separately a tire track Walker had found in the driveway leading to the house. The tire track, which appeared to be that of a car, was by Walker's estimation about forty to forty-five yards from the front of the house.
East Baton Rouge Parish Deputy Coroner Chuck Smith and Lt. Randy Keller of the East Baton Rouge Parish Sheriff's Office came to the scene. At about 7:00 p.m., they pulled the body (which was subsequently determined to be that of Sheri Lynn Daigle) from the middle septic tank in which it had been discovered. They then carried the body to the rear of the house, where it was photographed soon thereafter.
Deputy Coroner Smith testified that the body was in full rigor mortis. He also testified that the water inside the septic tank was about 70°.
The body was clad in blue jeans and a red tank top, and there were leather moccasins on the victim's feet. Smith and Keller did not unzip the victim's blue jeans. However, the victim's blue jeans were found unzipped and pulled down to "hip level." Keller examined the victim's pants pockets and found a quarter and two pieces of paper (one white and one yellow) in her left front pocket. The number 344-2760, an apparent telephone number, was written on the yellow piece of paper; and, on the *375 white paper, there was a mirror image of the number.
The record reflects that investigating law enforcement officers determined that the distance from Siegen Lane to the front of the house where the body was found was about six hundred and forty-two feet. Several of the law enforcement agents who went to the location on the day the body was discovered described the overgrown area located behind the house, the path through the area leading to and ending at the septic tank and the pool of blood found in the path.
Deputy Coroner Chuck Smith testified that the weeds behind the house were at least waist high, with some taller. Charles Hughes, Jr.[1] described the overgrown area behind the house as consisting of bushes about five to six feet high. East Baton Rouge Parish Deputy Sheriff Carson Bueto testified that the weeds were "almost as thick as straw on a broom" and as tall as "his head." East Baton Rouge Parish Sheriff's Detective Don Strickland described the growth at the rear of the house as very thick growth, about five to five and one-half feet tall.
Lt. Randy Keller and Detective Don Strickland estimated that the pathway through the overgrown area was about eighteen inches wide. Deputy Coroner Chuck Smith testified that the weeds in the pathway had been freshly knocked down or trampled within probably a twenty-four hour period, and Lt. Keller testified that the weeds or grass "had laid over where something had either walked or been drug or gone through there." Deputy Coroner Smith described the pool of blood in the pathway as being about twelve inches in diameter, uncoagulated and saturated more in the middle than on its outer edges, i.e., concentrated more in the middle. Law enforcement agents described the ground at the scene as "kind of damp," and "pretty soggy."
At about 1:00 p.m. on May 8, the day after the victim's body was found, Dr. Alfredo Suarez performed an autopsy on the body. At trial, Dr. Suarez was qualified by stipulation of counsel and accepted by the trial court as an expert in the field of forensic pathology.
Dr. Suarez estimated that the victim was 5' 4" tall and weighed one hundred and ten pounds. Dr. Suarez testified that his external examination revealed that the victim had sustained multiple injuries to the head. He found post-mortem and pre-mortem injuries, with the pre-mortem injuries being predominately to the head. Dr. Suarez stated that he determined the cause of the victim's death had been inhalation of some of the contents of the septic tank in which the body had been placed. However, in any event, multiple skull fractures and bleeding in the cerebrum were sufficient to have caused death. Dr. Suarez testified that the head injuries, eight lacerations to the top of the head, were "semi-lunar shape, sort of semi-circular, not a complete circle but sort of a semi-lunar shape" and that they were inflicted by a single instrument. Dr. Suarez also described a rectangular area of discoloration to the victim's neck which he determined was probably a post-mortem injury. On the other hand, there was an injury to the victim's chin, consisting of a laceration and many contusions, which the doctor stated could have been caused by the victim being struck by a fist or something more blunt than the instrumentality used to inflict the head injuries. However, Dr. Suarez further stated that the injury to the victim's chin could have been caused by the placement of the victim head first into the septic tank. According to Dr. Suarez, the head injuries were probably inflicted by some kind of metallic object having some kind of an edge and with sufficient force to drive the skull into the brain. There was cerebral matter on the victim's outer scalp. According to Dr. Suarez's findings, the victim was in a still position when hit several times based on the absence of contrecoup, i.e., the absence of damage to the brain on the side of *376 the brain opposite where the victim's head was hit with an instrument. Dr. Suarez testified that there was plenty of blood inside the victim's body and that she was probably beaten only moments before being placed in the septic tank.
Dr. Suarez testified that, at the time of the autopsy, the victim's body was flaccid. He explained that the body becomes flaccid after first being rigid. Rigor mortis means rigidity after death. Rigor mortis generally develops within two to three hours after death and lasts about thirty to forty-eight hours. However, many factors can accelerate or slow down rigor mortis. Those factors include temperature and amount of musculature of a body. Hence, Dr. Suarez stated that placing a body in a cool underground tank containing cool water would slow down the development of rigor mortis.
Based upon photographs of the victim's body taken shortly after the body was removed from the septic tank and the degree of rigidity of the body depicted in the photographs, Dr. Suarez testified that the victim had been dead between six and twenty-four hours prior to being found (at approximately 7:00 p.m. on May 7) or between twenty-four and forty-eight hours of the time he saw the body on May 8. Dr. Suarez stated that there was nothing inconsistent between the rigor and the fact that the body had been submerged underground and the body having been dead for twenty-four hours. Dr. Suarez stated that, as a matter of fact, the rigor and the submergence of the body underground were probably more consistent with the victim having died twenty-four hours before the body was found. However, Dr. Suarez stated that he could not rule out the hypothesis that the victim died (as late as) 1:00 p.m. Thursday (May 7).
Dr. Suarez gave testimony relative to the coagulation of blood outside the body. In that regard, Dr. Suarez testified that humidity and moisture would probably give blood (viewed with the naked eye) the appearance of being fresh.
Dr. Suarez collected the victim's stomach contents. The contents consisted of only about forty c.c.'s of a brownish fluid resembling a "coffee-like material." Based thereon, Dr. Suarez concluded the victim had had something to drink within about thirty minutes of her death.
The record reveals that on May 7, after the police found the yellow paper with the telephone number on it inside the victim's pocket, they determined the number was that of Ray (L.J.) Doucet. That evening, Lt. Randy Keller and Sgts. Don Strickland and Debbie Yarborough went to the area of Baton Rouge commonly known as Spanish Town. There, they talked to L.J. Doucet, who resided at 907 North Seventh Street in the Prescott Place Apartment Complex where he worked as manager. The officers also spoke to East Baton Rouge Parish Deputy Sheriff Derrick M. Foxx, who lived in the apartment complex and worked in a security capacity for the complex. Doucet and Foxx were taken to a funeral home where they identified the victim's body.
Joseph Beatty testified that he met the victim in late January or early February of 1987. They lived together and were doing so until Tuesday, May 5, 1987. At that time, the victim moved out of the Prescott Place Apartment in which she and Beatty lived.
Michael S. Hood testified that in May of 1987 he lived in an apartment at 609 Spanish Town Road. He had lived there for approximately one week following his release from parish prison for a DWI conviction. Jacqueline Haydel lived in an apartment across the hall from him. Hood stated that he had met the victim on approximately May 1 through Haydel, that he and the victim had spent the night together on May 3 and 4 and that he and the victim had had sex on Tuesday night, May 5. During mid-morning on May 5, the victim had brought some or all of her belongings to his apartment.
On Wednesday, May 6, Dorothy Alice Forbes (a girlfriend of Hood) came to Baton Rouge from Missouri to reside with Hood at his Spanish Town residence. She arrived there at about 3:00 p.m. The victim was inside Hood's apartment when Forbes arrived. The victim went outside and *377 Forbes met her downstairs, where the victim was putting on her shoes. Hood testified that his intent was to ask Forbes if the victim could stay with them until she found a place to live.
Following Forbes' arrival on May 6, Hood planned to have a barbecue for the victim, himself, Forbes and Haydel. Hood testified that they were going to use the victim's hibachi to barbecue. Hood stated that he and the victim had not eaten at all that day and that the victim was going to get her hibachi that afternoon.
Kimberly Cagle testified that in May of 1987 she lived in Spanish Town. She knew defendant. They lived in the same apartment complex, and defendant was her next door neighbor. Cagle stated that, at about 5:00 p.m. on May 6, she spoke to defendant. Defendant said that he "needed to have a woman." Cagle asked defendant if he had a girlfriend, and defendant replied that he and his girlfriend had "broken up." According to Cagle, defendant seemed "a little restless" that afternoon. About an hour to an hour and one-half later, Cagle saw defendant talking to a blond girl and observed them walk toward defendant's apartment. Although she initially testified that she subsequently learned that the girl was Sheri Daigle, Cagle stated in later testimony that (although she was not sure the girl was the victim) the girl could have been "the victim."
Michael Hood's testimony revealed that, on May 5, at approximately 6:30 or 7:00 p.m., he observed defendant and the victim on the sidewalk talking to each other. Hood could not hear their conversation. However, Hood testified that the victim disclosed the subject matter of the conversation to him, i.e., that "[defendant] wanted to have sex with her, and she didn't want anything to do with [defendant]."
Michael Hood further testified that, at about 5:00-5:30 p.m. on May 6, he saw defendant standing at the bottom of the stairs to his apartment talking to the victim. Hood asked the victim if she was going to get her hibachi for the barbecue. The victim replied in the affirmative. Hood stated that he did not see the victim leave to go get the hibachi. Hood never again saw the victim, and he did not again see defendant that night.
Jacqueline Haydel testified that she saw the victim on the afternoon of May 6, when the two met on the way to the Capital Grocery Store. Haydel stated that she last saw the victim that evening between approximately 3:30-4:00 p.m. and 5:30-6:00 p.m. While she and the victim were talking to each other, defendant came up, and Haydel then went upstairs.
The testimony of Deputy Sheriff Derrick M. Foxx reveals that, between 5:30 and 6:30 p.m. on May 6, he saw the victim at the Prescott Place Apartments. She was coming down the stairwell to get into a parked car occupied by defendant. Defendant told Foxx he was waiting for the victim. Foxx identified the car as the car depicted in S-65 and S-66 (photographs of defendant's 1974 bronze Mercury Montego) introduced into evidence by the state. The victim was carrying a hibachi and got into defendant's car with the hibachi. Defendant was driving the car. The victim was wearing blue jeans and a "tank type halter top." Foxx never again saw the victim alive.
Vince Fender, a friend of the victim, lived in the Prescott Place Apartments in May of 1987. He testified that, while visiting with Cheryl Robin Holt on the evening of May 6, he saw the victim riding inside the car depicted in S-65 and S-66. Defendant was driving the car, which was traveling on Sixth Street in the direction opposite defendant's apartment. Fender never again saw the victim.
Cheryl Robin Holt knew both defendant and the victim. She identified S-65 and S-66 as depicting defendant's car. Holt stated that, on May 6 at about 6:45 p.m., she saw the victim in defendant's car, which defendant was driving on Sixth Street toward the Capital Lakes Park area. She never again saw the victim, and she did not observe defendant drive back at any time.
The record reveals that, after Lt. Randy Keller and Sgts. Don Strickland and Debbie Yarborough contacted L.J. Doucet and Deputy Sheriff Derrick M. Foxx, they continued *378 their investigation by interviewing other individuals, including Paul Beatty, Michael Hood and Jacqueline Haydel.
Based upon the information they had accumulated, the officers attempted to locate and talk to defendant during the early pre-dawn hours of May 8. In that regard, they went to defendant's apartment at 555 Spanish Town, number six. There, they spoke to Scott Fisher, defendant's roommate. According to Sgt. Strickland, Fisher stated that he knew no one named Benny and no one by that name lived at the apartment. Strickland testified that he explained to Fisher that he was investigating a homicide. After being so informed, Fisher went back inside the apartment.
Thereafter, a car fitting the description of defendant's car was found in the apartment parking lot. Still having had no success in finding defendant, Strickland remained outside the apartment with the car, while the officers obtained a warrant to search defendant's car and his apartment. At about 6:00 a.m. on May 8, Lt. Keller returned with the warrant. Thereupon, the apartment and the car were searched; and the car was towed to the crime lab.
Later, between 9:30-10:00 p.m. on May 8, Lt. Cecil J. Jarreau, Jr., received a telephone call from Ms. Kelly Fields. Defendant then talked to Lt. Jarreau who convinced defendant to turn himself in to the police who needed to talk to him about Sheri Lynn Daigle. After talking to Lt. Jarreau, defendant came into the detective office with Ms. Fields; and defendant then waited about forty-five minutes for the arrival of Lt. Randy Keller.
After being advised of his Miranda rights by Sgt. Strickland, defendant signed an advice of rights and consent to questioning form at 11:17 p.m. in the detective office on May 8. Thereupon, defendant made an oral statement in the presence of Lt. Keller and Sgt. Strickland. Lt. Keller gave the following testimony relating to the contents of defendant's oral statement. Defendant denied that he killed the victim, but he said that Michael Hood had committed the offense. Defendant explained that, on May 6 at about 5:30-6:00 p.m., he met the victim at the corner of Sixth Street and Spanish Town Road. The victim was going to get her hibachi from her former residence at the Prescott Place Apartments. Defendant agreed to and gave her a ride in his car so that she would not have to walk with the heavy grill. While defendant was at the Prescott Place Apartments, a black, uniformed deputy sheriff approached him and questioned him as to why he was there and why he was parked in the deputy's parking space. Defendant stated that he moved his car to allow the deputy to park in the proper parking space. The victim returned with the hibachi, placed it in the back seat area of defendant's car and got into the car on the front passenger seat.
According to defendant, he and the victim then proceeded to his apartment in his car. There, he, Michael Hood and the victim went inside the apartment in which defendant and Scott Fisher lived. The three of them stayed inside for only a short time. An argument ensued as to whether Hood might be the father of the child with which the victim was then pregnant. Thereafter, at about 7:00 or 7:30 p.m., the victim asked defendant to borrow his car and its keys. She and Hood exited the apartment and left in defendant's car. Defendant stated that he never again saw the victim but that, at about 8:00 or 8:30 p.m., he saw his vehicle was in the parking lot and the keys were on the floorboard. He had instructed the victim to place the keys there when they returned the vehicle. At about 9:00 p.m., Fisher came home; and defendant remained in the apartment with Fisher all Wednesday night.
Lt. Keller testified that, at this juncture of defendant's oral statement, Sgts. Yarborough and Strickland brought Michael Hood to the detective bureau for a face-to-face confrontation with defendant. At the confrontation, defendant jumped up and yelled at Hood: "Why did you kill her." During Hood's testimony, he acknowledged that the confrontation had occurred. Hood testified that he did not kill the victim and that at the confrontation he had yelled at defendant that defendant was lying.
*379 Lt. Keller further testified, in regard to defendant's May 8 oral statement, that he asked defendant if he knew of the 10443 Siegen Lane location where the victim's body had been found and if he had ever resided in the house at the location. Defendant completely denied knowledge of the house and stated that he was unfamiliar with the area.
Defendant told Lt. Keller that he had been at his apartment, at about 2:43 a.m. on May 8, when Keller and the other officers came there and that he had exited the apartment through a window to get away from the officers. According to defendant, he fled because he had a Texas parole violation.
Lt. Keller further testified that he confronted defendant with information (based upon a check of jail records) that Michael Hood had been in parish prison between January 23, 1987, and April 30, 1987. Defendant reacted by changing his statement to the effect that the subject matter of the argument between the victim and Hood "might have been" in reference to Hood being the father of the victim's child.
Lt. Keller testified that, after that confrontation, he spoke to defendant again. Defendant continued to contend that Hood had been in defendant's apartment and had left there with the victim at about 7:00 p.m.
Thereafter, on May 9, 1987, at about 7:05 a.m., defendant was arrested (by Keller) for his Texas parole violation; and on May 11, 1987, Lt. Keller returned to the scene where the victim's body had been found. He met Sgt. Strickland there to photograph the location. The photographs were to be used to give defendant an opportunity to verify whether or not he had ever been to the location. A series of five photographs were taken, i.e., S-95 through S-99. S-95 depicted a fork in the road. S-96 depicted a close-up view of the mailbox. S-97 depicted the entranceway. S-98 depicted the fork in the road, weeds and the length of the driveway going to the abandoned house; and S-99 depicted a close-up view of the front of the house behind which the septic tanks were located.
Lt. Keller testified that, that same day (May 11), defendant was brought to the detective bureau. Defendant was again advised of his Miranda rights. Defendant then gave a taped statement which began at about 11:24 a.m. The record reflects that S-102 and S-103, excised versions of the original tapes, were introduced into evidence and played during the state's presentation of its case.[2]
The excised versions of defendant's May 11 taped statement reveal the following. Consistent with his oral statement, defendant related how he had given the victim a ride to pick up her hibachi and had returned with her to his apartment. However, he stated that he understood (through previous discussions with the police) that Michael Hood could not have been the father of the victim's child and that the argument inside his apartment between Hood and the victim concerned Hood's statements that he wanted the baby. Defendant continued to maintain that the victim asked his permission to use his car and that she and Hood left his apartment together. Defendant related that he then took a shower. When defendant finished his shower, he noticed his car was gone. Defendant stated that he then went to the Capital Grocery Store. Defendant left the store at about 8:30-9:00 p.m. When he got home, his car was parked in the driveway. According to defendant, the victim had his car for about an hour to one and one-half hours; but he did not know who actually drove the car. However, defendant stated that no one other than the victim had his car on May 6 or May 7.
Defendant stated that on May 6, Fisher came home at about 9:00 p.m. According to defendant, when he went to get in his car, there was a wet spot on the passenger seat. Defendant got a towel from inside his apartment and apparently placed it over the wet spot where Fisher seated himself. He and Fisher then went to a bar where *380 they stayed, before returning home between approximately 11:30 p.m. and midnight. On May 7, defendant woke up about 6:00 to 6:30 a.m. Before leaving for work, he telephoned his boss at Saia's Landscape to find out if they were going to work that day since it was raining. His boss telephoned him between 8:15 and 8:30 a.m. to tell him they would work. Defendant stated that he arrived at work at 9:00 a.m. He left his car at the shop and proceeded with his boss to a residential job site where he worked that day. Defendant got home from work at about 5:30 p.m. He and Fisher went out together that night. Later, after they returned home, a friend of Fisher's came to their apartment and inquired as to whether Fisher wanted some cocaine. Fisher apparently left the apartment. He later returned with some cocaine prior to the arrival of Lt. Keller and Sgts. Strickland and Yarborough during the early pre-dawn morning hours of May 8. Defendant stated that he heard the officers knock at the door and ask for "Benny." According to defendant, he had told Fisher that he was on parole and to tell the police he was not there. Initially, he and Fisher thought it was a "drug bust."
Defendant stated that he learned of the victim's death on May 7 while watching a television news broadcast. Consistent with his earlier oral statements, defendant denied any personal knowledge of the location where the victim's body was found; and he professed unfamiliarity with that part of East Baton Rouge Parish. Lt. Keller described the location as an old abandoned house about one-fourth mile down a muddy road leading from Siegen Lane. Still defendant denied any personal knowledge of the location.
At that juncture of defendant's taped statement, (as evidenced by Lt. Keller's testimony and the taped statement) Lt. Keller displayed S-95 through S-99 (the photographs of the location) to defendant. In regard to each of the photographs, defendant specifically denied having ever seen the location depicted in the pictures.
When questioned as to his knowledge of Dawn Harding, defendant stated that he knew her through his deceased foster father. Dawn and her family lived in a building on Plank Road. In reference to the house where the victim's body was found, defendant stated that he did not know if Dawn and her mother ever lived there. He emphatically denied ever going to that house. Thereafter, when Lt. Keller asked defendant if that house was not the one defendant had visited several times with his girlfriend, Laura, defendant initially answered in the negative. He then stated that he had been to the house but denied knowledge that it was the site where the victim's body was found. He also stated that he had brought Laura and her father to that house.
Defendant stated that he had made telephone calls to Laura. After first saying that he did not tell Laura "anything," defendant told the officers that he had asked Laura if she had heard anything about the instant homicide but that he could not remember making any comments to her about the house where the body was found. Defendant then stated that he "possibly" made comments to Laura about the house. At that point, the taped interview was concluded; and subsequently, Lt. Keller obtained an arrest warrant for defendant in regard to the instant offense.
Jacqueline Haydel testified that on May 6, when it was "getting close to dark or after dark," Hood knocked on her door and invited her to dinner at his apartment. She accepted the invitation and remained at Hood's apartment until 10:00 p.m. The testimony of Michael Hood and Dorothy Forbes revealed that, when the victim failed to return to Hood's apartment with her hibachi, they changed their plans to barbecue chicken and fried the chicken instead.
Forbes stated that Hood left for about five minutes to go get the chicken from the Capital Grocery Store and that he never left again after returning with the chicken. Hood testified that he did not go any place that night and that he was required in connection with his DWI conviction to abide by a 7:00 p.m. curfew.
*381 Nick Dalrymple testified that he supervised Hood as a condition of Hood's release on bond. On May 6, he visited Hood's apartment between 7:00-8:00 p.m. At that time, he photographed Hood and Hood's girlfriend who were home. Dalrymple stated that he remained at Hood's residence for about ten to fifteen minutes.
Thomas E. Hart testified that he has a daughter named Laura and knows defendant. Approximately a couple of years ago, at defendant's direction, he went to the house located at 10443 Siegen Lane accompanied by defendant. Laura Cramer testified that Mr. Hart is her father and that she had had an "off and on" romantic relationship with defendant. Cramer stated that, in approximately August or September of 1986, she dropped defendant off at that house and picked him up there a couple of times. Additionally, Cramer stated that she knew that defendant "stayed there."
Laura Cramer testified that on May 8, 1987, she came home from work early, between 3:30 and 4:00 o'clock, and found defendant sleeping in her bed. She had not given defendant a key to her apartment and had not told him he could sleep there. She summoned the police and returned to her apartment with the police, only to find that defendant was gone.
Cramer testified that, on the following day, defendant telephoned her and talked to her. Cramer testified in regard to the substance of their conversation as follows:
He said something to the effect of had I seen the paper or had I seen what had happened, and I said, yes. And he asked me, you know, did I see where it happened? And I said, yes. He said something about wasn't that wild or crazy or, you know, something along those lines, and I said, yes. And he asked me if I had told anybody that I had been there or I knew where the place was, and I said, no. And he said he hadn't told anybody and asked me not to tell anybody.
Later that day, defendant had another conversation with Cramer. In regard to the subject matter of that conversation, Cramer stated the following: "About all I remember was he asked me again if I had told anybody where the place was, and said something to the effect that he hoped I didn't `f' him over." Cramer further stated that, thereafter, defendant telephoned her at home and at work until she finally had her telephone number changed. During these conversations, she talked to defendant only long enough to ask that he not call her again.
Roy G. Skiba testified that he previously lived in the house located at 10443 Siegen Lane for about two years with his mother, brother, and sister (Dawn Harding). He stated that the house could not be seen from the street. Skiba knows defendant. Defendant came to the house during the time he, his mother, brother and sister lived in the house. Defendant used to come there every couple of days, staying there a couple of hours at a time or overnight until Dawn moved in with defendant at another location where they lived together.
Skiba stated that to the rear of the house there was (were) a septic tank(s). On occasion, he mowed the area behind the house; and defendant was with him after the area was mowed. According to Skiba, from where he and defendant were standing, the septic tanks could be seen.
The record reveals that, while Lt. Keller was on the witness stand, his trial testimony was interrupted to play the tapes of defendant's May 11 taped statements. The record also reveals that, after the tapes were played, Lt. Keller identified the statements as those defendant had made to him and Sgt. Yarborough. In regard to those statements, Lt. Keller testified that, when he confronted defendant with the fact defendant had been to the house at 10443 Siegen Lane, defendant's demeanor changed. In explaining the change of demeanor, Lt. Keller testified that, during the first part of defendant's taped statement, defendant was very calm and collected. However, when confronted with "lie after lie," defendant began shaking and his eyes "teared up." Defendant seemed to be getting extremely upset.
*382 During the course of the investigation of the scene where the victim's body was found, a hibachi was found on the afternoon of May 11 on the ground in some weeds in front of the house located there. S-58, the hibachi, was introduced into evidence at trial. Paul Joseph Beatty identified S-58 as his hibachi which he noticed, on May 6 at about 11:00 p.m., was gone from his front porch where he usually kept it. The defense stipulated that Derrick M. Foxx would testify that S-58 was the hibachi he saw the victim carrying. Additionally, Vince Fender testified that S-58 was positively the hibachi that Beatty and the victim had at their apartment.
Elgin Campbell testified that the 10443 Siegen Lane location is a wooded area across the street from his house. He stated that there were two houses back there about one and one-half years ago when he last went back there. Campbell stated that he "think[s]" that, in the wintertime, the outline of one of the structures can be seen (apparently from Siegen Lane) but that generally only woods can be seen from that vantage point.
On May 7, 1987, at daybreak, Campbell was at the end of his driveway. At that time, he heard a car and looked toward the gravel/dirt road leading to 10443 Siegen Lane. The noise sounded loud "like a muffler off of an exhaust system of a car." The vehicle was unlighted and coming out on the gravel/dirt road. Because it was not yet daylight, he could not determine the color of the car; and he only saw the basic outline of the car. It seemed strange to Campbell; there had not been any traffic in or out of the road for months. Campbell also found it strange that the car's lights were not illuminated. For those reasons, he took note of what he had seen. Campbell stated that the general outline of the car depicted in S-65 and S-66 (the photographs of defendant's car) was familiar to him and that there was nothing "about the car" depicted in S-65 and S-66 that was different from the car he had observed coming down the gravel/dirt road on May 7. Campbell further testified that he had viewed the car depicted in S-65 and S-66 at the State Police Crime Laboratory. When he looked beneath the car, he observed that it had a "real bad" exhaust system that would have made a "lot of noise." Although he stated that the car "resembled" the car he had seen on the gravel/dirt road, Campbell was unsure of the year/model of the car he had seen on the gravel/dirt road. He estimated it to be a '77 or '78 car and stated that it looked like a Cougar or Montego. Campbell repeated that he only saw the outline of the car, and he stated that he could not rule out the hypothesis that the car he had viewed at the crime lab was not the car he had seen coming out on the gravel/dirt road.
Charles Guarino qualified and was accepted by the trial court as an expert in the field of forensic serology. He testified that he examined S-58, the hibachi, for blood stains, tissue and hair but found none on it. Tests he performed to detect seminal fluid on a vaginal swab from the victim produced negative results. Guarino's testimony also revealed that he checked defendant's car for blood and seminal fluid but found none. Guarino also vacuumed the car to determine if he could find a metal flake or piece of decorative glitter in the car that could be matched with two pieces of metal flake or glitter that had been removed from the victim's head injuries during the autopsy. However, Guarino found nothing in defendant's car that resembled the flakes or glitter.
The state and the defense stipulated that, if called as a witness, Carol Richard would be qualified as an expert in the field of fingerprint comparison and would testify that she received fifteen latent prints obtained from defendant's car. Fourteen of those prints were unidentifiable, and the one identifiable print was that of defendant.
Jim Churchman, a Louisiana State Police Crime Laboratory forensic scientist, qualified and was accepted by the trial court as an expert in the field of forensic physical comparisons. The record reflects that Churchman compared a rubber cast, S-85, that had been made by the police of the tire track impression found in the driveway of 10443 Siegen Lane to the tires on defendant's *383 car. In making his comparisons, Churchman determined that the thread design of the front tires on defendant's car were totally different from those in the rubber cast. Both rear tires on the car were of the same brand, but the right rear tire had slightly different wear characteristics and was eliminated as being the tire which made the cast impression. In regard to the rubber cast, Churchman stated that it was of a "very poor or somewhat vague impressionin dirt." Churchman determined that the left rear tire from defendant's vehicle possessed the same tread design and similar wear characteristics as those in the rubber cast. However, he could not make a positive identification that the tire that made the impression on which the rubber cast had been poured was the left rear tire from defendant's car. Thus, Churchman could not rule out either the hypothesis that the impression was of that tire or some other tire.
Churchman also testified that he examined the muffler on defendant's car. During this examination, he noticed that the muffler had a hole in it.
Mary Doughtie, defendant's sister, testified that she had received a letter from the Texas Department of Corrections inquiring as to defendant's whereabouts. Thereafter, in January of 1987, she informed defendant that the parole office in Houston, Texas, was looking for him and wanted to know his address.
D-20, a certified copy of a pen pack from Texas, was introduced in evidence by defendant. An examination of this exhibit reflects that George Bernard Brown was convicted of the offense of theft from a person on November 9, 1981, in Texas for which he received a ten year probated sentence subject to various conditions.
Scott Fisher testified that in May of 1987 he was living at 555 Spanish Town Road in apartment number six and that defendant was his roommate. Fisher stated that during that time frame he was working at the Capital Grocery Store. On Wednesday, May 6, 1987, Fisher worked at the Store; and, at about 5:30-6:00 p.m. that day, he saw defendant at the Store. Defendant stayed there for a few minutes. Later that day at about 9:05 p.m. after work, Fisher saw defendant at their apartment. Fisher took his dog for a walk. After he returned to the apartment, he and defendant left the apartment at about 10:00 p.m. to shoot pool. Before leaving to shoot pool, defendant had gone out to his car with a towel and had informed Fisher that he had spilled something on the seat in his car. When they left in the car to shoot pool, Fisher rode on the passenger seat. When he got up from the seat, he felt moisture. At about 12:30-1:00 a.m. the following morning, they returned to their apartment. Fisher stated that he had no knowledge of defendant leaving the apartment after they went to bed. Fisher got up the next morning at about 7:30-8:00 a.m. but did not see defendant at that time. However, prior thereto at about 7:00 a.m., the telephone rang; and, after Fisher picked up the telephone receiver to answer the telephone, he placed the receiver back on the telephone because it had been answered (apparently by defendant). Fisher next saw defendant at the Capital Grocery Store later that day (May 7) at about 5:30-6:00 p.m. After work, Fisher and defendant went out and shot pool (as they had done on the preceding day). They returned to their apartment at about 1:30-1:45 a.m. on (Friday) May 8. Thereafter, Fisher left in defendant's car and went to a bar where he purchased some cocaine. Fisher then returned to his apartment with the cocaine. Subsequent thereto, Detectives Keller and Yarborough came to the apartment. At this first encounter with the detectives, the detectives informed Fisher that they wanted to talk to Benny Brown. According to Fisher, the detectives were very abrupt. Fisher testified that he lied to the detectives because he was scared and felt threatened by Keller's personality. Elaborating, Fisher explained that the cocaine was inside the apartment; and he and defendant thought the police wanted the narcotics he had purchased. Following this first encounter, the detectives returned to the apartment. At this second encounter, the detectives informed Fisher they were there in regard to a serious matter, i.e., the investigation of *384 the murder of a girl. The detectives questioned Fisher as to his knowledge of the victim and the whereabouts of a hibachi. Fisher would not allow the detectives to come into the apartment. Fisher went inside the apartment and informed defendant that the police were investigating the murder of a girl. In response, defendant stated that he had some trouble with a female probation officer. According to Fisher, defendant was in a state of panic. Fisher admitted that he had told the detectives that defendant was "acting like a caged animal" but he explained that he and defendant were "in a panic." After the second encounter, Fisher had a third encounter with the police. At this encounter, Fisher went outside his apartment. The police pointed to defendant's car and asked Fisher if he had previously seen the car. Fisher responded with a lie, denying that he had previously seen the car. Fisher testified that he was still scared at the third encounter because he had used the car to make the drug purchase. Before returning to his apartment, Fisher talked to a friend; and when Fisher returned to the apartment defendant was gone.
Salvador Saia, a landscape contractor, testified that defendant worked for him for about three weeks during May of 1987. On May 7, 1987, at about 7:30 a.m., Saia talked to defendant on the telephone when defendant telephoned him to determine if they would work that day. Later, at about 8:00 a.m., Saia telephoned defendant, advising him to come to work. At about 8:30 a.m. defendant arrived for work at Saia's shop. Defendant left his car at the shop, and he and Saia went to the home of Ms. Erica Carpenter in Saia's van. Saia and defendant worked at Ms. Carpenter's until about 5:00 p.m. During this work period at Ms. Carpenter's home, Saia was with defendant the entire time except for about forty-five minutes (between about 11:00-11:30 a.m. and about 12:00-12:15 p.m.) when Saia left defendant alone at the work site. During this approximate forty-five minute period, defendant had no transportation; and, when Saia returned to the worksite, he observed work defendant had done during his absence.
ASSIGNMENT OF ERROR NO. ONE:
In this assignment, defendant contends that the trial court erred by denying his motion for post-verdict judgment of acquittal. Defendant argues that the evidence of his identity as the perpetrator of the instant offense, which is entirely circumstantial, does not exclude every reasonable hypothesis of his innocence.
The constitutional standard for testing the sufficiency of evidence, enunciated in Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), requires that a conviction be based on proof sufficient for any rational trier of fact, viewing the evidence in the light most favorable to the prosecution, to find the essential elements of the crime charged and defendant's identity as the perpetrator of that crime beyond a reasonable doubt. See State v. Moore, 477 So. 2d 1231, 1233 (La.App. 1st Cir.1985), writs denied, 480 So. 2d 739, 741 (La.1986). This standard is codified in LSA-C.Cr.P. art. 821. When circumstantial evidence is used to prove the commission of a crime, LSA-R.S. 15:438 provides that, assuming every fact to be proved that the evidence tends to prove, in order to convict, it must exclude every reasonable hypothesis of innocence. Ultimately, all evidence, both direct and circumstantial, must be sufficient to satisfy a rational juror that the defendant is guilty beyond a reasonable doubt. State v. Rosiere, 488 So. 2d 965, 968 (La. 1986).
The evidence in this case amply proved beyond a reasonable doubt that Sheri Lynn Daigle was the victim of a (second degree) murder. Thus, the question before us is not whether or not the evidence was legally sufficient to prove the essential elements of the charged offense of second degree murder itself but, rather, whether or not the evidence was legally sufficient to prove defendant's identity as the perpetrator of this crime.[3] As noted by *385 defendant, the evidence concerning the requisite element of his identity as the perpetrator was entirely circumstantial.[4] We now focus our attention on the evidence introduced at trial and the various inferences which may reasonably be drawn from that evidence as proof that defendant perpetrated the instant offense.
On the evening of May 5, Michael Hood saw defendant and the victim engaging in a conversation. Hood did not hear what they were saying; but, when he later asked the victim what the topic of the conversation was, she told him that "[defendant] wanted to have sex with her, and she didn't want anything to do with [defendant]."[5] Pursuant to State v. Brown, 562 So. 2d 868 (La. 1990), Hood's recounting of the victim's disclosure of the subject matter of her conversation with defendant was admissible only to show that the victim was not sexually interested in defendant and to prove circumstantially her subsequent conduct, i.e., that (if defendant made sexual advances toward her) she would reject his sexual advances. This disclosure was particularly illuminating in light of Kimberly Cagle's testimony which revealed that on May 6, at about 5:00 p.m., defendant told her that he "needed to have a woman."[6]
On the evening of May 6 between approximately 5:00-6:45 p.m., several witnesses either saw defendant and the victim together in Spanish Town or saw the victim riding as a passenger in a car which they identified as the car depicted in S-65 and S-66 (the photographs of defendant's car) with defendant driving the car in the Spanish Town area. At about 5:30-6:00 p.m. that day, Derrick M. Foxx saw the victim get into the same car with the hibachi at the Prescott Place Apartments. According to Foxx, the car was being driven by defendant; and, in his May 9 oral statement to the police, defendant admitted to these facts which were revealed in Foxx's testimony. Foxx's testimony further revealed that, when he saw the victim get into defendant's car with the hibachi, the victim was dressed in clothing which matched that found on her body when it was removed from the septic tank. None of these witnesses ever again saw the victim alive after last seeing her with defendant on the evening of May 6.
During the police investigation of the instant offense, a hibachi (S-58) was found in some weeds in front of the house at 10443 Siegen Lane. This hibachi was positively identified as Beatty's hibachi, and *386 the state and the defense stipulated that it was the hibachi Deputy Foxx had seen the victim carrying.
When the victim's body was removed from the septic tank, her blue jeans were found unzipped and pulled down to her pubic area. Testing of a vaginal swab from the victim failed to detect the presence of seminal fluid. Regarding the presence of a laceration and contusions to the victim's chin, detected during the autopsy, Dr. Suarez's opinion as an expert in the field of forensic pathology was that these injuries might have been inflicted by a fist or blunt object; but the doctor also opined that these injuries could have been caused by placing the victim head first inside the septic tank. Nevertheless, a reasonable inference could be drawn from these circumstances that someone may have had sex or attempted to have sex with the victim.
Dr. Suarez's expert opinion was that the victim had died as a result of inhalation of some of the contents of the septic tank, although head injuries the victim had sustained (by being struck about the head with an instrumentality) were sufficient to have caused the victim's death. In the doctor's expert opinion, the victim died between six and twenty-four hours prior to the discovery of the body at about 7:00 p.m. on May 7, i.e., between approximately 7:00 p.m. on May 6 and 1:00 p.m. on May 7.
At about daybreak on May 7, Elgin Campbell sighted a car with its headlights unilluminated coming out of the driveway at 10443 Siegen Lane. While Campbell only observed the basic outline of the car, he indicated that its outline was no different from the outline of the car depicted in the photographs of defendant's car. When Campbell observed the car exiting the Siegen Lane location, he heard noise from a noisy muffler system. Later, during the police investigation of the instant crime, Campbell looked beneath defendant's car and saw that it had a "real bad" exhaust system that would have made plenty of noise.
Jim Churchman gave testimony (as an expert witness in the field of forensic comparisons) that, when he compared the tread design on the tires on defendant's car to those in the rubber cast made of the tire track impression found in the driveway at 10443 Siegen Lane, he determined that the left rear tire from defendant's car had the same tread design and similar wear characteristics as those in the rubber cast. Although Churchman could not make a positive identification that the tire which had made the impression on which the rubber cast had been poured, he could not rule out the hypothesis that the impression was of the left tire on defendant's car. Churchman also examined the muffler on defendant's car and found that the muffler had a hole in it.
The house behind which the victim's body was discovered was in an extremely secluded area off Siegen Lane. The distance from the front of the house to Siegen Lane was approximately six hundred and forty-two feet. According to Elgin Campbell, who lived across the street from the location at 10443 Siegen Lane, someone viewing the location from Siegen Lane could generally see only woods, although the outline of a structure at the location could be seen from Siegen Lane in the wintertime. Until Campbell saw the unlighted vehicle coming out of the driveway at 10443 Siegen Lane on the morning of May 7, he had not been aware of any traffic in or out of the driveway for months.
The area behind the house at the Siegen Lane location (in which the septic tanks were situated) was extremely overgrown, as reflected by the testimony of several witnesses including Chuck Smith, Charles Hughes, Carson Bueto and Don Strickland. The pathway through this overgrowth was narrow (about eighteen inches wide). The testimony given by Chuck Smith and Randy Keller reflected that this pathway had been recently formed by trampling down the overgrowth. Due to the thickness and height of overgrowth described by the witnesses and the circumstance that the pathway led directly to the septic tanks where the body was found, it could reasonably be concluded that the pathway had been formed by the individual who had placed the victim's body in the septic tank and *387 that that person had prior knowledge of the location of the septic tanks.
Testimony given by Thomas E. Hart, Laura Cramer and Roy G. Skiba revealed that defendant knew about the Siegen Lane location; and Skiba's testimony further revealed that defendant had been with him in the area behind the house at the location where the septic tanks were located after the area had been mowed and that at that time the septic tanks were observable from where defendant was standing.
In both his May 8 oral statement and his May 11 taped statement, defendant lied about his knowledge of the house at the Siegen Lane address. He made efforts to conceal this knowledge by asking Laura Cramer not to disclose to anyone that he knew about the location; and, on one occasion, he remarked to Cramer that he "hoped [she] didn't `f' him over" by telling anyone that he knew about the location.
Lt. Keller's testimony revealed that, during defendant's May 11 taped statement, defendant's demeanor changed when he was confronted with the fact that he had been to the house at 10443 Siegen Lane. When confronted with "lie after lie," defendant's demeanor changed from that of a person who had been calm and collected to a person who began shaking with his eyes "teared up." These circumstances raise the inference of a guilty mind. See State v. Guirlando, 491 So. 2d 38, 41 n. 4 (La. App. 1st Cir.1986).
Viewing all of the evidence introduced in this case, both direct and circumstantial, in the light most favorable to the state, we find that any rational trier of fact could have concluded beyond a reasonable doubt and to the exclusion of any reasonable hypothesis of innocence that defendant committed the second degree murder of Sheri Lynn Daigle. Hence, this assignment lacks merit.
ASSIGNMENT OF ERROR NO. TWO:
By means of this assignment, defendant contends that the trial court erred by denying his constitutional right to present a defense by excluding the introduction of the testimony of Detective Don Strickland recounting an exculpatory statement of Jamie Gary, a ten year old girl, made to Strickland during the investigation of Sherri Lynn Daigle's homicide. Defendant asserts that the excluded testimony was critical to his defense because it refutes the state's theory as to the time of the victim's death and would have allowed him to prove an alibi for the later time of death which would have been established through the excluded testimony.
Prior to trial, defendant filed a motion in limine in the district court requesting that the court permit the hearsay testimony of Detective Strickland as to Jamie Gary's statement to him that she saw the victim at approximately 3:00 p.m. on Thursday, May 7, 1987, the same day the victim's body was discovered. In the motion, defendant asserted that the statement was essential to his defense, and that he had exercised due diligence in his efforts to locate, interview, and subpoena Jamie Gary, all of which efforts were unsuccessful. Defendant's motion concluded that he had no means of presenting Gary's statement except through Strickland's hearsay testimony.[7]
On the first day of the trial, prior to jury selection, the trial court conducted a hearing on defendant's motion in limine. At the hearing, defense counsel conceded that there had been some error in Jamie Gary's statement to Strickland insofar as Gary's statement indicated that, at the time she saw the victim on May 7, the victim was getting into a car that Gary later identified as defendant's car. Defense counsel elaborated that the above referenced portion of Gary's statement reflected erroneous recollection by the child because there would be testimony given during the trial indicating the car Gary saw the victim get into could not have been defendant's car; however, defense counsel maintained that (although the child was mistaken about the car being defendant's car) Gary was not mistaken about the identity of the victim, a person *388 she knew. Defense counsel argued that in light of her unsuccessful efforts to locate Jamie Gary and Jamie's mother, the child's testimony was unavailable and that the presentation of the child's statement through Detective Strickland's testimony was critical to the defense because it narrowed the time frame within which the victim was murdered. The state objected to the motion on the basis that Strickland's testimony as to the child's statement to him was hearsay as to which the state would have no opportunity to cross-examine the child. Without articulating any reasons for its ruling, the trial court denied defendant's motion. Later, during trial Strickland took the stand as a state witness; and, during his cross-examination, Strickland testified that during his investigation of the instant offense he spoke to Ms. Gary, a ten year old female. At that juncture of Strickland's testimony, defense counsel propounded the following question to Strickland: "Did you receive information that the victim was seen on Thursday, May 7, in the afternoon?" The prosecutor objected to the question; and, out of the jury's presence, the trial court ruled (in conformity with its earlier ruling denying defendant's motion in limine) that defense counsel could ask Strickland if he had received information from Jamie Gary provided defense counsel did not include any of the content of Gary's statement to Strickland in the question she would propound to Strickland. Thereafter, upon resumption of defense counsel's cross-examination of Strickland, (in conformity with the trial court's ruling) she asked Strickland if he had received information from Jamie Gary and Rebecca Gary (Jamie's mother) on Monday, May 11; and Strickland answered in the affirmative.
Defendant correctly concedes that the statement of Jamie Gary, which he sought to elicit through Strickland's testimony, is hearsay. It is also clear that the statement does not fit into any of the recognized exceptions to the hearsay rule whereby it would be admissible.
A criminal defendant has a constitutional right to present a defense. U.S. Const., Amendments VI, XIV; La. Const. Art. I, § 16. See State v. Webb, 424 So. 2d 233, 237 (La.1982); State v. Washington, 386 So. 2d 1368, 1373 (La.1980). While hearsay should generally be excluded, if it is reliable and trustworthy and its exclusion would interfere with the defendant's constitutional right to present a defense, it should be admitted. State v. Gremillion, 542 So. 2d 1074, 1078 (La.1989).
In this case, the defense sought to utilize Gary's statement that she had seen the victim alive at about 3:00 p.m. on the day her body was found four hours later. According to Dr. Suarez's expert opinion, the victim had died between six and twenty-four hours before the discovery of her body in the septic tank. The doctor stated that the rigor and circumstance of the body having been submerged underground were probably more consistent with death having occurred twenty-four hours before the body was found; however, the doctor was unable to exclude the hypothesis that death had occurred as late as 1:00 p.m. on May 7. Clearly, Jamie Gary's statement is in direct conflict with Dr. Suarez's expert testimony since the statement indicates that the victim was seen alive by Gary approximately two hours after the latest hour the victim could have died according to the opinion expressed by Dr. Suarez. In addition to this direct conflict with the expert evidence of the time of the victim's death, there is not one shred of other evidence that corroborates Jamie Gary's statement. As conceded by the defense, Gary could not have seen the victim get into defendant's car at the time she allegedly saw the victim on May 7 (a time at which evidence introduced at trial established that the car was at Salvador Saia's shop). Moreover, the statement included a description of the clothing worn by the victim at the time of Gary's alleged sighting of the victim that matched the attire found on the victim's body and the clothing Deputy Foxx described as that worn by the victim when he saw the victim get into defendant's car on May 6. Therefore, it could reasonably be concluded that it was more probable that Jamie Gary had seen the victim get into defendant's car on May 6 rather than on the following day. Under the circumstances, we find the hearsay *389 statement defendant sought to introduce was unreliable and untrustworthy and its exclusion did not interfere with defendant's constitutional right to present a defense.
This assignment lacks merit.
ASSIGNMENT OF ERROR NO. THREE:
In this assignment, defendant asserts that the trial court erred by denying his motion for a mistrial based upon the state's elicitation of a state witness' testimony concerning a threat allegedly made by defendant. Defendant argues that the testimony at issue was solicited by the prosecutor and that, pursuant to LSA-C.Cr.P. Art. 771, the prejudice which was created by this testimony was not cured by the trial court's admonition to the jury to disregard the testimony. Defendant concludes that, because an admonition was insufficient to assure him a fair trial under Art. 771, he was entitled to a mistrial.
The testimony concerning the alleged threat forming the basis for this assignment was given by state witness Roy G. Skiba on direct examination immediately after Skiba testified that he had lived at the house located at 10443 Siegen Lane for a couple of years; that he knows defendant; that defendant visited his sister, Dawn Harding, every couple of days at that house; and that on an occasion (after the area behind the house had been mowed) he and defendant were standing in the area of the septic tanks where the tanks could be seen. The prosecutor's question and Skiba's response which referred to the alleged threat at issue in this assignment are as follows:
Q. Did he ever help you try to clean out the septic tank?
A. He triedhe tried to unstop a line with my sister, yes, ma'am, and he threatened to throw her in.
Thereupon, defense counsel asked that the jury be retired from the courtroom. After the court granted the request, defense counsel moved for a mistrial on the basis of Skiba's testimony concerning defendant's alleged threat to throw Dawn Harding into one of the septic tanks. In response, the prosecutor stated that she was not trying to elicit the answer given by Skiba when she asked him if defendant had ever helped him clean out the septic tank and that, thus, the answer was not responsive to her question. The trial court then questioned Skiba and determined that Skiba was not present when the alleged threat was made. Instead, Skiba's mother and sister told him about it. Additionally, Skiba stated that he "guess[ed]" that the alleged threat had been made in a joking manner. In issuing its ruling denying the requested mistrial, the trial court stated that it would admonish the jury to completely disregard the witness' last statement and inform the jury that that statement was not based on information personally known by the witness and known by the witness to be true. After the jury was returned to the courtroom, the trial court so admonished and informed the jury.
LSA-C.Cr.P. Art. 771 provides in pertinent part:
In the following cases, upon the request of the defendant or the state, the court shall promptly admonish the jury to disregard a remark or comment made during the trial, or in argument within the hearing of the jury, when the remark is irrelevant or immaterial and of such a nature that it might create prejudice against the defendant, or the state, in the mind of the jury:
* * * * * *
(2) When the remark or comment is made by a witness or person other than the judge, district attorney, or a court official, regardless of whether the remark or comment is within the scope of Article 770.
In such cases, on motion of the defendant, the court may grant a mistrial if it is satisfied that an admonition is not sufficient to assure the defendant a fair trial.
Mistrial under this article is at the discretion of the trial court and should be granted only where the prejudicial remarks of the witness make it impossible for a defendant to obtain a fair trial. State v. Feet, 481 So. 2d 667, 672-673 (La.App. 1st Cir. *390 1985), writ denied, 484 So. 2d 668 (La.1986). The trial court's ruling as to whether a fair trial is impossible or whether an admonition is adequate to assure a fair trial when a prejudicial remark or comment does not fit within the mandatory provisions of LSA-C.Cr.P. Art. 770 will not be disturbed on appellate review absent an abuse of discretion. State v. Narcisse, 426 So. 2d 118, 133 (La.), cert. denied, 464 U.S. 865, 104 S. Ct. 202, 78 L. Ed. 2d 176 (1983). An examination of the prosecutor's question, the witness' response, and the context in which the question and response appear reveals that the witness' answer was unsolicited and unresponsive. Unsolicited and unresponsive testimony is not chargeable against the state to provide a ground for reversal. State v. Michel, 422 So. 2d 1115, 1118 (La.1982). In this case, the trial court correctly determined that an admonition was sufficient. Hence, the harsh remedy of a mistrial was not required to preserve defendant's right to a fair trial.
This assignment lacks merit.
ASSIGNMENT OF ERROR NO. SIX:
By means of this assignment, defendant contends that the trial court erred by granting the state's motion to have the jury view the scene at 10443 Siegen Lane during the trial. To support his claim that granting the state's motion was an abuse of the trial court's discretion, defendant submits that the scene on March 16, 1988, (the third day of trial) was substantially different from that which existed on May 7, 1987, (the date the victim's body was discovered); the trip to the scene was an unnecessary interruption of the trial in light of the numerous photographs of the scene and the diagram of the scene (which the state introduced) and aerial photographs of the scene presented in evidence by the defense; the trip to the scene was designed solely to inflame the jury and lengthen the state's presentation of its case-in-chief; and balancing the prejudicial impact viewing the scene had on the jury against the small, if any, probative value of viewing the scene, the trial court should have denied the state's motion.
On the first day of trial (March 14, 1988), the state filed a written motion to have the jury view the scene; and, at the beginning of the first day of the trial prior to the jury selection, the court heard arguments by the state and the defense on the motion. After stating that it would probably grant the state's motion, the trial court indicated it would issue a ruling on the motion before opening statements were made to the jury. On the following day, during the jury selection process, the trial court informed the prosecutor and defense counsel that, because of the large area encompassed by the scene where the victim's body was found and possible problems of photographs depicting the scene, the court would grant the state's motion to have the jury view the scene if the sheriff was able to coordinate the transportation and logistics involved in such a viewing.
The record reflects that on March 16, 1988, at 3:25 p.m., (the third day of trial) during the state's presentation of its case-in-chief, the jury, the trial judge, defendant, the prosecutor, defense counsel, and other court personnel left the courthouse en route to the Siegen Lane location where they arrived at 3:47 p.m. Later, at 4:35 p.m. (fifty-eight minutes after their departure from the courthouse), they returned to the courthouse from the crime scene.
LSA-C.Cr.P. Art. 762(2) provides, in pertinent part, that a trial court may, in its discretion, hold its court session in places within the parish other than the courthouse:
To allow the jury or judge to view the place where the crime or any material part thereof is alleged to have occurred, or to view an object which is admissible in evidence but which is difficult to produce in court.
It is well-settled that the decision regarding whether to grant or deny a motion to have the jury view the scene of the crime is within the sound discretion of the trial court, and such a ruling will not be disturbed on appeal absent an abuse of that discretion. LSA-C.Cr.P. Art. 762(2); State v. Moore, 432 So. 2d 209, 216 (La.), cert. denied, 464 U.S. 986, 104 S. Ct. 435, 78 *391 L.Ed.2d 367 (1983). Under the circumstances of the instant case, we find that the trial court did not abuse its discretion in granting the state's motion to have the jury view the Siegen Lane location.
This assignment is meritless.
ASSIGNMENT OF ERROR NO. NINE:
By means of this assignment, defendant contends that pursuant to LSA-R.S. 44:3; State v. McEwen, 504 So. 2d 817 (La.1987) and State v. Shropshire, 471 So. 2d 707 (La.1985), he was entitled to the entire twenty-seven page police report of Detective Don Strickland and not just the first four pages and a portion of the fifth page of the report which this Court determined was public record to which defendant was entitled in State v. Brown, No. KW 87 1663 (La.App. 1st Cir. Dec. 22, 1987), writ denied, 516 So. 2d 374 (La.1988).
In Brown, this Court granted the state's application for supervisory writs and reversed the trial court's October 22, 1987, ruling that defendant was entitled to the entire twenty-seven page report of Detective Strickland. After examining the entire report of Detective Strickland in light of LSA-R.S. 44:3, the McEwen and Shropshire cases and other jurisprudence, this Court concluded that, under LSA-R.S. 44:3A(4), only an initial police report was public record and that the statute excluded from the public record "any followup or subsequent report or investigation."[8] We noted that, while the Shropshire decision recognized such a line of demarcation, neither it nor the statute offered any guidelines as to where to draw the line between an initial police report and a report on a subsequent investigation. We further noted that it was obvious that such a line must be drawn. Hence, after examining the report of Strickland, we found specifically that the initial report consisted of only the first four pages and a portion of the fifth page of the report ending with a specific sentence which we quoted in our decision; we found that the remaining portion of Strickland's report was a report of a followup or subsequent investigation not constituting public record. Accordingly, we ordered the state to provide defendant only the portion of Strickland's report which we found to constitute the initial police report; and we remanded the case to the trial court for further proceedings consistent with our expressed views.
In this appeal, defendant has presented no new arguments to this Court. Therefore, we maintain our previous ruling expressed in KW 87 1633 referenced above. Cf. State v. Daniels, 552 So. 2d 781, 784 (La.App. 1st Cir.1989, writ denied, 558 So. 2d 581 (La.1990).
This assignment lacks merit.
ASSIGNMENT OF ERROR NO. TEN:
By means of this assignment, defendant contends that the trial court erred by sustaining the state's objection to testimony regarding the victim's state of mind in reference to her former boyfriend, a possible suspect.
During Vince Fender's cross-examination, Fender stated that the victim had introduced him to "Darryl who drives a white Trans Am." Immediately thereafter, *392 defense counsel asked Fender: "What did [the victim] tell you about Darryl in the white Trans Am?" The trial court sustained the prosecutor's general objection to this defense question. On appeal, without disclosing how the testimony sought to be elicited through the disallowed question was admissible as evidence of the victim's state of mind, defendant vaguely asserts that the testimony was admissible to show that someone other than defendant had an opportunity to commit the instant offense. However, the record does not reflect that defendant ever articulated to the trial court that the testimony he sought to elicit was admissible on the basis argued on appeal; and contrary to defendant's assertion on appeal that the trial court refused to allow defense counsel to argue the admissibility of the testimony in question, the record fails to reflect any such refusal by the trial court. However, the record does reflect that, instead of arguing the ground for admissibility of the testimony argued on appeal, defense counsel argued only one completely different ground for objection, i.e., that the testimony sought to be elicited through the disallowed question was admissible as an exception to the hearsay rule because the person making the statement (identified only as "Darryl who drives a white Trans Am") was unavailable due to his death. Because the ground argued on appeal for admissibility of the testimony was never articulated to the trial court, it represents a new ground for objection not properly before this Court which cannot be raised for the first time on appeal. See LSA-C.Cr.P. Art. 841; State v. Brown, 481 So. 2d 679, 686-687 (La.App. 1st Cir.1985), writ denied, 486 So. 2d 747 (La.1986).
Accordingly, this assignment lacks merit.
ASSIGNMENT OF ERROR NO. THIRTEEN:
By means of this assignment, defendant submits that the trial court erred by denying his motion for mistrial on the basis that (during a recess of the trial) three members of the jury viewed defendant, while he was dressed in prison garb and handcuffed, being escorted by a deputy sheriff in the lobby of the courthouse and outside the courthouse (i.e. across the street and in the parking lot). Defendant argues that this alleged viewing of him by the three jurors prejudiced him by eroding or destroying his presumption of innocence, a prejudice which could not be overcome.
Ordinarily, a defendant before the court should not be shackled or handcuffed or garbed in any manner destructive of the presumption of his innocence and of the dignity and impartiality of judicial proceedings. State v. Smith, 504 So. 2d 1070, 1078 (La.App. 1st Cir.1987). If a defendant objects at trial to his being shackled, handcuffed or attired in prison garb, for a finding of reversible error the record must show an abuse of the trial court's reasonable discretion resulting in clear prejudice to the accused. State v. Wilkerson, 403 So. 2d 652, 659 (La.1981).
In the instant case, on Saturday, March 19, 1988, at the conclusion of the presentation of evidence by the state and the defense, the trial was recessed until the following Monday at 9:00 a.m. When the trial resumed on Monday (out of the jury's presence) defense counsel moved for a mistrial based on the jurors' having allegedly viewed him in prison garb and handcuffed while being escorted by a deputy sheriff on the preceding Saturday after the trial court recessed the trial. When questioned by the trial court as to which three jurors had allegedly viewed defendant, defense counsel stated that defendant could clearly identify only one of the three jurors involved, Ms. Spikes, and that he could identify the other two only as two white female jurors.
At the behest of the trial court, East Baton Rouge Parish Deputy Sheriff Charles Duplantier was called to the stand and sworn as a witness. Duplantier testified that late during the day on the preceding Saturday, he escorted defendant from the courthouse to the jail facility across the street from the courthouse. When he rode the elevator with defendant down to the (ground floor) lobby of the courthouse, defendant was handcuffed and dressed in prison garb. Immediately upon stepping out of the elevator into the lobby, Duplantier noticed some people sitting to his right *393 on the south side of the lobby. When asked if these people saw defendant, Duplantier stated that he "[did not] see how they could have miss[ed]" defendant. However, Duplantier indicated that he did not look toward the people seated in the lobby. Thus, Duplantier did not even know if these people were three women; and, hence, he obviously could not identify them. Duplantier's attention had been focused on defendant whom he was escorting. Duplantier denied that he deliberately took defendant down the elevator so that jurors might have an occasion to view defendant. Duplantier indicated the encounter with whomever was seated in the lobby was unavoidable; and, upon the occurrence of the encounter, he quickened the pace of his escorting of defendant from the lobby to the jail facility across the street.
At the conclusion of Duplantier's testimony, the trial court asked the prosecutor and defense counsel if there was any objection to calling Ms. Spikes as a witness in regard to the three jurors' alleged viewing of defendant, noting that Spikes might be able to identify the other two jurors who were allegedly with her at the time in question. In response, defense counsel stated that (if the court was not going to grant the requested mistrial) she thought calling the three persons as witnesses "would only heighten the incident for those three jurors." Thereupon, the court observed that it was possible (though not probable) that three jurors sitting in the lobby might not have even looked up when defendant came out of the elevator with Duplantier; and the court took cognizance that, if any jurors were seated in the lobby and failed to pay attention or even recognize that it was defendant who was being escorted, defendant certainly would not have sustained any prejudice by the encounter. After noting that Ms. Spikes would probably recall who was present at any encounter in the lobby, the trial court made reference to defense counsel's statement that calling the jurors as witnesses might only heighten the incident and denied the motion for mistrial.
We find that the trial court did not abuse its discretion in refusing to grant defendant's motion for mistrial. The instant record does not even substantiate the occurrence of the alleged encounter between defendant and one or more jurors. Even assuming arguendo that the alleged encounter occurred, the scenario envisioned by defendant's allegation of one or perhaps as many as three jurors seeing defendant dressed in prison clothes and handcuffed (while defendant was being escorted by a deputy from the courthouse to jail during a recess of the trial) would not have so prejudiced defendant as to warrant relief on appeal. See State v. Wilkerson, 403 So.2d at 659. Mistrial is a drastic remedy and should be granted on a showing of substantial prejudice. There is no showing that defendant's presumption of innocence was destroyed or that any juror was influenced by seeing defendant in prison clothing and handcuffs. See State v. Burge, 486 So. 2d 855, 866 (La.App. 1st Cir.), writ denied, 493 So. 2d 1204 (La.1986).
This assignment lacks merit.
CONVICTION AND SENTENCE AFFIRMED.
SAVOIE, J., dissents and assigns reasons.
SAVOIE, Judge, dissenting.
As stated by the majority, the constitutional standard for testing the sufficiency of evidence, enunciated in Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), requires that a conviction be based on proof sufficient for any rational trier of fact, viewing the evidence in the light most favorable to the prosecution, to find the essential elements of the crime charged and the defendant's identity as the perpetrator of that crime beyond a reasonable doubt. See State v. Moore, 477 So. 2d 1231, 1233 (La.App. 1st Cir.1985), writs denied, 480 So. 2d 739 and 480 So. 2d 741 (La.1986). This standard is codified in LSA-C.Cr.P. art. 821. When circumstantial evidence is used to prove the commission of a crime, LSA-R.S. 15:438 provides that, assuming every fact to be proved that the evidence tends to prove, in order to convict, it must exclude every reasonable *394 hypothesis of innocence. Ultimately, all evidence, both direct and circumstantial, must be sufficient to satisfy a rational juror that the defendant is guilty beyond a reasonable doubt. State v. Rosiere, 488 So. 2d 965, 968 (La.1986).
Viewing all of the evidence in the light most favorable to the state, the evidence amply proved beyond a reasonable doubt that one or more persons committed the (second degree) murder of Sheri Lynn Daigle. Thus, the question before us is not whether the evidence was legally sufficient to prove the essential elements of the charged offense of second degree murder itself but, rather, whether the evidence was legally sufficient to prove defendant (alone or with another) perpetrated this crime.[1] As noted by defendant, the evidence concerning the requisite element of his identity as the (a) perpetrator was entirely circumstantial. We now focus our attention on the evidence introduced at trial and the various inferences which may reasonably be drawn from that evidence as proof that defendant perpetrated the instant offense.
On the evening of May 5, Hood saw defendant and the victim engaging in a conversation. Hood did not hear what they were saying; but, when he later asked the victim what was the topic of the conversation, Hood alleges she told him that "[defendant] wanted to have sex with her, and she didn't want anything to do with [defendant]."[2] Pursuant to State v. Brown, 562 So. 2d 868 (La.1990), Hood's recounting of the victim's disclosure of the subject matter of her conversation with defendant was admissible only to show that the victim was not sexually interested in defendant and to prove circumstantially her subsequent conduct, i.e., that (if defendant made sexual advances toward her) she would probably reject his sexual advances.
When the victim's body was removed from the septic tank, her blue jeans were found unzipped and pulled down to her pubic area. Testing of a vaginal swab from the victim failed to detect the presence of seminal fluid. Regarding the presence of a laceration and contusions to the victim's chin, detected during the autopsy, Dr. Suarez opined that these injuries might have been inflicted by a fist or blunt object; but the doctor also opined that these injuries could have been caused by placing the victim head first inside the septic tank. Nonetheless, while one reasonable inference that could be drawn from these circumstances is that one or more persons may have had sex or attempted to have sex with the victim an equally reasonable inference is that her jeans were pulled down by the manner in which she was placed in the tank.
According to Kimberly Cagle, on May 6, at about 6:00 or 6:30 p.m., defendant told her that he "needed to have a woman." While communication of a desire to another person (expressing the need for one of *395 the opposite sex) may not be a common occurrence, the desire itself surely does not reflect one uncommon to most adult members of our society. Nor does such a vague, oblique communication expressing a "[need] to have a woman" necessarily impart the wish or intention of the person (making the communication) to have sex or the desire or intention of that person, if the opportunity arises, to actually engage in sex.[3]
On the evening of May 6 between approximately 5:00-6:45 p.m., several witnesses either saw defendant talking to the victim in Spanish Town or saw the victim riding as a passenger in defendant's car with defendant driving the car in the Spanish Town area; and, at about 5:30-6:30 p.m. that day, Derrick M. Foxx saw the victim get into defendant's car with her hibachi at the Prescott Apartments. Subsequently, the victim's body was found in the septic tank behind the house at 10443 Siegen Lane, a location miles away from where the witnesses had last observed the victim on the preceding day. Other than Elgin Campbell's testimony concerning his sighting of a vehicle exiting the road leading to the Siegen Lane location at daybreak on May 7, there was no evidence even suggesting that defendant was seen by anyone at or near the Siegen Lane location after he was last seen with the victim. In regard to the car Campbell sighted, he stated that he saw only the basic outline of the vehicle. While the car Campbell sighted and defendant's car apparently both had faulty or noisy muffler systems, Campbell testified that he could not rule out the hypothesis that defendant's car was not the one he sighted on the morning of May 7; and, hence, Campbell's testimony was essentially inconclusive.
Dr. Suarez's expert opinion reflected that the victim's death occurred between approximately 7:00 p.m. on May 6 and 1:00 p.m. on May 7. During this time frame of about eighteen hours (which begins shortly after the approximate time testifying witnesses last saw defendant and the victim together), it was possible for anyone to have killed the victim. The circumstance of the victim's hibachi being found in the grass at the location where her body was discovered adds little, if anything, to the other circumstances; neither the hibachi nor any other particular object was ever established as the murder weapon.
An examination of the hibachi by the state's forensic expert (Charles Guarino) failed to reveal the presence of blood, human tissue or hair. His tests of the vaginal swab from the victim did not detect seminal fluid, and his examination of defendant's car also failed to reveal the presence of blood or seminal fluid. Accordingly, the failure to detect blood or seminal fluid in the car essentially rendered the evidence of the damp spot on the passenger seat of defendant's car useless evidence, in the absence of some other evidence of the nature of the dampness which might have linked the damp spot to the instant crime. Forensic scientist Jim Churchman compared the tires on defendant's car to the cast of the tire track impression found in the driveway to the location where the body was found. The rear left tire of defendant's vehicle was determined by Churchman as having the most similarities to the impression in the cast. While Churchman could not rule out the hypothesis that the impression was of the left rear tire of defendant's car, he could likewise not rule out the hypothesis that the impression was of some other tire. Hence, this evidence was essentially inconclusive.
The circumstances of the secluded nature of the location where the victim's body was found and defendant's prior knowledge of that location was relied upon heavily by the state. Yet, having such knowledge was certainly not exclusive to defendant or Brett Fontenot. Within about six to twenty-four *396 hours of the victim's death (as per Dr. Suarez's expert opinion), the victim's body was found by Fontenot and Johnson. An individual(s), with or without prior knowledge of that location, could have gone to the location with the victim or encountered her there; and, under any of these scenarios, the individual(s) could have killed the victim. Additionally, the state placed emphasis on defendant's prior knowledge of the location of the septic tanks. Even without prior knowledge of the location of the septic tanks, the victim's killer(s) could have surmised that a house in a secluded area far removed from other residences was probably equipped with a septic tank sewer system, or the killer(s) could have first located the septic tank (the covers of which were at ground surface level) in the highly overgrown area behind the house (without trampling the overgrowth) and then dragged the victim's body directly to the middle septic tank, thereby causing the pathway of trampled overgrowth which was found at the crime scene.
The state also relied on defendant's flight from his apartment on May 8 when Detectives Keller and Yarborough went there to talk to defendant, defendant's attempts to conceal his knowledge of the Siegen Lane location by asking Laura Cramer not to disclose to anyone that he possessed knowledge of the location, defendant's statement to Cramer (in reference to whether she had disclosed his knowledge of the location) that he "hoped she didn't `f' him over," defendant's lies (primarily relating to his claimed lack of knowledge of the Siegen Lane location), and the accompanying changes in defendant's physical demeanor during the taping of defendant's May 11 statement to Keller and Yarborough, which (according to Keller) changed from being calm and collected to defendant shaking and having his eyes "teared up" when he was confronted. While evidence such as that delineated above may raise an inference of a "guilty mind," it is not alone sufficient to convict. See State v. Shapiro, 431 So. 2d 372, 388 (La.1983), on rehearing; State v. Savoy, 418 So. 2d 547, 551 (La. 1982); State v. Guirlando, 491 So. 2d 38, 41 n. 4 (La.App. 1st Cir.1986). While recognizing that there was evidence that prior to defendant's flight Scott Fisher had communicated to him that the officers wanted to talk to him in regard to their investigation of the murder of a girl, the convergence of these circumstances and the additional circumstances (evincing defendant's knowledge that he was being sought for a Texas parole violation, and his knowledge of Fisher's illicit drug transaction, including Fisher's return to their apartment with the illicit drugs shortly before the police came to defendant's apartment) severely muddles any indication of guilty knowledge stemming from defendant's flight from his apartment. In any event, notwithstanding any indication of a guilty mind flowing from any of the evidence referenced in this paragraph, I am convinced that under the Jackson v. Virginia standard the evidence in this case was legally insufficient to establish that defendant was the (a) perpetrator of the instant homicide. Cf. State v. Shapiro, on rehearing, 431 So.2d at 388; State v. Savoy, 418 So.2d at 551.
Objectively the state has proven only that: 1) the victim was last seen with defendant; and 2) the defendant was familiar with the location where the body was found and attempted to conceal this knowledge. These two facts, standing alone, do not in my humble opinion, constitute proof sufficient to convict. I do not find this matter to be a question of the rights of the defendant or the rights of the victim; rather it is a question of the application of the law to facts presented in the record. From those facts I must conclude that the state failed to prove the defendant's guilt beyond a reasonable doubt and to the exclusion of every reasonable hypothesis of innocence. Based upon all the evidence, both direct and circumstantial, and the reasonable competing inferences that may be drawn therefrom, I find that the evidence fails to exclude the reasonable hypothesis of innocence that the murder of Sheri Lynn Daigle was committed not by defendant but by one or more other persons. Thus, viewing the evidence in the light most favorable to the state, I find that a rational trier of fact *397 could not have concluded beyond a reasonable doubt and to the exclusion of every reasonable hypothesis of innocence that the state proved defendant perpetrated this offense.
For the above and foregoing reasons I respectfully dissent.
NOTES
[1] The record reveals that on May 7, 1987, Hughes was employed as an East Baton Rouge Parish Deputy Sheriff and that he went to 10443 Siegen Lane and worked there as a crime scene investigator.
[2] The record reveals that the excised versions were the result of the trial court's ruling that references to defendant having failed a polygraph test and certain references to drugs had to be deleted from the original tapes.
[3] In this case, as disclosed by the state's answer to defendant's motion for a bill of particulars, the state sought to prove second degree murder as defined in LSA-R.S. 14:30.1A(1), which defines second degree murder as the killing of a human being when the offender has a specific intent to kill or to inflict great bodily harm.
[4] At trial, the state theorized that the defendant committed the murder between 7:00 and 9:00 p.m. on Wednesday, May 6, 1987, and that defendant returned to the scene of the crime to cover his tracks early on the morning of the following day.
[5] It was on the basis of the admission of the quoted testimony of Hood (concerning the subject matter of defendant's conversation with the victim) over defense counsel's hearsay objection that we reversed defendant's conviction and sentence in State v. Brown, 549 So. 2d 323 (La.App. 1st Cir.1989), reversed, 562 So. 2d 868 (La.1990). In reversing our decision, the Louisiana Supreme Court found this quoted testimony was admissible evidence to prove the victim's state of mind, and relevant to show the victim was not sexually interested in defendant and would have rejected his sexual advances. In reaching its decision, the Supreme Court stated that, to protect against any possible misapplication of the extrajudicial declaration of the victim, defendant should have requested a limiting instruction directing the jury to consider the declaration as evidence only of the victim's state of mind or of circumstantial proof of her subsequent conduct rather than the truthfulness of the assertion that defendant "wanted her;" however, the Supreme Court concluded that the omission of a limiting instruction was harmless in this case based on the "overwhelming evidence of Brown's guilt." 562 So.2d at 880-881. Consequently, in reviewing the sufficiency of the evidence, we may consider this evidence only in strict conformity with our Supreme Court's pronouncements in State v. Brown, 562 So. 2d 868 (La.1990).
[6] We note that the portion of the extrajudicial declaration of the victim recounted through Hood's testimony that "[defendant] wanted to have sex with her" was found in State v. Brown, 562 So.2d at 880, to be inadmissible hearsay; and, thus, not evidence of the truthfulness of the statement. However, as noted by the Supreme Court "any improper inference the jury might have drawn from the declaration is overshadowed by defendant's statement to Cagle, evincing his subjective state of mind that he `needed to have a woman.'" 562 So.2d at 880.
[7] During the hearing on the motion in limine, (as evidence of the diligence exercised by defense counsel in trying to locate Jamie Gary) the state stipulated to the extensive unsuccessful efforts defense counsel had made to locate Jamie Gary and her mother.
[8] LSA-R.S. 44:3A(4) as amended by Acts 945 of 1984 and 785 of 1986, in effect and applicable in this case, provided as follows:
A. Nothing in this Chapter shall be construed to require disclosures of records, or the information contained therein, held by the offices of the attorney general, district attorneys, sheriffs, police departments, Department of Public Safety and Corrections, marshals, investigators, public health investigators, public health inspectors, or public health agencies, correctional agencies, or intelligence agencies of the state, which records are:
* * * * * *
(4) The records of the arrest of a person, other than the report of the officer or officers investigating a complaint, until a final judgment of conviction or the acceptance of a plea of guilty by a court of competent jurisdiction. However, the initial report of the officer or officers investigating a complaint, but not to apply to any followup or subsequent report or investigation, records of the booking of a person as provided in Louisiana Code of Criminal Procedure Article 228, records of the issuance of a summons or citation, and records of the filing of a bill of information shall be a public record.
[1] In this case, as disclosed by the state's answer to defendant's motion for a bill of particulars, the state sought to prove second degree murder as defined in LSA-R.S. 14:30.1A(1), which defines second degree murder as the killing of a human being when the offender has a specific intent to kill or to inflict great bodily harm.
[2] It was on the basis of the admission of the quoted testimony of Hood (concerning the subject matter of defendant's conversation with the victim) over defense counsel's hearsay objection that we reversed defendant's conviction and sentence in State v. Brown, 549 So. 2d 323 (La.App. 1st Cir.1989), reversed, 562 So. 2d 868 (La.1990). In reversing our decision, the Louisiana Supreme Court found this quoted testimony was admissible evidence to prove the victim's state of mind, and relevant to show the victim was not sexually interested in defendant and would have rejected his sexual advances. In reaching its decision, the Supreme Court stated that, to protect against any possible misapplication of the extrajudicial declaration of the victim, defendant should have requested a limiting instruction directing the jury to consider the declaration as evidence only of the victim's state of mind or of circumstantial proof of her subsequent conduct rather than the truthfulness of the assertion that defendant "wanted her;" however, the Supreme Court concluded that the omission of a limiting instruction was harmless in this case. I cannot help but note, however, that the limited purpose of this highly inflammatory and prejudicial testimony was never explained to the jury. While I agree with the dissents of Justices Lemmon and Dennis in Brown, nonetheless, in reviewing the sufficiency of the evidence, I must consider this evidence only in strict conformity with our Supreme Court's majority pronouncements in State v. Brown, 562 So. 2d 868 (La.1990).
[3] We note that the portion of the extrajudicial declaration of the victim recounted through Hood's testimony that "[defendant] wanted to have sex with her" was found in State v. Brown, 562 So. 2d 868, 880 (La.1990), to be inadmissible hearsay; and, thus, not evidence of the truthfulness of the statement. Consequently, this testimony was not admissible to show defendant had a sexual interest in the victim; and, thus, it added nothing to defendant's statement to Cagle that he "needed to have a woman." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1501103/ | 771 S.W.2d 562 (1989)
AMERICAN PRECISION VIBRATOR CO., Appellant,
v.
NATIONAL AIR VIBRATOR CO., Appellee.
No. 01-88-00701-CV.
Court of Appeals of Texas, Houston (1st Dist.).
June 14, 1989.
Patrick F. Timmons, Jr., Houston, for appellant.
Rhett G. Campbell, Houston, for appellee.
Before DUGGAN, COHEN and MIRABAL, JJ.
DUGGAN, Justice.
We withdraw our opinion issued March 1, 1989, and order the appeal of this case stayed.
This is an appeal from a summary judgment in a garnishment action. On June 15, 1987, National Air Vibrator Co. ("NAVC") garnished American Precision Vibrator Company's ("APV") bank account in Piedmont Bank. Piedmont Bank answered by stating that it possessed $11,033.22 of APV's funds. On July 17, 1987, APV filed a voluntary petition in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. However, on August 17, 1987, NAVC filed a motion to dismiss the bankruptcy in the United States Bankruptcy Court, which motion was granted on August 27, 1987, and the bankruptcy was dismissed.
On September 10, the bankruptcy court signed another order, this time purporting to deny the motion to dismiss. This second order does not appear in the record and is only referred to in a subsequent order. On February 29, 1988, NAVC appealed the inconsistent second order to the United States District Court, which reversed the second order and ordered again that the bankruptcy be dismissed. APV appealed the United States District Court's decision to the United States Court of Appeals for the Fifth Circuit.
After the United States District Court upheld the dismissal of the bankruptcy and reversed the inconsistent second order, NAVC filed a motion for summary judgment in the garnishment action pending in the Texas district court. Summary judgment was granted, and APV appeals from that judgment.
We do not reach the merits of the appeal. On January 20, 1989, the United States Court of Appeals for the Fifth Circuit reversed the United States District Court's decision upholding the dismissal of the *563 bankruptcy. In re American Precision Vibrator Co., 863 F.2d 428 (5th Cir.1989). The Fifth Circuit expressly vacated the August 27 order dismissing the bankruptcy, and remanded the case for proceedings consistent with its opinion. Id. at 432. Thus, for purposes of this appeal, APV's bankruptcy is still pending.
Section 362(a), 11 U.S.C. (1982), provides that once a petition in bankruptcy is filed, it operates as an automatic stay against the commencement or continuation of any judicial, administrative, or other proceeding against the debtor. Any actions taken in violation of the automatic stay, including judgments or other court actions, are void. Kalb v. Feuerstein, 308 U.S. 433, 60 S. Ct. 343, 84 L. Ed. 370 (1940); Wallen v. State, 667 S.W.2d 621, 623 (Tex.App.Austin 1984, no writ).
An appeal is a continuation of judicial action, so it is automatically stayed if it is "against the debtor." 11 U.S.C. sec. 362(a). We decide this question by examining only the original posture of the case. Star-Tel, Inc. v. Nacogdoches Telecommunications, Inc., 755 S.W.2d 146, 150 (Tex.App.-Houston [1st Dist.] 1988, n.w.h.) (op. on reh'g); see Freeman v. Commissioner of Internal Revenue, 799 F.2d 1091, 1092-93 (5th Cir. 1986); Marcus, Stowell & Beye Gov't Sec., Inc. v. Jefferson Inv. Corp., 797 F.2d 227, 230 n. 4 (5th Cir.1986). If the debtor was the plaintiff in the court below, the stay does not apply; if the debtor was the defendant, any further action is stayed. Id.
Here, the action was filed by appellee for garnishment of appellant's funds to satisfy a prior judgment. The appeal is therefore considered to be "against the debtor" and is stayed. This is so even though it is the debtor who may be appealing an adverse lower court judgment. See, e.g., Commerzanstalt v. Telewide Systems, Inc., 790 F.2d 206, 207 (2d Cir.1986) (because the original suit was brought against debtor, action was stayed, and debtor was not allowed to waive the stay and appeal). The debtor or any other interested party may apply to the bankruptcy court for relief from the stay. 11 U.S.C. sec. 362(d).
Our previous opinion is withdrawn. The appeal is ordered stayed. The appellant is ordered to notify this Court when the bankruptcy stay is lifted, by termination of the bankruptcy or otherwise. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1660385/ | 644 So. 2d 357 (1994)
SOUTH CENTRAL BELL TELEPHONE COMPANY
v.
KA-JON FOOD STORES OF LOUISIANA, INC. and Broadmoor Service Center, Inc.
No. 93-CC-2926.
Supreme Court of Louisiana.
May 24, 1994.
Rehearing Granted June 24, 1994.
Emile C. Rolfs, III, William F. Ridlon, II, Baton Rouge, for applicants.
Celia R. Cangelosi, Milton O. Walsh, Murphy J. Burke, III, Baton Rouge, Michael P. Colvin, New Orleans, Catherine S. Nobile, Frank A. Fertitta, Baton Rouge, for respondent.
Ralph S. Hubbard, III, New Orleans, Thomas W. Brunner, Laura A. Foggan, Carol A. Barthel, Washington, DC, for Insurance Environmental Litigation, amicus curiae.
Maureen N. Harbourt, Esteban Herrera, Jr., Baton Rouge, for Louisiana Chemical Ass'n, amicus curiae.
Francis S. Craig, III, Baton Rouge, Eugene R. Anderson, New York City, Martha Churchill, Chicago, IL, for Mid-America Legal Fund, amicus curiae.
ORTIQUE, Justice.[1]
The resolution of this case requires the interpretation of an "absolute" pollution exclusion endorsement to a standard commercial general liability business insurance policy.
South Central Bell (Bell) filed suit against a convenience store operator and its insurer after gasoline, which accidentally leaked from the convenience store's underground storage tanks, damaged Bell's cables. Bell's suit requests tort damages for the losses it suffered, as well as injunctive relief to abate future damages from the continued presence of the gasoline in the groundwater surrounding its cables. The convenience store's insurer filed a motion for summary judgment claiming the policy at issue expressly excludes coverage for all claimed damages and requested relief based upon its pollution exclusion. The motion was denied by the trial court which determined the exclusion applies only to active polluters, and not to those who incidentally possess a pollutant which accidentally escapes. On the insurer's application for supervisory review, the appellate court granted summary judgment finding the exclusion "clearly and unambiguously" excludes coverage. We vacate the judgment.
The pollution exclusion does not preclude coverage of the damages caused to Bell's cables. However, regarding Bell's claim for injunctive relief, genuine issues of material fact remain as to whether the exclusion can be enforced due to the circumstances surrounding its issuance. Therefore, summary judgment denying insurance coverage on that claim was improperly granted by the appellate court.
I.
Pursuant to a servitude, Bell has underground telephone cables running parallel to Florida Boulevard at Cora Drive in Baton Rouge. Defendants Broadmoor Service Center, Inc., Broadmoor Village, Inc. and/or Robert L. Cangelosi (Broadmoor), own real property where those two streets intersect. Broadmoor's tenant, Ka-Jon Food Stores of Louisiana, Inc.[2] (Ka-Jon), insured under a business policy issued by State Farm Fire and Casualty Company (State Farm), operated a convenience store at that location in September, 1986. One of the items Ka-Jon sold was gasoline, which it stored in underground storage tanks. The tanks were owned by Broadmoor. Allegedly, the underground *358 tanks leaked or discharged gasoline into the groundwater surrounding Bell's cables. The presence of the gasoline weakened the cables's plastic sheathing, permitting water to penetrate the sheathing and short out the telephone lines.
Bell filed this suit against defendants seeking both property damages and injunctive/remedial relief. It desires the injunctive/remedial relief to determine the nature and extent of the underground contamination and to require clean-up measures to abate future damages. Defendants responded by filing answers and numerous cross claims and/or third-party demands.
State Farm denied liability on the principal, third-party and cross claims, asserting that the insurance policy it issued to Ka-Jon contains an exclusion of coverage for the claimed damages. It filed a motion for summary judgment urging the policy's Pollution Exclusion Endorsement entitled it to judgment on all claims as a matter of law since the policy unequivocally excludes coverage for property damage caused by gasoline leakage with the following language: "this policy does not apply ... to any ... property damage arising out of the actual, alleged or threatened discharge, dispersal, spill, release or escape of smoke, vapors, soot, fumes acids, alkalis, toxic chemicals, liquids, gases, waste materials ..., or other irritants, contaminants or pollutants ... at or from premises, owned, rented or occupied by the named insured." It argues that, "[g]asoline ... clearly fall[s] within the exclusion, if for no other reason than it actually damaged the telephone cables in question, and is thereby, de facto, `an irritant, contaminant, or pollutant.'"
Plaintiff Bell and defendant Broadmoor opposed the motion asserting that the policy's pollution exclusion is ambiguous because it fails to state whether it applies to intentional or negligent polluting, or both. They argued the exclusion does not apply "to those who only incidentally possess the pollutant in the course of their business" like Ka-Jon, but to insureds who "wantonly" or "indifferently" pollute, citing as authority the Fourth Circuit's interpretation of an absolute pollution exclusion in West v. Board of Com'rs, 591 So. 2d 1358, 1360 (La.App. 4th Cir.1991).[3] They further contended that State Farm offered no evidence to show Ka-Jon intended to pay for business insurance which omitted coverage of routine and incidental risks of its convenience store's operations.
Following a hearing, the motion for summary judgment was denied. The trial court applied West v. Board of Com'rs, supra,[4] determining the pollution exclusion applies to active polluters but not to those who incidentally possess a pollutant which accidentally escapes.
State Farm sought supervisory review and its application was granted. South Central Bell Telephone Co. v. Ka-Jon Food Stores of Louisiana, 626 So. 2d 1223 (La.App. 1st Cir. 1993). The First Circuit determined the pollution exclusion "clearly and unambiguously excludes coverage for any damages to underground telephone cables due to the leakage of gasoline from underground storage tanks leased by the named insured." 626 So.2d at 1224. In rendering its decision, it expressly declined to follow the Fourth Circuit's decision in West v. Board of Com'rs, supra.[5]Id. Therefore, it entered judgment in favor of State Farm, granting its motion for summary judgment and dismissing all claims against it.
Since the decision of the First Circuit conflicts with the Fourth Circuit's decision in *359 West v. Board of Com'rs, supra,[6] we granted Bell's application for writ of certiorari. South Central Bell Telephone Co. v. Ka-Jon Food Stores of Louisiana, 93-2926 (La. 2/4/94); 633 So. 2d 158 La.1994). See Rule X, § 1(a)(1). We permitted the filing of amicus curiae briefs by the Insurance Environmental Litigation Association[7] in support of State Farm and by the Mid-America Legal Foundation[8] on behalf of Bell.
II.
The version of the Business PolicySpecial Form 3 issued to Ka-Jon by State Farm was printed in July, 1982. It is a standard commercial general liability (CGL) policy[9] providing coverage per occurrence.[10] Its Business Liability Exclusions section contains the following pollution exclusion:
Under Coverage L, this policy does not apply:
* * * * * *
5. to bodily injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon the land, the atmosphere or any water course or body of water; but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental; ...
(bold in original; bold denotes terms defined by the policy)
Ka-Jon's April 1, 1986 renewal of the policy, insuring the period which encompassed Bell's damages claim, added a Pollution Exclusion Endorsement (printed in March, 1986). This endorsement, known as an "absolute" pollution exclusion, replaced the previously quoted pollution exclusion. It provides as follows:
POLLUTION EXCLUSION ENDORSEMENT
It is agreed that Exclusion 5. (Exclusion 6. in the BUILDER'S RISK POLICY) under Section IIBUSINESS LIABILITY EXCLUSIONS is deleted and replaced with the following:
*360 Under Coverage L, this policy does not apply:
5. to any:
a. bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, spill, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials (including those to be recycled, reconditioned or reclaimed), or other irritants, contaminants or pollutants:
(1) at or from the premises owned, rented or occupied by the named insured;
(2) at or from any site or location used by or for the named insured or others for the handling, storage, disposal, processing or treatment of waste;
(3) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for the named insured or any person or organization for whom the named insured may legally be responsible; or
(4) at or from any site or location on which the named insured, employee or any contractor or subcontractor working directly or indirectly on behalf of the named insured is performing operations:
(a) if the pollutants are brought on or to the site or location in connection with such operations; or
(b) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants;
b. loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.
All other provisions of this policy apply. (bold in the original; bold denotes terms defined by the policy)
III.
An insurance policy is a contract and, as with all other contracts, it constitutes the law between the parties. Pareti v. Sentry Indem. Co., 536 So. 2d 417 (La.1988); Carney v. American Fire & Indem. Co., 371 So. 2d 815 (La.1979). As a contract, the insurance policy is construed by using the general rules of interpretation of contracts as set forth in Civil Code articles 2045 through 2057. Crabtree v. State Farm Ins. Co., 93-0509 (La. 2/28/94); 632 So. 2d 736 (La.1994); Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., 630 So. 2d 759 (La.1994); Smith v. Matthews, 611 So. 2d 1377 (La.1993). Interpretation of a contract is the determination of the common intent of the parties. LSA-C.C. art. 2045. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. LSA-C.C. art. 2046. The determination of whether a contract is clear or ambiguous, however, remains a question of law.
The parties' common intent is determined in accordance with the general, ordinary, plain and popular meaning of the words used in the policy, unless the words are words of art or have acquired a technical meaning. LSA-C.C. art. 2047; Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra; Breland v. Schilling, 550 So. 2d 609 (La.1989). Words susceptible of different meanings must be interpreted as having the meaning which best conforms to the object of the contract. LSA-C.C. art. 2048. Although worded in general terms, the contract must be interpreted to cover only those things it appears the parties intended to include. LSA-C.C. art. 2051.
Each provision in an insurance policy must be interpreted in light of the other provisions so that each is given the meaning suggested by the policy as a whole. See LSA-C.C. art. 2050. Provisions susceptible of different meanings must be interpreted with a meaning that renders it effective and not with a meaning that renders it ineffective. LSA-C.C. art. 2049. Doubtful provisions must be interpreted in light of the nature of the contract, equity,[11] usage, the conduct of the parties before and after the formation of the contract, and of other insurance contracts between the parties. See LSA-C.C. art. *361 2053. Further, insurance policies should not be interpreted in an unreasonable or strained manner so as to enlarge or restrict provisions beyond what was reasonably contemplated by the policy's terms, or so as to achieve an absurd conclusion. Crabtree v. State Farm Ins. Co., supra; Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra; see LSA-C.C. art. 2053, Revision Comment (a). Thus, ambiguity in an insurance policy must be resolved by construing the document as a whole. One provision cannot be construed separately at the expense of disregarding other policy provisions. Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra; Pareti v. Sentry Indemnity Co., supra; Benton Casing Service, Inc. v. Avemco Ins. Co., 379 So. 2d 225 (La.1979), on reh'g; Benton v. Long Mfg. N.C., Inc., 550 So. 2d 859, 860 (La.App. 2d Cir.1989) ["The prime consideration in interpreting a provision of an insurance policy is to ascertain the true intentions of the parties from the language of the policy as a whole."].
If, after applying these general rules of contract interpretation, an ambiguity remains in the policy of insurance, the ambiguous provision is to be construed against the insurer as it is the party which furnished its text. LSA-C.C. art. 2056; Crabtree v. State Farm Ins. Co., supra; Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra; Smith v. Matthews, supra; Borden, Inc. v. Howard Trucking Co., Inc., 454 So. 2d 1081 (La.1983); Pareti v. Sentry Indemnity Co., supra; Rodriguez v. Northwestern Nat. Ins. Co., 358 So. 2d 1237 (La.1978); see also 15 La. Civil Law Treatise (M & J) § 4 (2d reprint, 1986). The ambiguity is also to be resolved by ascertaining how a reasonable insurance policy purchaser would have construed the clause at the time the insurance contract was entered. Breland v. Schilling, supra; Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra [recognized the "reasonable expectations doctrine," citing 2 Richards on the Law of Insurance § 11.2[g] (6th Ed.1990)].
Absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability and/or to impose and enforce reasonable conditions upon the policy obligations they contractually assume. Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Co., supra; Oceanonics, Inc. v. Petroleum Distributing Co., 292 So. 2d 190 (La.1974); Benton Casing Service, Inc. v. Avemco Ins. Co., on orig h'rg, supra; Benton v. Long Mfg. N.C., Inc., supra. However, when the preceding general rules of contract interpretation are applied to an exclusion, the result is the exclusionary clause is interpreted liberally in the insured's favor, in favor of coverage. Borden, Inc. v. Howard Trucking Co., Inc., supra; Breland v. Schilling, supra; Sanders v. Home Indem. Ins. Co., 594 So. 2d 1345, 1352-1353 (La.App. 3d Cir.1992), on reh'g, writ den., 598 So. 2d 377 (La.1992). Any exclusion from coverage in an insurance policy must be clear and unmistakable. Roger v. Estate of Moulton, 513 So. 2d 1126, 1130 (La.1987). Implication will not suffice. Borden, Inc. v. Howard Trucking Co., Inc., supra.
The test for determining the intentions of the parties is governed, not by what the insurer intended the words to mean, but by what a reasonable person in the position of the insured would have understood them to mean. See Anderson v. Indiana Lumbermen Mutual Ins. Co., 127 So. 2d 304, 308 (La.1961). Since the primary object of all insurance policies is to insure, exclusionary clauses are strictly construed against the insurer. Borden, Inc. v. Howard Trucking Co., Inc., supra; Breland v. Schilling, supra [policies of insurance should be construed to give effect, not deny coverage]. The insurer is required to clearly express exclusions to its insuring obligations. Any doubt or ambiguity is to be resolved against the insurer, against forfeiture, and in favor of what reason and probability dictate was intended by the parties with respect to coverage. Benton Casing Service Inc. v. Avemco Ins. Co., on reh'g, supra; Breland v. Schilling, supra. Hence, the court has long-adhered to principle that,
"The exclusion clause must necessarily be examined and interpreted in the light of its own design and intent, as well as in view of the objects and purpose of the policy. Once coverage has been extended, *362 as it is quite clearly the purpose of the policy to do and has been done here, it should be withdrawn only when the exclusion is established with certainty. And because comprehensive exclusion is violative of the purpose and intent of policy coverage, exclusions must necessarily be specific and not general ..." Anderson v. Indiana Lumbermens Mutual Ins. Co., 127 So.2d at 306, quoting Pullen v. Employers' Liability Assur. Corp., 230 La. 867, 89 So. 2d 373 (1956).
IV.
The history of the "absolute" pollution exclusion contributes insight as to its purpose, design and/or intent, as well as to the equities involved in its confection. It reveals that insureds have exploited insurance coverage and insurers have abused pollution exclusions: at one end of the spectrum are the intentional industrial polluters of hazardous waste who compel insurers to bear their environmental cleanup costs, while at the other end are the insurers who deny coverage of nonenvironmental accidents even though the accidents have no greater connexity to the pollution exclusion than does a morning drive to work. An overview of the exclusion's evolution, therefore, supplements the determination of what reason and probability dictate the parties intended with respect to policy coverage.
Since the mid 1960's standard CGL policies have provided coverage per "occurrence," i.e., coverage for fortuitous losses or damages not expected or intended by the insured, which result during the policy period. See La. Environmental Handbook, §§ 23:5, 23:6 (6/92). In the early 1970's, insurers began including in CGL policies pollution exclusion clauses. La. Environmental Handbook, § 23:9. Their justification for inclusion of the exclusionary clauses was their need to clarify the insurance industry's intent not to cover intended or expected discharges of pollutants or contaminants, including long-term discharges, discharges which are a regular or continuous part of the insured's business, and intentional discharges which cause unexpected and unintended damages. See La. Environmental Handbook, § 23:9; see also Morton International Inc. v. General Accident Ins. Co. of America, 134 N.J. 1, 629 A.2d 831 (N.J.1993) [describes the regulatory history of 1970's pollution exclusion and the misleading representations the insurance industry made to the regulators of numerous states regarding the limited scope of the prospective exclusionary clause, that it only clarified the meaning of "occurrence;" subsequently, the insurers interpreted the exclusion with far broader ramifications].
An example of the 1970's type exclusion is Ka-Jon's original exclusion, which excluded from coverage damages "arising out of the discharge, dispersal, release or escape of pollution "into or upon the land, the atmosphere or any water course or body of water" if the discharge, dispersal, release or escape was not "sudden and accidental." See p. 358, supra. This type of exclusion, however, was construed by many courts as applying only to "active polluters,"[12] as being ambiguous,[13] or as being only a restatement of "occurrence" with no temporal qualities[14] attaching to the phrase "sudden and accidental." La. Environmental Handbook, § 23:9.
In the early 1980's, the federal government and the states enacted legislation which subjected both individuals and corporate entities to significant liability for their pollution causing activities and waste disposal practices. See La. Environmental Handbook, § 23:1 (6/92). For example, see the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C.S. *363 §§ 9601 et seq.; the Louisiana Liability for Hazardous Substance Remedial Action Law (Mini-Superfund), LSA-R.S. 30:2271 et seq; and the Louisiana Environmental Quality Act (LEQA), LSA-R.S. 30:2001 et seq. The legislation contains mechanisms to ensure cleanup costs, to correct environmentally harmful conditions caused by pollution activities, are borne by those who caused the pollution. See LSA-R.S. 30:2271(B); La. Environmental Handbook, § 2:5. However, many of those held liable for environmental pollution damages passed or attempted to pass on their liabilities to their CGL policy insurers. See La. Environmental Handbook, § 23:1; Morton International Inc. v. General Accident Ins. Co. of America, supra [insured sought to compel insurer to bear the remediation costs of its (predecessor's) prolonged discharge of mercury and other pollutants into an estuary of a river]; Buckeye Union Ins. Co. v. Liberty Solvents & Chem. Co. Inc., 17 Ohio App. 3d 127, 477 N.E.2d 1227 (1984) [insurer's duty to defend encompassed property damage from a continuing course of irresponsible waste disposal practices by operator of hazardous-waste facility hired by insured to dispose of hazardous waste].
The insurance industry responded to the extensive liability coverage litigation over the interpretation of the 1970's type exclusion, to the courts' diverse interpretations of the exclusion, and to the environmental cleanup damages it was found to insure, by shifting in 1985 to the "absolute" pollution exclusions. See La. Environmental Handbook, § 23:9. The "absolute" exclusions eliminated the "sudden and accidental" exception to exclusion, and clearly stated that environmental cleanup expenses were not covered damages. See Id.; The Fire Casualty & Surety (FC & S) Bulletin, Aa-9 (Sept. 1993, 4th printing). Ka-Jon's 1986 policy renewal contained this type of "absolute" pollution exclusion.[15]
Because of the breadth of the "absolute" pollution exclusion, the insurance industry admits that it is advisable, even for insureds whose chances of becoming liable for a "pollution" incident are remote, to procure pollution protection by endorsements. FC & S Bulletin, supra at Aa-9. Indeed, the insurance industry has given a seemingly boundless interpretation to the "absolute" pollution exclusion. Jurisprudence evinces insurers construe the exclusion to encompass and, therefore, have attempted to exclude insurance coverage of incidents, where sparks from burning trash ignite a brush fire which creates a black cloud of smoke over a roadway thereby causing a traffic accident; where renters of a home are overcome by carbon monoxide fumes leaking from a gas heater located in the bathroom; and where chicken stored in a freezer at a chicken processing facility becomes contaminated from vapors released when a nearby room was resurfaced. Avery v. Commercial Union Ins. Co., supra [brush fire]; Thompson v. Temple, 580 So. 2d 1133 (La.App. 4th Cir. 1991) [homeowner's policy; bathroom heater]; West American Ins. Co. v. Tufco Flooring East, Inc., 104 N.C.App. 312, 409 S.E.2d 692 (1991), writ den., 332 N.C. 479, 420 S.E.2d 826 (1992) [floor resurfacing]. See also Molton, Allen, Williams, Inc. v. St. Paul Fire & Marine Ins. Co., 347 So. 2d 95 (Ala. 1977) [insurer claimed 1970's style exclusion precluded coverage where, after a rainstorm, earth materials/dirt washed from a construction site into a lake and neighboring property]; A-1 Sandblasting and Steamcleaning Co., Inc. v. Baiden, 293 Or. 17, 643 P.2d 1260 (1982) [insurer claimed 1970's style exclusion precluded coverage where, despite precautions taken, paint got on automobiles in the course of spray painting a bridge]; Grinnell Mut. Reinsurance Co. v. Wasmuth, 432 N.W.2d 495 (Minn.App.1989), writ den. (1989) [insurer claimed 1970's style exclusion precluded coverage where formaldehyde fumes from improperly installed residential insulation caused bodily injury to residents].
V.
Turning to the exclusion at issue, a determination of Ka-Jon and State Farm's common *364 intent requires an analysis of the words contained in the pollution exclusion endorsement.[16] They are clear and explicit. Nonetheless, a literal application of certain portions of the exclusion, the method advanced by State Farm, precludes coverage of many routine business accidents.[17] The all inclusiveness of the words used in the exclusion are adverse to both the policy's nature and its primary purpose which is to insure Ka-Jon against fortuitous accidents and incidental business risks of running its convenience store. The literal application of the exclusion's words leads to absurd consequences is at odds with the policy's nature. CGL policies protect against the premises, operations, products, completed operations and independent contractor hazards of the insured. No reasonable insured would intend for a pollution exclusion to basically eviscerate this coverage. Since the language of the exclusion fails to clearly express the common intent of the parties, it is ambiguous as a matter of law. LSA-C.C. art. 2045. As a consequence, the exclusion must be interpreted in the manner in which a reasonable insurance purchaser would have construed it at the time of the policy's renewal and it must be interpreted liberally, in favor of coverage.
Labels and headings given to the sections of an insurance policy are pertinent to the inquiry of coverage. Benton Casing Service, Inc. v. Avemco Ins. Co., on reh'g, supra. The heading of the exclusion, Pollution Exclusion Endorsement, signifies its nature and purpose.[18]Webster's New Collegiate Dictionary (1981), defines "pollution" as "the action of polluting: the condition of being polluted." In turn, it defines "pollute" as: "to make physically impure or unclean: BEFOUL, DIRTY, esp: to contaminate (an environment esp. with man-made waste syn see contaminate."[19] The exclusion's heading, indicates it pertains to environmental pollution. In the context of the policy's purpose, the exclusion's heading and all of its provisions (instead of excerpted portions of it), the exclusion signifies an intent to exclude coverage of 1) all damages or losses resulting from intentional acts of pollution or pollution causing activities,[20] including remedial damages for environmental cleanup operations, and 2) environmental damages resulting from fortuitous pollution occurrences, including remedial damages for environmental cleanup operations.
The "absolute" pollution exclusion in Ka-Jon's policy is not triggered by nonenvironmental, *365 routine accidents merely because they involve spills, leaks, discharges (etc.) of items that can be considered contaminants or pollutants. The exclusion is not applicable to fortuitous occurrences which involve only incidental pollution, i.e., accidents where pollution is inconsequential to the damages sustained. Consequently, where carbon monoxide gas leaks from a heater causing bodily injuries, or where bridge painting activities result in paint getting on passing automobiles, the nonenvironmental pollution incidents should not be classified by the insurer as pollution events encompassed by the exclusion, but merely as routine accidents with covered loss damages.
In contrast, the pollution exclusion is applicable to all damages resulting from intentional pollution or environmentally hostile conduct. The pollution exclusion precludes coverage of all types of damages resulting from deliberate, knowing and intentional acts of pollution, even where the damages or pollution damages are unexpected or unintended. This absolute exclusion of coverage is consistent with public policy which condemns intentional pollution and proscribes insuring intentionally wrongful conduct.
In the middle of these two extremes are the fortuitous events or occurrences (not involving prohibited pollution causing activities like those listed in the exclusion, § 5(a)(2)-(4)), which result in partial to comprehensive environmental damage. In such instances, a reasonable interpretation of the terms of the policy and exclusion, which mindfully favors coverage, indicates the pollution exclusion is intended to only exclude from coverage environmental pollution damages.
Consequently, when an occurrence arises which involves the "actual, alleged or threatened discharge, dispersal, spill, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials (including those to be recycled, reconditioned or reclaimed), or other irritants, contaminants or pollutants," a fact-sensitive analysis of the cause of the occurrence and the nature of damages sustained must be undertaken to determine whether the pollution exclusion is triggered and, if so, whether any or all of the damages are excluded from coverage by the "absolute" pollution exclusion endorsement.
Thus, the overly broad and abstract construction of the exclusion promoted by State Farm is rejected. This narrower construction furnishes a reasonable view of the exclusion in light of the insured's understanding of the exclusion, and of the design and intent of the insurance policy as a whole.
VI.
The motion for summary judgment, together with any pleadings, affidavits and exhibits, must now be examined to ascertain whether the appellate court erred in determining no genuine issues of material fact exist, the endorsement excludes all liability coverage for the claimed damages and requested remedial relief, and State Farm is entitled to judgment as a matter of law.
Appellate courts review summary judgments de novo, under the same criteria which govern the district court's consideration of the appropriateness of summary judgment. Potter v. First Federal Savings and Loan Assoc. of Scotlandville, 615 So. 2d 318 (La. 1993); Schroeder v. Board of Sup'r of Louisiana State University, 591 So. 2d 342 (La. 1991). Code of Civil Procedure art. 966(A) directs that plaintiff or a defendant in the principal or any incidental action, with or without supporting affidavits, may move for summary judgment in his favor for all or part of the relief for which he has prayed. Judgment on the motion is properly granted only if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show there is no genuine issue of material fact and the mover is entitled to summary judgment as a matter of law. LSA-C.C.P. art. 966(B); Potter v. First Federal Savings and Loan Assoc. of Scotlandville, supra; Penalber v. Blount, 550 So. 2d 577 (La.1989). The mover has the burden of establishing that no material fact exists. Potter v. First Federal Savings and Loan Assoc. of Scotlandville, supra.
When the pollution exclusion, as interpreted, is applied to Bell's damages claim, it is evident that policy coverage is not precluded. The gas leak from Ka-Jon's underground *366 storage tanks constituted an environmental pollution accident. However, the damages were not caused by intentional pollution. Ka-Jon did not intend to pollute. Moreover, it had no reason to believe that one of its underground tanks leaked. Its interrogatory answers reveal its daily testing of the tanks showed no evidence of a leak. Under the terms of the exclusion, when a fortuitous pollution event or occurrence happens causing environmental damage, only the environmental pollution damages are excluded from coverage. Consequently, the damage sustained to Bell's underground cables, since it is nonenvironmental, is not an excluded loss under the pollution exclusion. See notes 10-11. Therefore, as State Farm is not entitled to deny coverage of Bell's damages claim, the summary judgment relative to that claim was improperly granted as a matter of law.
Review of the propriety of granting summary judgment as to Bell's claim for cleanup measures to remove the gasoline contamination from the soil and groundwater, involves application of the principles of equity in addition to the terms of the pollution exclusion. When the pollution exclusion, as interpreted, is applied to Bell's remediation damages claim, it is evident that the exclusion precludes coverage of those damages. The exclusion expressly precludes coverage of cleanup costs; it also excludes the environmental pollution damages from coverage. However, when the previously stated criteria for reviewing the appropriateness of a summary judgment are applied, genuine issues of material fact are found to exist which make the judgment improper. Public policy and equitable considerations exist which require resolution before the endorsement can be enforced. See generally, 15 La. Civil Law Treatise § 3. They are of a sufficient magnitude to preclude judicial enforcement of the pollution exclusion against Bell's claim for injunctive/remedial relief.
The evidence on record shows Ka-Jon's annual renewal, together with the pollution exclusion endorsement, became effective on April 1, 1986. Ka-Jon's previous policy contained the 1970's style pollution exclusion which excepted "sudden and accidental" pollution incidents from preclusion and covered remediation costs. The shift from State Farm's use of the 1970's style pollution exclusion to the "absolute" pollution exclusion constituted a distinct decrease in insurance coverage. Nonetheless, State Farm's motion and supporting evidence fails to show what reduction in premium Ka-Jon received in exchange for its reduced insurance protection. Nor does it show Ka-Jon was advised in advance of April 1, 1986 that its renewal would contain the pollution exclusion endorsement and/or the extent of the exclusion's impact on the renewal's insurance coverage. Finally, State Farm did not show Ka-Jon was informed of the availability of pollution coverage endorsements or the advisability of obtaining such endorsements in light of the nature of its business operations and its reduced insurance coverage from the pollution exclusion endorsement.
An unchanged premium is consistent with unchanged coverage. If Ka-Jon received no reduction in its premium, Ka-Jon could reasonably have relied that it was receiving substantially the same protection against fortuitous damages, losses and risks which it had received under its previous business insurance policy. Conversely, if State Farm had reduced Ka-Jon's premium, and the reduction was not attributable to causes other than exclusion, then the implication is that Ka-Jon received a lowered premium in return for its decreased coverage. Public policy and equity demands that when State Farm significantly decreased Ka-Jon's insurance coverage, it had an obligation to give it a comparable premium reduction. See, 15 La. Civil Law Treatise § 3. As the record is void of evidence establishing State Farm comparably reduced Ka-Jon's premium in exchange for reducing its coverage, genuine issues of material fact exist as to whether State Farm was unjustly enriched so as to estop its enforcement of the endorsement. Therefore, a summary judgment enforcing the endorsement was improperly granted.
Further, genuine issues of material fact exist, sufficient to preclude summary judgment, as to whether State Farm breached its obligation to inform Ka-Jon of the availability and advisability of obtaining pollution coverage endorsements. State Farm's arguments *367 to this court indicate it subjectively intended the "absolute" pollution exclusion to eliminate coverage of all pollution related damages. As Ka-Jon's insurer, it was aware that Ka-Jon sold gasoline and that the gasoline was stored in underground storage tanks. Thus, in light of this intent to exclude all pollution related damages from policy coverage, and its intent to have pollution damages like those caused by leaking underground storage tanks to be borne solely by those whose businesses involve such pollution risks through coverage endorsements, State Farm had an obligation to forewarn Ka-Jon about the availability of pollution coverage endorsements and the advisability of it obtaining such coverage for when the pollution exclusion endorsement took effect. This obligation arose from the realities of the parties' relationship which involves no open-term bargaining of comparably informed equals, but "adhesion contract" qualities and a significant disparity in insurance expertise. See, 15 La. Civil Law Treatise § 3. If the availability of and need for the pollution coverage endorsements were kept an industry secret, then State Farm unconscionably breached its duty to inform and affronted the demands of equity by exposing its insured to liability for perils it believed were covered.[21] Consequently, as the record is void of evidence showing that State Farm complied with this obligation to inform, genuine issues of material fact exist as to State Farm's right to enforce any part of the pollution exclusion endorsement. Therefore, a summary judgment granting its enforcement was improperly granted.
DECREE
For the reasons assigned, the summary judgment rendered in favor of State Farm is vacated and the case is remanded to the trial court for further proceedings. Costs are assessed against defendant/respondent State Farm.
VACATED AND REMANDED.
WATSON, J., concurs in the result.
HALL, J., dissents and assigns reasons.
LEMMON, J., dissents for the reasons assigned by HALL, J.
HALL, Justice, dissenting.
I agree with much of the majority opinion analysis, but disagree with the application of that analysis to the facts of this case. I would conclude that the pollution exclusion endorsement excludes coverage of the environmental pollution damages occasioned in this case.
The majority starts its analysis by finding that a literal application of the exclusion would lead to absurd consequences by virtually eviscerating coverage under the liability policy. Therefore, the exclusion must be interpreted in a reasonable manner, and liberally in favor of coverage. I agree to this point.
The majority opinion then reasons that the exclusion pertains to environmental pollution and does not apply to nonenvironmental, routine accidents merely because they involve spills, leaks, discharges, or the like. I agree completely.
Then the majority opinion interprets the policy to exclude coverage for all losses resulting from intentional acts of pollution but only environmental damage from fortuitous pollution occurrences. Applying the exclusion to plaintiff's claim for damage to its cables, the opinion notes that the gasoline leakage was an environmental pollution accident and the damage was not caused by intentional pollution. Since the damage was caused by a fortuitous event, only environmental damage is excluded and damage to cables being nonenvironmental, is not excluded from coverage.
It is only in this final stage of the analysis that I part company with the majority opinion. The exclusion makes no distinction between *368 intentional and fortuitous pollution. The damage to Bell's cables clearly resulted from environmental pollution. Gasoline leaked from the underground storage tanks, polluted and contaminated the ground, and the contamination eventually caused the damage to the cables.
I would hold that the property damage caused by environmental pollution is excluded from coverage under the pollution exclusion endorsement of the policy, and affirm the judgment of the court of appeal. Accordingly, I respectfully dissent.
NOTES
[1] Judge Charles A. Marvin, Court of Appeal, Second Circuit, sitting in place of Justice James L. Dennis. Pursuant to Rule IV, Part 2§ 3, Kimball, J. is not on the panel which heard and decided this case.
[2] After this suit was filed, Ka-Jon sought protection under Chapter 7 of the bankruptcy code in In Re: Ka-Jon Food Stores of Louisiana, Inc. d/b/a Ka-Jon Food Stores, No. 90-00818, United States Bankruptcy Court, Middle District of Louisiana.
[3] In West, plaintiff fireman filed suit for the lung injuries he sustained while investigating a report on a toxic incident, against the defendant warehouse services company which was storing drums containing azinphosmenthyl. The warehouse's insurer filed a motion for summary judgment claiming it had no duty to defend based upon the terms of its "absolute" pollution exclusion. The trial court granted the motion but the appellate court vacated the judgment finding genuine issues of material fact existed as to whether the warehouse was an "active polluter," i.e., one who indifferently pollutes the environment and not one who incidently possesses a pollutant in the course of business which escapes. 591 So.2d at 1360. The appellate court concluded the "absolute" pollution exclusion applies only to active polluters.
[4] See note 3, supra.
[5] See note 3, supra.
[6] See note 3, supra.
[7] The Insurance Environmental Litigation Association is a trade association of major property and casualty insurers including, Aetna Casualty & Surety Company, Allstate Insurance Company, American International Group, Chubb Group of Insurance Companies, CIGNA Property and Casualty Companies, Continental Insurance Company, Crum & Forster Corporation, Fireman's Fund Insurance Companies, Hanover Insurance Company, Hartford Insurance Group, Home Insurance Company, Liberty Mutual Insurance Company, Maryland Insurance Company, Zurich-American Insurance Group, Prudential Reinsurance Company, Royal Indemnity Company, St. Paul Companies, Selective Insurance Group of America, The Travelers Insurance Company and Unites States Fidelity & Guaranty Company.
[8] Mid-America Legal Foundation is a non-profit corporation organized in 1975 which engages in non-partisan legal research, study and analysis for the general public, with a special interest in the Midwest region of the country. It maintains that it endeavors to impact on evolving concepts of law which affect free enterprise and democracy.
[9] Under the standard policy form, the CGL policy protects against the premises, operations, products, completed operations and independent contractor hazards. By endorsements, the policy may also exclude specific hazards or provide additional coverage. 15 La. Civil Law Treatise (M & J) § 181 (2d reprint, 1986).
[10] The policy's Coverage LBusiness Liability section provides in pertinent part as follows:
The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage or personal injury caused by an occurrence to which this insurance applies. The total liability of the Company for all damages, included completed operations hazard, product hazard, and damages for care and loss of services, as a result of any one occurrence shall not exceed the limit of liability stated in the Declarations as applicable to each occurrence.
(bold in original; bold denotes terms defined by the policy)
The policy defines "occurrence" as:
11. occurrence means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured and with respect to personal injury, ...
(bold in the original; bold denotes terms defined by the policy)
[11] "Equity," as intended herein, is "based on the principles that no one is allowed to take unfair advantage of another and that no one is allowed to enrich himself unjustly at the expense of another." LSA-C.C. art. 2055.
[12] For example, United Pacific Ins. Co. v. Van's Westlake Union, Inc., 34 Wash.App. 708, 664 P.2d 1262 (1983), writ den., 100 Wash.2d 1018 (1983).
[13] For example, Sellers v. Seligman, 463 So. 2d 697 (La.App. 4th Cir. 1985), writ den., 464 So. 2d 1379 (La.1985); Helca Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Col.1991); Farm Family Mut. Ins. Co. v. Bagley, 64 A.D.2d 1014, 409 N.Y.S.2d 294 (1978); Kipin Industries, Inc. v. American Universal Ins. Co., 41 Ohio App. 3d 228, 535 N.E.2d 334 (1987).
[14] For example, Helca Mining Co. v. New Hampshire Ins. Co., supra; Allstate Ins. Co. v. Klock Oil Co., 73 A.D.2d 486, 426 N.Y.S.2d 603 (1980); Buckeye Union Ins. Co. v. Liberty Solvents & Chem. Co., Inc., 17 Ohio App. 3d 127, 477 N.E.2d 1227 (1984).
[15] For other business policy examples see, West v. Board of Com'rs, supra; Avery v. Commercial Union Ins. Co., 621 So. 2d 184 (La.App. 3d Cir. 1993); Crabtree v. Hayes-Dockside, Inc., 612 So. 2d 249 (La.App. 4th Cir. 1992), writ den., 614 So. 2d 1257 (La.1993). "Absolute" pollution exclusions are also found in many other types of insurance policies, including builder's policies, farmer's policies, homeowner's policies and automobile policies. For example Thompson v. Temple, 580 So. 2d 1133 (La.App. 4th Cir.1991) [homeowner's policy].
[16] There is no evidence on record establishing that Ka-Jon was apprised by State Farm prior to the renewal of its insurance policy that the renewal would contain a pollution exclusion endorsement, informed it of the context/language of the endorsement, or informed it of the availability of pollution coverage endorsements.
[17] The literal application of § 5(a)(1) of the pollution exclusion indicates that, if one of Ka-Jon's customers slips on oil leaking from a quart-sized container, their ensuing claim for bodily injury would be excluded from coverage. Likewise, if a container of Drano fell from one of the convenience store's shelves onto a customer, the personal injuries resulting from the toxic chemical spill would be excluded from insurance coverage. Similarly, if, in an attempt to eradicate insect infestation, the convenience store accidentally sprayed both the insects and its customers with insecticide, or if any of the convenience store's natural gas appliances leaked gas and caused bodily injury, the "actual ... discharge, dispersal, spill, release or escape of ... fumes, acids, alkalis, toxic chemicals, ... or gases, ... or other irritants, contaminants or pollutants: (1) at or from the premises owned, rented or occupied by the named insured" would preclude insurance coverage of the incidents.
[18] The result of this opinion would be the same even if the exclusion had a heading which did not contain the word "pollution." The history of the exclusion emphatically demarks it as a pollution exclusion.
[19] Similarly, Black's Law Dictionary (5th Ed. 1983), which does not define "pollution," defines "pollute" as: "To corrupt or defile. The contamination of soil, air and water by noxious substances or noises." See also Mississippi River Interstate Pollution Phase-Out Compact, LSA-R.S. 30:2091 et seq (defines "pollution" as "man-made alteration of water ..."); Louisiana Environmental Quality, LSA-R.S. 30:2003 et seq (defines "pollution source" and "pollutant"); Oil Spill Prevention and Response Act, LSA-R.S. 30:2451 et seq (defines "pollution" as "the presence of harmful quantities of oil in waters of the state or in or on adjacent shorelines, estuaries, tidal flats, beaches or marshes"); Liability for Hazardous Substance Remedial Action, LSA-R.S. 30:2271 et seq (defines "pollution source").
[20] Like those described in §§ 5(a)(2)-(4).
[21] Cf. Rodriguez v. Northwestern Nat. Ins. Co., 358 So.2d at 1237 ["Due to the increasing complexity of insurance policies and to the greater danger of overreaching by insurers'their gaining an unconscionable advantage by the use of complex policy provisions concerning facts that the untutored purchaser would be surprised to find relevant to his insurance coverage'many states, including Louisiana, enacted `anti-technical' statutes designed to preclude denial of coverage through the assertion of defenses not materially significant to the risk."] | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1095268/ | 741 So.2d 96 (1999)
Dessire CRAWFORD, Plaintiff-appellee,
v.
RYAN'S FAMILY STEAK HOUSES, INC., Defendant-appellant.
No. 31,911-CA.
Court of Appeal of Louisiana, Second Circuit.
May 5, 1999.
*97 McGlinchey Stafford Lang by Elizabeth Palermo Blitch, New Orleans, Counsel for Appellant.
Mills, Timmons & Flowers by David C. Turansky, Shreveport, Counsel for Appellee.
Before NORRIS, CARAWAY and KOSTELKA, JJ.
CARAWAY, J.
In this slip and fall case, the defendant/restaurant contends that the trial court's ruling for the plaintiff misapplied La. R.S. 9:2800.6 as interpreted by the recent decisions of our supreme court. Defendant also contends that the trial court's award of damages was excessive while the plaintiff asserts by her answer to the appeal that the compensation was inadequate. Finding that the trial court could properly credit the circumstantial evidence of defendant's constructive knowledge of the spill, we affirm the trial court's judgment and the award of damages.
Facts
On Sunday, March 24, 1996, Dessire Crawford ("Crawford") went to lunch with *98 some of her family and friends at Ryan's Family Steak Houses, Inc. ("Ryan's"). The restaurant was crowded and after paying for their meals, the party waited for a table to become available. Crawford and four members of her party testified that a manager began escorting them to a table guiding them through a narrow passageway beside one of the food bars known at Ryan's as "mega bars."
While walking to a table, Crawford slipped and fell on a substance identified by Daryl Trammell ("Trammel"), a floor manager at Ryan's, as taco beef. Trammell testified that the taco meat on the mega bars was located away from where Crawford fell. Trammell called for an ambulance and Crawford was transported to Willis-Knighton North.
At trial, Trammell testified about the safety procedures practiced at Ryan's. These include that anytime there is a spill in the restaurant, one employee stays at the spot while another employee retrieves and places a wet floor sign over the spill to notify customers of a hazardous area. One of the employees then gets a mop or a broom to clean up the floor. The yellow wet floor sign is conical in shape and is approximately four feet high with a one foot wide base. The wet floor sign is left in the area until the surface has completely dried. Although no one in Crawford's party testified to seeing a wet floor sign, Trammell said that there was a sign in the area near the taco meat. Keith Woods ("Woods"), Ryan's store manager, also said, and the Ryan's liability report indicated, that Crawford slipped on taco meat and fell on a wet floor sign.
Trammell testified that Ryan's employees were constantly moving around the restaurant showing customers to tables and replenishing items on the mega bars. At trial, Trammell stated that it was not one particular person's duty to check the floor but that it was the responsibility of every employee and manager to monitor the floor and make sure it was clean and safe.
Crawford's fall occurred at 1:40 p.m. which is considered a peak time at Ryan's. Woods stated that the Bossier Ryan's where this accident occurred can seat 530 people and is one of the bigger Ryan's restaurants. Sunday is the busiest day of the week at Ryan's and approximately seventy percent of the customers choose the mega bar as their meal.
Dr. M. Ragan Green, Jr., an orthopaedic surgeon who had previously treated Crawford, stated that Crawford saw him on April 2, 1996 and he diagnosed a contusion of the right hip, strain of the muscle in the buttocks area, contusion of the right elbow and sprain of the wrist knob. Although Crawford had a degenerative arthritic condition in her hips prior to her fall at Ryan's, Dr. Green was unable to render an opinion as to whether the accident made the degenerative changes more severe.
Dr. Green placed Crawford on anti-inflammatories and, on April 17, 1996, Dr. Green wrote a prescription for Crawford to attend physical therapy three times a week for lumbar and hip pain. Crawford attended physical therapy for approximately one month for injuries she sustained in the accident. She stated that she discontinued physical therapy at that time because her insurance benefits had run out and she was not improving.
On June 24, 1996, Crawford visited Eric Berg, D.C., a chiropractor, complaining of low back, hip and neck pain. Crawford did not return to Dr. Berg's office until October 8, 1996 when she again gave a history of hip and lumbar pain resulting from the slip and fall at Ryan's. Crawford continued a regular treatment program at Dr. Berg's clinic until March 12, 1997. Crawford testified that she discontinued the chiropractic treatments because her condition had not significantly improved.
Crawford saw Dr. Harold R. Bicknell, an orthopaedic surgeon, in July and August of 1997 reporting pain in her right wrist and hands, low back, hip areas and shoulder. X-rays of the pelvis and hips *99 revealed marked degenerative joint disease in both hips. Dr. Bicknell stated that although he believed Crawford's degenerative joint disease preceded her fall at Ryan's in March 1996, a trauma could cause some aggravation of the chronic condition but in his opinion, the aggravation would probably only last three to six months.
Following the presentation of the evidence, the trial court rendered judgment in favor of Crawford finding Ryan's to be one hundred percent liable for her damages and awarded Crawford damages in the amount of $20,909.25 representing $5,909.25 in special damages and $15,000.00 in general damages.
Discussion
In a brief opinion, the trial court said, "What distinguishes this situation from other slip and fall cases is the fact that the manager led the plaintiff into harm's way. By attempting to perform his job courteously and efficiently, he inadvertently led these folks through a constricted area where the greasy beef was awaiting Ms. Crawford." In explaining Ryan's procedures for seating patrons, Trammell and Woods both stated that a Ryan's employee generally led customers to their tables. This was particularly true on Sundays, Ryan's busiest day of the week when one employee would keep patrons in a waiting area while another employee scouted out an available seating area. The customers were then escorted to their tables. Crawford and each member of her party testified that after a few minutes' wait, a Ryan's employee began leading them toward a table walking through a narrow passageway beside the food bar. Thus, despite some contradictory evidence,[1] the evidence tended to show and the trial court so found that the employee walked slightly ahead of the party past the spot where Crawford fell.
A court of appeal may not set aside a trial court's finding of fact in the absence of manifest error or unless it is clearly wrong. Where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed, even though the appellate court may feel that its own evaluations and inferences are as reasonable as those of the lower court. When findings of fact are based on determinations regarding the credibility of witnesses, the manifest error/clearly wrong standard demands great deference to the trier of fact's findings. Only the factfinder can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding and belief in that which is said. Rosell v. ESCO, 549 So.2d 840 (La.1989); Freeman v. Rew, 557 So.2d 748 (La.App. 2d Cir.1990), writ denied, 563 So.2d 1154 (La.1990).
Plaintiffs Statutory Burden of Proof
Accepting the above scenario, this case is governed by La. R.S. 9:2800.6 which is the slip and fall statute concerning merchants. This statute, as revised in 1990 and in effect at the time of the instant accident[2] states, in pertinent part, as follows:
*100 A. A merchant owes a duty to persons who use his premises to exercise reasonable care to keep his aisles, passageways, and floors in a reasonably safe condition. This duty includes a reasonable effort to keep the premises free of any hazardous conditions which reasonably might give rise to damage.
B. In a negligence claim brought against a merchant by a person lawfully on the merchant's premises for damages as a result of an injury, death, or loss sustained because of a fall due to a condition existing in or on a merchant's premises, the claimant shall have the burden of proving, in addition to all other elements of his cause of action, that:
(1) The condition presented an unreasonable risk of harm to the claimant and that risk of harm was reasonably foreseeable;
(2) The merchant either created or had actual or constructive notice of the condition which caused the damage, prior to the occurrence; and
(3) The merchant failed to exercise reasonable care.
C. Definitions:
(1) "Constructive notice" means the claimant has proven that the condition existed for such a period of time that it would have been discovered if the merchant had exercised reasonable care.
(2) "Merchant" means one whose business is to sell ... foods at a fixed place of business.
Based upon the recent ruling of our supreme court in White v. Wal-Mart Stores, Inc., 97-0393 (La.9/9/97), 699 So.2d 1081, Ryan's makes the following arguments disputing the trial court's ruling and its determination of constructive notice in this case:
(i) ... [T]o find liability based on Ryan's alleged constructive notice, one can only conclude that Judge Drew made the unsupported assumption that the manager could have seen the taco meat before plaintiff was led through the area. If the basis of Judge Drew's ruling was that the manager's alleged presence constitutes constructive notice, he inferred constructive notice, just as the Fifth Circuit did in White. Such an inference was rejected as error by the Supreme Court, 699 So.2d at 1084, and constitutes reversible error here. (Emphasis supplied by Ryan's.)
(ii) Plaintiff and all of her witnesses testified that they did not know how the taco meat got onto the floor or how long the taco meat was on the floor before the fall. No one testified to seeing anyone serving or carrying taco meat, much less spilling it, and the taco meat was served from an area of the Mega Bar well away from the area of the fall.... The alleged escorting by the manager Judge Drew's only apparent basis for assigning liability does not establish a time period for the existence of the condition.
In White, the court explained the plaintiff's statutory burden for proving the merchant's "constructive notice" of a spill. Discussing constructive notice as defined in subsection (C)(1) of the statute the court said:
There is a temporal element included: "such a period of time ..." The statute does not allow for the inference of constructive notice absent some showing of this temporal element. The claimant must make a positive showing of the existence of the condition prior to the fall. A defendant merchant does not have to make a positive showing of the absence of the existence of the condition prior to the fall. Notwithstanding that such would require proving a negative, the statute simply does not provide for a shifting of the burden.
Though there is no bright line time period, a claimant must show that "the condition existed for such a period of time ..." Whether the period of time is *101 sufficiently lengthy that a merchant should have discovered the condition is necessarily a fact question; however, there remains the prerequisite showing of some time period. A claimant who simply shows that the condition existed without an additional showing that the condition existed for some time before the fall has not carried the burden of proving constructive notice as mandated by the statute. Though the time period need not be specific in minutes or hours, constructive notice requires that the claimant prove the condition existed for some time period prior to the fall. This is not an impossible burden.
White, supra. 1084-85 [footnote omitted].
In the most recent supreme court review of a slip and fall case, the above quoted ruling of White was reaffirmed in a per curiam ruling which reversed the lower court's verdict for the plaintiff. Kennedy v. Wal-Mart Stores, Inc., 98-1939 (La.4/13/99), 733 So.2d 1188. As in White, the plaintiff in Kennedy slipped in a clear liquid (a puddle of water) with a Wal-Mart employee on duty within sight of the plaintiff at the time of the fall. While each Wal-Mart employee was responsible for an hourly "zone defense" check of the area near his work station, the employee in Kennedy, as in White, was not shown to have ever seen the clear liquid on the floor before the fall. Under these facts, the court ruled that the plaintiff failed to prove Wal-Mart's constructive notice of the hazard because the "plaintiff presented absolutely no evidence as to the length of time the puddle was on the floor before his accident." Id. slip opin. p. 4, p. 1191.
Under White, the statutory "temporal element" in the definition of constructive notice must be proven by what the court refers to as "positive evidence."[3] See White, supra, 1085-86. Although the court did not define the phrase "positive evidence," the Louisiana evidence code[4] and the longstanding judicial and academic understanding of relevant evidence demonstrate that proof of a material fact, such as this statutory temporal element, may be made by both direct and circumstantial evidence.[5] Professor Wigmore indicates in *102 his treatise that circumstantial evidence may be as persuasive as testimonial or direct evidence in providing a compelling demonstration of the existence or nonexistence of a fact in issue. 1A Wigmore, Evidence § 26 (Tillers rev.1983).
Without a precise definition of White's use of the phrase "positive evidence," we cannot assume that a plaintiff in a slip and fall case must bear the burden of proof imposed by the statute without the normal rule of evidence allowing for circumstantial evidence to prove a material fact. We therefore reject Ryan's initial argument that the trial court could not infer that Ryan's employee who escorted Crawford to her table could have seen the taco meat. The circumstantial evidence of his location to the spill and his training to look for spilled food in the restaurant implies that he could have seen the hazard and prevented the accident. Indeed, Ryan's complaint that the trial court "inferred constructive notice" misses altogether the law's allowance to the fact finder to construe or draw the conclusion of notice from facts and circumstances which show something less than actual knowledge. The statute does not require proof that the employee look down and actually see the spill because the statute itself distinguishes between actual and constructive notice.
In White and Kennedy, the Wal-Mart employees failed to see the clear liquids on the floor near their work stations. Since the puddles of clear liquids were difficult to see and since the employees were not shown to have walked directly over the floor area of the spill between the time of the spill and the accident, proof that the employees could have noticed the spill was not made through strong circumstantial evidence. In this case, the taco meat was visible. Every Ryan's employee moving through the highly trafficked food bar area had the responsibility to look for spills. Thus, in escorting Crawford to a table in the restaurant, the Ryan's employee could have and should have seen the spill in this case.
Next, Ryan's argues that White requires proof of the time period the temporal element of the existence of the spill and that plaintiff did not establish when the taco meat first fell on the floor. This argument fails to properly consider the interplay between the temporal element of the existence of the spill on the floor and the temporal element of the time of merchant's last inspection. In many slip and fall cases, evidence of the time of the merchant's last floor inspection establishes one temporal fact which is then considered in relation to the time of the spill and its length of time on the floor prior to the fall. The alleged lack of reasonable care of the merchant is then measured in terms of the reasonableness of the delay between the time of merchant's last inspection and the time of the spill.
In contrast, in this case there was no delay because the merchant's last opportunity to inspect the premises coincided with the time of the spill's existence on the floor and the fall itself. Instead of negligence for the delay or lack of inspection, Ryan's was held negligent by the trial court for its employee's failed inspection immediately prior to the fall. From this view of the case, the precise time that the meat fell on the floor is irrelevant because the spill was shown to have been in existence when Ryan's employee escorted Crawford through the area of the spill.
Damages
Ryan's next argues that the trial court committed error in awarding excessive general damages in the amount of $15,000 for Crawford's injuries and that the most which should have been awarded was $7,500. Crawford, on the other hand, asserts *103 that this general damage award is inadequate and should be increased by this court.
General damages are those which may not be fixed with pecuniary exactitude. They instead involve mental or physical pain or suffering, inconvenience, the loss of intellectual gratification or physical enjoyment, or other losses of life or life-style which cannot be definitively measured in monetary terms. Kessler v. Southmark Corp., 25,941 (La.App.2d Cir.9/21/94), 643 So.2d 345.
The discretion vested in the trier of fact is "great," and even vast, so that an appellate court should rarely disturb an award of general damages. Youn v. Maritime Overseas Corp., 623 So.2d 1257 (La. 1993); Jones v. Thomas, 27,140 (La.App.2d Cir.8/23/95), 660 So.2d 86, writ denied, 95-2351 (La.12/8/95), 664 So.2d 426. Reasonable persons frequently disagree about the measure of general damages in a particular case. It is only when the award is, in either direction, beyond that which a reasonable trier of fact could assess for the effects of the particular injury to the particular plaintiff under the particular circumstances that the appellate court should increase or reduce the award. Youn, supra. Only after such an abuse of discretion is noted will a resort to prior awards be appropriate and then only for the purpose of determining the highest or lowest point which is reasonably within that discretion. Youn, supra.
Crawford underwent physical therapy for one month and chiropractic treatments for almost six months. Crawford and her family and friends testified that she experienced a significant increase in her level of pain and a notable decrease in the activities she was able to participate in from the time before this accident occurred. While Crawford had a degenerative arthritic condition prior to her fall at Ryan's, two orthopaedic surgeons, Drs. Green and Bicknell, stated that a traumatic event such as a fall could cause some aggravation of her chronic condition. When a defendant's negligent conduct aggravates a pre-existing condition, the victim must be compensated to the full extent of the aggravation. Miley v. Landry, 582 So.2d 833 (La.1991); Perniciaro v. Brinch, 384 So.2d 392 (La.1980). Dr. Bicknell admitted that it was extremely difficult from a medical standpoint to differentiate between Crawford's current condition and the condition she would have been in due to her pre-existing conditions if this incident had not happened. Thus, the trial court's conclusion that the fall aggravated the plaintiff's pre-existing condition for an extended period of time supports the amount of the award in this case.
While reasonable persons can disagree about the trial court's award of $15,000, we cannot conclude that it is abusively high or low. Finding no abuse of the trial court's vast discretion to award general damages, we affirm the general damages award of $15,000 rejecting the claims by both parties in this appeal to the contrary.
Conclusion
For the foregoing reasons, we affirm the trial court's judgment. Costs of this appeal are assessed to the appellant.
AFFIRMED.
NOTES
[1] Crawford identified the person leading them to a table as Woods while the other members of her party stated that a manager was escorting them. While Woods testified that he was not leading Crawford's party and was, in fact, standing twenty to thirty feet away from Crawford when she fell, we find that with the testimony that it was Ryan's normal procedure to have a Ryan's employee seat customers, the trial court's finding that a manager was escorting Crawford's party is reasonable. Woods and Trammel also testified that there was a yellow wet floor sign near the spot where Crawford fell but Crawford and the other members of her party denied seeing such a sign.
[2] Effective May 1, 1996, the legislature amended La. R.S. 9:2800.6 to clarify that in determining reasonable care in subsection (B)(3), the absence of written or verbal uniform cleanup or safety procedures is insufficient, alone, to show a lack of reasonable care and in subsection (C)(1), that the presence of an employee in the vicinity does not, alone, constitute constructive notice. The amended statute expressly applies only to causes of action arising on or after the effective date. 1996 La. Acts No. 8 § 2.
[3] We have reviewed prior jurisprudence of our supreme court where the phrase "positive evidence" has been employed and find no clear and consistent usage given to the term. In Joseph v. Bohn Ford, Inc., 483 So.2d 934, 942 (La.1986), the court stated that "causation can be proved by negative as well as positive evidence." The negative evidence to which the court referred was circumstantial evidence of a brake failure in an automobile. In Montgomery v. Opelousas General Hospital, 540 So.2d 312, 320 (La.1989), the court said that "the direct evidence offered by the defendants... is not positive evidence." The direct evidence to which the court referred was the physician's observing and touching of the patient's nerve during an operation. In cases involving proof of adultery, the court recognized that "direct or positive evidence" will seldom be established, leaving adultery to be proven by "indirect or circumstantial evidence." Hayes v. Hayes, 225 La. 374, 73 So.2d 179, 180 (1954).
[4] La. C.E. art. 401 defines relevant evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." See State v. Mosby, 581 So.2d 1060 (La.App. 1st Cir.1991), where the court stated that "any evidence, whether direct or circumstantial, is relevant if it tends to prove or disprove existence of any material fact" (affirmed by the Louisiana Supreme Court, 595 So.2d 1135 (La.1992)).
[5] In his treatise, Professor Wigmore sets out the distinction between circumstantial and testimonial evidence. Wigmore points out that "direct evidence" is an alternative term for testimonial evidence which has been sanctioned by usage. In reviewing prior jurisprudence, Wigmore cites one case which says that all judicial evidence must be either direct or circumstantial and then further states, "When we speak of a fact as established by direct or positive evidence, we mean that it has been testified to by witnesses as having come under the cognizance of their senses, and of the truth of which there seems to be no reasonable doubt or question; and when we speak of a fact as established by circumstantial evidence, we mean that the existence of it is fairly and reasonably to be inferred from other facts proved in the case" (emphasis added). State v. Carter, 1 Houst. Crim. Cas. 402, 410-411 (Del. Oyer & Terminer 1873). 1A Wigmore, Evidence § 25 (Tillers rev. 1983). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1511836/ | 761 S.W.2d 70 (1988)
Mrs. Charles A. DAVENPORT, Jr., et al., Appellants,
v.
PHILLIP MORRIS, INCORPORATED, et al., Appellees.
No. C14-87-918-CV.
Court of Appeals of Texas, Houston (14th Dist.).
October 27, 1988.
Rehearing Denied November 23, 1988.
Grant Kaiser, Houston, for appellants.
Lawrence L. Germer, Beaumont, Daniel O. Goforth, Houston, Gail C. Jenkins, Hubert Oxford, III, Beaumont, G.R. Poehner, Lea F. Courington, David P. Stone, Dallas, Marie R. Yeates, Houston, for appellees.
Before JUNELL, SEARS and CANNON, JJ.
OPINION
JUNELL, Justice.
Appellants appeal from the granting of appellees' motion for summary judgment. *71 In one point of error appellants claim the trial court erred in granting appellees' motion because their original petition was filed within the time period specified by the applicable statute of limitations. We affirm.
On June 9, 1986 appellants, the surviving wife and children of Charles A. Davenport, filed suit against appellees, six cigarette manufacturers, four cigarette distributors, a scientific organization, and a tobacco industry group, alleging that Mr. Davenport died of emphysema and cardiovascular problems caused by his smoking cigarettes manufactured and/or marketed by each of the appellees. Appellants asserted claims under both the Texas Survival Statute and Wrongful Death Statute.
All parties have stipulated that in 1977, nine years before his death, Mr. Davenport was advised and believed that his emphysema and cardiovascular problems were the result of his cigarette smoking. Mr. Davenport died of those diseases in 1986.
Appellants abandoned their survival cause of action in the trial court. Appellee Brown and Williamson Tobacco Corporation moved for summary judgment against appellants urging that any remaining wrongful death claims were barred because the decedent's claim for his own injuries would have been barred by limitations at the time of his death. All appellees joined in Brown and Williamson's motion and amended their pleadings asserting the affirmative defense of a limitations bar. On September 17, 1987, the trial court granted appellees' motion for summary judgment, holding that the running of the statute of limitations on Mr. Davenport's cause of action prevented appellants from asserting a wrongful death cause of action.
In one point of error appellants claim the trial court improperly granted the motion for summary judgment because their wrongful death cause of action was timely filed. Appellants assert that the statute of limitations for wrongful death claims is prescribed by section 16.003 of the Texas Civil Practice and Remedies Code Annotated (Vernon 1986), which states in part:
A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting in death. The cause of action accrues on the death of the injured person.
Appellants assert that since their cause of action was brought within two years of Mr. Davenport's death, it is not barred by limitations.
The applicable limitations period for Mr. Davenport's cause of action was two years. TEX.CIV.PRAC. & REM.CODE ANN. § 16.003(a) (Vernon 1986). Therefore, Mr. Davenport's cause of action against the tobacco companies for his injuries was barred by limitations at the time of his death.
A cause of action under the Texas Wrongful Death Act is, by its nature, a derivative action. Leal v. C.C. Pitts Sand and Gravel, 419 S.W.2d 820, 821 (Tex. 1967). Section 71.003 of the Texas Civil Practice and Remedies Code Annotated (Vernon 1986) provides that the code provisions which create the wrongful death cause of action apply "only if the individual injured would have been entitled to bring an action for the injury if he had lived." A wrongful death action cannot be maintained successfully when the decedent has no cause of action if he survived the injuries. Schwing v. Bluebonnet Express, Inc., 489 S.W.2d 279, 281 (Tex.1973). Therefore, the controlling issue is whether the alleged tortfeasors, appellees in this case, would have been liable to the decedent had he lived and brought the instant suit.
Because of the derivative nature of a wrongful death cause of action, several defenses to a decedent's cause of action for his own injuries have been held to be available to a defendant in a subsequent action for wrongful death. See Bounds v. Caudle, 560 S.W.2d 925, 926 (Tex.1978) (interspousal tort immunity); Thompson v. Fort Worth and R.G. Ry. Co., 97 Tex. 590, 80 S.W. 990, 991 (1904) (release); Wentzel v. Neurenberg, 314 S.W.2d 855, 861 (Tex.Civ. App.Waco 1958, no writ) (contributory negligence); Karling v. Lower Colorado *72 River Authority, 303 S.W.2d 495, 499 (Tex. Civ.App.Austin 1957, writ ref'd n.r.e.) (governmental immunity). Additionally, two federal district courts, applying Texas law, have held that when a decedent would be barred by limitations from asserting a cause of action at the time of his death, the beneficiaries under the wrongful death statute likewise are precluded from asserting a wrongful death cause of action. Terry v. Tyler Pipe Industries, 645 F.Supp. 1194, 1197 (E.D.Tex.1986); Delesma v. City of Dallas, 588 F.Supp. 35, 37 (N.D. Tex.1984), aff'd on other grounds, 770 F.2d 1334 (5th Cir.1985).
The Court in Thompson v. Fort Worth & R.G. Ry. Co., 80 S.W. at 990, held that a release of the decedent's claims is a defense to the wrongful death claim filed by the decedent's family. In Thompson, Mr. Thompson was seriously injured while a passenger on a train. He settled his claim with the railroad company and signed a release of all further claims arising out of the accident. After Mr. Thompson died from those injuries, his widow and children brought suit under the wrongful death statute for the pecuniary damages they suffered as a result of his death. The supreme court held that the decedent's release constituted a bar to his family's cause of action for his death. The Court reasoned:
[T]here is but one cause of action under the law, for which there can be but one compensation; hence, if the injured party sues and recovers compensation for his injuries, or compromises his claim with the wrongdoer, and for a valuable consideration executes a release therefor, the cause of action is thereby satisfied, and no right of action remains to the persons named in the statute.
Id. at 991-92.
The running of the statute of limitations on Mr. Davenport's cause of action extinguished it as effectively as a release. There is only one cause of action in a wrongful death case. In this case, the potential cause of action was one for the injuries incurred by the deceased which were caused by his cigarette smoking. That cause of action was extinguished when the statute of limitations ran on Mr. Davenport's claim for his injuries. Appellants cannot now revive that action by bringing a derivative wrongful death claim. Therefore, appellants are precluded from bringing an action for wrongful death. Appellants' sole point of error is overruled.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1584489/ | 717 F.Supp. 717 (1989)
DIME BOX PETROLEUM CORPORATION, Plaintiff,
v.
The LOUISIANA LAND AND EXPLORATION COMPANY, Defendant.
Civ. A. No. 86-B-2435.
United States District Court, D. Colorado.
July 6, 1989.
As Modified August 8, 1989.
*718 Clyde A. Muchmore, Crowe & Dunlevy, PC, Oklahoma City, Okl., Mark F. O'Shell, Miller & Weiss, PC, Denver, Colo., for plaintiff.
H.R. McCollister, H.R. McCollister, PC, Denver, Colo., for defendant.
MEMORANDUM OPINION AND ORDER
BABCOCK, District Judge.
Plaintiff, Dime Box Petroleum Corporation (Dime Box), commenced this action alleging breach of contract by defendant, The Louisiana Land and Exploration Company (LLE), in connection with two separate oil and gas exploration projects known as the Ambrose Prospect (Ambrose) and the Cycle VI Prospect (Cycle VI). Plaintiff also asserts claims of fraud and breach of fiduciary duty in connection with defendant's supply and pricing of tubular goods used in well drilling. Defendant counterclaims for breach of contract alleging that plaintiff failed to pay its share of lease acquisition costs in Ambrose. Jurisdiction is based on 28 U.S.C. § 1332(a)(1). The parties stipulate that Colorado law applies in this diversity action. Trial to the Court began June 12, 1989 and concluded June 15, 1989.
Upon the following findings of fact and conclusions of law the Court determines that LLE's counterclaim for acreage acquisition costs exceeds Dime Box's claim for production revenues due on the Ambrose Prospect. The Court also determines that Dime Box has prevailed on its Cycle VI breach of contract claim, but has not prevailed on its breach of fiduciary duty and fraud claims.
*719 I. Breach of Contract
A. Findings of Fact
1. Ambrose Prospect
Dime Box claims that LLE breached its contract by overcharging on acreage acquisition costs and wrongfully withholding revenues. LLE counterclaims that Dime Box breached the contract by underpaying the acreage acquisition costs. The pivotal fact issue in deciding whether a breach of contract has occurred, and if so, by whom, is the amount Dime Box agreed to commit to acreage acquisition in the Ambrose Prospect.
a. Acreage Acquisition
By letter dated May 31, 1983 (Exh. 2), LLE proposed a joint venture with Dime Box to purchase oil and gas leases (acreage acquisition) within an area of North Dakota known to the parties as the Ambrose Prospect. The terms of this proposal included the venture's commitment of $1,000,000, with which the venture would acquire 4,000 to 5,000 acres at a ceiling of $225 per acre and a 1/6 th royalty. It also provided that LLE would consult each joint venturer if lease acquisition exceeded this amount.
On June 1, 1983, (Exh. 3) Dime Box agreed to enter into the Ambrose Prospect joint venture with a maximum commitment by Dime Box of $400,000 which represented a 40% interest in the joint venture. LLE was the designated operator of wells developed in the Ambrose Prospect pursuant to joint operating agreements (JOA) between the parties. Although Dime Box's share of the Ambrose Prospect was 40% in 1983, in 1984 and 1985, Dime Box's and LLE's shares of the Ambrose Prospect increased to 50% after other participants dropped out of the venture.
In a December 1983 meeting between the parties, Dime Box's representative, George Platt (Platt) was told by LLE's representative, David Padgett, that additional expenditures of $500,000 were planned for lease acquisition in 1984. Platt verbally approved this additional 1984 expenditure at the meeting. This contract was confirmed by a January 10, 1984 letter from Dime Box to LLE (Exh. P), and a January 19, 1984 letter from Dime Box to its drilling participants. (Exh. 5). The parties further agreed in a December, 1984 meeting to spend an additional $200,000 in 1985 for fill-in acreage. See also Exhs. 12AA and D-13. Consequently, based on Dime Box's 50% ownership share in the Ambrose Prospect, Dime Box committed an additional $250,000 in 1984 and an additional $100,000 in 1985 for acreage acquisition. Therefore, during the three years Dime Box and LLE participated in the Ambrose Prospect, Dime Box committed a total of $750,000 for acreage acquisition costs of which $722,214 was actually spent.
The parties stipulated that Dime Box acquired acreage totalling $200,808.07 in addition to the contested amounts. Also, pursuant to a request from Dime Box, in January, 1986 Dime Box and LLE entered into a "buy back" agreement in which LLE agreed to purchase a percentage of Dime Box's working interest in leases in designated areas for $113,801.84. (Exh. 39) Therefore, the amount Dime Box is obligated to pay on leases totals $809,220.23. ($722,214.00 + $200,808.07 - $113,801.84 = $809,220.23) Dime Box paid to LLE $535,891 for acreage acquisition. (Exh. 120) Accordingly, Dime Box owes LLE $273,329.23 for acreage acquisition costs. ($809,220.23 - $535,891.00 = $273,329.23)
b. Production Revenues
During the course of their relationship, LLE withheld $359,227 in production revenues payable to Dime Box. Later, LLE refunded $165,959 of these revenues leaving a balance due from LLE to Dime Box of $193,268. (Exh. 125 and 126)
When the amount due LLE from Dime Box on acreage acquisition costs ($273,329.23) is offset against the amount LLE owes Dime Box for production revenues, Dime Box owes LLE $80,061.23 for acreage acquisition costs.
2. Cycle VI Prospect
In August 1984, Dime Box and LLE entered into another joint venture to purchase oil and gas leases (acreage acquisition) in an area of North Dakota known to the parties as the Cycle VI Prospect. Pursuant *720 to a written agreement, (Exh. 19) Dime Box agreed to commit $350,000 for acreage acquisition in Cycle VI. In a December 1984 meeting between the parties, it was discovered that Dime Box's share of leases already purchased totalled $700,000. After negotiations on these overcharges, the parties agreed to reduce Dime Box's interest in Cycle VI from an undivided 35% interest to an undivided 20% interest. To facilitate LLE's obtaining additional partners to buy the 15% interest in Cycle VI, Dime Box agreed to pay 35% of the billings of a portion of Cycle VI and LLE agreed to refund thereafter the overpayment by check. (Exh. 26 and 27) The overpayment amounts to $83,917.76. LLE never refunded this overpayment by check or credit and therefore Dime Box overpaid LLE on Cycle VI a total of $83,917.76.
When the amount that Dime Box owes LLE on Ambrose acreage acquisition costs ($80,061.23) and the amount LLE owes Dime Box on Cycle VI ($83,917.76) are offset, $3,856.53 is owed by LLE to Dime Box.
B. Conclusions of Law
1. Ambrose Prospect
The existence of a contract is a question of fact to be determined by consideration of all facts and circumstances. L.U. Cattle Co. v. Wilson, 714 P.2d 1344 (Colo.App.1986). An offer and an assent manifested by act or conduct constitute a contract. Linder v. Midland Oil Refining Co., 96 Colo. 160, 40 P.2d 253 (1935). Here, the Court concludes that Dime Box agreed to pay $750,000 for joint venture acreage acquisition. ($400,000 in 1983, $250,000 in 1984, and $100,000 in 1985)
2. Cycle VI Prospect
An operator has an interest in oil and gas revenues to the extent of any participants's unpaid share of the costs. Reserve Oil, Inc. v. Dixon, 711 F.2d 951 (10th Cir.1983).
Whether a contract has been modified is a question for the trier of fact. Uinta Oil Refining Co. v. Ledford, 125 Colo. 429, 244 P.2d 881 (1952). Modification of an agreement requires mutual consent of the parties which can be either explicitly given or inferred from the parties' conduct. Reynolds v. Farber, 40 Colo. App. 467, 577 P.2d 318 (1978).
The parties agreed to reduce Dime Box's interest in Cycle VI from 35% to 20%. To facilitate LLE's obtaining additional partners to buy the 15% interest, the parties agreed that Dime Box would pay 35% of designated Cycle VI billings. LLE agreed to refund overpayment by check. The Court concludes that the parties thereby modified their existing contract. (Exh.25) LLE breached the modified contract by failing to refund Dime Box's overpayment.
II. Breach of Fiduciary DutyTubular Pricing
Dime Box claims that LLE breached its fiduciary duty to Dime Box by entering into secret tubular goods purchase agreements for the benefit of LLE and to the detriment of Dime Box.
A. Duty
Dime Box contends that LLE's fiduciary duty arose from its designation as a co-venturer in a joint venture and under various JOAs with Dime Box in which LLE was operator and Dime Box was non-operator. However, the breaches of fiduciary duty alleged by Dime Box related only to the purchase and supply of tubulars (pipe and casing) pursuant to their JOAs rather than to their acreage acquisition joint ventures. Thus, the precise issue is whether a fiduciary relationship arises between an operator and non-operator pursuant to its JOA as a matter of fact, or by operation of law.
1. Findings of Fact
The management of Dime Box and LLE are sophisticated and experienced oil and gas persons who were of equal bargaining power at all relevant times. The parties entered into JOAs for the purposes of drilling and developing wells on land acquired by their joint ventures in the Ambrose and Cycle VI prospects. Article VII of each JOA states in pertinent part:
*721 A. Liability of Parties
The liability of the parties shall be several, not joint or collective. Each party shall be responsible only for its obligations, and shall be liable only for its proportionate share of the costs of developing and operating the Contract Area. Accordingly, the liens granted among the parties in Article VII.B. are given to secure only the debts of each severally. It is not the intention of the parties to create, nor shall this agreement be construed as creating, a mining or other partnership or association, or to render the parties liable as partners. (Emphasis in original)
The pertinent JOAs contained specific language stating the standard by which the operator's conduct was measured. Art. V.A. entitled "Designation and Responsibilities of Operator" states:
The Louisiana Land and Exploration Company shall be the Operator of the Contract Area.... It shall conduct all such operations in a good and workmanlike manner, but it shall have no liability as Operator to the other parties for losses sustained or liabilities incurred, except such as may result from gross negligence or willful misconduct.
The JOAs also contained different deadlines for payment of expenses, contained modifications of, among others, the "Subsequently Created Interest" provision, the "Notices" provision, the "Advances and Payments by Non-Operators" provision of the Council of Petroleum Accountants Societies of North America (COPAS) Accounting Procedure Joint Operations attachment, and the "Pricing of Joint Account Material Purchases, Transfers and Dispositions" provision. Although the JOAs covering Ambrose and Cycle VI are printed contracts which contain numerous standard provisions, the JOAs were negotiated documents.
After entering into the JOAs in the Ambrose Prospect in June 1983, Dime Box began to receive charges for tubular goods which were being used in drilling operations. These billings showed that LLE was charging the participants Eastern Mill prices (§ IV.2 of the JOA) for tubular goods which did not include discounts then generally available. Dime Box questioned these prices. LLE responded to these inquiries in a letter dated July 26, 1983 (Exh.11) in which it stated that it would continue to bill at these prices pursuant to Section IV.2 of the JOA. LLE explained that it had a considerable amount of tubular inventory which would be used in future wells. LLE also said that it would continue to bill the participants at the published mill prices for items transferred from their inventory.
In response to this information, Dime Box requested that it receive the current discounts on tubulars or be allowed to supply their share of tubulars in kind for all the wells in the Ambrose Prospect in which they were participants. (Exh.11) LLE accepted the option that Dime Box would supply their share of tubulars in kind. Dime Box supplied tubulars in kind on all wells in which it participated in the Ambrose Prospect including three wells that had already been drilled when the "tubulars in kind" option was implemented.
2. Conclusions of Law
A fiduciary relationship exists between parties to a joint venture. Lucas v. Abbott, 198 Colo. 477, 601 P.2d 1376 (1979). Each joint venturer has a duty to make full disclosure to his colleagues on matters concerning the venture. Id. Whether a joint venture exists is a question of fact for the fact-finder to determine from the facts and circumstances in evidence. Agland, Inc. v. Koch Truck Line, Inc., 757 P.2d 1138 (Colo.App.1988). A joint venture cannot arise by operation of law. Fulenwider v. Writer Corp., 544 P.2d 408 (Colo.App. 1975).
Contracts must be read using the plain and generally accepted meaning of words. Radiology Professional Corp. v. Trinidad Area Health Ass'n, Inc., 195 Colo. 253, 577 P.2d 748 (1978). As an equitable matter, "a trustee type relationship imposing a duty of fair dealing between the operator and the non-operator owners [may arise] in the matter of distribution of shares among owners." Reserve Oil, Inc. v. Dixon, 711 F.2d 951, 953 (10th Cir.1983). *722 A fiduciary relationship is created when such a trust is imposed on the operator. In re Mahan & Rowsey, Inc., 817 F.2d 682 (10th Cir.1987). However, "an agency relationship may be "specifically disavowed in the contract itself." Id. And the relationship between parties to a joint operating agreement is "controlled by the terms of their agreements voluntarily made." Frankfort Oil Company v. Snakard, 279 F.2d 436 (10th Cir.1960), cert. denied, 364 U.S. 920, 81 S.Ct. 283, 5 L.Ed.2d 259 (1960). Dime Box's position as a corporation sophisticated in oil and gas matters militates against this Court finding that a fiduciary relationship was created by these JOAs when the JOAs specifically define the standard by which the operator's conduct is measured. Moreover, the Court concludes that where, as here, experienced and sophisticated parties with equal bargaining power have fully negotiated a contract which specifically disavows a joint undertaking, no joint venture was formed and, thus, no fiduciary relationship was created by the JOAs.
B. Damages
Alternatively, assuming LLE owed Dime Box a fiduciary duty, the Court concludes that, as to the Ambrose Prospect, plaintiff failed to prove damages from a breach of any such duty. Dime Box supplied its pro rata share of tubulars in kind in the Ambrose Prospect. Consequently, it suffered no damage there from any conduct by LLE concerning tubular pricing. Therefore, as to the Ambrose Prospect, Dime Box cannot prevail in any event on its claim of breach of fiduciary duty.
III. Breach of Fiduciary DutyTubular Excess
Dime Box also asserts that LLE breached its fiduciary duty by improperly declaring to be salvage excess tubular goods supplied in kind by Dime Box in various Ambrose Prospect wells.
Testimony at trial established that, pursuant to LLE's policy, the excess tubular goods were inspected by an inspection company to check the condition of the tubulars. LLE was told that the tubulars would have to be rethreaded to be useable. An LLE purchasing department employee declared the tubulars "surplus" based on his determination that the cost to rethread the tubulars would exceed the value of the tubulars. He then credited Dime Box for the tubulars at 3 cents per lb. Provision IV of COPAS, attached as Exhibit C to all JOAs in this case, provides that the operator may purchase, but is under no obligation to purchase the interest of non-operators in surplus material.
The Court finds and concludes that LLE properly declared the tubulars "surplus" and properly credited Dime Box's account for its value. LLE breached no duty, fiduciary or otherwise, in it's actions concerning excess tubulars in the Ambrose Prospect.
IV. FraudCycle VI Tubulars
Dime Box alleges that LLE defrauded it in connection with tubular goods by entering into secret tubular buy-back agreements with third parties to the detriment of Dime Box. Because Dime Box proved no damage regarding the Ambrose Prospect tubulars, see II.B, supra, the Court addresses Dime Box's fraud claim as to Cycle VI tubulars only.
A. Findings of Fact
In June 1984, Dime Box expressed interest in entering into the Cycle VI lease acquisition and well drilling programs. During discussions with LLE, Dime Box was told that LLE was hesitant to let Dime Box participate in an area other than Ambrose because of the parties' previous problems with tubulars in the Ambrose Prospect. LLE refused to agree that Dime Box could supply tubulars in kind in Cycle VI.
In August 1983, LLE had entered into buy-back agreements with third parties under which LLE sold all of its current tubular goods inventory which had been purchased previously at a very high price during a period of high demand. Under these agreements, LLE agreed to later buy back two to three times the amount of tubular goods at the same above-market price, which price it charged to its drilling participants. *723 Thus, as of August 1983, LLE no longer had any tubular goods inventory.
Despite having no tubular inventory, LLE charged Dime Box Eastern Mill Prices for tubulars based on COPAS Art. IV(2)(A)(1) which allows an operator to price tubulars transferred out of inventory at "Eastern Mill Price." Expert testimony established that tubulars obtained through suppliers pursuant to buy-back agreements should be treated as material purchases under Art. IV, 1 supra for which "the operator will make reasonable efforts to take advantage of all discounts available." (Exh.S-17).
Meanwhile, on May 15, 1984, the parties entered into a JOA for the drilling of the # 1 Thomte 44-8 well in a prospect other than Cycle VI. (Exh.43) Article XV.T of that JOA provides:
It is recognized that the Operator at the effective date of this Agreement does not currently maintain an inventory of tubular goods....
The Cycle VI JOA between the parties was implemented on August 29, 1984.
Dime Box had notice, as of May 15, 1984, that LLE had no tubular inventory. After May 15, 1984, any reliance on information from LLE that LLE had a tubular inventory, and thus, was entitled to charge Eastern Mill prices was unjustified in light of the May 15, 1984 JOA (Exh.43) and Dime Box's status as a petroleum exploration company run by sophisticated and experienced oil and gas people. And, Platt testified that the existence of such buy-back agreements was common knowledge in the "patch." (the oil and gas industry) Thus, although LLE continued to charge participants as if it had a tubular inventory, Dime Box knew or should have known that no such inventory existed.
B. Conclusions of Law
In order to prevail on its claim of deceit based on fraud by misrepresentation or concealment, plaintiff must prove, inter alia, that plaintiff relied on the material false representation or took such action relying on the assumption that the concealed fact did not exist or was different from what it actually was and plaintiff's reliance was justified. Trimble v. City & County of Denver, 697 P.2d 716 (Colo. 1985); Teodonno v. Bachman, 158 Colo. 1, 404 P.2d 284 (1965) (concealment); Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458 (1937).
One is not justified in relying on a representation which a person of the same or similar intelligence, education or experience would recognize as false. Zimmerman v. Loose, 162 Colo. 80, 425 P.2d 803 (1967). Also, one is not justified in relying on the assumption that another will not intentionally conceal a material fact if a person of the same or similar intelligence, education or experience would not rely on it. Glisan v. Smolenske, 153 Colo. 274, 387 P.2d 260 (1963) (no recovery where undisclosed material fact was patent). Notice to an agent of a corporation in discharge of official duties, of material facts, is the knowledge of the corporation. Mayer Oil Co. v. Schnepf, 100 Colo. 578, 69 P.2d 775 (1937); Jones v. King Resources Co., 32 Colo.App. 56, 509 P.2d 814 (1973).
The Court concludes that Dime Box has failed to meet its burden of establishing that it relied on any representation, affirmative or by omission, by defendant and that reliance, if any, was justified.
V. Audit Costs
Dime Box also seeks $36,000 representing the cost of a joint audit in connection with its tubular claims.
Pursuant to COPAS Art. I, ¶ 5, "the Operator shall bear no portion of the Non-Operators' audit cost ... unless agreed to by the Operator." No evidence was introduced which showed that LLE agreed to share audit costs. Therefore, LLE is not liable to Dime Box for any audit costs.
Accordingly, it is ORDERED that:
1. after offset of the above breach of contract claims, judgment in the amount of $3,856.53 with interest calculated from January 20, 1987, (Exh.26) shall enter on behalf of plaintiff;
*724 2. plaintiff's claims of breach of fiduciary duty and fraud are DISMISSED with prejudice;
3. each party shall bear its own costs. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1640949/ | 789 F.Supp. 1360 (1992)
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION as Receiver of Sun Belt Federal Bank, F.S.B.
v.
Wendell P. SHELTON, et al.
Civ. A. No. 86-393-B.
United States District Court, M.D. Louisiana.
March 3, 1992.
John M. Wilson, Frederick W. Bradley, James D. McMichael, Cheryl V. Cunningham, Liskow & Lewis, New Orleans, La., *1361 for FDIC, as Manager of the FSLIC Resolution Trust Fund, as Receiver for SBFB, F.S.B.
Frank J. Gremillion, Baton Rouge, La., Ronald B. Ravikoff, Zuckerman, Spaeder, Taylor & Evans, Miami, Fla., for Wendell P. Shelton.
Sam J. D'Amico, D'Amico & Curet, Baton Rouge, La., for A. Larry Tullos.
Scott H. Crawford, James R. Lewis, Preis & Crawford, Baton Rouge, La., for Robert N. Amacker, Jr., Robert B. Holt, Jr., Harold Dennis, Reynold Minsky, and Bruce Betts.
William A. Hargiss, Monroe, La., for Glenn D. Tanner.
William V. Dalferes, McGlinchey, Stafford, Cellini & Lang, New Orleans, La., for Flournoy Guenard.
Jon C. Adcock, Brook, Morial, Cassibry & Pizza, Baton Rouge, La., Fred J. Cassibry, Jan T. van Loon, Brook, Morial, Cassibry & Pizza, New Orleans, La., for Harry O. Adcock.
Marianne S. Pensa, Galloway, Johnson, Tompkins & Burr, New Orleans, La., Murray H. Wright, Edward E. Nicholas, III, Laura G. Fox, Wright, Robinson, McCammon, Osthimer & Tatum, Richmond, Va., for Continental Cas. Co. and American Cas. Co. of Reading, Pa.
Charles A. Schutte, Jr., Matthews, Atkinson, Guglielmo, Marks & Day, Baton Rouge, La., for Frederick Duplantis.
RULING ON JOINT MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING STANDARD OF CARE
POLOZOLA, District Judge.
This case requires the Court to determine the standard of care required of officers and directors in managing and operating a federally insured financial institution under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).[1]
The Federal Savings and Loan Insurance Corporation (FSLIC) originally brought this suit against former directors and officers of the failed Sun Belt Federal Bank, F.S.B. (Sun Belt) seeking damages for imprudent loans, waste of the bank's assets and general mismanagement. Thereafter, the Federal Deposit Insurance Corporation (FDIC) replaced FSLIC as party plaintiff in this case. The complaint filed against the directors and officers accuses them of negligence, gross negligence, negligent breach of fiduciary duty and grossly negligent breach of fiduciary duty.[2]
This matter is now before the Court on a joint motion for partial summary judgment. Continental Casualty Company, American Casualty Company of Reading, Pennsylvania and various individual directors and officers named as defendants in the action ("Continental") seek dismissal of all claims for negligence and negligent breach of fiduciary duty. Defendants contend these state claims are preempted by federal law. Alternatively, defendants contend no such claims arise under Louisiana law.
To properly rule on defendants' motion for partial summary judgment, the Court must examine the statutory language set forth in FIRREA. It is clear that the starting point for interpreting the meaning of a statute is the statute itself. Absent a clearly expressed legislative intention to the contrary, the language set forth in the statute must be ordinarily construed as conclusive evidence of Congressional intent.[3]
In 12 U.S.C. § 1821(k), the Congress defined the legal standard under which courts may impose liability on directors and officers of federally insured depository institutions. In this regard, § 1821(k) provides:
A director or officer of an insured depository institution may be held personally *1362 liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation
(1) acting as conservator or receiver of such institution,
(2) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver or conservator, or
(3) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by an insured depository institution or its affiliate in connection with assistance provided under section 1823 of this title,
for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable state law. Nothing in this paragraph shall impair any right of the Corporation under other applicable law.
Continental contends that 12 U.S.C. § 1821(k) totally preempts state law whenever state law permits a cause of action based upon conduct less blameworthy than gross negligence because Congress promulgated a uniform national standard of gross negligence for recovery against directors and officers by the FDIC in enacting FIRREA. Thus, Continental argues that the "inescapable import" of the above statutory language is that directors may not be held liable for conduct, such as simple negligence, which is less culpable than gross negligence.
In opposing the defendants' motion, the FDIC argues that Congress enacted 12 U.S.C. § 1821(k) to preempt state statutes which insulate bank officers and directors. Such state statutes prevent the FDIC from suing bank directors and officers under any theory of liability or limit director/officer liability to claims for intentional torts. Hence, the FDIC contends that while § 1821(k) provides the FDIC with a clearly defined arsenal of claims to assert against bank officers and directors, the FDIC's statutory protection from hostile state laws does not prevent the FDIC from asserting other claims under federal and state laws.
Under Article I of the United States Constitution and the Supremacy Clause embodied in Article VI, Congress has the power to legislatively preempt state law in all or part of a particular field. It is a well established principle that the Supremacy Clause invalidates state laws that "interfere with, or are contrary to," federal law.[4] "Preemption may be express or implied."[5] The essence of the Court's inquiry concerning "[a] pre-emption question requires an examination of congressional intent."[6] "Where ... the field which Congress is said to have pre-empted has been traditionally occupied by the States ... `we start with the assumption that the historic police power of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.'"[7]
Preemption is compelled when "Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose."[8] In "the absence of express preemptive language, the court may infer congressional intent to preempt state law only `where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress "left no room" for supplementary *1363 state regulation.'"[9] Even when the federal law is not intended to occupy the entire field, the state law will be preempted if it in fact conflicts with the federal law,[10] or "when the state law `stands as an obstacle to the accomplishment and execution of the full purposes and objects of Congress.'"[11]
Applying the above principles, the Court finds that 12 U.S.C. § 1821(k) contains no language which indicates that Congress sought to displace available state remedies with the enactment of FIRREA. Section 1821(k) provides that "[a] director or officer ... may be held personally liable for gross negligence or intentional torts".[12] Continental seeks to have the Court read the word "only" into § 1821(k). This Court is neither permitted nor prepared to judicially amend a statute passed by the Congress. If Congress had wished § 1821(k) to preempt state law claims, Congress would have modified the word "may" with the limiting term "only". It is a well established canon of statutory construction that the word "may" is not synonymous with "may only" and this Court cannot and will not read words into a statute when the statute is clear on its face.[13] As this Court has stated:
The Court's function is to interpret the law and not to amend or supplement a law enacted by the Congress. For this Court "[t]o supply omissions transcends the judicial function."[14]
In addition to its non-exclusive language, 12 U.S.C. § 1821(k) also contains a savings clause which provides that "[n]othing in this paragraph shall impair or affect any right of the Corporation under other applicable law."[15] The language in the statute "any right" and "other applicable law" reserves other remedies to the FDIC beyond those granted to the FDIC by the statute. Ordinarily, causes of action arising under state law are not preempted solely because they impose liability over and above that which is authorized by federal law.[16] If other state or federal laws or jurisprudence grant the FDIC the right to assert a claim against directors and officers of federal insured financial institutions, § 1821(k) preserves those claims. When Congress enacts a statute which creates certain rights, the general rule is that the existing common law rights are not replaced, unless Congress provides a clear and unequivocal statement to the contrary.[17]
Continental argues, however, that Congress has adopted a uniform standard for *1364 imposing director and officer liability thereby prohibiting states from regulating such conduct. Continental contends that 12 U.S.C. § 1821(k) establishes "a uniform standard of gross negligence for recovery against directors and officers."[18] The Court rejects this contention. If the Court accepts the notion that 12 U.S.C. § 1821(k) represents the exclusive standard of care, a double standard would be created which would interfere with the Congressional intent in enacting the statute while at the same time provide for a ludicrous result. Continental's contention would permit officers and directors to be judged by a simple negligence standard if their institutions remained open, but would subject them to a gross negligence standard with respect to the same pre-failure conduct if the institution failed. What incentive would a director or officer have to keep a struggling institution open if their exposure is gross negligence when the bank closes, but only simple negligence if the bank remains open?[19]
The final step in the preemption analysis requires the Court to determine the existence of any "actual conflict between federal and state law."[20] It is difficult to imagine a more harmonious situation whereby state law can aid in the achievement of Congressional purpose than to supplement 12 U.S.C. § 1821(k) with state law which gives the FDIC the right to proceed against those persons who have caused the nation's banks to fail. As noted earlier, the Court believes the statutory language of § 1821(k) is clear and there is no need to review the legislative history to determine its meaning. However, the Court's review of the legislative history of § 1821(k) reveals that the statute was enacted to maximize the federal government's ability to recover from individuals who have caused banks to fail or lose substantial sums of money.[21]
Continental's interpretation of § 1821(k) would result in conflict between the federal statute and state law because the FDIC would fall victim to discriminatory treatment that the statute seeks to avoid. When analyzing the effect of 12 U.S.C. § 1821(k), the Court must construe § 1821(k) with 12 U.S.C. § 1821(d)(2)(A)(i) which provides that the FDIC succeeds by operation of law to:
all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder, member, account holder, depositor, officer, or director of such institution with respect to the institution and the assets of the institution.
Thus, 12 U.S.C. § 1821(d)(2)(A)(i) legally subrogates the FDIC to claims that shareholders and depositors have against bank officers and directors under state law. Continental's reading of § 1821(k) amends § 1821(d)(2)(A)(i) by replacing the phrase "all rights, titles, powers, and privileges" with the phrase "some rights, titles, powers, *1365 and privileges as guaranteed in § 1821(k)." Therefore, when the Court determines the meaning of these two provisions, § 1821(d)(2)(A)(i) must be read to provide the general rule setting forth what rights the FDIC obtains under state law while § 1821(k) provides special rights to the FDIC when state law fails to do so. Thus, state law is only preempted where it fails to provide the FDIC with legal claims against bank directors and officers for acts and omissions rising to the culpability of gross negligence.
The Court recognizes that the courts which have interpreted 12 U.S.C. § 1821(k) have rendered conflicting decisions. Without any decision from the Fifth Circuit on this issue, the Court believes that its holding is in accord with the persuasive majority of the courts, including the Tenth Circuit Court of Appeals,[22] which have considered whether § 1821(k) preempts applicable state law.[23] While the Court recognizes that two federal district courts[24] have found that § 1821(k) preempts state simple negligence claims, the Court disagrees with the reading these courts give the statute. As discussed above, such a reading of § 1821(k) is inconsistent with the language employed in the statute and results in a judicial revision of both § 1821(k) and § 1821(d)(2)(A)(i). This Court declines the invitation to rewrite the statutes.
Finding that § 1821(k) does not preempt the FDIC's state law claims, the Court must now determine the standard of care imposed on directors and officers under Louisiana law. The Louisiana business corporation law and the Louisiana state banking law both require that officers and directors perform their duties "with that diligence, care and judgment and skill which ordinarily prudent men would exercise under similar circumstances in like positions."[25] The Fifth Circuit has held that the gross negligence standard is to be applied when judging the acts of corporate officers and directors.[26] This interpretation is consistent with general corporate law which imposes liability on bank directors and officers for any "wilful breach of trust or misapplication of the corporate funds, or for any gross neglect of or inattention to the official duties" of the directorship or office.[27]
The FDIC maintains that it has the right to proceed against the officers and directors on a simple negligence claim. The FDIC argues that the "gross negligence" standard should be equated with the "simple negligence" standard articulated in federal common law.[28] In Briggs v. Spaulding,[29] the Supreme Court stated the applicable degree of care to be applied in simple negligence under federal common law to be:
"[T]hat [degree of care] which ordinarily prudent men would exercise under similar *1366 circumstances, and in determining that the restrictions of the Statute and the usages of the business should be taken into account. What may be negligence in one case may not be want of ordinary care in another, and the question of negligence is therefore ultimately a question of fact, to be determined under all circumstances."[30]
The Court further held:
"[W]e hold that directors must exercise ordinary care and prudence in the administration of the affairs of a bank, and that this includes something more than officiating as figure-heads. They are entitled under the law to commit the banking business, as defined, to their duly authorized officers, but this does not absolve them from the duty of reasonable supervision, nor ought they be permitted to be shielded from liability because of want of knowledge of wrong-doing, if that knowledge is the result of gross inattention. ..." (Emphasis added)[31]
The importance of the issue flows not from the technical labels given to the standard of care, but to the latitude afforded to directors in their decisions and to officers in carrying out those decisions. Indeed, the Fifth Circuit has recognized that directors and officers are provided with the latitude of making some errors of judgment.[32] However, the distinction between liability and no liability arises when officers and directors are grossly negligent.
When assessing a breach of fiduciary duty under Louisiana law, the requirement is good faith and loyalty. When determining whether there is a breach of a director's or officer's duty of care, the standard under Louisiana law is gross negligence.[33] Under Louisiana law, the FDIC can bring an action for breach of care and breach of fiduciary duty. Both claims can result in director and officer liability. However, in order to establish a breach of a director's duty of care, a plaintiff is required under Louisiana law to prove gross negligence. To prove a claim for breach of fiduciary duty, the plaintiff must prove the failure of good faith and loyalty by the officers and directors.[34] There is no claim *1367 under Louisiana law based on simple negligence against officers and directors.
Therefore:
IT IS ORDERED that Defendants' Joint Partial Motion for Summary Judgment is GRANTED as to the Federal Deposit Insurance Corporation's claims for SIMPLE NEGLIGENCE.
IT IS FURTHER ORDERED that Defendants' Joint Motion for Partial Summary Judgment on the Federal Deposit Insurance Corporation's claims for breach of fiduciary duty is DENIED.
NOTES
[1] Pub.L. No. 101-73, 103 Stat. 183 (Title II codified at 12 U.S.C. §§ 1811-1831k).
[2] FDIC's Third Amended Complaint, Paragraphs 14 and 15.
[3] Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827, 833-34, 110 S.Ct. 1570, 1575, 108 L.Ed.2d 842 (1990).
[4] Moore v. Kimberly-Clark Corp., 867 F.2d 243, 244 (5th Cir.1989).
[5] Id.
[6] Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 299, 108 S.Ct. 1145, 1150, 99 L.Ed.2d 316 (1988); Fidelity Federal Savings & Loan Ass'n v. De la Cuesta, 458 U.S. 141, 152, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982); Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1293 (5th Cir. 1989).
[7] Moore, 867 F.2d at 244. (citations omitted)
[8] Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95-96, 103 S.Ct. 2890, 2898-2900, 77 L.Ed.2d 490 (1983); Pennington v. Vistron Corp., 876 F.2d 414, 417 (5th Cir.1989).
[9] Moore, 867 F.2d at 244. (citations omitted)
[10] Florida Lime and Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963); Pennington, 876 F.2d at 417.
[11] Pennington, 876 F.2d at 417 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)): "[w]hile the path of analysis is clear, we must nevertheless tread cautiously. Preemption should not be inferred from every Congressional enactment that overlaps state regulation.... [W]e are concerned only with an actual conflict between federal and state law...."
[12] Emphasis added.
[13] See Rose v. Rose, 481 U.S. 619, 107 S.Ct. 2029, 95 L.Ed.2d 599 (1987); FDIC v. Canfield, 957 F.2d 786, 787-88 (10th Cir.1992).
[14] Port Allen Marine Service, Inc. v. Chotin, 765 F.Supp. 887, 890 (M.D.La.1991) (citing West Virginia University Hospitals, Inc. v. Casey, ___ U.S. ___, 111 S.Ct. 1138, 1148, 113 L.Ed.2d 68 (1991)) (quoting Iselin v. United States, 270 U.S. 245, 250-51, 46 S.Ct. 248, 250, 70 L.Ed. 566 (1926)).
[15] The fact that Congress expressly saved the FDIC's rights under "other applicable law" is a clear indication that Congress preserved all remedies that FDIC might possess in its capacity as receiver of failed financial institutions. FIRREA only forecloses states from enacting insulating statutes which prohibit the FDIC from asserting claims which arise from the failure of a banking institution against its officers and directors.
[16] California v. A.R.C. America Corp., 490 U.S. 93, 109 S.Ct. 1661, 1667, 104 L.Ed.2d 86 (1989); Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 257-258, 104 S.Ct. 615, 626-627, 78 L.Ed.2d 443 (1984).
[17] See Norfolk Redevelopment and Housing Authority v. Chesapeake and Potomac Telephone Co. of Virginia, 464 U.S. 30, 35, 104 S.Ct. 304, 307, 78 L.Ed.2d 29 (1983), ("[t]he common law ... ought not be deemed repealed, unless the language of a statute be clear and explicit for this purpose.")
[18] See Memorandum In Support of Joint Motion for Summary Judgment regarding Standard of Care, p. 3.
[19] FDIC v. Canfield, 957 F.2d 786, 791 (10th Cir.1992).
[20] California v. A.R.C. America Corp., 490 U.S. 93, 100, 109 S.Ct. 1661, 1665, 104 L.Ed.2d 86 (1989).
[21] Senator Riegle, one of the bill's floor managers, succinctly explained both the development and need for § 1821(k)'s enactment on the Senate floor as follows:
"Under the manager's amendment, state law would be overruled only to the extent that it forbids the FDIC to bring suit based on `gross negligence' or an `intentional tort.' In determining whether or not conduct constitutes `gross negligence' or an `intentional tort,' applicable State law is to govern. This amendment would thus allow the FDIC to sue a director or officer guilty of gross negligence or willful misconduct, even if State law did not allow it. Unlike other corporations, when a bank officer or director is guilty of gross negligence, it will often be the Federal taxpayer who is harmed. It would therefore appear to be justifiable to authorize the FDIC to seek to collect some of those funds from the guilty parties."
135 Congressional Record §§ 4278-79 (April 19, 1989).
Generally, the Congressional sponsor's interpretation of legislation serves as the "authoritative guide to the statute's construction." Rice v. Rehner, 463 U.S. 713, 728-29, 103 S.Ct. 3291, 3300, 77 L.Ed.2d 961 (1983); North Haven Bd. of Educ. v. Bell, 456 U.S. 512, 526-27, 102 S.Ct. 1912, 1920, 72 L.Ed.2d 299 (1982).
[22] FDIC v. Canfield, 957 F.2d 786 (10th Cir. 1992).
[23] FDIC v. Williams, 779 F.Supp. 63 (N.D.Tex. 1991); FDIC v. Miller, et al., 781 F.Supp. 1271 (N.D.Ill.1991); FDIC v. Gus S. Mijalis, et al., No. 89-1316 (W.D.La. Nov. 1, 1991); FDIC v. Isham, et al., 777 F.Supp. 828 (D.Colo.1991); FDIC v. Black, et al., 777 F.Supp. 919 (W.D.Okla.1991); FDIC v. McSweeney, 772 F.Supp. 1154 (S.D.Cal. 1991); FDIC v. Fay, 779 F.Supp. 66 (S.D.Tex. 1991); FDIC v. Burrell, 779 F.Supp. 998 (S.D.Iowa 1991).
[24] FDIC v. Brown, No. NC 89-30G, 1991 WL 294524 (D.Utah Nov. 18, 1991); FDIC v. Swager, 773 F.Supp. 1244 (D.Minn.1991); FDIC v. Canfield, 763 F.Supp. 533 (D.Utah 1991), reversed, 957 F.2d 786 (10th Cir.1992).
The Ninth Circuit in dicta referred to 28 U.S.C. § 1821(k) as "FIRREA's heightened tort liability standard". See Home Savings Bank, F.S.B. by Resolution Trust Corp. v. Gillam, 952 F.2d 1152, 1169 (9th Cir.1991).
[25] La.R.S. 12:91 and La.R.S. 6:291.
[26] Louisiana World Exposition v. Federal Insurance Co., 858 F.2d 233, 237-238 (5th Cir.1988).
[27] 3 WILLIAM M. FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS § 990 (perm. ed. rev. vol. 1986).
[28] In their brief in opposition to the motion for partial summary judgment, the FDIC asserts that Louisiana's gross negligence standard is the same as federal common law's simple negligence action. FDIC's Memorandum in Opposition to Joint Motion for Partial Summary Judgment Regarding Standard of Care, p. 3, note 2.
[29] 141 U.S. 132, 11 S.Ct. 924, 35 L.Ed. 662 (1891).
[30] 141 U.S. at 152, 11 S.Ct. at 931.
[31] 141 U.S. at 166, 11 S.Ct. at 936.
[32] 858 F.2d at 238.
[33] The FDIC's cause of action based on negligent breach of fiduciary duty is redundant and mischaracterizes the claim sought. All breaches of fiduciary duty are per se negligent, but not all negligence results in the breach of a fiduciary duty. Assessing one's breach of fiduciary duty reflects a determination of subjective intent in the directors' and officers' dealings. With good faith as the test, the assessment focuses on whether he who is in the fiduciary position has "served himself first and his cestuis second." Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939).
Indeed, the standard of care is not the real issue in assessing whether an officer or director has violated his fiduciary duty to the financial institution. The fiduciary responsibility held by directors and officers prohibits directors and officers from putting their personal or business interests or those of others ahead of the bank's interests. OFFICE OF THE COMPTROLLER OF THE CURRENCY, THE DIRECTOR'S BOOK 57 (1987).
[34] action for breach of fiduciary duty is a personal action with a ten year prescriptive period. La.Civ.Code art. 3499. In Gerdes v. Estate of Cush, 953 F.2d 201 (5th Cir.1992), the Fifth Circuit in affirming this Court, set forth the standard of proving a breach of fiduciary claim as follows:
"`The dominant characteristic of a fiduciary relationship is the confidence reposed by one in the other and [a person] occupying such a relationship can not further his own interests and enjoy the fruits of an advantage taken of such relationship. He must make a full disclosure of all material facts surrounding the transaction that might affect the decision of his principals.'
Plaquemines Parish Commission Council v. Delta Development Co., 502 So.2d 1034, 1040 (La.1987) (quoting Anderson v. Thacher, 76 Cal.App.2d 50, 172 P.2d 533, 543 (1946). The duty of loyalty which results from the position of trust distinguishes the fiduciary relationship. A cause of action for breach of fiduciary duty requires proof of fraud, breach of trust, or an action outside the limits of the fiduciary's authority. Crabtree Investments, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 577 F.Supp. 1466 (M.D.La.1984), aff'd without opinion, Crabtree Investments v. Merrill Lynch, 738 F.2d 434 (5th Cir.1984)." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1685223/ | 163 S.W.3d 567 (2005)
Mark REYNOLDS, Appellant,
v.
Robin REYNOLDS, Respondent.
No. ED 84923.
Missouri Court of Appeals, Eastern District, Division One.
May 10, 2005.
Mark P. Reynolds, pro se.
Mary Jane Browning, Jefferson City, MO, for respondent.
*568 BOOKER T. SHAW, Judge.
Mark Reynolds, ("Father") acting pro se, appeals from the trial court's judgment awarding sanctions and attorneys' fees to Robin Reynolds ("Mother"). Father raises two points on appeal. First, Father claims the trial court erred in overruling his motion to disqualify the trial judge. Second, Father argues the trial court erred in entering judgment in Mother's favor for sanctions and attorneys' fees. We reverse and remand with instructions.
Mother and Father were divorced in 1998, and the decree awarded joint legal custody of their minor daughter to both parents, with primary physical custody awarded to Mother. Father appealed from that judgment, but this Court affirmed it in Reynolds v. Reynolds, 6 S.W.3d 183 (Mo.App. E.D.1999).
Subsequently, Father filed several post-judgment motions, including but not limited to, a motion for contempt against Mother and a motion to modify the judgment, specifically relating to the trial court's award of custody. The trial judge assigned to hear the case, the Honorable Jeffrey Schaeperkoetter, recused himself from the case sua sponte on September 26, 2002. The court minutes indicate the case was then transferred to the presiding judge of Osage County, the Honorable Gael D. Wood, who reassigned Father's case to the Honorable Robert D. Schollmeyer on October 11, 2002.
Father filed a motion to disqualify Judge Schollmeyer on March 10, 2003. Father has failed to include this motion for disqualification in the legal file. On April 1, 2003, the court minutes reflect Judge Schollmeyer ruled, "Motion to disqualify sustained and heard. Hon. John Berkemeyer requested to hear and determine case." The court minutes do not indicate the case was transferred to Presiding Judge Wood prior to reassignment as it was after Judge Schaeperkoetter recused himself.
Judge Berkemeyer presided over Father's case from April 17, 2003, through early January 2004, making several substantive rulings on Father's various pleadings. On January 9, 2004, Father filed a motion entitled "Motion to Renew All Motions Pending Before This Court that Associate Judge John B. Berkemeyer Has Ruled On," arguing Judge Schollmeyer had no authority to assign Judge Berkemeyer to his case, and as a result, Father argued Judge Berkemeyer lacked jurisdiction to rule on his motions. Father argued any rulings entered by Judge Berkemeyer are null and void also requested the case be transferred to the Missouri Supreme Court for the assignment of a new judge to hear his motions. Father asked for a hearing on these issues.
Mother filed a motion for sanctions and attorneys' fees against Father on April 15, 2004. The trial court held a hearing on Father's motions. Judge Berkemeyer denied Father's motions relating to his jurisdiction to hear the case, stating Father filed his motions out of time. The trial court granted Mother's motion for sanctions and attorneys' fees and ordered Father to pay $5775.84. Father appeals.
Mother filed a motion to dismiss Father's appeal because she alleges his brief fails to comply with Rule 84.04. This motion was taken with the case. As a pro se litigant, Father is bound by the same rules of procedure as a party represented by a licensed attorney. State ex rel. Morgan ex rel. Div. of Child Support Enforcement v. Okoye, 141 S.W.3d 410, 411 (Mo.App. W.D.2004). A pro se litigant's substantial compliance with Rule 84.04 is mandatory, thus ensuring that the reviewing court does not act as an advocate for the party by speculating on facts and arguments *569 that were not asserted. Id. While Father's points relied upon are not in compliance with Rule 84.04(d), nor does he include a standard of review with respect to each point, we are able to glean Father's legal arguments and therefore, we will review his points on appeal.[1]Willis v. Most Worshipful Prince Hall Grand Lodge of Mo. & Jurisdiction, 866 S.W.2d 875, 877 (Mo.App. E.D.1993). Mother's motion to dismiss is denied.
Father's first point on appeal is dispositive. Father's first point argues the trial court erred in overruling his motion to disqualify the trial judge and in refusing to hold an evidentiary hearing. The heart of Father's argument is that Judge Berkemeyer should have held an evidentiary hearing on Father's "Motion to Renew All Motions Pending before This Court that Associate Judge John B. Berkemeyer Has Ruled On" because the case was assigned improperly. Father argues the improper assignment denies Judge Berkemeyer jurisdiction to rule on any motions pending before him.
Rule 51.05(e) governs reassignment of a case from a disqualified judge. If the parties have not stipulated to a particular judge hearing the case, then "the disqualified judge shall notify the presiding judge: (1) If the presiding judge is not disqualified in the case, the presiding judge shall assign a judge of the circuit who is not disqualified or request [the Missouri Supreme Court] to transfer a judge." See also, Section 478.255.1, RSMo 2004.
Father relies upon Miller v. Mauzey, 917 S.W.2d 633 (Mo.App. W.D.1996) to support his position. In Miller, the trial court granted a timely filed motion for disqualification. Id. at 634. Since the trial judge was the only circuit judge in the Sixth Circuit, he assigned the case to an associate circuit judge. Id. Miller filed a motion for reconsideration of the assignment, which was denied. Id. The associate circuit court judge then sustained the respondents' motions to dismiss Miller's action. Id. Miller appealed, claiming, inter alia, the circuit court erred in assigning the case to the associate circuit judge. Id.
The Western District agreed, and found the circuit judge committed reversible error in assigning the case to the only other judge in the circuit. Id. at 635. After setting forth the proper procedure for assigning a case to another judge after disqualification relying upon Rule 51.05, the court went on to say, "[i]f the Supreme Court had intended to give a disqualified circuit court judge the power to personally assign a case to an associate circuit judge of his choosing, it would have said so." Id. Moreover, the Miller court stated, "Regardless of the number of judges in a circuit, Rule 51.05 does not explicitly permit a disqualified judge to choose which judge to assign a case to if there is more than one option." Id.
Similar to the situation in Miller, it is clear from the record before us that when Judge Schollmeyer granted Father's motion for disqualification he assigned the case to Judge Berkemeyer in violation of Rule 51.05. Judge Schollmeyer was not the presiding judge and was unable to assign the case to a judge of his choosing.
"Once an application to change the judge is properly filed, the court must grant the motion and is without jurisdiction to take any further action in the cause. Logically, *570 this would include the action of assigning the case to [another] judge." Miller, 917 S.W.2d at 635 (internal quotations omitted). As a result, we find Judge Schollmeyer was without jurisdiction to assign the case to Judge Berkemeyer. It follows that since the assignment was improper, Judge Berkemeyer was without jurisdiction to rule on any of the motions prior to this appeal, including his grant of Mother's motion for sanctions and attorneys' fees. "Because the motions ... were ruled upon by a judge without jurisdiction, we [must] declare the order ... to be null and void." Id. Father's first point is granted. Because this point is dispositive, we need not address Father's second point on appeal.
Based on the foregoing, we reverse the judgment of the trial court as being null and void for lack of jurisdiction. We remand this case to the circuit court with instructions to the presiding judge to assign a judge to hear this case in compliance with Rule 51.05(e)(1).
REVERSED AND REMANDED WITH DIRECTIONS.
GARY M. GAERTNER, SR., J., and SHERRI B. SULLIVAN, J., concur.
NOTES
[1] We also note Mother failed to file a respondent's brief in this matter. "While no penalty is prescribed for failure to file a brief, we are required to decide the case without the benefit of that party's authorities and points of view." State v. Berry, 92 S.W.3d 823, 831 n. 1 (Mo.App. S.D.2003). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1720329/ | 81 Mich. App. 715 (1978)
265 N.W.2d 802
NORTON SHORES
v.
CARR
Docket No. 77-611.
Michigan Court of Appeals.
Decided March 7, 1978.
Parmenter, Forsythe & Rude (by Steven G. Schember), for plaintiff.
Bunker & Rogoski, for defendant.
*718 Before: D.F. WALSH, P.J., and R.M. MAHER and BEASLEY, JJ.
PER CURIAM.
Defendants appeal the judgment of the trial court holding defendants' landscaping business, which constitutes a nonconforming use, to be a nuisance. The court ordered it enclosed by a fence. Defendants' junkyard business, which is also a nonconforming use, was restricted to a certain portion of the defendants' property. Finally, the trial court found that defendants' used car business another nonconforming use had been abandoned.
On July 24, 1972, plaintiffs filed a complaint charging defendants with violation of a city junkyard ordinance, a zoning ordinance, and an abandoned-vehicle ordinance, and with maintaining a public and private nuisance. Defendants own a parcel of land in Norton Shores which they purchased in 1945. Defendants deal in junk, that is, they buy and sell scrap iron, rags, batteries, used equipment and machinery. They also carry on a landscaping business for which they store top soil (black dirt), shrubbery, and other nursery items.
In 1949, Norton Shores Township, predecessor of the City of Norton Shores, adopted a junkyard resolution. At that time defendants had already acquired a vested right to continue operation of the junkyard in the same manner in which it had been conducted before adoption of the resolution.
On January 1, 1955, the township of Norton Shores adopted its first zoning ordinance which provided for the continuance of nonconforming uses and buildings. In 1962, the township amended the zoning ordinance, as a result of which the west 200 feet of defendants' lot was zoned commercial. It was stipulated that during the time immediately *719 before the adoption of the Norton Shores zoning ordinance, defendants operated heavy machinery in conducting their business.
Defendants charge that the trial court erred in failing to conclude that defendants have a vested right to continue the use of their real estate in the manner in which it was used before the adoption of the Norton Shores zoning ordinance. The restrictions imposed by the court, defendants argue, are repugnant to their vested right.
Contrary to defendants' contention, the trial court did hold that defendants' nonconforming uses could be continued as they were practiced before adoption of the Norton Shores zoning ordinance in 1955. That was not an issue at trial. All agreed defendants had a valid nonconforming use. The issue was whether defendants had unlawfully expanded their use beyond the scope that existed at the time the zoning ordinance was adopted. The judgment restricted use of the eastern 200 feet of defendants' property solely to the landscaping business; this line of demarcation was established in accordance with trial testimony which disclosed that in 1955 defendant had no other business operations except landscaping on the eastern 200 feet of their property.
"`A "nonconforming use" comprehends the physical characteristics, dimensions, or location of a structure as well as the functional use thereof or of the premises on which it is located, and is used as a generic term that includes nonconforming use of conforming structures and plots, nonconforming use of nonconforming structures and plots, and conforming use of nonconforming structures and plots.' (Footnotes omitted.) 82 Am Jur 2d, Zoning and Planning, § 178, p. 685." Long Island Court Homeowners Association v Methner, 74 Mich App 383, 387; 254 NW2d 57 (1977).
*720 Expansion of a nonconforming use is severely restricted. One of the goals of zoning is the eventual elimination of nonconforming uses, so that growth and development sought by ordinances can be achieved. Generally speaking, therefore, nonconforming uses may not expand. Fredal v Forster, 9 Mich App 215; 156 NW2d 606 (1967), Hillsdale v Hillsdale Iron & Metal Co, Inc, 358 Mich 377; 100 NW2d 467 (1960). The policy of the law is against the extension or enlargement of nonconforming uses, and zoning regulations should be strictly construed with respect to expansion.
"`[I]t is the law of Michigan that the continuation of a nonconforming use must be substantially of the same size and same essential nature as the use existing at the time of passage of a valid zoning ordinance.'" Dearden v Detroit, 70 Mich App 163, 169; 245 NW2d 700 (1976), Township of White Lake v Lustig, 10 Mich App 665, 674; 160 NW2d 353 (1968).
The nonconforming use is restricted to the area that was nonconforming at the time the ordinance was enacted. Township of Commerce v Rayberg, 5 Mich App 554; 147 NW2d 453 (1967).
In 1955, the trial court opined, the eastern 200 feet of defendants' property was not being used for a junkyard as it was 20 years later. In accordance with Michigan law on the expansion of nonconforming uses, the trial judge restricted defendants' use of the eastern 200 feet and held it could only be used for defendants' landscape business which had been in operation when the zoning ordinance was adopted. While this Court reviews equity cases de novo, it will not disturb the findings of the trial court unless it would have arrived at a different result had it been in the position of the trial court. *721 Biske v City of Troy, 381 Mich 611; 166 NW2d 453 (1969).
We cannot say we would have reached a conclusion different from that of the trial court. Defendants had a valid nonconforming use in 1955, but they had no right to expand that nonconforming use beyond its 1955 scope. The trial court acted properly in restricting the use of the eastern 200 feet of defendants' land.
Also at issue are the trial court's other rulings: (1) that defendants had abandoned their rights to deal in used cars; (2) that defendants had created a nuisance by causing black dirt dust to emanate from their property; and (3) that plaintiffs were entitled to injunctive relief from the alleged dissemination of black dirt.
Turning first to defendants' abandonment of their used car sales: the necessary elements of abandonment of a nonconforming use are intent and some act or omission on the part of the owner or holder which clearly manifests his or her voluntary decision to abandon. Rudnik v Mayers, 387 Mich 379; 196 NW2d 770 (1972). The trial court's ruling as to abandonment was not without grounds. An examination of defendants' tax returns for several years showed "no indication of used car sales operation." Nor did any witnesses at trial testify to any used car sales. On these bases the court found the used car operation had been abandoned. We cannot say that had we been sitting as the trial court we would have reached a different result. The finding was not clearly erroneous.
The trial court also held that defendants' soil farm operations on their property caused black dirt dust to blow onto the property of abutting owners, thus creating a nuisance. Defendants *722 claim this finding is repugnant to their vested right to continue their nonconforming use. But the existence of a vested right to a prior nonconforming use does not preclude a court from finding that the nonconforming use constitutes a nuisance. Dusdal v City of Warren, 387 Mich 354; 196 NW2d 778 (1972).
Nuisances may be private or public. Awad v McColgan, 357 Mich 386; 98 NW2d 571 (1959). The nuisance at issue here is both: a civil wrong based on a disturbance of defendants' neighbors' rights in their land and an interference with the rights of the community at large. Williams v Primary School District #3, Green Township, 3 Mich App 468; 142 NW2d 894 (1966). A nuisance in fact must be distinguished from a nuisance at law, also called a nuisance per se. A nuisance in fact is that which becomes a nuisance by reason of circumstances and surroundings. A nuisance per se is an act, occupation or structure which is a nuisance at all times and under any circumstances, regardless of location or surroundings. Buddy v Department of Natural Resources, 59 Mich App 598; 229 NW2d 865 (1975), Marshall v Consumers Power Co, 65 Mich App 237; 237 NW2d 266 (1975).
Changing the nature and size of a nonconforming use constitutes an extension of a prior nonconforming use and is therefore a nuisance. Township of White Lake v Lustig, supra. In the instant case, the trial judge concluded that defendants' nonconforming use had been expanded. Such expansion is a nuisance per se. Township of White Lake v Lustig, supra.
The trial testimony also supports a finding of nuisance in fact. Plaintiffs presented credible evidence sufficient to prompt a court to conclude that the black dirt dust emanating from defendants' *723 property and being carried to neighbors properties was a nuisance in fact. Again, we are not able to say nor have defendants persuaded us that the trial court was clearly erroneous.
Defendants also contend that plaintiffs were estopped from seeking injunctive relief and that the trial court therefore erred in granting it. Reliance is placed on Mackenzie v Frank M Pauli Co, 207 Mich 456; 174 NW 161 (1919). Defendants' reliance is misplaced. The Court in Mackenzie, in fact, found that a nuisance existed but limited the scope of the injunction to the offensive features of defendants' business. The Court held that expansion of defendants' business, regardless of whether it was in the area before the plaintiffs were, constituted a nuisance. The plaintiffs in Mackenzie were not estopped from seeking injunctive relief, as defendants here contend. Mackenzie, if anything, supports the plaintiffs' position.
Defendants present a final charge of error. They claim the trial court was unwarranted in requiring defendants to build a fence around their property and in obliging them to acquire a junkyard license. Defendants argue that the judgment precludes them from using their land to the same extent as others owning land and thereby denies them equal protection.
The issue of equal protection was not raised in the pleadings nor at trial. Pursuant to GCR 1963, 801, these issues cannot be heard on appeal. The Court of Appeals is limited on review to issues decided by the trial court. Hernandez v Consumers Power Co, 51 Mich App 288; 214 NW2d 846 (1974), Behlen Manufacturing Co v Andries-Butler, Inc, 52 Mich App 317; 217 NW2d 125 (1974).
Defendants' argument that the trial court had no power to require them to build a fence is *724 without merit. An equity court has the power to enjoin a nuisance. Township of White Lake v Lustig, supra. It is the policy of our courts, however, to tailor the remedy to the problem, to abate the nuisance without completely destroying the business in which the nuisance originates. Hillsdale v Hillsdale Iron & Metal Company, Inc, supra, Mackenzie v Frank M Pauli Co, supra. Equity will not abate a lawful continuing business as a nuisance when it is possible to eliminate objectionable features which infringe upon the ordinary rights of others. Kurrle v Walker, 56 Mich App 406; 224 NW2d 99 (1974). The remedy fashioned by the trial court was tailored to fit the particular nuisance at issue. The fence will both screen the junkyard from view and help prevent the blowing of black dirt and dust.
The contention that the court had no power to require defendants to obtain a junkyard license is also without merit. Defendants claim that because they operated the junkyard as a nonconforming use before the licensing ordinance was passed they cannot be required to obtain a license. The defendants thereby equate a regulatory ordinance with a zoning ordinance.
While a preexisting nonconforming use may exist despite a zoning ordinance, a regulatory ordinance envisions no similar exceptions. A use, albeit nonconforming, is still subject to regulatory ordinances. Casco Township v Brame Trucking Co, Inc, 34 Mich App 466; 191 NW2d 506 (1971). Neither the defendants' original nonconforming use, nor their expansion of it, excuses them from the licensing ordinance. A regulatory ordinance is not encumbered by a nonconforming use provision.
In fashioning the remedy in this case, the court was mindful of the interests of both sides: the *725 nuisance is abated and yet the defendants are not completely foreclosed from operating their businesses. The remedy as fashioned suitably meets the needs of each party without destroying either side's rights.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1814205/ | 691 F.Supp. 642 (1988)
GUND, INC., Plaintiff,
v.
SMILE INTERNATIONAL, INC., Defendant.
No. 88 C 2367 (EHN).
United States District Court, E.D. New York.
August 22, 1988.
Gottlieb, Rackman & Reisman, P.C., New York City (Jane Shay Wald and George Gottlieb, of counsel), for plaintiff.
Ruskin, Schlissel, Moscou, Evans & Faltischek, P.C., Mineola, N.Y. (Robert L. Sherman, of counsel), for defendant.
MEMORANDUM AND ORDER
NICKERSON, District Judge.
Plaintiff brought this action claiming that defendant had infringed plaintiff's United States copyright in a stuffed plush *643 toy dog called "Muttsy." Plaintiff has moved for a preliminary injunction.
Plaintiff designs and manufactures stuffed toys, advertising them extensively, and selling them in so-called upscale retailers throughout the United States. Plaintiff received the copyright for Muttsy on February 14, 1986.
Muttsy is referred to by both attorneys as a floppy plush dog toy, none of its parts being very rigid. It "flops" on the floor, much as puppies often do, and rests with its nose touching the ground, its limp front legs stretched out in front, and its limp rear legs splayed out almost flat in back. It has a distinctly sway back, the middle being considerably lower than both the rump and the front shoulders. Indeed, the top of the rump appears to be slightly above the level of the head. The face is generally oval. The ears, which have a straight bottom edge, are relatively large and hang down. The eyes, comprised of two colors, are largely obscured by the light brown fur. The nose has two indented nostrils.
Defendant's product (the Smile dog) is a somewhat different floppy plush dog. The chief immediately observable difference is in the face and head, which defendant says it copied from a previous stuffed dog of its own design and manufacture. The dog has a conical muzzle, and its head and face are relatively upright and erect. The top of the head is higher than the top of the rump. The chin but not the nose rests on the ground. The ears hang down and have a rounded edge. The nose is without nostrils.
The configurations of the tails of the two dogs are different. That of Muttsy is more limp and rests on the ground. That of the Smile dog starts higher on the rump, has a slight upward turn, and does not rest on the ground. The eyes of the Smile dog are of one dark color and have plastic eyelids; Muttsy has none.
Though both dogs have a brown fur, that of the Smile dog is darker and appears to be of uneven length on the toy. Muttsy has softer and finer fur, apparently of uniform length throughout. Muttsy has a more winsome appearance and a softer feel.
Plaintiff now seeks preliminarily to enjoin defendant from selling the Smile dog. The court assumes that plaintiff's copyright is valid.
The Constitution in Article 1, Section 8, Clause 8, empowers Congress to "promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The Constitution thus authorizes Congress to grant monopolies in the form of patents and copyrights to encourage authors and inventors to invest their efforts and to use their talents in science and the useful arts so as "to advance public welfare." Mazer v. Stein, 347 U.S. 201, 219, 74 S.Ct. 460, 471, 98 L.Ed. 630 (1954).
In the exercise of that power Congress has provided that copyright protection "subsists" in "original works of authorship fixed in any tangible medium of expression," including, among others, "pictorial, graphic, and sculptural works." 17 U.S.C. § 102(a) (1977). Congress limited this protection by providing that "[i]n no case does copyright protection for an original work of authorship extend to any idea, ... [or] concept ... regardless of the form in which it is described, explained, illustrated or embodied in such work." 17 U.S.C. § 102(b).
The duration of the copyright monopoly is lengthy, far longer than that accorded patents. In a work created by an individual after January 1, 1978 the copyright endures for the author's life plus fifty years. 17 U.S.C. § 302(a). In "a work made for hire," such as plaintiff's product, the copyright lasts for seventy-five years from the year of the first publication or one hundred years from the year of its creation, whichever expires first. 17 U.S.C. § 302(c). The copyright on plaintiff's work, published in February 1986, will not expire until the year 2061.
To receive a copyright the work must be "original" with the author. There need not be "invention in the sense of striking uniqueness, ingeniousness, or novelty, *644 since the Constitution differentiates `authors' and their `writings' from `inventors' and their `discoveries.'" L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486, 490 (2d Cir.), cert. denied, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976). But there must be a "`minimal element of creativity over and above the requirement of independent effort.'" Id. (quoting I M. Nimmer, The Law of Copyright § 10.2, at 36 (1975)). Mr. Justice Holmes put it this way, concurring in White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1, 19, 28 S.Ct. 319, 324, 52 L.Ed. 655 (1908):
The ground of this extraordinary right [of copyright] is that the person to whom it is given has invented some new collocation of visible or audible points, of lines, colors, sounds, or words. The restraint is directed against reproducing this collocation, although, but for the invention and the statute, anyone would be free to combine the contents of the dictionary, the elements of the spectrum, or the notes of the gamut in any way that he had the wit to devise.
Congress granted the monopoly over such a collocation in order to encourage authors to create. However, Congress also recognized that there were countervailing interests at stake. Any monopoly tends to burden competitors and therefore the public. Indeed, if a copyright monopoly were to stifle independent creation it would raise First Amendment concerns. See Goldwag, Copyright Infringement and the First Amendment, 29 Copyright Law Symposium 1 (1983), 79 Columbia Law Rev. 320 (1979). By providing in 17 U.S.C. § 102(b) what the courts had previously stated, see cases cited in Warner Bros. v. American Broadcasting Cos., 654 F.2d 204, 208 (2d Cir.1981), namely, that an author may claim copyright protection only in the "expression" of an idea and not in the "idea" itself, Congress appears to have decided, among other things, that the courts should construe the copyright monopoly so as not to trench on the First Amendment interest in "free trade in ideas."
The statutory language is, of course, hardly precise. A copyright protects the holder only against unauthorized copying. Mazer v. Stein, supra, at 218, 74 S.Ct. at 471. Yet it is impossible to "copy" an "idea," which is any conception existing in the mind as a result of mental understanding, awareness, or activity. See, e.g., Random House Dictionary of the English Language, Unabridged, 1969 ed. at 706. One cannot "copy" a conception in someone's mind. One can only copy the "expression" of the conception. Moreover, every minute detail of a work is the product of author's "idea." Every "expression" therefore presupposes an "idea."
What must be meant by the provision denying protection to "ideas" is that the law will not grant an author a monopoly over the unparticularized expression of an idea at such a level of abstraction or generality as unduly to inhibit independent creation by others. Judge Learned Hand illustrates the point in considering whether one play infringes the copyright of another.
If Twelfth Night were copyrighted, it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe, but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household, or a vain and foppish steward who became amorous of his mistress. These would be no more than Shakespeare's "ideas" in the play, as little capable of monopoly as Einstein's Doctrine of Relativity, or Darwin's theory of the Origin of Species. It follows that the less developed the characters, the less they can be copyrighted; that is the penalty an author must bear for marking them too indistinctly.
Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir.1930), cert. denied, 282 U.S. 902, 51 S.Ct. 216, 75 L.Ed. 795 (1931).
Neither the statute nor the judicial opinions lay down criteria as to when an "idea" is so abstract or general as to preclude protection of its unparticularized expression. The decided cases depend so much on individual circumstances that they are of limited use as precedents. In fact Judge *645 Learned Hand considered that decisions must "inevitably be ad hoc." Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir.1960). The best a court can do is decide in an individual case whether the detriments inherent in the monopoly are outweighed by the encouragement to an author's creativity.
Of course to the degree that the similarity between a copyrighted work and an alleged infringing work inheres only in the general ideas expressed, the similarities are not infringing. Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1507 (9th Cir. 1987); Frybarger v. Int'l Business Machs. Corp., 812 F.2d 525, 529 (9th Cir.1987). It follows that similarity in expression is non-infringing to the extent the nature of the creation makes similarity necessary, see McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 320 (9th Cir.1987), and that "indispensable expression" of a generalized idea may be protected only against virtually identical copying. Rachel, supra, at 1507; Frybarger, supra, at 530. As the Court of Appeals for the Ninth Circuit recognized in Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 742 (9th Cir.1971), when an abstract idea and its expression are "inseparable," copying the expression will not be barred, since to protect the expression would confer a monopoly of the idea upon the copyright owner.
The "ideas" that courts have deemed so general as to make their unparticularized expression noninfringing include, for example, jeweled bee pins, see Herbert Rosenthal Jewelry Corp. v. Kalpakian, supra, synthetic animal heads, Rachel v. Banana Republic, Inc., supra, mouse trap video games, Frybarger v. Int'l Business Machs. Corp., supra, and toy games and dolls, Durham Indus. Inc. v. Tomy Corp., 630 F.2d 905, 914-18 (2d Cir.1980).
None of these decisions is precisely in point here. But the "idea" expressed in Muttsy is of like generality. The idea of a dog is certainly general. So too is the idea of a more or less realistic, non-rigid stuffed toy dog that "flops" down on its stomach. It is a common sight to see puppies act in this way. The question therefore is whether defendant has copied features of Muttsy unnecessary to express the idea of such a "floppy" dog. This court concludes that defendant has not and that there has been no copying of an expression protected by the copyright.
There are similarities between the two stuffed dogs. But the features that might cause an ordinary observer to regard the aesthetic appeal as similar, if not quite the same, are the very features so generalized as not to be the subject of copyright protection.
This is not like a case of comparing patterns on two textiles. Cf. Peter Pan Fabrics, Inc. v. Martin Weiner Corp., supra. There are a limited number of ways of creating a more or less realistic "floppy" dog toy. In this court's judgment plaintiff is seeking "a larger private preserve than Congress intended to be set aside in the public market without a patent." See Herbert Rosenthal Jewelry Corp. v. Kalpakian, supra, 446 F.2d at 742.
Plaintiff cites two district court opinions granting it injunctive relief as to copyrights on a stuffed lion, Gund Inc. v. Swank Inc., 673 F.Supp. 1233 (S.D.N.Y. 1987), and a stuffed bear, Gund Inc. v. Fortunoff Inc., 3 U.S.P.Q.2d 1556 (S.D.N. Y.1986) [available on WESTLAW, 1986 WL 14912]. Those opinions do not describe the degree to which the features of the toys at issue coincided. In any event to the extent the reasoning of those cases differs from that in this opinion this court respectfully declines to follow them.
The above consists of the court's findings of fact and conclusions of law. The motion for a preliminary injunction is denied. So ordered. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2132682/ | 190 Cal.App.3d 1627 (1987)
236 Cal. Rptr. 124
RUBEN J. ROSE et al., Plaintiffs and Appellants,
v.
CITY OF COALINGA, Defendant and Respondent.
Docket No. F006329.
Court of Appeals of California, Fifth District.
April 10, 1987.
*1629 COUNSEL
Miles, Sears & Eanni and Donald R. Franson, Jr., for Plaintiffs and Appellants.
Lerrigo, Snyder, Nibler, Moss & Berryman and Catherine Adams Bennett for Defendant and Respondent.
OPINION
BEST, Acting P.J.
Ruben J. Rose and his wife, Pauline V. Rose (appellants) appeal from a summary judgment entered in favor of the City of Coalinga (City) in this action for inverse condemnation filed as a result of the destruction of appellants' building by the City following the Coalinga earthquake which occurred on May 2, 1983.
The central issues are: (1) May an action in inverse condemnation be maintained, or is appellants' sole remedy in an action in tort? (2) If an action in inverse condemnation can be maintained, are there conflicting inferences that may be drawn by a trier of fact rendering the granting of a summary judgment improper?
*1630 FACTS[1]
The material facts established by declarations filed in support and opposition to the motion for summary judgment and by excerpts from depositions are not in dispute.
Appellants were the owners of a commercial building located at 155 East Elm Avenue, in the City of Coalinga, when the May 2, 1983, earthquake occurred. They were in Texas at the time of the earthquake and returned to Coalinga May 6, 1983. Because the area surrounding their building was fenced off from the public, they were unable to visit their building when they arrived. The next day, however, Saturday, May 7, 1983, appellants went to the Coalinga City Hall to talk with Alan Jacobsen, the public works director, or Glen Marcussen, the city manager, to obtain permission to inspect any damage that might have occurred to their building. Those gentlemen were not available. On Monday, May 9, 1983, appellants again attempted to talk with Marcussen and Jacobsen, but again were informed that neither was available. Later that day, however, appellants were able to gain admittance into the restricted area, along with a local contractor. After walking through and inspecting the building, the contractor and appellants agreed that the damage to the building was not severe. The contractor recommended that appellants obtain an architect's report to support their claim that the building could be repaired.
On May 10, 1983, a meeting of downtown property owners was held at the Coalinga City Hall. The city attorney presided over the meeting and explained to all present that the majority of the downtown area (where appellants' building was located) was going to be demolished due to earthquake damage. Several exceptions were listed, but appellants' building was not among the exceptions.
The city attorney said the buildings had to come down for the health, safety, and welfare of the City. He explained that if the landowners refused to give the City permission to demolish their buildings, then a court would order the destruction, and the property owner would pay the entire demolition cost. The city attorney stated that if consent were given, the landowner would bear no demolition cost.
At the end of this meeting, typewritten "releases"[2] were handed to the *1631 property owners for their signatures. The owners were told they had 48 hours to sign the release or court proceedings would be commenced to carry out the demolition of their buildings.
On Wednesday, May 11, 1983, an architect examined appellants' building at appellants' request to determine whether the building was repairable. Following the inspection, the architect told appellants that their building could be repaired for less than the cost of rebuilding if it was torn down, and he would outline his final conclusions in a letter.
During the afternoon of May 11, 1983, appellants went to the city hall and obtained a copy of a structural safety inspection report on their building prepared by the state Office of Emergency Services. After reading this report, appellants again attempted to talk with Jacobsen and Marcussen about it. Again, neither Jacobsen nor Marcussen was available.
The Office of Emergency Services structural safety report had been completed and submitted to the City on May 9, 1983; it concluded there was "no hazard found" in appellants' building. This report was prepared by two licensed structural engineers who both later testified in depositions that appellants' building was repairable and should not have been demolished.
On Friday, May 13, 1983, appellants received a copy of their architect's May 11, 1983, report in the mail. The report concluded that appellants' "building could be remodeled and brought to present-day codes and standards." Appellants made several copies of this report and then went to the Coalinga City Hall to talk with Jacobsen about the conclusions in the report. Jacobsen was in his office, and, after receiving the report, he nevertheless told appellants that it would "make no difference, all of the buildings are coming down." Appellants were very upset at Jacobsen's decision and were adamant in expressing their belief that their building was repairable and that they did not want it demolished. Jacobsen again explained that the decision had been made, it was final, and appellants' building was to be demolished.
Later that day, appellants signed the consent form allowing the City to demolish their building. They did so only because Jacobsen had told them that the decision was final and that they had no alternative.
On Friday evening, May 13, 1983, another downtown property owners' meeting was held. Marcussen presided over the meeting and put up a map of the downtown area showing which buildings were to be demolished. The *1632 city attorney again explained to the group that if the releases were not signed and returned, the buildings would be torn down pursuant to court order, with the property owner bearing the expense. Appellants turned in their signed release at this meeting.
Following the May 13, 1983, meeting, appellants made several more attempts to talk with Jacobsen and Marcussen to convince them that their building need not be torn down. However, each time they went to the city hall, they were informed that neither Jacobsen nor Marcussen was available. The demolition of the downtown buildings began about June 6, 1983. Appellants were never informed by city personnel of the actual date their building was to be destroyed. On June 29, 1983, appellants received a telephone call from Jacobsen's office advising them that their building would be destroyed in two hours; it was demolished that day.
DISCUSSION
(1a) Essentially, the City takes the position that, assuming the City's decision to demolish appellants' building was wrongful, erroneous and unnecessary, as a matter of law appellants' sole remedy was by way of an action in tort; since appellants did not file a claim pursuant to the California Tort Claims Act (see Gov. Code, § 905 et seq.), no action in tort could be maintained.[3]
Though somewhat ambiguous, it appears from the trial court's memorandum of decision that the court agreed with the City, stating in part: "Assuming these facts [that no emergency existed and the building was in fact structurally sound] to be true, there was no taking by the City or use by the City of the Plaintiffs' property. Thus, there was no condemnation or inverse condemnation. This is not properly an inverse condemnation situation, but is an emergency exercise of the City's police power. Knapp v. City of Newport Beach (1960) 186 Cal. App.2d 669, Holtz v. Superior Court (1970) 3 Cal.3d 296. Here there was certainly no formal intent by the City to condemn. See Friedman v. City of Fairfax, (1978) 81 Cal. App.3d 667, 677.
"Had no emergency in fact existed here, as Plaintiffs now appear to contend, the City's action would have been tortious, perhaps even malicious....
*1633 "... Yet, there is no evidence before the Court that this demolition was performed for any reason other than to protect the health, safety and welfare of Coalinga citizens following a devastating earthquake. Furthermore, there is no evidence whatsoever that the demolition was done by the City for any kind of use. There is no evidence before the Court that the City intended to take Plaintiffs' property."
Both the City and the trial court are in error.
Article I, section 19 of the California Constitution provides that "Private property may be taken or damaged for public use only when just compensation ... has first been paid to ... the owner." This provision is self-executing. (Rose v. State of California (1942) 19 Cal.2d 713, 720 [123 P.2d 505].)
(2) When private property is wrongfully damaged or destroyed in the course of governmental action and the government has not first undertaken procedures to guarantee due process to the owner, such as an action in eminent domain or proceedings to declare a condition a nuisance, then, absent an emergency giving rise to the proper exercise of the police power, an action in inverse condemnation by the owner against the governmental agency will lie to establish the damages suffered by the owner. (Holtz v. Superior Court (1970) 3 Cal.3d 296, 301-303 [90 Cal. Rptr. 345, 475 P.2d 441]; Breidert v. Southern Pacific Company (1964) 61 Cal.2d 659, 663, fn. 1 [39 Cal. Rptr. 903, 394 P.2d 719]; Friedman v. City of Los Angeles (1975) 52 Cal. App.3d 317, 321-322 [125 Cal. Rptr. 93]; Leppo v. City of Petaluma (1971) 20 Cal. App.3d 711 [97 Cal. Rptr. 840], review den.; Van Alstyne, Cal. Government Tort Liability Practice (Cont.Ed.Bar 1980) § 2.10, pp. 41-43, Supp. § 2.10, pp. 8-9.)
An action in inverse condemnation arises directly from the constitutional provision (art. I, § 19) and is independent of any right to sue under traditional tort theories. (Friedman v. City of Los Angeles, supra, 52 Cal. App.3d at p. 321; Albers v. County of Los Angeles (1965) 62 Cal.2d 250, 260 [42 Cal. Rptr. 89, 398 P.2d 129].) The right to sue in inverse condemnation is "fundamentally rooted" in the Constitution, and the extent of a public entity's liability is fixed by the Constitution and not by rules of statutory or common law rights and responsibilities between private parties. (Holtz v. Superior Court, supra, 3 Cal.3d at pp. 301-303.)
Most inverse condemnation actions arise out of unintentional or negligent damage to an owner's property or property interests arising out of the construction of public works. For example: see Rose v. State of California, *1634 supra, 19 Cal.2d 713 abutter's right to ingress and egress to and from the public street damaged by improvement to the roadway; House v. L.A. County Flood Control Dist. (1944) 25 Cal.2d 384 [153 P.2d 950] flood damages to owner's property caused by negligent planning and construction of a bank or wall on a flood control project; Aetna Life & Casualty Co. v. City of Los Angeles (1985) 170 Cal. App.3d 865 [216 Cal. Rptr. 831] damages to homes resulting from a brush fire caused by sparks from City of Los Angeles electrical transmission lines.
(3) The second situation authorizing an action in inverse condemnation is where a governmental body, in the exercise of its police power to protect the public health, safety and welfare, intentionally destroys an owner's property in the absence of an emergency and compelling necessity and without according to the owner due process. As House v. L.A. County Flood Control Dist., supra, 25 Cal.2d 384, 391, explains: "Unquestionably, under the pressure of public necessity and to avert impending peril, the legitimate exercise of the police power often works not only avoidable damage but destruction of property without calling for compensation. Instances of this character are the demolition of all or parts of buildings to prevent the spread of conflagration, or the destruction of diseased animals, of rotten fruit, or infected trees where life or health is jeopardized. In such cases calling for immediate action the emergency constitutes full justification for the measures taken to control the menacing condition, and private interests must be held wholly subservient to the right of the state to proceed in such manner as it deems appropriate for the protection of the public health or safety. (18 Am.Jur. 778; 29 C.J.S. 784.)"
Quoting from Archer v. City of Los Angeles (1941) 19 Cal.2d 19, 23-24 [119 P.2d 1], the House court further instructs: "`The state or its subdivisions may take or damage private property without compensation if such action is essential to safeguard public health, safety or morals. [Citing authorities.] In certain circumstances, however, the taking or damaging of private property for such a purpose is not prompted by so great a necessity as to be justified without proper compensation to the owner. [Citing authorities.]' (Italics added.) Thus there is recognized the incontestable proposition that the exercise of the police power, though an essential attribute of sovereignty for the public welfare and arbitrary in its nature, cannot extend beyond the necessities of the case and be made a cloak to destroy constitutional rights as to the inviolateness of private property." (House v. L.A. County Flood Control Dist., supra, 25 Cal.2d at pp. 388-389; see also Friedman v. City of Los Angeles, supra, 52 Cal. App.3d 317, 321; 1 Nichols, Law of Eminent Domain (3d rev. ed. 1975) § 1.42[15], pp. X-XXX-X-XXX.)
*1635 Leppo v. City of Petaluma, supra, 20 Cal. App.3d 711 is in point. The city council, by resolution, determined that plaintiff's building was unsafe for occupancy, declared it a public nuisance and proceeded to destroy it without a judicial determination that the building constituted a nuisance. The plaintiff owner disputed the city's determination. In this inverse condemnation action the court held that the burden of proving that the building was an immediate hazard was on the city and awarded damages to the owner. The appellate court affirmed, holding that the city had not met its burden of proving that the building was a nuisance and constituted an immediate hazard and danger to the public at the time of the destruction. The court concluded: "We conclude that in emergency situations the city may act summarily to abate a nuisance, but in such case the city must be prepared to establish by a preponderance of evidence that an emergency actually existed." (Id. at p. 719.)
(1b) Contrary to the trial court's memorandum of decision, these principles apply whether the governmental subdivision intends to exercise the power of eminent domain or actually takes possession of the property destroyed or damaged. All the appellants must show is that "`"... the damage resulted from an exercise of governmental power while seeking to promote `the general interest in its relation to any legitimate object of government.'"'" (Baker v. Burbank-Glendale-Pasadena Airport Authority (1985) 39 Cal.3d 862, 867 [218 Cal. Rptr. 293, 705 P.2d 866]; see also County of Los Angeles v. Anthony (1964) 224 Cal. App.2d 103, 106 [36 Cal. Rptr. 308]; Frustuck v. City of Fairfax (1963) 212 Cal. App.2d 345, 364 [28 Cal. Rptr. 357].)
(4) The City's contention that appellants waived any right to bring an action against the City by their failure to take legal action to prohibit the demolition of their building prior to its actual date of destruction has been rejected in Leppo v. City of Petaluma, supra, 20 Cal. App.3d 711, 716-717. We agree with Leppo.
(5) Because this is an appeal from a summary judgment granted to the City, to obtain a reversal appellants need only establish that a triable issue of fact exists. (Code Civ. Proc., § 437c; Zeilman v. County of Kern (1985) 168 Cal. App.3d 1174, 1178-1179 [214 Cal. Rptr. 746].) From the facts related, it is apparent that questions of fact exist for resolution by a trier of fact in at least two respects. First, conflicting inferences may be drawn as to whether there was a true emergency caused by the subject building being an imminent hazard to the public's health and safety, justifying its destruction. Plaintiffs' contractor, architect and the state Office of Emergency Planning concluded the building was not a hazard. Further, the property was fenced off, and the City waited 57 days before the building was destroyed.
*1636 Secondly, there is a triable issue as to whether appellants voluntarily consented to the destruction of their building by reason of the execution of the City's consent form. In this regard, there are factual questions regarding whether in signing the form appellants acted freely and voluntarily or under the influence of duress and misrepresentation which afforded appellants no reasonable alternative.
For the foregoing reasons, the judgment must be reversed.
The judgment is reversed. Appellants to have their costs on appeal.
Ballantyne, J., and Harris, J.[*], concurred.
A petition for a rehearing was denied May 6, 1987, and respondent's petition for review by the Supreme Court was denied June 24, 1987.
NOTES
[1] This summary of facts is taken from appellants' brief as the City has stated in its brief, "For the purposes of this proceeding [City] will agree to appellants' statement of facts."
[2] These releases essentially provided that the owners' "consent to the demolition of [their] building ... [at] no cost to the [owners], ... [and] further agree to hold harmless the City ... from any consequences of [the] demolition."
[3] No claim is required as a prerequisite to an action in inverse condemnation. (Gov. Code, § 905.1.)
[*] Assigned by the Acting Chairperson of the Judicial Council. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1129865/ | 457 So. 2d 667 (1984)
TEXAS BANK OF BEAUMONT
v.
Kazem Michel BOZORG.
No. 84-C-0508.
Supreme Court of Louisiana.
October 15, 1984.
Rehearing Denied November 15, 1984.
*669 Jerome K. Lopsich, Max Nathan, Jr., Sessions, Fishman, Rosen, Boisfontaine & Nathan, New Orleans, Richard T. Regan, Francipane, Regan & St. Peé, Metairie, for intervenor-applicant.
Thomas G. Donelon, Kenner, for plaintiff.
Kazem Michel Bozorg, pro se.
LEMMON, Justice.
This case involves the ranking of two collateral mortgages executed by Kazem Bozorg, one of which was held by Texas Bank of Beaumont (TBB), the foreclosing creditor, and the other by Massey-Ferguson, Inc. (MFI), who intervened in the executory proceedings. Several important issues are presented regarding the rights to ranking under La.C.C. Art. 3158 when the holder of the collateral mortgage note is not the original pledgee.
I.
On August 12, 1975, Bozorg executed a collateral mortgage note and mortgage in the amount of $200,000, which was the *670 mortgage on which TBB eventually foreclosed. Bozorg contemporaneously executed a $200,000 hand note, and he pledged the collateral mortgage note to First Metropolitan Bank of Jefferson Parish (FMB) to secure the indebtedness represented by the hand note. The mortgage was duly recorded.
On September 11, 1978, Bozorg executed another collateral mortgage note and mortgage, this time in the amount of $344,406.59. He pledged that note the same day to MFI to secure the payment of a hand note in the same amount. In this act of mortgage, Bozorg committed himself not to increase the indebtedness secured by the August 12, 1975 collateral mortgage and instructed FMB not to increase the indebtedness (which had been reduced to $96,000).[1] The mortgage was duly recorded.
On January 4, 1980, by notarial act and for the stated consideration of $88,025.34, FMB transferred and assigned to TBB "all its rights, title, interest, priority, and privilege in connection with a certain collateral mortgage note, dated August 12, 1975, in the principal sum of TWO HUNDRED THOUSAND AND NO/100 ($200,000.00) DOLLARS, payable on demand to the order of Bearer and signed by Kazem Bozorg; and a collateral mortgage by act before Robert J. Skinner, Notary Public, on August 12, 1975, mortgaging in favor of any person, firm, or corporation the following described real estate...." Bozorg's balance then due on the $200,000 note was $88,025.34, including principal and interest.
On February 4, 1980, Bozorg executed a hand note in the amount of $200,000 and pledged the August 12, 1975 collateral mortgage note to TBB to secure the hand note.
TBB filed these executory proceedings on February 11, 1981, alleging that the $200,000 note of February 4, 1980 was in default and seeking to enforce the August 12, 1975 mortgage by having the mortgaged property seized and sold.[2] MFI intervened, seeking to have its September 11, 1978 mortgage recognized and ranked as superior to TBB's mortgage.
The trial court rendered judgment in favor of MFI, finding that TBB had paid off and extinguished the original debt and therefore was not entitled to retroactive ranking under La.C.C. Art. 3158. The court emphasized that TBB's suit was not on the original hand note given in 1975, but on the new note given to TBB on February 4, 1980.
The court of appeal reversed, holding that TBB was entitled to retroactive ranking based on the 1975 collateral mortgage. 444 So. 2d 698 (La.App. 5th Cir.1984). The court concluded that FMB had assigned the entire collateral mortgage package, including the hand note, to TBB and that TBB had proved compliance with the requirements for retroactive ranking for "other obligations thereafter arising" under Article 3158, as interpreted in New Orleans Silversmiths, Inc. v. Toups, 261 So. 2d 252 (La.App. 4th Cir.1972), cert. den. 262 La. 309, 263 So. 2d 47. We granted certiorari. 449 So. 2d 1342 (La.1984). We now reverse in part, concluding that TBB established by a preponderance of the evidence that the *671 January, 1980 transaction was at least a payment with subrogation which preserved the 1975 collateral mortgage ranking as to Bozorg's then-existing principal obligation, but failed to establish that the parties agreed in the 1975 contract of pledge that the pledge was intended to secure other of Bozorg's obligations which arose after the date of the 1975 contract of pledge.
II.
The collateral mortgage is a form of conventional mortgage developed by Louisiana practitioners.[3] This mortgage does not directly secure an existing debt, but is designed to create a mortgage note for a fictitious debt that can be pledged as collateral security for a real debt. Because the mortgagor, after executing the collateral mortgage and the collateral mortgage note, pledges the collateral mortgage note as security for a debt, usually represented by a separate hand note, the collateral mortgage scheme combines the security devices of pledge and mortgage.[4] See Nathan and Marshall, The Collateral Mortgage, 33 La.L.Rev. 497, 498 (1977).
In 1952, the Legislature amended La.C.C. Art. 3158 to provide in pertinent part:
"[I]t is further provided that whenever a pledge of any instrument or item of the kind listed in this article is made to secure a particular loan or debt, or to secure advances to be made up to a certain amount, and, if so desired or provided, to secure any other obligations or liabilities of the pledger to the pledgee, then existing or thereafter arising, up to the limit of the pledge, and the pledge instrument or item remains and has remained in the hands of the pledgee, the instrument or item may remain in pledge to the pledgee or, without withdrawal from the hands of the pledgee, be repledged to the pledgee to secure at any time any renewal or renewals of the original loan or any part thereof or any new or additional loans, even though the original loan has been reduced or paid, up to the total limit which it was agreed should be secured by the pledge, and, if so desired or provided, to secure any other obligations or liabilities of the pledger to the pledgee, then existing or thereafter arising, up to the limit of the pledge, without any added notification or other formality, and the pledge shall be valid as well against third persons as against the pledger thereof, if made in good faith; and such renewals, additional loans and advances or other obligations shall be secured by the collateral to the same extent as if they came into existence when the instrument or item was originally pledged and the pledge was made to secure them;"
Thus, the Legislature provided for a privilege when an instrument (such as a collateral mortgage note) is pledged (1) to secure a particular debt; (2) to secure advances to be made up to a certain amount (a pledge to secure loans of future amounts which the lender obligates himself to advance); and (3) to secure other obligations of the pledgor to the pledgee which may thereafter arise (a pledge to secure loans of amounts which the pledgee does not obligate himself to advance). The mortgage to secure a particular debt is effective against third parties from the date of recordation. The ordinary mortgage to secure future advances (such as a mortgage providing construction financing in stage payments), having retroactive effect to the time of the contract once the mortgagee has fulfilled his promise to make the advances, is also effective against third parties from the date of recordation. See La.C.C. Art. 3293. However, a mortgage to secure optional loans which may be made in the future does not take effect against third persons upon recordation, but only from the (later) *672 date that an actual debt is contracted and the mortgage note is pledged to secure that indebtedness. See Meeker v. Clinton & P.H.R.R., 2 La.Ann. 971 (1847).
The 1952 amendment to Article 3158 was designed to permit the mortgagor to pledge a collateral mortgage note to secure a particular debt, either previously existing or contracted contemporaneously with the pledge, and to secure future loans by the pledgee to the pledgor (up to the limits of the pledge). The pledge privilege has been held to be effective against third persons as to future loans (for which the collateral mortgage note is subsequently repledged) from the date of the initial contract of pledge, as long as the parties mutually agreed in the initial contract of pledge that the pledge was to secure obligations thereafter arising and the pledges were made in good faith. New Orleans Silversmiths, Inc. v. Toups, above.
In a contest involving ranking of mortgages, each claimant has the burden of proving the effective date of his mortgage as to third persons. MFI proved that its collateral mortgage became effective against third persons on September 11, 1978. Since Bozorg had pledged the August 12, 1975 collateral mortgage note to secure a particular loan of $200,000 made the same day, FMB's collateral mortgage was effective against third persons (at least as to the particular $200,000 loan) from the date of the August 12, 1975 pledge and would have ranked superior to MFI's collateral mortgage pledged on September 12, 1978, as long as the collateral mortgage note pledged to FMB remained in the hands of the pledgee. However, FMB did not retain the collateral mortgage note pledged in 1975, and this case presents two principal issues:
(1) Whether TBB proved that it succeeded to FMB's rights in the pledged collateral by virtue of the 1980 transaction; and
(2) Whether TBB proved that it was entitled to retroactive ranking, with an effective date against third persons of August 12, 1975, for the loan TBB made to Bozorg in February, 1980.
III.
As to TBB's claim to $88,025.34, MFI contends that TBB failed to prove that the transaction preserved, rather than extinguished, the principal obligation. MFI argues that TBB is only entitled to ranking on the date that the 1975 collateral mortgage note was repledged in February, 1980.
If the January 4, 1980 transaction was an assignment[5], or a payment with subrogation[6], or even a novation with reservation of the pledge privilege and mortgage[7], by FMB to TBB of Bozorg's principal obligation (represented by the hand note), then the transaction would have given TBB the rights of FMB in the pledged collateral, including the mortgage ranking from the date of the pledge to FMB, i.e., August 12, 1975. If, on the other hand, the *673 transaction was a payoff of the principal obligation without subrogation or reservation of the privilege and mortgage, then the accessory obligation under the contract of pledge was also extinguished, and TBB's mortgage ranking takes place only from the date the collateral mortgage note was repledged to secure the new obligation to TBB. See Odom v. Cherokee Homes, Inc., 165 So. 2d 855, 865 (La.App. 4th Cir.1964).
On the day of the transaction in question, FMB was the owner only of Bozorg's obligation to pay the $88,025.34 balance on the $200,000 hand note. FMB did not own the collateral mortgage note, but merely held it in pledge, since the debtor remains the proprietor of the pledge which is in the hands of the creditor only as a deposit to secure the privilege on it. La. C.C. Art. 3166. Consequently, FMB could not sell Bozorg's collateral mortgage note which it did not own. FMB could, however, sell Bozorg's principal obligation and could accept payment with subrogation of its rights in the collateral mortgage note.
TBB contends that it did indeed buy Bozorg's principal obligation to FMB represented by the hand note. There is no evidence that the existing principal obligation evidenced by the hand note was ever assigned to TBB. If the hand note was a bearer note, it could have been negotiated merely by delivery. However, since TBB concedes that the hand note was not part of the act of assignment and since TBB otherwise failed to produce the hand note or to present testimony that it was a bearer note, there is no evidence that the hand note was a bearer note.[8] TBB also failed to explain the nonproduction of the hand note and failed to call any of its officers or representatives who were involved in the transaction. The only evidence presented by TBB as to the 1975 hand note was a bank officer from FMB who merely testified that the hand note was no longer in his files. He could not remember what happened to the hand note, and he could not say that the hand note was endorsed over to TBB. Moreover, he could not deny that the hand note was either marked paid or was returned to Bozorg when FMB received full payment.[9]
The bank officer did testify, however, that the parties intended for TBB to buy FMB's "collateral position". This evidence, while insufficient to show that the principal obligation was assigned to TBB, does show that the debt (if paid rather than purchased) was paid by TBB on the condition that FMB's "rights" in the collateral mortgage were transferred to TBB. Accordingly, although TBB may have failed to prove that the transaction was an assignment which preserved the existence of Bozorg's principal obligation, TBB did prove at least that it paid the principal obligation with subrogation to FMB's "privileges and mortgages". See La.C.C. Art. 2160(1).
*674 We therefore conclude that the $88,025.34 paid by TBB to FMB, whether to purchase Bozorg's indebtedness or to lend Bozorg the money to pay his indebtedness, remained at all times secured by the pledge of Bozorg's earlier collateral mortgage note, effective as of August, 1975. On similar reasoning, we also conclude that the inclusion of that first $88,025.34 indebtedness in the $200,000 note of February 1, 1980 did not cause any loss or rank as to that $88,025.34.
IV.
The remaining issue is whether TBB is also entitled to retroactive ranking in respect to the part of the $200,000 note of February, 1980 which was in excess of $88,025.34.
In New Orleans Silversmiths, Inc. v. Toups, above, the court held that the pledgee, to be entitled under Article 3158 to retroactive ranking to the date of the initial loan for all subsequent advances to the pledgor, must prove that:
(1). The initial pledge was properly confected;
(2). The parties mutually agreed at the time of the original pledge that the pledge would also secure obligations thereafter arising;
(3). Each subsequent loan was especially secured by the pledge of the original collateral mortgage note;
(4). The pledged collateral has continuously remained in the hands of the pledgee; and
(5). The parties acted in good faith.
The court went on to state:
"The retroactive effect created by this statute may, by mutual consent, be made applicable not only to renewal of the primary loan but to new or additional loans, even though the original obligation has been fully paid. Further, such renewals, subsequent loans, additional advances, or other obligations shall be secured by the collateral pledged to the same extent as if made at the time the initial loan and pledge was executed." 261 So.2d at 255.
Because there is no proof in this record regarding the initial contract of pledge, we do not reach the question whether loans made to Bozorg by TBB after January 4, 1980 might have been secured with the August 12, 1975 ranking (or even whether an assignee can ever avail himself under La.C.C. Art. 3158 of retroactive ranking for later loans). TBB is simply not entitled to retroactive ranking because it made no showing that FMB itself would have been entitled to retroactive ranking for later-arising loans under Article 3158. The article does not purport to give retroactive ranking in every case of a loan secured by a pledge, but only when the initial contract of pledge establishes "a pledge ... made to secure a particular loan... and ... any other obligations of the pledger to the pledgee ... thereafter arising, up to the limit of the pledge". The proof in this record only establishes the parties' intention to pledge the collateral mortgage note to secure the "particular loan" (the initial $200,000 loan).
Privileges (including those arising from pledges) must be strictly construed. A privilege can be claimed only for those debts to which it is expressly granted. La.C.C. Art. 3185. The express grant of a privilege by Article 3158 exists only when the parties, at the time the contract of pledge is made, mutually agreed that the pledge would secure other unspecified obligations thereafter arising (in addition to securing the particular loan). In effect, the amended Article 3158 provides an exception to the general rule that the privilege only ranks from the time the principal obligation arises, the exception being when the pledgor and pledgee agree at the time of the initial pledge that the pledge will also secure obligations of the pledgor to the pledgee thereafter arising.
Therefore, for TBB to establish entitlement to retroactive ranking, it was necessary to prove that FMB and Bozorg mutually agreed in the 1975 contract of pledge that the pledge would also secure the pledgor's subsequently arising obligations *675 for which the original collateral mortgage note could be additionally pledged.[10] The 1975 contract of pledge is not in the record, and there is no other evidence of an agreement at the time of the initial pledge that the pledge would secure obligations thereafter arising. Therefore, TBB did not prove its compliance with the requirements of Article 3158 for retroactive ranking.
Accordingly, the judgment of the court of appeal is reversed in part, and it is ordered that the mortgage of Texas Bank of Beaumont be recognized as superior to the mortgage of Massey Ferguson, Inc., but only up to the amount of $88,025.34 plus accrued interest. Costs are to be assessed one-half to each of the two creditors.
DIXON, C.J., and DENNIS, J., concur.
MARCUS and BLANCHE, JJ., dissent and assign reasons.
MARCUS, Justice (dissenting).
I agree with the court of appeal that FMB assigned the "whole collateral file, which included the hand note," to TBB. The hand note was not paid off but rather was validly assigned to TBB along with the collateral mortgage and note. Further, considering the fact that Bozorg pledged a collateral mortgage note as security for the original debt and the language in the collateral mortgage note that "any and every other debt or obligation, direct or contingent, whether now existing or hereafter arising ... shall be secured," I am satisfied that it met the requirement in La.Civ.Code art. 3158 that "if so desired or provided, to secure any other obligations or liabilities of the pledger to the pledgee, then existing or thereafter arising, up to the limit of the pledge...." Accordingly, I consider that TBB is entitled to retroactive ranking in respect to the $200,000 hand note of February 7, 1980 from August 12, 1975.
I respectfully dissent.
BLANCHE, Justice (dissenting).
The majority finds that the transfer of the collateral mortgage package in January of 1980 was a payment (or purchase) with subrogation, the effect of which was to preserve the 1975 collateral mortgage ranking as to Bozorg's then existing principal obligation. They also hold that plaintiff failed to establish that the parties agreed in the 1975 contract of pledge that the pledge was intended to secure other of Bozorg's obligations which arose after the date of the 1975 contract of pledge.
From these holdings, I respectfully dissent. The act transferring the collateral mortgage from FMB to TBB clearly states that it is an act of assignment. As an act of assignment, all of the rights and privileges accorded the mortgagee to have future advances secured by the mortgage would have passed to the assignee. Likewise, the collateral mortgage states that it was created for the purpose of raising funds which indicates the collateral mortgage did contemplate securing future advances. As an assignment, it was not necessary that FMB own the collateral mortgage note as it was only assigning whatever rights it had as to that note under the pledge. Therefore, I believe that the Court of Appeal was correct in finding that all of the rights in this collateral mortgage, including the right to make future advances, were validly assigned to TBB and I would hold that the collateral mortgage held by TBB is superior to the mortgage held by MFI for the entire amount of the $200,000 hand note.
NOTES
[1] FMB was not a party to the instrument and apparently did not agree to subordinate any of its rights under the pledge of the 1975 collateral mortgage.
[2] TBB also sought to enforce a $35,000 collateral mortgage acquired from First National Bank of Jefferson (FNJ) on March 21, 1980. On January 12, 1978, Bozorg and his wife had executed a hand note, representing indebtedness of $35,000, and had pledged to FNJ a $35,000 collateral mortgage note to secure the hand note. On March 21, 1980, FNJ transferred the entire collateral mortgage package, including the hand note, to TBB for $33,911.01 (the amount then due, including principal and interest). On that same day, the Bozorgs executed a new hand note to TBB for $35,000, pledging the January 12, 1978 collateral mortgage and note. The trial court, ranking this mortgage from the date of the new hand note and repledge of the collateral mortgage note to TBB, held that MFI's mortgage was superior. However, the appellate court reversed, and MFI did not seek review of that portion of the appellate court's judgment, which is now definitive on that issue. Therefore, TBB's superior ranking as to the mortgage acquired from FNJ is no longer at issue in this ranking contest.
[3] The collateral mortgage has long been recognized by the courts. See, for example, Levy v. Ford, 41 La.Ann. 873, 6 So. 671 (1880).
[4] Pledge is an accessory contract which secures the performance of an existing principal obligation. La.C.C. Art. 3136. The principal obligation in the collateral mortgage scheme is the actual indebtedness, usually represented by a hand note, and the collateral mortgage note is pledged to secure payment of the principal obligation.
[5] La.C.C. Art. 2645 provides that "[t]he sale or transfer of a credit includes every thing which is an accessory to the same; as suretyship, privileges, and mortgages". Therefore, when a creditor assigns a note, the assignee receives the note and all accessory contracts. In the case of the ordinary conventional mortgage in which the debt is evidenced by a note secured by the mortgage, assignment of the note includes the mortgage in the transfer, because the mortgage is an accessory. However, in the case of a collateral mortgage, the debt is evidenced by the hand note, and it is the collateral mortgage note (and its accompanying mortgage) which is the pledged security. Thus, upon transfer of the hand note evidencing the principal obligation, the auxiliary contracts, i.e., the collateral mortgage note and mortgage, are transferred as well, because they are accessories to the hand note.
[6] La.C.C. Art. 2160(1) provides:
"The subrogation is conventional:
"(1) When the creditor, receiving his payment from a third person, subrogates him in his rights, actions, privileges, and mortgages against the debtor; this subrogation must be expressed and made at the same time as the payment."
[7] La.C.C. Art. 2195 provides:
"The privileges and mortgages of the former credit are not transferred to that which is substituted to it, unless the creditor has expressly reserved them."
[8] The court of appeal thus had no record support for its statement that the hand note previously held by FMB was a bearer instrument. Admittedly, the hand note evidencing Bozorg's debt to FNJ was a bearer note and was proved to be part of FNJ's assignment to TBB, but MFI does not contest TBB's superior ranking on that debt.
[9] The bank officer testified as follows:
"Q. What did you deliver to Texas Bank of Beaumont when you executed that assignment?
"A. I delivered a collateral mortgage and, as far as I recollect, I cannot find my collateral file at the bank since I talked to you on the phone last week and, I presume I must have given him my whole collateral file because usually we keep them in our vault after they are paid out. I couldn't find any recollection.... But, I know I delivered the collateral mortgage note to them.
"Q. Were there any other notes delivered?
"A. I don't recall.
"Q. Do you know what happened to the, what is called the `hand note'?
"A. No. As I was listening to Miller [FNJ officer] give his testimony I was trying to recall what happened to our hand note. I don't recall if we ... if I brought that the same day or that was mailed. I don't recall.
"Q. Do you know whether or not it was returned to Kazem Bozorg?
"A. Honestly, I don't know.
"Q. Do you know if it was marked `paid'?
"A. Really, I couldn't say yes or no."
[10] We emphasize that the agreement must be in the contract of pledge and not in the collateral mortgage instrument. Indeed, the pledgee is generally not a party to the collateral mortgage instrument, and the instrument is frequently executed prior to a contract of pledge. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1514885/ | 615 F. Supp. 377 (1985)
Charles WEST
v.
CHEVRON U.S.A., INC., Y & S Marine Company, and XYZ Insurance Company.
William Larry DEAN
v.
CHEVRON OIL COMPANY, Ocean Transportation Systems, Inc., XYZ Insurance Company and the M/V Redeemer, her engines, tackle, furniture & all appurtenances et cetera, in rem.
Civ. A. No. 84-1244, 84-5227.
United States District Court, E.D. Louisiana.
August 8, 1985.
*378 A. Remy Fransen, Jr., of Wiedeman & Fransen, New Orleans, La., for plaintiffs Charles West and William Larry Dean.
Michael McAlpine and John Peuler of Johnson & McAlpine, New Orleans, La., for Ocean Transp. System.
George B. Jurgens, III, Louis Simon, II, Kennedy J. Gilly, Jr., and Michael R.C. Reiss of Milling, Benson, Woodward, Hillyer, Pierson & Miller, New Orleans, La., for Chevron USA, Inc.
OPINION
FELDMAN, District Judge.
Once again the Court plunges into the murky waters of choice of law this time, to resolve whether Admiralty law or state law through the Outer Continental Shelf Lands Act applies to an accident on the Outer Continental Shelf off the Coast of Louisiana. If Admiralty law applies, then plaintiffs may sail smoothly on to pursue the merits of their case. If Louisiana law applies as surrogate federal law through the Lands Act, then plaintiffs have abruptly run aground. Prescription will bar their claims against Chevron.
This matter comes before the Court on Defendant Chevron's motion for summary judgment dismissing plaintiffs' claims against it on the ground that prescription has run on their claims. The undisputed material facts giving rise to this motion are unremarkable.[1]
Plaintiffs sued Chevron to recover damages for personal injuries they allegedly sustained when they were dropped from a personnel basket onto a vessel, the M/V REDEEMER. The personnel basket ran from a fixed offshore platform on the Outer Continental Shelf off the Coast of Louisiana to the vessel, which hovered in the area of the platform. Chevron owned the platform. It also time-chartered the vessel, which was used to transport employees from the structure on which workers slept to the structures on which they worked. At the time of the incident, plaintiffs were being transferred in the basket from the fixed platform to the vessel.
Transfer of the basket back and forth was accomplished by means of a crane. The crane was affixed to the platform. A Chevron employee operated the crane. Workers were transferred by standing on the base of the basket. They held on to the netting sides of the basket as the crane swung the basket over the side of the platform and lowered it onto the deck of the vessel.
The incident in question occurred on April 23, 1982. Plaintiff Charles West filed suit on March 13, 1984. He filed a supplemental and amending complaint on September 12, 1984. Plaintiff William Larry Dean filed suit on October 29, 1984. The suits were consolidated on December 5, 1984.
The issue on which this motion turns is whether Admiralty law or state law as surrogate federal law through the Outer Continental Shelf Lands Act applies to plaintiffs' claims against Chevron. Considering the memoranda, supplemental memoranda and supporting exhibits submitted by the parties, the arguments of counsel during oral argument and the law applicable to this case, the Court grants Chevron's motion for summary judgment and holds that state law through OCSLA governs plaintiffs' claims. They are, therefore, prescribed.
The analysis begins with Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 493, 93 S. Ct. 498, 34 L. Ed. 2d 454 *379 (1972) and its progeny, even though Executive Jet dealt with the scope of admiralty jurisdiction and the instant case deals with choice of law. Choice of law questions in cases such as the one before the Court "traditionally have been analyzed in jurisdictional terms ... because `once admiralty jurisdiction is established, then all of the substantive rules and precepts peculiar to the law of the sea become applicable'". In Re Dearborn Marine Service, Inc., 499 F.2d 263, 277 n. 27 (5 Cir.1974).[2]
Under Executive Jet and its progeny, the Court focuses on two inquiries: 1) the locality of the wrong; and 2) maritime nexus to the wrong. In examining the locality of the wrong the Court must look at the place the injury occurred, that is: the place where the alleged negligence took effect, rather than where the act of negligence occurred.[3]
In this case, it is undisputed that the negligence took effect and the injury occurred on the vessel M/V REDEEMER, a vessel on navigable waters. It thus is clear that the locality prong of the Executive Jet test is met in this case. That conclusion does not, however, end the Court's inquiry.
Under Executive Jet, the Court must decide whether the requisite maritime nexus is also present. It is that inquiry which focuses attention on the difficult dimension of the issue raised. And it is that inquiry which centers on a fundamental policy consideration: How expansive a view should courts take of what Admiralty law should reach?
The test of maritime nexus is whether the negligence bears a significant relationship to traditional maritime activity. Executive Jet, 93 S.Ct. at 504. Helaire at 1042. In assessing whether the negligence bears a significant relationship to traditional maritime activity, the Court addresses four considerations: 1) the functions and roles of the parties involved; 2) the types of instrumentalities involved; 3) the nature and cause of the accident and the type of injury; 4) traditional concepts of the role of admiralty law. Kelly v. Smith, supra. Considering each of these factors in light of the facts of this case, the Court is compelled to conclude that maritime nexus is lacking in this case. The negligence fails to bear a significant relationship to traditional maritime activity even though the injuries happened on a vessel in navigable waters.
Functions and Roles of the Parties
It is undisputed that plaintiffs were the quintessential platform workers. At the time of the incident, they were being lifted in a personnel basket manipulated by a platform-based crane from Chevron's platform to the vessel M/V REDEEMER. The vessel hovered between 2 and 130 feet away from the platform at the time of transfer.
Chevron wore two hats in this case; that of platform owner and that of time charterer of the vessel. The activity in which it was engaged at the time of the accident, however, was non-maritime the operation of a platform-based crane.
Plaintiffs seize on the fact that Chevron was the time-charterer of the vessel. They strenuously argue that, as such, Chevron had the status of vessel owner. Plaintiffs, with admirable enterprise, further liken themselves to passengers or cargo being transported on a vessel or a vessel-equivalent across navigable waters.[4] They urge *380 that Chevron therefore owed them a duty of safe egress from the basket and ingress onto the Redeemer.
The Court rejects plaintiffs' characterization of the roles of the parties. The Court recognizes that courts have deemed non-vessels such as helicopters that ferry workers back and forth from shore to offshore drilling structures to be functionally vessel-equivalents[5] to establish the requisite maritime flavor to an accident. But this Court is not persuaded that a personnel basket operated from a platform-based crane, and which was used to transfer workers at most something over a hundred feet, performs a sufficiently similar function or is of the same genre. Therefore, the Court rejects plaintiffs' assertion that they have passenger status by virtue of being transferred in the basket.
Similarly, the Court rejects plaintiffs' contention that they were passengers because their destination was a vessel on which they would be transported across navigable waters to another platform. Plaintiffs have failed to bring to the Court's attention any case which takes so broad a view of who is a passenger and when a vessel's duty to passengers or intended passengers commences. To accept plaintiffs' argument would be to conceptually ignore the centerpiece of this puzzle: the fixed platform activities (which are nonmaritime) that cannot be unbundled from the events at issue.
Instrumentalities
Likewise, the critical instrumentalities involved in this case are peculiarly non-maritime. As noted, they are a platform-based crane that operated a personnel basket. There is nothing uniquely maritime about these instrumentalities. In so finding, the Court does not ignore the presence of the vessel at the scene of the accident. But the vessel was a passive factor, and the fact of its fortuitous involvement does not change the result here. That plaintiffs were injured when they landed on the vessel was mere happenstance; if the injuries had occurred on the platform, state law would clearly apply. It is precisely the fortuity of the location of an accident that led the Supreme Court to shift the analysis of jurisdictional issues away from a pure locality test to a test of locality plus maritime nexus. The Court acknowledged that "there has existed over the years a judicial, legislative and scholarly recognition that, in determining whether there is admiralty jurisdiction over a particular tort or class of torts, reliance on the relationship of the wrong to traditional maritime activity is often more sensible and more consonant with the purposes of maritime law than is a purely mechanical application of the locality test." Executive Jet, 93 S.Ct. at 501.
It is important that courts not lose sight of this policy consideration. Further, as the Court already has mentioned, it is not persuaded that the personnel basket performed a function which renders it a vessel-equivalent. This case therefore is distinguishable from Ledoux.
Nature and Cause
The nature and cause of the accident were platform, not vessel-related. It is undisputed that the cause of the accident was the allegedly negligent operation of the platform-based crane by a Chevron employee. Since there was no "causal operational relation" between the vessel and plaintiffs' resulting injuries as noted in Lanasse v. Travelers Insurance Company, 450 F.2d 580, 584 (5 Cir.1971), the Court cannot properly characterize the cause of the accident and injury as "vessel-related". What is pivotal here is the fact that the injury was caused by clearly non-vessel operations.
Plaintiffs cannot magically transform platform negligence into vessel-related negligence by characterizing themselves as cargo or passengers, or, as we have seen, by seizing on the fact that Chevron time-chartered the vessel on which plaintiffs fortuitously landed. While the Court recognizes that vessels owe certain duties, including a duty of safe ingress and egress to persons who actually are passengers or *381 who are imminently about to become passengers, it cannot accept plaintiffs' self-characterization as passengers or cargo or their characterization of the personnel basket as a vessel or vessel-equivalent. Plaintiffs' reasoning would expand a vessel's duty to the point of absurdity. Under plaintiffs' reasoning, they became "passengers" and the vessel's duty arose while they were still on the platform, and at the moment they were about to enter the personnel basket.
Type of Accident or Injury
Nor was the type of accident or injury in this case peculiarly maritime. The accident and resulting injuries could have been sustained on a platform or land-based rig as well. As previously noted, the landing of plaintiffs on the vessel was mere happenstance. It is helpful to underscore that. If they had been going from the vessel to the platform rather than from the platform to the vessel, they might have landed on the platform instead, and sustained the same injuries.[6]
Traditional Concepts of the Role of Admiralty Law
Finally, the traditional concepts of the role of admiralty law compel this Court to hold that state law through OSCLA rather than Admiralty law, governs plaintiffs' claims against Chevron. The purpose of Admiralty law is to safeguard the understandable national interest in uniformity of law and remedies for those facing the hazards of waterborne transportation. Kelly v. Smith supra. But that national interest simply is not implicated in this case. Plaintiffs were not facing hazards peculiar to waterborne transportation when they were lifted and moved in a basket attached to a crane mounted on a fixed platform from the platform to a vessel hovering between 2 to 130 feet away.
The Court further emphasizes that the Supreme Court, beginning with Executive Jet and Foremost Insurance Company v. Richardson, 457 U.S. 668, 102 S. Ct. 2654, 73 L. Ed. 2d 300 (1982), and more recently in Herb's Welding v. Gray, ___ U.S. ___, 105 S. Ct. 1421, 84 L. Ed. 2d 406 (1985), has taken a restrictive view of what is maritime and what falls within Admiralty jurisdiction. The Supreme Court seems to be saying that expansive notions of what is in the Admiralty are viewed with disfavor. In Herb's Welding, for example, the Supreme Court pointed out that "The Fifth Circuit's expansive view of maritime employment is ... inconsistent with our prior cases under the 1972 Amendments to the LHWCA. The expansion of the definition of navigable waters to include rather large shoreside work areas necessitated an affirmative description of the particular employees working in those areas who would be covered. This was the function of the maritime employment requirement. But Congress did not seek to cover all those who breathe salt air. Its purpose was to cover those workers on the situs who are involved in the essential elements of loading and unloading...." 105 S. Ct. 1421, 1427 (1985). This Court heeds the signal of the Supreme Court, and believes it is a healthy sign. In this case, the great weight of the relevant factors militates against application of Admiralty law. To rule otherwise, in this context, would require too expansive a view of what belongs in Admiralty.
To summarize, nothing about plaintiffs' injuries or the accident itself except the fortuity of its culmination on the deck of a vessel exudes maritime flavor. Nothing calls into play the unique interests of Admiralty. Neither the risks to which plaintiffs were exposed, nor Chevron's alleged breaches were peculiarly Admiralty-related. The risks and breaches did not involve the duty of a vessel-equivalent to her passengers.[7]
*382 Considering all of these factors, the Court finds that the requisite maritime nexus is lacking in this case. The Court therefore holds that state law, applied as surrogate federal law through the Outer Continental Shelf Lands Act, applies to plaintiffs' claims against Chevron.
The Court recognizes that its application of state law through OCSLA in this setting might be viewed as an extension of OCSLA beyond the precise physical limits of the fixed offshore platform. In this Court's view, however, the personnel basket attached to the crane affixed to the platform was itself an extension of the platform. In all events, nothing in the legislative history of OCSLA suggests that Congress intended for OCSLA to be limited to the four corners of the platform. Indeed, other courts have refused to limit the application of OCSLA to the precise physical limits of the fixed offshore platform.[8]
Having determined that state law through OCSLA applies to plaintiffs' claims against Chevron, the Court is obliged to dismiss these claims on grounds of prescription. The applicable prescriptive period under Louisiana law is one year.[9] Plaintiffs brought suit more than one year after the accident and injury.
Accordingly, Chevron's motion for summary judgment dismissing plaintiffs' claims against it is GRANTED.
NOTES
[1] They present, however, another of those "perverse and casuistic borderline situations" that led the Supreme Court to supplement the locality test of maritime tort jurisdiction with a maritime nexus requirement. See Executive Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 93 S. Ct. 493, 498, 34 L. Ed. 2d 454 (1972).
[2] See also Helaire v. Mobil Oil Co., 709 F.2d 1031 (5 Cir.1983), in which the court, without comment, used this jurisdictional analysis to resolve the choice of law question.
[3] In Re Dearborn, supra; Kelly v. Smith, 485 F.2d 520 (5 Cir.1973); Harville v. Johns-Mansville Products Corp., 731 F.2d 775 (11 Cir.1984). Helaire, supra.
[4] They apparently seek to characterize themselves as cargo or passengers through two routes. First, they urge that the very fact of their being transferred in the personnel basket from the platform to the vessel is tantamount to their being transported like cargo or passengers across navigable waters. Additionally, they argue that they were passengers of the M/V REDEEMER by virtue of the fact that they were being transferred to the Redeemer to be transported in that vessel.
[5] Cf.: Ledoux v. Petroleum Helicopters, Inc., 609 F.2d 824 (5 Cir.1980).
[6] Had they landed on the platform rather than on the vessel, Wallace v. Texaco, 681 F.2d 1088 (5 Cir.1982) makes clear that state law through OCLSA would apply. "Because Wallace was injured on a fixed platform on the outer continental shelf, his cause of action is governed by the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq."
[7] A different result would be reached if plaintiffs actually had been passengers on a vessel or an instrumentality performing the function traditionally performed by a vessel on navigable waters. See e.g.; In Re Dearborn supra for its treatment of the platform worker Monk's claims against the owner of the vessel on which he was injured as distinguished from its treatment of his claims against the platform owners. In the case before this Court, however, plaintiffs were not being transported across navigable waters in a sense that implicates maritime concerns.
[8] Cf. In Re Dearborn, supra; Oliver v. Aminoil, USA, Inc., 662 F.2d 349 (5 Cir.1981); Bible v. Chevron Oil Co., 460 F.2d 1218 (5 Cir.1972) cert. den. 409 U.S. 984, 93 S. Ct. 325, 34 L. Ed. 2d 248 (1972); Bertrand v. Forest Corp., 441 F.2d 809 (5 Cir.1971) cert. den., 404 U.S. 863, 92 S. Ct. 106, 30 L. Ed. 2d 107 (1971).
[9] LSA C.C. Art. 3536. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1523436/ | 162 B.R. 619 (1994)
In re PIPER AIRCRAFT CORPORATION, Debtor.
Bankruptcy No. 91-31884-BKC-RAM.
United States Bankruptcy Court, S.D. Florida.
January 14, 1994.
*620 Paul S. Singerman, Stroock, Stroock & Lavan, Miami, FL, for debtor.
Howard Berlin, Kluger, Peretz & Berlin, P.A., Miami, FL, for Official Unsecured Creditors' Committee.
Paul K. Ferdinands, King & Spalding, Atlanta, GA, for David G. Epstein, Legal Representative.
James E. Millstein, Cleary, Gottlieb, Steen & Hamilton, New York City, and Alan S. Fine, Miami, FL, for 2I, Inc.
Francis L. Carter, Coll, Davidson, Carter, Smith, Salter & Barkett, P.A., Miami, FL, for amicus 541474 Alberta, Ltd.
Oscar R. Cantu, Weil, Gotshal & Manges, Miami, FL, for Pilatus Aircraft, Ltd.
MEMORANDUM OPINION
ROBERT A. MARK, Bankruptcy Judge.
Piper Aircraft Corporation has been designing, manufacturing and selling general aviation aircraft and associated spare parts *621 since 1937. Approximately 50,000 to 60,000 aircraft are still operational in the United States. Piper is attempting to reorganize under Chapter 11 of the Bankruptcy Code. Following confirmation of a plan, some of these planes will crash. People will be killed or injured. Others will suffer property damage. Some of the crashes may be caused in whole or in part by design or construction defects in the planes or in their parts. The Court must determine whether these presently unknown persons who will suffer personal injury or property damage in the future have "claims" in this bankruptcy case.
The specific issue before the Court is framed by an objection by the Official Committee of Unsecured Creditors to the claim filed by a court-appointed legal representative on behalf of this broad class of potential future claimants. The Court concludes that these future claimants do not have "claims" as defined by § 101(5) of the Bankruptcy Code.
BACKGROUND FACTS AND PROCEDURAL HISTORY
Piper Aircraft Corporation ("Piper" or "Debtor") manufactures and distributes general aviation aircraft and spare parts throughout the United States and abroad. It began its manufacturing activities in 1937 and since that time has produced approximately 135,000 aircraft, of which approximately 50,000 to 60,000 are still operational in the United States. Over the years, Piper has been a defendant in several lawsuits based on its manufacture, design, sale, distribution and support of aircraft and parts. Although it has never acknowledged that its products are harmful or defective, Piper has suffered from the economic drain of escalating litigation costs in connection with defending these product liability claims. In large part because of this financial burden, on July 1, 1991, Piper filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code.
With 50,000 to 60,000 Piper aircraft still in operation, accidents involving these aircraft undoubtedly will occur. Thus, additional though presently unidentifiable individuals will have similar product liability, property damage, or other claims as a result of incidents occurring after confirmation of the Debtor's Chapter 11 plan of reorganization, but arising out of or relating to aircraft or parts manufactured, sold, designed, or distributed by the Debtor prior to confirmation.
The Debtor's anticipated plan of reorganization contemplates finding a purchaser of substantially all of the Debtor's assets or obtaining investments from outside sources with the proceeds of such transactions serving to fund distributions to creditors. On April 8, 1993, the Debtor and Pilatus Aircraft Limited ("Pilatus") signed a letter of intent ("Letter of Intent") pursuant to which the Debtor agreed to sell to Pilatus, and Pilatus agreed to purchase from the Debtor, substantially all of the Debtor's assets. The Letter of Intent required the Debtor to seek the appointment of a legal representative (the "Legal Representative") for future claimants to represent their interests in arranging a set-aside of monies generated by the sale to pay off future product liability claims. On May 19, 1993, the Court entered an order authorizing the appointment of David G. Epstein as Legal Representative of the "Future Claimants."[1] However, the Court specifically excluded from the appointment order any finding on whether the Future Claimants hold claims against the Debtor under § 101(5) of the Bankruptcy Code.
On July 12, 1993, the Legal Representative filed a proof of claim on behalf of the Future Claimants (the "Claim"). In the Claim, the Legal Representative asserts that the Debtor is indebted to the Future Claimants in the *622 approximate amount of $100,000,000. The Claim purports to be based on statistical assumptions regarding the number of people who are likely to suffer personal injury or property damage after the confirmation of a reorganization plan, which is caused by Debtor's pre-confirmation manufacture, sale, design, distribution or support of aircraft and spare parts.
In conjunction with the Claim, the Legal Representative filed a motion requesting estimation of the Claim for voting purposes.[2] At the July 26, 1993 preliminary hearing on this motion, the Debtor, the Official Committee of Unsecured Creditors (the "Committee") and the Legal Representative urged the Court to determine whether the Future Claimants hold "claims" as defined in § 101(5) of the Bankruptcy Code before conducting an evidentiary hearing on the estimation motion. The Court agreed and set a briefing and hearing schedule, with the issue to be framed by a formal objection to the Claim. In turn, on July 28, 1993, the Committee filed an Objection to the Legal Representative's Claim.
The Legal Representative and Committee submitted memoranda on the objection, as did three potential purchasers of Piper's assets: Pilatus; 2I, Inc.; and Alberta, Limited. A hearing on the Objection to Claim was held on September 2, 1993. At the hearing, the Debtor joined the Committee in objecting to the Claim.[3] Various issues arose at the hearing, including whether or not the claims could be estimated and provided for in a plan and whether or not the claims, if they existed, were dischargeable. These issues are relevant to but distinct from the narrow and only issue the Court decides here: whether the Future Claimants hold "claims" as defined in § 101(5) of the Bankruptcy Code.
On September 10, 1993, the Court announced its ruling that the Future Claimants do not hold claims within the meaning of § 101(5). Detailed findings and conclusions pursuant to Fed.R.Bankr.P. 7052 were stated on the record. The Court advised that its written order disallowing the Claim, together with a Memorandum Opinion, would be entered subsequently.
Concerned that further delay in entering its Order on the Claim could impact the Legal Representative's efforts to seek prompt appellate review of its decision, on December 6, 1993 the Court entered its Order Sustaining the Committee's Objection to Claim and Disallowing Legal Representative's Proof of Claim. The December 6th Order also denied the Legal Representative's September 16, 1993 Motion for Reconsideration.[4]
This Memorandum Opinion supersedes the findings and conclusions entered on the record on September 10, 1993 and constitutes the findings and conclusions of the Court supporting its December 6, 1993 Order disallowing the Claim.
DISCUSSION
A. Statute And Legislative History
The Bankruptcy Code defines claim as follows:
(5) "claim" means
(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or
(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced *623 to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured;
11 U.S.C. § 101(5). When Congress promulgated § 101(5), it intended to define "claim" more broadly than the term was defined under prior bankruptcy law.
Under the former Bankruptcy Act of 1898, a corporation could reorganize under Chapter X or Chapter XI.[5] Chapter XI defined claim very narrowly. Under Chapter XI, a claim had to be both "proved" and "allowed." Contingent obligations were theoretically "provable" under § 63 of the Bankruptcy Act. However, a contingent or unliquidated claim would not be "allowed" under § 57(d) of the Bankruptcy Act unless the claim could be estimated or liquidated. If the court believed a claim was not susceptible to liquidation or estimation, or that such liquidation or estimation would unduly delay the administration of the bankrupt's estate, the claim would be disallowed, and in turn be deemed unprovable under § 63(d) of the Act. Disallowed or unprovable claims were not subject to discharge.
As a result of this narrow definition, Chapter XI of the Bankruptcy Act prevented a debtor from treating under its plan certain contingent claims that were not "provable," including contingent tort claims. Thus, the Act allowed such claims to be asserted against the reorganized debtor and caused two potential results which contravened established bankruptcy policy: first, it allowed similarly situated creditors to be treated differently; and second, it often led to the failure of the reorganization process. See generally, In re Pettibone Corp., 90 B.R. 918, 923-24 (Bankr.N.D.Ill.1988); In re Edge, 60 B.R. 690, 694 (Bankr.M.D.Tenn.1986); In re Johns-Manville Corp., 57 B.R. 680, 686-87 (Bankr.S.D.N.Y.1986) for a discussion of the Bankruptcy Act's claim provisions and their effect.
In enacting the current Bankruptcy Code, Congress intentionally eliminated the "provability" requirement to broaden the range of claims that could be dealt with in bankruptcy and thereby avoid the inequities occurring under the Bankruptcy Act. The legislative history of § 101(5) reflects the intent of Congress in revising the definition of "claim," providing:
By this broadest possible definition, and by the use of the term throughout title 11, especially in subchapter I of Chapter 5, the bill contemplates that all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case. It permits the broadest possible relief in the Bankruptcy Court.[6]
Based upon the statutory language and legislative history, virtually all courts agree that the definition of claim is expansive. See, e.g., In re Robinson, 776 F.2d 30 (2d Cir. 1985), rev'd on other grounds, 479 U.S. 36, 107 S. Ct. 353, 93 L. Ed. 2d 216 (1986), and cases cited therein. The question is, how far can the concept of "claim" be expanded? In referring to the legislative history, one court has observed, "That language surely points us in a direction, but provides little indication of how far we should travel," In re Chateaugay Corp., 944 F.2d 997, 1003 (2d Cir.1991).
Pilatus and the Legal Representative argue that any right to payment arising out of the prepetition conduct of the Debtor, no matter how remote, should be deemed a claim and provided for in this case. Specifically, they argue that because Piper aircraft and parts manufactured, designed, sold or distributed prepetition will be involved in post-confirmation accidents causing injury, death and property damage, those individuals who suffer damages, although not yet identifiable, hold claims cognizable in this bankruptcy case. The Committee and the Debtor argue that while Congress intended to expand the definition of claim, the definition is *624 not so broad as to include unidentified, and presently unidentifiable, individuals with no discernible prepetition relationship to Piper. For the reasons set forth below, the Court agrees with the Committee and the Debtor.
B. Accrued State Law Claim Theory
The issue before the Court is defining the extent to which a "contingent," "unmatured," and "unliquidated" potential right to payment is a claim under § 101(5). Several theories have emerged in the relevant case law. Under the most narrow interpretation, there is no claim for bankruptcy purposes until a claim has accrued under state law. Most notable among cases adopting this approach is the Third Circuit's decision in In re M. Frenville Co., 744 F.2d 332 (3d Cir.1984), cert. denied, 469 U.S. 1160, 105 S. Ct. 911, 83 L. Ed. 2d 925 (1985). In Frenville, the court held that an indemnification claim which did not arise under state law until after the petition date was not a claim under § 101(5).
The problem with the Frenville decision and its progeny is that exclusive reliance on the accrual of a state law cause of action ignores the intent of Congress to define claim broadly in bankruptcy cases. State or non-bankruptcy law does not and should not override the bankruptcy policies of equitable distribution to creditors and a fresh start to the debtor. Defining the right to payment under § 101(5) by tying it to state law is inappropriate and the Court thus rejects the accrued state law claim theory, as have most courts that have considered it in the context of both mass tort cases and indemnification cases. See In re A.H. Robins Co., 63 B.R. 986 (Bankr.E.D.Va.1986), aff'd sub nom. Grady v. A.H. Robins Co., 839 F.2d 198 (4th Cir.), cert. dismissed, 487 U.S. 1260, 109 S. Ct. 201, 101 L. Ed. 2d 972 (1988); In re Edge, 60 B.R. 690 (Bankr.M.D.Tenn.1986); In re Johns-Manville Corp., 57 B.R. 680 (Bankr.S.D.N.Y.1986).
C. Conduct Test Theory
Recognizing the shortcomings of the standard espoused in Frenville, several courts, including those addressing mass tort issues, devised a theory commonly referred to as the "Conduct Test." Under this test, a right to payment arises when the conduct giving rise to the alleged liability occurred. The leading Circuit Court of Appeals case describing and adopting the Conduct Test is Grady v. A.H. Robins Co. (In re A.H. Robins Co.), 839 F.2d 198 (4th Cir.1988). In A.H. Robins, the claimant, Grady, was inserted with a Dalkon Shield contraceptive intra-uterine device (IUD) a number of years prior to the petition date. After the petition was filed, Grady manifested injuries related to the Dalkon Shield. Relying on California's "discovery rule"[7] statute of limitations provision, Grady argued that she was not stayed from bringing suit against the debtor because her claim arose postpetition.
The A.H. Robins court disagreed. Applying the Conduct Test, the Fourth Circuit held that Grady's claim was a prepetition contingent claim, since all of the acts constituting the tort other than the manifestation of injury had occurred prior to the petition date. 839 F.2d at 201. The court stated that Grady's claim was undoubtedly contingent as that term is defined in Black's Law Dictionary, and continued:
[The claim] depends upon a future uncertain event, that event being the manifestation of injury from use of the Dalkon Shield. We do not believe that there must be a right to the immediate payment of money in the case of a tort or allied breach of warranty or like claim, as present here, when the acts constituting the tort or breach of warranty have occurred prior to the filing of the petition ...
Id. at 202. Using this analysis, the court held that Grady had a claim that arose before the commencement of the case.
Essentially the same test was applied in the asbestos case of In re Waterman S.S. Corp., 141 B.R. 552 (Bankr.S.D.N.Y.1992), vacated on other grounds, 157 B.R. 220 (S.D.N.Y.1993). In Waterman, former employees *625 of the debtor sought a declaratory judgment holding that their asbestosis claims, which were manifested post-confirmation, were not discharged by the confirmation order. In reaching his decision, Bankruptcy Judge Conrad bifurcated the analysis into two issues: first, whether the individuals held claims, and second, if they did hold claims, whether these claims were dischargeable.
In answering the first question, Judge Conrad followed the lead of the Johns-Manville asbestosis cases and reasoned that, in determining whether or not a claim exists, "the focus should be on the time when the acts giving rise to the alleged liability were performed," In re Johns-Manville Corp., 57 B.R. 680, 690 (Bankr.S.D.N.Y.1986). Since the asbestos was manufactured prepetition, and since the individuals suffering injuries were exposed prepetition, the former employees held "claims" under § 101(5). However, because the debtor failed to include this known class of creditors in its schedules and failed to provide adequate notice to this known class, Judge Conrad held that the claimants did not have notice sufficient to meet due process requirements for discharging their claims.[8]
At least one case has used a similar application of the Conduct Test outside the mass tort context. In In re Edge, 60 B.R. 690 (Bankr.M.D.Tenn.1986), the debtor was a dentist. After the debtor filed his Chapter 7 petition, a former patient sought a declaration that a "claim" based on negligent treatment received prior to the debtor's filing, but discovered afterwards, was a postpetition claim and thus not subject to the § 362 automatic stay. The court, applying a broad interpretation of claim as guided by the legislative history, concluded that the claim arose at the time of the debtor's prepetition misconduct and thus was subject to the automatic stay. Id. at 705. As in Waterman and A.H. Robins, the claimant had already been exposed to or had contact with the cause of injury (in Edge, the dentist's negligent treatment; in Waterman and A.H. Robins, known defective and dangerous products), but simply had not manifested injury as of the commencement of the case.
The Legal Representative urges a similar application of the Conduct Test in this case, with the relevant conduct being Piper's prepetition manufacture, design, sale and distribution of allegedly defective aircraft. However, unlike the asbestos and Dalkon Shield cases, the Legal Representative cannot pinpoint which aircraft or parts are defective or, more significantly, who will be exposed to the defective product in the future. In effect, under the Conduct Test, everyone in the world would hold a claim against Piper simply by virtue of their potential future exposure to any plane in the existing fleet. The conduct of Piper purporting to support the existence of prepetition "claims" is readily distinguishable from the conduct of the asbestos and Dalkon Shield manufacturers.[9] Thus, the Court rejects application of a Conduct Test that would give rise to "claims" simply because the design and manufacture of products occurred prepetition.
D. Prepetition Relationship Theory
Recognizing that the Conduct Test may define a § 101(5) claim too broadly in some situations, several courts have recognized *626 "claims" only for those individuals with some type of prepetition relationship with the Debtor. In In re Pettibone Corp., 90 B.R. 918 (Bankr.N.D.Ill.1988), the debtor was sued for injuries sustained by the operator of a forklift designed and manufactured by the debtor before it filed its bankruptcy case. The claimant's employer purchased the forklift postpetition and therefore the claimant had no prepetition contact with the debtor or the forklift. The accident and the resulting injuries all occurred postpetition. The Pettibone court found that the facts before it were distinguishable from the asbestos and other mass tort cases where the injuries sustained could be tied to some type of prebankruptcy privity, contact, impact or hidden harm. Id. at 931. Because the operator's injury occurred postpetition without any prepetition relationship or exposure to tie the claimant to the debtor, the court held there was no "claim" as of the petition date. Id. at 932-33.
The Second Circuit suggested a similar analysis in In re Chateaugay Corp., 944 F.2d 997 (2d Cir.1991). The issue in that case was whether the Environmental Protection Agency ("EPA") had a prepetition (and thus dischargeable) claim for environmental cleanup costs which would not be incurred until after confirmation, but which concerned environmental hazards related to prepetition conduct of the debtor.[10] The court tied the concept of "claim" to the prepetition relationship between debtor and claimant, finding that the relationship between environmental regulating agencies and the parties subject to regulation makes those contingent obligations based on prepetition conduct "claims" under the Code's definition. Id. at 1005. Thus, even though the EPA could not identify all of the sites or the full extent of the removal costs, the future environmental response costs for sites contaminated prior to filing of the bankruptcy petition were prepetition claims under the Bankruptcy Code.[11]
The finding in Chateaugay of a sufficient relationship is a narrow one, and that court expressly excluded several other scenarios from its holding. The court noted,
We need not decide how the definition of "claim" applies to tort victims injured by pre-petition conduct, especially as applied to the difficult case of pre-petition conduct that has not yet resulted in detectable injury, much less the extreme case of prepetition conduct that has not yet resulted in any tortious consequence to a victim.
Id. at 1004. In concluding that the degree of relationship between the debtor and the EPA was sufficient, the court found it "far closer than that between future tort claimants totally unaware of injury and a tort-feasor." Id. at 1005.[12]
Indeed, the Chateaugay court noted that defining claims to include any ultimate right to payment arising out of prepetition conduct by the debtor would yield questionable results. In pursuing this discussion, the court presented a hypothetical example of a company in bankruptcy which estimates that one out of the ten thousand bridges it built prepetition eventually will fail, causing the death of ten individuals. The court explored the problems inherent in attempting to recognize these "claims" pursuant to the Conduct Test:
Is there a "claim" on behalf of the 10 people who will be killed when they drive across the one bridge that will fail someday *627 in the future? If the only test is whether the ultimate right to payment will arise out of the debtor's pre-petition conduct, the future victims have a "claim." Yet it must be obvious that enormous practical and perhaps constitutional problems would arise from recognition of such a claim. The potential victims are not only unidentified, but there is no way to identify them. Sheer fortuity will determine who will be on that one bridge when it crashes.
Chateaugay, 944 F.2d at 1003.
The problem posed by this hypothetical has become reality here. We know that some planes in the existing fleet of Piper aircraft will crash, and we know that there may be injuries, deaths and property damage as a result. We also know that under theories of negligence and products liability, Piper, if it remains in existence, would be liable for some of these damages. Even so, there is no way to identify who the victims will be or to identify any particular prepetition contact, exposure, impact, privity or other relationship between Piper and these potential claimants that will give rise to these future damages.
E. Analysis and Application
The Conduct Test and the Relationship Test are not mutually exclusive theories. Requiring that there be some prepetition relationship between the Debtor and claimant would not change the analysis or results of the Conduct Test cases. In fact, such a requirement appears to be implicit in those decisions. In the asbestos cases, the future claimants were individuals who were known to have had prepetition exposure to the dangerous product. See, e.g., Waterman, 141 B.R. at 556 (claims arose "at the moment the asbestos claimants came into contact with the asbestos"). Likewise, in A.H. Robins, the court determined that the claim arose when the claimant was inserted with a Dalkon Shield. Grady v. A.H. Robins Co., 839 F.2d at 203. And in Edge, the court noted that the Bankruptcy Code recognizes a claim for the victim of prepetition misconduct "at the earliest point in the relationship between victim and wrongdoer." Edge, 60 B.R. at 699. Thus, the Conduct Test cases presume not only that there was prepetition conduct, but also that there was some prepetition relationship between the debtor's conduct and the claimant.
The theories advanced by prior cases exploring the outer limits of the concept of claim, when thus reconciled, lead to the conclusion that in order for a future claimant to have a "claim" under § 101(5), there must be some prepetition relationship, such as contact, exposure, impact, or privity, between the debtor's prepetition conduct and the claimant. This is not to suggest that any and every prepetition relationship will give rise to a claim.[13] Rather, a prepetition relationship connecting the conduct to the claimant is a threshold requirement.
In the instant case, the Claim advanced by the Legal Representative on behalf of the Future Claimants fails to fulfill this minimum requirement: the conduct upon which the claim is based, in its entirety, is merely the prepetition design, manufacture and sale of aircraft, without any discernible connection between that conduct and the Legal Representative's constituency.[14] There is no prepetition exposure to a specific identifiable defective product or any other prepetition relationship between the Debtor and the broadly defined class of Future Claimants. Since there is no way to connect the future claims to some prepetition relationship, there is also no way to identify a discrete class of individuals who will have claims arising out of prepetition conduct. In short, the Claim *628 in this case fails even the broadest test for recognition of a "claim".
F. Policy Considerations
Since no binding case law exists mandating the result here, the Court has also considered the policy implications of its decision. The Legal Representative and Pilatus argue that tying the issue of "claim" solely to whether the Debtor's conduct occurred prepetition would foster two primary policies of the Bankruptcy Code: (1) the effective reorganization of the Debtor, and (2) the equal treatment of similarly situated creditors. The Court disagrees.
Focusing on reorganization issues, Pilatus and the Legal Representative assert that an effective reorganization depends on Piper being relieved from liability arising out of the prepetition manufacture, design, sale or distribution of defective aircraft. They argue that this Court should therefore find that the Future Claimants hold dischargeable prepetition claims. This argument has several weak links.
First, unlike the Dalkon Shield and asbestos cases, the Debtor in this case does not believe that recognition of these future interests in the plan is necessary for its reorganization. Indeed, both the Debtor and the Committee conclude that allowing the Claim will hinder, not promote reorganization. Second, as revealed by the Waterman case, a determination that the Future Claimants hold "claims" would not necessarily mean that the claims are dischargeable. If they are not dischargeable, calling them "claims" would not in any way facilitate Piper's reorganization. Here, significant and possibly insurmountable due process problems exist in providing notice to this vast class of Future Claimants sufficient to allow the discharge of their claims, regardless of the appointment of, and diligent efforts by, the Legal Representative. In sum, the Court cannot and does not find that recognizing the Future Claimants' "claims" will aid in an effective reorganization.[15]
Pilatus and the Legal Representative also argue that all individuals injured from Piper aircraft manufactured before confirmation should be treated equally, regardless of whether their injuries occur pre-confirmation or post-confirmation. Determining that the Future Claimants do not hold "claims," they argue, would cause disparate treatment based solely on the fortuity of when a crash occurs. This argument is framed by a hypothetical: Should crash victim Jones be able to share in plan distributions if his plane crashes pre-confirmation, while crash victim Smith receives nothing under the plan if his plane crashes post-confirmation?
The Court concludes that the answer is yes, their treatment can and should be different. In bankruptcy, as in life, timing matters.[16] There is a major distinction between Jones and Smith. Jones can be identified presently; Smith cannot. Only future events, impossible to predict at the time of confirmation of a plan, will determine who the future claimants will be, and whether Smith in fact will be one of them. Were Smith and his fellow claimants presently ascertainable *629 and identifiable, the answer might be different; but in the instant case it is impossible to determine who ultimately will belong to the class of creditors, and whether any prepetition relationship to the Debtor gives rise to their potential future causes of action.
Thus, the Court's decision today is not inconsistent with the statutory language, legislative history, or policies suggesting the "broadest possible definition" of claim. The concept of "claim" cannot be extended to include unidentified and presently unidentifiable potential claimants against this Debtor, claimants whose rights depend entirely on the fortuity of future occurrences and not on any prepetition relationship to the Debtor. Congress may have intended the broadest possible definition of claim, but that definition still has limits. One such limit is present here.
EFFECT OF COURT'S RULING
In determining that the Future Claimants do not hold claims under the Bankruptcy Code, the Court is not determining whether any or all of the future victims may have a non-bankruptcy future remedy. The nature of the reorganization plan eventually confirmed in the case may affect the result as will, in the event of a sale of Piper's assets, application of successor liability laws which may vary among the states. The ruling simply means that the future claims are not bankruptcy "claims" that will be administered in this case.[17]
CONCLUSION
The definition of "claim" in the Bankruptcy Code is intentionally broad and sweeps within its scope remote and contingent obligations not necessarily actionable under state law at the commencement of a bankruptcy case. Still, the definition must and does have limits. Based upon the nature of Piper's prepetition conduct and the absence of any relationship between the class and Piper's prepetition activities, Piper's Future Claimants do not have "claims" in this case. The Committee's Objection is sustained, and the Claim filed by the Legal Representative is disallowed.
NOTES
[1] The May 19 Order specifically defines "Future Claimants" to include:
All persons, whether known or unknown, born or unborn, who may, after the date of confirmation of Piper's chapter 11 plan of reorganization, assert a claim or claims for personal injury, property damage, wrongful death, damages, contribution and/or indemnification, based in whole or in part upon events occurring or arising after the Confirmation Date, including claims based on the law of product liability, against Piper or its successor arising out of or relating to aircraft or parts manufactured and sold, designed, distributed or supported by Piper prior to the Confirmation Date.
[2] The Motion for Estimation of the Claims of the Piper Future Claimants for Voting Purposes was filed by the Legal Representative pursuant to Federal Rules of Bankruptcy Procedure 3018(a) and 9014.
[3] When the Debtor sought appointment of the Legal Representative, it believed that a plan of reorganization based upon a sale of assets would have to make provision for the interests of Future Claimants, whether or not they had "claims." The Debtor and the Committee now believe that providing for Future Claimants is unnecessary to attract viable purchase offers and legally impermissible if, as the Legal Representative argues, the Future Claimants can be treated under a plan only if they have "claims."
[4] On December 9, 1993, the Legal Representative filed a Motion for Stay Pending Appeal. The motion for stay was argued and denied on December 16, 1993.
[5] While Chapter X defined claim broadly, most corporations elected to file under Chapter XI to avoid a clause in Chapter X that provided for the automatic removal of management and the appointment of a Trustee upon the filing of a petition.
[6] H.R.Rep. No. 595, 95th Cong., 2d Sess. 309, reprinted in 1978 U.S.Code Cong. & Ad.News 5963, 6266; see also, S.Rep. No. 989, 95th Cong., 2d Sess. 21-22, reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5807-08.
[7] Under California law, actions based on progressively developing or continuing wrongs where the nature, extent or permanence of the harm are difficult to discover, do not accrue until the injured party knows or should have known of the cause of injury. In re A.H. Robins Co., 63 B.R. at 989.
[8] On appeal, the District Court found that known potential claimants were entitled to actual personal notice; that potential claimants who could not be personally identified were entitled to reasonable notice by publication; and that potential future claims of individuals who had not manifested any detectable signs of disease when notice of the bar date was given were not discharged in the bankruptcy case. Waterman, 157 B.R. at 222 (S.D.N.Y.1993).
[9] There is also no "great wrong" to be redressed in this case which mandates that present provisions be made for potential future claimants. In the asbestos and Dalkon Shield cases, manufacturers had produced and distributed products known to be harmful from well-documented and overwhelmingly accepted scientific evidence, and a defined group of individuals were exposed to these harmful products and could be expected to manifest injuries as a result. Here, although Piper has been involved in product liability litigation related to its manufacture, design, sale and distribution of aircraft and parts, and has expended considerable funds in such litigation, only a very small percentage of Piper aircraft will be involved in crashes, and only a fraction of those crashes are likely to result from prepetition manufacturing or design defects.
[10] Under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), the EPA, upon discovery of a release or substantial threat of release of hazardous substances into the environment, may either order the potentially responsible party to take remedial measures, or take such measures itself and then seek reimbursement for such response costs after they are incurred.
[11] The court expressly noted that not all prepetition conduct would necessarily give rise to a prepetition claim, but only that conduct expressly contemplated by CERCLA to give rise to liability: "[T]he District Court did not go so far as to include CERCLA response costs attributable to any action of the debtor that occurred pre-petition, such as the construction of a storage facility. Instead, the Court carefully limited its ruling to pre-petition releases or threatened releases of hazardous substances." Id. at 1005.
[12] At least one court has found that even the test applied in Chateaugay was too broad. See In re Jensen, 995 F.2d 925 (9th Cir.1993). In Jensen, the Ninth Circuit found that there must not only be a relationship between the claimant and the debtor, but that their prepetition interaction must be such that the claim is within the "fair contemplation" of the parties at the time of the bankruptcy. Id. at 930.
[13] Thus, the Court makes no finding that the relationship between Piper and prepetition owners of Piper aircraft would give rise to "claims" even for this relatively small and identifiable subclass of Future Claimants.
[14] If the Legal Representative's proposed application of the Conduct Test had been adopted in the earlier cases, the claims in the asbestos and Dalkon Shield cases would have arisen at the time of manufacture or design of the dangerous products, rather than at the time of contact between the products and the future claimants. The Conduct Test cases clearly did not reach such results on their facts, nor would they require the result sought by the Legal Representative here.
[15] The Legal Representative argues, correctly, that a plan could provide for the Future Claimants by setting aside some portion of the plan distributions for their benefit. However, the Legal Representative also has steadfastly asserted that Future Claimants must be found to have "claims" to be treated under a plan in the instant case. Compare, Matter of Johns-Manville Corp., 68 B.R. 618, 628 (Bankr.S.D.N.Y.1986), aff'd in part, rev'd in part, 78 B.R. 407 (S.D.N.Y.1987), aff'd sub nom. Kane v. Johns-Manville Corp., 843 F.2d 636 (2d Cir.1988), in which the plan provided for future asbestosis victims without determining that they had claims. The theoretical ability to provide a fund for the Future Claimants does not help resolve the independent and threshold issue of whether or not they have "claims".
[16] The simple truth that timing matters is evident in numerous provisions of the Bankruptcy Code, including the avoidance provisions in § 547 and § 548. Creditor Jones, paid in full 91 days before the petition, may keep his money while creditor Smith, paid the very next day, will have to disgorge the entire amount and share in any distributions to unsecured creditors. If timing was irrelevant, then Congress would have allowed the Trustee to reach back indefinitely to recover all prepetition payments made by insolvent debtors. Instead, Congress created a relatively arbitrary period of backward reach. Similarly, the Code does not permit or contemplate the indefinite, unlimited forward reach urged by the Legal Representative, even though it might foster the theoretical goal of equitable distribution.
[17] Since postpetition, pre-confirmation claims are not within the defined group of Future Claimants, this decision does not determine the nature or treatment of such claims. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1529089/ | 679 F. Supp. 1011 (1988)
Martha ROBINSON, Plaintiff,
v.
Otis R. BOWEN, M.D., Secretary of Health and Human Services, Defendant.
Civ. A. No. 84-1226-T.
United States District Court, D. Kansas.
February 18, 1988.
*1012 David H.M. Gray of Gragert, Hiebert & Gray, Wichita, Kan., for plaintiff.
Benjamin L. Burgess, Jr., U.S. Atty. by Stephen K. Lester, Asst. U.S. Atty., Wichita, Kan., Harry B. Mallin, Asst. Regional Counsel, Dept. of Health & Human Services, for defendant.
OPINION AND ORDER
THEIS, Senior District Judge.
This matter comes before the court on the motion of plaintiff Martha Robinson for attorney fees pursuant to the Equal Access to Justice Act (hereinafter "EAJA"), 28 U.S.C. § 2412, for assistance provided by counsel in an action to resume her eligibility for Social Security benefits. The Secretary responded to the motion; Robinson did not file a reply brief. After considering the briefs and the relevant case law, the court is prepared to rule.
PROCEDURAL HISTORY
An extended recitation of the history of this case and the Social Security disability benefits program during the 1980's is essential to resolve this case. The Secretary determined Robinson's schizophrenia disabled her in May 1972. Ten years later in October 1982, the Secretary concluded Robinson no longer suffered a continuing disability and terminated her benefits. Robinson pursued the appropriate administrative remedies without success.
In April 1984, Robinson filed an appeal pursuant to 42 U.S.C. § 405(g) in this court. The Secretary submitted a motion and memorandum urging the court to affirm the administrative decision. On October 2, 1984, Robinson filed a cross-motion for summary judgment or remand. A week later, Congress enacted the Social Security Disability Benefits Reform Act of 1984 (hereinafter the "Reform Act"), Pub.L. No. 98-460, 98 Stat. 1794 (October 9, 1984). Section 2(d)(2)(C) of the Reform Act mandated that the Secretary redetermine the termination of benefits on all actions "to which a request for judicial review was pending on September 19, 1984." The Reform Act instructed the Secretary to use the "medical improvement" standard of section 2(a) of the Act, 42 U.S.C. § 1395(f), when reevaluating eligibility terminations. This court granted the Secretary's motion to remand in November 1984. Dkt. no. 14.
*1013 After nearly a year and a half without action by the Secretary on Robinson's case, the court sustained her motion to require the Secretary to provide a definite date of redetermination by April 30, 1986. The Secretary's response stated he would likely make a decision by May 31, 1986. Robinson received notice of the resumption of her benefits on March 8, 1987.
The path to the Reform Act and Robinson's lengthy redetermination of benefits begins in the last decade. During the 1970's, the cost of the Social Security program rose rapidly for several reasons. First, an increasing number of persons received benefits for the first time. Second, few persons that already received benefits lost them. The percentage of persons with benefits that the Secretary terminated benefit eligibility after reevaluation of their condition drastically declined during the 1970's. H.R.Rep. No. 98-618, 99th Cong., 1st Sess. 10, reprinted in 1984 U.S.Code Cong. & Admin. News 3038, 3047 (hereinafter H.R. Rep. No. 98-618).
In an effort to contain the rising number of beneficiaries and the corresponding increase in the cost of the program, Congress passed measures in 1980, effective January 1, 1982, to increase the number and frequency of disability reevaluations. With more reevaluations, Congress thought the Secretary could more quickly discover the recipients that were no longer disabled. In March 1981, before the 1980 amendments took effect, the Department of Health and Human Services increased the pace and total number of reevaluations far beyond the timetable set out in the 1980 amendments. During the reevaluations, the burden of proof was on the disability beneficiary to demonstrate his or her continuing disability. Id. The difficult standard of review and more rigorous "`adjudicative climate'" resulted in the termination of benefits for nearly half of those reevaluated. Id. at 3047-48.
Appeals by the persons with benefits recently terminated flowed into the federal courts. The courts of appeals quickly and emphatically rejected the Secretary's "continuing disability" reevaluation standard. When Congress enacted the Reform Act with the "medical improvement" disability standard, eleven courts of appeals, including the Tenth Circuit, had adopted the medical improvement standard. Velazquez v. Heckler, 610 F. Supp. 328, 330 (S.D.N.Y. 1984) (collecting cases). After passage of the Reform Act, the Secretary needed to reexamine the termination of benefits in more than 400,000 cases. Dkt. no. 17 at 2.
DISCUSSION
A disability claimant may receive attorney fees under the EAJA if: 1. the claimant is a "prevailing party;" and 2. the "position" of the United States was not "substantially justified"; or 3. some special circumstance would "make an award unjust." 28 U.S.C. § 2412(d)(1)(a).
A. PREVAILING PARTY
The Secretary correctly points out that the Tenth Circuit recognizes two tests in deciding whether a litigant is a "prevailing party." Under the first test, applicable when the court renders a decision on the merits, a litigant is considered a prevailing party when he or she "achieve[s] `some of the benefit the party sought in bringing the suit.'" Wyoming Wildlife Federation v. United States, 792 F.2d 981, 983 (10th Cir. 1986) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-9 (1st Cir.1978)). The second test, applicable when the case settles without a court decision as it did here, is called the catalyst test. The Tenth Circuit formulation of the catalyst test states: "First, plaintiff's lawsuit must be causally linked to the securing of the relief obtained. Second, the defendant's conduct in response to the lawsuit must be required by law." Operation Engineers Local Union No. 3 v. Bohn, 737 F.2d 860, 863 (10th Cir.1984).
The Secretary disputes the first criterion of the catalyst test. He alleges no causal link exists between Robinson's suit and her favorable redetermination of benefits. The Secretary buttresses his contention with a statutory argument and a recent decision from another district court in this circuit. Neither contention is persuasive.
*1014 In Cruz v. Bowen, 668 F. Supp. 669 (D.Utah 1987), the court found no causal link between Cruz's suit challenging his initial denial of benefits and the Secretary's favorable redetermination of that denial. The court concluded the Secretary's favorable action resulted from: 1. the new regulations promulgated pursuant to § 5 of the Reform Act and 2. the review required by § 5 of the Reform Act of all initial determinations made under the pre-Reform Act regulations. Id. at 673-4.
Both factors crucial to the Cruz court's holding of no causal link are distinguishable from the instant case. First, unlike the automatic redetermination in Cruz, the Secretary would only redetermine Robinson's case if she had an appeal pending in federal court. Compare § 5(c)(1) with § 2(d)(2)(C) of the Reform Act. Second, the Secretary conducted Cruz's redetermination with totally new standards. The standard used in Robinson's redetermination was the same one that this court, this circuit and nine other circuits applied before the Reform Act and would have applied but for the remands required by the Reform Act. Dkt. no. 14 at 1; Velazquez, 610 F.Supp. at 330. Cruz is not dispositive on this question.
The Secretary's other allegation against finding causation is that section 2(d)(2) of the Reform Act mandated a remand of Robinson's case. While not cited by the Secretary, the court is aware of two cases supporting the Secretary's position. McCarroll v. Bowen, 661 F. Supp. 1163, 1164 (D.N.J.1987); Mathus v. Heckler, 661 F. Supp. 241, 242-3 (N.D.Ill.1987). Both courts deny prevailing party status to the plaintiff because of their interpretation of the type of remand issued. These two courts distinguish between a remand by a court after a review on the merits and the mandatory review dictated by section 2 of the Reform Act. Apparently based on the remand argument, the two courts summarily reject the catalyst argument without any analysis. McCarroll, 661 F.Supp. at 1164; Mathus, 661 F.Supp. at 242-3.
This court disregards these unexplained decisions. The McCarroll and Mathus courts fail to mention or analyze the legal and public policy history leading to the Reform Act. Second, the courts talismanic use of the term "remand" is unwarranted. Whiting v. Bowen, 671 F. Supp. 1219, 1222-4 (W.D.Wis.1987) (exhaustive refutation of the remand argument). Third, the court would have reviewed Robinson's case in October 1984 under the medical improvement standard. As explained below, the court would have found the Secretary's view not supported by substantial evidence and awarded benefits and attorney fees to Robinson. The Secretary is now attempting to avoid attorney fees liability because the Reform Act directed immediate review of this case, if it was on appeal in federal court. The fortuitous enactment of the Reform Act, designed to force the Secretary to comply with the rulings of eleven courts of appeals, cannot now act as a shield to prevent this court from awarding attorney fees to the very persons harmed by the Secretary's policy of nonacquiescence. Sherman v. Bowen, 647 F. Supp. 700, 703 (D.Me.1986).
The court concludes Robinson is a prevailing party under the catalyst test for the following reasons. First, Robinson's suit and the thousands of others like it directly contributed to the overwhelming body of law in the courts of appeals approving of the medical improvement standard and to Congress passing the Reform Act. Congress adopted the medical improvement standard to "conform with the standard practices of Federal law, through acquiescence in Federal Court of Appeals rulings." H.R.Rep. No. 98-618, 1984 U.S. Code Cong. & Admin.News at 3039 (emphasis added).
Several other courts also conclude that the multitude of challenges by litigants to the Secretary's "continuing disability" standard are a direct link to passage of the Reform Act and the litigant's ultimate resumption of benefits. Vitale v. Secretary of Health and Human Services, 673 F. Supp. 1171, 1176 (N.D.N.Y.1987); Whiting v. Bowen, 671 F. Supp. 1219, 1224 (W.D. Wis.1987) ("Plaintiffs' suit and others like them contributed to Congress's perception *1015 of a problem in the disability benefits program and to the passage of the Reform Act."); Stone v. Heckler, 658 F. Supp. 670, 673 (S.D.Ill.1987) ("The failure to follow judicial precedent [the Secretary's policy of `nonacquiescence' in the law of a circuit] and the resulting avalanche of litigation prompted Congress to take action by enacting the Reform Act of 1984...."). Contra Mathus v. Heckler, 661 F. Supp. 241, 243 (N.D.Ill.1987).
Second, Robinson could not benefit from the Reform Act if she did not appeal her case to federal court. This court remanded Robinson's case because she filed her appeal within the time proscribed by § 2(d)(2)(C) of the Reform Act. Her filing of the 42 U.S.C. § 405(g) appeal was a prerequisite to the remand and demonstrates the causal link between her suit and the favorable redetermination of benefits. Hall v. Bowen, 672 F. Supp. 667, 670 (E.D. N.Y.1987).
Third, the policy of the EAJA supports the court in finding that Robinson was the prevailing party. Congress perceived that an absence of money to pay counsel prevented many individuals from challenging government conduct. By allowing attorney fees to parties who prevailed over the government, Congress attempted to limit the disparity in power between individuals and the government. H.R.Rep. No. 96-1418, 96th Cong., 2d Sess. 6, reprinted in 1980 U.S.Code Cong. & Admin.News 4984 (hereinafter H.R.Rep. No. 96-1418). By exercising their enhanced power and challenging a government position, citizens would help refine and formulate public policy and insure the "legitimacy and fairness of the law." Id. at 9-10, 1980 U.S.Code Cong. & Admin.News at 4988-89. In short, "fee-shifting becomes an instrument for curbing ... the unreasonable exercise of Government authority." Id. at 12, 1980 U.S.Code Cong. & Admin.News at 4991. The House affirmed the original purposes of the EAJA when it passed amendments to the EAJA in 1985. H.R.Rep. No. 99-120, 99th Cong., 1st Sess. 4, reprinted in 1985 U.S.Code Cong. & Admin.News 132, 133.
The court is convinced that Robinson is a party the drafters of the EAJA envisioned a court would consider a "prevailing party." When faced with the termination of benefits under a standard rejected by the relevant circuit court of appeals, Robinson challenged the Secretary's decision. As noted above, her action and that of many others led to Congress' intervention. Her suit played a part in formulating public policy and ensuring fair regulations governed disability benefit termination proceedings. H.R.Rep. No. 96-1418 at 9-10, 1980 U.S.Code Cong. & Admin.News at 4988-89. Other courts concur in this assessment. Vitale, 673 F.Supp. at 1177 ("finding that plaintiff Vitale is a prevailing party under the EAJA is entirely consistent with the purpose of the EAJA, which is to encourage individuals to challenge unreasonable government conduct"); Whiting, 671 F.Supp. at 1225; Stone, 658 F. Supp. 675 (the legislative purpose of the EAJA is "that the expense of correcting error on the part of the Government should not rest wholly on the party whose willingness to litigate has helped define the limits of federal authority,....").
Two other courts, without significant analysis, found a causal link sufficient to satisfy the catalyst test in cases with procedural histories identical to the instant case. Hall, 672 F.Supp. at 670; Sherman, 647 F.Supp. at 703. The court draws additional support from these decisions.
In sum, the court resolves the prevailing party question in Robinson's favor. The court finds Robinson's suit was a catalyst to passage of the Reform Act and a prerequisite to a remand pursuant to the Act and that designating Robinson a prevailing party is completely in accord with the policy of the EAJA.
B. SUBSTANTIALLY JUSTIFIED
The substantially justified question of an EAJA attorney fee request involves two interrelated parts. The court must evaluate what "position" the Government took in the litigation and whether it had "substantial justification" for that position. The position of the Government includes its *1016 civil litigation posture and the action or inaction taken by the agency that led to the civil action. 28 U.S.C. § 2412(d)(2)(D). Substantial justification for the Government's position is a question of reasonableness in law and fact. Kemp v. Bowen, 822 F.2d 966, 967 (10th Cir.1987).
The Secretary's position at all times during this case was that he would terminate benefits if the recipient could not show a continuing disability. The appropriate standard in this circuit was the more lenient medical improvement test. The Tenth Circuit announced this test in 1981 in Van Natter v. Secretary of Health, Education and Welfare, No. 79-1439, slip op. at 6-7. The Secretary suggested Van Natter did not squarely hold in favor of the medical improvement standard in Trujillo v. Heckler, 569 F. Supp. 631, 635 (D.Col. 1983). The district court "unequivocally" rejected this attack. Id.
In August 1984, just eight days after the Secretary filed its final brief in this case, the Tenth Circuit reaffirmed that Van Natter stated the medical improvement test and was the law of the circuit. The court explained, "(t)his formulation (the medical improvement standard), although phrased somewhat differently, has been approved by at least five other circuits, including this one." Byron v. Heckler, 742 F.2d 1232, 1236 (10th Cir.1984) (citing Van Natter) (emphasis added). This court also recognized the Secretary's policy of nonacquiescence in the law of the circuit in its order remanding the case. Dkt. no. 14 at 1.
The Secretary had no reasonable legal basis for using the continuing disability standard. The Secretary's misconception of the law is sufficient evidence of the absence of substantial justification for the Government's position. DeWilde v. Bowen, No. 85-1911-K, slip op. at 2 (D.Kan. April 30, 1987) [Available on WESTLAW, 1987 WL 45085.]
The Secretary's position also lacked a reasonable factual basis. The evidence used to support the Secretary's decision to terminate benefits is dubious at best. The Secretary relied on the medical opinion of Dr. William Klontz and psychiatric social worker Carol Schrag to cut off benefits and contest her appeals. Klontz's opinion is seriously compromised by his own admission that he saw Robinson for only 75 minutes in five sessions spread out over more than a year. Tr. 165. Robinson corroborated Klontz's calculation of the time they spent together. She testified she saw him for more than five minutes on only several occasions. Tr. 29, 30, 36.
The Secretary cites Schrag's letter of September 20, 1982, which detailed Robinson's progress during the previous two years, to support the decision to terminate benefits. Tr. 166-7. Schrag's September 20 evaluation is completely undercut by her report on the following day: "The patient was seen on September 20, 1982 in a state of paranoia, anger and depression that was similar to intake report in April, 1980 (the date when Robinson began treatment)." Tr. 168. She provided no other report. Subsequent extensive evaluations in 1983 by Dr. George, Robinson's treating physician in the 1970's, and Dr. Leisy found Robinson's mental illness continued to render her disabled. Tr. 177-79. The Secretary lacked substantial justification for terminating Robinson's eligibility for benefits.
C. SOME SPECIAL CIRCUMSTANCE
The final statutory criterion under the EAJA is whether some special circumstance exists that would make an award of attorney fees unjust. 28 U.S.C. § 2412(d)(1)(A). The Secretary proffered no special circumstance and the court is unable to discern one. Therefore, the court finds Robinson is entitled to attorney fees pursuant to the EAJA.
D. ATTORNEY FEES
Robinson requests attorney fees at the rate of one hundred dollars ($100.00) per hour for 30.55 hours of federal court representation on the merits of the suit and 2.65 hours in preparing the EAJA petition. Robinson supports her request for fees above the statutory rate of seventy-five dollars per hour by noting the contingent nature of the fee, the lengthy nature of the *1017 case, the successful result, the nearly thirty percent increase in the cost of living since the enactment of the EAJA, and the quality of representation provided by counsel.
This court previously recognized that the contingent fee arrangement was a permissible factor to consider in determining an EAJA fee request. Jones v. Bowen, 682 F. Supp. 1176, 1177 (D.Kan.1986). The court adheres to this view. Throughout this opinion, the court has discussed the lengthy delays in this case and the ultimate success of Robinson both factors point to an enhancement of the statutory rate. The court is familiar with Robinson's counsel's professional and extensive representation of Social Security claimants. The court readily finds the fee request of one hundred dollars per hour reasonable. See Jones, 682 F.Supp. at 1177; DeWilde, slip op. at 3-5.
The court scrutinized Robinson's time records and finds the time expended on this case a reasonable amount. Pursuant to a prior award of attorney fees under 42 U.S.C. § 406(b)(1) to Robinson, the court makes the following award of fees.
IT IS BY THE COURT THEREFORE ORDERED that plaintiff's motion for attorney fees in the amount of one hundred dollars per hour for 33.2 hours is hereby granted. The Secretary is ordered to pay $3,320.00 to plaintiff's counsel within sixty days of this Order. IT IS BY THE COURT FURTHER ORDERED that plaintiff's counsel refund $2,100.72 to plaintiff and retain the balance of the fee award. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623813/ | 569 So. 2d 1092 (1990)
Margaret B. LEMOINE, as Tutrix for Tamara Ann Moreau, Plaintiff-Appellee,
v.
SECURITY INDUSTRIAL INSURANCE COMPANY, Defendant-Appellant.
No. 89-482.
Court of Appeal of Louisiana, Third Circuit.
November 7, 1990.
Writ Denied January 18, 1991.
*1093 Peter J. Lemoine, Shreveport and Michael F. Kelly, Marksville, for plaintiff-appellee.
O'Neill J. Parenton, Jr., Donaldsonville, for defendant-appellant.
Before DOMENGEAUX, C.J., and STOKER and YELVERTON, JJ.
STOKER, Judge.
This appeal presents two issues for our review: (1) Whether the prescriptive section of LSA-R.S. 22:177 is applicable to a suit to recover the face amount of a life insurance policy upon the death of the insured and (2) whether the defendant-insurer is precluded from urging that a life insurance policy lapsed after it failed to send timely written notice to the insured in accordance with the provisions of LSA-R.S. 22:177. The trial court gave judgment in favor of the plaintiff. The defendant-insurer appeals. We affirm but for reasons differing from those of the trial court.
FACTS
Paul J. Moreau (the insured) died of a self-inflicted injury on November 11, 1984. Before his death the deceased had purchased an annual renewable life insurance policy with a face amount of $150,000. The issue date was September 21, 1981. Premiums were computed on this policy on an annual basis per $1,000 of life insurance. The premiums were adjusted on the anniversary date of the policy. The policy allowed for payment of premiums on an annual, semi-annual, quarterly or monthly basis with a 31-day grace period from the due date of any premium payment during which the policy remained in effect. The policy indicated that for the first year of the policy the annual premium was $420, the semi-annual premium was $218.40, the quarterly premium was $111.31 and the monthly premium was $35.71. The record reflects that the insured chose to pay premiums on a monthly basis. The policy allowed the insured the option of continued insurance coverage until the insured reached the age of 100 as long as he paid the premiums.
The stipulation of all counsel shows that all premiums were paid from September 21, 1981 through November 11, 1984, except for the months of August and October of 1984. Mr. James Morris, Senior Vice-president for Security Industrial Insurance Company, testified that the insured chose to pay his premiums through bank drafts. The August 1984 bank draft was returned NSF on August 23, 1984. The insurer allowed a few days for the policyholder to secure funds and redeposited the draft on September 4, 1984. In the meantime, the September premium was paid and credited to the August payment.
Mr. Morris testified that three premium notices were mailed by the insurer to the insured in the ordinary course of business: (1) a premium reminder notice with a stated due date of September 21, 1984; (2) a premium reminder notice with a stated due *1094 date of October 21, 1984; and (3) a premium reminder notice with a stated due date of November 21, 1984. The insured's widow testified at the trial and denied receiving the reminder notices in the mail and was not aware of the receipt of them by her husband before his death.
The defendant-insurer contends that the grace period expired 31 days after September 21, 1984, or October 22, 1984, thereby lapsing the coverage afforded under the policy in question prior to the death of the insured.
TRIAL COURT ACTION
Plaintiff filed a petition on August 25, 1988 seeking entitlement to benefits under the policy of life insurance in question. Subsequently, defendant filed an exception of prescription on November 7, 1988. The trial court did not grant the exception of prescription but referred the exception to the merits of the trial. At trial the trial judge did not make a specific ruling on the exception; thus, by implication he denied the exception. The trial court, in oral reasons for judgment, held in favor of the plaintiff by reading the policy in question to find that the plaintiff overpaid premiums in the second and third years of the policy. The trial court concluded that the premiums had been fully paid and held that the policy of life insurance was in force at the time of the death of the insured.
ASSIGNMENTS OF ERROR
Defendant urges three assignments of error: (1) that the trial court erred in granting a judgment for relief not warranted by the averments contained in the pleadings and the evidence; (2) that the trial court erred in its finding that premiums were overpaid in the second and third years of the policy; and (3) that the trial court erred in not granting defendant's exception of prescription.
The trial judge grounded his holding on the sole finding that the premiums had been fully paid and considered no other issues. The parties in their briefs addressed to us devote much of their argument to the question of whether this finding went beyond the pleadings so that the appellant, the insurer, had notice of this issue at the trial. We pretermit consideration of the pleading and notice issue as well as the issue concerning the trial court's reading of the policy so as to find that all premiums were fully paid. We find other reasons why the judgment in the plaintiff's favor should be affirmed.
In our opinion the policy of life insurance in question is governed by LSA-R.S. 22:177 which requires that certain notices be given the insured before an insurer may "declare forfeited or lapsed any policy issued or denied." We find that the insurer failed to prove that it gave the required notices. Under our jurisprudence, such failure estops an insurer from declaring a policy forfeited or lapsed. Consequently, the policy sued upon in this case was in effect at the time of the death of the insured, and the plaintiff is entitled to recover the proceeds of the policy.
NOTICE REQUIREMENTS OF LSA-R.S. 22:177
The provisions of LSA-R.S. 22:177 prohibit the lapsing of any life insurance policy for nonpayment of premiums within one year of a default in payment of any premiums in the absence of a written notice to the insured as prescribed by the statute except in the case of policies issued upon payment of weekly or monthly premiums or for a term of one year or less. Francis v. Universal Life Insurance Company, 223 So. 2d 188 (La.App.3d Cir.), writ refused, 254 La. 781, 226 So. 2d 771 (1969); Guillot v. Atlas Life Insurance Company, 245 So. 2d 788 (La.App. 4th Cir.), writ refused, 258 La. 577, 247 So. 2d 394 (1971), and Vining v. State Farm Life Insurance Company, 409 So. 2d 1306 (La.App.2d Cir.), writ denied, 412 So. 2d 1098 (La.1982).
The actual provisions of LSA-R.S. 177 are, in pertinent part, as follows:
"§ 177. Written notice required before lapsing life policies
"No life insurer shall within one year after default in payment of any premium, installment, loan or interest, declare *1095 forfeited or lapsed any policy issued or renewed, and not issued upon the payment of monthly or weekly premiums or for a term of one year or less, for non-payment when due of any premium, installment, loan or interest, or any portion thereof required by the terms of the policy to be paid, unless a written or printed notice stating:
"(1) The amount of such premium, installment, loan or interest, or portion thereof due on such policy; and
"(2) The place where it shall be paid and the person to whom the same is payable, shall have been duly addressed and mailed to the person whose life is insured or the assignee of the policy if notice of the assignment has been given to the insurer, at the last known post office address of such insured or assignee, postage prepared by the insurer or any person appointed by it to collect such payment, at least fifteen and not more than forty-five days prior to the date when the same is payable.
"No policy shall in any case be forfeited or declared forfeited or lapsed until the expiration of thirty days after the mailing of such notice."
Given the notice provisions of this statute, two factual questions must be decided: (1) Is the policy in question an "annual renewable" policy so as to be governed by the statute, or is it a policy issued upon payment of monthly premiums or for a term of one year or less which would cause it to fall within the exception noted in the statute and not be governed by the statute; and (2) If the policy is not excepted from the provisions of LSA-R.S. 22:177, then did the defendant fail to send notice of the premium due in accordance with the appropriate provisions of the statute so as to preclude the insurer from urging that the policy lapsed?
IS THE POLICY EXCEPTED FROM THE STATUTE?
We hold that the life insurance policy in question was an annual renewable policy. It was not a policy issued upon payment of monthly premiums or for a term of one year or less. By its terms the policy provided for payment of premiums annually but accorded the insured the option of paying the annual premiums on an annual, semi-annual, quarterly or monthly basis. As set forth on the declarations page of the policy (page 1), the defendant-insurer agreed to pay the face amount of the policy if death occurred while the policy was in full force "during the Term Period as designated in the policy." The declaration page contains the following:
"LEVEL TERM TO 100 WITH INCREASING PREMIUMS PREMIUMS PAYABLE DURING LIFETIME OF INSURED FOR NUMBER OF YEARS STATED IN POLICY SPECIFICATIONSFACE AMOUNT PAYABLE AT DEATH OF INSURED DURING TERM PERIODACTUAL PREMIUMS CHARGED ON THIS POLICY MAY BE LOWER THAN THE GUARANTEED RATES SHOWN ON PAGE 7, BUT NEVER MORE THAN THOSE SHOWN."
Other provisions of the policy indicate that the policy was issued upon the payment of an annual, rather than a monthly premium. On page 2, for example, the policy sets forth the annual premiums and then states the amount due under semi-annual, quarterly and monthly premium payment methods. On page 7 an "Attained Age Premiums" table clearly indicates the policy is issued upon the payment of annual premiums.
The insurance specialists who testified, including Mr. James Miller, an officer of the defendant company, agreed that the policy is an annual renewable policy. This means that the premiums are calculated on an annual basis and not on a monthly basis. The testimony of the insurance specialists established that the policy was not issued for a term of one year or less which would give the company the option to renew, or decline to renew, the policy at the end of a given term. Rather, the policy gives the insured the option to renew each successive year until he reached the age of 100. Therefore, the "term period" was "level term to 100."
*1096 Factors similar to those we consider here were thoroughly considered in Francis, supra; Guillot, supra, and Vining, supra. In each there was no question but that the policy construed in each case was an annual premium policy. We consider that these cases state the correct law. Accordingly, we hold that the policy in this case issued to the deceased, Paul J. Moreau, was not excepted from the provisions of LSA-R.S. 22:177 and is thus governed by its provisions.
APPLICATION GIVEN TO LSA-R.S. 22:177
The court in Vining commented on the nature of the statute. Based on prior jurisprudence, the court observed that LSA-R.S. 22:177 is a forfeiture statute, and thus must be strictly construed. Its purpose is to protect insureds against loss of their policies through mere neglect to pay premiums and to give them a fair chance to meet the payments when due. Vining, at 1309 and 1310. For a discussion of public policy considerations applied to a similar statute, see McKenzie and Johnson, Louisiana Civil Law Treatise, Insurance Law & Practice, Section 264.
The following quotation from Vining illustrates the application given to the statute regarding notice requirements:
"A review of the evidence presented at trial leads us to conclude that the policy neither lapsed nor was forfeited because defendant failed to prove by competent evidence compliance with the written notice requirements of La.R.S. 22:177." Vining at 1310.
* * * * * *
"In summation, our conclusion is inescapable. By its terms the policy in question fell under the provisions of La.R.S. 22:177; thus, notice was required. The evidence offered to prove such notice was clearly inadmissible hearsay in that defendant's computer records are inadmissible in the instant case because a proper foundation was not laid to establish their trustworthiness and accuracy. It logically follows that Hardee's testimony about what the computer customarily did or what its records told him it did is likewise hearsay. There being no competent evidence proving that defendant sent the required notice, under the provisions of the applicable statute the defendant is therefore estopped by law from declaring the life insurance policy forfeited or lapsed for a period of one year after default in payment of the September 14, 1978, premium and the October 2, 1978 partial premium. See Boring v. Louisiana State Insurance Co., supra [154 La. 549, 97 So. 856 (1923)]. The policy was therefore in force on November 16, 1978, when Braswell was accidentally killed." Vining at 1313.
Whether or not a failure to comply with the notice requirements of the statute calls for a true estoppel, the effect is to prohibit the insurer from declaring a forfeiture or lapse in a policy for the one-year period following default in payment of a premium. This brings us to the factual question of whether the defendant life insurer gave timely written notice prior to declaring the subject policy forfeited.
DID THE DEFENDANT-INSURER PROVE NOTICE?
The trial judge did not consider the factual matters we consider. Nevertheless, the trial judge made the gratuitous statement that the requisite notices "probably" were sent but noted there was no specific testimony that they were sent. While we do not regard the trial judge's comment as binding on us, the statement itself shows that the trial judge was merely speculating rather than making a finding of fact. In the absence of a finding of fact by the trial court, we look to the record to determine the facts as to notice. Robertson v. Travis, 393 So. 2d 304, 310 (La.App. 1st Cir.1980), writ denied, 397 So. 2d 805 (La.1981).
The record reflects that the defendant attempted to prove that the insurer mailed timely written notices to the insured through the testimony of Mr. James Morris and through the documentary evidence. However, the defendant did not introduce any document from its business records *1097 which would indicate that the written notices were actually mailed to the insured. The testimony reflects that Mr. Morris acknowledged that he had no direct evidence that any notices were ever mailed to the insured; he acknowledged that human error could have occurred in the process of mailing the notices by regular mail; and he acknowledged that he could only assume the notices were mailed in the ordinary course of the defendant-insurer's business.
The law requires that the insurer carry the burden of establishing facts which will relieve it from liability where the insured defends on the grounds that the policy has lapsed or has been forfeited. Vining, supra. A review of Mr. Morris' testimony clearly shows that he was testifying as to what he concluded probably happened, assuming the internal mechanisms of his office operated the way they usually and customarily operated. Under the circumstances defendant did not carry its burden to prove that the written notice requirements of LSA-R.S. 22:177 were met. Therefore, we hold that the policy was in effect on the date of the death of the insured.
THE PRESCRIPTION ISSUE
As noted above the defendant-insurer in this case filed an exception of prescription which the trial court referred to the merits. The trial court gave judgment against the defendant-insurer without ruling on the exception. The defendant assigns as error the failure of the trial judge to sustain the exception of prescription. We hold that the exception is not well founded.
LSA-R.S. 22:177 contains a provision setting forth a prescriptive period for bringing suits to recover under forfeited policies. The statute provides:
"No action shall be maintained to recover under a forfeited policy, unless the same is instituted within two years from the day upon which default was made in paying the premium, installment, interest or portion thereof for which it is claimed that forfeiture ensued. This Section shall not apply to group insurance policies."
By its terms this prescriptive provision applies only to policies truly forfeited. We hold that the policy under consideration in this case was not forfeited. Therefore, the prescriptive period does not apply. We agree with plaintiff-appellee that the determinative case in this area is Compton v. Amicable Life Insurance Company of Waco, Tex., 182 La. 991, 162 So. 751 (1935). See also Frey v. Great Southern Life Ins. Co., 167 So. 480 (La.App.2d Cir.1936). In Compton, the plaintiff sued for a disability benefit under a life insurance policy. The defendant contended that the plaintiff's action was barred by the two-year prescriptive period applicable to actions on forfeited policies. In Compton, the statute in question was Act 68 of 1906, the precursor statute to LSA-R.S. 22:177. The court disagreed with defendant and stated:
"The plea of prescription is not well founded, for the simple reason that the plaintiff is not suing `to recover under a forfeited policy,' The only instance in which a suit `to recover under a forfeited policy' may be maintained is when the suit is for something which the plaintiff is entitled to notwithstanding the policy has lapsed or become forfeited; e.g., a suit for the cash surrender value of the policy. The prescription provided for in this statute was pleaded and sustained against an action for the cash surrender value of a life insurance policy which had lapsed or become forfeited for nonpayment of the premiums, in the case of Watson v. Mutual Life Insurance Company of New York, 139 La. 737, 72 So. 189. It would be anomalous to apply this statute of limitations to a suit for the amount of life insurance or disability insurance stipulated in a policy alleged to be not lapsed or forfeited. A suit `to recover under a forfeited policy' the amount of the insurance could not be maintained, no matter how soon it is instituted after the default in the payment of the premium. Besides, a suit to collect life insurance cannot be brought until the insured has died, which might be later than two years after a default in *1098 the payment of a premium, for which a forfeiture is claimed by the company.
"Act No. 68 of 1906 is a copy, almost verbatim, of the New York Insurance Law of 1892, c. 690, § 92, as amended by the Laws of 1897, c. 218, § 2, and by the Laws of 1906, ch. 326, § 29 (McKinney's Consol. Laws of N.Y. Anno. Book 27, p. 144, sec. 92). That part of the statute which establishes the limitation, or prescription, is exactly the same in the Louisiana statute as in the New York statute. The New York Court of Appeals maintains that the statute is not applicable to a suit on a policy alleged to be not forfeited, or alleged to have been illegally declared forfeited by the company.
"It is plain, therefore, that this statute of limitations, or prescription, is applicable only to a suit to recover something which the plaintiff might be entitled to notwithstanding the policy of insurance has lapsed or become forfeited." Compton, at pp. 755-756.
In the instant case we are not confronted with a forfeited policy of insurance because the defendant did not send timely notice in compliance with LSA-R.S. 22:177. Therefore, a plea of prescription is not well founded in this case because the plaintiff instituted suit to recover death benefits on the basis that the policy was not legally declared forfeited or was not forfeited at all. LSA-R.S. 22:177 only applies to actions seeking the recovery of something which is due, notwithstanding the fact that the policy has in fact been forfeited.
CONCLUSION
For the foregoing reasons the judgment of the lower court is affirmed. The costs of this appeal are assessed to defendant-appellant.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1671295/ | 705 S.W.2d 310 (1986)
REPUBLICBANK DALLAS, Appellant,
v.
The NATIONAL BANK OF DAINGERFIELD, Pat McGee, Marie McGee, Edwin McGee, and D.A. Hall, Appellees.
No. 9381.
Court of Appeals of Texas, Texarkana.
February 4, 1986.
Robert S. Leithiser, Leithiser & Palmer, Dallas, for appellant.
Patricia H. Florence, Florence & Florence, Hughes Springs, for appellee Bank of Daingerfield.
Steve Cowan, Daingerfield, for appellees, intervenors McGees and Hall.
BLEIL, Justice.
RepublicBank Dallas appeals from an order dissolving its writ of garnishment against The National Bank of Daingerfield. The central issue is whether the funds in a joint checking account subject to the order of any one of four people can be garnished for the debts of one of them. We find that RepublicBank cannot garnish the funds in the joint account involved in these proceedings because the judgment debtor's ownership interest in the account is no more than bare legal title. Thus the trial court properly dissolved the writ of garnishment.
RepublicBank has a final judgment against Edwin McGee for $3,274.32. Pat and Marie McGee, parents of Edwin McGee, maintained an account in The National Bank. No one else had ever deposited money into the account or withdrawn *311 money from the account. Pat and Marie McGee added the names of their children, Edwin McGee and D.A. Hall, to the account and to the signature card for the purpose of allowing their children access to the account so that the children could use the funds to take care of the parents if needed. Pat and Marie McGee did not intend to make a gift of the funds to their children.
RepublicBank applied for a writ of garnishment covering this account. The National Bank responded to the garnishment proceedings. Pat and Marie McGee and D.A. Hall intervened, moved to dissolve the writ of garnishment on the basis that the parents were the beneficial owners of all funds in the account, and asked the court to protect their ownership from garnishment. The trial court dissolved the writ of garnishment.
In most jurisdictions, joint bank accounts are vulnerable to seizure by the creditor of any of the depositors, but the creditor's right to seize the funds is limited to the funds in the account that are equitably owned by the debtor and does not extend to funds equitably owned by other parties. See generally 11 A.L.R. 3d 1465 (1967), and 38 C.J.S. Garnishment § 80 (1943). Texas appears to follow this general rule.
Ordinarily, a garnishor becomes subrogated to the rights of his debtor against the garnishee. That is, the garnishor steps into the shoes of his debtor as against the garnishee and may enforce whatever rights the debtor could have enforced had such debtor been suing the garnishee directly. Beggs v. Fite, 130 Tex. 46, 106 S.W.2d 1039 (1937); James Talcott, Inc. v. Valley Federal Savings & Loan Ass'n, 611 S.W.2d 692 (Tex.Civ.App.-Corpus Christi 1980, no writ). The comprehensive test of the liability of the garnishee is whether he could have been sued successfully by the judgment debtor. Pearson Grain Co. v. Plains Trucking Co., 494 S.W.2d 639 (Tex. Civ.App.-Amarillo 1973, writ ref'd n.r.e.).
Funds placed in a bank ordinarily become general deposits which create a debtor-creditor relationship between the bank and the depositor. Citizens National Bank of Dallas v. Hill, 505 S.W.2d 246 (Tex.1974). Had The National Bank refused to honor a withdrawal by Edwin McGee, it could have been successfully sued for that refusal by him; therefore, it appears that under the comprehensive test of the liability of the garnishee, the funds in the account would be subject to garnishment for his debts.
However, this comprehensive test is subject to a qualification when it is applied to the garnishment of assets owned by several parties. Even when garnishment is proper under the comprehensive test, assets owned by two or more persons can be reached by garnishment only to the extent of the judgment debtor's ownership interest in the jointly owned asset.
In garnishment cases, equitable title to the property sought to be reached prevails over bare legal title to the property. Silsbee State Bank v. French Market Grocery Co., 103 Tex. 629, 132 S.W. 465 (1910); Southwest Bank & Trust Co. v. Calmark Asset Management, Inc., 694 S.W.2d 199 (Tex.App.-Dallas 1985, writ ref'd n.r.e.); Smith v. Oak Cliff Bank & Trust Co., 99 S.W.2d 1103 (Tex.Civ.App.-Fort Worth 1936, no writ). In Silsbee, the Court opined that:
We do not think ... that it is true, as broadly as it is laid down by some writers, that a garnishing creditor of the depositor is substituted in his stead and can reach the deposit merely because the bank was bound to treat him as owner. The depositor controls the fund whether he is the true owner or not. The garnishing creditor can reach it only in case he is the true owner. (Emphasis added.)
Additionally, Tex.Prob.Code Ann. § 438 (Vernon 1980) appears to specifically support the conclusion that Pat and Marie McGee are the owners of the money in this account. It provides that during the lifetime of the parties a joint account belongs to the parties in proportion to the contributions each party has made to the amount on deposit. Tex. Prob. Code Ann. § 437 (Vernon Supp.1986) provides that Section *312 438 applies concerning ownership between parties to multiple party accounts in controversies between the parties and their creditors.
The trial court's findings of fact establish that the debtor, Edwin McGee, held only bare legal title to the funds in the account and that the equitable interest in the funds was solely and exclusively in Pat and Marie McGee. Although, initially, the trial court properly issued the writ of garnishment on this multiple party account, it correctly dissolved the writ when the extent of the judgment debtor's interest was shown to be no more than bare legal title.
We have reviewed all of RepublicBank's other points of error and find them to be without merit.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1375841/ | 866 F. Supp. 734 (1994)
Jane DOE I, on behalf of herself and all others similarly situated,
and
Jane Doe II, on behalf of herself, as administratrix of the estate of her deceased mother, and on behalf of all others similarly situated, Plaintiffs,
v.
Radovan KARADZIC, Defendant.
S. K.[*], on her own behalf and on behalf of her infant sons B. and O., Internationala Iniciative Zena Bosne I Hercegovine "Biser," and Zene Bosne I Hercegovine, Plaintiffs,
v.
Radovan KARADZIC, Defendant.
Nos. 93 Civ. 0878 (PKL), 93 Civ. 1163 (PKL).
United States District Court, S.D. New York.
September 7, 1994.
*735 Catharine A. MacKinnon, Legal Defense and Educ. Fund, New York City (Martha F. Davis, Deborah A. Ellis, and Anne L. Clark, of counsel), for plaintiffs S. K. et al.
Center for Constitutional Rights, New York City (Beth Stephens, Matthew J. Chachere, Jennifer Green, Peter Weiss, Michael Ratner, Jose Luis Morin, Jules Lobel, Raymond H. Brescia, of counsel), Intern. Women's Human Rights Clinic, CUNY Law School, Flushing, NY (Rhonda Copelon, Celina Romany, of counsel), and International League for Human Rights, New York City (Judith Levin, of counsel), for plaintiffs Jane Doe I, et al.
Ramsey Clark and Lawrence W. Schilling, New York City, for defendant.
Patton, Boggs & Blow (Deborah Lodge, Jeanine Poltronieri, of counsel); International Human Rights Law Group (Steven M. Schneebaum, Janelle M. Diller, of counsel), Washington, DC, Debevoise & Plimpton (Donald F. Donovan, Barton Legum, Charles E. Joseph, Natalie R. Williams, of counsel); and Human Rights Watch (Kenneth Roth, Julie Mertus, and Ellen Lutz, of counsel), New York City, amici curiae.
OPINION AND ORDER
LEISURE, District Judge:
These two related actions, Doe et al. v. Karadzic, 93 Civ. 0878 (PKL) and K. et al. v. Karadzic, 93 Civ. 1163 (PKL), have been brought before this Court pursuant to: the Alien Tort Claim Act, 28 U.S.C. § 1350 (1948); the Torture Victim Protection Act, Pub.L. No. 102-256, 106 Stat. 73 (1992) also codified at 28 U.S.C. § 1350; federal question jurisdiction, 28 U.S.C. § 1331; and the principles of supplemental jurisdiction, 28 U.S.C. § 1367.
Jane Doe I and Jane Doe II, on behalf of themselves and the members of their respective classes (collectively the "Doe Plaintiffs"), seek compensatory and punitive damages for acts of rape and other human rights violations committed by forces under the command and control of defendant Radovan Karadzic. Complaint Jane Doe I and Jane Doe II v. Radovan Karadzic, 93 Civ. 0878 (PKL), filed February 11, 1993, ("Doe Complaint") at ¶¶ 1, 6. Defendant Karadzic is the leader of the Bosnian-Serb military faction, which is fighting against the government of Bosnia-Herzegovina, id. at 6, and is also the self-proclaimed president of the unrecognized Bosnian-Serb entity. Doe Memorandum in Opposition to Defendant's Motion to Dismiss ("Doe Mem.") at 4; Doe Complaint at ¶ 15.
Plaintiffs in the related action, K. et al. v. Karadzic ("K. Plaintiffs"), seek injunctive relief and compensatory and punitive damages for personal injuries suffered as a result of inter alia, genocidal acts, torture, extrajudicial killing, and other violations of the law of nations. Complaint S. K. et al. v. Radovan Karadzic, 93 Civ. 1163 (PKL), filed March 2, 1993, ("K. Complaint") at ¶ 1. Doe Plaintiffs *736 and K. Plaintiffs (collectively the "plaintiffs") claim that they and others similarly situated are the victims of a genocidal campaign designed, authorized and directed by Karadzic.
Defendant Karadzic now moves pursuant to Fed.R.Civ.P. 12(b)(1), (2), (4), (5), and (6), for an order dismissing plaintiffs' actions on the following grounds: lack of subject matter jurisdiction, lack of personal jurisdiction, insufficiency of service of process, and nonjusticiability. For the reasons set forth below, defendant's motion to dismiss for lack of subject matter jurisdiction is granted and the actions are hereby dismissed.[1]
BACKGROUND
On February 29, 1992, the Croats and Muslims of Bosnia-Herzegovina declared independence from Yugoslavia by popular referendum. Serbs living within Bosnia-Herzegovina boycotted the referendum and declared their own independence from the new nation, claiming a part of its territory for their own.[2] This Bosnian-Serb entity has not been formally recognized internationally, nor has it been recognized by the United Nations. Doe Mem. at 4, n. 3; Doe Complaint at ¶ 15.[3] The conflict between the Serbs and Muslims of Bosnia-Herzegovina escalated towards a state of civil war between the several ethnic factions within Bosnia-Herzegovina. The instant related actions arise out of acts allegedly engaged in by members of the forces under the command of defendant, and conducted in furtherance of defendant's attempt to gain power and control in Bosnia-Herzegovina. Doe Mem. at 4-5; K. Memorandum Submitted in Opposition to Defendant's Motion ("K. Mem.") at 2.
On February 11, 1993, Doe Plaintiffs filed their class action complaint, seeking redress on behalf of all women and men who were victims of the following torts inflicted by Bosnian-Serb military forces under the command of defendant: genocide, war crimes,[4] summary execution, wrongful death, torture, cruel, inhuman or degrading treatment, assault and battery, rape and intentional infliction of emotional harm. The class includes many thousands of people who have been subject to human rights abuses. Doe Complaint at ¶¶ 10-11. Doe plaintiffs alleged that Bosnian-Serb forces have systematically employed brutal violence against Bosnian Muslims. These abuses are collectively referred to as "ethnic cleansing." Id. at ¶ 17.
K. Plaintiffs also allege that defendant Karadzic designed, ordered, implemented, and directed a campaign of "ethnic cleansing." K. Complaint at ¶ 14. K. Plaintiffs allege that this campaign included, inter alia, massacres, selective murders, pillage, forced detention, and forced evacuations. Specifically, K. herself alleges that she witnessed the murder of her son, the burning of her home, and that she was repeatedly raped. K. *737 Plaintiffs allege that these and other acts were conducted pursuant to the order and direction of defendant Karadzic, and that such acts continue to the present.
On February 11, 1993, the same day the Doe Complaint was filed, Jonathan Soroko ("Soroko") attempted to effect service on Karadzic in the lobby of Karadzic's hotel, the Hotel Inter-Continental, 111 East 48th Street, New York, New York. Affidavit of Jonathan Soroko, submitted in support of Doe Mem., sworn to on February 12, 1993 ("Soroko Aff."), at ¶ 4. At the time, Karadzic was surrounded by a security detachment led by Special Agent R.A. Diebler ("Diebler"), a Special Agent of the Diplomatic Security Service of the United States Department of State. When Soroko attempted to serve Karadzic, Diebler's security team executed a procedure designed to cover and evacuate Karadzic, forming a ring around Karadzic and rushing him into the elevator. Affidavit of Agent Roy Anthony Diebler, sworn to on September 30, 1993, ("Diebler Aff.") at ¶¶ 10-12.[5] The record contains conflicting affidavits regarding the attempted service. Soroko contends that he was no more than two feet from defendant, Soroko Aff. at ¶ 4, while Diebler contends that "the man [Soroko] could not have gotten any closer to Dr. Karadzic than 6-8 feet at the most." Diebler Aff. at ¶ 13. It is not disputed, however, that during the attempted service, Soroko called out words declaring that defendant was served. Soroko Aff. at ¶ 4; Diebler Aff. at ¶ 12. Diebler asserts that prior to leaving the United States, Karadzic had no knowledge that Soroko was attempting to serve him with process. Diebler Aff. at 14.
On March 2, 1993, K. Plaintiffs filed their related complaint, alleging tortious conduct, including, inter alia, rape, forced prostitution, forced pregnancy, forced childbirth, and gender and ethnic discrimination. On March 4, 1994, after attempts by professional process servers proved unsuccessful, see K. Mem. at 2, see also, Deibler Aff. at ¶ 17, the Honorable Richard Owen, United States District Judge, Southern District of New York, granted a motion for leave to effect service upon defendant by alternate means. On March 5, 1993, a copy of the summons and complaint was delivered by a United States Marshal to Special Agent Diebler, who personally delivered them that day to Karadzic. See K. Mem. at 2-3; Diebler Aff. at ¶ 18. On May 10, 1993, Karadzic filed the instant motion to dismiss.
DISCUSSION
I. Karadzic's Motion to Dismiss
A. INITIAL CONSIDERATIONS
As an initial matter, this Court notes that "federal judicial power is limited to those disputes ... which are traditionally thought to be capable of resolution through the judicial process." Flast v. Cohen, 392 U.S. 83, 97, 88 S. Ct. 1942, 1951, 20 L. Ed. 2d 947 (1968). It is well settled that no justiciable controversy is presented when the parties seek an advisory opinion. Id. at 95, 88 S.Ct. at 1949-50. Furthermore, "a judicial declaration subject to discretionary suspension by another branch of government may easily be characterized as an advisory opinion." Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure, at § 3529.1 (1984) (citations omitted).
Given that Karadzic's present lack of head-of-state immunity is conditioned upon a *738 decision of the Executive Branch not to recognize a Bosnian-Serb nation and not to acknowledge Karadzic as an official head-of-state,[6] plaintiffs' claims for relief could potentially become a request for an advisory opinion if the State Department were to declare defendant a Head of State. "A head-of-state recognized by the United States government is absolutely immune from personal jurisdiction in United States courts." Lafontant v. Aristide, 844 F. Supp. 128, 131 (E.D.N.Y. 1994) (Weinstein, J.). As the Aristide court held, the "[d]etermination of who qualifies as a head-of-state is made by the Executive Branch, it is not a factual issue to be determined by the courts. No judicial hearing or factual determination aside from receipt of the State Department's communication is warranted." Lafontant v. Aristide, 844 F.Supp. at 130. In Aristide, after the State Department submitted a letter, filed with the Court by the Justice Department pursuant to 28 U.S.C. § 517, the court promptly entered a final judgment, quashing service of process on defendant and dismissing the action. Id. (collecting cases in which absolute immunity was accorded a head-of-state). See In Re Doe, 860 F.2d 40, 44-46 (2d Cir.1988). Were the Executive Branch to declare defendant a head-of-state, this Court would be stripped of jurisdiction. See Lafontant v. Aristide, 844 F.Supp. at 130.[7] This consideration, while not dispositive at this point in the litigation, militates against this Court exercising jurisdiction over the instant action.
B. SUBJECT MATTER JURISDICTION
Plaintiffs bring these related actions pursuant to the Alien Tort Claim Act; the Torture Victim Protection Act ("TVPA"); federal question jurisdiction; and the principles of supplemental jurisdiction. Doe Plaintiffs suggest in their memorandum submitted in opposition, that this Court should not address the issue of subject matter jurisdiction because defendant, who moved for dismissal pursuant to Fed.R.Civ.P. 12(b)(1), did not brief the issue. Doe Mem. at 3 n. 2. Nevertheless, "[i]t is common ground that in our federal system of limited jurisdiction any party or the Court sua sponte, at any stage in the proceedings, may raise the question of whether the court has subject matter jurisdiction." United Food & Commercial Workers Union v. Centermark Props. Meriden, 30 F.3d 298, 301 (2d Cir.1994) (citation omitted). Accordingly, this Court must address the issue of subject matter jurisdiction.
1. This Court Does Not Have Jurisdiction Pursuant to the Alien Tort Claim Act
The Alien Tort Claim Act, 28 U.S.C. § 1350, grants the district courts "original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." 28 U.S.C. § 1350. Since plaintiffs do not contend that their claim arises under a treaty of the United States, this Court, in order to determine whether it has subject matter jurisdiction pursuant to § 1350, must examine whether the actions of defendant, alleged herein, constitute an actionable violation of the law of nations under the statute.
The Second Circuit has found that only conduct which rises to the level of an *739 "international common law tort" by violating universally accepted standards of human rights is within the law of nations, and thus within the subject matter jurisdiction of the Act. Filartiga v. Pena-Irala, 630 F.2d 876, 880 (2d Cir.1980). In Filartiga, the Second Circuit consulted modern sources of international law including judicial decisions and scholarly works, in order to determine what constituted the law of nations. Id. at 880-81 (citing The Paquete Habana, 175 U.S. 677, 700, 20 S. Ct. 290, 299, 44 L. Ed. 320 (1900)).[8]
Historically, the "traditional view of international law [was] that it establish[ed] substantive principles for determining whether one country had wronged another." Banco National de Cuba v. Sabbatino, 376 U.S. 398, 422, 84 S. Ct. 923, 937, 11 L. Ed. 2d 804 (1964). "Classical international law was predominantly statist. The law of nations traditionally was defined as `the body of rules and principles of action which are binding upon civilized states in their relation to one another.'" Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 792 n. 22 (D.C.Cir.1984) (Edwards, J.) (quoting J. Brierly, The Law of Nations 287 at 1 (6th ed. 1963)) (emphasis in original). Accord Carmichael v. United Technologies Corp., 835 F.2d 109, 113 (5th Cir.1988) ("The standards by which nations regulate their dealings with one another inter se constitute the `law of nations.' These standards include the rules of conduct which govern the affairs of this nation, acting in its national capacity, in relationships with other nations.") (citations omitted). Over time, the view that international law applied only as between nations evolved, such that international law became applicable to nations acting against their own citizens or to a foreign government acting against an individual. See Filartiga, 630 F.2d at 884-85.
In Filartiga, the Second Circuit held that official torture constituted an actionable claim within the subject matter jurisdiction of the court under § 1350. In reaching this conclusion the Second Circuit stated that "[t]orture ... is defined as any act by which severe pain and suffering, whether physical or mental, is intentionally inflicted by or at the instigation of a public official." Id. at 882 (citing General Assembly Resolution 3452, 30 U.N. GAOR Supp. (No. 34) 91, U.N. Doc A/1034 (1975)) (emphasis added). The Filartiga Court went on to hold that acts of official torture committed by a government either against aliens, or against nationals of the acting state, violate the law of nations. Filartiga, 630 F.2d at 884-85. The Second Circuit, in Filartiga, reached the conclusion that "official torture is now prohibited by the law of nations." Id. at 885 (emphasis added).
Since Filartiga, § 1350 has been applied by a handful of federal courts, and the decisions reviewed by this Court reinforce the conclusion that acts committed by non-state actors do not violate the law of nations. Most notable, perhaps, is the opinion by the United States Court of Appeals for the District of Columbia in Tel-Oren v. Libyan Arab Republic, 726 F.2d 774 (D.C.Cir.1984). In Tel-Oren, survivors and representatives of persons murdered by the Palestine Liberation Organization ("PLO") brought suit pursuant to 28 U.S.C. §§ 1350 and 1331. The District Court dismissed the action for lack of subject matter jurisdiction. The District of Columbia Circuit panel, writing three separate concurring opinions, affirmed the district court's dismissal. In his opinion, Judge Edwards embraced the holding of Filartiga, but specifically declined to extend Filartiga or the application of § 1350 to non-state actors.[9] Judge Edwards stated that "[t]he extension *740 would require this court to venture out of the comfortable realm of established international law within which Filartiga firmly sat in which states are the actors. It would require an assessment of the extent to which international law imposes not only rights but also obligations on individuals." Tel-Oren, 726 F.2d at 792. Judge Edwards also stated that the law of nations does not impose "the same responsibility or liability on non-state actors [] as it does on states and persons acting under color of state law." Id. at 776. Judge Edwards concluded that since "the PLO is not a recognized member of the community of nations" an action brought pursuant to § 1350 would not lie. Id. at 792. Accordingly, Judge Edwards "decline[d] to read section 1350 to cover non-state actors, absent guidance from the Supreme Court on the statute's usage of the term `law of nations.'" Id. at 795.[10]
Since Tel-Oren, a number of Federal Courts have applied § 1350, but, in doing so, have also declined to extend it to cover the conduct of non-state actors. In Sanchez-Espinoza v. Reagan, 770 F.2d 202 (D.C.Cir. 1985), a group of Nicaraguans brought a claim pursuant to § 1350, seeking redress for tortious injuries which they and their families suffered at the hands of the Nicaraguan Contra Forces ("Contras"). Id. at 205. Plaintiffs' claims arose out of alleged attacks by the Contras on Nicaraguan civilians which resulted in, inter alia, summary execution, murder, abduction, torture, rape, and woundings. Id. In holding that plaintiffs' claims could not be remedied under the Alien Tort Statute, Judge (now Justice) Scalia stated the following:
"[w]e are aware of no treaty that purports to make the activities at issue here unlawful when conducted by private individuals. As for the law of nations so-called `customary international law,' arising from `the customs and usages of civilized nations,' we conclude that this also does not reach private, non-state conduct of this sort."
Id. at 206-07 (citations omitted). Accordingly, the District of Columbia Circuit dismissed the claims brought pursuant to § 1350. Id. See also Linder v. Calero Portocarrero, 747 F. Supp. 1452, 1462, 1469 n. 8 (S.D.Fla.1990) (stating "[t]he contras are private individuals whose actions simply do not represent state action," and that "[t]he Contras have not been recognized as the legitimate government of Nicaragua by the United States").
In Carmichael v. United Technologies Corp., 835 F.2d 109, 113 (5th Cir.1988), the Fifth Circuit, while not deciding the issue, opined "that the Alien Tort Statute does not confer subject matter jurisdiction over private parties who conspire in or aid and abet, official acts of torture."[11]Id. at 113-14. In Forti v. Suarez-Mason, 672 F. Supp. 1531 (N.D.Cal.1987), the district court echoed Justice Scalia's sentiments when it stated: "[o]f course, purely private torture will not normally implicate the law of nations, since there is currently no international consensus regarding torture practiced by non-state actors." Id. at 1541.
Courts that have found causes of action to lie pursuant to § 1350, have done so when state actors violated the law of nations. See e.g., Filartiga, 630 F.2d at 880 (Paraguayan state official); In Re Estate of Ferdinand E. Marcos Litigation, 978 F.2d 493 (9th Cir. 1992) (defendant controlled military police and acted under martial law declared by then-President Marcos); Siderman de Blake v. Republic of Argentina, 965 F.2d 699 (9th Cir.1992) (Argentine military officials); Forti v. Suarez-Mason, 672 F. Supp. 1531 (N.D.Cal.1987) (former Argentine General).
This Court finds that the acts alleged in the instant action, while grossly repugnant, *741 cannot be remedied through 28 U.S.C. § 1350. The current Bosnian-Serb warring military faction does not constitute a recognized state any more than did the PLO, as it existed at the time that the District of Columbia Circuit decided Tel-Oren, or than did the Nicaraguan Contras at the time Justice Scalia decided Sanchez-Espinoza.[12] Accordingly, this Court finds that the members of Karadzic's faction do not act under the color of any recognized state law. See, e.g., Sanchez-Espinoza v. Reagan, 770 F.2d at 202; Tel-Oren 726 F.2d at 791; Linder v. Calero Portocarrero, 747 F. Supp. 1452, 1462 (S.D.Fla.1990) ("[t]he contras are private individuals whose actions simply do not represent state action").
The situation in the former Yugoslavia is such that the present military factions are less stable and less identifiable than was the PLO at the time of Tel-Oren. The Bosnian-Serbs have achieved neither the level of organization nor the recognition that was attained by the PLO, as manifested by the PLO's achieving the position of a permanent observer at the U.N.[13] Based on the teaching of the aforementioned case authorities, it follows that plaintiffs cannot contend that the acts allegedly being conducted are either official torture or state initiated. See Tel-Oren, 726 F.2d at 791. This Court declines to extend § 1350 to redress acts of torture engaged in by private individuals.
2. This Court Does Not Have Jurisdiction Pursuant to the Torture Victim Protection Act
Plaintiffs also advance the position that this Court has subject matter jurisdiction based on the Torture Victim Protection Act ("TVPA"). See Torture Victim Protection Act of 1991, Pub.L. No. 102-256, 106 Stat. 73 (1992) (codified at 28 U.S.C. § 1350). The TVPA provides an express private right of action against "an individual who, under actual or apparent authority, or color of law, of any foreign nation" subjects another individual to torture or extrajudicial killing. Id. The TVPA was enacted to codify the private right of action against official torture set forth in Filartiga. LaFontant v. Aristide, 844 F.Supp. at 138 ("[t]he TVPA codifies the holding in Filartiga v. Pena-Irala") (Weinstein, J.). See H.R.Rep. No. 367, 102nd Cong., 2nd Sess. 3-4 (1991) ("House Report"), reprinted in 1992 U.S.C.C.A.N. 84, 85-86; S.Rep. No. 249, 102nd Cong., 2nd Sess. 3-7 (1991) ("Senate Report").
The TVPA, a relatively new statute, passed in 1992, has been construed by only a few Federal Courts. This Court, having looked to the language of the statute and to the legislative history, concludes that both the language and legislative history clearly indicate that the statute only extends to actions carried out under the authority or color of law of an entity recognized by the United States as a foreign nation.
On its face the TVPA gives federal courts jurisdiction over suits against foreign officials who kill illegally on foreign territory. It provides in part:
Sec. 2. (a) Liability. An individual who, under actual or apparent authority, or color of law, of any foreign nation (1) subjects an individual to torture shall, in a civil action, be liable for damages ... or (2) subjects an individual to extrajudicial killing shall, in a civil action, be liable for damages....
(b) Exhaustion of remedies. A court shall decline to hear a claim under this section if the claimant has not exhausted adequate and available remedies in the place in which the conduct giving rise to the claim occurred. *742 28 U.S.C. § 1350 note (1992) (emphasis added). As the House Report on the bill explains:
[t]he phrase `under actual or apparent authority, or color of law' makes clear that the plaintiff must establish some governmental involvement in the torture or killing to prove a claim.... The bill does not attempt to deal with torture or killing by purely private groups.
House Report at 5, U.S.C.C.A.N. 1992, p. 87. Similarly, the Senate Report states the following:
[t]his legislation does not cover purely private criminal acts by individuals or nongovernmental organizations ... the phrase `actual or apparent authority or under color of law' is used to denote torture and extrajudicial killings committed by officials both within and outside the scope of their authority.
Senate Report 249 at 8.
Clearly, the TVPA was designed to protect individuals from acts taken by foreign government officials or foreign governments. On its face, the TVPA requires a plaintiff's claim for relief to be based on actions taken under color of law of any foreign nation. The legislative history reflects the same reading. This reading of the TVPA is entirely consistent with and, indeed, supports this Court's holding with respect to the Alien Tort Claim act, supra, since the TVPA was also codified at § 1350.
Both the Senate and House Reports state that courts should look to principles of liability under 42 U.S.C. § 1983 in construing the "color of law" phrase in the TVPA. See Senate Report at 8; House Report at 5. A plaintiff can only meet the requirements of § 1983 to establish that a defendant has acted "under color of state law" if he alleges sufficient "state action" to make out a constitutional violation. The conduct of the defendant must be somehow chargeable to the state in question. See, e.g., Dwares v. City of New York, 985 F.2d 94, 97 (2d Cir.1993) ("it is well established that in order to state a claim under § 1983, a plaintiff must allege that the challenged conduct was attributable at least in part to a person acting under color of state law."); Merola v. Nat'l R.R. Passenger Corp., 683 F. Supp. 935, 940 (S.D.N.Y. 1988).
As discussed above, Karadzic does not act with the authority of any foreign nation. In fact, K. Plaintiffs' moving papers describe Karadzic as "neither a head of state nor a diplomat of a recognized state." K. Mem. at 5. K. plaintiffs further acknowledge that "Karadzic is not an official of any government." K. Mem. at 21 n. 25. Accordingly, finding that the acts attributed to defendant are those of private individuals, similar to those of the Contras, and finding that the TVPA clearly was enacted to redress acts of torture by governments or government officials, plaintiffs' cause of action against defendant based on the TVPA cannot lie.[14]
3. This Court Does Not Have Jurisdiction Pursuant to an Implied Right of Action under § 1331
Plaintiffs also bring their causes of action under 28 U.S.C. § 1331, subject matter jurisdiction arising under a federal question. Section 1331 provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."
It has been recognized in this Circuit that substantive international law is incorporated into the law of the United States. See Filartiga, 630 F.2d 876, 887 (2d Cir.1980). As discussed above, jurisdiction in this action cannot lie based on the express causes of action set forth by Congress in the TVPA or *743 the Alien Tort Claim Act. Accordingly, the only other jurisdictional grounds for Plaintiffs to assert in this matter would be to base their claims on an implied right of action arising out of the law of nations. As Judge Edwards stated in Tel-Oren 726 F.2d at 779-80 n. 4., "the language of § 1331, unlike § 1350, suggests that plaintiffs must identify a remedy granted by the law of nations or argue successfully for one to be implied."
This Court declines to find an implied right of action arising under the law of nations, specifically in view of the fact that Congress has addressed the matter and created two express causes of action in the form of the Alien Tort Claim Act and the TVPA, codified at § 1350. Presumably, Congress did not lack power to confer subject-matter jurisdiction over such an action, but declined to do so. See Senate Report at 5-6. See also Sugrue v. Derwinski, 26 F.3d 8, 12 (2d Cir. 1994) (declining to find a new private right of action, and stating that "Congress is in a far better position than a court to evaluate the impact of a new species of litigation"). As Judge Kearse stated in Amerada Hess Shipping Corp. v. Argentine Republic, 830 F.2d 421, 429 (2d Cir.1987) (Kearse, J. dissenting), rev'd on other grounds, 488 U.S. 428, 109 S. Ct. 683, 102 L. Ed. 2d 818 (1989), "though substantive international law is part of the common law of the United States ... federal court subject-matter jurisdiction is not a matter of common law. Such jurisdiction exists only to the extent that Congress has bestowed it, in the exact degree and character which to Congress may seem proper for the public good." Id. (citations and quotations omitted).
Further, as discussed above, "the law of nations provides no substantive right to be free from the private acts of individuals." See Tel-Oren, 726 F.2d at 779-80 n. 4; In Re Estate of Ferdinand E. Marcos, 978 F.2d 493, 501 (9th Cir.1992) ("[o]nly individuals who have acted under official authority or under color of such authority may violate international law"). Since private acts of individuals do not violate the law of nations, even assuming arguendo, that this Court were willing to attempt to find an implied cause of action, which it is not, this Court is doubtful that one could be implied as to the defendant because the acts attributed to him were performed in a private capacity. Accordingly, those allegedly harmed by the acts of defendant cannot assert an implied right of action arising from the law of nations and § 1331. See Tel-Oren, 726 F.2d at 779-80 n. 4.
Absent a clear statute from Congress, or direction from higher Courts, this Court finds that actions based only on § 1331 without an express right of action granted by Congress, must be dismissed for lack of subject-matter jurisdiction.
II. Plaintiffs' State Law Claims
In general, "a district court may exercise supplemental jurisdiction over pendent state claims when it has jurisdiction over associated federal claims that `form part of the same case or controversy.'" Sriram v. Preferred Income Fund, 22 F.3d 498, 501 (2d Cir.1994) (quoting 28 U.S.C. § 1367).[15]See United Mine Workers v. Gibbs, 383 U.S. 715, 725-28, 86 S. Ct. 1130, 1138-40, 16 L. Ed. 2d 218 (1966). As the Second Circuit has recently reiterated, a district court's exercise of supplemental jurisdiction is within its discretion. Vally Disposal, Inc. v. Central Vermont Solid Waste Management District, 31 F.3d 89, 103 (2d Cir.1994) (citing Block v. First Blood Assocs., 988 F.2d 344, 351 (2d Cir.1993) ("The decision whether to exercise pendent jurisdiction is within the discretion of the district court.")). See Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir.1994) ("Just as with the prior law of pendent jurisdiction, the exercise of supplemental *744 jurisdiction is left to the discretion of the district court.").
Having dismissed plaintiffs' federal claims, plaintiffs' state claims also should be dismissed for lack of jurisdiction. In general, in order to invoke supplemental jurisdiction, there must be an underlying cognizable federal claim. In this case, plaintiffs' federal claims have been dismissed. When the district court has dismissed all claims over which it has original jurisdiction, the court may decline to exercise supplemental jurisdiction. 28 U.S.C. § 1367(c)(3). "`[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors ... will point toward declining to exercise jurisdiction over the remaining state-law claims.'" Morse v. University of Vermont, 973 F.2d 122, 127 (2d Cir.1992) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108 S. Ct. 614, 619, 98 L. Ed. 2d 720 (1988)). See Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139 (holding that the general rule is that, when all federal claims are dismissed before trial, the district court should relinquish jurisdiction over pendent state-law claims rather than resolving them on the merits). Thus, this Court declines to assert supplemental jurisdiction over plaintiffs' state claims. Accordingly, plaintiffs' state-law claims are hereby dismissed.
CONCLUSION
For the foregoing reasons, this Court hereby grants Karadzic's motion to dismiss for lack of subject-matter jurisdiction. Accordingly, plaintiffs' claims are hereby dismissed in their entirety.
SO ORDERED.
NOTES
[*] Editor's Note: Names changed to initials for purposes of publication.
[1] In a Memorandum Order, dated September 23, 1993, this Court granted defendant an additional week in which to submit his reply papers. In that Order, defendant was admonished not to raise issues for the first time in his reply, and that such issues would be treated as a nullity. In his reply, Defendant submitted the affidavit of Agent Deibler ("Deibler Affidavit"). In turn, Doe Plaintiffs sought leave to file a sur-reply in order to address arguments contained in defendant's reply papers, specifically those contained in Deibler's Affidavit. Deibler's Affidavit primarily addresses the adequacy of service on defendant, an issue that was previously raised in defendant's motion, yet the affidavit presents additional facts. Furthermore, Deibler's affidavit raises for the first time the issue of fund raising. In order to allow this Court more fully to address the issues raised in the instant motion, this Court herein, grants Doe Plaintiffs leave to file the aforementioned sur-reply, previously submitted to the Court. Accordingly, in addressing the arguments raised by the instant motion, the Court has considered defendant's reply papers in their entirety, as well as the papers submitted by plaintiffs in their sur-reply, including the State Department command post logs submitted to the Court on October 26, 1993.
[2] See Chuck Sudetic, Turnout in Bosnia Signals Independence, N.Y. Times, March 2, 1992, at A3. See also, Chronology of Bosnia War, N.Y. Times, February 6, 1994, at Section 1, page 12; Doe Mem. at 3 (presenting a somewhat different chronology of events).
[3] See Chuck Sudetic, Belgrade Issues Warning to Bosnian Serbs, N.Y. Times, August 3, 1994, at A10. (stating that "[t]he Srpska Republic is the government proclaimed by the Bosnian Serb rebels")
[4] Doe's claim for "war crimes and crimes against humanity" shall be referred to hereafter as "war crimes".
[5] Agent Diebler states in his sworn declaration the following:
As we reached the middle of the lobby [in the hotel] the man [Soroko] got out of his chair and moved quickly toward our formation. One of the agents sounded an alarm and we immediately "covered and evacuated." This is standard procedure. The agents closed the formation around Dr. Karadzic, got his head down, I held him physically and moved as quickly as possible to the waiting elevator. The man came right at me and I believe I was the first to physically touch him. As he approached he reached into his jacket and removed what I was told later turned out to be papers. I batted his hand away. After I batted his hand away, he was stopped and questioned by two of my agents.... The man shouted words to the effect "You've been served. You've been served." By that time Dr. Karadzic and the agents evacuating him, including me, were about 30 feet away and ready to enter the elevator.
Diebler Aff. at ¶¶ 12-13. After he attempted service, Soroko was questioned by agents, and informed them that he was attempting to serve process on Karadzic.
[6] See Affidavit of Martha F. Davis submitted in Opposition to Defendant's motion to Dismiss ("Davis Aff.") at Exhibit C (letter from Michael J. Habib, Director of Eastern European Affairs, U.S. Department of State, discussing the Department of State's refusal to extend immunity to Radovan Karadzic during his visits to the United Nations).
[7] "[I]n Saltany v. Reagan, 702 F. Supp. 319, 320 (D.D.C.1988), residents of Libya brought suit against Prime Minister Margaret Thatcher of the United Kingdom, for alleged violations of international law. Pursuant to 28 U.S.C. § 517 the State Department submitted an immunity letter, suggesting that the court grant Prime Minister Thatcher immunity as the head of government of a friendly foreign state. The court accepted the State Department's suggestion as conclusive, and granted immunity." Lafontant v. Aristide, 844 F.Supp. at 132. See Restatement (Second) of Foreign Relations Law of the United States (1962) § 66 (head-of-state can be either the head-of-state or head of government).
See generally Roger Cohen, Washington Might Recognize a Bosnian Serb State, N.Y. Times, March 13, 1994, at A10. (stating that as President of his nation, Karadzic may qualify as "an organ of a foreign state or political subdivision thereof" under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1603(b)(2), and therefore be immune from suit).
[8] Beginning with Filartiga, courts have recognized a wide range of international common law torts, which, when committed under the color of state law, have been held to be actionable under the Alien Tort Act, including, inter alia, torture, slave trade, and piracy, Filartiga, 630 F.2d at 890; genocide and cruel, inhuman or degrading treatment, Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 781 (D.C.Cir.1984) (Edwards, J. concurring); summary execution, Forti v. Suarez-Mason, 672 F. Supp. 1531, 1541-42 (N.D.Cal. 1987) ("official torture constitutes a cognizable violation of the law of nations"); wrongful death, Linder v. Portocarrero, 963 F.2d 332, 336 (11th Cir.1992); and war crimes. See also Demjanjuk v. Petrovsky, 776 F.2d 571, 582 (6th Cir.1985) (holding war crimes to be universally recognized violations of international law, but not specifically considering the Alien Tort Act), cert. denied, 475 U.S. 1016, 106 S. Ct. 1198, 89 L. Ed. 2d 312 (1986). See also Louis Henkin, The Age of Rights 75-76 (1990).
[9] Judge Bork found that § 1350 did not provide a cause of action, and Judge Robb concluded that the case presented a nonjusticiable "political question."
[10] It should be noted that causes of action have been brought against the PLO with Federal Courts basing their jurisdiction on other grounds. In Klinghoffer v. S.N.C. Achille Lauro, 739 F. Supp. 854 (S.D.N.Y.1990) jurisdiction was based on admiralty, pursuant to 28 U.S.C. § 1333, and in United States v. Palestine Liberation Organization, 695 F. Supp. 1456 (S.D.N.Y. 1988) the cause of action was brought pursuant to the Anti-terrorism Act, 22 U.S.C. §§ 5201-5203.
[11] The Fifth Circuit defined "official torture" as torture by officials shown to be officially condoned by the nation. Id. at 114. (emphasis added).
[12] The Second Circuit has limited the definition of `state' to "entities that have a defined and a permanent population, that are under the control of their own government, and that engage in or have the capacity to engage in, formal relations with other such entities." Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, 47 (2d Cir.1991) (quotations, brackets and citation omitted). The current Bosnia-Serb entity fails to meet this definition.
[13] The PLO was granted permanent observer status at the United Nations in 1974, and "[s]ince 1974, the PLO has continued to function without interruption as a permanent observer and has maintained its mission to the U.N. without trammel." United States v. PLO, 695 F.Supp. at 1459.
[14] Additionally, the Court notes that section 2 of the TVPA clearly requires litigants to exhaust the adequate and available remedies in the location of the tort. On the present record before this Court, there is insufficient evidence addressing whether plaintiffs have attempted to seek remedies in the place in which the conduct giving rise to the claim occurred, nor is there sufficient evidence shedding light on the issue of whether, given the present situation in former Yugoslavia, such remedies are available or would be adequate. See Amicus Curiae Memorandum Submitted in Opposition to Defendant's Motion by the International Human Rights Law Group, dated August 27, 1993 ("IHR Amicus"), at 26, (noting "two criminal cases were recently brought in Sarajevo and resulted in death sentences").
[15] 28 U.S.C. § 1367, enacted Dec. 1, 1990, codified the law with regard to pendent party, pendent claim, and ancillary jurisdiction by granting federal district courts "supplemental jurisdiction over all other claims that are so related to claims in the action within [the court's] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." Id. The statute abandons the old labels of pendent and ancillary jurisdiction, but preserves the principles established under the doctrines, referring to all such jurisdiction as "supplemental." See Denis F. McLaughlin, The Federal Supplemental Jurisdiction Statute A Constitutional & Statutory Analysis, 24 Ariz.St. L.J. 849 (1992). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1624305/ | 522 So. 2d 798 (1988)
Mark H. FELDMAN, Petitioner,
v.
Stephen GLUCROFT, M.D., et al., Respondents.
No. 68920.
Supreme Court of Florida.
February 4, 1988.
Rehearing Denied April 28, 1988.
Mark H. Feldman, D.P.M., in pro. per.
Dan Paul, Franklin G. Burt and Victoria L. Baden of Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey, Miami, for respondents.
Charles C. Powers of Charles C. Powers, P.A., West Palm Beach, amicus curiae for The Academy of Florida Trial Lawyers.
Emil C. Marquardt, Jr. of McMullen, Everett, Logan, Marquardt & Cline, P.A., Clearwater, amicus curiae for The Flroida Hosp. Ass'n and The Florida Medical Ass'n.
Henry H. Raattama, Jr. and Edwart T. O'Donnell of Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, amicus curiae for South Florida Hosp. Ass'n.
Joseph W. Little, Gainesville, amicus curiae.
OVERTON, Justice.
This is a petition to review Feldman v. Glucroft, 488 So. 2d 574 (Fla. 3d DCA 1986), in which the Third District Court of Appeal held that a defamation action could not be maintained against medical review committee members and the hospital they serve due to the privilege established by section 768.40(4), Florida Statutes (1983). The district court certified the following questions to be of great public importance:
(1) Does section 768.40(4) totally abolish a defamation claim arising in proceedings before medical review committees?
(2) If so, is section 768.40(4) invalid as in conflict with Article I, section 21, Florida Constitution?
Id. at 575. We have jurisdiction, article V, section 3(b)(4), Florida Constitution. We answer the first question with a qualified "no" and find a defamation claim arising under the 1983 statute is not totally abolished since a plaintiff may proceed with such an action if he or she can establish extrinsic evidence of malice or fraud. The second question is rendered moot since we find no total abolishment of a defamation claim. We approved this legislation, and its legislatively determined need, in our recent decision in Holly v. Auld, 450 So. 2d 217 *799 (Fla. 1984). For the reasons expressed, we approve in part and quash in part the district court's decision.
The relevant portion of the record contains the following facts. Dr. Feldman is a licensed podiatrist practicing in Dade County, Florida, and had surgical privileges at Parkway General Hospital. As part of his practice, Dr. Feldman performed an arthroereisis procedure on a child to repair a "flatfoot" deformity. In 1979, Dr. Feldman filed a civil action in United States District Court, unrelated to the case at bar, asserting federal antitrust and constitutional claims against eighty-five defendants. During the federal antitrust action, Dr. Feldman discovered what he considered a defamation of him by a medical review committee in its determination not to allow the above-described surgical procedure by any podiatrist at Parkway General Hospital.
On March 8, 1984, Dr. Feldman filed a three-count pro se complaint that sets forth the basis of this proceeding. Counts I and II alleged that respondents libeled, slandered, defamed, and/or placed him in a false light by stating that he had performed an experimental surgical procedure on a child. Feldman also alleged respondents violated his due process and equal protection rights under the United States and Florida constitutions by revoking his privilege to perform the procedure at Parkway General. In particular, Dr. Feldman alleged that the respondents initiated the internal review of the surgical procedure and determined the procedure was experimental without his knowledge. He asserted he was not given notice of the internal review or permitted to explain or defend the procedure, in violation of Parkway Hospital bylaws. Dr. Feldman also alleged respondents used the committee report at Parkway to deny him privileges at North Miami General Hospital.
The trial court refused to compel production of the notes and records of all orthopedic staff committee meetings at Parkway General concerning Dr. Feldman and the surgical procedure. The trial court ruled that such matters were privileged under section 768.40(4), Florida Statutes (1983), and rejected Dr. Feldman's argument that 768.40 is unconstitutional. The trial court rendered final summary judgment in favor of respondents on all counts. The district court affirmed the trial court on the ground that no such action may be maintained under 768.40(4), as interpreted by this Court in Holly v. Auld, 450 So. 2d 217 (Fla. 1984). The district court stated:
[W]e think it clear from the Holly case, particularly when read in the light of Justice Shaw's dissenting opinion which does directly treat the point that the language of the statute creates an absolute privilege and means that any existing defamation action has been totally abolished.
Feldman v. Glucroft, 488 So.2d at 575.
Question I: Abolition of a Defamation Claim by Section 768.40(4).
We disagree with the Third District's interpretation that section 768.40(4), Florida Statutes (1983), totally abolishes a defamation action arising from information furnished to a medical review committee. We find the 1983 statute, rather than totally abolishing the cause of action, adds an additional restrictive element to this cause of action. The relevant portion of section 768.40, Florida Statutes (1983), provides:
(2) There shall be no monetary liability on the part of, and no cause of action for damages shall arise against, any member of a duly appointed medical review committee ... if the committee member or health care provider acts without malice or fraud. The immunity provided to members of a duly appointed medical review committee shall apply only to actions by providers of health services, and in no way shall this section render any medical review committee immune from any action in tort or contract brought by a patient or his successors or assigns.
... .
(4) The proceedings and records of committees as described in the preceding subsections shall not be subject to discovery or introduction into evidence in any civil action against a provider of professional health services arising out *800 of the matters which are the subject of evaluation and review by such committee... .
(Emphasis added.)[*]
Considering these provisions, it is evident that the statute allows a defamation action against a committee member or health care provider when the plaintiff can establish extrinsic evidence of malice or fraud. It is clear that subsection (4) shields the contents of medical review proceedings from discovery. That requirement does not, however, restrict obtaining evidence of malice or fraud from testimony or documents which are not part of the record of those proceedings.
We considered the intent and purpose of this legislation in Holly and concluded that the legislature had a clear public need and justifiable basis for creating this limited restriction in the area of health care. We stated:
In an effort to control the escalating cost of health care in the state, the legislature deemed it wise to encourage a degree of self-regulation by the medical profession through peer review and evaluation. The legislature also recognized that meaningful peer review would not be possible without a limited guarantee of confidentiality for the information and opinions elicited from physicians regarding the competence of their colleagues.
... A doctor questioned by a review committee would reasonably be just as reluctant to make statements, however truthful or justifiable, which might form the basis of a defamation action against him as he would be to proffer opinions which could be used against a colleague in a malpractice suit. The discovery privilege of subsection (4) was clearly designed to provide that degree of confidentiality necessary for the full, frank medical peer evaluation which the legislature sought to encourage. Neither the language of the statute, nor the legislative intent discernable therefrom, admits of an interpretation which would limit the discovery privilege to medical malpractice actions and would preclude its application to defamation actions.
Inevitably, such a discovery privilege will impinge upon the rights of some civil litigants to discovery of information which might be helpful, or even essential, to their causes. We must assume that the legislature balanced this potential detriment against the potential for health *801 care cost containment offered by effective self-policing by the medical community and found the latter to be of greater weight.
450 So.2d at 219-20 (footnote omitted).
We find the language of subsection (2) allows a defamation action when it can be established that the committee member acts maliciously or fraudulently. We agree with the Third District Court of Appeal's interpretation of Holly expressed in Parkway General Hospital, Inc. v. Allinson, 453 So. 2d 123 (Fla. 3d DCA 1984). In construing Holly, the Parkway court held the subject records and statements of the committee were absolutely privileged and immune from discovery. The court cautioned that its determination does not preclude a plaintiff from presenting extrinsic evidence of malice or fraud from sources such as "documents or records otherwise available from original sources [which] are not immune from discovery," nor does the statute prevent anyone who participates in a review committee proceeding from testifying separately as to matters within his or her knowledge. Id. at 126. The shield of confidentiality protects what is presented or spoken to the committee at its meetings. If that information is available from other than committee sources, then it may be used in a defamation action, which must be based on malice or fraud under the 1983 statute and intentional fraud under the present statute. Under these circumstances, the cause of action has not been totally abolished. This type of immunity is not unusual. There is an absolute, rather than a qualified, immunity from defamation actions in all judicial and legislative hearings; moreover, this type of immunity applies in many other professional, licensing, and administrative proceedings. See, e.g., McNayr v. Kelly, 184 So. 2d 428, 431 (Fla. 1966) (statements of public officials in their official capacity); Robertson v. Industrial Insurance Co., 75 So. 2d 198 (Fla. 1954) (statements made in license revocation proceedings before the Insurance Commissioner); Lloyd v. Hines, 474 So. 2d 376 (Fla. 1st DCA 1985) (statements of state law enforcement agent as witness in criminal trial); Bell v. Gellert, 469 So. 2d 141 (Fla. 3d DCA 1985) (statements made in labor grievance complaint which were relevant to that complaint); Farish v. Wakeman, 385 So. 2d 2 (Fla. 4th DCA 1980) (compelled testimony before a legislative committee); Stone v. Rosen, 348 So. 2d 387 (Fla. 3d DCA 1977) (absolute privilege of citizen to make complaint against Florida Bar member); Seidel v. Hill, 264 So. 2d 81 (Fla. 1st DCA 1972) (statements introduced in quasi-judicial proceedings such as worker's compensation proceedings); Greene v. Hoiriis, 103 So. 2d 226 (Fla. 3d DCA 1958) (statements made in connection with unemployment compensation proceedings). The justification for the immunity in these circumstances is that the necessary information could not otherwise be obtained without this protection. We accept the legislative determination that, without this type of qualified immunity, a viable health care peer review process would be difficult, if not impossible, to maintain. We conclude that section 768.40, Florida Statutes (1983), does not totally abolish the defamation cause of action. As a result of this holding, we need not address the second question.
In the instant case, we find the trial court properly denied the discovery request, but find that the summary judgment should be vacated to allow the plaintiff an opportunity to allege extrinsic malice or fraud. Accordingly, the district court of appeal is directed to remand this cause to the trial court with directions that the plaintiff be allowed to file an amended complaint under the principles and restrictions expressed in this opinion.
It is so ordered.
McDONALD, C.J. and KOGAN, J., concur.
GRIMES, J., concurs specially with an opinion.
SHAW, J., dissents with an opinion.
EHRLICH and BARKETT, JJ., dissent.
GRIMES, Justice, specially concurring.
It may be that there will be few circumstances in which a complaining party can *802 successfully prosecute a lawsuit in the face of the limitations of the statute. However, I concur in the opinion, even if the statute has the practical effect of barring defamation actions against medical review committees.
In the first place, I am not at all certain that the "access to courts" provision of the Florida Constitution, article I, section 21, is implicated because no cause of action is being abolished. At the most, the legislature simply decided to confer an absolute privilege against liability upon certain persons under certain circumstances. The majority opinion refers to many other examples of absolute privilege which have been sustained in Florida.
Even if the statute is construed as abolishing a cause of action, it can be sustained under Kluger v. White, 281 So. 2d 1 (Fla. 1973), as the result of a legislative determination of overwhelming public necessity. The limitation upon discovery and introduction into evidence of the proceedings and records of medical review committees was first enacted in chapter 73-50, Laws of Florida. The preamble to that statute reads as follows:
WHEREAS, the Legislature is deeply concerned over the rising costs of health insurance which are directly related to the costs of hospital and medical services and increasing problems in the area of medical malpractice insurance; and
WHEREAS, the various health services, professional societies and associations in the State of Florida are promulgating programs and establishing committees for the purpose of reviewing standards of care, utilization and expense in the rendering of health services in an effort to deter or eliminate some of the causes of the increased claims and costs of providing health services and to provide a statistical base for further analysis, study and recommendations; and
WHEREAS, the Legislature recognizes the advisability of immunity for peer review committees so that the medical profession can explore over-utilization of medical services, improper charging for medical services, and acts of malpractice in order that it can have better control over its members and experience rate its physicians for malpractice coverage.
Ch. 73-50, Laws of Fla. Hence, it is evident that in order to improve the quality of medical services, the legislature has perceived an overwhelming need that medical review committees function without fear of retaliation. As this Court noted in Holly v. Auld, 450 So. 2d 217, 220 (Fla. 1984):
Inevitably, such a discovery privilege will impinge upon the rights of some civil litigants to discovery of information which might be helpful, or even essential, to their causes. We must assume that the legislature balanced this potential detriment against the potential for health care cost containment offered by effective self-policing by the medical community and found the latter to be of greater weight. It is precisely this sort of policy judgment which is exclusively the province of the legislature rather than the courts.
SHAW, Justice, dissenting.
I dissent for the reasons set forth in my dissent to Holly v. Auld, 450 So. 2d 217 (Fla. 1984). Despite the protests to the contrary, it is obvious that the majority decisions here and in Holly create an absolute bar to defamation actions based on proceedings before medical review committees and thus conflict with article I, section 21, of the Florida Constitution. Both certified questions should be answered in the affirmative.
NOTES
[*] The 1983 version of the statute has been modified by section 768.40, Florida Statutes (1985). The 1985 statute embodies many of the same elements as the 1983 version with a few noteworthy changes; specifically, subsection (2) of the 1983 statute has been modified and appears in the 1985 version as section 768.40(3)(a):
There shall be no monetary liability on the part of, and no cause of action for damages shall arise against, any member of a duly appointed medical review committee, or any health care provider furnishing any information, including information concerning the prescribing of substances listed in s. 893.03(2), to such committee, or any person, including any person acting as a witness, incident reporter to, or investigator for, a medical review committee, for any act or proceeding undertaken or performed within the scope of the functions of any such committee if the committee member or health care provider acts without intentional fraud.
Section 768.40(3)(a), Florida Statutes (1985) (emphasis added). Additionally, subsection (4) of the 1983 statute was subsequently modified and appears as the following subsection (5):
The investigations, proceedings, and records of a committee as described in the preceding subsections shall not be subject to discovery or introduction into evidence in any civil action against a provider of professional health services arising out of the matters which are the subject of evaluation and review by such committee, and no person who was in attendance at a meeting of such committee shall be permitted or required to testify in any such civil action as to any evidence or other matters produced or presented during the proceedings of such committee or as to any findings, recommendations, evaluations, opinions, or other actions of such committee or any members thereof. However, information, documents, or records otherwise available from original sources are not to be construed as immune from discovery or use in any such civil action merely because they were presented during proceedings of such committee, nor should any person who testifies before such committee or who is a member of such committee be prevented from testifying as to matters within his knowledge, but the said witness cannot be asked about his testimony before such a committee or opinions formed by him as a result of said committee hearings.
Section 768.40(5), Florida Statutes (1985). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1639606/ | 787 S.W.2d 348 (1990)
Alfred MORENO et al., Appellants,
v.
STERLING DRUG, INC., Appellees.
No. C-7744.
Supreme Court of Texas.
March 28, 1990.
Rehearing Overruled May 9, 1990.
*349 Les Mendelsohn, Randall C. Jackson, Jr., San Antonio, for appellants.
P. Michael Jung, Mark Donheiser, Dallas, for appellees.
OPINION
SPEARS, Justice.
This case is before us upon certified questions from the United States Court of Appeals for the Fifth Circuit. Pursuant to TEX. CONST. art. V § 3-c, we have jurisdiction to answer the following certified questions:
1. Does the "discovery rule" apply to the Texas Statute of Limitations, TEX. CIV.PRAC. & REM.CODE § 16.003(b), in an action brought pursuant to the Texas Wrongful Death and Survival Statutes, TEX.CIV.PRAC. & REM CODE § 71.001 et seq. and § 71.021, respectively?
2. If the discovery rule does not apply to the Texas Statute of Limitations in wrongful death and survival actions, does that statute of limitations as applied to the plaintiffs herein, violate the open courts provision of the Constitution of the State of Texas, TEX. CONST. art. I § 13?
For the reasons stated in this opinion, we answer that the discovery rule does not apply to the wrongful death statute of limitations found in section 16.003(b), and, that section 16.003(b) as applied to the plaintiffs in this case does not violate article I, section 13 of the Texas Constitution.
For clarity, we emphasize that these issues are before us on certified questions from the Fifth Circuit. This is a very limited procedural device; we answer only the questions certified and nothing more. See Tex.R.App.P. 114. Thus, the whole case is not before this court as it would be in an ordinary appeal.
The essential facts of this case have been certified to this court. On January 21, 1981, Alfred Moreno, Jr., the infant son of Alfred and Emma Moreno, died of Reye's syndrome. On September 19, 1981, Shawna Rae Sloan, the infant daughter of James and Camilla Sloan, died of Reye's syndrome. In the days preceding their deaths, *350 the infants had been administered doses of Bayer Children's Aspirin, manufactured by Sterling Drug, Inc. Sometime after the deaths of the infants the parents were informed that in some instances the use of aspirin factored into Reye's syndrome deaths. On October 22, 1985, the parents filed separate wrongful death suits against Sterling Drug in state district court. Sterling Drug removed the actions to the United States District Court for the Western District of Texas.
Following removal, Sterling Drug moved for summary judgment in both suits, claiming that the actions were barred by the Texas Wrongful Death Statute of Limitations, TEX.CIV.PRAC. & REM.CODE ANN. § 16.003(b)(Vernon 1986). The federal district court dismissed the suits, citing the recent Fifth Circuit decision of Tennimon v. Bell Helicopter Textron, Inc., 823 F.2d 68 (5th Cir.1987), wherein that court held the discovery rule does not apply to section 16.003(b). The cases were consolidated on appeal, and Moreno and Sloan (collectively "Moreno") moved for certification of the legal questions to this court. A panel of the Fifth Circuit denied the motion to certify and affirmed in an unpublished opinion on the basis of Tennimon. On rehearing and after en banc reconsideration of the certification question, the Fifth Circuit granted the motion to certify.
The first question is whether the "discovery rule" applies to the statute of limitations for actions based on injuries resulting in death. The relevant limitations statute, section 16.003, TEX.CIV.PRAC. & REM.CODE ANN., provides as follows:
(a) A person must bring suit for ... personal injury ... not later than two years after the cause of action accrued.
(b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting in death. The cause of action accrues on the death of the injured person.
The only courts to construe section 16.003(b) have found it clear and unambiguous in prescribing an absolute two-year limitation period for bringing a wrongful death case. Tennimon v. Bell Helicopter Textron, Inc., 823 F.2d 68, 73 (5th Cir.1987); Stiles v. Union Carbide Corp., 520 F. Supp. 865, 867 (S.D.Tex.1981). Those decisions, along with a literal reading of section 16.003(b), would suggest that Moreno's wrongful death action is barred because it was brought after the two-year limitations period had expired. Moreno, however, argues that the "discovery" rule should apply to section 16.003(b), because he neither knew nor could have known the cause of his injury within the two-year limitation period. Specifically, he asserts that his suit was timely brought because it was filed within two years of the discovery of the link between aspirin and Reye's syndrome.
Moreno offers a number of arguments for why this court should disregard the plain language of section 16.003(b) and apply the discovery rule to the limitations period for wrongful death actions. First, he points out that this court has applied the discovery rule in determining the limitations period under the statutory predecessor to section 16.003(a), which governs actions for personal injury not resulting in death. Citing Ex parte Pruitt, 551 S.W.2d 706, 709 (Tex.1977) for the proposition that statutes should be read as a whole and construed to give purpose and meaning to every part, Moreno argues that the underlying purpose of section 16.003 is to authorize application of the discovery rule to subparts (a) and (b). Second, Moreno contends that the second sentence of section 16.003(b) only fixes the earliest time the cause of action may accrue and was intended to "save" the cause of action from being barred when more than two years elapse between injury and death. See DeHarn v. Mexican Nat'l Ry. Co., 86 Tex. 68, 23 S.W. 381 (1893). Moreno argues that this court should set the latest date of accrual beyond death (i.e. at discovery of cause of action) because the purpose of section 16.003(b) is to expand the time in which a wrongful death action can be brought. Finally, Moreno maintains that if subparts (a) and (b) are not interpreted consistently it will result in the absurdity of allowing a defendant to be exonerated for conduct which *351 kills but held liable for conduct which merely maims. See Hanebuth v. Bell Helicopter International, 694 P.2d 143, 147 (Alaska 1984). Moreno argues that this court should avoid this absurdity by construing subpart (b) to allow application of the discovery rule.
We begin our analysis by observing that the primary purpose of section 16.003, as with all limitation statutes, is to compel the exercise of a right of action within a reasonable time so that the opposing party has a fair opportunity to defend while witnesses are available. Willis v. Maverick, 760 S.W.2d 642, 644 (Tex.1988). Section 16.003 embodies a legislative determination of what a "reasonable time" is for bringing both an action for injuries not resulting in death (subpart a), and one for injuries resulting in death (subpart b). Under both subparts (a) and (b), an action must be brought within two years of the date the cause of action "accrues." Only subpart (b), however, goes on to specify that a cause of action "accrues" at a certain timethe date of death. When the legislature employs the term "accrues" without an accompanying definition, the courts must determine when that cause of action accrues and thus when the statute of limitations commences to run. Indeed, on three previous occasions this court has adopted and relied upon the following language from Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277, 285 (1961):
[T]he question when a cause of action accrues is a judicial one, and to determine it in any particular case is to establish a general rule of law for a class of cases, which rule must be founded on reason and justice.... In the absence of legislative definition and specification, the ... courts have often been called upon to delineate the statute; they have consciously sought to apply it with due regard to the underlying statutory policy of repose, without, however, permitting unnecessary individual injustices.
Willis, 760 S.W.2d at 644; Robinson v. Weaver, 550 S.W.2d 18, 20 (Tex.1977); Gaddis v. Smith, 417 S.W.2d 577, 580-81 (Tex.1967).
For purposes of the application of limitation statutes, a cause of action can generally be said to accrue when the wrongful act effects an injury, regardless of when the plaintiff learned of such injury. Robinson, 550 S.W.2d at 19. The discovery rule represents an exception to this general rule of accrual. Id. The discovery rule is a judicially constructed test which is used to determine when a plaintiff's cause of action accrued. Weaver v. Witt, 561 S.W.2d 792, 794 (Tex.1977). When applied, the rule operates to toll the running of the period of limitations until the time that the plaintiff discovers, or through the exercise of reasonable care and diligence should discover, the nature of his injury. Id. at 793-94. This court has applied the discovery rule to medical malpractice cases in which the plaintiff did not, and could not, know of the injury at the time it occurred. See Gaddis v. Smith, 417 S.W.2d 577, 580 (Tex.1967) (negligence action against physician for leaving sponge in patient's body accrues when patient learns of, or in exercise of reasonable care and diligence, should have learned of presence of sponge); Hays v. Hall, 488 S.W.2d 412 (Tex.1972) (action for negligent performance of vasectomy accrues when plaintiff discovers or should have discovered that he remains fertile). Similarly, this court has applied the discovery rule in a limited number of other cases when the injured party did not, and could not, know of his injury at the time it occurred. See e.g., Bayouth v. Lion Oil Co., 671 S.W.2d 867 (Tex.1984); Kelley v. Rinkle, 532 S.W.2d 947 (Tex.1976); Quinn v. Press, 135 Tex. 60, 140 S.W.2d 438 (1940). In each of these cases, this court applied the discovery rule to a statute of limitations which left the phrase "accrual" undefined. By contrast, section 16.003(b) specifically defines "accrual" as the date of death. The question here is whether the discovery rule should be applied to a limitations statute which has clearly and unequivocally prescribed that a cause of action accrues upon the occurrence of a specified event. For a number of reasons, we *352 hold that it should not.[1]
Plain Meaning of Section 16.003(b).
Moreno's argument that the discovery rule should be applied to section 16.003(b) as a matter of statutory construction ignores the plain language of the statute. Where language in a statute is unambiguous, this court must seek the intent of the legislature as found in the plain and common meaning of the words and terms used. RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex. 1985); Cail v. Service Motors, Inc., 660 S.W.2d 814, 815 (Tex.1983). Section 16.003(b) specifically provides that in a wrongful death action "a person must bring suit not later than two years after the day the cause of action accrues" and goes on to fix "accrual" at the injured person's death. The express language of the statute, therefore, evidences the legislative intent to fix the only date of accrual, and not merely the earliest, as Moreno contends.[2]
Moreno's reliance on our decision in DeHarn is also misguided. In DeHarn, this court interpreted the accrual language in TEX.REV.CIV.STAT. art. 3202 (1879), which was the statutory predecessor to section 16.003(b). The opinion describes the reason for Article 3202 as follows:
Since no action could be brought by the relatives of the injured person until death had ensued, and since a great deal of time might elapse between the injury and the death, it was reasonable that the time of death should be taken as the point from which limitation should begin to run.
DeHarn, 23 S.W. at 381-82. Moreno construes this single passage as evidencing a legislative purpose to extend the beginning of the running of the statute beyond the date of death. But Article 3202 was meant solely to prevent the potential anomaly of limitations running before death. Its purpose was not to extend the beginning of the running of the statute beyond the date of death. Nothing in the wording of Article 3202 or our discussion in DeHarn indicates such a purpose. Moreover, to engraft such a purpose on to section 16.003(b) would be to ignore our oft-repeated pronouncement that the "purpose" of all limitation statutes is to compel the exercise of a right of action within a reasonable time so that the opposing party has a fair opportunity to defend while witnesses are available. See e.g., Willis, 760 S.W.2d at 644; Robinson, 550 S.W.2d at 20; Price v. Estate of Anderson, 522 S.W.2d 690, 692 (Tex.1975); see also United States v. Kubrick, 444 U.S. 111, 117, 100 S. Ct. 352, 356, 62 L. Ed. 2d 259 (1979) ("[s]tatutes of limitation... afford plaintiffs what the legislature deems a reasonable time to present their claims [and] ... protect defendants and courts from having to deal with cases in which the search for truth may be seriously *353 impaired by loss of evidence, memory, or disappearance of witnesses.").
The Discovery Rule.
Notwithstanding the plain language of section 16.003(b), Moreno argues that the discovery rule should be applied to the statute because our past decisions have applied the rule to section 16.003(a) involving injuries and, in the interest of consistency, section 16.003(b) should be similarly construed. This argument, however, misconceives both the function of the discovery rule and the power of this court to craft exceptions to legislative enactments.
As we have said, the discovery rule is a judicially conceived exception to statutes of limitation to be used by courts to determine when a cause of action accrues. This court has only applied the rule to "accrual" limitation statutesi.e. statutes which have failed to define when a cause of action accrues. Because these statutes did not specify a time of "accrual," this court did not violate a specific legislative directive when it interpreted them to allow for application of the discovery rule. Section 16.003(b), however, prescribes an absolute limitations period by expressly specifying that "accrual" is the date of death. Since section 16.003(b) specifies death as the accrual date for wrongful death actions, there is no need for this court to employ the discovery rulethe legislature has completed the task.[3] Furthermore, when faced with other absolute statutes of limitations in which the legislature has specifically defined the date or event which triggers accrual, this court has enforced the literal terms of the statute and refused to engraft a discovery rule. See e.g., Safeway Stores, Inc. v. Certainteed Corp., 710 S.W.2d 544, 546-48 (Tex.1986); Morrison v. Chan, 699 S.W.2d 205, 208 (Tex.1985).
Other Jurisdictions.
The overwhelming majority of states construing absolute statutes with similar or identical language to that found in section 16.003(b) have held that the discovery rule does not apply.[4] These courts offer several rationales for refusing to apply the discovery rule, including: (1) that the rule applies only to accrual statutes but not absolute statutes, see, e.g., Presslaff, 403 A.2d at 940; White, 693 P.2d at 692; (2) that the fact of death itself is an event which should trigger any and all relevant inquiry, see, e.g., DeCosse, 319 N.W.2d at 51; (3) that there is a substantial state interest in promoting the prompt settlement of the affairs of the deceased, see, e.g., Cadieux, 593 F.2d at 145; Pastierik, 526 A.2d at 323; and (4) that the clear language of the statute cannot be judicially rewritten under the "guise of statutory construction," see, e.g., Trimper, 501 A.2d at 449; Morano, 420 N.Y.S.2d at 95. In many of these decisions, the factors suggested *354 by Moreno"fairness of result" and "legislative purpose"were, in fact, considered and weighed by the court.
The only case cited by Moreno that directly supports his position is Hanebuth v. Bell Helicopter International, 694 P.2d 143 (Alaska 1984). In Hanebuth, the majority applied the discovery rule to an absolute limitations statute on the basis that failure to do so would result in injustice and would make it more profitable for a tortfeasor to kill rather than scratch a plaintiff. Id. at 146-47. However, as the dissent in Hanebuth points out, the majority reached its decision only after it ignored its own recent and controlling precedent, the plain language of the statute, and the vast majority of decisions to the contrary from other jurisdictions. Id. at 147 (Moore, J., dissenting). We decline to follow Hanebuth for these reasons, and because the decision both relies on distinguishable cases[5] and fails to recognize the distinction between personal injury and death actions.[6]
Summary.
The language used in section 16.003(b) reflects a clear legislative intent to adopt an absolute two-year limitations period for wrongful death actions. The legislature could have either left "accrual" undefined in section 16.003(b) or could have stated that the cause of action accrues "on the death of the injured person or upon discovery of the cause of death"; either route would have allowed the discovery rule to be applied to section 16.003(b). Instead, the statute unambiguously specifies one eventdeathand only that one event as the date upon which the action accrues. By specifying that date, the legislature has foreclosed judicial application of the discovery rule. If we concluded otherwise, we would be disregarding the plain meaning of section 16.003(b), distorting the clear function of the discovery rule, frustrating *355 the legitimate purposes of limitation statutes, and ignoring the well-reasoned opinions of most other jurisdictions.
"Open Courts".
Article I, section 13 of the Texas Constitution provides:
All courts shall be open, and every person for an injury done him, and his lands, goods, person or reputation, shall have remedy by due course of law.
This provision, known as the "open courts" provision, is premised upon the rationale that the legislature has no power to make a remedy by due course of law contingent upon an impossible condition. Morrison, 699 S.W.2d at 207; Nelson v. Krusen, 678 S.W.2d 918, 921 (Tex.1984). In order to establish an "open courts" violation, a litigant must satisfy a two-part test: first, he must show that he has a well-recognized common-law cause of action that is being restricted; and second, he must show that the restriction is unreasonable or arbitrary when balanced against the purpose and basis of the statute. Lucas v. United States, 757 S.W.2d 687, 690 (Tex.1988); Sax v. Votteler, 648 S.W.2d 661, 666 (Tex. 1983).
Moreno contends that if section 16.003(b) does not provide for application of the discovery rule, it is unconstitutional because he neither discovered, nor could have discovered through the exercise of reasonable diligence, his cause of action within the two-year limitations period. In other words, Moreno contends that section 16.003(b) is unconstitutional because it makes his remedy contingent on an impossible condition, namely, the discovery of the connection between aspirin and Reye's syndrome within two years after his child's death. Moreno argues that the "open courts" provision applies because Texas recognizes a common-law right to assert a wrongful death action. See Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S. Ct. 1772, 26 L. Ed. 2d 339 (1970). Alternatively, Moreno argues that wrongful death should be accorded common-law status for purposes of review under the "open courts" provision because a death action incorporates common-law elements and because there is no fundamental distinction between a common-law action for non-fatal personal injuries and a statutory action for wrongful death. See Vassallo v. Nederl-Amerik Stoomy Maats Holland, 162 Tex. 52, 344 S.W.2d 421, 423 (1961). Finally, Moreno contends that section 16.003(b) is unreasonable and arbitrary because it denies him a remedy that would have been available to him had his child lived instead of died.
Common-law Requirement.
We first consider the question of whether Moreno is asserting a common-law cause of action. See Waites v. Sondock, 561 S.W.2d 772, 774 (Tex.1977); Lebohm v. City of Galveston, 154 Tex. 192, 275 S.W.2d 951, 954-55 (1955); Hanks v. City of Port Arthur, 121 Tex. 202, 48 S.W.2d 944 (1932). In Hanks, this court applied the "open courts" provision to a municipal ordinance which required notice to a municipality of a defective condition prior to the filing of suit. Essential to this court's holding in that casethat the ordinance violated the "open courts" provisionwas a determination that the cause of action at issue, municipal liability, was common law rather than statutory. Implicit in the opinion was a recognition of the distinction between a court's power to apply "open courts" protection to common-law causes of action on the one hand, and statutorily created actions on the other. A common-law cause of action exists without a legislative enactment. As such, article I, section 13 of the Texas Constitution mandates that the courts be open to pursuing such claims. The legislature is not entitled to restrict or abrogate a common-law cause of action without a reasonable basis and without providing an adequate substitute. If, however, a cause of action was not recognized at common law, but was itself created by the legislature, any legislative abrogation of the cause of action would not be a true abrogation of a constitutional right. Rather, the legislature would simply not have granted as extensive a right as it might have. See Castillo v. Hidalgo County Water Dist. 1, 771 S.W.2d 633, 636 (Tex.App. Corpus Christi 1989, no writ) ("Open Courts" provision does not apply to wrongful *356 death action, which is a statutory cause of action "that expands the rights of an individual beyond those granted by the common law"); see also Stout v. Grand Prairie Indep. School Dist., 733 S.W.2d 290, 295 (Tex.App.Dallas 1987, writ ref'd n.r.e.); Tarrant County Hosp. Dist. v. Ray, 712 S.W.2d 271, 273 (Tex.App.Fort Worth 1986, writ ref'd n.r.e.).
This court has repeatedly said there was no recognized common-law cause of action for wrongful death. See Witty, 727 S.W.2d at 505-06; Duhart v. State, 610 S.W.2d 740, 742 n. 2 (Tex.1980); Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182, 186 (Tex.1968); Elliott v. City of Brownwood, 106 Tex. 292, 166 S.W. 1129 (1914); Galveston, Harrisburg and San Antonio R.R. Co. v. Le Gierse, 51 Tex. 189, 199 (1879). Wrongful death causes of action owe their existence to statutes changing this common-law rule. TEX.CIV.PRAC. & REM. CODE ANN. § 71.002; Duhart, 610 S.W.2d at 742 n. 2; Marmon, 430 S.W.2d at 182.[7] Moreno relies on Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S. Ct. 1772, 26 L. Ed. 2d 339 (1970) to support his argument that the common law recognized an action for wrongful death. In Moragne, however, while the majority recognized a common-law action for wrongful death in maritime law, it readily acknowledged that no such action existed at common law. 398 U.S. at 382, 384, 90 S.Ct. at 1778, 1779. Similarly, Moreno's argument that a wrongful death action is really a common-law action because it incorporates common-law elements ignores the fact that it is the Wrongful Death Act itself which incorporates and sets forth the "elements" of the cause of action. TEX.CIV.PRAC. & REM. CODE § 71.002(b)(1986). The fact that common-law elements are required is the result of an express statutory provision and does not change the fact that the underlying right to bring the action is statutory.[8]
Summary.
Our most recent open courts decisions have consistently required that the cause *357 of action restricted be one that is well defined in the common law. Lucas v. U.S., 757 S.W.2d 687, 690 (Tex.1988); Nelson v. Krusen, 678 S.W.2d 918, 922 (Tex.1984). Moreno's constitutional attack on section 16.003(b) is not premised upon restriction of a common-law cause of action, and, therefore, necessarily fails the first prong of the open courts test. See Castillo v. Hidalgo County Water Dist. 1, 771 S.W.2d 633, 636 (Tex.App.Corpus Christi 1989, no writ) (wrongful death action did not exist at common law, and it is only by virtue of statutory authority that such suits can be maintained; therefore, "open courts" provision simply does not apply).
Finally, and notwithstanding the dissent's argument to the contrary, we believe today's decision is entirely reconcilable with our decision in Nelson, 678 S.W.2d at 918. First, Nelson involved limitations on a malpractice actiona well-established common law cause of action. See, e.g., Sax v. Votteler, 648 S.W.2d 661, 664-666; Texas & P. Ry. Co. v. Morin, 66 Tex. 225, 18 S.W. 503 (1886). Second, because the injury complained of in Nelson did not manifest itself until after limitations had run, the Nelsons had no reason to know of their injury, and thus their ability to bring suit, until after limitations had expired. In the instant case, the injuryi.e. deathwas immediately known. Even in those Texas cases which have applied the discovery rule the courts have held that limitations begin to run when the fact of injury is known. See, e.g., Rascoe v. Anabtawi, 730 S.W.2d 460, 463 (Tex.App.Beaumont 1987, no writ) (injury evident and limitations commenced on day plaintiff died); Love v. Zales Corp., 689 S.W.2d 282, 285 (Tex.App. Eastland 1985, writ ref'd n.r.e.) (discovery rule does not apply in wrongful death cases to toll running of limitations until plaintiff discovers that he has a cause of action); cf. Coody v. A.H. Robins Co., 696 S.W.2d 154, 156 (Tex.App.San Antonio 1985, no writ) ("The discovery rule speaks only of discovery of the injury [and] does not operate to toll the running of the limitations period until such time as plaintiff discovers all of the elements of a cause of action."); Otis v. Scientific Atlanta, Inc., 612 S.W.2d 665, 666 (Tex.Civ.App.Dallas 1981, writ ref'd n.r.e.) (limitations run from date injury is discovered, not from date of discovery of responsible party).[9]
For the reasons stated, our answer to the first certified question is that the discovery rule does not apply to TEX.CIV.PRAC. & REM.CODE § 16.003(b). In response to the second certified question, we answer that § 16.003(b), as interpreted, is not inconsistent with and violative of Article I, section 13 of the Texas Constitution.[10]
DOGGETT, J., joined by RAY and MAUZY, JJ., dissenting.
*358 DOGGETT, Justice, dissenting.
Tortfeasors take heart. Today this court grants you absolutionprovided, of course, that you inflict only mortal wounds. Treating our century-old statute of limitations for wrongful death like some Strasbourg goose, the court's opinion crams it full of fictional legislative intent, and then ties to it the baggage of ancient English common law which a number of American courts, including the United States Supreme Court, have rejected as totally lacking in logical or historical justification. In this process, the opinion conveniently ignores or superficially distinguishes opinions from this court. Because I cannot join in this broad grant of a license to kill, I dissent.
Today's decision is irreconcilable with Nelson v. Krusen, 678 S.W.2d 918 (Tex. 1984), in which this court held unconstitutional a similar "absolute" statute of limitations. Justice Spears, writing for the majority, condemned that statute in no uncertain terms, stating:
The limitation period of [the medical malpractice statute], if applied as written, would require the Nelsons to do the impossibleto sue before they had any reason to know they should sue. Such a result is rightly described as "shocking" and is so absurd and so unjust that it ought not to be possible. Hays v. Hall, 488 S.W.2d 412, 414 (Tex.1972); Gaddis v. Smith, 417 S.W.2d 577, 580, 581 (Tex.1967).
678 S.W.2d at 923 (emphasis supplied). Yet today's decision reaches such an equally shocking and unjust result. The limited facts of this case, certified to this court by the Fifth Circuit, are no less compelling than those in Nelson. The Morenos and the Sloans both had infant children who died of Reye's Syndrome after being administered doses of Bayer's Childrens Chewable Aspirin, manufactured by Sterling Drug, Inc. After the death of the infants, the parents were informed that the use of aspirin sometimes contributed to Reye's Syndrome. The only real difference between this case and Nelson is that here the injured parties had the bad luck to die.[1]*359 The court's opinion thus provides a perverse incentive for a tortfeasor to kill rather than merely maim.
The asserted rationale to support this untenable result is two-fold. First, the court examines the "plain meaning" of the "unambiguous" limitations statute and concludes that the legislature has intentionally foreclosed application of the discovery rule. This approach directly conflicts with the instruction given to us in the Code Construction Act that "whether or not the statute is considered ambiguous on its face," we must consider both the object sought to be obtained and the consequences of a particular construction. Tex. Gov't Code Ann. § 311.023 (Vernon 1988) (emphasis supplied).[2] We are further mandated that in construing this enactment "a just and reasonable result is intended." Id. § 311.021; see also Witty v. American General Capital Distributors, Inc., 727 S.W.2d 503, 504 (Tex.1987) (the Texas "wrongful death statute is remedial in nature and must be liberally construed ...").[3] As conceded in Nelson, what the court has achieved in foreclosing the discovery rule is the conversea totally unjust and unreasonable result. The parents are permanently denied an opportunity to have their claims for the infants' deaths considered on the merits. The court twists the statute to achieve an artificial, but complete bar to these families recovering by requiring that they bring a cause of action before they could reasonably have discovered its existence.
Any careful analysis of the legislative intent and history of Section 16.003(b) contradicts the court's conclusion. An action for wrongful death has been tied to the date of death since the first passage of a death act in Texas and has survived in virtually identical form to this date.[4] Given this background, the legislature cannot be charged with the intent to abolish the discovery rule in wrongful death actions. *360 It was not until 1967 that this court recognized the application of the discovery rule in an action for personal injuries. Gaddis v. Smith, 417 S.W.2d 577 (Tex.1967). While the 1879 Texas Legislature no doubt had its strong points, it cannot be said that it was sufficiently foresighted to have as its objective the abolition of a doctrine that did not exist in either name or substance until almost a century later.[5]
This court examined the applicable legislative purpose many years ago in De Harn v. Mexican National Ry., 86 Tex. 68, 70, 23 S.W. 381, 381-82 (1893):
The reason of the provision is obvious. Since no cause of action could be brought by the relatives of the injured person until death had ensued, and since a great length of time might elapse between the injury and the death, it is reasonable that the time of the death should be taken as the point from which limitation should begin to run.
The court completely misapplies this case. The question is not whether De Harn deals with the issue of the application of the discovery ruleas stated above, it could not. The issue is rather to determine the general legislative intent in setting the date of death as the commencement point for the running of limitations. As De Harn states in unmistakable terms, that purpose was solely to protect the beneficiaries of one who lingered after receiving a lethal injury; the statute is designed to preserve, not to destroy, a cause of action. The result reached by today's opinion stands in clear contradiction of this legislative objective.
As evidenced by previous decisions of this court, labelling a statute of limitations "absolute" does not, as the opinion asserts, make it impenetrable to tolling principles. For example, in Borderlon v. Peck, 661 S.W.2d 907 (Tex.1983), we tolled an "absolute" statute of limitations on the basis of the common-law doctrine of fraudulent concealment. That doctrine has been held applicable by this court to toll the statute of limitations in actions for wrongful death. Texas & P. Ry. v. Gay, 86 Tex. 571, 576, 26 S.W. 599, 614 (Tex.1894).[6]
As a review of the cases cited by the court evidences, tolling of limitations to permit discovery is the rule rather than the exception. See, e.g., Willis v. Maverick, 760 S.W.2d 642 (Tex.1988) (discovery rule applicable in legal malpractice action); Weaver v. Witt, 561 S.W.2d 792 (Tex.1977) (medical malpractice); Kelley v. Rinkle, 532 S.W.2d 947 (Tex.1976) (action for libel of credit reputation). These cases are not limited, as the court's opinion concludes, to tolling limitations until the fact of the injury is known. In Willis, we held that:
[T]he statute of limitations for legal malpractice does not begin to run until the claimant discovers or should have discovered through the exercise of reasonable care and diligence the facts establishing the elements of his cause of action.
760 S.W.2d at 646 (emphasis supplied).[7] Knowledge of Petitioners' causes of action was not complete upon discovery of the injury (i.e., death) as the opinion suggests; *361 the element of the causative link between the use of aspirin and Reye's Syndrome was equally critical.[8]
Rather than following the great weight of our own precedent, the court instead relies on two cases in which the court refused to apply the discovery rule. Yet in those cases, unlike here, the legislature had taken more than ample steps to bar application of the rule. In the first of these two cases construing the "absolute" statute of limitations applicable to health care liability claims, this court had before it abundant materials reflecting the legislative intent underlying the Medical Liability and Insurance Improvement Act. Morrison v. Chan, 699 S.W.2d 205, 208 (Tex.1985). At the time that limitation provision was passed, the discovery rule was well known to the Texas Legislature. A key legislative objective was to: "reduce excessive frequency and severity of health care liability claims." Tex.Rev.Civ.Stat.Ann. art. 4590i, §§ 1.02(a)(5) and 1.02(b)(1) (Vernon Supp.1989). As evidenced by De Harn, supra, the objective in defining the accrual date for wrongful death as the date of death was to expand and not to contract the cause of action. Unlike the statute applicable to actions for wrongful death, the health care liability limitation provision makes no reference to an "accrual" of a cause of action and disclaims the effect of other laws that would toll the time period for bringing suits, including for minority and other disabilities. The limitations statute for wrongful death is markedly different in this regard; that statute is subject to tolling for minority and other disabilities. Tex.Civ.Prac. & Rem.Code Ann. § 16.001 (Vernon 1986 & Supp.1990).
The other cited case, Safeway Stores, Inc. v. Certainteed Corp., 710 S.W.2d 544 (Tex.1986), is even more persuasive authority to construe the statute before us to permit application of the discovery rule. The issue presented in that case was whether the statute of limitations for breach of warranty ran from the date of the breach or that of discovery. The statute sets the date of accrual and explicitly disclaims the applicability of the discovery rule, providing that a "cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach." Tex.Bus. & Comm.Code Ann. § 2.725 (Vernon 1968) (emphasis supplied). Thus, in adopting Section 2.725, the legislature determined that more was needed to bar the discovery rule than just referring to the date of accrual; that rule needed to be expressly disclaimed. This statute demonstrates an appropriate way to preclude application of the discovery rule. The court ignores the fact that the legislature is quite capable of expressly disclaiming the discovery rule but has not done so in the context of wrongful death.
To support its improbable position the court resorts to case law from other jurisdictions which have little comparability to the Texas statute. Most if not all of these cases appear to involve a limitations provision contained within the wrongful death statute itself and not one, like ours, that is part of a general limitations statute. The courts thus viewed the limitations as a condition upon the right, not merely the remedy, subject to strict construction in derogation of the common law. No such interpretation is applicable in this state. Because the Texas statutes concerning wrongful death and limitations are separate, the latter is procedural rather than a substantive qualification or condition restricting the right to bring an action for death. Franco v. Allstate Ins. Co., 505 S.W.2d 789, 792-93 (Tex.1974).
An approach far superior to that taken by today's opinion is contained in Hanebuth v. Bell Helicopter International, 694 P.2d 143, 144 (Alaska 1984). In considering *362 a requirement that a wrongful death action be "commenced within two years after the death," that court's considerations tracked the same concerns delineated under Texas law. Echoing Nelson, the Alaskan court applied the discovery rule to comport with principles of "fundamental fairness," to be "consistent with the purposes of the act," and to avoid "unjust and absurd results." 694 P.2d at 146. The court said it was "profoundly unfair to deprive a litigant of his right to bring a lawsuit before he has any reasonable opportunity to do so." Id. at 147. Further, "a tortfeasor whose conduct has been so grievous as to cause death would be exonerated, while another tortfeasor, guilty of the same conduct except for the fortuity that it merely caused injury, would be held responsible." Id.[9] The reasoning of today's opinion in rejecting Hanebuth is insightful. One who is only maimed, we are told at note 5, may be "in need of time to recover before beginning an investigation." Why shouldn't parents whose child has been wrongfully taken from them be in need of time to recover and discover as well? Solely because an insensitive court refuses Texas families that right.
The statute before us for interpretation contains only two sentences:
A person must bring suit not later than two years after the day the cause of action accrues for injury resulting in death. The cause of action accrues on the death of the injured person.
Tex.Civ.Prac. & Rem.Code Ann. § 16.003(b) (1986). In today's opinion, the court determines from the "plain language" of this minimal statute that the legislature intended to bar the yet-to-be-judicially-created discovery rule even though this statute permits tolling under exceptions not just grounded in statute, such as for minors, but also those judicially-created, such as for fraudulent concealment. I cannot concur in such a complete manipulation of legislative intent.
The second asserted basis for the decision today is its refusal to extend constitutional protection to a cause of action for wrongful death which it conveniently pigeonholes as "wholly statutory." Because it is claimed that the "open courts" provision of article I, section 13 of the Texas Constitution protects only common-law causes of action, the court concludes that it is powerless to review a restriction on the exercise of a statutory wrongful death action. This conclusion is based on two flawed assumptions.
First, the distinction between common law and statutory causes of action for purposes of review under the "open courts" provision is more honored in the breach than the observance. LeCroy v. Hanlon, 713 S.W.2d 335 (Tex.1986), authored by Justice Spears, is a prime example. There this court struck as unconstitutional under the "open courts" provision a filing fee that went to state general revenues. The effect of the fee with respect to the individual plaintiff in that case was to bar his filing of suit under the Texas Deceptive Trade Practices Act and the Texas Insurance Code, i.e., wholly statutory causes of action. 713 S.W.2d at 336. For reasons indiscernible, the court in LeCroy was not troubled by today's controlling distinction between common law and statutory causes of action. Yet the failure to apply the discovery rule so as to prohibit completely a family's exercise of its legal rights closes the door to the Texas courts far more permanently than charging the extra forty dollar filing fee rejected in LeCroy. The constitutional guarantee that "[a]ll courts shall be open" to "every person" is a hollow one to families like the Morenos and the Sloans.
Second, this injustice cannot simply be defined away by claiming a wrongful death action is "wholly statutory." While a *363 wrongful death action may have once been considered a creature of statute, it has evolved into a complex hybridpart constitutional, part statutory and part judicially-developed common law. An early decision of this court recognized the multi-faceted nature of a wrongful death action. While noting the statutory nature of the action, this court nonetheless stated:
In our own state, this right of action is wisely recognized by the organic law, supplemented by guarded legislative provisions enacted for the purposes of securing to the beneficiaries just compensation in a case meriting it....
Nelson v. Galveston, H. & S.A. Ry., 78 Tex. 621, 624, 14 S.W. 1021, 1022 (1890) (emphasis supplied).[10]
Even the most cursory examination of the history of the Texas Wrongful Death Act reveals its tripartite nature. As first adopted in Texas in 1860, the statute was a mere four paragraphs in length, setting out the beneficiaries, the potential defendants (basically providers of public transport) and the basis of the cause of action (negligence or carelessness), permitting the recovery of damages and requiring suit to be brought within one year after death. Law of February 2, 1860, ch. 35, 1860 Tex.Gen.Laws 32. While the statute has been amended several times over the last 129 years, primarily to expand the class of potential defendants and to permit recovery of exemplary damages, it remains a "bare bones" enactment. Over that lengthy time period, many interstices of the statute have been left to the courts to fill, relying on common-law concepts.[11] In fact, writing for the court in Sanchez v. Schindler, 651 S.W.2d 249, 252 (Tex.1983), Justice Spears indicated a strong preference for this judicial development of the wrongful death statute. Because of the symbiotic relationship between the common law and statute, an action for wrongful death merits review under the "open courts" provision of article I, section 13 of the Texas Constitution. Labelling this action "statutory" rather than engaging in thoughtful analysis provides a convenient escape mechanism from the Houdini-defying task of reconciling this opinion with Nelson v. Krusen.
A cause of action for wrongful death is also in part constitutionally given. As initially adopted, the Texas Wrongful Death Act made no provision for exemplary damages. To correct this omission, the Texas Constitution of 1869 included a provision permitting recovery of exemplary damages for "homicide, through wilful act, or omission." Tex.Const. art. XVI, § 26, interp. commentary (Vernon 1955). The provision was amended in 1879 to expand the grounds for recovery to include "gross neglect." Id.; see also Demarest, The History of Punitive Damages in Texas, 28 S.Tex.L.J. 535, 540 (1987).
This constitutional right may not be legislatively abolished or restricted. In Morton Salt Co. v. Wells, 123 Tex. 151, 70 *364 S.W.2d 409, 410 (1934), the issue presented was whether the plaintiffs in a death action covered by the worker's compensation statute were first required to present a claim for exemplary damages to the Industrial Accident Board prior to recovery in court. This court stated:
We agree with the Court of Civil Appeals that the district court had original jurisdiction, without the presentation of the claim for exemplary damages to the Industrial Accident Board. The cause of action here asserted is one given by the Constitution, and the Legislature was without power to add to or take from the conditions under which, by virtue of the Constitution, it could be maintained, nor did it attempt to do so.
70 S.W.2d at 410. A similar unconditional analysis was employed in Hanks v. City of Port Arthur, 121 Tex. 202, 48 S.W.2d 944 (1932), a case cited with frequency in today's opinion. Port Arthur's attempt to preclude liability through its municipal charter by requiring it be notified of a defective condition prior to the occurrence of an injury was held unconstitutional under both the "open courts" provision, article I, section 13 of the Texas Constitution, and article I, section 17, guaranteeing just compensation for a taking of property for public use. 121 Tex. at 206, 48 S.W.2d at 945. In examining the question of whether the charter could condition the constitutional right to bring suit for compensation, this court stated:
The Constitution admits of no such limitation.
When a city violates the Constitution to the damage or injury of a complaining party, a constitutional cause of action arises, and the Legislature is powerless to make provision for a notice of the type here involved. The Constitution, sec. 17, art. 1, having fixed the method by which a city may take or damage private property without liability for tort, the constitutional method is exclusive, and the Legislature is without power to prescribe any other method to accomplish the same purpose.
121 Tex. at 208, 48 S.W.2d at 946 (emphasis supplied). The court is content to ignore this well-entrenched principle of constitutional law.[12]
An exercise in somnambulism, today's opinion merely sleepwalks through the law, reciting the rule that there was no cause of action for death at common law but not engaging in conscious thought. Of the five cases cited as authority for the proposition that there was no action for death at common law, not one of them engages in any in-depth analysis. Only two reference the rule's origin as dictum in Lord Ellenborough's decision in Baker v. Bolton in England in 1808. Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182, 184 n. 4 (Tex. 1968); Galveston, H. & S.A. Ry. v. Le Gierse, 51 Tex. 189, 198-99 (1879). One commentator has described the rule as "a magical intoned incantation recited by rote," followed by courts without analysis of the validity of its historical origins or current applicability. S. Speiser, Recovery for Wrongful Death 2d §§ 1:1 and 1:5 (1975). That criticism accurately describes today's opinion and the precedent it cites.
A hard look at this common-law prohibition reveals that it lacks any rational basis and should not be blindly followed by this court. The Baker v. Bolton case was a nisi prius case (i.e., a case tried in the local court before a single judge rather than en banc in the superior court at Westminster) without authority or supporting reasoning for its statement that the common law barred redress for a fatal injury. Moragne v. States Marine Lines, Inc., 398 U.S. 375, 382-83, 90 S. Ct. 1772, 1778-79, 26 L.Ed.2d *365 339 (1970).[13] Contrary to the importance it later achieved, the decision in Baker v. Bolton went unnoticed by the English courts until 1873.[14]See Malone, The Genesis of Wrongful Death, 17 Stan.L.Rev. 1043, 1059 (1965). In fact, the first court anywhere to treat it as precedent was an American one, Carey v. Berkshire R.R., 55 Mass. (1 Cush.) 475, 48 Am.Dec. 616 (1848), some 40 years after Baker v. Bolton was decided.[15] During that interval, there was no reported opinion denying a wrongful death claim in this country, while several early decisions expressly recognized such a common-law action. Malone, The Genesis of Wrongful Death, supra, at 1066-67; Crofs v. Guthery, 2 Root 90, 1 Am.Dec. 61 (Conn.1794); Ford v. Monroe, 20 Wend. 210 (N.Y.Sup.Ct.1838); James v. Christy, 18 Mo. 162 (1853).
This historical timeline suggests that the English common-law prohibition was never truly part of the common law of Texas. In 1840, the Congress of the Republic of Texas enacted a law which adopted the common law of England to the extent consistent with the Constitution and laws of this state. This law has been interpreted by this court to mean the common law of England as "declared by the courts of the different states of the United States." Grigsby v. Reib, 105 Tex. 597, 600, 153 S.W. 1124, 1125 (1913) (emphasis supplied). As discussed above, in 1840 the American courts recognized a common-law action for wrongful death.
Building on virtually universal commentary critical of the English common-law rule barring actions for wrongful death[16] and the questionable historical basis for the rule's adoption, the United States Supreme Court in the landmark Moragne decision recognized a common law action for wrongful death in maritime cases. Writing for the unanimous court, Justice Harlan engaged in a scholarly examination of the three asserted justifications of the common law prohibition and soundly rejected them all. The first, deemed the "sole substantial basis," is the felony-merger doctrine:
According to this doctrine, the common law did not allow civil recovery for an act that constituted both a tort and a felony. The tort was treated as less important than the offense against the Crown, and was merged into, or pre-empted by, the felony. The doctrine found practical justification in the fact that the punishment for the felony was the death of the felon and the forfeiture of his property to the Crown; thus, after the crime had been punished, nothing remained of the felon or his property on which to base a civil action. *366 Moragne, 398 U.S. at 381, 90 S.Ct. at 1778 (citations omitted); see also Le Gierse, 51 Tex. at 198-99. The Moragne opinion rejected the applicability of this historical justification in the United States, noting that American law never recognized forfeiture of property as felony punishment. Moragne, 398 U.S. at 384, 90 S.Ct. at 1779. Texas law is in accord; the early laws of the Republic of Texas do not appear to recognize forfeiture, and this sanction was expressly barred by the Texas Constitution of 1876. Tex. Const. art. I, § 21.
The second basis for the rule reviewed in Moragne is the asserted difficulty of computing damages because of a "repugnance... to setting a price upon human life." Moragne, 398 U.S. at 385, 90 S.Ct. at 1779 (citations omitted). Recognizing that damages are regularly determined in statutory wrongful death actions and such calculation poses no greater difficulty than awarding damages for nonfatal injuries, the Court found this basis of the rule unpersuasive. The third basis is the ancient common-law rule that a personal cause of action did not survive the death of its possessor. The Court noted that rule applies only to the victim's personal claims and has no bearing on whether a dependent should be permitted recovery for the injury he suffers because of the victim's death. Id. at 385, 90 S.Ct. at 1779. The Court then concluded that:
The American courts never made the inquiry whether this particular English rule, bitterly criticized in England, "was applicable to their situation," and it is difficult to imagine on what basis they might have concluded that it was.
Id. at 386, 90 S.Ct. at 1780.[17]
The Moragne decision noted the prevalence of statutes permitting recovery for wrongful death, adopted in all fifty states and by numerous federal statutes, and concluded:
These numerous and broadly applicable statutes, taken as a whole, make it clear that there is no present public policy against allowing recovery for wrongful death. The statutes evidence a wide rejection by the legislatures of whatever justifications may have once existed for a general refusal to allow such recovery.... The policy thus established has become itself a part of our law, to be given its appropriate weight not only in matters of statutory construction but also those of decisional law.
398 U.S. at 390-91, 90 S.Ct. at 1782.[18] Although this analysis in Moragne was employed in an opinion by Justice Spears to justify extending comparative causation to a products liability action, Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 427 (Tex. 1984), today Moragne is curiously limited to its facts.
The facts of the case before us differ vastly from the stagecoach and railway accidents for which, over a century ago, the scope of the wrongful death statute was originally envisioned. We are in an age of more insidious, less obvious causes of death, many of which are simply not discoverable within the two-year limitations period. Thus, not simply the occasional family, but an entire class of families will be deprived of their claims by the court's decision. This deprivation cannot be justified on the traditional ground that these victims "slept on their rights," because they could not have been aware of the basis of their cause of action until after their claims were barred. The opinion thus defies the very purpose of the discovery ruleto prevent legislation from merely affording "a delusive remedy." Urie v. Thompson, 337 U.S. 163, 169, 69 S. Ct. 1018, 1024, 93 L. Ed. 1282 (1949).
*367 The court's opinion can rightly be recorded as one of the most anti-family decisions in recent memory. It says to a wife who has lost a husband, to a child who has lost its parents, to the parents whose lives have been torn apart by the death of a child, your rights are denied; the merits of your claim against a hidden killer will never be considered by a Texas judge and jury.[19]
The goose is fattened and the table set, compliments of today's opinion. Pull up a chair, tortfeasors, and dine on pæté de foie gras. You have been absolved from the infliction of lethal wounds, at least in the forum of the Texas courts. I dissent.
RAY and MAUZY, JJ., join in this dissent.
NOTES
[1] Moreno has not argued that the doctrine of fraudulent concealment operates to toll the running of limitations in this case; nor has the Fifth Circuit requested that we address this issue. The doctrine of fraudulent concealment provides that where a defendant is under a duty to make disclosure but fraudulently conceals the existence of a cause of action from the party to whom it belongs, the defendant is estopped from relying on the defense of limitations until the party learns of the right of action or should have learned thereof through the exercise of reasonable diligence. Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex.1983). Because the question of the doctrine's applicability in the present case is not properly before us, we express no opinion on the issue.
[2] A number of other states construing absolute statutes with similar or identical language to that found in section 16.003(b) have held that the clear language of the statute precluded application of the discovery rule. See, e.g., Trimper v. Porter-Hayden, 305 Md. 31, 501 A.2d 446, 449 (1985) (clear language of statute could not be rewritten under the "guise of statutory construction"); Presslaff v. Robins, 168 N.J.Super. 543, 403 A.2d 939, 941 (App.Div.1979) ("The court may not strain on policy grounds to manufacture a signification of the statutory language to achieve a result obviously not intended by the legislature and in direct conflict with the unequivocal proscription in [the statute]."); Morano v. St. Francis Hospital, 100 Misc. 2d 621, 420 N.Y.S.2d 92, 95 (N.Y.Sup.Ct.1979) ("The language leaves no room for judicial construction and there are no statutory spaces to be filled."); Cadieux v. International Tel. & Tel. Corp., 593 F.2d 142, 144 (1st Cir.1979) (applying Rhode Island law) ("date of death" cannot be construed to mean "date of discovery of the cause of death").
[3] This is the exact position taken by the court in Stiles v. Union Carbide Corp., 520 F. Supp. 865, 867 (S.D.Tex.1981) ("When the legislature has clearly and unequivocally prescribed that a cause of action accrues on the occurrence of a specified event," the courts have neither the necessity nor the authority to invoke the discovery rule.). A good argument can be made that the legislature has adopted this interpretation by recodifying the statute in 1985 without adding any substantive changes. See Cunningham v. Cunningham, 120 Tex. 491, 40 S.W.2d 46, 51 (1931) ("Nothing is better settled than that the legislature must be regarded as intending statutes, when repeatedly re-enacted, ... to be given that interpretation which has been settled by the courts.").
[4] See, e.g., With v. General Electric Co., 653 P.2d 764 (Colo.App.1982); Farmers Bank & Trust Co. of Bardstown v. Rice, 674 S.W.2d 510, 512 (Ky. 1984); Trimper v. Porter-Hayden, 305 Md. 31, 501 A.2d 446, 449 (1985); Szlinis v. Moulded Fiber Glass Cos., 80 Mich.App. 55, 263 N.W.2d 282 (1977); DeCosse v. Armstrong Cork Co., 319 N.W.2d 45 (Minn.1982); Morano v. St. Francis Hospital, 100 Misc. 2d 621, 420 N.Y.S.2d 92, 95 (N.Y.Sup.Ct.1979); Cadieux v. Inter. Tel. & Tel. Corp., 593 F.2d 142, 144 (1st Cir.1979) (applying Rhode Island law); Presslaff v. Robins, 168 N.J. Super. 543, 403 A.2d 939, 942 (App.Div.1979); Anthony v. Koppers, 436 A.2d 181, 183 (1981); Pastierik v. Duquesne Light Co., 514 Pa. 517, 526 A.2d 323 (1987); White v. Johns-Manville Corp., 103 Wash.2d 344, 693 P.2d 687, 692 (1985); see also W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of Torts § 127, at 957 (5th ed. 1984) (noting that majority rule is that limitations in wrongful death actions begin to run on date of death and that courts have rejected applying discovery rule to wrongful death actions).
[5] The few cases relied on by the Hanebuth majority are distinguishable. See Hanebuth, 694 P.2d at 147. In Frederick v. Calbio Pharmaceuticals, 89 Cal. App. 3d 49, 152 Cal. Rptr. 292 (1979), the court was interpreting an "accrual" statute and not an "absolute" statute like § 16.003(b). In Myers v. McDonald, 635 P.2d 84 (Utah 1981), the plaintiff did not become aware of the decedent's death until 3 years after it had occurred, whereas in the present case death was known immediately. Indeed, the Myers court expressly distinguished its decision from other decisions holding that limitations begin to run when the fact of death is known even if its cause is not. The decision in Shaughnessy v. Spray, 55 Or. App. 42, 637 P.2d 182 (1981) provides no support because that case was interpreting a statute which required an action to be commenced within 3 years after the occurrence "of the injury causing the death," rather than within 2 years after "death." Finally, it is not so clear that the discovery rule applies to the Illinois absolute statute; the Hanebuth majority omitted cases which have held that it does not, see Greenock v. Rush Presbyterian St. Luke's Med. Center, 65 Ill.App.3d 266, 22 Ill. Dec. 1, 3, 382 N.E.2d 321, 323 (1978), and the Illinois Supreme Court has not yet resolved the conflict.
[6] The Hanebuth decision concludes that it is "absurd" and arbitrary to only allow application of the discovery rule in personal injury cases, and not in wrongful death actions. Yet, application of the discovery rule in personal injury cases is reasonable because the live plaintiff may either be unaware of an injury at the time of its occurrence, or in need of time to recover before beginning an investigation. Neither of these considerations, however, are present in wrongful death actions because survivors are put on immediate notice by the event of death that an investigation into the cause of action must occur to preserve the claim. This definitive notice is what differentiates wrongful death and survival actions from personal injury actions. By disallowing application of the discovery rule to § 16.003(b), our opinion recognizes this distinction and effectuates the state interest in the prompt settlement of a decedent's affairs. See Pastierik v. Duquesne Light Co., 514 Pa. 517, 526 A.2d 323 (1987); Cadieux, 593 F.2d at 144-45. Moreover, the dissent's argument that the Morenos were unaware of their ability to assert a cause of action is undermined by the fact that the Morenos, after receiving presumptive certificates of death describing Reye's syndrome as the cause of death, hired a "medical expert" who reviewed the file and determined that no medical malpractice had occurred. Faced with similar facts, the United States Supreme Court denied relief to a tardy plaintiff under the Federal Torts Claim Act, stating:
If [the plaintiff] fails to bring suit because he is incompetently or mistakenly told that he does not have a case, we discern no sound reason for visiting the consequences of such error on the defendant by delaying the accrual of the claim until the plaintiff is otherwise informed or himself determines to bring suit, even though more than two years have passed from the plaintiff's discovery of the relevant facts about injury.
United States v. Kubrick, 444 U.S. 111, 100 S. Ct. 352, 62 L. Ed. 2d 259 (1979).
[7] The common-law not only "denied a tort recovery for injury once the tort victim had died, it also refused to recognize any new and independent cause of action in the victim's dependents or heirs for their own loss at his death." W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of Torts § 127, at 945 (5th ed. 1984). (citations omitted). This rule denying a common-law right to assert a wrongful death action was confirmed in Baker v. Bolton, 1 Camp. 493, 170 Eng. Reprint 1033 (1808). In response to Baker, the English Parliament, in 1846, enacted "an Act for Compensating the Families of Persons Killed by Accident," otherwise known as Lord Campbell's Act. 9 & 10 Vict., ch. 93 § 2 (1846). See Witty v. American General Distrib., Inc., 727 S.W.2d 503, 504 (Tex.1987) ("Prior the passage of Lord Campbell's Act, there was no statutory or common-law cause of action for wrongful death.") This statute served as the pattern for Texas' first wrongful death statute, enacted in 1860. Tex. Gen.Laws 32; March v. Walker, 48 Tex. 372, 375 (1877); Sanchez v. Schindler, 651 S.W.2d 249, 251 (Tex.1983).
[8] The dissent attempts to establish that Texas recognizes a common law action for wrongful death despite the fact that every reported Texas decision considering the issue has held otherwise. For support, the dissent cites commentary and cases from other jurisdictions which argue that a wrongful death action should be recognized in the common law, and not that it was. The dissent also argues that Texas, in 1840, implicitly adopted two cases from other jurisdictions which recognized the common-law right to assert a wrongful death action. See Crofs v. Guthery, 2 Root 90, 1 Am.Dec. 61 (Conn. 1794); Ford v. Monroe, 20 Wend. 210 (N.Y.Sup. Ct.1838). Crofs was decided fourteen years prior to Baker v. Bolton and "could not withstand the greater weight" of the latter decision. Green, The Texas Death Act, 26 Tex.L.Rev. 133, 136 n. 9 (1947), and Ford apparently recognized the action without comment. Neither Crofs nor Ford, however, was mentioned in Carey v. Berkshire R.R., 55 Mass. (1 Cush.) 475, 48 Am.Dec. 616 (1848), where a leading American jurisdiction, the Supreme Judicial Court of Massachusetts, confirmed the rule set out in Baker v. Bolton (and universally accepted law ever since) that no action existed at common law for wrongful death. See W. Malone, The Genesis of Wrongful Death, 17 Stanford L.Rev. 1043, 1066-68 (1965). Finally, the dissent's argument does not answer the question of why the Texas Legislature would find it necessary to pass a wrongful death act in 1860 if there already was in existence a Texas common-law right to assert such an action. The dissent's approach would suggest that the 1860 act was superfluous. On the contrary, the 1860 act was designed to fulfill the same purpose as Lord Campbell's act: "... to fill the gap in the common law which had been created by the failure of the courts ... to provide a remedy for injuries resulting in death." Green, The Texas Death Act, 26 Tex.L.R. 133, 136 (1947).
[9] The dissent proposes not only that the discovery rule should apply to § 16.003(b), but also that the rule should operate to toll limitations until a plaintiff discovers a specific cause of action against a specific defendant. More specifically, the dissent proposes that courts allow wrongful death claims to be maintained whenever new scientific evidence links a particular disease with exposure to a particular substance, even though the death had occurred years, or even decades, earlier. This approach, however, would effectively "expand ... to infinity the time period during which wrongful death actions could be brought." Pastierik, 526 A.2d at 325. No cause of action would ever accrue until the plaintiff learned or should have learned of that specific cause of action, and no case would be concluded until every potential cause of action was discovered. This approach is also questionable from a public policy standpoint. It is hardly in the public interest "to encourage, literally, the unearthing of wrongful death causes of action long after death has occurred because there is some suspicion that death was caused by a wrongful act." DeCosse, 319 N.W.2d at 52.
[10] Art. 16, § 26 of the Texas Constitution provides as follows:
Every person, corporation, or company, that may commit a homicide, through wilful act, or omission, or gross neglect, shall be responsible, in exemplary damages, to the surviving husband, widow, heirs of his or her body, or such of them as there may be, without regard to any criminal proceeding that may or may not be had in relation to the homicide.
Tex.Const.Ann. art. 16, § 26 (Vernon 1955). The dissent suggests that § 16.003(b) unduly restricts this constitutional right to exemplary damages by placing an "impossible condition" upon the assertion of the underlying statutory wrongful death action, and, therefore, it is unconstitutional, or, at the very least, subject to an "open courts" challenge. This argument fails for two separate reasons.
First, as parents of a deceased child, the Morenos have no constitutional right to recover exemplary damages under art. 16, § 26. See Hofer v. Lavender, 679 S.W.2d 470, 475 (Tex.1984) (Supreme Court has consistently held that class of beneficiaries listed in art. 16, § 26 does not include parents of deceased child). Indeed, even if this court (or the legislature) wanted to broaden the class of persons entitled to recover exemplary damages to include parents of deceased children, we would be without authority to do so. Id.; see also Scoggins v. Southwestern Electric Service Co., 434 S.W.2d 376 (Tex.Civ. App.Tyler 1968, writ ref'd n.r.e.) (holding that provision in Wrongful Death Act that allowed parents to recover exemplary damages was invalid under art. 16, § 26, since legislature could not enlarge on exemplary damages).
Second, the question of whether § 16.003(b) would operate in other cases to unduly restrict the constitutional right to exemplary damages is not properly before this court because the second certified question only asks whether § 16.003(b) "as applied to the plaintiffs herein violate[s] the open courts provision...." Since it cannot be shown that 16.003(b) violates Moreno's rights under art. 16, § 26, the statute's application to other plaintiffs in other cases is, according to the terms of the certified question, irrelevant. Moreover, this court has repeatedly reaffirmed the rule that if a plaintiff cannot prove the unconstitutionality of a limitations statute as applied to him, the statute will not be struck down merely because it might operate in an unconstitutional manner in another case. See Morrison v. Chan, 699 S.W.2d 205, 207 (Tex. 1985); Nelson v. Krusen, 678 S.W.2d 918, 923 (Tex.1984).
[1] Relying upon facts taken from the summary judgment record of the federal district court, rather than those certified by the Fifth Circuit, the court asserts at footnote 6 that even if the discovery rule were applied, the Petitioners' wrongful death actions would still be barred by limitations. If that analysis were correct, the proper disposition of this case would be to return the certified questions to the Fifth Circuit unanswered. Further, the court ignores an affidavit stating that, although the ability to bring suit for medical malpractice against the doctors and the hospitals treating the infant children was investigated and found wanting, no investigation of the possibility of a link between the use of aspirin and Reye's Syndrome (which would serve as a basis of a products liability action) was made at that time. Moreno Record 284-85; Sloan Record 62-63. The facts of this case are not similar to those in United States v. Kubrick, 444 U.S. Ill, 100 S. Ct. 352, 62 L. Ed. 2d 259 (1979), as the opinion states. In Kubrick, the Court held that the statute of limitations began to run when the plaintiff had knowledge of the injury and its causative link to use of a particular drug.
[2] The opinion cites RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607 (Tex.1985), for the proposition that rules of statutory construction may not be applied when a statute is unambiguous. That case stands in clear conflict with the dictates of the Code Construction Act, quoted above. Interkal, however, involved interpretation of a statute and not a code provision to which the Code Construction Act is applicable. 691 S.W.2d at 607 n. 1. Nor did the court in Cail v. Service Motors, Inc., 660 S.W.2d 814 (Tex.1983), consider the effect of the Code Construction Act.
[3] Further, "[t]his court has always endeavored to interpret the laws of Texas to avoid inequity." Sanchez v. Schindler, 651 S.W.2d 249, 252 (Tex. 1983) (opinion construing Wrongful Death Act by Spears, J.).
[4] That act provided: "The action shall be brought within one year after the death of the deceased." Law of February 2, 1860, ch. 35, § 3, 1860 Tex.Gen.Laws 33. The limitations provision was subsequently moved from the wrongful death act to be included as part of a general limitations statute. Tex.Rev.Civ.Stat. Ann. art. 3202 (Vernon 1879) provided: "There shall be commenced and prosecuted within one year after the cause of action shall have accrued...: 4. Actions for injuries done to the person of another where death ensued from such injuries; and the cause of action shall be considered as having accrued at the death of the party injured." See also Tex.Rev.Civ.Stat.Ann. art. 3353 (same language). The time for bringing an action for death was later expanded to two years. Law of March 4, 1897, ch. 14, § 1, 1897 Tex.Gen.Laws 12. Other than replacing the plural "injuries" with the singular "injury," the accrual language was unchanged. The statute was amended in 1979 to delete the two-year limitations period for actions for debts and accounts, but the limitations provision for a wrongful death action was not changed. Act of June 13, 1979, ch. 716, § 1, 1979 Tex.Gen.Laws 1768-69; see also Tex.Rev.Civ.Stat.Ann. art. 5526 (Vernon 1958) (repealed 1985). The statute was repealed and codified, with no substantive change intended, as part of the Texas Civil Practice and Remedies Code. Act of June 16, 1985, ch. 959, §§ 1 (new provision), 9 (repealer), and 10 (no substantive change intended).
The court asserts that this reenactment and codification after the decision of Stiles v. Union Carbide Corp., 520 F. Supp. 865 (S.D.Tex.1981), refusing to apply the discovery rule in a wrongful death action, worked a legislative adoption of that interpretation. While the legislature may indeed adopt a judicial interpretation by reenacting a statute, see Robinson v. Central Texas MHMR Center, 780 S.W.2d 169, 170-71 (Tex.1989), that interpretation must be by a court of last resort. See Texas Employer's Ins. Ass'n v. Lightfoot, 139 Tex. 304, 162 S.W.2d 929 (1942). Cunningham v. Cunningham, 120 Tex. 491, 40 S.W.2d 46, 51 (1931), cited in the opinion refers to an "interpretation which has been settled by the courts." The fact that this question has been certified to this court by the Fifth Circuit indicates that there is no well-settled interpretation by the Texas courts.
[5] This situation is fundamentally different from that presented to the court today in Dow Chemical Co. v. Alfaro, 786 S.W.2d 674 (Tex.1990). Unlike the discovery rule, the concept underlying the doctrine of forum non conveniens was in existence and being applied on the date the statute was enacted. That this old concept later acquired a new label"forum non conveniens" did not affect the original legislative action in abolishing it.
[6] The court miscomprehends this argument. The question is not whether the doctrine of fraudulent concealment applies to the facts of this case. Rather, the question is whether statutes of limitations labelled "absolute" are subject to common-law tolling principles such as the doctrine of fraudulent concealment and the discovery rule. Our decisions in Borderlon and Gay indicate that they are.
[7] See also Gaddis v. Smith, 417 S.W.2d 577, 581 (Tex.1967) (discovery of the "wrongful act" triggers limitations); Neagle v. Nelson, 685 S.W.2d 11, 12 (Tex.1985) (discovery of the "wrong"). The cases cited in the court's opinion addressed factual situations where the plaintiff was aware of both the injury and its cause. See, e.g., Coody v. A.H. Robins Co., 696 S.W.2d 154, 156 (Tex. App.San Antonio 1985, no writ) (stating that plaintiff learned of injury and its cause simultaneously); Otis v. Scientific Atlanta, Inc., 612 S.W.2d 665, 666 (Tex.Civ.App.Dallas 1981, writ ref'd n.r.e.) (plaintiffs do not assert that they did not know the cause of their injury).
[8] In Willis, we concluded that "any burden placed upon an attorney by application of the discovery rule is less onerous than the injustice of denying relief to unknowing victims." 760 S.W.2d at 646. Yet the injury worked in that case was much less severe than the deaths that occurred here allegedly due to distributing a dangerous pharmaceutical product to the Texas public. Surely the burden placed upon the drug manufacturer is equally less onerous than the injustice of denying relief to unknowing families, like the Morenos and the Sloans, whose children have died.
[9] A similar result has been reached as to an Illinois statute requiring that actions be commenced within two years after death. See Eisenmann v. Cantor Brothers, Inc., 567 F. Supp. 1347 (N.D.Ill.1983) (to deny application of discovery rule would produce absurd result); Matter of Johns-Manville Asbestosis Cases, 511 F. Supp. 1235 (N.D.Ill.1981); Fure v. Sherman Hospital, 64 Ill.App.3d 259, 21 Ill. Dec. 50, 380 N.E.2d 1376 (1978); Praznik v. Sport Aero, Inc., 42 Ill.App.3d 330, 355 N.E.2d 686 (1976).
[10] A number of our sister states have recognized this hybridization to permit application of common-law principles in a wrongful death action. See, e.g., Summerfield v. Superior Court, 144 Ariz. 467, 698 P.2d 712, 718 (1985) (en banc) (the wrongful death "statute and precedent have combined to produce a cause of action with common law attributes"); Hanebuth v. Bell Helicopter Int'l, 694 P.2d 143, 146 (Alaska 1984) (wrongful death statute treated like other common law tort actions, finding discovery rule applies to "absolute" statute of limitations); O'Grady v. Brown, 654 S.W.2d 904, 908, 911 (Mo.1983) (en banc) (wrongful death statute "mends the fabric of the common law" and incorporates common law principles); Haakanson v. Wakefield Seafoods, Inc., 600 P.2d 1087, 1091-92 (Alaska 1979) (no legislative intent to treat wrongful death action different from other common law tort actions, thus limitations statute tolled for minors); Gaudette v. Webb, 362 Mass. 60, 284 N.E.2d 222, 229-30 (1972) (declaring existence of common-law wrongful death action and tolling limitations provision for minors). See also Restatement (Second) of Torts § 925 comment k (1979) (noting trend to "allow ameliorating common-law principles to apply" to wrongful death actions).
[11] See, e.g., Clifton v. Southern Pacific Transp. Co., 709 S.W.2d 636, 640 (Tex.1986) (gross negligence standard of Burk Royalty applied to wrongful death action); Yowell v. Piper Aircraft Corp., 703 S.W.2d 630, 632-33 (Tex.1986) (loss of inheritance damages recoverable in wrongful death action); Sanchez v. Schindler, 651 S.W.2d 249, 252-54 (Tex.1983) (damages for loss of society and mental anguish recoverable). See generally Tex.Civ.Prac. & Rem.Code Ann. §§ 71.001-011 (Vernon 1986 and 1989 Supp.) (extensive annotations).
[12] The majority dismisses the problem of a conflict with the constitutional right to exemplary damages in a wrongful death action on the grounds that no such damages are allowed to a parent for the death of a child. A similar argument in Hanks was found unpersuasive:
It is true that in the case before us the question of taking property in violation of the Constitution is not in issue, but the validity of the charter section may be raised, and, if void for any reason, it cannot be enforced in this case.
121 Tex. at 208-09, 48 S.W.2d at 947.
[13] One commentator has pointed out that Baker v. Bolton was not extensively argued, that the reported opinion is very brief and that the controversial rule was "laid down without either sustaining reasoning or supporting authority." S. Speiser, Recovery for Wrongful Death 2d § 1:2 (1975); see also Smedley, Wrongful DeathBases of the Common Law Rule, 13 Vand.L.Rev. 605 (1960) (concluding the case was wrongly decided as well as overbroad). Even Dean Prosser has condemned the trial judge in Baker v. Bolton, stating that Lord Ellenborough's "forte was never common sense." W. Prosser, Law of Torts § 127 (4th ed. 1971).
[14] This rule never even made it as far as Scotland; that country recognized a common-law action for wrongful death. Moragne, supra, 398 U.S. at 398 n. 13, 90 S.Ct. at 1786 n. 13.
[15] The Carey case was subsequently overruled by the Massachusetts Supreme Court in Gaudette v. Webb, 362 Mass. 60, 284 N.E.2d 222, 229 (1972).
[16] The common-law prohibition against maintaining an action for wrongful death has been universally denounced by commentators as having no logical or historical basis and as unfairly differentiating between wrongful conduct resulting in mere injury and that resulting in death. See, e.g., F. Pollock, Law of Torts 55 (Landon ed. 1951) (terming rule "barbarous"); Smedley, Wrongful DeathBases of the Common Law Rules, 13 Vand.L.Rev. 605 (1960) (rule has outlived its usefulness); Holdsworth, The Origin Of the Rule in Baker v. Bolton, 12 Law Q.Rev. 431, 437 (1916) (rule cannot be justified on precedential or technical grounds); F. Tiffany, Death by Wrongful Act § 12 (2d ed. 1913) ("[n]o satisfactory reason for the rule has ever been suggested"); P. Keeton, Prosser and Keeton on Torts § 125 (5th ed. 1984) (criticizing rule on basis that "it was cheaper to kill a person than to injure him").
[17] The compelling logic of Moragne has given rise to state court cases that recognize in some manner a common law action for wrongful death. See, e.g., Haakanson v. Wakefield Seafoods, Inc., 600 P.2d 1087, 1092, n. 11 (Alaska 1979); Gaudette v. Webb, 362 Mass. 60, 284 N.E.2d 222, 229 (1972); see also Restatement (Second) of Torts § 925 comment k (1979).
[18] Accord Pound, Comments on Recent Important Admiralty Cases, 13 NACCA L.J. 188-89 (1954) ("[t]oday we should be thinking of the death statutes as part of the general law"); Panama Railroad Co. v. Rock, 266 U.S. 209, 216, 45 S. Ct. 58, 60, 69 L. Ed. 250 (1924) (Holmes, J., dissenting) (pervasive legislation indicates no public policy bar to common-law cause of action for wrongful death).
[19] We have not been asked by the Fifth Circuit to answer in this case the question of whether the statute of limitations for wrongful death, interpreted to bar application of the discovery rule, conflicts with our state constitutional due process provision, article I, section 19 of the Texas Constitution. This court in Nelson v. Krusen, while recognizing that the due process and "open courts" provision are not coterminous, specifically left that question unanswered. Nelson, 678 S.W.2d at 921. Another unexplored question is whether the legislative distinction between the quick and the dead passes muster under article I, section 3 of the Texas Constitution, our state guarantee of equal protection, or the federal equivalent, U.S. Const. amend. XIV, § 1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1736130/ | 782 S.W.2d 246 (1989)
Billy Ray BERRY, et ux., Appellants,
v.
TEXAS FARM BUREAU MUTUAL INSURANCE COMPANY, et al.
No. 10-88-146-CV.
Court of Appeals of Texas, Waco.
October 31, 1989.
Rehearing Denied December 21, 1989.
Michael Thomas, Martin & Thomas, Mexia, for appellants.
John W. Fulbright, Fulbright, Winniford, Bice & Marable, Waco, for appellees.
OPINION
THOMAS, Chief Justice.
This is an appeal from summary judgments in favor of two insurance companies in a suit for uninsured motorist benefits under four separate policies. Three of the policies were issued by Texas Farm Bureau Mutual Insurance Company and one by National County Mutual Insurance Company. Billy and Betty Berry, who were insureds in each policy, sued Texas Farm Bureau and National County for uninsured motorist benefits after they were injured by an uninsured motorist while occupying a 1981 Chevrolet Monte Carlo. The vehicle was jointly owned by the Berrys, but only insured under National County's policy.
Texas Farm Bureau was granted a summary judgment on the ground that its policies excluded any recovery for bodily injury sustained by an insured while occupying an owned but unscheduled vehicle. National County's summary judgment was based on the ground that the Chevrolet Monte Carlo was not insured for uninsured motorist coverage under its policy because Betty Berry, the named insured, had rejected such coverage on the original policy and was suing on a renewal policy.
Two questions are presented. First, was the exclusion relied on by Texas Farm Bureau an invalid restriction of uninsured motorist coverage mandated by article 5.06-1 of the Insurance Code? See TEX.INS. CODE ANN. art. 5.06-1(1) (Vernon 1981). Second, was National County's policy a "renewal policy" within the meaning of article 5.06-1(1)? Both questions being answered in favor of the insurers, the summary judgments will be affirmed.
VALIDITY OF EXCLUSION
Texas Farm Bureau's three policies contained an exclusion which barred recovery of uninsured motorist benefits by an insured who sustained bodily injury while occupying an owned but uninsured vehicle. The Berrys contend the exclusion cannot be enforced because it restricts the uninsured motorist coverage mandated by article *247 5.06-1. They rely on the dicta[1] in Westchester Fire Insurance Company v. Tucker, 512 S.W.2d 679, 685, 686 (Tex.1974) (on rehearing), and the decision in Stephens v. State Farm Mutual Automobile Ins. Co., 508 F.2d 1363, 1368 (5th Cir.1975), in which the Fifth Circuit Court of Appeals held that "exclusionary clauses are invalid restrictions on coverage when they excuse the policy for which a premium has been paid from providing the minimum coverage required by the Texas Uninsured Motorist Statute."
Citing the dicta in Tucker as the rationale for its holding, the Texarkana Court of Civil Appeals also held that the exclusion was an unauthorized limitation of the personal-injury-protection coverage required by article 5.06-3 of the Insurance Code. Western Alliance Ins. Co. v. Dennis, 529 S.W.2d 838, 840 (Tex.Civ.App. Texarkana 1975). However, in Holyfield v. Members Mutual Insurance Company, 572 S.W.2d 672, 673 (Tex.1978), the Texas Supreme Court expressed its disapproval of the decision in Western Alliance "and its construction of the Texas Insurance Code and its interpretation of Westchester Fire Insurance Co. v. Tucker."
Since Holyfield, Texas appellate courts have consistently upheld the exclusion in suits involving uninsured motorist coverage. See Beaupre v. Standard Fire Ins. Co., 736 S.W.2d 237, 239 (Tex.App.Corpus Christi 1987, writ denied); Broach v. Members Insurance Company, 647 S.W.2d 374 (Tex.App.Corpus Christi 1983, no writ); Equitable General Ins. Co. v. Williams, 620 S.W.2d 608, 611 (Tex.Civ. App.Dallas 1981, writ ref'd n.r.e.). These decisions, which this court will follow, have resolved the issue against the Berrys. Thus, Texas Farm Bureau was entitled to a summary judgment based on the exclusion. See id.
NATIONAL COUNTY'S POLICY
Billy and Betty Berry were injured on November 26, 1986, when the 1981 Chevrolet Monte Carlo they were occupying was struck by an uninsured motorist. They were then insured under a National County policy in which the Monte Carlo was the only insured vehicle. According to the declarations page of the policy, the Monte Carlo was not insured for uninsured or underinsured motorist coverage.
Article 5.06-1(1) provides in part:
The [uninsured and underinsured motorist] coverages required under this Article shall not be applicable where any insured named in the policy shall reject the coverage in writing; provided that unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer or by an affiliated insurer.
TEX.INS.CODE ANN. art. 5.06-1(1) (Vernon 1981) (emphasis added). When the legislature enacted this portion of the statute in 1967, it did so with the knowledge of prior court decisions relating to the renewal or extension of insurance contracts. See State v. Anderson, 119 Tex. 110, 26 S.W.2d 174, 178 (Tex.Comm'n App.1930, opinion adopted).
Since 1950, and at the time the legislature enacted article 5.06-1, the law relating to the renewal of insurance contracts was as follows:
It is the general rule that a renewal of a policy constitutes a separate and distinct contract for the period of time covered by the renewal, except where the provisions of the extension certificate show that the purpose and intention of the parties was not to make a new contract but was to continue the original contract in force.... And "such limitation must be found in clear and unambiguous *248 terms within the four corners of the certificate."
Great American Indemnity Co. v. State, 229 S.W.2d 850, 853 (Tex.Civ.App.Austin 1950, writ ref'd) (emphasis added). This rule comports with the accepted definitions of "renew" which, among others, include: "to begin again," "to recommence," "to resume," "to reestablish," "to recreate," and "to replace." BLACK'S LAW DICTIONARY 1165 (5th ed. 1979). These definitions envision the creation of something new with a nexus to the old. Thus, unless the parties express in "clear and unambiguous terms" in the renewal document that they do not intend to make a new contract, the "renewal" constitutes a "beginning again," a "recommencing," a "resuming," a "reestablishing," a "recreating," or a "replacing" of the old, pre-existing contract with the new contract between the parties for the term stated. See id.
The question is whether the policy in effect on the date of the accident was a "renewal policy," as that term is used in article 5.06-1(1). This involves the determination of legislative intent. One must presume the legislature knew when it selected the term "renewal policy" that a new, separate and distinct contract is created between insurer and insured unless they clearly and unambiguously reflect in the renewal document that they do not intend such a result. See Great American Indemnity Co., 229 S.W.2d at 853.
Did the legislature intend to include these new, separate and distinct contracts within the term "renewal policy" or did it intend to include within the term only those policies which extend the initial or original policy between the parties? Stated differently, was the legislature's intent to require a written rejection of uninsured motorist coverage on every new, separate and distinct contract between the parties, although each successive policy is connected in an unbroken chain of coverage back to the original or initial policy on which uninsured motorist coverage was rejected?
Betty Berry was the named insured in an unbroken chain of automobile liability coverage under National County policies dating back to November 19, 1984. She was originally issued policy ATJ107469, effective November 19, 1984, to November 19, 1985, after rejecting in writing uninsured motorist coverage in connection with its issuance.
On October 3, 1985, National County furnished Betty Berry an "Automobile Insurance Renewal Notice," informing her that policy ATJ107469 would expire on November 19. She signed this form on November 19 in three places: immediately below a printed statement requesting the renewal of her coverage; in a portion of the form rejecting uninsured motorist coverage; and in a portion of the form rejecting underinsured motorist coverage. Based on this request, National County issued her policy ATJ127286 with a term from November 19, 1985, to November 19, 1986.
National County also furnished Betty Berry an "Automobile Insurance Renewal Notice," dated November 10, 1986, informing her that policy ATJ127286 would expire on November 19. Although the record does not reflect that she ever signed this form, National County issued her policy KMA020511, covering November 19, 1986, to November 19, 1987. The Berrys accepted the policy and paid the premium to insure the 1981 Chevrolet Monte Carlo for the policy term. This was the policy in effect when the accident occurred.
The Berrys contend that a material fact issue existed on whether policy KMA020511, which was in effect when the accident occurred, was a renewal of the previous policy ATJ127286, and whether policy ATJ127286 was a renewal of the original policy, ATJ107469. They recognize that there was no lapse in coverage between the issuance of the initial policy and the policy in effect on the date of the accident. However, the Berrys claim that each policy issued after the initial policy was an original, not a renewal policy, because each had a new policy number and was complete within itself. Furthermore, they point out that the declaration page of the policy in effect on the date of the accident states that it is the "ORIGINAL POLICY DECLARATIONS."
*249 Policy KMA020511, the contract sued on, does not reflect in "clear and unambiguous terms" that National County and Betty Berry did not intend to create a new contract for the period November 19, 1986, to November 19, 1987. Thus, a new contract was created between them for the term stated. See Great American Indemnity Co., 229 S.W.2d at 853. That does not end the inquiry.
The pivotal question is whether the legislature intended their new contract to be included in the term "renewal policy" as used in article 5.06-1. If so, then National County was not obligated to provide uninsured motorist coverage under policy KMA020511 because Betty Berry had rejected such coverage "in connection with a policy previously issued to [her] by the same insurer." See TEX.INS.CODE ANN. art. 5.06-1(1) (Vernon 1981). Considering the rule in Great American Indemnity Co., which existed when the legislature enacted article 5.06-1 in 1967, and the accepted definitions of "renew," the legislature intended the term "renewal policy" to include new contracts that "begin again," "recommence," "resume," "reestablish," "recreate," and "replace" a preceding policy without a lapse of coverage.
Accordingly, National County was not obligated to provide uninsured motorist coverage in policy KMA020511, the policy sued on, because Betty Berry had rejected such coverage in writing in connection with the issuance of the initial policy, ATJ107469. National County was entitled to a judgment as a matter of law because the 1981 Chevrolet Monte Carlo was not insured for uninsured motorist coverage.
Both points of error are overruled. The summary judgments are affirmed.
NOTES
[1] The troublesome dicta: "As stated in our original opinion, we have concluded that the policy exclusion of injuries sustained by an insured while occupying an owned but unscheduled vehicle is ineffectual to the extent that it deprives a person of coverage required by Article 5.06-1 of the Insurance Code." Westchester Fire Insurance Company v. Tucker, 512 S.W.2d 679, 686 (Tex.1974) (on rehearing). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2505318/ | 121 F. Supp. 2d 498 (2000)
Anthony D. LUTZ, Janet Cope, Donna M. Courain, Shareon S. Montague, Cara A.L. Behrens, Wendell L. Choo, and all others similarly situated. Plaintiffs,
v.
INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, Defendant.
No. C.A. 00-148-A.
United States District Court, E.D. Virginia, Alexandria Division.
November 22, 2000.
*499 Raymond J. LaJeunesse, Jr., c/o National Right to Work, Legal Defense Foundation, Inc., Springfield, VA, for Plaintiffs.
Susan Rebbeca Podolsky, Jenner & Block, Washington, DC, for Defendant.
MEMORANDUM OPINION
ELLIS, District Judge.
This is a class action brought against the International Association of Machinists and Aerospace Workers ("IAM") by airline employees who are nonunion members but who are nonetheless represented by the IAM for collective bargaining purposes, as required by the Railway Labor Act ("RLA").[1] These employees, as permitted by law,[2] object to paying the union any fees or dues that are unrelated to the costs of collective bargaining.[3] At issue on the parties' cross-motions for summary judgment is whether the IAM, consistent with the RLA and the First Amendment, may refuse to allow nonmembers of the union to file a continuing objection to the payment of union dues unrelated to the costs *500 of collective bargaining and require them instead to file an annual objection.
I
The material facts are not disputed. The named plaintiffs are all employees of United Airlines who, although not members of the union, are nonetheless represented by the IAM for collective bargaining purposes under the RLA. They represent a certified class of plaintiffs that includes all nonmembers of the IAM employed by carriers within the meaning of Section 1 or Section 201 of the RLA, 45 U.S.C. §§ 151, 181, who are subject to collective bargaining agreements under the RLA that require the nonmembers to pay dues or fees to the IAM as a condition of employment. See Lutz v. IAM, 196 F.R.D. 447, 2000 WL 1528292 (E.D.Va. Oct.12, 2000) ("Lutz I").
The IAM is the exclusive bargaining representative of approximately 141,500 employees of various railway and airline carriers covered by the RLA. Of this number, approximately 140,000 are members of the IAM, while 1,039 are nonmembers. IAM members pay dues to the union in an amount calculated to defray the costs of collective bargaining plus an additional amount to fund union expressive or political activities. Nonmembers, pursuant to law and various collective bargaining agreements,[4] must pay the IAM a fee equal to the full amount of dues paid by members, unless a nonmember objects, in which event the objecting nonmember need only pay the IAM a fee that covers the nonmember's pro-rata share of the collective bargaining costs. An objecting nonmember is not required to pay the IAM the fee surcharge, namely the difference between the full fee or dues amount and the nonmember's pro-rata share of collective bargaining costs. Nonmembers who wish to object to paying the fee surcharge must comply with the IAM's established procedures for this purpose. Specifically, objecting nonmembers must submit their objections annually during the month of November. Continuing objections are not permitted. Thus, if a nonmember submits an objection in November, he or she will be required to pay only a fee to cover the costs of collective bargaining, but not the fee surcharge. And, this will continue to be true for subsequent years provided the nonmember submits a timely objection each subsequent November. Failure to do so will result in the objection lapsing and the nonmember being assessed the full fee amount, including the fee surcharge.
The central feature of the IAM's objection procedure is the requirement of an annual submission asserting the objection. In this regard, the IAM publishes annually a "Notice to Employees Subject to Union Security Clauses" ("Notice"). This is a quarterly publication distributed via mail and the IAM's website to all employees the IAM represents. The Notice explains the procedure nonmembers must follow to object to the collection of the fee surcharge and thereby pay a reduced union fee in the next calendar year. In addition, the Notice informs the employees of the amount of the fee surcharge. This amount varies from year to year.
*501 In June 1999, all of the named plaintiffs submitted timely objections to the payment of the fee surcharge. All but one of the named plaintiffs stated in their submissions to the IAM that their objections were continuing in nature and thus applicable to all subsequent years. The IAM rejected these continuing objections because they were contrary to the IAM's policy requiring annual objections from nonmembers who did not wish to pay the fee surcharge. Thus, these named plaintiffs were required to pay the fee surcharge in November 2000. The remaining named plaintiff filed only a standard objection that did not include notice that it was a continuing objection. In November 1999, however, when this named plaintiff filed her next annual objection, she included a statement that her objection was continuing in nature and applicable to all subsequent years. This attempt to assert a continuing objection met the same fate as did the continuing objections submitted by the other named plaintiffs: The IAM rejected it as contrary to the union's policy.
In August 2000, plaintiffs filed a motion to have a class certified of "all nonmembers of Defendant IAM, including new employees, employed by carriers within the meaning of Section 1 or Section 201 of the RLA, 45 U.S.C. §§ 151, 181, who are subject to collective bargaining agreements under the RLA that require nonmembers to pay dues or fees to the IAM as a condition of employment." In October 2000, the proposed class was certified. See Lutz I. The class includes all non-IAM members who are represented by the IAM under the RLA. This group numbers approximately 1,039. Of this number, approximately 315 nonmembers have filed objections to the payment of the fee surcharge during the year 2000.[5] Of that number, roughly 26 nonmembers labeled their objections as continuing and applicable to subsequent years.
At issue now are the parties' cross-motions for summary judgment.[6]
II
This fee surcharge objection dispute is only the latest skirmish in the longstanding struggle between the forces represented by the parties at bar: organized labor and the right-to-work movement.[7] Given this, a brief summary of the history of the nonmember fee surcharge litigation is a useful preface to the issues presented. This history may be said to begin with the 1934 amendments to the RLA which, inter alia, mandated that the union selected by a majority of the employees in the bargaining unit serve as the exclusive bargaining agent of all the unit employees, including those who elect not to join the union. See 45 U.S.C. § 152, Ninth. This grant of exclusive representative status to the unions gave rise to a concern that unions deal fairly with nonunion members, as well as members. To address this concern and ensure that unions fairly and adequately represent all unit employees, including non-union members, the Supreme Court imposed on unions a judicially created duty of fair representation ("DFR"). See Steele v. Louisville & Nashville R.R., 323 U.S. 192, 65 S. Ct. 226, 89 L. Ed. 173 (1944).[8] Concern about the nonmembers *502 was not the only problem created by the RLA's grant to the union of exclusive representative status. The requirement that the union, as the exclusive bargaining representative, represent all employees in the bargaining unit, including non-union members, coupled with the fact that non-union members paid no union dues, gave rise to a "free-rider" problem. Specifically, unions were required to negotiate on behalf of nonmembers, as well as members, who paid no dues, receiving this benefit free of charge. In this respect, nonmembers were free-riders. To remedy this, Congress, in 1951, enacted Section 2, Eleventh of the RLA, which confers on unions the authority to enter into collective bargaining agreements requiring all employees in the represented bargaining units either to join the union or, alternatively, to pay fees equal to dues. While this provision solved the free-rider problem, it spawned a new problem of constitutional dimensions: A serious First Amendment concern attached to the fact that unions could now use, for political purposes with which nonmembers disagreed, the portion of the non-union members' fees that exceeded collective bargaining costs. The Supreme Court then addressed this concern, ruling in a series of cases that the RLA does not permit unions to use a nonmember's fees for political causes if the employee affirmatively makes his objection known. See, e.g., Street, 367 U.S. at 774, 81 S. Ct. 1784.
Following these decisions, litigation between these factions has focused on aspects of the objection procedure, including, for example, which expenses should be included in the fee surcharge,[9] the form and substance of the notice given to nonmembers,[10] the procedures by which the fee surcharge was collected,[11] and the specificity with which the objection must be made.[12] Particularly pertinent here is that four courts have addressed the lawfulness of a union's annual objection requirement. Three courtsthe D.C. Circuit, the Sixth Circuit, and a Maryland district court upheld the annual objection requirement under the DFR standard.[13] The fourth court, the Fifth Circuit, reached the contrary result, finding first that the applicable standard is found in the First Amendment, not the DFR, and then that the annual objection requirement fails under that standard. See Shea v. IAM, 154 F.3d 508 (5th Cir.1998). Significantly, Shea involved not only the precise question here in issue, but also the same union.[14] Thus, a threshold question is whether the IAM is collaterally estopped by Shea from relitigating the same issue here.
III
The doctrine of collateral estoppel, or issue preclusion, derives from the principle that "later courts should honor the first actual decision of a matter that has been actually litigated." Burlington N.R.R. Co. v. Hyundai Merchant Marine Co., 63 F.3d 1227, 1231 (3d Cir.1995) (quoting Charles A. Wright et al., Federal Practice & Procedure § 4416 (1981)). Collateral estoppel relieves the parties of the cost of relitigating questions of fact or law that are identical *503 to issues already decided. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S. Ct. 645, 58 L. Ed. 2d 552 (1979); Allen v. McCurry, 449 U.S. 90, 94, 101 S. Ct. 411, 66 L. Ed. 2d 308 (1980). Furthermore, the doctrine conserves valuable judicial resources and avoids inconsistent rulings. See Parklane Hosiery, 439 U.S. at 326, 99 S. Ct. 645. Thus, plaintiffs here invoke federal estoppel rules[15] to use the Shea decision as a bar to the relitigation of the constitutionality of the annual objection procedurethe issue the IAM unsuccessfully litigated in the Fifth Circuit.
Collateral estoppel analysis begins with the application of the five-prong test established in Polk v. Montgomery County, 782 F.2d 1196 (4th Cir.1986). This test requires the party seeking estoppel to establish:
(1) The party against whom the estoppel is asserted [was] ... a party or in privity with the party in the prior action;
(2) There [was] ... a final determination of the merits of the issues to be collaterally estopped;
(3) The issues decided in the prior action [were] ... necessary, material, and essential to the prior case;
(4) The party against whom the estoppel is to be applied ... had a full and fair opportunity to litigate the issues;
(5) The issues in the prior litigation [are] ... identical to the issues sought to be estopped.
Polk, 782 F.2d at 1201.
The parties do not dispute that these factors have been met. First, the IAM was the defendant in the Shea action. Second, the Fifth Circuit's decision is final as the IAM did not appeal the matter to the Supreme Court. Third, the annual objection determination in Shea was necessary and essential to the resolution of that matter as it was the basis of the lawsuit. Fourth, there is no substantial dispute that the IAM had a full and fair opportunity to litigate the matters. Finally, the issue addressed in Sheathat is, the validity of the IAM's annual objection requirement is identical to the issue presented here. Accordingly, plaintiffs satisfy the Polk five-prong test for the application of collateral estoppel.
But the analysis does not end here. It is important to note that the plaintiffs here invoke offensive, non-mutual collateral estoppel. This form of estoppel occurs when a "plaintiff seeks to foreclose a defendant from relitigating an issue the defendant has previously litigated unsuccessfully in another action against the same or a different party." United States v. Mendoza, 464 U.S. 154, 159, 104 S. Ct. 568, 78 L. Ed. 2d 379 n.4 (1984).[16] Offensive collateral estoppel does not automatically result when the Polk test is met; rather, the Supreme Court and the Fourth Circuit have stated that the doctrine should be used conservatively and should not be applied when its application would be unfair. See Parklane Hosiery, 439 U.S. at 331, 99 S. Ct. 645; Sales v. Grant, 158 F.3d 768, 780 (4th Cir.1998). Offensive collateral estoppel may result in unfairness to a defendant because its application creates an incentive for individuals to refrain from joining the initial action. See Parklane Hosiery, 439 U.S. at 331, 99 S. Ct. 645. This point is illustrated by the familiar example of the accident with multiple victims. *504 In this setting, claimants are not estopped from suing a defendant even were defendant to prevail against the first claims. Thus, they have an incentive to wait until the first victory by a claimant and then sue, claiming estoppel. See id. at 331 n. 14, 99 S. Ct. 645. Because offensive use of collateral estoppel may often "increase rather than decrease the total amount of litigation" and may also result in inconsistent rulings, "the preferable approach for dealing with [offensive collateral estoppel] in federal courts is not to preclude [its] use ..., but to grant trial courts broad discretion to determine when it should be applied." Id. at 330, 99 S. Ct. 645 (emphasis added). And, the exercise of this discretion should be guided by a consideration of the following factors: (i) whether the plaintiff could easily have joined in the first matter, (ii) whether the defendant had the incentive to litigate vigorously the first action, (iii) whether the judgment relied on is inconsistent with one or more previous judgments, and (iv) whether additional procedural opportunities are available to the defendant in the subsequent action. See id. at 330-32, 99 S. Ct. 645; C.B. Marchant Co., Inc. v. Eastern Foods, Inc., 756 F.2d 317, 319 (4th Cir.1985). In general, "[t]he appropriateness of collateral estoppel depends upon the particular realities in each case." Chicago Truck Drivers v. Century Motor Freight, Inc., 125 F.3d 526, 532 (7th Cir. 1997).
These principles, applied here, point persuasively to the conclusion that Shea should not be given collateral estoppel effect; to conclude otherwise raises concerns of fairness and consistency. This is evident from the following: First, the legal issue presented is quite unsettled; there is a conflict among the circuits on the validity of the annual objection requirement, and the Fourth Circuit has yet to address the issue. And, importantly, the annual objection procedure "involves a unique determination of law, and one of general application." Chicago Truck Drivers, 125 F.3d at 532. Given this, the application of collateral estoppel in this context may lead to anomalous results. Specifically, were Shea to be given collateral estoppel effect, only the IAM, but not other unions operating within this circuit, would be precluded from requiring annual objections. The Seventh Circuit, in similar circumstances, refused to apply collateral estoppel, noting that "though we would be free in a future case to determine that [the law] is valid ..., that determination would apply to everyone but [the defendant].... [S]uch inconsistency in treatment is a concern." Id. at 532. Collateral estoppel should not apply here for the same reasons.
Plaintiffs argue that inconsistency concerns are irrelevant because the IAM was not a party to the actions upholding the annual objection procedure, and, therefore, there are no inconsistent rulings against the IAM. This argument is unpersuasive; it is not dispositive that the application of collateral estoppel here would not produce inconsistent rulings as to the IAM. The concern extends to all unions covered by the RLA. As noted, were collateral estoppel to apply here, unions in this circuit might operate under different rules, as only the IAM would be bound by Shea, and the Fourth Circuit may reach a different result as to other unions. In short, the application of collateral estoppel in this case would "substantially thwart the development of important questions of law by freezing the first final decision rendered on a particular legal issue." Mendoza, 464 U.S. at 159, 104 S. Ct. 568. In sum, substantial concerns of fairness and the risk of inconsistent rulings counsel against exercising the discretionary authority to apply offensive, collateral estoppel in this case.
IV
The threshold merits determination is whether the annual objection procedure is subject to scrutiny under the First Amendment or the DFR. This is not an inconsequential determination as scrutiny under the First Amendment is significantly more *505 rigorous and less deferential than DFR review.[17]
Analysis of a First Amendment claim properly begins with a determination whether state action is implicated. Put in terms of this case, the threshold question is whether state action can be found in the IAM's imposition of an annual objection requirement. The answer to this question lies in the recognition that state action, i.e., the RLA, is the source of the IAM's authority to impose a fee on nonmembers. This form of state action was found to support a First Amendment right to object to the fee surcharge. See Railway Employees Dep't v. Hanson, 351 U.S. 225, 232, 76 S. Ct. 714, 100 L. Ed. 1112 (1956). As the Shea court put it, "there is sufficient state action to implicate the First Amendment ... because ... federal law is the authority through which private rights are lost." Shea, 154 F.3d at 513 n. 2; see also Hanson, 351 U.S. at 232, 76 S. Ct. 714 ("If private rights are being invaded, it is by force of an agreement made pursuant to federal law."). So, just as it is clear that state action warrants a First Amendment right to object to the fee surcharge, so too does state action warrant First Amendment scrutiny of the procedures for asserting the objection. This is so because these procedures have the potential for abridging the First Amendment objection right. As the Supreme Court in Abood v. Detroit Bd. of Educ., 431 U.S. 209, 97 S. Ct. 1782, 52 L. Ed. 2d 261 (1977) recognized, "the Union should not be permitted to exact a service fee from nonmembers without first establishing a procedure which will avoid the risk that their funds will be used, even temporarily, to finance ideological activities unrelated to collective bargaining." Id. at 244, 97 S. Ct. 1782 (Stevens, J. concurring). Thus, First Amendment scrutiny applies because the substantive right and the procedures associated with that right may "effectively charge[] the employees for activities that are outside the scope of statutory authorization." Ellis v. Bhd. of Ry., Airline, and Steamship Clerks, 466 U.S. 435, 444, 104 S. Ct. 1883, 80 L. Ed. 2d 428 (1984).[18]
To be sure, unions are typically considered private entities.[19] Yet, contrary to the IAM's contention, the result reached here does not convert the IAM to a state actor for all purposes. Much union activity remains private and does not implicate state action or the First Amendment. As the Fourth Circuit has put it, the "mere fact of regulation of some aspects of the union's duties under the RLA does not give rise to state action [over all aspects of the union's activities]."[20] IAM state action exists only where the union procedure in issue derives from the statutory grant of power to the union to compel nonmembers to contribute fees subject to the nonmembers' *506 right to object to the fee surcharge. The union remains free to determine, for example, the requirements for membership in the union or whether to "support ... a local political candidate or the design for the union's softball team uniforms." Kidwell v. Transportation Communications Int'l Union, 946 F.2d 283, 298 (4th Cir.1991).
The remaining question, then, is the appropriate level of First Amendment scrutiny applicable to the annual objection procedure. Neither the Supreme Court nor any lower court has specifically addressed whether the union's annual objection procedures are subject to strict scrutiny,[21] time-place-manner analysis,[22] or some intermediate level of scrutiny.[23] Instead, the best guidance available is the Supreme Court's statement in Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S. Ct. 1066, 89 L. Ed. 2d 232 (1986), that the "First Amendment requires that the [fee surcharge objection] procedure be carefully tailored to minimize the infringement" on the nonmembers' constitutional rights. Id. at 303, 106 S. Ct. 1066 (emphasis added). Because the collection of fees from nonmembers impacts First Amendment interests, the Supreme Court has further stated that "the [union's] objective must be to devise a way of preventing compulsory subsidization of ideological activity by employees who object thereto without restricting [its] ability to require every employee to contribute to the cost of collective bargaining activities." Abood, 431 U.S. at 237, 97 S. Ct. 1782.
The IAM annual objection requirement fails to pass muster under either Hudson's "carefully tailored" standard, or indeed under any of the three traditional standards. This is so because the annual objection requirement imposes a burden on the First Amendment rights of nonmembers, and, yet, the IAM has not offered any legitimate reason for such a requirement.[24] Instead, the IAM has offered only that the requirement is rational because the union determines anew, annually, the amount of the fee surcharge, and, therefore, nonmembers should be required to rethink their objection to the payment of the fee surcharge on an annual basis. This justification does not support the denial of a continuing objection because it is based not on any legitimate need of the IAM, but rather on a supposed benefit to objecting nonmembers. As the union conceded at oral argument, what is really at stake here is whether the union can collect more money as a benefit of the decision-maker's inertia. In other words, it is the IAM's hope that objecting nonmembers will either forget or overlook the annual objection requirement, or will reconsider their objection on the merits, thereby enabling the IAM to collect greater funds from nonmembers. This hope is no justification for the union's imposition of an objection procedure that burdens First Amendment rights.
The IAM's contrary arguments are unpersuasive. Thus, the IAM's reliance on cases upholding the imposition of 30-day periods during which objections to fees must be made is misplaced. See Andrews v. Education Assoc. of Cheshire, 829 F.2d 335, 340 (2d Cir.1987); Kidwell, 731 F.Supp. at 204. At best, these cases support the proposition that it is reasonable for a union to require all objections to be filed within an administratively convenient period, not that an annual objection requirement is justifiable. Indeed, if First Amendment scrutiny were applied *507 to the 30-day period, the requirement would likely survive intermediate or time-place-manner analysis, as the union can assert a legitimate, content-neutral interest to justify the procedure.[25]See, e.g., Ward v. Rock Against Racism, 491 U.S. 781, 798, 109 S. Ct. 2746, 105 L. Ed. 2d 661 (1989) (time, place, or manner regulations must be narrowly tailored to serve the government's legitimate, content-neutral interests). No such justification has been offered to support the annual objection requirement, and thus, the requirement fails under any First Amendment standard.
In the course of oral argument, the IAM argued further that the annual objection requirement abridges no First Amendment rights as it is indistinguishable from procedural rules that require those who wish to exercise their right to vote to cast their ballots only on election day, or that require those who seek to file suit in the courtsor to obtain parade permits, for that matterto meet filing deadlines. All of these requirements, however, have constitutionally permissible justifications and are, therefore, distinguishable. These examples, moreover, are inapt; theylike the 30-day-window casesinvolve content-neutral administrative conditions on the exercise of one's constitutional rights, where failure to satisfy those conditions only result in a return to a status quo ante that does not involve an affirmative infringement of First Amendment rights. Here, however, the IAM's refusal to honor continuing objections imposes an unjustifiable barrier for nonmembers seeking to maintain a status quo ante of objecting nonmembership, and instead has, as a default, the unconstitutional exaction of fees. Thus, the proper analogy is not one offered by the IAM; rather, the annual objection procedure is more closely analogous to a governmental pronouncement that a citizen who fails to cast a ballot on election day will be considered to have voted for a previously designated "default" candidate. The law does not permit such an imposition of an unconstitutional default. Similarly, in the case at bar, the failure of a nonmember to file an annual objection should not result in an unconstitutional exaction of fees.[26]
In sum, the annual objection requirement fails First Amendment scrutiny because the requirement is without a valid justification and imposes an undue burden that creates a risk that funds "will be used ... to finance ideological activities unrelated to collective bargaining." Hudson, 475 U.S. at 305, 106 S. Ct. 1066.[27] Accordingly, because the procedure is in violation of the nonmembers' First Amendment rights, summary judgment should be granted in favor of the plaintiffs.
An appropriate order will issue.
NOTES
[1] See 45 U.S.C. §§ 151 et seq.
[2] See Railway Clerks v. Allen, 373 U.S. 113, 83 S. Ct. 1158, 10 L. Ed. 2d 235 (1963).
[3] For clarity, the term "dues" is used to refer to the money union members pay the union, while the term "fees" is used to refer to the money nonmembers pay to the union. And the term "fee surcharge" refers to the difference between the total fee and the portion of that fee that covers the costs of collective bargaining.
[4] Article XXV of the collective bargaining agreement (the "Union Security" provision) between United and the IAM establishes the terms and conditions for the "Passenger Service Employees" craft, of which the named plaintiffs are members. Through this provision, which is essentially a union shop provision, the IAM requires all employees to pay agency fees as a condition of employment. The Union Security provision provides, in pertinent part:
A. Any employee in a classification covered by this Agreement on the effective date of this Article shall become a member of the Union within sixty (60) days after the effective date of this Article and shall be required as a condition of continued employment by the Company to maintain their membership in the Union so long as this Article remains in effect, to the extent of paying an initiation (or reinstatement) fee and monthly membership dues no greater than as hereinafter set.
[5] The number of objecting nonmembers varies annually. Of the 315 objecting nonmembers for calendar year 2000, approximately 167 had also filed timely objections for calendar year 1999.
[6] Summary judgment is appropriate at this stage, for the parties agree that no material facts are disputed. See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Anderson v. Liberty Lobby, 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
[7] The named Plaintiffs are represented by attorneys provided by the National Right to Work Legal Defense Foundation, Inc.
[8] In Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967), the Supreme Court held that a union violates the duty of fair representation when its actions are "arbitrary, discriminatory, or in bad faith." Id. at 190, 87 S. Ct. 903.
[9] See Ellis v. Brotherhood of Ry., Airline, and Steamship Clerks, 466 U.S. 435, 104 S. Ct. 1883, 80 L. Ed. 2d 428 (1984).
[10] See Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S. Ct. 1066, 89 L. Ed. 2d 232 (1986); Abood v. Detroit Bd. of Educ., 431 U.S. 209, 97 S. Ct. 1782, 52 L. Ed. 2d 261 (1977)
[11] See id.
[12] See Railway Clerks v. Allen, 373 U.S. 113, 118-19, 83 S. Ct. 1158, 10 L. Ed. 2d 235 (1963).
[13] See Abrams v. Communications Workers of Am., 59 F.3d 1373 (D.C.Cir.1995); Tierney v. City of Toledo, 824 F.2d 1497 (6th Cir.1987); Kidwell v. Transportation Communications Int'l Union, 731 F. Supp. 192 (D.Md.1990).
[14] Shea was not a class action, and for reasons that do not appear in the record, the IAM elected not to appeal the Fifth Circuit's decision.
[15] Federal collateral estoppel rules apply because this is a federal question case and the issue is whether to give preclusive effect to a prior federal judgment. See Burlington, 63 F.3d at 1231; compare McCurry, 449 U.S. at 95-96, 101 S. Ct. 411 (holding that federal courts should apply collateral estoppel as it would be applied in the state where the initial state judgment was rendered).
[16] It is non-mutual estoppel because the plaintiffs were not parties to the Shea decision. The absence of mutuality is no bar to an estoppel, as the Supreme Court eliminated the mutuality requirement in the application of collateral estoppel rules. See McCurry, 449 U.S. at 94-95, 101 S. Ct. 411.
[17] To succeed on its claim of a violation of the DFR, plaintiffs must show that the requirement is so far outside a "wide range of reasonableness ... as to be irrational." Air Line Pilots Ass'n Int'l v. O'Neill, 499 U.S. 65, 67, 111 S. Ct. 1127, 113 L. Ed. 2d 51 (1991) (internal quotation omitted); Vaca v. Sipes, 386 U.S. 171, 191, 87 S. Ct. 903, 17 L. Ed. 2d 842 (1967) (holding that to prevail on DFR claim, one must show requirement is "arbitrary, discriminatory, or in bad faith").
[18] In Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S. Ct. 1066, 89 L. Ed. 2d 232 (1986), the Supreme Court held that procedures affecting the right to object should be "carefully tailored" to (i) minimize the infringement on First Amendment freedoms and (ii) provide nonmembers a fair opportunity to identify and challenge the constitutionality of the governmental action. These procedures go to the "core" of the right to object. See id. at 303, 106 S. Ct. 1066.
[19] See, e.g., Hovan v. United Bhd. of Carpenters and Joiners of Am., 704 F.2d 641, 642 (1st Cir.1983).
[20] Kidwell v. Transportation Communications Int'l Union, 946 F.2d 283, 298 (4th Cir.1991); see also United Steelworkers of Am. v. Sadlowski, 457 U.S. 102, 121 n. 16, 102 S. Ct. 2339, 72 L. Ed. 2d 707 (1982) (holding that "union's decision to adopt an [internal] rule does not involve state action"); Hovan, 704 F.2d at 644 (rejecting employee's claim that "government action follows automatically from the fact that the NLRA vests the union with exclusive authority to bargain with [the employee's] employer").
[21] See Roberts v. U.S. Jaycees, 468 U.S. 609, 104 S. Ct. 3244, 82 L. Ed. 2d 462 (1984).
[22] See Ward v. Rock Against Racism, 491 U.S. 781, 109 S. Ct. 2746, 105 L. Ed. 2d 661 (1989).
[23] See 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 116 S. Ct. 1495, 134 L. Ed. 2d 711 (1996).
[24] Plaintiffs' citation to Tavernor v. Illinois Fed'n of Teachers, 226 F.3d 842, 849 (7th Cir.2000) in support of the burden argument is not squarely on point. Tavernor struck down a procedure for objecting to the amount of the fee surcharge; it did not address whether the annual objection requirement, by itself, was burdensome.
[25] Similarly, an IAM requirement that nonmembers seeking to change the status of a continuing objection do so only within a 30day period would also likely pass First Amendment muster.
[26] The IAM's analogies also ignore the distinction between members and nonmembers. The IAM's examples involve United States citizens members (of sorts) who have agreed to be governed by the laws, procedures, and rules of the United States government. Citizens, i.e., members, have "agreed" to voting dates as well as to lawsuit and parade filing deadlines. By contrast, the nonmembers here have affirmatively chosen, as is their right, not to join the union; they have not agreed to an annual objection procedure. Where constitutional rights are at stake, society should be reluctant to require compliance with arbitrary rules to which individuals have not agreed to be bound.
[27] The IAM also argues that the annual objection requirement is justified because the Supreme Court placed the burden of objecting on the employee. See Street, 367 U.S. 740, 81 S. Ct. 1784. This argument fails because there is an important difference between placing the burden of objecting on an employee and imposing yet a further restriction that makes the burden onerous. An employee's burden to make an affirmative objection may easily be satisfied through submission of a continuing objection. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1379425/ | 799 F. Supp. 1052 (1992)
UNITED STATES of America, in its own right and on Behalf of Torres-Martinez Band of Mission Indians and the Allottees therein, Plaintiffs,
v.
The IMPERIAL IRRIGATION DISTRICT, a Public Irrigation District; and Coachella Valley Water District, a Public Irrigation District, Defendant.
Civ. No. 82-1790-K(M).
United States District Court, S.D. California.
July 17, 1992.
*1053 *1054 *1055 Peter C. Monson, Lauren N. Soll, Attys., Dept. of Justice, Environment and Natural Resources Div., Indian Resources Section, Washington, D.C., Michael E. Quinton, Asst. U.S. Atty., San Diego, Cal., for plaintiffs.
Justin M. McCarthy, Steven B. Abbott, Redwine and Sherrill, Riverside, Cal., for defendant Coachella Valley Water Dist.
Paul D. Engstrand, Gerard Smolin, Jr., Robert C. Hawkins, Jennings, Engstrand, Henrikson, San Diego, Cal., for defendant Imperial Irr. Dist.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
KEEP, Chief Judge.
This matter came before the court for court trial June 9-30, 1992. Plaintiffs are the United States of America and the Torres-Martinez Band of Mission Indians; hereinafter the words "band" or "Torres-Martinez" will refer to both the United States and the Torres-Martinez Band of Mission Indians unless otherwise indicated. They were represented by Peter Monson and Lauren Soll of the U.S. Department of Justice. Defendant Imperial Irrigation District (hereinafter IID) was represented by Paul D. Engstrand and Gerald Smolen, Jr. Defendant Coachella Valley Water District (hereinafter CVWD) was represented by Justin McCarthy and Steven B. Abbott.
Having considered the voluminous body of evidence and the well-prepared arguments of counsel, the court makes the following preliminary observations, findings of fact and conclusions of law.
I. Preliminary Observations
The court wishes to make two preliminary observations. First, the court believes that all counsel in this case deserve formal commendation for their preparation and professionalism. This is a difficult case for a number of reasons and all counsel spent an enormous amount of time mastering the often contradictory and convoluted historical record which is the nucleus of this lawsuit. Also, in a profession where "civility" has become a goal rather than a habit, the courtesy of counsel was remarkable in the face of the tension of a complicated trial with over 2,000 exhibits generated.
*1056 Second, this case illustrates the wisdom of a relatively short statute of limitations. Due to 28 U.S.C. § 2415, which created a special statute of limitations for Indian cases, the damages sought in this case span from 1924 through today and into the future, excluding July 18, 1966, through September 29, 1976.[1]
Because critical acts occurred in the 1920's and in 1949 and 1950, in the factfinding process the court has had to rely on historian witnesses in analyzing "snippets" of history. Key witnesses have died and key exhibits have disappeared during the last 70 years. In the records which have been located, both sides to this lawsuit can find evidence which reasonably supports their different positions, and finding percipient witnesses to explain this evidence is, obviously, impossible. At times notes or file stamps in the same exhibit reasonably can be used by both sides to corroborate such things as their theory of the intent of the President in the 1924 and 1928 land withdrawals, which intent is central to a resolution of this case. Without the excellent assistance of counsel, resolution of this case would have been impossible; with their aid, it is nearly so. So conceding, the court turns to the facts of this case.
II. Jurisdiction, Venue, and a Summary of the Issues Requiring Adjudication
In this action, the United States of America is suing the defendant water districts on its own behalf and on behalf of the Torres-Martinez Band of Mission Indians and their allottees. There is one cause of action, for trespass. The theory of the case is that irrigation water draining from the agricultural fields located in the two water districts flows into the Salton Sea, raising the level of the Sea and causing it to inundate Indian lands. The plaintiffs seek damages for trespass from 1924-1992 excluding July 18, 1966 through September 29, 1976, pursuant to the statute of limitations provided for in 28 U.S.C. § 2415(b) and (g). Also, they seek damages to compensate them for the cost of restoring the soil and future damages for 10 years on the theory that it will take 10 years for the Sea to evaporate. Finally, they seek an injunction against continued inundation.
Defendants offer the affirmative defense of consent. Specifically, they allege that the inundation of the Indian land occurred with the consent of the government pursuant to public land withdrawals in 1924 and 1928. Alternatively, defendants argue that if there was no consent when the public land was withdrawn in 1924 and 1928, there was consent by the government in 1950 when Congress specifically recognized a boundary for the Salton Sea 220 feet below sea level and authorized the Secretary of Interior to purchase Indian lands located within the -220' perimeter.
Federal jurisdiction and venue are proper. This court has jurisdiction because this is a civil action for trespass brought by the United States as plaintiff. 28 U.S.C. § 1345. The complaint seeks declaratory relief as well as monetary damages and an injunction. 28 U.S.C. § 2201. Venue is appropriate because a portion of the subject reservation lands are located in the Southern District of California, both defendants maintain their principal place of business in the State of California, and defendant IID maintains its principal place of business in the Southern District of California. 28 U.S.C. § 1391(b).
III. Background Facts
Preliminarily, the court concedes that counsel and some witnesses are much more *1057 familiar than is the court with the history of the Boulder Canyon Dam Project and the development of the distribution and drainage systems in the Imperial Valley and Coachella Valley, as well as with development of the agricultural economy in those two valleys. The trial briefs and Exhibits 2382 and 2363 contain a thorough discussion of the relevant history. What follows is a brief synopsis of relevant portions of the history which is necessary for an understanding of the issues in this lawsuit.
A. The Salton Sea
The Salton Sea straddles the common boundary of Riverside and Imperial Counties. It is an inland salt water lake lying within the Salton Basin of Southern California. The basin encompasses parts of Riverside, Imperial, and San Diego Counties, as well as part of Baja California. Its low point is 275 feet below sea level. As of late 1990, the sea level was -227.7'[2]; it contained about 6,828,850 acre feet of very salty water and spanned a surface area of approximately 239,750 acres.
The Salton Basin is a closed basin which has no natural outlet to the Pacific Ocean. Water within the basin drains by gravity into the Salton Sea. Water depletion from the Sea is primarily by evaporation as the soil beneath the Sea is composed predominately of clay. During the 400 years prior to 1905, the Sea was essentially dry except for occasional excessive run-off resulting from large storms. Around 1900, when the Sea was at its natural low level, there was salt mining on the edge of the Sea.
From 1905-07 the present Sea was formed when the Colorado River overflowed its banks and water drained into the Salton Basin. In 1906 its highest level of -195' was reached. The court finds the plaintiffs have proven that the Sea would have receded to its pre-flood level by 1923 but for irrigation in the Imperial Valley and the Coachella Valley. That irrigation has caused the level of the Sea to fluctuate, but essentially it has been at its current level of -227.5' or greater since 1924.
The Salton Sea has a high salt content for a number of reasons, chief of which are the following. First, the soil in the area is salty and water which drains through the soil into the Sea carries salt with it. There was a previous lake in the area which deposited salt into the low point of the Salton Sea by the process of drainage and evaporation. Second, salt mining was occurring at the edge of the Sea at the time of the 1905-07 flood. All of the salt being mined was carried into the Salton Sea via the flood waters. Third, the Colorado River water used for irrigation is very salty. Because it contains so much salt, approximately 15% water in excess of a plant's consumptive use must be applied to plants and then carried away as salty drainage water in order to irrigate the plants and leech the soil. Gravity drains this water into the Salton Sea.
B. Torres-Martinez Land Involved in this Lawsuit
The original Torres-Martinez reservation was created in 1876; it consisted of one 640-acre section of land approximately eight miles northwest of the Salton Sea. In 1891, by executive order, the United States reserved additional land for the Torres-Martinez Indians; pursuant to Congressional authority, the Secretary of Interior withdrew additional lands in 1909 for the benefit of the band. The land reserved in 1891 and 1909 was adjacent to the Salton Sea. Many acres were actually inundated with flood water at the time of the withdrawal in 1909. Indeed, all or part of each of the 22 sections of land (over 10,000 acres) reserved in 1909 were covered by water and formed part of the lake bed. All or part of 14 sections of land withdrawn in 1891 were also inundated.
Because the 1891 withdrawal preceded the flood, the parcels withdrawn at that time were not inundated. However, the parcels withdrawn in 1909 were inundated at the time of the withdrawal. The reason this obviously inundated land was withdrawn was based upon a request by the Superintendent of the Martinez Indian School who wrote as follows:
*1058 This land is not worth very much for it is all very salty but it has under it a fine belt of artesian water. And should it be taken up and farmed it would take a large amount of water from the Indians. It seems that everything should be done that is possible to ensure to the Indians a permanent water supply. Most of this land is now covered by the Salton Sea but as it is receding very rapidly it is only a question of time until it will be subject to entry.
Ex. 2007. Hence, it appears to have been believed that the Sea would recede rapidly and that the land reserved would generate a fresh water supply to the Indian land adjacent to the Sea.
Nonetheless, the bulk of the band's land involved in this lawsuit is still inundated by the Salton Sea in whole or in part today. It has been continuously inundated since 1905 due to the development of the agricultural industry in the Imperial Valley and Coachella Valley in the post-flood years. Whereas it was reasonable in 1909 to assume that the Salton Sea would recede by evaporation to pre-flood levels by 1923, this assumption was based upon a belief that the source of water draining into the Sea would remain the same as prior to the flood. The advent of agriculture in the Imperial Valley and the Coachella Valley, with its attendant irrigation, leeching, and drainage significantly changed the inflow into the Sea.
The tribal land involved in this lawsuit was classified as non-agricultural until 1950. This is because the soil is composed of a high percent of clay, which, until farming techniques were improved around 1950, made the soil impractical to farm. Some parcels are still classified as non-irrigable but many are classified as capable of growing field crops (alfalfa, cotton, corn), row crops (carrots), and tree crops (citrus groves). The Indian lands are not within the Coachella Valley Water District; hence, for farming, they are dependent on underground water.
C. The Imperial Valley and IID
By the late 1800's, the Salton Basin was recognized as a natural agricultural area. In particular, Imperial Valley and parts of the Coachella Valley were perceived as having good soil, which soil with water would be conducive to agriculture. Because of the natural slope of the basin, water would naturally drain by gravity to the Salton Sea so landlocked farms would have a vehicle for leeching and irrigating the soil and removing the salty drainage water.
In the late 1800's, the California Development Company built the Alamo Canal which began importing Colorado River water to the Imperial Valley in 1901. The Alamo Canal water flowed first to Baja California for Mexican use and then to Imperial Valley. This canal was the genesis of the agricultural industry in Imperial County. For example, in the Imperial Valley, approximately 140,000 acres were farmed in 1908, and over 400,000 acres were farmed in 1919.
The Alamo Canal proved unsatisfactory because the amount of water flowing to the Imperial Valley from Mexico was inconsistent and unpredictable, and because silt frequently clogged the canal. For these reasons, in a message to Congress in 1907, President Roosevelt recommended construction of the All-American Canal. That canal finally was completed and started delivering water to Imperial County in 1940. Essentially, the All-American Canal operated on the same principal as the Alamo Canal: by gravity, the Colorado River water was transported from Arizona to Imperial County. After its use for farming, the drainage water flowed by gravity to the Salton Sea.
In 1909, the Imperial Irrigation District (IID) was formed. It assumed the responsibility of providing irrigation water and drainage facilities to the Imperial Valley. It still maintains that responsibility today, and it is for this reason that it is a defendant in this lawsuit.
D. Coachella Valley and CVWD
The Coachella Valley developed more slowly than the Imperial Valley, primarily because of water. It should be noted that the Indian lands involved in this lawsuit are located in the lower Coachella Valley, on the northwest side of the Sea. Until 1950, *1059 the settlers in the Coachella Valley irrigated their lands with groundwater, which the court finds was subject to overdrafts as early as 1920. The CVWD was formed in 1918; a primary function of the water district was to manage the groundwater basin and obtain imported supplies of water to augment the groundwater supply.
After World War II, the Coachella Valley grew in population and acres of agricultural use, primarily because it was known that the Coachella Valley would be receiving Colorado River water via the Coachella Canal, a joint construction project with the United States government and the CVWD. The Coachella Canal began delivering water to Coachella in 1950.
As is true with farming in the Imperial Valley, because of the salty soil, and because of the high salt content in the Colorado River water, extensive leeching and drainage must occur to control the salt content of the soil and keep it productive. The salty drainage water flows by gravity from farms in the Coachella Valley into the Salton Sea.
III. Trespass
As noted, plaintiffs seek damages and an injunction against defendants based on a theory of trespass. Trespass is the intentional use of the property of another without authorization and without privilege. W. Page Keeton et al., Prosser and Keaton on the Law of Torts § 13 at 70 (5th ed. 1984). Any physical entry upon the surface of the land is a trespass, including flooding land with water. Id. at 72. The intent required is simply an intent to be on the land. Id.
The court finds by a preponderance of the evidence that the "Area A" lands and "Area B" lands, see exh. 2333, which are the subject of this lawsuit, are lands held in trust by the United States government for the benefit of the Torres-Martinez band. Despite IID's vigorous challenge of Ms. Lila Ladue's testimony and affidavit, the court is satisfied that the status of the lands has been proven. In sum, the United States received the lands from Mexico pursuant to the Treaty of Guadalupe Hidalgo. In 1891 and 1909, the federal government withdrew the lands for the benefit of the band. Since that time, the Indian lands have been held in trust by the United States for the Torres-Martinez band.
There is no dispute that the Area A lands and the Area B lands have been significantly inundated by water: several parcels have been totally inundated since 1905-07. Further, there is no dispute that the defendants possess the general intent to be on the land. The sole issue as to liability is whether the entry of the water on the Indian lands was by consent.
The defendants are not contending that the band itself consented to the flooding of their lands. Rather, it is their contention that Congress or the President, pursuant to a valid delegation of authority, consented to the flooding of the Indian lands. They offer alternative theories of consent. First, they argue that by the public land withdrawals of 1924 and 1928 which created a public water reserve (hereinafter "PWR's") in the Salton Sea, the President clearly indicated an intent to withdraw most of the land involved in this lawsuit. The purpose of the withdrawal was to create a salt water reserve to hold the drainage water caused by farming in Imperial Valley and Coachella Valley. Hence, defendants argue the PWR's are an expression of Executive intent to allow the trespass involved in this lawsuit. Second, the Act of August 25, 1950, specifically authorizes the Secretary of Interior to purchase any Indian lands located below a contour line of -220'. The lands below -220' were to be reserved for the purpose of maintaining a drainage reservoir not to be disposed of without the consent of Congress. Defendants urge that the explicit intent to maintain a drainage reservoir below -220', and the authority of the Secretary of Interior to buy Indian land, clearly shows that Congress knew that Indian land was being flooded and gave its permission by authorizing the purchase of land below -220'. A peaceful entry on land by consent is not actionable. 75 Am.Jur.2d Trespass § 74 (1974). Consent by the owner is an absolute and valid defense to an action *1060 for trespass. However, consent must be granted by one in possession, by one entitled to possession of the premises, or by one otherwise competent and authorized to give such consent. Id. at 84.
Generally, the burden of proving consent is on the defendant. See Rosenthal v. Crystal Lake, 171 Ill.App.3d 428, 121 Ill. Dec. 869, 525 N.E.2d 1176 (1988); Mrs. Joe Miles v. Huff's Foodtown, Inc., No. 85-158-II, 1986 WL 1786 (Tenn.Ct.App. Feb. 11, 1986). Stone Resources Inc. v. Barnett, 661 S.W.2d 148 (Tex.Ct.App.1983); cf., Posey v. Leavitt, 229 Cal. App. 3d 1236, 280 Cal. Rptr. 568 (1991). The parties have been unable to cite any case that defines when effective consent to trespass is given by Indians or the United States Government on the band's behalf. However, government counsel persuasively argues that because of the unique protected status that Indians have under the law, the burden should be defined as whether defendants have proven by clear and convincing evidence congressional or presidential intent to abrogate the band's rights to the subject lands by consenting to the flooding of them. The defendants basically have conceded that this is their burden. Hence, the court will evaluate the evidence of consent pursuant to this standard.
As to the issue of how consent is proved, the court relies heavily on two cases which deal with abrogation of Indian treaty rights. These are United States v. Dion, 476 U.S. 734, 742, 106 S. Ct. 2216, 2221, 90 L. Ed. 2d 767 (1986), and Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 97 S. Ct. 1361, 51 L. Ed. 2d 660 (1977). In United States v. Dion, the Court noted that courts have sometimes required Congressional intent to abrogate Indian treaty rights to be express, and at other times courts have looked to a statute's legislative history and surrounding circumstances in addition to the statutory language itself. The Court stated that although an explicit statement of intent to abrogate Indian treaty rights is preferable, it was rejecting a per se rule:
[W]here the evidence of congressional intent is sufficiently compelling, "the weight of authority indicates that such an intent can also be found by a reviewing court from clear and reliable evidence in the legislative history of a statute." (citation omitted). What is essential is clear evidence that Congress actually considered the conflict between its intended action on the one hand and Indian treaty rights on the other, and chose to resolve the conflict by abrogating the treaty.
Id. 476 U.S. at 739-740, 106 S.Ct. at 2220-21 (emphasis added).
The second case which provides guidance on how to evaluate consent is Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 97 S. Ct. 1361, 51 L. Ed. 2d 660 (1977). In Rosebud, the Court found that an unratified treaty and three Congressional acts occurring over a 10-year period demonstrated clear intent by Congress to disestablish Indian title to lands involved in the lawsuit. In 1901, Congress had negotiated a treaty with the tribe for the sale of land to white settlers. The treaty was never ratified. The Court found that this unratified treaty evinced an "unmistakable baseline purpose of disestablishment." Id. at 592, 97 S.Ct. at 1366. Thereafter, there were additional government negotiations with the band for the purpose of purchasing the land, but no treaty was signed. By acts of 1904, 1907, and 1910, Congress adopted legislation concerning the same land and containing substantially the same provisions as had been agreed to in the 1901 unratified treaty. The court found that there was a "continuity of intent" which indicated that in the 1904, 1907, and 1910 acts, Congress intended to disestablish Indian title. Id. at 606, 97 S.Ct. at 1373.
From Rosebud and Dion it is clear that a statute need not on its face express an intent to abrogate Indian treaty rights. Although such facial expression of intent is preferable, the court can look to legislative history and the history of dealings between the band, the defendants and the government concerning the property at issue to determine whether there was a clear intent by Congress to abrogate Indian treaty rights. Furthermore, although no case has been cited to the court defining *1061 presidential intent to abrogate Indian rights, logically the same standards should apply to the President as apply to Congress, since he was acting pursuant to delegation of authority from Congress.
I turn then to an analysis of the alternative theories of consent, using the standard suggested by the United States: have the defendants proven by clear and convincing evidence that Congress or the President intended to abrogate the band's rights to the subject lands by consenting to the flooding of them. In assessing intent under Rosebud and Dion, there must be evidence both that Congress or the President recognized that the affected land was Indian land, and that Congress or the President clearly intended to abolish Indian rights in the affected land.
IV. The PWR's of 1924 and 1928
June 25, 1910, Congress approved two acts which are at the heart of the controversy in this lawsuit. First, 36 Stat. 858 provides that:
The Secretary of the Interior be and is hereby authorized in his discretion to reserve from location, entry, sale, allotment or other appropriation any lands within any Indian reservation, valuable for power or reservoir sites, or which may be necessary for use in connection with any irrigation project heretofore or hereafter to be authorized by Congress.
Act of June 25, 1910, ch. 431, 36 Stat. 855, 858 (1910). The second act is 36 Stat. 847. Pursuant to this bill, Congress delegated to the executive branch the power to withdraw any of the public lands of the United States. Act of June 25, 1910, ch. 421, 36 Stat. 847 (1910).
To assure that the drainage sink was preserved and protected, in the early 1920's IID began acquiring the private lands and railroad lands under and around the Salton Sea below an elevation of -220'. For the same reason, IID also petitioned the United States to withdraw public lands roughly below the -220' contour. An interesting anecdote to the petition is contained in a letter from the Director of the U.S. Geological Survey to officials at the General Land Office about IID's petition:
Another method of procedure is the granting of an easement under the Act of March 4, 1917, (39 Stat. 1197). Such action, however, would give the district control over a large area of public land and complicate any adjustment or other use of the Salton Sea which may at some future time seem expedient.
Exh. 2043.
The Secretary of Interior followed this recommendation and rather than grant to IID an easement in land below the -220' contour, he recommended to the President, and the President approved, two public water reserves, PWR 90 of 1924, and PWR 114 of 1928. The clearly stated purpose of these PWR's was to provide an "evaporation pan for surplus and waste water from Imperial Valley irrigation development." Exhs. 2058 and 2044. The irrigation reserve created by the PWR's was roughly along the -220' line, although the perimeter created by them was irregular.
The parties do not dispute that Congress has the authority to abrogate an Indian's treaty rights, and that this authority may be validly delegated to the President. Also, there is no dispute that 36 Stat. 847 and 36 Stat. 858 validly delegated to the President authority to withdraw public lands and Indian lands. The dispute is whether the President knew that land withdrawn in 1924 and 1928 contained Indian lands.
The defendants urge the two PWR's clearly demonstrate consent to trespass. However, when Presidents Coolidge and Harding withdrew lands in PWR 90 and PWR 114, they only mentioned 36 Stat. 847, the public land withdrawal act. Neither PWR contained a reference to 36 Stat. 858, the statute which explicitly authorizes the withdrawal of Indian lands in connection with any reservoir site or irrigation project.
Applying the principles of Rosebud and Dion to the PWR's of 1924 and 1928, the first issue is whether the withdrawals on their face clearly express an intent to abrogate Indian rights. I hold they do not. *1062 As noted, the two PWR's unambiguously withdraw plots of public land below the -220' contour. The question is whether reference to the public land withdrawal statute means that the Executive intended only to withdraw non-Indian land or whether he meant to withdraw non-Indian and Indian land.
Plaintiff offered testimony that the use of the public land withdrawal statute rather than use of the Indian land withdrawal statute is a clear expression of executive intent not to withdraw Indian land in either of the two PWR's. The court rejects this argument. IID submitted convincing evidence that the term "public land" in the early 1900's sometimes was used to mean non-Indian public land, and sometimes was used to mean public land which included Indian land. Hence, a withdrawal based upon the general public land withdrawal statute does not negate automatically presidential intent to abrogate Indian property rights. Further, since the term public land was used inconsistently during the 1920's, the court holds that the face of the 1924 and 1928 PWR's is ambiguous as to what land is meant to be withdrawn.
Having found the face of the withdrawals to be ambiguous, pursuant to Rosebud and Dion, the court looks to the history of the dealings between the parties and the legislative history to construct the meaning of the PWR's.
The dealings between the government, the defendants, and the band do not clarify the issue of whether the President knew that the lands being withdrawn in 1924 and 1928 contained Indian land. IID initiated the PWR's of 1924 and 1928 by a petition: IID's initial petition to the government to withdraw the lands referred to "public lands," and did not mention Indian land specifically. From historical evidence presented, it is absolutely clear that the executive knew that lands roughly below the -220' contour were being flooded pursuant to the irrigation project established by the Boulder Canyon Dam Project. Also, it is clear that it is this basin the withdrawals sought to protect. What is not clear is whether anyone in a position of authority in implementing, planning, or supervising the project appreciated that among the lands being inundated were Torres-Martinez lands, and if so, whether that information was communicated to the Executive. The record is silent as to this question.
Turning to the legislative history, or in this case, the executive history surrounding the withdrawals, it is clear that the Secretary of Interior should have known that the land being withdrawn in 1924 and 1928 contained Indian land. IID's original petition for withdrawal contained a map, since lost, outlining the lands which it desired to have withdrawn. The petition and map were referred to the General Land Office, an office under the supervision of the Secretary of Interior. It is also clear that there were on file in the General Land Office other accurate maps of the Salton Sea and surrounding area which contained accurate plot references to Torres-Martinez land. If government was working the way it should work, the fact that Indian land was contained within the proposed withdrawal areas should have been drawn to the attention of high-ranking officials considering the public land withdrawals. And, the court is persuaded by Mr. Langley's testimony that the Boulder Canyon Dam Project was a high priority government project and the government was working very professionally in supervising and implementing the project.
Nonetheless, despite the priority of the project, and despite the thoroughness of the manner in which it was executed, there is no mention in any historical record that, in fact, it was drawn to the attention of anyone considering the withdrawals, such as the President or the Secretary of Interior, that the lands involved in either of the PWR's contained Indian lands. Furthermore, the Act of August 25, 1950 (discussed more fully in the next section), specifically authorized the Secretary of Interior to purchase any Indian lands located below a contour line of -220'. This subsequent legislative history casts further doubt on the President's intent to abrogate *1063 Indian rights to the subject lands when he made the withdrawals. It could be, as defendant suggests, that the authorization for payment in 1950 was a corrective measure of what should have occurred in 1924 or 1928. However, at least an equally plausible interpretation is that there finally was an appreciation in the 1950 Act that lands below -220' in the Salton Sea basin contained Indian lands that had never been withdrawn effectively. Hence, for the foregoing reasons, this court rejects the argument that the PWR's of 1924 and 1928 clearly demonstrate presidential intent to abrogate Indian rights in the subject lands by permitting them to be flooded.[3]
V. The Act of August 25, 1950
On August 25, 1950, Congress approved legislation "to provide for disposition of lands on the Cabazon, Augustine, and Torres-Martinez Indian Reservations in California, and for other purposes." Act of August 25, 1950, ch. 780, 64 Stat. 470 (1950). Section 7 of that Act authorized the Secretary to purchase Indian land below the -220' contour line around the Salton Sea for use as a drainage reservoir.[4] The defendants argue that this legislation clearly shows that Congress knew the -220' contour contained Indian land and that Congress intended this land to be used as a drainage reservoir: in sum, they argue that in this legislation Congress clearly has demonstrated an intent to abrogate the band's rights to land below the -220' contour.
The plaintiffs note that the bill authorized the Secretary of Interior to purchase the Indian lands and authorized the appropriation of money to do so. However, they argue that because the Secretary of Interior did not exercise his authority and buy the Indian lands, a condition precedent to the abrogation did not occur and there was no clear, unequivocal consent.
Section 7 of the Act of August 25, 1950, provides in part the following:
The Secretary of the Interior is further authorized to acquire by purchase for and in behalf of the United States, and at such price as may be agreed upon between him and the Indian owners, any Indian lands, whether tribally or individually owned, located under or adjacent to the Salton Sea, below a contour line of two hundred and twenty feet below sea level or lower. The lands so acquired shall be reserved for the purpose of maintaining a drainage reservoir in said Salton Sea and shall not be exchanged or otherwise disposed of without the consent of the Congress. The amount (not to exceed $5,000) required to complete such purchases is hereby authorized to be appropriated out of moneys in the United States Treasury not otherwise appropriated.
64 Stat. 470.
As indicated previously, the relevant inquiry is whether the defendants have proved by clear and convincing evidence that Congress knew that the lands were Indian lands and intended to abrogate the band's rights to the land. For the reasons stated below, the court finds that the statute is ambiguous on its face. Further, the court finds that the course of dealings between the government, the band and the water districts is persuasive evidence that Congress intended in Section 7 of the Act to abrogate Indian rights in Section 7 of the Act. However, the legislative history is ambiguous as to whether Congress did intend to abrogate Indian rights. On balance, since the burden is that consent must be proved by clear and convincing evidence, the court resolves this issue against the defendants.
Turning first to the language of the statute, the most persuasive reason that defendants advance as to why the statute is not ambiguous is that the language of the statute does not clearly provide *1064 that purchase of Indian lands below the -220' contour is a condition precedent to the establishment of the drainage reservoir. Certainly, as defendants argue, Congress does know how to write clear conditions precedent. Hence, if Congress intended to establish a condition precedent to the creation of the drainage reservoir, it could have done so in a much more lucid manner.
Nevertheless, the court finds that the language in Section 7 does not unambiguously express an intent to abrogate Indian rights. First, some of the language in Section 7 appears to condition the use of the land upon purchase by the Secretary. For example, Congress "authorizes" the Secretary to purchase the land at a price agreed upon by the "Indian owners," but it does not unilaterally abrogate title or proclaim that the land would thereafter be used for drainage, as it could have done. See Lone Wolf v. Hitchcock, 187 U.S. 553, 23 S. Ct. 216, 47 L. Ed. 299 (1902). Second, the section provides that the land "so acquired" shall be used as drainage; this language reasonably can be interpreted to mean that the land must be acquired before it can be used for drainage. Finally, Congress authorized the appropriation of money "to complete such purchases." Such language suggests that the band's rights were not abrogated until the purchase by the Secretary of Interior.
Having found that the language of the statute itself is ambiguous, pursuant to Rosebud and Dion the court looks to the dealings between the band and the government concerning the property at issue, and to the legislative history of the statute to determine whether there was a clear intent by Congress to abrogate Indian treaty rights.
As noted previously, the course of dealings between the band, the water districts and the government is very strong evidence that Congress intended in Section 7 to abrogate Indian rights and to provide compensation to the band for the previous flooding of its land due to irrigation. Defendants have clearly proven that the Boulder Canyon Dam Project was a high visibility project which had been ongoing since before the 1924 and 1928 withdrawals. Federal money was appropriated and spent to build the All American Canal and the Coachella Canal. The federal government was involved in designing, financing, and supervising the distribution and drainage systems in Coachella Valley. The sea level was visible and not hidden; thus, not only the band, but the government agents and Bureau of Indian Affairs agents could see the area inundatedit was not a latent or hidden condition. Moreover, a key component of the irrigation system established by the Boulder Canyon Dam Project was that drainage waters from Imperial Valley and Coachella Valley could be transported to the Salton Sea. In other words, using the Sea as a drainage reservoir was an integral part of the federal program to provide water to Southern California. Because drainage into the Salton Sea was critical to the success of the irrigation program, and because the legislative history indicates Congress knew that the Indian lands were in fact flooded, one could assume that Congress would not desire to have a multimillion dollar agricultural project spanning two counties halted until and unless $5,000 was paid to the band. See House Subcomm. on Indian Affairs of the House Comm. on Public Lands, Hearings on H.R. 4584, a Bill to Provide for Disposition of Lands on the Cabazon, Augustine, and Torres-Martinez Indian Reservations in California, and for Other Purposes, Vol. 1, p. 29 (May 23, 1949) (Reporter's Transcript, available at the National Archives) (hereinafter Hearings on H.R. 4584).
Finally, subsequent acts of the parties support the non-conditional construction urged by defendants. For example, in the decade following the 1950 Act, the Secretary of Interior and the Bureau of Indian Affairs approved several plans in the Coachella Valley for drainage systems which brought drainage waters from non-Indian fields across Indian land and deposited the water in the Sea. In sum, the Secretary of Interior did not act as if a condition precedent barred drainage into the Sea; in fact he actively participated in approving plans *1065 and construction of drainage facilities by CVWD. See Exh. 1011.
Balanced against this persuasive evidence of dealings between the band, the water districts, and the government, however, is the legislative history. Some of the legislative history supports defendants' position; however, most, concededly by omissions from that history, supports plaintiffs' position.
Among the facts from the legislative history which supports defendants' position is the fact that in Section 7, at least, a concern for protecting drainage rights for the project took precedence over concern for Indian income. Congressman John Phillips, who introduced the bill, explained that it "establishes a definite boundary for the Salton Sea. That is for the land adjacent to the Salton Sea, which shall not be put up for private sale, which shall be kept as the land for the Salton Sea, to fill up from drainage." Hearings on H.R. 4584 at 5. The historical record reveals congressional concern that the land within the drainage reserve not have nuisance value, which it would if the Indians or non-Indian settlers could block a project which had been developed, financed, and supervised by the federal government since 1907.
The original version of the bill also supports defendants' position. That version, written by the Office of Indian Affairs, proposed that all non-irrigable Indian lands be appraised and sold by the Secretary to CVWD. H.R. 3056, 81st Cong., 1st Session 3 (1949). This original version supports a conclusion that the aim of Congress in Section 7 was to create the reserve, not to protect Indian rights. The fact that the United States elected to keep Indian land rather than sell it evolved out of expressed congressional concern about whether to sell the Indian land below the -220' contour to CVWD or IID, Hearings on H.R. 4584 at 31, and from the United States Government's desire to keep some control over the project. Allocation of public funds to pay for the Indian land was required because the United States elected to keep the lands. Had the bill proceeded as originally written, CVWD would have paid the band for its lands and compensation would not have been an impediment to the project.
Supporting plaintiffs' position are the following points. First, even though the original version of the bill was aimed at establishing a perimeter for the Salton Sea at the -220' contour, as the bill evolved, Congress added significant provisions to protect Indian interests. For example, the bill extinguished liens and provided for the construction of a drainage system on Indian lands, if the Indians consented, in order to increase the value of Indian lands and make them more amenable to agriculture. This sensitivity to Indian interests and desire to protect them is consistent with a reading that in the Act of August 25, 1950, Congress did not intend unconditionally to abrogate Indian rights in land below the -220' contour.
Ultimately most persuasive is the fact that the court has been shown no legislative history which reflects that Congress clearly sought to extinguish unconditionally the band's rights to the land located below the -220' contour regardless of whether or not the purchase was completed. No documents were presented which reflect that Congress appreciated that by holding title to inundated land, the band's ownership interest presented the nuisance threat to the Boulder Canyon Dam Project which Congress sought to prevent. In Section 7 it is clear that Congress provided authorization for the Secretary of Interior to purchase inundated Indian land: however, nowhere in the history presented does Congress or any participant in these proceedings appear to consider what would happen if the Secretary neglected to exercise his authority or if the band refused to sell its land.
In essence, the legislative history presented to the court indicates that the term "authorized" in Section 7 meant exactly that: that the Secretary of Interior was authorized to buy land from the band that was located below the -220' perimeter. Because the face of the statute and the legislative history are ambiguous as to intent to abrogate Indian interests in land, I *1066 hold the subsequent conduct of the defendants and the Executive's agents is insufficient to provide clear and convincing evidence of congressional an intent to abrogate Indian rights in the land. The fundamental problem that the court sees is relating the knowledge and appreciation of agents of the executive branch to Congress. Clearly by 1950, the executive branch, specifically the Secretary of Interior and agents of the Bureau of Indian Affairs, as well as the defendants, were aware of the band's interests in land located within the reservoir and appreciated their nuisance value. What is missing is any evidence that concern about the nuisance value of the Indian lands was communicated to Congress, or if it were, that this information influenced Congress so that the court could read in Section 7 an intent to abrogate Indian rights to the land below the -220' contour regardless of whether the sale went through.
VI. Summary of Findings on Consent
In sum, then, I find that defendants have failed to prove the two prongs for establishing consent by clear and convincing evidence. In 1924 and 1928 there is overwhelming evidence that the President intended to abrogate the rights of title to the land beneath the Salton Sea by creating the water reserve. There is, however, not clear and convincing evidence that the President knew that some of the land withdrawn was Indian land. In 1950, there is clear and convincing evidence that Congress knew the land beneath the -220' contour belonged to Indians. However, there is not clear and convincing evidence that Congress intended to unconditionally abrogate those rights when it authorized the Secretary of Interior to purchase Indian lands. Even though the Boulder Canyon Dam Project was continuously a significant, visible federal project which was extensively supervised by the Secretary of Interior or his agents, the court does not find that the intent of the President in 1924 and 1928 legally can be imputed to Congress in 1950, or that the knowledge of Congress in 1950 is properly related back to the President in 1924 and 1928. In essence, the defendants have failed to prove consent to trespass on the Indian lands.
VII. Damages
The parties agree that the proper measure of damages for trespass is the fair rental value of the property, assuming that the property is being put to its highest and best use. Hammond v. County of Madera, 859 F.2d 797, 804 (9th Cir.1988). The parties also agree that the highest and best use of the band's property involved in this lawsuit is agricultural. Indeed, it is virtually conceded that the plaintiffs' property has only nominal value unless it is used for agricultural purposes.
Plaintiffs seek present and future damages of $69,563,213.00. They claim that $30,313,059 is the historical lost income, for the years 1924-1992, excluding July 18, 1966 through September 29, 1976. Further, they allege that the cost of reclaiming their land is $32,617,730.00, and that the lost income during the ten-year reclamation period is $6,632,450. Finally, plaintiffs seek an injunction prohibiting defendants from continuing to flood their land. Defendants offer contrary testimony concerning the rental value of the property and vigorously oppose an injunction. I turn first to the issue of damages and will thereafter consider the issue of an injunction.
All the Indian land involved in this lawsuit was classified as non-irrigable until 1950; hence, the rental value of the land from 1924-1950 is nominal since the lands were not fit for agriculture. All the experts agreed that in a situation where value is nominal, the court must arbitrarily select a figure which the court believes is fair. Plaintiffs proposed that the court award one dollar per acre for each year of inundation and compound the interest annually. By this procedure, the compensation for the trespass of worthless land becomes several million dollars. The court rejects this methodology as mathematical sophistry, or another example of "voodoo economics." A nominal damage figure is a recognition that a right of the plaintiffs should be respected, even though that right has no economic value. Providing interest *1067 annually is inappropriate since there was no value to the land nor any reasonable expectation that the land would be rented. See Greater Westchester Homeowners Assn. v. City of Los Angeles, 26 Cal. 3d 86, 102, 160 Cal. Rptr. 733, 603 P.2d 1329 (1979). Hence, the court awards $1000 per parcel for the trespass involved from 1924 through 1949. Since there are 39 parcels, the total award is $39,000.
Concerning damages from 1950-1992, the highest and best use of the land was agricultural. For land to have agricultural value, the soil must be capable of growing crops, there must be a sufficient water supply to irrigate the crops and to leech the soil, and it must be economical to farm the land. The court finds defendants' experts who testified concerning the quality of the Indian soil and the availability of water, particularly Mr. Hebler and Mr. Weeks, were more convincing than plaintiffs' experts, and the court relies extensively on them in making the following findings.
The court finds that the soil on the Indian land contains significant amounts of clay and is very salty. Certainly the salt content of the band's land has increased since 1924 due to the inundation by the Sea. However, the court finds that the inundated Indian lands have always had a high salt content; they were in the area where salt was mined and stored in the early 1900's. Further, stored salt was dispersed upon the inundated Indian lands by the flood. Additionally, the Colorado River water which flooded the land in 1905-07 was very salty; thus, had the irrigation drainage water not maintained the Sea at a high level, the 1905-07 flood water would have evaporated eventually,[5] a thick coat of salt upon the already salty soil.
As a result of the high concentration of salt, farming the irrigable Indian land would require significant leeching efforts. However, because the Indian land contains significant amounts of clay, leeching would be very difficult, since the clay causes water to sit on the soil rather than drain through it. In sum, this land would be much more difficult to farm than other available land in the Coachella Valley that is not plagued by clay and high salt content.
Most important, however, is the fact that leeching and irrigating requires significant quantities of water, and the court is unconvinced by plaintiffs' experts' testimony that irrigation water has been available to the band since 1950. The Torres-Martinez land has been excluded from the Coachella Valley Water District since 1950 and, hence, it is not able to receive Colorado River water, but must rely on underground water supplies. The reason the Torres-Martinez land is not included within the CVWD is two-fold. From 1950-1954, the Indian land was excluded because the Bureau of Reclamation classified the land as non-irrigable. Legislation later in the 1950's gave the Torres-Martinez, Cabazon, and Augustine bands the election of having CVWD install drainage and distribution systems to provide irrigation to the land; however, the Torres-Martinez band elected not to take advantage of these benefits, and its opt-in period has expired. Thus, the band must rely upon underground water to irrigate its land.
The court finds that the testimony of the defense experts, and particularly Mr. Weeks, Mr. Lord, and Mr. Banks, is persuasive that the water supply in the upper aquifer is not plentiful and tends to be salty, making it unsuitable for agriculture. The court finds that water is plentiful in the lower aquifer, but the costs associated with installing wells capable of reaching water 1000' below the ground, and the costs of maintaining and using these wells are prohibitive.
Hence, in computing damages from 1950-92, the court relies extensively upon the testimony of Mr. Metcalf, as he used the facts developed by Mr. Hebler, Mr. Weeks, Mr. Lord, and Mr. Banks concerning the quality of the soil on the Indian *1068 lands and the availability of water. Mr. Metcalf testified that the reasonable rental value of the affected Indian land from 1950-1992, excluding 1966-76, was $1,277,062.00. The court awards to plaintiffs this amount.
Concerning the issue of future damages, the court must first resolve the issue of injunctive relief since it has a significant bearing on future damage calculations in this case. As noted previously, the plaintiffs seek an injunction and reclamation damages which total approximately $40,000,000. The defendants urge that an injunction is inequitable and impractical, and that the court must therefore award the fee value of the land as future damages. The defendants proffer testimony from Mr. Metcalf that the fee value of the land is $2,594,000.00.
There is some ambiguity as to whether plaintiffs seek an injunction or ejectment. In their complaint, plaintiffs seek an injunction. At trial, plaintiffs sought ejectment, and contended that ejectment was an automatic remedy for the tort of trespass. The court denies ejectment for three reasons. First, ejectment has historically been a discrete cause of action available to a plaintiff who cannot sue for trespass because he or she is not in possession of the land. See W. Page Keaton, et al., Prosser and Keaton on the Law of Torts § 13, at 77-78 (5th ed. 1984). In this case, plaintiffs alleged one cause of action, trespass, and have not pled, briefed, or proven the tort of ejectment. Second, the one case upon which plaintiffs rely, Oneida Indian Nation of New York v. Oneida County, 719 F.2d 525, 540 (2d Cir.1983) is inapposite. In Oneida, the Court analogized the Indian plaintiffs' claim to the common law action for ejectment; the court did not hold that ejectment was a remedy for trespass, particularly not the "automatic" remedy plaintiff urges.
Third, there is precedent for applying equitable factors and thereby limiting relief otherwise available for Indian claims. See, e.g., Brooks v. Nez Perce County, 670 F.2d 835, 837 (9th Cir.1982) (laches may be weighed by district court in calculating damages where U.S. delayed over 54 years in bringing claim on behalf of Indian); Oneida v. Oneida Indian Nation, 470 U.S. 226, 105 S. Ct. 1245, 84 L. Ed. 2d 169 (1985) (dissenting justices state that laches should bar claim based on unlawful possession although majority expressed no view because the issue was not raised in the trial court).
For the reasons stated above, and because it is equitable to balance the hardships in this case since the rights of so many farmers would be significantly impacted by ejectment, the court holds that an equitable analysis is appropriate before issuing any final orders other than for monetary damages. Further, under the general common law, a party injured by a continuing trespass generally recovers damages and a permanent injunction requiring removal of the encroachment. 75 Am.Jur.2d Trespass § 113 at n. 78 (1991); see also Baker v. Burbank-Glendale-Pasadena Airport Authority, 39 Cal. 3d 862, 218 Cal. Rptr. 293, 705 P.2d 866 (1985); 5 Witkin, Summary of California Law § 606 (9th ed. 1988). Therefore, the court will construe plaintiffs' request for ejectment as a request for a permanent injunction, and will analyze this request pursuant to the equitable factors suggested by the Restatement of Torts for determining the appropriateness of an injunction against trespass. These factors are the following:
(1) The nature of the interest to be protected;
(2) The relative adequacy of injunctive and other remedies available to the plaintiff;
(3) Any unreasonable delay of the plaintiff in initiating the action;
(4) Any related misconduct on the part of the plaintiff,
(5) The relative hardship of the parties if the injunction is granted or denied;
(6) The interests of third persons and the public;
(7) The practicability of framing and enforcing the injunction.
Restatement (Second) of Torts § 936(1)(a)(g).
*1069 Applying the factors suggested by the Restatement, the court finds that injunctive relief is inappropriate in this case. The interest sought to be protected is land, something which the law regards as unique and which it usually protects with injunctive relief. However, this is not land to which the band has any historical tie. Most of this land has been inundated by the Salton Sea since it was withdrawn for the band's benefit. Moreover, plaintiffs unreasonably delayed some 54 years in bringing this lawsuit. There is no evidence of misconduct by the band, other than a lack of vigilance in protecting its rights, but there is misconduct on the part of the title holder, the United States. Indeed, a chief obstacle in analyzing this lawsuit is that the United States is a plaintiff and not a defendant.
The misconduct of the government is essentially categorized as omissions. For example, there is no reasonable explanation in the record for why the Secretary of Interior did not exercise the authority given to him in 1950 by the Act of August 25, 1950 to purchase the Indian land below the -220' contour. Further, there is no reasonable explanation in the record why in 1924 and 1928 the President was not specifically alerted, in a documented manner, that the land he was withdrawing below the -220' contour contained Indian land or why he did not refer to the statute authorizing withdrawal of Indian land for a water reserve.
The most glaring omission, however, is that the government did not protect these parties from their collision course resulting in this lawsuit. The Boulder Canyon Dam Project is an irrigation project in which the United States has been a key participant since President Roosevelt delivered a speech urging construction of it in 1907. United States employees organized, planned, and supervised construction and implementation of the project. United States taxpayers paid for the project. At least twice the United States was asked to sell the Indian lands involved to CVWD or IID and it elected not to, desiring to keep some control over the drainage basin. Since it was so involved with the project, and since it elected to keep some control in the basin by retaining lands it was holding for the Indians as trustee, the United States government should have done a better job of protecting the Indians, IID, and CVWD. In essence, the band is suing these defendants largely because the United States inadequately protected the Indian property rights either by approving the sale of its land, buying its land, or prohibiting inundation of its land in the first place.
There is hardship to the plaintiff Indians if the injunction is not granted, since failure to enjoin the trespass will deprive them of their rights to use the land covered by the Sea. However, as against the interest of the 300 band members to their land, the court must balance the hardship to the agricultural industry in Imperial and Riverside counties if an injunction is granted. The agricultural industry in these counties is an enormous business which provides food to much of this country. An injunction would render useless thousands of acres of cultivated farmland to the detriment of innocent farmers who are blameless in this lawsuit and who have worked hard to cultivate desert lands.
For the reasons enumerated, the court declines to grant injunctive relief and will instead award monetary damages equal to the fee value of the property to compensate the band for all future damages based upon trespass. The court bases its computation of the fee value on Mr. Metcalf's testimony's for the reasons stated previously. Thus, the band is awarded $2,594,000 for all future damages.
The court holds that the defendants are severally liable. Multiple tortfeasors are jointly liable only where they contribute to an "indivisible injury." American Motorcycle Assn. v. Superior Court, 20 Cal. 3d 578, 586, 146 Cal. Rptr. 182, 578 P.2d 899 (1978). Where it is possible to determine how much of the damage each defendant caused, each defendant is liable for only that amount. W. Page Keeton, et al., Prosser and Keaton on the Law of Torts 54 (5th ed. 1984); see Restatement (Second) of Torts § 433A. In this case, the *1070 damages are capable of apportionment. The primary sources of water in the Salton Sea are from IID, CVWD, Mexican irrigation, and natural runoff from storms. There is testimony that IID is responsible for approximately 71.5% of the water in the Salton Sea. Hence, IID is ordered to pay that percent of the damages granted in this lawsuit. Further, there is testimony that CVWD is responsible for approximately 5.5% of the water in the Salton Sea. CVWD is ordered to pay that percent of the damages awarded.
Finally, there is the issue of prejudgment interest. The court has previously ruled that there is no prejudgment interest on nominal damages. It also rules that there should be no prejudgment interest on past damages from 1950-1992.
In a case arising under federal law, federal courts will look to state law in formulating a rule of decision, unless state law conflicts with the need for a uniform federal policy. Bd. of Comm'rs. of Jackson County v. United States, 308 U.S. 343, 60 S. Ct. 285, 84 L. Ed. 313 (1939); State Box Co. v. United States, 321 F.2d 640 (9th Cir.1963). In Jackson, the Court, finding no well-established federal policy regarding liability for prejudgment interest, looked to state law in deciding whether the county was liable to an Indian band for prejudgment interest on wrongfully collected taxes. Jackson, 308 U.S. at 351, 60 S.Ct. at 288. The fact that the defendant was a political subdivision factored into the Court's decision to look to state law rather than apply the "general notions of equity" that govern liability for interest in a suit between the government and a private litigant for money owed the government. Id. at 349, 60 S.Ct. at 287. In this case, the defendant districts are akin to the county in Jackson and, thus, this court will look to state law in determining liability for prejudgment interest.
Because the damages in this case are disputed, California Civil Code § 3288 applies. This section provides that interest may be given in an action "for the breach of an obligation not arising from contact ... in the discretion of the [trier of fact]." Cal.Civ.Code § 3288 (West 1970). This section "permits discretionary prejudgment interest for unliquidated tort claims." Greater Westchester Homeowners Ass'n v. City of Los Angeles, 26 Cal. 3d 86, 102, 160 Cal. Rptr. 733, 603 P.2d 1329 (1979). The award of such interest represents the accretion of wealth which money or particular property could have produced during a period of loss. Id. at 102-03, 160 Cal. Rptr. 733, 603 P.2d 1329.
The court declines to award prejudgment interest because it is very speculative that the Indian land in this lawsuit would have resulted in an "accretion of wealth." There is no evidence that anyone has ever sought to rent or buy the Indian land involved in this lawsuit and, as noted, the land is not desirable because of the extensive clay and salt content of the soil, and because the band has no ready access to an inexpensive supply of water. Moreover, in this case, awarding prejudgment interest seems inequitable since it would in effect reward the plaintiffs for not being vigilant about bringing this lawsuit much earlier than they did.
Conclusion
In conclusion, the court finds defendants are liable for trespass for the years 1924-1992. Plaintiffs are awarded nominal damages of $39,000, and past damages of $1,277,062.00. The court denies injunctive relief because it is inequitable and impractical. Instead, it awards future damages of $2,594,000.00 which sum reflects the fee value of the land. Plaintiffs are awarded costs of suit. Plaintiffs' counsel are directed to prepare and file a judgment which corresponds to this decision by August 1, 1992.
NOTES
[1] Until the enactment of 28 U.S.C. § 2415, on July 18, 1966, claims brought by the United States on behalf of Indians were not subject to a statute of limitations. That statute provided that all claims accruing before July 28, 1966, would be subject to an absolute filing deadline of January 6, 1984. 28 U.S.C. § 2415(g). All claims accruing after July 18, 1966, were subject to a six-year, ninety-day period of limitation.
The complaint in this case was filed December 28, 1982. As such, the claims accruing before July 18, 1966, are timely because they were filed before the absolute deadline of January 6, 1984. The claims accruing on or after September 29, 1976, are timely because they were filed within six years and ninety days of accrual. The claims accruing between July 18, 1966 and September 29, 1976, are barred because they were not filed within the six-year, ninety-day period.
[2] The negative values refer to depth below sea level.
[3] Defendant IID filed a motion pursuant to Fed. R.Civ.P. 52(c) dealing with this issue which was taken under submission. It is denied for the reasons stated in this section.
[4] The 1924 and 1928 withdrawals roughly followed the -220' contour, but since the land withdrawn was identified by parcel number, the perimeter established was irregular. In Section 7 of the Act of 1950, Congress specifically set the -220' contour as the perimeter of the basin.
[5] Interestingly, even though plaintiffs' experts dispute the high clay component of the soil, they agree that the sea would not have receded after the 1905-07 flood until 1923 because of the high clay composition of the seabed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453631/ | 362 F. Supp. 2d 1043 (2005)
UNITED STATES of America, Plaintiff,
v.
Angela JOHNSON, Defendant.
No. CR 01-3046-MWB.
United States District Court, N.D. Iowa, Central Division.
February 18, 2005.
*1044 *1045 *1046 *1047 Alfred E. Willett, Terpstra, Epping & Willett, Cedar Rapids, IA, Dean A. Stowers, Rosenberg, Stowers & Morse, Des Moines, IA, Patrick J. Berrigan, Watson & Dameron, LLP, Kansas City, MO, Robert R. Rigg, Des Moines, IA, for Defendant.
Charles J. Williams, Patrick J. Reinert, U.S. Attorney's Office Northern District of Iowa, Cedar Rapids, IA, Thomas Henry Miller, Des Moines, IA, for Plaintiff.
MEMORANDUM OPINION AND ORDER REGARDING THE PARTIES' SECOND ROUND OF PRETRIAL MOTIONS
BENNETT, Chief Judge.
TABLE OF CONTENTS
I. BACKGROUND ................................................................1049
A. The Original And Superseding Indictments ..............................1049
B. The Co-Defendant's Trial ..............................................1051
C. The Pretrial Motions In Johnson's Case ................................1052
II. LEGAL ANALYSIS ............................................................1053
A. The Government's Motion For Victim Witnesses To Be Present
During Trial ........................................................1053
1. Arguments of the parties ..........................................1053
2. Analysis ..........................................................1054
a. Consideration of the government's supplemental argument........1054
b. Section 3510(b) ...............................................1055
c. Section 3771 ..................................................1055
B. The Government's Motion To Use Witness Photographs During
Arguments ............................................................1056
1. Arguments of the parties ..........................................1056
2. Analysis ..........................................................1058
a. Latitude and discretion .......................................1058
b. "Summary" exhibits ............................................1058
c. "Demonstrative" exhibits ......................................1059
d. Use of the photographs here ...................................1060
C. The Government's Motion To Determine Admissibility Of Audio
Recordings ..........................................................1063
1. Factual background ................................................1063
2. Arguments of the parties ..........................................1064
3. Analysis ..........................................................1065
D. Government's Motion Concerning The Number Of Peremptory
Challenges .........................................................1069
*1048
1. Arguments of the parties ..........................................1069
2. Analysis ..........................................................1071
E. The Government's Motion For Court-Ordered Mental Examination Of
The Defendant .......................................................1074
1. Background ........................................................1074
2. Arguments of the parties ..........................................1075
3. Analysis ..........................................................1076
a. Rule 12.2 .....................................................1076
b. Rule 12.2(b): Defendant's notice
i. Purpose of the provision ................................1077
ii. The sufficiency of Johnson's notices ....................1077
c. Rule 12.2(c)(1): Court-ordered examination ....................1081
i. The pertinent provision and its purpose .................1081
ii. Johnson's request for an "outside taint team" ...........1082
iii. Johnson's demand for notice .............................1085
iv. Johnson's demand for Fifth and Sixth Amendment
protections ...........................................1085
v. Summary .................................................1091
d. Rule 12.2(c)(2) & (3): Disclosure and use of results.......1091
F. The Defendant's Motion To Strike The Death Penalty ....................1092
1. Arguments of the parties ..........................................1092
2. Analysis ..........................................................1094
G. The Defendant's Motion To Exclude Prior Jury Determinations As To
Honken ..............................................................1094
1. Arguments of the parties ..........................................1095
2. Analysis ..........................................................1096
a. Honken's 1997 conviction ......................................1096
b. Honken's 2004 conviction and verdict for a death sentence......1096
H. The Defendant's Motion For A Bill Of Particulars ......................1097
1. Arguments of the parties ..........................................1097
2. Analysis ..........................................................1097
I. The Defendant's Motion To Strike Certain Allegations In Counts 6
Through 10 ..........................................................1098
1. Arguments of the parties ..........................................1098
2. Analysis ..........................................................1098
J. The Defendant's Motion To Trifurcate The Proceedings ..................1099
1. Arguments of the parties...........................................1099
a. Written submissions ...........................................1099
b. Oral arguments ................................................1100
c. Post-hearing inquiry ..........................................1102
2. Analysis ..........................................................1103
a. Constitutional requirements ...................................1103
b. Other grounds for "trifurcation" ..............................1104
i. Statutory limitations on the "information" presented at
sentencing ............................................1104
ii. "Probative value" .......................................1105
iii. "Prejudice" .............................................1106
iv. "Confusion of the issues" ...............................1109
v. "Misleading the jury" ...................................1109
c. The remedy ....................................................1110
III. CONCLUSION ................................................................1111
The court recently resolved a dozen pretrial motions in this federal death-penalty case, some of which required the court and the parties to explore terra incognita. See United States v. Johnson, 354 F.Supp2d 939 (N.D.Iowa 2005). Several more pretrial motions, filed subsequently, were *1049 mooted by the government's voluntary dismissal of the two non-capital charges against this defendant. Nevertheless, this matter is now before the court on a "second," and hopefully "final," round of pretrial motions involving nearly as many, and nearly as varied, motions as the "first round." Some of the motions attempt to resolve, before trial, issues that arose during the separate trial of a co-defendant in a companion case, but others require the court and the parties to make further incursions into terra incognita.
I. BACKGROUND
To provide the necessary background to the present group of pretrial motions, the court must once again review the charges and the key procedural history in this case against Angela Johnson and the separate case against co-defendant Dustin Honken. The court must also add certain important incidents in that history that have occurred since the court's ruling on the "first round" of motions. The review of the charges and procedural history begins with the two indictments filed against Johnson
A. The Original And Superseding Indictments
In two separate indictments, a grand jury charged defendant Angela Johnson with a variety of offenses arising, principally, from her alleged involvement in the murders in 1993 of five witnesses to the drug-trafficking activities of Johnson's sometime boyfriend, Dustin Honken. The grand jury handed down the first seven-count indictment on July 26, 2000, and the second ten-count indictment on August 30, 2001. On April 25, 2002, the government filed its original notice in each case of its intent to seek the death penalty on all of the charges against Johnson relating to the murder of witnesses, that is, Counts 1 through 5 of the first indictment and all ten of the charges in the second indictment. Those notices identified the factors that the government contends warrant the imposition of the death penalty under the applicable death-penalty statutes.
On August 23, 2002, the government filed superseding indictments in both cases against Johnson. The superseding indictment in the first case against Johnson, Case No. CR 00-3034-MWB, reiterated and expanded the seven counts of the original indictment. It charged the following offenses: five counts of aiding and abetting the murders of witnesses Gregory Nicholson, Lori Duncan (Nicholson's friend), Amber Duncan and Kandi Duncan (Lori Duncan's daughters, ages 6 and 10, respectively), and Terry DeGeus, respectively, in violation of 18 U.S.C. §§ 1512(a)(1)(A) and (C), 1512(a)(2)(A) or 1513(a)(1)(A) and (C),[1] 1111, and 2; one count of aiding and abetting the solicitation of the murders of witnesses Timothy Cutkomp and Daniel Cobeen, in violation of 18 U.S.C. §§ 373(a)(1) and 2; and one count of conspiracy to interfere with all seven witnesses, in violation of 18 U.S.C. § 371.
The August 23, 2002, superseding indictment in Case No. CR 01-3046-MWB, like the original indictment in that case, charged Johnson with five counts of killing witnesses while engaging in a drug-trafficking conspiracy ("conspiracy murder"), in violation of 21 U.S.C. § 848(e)(1)(A) and 18 U.S.C. § 2; and five counts of killing the same witnesses in furtherance of a continuing criminal enterprise ("CCE murder"), *1050 also in violation of 21 U.S.C. § 848(e)(1)(A) and 18 U.S.C. § 2. More specifically, Counts 1 through 5 of the superseding indictment in Case No. CR 01-3046-MWB charged that, on or about July 25, 1993, or in the case of Terry DeGeus, on or about November 5, 1993, while engaging in an offense punishable under 21 U.S.C. § 841(b)(1)(A) and 846, relating to a conspiracy to manufacture and distribute 100 grams or more of pure methamphetamine and 1000 grams or more of a mixture or substance containing a detectable amount of methamphetamine between 1992 and 2000, Angela Johnson intentionally killed and counselled, commanded, induced, procured, and caused and aided and abetted the intentional killing of Gregory Nicholson, Lori Duncan, Amber Duncan, Kandi Duncan, and Terry DeGeus, respectively, and that such killings resulted, all in violation of 21 U.S.C. § 848(e)(1)(A) and 18 U.S.C. § 2. Counts 6 through 10 of the superseding indictment charged that, on or about July 25, 1993, or in the case of Terry DeGeus, on or about November 5, 1993, while working in furtherance of a continuing criminal enterprise between 1992 and 2000 in violation of 21 U.S.C. § 848(c), Angela Johnson intentionally killed and counseled, commanded, induced, procured, and caused and aided and abetted the intentional killing of Gregory Nicholson, Lori Duncan, Amber Duncan, Kandi Duncan, and Terry DeGeus, respectively, and that such killings resulted, all in violation of 21 U.S.C. § 848(e)(1)(A) and 18 U.S.C. § 2.
On September 24, 2002, after the filing of the superseding indictments, the government filed a notice in Case No. CR 00-3034-MWB withdrawing its notice of intent to seek the death penalty for violations of the witness-tampering statute, 18 U.S.C. § 1512. However, the government reiterated its intention to continue pursuing the death penalty in Case No. CR 01-3046-MWB as to the "conspiracy murder" and "CCE murder" charges pursuant to 21 U.S.C. § 848. Indeed, on November 14, 2002, the government filed a notice of intent to seek the death penalty on all ten charges in the superseding indictment in Case No. CR 01-3046-MWB.
Although the charges in the two indictments survived various challenges by Johnson, on November 15, 2004, the court granted the government's November 3, 2004, renewed motion in Case No. CR 00-3034-MWB to dismiss, without prejudice, counts 1-5 and portions of count 7 of the superseding indictment. The government's goal in seeking to dismiss the charges or parts of charges in question was to eliminate the need for two juries or two trials and to prevent possible error, in light of a ruling of the Eighth Circuit Court of Appeals on interlocutory appeals that certain evidence is not admissible as to the counts of Case No. CR 00-3034-MWB that involve the alleged murders of five witnesses, but is admissible as to charges that involve the alleged murders of the same witnesses in Case No. CR 01-3046-MWB. As a result of the partial dismissal of the first indictment, the charges in Case No. CR 00-3034-MWB consisted of one count of aiding and abetting the solicitation of the murders of witnesses Cutkomp and Cobeen, in violation of 18 U.S.C. §§ 373(a)(1) and 2, and one count of conspiracy to interfere with witnesses Cutkomp and Cobeen, in violation of 18 U.S.C. § 371, but the latter charge no longer related to the murders of the other five witnesses, Nicholson, the Duncans, and DeGeus.
On December 8, 2004, the government filed a Second Superseding Indictment in Case No. CR 01-3046-MWB, which essentially consolidated the remaining counts in the two separate cases into a single indictment. Thus, Counts 1 through 5 of the Second Superseding Indictment charge the *1051 "conspiracy murders" of Nicholson, the Duncans, and DeGeus; Counts 6 through 10 charge the "CCE murders" of Nicholson, the Duncans, and DeGeus; new Count 11 charges aiding and abetting the solicitation of Dean Donaldson and Anthony Altimus to murder Timothy Cutkomp;[2] and new Count 12 charges conspiracy to solicit the murder of Daniel Cobeen, Timothy Cutkomp, and Special Agent John Graham.[3] On December 14, 2004, the government moved to dismiss the superseding indictment in Case No. CR 00-3034-MWB, because all charges against Johnson were then consolidated into a single charging document in Case No. CR 01-3046-MWB. Johnson concurred in the dismissal of that indictment on December 15, 2004. Therefore, on December 15, 2004, the court dismissed the superseding indictment in Case No. CR 00-3034-MWB, and denied as moot all motions pending it that case, leaving Case No. CR 01-3046-MWB as the only case against Johnson.
On January 11, 2005, the government moved to dismiss Counts 11 and 12 of the Second Superseding Indictment in Case No. CR 01-3046-MWB, stating that the government no longer had any intention of pursuing those charges. Johnson understandably concurred in the dismissal of those counts, because she had mounted several challenges to them. By order dated January 15, 2005, the court granted the government's motion to dismiss Counts 11 and 12 and also denied as moot several motions pertaining to those counts.[4] Thus, the only charges presently pending against Johnson are the charges of "conspiracy murder" in Counts 1 through 5 and the charges of "CCE murder" in Counts 6 through 10 of the Second Superseding Indictment in Case No. CR 01-3046-MWB.
B. The Co-Defendant's Trial
On August 30, 2001, the Grand Jury also handed down an indictment in a companion case, Case No. CR 01-3047-MWB, charging Dustin Lee Honken with seventeen charges that were essentially identical to the charges in the original two indictments against Johnson. As in Johnson's case, the government sought the death penalty on the five counts of "conspiracy murder" and the five counts of "CCE murder." Honken's case proceeded to trial first.
In Honken's case, the government moved for an "anonymous" jury, and the court granted that motion. Therefore, jurors' names, addresses, and places of employment, and the names of spouses and their places of employment, were not disclosed to the parties, their counsel, or the public, either before or after selection of the jury panel. However, each juror's community of residence and the "nature" of his or her employment, and the "nature" of his or her spouse's employment, were *1052 disclosed to the parties, their counsel, and the public.[5]
Jury selection began in Honken's case on August 17, 2004, and continued over twelve days until a jury was empaneled on September 8, 2004. The "merits phase" of the trial began that day and continued, usually four days a week, until the issue of Honken's guilt or innocence was submitted to the jury on October 11, 2004. The jury returned a verdict on October 14, 2004, finding defendant Honken guilty of all seventeen charges. The "penalty phase" of Honken's trial commenced on October 18, 2004, and concluded on October 21, 2004, at which time the jury began its "penalty phase" deliberations. An issue of improper contacts with a juror arose during the "penalty phase" deliberations. Ultimately, on October 25, 2004, the court excused one juror and substituted an alternate juror. The jury was then instructed to begin its "penalty phase" deliberations anew. On October 27, 2004, the jury rendered its "penalty phase" verdict, finding that a sentence of life imprisonment should be imposed upon Honken for the murders of Greg Nicholson, Lori Duncan, and Terry DeGeus, but that a sentence of death should be imposed for the murders of Amber and Kandi Duncan. The jury contact issue and the verdicts, in both the "merits phase" and the "penalty phase," garnered considerable additional media coverage.
On December 16, 2004, the court heard evidence in support of post-trial motions in Honken's case. However, briefing and argument on those post-trial motions are not yet complete and the court has not yet issued any ruling on those motions.
C. The Pretrial Motions In Johnson's Case
The court and the parties agreed to a deadline of January 7, 2005, for pretrial motions in this case. However, to expedite the orderly and timely resolution of pretrial motions, the court set an interim deadline of December 7, 2004, for a "first round" of pretrial motions, with the original deadline of January 7, 2005, for a "second round" of motions. At a hearing in this case on December 20, 2004, the court heard all pretrial motions that had been filed on or before December 7, 2004. The court entered an order resolving those motions on January 3, 2005.
As the court and the parties had anticipated, several more pretrial motions were filed on or before the "second round" deadline of January 7, 2005. More specifically, the motions now before the court are the following: (1) the defendant's December 8, 2004, Motion To Strike Death Penalty (docket no. 230); (2) the defendant's December 10, 2004, Motion In Limine Re: Prior Determinations Of Guilt And Punishment Re: Dustin Honken (docket no. 234); (3) the defendant's December 23, 2004, Motion For Bill Of Particulars On Counts 1-12 (docket no. 253), to the extent that the motion pertains to the remaining Counts, Counts 1 through 10; (4) the defendant's December 23, 2004, Motion To Strike Allegations Contained In Counts 6-10 (docket no. 254); (5) the government's December 29, 2004, Motion To Permit Victim Witnesses To Observe The Guilt Phase Of Trial (docket no. 258); (6) the government's December 29, 2004, Motion For Use Of Witness Photographs During Arguments (docket no. 259); (7) the government's December 29, 2004, Motion For Pretrial Ruling Regarding Admissibility Of Audio Recordings (docket no. 260); (8) the government's December 30, 2004, Motion For Equal Number Of Peremptory Challenges And Request For Pretrial Ruling (docket no. 261); (9) the government's January *1053 6, 2005, Motion For A Court Ordered Mental Examination Of Defendant, And Related Matters (docket no. 270); and (10) the defendant's January 7, 2005, Motion To Trifurcate Proceedings (docket no. 274). All of the motions were duly resisted.
By order dated January 11, 2005, the court set a hearing for January 27, 2005, on all motions filed on or before January 7, 2005. At the hearing, the government was represented by Assistant United States Attorney C.J. Williams in Cedar Rapids, Iowa, and Assistant Iowa Attorney General Thomas Henry Miller in Des Moines, Iowa. Defendant Angela Johnson was personally present at the hearing and was represented by Alfred E. Willett of Terpstra, Epping & Willett in Cedar Rapids, Iowa; Dean A. Stowers of Rosenberg, Stowers & Morse in Des Moines, Iowa; and Patrick J. Berrigan of Watson & Dameron, L.L.P., in Kansas City, Missouri. Neither party requested the closure of any part of the hearing or the sealing of any part of the ruling on the "second round" of pretrial motions.
II. LEGAL ANALYSIS
The court will address each of the pending motions in turn, although not necessarily in the order in which those motions were filed. Instead, the court will begin with the motions filed by the government, then turn to the motions filed by the defendant.
A. The Government's Motion For Victim Witnesses To Be Present During Trial
The first motion the court will address is the government's December 29, 2004, Motion To Permit Victim Witnesses To Observe The Guilt Phase Of Trial (docket no. 258). In that motion, the government requests that the court allow all "victim witnesses" to be present during the "merits phase" of the trial, including "victim witnesses" who may testify during the "merits phase." Johnson resisted this motion on January 7, 2005 (docket no. 273). The government filed a supplement to its motion on January 16, 2005 (docket no. 285), citing additional statutory authority for the presence of the "victim witnesses." Johnson filed no written response to the government's supplement, although she did respond at the hearing on January 27, 2005.
1. Arguments of the parties
The government contends that a number of family members of the murder victims are likely to testify in the "penalty phase" of this matter regarding the impact on their families of the offenses charged. The government contends, further, that some of the family members are also expected to testify during the "merits phase" concerning discrete factual events surrounding the disappearance of the murder victims and to identify certain clothing and other items recovered during various searches.
In its original motion, the government contended that, pursuant to 18 U.S.C. § 3510(b), "victim witnesses" cannot be excluded from any of the proceedings in this capital case. In her resistance, Johnson asserted that § 3510(b) is inapplicable to this prosecution pursuant to Title 21.
In its supplement, filed after Johnson's resistance, the government changed the basis for its motion. The government acknowledges that § 3510(b) is only directly applicable to capital prosecutions pursuant to Title 18. The government now asserts that, since filing its original motion, it has learned of provisions of the Justice For All Act of 2004, codified at 18 U.S.C. § 3771, which are applicable here. The government contends that several "victim witnesses," whom it now identifies by name and relationship to the alleged murder victims, *1054 fall within the statutory definition of "victims" in 18 U.S.C. § 3771(e). The government also asserts that § 3771(a)(3) expressly provides such "victims" with a right not to be excluded from the proceedings in this case, unless the court finds "by clear and convincing evidence" that the testimony of such "victims" would be "materially altered" by hearing other testimony. The government contends that Johnson cannot meet the heavy burden to show that the "victim witnesses" here will be so affected. The government also contends that the "victim witnesses" here are also excepted from the sequestration provisions of Rule 615, because they are authorized to be present at the proceedings by § 3771. Therefore, on the basis of different statutory authority, the government reiterates its request that "victim witnesses" be allowed to be present during the "merits phase" of the trial, even if they are likely to be witnesses in either the "merits phase" or the "penalty phase." At the hearing on January 27, 2005, the government added that there was little likelihood that any testimony during the "merits phase" or "penalty phase" of Johnson's trial could materially alter the testimony of the "victim witnesses," because the "victim witnesses" have heard essentially all of the evidence already, because they were present at all stages of Dustin Honken's trial.
At the hearing on January 27, 2005, Johnson acknowledged that the law has changed with the passage and effective date of 18 U.S.C. § 3771. Therefore, she offers no resistance to the government's motion to the extent that it relies on § 3771.
2. Analysis
a. Consideration of the government's supplemental argument
The government's assertion of the Justice For All Act of 2004 as a basis for the relief it requests did not appear in its original motion or brief. Indeed, the government did not assert that basis for relief until after Johnson had already responded to the government's original motion. Thus, at first glance, the government's assertion of the Justice For All Act of 2004 as a basis for relief is a new argument presented for the first time in what appears to be a "reply brief." Ordinarily, inclusion of a new ground for relief in a reply brief is improper as a matter of motion practice in this court, see N.D. IA. L.R. 7.1(g); Lorenzen v. GKN Armstrong Wheels, Inc., 345 F. Supp. 2d 977, 992 n. 4 (N.D.Iowa 2004); Baker v. John Morrell & Co., 263 F. Supp. 2d 1161, 1169 n. 1 (N.D.Iowa 2003), and, indeed, in this circuit. See Republican Party of Minn. v. Kelly, 247 F.3d 854, 881 (8th Cir.2001) ("It is well established that issues not argued in an opening brief cannot be raised for the first time in a reply brief," citing United States v. Vincent, 167 F.3d 428, 432 (8th Cir.), cert. denied, 528 U.S. 848, 120 S. Ct. 124, 145 L. Ed. 2d 105 (1999); South Dakota Mining Ass'n v. Lawrence County, 155 F.3d 1005, 1011 (8th Cir.1998); United States v. Davis, 52 F.3d 781, 783 (8th Cir.1995); French v. Beard, 993 F.2d 160, 161 (8th Cir.1993), cert. denied, 510 U.S. 1051, 114 S. Ct. 706, 126 L. Ed. 2d 672 (1994)). However, in this case, the court finds that the government intended its "Supplemental Memorandum" to its motion as precisely that, a "supplement," rather than a "reply." Indeed, labeling the filing as a "Supplemental Memorandum" and filing it prior to the deadline expressly established by the court for responses to the "second round" of pretrial motions invited Johnson to respond to the additional arguments therein. Johnson has also had adequate time since the filing of the government's "Supplemental Memorandum" to file a response or to seek leave to do so, if she was in doubt about her ability to respond under the applicable *1055 rules or the briefing schedule. Indeed, she conceded at the hearing on January 27, 2005, that the new authority cited by the government is controlling here and affords the relief that the government sought in its motion. Under these circumstances, the court deems it appropriate to consider the government's "supplemental" ground for relief as well as its original ground.
b. Section 3510(b)
Johnson asserts, and the government all but concedes, that the authority on which it originally relied for relief, § 3510(b), is not directly applicable here. Section 3510(b) provides as follows:
(b) Capital cases. Notwithstanding any statute, rule, or other provision of law, a United States district court shall not order any victim of an offense excluded from the trial of a defendant accused of that offense because such victim may, during the sentencing hearing, testify as to the effect of the offense on the victim and the victim's family or as to any other factor for which notice is required under section 3593(a).
18 U.S.C. § 3510(b). Thus, § 3510(b) contemplates the testimony of "victim witnesses" about matters for which notice is required under § 3593(a). However, section 3593(a) is not at issue in this death-penalty prosecution pursuant to 21 U.S.C. § 848. The court finds that it need not consider the validity of the government's analogy between the applicable notice provision here, 21 U.S.C. § 848(h), and 18 U.S.C. § 3593(a), because there is, instead, another statutory provision that is directly applicable and dispositive of the government's motion.
c. Section 3771
As the government suggests in its "Supplemental Memorandum," the provisions of the Justice For All Act of 2004, codified at 18 U.S.C. § 3771, are directly applicable here and do provide for the relief the government seeks. Section 3771 provides "crime victims" with certain rights during public court proceedings and parole proceedings involving the alleged perpetrator of a crime against them. See 18 U.S.C. § 3771. A "crime victim" is defined as "a person directly and proximately harmed as a result of the commission of a Federal offense or an offense in the District of Columbia." 18 U.S.C. § 3771(e). The statute provides, further, that "[i]n the case of a crime victim who is ... deceased, the legal guardians of the crime victim or the representatives of the crime victim's estate, family members, or any other persons appointed as suitable by the court, may assume the crime victim's rights under this chapter, but in no event shall the defendant be named as such guardian or representative." Id.
In this case, the government has identified the following "victim witnesses": Terry DeGeus's father, mother, sister, two brothers, ex-wife, and daughter; Lori Duncan's father, mother, brother, and sister, who are, respectively, Kandi and Amber Duncan's grandfather, grandmother, uncle, and aunt; Kandi and Amber Duncan's father, other grandfather, and other grandmother; and Greg Nicholson's ex-wife, who is the mother of his children, and two daughters. Johnson does not dispute, and the court expressly finds, that each of these persons is either "a person directly and proximately harmed as a result of the commission of" one or more of the federal offenses charged against Johnson, that is, the murders of Greg Nicholson, Lori Duncan, Kandi Duncan, Amber Duncan, or Terry DeGeus, or that, owing to the deaths of these alleged murder victims in this case, the murder victims' family members identified by the government are "representatives of the crime victim's estate" or "family members." Therefore, these persons *1056 qualify for the rights afforded by § 3771.
Turning to those rights, 3771(a)(3) provides that a "crime victim" has "[t]he right not to be excluded from any such public court proceeding, unless the court, after receiving clear and convincing evidence, determines that testimony by the victim would be materially altered if the victim heard other testimony at that proceeding." 18 U.S.C. § 3771(a)(3) (emphasis added). The statute provides, further, that "[b]efore making a determination described in subsection (a)(3), the court shall make every effort to permit the fullest attendance possible by the victim and shall consider reasonable alternatives to the exclusion of the victim from the criminal proceeding. The reasons for any decision denying relief under this chapter shall be clearly stated on the record." 18 U.S.C. § 3771(b). Johnson has made no attempt to show that any of the testimony of any of the identified "victim witnesses" would be "materially altered" by hearing other testimony in this case. 18 U.S.C. § 3771(a)(3). Furthermore, as the government suggests, each of these witnesses appears likely to testify during the "merits phase" only as to discrete factual events surrounding the disappearance of the murder victims and to identify certain clothing and other items recovered during various searches, which are not matters susceptible to "material alteration" from hearing the testimony of other witnesses. Also as the government suggests, Rule 615 of the Federal Rules of Evidence does not require sequestration of these "victim witnesses," because those "victim witnesses" are "person[s] authorized by statute [§ 3771] to be present" during the proceedings. FED. R. EVID. 615.
Therefore, the government's December 29, 2004, Motion To Permit Victim Witnesses To Observe The Guilt Phase Of Trial (docket no. 258), as supplemented on January 16, 2005 (docket no. 285), will be granted.
B. The Government's Motion To Use Witness Photographs During Arguments
The second motion the court will address is the government's December 29, 2004, Motion For Use Of Witness Photographs During Arguments (docket no. 259). In this motion, which anticipates an issue that arose during the trial of co-defendant Dustin Honken, the government seeks leave to mount 8.5" × 11" photographs of witnesses, as they appeared while testifying, on 5' × 5' boards to be displayed in the background in the courtroom during the government's closing arguments in the "merits" and "penalty" phases. The government also explains that its counsel may detach individual photographs to show the jury while referring to the testimony of particular witnesses. Johnson resisted this motion on January 7, 2005 (docket no. 272). At the hearing on January 27, 2005, the government added that it was exploring the feasibility of using Power Point or some kind of trial presentation software to show the witnesses' photographs. These and other methods for providing the jurors with photographs of the witnesses, including making court employees responsible for taking the photographs and providing them to the parties and the jurors, and whether such photographs should be available to the jurors during both trial and deliberations, were discussed in the course of the hearing and will be considered below.
1. Arguments of the parties
In support of this motion, the government contends that the parties are likely to call more than seventy-five witnesses in a trial likely to last more than three months. Consequently, the government contends that showing the jurors photographs *1057 of witnesses, as they appeared while testifying, will make it easier for jurors to recall the witnesses' testimony. The government also contends that showing the jurors the number of witnesses is a persuasive way of demonstrating to the jury the amount of evidence pointing to Johnson's guilt and the appropriateness of the death penalty for her crimes. The government argues, further, that use of such photographs falls within the wide latitude afforded parties in closing arguments. Finally, the government asserts that Johnson would also be entitled to use the photographs to refresh jurors' recollections of testimony and to argue, in opposition to the government's suggestions about the import of the number of witnesses, that the "quality" of evidence is more important than mere "quantity" of evidence.
Johnson, however, resists this motion. Johnson contends that the government's proposed use of the photographs to demonstrate the supposed "strength" of the evidence and the appropriateness of the death penalty is "inappropriate and inconsistent with the law." However, Johnson does not cite any applicable law on this point in her resistance, although in a subsequent paragraph she cites O'Malley, Federal Jury Practice and Instructions (5th ed. 2000) § 14.16, which might support her contention. Johnson's argument continues with the assertion that "[t]he trial of a defendant is not a numbers or pictures game," and that the court should so instruct the jury. To the extent that the court may nevertheless conclude that it is appropriate for the government to use the photographs of witnesses, Johnson contends that she should be afforded the same privilege.
At the hearing on January 27, 2005, the court proposed that any potential prejudice could be reduced by having a court employee, rather than a government or defense representative, take the witnesses' photographs and provide those photographs to both parties and jurors. The court asked the parties to consider the issue of whether or not a notebook of all of the witnesses' photographs could be provided to the jury as a demonstrative exhibit and the further issue of whether that notebook (or a notebook for each juror) could be provided to the jurors during their deliberations. Although the government generally concurred in the court's suggestion, Johnson registered some initial resistance to the idea of the jurors each receiving a notebook of witness photographs and to the idea of allowing jurors to have access to any such notebook or notebooks during their deliberations. Therefore, the court requested further briefing, initiated by the government, on these issues.
On January 28, 2005, the government filed a supplemental memorandum in support of its request to use witnesses' photographs during arguments. The government contends in its supplemental memorandum that the court has discretion to send "demonstrative" or "summary" exhibits to the jury during deliberations and that the photographs of witnesses are such demonstrative or summary exhibits, because they would aid the jury to understand and recall evidence already admitted, that is, the witnesses' testimony. The government also asserts that if the photographs are taken and compiled by court personnel, there is little chance that notebooks of witnesses' photographs will be taken as conveying any particular meaning to the jurors. Nevertheless, the government suggests a limiting instruction to advise the jurors that the photographs are provided to them only for the purpose of reminding them of the identity of the witnesses and their testimony, and explaining that a witness's testimony, not *1058 his or her appearance, is the evidence that the jurors are to consider.
Johnson did not take advantage of the opportunity to file a supplemental brief on this issue.
2. Analysis
a. Latitude and discretion
The government contends that its proposed use of the photographs of witnesses falls within the wide latitude parties should be afforded in making closing arguments. The government is correct that the district court "may properly grant counsel great latitude in making closing arguments." United States v. Kindle, 925 F.2d 272, 278 (8th Cir.1991) (citing United States v. Felix, 867 F.2d 1068, 1075 (8th Cir.1989), and United States v. Lewis, 759 F.2d 1316, 1350 (8th Cir.1985)). On the other hand, the Eighth Circuit Court of Appeals "afford[s] district courts wide latitude in controlling closing arguments." United States v. Warfield, 97 F.3d 1014, 1021 (8th Cir.1996) (citing United States v. McGuire, 45 F.3d 1177, 1189 (8th Cir.), cert. denied sub nom. Mandacina v. United States, 515 U.S. 1132, 115 S. Ct. 2558, 132 L. Ed. 2d 811 (1995)). Thus, whatever latitude the government may have in closing arguments is limited by the court's discretion to control the closing arguments.
The government also contends that the photographs may be used during trial and sent to the jury, because they are either "summary" or "demonstrative" exhibits, even if they are not necessarily admissible. "[T]he trial judge is vested with discretion to determine whether exhibits shall be sent to the jury," United States v. Lewis, 759 F.2d 1316, 1329 n. 6 (8th Cir.1985), although it is the "general rule [that] exhibits should not be sent to the jury room which have not been admitted." United States v. Warner, 428 F.2d 730, 738 (8th Cir.1970). Thus, the court must determine whether or not the photographs of witnesses are "summary" or "demonstrative" exhibits, and if so, exercise its discretion to determine what use, if any, may be made of the photographs during the trial and deliberations.
b. "Summary" exhibits
The government argues that the photographs of witnesses are "summary" exhibits, because they would aid the jury to understand and recall evidence already admitted, that is, the witnesses' testimony. Some time ago, in United States v. Lewis, 759 F.2d 1316 (8th Cir.1985), the Eighth Circuit Court of Appeals explained the nature of summary exhibits as follows:
Summary exhibits are explicitly authorized by Fed.R.Evid. 1006; this Court has found them particularly useful to help triers of fact understand complex factual issues. Boston Securities, Inc. v. United Bonding Ins. Co., 441 F.2d 1302, 1303 (8th Cir.1971). The charts or summaries and any assumptions that they include must be based upon evidence in the record. United States v. Diez, 515 F.2d 892, 905 (5th Cir.1975), cert. denied, 423 U.S. 1052, 96 S. Ct. 780, 46 L. Ed. 2d 641 (1976).
Lewis, 759 F.2d at 1329 n. 6. Rule 1006, to which the court referred in Lewis, in turn provides as follows:
The contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at reasonable time and place. The court may order that they be produced in court.
FED. R. EVID. 1006. This court finds that the photographs of witnesses at issue here do not fit comfortably into the definition of "summary" exhibits in Rule 1006. The *1059 witnesses' testimony, which the government contends the photographs merely "summarize," does not consist of "voluminous writings, recordings, or photographs," nor are the photographs of the witnesses the sort of "chart, summary, or calculation" that the rule appears to contemplate. Id. Thus, the court finds that Rule 1006, standing alone, is insufficient to support the use of photographs of witnesses during closing arguments or jury deliberations.
c. "Demonstrative" exhibits
Although the court is not convinced that the photographs of witnesses are "summary" exhibits, the court readily finds that such photographs are "demonstrative" exhibits intended and likely to assist the jury in remembering the names and testimony of the witnesses. Cf. United States v. De Peri, 778 F.2d 963, 979 (3d Cir.1985) (a chart was a "demonstrative aid" because it helped the jury "remember the names and positions of the defendants").
The Rules of Evidence are silent on the use and admissibility of "demonstrative" exhibits. Nevertheless, the Eighth Circuit Court of Appeals has explained that district courts have "virtually unfettered discretion to regulate the use of ... non-evidentiary devices, either generally or to achieve procedural fairness and regularity in a particular case." United States v. Crockett, 49 F.3d 1357, 1362 (8th Cir.1995) (considering the use of transparencies to help jurors recall the testimony of witnesses). To structure that discretion, courts have used a balancing test, balancing probative value against potential prejudice, as Rule 403 provides, to determine whether "demonstrative" exhibits may be used at trial. United States v. Fauls, 65 F.3d 592, 596 (7th Cir.1995) (applying such a balancing test); United States v. Gaskell, 985 F.2d 1056, 1061 & n. 2 (11th Cir.1993) (same, also noting that "[s]everal circuits have recognized that demonstrative exhibits tend to leave a particularly potent image in the jurors' minds") (citations omitted). Similarly, some time ago, the Tenth Circuit Court of Appeals used a balancing of probative value and potential for unfair prejudice to determine whether demonstrative exhibits could be used during deliberations, as well as during trial. The court reiterated its prior holdings "that it is within the discretion of the Trial Court, absent abuse working to the clear prejudice of the defendant, to permit the display of demonstrative or illustrative exhibits admitted in evidence both in the courtroom during trial and in the jury room during deliberations." United States v. Downen, 496 F.2d 314, 320 (10th Cir.1974) (emphasis added) (citing Taylor v. Reo Motors, Inc., 275 F.2d 699 (10th Cir.1960) ; Ahern v. Webb, 268 F.2d 45 (10th Cir.1959) ; Millers' National Insurance Company, Chicago, Illinois v. Wichita Flour Mills Company, 257 F.2d 93 (10th Cir.1958); Carlson v. United States, 187 F.2d 366 (10th Cir.1951)). The court then held "that the submission of papers, documents or articles, whether or not admitted in evidence, to the jury for view during trial or jury deliberations, accompanied by careful cautionary instructions as to their use and limited significance, is within the discretion accorded the Trial Court in order that it may guide and assist the jury in understanding and judging the factual controversy." Id. at 321 (emphasis added).
In addition, if demonstrative exhibits are used at trial, courts have recognized the propriety of limiting instructions. Crockett, 49 F.3d at 1362 (the trial court's limiting instructions regarding demonstrative transparencies helped "to cure any undue influence the transparencies might have had"); Downen, 496 F.2d at 321 (the use of demonstrative exhibits is within the discretion of the court when, inter alia, the exhibits are "accompanied by careful cautionary instructions as to their use and *1060 limited significance"). For example, courts may instruct that jurors should rely on their own recollections, not the demonstrative exhibit, see Crockett, 49 F.3d at 1362, and that such "demonstrative" exhibits are not "independent evidence," but instead are no better than the evidence on which they are based. See, e.g., United States v. Bakke, 942 F.2d 977, 985-86 (6th Cir.1991) (approving the district court's refusal to admit demonstrative exhibits into evidence and the district court's limiting instruction on the use the jury could make of such exhibits).
Because the court concludes that the photographs of the witnesses are "demonstrative" exhibits, the court must apply the balancing test explained above to determine what use, if any, may be made of the photographs during Johnson's trial and jury deliberations.
d. Use of the photographs here
Balancing the "probative value" or "usefulness" of the photographs at issue here against their potential for unfair prejudice, see Fauls, 65 F.3d at 596; Gaskell, 985 F.2d at 1061; see also Downen, 496 F.2d at 321 (demonstrative exhibits are admissible in the court's discretion "absent abuse working to the clear prejudice of the defendant"), the court finds that showing the jurors photographs of witnesses at the end of a trial that is likely to last three months or more and likely to involve well over one hundred witnesses would be an effective way to refresh the jurors' memories as to the testimony of particular witnesses. Indeed, in addition to allowing the jurors to take notes, which the court will do, the photographs may be the only way to refresh jurors' memories about testimony of particular witnesses. Thus, as to the one side of the scales in the court's balancing process, use of photographs of witnesses is likely to be of substantial benefit to the jurors' understanding of the case.
Johnson, however, contends that she would be prejudiced by use of the photographs of witnesses by an improper suggestion that sheer numbers of witnesses should point the jury toward a particular result, specifically, a determination of guilt and imposition of the death penalty. Johnson is correct that determination of the truth of a matter is not merely "a numbers game." As Justice Black explained more than half a century ago,
Our system of justice rests on the general assumption that the truth is not to be determined merely by the number of witnesses on each side of a controversy. In gauging the truth of conflicting evidence, a jury has no simple formulation of weights and measures upon which to rely. The touchstone is always credibility; the ultimate measure of testimonial worth is quality and not quantity. Triers of fact in our fact-finding tribunals are, with rare exceptions, free in the exercise of their honest judgment, to prefer the testimony of a single witness to that of many.
Weiler v. United States, 323 U.S. 606, 608, 65 S. Ct. 548, 89 L. Ed. 495 (1945). Nevertheless, some courts have recognized that, while the strength of evidence "does not necessarily depend upon the number of witnesses who testify,... the number is a legitimate consideration among other things, such as whether the single witness in opposition is an interested party." See, e.g., Woodard v. Fanboy, L.L.C., 298 F.3d 1261, 1266 n. 6 (11th Cir.2002). Thus, there is some value to demonstrating the number of witnesses testifying as to certain matters as well as some potential for significant unfair prejudice in doing so.
The court concludes that the potential for unfair prejudice of displaying all of the photographs continuously during what is likely to be a very lengthy closing argument (in Honken's case, both the government's *1061 and the defendant's closing arguments were over three hours long) substantially outweighs the legitimate purposes for doing so. See Weiler, 323 U.S. at 608, 65 S. Ct. 548. This is so, because the impact of seeing the photographs of all of the witnesses in a single display is more substantial than the impact of recalling that there were numerous witnesses. Cf. Gaskell, 985 F.2d at 1061 n. 2 (noting that "[s]everal circuits have recognized that demonstrative exhibits tend to leave a particularly potent image in the jurors' minds") (citations omitted).[6] Again owing to the potency of such a visual display, the court also finds that this potential for unfair prejudice could persist, even if the jury is properly instructed on the issue of the "number" of witnesses.[7] Therefore, the court will not permit the government to display all of the witnesses' photographs in a single *1062 display for any significant period of time certainly not for the full duration of a closing argument.
On the other hand, the court does not find the same sort of prejudice arising from a compilation of all of the witnesses' photographs in a notebook. To be sure, the notebook's increasing size will remind jurors of the number of witnesses, but the implication that a verdict should be reached on the basis of sheer numbers of witnesses is more remote than it would be from a panoramic display of the photographs of all of the witnesses. Moreover, the court finds that the potential for prejudice from such a compilation is likely to be considerably mitigated if the court itself is the source of the photographs and the notebook, and either party is free to use that notebook for demonstrative purposes indeed, fairness dictates that both parties must have the same free access to a notebook provided by the court for demonstrative purposes. Crockett, 49 F.3d at 1362 (the court may "regulate the use of... non-evidentiary devices ... to achieve procedural fairness and regularity in a particular case"). A limiting instruction regarding the proper use of the notebook would further mitigate any potential prejudice. Id. (the trial court's limiting instructions regarding demonstrative transparencies helped "to cure any undue influence the transparencies might have had"); Bakke, 942 F.2d at 985-86 (the potential prejudice of "demonstrative" exhibits was mitigated by an instruction that such exhibits were not "independent evidence," but instead were no better than the evidence on which they were based); Downen, 496 F.2d at 321 (the use of demonstrative exhibits is within the discretion of the court when, inter alia, the exhibits are "accompanied by careful cautionary instructions as to their use and limited significance"). Such an instruction would include a reminder that the testimony of the witnesses is evidence, but that the way witnesses appear in any photographs is not, cf. Bakke, 942 F.2d at 985-86 (noting that courts have recognized the propriety of instructing the jury that "demonstrative" exhibits are not "independent evidence," and are no better than the evidence on which they are based and approving the district court's limiting instruction to that effect); that the jurors should base their findings on their recollections of evidence, not on the appearance of witnesses in the photographs, cf. Crockett, 49 F.3d at 1362 (the trial court properly instructed jurors to base their findings on their recollection of the evidence, not on the transparencies showing the names and relationships of the defendants); and that a determination of the truth of a matter does not depend merely upon the number of witnesses testifying a certain way. See Weiler, 323 U.S. at 608, 65 S. Ct. 548.
In contrast, Johnson has not articulated any potential for unfair prejudice that would outweigh the probative value of refreshing jurors' memories about the testimony of a particular witness or group of related witnesses with photographs of those witnesses. The "numbers" argument does not apply to individual photographs and has less persuasiveness as to a group of photographs of related witnesses, and no other prejudice has been suggested. If any marginal prejudice could be asserted, the court again concludes that such prejudice would be sufficiently mitigated by the court, rather than a party, providing the witnesses' photographs and also providing an instruction that the witnesses' testimony, not their appearance or numbers, is the evidence before the jury.
Finally, in the present case, the court concludes that use of the photographs of *1063 witnesses as demonstrative exhibits is permissible during both the trial and the jury's deliberations. Downen, 496 F.2d at 321. It is perhaps during deliberations that jurors would be most assisted in recalling the testimony of particular witnesses by having the opportunity to see photographs of those witnesses. At the same time, the measures the court has described to mitigate any potential prejudice would not lose their efficacy just because the jurors are out of the court's and the parties' sight.
Therefore, the government's December 29, 2004, Motion For Use Of Witness Photographs During Arguments (docket no. 259) will be granted on the following conditions: (1) A court employee will take a photograph of each witness, as the witness appeared while testifying, either before the witness's testimony has begun (as part of the "swearing in" process) or after the witness's testimony has concluded (as part of the process of dismissing the witness); (2) the photographs will be printed and compiled in a notebook; (3) either party may use the photographs of witnesses in the course of closing arguments, in the "merits phase" and/or the "penalty phase," if any, to refresh jurors' memories about the testimony of any witness or group of related witnesses;[8] (4) no party will be permitted to display more than one witness's photograph at any given time, unless that party has previously requested permission of the court to display simultaneously the photographs of a group of witnesses who testified on related matters and has shown the proposed display to opposing counsel; (5) no party may display all of the witnesses' photographs in a single display without prior permission of the court and may only present such a display for a limited period of time, not for the full duration of a closing argument, although the length of time will be determined during a conference before closing arguments, when the court and the parties will be in a better position to estimate the duration of the arguments; and (6) unless a sufficient contrary showing is made upon the conclusion of all evidence in the "merits phase" of the trial, the notebook will be sent to the jury for the jury's use during deliberations.
C. The Government's Motion To Determine Admissibility Of Audio Recordings
Next, the court turns to the government's December 29, 2004, Motion For Pretrial Ruling Regarding Admissibility Of Audio Recordings (docket no. 260), which also reprises an issue that arose in Honken's case. This motion, pursuant to Rule 104(c) of the Federal Rules of Evidence, seeks a ruling on the admissibility during the "merits phase" or "penalty phase" of this trial of separate audiotape recordings of meetings between Dustin Honken and two men, Greg Nicholson (one of the murder victims) and Timothy Cutkomp (a sometime co-conspirator), as well as audiotape and videotape recordings of conversations between Angela Johnson, Dwayne White (a cooperating witness), and Special Agent Michael Mittan. Johnson resisted the motion on January 7, 2005 (docket no. 271).
1. Factual background
The recording of the conversation between Honken and Nicholson was made after Nicholson agreed to cooperate with law enforcement officers in their investigation of Nicholson's and Honken's drug-trafficking *1064 activities in 1993. The recording is of an incident on March 21, 1993, in which Nicholson delivered $3,000 in cash supplied by law enforcement officers to Honken, purportedly in payment for drugs. The conversation also includes a discussion of the possibility of Nicholson obtaining a kilogram of methamphetamine from Honken. Honken was arrested shortly after this conversation. The 1993 charges against Honken were dropped, largely because of the disappearance of the witnesses Honken has been convicted of killing and Johnson is charged with killing.
Honken and Cutkomp were arrested on new charges in 1996. While on pretrial release, Cutkomp agreed to cooperate with law enforcement officers and entered into a plea agreement indicating that he would do so. In May and June of 1996, Cutkomp met Honken while wearing a recording device and recorded his conversations with Honken.
The government has enhanced the recordings made by Nicholson and Cutkomp to reduce background noise and to make the recorded conversations more audible. However, the original tapes and enhanced tapes sent back to law enforcement officers in Iowa were inadvertently disposed of by a janitor and could not be found, despite an extensive search through the trash dump. The enhancement laboratory in Houston, Texas, had kept copies of the enhanced recordings as well as photographs of the original tapes. The government seeks leave to admit the enhanced copies at Johnson's trial.
The other recordings in question are audiotape and videotape recordings made in 1997 and 1998 of Angela Johnson's conversations with a cooperating witness and a law enforcement officer. The recordings consist of 14 conversations between Johnson and cooperating witness Dwayne White and Special Agent Mike Mittan of the Iowa Division of Narcotics Enforcement. Two the meetings were also videotaped. Two of the audiorecordings were enhanced because of excessive background noise.
The government asserts that it will present the testimony of one or more participants in each of the recorded conversations to the effect that the recordings accurately reflect the content of the conversations those participants had with either Honken or Johnson. The government also intends to play the recordings and to accompany them with transcripts.
2. Arguments of the parties
In support of this motion, the government argues that the recordings are admissible under the standards set forth in United States v. McMillan, 508 F.2d 101, 104 (8th Cir.1974). More specifically, the government argues that the devices used were capable of recording the conversations, not least because the recordings of the conversations plainly exist; the operators of the recording devices were competent, again largely because the recordings do, in fact, exist, and the operators will testify that they knew how to operate the equipment; the recordings are authentic and correct, because participants in the conversations will verify their accuracy; no changes, additions, or deletions have been made to the recordings, because officers will so testify, even though the recordings have been "enhanced" to make the conversations more audible; the recordings have been properly preserved, because there is no evidence to the contrary, and even the loss of some of the original recordings does not mean this requirement has not been satisfied, where enhanced copies of demonstrated authenticity are offered instead, and there is no evidence of bad faith in the loss of the originals; the speakers are identified, either by the government agents involved or *1065 by acquaintances of the speakers who recognize the voices; and the conversations were recorded in good faith, without inducement to Honken or Johnson, who were merely given the opportunity to speak or respond. The government also contends that the recordings of Nicholson's and Cutkomp's conversations with Honken are admissible as co-conspirator statements.[9]
Johnson resists admission of the recordings in question, again in a resistance all but devoid of citation of any supporting authority. The essence of her resistance, reiterated at the hearing, is that the foundational and evidentiary issues are not so clear that the court can resolve them pretrial. She acknowledges that there may not be any issue with regard to enhancement of certain recordings, as long as the jury is told that it is hearing enhanced recordings. However, she contends that, if it becomes apparent that the recordings have been enhanced to the degree that the jury is not hearing a recording that fairly and accurately portrays the surrounding noises that the participants in the recorded conversations would have been hearing, then she may object on the ground that the enhanced tapes inaccurately portray the audibility of the participants' statements to each other at the time of the recordings. She also expresses her "doubts" that "enhancements" rather than "duplicates" can be admitted as "copies" of the originals, where the original tapes no longer exist.
Assuming that foundational objections can be overcome at trial, Johnson argues, that the recordings of conversations in which she was not a party would still be inadmissible hearsay, because they do not satisfy any applicable hearsay exception or the requirements of the confrontation clause. She also argues that much of the recorded material is either not relevant or should be excluded pursuant to Rule 403 on the ground that any marginal relevance is outweighed by the potential for unfair prejudice, although she does not articulate what unfair prejudice would be at issue. Instead, she argues that the government's failure to provide the court with the tapes and transcripts means that the court cannot assess the admissibility of the recordings pretrial. Finally, Johnson argues that the recordings of conversations in which she participated are not relevant to any pending charges, but to the extent that they might be, they would tend to confuse the jury and are unfairly prejudicial, although she again fails to explain either the nature of the confusion or the potential for prejudice. She reiterates that, where the court does not have the recordings to review, the court cannot adequately determine the admissibility of the recordings.
3. Analysis
As the Eighth Circuit Court of Appeals recently reiterated, "The requirements for admitting tape-recorded information into evidence were set forth in United States v. McMillan, 508 F.2d 101, 103 (8th Cir.1974)." United States v. Wells, 347 F.3d 280, 288 (8th Cir.2003). In McMillan the Eighth Circuit Court of Appeals held as follows:
*1066 There must be a proper foundation for the introduction of the [recordings]. Those requirements include a showing: (1) That the recording device was capable of taking the conversation now offered in evidence; (2) That the operator of the device was competent to operate the device; (3) That the recording is authentic and correct; (4) That changes, additions or deletions have not been made in the recording; (5) That the recording has been preserved in a manner that is shown to the court; (6) That the speakers are identified; and (7) That the conversation elicited was made voluntarily and in good faith, without any kind of inducement.
McMillan, 508 F.2d at 103. Johnson does not appear to contend, as to any of the recordings that the government intends to offer in her case, that factors (1), (2), (6), or (7) are not satisfied. She does, however, resist a pretrial ruling on admissibility of the tapes on various "authenticity" grounds related to factors (3), (4), and (5), as well as relevance and hearsay grounds. The court agrees with Johnson that a final determination on the "McMillan factors" at issue cannot be made until the court is presented with both the recordings and evidence concerning the preservation and enhancement of the recordings.
However, the court can set the scene for determination of one issue, the question of the admissibility of "enhanced" copies when the original recordings are lost. The answer to this question breaks down into two separate inquiries: (1) What factors determine the necessary foundation for admissibility of "enhanced" recordings? and (2) Is an "enhanced" recording admissible when the "original" is lost? The court will consider these questions in turn.
In United States v. Calderin-Rodriguez, 244 F.3d 977 (8th Cir.2001), the Eighth Circuit Court of Appeals held that the "McMillan factors" apply to determination of the authenticity and admissibility of a digitally enhanced recording:
We see no distinction between the foundation required for the tape recorder and that for the digital enhancement program, which, from the point of view of a listener, simply improves the quality of the recording. If the capacity for digital enhancement were built into the tape recorder itself, rather than a separate step being required, the admissibility of the resulting tapes would clearly be governed by McMillan. There is nothing in the use of this separate device that should change our analysis.
Calderin-Rodriguez, 244 F.3d at 986. More specifically, the court applied the McMillan factors to the determination of the foundation for the "enhanced" recordings as follows:
The first requirement of McMillan, "that the recording device was capable of taking the conversation now offered in evidence," id., was amply satisfied in this case by testimony that Navarette had listened to the tapes before and after enhancement and he found the enhanced version to be "considerably more audible." See United States v. McCowan, 706 F.2d 863, 865 (8th Cir.1983) (per curiam) ("The very fact that the tape recordings exist establishes that the recording device was capable of picking up sounds and taking the conversation offered."); United States v. Roach, 28 F.3d 729, 733 (8th Cir.1994). Navarette's testimony that he had successfully used the software program about fifty times in the past also bolsters the conclusion that the program worked. The second requirement, that the operator of the device was competent to operate it, was satisfied by the same evidence. See McCowan, 706 F.2d at 865. ("Howard testified that he learned how to use the recorder on the day he made the tapes. *1067 This fact, and the fact that Howard successfully made the tape recordings, satisfied the competency requirement of the second element of the McMillan test.") The third and fourth McMillan requirements, that the recording is authentic and correct and that no changes, additions or deletions have been made, add a significant guarantee of trustworthiness. In this case, these requirements have been satisfied by the testimony of Officer Gardner, who listened to the original radio transmissions, that the tapes were accurate portrayals of the conversations. Although technically a "change" has been made by the digital enhancement, Navarette testified that it only changed the volume of sounds. Volume adjustment is commonly used in playing back recordings and is not legally significant. There is no dispute about the remaining McMillan requirements. We therefore conclude that there was an adequate foundation for admission of the tapes.
Id. at 986-87 (emphasis added). Thus, while the foundation for "enhanced" recordings depends upon the same factors as the foundation for "original" recordings, and the technical "change" in volume of sounds is not legally significant, if that is the extent of the "enhancement" here, determination of whether an adequate foundation for admissibility of the "enhanced" recordings has been laid depends upon the government's ultimate showing of supporting evidence. The court will not rule on the admissibility of the tapes pretrial on the basis of the government's pretrial representations as to these matters.
The Federal Rules of Evidence govern the second part of the question, which is whether an "enhanced" recording is admissible in place of a lost "original." Rule 1001 defines both what is an "original" of a writing or recording and what is a "duplicate." See FED. R. EVID. 1001(3) ("original") & (4) ("duplicate"). Here, the "enhanced" recordings are "duplicates" to the extent that they are the result of "electronic re-recording." FED. R. EVID. 1001(4). As the Eighth Circuit Court of Appeals held in Calderin-Rodriguez, mere "changes" in volume in an "enhancement" are not legally significant. Calderin-Rodriguez, 244 F.3d at 986-87. Thus, to the extent that the "enhancement" involved here consists of only a volume change, the "enhanced" recordings likely qualify as "duplicates."
Although the "original" is ordinarily required to prove the contents of a recording, see FED. R. EVID. 1002, "duplicates" are "admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original." FED. R. EVID. 1003. Johnson has not yet raised a "genuine question" about the authenticity of the "original" recordings or an issue concerning the fairness of admitting the "enhanced" recordings in lieu of the lost "originals," but neither has the court been provided with the "original" or "enhanced" recordings or other evidence necessary to assess the authenticity of the "original" recordings.
The court finds instructive the following discussion by the Eleventh Circuit Court of Appeals of the use of a transcript in the place of an original recording, which had been destroyed by the Spanish National Police:
The absence of the audiotapes containing the original recorded statements is troublesome. Nonetheless, we differ with Appellant's contention that the court should have excluded the transcriptions of the telephone conversations that occurred in Spain on best evidence grounds. Federal Rule of Evidence 1002 provides that "[t]o prove the content of a writing, recording, or photograph, *1068 the original writing, recording, or photograph is required, except as otherwise provided ... in these rules." The purpose of the best evidence rule is to prevent inaccuracy and fraud when attempting to prove the contents of a writing. Fed.R.Evid. 1001 advisory committee's note. However, where the original of a recording has been lost or destroyed, the original is not required and other evidence of its content is admissible, unless the proponent lost or destroyed the original in bad faith. FED.R.EVID. 1004(1). Once the terms of Rule 1004 are satisfied, the party seeking to prove the contents of the recording here, the government may do so by any kind of secondary evidence. See, e.g., United States v. Gerhart, 538 F.2d 807, 809 (8th Cir.1976) ; Jack B. Weinstein & Margaret A. Berger, 5 Weinstein's Evidence § 1004[01], at XXXX-X-XXXX-X (1993). Finally, the party against whom the secondary evidence is being offered bears the burden of challenging its admissibility. United States v. Garmany, 762 F.2d 929, 938 (11th Cir.1985), cert. denied, 474 U.S. 1062, 106 S. Ct. 811, 88 L. Ed. 2d 785 (1986).
Here, all of Rule 1004's requirements are met because the transcripts constituted "other evidence" of "the contents of ... recording[s]" that had been "lost or destroyed" through no fault of the government. See Fed.R.Evid. 1004(1). First, the prosecution was not at fault for the absence of the cassette tapes, which the Spanish National Police destroyed as part of routine procedure. Indeed, the prosecution never had any control of the tapes. Second, the transcripts constituted admissible best evidence because the transcripts were evidence of the contents of recordings, the misplaced or destroyed audiotapes. The two cases most directly on point both involving transcripts of conversations recorded on audiotapes support admission of the transcripts. In a negligence action, the Eighth Circuit held that where an original recording is missing, a transcript may be used to prove the content of the recording. See Wright v. Farmers Co-op, 681 F.2d 549, 553 (8th Cir.1982). In United States v. Maxwell, 383 F.2d 437 (2d Cir.1967), cert. denied, 389 U.S. 1043, 88 S. Ct. 786, 19 L. Ed. 2d 835 and cert. denied, 389 U.S. 1057, 88 S. Ct. 809, 19 L. Ed. 2d 856 (1968), with facts comparable to those of this case, the Second Circuit upheld the use of a transcript as secondary evidence where the recording from which the transcript derived had been accidentally erased and the drafter of the transcript testified to its accuracy. 383 F.2d at 442-43. Similarly, the transcripts here were admitted only after the original recordings could not be located due to standard procedures of the Spanish National Police, and the Spanish police officers who initially transcribed the recordings were cross-examined by Appellant's counsel. Moreover, we note that Appellant had ample opportunity to attack the transcripts' credibility before the jury. See United States v. Howard, 953 F.2d 610, 613 (11th Cir.1992) (per curiam) (suggesting that availability of monitoring agent at trial furthers purpose of best evidence rule to prevent fraud in proving contents of recordings because defendant may cross-examine agent's abilities and actions). Accordingly, the court properly admitted the transcripts into evidence.
United States v. Ross, 33 F.3d 1507, 1513-14 (11th Cir.1994) (footnotes omitted). In Johnson's case, this court finds no reason why an electronic "enhancement" should be any less acceptable as "secondary evidence" of the contents of lost recordings than a transcript, particularly where there appears to the court to be considerably less opportunity for "human error" to affect *1069 the accuracy of an electronic "enhancement" than there is for "human error" to affect a transcript.
The key to admissibility of the enhanced recordings at issue here, however, may be Rules 1004 and 1008. As the government contends, Rule 1004(1) provides for the admissibility of "other evidence of the contents of a ... recording ... if ... [a]ll originals are lost or have been destroyed, unless the proponent lost or destroyed them in bad faith." FED. R. EVID. 1004(1). The government has made at least a prima facie showing of good faith in the loss of the original recordings in question and Johnson has not yet asserted any basis for a finding of bad faith, although she may attempt to do so at trial, when the recordings are actually available to the court and the circumstances of the loss of the recordings is fully explored. Ultimately, however, the court believes that the question of whether the contents of the "enhanced" recordings correctly reflect the contents of the lost "originals" will be a question for the jury pursuant to Rule 1008. That rule provides, in pertinent part, as follows:
When the admissibility of other evidence of contents of ... recordings ... under these rules depends upon the fulfillment of a condition of fact, the question whether the condition has been fulfilled is ordinarily for the court to determine in accordance with the provisions of rule 104. However, when an issue is raised ... (c) whether other evidence of contents correctly reflects the contents, the issue is for the trier of fact to determine as in the case of other issues of fact.
FED. R. EVID. 1008. The court concludes that determination of whether or not the "McMillan factors" are satisfied, and whether or not the "enhanced" recordings are "duplicates" or adequate "secondary evidence" of the contents of lost recordings falls within the court's purview under Rule 1008, but none of these issues can be decided pretrial in the absence of the recordings themselves and evidence regarding them. On the other hand, also pursuant to Rule 1008, whether the "enhanced" recordings correctly reflect the contents of the lost originals is a matter for the jury. That determination, too, must await trial.
Because the court has reserved for trial the foundational questions presented, the court will likewise reserve the relevance and hearsay issues to which Johnson alludes. As to the latter issue, however, the court observes that the recordings may be conditionally admissible subject to either a "forfeiture by wrongdoing" or "co-conspirator" hearsay exception, as explained in its ruling on the "first round" of pretrial motions.
D. Government's Motion Concerning The Number Of Peremptory Challenges
The government's penultimate motion now before the court is its December 30, 2004, Motion For Equal Number Of Peremptory Challenges And Request For Pretrial Ruling (docket no. 261). This motion responds to the court's suggestion during the hearing on the "first round" of pretrial motions that it might provide Johnson with additional peremptory challenges to counteract the effects of pretrial publicity, if the court ultimately denies Johnson's motion for change of venue, and the court's invitation for the government to respond to that suggestion. Johnson resisted the government's motion on January 7, 2005 (docket no. 276), also asserting, inter alia, that Rule 24(b) violates equal protection, because it provides the parties in a death-penalty case with equal numbers of peremptory challenges, but provides defendants in non-capital cases with more challenges than the prosecution.
1. Arguments of the parties
In support of its motion, the government originally asserted that the court *1070 does not have the authority to grant a single defendant additional peremptory challenges, particularly in a death-penalty case. At the hearing, however, the government conceded that the court probably has the discretion to grant a single defendant additional peremptory challenges, but that doing so would be contrary to the provisions of Rule 24(b). The government points out that Rule 24 of the Federal Rules of Criminal Procedure authorizes 20 peremptory challenges for each side in a death-penalty case. That rule, the government contends, provides the defense with additional peremptory challenges only when there are multiple defendants. The government argues that the granting of a limited exception indicates that no other exceptions are contemplated by the rule. The government also points out that the portion of the rule granting the parties the same number of peremptory challenges in a death-penalty case, when the defendant is granted more peremptory challenges than the government is granted in other non-capital felony cases, plainly indicates an intention that the parties in a capital case have the same number of peremptory challenges, and that such a difference is justified by the fact that capital cases are different.
Moreover, the government asserts that, in a case in which the Eighth Circuit Court of Appeals upheld a trial court's decision to grant additional peremptory challenges to counteract pretrial publicity, the trial court had granted both the defendant and the government the same number of additional peremptory challenges. See United States v. Blom, 242 F.3d 799, 804 (8th Cir.2001). The government represents that it has found no case in which only the defendant was granted additional peremptory challenges to counteract pretrial publicity. The government also suggests that the problem of pretrial publicity is most effectively and properly addressed in the parties' exercise of challenges for cause and the court's rulings on those challenges. Therefore, the government requests that the court either adhere to the 20 peremptory challenges for both parties authorized by Rule 24 or, if the court increases the number of peremptory challenges owing to pretrial publicity, grant each party the same number of additional peremptory challenges.
In a response to the government's motion filed before the government dismissed Counts 11 and 12, Johnson contends that this case is both a capital and a non-capital case. Therefore, she contends that she is entitled to the 20 peremptory challenges for a capital case provided by Rule 24(b)(1) and the 10 peremptory challenges for a non-capital case provided in Rule 24(b)(2). She also contends that, particularly if venue is not changed, the court must craft a procedure that guarantees her constitutional right to a fair and impartial trial and that such a remedy would include granting her additional peremptory challenges. She believes that Blom is not to the contrary, because the pretrial publicity problem is one affecting her, not the government, not least because the government objects to a change of venue in her case. By opposing a change of venue, Johnson contends that the government has waived any argument that it should receive additional peremptory challenges. She also asserts that the court retains the discretion to grant the defendant more than the 20 peremptory challenges provided by Rule 24(b)(1), citing Amsler v. United States, 381 F.2d 37 (9th Cir.1967).
In addition, Johnson asserts an equal protection challenge to granting the government the same number of peremptory challenges, whether 20 or some other number. She contends that by granting the parties in capital cases equal numbers of peremptory challenges, but giving the defendants in non-capital cases more challenges *1071 than prosecutors, Rule 24(b) violates equal protection. She asserts that the difference in the treatment of capital and non-capital defendants under the rule should be subject to "strict scrutiny," as the difference implicates a fundamental right to a fair and impartial trial. She contends, however, that the rule fails whatever level of scrutiny the court determines is applicable, notwithstanding contrary authority in United States v. Tuck Chong, 123 F. Supp. 2d 559 (D.Haw.1999). She suggests that the remedy for the equal protection violation is to grant the government no more than 60% of the peremptory challenges granted to her.
2. Analysis
As the parties have noted, Rule 24 of the Federal Rules of Criminal Procedure provides that "[e]ach side has 20 peremptory challenges when the government seeks the death penalty." FED. R. CRIM. P. 24(b)(1). Because there are no non-capital charges remaining, the court need not entertain Johnson's argument that she is entitled to both the 20 peremptory challenges available in a death-penalty case, pursuant to Rule 24(b)(1), and an additional 10 peremptory challenges available in any "other felony case," pursuant to Rule 24(b)(2). Rule 24(b)(1) expressly authorizes the court to grant additional peremptory challenges only in multi-defendant cases, and only to the defendants. See FED. R. CRIM. P. 24(b). Thus, the question is whether the parties should have only the peremptory challenges authorized by Rule 24(b)(1) for a single-defendant capital case, or whether the court can and should authorize some larger number of strikes for one or both of the parties in this case.
The court finds some merit in the government's contention that Rule 24(b) expressly provides for additional peremptory challenges only in a multi-defendant case, so that additional peremptory challenges are not permitted in a single-defendant case. See FED. R. CRIM. P. 24(b). On the other hand, some time ago, at least two courts reviewed the failure of the trial court to grant an additional peremptory challenge to a single defendant in a criminal case only for abuse of discretion. See United States v. Bentley, 503 F.2d 957 (5th Cir.1974); United States v. LePera, 443 F.2d 810, 812 (9th Cir.), cert. denied, 404 U.S. 958, 92 S. Ct. 326, 30 L. Ed. 2d 275 (1971).[10] Moreover, as the government acknowledges, and this court noted in its ruling on the "first round" of pretrial motions, the Eighth Circuit Court of Appeals has expressly recognized that increasing the number of peremptory challenges may be an appropriate means for the court to counteract the problems of pretrial publicity in a single-defendant case. See United States v. Blom, 242 F.3d 799, 804 (8th Cir.2001). Therefore, the court concludes that it does have the discretion to increase the number of peremptory challenges in a single-defendant capital case above the number stated in Rule 24(b)(1).
The question then becomes whether the court can increase the strikes allocated to only one party or must give both parties the same number of additional strikes. Again, there is some merit to the government's reading of Rule 24(b)(1) as *1072 expressing an intent to give both parties in a single-defendant capital case the same number of peremptory challenges, which suggests that the court should maintain an equal number of additional peremptory challenges for both parties, as well. The government is also correct that, in Blom, the court approved the district court's decision to address pretrial publicity, in part, by increasing the number of peremptory challenges for each side. Blom, 242 F.3d at 804. On the other hand, there is some merit to Johnson's contention that she is the party most burdened by pretrial publicity, not least because the government has objected to a change of venue on that ground. The court does not agree with Johnson, however, that the government has waived a right to an equal number of peremptory challenges by resisting a change of venue on the basis of pretrial publicity. This is so, because the government's resistance is not necessarily based on a view that the pretrial publicity does not burden the government. Rather, the government continues to assert in this case that, notwithstanding the pretrial publicity and the ensuing difficulty of picking an unbiased jury in this district, the citizens of this district have a right to see justice done in a trial in this district. Therefore, the court begins with a presumption, drawn from Rule 24(b) and Blom, that, if the court increases the peremptory challenges available to the parties in this single-defendant capital case, it should grant both parties the same number of additional peremptory challenges. That presumption has not yet been rebutted by any of Johnson's arguments considered above.
Johnson contends, however, that granting the government the same number of peremptory challenges as the defendant in a capital case, pursuant to Rule 24(b)(1), violates her right to equal protection, where defendants in "other felony cases" are entitled to more strikes than the government, pursuant to Rule 24(b)(2). She asserts, further, that "strict scrutiny" must be applied to this "equal protection" challenge. The court rejects Johnson's "equal protection" challenge.
First, as Johnson acknowledges, in United States v. Tuck Chong, 123 F. Supp. 2d 559 (D.Haw.1999), the United States District Court for the District of Hawaii rejected precisely the same kind of "equal protection" challenge that she asserts here. In Tuck, the court concluded that "an equal protection analysis is not applicable" to peremptory challenges under Rule 24(b), because the rule does not differentiate among defendants, but among offenses. Consequently, the court concluded that "defendants charged with a capital offense and those charged with an offense punishable by imprisonment for more than one year or by fine or both, all receive the same number of peremptory challenges." Tuck Chong, 123 F.Supp.2d at 562. Next, the court concluded that, even if the statute differentiated between capital and non-capital defendants, the classification was not a suspect one, nor are peremptory challenges a fundamental right. Therefore, the court concluded that Rule 24(b) need only satisfy "rational basis scrutiny," rather than "strict scrutiny." Id. The court held that the rule satisfied "rational basis scrutiny." The court explained that "[c]apital defendants require different treatment with regard to peremptory challenges because it is necessary to draw a jury that is impartial not only to the particular defendant, but also [one that] can impartially weigh the evidence in determining whether a sentence of death is appropriate." The court also determined that granting both a capital defendant and the prosecution the same number of challenges, but granting non-capital defendants more challenges than the prosecution, served the legitimate government purpose of "obtain[ing] a jury that is able to impartially weigh the evidence in determining *1073 whether a death sentence is appropriate," but in a non-capital case, "death sentencing is not an issue; thus, a lower number of peremptory challenges for both sides is appropriate." Id. at 563.
Although this court does not find the analysis in Tuck Chong entirely satisfactory, this court does concur in the ultimate conclusion in that case. Specifically, this court is not convinced that Rule 24(b) distinguishes only between offenses rather than defendants. Even though all defendants in one category, either capital or non-capital, are granted the same number of peremptory challenges, it seems that the issue for "equal protection" purposes is why the defendants in the two different categories are given different "protection" in the form of different numbers, and different ratios, of peremptory challenges. The Advisory Committee provided no explanation of why Rule 24(b) authorizes the same number of peremptory strikes for each side in the trial of a capital defendant, but authorizes more for the defendant than for the prosecution in "other felony cases." Nevertheless, this court has found no case, and Johnson cites none, holding that capital defendants are a suspect class. Thus, one basis for "strict scrutiny" is unavailable. See, e.g., City of New Orleans v. Dukes, 427 U.S. 297, 96 S. Ct. 2513, 49 L. Ed. 2d 511 (1976) (per curiam) ("Unless a classification trammels fundamental personal rights or is drawn upon inherently suspect distinctions such as race, religion, or alienage, our decisions presume the constitutionality of the statutory discriminations and require only that the classification challenged be rationally related to a legitimate state interest."). Therefore, unless another basis for "strict scrutiny" can be shown, this court agrees with the court in Tuck Chong that an "equal protection" challenge to Rule 24(b) of the sort presented here is only subject to "rational basis scrutiny." See Tuck Chong, 123 F.Supp.2d at 562.
Johnson does asserts that Rule 24(b) implicates her right to a fair and impartial jury, which she contends is a "fundamental right" entitling her to "strict scrutiny" of her "equal protection" challenge. See Dukes, 427 U.S. at 297, 96 S. Ct. 2513 (impingement on a fundamental right invokes strict scrutiny). There is no "constitutional" right to peremptory challenges, although the Supreme Court has held that such challenges constitute a "necessary part of trial by jury." See Swain v. Alabama, 380 U.S. 202, 219, 85 S. Ct. 824, 13 L. Ed. 2d 759 (1965); accord Ross v. Oklahoma, 487 U.S. 81, 88, 108 S. Ct. 2273, 101 L. Ed. 2d 80 (1988) ("We have long recognized that peremptory challenges are not of constitutional dimension. They are a means to achieve the end of an impartial jury."). Thus, peremptory challenges are one means of attempting to ensure the defendant's "fundamental right" of a fair trial, but peremptory challenges do not, of themselves, have a constitutional status. Johnson does not explain, nor could she do so convincingly, how granting the parties the same number of peremptory challenges somehow undermines her right to a fair trial, such that the rule impinges on the fundamental right she has identified. Therefore, her conclusory assertion that "strict scrutiny" should apply here and her equally conclusory assertion that Rule 24(b) fails equal protection under the "strict scrutiny" standard (or any other standard) are both unconvincing.
Therefore, because Johnson's "equal protection" challenge is unavailing, and the presumption that the parties in a single-defendant capital case should have the same number of peremptory challenges has not been overcome, the government's December 30, 2004, Motion For Equal Number Of Peremptory Challenges And Request For Pretrial Ruling (docket no. 261) will be granted to the extent that, if the court determines that pretrial publicity *1074 or other considerations warrant granting additional peremptory challenges beyond those expressly authorized by Rule 20(b)(1), the court will grant both parties the same number of additional peremptory challenges.
E. The Government's Motion For Court-Ordered Mental Examination Of The Defendant
The last motion by the government currently before the court is the government's January 6, 2005, Motion For A Court Ordered Mental Examination Of Defendant, And Related Matters (docket no. 270). In this motion, the government seeks an order (1) requiring Johnson to submit to an examination by one or more government experts; (2) requiring her to provide the government with a supplemental notice identifying (a) the nature of any mental disease or defect upon which she has been interviewed, examined, or tested; (b) the kinds of mental health professionals who have interviewed, examined, or tested her; and (c) the specific nature of any testing that the defense experts have performed; and (3) continuing the deadline for the government to notify the defendant of any rebuttal experts it intends to use on this issue until ten days after Johnson provides a meaningful supplemental notice. Johnson responded to this motion on January 18, 2005 (docket no. 294), resisting only the second item of relief sought by the government.
1. Background
In its motion, the government explains that on December 20, 2004, Johnson provided the lead prosecutor with a handwritten notice pursuant to Rule 12.2(b) of the Federal Rules of Criminal Procedure, the body of which states the following:
U.S. v. Angela Johnson
Defense Mental Health Experts: Penalty Phase
Dr. William S. Logan, M.D. (psychiatrist)
Dr. Michael Gelbort, Ph.D. (nueropsychologist [sic])
Dr. Marilyn Hutchinson, Ph.D. (psychologist)
Dr. Logan and Dr. Hutchinson are in Kansas City. Dr. Gelbort works in Chicago.
Government's Motion For A Court Ordered Mental Examination Of Defendant, And Related Matters (docket no. 270), Exhibit 1. The government represents that, along with this handwritten notice, Johnson's counsel stated that Johnson had been interviewed by one or more of these experts, but that no "testing" had occurred to date.
Subsequently, on January 3, 2005, Johnson filed a Defense Designation Of Expert Witnesses, which states the following:
The defense designates the following as expert witnesses, all of whom, pending budgetary approval, are expected to testify in the penalty phase of Ms. Johnson's trial on issues regarding her mental health:
Dr. Marilyn Hutchinson, Ph.D. Kansas City, Missouri
Dr. Michael Gelbort, Ph.D. Chicago, Illinois
Dr. William S. Logan, M.D. Kansas City, Missouri
Dr. Mark D. Cunningham, Ph.D. Lewisville, Texas
Dr. Cunningham may also testify regarding issues of prison security and future dangerousness.
Defense Designation of Expert Witnesses (docket no. 265). Dr. Cunningham previously testified as a mental health expert witness in the separate trial of Johnson's co-defendant, Dustin Honken.
*1075 2. Arguments of the parties
In support of its motion for mental examination of the defendant, the government argues, first, that the court should order a mental examination pursuant to Rule 12.2, so that the government will have the opportunity for effective rebuttal of any mental condition defense during the "penalty phase." The government asserts that, to comply with the requirements of Rule 12.2(b)(2), the government will create a "taint team" in the prosecutor's office to work with the government's expert or experts to coordinate examinations and to ensure that the results and reports are sealed in whatever manner the court instructs.
The government also argues that Johnson's notice of intent to rely on expert mental condition testimony is inadequate for the government to conduct any meaningful examination of Johnson or even to identify the appropriate expert or experts that the government may need to retain. The government contends that a supplemental notice must include at least the kinds of mental health experts Johnson is using and the nature of the mental disease or defect for which Johnson has been or will be examined, interviewed, or tested, if the government is to respond to testimony that may be based on some of those diagnostic techniques, but not others. Because Johnson's notice is inadequate, the government asserts that it needs additional time to respond until after an adequate notice is provided.
In response, Johnson identifies both "areas of accommodation" and "areas of dispute." Specifically, she does not object to the government's request that she submit to a mental examination by government experts, although she reserves the right to contest details, and she does not object to an extension of the government's deadline until after the defense supplements its notice, but not later than January 31, 2005. On the other hand, she strenuously disagrees with the government's assertion that it is entitled to have the findings and results of the defense's mental health experts' examinations or evaluations before the government is able to choose its own expert to examine Johnson. The government's assertion that it is unable to guess which expert to hire without a diagnosis from the defense experts, Johnson contends, is "exaggerated hype, unsupported by case law, and refuted by the express language of Rule 12.2(c)(2)."[11]
As to disputed issues, Johnson contends that any "taint team" established by the government to deal with mental health experts should not be in the same office as the prosecutors. She points out that there are already two "taint teams" in the United States Attorney's Office for the Northern District of Iowa for other matters in this case, and that is enough. Although she presumes the good faith and integrity of everyone involved, she suggests that an inadvertent breakdown in the "firewall" between the "taint team" and prosecutors could be disastrous. Once a "firewall" is created, Johnson states that she will immediately provide the "taint team" with the kinds of mental health professionals she has retained as experts (for example, "forensic psychiatrist," "neurologist," "clinical psychologist," etc.), as well as the specific nature of any testing that these experts have performed or will perform (such as the MMPI-2, the WAIS-2, etc.) in the course of evaluating her. In return, she requests five days advance notice of any testing that the government experts intend to administer in order to have an *1076 opportunity to object to a particular test or procedure. Johnson wishes to preserve both her right to challenge the validity of specific tests for persons in her circumstances and her right to consult with counsel during any evaluation by a government expert.
Although she is willing to disclose the kinds of mental health professionals she has retained and the kinds of tests that they have performed or will perform, Johnson contends that, pursuant to Rule 12.2(c)(3), the government is not entitled to know the nature of the mental disease or defect for which she was examined, interviewed, or tested until after disclosure of the results and reports of the government's experts, but the government is attempting to turn that requirement on its head. She contends that the "nature" of the proffered mental condition is essentially the same as the "results and reports" for which early disclosure is barred. Thus, she contends that disclosure of the types of mental health experts and the particular tests they will employ is sufficient to enable the government to hire the right type of rebuttal experts and to conduct the proper tests.
Johnson also contends that, if the government is permitted to examine her, then she should be allowed to have present a representative of the defense, which may include a defense expert, during any clinical interviews and/or testing. She contends that the law is clear that a psychiatric interview is a critical phase of the criminal process during which she has a right to counsel. She also contends that she has a Fifth Amendment right against self-incrimination during any such examination, even if she subsequently waives such privilege to the extent that she puts her mental condition at issue before the jury. Where the waiver is not unlimited, she asserts that she is entitled to guidance of counsel, and that counsel has an ethical, and perhaps constitutional, obligation to be present. Although she acknowledges a split in authority as to whether the right to counsel attaches at a government mental health examination, she contends that the court should, in its discretion, err on the side of protecting that right.
3. Analysis
a. Rule 12.2
Rule 12.2 of the Federal Rules of Criminal Procedure was amended in 2002, in large part, to address situations, such as the one presented here, in which a defendant indicates an intent to present expert evidence of her mental condition during capital sentencing proceedings. Indeed, of the five substantive changes in the 2002 amendments identified by the Advisory Committee, the following four apply to the situation here: (1) "the defendant is required to give notice of an intent to present expert evidence of the defendant's mental condition during a capital sentencing proceeding"; (2) "the amendment addresses the ability of the trial court to order a mental examination for a defendant who has given notice of an intent to present evidence of mental condition during capital sentencing proceedings and when the results of that examination may be disclosed"; (3) "the amendment addresses the timing of disclosure of the results and reports of the defendant's expert examination"; and (4) "the amendment extends the sanctions for failure to comply with the rule's requirements to the punishment phase of a capital case." FED. R. CRIM. P. 12.2, Advisory Committee Notes, 2002 Amendments.
A full statement of the pertinent portions of Rule 12.2 provides an overview of the scheme for mental health examinations and disclosure of results. As amended in 2002, Rule 12.2 provides, in pertinent part, as follows:
*1077 (b) Notice of Expert Evidence of a Mental Condition. If a defendant intends to introduce expert evidence relating to a mental disease or defect or any other mental condition of the defendant bearing on ... (2) the issue of punishment in a capital case, the defendant must within the time provided for filing a pretrial motion or at any later time the court sets notify an attorney for the government in writing of this intention and file a copy of the notice with the clerk....
(c) Mental Examination.
(1) Authority to Order an Examination; Procedures....
(B).... If the defendant provides notice under Rule 12.2(b) the court may, upon the government's motion, order the defendant to be examined under procedures ordered by the court.
(2) Disclosing Results and Reports of Capital Sentencing Examination. The results and reports of any examination conducted solely under Rule 12.2(c)(1) after notice under Rule 12.2(b)(2) must be sealed and must not be disclosed to any attorney for the government or the defendant unless the defendant is found guilty of one or more capital crimes and the defendant confirms an intent to offer during sentencing proceedings expert evidence on mental condition.
(3) Disclosing Results and Reports of the Defendant's Expert Examination. After disclosure under Rule 12.2(c)(2) of the results and reports of the government's examination, the defendant must disclose to the government the results and reports of any examination on mental condition conducted by the defendant's expert about which the defendant intends to introduce expert evidence.
(4) Inadmissibility of a Defendant's Statements. No statement made by a defendant in the course of any examination conducted under this rule (whether conducted with or without the defendant's consent), no testimony by the expert based on the statement, and no other fruits of the statement may be admitted into evidence against the defendant in any criminal proceeding except on an issue regarding mental condition on which the defendant:
* * * * * *
(B) has introduced expert evidence in a capital sentencing proceeding requiring notice under Rule 12.2(b)(2).
FED. R. CRIM. P. 12.2(b)-(c). Analysis of Johnson's motion, however, requires the court to parse the pertinent sections of the Rule in turn to determine their effect in this case.
b. Rule 12.2(b): Defendant's notice
i. Purpose of the provision. As the Advisory Committee explained, the amended "notice" provision in 12.2(b), set out in pertinent part above, "adopts the view" that "the better practice is to require pretrial notice of th[e] intent [to offer expert evidence on the defendant's mental condition] so that any mental examinations can be conducted without unnecessarily delaying capital sentencing proceedings." Id., Advisory Committee Comments, 2002 Amendments. Unfortunately, the rule provides little definition of the required content of the defendant's notice.
ii. The sufficiency of Johnson's notices. The government contends that Johnson's handwritten and filed notices of experts are both inadequate for the government to prepare to respond to Johnson's mental condition evidence. Specifically, the government requests that Johnson be compelled to disclose the kinds of mental health experts she is using *1078 (which the court finds that she has done, in the handwritten notice quoted above, as to all of her experts except Dr. Cunningham, who testified at Honken's trial) and the nature of the mental disease or defect for which Johnson has been or will be examined, interviewed, or tested (which Johnson clearly has not done). Johnson contends that the government is improperly seeking the findings and results of the defense's mental health experts' examinations or evaluations before the government chooses its own experts to examine Johnson.
A similar issue arose in United States v. Sampson, 335 F. Supp. 2d 166 (D.Mass.2004), one of the few cases identified by the court and the parties that has applied newly-amended Rule 12.2 to circumstances similar to those presented here, and the only one to address this precise issue. In Sampson, the defendant provided a notice that merely parroted the language of Rule 12.2, stating that "`he may introduce, at the penalty phase of this capital case, expert evidence relating to a mental disease or defect or any other mental condition bearing on the issue of punishment.'" Sampson, 335 F.Supp.2d at 241 (quoting the defendant's notice); and compare FED. R. CRIM. P. 12.2(b)(2) (the defendant must give notice if he or she "intends to introduce expert evidence relating to a mental disease or defect or any other mental condition of the defendant bearing on ... (2) the issue of punishment in a capital case."). The government challenged the sufficiency of the content of this notice, asking the court to order Sampson to disclose as well "(1) the nature of the proffered mental condition(s); (2) the identity and qualifications of the expert who would testify or whose opinions would be relied upon; (3) a brief, general summary of the topics to be addressed that was sufficient to permit the government to determine the area(s) in which its expert(s) must be versed; and (4) all medical records and test results relating to mental health that would be the subject of the anticipated expert testimony." Id. at 242. The defendant, however, "objected to providing more information than Rule 12.2 explicitly required." Id.
In Sampson, the court adopted the parties' agreement that the defendant would supplement his notice to include" `the kinds of mental health professionals who have evaluated Mr. Sampson (e.g., forensic psychiatrist, neuropsychologist, clinical psychologist) as well as the specific nature of any testing that these experts have performed (e.g., MMPI-2, WAIS-2, etc.) in the course of their evaluations of Mr. Sampson.'" Id. (quoting the parties' agreement). Similarly, here, Johnson has unilaterally offered to provide the following information to supplement her notice, once a "firewall" is in place in the United States Attorney's Office: "the kinds of mental health professionals each of her four experts [is] (e.g., `forensic psychiatrist', `neurologist', `clinical psychologist', etc.), as well as the specific nature of any testing that these experts have or will perform (e.g., MMPI-2, WAIS-2, etc.) in the course of their evaluation of Ms. Johnson." Defendant's Brief in Support of Defendant's Resistance, In Part, To Government's Motion For A Court Ordered Mental Examination Of Angela Johnson, 3. Johnson has, in fact, provided some of this information, by identifying the "kind" of mental health professional three of her four mental health professionals are in her handwritten notice of December 20, 2004. Only Dr. Cunningham has not been so identified, because he appears only in the notice filed on January 3, 2005. However, Dr. Cunningham also testified as an expert in Dustin Honken's trial, so the government is familiar with not only the kind of mental health professional Dr. Cunningham is, but also his specific areas of expertise.
*1079 As to the rest of the information requested by the government in Sampson, the court determined that "`notice' in Rule 12.2 must be read, as it was before the 2002 revision, to require meaningful notice, serving the overall purpose of the Rule" which the court identified as providing the government with an opportunity to conduct the kind of investigation needed to acquire rebuttal testimony. In addition, the court recognized that the need for "meaningful notice" must be balanced against the defendant's Fifth Amendment right against self-incrimination and Sixth Amendment right to effective assistance of counsel. Sampson, 335 F.Supp.2d at 243. To address these concerns, the court in Sampson noted that the new rule forbids the disclosure of "the results and reports" of the government's experts "`unless the defendant is found guilty of one or more capital crimes and the defendant confirms an intent to offer during sentencing proceedings expert evidence on mental conditions.'" Id. (quoting FED. R. CRIM. P. 12.2(c)(2)). Although the court noted that this procedure was "not constitutionally required," it was "designed to avoid litigation over whether the government has improperly made derivative use of the evidence." Id. (citing the 2002 Advisory Committee Notes). The court then resolved the issue of the adequacy of the defendant's notice as follows:
Before the enactment of the new Rule 12.2, the courts were split on the propriety of the government's first request, for "the nature of the proffered mental condition(s)." [Citations omitted.] Under the new Rule, however, requiring the defendant to provide such information is no longer permissible because "the nature of the proffered mental condition(s)" is essentially the same as the "results and reports" for which early disclosure is barred. See Fed.R.Crim.P. 12.2(c)(2). As reflected in the parties' agreement, however, the government's other requests sought the type of information that was necessary to enable the government to hire the right type of rebuttal experts and conduct the proper tests. [Citations omitted.] The government's requests were, therefore, meritorious.
Sampson, 335 F.Supp.2d at 243.
This court agrees generally with the conclusion of the court in Sampson concerning what is required to give "meaningful notice" of the defendant's intent to present evidence on her mental condition at the "penalty phase," but based on a slightly different analysis. This court notes, first, that Rule 12.2(b) itself explicitly requires nothing more than notice that the defendant "intends to introduce expert evidence relating to a mental disease or defect or any other mental condition of the defendant bearing on ... (2) the issue of punishment in a capital case." FED. R. CRIM. P. 12.2(b). Thus, the Rule does not expressly require the defendant to disclose the "nature" of the mental disease or defect for which the defendant has been or will be examined, interviewed, or tested, as the government demands in this case. This court acknowledges, however, that the Advisory Committee has noted that the purpose of adopting a scheme under which the defendant is required to provide notice of intent to present expert evidence on her mental condition at the "penalty phase" is "so that any mental examinations can be conducted without unnecessarily delaying capital sentencing proceedings." Id., Advisory Committee Comments, 2002 Amendments. To serve that purpose, the notice must provide "meaningful notice." Accord Sampson, 335 F.Supp.2d at 243; see also FED. R. CRIM. P. 12.2(b), Advisory Committee Comments, 1983 Amendments (without adequate notice, "the government would not have had an opportunity to conduct the kind of investigation needed to *1080 acquire rebuttal testimony on the defendant's claim [of a mental condition]").
The first requirement of such "meaningful notice," as the court in Sampson found, was identification of the kinds of mental health professionals the defendant has selected to evaluate her. See id. at 242-43. This court also agrees with the court in Sampson that "meaningful notice" under Rule 12.2(b) would include notice of nature of the tests that the defendant's experts have performed or will perform, e.g., the MMPI-2, the WAIS-2, etc., in the course of their evaluations of the defendant. See id. at 243 (the parties agreement, which included disclosure of the tests that the defendant's experts had performed as part of the Rule 12.2(b) notice, showed that the government's request for this information sought information that was necessary to enable the government to hire the right type of rebuttal experts and to conduct the proper tests). Here Johnson has offered to disclose information concerning the tests her experts have performed or will perform, but only after a "taint team" is appointed. Presumably, Johnson contemplates that the "taint team" will be responsible for hiring the government's experts, based in part on that attorney's review of the kind of experts that Johnson has employed and the tests that they have performed or will perform. The court, however, believes that the prosecuting attorney should have the opportunity to select the government's rebuttal mental health experts. The court also finds that Johnson will not be prejudiced by requiring her to add disclosures of the tests that her experts have performed or will perform to the disclosures that she has already made concerning her experts. Because tests like the MMPI-2 or the WAIS-2 are standard diagnostic tools, use of such tests does not disclose to the prosecuting attorneys the specific nature of the mental condition that Johnson may assert in such a way that either her constitutional rights or the scheme contemplated by Rule 12.2 is violated. Therefore, the court will require Johnson to include in her supplement to her Rule 12.2(b) notice the nature of the tests that her experts have performed or will perform.
This court also agrees with the court in Sampson that the government is not entitled to notice of the "nature" of the defendant's mental condition prior to disclosure of the reports and results of testing by the government's experts, but parts company with the Sampson court over the basis for that conclusion. The court in Sampson read the defendant's "notice" requirements in Rule 12.2(b) in conjunction with the requirements for timing of disclosure of the "results and reports" of the government's experts in Rule 12.2(c)(2) to conclude that initial disclosure of the "nature" of the defendant's mental condition in the defendant's Rule 12.2(b) notice was impermissible. See Sampson, 335 F.Supp.2d at 243. However, this court is uncomfortable with using the limitations on disclosure of the "results and reports" of the government's examination in Rule 12.2(c)(2) as the basis for determining the proper scope of the defendant's "notice" pursuant to Rule 12.2(b). On the other hand, Rule 12.2(c)(3), which does pertain to disclosure of the results and reports of the defendant's expert's examination, provides for disclosure of those reports "[a]fter disclosure under Rule 12.2(c)(2) of the results and reports of the government's examination." FED. R. CRIM. P. 12.2(c)(3) (emphasis added). Thus, the Rule as a whole contemplates that the government will not have the "results and reports" of the defendant's experts until after the government has disclosed the "results and reports" of its own experts. If the decision in Sampson correctly equates "results and reports" with "the nature of the defendant's mental condition," it would seem *1081 that, reading Rule 12.2(b) in conjunction with Rule 12.2(c)(3), the current version of the Rule does, indeed, make it impermissible to require the defendant to provide that information in its notice. Cf. Sampson, 335 F.Supp.2d at 243 (reaching this conclusion, but relying on a reading of Rule 12.2(b) in conjunction with Rule 12.2(c)(2)). The government does not contend here that the equation is improper, and this court finds no clear fallacy in it.
Instead, the government contends in this case that disclosure of only the tests conducted or to be conducted, without disclosing mental conditions for which the defendant has only been examined or interviewed, would not allow the government to determine the appropriate expert to hire, i.e., would not provide "meaningful notice." This is so, the government asserts, because the defendant may only be interviewed about, but never tested for, certain disorders. The government also complains that some mental defects and disorders may not be appropriate for testing, but are instead evaluated through interviews or examinations. Thus, the government contends that, without knowing which disorder or disease the defendant was examined or interviewed for, as well as what tests were performed, the government would be disadvantaged in retaining the appropriate experts.
The court finds that the government's assertions of the difficulty of selecting appropriate rebuttal experts, without knowing the nature of the mental condition for which the defendant was or will be tested, interviewed, or evaluated are overblown. First, as the defendant suggests, the government's scheme would "put the cart before the horse," by reversing the scheme contemplated by Rule 12.2. That scheme requires the defendant's notice of intent to rely on mental condition evidence, followed by court-ordered examinations, followed by the government's disclosures of its expert's reports. Only after the government's disclosures is the defendant required to make her disclosures. FED. R. CIV. P. 12.2(b),(c)(1), (c)(2), and (c)(3). Second, disclosure of the defense expert's specific identities, and hence, their qualifications and particular areas of expertise, in addition to their professions and the tests they will use, necessarily narrows the scope of mental diseases, disorders, or conditions that the government could be required to rebut.
Therefore, the disclosures that the defendant has already provided and those that she has agreed to make provide the government with the "meaningful notice" contemplated by Rule 12.2(b). The defendant's handwritten and filed notices of intent to present mental condition evidence, taken together and as the defendant has agreed to supplement them, are not insufficient, so long as the defendant makes those disclosures by the deadline the court will now set, rather than waiting until after a "taint team," if any, is in place. Therefore, the court will set a deadline for Johnson to supplement her notice with the nature of the tests (the MMPI-2 or the WAIS-2, etc.) that her experts have performed or will perform. The court will also extend the government's deadline to notify Johnson of any rebuttal experts that the government intends to use on this issue until after Johnson files her supplemented notice.[12]
c. Rule 12.2(c)(1): Court-ordered examination
i. The pertinent provision and its purpose. New Rule 12.2 provides for court-ordered mental examinations of the *1082 defendant in the circumstances presented here, as follows:
(c) Mental Examination.
(1) Authority to Order an Examination; Procedures....
(B).... If the defendant provides notice under Rule 12.2(b) the court may, upon the government's motion, order the defendant to be examined under procedures ordered by the court.
FED. R. CRIM. P. 12.2(c)(1)(B). As the Advisory Committee has explained, subsection (c)(1), as amended, "clarifies the authority of the court to order mental examinations for a defendant ... in those cases where the defendant intends to present expert testimony on his or her mental condition." Id. Specifically, it "clarifies that the authority of the court to order a mental examination under Rule 12.2(c)(1)(B) extends to those cases when the defendant has provided notice, under Rule 12.2(b), of an intent to present expert testimony on the defendant's mental condition, either on the merits or at capital sentencing." Id. However, "[t]he amendment leaves to the court the determination of what procedures should be used for a court-ordered examination on the defendant's mental condition (apart from insanity)." Id. (also noting that there is no statutory counterpart for such a situation, as there is for an insanity defense).
Thus, Rule 12.2(c)(1)(B) plainly provides the court with the authority, in its discretion, to order mental examinations in the circumstances presented here. Moreover, Johnson does not object to the government's request that she submit to a mental examination by government experts, although she reserves the right to contest details. Therefore, the court will order mental examinations of Johnson by government experts. However, the court must also consider Johnson's challenges to details of such examinations.
Johnson's exercise of her reserved right to contest details is embodied, first, in her request that any "taint team" established by the government to handle mental condition examinations be established in a separate United States Attorney's Office. Such an "outside taint team" would ensure that the prosecutors in her case are "firewalled" from any contact with the information at issue until disclosure is permitted under Rule 12.2(c)(2). Second, Johnson requests five days advance notice of any testing that the government's experts intend to administer. Johnson seeks such notice for two purposes: (1) to have an opportunity to challenge the validity of specific tests for persons in her circumstances; and (2) to preserve her right to consult with counsel to protect her Fifth and Sixth Amendment rights before and during any evaluation by a government expert. The court will consider these challenges in turn.
ii. Johnson's request for an "outside taint team." Again, some of the territory pertinent to a request for a "taint team" has been explored by the court in Sampson. In Sampson, the court observed, "The new Rule 12.2 does not resolve how, as a practical matter, the government experts are to conduct their mental condition examinations while adhering to the prohibition against early disclosure to the prosecutors of the `results and reports' of those examinations." Sampson, 335 F.Supp.2d at 244 (also noting various kinds of issues that can arise during the course of court-ordered examinations). The court found that "[u]nder the literal language of the new Rule 12.2[(c)(2)]..., the reports and results cannot be revealed to `any attorney for the government' unless and until the defendant's guilt is established and he confirms an intent to offer expert evidence on his mental condition during the penalty phase." Id. at *1083 244-45 (emphasis in original). However, the court "found that it was reasonable and consistent with the goals of the new Rule to interpret `any attorney for the government' to mean any attorney for the government in a particular prosecution except those attorneys representing the government's interests solely in connection with its experts' testing." Id. 245. Therefore, "[t]o avoid premature disclosure of the `reports and results' to the prosecution team," the court directed that "firewalled" Assistant United States Attorneys would handle the government's interests in the examination of the defendant and that "the firewalled AUSAs in this case could not be members of the prosecution team and would not be allowed to join the prosecution team after any penalty phase had begun." Id. (contrasting that procedure with the decision in a case applying Rule 12.2 as it existed prior to the 2002 amendments, United States v. Allen, 247 F.3d 741, 772 (8th Cir.2001), vacated on other grounds, 536 U.S. 953, 122 S. Ct. 2653, 153 L. Ed. 2d 830 (2002), which had permitted the prosecutor handling the defendant's mental examinations to join the prosecution team for the "penalty phase"). The court explained,
Rule 12.2's goal of avoiding delays in capital sentencing proceedings would not be served if any problems with the government testing were not revealed until after the guilt phase. The defendant could suffer no prejudice from the fire-wall procedure. Indeed, the procedure might provide the defendant with an even greater sense of security that his defense strategy including the types of mental health experts he had hired would remain hidden from the prosecution team.
Sampson, 335 F.Supp.2d at 245.
This court agrees with the Sampson court's interpretation of Rule 12.2 as permitting an attorney not on the prosecution team to manage the government's mental health experts and their interactions with the defendant. Any other construction is impractical at best and absurd at worst. On the other hand, reading "any attorney for the government" within the meaning of Rule 12.2(c)(2) in the context of the whole rule shows that this phrase reasonably means "any attorney prosecuting the case." For example, the comparable reference in Rule 12.2(b) to notice to "an attorney for the government" of intent to introduce evidence of a mental disease, mental defect, or mental condition in the punishment phase of a capital case must mean "an attorney prosecuting the case," because it would make no sense if the "notice" requirement could be satisfied by notifying an Assistant United States Attorney in the Southern District of Florida assigned to Social Security and other civil cases, who would be "an attorney for the government," of an intent to use mental condition evidence in a capital prosecution pursuant to 21 U.S.C. § 848 in the Northern District of Iowa. The real concern of the Rule, the court finds from its provisions taken as a whole, is that the results and reports of the defendant's mental examinations not be revealed to prosecuting attorneys prior to the government's own disclosures; it does not follow from this concern that the government cannot have an attorney manage the mental examination process, so long as that attorney is not part of, and can never be part of, the prosecuting team. Therefore, appointment of a "taint team" or "taint attorney" for the government to protect the government's interests in managing the mental health examination of the defendant does not violate Rule 12.2, and this court will, consequently, direct the appointment of such a "taint team" or "taint attorney" in this case.
*1084 Johnson asserts that such a "taint team" or "taint attorney" should not be in the same office as the prosecutors in this case. The court notes that there are presently two "taint teams" in the United States Attorney's Office for the Northern District of Iowa working on issues in this case and that these "taint teams" have worked efficiently and effectively. Thus, there is no reason to believe that any "breakdown" of a "firewall" would be likely within that office. Moreover, the court recognizes that the risks of communications from outside of an office going astray or of some other "contamination" occurring are much higher if still more United States Attorney's Offices are involved. Nevertheless, at the hearing on January 27, 2005, the court entertained nominees from Johnson's defense counsel of appropriate districts or United States Attorney's Offices from which an "outside taint team" or "outside taint attorney" might be appointed for this case. Johnson identified three attorneys who are or were in the United States Attorney's Office for the Western District of Missouri and, without waiving any other objections to an "outside taint team," the government conceded that these attorneys would be acceptable. The court now concludes that, although not convinced that use of an "outside taint team" or "outside taint attorney" is either always necessary or necessary in this case, the court should err on the side of caution by appointing such an "outsider" or "outsiders" to protect the government's interests in this case relating to mental examinations of Johnson pursuant to Rule 12.2. The "outside taint attorney" or "outside taint attorneys" will be appointed by separate order.
The parties also discussed with the court the extent of contact, if any, that any "outside taint attorney" should have with the prosecutors in this case or the means by which an "outside taint attorney" should otherwise be provided with information about this case. The court concludes that any contact between an "outside taint attorney" and the United States Attorney's Office for the Northern District of Iowa prior to the disclosures authorized by Rule 12.2(c)(2), must be strongly discouraged in order to protect the integrity of the "firewall." Therefore, the sources of information available to the "outside taint attorneys" shall be the indictments in this case, this ruling, and the designations of mental health experts provided to the prosecution by the defendant. Should the "outside taint attorneys" find that they require additional information from the record in this case, they may request from the Clerk of Court access to the docket and filings in this case through the CM/ECF electronic filing and docketing system to the same extent such access is provided to the prosecutors in this case. Should the "outside taint attorneys" find that an inquiry must be made to the prosecutors in this case, such an inquiry must be made in either of two ways: (1) in writing, with a copy filed under seal until after the Rule 12.2(c)(2) disclosures have been made, and the copy must be disclosed with those Rule 12.2(c)(2) disclosures; or (2) in a pre-arranged telephone call with a court reporter making a complete record of the conversation, which shall also be filed under seal until after the Rule 12.2(c)(2) disclosures have been made, and then disclosed with those Rule 12.2(c)(2) disclosures. The flow of information between the prosecutor and the "outside taint attorneys" must be entirely one-way, with the "taint attorneys" seeking information and the prosecutor providing it.
Johnson raises two more interrelated issues concerning procedures for any court-ordered mental examinations: (1) She requests advance notice of any government testing, to have the opportunity to challenge testing of dubious validity and to assert her Fifth and Sixth Amendment *1085 rights, and (2) she also requests adequate procedures otherwise to protect her Fifth and Sixth Amendment rights.
iii. Johnson's demand for notice. In Sampson, the defendant also requested advance notice of testing so that counsel could make a Daubert challenge to certain testing procedures and so that defense counsel could properly advise the defendant of the scope and nature of the proceeding. Sampson, 335 F.Supp.2d at 245-46. The court, however, was "not persuaded by the defendant's Daubert argument," primarily because a dispute about tests could become moot if neither party ultimately attempted to admit the test results in question, making a pre-test Daubert analysis a potential waste of judicial resources as well as a means to frustrate Rule 12.2's goal of avoiding delay in capital cases. Id. at 246. This court agrees. Johnson's assertion that she must have the opportunity to challenge test procedures before they are administered is an example of Johnson "putting the cart before the horse" in her turn, because even if tests of "dubious validity" are performed, the time to challenge admissibility of the results of those tests is at the time, if ever, that her mental condition is actually put at issue in a sentencing proceeding.
On the other hand, the court in Sampson found that adequate notice of testing or examinations should be required to afford the defendant the opportunity to consult with counsel; to allow better coordination of access to the defendant between the government's experts and the defense's experts; and to provide "symmetry" to the parties' pre-testing obligations. Sampson, 335 F.Supp. at 246. This court agrees that these reasons support requiring the government to give Johnson's defense team at least five days notice of any tests, examinations, or interviews by government mental health experts.
iv. Johnson's demand for Fifth and Sixth Amendment protections. This conclusion leaves the question of whether advance notice of testing and other procedures are also sufficient to protect Johnson's Fifth and Sixth Amendment rights. Johnson puts much energy into attempting to establish that her Fifth and Sixth Amendment rights are implicated by mental examinations and that those rights will be adversely affected if her counsel or a defense expert is not present at the government's tests or interviews. Therefore, the court must examine the scope of Johnson's Fifth and Sixth Amendment rights as they relate to mental health examinations pursuant to Rule 12.2 and what measures are sufficient to protect those rights.
In Estelle v. Smith, 451 U.S. 454, 101 S. Ct. 1866, 68 L. Ed. 2d 359 (1981), the Supreme Court explained that "[t]he Fifth Amendment privilege [against self-incrimination] is directly involved [where] the State use[s] as evidence against the [defendant] the substance of his disclosures during [a] pretrial psychiatric examination." Smith, 451 U.S. at 464-65, 101 S. Ct. 1866 (emphasis added). Therefore, the Court held that a capital defendant's Fifth Amendment right against compelled self-incrimination precludes the state from subjecting the defendant to a psychiatric examination concerning "future dangerousness" without first informing the defendant that he or she has a right to remain silent and that anything he or she says can be used against him or her in a sentencing proceeding. Smith, 451 U.S. at 461-69, 101 S. Ct. 1866; see also Powell v. Texas, 492 U.S. 680, 680-81, 109 S. Ct. 3146, 106 L. Ed. 2d 551 (1989) (per curiam) (so characterizing the holding in Smith). Moreover, the Court held in Smith that "[a] criminal defendant, who neither initiates a psychiatric evaluation nor attempts to introduce any psychiatric evidence, may not be compelled to respond to a psychiatrist *1086 if his statements can be used against him at a capital sentencing proceeding." Smith, 451 U.S. at 467-68, 101 S. Ct. 1866. Therefore, under those "distinct circumstances," admission of a psychiatrist's testimony violates the defendant's Fifth Amendment right against self-incrimination. Id. at 466, 101 S. Ct. 1866.
On the other hand, the Supreme Court subsequently noted in Powell that its decisions in Smith and Buchanan v. Kentucky, 483 U.S. 402, 107 S. Ct. 2906, 97 L. Ed. 2d 336 (1987), provide "some support" for the conclusion that a defendant waives his or her Fifth Amendment right against self-incrimination when the defendant puts his or her mental condition at issue:
In Smith we observed that "[w]hen a defendant asserts the insanity defense and introduces supporting psychiatric testimony, his silence may deprive the State of the only effective means it has of controverting his proof on an issue that he has interjected into the case." 451 U.S. at 465, 101 S.Ct. at 1874. And in Buchanan the Court held that if a defendant requests a psychiatric examination in order to prove a mental-status defense, he waives the right to raise a Fifth Amendment challenge to the prosecution's use of evidence obtained through that examination to rebut the defense. 483 U.S. at 422-423, 107 S.Ct. at 2917-2918.
Powell, 492 U.S. at 684, 109 S. Ct. 3146; see also Penry v. Johnson, 532 U.S. 782, 794, 121 S. Ct. 1910, 150 L. Ed. 2d 9 (2001) (recognizing that Estelle is distinguishable, and hence, there may be no Fifth Amendment violation, where the defendant "himself made his mental status a central issue in ... his trial[ ] for ... murder," and has thereby placed his mental condition "at issue," but noting that "[w]e need not and do not decide whether these differences affect the merits of [a defendant's] Fifth Amendment claim," because the issue in that habeas action was whether a state court's decision was contrary to or an unreasonable application of the Court's precedent).
Turning to a defendant's Sixth Amendment right to counsel, in Buchanan v. Kentucky, 483 U.S. 402, 107 S. Ct. 2906, 97 L. Ed. 2d 336 (1987), the Court found that a defendant "undoubtedly had" a Sixth Amendment right to consultation with counsel concerning mental examinations. Buchanan, 483 U.S. at 424, 107 S. Ct. 2906; see also Powell, 492 U.S. at 681, 109 S. Ct. 3146 (noting that, in Smith, the Court had unanimously held that, "once a capital defendant is formally charged, the Sixth Amendment right to counsel precludes such an examination without first notifying counsel that `the psychiatric examination [will] encompass the issue of their client's future dangerousness,'" citing Smith, 451 U.S. at 471, 101 S. Ct. 1866, and that the Court had "reaffirmed this Sixth Amendment protection" in Satterwhite v. Texas, 486 U.S. 249, 254, 108 S. Ct. 1792, 100 L. Ed. 2d 284 (1988), "emphasizing that `for a defendant charged with a capital crime, the decision whether to submit to a psychiatric examination designed to determine his future dangerousness is "literally a life and death matter" which the defendant should not be required to face without "the guiding hand of counsel"'"). Moreover, to be "effective," the Court held that the right to consultation with counsel (1) "must be based on counsel's being informed about the scope and nature of the proceeding," and (2) "would depend on counsel's awareness of the possible uses to which [the defendant's] statements in the proceedings could be put." Id. at 424-25.
The Supreme Court has recognized that analysis of waiver of a defendant's Sixth Amendment right to counsel as to a mental examination is different from analysis of the waiver of a defendant's Fifth Amendment *1087 right against self-incrimination in such circumstances. See Powell, 492 U.S. at 685, 109 S. Ct. 3146 ("The distinction between the appropriate Fifth and Sixth Amendment analyses was recognized in the Buchanan decision. In that case, the Court held that the defendant waived his Fifth Amendment privilege by raising a mental-status defense. 483 U.S. at 421-424, 107 S.Ct. at 2916-2918. This conclusion, however, did not suffice to resolve the defendant's separate Sixth Amendment claim. Thus, in a separate section of the opinion the Court went on to address the Sixth Amendment issue, concluding that on the facts of that case counsel knew what the scope of the examination would be before it took place. Id. at 424-425, 107 S. Ct. at 2919."); Buchanan, 483 U.S. at 424-25, 107 S. Ct. 2906 (analyzing waiver of the Sixth Amendment right separately from waiver of the Fifth Amendment right). In Buchanan, the Court found that "thee was no Sixth amendment violation" where there was no question that defense counsel had been informed of the "nature and scope" of the "mental health" proceedings, and defense counsel was "on notice that if ... he intended to put on a `mental status' defense for [the defendant], he would have to anticipate the use of psychological evidence by the prosecution in rebuttal." Buchanan, 483 U.S. at 424-25, 107 S. Ct. 2906.
After a review of Supreme Court precedent, the Third Circuit Court of Appeals summarized the "landscape" for Fifth and Sixth Amendment rights as they applied to compelled mental health examinations, as follows:
A compelled psychiatric interview implicates Fifth and Sixth Amendment rights (Smith). Before submitting to that examination, the defendant must receive Miranda warnings and (once the Sixth Amendment attaches) counsel must be notified (Smith). The warnings must advise the defendant of the "consequences of foregoing" his right to remain silent (Smith). The Fifth and Sixth Amendments do not necessarily attach, however, when the defendant himself initiates the psychiatric examination (Buchanan, Penry). Similarly, the Fifth but not Sixth Amendment right can be waived when the defendant initiates a trial defense of mental incapacity or disturbance, even though the defendant had not been given Miranda warnings (Buchanan, Powell). But that waiver is not limitless; it only allows the prosecution to use the interview to provide rebuttal to the psychiatric defense (Buchanan, Powell). Finally, the state has no obligation to warn about possible uses of the interview that cannot be foreseen because of future events, such as uncommitted crimes (Penry).
Gibbs v. Frank, 387 F.3d 268, 274 (3d Cir.2004); see also United States v. Curtis, 328 F.3d 141, 145 (4th Cir.2003)(noting that it had previously held in Savino v. Murray, 82 F.3d 593, 604 (4th Cir.1996), that "`[i]n essence, the defendant waives his right to remain silent ... by indicating that he intends to introduce psychiatric testimony,'" and that Rule 12.2(c) permits the government to introduce expert testimony if the defendant has raised the issue of his mental condition).
This court notes that the provisions of Rule 12.2(c)(4) concerning use of the defendant's statements in the course of a mental examination were specifically written "to more accurately reflect the Fifth Amendment considerations at play in this context." See FED. R. CRIM. P. 12.2, Advisory Committee Notes, 1983 Amendments (citing Smith, 451 U.S. at 454, 101 S. Ct. 1866). Moreover, as amended in 2002,
Rule 12.2(c)(4) provides that the admissibility of such evidence in a capital sentencing proceeding is triggered only by the defendant's introduction of expert *1088 evidence. The Committee believed that, in this context, it was appropriate to limit the government's ability to use the results of its expert mental examination to instances in which the defendant has first introduced expert evidence on the issue.
Id., 2002 Amendments. To achieve these goals of protecting the defendant's Fifth Amendment rights, Rule 12.2(c)(4) provides, in pertinent part, as follows:
(4) Inadmissibility of a Defendant's Statements. No statement made by a defendant in the course of any examination conducted under this rule (whether conducted with or without the defendant's consent), no testimony by the expert based on the statement, and no other fruits of the statement may be admitted into evidence against the defendant in any criminal proceeding except on an issue regarding mental condition on which the defendant:
* * * * * *
(B) has introduced expert evidence in a capital sentencing proceeding requiring notice under Rule 12.2(b)(2).
FED. R. CRIM. P. 12.2(c)(4). Thus, until and unless the defendant waives the Fifth Amendment right against self-incrimination by putting his or her mental condition at issue in a sentencing proceeding, Rule 12.2(c)(4) protects that right by prohibiting the use in any criminal proceeding of the defendant's statements during a mental examination, an expert's testimony based on those statements, or any "fruits" of those statements. Rule 12.2 does not, however, contain any provisions specifying the manner in which a defendant's Sixth Amendment right to counsel is to be protected in the context of a mental examination.
The court concludes that the mental examinations, evaluations, and interviews at issue here do, at least as a general matter, implicate Johnson's Fifth and Sixth Amendment rights. See Smith, 451 U.S. at 464-66, 101 S. Ct. 1866. Thus, to protect her Fifth Amendment right in the first instance, Johnson would be entitled to notice that she has a right to remain silent and that anything she says during the examination can be used against her in a sentencing proceeding, see id. at 461-69, 101 S. Ct. 1866, and that if she "neither initiates a psychiatric evaluation nor attempts to introduce any psychiatric evidence," she "may not be compelled to respond to a psychiatrist if [her] statements can be used against [her] at a capital sentencing proceeding." Id. at 467-68, 101 S. Ct. 1866. In the present circumstances, however, Johnson has given notice that she is at least considering placing her mental condition at issue during the sentencing phase, if any, of her trial. Thus, her notice of intent entitles the government to request mental examinations pursuant to Rule 12.2. Moreover, if she actually puts her mental condition at issue, she will have waived her right to raise a Fifth Amendment challenge to the prosecution's use of evidence obtained through the court-ordered examinations to rebut her mental health defense. Powell, 492 U.S. at 684, 109 S. Ct. 3146.
In the event that Johnson puts her mental condition at issue, her waiver of her Fifth Amendment right is not "limitless." Gibbs, 387 F.3d at 274. Thus, some protection is still required. The court finds that the residual protection required is provided, in the first instance, by Rule 12.2(c)(4), as amended. As explained above, until and unless Johnson waives her Fifth Amendment right against self-incrimination by putting her mental condition at issue in a sentencing proceeding, Rule 12.2(c)(4) protects that right by prohibiting the use in any criminal proceeding of her statements during a mental examination, an expert's testimony based on those statements, or any "fruits" of *1089 those statements. FED. R. CRIM. P. 12.2(c)(4). Still other measures are appropriate here, however.
For example, in Sampson, the defendant originally requested that the court allow a defense representative, including a defense expert, to be present during any clinical interviews or testing of the defendant, but later "indicated that having the interviews tape-recorded and the recordings provided immediately to defense counsel would be a satisfactory alternative." Id. In Sampson, the court found that tape-recording the testing and interviews adequately protected the defendant's Fifth Amendment right against self-incrimination:
The defendant could not present expert testimony on his mental condition and yet refuse, on Fifth Amendment grounds, to answer questions put to him by the government's experts. See Fed.R.Crim.P. 12.2(d); cf. United States v. Bartelho, 129 F.3d 663, 673-74 (1st Cir.1997) (striking defendant's direct testimony because he refused to answer related questions on cross-examination). Defense counsel's presence at the testing would not have been necessary to protect Sampson's Fifth Amendment rights because Rule 12.2 provides that "[n]o statement made by a defendant in the course of any examination conducted under this rule... and no other fruits of the statement may be admitted into evidence against the defendant in any criminal proceeding except on an issue regarding mental condition" on which the defendant has introduced expert evidence pursuant to Rule 12.2. Fed.R.Crim.P. 12.2(c)(4) (emphasis added); see 1983 Advisory Committee Notes (stating that Rule 12.2(c) was written to "reflect the Fifth Amendment considerations" addressed in Estelle); State v. Martin, 950 S.W.2d 20, 25 (Tenn.1997) (concluding that Tennessee's version of Rule 12.2 "achieve[s] the balancing of interests stressed" in Estelle and thus defendant had no Fifth Amendment right to have defense counsel and experts present at government's examination).
Sampson, 335 F.Supp.2d at 247. Johnson has not made a similar concession that tape-recording would adequately protect her Fifth Amendment rights, but this court nevertheless concludes that Johnson's Fifth Amendment rights will be adequately protected by advance notice of testing and an order requiring audiotaping of all testing and interviews of Johnson by government experts and the same-day or next-day provision of those recordings to defense counsel. Id. at 247-48 (requiring audiotape recording).[13]
Although Johnson has not asserted that she should have first and exclusive access to the audiotape recordings, to assist her in determining whether or not she should actually put her mental condition at issue during sentencing proceedings, the court will nevertheless consider that question. Recently, in Gruning v. DiPaolo, 311 F.3d 69 (1st Cir.2002), a petitioner for habeas relief did assert that the state court violated his Fifth Amendment rights by failing to give him exclusive access to audiotape recordings of his mental examinations, in order to assist him in determining whether or not to waive his right to remain silent by putting his mental condition at issue. However, the court concluded that "`the law ordinarily considers a waiver knowing, intelligent, and sufficiently aware *1090 if the defendant fully understands the nature of the right and how it would likely apply in general in the circumstances even though the defendant may not know the specific detailed consequences of invoking it.'" Gruning, 311 F.3d at 72-73 (quoting United States v. Ruiz, 536 U.S. 622, 122 S. Ct. 2450, 2455-57, 153 L. Ed. 2d 586 (2002) ) (emphasis in the original). Applying this standard, the court held that, "[w]ithout hearing the audiotape, both [the petitioner] and his attorney understood the nature of petitioner's right against self-incrimination `and how it would likely apply in general in the circumstances,' thus satisfying constitutional requirements." Id. at 73 (quoting Ruiz, 122 S.Ct. at 2455).
The court in Gruning recognized that "the defense would prefer exclusive access to the evidence and that, from the defense's point of view, the mere possession of incriminating evidence by the prosecution creates a disadvantage for the defense," but the court nevertheless concluded that there was no "constitutional infirmity," because "allowing the prosecution to hear the audiotape was a mild condition, far removed from Fifth Amendment compulsion," where the petitioner "could have chosen both to listen to the audiotape and to invoke his privilege against self-incrimination." Id. In that circumstance, "[t]he prosecution would have had possession of incriminating statements, but could not have used the statements in court unless the defense put the psychiatric evaluation into issue by having petitioner or his psychiatric expert testify." Id. (citing the applicable provision of the state rule of criminal procedure, Mass. R.Crim. P. 14(b)(2)(B)(iii)). Therefore, the court held that the petitioner's "decision of whether or not to waive his privilege against self-incrimination was knowing and intelligent, and did not require the court to provide him sole access to the audiotape of his psychiatric examination." Id.
Here, the court finds that, like Massachusetts Rule of Criminal Procedure 14(b)(2)(B)(iii), Rule 12.2(c)(4) of the Federal Rules of Criminal Procedure provides adequate protection from improper use of statements made during mental examinations. See FED. R. CRIM. P. 12.2(c)(4) (no use may be made of defendant's statements in any criminal proceeding unless the defendant puts his or her mental condition at issue in a sentencing proceeding). The court also agrees with the court in Gruning that, in the circumstances presented here, even "[w]ithout hearing the audiotape, both [Johnson] and [her] attorney underst[an]d the nature of [Johnson's] right against self-incrimination `and how it would likely apply in general in the circumstances,' thus satisfying constitutional requirements." Gruning, 311 F.3d at 73 (quoting Ruiz, 122 S.Ct. at 2455). Nevertheless, Federal Rule 12.2(c) bars disclosure of testing results and reports to the government until the defendant is found guilty and "confirms an intent to offer during sentencing proceedings expert evidence on mental condition." FED. R. CRIM. P. 12.2(c)(2). The court concludes that, by extension, this provision should bar disclosure to the prosecutors in this case of the audiotape recordings of Johnson's mental examinations or interviews until the disclosures of results and reports of experts is also permitted under Rule 12.2(c)(2), because the recordings would be, in a sense, the "raw data" on which the experts' reports and results would be based, and Johnson will not waive her right against self-incrimination until she actually confirms her intention to put her mental condition at issue. See FED. R. CRIM. P. 12.2(c)(2) (the results of the government's examinations are not to be disclosed until the defendant confirms her intent to offer mental condition evidence).
Next, the court concludes that Johnson "undoubtedly ha[s]" a Sixth *1091 Amendment right to consultation with counsel concerning mental examinations. Buchanan, 483 U.S. at 424, 107 S. Ct. 2906; see also Powell, 492 U.S. at 681, 109 S. Ct. 3146. However, the court also concludes that Johnson's Sixth Amendment right to counsel will be adequately protected by advance notice of testing and the recording of her examinations and interviews; there is no need for either defense counsel or a defense expert to be present during such testing. The Supreme Court's decision in Buchanan suggests that, for effective exercise of her Sixth Amendment rights, defense counsel must be informed of the "nature and scope" of the "mental health" proceedings, which Johnson will receive as directed in this order. Moreover, in this case, there is no question that defense counsel is already "on notice that if ... [Johnson's attorneys] intend[] to put on a `mental status' defense for [Johnson], [they] would have to anticipate the use of psychological evidence by the prosecution in rebuttal." Buchanan, 483 U.S. at 424-25, 107 S. Ct. 2906. Thus, if advance notice of testing is provided, there would be no Sixth Amendment violation. Furthermore, here, as in Sampson, factors such as the rights implicated, the nature of the tests, the effect of the presence of a defense representative on the validity and reliability of those tests, and the purposes for which defense counsel wishes to be present, as well as the advance notice and audiotaping procedures described above, all lead the court to conclude that it is unnecessary for defense counsel or a defense expert to be present during testing. See Sampson, 335 F.Supp.2d at 247-48.
v. Summary. In this case, the court will appoint an "outside taint attorney" or "outside taint attorneys" to manage the government's mental health experts and any other issues relating to court-ordered mental health examinations of Johnson. The "outside taint attorneys" shall not participate in the prosecution of Johnson at any stage of these proceedings. The "outside taint attorneys" shall provide Johnson's defense counsel with at least five days advance notice of any mental examinations or interviews of Johnson by the government's experts, including the "nature and scope" of such examinations or interviews. Furthermore, all testing or interviews conducted by the government's mental health experts pursuant to Rule 12.2(c)(1)(B) shall be audiotaped in their entirety and those tapes shall be provided to defense counsel by same-day or next-day delivery upon the conclusion of each testing or interview session. The recordings shall not be disclosed to the prosecutors in this case until and unless disclosures pursuant to Rule 12.2(c)(2) become appropriate, as explained below.
d. Rule 12.2(c)(2) & (3): Disclosure and use of results
Finally, Rule 12.2 provides for the disclosure and use of the results of mental examinations of the defendant. Apart from the Fifth and Sixth Amendment concerns addressed above, there does not appear to be any dispute in this case, at this time, about how the parties are to comply with the "disclosure and use" requirements of Rule 12.2(c)(2) and (3).[14] Therefore, the *1092 court does not find it necessary to reiterate the requirements of these provisions. Suffice it to say that the court's order for mental examinations of the defendant shall incorporate the disclosure provisions of Rule 12.2(c)(2) and (3), as well as the use provisions in Rule 12.2(c)(4).
F. The Defendant's Motion To Strike The Death Penalty
The court turns next to Johnson's various motions in the "second round" of pretrial motions. The first such motion is Johnson's December 8, 2004, Motion To Strike Death Penalty (docket no. 230). In this motion, Johnson seeks an order striking the death penalty as an available penalty for the murders of Greg Nicholson, Lori Duncan, and Terry DeGeus. The government resisted this motion on December 27, 2004 (docket no. 256).
1. Arguments of the parties
Johnson asserts that, in this case, the court should bar the death sentence, or any punishment questions for potential jurors, owing to intra-case proportionality principles and in the interests of justice. More specifically, in her motions, Johnson contends that, she is charged with aiding and abetting Dustin Honken's commission of five murders; that Honken was alleged to have shot the five victims and was the principal in the murders; and the jury convicted Honken, but rejected the death penalty for the murders of the adults. *1093 Under these circumstances, Johnson argues that imposition of the death penalty upon her for only aiding and abetting the murder of the adults would be constitutionally disproportionate in violation of the Eighth Amendment.
In her supporting brief, Johnson contends that the court has the inherent power to reject death as a possible punishment in this case as either unconstitutional or as arbitrary under the statute. She contends that judicial review of the possible penalty, either before or after trial, is a fundamental protection to which she is entitled. She points out that, even though the applicable statute labels the jury's verdict for death a "recommendation," it elsewhere makes that recommendation binding. Consequently, she contends that the statutory provisions permitting appellate review of arbitrariness suggest that the trial court should make such an "arbitrariness" determination in the first instance before bowing to the jury's binding recommendation. She argues, next, that relative culpability is an important sentencing concern and that "grossly" disproportionate treatment of capital co-defendants by the government must be rejected. For example, she points out that the courts and Congress have both recognized that less harsh treatment of equally culpable accomplices, or more culpable ringleaders, is an important mitigating factor in deciding whether to impose a life or death sentence. Indeed, she points out that a provision of the applicable death-penalty statute here, 21 U.S.C. § 848(m)(8), expressly provides that the fact that "[a]nother defendant or defendants, equally culpable in the crime, will not be punished by death" is a mitigating factor that "shall" be considered.
Finally, Johnson contends that, even if her conduct, as proved at trial, meets the "Enmund/Tison threshold" for imposition of the death penalty, fundamental fairness and proportionality should bar imposition of such a penalty, where Honken, the convicted "shooter," did not receive a death sentence for the killings of the three adult victims, and she is only charged as an aider and abettor. Thus, she contends that prosecuting her for a capital offense for these three murders "is irrational and disproportionate."
In resistance to Johnson's motion, the government contends that Johnson has cited no authority that would permit a federal trial court to bar the government from seeking the death penalty. Instead, the government points out that Johnson has relied on state cases holding that a trial court may conduct a proportionality review and bar the prosecution from seeking the death penalty. The government contends that even these state cases, to the extent that they involve the death penalty at all, involve a post-trial review of the evidence, not a pretrial preview and anticipatory ruling. Some of these state cases also involved state statutes that gave the trial judge the authority to determine the ultimate sentence, giving due consideration to the jury's verdict, but the applicable federal statute makes the jury's "recommendation" of a death sentence binding on the federal trial court. Here, the government points out that Johnson does not contend that any statutory basis for imposition of the death penalty is absent in her case.
The government also contends that the "relative culpability" argument upon which Johnson relies is a matter for the jury, not the court. The government points out that Honken did receive the death penalty, albeit not on all charges, so that there is no actual disproportionality in the government seeking the death sentence against Johnson. Next, the government points out that Johnson is wrong in her assertion that she is only charged as an "aider and abettor." While the government acknowledges that the primary evidence will be that *1094 Honken pulled the trigger during the murders, there will be sufficient evidence that Johnson did or may have pulled the trigger on one or more victims to make her the principal, not simply an "aider and abettor." The government also argues that, even if Johnson was not the "trigger man," she could be just as culpable as Honken, or more culpable than Honken, for the actual murders. For example, the government asserts that the evidence may show that Johnson pressured and urged Honken to commit the actual killings. Thus, the government contends that it is not proper to determine the culpability issue prior to the presentation of evidence. Finally, the government contends that the jury can, and must be instructed to, give consideration to the sentences imposed upon Honken as a mitigating factor in Johnson's case pursuant to 21 U.S.C. § 848(m)(8). However, the fact that relative culpability is a statutory mitigating factor, the government contends, does not make it appropriate to bar the death penalty at this point in the proceedings.
2. Analysis
Even assuming that the court has the authority to bar the government from seeking the death penalty, when the government has otherwise satisfied the requirements for the death penalty under 21 U.S.C. § 848, the court will not do so in this case, for several reasons. First, the premise of Johnson's motion to strike the death penalty is flawed. Johnson is not charged only as an "aider and abettor" in the murders of Greg Nicholson, Lori Duncan, Kandi Duncan, Amber Duncan, or Terry DeGeus. Rather, in each of the ten counts still at issue, the Second Superseding Indictment charges that Johnson "intentionally killed and counseled, commanded, induced, procured, caused, and aided and abetted the intentional killing of [the victim at issue], and such killing resulted." See Second Superseding Indictment, Counts I-X (emphasis added). The conviction of one co-defendant as a principal does not necessarily foreclose the conviction of another co-defendant as a principal, for example, because of the possible permutations of the roles of co-defendants in any offense. Cf. Standefer v. United States, 447 U.S. 10, 100 S. Ct. 1999, 64 L. Ed. 2d 689 (1980) (a defendant accused of aiding and abetting in the commission of a federal offense may be convicted after the named principal has been acquitted of that offense in a previous trial); United States v. Hornaday, 392 F.3d 1306, 1311 (11th Cir.2004) ("A defendant can be properly convicted as a principal under [18 U.S.C.] § 2 even when he has not personally `commit[ed] all the acts constituting the elements of the substantive crime aided.'"). Second, the death-penalty statute at issue here expressly places before the jury, as a mitigating factor, the question of the propriety of imposing the death penalty on a defendant whose co-defendant, "equally culpable in the crime, will not be punished by death." 21 U.S.C. § 848(m)(8). Therefore, the statutory scheme expressly contemplates the argument that Johnson believes should bar the death penalty in her case and places it before the jury. Moreover, that determination is to be made after consideration of all of the evidence, including the "penalty phase" evidence, not before the court pretrial. Indeed, the court concludes that Johnson's arguments in support of this motion are more properly directed to the jury or to the appellate court on post-trial review than to this court on pretrial motions.
Therefore, Johnson's December 8, 2004, Motion To Strike Death Penalty (docket no. 230) will be denied.
G. The Defendant's Motion To Exclude Prior Jury Determinations As To Honken
The next motion before the court is the defendant's December 10, 2004, Motion *1095 In Limine Re: Prior Determinations Of Guilt And Punishment Re: Dustin Honken (docket no. 234). This motion seeks exclusion, during jury selection, opening statements, trial, or closing arguments, of evidence of the following matters: (1) Honken's guilty plea and sentence in 1997 on drug-trafficking offenses or his conviction, and (2) the "penalty phase" verdict against Honken rendered by a jury in late 2004 in the companion case involving the murder of the same witnesses Johnson is charged with murdering. The government resisted this motion on December 27, 2004 (docket no. 257).
1. Arguments of the parties
In support of her motion, Johnson asserts that the rule is that evidence of a co-defendant's or alleged accomplice's conviction of an offense for which the defendant is being tried is ordinarily inadmissible. The reason for the rule, she contends, is that the defendant is entitled to have her guilt determined upon the evidence against her, not upon the disposition of charges against a co-defendant. Moreover, the defendant has a right to confront and cross-examine the witnesses against her, which she cannot do if the conviction is based on the conviction of a co-defendant. Because the charges in her case and in Honken's 2004 trial are interconnected, Johnson contends that it would be particularly damaging for the jury to hear in jury selection, opening statements, or closing arguments in her case about Honken's 2004 conviction. Johnson concedes that evidence that Honken was convicted of drug offenses in 1997 might be relevant, but the particular crimes for which he was charged and convicted and the nature of his punishment for those convictions are not.
The government resists Johnson's motion only in part. The government contends that it is proper to introduce evidence of the drug charges against Honken that led to his conviction in 1997, and the nature of his sentence for those crimes, although the government agrees that it would not be proper for the government to introduce evidence that Honken was convicted of the murder charges and related offenses in 2004 or evidence of the jury's "penalty phase" verdicts. However, the government reserves the right to respond if Johnson raises these issues during direct or cross-examination of any witnesses or through comments or arguments of counsel.
More specifically, as to Honken's 1997 conviction, the government contends that it is necessary to disclose to the jury that Honken was charged with distributing and attempting to manufacture methamphetamine to put in context his statements to Cutkomp, Cobeen, and others. The government also contends that evidence will be presented about events during and surrounding Honken's sentencing hearing in the 1997 conviction, although the government agrees that the actual sentence imposed on Honken as a result of his 1997 conviction is not relevant.
As to Honken's 2004 conviction, the government agrees that the jury could improperly infer that Johnson is guilty because another jury found her co-defendant guilty of the same offenses, so the government states that it will not introduce evidence of Honken's 2004 conviction or verdict for a death sentence, or mention them during any argument to the jury, during the "merits phase" in Johnson's case. However, the government points out that it would be equally improper for the jury to infer that Honken was acquitted from the absence of evidence about the disposition of his case. Therefore, the government requests that the court instruct the jury as follows:
Dustin Honken's case is the subject of a separate prosecution. You are not to *1096 concern yourself with that case, discuss it, or speculate about its outcome. Only defendant Angela Johnson is on trial in this case, and only on the charges contained in the indictment.
In short, the government asserts that Honken's 1996 charges and subsequent conviction in 1997 are admissible, but his sentence is not; Honken's 2004 conviction and jury "penalty" verdict are not admissible; and the jury should be instructed to disregard Honken's status.
2. Analysis
a. Honken's 1997 conviction
The parties agree that the fact of Honken's conviction in 1997 is relevant, and they also agree that his sentence on that conviction is not. However, Johnson contends that the "particular crimes" with which Honken was charged and to which he pleaded guilty in the earlier case are not relevant. The government, on the other hand, contends that it is necessary for the jury to know that Honken was charged with distributing methamphetamine and attempting to manufacture methamphetamine to put in context his statements to Cutkomp and Cobeen. The court concludes that the government has the better end of the disputed issues as to Honken's earlier conviction.
More specifically, Rule 403 of the Federal Rules of Evidence does not require exclusion of the evidence of the particular crimes with which Honken was charged in 1996 and to which he pleaded guilty in 1997. See FED. R. EVID. 403 (permitting the court to exclude relevant evidence, inter alia, if it is unfairly prejudicial). First, the court agrees that the fact that Honken was charged with distributing and attempting to manufacture methamphetamine is relevant to the context of Honken's statements to Cutkomp and Cobeen (although the court is less convinced, before evidence is presented, of the relevance of those statements to Johnson's case). Second, Johnson has not articulated in what way she would be prejudiced if the jury learns the charges to which Honken pleaded guilty in 1997, where she has not been charged with those same offenses.
Therefore, that part of Johnson's December 10, 2004, Motion In Limine Re: Prior Determinations Of Guilt And Punishment Re: Dustin Honken (docket no. 234) pertaining to Honken's conviction in 1997 will be granted as to exclusion of evidence or comment about his sentence for that conviction, but will be denied as to evidence of the specific charges against him.
b. Honken's 2004 conviction and verdict for a death sentence
The parties agree that neither Honken's conviction nor the jury verdict for a death sentence in late 2004 in the companion case involving nearly identical charges is admissible in this case. The rule excluding evidence of a co-defendant's guilty plea or conviction on similar charges is "`founded upon the notion that [such evidence] has only slight probative value on the question of the defendant's guilt, but is extremely prejudicial.'" United States v. Hutchings, 751 F.2d 230, 239 (8th Cir.1984) (McMillian, concurring) (quoting United States v. Miranda, 593 F.2d 590, 594 (5th Cir.1979)). The court agrees that the rule applies here, because of the significant potential for prejudice that could arise from the possibility that jurors will assume, on the basis of Honken's conviction, that Johnson is guilty of the identical charges. Therefore, such evidence should be excluded in this case. Furthermore, the court agrees that the jury should be instructed that Honken's case is separate from this one; that only Johnson, not anyone else, is on trial in this case; and that Johnson is on trial only for the charges against her, not for anything else.
Therefore, that part of Johnson's December 10, 2004, Motion In Limine Re: *1097 Prior Determinations Of Guilt And Punishment Re: Dustin Honken (docket no. 234) regarding Honken's 2004 conviction and jury verdict for a death sentence will be granted. Evidence of Honken's 2004 conviction and verdict for a death sentence will be excluded and the court will instruct the jury that it must give separate consideration to the charges against Johnson.
H. The Defendant's Motion For A Bill Of Particulars
The third motion by the defendant now before the court is Johnson's December 23, 2004, Motion For Bill Of Particulars On Counts 1-12 (docket no. 253), to the extent that the motion pertains to the remaining Counts, Counts 1 through 10. The government originally responded to the motion only to the extent that it pertained to Counts 11 and 12, asserting that the motion was moot as to those Counts (docket no. 283). The government subsequently supplemented its response to address the motion as it pertains to Counts 1 through 10 (docket no. 291).
1. Arguments of the parties
In support of her motion, Johnson contends that she is entitled to a particularized statement of the following: (1) as to Counts 1 through 5, identification of all known but unindicted co-conspirators; and (2) as to Counts 6 through 10, identification of all known supervisees, supervisors, managers, and organizers. She notes that she has previously obtained the requested relief as to the original indictment by order dated June 21, 2002, affirming the ruling of United States Magistrate Judge Paul A. Zoss dated November 9, 2001. She requests that these rulings be made applicable to the Counts of the Second Superseding Indictment. Indeed, at the hearing on the "second round" of pretrial motions, Johnson represented that the sole purpose of this motion was to make sure that the court's prior rulings and the bills of particulars filed pursuant to those rulings still apply to the Second Superseding Indictment.
In response to Johnson's written arguments, the government contended that Johnson's motion for a bill of particulars should be summarily denied. The government asserted that Johnson has already fully litigated the issues presented, and obtained relief, first, by order dated June 21, 2002, to which her motion refers, then again as to the Superseding Indictment by order dated November 26, 2002. The government contended that it provided a bill of particulars as to the Superseding Indictment on December 4, 2002, and that Johnson has never challenged the adequacy of that bill of particulars. The government also contended that no further specification of charges is required for the Second Superseding Indictment, because the Second Superseding Indictment did not materially change Counts 1 through 10, even though it eliminated some of the alleged violations of the narcotics laws and compressed the time of the alleged conspiracy. The government pointed out that Johnson has not identified any part of the Second Superseding Indictment that calls for a bill of particulars. To the extent necessary to clarify matters, the government adopted its previously filed bills of particulars with respect to the Second Superseding Indictment. At the hearing, the government reiterated its adopt its prior bills of particulars.
2. Analysis
The court finds that this motion has been mooted by Johnson's clarification that her goal was to make sure that the prior rulings and bills of particulars apply to the Second Superseding Indictment, and by the government's acknowledgment that its bills of particulars do apply. Thus, Johnson has already obtained all of the *1098 relief for which she prays in this motion. Therefore, to the extent that the motion pertains to the remaining Counts, Counts 1 through 10, the motion will be denied as moot.
I. The Defendant's Motion To Strike Certain Allegations In Counts 6 Through 10
The next motion before the court is Johnson's December 23, 2004, Motion To Strike Allegations Contained In Counts 6-10 (docket no. 254). This motion seeks an order striking the violations alleged in paragraphs 1, 2, and 4 of Counts 6 through 10. The government resisted the motion on December 30, 2004 (docket no. 262), and Johnson filed a reply in further support of her motion on January 7, 2005 (docket no. 275).
1. Arguments of the parties
In support of this motion, Johnson asserts that some of the fifteen paragraphs alleging various violations of the federal narcotics laws, as elements of the CCE offense, fail to allege violations with any specificity sufficient to give notice. More specifically, she alleges that the violations alleged in paragraphs 1, 2, and 4 lack sufficient specificity as to such matters as time, place, or persons involved. She asserts that the insufficiency of these allegations cannot be saved by a bill of particulars.
In response, the government contends that the court has already rejected, by order dated February 23, 2003, Johnson's contentions that these allegations, as stated in the Superseding Indictment, are surplusage, prejudicial, or inflammatory. The government contends that, if anything, the allegation of these violations is more specific in the Second Superseding Indictment, as the dates alleged for the offenses are now "from about [a year] to and including [a year]," instead of "between about [a year] and [a year]."
In her reply, Johnson acknowledges that the court has ruled on a similar motion, but she represents that, for some reason, that ruling was not in defense counsel's pleading file. Nevertheless, she contends that the government has missed the point of her motion: Her point is that the allegations are too vague for her to frame a response, in that they fail to provide necessary detail concerning, for example, the time, place, or persons involved. She is not reiterating her contention that any allegations are surplusage, prejudicial, or inflammatory.
2. Analysis
The court agrees that the government's response misses the point of the present motion, because Johnson does not assert that the allegations in paragraphs 1, 2, and 4 of Counts 6 through 10 are surplusage, prejudicial, or inflammatory; rather, she argues that they are too vague for her to frame a response. The court has reviewed the paragraphs in question and finds that they are, indeed, vague, alleging little more than that at places unknown on dates unknown within a six-year period some or all of the alleged participants in the CCE distributed methamphetamine, possessed methamphetamine with intent to distribute it, or used communications facilities to facilitate the commission of drug offenses.
Nevertheless, the court finds that striking the allegations is not an appropriate remedy. Johnson has waived the issues she asserts in the present motion by failing to object to the November 26, 2002, order of Magistrate Judge Paul A. Zoss denying the portion of her request for a bill of particulars seeking specification of the locations, substance, time, place, and date of each overt act in paragraphs 1 through 18 of Counts 6 through 10 of the Superseding Indictment. See Order of November 26, 2002 (docket no. 147). The allegations in paragraphs 1, 2, and 4 of the Second Superseding *1099 Indictment have only changed to the extent that allegations of the timeframe of the alleged violations has been stated more specifically. In short, Johnson has litigated the very issue she attempts to resurrect now, lost, and failed to pursue timely review. While the court hopes that the government will voluntarily provide a clearer specification of the challenged violations underlying the CCE offense, based on clarifications from the Honken trial and preparation for trial in this case, the court will not order the government to do so.
Therefore, Johnson's December 23, 2004, Motion To Strike Allegations Contained In Counts 6-10 (docket no. 254) will be denied.
J. The Defendant's Motion To Trifurcate The Proceedings
In the course of oral arguments, the last motion before the court in this "round," the defendant's January 7, 2005, Motion To Trifurcate Proceedings (docket no. 274), became one of the most contentious. In this motion, Johnson seeks an order "trifurcating" trial into the following phases: (1) a "merits phase" on the elements of the capital offenses; (2) a "gateway phase" on the "gateway factors" for imposition of the death penalty; and (3) a "weighing phase," involving any other aggravating and mitigating factors. The government resisted the motion on January 18, 2005 (docket no. 292).
1. Arguments of the parties
a. Written submissions
In her written submissions in support of her motion, Johnson contends that the "penalty phase" of a capital trial such as this one actually has two components that are legally and factually distinct: (1) the determination of certain "gateway" factors, which make the death penalty available; and (2) determination, from weighing of all aggravating and mitigating factors, of whether the death penalty is an appropriate punishment. Johnson contends, further, that much of the evidence concerning other aggravating factors is not relevant to, and should not be considered by the jury as to, the "gateway" factors. She contends that this is so, in large part, because the evidence concerning other aggravating factors is so emotionally charged that it is unfairly prejudicial as to the "gateway" factors. Johnson next argues that the "gateway" factors are functionally equivalent to "elements" of the offenses, because the death penalty cannot be imposed except upon the finding of one or more of those factors, so that the hearing on "gateway" factors is logically a "trial," not a "sentencing hearing." She asserts that there are differences in relevance and other evidentiary standards between a trial and a sentencing hearing, and that application of the rules of evidence to determination of all "elements" is necessary to assure reliability of the outcome and to maintain the presumption of innocence.
Johnson contends that the only possible remedy for these evils is to bifurcate the "penalty phase" into separate proceedings. The first phase of such proceedings would require the government to prove beyond a reasonable doubt the necessary aggravating factors for imposition of the death penalty. Then, a separate second phase would require a weighing of mitigating factors and aggravating factors
The government characterizes Johnson's argument as an assertion that evidence of non-statutory aggravating factors must not be heard before the jury determines whether the government has proved the "gateway" factors that decide a defendant's "eligibility" for the death penalty. The government, however, contends that the Constitution is not violated when a jury considers both statutory and non-statutory aggravating factors in one proceeding, and that Johnson's proposed "trifurcation" *1100 of proceedings is contrary to the scheme authorized in the controlling statute, 21 U.S.C. § 848.
The government points out, first, that under 21 U.S.C. § 848, the government must prove one of the "gateway" aggravating factors listed in 21 U.S.C. § 848(n)(1), then at least one other statutory aggravating factor in 21 U.S.C. § 848(n)(2) through (n)(12), before the defendant is eligible for the death penalty.[15] The government also maintains that it intends to prove several "non-statutory" aggravating factors, including "future dangerousness," "impact on the victims' families," "obstruction of justice," and "the killing of more than one person in a single criminal episode."
The government concedes that the "statutory" aggravating factors can be presumed to be the "functional equivalents of elements," and as such, must be contained in the indictment and found by a jury beyond a reasonable doubt. It does not follow, the government contends, that the jury must find these factors during something called a "trial" versus a "penalty phase" or "sentencing proceeding." Indeed, the government points out that Johnson has cited no authority for the proposition that the proceeding in which the government attempts to prove such "elements" is a "trial" subject to all protections applicable to any trial of a criminal offense. The applicable statute is to the contrary, the government contends, because it provides for proof of all "aggravating factors" after guilt on the underlying crime has been established. What is required to protect the defendant's constitutional rights, the government contends, is the charging of the aggravating factors in the indictment and proof of those factors beyond a reasonable doubt, not "trifurcation" of the proceedings.
Although the government has been unable to find a published decision requiring such "bifurcation" of the "penalty phase," the government points out that the Fourth Circuit Court of Appeals rejected an argument for such a procedure in Booth-El v. Nuth, 288 F.3d 571, 582-83 (4th Cir.2002). The government also argues that, in this case, only two of the non-statutory aggravating factors, "future dangerousness" and "victim impact," require additional proof beyond the evidence presented during the "merits phase." Finally, the government contends that any possible confusion about what evidence applies to what factors can be cured by proper limiting instructions from the court.
b. Oral arguments
The oral arguments on this motion were, to say the least, animated. One point of agreement was nevertheless clear: Both parties agree that, in this case, there will be no additional evidence offered by either party on the "gateway" factors in § 848(n)(1) or the "statutory" aggravating factors in § 848(n)(2) through (12). Rather, the evidence pertaining to these factors will all be presented in the "merits phase." Indeed, the government reiterated that it intends to offer additional proof in the "penalty phase" only on the "non-statutory" aggravating factors of "future dangerousness" and "victim impact." Thus, even if there is a separate "gateway" phase, it will not involve the presentation of any *1101 evidence, only argument, instruction, and jury determination on certain factors.
Johnson's theme at the hearing seemed to be that the jury is supposed to recognize the difference between determinations of "guilt" and "punishment," but that combining determination of the "gateway" factors with the other aggravating factors would allow such emotional evidence as victim impact statements and information concerning "future dangerousness" inevitably to "bleed into" the jurors' determination of the "gateway" factors in a prejudicial way. Balanced against the value of "trifurcation" to avoid such prejudice, she contended, the only "downside" is a slightly lengthened process, particularly where, as here, no additional evidence will be offered in support of the "gateway" aggravating factors. The government's themes, on the other hand, were that Johnson's proposal is contrary to the statutory scheme for penalty determination in § 848 and that it would allow defense counsel to obscure from the jury the fact that all of the prior evidence from the "merits phase" of the trial and all of the aggravating factors must be considered in determining the final balance of aggravating and mitigating factors.
The court suggested that Johnson's concerns could be ameliorated by including in the "merits phase" appropriate instructions on the "gateway" aggravating factors and requiring the jury to answer interrogatories in its "merits phase" verdict form concerning the "gateway" aggravating factors, in the event the jury found Johnson guilty. Neither party found this suggestion acceptable. Johnson objected to the court's proposal, because she contended that such a process would obscure the purpose of the "gateway" factors, where determinations of guilt and determinations on the "gateway" factors serve different purposes. She argues that moving from the determination of "guilt" to the determination of "punishment" is such an important step, that the determinations should be made in separate proceedings. The government contended that the court's proposed scheme departed from the statutory "penalty phase" scheme; indeed, the government indicated that it would prefer the defendant's proposed "trifurcation" to combining the determination of "gateway" factors with the determination on the "merits" of the charges against Johnson.[16]
*1102 c. Post-hearing inquiry
In the course of preparing this ruling, the court determined that it required clarification on one point pertinent to this motion. Therefore, by letter to all counsel dated February 4, 2005, the court requested clarification of whether the defendant proposes that the "second phase" (or "first penalty phase") would be limited to jury determination on the "gateway" aggravating factors identified in 21 U.S.C. § 848(n)(1), or that this "second phase" would also involve jury determination on the "statutory" aggravating factors identified in 21 U.S.C. § 848(n)(2) through (12). The court explained in its letter that the reason for its question was that, like one "gateway" aggravating factor, at least one "statutory" aggravating factor must also be found before the death penalty can be imposed. See 21 U.S.C. § 848(k). To that extent, a "statutory" aggravating factor, like a "gateway" aggravating factor, is the "functional equivalent of an element," because it is necessary for the imposition of the death penalty under 21 U.S.C. § 848. Moreover, the court explained that it understood the parties' representations to be that no additional evidence would be presented in this case on either the "gateway" or "statutory" aggravating factors at issue, so that only argument would be involved in the "eligibility" phase, if any. The court also explained that it understood the defendant's contention to be that she will be prejudiced if the jury hears "information," not subject to the rules of evidence, that applies only to the "non-statutory" aggravating factors and mitigating factors before the jury makes its determination on the factors necessary for the defendant to be "eligible" for the death penalty. The court opined that this "prejudice" does not arise if the "gateway" and "statutory" aggravating factors are considered in the same "phase," but that such "prejudice" could arise if the proceedings on "statutory" aggravating factors occurred with the proceedings on the "non-statutory" aggravating factors, mitigating factors, and the balance of factors.
In light of these concerns, the court asked the defendant to clarify whether she was advocating one of the following options or something else altogether. The court also asked the government to clarify which of the following options the government found least objectionable:
Option A:
Phase I: "Merits" Phase II: "Eligibility" Phase III: "Penalty"
Determination of guilt or Determination of "gateway" Determination of the appropriate
innocence on § 848 offenses factors identified in penalty, requiring
§ 848(n)(1) (not more than determination of
one) (a) "statutory" aggravating
factors identified in
§ 848(n)(2) through (12)
(one or more),
(b) "non-statutory" aggravating
factors,
*1103
(c) mitigating factors, and
(d) the balance of all factors
to "recommend" life or
death sentence
Option B:
Phase I: "Merits" Phase II: "Eligibility" Phase III: "Penalty"
Determination of guilt or Determination of factors Determination of the appropriate
innocence on § 848 offenses required for the defendant penalty, requiring
to be "eligible" for the death determination of
penalty: (a) "non-statutory" aggravating
(a) "gateway" factors identified factors,
in § 848(n)(1) (not more (b) mitigating factors, and
than one); and (c) the balance of all factors
(b) "statutory" aggravating to "recommend" life or
factors in § 848(n)(2) death sentence
through (12) (one or more)
Johnson's counsel responded by e-mail that she was advocating "Option B." In its e-mail response, the government indicated its view that "Option B" makes more sense than "Option A," for the reasons that the court had indicated, although the government could not state an opinion that one option was necessarily any less objectionable than the other.
2. Analysis
The court notes, first, that 21 U.S.C. § 848 does not specifically provide for the "trifurcated" proceeding that Johnson seeks. Rather, 21 U.S.C. § 848(i) and (j) provide that, after a defendant is found guilty of a death-eligible offense, the penalty will be determined in a separate "sentencing" hearing. In other words, the proceedings are "bifurcated" into what this court has called the "merits" and "penalty" phases, and the "penalty" phase involves determination of all aggravating factors and mitigating factors. Therefore, the court must determine whether the Constitution requires the "trifurcation" that Johnson seeks, and if not, whether such "trifurcation" is nevertheless justified on other grounds.
a. Constitutional requirements
The court is not persuaded by Johnson's contention that proceedings that are only "bifurcated" as provided in § 848(j) violate the Supreme Court's Apprendi line of cases, because those proceedings do not provide for determination of "gateway" and "statutory" aggravating factors, which must be established before the death penalty can be imposed, in a "trial." Rather, the court agrees with the government that what the Supreme Court's Apprendi line of cases requires, to satisfy constitutional standards, is that any aggravating factor, without which the death penalty cannot be imposed, must be charged in an indictment and proved to a jury beyond a reasonable doubt. See United States v. Booker, ___ U.S. ___, 125 S. Ct. 738, 160 L. Ed. 2d 621 (2005); Ring v. Arizona, 536 U.S. 584, 603-08, 122 S. Ct. 2428, 153 L. Ed. 2d 556 (2002); Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L. Ed. 2d 435 (2000). This line of cases simply does not require that such aggravating factors be proved in a proceeding designated a "trial" as opposed to a "sentencing proceeding" or "penalty phase." See also Booth-El v. Nuth, 288 F.3d 571, 582-83 (4th Cir.2002) (rejecting a state prisoner's habeas claim that his due *1104 process rights were violated when the trial judge refused to bifurcate the penalty phase, so that the jury would determine whether he was a "first degree principal" in a murder, as required to be eligible for the death penalty, before determining aggravating and mitigating factors, because no clearly established federal law required such bifurcation); Evans v. Smith, 54 F. Supp. 2d 503, 531 (D.Md.1999) (concluding on habeas review of a state capital conviction that the defendant was not entitled to a two-phase sentencing hearing, in which the jury would first determine whether the defendant was a "first degree principal," and only if they so found, consider aggravating and mitigating factors in a second phase, because there was "no constitutional necessity" to bifurcate sentencing, when bifurcation of the merits and penalty phases is not constitutionally required), aff'd, 220 F.3d 306 (2000) (not considering the bifurcation issue on appeal); and compare Williams v. Chrans, 742 F. Supp. 472, 477 & n. 1 (N.D.Ill.1990) (explaining that ILL. REV. STAT. CH. 38, ¶ 9-1 (1977), provides for a "bifurcated capital sentencing hearing": in the first "eligibility" phase, the government "must prove the existence of at least one of seven aggravating factors beyond a reasonable doubt," and in the second "aggravation/mitigation phase," the state "presents evidence of and argues any aggravating factor and the defendant presents evidence of and argues any mitigating factors"), aff'd, 945 F.2d 926 (7th Cir.1991) (not considering the bifurcation issue).
In this case, the government did charge the "gateway" and "statutory" aggravating factors on which it intends to rely in the Second Superseding Indictment. See Second Superseding Indictment, "Findings under 21 U.S.C. § 848(n)" (charging "Threshold Culpability Factors Under 21 U.S.C. § 848(n)," alleging conduct satisfying 21 U.S.C. § 848(n)(1)(A), (B), and (C), and "Aggravating Factors Enumerated Under 21 U.S.C. § 848(n)," alleging conduct satisfying 21 U.S.C. § 848(n)(8), (9), and (12)). Furthermore, in this case, as in Honken's case, the court will instruct the jury that one of the "gateway" aggravating factors alleged and at least one of the "statutory" aggravating factors alleged must be proved beyond a reasonable doubt before the defendant is eligible for the death penalty. See United States v. Honken, No. CR 01-3047-MWB (N.D.Iowa), Final "Penalty Phase" Jury Instructions Nos. 2 and 3 (docket no. 524).
Nevertheless, the court need not decide whether or not there is a violation of the constitutional requirements identified in the Apprendi line of cases in the "penalty phase" proceedings contemplated by 21 U.S.C. § 848, nor address the likelihood of such an Apprendi violation in this case. This is so, because the court finds that the "trifurcation" issue can be decided on non-constitutional grounds. See United States v. Turechek, 138 F.3d 1226, 1229 (8th Cir.1998) ("While federal courts are obliged to decide constitutional questions when necessary to the resolution of a dispute before them, `they have an equally strong duty to avoid constitutional issues that need not be resolved in order to determine the rights of the parties to the case under consideration.'") (quoting County Court v. Allen, 442 U.S. 140, 154, 99 S. Ct. 2213, 60 L. Ed. 2d 777 (1979)).
b. Other grounds for "trifurcation"
i. Statutory limitations on the "information" presented at sentencing. Although the court finds that the controlling statute, 21 U.S.C. § 848, expressly provides for only a "bifurcated" proceeding consisting of a "guilt" or "merits" phase and a separate "sentencing" or "penalty" phase the court nevertheless finds that the "trifurcation" that Johnson seeks is not necessarily inconsistent with the statutory scheme. The controlling *1105 statute permits the jury to consider "information" rather than "evidence" at the sentencing phase of a capital offense. See 21 U.S.C. § 848(j) ("information relevant to such mitigating or aggravating factors may be presented by either the Government or the defendant, regardless of its admissibility under the rules governing admission of evidence at criminal trials"). At the same time, it also provides that "information" may be excluded in the "penalty phase" for a § 848 offense "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury." 21 U.S.C. § 848(j). This limitation appears to be analogous to the limitation on "evidence" in Rule 403 of the Federal Rules of Evidence, which permits the court to exclude "evidence" that is "relevant," inter alia, "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury." Fed. R. Evid. 403; see also Justin D. Flamm, Due Process on the "Uncharted Seas of Irrelevance": Limiting the Presence of Victim Impact Evidence at Capital Sentencing after Payne v. Tennessee, 56 WASH. & LEE L. REV. 95, 310-311 (1999) (noting that the similar evidentiary limitation in the Federal Death Penalty Act, 18 U.S.C. § 3593, is "clearly analogous to Federal Rule of Evidence 403," although § 3593 lacks the word "substantially," suggesting "a lower threshold for exclusion applies at a capital sentencing hearing").[17] Thus, even under this capital sentencing scheme, the court retains at least part of its "gatekeeper" function under Rule 403 to balance probative value of the "information" to be presented against its "danger of unfair prejudice, confusion of the issues, or misleading the jury." See also United States v. Pretlow, 779 F. Supp. 758, 770-71 (D.N.J.1991) (concluding that this evidentiary standard in § 848(j) "is adequate to meet constitutional demands" by preventing the admission of "unreliable" information in a capital sentencing phase). The court will consider whether these limitations justify some form of "trifurcation" of the proceedings, should Johnson be found guilty of a capital offense under 21 U.S.C. § 848.
ii. "Probative value." Section 848(j), like Rule 403, provides that the court may assess the "probative value" of "information" proffered during the sentencing proceedings. Therefore, the court must assess whether there is any "probative value" to considering information concerning "non-statutory" aggravating factors to a jury's determination of "gateway" and "statutory" aggravating factors. The court concludes that there is none.
First, there is no reason to suppose that "probative value" within the meaning of § 848(j) means anything different than "probative value" within the meaning of Rule 403 of the Federal Rules of Evidence. "Probative value" within the meaning of Rule 403, in turn, is essentially the "relevance" of the evidence (or "information"), which is defined in Rule 401 to mean "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." FED. R. EVID. 401.
In this case, the government has repeatedly stated that it does not intend to present any "information" in the "penalty phase" concerning the "gateway" and "statutory" aggravating factors in addition to what will be presented in the "merits phase." In such circumstances, the information concerning the "non-statutory" *1106 aggravating factors in the "penalty" phase has no probative value to the determination of the "gateway" and "statutory" aggravating factors, because it has no tendency to make any fact that is of consequence to the determination of the "gateway" or "statutory" aggravating factors more probable or less probable than it would be without that information. Cf. FED. R. EVID. 401 (so defining "relevance" of "evidence"). Even assuming that there may be some "probative value" to the totality of the "information" presented in a § 848 sentencing proceeding to the determination of specific "gateway" or "statutory" aggravating factors an inference that could be drawn from Congress's provision for the hearing of all aggravating and mitigating factors in a single sentencing proceeding that probative value in this case is extraordinarily weak, where the government concedes that it can prove the "gateway" and "statutory" aggravating factors without any of the "penalty phase" information. The Supreme Court itself has "distinguished between two different aspects of the capital sentencing process, the eligibility phase and the selection phase." Buchanan v. Angelone, 522 U.S. 269, 273, 118 S. Ct. 757, 139 L. Ed. 2d 702 (1998); Tuilaepa v. California, 512 U.S. 967, 971, 114 S. Ct. 2630, 129 L. Ed. 2d 750 (1994). Courts and commentators alike have recognized that evidence of "non-statutory" aggravating factors, in particular "victim impact" evidence, while relevant to the "selection" phase, simply is not relevant to the "eligibility" phase. See, e.g., Joshua D. Greenberg, Is Payne Defensible?: The Constitutionality Of Admitting Victim-Impact Evidence At Capital Sentencing Hearings, 75 IND. L.J. 1349, 1365-66 & n. 87 (2000) (citing state cases holding that "victim impact" evidence is irrelevant to the "eligibility" phase of a death sentence determination).[18]
In short, the court finds no substantial reason why the "gateway" and "statutory" aggravating factors must be considered with the "non-statutory" aggravating factors in a single-stage "penalty" proceeding, where the jury's consideration of the "gateway" and "statutory" aggravating factors is entirely severable factually from the jury's consideration of any other factors. Therefore, the "probative value" side of the § 848(j) balance in this case is slight or nonexistent.
iii. "Prejudice." On the other side of the balance, the court finds that there is substantial merit to Johnson's contention that she would be "unfairly prejudiced" if the jury hears evidence of "non-statutory" aggravating factors before the jury decides whether the "gateway" and "statutory" aggravating factors have been proved beyond a reasonable doubt. Again, by analogy to Rule 403, "unfair prejudice" in the context of § 848(j) means having "`an undue tendency to suggest decision on an improper basis.'" United States v. Gabe, 237 F.3d 954, 959-60 (8th Cir.2001) (quoting United States v. Yellow, 18 F.3d 1438, 1442 (8th Cir.1994)). The court finds that "information" concerning "non-statutory" aggravating factors has such an "undue tendency" to suggest decision on the "gateway" and "statutory" aggravating factors on an improper basis.
More specifically, I have already presided over the "penalty phase" in the companion case against Dustin Honken. This case will likely involve "victim impact" evidence *1107 that is substantially similar to the "victim impact" evidence in Honken's case, because this case involves the same alleged murders of the same victims. I can say, without hesitation, that the "victim impact" testimony presented in Honken's trial was the most forceful, emotionally powerful, and emotionally draining evidence that I have heard in any kind of proceeding in any case, civil or criminal, in my entire career as a practicing trial attorney and federal judge spanning nearly 30 years. Indeed, I cannot help but wonder if Payne v. Tennessee, 501 U.S. 808, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991), which held that victim impact evidence is legitimate information for a jury to hear to determine the proper punishment for capital murder, would have been decided the same way if the Supreme Court Justices in the majority had ever sat as trial court judges in a federal death penalty case and had observed first hand, rather than through review of a cold record, the unsurpassed emotional power of victim impact testimony on a jury. It has now been over four months since I heard this testimony in the Honken trial and the juror's sobbing during the victim impact testimony still rings in my ears. This is true even though the federal prosecutors in Honken used admirable restraint in terms of the scope, amount, and length of victim impact testimony. To pretend that such evidence is not potentially unfairly prejudicial on issues to which it has little or no probative value is simply not realistic, even if the court were to give a careful limiting instruction. Rather, such potent, emotional evidence is a quintessential example of information likely to cause a jury to make a determination on an unrelated issue on the improper basis of inflamed emotion and bias sympathetic or antipathetic, depending on whether one is considering the defendant or the victims' families. Cf. Gabe, 237 F.3d at 959-60 (defining "unfair prejudice" for purposes of Rule 403 as " `an undue tendency to suggest decision on an improper basis'").
Nor are my observations idiosyncratic. See, e.g., Payne, 501 U.S. at 825, 111 S. Ct. 2597 (although victim impact evidence is legitimate information for a jury to hear to determine the proper punishment for capital murder, such evidence may nevertheless be "so unduly prejudicial that it renders the trial fundamentally unfair," in which circumstances, the Due Process Clause provides a remedy); id. at 864, 111 S. Ct. 2597 (Stevens, J., dissenting) ("Irrelevant victim impact evidence that distracts the sentencer from the proper focus of sentencing and encourages reliance on emotion and other arbitrary factors necessarily prejudices the defendant."); South Carolina v. Gathers, 490 U.S. 805, 810-811, 109 S. Ct. 2207, 104 L. Ed. 2d 876 (1989) (reiterating the conclusion in Booth, infra, concerning the prejudicial effect of victim impact evidence and rejecting the contention that the specific victim impact evidence at issue related to the circumstances of the crime), overruled by Payne v. Tennessee, 501 U.S. 808, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991); Booth v. Maryland, 482 U.S. 496, 505-07, 107 S. Ct. 2529, 96 L. Ed. 2d 440 (1987) (concluding that "[a]llowing the jury to rely on [victim impact information] ... could result in imposing the death sentence because of factors about which the defendant was unaware, and that were irrelevant to the decision to kill," and that "[t]he prospect of a `mini-trial' on the victim's character is more than simply unappealing; it could well distract the sentencing jury from its constitutionally required task determining whether the death penalty is appropriate in light of the background and record of the accused and the particular circumstances of the crime"), overruled by Payne v. Tennessee, 501 U.S. 808, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991); see also, e.g., Bryan Myers & Edith Greene, The Prejudicial Nature of Victim Impact Statements, 10 PSYCHOL. *1108 PUB. POL'Y & L. 492 (2004) (exploring the extent to which victim impact statements are prejudicial to death sentence determinations); Niru Shanker, Getting a Grip on Payne and Restricting the Influence of Victim Impact Statements in Capital Sentencing: The Timothy McVeigh Case and Various State Approaches Compared, 26 HASTINGS CONST. L.Q. 711, 740 (1999) ("Thanks in part to poorly articulated parameters in Payne [v. Tennessee, 501 U.S. 808, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991)], victim impact testimony in capital sentencing walks a fine line between allowing particularized attention to the damage caused by the crime on the one hand, and leaving the jury to be inundated with prejudicial outpourings irrelevant to the defendant's guilt on the other."); Wayne A. Logan, Through the Past Darkly: A Survey of the Uses and Abuses of Victim Impact Evidence in Capital Trials, 41 Ariz. L. Rev. 143, 145 (1999) ("The state of the law seven years since Payne establishes... [that] many of the worst fears imagined in the wake of Payne have been realized. Highly prejudicial victim impact evidence is now routinely before capital juries, with precious little in the way of substantive limits, procedural controls, or guidance in how it is to be used in assessing the `deathworthiness' of defendants."); Amy K. Phillips, Thou Shalt Not Kill Any Nice People: The Problem of Victim Impact Statements in Capital Sentencing, 35 Am. CRIM. L. REV. 93, 101-113 (1997) (arguing that capital juries have a tendency to consider improper factors in sentencing, even in the absence of victim impact statements, so that victim impact statements exaggerate the extent to which improper factors influence capital sentencings).
Therefore, as a general matter and certainly in this case the danger of unfair prejudice arising from hearing "victim impact" evidence or evidence on other "non-statutory" aggravating factors before the jury makes its determination on the defendant's "eligibility" for the death penalty, on the basis of the "gateway" and "statutory" aggravating factors, substantially outweighs any probative value of such evidence to the determination of the defendant's "eligibility" for a death sentence.[19]
*1109 On the other hand, there is no potential for unfair prejudice if the jury hears argument and makes a determination on the "gateway" and "statutory" aggravating factors in one proceeding. First, no "information" in addition to what will already have been presented in the "merits phase" in this case will be presented in support of either kind of aggravating factor. Second, as the court noted above, the "gateway" and "statutory" aggravating factors have the same constitutional status under the Apprendi line of cases, in that the jury must find beyond a reasonable doubt one "gateway" factor and at least one "statutory" aggravating factor before Johnson is eligible for the death penalty. See 21 U.S.C. § 848(k).
Therefore, the court finds that Johnson has established one ground for excluding information from the "penalty" phase under § 848(j), "danger of unfair prejudice," as to consideration of "non-statutory" aggravating factors in the same proceeding as consideration of "gateway" and "statutory" aggravating factors. The court will consider the cure for such unfair prejudice below, after considering whether Johnson has established other statutory limitations on the "information" that can be presented in the "penalty phase" in this case.
iv. "Confusion of the issues." The court likewise concludes that the "confusion of the issues" ground for exclusion of information under § 848(j) also warrants exclusion of information concerning any other factors from the proceedings relating to the "gateway" and "statutory" aggravating factors in this case. See 21 U.S.C. § 848(j) (also permitting exclusion of information when its probative value is substantially outweighed by the potential for "confusion of the issues"). Again, in this case, the information concerning "gateway" and "statutory" aggravating factors is entirely severable from information concerning any other factor, where the government intends to rely only on evidence admitted in the "merits phase" to prove the "gateway" and "statutory" aggravating factors. Introduction of extraneous information into the jury's determination of the "gateway" and "statutory" aggravating factors could, thus, only tend to confuse the issues.
v. "Misleading the jury." Finally, the court finds that the "misleading the jury" ground for exclusion of information under § 848(j) also warrants exclusion of information concerning any other factors from the proceedings relating to the "gateway" and "statutory" aggravating factors in this case. See 21 U.S.C. § 848(j) (also permitting exclusion of information when its probative value is substantially outweighed by the potential for "misleading the jury"). If the jury is permitted to hear information on all of the factors in one proceeding, the jury is reasonably likely to be misled into believing that all information is pertinent to the determination of all factors and the balance of factors, when the process under § 848 is actually sequential and cumulative: The jury must first find the defendant guilty; then must find one "gateway" aggravating factor; then must find at least one "statutory" aggravating factor; then may find one or more "non-statutory" aggravating factors and one or more mitigating factors; then must balance all of the factors to determine the appropriate penalty. See 21 U.S.C. § 848(k).
The government, however, complains that separating the proceedings concerning the "gateway" and "statutory" aggravating factors from the proceedings concerning the other factors and the balance of the factors may allow the defense to *1110 mislead the jury into believing that its previous determinations on the "merits" and the "gateway" and "statutory" aggravating factors somehow become irrelevant to the final balancing. However, the cure for that potential problem is twofold: (1) The court must give proper instructions, which explain, inter alia, that all of the information is relevant to the final balancing of factors; and (2) the prosecution must engage in effective advocacy to direct the jury to a consideration of appropriate factors at the appropriate times.
Therefore, the court finds that Johnson has also established this "danger of misleading the jury" ground for excluding information from the "penalty" phase under § 848(j) as to consideration of "non-statutory" aggravating factors in the same proceeding as consideration of "gateway" and "statutory" aggravating factors.
c. The remedy
The cure for the potential unfair prejudice, confusion, and misdirection in this case, the court finds, is to restructure when the jury is instructed and when it makes its determinations on the various aggravating and mitigating factors. In United States v. Davis, 912 F. Supp. 938 (E.D.La.1996), the only published decision either the court or the parties have been able to identify considering a similar question, the court declared its intention to use the following process to avoid improper exposure to unrelated information at inappropriate times:
[I]f the penalty phase is reached in this case, the court is considering bifurcating the hearing into two parts. The first part would focus exclusively on the two findings the jury must make in order to consider the death penalty whether the intent element was established and whether at least one statutory aggravating factor was proven. This phase of the penalty hearing presumably would rely almost entirely upon the evidence already presented in the guilt phase and involve little, if any, additional information. It would nonetheless insure that the jury's findings as to intent and the statutory factors would not be influenced by exposure to the separate and unrelated nonstatutory factors and information. Should the jury make the two requisite threshold findings, the hearing would then continue into the presentation of the nonstatutory aggravating and mitigating information.
Davis, 912 F.Supp. at 949. The court agrees that a similar procedure will cure the potential prejudice, confusion, and misdirection problems, described above, in this case.
Specifically, this court will use "trifurcated" proceedings conforming to what the court and the parties have described as "Option B," which the court summarized as follows:
Phase I: "Merits" Phase II: "Eligibility" Phase III: "Penalty"
Determination of guilt or Determination of factors Determination of the appropriate
innocence on § 848 offenses required for the defendant penalty, requiring
to be "eligible" for the death determination of
penalty: (a) "non-statutory" aggravating
(a) "gateway" factors identified factors,
in § 848(n)(1) (not more (b) mitigating factors, and
than one); and (c) the balance of all factors
(b) "statutory" aggravating to "recommend" life or death
*1111
factors in § 848(n)(2) sentence
through (12) (one or more)
In other words, if the defendant is found guilty in the first phase of the trifurcated proceedings, the "merits phase," this case will enter the second phase. That phase, an "eligibility phase," will involve only argument, instruction, and deliberation on the "gateway" factors identified in § 848(n)(1) and the "statutory" aggravating factors in § 848(n)(2) through (12) that the government has identified as applicable here, because the government has represented that no additional evidence will be presented in this case on these factors. If the jury fails to find any "gateway" factor or fails to find at least one "statutory" aggravating factor for a charged offense on which Johnson has been found guilty, there will be no "penalty phase" to determine "non-statutory" and "mitigating" factors for that offense or to determine the balance of such factors, and the death penalty cannot be imposed for that offense. However, if the jury finds one "gateway" factor and at least one "statutory" aggravating factor beyond a reasonable doubt as to one or more capital offenses charged against Johnson, Johnson is "eligible" for the death penalty. Therefore, the case will continue with the third phase, the "penalty phase," in which the jury will consider the existence of "non-statutory" and "mitigating" factors and "whether the aggravating factors found to exist sufficiently outweigh any mitigating factor or factors found to exist, or in the absence of mitigating factors, whether the aggravating factors are themselves sufficient to justify a sentence of death." 21 U.S.C. § 848(k).
Therefore, notwithstanding that § 848 expressly provides for a "bifurcated" proceeding, the court concludes that § 848(j) permits, and the circumstances in this case require, that the proceedings in the case be "trifurcated," as described above. To that extent, Johnson's January 7, 2005, Motion To Trifurcate Proceedings (docket no. 274) will be granted.
III. CONCLUSION
At the end of another long and arduous journey, after again treading both familiar terrain and terra incognita, the motions filed on or before January 7, 2005, and heard on January 27, 2005, in docket number order, are resolved as follows:
1. The defendant's December 8, 2004, Motion To Strike Death Penalty (docket no. 230) is denied.
2. The defendant's December 10, 2004, Motion In Limine Re: Prior Determinations Of Guilt And Punishment Re: Dustin Honken (docket no. 234) is
a. granted to the extent that it seeks exclusion of evidence or comment about Dustin Honken's sentence for his 1997 conviction, but will be denied as to evidence of the specific charges against him in that case; and
b. granted to the extent that evidence of Honken's 2004 conviction and death sentence will be excluded and the court will instruct the jury that it must give separate consideration to the charges against Johnson.
3. The defendant's December 23, 2004, Motion For Bill Of Particulars On Counts 1-12 (docket no. 253), to the extent that the motion pertains to the remaining Counts, Counts 1 through 10, is denied as moot.
4. The defendant's December 23, 2004, Motion To Strike Allegations Contained In Counts 6-10 (docket no. 254) is denied.
5. The government's December 29, 2004, Motion To Permit Victim Witnesses To Observe The Guilt Phase Of Trial *1112 (docket no. 258), as supplemented on January 16, 2005 (docket no. 285), is granted.
6. The government's December 29, 2004, Motion For Use Of Witness Photographs During Arguments (docket no. 259) is granted on the following conditions:
a. A court employee will take a photograph of each witness, as the witness appeared while testifying, either before the witness's testimony has begun (as part of the "swearing in" process) or after the witness's testimony has concluded (as part of the process of dismissing the witness);
b. The photographs will be printed and compiled in a notebook;
c. Either party may use the photographs of witnesses in the course of their arguments at the conclusion of any phase of the trial to refresh jurors' memories about the testimony of any witness or group of related witnesses;
d. No party will be permitted to display more than one witness's photograph at any given time, unless that party has previously requested permission of the court to display simultaneously the photographs of a group of witnesses who testified on related matters and has shown the proposed display to opposing counsel;
e. No party may display all of the witnesses' photographs in a single display without prior permission of the court and may only present such a display for a limited period of time, not for the full duration of a closing argument; and
f. Unless a sufficient contrary showing is made upon the conclusion of all evidence in the "merits phase" of the trial, the notebook will be sent to the jury for the jury's use during deliberations.
7. Ruling is reserved on the government's December 29, 2004, Motion For Pretrial Ruling Regarding Admissibility Of Audio Recordings (docket no. 260). The admissibility of the audio recordings in question must be determined at trial. If sufficient foundation is laid, the recordings may be conditionally admitted pursuant to the "co-conspirator" and/or "forfeiture by wrongdoing" hearsay exceptions.
8. The government's December 30, 2004, Motion For Equal Number Of Peremptory Challenges And Request For Pretrial Ruling (docket no. 261) is granted to the extent that, if the court determines that pretrial publicity or other considerations warrant granting additional peremptory challenges beyond those expressly authorized by Rule 20(b), the court will grant both parties the same number of additional peremptory challenges.
9. The government's January 6, 2005, Motion For A Court Ordered Mental Examination Of Defendant, And Related Matters (docket no. 270) is
a. granted to the extent that on or before February 25, 2005, defendant shall supplement her notice of intent to present evidence of mental condition pursuant to Rule 12.2(b) to include the kinds of mental health professionals each of her experts is (e.g., "forensic psychiatrist", "neurologist", "clinical psychologist", etc.), as well as the specific nature of any testing that these experts have performed or will perform (e.g., MMPI-2, WAIS-2, etc.) in the course of their evaluation of Ms. Johnson;
b. granted to the extent that the government's deadline to respond to Johnson's notice is extended to and including March 11, 2005.
c. granted to the extent that the court orders and directs defendant Angela Johnson to submit to mental examinations, evaluations, or interviews by government mental health experts pursuant to Rule 12.2(c)(1)(B), subject to the following conditions and procedures:
*1113 i. By separate order, the court will appoint an "outside taint attorney" or "outside taint attorneys" to manage the government's mental health experts in this case;
ii. No "outside taint attorney" shall participate in the prosecution of Johnson at any stage of these proceedings;
iii. The "outside taint attorneys" shall provide Johnson's defense counsel with at least five days advance notice of any mental examinations or interviews of Johnson by the government's experts, including the "nature and scope" of such examinations or interviews;
iv. All testing or interviews conducted by the government's mental health experts pursuant to Rule 12.2(c)(1)(B) shall be audiotaped in their entirety and those tapes shall be provided to defense counsel by same-day or next-day delivery upon the conclusion of each testing or interview session. The recordings shall not be disclosed to the prosecutors in this case until and unless disclosures pursuant to Rule 12.2(c)(2) become appropriate.
d. The results of any mental examinations, evaluations, or interviews shall be subject to the limitations on disclosure and use stated in Rule 12.2(c)(2), (3), and (4).
10. The defendant's January 7, 2005, Motion To Trifurcate Proceedings (docket no. 274) is granted to the extent that the "merits phase" and "penalty phase" proceedings will be modified as explained herein.
IT IS SO ORDERED.
NOTES
[1] The court notes that there is no subdivision (C) to 18 U.S.C. § 1513(a)(1), nor does it appear that there ever has been. See 18 U.S.C.A. § 1513(a) & Historical and Statutory Notes. Notwithstanding this fact, Count 1 of the superseding indictment in Case No. CR 00-3034-MWB, which alleges that Johnson aided and abetted the killing of Gregory Nicholson, alleges that the killing was, inter alia, "in violation of Title 18, United States Code, Sections ... 1513(a)(1)(A) & (C)...." Superseding Indictment, Count 1.
[2] Thus, as compared to Count 6 of the superseding indictment in Case No. CR 00-3034-MWB, this count drops the portion of the charge alleging solicitation of Donaldson and Altimus to murder Daniel Cobeen.
[3] This count also differs from Count 7 of the superseding indictment of Case No. CR 00-3034-MWB, in that it deletes the portions of that Count that charged conspiracy to solicit the murders of Nicholson, the Duncans, and DeGeus.
[4] More specifically, the court concluded that dismissal of Counts 11 and 12 mooted the following "second round" motions: (1) the defendant's December 23, 2004, Motion To Order Government To Elect Between Counts 11 And 12 (docket no. 252); (2) Johnson's December 23, 2004, Motion For Bill Of Particulars (docket no. 253) to the extent that it relates to Counts 11 and 12; (3) Johnson's December 23, 2004, Motion To Dismiss Counts 11 & 12 Of Second Superseding Indictment Due To Statute Of Limitations (docket no. 255); and (4) Johnson's January 5, 2005, Motion To Sever Counts 11 And 12 (docket no. 269).
[5] The court denied the government's motion for an anonymous jury in Johnson's case in its ruling on the "first round" of pretrial motions.
[6] The first photograph below is of the composite display, proffered by the government, of the photographs of all fifty-four witnesses called by the prosecution during the "merits phase" of Honken's trial. The court includes this photograph here to provide a sense of the impact of such a composite display. The photographs were mounted on three display boards, but individual photographs were mounted with velcro, so that they could be taken off the board and displayed to the jury separately, as shown in the second photograph below.
The court did not permit the government to use the full display of prosecution witnesses in Honken's trial, because the issue of its use arose at the eleventh hour, immediately before final arguments, neither the defense nor the court had previously been shown the display, the defense strenuously objected to use of the full display on the grounds of surprise and prejudice, and there was little time for the court to reflect on the matter. The court did, however, permit the government to use individual photographs of witnesses during its closing argument. In the present case, the government has taken the precaution of raising prior to trial the issue of proper use of photographs of witnesses during trial and arguments. Therefore, after a fuller opportunity to consider the question, the court will allow the government to make limited use of the full display, as explained in the body of this order.
[7] In every case, this court has given the jury the following stock instruction, or something like it, on the weight of evidence, which is based in part on the quotation from Weiler above:
The weight of the evidence is not determined merely by the number of witnesses testifying as to the existence or non-existence of any fact. Also, the weight of the evidence is not determined merely by the number or volume of documents or exhibits. The weight of the evidence depends upon its quality, which means how convincing it is, and not merely upon its quantity. For example, you may choose to believe the testimony of one witness, if you find that witness to be convincing, even if a number of other witnesses contradict his or her testimony. The quality and weight of the evidence are for you to decide.
The court will also so instruct the jury in Johnson's case.
[8] The court will not rule here on whether or not a party may also use the photographs of prior witnesses to refresh a subsequent witness's memory concerning a prior witness's identity or testimony. If any party wishes to make such use of the photographs, that party must first seek leave of the court to do so.
[9] The government also invokes by reference its argument in a separate motion that Nicholson's statements are admissible pursuant to the "forfeiture by wrongdoing" exception to the hearsay rule in Rule 804(b)(6) and common law. The court has already ruled, in its ruling on the "first round" of pretrial motions, that the statements by Nicholson at issue here are conditionally admissible pursuant to the "forfeiture by wrongdoing" exception under Rule 804(b)(6) and the common law, and pursuant to the procedures outlined in United States v. Emery, 186 F.3d 921 (8th Cir.1999), cert. denied, 528 U.S. 1130, 120 S. Ct. 968, 145 L. Ed. 2d 839 (2000).
[10] Amsler v. United States, 381 F.2d 37 (9th Cir.1967), on which Johnson relies for the court's discretion to grant more than 20 strikes, is not actually helpful to Johnson. That case involved multiple defendants, so that it fell under the express grant of authority to award additional peremptory challenges in Rule 24(b). See Amsler, 381 F.2d at 45 ("The defendants ... should also have been allowed twenty peremptory challenges and such additional ones as the court in its discretion might allow.") (citing Rule 24(b)). Johnson's case is a single-defendant case and is distinguishable from Amsler on that ground alone.
[11] She also suggests that the delay in her own work in this area results from the failure of the circuit to act upon her funding request.
[12] The January 31, 2005, deadline for the government's response insisted upon by Johnson is obviously impractical, under the circumstances.
[13] Although the court indicated at the hearing that it was considering requiring videotaping of all testing and interviews of Johnson, defense counsel opined that audiotaping would be less intrusive, so that of the two procedures, defense counsel would prefer audiotaping. The court concludes that, under these circumstances, audiotaping is satisfactory.
[14] Indeed, the Advisory Committee's comments on these provisions reflect many of the Fifth and Sixth Amendment concerns that the court has already explored above, in reference to the details of the examinations. The pertinent parts of the Advisory Committee's explanation of these provisions are the following:
Additional changes address the question when the results of an examination ordered under Rule 12.2(b)(2) may, or must, be disclosed. The Supreme Court has recognized that use of a defendant's statements during a court-ordered examination may compromise the defendant's right against self-incrimination. See Estelle v. Smith, 451 U.S. 454, 101 S. Ct. 1866, 68 L. Ed. 2d 359 (1981) (defendant's privilege against self-incrimination violated when he was not advised of right to remain silent during court-ordered examination and prosecution introduced statements during capital sentencing hearing). But subsequent cases have indicated that the defendant waives the privilege if the defendant introduces expert testimony on his or her mental condition. See, e.g., Powell v. Texas, 492 U.S. 680, 683-84, 109 S. Ct. 3146, 106 L. Ed. 2d 551 (1989); Buchanan v. Kentucky, 483 U.S. 402, 421-24, 107 S. Ct. 2906, 97 L. Ed. 2d 336 (1987); Presnell v. Zant, 959 F.2d 1524, 1533 (11th Cir.1992) ; Williams v. Lynaugh, 809 F.2d 1063, 1068 (5th Cir.1987); United States v. Madrid, 673 F.2d 1114, 1119-21 (10th Cir.1982). That view is reflected in Rule 12.2(c), which indicates that the statements of the defendant may be used against the defendant only after the defendant has introduced testimony on his or her mental condition....
The proposed change in Rule 12.2(c)(2) adopts the procedure used by some courts to seal or otherwise insulate the results of the examination until it is clear that the defendant will introduce expert evidence about his or her mental condition at a capital sentencing hearing; i.e., after a verdict of guilty on one or more capital crimes, and a reaffirmation by the defendant of an intent to introduce expert mental-condition evidence in the sentencing phase. See, e.g., United States v. Beckford, 962 F. Supp. 748 (E.D.Va.1997). Most courts that have addressed the issue have recognized that if the government obtains early access to the accused's statements, it will be required to show that it has not made any derivative use of that evidence. Doing so can consume time and resources. See, e.g., United States v. Hall, supra, 152 F.3d at 398 (noting that sealing of record, although not constitutionally required, "likely advances interests of judicial economy by avoiding litigation over [derivative use issue]").
.... New Rule 12.2(c)(3) provides that upon disclosure under subdivision (c)(2) of the results and reports of the government's examination, disclosure of the results and reports of the defendant's expert examination is mandatory, if the defendant intends to introduce expert evidence relating to the examination.
.... As amended, Rule 12.2(c)(4) provides that the admissibility of [the defendant's statements during the course of an examination conducted under the rule] in a capital sentencing proceeding is triggered only by the defendant's introduction of expert evidence. The Committee believed that, in this context, it was appropriate to limit the government's ability to use the results of its expert mental examination to instances in which the defendant has first introduced expert evidence on the issue.
FED. R. CRIM. P. 12.2, Advisory Committee Comments, 2002 Amendments (emphasis added).
[15] The government explains that, at issue here, are the "gateway" factors in § 848(n)(1)(A) ("intentionally killed the victim"), (n)(1)(B) ("intentionally inflicted serious bodily injury which resulted in the death of the victim"), and (n)(1)(C) ("intentionally engaged in conduct intending that the victim be killed or that lethal force be employed against the victim, which resulted in the death of the victim"), and the "statutory" aggravating factors in § 848(n)(8) ("substantial planning and premeditation"), (n)(9) ("particularly vulnerable victim"), and (n)(12) ("offense committed in an especially heinous, cruel, or depraved manner").
[16] Although neither of the parties here embraced the court's proposal to incorporate determination of the "gateway" factors into the jury's determination of guilt or innocence, a similar scheme is established by statute in Ohio. See OHIO REV. CODE ANN. § 2929.03(2)(B) (1996) ("If the indictment or count in the indictment charging aggravated murder contains one or more specifications of aggravating circumstances listed in division (A) of section 2929.04 of the Revised Code, the verdict shall separately state whether the accused is found guilty or not guilty of the principal charge and, if guilty of the principal charge, ... whether the offender is guilty or not guilty of each specification. The jury shall be instructed on its duties in this regard. The instruction to the jury shall include an instruction that a specification shall be proved beyond a reasonable doubt in order to support a guilty verdict on the specification, but the instruction shall not mention the penalty that may be the consequence of a guilty or not guilty verdict on any charge or specification."); OHIO REV. CODE ANN. § 2929.03(2)(B) (effective March 23, 2005) (leaving this provision unchanged); see also Margery Malkin Koosed, Averting Mistaken Executions by Adopting the Model Penal Code's Exclusion of Death in the Presence of Lingering Doubt, 21 N. ILL. U.L. REV. 41, 104-08 (2001) (describing the Ohio scheme and explaining, inter alia, that "[t]he Ohio legislative framework adopted in 1981 requires that the aggravating circumstances or factors be proven beyond a reasonable doubt at the trial phase of the case").
On a related issue, this very insightful and thoughtful law review article was instrumental in dispelling the court's "residual doubts" about the correctness of its decision to instruct the jury in Honken's case that "residual doubt" is a mitigating factor that the jury may consider in making its choice between life or death at the "penalty phase." The question of whether or not to give such a "residual doubt" instruction in this case, however, is a matter that the parties were directed to brief by order dated January 15, 2005, and filed on January 18, 2005 (docket no. 288).
[17] The analogy between § 848(j) and Rule 403 is closer than the analogy between § 3593 and Rule 403, because § 848(j) does include the requirement that the probative value be "substantially" outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury.
[18] Useful discussions of the use and effect of victim impact evidence in death penalty cases can be found in the Cornell Law Review's 2003 Symposium Victims and the Death Penalty: Inside and Outside the Courtroom, 88 CORNELL L. REV. (2003), and the Stanford Law and Policy Review's 2004 Symposium Capital Concerns: The Death Penalty in America, 15 STAN. L. & POL'Y REV. (2004).
[19] The court by no means suggests that "victim impact" evidence is irrelevant to the jury's selection of the appropriate penalty in a particular capital case, because the impact of a crime on the victims is, inter alia, an appropriate measure of the defendant's "blameworthiness." See, e.g., Jones v. United States, 527 U.S. 373, 401-02, 119 S. Ct. 2090, 144 L. Ed. 2d 370 (1999) ("Even though the concepts of victim impact and victim vulnerability may well be relevant in every case, evidence of victim vulnerability and victim impact in a particular case is inherently individualized. And such evidence is surely relevant to the selection phase decision, given that the sentencer should consider all of the circumstances of the crime in deciding whether to impose the death penalty.") (citing Tuilaepa v. California, 512 U.S. 967, 976, 114 S. Ct. 2630, 129 L. Ed. 2d 750 (1994)) (emphasis in the original); Payne v. Tennessee, 501 U.S. 808, 825, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991) ("We are now of the view that a State may properly conclude that for the jury to assess meaningfully the defendant's moral culpability and blameworthiness, it should have before it at the sentencing phase evidence of the specific harm caused by the defendant."); id. at 827, 111 S. Ct. 2597 ("We thus hold that if the State chooses to permit the admission of victim impact evidence and prosecutorial argument on that subject, the Eighth Amendment erects no per se bar. A State may legitimately conclude that evidence about the victim and about the impact of the murder on the victim's family is relevant to the jury's decision as to whether or not the death penalty should be imposed. There is no reason to treat such evidence differently than other relevant evidence is treated."). Therefore, nothing the court says here should be taken as suggesting that the court will otherwise limit the admissibility of "victim impact" information or information of other "non-statutory" aggravating factors in the proper context of penalty selection at least not without a further assessment of whether, in that context, the probative value of the information is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1133184/ | 374 So. 2d 699 (1979)
ADR (a Division of National Life of Florida Corporation)
v.
Bartlett E. GRAVES.
No. 12712.
Court of Appeal of Louisiana, First Circuit.
July 16, 1979.
Rehearing Denied September 27, 1979.
*700 Charest Thibaut and John S. Thibaut, Jr., Baton Rouge, for plaintiff-appellant ADR (A Division of National Life of Florida Corp).
Robert E. Harroun, III, Baton Rouge, for defendant-appellee Bartlett E. Graves.
Before ELLIS, LOTTINGER and LEAR, JJ.
ELLIS, Judge:
This is a suit to enforce a non-competition agreement contained in an employment contract between plaintiff, ADR, a division of National Life of Florida Corporation, and defendant, Bartlett E. Graves. Specifically, plaintiff seeks to enjoin defendant from engaging in business in competition with it for a period of 12 months after September 5, 1978. From a judgment dismissing its suit, plaintiff has appealed.
ADR is engaged in the business of serving as a management-consultant to automobile dealerships in the fields of automobile finance and credit life insurance. Its services are designed to assist the dealer in financing more sales through the dealership, as opposed to outside sources of financing; in writing more credit life insurance and health and accident insurance covering the purchases of the automobiles; and in processing insurance claims.
In September, 1973, ADR employed Mr. Graves, and gave him training in its business. In May, 1974, he was made District Manager for the southern half of Louisiana, the Parish of Orleans excepted. Mr. Graves remained employed in that capacity but with changing territories, until August 28, 1978, when he sent a letter of resignation to plaintiff. The letter was received by ADR on September 5, 1978.
At some time in 1978, Mr. Graves decided to leave ADR and go into business for himself. In July, 1978, he began looking for an insurance company with which he could place the business which he generated. During the month of August, while still in the employ of plaintiff, he told his various clients that he was leaving ADR to set up his own firm, and solicited their business. Of the 38 accounts he was handling, 37 transferred their business to defendant after he resigned.
In seeking its relief, ADR relies on a contract of employment entered into on October 27, 1976, which contains the following relevant provisions:
"RESTRICTIVE COVENANTS. Upon the termination of his employment, whether by termination of this agreement, by wrongful discharge, or otherwise, the Employee shall not for a period of 12 months after the termination of this agreement, directly or indirectly, within any of the restricted territories specified in the schedule attached hereto, enter into or engage in the sale or solicitation of credit life and accident and health insurance business generated from automobile dealerships or agencies or otherwise engage in the automobile credit life and accident and health or as a partner or joint venturer, or as an Employee, agent or salesman for any person, or as an officer, director or shareholder of a corporation, or otherwise. This covenant on the part of the Employee shall be construed as an agreement independent of any other provision in this agreement; and the existence of any claim or cause of action of the Employee against the Company, whether predicated on this agreement or otherwise, shall not constitute a defense to the enforcement by the Company of this covenant."
The contract also provides that it shall be construed under the laws of North Carolina. In rendering his decision the trial judge applied the law of Louisiana, and plaintiff now complains that the case should have been decided under North Carolina law.
Parties are free to contract as to the law applicable to their agreements, and such stipulations will be given effect in the courts of another state unless there are *701 legal or "strong public policy considerations justifying the refusal to honor the contract as written." Davis v. Humble Oil & Refining Company, 283 So. 2d 783, 794 (La.App. 1st Cir. 1973).
In this case, such a strong public policy exists, as expressed in the provisions of R.S. 23:921. Since the defendant is a Louisiana resident, and the contract was intended to be executed in this state, we find that Louisiana law should be applied.
R.S. 23:921 provides:
"No employer shall require or direct any employee to enter into any contract whereby the employee agrees not to engage in any competing business for himself, or as the employee of another, upon the termination of his contract of employment with such employer, and all such contracts, or provisions thereof containing such agreement shall be null and unenforceable in any court, provided that in those cases where the employer incurs an expense in the training of the employee or incurs an expense in the advertisement of the business that the employer is engaged in, then in that event it shall be permissible for the employer and employee to enter into a voluntary contract and agreement whereby the employee is permitted to agree and bind himself that at the termination of his or her employment that said employee will not enter into the same business that employer is engaged over the same route or in the same territory for a period of two years."
Plaintiff recognizes the above statute, but claims that it has incurred expenses in training the defendant and in advertising the business which would permit a non-competition agreement, under the above language. In Orkin Exterminating Company v. Foti, 302 So. 2d 593 (La.1974), the Supreme Court, interpreting the above statute, said:
"In view of the fundamental policy of the basic statute, the apparent purpose of the 1962 amendment, as stated in Conque [National Motor Club of La., Inc. v. Conque, 173 So. 2d 238 (La.App.)], `is to protect an employer only where he has invested substantial sums in special training of the employee or in advertising the employee's connection with his business.' 173 So. 2d 241.
"If an employer extensively advertises a particular employee as the man to go to for the employer's type of services, it is not unfair to protect the employer's investment in this particularized asset by authorizing a limited non-competition agreement to prevent the advertised employee from misusing it. If an employer spends a substantial sum affording special training to an employee, it may not be unfair to protect the employer by authorizing a limited non-competition agreement to prevent the employee from using this specialized training for the benefit of another in competition with his former employer.
"However, as the Conque line of cases holds, normal expenses of administration and supervisionsuch as employee sales and training meetings, the time spent breaking in a new employee, training courses in the administrative needs of the employer itselfcannot be considered the sort of `training' expense intended to justify the heavily disfavored non-competition agreement. Almost any employer could so tie his employees to their present employment by exacting a non-competition agreement. As Conque notes, 173 So. 2d 241: `What the legislators must have intended, it seems to us (since they did not repeal the basic prohibition against such contracts as void as against the public policy of the state), was to protect the investment of those employers who afford special training of a substantial nature to their employees, and to encourage them to do so."
Our review of the record reveals that all of the training expenses claimed by plaintiff were paid in connection with sales and training meetings and breaking in Mr. Graves when he was a new employee. These are not the kinds of expenses contemplated by R.S. 23:921, as interpreted in the Orkin case, supra. Rather they appear to be normal training and administrative expenses, *702 such as would be expended in the training of any employee. They are not sufficient to support a non-competition agreement in an employment contract.
Plaintiff further argues that, by soliciting the business of plaintiff's customers while still in plaintiff's employ, defendant "breached his fiduciary and legal duty to plaintiff, requiring that he be enjoined from competing or disclosing confidential information."
Although it is clear that much confidential information was furnished to defendant by plaintiff during his employment, there is nothing in the record to indicate that defendant disclosed it to others or utilized it himself. Defendant did, while still in plaintiff's employ, tell plaintiff's customers that he was going in business for himself, and that "if they wanted to, they could switch over to me and my program."
In the recent case of National Safe Corporation v. Benedict and Myrick, Inc., 371 So. 2d 792 (La.1979), the court said:
"Article 1901 of the Civil Code requires good faith performance of all agreements. A principle of implied obligations in contracts is also stated in Article 1903 of the Code in these words: `The obligation of contracts extends not only to what is expressly stipulated, but also to everything that, by law, equity or custom, is considered as incidental to the particular contract, or necessary to carry it into effect.' The effect of equity on implied obligations is expressed in Article 1964 in these terms: `Equity, usage and law supply such incidents only as the parties may reasonably be supposed to have been silent upon from a knowledge that they would be supplied from one of these sources.' Insofar as pertinent here, the `Equity intended by this rule is founded in the Christian principle not to do unto others that which we would not wish others should do unto us....' La. Civil Code art. 1965."
Assuming that defendant's conduct while in plaintiff's employ amounted to such a breach of contract, the relief to which plaintiff might be entitled is governed by Articles 1926 through 1928 of the Civil Code which provide:
"Art. 1926. On the breach of any obligation to do, or not to do, the obligee is entitled either to damages, or, in cases which permit it, to a specific performance of the contract, at his option, or he may require the dissolution of the contract, and in all these cases damages may be given where they have accrued, according to the rules established in the following section.
"Art. 1927. In ordinary cases, the breach of such a contract entitles the party aggrieved only to damages, but where this would be an inadequate compensation, and the party has the power of performing the contract, he may be constrained to a specific performance by means prescribed in the laws which regulate the practice of the courts.
"Art. 1928. The obligee may require that any thing which has been done in violation of a contract, may be undone, if the nature of the cause will permit, and that things be restored to the situation in which they were before the act complained of was done, and the court may order this to be effected by its officers, or authorize the injured party to do it himself at the expense of the other, and may also add damages, if the justice of the case require it."
Although the injunctive relief sought by plaintiff might be authorized by the foregoing provisions, we are of the opinion that it would not be appropriate in this case. The injury suffered by plaintiff can probably be compensated by money damages, and a grant of the injunctive relief prayed for herein would result in de facto enforcement of the non-competition agreement, which, as noted above, is contrary to the public policy of the state. We find the authorities relied on by plaintiff to be factually inapposite.
The judgment appealed from is affirmed, at plaintiff's cost.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1326947/ | 267 S.E.2d 164 (1980)
John Thorpe RICHARDS, Ancillary Admr., etc., et al.
v.
Robert M. MUSSELMAN, Executor, etc., et al.
Record No. 780954.
Supreme Court of Virginia.
June 6, 1980.
*165 Leigh B. Middleditch, Jr., Charlottesville (Roger S. Martin, McGuire, Woods & Battle, Charlottesville, on briefs), for appellants.
Paul M. Peatross, Jr., Charlottesville, James H. Michael, Jr. (Michael & Dent, Ltd., Carter & Peatross, Charlottesville, on brief), for appellees.
No brief or argument for Star-Leaf Corporation, Astir, Inc., Filplan, Incorporated and Jaymar Corporation, appellees.
Before I'ANSON, C. J., and CARRICO, HARRISON, COCHRAN, POFF, COMPTON and THOMPSON, JJ.
THOMPSON, Justice.
In this appeal we decide whether the complainants' right of contribution under a guaranty agreement is barred by the application of the equity maxim of "unclean hands."
By letter dated November 4, 1968, Henry W. Jackson and "his associate" contracted to purchase all the stock of Astir, Incorporated (Astir), a car wash operation, from a group of Richmond businessmen. Until paid for in full, the stock was to be held in escrow by Robert M. Musselman, attorney-at-law. On March 22, 1969, Jackson entered into an agreement with E. H. Clay Goss whereby Goss would become the "associate" mentioned in the November 4, 1968 letter. Goss was to share equally with Jackson in the rights and obligations of the November 4, 1968 agreement "as though the said agreement had been executed jointly by the parties."
Goss subsequently recommended that Joseph D. Patch, Jr., his longtime friend, be allowed to invest in the business. On May 31, 1969, Jackson and his wife, Stacy, Goss and his wife, Gwendolyn, and Patch and his wife, Patricia, all entered into an agreement guaranteeing the repayment of certain loans made to the business by Residential Industrial Loan Company (RILCO), a Norfolk lender. At the time this guaranty agreement was signed, no Astir stock had been taken out of escrow.
By summer, 1970, the car wash operation was experiencing financial difficulty. In order to discuss the situation, Jackson, Goss, Musselman, Patch, Mrs. Patch, and the Patches' attorney, Richard S. T. Marsh, met in Marsh's Washington, D. C., office on June 9, 1970. At that meeting Goss and Jackson requested that Patch contribute funds to the car wash. In exchange for such contributions, Patch wanted the 50% stock interest in the business that Goss would have received under the March 22, 1969 agreement. In addition Patch requested that the Gosses retain their personal liability on the corporate obligations, which included the May 31, 1969 guaranty agreement. Goss stated at the meeting that he no longer wished to participate in the business and would not contribute any money to it. As of the date of the meeting, Goss had not made any payment on the purchase of the Astir stock under the November 4, 1968 agreement.
Marsh and the Patches left the meeting with the impression that Goss had agreed to the Patches' terms for contribution. As a result, the Patches loaned $12,500 directly to the car wash business and another $12,500 to the Jacksons for them to invest in the business. A letter summarizing the agreements reached at the June 9, 1970 meeting was sent by Marsh to Musselman on June 19, 1970, with a request that any contrary understandings be corrected. No corrections were made. There is no indication, however, that the letter was seen by Goss.
The Patches' understandings of June 9, 1970 were subsequently further reduced to a written agreement to be signed by Goss and Patch. In August or early September Musselman informed Marsh that Goss refused to sign the agreement. Goss insisted *166 that a condition of his signing was that he be released from all his "personal liability exposure" in the car wash operations. This was not agreeable to the Patches, and they maintained this was contrary to the understandings reached at the June 9, 1970 meeting. At some point, however, Jackson, Marsh, and Musselman concluded that Goss had abandoned the agreement of November 4, 1968, to purchase Astir stock and, ultimately, the car wash operation as well; therefore, they considered him to have no further interest in the business.
The financial difficulties of the car wash continued so Jackson, Patch, Musselman, and Marsh met to discuss the situation. Another written agreement, dated September 25, 1970, and signed by the Jacksons and Patch, emerged from this meeting. Essentially, the agreement called for a transfer of all Astir stock, now apparently out of escrow, to Filplan, Incorporated (Filplan). Filplan was a corporation owning a car wash lease in Petersburg. Its sole stockholder, up to that point, was Jackson. Under the agreement, Patch was made a fifty percent stockholder in Filplan, and the Jacksons warranted that there was no outstanding stock interest in either Astir or Filplan which would interfere with the Patches' newly created fifty percent interest in Filplan. The parties realized, however, that the Astir stock was virtually worthless at the time of the June 9, 1970 meeting, and at all times thereafter, including the time of transfer to Filplan.
The business continued to experience severe financial problems. The RILCO loans became in arrears, and RILCO made demands on the Patches for payment pursuant to the May 31, 1969 guaranty agreement. Patch made payments on his guaranty in the amount of $43,162.22, and Mrs. Patch made payments on her guaranty in the amount of $51,748.57. These payments satisfied all obligations to RILCO under the May 31, 1969 guaranty agreement. No payments were made by either of the Gosses.
Patch died February 10, 1973, Jackson died July, 1974, Mrs. Patch died December, 1974, and Goss died June 12, 1975. John Thorpe Richards qualified as Virginia ancillary administrator of the estates of Mr. and Mrs. Patch. Stacy D. Jackson qualified as Executrix of the estate of Henry W. Jackson, and Musselman qualified as Executor of the estate of Goss. On August 19, 1975, the Executors and administrator of the Patch estates filed a Bill of Complaint against the Jackson Executrix, Mrs. Jackson in her own right, Musselman as Executor of the Goss estate, Mrs. Goss in her own right, and the various corporations, alleging that RILCO had been paid by the Patches pursuant to the guaranty agreement and that they were entitled to contributions from the other guarantors. Pending this suit in lower court, settlement was made with Mrs. Jackson and the Jackson estate. The respondents, Musselman, Executor, and Mrs. Goss, filed an answer alleging that they were not indebted to the complainants because they had been "squeezed out" by an improper transfer of Goss's Astir stock to Filplan without consideration and without the consent of Goss, and that by virtue of the doctrine of "unclean hands" the complainants were barred from contribution.
After lengthy ore tenus hearings on September 30, 1976, October 7, 1976, and April 22, 1977, the court, in a final decree of April 7, 1978, apparently accepting the "unclean hands" defense, dismissed the claims asserted against Musselman, Executor of Goss, and the claims asserted against Mrs. Goss.
The doctrine of "unclean hands" is an ancient maxim of equity courts and is usually stated in general terms. See W. deFuniak, Handbook of Modern Equity § 24 (2d ed. 1956) [hereinafter cited as deFuniak].[1]See also 2 J. Pomeroy, A Treatise on *167 Equity Jurisprudence § 397-404 (5th ed. 1941) [hereinafter cited as Pomeroy]. This court has recognized and frequently applied the doctrine, subject to the limitation set forth in Harrell v. Allen, 183 Va. 722, 732, 33 S.E.2d 222, 226 (1945):
While the "clean hands" doctrine is a wholesome one, it is not absolute and has its limitations. 30 C.J.S. Equity § 98, pp. 487 ff. It will not be applied where an inequitable result would be reached. Comstock v. Thompson, 286 Pa. 457, 133 A. 638, 640. Its purpose is to secure justice and equity, not to aid one in acquiring property to which he has no right. Sliman v. Moore, 198 Ark. 734, 131 S.W.2d 1, 3. In Waller v. Eanes Adm'r, 156 Va. 389, 399, 157 S.E. 721, we held that it should not be applied where the result would be contrary to public policy. [Emphasis added.]
See also Whitlow v. Mountain Trust Bank, 215 Va. 149, 153, 207 S.E.2d 837, 841 (1974).
If the doctrine of "unclean hands" were applied here, it would create an inequitable result. The respondents claim that Goss was "squeezed out" of his rights in the Astir corporation because of the collaboration of Jackson and Patch in transferring all the Astir stock to Filplan. The basic agreement of November 4, 1968 provided that the escrow agent would retain all shares of Astir stock until the stock was paid for in full. If there was a default in the payment of the purchase price, the sellers had the option of reselling the stock. Goss's right to any of the Astir stock was by virtue of the written agreement of March 22, 1969, which existed only between Jackson and Goss. The evidence clearly showed that no stock was ever transferred to Goss and further that he never paid anything on the purchase price. He is thus attempting to trade his undetermined rights under the agreements of November 4, 1968, and March 22, 1969, for his liability on the guaranty agreement of May 31, 1969. A court of equity should reject such an attempt.
The doctrine of "unclean hands" has been argued to apply on behalf of Mrs. Goss as well, but her situation is quite different. She was not a party to the agreements of November 4, 1968 and March 22, 1969; she never had a right to any of the Astir stock and, therefore, its transfer could not be to her prejudice. The doctrine has no application as to the cause of action asserted against her.
The doctrine of "unclean hands" cannot be asserted by the respondents for additional reasons. In Bond v. Crawford, 193 Va. 437, 447, 69 S.E.2d 470, 477 (1952), this court said:
It is well settled that the clean hands maxim does not operate to bar a sinner forever from a court of equity. As Mr. Justice Brandeis put it in Loughran v. Loughran, 292 U.S. 216, 229, 54 S. Ct. 684, 689, 78 L. Ed. 1219, "Equity does not demand that its suitors shall have led blameless lives." The misconduct relied on must relate directly to the matter in litigation. It is not sufficient that the wrongdoing is remotely or indirectly connected with the subject of the suit. [Emphasis added.]
See Pomeroy, supra.[2]See also deFuniak, supra.[3]See generally Powell v. Mobile Cab and Baggage Co., 263 Ala. 476, 479-80, 83 So. 2d 191, 194 (1955); United Artists Records, Inc. v. Eastern Tape Corp., 19 N.C.App. 207, 212-13, 198 S.E.2d 452, 456 (1973); 27 Am.Jur.2d Equity, § 142 (1966); 30 *168 C.J.S. Equity § 98 (1965); 33 Va.L.Rev. 207 (1947).
The Patches, or their respective estates, paid the obligations under the May 31, 1969 guaranty agreement and then brought this proceeding for their equitable right of contribution. This long-established procedure was expressly recognized in Cooper v. Greenberg, 191 Va. 495, 501, 61 S.E.2d 875, 879 (1950). The issue before the court below was the liability of the Gosses for contribution on the guaranty agreement. Stock ownership in Astir was collateral to that issue. Accordingly, we adopt the reasoning of the Supreme Court of Illinois in Pitzele v. Cohn, 217 Ill. 30, 38-39, 75 N.E. 392, 395 (1905), where the court said:
[T]he maxim that a party must come into a court of equity with clean hands "only applies to the particular transaction under consideration, for a court will not go outside of the case for the purpose of examining the conduct of the complainant in other matters or questioning his general character for fair dealing. The wrong must have been done to the defendant himself and must have been in regard to the matter in litigation". [Citation omitted.] We suppose it to be a well settled doctrine that if a plaintiff requires any aid from an illegal transaction to establish his demand, he cannot recover it, or, in other words, if he is unable to support it without relying upon an unlawful agreement between himself and the defendant he must fail. But if the parties have been engaged in business either malum in se or merely prohibited by law, yet if the cause of action be unconnected with the illegal act and is founded upon a distinct and collateral consideration it will not be affected by their former unlawful conduct.
Therefore, we reverse the final decree and remand the case for further proceedings not inconsistent with the views herein expressed.
Reversed and Remanded.
NOTES
[1] "Pursuant to the equitable maxim that `He who comes into equity must come with clean hands,' the so-called `clean hands' doctrine, the complainant seeking equitable relief must not himself have been guilty of any inequitable or wrongful conduct with respect to the transaction or subject matter sued on. Equity will not give relief to one seeking to restrain or enjoin a tortious act where he has himself been guilty of fraud, illegality, tortious conduct or the like in respect of the same matter in litigation. Not only must the complainant come into equity with clean hands but he must keep them clean throughout the course of the litigation." deFuniak at 39.
[2] "The dirt upon his hands must be his bad conduct in the transaction complained of. If he is not guilty of inequitable conduct toward the defendant in that transaction, his hands are as clean as the court can require." Pomeroy at 97.
[3] "But the rule or doctrine applies only to the particular matter under consideration, for the court will not go outside of the case for the purpose of examining the conduct of the complainant in other matters or for the purpose of questioning his general character for fair dealing." deFuniak at 39. (Emphasis added.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1965450/ | 819 F. Supp. 141 (1993)
Mary Lou CLAPS
v.
MOLITERNO STONE SALES, INC., Kenneth Castellucci, Joseph DeGirolamo, George Craemer, Local 6, International Union of Bricklayers and Allied Craftsmen, and James Nolan.
Case No. N-90-CV-519 (JAC).
United States District Court, D. Connecticut.
March 29, 1993.
*142 Karen Lee Torre, Law Offices of Karen Lee Torre, New Haven, CT, for plaintiff.
Paul V. Curcio, Adler, Pollock & Sheehan, Providence, RI, Margaret P. Mason, Tyler, Cooper & Alcorn, New Haven, CT, for defendants.[*]
*143 RULING ON DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
JOSE A. CABRANES, Chief Judge:
This is an action for damages and injunctive relief under Title VII of the Civil Rights Act of 1964 and under Connecticut state law. The plaintiff is a stonemason who was employed by defendant Moliterno Stone Sales, Inc. ("Moliterno Stone"), during the construction of the Connecticut Financial Center in New Haven, Connecticut. She alleges that the defendants discriminated against her on the basis of her gender by creating a hostile work environment.
Pending before the court are two motions for summary judgment filed by defendants Moliterno Stone, Kenneth Castellucci, Joseph DeGirolamo, and George Craemer. The first is the defendants' Motion for Partial Summary Judgment (filed June 12, 1992), which seeks summary judgment on all of the plaintiff's state law claims and on the plaintiff's federal claims to the extent they seek compensatory and punitive damages and damages for pain and suffering. The second is the defendants' Supplemental Motion for Summary Judgment (filed September 8, 1992), which seeks summary judgment on the remaining portions of the plaintiff's federal claims. The plaintiff filed a response to both motions on February 16, 1993, and the court held a hearing in this matter on March 15, 1993.
FACTS
The plaintiff in this action, Mary Lou Claps, was employed as a stonemason by the defendant Moliterno Stone from November 21, 1988 to June 12, 1989 during the construction of the Connecticut Financial Center in New Haven, Connecticut. While employed by Moliterno Stone, Claps was a member of the defendant Local 6, International Union of Bricklayers and Allied Craftsmen ("the Bricklayers Union") and was therefore covered by a collective-bargaining agreement between the Bricklayers Union and Moliterno Stone. Defendant George Craemer was an employee of Moliterno Stone and served as the immediate supervisor of Claps; defendant Joseph DeGirolamo was also an employee of Moliterno Stone and served as the superintendent for Moliterno Stone at the job site; defendant Kenneth Castellucci was the chief executive officer of Moliterno Stone; and defendant James Nolan was a steward for the Bricklayers Union and was employed on the job site during the construction of the Connecticut Financial Center.
The plaintiff has alleged that the defendants discriminated against her on the basis of her gender by causing or permitting acts of verbal and physical harassment that created a hostile work environment. She has alleged that defendant Craemer sought to demean and humiliate her by his words and actions; that defendant DeGirolamo knew of defendant Craemer's actions but did nothing to prevent them and, in addition, publicly used terms derogatory to women to describe the plaintiff; that defendant Castellucci received a letter from the plaintiff dated May 18, 1989, in which the plaintiff described the alleged harassment and that defendant Castellucci took no action in response to the letter; that no official of Moliterno Stone took any action to prevent the recurrence of the alleged harassment despite the fact that the plaintiff brought the problem to the attention of defendants Craemer, DeGirolamo, and Castellucci; and that the Bricklayers Union and defendant Nolan failed to intervene on her behalf to end the discrimination and harassment. Finally, the plaintiff has alleged that, after receiving no response from the officers of Moliterno Stone, she felt compelled to leave the employment of that firm and did so on June 12, 1989. After leaving Moliterno Stone, the plaintiff filed an administrative complaint with the Connecticut Commission on Human Rights and Opportunities (CCHRO) and the federal Equal Employment Opportunity Commission (EEOC).
The plaintiff commenced this action on September 24, 1990 and filed an amended complaint ("Amended Complaint") on July 31, 1992. The Amended Complaint is not divided into separate counts, but it asserts three types of claims against the four defendants who have filed the pending summary judgment motions. First, the plaintiff alleges that the four moving defendants violated *144 Title VII of the Civil Rights Act of 1964 by discriminating against the plaintiff on the basis of gender and by retaliating against the plaintiff for seeking relief from the alleged discrimination. Second, the plaintiff alleges the following state law claims: (1) wrongful discharge by all four defendants; (2) retaliatory discharge in violation of Conn.Gen.Stat. § 31-51q by all four defendants; (3) breach of employment contract by defendants Moliterno Stone and DeGirolamo; (4) breach of promise to provide safe working environment by all four defendants; (5) intentional infliction of emotional distress by DeGirolamo and Craemer; (6) assault and battery by defendants DeGirolamo and Craemer; (7) liability of defendants Moliterno Stone and Castellucci for intentional torts committed by DeGirolamo and Craemer; (8) negligence by defendants Moliterno Stone and Castellucci in hiring and employing defendants DeGirolamo and Craemer; (8) negligent misrepresentation by all four defendants; and (9) abuse of process by defendants Moliterno Stone and Castellucci for bringing a counterclaim against the plaintiff. Finally, the plaintiff alleges that the four moving defendants conspired with the two non-moving defendants to deprive the plaintiff of her civil rights in violation of 42 U.S.C. § 1985.
DISCUSSION
The defendants are entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 2509-10, 91 L. Ed. 2d 202 (1986) (emphasis in original). While the court must view the inferences to be drawn from the facts in the light most favorable to the party opposing the motion, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986), a party may not "rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986) (Feinberg, C.J.), cert. denied, 480 U.S. 932, 107 S. Ct. 1570, 94 L. Ed. 2d 762 (1987). The non-moving party may defeat the summary judgment motion by producing sufficient specific facts to establish that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). Finally, "`mere conclusory allegations or denials'" in legal memoranda or oral argument are not evidence and cannot by themselves create a genuine issue of material fact where none would otherwise exist. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)).
I
The defendants seek summary judgment on the plaintiff's Title VII claims in their entirety based on the plaintiff's failure to exhaust grievance procedures available under a collective-bargaining agreement. In the alternative, the defendants seek summary judgment on the Title VII claims to the extent that the plaintiff demands compensatory or punitive damages or damages for pain and suffering.
A. Title VII Claims: Exhaustion of Grievance Procedures.
The Amended Complaint alleges that the four moving defendants discriminated against the plaintiff on the basis of her gender[1] and that the defendants retaliated against the plaintiff in response to her efforts *145 to obtain relief from the alleged harassment.[2] The defendants argue that these claims ("the Title VII claims") should be barred because the plaintiff failed to exhaust grievance procedures available under a collective-bargaining agreement.[3] In response, the plaintiff contends that the collective-bargaining agreement only required employees to arbitrate contractual disputes, not statutory claims.[4] The court now concludes that the plaintiff is not barred from bringing her Title VII claims because the collective-bargaining agreement does not require employees to submit individual statutory claims to arbitration.
The defendants' challenge to the plaintiff's Title VII claims rests on the holding of the Supreme Court in Gilmer v. Interstate/Johnson Lane Corp., ___ U.S. ___, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991). The plaintiff in that case had agreed, in his application to register as a securities representative, "to arbitrate any dispute, claim, or controversy" arising between him and his employer. Id. at ___, 111 S.Ct. at 1650. After he was dismissed, the plaintiff brought a claim against his employer in federal court under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., arguing that the arbitration agreement which he had signed required the arbitration only of contractual disputes. The Supreme Court concluded that the agreement also required the arbitration of statutory claims and therefore held that the agreement barred the plaintiff's ADEA action. The Court explained that "`[h]aving made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.'" Id. at ___, 111 S.Ct. at 1652 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S. Ct. 3346, 3354, 87 L. Ed. 2d 444 (1985)). Applying the principle articulated in Mitsubishi and Gilmer, courts have held that individual employees who agree to arbitrate disputes with their employers must arbitrate Title VII claims. See Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 700 (11th Cir.1992); Mago v. Shearson Lehman Hutton, Inc., 956 F.2d 932, 935 (9th Cir.1992); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305, 312 (6th Cir.1991). In light of these holdings, the defendants in this case now argue that the plaintiff should be required to arbitrate her Title VII claims because she agreed by virtue of the collective-bargaining agreement under which she was employed to submit such claims to grievance procedures.
The plaintiff relies on a different line of authority to support her contention that the collective-bargaining agreement does not require the arbitration of her Title VII claims. This line of authority begins with the decision in Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011, 39 L. Ed. 2d 147 (1974), where the Court permitted an employee who had exhausted grievance procedures available under a collective-bargaining agreement to bring a Title VII claim in federal court. In that case, the Court held that collective-bargaining agreements do not require employees to submit statutory claims to grievance procedures. The purpose of the grievance procedures, the Court found, was simply to resolve disputes arising out of the collective-bargaining agreement itself. The Court stated that
[i]n submitting his grievance to arbitration, an employee seeks to vindicate his contractual right under a collective-bargaining agreement. By contrast, in filing a lawsuit *146 under Title VII, an employee asserts independent statutory rights accorded by Congress. The distinctly separate nature of these contractual and statutory rights is not vitiated merely because both were violated as a result of the same factual occurrence.
Gardner-Denver, 415 U.S. at 49-50, 94 S. Ct. at 1020. The Court reached the same holding in subsequent cases involving different statutes, each time emphasizing that grievance procedures under collective-bargaining agreements protect only contractual rights. See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 737, 101 S. Ct. 1437, 1443, 67 L. Ed. 2d 641 (1981) (claim under Fair Labor Standards Act, 29 U.S.C. § 201 et seq.); McDonald v. West Branch, 466 U.S. 284, 292, 104 S. Ct. 1799, 1804, 80 L. Ed. 2d 302 (1984) (claim under 42 U.S.C. § 1983). The plaintiff now argues that these holdings clearly set collective-bargaining agreements apart from other employment contracts: that is, while individual employment contracts may require employees to arbitrate both contractual and statutory claims, collective-bargaining agreements simply require employees to arbitrate contractual claims.
The defendants' challenge to the plaintiff's Title VII claims would, in effect, require the court to hold that collective-bargaining agreements may require employees to arbitrate both contractual and statutory claims. Neither Gardner-Denver nor Gilmer supports this conclusion. First, the holding in Gardner-Denver was based on the assumption that the collective-bargaining process could, in some circumstances, pose a threat to the protection of individual statutory rights. The Court noted that collective bargaining is a "majoritarian process" that may subordinate the interests of individual employees to the good of union members as a group. This tension between individual and group interests, the Court concluded, should not be permitted to compromise statutory rights that Congress had conferred on individual employees under Title VII. See Gardner-Denver, 415 U.S. at 51, 94 S. Ct. at 1021; see also Barrentine, 450 U.S. at 742, 101 S. Ct. at 1445 (balancing of individual and collective interests might lead union to sacrifice statutorily granted benefits). The Court also observed in Gardner-Denver that labor arbitrators who conduct grievance procedures are charged with interpreting and applying private contracts, not federal statutes. In light of this lack of expertise and legal authority, the Court concluded that labor arbitrators should not be entrusted with the enforcement of employees' rights under Title VII. See Gardner-Denver, 415 U.S. at 5254, 94 S. Ct. at 1021-22; see also Barrentine, 450 U.S. at 743, 101 S. Ct. at 1446 (arbitrator "may lack the competence to decide the ultimate legal issue" and "may not have the contractual authority to do so"). In sum, the decision in Gardner-Denver was grounded in a concern about the dangers that collective-bargaining agreements might pose to individual employees' statutory rights.
There is nothing in Gilmer to suggest that the Court abandoned or even reconsidered its efforts to protect individual statutory rights from the give-and-take of the collective-bargaining process. It is true, of course, that Gilmer permits employees individually to enter contracts under which they agree to submit statutory claims to arbitration.[5] Indeed, Gilmer apparently requires courts to presume that an agreement to arbitrate "any dispute, claim, or controversy" obligates an employee to arbitrate statutory as well as contractual claims. See Gilmer, ___ U.S. at ___, 111 S.Ct. at 1650. But the Court went out of its way in Gilmer to contrast its holding in that case with its holdings in Gardner-Denver, Barrentine, and McDonald: the court noted, among other things, that an important concern in those *147 cases "was the tension between collective representation and individual statutory rights, a concern not applicable to the present case." Gilmer, ___ U.S. at ___, 111 S.Ct. at 1657. In recognizing this distinction, the Court made it clear that its holding in Gilmer simply applied to contracts made by employees individually. Consequently, Gilmer does not alter or undermine the protection established in Gardner-Denver against waiver of individual statutory rights through collective-bargaining agreements. See E.E.O.C. v. Board of Governors of State Colleges & Universities, 957 F.2d 424, 431 (7th Cir.1992) (holding that "it is well-established that unions cannot waive employees' ADEA or Title VII rights through collective bargaining").
In sum, the court concludes that a collective-bargaining agreement cannot at least as a general matter require an employee to arbitrate individual statutory claims.[6] Accordingly, the plaintiff's failure to exhaust the available grievance procedures does not bar her Title VII claims. This holding is consistent with the conclusions of other courts that have considered the same issue. See Sewell v. New York City Transit Authority, 809 F. Supp. 208, 215 (E.D.N.Y.1992) (holding that public employee who pursued state-law grievance procedure was not thereby barred from bringing Title VII claim); see also Hilliard v. National Council of Senior Citizens, 1992 U.S. Dist. LEXIS 7493, at *6 (D.D.C. May 21, 1992) (holding that employee who pursued grievance procedure was not thereby barred from bringing Title VII gender-discrimination claim).[7] In light of this ruling, the defendants' motion for summary judgment on the Title VII claims must be denied.
B. Title VII Claims: Availability of Damages.
The defendants also seek summary judgment on the plaintiff's Title VII claims to the extent that the plaintiff seeks compensatory or punitive damages or damages for pain and suffering.[8] The Civil Rights Act of 1991 ("the 1991 Act"), which took effect on November 21, 1991, provides that compensatory damages may be awarded in Title VII actions in some circumstances. See 42 U.S.C. § 1981a(a)(1). It is now the law of this Circuit, however, that the provisions of the 1991 Act should not be applied retroactively. See Butts v. New York City Department of Housing Preservation and Development, 990 F.2d 1397 (2d Cir.1993); see also Johnson v. Uncle Ben's, Inc., 965 F.2d 1363, 1373-74 (5th Cir.1992); Mozee v. American Commercial Marine Service Co., 963 F.2d 929, 940 (7th Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 207, 121 L. Ed. 2d 148 (1992); Fray v. Omaha World Herald Co., 960 F.2d 1370, 1378 (8th Cir.1992); Vogel v. Cincinnati, 959 F.2d 594, 598 (6th Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 86, 121 L. Ed. 2d 49 (1992). But see Davis v. San Francisco, 976 F.2d 1536, 1549-56 (9th Cir. 1992) (applying retroactively the portion of *148 the statute governing expert witness fees). Although the 1991 Act cannot be given retroactive effect in this case, the plaintiff may, of course, receive a monetary award for back pay (together with prejudgment interest) if she prevails on her Title VII claims. In addition, the plaintiff may receive compensatory or punitive damages if she prevails on her state law claims. But the plaintiff is not entitled in this action to any damages on the basis of her Title VII claims. For this reason, the defendants' motion for summary judgment on the plaintiff's claims for damages under Title VII must be granted.
II
The defendants seek summary judgment on all of the plaintiff's state law claims based on the exclusivity provisions of the Connecticut Workers Compensation Act ("CWCA"), Conn.Gen.Stat. §§ 31-284(a) and 31-293a,[9] and on the preemptive effect of Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185.[10] I shall consider each of the plaintiff's state law claims in turn.
A. Wrongful Discharge and Retaliatory Discharge.
The Amended Complaint, which was filed on July 31, 1992, alleges that the defendants' actions and omissions caused the plaintiff to leave the employment of Moliterno Stone and amounted to a wrongful discharge under Connecticut common law.[11] The Amended Complaint also alleges that the defendants discharged the plaintiff in retaliation for her exercise of her rights of free speech and freedom of association, in violation of Conn. Gen.Stat. 31-51q.[12] The defendants' Supplemental Motion for Summary Judgment, which was filed on September 8, 1992, does not address the wrongful-discharge or retaliatory-discharge claims. However, the defendants' earlier Motion for Partial Summary Judgment, which was filed on June 12, 1992, did seek summary judgment on all of the plaintiff's state law claims on the ground that those claims are barred by the CWCA and the LMRA.[13] In light of this earlier motion, the court finds that the defendants have properly moved for summary judgment on the wrongful-discharge and retaliatory-discharge claims. Nevertheless, the defendants' *149 motion for summary judgment on these claims must be denied.
1. Preclusion of Claims by CWCA.
The CWCA protects employers against liability in tort for personal injuries "arising out of or in the course of [the plaintiff's] employment or on account of death resulting from personal injury so sustained." Conn.Gen.Stat. § 31-284(a). In light of this language, it appears that the CWCA does not apply to injuries arising out of the discharge of an employee. This view of the statute is supported by the weight of authority among the Connecticut state courts. See Fulco v. Norwich Roman Catholic Diocesan Corp., 27 Conn.App. 800, 808, 609 A.2d 1034 (1992) (holding that "it would unduly strain the language of the statute for us to conclude that termination of employment creates a job related injury"); see also Sullivan v. Griffin Health Services Corp., Civil No. CV-90030911S, 1990 WL 283704 (Connecticut Superior Court for the Judicial District of Ansonia/Milford) (September 25, 1990) (holding that CWCA does not bar claim for negligent infliction of emotional distress arising out of employee's termination). In light of these persuasive authorities and the clear language of the statute, the court concludes that the CWCA does not bar actions for damages based on an employee's termination.
The fact that the plaintiff here has alleged that she was constructively discharged, rather than expressly fired, does not change the result in this case. Regardless of the manner in which the discharge was effectuated, the fact remains that under Connecticut law the discharge is deemed to have occurred after the plaintiff's term of employment ended. See Fulco, 27 Conn.App. at 804, 609 A.2d 1034. Consequently, the claims based on the discharge fall beyond the scope of the CWCA. It should be noted, however, that if the plaintiff prevails on the discharge claim she would be entitled to damages for the discharge itself that is, for the pecuniary and non-pecuniary costs of losing her job and of being forced to find new employment. The plaintiff would not be entitled, based on the discharge claims, to obtain compensation for the injuries that occurred during her employment and that gave rise to the discharge for example, the defendants' words and actions on the job site.
2. Preemption of Claims by Section 301 of LMRA.
Section 301 of the LMRA preempts state law claims to the extent that the resolution of those claims "is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S. Ct. 1904, 1916, 85 L. Ed. 2d 206 (1985). The preemptive effect of Section 301 is broad, but the Supreme Court has been careful to note that Section 301 does not preempt state law claims that simply require courts to consider the same factual issues that would be raised by claims under a collective-bargaining agreement. See Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 409, 108 S. Ct. 1877, 1883, 100 L. Ed. 2d 410 (1988) (holding that Section 301 does not preempt retaliatory discharge claim brought under Illinois law). In Lingle, the Court stated that Section 301 preemption
merely ensures that federal law will be the basis for interpreting collective-bargaining agreements, and says nothing about the substantive rights a State may provide to workers when adjudication of those rights does not depend upon the interpretation of such agreements. In other words, even if dispute resolution pursuant to a collective-bargaining agreement, on the one hand, and state law, on the other, would require addressing precisely the same set of facts, as long as the state-law claim can be resolved without interpreting the agreement itself, the claim is "independent" of the agreement for § 301 pre-emption purposes.
Id.
The Court's decision in Lingle is directly applicable here. While the plaintiff's wrongful-discharge and retaliatory-discharge claims do implicate factual issues that would be raised by a claim for breach of the bargaining agreement, these claims do not require the court to evaluate the terms of the bargaining agreement itself. The plaintiff is not claiming that the discharge was wrongful because the defendants failed to follow a *150 procedure prescribed by the employment contract, nor is she claiming that the contract itself gave her a right not to be discharged in retaliation for the exercise of free-speech rights. Instead, the plaintiff is claiming that the alleged discharge violated her rights under Connecticut law. The plaintiff contends that wrongful discharge is actionable under Connecticut common law[14] and that discharge in retaliation for the exercise of free-speech rights is actionable under Connecticut statutory law.[15] Because these claims do not require the court to interpret the terms of the collective-bargaining agreement itself, they are not preempted by Section 301 of the LMRA.
For the foregoing reasons, the CWCA and the LMRA do not bar the plaintiff's wrongful-discharge and retaliatory-discharge claims. Furthermore, the defendants have not argued, much less shown, that they are entitled to summary judgment on the merits of these claims as a matter of law based on the undisputed facts in the record. Accordingly, the motion for summary judgment must be denied with respect to the plaintiff's wrongful-discharge and retaliatory-discharge claims.
B. Breach of Contract and Breach of Promise.
The Amended Complaint, which was filed on July 31, 1992, alleges that the defendants breached their contract of employment with the plaintiff by failing to provide a safe working environment free from tortious conduct.[16] The Amended Complaint also alleges that the defendants breached a promise to the plaintiff to provide a safe working environment.[17] The defendants' Supplemental Motion for Summary Judgment, which was filed on September 8, 1992, does not address the breach-of-contract and breach-of-promise claims. However, the defendants' earlier Motion for Partial Summary Judgment, which was filed on June 12, 1992, did seek summary judgment on all of the plaintiff's state law claims on the ground that those claims are barred by the CWCA and by Section 301 of the LMRA.[18] In light of this earlier motion, the court finds that the defendants have properly moved for summary judgment on the wrongful discharge and retaliatory discharge claims.
The defendants' motion for summary judgment must be granted with respect to the plaintiff's claim for breach of employment contract. As noted above, Section 301 of the LMRA preempts state law claims to the extent that the resolution of those claims "is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." Allis-Chalmers Corp., 471 U.S. at 220, 105 S. Ct. at 1916. The plaintiff has admitted that she was subject to a collective-bargaining agreement during the time in which she was employed by Moliterno Stone;[19] indeed, the "contract" to which the plaintiff refers in her breach-of-contract claim appears to be the collective-bargaining agreement itself. Because the *151 plaintiff's breach-of-contract claim would require the court to interpret the terms of a collective-bargaining agreement, this claim is clearly preempted by Section 301 of the LMRA.
The defendants' motion for summary judgment must also be granted with respect to the plaintiff's claim for breach of promise. While this claim could have been set forth with greater precision, it appears that the plaintiff intended to allege that the defendants violated an oral agreement that was independent of the collective-bargaining agreement. Assuming that this is the case, the plaintiff's breach-of-promise claim would not be based directly on the collective-bargaining agreement. Even so, a determination of the validity of the breach-of-promise claim would require the court to consult the collective-bargaining agreement to determine whether that agreement was intended to be the sole agreement between the parties. Because the plaintiff could not prevail on her breach-of-promise claim without an interpretation of the collective-bargaining agreement, the claim is preempted by Section 301 of the LMRA.
Accordingly, summary judgment must be granted on the plaintiffs breach-of-contract and breach-of-promise claims.
C. Intentional Torts and Negligence.
The Amended Complaint alleges that Moliterno Stone and Castellucci intentionally failed to prevent the injuries inflicted on the plaintiff by the other defendants[20] and that they were negligent in hiring and employing those defendants.[21] It also alleges that DeGirolamo and Craemer committed the intentional torts of intentional infliction of emotional distress[22] and assault and battery.[23] In addition, the Amended Complaint alleges that all four of these defendants negligently misrepresented to the plaintiff "that she would be free from the injury and suffering" that she later experienced while employed by Moliterno Stone.[24] The defendants moved for summary judgment on these state law claims in their Motion for Partial Summary Judgment.[25] Upon review of the CWCA and Section 301 of the LMRA, the court concludes that the motion for summary judgment on the intentional-tort and negligence claims must be granted as to Moliterno Stone; granted in part and denied in part as to Castellucci; and granted in part and denied in part as to Craemer and DeGirolamo.
1. Moliterno Stone.
The motion for summary judgment on the intentional-tort and negligence claims must be granted as to Moliterno Stone based on the exclusivity provisions of the CWCA.
a. Intentional-Tort Claims against Moliterno Stone.
The CWCA bars the plaintiffs intentional-tort claims against Moliterno Stone. The CWCA establishes broad protection for employers against liability for injuries suffered by employees during the course of employment. See Conn.Gen.Stat. § 31-284(a). Under this statute, an employer is generally entitled to view the commission of an intentional tort even by a supervisor or foreman as "an injury arising out of or in the course of employment, `another industrial mishap in the factory'" of the sort exclusively covered by the workers' compensation system. See Jett v. Dunlap, 179 Conn. 215, 218, 425 A.2d 1263 (1979). The Connecticut Supreme Court has held, however, that an employer *152 is liable for intentional torts committed by an employee if (1) the employer "directed or authorized" the employee to commit the tort or (2) the employee who committed the tort is an "alter ego" of the corporation. See id. at 218-219, 425 A.2d 1263.
In articulating these exceptions, the Court emphasized that an employee should not be treated as an alter ego of the corporation simply because he is a supervisor or foreman. Id. Rather, an employee is to be treated as an alter ego of the corporation only if he "may be deemed the alter ego of the corporation under the standards governing disregard of the corporate entity." Id. Under Connecticut law, a court will disregard the corporate entity "`only under exceptional circumstances, for example, where the corporation is a mere shell, serving no legitimate purpose, and [is] used primarily as an intermediary to perpetuate fraud and to promote injustice.'" SFA Folio Collections, Inc. v. Bannon, 217 Conn. 220, 230, 585 A.2d 666 (1991) (quoting Angelo Tomasso, Inc. v. Armor Construction & Paving, Inc., 187 Conn. 544, 447 A.2d 406 (1982)).
Under these standards, the court concludes that summary judgment must be granted on the claims that attribute liability to Moliterno Stone for the intentional torts allegedly committed by the other defendants. The plaintiff has not alleged, much less shown, that Moliterno Stone "authorized" or "directed" any other persons to commit intentional torts against the plaintiff. The plaintiff does contend that Moliterno Stone knowingly permitted the intentional torts to take place,[26] but an employer cannot be held liable simply for "condoning" intentional torts committed by its employees. See Jett, 179 Conn. at 220, 425 A.2d 1263 (holding that "condoning [employees' intentional torts] is not an intentional tort on the part of the employer and does not relate back to it as such"). Furthermore, the plaintiff has not presented evidence from which it could be concluded that defendant DeGirolamo (or any other person) was the alter ego of Moliterno Stone "under the standards governing disregard of the corporate entity." Jett, 179 Conn. at 219, 425 A.2d 1263. Although the plaintiff did assert at oral argument that DeGirolamo was an alter ego of Moliterno Stone, she based this assertion solely on the claim that DeGirolamo had full authority to speak on Moliterno Stone's behalf at the job site not on the claim that Moliterno Stone itself was essentially a sham corporation. The plaintiff's allegation is therefore insufficient as a matter of law. See SFA Folio Collections, 217 Conn. at 230, 585 A.2d 666. Accordingly, summary judgment must be granted against the plaintiff to the extent that she seeks to hold Moliterno Stone liable for the other defendants' acts of intentional infliction of emotional distress or for their acts of assault and battery.
b. Negligence Claims against Moliterno Stone.
The CWCA also bars the plaintiff's negligence claims against Moliterno Stone. The Connecticut Supreme Court has held that "to be outside the purview of § 31-284(a) [of the CWCA], the employer must have engaged in intentional misconduct, as that has been defined through our case law." Perille v. Raybestos-Manhattan-Europe, Inc., 196 Conn. 529, 553, 494 A.2d 555 (1985). The CWCA provides the exclusive remedy when an employer's negligence or recklessness causes an employee to suffer a personal injury during the course of employment. Accordingly, the CWCA bars the plaintiff's claim against Moliterno Stone for negligence in hiring and employing the other defendants and for negligent misrepresentation.
2. Kenneth Castellucci.
The motion for summary judgment on the intentional-tort claim must be denied as to Castellucci because it is not barred by either the CWCA or Section 301 of the LMRA and it is not insufficient as a matter of law. The motion for summary judgment on the negligence claims must be granted because it is barred by the CWCA.
a. Intentional-Tort Claim against Castellucci.
The CWCA does not bar the plaintiff's claim against Castellucci for intentionally *153 failing to prevent the injuries inflicted on the plaintiff by the other defendants. Under the CWCA, an employee is liable for injuries caused to another employee if the wrong was "wilful and malicious." Conn.Gen.Stat. § 31-293a. The defining feature of a "wilful and malicious" injury is that the injury was caused by design; in other words, the plaintiff must show that the defendant intended to cause the injury that resulted. See Nolan v. Borkowski, 206 Conn. 495, 501, 538 A.2d 1031 (1988) ("`A wilful or malicious injury is one caused by design. Wilfulness and malice alike import intent.'") (quoting Sharkey v. Skilton, 83 Conn. 503, 507-508, 77 A. 950 (1910)). The defendant "intends" to cause not only the consequences that he actually desires but also "those which the actor believes are substantially certain to follow from what he does." Mingachos v. CBS, Inc., 196 Conn. 91, 101, 491 A.2d 368 (1985). The plaintiff has alleged that Castellucci intentionally failed to take action to prevent the other defendants from abusing and harassing the plaintiff on the job site. Because the plaintiff has alleged that the Castellucci intended to cause the injury that resulted from his failure to act, the CWCA does not bar the intentional-tort claim against Castellucci.
Section 301 of the LMRA also presents no obstacle to the plaintiff's intentional-tort claim against Castellucci. Section 301 preempts state law claims only where those claims are substantially dependent on the interpretation of a collective-bargaining agreement. As noted earlier, this statute does not preempt state law claims simply because those claims require courts to consider the same factual issues that would be raised by claims under a collective-bargaining agreement. See Lingle, 486 U.S. at 409, 108 S. Ct. at 1883. Although the plaintiff's intentional-tort claim certainly may implicate many of the same factual issues that would be considered in a breach-of-contract action, the defendants have not argued, and the court does not find, that this claim would be "substantially dependent" on contract interpretation. Accordingly, Section 301 does not preempt the intentional-tort claim against Castellucci.
Finally, the undisputed facts in the record do not establish that Castellucci is entitled to judgment as a matter of law on the intentional-tort claim. The plaintiff has presented evidence that she informed Castellucci of the alleged harassment and that he took no action to investigate or prevent the abuse. While this may not be strong evidence of his intent, Castellucci's alleged failure to take action in response to the plaintiff's complaint would support a reasonable inference that Castellucci intended to permit the other defendants to cause injury to the plaintiff. In light of the genuine factual dispute about Castellucci's state of mind, the court concludes that Castellucci is not entitled to summary judgment on the claim that he intentionally failed to protect the plaintiff from injury.
b. Negligence Claims against Castellucci.
Castellucci is entitled to summary judgment on the claim of negligence in hiring and employing the other defendants and on the claim of negligent misrepresentation. The CWCA expressly protects employees from liability for injuries caused by negligence or even recklessness; as noted above, an employee can be held liable for injuring a fellow employee only where the injury itself was intended. See Conn.Gen.Stat. § 31-293a (providing that CWCA is exclusive remedy for harm done to fellow employee unless such harm is "wilful and malicious"). Based on the express terms of the CWCA, it is clear that the statute precludes the plaintiff from asserting negligence claims against Castellucci for injuries caused during the course of the plaintiff's employment. Accordingly, summary judgment must be granted for Castellucci on the plaintiff's negligence claims.
3. Joseph DeGirolamo and George Craemer.
The motion for summary judgment on the intentional-tort claims against DeGirolamo and Craemer which allege intentional infliction of emotional distress and assault and battery must be denied because these claims are not barred by either the CWCA or Section 301 of the LMRA and they are not insufficient as a matter of law. The motion for summary judgment on the negligence *154 claims must be granted because those claims are barred by the CWCA.
a. Intentional-Tort Claims against DeGirolamo and Craemer.
The intentional-tort claims against DeGirolamo and Craemer are not barred by the CWCA or by Section 301 of the LMRA and they are not insufficient as a matter of law. First, as noted above, an employee can be held liable in tort for injuring a fellow employee when he intended to cause that injury. See Nolan, 206 Conn. at 501, 538 A.2d 1031 (defining "wilful and malicious" act as one that was intended to cause the injury that resulted). The plaintiff has alleged that DeGirolamo and Craemer committed the tort of intentional infliction of emotional distress and the tort of assault and battery. These torts, by definition, require the plaintiff to establish that the defendants intended to commit the harms that resulted. As a result, the CWCA does not preclude the plaintiff from bringing these claims against the defendants.
Second, Section 301 of the LMRA does not preempt the intentional-tort claims against DeGirolamo and Craemer. The plaintiff has alleged the torts of intentional infliction of emotional distress and assault and battery, both of which can be resolved without reference to the terms and conditions of the collective-bargaining agreement. See Lingle, 486 U.S. at 409, 108 S. Ct. at 1883.
Finally, there is ample evidence in the record to support the claim that DeGirolamo and Craemer engaged in a series of demeaning and abusive practices directed at the plaintiff. This evidence could permit a reasonable person to conclude that the alleged intentional torts were committed. Accordingly, the motion for summary judgment must be denied with respect to defendants DeGirolamo and Craemer on the plaintiff's intentional-tort claims.
b. Negligence Claims against DeGirolamo and Craemer.
DeGirolamo and Craemer are entitled to summary judgment on the claim of negligent misrepresentation. As noted above, the CWCA expressly protects employees from liability for injuries caused by negligence or even recklessness. See Conn.Gen.Stat. § 31-293a (providing that CWCA is exclusive remedy for harm done to fellow employee unless such harm is "wilful and malicious"). For this reason, DeGirolamo and Craemer are entitled to summary judgment on the claim for negligent misrepresentation.
D. Abuse of Process.
The Amended Complaint, which was filed July 31, 1992, seeks to hold defendants Moliterno Stone and Castellucci liable for abuse of process, based on the counterclaim filed by those defendants in this action on November 9, 1990.[27] The defendants' Supplemental Motion for Summary Judgment, which was filed on September 8, 1992, does not address the abuse-of-process claim. However, the defendants' earlier Motion for Partial Summary Judgment, which was filed on June 12, 1992, did seek summary judgment on all of the plaintiff's state law claims on grounds that those claims are barred by the CWCA and Section 301 of the LMRA.[28] In light of this earlier motion, the court finds that the defendants have properly moved for summary judgment on the wrongful-discharge and retaliatory-discharge claims.
The defendants' motion for summary judgment on this claim must be denied. First, the CWCA does not bar this claim because the CWCA applies only to injuries suffered during the course of employment. See Conn. Gen.Stat. § 31-284(a). It is clear that the counterclaim filed in this action was brought well after the plaintiff's term of employment had ended. Second, Section 301 of the LMRA does not bar this claim because the claim for abuse of process is not "substantially dependent" on an interpretation of the terms of the collective-bargaining agreement. See Allis-Chalmers Corp., 471 U.S. at 220, 105 S. Ct. at 1915. To prevail on her abuse-of-process claim, the plaintiff would have to show that the defendants brought their counterclaim in bad faith. The defendants have *155 not presented evidence from which it could reasonably be concluded that the plaintiff would need to rely on the collective-bargaining agreement in order to make that showing.
For the foregoing reasons, the CWCA and the LMRA do not bar the plaintiff's abuse-of-process claim. Furthermore, the defendants have not argued, much less shown, that they are entitled to summary judgment on the merits of this claim as a matter of law based on the undisputed facts in the record. Accordingly, the motion for summary judgment must be denied with respect to the plaintiff's abuse-of-process claim against Moliterno Stone and Castellucci.
III
Finally, the Amended Complaint alleges that the four moving defendants conspired with the two non-moving defendants to deprive the plaintiff of her civil rights, in violation of 42 U.S.C. § 1985.[29] The defendants' Supplemental Motion for Summary Judgment (filed September 8, 1992) seeks summary judgment against "the remaining portions of the plaintiff's claims"[30] but the defendants have provided no argument in support of their motion with respect to the claim under 42 U.S.C. § 1985. Accordingly, the defendants' motion for summary judgment on this claim must be denied.
CONCLUSION
To summarize: the defendants' motion for summary judgment is
(1) DENIED with respect to the claims of employment discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2(a) and 2000e-3;
(2) GRANTED with respect to any request by the plaintiff for compensatory or punitive damages or damages for pain and suffering on the Title VII claims;
(3) DENIED with respect to the wrongful-discharge and retaliatory-discharge claims against all four moving defendants;
(4) GRANTED with respect to the breach-of-contract and breach-of-promise claims against all four defendants;
(5) GRANTED with respect to the intentional-tort claims and negligence claims against Moliterno Stone;
(6) DENIED with respect to the intentional-tort claims against Castellucci but GRANTED with respect to the negligence claims against Castellucci;
(7) DENIED with respect to the intentional-tort claims against DeGirolamo and Craemer but GRANTED with respect to the negligence claims against DeGirolamo and Craemer;
(8) DENIED with respect to the abuse-of-process claim against Moliterno Stone and Castellucci; and
(9) DENIED with respect to the conspiracy claim under 42 U.S.C. § 1985.
For the reasons stated above, the defendants' Motion for Partial Summary Judgment (filed June 12, 1992) (doc. # 100) and the defendants' Supplemental Motion for Summary Judgment (filed September 8, 1992) (doc. # 110) are GRANTED in part and DENIED in part.
Furthermore, for the reasons stated above, the plaintiff's Objection to Defendants' Amendment of Motion for Summary Judgment (filed March 26, 1993) (doc. # 134) is SUSTAINED.
It is so ordered.
NOTES
[*] Attorneys Paul V. Curcio and Margaret P. Mason represented defendants Moliterno Stone Sales, Inc. ("Moliterno Stone"), Kenneth Castellucci, Joseph DeGirolamo, and George Craemer when the two summary judgment motions were filed. After Moliterno Stone was placed in temporary receivership in state court, Attorneys Curcio and Mason obtained the court's permission to withdraw their appearances for all defendants except Castellucci. Attorney Pamela J. Norley subsequently entered an appearance as court-appointed counsel for defendant Craemer, and Ms. Norley authorized Attorney Curcio to argue the summary judgment motions on her behalf. No appearances have been filed for defendants DeGirolamo and Moliterno Stone, and no attorneys represented these defendants at the summary judgment hearing.
[1] See Amended Complaint at ¶ 20. This claim is based on 42 U.S.C. § 2000e-2(a), which provides in pertinent part that
[i]t shall be an unlawful employment practice for an employer ... 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.
[2] See Amended Complaint at ¶ 23. This claim is based on 42 U.S.C. § 2000e-3, which provides in pertinent part that
[i]t shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.
[3] See Defendants' Supplemental Motion for Summary Judgment (filed September 8, 1992) ("Defendants' September 8 Memorandum") at 2-3.
[4] See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Partial Summary Judgment and Supplemental Motion for Summary Judgment ("Plaintiff's Memorandum") (filed February 16, 1993) at 20-34.
[5] In holding that employees individually may agree to arbitrate statutory claims, the Court did not hold that such agreements are always enforceable. Consequently, the courts must "remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds `for the revocation of any contract.'" Gilmer, ___ U.S. at ___, 111 S.Ct. at 1656 (quoting Mitsubishi Motors Corp., 473 U.S. at 627, 105 S. Ct. at 3354). See Laniok v. Advisory Committee of the Brainerd Manufacturing Company Pension Plan, 935 F.2d 1360, 1365 (2d Cir.1991) (noting that waiver of Title VII claims is enforceable only if "knowing and voluntary").
[6] The concerns expressed in Gardner-Denver and Barrentine strongly suggest that a collective-bargaining agreement can never require employees to submit individual statutory claims to grievance procedures. It is possible, however, to adopt a more limited view of the Court's holdings in those cases. Under this view, the exclusion of individual statutory claims from the collective-bargaining process would take the form of a rebuttable presumption rather than an absolute requirement: that is, the courts would assume that individual statutory claims were excluded from grievance procedures unless the collective-bargaining agreement expressly provided otherwise. This view has the virtue of providing substantial protection for individual employees while recognizing that there may be circumstances in which the concerns expressed in Gardner-Denver and Barrentine are irrelevant or inapplicable. In any event, it is unnecessary to resolve this issue here. The defendants have not drawn the court's attention to any provision of the collective-bargaining agreement in this case that could constitute an express waiver of the plaintiff's statutory claims. Indeed, as noted below, the defendants have not properly made the collective-bargaining agreement a part of the record. See note 19, infra.
[7] One decision in this District has taken a contrary position. See Lagrone v. Tomasso, Civil No. 2:91-513 (PCD), slip op., at 3-4 (D.Conn. July 7, 1992) (holding that failure to exhaust grievance procedures available under collective-bargaining agreement does bar Title VII action). With respect, and for the reasons stated above, this court declines to adopt the holding in Lagrone.
[8] See Memorandum in Support of Defendants' Motion for Partial Summary Judgment (filed June 12, 1992) ("Defendants' June 12 Memorandum") at 20.
[9] Conn.Gen.Stat. § 31-284(a) provides in pertinent part that
[a]n employer shall not be liable to any action for damages on account of personal injury sustained by an employee arising out of and in the course of his employment or on account of death resulting from personal injury so sustained, but an employer shall secure compensation for his employees [for such injuries].... Conn.Gen.Stat. § 31-293a provides in pertinent part that
[i]f an employee or, in the case of his death, his dependent has a right to benefits or compensation under this chapter on account of injury or death from injury caused by the negligence or wrong of a fellow employee, such right shall be the exclusive remedy of such injured employee or dependent and no action may be brought against such fellow employee unless such wrong was wilful or malicious or the action is based on the fellow employee's negligence in the operation of a motor vehicle....
[10] 29 U.S.C. § 185 provides in pertinent part that
[s]uits for violation of contracts between an employee and a labor organization representing employees in an industry affecting interstate commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
[11] See Amended Complaint at ¶ 24-1. This claim is based on the Connecticut Supreme Court's holding in Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 427 A.2d 385 (1980). Under Sheets, a former employee can prevail on a wrongful-discharge claim if she can prove "a demonstrably improper reason for dismissal, a reason whose impropriety is derived from some important violation of public policy." Sheets, 179 Conn. at 485, 427 A.2d 385 (emphasis in original).
[12] See Amended Complaint at ¶ 24-2. This claim is based on Conn.Gen.Stat. § 31-51q, which provides in pertinent part that
[a]ny employer, including the state and any instrumentality or political subdivision thereof, who subjects any employee to discipline or discharge on account of the exercise by such employee of rights guaranteed by the first amendment to the United States Constitution or section 3, 4, or 14 of article first of the constitution of the state ... shall be liable to such employee for damages caused by such discipline or discharge....
[13] See Defendants' June 12 Memorandum at 21.
[14] See note 11, supra.
[15] See note 12, supra.
[16] See Amended Complaint at ¶ 25.
[17] See Amended Complaint at ¶ 26.
[18] See Defendants' September 8 Memorandum at 21.
[19] See Response No. 40, Plaintiff's Responses to Requests for Admission of Defendants Moliterno Stone Sales, Inc., Kenneth Castellucci, Joseph DeGirolamo, and George Craemer (filed June 12, 1992), at 10. Because the only issue here is whether the plaintiff's claims can be decided without reference to the collective-bargaining agreement, there is no need for the court to consider the terms and conditions of the collective-bargaining agreement itself. It should be noted, however, that in any event the defendants have not properly made the collective-bargaining agreement a part of the record. The defendants first attempted to place a copy of the bargaining agreement in the record on March 16, 1993, one day after oral argument on the summary judgment motions and more than nine months after the defendants' first summary judgment motion was filed. Moreover, the defendants never produced a copy of the agreement in response to the plaintiff's requests for production during the course of discovery. Finally, the defendants have not yet properly authenticated the copy of the agreement that they did submit. For these reasons, the plaintiff's Objection to Defendants' Amendment of Motion for Summary Judgment (filed March 26, 1993) (objecting to incorporation of collective-bargaining agreement) must be sustained. See also note 6, supra.
[20] See Amended Complaint at ¶ 27 and 29.
[21] See Amended Complaint at ¶ 34.
[22] See Amended Complaint at ¶ 27.
[23] See Amended Complaint at ¶ 28.
[24] See Amended Complaint at ¶¶ 35 and 36. Paragraph 35 of the Amended Complaint alleges that the defendants "represent[ed] or impl[ied] to the plaintiff that she would be free from such injury and suffering as aforedescribed" and alleges that "the defendants knew or should have known such representations were false and said representations were fraudulent." This claim shall be treated as a claim for negligent misrepresentation, rather than intentional misrepresentation, in light of the fact that the plaintiff has simply alleged that the defendants "knew or should have known" that the representations made to the plaintiff were false.
[25] See Defendants' June 12 Memorandum at 4-15 (discussing CWCA) and at 15-20 (discussing LMRA).
[26] See Amended Complaint at ¶ 27.
[27] See Amended Complaint at ¶ 37.
[28] See Defendants' June 12 Memorandum at 21.
[29] See Amended Complaint at ¶ 38. This claim is based on 42 U.S.C. § 1985(c), which provides in pertinent part that
[i]f two or more persons in any State or Territory conspire or go in disguise on the highway or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws ... [and] if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of such conspiracy, whereby another is injured in his person or property ... the party so injured shall have an action for the recovery of damages occasioned by such injury or deprivation, against any one or more of the conspirators.
[30] See Defendants' September 8 Memorandum at 1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2457164/ | 132 F. Supp. 2d 168 (2001)
UNITED STATES of America,
v.
Usama Bin LADEN, a/k/a "Usamah Bin-Muhammad Bin-Ladin," a/k/a "Shaykh Usamah Bin-Ladin," a/k/a "Abu Abdullah," a/k/a "Mujahid Shaykh," a/k/a "Hajj," a/k/a "Abdul Hay," a/k/a "al Qaqa," a/k/a "the Director," a/k/a "the Supervisor," a/k/a "the Contractor," Muhammad Atef, a/k/a "Abu Hafs," a/k/a "Abu Hafs el *169 Masry," a/k/a "Abu Hafs el Masry el Khabir," a/k/a "Taysir," a/k/a "Sheikh Taysir Abdullah," a/k/a "Abu Fatimah," a/k/a "Abu Khadija," Ayman Al Zawahiri, a/k/a "Abdel Muaz," a/k/a "Dr. Ayman al Zawahiri," a/k/a "the Doctor," a/k/a "Nur," a/k/a "Ustaz," a/k/a "Abu Mohammed," a/k/a "Abu Mohammed Nur al-Deen," Mamdouh Mahmud Salim, a/k/a "Abu Hajer al Iraqi," a/k/a "Abu Hajer," Khaled al Fawwaz, a/k/a "Khaled Abdul Rahman Hamad al Fawwaz," a/k/a "Abu Omar," a/k/a "Hamad," Ali Mohamed, a/k/a "Ali Abdelseoud Mohamed," a/k/a "Abu Omar," a/k/a "Omar," a/k/a "Haydara," a/k/a "Taymour Ali Nasser," a/k/a "Ahmed Bahaa Eldin Mohamed Adam," Wadih El Hage, a/k/a "Abdus Sabbur," a/k/a "Abd al Sabbur," a/k/a "Wadia," a/k/a "Abu Abdullah al Lubnani," a/k/a "Norman," a/k/a "Wa'da Norman," a/k/a "the Manager," a/k/a "Tanzanite," Ibrahim Eidarous, a/k/a "Ibrahim Hussein Abdelhadi Eidarous," a/k/a "Daoud," a/k/a "Abu Abdullah," a/k/a "Ibrahim," Adel Abdel Bary, a/k/a "Adel Mohammed Abdul Almagid Abdel Bary," a/k/a "Abbas," a/k/a "Abu Dia," a/k/a "Adel," Fazul Abdullah Mohammed, a/k/a "Harun," a/k/a "Harun Fazhl," a/k/a "Fazhl Abdullah," a/k/a "Fazhl Khan," Mohamed Sadeek Odeh, a/k/a "Abu Moath," a/k/a "Noureldine," a/k/a "Marwan," a/k/a "Hydar," a/k/a "Abdullbast Awadah," a/k/a "Abdulbasit Awadh Mbarak Assayid," Mohamed Rashed Daoud Al-Owhali, a/k/a "Khalid Salim Saleh Bin Rashed," a/k/a "Moath," a/k/a "Abdul Jabbar Ali Abdel-Latif," Mustafa Mohamed Fadhil, a/k/a "Mustafa Ali Elbishy," a/k/a "Hussein," a/k/a "Hussein Ali," a/k/a "Khalid," a/k/a "Abu Jihad," Khalfan Khamis Mohamed, a/k/a "Khalfan Khamis," Ahmed Khalfan Ghailani, a/k/a "Fupi," a/k/a "Abubakary Khalfan Ahmed Ghailani," a/k/a "Abubakar Khalfan Ahmed," Fahid Mohammed Ally Msalam, a/k/a "Fahad M. Ally," Sheikh Ahmed Salim Swedan, a/k/a "Sheikh Bahamadi," a/k/a "Ahmed Ally," Defendants.
No. S(7)98CR.1023(LBS).
United States District Court, S.D. New York.
Filed Under Seal February 16, 2001.
Amended February 16, 2001.
Unsealed and Redacted February 16, 2001.
*170 *171 Mary Jo White, United States Attorney for the Southern District of New York, New York, Patrick J. Fitzgerald, Kenneth M. Karas, Paul W. Butler, Andrew C. McCarthy, Assistant United States Attorneys.
Frederick H. Cohn, Laura Gasiorowski, David Preston Baugh, New York, for Defendant Al-`Owhali.
David A. Ruhnke, Jeremy Schneider, David Stern, New York, for Defendant Khalfan Khamis Mohamed.
Sam A. Schmidt, Joshua L. Dratel, Kristian K. Larsen, New York, for Defendant El Hage.
Anthony L. Ricco, Edward D. Wilford, Carl J. Herman, Sandra A. Babcock, New York, for Defendant Odeh.
OPINION[1]
SAND, District Judge.
Presently before the Court are several motions to suppress evidence on behalf of Defendants Mohamed Rashed Daoud Al-`Owhali ("Al-`Owhali"), Khalfan Khamis Mohamed ("K.K.Mohamed"), and Mohamed Sadeek Odeh ("Odeh"). For the reasons described below, Al-`Owhali's motion is granted in part and denied in part, whereas K.K. Mohamed's motion is denied in its entirety.[2] We address Odeh's motions in a separate sealed opinion also filed today.[3]
I. PROCEDURAL HISTORY
On October 13, 2000, Al-`Owhali moved to suppress the following: (1) all statements *172 made during interrogation by U.S. law enforcement representatives while Al-`Owhali was held in Kenya under Kenyan custody; and (2) an out-of-court witness identification conducted by Kenyan authorities according to Kenyan procedure.[4] A hearing was held on December 12 and 14, 2000, although the motion itself was not fully submitted until December 29.[5]
Jury selection commenced on January 3, 2001. In a sealed opinion dated January 9, we granted the motion to suppress, addressing only the admissibility of statements made by Al-`Owhali to U.S. officials. One week later, on January 16, the Government moved for a reconsideration of our ruling and for a reopening of the suppression hearing. Because the Government's proffer sufficiently indicated the need to further develop the factual record, we granted the motion for reconsideration and withdrew our January 9 sealed opinion. The renewed hearing was held on January 23 and the motion became fully submitted at the close of business on January 26. To accommodate expeditious resolution of the suppression issue, jury selection was suspended between January 23 and 26.
Two days after our initial granting of Al-`Owhali's motion, K.K. Mohamed moved on January 11 to suppress statements he made to U.S. agents while he was held in South Africa under South African custody. A hearing was specifically not requested. That motion became fully submitted at noon on January 24.
II. FINDINGS OF FACT
A. DEFENDANT AL-`OWHALI
We base the following findings of fact on the testimony of the FBI Special Agent ("S.A.") and Assistant U.S. Attorney (AUSA) who interrogated Al-`Owhali in Kenya, the testimony of the FBI Language Specialist who provided Arabic translation services during most of Al-`Owhali's interrogation, and the numerous stipulations, documents, and affidavits[6] admitted into evidence for purposes of the suppression hearings.
The Arrest
1. S.A. Gaudin is currently a member of the Joint Terrorist Task Force based in New York City ("JTTF"). On August 7, 1998, S.A. Gaudin was instructed to travel to Kenya and assist in the joint U.S.-Kenyan investigation of the U.S. embassy bombing in Nairobi that had occurred earlier that same day. He arrived in Nairobi on August 9. It was S.A. Gaudin's understanding that, *173 while there, he was not authorized to make arrests.
2. On August 12, supervisors in Nairobi assigned S.A. Gaudin to pursue a tip concerning a suspicious individual staying at the Iftin Lodge, a hotel located in the Eastleigh neighborhood of Nairobi. Accompanying him were FBI Special Agent Steve Bongardt, New York City Police Detective Wayne T. Parola (also a member of JTTF), two officers of the Criminal Investigation Division of the Kenyan National Police ("CID"), and a Kenyan driver working for the Kenyan police. Together they drove to Iftin Lodge in a covered pickup truck.
3. At approximately 10 a.m. on August 12, the two CID officers entered Iftin Lodge, confronted the individual who was the subject of the lead, and arrested him without a warrant due to his lack of paper identification. Such an arrest was valid under Kenyan law.
4. The suspect was Defendant Al-`Owhali, though at that time he represented that his name was "Kalhad Salim" and that he was from Yemen.[7] On his person were $800 in U.S. currency, some amount of Kenyan cash, and a hospital stub indicating Al-`Owhali's receipt of medical treatment on August 7, the day of the bombing.
5. Al-`Owhali was removed from Iftin Lodge by the CID officers and placed into the rear of the truck. Seated inside were S.A. Gaudin, S.A. Bongardt, and Detective Parola; the three had never entered Iftin Lodge themselves.
6. Al-`Owhali was immediately transported without incident to CID headquarters in Nairobi, about a 25-30 minute drive. No questions were asked of the suspect, but S.A. Gaudin did speak in English to inform Al-`Owhali of the intended destination and to reassure him of his safety.
The Advice of Rights and Subsequent Interrogation
7. Interrogation of Al-`Owhali commenced at around 11 a.m. on August 12. Present were S.A. Gaudin, Detective Parola, and the two CID officers.
8. Detective Parola began the session by presenting the suspect with a modified advice of rights form written in English ("the AOR"). S.A. Gaudin admitted to having never seen an AOR like it before, although it is one apparently used often by U.S. law enforcement when acting overseas.
9. In its entirety, the AOR read as follows:
We are representatives of the United States Government. Under our laws, you have certain rights. Before we ask you any questions, we want to be sure that you understand those rights.
You do not have to speak to us or answer any questions. Even if you have already spoken to the Kenyan authorities, you do not have to speak to us now.
If you do speak with us, anything that you say may be used against you in a court in the United States or elsewhere.
In the United States, you would have the right to talk to a lawyer to get advice before we ask you any questions and you could have a lawyer with you during questioning. In the United States, if you could not afford a lawyer, one would be appointed for you, if you wish, before any questioning.
Because we are not in the United States, we cannot ensure that you will have a lawyer appointed for you before any questioning.
If you decide to speak with us now, without a lawyer present, you will still *174 have the right to stop answering questions at any time.
You should also understand that if you decide not to speak with us, that fact cannot be used as evidence against you in a court in the United States.
I have read this statement of my rights and I understand what my rights are. I am willing to make a statement and answer questions. I do not want a lawyer at this time. I understand and know what I am doing. No promises or threats have been made to me and no pressure or coercion of any kind has been used against me.
10. S.A. Gaudin had no instructions on how to proceed in the event that Al-`Owhali requested the presence of an attorney.
11. Detective Parola asked Al-`Owhali (in English) whether he could read the AOR. Al-`Owhali indicated that he could not read English, but that he could understand spoken English to a limited degree.
12. Detective Parola read the AOR aloud in English, going slowly and checking for visual signs of comprehension. Al-`Owhali appeared to understand, replied that he understood when asked, and signed his alias at the bottom of the AOR in Arabic when requested to do so.
13. The FBI interpreter who was present at most of Al-`Owhali's interrogations in Kenya testified that, in his opinion, Al-`Owhali would likely have had difficulty understanding the AOR if it were only read to him aloud in English.
14. The CID officers did not advise Al-`Owhali of his rights under Kenyan law, nor did they ever do so during any other day of interrogation.
15. Al-`Owhali agreed to answer the Americans' questions and the session continued for roughly one hour. The interrogation was conducted entirely in broken English.
Oral Translation of the AOR and Subsequent Interrogation
16. Due to difficulties in communication, it was decided by the interrogators that an Arabic interpreter would be preferable. The parties have stipulated as to the sufficient qualifications of this interpreter, and that she had no trouble communicating with Al-`Owhali or vice versa.
17. Because the interpreter was afraid for her safety, she remained in the room hidden from Al-`Owhali at all times behind a blanket used as a makeshift curtain.
18. Present at this afternoon session on August 12, other than the interpreter, were S.A. Gaudin, Detective Parola, and the two CID officers.
19. S.A. Gaudin read aloud the same printed AOR while the translator concurrently translated what was being said into Arabic. Subsequently, Al-`Owhali indicated that he understood that the warning was the same one as from the morning session and that he understood his rights as described therein.
20. Al-`Owhali agreed to answer questions. This interview lasted about 3 hours.
Continued Interrogation
21. From the outset, Al-`Owhali was considered by his interrogators to be a suspect in the embassy bombing, a violation of both U.S. and Kenyan law. S.A. Gaudin understood that he was, at all times, involved in a criminal investigation.
22. Subsequent to August 12, interrogation of Al-`Owhali took place on eight other days: August 13 (approx. 4 hours), 14 (approx. 2 to 2.5 hours), 17 (approx. 3.5 hours), and 21-25.
23. During the interrogations between August 12 and 17, the primary Americans *175 involved were S.A. Gaudin and Detective Parola. Between August 21 and 25, the primary Americans involved were S.A. Gaudin and S.A. Bongardt. AUSA [redacted] took an active role beginning on August 22.
24. The Kenyan police rarely, if ever, posed questions of their own to Al-`Owhali.
25. The first interpreter was used only for interrogations between August 12-14. FBI Language Specialist ("L.S.") Mike Feghali provided translation services from August 17 onward. The Court found L.S. Feghali to be eminently qualified.
26. At the start of each interrogation on August 13, 14, 17, and 21, rather than re-apprise Al-`Owhali of his rights, the interrogators would simply show Al-`Owhali the written AOR he had signed on August 12 and inquire if he recalled the description of his rights contained therein. Asked if he would continue to answer questions, Al-`Owhali agreed.
Identification Parade
27. At approximately 12:05 p.m. on August 20, the CID subjected Al-`Owhali to an identification parade. This procedure is similar to a police station lineup as conducted in the United States, the major differences being that in Kenya witnesses face the array in person and a greater number of stand-ins are used. A positive identification occurs when a witness touches the shoulder of an individual standing in the array.
28. Besides Al-`Owhali, there were 8 stand-ins used in the identification parade.
29. This proceeding was held at the direction of the Kenyans.
30. Six witnesses viewed the parade, but only one recognized Al-`Owhali.
31. The parade took place away from CID headquarters at the Kilamani Police Station of the Kenyan National Police. S.A. Gaudin and Detective Parola were both present; L.S. Feghali acted as the Arabic translator.
32. When informed that Kenyan law permitted a friend or solicitor to be present, Al-`Owhali requested a representative from the Yemeni embassy; for reasons unclear, the embassy declined to send a representative at that time.
U.S. Missile Strikes
33. During the evening of August 20, it became known in Kenya that the United States had carried out missile strikes against locations in Afghanistan and Sudan which were believed to be associated with Usama Bin Laden. These strikes were in retaliation to the bombings of the U.S. embassies in Kenya and Tanzania.
34. In the ensuing days, some political figures in Kenya announced in public that none of the U.S. embassy bombing suspects should be tried in Kenya.
35. For reasons of safety, much of the American presence in Kenya was pared down to essential personnel. Detective Parola returned to the United States, while S.A. Gaudin, S.A. Bongardt, and AUSA [redacted] remained.
Inculpatory Statements
36. From the moment of his arrest on August 12 until late into the August 21 interrogation, Al-`Owhali consistently denied involvement in the embassy bombing.
37. On August 21, S.A. Gaudin fingerprinted Al-`Owhali in his holding cell. S.A. Gaudin did so in the belief that he might shortly be leaving Kenya and thought it best to have such evidence in his file. This was the first time Al-`Owhali had been fingerprinted by either the Americans or Kenyans.
*176 38. For purposes of the August 21 interrogation, S.A. Gaudin and S.A. Bongardt related to Al-`Owhali all the evidence they had thus far amassed against him.
39. After acknowledging that the agents "knew everything," Al-`Owhali said that he would tell the truth about his involvement in the bombing if he could be tried in the United States. Al-`Owhali stated that he wanted to be tried in the United States because the United States was his enemy, not Kenya.
40. Because the agents did not know how to respond to Al-`Owhali's demand for a guarantee that he would in fact be taken to the United States, the session ended without further questioning. No inculpatory statements were made.
41. On August 22, AUSA [redacted] joined in the interrogation of Al-`Owhali. Additionally present were S.A. Gaudin, S.A. Bongardt, and the two CID officers.
42. At the start of the meeting, AUSA [redacted] presented to Al-`Owhali the following document of understanding ("the DOU"), previously approved by AUSA [redacted]'s superiors at the U.S. Department of Justice:
I ... have been fully advised of my rights, including my right to remain silent and my right not to answer questions without a lawyer present. As I have been previously told, I understand that anything I say or have said can be used against me in court in the United States. I also understand that if I choose not to answer questions my refusal to answer questions cannot be held against me in court. I further understand that if I choose to answer questions, I can always change my mind and decide not to answer any further questions.
I understand that both Kenyan and American authorities are investigating the murder of the various American and Kenyan victims in and around the United States embassy in Nairobi.
I have a strong preference to have my case tried in an United States Court because America is my enemy and Kenya is not. I would like my past and present statements about what I have done and why I have done it to be aired in public in an American courtroom. I understand that the American authorities who are interviewing me want to know who committed the bombing of the embassy and how it was carried out.
I am willing to waive my rights and answer the questions of American authorities upon the condition that the undersigned law enforcement authorities make all best efforts to see that I am brought to the United States to stand trial. I understand that the undersigned prosecutor is only empowered to make recommendations to the Attorney General of the United States and other executive officials of the United States Government and I further understand that the United States Government only intends to act with the mutual agreement of the Kenyan government.
No other agreements or promises have been made other than as set forth in this document.
43. Before the DOU was read to Al-`Owhali, Al-`Owhali commented that he might wish to have an attorney review the DOU to make sure it was enforceable.
44. As a prudential measure, AUSA [redacted] immediately advised Al-`Owhali of his Miranda rights. This was recited entirely from AUSA [redacted]'s memory of a domestic Miranda warning. AUSA [redacted] made no reference to the AOR utilized on the first day of interrogation. This was all translated by L.S. Feghali.
45. AUSA [redacted] told Al-`Owhali that he had the right to remain silent; *177 that he had the right "to have an attorney present during this meeting;" that even if Al-`Owhali decided to talk he could always change his mind later; that Al-`Owhali's statements could be used against him in court, though the fact of his silence could not. AUSA [redacted] also said that he was an attorney for the U.S. government, not for Al-`Owhali. It was repeatedly stressed to Al-`Owhali that he was the "boss" at all times as to whether he wished to answer questions without a lawyer present.
46. AUSA [redacted] told Al-`Owhali that there was no American attorney currently available for him in Kenya.
47. Al-`Owhali indicated that he understood all of his rights.
48. AUSA [redacted] then read the agreement aloud to Al-`Owhali through L.S. Feghali. As to each and every paragraph, AUSA [redacted] asked Al-`Owhali if he understood what had just been explained to him; Al-`Owhali said yes. At no time did Al-`Owhali assert his rights.
49. By the time the penultimate paragraph of the DOU was read to him, Al-`Owhali expressed dissatisfaction with the uncertainty associated with just a "recommendation" that he be brought to the United States. As a result, AUSA [redacted] left the room to make further inquiries of his superiors. Before leaving, AUSA [redacted] asked twice if Al-`Owhali was comfortable proceeding without an attorney; Al-`Owhali said yes.
50. After more than two hours, Al-`Owhali indicated that he would be willing to talk even without a full guarantee because he trusted the U.S. officials to do the best they could to bring him to the United States.
51. AUSA [redacted] returned and asked if Al-`Owhali was comfortable proceeding without an attorney. Al-`Owhali said that he was and that he wished to sign the DOU.
52. The DOU was presented to Al-`Owhali. It was not re-read to him, though Al-`Owhali did sign it, but only after advising that the DOU would have to be revised in order to include his true name and nationality. The DOU was signed at 4:36 p.m. Kenyan time.
53. The interrogation on August 22 lasted from 1:10 p.m. to approximately 8:00 p.m.
54. During the next four days of interrogation, Al-`Owhali inculpated himself in the embassy bombing.
55. At the beginning of the sessions on August 23, 24, and 25, rather than reread the DOU to Al-`Owhali, the interrogators simply showed him the document to ensure that he recalled its contents. Asked if he still wished to answer questions, Al-`Owhali assented.
56. The interviews on August 23 and 24 lasted for about 3 hours, while the August 25 session lasted about 9 hours.
Immunity Deal
57. Late into the August 25 interrogation, Al-`Owhali indicated that he possessed time-sensitive information regarding an issue of public safety, but would only reveal it if he was guaranteed that he would be tried in the United States and not Kenya. AUSA [redacted], with approval from Washington, created a second document of understanding ("the second DOU") for Al-`Owhali's signature:
I ... have been fully advised of my rights, including my right to remain silent and my right not to answer questions without a lawyer present. As I have been previously told, I understand that anything I say or have said can be used against me in court in the United States. I also understand that if I choose not to answer questions my refusal *178 to answer questions cannot be held against me in court. I further understand that if I choose to answer questions, I can always change my mind and decide not to answer any further questions.
I have answered a number of questions of the American authorities and have provided truthful information after initially providing incorrect information. However, I have also indicated that there is additional information that I have which I stated I would share with the United States authorities upon my arriving in America and obtaining an attorney. I have also indicated that the information concerns a public safety issue. Because I would otherwise not make this disclosure before arriving in the United States and speaking to an attorney, but because American authorities do not wish to take the risk that the delay concerning the information I intend to impart later will cause loss of life, it is hereby agreed that I will tell the United States authorities about this information prior to returning to America. In turn, the American authorities agree not to use the fact that I disclosed this particular information against me as evidence in the Government's case in chief if I should demand a trial of the charges that will be filed against me. I understand that the United States intends to pursue appropriate investigative leads based upon this information I am now agreeing to provide. I also understand that the United States is free to use any evidence gained in following up the investigative leads but will not advise any jury that hears my case of the fact that I revealed this particular information to the United States government, unless: (1) I testify falsely (or otherwise elicit false or misleading evidence or testimony) and revealing this fact will serve to correct false or misleading evidence; or (2) I request that the jury be advised of the fact that I disclosed this particular information and the Court overrules objection, if any, by the Government. The Government hereby agrees that if the Defendant is convicted, the Government will disclose the fact that I provided this information to the judge or jury determining or imposing sentence if requested to do so by the defendant. There is no promise that providing such information will affect my sentence.
No other agreements or promises have been made other than as set forth in this document and the prior agreement dated August 22, 1998.
I have decided to sign this document because I have been advised by the undersigned that I am now scheduled to be removed to the United States within the next 24 hours, travel conditions permitting, and the undersigned is aware of no objections from either the United States or Kenya governments to such removal.
58. AUSA [redacted] read the second DOU to Al-`Owhali through L.S. Feghali, and Al-`Owhali signed. Al-`Owhali then proceeded to relate the subject information to his interrogators. At Al-`Owhali's request, this conversation took place without the Kenyan police.
59. On the morning of August 26, Al-`Owhali was transported from Kenya to the United States. Once aboard the aircraft, Al-`Owhali was advised of his conventional Miranda rights by S.A. Gaudin through L.S. Feghali. Al-`Owhali stated that he knew his rights, signed the advice of rights form, and invoked his right to appointed counsel.
60. He arrived in New York City at approximately 1:40 a.m. on August 27. He appeared before a federal magistrate judge in the Southern District of New York at about 10:00 a.m. that day.
Conduct of the Interrogators
61. Al-`Owhali was never in handcuffs during any of his interviews in Kenya.
*179 62. All interviews were held in a library-like room fitted with tables and chairs.
63. Frequent breaks were taken to allow Al-`Owhali to use the restroom, pray, and eat. Prayer breaks lasted for about 15 minutes.
64. Bottled water was provided upon request; food was often provided by the agents.
65. No threats were made by the U.S. agents, nor were any promises made.
Conditions of Confinement
66. Al-`Owhali was held by Kenyan authorities in incommunicado detention from August 12 until August 26a total of fourteen nights. Kenyan law allows for 14 days of post-arrest detention for those suspected of a capital offense.
67. For the first two nights, he was held at the Jomo Kenyatta International Airport Police Station in Nairobi. The cell was 10-feet-by-11-feet, had a 2-feet-by-5-feet window, and had a concrete bed. Al-`Owhali shared this cell with another individual.
68. On the third night he was moved to an 8-feet-by-8-feet concrete holding cell within the basement of CID headquarters, where he remained until his rendition to the United States on August 26. In this cell, Al-`Owhali slept on some sort of thin mat and was provided with at least one blanket.
69. Medical attention was given to Al-`Owhali as needed.
Characteristics of the Accused
70. At the time of the interrogations, Al-`Owhali had a basic understanding of spoken English. He would sometimes answer the simpler questions posed to him before the Arabic interpreter had even finished translating it.
71. To the U.S. officials who interrogated him, Al-`Owhali appeared to be an intelligent, well-read individual. Al-`Owhali has two years of university education and significant military experience.
72. During his interviews with American agents, he exhibited familiarity with a variety of political and world events.
The Decision to Prosecute in the United States
73. The final decision that Al-`Owhali would be prosecuted in the United States was made on or about an August 25, 1998 telephone conversation between the U.S. Attorney for the Southern District of New York and the U.S. Attorney General.
B. DEFENDANT K.K. MOHAMED
Because K.K. Mohamed moves to suppress statements purely on the basis of an allegedly deficient advice of rights administered by U.S. officials, our findings of fact are limited to that narrow issue. We base our findings on the various affidavits and documentary evidence submitted in connection with the motion.
The Arrest
74. On or about August 1999, S.A. Gaudin was in Cape Town, South Africa in furtherance of his investigation into the East Africa embassy bombings.
75. Christo Terblanche, Chief Immigration Officer ("CIO") of the South African Department of Home Affairs ("SADHA"), met with S.A. Gaudin at SADHA's Cape Town headquarters on August 30, 1999. There, he afforded S.A. Gaudin access to a file relating to South African asylum seekers.
76. In that file, S.A. Gaudin found an asylum application bearing the photograph of an individual he recognized as K.K. Mohamed. The name used in the application, however, was not that of K.K. Mohamed. S.A. Gaudin immediately *180 informed CIO Terblanche of this discrepancy.
77. This lead to the arrest of K.K. Mohamed on October 5, 1999 the date when he, as an asylum applicant, was required to be at the Cape Town Customs Building in order to extend the temporary immigration permit that permitted him to stay in South Africa.
78. Present for the arrest were CIO Terblanche, another SADHA immigration officer, and S.A. Gaudin. S.A. Gaudin, however, took no part in the arrest.
79. CIO Terblanche identified himself to K.K. Mohamed and apprised him of his rights under South African law. K.K. Mohamed was told that he was under arrest, that he was under no duty to say anything, that anything he said might be used in evidence against him, and that he was entitled to legal representation if he so wished.
80. Thereafter, K.K. Mohamed was taken to a SADHA holding facility at Cape Town International Airport.
South African Interrogation
81. K.K. Mohamed was first interrogated by CIO Terblanche and Immigration Officer Gideon Christians. Nobody else was present. The topic of this interview concerned only K.K. Mohamed's immigration status in South Africa.
82. Before any questioning began, Officer Christians again told K.K. Mohamed that he was entitled to a legal representative if he so wished.
Interrogation by U.S. Law Enforcement
83. After the South African officers finished, FBI agents were allowed to speak with K.K. Mohamed. They did so on October 5 and 6.
84. Two FBI agents conducted these interrogations. Nobody else was present.
85. Immediately upon meeting K.K. Mohamed on October 5, the agents asked of his language abilities. K.K. Mohamed indicated that his English was sufficient to communicate; Swahili is his native language.
86. The agents presented K.K. Mohamed with English and Swahili versions of the following AOR:
We are representatives of the United States Government. Under our laws, you have certain rights. Before we ask you any questions, we want to be sure that you understand those rights.
You do not have to speak to us or answer any questions. Even if you have already spoken to the South African authorities, you do not have to speak to us now.
If you do speak with us, anything that you say may be used against you in a court in the United States or elsewhere.
In the United States, you would have the right to talk to a lawyer to get advice before we ask you any questions and you could have a lawyer with you during questioning. In the United States, if you could not afford a lawyer, one would be appointed for you, if you wish, before any questioning.
Because we are not in the United States, we cannot ensure that you will have a lawyer appointed for you before any questioning.
If you decide to speak with us now, without a lawyer present, you will still have the right to stop answering questions at any time.
You should also understand that if you decide not to speak with us, that fact cannot be used as evidence against you in a court in the United States.
I have read this statement of my rights and I understand what my rights are. I am willing to make a statement and answer questions. I do not want a *181 lawyer at this time. I understand and know what I am doing. No promises or threats have been made to me and no pressure or coercion of any kind has been used against me.
87. In all relevant respects, this was the same AOR that was used during U.S. questioning of Al-`Owhali in Kenya.
88. After being read the English form and then reading the Swahili form on his own, K.K. Mohamed indicated that he understood his rights and that he was willing to speak with the agents. K.K. Mohamed signed both forms.
III. MOTIONS TO SUPPRESS CUSTODIAL STATEMENTS: FIFTH AMENDMENT
A. LEGAL STANDARD
Our analysis of Defendants' motions to suppress statements turns chiefly on the constitutional standard we adopt today, as a matter of first impression, concerning the admissibility of a defendant's admissions at his criminal trial in the United States, where that defendant is a non-resident alien and his statements were the product of an interrogation conducted abroad by U.S. law enforcement representatives. We conclude that such a defendant, insofar as he is the present subject of a domestic criminal proceeding, is indeed protected by the privilege against self-incrimination guaranteed by the Fifth Amendment, notwithstanding the fact that his only connections to the United States are his alleged violations of U.S. law and his subsequent U.S. prosecution. Additionally, we hold that courts may and should apply the familiar warning/waiver framework set forth in Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966), to determine whether the government, in its case-in-chief, may introduce against such a defendant evidence of his custodial statements even if that defendant's interrogation by U.S. agents occurred wholly abroad and while he was in the physical custody of foreign authorities.
1. The Privilege Against Self-Incrimination and Non-Resident, Unconnected Aliens
The predicate issue is as follows: Is the Government correct that a criminal defendant on trial in the United States does not enjoy the privilege against self-incrimination because he is a non-resident alien whose only connections to the United States are his alleged violations of U.S. law and his subsequent U.S. prosecution?[8] We regard this narrow reading of the Constitution as being at odds with the text of the Fifth Amendment, overarching notions of fundamental fairness, relevant caselaw, and the policy goals supporting the privilege against self-incrimination. Therefore, we reject the Government's interpretive contention and find that defendants in the position of Al-`Owhali and K.K. Mohamed may properly invoke the privilege against self-incrimination as a basis for suppressing custodial statements made to U.S. law enforcement representatives during overseas interrogation. (Cf. United States v. Yunis, 859 F.2d 953, 970-971 (D.C.Cir. 1988) (Mikva, J., concurring specially) (reaching same conclusion).)
To begin, it bears noting that the Government incorrectly frames the legal inquiry as one dependent on the extraterritorial application of the Fifth Amendment. Whether or not Fifth Amendment rights reach out to protect individuals while they are situated outside the United States is beside the point. This is because any violation of the privilege against self-incrimination occurs, not at the moment law enforcement officials coerce statements through custodial interrogation, but when a defendant's involuntary statements are actually used against him at an American *182 criminal proceeding.[9] (See United States v. Verdugo-Urquidez, 494 U.S. 259, 264, 110 S. Ct. 1056, 108 L. Ed. 2d 222 (1990) ("Although conduct by law enforcement officials prior to trial may ultimately impair [the privilege against self-incrimination], a constitutional violation occurs only at trial.") (citing Kastigar v. United States, 406 U.S. 441, 453, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972)); Deshawn E. by Charlotte E. v. Safir, 156 F.3d 340, 346 (2d Cir.1998) ("Even if it can be shown that a statement was obtained by coercion, there can be no Fifth Amendment violation until that statement is introduced against the defendant in a criminal proceeding.").) Indeed, were the opposite the case that is, if instead the Fifth Amendment injury resulted from the forcible extraction of a statement and not its later evidentiary use then no statute compelling witness testimony under grants of immunity could withstand constitutional challenge. (See Mahoney v. Kesery, 976 F.2d 1054, 1061-62 (7th Cir.1992); see also Kastigar, 406 U.S. at 453, 92 S. Ct. 1653 (upholding federal witness immunity statute on grounds that, by barring prosecutor from use and derivative use of witness's compelled testimony, statute satisfies "sole concern" of privilege against self-incrimination, i.e., "insur[ing] that the testimony cannot lead to the infliction of criminal penalties on the witness").) The violation of Defendants' rights here, if any, is clearly prospective, and so the relevant question is the scope of the privilege against self-incrimination as to non-resident aliens presently inside the United States and subject to domestic criminal proceedings.[10]
*183 We turn first to the expansive language used in the Fifth Amendment itself. Its criminal procedure provisions are that:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law ....
(U.S. Const.amend.V.) The crucial phrase is "no person" and it neither denotes nor connotes any limitation in scope, in marked contrast to the use of "the people" in most of the other Amendments contained within the Bill of Rights. (Compare id. with U.S. Const. amends. I, II, IV, IX, & X. See also Verdugo, 494 U.S. at 264-266, 110 S. Ct. 1056; Wang v. Reno, 81 F.3d 808, 817 (9th Cir.1996).) From the outset, then, these protections seemingly apply with equal vigor to all defendants facing criminal prosecution at the hands of the United States, and without apparent regard to citizenship or community connection.
In the face of the Amendment's inclusive text, however, the Government insists that "any assessment of the extent to which constitutional rights may vest in a non-American in a given instance is significantly influenced by the degree to which he has sought to insert himself into the fabric of our society." (Gov't Dec. 11, 2000 Ltr. to the Court at 2.) Whatever the validity of this proposition in unrelated contexts (e.g., immigration), it is unsupportable in its intimation that criminal defendants on trial in a U.S. court should receive differing levels of Fifth Amendment procedural protection depending on their level of "insertion" into American society. Indeed, as the Government itself admits (id. at 3), the U.S. Supreme Court has already found at least one right contained in the Fifth Amendment to be free from such constriction. (See Mathews v. Diaz, 426 U.S. 67, 77, 96 S. Ct. 1883, 48 L. Ed. 2d 478) (1976)) ("There are literally millions of aliens within the jurisdiction of the United States. The Fifth Amendment, as well as the Fourteenth Amendment, protects every one of these persons from deprivation of life, liberty, or property without due process of law. Even one whose presence in this country is unlawful, involuntary, or transitory is entitled to that constitutional protection.") (citations omitted); see also Verdugo-Urquidez, 494 U.S. at 278, 110 S. Ct. 1056 (Kennedy, J., concurring) (commenting that, "[a]ll would agree ... that the dictates of the Due Process Clause of the Fifth Amendment protect the defendant," where the prosecuted defendant was in fact an unconnected, non-resident alien); Jean v. Nelson, 472 U.S. 846, 105 S. Ct. 2992, 86 L. Ed. 2d 664 (1985) ("The right of an unadmitted alien to Fifth Amendment due process protections at trial is universally respected by the lower federal courts ....").)
It is true that the Supreme Court has yet to rule affirmatively that the three remaining Fifth Amendment procedural guarantees indictment by grand jury, bar on double jeopardy, and privilege against self-incrimination apply to criminal defendants who are non-citizens. But we find that circumstance to be emblematic, not of doctrinal reticence, but of widespread acceptance that these strictures apply universally to any criminal prosecution brought by the United States within its own borders. (See, e.g., Verdugo-Urquidez, 494 U.S. at 278, 110 S. Ct. 1056 (Kennedy, J., concurring) ("I do not mean to imply, and the Court has not decided, that persons in the position of respondent [i.e., unconnected, non-resident aliens] have no constitutional protection. The United States is prosecuting a foreign national in a court established under Article III, and all of the trial proceedings are governed by the Constitution."); Jean, 472 U.S. 846, *184 105 S.Ct. at 3006-07 ("[W]hen an [excludable] alien detained at the border is criminally prosecuted in this country, he must enjoy at trial all of the protections that the Constitution provides to criminal defendants.").) And even in the context of this particular case, we note that the parties have proceeded as if Defendants indeed possessed these three rights: The Government has sought a grand jury indictment nine times; the Court has reviewed the charging instrument for multiplicitous counts; and the desire by some defendants not to testify at various hearings, whenever so expressed, has been scrupulously honored. In sum, we are not at all surprised that courts rarely, if ever, face the scenario wherein the United States, acting domestically, attempts to convict non-resident aliens without following the procedural framework of the Fifth Amendment.[11]
Of great significance is the Supreme Court's own explicit treatment of the privilege against self-incrimination as a "fundamental trial right of criminal defendants." (Verdugo-Urquidez, 494 U.S. at 264, 110 S. Ct. 1056 (citing Malloy v. Hogan, 378 U.S. 1, 84 S. Ct. 1489, 12 L. Ed. 2d 653 (1964)).) In doing so, that Court has heretofore heralded the constitutionalization of the right as "register[ing] an important advance in the development of our liberty `one of the great landmarks in man's struggle to make himself civilized.'" (Ullmann v. United States, 350 U.S. 422, 426, 76 S. Ct. 497, 100 L. Ed. 511 (1956) (citing Griswold, The Fifth Amendment Today (1955) at 7); see also Withrow v. Williams, 507 U.S. 680, 113 S. Ct. 1745, 123 L. Ed. 2d 407 (1993) ("The privilege embodies `principles of humanity and civil liberty, which had been secured in the mother country only after years of struggle ....'") (quoting Bram v. United States, 168 U.S. 532, 544, 18 S. Ct. 183, 42 L. Ed. 568 (1897)).) Consider too this untrammeled praise:
"[A]ny compulsory discovery by extorting the party's oath ... to convict him of crime ... is contrary to the principles of a free government. It is abhorrent to the instincts of an Englishman; it is abhorrent to the instincts of an American. It may suit the purposes of despotic power, but it cannot abide the pure atmosphere of political liberty and personal freedom."
(Malloy, 378 U.S. 1, at 9 n. 7, 84 S. Ct. 1489 (quoting Boyd v. United States, 116 U.S. 616, 631-632, 6 S. Ct. 524, 29 L. Ed. 746 (1886)).) It is quite understandable why the Supreme Court has urged, and we *185 wholeheartedly agree, that "[t]his constitutional protection must not be interpreted in a hostile or niggardly spirit." (Ullmann, 350 U.S. at 426, 76 S. Ct. 497.)
Lastly, we believe that the policies undergirding the Fifth Amendment privilege against self-incrimination are no less relevant when the criminal defendant at issue is an unconnected, non-resident alien. Those "fundamental" and "noble" goals, as described by Justice Goldberg, are:
[O]ur unwillingness to subject those suspected of crime to the cruel trilemma of self-accusation, perjury or contempt; our preference for an accusatorial rather than an inquisitorial system of criminal justice; our fear that self-incriminating statements will be elicited by inhumane treatment and abuses; our sense of fair play which dictates a fair state-individual balance by requiring the government to leave the individual alone until good cause is shown for disturbing him and by requiring the government in its contest with the individual to shoulder the entire load; our respect for the inviolability of the human personality and of the right of each individual to a private enclave where he may lead a private life; our distrust of self-deprecatory statements; and our realization that the privilege, while sometimes a shelter to the guilty, is often a protection to the innocent.
(U.S. v. Balsys, 524 U.S. 666, 690, 118 S. Ct. 2218, 141 L. Ed. 2d 575 (1998) (quoting Murphy v. Waterfront Comm'n of N.Y. Harbor, 378 U.S. 52, 55, 84 S. Ct. 1594, 12 L. Ed. 2d 678 (1964)).) While these policies may arguably lose their force when the fear of compelled self-incrimination points to a prospective foreign prosecution (see id. at 690-691, 118 S. Ct. 2218), when the defendant is, as here, prosecuted within the United States, before a United States court, for alleged violations of United States law, having been previously and thoroughly interrogated by U.S. law enforcement then the Government's use of a coerced confession against him would still have the debilitating effect of infecting our criminal justice system. Such a system will undoubtedly, "in the long run, be less reliable and more subject to abuses." (Withrow, 507 U.S. at 692, 113 S. Ct. 1745; see also Miranda, 384 U.S. at 460, 86 S. Ct. 1602 ("[O]ur accusatory system of criminal justice demands that the government seeking to punish an individual produce the evidence against him by its own independent labors, rather than by the cruel, simple expedient of compelling it from his own mouth.").)
We hold that Defendants Al-`Owhali and K.K. Mohamed, as the present subjects of a U.S. criminal proceeding, are protected by the Fifth Amendment's privilege against self-incrimination, despite their status as non-resident aliens whose only connections to this country are their alleged crimes and their domestic prosecution therefor.
2. Applying Miranda to the Overseas Interrogation by U.S. Law Enforcement of a Suspect in Foreign Custody
Our next inquiry focuses on an issue imbued with significant consequence, not the least of which is its inevitable impact on U.S. law enforcement officials who, in furtherance of their duties and with increasing regularity, are dispatched and stationed beyond our national borders. Assume for purposes of this discussion these generalized facts: An individual held in the custody of foreign police is suspected of having violated both local and U.S. criminal law. As a matter of global comity, U.S. law enforcement representatives are permitted inside the foreign stationhouse to pose their own questions to the suspect. U.S. agents eventually succeed in extracting inculpatory statements, and the suspect is thereafter transported to the United States for prosecution, with the consent of foreign authorities. By what standards should a domestic court admit the above statements as governmental evidence at trial? We believe that a principled, *186 but realistic application of Miranda's familiar warning/waiver framework, in the absence of a constitutionally-adequate alternative, is both necessary and appropriate under the Fifth Amendment. Only by doing so can courts meaningfully safeguard from governmental incursion the privilege against self-incrimination afforded to all criminal defendants in this country wherever in the world they might initially be apprehended while at the same time imposing manageable costs on the transnational investigatory capabilities of America's law enforcement personnel.
In Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966), the Supreme Court found custodial interrogation to be presumptively coercive. It mattered not that this police practice, in its modern American guise, is "psychologically rather than physically oriented." (Id. at 448, 86 S. Ct. 1602.) Indeed, the technique's core characteristicsabove all, "to thrust [the suspect] into an unfamiliar atmosphere and run [him] through menacing ... procedures made it "obvious" to the Court "that such an interrogation environment is created for no purpose other than to subjugate the individual to the will of his examiner." (Id. at 457, 86 S. Ct. 1602.) The Court thus concluded that "[u]nless adequate protective devices are employed to dispel the compulsion inherent in custodial surroundings, no statement obtained from the defendant can truly be the product of his free choice." (Id. at 458, 86 S. Ct. 1602.) And so, for an accused's own words to be used against him at trial, the prosecutor must first show that those admissions were preceded by an advice of rights to the accused, followed by a valid waiver of those rights. If, on the other hand, law enforcement failed to observe the Miranda safeguards, then the statement must be suppressed, thereby securing a defendant's privilege against self-incrimination from government intrusion, as well as deterring future police misconduct. This tenet, rooted squarely in the Constitution, "has become embedded in routine police practice to the point where the warnings have become part of our national culture." (Dickerson v. United States, 530 U.S. 428, 120 S. Ct. 2326, 2336, 147 L. Ed. 2d 405 (2000).)
Contrary to the Government's apocalyptic protestations, we are not dissuaded from applying Miranda to overseas interrogations conducted by U.S. law enforcement, even if the interrogational target is in the physical custody of foreign authorities. After all, the inherent coerciveness of that police technique is clearly no less troubling when carried out beyond our borders and under the aegis of a foreign stationhouse. It is, on the contrary, far more likely that a custodial interrogation held in such conditions will present greater threats of compulsion since all that happens to the accused cannot be controlled by the Americans. For instance, the laws of the host nation might permit lengthy incommunicado detention subsequent to arrest, thereby leaving the accused isolated and without assistance for a duration not seen today in America. Substandard detention conditions could further contribute to the toll. Worst yet, local authorities may privately engage in aggressive practices, both legal and illegal in their own nation, but certainly not tolerated within the United States. As such, by the time U.S. agents are finally on hand to ask questions of their own, strong countervailing forces will already have run head first into the free will of the accused.[12]
None of this is to say that American law enforcement representatives, who have behaved conscientiously and with great sensitivity, should always be responsible for the acts of a foreign sovereign. Rather, our point is as is that of the Supreme Court in Mirandathat the inherent coercion *187 associated with any custodial interrogation is a specter that haunts all confessions later gleaned therefrom, even apart from the added externalities of oppressive detention and improper police behavior. (See id. at 455-456, 86 S. Ct. 1602.) The great wisdom of Miranda that American law enforcement must do what it can at the start of interrogation to dissipate the taint of compulsion is equally prescient, if not more so, when U.S. agents are conducting custodial interrogations in foreign lands, where certain factors impinging on voluntariness will simply be out of their control. For purposes of safeguarding the Fifth Amendment privilege against self-incrimination, the Miranda warning/waiver framework still provides, even in the overseas context, a necessary and workable solution. We therefore hold that a defendant's statements, if extracted by U.S. agents acting abroad, should be admitted as evidence at trial only if the Government demonstrates that the defendant was first advised of his rights and that he validly waived those rights. Suppression in the absence of either requirement will protect that defendant insofar as he is the present subject of a domestic criminal proceeding, while additionally deterring U.S. law enforcement from again committing similar omissions.[13] (See Dickerson, 530 U.S. 428, 120 S.Ct. at 2336 (rejecting case-by-case inquiry into voluntariness in favor of constitutionally-based Miranda warning/waiver framework).)
Our conclusion in this regard is further reinforced by the line of cases involving the suppression of statements elicited during overseas interrogation by foreign police. These decisions uniformly recognize an exception to the usual rule that the failure to provide Miranda warnings is not dispositive of the motion to suppress whenever questioning is conducted by foreign authorities. Referred to as the "joint venture" exception, it provides that the lack of Miranda warnings will still lead to suppression if U.S. law enforcement themselves actively participated in the questioning (see United States v. Heller, 625 F.2d 594, 599 (5th Cir.1980); Pfeifer v. United States Bureau of Prisons, 615 F.2d 873, 877 (9th Cir.), cert. denied, 447 U.S. 908, 100 S. Ct. 2993, 64 L. Ed. 2d 858 (1980); United States v. Emery, 591 F.2d 1266, 1268 (9th Cir.1978); United States v. Hensel, 509 F. Supp. 1364, 1375 (D.Me.1981)), or if U.S. personnel, despite asking no questions directly, used the foreign officials as their interrogational agents in order to circumvent the requirements of Miranda (see United States v. Bagaric, 706 F.2d 42, 69 (2d Cir.), cert. denied, 464 U.S. 840, 104 S. Ct. 133, 78 L. Ed. 2d 128 (1983), abrogated on other grounds, National Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 114 S. Ct. 798, 127 L. Ed. 2d 99 (1994); Welch, 455 F.2d at 213; Heller, 625 F.2d at 599; Hensel, 509 F.Supp. at 1375; United States v. Molina-Chacon, 627 F. Supp. 1253, 1262 (E.D.N.Y.1986), aff'd sub nom, United States v. DiTommaso, 817 F.2d 201 (2d Cir.1987)). Whatever the precise formulation, the existence of the exception itself is based on the assumption that Miranda must apply to any portion of an overseas interrogation that is, in fact or form, conducted by U.S. law enforcement. This is perfectly consistent with our holding today.
It now remains to be decided what specific warnings should be administered by U.S. agents prior to their overseas interrogation of a suspect not in U.S. custody. Clearly, he must be told that he has the right to remain silent, effective even if he has already spoken to the foreign authorities. *188 He must also be told that anything he does say may be used against him in a court in the United States or elsewhere. This much is uncontroversial. But what about the right to the assistance and presence of counsel, either privately retained or publicly appointed? Unlike the previous two admonitions, this one may often be affected by the fact that the suspect is being interrogated overseas and that he is in the physical custody of a foreign nation. We agree with the Government that Miranda does not require law enforcement to promise that which they cannot guarantee or that which is in fact impossible to fulfill. No constitutional purpose is served by compelling law enforcement personnel to lie or mislead subjects of interrogation. Nor does Miranda mandate that U.S. agents compel a foreign sovereign to accept blind allegiance to American criminal procedure, at least when U.S. involvement in the foreign investigation is limited to mutual cooperation. However, if the particular overseas context actually presents no obvious hurdle to the implementation of an accused's right to the assistance and presence of counsel,[14] due care should be taken not to foreclose an opportunity that in fact exists.[15] To the maximum extent reasonably possible, efforts must be made to replicate what rights would be present if the interrogation were being conducted in America.
We thus believe that the fair and correct approach under Miranda is for U.S. law enforcement simply to be clear and candid as to both the existence of the right to counsel and the possible impediments to its exercise.[16] The goal is to convey to a suspect that, with respect to any questioning by U.S. agents, his ability to exercise his right to the presence and assistance of counsel a right ordinarily unqualified hinges on two external considerations arising from the fact of his foreign custody. First, since there exists no institutional mechanism for the international provision of an American court-appointed lawyer, the availability of public counsel overseas turns chiefly on foreign law.[17] Second, foreign law may also ban all manner of defense counsel from even entering the foreign stationhouse, and such law necessarily trumps American procedure.[18] Given *189 these eventualities, U.S. law enforcement can only do the best they can to give full effect to a suspect's right to the presence and assistance of counsel, while still respecting the ultimate authority of the foreign sovereign. And if an attorney, whether appointed or retained, is truly and absolutely unavailable, and that result remains unsatisfactory to the suspect, he should be told that he need not speak to the Americans so long as he is without legal representation. Moreover, even if the suspect opts to speak without a lawyer present, he should know that he still has the right to stop answering questions at any time.
The foregoing reading of Miranda renders baseless the Government's claims that a warning/waiver requirement will impose intolerable costs to both international investigatory cooperation and America's own ability to deter transnational crime. As described above, if foreign law indeed bans all counsel from the stationhouse entirely, then we do not require U.S. law enforcement to violate such laws. Rather, only if the foreign authorities themselves permit the assistance and presence of counsel will that right be given effect during interrogation by U.S. agents. Even less persuasive is the alleged inability of the United States to counter transnational crime when constrained by Miranda overseas. We doubt that the simple recitation of an advice of rights to a criminal suspect questioned abroad, when such warnings are already required domestically, will in any way shift the tide in favor of global lawlessness. To the extent that a suspect's Miranda rights allegedly impede foreign intelligence collection, we note that Miranda only prevents an unwarned or involuntary statement from being used as evidence in a domestic criminal trial; it does not mean that such statements are never to be elicited in the first place.[19]
In sum, we hold that statements obtained during overseas interrogation by U.S. law enforcement must meet the warning/waiver requirements of Miranda before they will be admitted into the Government's case-in-chief at trial. That the defendant at the time of interrogation was in the physical custody of foreign authorities matters only insofar as the specific admonitions recited should conform to the local circumstances regarding access to counsel, both retained and appointed, while inside the foreign stationhouse.
B. ANALYSIS
1. The Overseas FBI Advice of Rights Form
U.S. law enforcement utilized the exact same AOR during the overseas interrogation of both Defendants whose motions to suppress are presently before the Court. In this subsection of the Opinion, we discuss only the facial sufficiency of the AOR as written. But because this AOR was also used in the interrogations of other defendants in the instant prosecution, and is apparently still being used by American law enforcement in its other international operations, the wider significance of our holding is heightened. We find, at least on the facts of this case, that *190 the AOR is facially deficient in its failure to apprise Defendants accurately and fully of their right, under Miranda, to the assistance and presence of counsel if questioned by U.S. agents, even considering the fact that Defendants were in the custody of foreign authorities.
Through the AOR, a suspect interrogated overseas by U.S. officials is initially told the following with respect to counsel:
In the United States, you would have the right to talk to a lawyer to get advice before we ask you any questions and you could have a lawyer with you during questioning. In the United States, if you could not afford a lawyer, one would be appointed for you, if you wish, before any questioning.
Since the suspect is obviously aware that he is not now "in the United States," the logical conclusion for him to draw is that neither of the two previously enumerated rights are currently available to him. The clear, overriding message is that the right to counsel is instead geographically based. Appropriately enough, this reading is confirmed by the very next sentence:
Because we are not in the United States, we cannot ensure that you will have a lawyer appointed for you before any questioning.
Nothing else in the AOR addresses a suspect's right to the assistance and presence of counsel for purposes of custodial interrogation by U.S. personnel.[20] Yet, standing alone, the three sentences above wrongly convey to a suspect that, due to his custodial situs outside the United States, he currently possesses no opportunity to avail himself of the services of an attorney before or during questioning by U.S. officials. The AOR, as is, prematurely forecloses the significant possibility that the foreign authorities themselves may, if asked, either supply counsel at public expense or permit retained counsel inside the stationhouse. Crucially, according to the provisions of foreign law received into evidence before the Court, at least one or both of these possibilities existed at the time of Defendants' respective interrogations in South Africa and Kenya.
In regard to South Africa, its Constitution guarantees that a suspect under interrogation has "the right to consult with an attorney of [his] choice and where [his] ability to procure the services of an attorney will lead to an injustice, the state will provide [him] with the services of an attorney." (Gov't Opp. to K.K. Mohamed's Mot. Ex. C.) The Court's understanding of the law as to Kenya, however, is murky at best. Kenya's Constitution imparts: "Every person who is charged with a criminal offense shall be permitted to defend himself before the court in person or by a legal representative of his own choice." (Kenya Const. § 77(2)(d).) Moreover, "nothing contained in [the aforementioned provision] shall be construed as entitling a person to legal representation at public expense." (Id. § 77(2)(14).) Yet the Kenyan Criminal Procedure Code guarantees that "[a] person accused of an offense before a criminal court, or against whom proceedings are instituted under this Code in a criminal court, may of right be defended by an advocate." (Kenya Crim. P.Code ch. 75, § 193.) And the Kenya Police Force Standing Orders also ensure: "Every person detained by police should be given facilities for communicating with a friend or legal adviser, and such person should be permitted to visit the prisoner." (Kenya Police Force Standing Orders ch. 49, § 15(i).) We deem it highly inadvisable for the Court to interpret, in the first instance, how these various provisions play *191 out in practice within Kenya. That exercise, however, is fortunately unnecessary since we see nothing in the Government's submissions that leads us to believe that, in Kenya, a suspect under interrogation is always banned from seeking the advice and presence of retained counsel. Indeed, the Government's own representation has been that "any participation by [retained] counsel in the interview process is at the sole discretion of the investigators." ([redacted] Jan. 16, 2001 Aff. ¶ 5.)
Quite apart from what South African and Kenyan law afford as to the assistance and presence of counsel during interrogation, we note that the record leaves open the possibility that, if given the chance, both K.K. Mohamed and Al-`Owhali may have been able to retain counsel on their own.[21] K.K. Mohamed had resided in South Africa for over a year at the time of his arrest. For much of that period he was gainfully employed, and in fact his employer (who was also a friend and housemate), after finding out about the arrest, explored the possibility of retaining an attorney on behalf of K.K. Mohamed, only to be dissuaded by immigration officers of the South African Department of Home Affairs. As for Al-`Owhali, at the time of his arrest he possessed $800 in U.S. currency, a sizeable sum in Kenya. There is no indication that these funds, or their equivalent, would not have been available to Al-`Owhali for purposes of retaining counsel.
The AOR is flawed in its message that, despite being interrogated by U.S. law enforcement, Defendants only had a right to the assistance and presence of counsel if they were physically inside the United States. We find this to be an inaccurate representation of what truly was available to Defendants under South African and (to a lesser extent) Kenyan law. The result of this erroneous advice of rights was that Defendants were presented with an unduly constrained range of choices: They could either (1) remain silent or (2) go on to answer the American officials' questions without an attorney present. Conspicuously absent was the right to counsel before and during interrogation, a right Miranda itself underscores as paramount and vital for those who suddenly find themselves alone inside a police interrogation room.
With respect to Defendants, the problem is considerably more severe. Rather than make no representation at all concerning the right to counsel, the Government made an entirely faulty one. The right to counsel was made to seem dependent on geography, when instead it actually hinged on foreign law. And as described above, that premature foreclosure ran counter to the availability of counsel as it exists under both South African and Kenyan law.[22]*192 Therefore, we hold that the AOR, on its face, is inadequate under Miranda and its progeny.[23]
2. Defendant Al-`Owhali
The deficient AOR was used to apprise Al-`Owhali of his rights for the first five interrogation sessions. Although he himself could not read the English-language AOR, it was read aloud to him in Arabic, his native language, only once. Thereafter, the AOR was not re-read to Al-`Owhali again, but only shown to him in order to refresh his recollection. At no other time during these first five sessions did any U.S. or Kenyan personnel orally elaborate or explain to Al-`Owhali what his rights were during the interrogations. Because we find the AOR, standing alone, to be insufficient under Miranda, all statements elicited during these interrogation sessions August 12, 13, 14, 17, and 21 are hereby suppressed.
(a) Curing the Deficient AOR
By the sixth interrogation session, however, Al-`Owhali had made it clear that he was willing to inculpate himself in the embassy bombing in exchange for some kind of guarantee from the Americans that any criminal trial would take place in the United States instead of Kenya. At the start of the August 22 session, in anticipation of any statements forthcoming that day, AUSA [redacted] presented Al-`Owhali with a document of understanding ("DOU") setting forth in detail the various understandings between Al-`Owhali and his interrogators. Al-`Owhali then made an offhand remark that perhaps he should have a lawyer review the DOU to ascertain its enforceability.[24] At this point, AUSA [redacted] exercised due caution by orally apprising Al-`Owhali of his rights. Al-`Owhali was told that he had the right to remain silent, that anything he said could be used against him in court, and that he had the right to the presence of an attorney "during this meeting," although an American attorney was currently unavailable. Al-`Owhali was additionally told that his silence could not be used against him in court, and that even if he decided to talk now he could still change his mind later. AUSA [redacted] further stressed that he was an attorney for the U.S. government, not for Al-`Owhali. Throughout it all, Al-`Owhali was reminded repeatedly that he was the "boss" as to whether he wanted to answer questions without a lawyer present.
AUSA [redacted]'s oral advice of rights cured the deficient AOR. We found in Subsection III.B.1 supra that the AOR was flawed in its message that the right to counsel during an interrogation by U.S. agents was geographically based, especially since it remained a possibility that Kenyan authorities would have permitted a retained Kenyan lawyer to enter the stationhouse. For the August 22 session, however, Al-`Owhali was explicitly apprised that he had the right to the presence of an attorney for purposes of the ensuing conversations. The only qualification placed on this right was the current unavailability of an American lawyer. But this was entirely true given the fact that the parties were not in the United States and were not in any position to instantly *193 produce an American court-appointed attorney. At the same time, no limits were expressed as to Al-`Owhali's ability to retain Kenyan counsel if he wished to do so. We thus conclude that AUSA [redacted]'s oral advice of Miranda rights on August 22 cured the deficiency in the AOR so that, beginning on August 22, Al-`Owhali was apprised of his rights in compliance with the requirements of Miranda. (See Oregon v. Elstad, 470 U.S. 298, 105 S. Ct. 1285, 84 L. Ed. 2d 222 (1985); United States v. Yousef, 925 F. Supp. 1063, 1075 (S.D.N.Y. 1996).)
(b) Waiver
We further find, by a preponderance of the evidence, that Al-`Owhali made a valid waiver of his Miranda rights on and after the August 22 session. His waiver was knowing and intelligent in that all conversations and documents touching upon his rights were translated to him in his native language by qualified interpreters. AUSA [redacted] explained these rights fully, carefully, and repetitively. Al-`Owhali never expressed that he was having difficulty understanding what was being told him. Even apart from his many oral waivers, Al-`Owhali signed two different DOUs, both of which state: "I ... have been fully advised of my rights, including my right to remain silent and my right not to answer questions without a lawyer present." Al-`Owhali's behavior during the interrogations subsequent to August 22 made it clear that he was quite aware who was the "boss" as to whether statements would or would not be made without a lawyer present.
Viewing the totality of the circumstances, we additionally conclude that Al-`Owhali's waiver was voluntary. His decision to talk was not the product of any duress, threat, promise, or coercion by his interrogators. The individual sessions were intermittent and reasonable in duration; handcuffs were never used. Throughout the interviews, Al-`Owhali was given breaks for prayer, restroom use, and food. Al-`Owhali, moreover, is a well-educated and intelligent individual. His demeanor before the Americans was one indicative of confidence, not of intimidation.[25] That his inculpatory admissions were preceded by a period of incommunicado detention is not by itself dispositive. First, such post-arrest detention of murder suspects is authorized under Kenyan law and it was the Kenyans who retained physical custody of Al-`Owhali. Second, the conditions of confinement, although non-ideal, were far from oppressive. Third, we have found no reason to believe that any of the Kenyan or U.S. law enforcement who came into contact with Al-`Owhali abused or mistreated him in any way. His needs dietary, medical, and religious were met and Al-`Owhali made no contemporaneous complaints to the contrary. And fourth, the interrogation sessions were not of the continuous, around-the-clock variety considered suspect by courts. Every conversation between Al-`Owhali and his interviewers proceeded after it was first clear that he himself wished to speak. Indeed, there is evidence that Al-`Owhali regarded his sessions with S.A. Gaudin as a cat-and-mouse game between trained professionals. (See [redacted] Jan. 16, 2001 Aff. ¶ 43 (when S.A. Gaudin confronted Al-`Owhali with inconsistencies in his story, Al-`Owhali remarked, "you're good").)
We have also given due consideration as to the significance, if any, of the following passage in the second DOU, which Al-`Owhali signed:
I have answered a number of questions of the American authorities and have provided truthful information after initially providing incorrect information. However, I have also indicated that there is additional information that I have which I stated I would share with the United States authorities upon my arriving in America and obtaining an attorney.... Because I would otherwise not make this disclosure before arriving *194 in the United States and speaking to an attorney, but because American authorities do not wish to take the risk that the delay concerning the information I intend to impart later will cause loss of life, it is hereby agreed that I will tell the United States authorities about this information prior to returning to America.
In our initial (and since-withdrawn) opinion granting suppression, we thought Al-`Owhali's statements to be the product of a "Hobson's choice" that supposedly pitted his continued silence in Kenya against his access to an American attorney. Now, after considering the added evidence submitted by the Government at the renewed suppression hearing, we believe that what truly motivated Al-`Owhali to inculpate himself was his own overriding desire that he be tried in the United States. As he declared to the U.S. agents interviewing him, it was the United States which was his enemy, not Kenya. Particularly significant is the fact that the suggestion that he be tried in America was initiated entirely by Al-`Owhali. And when Al-`Owhali was dissatisfied by the less-than-firm assurances offered in the first DOU, he demanded that AUSA [redacted] do better. All of the above confirms our belief that Al-`Owhali's decision to waive his rights and confess to the Americans was a decision borne of his own volition. We hold that statements made by Al-`Owhali to U.S. law enforcement in Kenya on or after August 22 are admissible.[26]
3. Defendant K.K. Mohamed
K.K. Mohamed moves to suppress statements he made to U.S. law enforcement while in the custody of South African officials.[27] He bases his motion purely on the legal claim that the AOR used by the Americans was facially deficient under Miranda. No allegations of coercion, involuntariness, or invalid waiver have been made. Although K.K. Mohamed is correct that the AOR, standing alone, is deficient indeed, we reach that very conclusion above we find suppression in this situation nevertheless unwarranted. We first point out that the reason we found the AOR problematic was that it prematurely foreclosed an option that might have been available under foreign law, i.e., the right to counsel inside a foreign stationhouse. Here, however, K.K. Mohamed was twice affirmatively apprised of his right to counsel under South African law. He was told at the time of his arrest that he was entitled to legal representation if he so wished. And at the start of his first interrogation, South African officers notified him again that he was entitled to counsel. By the time U.S. agents began their own interviews of K.K. Mohamed later that day, any deficiency in the AOR as to his right to counsel under foreign law had already been cured by the actions of South African officers earlier that morning. We therefore deny K.K. Mohamed's motion to suppress.[28]
IV. MOTION TO SUPPRESS CUSTODIAL STATEMENTS: VIENNA CONVENTION
Al-`Owhali seeks suppression of his statements on the alternative ground that *195 the American agents who interrogated him failed to advise him of his right to contact his consulate as required by the Vienna Convention.[29] (Al-`Owhali Mot. at 24-27.) He also claims that, when he inquired about the possibility of contacting an embassy representative, he was told that "no one would ever come." (Id. at 25.) According to Al-`Owhali, the Government's failure to inform him of his right to request assistance from the Saudi Arabian embassy deprived him of the advice of an embassy representative, whom Al-`Owhali posits would likely have advised him of his right to consult an attorney. (Id. at 27.) For purposes of this motion, the Court assumes both that Al-`Owhali has a private right of action under the Vienna Convention[30] and that this right was infringed by the Government's failure to inform him of his right to contact his embassy.[31] The Court nonetheless finds that, for several reasons, the law does not afford Al-`Owhali the remedy he seeks. This aspect of Al-`Owhali's motion is therefore denied.[32]
Numerous courts have established that a violation of the right to consular notification does not implicate fundamental constitutional rights. (See Waldron v. I.N.S., 17 F.3d 511, 518 (2d Cir.1994); Polanco v. United States, 2000 WL 1072303, *6 (S.D.N.Y.2000) ("[A] violation of the Vienna Convention's consular notice provision does not constitute a constitutional violation or a fundamental defect in the conduct of [defendant's] trial."); see also Murphy v. Netherland, 116 F.3d 97, 100 (4th Cir.1997); United States v. Rodrigues, 68 F. Supp. 2d 178, 183 (E.D.N.Y. 1999).) As a result, Al-`Owhali is required to demonstrate the prejudice that he suffered as a consequence of the violation of his right to consular notification. (See *196 Murphy, 116 F.3d at 100-01; Faulder v. Johnson, 81 F.3d 515, 520 (5th Cir.1996); United States v. Chanthadara, 230 F.3d 1237, 1256 (10th Cir.2000); United States v. Salameh, 54 F. Supp. 2d 236, 279 (S.D.N.Y.1999); United States v. Kevin, 1999 WL 194749, *4 (S.D.N.Y.1999); Rodrigues, 68 F.Supp.2d at 183.)
Al-`Owhali claims that, if properly notified, he would have availed himself of the right to consular notification and thus would, in all likelihood, have been advised by a Saudi Arabian embassy representative of his right to consult with counsel. On its face, this claim of prejudice is highly speculative. (See Breard v. Greene, 523 U.S. 371, 377, 118 S. Ct. 1352, 140 L. Ed. 2d 529 (1998) (rejecting claim where showing of prejudice was overly speculative).) The Court notes that Al-`Owhali was apprised by the Kenyan police of the right to consular notification prior to the August 20, 1998 identification parade on, at which time he, still claiming to be a Yemeni national, requested that the Yemeni embassy be contacted.[33] Until he revealed his actual identity (and his Saudi citizenship) on August 22, it is not apparent to the Court that he would have availed himself of the right to have the Saudi embassy contacted. And the Court has already established that, as of August 22, 1998, the Government properly advised Al-`Owhali of his Miranda rights. Given that, it is not clear what additional assistance an embassy representative would have provided in this regard. (See Rodrigues, 68 F.Supp.2d at 184 ("Prejudice has never been nor could reasonably be found in a case where a foreign national was given, understood, and waived his or her Miranda rights. Courts have uniformly found that no prejudice can exist in that situation, because the advice a consular official would give would simply augment the content of Miranda, which the foreign national has already waived.").) In addition, nothing in the text of the Vienna Convention requires that police interrogation be suspended once a suspect requests consular notification. (See United States v. Lombera-Camorlinga, 206 F.3d 882, 886 (9th Cir.2000), cert. denied, ___ U.S. ___, 121 S. Ct. 481, 148 L. Ed. 2d 455 (2000); Rodrigues, 68 F.Supp.2d at 184.)
Al-`Owhali's claim also fails because the remedy he seeks is unavailable. Courts have routinely held that suppression of a defendant's statements is not an appropriate remedy for a violation of the Vienna Convention. (See United States v. Li, 206 F.3d 56, 61 (1st Cir.), cert. denied, ___ U.S. ___, 121 S. Ct. 378, 148 L. Ed. 2d 292, (2000); United States v. Page, 232 F.3d 536, 540 (6th Cir.2000); United States v. Lawal, 231 F.3d 1045, 1047-48 (7th Cir. 2000); Lombera-Camorlinga, 206 F.3d at 887; United States v. Carrillo, 70 F. Supp. 2d 854, 860-61 (N.D.Ill.1999); Salameh, 54 F.Supp.2d at 279); Rodrigues, 68 F.Supp.2d at 185.) In so holding, several courts have relied, in part, upon the State Department's published interpretation of the Vienna Convention; it outlines the remedies which are available for the failure to advise someone of his right to consular notification. According to the State Department, "[t]he only remedies for failures of consular notification under the Vienna Convention are diplomatic, political, or exist between states under international law." (Li, 206 F.3d at 63 (citation omitted); see also Lombera-Camorlinga, 206 F.3d at 887 ("The State Department indicates that it has historically enforced the Vienna Convention itself, investigating reports of violations and apologizing to foreign governments and working with domestic law enforcement to prevent future violations when necessary."); Rodrigues, 68 F.Supp.2d at 186 ("According to the State Department, all signatory countries remedy breach of Article 36's notification *197 provision through traditional diplomatic, not judicial, channels.").)
V. MOTION TO SUPPRESS WITNESS IDENTIFICATION
Chapter 46 of the Kenya Police Force Standing Orders provides for an "identification parade." It is a lineup procedure whereby a suspect is placed among at least eight other persons of similar appearance and a witnesses is asked to attempt a positive identification. (Gov't Ex. 5.) Witnesses are required to "actually touch" the person that they recognize. (Id.) On August 20, 1998, during an identification parade conducted by the Kenyan CID, an eyewitness to the bombing identified Defendant Al-`Owhali as the passenger in the truck which carried the bomb to the American embassy in Nairobi. Al-`Owhali seeks suppression of this identification evidence because he claims that the lineup was overly suggestive.[34] According to Al-`Owhali, at the time of the lineup, he had visible wounds on his face and hands, as well as blood stains on his clothes. (Cohn Aff. at 15-16.)
Under the Federal Rules of Evidence, identification evidence is generally admissible. (Fed.R.Evid.801(d)(1)(C) (characterizing as "not hearsay" evidence of a prior statement "of identification of a person made after perceiving the person").) Evidence of a prior identification will be excluded "only if the procedure that produced the identification is `so unnecessarily suggestive and conducive to irreparable mistaken identification that the defendant was denied due process of law.'" (United States v. Bautista, 23 F.3d 726, 729 (2d Cir.1994) (quoting Stovall v. Denno, 388 U.S. 293, 302, 87 S. Ct. 1967, 18 L. Ed. 2d 1199 (1967)), overruled on other grounds, Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708, 93 L. Ed. 2d 649 (1987).) As the Supreme Court has explained, "[s]uggestive confrontations are disapproved because they increase the likelihood of misidentification." (Neil v. Biggers, 409 U.S. 188, 198, 93 S. Ct. 375, 34 L. Ed. 2d 401 (1972).) Identification evidence that is the product of an overly suggestive procedure may still be admissible if "under the `totality of the circumstances' the identification was reliable." (Id. at 199, 93 S. Ct. 375.) However, if a court determines that an identification procedure was not suggestive, "independent reliability is not a constitutionally required condition of admissibility, and the reliability of the identification is simply a question for the jury." (Jarrett v. Headley, 802 F.2d 34, 42 (2d Cir.1986).)
The Court has reviewed several photographs of the participants in the identification parade and finds that the eight standins physically resembled Al-`Owhali in their skin color, the length and color of their hair, their facial hair (all appear to have some sort of moustache), their approximate heights, the manner of their dress and their apparent ages. (Gov't Exs. 6A-6J.) Al-`Owhali was not handcuffed or in any other way distinguishable from the other participants in the lineup. In addition, the Court has examined the clothes that Al-`Owhali wore during the identification parade. (Def.Exs.C-D.) The Court finds that, while there appear to be a few stains which may have been on the clothes at the time of the identification parade, these stains are small and not obvious. In and of themselves, they certainly would not have made the procedure suggestive.[35] Indeed, as the Government asserts (Gov't Jan. 17, 2001 Ltr. to the *198 Court at 3), the clothing worn by Al-`Owhali during the parade could not have been exceedingly suggestive when only one of the six witnesses who participated in the identification parade was actually able to identify Al-`Owhali. (See United States v. Arrington, 159 F.3d 1069, 1072 (7th Cir. 1998) ("That the lineups were not unduly suggestive is best exemplified by the fact that two tellers identified someone other than Arrington as the robber.").) Finally, the Court notes that Al-`Owhali made no mention of the blood stains when, immediately following the identification parade, he was given an opportunity by the Kenyan CID to raise any objection to the manner in which the identification procedures had been conducted. (Gov't Ex. 5.) The facts presented do not approach the degree of suggestiveness that is required to suppress identification evidence. (See Brayboy v. Scully, 695 F.2d 62, 65 (2d Cir.1982) (collecting and describing cases which have found impermissible suggestiveness).) Because we find that the procedure was not suggestive, it is not necessary to consider the reliability of the identification. (See Jarrett, 802 F.2d at 42; Brayboy, 695 F.2d at 65.) Al-`Owhali's motion to suppress the identification evidence is denied.
VI. CONCLUSION
For all of the foregoing reasons, Defendant Al-`Owhali's motion to suppress is granted in part and denied in part, whereas K.K. Mohamed's motion to suppress is denied in its entirety.
NOTES
[1] This Opinion will be unsealed on February 16, 2001. Proposed redactions, if any, should be provided to the Court in advance of this date.
[2] We orally delivered a preliminary ruling to this effect from the bench on January 29, 2001. This Opinion presents, in greater detail, our findings of fact and conclusions of law.
[3] We address in this separate opinion Al-`Owhali's claim that there was a lack of timely presentment as required by Rule 5 of the Federal Rules of Civil Procedure.
[4] The Court had previously set a deadline of June 15, 2000 for the filing of suppression motions. The lateness of Al-`Owhali's motion was due to various circumstances that included a change of counsel for Al-`Owhali and his ambivalence as to whether the motion should even be made.
[5] At the hearing, counsel for Al-`Owhali indicated that his client would not testify. Subsequent to the hearing's conclusion, counsel stated that Al-`Owhali, against the advice of counsel, in fact desired to testify. The matter was eventually resolved by a stipulation between the parties that, had Al-`Owhali actually testified, his testimony would have been consistent with the affidavit he submitted in support of his suppression motion.
[6] With respect to AUSA [redacted]'s January 16, 2001 affidavit, we strike paragraphs 5-7 for lack of foundation. We also strike as legal argument paragraphs 3, 9-10, 11 (last 2 sentences only), 16, 26, 29, 31, 37 (last 2 sentences only), 39, 55, 59, 63, 65-68, 69 (last sentence only), 70-71, and 74-81, as well as footnotes 1, 3 (last sentence only) 4, 9, 11, 12 (last 2 sentences only), 13, and 37. All objections based on hearsay are denied. (See Fed. R.Evid. 104(a) (court not bound by rules of evidence in preliminary proceedings concerning admissibility of evidence, except for issues of privilege); Fed.R.Evid. 1101(d)(1) (evidence rules inapplicable to "[t]he determination of questions of fact preliminary to admissibility of evidence when the issue is to be determined by the court under Rule 104"); see also United States v. Raddatz, 447 U.S. 667, 679, 100 S. Ct. 2406, 65 L. Ed. 2d 424 (1980) ("At a suppression hearing, the court may rely on hearsay and other evidence even though that evidence would not be admissible at trial.").)
[7] His true name and national origin would not be known until an interrogation on August 22.
[8] Originally, the Government conceded the application of the Fifth Amendment. It later retreated from this position 1 day prior to the first Al-`Owhali suppression hearing. (Gov't Dec. 11, 2000 Ltr. to the Court)
[9] Limited support for this reasoning can further be found in cases where courts have addressed efforts by defendants to suppress statements resulting from overseas interrogation by foreign police. These decisions refuse to suppress statements on the sole ground that foreign police failed to administer pre-interrogational Miranda warnings; the deterrent rationale of the exclusionary rule, it is posited, has little force with respect to a foreign sovereign. (See, e.g., United States v. Welch, 455 F.2d 211, 213 (2d Cir.1972); Kilday v. United States, 481 F.2d 655, 656 (5th Cir.1973).) However, the same courts then go on to determine whether the challenged statement is nonetheless involuntary and should thus be suppressed pursuant to the privilege against self-incrimination. (See, e.g., Welch, 455 F.2d at 213 (citing Bram v. United States, 168 U.S. 532, 18 S. Ct. 183, 42 L. Ed. 568 (1897) (privilege against self-incrimination case)); Kilday, 481 F.2d at 656 (citing same).) This added layer of review assumes implicitly what we state explicitly above: that the extraterritorial situs of interrogation is not dispositive since the Constitution is violated when a defendant's compelled statement is used against him as evidence, and not when he is coerced into making it in the first place. (See Brulay v. United States, 383 F.2d 345, 349 n. 5 (9th Cir.) ("[W]e believe that if the statement is not voluntarily given, whether given to a United States or foreign officer, the defendant has been compelled to be a witness against himself when the statement is admitted."), cert. denied, 389 U.S. 986, 88 S. Ct. 469, 19 L. Ed. 2d 478 (1967). But see United States v. Wolf, 813 F.2d 970, 973 n. 3 (9th Cir.1987) (suggesting, but not deciding, that the effect of Colorado v. Connelly, 479 U.S. 157, 107 S. Ct. 515, 93 L. Ed. 2d 473 (1986), might be that Fifth Amendment suppression is not required when confession obtained by foreign as opposed to American police).)
[10] It is for this reason that the Government's heavy reliance on United States v. Verdugo-Urquidez, 494 U.S. 259, 110 S. Ct. 1056, 108 L. Ed. 2d 222 (1990), Johnson v. Eisentrager, 339 U.S. 763, 70 S. Ct. 936, 94 L. Ed. 1255 (1950), and Harbury v. Deutch, 233 F.3d 596 (D.C.Cir.2000), is fundamentally misplaced. In all three cases, the putative constitutional injury occurred entirely abroad, thereby necessarily raising the issue of a specific Amendment's extraterritorial effect. (See Verdugo-Urquidez, 494 U.S. at 264, 110 S. Ct. 1056 (search and seizure in Mexico); Eisentrager, 339 U.S. at 766, 70 S. Ct. 936 (prosecution and conviction in China; imprisonment in Germany); Harbury, 233 F.3d at 603 (torture in Guatemala).)
Moreover, at issue in Eisentrager was a specific kind of non-resident alien "the subject of a foreign state at war with the United States." (339 U.S. at 769 n. 2, 70 S. Ct. 936.) And though the trial and conviction in China of the Eisentrager aliens was "conducted wholly under American auspices and involved no international participation," the proceeding was operated pursuant to a temporary military commission specially constituted under the authority of the Joint Chiefs of Staff. (Id. at 766, 70 S. Ct. 936.) It did not involve a domestic Article III court, as is the circumstance with respect to the instant Defendants.
[11] One such rare instance came before the Supreme Court in Wong Wing v. United States, 163 U.S. 228, 16 S. Ct. 977, 41 L. Ed. 140 (1896). The 1892 Chinese Exclusion Act provided that any person of Chinese descent found, by means of a summary proceeding, to be illegally present in the United States "shall be imprisoned at hard labor for a period not exceeding one year" prior to his deportation "to the country whence he came." (Id. at 230, 234, 16 S. Ct. 977.) While finding no problem with the exclusion, detention, and deportation provisions of the Act, the Court overruled its punitive element. It found the prescribed punishment criminal and "infamous," and thus one that could only be imposed in accordance with the Fifth and Sixth Amendments. (Id. at 237, 16 S. Ct. 977 ("But when Congress sees fit to further promote [its immigration] policy by subjecting the persons of such aliens to infamous punishment at hard labor, or by confiscating their property, we think such legislation, to be valid, must provide for a judicial trial to establish the guilt of the accused."); see also id. at 238, 16 S. Ct. 977 ("[I]t must be concluded that all persons within the territory of the United States are entitled to the protection guaranteed by [the Fifth and Sixth Amendments]."); id. at 242, 16 S. Ct. 977 (Field, J., concurring in part and dissenting in part) ("The term `person' used in the Fifth Amendment, is broad enough to include any and every human being within the jurisdiction of the republic.").) As for petitioners' citizenship status, the opinion reveals only that they were Chinese subjects and that they were arrested in Detroit for being "unlawfully within the United States." (Id. at 239, 16 S. Ct. 977 (Field, J., concurring in part and dissenting in part).) Nothing, however, is reported as to how long they had actually been inside America. (But see Verdugo-Urquidez, 494 U.S. at 271, 110 S. Ct. 1056 (inexplicably reading Wong Wing as pertaining only to "resident aliens," when the very aliens in that case were about to be expelled for being without legal U.S. residency).)
[12] The interplay between foreign custody and U.S. interrogation may render some suspects vulnerable in a separate sense: They may be unduly predisposed to talking to U.S. agents in the hope that doing so provides a means of relocation to the United States, where criminal defendants enjoy greater protection from governmental overreaching.
[13] The Government calls it "positively perverse" that the admissibility of Defendants' statements would not require any Miranda warnings at all if those statements were instead the product of questioning by foreign police. (Gov't Post-Hr'g Memo. in Opp. to Al-`Owhali's and Odeh's Mots. at 48-49.) Yet we see nothing at all anomalous in requiring our own Government to abide by the strictures of our own Constitution whenever it seeks to convict an accused, in our own courts, on the basis of admissions culled via an inherently coercive interrogation conducted by our own law enforcement.
[14] In other words, if foreign law itself provides appointed counsel to the indigent or permits access to counsel prior to and during interrogation.
[15] This is so because the intervention of counsel will almost always provide some sort of benefit to a target of interrogation, a point conceded by the Government. (Gov't Memo. in Support of Reconsideration at 16.) Here, since there existed both the threat of foreign and U.S. prosecution, either an American or foreign lawyer, if desired, might have been helpful to Defendants.
[16] Perhaps in the following manner:
Under U.S. law, you have the right to talk to a lawyer to get advice before we ask you any questions and you can have a lawyer with you during questioning. Were we in the United States, if you could not afford a lawyer, one would be appointed for you, if you wished, before any questioning.
Because you are not in our custody and we are not in the United States, we cannot ensure that you will be permitted access to a lawyer, or have one appointed for you, before or during any questioning.
However, if you want a lawyer, we will ask the foreign authorities to permit access to a lawyer or to appoint one for you. If the foreign authorities agree, then you can talk to that lawyer to get advice before we ask you any questions and you can have that lawyer with you during questioning.
If you want a lawyer, but the foreign authorities do not permit access at this time to a lawyer or will not now appoint one for you, then you still have the right not to speak to us at any time without a lawyer present.
[17] To the extent that it is asserted that the Government presently possesses the resources to dispatch an American legal aid attorney, on an ad hoc basis, wherever and whenever a need for one arises, we find such reasoning unpersuasive. Miranda does not require such extraordinary effort by the Government. Nor may one ignore the significant delays which such a procedure might cause in a situation where timing may be critical.
[18] We leave open whether this assumption remains valid if foreign authorities cede to U.S. law enforcement primary control of the foreign-based investigation facts not present in the instant case. The relationship in such a hypothetical scenario will have shifted from mutual cooperation to one of agency.
[19] Indeed, with respect to Al-`Owhali, the Government took deft advantage of this very distinction. In exchange for Al-`Owhali's immediate revelation in Kenya of so-called "blue chip" information related to public safety, the Government agreed to provide Al-`Owhali with prosecutorial immunity as to the subject matter of that information.
It bears reiteration that the issues addressed by this Opinion relate solely to the admissibility of statements in an American court. This is not the same question as the ability of American law enforcement or intelligence officials to obtain intelligence formation from non-citizens abroad, information which may be vital to national security interests. What we find impermissible is not intelligence gathering by agents of the U.S. government empowered to do so, but rather the use in a domestic criminal trial of statements extracted in violation of the Fifth Amendment.
[20] The AOR does inform the suspect: "If you decide to speak with us now, without a lawyer present, you will still have the right to stop answering questions at any time." Also, the waiver statement in the AOR declares: "I do not want a lawyer at this time." Neither sentence, however, adds to a suspect's substantive awareness of the nature of his right to counsel during overseas interrogation by U.S. law enforcement. These sentences instead derive their significance contextually, i.e., only when read against what the rest of the AOR says, or does not say, concerning the right to counsel.
[21] Due to our resolution of the issues, we have no occasion to address whether, in an ex post attempt to cure a deficient AOR, the Government must have had concurrent knowledge i.e., at the time the AOR was actually administered that a defendant's access to counsel during overseas interrogation would have been impossible under foreign law or according to the factual circumstances.
[22] Nor is Duckworth v. Eagan, 492 U.S. 195, 109 S. Ct. 2875, 106 L. Ed. 2d 166 (1989), to the contrary. There, the Supreme Court found permissible an advice of rights that stated: "We have no way of giving you a lawyer, but one will be appointed for you, if you wish, if and when you go to court." (Id. at 198, 109 S. Ct. 2875.) Several factors render Duckworth inapposite. First, the suspect in Duckworth was still advised that he had "a right to talk to a lawyer before we ask you any questions, and to have him with you during questioning." (Id.) The existence of this right was never conditioned, as here, on geography. Second, the "if and when" construction in Duckworth accurately described the future point in time at which appointed counsel would be available in Indiana. (Id. at 204, 109 S. Ct. 2875.) In this case, however, the AOR misinformed Defendants of their current opportunity to access counsel while being interrogated in Kenya and South Africa.
The remaining cases relied upon by the Government are similarly distinguishable. In both United States v. Dopf, 434 F.2d 205 (5th Cir.1971), and Cranford v. Rodriguez, 512 F.2d 860 (10th Cir.1975), the courts seem to accept as true the blanket assertion that access to counsel was never possible under the circumstances.
[23] The Government additionally argues for some sort of good faith exception to an erroneous AOR. Whatever the merits of this theory when a particularized AOR is authored only after a detailed inquiry into a specific nation's law, it certainly has no application to the cookie-cutter AOR at issue here one that is apparently used by the FBI, without revision, in every foreign nation. (See also Oregon v. Elstad, 470 U.S. 298, 317, 105 S. Ct. 1285, 84 L. Ed. 2d 222 (1985) ("The Court in no way retreats from the bright-line rule of Miranda. We do not imply that good faith excuses a failure to administer Miranda warnings ....").)
[24] We do not consider this an express invocation of the right to counsel. (See Davis v. United States, 512 U.S. 452, 114 S. Ct. 2350, 129 L. Ed. 2d 362 (1994) (finding no request for counsel in remark: "Maybe I should talk to a lawyer").)
[25] A photograph of Al-`Owhali in his cell, taken at some point during his U.S. interrogation in Kenya, shows him smiling and striking a triumphant pose. (Gov't Ex. 9A.)
[26] Even if the relevant standard were due process, the considerations we describe herein would still lead us to find that Al-`Owhali's confession was voluntary. (See Dickerson, 530 U.S. 428, 120 S.Ct. at 2336 ("`Cases in which a defendant can make a colorable argument that a self-incriminating statement was `compelled' despite the fact that the law enforcement authorities adhered to the dictates of Miranda are rare.'") (quoting Berkemer v. McCarty, 468 U.S. 420, 104 S. Ct. 3138, 82 L. Ed. 2d 317 (1984)).)
[27] To be clear, K.K. Mohamed also made statements to South African officers in South Africa and to U.S. agents outside of South Africa. Neither were the subject of K.K. Mohamed's motion to suppress.
[28] On January 29, 2001, the Court preliminarily indicated from the bench that K.K. Mohamed's suppression motion might be denied as untimely. Our rejection, on the merits, of that motion obviates the present need to rule definitively on the timeliness issue.
[29] Article 36 of the Vienna Convention on Consular Relations, April 24, 1963, 21 U.S.T. 77, requires:
1. With a view to facilitating the exercise of consular functions relating to nationals of the sending State:
...
(b) if he so requests, the competent authorities of the receiving State shall, without delay, inform the consular post of the sending State if, within its consular district, a national of that State is arrested or committed to prison or to custody pending trial or is detained in any other manner. Any communication addressed to the consular post by the person arrested, in prison, custody or detention shall also be forwarded by the said authorities without delay. The said authorities shall inform the person concerned without delay of his rights under this sub-paragraph.
[30] In its decision in Breard v. Greene, 523 U.S. 371, 118 S. Ct. 1352, 140 L. Ed. 2d 529 (1998), the Supreme Court explicitly left this question open, explaining that the Vienna Convention "arguably confers on an individual the right to consular assistance following arrest." (Id. at 376, 118 S. Ct. 1352.) Many courts since Breard have likewise avoided "wad[ing] into the morass" by proceeding on the assumption that a private right of action in fact exists. (United States v. Salameh, 54 F. Supp. 2d 236, 279 (S.D.N.Y.1999); see also United States v. Page, 232 F.3d 536, 540 (6th Cir.2000), petition for cert. filed, (U.S. Jan. 3, 2001) (No. 00-7751); United States v. Lawal, 231 F.3d 1045, 1047-48 (7th Cir.2000), petition for cert. filed, (U.S. Jan. 22, 2001) (No. 00-8105); United States v. Carrillo, 70 F. Supp. 2d 854, 859 (N.D.Ill.1999); United States v. Kevin, 1999 WL 194749, *3 (S.D.N.Y.1999). But see United States v. Rodrigues, 68 F. Supp. 2d 178, 182 (E.D.N.Y.1999) (citing cases for the proposition that Article 36 does create standing).)
[31] The Court assumes the application of the Vienna Convention in this unusual circumstance where the defendant was in Kenyan and not American custody without deciding the question of whether a defendant who is interrogated by American officials while in the custody of a foreign government can assert that the Americans violated the Convention. The language of section 1(b) suggests that the obligation to inform a detainee's consulate lies with officials of the state in whose custody the foreign national is kept. Because the Court does not need to answer this question to resolve Al-`Owhali's motion, the question is reserved for another day.
[32] In an opinion issued January 2, 2001, the Court denied a similar motion by Defendant K.K. Mohamed who asserted that the Government's failure to advise him of his rights under the Vienna Convention required dismissal of the Government's death penalty notice. (United States v. Bin Laden, 126 F. Supp. 2d 290, 295-96 (S.D.N.Y.2001).)
[33] For reasons which have not been presented to the Court, the Yemeni embassy declined to send a representative.
[34] In his letter to the Court of January 12, 2001, counsel for Al-`Owhali additionally objects to the identification procedure as violative of Kenyan law. The basis for this contention is unclear and has not been briefed in any of the papers submitted to the Court. Indeed, we have not even been apprised of how Kenyan law was supposedly violated. We find that there is no basis for relief on this contention.
[35] The stains are not apparent in the photographs of the identification parade, but that may be a consequence of the quality of the photographs. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2238639/ | 98 N.Y.2d 70 (2002)
772 N.E.2d 1133
745 N.Y.S.2d 775
THE PEOPLE OF THE STATE OF NEW YORK, Appellant,
v.
RAMON ROCHE, Respondent.
Court of Appeals of the State of New York.
Argued May 2, 2002.
Decided June 4, 2002.
*71 Robert M. Morgenthau, District Attorney, New York City (Sheryl Feldman and Mark Dwyer of counsel), for appellant.
Office of the Appellate Defender, New York City (Eunice C. Lee, Richard M. Greenberg and Daniel A. Warshawsky of counsel), for respondent.
Salans Hertzfeld Heilbronn Christy & Viener, New York City *72 (Jane E. Manning and Maria T. Galeno of counsel), for Sanctuary for Families' Center for Battered Women's Legal Services and another, amici curiae.
Chief Judge KAYE and Judges SMITH, LEVINE, CIPARICK, WESLEY and ROSENBLATT concur.
OPINION OF THE COURT
GRAFFEO, J.
In this prosecution stemming from the brutal stabbing by defendant of his common-law wife, the Appellate Division reversed defendant's conviction of murder in the second degree based on the trial court's failure to charge the jury concerning the affirmative defense of extreme emotional disturbance. Because the evidence at trial was insufficient to support the defense of extreme emotional disturbance, we reverse the Appellate Division order and reinstate defendant's conviction.
Defendant was charged with murder in the second degree based on the December 1991 stabbing death of Lillian Rivera in the Manhattan apartment they shared. He was convicted of murder in the second degree at his first trial, at which he neither requested nor received an extreme emotional disturbance charge. The conviction was reversed on appeal due to an improper Allen charge and the case was remitted for retrial (see 239 AD2d 270).
At the second trial, the People offered proof that the victim was stabbed 12 to 14 times in the face, back and chest. She was discovered lying face up on the kitchen floor of the blood-spattered apartment. A trail of blood on the furniture, walls and floors throughout the living room, hallway and kitchen suggested a violent struggle. Forensic evidence indicated the two deep, and ultimately fatal, stab wounds to the victim's chest had been inflicted last, after she had collapsed on the kitchen floor. The murder weapon was never found.
Gilberto Franco and Norma Ruiz, tenants in the apartment building who were acquainted with defendant and the victim, testified at trial that they had seen the couple arguing in the building lobby earlier that day. Franco recounted that in a conversation he had with defendant two weeks before the stabbing, *73 defendant confided that his wife was crazy and hooked on drugs, that he was tired and wanted to leave but that he couldn't live at his sister's house. At around 4:00 P.M. on the day of the crime, while in his bedroom, Franco heard defendant and the victim engaged in a loud argument inside their apartment, which was connected to his by an airshaft. When Franco heard the sound of glass breaking, he stopped listening and turned on some music.
About 40 or 50 minutes later, Franco and Ruiz heard defendant yelling in the hallway outside their apartment. They opened their door and saw defendant running down the stairs, exclaiming that his wife had killed herself and that someone should call the police. Defendant was carrying a small brown bag under his arm. After Franco contacted the police from a nearby store, he and a friend went to defendant's apartment. Franco testified that he did not enter the apartment but pushed the door open wide enough to view the interior from the hallway. The apartment was in disarray and there was blood smeared on the walls. Franco saw defendant emerge carrying a duffle bag. When asked where he was going, defendant replied: "I have to take everything out of here because the police is going to check it out." Defendant stated that he was taking the bag to his sister's house but would return to talk to the police. He then left the building with the duffle bag.
According to the testimony of Phillip Bell, defendant soon arrived at an apartment in the adjacent building. Bell had no prior acquaintance with defendant but was visiting the tenant. When defendant first arrived, he removed two sweaters that he was wearing and carefully inspected them. He then ingested crack and heroin. Defendant told Bell that "Mama" was dead and he had killed her. He explained that she had been "going crazy" and "tearing up the place" and that he had been "going back and forth upstairs [and] checking on her" all day. After socializing with Bell in a back room for a while, defendant indicated that he had to leave but did not want to be seen by another visitor who had since arrived. Defendant instructed Bell to usher the guest into the bathroom and, once this was accomplished, he departed.
Defendant went to his sister's apartment where he was greeted by Pedro Malave, her son-in-law. Defendant told Malave that his wife was dead and that she had tried to kill herself two days before. Defendant changed his socks after requesting a clean pair and threw the pair he had been wearing in the garbage. When defendant's sister arrived, he had a private *74 conversation with her in which he revealed that, in the course of an argument, he had hit his wife and believed that she was dead. She advised him to go to the police.
Thereafter, defendant appeared at the police station and announced: "My wife killed herself. I want to find out who did this. That's why I'm here." Defendant was issued Miranda warnings and he agreed to make a written statement, which the People introduced in evidence at trial. Defendant told the police that his wife had been out the night before and had not come home until 6:00 A.M. She had slept most of the morning but then sent him on a series of errands that afternoon, first requesting that he retrieve some items she had thrown out of the window, then asking him to purchase pain reliever, and later sending him to buy cigarettes. Defendant indicated he had complied with these requests.
Defendant further recounted that at around 4:00 P.M. he left the apartment to buy his wife some soup and talked to a neighbor for a while. Upon returning home, he alleged the door was open and there was blood in the living room. He called out to his wife but did not see her until he found her body in the kitchen. He then stated that he ran through the apartment building screaming that "Mama killed herself." He asked a woman to call the police and then ran down the street to his aunt's apartment. When his aunt did not answer the door, he proceeded to his sister's home. He stated that he spoke with Malave and his sister, but indicated only that he told them "what had happened" at his house. After briefly returning to his aunt's residence, he contended he went to the police. The statement does not contain any reference to a visit with Bell.
Defendant did not testify at trial and presented one witness in his defense, a forensic pathologist, who opined that the wounds the victim suffered were consistent with an attack by a stranger because there was no mutilation or disfigurement. The thrust of the defense was that the police had the "wrong man" and had rushed to judgment in charging defendant with the crime without searching for the true killer. The defense emphasized the absence of physical evidence linking defendant to the stabbing, his lack of a motive to kill his wife and the failure of the police to conduct various tests which the defense contended might have revealed the identity of the actual perpetrator.
At a charge conference conducted prior to the summations, defendant requested that the lesser included offense of extreme *75 emotional disturbance manslaughter be submitted to the jury, but made no reference to a charge on the affirmative defense of extreme emotional disturbance. Defense counsel stated that a manslaughter charge "may not in fact be supported by the evidence objectively" but indicated the request was based on "what we anticipate the Prosecution's closing argument to encompass" given that the People had apparently argued at the first trial that defendant committed the murder after being provoked into a fit of rage. The People objected to the manslaughter charge, asserting there was no evidence of extreme emotional disturbance. Supreme Court denied the charge-down request. The jury convicted defendant of murder in the second degree and he was sentenced to 25 years to life in prison.
The Appellate Division reversed, concluding Supreme Court erred in failing to charge extreme emotional disturbance as an affirmative defense. One Justice dissented and granted the People leave to appeal to this Court.
The affirmative defense of extreme emotional disturbance is addressed in Penal Law § 125.25 (1) (a) and § 125.20 (2), which define the elements of murder in the second degree and manslaughter in the first degree. Read in tandem, these statutes provide that a defendant who proves by a preponderance of the evidence that he or she committed a homicide while "under the influence of extreme emotional disturbance for which there was a reasonable explanation or excuse" is guilty of manslaughter and not murder. The "defense allows a defendant charged with the commission of acts which would otherwise constitute murder to demonstrate the existence of mitigating factors which indicate that, although [] not free from responsibility for [the] crime, [defendant] ought to be punished less severely" (People v Casassa, 49 NY2d 668, 675, cert denied 449 U.S. 842 [1980]). As we recently observed in People v Harris (95 NY2d 316, 318 [2000] [quoting Casassa, 49 NY2d at 680-681] [internal quotations omitted]), the Legislature recognized when it created the extreme emotional disturbance defense that some homicides are worthy of mitigation because they "result from an understandable human response deserving of mercy."
A defendant cannot establish an extreme emotional disturbance defense without evidence that he or she suffered from a mental infirmity not rising to the level of insanity at the time of the homicide, typically manifested by a loss of self-control. And not all mental infirmities merit a manslaughter charge based on extreme emotional disturbance (Casassa, 49 NY2d at 677). To prove such an affirmative defense, a defendant must *76 demonstrate, first, that he or she acted under the influence of an extreme emotional disturbance and, second, that there was a reasonable explanation or excuse for that disturbance. The first, subjective element is met if there is evidence that defendant's conduct at the time of the incident was actually influenced by an extreme emotional disturbance. The second is an objective element and requires proof that defendant's emotional disturbance was supported by a reasonable explanation or excuse. This is "determined by viewing the subjective mental condition of the defendant and the external circumstances as the defendant perceived them to be at the time, however inaccurate that perception may have been, and assessing from that standpoint whether the explanation or excuse for [the] emotional disturbance was reasonable" (Harris, 95 NY2d at 319 [quoting Casassa, 49 NY2d at 679] [internal quotations omitted]).
A defendant who pursues an inconsistent defense at trial, such as outright denial of involvement in the crime, may nevertheless be entitled to a manslaughter charge based on extreme emotional disturbance (see People v White, 79 NY2d 900, 903 [1992]). And it is possible for a defendant to establish the presence of such a disturbance without psychiatric testimony (People v Moye, 66 NY2d 887, 890 [1985]). These circumstances do, however, impact whether sufficient evidence to support the defense has been presented at trial (see White, 79 NY2d at 903). In the absence of the requisite proof, an extreme emotional disturbance charge should not be given because it would invite the jury to engage in impermissible speculation concerning defendant's state of mind at the time of the homicide (People v Walker, 64 NY2d 741, 743 [1984]).
Applying these principles to this case, we conclude that defendant was not entitled to a manslaughter charge-down based on extreme emotional disturbance because the proof was insufficient to support either element of the defense.[*] Beginning with the subjective element, the record is devoid of evidence that he actually suffered from a mental infirmity at the time of *77 the stabbing. Defendant cannot rely on his statements to the police to establish the presence of an extreme emotional disturbance since he asserted that he had not harmed his wife in any respect. Evidence of mental infirmity is not discernible from defendant's remarks to Bell and his sister because he neither claimed that he suffered a loss of self-control nor used any other language suggesting that he killed the victim while under the influence of a mental disability. Similarly, defendant's behavior prior to and immediately after the crime was not indicative of extreme emotional disturbance. Soon after the killing, defendant contrived a false explanation for the victim's wounds, telling his neighbors that she had committed suicide. Moments later, defendant had the presence of mind to gather items in a duffle bag and remove them from the apartment so they would not be discovered by the policeconduct inconsistent with the loss of self-control associated with the defense. Bell's testimony regarding defendant's conversations and drug consumption, particularly his attempt to evade detection by another guest at the apartment, also do not indicate a disturbed state of mind.
This case is similar to People v White (79 NY2d 900) which also involved a defendant who killed his wife in the apartment they shared. Like this defendant, White claimed that he had no involvement in the incident but had discovered his wife dead in their apartment. As in this case, no psychiatric evidence was proffered to support an extreme emotional disturbance defense, nor did defendant tell the police or any other witness that he had experienced a loss of self-control or other mental disturbance which caused him to stab his wife. There we held that defendant was not entitled to the charge-down, observing that the record was barren of any statement of defendant or other evidence offered by any witness which suggested defendant actually suffered from an extreme emotional disturbance at the time of the homicide.
Defendant contends that the brutal nature of the stabbing constituted evidence that he acted under the influence of a mental infirmity. While proof concerning the nature of the wounds defendant inflicted is relevant (see generally, People v Wood, 79 NY2d 958 [1992]), we have never held that a jury may infer the presence of an extreme emotional disturbance based solely on proof that the crime was especially violent or brutal. This is so because violence and brutality are not necessarily indicative of a loss of self-control or similar mental infirmity, nor is brutality generally more deserving of mercy. Where *78 we have referenced the nature or severity of the wounds, the probative value of such evidence has been linked to other compelling evidence of extreme emotional disturbance. For example, we observed in People v Moye (66 NY2d at 890) that "[d]efendant's savage acts of mutilating and decapitating his victim, coupled with his statements to the police and District Attorney that `something snapped' inside him when [the victim] mocked and taunted him, that he went `bananas' and he needed help, were evidence of a loss of self-control." The approach defendant suggests would subvert the purpose of the affirmative defense by automatically providing the benefit of a manslaughter charge-down to every defendant who commits a particularly brutal or violent homicidea result the Legislature certainly did not intend.
Even if sufficient evidence of the subjective element of extreme emotional disturbance were present in this case, proof of the objective element is lacking. Defendant points to the fact that he and the victim had been seen arguing and that the victim apparently sent him on a number of errands on the afternoon of the murder, causing him to climb the stairs to the fifth-floor apartment numerous times. This falls far short of the type of tumultuous relationship that might meet the objective component when coupled with other provocation (see White, 79 NY2d at 903). In the absence of proof that defendant's history or mental status rendered him unusually sensitive to these verbal exchanges and demands, no reasonable jury could have concluded that a resulting loss of self-control or similar disability constituted "an understandable human response deserving of mercy" under these circumstances (see Casassa, 49 NY2d at 680-681).
Finally, we note that the People's closing argument does not provide an evidentiary basis for an extreme emotional disturbance charge. As cogently stated by the dissenting Justice at the Appellate Division, statements in a summation are not evidence and may not supply proof supporting a charge request. Although certain words and phrases used by the prosecutor may be suggestive of extreme emotional disturbance, when viewed in context it is evident the remarks were consistent with the People's theory of intentional murder. The clear import of the summation was that defendant's actions were motivated by intense angernot that they resulted from a loss of self-control or other mental infirmity.
We have considered defendant's contentions relating to this Court's jurisdiction over this appeal and find them to be without merit.
*79 Accordingly, the order of the Appellate Division should be reversed and the conviction reinstated.
Order reversed and judgment of Supreme Court, New York County, reinstated.
NOTES
[*] Defendant did not characterize his request for the manslaughter charge-down as seeking a charge on the affirmative defense of extreme emotional disturbance. However, due to the interplay between Penal Law § 125.20 (2) and § 125.25 (1) (a), a request for an extreme emotional disturbance manslaughter charge amounts to a request that the jury be instructed concerning the affirmative defense of extreme emotional disturbance. Given the People's comments in opposition to the defendant's request and Supreme Court's stated rationale in denying the charge, the issue is preserved as a question of law for this Court's review (see CPL 470.05 [2]). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2244661/ | 36 Cal. App. 4th 376 (1995)
42 Cal. Rptr. 2d 286
KGM HARVESTING COMPANY, Plaintiff, Cross-defendant and Appellant,
v.
FRESH NETWORK, Defendant, Cross-complainant and Appellant.
Docket No. H011702.
Court of Appeals of California, Sixth District.
June 30, 1995.
*378 COUNSEL
Russell J. Hanlon, Berliner Cohen, Cominos & Biegel, Lawrence E. Biegel and Vicki Schermer-Kleinkopf for Plaintiff, Cross-defendant and Appellant. *379 Fenton & Keller and Charles R. Keller for Defendant, Cross-complainant and Appellant.
OPINION
COTTLE, P.J.
California lettuce grower and distributor KGM Harvesting Company (hereafter seller) had a contract to deliver 14 loads of lettuce each week to Ohio lettuce broker Fresh Network (hereafter buyer). When the price of lettuce rose dramatically in May and June 1991, seller refused to deliver the required quantity of lettuce to buyer. Buyer then purchased lettuce on the open market in order to fulfill its contractual obligations to third parties. After a trial, the jury awarded buyer damages in an amount equal to the difference between the contract price and the price buyer was forced to pay for substitute lettuce on the open market. On appeal, seller argues that the damage award is excessive. We disagree and shall affirm the judgment. In a cross-appeal, buyer argues it was entitled to prejudgment interest from August 1, 1991, as its damages were readily ascertainable from that date. We agree and reverse the trial court's order awarding prejudgment interest from 30 days prior to trial.
FACTS
In July 1989 buyer and seller entered into an agreement for the sale and purchase of lettuce. Over the years, the terms of the agreement were modified. By May 1991 the terms were that seller would sell to buyer 14 loads of lettuce each week and that buyer would pay seller 9 cents a pound for the lettuce. (A load of lettuce consists of 40 bins, each of which weighs 1,000 to 1,200 pounds. Assuming an average bin weight of 1,100 pounds, 1 load would equal 44,000 pounds, and the 14 loads called for in the contract would weigh 616,000 pounds. At 9 cents per pound, the cost would approximate $55,440 per week.)
Buyer sold all of the lettuce it received from seller to a lettuce broker named Castellini Company who in turn sold it to Club Chef, a company that chops and shreds lettuce for the fast food industry (specifically, Burger King, Taco Bell, and Pizza Hut). Castellini Company bought lettuce from buyer on a "cost plus" basis, meaning it would pay buyer its actual cost plus a small commission. Club Chef, in turn, bought lettuce from Castellini Company on a cost plus basis.
Seller had numerous lettuce customers other than buyer, including seller's subsidiaries Coronet East and West. Coronet East supplied all the lettuce for the McDonald's fast food chain.
*380 In May and June 1991, when the price of lettuce went up dramatically, seller refused to supply buyer with lettuce at the contract price of 9 cents per pound. Instead, it sold the lettuce to others at a profit of between $800,000 and $1.1 million. Buyer, angry at seller's breach, refused to pay seller for lettuce it had already received. Buyer then went out on the open market and purchased lettuce to satisfy its obligations to Castellini Company. Castellini covered all of buyer's extra expense except for $70,000. Castellini in turn passed on its extra costs to Club Chef which passed on at least part of its additional costs to its fast food customers.
In July 1991 buyer and seller each filed complaints under the Perishable Agricultural Commodities Act (PACA). Seller sought the balance due on its outstanding invoices ($233,000), while buyer sought damages for the difference between what it was forced to spend to buy replacement lettuce and the contract price of nine cents a pound (approximately $700,000).
Subsequently, seller filed suit for the balance due on its invoices, and buyer cross-complained for the additional cost it incurred to obtain substitute lettuce after seller's breach. At trial, the parties stipulated that seller was entitled to a directed verdict on its complaint for $233,000, the amount owing on the invoices. Accordingly, only the cross-complaint went to the jury, whose task was to determine whether buyer was entitled to damages from seller for the cost of obtaining substitute lettuce and, if so, in what amount. The jury determined that seller breached the contract, that its performance was not excused, and that buyer was entitled to $655,960.22, which represented the difference between the contract price of nine cents a pound and what it cost buyer to cover by purchasing lettuce in substitution in May and June 1991. It also determined that such an award would not result in a windfall to buyer and that buyer was obligated to the Castellini Company for the additional costs. The court subtracted from buyer's award of $655,960.22 the $233,000 buyer owed to seller on its invoices, leaving a net award in favor of buyer in the amount of $422,960.22. The court also awarded buyer prejudgment interest commencing 30 days before trial.
DISCUSSION
A. Seller's Appeal
Section 2711 of the California Uniform Commercial Code[1] provides a buyer with several alternative remedies for a seller's breach of contract. The *381 buyer can "`cover' by making in good faith and without unreasonable delay any reasonable purchase of ... goods in substitution for those due from the seller." (§ 2712, subd. (1).) In that case, the buyer "may recover from the seller as damages the difference between the cost of cover and the contract price...." (§ 2712, subd. (2).) If the buyer is unable to cover or chooses not to cover, the measure of damages is the difference between the market price and the contract price. (§ 2713.) Under either alternative, the buyer may also recover incidental and consequential damages. (§§ 2711, 2715.) In addition, in certain cases the buyer may secure specific performance or replevin "where the goods are unique" (§ 2716) or may recover goods identified to a contract (§ 2502).
In the instant case, buyer "covered" as defined in section 2712 in order to fulfill its own contractual obligations to the Castellini Company. Accordingly, it was awarded the damages called for in cover cases the difference between the contract price and the cover price. (§ 2712.)
In appeals from judgments rendered pursuant to section 2712, the dispute typically centers on whether the buyer acted in "good faith," whether the "goods in substitution" differed substantially from the contracted for goods, whether the buyer unreasonably delayed in purchasing substitute goods in the mistaken belief that the price would go down, or whether the buyer paid too much for the substitute goods. (See generally, 1 White & Summers, Uniform Commercial Code (3d ed. 1988) Buyer's Remedies, Cover, § 6-3, pp. 284-292 [hereafter White & Summers], and cases cited therein.)
In this case, however, none of these typical issues is in dispute. Seller does not contend that buyer paid too much for the substitute lettuce or that buyer was guilty of "unreasonable delay" or a lack of "good faith" in its attempt to obtain substitute lettuce. Nor does seller contend that the lettuce purchased was of a higher quality or grade and therefore not a reasonable substitute.
(1a) Instead, seller takes issue with section 2712 itself, contending that despite the unequivocal language of section 2712, a buyer who covers *382 should not necessarily recover the difference between the cover price and the contract price. Seller points out that because of buyer's "cost plus" contract with Castellini Company, buyer was eventually able to pass on the extra expenses (except for $70,000) occasioned by seller's breach and buyer's consequent purchase of substitute lettuce on the open market. It urges this court under these circumstances not to allow buyer to obtain a "windfall."[2]
(2) The basic premise of contract law is to effectuate the expectations of the parties to the agreement, to give them the "benefit of the bargain" they struck when they entered into the agreement. In its basic premise, contract law therefore differs significantly from tort law. As the California Supreme Court explained in Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654 [254 Cal. Rptr. 211, 765 P.2d 373], "... contract actions are created to enforce the intentions of the parties to the agreement [while] tort law is primarily designed to vindicate `social policy.'" (Id. at p. 683, citing Prosser, Law of Torts (4th ed. 1971) p. 613.)
(3) "`The basic object of damages is compensation, and in the law of contracts the theory is that the party injured by breach should receive as nearly as possible the equivalent of the benefits of performance. [Citations.]'" (Lisec v. United Airlines, Inc. (1992) 10 Cal. App. 4th 1500, 1503 [11 Cal. Rptr. 2d 689].) A compensation system that gives the aggrieved party the benefit of the bargain, and no more, furthers the goal of "predictability about the cost of contractual relationships ... in our commercial system." (Foley v. Interactive Data Corp., supra, 47 Cal.3d at p. 683; Putz & Klippen, Commercial Bad Faith: Attorney Fees Not Tort Liability Is the Remedy for "Stonewalling" (1987) 21 U.S.F.L.Rev. 419, 432.)
(1b) With these rules in mind, we examine the contract at issue in this case to ascertain the reasonable expectations of the parties. The contract recited that its purpose was "to supply [buyer] with a consistent quality raw product at a fair price to [seller], which also allows [buyer] profitability for his finished product." Seller promised to supply the designated quantity even if the price of lettuce went up ("We agree to supply said product and amount at stated price regardless of the market price or conditions") and buyer promised to purchase the designated quantity even if the price went down *383 ("[Buyer] agrees to purchase said product and amounts at stated price regardless of the market price or conditions, provided quality requirements are met"). The possibility that the price of lettuce would fluctuate was consequently foreseeable to both parties.
Although the contract does not recite this fact, seller was aware of buyer's contract with the Castellini Company and with the Castellini Company's contract with Club Chef. This knowledge was admitted at trial and can be inferred from the fact that seller shipped the contracted for 14 loads of lettuce directly to Club Chef each week. Thus, seller was well aware that if it failed to provide buyer with the required 14 loads of lettuce, buyer would have to obtain replacement lettuce elsewhere or would itself be in breach of contract. This was within the contemplation of the parties when they entered into their agreement.
As noted earlier, the object of contract damages is to give the aggrieved party "`as nearly as possible the equivalent of the benefits of performance.'" (Lisec v. United Airlines, Inc., supra, 10 Cal. App.4th at p. 1503; see also § 1106 ["The remedies provided by this code shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed...."].) In the instant case, buyer contracted for 14 loads of lettuce each week at 9 cents per pound. When seller breached its contract to provide that lettuce, buyer went out on the open market and purchased substitute lettuce to fulfill its contractual obligations to third parties. However, purchasing replacement lettuce to continue its business did not place buyer "in as good a position as if the other party had fully performed." This was because buyer paid more than 9 cents per pound for the replacement lettuce. Only by reimbursing buyer for the additional costs above 9 cents a pound could buyer truly receive the benefit of the bargain. This is the measure of damages set forth in section 2712.
As White and Summers point out, "Since 2-712 measures buyer's damages by the difference between his actual cover purchase and the contract price, the formula will often put buyer in the identical economic position that performance would have." (White & Summers, supra, Buyer's Remedies, Cover, § 6-3, p. 285.) Therefore, "[i]n the typical case a timely `cover' purchase by an aggrieved buyer will preclude any 2-715 [incidental and consequential] damages." (Ibid.) "Not only does the damage formula in 2-712 come close to putting the aggrieved buyer in the same economic position as actual performance would have," White and Summers conclude, "but it also enables him to achieve his prime objective, namely that of acquiring his needed goods." (Id. at p. 292.)
*384 In this case, the damage formula of section 2712 put buyer in the identical position performance would have: it gave buyer the contracted for 14 loads of lettuce with which to carry on its business at the contracted for price of 9 cents per pound.
Despite the obvious applicability and appropriateness of section 2712, seller argues in this appeal that the contract-cover differential of section 2712 is inappropriate in cases, as here, where the aggrieved buyer is ultimately able to pass on its additional costs to other parties. Seller contends that section 1106's remedial injunction to put the aggrieved party "in as good a position as if the other party had fully performed" demands that all subsequent events impacting on buyer's ultimate profit or loss be taken into consideration (specifically, that buyer passed on all but $70,000 of its loss to Castellini Company, which passed on all of its loss to Club Chef, which passed on most of its loss to its fast food customers).[3] For this proposition, seller relies on two cases limiting a buyer's damages under a different provision of the Commercial Code, section 2713 (Allied Canners & Packers, Inc. v. Victor Packing Co. (1984) 162 Cal. App. 3d 905 [209 Cal. Rptr. 60]; H-W-H Cattle Co., Inc. v. Schroeder (8th Cir.1985) 767 F.2d 437), and on one section 2712 cover case in which damages were apparently limited (Sun-Maid Raisin Growers v. Victor Packing Co. (1983) 146 Cal. App. 3d 787 [194 Cal. Rptr. 612]).
We begin with the cover case. In Sun-Maid Raisin Growers v. Victor Packing Co., supra, 146 Cal. App. 3d 787, the seller (Victor) repudiated a contract to sell 610 tons of raisins to Sun-Maid after "disastrous" rains damaged the raisin crop and the price of raisins nearly doubled. Sun-Maid attempted to cover but was only partially successful. It was able to obtain only 200 tons of comparable raisins. For the remaining 410 tons, it had to purchase inferior raisins that had to be reconditioned at a substantial cost. Apparently, the total cost of purchasing the 200 tons of high quality raisins and of purchasing and reconditioning the remaining 410 tons was $377,720 over the contract price.
The trial court awarded Sun-Maid, as consequential damages under section 2715, $295,339.40 for its lost profits. Victor appealed, arguing that the amount of lost profits was unforeseeable by either party when the contracts were formed. The Court of Appeal affirmed, noting that the evidence established that Victor knew Sun-Maid was purchasing the raisins for resale.
*385 In its discussion, the court recounted the various measures of damages available to an aggrieved buyer under the Uniform Commercial Code for a seller's nondelivery of goods or repudiation of contract, citing sections 2712, 2713, 2715 and 2723. The court seemed to wonder why the trial court had chosen lost profits rather than the cost of cover as damages, noting that the court did not specify why it had determined damages in that manner and that neither party had requested findings. However, as neither Sun-Maid nor Victor was contesting that measure of damages on appeal (the only issue was whether lost profits were foreseeable consequential damages), the court observed that the trial court "probably found that damages should be limited to the amount that would have put Sun-Maid in `as good a position as if the other party had fully performed.' (§ 1106.)" (146 Cal. App.3d at p. 792.)
From this simple observation, seller claims that "[i]n cases, like the instant case, involving forward contracts, California courts hold that section 1106 limits the damages to be awarded under section 2712 (i.e., the cover damages statute) and section 2713 (i.e., the market damages statute) for the very reason that the non-breaching party is entitled to nothing more than to be placed in the position which would result from the breaching party's full performance of the agreement. See Sun-Maid Raisin Growers v. Victor Packing Co. (1983) 146 Cal. App. 3d 787, 792 [] (cover case); Allied Canners & Packers, Inc. v. Victor Packing Co. (1984) 162 Cal. App. 3d 905, 915 [] (non-cover case)." (Italics added.)
In fact, the Sun-Maid court held no such thing. It simply offered one possible explanation for the trial court's award, which no one was contesting. Under the facts of that case, the cost of cover might have been unduly difficult to calculate. Sun-Maid was able to purchase only 200 tons of comparable raisins in a timely manner. There were no other Thompson seedless free tonnage raisins available within a reasonable time after seller's breach (August 1976). It was considerably later before buyer could find another 410 tons to purchase, and those raisins were damaged in part because of rains occurring after the breach, in September 1976.[4] Under these circumstances, the trial court and the parties may simply have chosen to focus on the easily calculable consequential damages (which buyer claimed were foreseeable and seller denied were foreseeable) and to ignore the difficult-to-calculate cover damages.
*386 We now look to the "non-cover" case relied upon by seller, Allied Canners & Packers, Inc. v. Victor Packing Co., supra, 162 Cal. App.3d at page 915, which in fact does hold that section 1106 acts as a limitation on the amount of damages otherwise recoverable under section 2713. Before discussing the Allied Canners case, however, a few observations on the differences between the contract-cover differential of section 2712 and the contract-market differential of section 2713 are called for.
As noted earlier, section 2712 "will often put buyer in the identical economic position that performance would have." (White & Summers, supra, Buyer's Remedies, Cover, § 6-3, p. 285.) In contrast, the contract-market differential of section 2713 "bears no necessary relation to the change in the buyer's economic status that the breach causes. It is possible that this differential might yield the buyer a handsome sum even though the breach actually saved him money in the long run (as for example when a middleman buyer's resale markets dry up after the breach). It is also quite possible that the buyer's lost profit from resale or consumption would be greater than the contract-market difference." (Id., § 6-4, at p. 294.)
White and Summers argue that the drafters of section 2713 could not have intended to put the buyer in the same position as performance since "[p]erformance would have given the buyer certain goods for consumption or resale" (White & Summers, supra, Buyer's Remedies, Cover, § 6-4, at p. 294) which would have resulted in "either a net economic gain for the buyer or a net economic loss." (Ibid.) The best explanation of section 2713, they suggest, is that it is a "statutory liquidated damage clause, a breach inhibitor the payout of which need bear no close relation to the plaintiff's actual loss." (White & Summers, supra, at p. 295; accord, Peters, Remedies for Breach of Contracts Relating to the Sale of Goods Under the Uniform Commercial Code: A Roadmap for Article Two (1963) 73 Yale L.J. 199, 259.) In discussing the "problem of a buyer who has covered but who seeks to ignore 2-712 and sue for a larger contract-market differential under 2-713," the authors suggest: "If the Code's goal is to put the buyer in the same position as though there had been no breach, and if 2-712 will accomplish that goal but 2-713 will do so only by coincidence, why not force the covering buyer to use 2-712?" (White & Summers, supra, at p. 304.) Professor Robert Childres has actually called for the repeal of section 2713 and the requirement of compulsory cover. (Childres, Buyer's Remedies: The Danger of Section 2-713 (1978) 72 Nw. U.L.Rev. 837.)
With these prefatory comments in mind, we look to the Allied Canners case. In Allied Canners, the same raisin supplier (Victor Packing Company) involved in the Sun-Maid case breached another contract to sell raisins in *387 1976. The buyer, Allied Canners, had contracts to resell the raisins it bought from Victor to two Japanese companies for its cost plus 4 percent. Such a resale would have resulted in a profit of $4,462.50 to Allied. When Victor breached the contract, Allied sued for the difference between the market price and the contract price as authorized by section 2713. As the market price of raisins had soared due to the disastrous 1976 rains, the market-contract price formula would have yielded damages of approximately $150,000. Allied did not purchase substitute raisins and did not make any deliveries under its resale contracts to the Japanese buyers. One of the Japanese buyers simply released Allied from its contract because of the general unavailability of raisins. The other buyer did not release Allied, but it did not sue Allied either. By the time Allied's case against Victor went to trial, the statute of limitations on the Japanese buyer's claim had run.
Under these circumstances, the court held that the policy of section 1106 (that the aggrieved party be put in as good a position as if the other party had performed) required that the award of damages to Allied be limited to its actual loss. It noted that for this limitation to apply, three conditions must be met: (1) "the seller knew that the buyer had a resale contract"; (2) "the buyer has not been able to show that it will be liable in damages to the buyer on its forward contract";[5] and (3) "there has been no finding of bad faith on the part of the seller...." (Allied Canners & Packers, Inc. v. Victor Packing Co., supra, 162 Cal. App.3d at p. 915.)[6]
The result in Allied Canners seems to have derived in large part from the court's finding that Victor had not acted in bad faith in breaching the contract. The court noted, "It does appear clear, however, that, as the trial court found, the rains caused a severe problem, and Victor made substantial efforts [to procure the raisins for Allied]. We do not deem this record one to support an inference that windfall damages must be awarded the buyer to prevent unjust enrichment to a deliberately breaching seller. (Compare Sun-Maid Raisin Growers v. Victor Packing Co., supra, 146 Cal. App. 3d 787 [where, in a case coincidentally involving Victor, Victor was expressly found by the trial court to have engaged in bad faith by gambling on the *388 market price of raisins in deciding whether to perform its contracts to sell raisins to Sun Maid].)" (162 Cal. App.3d at p. 916.)[7]
We believe that this focus on the good or bad faith of the breaching party is inappropriate in a commercial sales case. As our California Supreme Court recently explained, courts should not differentiate between good and bad motives for breaching a contract in assessing the measure of the nonbreaching party's damages. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal. 4th 503, 513-515 [28 Cal. Rptr. 2d 475, 869 P.2d 454].) Such a focus is inconsistent with the policy "to encourage contractual relations and commercial activity by enabling parties to estimate in advance the financial risks of their enterprise." (Id. at p. 515.) "`Courts traditionally have awarded damages for breach of contract to compensate the aggrieved party rather than to punish the breaching party.' [Citations.]" (Foley v. Interactive Data Corp., supra, 47 Cal.3d at p. 683.)
The Allied Canners opinion has been sharply criticized in numerous law review articles and in at least one sister-state opinion. In Tongish v. Thomas (1992) 251 Kan. 840 [840 P.2d 471], the Kansas Supreme Court rejected the Allied Canners approach and instead applied the "majority view [which] would award market damages even though in excess of plaintiff's loss." (Id. at p. 475.) Relying on an article by Professors Simon and Novack, Limiting the Buyer's Market Damages to Lost Profits: A Challenge to the Enforceability of Market Contracts (1979) 92 Harv. L.Rev. 1395, the Tongish court explained that use of the market price/contract price damage scheme of section 2713 "`encourages a more efficient market and discourages the breach of contracts.'" (Tongish v. Thomas, supra, 840 P.2d at p. 476.)
Similarly, in Schneider, UCC Section 2-713: A Defense of Buyers' Expectancy Damages (1986) 22 Cal. Western L.Rev. 233, 264, the author states that "[b]y limiting buyer to lost resale profits, the [Allied Canners] court ignored *389 the clear language of section 2-713's compensation scheme to award expectation damages in accordance with the parties' allocation of risk as measured by the difference between contract price and market price on the date set for performance. If the court wanted to avoid giving greater damages, it would have been better for it to view what occurred to the availability and price of raisins as being beyond the risks contemplated by the parties and thus to have ruled under the doctrine of commercial impracticability as provided in section 2-615(a)."
In addition numerous New York courts have chosen not to limit a buyer's damages to actual losses. (See, e.g., Fertico Belgium v. Phosphate Chem. Export (1987) 70 N.Y.2d 76 [517 N.Y.S.2d 465, 510 N.E.2d 334]; Apex Oil Co. v. Vanguard Oil & Service Co. Inc. (2d Cir.1985) 760 F.2d 417; G.A. Thompson & Co. v. Wendell J. Miller, etc. (S.D.N.Y. 1978) 457 F. Supp. 996.)
As the foregoing discussion makes clear, we have serious reservations about whether the result in Allied Canners, with its emphasis on the good faith of the breaching party, is appropriate in an action seeking damages under section 2713. We have no reservations, however, in not extending the Allied Canners rationale to a section 2712 case. As noted earlier, no section 2712 case, including Sun-Maid Growers v. Victor Packing Co., supra, 146 Cal. App. 3d 787, has ever held that cover damages must be limited by section 1106. The obvious reason is that the cover-contract differential puts a buyer who covers in the exact same position as performance would have done. This is the precisely what is called for in section 1106. In this respect, the cover/contract differential of section 2712 is very different than the market/contract differential of section 2713, which "need bear no close relation to the plaintiff's actual loss." (White & Summers, supra, Buyer's Remedies, Cover, at p. 295.)
In summary, we hold that where a buyer "`cover[s]' by making in good faith and without unreasonable delay any reasonable purchase of ... goods in substitution for those due from the seller, ... [that buyer] may recover from the seller as damages the difference between the cost of cover and the contract price...." (§ 2712.) This gives the buyer the benefit of its bargain. What the buyer chooses to do with that bargain is not relevant to the determination of damages under section 2712.
B. Buyer's Cross-appeal
(4) Buyer contends it should receive prejudgment interest from July or August 1991 rather than from 30 days before the start of trial as awarded by the trial court. We agree.
*390 The facts relevant to this claim are as follows: On July 26, 1991, buyer filed a complaint under PACA with the Department of Agriculture in Washington, D.C. The complaint stated, in pertinent part: "8. On or about May 13, 1991, Respondent breached the October 1990 contract by failing to provide to Complainant the required quantity of lettuce. Complainant notified Respondent of its breach on May 16, 1991 by a letter, a copy of which is attached hereto as Exhibit E, and began to purchase open market lettuce against Respondent's account to meet its requirements. [¶] 9. As a consequence of Respondent's breach of contract, Complainant has been required to purchase lettuce from other sources, for which it has paid the amount of $704,895.71 more than it would have had there been no breach of contract. The determination of said sum is more fully set forth in Exhibit F, attached hereto, as a description of the sources and prices which Complainant was charged." Exhibit F was a detailed schedule listing on a week-by-week basis the identity of the supplier, the purchase order number, the date of the purchase, the number of bins, the price actually paid to the supplier, and the price that would have been paid under the contract. The total sum paid for replacement lettuce was $966,908.30, which was $704,895.71 more than the contract price.
When buyer filed its cross-complaint in February 1992, it sought damages of $704,895.71, together with interest from June 16, 1991. Seller never challenged buyer's figures. Instead, its argument was that buyer was not entitled to damages (except for $70,000) because buyer had passed on all of its losses except $70,000 to the Castellini Company.
In preparation for trial, buyer's controller reviewed his calculations and discovered that a few of the purchases listed in Exhibit F of the PACA complaint were not in substitution for lettuce due from seller. He revised his calculations eliminating these purchases. The revised figures showed the cost of cover to be $908,564.94, the cost of lettuce had it been purchased at 9 cents per pound to be $252,604.72, and the consequent cover damages to be $665,960.22. The jury accepted his figures to the penny.
Subsequently, the trial court awarded buyer prejudgment interest commencing 30 days before trial.
Civil Code section 3287, subdivision (a) provides: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled to also recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt." As the facts are not in dispute, we independently review *391 whether and when buyer's damages were certain or capable of being made certain by calculation.[8] It is from that day that buyer's entitlement to prejudgment interest commences.
The test for recovery of prejudgment interest under section 3287, subdivision (a) is whether defendant (1) actually knows the amount of damages owed plaintiff, or (2) could have computed that amount from reasonably available information. (Chesapeake Industries, Inc. v. Togova Enterprises, Inc. (1983) 149 Cal. App. 3d 901, 907 [197 Cal. Rptr. 348].) "If the defendant does not know or cannot readily compute the damages, the plaintiff must supply him with a statement and supporting data so that defendant can ascertain the damages. [Citation.]" (Polster, Inc. v. Swing (1985) 164 Cal. App. 3d 427, 435 [210 Cal. Rptr. 567].)
In the instant case, that is exactly what buyer did when it supplied seller with exhibit F, listing all lettuce purchases, purchase order numbers, bin numbers, and price information. The fact that an error of approximately 5.5 percent was made in the original calculations does not make the damages uncertain. Several cases are instructive.
In Marine Terminals Corp. v. Paceco, Inc. (1983) 145 Cal. App. 3d 991 [193 Cal. Rptr. 687], for example, the plaintiff sent various invoices to the defendant demanding that defendant reimburse it for costs associated with defendant's faulty repair work. At trial, it emerged that not all of the $38,918.71 charged by the repair facility was for work done on the left gear. In fact, five work orders totaling $2,461.80 were for inspections and work done on the right gear. This 6.3 percent discrepancy did not make the damages uncertain. "The errors ... were minor and could have been easily corrected at the time the demand for payment was made. Defendant Paceco disputed its liability but at no time prior to trial disputed the amount or method of calculating plaintiff's damages. Those damages were readily ascertainable and capable of being made certain from the data furnished to defendant in 1977. Plaintiff is entitled to prejudgment interest." (Id. at pp. 997-998.)
Likewise in Esgro Central, Inc. v. General Ins. Co. (1971) 20 Cal. App. 3d 1054, 1062 [98 Cal. Rptr. 153], the court held that the insured's damages for *392 loss of a business during a riot were ascertainable even though the jury's award was greater that the amount sought in the proof of loss statement. The discrepancy did not "detract from the proposition that the damages [were] fixed or determinable." (See also Coleman Engineering Co. v. North American Aviation, Inc. (1966) 65 Cal. 2d 396, 408-409 [55 Cal. Rptr. 1, 420 P.2d 713], disapproved on another ground in Earhart v. William Low Co. (1979) 25 Cal. 3d 503, 513 [158 Cal. Rptr. 887, 600 P.2d 1344] [plaintiff's original demand was $7,000 too high due to an error in the pricing formula; court explained that "the erroneous omission of a few matters from the account or erroneous calculation of the costs do not mean that the damages are not capable of being made certain by calculation" (65 Cal.2d at p. 409.)].)
Similarly in the instant case, buyer's controller's minor error did not make buyer's damages uncertain. Accordingly, buyer was entitled to prejudgment interest from August 1, 1991.[9]
DISPOSITION
The order of the trial court awarding prejudgment interest from 30 days before trial is reversed and the cause is remanded. The trial court is directed to enter a new order awarding buyer prejudgment interest from August 1, 1991. In all other respects, the judgment is affirmed. Costs on appeal to buyer.
Premo, J., and Elia, J., concurred.
NOTES
[1] Unless otherwise specified, all further statutory references are to the California Uniform Commercial Code. Section 2711 provides: "(1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid [¶] (a) `Cover' and have damages under the next section as to all the goods affected whether or not they have been identified to the contract; or [¶] (b) Recover damages for nondelivery as provided in this division (Section 2713). [¶] (2) Where the seller fails to deliver or repudiates the buyer may also [¶] (a) If the goods have been identified recover them as provided in this division (Section 2502); or [¶] (b) In a proper case obtain specific performance or replevy the goods as provided in this division (Section 2716). [¶] (3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (Section 2706)."
[2] In answering special interrogatories, the jury found (1) that if buyer were awarded the difference between the contract price and the cost of cover, it would not result in a windfall to buyer, and (2) that buyer had an obligation to pay Castellini Company for the amount Castellini Company paid buyer to acquire the substitute lettuce. On appeal, seller contends that these findings were not supported by substantial evidence. As we shall explain, however, these findings were not necessary to justify the section 2712 award. Accordingly, we need not reach the issue whether the evidence supports the jury's findings on these two special interrogatories.
[3] Seller, not surprisingly, does not focus on postbreach events impacting on seller's ultimate profit or loss. As noted earlier, seller made a profit of between $800,000 and $1.1 million for selling the lettuce at the higher market price rather than the lower 9 cent per pound contract price.
[4] Section 2712's requirement that buyer purchase goods "in substitution for those due from seller" does not "envisage[] ... goods ... identical with those involved but commercially usable as reasonable substitutes under the circumstances of the particular case...." (U.C.C. com. 2 to § 2712.) Where, as here, the goods purchased to cover differ significantly from the contracted for goods, is the section 2712 damage formula even appropriate? Should the breaching seller be responsible for the postbreach rains in September 1976? If not, should the damage formula of section 2712 be adjusted to take these matters into consideration?
[5] The court apparently never considered anything other than whether the Japanese buyers would sue Allied Canners. For example, it did not consider whether the breach adversely affected Allied Canners's goodwill with its Japanese customers. Should the court not have also considered Allied Canners's potential loss of future contracts?
[6] The other section 2713 case on which seller relies, an Eighth Circuit case, H-W-H Cattle Co. v. Schroeder, supra, 767 F.2d 437, also limited a buyer's damages to its anticipated commissions on the resale of the cattle rather than the full contract-market differential.
[7] In view of Allied Canners' three-part test, we assume the results would have been different here if the court had found Victor was "a deliberately breaching seller." Perhaps in that case, the court would not have focused on what the aggrieved buyer ultimately would have received on resale but might have focused on what benefits the seller reaped from breaching. In Allied Canners, the price of raisins went up from 30 cents a pound to 87 cents a pound. If seller had not breached, it would have had to go out on the market and buy raisins for Allied at considerably more than it was contracted to sell them for to Allied. By breaching, it avoided a loss that might have been more in the $150,000 range (market-contract differential) than the $4,000 range (Allied's lost profits). Thus, the court prevented a windfall to Allied at the cost of providing a windfall to Victor. Such a result is curious if the intent of contract damages is to effectuate the expectations of the parties to the contract. Here, the parties clearly contemplated when they entered into their fixed price agreement that the price of raisins would fluctuate and that sometimes buyer would receive a price better than the market price and that other times it would have to pay more than the market price.
[8] We disagree with seller's assertion that the abuse of discretion standard applies in cases involving an award of prejudgment interest under Civil Code section 3287, subdivision (a). The first case seller cited (Moreno v. Jessup Buena Vista Dairy (1975) 50 Cal. App. 3d 438, 448 [123 Cal. Rptr. 393]) dealt with discretionary prejudgment interest for unliquidated claims under subdivision (b) of section 3287, and the second (Cassinos v. Union Oil Co. (1993) 14 Cal. App. 4th 1770, 1790 [18 Cal. Rptr. 2d 574]) dealt with an award of prejudgment interest for the breach of an obligation not arising from contract, which by statute is in the discretion of the jury.
[9] Buyer requests prejudgment interest from July 1, 1991 or "August 1, at the latest." As the information from which to calculate damages was not submitted until July 26, 1991, this court concludes that the latter date is more appropriate. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1743679/ | 511 So. 2d 446 (1987)
Johnny Louis MILLER, et al,
v.
EAST BATON ROUGE PARISH SHERIFF'S DEPARTMENT, et al.
No. 86-C-1696.
Supreme Court of Louisiana.
July 28, 1987.
*448 Joseph Simpson, Simpson & Schwartz, Amite, for applicants.
William Cooper, Jr., Baton Rouge, for respondents.
DENNIS, Justice.
Our decision in this case hinges on whether more than one conclusion may reasonably be drawn as to whether a sheriff's department detective arrested and continued criminal proceedings against the plaintiffs without probable cause and with malice. After a bench trial, the district court found that the plaintiffs had fully proved malicious prosecution and awarded plaintiffs damages. On appeal, the court of appeal reversed, holding that the trial court erred manifestly in finding that the sheriff's detective had acted maliciously and without probable cause. Miller v. East Baton Rouge Parish Sheriff's Department, 492 So. 2d 23 (La.App. 1st Cir.1986). We reverse, reinstate the district court judgment with respect to liability and remand the case to the court of appeal for its review of the damage awards. In this case more than one reasonable conclusion could have been drawn as to whether the detective acted without probable cause or with malice. Consequently, the court of appeal fell into error when it disturbed the trial court's reasonable findings on these issues and its judgment as to the defendant's liability for malicious prosecution.
1. Factual Background
A Baton Rouge television station broadcast on its "Crime Stoppers" program a reenactment of an unsolved armed robberyattempted murder which had occurred in East Baton Rouge Parish on November 12, 1982. The crime depicted in the program was one in which a man had been waylaid at night near Zachary, Louisiana as he entered the driveway to his rural home, beaten so severely that he nearly died and could not recall the identity of the culprit, and robbed of his wallet, truck and gun. A blue late model Ford pick-up truck had been seen in the vicinity before the offense by a witness who could not describe it more exactly because of darkness. Fingerprints and palm prints were taken from the victim's truck when it was found abandoned the day after the robbery in Slaughter, Louisiana. Viewers were invited to call a telephone number to give any information they might have concerning the offense. They were further informed that each caller would be assigned a code number to preserve his anonymity, and that information leading to arrest and conviction would entitle an informant to a reward.
In response to the program, an anonymous tipster identified the robbers as "Freddie Miller and his nephew." In due course, Lt. Cecil Jarreau, East Baton Rouge Sheriff's Detective, to whom the case had been assigned, was given the information as well as the circumstance under which it had been developed by Crime Stoppers. A few days later the tipster reported that Freddie Miller was in jail in Greensburg, Louisiana.
Lt. Jarreau went to the jail in Greensburg to interview Freddie Miller but found that he had been released on bail. However, the officer talked to another inmate, Eddie Joe Howell, who had been arrested for the same offense. Howell told him that he and Freddie Miller had been charged with the murder of Freddie Miller's nephew, Eldon O'Bryant, that Miller had been arrested first, but that he, Howell, had been arrested the next day because Miller "told them on me." When Howell was asked about Freddie Miller's involvement in any other crimes, Howell said that on or about November 17, 1982 at Miller's house in Amite, Miller asked him if he wanted to buy a gun and told him that a while back Freddie Miller and Johnny Miller waylaid a man coming into his driveway, beat him up badly, took his truck and wallet, and left him for dead. Howell also told Jarreau that Freddie used to commit crimes with Eldon O'Bryant, and that he, Howell, had *449 advised Eldon on how to rob people in the country:
I told himyou just way-lay them at the gate when they come inyou know that's why they always take their vehicleI told himI saidhow's it gonna lookyou jack some clown up and leave him in the ditch and their car is still there with the headlights on and all this kind of stuffany passerby will call the "heat"call the "man"where you get rid of it and go dump it down the road somewhere or take it home and strip it or sellor just get rid of itpeople driving down the road or passing a police car there ain't nothing still out of the ordinary.
Howell said that in November, 1982 he saw Miller using his father's "old raggedy" blue green 1960's or early 70's one ton truck. Lt. Jarreau was not aware that Howell had access to television in jail and did not question him about whether he had learned of the crime facts from the Crime Stoppers program.
During the interview Howell disclosed to Lt. Jarreau some of the details of his extensive criminal record which included several felony convictions. At trial Lt. Jarreau testified that he had discussed Howell's criminal record with him and had looked at his rap sheet. Jarreau remembered that Howell had been convicted of bank robbery for which he had served a five year sentence but he could not recall the other offenses. Eddie Joe Howell's arrest and conviction record introduced at trial was extensive. It included charges of murder, conspiracy to commit murder, assault with a deadly weapon, forgery, receiving stolen property, possession of two driver's licenses, possession of stolen property and carrying a concealed weapon. His convictions and sentences included five years for bank robbery in California and eight years for bank robbery and conspiracy to possess contraband in Indiana. Nevertheless, Lt. Jarreau testified that even though he got the rap sheet and looked at it, that did not make any difference in his decision as to whether Howell was a credible informant, because most of his information as a detective comes from the criminal element.
Howell also informed the officer that he had received protection in the federal witness program in return for his testimony contributing to the conviction of an offender for murder committed in a federal penitentiary.
Lt. Jarreau the same day called Del Marie Howell, Eddie Joe Howell's wife, who lived in Amite, and interviewed her by telephone. Mrs. Howell had been charged with the murder of O'Bryant with her husband and Freddie Miller but was not in jail. She gave Lt. Jarreau information pertaining to Freddie and Johnny Miller based almost entirely on rumor, hearsay and alleged conversations with the Millers. She alleged generally that Freddie Miller had been involved in numerous crimes and said that he and others were responsible for service station robberies in Tangipahoa Parish and the dumping of an Orleans Parish murder victim's body in the lake. She had heard that Freddie committed these crimes with either Eldon O'Bryant or Johnny Miller, the latter, having become Miller's confederate after O'Bryant's death. However, she did not know anything about any East Baton Rouge Parish crimes in which Freddie may have been involved.
The detective sent Freddie Miller's fingerprints to the State Police for analysis but they reported that his prints did not match those on the victim's truck. Lt. Jarreau called Howell's federal probation officer and learned that he had received federal witness protection as he reported but that he had been discharged from the program because he did not continue to cooperate with the government. The Lieutenant called sheriffs' offices in surrounding parishes and determined that they had no record of an offense in November, 1982 similar to the one he was investigating. He also determined from the state motor vehicle bureau that Freddie Miller was the title holder of a 1970 Ford truck. He did not interview the witness who had seen a blue Ford truck in the vicinity the night of the crime or attempt to have the witness inspect Miller's truck because he thought darkness would have prevented the witness *450 from positively identifying the truck or any of its distinguishing features.
Lt. Jarreau obtained a warrant for the arrest of Freddie Miller on charges of attempted murder and armed robbery based on the officer's sworn affidavit setting forth the following facts: (1) the victim was severely beaten and was unable to recall anything about the crime; (2) a wallet,.357 magnum revolver, and a truck were taken from the victim in the robbery; (3) the victim's employee who left the store minutes before his employer saw a dark blue Ford pick-up, approximately a 1966 model, following him just before the time of the robbery; (4) after the employee and the truck passed the victim's residence, the truck turned and headed back toward that residence; (5) an anonymous tipster from the Crime Stoppers Program implicated Freddie Miller and said that Freddie Miller had been arrested for murder in Greensburg, Louisiana; (6) Freddie Miller had been in jail, but had been released on bond; (7) another man, Eddie Joe Howell, arrested with Freddie Miller for another crime, stated Freddie and his nephew had committed several robberies; (8) Freddie Miller asked Howell in November if he wanted to buy a gun. Freddie told Howell that he and Johnny had beaten a man, taken his wallet and truck and left the man for dead, but later found that he was still alive; (9) Howell said that Freddie owned a dark blue-green Ford pick-up either late 1960's or early 70's model; (10) no other similar incidents had occurred in surrounding parishes in November; (11) Howell was a federal witness in a murder case, his testimony resulted in a conviction, all of which was verified by Howell's federal parole officer.
Pursuant to the warrant, Lt. Jarreau arrested Freddie Miller on March 9, 1983 and placed him in the East Baton Rouge Parish Jail. On the same day, under authority of a search warrant, Jarreau searched Miller's mobile home for items connected with the crimes but found nothing. He also attempted to question Miller concerning the offense but ceased his effort when Miller said he had nothing to do with it and refused to answer further without counsel.
Freddie Miller and his father, Bobby Miller, testified that at the time of Freddie's arrest Lt. Jarreau refused to listen to the father's attempt to tell Jarreau that Freddie was at a party in Amite with over twenty people at the time of the crime in Zachary on November 12, 1982. Travis Dykes, former Chief Detective, Tangipahoa Sheriff's Department, an investigator employed by the Millers, testified that he offered Lt. Jarreau a list of alibi witnesses and urged him to check them out before he jailed Freddie in Baton Rouge but Jarreau refused saying he did not need to talk to these witnesses. Dykes further testified that he again unsuccessfully urged Lt. Jarreau to interview the potential defense witnesses at Freddie's bail hearing on March 11, 1983. At trial Lt. Jarreau testified that he did not remember these conversations. However, he admitted that as a general practice he refused to check out alibis because in his opinion criminals always have alibis.
At this point, Lt. Jarreau visited Mrs. Howell and conducted another interview. Mrs. Howell provided no new or more specific information concerning Freddie's and Johnny's alleged involvement in various burglaries and robberies. However, she stated in response to Lt. Jarreau's question that Freddie Miller had not associated with anyone named "Johnny" other than his cousin, Johnny Miller. She stated that she had seen Freddie Miller on unspecified occasions with a .357 magnum, a derringer, and a couple of rifles. She did not know anything about the November 12, 1982 crime. Freddie and Johnny began to discuss in her presence, a specific crime they had committed but they desisted at her request before she heard any of the details.
On March 15, 1983, Lt. Jarreau arrested Johnny Miller based on a warrant obtained with an affidavit identical to that of the officer's in Freddie Miller's arrest, except that he added these additional facts:
On Friday, March 11, 1983, the affiant interviewed and obtained a statement from Del Marie Howell, the wife of Eddie Howell. Mrs. Howell advised that she has lived all of life in Amite, Louisiana *451 and she had grown up with Freddie Miller along with his wife, Julie and Johnny Miller, Freddie Miller's cousin. She also stated that she knew Eldon O'Bryant, who was living with Freddie and Julie Miller before he was killed. Mrs. Howell further stated that Freddie Miller wanted Eldon O'Bryant killed because Freddie Miller was afraid that Eldon was going to talk to the police about all of the robberies and burglaries, which they had pulled together. Mrs. Howell further stated that Freddie Miller, Eldon O'Bryant and Johnny Miller had often bragged about the jobs, which they had pulled together, and that they had talked about them in the presence of her and her husband, Eddie Howell. Mrs. Howell further stated that she had seen Freddie Miller with a 357 caliber revolver and had also seen him with rifles and a derringer.
A drivers' license picture was shown to Mrs. Howell of a Johnny L. Miller, white male, date of birth 4/3/57, whom she positively identified as the Johnny Miller, whom she knew was Freddie Miller's cousin.
Unlike his cousin Freddie, Johnny Miller offered to cooperate fully and even showed Lt. Jarreau a letter from his attorney instructing him to do so. During the ride to the jail in Baton Rouge, Miller informed the detective that on the night of the crime, November 12, 1982, he attended a birthday and lasagna party in Amite and had spent the entire evening in the company of some twenty to twenty-four friends and family members. Further, he stated that Freddie Miller was also in attendance and that he could recall the date specifically because it was the birthday of his cousin's wife. On March 15, 1983, Johnny Miller's fingerprints and palm prints were compared to those taken from the victim's vehicle but no similarities were found.
Beginning on March 15, 1983, Travis Dykes asked Lt. Jarreau on several occasions to permit the Millers to take lie detector tests. Jarreau testified that he intended to offer them tests anyway but admitted that Dykes' requests brought them about a little faster. On March 22, 1983, a polygraphist selected by Jarreau and Dykes performed the tests and concluded that Johnny Miller had nothing to do with the November 12, 1982 crime. Further, in his opinion, Freddie Miller was not guilty of the crime itself but had not been completely truthful about his knowledge of the offense on his test.
Coincidentially, according to Lt. Jarreau, the Crime Stoppers tipster called him on March 22, 1983 and admitted that he had received his information about Freddie Miller from Eddie Joe Howell after they watched the Crime Stoppers television program together while they were fellow inmates at the St. Helena Parish Jail. Lt. Jarreau confronted Eddie Joe Howell with the tipster's admission but Howell denied watching or having any knowledge of the Crime Stoppers program. On March 24, 1983, Lt. Jarreau had a lie detector test performed on Howell from which the polygraphist concluded that Howell had lied about Freddie Miller's involvement in the November 12, 1982 crime. On that same day, the Lieutenant tricked Howell's wife into admitting that Howell had made up the whole story about the Miller's involvement in the Crime Stopper's case.
After spending eight days in jail, Johnny Miller was released on March 23, 1987 by order of a judge in response to a letter from Lt. Jarreau urging that charges be dismissed because the polygraph test indicated Miller's innocence and because of the evidence that Johnny was at a birthday party at the time of the crime. Freddie Miller was released on March 29, 1983, after spending twenty-one days in jail, in response to a letter of that date from Lt. Jarreau. In explanation of the five day delay between the Howell polygraph exculpating Freddie Miller and Lt. Jarreau's letter to the judge, the Lieutenant claimed that he had relied on an assistant district attorney to obtain Miller's release. When asked why he did not immediately write a letter directly to the judge when he learned of the decisive lie detector results, as he had done in Johnny Miller's case, Lt. Jarreau said he did not think it necessary *452 because the assistant district attorney assured him she would take care of it.
During the trial, there was evidence which tended to show that Lt. Jarreau arrested the Millers and continued proceedings against them although he knew that he did not have probable cause to incarcerate or prosecute them. According to Travis Dykes, on March 11, 1983, after attending Freddie Miller's bail hearing, he suggested that Lt. Jarreau should ask for a preliminary hearing in the case, but Jarreau replied that he did not have enough evidence at that time for a preliminary hearing. Lt. Jarreau conceded that he may have had a conversation with Dykes on that date but he did not recall discussing a preliminary hearing. However, the Lieutenant testified that his main object in arresting Freddie Miller was "to get him off of the street and see if he would talk to me." Further, he stated that "I was hoping someone would talk. I was hoping once I had Freddie in jail that somebody would open up...." As for Johnny Miller, Lt. Jarreau admitted that he did not have probable cause to arrest Johnny along with Freddie and that the only additional information he received about Johnny before arresting him was his second conversation with Howell's wife. The Lieutenant testified that after he arrested the Millers he thought one of them would eventually give him a statement or somebody they had talked to would come forward.
2. Trial and Appellate Courts
Freddie Miller and Johnny Miller filed suit for damages due to malicious prosecution against Lt. Jarreau, the East Baton Rouge Sheriff's Office and the American Druggist Insurance Company. After a trial before a judge, the court rendered judgment in favor of each plaintiff against the defendants in the sum of $50,700. In his reasons for judgment, the trial court found that there was not probable cause to arrest either of the plaintiffs and that there was actual malice on the part of Lt. Jarreau.
On appeal, the court of appeal reversed, deciding that the trial court had erred manifestly in finding that Lt. Jarreau acted without probable cause in arresting and continuing criminal proceedings against the plaintiffs.
3. Legal Precepts
An action for malicious prosecution in a criminal proceeding lies in all cases where there is a concurrence of the following elements: (1) the commencement or continuance of an original criminal proceeding; (2) its legal causation by the present defendant against plaintiff who was defendant in the original proceeding; (3) its bona fide termination in favor of the present plaintiff; (4) the absence of probable cause for such proceeding; (5) the presence of malice therein; (6) damage conforming to legal standards resulting to plaintiff. Jones v. Soileau, 448 So. 2d 1268 (La.1984); Hibernia Nat. Bank v. Bolleter, 390 So. 2d 842 (La.1980); Johnson v. Pearce, 313 So. 2d 812 (La.1975); Robinson v. Goudchaux's, 307 So. 2d 287 (La.1975); Eusant v. Unity Industrial Life Ins., 195 La. 347, 196 So. 554 (1940).
The individual interest in freedom from unjustifiable litigation and the social interest in supporting a resort to law have traditionally been balanced by the requirement that the plaintiff must prove these essential elements to establish a malicious prosecution action against an accuser. Prosser & Keeton, The Law of Torts § 119 at p. 871 (5th ed. 1984); Harper, James and Gray, The Law of Torts § 4.2 at p. 407-408 (2nd ed. 1986); 54 C.J.S., Malicious Prosecution § 3 at p. 954-57 (1948).
Chief among these elements is the requirement that the plaintiff must sustain the burden of proof that the criminal proceeding was initiated or continued without "probable cause". Probable cause for arrest exists when facts and circumstances within the knowledge of the arresting officer and of which he has reasonable and trustworthy information are sufficient to justify a man of average caution in the belief that the person to be arrested has committed or is committing an offense. Beck v. Ohio, 379 U.S. 89, 85 S. Ct. 223, 13 L. Ed. 2d 142 (1964); State v. Raheem, 464 So. 2d 293 (La.1985); State v. Arceneaux, 425 So. 2d 740 (La.1983); State v. Johnson, 422 So. 2d 1125 (La.1982).
*453 The appearances must be such as to lead a reasonable person to set the criminal process in motion; unfounded suspicion and conjucture will not suffice. Prosser & Keeton, at p. 876. See Johnson v. Pearce, 313 So. 2d 812 (La.1975); Whittington v. Gibson Discount, 296 So. 2d 375 (La.App. 2d Cir.1974). Verification may be required to establish probable cause where the source of the information seems unworthy, or where further information about a serious charge would be readily available. Prosser & Keeton, at p. 877. See State v. Raheem, 464 So. 2d 293 (La.1985). Cf. Plassan v. Louisiana Lottery Co., 34 La. Ann. 246 (1882). The reputation of the accused, his opportunity to offer explanation, and the need for prompt action, if any, are all factors in determining whether unverified information furnishes probable cause. Prosser & Keeton, at p. 877. See Hibernia Nat. Bank v. Bolleter, 390 So. 2d 842 (La.1980); Jefferson v. S.S. Kresge Co., 344 So. 2d 1118 (La.App. 3d Cir.1977); Hardin v. Barker's of Monroe, Inc., 336 So. 2d 1031 (La.App. 2d Cir.1976).
Second of importance in actions of malicious prosecution is the element of defendant's malice. However, malice does not submit readily to definition. Green, Judge and Jury 347 (1930); Griswold v. Home, 19 Ariz. 56, 165 P. 318 (1917). See 54 C.J.S. Malicious Prosecution § 41 (1948); Sanders v. Daniel Intern. Corp., 682 S.W.2d 803 (Mo.1984). It means something more than the fictitious "malice in law" which has been developed in defamation cases as a cloak for strict liability. There must be malice in fact. Prosser & Keeton, at p. 882. Any feeling of hatred, animosity, or ill will toward the plaintiff, of course, amounts to malice. Harper, James and Gray § 4.6 at p. 443. See Barrios v. Yoars, 184 So. 212 (Orl.App.1938); Girot v. Graham, 41 La.Ann. 511, 6 So. 815 (1889). But it is not essential to prove such ill will. Malice is found when the defendant uses the prosecution for the purpose of obtaining any private advantage, for instance, as a means to extort money, to collect a debt, to recover property, to compel performance of a contract, to "tie up the mouths" of witnesses in another action, or as an experiment to discover who might have committed the crime. Prosser & Keeton, at p. 883; Harper, James and Gray, § 4.6 at p. 445 n. 8. See Jones v. Soileau, supra; Hibernia Nat. Bank v. Bolleter, supra; Johnson v. Ebberts, 11 F. 129 (C.C.Or.1880); Glover v. Fleming, 36 Md.App. 381, 373 A.2d 981 (1977). Malice may be inferred from the lack of probable cause or inferred from a finding that the defendant acted in reckless disregard of the other person's rights. Jones v. Soileau, supra; Hibernia Nat. Bank v. Bolleter, supra; Johnson v. Pearce, supra; Brown v. United States, 653 F.2d 196 (5th Cir.1981), cert. den. 456 U.S. 925, 102 S. Ct. 1970, 72 L. Ed. 2d 440 (1982). See Spencer v. Burglass, 337 So. 2d 596 (La.App. 4th Cir.1976); Carter v. Catfish Cabin, 316 So. 2d 517 (La.App. 2d Cir. 1975). Since the determination of malice in a malicious prosecution case is a question of fact, the issue is to be determined by the trier of fact unless only one conclusion may reasonably be drawn from the evidence. Prosser & Keeton, at p. 883 n. 74, 75; Green, at p. 347-48; Harper & James, and Gray, § 4.6 at p. 446-49. On appellate review such a finding is reversible only if manifestly erroneous or clearly wrong. Arceneaux v. Domingue, 365 So. 2d 1330 (La.1978); Canter v. Koehring Co., 283 So. 2d 716 (La.1973); Ryland v. Taylor, Porter, Brooks & Phillips, 496 So. 2d 536 (La.App. 1st Cir.), cert. den. 497 So. 2d 1388 (La.1986); Blackwell v. Blackwell, 479 So. 2d 1085 (La.App. 3d Cir. 1985).
4. Application of Precepts
It is not disputed that the trial court correctly found that plaintiffs established the first three elements of their action for malicious prosecution. The elements contested here as in the court of appeal are malice and the absence of probable cause.
A. Probable Cause
Applying the appropriate legal precepts, we conclude that the trial court correctly determined that Lt. Jarreau acted without probable cause in arresting and continuing proceedings against each of the plaintiffs. Moreover, from our review of the record we conclude that the information casting *454 suspicion upon them deteriorated steadily so that there was at no time justification for their incarceration or prosecution.
Lt. Jarreau did not act as a man of average caution when he based his arrest and prosecution of the plaintiffs uncritically and almost exclusively on the word of Eddie Joe Howell, an incarcerated career criminal. Howell's lengthy criminal record of violence and dishonesty, as well as his admitted willingness to advise others in robbery, brutality and murder demonstrated that he was an unworthy source of information. Further, Lt. Jarreau was aware that Howell had reason to seek vengence against Freddie Miller because Miller had given a statement to the police accusing Howell of the murder which led to his incarceration. Additionally, the Lieutenant knew that the facts of the story that Howell used to dupe him had been broadcast over Crime Stoppers and were therefore well known. A reasonable person would not have set the criminal process in motion without obtaining more verification of Howell's information linking Miller to the crime than Lt. Jarreau was able to gather, particularly since the charges were extremely serious, further information was readily available, the plaintiff's reputations were relatively unblemished, and there was no need to arrest the plaintiffs before investigating further.
Lt. Jarreau's subsequent investigation did not provide sufficient reliable information to verify Howell's story and furnish a reasonable ground for belief in the guilt of the plaintiffs. His search of Freddie Miller's mobile home produced nothing. His efforts to match the plaintiffs' finger and palm prints with those found on the victim's truck failed completely. His attempt to place Freddie Miller's 1970 turquoise Ford pick-up truck near the victim's house about the time of the crime was equally unsuccessful. The vehicle sighted by a witness there had been described only as a late 1960's or early 1970's blue Ford pick-up, and the witness was unsure of the particulars and not confident in his description. Lt. Jarreau did not attempt to develop any additional information from this source. Without more, there were not enough common characteristics between the vehicles to conclude that it was likely that Miller's truck was the one seen by the witness. Lt. Jarreau's calls to other parishes may have eliminated the possibility that a similar crime had been committed there in November, 1982, but this information did not make it any more likely that the plaintiffs were involved in the offense under investigation. Further, his investigation of the unrelated crimes in which Howell and his wife attempted to implicate the plaintiffs did not lead to any concrete evidence. One of these crimes, an alleged Orleans Parish offense, apparently had never occurred. The Lieutenant apparently found little or no evidence to verify two alleged service station robberies in Tangipahoa Parish. With regard to the other alleged crimes, the Howells' information was so vague and indefinite that the crimes could not be identified with actual reported offenses. In only one instance, involving a crime in Ascension Parish, was Lt. Jarreau able to link Howell's story to a specific documented criminal offense. However, the facts of the Ascension Parish crime, as those of the East Baton Rouge offense under investigation, had been reenacted and widely disseminated on television by the "Crime Stoppers" program.
The information Del Marie Howell provided Lt. Jarreau did not reliably corroborate or verify her husband's report of Freddie Miller's inculpatory statement. First, Lt. Jarreau should have realized that she was no more of a trustworthy source of information than her husband. Freddie Miller's statement to the police apparently led to her being implicated and charged with murder along with her husband. She and her husband therefore had common interests in involving Miller in the East Baton Rouge Parish offenseto seek revenge and perhaps favor with the authorities. Lt. Jarreau was aware that she could have collaborated in a ruse because she communicated with her husband regularly even though he was in jail. Second, the information provided by Del Marie Howell could not be verified by independent trustworthy *455 sources any more than that supplied by Eddie Joe Howell. Mrs. Howell testified that she did not hear the details of a conversation between Freddie and Johnny Miller that may have concerned the crime under investigation. Her other accusations of them were apparently based on hearsay and could not be tied to any concrete reported offenses by Lt. Jarreau. On his second visit to Mrs. Howell she told him that Freddie Miller had not associated with anyone named "Johnny" other than Johnny Miller. This information did not add anything to what Lt. Jarreau already knew either in the way of bolstering her credibility as a trustworthy source or in verifying independently and reliably the facts incriminating the plaintiffs reported by Howell or his wife.
Lt. Jarreau's determination that Howell had received protection from the federal witness program did not boost his creditability so that he could have been considered a reliable source by a reasonable person. Lt. Jarreau also learned that Howell had been discharged from the program for lack of continued cooperation. Howell's receipt of a quid pro quo of identity and relocation protection in return for his testimony in a federal prison murder case does not necessarily indicate that he testified truthfully or that he would be truthful under other circumstances. When this ambiguous factor is weighed against Howell's documented record of crime, dishonesty and violence, as well as his motive for revenge, a person of average caution would not have considered his information creditable without further verification with reliable information.
There were additional factors, of which Lt. Jarreau was aware, that a reasonable person would have considered as weighing heavily against probable cause to arrest or proceed against the plaintiffs. The trial judge reasonably could have found that Lt. Jarreau was informed at the time of the initial arrest that both plaintiffs were at a birthday party with twenty someodd other persons on November 12, 1982. During the proceedings he was informed of this repeatedly by Johnny Miller, Johnny's father, Freddie Miller's father, and Travis Dykes, a former chief deputy of a neighboring parish. All of these persons, as well as the partygoers, were reputable citizens, and not all were related to the plaintiffs. The reputation of Johnny Miller was completely unblemished by either an arrest or a conviction. Compared with Eddie Joe Howell, Freddie Miller enjoyed a relatively clean reputation, since he had never been convicted and had been arrested only once, for the O'Bryant murder. Moreover, he was released on bail after giving a statement naming Howell as the murderer. From the record it appears that a diligent investigation by Lt. Jarreau even before Freddie Miller's arrest would have informed him that Howell was primarily responsible. In view of the seriousness of the charges, the absence of exigent circumstances, and the lack of corroboration available from independent sources, a reasonable person would have attempted to take statements and fingerprints from the plaintiffs before arresting or proceeding against them.
B. Malice
The trial court found that there was actual malice present in the actions of Lt. Jarreau against the plaintiffs. Additionally, the court found that the Lieutenant had been overzealous in his desire and haste to solve a notorious crime, that it was inconceivable that Lt. Jarreau, who was a 17 year veteran, could have been taken in by Howell's story, and that he had failed to make reasonable inquiries, both before and after the arrests, on information furnished by the Millers.
Although we do not think that the evidence supports a reasonable finding of hatred or ill will by Lt. Jarreau, the record fully supports a finding that he arrested the plaintiffs and set the criminal process in motion against them either knowing he lacked probable cause or in reckless disregard of their rights to be left alone in the absence of probable cause. Most telling in this regard was the Lieutenant's admission to Travis Dykes, which the trial court could reasonably credit, that he *456 did not have enough evidence to take the case through a preliminary examination. Since an unindicted defendant must be released at a preliminary examination if it appears there is not probable cause to charge him with the offense or with a lesser included offense, it reasonably may be inferred that Lt. Jarreau knew he did not have probable cause to charge the Millers. La.C.Cr.Pro. art. 296. Further, Lt. Jarreau admitted in his testimony that his main motive in arresting Freddie was to get him off the street, to lock him up and to force him or someone else to talk about the crime. His testimony also may be reasonably interpreted as indicating that his principal motive for arresting Johnny Miller was not based on probable cause but on his desire to obtain fingerprints and create more pressure for the Millers to confess or for other persons to come forward with evidence incriminating one or both of them. Based upon this and all of the evidence, we conclude that the trier of fact reasonably inferred malice from Lt. Jarreau's lack of probable cause and his reckless disregard of the plaintiff's rights.
5. Conclusion
Accordingly, we conclude that the court of appeal fell into error in reversing the trial court judgment; that the court of appeal judgment should be reversed; and that the case shall be remanded to the court of appeal for it to review the damage awards.[*]
REVERSED AND REMANDED TO COURT OF APPEAL FOR DAMAGE AWARDS REVIEW.
MARCUS, GULOTTA and LEMMON, JJ., dissent and assign reasons.
MARCUS, Justice (dissenting).
The court of appeal concluded that Lt. Jarreau acted in "good faith and reasonably believed" that the Millers were the perpetrators of the crime; therefore, the trial judge was clearly wrong in holding otherwise. I agree. While the presence of probable cause may be close under the circumstances, clearly there was no malice. Accordingly, I respectfully dissent.
GULOTTA,[*] Chief Judge, Court of Appeal, dissenting.
I respectfully dissent.
The underlying facts in this case, as set forth in the majority opinion, are not seriously in dispute. The question is whether these facts establish an absence of probable cause and the presence of malice.
In Jones v. Soileau, 448 So. 2d 1268 (La. 1984), this Court stated that for probable cause to exist there must be "an honest and reasonable belief" in the guilt of the prosecuted party. Although it is clear from hindsight that the police investigation in the instant case was less than thorough and manifested a zealous desire to make an arrest, nonetheless, I cannot conclude that the officer acted unreasonably and in bad faith at the time he arrested plaintiffs.
Although the Court of Appeal concluded that the trial judge had manifestly erred, I view this case as turning on a question of sufficiency of evidence. In this regard, in my opinion, there is a lack of evidence to support a finding that the officer acted without probable cause and with malice.
Accordingly, I would affirm the judgment of the Court of Appeal.
*457 LEMMON, Justice, dissenting.
When the trial court, in an action for damages against a police officer, is called upon to determine whether the officer's presentation of a warrant application to a judicial officer constituted the tort of malicious prosecution, the appropriate standard is whether the application was so lacking in indicia of probable cause that no reasonable police officer would have believed that probable cause existed. If police officers of reasonable competence could have disagreed on the issue, there is no liability. See Malley v. Briggs, 475 U.S. 335, 106 S. Ct. 1092, 89 L. Ed. 2d 271 (1986), which presented a similar issue in an action for damages under 42 U.S.C. § 1983 (1979).
A police officer who reasonably believes that there is probable cause for an arrest should be encouraged to submit an affidavit to a judicial officer. The weighing and judging of information contained in the application for an arrest warrant is virtually the exclusive province of the judicial officer, and a finding of probable cause by the judicial officer should be accorded great weight in determining liability in an action for damages against the police officer who presented the application. See Malley v. Briggs, supra, (Powell, J., concurring in part and dissenting in part).
Here, Lt. Jarreau presented to a judicial officer an affidavit which accurately stated the information that had been initially obtained from an anonymous tipster and had been subsequently developed in interviews with two other persons who had been arrested along with plaintiff Freddie Miller for an unrelated murder. That information included a statement by Freddie Miller that he and Johnny Miller had committed a crime similar in details and at a point close in time to the crime Lt. Jarreau was investigating, as well as the fact that a truck similar to the one owned by Miller was observed at the scene just before the crime. The judicial officer concluded from the affidavit that there was probable cause to arrest Miller.
On the evidence in the present record, considered in the light most favorable to the prevailing party in the trial court, but viewed along with the significant fact that the judicial officer approved the warrant, a rational trier of fact could not have concluded that the application was so lacking in indicia of probable cause that no reasonable police officer could have believed that probable cause existed.[1]
NOTES
[*] We disagree with the dissenting opinion filed by Justice Lemmon, and, as a precaution against any misunderstanding which may be created thereby, observe that: the dissenting opinion is based on federal law rather than Louisiana law applicable to this case; even under the federal case cited by the dissent, Jarreau could have been found guilty of a § 1983 violation because there was evidence from which a rational trier of the facts could have found that a reasonably well-trained officer in Jarreau's position would have known that he should not have applied for the warrant; the dissent fails to apply the Louisiana manifest error standard of appellate review of facts; the dissent disregards important factual distinctions between the separate claims of Freddie and Johnny Miller and ignores the continued malicious prosecution of each plaintiff after his arrest and in the face of mounting evidence of innocence.
[*] Gulotta, Chief Judge, Fourth Circuit Court of Appeal sitting in place of Cole, J. who is recused because he participated in the case in the court of appeal.
[1] Blame for continuation of the proceedings cannot be attributed to Lt. Jarreau. The primary protection offered by the judicial system against unwarranted arrest is the requirement of a finding of probable cause by a neutral magistrate. Once there has been an arrest based on probable cause, the primary protection against unwarranted continuance of incarceration is the preliminary examination, which plaintiffs failed to invoke. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1673875/ | 397 F.Supp. 649 (1975)
SOUTHEASTERN FINANCIAL CORPORATION, a corp., Plaintiff,
v.
John SMITH, Defendant.
Civ. A. No. 74-L-348-NE.
United States District Court, D. Alabama, Northeastern Division.
April 28, 1975.
*650 *651 Phillip A. Geddes, Huntsville, Ala., for plaintiff.
Robert M. Hill, Jr., Florence, Ala., for defendant.
MEMORANDUM OPINION
LYNNE, Senior District Judge.
I. STATEMENT OF THE CASE.
Plaintiff, Southeastern Financial Corporation ("Southeastern"), a North Carolina corporation, instituted this action against defendant, an Alabama resident, for recovery of $13,900.54, representing the total of three worthless checks allegedly "unlawfully made, uttered, or delivered by John Smith." It also seeks $3,600.00 as a reasonable attorney's fee, and $5,000.00 punitive damages.
On June 14, 1967, plaintiff entered into a factoring agreement with Danube Carpet Mills, a Georgia corporation, by which Danube assigned its accounts receivable to Southeastern.
On November 5, 1973, Danube shipped to Carriage House Carpets, a corporation organized January 17, 1973, under the laws of Alabama, carpeting invoiced at $3,684.82. Pursuant to the factoring agreement, this account was assigned to Southeastern on November 9. In late November, Carriage House issued check number 512 to the order of Danube in the amount of the invoice. This check was signed as follows:
CARRIAGE HOUSE MOBILE
HOMES, INC.
General Account
By Woody Lacy /s/
Authorized Signature
By John Smith /s/
Authorized Signature
Under the factoring agreement, the check was endorsed by Danube to Southeastern.
In like manner, Danube shipped, on November 15, 1973, carpeting invoiced at $4,252.54 to Carriage House, the account being assigned to Southeastern on November 16. Carriage House remitted check number 597, dated December 4, 1973, executed as above, in the amount of $4,252.54 to Danube. This check was endorsed over to Southeastern on December 14.
Similarly, Danube shipped carpeting on November 25, 1973, invoiced at $3,662.23, to Carriage House. This invoice too was apparently assigned to Southeastern, although the record does not show the assignment. On November 30, 1973, Danube invoiced Carriage House for an additional $2,300.95 in carpeting, assigning the account to Southeastern on the same day. On December 11, a check, number 710, signed as above, was remitted to Danube in the amount of $5,963.18, apparently covering *652 both invoices. This check too was presumably endorsed over to Southeastern, although the record is far from clear as to this endorsement.[1]
Each of these checks was apparently refused payment when presented to the drawee bank, the First State Bank of Phil Campbell, Alabama. The reasons for refusal are not easily discernible, although the back of the first check above is marked, in unidentified handwriting, "Drawn against uncollected funds," while the third check has stamped upon its reverse side, "ACCOUNT CLOSED."
The defendant's answer and his answers to interrogatories make it clear that he was Secretary for Carriage House from June 23, 1973, until January 1, 1974. He was also a twenty percent shareholder from June 1, 1973, to January 1, 1974, holding 20 shares of the corporate stock, representing a $10,000 contribution to capital. The other individual signer of the checks, Woody Lacy, was president of the corporation and a twenty percent shareholder during the relevant period.
The plaintiff has tendered the affidavit of Catherine Thrasher, bookkeeper of Carriage House, in which she states that she directed a "daily management report" to Mr. Smith during November and December, 1973. This report
indicated deposits made, checks drawn, and net balance remaining in each checking account at the end of each work day. Negative balances in checking accounts were clearly shown on the report.
This statement stands undenied.
By its motion for summary judgment filed September 23, 1974, the plaintiff argues that it is entitled to judgment against Smith as a matter of law. It relies principally upon the following statute:
The holder of a worthless check, draft, or order for the payment of money shall have a right of action against the person who unlawfully made, uttered, or delivered the same to him or to his endorser. And such action may be maintained though there has been no prosecution or conviction or acquittal of the defendant for his unlawful act. Such action must be brought within one year from the date of the unlawful act. The plaintiff in such action may recover such damages, both punitive and compensatory, including a reasonable attorney fee, as the jury or court trying the case may assess.
[Tit. 7, § 131(1), Code of Ala. 1940 (Recomp.1958) (1973 Cumulative Pocket Part)].
Plaintiff also relies on Tit. 7A, § 3-403, Code of Ala. 1940 (1966 Added Volume), which is the UCC provision establishing by contract the liability of agents for checks drawn above their signatures.
Defendant argued at oral argument and in his brief that he is protected from liability on the checks by reason of the corporate shield, unless there was fraud on his part. He further asserts that, should his motion for summary judgment be denied, he has defenses against Danube on the obligations underlying the checks and that he should be allowed to assert these defenses against Danube's assignee and endorsee, Southeastern.
These contentions raise the following issues:[2]
1. May the plaintiff obtain judgment on the checks based upon the contractual theory that defendant's signature binds him personally?
2. May the plaintiff recover on the checks based upon the "Bad Check" statute recited above?
*653 3. If so, what are the elements of the plaintiff's cause of action?
This Court concludes that the plaintiff cannot recover from defendant under a contractual theory of liability. He has, however, stated a cause of action under Tit. 7, § 131(1). Since that statute is construed herein to authorize recovery only upon proof of an intent to defraud, the issue of liability is inappropriate for resolution upon motions for summary judgment.
II. DISCUSSION.
A. The plaintiff cannot recover against the defendant under a contractual theory. He is seeking to hold the defendant here to the contract of the maker of an instrument under Tit. 7A, § 3-413, Code of Ala. 1940 (1966 Added Volume). [Hereinafter, references to the Alabama Uniform Commercial Code will be made by article and section only]. The defendant contends, however, that he signed in a representative capacity for the corporation and cannot be held as the maker.
Section 3-403 provides as follows:
§ 3-403. Signature by authorized representative. (1) A signature may be made by an agent or other representative, and his authority to make it may be established as in other cases of representation. No particular form of appointment is necessary to establish such authority.
(2) An authorized representative who signs his own name to an instrument
(a) is personally obligated if the instrument neither names the person represented nor shows that the representative signed in a representative capacity;
(b) except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity, or if the instrument does not name the person represented but does show that the representative signed in a representative capacity.
(3) Except as otherwise established the name of an organization preceded or followed by the name and office of an authorized individual is a signature made in a representative capacity.
Plaintiff relies on 3-403(2)(b) as establishing Mr. Smith's liability. That reliance is misplaced, however, since 3-403(3) more closely reflects the facts of this case. Concededly, the signatures of Messrs. Smith and Woody are not followed by any designation of their offices, so that subsection 3 is not precisely applicable. Since 3-403(2) imposes liability on an agent only where "the instrument" fails to reveal his representative capacity, however, we are free to look at the entire instrument for evidence of the capacity of the signer. The facts that the check indicates that it is drawn against the "General Account" of the corporation and that the signatures are each preceded by the word "By" are sufficient to remove any possible confusion as to whether Smith and Woody were signing as agents of the corporation. It is improbable that anyone dealing with these checks would be led to believe that Smith and Woody were signing as joint obligors with the corporation. Pollin v. Mindy Mfg. Co., 211 Pa. Super. 87, 236 A.2d 542 (1967); Bennett v. McCain, 125 Ga.App. 393, 188 S. E.2d 165 (1972); see § 1-102(1); see also Little v. People's Bank of Mobile, 209 Ala. 620, 622, 96 So. 763 (1923) (applying pre-Uniform Commercial Code law).
B. Plaintiff's recovery then must be under the language of the statute set out above, codified at Tit. 7, § 131(1), Code of Alabama 1940 (Recomp.1958) (1973 Cumulative Supplement), and enacted as Act 567 by the Alabama Legislature in 1959. 1959 Acts 1426.
A preliminary problem is posed by the fact that this act was codified *654 at Tit. 39, § 53(1), after its enactment. When the Alabama Legislature adopted the Uniform Commercial Code, it purported in § 10-102 to repeal, inter alia, "Title 39, §§ 1-12, inclusive, § 13, as amended, §§ 14-85, inclusive, . . .." This would seem to include the above-quoted section, except that, officially, no act of the Alabama Legislature has been codified since the adoption of the 1940 Code. Thus, all references in subsequent acts to Code provisions must be construed as applying only to the Code as it was codified in 1940, not as it might have been recompiled or recodified by the Code publisher. Thus, an act passed subsequent to the adoption of the Code of 1940 could be repealed only by specific reference to the act by number and year of adoption. That this is the understanding of the Alabama Legislature may be inferred from the repealing provision cited above, since the provision specifically repeals, in addition to the recited Code sections, a number of acts adopted subsequently to the 1940 Code. These later acts are repealed by reference to the act number and year of enactment. Therefore, it would stretch the legislature's intent to view the repeal of "§§ 14-85, inclusive," as repealing Act 567.
Nor can it be inferred that this act was repealed by implication. This is a disfavored method of appeal, and "[i]t is only when two laws are so repugnant to or in conflict with each other that it must be presumed that the Legislature intended that the latter repealed the former." City of Birmingham v. Southern Express Co., 164 Ala. 529, 538, 51 So. 159, 162 (1909). Since the UCC provides contractual remedies while the statute here provides a tort remedy, there is no reason to assume that the legislature intended to repeal the latter by adoption of the UCC.
This act, then, by its terms, gives to "the holder of a worthless check" a cause of action against "the person" who made the check. It in terms accrues to the holder of a check who is the endorsee of the payee, so that plaintiff in this suit has standing to invoke the statute. There are no Alabama decisions construing the statute. The only case which has involved an application of the statute, Barrett v. Hanks, 275 Ala. 383, 155 So.2d 339 (1963), dealt with an effort by the seller of a house to recover on two checks, drawn by the purchaser, on which payment was stopped. The court affirmed the purchaser's rescission of the contract, on the ground that the plaintiff-payee had misrepresented a material fact to the defendant-drawer, in connection with the sale of the house. By implication, the decision allows the drawer to prove defenses relating to the underlying obligation in an action by the payee on the instrument. The decision, however, does not construe the statute; indeed, the court there seems to discuss the case under the general counts of money owed rather than under the terms of the statute. Moreover, there is no discussion of the problem presented when the suit is instituted, not by the obligee-payee, but by his assignee-indorsee.
Viewing the statute as heretofore unconstrued, plaintiff strenuously argues that the statute gives him an unqualified cause of action against defendant, "dispensing with the requirement of proving intent." Plf's Mem. of Law, p. 3. This is an unacceptable construction of the act. The language quoted above was passed by the legislature along with a companion, criminal measure, Act No. 566. 1959 Acts 1424. The criminal provision was codified in Tit. 14, §§ 234(4)-(8). It has since been replaced, in 1971, by the Worthless Check Act, Act No. 2479. 1971 Acts 3958.[3]
*655 Thus, present § 131(1) of Tit. 7 should be construed in light of its companion measure, particularly in light of the use in § 131(1) of the term "unlawfully." This term requires content, and the most likely source from which to derive that content is in a companion statute setting forth the elements of the "unlawful" issuance of a check. Bates v. State, 24 Ala.App. 507, 137 So. 465, cert. den., 223 Ala. 527, 137 So. 465 (1931); State v. AAA Motor Lines, Inc., 275 Ala. 405, 155 So.2d 509 (1963).
A review of the criminal provision's history reveals that Act 116, 1951 Acts 344, repealed the former Code Provisions dealing with criminal penalties for the issuance of worthless checks, which were codified at Tit. 14, §§ 232, 233, and 234, Code of Alabama 1940. In place of those Code sections, Act 116 did away with "intent to defraud" in the bad check law, although the last sentence of § 2 of that Act allowed the defendant to testify as to his intent in drawing the check. Act 566, supra, repealed Act 116, and it restored "intent to defraud" as an element of the offense. See Irvin v. State, 44 Ala.App. 101, 203 So.2d 283 (1967).
A reasonable construction of the companion civil statute, then, enacted at the same time as Act 566, would encompass evidence by the defendant of his intent in issuing the check. This in turn would allow the defendant to put on evidence as to any defenses he has against the drawee which might bear on his intent in drawing the check. This construction of the civil statute makes it a true companion to the criminal statute, since the civil statute, in authorizing the recovery of punitive damages and attorney's fees, encourages "private attorneys general" to aid in policing check practices in Alabama. It would be anomalous, in these circumstances, for the civil statute to impose strict liability.
Therefore, the plaintiff must establish an intent to defraud to recover under the statute. The documents and affidavits before the Court do not conclusively settle this issue. The affidavit of Catherine Thrasher, in particular, supports an inference of fraud on defendant's part, so that there is a genuine issue of material fact, necessitating a trial under F.R.Civ.P. 56(c). See Azalea Meats, Inc. v. Muscat, 386 F.2d 5 (5th Cir. 1967).
An appropriate order will be separately entered.[*]
NOTES
[1] Plaintiff has also included an invoice for $3,656.03, dated December 10, 1973, from Danube to Carpet House. No check covering this amount has been sued upon, nor has it been explained why this invoice was included.
[2] Since jurisdiction of this case is based upon diversity of citizenship, Alabama law controls the disposition of the issues raised. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L.Ed. 1188 (1938).
[3] Section 14 of the latter Act repealed all laws in conflict with it, and it specifically repealed "Title 14, Sections 234(4) through 234(8), Code of Alabama, Recompiled 1958." Since no such official Code provisions existed at that time, the effectiveness of the specific repealer might be doubted. That issue, of course, need not be of concern here.
[*] This opinion reproduces the memorandum prepared for the Court by its law clerk, E. Mabry Rogers. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1788741/ | 509 So.2d 1002 (1987)
DIXIE ELECTRIC MEMBERSHIP COOPERATIVE
v.
LOUISIANA PUBLIC SERVICE COMMISSION.
No. 86-CA-2331.
Supreme Court of Louisiana.
June 30, 1987.
Rehearing Denied September 3, 1987.
*1003 Marshall B. Brinkley, La. Public Service Com'n, Baton Rouge, Michael R. Fontham, Paul L. Zimmering, Noel J. Darce, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, for defendant-appellant.
John Schwab, Schwab & Walter, Baton Rouge, for plaintiff-appellee.
*1004 CALOGERO, Justice[*].
On November 20, 1984, the Louisiana Public Service Commission ordered Dixie Electric Membership Cooperative to refund[1] to its members some $766,842.86,[2] a sum which it had received in 1980 by way of a refund from its wholesale supplier of electricity, Cajun Electric Power Cooperative, Inc.
Dixie Electric filed a "Petition for Appeal and Judicial Review" of the order, in the Nineteenth Judicial District Court. After hearing additional evidence presented by Dixie, the district court, pursuant to La. R.S. 45:1194, ordered the matter remanded to the Louisiana Public Service Commission for reconsideration. Thereafter the Commission affirmed its original Order (U-16281) by ex parte Order U-16281-B. When the matter was returned a second time, the district court reversed the orders of the Commission and enjoined them from implementing and enforcing the two orders. Pursuant to La. Const. art. IV, § 21(E), the Commission has appealed the matter to this Court.
For the reasons which follow we find the refund order to be reasonable and proper and within the ratemaking authority of the Commission. The district court judgment will therefore be reversed, and Orders U-16281 and U-16281-B reinstated.
Facts
Dixie Electric Membership Cooperative,[3] organized under the Louisiana Electric Cooperative Law, was a customer of Cajun Electric Membership Cooperative, which in turn purchased wholesale power from Louisiana Power and Light Co., at the times pertinent to this suit. In 1974, LP & L filed a tariff at the federal level to govern wholesale sales to its customers. LP & L sold electricity to Cajun Electric pursuant to this tariff and Cajun Electric resold electricity to Dixie Electric.[4] The Federal Energy Regulatory Commission ultimately found that the tariff filed by LP & L was excessive and ordered LP & L to refund approximately $4.7 million to Cajun, relating to overcharges during the period October, 1974 through September, 1977. Cajun received this refund in 1978. Of the $4.7 million, $766,842.86 related to overcharges earlier passed on by Cajun to Dixie (and absorbed by Dixie's customers).
During the 1974-1977 period when the overcharges were assessed, Dixie was recovering its purchased power costs through purchase power adjustment clauses, filed with and approved by the Louisiana Public Service Commission. These clauses provided for the flow through to customers of increases and decreases in the average monthly purchase power costs incurred by Dixie. Pursuant to these provisions, the purchase power costs had been passed on to Dixie's customers.
In June, 1980, Cajun Electric refunded $896,020.32 to Dixie, representing the overcharge of $766,842.86 and net interest payment of $129,177.46. The refund was accomplished by issuing to Dixie a credit memorandum for that amount, which reduced Dixie's purchase power bill for the month of June, 1980. Dixie did not thereupon (or at any time thereafter) reduce its *1005 customers' monthly utility bills to reflect the credit. Dixie Electric's purchase power cost for June 1980 was $1,561,417.59. Given a credit of $896,020.32 on that bill, Dixie's net bill was $665,397.27. Thus, Dixie flowed through to its customers in the month of June 1980 the entire purchase power cost,[5] notwithstanding their actual cost for that month had been reduced by the credit.
Pertinent to the issue in this case are the constitutional and statutory provisions relative to the ratemaking jurisdiction of the Louisiana Public Service Commission over electric cooperatives. Under La. Const. of 1921, art. VI, § 4,[6] the Commission was invested with plenary power to "supervise, govern, regulate, and control" specified types of common carriers and public utilities, not including electric cooperatives. That article, however, conferred upon the Legislature the authority to place "other public utilities" under the Commission's authority. Prior to 1970, this Court held that electric cooperatives were not under the regulatory control of the Public Service Commission because the Legislature had not exercised its prerogative to give such regulatory authority to that body. See, for example, Central Louisiana Electric Company v. Louisiana Public Service Commission, 251 La. 532, 205 So.2d 389 (1967).
In 1970, La.R.S. 45:121[7] was amended to include electric cooperatives in the definition of "electric public utility." Also, in that same year, and perhaps simultaneously, La.R.S. 12:426 was amended to place electric cooperatives under the jurisdiction of the Public Service Commission.[8] So, *1006 when the present Louisiana Constitution was adopted in 1974, the Public Service Commission was exercising regulatory control over electric cooperatives. And it was in that historical context that La. Const. art. IV, § 21(B) and its provision for regulation of "all common carriers and public utilities" was adopted:
Powers and Duties. The commission shall regulate all common carriers and public utilities and have such other regulatory authority as provided by law. It shall adopt and enforce reasonable rules, regulations, and procedures necessary for the discharge of its duties, and shall have other powers and perform other duties as provided by law.
(La. Const. 1974 Art. 4, § 21(B).
In 1978, La.R.S. 45:1163,[9] which provides for the regulation of rates and service over public utilities by the Public Service Commission was amended so as specifically to dispense with need for the Commission's approval of the rates of an electric cooperative. However, control over Dixie was regained in October, 1984 when Dixie, pursuant to La.R.S. 12:426,[10] elected to come under the regulatory jurisdiction of the Commission.
Thus, on October 4, 1984 the Public Service Commission, which had ceased regulating the rates charged by Dixie and other electric cooperatives in 1978 following the 1978 amendment to R.S. 45:1163, commenced again regulating the rates charged by Dixie. In the years intervening between 1978 and 1984, the Public Service Commission had not exercised regulatory control over Dixie. And it was during that lapse of regulatory control that Dixie received the disputed refund from Cajun. However, the refund was for power purchased from Cajun by Dixie (and passed on to Dixie's customers) during the years 1974 through 1977 when the Public Service Commission was exercising ratemaking jurisdiction over Dixie. And the disputed orders of the Commission were rendered in 1984 when the Commission clearly had, and was, exercising ratemaking jurisdiction over Dixie.
As was recited earlier in this opinion, the district court reversed the Public Service Commission and ruled in favor of Dixie, specifically finding that the action of the Commission in ordering Dixie to make the refund to its member customers was "arbitrary and capricious." In reaching this conclusion, the district judge emphasized that the Public Service Commission did not have ratemaking jurisdiction over Dixie in 1980, when Dixie received the refund from its wholesale supplier, Cajun Electric.
The Commission first takes the position that it had regulatory authority over Dixie in 1980 notwithstanding the 1978 amendment to La.R.S. 45:1163, and notwithstanding the Commission's having chosen not to regulate electric cooperatives between 1978 and 1984, because that jurisdiction is vested in them by the Constitution ([the Commission] "shall regulate all common carriers and public utilities" La. Const. art. IV, § 21(B); and in 1974 when the present Constitution was adopted, electric cooperatives were by statute public utilities in fact regulated by the Commission).
*1007 While we find persuasive the argument that the Commission's constitutional authority could not have been, and was not, interrupted between 1978 and 1984, we need not make that determination and resolve the issue in this case on that basis, for there is a resolution of the legal dispute which does not require a constitutional interpretation. That resolution follows.
In response to Dixie's contention that the Commission had no ratemaking authority over Dixie in 1980, when Dixie received the refund from Cajun, the Commission argues that the refund was for overcharges made for the years 1974 through 1977 (when the Commission was regulating Dixie). And, furthermore, the 1984 order was based upon "current circumstances and conditions," i.e. those existing in 1984. Dixie's refusal to flow the refund through to its customers was a continuing one, a condition which persisted in 1984, and a condition upon which the Commission could validly base a ratemaking decision, the Commission contends. We agree.
The trial judge was simply wrong when he concluded that the refund order was not "a ratemaking determination based on `current conditions' at that time, November 20, 1984." That money should have been refunded to Dixie's customers, in November, 1984, or at some point in June, 1980, or thereafter. Those funds, refunded to Dixie by Cajun, had earlier been collected from Dixie's customers between 1974 and 1977 on billings in accordance with rates allowed by the Louisiana Public Service Commission. The continuing failure of Dixie to refund this money to its customers (albeit money received by Dixie at a time (1980) when the Public Service Commission was not exercising ratemaking authority over Dixie) is certainly a "current condition," or existing reality which justified the Commission's regulatory orders in the exercise of its plenary ratemaking authority.[11]
In addition to the argument that the Public Service Commission lacked authority to order the refund because it did not have ratemaking jurisdiction over Dixie in 1980, Dixie raises other impediments to the Public Service Commission's order, including that:
1) Dixie handled the 1980 funds in accordance with La.R.S. 12:420.
2) If Dixie had refunded the money to its customers, Dixie would not have met its TIER requirements and would, therefore, have violated its mortgage agreements with the federal government and other lenders.
3) The refund order is barred by prescription.
4) The refund order is a money judgment and the Public Service Commission has no authority to render a money judgment.
For the following reasons we also find none of these additional arguments meritorious.
The orders of the Public Service Commission "are entitled to great weight and are not to be overturned unless shown to be arbitrary, capricious or abusive of its authority." Second, "courts should act slowly in substituting their views for those of the expert body charged with the legislative function of ratemaking, and should not disturb the Commission's decision in the absence of a clear showing of an abuse of power." Gulf States Utilities Co. v. Louisiana Public Service Commission, 364 So.2d 1266, 1268 (La.1978). Finally, decisions of the Public Service Commission should not be disturbed unless "found to be clearly erroneous or unsupported by evidence." Related to this standard of review is the rule that orders of the commission are presumed legal and proper. Also, a controlling rule is that the burden rests on the party attacking the order. Monochem, Inc. v. Louisiana Public Service Commission, 221 So.2d 504, 510 (La.1969).
Dixie contends that it applied the Cajun refund in a manner directed by La. *1008 R.S. 12:420, specifically R.S. 12:420(A)(1) and (2).[12]
Dixie argues that the money it received from Cajun is (or was) used to defray expenses (La.R.S. 12:420(A)(1)) and to pay debt service (La.R.S. 12:420(A)(2)), as a result, the money need not be refunded to its customers. But La.R.S. 12:420 is designed to control the management of cooperatives with regard to its authorized and legitimate revenues. It does not authorize violation of tariffs or over collection of funds. Nor does it affect the obligation of a regulated cooperative to comply with an otherwise legal and proper refund order.
The next argument urged by Dixie Electric is that the refund order violates La.R.S. 12:426(C)[13] because it would drive the TIER of Dixie Electric below the 1.5 level established in its mortgage agreements.[14] Mr. Frank S. Myers, the Director of Finance for Dixie, testified that, had Dixie in 1980 refunded the $896,000 it received from Cajun, its TIER would have fallen to 1.0. Had Dixie been forced to refund the $896,020.32 in 1984, its TIER, projected at 1.7, would have dropped to 1.45, which of course is below the 1.5 benchmark. Similarly, Dixie's TIER, which was projected at 1.56 in 1985, would have dropped to 1.34 had the $896,020.32 been refunded in that year.
R.S. 12:426(C)'s directory provision ("shall set rates [for cooperatives] sufficient to meet the covenants of the cooperative's mortgage and loan agreements") does not prohibit the Commission's refund order in this case.[15]
Furthermore, Dixie did not enter into evidence any loan agreement containing a provision that the failure to maintain a 1.5 TIER was a basis for default. What they did introduce into evidence, rather, was a *1009 Rural Electrification Administration Bulletin which stated as a "General Policy" that the revenues of an electric cooperative should be sufficient to maintain a TIER of 1.5. Furthermore, that bulletin itself at a Section F states:
F. In states where a regulatory commission has jurisdiction over REA borrowers' rates, the commission of the state will, of course, have to be satisfied as to the reasonableness of the borrowers' position with respect to an acceptable rate of return or utility operating margin.
The purpose of the TIER requirement of the REA is to ensure that future revenues of the debtor cooperative will be sufficient to cover its debt obligations. For example, the REA Bulletin states that rates should be set which "will produce the revenue requirements of the system." In this case the rates of Dixie Electric were sufficient to produce a 1.7 TIER in 1984. A one time refund in 1984 would for that year have reduced the TIER, essentially a reflection of the company's performance, but not confiscatorily. And that refund would not in any respect have affected the company's performance after 1984; nor would it have affected the cooperative's ability to meet future debt obligations. As the Public Service Commission's expert testified:
[I]f you looked at the accounting data for let's say the 12 months ending June 30, 1985, and the refund was made then, and I'll first assume that the refund is made as a credit to the customer's bill, and thereby reduces revenues by $896,000 plus interest, in that case the [TIER] for that 12 month period would be affected. But if then you looked again [from] July, 1985 on the [TIER] would be unaffected, so consequently, if the Company posits that it's going to have a [TIER] of let's say 1.7 times without making the refund, but were it to make the refund the [TIER] would drop to 1.2 times, or some other number, that would not impact on its need for additional rate relief. Because prospectively that [TIER] would come right back to the 1.7 prospective, expected basis if that's what its budget would suggest.
Finally, that very TIER requirement of the REA applies only for two of every three years. Knute P. Kurtz, an accountant and expert witness testifying for Dixie Electric, stated that the TIER is only required "in a two out of three year period." The refund order in this case would only reduce Dixie's TIER, at a maximum, for one year. Furthermore, as Mr. Frank Myers conceded, when Dixie in fact fell below the 1.5 TIER level in the successive years 1981 and 1982, the REA simply sent Dixie a letter asking for an explanation of what would be done to improve the TIER. It is our conclusion that the Commission's ordering this refund by Dixie will not place any of its mortgages or loans in jeopardy.
Dixie also argues that Order U-16281-B amounts to an award of a money judgment in favor of their customers, and that the Public Service Commission is without authority to render a money judgment. First of all, the cases cited by Dixie Electric for this proposition address whether the Public Service Commission is the proper forum for a private litigant to institute a private action against a regulated carrier or utility. See Parker Gravel Company, Inc. v. Louisiana Public Service Commission, 182 La. 524, 162 So. 64 (La.1935); Morrison Cafeteria of Louisiana, Inc. v. Louisiana Public Service Commission, 181 La. 932,160 So. 634 (1935); Louisiana Power and Light Company v. White, 302 So.2d 358 (La.App. 4th Cir.1974); Central Louisiana Electric Co. v. Point Coupee Electric Membership Corporation, 182 So.2d 752 (La.App. 2nd Cir.1966). Those cases do not bar the Public Service Commission from promulgating a refund order of general application pursuant to its plenary ratemaking jurisdiction.
Equally without merit is Dixie Electric's argument that the refund order is barred by the one year prescriptive period found in La.R.S. 45:1198. That statute provides:
§ 1198. Violation of commission's order; suits for damages
If the persons mentioned in R.S. 45:1196 as subject to the control of the commission, do not comply with an order *1010 of the commission for the payment of money within the limit fixed in the order, the complainant, or any person for whose benefit the order was made, may file in a court, in the judicial district in which he resides, or in which is located the principal operating office of the carrier, or through which the road or line of the carrier runs, a petition setting forth briefly the causes for which he claims damages, and the order of the commission in the premises. The suit shall proceed in all respects as other civil suits for damages, except that on the trial the finding and order of the commission shall be prima facie evidence of the facts therein stated. If the petitioner prevails finally he shall be allowed a reasonable attorney's fee, to be taxed and collected as part of the costs of the suit. All complaints for the recovery of damages shall be filed with the commission within one year from the time the cause of action accrues, and a petition for the enforcement of an order for the payment of money shall be filed in the court within one year from the date of the order. (Emphasis added.)
Dixie argues that because the refund by Cajun to Dixie was made in June of 1980, the one year prescriptive period began to run at the latest at that time; and thus the Public Service Commission was barred by prescription from issuing the refund order in 1984.
This one year prescription statute is inapplicable in the present situation. It only applies when a person for whose benefit an order is made petitions the Commission claiming damages premised on the utility's non-compliance with the order of the Commission. The prescriptive bar has no application to any time lapse preceding the Commission's action or order. That one year prescriptive period was not intended to deprive the Public Service Commission of the power to initiate its own investigation of a utility's operations and make appropriate regulatory orders.
Although not raised in Dixie's brief, it is appropriate to address two allegations raised in Dixie's petition for review to the Nineteenth Judicial District Court. The petition alleged:
* * * * * *
(b) The Commission's order will require Petitioner to incur debt, i.e., borrow the principal amount of the rebate, $896,020.32, at 12 percent interest by using the short term line of interest with the Jackson Bank for Cooperatives in January, 1985, and through approximately September, 1985, to cover the cost of said refund; such borrowing would cost Petitioner approximately $80,000.00 in interest expense;
(c) The incurrence of the additional debt would cause Petitioner's equity ratio to drop below 20 percent to 9.86 percent.
Neither before the Public Service Commission nor before the district court did Dixie submit evidence to support either of the above allegations. We, therefore, find no need to address them. In all events these allegations alone cannot support a conclusion that the Public Service Commission's refund order was "arbitrary and capricious."
Decree
For the foregoing reasons, the judgment of the district court is reversed and the matter is remanded to the Louisiana Public Service Commission for such action as is consistent with this opinion and with the reinstated orders of the Public Service Commission, Number U-16281 dated November 20, 1984, and Number U-16281-B, dated March 4, 1985.
DISTRICT COURT JUDGMENT REVERSED; REMANDED TO THE LOUISIANA PUBLIC SERVICE COMMISSION.
FORET, J., dissents.
NOTES
[*] Judge J. Burton Foret, participated in this decision as Associate Justice ad hoc in place of Justice Luther F. Cole, recused.
[1] The Public Service Commission ordered Dixie to refund the money through a line item reduction in the power cost adjustment for the month of December, 1984. That is, each customer would receive a credit on his utility bill for that month. The Public Service Commission noted that this procedure would return the overcharges to the customers in the same way as the overcharges were collectedthrough charges on the utility bill.
[2] Plus $129,177.46 of interest.
[3] Unlike an investor owned utility, an electric cooperative is "an association which furnishes [electric] service without entrepeneur profit and which is owned and controlled on a substantially equal basis by those for whom the association is rendering service." I. Packel, The Law of Cooperatives 2 (1956). The customers are members of the cooperative.
[4] Dixie purchased 100% of its power from Cajun at all times pertinent to this litigation.
[5] Apparently the purchase power adjustment clause in effect at the time of the refund from Cajun in June, 1980 was filed with and approved by the Rural Electrical Administration.
[6] La. Const. of 1921, art. VI, § 4 states in pertinent part:
§ 4. Public service commission; powers Section 4. The Commission shall have and exercise all necessary power and authority to supervise, govern, regulate and control all common carrier railroads, street railroads, interurban railroads, steamboats and other water craft, sleeping car, express, telephone, telegraph, gas, electric light, heat and power, water works, common carrier pipelines, canals (except irrigation canals) and other public utilities in the State of Louisiana
* * * * * *
The power, authority, and duties of the Commission shall affect and include all matters and things connected with, concerning, and growing out of the service to be given or rendered by the common carriers and public utilities hereby, or which may hereafter be made subject to supervision, regulation and control by the Commission.... The right of the Legislature to place other public utilities under the control of and confer other powers upon the Louisiana Public Service Commission respecting common carriers and public utilities is hereby declared to be unlimited by any provision of this Constitution.
[7] La.R.S. 45:121 states in relevant part:
The term "electric public utility" as used in this Chapter means any person furnishing electric service within this state, the parish of Orleans excepted, including any electric cooperative transacting business in this state....
[8] Prior to 1970, La.R.S. 12:426 read as follows:
Cooperatives transacting business in this state pursuant to this Part shall be exempt in all regards from the jurisdiction and control of the Public Service Commission of this state. That section was amended by 1970 La. Acts 34,
§ 3 to state:
Cooperatives transacting business in this state pursuant to this part shall be subject to the jurisdiction and control of the Public Service Commission in the same respects as other suppliers of electricity included within the term "electric public utility" as defined in R.S. 45:121, as amended by Acts 1970.
In 1983 by 1983 La. Acts 636, La.R.S. 12:426 was amended once again, no doubt in order to reflect the 1978 amendment to La.R.S. 45:1163, which divested the Louisiana Public Service Commission of jurisdiction over cooperatives. See infra 8 and accompanying text. Also, section 426 was amended in 1983 to allow members of an electric cooperative to elect to come under the jurisdiction of the Louisiana Public Service Commission. That section now states in pertinent part:
Jurisdiction of the Public Service Commission
A. Cooperatives transacting business in this state pursuant to this Part shall not be subject to the jurisdiction and control of the Public Service Commission except as provided in R.S. 45:1163 and Subsections B and C of this Section.
B. (1) Upon petition of not less than ten percent of the members of an electric cooperative, the board of directors of the electric cooperative shall order a referendum election to be held to determine whether the electric cooperative shall be subject to the jurisdiction of the Public Service Commission. A petition shall be completed within sixty days of commencement.
[9] La.R.S. 45:1163 states in pertinent part:
1163. Power to regulate rates and service.
A. The commission shall exercise all necessary power and authority over any street railway, gas, electric light, heat, power, waterworks, or other local public utility for the purpose of fixing and regulating the rates charged or to be charged by and service furnished by such public utilities; however, no aspect of direct sales of natural gas by natural gas producers, natural gas pipeline companies, natural gas distribution companies, or any other person engaging in the direct sale of natural gas to industrial users for fuel or for utilization in any manufacturing process shall be subject to such regulation by the commission. In addition, a schedule of rates of an electric cooperative shall not require approval of the commission if the schedule previously was approved by the board of directors of the electric cooperative and by the federal government or any agency thereof, nor shall the authority of the commission extend to the service rendered by electric cooperatives except to the extent provided in R.S. 45:123 and in orders of the commission promulgated to effectuate the purposes of R.S. 45:123. (Emphasis added.)
[10] In 1983, La.R.S. 12:426 was amended to allow the members of an electric cooperative to vote to come under the jurisdiction of the Commission.
[11] The broad authority of the Louisiana Public Service Commission, stipulated in La. Const. art. 4, § 21(B) included the power to order refunds. See Louisiana Power and Light Co. v. Louisiana Public Service Commission, 377 So.2d 1023 (La.1979).
[12] La.R.S. 12:420 states:
Section 420. Refunds to members
A. Revenues of a cooperative for any fiscal year shall first be used to:
(1) Defray expenses of the cooperative and of the operation and maintenance of its facilities during such fiscal year;
(2) Pay interest and principal obligations of the cooperative coming due in such fiscal year;
(3) Finance, or to provide a reserve for the financing of, the construction or acquisition by the cooperative of additional facilities to the extent determined by the board of directors;
(4) Provide a reasonable reserve for working capital;
(5) Provide a reserve for the payment of indebtedness of the cooperative maturing more than one (1) year after the date of the incurrence of such indebtedness in an amount not less than the total of the interest and payments in respect thereof required to be made during the next following fiscal year; and
(6) Provide a fund for education in cooperation and for the dissemination of information concerning the effective use of electric energy and other services made available by the cooperative.
B. Revenues for any fiscal year in excess of the amount necessary to provide for the items listed in Sub-section A shall, unless otherwise determined by a vote of the board of directors, be distributed by the cooperative to its members as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members paid for during such fiscal year. Nothing herein contained shall be construed to prohibit the payment by a cooperative of all or any part of its indebtedness prior to the date when the same shall become due.
[13] La.R.S. 12:426(C) provides:
When a majority of the members voting vote to place the cooperative under the jurisdiction of the Public Service Commission, the commission shall determine an effective date of the transfer which shall be within ninety days from the election. On and after the effective date of the transfer, the cooperative shall be subject to regulation by the Public Service commission. In fixing and regulating the rates to be charged by an electric cooperative, the commission shall set rates sufficient to meet the covenants of the cooperative's mortgage and loan agreements. Such rates shall not be fixed or regulated on a rate of return basis.
[14] TIER is an acronym for the term "Times Interest Earned Ratio," a ratio which is determined by adding the cooperative's long term interest expense to any profits that the cooperative had at the end of the year and dividing that sum by the cooperative's long term interest expense. In order to have a TIER of at least 1.5, the profits (margin) of a cooperative have to be at least one-half of a cooperative's long term interest expenses.
[15] And for present purposes we assume that such statutory provision does not impinge on the Commission's constitutional regulatory authority. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1831924/ | 579 So.2d 947 (1991)
Mary GUIDRY, et al.
v.
FRANK GUIDRY OIL COMPANY, et al.
Nos. 91 C 0078, 91 C 0111.
Supreme Court of Louisiana.
May 6, 1991.
Dissenting Opinion May 13, 1991.
*948 Jeffrey M. Bassett, Morrow, Morrow, Ryan & Bassett, Opelousas, for Mary Guidry, et al., plaintiff-applicant.
Gene S. Palmisano, New Orleans, for Exxon Corp. defendant-respondent.
D. Mark Bienvenu, Voohries & Labbe, Lafayette, for Frank Guidry Oil Co., defendant-respondent.
Dissenting Opinion of Justice Hall May 13, 1991.
WATSON, Justice.
This tort suit concerns the death of a 26 year old worker in an explosive fire. Writs were granted to consider the apportionment of fault between the parties and the effect of comparative fault by an employer with tort immunity.
FACTS
On May 13, 1985, at approximately 5:00 a.m., Jessie James Guidry was standing in the bed of a pickup truck filling a 55 gallon drum with diesel fuel. An explosion occurred, which resulted in Guidry's death from burns several hours after the accident. This suit was brought by his widow, Mary Knott Guidry, individually and on behalf of their two minor sons, Yancy Joseph Guidry and Jade Michael Guidry, to recover damages for the loss of their husband and father. At the time of the fatal accident, Guidry was in the course and scope of his employment with Louisiana Swabbing, an oilfield service company. The employer and its insurer, Pacific Marine *949 Insurance Company, intervened to recover the medical and funeral expenses and compensation benefits which had been paid. The diesel fuel had been supplied by Frank J. Guidry Oil Company, Inc., which is insured by Fireman's Fund Insurance Company. Guidry Oil is an exclusive distributor for Exxon Oil Corporation and carries the Exxon logo on its trucks.
Diesel fuel will not explode unless it is contaminated by gasoline. According to an Exxon advisory to its dealers:
While vapors in a gasoline tank are too rich to burn, and those in a diesel tank too lean to burn, a blend of gasoline and diesel fuel can produce vapor concentrations in the vehicle fuel tank that fall within the explosive range at normal ambient temperatures. Subsequent fueling with diesel fuel can build up static charge during the process and cause a spark that could violently ignite the vapors.
This phenomenon is essentially the same as that which has been experienced during `switch loading' of tank trucks (i.e., loading a fuel product of different characteristics than that previously contained in the tank). For example, when a tank truck containing vapors from a previous load of gasoline is loaded with a distillate fuel such as No. 2 diesel fuel or kerosene, explosions and fires can occur, due to sparks produced by static electricity generated in the pumping and filtering system. Exhibit P-21.
It is undisputed that the diesel fuel which decedent had been pumping was contaminated with approximately five percent gasoline, making it explosive. The truck used by Guidry Oil to make its last delivery of diesel to Louisiana Swabbing had five compartments which were used interchangeably for gasoline and diesel. The tanks were drained when the product was changed. Prior to Louisiana Swabbing's last diesel delivery, the hose on Guidry Oil's truck had been used to deliver gasoline. The gasoline contamination of the diesel apparently resulted from Guidry Oil's custom of carrying diesel and gasoline interchangeably in the same tanks, using the same drop hose or line for deliveries.
The employees of Guidry Oil indicated little understanding of the danger involved in mixing diesel and gasoline. Green, the manager of the company, and Menard, the driver who made the last diesel delivery to Swabbing, were not aware that one percent of gasoline makes diesel flammable.
What caused ignition of the explosion was disputed at trial. There was evidence that either decedent or a co-worker may have been lighting a cigarette; evidence that no one was smoking; and evidence that the most probable cause of the fire was static electricity.
The pickup was on Louisiana Swabbing's wash rack next to an above ground diesel tank. When Guidry tried pumping the diesel, there was no flow of fluid. A co-worker, Girod, observed that the pickup truck's tire was resting on the hose. Girod moved the truck forward a couple of feet to free the hose and left the motor running. The explosion occurred about two seconds later. Girod was only a foot from the truck, but he was not hurt. The entire back end of the truck burned, as Guidry jumped out in flames.
Louisiana Swabbing's tool pusher, Melancon, had just driven his pickup next to the wash rack when the explosion occurred. The truck and Guidry were engulfed in flames, and Melancon saw Guidry jump out, running and screaming. Two other co-workers, Quibedeaux and Caillier, were also at the scene. All four co-workers testified that Guidry was not smoking immediately prior to the accident. They also said that none of them were smoking. By the time the flames were extinguished, only Guidry's undershorts remained on his charred body.
The only evidence that Guidry may have been smoking was given by Savoy, a horse trainer, who testified that he saw two men standing near a gas tank next to a pickup truck at Louisiana Swabbing around 4:45 a.m. Neither man was standing in the bed of the pickup. Although it was still dark, Savoy saw a red glow from a lighted cigarette held by a man wearing dark pants. *950 Savoy went inside his barn, heard the explosion and came out to see that man on fire. According to the photographic evidence, Savoy was at least fifty yards from the site of the accident.
At one time, Louisiana Swabbing posted "no smoking" signs on its gas and diesel tanks but these were removed when the tanks were painted and had not been replaced.
Douglas Motty investigated the accident later that morning. The barrel which Guidry had been filling had the bottom blown out of it by the explosion, but the other barrel was relatively intact. Jessie Guidry's cigarettes and lighter, which he carried in his shirt pocket, were found on the ground behind the truck.
William B. Rawl, a staff technical advisor in the marketing department of Exxon, is responsible for Exxon's technical publications. Exxon publishes a manual for its distributors, which includes information on product precautions. On April 26, 1982, prior to this accident, Guidry Oil canceled its subscription to this free publication. Exxon Exhibit 4 is a "TECHNIGRAM" dated November 30, 1982, which states: "REMINDER: Never blend gasoline with diesel fuel. While vapors in a gasoline tank are too rich to burn, and those in a diesel tank too lean to burn, a blend of gasoline and diesel fuel can produce vapor concentrations that fall within the explosive range. These vapors may be violently ignited by sparks from static electricity generated during subsequent fueling with diesel fuel." Guidry Oil did not receive this warning, although its substance had been contained in earlier publications.
Dr. David L. Bernard, an expert in physics, admitted that diesel is not explosive without the addition of a flammable additive such as gasoline. He and John Kennedy, an expert in the cause of fires and explosions, thought the probable ignition source of this fire was a cigarette or a cigarette lighter.
Andrew T. Armstrong, an expert chemist specializing in the analysis of fire debris, testified that lighting a cigarette, static electricity or a running motor will not ignite pure diesel under any circumstances. Adding one or two percent gasoline to diesel will produce anything from a mild flash and burn to an explosion. Every drop of gasoline added to diesel lowers the flash point. If three to five percent gasoline is added to diesel, a cigarette is unlikely to cause an explosion. Sparks from a cigarette lighter might cause an explosion of gasoline contaminated diesel. Even on a humid day, pouring gasoline contaminated diesel into a drum can create static electricity. According to Armstrong, when the contaminated diesel went into the drum, the voltage buildup of static electricity was instantaneous.
The jury answered interrogatories, which found Guidry Oil 35 percent at fault, Jessie Guidry 45 percent at fault and Louisiana Swabbing 20 percent at fault. No fault was assigned to Exxon. The jury awarded $9,022 for medical and funeral expenses, $532,000 for loss of support and $526,000 in general damages, apportioned: $142,000 to Mary Guidry; $192,000 to Yancy Guidry; and $192,000 to Jade Guidry.
The trial court applied LSA-C.C. art. 2324 as it read at the time of this accident.
He who causes another person to do an unlawful act, or assists or encourages in the commission of it, is answerable, in solido, with that person, for the damage caused by such act.
Persons whose concurring fault has caused injury, death or loss to another are also answerable, in solido; provided, however, when the amount of recovery has been reduced in accordance with the preceding article, a judgment debtor shall not be liable for more than the degree of his fault to a judgment creditor to whom a greater degree of negligence has been attributed, reserving to all parties their respective rights of indemnity and contribution.
Because the jury found decedent's fault to be greater than the oil company's fault, the trial court did not add the fault of Louisiana Swabbing to that of Guidry Oil.
LSA-R.S. 23:1101(B), as amended, effective September 6, 1985, about four months after this accident, provides:
*951 Any person having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit against such third person to recover any amount which he has paid or becomes obligated to pay as compensation to such employee or his dependents. The recovery allowed herein shall be identical in percentage to the recovery of the employee or his dependents against the third person and, where the recovery of the employee is decreased as a result of comparative negligence, the recovery of the person who has paid compensation or has become obligated to pay compensation shall be reduced by the same percentage.
On the issue of whether the worker's compensation intervention claim of Pacific Marine Insurance Company should be reduced by comparative negligence, the trial court concluded that the 1985 amendment was substantive and should not be applied retroactively. The amount awarded for medical and funeral expenses was changed to the stipulated sum of $9,122.44.
Plaintiffs received judgment against Frank J. Guidry Oil Company, Inc. and Fireman's Fund Insurance Company for 35 percent of the monetary awards made by the jury. The intervention of Pacific Marine Insurance Company was granted and the compensation insurer was allowed recovery of all sums paid until the time of judgment and a credit against all future compensation.
The court of appeal amended the judgment by allocating Louisiana Swabbing's 20 percent of fault between plaintiffs and Guidry Oil "... in proportion to their previously determined degrees of fault (35/80 and 45/80)," making Guidry Oil's portion of the 20 percent fault 8.75 percent and plaintiffs' share 11.25 percent. Thus, Guidry Oil was responsible for 43.75 percent of plaintiffs' damages. Guidry v. Frank J. Guidry Oil Co., Inc., 572 So.2d 607 at 612 (La.App. 3d Cir.1990). Writs were granted to consider the judgment of the court of appeal. 575 So.2d 381 (La.1991).
STRICT LIABILITY
The jury was charged on strict liability as to Exxon and apparently concluded that manufacturer Exxon was not responsible for the defective condition of the diesel supplied to Louisiana Swabbing. There was a reasonable factual basis for that determination. The evidence indicates that the diesel was not contaminated and unreasonably dangerous when it left the control of Exxon. Exxon was aware of the highly dangerous and flammable nature of gasoline adulterated diesel and repeatedly warned its distributors.
The jury was not charged that Guidry Oil, the supplier of the diesel, might be strictly liable. However, a commercial supplier who sells a product in a defective and unreasonably dangerous condition is strictly liable for harm caused by the defect, even if the supplier was not negligent.
In order to recover from Guidry Oil as supplier of a defective product, plaintiffs had to prove that: (1) the injury or damage resulted from the condition of the product; (2) the condition made the product unreasonably dangerous in normal use; and (3) the condition existed at the time the product left the control of the supplier. Bell v. Jet Wheel Blast, Div. of Ervin Ind., 462 So.2d 166 (La.1985).
Jessie Guidry's death resulted from the explosive nature of the diesel fuel supplied by Guidry Oil Company. The diesel fuel was contaminated with gasoline and defective, making it unreasonably dangerous in composition. Halphen v. Johns-Manville Sales Corp., 484 So.2d 110 (La. 1986). Without considering the strict liability aspect of Guidry Oil's fault, the jury could not properly quantify the comparative fault of that defendant and decedent. See Picou v. Ferrara, 483 So.2d 915 (La. 1986).
Supplier Guidry's haphazard attitude toward safety is best illustrated by its cancellation of a free safety publication published by Exxon. Adulteration of the fuel served no useful purpose, and it could have been easily prevented. Guidry Oil had been warned of the danger but ignored the *952 warnings and put a traveling bomb on the public highways. Seventy percent of the fault for this accident must be assessed to Guidry Oil. Gonzales v. Xerox Corp., 320 So.2d 163 (La.1975).
DECEDENT'S COMPARATIVE FAULT
Because the jury was not properly charged, it did not correctly evaluate the parties' comparative fault. Since the jury was erroneously instructed, its findings are tainted and entitled to no weight. Picou, supra. Defendants did not prove the 45 percent of fault assigned to decedent; the jury's conclusion is clearly wrong. Smith v. Travelers Ins. Co., 430 So.2d 55 (La. 1983).
As to the cause of the explosion, the most likely hypothesis, consistent with the timing of the explosion, Exxon's warnings, and the testimony of expert Armstrong, is that moving the pickup truck tire off the diesel line caused a surge of fuel, which was ignited by static electricity. However, the jury apparently concluded that decedent lit a cigarette as he was pumping the contaminated diesel fuel and set off the explosion. Although the diesel would not have ignited if it had not been defective, the jury may have thought that ordinary prudence required decedent to refrain from smoking in the presence of fuel.
Assuming that defendants proved decedent's ordinary negligence combined with the defective diesel to cause the explosion, a 45 percent reduction in the recovery of his survivors serves no public purpose. It reduces the supplier's economic incentive to control the quality of its product. Conversely, it provides no greater incentive for employees to refrain from smoking than was furnished by decedent's horrible death. See Bell, supra.
Applying the factors in Watson v. State Farm Fire and Cas. Ins. Co., 469 So.2d 967 (La.1985), any negligence by decedent resulted from inadvertence. Lighting a cigarette, an habitual act, represented only a momentary lapse of attention. In the presence of inert diesel, decedent's action would have presented no danger. There was a risk only because the diesel fuel was contaminated, adulterated and dangerous. Being ignorant of the diesel's hidden defect, decedent did not assume the risk of that defect. See Rozell v. Louisiana Animal Breeders Co-op., 496 So.2d 275 (La. 1986).
Decedent was in an inferior position, vis-a-vis Guidry Oil, as an employee who was unaware of the product's defect. Under these circumstances, any ordinary negligence of the deceased employee in lighting a cigarette must be weighed against the greater fault of the supplier that marketed a defective and explosive product. Bell, supra. Guidry Oil is strictly liable for supplying a defective product. Decedent's comparative fault cannot be greater than ten percent. See Turner v. New Orleans Public Service, Inc., 476 So.2d 800 (La. 1985). Compare Bell, supra; Thompson v. Tuggle, 486 So.2d 144 (La.App. 3d Cir. 1986), writ denied, 489 So.2d 919; Lanclos v. Rockwell Intern. Corp., 470 So.2d 924 (La.App. 3d Cir.1985), writ denied, 477 So.2d 87; and Robertson v. Superior PMI, Inc., 791 F.2d 402 (5th Cir.1986).
NEGLIGENCE OF THE EMPLOYER
Louisiana Swabbing negligently failed to post no smoking signs on its fuel tanks. Adopting the jury's apparent conclusion that a cigarette or cigarette lighter ignited the explosion, some fault can be assigned to Louisiana Swabbing. The general lack of safety precautions or instructions furnish a reasonable evidentiary basis for the jury's conclusion that Louisiana Swabbing was twenty percent at fault. Unlike decedent, Louisiana Swabbing could deal on an equal basis with Guidry Oil Company.
The rights and remedies of an employee in the Louisiana compensation scheme exclude all other rights and remedies against the employer. LSA-R.S. 23:1032. The employee retains his right to tort recovery against a negligent third party. LSA-R.S. 23:1101. The employer who pays compensation also has the right to bring suit against a negligent third party or to intervene in an employee's suit. LSA-R.S. 23:1101-02. When there is a suit against a *953 negligent third party and damages are recovered, the claim of the employer for repayment of compensation has priority over that of the injured employee or his surviving dependents. LSA-R.S. 23:1103.
Other jurisdictions are divided on the issue of whether an employer's negligence can be considered in an employee's suit against a third party tortfeasor. The conflict between a scheme of comparative negligence and an employer's tort immunity under worker's compensation was recognized in Heckendorn v. Consolidated Rail Corp., 502 Pa. 101, 465 A.2d 609 (1983). Heckendorn held that comparative negligence does not allow consideration of an employer's negligence. Also see Beach v. M & N Modern Hydraulic Press Co., 428 F.Supp 956 (D.Kan.1977); Arctic Structures, Inc. v. Wedmore, 605 P.2d 426 (Ala. 1979); Thompson v. Stearns Chemical Corp., 345 N.W.2d 131 (Iowa 1984); Ramos v. Browning Ferris Industries, 103 N.J. 177, 510 A.2d 1152 (1986); and Port Auth. v. Honeywell Prot. Serv., 222 N.J.Super 11, 535 A.2d 974 (1987).
Wisconsin has adopted the other position: failure to have a jury consider an employer's negligence in apportioning fault is reversible error. Connar v. West Shore Equipment of Milwaukee, 68 Wis.2d 42, 227 N.W.2d 660 (1975). Also see Keefer v. Al Johnson Construction Co., 292 Minn. 91, 193 N.W.2d 305 (1971); Scales v. St. Louis-S.F. Ry. Co., 2 Kan.App.2d 491, 582 P.2d 300 (1978); Pocatello Ind. Park Co. v. Steel West, Inc., 101 Idaho 783, 621 P.2d 399 (1980); and McDevitt v. Terminal Warehouse Co., 346 Pa.Super 186, 499 A.2d 374 (1985). Professor Arthur Larson describes the arguments in the controversy as evenly-balanced. 2A Larson, Workmen's Compensation Law, Sec. 76.11 at 14-561 (1982).
Reed v. Shell Offshore, Inc., 872 F.2d 680 (5th Cir.1989), recognized that Louisiana's courts of appeal had refused to apportion fault between a solidary obligor and a statutorily immune employer. Reed held that the trial court did not err in refusing to submit the employer's liability to the jury. See Snyder v. Taylor, 523 So.2d 1348 (La.App. 2d Cir.1988), writ denied, 531 So.2d 267; Senez v. Grumman Flxible Corp., 518 So.2d 574 (La.App. 4th Cir.1987), writ denied, 521 So.2d 1151; and Chatelain v. Project Square 221, 505 So.2d 177 (La.App. 4th Cir.1987), writ denied, 508 So.2d 71. Reed followed these Louisiana cases.
In the employee/employer bargain of a worker's compensation scheme, the employee surrenders the possibility of tort recovery for the certainty of compensation and the employer receives tort immunity in exchange for paying compensation. "The claim of the employee against the employer is solely for statutory benefits; his claim against the third person is for damages. The two are different in kind and cannot result in a common liability." Third-Party Action Over Against Workers' Compensation Employer, 1982 Duke L.J. 483, 488. The compensation principle is independent of fault.
At the time of this accident, the only statutory authority for considering employer fault was an oblique reference in a jury instruction statute. LSA-C.C.P. art. 1812 had been amended by Act 534 of 1983 to allow a jury interrogatory asking:
"(2) If appropriate, whether another person, whether party or not, other than the person suffering injury, death, or loss, was at fault, and, if so:
(a) Whether such fault was a legal cause of the damages, and, if so:
(b) The degree of such fault, expressed in percentage."
Interpreting the amendment, Lemire v. New Orleans Public Service, Inc., 458 So.2d 1308 (La.1984), held that a jury interrogatory on the fault of a party immune from trial by jury was mandatory when supported by the evidence. However, the compensation principle excludes the concept of employer fault. It is not clear that the statutory language was intended to embrace employer fault. Since the statute does not specifically require juries to consider the comparative fault of employers, there is no express legislative directive on the issue. Extending the amendment to employers would violate the compensation *954 principle and cannot be done by implication. Thus, the trial court erred in having the jury quantify the fault of Louisiana Swabbing. See Franklin v. Oilfield Heavy Haulers, 478 So.2d 549 (La.App. 3d Cir. 1985), writ denied, 481 So.2d 1331 (1986).
Since the jury erred in assigning "fault" to Louisiana Swabbing, that percentage of fault must be disregarded. See Davis v. Commercial Union Ins. Co., 892 F.2d 378 (5th Cir.1990). Because decedent has 10 percent of fault and the third party tortfeasor has 70 percent of fault, the total fault must be apportioned between decedent and the tortfeasor at a one to seven ratio. See Robertson, The Louisiana Law of Comparative Fault: a Decade of Progress, forthcoming publication by the LSU Law Center. Decedent's fault is thereby increased to 12.5 percent and Guidry Oil Company's fault is increased to 87.5 percent.
CONCLUSION
For the foregoing reasons, the judgment of the court of appeal is amended to assess decedent with 12.5 percent comparative fault. The judgment of the court of appeal is also amended to assess Frank J. Guidry Oil Company, Inc. with 87.5 percent comparative fault.
It is ordered that there be judgment in favor of plaintiffs, Mary Knott Guidry, Yancy Joseph Guidry and Jade Michael Guidry, and against defendants, Frank J. Guidry Oil Company, Inc. and Fireman's Fund Insurance Company, for 87.5 percent of the damages awarded by the jury and the stipulated medical and funeral expenses. All costs are assessed to Guidry Oil and Fireman's Fund.
AMENDED AND RENDERED.
CALOGERO, J., dissents.
LEMMON, J., dissents and assigns reasons.
HALL, J., dissents in part and assigns reasons.
LEMMON, Justice, dissenting.
This case presents the issue of how to handle employer fault in comparative fault cases involving multiple tortfeasors.[1] The majority's resolution by disregarding employer fault and prohibiting the jury from quantifying such fault is attractive in its simplicity and ease of application. Nevertheless, the unfairness of allowing an employer whose fault may be as high as ninety-nine percent to escape tort liability completely, while recovering fully its worker's compensation lien, warrants a more indepth examination of these consequences which could not have been intended in the worker's compensation trade-off to the employer of compensation liability in exchange for tort immunity. Under the majority's result, a grossly negligent employer is immune from both tort and compensation liability because of the combined operation of the solidarity laws regarding the third party tortfeasor's liability and the literally interpreted compensation statutes regarding the employer's recovery against third parties.
The handling of employer fault in cases with multiple tortfeasors presents two principal questions: (1) whether the jury should allocate a percentage of fault to the employer and (2) how that percentage allocation should affect the rights of the plaintiff, the employer, and the remaining tortfeasor or tortfeasors.
On the first question, the jury should be required to allocate a percentage of fault to the employer when the evidence establishes the employer's fault. A jury which has been presented with evidence of fault by several persons should be required to deal in reality rather than to fictionalize proved fault out of the verdict. Telling the jury to quantify one hundred percent of the fault established by the evidence, but to disregard part of the evidence, not only confuses the jurors, but also encourages the jurors to guess at the reason for not quantifying this fault and perhaps to adjust *955 their quantification of the fault of others in accordance with that guess. Furthermore, a defendant whose fault is less than that of the plaintiff is entitled to escape solidary liability under La.Civ.Code art. 2324, and prohibiting the jury from considering the employer's fault could result in a distortion of the fault of others, thereby adversely affecting the less blameworthy defendant's entitlement. When a jury is presented with evidence of the fault of several persons, the procedure is simpler, fairer and more logical to require the jury to quantify one hundred percent of the fault established by the evidence.
What to do with the quantified fault of the employer is a much more difficult question. I would interpret La.Rev.Stat. 23:1101 B, which makes the employer's worker's compensation lien "identical in percentage to the recovery of the employee", as intended to apply only to an employer who is itself without fault. When the employer is also at fault, as in the present case, I would additionally reduce the employer's worker's compensation recovery by the employer's percentage of fault.[2]
La.Rev.Stat. 23:1032 grants the employer tort immunity from claims by the employee. La.Rev.Stat. 23:1101 B further grants the employer the right to recover, when a third party caused the employee's injury, the compensation benefits and medical expenses paid or payable by the employer. While Section 1011 B provides expressly for a decrease in the employer's amount of recovery against a third party tortfeasor by the percentage of the employee's fault, nothing in the worker's compensation statutes prohibits a reduction of the employer's compensation recovery by the proportionate degree of the employer's fault in accordance with general comparative fault principles.
The fairness of this resolution may be illustrated by an example. Suppose that the employee's injury is attributable ninety percent to the employer's unsafe premises and ten percent to the third party tortfeasor's fault. If the damages are $1,000,000 and the worker's compensation lien is $400,000, the result would be as follows:
Employer
No liability in tort.
Recovery of $40,000 on worker's compensation lien ($400,000 minus 90%).
Employee
Full recovery$400,000 paid in worker's compensation benefits and medical expenses, plus $600,000 paid by third party tortfeasor.
Third party tortfeasor
Total liability $640,000 ($600,000 to employee in tort damages, plus $40,000 to employer for 10% of worker's compensation lien).
In this example the employer who is ninety percent at fault has its worker's compensation lien recovery reduced by that amount, and the third party tortfeasor who is only ten percent at fault gets the benefit of a credit in the amount of recovery denied to the employer, while the employee gets the full recovery of his damages afforded by solidary liability principles.
In the present case this resolution would produce the following result:
Employer
No liability in tort.
Recovery of 70% of worker's compensation paid (reduced by 10% because of the employee's fault and an additional 20% because of the employer's fault).
Employee's dependents
90% recovery of $1,067,122.44 judgment by keeping worker's compensation benefits and funeral expenses, plus remainder paid by third party tortfeasor (minus 10% for the employee's fault).
*956 Third party tortfeasor
Total liability for $1,067,122.44, minus 10% reduction for the employee's fault and minus a credit for the 20% of the worker's compensation lien that the employer cannot recover.
In my opinion this is the fairest way to allocate the employer's fault consistent with the framework of the worker's compensation scheme and with solidary liability and comparative fault principles.
HALL, Justice, dissenting in part.
I respectfully dissent in part.
I agree with the majority opinion's conclusions as to the respective degrees of fault of the parties: decedent (employee) 10%, Guidry Oil (third-party tortfeasor) 70%, and Louisiana Swabbing (employer) 20%. Having reached this conclusion, which establishes the injured person's fault at a lesser degree than that of the third-party tortfeasor, there is no need to apportion the employer's fault. Under the provisions of LSA-C.C. Arts. 2323 and 2324 applicable to this case, plaintiffs are entitled to recover the full amount of their damages, reduced in proportion to the degree or percentage of negligence attributable to the decedent. Thus, plaintiffs are entitled to 90% of their damages.
The apportionment of the employer's fault on a ratio theory, as done by the majority, serves to reduce plaintiffs' recovery (from 90% to 87.5% in this case) by attributing a portion of the employer's fault to the employee contrary to the scheme of the workers' compensation law. It is also contrary to the scheme of the comparative fault law, which is to quantify the fault of all persons whose fault is a contributing cause of a plaintiff's injury. See LSA-C.C.P. Arts. 1812 and 1917; Lemire v. New Orleans Public Service, Inc., 458 So.2d 1308 (La.1984). The degree of fault of the parties, particularly that of the person suffering the injury which is the initial focus of a comparative fault determination, can only be realistically determined by considering the fault of all the persons involved in the accident, whether or not parties to the suit and whether or not liable to the plaintiffs for damages or liable to other tortfeasors for contribution.
Judgment should be rendered in favor of the plaintiffs for 90% of the damages awarded by the jury.
NOTES
[1] This case arose before the 1987 amendment to the solidary liability provisions of La.Civ.Code art. 2324.
[2] Under this interpretation the third party tortfeasor, in paying the judgment, would get a credit against his solidary liability for tort damages by the amount of the reduction of the employer's worker's compensation lien. (This credit is in addition to the reduction of the tortfeasor's liability based on the proportionate fault of the employee.) At the same time the injured employee would get full recovery by keeping part of the compensation paid or payable and by receiving the remainder of his damages from tort recovery against the third party tortfeasor. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1633523/ | 552 So. 2d 599 (1989)
Robert HEAD, d/b/a Metal Check, and Original Metal Check, Inc., a Texas Corp., formerly Metal Check, Inc., Plaintiffs-Appellees,
v.
Jerry WAGGONER and Janice Gates individually and as Incorporators of Metal Check, Inc., a Louisiana Corporation, and Metal Check, Inc., a Louisiana Corporation, Defendants-Appellants.
No. 20873-CA.
Court of Appeal of Louisiana, Second Circuit.
November 1, 1989.
Rehearing Denied December 1, 1989.
*600 James D. Caldwell, Jonesboro, for defendants-appellants.
Richard M. Lawrence, Prairieville, Philip Bohrer, Baton Rouge, for plaintiffs-appellees.
Before FRED W. JONES, Jr., SEXTON and LINDSAY, JJ.
LINDSAY, Judge.
The defendants, Jerry Waggoner and Metal Check, Inc., appeal from a trial court judgment granting a preliminary injunction in favor of the plaintiffs, Robert Head, d/b/a Metal Check, and Original Metal Check, Inc., a Texas corporation, formerly Metal Check, Inc., enjoining the defendants from using the trade name "Metal Check." For the following reasons, we amend the judgment of the trial court, and as amended, affirm.
FACTS
In 1973, Robert Head and a partner formed a company called Signal Testing, Inc. This company engaged in the business of industrial x-ray of welded metal joints in pipelines. In about 1974, Mr. Head hired Jerry Waggoner to work for this company. In 1975 or 1976, Mr. Head formed Metal Check, which was identical to Signal Testing except that it worked nonunion jobs, while Signal Testing worked only union jobs. Both Metal Check and Signal Testing used the same offices, equipment and personnel. Metal Check was incorporated in Texas in 1980 by three nominees of Mr. Head. The West Monroe offices of Metal Check and Signal Testing were housed in a building owned by the company of Mr. Head's partner in Signal Testing.
In late 1983, Mr. Head suffered a heart attack and was incapacitated for several months. At this time, Mr. Head turned over everyday operations of Metal Check to Mr. Waggoner. After his convalescence, Mr. Head apparently moved his personal offices to a building across the street.
As manager, Mr. Waggoner borrowed money in Metal Check's name. In 1980, also as manager, he applied for and obtained a radioactive material license in the name of Metal Check. In 1984 or 1985, he negotiated to buy Signal Testing, but the purchase did not occur because he failed to obtain the necessary financing. On January 21, 1985, Metal Check's Texas charter was forfeited due to its failure to pay the state franchise tax. In December, 1987, without Mr. Head's knowledge, Mr. Waggoner incorporated a company called "Metal Check of Louisiana, Inc."
In early March of 1988, Mr. Head accidentally discovered evidence of the formation of this corporation in the desk of Janice Gates, a secretary employed by Mr. Head to work for Signal Testing and Metal Check. The documents listed Mr. Waggoner as owner of the new Metal Check Corporation. Mr. Head confronted Mr. Waggoner with this discovery and fired him. Mr. Head also discovered bank statements for checking accounts at various banks in the name of Metal Check of Louisiana, and indications that accounts receivable of Metal Check in the amount of $221,000 had been diverted to these bank accounts. On March 17, 1988, about one week after his discharge by Mr. Head, Mr. Waggoner became an incorporator of yet another company, "Metal Check, Inc.," a Louisiana corporation. In April of 1988, Mr. Waggoner applied to the Louisiana Secretary of State to amend the name of "Metal Check of Louisiana, Inc.," to Northeast X-Ray Services, Inc.
*601 On June 15, 1988, the plaintiffs filed a petition for injunctive relief, seeking to prevent the defendants from using the trade name "Metal Check, Inc." or any variation thereof. Named as defendants were Mr. Waggoner, Ms. Gates, and Metal Check, Inc.
On June 30, 1988, the defendants filed exceptions of improper venue, unauthorized use of summary proceedings, and lack of procedural capacity. On October 7, 1988, the plaintiffs filed a first amending and supplemental petition to cure several of the alleged deficiencies in the original petition. In response to the defendants' exception of lack of procedural capacity, the plaintiffs amended their petition to provide that suit was brought by Mr. Head doing business as Metal Check, and "Original Metal Check, Inc., a Texas corporation, formerly Metal Check, Inc." (Apparently, Mr. Head could not reincorporate Metal Check in Texas under the name previously utilized because Mr. Waggoner had filed a reservation on that name.) On October 27, 1988, the defendants filed exceptions of lack of procedural capacity, no cause of action, and no right of action. On October 28, 1988, the plaintiffs were allowed to file into the record, proof of Original Metal Check's authorization to do business in Louisiana as of October 19, 1988.
On October 31, 1988, a hearing was held. The defendants' exception as to procedural capacity was dismissed by agreement of the parties as having been satisfied. The trial court overruled the two remaining exceptions of no cause and no right of action. In support of its request for preliminary injunction, the plaintiffs presented the testimony of Robert Head, David Nelson, Danny Schooley and Charles Taylor. Mr. Nelson testified that he was one of Metal Check's incorporators as a nominee of Mr. Head. He testified that Mr. Head owned the company. Mr. Schooley and Mr. Taylor testified as to their employment by Signal Testing and/or Metal Check. They testified that Mr. Head was the owner of Metal Check and that Mr. Waggoner was employed as its manager. The plaintiffs also called Mr. Waggoner on cross-examination.
The defense presented the testimony of James Spillers, Frederick Hightower, Janice Gates and Mr. Waggoner. Mr. Spillers, an accountant who kept the Metal Check books, testified that Mr. Waggoner hired him. He denied that Mr. Head hired him or requested the books and records. (On rebuttal, Mr. Head and a secretary for plaintiffs' counsel contradicted him on these two points. The secretary testified that Spillers admitted having the books and turning them over to Waggoner.) Hightower, the assistant vice president and cashier of People's Bank of Chatham, testified that Mr. Waggoner, identifying himself as president of Metal Check, opened a checking account for Metal Check in February of 1982. He also stated that Mr. Waggoner, who is now on the bank's Board of Directors, had obtained several loans for Metal Check.
Ms. Gates testified that she was originally Mr. Head's secretary, but that she currently worked for Waggoner's Northeast X-Ray Services. Mr. Waggoner testified he had a great deal of money invested in Metal Check and had equipment in its name. Also, he stated that he had a radioactive material license dated March 28, 1980, in Metal Check's name, which he still used. He claimed that when he obtained the license for Metal Check he was not aware that Mr. Head was using that name. He stated that Mr. Head "walked out" on the x-ray business and that he consequently assumed day-to-day operations without any instructions from anyone.
The trial court rendered judgment in favor of the plaintiffs. The court found that Mr. Waggoner was fully aware of Mr. Head's use of the trade name "Metal Check." The court stated that the defendants' use of the trade name in such a limited area of the industry caused confusion and infringed on the plaintiffs' rights. As an example of this confusion, the trial court referred to the license issued by the Louisiana Radiation Control Board. Although Mr. Waggoner applied for the license while an employee of Mr. Head, he is allowed to use it for his present company.
The trial court overruled the defendants' exceptions of no right and no cause of *602 action and granted a preliminary injunction against Waggoner and Metal Check, Inc., prohibiting them from using the trade name "Metal Check" or any similar variation thereof. As to the other defendant, Ms. Gates, the court found that she was merely Mr. Waggoner's employee and declined to render judgment against her. Judgment was signed November 22, 1988.
The defendants, Mr. Waggoner and Metal Check, Inc. appeal. They assert four assignments of error: (1) the trial court erred in granting judgment in favor of a party who allegedly was not a party to the suit at the time judgment was granted; (2) the trial court erred in overruling the exception of no cause of action; (3) the trial court erred in holding that the plaintiffs were entitled to exclusive use of a trade name; and (4) the trial court erred in granting injunctive relief against the use of a trade name where the trial court allegedly failed to make a finding of fraud.
PARTY IN JUDGMENT
The defendants contend that the trial court erred in rendering judgment in favor of "Metal Check," instead of "Original Metal Check." They argue that the plaintiffs' first supplemental and amending petition substituted "Original Metal Check, Inc." for "Metal Check, Inc."; thus, a judgment was rendered in favor of a party who was not a party to the suit at the time judgment was granted.
The two cases cited by the defendants are inapplicable. In Vicknair v. Home Indemnity, 273 So. 2d 542 (La.App. 1st Cir. 1973), the court held that no judgment could be rendered in favor of the plaintiff's husband who had never been a party plaintiff in the suit. In Mitchell v. Zeringue, 497 So. 2d 19 (La.App. 5th Cir.1986), the court found that a judgment had no effect because it was granted against a party who had already been dismissed from the suit pursuant to an exception of no cause of action.
The plaintiffs originally brought suit as Robert Head, d/b/a Metal Check, and Metal Check, Inc., a Texas corporation. The defendants filed several exceptions, including one for lack of procedural capacity, in which they allege that Metal Check, Inc., had forfeited its corporate charter in Texas in 1985 and it was not authorized to do business in Louisiana. However, the efforts of Metal Check, Inc., to have its Texas charter reissued were purposefully frustrated by Mr. Waggoner, who twice filed a reservation on that corporate name. Therefore, Mr. Head had the charter reissued in the name "Original Metal Check, Inc." Additionally, the corporation, under this modified name, qualified to do business in Louisiana as of October 19, 1988. Accordingly, the plaintiffs' first supplemental and amending petition reflected this name modification.
We agree with the plaintiffs that the name change served only to clarify and distinguish Mr. Head's corporation from that of Mr. Waggoner. It did not alter the parties to the suit. Further, the use of the name "Metal Check, Inc." in the judgment is a mere clerical error and is of no substantive effect.
This assignment of error has no merit.
EXCLUSIVITY OF USE
The defendants argue that the trial court erred in overruling its exception of no cause of action where the plaintiffs' petition for injunctive relief failed to specifically allege that the plaintiffs had acquired exclusivity in the use of the trade name "Metal Check."
Exclusivity of use is a prerequisite to an injunction in trade name cases. Givens Jewelers, Inc. v. Givens, 380 So. 2d 1227 (La.App. 2d Cir.1980), writ denied 383 So. 2d 800 (La.1980). However, LSA-R.S. 51:211(D) defines "trade name" as "a word, name, symbol, device or any combination thereof used by a person to identify his business, vocation or occupation and distinguish it from the business, vocation or occupation of others." Exclusivity of use by a person is implicit in this definition. It was not incumbent upon the plaintiffs to fully define the term in the petition. As to the exception of no cause of action, it was sufficient for the plaintiffs to allege that *603 "Metal Check" was the company's trade name.
This assignment of error has no merit.
CLASSIFICATION OF TRADE NAME
The defendants further contend on appeal that the trial court erred in holding that the plaintiffs were entitled to exclusive use of the trade name "Metal Check," where the trade name was merely descriptive of the service offered by Mr. Head's company.
The threefold object of the law of unfair competition (upon which plaintiffs relied for relief) is: (1) to protect the honest trader in business which fairly belongs to him; (2) to punish the dishonest trader who was taking his competitor's business away by unfair means; and (3) to protect the public from deception. Straus Frank Company v. Brown, 246 La. 999, 169 So. 2d 77 (1964).
The courts have held that a trade name which is only descriptive of the kind of business involved cannot be exclusively appropriated unless it has acquired a "secondary meaning by a long usage and thus come to exclusively identify the user's particular business. Home Beverage Service v. Baas, 210 La. 873, 28 So. 2d 481 (1947); Straus, supra.
Traditionally, federal courts have divided trade marks and trade names into four categories: (1) generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful. Engineered Mechanical Services, Inc. v. Applied Mechanical Technology, Inc., 584 F. Supp. 1149 (M.D.La.1984). A descriptive trade name identifies a characteristic or quality of an article or service. A suggestive trade name suggests, rather than describes, some particular characterics of the goods and services to which it applies and it requires a consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods or services. However, "[t]hese categories, like the tones in a spectrum, tend to blur at the edges and merge together. The labels are more advisory than definitional, more like guidelines than pigeonholes. Not suprisingly, they are somewhat difficult to articulate and to apply." Engineered Mechanical Services, Inc., supra.
The defendants argue that the nature of the business at issue is checking metal pipelines by using x-ray machines for structural failure. However, the plaintiffs persuasively argue that the business is that of industrial x-ray to examine pipe welds. Plaintiffs concede that had the trade name been something such as "Pipe Weld X-Ray Examination," it would have been descriptive and thus insusceptible of injunctive relief.
The defendants rely upon Metalock Corporation v. Metal-Locking of Louisiana, Inc., 260 So. 2d 814 (La.App. 4th Cir.1972) writ denied 262 La. 189, 262 So. 2d 788 (La.1972). In that case, the court stated that the word "Metalock" was descriptive of the service (a process of cold metal repair which involved "locking" pieces together). However, we note that in Engineered Mechanical Services, Inc., supra, a Louisiana federal district court faced the identical issue. It disagreed with Metalock Corporation, supra, finding instead that "Metalock" was suggestive, not descriptive.
We find that the trade name of "Metal Check" is not merely descriptive of the services offered by the plaintiff-company. Rather, we find that it is more suggestive, requiring the consumer to use his imagination to conclude what services are offered. Metal can be "checked" in a variety of ways. Also, one can examine all sorts of "metal" in various forms. The service at issue here is the x-ray examination of welded pipes. Certainly, the terms involved in the present suit are not as clear as "Pestaway," which informed the public that a company was engaged in pest control or extermination. Couhig's Pestaway Company, Inc. v. Pestaway, Inc., 278 So. 2d 519 (La.App. 3rd Cir.1973).
This assignment of error is without merit.
EVIDENCE OF FRAUD
The defendants argue that the trial court erred in granting injunctive relief against *604 them to prohibit their use of the trade name "Metal Check" where the trial court failed to make a specific finding of fraud.
Louisiana courts have held that a plaintiff who depends upon "secondary meaning" for his trade name cannot obtain injunctive relief unless he proves fraud on the part of the defendant. Home Beverage Service, supra; Straus Frank Company, supra; Couhig's Pestaway Company, Inc. v. Pestaway, Inc., supra. As previously mentioned, a plaintiff relies upon "secondary meaning" when the trade name is descriptive. As we have already found that the trade name "Metal Check" is not merely descriptive, plaintiffs apparently are not required to prove fraud by the defendants.
However, even were we to assume that the trade name was descriptive and a showing of fraud was thus required under the doctrine of secondary meaning, we find that the plaintiffs presented ample evidence of fraud by Mr. Waggoner. Although the trial court failed to use the word "fraud," its written reasons for judgment clearly demonstrate that it found credible evidence of fraud in the record, particularly since the trial court found that Mr. Waggoner "was fully aware of Mr. Head's use of the name `Metal Check'...."
The evidence presented at trial demonstrates that Mr. Waggoner was employed by Mr. Head's company, Signal Testing, Inc., beginning in 1974. Within two years, Mr. Head was using "Metal Check" to secure non-union jobs. In 1980, Mr. Head orchestrated the incorporation of Metal Check in Texas. In 1980, identifying himself as "manager," Mr. Waggoner applied for a radioactive material license in Metal Check's name. In late 1983, Mr. Head was strickened by a heart attack, consequently resulting in Mr. Waggoner's assumption of everyday operations of Metal Check and Signal Testing. Thereafter, in 1987, Waggoner, who was still employed by Head, incorporated "Metal Check of Louisiana, Inc." In March of 1988, Mr. Head discovered this action and fired Mr. Waggoner, who almost immediately incorporated another entity, "Metal Check, Inc." The following month, Waggoner applied to change the name of "Metal Check of Louisiana, Inc." to "Northeast X-ray Services, Inc."
Also, the evidence indicates that after dismissal by Mr. Head, Mr. Waggoner filed a change of address form with the U.S. Postal Service to have Metal Check's mail sent to him at his new office address. The testimony further indicated that some funds for Head's Metal Check were diverted to accounts for Waggoner's company. Mr. Waggoner continued to use for his own benefit a Metal Check radioactive material license which he originally obtained as an employee of Head's company. Twice he blocked Head's attempts to reincorporate Metal Check, Inc. in Texas.
Based on the foregoing, we can reach only one conclusionthat the plaintiffs proved fraud on the part of Waggoner, who deliberately used the plaintiffs' trade name for his own gain. There is no serious question that the defendants intentionally tried to capture the plaintiffs' trade name and compete against them in an identical business. The substance of the trade name utilized by the defendants is identical to that of the plaintiffs. The likelihood of the public being confused or deceived by the similarity in names is undeniable.
This assignment of merit is also without merit.
CONCLUSION
We amend the judgment to clarify that the name of the plaintiff-corporation is "Original Metal Check, Inc." The judgment of the trial court granting injunctive relief in favor of the plaintiffs is otherwise affirmed. All costs are assessed to defendants-appellants.
AMENDED, AND AS AMENDED, AFFIRMED.
ON APPLICATION FOR REHEARING
Before FRED W. JONES, Jr., SEXTON, LINDSAY, NORRIS and HIGHTOWER, JJ.
Rehearing denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1733546/ | 860 S.W.2d 681 (1993)
Houston Madison WISENBAKER, Appellant,
v.
The STATE of Texas, Appellee.
No. 3-91-443-CR.
Court of Appeals of Texas, Austin.
August 11, 1993.
*683 Roy E. Greenwood, Austin, for appellant.
Ronald Earle, Dist. Atty., Patricia Robertson, Asst. Dist. Atty., Austin, for appellee.
Before CARROLL, C.J., and ABOUSSIE and JONES, JJ.
CARROLL, Chief Justice.
A jury found Houston Madison Wisenbaker guilty of the failure to remit motor fuel taxes and assessed punishment, enhanced by prior felony convictions, at seventeen years' imprisonment and a $10,000 fine. Finding error during the punishment phase, we will reverse the judgment and remand the cause for a new hearing on punishment.
BACKGROUND
Appellant operated two truck-stop businesses located along Interstate-10 between San Antonio and Houston. The State contends appellant devised and implemented a scheme to avoid paying state motor fuel taxes on diesel fuel sold at these facilities. Appellant and D.H.B. Petroleum, Inc., a bonded supplier of diesel fuel, agreed that D.H.B. would sell fuel to the truck stops tax-free. As authorization for the tax-free sales, appellant provided D.H.B. with a supplier permit number for B.B. Fuels, Inc. B.B. Fuels was the ostensible intermediary for the transactions; however, the fuel was delivered by D.H.B. directly to the truck stops.
Appellant further insulated himself from the transactions by setting up a trust to control the truck stops and by appointing his brother-in-law, Rafael Gonzales, as trustee. Additionally, most of the truck stops' dealings with D.H.B. were conducted by appellant's employee, Sonny Adams. Later, some tax-free fuel sales to the truck stops were made pursuant to a permit issued to North Wey Trading Company and pursuant to a "signed statement" executed by K.C. Gathering Company. Some tanker truck manifests were falsified to show that deliveries to the truck stops were made to other locations.
From September 1987 to June 1988, over two million gallons of diesel fuel were sold by D.H.B. to the truck stops through B.B. Fuels, North Wey, and K.C. Gathering. The fuel was sold tax-free by D.H.B. and later sold by the truck stops at the retail price to truck drivers. State motor fuel taxes were never paid to the State on the fuel sold from the two truck stops. An investigation of D.H.B. by the Comptroller of Public Accounts in turn led to an investigation of B.B. Fuels. The investigation revealed that over four hundred thousand dollars in motor fuel taxes were owed to the State on fuel sold at the truck stops.
B.B. Fuels's tax-free permit indicated that its owner was Steve A. Smith. Smith apparently was never involved in these transactions, and it is unclear whether such a person *684 exists. The social security number provided for Smith on B.B. Fuels's permit application is assigned to a different person, a child living in Minnesota. Comptroller investigators could not locate Smith or any other official of B.B. Fuels. Appellant had previously mentioned, in a joking manner, that he intended to start a company called "B & B Fuels" or "B & B Oil Company" and that the initials stood for Bob Bullock, who at that time was the Comptroller of Public Accounts.
In the indictment, the State alleged a single offense: On or about April 25, 1988, appellant, "while acting as a supplier of diesel fuel, intentionally and knowingly fail[ed] to remit to the Comptroller of Public Accounts of the State of Texas, diesel fuel tax funds collected by [appellant]" that he was required "to remit ... under Chapter 153, Section 153.221(a) of the Texas Tax Code." (Emphasis added). See Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.221(a), 1981 Tex.Gen.Laws 1490, 1623-24 (Tex.Tax Code Ann. § 153.221(a), since amended); Tex.Tax Code Ann. § 153.403(29) (West 1992).[1] These charges were enhanced by prior felony convictions set out in the indictment. At trial, the jury returned a guilty verdict and imposed a sentence of seventeen years' imprisonment and a fine of $10,000. Appellant urges fifteen points of error.
DISCUSSION
The Tax Code sets out a complicated system for the taxation of motor fuel transactions. Appellant has attempted to circumvent this system. Generally, under the motor fuel tax provisions, all diesel fuel sold in Texas is subject to the tax unless an exemption applies. The provisions are structured so that all diesel fuel that is ultimately used for a nonexempt purpose is taxed at some point in the distribution chain. Ultimately, the "user" bears the tax. See Tex.Tax Code Ann. § 153.206(a)-(c) (West 1992). There is a presumption that, absent documentation showing an applicable exemption, a sale is for a taxable purpose. See Tex.Tax Code Ann. § 153.013(a) (West 1992).
Certain fuel transactions are tax exempt. In the immediate cause, only the exemptions for sales between permitted suppliers and sales pursuant to a "signed statement" are at issue. See Tex.Tax Code Ann. § 153.205(c) (West 1992); Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.205, 1981 Tex.Gen.Laws 1490, 1616-17 (Tex. Tax Code Ann. § 153.205, since amended). A sale between two permitted suppliers is a transaction where the buyer is a permitted supplier who plans to resell the fuel to another nonconsumer. This exemption simplifies wholesale transactions. Depending on the nature of the resale, the subsequent transaction may or may not be taxable. A sale pursuant to a "signed statement" is a sale where the buyer provides a sworn document stating that the fuel will be used only for nonhighway use and will not be resold. See Tax Code § 153.205(a). This provision facilitates sales to entities, such as agricultural businesses, that buy and use fuel in large quantities for exempt purposes.
In most instances, a retail dealer will not be able to buy fuel tax-free because the dealer will not hold a supplier permit and will not be able to provide a signed statement that the fuel will be used for an exempt purpose. The dealer may recoup the tax it has paid to its supplier by passing through the tax in the retail price of the fuel. If the dealer resells the fuel in an exempt transaction, the dealer may apply to the State for a refund of taxes it has paid through its supplier. Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.222(a), 1981 Tex.Gen.Laws 1490, 1624 (Tex.Tax Code Ann. § 153.222(a), since amended). If a dealer has not paid the tax to its supplier, however, the dealer must collect tax on all nonexempt sales and pay those taxes to the State. Tax Code § 153.206(b).
The last two transactions in the distribution chainthe sale by the final supplier to the dealer and the sale by the dealer to a consumerusually will be taxable. See Cannon Ball Truck Stop, Inc. v. Mobil Oil Corp., 501 S.W.2d 927, 929 (Tex.Civ.App.Houston *685 [14th Dist.] 1973, writ ref'd n.r.e.). The key to appellant's scheme was the elimination of a clearly identifiable transaction between the final supplier and the truck stops.
Sufficiency of the Evidence
In his fifth point of error, appellant contends the evidence is insufficient to support the convictions because there is no evidence to show that he was a "supplier" of diesel fuel, and proof he was "acting as a supplier" is insufficient for prosecution.
The critical inquiry on review of the legal sufficiency of the evidence to support a criminal conviction is whether the record evidence could reasonably support a finding of guilt beyond a reasonable doubt. This Court does not ask whether it believes that the evidence at trial established guilt beyond a reasonable doubt. Instead, the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S. Ct. 2781, 2788-89, 61 L. Ed. 2d 560 (1979); Griffin v. State, 614 S.W.2d 155, 159 (Tex.Crim.App.1981).
Appellant is charged with the failure to remit taxes he collected "while acting as a supplier." Accordingly, the State was limited to proving appellant was criminally liable as a "supplier." See Roberts v. State, 513 S.W.2d 870, 871 (Tex.Crim.App.1974); Easley v. State, 167 Tex. Crim. 156, 319 S.W.2d 325, 326 (Tex.Crim.App.1959). The elements of the offense charged by the State are as follows: (1) the defendant is a supplier, as defined under the Tax Code, (2) who intentionally and knowingly (3) sold diesel fuel in a taxable transaction and (4) failed to remit the fuel tax collected on that sale to the State.
The theme of the State's case is that appellant set up B.B. Fuels as a sham corporation and that appellant, acting as a supplier under B.B. Fuels's permit, failed to remit taxes collected from the sale of fuel to the truck stops. The State apparently asserts that appellant assumed two roles in these transactions: intermediate supplier and dealer. This gives rise to two potential scenarios of tax liability. First, appellant as a dealer failed to remit taxes he collected from sales to the public. Second, appellant as a supplier failed to remit taxes he collected from sales to himself as a dealer. In this case, the State, by the indictment, attempted to prove only the second scenario.[2]
The real issue in this case is not whether appellant was liable for the taxes, but whether he was liable as a supplier, as alleged by the State. It is undisputed that appellant was a dealer in his operation of the retail truck stops. A "dealer" is a "person who is the operator of a service station or other retail outlet and who delivers motor fuel into the fuel supply tanks of motor vehicles or motorboats." Tex.Tax Code Ann. § 153.001(3) (West 1992). However, appellant disputes that he was also a supplier of diesel fuel.
A "supplier" is defined as a person who:
(A) refines, distills, manufactures, produces, or blends for sale or distribution diesel fuel in this state;
(B) imports or exports diesel fuel other than in the fuel supply tanks of motor vehicles;
(C) sells or delivers diesel fuel in bulk quantities to dealers, users, aviation fuel dealers, or other suppliers; or
(D) is engaged in the business of selling or delivering diesel fuel in bulk quantities to consumers for nonhighway use.
Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.001(23), 1981 Tex.Gen.Laws 1490, 1600 (Tex.Tax Code Ann. § 153.001(23), since amended; now at Tex.Tax Code Ann. *686 § 153.001(22)). The State argues subsection C is applicable to the immediate facts.
Appellant contends that he could not be a supplier because he neither has a permit required of a supplier nor is he bonded as a supplier. See Act of June 10, 1981, 67th Leg., R.S., ch. 389, sec. 1, § 153.207(a), 1981 Tex.Gen.Laws 1490, 1618 (Tex.Tax Code Ann. § 153.207(a), since amended); Act of July 21, 1987, 70th Leg., 2d C.S., ch. 6, art. 3, § 2, 1987 Tex.Gen.Laws 37, 39-41 (Tex.Tax Code Ann. § 153.218, since amended). The permit and bond requirements, however, are not definitive. Instead, they create obligations that must be met for a supplier to operate legally as such in Texas. The failure of appellant to comply with these requirements does not negate his status as a supplier. Rather, the type of activities or transactions in which the entity engages determines whether it is a supplier. Appellant has also attempted to distinguish being prosecuted as a "supplier" and being prosecuted for "acting as a supplier." We fail to see the distinction; a supplier is defined as such under the Code by its actions. We conclude that the definition of a supplier set out above, is the controlling test.
Appellant argues that no evidence exists that he engaged in any activities that would cause him to be a supplier under the above definition. We disagree. Invoices presented at trial document the tax-free sales of diesel fuel from D.H.B. to B.B. Fuels. D.H.B.'s president, David Burnett, testified that he solicited business from appellant who provided him with B.B. Fuels's permit number for the tax-free sales. Burnett testified that he believed appellant owned B.B. Fuels and North Wey and that on occasion appellant personally paid for fuel sold to B.B. Fuels. Appellant's signature appears on tax reports filed by North Wey. Burnett testified that he also received from an employee of appellant a "signed statement" executed by K.C. Gathering Company for tax-free sales of diesel fuel and that, in fact, this fuel was delivered to the truck stops for retail sale. Two individuals testified that appellant stated in a joking manner that he was going to start a company called "B & B or B.B. Oil" or "B.B. Fuels." Blank B.B. Fuels invoices were seen in appellant's office. There was testimony that profits from the sale of fuel at the truck stops were diverted to appellant's personal bank accounts. When the Comptroller demanded payment of the truck stops' tax obligation from Rafael Gonzales, appellant contacted the Comptroller and admitted that he was the individual to be contacted regarding this matter. Finally, one Comptroller investigator testified that, in his opinion, B.B. Fuels was a sham corporation set up by appellant to avoid paying motor fuel taxes. We conclude that sufficient evidence exists whereby a jury could find beyond a reasonable doubt that appellant acted as a supplier in these transactions.
The next issue is whether there is sufficient evidence that appellant engaged in a taxable transaction whereby he collected motor fuel taxes. In other words, can a person who is both a dealer and a supplier buy fuel pursuant to a tax-free permit, sell that fuel tax-included to users, and be held liable for the taxes as a supplier, rather than as a dealer, absent any proof of an intermediate transfer of the fuel? Although there is no direct evidence of a transfer of diesel fuel by appellant as a supplier to appellant as a dealer, we may presume that this transaction did occur. Under section 153.013 of the Tax Code,
[a] ... supplier ... who fails to keep a record, issue an invoice, or file a report required by this chapter, is presumed to have sold or used for taxable purposes all motor fuel shown by an audit by the comptroller to have been sold to the ... supplier.... Motor fuel unaccounted for is presumed to have been sold or used for taxable purposes.... If a tax claim, as developed from this procedure, is not paid... the claim and any audit ... are evidence in any suit or proceeding filed by the attorney general, and are prima facie evidence of the correctness of the claim or audit.
Tex.Tax Code Ann. § 153.013(a) (West 1992) (emphasis added). Appellant failed to file reports or maintain records to show that his transactions as a supplier were exempt. At trial, appellant offered no evidence to rebut the presumption. Accordingly, there is sufficient *687 evidence whereby a jury could find beyond a reasonable doubt that appellant sold diesel fuel in a taxable transaction.
Finally, we conclude that sufficient evidence exists whereby a jury could find beyond a reasonable doubt that the tax was never paid on the fuel sold from the truck stops and that appellant acted intentionally or knowingly in failing to remit these funds. We overrule appellant's fifth point of error.
In his sixth point of error, appellant contends the evidence is legally insufficient to show he was responsible for the tax because the statute placed tax liability exclusively on D.H.B. We disagree. Under the statutory scheme, every entity in the distribution chain is responsible for the collection and remission of taxes, unless an applicable exemption or payment of the tax is shown. See Tax Code §§ 153.013(a), .206(a)-(c). The evidence that B.B. Fuels purchased the fuel from D.H.B. pursuant to a permit negates D.H.B.'s liability. Accordingly, the tax must be collected and remitted at subsequent steps in the distribution chain. Even if D.H.B. were liable for the taxes, its liability would not cut off appellant's liability. See Tax Code § 153.206(a), (b). We overrule appellant's sixth point of error.
Statutory "Exceptions"
In his first point of error, appellant contends the trial court erred in refusing to quash the indictment for failure to negate "exceptions" set out in sections 153.203, 153.205(a), 153.221(c), and 153.404. See Tax Code §§ 153.203, 153.205; Tex.Tax Code Ann. § 153.221 (West 1992); Act of June 7, 1985, 69th Leg., R.S., ch. 314, sec. 6, 1985 Tex.Gen.Laws 1372, 1374 (Tex.Tax Code Ann. § 153.404, since amended); McElroy v. State, 720 S.W.2d 490, 492 (Tex.Crim.App. 1986); LaBelle v. State, 692 S.W.2d 102, 105 (Tex.Crim.App.1985); see also Tex.Penal Code Ann. § 2.02(b) (West 1974). In his seventh point of error, appellant contends the evidence is legally insufficient to support the conviction because the evidence does not negate the statutory "exceptions." To allege all elements of a crime adequately, the charging instrument must negate every exception to the offense. McElroy, 720 S.W.2d at 492; LaBelle, 692 S.W.2d at 105; State v. Martinez, 829 S.W.2d 365, 366 (Tex.App.Corpus Christi 1992, pet. granted). We do not, however, interpret the sections appellant cites to provide exceptions to the offense the State charged.
The "exceptions" appellant cites in sections 153.203 and 153.205(a) merely set out transactions that are not taxable.[3] Section 153.221(c) sets out different classes of entities that need not file a report with the Comptroller, none of which apply to appellant. These sections do not provide an exception to liability for the failure to remit taxes collected on nonexempt transactions, the offense with which appellant is charged. Accordingly, we conclude that sections 153.203, 153.205(a), and 153.221(c) have no application to the immediate cause.
Because appellant was charged under section 153.403(29), the only provision of section 153.404 that is applicable to the charged offense is the general mental state required for offenses under section 153.403. See Tax Code § 153.404(a). The State properly charged that appellant acted "intentionally and knowingly" in the indictment. The other provisions of section 153.404 apply only to specific offenses under section 153.403, none of which are charged in this cause. See Tax Code § 153.404(b), (c). We conclude that because the "exceptions" to which appellant cites do not constitute elements of the charged offense, the State was under no burden to negate the application of these sections either in the indictment or in the proof at trial.[4] We overrule appellant's first and seventh points of error.
*688 Allegation of "Supplier"
In his second point of error, appellant contends the trial court erred in refusing to quash the indictment for failure to set out the alleged acts that cause appellant to be a supplier. Appellant contends that he was not provided sufficient notice in the indictment of "the nature and cause of the actions against him" in order for him to have an adequate opportunity to prepare his defense. See Tex. Const. art. I, § 10; Tex.Code Crim. Proc.Ann. arts. 21.02(7), .03-.04, .12 (West 1989).
An indictment that tracks the language of the appropriate statute is generally held sufficient. Daniels v. State, 754 S.W.2d 214, 218 (Tex.Crim.App.1988); DeVaughn v. State, 749 S.W.2d 62, 67 (Tex.Crim.App.1988); Thomas v. State, 621 S.W.2d 158, 161-62 (Tex.Crim.App.1981); see also Ferguson v. State, 622 S.W.2d 846, 850 (Tex.Crim.App. 1981). Additionally, the State is not required to plead nonessential evidentiary facts to provide notice to the accused. Daniels, 754 S.W.2d at 218. This holding corresponds with article 21.19 of the Code of Criminal Procedure which provides that "an indictment shall not be held insufficient, nor shall the trial, judgment or other proceedings thereon be affected, by reason of any defect of form which does not prejudice the substantial rights of the defendant." Tex.Code Crim.Proc.Ann. art. 21.19 (West 1989). The term "supplier" is statutorily defined. See Tax Code § 153.001(23). By reference to the statute, the actions by which appellant may be held a supplier are clear.
The indictment appears sufficiently to charge the offense of failure to remit diesel fuel tax collected as a supplier. The indictment states the alleged acts in ordinary and concise language and in such a manner as to enable a person of common understanding to know what is meant with a degree of certainty, to give appellant notice of the particular offense with which he is charged, and to enable the court, on conviction, to pronounce a proper judgment. See Tex.Code Crim. Proc.Ann. art. 21.11 (West 1989); Lyons v. State, 835 S.W.2d 715, 718 (Tex.App.Texarkana 1992, pet. ref'd). We overrule appellant's second point of error.
Constitutional Issues
In his third point of error, appellant contends sections 153.221(a) and 153.403(29) are unconstitutional because they provide for imprisonment for a debt. See Tex. Const. art. I, § 18. We disagree. Appellant was convicted of the failure to remit taxes he collected. The nature of this obligation is not a "liability to pay money growing out of contract" to which the constitutional protection generally applies.[5]See A.J. Thomas, Jr. & Ann Van Wynen Thomas, Interpretive Commentary, Tex. Const. art. I, § 18 (West 1984).
In Dixon v. State, the supreme court stated that no conflict exists between the protection from imprisonment for debt and statutes providing criminal penalties for "frauds perpetrated to avoid the payment of debts." Dixon v. State, 2 Tex. 481, 482 (1847); see also Rhodes v. State, 441 S.W.2d 197, 198 (Tex.Crim.App.1969) (theft-of-services statute does not violate article I, section 18 because defendant's departure with intent not to pay is punished rather than nonpayment for services); Colin v. State, 145 Tex. Crim. 371, 168 S.W.2d 500, 501 (Tex.Crim.App. 1943) (conviction for intentionally passing insufficient-funds *689 check was not imprisonment for debt because fraudulent act not the nonpayment of the debt was punished).
In this instance, the offense charged involved more than a mere failure of appellant to pay a debt he has incurred. The criminal act is the "knowing and intentional" failure to remit to the State funds the defendant collected in taxes on behalf of the State. The collecting entity holds the taxes in trust for the State and is in the position of a fiduciary. See Tex.Tax Code Ann. § 111.016 (West 1992); Dixon v. State, 808 S.W.2d 721, 723 (Tex.App.Austin 1991, writ dism'd w.o.j.). This case does not involve imprisonment for the mere failure to pay taxes owed as a taxpayer. Cf. Ex parte Chacon, 607 S.W.2d 317, 318 (Tex.Civ.App.El Paso 1980, no writ). The alleged offense in this case is the failure of a person, charged with a duty to collect a tax on behalf of the State, to remit that tax to the State. We overrule appellant's third point of error.
In his fourth point of error, appellant contends that the provisions of chapter 153, as applied to him, are unconstitutionally vague and indefinite. Appellant makes several arguments under this point.
First, appellant argues that section 153.221(a) conflicts with section 153.403(29). Section 153.221(a) obligates a supplier to file a report and to remit taxes and states that the report "is subject to the penalties provided in this chapter"; it fails to provide that the failure to remit taxes is subject to penalties. Section 153.403(29) makes it a criminal offense to fail to remit the taxes collected. We find no conflict between these two sections. Section 153.221(a) merely creates the duties to file the report and to remit the tax. Penalties and offenses are set out elsewhere in the Code. See Tex.Tax Code Ann. §§ 153.401-.408 (West 1992). We interpret the language of section 153.221(a) regarding "penalties" as emphasizing that the report is a legally significant document. We decline to interpret this language as a limitation that would conflict with the specific offenses set out in section 153.403.
Second, appellant argues that the statute cannot be applied to him as a supplier because he neither holds a permit as a supplier nor is bonded as a supplier. See Tax Code §§ 153.207(a), .218. Under the Code, a supplier is defined by its actions and the types of transactions in which it engages. See Tax Code § 153.001(22). As discussed above, the permit and bond requirements are not definitive, rather they create obligations that must be met for a supplier to operate legally as such in Texas. The failure of appellant to comply with these requirements does not negate his status as a supplier nor does it make the Code vague or indefinite as applied to him.
Third, appellant argues the Code is vague as to who may be criminally liable for the failure to remit taxes. Appellant contends that section 153.403(29) could be interpreted to make one person liable for another person's failure to remit taxes. This section states that "a person commits an offense if the person: (29) fails to remit any tax funds collected by a distributor, supplier, user, dealer, interstate trucker, or any other person required to hold a permit under this chapter." Tax Code § 153.403(29) (emphasis added). Appellant argues that a literal reading of this section makes possible criminal liability of a defendant for the failure of someone else to remit taxes. To be liable under section 153.403(29) a person must "intentionally or knowingly" fail to remit. Tax Code § 153.404(a). "A requirement of scienter may mitigate a law's vagueness, especially with respect to the adequacy of notice to an individual that his conduct is proscribed." Ex parte Mattox, 683 S.W.2d 93, 97 (Tex. App.Austin 1984), pet. ref'd per curiam, 685 S.W.2d 53 (Tex.Crim.App.1985); see also Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499, 102 S. Ct. 1186, 1193, 71 L. Ed. 2d 362 (1982). We conclude that the requirement that a defendant be proven to have "intentionally or knowingly" failed to remit taxes eliminates any vagueness in the statute.
Finally, appellant argues that the Code is vague, indefinite, and contradictory as to when the tax liability is incurred and as to what entities in the distribution chain are liable. Appellant cites section 153.201, which states that the "tax is imposed on the first sale or use" of fuel. Act of June 10, 1981, *690 67th Leg., R.S., ch. 389, sec. 1, § 153.201, 1981 Tex.Gen.Laws 1490, 1615 (Tex Tax Code Ann. § 153.201, since amended; now at Tex.Tax Code Ann. § 153.201(a)). Appellant argues that this section creates exclusive liability for the taxes on the parties involved in the "first sale or use" of fuel. We disagree.
As discussed above, the general scheme of the Code is that suppliers collect taxes from dealers, who in turn collect the tax from consumers. See Cannon Ball Truck Stop, 501 S.W.2d at 929. Absent an applicable exemption, all sales of fuel are taxable. We interpret section 153.201 to provide that fuel is subject to the tax if it is transferred or used in the state. This section clarifies that all fuel sold or used in Texas is subject to the tax. The tax is initially imposed on the first transaction in Texas and flows down the distribution chain. We do not interpret this section to limit the tax liability of entities in subsequent transactions. All entities in the chain are liable for the tax unless an exemption applies or the entity has previously paid the tax.
Appellant also argues that the provisions that provide for the supplier to remit the taxes collected in taxable transactions conflict with the obligation of a dealer to report and remit taxes collected but not paid to a supplier. Compare Tax Code §§ 153.204(a), 153.205, and 153.221(a) with Tax Code § 153.206(b). Appellant argues that the general scheme of the Code is that the supplier is liable for the tax and that the Code is vague and uncertain as to when the duty to report and remit taxes shifts to the dealer. We fail to see any uncertainty. If a dealer has not paid the tax to its supplier, for whatever reason, and sells fuel in a taxable transaction, it is holding tax funds owed to the State. In those instances, the dealer is obligated to report and remit the taxes collected. Appellant attempts to construe section 153.206(b) to obligate a dealer when its supplier has failed to remit the tax. This is contrary to the clear intent of the statute. It is irrelevant to the dealer's obligation whether its supplier has remitted the tax. The obligation of the dealer flows from its collection of tax on fuel on which the dealer has not paid tax. As the payment of taxes to the supplier is entirely within the dealer's control, the dealer will certainly know whether it has paid the tax and whether it is obligated to report and remit the tax under section 153.206(b). We conclude there is no conflict, vagueness, or uncertainty in these provisions. We overrule appellant's fourth point of error.
Accomplice Witnesses
In his eighth, ninth, and tenth points of error, appellant contends the trial court committed fundamental error in failing to instruct the jury that three witnesses, David Burnett, Rafael Gonzales, and Sonny Adams, were accomplice witnesses. See Tex.Code Crim.Proc.Ann. art. 38.14 (West 1979).
Appellant neither objected to these witnesses' testimony nor requested an accomplice-witness instruction to the jury. If no proper objection was made at trial, the defendant must claim that the error was "fundamental," and the judgment will be reversed only if the error is so egregious and created such harm that the defendant "has not had a fair and impartial trial." Almanza v. State, 686 S.W.2d 157, 171 (Tex.Crim.App. 1984).
Under Almanza, omission of an unrequested jury instruction "applicable to the case" calls for a new trial only when the defendant was greatly disadvantaged thereby. This degree of harm, sufficiently serious to be called "egregious," is present whenever a reviewing court finds that the case for conviction or punishment was actually made clearly and significantly more persuasive by the error.
Saunders v. State, 817 S.W.2d 688, 692 (Tex. Crim.App.1991). If there is no objection to the failure to charge the jury on the accomplice-witness rule, we must review "whether jurors would have found the corroborating evidence so unconvincing as to render the State's overall case for conviction clearly and significantly less persuasive." Id.
When determining the sufficiency of accomplice-witness corroboration, it is improper to focus on whether the other evidence, standing alone, is sufficient to establish the guilt of the accused.
*691 Evidence corroborating an accomplice witness' testimony does not need to establish the guilt of the accused. Additionally, the evidence does not need to directly connect the accused to the crime. It need only be evidence which tends to connect the accused with the offense committed.
Cox v. State, 830 S.W.2d 609, 611 (Tex.Crim. App.1992) (footnotes omitted). The actual degree of harm must be assayed in light of the entire jury charge, the state of the evidence, including the contested issues and weight of the probative evidence, the argument of counsel, and any other relevant information revealed by the record of the trial as a whole. Almanza, 686 S.W.2d at 171.
The record reflects evidence of appellant's control of the truck stops, sales of fuel by D.H.B. through B.B. Fuels to the truck stops, North Wey tax reports signed by appellant, appellant's admission that he was the person to contact regarding the truck stops' tax obligations, appellant's comments connecting him with B.B. Fuels, and bank transfers and checks from the truck stops' bank accounts to appellant's bank accounts. We conclude that sufficient corroborating evidence exists in the record to connect appellant to the offense.
Moreover, appellant was able to develop on cross-examination the witnesses' involvement in the fuel transactions, their possible motives in testifying, and any arrangements made with the State. Accordingly, we must assume the jury considered this information in weighing the evidence and the credibility of the witnesses. We conclude that any error in failing to charge the jury on the accomplice-witness rule was not so egregious as to deny appellant a fair and impartial trial. We overrule appellant's eighth, ninth, and tenth points of error.
Extraneous Offenses
In his eleventh point of error, appellant contends the trial court erred in allowing testimony of inadmissible extraneous offenses during the punishment stage. See Tex.Code Crim.Proc.Ann. art. 37.07, § 3 (West Supp.1993); Tex.R.Crim.Evid. 403-405. This testimony included allegations that appellant engaged in tax and securities fraud, stock swindles, land fraud, and forgery, and had been charged with felony theft. Since the trial of this cause, the Texas Court of Criminal Appeals has held that unadjudicated extraneous offenses are inadmissible evidence in the punishment phase. Grunsfeld v. State, 843 S.W.2d 521, 526 (Tex.Crim. App.1992); see also Murphy v. State, 777 S.W.2d 44, 63-64 (Tex.Crim.App.1988). Accordingly, the trial court erred in allowing this testimony.
The State has urged that any error was harmless because the evidence made no contribution to the punishment. We disagree. The extraneous-offense testimony constituted a large portion of the punishment-phase evidence and implicated appellant in a history of conduct very closely analogous to the offense charged in this cause. We cannot conclude that this evidence did not contribute to the punishment assessed. See Grunsfeld, 843 S.W.2d at 526. We sustain appellant's eleventh point of error. Accordingly, this cause should be remanded for a new hearing on punishment. Tex.Code Crim.Proc.Ann. art. 44.29(b) (West Supp.1993).
In his twelfth point of error, appellant contends the trial court erred in failing to instruct the jury as to the burden of proof on the unadjudicated extraneous offenses. Because of our resolution of point of error eleven, we do not reach this point.
Other Alleged Errors
In his thirteenth point of error, appellant contends the evidence is legally insufficient to support the trial court's order that appellant's sentence in this cause be cumulated with sentences imposed in four causes in Harris County. In his fourteenth point of error, appellant contends that two separate judgments rendered by the trial court are in conflict, vague, and indefinite. In his fifteenth point of error, appellant contends the trial court's order of restitution as a condition of parole was invalid and void. In light of our resolution of appellant's eleventh point of error, we do not reach these points of error.
*692 CONCLUSION
Having sustained appellant's eleventh point alleging error during the punishment phase, we reverse the judgment of the trial court and remand the cause for further proceedings pursuant to article 44.29(b) of the Code of Criminal Procedure.
NOTES
[1] The Tax Code has been amended since the alleged offense in this cause. We will initially fully cite each applicable provision of the Tax Code. Subsequent references to these sections of the Tax Code, unless otherwise noted, shall be to the previously cited applicable law.
[2] Under the facts of this case, it appears the State could have charged appellant for the failure to report and pay taxes collected as a dealer under §§ 153.206 and 153.403(29). It also appears the State would have a much easier case showing that appellant was the operator of the retail truck stops, that he knew that he had not paid taxes on fuel to his supplier, and that he failed to remit taxes he collected on his nonexempt retail sales. A case could also be made against appellant under § 153.403(23) for engaging in a tax-free transaction without the required permit or under § 153.403(25) for forging or falsifying an invoice.
[3] We note that, in the context of a civil action to collect taxes, the supplier has the burden to conclusively establish that a transaction was taxexempt. See State v. Glass, 723 S.W.2d 325, 327 (Tex.App.Austin 1987, writ ref'd n.r.e.). This would suggest a conclusion that, in a criminal context, these exemptions provide defenses rather than exceptions.
[4] Our conclusion in consistent with the legislature's subsequent enactment. In 1989, the legislature added § 153.408 to the Tax Code Providing that "[a]n information, complaint, or indictment charging a violation of this chapter need not negate an exception to an act prohibited by this chapter, but the exception may be urged by the defendant as a defense to the offense charged." Tex.Tax Code Ann. § 153.408 (West 1992).
[5] It has been stated that art. I, § 18 has no application to criminal proceedings. See Dixon v. State, 2 Tex. 481, 482 (1847); Ex parte Morris, 352 S.W.2d 125, 128 (Tex.Crim.App.1961); Ex parte Robertson, 27 White & W. 628, 11 S.W. 669, 670 (Tex.Ct.App.1889); Ex parte Britton, 127 Tex. 85, 92 S.W.2d 224, 227 (Tex.1936). We understand this broad statement to mean that this constitutional prohibition does not bar imprisonment for monetary liabilities imposed in connection with the verdict in a criminal prosecution, such as fines and costs of court. See Thompson v. State, 557 S.W.2d 521, 525 (Tex.Crim.App. 1977) (restitution as a condition of probation did not violate art. I, § 18); Ex parte Mann, 39 Tex. Crim. 491, 46 S.W. 828 (Tex.Crim.App. 1898); Dixon, 2 Tex. at 483-85. We do not take this statement to mean that the prohibition against imprisonment for debt could never have any application in the criminal context. Certainly, a penal statute that made debtor status illegal, absent any indication of fraud, might be constitutionally infirm under art. I, § 18. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1817267/ | 130 B.R. 322 (1991)
In re GGVXX, LTD., a Colorado corporation, Debtor.
Bankruptcy No. 90-18286-SBB.
United States Bankruptcy Court, D. Colorado.
July 25, 1991.
*323 Harry M. Sterling, Gelt, Fleishman & Sterling, P.C., Denver, Colo., for debtor.
Paul G. Hyman, Denver, Colo., J. Lawrence Dunlavey, Phoenix, Ariz., for King Valley Development Corp.
MEMORANDUM OPINION AND ORDER
SIDNEY B. BROOKS, Bankruptcy Judge.
This matter comes before the Court on Debtor's "Motion to Vacate Order on Motion to Prohibit Use of Cash Collateral and Noncash Collateral, to Require Sequestration of Cash Collateral, to Require an Accounting Regarding Cash Collateral and Noncash Collateral and for Adequate Protection with Respect to Cash Collateral and Noncash Collateral" filed May 24, 1991 ("Debtor's Motion to Vacate Cash Collateral Order" herein), and King Valley Development Corporation's "Response to Debtor's Motion to Vacate Order on Motion to Prohibit Use of Cash Collateral and Noncash Collateral, to Require Sequestration of Cash Collateral, to Require an Accounting Regarding Cash Collateral and Noncash Collateral and for Adequate Protection with Respect to Cash Collateral and Noncash Collateral" filed June 17, 1991 ("Creditor's Response" herein).
Creditor originally sought and obtained, without opposition from Debtor, a Bankruptcy Court order prohibiting Debtor's use of cash collateral, requiring an accounting of all Debtor's revenues, and sequestration of cash collateral. Debtor now requests rescission of that order on the basis that most, if not all, of Debtor's income is derived from golf fees and those fees are not cash collateral; they are not subject to use limitations and sequestration pursuant to 11 U.S.C. § 363(c).
The central question before the Court, and one of first impression, is whether golf fees received by a tenant/debtor constitute cash collateral?[1] If the answer is affirmative, the creditor is entitled to an order prohibiting debtor's use of those fees in the absence of the creditor's approval or Court authorization, all in accordance with 11 U.S.C. § 363. If the answer is negative, Debtor will have access to and use of the fees without the constraints demanded by the creditor and imposed by the Code.[2]
*324 The Court, having reviewed the file and being advised in the premises, makes the following findings of fact and conclusions of law.
I. Factual Background.
1. Debtor filed a Voluntary Petition pursuant to Chapter 11 of the Bankruptcy Code on November 30, 1990.
2. Debtor owns certain real property a portion of which is vacant and a portion of which is developed into and operated as a golf course.[3] Debtor's financial statements disclose that its income is generated primarily from greens fees, cart rentals, range balls, and club rentals.[4]
3. King Valley Development Corporation ("King" or "Creditor") alleges that it is an assignee for value and the present holder of certain first, second, and third priority, perfected secured liens against Debtor's real property and "certain personal property."[5]
4. On January 10, 1991, King filed with this Court a Notice pursuant to Section 546(b) of the Code.
5. King filed a Motion to Prohibit Use of Cash Collateral and Noncash Collateral, to Require Sequestration of Cash Collateral, to Require an Accounting Regarding Cash Collateral and Noncash Collateral, and for Adequate Protection with Respect to Cash Collateral and Noncash Collateral."[6] Debtor filed no response to the motion. The motion was granted.
II. Discussion.
Arizona state law controls the property rights between Debtor and King.
Property interests are created and defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding. . . . The justifications . . . apply with equal force to security interests, including the interest of a mortgagee in rents earned by mortgaged property. [Footnote omitted.]
Butner v. U.S., 440 U.S. 48, 55, 99 S. Ct. 914, 918, 59 L. Ed. 2d 136 (1979).
Section 9-104(j) of the Arizona UCC provides in part that "an interest in or lien on real estate, including a lease or rents thereunder" is excluded from the provisions of Article 9 of the UCC. Ariz.Rev.Stat. § 47-9104(10). Security interests exempted from UCC provisions by this section must be perfected in accordance with Arizona real property laws.
[T]he statutory language of U.C.C. § 9-104(j) [Ariz.Rev.Stat. § 47-9104(10)] indicates that only the creation or transfer of an interest in realty and the income from that interest in realty are excluded from Article 9.
In re Kearney Hotel Partners, 92 B.R. 95, 98 (Bankr.S.D.N.Y.1988).
This Court has neither been advised of nor has it found any reported cases which deal expressly with the characterization of revenues generated by golf courses.[7] One *325 analogous area in which the case law is quite clear, however, involves hotel/motel revenues. See, e.g., In re Ashoka Enterprises, Inc., 125 B.R. 845, 846 (Bankr. S.D.Fla.1990) (revenues from hotel/motel room occupancy are personal property or accounts receivable and not "rents"); In re Shore Haven Motor Inn, Inc., 124 B.R. 617, 618 (Bankr.S.D.Fla.1991) (same) (cases cited); In re Sacramento Mansion, Ltd., 117 B.R. 592, 606 (Bankr.D.Colo.1990) (same); In re Oceanview/Virginia Beach Real Estate Associates, 116 B.R. 57, 59 (Bankr.E.D.Va.1990) (same); In re M. Vickers, Ltd., 111 B.R. 332, 337 (D.Colo.1990) (same); In re Investment Hotel Properties, Ltd., 109 B.R. 990, 994 (Bankr.D.Colo. 1990) (same); In re Blue Ridge Motel Associates, 106 B.R. 81, 82 n. 1 (Bankr.W.D.Pa. 1989) (same); In re Ashkenazy Enterprises, Inc., 94 B.R. 645, 647 (Bankr.C.D.Cal. 1986) (same); Kearney Hotel Partners, supra at 99 (same); In re Greater Atlantic and Pacific Inv. Group, Inc., 88 B.R. 356, 359 (Bankr.N.D.Okla.1988) (same). But see, In re Mid-City Hotel Associates, 114 B.R. 634, 644 (Bankr.D.Minn.1990) (room receipts are not "rents" but are "income, profits, and issues" consequently, compliance with the UCC is not required to perfect a security interest therein).[8]
The outcome of a clear majority of these cases turns upon the characterization of a hotel/motel guest as a mere licensee rather than a tenant. See, Sacramento Mansion, supra at 606 (although certain facts may elevate the status of a normal hotel guest to a tenant); Mid-City Hotel Associates, supra at 640 (hotel guest is a mere licensee); Ashkenazy Enterprises, supra at 647 ("charges for rooms in hotels are generally referred to as rates, not rents. . . . A landlord has no lien on his tenant's property for unpaid rent but an innkeeper has a lien for unpaid charges. . . . Moreover, a tenant receives an estate in land. Whereas, a hotel guest has a bare right to use. The guest is a mere licensee. . . . The revenues from hotel guests are proceeds of accounts resulting from payments for goods and services.") (emphasis added); Greater Atlantic and Pacific, supra at 359 ("guests in a hotel . . . are mere licensees and not tenants, and . . . they have only a personal contract and acquire no interest in the realty.") (emphasis added).
The status of a guest, or licensee, under Arizona law is distinctly different from that of a tenant. A license, under Arizona law, is defined as:
[A]n authority or permission to do a particular act or series of acts upon the land of another without possessing any interest or estate in such land. [Citations omitted.] A license is merely a permit or privilege to do what otherwise would be unlawful, while a lease gives the right of possession of the property leased and exclusive use or occupation of it for all purposes not prohibited by its terms.
Tanner Companies v. Arizona State Land Dept., 142 Ariz. 183 [193], 688 P.2d 1075, 1085 (Ariz.App.1984) (emphasis added).
The chief distinction between a tenant and an innkeeper's guest lies in the element of possession. A tenant is deemed to have exclusive legal possession of the demised premises and stands responsible for their care and condition. A guest, on the other hand, has merely a right to the use of the premises while the innkeeper retains his control over them, is responsible for the necessary care and attention and retains the right of access for such purpose. Modern law tends to regard as a guest anyone who is a patron of the inn as such, and receives the same treatment as that accorded to short-term guests. Buck v. Del City Apartments, Inc., 431 P.2d 360, 363 (Okla.1967) (emphasis added) (cited with approval by the Arizona *326 courts in a related context in State v. Carrillo, 26 Ariz.App. 113, 114, 546 P.2d 838, 839 (1976)).
Case law binding in Arizona has also dealt with other similar situations where business receipts were found to be personal property rather than rents. See, In re Hillside Associates Ltd. Partnership, 121 B.R. 23, 25 (9th Cir.BAP 1990) (receipts for the care of nursing home patients are not "rents"); In re Zeeway Corp., 71 B.R. 210, 211 (9th Cir.BAP 1987) (Under Arizona law, gate receipts generated by post-petition automobile races are not included within the scope of a rents, issue, profits or income clause and are, therefore, not cash collateral. The income is not derived from the rental of real property but rather from the business activity conducted thereon.)
We analogize to the income generated by a restaurant or retail store, which although produced in part by the use of the real property upon which business is conducted, the income is not proceeds of the property but the result of the services provided by the business.
Id.
Clearly, a temporary right to enter upon real property and partake of the services offered thereon is not the same as an interest in real property. Greens fees, as well as cart rentals, range ball sales, and club rentals are best and most accurately characterized as business receipts or personal property and not rental payments which are directly tied to and wholly dependent upon the use of the real property upon which the business is conducted. King holds a security interest in the real property, the premises, not in the business. Accord, Greater Atlantic and Pacific, supra at 359. Golfers, by paying a greens fee, become mere licensees, entitled to the non-exclusive use of the golf course for a short period of time. Further, the greens fees are also compensation for upkeep services on the golf course. Cart rentals, range ball sales, and club rentals are clearly related to the personal property at issue and are too attenuated from the actual real estate to reasonably be considered as directly derived from the use of the land.
The Court concludes that the principal revenues of the Debtor, primarily derived from greens fees and similar use fees, are not rents; they are essentially personal property and do not constitute cash collateral. They are not subject to the use limitations and sequestration pursuant to Section 363(c) of the Code.
The $500.00 per month "rent" from the golf school is, however, another issue. This income appears to be a result of Debtor's ownership of the real property rather than its own business efforts. See, Greater Atlantic and Pacific, supra at 359 ("If Greater Atlantic had leased its hotel facility to an operator-lessee and received rent from such tenant, [the creditor's] security interest might well attach to such rental payments."). This portion of Debtor's monthly income falls within the exemption of Arizona's UCC § 9-104(j). The Section 546(b) Notice served to perfect King's lien in these monies.
Accordingly, it is
ORDERED that Debtor's Motion to Vacate Cash Collateral Order filed May 24, 1991 is GRANTED IN PART insofar as it deals with receipts other than from the operations of the golf school; and it is DENIED IN PART with respect to the receipts from the operations of the golf school.
NOTES
[1] As set forth in 11 U.S.C. § 363(a),
(a) In this section, `cash collateral' means cash, negotiable instruments, documents of title, securities, deposit accounts, or other cash equivalents whenever acquired in which the estate and an entity other than the estate have an interest and includes the proceeds, products, offspring, rents, or profits of property subject to a security interest as provided in section 552(b) of this title, whether existing before or after the commencement of a case under this title.
11 U.S.C. § 363(a).
[2] The question before the Court may also be stated as follows: Is a determination that greens fees constitute cash collateral par for the course? Debtor maintains it can drive its business free of the creditor's hook, while the creditor argues its security interest provides a wedge by which it is entitled to a slice of Debtor's revenues.
[3] King Valley Development emphasizes that Debtor does not own the land on which the entire golf course sits. This fact, however, is not determinative on the issue before the Court.
[4] The financial statements also reveal that $500.00 per month is received from "Rent." Debtor alleges that "this is actually receipts derived from the operation of a golf school in connection with the golf course operation." The characterization of this particular income leads this Court to the conclusion that the golf school is operated by an entity which is separate and distinct from Debtor and from which Debtor receives a set monthly fee for the use of the facilities.
[5] Attached to King's Motion were one and one-half inches of exhibits consisting of various recorded documents relating to the real property. Contained therein were two "Fixture Filings," designed as exhibits "L3" and "M2." This Court is unable to determine precisely to what other "personal property" King is referring.
[6] Creditor maintains its security interest survives and is enforceable pursuant to 11 U.S.C. § 552(b).
[7] See, In re Kearney Hotel Partners, 92 B.R. 95, 99 (Bankr.S.D.N.Y.1988) (the court finds that room receipts generated by hotel guests are personalty, and states, in dicta, "[t]o hold otherwise would totally distort § 9-104(j) and bring within its keen security interests in income attributable to other licencees of realty, e.g.: greens fees paid for use of golf courses, . . . ").
[8] The cases to the contrary "simply did not recognize the economic realities of the cases before them . . . a hotelier cannot host without a hotel." In re Mid-City Hotel Associates, 114 B.R. 634, 642 and n. 10 (Bankr.D.Minn.1990) (rejected by In re Nendels-Medford Joint Venture, 127 B.R. 658 (Bankr.D.Ore.1991) as simply "mudd[ying] the waters"). See, generally, In re M. Vickers, Ltd., 111 B.R. 332, 337 (D.Colo.1990) ("The more practical approach is a bright-line rule.") | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1877670/ | 731 F. Supp. 776 (1990)
Elizabeth DOLE, Secretary of Labor, U.S. Department of Labor, Plaintiff,
v.
SCOTT-RICE OF TEXAS, INC. and Lawrence S. Stanton, Defendants.
Civ. A. No. 3-89-0430-H.
United States District Court, N.D. Texas, Dallas Division.
March 7, 1990.
*777 Jerry G. Thorn, Acting Sol. of Labor, James E. White, Regional Sol., Bobbie J. Gannaway, Counsel for Empl. Stds., and Robert Fitz, Atty., Office of the Sol., Dept. of Labor, Dallas, Tex., for plaintiff.
Durwood D. Crawford, Goins, Underkofler, Crawford & Langdon, Dallas, Tex., for defendants.
MEMORANDUM OPINION AND ORDER
SANDERS, Chief Judge.
The Court has reconsidered its Orders of March 21, 1989 and May 3, 1989 striking Defendant's jury demand upon the reurging of the demand by Defendant in the Pretrial Order.
The gist of the problem is the nature of the relief Plaintiff seeks in this case. Plaintiff's entire complaint is predicated upon 29 U.S.C. § 217, which allows the Secretary of Labor to seek an injunction against future violations of the Fair Labor Standards Act's minimum and overtime wage provisions. Section 217 also provides for a restitutionary injunction requiring the payment of back wages found owing to employees. Section 217 claims are tried to the judge. Sullivan v. Wirtz, 359 F.2d 426 (5th Cir.), cert. denied, 385 U.S. 852, 87 S. Ct. 94, 17 L. Ed. 2d 80 (1966).
In the prayer for relief at the conclusion of the complaint, however, Plaintiff also requests liquidated damages under 29 U.S.C. § 216(c). That section provides that in a suit for back wages prosecuted by the Secretary of Labor on behalf of employees, a jury shall determine the amount of back wages owing to employees, and that an equal amount will be awarded as liquidated damages. Defendant contends that the inclusion of the request for liquidated damages converts the case into one in which he is entitled to a jury trial. See Castillo v. Givens, 704 F.2d 181, 186-87 n. 11 (5th Cir.), cert. denied, 464 U.S. 850, 104 S. Ct. 160, 78 L. Ed. 2d 147, (1983) (jury trial required in proceedings under 216(c)).
Defendant is correct that liquidated damages may not be awarded in a judicial trial. Even though the judge ultimately determines the amount of liquidated damages, see 29 U.S.C. § 260 (court has discretion to reduce amount of liquidated damages upon showing of good faith by employer), the statutory limit is the amount the jury awarded in back wages. Thus, Congress has decided that liquidated damages are only available in an action tried to the jury, and the Secretary may not avail herself of the efficiencies of a case tried to the judge while pursuing the relief available only through a jury.
The Secretary has already presented her arguments regarding this issue to two circuit courts and a host of district courts, all of which, with one exception, have come to the same conclusion. See McLaughlin v. Owens Plastering Co., 841 F.2d 299, 301 (9th Cir.1988); Brock v. Superior Care, Inc., 840 F.2d 1054, 1062-64 (2d Cir.1988); Brock v. Mechanicsville Concrete, Inc., 655 F. Supp. 1454 (E.D.Va.1987); Donovan v. Motel 6, Inc., 39 Fed. R. Serv. 2d 1214 (M.D.N.C.1984); Marshall v. Morse Operations, Inc., 514 F. Supp. 604 (S.D.Fla.1981); Marshall v. Hanioti Hotel Corp., 490 *778 F.Supp. 1020 (N.D.Ga.1980) (excellent discussion); Usery v. Venango Diagnostic and Training Ctr., Inc., 72 F.R.D. 469 (W.D.Pa.1976). Contra Donovan v. Travelers Trash Co., Inc., 599 F. Supp. 43 (E.D. N.C.1984). In McLaughlin, the Ninth Circuit determined that if the Secretary asks for liquidated damages as well as injunctive relief, then the case must be tried to a jury. In Superior Care, the Second Circuit considered what appears to be precisely the same wording in a complaint by the Secretary,[1] and also determined that the request for liquidated damages was incompatible with the request for injunctive relief. But the Second Circuit chose a different course, reversing the district court's award of liquidated damages, thereby obviating the need for a jury trial.
The Court concludes that the Second Circuit's outcome is the more logical one. The Secretary predicated her entire complaint upon section 217, and only added the request for liquidated damages in the prayer for relief hardly enough to qualify as a full-fledged claim. Moreover, since the Secretary appears to be using the same form complaint throughout the country even after all of these decisions, yet she failed to bring these cases to the Court's attention when pressing her motion to strike Defendant's jury demand,[2] the Court does not hesitate to strike the Secretary's request for liquidated damages.
Accordingly, finding that the complaint is one for equitable relief under section 217, the Court will not reinstate Defendant's jury demand. However, Plaintiff's claim for liquidated damages is STRICKEN.
SO ORDERED.
NOTES
[1] In this case, the Secretary's complaint stated that "[j]urisdiction of this action is conferred upon the court by Section 17 of the Act," and requested in the claim for relief an "additional amount as liquidated damages equal to the back wages found to be due to the employees." The language cited by the Second Circuit is virtually identical. See Superior Care, 840 F.2d at 1063. See also Morse Operations, 514 F.Supp. at 605; Hanioti Hotel, 490 F.Supp. at 1021.
[2] The Court recommends that the Secretary delete the reference to liquidated damages in her form complaint to avoid this problem in the future. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1881849/ | 685 F. Supp. 129 (1988)
Walter W. RODY
v.
MIDLAND ENTERPRISES, INC. and Port Allen Marine Services, Inc.
Civ. A. No. 88-151-A.
United States District Court, M.D. Louisiana.
May 6, 1988.
*130 John Dale Powers, Powers, Vaughn & Clegg, Baton Rouge, La., for plaintiff.
Cornelius R. Heusel, S. Mark Klyza, Kullman, Inman, Bee & Downing, New Orleans, La., for defendants.
RULING ON MOTION TO REMAND
JOHN V. PARKER, Chief Judge.
This matter is before the court on plaintiff's motion to remand. Defendants have filed an opposition. There is no need for oral argument.
On December 30, 1987, plaintiff Walter W. Rody filed this action in the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana, against Midland Enterprises, Inc. and Port Allen Marine Services, Inc., as his former employers. Plaintiff alleges that he became the Director of New Construction Marketing for Midland Enterprises on October 27, 1986, at which time Midland allegedly made a commitment to retain plaintiff until he would be fully vested in Midland's retirement plan on August 16, 1988. Plaintiff was allegedly terminated on January 17, 1987 because of a "conflict of interest" (i.e. solicitation of fleeting and mooring business on behalf of a corporation formed by Rody). Plaintiff seeks damages for wrongful discharge, including loss of salary and benefits.
On February 22, 1988, defendants Port Allen Marine and Midland Enterprises, Inc. removed this action, alleging they had been served on January 22 and 25, respectively. Defendants allege that plaintiff's claim for wrongful discharge prior to vesting in Midland's retirement plan necessarily constitutes a claim under the Employee Retirement Income Security Act (ERISA), 29 U.S. C. Sections 1132, 1140. Consequently, it is alleged that this court has jurisdiction pursuant to 28 U.S.C. Section 1331.
On March 28, 1988, plaintiff filed the motion to remand presently before the court. Plaintiff argues that his claim does not constitute a claim under ERISA that it is not a suit for benefits but one for damages for wrongful discharge.
In opposition to the motion to remand, defendants argue that plaintiff's allegations amount to a violation of Section 1140, which provides in pertinent part as follows:
"It shall be unlawful for any person to discharge ... a participant ... for the purpose of interfering with the attainment of any right to which any such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act ..."
Defendants further argue that plaintiffs claims fall within the civil enforcement provision of ERISA, 29 U.S.C. Section 1132(a) (empowering participants to sue for recovery of benefits), and are therefore preempted by ERISA and removable despite the fact that the preemption defense is not disclosed on the face of plaintiff's petition. Defendants note that the Supreme Court recently excepted ERISA cases from the well-pleaded complaint rule in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. ___, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987). See Beers v. North American Van Lines, Inc., 836 F.2d 910, 913 n. 3 (5th Cir.1988) (explaining the limited nature of this exception to the well-pleaded complaint rule).
Plaintiff correctly points out that defendants have misconstrued the lawsuit. Contrary to the argument of the defense, plaintiff has not alleged a violation of Section 1140 because the allegations relating to defendant's motivation in terminating plaintiff relate to "conflict of interest". There are no allegations which in any way indicate that plaintiff was discharged to prevent his benefits vesting under the retirement plan. Section 1140 clearly requires a "purpose of interfering with" the participant's rights under the plan. Such improper motivation is not alleged here. See Morningstar v. Meijer, Inc., 662 F. Supp. 555 (E.D.Mich.1987).
The court further agrees with plaintiff that this is not a suit for benefits under a retirement plan. See Morningstar, supra at 556-557. The only relationship that ERISA has to this action relates to plaintiff's *131 claim for damages resulting from the loss of retirement benefits. Plaintiff does not claim benefits; he claims that a breach of his contract has denied him future benefits to which he would otherwise have become entitled. His claim for damages, as plaintiff points out, is not against the Plan, but against the employers who allegedly breached the contract. As noted in Morningstar, supra, damages will likely be measured by the cost to plaintiff to purchase substantially similar benefits to those lost by reason of the alleged breach. The court agrees with the rationale expressed by Judge Churchill in Morningstar, supra. This relationship is too remote, tenuous and insubstantial to support jurisdiction for removal.
Accordingly, the court hereby grants plaintiff's motion to remand and this action will be remanded to the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1106087/ | 584 So. 2d 373 (1991)
Clyde McPHEARSON
v.
SHELL OIL COMPANY, Shell Offshore, Inc., Bill Davis and Shoney La Sauge.
No. 90-CA-2131.
Court of Appeal of Louisiana, Fourth Circuit.
July 31, 1991.
*374 David F. Bienvenu, Carrie A. Jourdan, Hoffman, Sutterfield, Ensenat & Bankston, New Orleans, and Ronald E. Corkern, Jr., Watson, Murchison, Crews, Arthur & Corkern, Natchitoches, for plaintiff/appellee.
William L. Brockman, New Orleans, for defendants/appellants.
Before SCHOTT, C.J., and KLEES and BECKER, JJ.
SCHOTT, Chief Judge.
Defendant, Shell Offshore, Inc., has appealed from a judgment in favor of plaintiff on the basis of unjust enrichment for his design and installation on defendant's offshore rig of an auger system. The case was tried to a jury on written interrogatories. The central issue is whether plaintiff's recovery is precluded by the Louisiana Uniform Trade Secrets Act, LSA-R.S. 51:1431 et seq.
In the spring of 1984 plaintiff was employed as a welder by Nordrill, Inc. aboard the Nordrill OILER which was engaged by defendant to drill for oil in the Gulf of Mexico. It became necessary to use oilbased drilling mud on the job with the result that special procedures for disposal of the cuttings became necessary. These cuttings were the soil or other material displaced at the bottom of the hole as the drill progressed downward and forced up to the surface on the outside of the drill pipe. When water-based drilling mud was used the cuttings could be dumped into the Gulf, but when oil-based drilling mud was used environmental considerations required that the cuttings be collected in tanks near the drill and the full tanks taken to shore for disposal.
When plaintiff was first on the job the cuttings were to be transported from the drill to the tank in a trough arranged to provide for the cuttings to move by gravity with the assistance of workers who paddled or shoveled the cuttings along.
Exactly how the construction and installation of the auger system came about is a matter of great conflict among the witnesses. However, for our purposes on appeal, we consider these conflicts to have been resolved by the jury in plaintiff's favor, and we accept as facts the version and details provided by plaintiff in his testimony. Before summarizing this testimony, identification of the various players in this drama is helpful to an understanding of the story.
Louis Chevalier was plaintiff's foreman and Michael Sepulvado was a crane operator. They were both employees of Nordrill on the OILER. Harley La Sauge was Shell's representative aboard the OILER and his supervisor was Bill Davis whose office was in New Orleans.
Plaintiff noted that the trough method of moving the cuttings from the drill pipe to *375 the tank presented problems. As it depended primarily upon the force of gravity to move the material, the trough would frequently become clogged and required workers to stand by with shovels or paddles to keep the material moving. Since the trough was open on top much of the wet, oily material spilled onto the deck of the rig. Plaintiff thought he could construct an auger system consisting of an enclosed pipe containing a screw whose threads would force the material through the pipe.
Plaintiff was instructed by Chevalier, to build another trough and discussed his idea of the auger system with Sepulvado the day before starting the trough. As he was taking measurements in preparation for the trough he was called to Chevalier's office where he met with Chevalier, La Sauge, and Sepulvado. Asked by La Sauge if he could improve on the trough system plaintiff told him about his auger system proposal. La Sauge told him if he (plaintiff) thought it would work he (La Sauge) would see if he could get its construction approved. Plaintiff took measurements, computed the size of the components he needed, and gave the "shopping list" of parts to La Sauge who said he would order them. When the parts were delivered, plaintiff constructed the system. Sepulvado and some men under his supervision assisted in the construction. The system was activated and worked well to the satisfaction of everyone on the rig.
After plaintiff had given the foregoing description of how the auger system had come about the following testimony was elicited:
Q. Did you discuss building any other augers or auger systems in the future with anyone on the rig?
A. At one point, I was up above where the auger was. And Mr. Sepulvado walked up close to me, and I told him thatwe were assisting there watching it work. And I told him, I said, "Boy, that thing is sitting there just making money." And I said, "Here I am on the ground floor. Maybe I can get something going with it. Maybe I can start a little business where I can rent these or lease them to Shell. They have already got one out here and it's working. They know that it works. So that wouldn't be a problem. And so maybe I can talk to them and maybe rent or lease these or maybe sell them to him. But I was on the ground floor and I figured it's time to try to do something like that.
When his "hitch", this particular tour of duty on the rig, was over, plaintiff called Bill Davis in New Orleans. Davis knew about the auger system and stated that "everybody was really enthused about it and liked it." Plaintiff told him:
"What I want to talk to you about is renting them, building these things, renting them, leasing them to Shell, maybe making a little money on the side and saving Shell a little money, too. And he said, "I'm very interested in what you have to say. Can you be here Friday morning?" I said, "I'll be there with bells on."
A few days later plaintiff met with Davis at his office, and he told him he wanted to build more augers and lease or sell them to Shell. Davis asked him how much he would charge and plaintiff said $250 per day based upon the saving in labor required by the trough method. Davis stated he thought this was fair, they shook hands on it, and Davis stated that he would authorize the purchase of the materials and component parts.
As plaintiff was not scheduled to return to the rig for the next two weeks he spent this time locating the material and parts he would need for the construction of additional systems. However, when he reported to the rig for his next hitch he was fired by Chevalier who said he was following La Sauge's instructions. The auger system on the OILER continued to be used and similar systems were installed on two other rigs.
Plaintiff acknowledged that at the time he was fired by La Sauge the auger system had been inspected and photographed and was within the common knowledge of the members of the offshore drilling community. Plaintiff had made no effort to keep it *376 a secret and he had not tried to obtain a patent.
Plaintiff's case was based on the equitable theory of unjust enrichment. In order to recover he had the burden of proving that 1) defendant was enriched; 2) he was impoverished; 3) there was a connection between the enrichment and the impoverishment; 4) there was no justification or cause for the enrichment and impoverishment; and 5) plaintiff had no remedy at law. Minyard v. Curtis Products, Inc., 251 La. 624, 205 So. 2d 422 (1967).
In response to written interrogatories the jury found that plaintiff proved the first four elements enumerated above. Since the fifth element presents an issue of law, the trial judge did not present it to the jury, but decided it himself, in favor of plaintiff.
Defendant's principal contention on appeal is that the trial court erred by failing to apply the Louisiana Uniform Trade Secrets Act (UTSA), LSA-R.S. 51:1431 et seq., to the facts of the case and to recognize that this act precludes recovery by plaintiff on the theory of unjust enrichment.
The UTSA defines a trade secret as a device, method, technique, or process which 1) derives economic value by virtue of its not being generally known or readily ascertainable by proper means by others who could obtain economic value from its use, and 2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. § 1431(4). Misappropriation of a trade secret entitles the owner to injunctive relief, as well as damages. §§ 1432 and 1433. The UTSA displaces conflicting laws pertaining to civil liability for misappropriation of a trade secret. § 1437.
The trial court erred in finding that plaintiff established the fourth and fifth elements of the doctrine of unjust encroachment, to wit, no legal justification for the enrichment and impoverishment and no legal remedy available to plaintiff. The UTSA is designed to protect one's invention from misappropriation by others provided the inventor protects the secrecy of his invention from public knowledge and use in the first instance. Conversely, the inventor who does not avail himself of the protection afforded by the UTSA cannot be heard to complain if the invention is appropriated by a member of the public. In the present case plaintiff assembled the auger system voluntarily at the request and with the assistance of defendant's La Sauge with no thought of protecting the system from copying by others including defendant. Only after the system was built and functioning did he conceive the idea of leasing or selling it to defendant. By this time not only was it being used without restriction by and with the full knowledge of defendant and other personnel aboard the OILER but it had been inspected and even photographed by others who came aboard the OILER from other places. Consequently, when plaintiff met with Davis, his invention, if it can be designated as such, was already in the public domain, available to anyone to copy it. Thus, the auger system was no longer plaintiff's to lease or sell to defendant or anyone else. Defendant was free to use it. The legal cause or justification of defendant's enrichment by copying the system and plaintiff's impoverishment by failing to profit by his invention was his own failure to protect it from entering the public domain by availing himself of the benefits of the UTSA.
A plaintiff may resort to the equitable theory of unjust enrichment for recovery of a loss only if there is no legal remedy available to him. In the present case plaintiff had a legal remedy which he waived. Having done so, he cannot rescue himself from his predicament by resorting to the doctrine of unjust enrichment which has no application to a situation where there was a legal remedy.
In reaching these conclusions we subscribe to the reasoning of the court in Sheets v. Yamaha Motors Corp., U.S.A., 849 F.2d 179,184 (5th Cir.1988) whose facts are practically identical to those in the present case. Indeed, the facts of the Sheets case foster greater sympathy for *377 the plaintiff than in the present case, but the conclusions are unassailable.
The foregoing discussion is dispositive of the case, but further comment is necessary to avoid the implication that had plaintiff complied with the UTSA in the first instance his invention would have been eligible even for the act's protection. Uncontradicted evidence in the record established that plaintiff's auger system was not novel but had been used extensively, at least as a component of a grain combine. As grain is harvested by a combine it often contains an auger system to carry the grain into the combine's storage container. Plaintiff simply took an old idea and gave it a new application. In no sense can it be said that he invented the system itself. We need not decide whether one can obtain a patent or protection under the UTSA for such an application but the question looms in this case.
Accordingly, the judgment appealed from is reversed and set aside and there is judgment in favor of defendant, Shell Offshore, Inc., and against plaintiff, Clyde McPhearson, dismissing his suit at his cost.
REVERSED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1674262/ | 612 So.2d 359 (1992)
CENTURY 21 DEEP SOUTH PROPERTIES, LTD., Donald J. Steighner and Gregory A. Meiers and Wife, Wanda M. Meiers
v.
James H. CORSON and Wife, Lucy H. Corson.
No. 89-CA-1099.
Supreme Court of Mississippi.
December 17, 1992.
Rehearing Denied February 18, 1993.
*361 Katherine S. Kerby, Gholson Hicks & Nichols, Ronald L. Roberts, Mitchell McNutt Threadgill Smith & Sams, Columbus, William R. Barnett, Jackson, for appellants.
Paul M. Neville, Jackson, for appellees.
*362 Before DAN M. LEE, P.J., and SULLIVAN and McRAE, JJ.
SULLIVAN, Justice, for the Court:
This appeal arises from a suit initially brought by the Corsons in the Lowndes County Chancery Court against the Meiers, Bob Keys and Thomas Vice, (owners of Keys & Vice Realty, now Century 21 Deep South Properties), and Donald Steighner, alleging breach of assumption warranty deed (Meiers), negligence (Keys & Vice), and legal malpractice (Steighner). The Meiers' answer included a cross-claim against Steighner for negligence. Frank Whitaker was subsequently added as a defendant as was Century 21 Deep South Properties.
The chancellor awarded the Corsons $75,000.00 damages against the Meiers (for breach of warranty), Steighner (for negligence), Century 21 (negligence), and Whitaker (negligence), jointly and severally, and $35,000.00 punitive damages against Steighner for gross negligence. Steighner was also ordered to pay the Corsons $10,000.00 attorney fees. The Meiers were awarded $5,000.00 against Steighner for his negligence. Whitaker was dismissed following execution of a covenant not to sue.
Century 21, the Meiers, and Steighner appeal to this Court and the Corsons cross-appeal, assigning the following errors:
CENTURY 21
I. Reversible error exists due to the refusal of the trial court to grant Appellant Century 21 Deep South Properties' motions for specific findings of fact and conclusions of law;
II. The trial court committed reversible error by its apparent finding of agency and/or sub-agency between the Corsons and Appellant Century 21 Deep South Properties, Ltd. and Frank Whitaker and Century 21;
III. The trial court committed reversible error by holding Appellant Century 21 Deep South Properties liable to the Corsons when there was no evidence of any breach of any legal duty by Appellant Century 21 Deep South Properties to the Corsons;
IV. The trial court committed reversible error through the failure to grant the motion for summary judgment or in the alternative for dismissal of Century 21 Deep South Properties Ltd.;
V. The trial court committed reversible error due to the failure to dismiss Century 21 Deep South Properties at the end of Plaintiffs' case in chief;
VI. The trial court committed reversible error by refusing to grant the motion to dismiss of Century 21 Deep South Properties due to the Corsons' failure to have persons in court necessary for a just adjudication pursuant to Rule 19 of the Mississippi Rules of Civil Procedure;
VII. The trial court committed error through the admission of the testimony of James T. Marsh;
VIII. The trial court committed error through the admission of the testimony of Robbie Earhart as to the Corsons' damages;
IX. The trial court committed reversible error by the award of damages against Century 21 Deep South Properties;
X. The trial court committed reversible error in the apparent holding that Century 21 Deep South Properties, Ltd., was liable for actions or inactions of Frank Whitaker;
XI. The damages awarded by the trial court for liens on the Corsons' property are in error as the Corsons never listed their property for sale while the liens existed;
XII. The trial court committed reversible error by not applying to Corsons the doctrines of assumption of risk and/or contributory negligence;
XIII. The trial court committed reversible error by requiring a realtor/broker to abide by the standards of an attorney; and
XIV. Reversible error exists by entry of the judgment against Appellant Century 21 Deep South Properties as the court's opinion under conclusions of law omits all reference as to any violation of any legal duty by Century 21 to the Corsons.
*363 GREGORY AND WANDA MEIERS
I. The Appellees were not entitled to damages, other than nominal damages, against Gregory A. Meiers and Wanda M. Meiers for their breach of the warranty contained in the assumption warranty deed; and
II. If the Appellees are entitled to a judgment against Gregory A. Meiers and wife, Wanda M. Meiers, then the Meiers should recover the amount of the judgment from Donald J. Steighner in addition to the amount awarded by the lower court.
DONALD J. STEIGHNER
I. Mississippi requires an attorney-client relationship in an action based on attorney or legal malpractice; and
II. Even under expanded theories of liability, the Corsons cannot recover here because neither they, nor their attorney, relied on work performed by Steighner.
CORSONS' CROSS-APPEAL
I. Was the trial court manifestly in error in cutting the Corsons' damages in half when the proof of loss of wages was undisputed?
II. Was the trial court in error in ruling that the offering of an attorney for proof on attorney's fees operated as a waiver of attorney-client privilege generally?
We will address only those assignments of error which merit discussion.
FACTS
James Corson, Appellee, is a human resource consultant who moved to Mississippi in January or February, 1980. In an effort to locate a home in Columbus, where he was employed with Mitchell, he contacted Frank Whitaker, a realtor in Columbus. There was no written agreement with Whitaker regarding the services he was to provide. The house hunt ended when Whitaker showed Corson the house belonging to Greg and Wanda Meiers. A contract for the sale and purchase of real estate, provided by Frank Whitaker Realty, was entered into by the Corsons and the Meiers on March 22, 1980, in connection with the purchase of the Meiers' house.
Whitaker explained to Corson that he was responsible for having title work done and Corson testified he named the law firm of Threadgill, Smith, Sanders and Jolly because Taylor Smith was the only lawyer in town that he knew. Corson said within a week Whitaker informed him that Century 21, the listing agent for the Meiers' property, had already contacted a law firm to do the title work and asked if Corson wanted to pay for the Threadgill firm to do the title work too. Corson, not wanting to pay for two title opinions, said he would leave it to Century 21. Although he testified that nothing specific was mentioned at the time regarding the title work Century 21 was providing, Corson stated that past experience in purchasing houses had taught him that title searches go back "essentially, forever." When Whitaker reported that the attorney doing the title work had discovered an easement problem (there was no access to the property without one), Corson assumed the attorney was doing a good job. Corson cancelled the closing because he did not want to buy property burdened with legal problems. Once the easement problem had been resolved the closing was rescheduled and held on April 3, 1980.
The Corsons moved into the house a few days after closing and had no reason to question their title until the fall of 1981, when James Corson attempted to take out a second mortgage on his home in order to buy a computer to use in his consulting work. First Columbus National Bank, the Corsons' lender, required a title search, which Corson thought would be less costly if performed by Dunn & Webb, the firm who had done the previous title work for Century 21. However, upon learning what their fee would be, Corson employed David Smith, another attorney in Columbus. As a result of Smith's title work, Corson learned that his property was encumbered by four liens which had been in existence at the time he purchased the property. He also learned that Donald Steighner, an attorney in Columbus, had closed the loan for the Meiers when they bought the property. Steighner's title opinion had revealed the *364 existence of only two liens and those had not been satisfied or cancelled. The second mortgage was nonetheless obtained although the bank required the Corsons to use their cars as additional collateral. The Corsons borrowed a total of $32,800.00 between December, 1981 and April, 1985. ($17,800.00 of that amount was borrowed after Corson learned of the liens; the remainder was the second mortgage amount.)
Beginning in January, 1982, and continuing until April of that year, Corson had a series of conversations with Steighner regarding the liens. Corson testified that Steighner asked him to collect information about the liens so they could be taken care of, which Corson did, and Steighner reported the situation to his insurance company.
In June, 1982, Corson learned that he would be laid off from his job at Mitchell as of July 1, 1982. With personnel jobs in Columbus rare, Corson was concerned that he would not be able to pursue work in another geographic area because it would be difficult to sell his house as long as the liens existed. At this point Corson contacted Welborne Johnson, the Columbus attorney who was representing Steighner's errors and omissions carrier. A letter reflecting Corson's concern was sent from David Smith to Johnson.
Corson testified that he missed a job opportunity with General Tire in Mt. Vernon, Illinois, because of the situation with his house, but he further stated that he was not actually offered the job after he told General Tire that he would not be able to report to work immediately because of legal problems with his house. Although he made efforts to find other employment, October of 1982 found Corson subsisting on a combination of income from consulting work he did from his home and unemployment benefits. Corson opined that his failure to get the job at General Tire caused him to lose wages of at least $150,000.00. He admitted on cross-examination that shortly after he was terminated at Mitchell he had an offer to work as an associated consultant in Peoria for a percentage of the business generated. Not believing the opportunity to be a good one, he declined.
Despite the existing liens, Corson contacted Carolyn Brown of Century 21 in the fall of 1982 to inquire about selling his house. She prepared a market analysis as a result of which Corson decided it was not feasible to sell his home because "by the time you added up the first mortgage and the second mortgage and the value of the liens, there wasn't enough money to cover everything that I owed... ." Brown had used a sale price of $74,000.00 in this analysis. Corson also testified that he had found a buyer for his house, Charles Garrick, but the liens foiled the sale.
In June, 1986, Corson did sell his home with the help of Robbie Earhart of West Realty, with whom he had listed the house in 1985. At this time the liens on the property were no longer in existence. (David Smith executed a final title certificate to Mississippi Valley Title showing no outstanding liens in January, 1983.) Corson opined that the house lost between $6,000.00 and $8,000.00 in value between 1982 and the time it was finally sold in 1986.
When Corson first instituted this litigation he was represented by a law firm which was to bill Mr. Taylor of Mississippi Valley Title. Mississippi Valley would pay the bills and Corson was to reimburse them for half of the fees. Corson paid $2,800.00 in fees then could no longer afford the services of the law firm, which would not handle the case on a contingency basis. Corson subsequently retained Paul Neville and Gene Stringer, now deceased, who agreed to handle the case for a contingent fee.
Corson testified that he suffered mental anguish as a result of the situation with his house which was exacerbated by Steighner's constant lying and Keys and Vice's (now Century 21) failure to help resolve his problem. He cited as proof the financial burden his family suffered because he could not take the job at General Tire, being forced to remove his dyslexic daughter from her private school, the inability to provide his college student son with the extras he deserved, and lack of medical insurance for his family. There was never *365 an attempt to evict the Corsons or to take possession of their home. There was never an effort to enforce the liens. All but $43.00 of the liens, which had a payoff of approximately $10,500.00 at the time they were discovered, had expired by passage of time as of May 21, 1984, and the Corsons were informed that the final $43.00 had been satisfied in the fall of 1984. Mrs. Corson testified that Jim Corson became "almost obsessed" with the lien situation and that their marriage barely survived.
Jim Preston, manager of human resources at General Tire, testified that he would have hired Corson in 1982 but did not because the available position needed to be filled immediately and Corson said he was unable to move that quickly due to the legal problems with his home.
Corson admitted on cross examination that he had no agreement to pay Frank Whitaker any fee and that he understood Whitaker was not representing his (Corson's) interests. Corson also said he had relied on Frank Ferrell, the Dunn & Webb attorney who performed the title update, and the realtors to represent his interests.
James Marsh testified as an expert for the purposes of calculating after-tax income and loss-of-use of income. He opined that because Corson did not go to work for General Tire in 1982, he lost the use of over $25,000.00 that year, more than $38,000.00 in 1983, almost $45,000.00 in 1984, approximately $40,000.00 in 1985, over $31,000.00 in 1986, and almost $20,000.00 in 1987. On cross, Marsh revealed that he did not have all pertinent information upon which to base the most accurate opinion, he did not consider Corson's unemployment income, the figures he was given to work with did not match the tax returns filed by Corson, and portions of Corson's tax returns, upon which he had relied, were improperly completed. Marsh stated on re-direct that the discrepancies made known to him on cross would only change his figures by $3,000.00 or $4,000.00 cumulatively.
Mrs. Corson testified that an offer of settlement had been made to pay the liens in full prior to May, 1984, which she and Mr. Corson rejected. Welborne Johnson, the attorney representing Steighner's insurance company, also testified that he had offered to settle for payment of the liens prior to the time this lawsuit was filed but the Corsons' attorney rejected the offer stating that it would take much more money than that.
Donald Steighner testified that he was not aware of the practice of one attorney doing updated title opinions from another attorney's work and that he would not do it. Steighner first became aware that there was a problem with his handling of the title work for the Meiers in 1981 or early 1982 when Jim Corson contacted him. Steighner testified that he notified his errors and omissions carrier of the problem. Steighner also contacted the building company against whom the liens were filed and was told the liens were being paid. He later learned that the building company was not referring to the same liens that he and the Corsons were discussing. Steighner's attorney stipulated at trial that Steighner was negligent in examining title for the Meiers.
David Smith, the attorney who performed title work for the Corsons and discovered the existing liens, testified that it was common practice in the Columbus area to update title opinions prepared by other attorneys in assumption sales situations. He also stated that in his opinion it was a bad practice. Smith said he would advise a full title search to his clients in assumption sales situations.
Representing Century 21 in a 30(b)(6) deposition, which was read into the record at trial, Thomas Vice said an update was never recommended by his company. His opinion regarding title updates was that it was not a sound practice unless the same firm did both the original search and the update. In his testimony at trial, Vice said that all brokers are agents of the sellers pursuant to the Multiple Listing Service rules and regulations and that this fact is routinely disclosed to purchasers. He also testified that brokers representing the seller do not have contact with the purchasers.
Randy Luker, the listing agent for the Meiers in the transaction with the Corsons, *366 testified that the Meiers requested the firm of Dunn & Webb to prepare the warranty deed. He reported this information to Mary Beth Craft, a loan closing officer at Century 21, and she phoned Dunn & Webb. Luker denied ever giving any advice to the Corsons and said he had no contact with them as it would have been unethical.
Mary Beth Craft testified that she phoned Dunn & Webb as instructed by Luker. Frank Whitaker asked her to order an updated title for the Corsons when she ordered the assumption warranty deed from Dunn & Webb. Frank Ferrell of Dunn & Webb discovered that an easement needed to be obtained to provide access to the property before closing. Upon learning of this, Mary Beth Craft informed Luker, who asked her to call Steighner and have him resolve the problem. When the easement problem was resolved, a closing date was set.
Frank Whitaker claimed not to remember whether he informed the Corsons that he represented the sellers. Whitaker stated that he always discussed the two types of titles available to purchasers on an assumption. In response, Corson asked which was cheaper and upon learning an update would cost less, he chose to have only an update done. Whitaker testified that Corson left the choice of attorney to him (Whitaker). He then called Mary Beth Craft and asked her to order an update for the Corsons from the same firm supplying the assumption warranty deed. Whitaker testified that Corson had not mentioned Taylor Smith doing the title work and that the first time he heard the name "Taylor Smith" is when Jim Corson phoned him to discuss bringing this lawsuit.
Charles Garrick, whom Jim Corson testified would have purchased his home had it not been for the liens, testified that he and his wife decided, after looking at the house, not to make an offer because they simply were not interested in buying that particular house. He further stated unequivocally that the liens were not a factor in deciding not to make an offer on the Corsons' home.
Roberta (Robbie) Earhart testified as an expert in real estate practices in the Columbus area. She testified that real estate brokers generally informed purchasers of the types of title work available to them and the cost; purchasers were advised to see an attorney if they had questions. She also testified that pursuant to the Multiple Listing Service agreement, real estate agents who procured a buyer were agents of the seller. She further testified that in her opinion the Corsons' house could have sold in 1982 for approximately $74,000.00.
THE LAW
APPELLANT CENTURY 21 DEEP SOUTH PROPERTIES
REVERSIBLE ERROR EXISTS DUE TO THE REFUSAL OF THE TRIAL COURT TO GRANT APPELLANT CENTURY 21 DEEP SOUTH PROPERTIES' MOTIONS FOR SPECIFIC FINDINGS OF FACT AND CONCLUSIONS OF LAW.
Uniform Chancery Court Rule 4.01 and Mississippi Rule of Civil Procedure 52 authorize the court to make specific findings of fact and state separately its conclusions of law thereon. While M.R.C.P. 52 gives the court discretion to make such findings absent a party's request, it further provides, as does Uniform Chancery Court Rule 4.01, that a chancellor "shall" make such findings when required or requested by a party to the suit.
In Tricon Metals & Services, Inc. v. Topp, 516 So.2d 236, 239 (Miss. 1987), on remand (for findings of fact and conclusions of law), 537 So.2d 1331 (Miss. 1989), we held that in complex cases tried upon the facts without a jury, M.R.C.P. 52 should be construed to read that the court "generally should" find facts specially and separately state its conclusions of law thereon even absent a request by a party. Failure to do so will be found an abuse of discretion. Id. Although referring to an administrative agency or commission acting as the fact finder, this Court in Duckworth v. State Bd. of Pharmacy, 583 So.2d 200, 202 (Miss. 1991), said that standing alone, the failure to make findings of fact is not generally cause for reversal. However, *367 this statement was made in conjunction with the caveat that the failure to recite the facts found is the only defect; otherwise the entity proceeded on a correct theory of law or the omission does not impede proper review by the reviewing court. Id.
In this case there were requests that the chancery court make particularized findings of fact and conclusions of law revealing the basis of Century 21's liability; the judge declined to do so but did make general findings of fact and conclusions of law. Technically, the chancellor has complied with the requirements of M.R.C.P. 52 and Uniform Chancery Court Rule 4.01. Although particularized findings would have aided us in reviewing this cause, there is no ground for reversal on this issue.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ITS ITS APPARENT FINDING OF AGENCY AND/OR SUB-AGENCY BETWEEN THE CORSONS AND APPELLANT CENTURY 21 DEEP SOUTH PROPERTIES LTD. AND FRANK WHITAKER AND CENTURY 21.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY HOLDING APPELLANT CENTURY 21 DEEP SOUTH PROPERTIES LIABLE TO THE CORSONS WHEN THERE WAS NO EVIDENCE OF ANY BREACH OF ANY LEGAL DUTY BY APPELLANT CENTURY 21 DEEP SOUTH PROPERTIES TO THE CORSONS.
"On appeal this Court will not reverse a Chancery Court's findings, be they of ultimate fact or of evidentiary fact, where there is substantial evidence supporting those findings." Cooper v. Crabb, 587 So.2d 236, 239 (Miss. 1991), citing Mullins v. Ratcliff, 515 So.2d 1183, 1189 (Miss. 1987); Norris v. Norris, 498 So.2d 809, 814 (Miss. 1986); Gilchrist Machinery Co., Inc. v. Ross, 493 So.2d 1288, 1292 (Miss. 1986). "Unless the Chancellor's determination of fact is manifestly wrong, this Court will uphold his decision." Cheeks v. Herrington, 523 So.2d 1033, 1035 (Miss. 1988), citing Dillon v. Dillon, 498 So.2d 328, 329 (Miss. 1986); Dubois v. Dubois, 275 So.2d 100 (Miss. 1973).
This Court does not sit to redetermine questions of fact. Johnson v. Black, 469 So.2d 88, 90 (Miss. 1985), on motion for statutory damages, 480 So.2d 519 (Miss. 1985). When substantial evidence supports the findings of the Chancellor we will not disturb his conclusions, notwithstanding that we might have found otherwise as an original matter. Jim Murphy & Associates, Inc. v. LeBleu, 511 So.2d 886, 894 (Miss. 1987), affirmed following remand, 557 So.2d 526 (Miss. 1990).
Generally, when there are no specific findings of fact, this Court will assume that the trial court made determinations of fact sufficient to support its judgment. Pace v. Owens, 511 So.2d 489, 492 (Miss. 1987); Rives v. Peterson, 493 So.2d 316, 317 (Miss. 1986). Where there are no specific findings of fact provided by the chancellor, this Court must look to the evidence and see what state of facts will justify the decree. Pace, 511 So.2d at 492; Boatright v. Horton, 233 Miss. 444, 102 So.2d 373, 374 (1958).
It should be noted that "[a]s a practical matter, we can better perform our function if we know what the trial court did, and why." Tricon Metals & Services, Inc., 516 So.2d at 239. This Court "may not credit unspoken findings not fairly inferrable from the trial court's action." Riddle v. State, 580 So.2d 1195, 1200 (Miss. 1991).
The trial court found Century 21 liable to the Corsons on a negligence theory. The only finding of fact which relates to this issue is that Frank Whitaker was the agent for the Corsons and later also became an agent for the Meiers, which the trial court further stated was a legal impossibility. No factual findings regarding any duty owed by Century 21 or regarding agency between Century 21 and either the Corsons or Whitaker were recited. Nonetheless, the Corsons argue that Century 21 owed them the duty to provide a full title opinion on the property as opposed to an update.
Jim Corson testified that Whitaker told him the responsibility for having title work done was his (Corson's), but that Century *368 21 had already ordered the work from an attorney other than the one Corson had selected. Corson elected to rely on the opinion obtained by Century 21. He claims Whitaker did not discuss the difference between a full title search and an update; Whitaker testified that he told Corson an update was cheaper and Corson chose to have an update performed. The evidence shows that Whitaker then phoned Mary Beth Craft at Century 21 and asked her to order an update from Dunn & Webb, the firm that was to provide the assumption warranty deed. Craft followed these instructions and Frank Ferrell, an associate at Dunn & Webb, performed the title work. Dunn & Webb had not performed the prior title work. Century 21, in its 30(b)(6) deposition, stated that it did not order title updates as opposed to full title searches unless the prior title work had been performed by the same attorney who was to do the update. This policy was followed in order to prevent legal problems such as the one at issue here.
It is basic tort law that before one can be found negligent he must owe a duty to the injured party. There is no contractual duty between Century 21 and the Corsons and Mississippi case law reveals no duty owed by a real estate broker to the purchaser of property. A finding that Whitaker was an agent of Century 21 would not create this duty. However, Century 21 became a gratuitous agent of the Corsons and therefore owed them a duty of care because it undertook the task of ordering title work for the Corsons. Higgins Lbr. Co. v. Rosamond, 217 Miss. 1, 7-9, 63 So.2d 408, 410-11 (1953). See also Coleman v. Louisville Pants Corp., 691 F.2d 762, 766 (5th Cir.1982). Again, whether Whitaker was an agent for Century 21 is irrelevant to this duty. In fact, the evidence shows that Whitaker was an agent of the Meiers' by virtue of the Multiple Listing Service agreement.
The trial court found Century 21 liable to the Corsons in negligence. Only under a gratuitous agency theory does Century 21 owe a duty to the Corsons and we will assume such a factual finding to support the judgment below. There is no evidence tending to show that the chancellor was manifestly wrong in this implied finding nor is there any reason to assume that the chancellor found Whitaker was an agent of Century 21. There was no error here.
As the chancellor found Century 21 liable to the Corsons under a negligence theory, we will further assume he found a breach of legal duty by Century 21. There was ample evidence presented that an updated title opinion was insufficient under the circumstances of this case. (Testimony of Frank Ferrell, Donald Steighner, David Smith, and Century 21 via Thomas Vice). But Century 21 and Whitaker, real estate brokers pursuant to Miss. Code Ann. § 73-35-3 (Supp. 1991), had no duty to advise the Corsons, who were free to retain their own attorney for advice on this matter. Century 21 was the agent of the Meiers, the sellers in this transaction. Whitaker, by virtue of the Multiple Listing Service agreement, was also an agent of the Meiers. Real estate brokers have a duty to act solely for the benefit of their principals in all matters connected with the agency. Smith v. Sullivan, 419 So.2d 184, 187 (Miss. 1982).
Neither Century 21 nor Whitaker owed the Corsons any duty until they offered to order the title work selected by Jim Corson. (As all claims against Whitaker were dismissed with prejudice following execution of a covenant not to sue, we need not address any duty he may have owed the Corsons.) The duty of Century 21's gratuitous agency was limited by its scope to obtain a title update on the subject property.
Century 21 assumed a limited duty of care to the Corsons when it gratuitously undertook the task of obtaining title work for them. Jim Corson chose to have only an update done because it was cheaper. Century 21 owed the Corsons a duty to use care in obtaining this update or to give notice that it would not obtain the update while the Corsons had other means available to obtain the update. Higgins, 217 Miss. at 8, 63 So.2d 408. Century 21 ordered the update and the work was performed *369 competently by Frank Ferrell of Dunn & Webb. There was no breach of the duty assumed by Century 21.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR DUE TO THE FAILURE TO DISMISS CENTURY 21 DEEP SOUTH PROPERTIES AT THE END OF PLAINTIFFS' CASE IN CHIEF.
At the close of the plaintiffs' case Century 21 moved that the trial court dismiss it pursuant to M.R.C.P. 12(b)(6), failure to state a claim upon which relief can be granted. At this point in the proceedings, the proper motion would have been a motion to dismiss pursuant to M.R.C.P. 41(b). The judge must consider the evidence fairly, rather than in the light most favorable to the plaintiff. Ainsworth v. Callon Petroleum Co., 521 So.2d 1272, 1274 (Miss. 1987); Mitchell v. Rawls, 493 So.2d 361, 362 (Miss. 1986). If he would find for the defendant, the case should be dismissed. Smith v. Smith, 574 So.2d 644, 649 (Miss. 1990), citing Davis v. Clement, 468 So.2d 58, 61 (Miss. 1985); Ezell v. Robbins, 533 So.2d 457, 460 (Miss. 1988); Mitchell, 493 So.2d at 362-63. The court must deny a motion to dismiss only if the judge would be obliged to find for the plaintiff if the plaintiff's evidence were all the evidence offered in the case. Smith, 574 So.2d at 649, citing Davis, 468 So.2d at 61. This Court applies the substantial evidence/manifest error standards to an appeal of a grant or denial of a motion to dismiss pursuant to M.R.C.P. 41(b). Ainsworth, 521 So.2d at 1274, citing Davis, 468 So.2d at 62; Ezell, 533 So.2d at 460. Although the defendant retains the right to challenge the weight or sufficiency of the evidence to sustain the judgment against him, appeal of the denial of a motion to dismiss made at the conclusion of the plaintiff's case will be waived if the defendant proceeds with his case. Stallings v. Bailey, 558 So.2d 858, 859 (Miss. 1990).
The evidence before the court showed that although initially owing no duty to the Corsons, Century 21 by its actions created a duty. As discussed previously, there was no breach of this duty by Century 21. Even assuming the hurdles of breach and causation have been cleared, a party alleging negligence must then prove damages. Lyle v. Mladinich, 584 So.2d 397, 399 (Miss. 1991); May v. V.F.W. Post No. 2539, 577 So.2d 372, 375 (Miss. 1991). Despite the chancellor's findings, the Corsons failed in this endeavor. There being no breach and insufficient proof of damages, Century 21 could not be liable to the Corsons in negligence, the only theory alleged. Considering the evidence fairly, the trial court should have granted the motion to dismiss. However, because Century 21 went forward with proof of its own, it waived the right to appeal this issue. If we review this point as though Century 21 had challenged the weight or sufficiency of the evidence to sustain the judgment against it, we must look at all evidence in the record and not merely that before the court at the time of the motion to dismiss. Stallings, 558 So.2d at 859. Even from this point of reference the Corsons failed to prove both breach and damages. The trial court was manifestly in error and we reverse and render as to Century 21.
THE TRIAL COURT COMMITTED ERROR THROUGH THE ADMISSION OF THE TESTIMONY OF JAMES T. MARSH.
"The relevancy and admissibility of evidence are largely within the discretion of the trial court and reversal may be had only where that discretion has been abused." Johnston v. State, 567 So.2d 237, 238 (Miss. 1990), citing Hentz v. State, 542 So.2d 914, 917 (Miss. 1989); Monk v. State, 532 So.2d 592, 599 (Miss. 1988). Unless the trial judge's discretion is so abused as to be prejudicial to a party, this Court will not reverse his ruling. Shearer v. State, 423 So.2d 824, 826 (Miss. 1983), citing Page v. State, 295 So.2d 279 (Miss. 1974). The discretion of the trial judge must be exercised within the boundaries of the Mississippi Rules of Evidence. Johnston, 567 So.2d at 238. See M.R.E. 103(a), 104(a).
Marsh testified as an expert on tax preparations and calculations and loss of use of income in an effort to prove the amount of loss of use of income sustained *370 by Jim Corson. It appears that Marsh was properly qualified as an expert based on his knowledge, skill, experience, training, and education as required by M.R.E. 702. Rule 702 also requires that testimony of an expert help the trier of fact understand the evidence or determine a fact in issue. Marsh's testimony did neither. The chancellor did not need assistance understanding the evidence and it does not appear that Marsh's testimony was offered for this purpose. Rather, it seems his testimony was offered to help the chancellor determine the amount of damages suffered by the Corsons, but this was not a fact at issue.
Marsh testified as to the amount of income lost by the Corsons due to Jim Corson's failure to take the out of state job available to him in 1982. There was no proof that Jim Corson was unable to take the job; Jim Corson told the company he could not take the job as he was unable to move due to legal problems with his house. Jim Corson could have attempted to sell his house or could have rented his home and moved to accept the job, if it had been actually offered to him. Instead, he chose to remain unemployed. As Corson's unemployment was not a result of the liens on the house, any loss of income he sustained is not relevant to this case. Pursuant to M.R.E. 402, the testimony of James Marsh should not have been admitted. The trial court failed to exercise its discretion within the boundaries of the Mississippi Rules of Evidence. However, as Century 21 should not have been found liable to the Corsons even with the admission of Marsh's testimony, it can not be said that Century 21 suffered prejudice as a result of the chancellor's error. "Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected... ." M.R.E. 103(a). There is only harmless error here.
THE TRIAL COURT COMMITTED ERROR THROUGH THE ADMISSION OF THE TESTIMONY OF ROBBIE EARHART AS TO THE CORSONS' DAMAGES.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY THE AWARD OF DAMAGES AGAINST CENTURY 21 DEEP SOUTH PROPERTIES.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR IN THE APPARENT HOLDING THAT CENTURY 21 DEEP SOUTH PROPERTIES, LTD., WAS LIABLE FOR ACTIONS OR IN-ACTIONS OF FRANK WHITAKER.
THE DAMAGES AWARDED BY THE TRIAL COURT FOR LIENS ON THE CORSONS' PROPERTY ARE IN ERROR AS THE CORSONS NEVER LISTED THEIR PROPERTY FOR SALE WHILE THE LIENS EXISTED.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY NOT APPLYING TO CORSONS THE DOCTRINES OF ASSUMPTION OF RISK AND/OR CONTRIBUTORY NEGLIGENCE.
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY REQUIRING A REALTOR/BROKER TO ABIDE BY THE STANDARDS OF AN ATTORNEY.
Appellant's failure to cite any authority in support of these assignments of error precludes this Court from considering these claims on appeal. R.C. Petroleum, Inc. v. Hernandez, 555 So.2d 1017, 1023 (Miss. 1990); Kelly v. State, 553 So.2d 517, 521 (Miss. 1989), citing Brown v. State, 534 So.2d 1019, 1023 (Miss. 1988), cert. denied, 490 U.S. 1007, 109 S.Ct. 1643, 104 L.Ed.2d 158; Shive v. State, 507 So.2d 898 (Miss. 1987), and Pate v. State, 419 So.2d 1324 (Miss. 1982).
APPELLANTS GREGORY AND WANDA MEIERS
THE APPELLEES WERE NOT ENTITLED TO DAMAGES, OTHER THAN NOMINAL DAMAGES, AGAINST GREGORY A. MEIERS AND WANDA M. MEIERS FOR THEIR BREACH OF THE WARRANTY CONTAINED IN THE ASSUMPTION WARRANTY DEED.
*371 In reviewing errors of law, this Court proceeds de novo. Cooper v. Crabb, 587 So.2d 236, 239 (Miss. 1991); Holliman v. Charles L. Cherry & Associates, 569 So.2d 1139, 1147 (Miss. 1990); Planters Bank & Trust Co. v. Sklar, 555 So.2d 1024, 1028 (Miss. 1990).
The chancellor did not state which warranty was breached by the Meiers. The contract of sale, executed by the Meiers and the Corsons in the month prior to the execution of the assumption warranty deed, recites that the Meiers' agree to "tender Warranty Deed conveying Good and Merchantable Title... ." Although the Corsons only alleged a breach of the assumption warranty deed in their complaint(s) they argue breach of the contract of sale on appeal. As this Court need not address an issue raised for the first time on appeal, we turn immediately to breach of the assumption warranty deed.
The chancellor found the Meiers jointly and severally liable to the Corsons in the amount of $75,000.00 for breach of warranty. That the Corsons acquired the land by warranty deed from the Meiers is undisputed. The granting clause of the deed reads as follows, "grantors, do hereby convey and warrant unto ... grantees, ... ." "The effect of the word `warrant' in a conveyance, with no restrictive words, embraces all five covenants known to common law, i.e., seisin, power to sell, freedom from incumbrance, quiet enjoyment and warranty of title. Mississippi Code Annotated § 89-1-33 (1972)." Greenlee v. Mitchell, 607 So.2d 97 (Miss. 1992).
The covenants of seisin and power to sell are an assurance that the grantor has the estate he purports to convey and are breached if a third person has a title that may defeat the estate granted by the grantor. Howard v. Clanton, 481 So.2d 272, 276 (Miss. 1985); H. Weston Lumber Co. v. Lacey Lumber Co., 123 Miss. 208, 85 So. 193, 195 (1920). There was no allegation and no proof that these covenants were breached. The covenants of quiet enjoyment and warranty of title are breached only by eviction or the equivalent thereof. Howard, 481 So.2d at 275; Bridges v. Heimburger, 360 So.2d 929, 931 (Miss. 1978). Again there were no allegations or proof that either of these covenants were breached.
The only remaining covenant is freedom from incumbrance, which is a guarantee that the property is not subject to any rights or interests that would diminish the value of the land. Howard, 481 So.2d at 275. Howard cites mortgages, easements and liens as examples of interests that would diminish the value of the land and therefore, breach the covenant of freedom from incumbrance. Id. There were four liens on the property conveyed by the Meiers to the Corsons at the time of the conveyance. The covenant of freedom from incumbrance was breached.
The liens on the property were removable incumbrances as opposed to permanent incumbrances such as easements. Damages available for a breach of the covenant of freedom from incumbrance by a removable incumbrance are limited to the reasonable expense of removing it, not to exceed the value of the land. Simon v. Williams, 140 Miss. 854, 867, 105 So. 487 (1925). If the incumbrance is not extinguished by the land owner, a mere technical breach is effected and only nominal damages are recoverable. Id.; Stokely v. Cooper, 150 Miss. 143, 157, 116 So. 538, 540 (1928). That is the situation in this case: the Corsons are entitled to only nominal damages.
Attorney fees are only allowed if the land owner incurs such fees curing or defending title pursuant to a breach of warranty. Bridges, 360 So.2d at 932. "[A] fee incurred by the Covenantee in bringing an action against the Covenantor for damages will in no instance be allowed." Id.
There being only a technical breach of the covenant of freedom from incumbrance, the Corsons are entitled to only nominal damages and no attorney fees from the Meiers. The chancellor was wrong as a matter of law. We reverse and remand as to the Meiers for a determination of nominal damages.
*372 IF THE APPELLEES ARE ENTITLED TO A JUDGMENT AGAINST GREGORY A. MEIERS AND WIFE, WANDA M. MEIERS, THEN THE MEIERS SHOULD RECOVER THE AMOUNT OF THE JUDGMENT FROM DONALD J. STEIGHNER IN ADDITION TO THE AMOUNT AWARDED BY THE LOWER COURT.
Again, we are presented with a question of law which requires a de novo review by this Court. Cooper, 587 So.2d at 239. The Meiers pursued a malpractice claim against Steighner to recover any amount they would be ordered to pay the Corsons. The Meiers were found jointly and severally liable to the Corsons in the amount of $75,000.00. The chancellor found Steighner liable to the Meiers in the amount of $5,000.00 due to his negligence in examining their title. In light of the determination of the first issue presented for appeal by the Meiers, above, the Meiers should only be liable to the Corsons for nominal damages.
A legal malpractice case requires proof by a preponderance of the evidence the following: (1) existence of a lawyer-client relationship; (2) negligence on the part of the lawyer in handling the affairs entrusted to him; (3) proximate cause; and (4) injury. Hickox v. Holleman, 502 So.2d 626, 633 (Miss. 1987). In the case at bar there is no dispute that a lawyer-client relationship existed and Steighner's negligence in handling the title work for the Meiers was stipulated at trial. That leaves only proximate cause and injury.
In the usual legal malpractice case, in order to prove proximate cause the plaintiff must show that but for his attorney's negligence he would have been successful in the prosecution or defense of the underlying action. Hickox, 502 So.2d at 634. In the context of the present case, the Meiers carry their burden because but for Steighner's negligence they would not have been named as defendants in the first place. Proof of the injury suffered by the Meiers is equally clear the amount of damages they are ordered to pay the Corsons and the amount of attorney fees incurred in this action.
The trial court was manifestly in error when it failed to award the Meiers a sum sufficient to cover the amount they were ordered to pay the Corsons and the amount of attorney fees incurred by the Meiers in this action. On remand the Meiers are entitled to indemnity from Steighner for the amount of nominal damages determined and for their attorney fees incurred in this action.
APPELLANT DONALD J. STEIGHNER
MISSISSIPPI REQUIRES AN ATTORNEY CLIENT RELATIONSHIP IN AN ACTION BASED ON ATTORNEY OR LEGAL MALPRACTICE.
The chancellor found Steighner jointly and severally liable to the Corsons in the amount of $75,000.00 due to his negligence in performing title work for the Meiers. Additionally, punitive damages in the amount of $50,000.00 were awarded the Meiers for Steighner's gross negligence in frustrating the Corsons' efforts to solve the title problems he created. This assignment of error must receive a de novo review as it involves a question of law. Cooper, 587 So.2d at 239.
This Court has indeed consistently held that a legal malpractice action requires an attorney-client relationship. Singleton v. Stegall, 580 So.2d 1242, 1244 (Miss. 1991); Hickox v. Holleman, 502 So.2d 626, 633 (Miss. 1987); Hutchinson v. Smith, 417 So.2d 926, 927 (Miss. 1982). The Corsons do not claim such a relationship with Steighner. The fact that Steighner corrected the easement problem discovered by Dunn & Webb in the course of their title update for the Corsons, at the request of Century 21, did not create an attorney-client relationship between Steighner and the Corsons. Even if such a relationship had been created when Steighner did the corrective work, the Corsons could not recover as they have proven no damages.
EVEN UNDER EXPANDED THEORIES OF LIABILITY, THE CORSONS CANNOT RECOVER HERE BECAUSE *373 NEITHER THEY, NOR THEIR ATTORNEY, RELIED ON WORK PERFORMED BY STEIGHNER.
As stated above, the Corsons do not claim an attorney-client relationship with Steighner. Instead, they rely on Miss. Code Ann. § 11-7-20 (Supp. 1990), which abolished the necessity of privity in "all causes of action for ... economic loss brought on account of negligence, ...", and claim reliance on Steighner's title opinion. It is argued by Steighner that the Corsons did not rely on his title opinion, therefore liability could not be imposed upon him. Although no copy of Steighner's title opinion was requested or received by the Corsons, in choosing to have only an update performed they indeed relied on the accuracy of Steighner's prior title work. But this is not the determinative issue.
Regarding § 11-7-20, we have said: "[a] plain reading of the statute clearly suggests that it was the legislative intent to remove the privity requirement in all cases." Keyes v. Guy Bailey Homes, Inc., 439 So.2d 670, 673 (Miss. 1983). However, the effective date of Miss. Code Ann. § 11-7-20 was 1976. The cases cited above for the proposition that an attorney-client relationship is necessary in a legal malpractice action were all decided after 1976. While privity is a necessary component of the attorney-client relationship, a requirement of privity in other cases of negligence is "forbidden under our law." Touche Ross v. Commercial Union Ins., 514 So.2d 315, 321 (Miss. 1987).
Our case law regarding legal malpractice is, to the extent that privity is required, in conflict with Miss. Code Ann. § 11-7-20 unless there is a distinction between garden variety negligence cases and actions for legal malpractice. The elements of negligence are duty, breach, proximate cause, and damages. Lyle v. Mladinich, 584 So.2d at 398-99. The elements of legal malpractice are attorney-client relationship (which imposes a duty), negligence (breach), proximate cause, and damages. Hickox, 502 So.2d at 633. At most, a legal malpractice action is a negligence action dressed in its Sunday best.
Even if these are viewed as two separate and distinct causes of action, does one's status as an attorney insulate him from a suit based on negligence wherein the plaintiff would be required to prove only the traditional elements of duty, breach, proximate cause, and damages? Although found only in dicta [Beaman v. Helton, 573 So.2d 776 (Miss. 1990) (Sullivan, J., dissenting)], this Court required a traditional doctor-patient relationship as an element in medical malpractice cases until our decision in Meena v. Wilburn, 603 So.2d 866, 869 (Miss. 1992).
In Meena, which overruled Beaman to the extent that it held a negligence action against a doctor required a doctor-patient relationship, we stated that the presence or absence of a doctor-patient relationship is merely a factor to consider in determining the duty owed. Meena, 603 So.2d at 870. Although Miss. Code Ann. § 11-7-20 was not mentioned in Meena (it was not an issue; a requirement of doctor-patient relationship would of necessity require proof of privity, as does a requirement of attorney-client relationship, but in Meena there was actual privity while there is not in the case at bar), we find that the same reasoning should apply to negligence actions against attorneys, to wit: the presence or absence of an attorney-client relationship is merely one factor to consider in determining the duty owed rather than being the single factor which establishes that a duty is owed. Applying the Meena reasoning to legal malpractice actions, the question "to whom is a duty owed?" takes center stage.
In this context, Touche Ross v. Commercial Union Ins., 514 So.2d 315 (Miss. 1987), which dealt with liability of independent auditors, is helpful. In Touche Ross, we rejected limiting liability to known third parties because of Miss. Code Ann. § 11-7-20. Id. at 321. Instead, we found that
an independent auditor is liable to reasonably foreseeable users of the audit, who request and receive a financial statement from the audited entity for a proper business purpose, and who then detrimentally rely on the financial statement, *374 suffering a loss, proximately caused by the auditor's negligence.
Touche Ross, 514 So.2d at 322. Auditors were advised that they could protect themselves from liability to an unlimited number of users by entering into an agreement with the audited entity limiting dissemination of the audits. Id. at 322-23. See also Strickland v. Rossini, 589 So.2d 1268 (Miss. 1991) (liability of experts or professional persons negligently supplying information upon which others rely extends to foreseeable recipients).
Limitation of liability in this manner is applicable to an attorney performing title work upon which another attorney's client subsequently relies, as is the case with a title update. Although a copy of the title opinion is not necessary, the client of an attorney performing a subsequent update relies upon the fact that the prior title opinion revealed any encumbrances or deficiencies of title. Reliance on a licensed professional to perform his work competently is imminently reasonable. However, any title deficiencies or encumbrances of record would still effect constructive notice.
Today we modify the requirements of legal malpractice actions based on an attorney's negligence in performing title work by abolishing the requirement of attorney-client relationship and extending liability to foreseeable third parties who detrimentally rely, as we have done in cases involving other professions. An attorney performing title work will be liable to reasonably foreseeable persons who, for a proper business purpose, detrimentally rely on the attorney's title work, suffering loss proximately caused by his negligence. Unfortunately for the Corsons, they still do not prevail as they have failed to prove damages a necessary element in any event.
CROSS-APPEAL
WAS THE TRIAL COURT MANIFESTLY IN ERROR IN CUTTING THE CORSONS' DAMAGES IN HALF WHEN THE PROOF OF LOSS OF WAGES WAS UNDISPUTED?
The Corsons argue that the testimony of Jim Preston and James Marsh established damages in the amount of $156,935.00 for lost after-tax income. As discussed previously, Jim Corson prevented Jim Preston from offering him a job by stating that he could not accept a position out of state immediately because of legal problems with his house. There was no evidence that he could not sell his house because of the liens in existence at the time. James Marsh's testimony was therefore irrelevant and should not have been admitted. The chancellor did err, but the error was an award of damages at all rather than an award in an amount less than requested. In light of our disposition of previous issues, this issue is moot.
WAS THE TRIAL COURT IN ERROR IN RULING THAT THE OFFERING OF AN ATTORNEY FOR PROOF ON ATTORNEY'S FEES OPERATED AS A WAIVER OF ATTORNEY-CLIENT PRIVILEGE GENERALLY?
This final assignment of error must receive a de novo review as it involves a question of law. Cooper, 587 So.2d at 239. The Corsons offered testimony of Edwin Hannan, the attorney who represented them previously in this matter, to prove the amount of attorney fees they had incurred. In response to Hannan's claim of attorney-client privilege the Corsons waived the privilege limited to the issue of attorney fees. When Hannan attempted to remove cover letters from billings before their introduction into evidence, again asserting attorney-client privilege, the chancellor determined that the waiver of privilege must be for all purposes or for none at all. In response to this, Hannan was dismissed as a witness and the waiver was withdrawn.
The attorney-client privilege can be waived for limited purposes. In Bennett v. State, 293 So.2d 1, 5 (Miss. 1974), overruled on other grounds, 579 So.2d 555, 559 (Miss. 1991), this Court found that testimony by a client regarding communications with his attorney about the possibility of appeal operated as a waiver of the privilege on the "sole issue of whether *375 or not a discussion of appeal was had." Although in Bennett the testimony of the client was an accusation against his attorney and a limited waiver of privilege allowed the attorney to respond to this attack, it nonetheless allowed a partial waiver of attorney-client privilege. As limited waiver is allowed to benefit the attorney, limited waiver is allowed to benefit the client as well. The chancellor erred on this issue but the Corsons were not prejudiced by his erroneous determination.
Mississippi follows the American rule regarding attorney fees: unless a statute or contract provides for imposition of attorney fees, they are not recoverable. Grisham v. Hinton, 490 So.2d 1201, 1205 (Miss. 1986). When there is no contractual provision or statutory authority providing for attorney fees, they may not be awarded as damages unless punitive damages are also proper. Central Bank of Mississippi v. Butler, 517 So.2d 507, 512 (Miss. 1987). In this case there is neither a contractual provision nor a statute providing for attorney fees. As the Corsons failed to prove actual damages, no punitive damages are warranted. Finding only harmless error, we affirm on this issue.
CONCLUSION
It can be said as a matter of law that Century 21 gratuitously assumed a duty to the Corsons to obtain a title update on the subject property or to give notice that it would not have the title work done while the Corsons had other means available to obtain the update. Even viewing all evidence in the record, there was no breach of the duty assumed by Century 21. It follows that Century 21 could not have been liable to the Corsons under a theory of negligence. Accordingly, we reverse and render as to Century 21.
We affirm the chancellor's finding that Steighner was negligent as regards the Meiers. The Corsons are entitled to only nominal damages and no attorney fees from the Meiers as there was merely a technical breach of the covenant of freedom from incumbrance. As the Meiers would not have been liable to the Corsons but for Steighner's negligence, the Meiers are entitled to indemnity from Steighner in a sum sufficient to cover the amount of their attorney fees and the nominal damages they must pay the Corsons. As to the Meiers, we affirm the chancellor's finding of breach of warranty. We reverse and remand to the Chancery Court of Lowndes County for a determination of nominal damages due the Corsons and for proper determination of the amount of the Meiers' indemnity from Steighner, consistent with this opinion.
With this opinion we modify legal malpractice actions based on an attorney's negligence in performing title work by abolishing the requirement of attorney-client relationship and extending liability to foreseeable third parties who detrimentally rely on such title work, suffering a loss, proximately caused by the attorney's negligence. The presence or absence of an attorney-client relationship is now merely one factor to consider in determining the duty owed. Notwithstanding this modification, we reverse and render as to the Corsons' claim against Steighner because the Corsons failed to prove damages.
ON DIRECT APPEAL: AFFIRMED IN PART; REVERSED AND RENDERED IN PART; REVERSED AND REMANDED IN PART TO THE CHANCERY COURT OF LOWNDES COUNTY, MISSISSIPPI, FOR PROCEEDINGS CONSISTENT WITH THIS OPINION. ON CROSS-APPEAL: AFFIRMED.
ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, PITTMAN, BANKS, McRAE and ROBERTS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1674291/ | 835 S.W.2d 155 (1992)
Alan T. GREGORY and Roberta M. Gregory, Appellants,
v.
SUNBELT SAVINGS, F.S.B., Appellee.
No. 05-91-00093-CV.
Court of Appeals of Texas, Dallas.
June 19, 1992.
Rehearing Denied August 13, 1992.
*157 Richard D. Anigian, Dallas, for appellants.
Bill Boyd, McKinney, for appellee.
Before STEWART, MALONEY and KAPLAN, JJ.
KAPLAN, Justice.
This is a homestead case. Alan and Roberta Gregory sued Sunbelt Savings, F.S.B. (Sunbelt) for injunctive and declaratory relief in connection with the foreclosure of certain residential property. The trial court rejected the Gregorys' homestead claim and awarded Sunbelt possession of the property.[1] The Gregorys appeal. We affirm the trial court's judgment.
FACTUAL BACKGROUND
On April 15, 1985, the Gregorys executed a promissory note payable to Sunbelt Savings Association of Texas (Sunbelt Texas) in the principal amount of $395,000 (Note One). The proceeds of Note One were used to acquire a residential lot at 4516 Belclaire, Highland Park, Texas (the property). Note One was secured in part by a deed of trust (Deed of Trust One). Note One was scheduled to mature on January 15, 1986.
On November 1, 1985, the Gregorys executed a second promissory note payable to Sunbelt Texas in the principal amount of $672,000 (Note Two). The initial disbursement of the Note Two proceeds was used to pay $395,000 in principal and $19,663.10 in accrued interest on Note One. Note Two was secured in part by a second deed of trust (Deed of Trust Two). Note Two was scheduled to mature on August 1, 1986.
On August 1, 1986, the Gregorys executed a renewal and extension promissory note in the principal amount of $672,000 (Note Three). This note was secured in part by Deed of Trust Two by virtue of a Modification of Note and Lien executed by the Gregorys (Lien Modification). Note Three was scheduled to mature on September 1, 1986.
The Gregorys defaulted. In August 1988, the Federal Home Loan Bank Board closed Sunbelt Texas and appointed the FSLIC as receiver. The FSLIC then transferred substantially all of the assets of Sunbelt Texas, including the Gregory notes and all related security agreements, to Sunbelt.
Sunbelt foreclosed on the property pursuant to Deed of Trust Two on March 6, 1990. Sunbelt purchased the property at the foreclosure sale and filed a forcible detainer action seeking to evict the Gregorys. The Gregorys filed suit to prevent Sunbelt from proceeding with the forcible detainer action and asked the court to declare the foreclosure sale and deed-of-trust lien void. Sunbelt filed a counterclaim for the deficiency remaining after the foreclosure sale. The trial court entered judgment for Sunbelt on all claims. This appeal follows.
ISSUES ON APPEAL
The broad issue on appeal is whether the Belclaire property constituted the Gregorys' residential homestead at the time Deed of Trust Two was executed. The Gregorys challenge the sufficiency of the evidence to support the trial court's findings that: (1) the property did not constitute their residential homestead; and (2) even if the property was homestead, the Gregorys are estopped from asserting such homestead rights to defeat Sunbelt's entitlement to possession.[2] The Gregorys also contend *158 that enforcement of the first deed-of-trust lien is barred by the applicable statute of limitations.
STANDARD OF REVIEW
Findings of fact in a case tried to the court have the same force and effect as a jury's verdict on special issues. City of Clute v. City of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ.AppHouston [14th Dist.] 1977, writ ref'd n.r.e.). We review the trial court's findings of fact by the same standards that are applied in reviewing the evidence supporting a jury's answers. Ziehen v. Piatt, 786 S.W.2d 797, 799 (Tex.App.Houston [14th Dist.] 1990, no writ).
In reviewing a no-evidence point of error, we consider only the evidence and inferences that support the challenged finding. All contrary evidence and inferences are disregarded. Best v. Ryan Auto Group, Inc., 786 S.W.2d 670, 671 (Tex. 1990). We uphold the trial court's findings if there is more than a scintilla of evidence to support them. Stedman v. Georgetown Sav. & Loan Ass'n, 595 S.W.2d 486, 488 (Tex. 1979).
In reviewing a factual-sufficiency point of error, we consider all of the evidence. A finding will be set aside only if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it is wrong and manifestly unjust. Ziehen, 786 S.W.2d at 799.
HOMESTEAD
The Gregorys first challenge the trial court's finding that the property was not their homestead at the time Deed of Trust Two was executed.
1. Applicable Law
As a general rule, a homestead is protected against all debts except purchase money and specified improvements. Article XVI, section 50 of the Texas Constitution provides, in pertinent part:
The homestead of a family ... is hereby protected from forced sale for the payment of all debts except for the purchase money thereof, or a part of such purchase money, the taxes due thereon, or for work and material used in constructing improvements thereon____ No mortgage, trust deed, or other lien on the homestead shall ever be valid, except for the purchase money thereof, or improvements made therein, as hereinbefore provided.... All pretended sales of the homestead involving any condition of defeasance shall be void.
Tex.Const. art. XVI, § 50.
The party claiming a homestead exemption has the burden to prove that the property constituted a homestead at the time the deed of trust was executed. Burk Royalty Co. v. Riley, 475 S.W.2d 566, 568 (Tex. 1972); Stewart v. Clarke, 677 S.W.2d 246, 250 (Tex.AppCorpus Christi 1984, no writ). The person seeking to establish homestead rights must prove concurrent usage and intent to claim the property as a homestead. Stewart, 677 S.W.2d at 250; Texas Commerce Bank-Irving v. McCreary, 677 S.W.2d 643, 645 (Tex. App.Dallas 1984, no writ); Sims v. Beeson, 545 S.W.2d 262, 263 (Tex.Civ.App. Tyler 1976, writ ref'd n.r.e.). The homestead character of property can be established prior to actual occupancy when the owner intends to improve and occupy the premises as a homestead. Preparations for that purpose must be of such a character and have proceeded to such an extent as to manifest, beyond a reasonable doubt, the intention to complete the improvements and to reside upon the place as a home. Bartels v. Huff, 67 S.W.2d 411, 412 (Tex. Civ.App.San Antonio 1933, writ ref'd).
The determination whether property constitutes a homestead at the time the deed of trust is executed is a question of fact. Wentworth v. Collins, 115 S.W.2d *159 442, 446 (Tex.Civ.App.Fort Worth 1938, writ dism'd).
2. Application of Law to the Facts
The intent of the parties and usage of the property at the time Deed of Trust Two was executed were hotly contested at trial. There is some evidence that the Gregorys intended the property to be their homestead. The Gregorys rented a house when they moved to Dallas in 1981. They also had houses in two other states but did not claim either property as a residential homestead. In April 1985, the Gregorys purchased the residential lot on Belclaire with the proceeds of Note One. Roberta Gregory testified that she and her husband acquired the property with the intent to use it as a family homestead. She also testified that Sunbelt Texas knew that the property was to be used as their homestead. By the time Deed of Trust Two was executed in November 1985, the house originally on the Belclaire lot had been razed and a foundation had been laid for a new house. The Gregorys moved into the house in May 1986 and still live there.
There is also some evidence that the Gregorys did not intend the property to be their homestead at the time Deed of Trust Two was executed. The Gregorys represented in both Deeds of Trust One and Two that the property did not constitute their residential homestead. There were no overt acts of homestead usage at the time Deed of Trust Two was executed. The Gregorys did not claim a homestead credit on the property for 1986, more than one year after Deed of Trust Two was executed.
Moreover, Sunbelt Texas treated the loans as commercial. The interest rates on both loans were two percent above prime, typically a commercial rate. The terms of both loans were nine months, as opposed to a thirty-year term which is typical for residential homestead mortgages. Both loans included security agreements and an assignment of rent, neither of which is typical for residential loans. It is also significant that Alan Gregory is in the construction business and is familiar with commercial financing.
We conclude that the evidence is legally and factually sufficient to support the trial court's finding that the property did not constitute a residential homestead at the time Deed of Trust Two was executed. We overrule the Gregorys' first point of error.
ESTOPPEL
The Gregorys next challenge the trial court's finding that they are estopped from asserting any homestead rights in the property to defeat Sunbelt's entitlement to possession.
1. Applicable Law
A mortgagor is estopped to assert a homestead claim where: (1) the mortgagee relied on the mortgagor's representation that the property was not homestead in making the loan secured by the deed of trust; and (2) the mortgagor was not in physical possession of the property at the time the deed of trust was executed so as to give the mortgagee notice of the homestead character. First Coleman Nat'l Bank of Coleman v. Childs, 113 S.W.2d 602, 604 (Tex.Civ.App.Eastland 1938, writ ref'd); Rose v. Turner, 16 S.W.2d 433, 437 (Tex.Civ.App.Galveston 1928, no writ); Turrentine v. Doering, 203 S.W. 802, 806 (Tex.Civ.App.Beaumont 1918, writ ref'd). If the property is not a homestead at the time the deed of trust is executed, the homestead protections have no application, even if the property later becomes a homestead. Inwood North Homeowners' Ass'n v. Harris, 736 S.W.2d 632, 635 (Tex.1987).
2. Application of Law to the Facts
The Gregorys moved into the Belclaire house seven months after Deed of Trust Two was executed. They were not in physical possession of the property at the time the deed of trust was executed so as to give Sunbelt Texas notice of the homestead character. Moreover, the Gregorys represented in both Deeds of Trust One and Two that the property was not their residential homestead. Sunbelt Texas relied on this *160 representation in loaning the Gregorys the money. The Gregorys are therefore estopped to assert a homestead claim despite the fact that the property later became their homestead.
We conclude that the evidence is legally and factually sufficient to support the trial court's finding of estoppel. We overrule the Gregorys' second point of error.
PURCHASE MONEY EXCEPTION
Sunbelt contends that the foreclosure is proper in any event because the indebtedness secured by Deed of Trust Two represented purchase money used to acquire the homestead.
1. Applicable Law
Purchase-money liens on homestead property are not protected from forced sale under the Texas Constitution. Tex.Const. art. XVI, § 50. Borrowers often incur debt secured by a homestead and use only a portion of the proceeds to purchase or improve the homestead property. In such cases, a valid and enforceable lien may be created to the extent of the original purchase-money debt due upon the homestead. M. Kangerga & Bros. v. Willard, 191 S.W. 195, 198 (Tex.Civ.AppTexarkana 1916, no writ). If the debt is later extended by giving new notes, the old lien may be perpetuated without losing its validity. Id. Foreclosure under the valid portion of a deed is proper. Means v. United Fidelity Life Ins. Co., 550 S.W.2d 302, 309 (Tex.Civ.App.El Paso 1977, writ ref'd n.r.e.); Price v. McAnelly, 287 S.W. 77, 80-81 (Tex.Civ.App.San Antonio 1926, writ dism'd).
The proceeds of Note One were used as purchase money to acquire the Belclaire property. Note One was paid with the majority of the loan proceeds from Note Two. The obligation under Note Two represented purchase money for the property to the extent of the pay-off of Note One. The lien created by Deed of Trust Two is enforceable to the extent that it secures the payment of the purchase price. See Tex.Const. art. XVI, § 50; Kangerga, 191 S.W. at 198. The foreclosure under Deed of Trust Two was therefore proper, regardless of the property's status as a homestead.
STATUTE OF LIMITATIONS
The Gregorys finally contend that the applicable statute of limitations barred enforcement of the first deed-of-trust lien. Sunbelt did not purport to foreclose under Deed of Trust One. Rather, Sunbelt foreclosed on the property under Deed of Trust Two.[3] We need only determine whether foreclosure under Deed of Trust Two is barred by limitations.
Note Two was scheduled to mature on August 1, 1986. Deed of Trust Two secured the payment of Note Two. The Gregorys executed a third promissory note and a lien modification in August 1986. Note Three was scheduled to mature on September 1, 1986. Sunbelt foreclosed on the property on March 6, 1990, within the four years allowed by the applicable statute of limitations. See Tex.Civ.Prac. & Rem. Code Ann. § 16.035(b) (Vernon 1986). The foreclosure sale is not barred. We overrule the Gregorys' third and fourth points of error.
The judgment of the trial court is affirmed.
NOTES
[1] The trial court also rendered a $511,210.33 deficiency judgment against the Gregorys and awarded Sunbelt $11,750 in attorney's fees. The Gregorys do not challenge this portion of the judgment on appeal.
[2] It is not clear whether the Gregorys challenge the legal sufficiency or factual sufficiency of the evidence. We will therefor review the evidence under both standards in the interest of justices.
[3] The Greogrys concede in their brief that Sunbelt foreclosed under Deed of Trust Two. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1681146/ | 350 S.W.2d 534 (1961)
ST. PAUL FIRE & MARINE INSURANCE COMPANY, Petitioner,
v.
E. L. CRUTCHFIELD et al., Respondents.
No. A-7836.
Supreme Court of Texas.
October 3, 1961.
*535 Walker, Day & Harris, Fort Worth, Joe Day, Jr., and Don E. Burdette, of above firm, Fort Worth, for petitioner.
Whiteside & Baker, Ernest May, Fort Worth, for respondents.
HAMILTON, Justice.
This is a suit on a fire insurance policy covering a three-room frame house located in Tarrant County, such policy having been issued by the petitioner, St. Paul Fire & Marine Insurance Company, to E. L. Crutchfield, one of the respondents, on November 25, 1954, in the amount of $4,000. Crutchfield and J. W. Selman, the other respondent, brought this suit against the petitioner alleging a total loss of the property in question and seeking to recover the full amount of the policy. The trial court rendered judgment non obstante veredicto that respondents E. L. Crutchfield and J. W. Selman take nothing. The Court of Civil Appeals reversed and rendered for respondents. 333 S.W.2d 203. We affirm the judgment of that court.
An understanding of the case necessitates setting forth the facts leading up to this suit in some detail. Because of the number of parties involved, they will hereafter be identified by name. E. L. Crutchfield acquired the property covered by the St. Paul policy and the premises on which it was located through a contract of sale entered into between him and a Mr. J. W. Bing on October 14, 1953. Prior to such date, Mr. Bing acquired the property from Mr. Selman, receiving a general warranty deed and executing a deed of trust to secure the balance of the indebtedness owed to Selman. This deed of trust specifically provided that Bing, as mortgagor, would keep the property fully insured. Evidently the purpose for which Bing acquired the property failed to materialize, for shortly after his purchase from Selman, Bing employed a Mr. J. A. Leddon, a local insurance and real estate businessman, as his agent to dispose of same. Through Leddon's efforts the contract of sale between Bing and Crutchfield was consummated, with the contract providing for conveyance of the property by warranty deed "when total of $500.00 is paid on principal of purchase price." Crutchfield also agreed to execute a second lien note "with deed of trust" for the difference in the sale price of approximately $680, which was to be paid to Bing at the rate of $10 per month beginning one year from the date of the contract. The record does not reflect that this note or deed of trust was ever executed by Crutchfield. Payments on the aforementioned obligations were made by Crutchfield in amounts of $30 and $40 per month to Leddon, who maintained a record thereof and distributed the payments to Bing and to Selman. It does not appear from the record that Leddon ever acted as Crutchfield's agent.
The St. Paul Fire & Marine policy in question was obtained by Crutchfield on November 25, 1954, and Crutchfield was named therein as the principal insured. Selman was named as first mortgagee in the policy and Bing was named as second mortgagee, with a proviso that in case of loss payment was to be to all three "as their interests may appear at time of loss." The term of the St. Paul policy was from November 25, 1954, to November 25, 1955.
On December 19, 1953, without the knowledge of Crutchfield, Selman or Bing, Mr. Leddon had caused a policy of fire insurance, in the amount of $2,000 and covering the same three-room house, to be issued by the Service Fire Insurance Company for a three-year period ending December 19, 1956. The Service policy named Bing as the principal insured, with a loss payable clause protecting Selman's interest. Attached to the policy is a sales contract clause stating the property is under contract of sale to Crutchfield and that any loss is payable to the parties as their interests may appear.
The St. Paul policy and the Service policy covered identical property, differing only in the amount of coverage. Both policies purported to be in force on January *536 14, 1955, the date of the fire. Both policies were on the Texas Standard Policy Form and contained the following provisions:
1. No other fire insurance is permitted unless the total amount, including this policy, * * * is inserted in [this policy]
2. This company shall not be liable for loss occurring: * * *
(e) While any stipulation or condition of this policy is being violated.
In each policy the total insurance shown to be in force on the property covered was the amount shown on the face of such policy.
The evidence in the record indicates that Crutchfield and Selman were unaware of the Service policy prior to the fire. Subsequent thereto they became aware of the Service policy, but refused to make any claim or join in any claim against the Service Insurance Company. Mr. Bing, however, insisted that the Service policy was the proper one to make claim under, and a dispute arose between Bing and Crutchfield over this issue, as well as over who owned title to the property and what contractual obligations remained for Crutchfield to establish his right to a deed. At this point, apparently agreeing that the loss was less than total, Mr. Bing filed a proof of loss with the Service Insurance Company and received $1,589.50, which was expended on repairs to the house.
The disagreement between Bing and Crutchfield eventually resulted in a trespass to try title suit, with joinder in the suit, of the action by Crutchfield and Selman against St. Paul Fire & Marine Insurance Company for total loss. In settlement of the trespass to try title action, it was agreed that Crutchfield and Selman would sever the house from the land and that Bing would move same to another tract as his personal property. In consideration therefor, Bing agreed to deed all his interest in the land to Crutchfield, which would leave title to the land in Crutchfield burdened only with Selman's first lien. After this settlement was effected, the pleadings were altered so that all that remained was the present suit by Crutchfield and Selman against St. Paul for total loss.
On the trial of the case to a jury, St. Paul contended that only the Service policy issued by Mr. Leddon provided valid insurance on the house, in that the St. Paul policy never became effective due to the provision in such policy, made a condition thereof, that St. Paul would have no liability if there were other fire insurance on the identical property at the time of the fire. St. Paul also contended that the loss was less than total and that the Service policy had been ratified by Crutchfield and Selman. Neither Service Fire Insurance Company nor Mr. Bing was a party to this suit.
At the conclusion of the trial, a verdict was returned by the jury that the fire had resulted in a total loss; that as of the time of the loss neither Crutchfield nor Selman had any knowledge of "other insurance" on the property, nor had they authorized the purchase of "other insurance" or ratified a policy affording "other insurance" either before or after the time the loss occurred. Following this verdict a motion for judgment non obstante veredicto was made by St. Paul and granted by the trial court. Judgment was then entered that Crutchfield and Selman take nothing by their suit.
On appeal from that judgment, the action of the trial court was reversed and judgment was rendered by the Court of Civil Appeals against St. Paul in the amount of $3,400, with legal interest thereon from June 24, 1955. The parties had conceded on appeal that Bing's interest in the subject property on the date of the fire was $600 and that any recovery against St. Paul should be so reduced.
St. Paul contends there is no evidence to support the jury verdict that the loss was total. The statement of facts contains several pages of testimony devoted *537 to this subject. While the evidence may be conflicting, there was direct testimony by one or more witnesses who viewed the structure after the fire and who testified to the effect that the loss was total. The mere fact that some of the charred structure might have been used in new construction does not make the loss partial. Royal Insurance Company v. McIntyre, 90 Tex. 170, 37 S.W. 1068, 35 L.R.A. 672. We believe a jury issue on the question of total loss was properly raised, and, having been resolved against the petitioner, we find no reason to disturb the finding of the jury to that effect.
It is our holding that the Service policy obtained by Bing did not avoid the policy later obtained by Crutchfield in ignorance of the fact that he already had coverage. Automobile Ins. Co. v. Teague, Tex.Com.App., 37 S.W.2d 151; Baker v. Northern Assur. Co., Ltd., 214 Mich. 540, 183 N.W. 61. It was held in American Ins. Co. v. Kelley, Tex., 325 S.W.2d 370, that when each of two policies obtained by the insured himself violates the concurrent insurance limitation contained in the other contract, the second policy but not the first is unenforceable. Where, as here, the insured purchases insurance covering his interest without knowledge that he already has protection under a policy obtained by another who had no authority to act as his agent in that respect, it seems that the first policy rather than the second should be rendered unenforceable as to the interest of the insured. See Baker v. Northern Assur. Co., Ltd., supra. We hold that the Service policy is unenforceable as to Crutchfield, and that the St. Paul policy is unenforceable as to Bing.
Turning now to the question of Selman's rights, St. Paul contends that he cannot recover on the St. Paul policy because the Service policy was procured by Bing under a contractual arrangement with Selman. This contention does violence to the terms of the policy and the provisions of Article 6.15 of the Insurance Code, V.A. T.S. The statute provides that the interest of a mortgagee or trustee under any fire insurance contract shall not be invalidated by any act or neglect of the mortgagor or owner of the property. Each of the policies involved in this case contains a similar provision. The effect of such a stipulation is to create between the company and the mortgagee an independent contract which cannot be affected by any act of the mortgagor or owner of which the mortgagee is ignorant. The statute has no application, of course, where additional insurance is obtained by the mortgagor at the special instance and request of the mortgagee. Home Ins. Co. of New York v. Lake Dallas Gin Co., 127 Tex. 479, 93 S.W.2d 388. It is well settled, however, that the mortgagee's right to recover on a policy issued for his benefit is not affected by the act of the mortgagor or subsequent purchaser in taking out a second policy without the knowledge or consent of the mortgagee. Camden Fire Ins. Ass'n v. Harold E. Clayton & Co., 117 Tex. 414, 6 S.W.2d 1029; Union Assur. Soc., Ltd. v. Equitable Trust Co., 127 Tex. 618, 94 S.W.2d 1151; British Amer. Assur. Co. v. Mid-Continent Life Ins. Co., Tex. Com.App., 37 S.W.2d 742. The courts of this and a majority of the other states agree, moreover, that the statute immunizes the mortgagee against the legal consequences of any act done by the mortgagor or owner either prior or subsequent to issuance of the policy in question. Georgia Home Ins. Co. v. Golden, 127 Tex. 93, 91 S.W.2d 695; Annotation, 97 A.L.R. 1165. Since Selman did not know that the Service policy had been purchased by Bing and has elected not to accept or adopt the same, we hold that the existence of such policy does not invalidate the contract between Selman and St. Paul.
Selman is, or at least was at the time of the fire, in the position of having two valid and enforceable contracts protecting his interest. Each policy provides that the company shall not be liable for a greater proportion of any loss than the amount thereby insured bears to the whole *538 insurance covering the property. The next question to be considered then is whether petitioner is liable to Selman for the full amount unpaid on his encumbrance or only for its pro rata share thereof. In a case involving somewhat similar facts, the trial court held that the recovery in favor of the mortgagee should be apportioned between the two insurance companies in accordance with the policy provisions, and the Court of Civil Appeals affirmed. Union Assur. Soc., Ltd. v. Equitable Trust Co., Tex.Civ.App., 63 S.W.2d 869. Writ of error was granted by this court, but the apportionment question was not brought forward. The first insurer contended only that the entire loss should fall on the second. After pointing out that under the terms of the mortgage clause the rights of the mortgagees were not affected by the act of the owner in taking out a second policy, we said:
"It follows, therefore, that plaintiffs [mortgagees] were not required to look to the second policy, which was secured without their knowledge or consent, and which they did not elect to accept or adopt, even though it undertook to protect their interests, and they had a right to look to the Union Company for the payment of their loss. That Company, therefore, is in no position to complain of the judgment which only held it liable for one half of the loss." Union Assur. Soc., Ltd. v. Equitable Trust Co., 127 Tex. 618, 94 S.W.2d 1151, 1153.
The courts of other jurisdictions are not in agreement as to the effect of the apportionment clause on the rights of the mortgagee. See Annotations, 1 A.L.R. 498, 72 A.L.R. 278. Some have held that such provision is not part of the contract between the insurer and mortgagee and that the latter is not bound thereby. Duncan Building & Loan Ass'n v. Glens Falls Ins. Co., 11 N.J.Misc. 791, 168 A. 767; Reed v. St. Paul Fire & Marine Ins. Co., 67 Pa.Super. 110. Others have taken the position that proration is in order whenever two policies actually inure to the benefit of one party. Camden Fire Ins. Ass'n v. Sutherland, Tex. Com.App., 284 S.W. 927; Sun Ins. Office v. Varble, 103 Ky. 758, 46 S.W. 486, 41 L.R.A. 792; Lipsitz v. Union Ins. Soc., Ltd., 149 Misc. 809, 268 N.Y.S. 179; Federal Land Bank of Columbia v. Globe & Rutgers Fire Ins. Co., 187 N.C. 97, 121 S.E. 37; Goodman v. Quaker City Fire & Marine Ins. Co., 1 Cir., 254 F.2d 844; Tri-State Mut. Grain Dealers Fire Ins. Co. v. Morris, 9 Cir., 268 F.2d 956. Appleman feels that the decisions applying the apportionment rule reach an equitable result. Appleman, Insurance Law and Practice, Vol. 6, p. 289, Sec. 3909.
We have concluded that the mortgagee is not bound by the apportionment clause contained in the policy. Where a mortgagee is insured by two policies, and does not have actual knowledge of either of them until after the loss, he may recover on either one of the policies the full amount of his loss up to the policy limit. Selman, the mortgagee, having elected to sue on the St. Paul policy, is not required to look to the Service Company policy.
St. Paul contends that even though the Service policy was not "other insurance" as to Crutchfield and Selman at the time of the fire, that by selling the repaired house to Bing they had accepted benefits under the Service policy and by such conduct had ratified the Service policy, and that such ratification renders the Service policy "other insurance" as prohibited by the St. Paul policy.
St. Paul cites the case of Glens Falls Insurance Co. v. Jacobs, 227 Ky. 741, 13 S.W. 2d 1040, 76 A.L.R. 1170 (Annotation 76 A. L.R. 1170) and Continental Ins. Co. v. Riggs, 277 Ky. 361, 126 S.W.2d 853, 121 A.L.R. 1421 (Annotation 121 A.L.R. 1421). These cases recognize the rule that an insurance policy issued without the knowledge or consent of one asserting a claim under another policy prohibiting other insurance may be "other insurance" within the terms of the policy in suit if ratified by acceptance of benefits under such other policy. *539 We do not disagree with this rule, but we are not satisfied that the action of Crutchfield and Selman in selling the house was such an acceptance of benefits under the Service policy as to amount to a ratification of the policy. It is true that Bing repaired the house and was paid for such repairs by the Service Fire Insurance Company, but the record reflects that such repairs were made over the protest of Crutchfield, and whatever Bing did to the house in the way of repairs was done as a mere volunteer in so far as Crutchfield was concerned. The act of selling said house does not amount to a ratification of the Service policy. At most it would amount to a conversion of the salvage to the insured's own use and benefit. St. Paul is not here complaining about any loss of salvage. The Court of Civil Appeals, in its judgment, deducted from the face amount of the policy the amount for which Crutchfield sold the house, and none of the parties complain of such action.
The judgment of the Court of Civil Appeals is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1761458/ | 542 S.W.2d 704 (1976)
TM PRODUCTIONS, INC., Appellant,
v.
Frank M. NICHOLS, III, Appellee.
No. 19009.
Court of Civil Appeals of Texas, Dallas.
October 7, 1976.
*705 Tom Thomas, Kolodey & Thomas, Dallas, for appellant.
A. Don Crowder, David H. Cain, Crowder, Mattox & Morris, Dallas, for appellee.
*706 CLAUDE WILLIAMS, Chief Justice.
Frank M. Nichols, III, recovered a judgment in the district court, based upon a jury verdict, against TM Productions, Inc. in his action to recover compensation for commissions alleged to be due him under his employment contract. TM Productions, Inc. appeals from this judgment and in its sole point of error contends that the court erred as a matter of law in granting appellee judgment for $9,200 based on the jury's answer to special issue number one because the proper construction of the written contract between the parties, under the uncontroverted evidence, would limit appellee's recovery to the sum of $1,408.55, the amount of commission due him on the date of verdict. We hold that the trial court erred in rendering judgment on the verdict in the sum of $9,200 because there is no evidence to support it and we reverse the judgment of the trial court and render judgment for appellee Frank M. Nichols, III, against appellant TM Productions, Inc. in the sum of $1,408.55.
Nichols entered into a written contract with TM Productions, Inc. on September 21, 1973, in which Nichols was employed as a salesman in the business of supplying various productions services to radio stations across the country, such as radio station jingles, identification jingles, singing of call letters, and generally supplying tape recordings to be played on automated computer systems which replace manual operation of a radio station. Under this contract, Nichols was to be paid fifteen percent sales commissions on all products and services which he sold.
One type of contract called "The Producer" is a service containing production music in commercials that radio stations can use to underscore copy of a client or to produce a commercial which the station will sell to its local client. It is a format used by radio stations to increase advertising revenue and is sold to a radio station for a period of three years with payments being made to TM Productions on a monthly basis over thirty-six months. It constituted approximately ninety-five percent of Nichols' sales. When the sale was finalized, TM Productions gave Nichols credit in a special bookkeeping account for amounts representing the first twelve months of the thirty-six month contract with the credit subsequently being posted for the remainder of the contract at the beginning of each following year. All amounts due Nichols were actually paid on a quarterly basis. Twenty-five percent of the first year's fifteen-percent commission was held in reserve by TM Productions in case of cancellation, or the like, but would finally be credited to Nichols upon completion of the contract. Nichols was given advances in the form of a draw against future commissions, including a travel allowance or draw. Nichols was notified on July 3, 1974, by telephone that he had been terminated effective June 30, 1974. In the ten-month period Nichols was employed by TM Productions, his advances totaled $17,241.60 and his total gross sales were estimated to be $200,000. To the best of Nichols' knowledge, no contract ever sold by him was canceled, defaulted or turned over to an attorney for collection.
It is undisputed by the parties that TM Productions owed Nichols at the time of trial a minimum of $1,408.55 which represents accrued commissions. However, Nichols argued that the contract states that upon his termination his account would be settled and he would be paid all commissions upon contracts which he sold and which had been billed and delivered to the purchaser. TM Productions argues that it is not obligated to pay future commissions until the amounts are actually received by it from the purchaser. TM Productions stipulates that it will pay Nichols the commissions when the payments are received from the purchasers.
Upon this disagreement, Nichols filed suit against TM Productions and alleged in his pleadings that the sums owed him were at least $9,500. He alleged a breach of contract on the part of TM Productions and sought an accounting in order to know what amounts were definitely owed him. Neither party pleaded that the contract was ambiguous and in fact in oral argument *707 before this court both parties agreed that they considered the contract definitely to be clear and unambiguous.
At the conclusion of the evidence the trial court submitted the following special issue.
Special Issue No. 1: What sum of money, if any, if paid now in cash, would reasonably compensate plaintiff, Frank M. Nichols, III, for money due him under the contract?
Answer in dollars and cents, if any, or none.
Answer: $9,200.
TM Productions moved the court to render the judgment non obstante veredicto for $1,408.55 in favor of Nichols because there were no proper pleadings and no evidence submitted to the jury upon which the findings on special issue number one could be supported. The trial court entered judgment for appellee Nichols on the jury's verdict awarding Nichols the sum of $9,200.
Since TM Productions has not filed a motion for new trial, we are confined in our review to determine whether the trial court erroneously denied its motion for judgment non obstante veredicto. Wagner v. Foster, 161 Tex. 333, 341 S.W.2d 887, 890 (1960). Tex.R.Civ.P. 301 provides that a motion for judgment non obstante veredicto may be rendered by the court if a directed verdict would have been proper. Consequently, the trial court is authorized to render judgment non obstante veredicto only when there is no evidence warranting a submission of an issue to the jury. Alamo Ambulance Service, Inc. v. Moulton, 402 S.W.2d 200, 202 (Tex.Civ.App.San Antonio 1966), affirmed, 414 S.W.2d 444 (Tex. 1967). Implicit in this rule is the fact that it is only when the issue is material that the judgment must conform to the findings. Teas v. Republic National Bank, 460 S.W.2d 233 (Tex.Civ.App.-Dallas 1970, writ ref'd n. r. e.); Massie v. Hutcheson, 270 S.W. 544 (Tex.Comm'n App.1925, jdgmt. adopted). An attack on the overruling of a motion for judgment non obstante veredicto constitutes a "no evidence" point as opposed to a point challenging the sufficiency of the evidence. Shelton v. Ector, 364 S.W.2d 425, 428 (Tex.Civ.App.-Dallas 1963, no writ). A "no evidence" point presents a question of law, and the appellate court must review the evidence most favorably in support of the findings to determine if a judgment non obstante veredicto is proper. Muro v. Houston Fire & Casualty Insurance Co., 329 S.W.2d 326, 328 (Tex.Civ.App.-San Antonio 1959, writ ref'd n. r. e.). However, the rule providing that the court may render judgment non obstante veredicto if a directed verdict would have been proper, does not mean literally "no evidence at all" but comprehends those situations in which the evidence is deemed to be legally insufficient to establish an asserted proposition of fact. Kirkpatrick v. Raggio, 319 S.W.2d 362, 366 (Tex.Civ.App.-Fort Worth 1958, writ ref'd n. r. e.).
In the light of these well-established rules, we must determine if there is any evidence of probative force upon which the jury could have based its findings on special issue number one. The primary evidence is the contract between the parties. Both parties agree that the written contract is a complete and unambiguous integration of their agreement. Of course, the question of whether a contract is ambiguous is one of law and not of fact. We have concluded, as a matter of law, that the contract is, indeed unambiguous. Being unambiguous it would be inappropriate to permit parol evidence to support a construction of the agreement. As pointed out by Justice Guittard of this Court, in Don Drum Real Estate Co. v. Hudson, 465 S.W.2d 409 (Tex.Civ.App.-Dallas 1971, no writ), there is a distinction between "interpretation" and "construction" although these words are often used interchangeably. As stated in the opinion, "interpretation" of a contract is the process of determining the meaning of the language, whereas "construction" is the determination of the legal effects of the contract. Proof of extrinsic expression of the party's intention is proper for the interpretation of the language where the meaning is uncertain, but not for determining the contract's legal effect, except insofar as such determination requires *708 interpretation of the language used. In this case, we have an unambiguous contract, but the parties differ as to the meaning of the terminology utilized in the contract relating to the time to pay all accrued and future commissions. Appellee did not offer to introduce parol evidence to explain the provisions of the contract or his intentions when entering into the contract. Thus, we must look to the terms and provisions of the contract itself to determine whether appellant was obligated to pay all accrued and future commissions to the appellee upon termination of employment. The disagreement between the parties over the meaning of the contract revolves around the definition of two essential words.
One provision of the contract requires that within thirty days of the date the product is delivered and billed, TM Productions will credit Nichols' account for the first year's commission less a twenty-five percent reserve.[1] Nichols argues this word means a vested right in all commissions.
Another provision of the contract requires that in the event Nichols' employment is terminated by TM Productions, his account will be settled to the date of his termination.[2] Nichols argues this provision to mean that all vested commissions will be paid notwithstanding the fact that the purchase price has not been received by TM Productions.
A presumption exists that every provision of a contract was included for a particular purpose. Jones v. Dumas Development Co., 229 S.W.2d 936, 939 (Tex.Civ.App.Amarillo 1950, writ ref'd n. r. e.). A court must presume that the parties intended every word to have meaning, effect and purpose unless it is plainly repugnant to the meaning of the overall contract. Masterson v. Gulf Oil Corp., 301 S.W.2d 486, 488 (Tex. Civ.App.Galveston 1957, writ ref'd n. r. e.). In absence of evidence to the contrary, words and phrases in a written contract will be accorded the ordinary, popular, and commonly-accepted meaning. Magnolia Warehouse & Storage Co. v. Davis & Blackwell, 108 Tex. 422, 195 S.W. 184, 186 (1917); and Pan American Insurance Co. v. Cooper Butane Co., 157 Tex. 102, 300 S.W.2d 651, 654-55 (1957).
In order to ascertain the commonly-accepted meaning of the two essential words, we must look to the dictionary. Webster's New International Dictionary of the English Language 621 (2d ed. 1941) defines the word "credit" within the bookkeeping context as follows:
To enter upon the credit side of an account; to give credit for; to place to the credit of.
At 2293, it further defines the word "settle" as follows:
To determine, as something exposed to doubt or question, to free from uncertainty or wavering; to make sure, firm or constant; as to settle questions of law; to put beyond dispute; as, that settles the question; also, to appoint definitely, as an event or date; as to settle a day for the meeting.
To close by payment, as accounts; to liquidate.
In order to interpret this contract we must look to the entire contract to establish the meaning of individual provisions and the intent of the parties. Portland Gasoline *709 Co. v. Superior Marketing Co., 150 Tex. 533, 243 S.W.2d 823, 824-25 (1951). When the contract refers to "crediting" Nichols' account, it addresses the bookkeeping function that includes posting Nichols' account for the amount due that year only. Although this amount may be vested, any amounts derived from the second and third year of the contract would not vest until credited. When the contract refers to "settling" the bookkeeping account as of the date of Nichols' termination, it means only that the amounts credited to the account at that date will be paid and that Nichols will be advised of TM Productions' computations concerning what future amounts will be due him. It does not imply an accelerated payment of all commissions contrary to the contractual provisions providing for a credit to his account at the beginning of each year of the three-year contract and the final payment of the twenty-five percent reserve amount when the contract is totally fulfilled. Thus, the contract on its face provides no evidence with which to support the jury's verdict. Since no other evidence is available, the jury's verdict is without support, and appellant's no evidence contention must be sustained.
Accordingly, the trial court committed reversible error in entering judgment upon the verdict. We reverse the trial court's judgment and render judgment in favor of Nichols and against TM Productions, Inc. in the sum of $1,408.55, with interest thereon at the rate of nine percent per annum from March 12, 1976, being the date of the rendition of judgment by the trial court.
Reversed and rendered.
NOTES
[1] The Producer. 15% after delivery and billing. Within 30 days of the date of the Producer is delivered and billed, TM will credit your account with the first year's commission less a 25% reserve. At 12 month intervals thereafter TM will credit your account with the commission for the next 12 month period. This procedure will be in effect for the duration of the contract. You will receive the 25% reserve as part of the final credit when the contract is totally fulfilled.
[2] In the event your employment is terminated by either party, your account will be settled to the date of your termination. At the time of termination, you agree to return to TM, postage paid, any and all equipment, demonstration tapes, and any other material of any type or nature supplied to you by TM. Title to any equipment or material furnished to you shall remain in TM, and you have no ownership interest in any of this material. Either party may terminate this agreement upon 14 days written notice. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1889557/ | 443 So.2d 546 (1983)
STATE of Louisiana
v.
Frederick KIRKPATRICK.
No. 83-KA-0734.
Supreme Court of Louisiana.
November 28, 1983.
Rehearing Denied January 6, 1984.
*550 William J. Guste, Jr., Atty. Gen., Barbara Rutledge, Asst. Atty. Gen., Marion B. Farmer, Dist. Atty., Margaret Coon, William R. Alford, Abbott J. Reeves, Asst. Dist. Attys., for plaintiff-appellee.
Thomas J. Ford, New Orleans, Oliver F. Johnson, Covington, for defendant-appellant.
BLANCHE, Justice.[*]
Defendant, Frederick Kirkpatrick was indicted by the St. Tammany Parish Grand Jury on March 11, 1982, for the first degree murder of Steve Joseph Radoste[1], a violation of R.S. 14:30. A jury of twelve unanimously found the defendant guilty of the crime charged. Following the sentencing hearing, the jury recommended unanimously that the defendant be put to death, and the trial court sentenced him accordingly. In reaching its conclusion, the jury found the existence of the following statutory aggravating circumstances: (1) the defendant had been engaged in the perpetration or attempted perpetration of an armed robbery or simple robbery at the time the victim was killed, and (2) the offense was committed in an especially heinous, atrocious, or cruel manner. La.C.Cr.P. art. 905.4, §§ (a), (g). In appealing his conviction and sentence, the defendant has assigned twelve errors. The twelfth assignment is a request for a review for errors patent which this Court has completed, being satisfied that there are no errors patent on the face of the record.
FACTS
On the night of January 27, 1982, the defendant and Charles Faulkner were in the home of Steve Joseph Radoste, who lived alone in the Pearl River area of St. Tammany Parish. During the night Mr. Radoste was killed from having been struck in the head twice with a heavy glass object, stabbed twice, and shot in the head. The house was then robbed of several movables and the decedent's truck was taken. At the time of his death the victim was nursing an injured ankle. His crutch was found in the room next to his naked, battered body.
A forensic scientist with the Louisiana State Police described the murder scene at trial. The living room was in disarray with quite a bit of blood splattered on the furniture and carpet. The victim's naked body was lying on the floor with a butcher knife stuck into his chest to the hilt. A second knife wound was visible on the victim's lower abdomen through which a piece of the victim's intestine was protruding. There was blood from both knife wounds on and around the body. In addition, there were wounds to the victim's head. Two pillows which had been placed over the right side of the victim's head were bloodied and contained a bullet hole. Blood was also found smeared on the floor and walls of the bedroom.
Dr. Charles Crumpler performed an autopsy on the victim and made a determination as to the cause of death. He described three major types of wounds found on the victim's body. There were areas of torn skin and multiple bruises to the victim's head. There were two sharply precise stab *551 wounds on the front of the body; one in the lower left chest, and one in the upper abdomen and midline. Finally, there was a gunshot wound on the right side of the head about an inch above the ear. Dr. Crumpler stated that the gunshot wound was the immediate cause of death, but added that the stab wounds would have caused death within a few hours as a result of slow internal bleeding.
On the afternoon of January 28, 1982, the Meridian (Mississippi) Police Department discovered the burned out remains of a late model pickup truck just south of Meridian, Mississippi. Acting upon information received, they arrested the defendant for the arson of the truck. At the time of the arrest, officers observed a number of items stacked in the defendant's home, including two televisions, a wine rack, and leather jackets, later identified as belonging to the victim. The officers, however, made no seizure at this time.
After being advised of his Miranda rights, the defendant made a voluntary statement admitting that he and Charles Faulkner had driven the truck out to a remote area and that the defendant had watched as the truck was burned. He also stated that Charles Faulkner was in possession of a .22 caliber Derringer.
On January 29, 1982, the Meridian Police received a teletype from the St. Tammany Parish Sheriff's Office identifying the vehicle identification number on the burned truck as that belonging to a truck owned by Steve Radoste. St. Tammany Parish Sheriff's Deputies then went to Meridian to examine the truck. The truck was identified and a search warrant was issued to search the defendant's house. Pursuant to the search warrant, several items were seized at the defendant's home which were subsequently identified as belonging to the victim by members of the victim's family. The defendant was then arrested for the murder of Steve Joseph Radoste.
Charles Faulkner was also later apprehended. A .22 caliber Derringer was surrendered to the authorities by a cousin of Charles Faulkner, who stated that Faulkner had given the gun to him. Tests revealed that the bullet removed from the victim's head was fired from this same .22 caliber Derringer. Merrill Koenig, a long time friend who had discovered the victim's body, identified the Derringer as one he had given to the victim.
Both the defendant and Charles Faulkner waived extradition and were returned to Louisiana to stand trial pursuant to the March 11, 1982 indictment. The cases were severed for trial and each was tried separately. The defendant was found guilty and received the death penalty. Charles Faulkner was found guilty and received a sentence of life imprisonment without benefit of parole, probation, or suspension of sentence.
Assignment of Error No. 1
The defendant contends that the trial court erred in refusing to appoint another attorney to represent him when his court-appointed attorney realized that he had rendered legal services to members of the victim's family.
In the judge's chambers prior to the start of the third day of the trial, the court appointed defense counsel, Thomas J. Ford, Jr., informed the court, under oath, that the preceding evening he had realized that he had rendered legal services for some members of the victim's family in the past.
Ford did not state that he felt that this knowledge would interfere with his representation of the defendant. In fact, on oral arguments to this Court, Ford expressed his reaction to this revelation as an immediate concern which cost him a semi-sleepless night, but which had no effect upon his further representation of the defendant. Ford stated that, although he had a professional relationship with some members of the victim's family, he had been introduced to the victim only briefly, and could not remember ever speaking to him.
After the defendant testified in chambers as to his feelings with respect to Ford's further representation of him, the trial judge denied the defendant's motion to dismiss *552 Ford as counsel of record and appoint another attorney.
The right of every criminal defendant to have the assistance of counsel is basic to our legal system. U.S. Const. amend. VI; La. Const. art. I, § 13. This right is preserved to an indigent defendant through the requirement that an attorney be appointed to represent him. Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963); State v. Harper, 381 So.2d 468 (La.1980). However, an indigent defendant does not have the right to have a particular attorney appointed to represent him. State v. Harper, supra; State v. Rideau, 278 So.2d 100 (La.1973).
The issue of conflicting loyalties usually arises in the context of joint representation. Holloway v. Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1976); State v. Kahey, 436 So.2d 475 (La. 1983). It can also arise where an attorney runs into a conflict because he or she is required to cross-examine a witness who is testifying against the defendant and who was or is a client of the attorney. United States v. Morando, 628 F.2d 535 (9th Cir., 1980); United States v. Partin, 601 F.2d 1000 (9th Cir., 1979).
Multiple representation is not per se illegal and does not violate the Sixth Amendment to the U.S. Constitution (or Article 1, Section 13 of the Louisiana Constitution) unless it gives rise to a conflict of interest. Cuyler v. Sullivan, 446 U.S. 335, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980); Holloway, supra. If a defendant establishes that an actual conflict of interest adversely affected his lawyer's performance, he has demonstrated a violation of his Sixth Amendment rights under the U.S. Constitution and his Article I, Section 13 rights under the Louisiana Constitution. Cuyler, supra; State v. Franklin, 400 So.2d 616 (La.1981).
In the present case, no member of the victim's family appeared as a witness so as to cause a conflict of interest. In addition, defense counsel's familiarity with the victim's family was so attenuated that he had to question the individual that he thought he recognized to confirm that she was related to the victim. With respect to the victim, counsel did not know him, though he did venture that he probably had met him.
Under these facts, we find there was no conflict of interest. In any event, there was a total failure on the part of the defendant to in any way establish that the defense counsel's former representation of some members of the victim's family had any effect whatsoever on counsel's performance on the behalf of the defendant.
This assignment is without merit.
Assignment of Error No. 2
The defendant contends that the trial court erred in both verdict and sentence due to the prosecutor's opening statement to the effect that the defendant was not the murderer.
Defense counsel's brief does not direct this court to the language complained of in the prosecutor's opening statement. Reviewing the record, we can only presume that defense counsel is referring to the prosecutor's statement that "Freddie Kirkpatrick hit Mr. Radosti with a vase type glass object; that he stabbed Mr. Radosti several times; and that Charles Faulkner shot Mr. Radosti in the head." (Tr., Vol. II, p. 425, 426).
Initially, we note that there is no conclusive evidence as to who actually shot Mr. Radoste. Later testimony by Dr. Charles Crumpler, who performed the autopsy on Mr. Radoste, indicated that the immediate cause of death was a gunshot wound to the head. Dr. Crumpler did, however, express his belief that the stab wounds would also have been fatal. Commenting on the fatal nature of the stab wounds, he stated that "... the mode of death resulting from that would have been bleeding, internal or external bleeding, probably internal bleeding slowly." (Tr. Vol. III, p. 524).
In Emmund v. Florida, ___ U.S. ___, 102 S.Ct. 3368, 73 L.Ed.2d 1140 (1982), the United States Supreme Court decided that the imposition of the death penalty on a *553 person who aids and abets a felony in the course of which a murder is committed by others is a violation of the Eighth and Fourteenth Amendments of the U.S. Constitution, if that person does not himself kill, attempt to kill, or intend to kill. 102 S.Ct. at 3379. (emphasis added.)
Here, there is ample evidence that the defendant both attempted and intended to kill Steve Radoste. The defendant struck Mr. Radoste over the head twice with a heavy glass object. The defendant then took a butcher knife and stabbed Mr. Radoste in the abdomen. He then plunged the butcher knife into Mr. Radoste's chest to the hilt and left it there. There is no conclusive evidence as to who actually shot Mr. Radoste. Dr. Crumpler confirmed that the stab wounds would have caused death without the shooting of the bullet through Mr. Radoste's brain. The telephone lines were cut and Mr. Radoste's house was looted and robbed by the defendant and Charles Faulkner. There is no doubt that the defendant intended to kill Mr. Radoste and rob him. As the state carried their burden of proving beyond a reasonable doubt that the defendant attempted and intended to kill the victim, the defendant may not rely upon Emmund v. Florida, supra, for relief.
Review of this court has, in the past, been limited to a determination of the existence of some evidence of each essential element of the crime. State v. Sonnier, 380 So.2d 1 (La.1979); State v. Banks, 362 So.2d 540 (La.1978). A conviction will be set aside on appeal if there is no evidence of an essential element. State v. Sonnier, supra; State v. Madison, 345 So.2d 485 (La.1977). Under Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979), the standard of review is now to consider whether there was sufficient evidence to justify a reasonable trier of fact to find guilt beyond a reasonable doubt.
Under the above standards, the state has adduced sufficient evidence to justify a conviction of first degree murder. Additionally, it has been shown that the imposition of the death penalty under these facts was not violative of defendant's Constitutional rights as set out in Emmund v. Florida, supra.
This assignment is without merit.
Assignment of Error No. 3
The defendant contends that the trial court erred in denying the defendant's motion to suppress his confessions and inculpatory statements.
This assignment of error was neither argued nor briefed. Assignments of error neither argued nor briefed are generally considered abandoned. State v. Lindsey, 404 So.2d 466 (La.1981); State v. Sonnier, 379 So.2d 1336, an original hearing (La.1979). However, in cases where the death penalty is imposed, this Court reviews assignments of error not briefed as a matter of policy. State v. Monroe, 397 So.2d 1258 (La.1981); State v. Berry, 391 So.2d 406, on original hearing (La.1980); State v. Jones, 332 So.2d 466 (La.1976).
The thrust of defendant's objection is that he was induced into making inculpatory statements by Ernest M. Jackson, Chief Deputy of the Lauderdale County (Mississippi) Sheriff's Office, who controlled whether or not the defendant's girlfriend (whom Jackson presumed to be defendant's wife) would be allowed to visit the defendant.
On this ground, the assignment has no merit. There is no evidence to support such a finding. Deputy Jackson had known the defendant as a result of his having been a guest in the jail over the last 8 years and the defendant asked if his girlfriend could visit him. Jackson gave his permission and on a subsequent visit to the jail a few days later asked the defendant whether his girlfriend had visited him. Upon learning that she had not, Jackson then suggested that the defendant use the phone to call her.
This gesture of permitting the defendant to use the phone to call his girlfriend was not offered as any inducement to obtain the statement from the defendant. Deputy *554 Jackson had not been involved in the initial investigation of the case and any rapport he had with the defendant came as a result of the defendant's prior incarcerations. All of the voluntary statements and confessions made to Jackson were not the result of any questioning by Deputy Jackson but were initiated by the defendant when he asked Deputy Jackson if the police had found the "old man's pocketbook". When Jackson replied that he had not, the defendant "indicated that he could take (Jackson) and show (him) where it was hid." Jackson then arranged to have the defendant show them the location of the wallet.
In our review of the record we have noted that after the defendant voluntarily offered to show Deputy Jackson where the wallet had been hidden, there was no further warning given the defendant of his Miranda rights. We also find from the record that on two prior occasions defendant had been advised of these rights. The first time was when he was arrested for arson. At the motion to suppress Chief of Detectives Hatcher testified that he orally advised defendant of his rights at that time and after having transported him to the police station had him sign a form explaining his Miranda rights. The next time was when defendant was arrested for the murder of Mr. Radoste. Chief Hatcher identified the rights form executed at that time which was identical to the first form that the defendant signed. Additionally, it is noted that this defendant is no neophyte to the legal system, having been jailed several times in the past eight years for varying offenses. We find that the defendant was fully aware of his Miranda rights. At no time did the defendant invoke any of these rights.
In Rhode Island v. Innis, 446 U.S. 291, 100 S.Ct. 1682, 64 L.Ed.2d 297 (1980), the United States Supreme Court examined their opinion in Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), and reiterated that "the special procedural safeguards outlined in Miranda are required not where a suspect is simply taken into custody, but rather where a suspect in custody is subjected to interrogation." 446 U.S. at 300, 100 S.Ct. at 1689. Thus, Miranda safeguards are triggered by custody plus interrogation. Where there is custody but no interrogation, Miranda is not triggered. In this case, we find that the inculpatory statements by the defendant were not made pursuant to any direct interrogation. Further, they were not the product of a conversation that was "reasonably likely to elicit an incriminating response" from the defendant. 446 U.S. at 301, 100 S.Ct. at 1689.
This assignment is without merit.
Assignment of Error No. 4
The defendant contends that the trial court erred in admitting into evidence certain gruesome photographs of the victim's body. The four photographs objected to were admitted during the guilt phase of the trial.
The four color photographs depict the murder scene as it was found by the St. Tammany Parish Sheriff's Department. They show a living room in disarray with the nude body of the victim lying on his back with two pillows partially covering his head. There is blood on the pillows and the surrounding furniture. A yellow towel is beneath the upper torso and wrapped over the left arm. A blood stained white towel is lying across the victim's neck. There is a wound to the victim's lower abdomen with a small portion of intestine protruding, blood visible on the victim's head, and a large knife buried almost to the handle in the lower left portion of the victim's chest. There are papers and furniture cushions strewn about the room. A blood stained crutch is visible. Of the approximately forty-two photographs introduced into evidence, these are the only four that show the victim's body.
It is well-settled that the admission of gruesome photographs will not be overturned unless it is clear that the prejudicial effect of the photographs outweighs their probative value. State v. Brogdon, 426 So.2d 158 (La.1983); State v. Perry, 420 So.2d 139 (La.1982); State v. Lindsey, *555 404 So.2d 466 (La.1981). Photographs which illustrate any fact, shed light upon any fact or issue in the case, or are relevant to describe the person, place or thing depicted are generally admissible. State v. Lindsey, supra; State v. Bodley, 394 So.2d 584 (La.1981); State v. Landry, 388 So.2d 699 (La.1980).
The four photographs admitted at the guilt phase of the trial were relevant to show the identification of the victim, the location of the body, the manner of death, the close proximity of the crutch to the victim, and the specific intent of the defendant to kill the victim. When the probative value of the photographs toward the manner of death and the specific intent of the defendant to kill the victim are balanced with the small likelihood that the jury was inflamed[2] by viewing these pictures, we find that the probative value of the photographs outweighs the possible inflammatory effect. State v. Lindsey, supra.
This assignment is without merit.
Assignments of Error Nos. 5 and 7
The defendant contends that the trial court erred in denying defendant's motion challenging the death qualification of the jurors and in granting the state's four challenges for cause under La.C.Cr.P. art. 798(2).
We construe counsel's motion and remarks in connection therewith to complain that La.C.Cr.P. art. 798(2)[3], which gives the state the right to excuse jurors who would automatically vote against the death penalty without regard to any evidence that might be developed at trial, forces on the defendant a partial jury by virtue of the inherent nature of the statute; that such a dismissal denies defendant the right to a jury comprised of a true cross section of the community; and finally, that such juries deny the defendant equal protection of the law.
La.C.Cr.P. art. 798(2) was amended to conform with the decision in Witherspoon v. Illinois, 391 U.S. 510, 88 S.Ct. 1770, 20 L.Ed.2d 776 (1968), wherein the United States Supreme Court found that there was no constitutional bar to excluding jurors who stated in advance of trial that they could not even consider returning a verdict of death or that their attitude about the death penalty would prevent them from making an impartial decision as to defendant's guilt. State v. Perry, 420 So.2d 139 (La.1982); State v. George, 371 So.2d 762 (La.), cert. denied, 444 U.S. 953, 100 S.Ct. 430, 62 L.Ed.2d 325 (1979). In a recent case involving this issue, the United States Supreme Court stated, "[w]e repeat that the State may bar from jury service those whose beliefs about capital punishment would lead them to ignore the law or violate their oaths." Adams v. Texas, 448 U.S. 38, 50, 100 S.Ct. 2521, 2529, 65 L.Ed.2d 581 (1980).
There is no merit to defendant's contention that his constitutional right to be tried by a jury selected from a fair cross-section of the community has been violated when prospective jurors have been properly excluded in compliance with La.C.Cr.P. art. 798(2) and Witherspoon v. Illinois, supra, *556 as was done here. State v. Kelly, 375 So.2d 1344 (La.1979).
A review of the voir dire examination reveals that the four excluded prospective jurors stated in advance of trial that they could not consider returning a verdict of death. Therefore, the jurors were properly excused in compliance with La.C.Cr.P. art. 798(2) and Witherspoon v. Illinois, supra.
Assignments of Error Nos. 5 and 7 are without merit.
Assignment of Error No. 6
The defendant contends that the trial court erred in denying his motion for an individual and sequestered voir dire. Defense counsel argues that the voir dire conducted in the presence of other potential jurors enabled persons seeking to avoid jury service to learn avoidance techniques.
There is no provision in our law which either prohibits or requires the sequestration of prospective jurors for an individual voir dire. The manner in which the veniremen are called and the scope of examination are left to the court's discretion. La.C.Cr.P. art. 784; Id., comment (c); La.C.Cr.P. art. 786; State v. Willie, 410 So.2d 1019 (La.1982). The burden is on the defendant to show that the court abused its discretion in refusing to sequester the venire at voir dire. State v. David, 425 So.2d 1241 (La.1983); State v. Watson, 423 So.2d 1130 (La.1982); State v. Willie, 410 So.2d 1019, supra. Whether there were any jurors that learned from others during the voir dire how to escape jury service is a matter difficult of proof and, in our view, an assertion made primarily on conjecture. From our independent review of the record, we are convinced that the defendant failed to carry his burden of proving an abuse of discretion by the court. Defendant has failed to prove prejudice on the part of the jurors.
This assignment is without merit.
Assignment of Error No. 8
The defendant contends that the trial court erred in refusing defendant's motions for a mistrial and to quash the indictment based upon the state's opening statement. At the end of the state's opening statement, defense counsel moved for a mistrial based upon the state's reference to the defendant's arrest by Meridian (Mississippi) police for the arson of Mr. Radoste's truck. Defense counsel also moved to quash the indictment alleging that the state had failed to specifically state that defendant had committed armed or simple robbery at the time Mr. Radoste was killed. (Tr., Vol. II, pp. 428, 429).
During his opening statement, the prosecutor stated that the Meridian Police Department originally arrested the defendant for arson of Mr. Radoste's truck. La.C.Cr.P. art. 770 states in pertinent part:
Upon motion of a defendant, a mistrial shall be ordered when a remark or comment, made within the hearing of the jury by the judge, district attorney, or a court official, during the trial or in argument, refers directly or indirectly to:
* * * * * *
(2) Another crime committed or alleged to have been committed by the defendant as to which evidence is not admissible:
* * * * * *
An admonition to the jury to disregard the remark or comment shall not be sufficient to prevent a mistrial. If the defendant, however, requests that only an admonition be given, the court shall admonish the jury to disregard the remark or comment but shall not declare a mistrial.
An exception to this rule is made if the evidence is substantially relevant to some purpose other than to show that the accused is a bad person, therefore more likely to have committed the crime. State v. Gaston, 412 So.2d 574 (La.1982); State v. Belgard, 410 So.2d 720 (La.1982); State v. Sutfield, 354 So.2d 1334 (La.1978). The underlying policy of protecting the accused against unfair prejudice dictates that, even though the evidence have an independent relevance, the trial judge must balance all *557 of the pertinent factors to determine whether the probative value of the evidence is outweighed by its prejudicial effect. State v. Sutfield, supra; State v. Prieur, 277 So.2d 126 (La.1973).
In this case, the defendant's arrest for arson was extremely relevant to show the defendant's connexity with the stolen property of the victim. One of the statutory aggravating factors argued by the State and found by the jury was that the killing took place during the perpetration or attempted perpetration of an armed or simple robbery. Any competent evidence tending to show the connexity between the defendant and the victim's stolen property is extremely relevant as to the proof of the robbery. As such, we find that the prejudicial effect of the mention of the defendant's arrest for arson of the truck is outweighed by its relevancy to the robbery of the victim. The trial court was correct in denying the motion for mistrial.
An examination of the record shows that the state, in its opening statement, set forth each element of the crime of first degree murder under R.S. 14:30 as required by La.C.Cr.P. art. 766.[4] The state, on three separate occasions[5] made mention of the robbery of the victim's possessions. The prosecutor specifically stated that, "Mr. Radosti, of course, was robbed of all the belongings that they could get in his truck." (Tr., Vol. II, p. 426). Thus, the state, in its opening, complied with the requirements of La.C.Cr.P. art. 766.
This assignment is without merit.
Assignment of Error No. 9
The defendant contends that the trial court erred in allowing the state to display many items of physical evidence within the view of the jury when the state did not introduce them all into evidence.
The defendant does not identify, either by brief or in the record, what the unintroduced items of evidence were or their relative number.[6] The defendant makes no showing of prejudice due to the court allowing this procedure. The defendant states only that the procedure "served to further inflame the jurors and to influence them in such a way as to make them believe that there was much more evidence in the State's possession." (Def.Brief, p. 6).
All matters pertaining to the conduct of the trial are within the sound discretion of the trial judge. Necessarily, the trial judge is given wide discretion in controlling the conduct and orderly process of the trial. He has the authority and duty to require that the trial be conducted with dignity and in an orderly and expeditious manner. La. Const., Art. 5, § 1; La.C. Cr.P. art. 17; State v. Chaisson, 425 So.2d 745 (La.1983); State v. Passman, 345 So.2d 874 (La.1977); State v. Reeves, 263 La. 923, 269 So.2d 815 (La.1972).
In this case, the trial judge decided that the most practical way of handling the evidence was to have the state introduce those items which it intended to introduce and then remove the remainder.[7] The defendant has made no showing that this was an abuse of the trial judge's broad discretion in this area.
This assignment is without merit.
Assignment of Error No. 10
The defendant contends that the trial court erred in allowing the state to *558 introduce results of scientific analysis that were not provided to the defendant prior to trial.
The record reflects that defendant's pretrial motion for discovery was answered by the state. (Tr., Vol. I, p. 119). The minute entry for June 8, 1982, states that defense counsel informed the trial court that he was satisfied with these answers. (Tr., Vol. I, p. 6). At oral argument defense counsel stated that the information that he sought was the results of certain blood tests. The samples were drawn by St. Tammany Parish Sheriff's Office officials and forwarded to the Louisiana State Police Crime Lab in Baton Rouge for analysis. The thrust of defense counsel's objection is that he was not forwarded the results in time to incorporate them into his trial preparation. Counsel admitted, however, that the state did not receive these results until the day of trial or the day before trial.
It appears that defendant's complaint runs more towards an attack on the procedures to gain scientific analysis of evidence incorporated by the St. Tammany Parish Sheriff's Office rather than a showing of prejudice to his case. An examination of the record shows that the state was afforded no advantage over the defendant with respect to this evidence.
Although we feel that the procedure utilized was inefficient and burdensome to the judicial process, from our independent review of the record, we find that this situation did not affect a substantial right of the accused. La.C.Cr.P. art. 921. We cannot say that the last minute receipt of the results of blood tests[8] impaired the defendant's ability to properly assess the strength of the state's case against him in preparing his defense. State v. Ray, 423 So.2d 1116 (La.1982); State v. James, 396 So.2d 1281 (La.1981).
This assignment is without merit.
Assignment of Error No. 11
The defendant contends that the trial court erred in refusing to explain to the jurors the meaning of "life imprisonment" under the penalty clause of R.S. 14:30, and in refusing to answer the jury's questions regarding the status of the law.
According to the judge's comments while the jury was deliberating during the sentencing phase of the bifurcated trial, the jury had included a note with its verdict on guilt. Although the judge stated that the note was to be filed into the record, that record as lodged in this court does not contain a note. The judge did, however, read the note into the record as follows: "Question one, `Life sentence, can there be parole?' Two, `Can the present law be changed with regard to the above?'"(Tr., Vol. IV, p. 945). The defendant contends that the failure of the trial judge to answer these questions presents reversible error.
The record shows that during the sentencing deliberations, in response to a second note from the jury reasserting the above questions, the trial judge brought the jury before the court and readvised them of the factors which they could take into account in deciding the sentence.[9] He *559 then sent the jury back to deliberate the sentence.
It is well settled that an instruction or comment to the jury making mention of commutation or parole possibilities on a life sentence in a capital case introduces arbitrary factors which divert the jury from their primary responsibility. Therefore, such instructions or comments are improper. State v. Brown, 414 So.2d 689 (La. 1982); State v. Willie, 410 So.2d 1019 (La. 1982); State v. Lindsey, 404 So.2d 466 (La. 1981).
In California v. Ramos, ___ U.S. ___, 103 S.Ct. 3446, 77 L.Ed.2d 1171 (1983), the United States Supreme Court, citing State v. Lindsey, supra, conceded that many states including Louisiana "... have held it improper for the jury to consider or to be informedthrough argument or instructionof the possibility of commutation, pardon, or parole." Id., ___ U.S. at ___ n. 30, 103 S.Ct. at 3459 n. 30. The opinion further notes that "[i]t is elementary that States are free to provide greater protections in their criminal justice system than the Federal Constitution requires." Id. ___ U.S. at ___, 103 S.Ct. at 3460. The trial court was correct in refusing to explain the meaning of "life imprisonment" to the jurors.
This assignment is without merit.
For these reasons, the conviction should be affirmed.
SENTENCE REVIEW
The defendant was tried in accordance with the provisions of La.C.Cr.P. arts. 905-905.8, which provide for a bifurcated trial in capital cases. At the conclusion of the sentencing hearing, the 12-man jury returned a unanimous recommendation that the defendant be sentenced to death.
Article 905.9 of the Code of Criminal Procedure requires this court to review every sentence of death to determine if it is excessive. That article also mandates this Court to establish procedures to satisfy constitutional criteria for that review. Pursuant to this authorization, this court adopted Supreme Court Rule 28, § 1, which the legislature incorporated as La.C.Cr.P. art. 905.9.1, on Review Guidelines, which provides:
Every sentence of death shall be reviewed by this court to determine if it is excessive. In determining whether the sentence is excessive the court shall determine:
(a) whether the sentence was imposed under the influence of passion, prejudice or any other arbitrary factors, and
(b) whether the evidence supports the jury's finding of a statutory aggravating circumstance, and
(c) whether the sentence is disproportionate to the penalty imposed in similar cases, considering both the crime and the defendant.
In compliance with La.C.Cr.P. art. 905.9.1, § 3, the trial judge submitted a Uniform Capital Sentence Report. This report indicates that the defendant is a white male who was 26 years old at the time of trial. He has no children or other dependents. The Pre-Sentence Investigation Report (PSI) ordered by the trial judge prior to sentencing, indicates that the defendant has a wife and two step-sons. This discrepancy was explained during the hearing of both the guilt and sentence phases of the trial. The trial testimony shows that the defendant was not married, but lived in a common-law relationship with Caroline Wright in Meridian, Mississippi. The defendant is not the natural father of Ms. Wright's two children.
The defendant claims to have a high school equivalency degree from Meridian Junior College and medium intelligence. No psychiatric examination was performed. The report shows a sporadic and scant employment history. Both of defendant's parents are deceased. His mother died when he was 12, and his father died when he was 17.
*560 The PSI shows the defendant to have a previous conviction for grand larceny, on which he apparently violated his parole. He was dismissed from a Mississippi prison for that crime only 20 days before the discovery of the instant murder.
PASSION, PREJUDICE AND ARBITRARY FACTORS
The defendant is a white male, as was the victim. The defendant was unrelated to the victim. The record shows that the defendant had never met the victim prior to the night of the murder. The defendant was not a resident of the parish in which the murder was committed or the trial took place.
The prosecutor's argument for the death penalty was made in a non-inflammatory manner. (Tr., Vol. IV, pp. 924, 925, 930-934). The prosecutor refrained from any mention of the possibility of pardon or parole on a life sentence. State v. Lindsey, 404 So.2d 466 (La.1981).
The trial judge, as shown in Assignment of Error No. 11, above, refrained from incorporating any arbitrary factors into the jury's deliberations. State v. Brown, 414 So.2d 689 (La.1982); State v. Lindsey, supra. The judge's charge to the jury stressed that the verdict for the death penalty must be unanimous and be based upon a unanimous finding of a statutory aggravating circumstance. He further correctly charged the jury that: "Even if you find the existance of an alleged aggravating circumstance, you must also consider any mitigating circumstances before you decide that a sentence of death should be imposed." (Tr., Vol. IV., p. 936). La.C.Cr.P. art. 905.3.
Our review of the record shows that the sentence was not imposed under the influence of passion, prejudice or any other arbitrary factors.
AGGRAVATING CIRCUMSTANCES
The jury found two aggravating circumstances, to-wit: the offender was engaged in the perpetration or attempted perpetration of an armed robbery or a simple robbery, La.C.Cr.P. art. 905.4(a), and that the offense was committed in an especially heinous, atrocious, or cruel manner, La.C. Cr.P. art. 905.4(g).
The evidence fully supports the finding that the offense was committed during the perpetration of a robbery. In his testimony at trial, the defendant admitted taking numerous items from the victim's house and placing them in the victim's truck which he and Faulkner then drove to Meridian, Mississippi and burned. Coupled with the testimony of others at trial who identified the property found in the possession of the defendant as that belonging to the victim, the evidence clearly supports the jury's finding of this statutory aggravating circumstance.
The jury also found that the offense was committed in an especially heinous, atrocious or cruel manner. The victim received two blows to the head with a heavy glass object. The victim was then stabbed twice with a butcher knife, once to the lower abdomen, and once to the chest wherein the knife was left in the body. The victim was then shot in the head, which according to the testimony of Dr. Crumpler, caused immediate death. The trial judge, in the Uniform Capital Sentence Report stated that "the killing was not only uncalled for and senseless, but ... was especially heinous and attrocious (sic), and that the death penalty is called for and most appropriate."
To find that the murder was committed in an especially heinous manner, there must be evidence of serious physical abuse of the victim before death. The murder must be one that "causes death in a particularly painful and inhuman manner." State v. Taylor, 422 So.2d 109 (La. 1982); State v. Baldwin, 388 So.2d 664 (La.1980).
Here, the victim was beaten and stabbed and left bleeding on the floor before he was, out of cruelty or pity, shot in the head. The amount of blood splattered about the living room, as evidenced in the photographs, portrays the vicious and brutal *561 nature of the attack. This writer is totally convinced that this crime was committed in an especially heinous, atrocious or cruel manner. Yet, in the past, this court has divided on the "heinous" nature of stabbing and cutting offenses. See State v. Taylor, 422 So.2d 109 (La.1982); State v. Culberth, 390 So.2d 847 (La.1980).
Be that as it may, such a determination is unnecessary in this case as there was clear proof of one aggravating factor. This court has found it unnecessary for both aggravating factors found by the jury to be present in affirming death penalty convictions. State v. Narcisse, 426 So.2d 118 (La.1983); State v. Moore, 414 So.2d 340 (La.1982). The United States Supreme Court has upheld such procedures in Zant v. Stephens, ___ U.S. ___, 103 S.Ct. 2733, 77 L.Ed.2d 235 (1983).
Under Stephens, the death sentence is not impaired if the jury incorrectly determined that the crime was committed in an especially heinous manner. Our only inquiry is whether any evidence presented at the sentencing phase of the trial in support of the heinous nature of the crime inserted any arbitrary factors into the jury's deliberations. Here, the state, at the sentencing phase of the trial, merely entered into evidence the record of the guilt phase of the trial in its entirety. The prosecutor neither produced additional evidence of nor made additional arguments on the heinous nature of the crime. As such, we find that no arbitrary factors were inserted into the jury's deliberations in this instance.
As the evidence is sufficient to support one of the aggravating circumstances, and the production of evidence in support of the other statutory aggravating circumstance inserted no arbitrary factors into the jury's deliberations, the sentence recommended by the jury will not be set aside.
PROPORTIONALITY
Supreme Court Rule 28, § 4 mandates that the district attorney file with this Court a list of each first degree murder case in the district in which sentence was imposed and a synopsis of the facts in the record concerning the crime and the defendant. This list is reviewed by this court to determine whether the sentence in the case before us is disproportionate to the penalty imposed in similar cases. An inference of arbitrariness arises when a jury's recommendation is inconsistent with similar cases in the jurisdiction. State v. Sonnier, 380 So.2d 1 (La.1979).
The state's sentence review memorandum lists thirty-one first degree murder cases in the Twenty-Second Judicial District since January 1, 1976. There have been seventeen in St. Tammany Parish and fourteen in Washington Parish. Several of these cases involved multiple defendants, the most recent one before this Court being State v. Willie, 436 So.2d 553 (La.1983); in which the death penalty for a co-defendant in a rape/murder was affirmed.
In St. Tammany Parish, fifteen defendants were convicted of first degree murder, twelve were sentenced to life imprisonment, and three were sentenced to death. Five defendants in Washington Parish were found guilty of first degree murder, four were sentenced to life, and one was sentenced to death.
In State v. Willie, supra, Robert Lee Willie and Joseph Vaccaro dragged a young woman into a wooded area and raped her. Willie then slashed her throat while Vaccaro held the victim down. Willie's death penalty was affirmed by this court on June 27, 1983. Joseph Vaccaro was sentenced to life imprisonment. State v. Vaccaro, 411 So.2d 415 (La.1982). Roy Clark, Jr. and Brent Mikell were sentenced to death on January 1, 1975 for a murder committed during an armed robbery. This court affirmed the convictions but vacated the death sentence as, at the time of their conviction, the death penalty was illegal. State v. Clark, 340 So.2d 208 (La.1976), cert. denied 430 U.S. 936, 97 S.Ct. 1563, 51 L.Ed.2d 782. Clark and Mikell were subsequently resentenced to life imprisonment.
In this case, the victim was brutally murdered during the robbery of his home. Death was not immediate. He was struck *562 in the head twice with a heavy glass object causing severe cuts. He was then savagely stabbed twice with a butcher knife, the first ripping into his lower abdomen and the second into his chest where the weapon was left imbedded six to eight inches. An examination of the photographs shows blood splattered about the room and onto furniture, evidencing the violence of the attack. Finally, the victim was shot in the head with a small caliber handgun.
After considering the sentence review memorandums submitted by the state and the defendant, the crime, and the defendant involved, we are unable to conclude that the sentence of death in the instant case is disproportionate to the penalty imposed in similar cases in the Twenty-Second Judicial District.
For these reasons, the sentence should be affirmed.
DECREE
For the reasons assigned, defendant's conviction and sentence are affirmed.
AFFIRMED.
DENNIS, J., concurs and assigns reasons.
NOTES
[*] Bailes, J., sitting for Justice Marcus.
[1] While the court reporter spelled the victim's name Radosti, an examination of the indictment and other documents shows the spelling to be Radoste.
[2] Defendant vigorously objected to the publishing of these photographs to the jury and requested a mistrial based upon his perception of the jury's reaction to the photographs. The trial court denied the motion, stating:
Well, I obviously wasn't as observant as you attorneys were. I didn't see anyone crying or gagging. But as I indicated earlier, I've seen many, many photos which were much more or more worse than those, that I didn't see anything inflammatory. I see absolutely nothing inflammatory. I deny the motion for mistrial. (Tr., Vol. III, p. 617).
[3] La.C.Cr.P. art. 798 provides in pertinent part:
It is good cause for challenge on the part of the state, but not on the part of the defendant, that:
* * * * * *
(2) The juror tendered in a capital case who has conscientious scruples against the infliction of capital punishment and makes it unmistakably clear (a) that he would automatically vote against the imposition of capital punishment without regard to any evidence that might be developed at the trial of the case before him, or (b) that his attitude toward the death penalty would prevent him from making an impartial decision as to the defendant's guilt; ...
[4] La.C.Cr.P. art. 766 states:
The opening statement of the state shall explain the nature of the charge, and set forth, in general terms, the nature of the evidence by which the state expects to prove the charge.
[5] See: Tr., Vol. II, p. 424, lines 16-23; p. 425, lines 21-25; p. 426, lines 19-21.
[6] The two indices of exhibits reveal that there was very little marked for identification that was not offered into evidence. (Tr. Vol. II, pp. 411, 412; Vol. III, p. 667).
[7] BY THE COURT: I'm going to deny that motion. There's a practical matter of handling this evidence. When the jury comes back in, make your offer. That which is admissible will be left. That which is not will be removed from the courtroom. (Tr., Vol. III, p. 678, 679).
[8] The only other objection by defendant to not receiving test results found in the record is with reference to a latent print sent to the Louisiana State Police Crime Lab in Baton Rouge for analysis. With respect to this print, the record clearly shows that the state allowed defense counsel to view the report. (Tr., Vol. III, pp. 700, 701).
[9] BY THE COURT: Ladies and Gentlemen, the bailiff has presented me with a note from you, which I will read into the record. It says, "According to the law, does life mean until natural death, or does it mean a predetermined number of years?" According to Louisiana law, the only factors that you can take into consideration in making a determination as to the sentence to be imposed in this case are the statutory aggravating circumstances and the mitigating circumstances that are involved in this case and nothing else. It is based strictly on those factors that you make your recommendation.
I would again indicate to you that your recommendation must be unanimous, if you can either recommend unanimously the death penalty or life imprisonment. In the event you cannot unanimously agree to recommend the imposition of the death penalty or the imposition of life imprisonment without benefit of probation, parole, or suspension of sentence, then you should let me know and the court shall impose a sentence of life imprisonment without benefit of probation, parole, or suspension of sentence.
Mr. Sheriff, you may retire the jury. (Tr., Vol. IV, pp. 943, 944). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2247492/ | 590 F.Supp. 721 (1984)
Eddie Lee GRAHAM
v.
MILKY WAY BARGES, INC., et al.
Civ. A. Nos. 80-3684, 80-4016, 81-951 and 81-3616.
United States District Court, E.D. Louisiana.
June 29, 1984.
*722 Harvey Lewis, Ross Scaccia, New Orleans, La., for plaintiff.
Robert Reich, Randolph Waits, Russell D. Pulver, Ted Alpaugh, Thomas Loehn, Clarence A. Frost, New Orleans, La., Stanley L. Perry, Galliano, La., Robt. Vosbein and Lynn Luker, New Orleans, La., for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
BEER, District Judge.
To the extent any of the following findings of fact constitute conclusions of law, they are adopted as such. To the extent any conclusions of law constitute findings of fact, they are so adopted.
Findings of Fact
Introduction
On September 5, 1980, the "jack up" barge or lift boat, STAR II, was in its jacked-up mode adjacent to an unmanned oil production platform located approximately five miles off the coast of Louisiana in the Gulf of Mexico. At approximately 2:30 a.m., that vessel capsized. Heavy weather generated by a tropical depression developing in the area played a part in this casualty.
The vessel drifted down on and collided with an adjacent platform and subsequently sank. Four men on board were thrown into the water as the vessel capsized. One man, Mr. Barton Daniel, is missing and presumed to have drowned, while two other men, Mr. Charles Taylor and Mr. Edward L. Graham, were injured. The Graham claim was settled before trial and the Daniel and Taylor claims were consolidated.
Mr. Taylor brought his cause of action under the Jones Act and General Maritime Law against the vessel owner and the platform owner contending seaman status. The survivors of Mr. Daniel brought suit under the Outer Continental Shelf Lands Act and the General Maritime Law. Following a pre-trial motion addressing jurisdiction, it was determined that the Daniel family's claim against the vessel owner would be dealt with under the terms of the Death on the High Seas Act. The Court reserved ruling on the jurisdictional question relating to the Daniel claim against the platform owner, but this cause of action settled on the eve of trial. This left the matter of Taylor's status as the sole remaining issue required to be decided by the jury.
The status question was submitted to the jury who found as a fact that Taylor was not a seaman. This finding concluded the jury's fact finding responsibilities but the Court retained the panel in an advisory capacity to address certain factual questions regarding insurance coverages and damages.
*723 The Parties
Chevron, U.S.A. is a corporation doing business in the State of Louisiana and in territorial waters off the coast of Louisiana and was the owner of certain fixed oil production platforms including the South Timbalier Block 24 "CM" platform located some five miles off the coast. The "CM" platform was unmanned and stood in approximately 54 feet of water.
Milky Way Barge Lines (Milky Way) is a Louisiana corporation owning and operating vessels known as jackup barges. At all material times, Milky Way was owner and operator of the M/V STAR II. Stock in the corporation was owned, and the corporation itself was operated, by three individuals: Mr. Rodney Terrebonne, Mr. Pershing St. Pierre and Mr. Sidney Duet. Mr. Duet, also a banker, handled the corporation's business affairs and Mr. Terrebonne and Mr. St. Pierre operated the jack-up vessels. At the time of the capsizing, the M/V STAR II was under time charter to Chevron but manned and operated by Milky Way.
Land and Offshore Services (LOS) is a Louisiana Corporation supplying offshore workers to the oilfield industry. At all times material to this litigation, LOS was working for Chevron as a painting subcontractor performing maintenance on Chevron's "CM" platform. Land and Offshore employed certain laborers including Mr. Charles Taylor, a painter/helper, and Mr. Barton Daniel, the painting crew foreman.
The M/V STAR II
The M/V STAR II was a specially designed service vessel commonly employed in the offshore oil fields. Vessels of this type also are often used for platform related work activities such as serving as a work platform for maintenance crews and their equipment. The evidence indicates that these vessels are unique in their ability to move into position and jack up adjacent to the structure being worked on.
The STAR II's barge-like hull measured 62 feet long and 24 feet wide with a slight rake at the bow. She was self-propelled by twin screws, had a deck house located on the stern, and a bow area which was essentially clear except for a cargo crane on the port side. The deck house contained a bridge/control room, a two bunk cabin for the crew, a quarters room with 12 bunks for the subcontractor's crew, a galley and a storage room.
When functioning as designed, STAR II had the ability to jack itself out of the water on three legs; one amidships on the stern, one on the port bow and one on the starboard bow. Each leg was constructed of welded steel, cylindrical in shape, originally 60 feet in length but modified prior to the capsizing by lengthening to 90 feet with 30 foot extensions at each leg's base. These legs were raised or lowered by hydraulic motors powered by pumps driven by the vessel's main engines. In operation, hydraulic pressure was required to release the brakes from the gears which then were free to raise or lower the vessel. Each leg had its own actuator lever which could either be operated independently or simultaneously with the other leg control levers.
Mr. Pershing St. Pierre and Mr. Rodney Terrebonne, besides being part owners of Milky Way, also alternated as captain of the STAR II. In addition to the captain of the vessel, there was normally only one other individual carried in the crew, a deckhand/engineer.
Relationship of the Parties
The STAR II was time chartered for an unspecified duration to Chevron from August 5, 1980 onward. It had been initially inspected for suitability for service by Mr. Robert Looper, Chevron's Transportation Supervisor, in mid-August, 1980. Chevron's legal department requested and reviewed the vessel's insurance policies and then approved it for use by Chevron but restricted that use to the "Inland Gulf States and water depth of 40' when elevating." The vessel was then placed at the disposal of Mr. Adrian Bruley, a technician in Chevron's Engineering Department in charge of sandblasting and painting offshore platforms.
*724 Chevron had contracted with LOS for sandblasting and painting services of its platforms. LOS was specifically contracted to provide the supervision, labor, equipment and materials to perform this work. At Mr. Bruley's direction, LOS placed its crew and equipment aboard the STAR II in order to perform their platform maintenance work. Mr. Bruley specified which platform needed work and the STAR II with the LOS crew aboard was dispatched to the site. The responsibility of the captain of the STAR II included the operation and control of the vessel, whereas the sandblasting and painting operations were under the direction of the LOS foreman.
The Capsizing
Approximately 10 days prior to the capsizing, the STAR II moved onto location at Chevron's "CM" platform to conduct sandblasting and painting operations. These activities progressed prior to the casualty without difficulty.
On the morning of Wednesday, September 3, 1980, the STAR II jacked up to the well deck level of the platform which was approximately 15 feet above the water. A board was then placed across the gap from the vessel to the structure and work on the upper structure was commenced by the LOS crew.
By the afternoon of September 3, the weather began to deteriorate. The winds increased in velocity and became gusty. The seas grew choppy. By the morning of September 4, there were periodic rain squalls. This brought the painting and sandblasting operations to a halt.
At approximately 5:30 a.m. on Thursday, September 4, Captain Terrebonne reported to the Chevron dispatcher in Leeville (Mr. Cuneo), seeking to be transported to the STAR II so that he could relieve Captain St. Pierre. Chevron maintains a vessel dispatcher in Leeville on a 24 hour basis. The dispatcher's duties were not clearly defined but it's clear that he serves as a coordinator for the transportation of men and materials between Chevron's base in Leeville and the various offshore facilities on the outer continental shelf. The dispatcher's office also served as a center for reports, inquiries and calls to and from the various facilities. Contact with Chevron's platforms and work vessels is maintained through a company radio transmitting station and company owned radios placed aboard various vessels involved with Chevron's Gulf based operations. The STAR II was equipped with such a radio.
Captain Terrebonne arrived by crewboat and boarded the STAR II at approximately 8:00 a.m., and relieved Captain St. Pierre who departed by crewboat for the return trip to Leeville.
At approximately 7:45 a.m., Mr. Cuneo, the Chevron dispatcher, received a printed weather forecast from a weather service under contract with Chevron. This forecast was one of two forecasts regularly received by the dispatcher each day (supplemental bulletins were issued if severe weather posed a threat in the Gulf). Copies of these forecasts were normally sent offshore by this dispatcher to Chevron field foremen via boat or helicopter. If requested by a field unit, the dispatcher would usually broadcast the forecast over Chevron's radio.
During the morning of September 4, a number of requests for weather information were received by Mr. Cuneo. Rather than respond individually, he decided to make a blanket broadcast to all Chevron field units. This forecast, in pertinent part, indicated the following:
... A weak 29.91 inch tropical low pressure zone is moving WNW over Southeast Louisiana. The following conditions are expected:
ThursdayE to NE wind and waves. Tides above normal. Working conditions generally fair at exposed locations and good at sheltered locations except in thunderstorms.
Forecast from 6 AM Sept. 4 to 6 AM Sept. 5:
Waves: (South Timbalier 24) 3/7 ft. ENE SHFT 3/7 ESE 6 AM FRI.
Weather: LA/TEX CoastPartly cloudy to cloudy. Scattered showers and *725 thunderstorms. Gusts to 60 mph and temporary wave increases of 4 to 6 ft. in the most severe thunderstorms.
This forecast was broadcast at approximately 8:30 a.m. and was received by Captain Terrebonne on the STAR II. Subsequently, Terrebonne received a call from Captain St. Pierre on board the crewboat telling him that he would check on Chevron's possible decisions about when vessels might be advised to come inshore because of weather conditions. Consistent with this, when Captain St. Pierre arrived at Chevron's Leeville facility at approximately 11:00 a.m. he did have a discussion about the situation with Mr. Cuneo. There is a conflict in the testimony of these two men as to that discussion. St. Pierre contends that Cuneo told him that he would bring STAR II in if the weather worsened. Cuneo, however, testified that he had responded that such a decision was the responsibility of the captain. I doubt if either was clearly that categoric.
Late that Thursday afternoon, the seas were in the range of 5 to 6 feet; the winds were in the 20 miles per hour range. Captain Terrebonne testified that he did not try to contact Chevron directly regarding weather reports, nor did they attempt to contact him. Around 6:30 p.m., Captain Terrebonne thought that the weather might be clearing up.
Meanwhile, at 5:30 p.m., on September 4, Mr. Jesse Guidry relieved Mr. Cuneo as Chevron's dispatcher. At approximately 8:00 p.m., Mr. Guidry was made aware of a "special weather bulletin." Apparently the bulletin had been first transmitted at around 3:30 p.m. That bulletin read in part:
... A 29.88 inch tropical depression is developing over the SE Louisiana Coast and North Central Gulf. It is centered near 29.0 N, 90.5 W or approximately over Terrebonne Bay. Maximum sustained winds are 25 MPH, gusts to 60 MPH in squalls.
Forecast from 3:30 p.m. Sept. 4 to Sept. 5:
Waves 60 ft. Depth LA/TEX Coast 4/5E Inc 6/8 E by 6 PM FRI.
Wind, LA/TEX Coast E 20/25 Inc E 25/30 by 6 PM FRI.
Weather Cloudy, squalls. Gusts to 60 mph and temporary wave increases of 4 to 6 feet in the most severe squalls.
Mr. Guidry did not broadcast this bulletin. He did not feel that the weather conditions forecasted were a cause for concern.
At approximately 1:00 a.m. on the morning of September 5, Captain Terrebonne went to bed. At around 2:15 a.m., Captain Terrebonne was awakened by the sound and effect of waves striking the hull of the STAR II. The weather was squally, it was raining heavily and the wind and seas appeared to have picked up. Waves were continuing to strike the hull. Captain Terrebonne went to the bridge of the vessel for the purpose of attempting to raise the hull of the vessel above the seas. He started the engines, achieved the hydraulic pressure necessary to jack up and then activated the three lifting levers to raise the hull. The stern and starboard forward lifting devices functioned but the port forward lifting device did not function. Terrebonne adjusted the hull back to a level attitude and then attempted to raise the port forward leg alone; he was unsuccessful in this attempt. Captain Terrebonne and his deckhand next went to the engine room to check for hydraulic leaks or other possibly apparent problems which might explain the difficulty being encountered with the port lifting device. None were found. Captain Terrebonne then ordered the deckhand to pass the word to the LOS crew to don life jackets and move onto the platform immediately. He returned to the bridge to try once more to raise the port forward leg but again failed. Captain Terrebonne then went to the galley to confirm that everyone had left the vessel. He found Graham, Daniel and Taylor were still on board. They all grabbed life jackets and followed the captain in an attempt to reach the platform. As the four men crossed the deck, the hull of the STAR II lifted on a wave and then capsized to port, throwing the men into the water.
*726 Captain Terrebonne, Mr. Graham and Mr. Taylor were rescued from the Gulf after floating for some eight hours. They suffered pain and chemical burns, exposure and some physical injuries. Mr. Daniel was not seen again nor has his body been recovered.
The STAR II was a total loss as a result of this casualty. LOS also lost sandblasting and painting equipment which had been placed on the vessel's foredeck. After the STAR II capsized, it floated downwind until it hit and damaged Chevron's adjacent South Timbalier 24 "CC" platform.
The Insurance Coverage Questions
The owners of the STAR II notified their insurance agent, Mr. Horrace Herrin, of the casualty and filed a proof of loss with the hull and protection and indemnity (P & I) insurers shortly after the incident. The various insurers of the STAR II denied coverage claiming that certain express warranties of the policies had been violated by the insured and, as a consequence, coverage had been suspended or voided. These factual issues were submitted to the jury in its advisory capacity.
As has been previously noted, STAR II was originally constructed with 60 foot legs. The insurors who accepted this risk and issued hull and P & I policies (primary and excess) did so with certain limitations. The STAR II would be covered as long as (a) the operation of the STAR II was confined to "the inland waters of the Gulf States;" (b) the vessel would not be elevated in water depths in excess of 40 feet; and (c) the vessel would not be elevated in seas of five feet or more, and if the vessel was elevated and seas increased to five feet, or were predicted to rise to five feet, the vessel would be lowered to a floating position.
The jury heard evidence relating to the question of whether these limitations constituted express warranties, a breach of which would void coverage regardless of the question of causation, or whether these limitations were special conditions, requiring a causal connection between a breach of the condition and the capsizing before coverage would be voided.
Milky Way also contended that if insurance coverage on the STAR II had been voided, such voiding was the result of the negligence of its insurance agent, Horrace Herrin Agency, or the insurance broker contacted by the agent, Continental Underwriters, Ltd., who had the burden to obtain additional coverage on the STAR II as requested by Milky Way. This request for additional coverage arose out of the owners' decision to extend the length of the legs of the vessel from 60 feet to 90 feet, thereby allowing it to work in deeper waters. Milky Way contended that actions of the agent and broker (or failures to act) led them to believe that the extended coverage had been obtained; the agent and broker, on the other hand, contended that the owners knew that no such coverage had been obtained.
Finally, the broker's errors and omissions insurer, St. Paul Fire and Marine Insurance Company, claimed that it did not owe its insured a duty to defend against these alleged acts of negligence because of a 2½ year delay in notification of the claim under its policy. St. Paul argued that such a delay created irreparable harm to their ability to prepare a defense and that such actions voided coverage under the professional liability policy.
After considering evidence (and argument) on these issues, the jury made findings in an advisory capacity. As to the issue involving the characterization of the express limitations in the Hull and P & I policies, the jury concluded that these terms were not warranties and that the insurers had a duty to defend Milky Way. Being of the view that this finding represents a valid conclusion reached after proper consideration of the evidence and the law, this finding of the jury is adopted by me. The limitations contained in the policies were not express warranties and, therefore, coverage existed at the time of the casualty. This determination effectively renders the remaining insurance issues moot in view of the fact that they were *727 raised alternatively in the event it was determined that no coverage existed.
Damages as to Plaintiff Taylor
The final remaining issue submitted to the jury was the question of damages, if any, due Mr. Taylor for his claims under the General Maritime Law against Milky Way and Chevron. In that regard, the jury returned an award of $176,500.00. This finding by the advisory jury seems to me to be very much on the high side but not so high as to be unacceptable. Accordingly, I adopt it.
Conclusions of Law
The Question of Liability
The primary causes of the capsizing of the M/V STAR II were the inattention of Captain Terrebonne and the unseaworthiness of the STAR II. More specifically, Captain Terrebonne was remiss in (a) failing to be aware of, and, thus, to take into account the safe operational limits of his vessel and (b) failing to properly monitor weather conditions which posed a threat to the safety of his vessel and crew. The vessel was unseaworthy as evidenced by the captain's inability to raise or jack-up the vessel on its port forward leg, thereby allowing seas to strike the hull of the vessel and eventually capsize her. A contributing cause of the casualty was Chevron's negligence in sending the STAR II beyond its navigational limits and, once having done so, in failing to order the vessel back to safety in adverse weather or, at least, to supply her captain with available weather forecasts which indicated that dangerous conditions were developing. The division of liability as between Milky Way and Chevron is determined to be seventy (70) percent and thirty (30) percent respectively.
Milky Way's Negligence
At the time of the capsizing, the STAR II was under time charter to Chevron. The standard charter party in effect between Milky Way and Chevron stated in part:
Owner shall man, operate, and navigate the vessel. The vessel shall prosecute its trips and perform its services with dispatch, as directed by the charterer, but responsibility for the management and navigation and operation of the vessel shall remain at all times in the owner ... and nothing herein contained shall be construed as making this a demise.... Owner hereby agrees to defend, indemnify, and hold harmless Chevron against all claims for ... damages, whether to person or property, and howsoever arising in any way directly or indirectly connected with the possession, navigation, management and operation of the vessel.
The agreement also required that Milky Way procure and maintain insurance naming Chevron as an additional insured in the policies.
Under this time charter agreement, Milky Way remained responsible for providing and maintaining a seaworthy vessel and for supplying a captain (and crew) who would retain full operational control. The responsibilities of a vessel owner operating under such an agreement are well established. If the owner retains control of his vessel, he remains liable for damages arising out of its operation whether the charter be by voyage or for time. See e.g., Agrico Chemical Co. v. M/V BEN W. MARTIN, 664 F.2d 85, 91 (1981); Continental Oil Co. v. Bonanza Corp., 677 F.2d 455, 462 (5th Cir.1982).
Jack-up barges, unique in their functional ability to convert from seagoing watercraft to "land-based" work platforms at the throw of a lever, may require unique precautions to ensure their safety in either of these modes. The captain of such a vessel must be aware of the operational limitations of his vessel because a jack-up barge in its raised mode, analogous to a fish out of water, can be victim of the damaging effects of the winds and waves. The captain of such a vessel which is already raised above building seas may find that he has no option other than to jack the vessel higher and higher in an attempt to maintain a sufficient air gap between the hull and the seas. Thus, it is necessary that operators of such vessels establish operational guidelines to ensure the safety of *728 their vessel and those who are aboard. Although the legs of the STAR II had been extended from 60 feet to 90 feet prior to the casualty, the evidence indicates that safe operating limitations of the vessel (either with the original or the modified legs) were never fully determined. Operation of the STAR II, by a captain possessing little knowledge of the safe weight, depth, wind and sea capabilities of his vessel, in an open reach of the Gulf of Mexico constituted negligence which is properly attributed to the vessel owner.
As master of the STAR II, Captain Terrebonne had a duty to monitor weather conditions in the South Timbalier Block 23-24 area to ensure its safety. Boudoin v. J. Ray McDermott, 281 F.2d 81 (5th Cir.1960). In this regard, the Captain had at his disposal a Chevron radio which provided direct communication with Chevron's vessel dispatching facility in Leeville, a VHF radio providing ship-to-ship and ship-to-shore communication as well as continuous NOAA weather broadcasts, and public radio and T.V. broadcasts. The evidence shows that Captain Terrebonne did little to monitor the weather conditions which posed a threat to the safety of his vessel. Some three hours prior to the casualty he went to bed leaving no watch on duty to keep an eye on sea and wind conditions which should have caused concern.
By the time Captain Terrebonne was awakened by the sounds of waves striking the hull of the STAR II, the seas were already too rough for him to jack down. His only option was to attempt to raise the hull above the force of the seas. Captain Terrebonne's failure to post a weather watch or to obtain up-dated weather forecasts, especially in view of the fact that his vessel was in its jacked-up mode, standing in very deep water and already swaying uneasily due to the effects of existing winds and waves, is attributable to the vessel owner.
Finally, it was the failure of the vessel's port forward leg's lifting mechanism which sealed the fate of the STAR II. When Captain Terrebonne was unable to raise the vessel's hull above the pounding seas, it was only a matter of time before the vertical lifting force of the sea and the horizontal push of the winds and the waves would capsize the STAR II. This unseaworthiness further constituted negligence for which the vessel owner must be answerable.
Chevron's Negligence
A contributing cause of the casualty was Chevron's negligence in sending the STAR II out to perform work on a rig which stood in unsheltered waters at a depth which exceeded the safe navigational limits of STAR II. Chevron company policy required that its legal department review and approve each chartered vessel's insurance coverage prior to sending that vessel into service. Once approved, the vessel was placed on an interoffice memo entitled "Insured Boat and Barge List" which listed vessels available for service and the navigational limits established for each vessel. The STAR II was restricted to the "Inland Gulf States and water depth of 40 feet when elevating." The "Insured Boat and Barge List" was sent to each of Chevron's supervisors and field foremen, including Mr. Looper, Chevron's Transportation Supervisor, and Mr. Bruley, the technician in charge of maintenance on offshore oil and gas platforms. Despite Chevron's own directive not to send the STAR II to elevate in waters deeper than 40 feet, Mr. Bruley and/or Mr. Looper dispatched the vessel to perform maintenance on Chevron's "CM" platform which stood in approximately 54 feet of unprotected water.
Chevron failed to provide the Captain of the STAR II with weather forecasts which gave indication of the perils encountered. A special weather bulletin prepared by a weather service under contract to Chevron was sent to Chevron's Leeville vessel dispatching facility. This bulletin (customarily forwarded from the front office to the radio dispatcher) failed to reach the dispatcher for several hours after its issuance. When the report reached the dispatcher, no broadcast followed to vessels such as *729 STAR II. Having sent the STAR II into unsheltered waters beyond her navigational limits, these actions on the part of Chevron deprived STAR II of weather information which could have played a part in a decision to jack-down and seek sheltered waters at a time when such could have been safely accomplished.
Furthermore, I find that Chevron's Leeville centered operations in the Gulf of Mexico as they had to do with the dispatching, operating and recalling of so-called lift type vessels was such that certain duties did arise by reasons thereof. Among those duties was an obligation to participate in a decision making process aimed at deciding when operations in the Leeville-Gulf area which were controlled by Chevron should be shut down.
Chevron's lack of such participation was a contributing factor in this casualty.
The Question of Indemnity
Chevron contends that even if its own negligence contributed to the casualty, any resulting liability falls upon Milky Way under the indemnity provision of the time charter. Moreover, Chevron claims its liability was insured under the terms of a standard P & I policy obtained by Milky Way in accordance with the terms of the charter. The policy incorporated the typical provision insuring liabilities of the insured as a shipowner. Coverage, says Chevron, was expressly extended to it as an additional insured and the underwriters' right of subrogation against Chevron was waived.
Neither Milky Way nor its insurers are responsible for negligent actions of Chevron's shore based establishment which made the decisions regarding which chartered vessel should be dispatched to perform the work on the "CM" structure. Nor is Milky Way or its insurers answerable for negligent action of Chevron's dispatcher in failing to forward weather bulletins to Chevron chartered vessels working offshore. Such acts were not related to "the operation, navigation, or management" of the STAR II, as those terms are meant to apply to one who acts as "vessel owner." Chevron's negligence arises out of actions taken as an offshore oil producer and owner of certain fixed platforms requiring continuous maintenance.
Even if there was an operational relationship between the Chevron employees and the navigators of the vessel, the indemnity provision does not provide Chevron with immunity from the negligence of its own employees. Liability of this sort can arise only from the plainly expressed intention of the parties, spelled out in unmistakable terms. Batson-Cook Company v. Industrial Steel Erectors, 257 F.2d 410 (5th Cir.1958).
Similarly, the P & I policy does not cover Chevron as an additional insured under the circumstances of the capsizing because Chevron did not become liable "as owner of" the vessel. The distinction between a charterer acting as vessel owner and in some other capacity is recognized in this circuit. In Lanasse v. Travelers Ins. Co., 450 F.2d 580, 583 (5th Cir.1971), a seaman aboard a vessel was injured while transfering a welding machine by crane from the vessel to a platform owned by Chevron. The district court found that the sole cause of the accident was the negligence of Chevron's crane operator and the Court of Appeals faced the issue of whether Chevron was covered as an additional assured under a P & I policy similar to the policy at issue here. The court held that "[t]he Trial Judge was ... right in holding that the P & I policy did not cover this claim because Chevron, as an additional insured ... did not become liable `as owner of' the vessel." The court went on to declare that there must be at least some causal operational relation between the vessel and the injury.
In Lanasse, the vessel caused no part of the injury and so the charterer bore the full cost of the accident. In Dow Chemical Co. v. Tug "THOMAS ALLEN," 349 F.Supp. 1354, 1364 (E.D.La.1972), the Court applied the Lanasse logic to a joint tortfeasor situation. Dow owned a barge pulled by the insured's tug. The P & I policy on the tug *730 named Dow an additional assured as charterer. When the barge operator insisted on proceeding through a channel despite the absence of pipeline charts, the tug's captain acquiesced. The tug ruptured a gas pipeline and the ensuing fire injured a seaman on the barge and damaged the barge. The Court found the barge and tug operators jointly negligent in causing the injury. Accordingly, the Court limited Dow's coverage under the policy to that attributable to the tug's negligence.
The Court stated:
Dow's liability in this case arises from its negligence as a barge owner, or more importantly, a service company anxious to perform services for its customers without delay. No such coverage was provided by [the P & I insurers].
Id. at 1364-5.
This same logic applies to the case presently before the Court. Chevron's liability for the capsizing of the STAR II arises from its acts as platform owner concerned, among other things, with the maintenance and functioning of its platforms; not out of negligent acts as owner/operator of a jackup barge.
The Fifth Circuit again addressed these issues presented by P & I coverages in Wedlock v. Gulf Miss. Marine Corp., 554 F.2d 240 (5th Cir.1977). In Wedlock, McDermott, the barge owner, chartered a tug and its crew to tow the barge. An employee of the tug was injured on the barge. McDermott settled with the injured employee and sought indemnification under a P & I policy on the tug naming him as an additional insured. The policy did not list the barge as a covered vessel. The court held that "the insurance policy does not purport to cover McDermott's liability for acts of negligence committed qua barge-owner, rather than qua charterer." Id. at 242. Lanasse was specifically approved in the court's interpretation of the policy:
Lanasse, however, establishes only that showing "some causal relation" brings the liability within the insurance policy on the covered vessel. It does not address the question of the extent of such coverage. It is entirely consistent with Lanasse to say that the insurance policy covers liability arising from the accident only to the extent the accident is caused by the covered vessel.
The Wedlock court went on to point out:
In Lanasse, the vessel caused no part of the injury; hence the charterer was unable to recover as an additional assured and bore the full cost of the accident. In the case at bar, negligence of the tug's crew was one of two proximate causes of the accident, and hence we should require the tug's insurer to bear some but not all of the loss. We leave the cost of the accident to be shared by the tug-owner and barge owner in the amount of their respective contributions. Lanasse, after all, emphasizes that Chevron could not recover from the insurer of the tug because Chevron's liability arose qua platform operator rather than qua shipowner (or charterer). Similarly, McDermott's liability arose as that of a barge-owner, not as an owner or charterer of the covered vessel.
Id. at 244. See, also, St. Paul Fire & Marine Ins. v. Vest Transp., 666 F.2d 932 (1982); American Motorists Ins. Co. v. American Employer's Ins., 447 F.Supp. 1314 (W.D.La.1978), remanded on other grounds, 600 F.2d 15 (5th Cir.1979).
The case of Offshore Logistics Services v. Mutual Marine Office, 462 F.Supp. 485 (E.D.La.1978), is instructive as to the effect of various types of charter agreements on the interpretation of P & I "additional insured" clauses. In Offshore, a crane operator injured while being transported ashore in a crewboat from a rig in the Gulf of Mexico sued the vessel charterer. The charterer settled with the plaintiff and brought an action against the vessel owner's insurer for indemnity as an additional insured under the policy. The district court held that where the agreements between the vessel owner and a demise charterer manifested intimate affiliation and indicated the intent to constitute the charterer as owner pro hac vice of the vessel, the charterer's negligent acts were committed *731 as "owner" and therefore were covered by the terms of the vessel owner's policy.
The language of the charter agreement here involved indicates that "nothing herein contained shall be construed as making this a demise." Taking the directive of the recent Fifth Circuit jurisprudence on the subject, I conclude that Chevron's negligence was a contributing cause of the capsizing of the STAR II and was not committed as vessel "owner." Such negligence does not, therefore, fall under the additional insured provisions of Milky Way's P & I policy.
The cost of the casualty must be shared between Milky Way and Chevron.
Damages as to Plaintiff Daniel
My Minute Entry of November 2, 1983, indicates that the claims by the Daniel family brought against Milky Way arise under the Death on the High Seas Act, 46 U.S.C. Section 761, et seq. By the terms of DOHSA, recoveries for wrongful death are limited to pecuniary loss. Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 98 S.Ct. 2010, 56 L.Ed.2d 581 (1978). Considering all of the evidence submitted to the Court pertaining to the question of damages, it is my conclusion that the sum of $400,000.00 represents fair and adequate compensation in satisfaction of the claims made on behalf of Barton Daniel and his survivors.
Damages as to Land and Offshore Services
LOS has made a claim for damages arising out of the loss of painting and sandblasting equipment which had been placed on the deck of the STAR II, the cost of which totaled some $61,139. LOS also files a claim for reimbursement of $2,618, covering personal effects lost by its work crew at the time of the capsizing. I conclude that payment of $60,000 will represent fair and adequate compensation to satisfy these claims, considering various counter-balancing factors.
Finally, the Court recognizes a compensation lien in favor of LOS for compensation benefits and medicals paid to plaintiff Taylor by LOS in the amount of $5,039.58. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1722068/ | 593 S.W.2d 746 (1979)
Ken SPAIN, Appellant,
v.
HOUSTON OILERS, INCORPORATED, Appellee.
No. A2156.
Court of Civil Appeals of Texas, Houston (14th Dist.).
December 12, 1979.
Stevens F. Mafrige, Houston, for appellant.
William R. Eckhardt, Houston, for appellee.
Before J. CURTISS BROWN, C. J., and MILLER and PAUL PRESSLER, JJ.
PAUL PRESSLER, Justice.
This is an appeal involving an arbitration clause in the employment contract between the parties. The court below granted appellee's motion to dismiss and ordered appellant to submit his claim to arbitration.
*747 On January 14, 1972, appellant signed a National Football League (NFL) Standard Player Contract (the contract) which by its terms was in effect from February 1, 1970 through January 31, 1974. The terms and conditions of employment specified in the contract were the result of collective bargaining between the National Football League Player's Association (NFLPA), the exclusive bargaining representative of professional football players in the NFL, and the National Football League Player Relations Association (NFLPRA), the exclusive bargaining representative of the Member Clubs of the NFL. During 1972, appellant received a disabling injury while performing his responsibilities under the contract. On August 29, 1972, appellant was released by appellee.
Article XIV of the contract provided that a player would receive at least certain minimum benefits while employed. Under this provision, appellant claims that appellee was obligated to continue paying appellant's salary while he was injured and not playing, for the duration of the season. Appellee refused to do so and appellant brought this suit. Various continuances were granted, delaying trial for approximately four years. Each of the parties requested continuances on different occasions for varying reasons and each participated in pre-trial discovery. The contract in question was negotiated under the collective bargaining provisions of the Labor Management Relations (Taft-Hartley) Act.
While state and federal courts have concurrent jurisdiction in cases involving the alleged breach of contracts negotiated pursuant to the Taft-Hartley Act, it is clear that substantive federal law must govern the interpretation and application of the terms of those contracts. National Labor Relations (Taft-Hartley) Act § 301(a), 29 U.S.C. § 185(a) (1970); Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614, 13 L. Ed. 2d 580 (1965). This section provides for the filing of a suit in Federal District Court where it is "for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter,..." The U. S. Supreme Court, in Radovich v. National Football League, 352 U.S. 445, 77 S. Ct. 390, 1 L. Ed. 2d 456 (1957), determined that professional football is "commerce" as defined in the Sherman Anti-Trust Act. As that definition is virtually identical to the definition of "commerce" under the Taft-Hartley Act, the provisions of the Taft-Hartley Act and the court decisions interpreting it apply to the contract negotiated by the organizations representing the NFL players and member clubs.
Article XI, § 6, of the contract provides for mandatory arbitration of disputes relating to injuries incurred by a player while performing services required of him under the contract. Appellant contends in his first point of error that the court erred in dismissing his suit and compelling arbitration because appellee waived its right to arbitration as a matter of law. The right to have a dispute submitted to arbitration, like any other contractual right, may be waived either expressly or implicitly. Burton-Dixie Corporation v. Timothy McCarthy Construction Co., 436 F.2d 405 (5th Cir. 1971). Such a waiver must be intentional. If it is to be implied, the intention must be ascertained from the facts of the case. Mamlin v. Susan Thomas, Inc., 490 S.W.2d 634 (Tex.Civ.App.-Dallas 1973, no writ). Under the few federal cases which specify the standards for determining waiver of the right of arbitration, neither the failure to exercise the right to have arbitration at the commencement of litigation, nor a short delay thereafter, has constituted a waiver absent a showing of prejudice. Carcich v. Roderi A/B Nordie, 389 F.2d 692 (2d Cir. 1968); ITT World Communications Inc. v. Communications Workers of America, AFL-CIO, 422 F.2d 77 (2d Cir. 1970). Other cases, however, indicate that if the delay is excessive or if the party seeking arbitration utilizes judicial discovery procedures not available in arbitration, prior to moving for dismissal of the suit and enforcing his right to arbitration, he was waived this right. American Locomotive *748 Co. v. Chemical Research Corp., 171 F.2d 115 (6th Cir. 1948), cert. denied, 336 U.S. 909, 69 S. Ct. 515, 93 L. Ed. 1074 (1949); Carcich v. Roderi A/B Nordie, supra; Empresa Maritima de Transportes, S. A. v. Transatlantic & Pacific Corp., 200 F. Supp. 520 (S.D.N.Y.1959); REA Express v. Missouri Pacific Railroad Company, 447 S.W.2d 721 (Tex.Civ.App.-Houston [14th Dist.] 1969, writ ref'd n. r. e.). While these latter cases do not involve employment contracts, the federal policies regarding arbitration expressed therein are applicable to the facts before us. We hold that the three year, eight month lapse between the date appellee received notice of appellant's claim through the filing of this suit and the date appellee filed its motion to dismiss and compel arbitration is an unreasonable delay and prejudicial per se. Appellee's contention that the delay was necessitated by the fact that negotiations were then in progress between the NFLPA and the NFLPRA for a new contract which would be retroactive to February 1, 1974 is without merit. The latter contract could not affect appellant's claim since it arose while the 1970 contract was in effect. We hold that this long delay, in conjunction with the use of pre-trial discovery not provided for in the arbitration clause of the 1970 contract, manifested an intent on the part of appellee to waive its right to arbitration.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1725851/ | 406 S.W.2d 76 (1966)
FORT WORTH LLOYDS INSURANCE COMPANY, Appellant,
v.
Louis Earl WILLHAM et ux., Appellees.
No. 7616.
Court of Civil Appeals of Texas, Amarillo.
June 6, 1966.
Rehearing Denied September 6, 1966.
*77 Crenshaw, Dupree & Milam, Lubbock, Cecil Kuhne, Lubbock, of counsel, for appellant.
Key, Carr & Clark, Lubbock, Aubrey J. Fouts, Lubbock, of counsel, for appellees.
CHAPMAN, Justice.
This is an appeal from a judgment based upon a jury verdict for insureds, Louis Earl Willham, et ux., against Fort Worth Lloyds Insurance Company in a suit upon an insurance policy covering a vacant residence owned by appellees Willham in Lubbock. The damages awarded resulted from water leakage throught burst water pipes in the attic connected with the hot water circulating system of the residence. The discovery of the flooded house was made on December 21, 1964. The week previous the temperature in Lubbock had been down to 12° or 14° above zero.
Appellees had moved out of the state, placed their home on the market and listed it for sale with a real estate agent. They left one key with the agent and one with her brother-in-law and sister, Mr. and Mrs. Robert Mampel, so they could check on the place during the time it was vacant. The house was centrally heated by gas. They had that service and the telephone service terminated. The water and electricity were left on for the convenience of the real estate agents showing the house to prospective purchasers. The agency with which it was first listed did not sell the place within three months, so it was then listed with Pat Garrett, another real estate agent. He suggested to the owners it might expedite the sale if the house was painted, so their real estate agent, with appellees' permission, employed painters to paint the house.
In July Mr. Mampel noticed water leaking from the water-evaporated air conditioner mounted on a stand outside of the house. He repaired the tubing. Approximately two weeks later he went back and found the plastic line had been pulled loose. At that time he cut the water supply to the house off at a valve in the back yard, then went into the house and opened the faucets in the kitchen and two bathrooms and flushed the water out of the commode.
In August Mr. Mampel went back after a gardener had mowed the lawn and discovered the water supply to the house had been cut on. He cut it off and went back through the same procedure inside and outside the house again. In October or early November he went back and checked on the house again and primarily checked to see that the water supply to the house was off and the faucet open in the kitchen. It was a dual type faucet that turned on both the hot and cold water by pushing the lever upward. The water supply to the house was off and the kitchen faucet open.
Mr. Mampel testified that about 5:30 or 6:00 o'clock p. m., December 21, his 17-year-old son while driving by the subject house saw two men "* * * in thereby their front door, and he stopped to see what was going on, and he looked in andhe didn't know the men, who they were, but he looked in the hallway, the entrance hall, was floodedhe came home and reported to us *78 that there was water all over the Willham's home * * *."
Don Anderson, foreman of a plumbing company and with twenty years experience as a plumber, repaired the burst pipes in the attic. He testified that cutting off the stop and waste valve outside the house drained the cold water out of the house and opening any two faucets inside the house drains the hot water circulating system. He said opening one faucet probably would drain the hot water but there is a possibility of an air lock. He said opening a valve at the water heater probably would not drain the hot water system as well as if the faucets in the house were open. He said the circulating system held about two or three gallons of water and the probability was if the water was cut off outside and the circulating system froze with one faucet open the pipes would not burst and no damage would be done. He testified in effect that in his opinion the water was on to the house when the freeze took place or there could not have been the extensive flooding of the house and as much damage. The policy of insurance in question under Section II, Subsection A of "Exclusions" contained an exclusion clause providing:
"Exclusions: This policy does not insure against
A. Loss to either plumbing or heating systems including appliances, or by leakage or overflow from such systems or appliances, caused by freezing while the described building(s) is vacant or unoccupied, unless the insured shall have exercised due diligence with respect to maintaining heat in the building(s) or unless such systems and appliances had been drained and the water supply shut off." (Emphasis added.)
Another very material condition to this law suit shown under Subsection A of Section VI "Other Provisions" which we shall call the "Prejudiced" clause in the policy provides:
"Other Provisions:
A. Control of Property: This insurance shall not be prejudiced by any act or neglect of any person (other than the named insured) when such act or neglect is not within the control of the named insured." (Emphasis added.)
The jury found (1) the water supply to the house had been shut off prior to the time the pipe froze and burst; (2) that the water system had been drained prior to the time the pipe froze and burst; and (3) that the water supply was not turned on prior to the loss by anyone under appellees' control.
Under the Exclusions A clause above quoted we need not give any consideration to that part concerning diligence with respect to maintaining heat in the building. It is admitted by appellees that they had the heat shut off. However, the word "or" used in the disjunctive separates that clause from the one providing "unless such systems and appliances had been drained and the water supply shut off."
If we understand appellant's complaint concerning the clause with respect to the drainage of the systems and appliances and shutting off the water supply, it is that the court committed reversible error in denying an instructed verdict for the reason "* * * there is no evidence that the plumbing system was drained and the water supply shut off at the time of the loss by leakage caused by freezing, as provided by the exclusion."
We are unable to agree with appellant's contention in this respect. The policy does not insure against loss unless such systems and appliances had been drained and the water supply shut off. (Emphasis added.) The clause is in the past tense. There is probative evidence from which the jury could and did find that the water supply to the house had been shut off and the systems and appliances drained prior to the time the pipe burst. The general rule of construction of such insurance policies *79 has been stated by the Supreme Court of Texas in Providence Washington Insurance Company v. Proffitt, 150 Tex. 207, 239 S.W.2d 379, as follows:
"It is a settled rule in this state that policies of insurance will be interpreted and construed liberally in favor of the insured and strictly against the insurer. * * * It is also well settled that exceptions and words of limitation will be strictly construed against the insurer."
Applying the rules of law just quoted to the facts above related, we are compelled to the conclusion that the evidence supports the findings of the jury upon the first two issues submitted. To follow appellant's theory would be to hold the exceptions to the exclusions under discussion as surplusage and meaningless. Had the water supply been shut off and the appliances drained at the time of the freeze, there could have been no freezing of water in the pipes and therefore could never have been a loss if the exclusion requires that the water supply be shut off and the pipes drained at the particular time of the freeze.
"Insurance policies being contracts, they are governed by the rules of interpretation that are applicable to contracts generally, * * *." 32 T.J.2d, Insurance, Sec. 54, p. 102 and cases cited in the footnote under such statement.
The courts are without authority to needlessly reject any words or terms used in contracts by the parties or delete any clause therein as surplusage, unless such action is judicially mandatory. Williams v. J. & C. Royalty Co., Tex.Civ.App., 254 S.W.2d 178 (writ ref.) and cases there cited. We therefore hold that issues one and two should have been submitted to the jury; that there was probative evidence to support them; and that the verdict as to those issues was not against the great weight and preponderance of the evidence. It is immaterial that the brother-in-law was the one who terminated the water supply to the house and drained the systems and appliances. He was carrying a key to the house and we think it must be said that he was acting as appellees' agent insofar as his actions in respect to the water drainage of the house. He testified in effect that they left him the key in order that he might check on the house for them. It is difficult to conceive of a more important area to check than to see that the water supply was cut off and the pipes drained in a city where the temperature goes as low as 18° to 20° below freezing. This is especially true in a hot water circulating system such as appellees' house, where the water circulated from the hot water heater up through the attic and then back down into the hot water container and where the agent knew there was no heat in the house.
The record with respect to the third issue presents a more difficult problem. None of the parties have cited us to any authorities construing a clause such as the "Prejudiced" clause of Section VI under "Other Provisions" of the policy upon which Special Issue 3 was based or any clause analogous thereto. In our independent research we have been unable to find any case construing such clause.
Appellees contend by brief they were not required to prove that the one turning the water back on was not under their control. We do not so interpret the policy. The clause under consideration is just as much a part of the contract as the exclusions clause, and we believe when considered in connection therewith requires a showing under this record that the one turning the water back on was not within the control of appellees. There being no direct evidence, we must look to the circumstances. We hold such circumstances are such as required the trial court to submit the issue but we believe the answer of the jury is contrary to the great weight and preponderance of the evidence.
*80 On passing on this question we must weight and consider the evidence which supports the verdict and that which does not, and must set aside the judgment and remand the case if after such consideration we conclude the verdict is so contrary to the overwhelming weight of all the evidence as to be manifestly unjust, regardless of whether there is some evidence to support it. Watson v. Prewitt, 159 Tex. 305, 320 S.W.2d 815; In re King's Estate, 150 Tex. 662, 244 S.W.2d 660.
One of the keys to the house at the time was under the control of the real estate agent, Pat Garrett. The record shows there was a lock box on the door for the benefit of all real estate agents in multiple listing and on which a master key worked. The house was in the multiple listing service, as we understand the record. This means that all real estate agents in Lubbock in multiple listing had a master key to open the box on the door containing the key to the house, "* * * where any of them can come by and show the house."
The real estate agent with appellees' consent also employed painters who had been working inside the house shortly before the pipes burst. We thus have the painters, Mr. Garrett, and all other multiple listing real estate agents with access to the house and premises. We believe the jury had the right under the circumstances to pass on the question of whether some of these people turned the water back on. Still, appellees would not be prejudiced within the clause under discussion unless within the terms of the policy they exercised control over all these people within the terms of the "Prejudiced" clause of Section VI under "Other Provisions." We believe it must be said that they at least exercised control through their agent of the workmen who had been painting the house. Since they were employed by the real estate listing agent with the consent of appellees, they certainly had the authority to control them through their agent, even to the extent of requiring that they not turn the water on in the house had they desired to make such condition in the painting agreement. Furthermore, we think it most improbable that painters would work the customary eight hour day without turning the water on in the house for either the use of the commodes, the lavatories, for drinking purposes, or for inside paint mixture without instructions not to do so, or not to cut it on without it back off.
In a case construing an automobile liability policy the Supreme Court of Texas in American Fidelity & Cas. Co. v. Traders & Gen. Ins. Co., 160 Tex. 554, 334 S.W.2d 772, 775 has said:
"Black's Law Dictionary (4th Ed., 1951) defines `control' as `Power or authority to manage, direct, govern, administer, or oversee.' In State v. Camper, Tex.Civ.App., 261 S.W.2d 465, 468, it is stated that `control' is `synonymous with management.'"
The word "control", citing Webster's New International Dictionary and Words and Phrases, has been defined in Board of Insurance Commissioners v. Duncan, Tex. Civ.App., 174 S.W.2d 326, 329, (writ ref.) as follows:
"`To exercise restraint or deciding influence over; to dominate; regulate; to hold from action; to curb; subject or overpower.' Words and Phrases, Perm.Ed., vol. 9, page 434, says: `To "control" means to exercise restraint or deciding influence over; to dominate; regulate; to hold from action; to curb; subject or overpower.'"
Neither of these definitions do violence to, but to the contrary, we believe, support our holding that under the "Prejudiced" clause appellees though their listing agent exercised control, or had the authority to exercise control over the painters with respect to turning the water on in the house, and were therefore within the control of the insureds.
*81 The only testimony that others were in or around the house after the water was turned off last was the evidence concerning the two men observed by Mr. Mampel's son on the day he discovered the flooded house, and that testimony is not even perfectly clear as to whether they were the painters or not or were inside or outside the house.
If we are correct in our construction of the word "control" as it relates to the "Prejudiced" clause, to the effect that the insureds were obligated under the record to negative the fact that whoever turned the water back on was not within their control, then the judgment rendered is contrary to the great weight and preponderance of the evidence. Surely, if the painters did not turn the water back on, appellees could have proved the fact. We feel the case needs further development to insure justice to all the parties.
Accordingly, the judgment is reversed and remanded for a new trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1740849/ | 506 So. 2d 1336 (1987)
TAHOE CORPORATION, a Utah Corporation & William H. Deal, Trustee for Tahoe Corporation, Appellants,
v.
P & G GATHERING SYSTEMS, INC., Gas Transportation Corporation, William B. Brown & William H. Krutzer, Appellees.
No. 18686-CA.
Court of Appeal of Louisiana, Second Circuit.
May 6, 1987.
*1338 Shotwell, Brown & Sperry by George Wear, Jr., Monroe, and McKeithen, Wear, Ryland & Woodard by George M. Wear, Columbia, for appellants.
Brown, Wicker & Amman by Ralph J. Wicker, Monroe, for appellees.
Before HALL, SEXTON and NORRIS, JJ.
NORRIS, Judge.
This is a suit for quantum meruit or breach of the obligation to perform in good faith. The plaintiff, Tahoe Corp., claims that it continued to sell natural gas to defendant, P & G, even though P & G refused to negotiate a better price for Tahoe. To prove damages, Tahoe introduced evidence of numerous other transactions between the defendants and other sellers, as well as evidence of a federal maximum price. It argued that the relationship between the corporate defendants encouraged them to depress the price they paid to Tahoe, thereby enriching themselves at Tahoe's expense. The trial court found that the original contracts were valid and that Tahoe and P & G terminated their contract in 1981. The court also found that the parties entered an oral agreement from which Tahoe had the option of receding at will. Under this new agreement, P & G offered to continue receiving Tahoe's gas in 1981, but only at the same price as they were then paying. Since Tahoe chose to continue dealing with defendants and they paid pursuant to the oral offer, the court dismissed the suit. Tahoe now appeals, assigning as error:
(1) the finding that Tahoe had other options for marketing its gas;
(2) the finding that the parties entered a new agreement in 1981; and
(3) the failure to award Tahoe a fair and equitable price based on quantum meruit.
Unable to see manifest error in any of these findings, we affirm the trial court's judgment.
FACTS
The facts begin in the mid-1970s, a period of rapid mineral exploration both in *1339 general and in Ouachita Parish. George Sanders came to Louisiana and negotiated with the Grant family, which owned a large tract of land off Sterlington Rd. in Monroe. As a result of these negotiations, the Grants executed a lease in June 1976, naming as lessee Sanders's corporation, Diablo Oil. Shortly after this, Sanders organized another corporation, defendant P & G Gathering Systems Inc. P & G set up the pipelines that would carry off the gas from the lands in the Grant lease. Monroe businessmen William D. Brown and William H. Krutzer, interested in buying P & G's gas, guaranteed Sanders's loan to erect the pipeline system.
Meanwhile the plaintiff, Tahoe Corp., came on the scene. It acquired a number of subleases from Diablo whereby Tahoe would drill and complete wells on the leased property. Tahoe drilled and completed 25 wells under these subleases.
Tahoe then entered a contract to sell the gas it extracted under the subleases. By contract dated September 28, 1976, Tahoe agreed to sell its gas to P & G for a price of $1.00 per m.c.f. Tahoe would also receive one-half of anything over $1.25 that P & G received from re-sale of the gas. The contract specified a term equal to that of the duration of Tahoe's subleases. We note that at this opening stage of Tahoe's involvement, Tahoe was surrounded by Sanders: acquiring its mineral rights by a sublease from Diablo, carrying its gas through pipes owned by P & G, and selling its gas to P & G, but Tahoe was not fenced in to the extent it later was.
P & G simultaneously entered a contract to resell the Tahoe gas. The purchaser was Gas Transportation Corp. ("GTC"), owned by Brown and Krutzer, who had backed P & G's construction finances. Under this contract, GTC was to pay P & G $1.25 per m.c.f. P & G was also to receive a 5¢ per m.c.f. escalation on the first anniversary date in 1977, and on every successive anniversary date. The term was set at five years; thus the contract would expire on October 1, 1981. Tahoe has not claimed, and the evidence does not show, that these contracts were anything but arms-length transactions.
It is obvious from the interplay of the two contracts that whatever price P & G could fetch for Tahoe's gas would enure to Tahoe's benefit if it exceeded $1.25. Following the terms of the P & G/GTC contract, P & G would receive in the final year $1.45 per m.c.f. and Tahoe would receive $1.10. There is no provision regulating a bargain between P & G and GTC after the five years expired, although Tahoe would surely benefit from any higher price obtained thereafter.
Less than a year after these contracts went into effect, Sanders decided to move to Texas and to sell his interests in Ouachita Parish. He sold all his P & G stock to GTC, thus making P & G a wholly-owned subsidiary of GTC. He also assigned all of Diablo's rights in the Grant lease to GTC. Thus at this point GTC owned all the entities that surrounded Tahoe, although the initial sale and re-sale of Tahoe gas were governed by contracts entered into in September 1976. There is no evidence of plan or design on the part of GTC to acquire P & G or any of Sanders's holdings for the purpose of suppressing Tahoe's price.
On the first anniversary, GTC escalated its price by 5¢ according to contract; P & G in turn paid an extra 2½¢ to Tahoe. The subsequent escalations were also honored so that in the final year Tahoe was indeed receiving $1.10 per m.c.f., as originally intended by P & G and GTC.
Meanwhile, the price of natural gas rose beyond all expectation. Price increases were so dramatic that Congress intervened, passing the Natural Gas Policy Act of 1978 ("NGPA"), authorizing maximum prices for natural gas. Pub.L. 95-621, 92 Stat. 3366; see esp. 15 U.S.C. § 3318. Tahoe was placed in the hands of a Trustee, Mr. William Deal, by action of the Securities and Exchange Commission. Mr. Deal was obviously not content to see Tahoe getting barely over a dollar for gas when the NGPA and market prices were over twice that.
In an effort to get a better price for Tahoe's gas, Deal came to Monroe in 1979 *1340 or 1980 to call and meet with Krutzer. Deal came back about a year later, demanding renegotiation. He had received from GTC's general counsel a letter of July 2, 1981, asserting that P & G would not renegotiate its contract with Tahoe. Tahoe Ex. 10. Deal met with Krutzer and insisted that because Krutzer and Brown now owned both companies, P & G was no longer an independent entity and, especially after October 1981, any contract with GTC could be disregarded, with the result that the prices GTC got from its purchasers could be passed directly along to Tahoe. Krutzer maintained that P & G was indeed a distinct legal entity and that he would keep the contract in force. Deal next insisted that Tahoe's wells qualified for maximum prices under NGPA. Subsequent to the July 1981 letter, however, Krutzer and Brown had discussed the subject at length and decided that they could not offer a price increase to Tahoe. They had bought P & G in large measure because of its ability to get cheap gas; a decision to pay more would upset the profitability of the scheme. Deal later met with Brown, who said that although he would have liked to be able to offer more for the gas, he could not justify it. Krutzer testified that in his last meeting with Deal, he told him conclusively that there would be no price increase for Tahoe gas. He advised Deal that Tahoe was free to take its gas elsewhere and discontinue selling to P & G at any time. He advised, however, that if Tahoe elected to continue selling to the P & G system, it would receive no more than the price then in force. Krutzer testified to a certainty that when Deal went away from the last meeting, he understood all this and agreed to it. Brown's testimony corroborated Krutzer's understanding of the agreement reached with Deal. Neither Krutzer nor Brown ever heard from Deal again until the suit was filed.
Brown and Krutzer both testified about the price GTC paid for gas. They admitted that it paid some of its suppliers considerably more for gas, almost the NGPA maximum, but insisted that these prices were based on other factors, such as the quality of the gas, the demand, the quantity purchased and the age and length of the contract. They also admitted paying the original lessors, the Grants, an override in excess of that provided in the lease, but said this was done to settle disputes with Arthur Grant over the number of wells to be drilled and a right-of-way agreement. The trial court noted that their testimony was believable and he accepted it.
For Tahoe's part, Deal did not testify; therefore Tahoe did not advance its own version of the 1981 negotiations. Tahoe argued that the alleged options under the 1981 contract were not viable options at all. The option of selling its gas elsewhere was not viable because P & G owned the only pipeline that serviced the wells, so there was no other immediate vendee; the option of shutting in its wells was unrealistic, given the contractual shut-in penalties; and the option of continuing to sell at $1.10 was unrealistic in light of the NGPA price of nearly $4.00 then in effect. Thus Tahoe claimed that after Deal's meetings with Krutzer and Brown, it had no alternative but to continue selling as before, but that this was not consent to a new agreement. Tahoe next argued that it never receded from its 1976 contract in the first place and was entitled to receive payments based on the contractual formula and GTC's price. Tahoe finally argued that its contract with P & G was invalid for lack of a determinate price or breach of good faith, thus entitling it to a quantum meruit award of the full NGPA price.
The trial court turned away each of these arguments, relying heavily on the credibility of Brown and Krutzer. It held that the pricing provisions under Tahoe's 1976 contract were indeed determinate and that P & G performed its obligations, both with Tahoe and with GTC, in good faith. It also held that Tahoe and P & G terminated their 1976 contract by mutual consent in a meeting in 1981. It finally held that as a result of that meeting, a new agreement was confected whereby P & G would buy any gas that Tahoe chose to sell it for a flat rate of $1.10, Tahoe reserving the right to withdraw and sell elsewhere at any time. The trial court observed in closing that *1341 Tahoe could not now call on the court to relieve it of a bad bargain.
DISCUSSION
We note at the outset that amid these various and sometimes conflicting arguments, the bulk of Tahoe's evidence sought to show the price that GTC was getting for gas in transactions with third parties. This evidence would have tended to show a "fair price" if Tahoe had proven an entitlement to quantum meruit. This evidence was also intended to show bad faith on the part of P & G and GTC; however, Tahoe has disclaimed any allegations of error, fraud or duress which would result in unfair price differentials. For these reasons, the mountain of evidence of what GTC paid third parties for gas is largely irrelevant and we have confined ourselves to the true issues of law and manifest error.
ASSIGNMENTS 1 & 2
By these two assignments Tahoe claims the trial court committed manifest error in its analysis of the 1981 meetings between Deal, Brown and Krutzer. It claims that it had no options after October 1981 and therefore there was no new agreement; it also claims it never consented to terminate the original 1976 contract.
We have closely examined the options conferred by the 1981 agreement. Tahoe's sublease from Diablo imposed a penalty of $100 per well per month for shutting in the wells "to avoid a captive market." We agree that the shut-in provision would have been burdensome but it is more of an incentive to maintain production than an absolute prohibition against shutting in. The same applies to the avoidance of a captive market. GTC relied on Tahoe's gas to fulfill its obligation to ultimate users, including LP & L. Tahoe's production averaged 10,000 to 15,000 m.c.f. per month, thus representing about 10% of GTC's delivery to LP & L. R.p.p. 318, 373, 415. If Tahoe had elected to shut in, then GTC might have missed its quota to its largest customer, or perhaps have been forced to make up the deficit by buying from other producers at considerably higher prices. This might have induced Brown and Krutzer to renegotiate more favorably with Tahoe. Under the facts, this option was viable.
The option of finding other vendees for Tahoe's gas also seems far from impossible. Admittedly, the laying of multiple pipelines can create problems, as in Harris v. Arkansas La. Gas Co., 357 So. 2d 1249 (La.App. 2d Cir.1978), and can be costly; Sanders's system cost approximately $125,000 in 1976. R.p. 349. However, Krutzer testified that Deal could have sold Tahoe's gas to Ashland Oil, Mid-La. Gas, or to IMC, and he did not mention any particular problem with it. R.p. 336. This is significant because Krutzer, now in control of the Grant lease, presumably would have known whether alternate lines at its well sites were available or would have been prohibited. The map, Tahoe Ex. 12, does not mention any restriction. Significantly, Deal himself approached T.A. Grant with an offer to sell gas. This indicates that Deal believed he had the right to sell elsewhere. Under the circumstances, we cannot say this option is untenable.
The third option was the one ultimately exercised, the continuation of sales to P & G at a fixed price of $1.10 per m.c.f. According to Tahoe this was not viable because it not only continued the price then in effect but eliminated the prospect of increases under the 1976 formula. Thus Tahoe's position under the new agreement is worse than under the old and Tahoe never would have accepted it. However, these terms must be viewed in the context of the whole agreement. Tahoe had the continuing option of cutting off its sales to P & G and selling its gas elsewhere for a better price. This option to recede, or "economic out," is consideration sufficient to justify accepting a low, locked-in price. With this proviso, the third option was completely viable. Thus we cannot accept Tahoe's argument that the options were unrealistic or impossible.
The evidence supports the finding that Deal accepted Brown and Krutzer's new offer in 1981. As we noted earlier, Krutzer clearly advised Deal that he could make other arrangements to sell Tahoe's *1342 gas but that any further sales to P & G would be at a flat rate of $1.10 per m.c.f. He testified that Deal understood and agreed. R.p. 408. Brown corroborated this. R.p. 417.
Tahoe's conduct after October 1981 provides even more evidence that Brown and Krutzer's offer was accepted. Tahoe continuously sold its gas to P & G and accepted the payments based on $1.10 per m.c.f. each month. An offeree may accept by performance, LSA-C.C. 1939; St. Romain v. Midas Exploration Inc., 430 So. 2d 1354 (La.App. 3d Cir.1983). This is so even when the new agreement is a variation or modification of a previous agreement. Bank of La. in New Orleans v. Campbell, 329 So. 2d 235 (La.App. 4th Cir.1976), writ denied 332 So. 2d 866 (La.1976). The trial court appropriately observed that Tahoe received the benefits of the new agreement for three years; the finding that this amounted to acceptance is not manifestly erroneous and we affirm it.
Tahoe next claims that it did not terminate the 1976 contract in the course of the 1981 discussions. The 1976 contract was to remain in effect for the duration of the Grant lease. Tahoe also cites the letter of July 2, 1981 as evidence that GTC had no intention of terminating, renegotiating or amending P & G's contract with Tahoe.[1] Tahoe finally contends that Brown and Krutzer's testimony concerning the 1981 meetings was self-serving, distant from the events, and contradictory to the clear impact of the letter.
While this argument has a certain appeal, it overlooks the sequence of events that the trial court accepted and the evidence supports. The most serious negotiations took place after the July 2, 1981 letter, which in effect "set the stage" for the talks. R.p. 341. Brown and Krutzer were the true parties in interest and obviously had the authority to restate P & G's position and bind the company by their negotiations. The trial court concluded that the final resolution was embodied in the discussions between Deal, Krutzer and Brown, and not in the preliminary letter. The evidence clearly shows that Deal was at loggerheads with Brown and Krutzer after their unsuccessful and unamicable meetings. Brown and Krutzer testified that by the summer of 1981, they were quite willing to let Tahoe out of its obligation. R.p. 417. This is more than sufficient to show P & G's consent to the termination as required by LSA-C.C. art. 1983.
As for Deal's consent to terminate, Deal's silence of almost two years and his inaction after the meeting, together with the special circumstances of the case corroborate that he understood and agreed to terminate. LSA-C.C. art. 1942; RTL Corp. v. Mfrs.' Enterprises Inc., 429 So. 2d 855 (La.1983), and citations therein; Allan v. Arnold, 673 F.2d 767 (5th Cir.1982). Here the special circumstances included the impasse the parties had reached in attempting to renegotiate the 1976 contract, and the subsequent adoption of a new agreement. Deal himself was dissatisfied with the contract because he felt it was paying Tahoe inadequately for gas. R.p. 333. Given the stalemate and the determination of both sides, Deal's prolonged silence after his meeting with Krutzer corroborates his consent both to terminate and enter into a new arrangement.
Looming over both these assignments is the conspicuous absence of any testimony from Mr. Deal, who negotiated for Tahoe. His version of events, if they corroborated the content of the letter and differed with Krutzer and Brown, would have weighed in Tahoe's favor and perhaps *1343 would have affected the outcome of the case. Even though Mr. Deal was reported to be unable to testify because of illness, Tahoe had ample time to depose him between April 1983, when the suit was filed, and April 1986, when the trial took place. LSA-C.C.P. art. 1437. There was also the possibility of interrogatories addressed to him, LSA-C.C.P. 1421, and of a motion for continuance before trial, LSA-C.C.P. art. 1601. A request could even have been made at the end of the trial to leave the record open for his testimony. However, without any more satisfactory explanation for Mr. Deal's absence, we may presume that his testimony would have been adverse to Tahoe, i.e., it would have corroborated Krutzer and Brown. See RTL Corp. v. Mfrs.' Enterprises Inc., 444 So. 2d 144 (La.App. 1st Cir.1983); Tillman v. Canal Ins. Co., 305 So. 2d 602 (La.App. 1st Cir. 1974), writ denied 307 So. 2d 630 (La.1975). On the record as it stands, there is not enough evidence to sustain an argument of manifest error. These assignments are without merit.
ASSIGNMENT 3
By this assignment Tahoe argues the trial court should have awarded a fair and equitable price for the gas sold under the 1976 contract, both before and after the expiration of the P & G/GTC contract. This is based on the contention that the contracts failed for lack of a determinate price or for breach of the duty of goodfaith performance.
If a contract fails for lack of a determinate price, and the seller nevertheless performs, then he is entitled to receive a fair and equitable price under the theory of quantum meruit. Benglis Sash & Door v. Leonards, 387 So. 2d 1171 (La.1980); B & B Cut Stone v. Resneck, 465 So. 2d 851 (La.App. 2d Cir.1985); cf. U.C.C. § 2-305. The issue of determinate price breaks down into two time frames and is easily resolved in both. As for the time after October 1981, the trial court found that there was a new contract under which P & G offered to buy Tahoe's gas for a flat rate of $1.10 per m.c.f., and that Tahoe accepted this by its acquiescence and performance. LSA-C.C. art. 1939; Stupp Corp. v. Con-Plex, Div. of U.S. Indus., 344 So. 2d 394 (La.App. 1st Cir.1977). This portion of the judgment has withstood the attack of manifest error and the agreement clearly provides for a determinate price. LSA-C.C. arts. 2439, 2464.
Tahoe next contends that under the 1976 contract, the price after 1977 is not determinate. Tahoe claims that the formula of $1.00 plus one-half of any price that P & G receives on re-sale is not concrete enough to satisfy the need for a determinate price. This is not correct. The jurisprudence clearly establishes that a price, though not determined at the moment of sale, is valid if it is objectively determinable. See, e.g., Louis Werner Sawmill Co. v. O'Shee, 111 La. 817, 35 So. 919 (1904), 2 Planiol, Traite' Elementaire de droit civil no. 1378 (11th ed. 1937). Courts have held that a price may be determinable by reference to external factors such as the market price. Landeche Bros. Co. v. N.O. Coffee Co., 173 La. 701, 138 So. 513 (1931); Baucum & Kimball v. Garrett Mercantile Co., 188 La. 728, 178 So. 256 (1937). We think the price here is determinate until October 1981 by reference to P & G's contract with GTC. This contract provided for a price of $1.25 with annual increases of 5¢, thus translating into a price for Tahoe of $1.00 with annual increases of 2½¢. Furthermore, Tahoe had the right to "examine the books, records, and charts of the other party * * * to verify the accuracy of any statement, payment calculation or determination[.]" Tahoe Ex. 3 B, p. 11-A. This gave Tahoe the right to determine P & G's resale price and to apply the formula. These arguments lack merit.
Tahoe next argues its contracts with P & G should fail because Brown and Krutzer did not perform in good faith. The first act of alleged bad faith came when GTC acquired P & G. Tahoe contends that Brown and Krutzer should have let Tahoe deal directly with GTC and calculate its price based on what GTC got on resale. Tahoe does not support this argument with any legal theory except an appeal to equity; *1344 it specifically denies fraud, error, misrepresentation or lack of arms-length dealing. When Tahoe entered the agreement in 1976, it surely understood that it was not selling to an ultimate user but to a middleman who gathered gas to sell to users at a profit; it obviously was satisfied with the price. When GTC acquired P & G, they did not merge but each retained its distinct corporate status. GTC could not be compelled to deal directly with P & G's seller. The suggestion of bad faith loses more force when we remember that P & G's sales to GTC were regulated by a contract that was entered before the latter acquired the former; this contract was never broken.
Tahoe's argument is somewhat stronger as it approaches the October 1981 time frame. By that time, P & G's contract with GTC was about to end and, with it, the low price of $1.45 per m.c.f. If P & G had been pursuing only its own interests, then it would have eagerly sought the highest possible price for its gas, even if it meant sharing part of its profit with Tahoe. This is surely what Tahoe expected from the price escalation clause: the active pursuit of a higher price, to benefit both P & G and Tahoe. However, once GTC acquired P & G, P & G's owners could be content to make their money from GTC's sales. P & G had no incentive to seek a better price from GTC, and the owners could easily decide to keep the price low between P & G and GTC. This would benefit Brown and Krutzer while completely leaving Tahoe out of the picture. We repeat that Tahoe's petition does not allege fraud, error or misrepresentation.
At oral argument, Tahoe's counsel characterized the 1976 contract as a "gas brokerage agreement." While this characterization is not correct, we mention it because it describes a contractual relationship in which the parties are held to a higher standard than a mere good faith duty of performance. In a brokerage contract, the broker or mandatary owes his principal or mandator a fiduciary duty not to profit at his expense. LSA-C.C. arts. 3004, 3005, 3011. In the typical brokerage situation, the broker is responsible for finding a purchaser for the principal's goods. If the broker enters into a secret deal with a third party to sell at a low price, and then splits the profit the third party receives on re-sale, then the broker is liable to his principal for the hidden profit. See Uhlich v. Medallion Realty, 334 So. 2d 788 (La. App. 4th Cir.1976), writ denied 338 So. 2d 701 (La.1976).[2]
We have questioned whether the instant contract was an agency or a genuine sale. The contract itself is styled a "Gas Purchase Contract" and the parties are referred to constantly as "Seller" and "Buyer." Article IV, Sec. 1 provides that title will pass at the point of transition from PVC pipe to steel pipe at the upstream riser to the master measuring station. This section further provides that until delivery, the seller is deemed in possession and control of the gas, and holds it at his own risk. After title passes, the possession, control and risk are the buyer's. Possession and risk are classic indicia of ownership, and the transfer so particularly detailed is indicative of a sale. See 2 Litvinoff, Obligations § 149 (1975). Article V refers to the amount paid as a "price," not as a commission. There is no provision for returning the gas if P & G was unable to sell it. These further indicate an intent to enter a contract of sale and not of brokerage. This corresponds to the designation of the contract as a "Gas Purchase Contract." There is no grounds to support a claim that the contract was an agency.
Besides agency, there are other legal relationships that impose fiduciary duties on parties. A director or officer of a corporation owes a fiduciary duty to his corporation. LSA-R.S. 12:91. Unless special disclosure is made, a director or officer may not acquire an interest adverse to his corporation. LSA-R.S. 12:84; note, La.L. Rev. 320 (1975). Similarly, a partner owes *1345 a fiduciary duty to the partnership and his partners. LSA-C.C. art. 2809. This line of analysis shows the degree of duty necessary to hold P & G to the duty of seeking the most favorable price or of sharing its "secret" profits with Tahoe. If a corporate officer of Tahoe had acquired controlling interest in GTC and used the Tahoe to P & G to GTC sales structure to suppress Tahoe's profit, then Tahoe could claim breach of fiduciary duty. However, P & G was bought by GTC, which had no prior contractual ties with Tahoe, and certainly did not owe it any fiduciary duty.
Likewise, P & G's relationship with Tahoe was merely contractual. P & G was therefore bound to good faith performance, LSA-C.C. art. 1759, and not a fiduciary duty. P & G performed according to contract until October 1981. Around that time, Tahoe began to clamor for changes in the terms of sale. Because the parties were unable to renegotiate the old contract, they terminated it and entered into a new one. The trial court found that P & G's actions, taken through Brown and Krutzer, were arms length and reasonable within the industry. His implicit holding that there was no breach of good faith is not manifestly erroneous.
Tahoe finally contends that the principles of equity should operate to release it from a situation that has turned out to be very unfavorable. The law is quite clear, however, that equity cannot take the place of contracts legally entered; courts have no authority to relieve a litigant of a bad bargain, Hinterlang v. Usner, 215 La. 626, 41 So. 2d 455 (1949); Ardoin v. Central La. Elec. Co., 318 So. 2d 5 (La.1975); Chemical Cleaning Inc. v. Brindell-Bruno Inc., 214 So. 2d 215 (La. App. 4th Cir.1968). In September 1976, all the corporate entities were in place and their alignment in the sequence of sales was established. Tahoe signed a contract locking it to what the parties considered a fair price; no one expected the unprecedented rise of gas prices. Tahoe cannot expect the courts to rescind its legally binding contract just because its business judgment was poor. Nor can it demand a change in performance just because its vendee underwent a change in ownership. In October 1981, Tahoe entered a new agreement at an admittedly low price, but retained a valuable concession of being able to withdraw at any time. The arguments advanced in this assignment do not warrant reversal.
Accordingly, the judgment is affirmed at appellants' costs.
AFFIRMED.
NOTES
[1] This letter provided in part:
Accordingly, it is our [GTC's] firm and final position that Tahoe Corporation is being paid exactly what it should be paid under the terms and conditions of the contract mentioned above. As you can see from the term of the gas purchase agreement between P & G and [GTC], a new contract must be negotiated prior to October 1, 1981 and at that time the price should increase to the NGPA price. We have explained our position to Mr. Davis on several occasions and that we have felt that we are under no duty to re-negotiate the contract between P & G and Tahoe and still do not feel that it is our duty to do so. You obviously feel difference [sic] and therefore it is certainly your prerogative to seek whatever course of action you desire.
[2] In Uhlich, the broker acted on behalf of a buyer instead of a seller, but the concept is the same. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1759673/ | 820 F. Supp. 298 (1993)
Tony R. AYOUB, Plaintiff,
v.
Brian BAGGETT, et al., Defendants.
Civ. A. No. H-92-3455.
United States District Court, S.D. Texas.
April 23, 1993.
Mark A. Ticer, Dallas, TX, for plaintiff.
Stephen Pate, Houston, TX, for defendants.
MEMORANDUM
HUGHES, District Judge.
1. Introduction.
An individual may not sue an employee of an insurance company for the unfair trade *299 practices of that company even if the acts were performed for the company by the employee. The joinder of the employee to defeat diversity is a fraud.
2. The Claim.
Ayoub lost his restaurant when it burned. According to Ayoub, Truck Insurance Company delayed in paying the proceeds of its insurance policy with Ayoub. Specifically, Ayoub says that Brian Baggett, an employee of Truck Insurance, stalled in his investigating and adjusting the claim, violating state insurance laws and causing Ayoub to lose employees and profits. See Tex.Ins.Code Ann. art. 21.21 (1981 & Supp.1993). Ostensibly because of Baggett's conduct, Ayoub sued both the company and the employee.
3. The Diversity Issue.
There is no dispute over the citizenship of the parties. Ayoub is a citizen of Texas. Truck Insurance is a California corporation with its principal place of business in California. Baggett is a citizen of Texas. Complete diversity does not exist, and remand is compelled unless Baggett was included as a party defendant without a plausible legal basis.
Baggett was improperly joined if Ayoub has no possibility of establishing a valid cause of action against him. Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir.1989). In this case, a single question decides the issue: Does Texas law allow a cause of action against an employee of an insurance company as well as the insurance company itself for abusive trade practices?
4. The Insurance Code.
Texas law allows an individual who has been damaged by abusive trade practices to bring an action against the "person or persons engaging in such acts or practices." Tex.Ins.Code Ann. art. 21.21, § 16 (Supp. 1993). A person is defined as:
any individual, corporation, association, reciprocal exchange, inter-insurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including agents, brokers, adjusters, and life insurance counselors. Tex.Ins.Code Ann. art. 21.21, § 2(a) (Supp. 1993).
Ayoub asserts that he clearly can bring a suit directly against Baggett because the term "adjuster" is specifically listed in the statute in addition to insurers, and because Baggett works as a claims adjuster for the insurance company.
Whether an individual can bring a suit under the statute against an employee of an insurance business has not been directly decided by Texas courts. This is not a case where a separate company that has been retained by the insurance company to perform adjusting duties has been sued. See Wm. H. McGee & Co. v. J.H. Schick, 792 S.W.2d 513 (Tex.Ct.App.-Eastland 1990, writ. dism'd by agr. 1992). This is not a case where an employee-adjuster has been sued for an independent common-law tort. See Natividad v. Alexsis, Inc., 833 S.W.2d 545 (Tex.Ct.App.-El Paso 1992) (negligent infliction of emotional distress).
This is a case where a full-time employee of an insurance business happens to be the medium of its unfair trade practices in his role as an adjuster. Under Ayoub's theory, an individual employee of a traditional insurance company could act as a "broker, adjuster, or counselor" and be liable, while an identical employee who acted only as an issuer, investigator, or accountant in the same transaction could not be held liable, because of the particular words in the statute.
The purpose of the unfair practices provisions of the Insurance Code is to "regulate trade practices in the business of insurance." Tex.Ins.Code Ann. art. 21.21, § 1(a) (Supp. 1993). Its focus and its reach go to the business entities that provide insurance, not the employees of those providers. To hold otherwise would be to conclude that Texas intended to put every individual employee of an insurance provider at risk of liability for the trade practices of the employer. Nothing in the statute regulating the businesses in the insurance field suggests that private claims against individual employees are part of the Texas scheme.
*300 In fact, given the relative financial positions of most companies versus their employees, the only time an employee is going to be sued is when it serves a tactical legal purpose, like defeating diversity. Ayoub has no other plausible reason for bringing Baggett into this case.
5. Conclusion.
The Insurance Code cannot be construed to allow a suit against an employee of an insurance company. Since the case against Baggett cannot be maintained, his joinder is fraudulent, and the case will remain in federal court. Because the operative facts of this case were in the Dallas metropolitan area, as well as likely witnesses, the case will be transferred to the Northern District of Texas. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1802251/ | 618 So. 2d 1252 (1993)
Helen WOMBLE, By and Through Her Father, David Havard and on Behalf of the Heirs of Helen Womble
v.
SINGING RIVER Hospital, Dr. Atkinson Winans Longmire, Dr. James Spurgeon Weatherall, Emergency Room Group, Ltd., Singing River Hospital System Board of Trustees and its Members.
Helen WoMBLE, By and Through Her Father, David HAVARD and on Behalf of the Heirs of Helen Womble
v.
Dr. Wallace E. CALHOUN.
Nos. 90-CA-40, 90-CA-934.
Supreme Court of Mississippi.
March 25, 1993.
Rehearing Denied June 10, 1993.
Specially Concurring Opinion on Denial of Rehearing June 10, 1993.
*1254 Margaret P. Ellis, Kitchens & Ellis, Pascagoula, for appellant Womble.
James H. Heidelberg, Colingo Williams Heidelberg Steinberger & McElhaney, James W. Backstrom, John A. Banahan, Bryan Nelson Allen Schroeder & Backstrom, Pascagoula, for appellees Singing River Hosp. et al.
Robert C. Galloway, Galloway & Galloway, Gulfport, for appellee Calhoun.
En Banc.
Specially Concurring Opinion by Presiding Justice Dan M. Lee on Denial of Rehearing June 10, 1993.
BANKS, Justice, for the Court:
This is a consolidated appeal from two wrongful death actions arising out of the death of Helen Womble at the Singing River Hospital in Pascagoula on April 11, 1986. A single action was originally brought by the heirs of Helen Womble in the Jackson County Circuit Court. It named as defendants Singing River Hospital, the Singing River Hospital Board of Trustees, Dr. Clyde Gunn, and Singing River Hospital Emergency Room Physicians and Nurses (John Does 1-5). Subsequently, plaintiffs amended their pleadings to join the members of the Board of Trustees in their official capacities. They were also allowed to substitute Dr. Spurgeon Weatherall, Dr. Atkinson Winans Longmire, Emergency Room Group, Ltd., and Dr. Wallace Calhoun in place of the John Doe Defendants. In the interest of fairness, the trial judge believed it was necessary to bifurcate the proceedings and set a second, postponed trial date for the defendant last added to this action Dr. Wallace Calhoun.
Eventually summary judgments were entered on varying grounds for all of the defendants brought into this matter, except Dr. Clyde Gunn. Singing River Hospital and its collective board of trustees were awarded summary judgments on the *1255 ground that they were shielded from suit by governmental immunity. The individual members of the board of trustees were granted summary judgment on the ground of qualified immunity. Dr. Longmire, Dr. Weatherall, and Emergency Room Group, Ltd. were granted summary judgments each on the alternative grounds of time bar and qualified immunity. Dr. Calhoun received a summary judgment based on time bar. He also received a 12(b)(6) dismissal for failure of the plaintiffs to state a claim against him. Ms. Womble's heirs have appealed to this court contesting each entry of summary judgment made by the trial judge and the 12(b)(6) dismissal granted to Dr. Calhoun.
Upon review, we affirm the entries of summary judgment in favor of Singing River Hospital, the Singing River Hospital Board of Trustees, the members of the Singing River Hospital Board of Trustees, and Dr. Calhoun. We find that statutory governmental immunity protects Singing River Hospital, its collective board of trustees, and the members of the board of trustees. The claim against Dr. Calhoun is barred by the running of the statutory period of limitations. We therefore need not address the propriety of the Rule 12(b)(6) dismissal entered in his favor. We reverse the summary judgments entered for Dr. Longmire, Dr. Weatherall, and Emergency Room Group, Ltd. and remand the actions against them to the Jackson County Circuit Court for further proceedings consistent with this decision. We do not find them shielded from liability by qualified immunity, and we do not find the actions against them time barred.
Facts
On March 29, 1986, Helen Womble went to the emergency room at Singing River Hospital, complaining of pain in her abdomen. She was examined by a physician in the emergency room, given medication, and discharged. Later discovery would show that the attending physician on that night was Dr. Spurgeon Weatherall. Ms. Womble presented herself again at the Singing River emergency room on the next night, March 30, 1986, with the same basic complaints. She was examined by another physician and was again sent home. Subsequent discovery would show that doctor was Dr. Atkinson Winans Longmire. Ms. Womble returned to Singing River Hospital the following morning, March 31, 1986. This time she was examined at approximately 9:00 a.m. by her personal physician, Dr. Wallace Calhoun, who had been called in. Dr. Calhoun had Ms. Womble admitted into the hospital, prescribed medication for her, and ordered various laboratory tests to be run on her. The tests included an X-ray, which was not read by Dr. Calhoun until much later that evening. Dr. Calhoun ordered a change of pain medication for the patient that afternoon. He examined Ms. Womble again that evening around 8:30 p.m., and he immediately called in Dr. Clyde Gunn, a surgeon, to examine the patient. It was determined that Ms. Womble had gone into shock. She was thereafter immediately rushed into surgery, where Dr. Gunn found her to be suffering from gangrene of the small intestines. Dr. Gunn proceeded to remove approximately six feet of Ms. Womble's small intestine.
Ms. Womble was thereafter placed in the intensive care unit. Her condition showed increasing signs of improvement until April 6, 1986. Her condition deteriorated steadily from that point onward. Ultimately, emergency procedures were necessitated for her on April 11, 1986. They were performed by another physician covering for Dr. Gunn, who was out of town. Ms. Womble died near 10:30 that night.
On March 28, 1988, the plaintiffs/appellants, the heirs of Helen Womble, by and through her father, David Havard, filed a wrongful death action against Singing River Hospital (hereinafter "SRH"), the SRH Board of Trustees, Dr. Clyde Gunn, and SRH Emergency Room Physicians and Nurses (John Does 1-5). Appellants alleged these John Doe Defendants to be unknown at that time. Appellants alleged that all defendants had committed various acts of negligence which had led to Ms. Womble's death. They also alleged that the hospital was liable for breach of a contract for treatment that it had with the *1256 decedent and for breach of warranty. On August 1, 1988, the plaintiffs filed a motion to amend their complaint to add as defendants certain Emergency Room Physicians that the plaintiffs had become aware of by name and the individual members of the SRH board of trustees in their official capacities.
On September 2, 1988, the trial judge entered an order staying the proceedings in this action due to other proceedings in the bankruptcy court regarding Dr. Charles Stroble, one of the members of the SRH Board of Trustees. On December 1, 1988, that stay was lifted, after a finding by the bankruptcy court that Dr. Stroble was not a proper party to the instant action. It was found that Dr. Stroble was not a member of the SRH Board of Trustees at the time of Helen Womble's alleged injuries.
On December 3, 1988, plaintiffs filed an amended complaint bringing in Dr. Atkinson Winans Longmire, Dr. Spurgeon Weatherall, Emergency Room Group, Ltd. and the members of the board of trustees in their official capacities. Emergency Room Group, Ltd. is a corporation comprised of all the emergency room physicians at SRH, including Doctors Longmire and Weatherall. Emergency Room Group, Ltd. had been contracted with by SRH to provide emergency room physician care at the hospital. In September 1989 plaintiffs moved to amend their complaint to join Dr. Wallace Calhoun into this suit. They were aware that Dr. Calhoun had seen Helen Womble on March 31, 1986, but they claimed that they had had no reason to suspect any negligence on Doctor Calhoun's part until Dr. Gunn indicated in his deposition in June 1986 that Ms. Womble may have stood a higher chance of survival had some method been used to diagnose her illness and bring in a surgeon earlier. Appellants were allowed to add Dr. Calhoun on November 7, 1989, as one of the John Doe Defendants.
Ultimately, the Jackson County Circuit Court granted summary judgment to SRH and its collective board of trustees on the ground of governmental immunity. The members of the SRH Board, who were sued in their official capacities, were each granted summary judgment based on qualified immunity. Dr. Longmire, Dr. Weatherall, and Emergency Room Group, Ltd. were each granted summary judgment based on the alternative grounds that they had qualified immunity and that the applicable two-year statute of limitations had run before they were joined into this suit. Dr. Calhoun was granted summary judgment based on the statute of limitations. In the alternative, he was granted a 12(b)(6) motion for the plaintiffs' failure to state a claim against him. It is from the entry of those summary judgments and the 12(b)(6) dismissal in favor of Dr. Calhoun that Ms. Womble's heirs now appeal to this court.
I. Governmental Immunity
Appellants, the heirs of Helen Womble, first contend that the trial court erred in granting summary judgment to the hospital and board of trustees on the basis of governmental immunity. More precisely, the appellants submit that genuine issues of material fact exist regarding whether the hospital and its board of trustees had waived their immunity under Mississippi Code Ann. § 41-13-11 (1972), and that consequently summary judgment was inappropriately entered by the circuit court in favor of these defendants. Singing River Hospital and its board of trustees counter that no factual circumstances exist that could reasonably be determined to constitute a waiver. For this reason, they contend that the circuit court properly entered a summary judgment in their favor on the ground of governmental immunity.
It is a well-established principle under Mississippi law that summary judgments, in whole or in part, should be granted with great caution. Brown v. Credit Center, Inc., 444 So. 2d 358, 362 (Miss. 1983). The trial judge must carefully review all pleadings, depositions, answers to interrogatories and admissions on file. Id. All evidentiary matters must be considered in the light most favorable to the party against whom judgment is sought. Id. Summary judgment may only be entered where, based on such a review, it is clear *1257 that the movant has met his burden of demonstrating that no genuine issue as to any material fact exists and that the movant is entitled to judgment as a matter of law. Id. Thus, in order for the trial court's grant of summary judgment to SRH and its board of trustees to withstand review from this court, it must be patently clear that § 41-13-11 immunizes SRH and its board of trustees from suit without any genuine issue.
Section 41-13-11(1) of the Code provides: Except to the extent provided in subsection (2) of this section... each owner or board of trustees ... shall not be liable for and shall be immune from suit at law or in equity on account of any wrongful or tortious act or omission by any such governmental entity or its employees relating to or in connection with any activity or operation of any such community hospital, notwithstanding that any such act or omission constitutes or may be considered as the exercise or failure to exercise any duty, obligation or function of a governmental, proprietary, discretionary or ministerial nature and notwithstanding that such act or omission may or may not arise out of any activity, transaction or service for which any fee, charge, cost or other consideration was received or expected to be received in exchange therefor.
Miss. Code Ann. § 41-13-11 (Supp. 1991). Appellants argue that there are five separate ways in which SRH and its board of trustees waived this immunity. If it is found that any one of these claims of waiver raises a genuine issue, we are compelled to rule that the entries of summary judgment for SRH and its Board was improper.
A. Contract for Treatment
Appellants' first claim is that SRH entered into a contract for treatment with Helen Womble and thereby waived its immunity from suit for breach of that contract. For support, appellants point to Miss. State Dept. of Public Welfare v. Howie, 449 So. 2d 772 (Miss. 1984). In Howie, the Court held that "when the legislature authorizes the state's entry into a contract, the state necessarily waives its immunity from suit for breach of that contract." 449 So.2d at 777. Appellants also direct the Court's attention to Cig Contractors v. Mississippi State Building Commission, 399 So. 2d 1352 (Miss. 1981), where Justice Walker, writing for the Court, expressed that he "doubt[ed] seriously that this court would uphold a claim of sovereign immunity in contractual matters between a subdivision of the State and individuals doing business with it." Cig at 1355. He stated in addition that:
Where the state has lawfully entered into a business contract with an individual, the obligations and duties of the contract should be mutually binding and reciprocal. There is no mutuality or fairness where a state or county can enter into an advantageous contract and accept its benefits but refuse to perform its obligations.
Id.
Howie presented a scenario where the Mississippi State Department of Public Welfare was found to be a holdover tenant on a landlord's property. The landlord sued for specific performance of an implied lease renewal and rent in arrears based on the renewal. The Department of Public Welfare had been authorized by the Legislature's Capitol Commission to enter into a lease agreement on the property. The State attempted to invoke the doctrine of sovereign immunity to shield itself.
In Cig, Cig Contractors, Inc. and the Mississippi State Building Commission entered into a contract on February 17, 1975, calling for Cig to construct a portion of a chemistry building at the University of Mississippi. 399 So.2d at 1353. Cig was responsible for the concrete, masonry, and general contracting work on the project. The contract specified that "Owner will provide soils testing and inspection service for quality control testing during earthwork operations." Id. at 1354. The suit claimed that the Building Commission had breached its duty to test and inspect the soil and that such breach required Cig to remove and reconstruct portions of work they had already completed. Cig sued the Building Commission for the incremental *1258 cost of the work that had to be reperformed. The lower court granted summary judgment to the Building Commission on the basis of sovereign immunity. This Court reversed and remanded, holding that the Building Commission could be held liable for its breaches of contract. Id. at 1355.
This Court has ruled unequivocally in the past that suits grounded in tort are barred from prosecution against the State and its agencies by the doctrine of sovereign immunity. Employers Insurance of Wausau v. Mississippi State Highway Commission, 575 So. 2d 999, 1002 (Miss. 1990); and Strait v. Pat Harrison Waterway District, 523 So. 2d 36, 40 (Miss. 1988). In Strait v. Pat Harrison Waterway District, 523 So. 2d 36, 41 (Miss. 1988), the appellant sued the waterway district to recover for injuries she sustained while patronizing a waterslide amusement park operated by the district. 523 So.2d at 36-37. At trial, the appellant proceeded solely on a negligence theory. Id. at 41. On appeal, the appellant attempted to argue that the Pat Harrison Waterway District entered into a business relationship, contractual in nature with the appellant, and that by accepting the benefits of that relationship, the District incurred binding contractual duties. The Court refused to hear the claim, because it had not been raised in the lower court. Id.
In Employers Insurance of Wausau v. Mississippi State Highway Commission, 575 So. 2d 999 (Miss. 1990), the Mississippi State Highway Commission contracted with Cook Construction to resurface a portion of a highway in Mississippi. Cook was insured by Employers Insurance of Wausau. The contract required Cook to apply a pavement mixture designed and manufactured in accordance with plans and specifications provided by the Commission. Cook followed the plans and specifications of the Commission in manufacturing the pavement mixture, but the mixture was defective, resulting in an unreasonably slick highway. Due to this condition, three different automobiles on three different occasions had accidents causing severe injuries to three individuals. Each of these three individuals either filed suit against Cook, or made demand on Cook for personal injury damages. Cook's liability insurance carriers, which included Employers Insurance of Wausau, reached compromise settlements with these individuals, and were assigned their respective claims against the Commission. Wausau and the other carrier brought suit against the Mississippi State Highway Commission, alleging among other things that the Commission had breached an implied contractual warranty that plans and specifications provided by the Commission to Cook for resurfacing the highway would provide a reasonably safe highway. The Court held that Wausau, as assignee of the rights of the three injured individuals, could not maintain a suit on the contract between the Commission and Cook. 575 So. 2d 1001. The only recourse the injured persons had against the Commission were actions which sounded in tort. Id. Wausua could only stand in the same shoes as those whose claims it asserted. Id. Therefore, the Court ruled that Warsau's actions were barred by the doctrine of sovereign immunity. Id.
The claim of the appellants here is essentially that the hospital failed to exercise due care in performing its contractual duty to provide treatment for the decedent Helen Womble. It possesses both tort and contractual characteristics. The facts of this case are such, however, that it does not become necessary to address on whether the claim asserted here by appellants is more analogous to those asserted in Howie and Cig or those asserted in Employers Insurance of Wausau and Strait. In this case, § 41-13-11 of the Mississippi Code contains a mandate expressly stipulating that:
Except to the extent provided in subsection (2) of this section ... each owner or board of trustees .. . shall not be liable for and shall be immune from suit at law or in equity on account of any wrongful or tortious act or omission by any such governmental entity or its employees relating to or in connection with any activity or operation of any such community hospital, notwithstanding that *1259 any such act or omission constitutes or may be considered as the exercise or failure to exercise any duty, obligation or function of a governmental, proprietary, discretionary or ministerial nature and notwithstanding that such act or omission may or may not arise out of any activity, transaction or service for which any fee, charge, cost or other consideration was received or expected to be received in exchange therefor. (emphasis supplied)
Miss.Code § 41-13-11 (1972). Section 41-13-11 clearly seeks to exempt county hospitals from liability for actions which may fail to meet a prescribed duty. The statutory language "notwithstanding that such act or omission may or may not arise out of any activity, transaction or service for which any fee, charge, cost, or other consideration was received or expected to be received in exchange therefor" also evinces a clear intent on the part of the legislature to apply the immunity to duties which arise by way of contract. There were no analogous statutes expressly protecting the State Department of Public Welfare in Howie or the State Building Commission in Cig. We find that distinction to be critical. Therefore, we hold today that where the Legislature has manifested a clear intent to immunize the agencies of the State from suits which arise out of the alleged failures by the agency to fulfill duties implicit in a contractual relationship, that policy will be applied by this Court to bar suits in contract as well as in tort.
B. Requirement that doctors carry liability insurance
Appellants direct their second contention of waiver at SRH's requirement that all emergency room physicians maintain liability insurance covering their professional services at the hospital as a condition of employment. Section 41-13-11(2) grants the board of trustees of any community hospital the authorization to obtain any kind and amount of liability insurance as the board deems appropriate for the operation of the hospital and to pay for such insurance out of the operating funds of the hospital. Miss. Code Ann. § 41-13-11(2) (Supp. 1991). Another provision of § 41-13-11 specifies that:
If liability insurance is in effect ... suit may be maintained by anyone affected to the extent of such insurance available to satisfy any judgment rendered, [and] immunity from suit is waived to the extent of such liability insurance available to satisfy any judgment rendered ...
Miss. Code Ann. § 41-13-11 (Supp. 1991). From this, appellants contend that by requiring their emergency room physicians to carry liability insurance, SRH waived its own immunity from suit to the extent of the malpractice coverage carried by the emergency room physicians. They rely primarily on a line of cases which have imposed vicarious liability on hospitals for the negligent acts of their employees. Their argument is essentially that if hospitals covered by § 41-13-11 carried their own liability insurance, they could be held vicariously liable for the negligent acts of their employees, and that these hospitals should not be able to avoid such vicarious liability simply by requiring physicians to carry their own malpractice insurance.
Appellants cite no authority supporting such an extension of the doctrine of vicarious liability, and we can find no reason for doing so here. Section 41-13-11 represents the public policy of this State, as spoken through the Legislature, that community hospitals will only be deemed to have waived the tort immunity that has been bestowed upon them where they have purchased their own liability insurance and that such waiver shall only extend up to the amount of such coverage purchased. The statute is clear on this point. Therefore, we reject this contention that SRH's requirement that its doctors purchase malpractice insurance constitutes a waiver of SRH's tort immunity.
C. Indemnification Policy
The SRH Board of Trustees had adopted a resolution that it would indemnify employees occupying certain job positions for expenses incurred in defending suits or paying judgments incurred in suits for negligence arising out of their employment up to $100,000 per person and $1,000,000 per *1260 accident. Appellants contend that by adopting this resolution, the Board waived the hospital's immunity up to the extent of the indemnification limits.
Section 41-13-11(2) contains the provision that:
The Board of Trustees may ... indemnify, either by the purchase of insurance or directly, where funds are available, in whole or in part, any trustee, officer, agent, volunteer or employee of a community hospital for actual personal expenses incurred in the defense of any suit, or judgments resulting from said suit ... for alleged negligent or wrongful conduct committed while under the employment of or while providing service to said community hospital.
Miss. Code Ann. § 41-13-11(2) (Supp. 1991). The statute goes on to declare:
No authority granted by this subsection and no act of the board of trustees of any community hospital or of any agent, representative or employee thereof shall be construed as a waiver of the immunity of such hospital or its board of trustees from suit for negligent, tortuous or unauthorized acts of the said board of trustees, members of said board of trustees, agents, servants or employees or volunteers or community hospital, and such immunity as presently exists is specifically retained and recognized. If liability insurance is in effect, however, suit may be maintained by anyone affected to the extent of such insurance available to satisfy any judgment rendered. However, immunity from suit is only waived to the extent of such liability insurance available to satisfy any judgment rendered, and a judgment creditor shall have recourse only to the proceeds or right to proceeds of such liability insurance.
Miss. Code Ann. § 41-13-11(2) (Supp. 1991).
Appellants recognize our precedents to the effect that a waiver of sovereign immunity can be implied only where the statute is clear and unambiguous as it relates to sovereign immunity. See French v. Pearl River Valley Water Supply District, 394 So. 2d 1385 (Miss. 1981); Lowndes County v. Miss. State Highway Commission, 220 So. 2d 349 (Miss. 1969). They somehow make the contention, however, that the Legislature clearly intended that a limited waiver apply to § 41-13-11, and that it would be illogical to conclude that the Legislature intended that immunity would be waived to the extent of insurance available and not to the amount of indemnification available. Appellants cite no case support for such a reading. Further, the language of the statute explicitly limits any waiver of immunity to the amount of liability coverage purchased by the hospital. Any contrary reading is not only unsupported by caselaw, but contrary to the express wording of the statute. Moreover, Singing River Hospital did not have any liability insurance to fund indemnifications, and, as such, there can be no waiver even if we accepted the argument, which we do not.
D. Self-Insurance through "excess revenues"
Section 41-13-35(5)(h) of the Mississippi Code grants the board of trustees of community hospitals the authority to "file suit on behalf of the community hospital and to defend and/or settle claims against the community hospital and/or its board of trustees." Miss. Code Ann. § 41-13-11 (Supp. 1991). Any revenues that Singing River Hospital generated over its operating expenses for any given period went into the hospital's balance sheet account entitled "excess revenues." These funds were carried forward to meet future expenses and revenue shortfalls incurred by the hospital.
Appellants argue that, traditionally, SRH has used funds from its "excess revenues" account to settle claims and pay judgments pursuant to the authority granted to the Board by § 41-13-35(5)(h). Thus, appellants claim that by paying for settlements and judgments out of its "excess revenues", SRH has self-insured itself and that SRH has waived its immunity to the extent of its "excess revenues." First, there is no support in the record for appellants' claim that SRH has used funds from its "excess revenues" account for such purposes. Furthermore, even if SRH had used its "excess *1261 revenue" funds for such purposes in the past, there is no support either in Title 41 or the caselaw construing it for the proposition that such expenditures would constitute a waiver of immunity with regard to such future "excess revenues."
E. Public Interest
Appellants' final contention regarding waiver is that the rationale which has traditionally restricted the application of the "proprietary versus governmental acts" dichotomy for immunity to municipalities is unsound, and that the public interest would be best served by extending the application of that dichotomy to acts by community hospitals. In essence, appellants seek to have this Court extend this test for immunity beyond acts by municipalities to acts by the State and its political subdivisions as well. Appellants argue further that if this dichotomy were so applied to the operation of the Singing River Hospital, those operations would be deemed proprietary in nature and therefore not subject to immunity.
Essentially, this argument is the same as one that was advanced by the plaintiff in Strait v. Pat Harrison Waterway District, 523 So. 2d 36 (Miss. 1988). In Strait, a patron sued the waterway district to recover for injuries he sustained at a waterslide amusement park operated by the district. Strait at 36. One of the contentions advanced by the plaintiff was that the Pat Harrison Waterway District was engaged in a proprietary enterprise to generate revenue and that the District waived its immunity for that activity. Id. at 40. In response, this Court said:
There is much authority in Mississippi supporting this proprietary/governmental distinction, but it has always been applied to municipalities. (citations). According to Prosser, the proprietary/governmental test for waiver of immunity is peculiar to municipalities and is "different both in origin and scope from the `sovereign' or governmental immunity of the state." Prosser, The Law of Torts, § 131, p. 1051 (5th ed. 1984).
The case sub judice is controlled by caselaw established prior to Pruett v. City of Rosedale, 421 So. 2d 1046 (Miss. 1982), and by the Sovereign Immunity Act of 1984. MCA § 11-46-6 (Supp. 1987). In accordance with the majority rule, this law applies the proprietary/governmental function distinction only to cases involving municipalities. Since the present case is not of that class, the proprietary nature of appellee's conduct is of no consequence in determining whether sovereign immunity is waived.
Strait at 40. Re-examination of the restriction of the application of the governmental/proprietary distinction to municipalities may well be in order. That dichotomy arises, however, out of the application of judicially imposed sovereign immunity. The entity here involved enjoys explicit statutory immunity. We therefore decline the invitation to re-visit the proprietary distinction.
II. Qualified Immunity
The trial court granted summary judgment on the ground of qualified immunity to the members of the board of trustees for Singing River Hospital, Dr. Jack Longmire, Dr. Spurgeon Weatherall, and Emergency Room Group, Limited. The appellants assign error to each of these judgments.
A. Members of the SRH Board of Trustees
With respect to governmental immunity, the appellants incorporate all of their arguments regarding waiver of immunity by the hospital against the individual members of the board of trustees. First, it should be noted that suing public officials in their official capacities is tantamount to suing the State or its affiliated entities themselves, and any immunities protecting such State entities will likewise shield the public officials affiliated with them when they are sued in their official capacities. Winters v. Lumley, 557 So. 2d 1175, 1177 (Miss. 1989). The Winters Court went on to hold that where a statutory provision clearly and unambiguously waives immunity for a State entity under a specified set of circumstances, that waiver applies equally as well under those circumstances to public officials affiliated with that entity who are *1262 sued in their official capacities. Id. at 1178. In Winters, the Court was dealing with a claim that the governmental immunity for members of the County Board of Supervisors of Washington County was waived to the extent of the liability insurance that had been taken out on their behalf where § 19-7-8(2) of the Mississippi Code provided:
If liability insurance is in effect in such county, such county may be sued by anyone affected to the extent of such insurance carried; provided, however, that immunity from suit is only waived to the extent of such liability insurance carried and a judgment creditor shall have recourse only to the proceeds or right to proceeds of such liability insurance.
Id. at 1177; Miss. Code Ann. § 19-7-8(2) (Supp. 1992).
In the instant case, the only statutory waiver of immunity we have for community hospitals § 41-13-11(2) is a mirror image of § 19-7-8(2). It provides in relevant part:
If liability insurance is in effect ... suit may be maintained by anyone affected to the extent of such insurance available to satisfy any judgment rendered. However, immunity from suit is only waived to the extent of such liability insurance available to satisfy any judgment rendered, and a judgment creditor shall have recourse only to the proceeds or right to proceeds of such liability insurance.
Miss. Code Ann. § 41-13-11(2) (Supp. 1991). Unlike in Winters, however, there was no liability insurance purchased by SRH either for itself or for members of the board of trustees. Thus, there can be no waiver under § 41-13-11(2).
Appellants also seek to incorporate each of the remaining claims of waiver noted above against the members of the board of trustees. Those claims are again rejected for the same reasons that they are rejected above. Appellants also argue that the board members are not protected by the common law shield of qualified immunity for public officials. Since we have concluded that members of the board of trustees are immunized from suit by § 41-13-11's shield of governmental immunity, it is not necessary to address this argument.
B. Dr. Longmire, Dr. Weatherall, & Emergency Room Group, Ltd.
In the past, this Court has held that physicians engaged in public service are qualifiedly immune from suit for medical treatment decisions made during the course of that service. Marshall v. Chawla, 520 So. 2d 1374 (Miss. 1988); and Hudson v. Rausa, 462 So. 2d 689 (Miss. 1984). Hudson is the genesis of this rule. In Hudson, the widow of a deceased factory worker brought suit against a physician, who had prescribed medication for the deceased to treat his case of infectious tuberculosis. She charged that the prescribed medication had caused her husband's death. The physician was employed by the State Board of Health to formulate and carry out policies to stop the spread of certain communicable diseases. The widow also joined a nurse, who worked in conjunction with the doctor, and who was also employed by the State Board of Health. The Court upheld grants of summary judgment to the physician and the nurse. We held that the physician and the nurse were immunized from suit for their discretionary decisions made either in instituting their program or administering treatment pursuant to their program. 462 So.2d at 695-696.
Hudson was followed in Marshall. There, the husband of the plaintiff was admitted into the emergency room of a state eleemosynary hospital late one night complaining of a severe headache and vomiting. Defendant, a physician on the staff of that hospital, was on duty at the time. Defendant did not report to the emergency room, but told the staff to administer dramamine to the patient. The man was taken home, where he suffered a stroke and died approximately ten hours later. The deceased's widow brought a wrongful death action against the doctor. This Court affirmed a lower court dismissal of the case, holding that the treatment decisions of the doctor were given qualified immunity. 520 So.2d at 1377.
The instant case gives us an opportunity to revisit those decisions, and today *1263 we find those decisions to have been erroneous to the extent they extended medical personnel in public service qualified immunity for treatment decisions. Thus, we overrule Hudson and Marshall to that extent. The discretion exercised by medical personnel in making treatment decisions is not the sort sought to be protected by the common law qualified immunity bestowed upon public officials.
Common law qualified immunity has traditionally sought to protect the discretion of public officials so that those officials would not be deterred by the threat of suit from making decisions and formulating policies that are in the public good. State of Mississippi for the Use and Benefit of Brazeale v. Lewis, 498 So. 2d 321, 322 (Miss. 1986); Pruett v. City of Rosedale, 421 So. 2d 1046, 1052 (Miss. 1982); and Hudson, 462 So. 2d 689, 695 (citing Gregoire v. Biddle, 177 F.2d 579, 581 (2nd Cir.1949) (Learned Hand, J.)); See also, generally, Wyatt v. Cole, 504 U.S. ___, ___, 112 S. Ct. 1827, 1832-1833, 118 L. Ed. 2d 504, 514-515 (1992) (contains thorough discussion of the history of and rationales underlying common law public official immunity). In Lewis, this Court noted that qualified immunity for the discretionary acts of public officials has evolved "[i]n order to allow our lawmakers and government officials to participate freely and without fear of retroactive liability in risk-taking situations requiring the exercise of sound judgment." 498 So.2d at 322. In Gregoire v. Biddle, Justice Learned Hand said of qualified immunity:
The justification for doing so is that it is impossible to know whether the claim is well-founded until the case has been tried, and that to submit all officials, the innocent as well as the guilty, to the burden of a trial and to the inevitable danger of its outcome, would dampen the ardor of all but the most resolute, or the irresponsible, in the unflinching discharge of their duties. Again and again the public interest calls for action which may turn out to be founded on a mistake, in the face of which an official may later find himself hard put to it to satisfy a jury of his good faith. There must indeed be means of punishing public officers who have been truant to their duties; but that is quite another matter from exposing such as have been honestly mistaken to suit by anyone who has suffered from their errors. As is so often the case, the answer must be found in a balance between the evils inevitable in either alternative. In this instance it has been thought in the end better to leave unredressed the wrongs done by dishonest officers than to subject those who try to do their duty to the constant dread of retaliation.
177 F.2d 579, 581 (quoted in Hudson, 462 So.2d at 695). We noted a further rationale for removing such policy decisions from the purview of the Courts in Pruett v. City of Rosedale, where we said
Judicial review of basic policy-making decisions continues to be regarded by many as inappropriate because courts have no standards by which to judge such decisions. Judges and jurors are in no better position to evaluate the reasonableness of policy determinations than are those officials who are charged with making them. The reasonable man standard of tort law is not an appropriate measure for the political, social or economic desirability of government programs and the methods selected for pursuing them. State tort standards cannot adequately control those government decisions in which, to be effective, the decision maker must look to considerations of public policy and not merely to established professional standards or to standards of general reasonableness.
421 So.2d at 1051-52.
None of these considerations undergirding common law qualified immunity are applicable to medical treatment decisions. First of all, there is nothing inherently governmental about decisions regarding individual medical treatment. They do not involve the formulation of public policy in any respect. Therefore, the notion of promoting governmental decisions that are in the public good is completely inapplicable. Second, the fact that a physician or other medical provider is employed by the State *1264 does not expose that physician to any greater threat of suit than he would otherwise face in private practice. He therefore will be no more discouraged by the threat of suit from taking actions he thinks are prudent, than he ordinarily would be as a private physician. Furthermore, the threat of suit will not discourage physicians from seeking and accepting government employment, because they will face the exact same potential exposure to liability that they would as private physicians. Finally, the judicial system is perfectly capable of adjudicating the reasonableness of medical treatment decisions. Our courts do it every day in medical malpractice actions heard across this state. The medical treatment decisions made by medical personnel at state health institutions are no different from the private medical care decisions that are currently being judged.
This view is one that has been taken by a majority of the courts which have ruled on whether common law qualified immunity extends to cover medical treatment decisions. See Kiersch v. Ogena, 230 Ill. App. 3d 57, 172 Ill. Dec. 335, 595 N.E.2d 696 (1992); Gould v. O'Bannon, 770 S.W.2d 220 (Ky. 1989); Protic v. Castle Co., 132 Wis. 2d 364, 392 N.W.2d 119 (1986); Cooper v. Bowers, 706 S.W.2d 542 (Mo. App. 1986); James v. Jane, 221 Va. 43, 282 S.E.2d 864 (1980); Comley v. Emanuel Lutheran Charity Bd., 35 Or. App. 465, 582 P.2d 443 (Or. App. 1978); and Henderson v. Bluemink, 511 F.2d 399 (D.C. Cir.1974). But see de Sanchez v. Genoves-Andrews, 161 Mich. App. 245, 410 N.W.2d 803 (1987). Henderson is one of the leading cases in this tradition. In that case, an army doctor argued that his status as an army officer insulated him from liability for alleged acts of negligence in treating and diagnosing a patient's illness. The United States Court of Appeals for the District of Columbia Circuit held that common law qualified immunity did not extend to protect decisions by the doctor which were strictly medical in nature. 511 F.2d at 401-403. In doing so, it noted several of the same considerations which influence this Court to hold that medical treatment decisions are not protected by common law qualified immunity. The Court of Appeals said:
The chief policy underlying the creation of immunity for lower governmental officials is mainly that which stems from the desire to discourage "the fearless, vigorous, and effective administration of policies of government." However, that policy is not applicable to the exercise of normal medical discretion since doctors making such judgments would face the same liability outside of government as they would face if the complaint below is upheld. [Therefore], the threat of liability for negligence would not deter the fearless exercise of medical discretion within government service any more than the same threat deters the exercise of medical discretion outside of government. Holding government medical personnel to the same standards of care which they would face outside of government service in no way burdens their public responsibility or deters entry into government service or the vigorous exercise of public responsibility once having entered that service.
Id. at 402-403.
This Court noted these considerations in Marshall v. Chawla but chose, nevertheless, to follow its decision in Hudson v. Rausa. It did so based on the following rationale:
... It is obviously true that not all forms of discretion are alike and in some other spheres of government the rule laid down in Hudson might have to be modified to account for that fact. But in the case of medical doctors in public service, special circumstances are present which make a broader grant of immunity sound policy. In saying that the "threat of liability would not deter the fearless exercise of medical discretion within government service any more than the same threat [would do so] outside the government," the Henderson court overlooked the objection that such vulnerability might very well deter doctors from entering government service in the first place. The protection of qualified immunity no doubt serves as a powerful incentive to many doctors to serve in state eleemosynary *1265 institutions and this in turn, makes medical care available to many who [would] not be able to afford medical care in private facilities.
520 So.2d at 1377. On further reflection we find this reasoning faulty. It reflects fact finding which is legislative in nature and of dubious validity. Moreover, it promotes a goal beyond the pale of the traditional justification for qualified immunity. Today, we hold that common law qualified public official immunity will be restricted to its designed purpose. Accordingly, it will not be extended to decisions that involve only individual medical treatment. Those decisions will be judged on the same standards as if made by private providers. Decisions made by medical personnel engaged in public service will continue to be protected to the extent that they involve the formulation and implementation of public policy.
The actions of Dr. Longmire and Dr. Weatherall that are at issue in this case deal only with the treatment of Helen Womble in the SRH Emergency Room on the nights of March 29 and 30, 1986. They did not involve formulating or implementing public policy. Therefore, they are not afforded protection in any respect by the common law qualified immunity.
III. Statute of Limitations
The trial court granted summary judgment to Dr. Longmire, Dr. Weatherall, Dr. Calhoun, and Emergency Room Group, Ltd. on the ground that each of them was added after the applicable two-year statute of limitations had run on the appellants' claim. Appellants contest the entry of summary judgment for each of these parties. The decedent Helen Womble was seen in the emergency room of SRH on the three consecutive days March 29, 30, and 31 of 1986. She was admitted into the hospital on March 31, and surgery was performed on her that same night. Ms. Womble died on April 11, 1986. Plaintiffs, the heirs of Helen Womble, filed their original complaint on March 28, 1988 against Dr. Clyde Gunn, the physician who performed the surgery on Ms. Womble on March 31, 1986, Singing River Hospital, and Singing River Emergency Room Physicians/Nurses John Does 1-5. On December 8, 1988, the plaintiffs filed an amended complaint, joining Dr. Longmire, Dr. Weatherall, and Emergency Room Group, Ltd. as defendants. On November 7, 1989, the trial court granted a motion from the plaintiffs to have Dr. Calhoun listed as one of the John Doe defendants.
Appellants first contend that the applicable statute had not run when the respective parties in question were added to this lawsuit. Further, they argue that even if § 15-1-36's two-year period had run on this matter, the relation-back provisions of Rules 9(h) and 15(c) of the Mississippi Rules of Civil Procedure are satisfied under the facts of this case, and that therefore their claim should not be barred. The appellees make the arguments to the contrary on each point. They also direct the Court's attention to the case of Lowery v. Statewide Healthcare Service, 585 So. 2d 778 (Miss. 1991). A company providing nursing personnel to a hospital had been joined through a theory of respondeat superior for alleged malpractice committed by one of the nurses they supplied. Lowery at 779. There, the court held that where the liability of such entities is predicated solely upon the doctrine of respondeat superior, the bar of suit against the employee by § 15-1-36 will likewise bar the action against the master. Id.
Section 15-1-36 of the Mississippi Code provides:
Except as otherwise provided in this section, no claim in tort may be brought against a licensed physician, osteopath, dentist, hospital, nurse, pharmacist, podiatrist, optometrist, or chiropractor for injuries or wrongful death arising out of the course of medical, surgical, or other professional services unless it is filed within two (2) years from the date the alleged act, omission or neglect shall or with reasonable diligence might have been first known or discovered.
Miss. Code Ann. § 15-1-36 (Supp. 1991). Mississippi caselaw has reaffirmed the explicit language of § 15-1-36 and has consistently *1266 applied the rule that the two-year statute of limitations in medical malpractice actions does not commence running until the patient discovers or should have discovered that he has a cause of action. E.g., Smith v. Sanders, 485 So. 2d 1051 (Miss. 1986); Parham v. Moore, 552 So. 2d 121 (Miss. 1989). The focus is on the time that the patient discovers or should have discovered by the exercise of reasonable diligence, that he probably has an actionable injury. Smith at 1052. Moreover:
The operative time is when the patient can be held to have knowledge of the injury itself, the cause of the injury, and the causative relationship between the injury and the conduct of the medical practitioner.
Id.
In the instant case, the appellees Dr. Longmire, Dr. Weatherall, and Emergency Room Group, Ltd. were added to this suit approximately two years and eight months after the death of Helen Womble. Applying Smith, the appropriate inquiry here is whether the exercise of reasonable diligence should have led the appellants to discover the defendants' alleged negligent acts and their respective connections to Helen Womble's death at some time prior to the date two years preceding the date on which defendants were added to this lawsuit?
Appellants contend that even though they knew that the decedent died on April 11, 1986, they could not have known of the causative relationship between the alleged acts of negligence by Doctors Longmire and Weatherall and the death of Helen Womble until they had a reasonable opportunity to obtain all the medical records and have them examined by a medical expert.
The running of the statute of limitations under § 15-1-36 may be tolled for a reasonable period of time to allow plaintiff to acquire and peruse the appropriate medical records, but the facts of this case do not indicate that appellants exercised reasonable diligence in attempting to discover the alleged negligent acts of Dr. Longmire and Dr. Weatherall. Appellants did not make a request to view SRH's medical records relating to the treatment of Helen Womble until almost two years after Ms. Womble's death. The records ultimately received clearly reflected that Dr. Weatherall and Dr. Longmire were the treating physicians on March 29, 1986, and March 30, 1986, respectively. Under any reasonable interpretation of the statute § 15-1-36's two-year period had passed before the joinder of Dr. Weatherall, Dr. Longmire, and Emergency Room Group.
Dr. Calhoun was not added to this suit until almost three years and seven months had passed since Helen Womble's death. Appellants contend that they had no reason to suspect any negligence on Dr. Calhoun's part until he was implicated in a deposition taken of Dr. Clyde Gunn in June 1989. That was approximately five months before Dr. Calhoun was added. The record reflects, however, that there were medical records which reflected the extent of Dr. Calhoun's treatment of the decedent on the day she was admitted to the hospital. The exercise of reasonable diligence should have led appellants to discern the extent of Dr. Calhoun's involvement in this case and join him in this suit long before the passage of three years and seven months after the Helen Womble's death.
Appellants have asserted in the alternative that they are entitled to relief from the running of the statutory period by application of Rules 9(h) and 15(c) of the Mississippi Rules of Civil Procedure. Those concerns must be addressed before it can be said the appellants' claim is barred by § 15-1-36.
A. Rule 9(h)
Appellants contend that even if it had been decided that more than two years had transpired between the time they should have discovered their cause of action against the appellees through reasonable diligence and the time they added the appellees to this action, they satisfied MRCP 9(h), which provides an exception to the ordinary effects of the running of the statute of limitations. MRCP 9(h) provides:
When a party is ignorant of the name of an opposing party and so alleges in his *1267 pleading, the opposing party may be designated by any name, and when his true name is discovered the process and all pleadings and proceedings in the action may be amended by substituting the true name and giving proper notice to the opposing party.
MRCP 9(h). Rule 15(c) of the MRCP contains the additional language that:
An amendment pursuant to Rule 9(h) is not an amendment changing the party against whom a claim is asserted, and such amendment relates back to the date of the original pleading.
MRCP 15(c).
Appellees respond primarily with two claims: 1) the appellants knew who the added parties were when they filed their original complaint, and 2) if the appellants did not know who all the relevant parties were at the time they filed suit, it was only because the appellants had not exercised due diligence in attempting to gain such knowledge. There is a dearth of Mississippi law on the application of Rule 9(h). It is a principle of general application, though, that ignorance of the opposing party for fictitious party practice extends beyond mere lack of knowledge of the opposing party's name. Even if the plaintiff knows the true name of the person, he is still ignorant of his name if he lacks knowledge of the facts giving him a cause of action against the that person. See, e.g., Braceda v. Gamsby, 267 Cal. App. 2d 167, 72 Cal. Rptr. 832 (1968); Columbia Engineering v. Epsey, 429 So. 2d 955 (Ala. 1983).
Womble admits that no fair construction of the pleadings would lead to the conclusion that Dr. Calhoun was identified, even as a John Doe. For that reason this rule cannot save the action against him, in any event. As to all, as noted above, there were numerous medical records on file at SRH indicating the extent to which Doctors Weatherall, Longmire, and Calhoun had participated in the treatment of Helen Womble. A reasonably diligent inquiry by the appellants into the history of the deceased's medical treatment would have revealed to appellants the identities of the persons they sought to identify categorically as "Emergency Room Physicians and Nurses (John Does 1-5)". Therefore, we hold that appellants were not ignorant of the identities of appellees in the sense contemplated by Rule 9(h). Consequently, no relief is provided appellants from the running of the statutory period by Rule 9(h).
B. Rule 15(c)
Since we have determined that the provisions of 9(h) have not been satisfied in this case, any amendment made by appellants to add additional parties must satisfy the provisions of Rule 15(c) regarding "changing the party against whom a claim is asserted" to prevent time bar by § 15-1-36. MRCP Rule 15(c) provides:
Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment:
(1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and
(2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
MRCP 15(c).
The record indicates that as early as April 20, 1988, the insurance carrier for Dr. Weatherall and Dr. Longmire, Medical Assurance Company of America, was sending correspondence regarding this lawsuit to a lawyer that it had already retained to represent the doctors. The doctors received carbon copies of that April 20, 1988, letter. Further, the record reflects that the doctors were receiving communication from that retained counsel regarding this lawsuit and their involvement in it as early as April 21, 1988. The record also shows that *1268 Weatherall and Longmire began meeting with that retained counsel sometime around April 21, 1988. We take these facts as providing clear evidence that Doctors Longmire and Weatherall were aware of this lawsuit and its nature at least by the time frame of April 20 and 21st of 1988.
Helen Womble died in SRH on April 11, 1986, after having been treated by Doctor Weatherall on March 29, 1986, and by Doctor Longmire on March 30, 1986. We noted above that in a case such as this, the statutory period of limitations should be tolled for a reasonable period of time to allow plaintiffs to acquire and peruse the medical records that would provide a basis for any alleged negligence. April 20, 1986, would be the date exactly two years before the first tangible evidence of knowledge of this suit by Doctors Longmire and Weatherall. That date is only nine days after the death of Helen Womble. Certainly, it is reasonable to expect that it would have taken Ms. Womble's family at least nine days through reasonably diligent inquiry to acquire knowledge of a basis for suit against Longmire and Weatherall.
On these facts the conclusion that, within the statutory period provided by law for commencing this action, Longmire and Weatherall had notice of this suit and knew or should have known that but for a mistake concerning their identities, they would have been included in this suit when it was originally filed on March 28, 1988, is virtually compelled. It is also obvious beyond peradventure that they will not be prejudiced in maintaining a defense on the merits. The record shows that they were already preparing with retained counsel to defend themselves in this action on April 21, 1988. That date is only approximately three weeks after the original complaint was filed. Therefore, we find that the provisions of Rule 15(c) have been satisfied by the facts of this case, and, consequently, we rule that summary judgment was improperly entered for Doctor Weatherall and Dr. Longmire on the basis of time bar. That judgment is reversed.
There is at least an issue of fact whether Emergency Room Group, Ltd. should be deemed to have notice through the knowledge acquired by Doctors Longmire and Weatherall. It has long been the rule that "a corporation is bound by the knowledge acquired by, or notice given to, its officers or agents which is within the actual or apparent scope of their authority or employment and which is in reference to a matter to which their authority extends." Parmes v. Illinois Central Gulf Railroad, 440 So. 2d 261, 265 (Miss. 1983). The 1989 Annual Report for Emergency Room Group, Ltd. lists Dr. J. Spurgeon Weatherall as the corporation's vice-president and Dr. A.W. Longmire as the corporation's treasurer. It also identifies Dr. Weatherall as the registered agent for the corporation. The record is not entirely clear on the precise period in time that the Annual Report pertains to. Therefore, we cannot assume that Doctors Longmire and Weatherall were officers of the corporation at the time they personally acquired knowledge of the suit. However, the information contained in the 1989 Annual Report clearly creates a real question regarding the corporate roles that were being played by Longmire and Weatherall at the time they acquired notice. Accordingly, we reverse the entry of summary judgment for Emergency Room Group, Ltd.
The record does not give any indication that Dr. Calhoun possessed an awareness that, but for a mistake, he would have been included in this suit when it was originally filed. Therefore, Rule 15(c) does not provide a basis for disturbing the summary judgment that was entered for him on time bar. That judgment is affirmed. Appellants also challenge the Rule 12(b)(6) dismissal that was entered by the trial court for Dr. Calhoun. Because we have affirmed the entry of summary judgment in Dr. Calhoun's favor, it is not necessary to address the propriety of the dismissal.
Conclusion
For the reasons set forth above, we affirm the entries of summary judgment for Singing River Hospital, the Singing River Hospital Board of Trustees, the members of the Singing River Hospital Board of *1269 Trustees, and Dr. Wallace Calhoun. We reverse the entries of summary judgment for Dr. Spurgeon Weatherall, Dr. Atkinson Winans Longmire, and Emergency Room Group, Ltd. The actions with respect to those parties are hereby remanded to the Jackson County Circuit County for further proceedings consistent with this decision.
AFFIRMED IN PART; REVERSED AND REMANDED IN PART.
HAWKINS, C.J., PRATHER, P.J., and SULLIVAN, PITTMAN, ROBERTS and SMITH, JJ., concur.
DAN M. LEE, P.J., concurs in result only.
McRAE, J., not participating.
ON PETITION FOR REHEARING
Rehearing denied June 10, 1993.
DAN M. LEE, Presiding Justice, specially concurring on denial of rehearing:
Although I concur in the result reached by the Court in this case, I feel compelled to disagree with the treatment afforded our precedents in the area of qualified immunity for public doctors. Specifically, I feel the Court oversteps the bounds of this case and ranges far afield in order to overrule the cases of Hudson v. Rausa, 462 So. 2d 689 (Miss. 1984), and its progeny, Marshall v. Chawla, 520 So. 2d 1374 (Miss. 1988).
In my opinion those two cases represent sound reasoning and deserve better treatment than they receive from today's majority. At any rate, the issues presented in the present case may be adequately resolved without overruling Hudson or Marshall. Both of these cases stand for the proposition that public doctors enjoy qualified immunity for treatment decisions. The justifications for such a rule are manifold and are convincingly presented by the authors of those opinions. I am firmly convinced that neither Longmire nor Weatherall are "public doctors" as contemplated in Hudson and Marshall. These doctors do not work directly for an institution that enjoys immunity. Rather, they are employees of the Emergency Room Group, Ltd., a private corporation that provides health care to Singing River on a contract basis. This factual distinction is telling when viewed in light of the reasoning behind the rule in Hudson and Marshall.
For the foregoing reason, I would distinguish Hudson and Marshall from the current case and retain them as sound precedent for cases truly involving "public doctors." To do otherwise not only introduces unnecessary instability into the legal process but also reflects poorly on this Court's commitment to its precedents as well as its fulfillment of the duty to decide only the issues properly presented by the case on appeal.
ROBERTS, James L., Jr., J., joins this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2091209/ | 672 F. Supp. 929 (1987)
Joan Robienczak TRUEHART, Wife of/and Donald Truehart
v.
Peter C. BLANDON, J. Robert Lee, III, the M/V BUCCANEER, Her Engines, etc., In Rem, United States Fidelity and Guaranty Company and ABC Insurance Companies.
Consolidated with
UNITED STATES FIDELITY & GUARANTY COMPANY
v.
Michael S. WILLIAMS, J. Robert Lee and the North River Insurance Company.
Civ. A. Nos. 87-0708, 87-0796.
United States District Court, E.D. Louisiana.
October 13, 1987.
As Amended October 23, 1987.
*930 Chaffe, McCall, Phillips, Toler & Sarpy, John H. Clegg, L. Havard Scott, III, T.A., New Orleans, La., for Trueharts.
Bienvenu, Foster, Ryan & O'Bannon, Hugh M. Glenn, Jr., T.A., Franklin H. Jones, III, New Orleans, La., for J. Robert Lee, III, North River Ins. and U.S. Fire Ins. Co.
Lemle, Kelleher, Kohlmeyer, Dennery, Hunley, Moss & Frilot, Ashton R. O'Dwyer, Jr., New Orleans, La., for Peter C. Blandon and U.S. Fidelity & Guar. Co.
John D. Rawls, New Orleans, La., for Michael Williams.
AMENDING AND SUPERSEDING ORDER & REASONS
CHARLES SCHWARTZ, Jr., District Judge.
This matter is before the Court on defendants' motions to dismiss and/or for summary judgment. By Minute Entry dated September 17, 1987, the Court disposed of all issues but one raised in these motions. The Court now disposes of the final issue. For the following reasons, the Court GRANTS defendants' motions to dismiss plaintiff's claim for loss of society and CERTIFIES this order under 28 U.S.C. § 1292(b).
The present episode adds yet another chapter to admiralty's long and twisted history on wrongful death. To date, apparently no other court has ruled whether surviving, nondependent parents or siblings may recover for loss of society of their deceased child/sibling who had no surviving spouse or issue, who had not been living with his parents or siblings at the time of his death and who died on a state's territorial, navigable waters. Today, this Court rules they may not.
I.
On February 23, 1986, Peter Blandon and several of his friends spent the day on Lake Pontchartrain aboard his Hatteras yacht. On the way home, Mr. Blandon turned the helm over to Robert Lee while Mr. Blandon went below deck. Soon thereafter, the boat struck the Lake Pontchartrain Causeway Bridge and sank. Victor Truehart, who had been up top on the yacht, died from the accident.
Victor's father, Donald Truehart, has sued the yacht in rem as well as Mr. Blandon, his insurer (United States Fidelity and Guaranty Company), Mr. Lee and his insurers (The North River Insurance Company and United States Fire Insurance Company). Plaintiff is suing on behalf of Victor's estate and Victor's immediate family (namely, plaintiff, his wife and their two other, surviving children)[1] and alleges that Mr. Blandon and/or Mr. Lee were negligent *931 in Victor's wrongful death. Among the claims sought is one for loss of society.
At the time of his death, Victor was a twenty-four year old New Orleans resident who had no surviving wife or child. For several years, he had not lived with his parents, who live in Massachusetts.[2] He had never contributed to their financial support.[3]
II.
A.
A tort claim comes within the admiralty jurisdiction of federal courts, among other times, when the alleged wrong occurs on navigable waters within the United States and bears a significant relationship to a traditional maritime activity. Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 268, 93 S. Ct. 493, 504, 34 L. Ed. 2d 454 (1972); see East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, ___, 106 S. Ct. 2295, 2298, 90 L. Ed. 2d 865 (1986). The "maritime nexus" requirement, or the "plus" element of the "locality-plus" test, is not restricted to commercial activity: it applies as well to pleasure boat activity, such as where two pleasure boats collide. Foremost Insurance Co. v. Richardson, 457 U.S. 668, 674-76, 102 S. Ct. 2654, 2658-59, 73 L. Ed. 2d 300 (1982). Nor is it restricted simply to collisions between boats; admiralty jurisdiction exists, for the same general reasons, where a pleasure boat strikes a stationary object in the water. See McCormick v. United States, 680 F.2d 345, 347-48 (5th Cir.1982) (action against United States where a pleasure boat struck an unmarked piling); Herbert v. Outboard Marine Corp., 638 F. Supp. 1166, 1170 (E.D.La.1986) (Carr, J.) (action against a motor manufacturer where a homemade skiff struck a log piling); cf. Foremost Insurance, 457 U.S. at 676, 102 S. Ct. at 2659 ("the smooth flow of maritime commerce is promoted when all vessel operators are subject to the same duties and liabilities").
Further, courts have long held that an action arising from a passenger's injury aboard a boat on navigable waters comes within admiralty jurisdiction. E.g., Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 628, 79 S. Ct. 406, 408, 3 L. Ed. 2d 550 (1959); cf. Gele v. Chevron Oil Co., 574 F.2d 243, 249-50 (5th Cir.1978) (not finding expressly that admiralty jurisdiction existed in an action by a pleasure boat passenger against the owner and the operator, but holding under general maritime law that the operator was partially liable for the passenger's injuries).
B.
With admiralty jurisdiction comes the application of substantive maritime law. East River Steamship, 476 U.S. at ___, 106 S.Ct. at 2299; see Foremost Insurance, 457 U.S. at 685, 102 S. Ct. at 2663 (Powell, J., dissenting). Absent a relevant federal statute, the general maritime law, as developed by the judiciary, applies. East River Steamship, 476 U.S. at ___, 106 S.Ct. at 2299.
C.
In The Harrisburg, 119 U.S. 199, 7 S. Ct. 140, 30 L. Ed. 358 (1886), Chief Justice *932 Waite announced the simple, but archaic rule that in the absence of an applicable statute, no action for wrongful death would lie under general maritime law. Id. at 212-14, 7 S. Ct. at 146-47. Thereafter, courts began to allow an action for maritime wrongful death if an applicable state statute permitted recovery for such. E.g., Western Fuel Co. v. Garcia, 257 U.S. 233, 242, 42 S. Ct. 89, 90, 66 L. Ed. 210 (1921); The Hamilton, 207 U.S. 398, 405-06, 28 S. Ct. 133, 135, 52 L. Ed. 264 (1907). But the action was subject to the substantive limitations imposed by the state statute. The Tungus v. Skovgaard, 358 U.S. 588, 592-93, 79 S. Ct. 503, 506-07, 3 L. Ed. 2d 524 (1959).
Meanwhile, in 1920, Congress enacted the Death on the High Seas Act (DOHSA), ch. 111, §§ 1-8, 41 Stat. 537 (codified as amended at 46 U.S.C. §§ 761-768 (1982)), and the Jones Act, ch. 250, § 33, 41 Stat. 1007 (codified as amended at 46 U.S.C. § 688 (1982)). On the one hand, DOHSA repudiated The Harrisburg rule for wrongful maritime death outside state territorial waters by providing an exclusive statutory remedy of pecuniary damages for wrongful death more than three miles from shore. 46 U.S.C. §§ 761-762; Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, ___, 106 S. Ct. 2485, 2491, 2500, 91 L. Ed. 2d 174 (1986). On the other hand, the Jones Act repudiated the rule for wrongful death of a seaman by providing a remedy against his employer. 46 U.S.C. § 688; Gillespie v. United States Steel Corp., 379 U.S. 148, 154-55, 85 S. Ct. 308, 312-13, 13 L. Ed. 2d 199 (1964) (holding that the Jones Act remedy against a deceased seaman's employer precludes recovery under state wrongful death statutes). Unfortunately, this mixture of state and federal law amounted to statutory chaos. See G. Gilmore & C. Black, The Law of Admiralty § 6-29, at 359 (2d ed. 1975); see also Sistrunk v. Circle Bar Drilling Co., 770 F.2d 455, 457 (5th Cir.) (enumerating the incongruities and terming them an "unfair and irrational system"), rehearing en banc denied, 775 F.2d 301 (5th Cir.1985), cert. denied, 475 U.S. 1019, 106 S. Ct. 1205, 89 L. Ed. 2d 318 (1986).
Subsequently, in 1970, the Supreme Court overruled The Harrisburg, disposed of the need to look to state law for possible recovery and held that a federal remedy for wrongful death existed under general maritime law. Moragne v. States Marine Lines, Inc., 398 U.S. 375, 409, 90 S. Ct. 1772, 1792, 26 L. Ed. 2d 339 (1970) (reversing the dismissal of a widow's wrongful death claim based on unseaworthiness, where the applicable state statute did not recognize the claim). The Court expressly recognized that the exact parameters of this new cause of action could be defined only after further litigation. Id. at 408, 90 S. Ct. at 1792. But the Court consistently referred to the intended beneficiaries of the new cause of action as being dependents of the deceased. E.g., id. at 382, 90 S. Ct. at 1778 ("in the case of death, those closest to him [the decedent] usually spouse and children seek to recover for their total loss of one on whom they depended"); id. at 385, 90 S. Ct. at 1779 ("courts have recognized ... calculation of loss sustained by dependents or by the estate of the deceased").
In Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 94 S. Ct. 806, 39 L. Ed. 2d 9 (1974), the Supreme Court addressed for the first time maritime wrongful death claims for loss of society. The Court held that the widow of a longshoreman killed on state territorial waters could recover damages on her (Sieracki) unseaworthiness claim for loss of support, services and society and for funeral expenses, even though her husband had recovered in his lifetime for his personal injuries. Id. at 583-91, 94 S. Ct. at 814-18; cf. American Export Lines, Inc. v. Alvez, 446 U.S. 274, 100 S. Ct. 1673, 64 L. Ed. 2d 284 (1980) (holding that the wife of a harbor worker nonfatally injured in state waters may sue for loss of society under general maritime law). The Court defined society broadly:
The term "society" embraces a broad range of mutual benefits each family member receives from the others' continued existence, including love, affection, care, attention, companionship, comfort, and protection.
*933 Gaudet, 414 U.S. at 585, 94 S. Ct. at 815. But as it did in Moragne, the Court in Gaudet continued to refer to the beneficiaries of its decision as dependents. E.g., id. at 577, 94 S. Ct. at 811 ("the creation of a uniform federal cause of action for maritime death, designed to extend to the dependents of maritime wrongful death victims"); id. at 583, 94 S. Ct. at 814 ("the policy underlying the remedy is to insure compensation of the dependents [of the deceased]"); id. at 584, 94 S. Ct. at 814 ("it is necessary first to identify the particular harms suffered by the dependents"); id. at 585-86, 94 S. Ct. 815 ("the deprivation of these benefits [i.e., loss of society] by wrongful death is a grave loss to the decedent's dependents").
A few years later, in Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 98 S. Ct. 2010, 56 L. Ed. 2d 581 (1978), the Court held that the pecuniary loss standard provided in DOHSA controlled on the high seas and could not be supplemented by loss-of-society claims recognized in Gaudet for Moragne causes of action. Id. at 623-24, 98 S. Ct. at 2014; see also Tallentire, 477 U.S. 207, 106 S. Ct. 2485 (holding that DOHSA remedies may not be supplemented by state law remedies, through either OCSLA or § 7 of DOHSA). The Court acknowledged that the measure of damages in coastal waters would differ from that on the high seas, but added that admiralty's desire for uniformity, Southern Pacific Co. v. Jensen, 244 U.S. 205, 215-16, 37 S. Ct. 524, 528-29, 61 L. Ed. 1058 (1917), could not override DOHSA's provisions, even if the difference in damages was great. Higginbotham, 436 U.S. at 624, 98 S. Ct. at 2014. In an accompanying footnote, the Court commented on such possible differences:
It remains to be seen whether the difference between awarding loss-of-society damages under Gaudet and denying them under DOHSA has a great practical significance. It may be argued that the competing views on awards for loss of society ... can best be reconciled by allowing an award that is primarily symbolic, rather than a substantial portion of the survivors' recovery. We have not been asked to rule on the propriety of the large sums that the District Court would have awarded for loss of society in this case.
Id. at 624 n. 20, 98 S. Ct. at 2014 n. 20 (cross references omitted).
While these cases from Moragne to Tallentire speak in general terms about dependents, none directly addresses the question of what type of plaintiff is entitled to recover Moragne wrongful death damages, specifically, to recover loss-of-society damages. In each of these opinions, the plaintiffs were the decedents' widows. Other than Higginbotham, none indicates whether these widows were personal representatives on behalf of any other person. In Higginbotham, it appears that the widows were also suing on behalf of their minor and adult children. Id. at 619 n. 4, 98 S. Ct. at 2012 n. 4 (not indicating whether any of the claimants had been dependent on or lived with decedents). For cases addressing who may sue under Moragne and Gaudet for loss of society, this Court must turn to Fifth Circuit opinions.[4]
The most similar case to the instant case is Sistrunk v. Circle Bar Drilling Co., 770 *934 F.2d 455. There, three crew members of a drilling vessel drowned when the vessel capsized on Louisiana waters. Id. at 456. The widows of the three sued for wrongful death under the Jones Act for negligence and under general maritime law for unseaworthiness. Id. The parents joined in these actions to recover damages for loss of their sons' society; none of the parents was financially dependent on his son at the time of the casualty. Id. The Fifth Circuit reversed the district court's judgment awarding the parents damages under general maritime law for loss of society. Id. The Fifth Circuit noted that "denial of recovery lends more uniformity to admiralty jurisdiction than allowing recovery," specifically, with relation to the Jones Act and DOHSA. Id. at 459. It then described how its holding illustrated the hypothesis in Higginbotham that the denial of loss-of-society claims for death on the high seas and the granting of such in territorial waters should not prove a significant threat to uniformity: as noted above, supra p. 933, the Supreme Court in Gaudet was assuming that a loss-of-society claim would be a symbolic, nonsubstantial portion of the survivors' recovery. Id. at 459 (citing Higginbotham, 436 U.S. at 624 n. 20, 98 S. Ct. at 2014 n. 20). In short, the court found that a threat to uniformity could be material only where claims for loss of society were the sole, or the vast portion of the, wrongful death claims sought. In addressing the aim of maritime law at providing special solicitude to seamen, the court noted that this aim extended to the dependents of wrongful death victims, but specifically pointed out that the parents in Sistrunk were not dependent on their sons. Id. at 460.
In In re Patton-Tully Transportation Co., 797 F.2d 206 (5th Cir.1986), an action arising from the capsize of a work skiff on the Mississippi, the Fifth Circuit referred to Sistrunk. There, the decedent's mother, on behalf of herself and her two other, surviving children, filed a Jones Act claim and a general maritime unseaworthiness claim for the wrongful death of her eighteen-year old son, who drowned from the capsize. The district court awarded total damages of over $300,000, of which $40,000 was for the mother's loss of society and $40,000 was for the brother's and sister's combined loss of society. Id. at 209 & n. 1. Affirming the award, the Fifth Circuit held that the Jones Act, which applied in the case, did not exclude recovery for the general maritime claim and that the decedent's siblings, who unlike their mother were precluded from recovering under the Jones Act, 46 U.S.C. § 688 (incorporating 45 U.S. C. § 51 (1982) (denying recovery to an inferior class of beneficiaries [dependent siblings] where a preferred class [parents] exists)), were entitled to the award for loss of society under the general maritime claim. Id. at 212-13. In finding that all three survivors were entitled to recovery, the Court emphasized that all three were financially dependent on the decedent. Id. at 213.[5]
The court characterized its holding in Sistrunk as follows: "this court has *935 held since Gaudet that non-dependent parents of wrongful death victims may not recover damages for loss of society." Id. The court found it unnecessary to mention that the decedent in Sistrunk was also survived by a spouse and child. Indeed, when the holding in Patton-Tully (a survivor may sue under general maritime law even though he is barred from suing under the Jones Act because a preferred beneficiary exists) is read together with the holding in Sistrunk this Court is bound to conclude that the holding in Sistrunk depends not on whether a decedent has a surviving spouse or child, but on whether the plaintiff was dependent on the decedent; in other words, nondependent parents may not recover loss-of-society damages under general maritime law for the wrongful death of their seaman son. See also Toups v. Du-Mar Marine Contractors, Inc., 644 F. Supp. 475, 477-78 (E.D.La. 1985) (Collins, J.) (extending Sistrunk in a nonfatal injury case to deny recovery under general maritime law for loss of society to nondependent parents where their seaman son had no wife or child).[6]
III.
A.
The accident in this action occurred on Lake Pontchartrain, which is a navigable water within the territorial limits of Louisiana. See United States v. Lamastus & Associates, Inc., 785 F.2d 1349, 1353 & n. 7 (5th Cir.1986) (per curiam). Plaintiff alleges that defendants were negligent in the operation and navigation of the boat; whether for pleasure or for commercial use, the operation and navigation of boats bear a significant relationship to a traditional maritime activity. Foremost Insurance, 457 U.S. at 675-76, 102 S. Ct. at 2658-59. In short, as all parties admit, this action satisfies the "locality-plus" test of Executive Jet and thus comes within the Court's admiralty jurisdiction under 28 U.S. C. § 1333(1).
B.
DOHSA does not apply to deaths occurring, as here, in territorial waters. 46 U.S.C. § 761; Sistrunk, 770 F.2d at 456. The Jones Act does not apply to deaths, as here, of nonseamen. 46 U.S.C. § 688. Finally, the Louisiana Wrongful Death Statute, La.Civ.Code art. 2315 (West 1987), is supplanted in maritime wrongful deaths by the general maritime Moragne cause of action. In re S/S Helena, 529 F.2d 744, 753 (5th Cir.1976); Sistrunk, 770 F.2d at 456-57. Because no relevant federal statute *936 applies, the sole cause of action under which plaintiff may recover damages for loss of society is the general maritime Moragne cause of action for wrongful death. Id. at 456.
C.
The question, then, is whether Moragne wrongful death damages, specifically, loss-of-society damages, may, on grounds of negligence[7] by defendants, be awarded to the surviving Trueharts, none of whom was financially dependent on or lived with the decedent. While bound by the Supreme Court and the Fifth Circuit, this Court is also guided by the twin aims of maritime law: achieving uniformity in the exercise of admiralty jurisdiction and providing special solicitude to seamen. See Moragne, 398 U.S. at 386-88, 90 S. Ct. at 1780-81; Gaudet, 414 U.S. at 577, 94 S. Ct. at 811. In answering the question in the negative, the Court makes the following five observations.
First, denying recovery lends more uniformity to admiralty jurisdiction than allowing recovery, for the Trueharts could not have recovered under the other maritime remedies. DOHSA limits recovery to pecuniary loss, 46 U.S.C. § 762; Sistrunk, 770 F.2d at 459, while the Jones Act precludes recovery for loss of society from wrongful death of a seaman in a Jones Act or general maritime negligence action against his employer. Ivy v. Security Barge Lines, Inc., 606 F.2d 524, 525-26 (5th Cir.1979) (en banc) (a wrongful death action brought by seaman's father), cert. denied, 446 U.S. 956, 100 S. Ct. 2927, 64 L. Ed. 2d 815 (1980); cf. Beltia v. Sidney Torres Marine Transport, Inc., 701 F.2d 491, 492-93 (5th Cir.1983) (denying recovery in a wife's action under both the Jones Act and general maritime negligence law for the nonfatal injury of her seaman husband, where the vessel was found seaworthy).
This rationale alone may be insufficient after Gaudet, which granted a cause of action to a longshoreman's widow for loss of society under her unseaworthiness claim. But in Sistrunk, the Fifth Circuit provided reconciliation between Higginbotham and Gaudet. Sistrunk, 770 F.2d at 459. As in Sistrunk, the Trueharts do not have claims for loss of future contribution, support or services from the decedent; indeed, their sole pecuniary damage claim is for the $3500 that the Trueharts spent for funeral expenses on the decedent, Defendants' Statement, ¶ 7 a trivial amount compared to the $500,000 prayed for in the complaint for loss of society. Guided by the Supreme Court's admonition in Higginbotham and the Fifth Circuit's application of that admonition, this Court believes that allowing the Trueharts to recover for loss of society poses a significant threat to uniformity.
Plaintiff suggests that this Court should adopt Louisiana wrongful death law, which permits nondependent parents to recover for loss of society for the wrongful death of their child, La.Civ.Code arts. 2315, 2315.2 (West 1987), as a model in shaping the general maritime wrongful death remedy under Moragne. He offers no reason for looking to Louisiana, as opposed to another state's, law for determining what the federal maritime, judge-created law is or should be beyond, perhaps, the fact that the accident occurred in and the action was brought in Louisiana. Under this rationale, the federal maritime law would vary from district to district, from circuit to circuit, until the Supreme Court would be forced to choose the law of one particular state for all courts to follow. Had this accident occurred in, for example, Hawaii, New Jersey or Rhode Island, and suit been brought there, then a federal court following plaintiff's rationale would have to deny recovery. See, e.g., Hawaii Rev.Stat. § 663-3 (1976) (nondependent parents cannot recover); N.J.Rev.Stat.Ann. § 2A:31-5 (West Supp.1985) (only pecuniary damages recoverable); R.I. Gen.Laws § 10-7-2 (Supp.1984) (parents can recover *937 for loss of society only if deceased child is unemancipated minor). Further, the substantive limitations of the state statute, such as Louisiana's one-year limitation period for wrongful death actions, would often conflict with maritime law. Compare La. Civ.Code art. 2315.2(B) (one-year limitation period) with 46 U.S.C. § 763a (1982) (three-year limitation period for all maritime personal injury and wrongful death actions). In short, this rationale would wreak havoc on any uniformity and often create conflict with federal law.
Second, distinguishing other cases on the basis of their involving seamen and seaworthiness claims in order to allow recovery here would not foster admiralty's aim at providing special solicitude to seamen. General maritime law is its most generous to seamen, the wards of admiralty. This Court refuses to find such a distinction relevant in order to craft for nonseamen's survivors a remedy not available to seamen's survivors, to whom admiralty also provides special solicitude, cf. Gaudet, 414 U.S. at 577, 94 S. Ct. at 811; Sistrunk, 770 F.2d at 460.
Third, denying recovery follows the decided wisdom that only dependents should be permitted to recover for loss of society. Because courts have rarely discussed what may constitute dependency, a few comments are needed.
As the Supreme Court cases show, the vast majority of cases on loss of society from wrongful death concerns surviving spouses or surviving spouses and minor children. While only some of these cases expressly state that the surviving spouse and children were dependent on the deceased, such a statement is unnecessary because dependency there is presumed. The institution of marriage is built on the dependency of each spouse on the other and the corresponding obligation of each spouse to support the other. See, e.g., La. Civ.Code art. 119. For the same reason, the universal obligation in this country for parents to support their unemancipated minor children, see, e.g., id. art. 227, dictates that these children be presumed dependent on their parents. Of course, this conception of dependency does not rely solely on financial support because, for example, gainfully employed spouses may be financially nondependent on each other; the law generally finds it unnecessary to ask whether one spouse depends on money from the other in order to bestow the legal benefits of marriage. An added element lies in the fact that these people live with each other.
With surviving parents, siblings and other relatives, no such presumption exists from the mere fact of the family relation. Where the law provides no obligation for support by the surviving relative to the deceased and by the deceased to the surviving relative, the law does not presume dependency of the one on the other merely because the two are in the same family. Only where the surviving relative and the deceased chose to live together could a court, perhaps, continue tacitly to presume dependency. This observation helps distinguish the three district court cases discussed above in note 4. Because the surviving Trueharts were not financially dependent on and did not live with the decedent, this Court does not have to decide whether, for example, parents or siblings who were not financially dependent on their deceased relative but who did live with that relative can seek loss-of-society damages under Moragne. Whatever conception of dependency this Court may adopt, it excludes the Trueharts' situation.
The broad definition of society the Supreme Court gave in Gaudet has no limitation about dependency. See Gaudet, 414 U.S. at 585, 94 S. Ct. at 815 ("... each family member ..."). But three points urge this Court not to rely overwhelmingly on this one sentence. First, decisions should not turn on the passing niceties of phrase in another. E.g., Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 399-400, 5 L. Ed. 257 (1821) (Marshall, C.J.). Second, the Supreme Court has expressly warned against reading Gaudet too broadly. Higginbotham, 436 U.S. at 622, 98 S. Ct. at 2013. Finally, the Fifth Circuit's decision in Patton-Tully turned on the finding that the surviving parent and siblings were financially *938 dependent on the decedent. Patton-Tully, 797 F.2d at 213.
Fourth, denying recovery here will not in all circumstances bar those who fatally injure boat passengers with no dependents from being sued and thus, in theory, from being deterred from their wrongful conduct. For inasmuch as persons may be deterred because of the possibility of an adverse judgment, defendants remain deterred by possible liability for the survival claim of a decedent's conscious pain and suffering. Cf. Graham v. Milky Way Barge, Inc., 824 F.2d 376, 387 (5th Cir. 1987) (holding that DOHSA does not preclude a survival action for a seaman's death); In re Merry Shipping, Inc, 650 F.2d 622, 623 (5th Cir.1981) (holding that a seaman's survivors may sue on behalf of his estate for his pre-death pain and suffering).
Finally, this Court notes that somewhere a line must be drawn between those who may recover for loss of society and those who may not. The line suggested in Supreme Court and Fifth Circuit opinions, the line between dependents and nondependents, appears to be the most rational, efficient and fair. A requirement of dependency creates a finite, determinable class of beneficiaries. Further, the presumption of dependency for spouses and unemancipated minor children (and perhaps as well for other family members who live together) usually applies, making the requirement easy to show. And where such a presumption does not exist, proof of dependency, specifically, financial dependency, usually depends on objective matters such as tax returns or financial statements; experience has shown that allegations of dependency are rarely disputed.
Without this line, there would be no rationale for granting a cause of action to some surviving family members but denying it to others; aunts and uncles, nieces and nephews, and cousins all could claim loss of society. In that case, a whole new set of subjective variables would need case-by-case consideration, tending to protract litigation. In addition, a defendant would hardly ever know the full extent of his possible liability because he could not easily determine who potential plaintiffs may be. And the larger and harder to define the potential class, the greater are society's costs in protecting against claims for such loss: insurance costs rise as uncertainty increases. See generally Gaudet, 414 U.S. at 608, 94 S. Ct. at 826 (Powell, J., dissenting).
Of course, courts could arbitrarily adopt as general maritime law some other line to eliminate a potentially infinite class of distantly related heirs who may have had little to no contact with the decedent during his lifetime. If courts chose to look to state intestacy laws for this line, then the pre-Moragne uniformity problems would reemerge in a new context.
In conclusion, the Court finds that denying recovery for loss of society in this case promotes greater uniformity and efficiency in maritime law and follows the Supreme Court's and the Fifth Circuit's general assumption that a showing of dependency is required in order to recover under general maritime law for loss of society. Accordingly, defendants' motions to dismiss plaintiff's claims for loss of society are hereby granted.
IV.
The Court is of the opinion that this Order and Reasons involves a controlling issue of law as to which there is a substantial ground for difference of opinion. Because plaintiff's loss-of-society claim constitutes the vast portion of the compensatory damages sought, the Court is of the further opinion that an immediate appeal may materially advance the ultimate termination of this litigation.
Accordingly, the Court hereby certifies this Order and Reasons for immediate appeal under 28 U.S.C. § 1292(b). An application for appeal hereunder shall operate to stay proceedings in this Court. The stay shall become effective upon the filing of a copy of the application for appeal in this Court.
NOTES
[1] The suit was originally brought by "Joan Robienczak Truehart, wife of/and Donald Truehart." Since the filing of the present motions, the Trueharts have amended the complaint to substitute for plaintiff "Donald Truehart, Personal Representative as duly appointed Administrator of the Estate of Victor Truehart, on behalf of Victor A. Truehart, and his heirs, Donald Truehart, Joan Robienczak Truehart, Terri A. Truehart and Thomas J. Truehart." Joan is Victor's mother; Terri, his sister; and Thomas, his brother.
[2] While plaintiff admits that Victor had not lived with his parents for a number of years, he disputes that Victor had "permanently departed from home." Compare Defendants' Statement of Uncontested Facts ("Defendants' Statement"), ¶¶ 5-6, with Plaintiff's Statement in Response to Statement of Undisputed Facts of Defendants ("Plaintiff's Statement"), ¶¶ 5-6. Plaintiff has offered no evidence or explanation for his dispute.
[3] Because the amendment to the complaint described in note 1 was made after the present motions were filed, Defendants' Statement does not indicate whether Victor had been living with either of his siblings or had ever contributed to the financial support of either of them. The amended complaint does not allege such, nor does Plaintiff's Statement or his memorandum in opposition to the present motions raise such as a contested issue, nor has plaintiff offered any evidence that such is true. Accordingly, the Court presumes that neither of Victor's siblings had been living with him or had ever been financially supported by him. See Celotex Corp. v. Catrett, 477 U.S. 317, ___, 106 S. Ct. 2548, 2553-54, 91 L. Ed. 2d 265 (1986); F.R.Civ.P. 56.
[4] In his memorandum, plaintiff cites two district court opinions awarding parents loss-of-society damages for the maritime wrongful death of their unmarried sons. See Complaint of Metcalf, 530 F. Supp. 446, 459-61 (S.D.Tex.1981) (upon a finding of negligence by a fellow crew member and by the vessel manufacturer, awarding mother $10,000 about one-third of total recovery, including recovery for loss of future contributions for her seaman son's death, where he had been an intermittent resident in his mother's home during the last several years of his life and had made intermittent gifts to his retired mother); Palmer v. Ribax, Inc., 407 F. Supp. 974, 979 (M.D.Fla.1976) (awarding nondependent parents $2500 for loss of society of their only, eighteen-year old son, who had always resided with his parents); see also Gomez Sanchez Vda de Gonzales v. Naviero Neptuno S.A., 641 F. Supp. 75, 77-78 (E.D.Tex.1986) (awarding damages for, among other things, loss of society to dependent mother with whom the seaman decedent had been living). In all three cases, the decedents had been living with their parents. Metcalf does not discuss the Jones Act even though the decedent appears to have been a seaman; when the Jones Act is considered, Metcalf appears to conflict with Ivy v. Security Barge Lines, Inc., 606 F.2d 524 (5th Cir.1979) (en banc) (holding that seaman's father may not recover loss-of-society damages for the wrongful death of his Jones Act seaman son who met death in territorial waters as a result of negligence for which his employer was liable), cert. denied, 446 U.S. 956, 100 S. Ct. 2927, 64 L. Ed. 2d 815 (1980). Palmer, 407 F.Supp. at 979, misreads certain dictum in Law v. Sea Drilling Corp., 523 F.2d 793 (5th Cir.1975), denying petition for rehearing from 510 F.2d 242 (5th Cir.1975). In Law, Judge Brown wrote: "wrongful death recovery compensates the decedent's dependents and other survivors," but then added: "The loss [of society]and the damages belongs to the dependents not to the decedent." Id. at 795. Palmer erroneously implies that nonpecuniary damages are the only damages available in a maritime wrongful death action; even if not entitled to loss-of-society damages, nondependent survivors may still maintain wrongful death actions for pecuniary damages such as funeral expenses and, perhaps, loss of services. On Law, see note 5.
This Court notes that none of these district court opinions is binding on this Court and adds that none addresses in detail the issue before this Court.
[5] The court cited two earlier Fifth Circuit opinions where the court, in its words, "allowed awards in one action to spouses and their dependent and non-dependent children." Id. at 213 (citing Skidmore v. Grueninger, 506 F.2d 716, 729 n. 11 (5th Cir.1975) and Law v. Sea Drilling Corp., 510 F.2d 242, 249-50 (5th Cir.), reh'g denied, 523 F.2d 793 (5th Cir.1975)). This dictum is not wholly accurate. In Law, there was no suggestion that the children were nondependents: the decedent rig worker's widow was suing on behalf of herself and her three minor children whom the court inferred, in its discussion on loss of nurture, guidance and control during minority, were dependent on the deceased father. Law, 510 F.2d at 246, 249 n. 19, 250-51. Further, the holding in Law on the award of nonpecuniary damages has been overruled by Higginbotham and Tallentire. In Skidmore, the court reversed the denial of loss of society to, among other persons, the decedent passenger's adult daughter. Skidmore, 506 F.2d at 729 & n. 11. By, among other things, noting that both the Jones Act and DOHSA prohibit loss-of-society damages for wrongful death, the panel in Sistrunk appears to have directly rejected the rationale in Skidmore for allowing recovery to the adult daughter in addition to the widower and his minor children. Further, while this daughter may, in fact, have been nondependent on her deceased mother, the opinion does not expressly indicate such.
[6] Besides Patton-Tully and Sistrunk, only four Fifth Circuit cases that this Court has found have mentioned maritime loss-of-society claims brought by or on behalf of a decedent's parents or siblings; in each case, recovery for wrongful death was denied. See Casaceli v. Martech International, Inc., 774 F.2d 1322, 1331 (5th Cir. 1985) (not addressing a loss-of-society award for the decedent's mother where the defendants had breached no duty to the decedent); Azzopardi v. Ocean Drilling & Exploration Co., 742 F.2d 890, 893-94 (5th Cir.1984) (distinguishing Higginbotham and nonpecuniary wrongful death claims to hold that DOHSA did not bar a decedent's father from bringing a survival action on behalf of the decedent's estate for the decedent's pain and suffering); Kaiser v. Travelers Insurance Co., 487 F.2d 1300, 1301 (5th Cir. 1974) (per curiam) (holding that parents of a minor child may not sue under general maritime law for loss of society from the wrongful death of their child in a boating accident); Hueschen v. Fluor Ocean Services, 483 F.2d 1396, 1397 (5th Cir.1973) (per curiam) (denying loss-of-society award to parents in an unseaworthiness action for wrongful death of their son). The basis for Kaiser and Hueschen, that general maritime law never recognizes loss-of-society claims, has been rejected in Gaudet.
[7] Plaintiff's complaint also contained an unseaworthiness claim under general maritime law. Upon defendants' unopposed motion, the Court dismissed that claim. Minute Entry of September 17, 1987. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3066222/ | FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES EX REL. STEVEN J. No. 12-55396
HARTPENCE,
Plaintiff-Appellant, D.C. No.
2:08-cv-01885-
v. GHK-AGR
KINETIC CONCEPTS, INC.; KCI-USA,
INC.,
Defendants-Appellees.
UNITED STATES EX REL. GERALDINE No. 12-56117
GODECKE,
Plaintiff-Appellant, D.C. No.
2:08-cv-06403-
v. GHK-AGR
KINETIC CONCEPTS, INC.; KCI-USA,
INC., ORDER
Defendants-Appellees.
Filed December 3, 2014
2 U.S. EX REL HARTPENCE V. KINETIC CONCEPTS
ORDER
THOMAS, Chief Judge:
Upon the vote of a majority of nonrecused active judges,
it is ordered that this case be reheard en banc pursuant to
Federal Rule of Appellate Procedure 35(a) and Circuit Rule
35-3. | 01-03-2023 | 10-14-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1605494/ | 416 So. 2d 637 (1982)
Mary Lucy WILLIAMS, Plaintiff-Appellant,
v.
DELTA HAVEN, INC., Defendant-Appellee.
No. 14917.
Court of Appeal of Louisiana, Second Circuit.
June 15, 1982.
Rehearing Denied July 23, 1982.
Raymond L. Cannon, Tallulah, for plaintiff-appellant.
Leroy Smith, Jr., Tallulah, for defendant-appellee.
Before PRICE, HALL, and JASPER E. JONES, JJ.
*638 HALL, Judge.
Plaintiff appeals from the judgment of the trial court sustaining defendant's exception of no cause of action and dismissing with prejudice plaintiff's suit seeking damages for wrongful termination of employment. We affirm.
In assessing the validity of an exception of no cause of action, the well-pleaded allegations of the plaintiff's petition are accepted as true and the issue is whether plaintiff is afforded any remedy at law under the facts as stated in the petition. Pence v. Ketchum, 326 So. 2d 831 (La.1976); Hero Lands Company v. Texaco, Inc., 310 So. 2d 93 (La.1975).
The following facts as alleged in plaintiff's petition form the basis for her claim for damages. Plaintiff began working for defendant as a nurse's aid in October 1979. On May 6, 1980 plaintiff was discharged on the grounds that she failed to turn the patients as required by policy of the nursing home and refused and failed to change the residents as often as required by the nursing home. Plaintiff is not guilty of the acts for which she was fired. Defendant's personnel policy requires that three warnings be given an employee prior to his discharge and that these warnings be acknowledged by the employee in writing; plaintiff never received any warnings prior to her discharge. Plaintiff sustained damages for loss of wages and for humiliation. The alleged grounds for plaintiff's discharge have disparaged and blackened plaintiff's work reputation.
Where an employee's employment is for an indefinite term, the employment is terminable at the will of either the employer or the employee. Pechon v. National Corporation Service, 234 La. 397, 100 So. 2d 213 (1958). Absent a specific contract or agreement establishing a fixed term of employment, an employer is at liberty to dismiss an employee at any time for any reason without incurring liability for the discharge. Jackson v. East Baton Rouge Parish School Board, 393 So. 2d 243 (La.App. 1st Cir. 1980); Jackson v. East Baton Rouge Parish Indigent Defender's Board, 353 So. 2d 344 (La.App. 1st Cir. 1977), writ denied 354 So. 2d 1385 (La.1978); Copeland v. Gordon Jewelry Corporation, 288 So. 2d 404 (La.App. 4th Cir. 1974), writ denied 290 So. 2d 911 (La.1974). The right to terminate indefinite employment at will can, however, be altered by specific contract or agreement. See Morgan v. Avondale Shipyards, 376 So. 2d 516 (La.App. 4th Cir. 1979).
Plaintiff did not allege that she was employed for a specific period of time. Plaintiff's allegation that the defendant failed to comply with its own personnel policy requiring three warnings to an employee prior to discharge does not amount to an allegation that defendant was contractually obligated to her as part of an employment contract to give her the warnings prior to discharge. The petition fails to state a cause of action for wrongful discharge because there is no wrongful discharge when an employee hired without a fixed term or other contractual prerequisite to termination is fired.
Plaintiff argues in the alternative that her petition states a cause of action for defamation. In order to maintain an action in defamation, the following elements must be proven: (1) defamatory words; (2) publication; (3) falsity; (4) malice, actual or implied; and (5) resulting injury. Cangelosi v. Schwegmann Brothers Giant Super Markets, 390 So. 2d 196 (La.1980).
Plaintiff did not allege that any defamatory statements were uttered with malice; nor did she allege publication of defamatory remarks. Consequently, plaintiff's petition does not state a cause of action for defamation.
The trial court was correct in sustaining defendant's exception of no cause of action. Because plaintiff's counsel rejected the trial court's offer to allow him to amend the petition, the court properly rendered judgment dismissing plaintiff's action.
For the reasons assigned, the judgment of the trial court sustaining defendant's exception of no cause of action is affirmed at the cost of plaintiff.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1479729/ | 747 F. Supp. 618 (1990)
INTERSTATE FIRE & CASUALTY COMPANY, an Illinois corporation, Plaintiff,
v.
ARCHDIOCESE OF PORTLAND IN OREGON, an Oregon corporation; Underwriters at Lloyd's, London, subscribing to policies numbered SL 3391/SLC 5411 and SL 3831/SLC 5843; Excess Ins. Co. Ltd., a United Kingdom corporation; Yasuda Fire & Marine Ins. Co. Ltd. (U.K.), a United Kingdom corporation; Terra Nova Ins. Co. Ltd., a United Kingdom corporation; Certain Other Underwriters subscribing to policies SL 3391/SLC 5411 and SL 3831/SLC 5843; and Universal Reinsurance Corp., a New Jersey corporation, successor to Bellafonte Ins. Co., Defendants.
Civ. No. 88-934-FR.
United States District Court, D. Oregon.
September 20, 1990.
*619 Robert J. Ericsson, Mary-Anne S. Rayburn, Martin, Bischoff, Templeton, Ericsson & Langslet, Portland, Or., for plaintiff.
Charles H. Habernigg, P. Conover Mickiewicz, Meyer, Habernigg & Wyse, Portland, Or., for defendant Archdiocese of Portland in Oregon.
Milo Petranovich, Spears, Lubersky, Bledsoe, Anderson, Young & Hilliard, Portland, Or., Richard F. Johnson, Lord, Bissell & Brook, Chicago, Ill., for defendants Underwriters at Lloyd's, London, Excess Ins. Co. Ltd., Yasuda Fire & Marine Ins. Co. Ltd. (U.K.), Terra Nova Ins. Co. Ltd. and Universal Reinsurance Corp.
OPINION
FRYE, District Judge:
The matters before the court are:
1. the motion for summary judgment (# 65) of defendants Underwriters at Lloyd's, London, subscribing to policies numbered SL 3391/SLC 5411 and SL 3831/SLC 5843 (Lloyd's); Excess Ins. Co. Ltd. (Excess); Yasuda Fire & Marine Ins. Co. Ltd. (U.K.) (Yasuda); Terra Nova Ins. Co. Ltd. (Terra Nova); and Universal Reinsurance Corp. (Universal) (collectively, the Lloyd's defendants);
2. the motion for partial summary judgment (# 74) of plaintiff, Interstate Fire & Casualty Company (Interstate);
3. the amended motion for partial summary judgment (# 87) of defendant the Archdiocese of Portland in Oregon (the Archdiocese);
4. the supplementary motion for summary judgment (# 89) of the Archdiocese; and
5. the cross-motion for summary judgment (# 96) of Interstate.
This is an action for a declaratory judgment to determine the rights and obligations of the parties under policies of insurance issued by the plaintiff, Interstate, and the Lloyd's defendants, and an action by Interstate to recover a money judgment for sums it paid to a claimant under these policies. By an order dated August 15, 1989, the court bifurcated and stayed proceedings as to some of the counterclaims asserted against Interstate by the Archdiocese. The counterclaims of the Archdiocese which pertain to coverage and attorney fees remain for decision.
UNDISPUTED FACTS
Interstate is an insurance company organized under the laws of the State of Illinois. The Archdiocese is a non-profit corporation organized under the laws of the State of Oregon. Lloyd's is an association of insurance underwriters located in the United Kingdom. Excess, Yasuda, and Terra Nova are insurance companies organized under the laws of the United Kingdom. Universal is an insurance company organized under the laws of the State of New Jersey.
During the period from July 1, 1978 through July 1, 1984, the Archdiocese was the insured under policies issued by the Lloyd's defendants and under excess insurance policies issued by Interstate. The Lloyd's policies require the Archdiocese to make a self-insured retention payment (SIR payment) toward a claim before payment under the policy is triggered. The SIR payment for which the Archdiocese was responsible during the period 1978-1984 increased from $60,000 during the first year of coverage to $100,000 during the last *620 three years of coverage.[1] The Lloyd's policy provided payment for any amount of a covered claim in excess of the SIR payment to the policy limit of $200,000 per occurrence. The Interstate policy provided coverage for any covered claim against the Archdiocese which exceeded the $200,000 limit of the combined Lloyd's/SIR coverage, up to Interstate's policy limit of $5,000,000 per occurrence.[2]
Relevant portions of the Lloyd's policy provide:
Underwriters hereby agree ... to indemnify the Assured for all sums which the Assured shall be obligated to pay by reason of the liability imposed upon the Assured by law ... for damages ... on account of personal injuries ... arising out of any occurrence happening during the period of Insurance.
....
The term "personal injuries" wherever used herein, shall mean:
(a) Bodily Injury, Mental Injury, Mental Anguish, Shock, Sickness, Disease, Disability, False Arrest, False Imprisonment, False Eviction, Detention, Malicious Prosecution, Discrimination, Humiliation, Invasion of Right of Privacy, Libel, Slander or Defamation of Character; also Piracy and any Infringement of Copyright or of property.
....
The term "occurrence" wherever used herein shall mean an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury, or damage to property during the policy period. All such exposure to substantially the same general conditions existing at or emanating from one location shall be deemed one occurrence.
Lloyd's Policy No. SL 3391, pp. PAC-8 PAC-10.
The applicable language in the Interstate policies for each of the six years provides:
To indemnify the insured for the amount of loss which is in excess of the applicable limits of liability of the underlying insurance inserted in column II of item 4 in the declarations [here $200,000]; provided that this policy shall apply only to those coverages for which a limit of liability is inserted in column I; provided further that the limit of the company's liability under this policy shall not exceed the applicable amount inserted in column I [here $5,000,000].
The provisions of the immediate underlying policy are incorporated as a part of this policy except for any obligation to investigate and defend and pay for costs and expenses incident to the same, the amount of the limits of liability, and "other insurance" provision and any other provisions therein which are inconsistent with the provisions of this policy.
Interstate Policy Jacket, p. 2, Part I.
It is hereby understood and agreed that the definition of loss is amended to read as follow[s]:
"Loss" means the sums paid as damages in settlement of a claim or in satisfaction of a judgment for which the insured is legally liable, after making deductions for all recoveries, salvages and other insurances (whether recoverable or not) other than the underlying insurance and excess insurance purchased specifically to be in excess of this policy. "Loss" includes investigation, adjustment, defense or appeal costs, and expenses, costs and expenses incident to any of the same, notwithstanding that the underlying insurance may provide insurance for such costs and expenses.
Interstate Policy, p. 5, Endorsement No. 3.
It is, therefore, agreed that the company shall act in concert with all other interests *621 concerned, including the insured, in the enforcement of any subrogation rights or in the recovery of amounts by any other means.
Interstate Policy Jacket, p. 4, Condition 4.
The company at its own option may, but is not required to, participate in the investigation, settlement or defense of any claim or suit against the insured.
Interstate Policy Jacket, p. 4, Condition 2.
The Grgich Claim
In June, 1983, Father Thomas P. Laughlin, a Roman Catholic priest in the Archdiocese, was arrested for the sexual abuse of children. Father Laughlin entered a plea of guilty and was sentenced to jail.
In 1985, Fred Grgich filed an action in the Circuit Court of the State of Oregon for the County of Multnomah against the Archdiocese and Father Laughlin (the Grgich action). The relevant complaint, the second amended complaint, alleges claims for 1) sexual assault and battery during the period from 1974 through 1985; 2) negligence on the part of the Archdiocese in not taking measures to prevent the misconduct of Father Laughlin; 3) breach of trust; and 4) outrageous intentional conduct.
The claims against the Archdiocese and Father Laughlin in the Grgich action were settled for $500,000. The parties to the current action agree that the settlement amount of $500,000 was a reasonable settlement of the claims in the Grgich action. The settlement and defense costs were paid in the following manner:
$50,000 from Father Laughlin
$74,997 from the Archdiocese ($18,315.19
paid to Grgich; remainder
to fees)
$125,000 from Lloyd's
$346,909.54 from Interstate ($306,684.81
paid directly to Grgich, and
$40,224.73 paid to the Archdiocese
for defense costs)
The Archdiocese was negligent from approximately July 15, 1979 through June, 1983 (policy years 2, 3, 4 and 5) in failing to supervise Father Laughlin and/or remove him from a position in which he had the opportunity for sexual abuse of minors such as Grgich. Laughlin did not have sexual contact with Grgich in policy year 1, but such contact took place in policy years 2, 3, 4 and 5. There is no factual basis upon which to divide the personal injury or damage to Grgich among the various policy years.[3]
CONTENTIONS OF THE PARTIES
Interstate contends that as a matter of law there were one or more "occurrences" (as that term is defined in the insurance policies at issue) during each of the four years, 1979-1983, for which the Archdiocese was legally liable for the misconduct of Father Laughlin with respect to Grgich. It claims that it is entitled to reimbursement for all sums it paid toward the settlement of the Grgich claim because the underlying SIR payment made by the Archdiocese and the limits of the Lloyd's policies would not have been exhausted so as to trigger coverage under Interstate's policy.
Interstate's argument centers on the interpretation of the term "occurrence" as used in its policy and the policy of Lloyd's. Interstate contends that each act of sexual molestation by Father Laughlin constitutes an occurrence under its policy. In support of its position, Interstate points to the fact that the Archdiocese entered into a new insurance contract for each policy year. Interstate also argues that the injury to Grgich was indivisible with respect to the number of occurrences, and therefore the amount of damages awarded should be divided equally among the four years in *622 which the molestations occurred. Under Interstate's theory, coverage under Interstate's excess insurance policy would not be triggered. The Grgich claim would then be paid as follows:
Amount paid by Amount paid Amount paid
Year Archdiocese (SIR) by Lloyds by Interstate
1979-80 $ 75,000 $50,000 $0
1980-81 $ 75,000 $50,000 $0
1981-82 $100,000 $25,000 $0
1982-83 $100,000 $25,000 $0
Lloyd's and the Archdiocese contend that as a matter of law the acts giving rise to the Grgich claim constitute a single occurrence within the terms of the policies of both Interstate and Lloyd's and that the single occurrence which triggered coverage was the negligence of the Archdiocese in failing to properly supervise or remove Father Laughlin. They contend that Interstate is not entitled to reimbursement of any of the money expended in settlement of the Grgich claim.
APPLICABLE LAW
Summary judgment is appropriate only where "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The initial burden is on the moving party to point out the absence of any genuine issue of material fact. Once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986).
On a motion for summary judgment, all reasonable doubt as to the existence of a genuine issue of fact should be resolved against the moving party. Hector v. Wiens, 533 F.2d 429, 432 (9th Cir.1976). Where different inferences can be drawn, summary judgment is inappropriate. Sankovich v. Life Ins. Co. of N. Am., 638 F.2d 136, 140 (9th Cir.1981).
ANALYSIS AND RULING
The primary rule for the interpretation and construction of insurance contracts is to ascertain and give effect to the intentions of the parties to the contract. Totten v. New York Life Ins. Co., 298 Or. 765, 770, 696 P.2d 1082 (1985). Where a policy contains ambiguous language, any reasonable doubt as to the meaning of the language of the policy must be resolved against the insurance company. Travelers Indem. Co. v. United States, 543 F.2d 71 (9th Cir.1976). In this case, the parties dispute the meaning of the term "occurrence" in the policies at issue. Resolution of this dispute depends upon an analysis of the language of the policies in the context of the fundamental rules of contract construction and pertinent case law.
The policies of both Interstate and Lloyd's can be fairly characterized as occurrence policies. Occurrence policies indemnify the insured for acts or occurrences which take place within the policy period. Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56, 59 (3d Cir.1982). The interpretation of occurrence policies has been the subject of numerous court decisions. See Barrett v. Iowa Nat'l Mut. Ins. Co., 264 F.2d 224 (9th Cir.1959); Maurice Pincoffs Co. v. St. Paul Fire and Marine Ins. Co., 447 F.2d 204 (5th Cir.1971). The majority of courts which have considered this question subscribe to the "cause theory" to determine whether more than one occurrence has taken place. American Indem. v. McQuaig, 435 So. 2d 414 (Fla.Dist. Ct.App.1983). Application of the cause theory depends upon whether there was one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damage for which the claimant seeks *623 coverage. The question can be stated as: Was there a "single force which once set in motion caused multiple injuries?" American Indem., 435 So.2d at 416.
The cause of an occurrence is the act or event which caused the injury exposing the insured to liability. Michigan Chem. Corp. v. American Home Assur. Co., 728 F.2d 374, 382 (6th Cir.1984). Interstate argues that the Archdiocese is liable for the conduct of Father Laughlin on two principal grounds: direct liability for negligently supervising and failing to remove Father Laughlin from his position, and/or vicarious liability in its capacity as the employer of Father Laughlin.[4] Interstate contends that under either theory, each molestation of Grgich by Father Laughlin is a separate act which gives rise to a separate claim against the Archdiocese. Lloyd's and the Archdiocese contend that a single act, the continuous negligence of the Archdiocese in retaining and supervising Father Laughlin, caused the Archdiocese's exposure to liability.
Policies similar to those at issue here have been considered by other courts. In Appalachian Ins. Co. v. Liberty Mut. Ins. Corp., 507 F. Supp. 59 (W.D.Pa.1981), aff'd, 676 F.2d 56 (3d Cir.1982), the court was presented with an insurance policy containing a definition of the word "occurrence" identical to that contained in the policies in this case. Liberty, the insured, had incurred losses in the settlement of class action litigation involving charges of sex discrimination based on certain employment policies it had adopted.
The Court of Appeals affirmed the district court's holding that the original act of adopting the employment policies caused the harm which exposed Liberty to liability, and thus constituted the single occurrence triggering policy coverage. In so holding, the district court had rejected the contention of Appalachian, the insurer, that because multiple injuries to various claimants resulted from the employment policies there were multiple occurrences for the purpose of determining coverage. The district court emphasized that the correct analysis for ascertaining the number of occurrences involved a determination of the underlying circumstances resulting in the claim for damages rather than the number of individual injuries resulting in claims. 507 F.Supp. at 62.
The Court of Appeals expanded on the district court's finding, holding that the fact that there were multiple injuries of differing magnitude which extended over a period of time did not preclude the existence of a single occurrence. The court concluded that the term "occurrence" as used in the policy contemplated the possibility of multiple and disparate impacts which might extend over a period of time all emanating from a single cause. 676 F.2d at 61. This reasoning applies to the policies at issue here. The wording of the relevant policies is that "exposure to substantially *624 the same general conditions existing at or emanating from one location shall be deemed one occurrence." Lloyd's Policy No. SL 3391, p. PAC-10. Grgich was exposed to substantially the same general condition in the form of an abusive relationship, and this condition emanated from one location the Archdiocese. The fact that Grgich suffered multiple injuries over a four-year period does not negate the finding of a single causal occurrence.
Both Interstate and Lloyd's cite Michigan Chem. Corp., 728 F.2d 374 (6th Cir. 1984), in support of their opposing positions. In that case, Michigan Chemical Corp. (MCC), the insured, accidentally shipped a toxic flame retardant to a feed dealer rather than the feed supplement which it intended to ship. The dealer, unaware of the error, mixed the flame retardant with regular feed and sold the product to dairy farmers. Following some complaints by farmers, the error was detected and thousands of farm animals who had consumed the contaminated feed were destroyed. The affected owners filed hundreds of claims against the dealer and MCC.
The court held that the misshipment of the flame retardant was the single occurrence or act which caused liability for the purpose of establishing coverage. Additional misshipments of flame retardant would have created new liabilities, and thus would be separate occurrences. However, all claims arising from damages caused by the one misshipment were held to have stemmed from one uninterrupted cause.
The case before this court is analogous. The continuous negligent supervision of Father Laughlin by the Archdiocese was the act which exposed the Archdiocese to liability, just as the negligent misshipment of flame retardant was the act which exposed MCC to liability. Each time this negligent supervision presented Father Laughlin with the opportunity to molest a different child, the Archdiocese was exposed to new liability. However, all of the damages caused to one child by Father Laughlin represent only one occurrence because each time Father Laughlin molested the same child, the Archdiocese was not exposed to new liability. Interstate's contention that each molestation of every child constituted an occurrence if superimposed on the facts of Michigan Chemical would have resulted in a holding that each individual claim constituted an occurrence. This result was clearly rejected by the court.
A factual situation more similar to this case was presented to the court in Aetna Casualty & Surety Co. v. Medical Protective Co., 575 F. Supp. 901 (N.D.Ill.1983). A pediatrician prescribed a steroid-containing ointment for a patient suffering from conjunctivitis. Continuous use of the ointment was known to cause glaucoma. The patient received six refills of her prescription during six return visits to the pediatrician's office over a period of two years. The pediatrician never re-examined her for the possibility of incipient glaucoma or examined her eyes in any way. The patient's use of the ointment ultimately caused blindness.
The plaintiff, Aetna, argued that each prescription was the result of an independent cause because the pediatrician regained control over the situation each time the patient visited his office. The court disagreed and held that while the pediatrician may have had the opportunity to regain control during the subsequent office visits, the fact that he never re-examined the patient demonstrated that he had failed to exercise that opportunity. Only one decision was made the original decision to prescribe the ointment and any subsequent refills of the prescription simply implemented that prior decision. 575 F.Supp. at 903.
Similarly, the Archdiocese made one decision or omission the decision to hire Father Laughlin or the omission to properly supervise or remove him. The continuous negligence implemented that decision or omission. Father Laughlin made one decision with respect to Grgich the decision to sexually abuse him, and subsequent molestations implemented that decision to sexually abuse him.
Although each molestation undoubtedly contributed to Grgich's indivisible injury, *625 these individual acts did not expose the Archdiocese to new liability, and thus are not occurrences triggering coverage. Instead, a single but continuous act was the proximate cause of the injury to Grgich, and this single but continuous act gave rise to only one claim. Any direct liability on the part of the Archdiocese stems from its negligence in supervising and failing to remove Father Laughlin from his position. Although this negligence was present in each of the policy years at issue, it was continuous negligence, and not a number of discrete episodes of negligence. This continuous negligence was the single proximate cause of the resulting injury to Grgich and constitutes a single occurrence under the terms of both the policies of Interstate and Lloyd's.[5]
Having concluded that the injuries to Grgich were the result of a single occurrence, the court turns to the question of coverage for injuries resulting from that occurrence. The determination of when an occurrence happens for purposes of establishing coverage must be made by reference to the time when the injurious effects of the occurrence took place. Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d at 61-62. For coverage to exist, the personal injury resulting from an accident or occurrence must take place within the policy period. Id. The parties agree that Grgich's personal injury happened in 1979, when Father Laughlin first molested him. The Archdiocese was insured under an Interstate policy at that time, and thus coverage exists.
The court finds, based on undisputed facts, that the damages arising from the Grgich complaint were the result of a single occurrence. The resulting injury occurred in the second year of coverage by Interstate. Interstate is not entitled to reimbursement of the money it spent in settlement of the Grgich claim. Because of this holding, the court need not reach the question of whether Interstate properly reserved its right to challenge coverage.
CONCLUSION
The motion for summary judgment of the Lloyd's defendants (# 65) is granted.
The motion for partial summary judgment of Interstate (# 74) is denied.
The amended motion for partial summary judgment of the Archdiocese (# 87) is rendered moot.
The supplementary motion for summary judgment of the Archdiocese (# 89) is granted.
The cross-motion for partial summary judgment of Interstate (# 96) is rendered moot.
NOTES
[1] The SIR payment of the Archdiocese for each of the six policy years was: $60,000 in 1978-1979, $75,000 in 1979-1980, $75,000 in 1980-1981, and $100,000 in the three policy years 1982-1984. Each policy year began on July 1 and extended to July 1 of the following year.
[2] The Archdiocese paid premiums to Interstate of $39,900 in 1978-79, $37,995 in 1979-80, $39,995 in 1980-81, $38,500 in 1981-82, $38,500 in 1982-83, and $38,500 in 1983-84.
[3] In addition to Grgich, six other claimants made claims against the Archdiocese based on the behavior of Father Laughlin. Five of these claims were settled without exceeding the limits of the underlying Lloyd's policies so that coverage under the excess insurance policy of Interstate was not triggered. The sixth claim was settled for $210,882.37, with $10,000 provided by Interstate. This claim was based on only one incident and did not preciptitate any dispute regarding coverage under the Interstate policy.
Lloyd's treated each of these claims as a single occurrence, the damages from which were allocated to the policy period in which the first explicit sexual activity occurred. Each of these claims was settled prior to the settlement of the Grgich action.
[4] Interstate alleges that Grgich could have prevailed against the Archdiocese in a claim based on respondeat superior, citing the case of Erickson v. Christenson, 99 Or.App. 104, 781 P.2d 383 (1989). In Erickson, the plaintiff brought an action against her pastor and the church which employed him claiming that she sustained injuries when the pastor manipulated and seduced her through a counseling relationship. The court held that because the plaintiff's claim was that the priest abused his position as her pastor to seduce her, the question of whether the alleged wrongful act occurred within the scope of his employment was a factual issue. Erickson, 99 Or.App. at 109 n. 3, 781 P.2d 383.
This court is not persuaded that Erickson controls this case. The successful claimant under the theory of respondeat superior must necessarily establish that the complained of acts occurred while the employee was acting within the scope of his/her employment. The Oregon Supreme Court recently stated three requirements necessary to conclude that an employee was acting within the scope of employment: the act must have occurred substantially within the time and space limits authorized by the employment; the employee must have been motivated, at least partially, by a purpose to serve the employer; and the act must be of a kind which the employee was hired to perform. Chesterman v. Barmon, 305 Or. 439, 442, 753 P.2d 404 (1988). Application of these criteria to the facts in this case leads the court to conclude that the sexual molestation of Grgich by Father Laughlin was not motivated by a purpose to serve the employer, and was not of a kind which Father Laughlin was hired to perform, making it unlikely that Grgich could have prevailed on such a claim.
[5] Assuming that Grgich could establish vicarious liability on the part of the Archdiocese, the wrongful acts of Father Laughlin which form the basis for this vicarious liability were the continuing abusive relationship which he established with Grgich. The initiation of this relationship would be a single occurrence under the policies of Interstate and Lloyd's. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1228909/ | 385 S.E.2d 173 (1989)
Sean P. SMITH, Plaintiff,
v.
SELCO PRODUCTS, INC., Defendant.
No. 8926SC79.
Court of Appeals of North Carolina.
November 7, 1989.
*174 Cannon & Blair by Bentford E. Martin and Paul A. Reichs, Charlotte, for plaintiff-appellant.
Golding, Meekins, Holden, Cosper & Stiles by Frederick C. Meekins, and Rodney A. Dean, Charlotte, for defendant-appellee.
Blanchard, Twiggs, Abrams & Strickland by Douglas B. Abrams, Raleigh, for North Carolina Academy of Trial Lawyers, amicus curiae.
ARNOLD, Judge.
The only issue we will review is whether the basis of the summary judgment order for defendant, that the plaintiff was contributorily negligent, is supported by the records, briefs, and other arguments. Selco argues that plaintiff was guilty of negligence under two separate sub-parts of N.C. G.S. § 99B-4: that his failure to obey a cautionary decal affixed to the baler constituted contributory negligence under N.C. G.S. § 99B-4(1); and that by reaching into the baler while the platen was descending, plaintiff failed to exercise reasonable care under the circumstances, in violation of N.C.G.S. § 99B-4(3).
N.C.G.S. § 99B-4 reads in pertinent part:
Injured parties' knowledge or reasonable care.
No manufacturer or seller shall be held liable in any product liability action if:
(1) The use of the product giving rise to the product liability action was contrary to any express and adequate instructions or warning delivered with, appearing on, or attached to the product or on its original container or wrapping...
* * * * * *
*175 (3) The claimant failed to exercise reasonable care under the circumstances in his use of the product, and such failure was a proximate cause of the occurrence that caused injury or damage to the claimant.
We are asked here to review the application of these two sections of the statute as they apply to a motion for summary judgment. Rule 56 of N.C.Rules of Civil Procedure provides that summary judgment will be granted "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 any party is entitled to judgment as a matter of law." N.C.G.S. § 1A-1, Rule 56. A moving party may prevail if it meets the burden (1) of proving an essential element of the opposing party's claim is nonexistent, or (2) of showing through discovery that the opposing party cannot produce evidence to support an essential element of his or her claim (citations omitted). Generally, this means that the moving party is entitled to judgment as a matter of law where on the "undisputed aspects of the opposing evidential forecasts," there is no genuine issue of fact. 2 McIntosh, N.C.Practice and Procedure § 1660.5 (2d ed. Supp.1970).
Nevertheless, it is widely acknowledged that certain claims or defenses are not well suited to summary judgment. For example, summary judgment is rarely appropriate in a negligence case. City of Thomasville v. Lease-Afex, Inc., 300 N.C. 651, 268 S.E.2d 190 (1980). This is because the determination of essential elements of these claims or defenses to these claims are within the peculiar expertise of the fact finders. Moore v. Fieldcrest Mills, Inc., 296 N.C. 467, 251 S.E.2d 419 (1979); 10A Wright, Miller, & Kane, Federal Practice and Procedure § 2729 (2d ed. 1973). Similarly, contributory negligence is a jury question unless the evidence is so clear that no other conclusion is possible. City of Thomasville, 300 N.C. at 658, 268 S.E.2d at 195-196; Cowan v. Laughridge Const. Co., 57 N.C.App. 321, 326, 291 S.E.2d 287, 290 (1982). "[P]roximate cause is ordinarily a question of fact for the jury, to be solved by the exercise of good common sense in the consideration of the evidence of each particular case." W. Prosser, Handbook of the Law of Torts § 45, at 290 (4th ed. 1971); see Williams v. Power & Light Co., 296 N.C. 400, 403, 250 S.E.2d 255, 258 (1979).
In the present action, reasonable men could differ as to whether plaintiff exercised prudence in his operation of the baler. Because the evidence will support a finding that defendant's negligence was the proximate cause of plaintiff's injuries, the court erred in granting summary judgment in the defendant's favor.
Contributory negligence was not established in this case as a matter of law because Smith violated a warning attached to the baler. A manufacturer must properly inform users of a product's hazards, uses, and misuses or be liable for injuries resulting therefrom under some circumstances. Millikan v. Guilford Mills, Inc., 70 N.C. App. 705, 320 S.E.2d 909 (1984), cert. denied, 312 N.C. 798, 325 S.E.2d 631 (1985). An issue arises here as to whether or not latent hazards existed in this baler, which rendered the attached warning inadequate.
Evidence indicates that Selco may not have used reasonable care in designing its riding gate baler. In Corprew v. Geigy Chemical Co., 271 N.C. 485, 492, 157 S.E.2d 98, 103 (1967), the North Carolina Supreme Court stated:
As a general rule a manufacturer is under a duty to make an article carefully where its nature is such that it is reasonably certain to place life and limb in peril where negligently made, and he is liable to a third person for an injury resulting from a failure to perform this duty.
At the time Selco designed its riding-gate baler, the company, although under a duty to do so, did not inform itself about what safety designs and methods were available in the industry. See Jenkins v. Helgren, 26 N.C.App. 653, 217 S.E.2d 120 (1975). Also an issue arises here concerning the adequacy of Selco's testing of its product. A manufacturer is under a duty to make reasonable tests to discover any latent hazards. *176 See Cockerham v. Ward and Astrup Co. v. West Co., 44 N.C.App. 615, 262 S.E.2d 651, disc. rev. denied, 300 N.C. 195, 269 S.E.2d 622 (1980).
According to evidence provided in the record, normal operation of the Selco's riding-gate baler frequently led to malfunctions of the safety tapeswitch. Paul Levering, a Food Lion maintenance mechanic, stated in his deposition that tapeswitches on the Selco balers frequently broke because of the way they were designed, located, and installed by Selco. He had replaced several defective tapeswitches, including tapeswitches on the baler that injured plaintiff. Levering found the tapeswitch wires to be too short, which caused them to break or pull out of the tapeswitch. Jim Tonseth, Food Lion's former manager of maintenance, stated, "there were numerous instances where the tapeswitch wires, as designed and located by Selco, either broke or otherwise failed to function.... [T]he failures appeared to be caused by either the shortness of the tapeswitch wires, or their location along the outside of the baler."
Compounding this problem, the baler's design did not include a mechanism to warn bale operators when the tapeswitch sensor was not functioning. In his deposition, Forrest Wildes, president of Selco Products, recognized that there was no way for an operator to know that the tapeswitch was not working without operating the machine. Yet, no warning concerning this extremely dangerous aspect of the baler appeared on the machine. In addition, "fail safe" technology, which would automatically shut the baler off and not allow its operation at all if the tapeswitch sensor circuit was broken, was available in the industry and in use before Selco manufactured its first riding gate baler. The manufacturer of a product has the duty to provide adequate safety devices on its products. If a product is inherently dangerous due to its design, then at the least the safety precaution of an adequate warning that is reasonably commensurate with the dangers involved must be provided. See Corprew v. Geigy Chemical, 271 N.C. 485, 157 S.E.2d 98.
The record also shows that at the time of accident the Selco riding-gate baler violated both OSHA and industry standards. Michael T. Peak, an OSHA investigator, stated in an affidavit concerning his report on Smith's accident:
[I]t was my finding that the Selco baler on which Mr. Smith was injured did not comply with North Carolina or Federal OSHA regulations. Specifically, I found the baler to be in violation of OSHA Section 1910.212(a)(3)(ii), which requires that the baler, as operated in the employer's workplace, be designed and constructed as to prevent the operator from having any part of his body in the danger zone during the operating cycle. Because the subject Selco baler was designed so that the gate to the bale chamber rides down with the ram, the baler could be operated without the gate in a closed position. Since the baler remained in this condition as operated at the Food Lion store, it was in violation of the applicable OSHA standard.
Selco apparently knew several years before the Smith accident that their riding-gate baler violated these standards. In 1982, industry standards changed, requiring that all balers be equipped with a door on the front that must be pulled down, sealing off the bale chamber from access by the operator before the machine would operate. As a result, Selco abandoned its riding-gate design, but did not recall those balers already in the market. When the industry standard changed, Selco developed a "retro-fit" package to replace the riding gates on its older models with "pull down" gates, but the company made no systematic effort to retrofit the riding-gate balers it had sold Food Lion. After Smith's accident, Food Lion hired an independent contractor to remove the safety gates from all of its riding-gate balers and replace them with pull down gates.
A manufacturer does not completely discharge its duty to warn simply by providing some warnings of some dangerous propensity of its product at the time of sale. A continuing duty exists to provide post-sale warnings of any deficiencies it *177 learns exists in the product to users. A manufacturer may be held liable for negligence if he "sells a dangerous article likely to cause injury in its ordinary use and the manufacturer fails to guard against hidden defects and fails to give notice of the concealed danger." Davis v. Siloo Inc., 47 N.C.App. 237, 244, 267 S.E.2d 354, 359, disc. rev. denied, 301 N.C. 234, 283 S.E.2d 131 (1980).
It would be improper for us to ignore this type of evidence concerning the deficient design and warnings of the Selco baler and hold the plaintiff contributorily negligent at the summary judgment stage of this proceeding for failure to heed the attached decal. See Fieldcrest Mills, 296 N.C. 467, 251 S.E.2d 419; City of Thomasville, 300 N.C. at 651, 268 S.E.2d 190.
We now turn to defendant's second contention that Smith did not act as a reasonably prudent person under the circumstances. Again, we disagree with defendant that plaintiff was contributorily negligent as a matter of law. Specifically, a question arises whether this riding-gate baler could be efficiently and effectively operated without the operators at times placing their hands in the bale chamber. Six Food Lion employees, who frequently operated the baler before Smith's injury, signed affidavits stating that it was regular practice for workers to place their hands in the bale chamber during operation, and that doing so was necessary to prevent cardboard boxes from falling out during its operation. Three other employees had reached into the chamber while the baler was operating to pull out foreign objects prior to Smith's injury.
Despite defendant's numerous contentions, it appears clear that Smith and the other bale operators relied on the tapeswitch safety sensor as an additional stop button during the operation of the baler. The actual stop button was located on the side of the baler, out of reach for operators standing at the front left of the baler. In his deposition, Smith testified he had witnessed other bale operators reaching into the bale chamber, and that he had never known the tapeswitch to fail nor was he aware of its poor maintenance history.
As N.C.G.S. § 99B-4(3) of the Products Liability statute indicates, the claimant's behavior "under the circumstances" must be considered in determining contributory negligence. Reaching into the bale chamber to push in boxes and grab objects inappropriate for baling was clearly the custom among the Food Lion workers. Food Lion management was aware of this practice by its workers. In North Carolina, a servant's conduct "which otherwise might be pronounced contributory negligence as a matter of law is deprived of its character as such if done at the direction or order of defendant [employer]." Cook v. Tobacco Co., 50 N.C.App. 89, 96, 272 S.E.2d 883, 888, disc. rev. denied, 302 N.C. 396, 279 S.E.2d 350 (1981). "[I]f a rule has been habitually violated to the employer's knowledge, or violated so frequently and openly for such a length of time that in the exercise of ordinary care he should have ascertained its nonobservance, the rule is waived or abrogated." Swaney v. Peden Steel Co., 259 N.C. 531, 543, 131 S.E.2d 601, 610. It must be noted another sticker was attached to the front of the baler. It read: "YOUR STORE LOSES MONEY ON FREIGHT IF EACH BALE IS NOT PACKED AS SOLIDLY AS POSSIBLE," reminding Food Lion workers they should prevent foreign objects from becoming packed into the bales.
While the employer is not the defendant in this case, the logic behind waiving the rule when a servant sues a master is also applicable when determining whether contributory negligence occurred under the "circumstances" here. All of Smith's co-workers reached into the bale chamber to keep the machine running efficiently, and in doing so, these workers relied on the tapeswitch sensor to protect them. In part, the provocation for this workplace practice can be traced to the design of the Selco baler.
These factors: questions about the design of the baler and its violation of OSHA and industry standards, and the workplace practice this design provoked create questions *178 of whether the warning sticker was adequate and whether Smith's action was contributory negligence. Other reasonable inferences may be drawn from the circumstances of this accident. When such inferences are possible, summary judgment based on plaintiff's contributory negligence is not correct. Dalrymple v. Sinkoe, 230 N.C. 453, 53 S.E.2d 437 (1949); Graham v. R.R., 240 N.C. 338, 82 S.E.2d 346 (1954).
The order of the trial court is reversed and the case is remanded.
Reversed and remanded.
BECTON and COZORT, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1369020/ | 793 F. Supp. 1438 (1992)
John Vincent WEBER, James M. Ramstad, David F. Durenberger, Plaintiffs,
v.
William M. HEANEY, Bruce D. Willis, Vanne O. Hayes, Elsa M. Carpenter, Douglas R. Ewald, Emily Ann Staples, in their capacities as members of the Minnesota Ethical Practices Board; Minnesota Ethical Practices Board; Michael A. McGrath, in his capacity as Minnesota State Treasurer; Dorothy A. McClung, in her capacity as Minnesota Commissioner of Revenue, Defendants.
Civ. 4-91-1009.
United States District Court, D. Minnesota, Fourth Division.
June 10, 1992.
*1439 Douglas A. Kelley, Julie L. Levi, Kelley Law Office, Minneapolis, Minn., for plaintiffs.
Hubert H. Humphrey, III, Minnesota Atty. Gen., and John R. Tunheim, Chief Deputy Atty. Gen., Jocelyn F. Olson, Asst. Atty. Gen., St. Paul, Minn., for defendants.
MEMORANDUM AND ORDER
MacLAUGHLIN, Chief Judge.
This matter is before the Court on plaintiffs' motion for summary judgment. The motion will be granted.
FACTS
This is an action challenging the constitutionality of the Minnesota Congressional Campaign Reform Act (Campaign Reform *1440 Act), Minn.Stat. §§ 10A.40-.51. Plaintiffs are current members of the United States Congress. Compl. ¶ 9-11; Aff. of James M. Ramstad ¶ 1; Aff. of John V. Weber ¶ 1. James M. Ramstad is the United States Representative for the Third District of Minnesota. John Vincent Weber is the United States Representative for the Second District of Minnesota. David F. Durenberger is a United States Senator for the State of Minnesota. Each defendant, who is sued in his or her official capacity, is responsible for enforcing various provisions of the Campaign Reform Act. Defendants William M. Heaney, Bruce D. Willis, Vanne O. Hayes, Elsa M. Carpenter, and Emily Ann Staples are members of the Minnesota Ethical Practices Board (the Board). Compl. ¶ 12. Defendant Douglas R. Ewald is a former member of the Board, who has since been replaced by Douglas H. Silers. Defendant Michael A. McGrath is the Treasurer of the State of Minnesota. Defendant Dorothy A. McClung is the Minnesota Commissioner of Revenue.
Faced with what it perceived as public perception of corruption in federal congressional elections, the Minnesota Legislature enacted the Campaign Reform Act in 1990. See 1990 Minn.Laws, c. 608, art. 4 (codified at Minn.Stat. §§ 10A.40-.51). Specifically, the legislature made the following findings:
1) the spending on campaigns for congressional office has increased to a disgraceful level and continues to rise;
2) the need to raise campaign contributions has caused Minnesota congressional candidates to aggressively solicit contributions from special interest groups and out-of-state sources, which diverts them from meeting Minnesota voters and publicly debating the pressing issues of the day;
3) the current practice of congressional campaign contributions and spending, along with current scandals in Washington, D.C., have created a public perception of political corruption and undue influence by wealthy special interests;
4) the United States Congress has debated necessary reforms for years but has failed to act, and the Federal Election Campaign Act does not provide a means to encourage congressional candidates to voluntarily limit the amount of money they spend in campaigns; and
5) as a consequence, Minnesota's representation in Congress is jeopardized and the public's confidence in its elected congressional representatives is weakened.
Minn.Stat. § 10A.40, subd. 1.
To combat these problems, the legislature enacted a statutory scheme designed to encourage congressional candidates to voluntarily limit the amount of money they spend on campaigns. See Minn.Stat. § 10A.40, subd. 2(a). In particular, the Campaign Reform Act was intended to address these perceived problems 1) by establishing voluntary limitations on campaign spending; 2) by providing an alternative source of campaign financing, namely, public funding; 3) by affording candidates the opportunity to focus on public issues rather than fund-raising; and 4) by reducing the influence of special interest groups and out-of-state interests. See Minn.Stat. § 10A.40, subd. 2(b)(1), (2), (3), (4). Although the legislature intended to supplement federal law, it did not "intend to enact legislation that is in conflict with existing federal law," nor did it intend "to regulate where specific federal laws have already been enacted." Minn.Stat. § 10A.40, subd. 3.
To effectuate its purposes, the Campaign Reform Act establishes a system that allows for public funding of eligible congressional candidates who have signed agreements to limit campaign expenditures. As part of this public funding system, the Campaign Reform Act first sets up several eligibility requirements. Minn.Stat. § 10A.43, subd. 1(a), (b). Once a congressional candidate has met these eligibility requirements, he or she may choose to sign an agreement limiting campaign expenditures. Minn.Stat. § 10A.43, subd. 2. For an election year, the expenditure limits, which are adjusted for inflation, are $3,400,000 for Senate candidates and $425,000 for House candidates. Minn.Stat. § 10A.44, subd. 1. For a post-election year, the spending limits are twenty percent *1441 of the election year figures, or $680,000 for Senate candidates and $85,000 for House candidates, again adjusted for inflation. Minn.Stat. § 10A.44, subd. 4 & subd. 2.
Candidates who fulfill these eligibility requirements may receive public funding from general state funds of up to twenty-five percent of the expenditure limit, provided that they provide evidence to the Board of contributions equal to the amount of funding sought. Minn.Stat. §§ 10A.43, subd. 1(a), (b) & 10A.48. However, both public funding and these expenditure limitations are conditional. If all the congressional candidates for an office agree to be bound by the limits, no candidate for that office will receive public funding, but all such candidates will be bound by the limits. Minn.Stat. § 10A.44, subd. 5(b). If all major political party candidates for an office agree to be bound by the limits, the major party candidates will not receive public funding, but once again all such candidates will be bound by the limits. Minn.Stat. § 10A.44, subd. 5(c). However, if any congressional candidate agrees to be bound by the limits, but has a major party opponent who declines to be bound by the limits, the candidate who agrees to be bound will receive public funding and will not be bound by the limits. Minn.Stat. § 10A.44, subd. 5(d). Thus, the expenditure limitations and public financing are interrelated.
The Campaign Reform Act also imposes stringent penalties on those who breach agreements to limit campaign spending. Candidates who permit their authorized committees to make aggregate expenditures on their behalf in excess of the expenditure limits are subject to civil fines of up to four times the amount by which the expenditures exceed the limit. Minn.Stat. § 10A.47, subd. 1. The Board is authorized to enforce these spending limits. See Minn.Stat. § 10A.47, subds. 3 & 4.
In addition to regulating congressional candidates themselves, the Campaign Reform Act in certain instances affects contributors to congressional campaigns. In particular, contributors to the campaigns of candidates who agree to abide by the spending limits are entitled to a state refund for their contribution. Minn.Stat. § 10A.43, subd. 5. If a candidate files a signed expenditure limitations agreement, he will receive a supply of official refund receipt forms from the Board to be given to contributors. Id. Contributors can then in turn file the receipt form and receive a direct state refund of up to $100 per couple or $50 per individual. See Minn.Stat. § 290.06, subd. 23.
In two areas the Campaign Reform Act tracks federal law. First, it expressly provides that Minnesota congressional candidates are bound by the federal limits on contributions and loans. See Minn.Stat. §§ 10A.45 & .47, subd. 2. Second, the Campaign Reform Act expressly states that the expenditures of political parties on behalf of congressional candidates, as well as all disclosure and reporting requirements, are also governed by federal law. See Minn.Stat. §§ 10A.46 & .51. As noted above, the legislature intended the Act to supplement, not contradict, existing federal law.
To date, seven candidates for congressional office have signed and filed expenditure limitation agreements with the Board. Aff. of Mary Ann McCoy ¶ 2.[1] These candidates have also requested and received official contribution receipt forms to distribute to contributors. Id. ¶ 3.
Plaintiffs filed their complaint on December 18, 1991, seeking a declaration that the Campaign Reform Act: 1) is preempted by the Federal Election Campaign Act (FECA), 2 U.S.C. §§ 431 et seq.; 2) violates the First Amendment to the United States Constitution; and 3) violates the Privileges or Immunities Clause of the Fourteenth Amendment. This matter is now before the Court on plaintiff's motion for summary *1442 judgment.[2]
DISCUSSION
A movant is not entitled to summary judgment unless the movant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). In considering a summary judgment motion, a court must determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). The role of the court is not to weigh the evidence but instead to determine whether, as a matter of law, a genuine factual conflict exists. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987). "In making this determination, the court is required to view the evidence in the light most favorable to the nonmoving party and to give that party the benefit of all reasonable inferences to be drawn from the facts." AgriStor Leasing, 826 F.2d at 734. When a motion for summary judgment is properly made and supported with affidavits or other evidence as provided in Fed.R.Civ.P. 56(c), then the nonmoving party may not merely rest upon the allegations or denials of the party's pleading, but must set forth specific facts, by affidavits or otherwise, showing that there is a genuine issue for trial. Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir. 1987), cert. denied, 484 U.S. 1010, 108 S. Ct. 707, 98 L. Ed. 2d 658 (1988). Moreover, summary judgment must be entered against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).
I. Whether the Campaign Reform Act Is Preempted by the Federal Election Campaign Act
Plaintiffs first challenge the Campaign Reform Act on the grounds of preemption. Under the Supremacy Clause, U.S. Const., Art. VI, cl. 2, state laws that "interfere with, or are contrary to the laws of congress, made in pursuance of the constitution" are invalid. Wisconsin Public Intervenor v. Mortier, ___ U.S. ___, ___, 111 S. Ct. 2476, 2481, 115 L. Ed. 2d 532 (1991) (quoting Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211, 6 L. Ed. 23 (1824)). Because the question of preemption turns on congressional intent, Mortier, 111 S.Ct. at 2481, its resolution turns on the interpretation of the federal statute at issue.
Although the lines between them are often blurred, there are generally three broad categories of federal preemption. See Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev. Comm'n, 461 U.S. 190, 203-03, 103 S. Ct. 1713, 1721-22, 75 L. Ed. 2d 752 (1983). The first type, express preemption, occurs where Congress has in express terms declared its intent to preclude state regulation in a given area. Jones v. Rath Packing Co., 430 U.S. 519, 97 S. Ct. 1305, 51 L. Ed. 2d 604 (1977); Tribe, American Constitutional Law § 6-26, at 481 n. 14 (2d ed. 1988); 2 Singer, Sutherland Statutory Construction § 36.08.50, at 7 (Supp.1992). The most obvious form of express preemption is where Congress enacts a preemption clause on point, explicitly declaring its preeminence in a given regulatory area.
The second type, implied preemption, occurs where Congress, through the structure or objectives of federal law, has impliedly precluded state regulation in an area. Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1396 (9th Cir.1988); Tribe, supra § 6-26, at 481 n. 14; 2 Singer, supra § 36.08.50, at 7 (Supp.1992). Absent explicit preemptive language, Congress' intent to supersede state law altogether may be inferred from a pervasive scheme of federal regulations that is designed to effectuate a strong federal interest. See Pacific Gas, 461 U.S. at 203-04, 103 S.Ct. at *1443 1721-22 (quoting Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S. Ct. 3014, 3022, 73 L. Ed. 2d 664 (1982)). Such a scheme permits the inference that Congress left no room for supplementary state regulation. Hillsborough County v. Automated Medical Labs., Inc., 471 U.S. 707, 713, 105 S. Ct. 2371, 2375, 85 L. Ed. 2d 714 (1985). Put another way, preemption is implied where a federal statutory scheme reflects Congress' intent to "occupy the field." See Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 104 S. Ct. 615, 621, 78 L. Ed. 2d 443 (1984); United Auto., Aircraft & Agric. Implement Workers of Am. v. Wisconsin Employment Relations Bd., 351 U.S. 266, 271, 76 S. Ct. 794, 797-98, 100 L. Ed. 1162 (1956). The crux of both express and implied preemption is whether Congress intended to preclude state regulation in a given area. See Mortier, 111 S.Ct. at 2481.
The third type of preemption, conflict preemption, occurs where Congress has not entirely displaced state regulation in a specific area, but where a state law actually conflicts with federal objectives and goals. International Paper Co. v. Ouellette, 479 U.S. 481, 491, 107 S. Ct. 805, 811, 93 L. Ed. 2d 883 (1987). This can arise when compliance with both federal and state regulations is impossible, see Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S. Ct. 1210, 1217-18, 10 L. Ed. 2d 248 (1963), or when a state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, see Hines v. Davidowitz, 312 U.S. 52, 67-68, 61 S. Ct. 399, 404-05, 85 L. Ed. 581 (1941). In evaluating claims of conflict preemption, courts must consider the relationship between state and federal laws not merely as they are written, but also as they are interpreted and applied. Rath Packing, 430 U.S. at 526, 97 S.Ct. at 1310.
A party claiming that federal law preempts state law bears a heavy burden. First, there is a general presumption that Congress did not intend to displace state law. Maryland v. Louisiana, 451 U.S. 725, 746, 101 S. Ct. 2114, 2128-29, 68 L. Ed. 2d 576 (1981). Second, there is a specific presumption against a finding of federal preemption in areas traditionally regulated by the states. California v. ARC Am. Corp., 490 U.S. 93, 109 S. Ct. 1661, 1665, 104 L. Ed. 2d 86 (1989). Because this case involves the regulation of congressional elections, for which the Constitution itself prescribes a particular role for the states,[3]see U.S. Const. Art. I, § 4, plaintiff's burden is onerous. See Mortier, 111 S.Ct. at 2482; Roudebush v. Hartke, 405 U.S. 15, 24-25, 92 S. Ct. 804, 810-11, 31 L. Ed. 2d 1 (1972).
In this case, the particular federal statute at issue is FECA, which plaintiffs claim preempts the Campaign Reform Act. Resolution of this preemption question thus turns on the Court's construction of the federal statute. See Tribe, supra § 6-26, at 482-83 n. 8. Given the complexities of federal campaign regulation, a discussion of its history is helpful in analyzing this preemption question.
A. History of Federal Election Law
The primary source of congressional authority to regulate federal elections is found in Article I, section 4 of the Constitution, which provides:
The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each *1444 State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Place of chusing Senators.
U.S. Const. Art. I, § 4. Pursuant to this authority, Congress has over the years enacted a series of federal statutes regulating federal campaigns.
The modern era of federal campaign regulation began in 1907, when President Roosevelt urged the adoption of a system of public campaign financing. Buckley v. Valeo, 519 F.2d 821, 904 (D.C.Cir.1975) (en banc) (per curiam), aff'd in part and rev'd in part, 424 U.S. 1, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976) (per curiam). Although Congress did not adopt this proposal, it did enact the Tillman Act of 1907, 34 Stat. 864 (1907). This statute prohibited all federally chartered corporations and national banks from making money contributions in connection with elections. "As the historical background of this statute indicates, its aim was not merely to prevent the subversion of the integrity of the electoral process. Its underlying philosophy was to sustain the active, alert responsibility of the individual citizen in a democracy for the wise conduct of government." United States v. United Auto Workers, 352 U.S. 567, 575, 77 S. Ct. 529, 533, 1 L. Ed. 2d 563 (1957).[4]
In 1910, Congress enacted the first federal disclosure law, Act of June 25, 1910, ch. 392, §§ 5-6, 36 Stat. 823 (1910). This statute required political committees, defined as national committees, national congressional campaign committees of parties, and organizations operating in congressional elections within two or more states, to disclose all transactions involving more than $100. Identification of recipients of expenditures of $10 or more was also required. Id. §§ 1, 5-6, 36 Stat. 822-24. In addition, annual expenditures of greater than $50 for the purpose of influencing the result of a congressional election had to be reported. Id. § 7, 36 Stat. 824. Congress amended this statute in 1911 to include, for the first time, overall expenditure ceilings on campaigns for the House ($5,000) and for the Senate ($12,000), as well as detailed reporting requirements. See Act of Aug. 19, 1911, ch. 33, § 2, 37 Stat. 26-29 (1911). This amendment also broadened the disclosure requirements to include primary, convention, and other pre-nomination periods. Id. In 1918, Congress added criminal penalties for offering money to influence voting. Act of Oct. 16, 1918, ch. 187, 40 Stat. 1013.
In 1921, one Truman Newberry was convicted of violating the Tillman Act's expenditure ceiling in his 1918 Michigan primary race. The Supreme Court reversed his conviction and declared the portions of the amendment regulating the expenditures of those running in political primaries unconstitutional, on the grounds that Congress lacked the constitutional authority to regulate the internal affairs of political parties. See Newberry v. United States, 256 U.S. 232, 258, 41 S. Ct. 469, 474-75, 65 L. Ed. 913 (1921).
After Newberry, Congress tightened the surviving portions of the Tillman Act by enacting the Federal Corrupt Practices Act of 1925, 43 Stat. 1070 (1925) (codified at 18 U.S.C. §§ 610-17). This statute broadened the disclosure requirements and extended the proscription on contributions by federally chartered banks and corporations to all contributions of every form. Soon thereafter, the Supreme Court upheld the Federal Corrupt Practices Act in Burroughs v. United States, 290 U.S. 534, 54 S. Ct. 287, 78 L. Ed. 484 (1934). Reasoning that Congress could properly find that disclosure requirements would tend to prevent the corrupting influence of money in elections, the Court determined that the statute as a whole was tightly drafted to effectuate this purpose. Id. at 547-48, 54 S.Ct. at 290-91. Until its repeal in 1971, the Federal Corrupt Practices Act remained the primary campaign finance law. See Federal Election *1445 Campaign Act of 1971, Pub.L. No. 92-225, § 405, 86 Stat. 20 (1971).
In 1939, Congress enacted the Hatch Political Activity Act (Hatch Act), ch. 410, 53 Stat. 1147 (1939) (codified at scattered sections of 5 & 18 U.S.C.), which banned overt political activities by all federal employees except presidential appointees. The Supreme Court upheld these restrictions in United Public Workers v. Mitchell, 330 U.S. 75, 67 S. Ct. 556, 91 L. Ed. 754 (1947), and later in United States Civil Serv. Comm'n v. National Ass'n of Letter Carriers, 413 U.S. 548, 93 S. Ct. 2880, 37 L. Ed. 2d 796 (1973). In 1940, Congress also limited the total expenditures of political committees to $3 million and limited gifts to either candidates or political committees to $5,000 in any calendar year. Act of July 19, 1940, ch. 640, 54 Stat. 767; see Buckley, 519 F.2d at 905.
In 1943, Congress extended the Federal Corrupt Practices Act's prohibition on contributions to labor unions in the War Labor Disputes Act (Smith-Connally Act), ch. 144, § 9, 57 Stat. 167 (1943). But this statute expired by its terms in 1945, so Congress, as part of the Labor Management Relations Act (Taft-Hartley Act), ch. 120, § 304, 61 Stat. 159 (1947), enacted another provision including labor unions within the ban on contributions. The Taft-Hartley Act also prohibited corporations and unions from making campaign expenditures on behalf of candidates, thus eliminating a loop-hole that permitted both groups to accomplish through expenditures what they could not do through contributions. Because the Supreme Court impliedly overruled Newberry's proscription on congressional regulation of primaries in United States v. Classic, 313 U.S. 299, 317, 61 S. Ct. 1031, 1038-39, 85 L. Ed. 1368 (1941), Congress through the Taft-Hartley Act also extended its regulation of federal elections to include primaries.
Thus, the Tillman Act, the Federal Corrupt Practices Act, the Smith-Connally Act, the Hatch Act, and the Taft-Hartley Act reflect Congress' historical efforts to develop stringent regulation of federal campaigns.[5] Nahra, Political Parties & the Campaign Finance Laws: Dilemmas, Concerns & Opportunities, 56 Fordham L.Review 53, 58 (1987). However, as at least one commentator has observed, these efforts did not prove effective until the enactment of FECA. See id.
B. Federal Election Campaign Act, 2 U.S.C. §§ 431 et seq.
After extensive debate, see Berry & Goldman, Congress & Public Policy: A Study of the Federal Election Campaign Act of 1971, 10 Harv.J. on Legis. 331, 337-56 (1973), Congress passed the Federal Election Campaign Act of 1971, which replaced the Federal Corrupt Practices Act as the governing body of federal law regulating the campaign process.[6]See Pub.L. No. 92-225, 86 Stat. 3 (1972) (codified as amended in sections of 2, 18 & 47 U.S.C.). In response to Watergate, and the ensuing public demand for further campaign reform, Congress amended FECA in 1974. See 88 Stat. 1263. As amended, FECA sought to reform federal election campaigns in four major respects.
First, Congress enacted a series of limitations on campaign contributions. FECA limits political contributions to any single federal candidate or his authorized committees by an individual or a group to $1,000, see 2 U.S.C. § 441a(a)(1)A), and by a political committee to $5,000, see 2 U.S.C. § 441a(a)(1)(C), with an overall annual limitation of $25,000 by an individual contributor, see 2 U.S.C. § 441a(a)(3). Congress also limited campaign expenditures.[7]
*1446 Second, Congress enacted a series of reporting and disclosure requirements for political contributions that replaced all prior disclosure laws. FECA requires political committees to keep detailed records of contributions and expenditures, see 2 U.S.C. § 432(b)(2)(A) & (B), as well as to file quarterly reports with the Federal Election Commission. See 2 U.S.C. § 434(a). These quarterly reports are to contain detailed financial information, including the full name, mailing address, occupation, and principal place of business of each person who has contributed over $200 in a calendar year, as well as the amount and date of the contributions. See 2 U.S.C. § 434(b). Finally, FECA also requires every individual or group, other than a candidate or political committee, making contributions or expenditures exceeding $250 other than by contribution to a political committee or candidate to file a statement with the Federal Election Commission. See 2 U.S.C. § 434(c).
Third, to enforce FECA, Congress created the eight-member Federal Election Commission, see 2 U.S.C. § 437c, vesting it with "primary and substantial responsibility for administering and enforcing the Act." Buckley, 424 U.S. at 109, 96 S.Ct. at 677-78. As part of its administrative responsibilities, the commission serves as a "national clearinghouse for ... information with respect to the administration of Federal elections." 2 U.S.C. § 438(a)(10). The commission must not only store the volumes of reports and statements that are required to be filed by those engaging in regulated political activities, but must also file and index them as well as make them available for public inspection. 2 U.S.C. § 438(a). Further, the commission is authorized to conduct audits and field investigations of any regulated political committee. 2 U.S.C. § 438(b).
Beyond these administrative and investigatory functions, the commission has been delegated "extensive rulemaking and adjudicative powers." Buckley, 424 U.S. at 110, 96 S.Ct. at 678. Congress expressly authorized the commission to "prescribe rules, regulations, and forms to carry out the provisions of [FECA]...." 2 U.S.C. § 438(a)(10) (1970 ed. Supp. IV) (codified now at 2 U.S.C. § 438(a)(8)); 2 U.S.C. § 437d(8). In addition to formal rulemaking, the commission was given the power to render advisory opinions upon request. See 2 U.S.C. §§ 437d(a)(7) & 437f. Any person involved in a specific transaction who requests an advisory opinion regarding that transaction and receives a favorable ruling may in good faith rely upon the advisory opinion and cannot be sanctioned under FECA.
C. Whether FECA Either Expressly or Impliedly Preempts the Campaign Reform Act
The first question in this case is whether FECA either expressly or impliedly preempts the Campaign Reform Act. The cardinal rule of statutory interpretation is that Congress' intent is to be divined in the first instance from the language of the statute itself. See Pennsylvania Dep't of Public Welfare v. Davenport, 495 U.S. 552, 110 S. Ct. 2126, 2130, 109 L. Ed. 2d 588 (1990) (citing Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S. Ct. 2297, 2301, 85 L. Ed. 2d 692 (1985)). Where the terms of a statute are unambiguous, "judicial inquiry is complete except in rare and exceptional circumstances." Demarest v. Manspeaker, 498 U.S. 184, 111 S. Ct. 599, 604, 112 L. Ed. 2d 608 (1991); Burlington N. R.R. v. Oklahoma Tax Comm'n, 481 U.S. 454, 107 S. Ct. 1855, 1860, 95 L. Ed. 2d 404 (1987).
1. Statutory Language
FECA contains an explicit preemption provision, which provides:
The provisions of [FECA], and of rules prescribed under [FECA], supersede and preempt any provision of State law with respect to election to Federal office.
2 U.S.C. § 453.
Plaintiffs argue that this language is clear on its face, preempting all state laws *1447 regarding federal campaign financing. By its terms the statute preempts any provision of state law "with respect to election to federal office." Pls.' Mem. at 9 (quoting 2 U.S.C. § 453). Before it was amended in 1974, the preemption clause, according to plaintiffs, sought to preempt only state statutes that directly conflicted with federal law. See Federal Election Campaign Act of 1971, section 403, Pub.L. No. 92-225, 86 Stat. 20 (1972). However, plaintiffs claim that the 1974 amendments broadened the scope of the preemption provision, extending it to any state-law provision regarding election to federal office. See Federal Election Campaign Act Amendments of 1974, Pub.L. No. 93-443, section 301, 88 Stat. 1289 (1974). This change in statutory language, plaintiffs contend, reflects an intentional expansion of the scope of the preemption provision.
Defendants and amicus respond that the language of section 453 is not nearly as broad as plaintiffs suggest. First, amicus argues that courts have generally rejected the proposition that phrases like "with respect to," as found in section 453, necessarily indicate an intent to preempt broadly. For example, in Associated Indus. of Massachusetts v. Snow, 898 F.2d 274 (1st Cir. 1990), the United States Court of Appeals for the First Circuit held that federal asbestos abatement regulations promulgated pursuant to the Occupational Safety and Health Act of 1970, 29 U.S.C. § 667, which contains a similar "with respect to" provision, did not preempt state regulations establishing a system for training, licensure, and certification of asbestos workers. See id. at 280-282. In this case, a literal reading of section 453 would render states powerless, for example, to determine when polls are open and to enforce voter-fraud laws. Because Article I, § 4 of the United States Constitution vests at least some authority in the states to regulate these matters, see U.S. Const. Art. I, § 4, defendants argue that plaintiffs' proposed construction is unconstitutionally broad. Moreover, two circuit courts that have addressed the scope of section 453 have found that the language of section 453 is sufficiently ambiguous so as to necessitate consider other aids in statutory interpretation.
In Reeder v. Kansas City Bd. of Police Comm'rs, 733 F.2d 543 (8th Cir.1984), the United States Court of Appeals for the Eighth Circuit rejected a FECA preemption challenge to a Missouri statute that barred Kansas City police officers from making contributions to political campaigns. In reviewing the statute, the court noted that while a law prohibiting certain people from contributing to campaigns for federal office could surely be considered a "law with respect to election to Federal office," section 453 could equally be read to refer primarily to the behavior of candidates, and thus supersede state laws on permissible contributions only to the extent that federal law expressly forbids certain kinds of contributions. Id. at 545. The court also observed that some state laws that are certainly valid particularly those regulating voter registration, voting fraud, and theft of ballots could be characterized as falling within the scope of section 453, if it were read too broadly. Recognizing these alternative interpretations, the court concluded that "[t]he preemption [provision] ... is not so clear (if any statute ever is) as to preclude us from consulting the legislative history." Id.
More recently, in Stern v. General Elec. Co., 924 F.2d 472 (2d Cir.1991), the United States Court of Appeals for the Second Circuit rejected a FECA preemption challenge to state common law governing claims of breach of fiduciary duty of corporate directors and officers and recovery for corporate waste. The plaintiff in that case brought a shareholders' derivative action against the corporation's directors, alleging that they had breached their duties by expending corporate sums in support of a particular political action committee. The district court dismissed the complaint on the grounds that FECA preempted plaintiff's claims for corporate waste. The court of appeals rejected the district court's broad interpretation of section 453. Id. at 475. Construing section 453 narrowly, the court, citing Reeder, concluded that Congress did not intend to preempt state regulation with respect to non-election related *1448 activities. Id. at 475 & n. 3. Although the Stern court did not expressly find that the language of section 453 was ambiguous and justified resorting to the legislative history, it expressly relied upon Reeder to support its narrow construction of the statute. Id.
The Court finds that the language of section 453 supports multiple constructions and is thus ambiguous. While at first blush the language seems exceedingly broad, such a construction, as the Reeder court found, ignores other equally viable possibilities. More importantly, although the Eighth Circuit's Reeder decision does not dispose of the preemption question because the state statute at issue in this case is different, Reeder is controlling authority that section 453 is sufficiently ambiguous so as to justify resort to the legislative history. Therefore, the Court will consider extrinsic aids of interpretation. See Dubois v. Thomas, 820 F.2d 943, 949 (8th Cir.1987).
2. Legislative History
Extrinsic aids of interpretation consist of background information about circumstances that led to the enactment of a statute, events surrounding enactment, and developments pertinent to subsequent operation. 2A Singer, supra § 48.01, at 301. Courts generally look first to the legislative history. Id. § 48.01, at 302.
a. Committee Reports
The first type of legislative history relied upon in this case is committee reports. As a general rule, committee reports represent the most persuasive indicia of congressional intent. Housing Auth. of Omaha v. United States Hous. Auth., 468 F.2d 1, 6-7 n. 7 (8th Cir.1972), cert. denied, 410 U.S. 927, 93 S. Ct. 1360, 35 L. Ed. 2d 588 (1973); Mills v. United States, 713 F.2d 1249, 1252 (7th Cir.1983), cert. denied, 464 U.S. 1069, 104 S. Ct. 974, 79 L. Ed. 2d 212 (1984). One type of committee report is considered singularly authoritative. Next to the language of the statute itself, conference reports, representing the final statement of terms agreed to by both houses of Congress, are the most persuasive evidence of congressional intent. Davis v. Luckard, 788 F.2d 973, 981 (4th Cir.1986).
In support of their positions, the parties rely on three particular committee reports. The first is that of the House Committee that drafted the preemption provision as it currently reads. This report followed a spirited debate on the House floor resulting in the defeat of a proposed amendment that would have permitted states to set lower expenditure limits than those set forth in FECA; see 120 Cong.Rec. 27460-65 (1974):
It is the intent of the committee to make certain that Federal law is construed to occupy the field with respect to elections to federal office and that the Federal law will be the sole authority under which such elections will be regulated. Under the 1971 Act provision was made for filing federal reports with state officials and supervisory officers were required to cooperate with, and to encourage, state officials to accept federal reports in satisfaction of state reporting requirements. The provision requiring filing of federal reports with state officials is retained, but the provision relating to encouraging state officials to accept federal reports to satisfy state reporting requirements is deleted. Under this legislation, federal reporting requirements will be the only reporting requirements and copies of the federal reports must be filed with appropriate state officials. The Committee also feels that there can be no question with respect to preemption of local laws since the Committee has provided that the Federal laws supersede and preempt any law enacted by a State, the Federal law will also supersede and preempt any law enacted by a political subdivision of the State.
Defs.' Mem. at 14-15 (quoting H.R.Rep. No. 1239, 93d Cong., 2d Sess. 10-11 (1974), reprinted in Legislative History of the Federal Election Campaign Act Amendments of 1974 644-45 (1977)).
According to plaintiffs, this House Committee report reflects that Congress, by *1449 broadening the originally enacted preemption provision, intended to occupy the field with regard to federal elections. In response, the defendants suggest that while the explanation of the preemption provision begins with very broad language, the report narrows to a discussion of state reporting requirements. This, according to the defendants, demonstrates that the House thought section 453 would apply solely to state reporting requirements.
The Court finds that this House committee report is unclear. On the one hand, the phrase "occupy the field" is a preemption term of art. Since at least 1956, the Supreme Court has on occasion used this phrase in holding that Congress intended to preclude any state regulation in a particular area. See United Auto., Aircraft & Agric. Implement Workers v. Wisconsin Employment Relations Bd., 351 U.S. 266, 271, 76 S. Ct. 794, 797-98, 100 L. Ed. 1162 (1956). Consequently, one could infer that the House, by using this term of art in its report, intended that section 453 would be construed just as broadly. Persuasive as this argument may be, however, it is undermined by the fact that the phrase "occupy the field" is modified by "with respect to federal elections." The parties in this case do not dispute that section 453 preempts at least some state laws. Rather, the issue is whether the Campaign Reform Act in particular falls within the scope of the phrase "with respect to federal elections." By defining the scope of preemption in the exact same ambiguous terms as those used in the statute, the language of this House report offers little guidance.
The second report submitted to the Court is that of the conference committee. The conference committee also expounded on the effect of the preemption provision:
The conference substitute follows the House amendment. It is clear that the Federal law occupies the field with respect to reporting and disclosure of political contributions to and expenditures by federal candidates and political committees, but does not affect State laws as to the manner of qualifying as a candidate or the dates and places of elections.
Defs.' Mem. at 14 (quoting Conf.Rep. No. 1237, 93d Cong.2d Sess. (1974), reprinted in 1974 United States Code Cong. & Admin.News 5587, 5668). Plaintiffs argue that a logical reading of this report suggests that the conference committee was expressly listing those areas of state law that were not preempted, while preserving the sweeping preemptive effect of the newly adopted clause. In response, defendants contend that this report reveals that the broad language of section 453 was intended to preempt state law concerning only reporting and disclosure of contributions to and expenditures by candidates and their committees. In contrast, the Campaign Reform Act leaves all reporting requirements to FECA while providing an option for candidates to agree to spending limits.
Once again the Court finds that this conference report does not dispose of the issue. In this report, the conference committee accepted the House amendment, which indicates that it also accepted the House's meaning of the provision. This would suggest that the provision should be given the broad interpretation advanced by the House. Instead of adopting the House explanation for the amendment, however, the conference committee expressly distinguished between federal laws governing reporting and disclosure requirements and state laws governing candidate qualifications and the manner of conducting elections. As amicus notes, had the conference committee wished to adopt the House's analysis, it could have done so explicitly. Mem. of Amicus Curiae at 14 n. 3 (citing Conf.Rep. No. 1237, 93d Cong., 2d Sess. (1974) reprinted in 1974 U.S.Code Cong. & Admin.News at 5637 (expressly adopting the House statement regarding the amendments to 18 U.S.C. § 611). This distinction restricts the preemptive scope somewhat. Although the language does distinguish between expenditures by federal candidates and non-preempted state-law matters, the only conclusion that the Court draws from this report is that the conference committee's intent as to whether states could impose expenditure limits was ambiguous.
*1450 The final report submitted to the Court pertains to the criminal preemption provisions of the 1974 amendments to FECA:
The provisions of the conference substitute make it clear that the Federal law occupies the field with respect to criminal sanctions relating to limitations on campaign expenditures, the sources of campaign funds used in Federal races, the conduct of Federal campaigns, and similar offenses, but does not affect the State's rights to prohibit false registration, voting fraud, theft of ballots, and similar offenses under State law.
Pls.' Mem. at 11 (quoting Conf.Rep. No. 1237, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 5638). Plaintiff contends that this report reflects Congress' intent to preempt state laws relating to limitations on campaign expenditures. In response, defendants contend that this report is of no weight because it involves a different provision that was subsequently repealed. Amicus, contrasting this report to that discussing section 453, suggests that had Congress intended to occupy the field relating to limitations on campaign expenditures, it could have done so with the same clarity that it used in the legislative history of the criminal preemption provision.
The Court finds that this final report is of little interpretive value. First, as defendants note, the language pertains to the criminal preemption provisions of FECA, not section 453, the civil preemption provision. More importantly, however, Congress later repealed the criminal preemption provision in response to Buckley. The Court declines to rely upon the legislative history of a repealed provision to interpret a different provision that was not repealed.
b. Legislative Debates
The next pieces of legislative history relied upon by the parties are selected quotations from the legislative debates surrounding the enactment of the 1974 amendments. Originally, statements by individual members of the legislature made during the general debate on a bill were considered useless in construing statutes. See Aldridge v. Williams, 44 U.S. (3 How.) 9, 24, 11 L. Ed. 469 (1845). Modern courts have loosened this prohibition. Now, as a general rule, statements of individual legislators are considered at least probative of legislative intent so long as they are consistent with the statutory language and the rest of the legislative history. See Grove City College v. Bell, 465 U.S. 555, 566-67, 104 S. Ct. 1211, 1217-18, 79 L. Ed. 2d 516 (1984).
As noted above, the conference committee adopted the House version of section 453. Plaintiff argues that the statements of three different representatives reflect that section 453 preempted all state laws regarding campaign financing. First, Representative Frenzel characterized the amendment as "a welcome change which will ensure that election laws are consistent and uniform and that candidates for federal office do not bear the burden of complying with several different sets of laws and regulations." Pls.' Mem. at 12 (quoting H.R.Conf.Rep. No. 1438, 93d Cong., 2d Sess. (1974)). Representative Frenzel recognized that the chief problem sought to be addressed was overlapping state and federal reporting requirements; apparently, many representatives wanted to be bound only by federal requirements. Id. (quoting 120 Cong.Rec. 7895 at 96 (1974)). Second, Representative Koch commented that the preemption provision, in the interests of uniformity, should be interpreted broadly. H.R.Conf.Rep. No. 1438, 93d Cong., 2d Sess. (1974). According to Koch, complete preemption is essential because all national legislators should be subject to the same campaign rules. Id.
Finally, plaintiffs submit the statements of Representative Hayes, the chair of the House committee that reported the bill. Statements by the chair of the committee in charge of a bill are regarded as being like supplemental committee reports, because the chair has the duty of defending the bill on the legislative floor and is presumed to have familiarized himself with its terms and its potential effect. 2A Singer, supra § 48.14, at 361. These statements should therefore be accorded the same weight as formal committee reports. City *1451 of Kansas City v. Federal Pac. Elec. Co., 310 F.2d 271, 280 (8th Cir.), cert. denied, 371 U.S. 912, 83 S. Ct. 256, 9 L. Ed. 2d 171 (1962); accord Kuehner v. Heckler, 778 F.2d 152, 160 (3d Cir.1985). In response to a proposed amendment that would have allowed states to set different expenditure levels than those in place at the federal level, Hayes, disapproving of the amendment, suggested that allowing states to impose lower spending limits would undercut the preemption provision. Pls.' Mem. at 13. This amendment, which would have clearly circumscribed the scope of the preemption provision, was eventually rejected.
Defendants and amicus muster their own statements from the legislative debates in response. First, Representative Obey, who proposed the amendment that would have allowed states to set different expenditure limits, believed that the preemption provision as it stood applied only to state reporting requirements, nothing more. Defs.' Mem. at 16 (quoting See 120 Cong.Rec. 7894 (Aug. 8, 1974), reprinted in Legislative History of Federal Campaign Act Amendments of 1974 at 866 (1977)). In addition, Representative Hayes, in opposing the amendment, advanced the view that Congress should occupy the field of federal elections, Defs.' Mem. at 16 (quoting 120 Cong.Rec. 7894 at 867), but believed that states could encourage voluntary expenditure limits in spite of complete preemption. Id. According to amicus, the legislative debate, taken as a whole, suggests only that Congress did not intend to saddle federal candidates with inconsistent state reporting and disclosure requirements.
The Court believes that two propositions may be extracted from the legislative debates and, in particular, Representative Hayes' statements. It seems clear that the House defeated an amendment that would have permitted the states to set their own federal campaign spending limits. One could infer from this that the preemption provision, as it stands, was intended to preclude the states from regulating federal campaign spending. Cf. Tahoe Regional Planning Agency v. McKay, 769 F.2d 534, 538 (9th Cir.1985) (the rejection of an amendment generally indicates that the legislature does not intend the bill to include the provisions embodied in the rejected amendment). However, this does not answer the question of whether candidates could voluntarily limit their own spending pursuant to a state statutory scheme. Put another way, while the individual members may have believed that state laws imposing mandatory spending limits were preempted, the record is silent as to whether states could enact a scheme of public financing based, in part, on the candidate's own agreement to limit spending. The second general proposition is that while the individual members may have believed that the preemption provision should be interpreted broadly, their central concern seemed to be possible inconsistent state and federal reporting and disclosure requirements. These two propositions cut against preemption.
3. Agency Interpretation
The second category of extrinsic evidence offered by the parties is the Federal Election Commission's interpretation of both FECA generally, through its own regulations, as well as its particular effect on the Campaign Reform Act, through an advisory opinion.
a. Regulation: 11 C.F.R. § 108.7
Pursuant to its statutory authority, the commission promulgated 11 C.F.R. § 108.7 to implement FECA's preemption provision. Section 108.7 provides:
(b) Federal law supersedes State law concerning the
(1) Organization and registration of political committees supporting Federal candidates;
(2) Disclosure of receipts and expenditures by Federal candidates and political committees; and
(3) Limitation on contributions and expenditures regarding Federal candidates and political committees.
(c) The Act does not supersede State laws which provide for the
(1) Manner of qualifying as a candidate or political party organization;
(2) Dates and places of elections;
*1452 (3) Voter registration;
(4) Prohibition of false registration, voting fraud, theft of ballots, and similar offenses; or
(5) Candidate's personal financial disclosure.
11 C.F.R. § 108.7. In accordance with 2 U.S.C. § 438(d), which governs the procedures that the FEC must follow when promulgating rules, the FEC submitted this regulation to Congress in 1977. Congress did not disapprove the regulation, and it went into effect on April 13, 1977.
It is well-established that a federal agency, acting within the scope of its congressionally delegated authority, may enact regulations preempting state law. See Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 698-99, 104 S. Ct. 2694, 2699-700, 81 L. Ed. 2d 580 (1984); Fidelity Fed. Sav. & Loan v. de la Cuesta, 458 U.S. 141, 153-54, 102 S. Ct. 3014, 3022-23, 73 L. Ed. 2d 664 (1982); Associated Indus. of Massachusetts v. Snow, 898 F.2d 274, 282 (1st Cir. 1990). An argument could be made that, under the circumstances here, this regulation on its own preempts the Campaign Reform Act. The language of section 108.7(b)(3) is sweeping, suggesting that any state law regulating spending is superseded by federal law.
The Court finds that this regulation is probably the most persuasive evidence that section 453 was intended to preempt all state laws purporting to regulate congressional campaign expenditures. Before prescribing any regulations, the Federal Election Commission must transfer the proposed rule and an accompanying statement to the Senate and the House. If neither house disapproves the proposed regulation within thirty days, the commission may issue it. See 2 U.S.C. § 438(d); Federal Election Comm'n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 34 n. 8, 102 S. Ct. 38, 43 n. 8, 70 L. Ed. 2d 23 (1981). Thus, Congress has the opportunity to reject any regulations that it desires. The commission submitted its regulation interpreting the preemption provision in 1977; Congress did not reject it. Thus, the Court infers that this regulation, because it was tacitly approved by Congress, represents a valid interpretation of congressional intent.
b. Advisory Opinion
The final piece of extrinsic evidence submitted by the parties is a particular advisory opinion. At the request of plaintiffs' counsel, the Federal Election Commission issued an advisory opinion on October 7, 1991, in which the commissioners unanimously concluded that section 453 clearly preempts the Campaign Reform Act in its entirety. See Pls.' Mem.Ex. A (Federal Election Commission, advisory opinion 1991-22, Oct. 7, 1991) [hereinafter Advisory Opinion].
After discussing the relevant provisions of the Campaign Reform Act, the commission identified the question presented: "Does the FECA preempt and supersede a statute that permits payment of state funds to Federal candidates who enter voluntary, binding agreements to limit their campaign expenditures which are made enforceable via civil fines in amounts up to 400% of excessive expenditures." Advisory Opinion at 4. In answering this question, the commission first noted that section 453 and the rules promulgated thereunder preempt "any provision of State law with respect to election to Federal office." Id. (quoting 2 U.S.C. § 453). The commission then turned to the legislative history. Relying on the House committee report, see H.R.Rep. No. 1239, 93d Cong., 2d Sess. (1974) and the conference committee report, see Conf.Rep. No. 1438, 93d Cong., 2d Sess., both of which have been discussed supra, the commission observed that section 453 was intended to have a broad scope, including preempting criminal sanctions relating to limitations on campaign expenditures and all state reporting and disclosure requirements. Advisory Opinion at 4.
Next, the commission looked at its own regulations. Specifically, the commission found that 11 C.F.R. § 108.7, promulgated in order to further define section 453, expressly preempts state law regarding the limitations on contributions and expenditures *1453 that apply to federal candidates and their committees. Advisory Opinion at 4. The regulations also draw a distinction between federal matters such as the limitation on expenditures, which are preempted, and state matters such as the manner of qualifying candidates, which are not. Id.
The commission then turned to the evolution of FECA. The 1974 amendments to FECA prescribed limits on expenditures by all federal candidates, whether presidential or congressional. Pub.L. No. 93-443, § 101(a), 88 Stat. 1264 (1974). However, because the Supreme Court declared these provisions unconstitutional in Buckley, Congress promptly repealed the expenditure limits for congressional candidates. See Pub.L. No. 94-283, § 112, 90 Stat. 488 (1976). After these amendments were repealed, the commission promulgated 11 C.F.R. § 108.7(a)(3), which, as noted above, prescribes that federal law supersedes state law concerning any limitation on expenditures regarding federal candidates and political committees. Advisory Opinion at 5. Finally, since that time Congress has considered the issue of expenditure limits and has, up to this point, chosen to enact such limits only for federally funded presidential candidates.[8] Based upon this evolution, the commission commented on the scope of federal preemption:
This status of the Federal law does not suggest the presence of a regulatory vacuum into which the states may enter. It is instead indicative that Federal law continues to occupy the field with respect to enforcement of expenditure limits and, further, that the will of Congress at this time is that there be no expenditure limits for Federal candidates, other than for presidential candidates who qualify for U.S. Treasury funding.
Advisory Opinion at 6 (footnote omitted).
Finally, in evaluating the public funding mechanism created by the Campaign Reform Act, the commission looked to some of its own previous advisory opinions. In these opinions, the commission took the position that as a general rule, funds from state revenues may be deposited in a state party's federal account. Advisory Opinion at 6-7 (citing Advisory Opinions 1991-14; 1988-33; 1983-15; 1982-17; 1980-103; 1978-9). However, the commission distinguished the scheme established under the Campaign Reform Act. According to the commission, the fact that a state may deposit money in a party committee's federal campaign account was not the same as permitting a state to "regulate Federal campaign finance under the guise of a public funding mechanism conditioned on abiding by spending limits." Advisory Opinion at 7.
Based upon the statutory language, the legislative history, the evolution of the statute, its own regulations, and its past advisory opinions, the commission concluded that federal law preempted the Campaign Reform Act in its entirety:
The Minnesota statute not only purports to provide funds directly to Federal candidates, but also purports to enforce a limit on expenditures made by Federal candidates. This statutory scheme ... is clearly preempted by the Act's express preemption provisions and the Commission's regulations....
Advisory Opinion at 7. The commission reasoned that the Campaign Reform Act was not like those state laws that Congress excluded from preemption, such as those prohibiting false registration, voter fraud, ballot theft and similar offenses, see Conf. Rep. No. 1438, 93d Cong., 2d Sess. (1974), but rather was more like a New Hampshire statute that restricted a political party's spending authority on behalf of federal candidates, which the commission found preempted. Advisory Opinion at 7 (citing Advisory Opinion 1989-25). According to the commission, statutes that regulate campaign spending, regardless of whether they *1454 are voluntary, are preempted. See Advisory Opinion at 7. In sum, the commission concluded that federal law preempted the Campaign Reform Act in its entirety.
At the outset, the parties dispute the extent to which the Court should defer to this agency interpretation. Plaintiffs contend that the Court should afford the advisory opinion great weight, because the Federal Election Commission, as the agency charged with primary and substantial responsibility for administering FECA, is presumed to be most familiar with its provisions. See Democratic Senatorial Campaign Comm., 454 U.S. at 37, 102 S.Ct. at 44-45 (citations omitted). On the other hand, defendants and amicus argue that the advisory opinion should be given no deference whatsoever, chiefly because the commission allegedly misconstrued section 453's legislative history.[9] Amicus also argues that the Court should not defer to the agency interpretation because the scope of section 453 is inextricably linked with the extent of the FEC's own authority. According to amicus, courts should defer only reluctantly to an agency's view when that position would enlarge the scope of the agency's own power.
The question, then, is the proper deference to be afforded the commission's interpretation. According to the Supreme Court, judicial deference to reasonable agency interpretations of statutes that the agency administers is a dominant, well-settled principal of federal law. Pauley v. BethEnergy Mines, Inc., ___ U.S. ___, 111 S. Ct. 2524, 2534, 115 L. Ed. 2d 604 (1991); K-Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S. Ct. 1811, 1817-18, 100 L. Ed. 2d 313 (1988); Chevron, U.S.A., Inc. v. Natural Resources Defense, 467 U.S. 837, 843, 104 S. Ct. 2778, 2781-82, 81 L. Ed. 2d 694 (1984). If the agency interpretation at issue is that of a statute, reviewing courts must first determine whether the statute at issue is ambiguous. If the language of the statute is clear, the court, as well as the agency, must give effect to the statute. K-Mart Corp., 108 S.Ct. at 1817. Courts will not defer to an agency interpretation that flies in the face of the clearly expressed intent of Congress. Board of Governors, FRS v. Dimension Fin. Corp., 474 U.S. 361, 368, 106 S. Ct. 681, 685-86, 88 L. Ed. 2d 691 (1986). On the other hand, "if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute," Chevron, U.S.A., 467 U.S. at 843, 104 S.Ct. at 2782, in light of the structure and language of the statute as a whole. See Sullivan v. Everhart, 494 U.S. 83, 88, 110 S. Ct. 960, 963-64, 108 L. Ed. 2d 72 (1990). Put another way, if the text of the statute is subject to differing interpretations, the court can reject the agency's interpretation only if it is unreasonable. See National R.R. Passenger Corp. v. Boston & Maine Corp., ___ U.S. ___, 112 S. Ct. 1394, 1401, 118 L. Ed. 2d 52 (1992); Emerson v. Steffen, 959 F.2d 119, 121 (8th Cir.1992). Where a court reviews an agency's interpretation of its own regulations, however, an even higher degree of deference is owed. Creighton Omaha Regional Health Care Corp. v. Sullivan, 950 F.2d 563, 565 (8th Cir.1991).
*1455 In this case, the Court has already concluded that the language of section 453 is ambiguous. Under Chevron and its progeny then, the next question is whether the agency's interpretation is permissible, or, in other words, reasonable. In answering this question, the Supreme Court has over the years considered numerous factors, including: whether the agency has maintained its position consistently, even if infrequently, see Haig v. Agee, 453 U.S. 280, 293, 101 S. Ct. 2766, 2777-78, 69 L. Ed. 2d 640 (1981); whether the agency interpretation is of longstanding application, see NLRB v. Bell Aerospace Co., 416 U.S. 267, 275, 94 S. Ct. 1757, 1762, 40 L. Ed. 2d 134 (1974); whether the public has relied upon the interpretation, see Udall v. Tallman, 380 U.S. 1, 18, 85 S. Ct. 792, 802, 13 L. Ed. 2d 616 (1965); whether the interpretation involves a matter of public controversy, see United States v. Rutherford, 442 U.S. 544, 545, 99 S. Ct. 2470, 2472, 61 L. Ed. 2d 68 (1979); whether the interpretation is based upon agency expertise in a complex area, see Aluminum Co. of Am. v. Central Lincoln People's Util. Dist., 467 U.S. 380, 104 S. Ct. 2472, 81 L. Ed. 2d 301 (1984); whether the agency has rulemaking authority, see FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 793, 98 S. Ct. 2096, 2111, 56 L. Ed. 2d 697 (1978); whether Congress knew of the agency interpretation and failed to repudiate it, see Zemel v. Rusk, 381 U.S. 1, 11, 85 S. Ct. 1271, 1278, 14 L. Ed. 2d 179 (1965); whether the agency has expressly addressed the application of the statute to the proposed issue, see Investment Co. Inst. v. Camp, 401 U.S. 617, 627-28, 91 S. Ct. 1091, 1097-98, 28 L. Ed. 2d 367 (1971); and the thoroughness, validity, and consistency of the agency's reasoning, see Democratic Senatorial Campaign Comm., 454 U.S. at 37, 102 S.Ct. at 44-45. See generally Diver, Statutory Interpretation in the Administrative State, 133 U.Pa.L.Rev. 549, 562 n. 95 (1985) (presenting a list of the factors cited by the Supreme Court in considering whether to defer to agency interpretations).
Although the defendants and amicus do not expressly claim that the commission's interpretation is either impermissible or unreasonable, they vigorously disagree with it, claiming that the commission misconstrued the statute's legislative history. In support of this position, they cite the same portions of the legislative record set out and discussed above. As the Court has noted, the legislative history is too ambiguous to support either side's interpretation conclusively. Defendants and amicus go further, however, claiming that the actual regulation, 11 C.F.R. § 108.7, though duly promulgated, should also be disregarded because the commission misconstrued section 453's legislative history. However, this argument ignores the fact that both houses of Congress had the opportunity to block the issuance of this regulation, yet neither house did. It does not make sense to reject a duly prescribed agency regulation merely because FECA's preemption provision is ambiguous.
The Court finds that deference to the Commission's interpretation is warranted in this case. First, as the Supreme Court noted in Democratic Senatorial Campaign Comm., the commission "is precisely the type of agency to which deference should presumptively be afforded." 454 U.S. at 37, 102 S.Ct. at 44-45. Congress vested the agency with plenary authority, both rulemaking and adjudicative, to regulate the conduct of federal elections. Further, the commission was charged with formulating a "general policy with respect to the administration" of FECA. Id. Determining the scope of preemption appears to fall within the competence of the commission in light of its administrative responsibilities. Because of section 453's ambiguous statutory language and legislative history, the agency could easily come to the conclusion that Congress intended to preclude all aspects of federal election financing, even statutory schemes purporting to be voluntary. Moreover, the eight-member commission consists of six voting members, no more than three of which can be of the same political party. See 2 U.S.C. § 437c(a)(1). This inherent bipartisan composition further justifies deferring to the unanimous advisory opinion.
*1456 In addition, the commission, in considering whether FECA preempted the Campaign Reform Act, had the perspectives of all parties before it. Although plaintiffs were the ones who requested the Advisory Opinion, they were not the only ones who submitted information to the commission. As defendants acknowledge, the authors of the Campaign Reform Act, Senator William P. Luther and Representative Linda Scheid, both submitted comments to the commission arguing why their law should not be found to be preempted. Aff. of John Tunheim, Exs. A, B. In addition, United States Representative Bruce Vento also submitted a letter to the commission, urging it not to find the Campaign Reform Act preempted. Tunheim Aff. Ex. C. These statements by the proponents of the Campaign Reform Act are very thorough. The commission was thus given ample opportunity to carefully review all sides of this issue. See Sioux Valley Hosp. v. Bowen, 792 F.2d 715, 719 (8th Cir.1986).
Although defendants and amicus argue in part that the commission's interpretation is wrong because it fails to take into account that compliance with the Minnesota statute is voluntary, the Court finds this argument unpersuasive. First, and most importantly, the agency could reasonably conclude, as it did, that federal law occupied the field as to federal election financing, leaving no room for the states to experiment with their own, even "voluntary," systems.
Second, the Court believes that there is a distinction in kind between the statute at issue in this case and the type of state law, according to the statute, the regulation, and the legislative history, that was not intended to be preempted. Both the legislative history cited by the parties and the agency regulation reflect that federal law was to govern certain aspects of the federal election process, and state law, other aspects. These state law aspects in particular, candidate qualifications, date and places of elections, voter registration, and prohibiting voting fraud and similar offenses seem to fall in the category of regulating the conduct of federal elections. Congress, not the states, has historically been the sole regulator of federal campaigns, as evidenced by the Tillman Act, the Corrupt Practices Act, the Smith-Connally Act, the Hatch Act and the Taft-Hartley Act. The Campaign Reform Act prescribes a system of public financing and voluntary expenditure limitations, thus purporting to regulate federal campaigns. This state system seems to encroach on those aspects of the federal election process that federal law was intended to govern.
In sum, the Court finds that the commission's interpretation of section 453 is reasonable. The Court will therefore defer to this interpretation and find that federal law occupies the field of congressional campaign financing, precluding state efforts to impose even voluntary financing systems. Accordingly, the Court will hold that the Minnesota Campaign Reform Act is preempted in its entirety.[10]
II. Whether the Campaign Reform Act Violates Plaintiffs' Constitutional Rights
Plaintiffs allege that the Campaign Reform Act violates their First and Fourteenth Amendment rights. In order to make out a First Amendment claim, the plaintiffs must first show that the Act infringes upon protected expressive conduct. Austin v. Michigan Chamber of Commerce, *1457 494 U.S. 652, 110 S. Ct. 1391, 1396, 108 L. Ed. 2d 652 (1990); Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293 n. 5, 104 S. Ct. 3065, 3068-69, n. 5, 82 L. Ed. 2d 221 (1984). If the statute does restrict protected conduct, the defendants must show that the statute is narrowly tailored to serve a compelling interest. Austin, 110 S.Ct. at 1396.
In this case the plaintiffs have failed to meet the first part of the test. Although expenditure limitations may in certain instances implicate First Amendment freedoms, Buckley, 424 U.S. at 19, 96 S.Ct. at 634-35, the Campaign Reform Act merely conditions public funding upon a candidate's voluntary agreement to abide by expenditure limitations. Nothing prevents candidates from seeking private, instead of public, funding. The First Amendment is not implicated where candidates remain free to choose between funding alternatives. Republican Nat'l Comm. v. Federal Election Comm'n, 487 F. Supp. 280, 285 (S.D.N.Y.) (three-judge court), aff'd, 616 F.2d 1 (2d Cir.), aff'd, 445 U.S. 955, 100 S. Ct. 1639, 64 L. Ed. 2d 231 (1980) (quoting Buckley, 424 U.S. at 57 n. 65, 96 S.Ct. at 653 n. 65). Therefore, the Court rejects plaintiffs' First Amendment challenge to the statute.
Plaintiffs also argue that the Campaign Reform Act infringes their rights under the Privileges or Immunities Clause of the Fourteenth Amendment. To make out a claim under this clause, the plaintiffs must show that the right asserted is specifically granted or secured to all citizens or persons by the United States Constitution. Twining v. New Jersey, 211 U.S. 78, 97, 29 S. Ct. 14, 18-19, 53 L. Ed. 97 (1908). Second, they must show that the Campaign Reform Act actually impairs that right. Id. at 90, 29 S.Ct. at 16.
In this case the plaintiffs have failed to assert a right specifically granted by the federal constitution. They assert that the Fourteenth Amendment protects their rights to be candidates for congressional office. However, the right to run for public office, unlike the right to vote, is simply not a fundamental right. See Stiles v. Blunt, 912 F.2d 260, 265 (8th Cir.1990) (citing Bullock v. Carter, 405 U.S. 134, 142-43, 92 S. Ct. 849, 855-56, 31 L. Ed. 2d 92 (1972)). Because plaintiffs have failed to meet the first part of the test under the Privileges or Immunities Clause, the Court rejects plaintiffs' Fourteenth Amendment challenge to the Campaign Reform Act.
Accordingly, based upon the foregoing, and upon all the files and proceedings herein,
IT IS ORDERED that:
1. plaintiffs' motion for summary judgment that the Minnesota Campaign Reform Act, Minn.Stat. §§ 10A.40-51 is preempted by federal law is granted; and
2. the defendants and their agents are hereby permanently enjoined from implementing and enforcing the Minnesota Campaign Reform Act, Minn.Stat. §§ 10A.40-51.
LET JUDGMENT BE ENTERED ACCORDINGLY.
NOTES
[1] The following individuals have signed and filed agreements with the Board: Phillip C. Herwig (IR, 8th Cong.Dist.); Ian Maitlan (IR, 4th Cong.Dist.); Timothy Penny (DFL, 1st Cong. Dist.); Collin Peterson (DFL, 7th Cong.Dist.); Jim Stone (DFL, 2d Cong.Dist.); Bruce Vento (DFL, 4th Cong.Dist.); and Paul Wellstone (DFL, U.S. Senate).
[2] Public Citizen, Inc., a nonprofit consumer advocacy organization, filed an amicus curiae brief in support of defendants. Public Citizen, Inc. shall be referred to throughout this memorandum as "amicus."
[3] As amicus correctly notes, the Supreme Court has recognized numerous state interests in regulating federal elections. These interests include: regulating ballot access, Eu v. San Francisco County Democratic Central Comm., 489 U.S. 214, 109 S. Ct. 1013, 103 L. Ed. 2d 271 (1989); Tashjian v. Republican Party of Connecticut, 479 U.S. 208, 107 S. Ct. 544, 93 L. Ed. 2d 514 (1986); regulating voter and candidate qualifications, Storer v. Brown, 415 U.S. 724, 94 S. Ct. 1274, 39 L. Ed. 2d 714 (1974); Rosario v. Rockefeller, 410 U.S. 752, 93 S. Ct. 1245, 36 L. Ed. 2d 1 (1973); establishing residency requirements, Sayler Land Co. v. Tulare Lake Basin Water Storage Dist., 410 U.S. 719, 93 S. Ct. 1224, 35 L. Ed. 2d 659 (1973); and safeguarding the ability of minority parties to participate in the electoral process, Norman v. Reed, ___ U.S. ___, 112 S. Ct. 698, 116 L. Ed. 2d 711 (1992); Anderson v. Celebrezze, 460 U.S. 780, 103 S. Ct. 1564, 75 L. Ed. 2d 547 (1983).
[4] This Act has faced strong challenge in recent years. See Federal Election Comm'n v. Massachusetts Citizens for Life, 479 U.S. 238, 107 S. Ct. 616, 626-27, 93 L. Ed. 2d 539 (1986). To date, the Supreme Court has declined to determine the constitutionality of federal restrictions on corporate and union political activity. See Bolton, Constitutional Limitations on Restricting Corporate & Union Political Speech, 22 Ariz.L.Rev. 373, 373 (1980).
[5] Because of this extensive web of federal regulation, two commentators have referred to election politics as a "regulated industry." Eskridge & Frickey, Cases and Materials on Legislation: Statutes & the Creation of Public Policy 210 (1988).
[6] In addition, Congress created a system of public financing for presidential campaigns by amending Subtitle H of the Internal Revenue Code and delegated broad enforcement authority to the Federal Election Commission. These portions of FECA, however, are not at issue in this case.
[7] Soon after Congress enacted the 1974 amendments, FECA was subjected to a vigorous constitutional challenge. In the landmark case of Buckley v. Valeo, 424 U.S. 1, 96 S. Ct. 612, 46 L. Ed. 2d 659 (1976), the Supreme Court upheld most of the provisions of FECA, but struck down, among other things, certain of its limitations on First Amendment grounds. Congress later repealed these unconstitutional provisions. These provisions, however, are not at issue in this case.
[8] Both houses of Congress passed bills this term that would have established voluntary expenditure limits and provided partial financing for congressional races. See S. 3, 102d Cong., 2d Sess. (1992); H.R. 3750, 102d Cong., 2d Sess. (1992). After a conference committee resolved the difference between the two bills, the President vetoed the final version. Congress failed to override the veto. Amicus acknowledges that had this been enacted, it would have preempted the Campaign Reform Act. Mem. of Amicus Curiae at 4 n. 1.
[9] In a footnote, defendants also argue that the Advisory Opinion is not binding essentially because it exceeds the commission's authority. Federal Election Commission advisory opinions are binding in the sense that they may be relied upon affirmatively by any person involved in the specific transaction or activity discussed in the opinion or in any materially indistinguishable transaction or activity. United States Defense Comm. v. Federal Election Comm'n, 861 F.2d 765, 771 (2d Cir.1988). According to the defendants, the Advisory Opinion at issue in this case was requested to enable plaintiffs to decide whether or not they should participate in the new Minnesota campaign finance system, and how they should conduct their campaigns if candidates who will challenge them in the 1992 general election make a different decision. Defs.' Mem. at 12 n. 4 (citing Advisory Opinion at 2). This, defendants claim, was not a specific transaction or activity, and therefore the advisory opinion is not binding on anyone.
The Court finds this argument unpersuasive. The activity at issue, which is clearly within the scope of the Federal Election Commission's authority, is running for congressional office. The Advisory Opinion addresses the effect of a state law on the federal election process. This falls within the commission's authority.
[10] The defendants argue that even though the provisions of the Campaign Reform Act are closely tied together, the Court, if it finds the expenditure limitations preempted, should save the public funding provision in accordance with the express severability provision in the Act. See 1990 Minn.Laws ch. 608, art. 4, § 13. Although the Court must save as much of the statute as possible, Immigration & Naturalization Serv. v. Chadha, 462 U.S. 919, 931-932, 103 S. Ct. 2764, 2773-74, 77 L. Ed. 2d 317 (1983), the Court finds that the provisions of the Act are so intertwined that even if the public funding provisions were not preempted, they could not stand on their own without the preempted expenditure limitations. More importantly, however, the Court finds that the Campaign Reform Act is preempted in its entirety.
The Court's conclusion that the Campaign Reform Act is preempted obviates the need to determine whether there is an actual conflict between state law and federal law. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1575889/ | 829 S.W.2d 283 (1992)
Charles J. SCHINDLER, II, Appellant,
v.
AUSTWELL FARMERS COOPERATIVE, Appellee.
No. 13-91-085-CV.
Court of Appeals of Texas, Corpus Christi.
March 5, 1992.
Opinion on Motion for Rehearing April 2, 1992.
Second Rehearing Overruled May 7, 1992.
*285 Edmond J. Ford, Jr., Corpus Christi, for appellant.
James H. Robichaux, Matthews & Branscomb, Corpus Christi, for appellee.
Before NYE, C.J., and FEDERICO G. HINOJOSA, Jr., and DORSEY, JJ.
OPINION
FEDERICO G. HINOJOSA, Jr., Justice.
Charles J. Schindler, II, appeals from a judgment entered in favor of Austwell Farmers Cooperative for actual damages arising from breach of contract and fraudulent misrepresentation in the amount of $65,722.11, exemplary damages in the amount of $10,000.00, and attorney's fees. Appellant raises 16 points of error, complaining that the evidence did not establish fraud, that the trial court should have required appellee to elect between remedies, and that the trial court erred in overruling appellant's motion for continuance. We disagree and affirm the judgment of the trial court.
Appellant is a cotton and grain farmer who, on March 10, 1987, executed an account agreement with appellee, a supplier of agricultural products. Between May 1989 and August 1989, appellant purchased over $193,000.00 worth of products from appellee on credit. Appellant made three payments to appellee, the last one on July 6, 1989, and returned many products for credit to his account. Appellant's account included purchases made by his father, Charles Schindler, I, and his cousin, Rodney Johnson. The balance of appellant's account is a debt of $65,722.11.
On May 8, 1989, appellant brought his account current, paying with three separate checks, drawn on three separate checking accounts. The checking accounts were in the names of "Charles J. Schindler II Farms," "Futuro Farms, Inc." and "Rodney Johnson Farms." Futuro Farms, Inc. is a corporation wholly owned by appellant, that was incorporated in 1986, had its charter forfeited on January 18, 1988, and had it reinstated on January 18, 1990. Neither Futuro Farms nor Rodney Johnson Farms had accounts with Austwell, and the three checks went to pay the entire amount that appellant owed Austwell on his personal account. Appellant contended that on May 8, 1989, immediately after he brought his account current, he told Austwell's manager that his account had to be separated from the accounts of his father, his cousin, and his corporation, and that from then on, all goods had to be charged to the actual purchaser. Appellee contended that no such discussion had occurred, that appellant had merely represented that he was paying according to his personal bookkeeping system, and that appellant had never disputed or rescinded his father's and cousin's authority to make purchases on his behalf.
During the summer of 1989, appellant, his father and his cousin procured over $193,000.00 worth of goods on appellant's account. Appellant made three payments on his account, using the three-check system, and returned large amounts of the purchased goods for credit. On August 4, 1989, appellant requested from appellee that certain defoliants be charged to his account. Appellee allowed the purchase despite an outstanding balance of $90,000.00 on appellant's account, because appellant acknowledged the debt and assured appellee that it would be paid in full. Appellant offered no evidence to dispute this transaction. This purchase, together with subsequent purchases, totalled $40,698.53.
Appellant and appellee next discussed the outstanding balance in late September or early October, 1989, at which time appellee released a large amount of grain appellant stored at the Co-op. Appellee contends that the grain release was induced by appellant's promise to pay his debt in full. Appellant contends that appellee had no right to withhold the grain, that the grain did not belong to him at the time it was *286 released, and that appellee suffered no injury by releasing the grain, other than a possible offset against the sued-for account.
After appellee unsuccessfully attempted to collect the debt on appellant's account, it filed this lawsuit. Appellee pleaded loss on a sworn account, and upon appellant's denial of the account, appellee pleaded breach of contract, fraudulent misrepresentation, and conspiracy to defraud. The jury found that appellant had executed the account agreement, that he had knowingly and fraudulently obtained the goods that were charged to his account, and that he owed $65,722.11 on the account.
By his fifth point of error, appellant complains that the trial court erroneously entered judgment based on fraud when the appellee suffered injury only under the contract.
As a general rule, failure to perform the terms of a contract yields contract liability, not tort liability. See International Printing Pressmen & Assistants' Union v. Smith, 145 Tex. 399, 198 S.W.2d 729, 735-36 (1946). However, a contract to perform in the future is actionable fraud when it is made with the intention, design and purpose of deceiving, and with no intention of performing. Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex.1986). A party's failure to perform the contract, standing alone, is no evidence of that party's intent not to perform at the time the contract was made. Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 596 (1992); Spoljaric, 708 S.W.2d at 435. Failure to perform is a circumstance to be considered with other facts to establish intent to defraud. Since intent to defraud is not susceptible to direct proof, it invariably must be proven by circumstantial evidence. "Slight circumstantial evidence" of fraud, when considered with the breach of promise to perform, is sufficient to support a finding of fraudulent intent. Spoljaric, 708 S.W.2d at 435.
Austwell pleaded and the jury found that appellant had knowingly and fraudulently obtained the goods that were charged to his account. If there is sufficient evidence to support the jury's answer to Question No. 5 that appellant committed fraud, then the judgment based on fraud is sound.
By his third point of error, appellant complains that there is no evidence or insufficient evidence to support a finding of fraud. When we consider a legal sufficiency or no evidence point, we examine the record for evidence supporting the finding and ignore all evidence and inferences to the contrary. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex. 1988). When we consider a factual sufficiency point of error, we examine all the evidence to determine if the finding is so contrary to the overwhelming weight and preponderance of the evidence that it is clearly wrong. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Shearson Lehman Hutton, Inc. v. Tucker, 806 S.W.2d 914, 926 (Tex.App. Corpus Christi 1991, writ dism'd w.o.j.); Reviea v. Marine Drilling Co., 800 S.W.2d 252, 254 (Tex.App.Corpus Christi 1990, writ denied). We may reverse if the great weight of the evidence mandates an opposite determination, and then we will show why the determination was so contrary to the evidence to be clearly wrong. Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988); Shearson Lehman Hutton, Inc., 806 S.W.2d at 926.
We have carefully reviewed the entire record. The record includes the Co-op manager's testimony that appellant, prior to purchasing additional goods, acknowledged his debts and promised to pay them in full. Relying on that promise, Austwell allowed appellant to purchase additional goods. Austwell's manager testified that appellant gave his relatives authority to purchase and pick up goods on his behalf. In response to interrogatories, appellant denied giving anyone such authority. Austwell's manager also testified that, after May 1989, appellant personally appeared at the Co-op "nearly all the time" and charged purchases to his account, that appellant never requested that the Co-op create accounts for Rodney Johnson Farms or Futuro Farms, and that appellant did *287 not claim that Austwell was improperly charging him with purchases attributable to other parties until he answered interrogatories in this case in March 1990. Two of appellant's former employees testified that appellant paid them wages from the three separate checking accounts, even though the employees never worked for Futuro Farms or Rodney Johnson. In addition, all purchases in question occurred during the period that Futuro Farms, Inc., appellant's wholly-owned corporation, had lost its charter, and appellant was personally liable for its debts.[1]
Appellant contends that the tender of payment with three checks from separate checking accounts establishes his claim that the goods were purchased on behalf of various farming operations and that Austwell improperly charged him for goods attributable to other parties. Appellant's father and cousin testified that on May 8, 1989, they discussed the billing problems with the Co-op's manager. Appellant also testified, through deposition, that he told the Co-op's manager that his account was improperly billed.
The jury may believe or disbelieve testimony of any witness. Hipp v. J.D. Lowrie Well Service, Inc., 800 S.W.2d 668, 672 (Tex.App.Corpus Christi 1990, writ denied). The weight and credibility of the testimony of any witness is determined by the fact-finder. Intent is a fact question uniquely within the realm of the trier of fact because it so depends upon the credibility of the witnesses and the weight to be given to their testimony. Spoljaric, 708 S.W.2d at 434.
After reviewing the record, we are unable to state that the jury's finding is so against the great weight and preponderance of the evidence that it is manifestly unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). The evidence is legally and factually sufficient to support the jury's finding of fraud. Appellant's third and fifth points of error are overruled.
By his first, second and fourth points of error, appellant complains of the sufficiency of the evidence to support a finding that Austwell suffered actual damages of $65,722.11. Austwell produced evidence that, after May 8, 1989, appellant charged $193,362.38 worth of products and was given credit for $127,640.27 in payments and returned products. Appellant did not dispute the accuracy of the invoices; he only argued that the charges were not attributable to him. Austwell established actual damages of $65,722.11 arising from fraud. Appellant's first, second and fourth points of error are overruled.
By his sixth point of error, appellant complains of the sufficiency of the evidence to support an award of exemplary damages. A party is entitled to exemplary damages based upon fraud. Coronado Transmission Co. v. O'Shea, 703 S.W.2d 731, 736 (Tex.App.Corpus Christi 1985, writ ref'd n.r.e.). Having reviewed the record as discussed above, we find the evidence is sufficient to support the jury's award of exemplary damages. See Tatum v. Preston Carter Co., 702 S.W.2d 186, 188 (Tex.1986); Shearson Lehman Hutton, Inc., 806 S.W.2d at 925. The award of $10,000.00 exemplary damages bears a reasonable relationship to the actual damages awarded by the jury and is not excessive under the facts of this case. See John Deere Co. v. May, 773 S.W.2d 369, 379 (Tex.App.Waco 1989, writ denied); First State Bank v. Ake, 606 S.W.2d 696, 702 (Tex.Civ.App.Corpus Christi 1980, writ ref'd n.r.e.). Appellant's sixth point of error is overruled.
By his seventh point of error, appellant complains that the trial court erred by overruling his motion to disregard jury findings of fraud, actual damages and exemplary damages. The trial court may, upon proper motion, disregard any jury *288 finding on a question that has no support in the evidence. Tex.R.Civ.P. 301. Having found evidence to support these findings, we overrule point of error seven.
By his eighth point of error, appellant complains that attorney's fees should not be awarded in a case of fraud. Attorney's fees are statutorily authorized for a breach of contract or action on a sworn account. Gill Sav. Ass'n v. Chair King, Inc., 797 S.W.2d 31 (Tex.1990) (per curiam); Worley v. Butler, 809 S.W.2d 242, 245 (Tex.App.Corpus Christi 1990, no writ); Tex.Civ.Prac. & Rem.Code Ann. § 38.001 (Vernon 1986). Attorney's fees may be awarded when a party recovers damages for a tort arising from a breach of contract. Gill Sav. Ass'n, 797 S.W.2d at 31; Wilson v. Ferguson, 747 S.W.2d 499, 504 (Tex.AppTyler 1988, writ denied).
Austwell pleaded the existence of the contract debt and presentment of charges due. The jury found that appellant had executed the account agreement in question and that $65,722.11 was due on the account. Austwell pleaded and the jury found that appellant had knowingly and fraudulently obtained the goods that were charged to his account. Attorney's fees may be awarded in this instance. Appellant's eighth point of error is overruled. Appellant's twelfth point of error, complaining that the trial court erred by overruling his motion to disregard jury findings on attorney's fees, is also overruled. Tex. R.Civ.P. 301.
By his thirteenth and fourteenth points of error, appellant complains that the judgment for attorney's fees is improper, since Austwell's attorney did not segregate time spent on the tort claim from time spent on the contract claim and did not segregate time spent pursuing third parties.
Attorney's fees may be recovered upon a finding of fraud arising out of a breach of contractual relations. Gill Sav. Ass'n, 797 S.W.2d at 31. If causes of action are so intertwined that they are more or less inseparable, the total amount of attorney's fees may be awarded and a segregation of work is unnecessary. Richard Gill Co. v. Jackson's Landing, 758 S.W.2d 921, 928-29 (Tex.App.Corpus Christi 1988, writ denied); Burditt v. Sisk, 710 S.W.2d 114, 116 (Tex.App.Corpus Christi 1986, no writ).
In the present case, the jury found fraud arising from a breach of contractual relations. Attorney's fees are, therefore, recoverable. Even if they were not so recoverable, the causes of action of fraud and breach of contract in this case are so intertwined that a segregation of work is unnecessary. No evidence was offered that Austwell had incurred additional attorney's fees as a result of its joinder of Rodney Johnson and Charles Schindler, I. Austwell's pleadings named these two individuals as parties but did not request judgment against them. Austwell's attorney testified that Rodney Johnson and Charles Schindler, I, had been joined for formal requirements only and that no attorney's fees were attributable to their joinder.[2] We overrule appellant's thirteenth and fourteenth points of error.
By his ninth point of error, appellant complains that appellee is not entitled to exemplary damages in a breach of contract case. Exemplary damages have been properly awarded in this case, since the jury found that appellant had committed fraud. Crim Truck & Tractor Co., 35 Tex.S.Ct.J. at 345, 823 S.W.2d at 596; Spoljaric, 708 S.W.2d at 435. We overrule appellant's ninth point of error.
By his tenth point of error, appellant complains that the trial court should require Austwell to elect between inconsistent remedies for fraud and breach of contract prior to the entry of judgment. Where a party proves fraud arising from breach of contract, that party may recover attorney's fees and exemplary damages. See Gill Sav. Ass'n, 797 S.W.2d at 31-32. Since Austwell may recover attorney's fees *289 and exemplary damages for appellant's fraud, it confronts no situation requiring an election. Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 367 (Tex. 1987); Kish v. Van Note, 692 S.W.2d 463, 466-67 (Tex. 1985). We overrule appellant's tenth point of error.
By his eleventh point of error, appellant complains that the trial court failed to state the form of actual damages awarded. The judgment of the trial court should be framed to give the party all the relief to which he may be entitled. Tex. R.Civ.P. 301. Birchfield, 747 S.W.2d at 367. Austwell's pleadings requested actual damages, exemplary damages and attorney's fees. It is entitled to those awards upon the proper jury findings. Austwell pleaded breach of contract and fraud causes of action. The jury found breach of contract and fraud and made separate and distinct findings of actual damages of $65,722.11 under each theory. The trial court granted judgment against appellant in the amount of $65,722.11, but did not specify whether such damages were for fraud or for breach of contract. Any error of the trial court in failing to state the form of the actual damages is harmless. Tex. R.App.P. 81(b)(1). We overrule appellant's eleventh point of error.
Appellant's fifteenth and sixteenth points of error complain that the trial court overruled his second and third motions for continuance. A trial court has discretion to grant or deny a motion for continuance, and an appellate court should reverse only upon a showing of abuse of discretion. Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 795 (Tex.1987). The record must affirmatively establish that the trial court acted arbitrarily and unreasonably for an appellate court to reverse the trial court for abuse of discretion. Simon, 739 S.W.2d at 795; Nautical Landings Marina, Inc. v. First Nat'l Bank, 791 S.W.2d 293, 297 (Tex.AppCorpus Christi 1990, writ denied). A complaining party bears the burden of presenting a sufficient record to show error. Tex. R.App.P. 50(d). Appellant provides no record of the hearing on his second motion for continuance.
Appellant has provided a record of the hearing on his third motion for continuance. That motion requested continuance on the grounds of appellant's illness and lack of opportunity for appellant and counsel to adequately develop available defenses. The record reflects that appellant's condition had improved since the hearing on his second motion for continuance, which was also urged on illness grounds. The record further indicates that appellant discharged his counsel and obtained new counsel two weeks before trial, despite his former counsel's warning that a continuance would not likely be granted and despite Austwell's response to appellant's motion to substitute counsel, that it would object to any motion for continuance by appellant based on inadequate preparation of counsel.
We cannot say that the trial court abused its discretion by denying appellant's third motion for continuance. We overrule appellant's fifteenth and sixteenth points of error.
We affirm the judgment of the trial court.
OPINION ON MOTION FOR REHEARING
Charles J. Schindler, II, moves this court to rehear his appeal stemming from a judgment entered after a jury found breach of contract and fraudulent misrepresentation issues against him and found actual damages of $65,722.11 arising from each issue. Appellant argues that when a party to a contract suffers only economic loss to the subject matter of the contract, the action sounds in contract alone and exemplary damages may not stand. We overrule the motion for rehearing.
The general rule is that the failure to perform the terms of a contract is a breach of contract, not a tort. See International Printing Pressmen & Assistants' Union v. Smith, 145 Tex. 399, 198 S.W.2d 729, 735-36 (1946). When a party suffers only economic injury to the subject *290 matter of the contract, the action sounds in contract, not in tort. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986). However, a party who promised to do a future act with no intent to perform and with intent to deceive may be liable for fraud. Crim Truck & Tractor Co. v. Navistar Int'l Transp., 823 S.W.2d 591, 597 (Tex. 1992); Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex.1986). The question becomes whether fraud under the Spoljaric theory overcomes the Jim Walter Homes requirement of a distinct actual injury.
In Spoljaric, an executive was fraudulently promised a bonus if he agreed to continue employment with the company. The jury found an oral contract to pay the bonus, breach of the contract, and fraudulent misrepresentation. The jury found $30,000 actual damages and $750,000 punitive damages. The Court of Appeals reversed and rendered on the misrepresentation issue, holding that there was no evidence to support the finding. Id. at 434. The Supreme Court reversed the decision of the Court of Appeals and remanded for consideration of factual sufficiency points, finding there was some evidence of the defendant's lack of intent to perform under the contract. Id. at 436. The significance of Spoljaric in this context is that the only injury the plaintiff suffered was the unpaid bonus due under the oral contract, yet the right of the plaintiff to recover punitive damages was upheld, since "[a] finding of intent to harm or conscious indifference to the rights of others will support an award of exemplary damages." Id. at 436.
Appellant cites American Nat'I Petroleum Co. v. Transcontinental Gas Pipe Line Corp., 798 S.W.2d 274 (Tex.1990) and Hebisen v. Nassau Development Co., 754 S.W.2d 345, 348 (Tex.App.Houston [14th Dist.] 1988, writ denied) for the proposition that a distinct actual damage must be attributable to the tort and not attributable to the breach of contract for the tort to survive.
In Hebisen, a jury found that the defendant breached a rental agreement and never intended to perform some of its terms, that the plaintiff relied on the misrepresentations to his detriment, and that the defendant made the representations with intent that the plaintiff would act upon them. The evidence was held to be sufficient. Hebisen, 754 S.W.2d at 348. The Court of Appeals, however, reversed the award of punitive damages because the only actual damages were "the economic loss to the subject of the contract itself." Id. at 348. Hebisen is the only case we have found that applies Jim Walter Homes to reverse a jury finding of fraud and a jury finding of actual damages due to fraud.
In American Nat'l Petroleum, a mineral rights owner sued a purchaser for breach of contract and tortious interference with a gas balancing agreement it held with a third party. The Texas Supreme Court was asked whether a tort finding could stand when the party failed to submit a jury issue on actual damages. The Court answered that the defendant waived error when it stipulated actual tort damages were equal to damages on the contractual breach. American Nat'l Petroleum, 798 S.W.2d at 278. No distinct injury attributable only to the tort and not to the contract was found by the jury. The Court noted that the measure of damages in a commercial relations tort may be "economic," but that they are, nevertheless, damages for the tort. "The basic measure of actual damages for tortious interference with contract is the same as the measure of damages for the breach of the contract interfered with, to put the plaintiff in the same economic position he would have been in had the contract interfered with been actually performed." Id. at 278.
We understand that in American Nat'l Petroleum, the breached contract was not the same contract as that which was tortiously interfered with by the defendant. We do note, however, the stipulation that damages due to defendant's breach were equal to damages caused by defendant's tortious conduct, the ruling that actual tort damages were established, and the ruling that exemplary damages may follow, and we conclude that American Nat'l Petroleum is no authority for the argument that an injury attributable to the tort alone *291 must be proven for a tort to survive when a contract is breached.
Appellant also relies heavily on Justice Gonzalez's dissent in American Nat'l Petroleum. Justice Gonzalez would have required the plaintiffs to prove a distinct tortious injury with actual damages. Id. at 283 (Gonzalez, J., dissenting). We are bound, however, only by the majority opinion. We note that the cases Justice Gonzalez cites in his American Nat `I Petroleum dissent, with the exception of Hebisen, do not include a situation in which a jury found fraud and actual damages arising from fraud. In Adolph Coors v. Rodriguez, 780 S.W.2d 477, 485 (Tex.App.Corpus Christi 1989, writ denied), the tort was negligence, not fraud. In Lone Star Steel Co. v. Scott, 759 S.W.2d 144, 156 (Tex. App.Texarkana 1988, writ denied), the court found no evidence of fraudulent misrepresentation. In Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 745 (Tex.1986), the jury found no damages arose from the tort. Finally, in International Bank, N.A. v. Morales, 736 S.W.2d 622 (Tex. 1987), and Texas Nat'l Bank v. Karnes, 111 S.W.2d 901 (Tex.1986), there was no jury finding that any tort was committed.
Two arguments can be advanced to decline to extend the Jim Walter Homes rule to a case in which the tort complained of is fraudulent inducement to contract. First, the rationale for Jim Walter Homes is that contractual remedies are limited to compensatory damages in common law and by statute, regardless of the culpable mental state of the breaching party. Jim Walter Homes, Inc., 711 S.W.2d at 618. The purpose of this breacher-friendly rule is to promote economic efficiency by allowing a party to intentionally remove himself from a contract that becomes unfavorable under later market conditions. The general policy is that the aggrieved party deserves the benefit of the bargain, but the aggrieving party does not deserve punishment. See Restatement (Second) of Contracts § 355 comment a (1981). This rule should not be extended to benefit parties who fraudulently enter contracts they have no intention of performing.
Second, appellant's argument that any tort committed in a contractual relationship must have a damage element independent of any damages suffered to the subject matter of the contract would completely eliminate fraudulent misrepresentation in procurement of a contract as a tort. Only under the rarest of circumstances will a party be able to show some personal injury or harm to property not the subject of the contract to support a tort finding. If appellant's position is the state of the law and the policy of the courts of this state, Spoljaric would not be constantly cited for the proposition that fraudulent entry to contract is a tort.
We are of the opinion that a party who enters a contract with no intention of performing, shows intent to harm or conscious indifference to the rights of others and is liable for exemplary damages. Spoljaric, 708 S.W.2d at 436. We decline to follow the reasoning of the Fourteenth District Court of Appeals and hold that a jury finding of fraudulent misrepresentation and a jury finding of actual damages caused by the misrepresentation, will support an award of exemplary damages. We overrule the motion for rehearing and affirm the judgment of the trial court.
NOTES
[1] If a corporation fails to pay franchise taxes, it forfeits its corporate privileges, and the directors and officers of the corporation are liable for debts incurred in this state after the tax is due and before the corporate privileges are revived. This personal liability is not affected by the revival of the charter or certificate and the corporate privileges. Tex.Tax Code Ann. § 171.-255 (Vernon 1982).
[2] Appellant had joint bank accounts with Rodney Johnson and Charles Schindler, I. Johnson and Schindler, I, were joined as parties to obtain the bank records of these accounts and to avoid the applicability of Tex.Rev.Civ.Stat.Ann. art. 342-705 (Vernon Supp.1992). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1618869/ | 792 S.W.2d 759 (1990)
Constance VICKERY, Charles R. Vickery, Jr., G. Warren Coles, Jr., First National Bank of Bellaire and Mayde Creek Bank, N.A., Appellants,
v.
TEXAS CARPET CO., INC., Appellee.
No. B14-89-00074-CV.
Court of Appeals of Texas, Houston (14th Dist.).
May 31, 1990.
Rehearing Denied June 28, 1990.
*760 Peter J. O'Loughlin, Houston, for appellants.
Alan Magenheim, Donna Bolding, Robert W. Davidson, Houston, for appellee.
Before ROBERTSON, SEARS and DRAUGHN, JJ.
OPINION
SEARS, Justice.
Constance and Charles Vickery and G. Warren Coles appeal from a judgment rendered in favor of Texas Carpet. In thirty-six points of error, the Vickerys and Mr. Coles allege (1) the trial court erred in failing to grant their motion for new trial, (2) the evidence was factually and legally insufficient to support the judgment, (3) the trial court erred in failing to file findings of fact and conclusions of law, and (4) the trial court erred in not acting on their motion to recuse the trial judge. We affirm.
In the spring of 1985, Warren Coles and Charles Vickery began plans to construct Mayde Creek Bank. Constance Vickery planned the decoration of the bank. Mrs. Vickery ordered the carpet for the bank from Texas Carpet Co. Some of the carpet she ordered had to be specially dyed to coordinate with the decor of the bank. When the carpet was to be installed, Texas Carpet installed only part of the carpet. That part of the carpet that had to be specially dyed was faulty so Texas Carpet sent it back to the manufacturer. Texas Carpet installed the tacking strips for the remaining carpet and left the padding for that carpet in the bank. When the remaining carpet was ready to be installed, appellants did not allow Texas Carpet to install the carpet because they had not yet received a charter for the bank. Appellants then refused to pay for any of the carpet. Subsequently, appellants sold the bank building to Mayde Creek Bank, N.A. without compensating Texas Carpet for the padding and carpet installed, or the padding delivered to the site.
Texas Carpet filed suit against the Vickerys, the Coles, First National Bank of Bellaire, and Mayde Creek Bank for the *761 money owed on the carpet, padding, and installation. The trial court entered partial summary judgment for Texas Carpet for the value of the delivered and installed carpeting and padding, and the additional padding delivered. At the hearing on that motion, on August 1, 1988, the trial judge ordered the case set for trial the week of October 1, 1988. At that time, Charles Vickery was attorney of record, but Ruben Valdes appeared at the hearing instead of Mr. Vickery because Mr. Vickery was ill. On October 3, 1988, the court called the case for trial at 9:00 a.m. on October 4, 1988. The court coordinator advised Texas Carpet's counsel to appear and Texas Carpet's counsel called Mr. Vickery and advised him of the setting. Mr. Valdes did not file a motion to substitute as counsel until the morning of the trial, and he declared that his substitution would not operate as a delay in the trial of the case. However, at approximately the same time, Mr. Valdes filed a motion for continuance seeking a postponement of the trial setting because he was previously set for trial in another court at that time. Neither of these motions were submitted to the trial judge. Neither Mr. Valdes, nor any of his clients appeared for trial. The court heard Texas Carpet's evidence and found in favor of Texas Carpet.
Appellants filed a motion for new trial, alleging their failure to appear was not intentional or the result of conscious indifference, that they had a meritorious defense, and that the granting of a new trial would not prejudice the opposing party. Appellants further alleged that the evidence was legally and factually insufficient to support the judgment. Appellants also filed a request for findings of fact and conclusions of law and a motion to recuse the trial judge. The trial court denied the motion for new trial.
In their first eight points of error appellants challenge the trial court's denial of their motion for new trial with regard to setting aside the default judgment. A motion for new trial is addressed to the trial court's sound discretion; therefore, we do not disturb the court's ruling on that motion absent a finding of abuse of discretion. Mission Ins. Co. v. Hill, 679 S.W.2d 578, 579 (Tex.App.Texarkana 1984, writ ref'd n.r.e.). A new trial should be ordered and a default judgment set aside when the defendant's failure to appear was not intentional or the result of conscious indifference on his part, but was due to a mistake or accident. Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (1939). The defendant's motion for new trial must set up a meritorious defense and must be filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff. Id. at 126. In reviewing this case in which the attorney did not appear for trial, we treat it the same as one in which a default judgment is entered after a defendant fails to answer. Ivy v. Carrell, 407 S.W.2d 212, 213 (Tex.1966). In determining whether there was intentional disregard or conscious indifference, the trial court looks to the knowledge and acts of the defendant. Id.
Appellants have not demonstrated they conclusively established at the hearing on their motion for new trial that the failure of their attorney to appear for trial was not the result of conscious indifference. Appellants' argument is that they presented undisputed testimony at the hearing on motion for new trial that their attorney was not present for trial in this case because he was in another court on another matter. Appellants' evidence falls short of establishing that the appellants' attorney's failure to appear for trial was not intentional or the result of conscious indifference.
The morning of trial, Ruben Valdes filed a motion for substitution of counsel, replacing Charles R. Vickery, Jr. as counsel. Valdes then filed a motion for continuance citing as his reason for continuance that he was scheduled for trial that day in another court on another matter. Valdes did not present the motion for continuance to the court or in any way call it to the attention of the judge before the time of trial. The trial judge had no duty to rule on the motion for continuance in the absence of Valdes or the appellants. See Guidry v. *762 Massey, 572 S.W.2d 47, 49 (Tex.Civ.App. Houston [1st Dist.] 1978, no writ). Valdes also testified that he made no effort to have the judge of the court in which he was previously set for trial release him to present his motion for continuance to the trial court in this case. Because appellants failed to present their motion for continuance to the court and they did not even appear for trial, appellants have not shown that their failure to appear was not the result of conscious indifference. The trial court did not abuse its discretion by proceeding to trial. Points of error one through eight are overruled.
In points nine through twenty-nine appellants claim the evidence was legally and factually insufficient to support the trial court's findings that (1) a contract existed, (2) the contract satisfied the statute of frauds, (3) the amount of actual damages, (4) plaintiff's performance of the contract, (5) an authorized agent contracted to purchase the carpet, (6) misrepresentations by appellants, and (7) the amount of attorney's fees.
With regard to legal insufficiency points, we will consider only the evidence tending to support the finding, viewing it in the most favorable light in support of the finding, giving effect to all reasonable inferences that may properly be drawn therefrom and disregarding all conflicting evidence. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965).
Where the challenge to a finding is framed as an insufficient evidence point, the appellate court is to consider all the evidence in the case, both that in support of and that contrary to the finding, to determine if the challenged finding is so against the great weight and preponderance of the evidence as to be manifestly unjust. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951).
Although the defendants filed an answer, they failed to appear for trial. The plaintiff in such a situation must proceed to trial and prove his case and see to it that a court reporter was present to make a record. Bibby v. Preston, 555 S.W.2d 898, 901 (Tex.Civ.App.Tyler 1977, no writ). The defendants, by failing to appear at trial, do not abandon their answers nor make an implied confession of any issues joined. Frymire Engineering Co., Inc. v. Grantham, 524 S.W.2d 680, 681 (Tex.1975). In this case, plaintiff proceeded to trial and presented evidence.
In reviewing the evidence, we find that plaintiffs proved their case of breach of contract and conversion. Robert Martin, secretary and vice president of Texas Carpet, testified that Mrs. Vickery ordered carpet for the Mayde Creek Bank, some of which had to be specially ordered because it required a special dye. In December 1985, Texas Carpet installed all the carpet except the specially dyed carpet because that carpet was faulty when it came from the manufacturer so Texas Carpet sent it back. The installers installed the tack strips and left the padding for the extra carpet. When the specially dyed carpet was returned, Texas Carpet could not finish the installation of the carpet because appellants would not allow them to install it. Mr. Vickery told Texas Carpet not to install the carpet until appellants received the bank charter. Texas Carpet presented appellants with an invoice and sent a letter demanding payment at least 30 days before filing suit. Lorriane Balusik, treasurer and vice president of Texas Carpet, testified that the total amount owed by the Vickerys was $10,050.07 and that they had incurred attorney's fees of $12,500. We find this evidence is sufficient to support the trial court's findings of liability, actual damages, and attorney's fees. Points nine through twenty-nine are overruled.
In points of error thirty through thirty-two appellants claim the trial court erred in awarding exemplary damages. Appellants argue that, because appellee recovered under a breach of contract action and there was no finding of malice, exemplary damages could not be assessed. The evidence, however, supported a finding of conversion, which, in this case is sufficient to sustain an assessment of exemplary damages.
*763 Conversion is the unauthorized and unlawful exercise of dominion and control over property inconsistent with or to the exclusion of another's superior rights in that property. Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 446 (Tex.1971). Appellee established conversion by showing that appellants sold the bank building without allowing Texas Carpet to recover their carpet or compensating them for the padding and carpet installed or the padding delivered to the bank. A showing of a willful and knowing conversion, or a conversion in reckless disregard of the rights of others, is sufficient to sustain an assessment of exemplary damages. First Nat'l Bank of McAllen v. Brown, 644 S.W.2d 808, 810 (Tex.App.Corpus Christi 1982, writ ref'd n.r.e). The element of malice may be inferred from a showing of willful and knowing conversion. Steakley Bros. Chevrolet, Inc. v. Westbrook, 558 S.W.2d 544, 547 (Tex.Civ.App.Waco 1977, writ ref'd n.r.e). We find sufficient evidence of a willful and knowing conversion; therefore, we find sufficient evidence to support exemplary damages. Points thirty through thirty-two are overruled.
In points thirty-three and thirty-five, appellants claim the trial court erred in failing to file findings of fact and conclusions of law. Findings of fact and conclusions of law were timely requested and a reminder was timely filed. When a trial court fails to prepare and file findings of fact and conclusions of law as required by rule 296 of the Texas Rules of Civil Procedure, harm is presumed. Wagner v. Riske, 142 Tex. 337, 178 S.W.2d 117, 119 (1944). The presumption of harm, however, may be overcome, and the judgment need not be reversed if the record affirmatively shows that the complaining party suffered no injury. Lee v. Thornton, 658 S.W.2d 234, 235 (Tex.Civ.App.Houston [1st Dist.] 1983, writ ref'd n.r.e); TEX.R. APP.P. 81. The method for determining whether an appellant was injured as a result of the court's failure was addressed in Fraser v. Goldberg, 552 S.W.2d 592, 594 (Tex.Civ.App.Beaumont 1977, writ ref'd n.r.e). There the court stated:
Undoubtedly there are situations in which findings and conclusions are necessary in order for the appellant to present his case. In factually complicated situations in which there are two or more grounds for recovery or defense, and undue burden would be placed on the appellant. Having to try to guess the reasons the trial court ruled against him should not be required.
In this case, there is no doubt why the trial court ruled against the appellants; they failed to appear at trial and presented no defense, and plaintiffs' evidence was simple and sufficient. Therefore, the failure to file findings of fact and conclusions of law is harmless error. Points thirty-three and thirty-five are overruled.
In points of error thirty-four and thirty-six appellants claim the trial court erred in not acting on their motion to recuse and their bill of exceptions on their motion to recuse. The procedural requirements for recusal, as set out in Rule 18a of the Texas Rules of Civil Procedure, are mandatory and a party who fails to comply with Rule 18a waives his right to complain of a judge's failure to recuse himself. Gaines v. Gaines, 677 S.W.2d 727, 730 (Tex.App.Corpus Christi 1984, no writ); Humble Exploration Co. v. Browning, 677 S.W.2d 111, 114 (Tex.App.Dallas 1984, writ ref'd n.r.e). Rule 18a requires that a motion to recuse a judge assigned within ten days of trial "be filed at the earliest practicable time prior to the commencement of the trial." In this case, appellants did not file their motion until after the trial. Clearly, this was not the "earliest practicable time prior to the commencement of the trial." By filing their motion after the trial, appellants waived any claim that the trial judge recuse himself. Points thirty-four and thirty-six are overruled.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1630451/ | 723 F. Supp. 780 (1989)
James Harold HUMPHREYS, Plaintiff,
v.
PIE NATIONWIDE, INC.; Truck Drivers and Helpers, Local 728, Defendants.
Civ.A. No. 1:87-CV-0150-JOF.
United States District Court, N.D. Georgia, Atlanta Division.
September 22, 1989.
*781 Gerald P. Kline, Bauer, Deitch & Raines, John Arthur Bender, Jr., Federal & Todd, Atlanta, Ga., for plaintiff.
John Paul Jones, Jones & Cushman, Clearwater, Fla., Peter Reed Corbin, Corbin & Dickinson, Jacksonville, Fla., Fredrick C. McLam, High House Law Offices, Decatur, Ga., for defendants.
ORDER
FORRESTER, District Judge.
This matter is before the court on defendant PIE Nationwide Inc.'s motion for summary judgment as supplemented pursuant to the court's order of January 6, 1989. Fed.R.Civ.P. 56.
I. STATEMENT OF FACTS.
The parties to this action are plaintiff James Harold Humphreys; defendant PIE Nationwide, Inc. (hereinafter "defendant PIE"), plaintiff's former employer; and defendant Teamsters Local No. 728 (hereinafter "the defendant union"), a labor organization of which plaintiff was a member. Until August of 1986, plaintiff was employed as a truck driver and "checker" for defendant PIE, and, at all times relevant to this action, was a member of the defendant Union. As such, he was a beneficiary of a collective bargaining agreement in effect between the defendants. This agreement contained, inter alia, a "Uniform Testing Procedure For Illegal Drug Induced Intoxication." See Complaint, Exhibit A. This procedure outlined (1) employees subject to drug testing; (2) chain of custody procedures; (3) laboratory methodology for testing; and (4) permissible disciplinary action which an employer such as defendant PIE could take based upon positive test results.
On July 9, 1986, plaintiff was notified that his routine physical examination was to include a urinalysis test for drug usage. He was subsequently directed to report to Howell Mill Industrial Clinic, Inc. (Howell Mill) for this purpose.[1] As instructed, plaintiff reported to Howell Mill on August 14, 1986 and subjected himself to urinalysis testing. When the urinalysis results allegedly showed marijuana usage by plaintiff, defendant PIE terminated his employment August 15, 1986.[2]
After allegedly exhausting his grievance procedures under the collective bargaining agreement in effect between the defendants, plaintiff initiated this action January 29, 1987, alleging defendants' breach of the collective bargaining agreement. See 29 U.S.C. § 185. In particular, plaintiff alleges that it was a breach of the agreement to subject him to the urinalysis testing because his job status as a checker exempted him from mandatory testing (Count I). Moreover, plaintiff alleges common law negligence in defendant PIE's failure to ensure compliance with chain of custody procedures with respect to his urine sample (Count IV), as well as intentional infliction of emotional distress (Count II). Count III alleges the defendant union's breach of duty of fair and adequate representation.[3] By the present motion, defendant PIE asserts its entitlement to judgment as a matter of law on Counts I, II and IV.
II. CONCLUSIONS OF LAW.
A. Preemption.
Defendant PIE's first contention is that plaintiff's state law claims for negligence *782 and intentional infliction of emotional distress are preempted by the National Labor Relations Act, 29 U.S.C. § 151, et seq. Preemption under the NLRA is "to be fleshedout on a case-by-case basis." Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct.1904, 1916, 85 L. Ed. 2d 206 (1985). In general, it is appropriate only where the conduct giving rise to the state law claims is a protected activity under § 7 of the NLRA or constitutes an unfair labor practice under § 8. The preemption doctrine will not apply, however, if the activity sued upon is of only peripheral concern of the NLRA or touches "interests so deeply rooted in local feeling and responsibility that, in the absence of compelling congressional direction, [courts] could not infer that Congress had deprived the states of the power to act." Carter v. Sheet Metal Workers International Association, 724 F.2d 1472, 1473 (11th Cir.1984) (quoting San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244, 79 S. Ct. 773, 779, 3 L. Ed. 2d 775 (1959)). With these principles in mind, the court will examine plaintiff's state law tort claims.
1. Negligence.
As alluded to above, plaintiff alleges that defendant PIE negligently failed to ensure that chain of custody procedures with respect to his drug test were followed and that this negligence resulted in his unlawful discharge. It is clear that the duty which defendant PIE is alleged to have breached is created by the collective bargaining agreement. See Complaint, Ex. A, pp. 3-4. While not every state law claim involving a collective bargaining agreement is necessarily preempted, Allis-Chalmers Corp., 471 U.S. at 210-11, 105 S.Ct. at 1910-11, preemption is appropriate if resolution of the claim requires interpretation of the contract or its provisions. Id. at 218, 105 S.Ct. at 1914; Lingle v. Norge, Division of Magic Chef, 486 U.S. 399, 108 S. Ct. 1877, 100 L. Ed. 2d 410 (1988). In such an instance, the challenged conduct is clearly more than a mere peripheral concern of the NLRA and, as it is "inextricably intertwined with consideration of the terms of the labor contract," Allis-Chalmers Corp., 471 U.S. at 213, 105 S.Ct. at 1912, cannot be viewed as "unrelated" to activity regulated by the act. See Carter, 724 F.2d at 1473-74. Furthermore, the preemptive effect of the NLRA extends beyond state law contract claims and includes claims sounding in tort as well. See Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 302-305, 97 S. Ct. 1056, 1064-1066, 51 L. Ed. 2d 338 (1977). For these reasons, the court finds that plaintiff's negligence claim is preempted by the NLRA. Accordingly, defendant PIE's motion for summary judgment as to Count IV of plaintiff's complaint is GRANTED.
2. Intentional Infliction of Emotional Distress.
Plaintiff's complaint contains a second claim for relief which alleges that defendant PIE, through its agents, engaged in certain outrageous conduct and thereby caused plaintiff to suffer emotional distress. Specifically, plaintiff asserts that shortly after he declined a proposed salary reduction and request to resign, he was assigned "heavy labor duties" normally not assigned employees in his position; that he was instructed to submit to drug testing though he was not required to do so by virtue of his position; that defendant PIE refused to permit him to be re-tested for drug use though he offered to pay the cost of re-testing himself; and that he was provided with equipment and machinery defendant PIE knew to be in dangerous mechanical condition.
When an employee who is covered by a collective bargaining agreement files a lawsuit stemming from a discharge from employment and which alleges state tort claims, the district court must carefully consider whether § 301 preemption applies. Section 301 of the LMRA creates a federal cause of action for breach of collective bargaining agreements. In order to preserve uniformity, even a suit sounding in tort, rather than on breach of a collective bargaining agreement, is governed by federal law if the action is "inextricably intertwined with consideration of the terms of [a] labor contract." Allis-Chalmers Corp., 471 U.S. at 213, 105 S.Ct. at 1912. *783 Moreover, § 301 preempts all state law causes of action which require interpretation of a labor contract's terms. See, e.g., id. at 214-20, 105 S.Ct. at 1912-15 (finding preempted a state tort based on the duty to act in good faith and deal fairly, because the meanings of "good faith" and "fair dealing" were derived from the particular labor agreement). Accord Lingle v. Norge, Division of Magic Chef, Inc., 486 U.S. 399, 108 S. Ct. 1877, 1885, 100 L. Ed. 2d 410 (1988).
As this court recognizes that § 301 does not preempt every employment dispute tangentially involving the labor agreement, see Lingle, 108 S.Ct. at 1881-83, it will proceed to analyze the plaintiff's contentions under the Supreme Court's most recent articulations of the standard: Does the application of state law "require[] the interpretation of a collective bargaining agreement," Lingle, 108 S.Ct. at 1885, or "substantially depend[] upon analysis of the terms of an agreement made between the parties in a labor contract?" Allis-Chalmers Corp., 471 U.S. at 220, 105 S.Ct. at 1916.
In his opposition to motion for summary judgment, plaintiff argues that under Lingle, his action does not require interpretation of the collective bargaining agreement, inasmuch as his claim for intentional infliction of emotional distress has an independent basis under state law. A state law claim is independent for the purposes of § 301 if "resolution of ... it does not require construing the collective bargaining agreement." Lingle, 108 S.Ct. at 1877. At first blush, it might appear from the language of the complaint that plaintiff's intentional infliction of emotional distress claim falls outside § 301 and need not call for an interpretation or construction of the collective bargaining agreement. "It is a well-established general rule in [Georgia] that in order to sustain a cause of action for the tort of intentional infliction of emotional distress, the defendant's actions must have been so terrifying or insulting as naturally to humiliate, embarrass or frighten the plaintiff." Moses v. Prudential Ins. Co. of Amer., 187 Ga.App. 222, 224, 369 S.E.2d 541 (1988). None of the proof of the elements of the tort require interpretation of the collective bargaining agreement.
Yet, the allegations of the complaint alone will not always resolve the preemption issue. Lingle makes clear that the defenses, as well as claims, must be considered in determining whether resolution of the state law claim requires interpretation of the collective bargaining agreement. The key to determining the scope of § 301 preemption is not, therefore, based on how the complaint is framed, but whether the claims can be resolved only by referring to the terms of the collective bargaining agreement. See Newberry v. Pacific Racing Ass'n, 854 F.2d 1142, 1146 (9th Cir. 1988) (emphasis added). The factual background of the whole case must be examined against an analysis of the state tort claim and a determination made whether the provisions of the collective bargaining agreement come into play. In the present case, defendant PIE's defenses attempt to implicate the collective bargaining agreement. Accordingly, this court must carefully analyze whether in actuality interpretation or construction of the collective bargaining agreement is required in considering such defenses.
After reviewing the complaint and subsequent pleadings, this court concludes that plaintiff's intentional infliction of emotional distress claim is not based exclusively on state law and is, in fact, inextricably intertwined with consideration of the terms of the collective bargaining agreement. As to most if not every action deemed by the plaintiff to have caused his emotional harm, the labor agreement and not state law provides the standard for appropriate conduct. For example, work assignments and testing protocol are almost unfettered calls by employers, limited ordinarily only by collective bargaining agreements.[4] Because *784 an evaluation of these issues is substantially dependent upon an analysis of the terms of the collective bargaining agreement, the intentional infliction of emotional distress claim is preempted by § 301. See Beers v. Southern Pacific Transportation Co., 703 F.2d 425, 429 (9th Cir.1983) (preemption proper where employee's complaint concerned working conditions and disciplinary procedures which are rights covered by or substantially related to the collective bargaining agreement).
Although plaintiff does not contend that its emotional distress claim fits within the exception federal preemption carved out by the Supreme Court in Farmer v. United Brotherhood of Carpenters, 430 U.S. 290, 97 S. Ct. 1056, 51 L. Ed. 2d 338 (1977), this court feels compelled to address the issue in its order. In Farmer, a union member brought a claim of intentional infliction of emotional distress against his union and its officials, alleging a pattern of outrageous conduct that included "frequent public ridicule," "incessant verbal abuse," and discrimination in hiring referrals. Id. at 293, 97 S.Ct. at 1060. The Farmer Court held that federal law did not preempt the plaintiff's state law claim for intentional infliction of emotional distress, reasoning that no provision of the NLRA protected against the "outrageous conduct" complained of by the union employee. See id. at 305, 97 S.Ct. at 1066. The Court noted that the state's substantial interest in protecting its citizens from the kind of personal abuse of which the employee and Farmer complained outweighed any potential for interference with the federal scheme of regulation. See id. at 302-04, 97 S.Ct. at 1064-65.
The Court established a two-pronged alternative standard for permitting concurrent state court jurisdiction over tort actions: "Simply stated, it is essential that the state tort be either unrelated to employment discrimination or a function of the particularly abusive manner in which the discrimination is accomplished or threatened rather than a function of the actual or threatened discrimination itself." Id. at 305, 97 S.Ct. at 1066 (emphasis added).
Plaintiff's emotional distress claim is based upon allegations that his supervisors at PIE harassed him through a course of conduct which included reassignment of work duties, assignment of work on equipment known to be in dangerous mechanical condition, and improper administration of drug testing. To the extent that plaintiff would assert that either of these allegations fit within the first prong of the Farmer exception to preemption, the argument is without merit. "The Farmer Court's characterization of the first prong in the Farmer test that the tort be `unrelated to employment discrimination'is equivalent to the requirement that the facts not be `inextricably intertwined' with a labor law duty established by the collective bargaining agreement." Truex v. Garrett Freightlines, Inc., 784 F.2d 1347, 1351 (9th Cir.1985). As concluded above, plaintiff's emotional distress claim is substantially dependent upon an analysis of the collective bargaining agreement and is, therefore, preempted under § 301.
Inasmuch as plaintiff would further argue that defendant PIE's campaign of harassment is sufficiently outrageous that it satisfies the requirements of the second prong of the Farmer exception, this argument also is meritless. Plaintiff's factual allegations do not advance his cause in light of the circuit court's narrow construction of the "particularly abusive manner" exception required by Farmer. In Carter v. Sheet Metal Workers International Assn., 724 F.2d 1472 (11th Cir.1984), the Eleventh Circuit held that a conspiracy to deny plaintiff employee work opportunities did not rise to the level of outrageous conduct required to avoid preemption under Farmer. See id. at 1476; see also Magnuson v. Burlington Northern, Inc., 576 F.2d 1367, 1369 (9th Cir.1978) (holding that complaint for emotional distress will not fit within "the narrow exception to the federal preemption explained in [Farmer]").
Here, the emotional distress allegedly arose out of the plaintiff's discharge or the *785 conduct of defendant PIE in the investigatory proceedings leading up to the discharge. The harassment against which plaintiff complains falls way short of the truly outrageous conduct identified in Farmer. Moreover, defendant PIE's reassignment of plaintiff's work duties and drug investigation was not accomplished in such an abusive manner that it falls outside the conduct regulated by the collective bargaining agreement. In sum, plaintiff's declarations filed in opposition to defendant PIE's motion for summary judgment do not set forth any facts which would support a finding of outrageous conduct; rather, plaintiff's declarations merely recite specific acts of harassment, all of which were covered by the grievance procedure of the National Master Freight Agreement. Therefore, the conduct in the instant case does not fall within the Farmer exception to federal preemption. For these reasons, the court finds that plaintiff's intentional infliction of emotional distress claim is preempted by § 301 of the LMRA. Accordingly, defendant PIE's motion for summary judgment as to Count II of plaintiff's complaint is GRANTED.
B. 29 U.S.C. § 185.
A party seeking judicial review of an otherwise final and binding arbitration proceeding must demonstrate (1) that the union breached its duty of fair representation to him during the proceeding; and (2) that the employer engaged in conduct violative of the collective bargaining agreement. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S. Ct. 1048, 47 L. Ed. 2d 231 (1976); Samples v. Ryder Truck Lines, Inc., 755 F.2d 881 (11th Cir.1985). The court will examine these factors in turn. The court has previously determined that a question of fact exists as to whether the defendant union fulfilled its duty to plaintiff to provide fair representation during his dismissal proceedings. See Order of January 6, 1989. In addition, the court finds that a question of fact exists as to whether proper chain of custody procedures were followed with respect to plaintiff's drug test and therefore whether defendant PIE breached this aspect of the collective bargaining agreement. Accordingly, defendant PIE's motion for summary judgment on Count I of plaintiff's complaint is DENIED.
III. CONCLUSION.
In sum, defendant PIE's motion for summary judgment is GRANTED as to Count IV of plaintiff's complaint and DENIED as to Counts I and II. The parties are DIRECTED to prepare and submit the proposed consolidated pretrial order for the court's consideration within thirty (30) days of the date of this order.
IT IS SO ORDERED.
NOTES
[1] Howell Mill was dismissed from this action by order entered July 7, 1987.
[2] Plaintiff returned to Howell Mill on August 15, 1986 and requested that he be re-tested. However, Howell Mill refused to repeat the urinalysis test upon instructions from defendant PIE that plaintiff not be re-tested. A similar request was refused again August 16, 1986. Despite plaintiff's inability to obtain re-testing by Howell Mill, plaintiff alleges that he did secure two additional urinalysis tests within thirty days after the initial tests. Both tests allegedly showed no marijuana usage by plaintiff.
[3] The court has previously denied the defendant union's motion for summary judgment on this latter count. See Order of January 6, 1989.
[4] Defendant PIE and Local 728 were parties to the National Master Freight Agreement and Southern Conference Area Local Freight Forwarding Pickup and Delivery Supplemental Agreement. See Defendant PIE's Answers to Interrogatories, Exhibit H; Article 16 "Equipment and Safety"; Article 46 "Discharge or Suspension." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1667327/ | 562 So. 2d 1258 (1990)
STA-HOME HOME HEALTH AGENCY, Inc.
v.
Nancy Simpson UMPHERS, Bobbie Malone & Mid-Delta Home Health Agency, Inc.
No. 07-CA-58971.
Supreme Court of Mississippi.
May 16, 1990.
*1259 Wes W. Peters, Satterfield & Allred, Thomas L. Kirkland, Jr., Kirkland Barfield & Panter, Jackson, for appellant.
James H. Powell, III, Durant, Melvin V. Priester, Jackson, Frank D. Stimley, Madison, Dennis C. Sweet, III, Owens & Owens, Jackson, for appellees.
Before DAN M. LEE, P.J., and ANDERSON and PITTMAN, JJ.
DAN M. LEE, Presiding Justice, for the Court:
Sta-Home Home Health Agency (plaintiff below/appellant here) sought injunctive and other relief against Nancy S. Umphers, Bobbie Malone and Mid-Delta Home Health, Inc. (defendants below/appellees here).
After a full hearing on October 5-7, 1987, the learned chancellor rendered his findings and opinion on November 4, 1987, denying appellant any of the relief requested. Being aggrieved, Sta-Home made a timely appeal and assigned as error the following:
(1) Whether the chancellor erred by denying appellant the enforcement of its non-competition agreements;
(2) Whether the chancellor erred in ruling that appellant had come into court with unclean hands;
(3) Whether the chancellor erred in placing any relevancy on the proposals to the physicians;
(4) Whether the chancellor erred in finding that the non-competition agreements were too vague, ambiguous and nonsensical to be enforceable;
(5) Whether the chancellor was clearly erroneous in his finding that the evidence did not support a claim of conspiracy or intentional interference with contract against appellee Mid-Delta;
(6) Whether the chancellor erred in denying appellant the relief requested by its Complaint?
STATEMENT OF THE FACTS
Sta-Home Home Health Agency, Inc., is a non-profit corporation with its principal place of business in Jackson, Mississippi. Sta-Home operates through five separately *1260 maintained corporations whose various principal places of businesses are located throughout the State of Mississippi. Under these corporations, Sta-Home maintains 19 separate offices. The geographic service area for which Sta-Home is licensed to serve by the Mississippi State Department of Health includes the following counties: Hinds, Madison, Rankin, Holmes, Attala, Yazoo and Leake Counties. The subject controversy involves appellant's branch offices in Lexington and Durant, Holmes County, Ms.
Nancy S. Umphers and Bobbie Malone are registered nurses who were formerly in the employ of Sta-Home, but who now work for appellee, Mid-Delta, a similar competing agency.
Umphers began working for Sta-Home around 1976 and Malone began working for the same agency around August 1, 1984. Each entered into a written employment contract with Sta-Home whereby they agreed to perform nursing services on behalf of patients or clients of Sta-Home. On or about December 12, 1980, while in the employ of Sta-Home, Umphers was required by Sta-Home to sign a so-called non-competition agreement. Likewise, in 1984 when Malone went to work for Sta-Home she was required to sign an identical non-competition agreement which was separate from the written employment agreement.
About the last week in June 1987, Doris Sanford, and Joyce Caracci, both of whom were agents and full-time employees of Sta-Home, approached every physician then practicing in the towns of Durant and Lexington in Holmes County, Mississippi, and offered each physician direct contracts with Sta-Home.
The parties dispute Sta-Home's intent and motives for offering the physicians this contract and quarrel over the interpretation of key parts of the proposed contract. Nevertheless, this Court finds that one can certainly read the contract to mean that if accepted as written, each doctor would hire his own nurse or nurses to perform skilled home health visits; that he would be responsible for all pay and benefits to any nurses so hired; and that for each skilled nursing visit performed by said nurses, the physician would be reimbursed by Sta-Home in the sum of Twenty Dollars ($20.00) per skilled nursing visit. After paying the doctor, Sta-Home would keep the remaining portion of the fee. Sta-Home's main function would be to screen the patients to see if they were eligible for home health care and do the paperwork. It is easily conceived how one reading the proposed contract or having the plan explained for the first time could conclude that, in the end, it would mean the termination of a great portion of Sta-Home's nursing staff.
Moreover, once the plan was presented to the doctors, Sta-Home's nightmare began. A couple of doctors stopped referring patients because they felt that Sta-Home, by this proposal, was attempting to improperly buy patient referrals.
Meanwhile, upon learning of the proposed plan through the grapevine and not as a result of communications from Sta-Home, her employer, co-defendant Nancy Umphers became concerned and had a discussion with Doris Sanford, the Regional Director of Nurses for Sta-Home. Ms. Sanford had accompanied Ms. Joyce Caracci, Administrator of Sta-Home (also the wife of Mr. Vic Caracci, Executive Director of Sta-Home), as a representative of appellant to make the proposals to those doctors. At this time Ms. Sanford told Umphers of the proposal and explained it as she understood it. Ms. Sanford confirmed Ms. Umphers' suspicion that this proposal would affect the nurse's employment. Umphers expressed her concern that the contracts were selling out the nurses, i.e., they would eliminate the nurses' jobs with Sta-Home; furthermore, she thought the contract scheme amounted to buying patient referrals and in her opinion the contracts were unethical and probably illegal.
Co-defendant Bobbie Malone also contacted Doris Sanford who told her that she and Ms. Caracci had encouraged Dr. Bills to use her on his staff. To add to the confusion and concerns that had now enveloped Umphers, Ms. Sanford encouraged *1261 both Umphers and Malone to line up their own employment with each doctor before the other nurses who were then under contract with Sta-Home found out about the proposals. Apparently, fearing the loss of her job and dissatisfied with the explanation she was receiving from her supervisor, Umphers began sounding the drums by advising other Sta-Home employees of the developing situation.
Although appellant disputes Umphers' motives for doing so, Umphers tendered her resignation on July 6, 1987, effective July 31, 1987. Thereafter, Umphers set up a meeting for July 7, 1987 with Clara Reed, Administrator and Director of Nursing for Mid-Delta, allegedly to discuss employment possibilities with Mid-Delta. A meeting was indeed held on said date at Mid-Delta's Tchula, Mississippi office, Mid-Delta not then having an office in either Lexington or Durant. At least five (5) Sta-Home employees including both co-defendants were at the meeting.
By this time, a mutinous atmosphere had gripped the ranks of the employee nurses of Sta-Home and by the end of July 1987, twelve (12) employees, including Bobbie Malone, had turned in their resignations and had marched over to the employ of Mid-Delta, which consequently set up new offices in Lexington and Durant. Also, approximately 60 patients were transferred from Sta-Home to Mid-Delta. The after-affect of this melee was best summed up by appellee Umphers when she exclaimed, "the Caraccis have just lost Holmes County."
This Court is impressed with the thoroughness and completeness of the learned chancellor's opinion in denying all relief requested by appellant. We agree with his findings and quote liberally therefrom:
Sta-Home claims that Malone and Umphers wrongfully caused many of the patients they were treating while working for Sta-Home to transfer to Mid-Delta where they continued administering to them. More specifically, plaintiff claims that Malone and Umphers, using private and proprietary information of plaintiff, conspired with Mid-Delta to unfairly compete and to assist Mid-Delta in unfairly competing within plaintiff's licensed geographic service area. Plaintiff further claims (1) that prior to their termination with plaintiff Umphers and Malone conspired with Mid-Delta to solicit Sta-Home's patients to terminate the services of plaintiff and subscribe to the services of Mid-Delta; (2) that Umphers and Malone conspired with Mid-Delta to solicit doctors whose patients were under plaintiff's care to discharge them from plaintiff's care so that they could be picked up and treated by Mid-Delta, Malone and Umphers; and (3) that Umphers and Malone conspired with Mid-Delta to solicit or cause other employees of plaintiff to quit and go to work for Mid-Delta. Plaintiff asserts that the alleged acts of Malone and Umphers constituted a breach of their contracts with plaintiff and a breach of certain duties which they owed plaintiff. Plaintiff also asserts that the actions of the defendants interfered with advantageous business relations between plaintiff and its patients and doctors and that Mid-Delta wrongfully interfered with plaintiff's contract with Malone and Umphers.
The plaintiff sought to enjoin the defendants from soliciting their patients and employees and to enjoin Malone and Umphers from competing with plaintiff within its geographically assigned area or affiliating with an agency in competition with plaintiff.
The Court having duly considered the evidence and briefs of counsel, concludes as follows:
1. The court has jurisdiction of the parties and the subject matter.
2. The evidence fails to establish that Umphers and Malone have violated and breached their contract with plaintiff; the non-competition agreements being unenforceable.
The evidence fails to establish that Umphers and Malone have without good cause breached duties, if any, owed to plaintiff and that Mid-Delta *1262 has breached any duties imposed by state and federal regulations.
The evidence fails to establish that Mid-Delta has interfered with advantageous business relations which existed between plaintiff and its patients and doctors who have recommended a plan of treatment with plaintiff. Further the evidence fails to establish that Umphers and Malone have without good and justifiable cause interfered with advantageous business relations which exist between plaintiff and its patients and doctors who have recommended a plan of treatment with plaintiff.
The evidence fails to show that Mid-Delta has conspired with and aided Umphers and Malone in soliciting patients of Sta-Home, in soliciting doctors who had established a plan of treatment for plaintiff's patients to discharge patients, in soliciting employees of plaintiff to terminate their employment and to unfairly compete with plaintiff or to show that Mid-Delta intentionally interfered with the contracts existing between Malone and Umphers and the plaintiff.
3. Plaintiff relies upon the non-competition agreement which was signed by both Umphers and Malone as a basis for enjoining them from competing with it for a year in its service area. I have read and reread the agreement, but in truth I find it nonsensical. I agree with the defendants that it is too vague, indefinite and ambiguous as to be enforceable.
4. Plaintiff's main business appears to be supplying home nursing service to its patients which means plaintiff hires most nurses on a contract basis and sends them into patients' homes to render the services recommended by their treating physicians. The contracting nurses are paid by the agency based on the number of home visits they make. The plaintiff bills the patient or Medicare for its services. Malone and Umphers were contract nurses for plaintiff while employed by it. Plaintiff apparently wanting to eliminate the headaches attendant to hiring nurses, paying them, maintaining payroll and other records on them, and furnishing employee benefits came up with an idea which it decided to present to some local doctors in Holmes County. Plaintiff proposed to the doctors that they hire their own nurses to furnish home nursing services to their patients rather than referring the patients to the plaintiff who furnished the nurses. The doctors then would refer patients to the plaintiff for billing purposes only and plaintiff would bill the patient or Medicare. For such referrals the doctors would be paid by plaintiff a specific amount for each home visit his nurse made. This proposal was make to the doctors by plaintiff through its representatives in July 1987. In physics there is a principle that for every action there is an equal opposite reaction and that reaction is what occurred when plaintiff's employees including Umphers and Malone found out what plaintiff was attempting to do. Obviously, if the plan succeeded, plaintiff would need few nurses on its payroll and few employees since much of the record keeping would be shifted to the participating doctors. It took no imagination for Malone, Umphers and other employees of plaintiff to realize that they were subject to being terminated by plaintiff when such a plan was put into effect. In fact, representatives of plaintiff informed Umphers and Malone that they should start lining up doctors (and their patients) they could work for rendering home health services. There is little wonder why the revolt of nurses, including Umphers and Malone, and other employees of plaintiff occurred. The plaintiff's action in this regard induced the very situation it now complains of. Plaintiff's grievances arise from its own inequitable conduct and its failure to keep good faith with its employees. The defendants Umphers and Malone suggest that the plaintiff abandoned its contract with them, including the non-competition agreement, when it encouraged *1263 them to seek other employment with local physicians. I agree with that position. However, also available to both Umphers and Malone is the "clean hands" doctrine that he who comes into equity must come with clean hands. The plaintiff's proposed contract which it suggested to the physicians appear to me to be in violation of the clear language of paragraph 700.1 of the Minimum Standards of Operation for Home Health, the licensing authority for home health agencies. It may well be as suggested by Malone and Umphers that the contract floated by plaintiff with the physicians actually constituted violations of law. At a minimum plaintiff's conduct was in my opinion improper and less than fair to its employees. As is stated in 28 Am Jur 2d Injunctions Sec. 35 and cited with approval in Pearl River Valley Water Supply District v. Wright, 186 So. 2d 202 (Miss. 1966) an injunction should not issue where the party seeking it "has pursued a course of conduct that precipitated the trouble... ." That is what happened here and the injunctive relief should not be granted.
The practices among doctors, nurses, and home health agencies as revealed by the testimony is [sic] this case leads me to the conclusion that the best interest of our aged and infirmed [sic] deserves close scrutiny by our state licensing department. Nevertheless, I find nothing in the conduct of Malone, Umphers or Mid-Delta that merits the recovery sought by plaintiff.
For the reasons stated the complaint should be dismissed with prejudice at plaintiff's cost.
CONCLUSION
We find abundant evidence in the trial record to support the chancellor's findings of fact. It is well established that our appellate review is upon the entire record and "the evidence which supports or reasonably tends to support the findings of fact made below, together with all reasonable inferences which may be drawn therefrom and which favor the lower court's findings of fact, must be accepted." Culbreath v. Johnson, 427 So. 2d 705 (Miss. 1983), citing Blakeney v. Blakeney, 244 So. 2d 3 (Miss. 1971). We stated the rationale for this rule in Culbreath as follows:
Appellate courts regularly admonish themselves to give substantial deference to findings of fact made by the trier of fact. In a case such as this such admonitions are peculiarly appropriate.
427 So.2d at 708.
Applying our limited principles of appellate review to the case sub judice, we find no grounds to disturb the chancellor's findings at the trial level. Further, we choose not to speak in particular to each assigned error; the chancellor's opinion speaks for itself.
We add a final comment. It is extremely helpful to us when the trial judge sets forth in sufficient detail his/her thinking and reasoning for his/her findings on each issue designated. This expedites the appellate process and aids us immensely. The chancellor in the case sub judice did so and we commend his efforts.
Accordingly, the decree of the Chancery Court of Holmes County, Mississippi, dated November 16, 1987, be and the same is hereby affirmed. Appellant is taxed with all costs of this appeal.
AFFIRMED.
ROY NOBLE LEE, C.J., HAWKINS, P.J., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON, PITTMAN and BLASS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1692813/ | 310 So. 2d 725 (1975)
FORTUNE FURNITURE MANUFACTURING COMPANY, INC.
v.
MID-SOUTH PLASTIC FABRIC COMPANY, INC.
No. 47975.
Supreme Court of Mississippi.
April 7, 1975.
*726 O'Barr, Coleman & Burns, Okolona, for appellant.
John D. Sibley, Okolona, for appellee.
Before GILLESPIE, ROBERTSON and SUGG, JJ.
GILLESPIE, Chief Justice.
Mid-South Plastic Fabric Company, Inc., (Mid-South) sued Fortune Furniture Manufacturing Company, Inc., (Fortune) in the Circuit Court of Chickasaw County for plastic goods sold to Fortune by Mid-South. Fortune admitted owing Mid-South the amount sued for, $32,962.63, but filed a set-off or counterclaim for $39,028.79, and demanded judgment against Mid-South for the $6,066.16 difference. Mid-South denied owing Fortune any part of the counterclaim and pleaded several affirmative defenses later to be mentioned. The jury found for Fortune in the amount demanded in the counterclaim. The court sustained a motion of Mid-South for judgment notwithstanding the verdict. Judgment was entered for Mid-South in the amount demanded in its declaration. Fortune appealed.
Fortune was engaged in manufacturing furniture in Okolona, Mississippi. On or before July 8, 1968, Phil Stillpass, who lived in New York, and W.E. Walker, who lived in Okolona, called at the office of Fortune and talked to Sidney Whitlock, President of Fortune, about plastics. Stillpass was in the business of selling plastics and Fortune needed plastics in the manufacture of furniture. A tentative oral agreement was reached whereby a company by the name of Mid-South would sell plastics to Fortune. Whitlock told Walker and Stillpass to send him a letter containing the terms of the contract. On July 8, 1968, the following letter was mailed to Whitlock and received in due course:
Mr. Sidney Whitlock, President Fortune Furniture Manufacturers, Inc. Okolona, Mississippi 38860
Dear Sid:
This is to confirm the agreement entered into this date between myself and Phil Stillpass on behalf of Mid-South Plastic Co. Inc. and you on behalf of Fortune Furniture Manufacturing Co. Inc.
We agree to maintain expanded and 21 oz. Plastic in the warehouse of Mid South Furniture Suppliers, Inc. in sufficient amounts to supply all of the plastic for your plant's use, and if for any reason we do not have the necessary plastic you will be at liberty to purchase the plastic from any other source and we will pay the difference in price paid the other source and our current price.
We also agree to pay Fortune a 2% rebate on the gross sale price of our plastic as an advertisement aid to your Company which rebate to be paid at your request.
We assure you that all fabrics you need will be in our warehouse at all times and we appreciate your agreeing to buy all of your plastics from us.
Very truly yours,
W.E. Walker, President
Mid-South was organized with a corporate charter dated July 22, 1968. Stillpass was elected chairman and secretary-treasurer *727 and W.E. Walker was elected president. No one on behalf of Mid-South, other than Walker and Stillpass, contacted Fortune concerning the sale of plastics. Fortune began buying all its plastics from Mid-South. It was only when Mid-South was unable to supply all of Fortune's needs that Fortune bought from other suppliers. The difference between the amount paid to other suppliers for plastic when Mid-South was unable to meet Fortune's requirements and Mid-South's price, plus the two percent rebate provided in the letter, totaled $39,028.79, the amount of Fortune's counterclaim. Other facts are stated in discussing the specific issues. The foregoing facts are stated in the light most favorable to Fortune for whom the jury found.
If the testimony on behalf of Fortune made a jury issue, the motion for judgment notwithstanding the verdict should have been overruled. Carlize v. Richards, 216 So. 2d 422 (Miss. 1968).
There are two questions presented on this appeal.
1. Is Mid-South bound by the letter?
The principal argument of Mid-South is that the letter dated July 8, 1968, written by Walker, purportedly on behalf of Mid-South and as president thereof, is not binding because Mid-South did not come into existence until July 22, 1968, the date of the charter. It is contended by Mid-South that the letter could not have been the act or the creation of Mid-South which was not then a corporate entity and that there was no ratification or adoption of the contract by affirmative action of the company after its incorporation.
The general rule is that a contract made by promoters with a view towards incorporation will be binding upon the corporation if it accepts benefits of the contract with the full knowledge of the terms of the contract. Morgan v. Bon Bon Co., Inc., 222 N.Y. 22, 118 N.E. 205 (1917); Annot., 17 A.L.R. 452 (1922); 18 Am.Jur.2d, Corporations § 119 (1965).
There are several theories upon which corporations have been held liable, including the theory of adoption and the theory of ratification. In Pearl Realty Co. v. Wells, 164 Miss. 300, 145 So. 102 (1933), the Court spoke in terms of "ratification" and upheld a contract for services rendered in obtaining a cancellation of a lease to a lot upon which Pearl Realty Company subsequently erected a building. Pearl Realty Company was incorporated after the negotiations between the promoter of the corporation and Wells. In concluding that the corporation had ratified the contract made by the promoters, the Court said:
It is permissible for promoters to make contracts which, if ratified by corporations after they are organized, will bind the corporations. 7 R.C.L. pp. 81, 82, §§ 60, 61, Mulverhill v. Vicksburg Ry., Power & Mfg. Co., 88 Miss. 689, 40 So. 647, and Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241. 164 Miss. at 311, 145 So. at 103.
An analysis of Pearl Realty Company indicates that the term "ratification" in that opinion does not refer to any formal act of the corporation, but rather that the corporation adopted the contract and received the benefits of it with full knowledge on the part of all parties concerned in the corporation's organization of the manner and conditions under which it had been obtained. The Court held that under such circumstances the contract was binding on the corporation.
The general rule is that adoption may be implied from the acts or acquiescence of a corporation without express acceptance or ratification, and the adopting corporation will be liable if its responsible officers have or are chargeable with knowledge of the facts upon which it acts. Annot., 17 A.L.R. 452 (1922).
Stillpass and Walker, the only executive officers of Mid-South, initiated *728 and concluded the agreement that was reduced to writing in the letter to Fortune. Stillpass admitted that Mid-South would not have been organized without Fortune's account. The jury was fully justified in finding that these two officers had full knowledge of the terms of the contract and took advantage of it to sell more than $1,000,000 in goods to Fortune as a result of the contract. We are of the opinion that the jury was justified under the evidence in finding that Mid-South was bound by the terms of the letter of July 8, 1968.
2. Is the letter a sufficient memorandum in writing to satisfy the statute of frauds?
In Derden v. Morris, 247 So. 2d 838 (Miss. 1971), this Court held that there are three requirements as to the memorandum necessary to take a case outside the statute of frauds provisions of the Uniform Commercial Code: (1) The memorandum must evidence a contract for the sale of goods; (2) it must be signed by the party against whom enforcement is sought, and (3) it must specify a quantity.
Walker's letter provides for the sale of goods (expanded and 21 oz. plastic) and states a quantity ("all of the plastic for your plant's use"). The Uniform Commercial Code recognizes output or requirement contracts in Mississippi Code Annotated section 75-2-306(1) (1972) as follows:
A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.
The letter is signed by Walker, who was elected president of Mid-South upon its organization, and as already found, this contract was adopted by Mid-South. We hold that the letter satisfies the statute of frauds and was binding upon Mid-South.
All factual issues were resolved against Mid-South by the jury, whose verdict was justified by the evidence. We hold the trial court erred in sustaining the motion for a judgment notwithstanding the verdict and judgment is entered here reversing that judgment, reinstating the jury verdict, and judgment entered here in favor of Fortune for $6,066.16, with interest at the rate of six percent (6%) from May 4, 1973.
Reversed and rendered.
RODGERS, P.J., and PATTERSON, INZER, SMITH, WALKER and BROOM, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1745499/ | 524 So. 2d 308 (1988)
Lucille McGOWAN, Individually and on Behalf of the Wrongful Death Beneficiaries of John L. McGowan
v.
The ESTATE OF Ruby C. WRIGHT, Deceased, and A.J. Reese, as Administrator.
No. 57424.
Supreme Court of Mississippi.
February 3, 1988.
As Modified on Denial of Rehearing April 20, 1988.
*309 Polly J. Covington, Peter K. Smith, Ltd., Quitman, for appellant.
Thomas R. Jones, Bourdeaux & Jones, Meridian, for appellee.
Before ROY NOBLE LEE, C.J., and PRATHER and ZUCCARO, JJ.
ROY NOBLE LEE, Chief Justice, for the Court:
Lucille McGowan, widow of John L. McGowan, Deceased, and A.J. Reese, Administrator of the Estate of John L. McGowan, deceased intestate, filed suit against the Estate of Ruby C. Wright in the Circuit Court of Clarke County, Mississippi, for damages, actual and punitive, as a result of the wrongful death of McGowan. The jury returned a verdict for the plaintiffs in the sum of nineteen hundred fifty-nine dollars fifty cents ($1,959.50), the exact amount of the funeral expenses and ambulance fees, and judgment was entered by the lower court in that amount. The plaintiffs have appealed and assign six (6) errors in the trial below.
On January 20, 1982, John L. McGowan was riding in 1970 Buick automobile owned and driven by Ruby C. Wright in a southerly direction on Mississippi State Highway 11. Jessie L. Hayden was driving his pickup truck in a northerly direction in the northbound lane of the highway, and the vehicles were approaching and meeting each other. The vehicles collided head-on in the northbound lane, resulting in the instant death of McGowan. Ruby C. Wright died eight (8) days later.
On September 30, 1985, this suit was filed against the Estate of Ruby C. Wright, Deceased, seeking actual and punitive damages for the wrongful death of McGowan. The case was heard March 13-14, 1986, and the trial judge granted a peremptory instruction on liability in favor of the appellants. The only question this Court deems necessary to answer is whether the damages were adequate and whether the judgment should be set aside and a new trial ordered on the issue of damages alone.
PUNITIVE DAMAGES
Punitive damages may be recovered in proper cases. In Bryant v. Alpha Entertainment Corp., 508 So. 2d 1094 (Miss. 1987), the Court defined those circumstances under which punitive damages are allowable:
In negligence cases this Court has held "punitive damages are allowable only *310 upon proof of gross negligence or willful misconduct." Jesco, Inc. v. Shannon, 451 So. 2d 694, 704 (Miss. 1984); Miss. Power Co. v. Jones, 369 So. 2d 1381 (Miss. 1979); Fowler Butane Gas Co. v. Varner, 244 Miss. 130, 141 So. 2d 226 (1962). "Punitive damages are ordinarily recoverable only in cases where negligence is so gross as to indicate a wanton disregard for the safety of others." U.S. Industries v. McClure Furniture Co., 371 So. 2d 391, 393 (Miss. 1979).
508 So.2d at 1098. See also Gardner v. Jones, 464 So. 2d 1144, 1148 (Miss. 1985); Consolidated American Life Ins. Co. v. Toche, 410 So. 2d 1303, 1304-05 (Miss. 1982).
The lower court granted punitive damages Instruction No. P-5 at the request of the plaintiff, which follows:
Punitive damages are added damages awarded for public service in bringing a wrongdoer to account, as an example to warn and deter others from repeating the same act. They are never awarded to benefit the injured party or as a matter of right, but rather to punish and to compel the wrongdoer to have due and proper regard for the rights of the public.
Punitive damages may be awarded Plaintiff if you find that the Defendant's reckless acts, if any, were committed by gross negligence indicative of a wanton and wilful disregard of the rights of others.
The evidence indicates that neither vehicle was exceeding the lawful speed limit, but the collision occurred in the northbound lane, not the proper lane of travel for Ruby C. Wright, just past a one-street intersection (another northbound street intersected Highway 11 at this juncture).
The award of punitive damages is within the discretion of the jury, which has very wide latitude in determining whether punitive damages should be granted and, if so, the amount of those damages. The jury may have concluded that, even though the collision occurred in Ruby Wright's wrong lane, she was guilty of only simple negligence. The punitive damage Instruction P-5 told the jury in part "They are never awarded to benefit the injured party or as a matter of right, but rather to punish and to compel the wrongdoer to have due and proper regard for the rights of the public." The jury may have concluded that, since the wrongdoer Ruby Wright lost her own life, such was punishment enough.
At any rate, the judgment may not be set aside, the jury having been properly instructed on the law of punitive damages.
ACTUAL DAMAGES
John L. McGowan was sixty-seven (67) years old at the time of his death with a life expectancy of 13.6 years. His annual income consisted of one hundred sixty-eight dollars ($168.00) per month Social Security and two hundred forty-one dollars ($241.00) per month via Veterans' Administration benefits, aggregating four hundred nine dollars ($409.00) per month. Lucille McGowan, the widow, testified that the amount of income received by the deceased would be required to support himself; and that it was not enough to support her.
Lucille McGowan testified in her own behalf. She and John L. McGowan were married October 30, 1943. No children were born of the marriage. John went into the service during World War II and was stationed at Ft. Devens, Massachusetts. Subsequently, Lucille moved to New York and for approximately nine (9) months, prior to John's reassignment overseas, she was able to see him on weekends. Thereafter, she began working in a factory to support herself and was so employed until approximately one (1) year after the accident in which John lost his life. John returned from overseas in February or March, 1946, and since that time, John and Lucille had lived apart. Intermittently, over the years, appellant visited John. Particular times were in 1950, 1955, 1958, and 1971. John never visited her. She and John had only spoken over the telephone for the last eleven (11) years of his life. The last time she saw him was in 1971.
Appellant produced only one item of writing she had received from John, a Christmas card mailed to her in 1981. She *311 had no explanation for the lack of mail correspondence.
John McGowan, the deceased, and Ruby C. Wright had lived together for approximately fifteen (15) years. At the time of his death, McGowan was living with Ruby Wright in her house trailer. According to Mary Gaddis, Ruby Wright's sister, Wright and McGowan had "lived like husband and wife" for the 15 years prior to their deaths.
The jury verdict in the sum of $1,959.50 in actual damages represented the aggregate sum of eighteen hundred ninety-five dollars ($1,895.00) funeral expenses and sixty-four dollars fifty cents ($64.50) ambulance fees.
Instruction P-4 submitted to the jury the following elements of damages:
1. Present net cash value at the time of his death of John L. McGowan's life expectancy.
2. Ambulance bill in the sum of $64.50 incurred by his estate.
3. Funeral and burial expenses in the sum of $1,895.00 incurred by his estate.
4. Damages for the loss of society and companionship are allowable even though Mr. and Mrs. McGowan were not living together as a family unit at the time of his death, ... .
The jury had all the facts before it on the question of damages for the loss of society and companionship and saw and heard appellant Lucille McGowan testify as to that element of damage. The jury obviously concluded that appellant had no loss of society and companionship and, therefore, suffered no damage.
Instruction D-8 defined the present net cash value of John McGowan's life expectancy, which included reduction of his gross annual income by the amount he would have spent on his own personal living expenses, and, again, the jury obviously concluded that there was no net cash value to his life expectancy.
Mississippi Code Annotated § 11-7-13 (Supp. 1984), provides that in a wrongful death action the party or parties suing shall recover such damages as the jury may determine to be just, taking into consideration all the damages of every kind to the decedent and all the damages of every kind to any and all parties interested in the suit. This statutory language has been held to include (1) the present net cash value of the life expectancy of the deceased, (2) the loss of the companionship and society of the decedent, (3) the pain and suffering of the decedent between the time of injury and death, and (4) punitive damages. Jesco, Inc. v. Whitehead, 451 So. 2d 706, 710 (Miss. 1984); Sheffield v. Sheffield, 405 So. 2d 1314, 1318 (Miss. 1981); Dickey v. Parham, 331 So. 2d 917, 918-919 (Miss. 1976); Thornton v. Ins. Co. of North America, 287 So. 2d 262, 265 (Miss. 1973); Scott v. K-B Photo Service, Inc., 260 So. 2d 842, 844 (Miss. 1972); Boyd Constr. Co. v. Bilbro, 210 So. 2d 637, 643 (Miss. 1968).
The verdict of the jury reflects that the only damages sustained by the appellant were the funeral expenses and ambulance fees to the estate of the deceased, which were proper items of recovery, and that there were no damages sustained by the widow, Lucille McGowan. We are unable to say that the jury verdict reflects passion or prejudice in the failure to return damages for the appellant Lucille McGowan. Under the facts of this case, it is not shocking to the judicial conscience.
The judgment of the lower court is affirmed.
AFFIRMED.
HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON, GRIFFIN and ZUCCARO, JJ., concur.
ROBERTSON, Justice, dissenting from denial of petition for rehearing:
At issue in this case is the measure of damages recoverable for the wrongful death of John L. McGowan. At the time of his death McGowan was 67 years old. He had a life expectancy of 13.6 years, a fact no one disputes. Immediately prior to his death McGowan had an income stream of $409.00 per month. The jury, however, found liability but in effect held that there was no compensable value to McGowan's *312 remaining life expectancy. Notwithstanding that this result is contrary both to law and logic and as well to common experience, the majority affirms.
I begin with our wrongful death statute, Miss. Code Ann. § 11-7-13 (Supp. 1987). In language which has long been a part of that statute, we find it declared that
In such action the party or parties suing shall recover such damages as the jury may determine to be just, taking into consideration all damages of every kind to the decedent and all damages of every kind of any and all parties interested in the suit. [Emphasis added]
In our early interpretations of this language, we considered as among the damages recoverable the "present value of the deceased's life expectancy." See Gulf and Ship Island Railroad Co. v. Boone, 120 Miss. 632, 659, 82 So. 335, 338 (1919); Mississippi Oil Co. v. Smith, 95 Miss. 528, 534, 48 So. 735, 736 (1909). In Boone, we posed the rhetorical question "What was this expectancy worth?" and answered that "Recovery must be based upon the evidence." 120 Miss. at 659, 82 So. at 338.
At this early time it was not clear that we were speaking exclusively of a present net pecuniary value of the deceased's life expectancy had he lived. Concededly, our early cases did suggest that present value damages were "rooted in the earnings of the deceased during his expectancy." Belzoni Hardware Co. v. Cinquimani, 137 Miss. 72, 95, 102 So. 470, 474 (1924); New Deemer Manufacturing Co. v. Alexander, 122 Miss. 859, 897, 85 So. 104, 107 (1920). Several decades later, however, the phrase "present net cash value of the life of the deceased" had crept into our cases. See Reed v. Eubanks, Admx., 232 Miss. 27, 40, 98 So. 2d 132, 138 (1957); Bush v. Watkins, 224 Miss. 238, 243-44, 80 So. 2d 19, 21-22 (1955); Gordon v. Lee, 208 Miss. 21, 34, 43 So. 2d 665, 667 (1949). More recently our cases repeat as if by rote the "present net cash value" language. See, e.g., Sheffield v. Sheffield, 405 So. 2d 1314, 1318 (Miss. 1981); United States Fidelity & Guaranty Co. v. Pearthree, 389 So. 2d 109, 112 (Miss. 1980); Wilson v. Slay, 259 So. 2d 126, 128 (Miss. 1972).
My concern is that we have come to ignore the unmistakeable breadth of the language of the statute. However legitimate may be inclusion of the elements of wrongful death damage as recited by the majority (see p. 311, majority opinion), we have no authority to ignore the legislative directive that wrongful death damages include "all the damages of every kind to the deceased... ." However real and viable may be the concept of the economic value of the life expectancy of the deceased, i.e., the present net cash value, as an element of wrongful death damages, our statute does not limit damages to this. And for good reason, for earning power is not the only value that is destroyed by wrongful death.
Plaintiffs argue that there is an intrinsic value to life and that its loss should be compensated. Without engaging in such metaphysics, we think little reflective thought is required to recognize that there is at the very least a social and psychological (i.e., non-pecuniary) value to life over and above any pecuniary value. More to the point, we fail to understand how limitation of damages to the decedent to "net cash value" fulfills the expansive statutory contemplation of "all the damages of every kind to the decedent." Present net cash value is just part of the utility to the deceased of his life expectancy, had he lived. Our too restrictive reading of the statute implicitly assumes that the average person derives no utility from living.
There are reasons grounded in principle why these Plaintiffs recovery ought include the non-pecuniary utility of John L. McGowan's 13.6 year life expectancy. The "all damages of every kind" phrase appears twice within our wrongful death statute. It defines damages "to the decedent" recoverable in the wrongful death action the sort of damages at issue here. The phrase further appears in defining survivors' or beneficiaries' damages. By judicial construction "all damages of every kind of any and all parties interested in the suit" includes non-pecuniary loss. See Sandifer *313 Oil Co. v. Dew, 220 Miss. 609, 71 So. 2d 752 (1954) (holding that the parents, brother and sister of decedent fourteen-year-old girl are all entitled to recover damages for loss of society and companionship); Delta Chevrolet Co. v. Waid, 211 Miss. 256, 51 So. 2d 443 (1951) (awarding damages for non-pecuniary loss to decedent's widow); Gulf Transport Co. v. Allen, 209 Miss. 206, 46 So. 2d 436 (1950) (awarding damages for loss of society and companionship to decedent's widower and adult children). On principle it follows that "all damages of every kind to the decedent" includes non-pecuniary loss to decedent.
Our law respects and protects the non-pecuniary value of life of the elderly on a dozen other fronts. Retired persons are vested with rights of speech, religion and association the same as others. They may sue for defamation and invasion of privacy. The wrongful taking of the life of a senior citizen is no less a homicide. Close in analogy, an elderly person tortiously injured may sue for pain and suffering and diminished capacity to enjoy life and other non-pecuniary losses. Indeed, the more thought one gives the matter the more anomolous if not bizarre becomes the suggestion that wrongful death damages do not include the non-pecuniary utility to the deceased of his life expectancy.
In sum, I would grant the petition for rehearing insofar as the Courts' decision affirms denial of any "damages to the decedent." Were I charting our course, I would reverse and render so much of the judgment below as denies any recovery for the utility to John L. McGowan of his 13.6 year life expectancy had he lived. I would remand with directions that a new trial be held solely on the issue of damages, with the jury instructed to return a verdict for Plaintiffs for all damages of every kind to the decedent, John L. McGowan, including both the pecuniary and non-pecuniary value of his 13.6 year life expectancy. The jury, of course, would fix the quantum of that value.
HAWKINS, P.J., and SULLIVAN, J., join this opinion.
DAN M. LEE, P.J., joins in part by separate opinion joined by GRIFFIN, J.
DAN M. LEE, Presiding Justice, concurring in part, dissenting in part to denial of petition for rehearing:
While I agree with Justice Robertson that our wrongful death statute, Miss. Code Ann. § 11-7-13 (Supp. 1987), provides a basis for taking into consideration more than mere lost earning capacity based on life expectancy when determining damages, in my opinion the jury in this case was instructed to and did consider "all damages of every kind to the decedent... ." That the jury found no other damages is a conclusion we normally do not disturb under our limited scope of review, and I find their verdict to be supported by the evidence.
GRIFFIN, J., joins this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1753810/ | 521 So. 2d 900 (1988)
BOARD OF TRUSTEES OF MONROE COUNTY BOARD OF EDUCATION
v.
Carl RYE and Wife, Gladys B. Rye; Federal Land Bank of New Orleans; Southern Royalty Company; Martha Rye Watkins; Winona Rye Freeman; Avonelle Rye Cole; Flora Nell Rye Dobbs; Neal Clement; Howard E. Stover; Esther Peeler Ledbetter; Dick L. Peeler; and J.W. Young, If Living, and If Deceased His Unknown Devisees or Heirs at Law and Board of Trustees of the Lowndes County Board of Education.
No. 57117.
Supreme Court of Mississippi.
March 2, 1988.
*901 Claude A. Chamberlin, Aberdeen, for appellant.
Henry J. Applewhite, Aberdeen, Michael Malski, Carnathan, Malski & Ford, Amory, for appellee.
EN BANC.
ROY NOBLE LEE, Chief Justice, for the court:
The Board of Trustees of Monroe County Board of Education filed suit in the Chancery Court of the First Judicial District of Monroe County against the defendants, appellees herein, who will be referred to as the Ryes for brevity. The purpose of this suit was to remove clouds and confirm title in the Board of Education on two hundred *902 (200) acres of land situated in Monroe County, Mississippi. The Ryes counterclaimed to remove clouds and confirm title in themselves. The chancellor dismissed the Board's complaint and entered judgment for the Ryes on their counterclaim, granting the relief prayed for, cancelling the claims asserted by the Monroe County Board of Education and holding that the Ryes were vested with good title to the lands. Aggrieved at the decision of the lower court, the Monroe County Board of Education appeals here.
Chain of Title
The land involved in this suit comprises 200 acres in Monroe County, Mississippi, described as
The E 1/2 of the SW 1/4, and the SE 1/4 of the NW 1/4, and the West 1/2 of the NE 1/4 of Section 21, Township 15 South, Range 17 West.
On March 7, 1855, the Swamp Land Commission of Monroe County, by its agent Dillingham, conveyed some 3,750 acres, including the subject property, to one James A. Sullivan in fee simple.
On May 8, 1867, Sullivan conveyed 442 acres of his original acquisition to the president of the Board of Trustees of the 15th Township south of Range 17 West, and to his successors in office, in trust for school use. That conveyance included the 200 acres of land which are the subject of this suit.
The record does not reflect any other conveyance of any part of the 442-acre tract until March 4, 1878, when the tax collector of Monroe County sold to one Ussery 120 of the 442 acres for delinquent taxes. The 120-acre tract is included in the subject property.
On April 21, 1879, Sullivan's executor filed a petition for the sale of lands owned by Sullivan at his death. Included in the sworn inventory of Sullivan's real property was all of the subject land.
On February 5, 1883, the Monroe County Board of Supervisors granted leases on the 442 acres. The 120-acre tract, including forty (40) acres of the subject property, was leased for a term of ninety-nine (99) years to one Rees. Another 200 acres, including one hundred sixty (160) acres of the subject property, were leased for a term of ninety-nine (99) years to Ussery, eighty (80) acres of which were already owned by Ussery in fee simple by virtue of the 1878 tax deed.
On October 15, 1885, twenty (20) acres of the subject property were sold to one Fitts for delinquent taxes. That tract was included in the 1878 Ussery tax deed and the 1883 Rees lease.
Title to the subject property passed to appellees Ryes in three separate parcels deraigned as follows:
PARCEL A
SE 1/4 of NW 1/4 of Section 21
This parcel was included in the 99-year lease given in 1883 to Rees by the Monroe County Board of Supervisors. A portion of this parcel (W 1/2 of the SE 1/4 of the NW 1/4) was also included in the 1885 Fitts tax deed. After Rees' death, the Chancery Court of Monroe County ordered the sale of this property to settle his estate. By a deed from the Clerk of the Chancery Court, the unexpired term of the Rees lease was sold in 1901 to F.L. Rye and P.R. Pool. In 1907, F.L. Rye sold his interest to Pool, but the deed covenanted a fee simple conveyance of the land. In 1911, Pool conveyed the land in fee simple back to F.L. Rye. In 1946, F.L. Rye's heirs conveyed the land to Willard Rye and Carl Rye. Finally, in 1961, Willard Rye's heirs conveyed to Carl and Gladys Rye. With the exception of the 1901 deed from the Clerk of the Chancery Court, all the deeds in this chain of title purport to convey fee simple estates, not leasehold estates.
PARCEL B
E 1/2 of SE 1/4 of Section 21
This parcel was included in the 99-year lease given in 1883 to Ussery by the Monroe County Board of Supervisors. A portion of this parcel (S 1/2 of the NE 1/4 of the SW 1/4) was also included in the 1885 Fitts tax deed. There is a gap in the chain of *903 title from 1883 until 1892. In 1892, this parcel was conveyed by one Mayfield to Booth. In 1906, Booth conveyed to I.W. and C.W. Rye. In 1908, C.W. Rye conveyed his interest to I.W. Rye. In 1915, I.W. Rye conveyed this parcel to Barton, less a 30-acre tract which I.W. Rye retained. In 1928, Barton conveyed the parcel, less the 30 acres, to Young. In 1928, Young gave a deed of trust covering this land to Leftwich. (This deed does not appear in the trial record.) In 1930, Leftwich foreclosed on the deed of trust and conveyed title to A.G. Rye. In 1939, A.G. Rye conveyed to Willard and Carl Rye. Finally, in 1961, Willard Rye's heirs conveyed the land to Carl and Gladys Rye.
In 1923, I.W. Rye gave a deed of trust covering his retained 30 acres to Jones, trustee for the Federal Land Bank of New Orleans. In 1933, the bank foreclosed on the deed of trust, and Jones conveyed title to the bank. In 1935, the bank conveyed to A.G. Rye. A.G. Rye then conveyed the 30 acres along with the rest of Parcel B in his 1939 conveyance to Willard Rye and Carl Rye.
PARCEL C
W 1/2 of the NE 1/4 of Section 21
This parcel was included in the 99-year lease given in 1883 to Ussery by the Monroe County Board of Supervisors. There is a gap in the chain of title from 1883 until 1892, when this parcel was conveyed along with Parcel B from Mayfield to Booth. Parcel C follows the same chain of title as Parcel B down through the 1908 conveyance from C.W. Rye to I.W. Rye. In 1921, I.W. Rye conveyed Parcel C to M.I. Rye. In 1922, M.I. Rye gave a deed of trust covering this parcel to Jones, trustee for the Federal Land Bank of New Orleans. (This deed does not appear in the trial record.) In 1933, the bank foreclosed on the deed of trust, and Houston, substituted trustee, conveyed title to the bank. In 1946, the bank conveyed to Willard and Carl Rye. Finally, in 1961, Willard Rye's heirs conveyed the land to Carl and Gladys Rye.
ISSUES
The lower court held that the Monroe County Board of Education, in 1867, was without authority to purchase or hold the land and, therefore, the 1867 conveyance to the school board was void. In the alternative, the lower court held that, assuming the validity of the 1867 conveyance, they had acquired title to the subject property by adverse possession against the school board. The Ryes also contend that their record title is made sound by the 1878 and 1885 tax deeds; and that the appellant is now barred by laches or is estopped from asserting its title to the subject property after one hundred (100) years have elapsed. The issues for discussion follow:
I.
DID THE BOARD OF TRUSTEES OF THE MONROE COUNTY SCHOOLS HAVE AUTHORITY IN 1867 TO ACQUIRE REAL PROPERTY?
II.
DID APPELLEES OR THEIR PREDECESSORS IN TITLE GAIN TITLE TO THE SUBJECT PROPERTY BY ADVERSE POSSESSION?
III.
DID THE PRIOR TAX SALES OF THE SUBJECT PROPERTY, TOGETHER WITH THE SUBSEQUENT PAYMENT OF PROPERTY TAXES THEREON BY APPELLEES, AFFECT THE VALIDITY OF APPELLANTS' TITLE?
IV.
DID THE FACT THAT APPELLEES HAD BEEN IN CONTINUOUS UNDISTURBED POSSESSION OF THE PROPERTY FOR OVER 35 YEARS BAR APPELLANT'S CLAIM UNDER EQUITABLE DOCTRINES OF LACHES OR ESTOPPEL?
I. II.
DID THE BOARD OF TRUSTEES OF THE MONROE COUNTY SCHOOLS *904 HAVE AUTHORITY IN 1867 TO ACQUIRE REAL PROPERTY?
DID APPELLEES OR THEIR PREDECESSORS IN TITLE GAIN TITLE TO THE SUBJECT PROPERTY BY ADVERSE POSSESSION?
The lower court held that the school trustees lacked capacity to acquire and hold title, since they had no express or implied power to do so.
Since the judgment of the lower court will be affirmed for other reasons, we do not find it necessary to address this sticky issue in depth. The 1867 conveyance by Sullivan to the Board of Trustees is in the form of a trust. Even if the school board was without authority to acquire the subject land in 1867, the conveyance would still have been valid as a trust, i.e., the subject land was the corpus and the School System of Monroe County was the beneficiary. The school board's inability to serve as trustee would not have affected the validity of the trust, since a court of equity will not suffer a trust to fail for want of a trustee. Taylor v. Watkins, 13 So. 811 (Miss. 1893) [not reported in State reporter]; Skinner v. Harrison Township, 116 Ind. 139, 18 N.E. 529 (1888). See also McKinnon v. Gowan, 127 Miss. 545, 90 So. 243 (1922); Russell v. Town of Hickory, 135 Miss. 184, 99 So. 897 (1924); McInnis v. Board of Education of Madison County, 242 Miss. 412, 135 So. 2d 180 (1961); Board of Education of Itawamba County v. Loague, 405 So. 2d 122 (Miss. 1981); In Re Estate of Hall, 193 So. 2d 587 (Miss. 1967); Magee v. Magee's Estate, 236 Miss. 572, 111 So. 2d 394 (1959).
Therefore, it appears that the appellees are without grounds to challenge the effectiveness of the 1867 Sullivan conveyance to the Monroe County School Board.
The lower court alternatively decided that assuming, arguendo, the validity of the conveyance from Sullivan to the Monroe County Board of Education, the Ryes and their predecessors in chain of title acquired a good title by adverse possession.
The Mississippi Constitution of 1890 contains a provision immunizing the sovereign (state and subdivisions) against the bar of the statute of limitations, which includes the ten-year statutory period for adverse possession. Prior to 1890, there was no such provision protecting the State. Thus, in order to acquire title by adverse possession, there must have been adverse possession for a continuous period of ten years sometime between 1867 and 1890. Again, we do not attempt to determine on the record before us the acts of possession exercised by those persons in possession of the subject lands over 100 years ago and whether or not they were sufficient under the applicable principles of adverse possession law. As stated above, since the judgment will be affirmed for other reasons, we find it unnecessary to discuss this issue further.
III.
DID THE PRIOR TAX SALES OF THE SUBJECT PROPERTY, TOGETHER WITH THE SUBSEQUENT PAYMENT OF PROPERTY TAXES THEREON BY APPELLEES, AFFECT THE VALIDITY OF APPELLANTS' TITLE OF PRESUMPTION OF GRANT?
Under the facts of the instant case, we are of the opinion that there is a presumption that there was a legal liability on appellees and their predecessors in title to pay the taxes tendered over the years by them and, accordingly, there was a grant from the State sufficient to create such liability.
Effect of Tax Sales
The trustees of the Monroe County Board of Education were the record owners of the subject property in 1878 by virtue of the 1867 deed from Sullivan. On March 4, 1878, the land was sold for delinquent taxes. If valid title were in the Board of Education, the subject property was exempt from taxation at that time. Mississippi Code Annotated § 1662 (1871).[1]
*905 We look to the Mississippi Laws of 1877 for a clue as to why this land was sold for taxes. In 1877, the legislature established the position of State Commissioner of Swamp Lands to remedy a general condition of confusion regarding swamp lands patented to the State under the Federal Swamp Land Act of 1850, 1877 Miss. Laws, Ch. 14. The legislature noted that "it appears that the records of land sales now on file in the office of the Secretary of State are in an imperfect condition, showing repeated conflicting sales and selections, in many cases defaced, destroyed or lost... ." Id., Ch. § 2. This would tend to explain the evidence in the instant case that ownership of the subject property from 1870-78 was unknown.
The 1877 act authorized the Commissioner to "sell and dispose of" all unsold swamp land still retained by the State. Id., § 3. It was further provided that swamp lands sold by the Commissioner would "become subject to taxation as other lands are taxed." Id., Ch. 15, § 1 (emphasis added). The emphasized portion does nothing to diminish the public lands exemption of § 1662, Code of 1871. Therefore, if anything is implied by the tax sale of the subject property in 1878 immediately after the passage of the swamp land reform legislation, it is that the State Commissioner or the Monroe County Tax Collector concluded that the subject property was in private, not public, hands.
Determination of the effect of the 1878 tax sale on the validity of appellant's title raises a question of statutory construction. The validity of a tax sale is determined by the law in force at the time the sale was made. Beard v. Stanley, 218 Miss. 192, 67 So. 2d 263 (1953). On March 4, 1878, tax sales were governed by § 1700, Code of 1871, as amended by Ch. 2 of the Laws of 1877. That statute provided that a tax sale vested in the purchaser
a perfect title to the land sold for taxes, and no such conveyance or list as between the original parties or subsequent alienees shall be invalidated, nor shall any defence be available against the title thus conveyed in any court of this State, except by proof that the taxes for which said lands were sold had been paid or tendered to the proper officer before sale, or that the taxes were illegal in part, and that before sale the tax-payer tendered to the proper officer the amount of legal taxes due on said lands.
1877 Miss. Laws Ch. 2, § 10.
The difficulty with this statute is in ascertaining what the legislature intended when it referred to tax sales "illegal in part." The tax sale in the instant case was probably illegal in that it constituted a sale of lands exempted from taxation by § 1662, Code of 1871. But whether this is the sort of illegality contemplated by the 1877 statute is unclear.
This same statute was amended by Ch. 6 of the Laws of 1880 and ultimately codified as § 525, Code of 1880. The amendment provided that to invalidate the title conveyed by a tax deed, there must be proof that "the land was not liable to sale for the taxes, or that the taxes for which the said land was sold, had been paid before sale; ..." § 525, Code of 1880 (emphasis added). The emphasized portion, had it been in effect in 1878, would have undoubtedly invalidated the tax sale in question, as the subject property was clearly not "liable to sale for the taxes." However, in a different and separate clause, the 1880 amendment goes on to restate the "illegal in part" language of its predecessor:
and, if any part of the taxes for which such land was sold was illegal or not chargeable on said land, but part was chargeable, that shall not affect such sale, nor invalidate such conveyance, unless it shall appear that, before such sale, the amount legally chargeable on such land was paid, or tendered to the tax collector.
§ 525, Code of 1880 (emphasis added).
This clause appears to explain that a tax sale "illegal in part" is one in which the *906 property was overassessed and sold for taxes where the owner pays the tax on the proper assessment but fails to pay on the over-assessment. As the 1880 legislature added a new clause invalidating tax sales of exempt property, and at the same time and in a separate clause retained the "illegal in part" terminology of the earlier version, the logical conclusion is that the legislature viewed the new clause as independent of the original clause and consequently that the 1880 amendment created a new and additional exception not within the contemplation of the 1887 statute. We therefore conclude that the 1878 tax sale of 120 acres of the subject property vested in the purchaser perfect title thereto.[2]
Effect of Subsequent Payment of Taxes and Presumption of Grant
The chancellor found that appellees "have been in exclusive possession of the subject land, paying taxes thereon, farming, cultivating and fencing said property for more than a period of thirty-five (35) years." This Court has held that continuous peaceable possession of land, when accompanied by the usual acts of ownership, will raise the presumption that the land has been granted to the possessor by the State, even where the claim is asserted against the State. Caruth v. Gillespie, 109 Miss. 679, 68 So. 927 (1915). Payment of taxes on land is considered an act of ownership in this context. Presley v. Haynes, 182 Miss. 44, 180 So. 71 (1938); Scarborough v. Native Lumber Co., 118 Miss. 138, 79 So. 84 (1918); Caruth v. Gillespie, supra.
This doctrine of presumption of grant is not precisely synonymous with adverse possession, though the two are "indissolubly linked." Gibson v. State Land Commissioner, 374 So. 2d 212, 216 (Miss. 1979). Where adverse possession can be shown, the doctrine of presumption of grant has no application. Itawamba County v. Sheffield, 195 Miss. 359, 13 So. 2d 649 (1943). The purpose of the doctrine is to quiet title after long possession; its applicability depends upon possession "under a claim of right, actual, open, and exclusive, and a chain of conveyances and payment of taxes are important." 4 Tiffany on Real Property, 3d ed., § 1136, n. 3 (1975) [citing United States v. Fullard-Leo, 331 U.S. 256, 67 S. Ct. 1287, 91 L. Ed. 1474 (1947)]. The greatest practical difference between adverse possession and the doctrine of presumption of grant is that the latter allows assertions of claims against the sovereign, despite statutes barring adverse possession against the State. 5 Thompson on Real Property, § 2540A (1979) [citing Carruth v. Gillespie, supra]. It is readily apparent, then, that application of the doctrine of presumption of grant to the facts of the instant case is especially appropriate.
In Presley v. Haynes, 182 Miss. 44, 180 So. 71 (1938), Haynes conveyed certain land to Presley who in turn conveyed to a third party. When the third party discovered that the chain of title depended upon two 1887 tax deeds which were void, he required Presley to quiet title by procurement of a state patent. Presley sought indemnity from Haynes pursuant to the warranties in the deed from Haynes to Presley. Haynes and his predecessors in title had been in open possession of the land and had paid taxes thereon for over 45 years before the conveyance to Presley. Concluding that Haynes was not liable on his warranty, this Court held that the doctrine of presumption of grant cured any remote defect in the chain of title:
Under such circumstances, and because of such a long lapse of years, it will be presumed that the state has long ago conveyed to the said occupants all its title to the land by a valid patent or patents, other than the invalid patents to which appellant here points... .
*907 When continuous occupancy, possession, and use of land has been openly held for such a great length of time as shown in this case, the state receiving taxes assessed thereon as if privately owned, the presumption above mentioned becomes absolute, and the title will be deemed as perfect as if held against private owners for the 10 years prescribed by the adverse possession statute, section 2287, Code 1930, which, under its express terms, gives full and complete title.
182 Miss. at 49-50, 180 So. at 71-72.
Even though we think that the tax deed in the instant case was valid, Presley clearly demonstrates that presumption of grant will cure even a void tax deed under the proper circumstances.
A title problem similar to the one now before the Court was resolved in Jones v. Gulf Refining Co., 202 Miss. 705, 32 So. 2d 435 (1947). There, the State, as a party in interest, sought to confirm title in itself to land which Jones and his predecessors, claiming under an 1875 tax deed, had continuously occupied for 66 years. The State argued that because there was no evidence the land had ever been patented to a private owner, title was still in the State in 1875 and consequently, the land could not possibly have been sold for taxes then. Regardless of whether title was actually in the State in 1875, this Court invoked the doctrine of presumption of grant to dispel the confusion:
In order that the forfeited tax-land patent shall have been good to convey a fee-simple title, a title of that grade must have passed out of the state into the hands of a private person before January 1, 1874, else it would not have been assessable and subject to the tax sale as a fee-simple title on May 10, 1875. There is no record that the title had so passed out of the State. In favor, however, of a possession of such a long length of years as is here present, a presumption exists that there was such a grant by the sovereign as will support the title of the persons in actual adverse occupancy and claim of title.
202 Miss. at 709, 32 So.2d at 436.
The same principle is applicable to the facts of the instant case. There is no evidence that the school board ever parted with the title it acquired from Sullivan in 1867. But title must have passed from the school board to a private person prior to the 1878 tax sale, else the property would not have been subject to such a sale. The open and continuous possession of the subject property by appellees and their predecessors for the previous 93 years (1892-1985), is enough to raise a presumption that there was at some time a grant from the sovereign sufficient to support the title they now assert.
This Court has recently addressed the doctrine of presumption of grant in Gibson v. State Land Commissioner, 374 So. 2d 212 (Miss. 1979). That opinion as it relates to presumption of grant is not clear. Gibson appears to mean that presumption of grant will not arise against the State unless the claimant produces "written evidence" of some kind from the State to impart color of title (374 So.2d at 217.) If this is the rule in Gibson, then such a rule is erroneous, since the very purpose of the doctrine is to remedy the absence of written evidence of some kind from the State. Notwithstanding the requirement in Gibson, that case poses no obstacle to appellees. The written evidence from the State which imparts color of title to appellees' claim is the 1878 tax deed from the State wherein the subject property is conveyed to the purchaser, "his heirs and assigns forever."
A final question which arises in connection with this issue is whether a prior tax sale is necessary to invoke the doctrine against the State. This question is particularly relevant to the instant case in that part of the subject property (Parcel C, W 1/2 of NE 1/4) was never sold for taxes as were the other two parcels.
Jones v. Gulf Refining Co. and Presley v. Haynes suggest that there must be some triggering event in the chain of title (e.g., tax sale of public land) to raise the presumption *908 of grant. This appears to be the force behind the implication in Gibson v. State Land Commissioner that a presumption of grant will not arise unless there is shown some "written evidence" from the State imparting color of title.
What these cases stand for is the principle that a presumption of grant arises where there is some unexplained anomaly in the chain of title. But this principle should not be construed to mean that the presumption arises only in the face of such anomaly. The Supreme Court of Arkansas has held that the lack of defect in the chain of title does not preclude the application of the presumption where the claimant has openly occupied the land and paid the taxes thereon for a long period. Miller v. Kansas City Southern Rwy. Co., 216 Ark. 304, 225 S.W.2d 18 (1949); Carter v. Stewart, 149 Ark. 189, 231 S.W. 887 (1921). Surely the State cannot "undertake to profit because of the negative nature of the records." Miller, 216 Ark. at 306, 225 S.W.2d at 19.
[W]here the State has for a long time demanded and collected taxes on property, and the property owner [claimant] has acquiesced therein by paying the taxes, there arises a presumption that there was a legal liability to pay the taxes, and this furnishes a strong circumstance from which the court may infer a grant from the State.
Carter, 149 Ark. at 195, 231 S.W. at 889. See generally Baker v. Certain Lands in Independence County, 19 Ark. App. 253, 750 S.W.2d 318 (1986).
In summary, we conclude that the 1878 tax deed vested perfect title in the purchaser. But even if the 1878 tax sale was void, we hold that the open and continuous possession of the subject property by the Ryes and their predecessors in title from 1892 to the present, together with the usual acts incident to ownership, is sufficient under Mississippi law to raise the presumption that at some time there was a grant by the sovereign which divested itself of title and perfected title in those from whom the Ryes now deraign their title.
IV.
DID THE FACT THAT APPELLEES HAD BEEN IN CONTINUOUS UNDISTURBED POSSESSION OF THE PROPERTY FOR OVER 35 YEARS BAR APPELLANTS' CLAIM UNDER EQUITABLE DOCTRINES OF LACHES OR ESTOPPEL?
The Ryes acquired possession of Parcel B of the subject property in 1939 and possession of Parcels A and C in 1946. Since those dates and up to the present, the Ryes have made their home on the subject property, have fenced it, farmed it, executed oil, gas and mineral leases thereon, run cattle upon it, cut timber and trees from it, cleared it, paid taxes upon it, and have exercised every known and conceivable act of ownership imaginable for fee simple property. Most importantly, they have built their home upon it and have nurtured and reared their family members upon it, exercising all privileges and rights of honest, law-abiding citizens in the community, contributing to the advancement and well-being of Monroe County, Mississippi. Their title, through their predecessors, in unbroken chain runs backward to 1892, a continuous line of ninety-three (93) years. The chancellor emphasized the equities favoring the Ryes, counter-plaintiffs, finding:
Considering all the facts, a great injustice would be done to the Counter-Plaintiffs to take their land and leave them nothing to show for their labors and investment in home and farm. After all these many years have passed with the county not even knowing of any possible claim it might have to this property, to have these Counter-Plaintiffs to lose their property would be inequitable, unjust and unfair to the extent it would shock the conscience of this Court.
We recognize that the State is not responsible for the laches of its officers. Alexander v. Mayor and Board of Aldermen of City of Natchez, 219 Miss. 78, 68 So. 2d 434 (1953). However, the application of the doctrine of equitable estoppel is otherwise. The State, its counties, subdivisions and municipalities may be equitably estopped under the proper circumstances. *909 Suggs v. Town of Caledonia, 470 So. 2d 1055 (Miss. 1985); Covington County v. Page, 456 So. 2d 739 (Miss. 1984); State v. Stockett, 249 So. 2d 388 (Miss. 1971).
The facts of Covington County v. Page, supra, are similar to those of the case sub judice. There, a private party conveyed certain lands to the county in 1911. A year following this conveyance, at a time when the land was clearly exempt from taxation by virtue of the county's ownership, the land was sold for ad valorem taxes without explanation. In 1940, the county gave a quitclaim deed to the successors of the tax sale purchaser in order to remove any clouds suggested by the questionable tax sale. In 1975, the county purported to give a mineral lease on the land, and Page, successor of the tax sale purchaser, sued to confirm title in himself. This Court held that the county was estopped to assert title at this late date. The Court said:
Considering the actions of the board of supervisors in giving a quitclaim deed to J.T. Knight and collecting ad valorem property taxes from Knight and his successors in title, this is an appropriate case to raise the shield of estoppel. The county ignored whatever title it may have had and assessed and collected taxes on the property from 1911 through 1982, the date of the lower court hearing... . The collection of taxes and the signing of the deed are affirmative actions of the county which give rise to equitable estoppel in this case.
456 So.2d at 742.
In the Covington County case, the quitclaim deed was a primary factor upon which the Court relied in its application of equitable estoppel against the county. However, the Court also emphasized the county's acceptance of taxes on the land as a material contributing factor. Indeed, the Court stated that by assessing and collecting the ad valorem taxes, the county ignored whatever title it might have had. The same can be said for Monroe County in the present case.
As previously discussed, payment of taxes on the subject property by the Ryes and the county's acceptance thereof are important to the application of the doctrine of presumption of grant under the facts of this case. Similarly, Covington County shows that the payment of taxes goes to the equities of the case. Thus, the doctrine of presumption of grant and equitable estoppel have a complementary effect when applied to the Ryes' situation. Without question, the equities of the case at bar overwhelmingly favor the Ryes.
CONCLUSION
The subject property came into possession of appellees Ryes in three separate parcels. Since each parcel is deraigned to appellees through separate chains of title, the doctrine of presumption of grant and the equitable considerations attendant thereto must be applied to each parcel separately.
PARCEL A
SE 1/4 of NW 1/4 of Section 21
This parcel was included in the 1878 tax sale. The doctrine raises the presumption that the school board conveyed title to this parcel prior to the tax sale. Jones v. Gulf Refining Co., 202 Miss. 705, 32 So. 2d 435 (1947). Thus, the 1883 lease of Parcel A to Rees was of no effect, since the county is presumed to have had no interest to convey at that time. Record title to Parcel A in 1883 would have been in Ussery, the purchaser at the 1878 tax sale. Although appellees trace their chain of title to this parcel directly to the Rees estate, the first record conveyance of Parcel A in fee is from F.L. Rye to P.R. Pool in 1907. Under these circumstances the doctrine operates to presume a grant from Ussery to F.L. Rye sometime between 1878 and 1907. Scarborough v. Native Lbr. Co., 118 Miss. 138, 79 So. 84 (1918). Thus, title to the SE 1/4 of the NW 1/4 of Section 21 is perfected in appellees.
PARCEL B
E 1/2 of SW 1/4 of Section 21
This parcel was included in the 1878 tax sale and was leased to Ussery by the county *910 in 1883. As with the Rees lease, the Ussery lease was of no effect since the county had no interest to convey, there having been a presumed grant from the State to a private individual prior to the 1878 tax sale. Jones, supra. In fact, Ussery, the purchaser at the 1878 tax sale, was himself record owner of Parcel B in 1883. Why he would buy a lease to land he already owned in fee simple is but one of the many curiosities of this case. In 1885, Fitts purchased 20 acres of this parcel (S 1/2 of NE 1/4 of SW 1/4) for delinquent taxes. Thus, in 1885 record title to Parcel B was in Ussery (60 acres: N 1/2 of NE 1/4 of SW 1/4 and SE 1/4 of SW 1/4) and Fitts (20 acres: S 1/2 of NE 1/4 of SW 1/4). There is a gap in the chain of title from 1885 to 1892, when Mayfield conveyed all of Parcel B to Booth. Appellees trace their chain of title directly to Mayfield. Under these circumstances, the doctrine presumes grants from Ussery and Fitts to Mayfield sometime between 1885 and 1892. Scarborough, supra. Thus, title to the E 1/2 of the SW 1/4 of Section 21 is perfected in appellees.
PARCEL C
W 1/2 of NE 1/4 of Section 21
This parcel was leased to Ussery by the county in 1883. Unlike Parcels A and B, Parcel C was not the subject of any tax sale from the time it was acquired by the school board in 1867 until its lease to Ussery in 1883. The chain of title to Parcel C is very simply Swamp Land Commission to Sullivan to school board, with the school board giving to Ussery a lease expiring in 1982. Appellees' chain of title to Parcel C begins with the same 1892 Mayfield-to-Booth deed which also conveyed Parcel B. There is no event in the school board's chain of title to raise the presumption of grant as it is raised in Jones, supra, and Presley v. Haynes, supra. However, the State's collection of taxes on the subject property and the payment thereof by appellees and their predecessors in title over a period of 93 years is sufficient to raise the presumption that there was a legal liability to pay the taxes and, therefore, a further presumption that the property was at some point granted by the State to private owners preceding appellees in their chain of title. Carter v. Stewart, 149 Ark. 189, 231 S.W. 887 (1921). Thus, title to the W 1/2 of the NE 1/4 of Section 21 is perfected in appellees.
As stated hereinabove, the chancellor decided the issues in favor of appellees Ryes on two propositions, i.e., (1) trustees of the Monroe County Board of Education had no authority to acquire property in 1867 for school purposes, and (2) appellees' predecessors in title acquired title to the property by adverse possession prior to 1890. Since we decide the issues on other grounds, we do not address those points upon which the lower court grounded its decision.
Assuming that the chancellor erred in his holding, nevertheless he ordered that title to all of the subject property be confirmed in appellees Ryes. Therefore, under the facts and the law of the case, he reached the correct result. When the chancellor reaches the correct result, though for the wrong reason, this Court will affirm the judgment entered. Estate of Johnson v. Adkins, 513 So. 2d 922 (Miss. 1987); Tedford v. Dempsey, 437 So. 2d 410 (Miss. 1983).
The judgment of the lower court is affirmed.
AFFIRMED.
HAWKINS and DAN M. LEE, P.JJ., and ANDERSON and GRIFFIN, JJ., concur.
ROBERTSON, PRATHER, SULLIVAN and ZUCCARO, dissent.
ROBERTSON, Justice, dissenting:
I.
The Court today confirms private title to lands I find impressed with a trust for the benefit of the school children of Monroe County. In 1867 these twenty-first section lands were conveyed in trust to county school authorities. Employing the familiar and analogous procedures for handling lands subject to the federally created school lands trust, Monroe County authorities in 1883 leased these lands for ninety-nine *911 years. Those leases expired in February of 1982. I would confirm title in the school board as trustees, for in law it there resides and in equity there exists no interest more powerful than our children's education. As the majority holds otherwise, I respectfully dissent.
II.
The controlling facts undisputed by the majority are these: On March 7, 1855, James Dillingham, Swampland Commissioner of Monroe County, conveyed substantial acreage to one James A. Sullivan. Included in this conveyance was the 200-acre tract here at issue.
On May 8, 1867 twelve years and a war later Sullivan conveyed the property to "Albert Dale, President of the Board of Trustees of the Fifteenth Township South of Range 17 West, and his successors in office, and for the use and benefit of the citizens of the Fifteenth Township for schools."
On December 5, 1882, the Board of Supervisors of Monroe County ordered an appraisal of the subject tract. Miss.Rev.Code § 732 (1880). This appraisal was accepted on January 3, 1883, whereupon the Board entered an order directing the Clerk to lease the lands to the highest bidder, all in accordance with procedures then found in Miss.Rev.Code §§ 732 and 733 (1880).
On February 5, 1883, the Clerk of the Board of Supervisors entered into two ninety-nine year leases. In the first, 160 acres of the subject 200-acre tract was leased to W.M. Ussery. The second was a lease of the remaining 40 acres to William Reese. See Miss.Rev.Code §§ 732 and 733 (1880).
On February 5, 1982, the two 99-year leases expired. On August 9, 1984, the Board of Trustees of the Monroe County Board of Education commenced this civil action to cancel claims and remove clouds from their title. They are entitled to the relief prayed for. I would reverse and render.
III.
Today's majority, and as well as the court below, have made much of the fact that the Ryes have been paying taxes on the land "for more than a period of thirty-five (35) years." The point proves nothing. Though these lands are not Sixteenth Section lands, nor insofar as the record reflects, are they "lieu lands" either, county and school authorities in Monroe County have at all times dealt with the lands as school lands. I say this to say that a lessee's payment of taxes on lands subject to the school lands trust is a practice that has been around for more than sixty years. See Turney v. Marion County Board of Education, 481 So. 2d 770, 782-83 (Miss. 1985); Miss. Code Ann. §§ 29-3-71 and -73 (1972 and Supp. 1987); Miss. Laws, ch. 443, § 14 (1946); Miss. Laws, ch. 267 (1924). The evidence of tax payments is wholly consistent with the school board's premise that these lands have been school lands since 1867.
IV.
The court below found for the Ryes on two theories: (1) school authorities had no legal power to acquire and hold these lands and, alternatively, (2) adverse possession. Sensing that neither of these notions holds water, the majority offers three new theories upon which it would save these lands for the Ryes. Upon scrutiny each is seen at best a well-intentioned nice try.
A.
First, with respect to 120 acres, we are told that a March 4, 1878, tax sale to William Ussery "vested in the purchaser [William Ussery, a/k/a W.M. Ussery] perfect title thereto." Yet at that time, record title was vested in the Monroe County School Trustees by virtue of the 1867 deed from Sullivan, a point the majority concedes. As such, the property was exempt from taxation at that time, Miss.Rev.Code § 1662 (1871), and a tax sale conveyed no title. Hewling v. Blake, 110 Miss. 225, 239-40, 70 So. 247, 249 (1915). The 1878 tax sale was a mistake without legal effect. That it conveyed nothing is established most eloquently by Ussery's February 1883 procuring of a ninety-nine year lease. If Ussery *912 had thought the tax deed he acquired on March 4, 1878, were worth the paper it was written on, why would he go to the trouble to obtain a ninety-nine year lease five years later? The question answers itself.
B.
The majority's second nice try is its effort to erect a presumption of grant, a notion all of the cases say must turn on (a) some missing or incomplete grant and (b) continuous peaceable possession accompanied by acts of ownership, etc. But what is missing? In 1867 Sullivan conveyed in trust for the schools. In 1883 the Board of Supervisors granted two ninety-nine year leases for the benefit of the schools. In February of 1982 these leases expired. Where is the "unexplained anomaly in the chain of title"? Answer: there is none!
C.
Third, the majority invokes equitable estoppel to bar the school board's suit. Assuming arguendo that the county can lose lands it holds in trust for the schools via equitable estoppel, what has the Monroe County School Board done to estop itself? Until February 5, 1982, it had no authority to do anything by virtue of the ninety-nine year leases. The Ryes entered upon a portion of the property in 1939 and the remainder in 1946. To be sure, they have since used it, fenced it, farmed it, executed oil and gas leases, cut timber, etc. and, I dare say, so did practically every other one of this state's many ninety-nine year lease-holders. In law the school board had no authority to interfere until February of 1982. And, as we have noted above, payment of taxes amounts to nothing.
V.
The Chancery Court decided this case in favor of the Ryes on alternative theories, neither of which are accepted by the majority. In the first place, the majority is entirely correct in recognizing that the 1867 deed was a conveyance in trust and as such may not fail for want of a properly qualified trustee. The Chancery Court's alternative theory was that the school trustees had lost title to the Ryes via adverse possession. The reasons why this holding was erroneous are implied in what we have said above. Still, further discussion is appropriate.
The argument here is really a defense of laches, to-wit: that the school board is charged with knowledge of the presence of the various clouds upon their title for a substantial period of time almost a century and that they sat by and did nothing until the filing of this suit on August 9, 1984.
The principle that a governmental entity is not responsible for the laches of its officers is well established in our law. Alexander v. Mayor and Board of Aldermen of City of Natchez, 219 Miss. 78, 94, 68 So. 2d 434, 441 (1953); Aetna Insurance Co. v. Robertson, 131 Miss. 343, 377, 94 So. 7, 10 (1922); see also Chill v. Mississippi Hospital Reimbursement Commission, 429 So. 2d 574, 585 (Miss. 1983); City of Bay St. Louis v. Hancock County, 80 Miss. 364, 371-72, 32 So. 54 (1902). This principle's presence in our law predates the 1890 Constitution. Josselyn v. Stone, 28 Miss. (6 Cushm.) 753, 763 (1855).
The contours of the point are shaped by our Constitution which in relevant part provides:
Statutes of limitation in the civil causes shall not run against the state, or any subdivision or municipal corporation thereof.
Miss. Const., § 104 (1890). Accordingly, any statute of limitations for adverse possession does not run against the school board of trustees. See Board of Education of Itawamba County, MS v. Loague, 405 So. 2d 122, 124-25 (Miss. 1981); Gibson v. State Land Commissioner, 374 So. 2d 212, 217 (Miss. 1979); see also Cinque Bambini Partnership, Inc. v. State, 491 So. 2d 508, 521 (Miss. 1986) (state's title can never be lost via adverse possession or limitations) (cases collected therein).[1]
*913 Section 104 became effective on November 1, 1890. The temporal contours of the Ryes' adverse possession claim, therefore, begins with the Sullivan deed of May 8, 1867, and extends through November 1, 1890. If the Ryes could prove adverse possession by their predecessors in title for any continuous ten year period between those two dates, they would prevail. This scenario is made possible by Warren County v. Lamkin, 93 Miss. 123, 46 So. 497 (1908), upon which the Chancery Court here relied in making its ruling. That case was an action of ejectment by the county against a subsequent possessor, Lamkin, of a portion of land conveyed to the county by the Board of Police in 1840. 93 Miss. at 162, 46 So. at 511-12. At issue was whether the ten-year statute of limitations for adverse possession applied against the county to bar its claim. 93 Miss. at 161, 163, 46 So. at 511, 512. The court noted that beginning with the Constitution of 1890, statutes of limitations ceased to run against counties and cities whereas prior thereto, such statutes ran against counties and cities. 93 Miss. at 165, 46 So. at 513. However, the court held that the right to the property in that particular case was governed by the statute of limitations in effect at the time of the original conveyance, which was before the Constitution of 1890 took effect. 93 Miss. at 165, 46 So. at 513.
The party asserting adverse possession has the burden of proving possession which is (1) open, notorious and visible; (2) hostile; (3) under claim of ownership; (4) exclusive; (5) peaceful; and (6) continuous and uninterrupted. Roy v. Kayser, 501 So. 2d 1110, 1111 (Miss. 1987) (cases collected therein). This exclusive possession must be shown for a period of ten years. Davis v. Davis, 508 So. 2d 1062, 1065 (Miss. 1987); Miss. Code Ann. § 15-1-13 (1972). Our concern is the legal sufficiency of the evidence to establish each of these elements of adverse possession for any ten year period between May 8, 1867, and November 1, 1890.
Assuming that the ten year period of adverse possession the Ryes claim their predecessors in title enjoyed had to have ended before November 1, 1890, it must have begun before November 1, 1880. Equally as difficult as when the adverse possession began is identification of the person or persons said to have possessed the land adversely. There are three possible adverse possessors the Mayfields and/or W.M. Ussery and/or the original grantor, James A. Sullivan. Even if we may assume that D.M. Mayfield and A.E. Mayfield possessed the property prior to their October 28, 1892, conveyance to the Boothes, there is nothing in the record reflecting the date the Mayfields' possession began, much less that it met the other requisites of adverse possession recited above.
The claim is equally problematic if William Ussery a/k/a W.M. Ussery is the adverse possessor. The Ryes claim that Ussery took title via the tax sale of March 4, 1878, and entered into possession thereafter. The ninety-nine year lease Ussery acquired February 5, 1883, suggests the lands were treated as school lands. There is nothing in the record suggesting that, prior to 1890, Ussery put these lands to any use inconsistent with his status as a lessee. Moreover, there is nothing to suggest that Ussery asserted any dominion over the remaining forty acres as those were leased to William Reese for ninety-nine years. It is within the judicial knowledge of this Court that lands leased by a board of supervisors during this period of time to a private individual for a period of ninety-nine years were considered by the lessor board of supervisors to be lands held in trust for the public schools.
Thus seen, the Ryes' adverse possession argument simply fails. There is no getting around the fact that the Chancery Court's ruling in favor of the Ryes in this regard is clearly erroneous. Here, of course, I beat a dead horse, as the majority makes no attempt to defend the Chancery Court's *914 reasoning, only its result. With respect, I suggest that result may be defended neither on grounds offered by today's majority nor those of the court below nor on any other that might be imagined.
PRATHER, SULLIVAN and ZUCCARO, JJ., join in this opinion.
NOTES
[1] The subject property was not 16th section land, nor was it lieu land. This sale is distinguished from tax sale of 16th section lands and cases discussing such sales. Burrage v. Lauderdale County, 245 So. 2d 842 (Miss. 1971); Creekmore v. Neshoba County, 216 Miss. 589, 63 So. 2d 45 (1953); Sumrall v. State, 48 So. 2d 502 (1950).
[2] This discussion does not overlook Hewling v. Blake, 110 Miss. 225, 70 So. 247 (1915), wherein the Court stated than an 1867 tax sale of exempt property conveyed no title because exempt property was not subject to sale for taxes. Hewling is distinguished in that it was not decided under the tax sale statute, nor was the tax sale statute argued in the briefs.
Further, the validity of the 1885 tax sale of the subject property is not an issue. All of the property sold for taxes in 1885 had previously been sold in the 1878 tax sale.
[1] Just how equitable estoppel of public officials and agencies may on principle co-exist with preclusion of laches and limitations defenses is not apparent. Some day soon we should resolve the point. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1767831/ | 588 So. 2d 167 (1991)
Carl LEWIS
v.
ALUMINUM COMPANY OF AMERICA and Laboratory Specialists, Inc.
No. 91-CA-0267.
Court of Appeal of Louisiana, Fourth Circuit.
October 15, 1991.
Rehearing Denied November 13, 1991.
Writ Denied January 30, 1992.
*168 James A. Gray, II, Elie, Jones & Gray, New Orleans, for plaintiff-appellant.
Charles H. Hollis, Kullman, Inman, Bee, Downing & Banta, New Orleans, for defendant-appellee.
Before SCHOTT, LOBRANO and WILLIAMS, JJ.
WILLIAMS, Judge.
Plaintiff, Carl Lewis, appeals the dismissal of his claims against Laboratory Specialists, Inc. (LSI), a company hired by his employer to perform an analysis of his urine sample. The test results reported by LSI to the employer reflected that he tested positive for THC. Asserting these allegations, Lewis sued LSI and others, claiming LSI negligently tested the urine sample(s), its erroneous results caused the termination of his employment, and its erroneous results affected his employment opportunities and his general reputation in the community. He claims these allegations set forth greviences for which the law affords relief and, therefore, the trial court erred in sustaining LSI's peremptory exception which raised the objection of no cause of action. As we agree with Lewis, we reverse and remand.
FACTUAL AND PROCEDURAL HISTORY
Lewis filed suit on September 1, 1988, against Aluminum Company of America (ALCOA) and Laboratory Specialists, Inc. He amended the original petition on February 23, 1990, to include American Medical International Occupational Health Center (Am-Med) as a co-defendant.[1] The amended petition alleges Lewis contracted with ALCOA in September 1987 to provide certain warehouse services for the sum of $14 an hour. It asserts that in late November 1987 he was offered the opportunity to exchange his independent contractor status for employment status. The petition alleges he was then told to undergo drug testing. He submitted to the drug test [urinalysis], and it was performed by Am-Med and analyzed by LSI.
The petition alleges he was initially informed he passed the drug test. Later, he was told he failed the drug test and, as a consequence, would not be made a regular employee and would have his independent contractor status terminated. Despite his protestations that he never used drugs, the *169 petition alleges ALCOA failed to order a retest.
The petition alleges that, if the drug test results were positive, the results were caused by a mistake of ALCOA, LSI or Am-Med. It alleges he obtained an independent drug test showing he was drug-free. ALCOA, however, refused to reconsider its position as to his employment and/or independent contractor status.
Thus, the petition alleges Am-Med negligently drew, stored, processed, labeled and/or transferred the samples drawn from him, and LSI negligently tested the samples. The erroneous test results caused the termination of his employment. He further alleges the report that he is a drug user affected his ability to find other employment and damaged his general reputation in the community.
In response to the suit, LSI and ALCOA filed a joint motion for summary judgment on March 23, 1989. Judgment was rendered on May 8, 1989, denying the motion as to Lewis's negligence claim against LSI and his defamation claim against ALCOA. The motion was granted as to his wrongful discharge claim against ALCOA.
On September 6, 1990, LSI filed a peremptory exception raising the objection of no cause of action, asserting that Louisiana law does not recognize a cause of action for negligent interference with contract rights. The trial court sustained the exception on October 1, 1990, allowing Lewis 15 days to amend his petition. Thereafter, Lewis filed this suspensive appeal.
LEGAL PRECEPTS
A. Objection of No Cause of Action
The purpose of the peremptory exception raising the objection of no cause of action is to determine the legal sufficiency of the petition. It questions whether the petition alleges grievances for which the law affords a remedy. Whitney Nat. Bank v. Jeffers, 573 So. 2d 1262 (La.App. 4th Cir.1991); Sajare Interests, Ltd. v. Esplanade Management, Inc., 459 So. 2d 748 (La.App. 4th Cir.1984); Reed v. Yor-Wil, Inc., 406 So. 2d 236 (La.App. 1st Cir.1981), writ den., 410 So. 2d 1135 (La.1982). For the adjudication of the objection, the well-pleaded facts of the petition are accepted as true. Whitney Nat. Bank v. Jeffers, supra; Reed v. Yor-Wil, Inc., supra.
No evidence may be introduced to support or controvert the objection. LSA-C.C.P. art. 931; Smith v. Cole, 553 So. 2d 847 (La.1989); Whitney Nat. Bank v. Jeffers, supra; Ustica Enterprises, Inc. v. Costello, 434 So. 2d 137 (La.App. 5th Cir. 1983), on reh'g, 454 So. 2d 908 (La.App. 5th Cir.1984). The objection is tried on the face of the pleadings and the court accepts the facts alleged in the petition as true, determining whether the law affords any relief to plaintiff if those facts are proved at trial. LSA-C.C.P. art. 927; Smith v. Cole, supra; Robinson v. North American Royalties, Inc., 470 So. 2d 112 (La. 1985). Contrary factual assertions are to be considered defenses which must be tried on the merits. Whitney Nat. Bank v. Jeffers, supra; Sajare Interests, Ltd. v. Esplanade Management, Inc., supra. The exception must be overruled unless the plaintiff has no cause of action under any evidence admissible, based upon the pleadings. LSA-C.C.P. art. 927; Smith v. Cole, supra; Robinson v. North American Royalties, Inc., supra.
B. Negligence
It is the basic policy of our law that every act whatever of a man that causes damage to another obliges him by whose fault it happened to repair it. LSA-C.C. art. 2315; 9 to 5 Fashions, Inc. v. Spurney, 538 So. 2d 228 (La.1989). Fault can be the result of neglect, LSA-C.C. art. 2316, or the relationship one party bears to another, LSA-C.C. arts. 667, 2317-2322. Tallo v. Stroh Brewery Co., 544 So. 2d 452 (La.App. 4th Cir.1989), writ den., 547 So. 2d 355 (La.1989). If the act is predicated on negligence, the duty-risk analysis is utilized to determine if the complained of conduct constitutes fault, i.e., whether the defendant breached a legal duty imposed to protect *170 against a particular risk.[2]Id. Nevertheless, despite the broad ambit of the civilian concept of fault, liability has not been extended to various forms of negligent interference with contract, where performance of a contract is prevented or rendered more burdensome due to the actions of a tortfeasor. 9 to 5 Fashions, Inc. v. Spurney, supra; PPG Industries, Inc. v. Bean Dredging, 447 So. 2d 1058 (La.1984); Herbert v. Placid Refining Co., 564 So. 2d 371 (La.App. 1st Cir.1990), writ den., 569 So. 2d 981 (La.1990)[3]. But see Peacock v. Brightway Signs, Inc., 545 So. 2d 649 (La. App. 5th Cir.1989), writ den., 551 So. 2d 636 (La.1989).
APPLICATION OF PRECEPTS TO FACTS
Lewis claims the trial court erred by sustaining the peremptory exception as his allegation, that he was injured as a result of LSI's negligent analysis of his [urine] sample, sets forth a cause of action for which the law affords a remedy. We agree with him. The allegations in his petition set forth a cause of action in general negligence, i.e., the breach of the duty to perform the drug tests in a competent and non-negligent manner.
We find an ease of association exists between the rule of law contained in LSA-C.C. arts. 2315 and 2316 which imposes a duty on a tortfeasor to repair damage caused through his negligence, imprudence or want of skill, the risk of injury which Lewis sustained and the losses which he seeks to recover. Further, finding Lewis falls within the intended protection of the rule of law does not offend policy considerations. See, PPG Industries, Inc. v. Bean Dredging, supra.
The precept that liability does not extend to negligent interference with contract rights is not applicable to Lewis's claims. He was not an unknown third party to LSI. Rather, when LSI analyzed Lewis's sample, it was aware that negligent testing on its part could wrongfully identify him as a drug user. LSI was cognizant that if the test results it submitted to ALCOA were inaccurate, both Lewis's reputation and his employment opportunities would be compromised. These damages were directly foreseeable. Thus, as the chance of Lewis being harmed was not remote, extending LSI's liability to encompass him does not create an undue burden upon LSI's freedom of action. Instead, it should foster a greater sense of responsibility within it to perform its drug testing services in a skillful and competent manner. See Id.
Lewis's petition asserts that LSI negligently tested the [urine] sample(s), its erroneous results indicated he tested positive as a drug user, and its erroneous results caused the termination of his employment and affected his employment opportunities and his general reputation in the community. Accepting these allegations as true, the petition sets forth a cause of action of negligence under LSA-C.C. arts. 2315 and 2316. Therefore, regardless of LSI's contract *171 with ALCOA and of Lewis's status as an at-will employee of ALCOA,[4] if Lewis proves these facts at trial he will be entitled to relief.
For the reasons assigned, we reverse the trial court's ruling which sustained the peremptory exception raising the objection of no cause of action.
REVERSED AND REMANDED.
NOTES
[1] Am-Med settled the claims against it and has been voluntarily dismissed from the suit.
[2] Duty can be based upon a statute or an ordinance, or on a jurisprudential rule of law. Tallo v. Stroh Brewery Co., supra, citing Pickett v. Jacob Schoen & Son, Inc., 488 So. 2d 1257 (La. App. 4th Cir.1986). Or, it can be determined from a consideration of the relationship of the parties, the risks involved in the transaction or conduct, and on an appraisal of what a reasonable man would do or refrain from doing under the circumstances. Id., citing Stone, Tort Doctrine, Louisiana Civil Law Treatise, Vol. 12.
[3] LSI contends that we are constrained to follow the case of Herbert v. Placid Refining Co., supra. In Herbert, the trial court's summary judgment in favor of LSI was affirmed on appeal after the First Circuit determined LSI did not owe Herbert a duty to properly analyze his body fluids because LSI's contractual relationship was with Placid and not with Herbert. The court concluded that, as the essence of Herbert's claim is LSI's negligence caused Placid to terminate his employment, and as Louisiana is an employment at will state, LSI had no duty to protect Herbert from the risk of having his employment terminated.
We, however, do not find the dicta in Herbert controlling. The issue on appeal therein was not whether Herbert's petition set forth a cause of action in negligence, but whether the trial court committed reversible error when it concluded no genuine issues of material fact existed and, as a matter of law, LSI was entitled to summary judgment. Further, the only damages the First Circuit appeared to consider was the termination of Herbert's terminable at will employment relationship with Placid.
[4] Even when employment is terminable at will, LSA-C.C. art. 2747, the employment is a subsisting relationship, of value to the employee, until it is terminated. Thus, while the possibility of employment termination at any time affects the amount of damages sustained by the employee, it should not affect the employee's right of recovery. See generally, Prosser, Law of Torts, Sect. 129 (4th ed. 1971). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1768073/ | 588 So. 2d 175 (1991)
David B. ELLIOTT, Jr.
v.
LABORATORY SPECIALISTS, INC.
No. 91-CA-266.
Court of Appeal of Louisiana, Fifth Circuit.
October 16, 1991.
Rehearing Denied November 18, 1991.
Writ Denied January 30, 1992.
Kevin Patrick Monahan, Robert Felton Monahan, Baton Rouge, for plaintiff-appellee.
Keith M. Pyburn, Jr., Howard Shapiro, New Orleans, Alton B. Lewis, Jr., Hammond, for defendant-appellee.
Charles H. Hollis, New Orleans, for defendant-appellant.
Before GRISBAUM and DUFRESNE, JJ., and ELORA C. FINK, J., Pro Tem.
DUFRESNE, Judge.
Plaintiff, David B. Elliott, Jr., filed suit against the defendant, Laboratory Specialists, Inc. (LSI) for negligently conducting and reporting a post-accident urinalysis.
Mr. Elliott was required by his former employer, Avondale Industries, Inc. to submit to a drug test after suffering an on the job injury December 10, 1985. LSI reported a positive test result, thereafter Mr. Elliott was terminated because he had allegedly violated Avondale's substance abuse policy.
David Elliott filed suit against LSI based on its negligence in conducting and reporting the urinalysis. He had also sued his former employer, Avondale and Clovin Hayes & Associates, Inc; however, both were dismissed by summary judgment prior to trial.
After a jury trial LSI was found negligent in the manner in which it tested Elliott's urine sample. He was awarded $25,000 in damages. From this verdict LSI has appealed and argues that the plaintiff has failed to state a cause of action.
LSI had reported to Avondale that Mr. Elliott's urine tested positive for THC, the active ingredient in marijuana. As a result he was discharged from Avondale's employment for violating the company's substance abuse policy.
At trial Mr. Elliott presented testimony of two individuals, James Woodford, Ph.D. in chemistry and a drug testing expert and *176 John Morgan, M.D., medical professor and Director of Pharmacology, City College of New York, another drug testing expert.
They concluded that the protocol and methodology of LSI was scientifically inadequate and failed to meet the scientific standards as accepted in December 1985.
Dr. Morgan testified that the use of the testing procedures as utilized by LSI "cannot under any circumstances, be considered appropriate scientifically defensible, ethical or proper at any kind of level". Furthermore, with respect to the "chain of custody", utilized by LSI, Dr. Morgan opined that the protocol was "totally inadequate".
The focus of LSI's appeal is that Elliott's contention is not actionable under Louisiana law citing Hebert v. Placid Refining Co., 564 So. 2d 371 (La.App. 1st Cir.1990). LSI argues that a terminated employee cannot state a cause of action for the testing of the employee's urine, whether negligently or not. They contend that it owed Elliott no duty to protect against the risk of a false-positive test.
Generally, under Louisiana law a person's duty toward another can be simply stated as the obligation to conform to the standard of conduct of an average reasonable man under same or similar circumstances. Thus, for LSI to have breached any duty, first one must be owed and secondly it must have acted unreasonably in testing the urine sample. After examining the record we find the evidence convincing that LSI failed to conform with appropriate and proper methodology. LSI's conduct was delictual as set forth pursuant to law LSA-cc. arts. 2315 and 2316. We find the elements of tort present, fault, causation and damage. Morris v. Orleans Parish School Board, 553 So. 2d 427 (La.1989). We also find the existence of a non-contractual obligation between Elliott and LSI. To suggest that LSI does not owe Elliott a duty to analyze his body fluid in a scientifically reasonable manner is an abuse of fundamental fairness and justice. LSI should be held responsible for its conduct. The risk of harm in our society to an individual because of a false-positive drug test is so significant that any individual wrongfully accused of drug usage by his employer is within the scope of protection under the law.
Mr. Elliott's being labelled an illegal drug user has such emotional economic and career detrimental affects that failure to find protection under our law would be a step backwards for the protection of the individual. LSI's duty to Mr. Elliott is as obvious as any independent contractor's standard of care to an employee of another.
The issue of whether a duty is owed is largely based on the interaction between parties in society and the seriousness of certain consequences should sub-standard conduct occur. LSI's behavior should have conformed to an acceptable standard of conduct which would have prevented undue risks of harm.
We find that drug testing laboratories (acting as independent contractors) owe a duty of care to the testee/employee, regardless of the contractual arrangement between the lab and the employer. Privity of contract should never excuse a duty imposed by law on the conduct of individuals towards another in a reasonable society.
Accordingly, for the above reasons, the jury verdict is affirmed.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2401211/ | 653 F.Supp. 964 (1987)
UNITED STATES of America,
v.
ONE 1978 MACK GLIDER KIT TRACTOR, One 1967 Mack Tractor, One 1970 Mack Tractor Joseph Swirsky, Claimant.
Civ. No. N-86-392 (PCD).
United States District Court, D. Connecticut.
February 23, 1987.
Timothy C. Moynahan, Moynahan, Ruskin, Mascolo & Mariani, Waterbury, Conn., for claimant Joseph Swirsky.
Leslie C. Ohta, Asst. U.S. Atty., Stanley A. Twardy, Jr., U.S. Atty., New Haven, Conn., for U.S.
RULING ON MOTION TO DISMISS
DORSEY, District Judge.
Claimant, Joseph Swirsky, moves to dismiss plaintiff's complaint of forfeiture. This action was brought pursuant to 18 U.S.C. § 512(a), which provides, in relevant part:
If an identification number for a motor vehicle or motor vehicle part is removed, obliterated, tampered with, or altered, such vehicle or part shall be subject to seizure and forfeiture to the United States unless
(1) in the case of a motor vehicle part, such part is attached to a motor vehicle and the owner of such motor vehicle does not know that the identification number has been removed, obliterated, tampered with or altered; ....
Claimant argues that the complaint should be dismissed on the ground that plaintiff *965 has not alleged that claimant knew of the alleged tampering. Plaintiff argues that claimant must allege lack of knowledge as a defense. Both parties have relied extensively on the legislative history and general principles of statutory construction as this is a case of first impression with regard to the interpretation of this statute.
Discussion
Title 18 U.S.C. §§ 511 and 512 were passed to deter and punish those who steal cars in order to resell them whole or disassemble them and sell the component parts ("chop shop operations"). Section 511(a) provides that "[w]hoever knowingly removes, obliterates, tampers with, or alters an identification number for a motor vehicle, or motor vehicle part, shall be fined not more than $10,000 or imprisoned not more than five years, or both." Clearly, § 511 was intended to be applied only to those who knowingly violated the Act. See Motor Vehicle Theft Law Enforcement Act of 1984, House Report No. 98-1087, reprinted in 1984 U.S.Code Cong. & Adm. News 4628, 4649-50. The legislative history, however, does not shed any light on the interpretation of § 512 except to note that that section was considered and passed along with § 511.
"[T]he basic nature of a forfeiture proceeding is in rem, reflecting the legal fiction that the [property] ... is guilty of facilitating [the crime or itself the fruit of the criminal enterprise]." United States v. One Mercedes-Benz 380, 604 F.Supp. 1307, 1312 (S.D.N.Y.1974), aff'd without opinion, 762 F.2d 991 (2d Cir.1985). Section 512 is closely analogous to 21 U.S.C. § 881(a)(4). Courts which have interpreted the latter statute uniformly hold that, once the Act has been shown to have been violated, "it is the claimant's burden to prove that the forfeiture does not fall properly within the Act." United States v. One 1976 Buick Skylark, 453 F.Supp. 639, 642 (D.Colo.1978); One Mercedes-Benz 380, 604 F.Supp. at 1311-12 (construing 21 U.S.C. § 881(a)(4); "Once the Government has established probable cause for seizure of the vehicle, the burden falls upon the claimant to show that the vehicle should be absolved from culpability, or establish that forfeiture is not properly within the forfeiture statute."). Cf. United States v. One 1978 Chrysler LeBaron, 531 F.Supp. 32, 34 (E.D.N.Y.1981) (construing 21 U.S.C. § 881(a)(4)). United States v. One 1976 Lincoln Mark IV, 462 F.Supp. 1383, 1388 (W.D.Pa.1979) (construing 21 U.S.C. § 881(a)(4)). That the same burden should likewise be placed on claimant is particularly apparent by comparing the language used in § 511 with the language used in § 512. The former specifically provides that the government must prove a knowing violation of the Act; the latter does not. Had Congress intended that the government was obliged to prove a knowing violation before § 512 could be invoked, § 512 would have been cast exactly in the same language as § 511.
Accordingly, claimant's motion is denied.
SO ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1298147/ | 323 S.E.2d 9 (1984)
312 N.C. 393
Ray Livingston JONES
v.
Matt GWYNNE, Christal Newton, Ramona Galarza and McDonald's Corporation.
No. 531A83.
Supreme Court of North Carolina.
December 4, 1984.
*10 Teague, Campbell, Conely & Dennis by C. Woodrow Teague and Dayle A. Flammia, Raleigh, and Smith, Dickey & Parish by W. Ritchie Smith, Jr., Fayetteville, for plaintiff-appellee and cross-appellant.
Hunton & Williams by Odes L. Stroupe, Jr., and David Dreifus, Raleigh, for defendants-appellants and cross-appellees.
FRYE, Justice.
On defendants' appeal, the issue is whether the Court of Appeals correctly found no error when the trial court instructed the jury in a malicious prosecution action that subsequent indictments by a grand jury could not be considered as evidence of probable cause. On plaintiff's cross-appeal, we review that portion of the Court of Appeals' decision which holds that the plaintiff's evidence was insufficient to sustain a jury award of punitive damages. On defendants' appeal, we affirm. On plaintiff's cross-appeal we reverse the decision of the Court of Appeals and reinstate the judgment of the trial court.
I.
This is a civil action for malicious prosecution. By complaint filed 29 June 1979, the plaintiff, Ray Livingston Jones, alleged that on and prior to 18 May 1979, he was employed by McDonald's Corporation as manager of its business located at 3002 Raeford Road, Fayetteville, North Carolina; that the individual defendants, Christal Newton and Ramona Galarza (cashiers at the Raeford Road store), and Matt Gwynne, regional security officer, were on that date acting as the employees, servants and agents of the corporate defendant, McDonald's Corporation; that on or about 18 May 1979, the individual defendants wilfully, wrongfully, maliciously and without just and probable cause instituted, or caused to *11 be instituted, two criminal actions against plaintiff, charging the plaintiff with embezzling from McDonald's Corporation the sum of $1.50 on or about 15 May 1979 and an "indeterminate amount" at some time prior to and after 13 April 1979; that such charges were false and untrue and known at the time by the defendants to be false and untrue; that said criminal charges were terminated in favor of the plaintiff on 26 June 1979, when the said charges were voluntarily dismissed by the district attorney; that the defendants acted without justification or probable cause and acted with actual malice towards the plaintiff, entitling the plaintiff to both compensatory and punitive damages; that by reason of the acts and conduct of the defendants, plaintiff was arrested and taken into custody, lost his job, opportunity of advancement and former good standing with McDonald's Corporation, was humiliated and caused great grief, embarrassment, etc.; compensatory damages of $200,000 and punitive damages of $100,000 were sought against all defendants, jointly and severally.
On 13 August 1979, while the present action was pending, the Cumberland County Grand Jury returned three true bills of indictment against Mr. Jones for embezzlement from the McDonald's restaurant.[1]
On 20 August 1979, defendants filed an answer in this malicious prosecution action, admitting residence of the parties and that the individual defendants were, on or about 18 May 1979, acting as the employees, servants and agents of McDonald's Corporation. The remaining allegations of the complaint were denied.
Plaintiff was tried on the criminal charges in February 1980. After hearing the State's evidence on the indictment for embezzling $1.51 from McDonald's, which was considered by the assistant district attorney to be his strongest case, the trial judge dismissed the case. Thereafter, the assistant district attorney took voluntary dismissals on the remaining charges.
The present malicious prosecution action was tried in January 1982. The trial court allowed Defendants Newton and Galarza's motions for a directed verdict at the end of the plaintiff's evidence but denied Defendants Gwynne and McDonald's Corporation's motions for a directed verdict.
The jury returned a verdict finding that defendants Matt Gwynne and McDonald's Corporation had "maliciously prosecute[d] criminal charges of embezzlement, issued on May 18 1979, against the Plaintiff, Ray Jones." The jury awarded plaintiff $200,000 for compensatory damages and $100,000 for punitive damages.
On appeal, a sharply divided panel of the Court of Appeals (one judge writing for the majority, one judge concurring in the result and one judge dissenting) found no error in the trial proceedings leading to the jury award of compensatory damages. However, the court unanimously voted to vacate the award of punitive damages because there was insufficient evidence adduced at trial to support such an award.
Other facts necessary for a determination of the issues raised on appeal will be incorporated in this opinion.
II.
"An action in tort for malicious prosecution is based upon a defendant's malice in causing process to issue." Middleton v. Myers, 299 N.C. 42, 44, 261 S.E.2d 108, 109 (1980). A plaintiff must prove four essential elements to establish a malicious prosecution claim against an accuser. He must prove "[1] that defendant initiated the earlier proceeding, [2] that he did so maliciously and [3] without probable cause, and [4] that the earlier proceeding terminated in plaintiff's favor." Stanback v. Stanback, 297 N.C. 181, 202, 254 S.E.2d 611 (1979).
In the instant case, defendants' appeal to this Court relates to an alleged error in the trial court's instruction to the jury on the *12 question of probable cause. That instruction is as follows:
The question presented here is not one of the guilt or innocence of Ray Jones. Rather, it is the question of probable cause. Now, probable cause does not depend upon the guilt or innocence of the person accused but upon whether the Defendants had reasonable grounds for the suspicion supported by circumstances sufficiently strong in themselves to warrant cautious man to believe that the accused is guilty of the offense. And I am referring to the events with which he is ultimately charged on the eighteenth day of May 1979. And in this case I refer specifically to the two felony embezzlement warrants issued by a magistrate on the eighteenth day of May 1979. This case is based upon those two warrants and not upon any bills of indictment which may have subsequently been returned by the Grand Jury.... And I instruct you that you may not consider the evidence of the return by the Grand Jury of the bills of indictment as true bills on this question because it occurred after the filing of this action. However, you may consider the finding of the bills of indictment and Ray Jones' acquittal there on the question of whether or not the proceedings commenced by the issuance of the warrants has actually terminated in favor of the Plaintiff.
The defendants argue in this Court, as they did in the Court of Appeals, that the above instruction is erroneous as a matter of law. Stated more specifically, the defendants contend that "the jury was erroneously instructed that it could not consider the grand jury indictments as evidence of probable cause."
In concluding that the trial court had not erred in giving the challenged instruction, Judge Hedrick, author of the majority opinion of the Court of Appeals, reasoned as follows:
While the general rules governing the admissibility of grand jury indictments in malicious prosecution cases are clear, it is true, as defendants concede in their memorandum of additional authority, that `[t]he factual situation in this case has never been ruled upon by a North Carolina appellate court.' In this case, the indictments defendants sought to introduce were issued after the present action for malicious prosecution was commenced. Plaintiff in the present case based his complaint not on the indictments, but rather on the arrest warrants issued months before. When the district attorney took a voluntary dismissal on the warrants, the criminal proceedings against Jones terminated for the purpose of this action, and the tort was complete. Taylor v. Hodge, 229 N.C. 558, 50 S.E.2d 307 (1948); Perry v. Hurdle, 229 N.C. 216, 49 S.E.2d 400 (1948). See also W. Prosser, Handbook of the Law of Torts Sec. 119, at 839 (4th ed. 1971). While we could avoid deciding the question by agreeing with plaintiff that the challenged instruction, if error, was not prejudicial, we choose to be more definitive and declare that the better rule in such a case bars consideration of later indictments on the issue of probable cause. We note that the inquiry into probable cause seeks to establish whether there existed `such facts and circumstances, known to [the defendant] at the time, as would induce a reasonable man to commence a prosecution.' Pitts v. Pizza, Inc., 296 N.C. 81, 87, 249 S.E.2d 375, 379 (1978) (citation omitted). We do not believe that a grand jury determination of the existence of probable cause, issued after the alleged tort is complete and the complaint filed, is relevant to this inquiry. We thus hold that the trial judge did not err in giving the challenged instructions.
Jones v. Gwynne, 64 N.C.App. 51, 56, 306 S.E.2d 574, 577 (1983). Judge Hill concurred in the result, stating that he believed that the trial judge erred by instructing the jury "not to consider the return of true bills of indictment as evidence of probable cause." However, he thought the instruction was "harmless under the facts of the case." Gwynne, 64 N.C.App. at 60, 306 S.E.2d at 579-80 (Hill, J., concurring). *13 Judge Webb, in a dissenting opinion, stated that he believed that the trial court had erred in instructing the jury not to consider the grand jury's return of true bills of indictment as evidence of probable cause. Gwynne, 64 N.C.App. at 60-61, 306 S.E.2d at 580 (Webb, J., dissenting).
The defendants contend that the Court of Appeals' holding, that the challenged jury instructions were correct, was "based upon the erroneous assumption that the criminal proceedings against Jones terminated with the voluntary dismissal of the warrants on June 26, 1979." Defendants further contend that "[t]here can be no dispute that if the criminal proceedings against Jones did not terminate until February 1980 [the date on which the superior court dismissed the charges against plaintiff based on the indictments], the jury should have been instructed to consider the indictments as evidence of probable cause." We hold that the criminal proceedings terminated in plaintiff's favor on 26 June 1979, the date on which the assistant district attorney took a voluntary dismissal on the warrants.
This Court has previously held that a plaintiff in a malicious prosecution case has shown a favorable termination of a criminal proceeding when he shows that the prosecutor voluntarily dismissed the charges against him. Pitts v. Pizza, Inc., 296 N.C. 81, 249 S.E.2d 375 (1978); Taylor v. Hodge, 229 N.C. 558, 50 S.E.2d 307 (1948). See also Prosser and Keeton on the Law of Torts, § 119, at 874-75 (5th ed. 1984). Therefore, once the plaintiff presented evidence in this case that the assistant district attorney had voluntarily dismissed the embezzlement charges against him, he had shown a termination of the criminal proceedings favorable to him.
In Marcus v. Bernstein, 117 N.C. 31, 23 S.E. 38 (1895), this Court stated the following concerning the requirement that plaintiff show a termination of the prior prosecution:
The essential thing is that the prosecution on which the action for damages is based should have come to an end. How it came to an end is not important to the party injured, for whether it ended in a verdict in his favor, or was quashed, or a nol. pros. was entered, he has been disgraced, imprisoned and put to expense, and the difference in the cases is one of degree, affecting the amount of recovery.
Id. at 33, 23 S.E. at 39.
Ordinarily the termination of the proceeding must result in a discharge of the plaintiff so that new process must issue in order to revive the proceeding against him. See Brinkley v. Knight, 163 N.C. 194, 79 S.E. 260 (1913).
The issuance of a new process in order to revive the proceedings against the plaintiff is exactly what occurred in the instant case. After the assistant district attorney had voluntarily dismissed the embezzlement charges based upon warrants issued against the plaintiff, it was necessary for the district attorney to resort to a new process in order to revive the charges. Specifically, he had to and did seek the return of true bills of indictment from the grand jury. This evidence affirmatively shows that the criminal proceedings based upon the warrants had terminated.
Defendants argue that the assistant district attorney indicated his intention to seek grand jury indictments (which he subsequently did) at the time he voluntarily dismissed the embezzlement charges against the plaintiff.[2] Since these true bills of indictment were returned against the plaintiff, then the criminal proceedings against plaintiff did not terminate "until a verdict was directed in his favor [during his trial for embezzlement in February 1980]."
It is defendants' position that the subsequent attempt and actual procurement of true bills of indictment after warrants for embezzlement have been voluntarily dismissed effectively prevents a plaintiff from *14 showing a termination of criminal proceedings in his favor, sufficient to support a malicious prosecution action. We disagree.
Without attempting to set out the majority and minority rules concerning when there has been a termination favorable to the plaintiff in a malicious prosecution action, we note that the California Supreme Court discussed the necessity of a "final termination" at great length in Jaffe v. Stone, 18 Cal.2d 146, 114 P.2d 335 (1941). In Jaffe, the California Supreme Court stated:
In stating the requirement of termination, courts often say that the proceeding must be `finally' terminated. Such a statement is entirely accurate if the ordinary reasonable meaning of the words is taken. The proceeding must be finally terminated; that is, the particular criminal proceeding commencing, for example, by complaint and arrest, must have passed through some such stage as preliminary hearing and dismissal, or trial and acquittal or abandonment by the prosecuting authorities. When this has occurred, that proceeding is finally terminated. If the termination was such as not to constitute a bar to a new prosecution, the accused may be charged and tried again for the same offense; but this will be a new proceeding, with a new court number, new pleadings, new judge and jury, and a new judgment. (emphases in original).
....
Mistaken emphasis is placed upon the idea of `final' rather than `favorable' termination; and the offense is confused with the proceeding. When we look at the problem in the light of the background of the tort and the purpose of the requirement of favorable termination, we perceive that freedom of the accused from new prosecutions is not involved in all cases. Such freedom may be assured by an acquittal at the trial, or by some other termination at the trial to which jeopardy attaches. But where the proceeding is dismissed by a magistrate, there is no jeopardy, and no bar to a new prosecution until the statute of limitations runs on the offense. In the case of the usual felony, this is three years in California (citation omitted), but in a few instances (murder, embezzlement of public money, falsification of public records) there is no limitation and the prosecution is never barred. Consider, then, the effect of this doctrine upon the rights of a plaintiff who is wrongfully and maliciously accused of a felony, arrested and brought before a magistrate, and is discharged because no case against him is made. He must ordinarily wait three years before he may sue for malicious prosecution. In some instances, he must wait longer; and in others it would seem that he cannot sue at all because the statute of limitations does not run on the offense. There is no rational basis for this result, nor any justification for it in policy.
Id. at 152-55, 114 P.2d at 339-40. (emphases in original).
The present law of North Carolina as stated in Bernstein, Brinkley, and Taylor is in accord with the above quoted language of Jaffe. Those cases collectively stand for the proposition that a plaintiff has proven a termination in his favor in a malicious prosecution action when he shows that the prosecutor has voluntarily dismissed the charges against him thereby having to resort to the institution of new proceedings in order to further prosecute the case. Accordingly, the assistant district attorney's voluntary dismissal of the charges against the plaintiff in the instant case terminated that prosecution. Plaintiff's later indictment by a grand jury did not constitute a continuation of the proceedings based upon the warrants but instead was the initiation of new proceedings against the plaintiff. That being so, it is clear that the criminal proceedings terminated in plaintiff's favor on 26 June 1979.
Defendants further argue that even if the criminal proceedings against the plaintiff terminated on 26 June 1979, the jury still should have been allowed to consider the subsequently returned true bills of indictment *15 on the question of probable cause. They contend that since grand jury bills of indictment are prima facie evidence of probable cause, the trial court erred in instructing the jury not to consider the indictments on the issue of probable cause. We disagree.
We are not prepared to hold that a grand jury indictment, returned after a criminal proceeding initiated by the issuance of a warrant has been voluntarily dismissed, is prima facie evidence of probable cause in a malicious prosecution action based upon the criminal proceedings initiated by the warrant. As previously stated herein, the criminal proceedings upon which plaintiff based his present malicious prosecution action were terminated in plaintiff's favor on 26 June 1979. At that time, the alleged tort was complete. Thus, the grand jury indictments, which were returned on 13 August 1979, had no bearing on, and were largely irrelevant to, the question of whether, on 18 May 1979, there existed "such facts and circumstances, known to [the defendants] at the time, as would induce a reasonable man to commence a prosecution." Pitts v. Pizza, Inc., 296 N.C. 81, 87, 249 S.E.2d 375, 379 (1978). In short, the indictments in the instant case were only prima facie evidence of probable cause in the proceedings which were initiated by the return of the grand jury indictments. Since plaintiff's present malicious prosecution action was based upon the arrest warrants and their subsequent dismissal, the grand jury indictments were not prima facie evidence of probable cause in this case. This assignment of error is rejected.
III.
We next address the issue of whether the jury award of punitive damages to the plaintiff is supported by the evidence adduced at trial. The jury returned a verdict finding that Matt Gwynne and McDonald's Corporation maliciously prosecuted the plaintiff, Ray Jones, and assessed punitive damages in the amount of $100,000 against Mr. Gwynne and McDonald's Corporation. The trial court entered judgment accordingly. Plaintiff cross-assigns as error that portion of the Court of Appeals' opinion which vacates the portion of the judgment awarding punitive damages to the plaintiff because the evidence was insufficient as a matter of law to support such an award. Plaintiff contends as follows on this issue:
[Plaintiff] alleged and presented evidence of actual malice and a sense of personal ill will toward the [plaintiff] on the part of [defendant] McDonald's agents within the scope of their employment. [Plaintiff's] evidence also raised the issue that the tort was done under circumstances of insult and rudeness and in a manner which showed a reckless and wanton disregard or an indifference for plaintiff's rights. Under either or both showings the [plaintiff] was entitled as the Court ruled, to allow questions of fact to be presented to the jury for its determination.
We agree with the contentions of the plaintiff.
On appeal to the Court of Appeals, defendants contended that their motion for judgment notwithstanding the verdict regarding the issue of punitive damages was improperly denied by the trial court. The Court of Appeals held that plaintiff's evidence was insufficient as a matter of law to support a finding of "actual malice" in the sense of personal ill will on the part of Mr. Gwynne. The Court of Appeals also held that the evidence was insufficient as a matter of law to support a finding under the theory of respondeat superior that McDonald's Corporation acted out of actual malice in instituting the criminal proceedings against the plaintiff. The Court of Appeals stated:
We next turn to the question whether the evidence is sufficient to permit a finding under a theory of respondeat superior that McDonald's Corporation acted out of actual malice in instituting proceedings against the plaintiff. The law is clear that `[p]unitive damages may be awarded ... from [sic] a corporation for a tort wantonly committed by its *16 agents in the course of their employment.' Clemmons v. Insurance Co., 274 N.C. 416, 424, 163 S.E.2d 761, 767 (1968) (citations omitted). In the present case, the jury found that Gwynne had committed a tort, and that he was acting in the course of his employment when he did so. We have concluded, however, that the evidence of Gwynne's actual malice is insufficient to permit imposition of punitive damages on that basis. It follows that McDonald's cannot be said to have acted out of actual malice based on the acts of Gwynne.
Id. 64 N.C.App. at 59, 306 S.E.2d at 579.
The Court of Appeals also concluded that the evidence was insufficient to show that the prior criminal proceedings were instituted in a manner which established "reckless and wanton conduct on the part of the defendants." Id. at 60, 306 S.E.2d at 579.
Before punitive damages may be awarded to the plaintiff, the jury must find that the defendant committed an actionable legal wrong against the plaintiff or his property and it must award the plaintiff either compensatory or nominal damages. Clemons v. Life Ins. Co., 274 N.C. 416, 163 S.E.2d 761 (1968); Parris v. Fischer & Co., 221 N.C. 110, 19 S.E.2d 128 (1942). Since we have upheld the jury award of compensatory damages to the plaintiff, we are only concerned here with the sufficiency of the plaintiff's evidence to support the submission of the issue of punitive damages to the jury. G.S. 1A-1, Rule 50; Meacham v. Board of Education, 59 N.C.App. 381, 297 S.E.2d 192 (1982), cert. denied, 307 N.C. 577, 299 S.E.2d 651 (1983). In order for a plaintiff to recover punitive damages in a malicious prosecution action, he must "offer evidence tending to prove that the wrongful action of instituting the prosecution `was done for actual malice in the sense of personal ill-will, or under circumstances of insult, rudeness or oppression, or in a manner which showed the reckless and wanton disregard of the plaintiff's right.'" Brown v. Martin, 176 N.C. 31, 33, 96 S.E. 642, 643 (1918) (quoting Stanford v. Grocery Co., 143 N.C. 419, 428, 55 S.E. 815 (1906)).
We agree with the Court of Appeals' conclusion that there was insufficient evidence to justify submission of the issue of punitive damages to the jury based on the "actual malice" of Mr. Gwynne, in the sense of personal ill will. However, the following evidence, viewed in the light most favorable to the plaintiff, was sufficient to justify submission of the issue of punitive damages to the jury based on the fact that the investigation by Mr. Gwynne, which precipitated the prosecution of the plaintiff, was conducted "in a manner which showed the reckless and wanton disregard of the plaintiff's rights."
Mr. Gwynne was the Field Security Manager for McDonald's Corporation covering the Raleigh region and the Greenville, South Carolina region. He conducted the investigation concerning the plaintiff's alleged embezzlement of money from McDonald's, and he directly participated in the final decision to bring charges against the plaintiff. As Field Security Manager, Mr. Gwynne was responsible for the security of McDonald's assets and he also made security presentations to all McDonald's employees.
In 1970, prior to beginning work with McDonald's, Mr. Gwynne was a Special Agent with the North Carolina State Bureau of Investigation. He conducted criminal investigations in a three-county area. After leaving the employment of the SBI, Mr. Gwynne worked for the district attorney's office for the Ninth Judicial District as an Administrative Assistant and Investigator. In 1974, Mr. Gwynne worked for the Sheriff's Department of Nash County as the Chief Deputy in charge of the Administration and Investigative Division. In 1977 Mr. Gwynne was hired by McDonald's Corporation in his present capacity. This evidence certainly indicates that Mr. Gwynne possessed the necessary background and expertise in investigatory work to enable him to conduct a thorough and proper investigation of Mr. Jones.
*17 Ramona Galarza testified that in March she saw the plaintiff ring numerous consecutive "no sales" and put the money in the register. However, time cards showed that Ms. Galarza had worked on less than half the days she claimed to have seen Mr. Jones ring the "no sales." As a part of Mr. Gwynne's investigation, he reviewed the daily store records, the register journal tapes, the managers' schedules, the crew schedules, and the employee time cards for March, April, and May 1979. In reviewing the time cards, Mr. Gwynne made no notations of when Ms. Galarza worked; nor were these cards available at trial. Mr. Gwynne testified that he did not know where the time cards could be located. Ms. Galarza's absences, if noted by Mr. Gwynne, could have cast serious doubts on her alleged "observations" of plaintiff's activities.
Additionally, Ms. Galarza stated to Mr. Gwynne that on one occasion she saw plaintiff take money from beneath the cash register drawer, put it into his pocket, and then leave the store. However, no evidence was adduced at trial that the McDonald's restaurant showed a shortage of money for any day or that any McDonald's money was ever missing from that store. In investigating this allegation, Mr. Gwynne never performed an audit of the McDonald's managed by plaintiff nor did he order that an audit of the store's records be performed. Furthermore, plaintiff's evidence tended to show that his food-cost ratio, which is the relationship the cost of food bears to the gross income, was second best of six McDonald's restaurants in the city of Fayetteville and normally second best in the entire Raleigh market.
Shelia Stewart, second assistant to the plaintiff, also testified that she had seen Mr. Jones ring up "no sales." Ms. Stewart contacted Paul Craddock, the Fayetteville Area Supervisor for McDonald's, in mid-May 1979 to report the "no sales." Mr. Craddock then informed Mr. Gwynne on 15 May 1979 that Ray Jones was suspected of embezzling money from the McDonald's restaurant that he managed.
There was plenary evidence, however, that Shelia Stewart wanted to be store manager and intensely disliked Jones. Two fellow employees interviewed by Mr. Gwynne testified that Ms. Stewart had threatened to "get" the plaintiff "if it's the last thing I do." Mr. Gwynne, who had interviewed the morning shift employees, should have discovered and determined during his investigation what impact Ms. Stewart's animosity toward Mr. Jones could have had on her decision to initiate the investigation of Mr. Jones.
Mr. Gwynne testified that he had interviewed all the people on Mr. Jones' staff. However, Hazel Bido and Pam Lawson testified that he had never interviewed them. These two witnesses had first-hand knowledge that was favorable to Mr. Jones. No statement was taken from Bea Howell who was interviewed by Mr. Gwynne. This witness also made exculpatory statements regarding Mr. Jones.
Two other morning shift employees, Christal Newton and Stephanie Williams, had seen Mr. Jones ring a "no sales" once in three months. Ms. Williams admitted this could have been proper. Written statements were obtained by Mr. Gwynne from these two witnesses. Henrietta Purcell testified that she never saw Mr. Jones ring a "no sales." She further testified that she, Ramona Galarza, and Hazel Bido often played with the cash registers and rang up "no sales." In fact, a person standing at the register, not waiting on customers, could punch sixty consecutive "no sales" into the register in less than thirty seconds. Mr. Gwynne, being familiar with McDonald's restaurants and their operation, was aware of this fact which would tend to mitigate suspicions about Mr. Jones' "no sales."
Mr. Gwynne apparently failed to present the foregoing exculpatory evidence to the police, when he obtained assistance from the Fayetteville Police Department on 16 May 1979. On 18 May 1979, at the request of Mr. Gwynne, two detectives went to the restaurant and observed Mr. Jones for forty minutes but saw nothing unusual. *18 Nevertheless, after reporting Mr. Jones' benign activities to Mr. Gwynne and Mr. Craddock, all four men returned to the store and handcuffed Mr. Jones in front of his employees and customers. Thereafter, he was taken to the Law Enforcement Center where he was questioned for several hours.
While Ray Jones was being questioned, Mr. Gwynne talked to two of his superiors about the case, J.D. Bell, Operations Manager, and Rick DeSota, National Security Director for McDonald's. Then he talked to Detectives Post and Kraus and told them that he thought that they had enough evidence to charge Ray Jones with embezzlement. At the suggestion of Mr. Gwynne, Detective Post called Assistant District Attorney Michael Winesette and informed him of the facts of the case, in an attempt to determine its possible merits. Mr. Winesette informed Detective Post that it sounded like a good case but "if he could get more information as to the actual conversion of the money ... it certainly would be better." After Mr. Craddock had talked to Mr. Bell and the detectives, Detective Post swore out two warrants against the plaintiff charging him with the embezzlement of money from McDonald's.
In summary, the bulk of the incriminating evidence implicating Mr. Jones consisted primarily of two witnesses' observations of him ringing "no sales" while placing customers' money in the register. As the above evidence indicates, Mr. Gwynne, a man with extensive training in criminal investigation, conducted a superficial and cursory investigation to determine the truthfulness of these statements or a plausible explanation of Mr. Jones' actions. We believe that this evidence, when viewed in the light most favorable to the plaintiff, is sufficient to warrant submission of the punitive damages issue to the jury on the question of whether the manner in which the investigation was conducted by Mr. Gwynne showed a "reckless and wanton disregard of the plaintiff's rights." The jury determined that the evidence adduced at trial proved to its satisfaction that Mr. Gwynne conducted an investigation that showed a "reckless and wanton disregard of the plaintiff's rights." Consequently, this Court must reverse the Court of Appeals' decision that vacates the portion of the superior court judgment awarding plaintiff punitive damages.
We also note that at all times relevant to the facts of this case, Mr. Gwynne was an employee of the McDonald's Corporation. The investigation that was conducted by Mr. Gwynne was done in the course of his employment and it was within the scope of his authority. "The general rule is well established that a corporation is liable for the torts and wrongful acts or omissions of its agents or employees acting within the scope of their authority or the course of their employment." Raper v. McCrory-McLellan Corp., 259 N.C. 199, 205, 130 S.E.2d 281, 285 (1963). Based on the theory of respondeat superior, it has been held that punitive damages may be awarded against a corporation for a tort wilfully, wantonly and maliciously committed by an employee in the course of his employment. Clemmons v. Insurance Co., 274 N.C. 416, 163 S.E.2d 761 (1968). Therefore, based upon the theory of respondeat superior, we hold that McDonald's Corporation is also liable for the punitive damages awarded to the plaintiff. Based upon all of the foregoing, Matt Gwynne and McDonald's Corporation are jointly and severally liable to the plaintiff for the compensatory and punitive damages awarded by the jury.
Plaintiff additionally contends that there was sufficient evidence of actual malice and personal ill will that was exhibited toward the plaintiff by other McDonald's employees acting within the scope of their employment which also supports the submission to the jury of the punitive damages issue against McDonald's. Regarding this issue, the Court of Appeals stated:
While plaintiff argues that there were other employees of McDonald's who bore him ill will, we note that only Gwynne was found to have committed a tort. While a corporation may be liable for *19 torts committed by its employees, punitive damages based on actual malice may not be predicated on the non-tortious acts of its employees.
Jones v. Gwynne, 64 N.C.App. 51, 59, 306 S.E.2d 574, 579 (1983).
We agree that a corporation may be held liable for torts committed by its employees; however, we disagree with the above statement to the extent that it suggests that a corporation may not be held liable for torts committed by its employees, unless they are parties to the lawsuit or found by the jury to have committed a specific tort. However, we find it unnecessary to consider the evidence concerning the other employees' actions, since the evidence of Mr. Gwynne's "reckless and wanton" investigation was sufficient to warrant the submission of the punitive damages issue against McDonald's to the jury.
In summary, we affirm the conclusion reached in the Court of Appeals' opinion that no error occurred in the proceedings leading to the jury award of compensatory damages to the plaintiff. However, we reverse that portion of the Court of Appeals' opinion which vacated the judgment of the trial court to the extent that it awarded the plaintiff punitive damages. Therefore, the opinion of the Court of Appeals is affirmed in part and reversed in part. This case is remanded to the Court of Appeals for further remand to the Superior Court, Cumberland County, for reinstatement of the judgment entered by the trial court.
AFFIRMED IN PART; REVERSED IN PART.
NOTES
[1] The indictments charged Jones with embezzling from McDonald's:
79 CRS 36133$122.13 on March 23, 1979;
79 CRS 36132$1.51 on May 15, 1979;
79 CRS 35879$68.95 on April 13, 1979.
[2] The argument is based on the assistant district attorney's notation "Vol Diss to go to GJ," which appeared on the warrant shucks. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1573299/ | 396 S.W.2d 192 (1965)
Earl E. LUBY et al., Appellants,
v.
The CITY OF DALLAS, Appellee.
No. 16577.
Court of Civil Appeals of Texas, Dallas.
September 24, 1965.
Rehearing Denied November 19, 1965.
*194 William S. Campbell, Dallas, for appellants.
N. Alex Bickley, City Atty., and Kenneth C. Dippel, Asst. City Atty., Dallas, for appellee.
BATEMAN, Justice.
The City of Dallas, having previously purchased the fee simple title to certain real property needed in connection with the improvement of Griffin Street in downtown Dallas, took by these condemnation proceedings the lease hold interest of appellants in the property. Appellants occupied the property under a lease which would by its terms expire approximately 33 months after the date of taking, paying $700 per month rent. The special commissioners awarded appellants $40,000, which was paid into *195 court by the City and then withdrawn by appellants, pursuant to Vernon's Ann.Civ. St., Art. 3268, prior to the trial in the county court. Both sides appealed from the award by filing objections thereto. The jury found the value of the leasehold to be $23,100; whereupon the court awarded the City of Dallas the leasehold interest in the land and judgment against appellants for $16,900, the difference between the $40,000 received by them and the $23,100 verdict. We affirm. The appellants' 36 points of error are so interwoven that we shall discuss the contentions raised by them rather than each of the points of error separately.
A great many of the points challenge the regularity of the condemnation proceedings occurring prior to the withdrawal of the $40,000 by the appellants. Several of them attack the Statement in Condemnation filed by the City because of the insufficiency of the description of the land being condemned, the failure of the City to state properly the names of the known owners of interests therein or the purpose for which the land will be used, concerning which there was a discrepancy between the Statement and the resolutions of the City Council; the failure to include in the proceedings certain necessary parties; and the failure of the Statement to contain all the information required by Art. 3264, § 1, V.A. C.S.
The appellants, by their withdrawal of the $40,000 paid into the registry of the court by the City, must be held as a matter of law to have impliedly consented to the taking of their property. Only the question of adequate compensation remained to be determined. This has been the rule uniformly announced by our courts since City of San Antonio v. Grandjean (1897), 91 Tex. 430, 41 S.W. 477, 44 S.W. 476; the latest expression of our Supreme Court on the subject being in State of Texas v. Jackson, Tex.1965, 388 S.W.2d 924. In a footnote to that opinion is cited the opinion of this court in Crockett v. Housing Authority of City of Dallas, Tex.Civ.App., 274 S.W.2d 187, no wr. hist.
The foregoing rule is binding on appellants notwithstanding the fact that they sought to condition their withdrawal of the $40,000 by a recitation that the withdrawal was without prejudice to certain objections and exceptions. Having withdrawn the money deposited, appellants are precluded from contesting the legality of the proceedings establishing the City's right to take the property.
Appellants attack in various ways the legality of the condemnation proceedings and seek a reversal of the judgment because the City purchased from the fee owner, and took from appellants, more land than was necessary for the declared purpose of extending Griffin Street and sold the unneeded surplus to a private corporation. We see no merit in these points. In the first place, the appellants must be held to have waived any irregularity in this respect by their withdrawal of the $40,000. City of San Antonio v. Grandjean, supra, and State of Texas v. Jackson, supra. Morover, in the second place, an examination of the facts and the applicable authorities will demonstrate that there was nothing illegal or wrongful in the transactions in question.
Appellants say that the court erred in even trying the case and submitting it to the jury because of this variance between the resolutions of the City Council, which authorized the appropriation of appellants' leasehold estate for the purpose of "extending" Griffin Street, and the Statement in Condemnation, which states that such estate is to be condemned for the purposes of "the widening and improvement of public streets and more particularly the extension of Griffin Street." Appellants concede that the statutes and appellee's charter authorize the appropriation of privately owned property "in order to open, widen, narrow, straighten or extend any public street, avenue or alley within the City limits," but argue that when the City Council (the governing body of the City) declared a public necessity for the mere "extension" of Griffin *196 Street that meant continuing the existing street in a straight line and with the same width, and that there existed no authority, and no declaration by the Council of a public necessity, for the taking of appellants' property for the purpose of widening or changing the course of that street. We see no merit in this contention. The appellants were adequately informed by the Statement in Condemnation that the City was seeking to take all of their leasehold interest in the entire tract for the purpose of extending, improving and widening Griffin Street. Appellants appeared at the commissioners' hearing, objected to the award made by them, not on the grounds here under discussion, but on other matters touching only upon the value of the leasehold; withdrew the deposit of the award and sought to obtain a larger award by the jury. They amended their objections and exceptions to the award twice, and in the last amendment, which was filed March 16, 1964, and which must be held to have supplanted the previous objections and exceptions under Rule 65, Vernon's Texas R.C.P., the only objection made was that the award of the commissioners was inadequate. We therefore hold that appellants waived their right, if any they had, to complain of this matter of variance by not pleading it.
It is true that when the City filed its motion for a partial summary judgment under Rule 166-A, T.R.C.P., wherein it sought adjudication of its power, right and authority to condemn appellants' property and to limit the controversy to the proper amount to be paid to appellants, the latter, in a "Controverting Affidavit" hinted broadly at the matter by suggesting that there were material fact issues on the question of whether the City had properly exercised its power to condemn. The transcript also contains a motion by appellants to dismiss the City's appeal from the commissioners' award, in which the question was squarely raised, but there is nothing in the transcript to show that this motion was called to the attention of the court. Therefore, it is our holding, based upon our examination of the record as a whole, that (1) the point was never actually presented to the trial court for a ruling and cannot now be raised for the first time on appeal, and (2) the point is, under all the circumstances of this case, without substance.
We think the trial court was correct in granting the partial summary judgment. The "Controverting Affidavit" of appellants' attorney, mentioned above, raises no actual fact issues. Its eight pages are devoted primarily to complaint that the City, in purchasing the fee without notice to appellants, probably adversely affected the market value of appellants' leasehold, and that the City, when it offered appellants $100 for their leasehold, did not negotiate with them in good faith. These were not controverted issues of fact; the facts were undisputed, and the legal consequences thereof were not raised by the pleadings.
The tract was owned by one Kain and had a frontage of about 50 feet on Main Street. It was about 100 feet deep and contained about 5,000 square feet. The brick building on it, which was leased to appellants, and in which they operated a cafeteria, contained about 3,550 square feet on the ground floor. The west wall of this building was a common wall with the adjoining building. After using the part actually needed for the extension, widening and improvement of Griffin Street, only a small triangle containing about 1,560 square feet remained, which would be wholly unsuitable for the operation of a cafeteria. Moreover, the destruction of the building occupied by appellants would remove some of the support of the common wall and would necessitate certain repairs thereto. After razing the building and setting aside sufficient land for the extension and widening of the street, it used the surplus long enough to repair and strengthen the common wall, and then sold such surplus.
It is well settled that a city may under these circumstances condemn the quantity of land which its governing body in good faith decides should be condemned *197 for a certain purpose, and that in the absence of some constitutional or statutory limitation "the discretion of the condemnor is absolute as to what land it may condemn for its purposes, and the courts will not review its discretion in this respect, except where it is made to appear the condemnor has acted in bad faith, or has acted arbitrarily, capriciously, or fraudulently, in selecting the particular land for its purpose." Texas Electric Service v. Lineberry, Tex. Civ.App., 327 S.W.2d 657, 664, wr. dism. See also Housing Authority of City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 130 A.L.R. 1053, holding that "a determination by the condemner of the necessity for acquiring certain property is conclusive in the absence of fraud." The right of eminent domain exercised here is one delegated to the city by the legislature, and its exercise is a legislative, not a judicial, function. "Those questions rest wholly within the legislative discretion." West v. Whitehead, Tex.Civ.App., 238 S.W. 976, 978, wr. ref. This record contains nothing to indicate fraud or caprice in the decision to condemn the entire property, and we therefore feel that we have no right to review the decision.
Moreover, the right of the City to sell the unneeded surplus of land acquired is expressly granted by Art. 1203, V.A.C.S.
By their Point No. 13 appellants complain of error in overruling certain special exceptions contained in their "First Supplemental Pleading and Exceptions to the Pleadings of the Petitioner, City of Dallas," found on pages 78-81 of the transcript. However, we find no order of the court overruling these exceptions, and for that reason the point cannot be considered.
Appellants contend that the Dallas, Texas Corporation, to which the City sold the small triangular strip of land not actually included in the widened and extended Griffin Street, was a necessary party to this suit. We are not favored with any authority or argument in support of this contention, and we have been unable to find any such authority. We know of no purpose that would have been served by making this company a party, and fail to see any harm resulting to appellants by the failure to do so. Hence, this contention is overruled.
It is also contended by appellants that, the City having acquired by purchase the fee simple title to the realty, the City was a necessary party. We do not agree. The fee simple title and the leasehold were two separate estates, each constituting real property. It was necessary for the City to to acquire both estates to accomplish its purpose of improving the street. Having acquired Kain's fee simple title by private negotiation and deed, and even though it became the lessor by assignment of the lease, no purpose would have been served by making the City a party defendant. As appellants were not injured by the failure to do so, they will not be heard to complain thereof. Halbert v. Upper Neches River Municipal Water Authority, Tex.Civ.App., 367 S.W.2d 879, wr. ref. n. r. e.; Sinclair Pipe Line Co. v. Peters, Tex.Civ.App., 323 S.W.2d 651, 655, no wr. hist.; National Association of Audubon Societies v. Arroyo Colorado Nav. Dist., Tex.Civ.App., 110 S.W.2d 150, no wr. hist. This contention is overruled.
Appellants' Point of Error No. 15 complains of the exclusion of the testimony of their witness, Robert Beer, "as to the market value of the cafeteria business leasehold property of Luby's Cafeteria No. 2, under the sole and exclusive use and occupancy as a cafeteria by lessee-defendants." Point 24 complains of the exclusion of a map used by Beer to show the location, nature, etc. of the property in question, and Point 29 says the court erred in instructing the jury not to consider Beer's testimony of a market value of $84,400. Points Nos. 25 and 28 assert error in excluding certain schedules showing operational records of appellants' cafeteria and in instructing appellants, their witnesses and *198 attorney, not to mention, allude to or proffer evidence of sales, income or revenue of said business. Point 32 asserts error in the overruling of appellants' objections and exceptions to instructions given the jury in the charge. These points are not supported by authorities or argument, and may be considered as abandoned. Rule 418, T.R.C.P.; Young v. Texas & Pacific Ry. Co., Tex.Civ.App., 347 S.W.2d 345, 349, no wr. hist.; Fulton v. Abramson, Tex. Civ.App., 369 S.W.2d 815, 817, no wr. hist. Even if we were to consider these points, however, we would have to overrule them.
We see no merit in appellants' Points 15, 24, 25, 28 and 29. The witness Beer stated that his estimate of the value of the leasehold was not based on an "empty bare walled building," but on a "cafeteria successfully operating up until the day it was closed," and that he took into consideration all that was shown by certain photographs of the interior of the cafeteria while in operation, including the people standing in line, the tables, chairs, pots, pans, stoves and all other restaurant facilities shown. It is obvious that the witness based his opinion on an incorrect measure of damages. It is well settled in Texas that when the entire leasehold is taken the measure of damages is the value of the use and occupancy of the leasehold for the remainder of the tenant's term, plus the value of the right to renew if such right exists, less the agreed rent which the tenant would pay for the use and occupancy, such values to be determined by the usual "willing seller-buyer rule." State v. Parkey, Tex.Civ.App., 295 S.W.2d 457, 460, wr. ref. n. r. e.; Art. 3265, V.A.C.S.
It is also well settled that in determining such value no consideration should be given to the value of the business of the tenant, or the trade-name thereof, or the profits or losses thereof, or the tenant's personal property on the premises, or the expense of moving such personal property. These things are held to be immaterial and inadmissible as shedding no light on the value of the real property being condemned. As we said in Herndon v. Housing Authority of City of Dallas, Tex.Civ.App., 261 S.W.2d 221, 223, wr. ref.: "* * * it is only the real estate which is being taken, not the business. The owner may keep his business and continue to operate it at a different location." See also Reeves v. City of Dallas, Tex.Civ.App., 195 S.W.2d 575, 581, wr. ref. n. r. e.; State v. Vaughan, Tex.Civ.App., 319 S.W.2d 349, 355, no wr. hist.
The objections and exceptions to the court's charge merely reiterate many of the contentions raised in the other points of error on appeal. We find no fault with the form or substance of the special issue submitted or the explanatory instructions accompanying same.
By their Points Nos. 16 through 23 the appellants complain of the exclusion of photographs of the property after completion of the widening and extension of Griffin Street, the deed conveying the fee title to appellee, the deed by which appellee sold the unneeded surplus of the land in question, the resolutions of the City Council authorizing the condemnation proceedings, the assignment of the lease by Kain to appellee, the cancelled checks by which appellants paid rent to appellee thereafter, a letter from appellee to appellants concerning the payment of rents, and the Statement in Condemnation. Points 26 and 27 assert error of the trial court in sustaining motions in limine to suppress evidence of the facts in connection with the acquisition by appellee of the fee simple title to the property in question as well as evidence of payment by appellants of rentals to appellee. We have carefully examined all of these points and the authorities and arguments made thereunder and find no merit in any of them. The excluded evidence would have been of no value or assistance to the jury in determining the only issue left remaining in the case, viz., the value of the leasehold taken; hence, there was no error in refusing to admit it. Accordingly, these ten points are overruled.
*199 By their Points 30 and 31 the appellants charge jury misconduct in that the jury arrived at the verdict of $23,100 by multiplying the monthly rental of $700 by 33, the number of months remaining of the lease, producing a total of $23,100, then multiplying that figure by 2, then dividing the product of $46,200 by 2, leaving $23,100 as the value of the leasehold. It appears clearly from the testimony of the jurors, taken at the hearing of appellants' amended motion for new trial, that they discussed and considered the testimony of the value-witnesses produced by both sides, which ranged from a low of $9,700 to a high of $26,400; also that the jurors did not agree in advance to follow any particular method or formula or to be bound by the result thereof. Two of the jurors suggested returning the figure of $9,700 as the verdict, but the foreman stated that he would not agree to any figure lower than $23,100, which he, not the jury, arrived at by the computation which appellants say constituted misconduct.
This method of reaching a verdict does not constitute such misconduct as would require a reversal unless all the jurors agreed in advance to be bound by the figure thus reached. This is the rule which governs in the case of so-called quotient verdicts, Morgan v. State, Tex.Civ.App., 343 S.W.2d 738, wr. ref. n. r. e., and it is also applicable here.
It is also well settled that jurors are not allowed to preserve or destroy their verdicts by testifying to the mental processes by which they reached the same. This rule was in effect both before and after promulgation of Rule 327, T.R.C.P., which relates to jury misconduct as a ground for new trial. Sproles Motor Freight Lines v. Long, 140 Tex., 494, 168 S.W.2d 642; Barrington v. Duncan, 140 Tex. 510, 169 S.W. 2d 462.
We have considered this matter of misconduct "from the evidence both on the hearing of the motion [for new trial] and the trial of the case and from the record as a whole" and cannot say that it appears therefrom that "injury probably resulted to the complaining party." Rule 327, T.R. C.P. Nor can we say that the error, if any, "amounted to such a denial of the rights of the appellant(s) as was reasonably calculated to cause and probably did cause the rendition of an improper judgment * * *." Rule 434, T.R.C.P.
Nor are we persuaded that error actually occurred. While the formula evolved by the jury foreman may at first appear to be awkward and unnecessarily complicated, it was not illogical because the simple effect of it was to say that appellants were deprived for 33 months of a location worth $1,400 per month, or a total of $46,200, for which they were obligated to pay only $700 per month, or a total of $23,100; and that their damages or loss was equivalent to the difference of $23,100. This amount was within the range of values testified to by the expert witnesses, and therefore cannot be said to be without support in the evidence. Accordingly, we overrule Points 30 and 31.
By their Points of Error Nos. 33 through 36 appellants assert in various ways that they should have a new trial because of newly discovered evidence in the form of a contract between the City of Dallas and the owner of property adjacent on both sides to the projected Griffin Street. This contract was offered in evidence at the hearing of appellants' amended motion for new trial, but was excluded. We cannot overturn the trial court's exclusion of this evidence unless we can say that that court has exceeded its discretionary powers. Strata Drilling Co. v. St. John, Tex. Civ.App., 272 S.W.2d 753, no wr. hist. We see no evidence in the record to indicate such abuse of discretion.
Moreover, it was essential that the portion of the motion for new trial dealing with the newly discovered evidence be supported by affidavit, Moores v. Wills, 69 Tex. 109, 5 S.W. 675; Marrast v. Smith, *200 Tex.Civ.App., 53 S.W. 707, no wr. hist., and such affidavit must show, not only the attorney's want of information concerning the evidence in question, but also that the litigant himself was without the information. Russell v. Oliver, 78 Tex. 11, 14 S.W. 264. It is also necessary for a party seeking a new trial on this ground to allege and prove that knowledge of the evidence was acquired after the trial and that the failure to discover and obtain the evidence in time for it to be used at the trial was not due to want of diligence, that the evidence is material and not merely cumulative and that it would probably change the result upon another trial. Krider v. Hempftling, Tex.Civ.App., 137 S.W.2d 83, no wr. hist.; Adams v. Halff, Tex.Civ. App., 24 S.W. 334, no wr. hist.; Parlin & Orendorff Implement Co. v. Chadwick, Tex.Civ.App., 4 S.W.2d 133; Essex v. La Boue, Tex.Civ.App., 223 S.W.2d 35, wr. dism.; Kerrville Bus Co. v. Williams, Tex. Civ.App., 206 S.W.2d 262, wr. ref. n. r. e.; Carnes v. Kay, Tex.Civ.App., 210 S.W.2d 882, no wr. hist.
In the light of these rules, no reversible error is shown. The amended motion for new trial was not supported by affidavit. The testimony offered at the hearing of the motion showed at most some difficulty in locating the City's file in which the contract was contained; it fell far short of demonstrating concealment thereof by the City.
Appellants had the burden of showing that they did not know of the existence of this evidence prior to the trial, and that their failure to know about it and to produce it at the trial was not due to a lack of diligence on their part. The trial court did not abuse its discretion in holding that the evidence was insufficient to discharge that burden.
Moreover, we have read and carefully studied the contract in question and considered the arguments made to show the materiality thereof, and without unduly lengthening this opinion by reciting the details thereof we affirm the trial court's implied finding that if a new trial were granted and the contract admitted in evidence the result would probably not be different from the one reached at the trial.
As no reversible error appears in the record, the judgment appealed from is
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1807470/ | 813 F.Supp. 1054 (1993)
Donna V. LICHTLER, as Administratrix of the Estate of Joanna Teresa Lichtler, Deceased; et al., Plaintiffs,
v.
The COUNTY OF ORANGE, et al., Defendants.
Amber LITCHHULT, an infant By her Parent and Natural Guardian Gilbert LITCHHULT and Gilbert Litchhult, Individually, et al., Plaintiffs,
v.
The COUNTY OF ORANGE, et al., Defendants.
Nos. 91 Civ. 7645 (VLB), 91 Civ. 7646 (VLB).
United States District Court, S.D. New York.
February 25, 1993.
*1055 Mark A. Allen, Coale, Allen, Van Susteren, Washington, DC, Michael C. Zwal, Levien & Zwal, New York City, for plaintiffs.
Lisa L. Gollihue, MacCartney, MacCartney, Kerrigan & MacCartney, Nyack, NY, for defendant County of Orange.
MEMORANDUM ORDER
VINCENT L. BRODERICK, District Judge.
I
These cases involve a disaster at the East Coldenham Elementary School arising out of a tornado and wind storm which struck the area on November 16, 1989. Plaintiffs assert that because of New York's compulsory education laws, the Fourteenth Amendment requires reasonable care of children in public schools and that this duty was violated, thus triggering liability under 42 USC § 1983. Plaintiffs also argue that the County of Orange undertook to help avoid such disasters through its disaster planning but failed to do so adequately, thus violating life, liberty and property rights of plaintiffs without due process.
Thirty-nine (39) state court suits for money damages ensued, against numerous parties alleged to have had some responsibility in varying ways for failure to prevent the disaster. These cases, filed in Supreme Court, Orange County, involve the parties to the present federal lawsuits. With the exception of claims against the County of *1056 Orange which were dismissed,[1] these state suits are still pending.
The County of Orange has moved for summary judgment with respect to the complaints before me. For the reasons which follow, I grant partial summary judgment to the County pursuant to Fed. R.Civ.P. 56(d) as to one issue, conclude that adjudication of the remaining issues is premature until further developments in the state court actions, deny the motions without prejudice in all other respects, and place these cases on the suspense calendar.
II
Since power implies responsibility, where governmental agencies or entities utilize sovereign compulsion to exercise coercive powers, a correlative duty exists of due care toward those subjected to such compulsion. This principle has been applied where persons are in various types of official custody. See Revere v. Massachusetts General Hospital, 463 U.S. 239, 103 S.Ct. 2979, 77 L.Ed.2d 605 (1983); Youngsberg v. Romeo, 457 U.S. 307, 102 S.Ct. 2452, 73 L.Ed.2d 28 (1982); Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976).[2] Because of compulsory education laws, substantially expanded to cover post-elementary education after the Second World War,[3] the duty has also been recognized in some decisions as owed to children in public schools. Pagano by Pagano v. Massapequa Public Schools, 714 F.Supp. 641 (E.D.N.Y.1989); Robert G. v. Newburgh City School District, 1990 WL 3210, 1990 U.S.Dist.LEXIS 91 (S.D.N.Y. Jan. 5, 1990); see also Doe v. New York City, 649 F.2d 134 (2d Cir.1981) (foster care). A state imposing compulsory attendance upon school children must take reasonable steps to protect those required to attend from foreseeable risks of personal injury or death.
III
I thus agree with plaintiffs that the County of Orange must take care to protect public school students from foreseeable risks of injury or loss of life. Questions remain, however, as to whether or not the duty to exercise reasonable care was violated, and as to what tribunal should determine that issue. See Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986). The County seeks summary judgment that no duty was violated.
I conclude that before I can determine whether or not genuine issues of material fact exist, further factual development is required concerning (a) what precautions might have been reasonable against the risk of a disaster such as that which occurred, and (b) whether or not deliberate or reckless disregard of the need for such precautions can be established. See Mahoney v. Hankin, 844 F.2d 64, 68 (2d Cir. 1988); Goddard v. Urrea, 847 F.2d 765, 769 (8th Cir.1988).
I deny this branch of the County's motion without prejudice for this reason and because, on the grounds discussed below, I conclude that further proceedings in state court should precede resolution in this court of the issue of whether the duty was violated.
IV
In Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981),[4] involving a claim under 42 USC § 1983 that the Fourteenth Amendment was violated by negligent loss of a prisoner's property, the Supreme Court held that (a) where no authorized *1057 but unconstitutional state procedure was involved and (b) where pre-deprivation proceedings were impracticable, due process could be satisfied by state post-deprivation remedies.[5]
In Zinermon v. Burch, 494 U.S. 113, 110 S.Ct. 975, 108 L.Ed.2d 100 (1990), Parratt was held to be applicable to deprivations of liberty as well as property. But the Court held involuntary placement in a mental hospital vulnerable to suit under 42 USC § 1983 where predeprivation safeguards were practicable but not provided. See Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969) (substantial financial deprivation without prior notice impermissible).
Zinermon underscored a major predicate of Parratt's holding: that post-deprivation state remedies are adequate where "the very nature of a negligent loss" of the rights involved (property in Parratt) "made it impossible for the State to predict such deprivations and provide predeprivation process." Where that was the situation, "the State, by making available a tort remedy that could adequately redress the loss, had given ... the process ... due." 494 U.S. at 129, 110 S.Ct. at 985. The Zinermon opinion rejected applicability of Parratt to the involuntary hospitalization involved in that case, not because only state-created rights were involved in Parratt, or because liberty rather than property was at stake in Zinermon, but rather because pre-deprivation safeguards could have been furnished in Zinermon but were not.
Because the Court rejected any liberty/property distinction, 494 U.S. at 132, 110 S.Ct. at 986-87, Zinermon supports the applicability of Parratt to the case before me if state remedies are adequate.
V
The fact that state remedies appear unavailable against the County of Orange does not mean that state remedies are inadequate, if recovery can be obtained in state court from the numerous remaining defendants in the state court litigation. The Court in Parratt indicated that even where "state remedies may not provide ... all the relief which may have been available ... under § 1983, that does not mean that state remedies are not adequate to satisfy the requirements of due process." 451 U.S. at 543, 101 S.Ct. at 1917.
There is no right to duplicate recovery under federal procedure; avoidance of overlapping monetary redress has been, in fact, a primary objective in the framing of remedies for violations of federal law. See Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977) (barring indirect purchaser suits for monetary damages caused by horizontal price fixing in violation of the Sherman Act, 15 USC § 1). Similarly, the fact that plaintiffs in state court are not entitled to take advantage of the Federal provisions under 42 USC § 1988 for payment of attorney's fees to prevailing parties does not make state remedies inadequate.
Section 1983 does not "make of the Fourteenth Amendment a font of tort law to be superimposed upon whatever systems may already be administered by the States." Paul v. Davis, 424 U.S. 693, 701, 96 S.Ct. 1155, 1160, 47 L.Ed.2d 405 (1976), quoted in Parratt v. Taylor, 451 U.S. 527, 544, 101 S.Ct. 1908, 1917, 68 L.Ed.2d 420 (1981).
Thus in addition to finding Parratt applicable to the present case and that recovery cannot be had in this court if state remedies are in fact adequate, I conclude that inadequacy with respect to such remedies may not be grounded in the mere fact, standing alone, that the County of Orange has been dropped from the state court litigation, nor may it be grounded in the fact *1058 that legal fees under 42 USC § 1988 are unavailable.
VI
It would be premature to make a determination of adequacy or inadequacy of state procedures until there has been determined, in the state court litigation, the fate of the claims against defendants other than the County. While adequate state procedures necessarily embrace within them procedural rules which may derail a litigation if proper procedures are not taken, an absolute barrier such as state sovereign immunity would contravene the notion of adequacy of state remedies unless such a barrier turned out to be moot and hence irrelevant. If it were established that the dismissal of the County from the state court litigation based on procedural grounds having the effect of denying a remedy, and that this denial was not made moot by the availability of recovery from other defendants, adequate state procedures might be found not to exist.[6]
Similarly, any procedurally-based denial of state remedies as to the County would become significant rather than moot if substantial procedural barriers having no counterpart in the federal law that would apply under 42 USC § 1983, were to prevent plaintiffs from obtaining a decision on the merits of claims against one or more solvent defendants.[7]
VII
There is a further reason for awaiting developments in the state court litigation before determining whether or not this 42 USC § 1983 suit may proceed. Exploration is required into the scope of defendants' federal constitutional duties to the school pupils, and into the adequacy or inadequacy of state remedies. Each of these areas presents important questions of federal constitutional law with potentially far-reaching repercussions. Foreclosure of access to the federal courts could deny Fourteenth Amendment rights if on the state level the duty of care was ignored and no adequate recourse was made available. At the same time, to permit suits in federal court where not required to vindicate such rights could not only "trivialize, but grossly ... distort the meaning and intent of the Constitution." Parratt v. Taylor, 451 U.S. 527, 545, 101 S.Ct. 1908, 1917-18, 68 L.Ed.2d 420 (1981) (Stewart, J. concurring).
Close or difficult constitutional questions with wide possible ramifications should be avoided whenever other reasonable avenues are available for dealing with the issues in ways consistent with fairness and the rights of the parties. See Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974); King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968); International Ass'n of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961); Ashwander v. TVA, 297 U.S. 288, 345-48, 56 S.Ct. 466, 482-84, 80 L.Ed. 688 (1936) (Brandeis, J. concurring); see also New York Civil Service Comm'n v. Snead, 425 U.S. 457, 96 S.Ct. 1630, 48 L.Ed.2d 88 (1976).
VIII
Plaintiffs argue that in addition to violation of a federal constitutional duty of due care to protect public school children, state-created rights were violated which are enforceable under the Fourteenth Amendment and 42 USC § 1983.
*1059 Under some circumstances, a governmental policywhether or not constitutionally requiredmay create such expectations that failure to fulfill those expectations constitutes denial of life, liberty or property without due process. In such instances, the rights are state created, but under the Fourteenth Amendment cannot be disregarded by the state without due process. But no evidence has been adduced indicating that any County of Orange policy was publicly communicated to an extent which did, or was likely to, lead to creation of such expectations or to reliance upon such policy. See Carnes v. Parker, 922 F.2d 1506 (10th Cir.1991); Kelly Kare v. O'Rourke, 930 F.2d 170 (2d Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 300, 116 L.Ed.2d 244 (1991); BAM Historic District Ass'n v. Koch, 723 F.2d 233 (2d Cir.1983).[8]
In DeShaney v. Winnebago County Social Services Dept., 489 U.S. 189, 201-02, 109 S.Ct. 998, 1006-07, 103 L.Ed.2d 249 (1989), the Supreme Court made it clear that a state agency which voluntarily undertakes to provide protection against a danger, thereby acquiring duties under state tort law, does not automatically violate the Fourteenth Amendment if the agency fails in its undertaking. The due process clause does not transform every tort committed by a state actor into a constitutional violation. Were the rule otherwise, states and localities would be discouraged from taking steps to avoid accidents, because doing so would expose them to additional liabilities, contrary to the objectives of Fed.R.Evid. 407 as well as to the interests of the public. Written policies, even in the public interest, would be discouraged because they could be used against the entities involved. This would be an untoward application of the Fourteenth Amendment unsupported by its text or history and inconsistent with its underlying objectives.[9]
Consequently, partial summary judgment is granted to defendants pursuant to Fed. R.Civ.P. 56(d) with regard to plaintiffs' claims that the County of Orange improperly failed to follow its own disaster plans.[10]
IX
The placement of these cases on my suspense calendar is intended to be temporary, pending further elucidation of the relief available to plaintiffs in state court. Rather than attempting to define in advance what developments in the state court cases would permit effective evaluation of whether the cases before me should be permitted to proceed, I leave it to the parties, at the appropriate time, to move to reactivate or to dismiss these cases as appropriate. In the interim, prior to my action on any application for removal of the cases from suspense, any discovery or other litigation steps should proceed by consent only.
SO ORDERED.
NOTES
[1] The final order of dismissal by Hon. Howard Miller, J.S.C. was dated January 6, 1993, based on denial by the New York State Court of Appeals on December 16, 1992 of a motion for leave to appeal earlier rulings.
[2] See also Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173 (1944) (foundation case recognizing duty fairly to represent all employees, where representative is given exclusive bargaining authority by federal law).
[3] See D. Ravitch, The Troubled Crusade: American Education 1945-1980 ch. 1 (1983).
[4] Parratt was overruled on an aspect not pertinent here, and without disturbing the rulings discussed here, in Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986).
[5] The Court in Parratt recognized that post-deprivation state remedies are inadequate if the governmental conduct authorized by an established state procedure has the predictable effect of causing a deprivation, and pre-deprivation safeguards such as notice and hearing are practicable. 451 U.S. at 538, 101 S.Ct. at 1914. This recognition was in accord with long-recognized standing under 42 USC § 1983 to challenge articulated state laws, customs or policies offensive to the Constitution. See New York Civil Service Comm'n v. Snead, 425 U.S. 457, 96 S.Ct. 1630, 48 L.Ed.2d 88 (1976).
[6] State sovereign immunity has been recognized under the Eleventh Amendment with various qualifications not relevant here. See Hilton v. South Carolina Public Railways Comm'n, ___ U.S. ___, 112 S.Ct. 560, 116 L.Ed.2d 560 (1991); Pennsylvania v. Union Gas Co., 491 U.S. 1, 109 S.Ct. 2273, 105 L.Ed.2d 1 (1989). But absence of direct state liability does not preclude federal suits against state officials, state agency officials, or political subdivisions. See Halter v. Melo, ___ U.S. ___, 112 S.Ct. 358, 116 L.Ed.2d 301 (1991). Thus if state court sovereign immunity were extended to persons or entities presently subject to suit in federal court, obviously to that extent an adequate state remedy making federal relief unnecessary would be absent for purposes of the Parratt concept, unless other avenues made such absence irrelevant.
[7] See generally Rosewell v. LaSalle National Bank, 450 U.S. 503, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981) (decided under the Tax Injunction Act, 28 USC § 1341); Hill, The Inadequate State Ground, 65 Colum.L.Rev. 943 (1965); Note, 56 Fordham L.Rev. 1041 (1988).
[8] See also Executive Order 12778, § 6, 56 Fed. Reg. 55195, 55200 (Oct. 25, 1991) (taking the position that procedures for federal litigation imposed on federal government attorneys by that Order create no private rights).
[9] See United States v. Classic, 313 U.S. 299, 317-18, 61 S.Ct. 1031, 1038-39, 85 L.Ed. 1368 (1941).
[10] Copies of planning documents previously claimed not to have been furnished to plaintiffs have now been filed with the court and supplied to plaintiffs' counsel. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1815202/ | 220 F.Supp. 448 (1963)
C. TENNANT SONS & COMPANY
v.
NORDDEUTSCHER LLOYD and the S/S KASSEL, her engines, tackle, apparel, furniture, etc., and John I. Hay Company, and the BARGE JIHCO-308.
No. 5687.
United States District Court E. D. Louisiana.
August 9, 1963.
Thomas W. Thorne, Jr., New Orleans, La., for libelant.
James G. Burke, Jr., New Orleans, La., for respondent.
FRANK B. ELLIS, District Judge.
Libelant contracted with respondents Norddeutscher Lloyd and the S/S KASSEL for the carriage of goods from London to, as indicated on the bill of lading, "direct overside discharge and stowage into barge in New Orleans." The vessel departed London on January 17, 1962 and arrived in the port of New Orleans on February 2, 1962. The cargo was discharged onto the Barge JIHCO # 308 for transportation upriver. The JIHCO # 308 arrived in Chicago on March 6, 1962, and delivered the goods (steel pipe) in a damaged condition.
Libelant initiated this proceeding on February 20, 1963, for the recovery of $1,005.12, the estimated value of the damage sustained. Respondent Norddeutscher Lloyd moves this court to dismiss the libel as to itself and the S/S *449 KASSEL, in that the action is timebarred by the limitation provision in § 3(6) of the Carriage of Goods by Sea Act, 46 U.S.C. § 1303(6), the pertinent language of which reads as follows:
"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. * * *."
Respondent Norddeutscher Lloyd further asserts that "The term `carriage of goods' covers the period from the time when the goods are loaded on to the time when they are discharged from the ship," citing C.O.G.S.A., § 1(e), 46 U.S.C. § 1301 (e), and further fortifies its argument by quoting from Clause 4 of the bill of lading:
"* * * When the goods are discharged from the vessel, they shall be at their own risk and expense; such discharge shall constitute complete delivery and performance under this contract and the carrier shall be free from any further responsibility. * * *"
In conclusion respondent Norddeutscher Lloyd states that inasmuch as the S/S KASSEL arrived in New Orleans on February 2, 1962, and discharged the cargo of steel pipe either on February 2nd or 3rd, then the libel filed on February 20, 1963, is time-barred.
Libelant opposes the motion on grounds that § 3(6) of C.O.G.S.A., 46 U.S.C. § 1303(6), contemplates that the limitation period shall commence upon "delivery of the goods," and that discharge of the cargo in New Orleans into the JIHCO # 308 was not "delivery." "Delivery", libelant further contends, occurred on March 6, 1962, in Chicago, Illinois. Libelant concludes that the libel is not time-barred and that the motion to dismiss should be denied.
The issue then presents a problem of interpretation of what appears to be a conflict in C.O.G.S.A. and compels a query into when the limitation period in § 3(6) begins to run. Thus stated the Court is presented with a question of law, not of fact, and therefore the matter is properly a subject of summary adjudication under Admiralty Rule 58, 28 U.S.C.
The Court is of the opinion that the intent of § 3(6) of C.O.G.S.A. contemplates the beginning of the limitation period to commence when the cargo leaves the ship's slings, whether it be by complete transfer of the possession and control of the goods to the consignee, or, as in the instant case, by constructive delivery to the consignee's duly authorized agent.
Section 2 of the Act, 46 U.S.C. § 1302, sets forth the duties, rights, responsibilities and liabilities of the carrier and lists the chronological coverage of the Act, i. e. the "* * * loading, handling, stowage, carriage, custody, care, and discharge of such goods * * *." Inasmuch as the duties, rights, responsibilities and liabilities of the carrier terminate upon the discharge of such goods it stands to reason that the limitation period set forth in § 3(6) commences at that period of time.
A fortiori when considered in the light of § 1(e), 46 U.S.C. § 1301 (e) supra, which grants coverage until "the goods * * * are discharged from the ship." Since "[t]he carriage of Goods by Sea Act does not apply of its own force to cargo after it has left the ship's tackle," Federal Insurance Company v. American Export Lines, S.D.N.Y.1953, 113 F.Supp. 540, 542, it seems reasonable to hold that delivery into the compartments of the JIHCO # 308, while not an actual delivery to libelant, was a constructive delivery sufficient to initiate the running of the limitation period.
Therefore, on motion of Proctors for respondents it will be ordered that the libel as against Norddeutscher Lloyd and the S/S KASSEL be dismissed, each party to bear its own costs.
It will be further ordered that this opinion be adopted as this Court's Findings of Fact and Conclusions of Law pursuant to Admiralty Rule 46½, 28 U.S.C.
Decree accordingly. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1774209/ | 572 S.W.2d 702 (1978)
Charles G. HANNER, Appellant,
v.
The STATE of Texas, Appellee.
No. 53786.
Court of Criminal Appeals of Texas, En Banc.
November 1, 1978.
*703 Luke W. Able, Jr., Houston, for appellant.
Ogden Bass, Dist. Atty. and Jerome L. Farrer, Asst. Crim. Dist. Atty., Angleton, for the State.
Before the Court en banc.
OPINION
ODOM, Judge.
This is an appeal from a conviction for rape by force.[1] The jury assessed the appellant's punishment at fifteen years' confinement in the Texas Department of Corrections.
The appellant contends that the trial judge erred by: (1) failing to delete portions from the appellant's written confession before it was admitted into evidence; *704 (2) allowing the appellant's amended motion for new trial to be overruled by operation of law without holding a hearing on it; (3) allowing, in four instances, the introduction of hearsay evidence; (4) overruling the appellant's motion for mistrial; (5) failing to instruct the jury that they must find, beyond a reasonable doubt, that the appellant's penis penetrated the prosecutrix's vagina; (6) failing to instruct the jury on the lesser included offense of attempted rape; (7) failing to rule on the appellant's objection to the prosecutor's final argument; (8) failing to allow the appellant to develop and introduce evidence of jury misconduct and other errors during the appellant's hearing on his amended motion for new trial. We affirm.
The trial testimony reveals that in the early hours of May 20, 1975, the prosecutrix drove from Shreveport, Louisiana, to Surfside Beach in Freeport. The prosecutrix spent the day on the beach. At approximately 6:00 p. m., the appellant, the appellant's cousin, Charles Gilbreath, and another person identified only as James were driving along Surfside Beach when they saw the prosecutrix. At that time, the prosecutrix was putting together a charcoal grill. As Gilbreath drove the Plymouth by the prosecutrix, the appellant asked her if she needed any help. She responded that she did not need any assistance and Gilbreath continued to drive down the beach.
Gilbreath turned the car around and drove toward the prosecutrix. The appellant again asked the prosecutrix if she needed any help and she again responded in the negative. The next thing the prosecutrix realized, the appellant was standing beside her trying to make "small talk." She merely continued to put the grill together.
The prosecutrix finally asked the appellant to leave.[2] The appellant asked why, and she told him that she had come to the beach to be alone. The appellant then started to walk down the beach.
Just as the appellant started to walk down the beach, the prosecutrix realized that a nearby Winnebago camper was in the process of leaving. The prosecutrix picked up her grill and put it into the hatch back of her car. She then got into her car to drive away, but the appellant came up to the driver's side of the prosecutrix's car, grabbed the door, opened it and forced himself inside, thereby forcing the prosecutrix over to the middle of the car. The prosecutrix asked him what he was doing and told him to leave her car.
When the appellant failed to respond to her demand to leave her car, she attempted to escape out the passenger side of the car. The appellant, however, put his arm around her neck and restrained her. Then the appellant told her "to shut up, to quit hollering," and that he "had a gun" and "he would use it" if necessary.
A physical struggle ensued during which the appellant punched the prosecutrix in her left eye. The force and threats employed by the appellant were sufficient to subdue the prosecutrix to the point where the appellant was able to start the car and drive it down the beach. As the appellant drove the prosecutrix's car down the beach, he had his arm around her neck and was feeling her breasts while telling her that the was going to "f__k" and "e_t" her.
The appellant stopped the car, but the appellant's companions drove up. The appellant promptly started the prosecutrix's car and drove further along the beach. When the appellant subsequently stopped her car, the appellant told the prosecutrix to take off her clothes. The prosecutrix, who was crying, begged the appellant to let her alone. The appellant yelled at the prosecutrix and hit her again. He then ripped off the top button of the prosecutrix's blouse. The prosecutrix then removed her clothes and laid down on the front seat.
The appellant unzipped his pants and attempted to insert his penis into the prosecutrix's vagina. The prosecutrix testified that the appellant could not achieve an "erection" and that, despite his efforts, his penis only partially penetrated her vagina. *705 The appellant subsequently forced the prosecutrix into the back portion or hatchback area of her car. He then continued to rape her for approximately ten to fifteen minutes.
Thereafter, the appellant got out of the prosecutrix's car and told her that he would kill her if she reported the occurrence. The prosecutrix got into the driver's seat and attempted to drive away, but the car got stuck in the sand. The appellant recruited Gilbreath and James to assist him in getting the prosecutrix's car out of the sand. The Plymouth was subsequently backed up to the prosecutrix's car so that chains could be attached to it.
Meanwhile, a car driven by Edward Springs, which had driven by the prosecutrix's car twice during the rape, passed by a third time. The prosecutrix waved at him and attracted his attention. Springs drove up and watched the appellant and his companions free the prosecutrix's car from the sand. At that time, the prosecutrix drove off and Springs followed her. When the prosecutrix stopped her car a short way down the beach, Springs got out of his car and asked her if she had been attacked. The prosecutrix responded in the affirmative and Springs took the prosecutrix to a nearby convenience store to call the police.
The police were summoned, and the prosecutrix was examined by a physician. There was no evidence of sperm in her vagina and no evidence of any trauma in her pelvic area.
The defensive testimony focused on the appellant's alcoholic condition during the time of the rape. The testimony tends to show that it would have been impossible for the appellant to have been able to have sexual intercourse with the prosecutrix. The defense also presented evidence that any sexual contract between the appellant and the prosecutrix was consensual in nature.
The appellant's first contention is that the trial judge erred by failing to delete a portion of the appellant's confession. The portion of which the appellant complains is the underlined portion of the following:
"I met some old woman on the street and took her to Rosie's. We had a beer there then I was going to take the woman back to the Cozy Lounge. I told Ray to come back to the Cozy and pick me up.
"Just as I got outside the Cozy, I was picked up by Freeport Police Department."
The events which the appellant wanted deleted occurred after the rape. The appellant contends that the events reveal an extraneous instance of immorality. The appellant relies upon Chatterfield v. State, 436 S.W.2d 146 (Tex.Cr.App.1969).
In Chatterfield, the defendant was charged with assault to rob. Over the defendant's objection, the prosecutor elicited, in his case-in-chief, a telephone conversation the defendant had with a married woman within one hour of the commission of the offense. This Court there held that
"[t]he testimony relating the telephone conversation was not pertinent to any issue raised on the trial, and shows appellant's conduct which was wholly disassociated with the offense for which he was on trial, and was of such a nature that it was reasonably calculated to prejudice his rights and deprive him of a fair and impartial trial on the issue of whether the jury would recommend that his sentence be probated."
However, we do not view the "objectable" portion of the appellant's confession as evidence of an extraneous offense unrelated to the offense on trial. Rather, the events demonstrate the appellant's actions following the rape. The appellant's actions immediately after the rape were admissible to show the complete context in which the criminal act occurred. Albrecht v. State, 486 S.W.2d 97 (Tex.Cr.App.1972). Cf. Lewis v. State, 529 S.W.2d 533 (Tex.Cr.App. 1975).
Moreover, even if the objectionable portion of the confession should have been deleted to avoid any possibility of prejudice, we do not consider the objectionable portion of the appellant's confession to be so prejudicial *706 as to conclude that the trial judge abused his discretion in refusing to delete it. Cf. DeLeon v. State, 500 S.W.2d 862 (Tex.Cr.App.1973). Appellant's first contention is overruled.
The appellant's second contention is that the trial judge erred by allowing the appellant's amended motion for new trial to be overruled by operation of law.[3]
On January 23, 1976, the jury returned a verdict finding the appellant guilty. The jury assessed the appellant's punishment at fifteen years. That same day, the trial judge entered the judgment and set the sentencing for February 5, 1976.
On February 4, 1976, the appellant filed his motion for new trial. The appellant's motion for new trial was overruled by the trial judge on February 5, 1976, sentence was pronounced, and appellant gave notice of appeal. On February 9, 1976, the appellant filed an amended motion for new trial and the trial judge set a hearing for February 19, 1976. However, a hearing on the amended motion for new trial was not held until March 18, 1976. Because notice of appeal was not withdrawn and the sentence was not set aside before the February 9 motion for new trial was filed, the trial court lacked jurisdiction to entertain it and it should not have been considered. Locke v. State, 502 S.W.2d 1 (Tex.Cr.App.), and authorities cited there. The ground of error is overruled.
The appellant's third, fourth, fifth and sixth grounds of error contend that the trial judge impermissibly allowed the prosecutor to introduce hearsay evidence of the prosecutrix's statements to Edward Springs and that these statements bolstered the prosecutrix's unimpeached testimony.
The statements made by the prosecutrix to Springs, by the prosecutrix, and introduced through Springs were that: (1) the prosecutrix did not know the men; (2) the prosecutrix was molested by the large man; (3) the prosecutrix told the appellant that she would not report him if he turned her loose; and that (4) the appellant told her that he would kill her if she reported the rape.
All of these statements were made by the prosecutrix or repeated to Springs within a very short period after the offense was committed. In Knox v. State, 487 S.W.2d 322, 327 (Tex.Cr.App.1972), we quoted the following from 48 Tex.Jur.2d, Rape, Section 56, p. 691:
"`The fact that the prosecutrix cried out or complained of an outrage perpetrated on her, shortly after its occurrence, may be proved by the state.... Though the details of the cry or complaint must be part of the res gestate in order to be admissible as original evidence, the question whether the statements made were strictly res gestae is immaterial where the evidence is confined to the bare fact of complaint.'"
We hold that all the foregoing statements were either "confined to the bare fact of complaint" or were res gestae of the offense. Albrecht v. State, supra; Price v. State, 496 S.W.2d 103 (Tex.Cr.App.1973). Appellant's third, fourth, fifth and sixth contentions are overruled.
The appellant's seventh contention is that the trial judge abused his discretion by refusing to grant the appellant's motion for mistrial after the prosecutor elicited, on cross-examination, that the defensive witness was the appellant's brother-in-law.
The appellant called Fred Sheffield to testify to the appellant's reputation for being a peaceful and law-abiding citizen. On cross-examination, the prosecutor asked the witness if he was related to the appellant. When Sheffield responded that he was related to the appellant, the prosecutor asked in what manner. Sheffield responded: "Brother-in-law."
It is well established that the State should not prove that a defendant in a rape case is married. Lassere v. State, 458 S.W.2d 81 (Tex.Cr.App.1970). In the present case, Sheffield's testimony did not *707 reveal that the appellant was married, only that the appellant had a brother-in-law. Moreover, during the guilt or innocence stage of the trial, the appellant called his wife to testify that the appellant was physically unable to engage in sexual intercourse when he consumed large quantities of alcoholic beverages. Any error was waived by the introduction of similar evidence by the appellant. Appellant's seventh contention is overruled.[4]
The appellant's eighth contention is that the trial judge erred by failing to charge the jury that they must find, beyond a reasonable doubt, that the appellant's penis penetrated the prosecutrix's vagina.
The trial judge defined sexual intercourse to mean "any penetration of the female sex organ by the male sex organ." This language tracked the definition of sexual intercourse set forth in V.T.C.A., Penal Code Section 21.01(3). The trial judge thereafter instructed the jury that they must find beyond a reasonable doubt that sexual intercourse occurred. The charge was proper. No error is shown. Appellant's eighth contention is overruled.
The appellant's ninth contention is that the trial judge committed fundamental error by failing to charge the jury on the lesser included offense of attempted rape. Basically, the appellant contends that the defensive evidence of his impotency is the converse of penetration.
The obvious flaw in the appellant's argument is that his request that the trial judge instruct the jury that they had to find, beyond a reasonable doubt, that the appellant's penis had penetrated the prosecutrix's sexual organ, even coupled with the defensive evidence of impotency, did not put the trial judge on notice that the appellant desired an instruction on attempted rape. Also, we are not aware of whether the appellant consciously chose not to submit a requested instruction on attempted rape in the hope that the jury would believe his impotency defense and acquit him. This is not one of those situations where the appellant's counsel's failure to act cannot be classified as trial strategy. Cf. Ruth v. State, 522 S.W.2d 517, 519 (Tex.Cr.App.1975) (Morrison, J., concurring). Fundamental error is not shown. Cf. Harris v. State, 522 S.W.2d 199 (Tex.Cr.App.1975). Appellant's ninth contention is overruled.
The appellant's tenth contention is that the prosecutor went outside the record during his final argument at the guilt or innocence stage by stating:
"You know things have changed in the last few years. Twenty years ago people didn't even have locks on their doors. People who grew up around here, you would go to people's houses, nobody locked their doors, and now what happens when you go to somebody's house at night? Knock on the door. You are going to sit there and wait three or four minutes while they come and look through the peephole. Then unlock the chain, then undo the dead bolt."
The following then occurred:
"[Appellant's Counsel]: I object to this line of argument. It is completely outside the record and I would object to it. If we could confine ourselves to the record I think we could speed this up, and I object to his going outside.
[Prosecutor]: May I proceed?
"THE COURT: You may."
It is plain that the appellant did not obtain an adverse conclusory ruling. Bailey v. State, 532 S.W.2d 316 (Tex.Cr. App.1975); Nichols v. State, 504 S.W.2d 462 (Tex.Cr.App.1974). Nothing is before us for review. Appellant's tenth contention is overruled.[5]
*708 The appellant's eleventh through eighteenth grounds of error concern the hearing held on the appellant's amended motion for new trial. Since we have previously held that the trial court lacked jurisdiction to hear the motion, it is clear that the hearing on the amended motion for new trial was not authorized and any errors which occurred during it are not properly before us. Appellant's grounds of error eleven through eighteen are overruled.
The judgment is affirmed.
ROBERTS, Judge, concurring in part and dissenting in part.
I agree with the results reached by the majority. However, I dissent to the method used to dispose of appellant's second ground of error.
At the outset, I note that the appellant was convicted on January 23, 1976. Thus, the appellant had ten days in which to file a motion for new trial and motion in arrest of judgment. Articles 40.05 and 41.02, Vernon's Ann.C.C.P. The appellant had until Monday February 2, 1976, to file these motions.
However, the appellant did not file his motion for new trial until February 4, 1976. The untimely motion for new trial was expressly overruled on February 5, 1976.
On February 9, 1976, an amended motion for new trial was filed. A hearing was held on that untimely filed amended motion for new trial on March 18, 1976.
The essential question is whether the trial judge's action in expressly overruling the appellant's untimely filed motion for new trial deprived the trial judge of the power to grant the appellant leave to file an amended motion for new trial.
Article 40.05, Vernon's Ann.C.C.P., states:
"A motion for new trial shall be filed within ten days after conviction as evidenced by the verdict of the jury, and may be amended by leave of the court at any time before it is acted on within twenty days after it is filed. Such motion shall be presented to the court within ten days after the filing of the original or amended motion, and shall be determined by the court within twenty days after the filing of the original or amended motion, but for good cause shown the time for filing or amending may be extended by the court, but shall not delay the filing of the record on appeal...." (Emphasis added.)
In Clopton v. State, 563 S.W.2d 930 (Tex. Cr.App.1978), the defendant timely filed an original motion for new trial. Twenty days thereafter, the original motion for new trial was overruled by operation of law. Thereafter, a second motion for new trial was filed. This Court there held that despite the fact that the original motion for new trial had been overruled by operation of law the trial judge had the power to consider a second motion for new trial and that the record did not have to reflect that the trial judge found that good cause existed for the untimely filing of the second motion for new trial.
A different situation is presented in this appeal. Two factors significantly distinguish the present case from Clopton: (1) Unlike Clopton, the first motion for new trial was not timely filed; and (2) unlike Clopton, the trial judge expressly overruled the first motion for new trial.
It is clear that unlike Clopton The trial judge did affirmatively rule on the appellant's original motion for new trial within twenty days after it was untimely filed. In light of the language of Article 40.05, Vernon's Ann.C.C.P., and the distinctions between the present case and Clopton, I would hold that the trial judge's express ruling on the original untimely filed motion for new trial deprived him of the power to grant the appellant leave to file an untimely amended motion for new trial. For this reason I would overrule appellant's second ground of error.
NOTES
[1] V.T.C.A., Penal Code Section 21.02(b)(1).
[2] By this time Gilbreath and the other occupant of the car had left the immediate vicinity.
[3] The amended motion for new trial was filed on February 9, 1976. The hearing on the amended motion for new trial was not held until thirty-eight days later.
[4] We also note that the State could properly elicit the fact that the witness was related to the appellant so as to attempt to show the witness' bias. Cf. Coleman v. State, 545 S.W.2d 831 (Tex.Cr.App.1977).
[5] The appellant has couched his ground of error in terms that the trial judge erred by failing to rule on the objection. A trial judge has an obligation to rule on objections, but defense counsel likewise have an obligation to press the trial judge to definite ruling on the objection. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1860302/ | 609 So.2d 1163 (1992)
Billy Floyd KNIEPP, et ux., Plaintiffs-Appellants,
v.
CITY OF SHREVEPORT, Defendant-Appellee.
S. DIG, INC. and Sam Digilormo, Plaintiffs-Appellants,
v.
CITY OF SHREVEPORT, Defendant-Appellee.
Billy Floyd KNIEPP, Plaintiff-Appellant,
v.
CITY OF SHREVEPORT, Defendant-Appellee.
Nos. 24,216-CA to 24,218-CA.
Court of Appeal of Louisiana, Second Circuit.
December 2, 1992.
Writ Denied February 19, 1993.
*1164 Daryl Gold, Shreveport, for plaintiffs-appellants.
Jerry Jones, City Atty., Lydia M. Rhodes, Asst. City Atty., for defendant-appellee, City of Shreveport.
Before LINDSAY, BROWN and STEWART, JJ.
STEWART, Judge.
Plaintiffs, S. Dig, Inc. and Sam Digilormo, who owned Sack-N-Pack Grocery, and Billy F. Kniepp, who owned B & R Liquor and Buster's Liquor, sued the City of Shreveport for negligent acts and omissions by the Shreveport Police Department (SPD) at the scene of a homicide which allegedly triggered the "Cedar Grove riot."
After trial on the issue of liability, the trial court found that the acts or omissions of the police department were neither a legal cause nor a cause in fact of plaintiffs' damages. The trial court further found that Chief Charles Gruber's decision to redeploy the officers to the perimeter of the crime scene was a discretionary act which rendered the City of Shreveport immune under LSA-R.S. 9:2798.1. Plaintiffs appeal.
FACTS
About 9:45 p.m. on September 20, 1988, Cynthia Johnson and Tamala Vergo, both white females, drove to a Sack-N-Pack Grocery, a convenience store, which was owned by S. Dig, Inc. and operated by Sam Digilormo. The store was located next to A.B. Palmer Park on Line Avenue in Shreveport, a predominantly black area of Shreveport known as Cedar Grove. Johnson and Vergo attempted to complete a drug transaction with some black males while stopped on the store parking lot. The drug sale ended abruptly with Vergo pointing a pistol and firing two shots towards the males who began to run toward the park.
One of the shots fatally wounded William David McKinney, a young black man who was a bystander in the line of fire. An unknown person or persons in the park fired shots at the automobile, which then stalled. Both females ran from the vehicle and into the Sack-N-Pack store yelling for somebody to call the police. The police arrived within minutes and detained Johnson and Vergo. A crowd gathered outside the store, and threw rocks and bottles at the police officers, firefighters, and vehicles which were at the scene. After about an hour, the females were removed by police from Sack-N-Pack Grocery at approximately 10:45 p.m. and taken to SPD for further interrogation. The two females were later booked and charged with second degree murder in connection with this shooting incident.[1]
The crowd continued to grow both in number and in violent activity protesting the fatal shooting of McKinney. Groups of people gathered in the park, in the parking lot of the grocery store, and in the street. Shortly before 11 p.m., a patrol car windshield was broken. The crowd threw rocks which shattered glass in other vehicles. At 11 p.m., there was a report of bricks being thrown. Shortly after 11 p.m., a brush fire erupted behind the park in which the murder victim had been shot. At about 11:15 p.m., while Shreveport Fire Department (SFD) firefighters were working on the brush fire, the police officers received an order from Chief Gruber to move out of the area of the disturbance. SPD officers pulled back into the area surrounding the disturbance and firefighters were attacked with rocks. In response, the firefighters pulled back as well.
*1165 Periodically, there were reports of gunfire. As the evening progressed, people began looting Sack-N-Pack Grocery, B & R Liquor, and Buster's Liquor. Someone set fire to Sack-N-Pack Grocery. The fire spread next door to B & R Liquor, and destroyed both buildings. The events of this evening became known nationally as the "Cedar Grove riot."
Plaintiffs, who owned the businesses which were destroyed by fire, sued the City of Shreveport, alleging that it had breached its duty to plaintiffs as citizens and as property owners in the manner in which the city, through its employees, responded to the incident. Plaintiffs contended that the city's response (i.e., its actions and omissions) resulted in their loss of property. The parties presented testimony and other evidence at trial on the issue of liability.
In written reasons for judgment, the trial court found that the actions of the police officers who initially responded at the scene were operational and therefore not covered by R.S. 9:2798.1. The trial court found that, although there was evidence which indicated that SPD could have handled the crowd more efficiently, there was no basis to conclude that the actions of the responding officers were either a substantial contributing factor or a cause in fact of the subsequent events.
The trial court further determined that the decision by Chief Gruber to withdraw from the crowd was based upon the policy to not jeopardize the life and safety of the individuals involved in order to protect or salvage unoccupied property. The court found that the city's choices were reasonably related to the governmental objective at issue and, in this situation, were grounded in social, economic and political policy. Accordingly, the trial court concluded that the decision to withdraw was a discretionary decision which rendered the city immune from civil liability. Plaintiffs appeal.
DISCUSSION
At issue is whether (1) the decisions of Chief Gruber regarding protection of the plaintiffs' property, and/or (2) the actions of the responding officers with regard to the two females, give rise to liability on the part of the City of Shreveport. We shall examine the applicable principle of immunity prior to discussion of these two issues.
LSA-R.S. 9:2798.1 provides as follows:
§ 2798.1. Policy-making or discretionary acts or omissions of public entities or their officers or employees.
A. As used in this Section, "public entity" means and includes the state and any of its branches, departments, offices, agencies, boards, commissions, instrumentalities, officers, officials, employees, and political subdivisions and the departments, offices, agencies, boards, commissions, instrumentalities, officers, officials, and employees of such political subdivisions.
B. Liability shall not be imposed on public entities or their officers or employees based upon the exercise or performance or the failure to exercise or perform their policy-making or discretionary acts when such acts are within the course and scope of their lawful powers and duties.
C. The provisions of Subsection B of this Section are not applicable:
(1) To acts or omissions which are not reasonably related to the legitimate governmental objective for which the policy-making or discretionary power exists; or
(2) To acts or omission which constitute criminal, fraudulent, malicious, intentional, willful, outrageous, reckless, or flagrant misconduct.
D. The legislature finds and states that the purpose of this Section is not to reestablish any immunity based on the status of sovereignty but rather to clarify the substantive content and parameters of application of such legislatively created codal articles and laws and also to assist in the implementation of Article II of the Constitution of Louisiana.
Immunity from liability for discretionary acts, pursuant to LSA-R.S. 9:2798.1, is essentially the same as the immunity conferred on the federal government by the *1166 exception in the Federal Tort Claims Act (FTCA). Chaney v. National R.R. Passenger Corp., 583 So.2d 926 (La.App. 1st Cir. 1991). In Berkovitz v. United States, 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988), the United States Supreme Court developed the following two-step inquiry to examine immunity under the FTCA: (1) whether a statute, regulation or policy specifically prescribes a course of action; and (2) whether the challenged action is grounded in social, economic or political policy. The Louisiana Supreme Court has adopted this Berkovitz inquiry to analyze the applicability of the LSA-R.S. 9:2798.1 discretionary exception. Verdun v. State Dept. of Health & Human Resources, 559 So.2d 877, 879 (La.App. 4th Cir.1990); see also, Fowler v. Roberts, 556 So.2d 1, 13-16, on rehearing, (La.1990).
The application of this two-pronged inquiry was explained in Fowler, supra, 556 So.2d at 15-16, as follows:
Discretion exists only when a policy judgment has been made. Judicial interference in executive actions involving public policy is restrained by the exception. Thus, the exception protects the government from liability only at the policy making or ministerial level, not at the operational level....
If there is no room for an official to exercise a policy judgment, the discretionary function exception does not bar a claim that an act was negligent. When the government acts negligently for reasons unrelated to public policy considerations, it is liable to those it injures. [Citations omitted and emphasis ours.]
Having outlined the test for LSA-R.S. 9:2798.1 immunity, we turn to the strategy and decisions of Chief Charles Gruber. After the two females were removed from the area and the crowd exhibited increased hostility, Chief Gruber ordered the police officers to pull back from the homicide area and secure the perimeter. Plaintiffs complain that firefighters left the area because they were unprotected when SPD "withdrew" from the scene. They assert that SPD's "withdrawal" therefore caused their property to burn unchecked.
The record, as a whole, indicates that the strategy chosen by Chief Charles Gruber was to protect the lives of both civilians and law enforcement officers, by (1) establishing a perimeter within which the disturbance would be contained, and (2) allowing the disturbance to die out on its own. Testimony revealed that, although some officers believed the police could have dispersed the crowd at various points during the night, Chief Gruber chose not to confront the crowd in order to avoid violence between the crowd and the officers.
Faced with a similar issue arising from a civil disturbance in the 1960's, the Florida Supreme Court stated the following in Wong v. City of Miami, 237 So.2d 132, 134 (Fla.1970):
While sovereign immunity is a salient issue here, we ought not lose sight of the fact that inherent in the right to exercise police powers is the right to determine strategy and tactics for the deployment of those powers. In the Report of the National Advisory Commission on Civil Disorders, issued pursuant to Executive Order 11365 in 1967, the point was frequently made that police visibility was often an operative factor in the raising of tensions, and that withdrawal from an area could be a highly useful tactical tool for the relaxing of tensions in certain situations. The sovereign authorities ought to be left free to exercise their discretion and choose the tactics deemed appropriate without worry over possible allegations of negligence. Here officials thought it best to withdraw their officers. Who can say whether or not the damage sustained by petitioners would have been more widespread if the officers had stayed, and because of a resulting confrontation, the situation had escalated with greater violence than could have been controlled with the resources immediately at hand? If that had been the case, couldn't petitioners allege just as well that that course of action was negligent? [Emphasis in original.]
Chief Gruber elected to pull officers back to establish a perimeter within which the disturbance could be contained so that it *1167 did not spread into the neighboring community. Faced with increasing violence and unrest from unpredictable groups of citizens, Gruber redeployed the officers to various areas surrounding the crowd. Some officers agreed with his decisions, and some officers did not.
Lieutenant Don Ashley described the situation most candidly in his response to plaintiffs' counsel regarding whether the crowd would have dispersed if a large group of police officers had moved in and requested that they leave:
A. You know that's a hard to question [sic]. Just to say, yeah, they would disperse. I've been in situations at other scenes where we've had crowds when the crowds wouldn't just disperse. And with that crowd and the situation that you had there, I couldn't honestly say that yeah, if we all approached them, all the innocent people, all the crowd, would calmly just disperse. If you confront that situation, you have a lot of variables that you do not have not [sic] control over as far as what the nucleus of the rioters, how are they going to respond. If they fire on the officers, an officer has to defend himself. And then to return fire by the officer, you've got a lot of innocent people that could be injured. And so you know it's a tough situation. We've been in it before, been in it since, since this happened, you know, not so much that you would term a riot situation, but just at any homicide scene, you know, normal thinking and normal responses don't always hold true when you're involved in a homicide type situation at a homicide scene. And it's very difficult to sit in the sterile environment of the courtroom and say, yeah, this is what people will do. It's hard to say how people will react in those types of situations.
Chief Gruber described the situation in his answers to questions by plaintiffs' counsel in this excerpt from his deposition:
A. After I arrived there, the crowd continued to grow. They had redirected their anger, I guess, if you will, or whatever you could call a mad crowd, redirected their anger toward property and started a fire behind, in A.B. Palmer Park way up on Thornhill. At least we think they started the fire. We don't know who started the fire.
Q. A fire did get started in the park?
A. Yes. Back up in the park. We called for the Fire Department to come and put it out.
Q. Did they put it out?
A. They were working it. They finally put it out. In the process, the crowd was getting extremely angry, even though I went into the crowd and tried to get them calm and tried to get them back, they were becomingit was uncontrollable. You could feel the rise in the temperature of the crowd. It was easily getting out of control. And the rocks and bricks were starting to come hard and heavy at police officers, at our vehicles and everything else. And having police officers in the crowd in that close of contact, I felt it was would [sic] not be too long before someone else would get hurt, where they would pull at a police officer or jump a police officer or where we would not be able to control what would happened [sic]. So we pulled back, pulled out. Told everyone to pull back and told them we would reorganize over at 79th and Fairfield.
The order to pull back occurred at approximately 11:15 p.m. By 11:20 p.m., there were reports of vandalization in the area. Plaintiffs' buildings were not set on fire until after 12:30 a.m.well after the crowd was out of control. Gruber explained that to allow officers to leave the perimeter to arrest looters would have weakened his control of the perimeter. Chief Gruber testified by deposition that he considered protection of property secondary to the protection of life. He also noted that many arrests were made for looting, arson, and other offenses, because many of those who committed the offenses had to leave the area through the controlled perimeter.
*1168 Prior to giving the order to move back, Gruber had observed the crowd first hand when he went into the crowd. His car had been hit by a bullet. SPD and SFD personnel and vehicles had been attacked by the crowd with bottles, rocks, bricks, etc. At the time the decision to pull back was made, the number, identity, and location of the officers was not known. The record indicates that the crowd included active participants in the disturbance, as well as groups of people who were mere observers. Testimony revealed that several officers were ready and willing to confront the crowdwith firearms if the crowd were to respond with continued violence.
The record as a whole supports the trial court finding that the city's choices were reasonably related to a public policy-based governmental objective to protect life. We find that the decision Chief Gruber made was the type of discretionary tactical decision described in Wong, supra, which the Chief of Police for the City of Shreveport should be able to make without worry about allegations of negligence.
Plaintiffs contend that Chief Gruber's decision to pull back from the crowd was merely an operational decision which implemented the city's policy to "protect and serve". We disagree. The discretion which Gruber exercised in assigning priorities to life and property was grounded in socio-economic policy. The cases cited by plaintiffs in support of their contention are inapposite because they involve discretionary application of policy, rather than discretionary choice of policy. We distinguish the instant decision from operational decisions and from discretionary decisions which do not involve policy choice.
For the foregoing reasons, we find no error in the trial court's determination that the decision to withdraw from the crowd involved a discretionary policy determination for which the City of Shreveport is immune under R.S. 9:2798.1.
Plaintiffs also challenge the trial court's determination that the actions of the initial responding officers do not give rise to liability on the part of the City of Shreveport. The officers who initially responded to the Sack-N-Pack Grocery secured the crime scene and detained the two females. There is no indication that they made discretionary policy decisions. The trial court properly found that the conduct of these officers was operational in nature, and that the R.S. 9:2798.1 immunity does not apply to their conduct. Accordingly, we turn to the question of negligence via the duty/risk analysis.
As this court stated in Nichols v. Nichols, 556 So.2d 876, 878 (La.App. 2d Cir.1990), writ not considered, 561 So.2d 92 (La.1990),
A defendant's conduct is actionable under the duty/risk analysis of LSA C.C. Art. 2315 where it is both a cause-in-fact of the injury and a legal cause of the harm incurred. The cause-in-fact test requires that "but for" the defendant's conduct, the injuries would not have been sustained. The legal causation test requires that there be a "substantial relationship" between the conduct complained of and the harm incurred. [Citations omitted.]
Each element of the duty/risk analysis is dispositive, in that, if any one element is not present, liability cannot result. Therefore, even if a defendant owes a duty to a plaintiff, defendant is not liable for damages unless the act or omission is a cause-in-fact of plaintiff's loss.
Plaintiffs assert that, if SPD had not kept the two females in the grocery store for an hour, plaintiffs would not have sustained their losses. In support of their contentions, plaintiffs offered testimony from several officers who believed that the crowd was manageable prior to the removal of the two females from the store. Mr. Digilormo repeatedly requested that the officers remove the two females from his store. The crowd grew in numbers and in hostile activity while the two females were in the store.
The evidence shows a correlation between the removal of the two females from the store and an increase in the crowd's hostility. Although the record contains evidence which shows some correlation *1169 between the length of the detention and the increased size of the crowd, there is no proof by a preponderance that the time factor was a substantial cause of either the expressed hostility or of the subsequent burning of the properties by unknown individuals.
In its duty-risk analysis, the trial court determined that the one hour detention of the two females inside Sack-N-Pack probably contributed to the crowd's hostility, but noted that the crowd was hostile and threw objects when the initial responding officers arrived on the scene. The trial court found that the conduct of the initial responding officers was not a cause-in-fact of plaintiffs' losses.
We agree with the trial court that it does not automatically follow that, if the initial responding officers had removed the two females earlier, then plaintiffs would not have sustained damages. We find no error in the trial court determination that plaintiffs did not prove by a preponderance the necessary causation between the action or inaction of SPD and plaintiffs' loss. Plaintiffs did not establish that but for the length of time the two females remained in the Sack-N-Pack Grocery, the buildings and their contents would have been savedor that the conduct of the initial responding officers was a substantial factor in the loss sustained. See and compare, McCorkle v. Eltek, Inc., 572 So.2d 215, 216-217 (La.App. 1st Cir.1990).
Plaintiffs also argue that SPD created a specific duty to these plaintiffs by its initial acts and omissions in detaining the two females. We have already found no error in the trial court determination that the department's conduct was not a cause-in-fact of plaintiffs' losses. Thus, even if (1) R.S. 9:2798.1 immunity were inapplicable, (2) SPD owed a duty to plaintiffs, and (3) the department breached its duty, such breach does not give rise to liability under the instant facts. For this reason, we do not reach the question of whether SPD owed a duty to plaintiffs.
Assuming, arguendo, that SPD had a specific duty to these plaintiffs, we note the following: Because the duty of a policeman under these circumstances is not specifically delineated by statute, we find no one-to-one duty which constitutes an exception to the public duty doctrine. See Smith v. City of Kenner, 428 So.2d 1171, 1174 (La.App. 5th Cir.1983). Likewise, we find no personal or individual relationship between SPD and plaintiffs, and hence no transformation of the public duty into an individual duty. See and compare, Kendrick v. City of Lake Charles, 500 So.2d 866, 870 (La.App. 1st Cir.1986).
We distinguish Bloom v. City of New York, 78 Misc.2d 1077, 357 N.Y.S.2d 979 (1974), cited by plaintiffs in support of their argument that SPD created a specific duty to plaintiffs. In Bloom, the court noted that a municipality can be held liable where it assumes a duty to provide police protection but does so in a negligent manner. Plaintiffs alleged that they were restrained from protecting their property by the police who assured them that proper police protection would be provided. The court found that plaintiffs alleged an affirmative series of acts by defendant which, if proven, could constitute creation or assumption of a duty to plaintiffs. Accordingly, the court denied defendant's motion to dismiss for failure to state a cause of action.
By contrast, the instant plaintiffs argue that the length of time during which the two females were detained in the grocery store by the police created a specific duty to plaintiffs. The instant case involves no allegations of affirmative acts, such as assurance of protection, by which the city assumed a special duty. Thus, although we do not reach the question of whether the city owed a general duty to plaintiffs, we note that we are not persuaded by plaintiffs' argument regarding the city's voluntary assumption of a specific duty.
Having found that the trial court was neither clearly wrong, manifestly erroneous, or in error as a matter of law, we affirm the judgment of the trial court.
AFFIRMED.
BROWN, J., dissents with written reasons.
*1170 BROWN, Judge, dissenting.
On September 20, 1988, two brick buildings fronting on Line Avenue were looted and subsequently destroyed by arson. This action seeks to hold the City of Shreveport vicariously liable for the alleged negligent acts or omissions of its police officials. The alleged negligent conduct arises in the context of the failure of the police department to provide protection and assistance. I disagree with the majority opinion which grants the city immunity under LSA-R.S. 9:2798.1 for the decisions of its police chief.
Louisiana's 1974 Constitution rejected the concept of sovereign immunity. LSA-Const. Art. 11, § 10 provides:
Neither the state, a state agency, nor a political subdivision shall be immune from suit and liability in contract or for injury to person or property. (emphasis added).
Since the adoption of the 1974 Constitution, the legislature has acted to restore significant areas of governmental immunity. R.S. 9:2798.1 is such an act.[1] Because the constitution unequivocally rejects governmental immunity, R.S. 9:2798.1, which limits recovery must be strictly and narrowly construed. Jones v. City of Baton RougeParish of East Baton Rouge, 388 So.2d 737 (La.1980). Moreover, the burden of proving this limitation of liability lies with the city.
R.S. 9:2798.1 is a codification of the old "public duty doctrine" which granted immunity against tort claims to the state and its subdivisions for their discretionary functions.[2] The legislature's use of the word "discretionary" is unfortunate and only adds confusion to the statute's interpretation. Practically every act of a rational being involves some choices and the discretionary function immunity must be read carefully or it will totally insulate government from responsibility for the negligent conduct of its employees. Trevino v. General Dynamics Corporation, 865 F.2d 1474 (5th Cir.1989).
Whether the conduct of police officials is immune from tort liability is a factual question which must be answered by examining the nature of the act and not the rank or status of the actor. The theory of plaintiffs' case is that the police withdrew protection, leaving plaintiffs' property to the whim of an angry crowd and then failed to protect fire fighters who were ready to return to the area to fight the fire started by the crowd.
The first inquiry is to consider whether the police official had any discretion as to what course of conduct to follow. In the instant case, it is clear that both the police chief and the officers initially responding to the homicide scene had discretion to make choices in their reaction to the emergency situation. All discretionary acts, however, are not immune from tort liability. Immunity extends only to those choices narrowly defined as policy-making or planning. Operational choices which involve the implementation of policy are not immune. It is this second step in the analysis that is by far the most difficult. See Berkovitz v. U.S., 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988).
Because each case depends on its particular facts, the jurisprudence distinguishing the boundary between policy-making and operational decisions has not always been consistent or clear. The salient rule is that governmental immunity is not automatic just because the official had some discretion. It is the city's burden to prove its entitlement to immunity.
*1171 Plaintiffs owned and operated adjoining convenience stores fronting on Line Avenue in Cedar Grove. Line Avenue is a four lane major thoroughfare in the City of Shreveport. One business, Sack-N-Pack, is bordered on the south by A.B. Palmer Park, a location notorious for its bodacious dealings in illegal drugs. Two young white females drove into the parking lot of Sack-N-Pack and sought to buy drugs. The gunshots that followed left the females' vehicle disabled in the parking lot and a black male fatally wounded in the park.[3]
During the investigation and thereafter, a crowd gathered, which was estimated at varying times from 15 to 200 people. A few drug dealers either attempted to incite the crowd or threw rocks and bottles at the police and firemen. The evidence further confirmed that K-9 units, SWAT and Special Response Teams from the Shreveport Police Department, Caddo Sheriff's Office, Bossier City Police Department and Louisiana State Police were on the scene. In addition, both the graveyard and evening shifts of the Shreveport Police Department were activated. Exactly when this force of more than 100 officers came together is unclear. Although evidence demonstrated confusion as to the number and location of officers at the beginning of the incident, the city has never suggested that sufficient resources were not available to implement whatever response was selected.
Under these circumstances the decision to withdraw was an operational choice rather than one of policy-making. The decision to pull out cannot be distinguished from that of the officers who chose to hold the two females at the scene while conducting their investigation. Actually the evidence was conflicting concerning who made the decision to leave the crime scene. The transcript of the radio transmissions indicates that at 11:15 P.M. Lt. Woodard ordered all officers to leave the crime scene. Lt. Woodard gave the order after the wrecker towed the suspects' disabled vehicle from the scene. On the other hand, the radio transcripts and Woodard's testimony showed that the police chief was also at the scene at this time. The police chief testified that he gave the order for everyone to pull back and reorganize at 79th and Fairfield. The chief testified he issued the order to withdraw to prevent a confrontation between the police and crowd. Lt. Woodard testified that he did not consult the chief when he issued his order; however, Captain Morgan testified that Woodard told him the chief ordered the withdrawal. I am not sure if the majority opinion would have afforded immunity to Lt. Woodard's decision.
The decision of when to reenter the area was likewise an operational choice. The police chief testified that he decided to cordon off an area consisting of about ten (10) blocks and allow the crowd to diffuse itself. This nonconfrontational policy was chosen under the belief that a police presence would aggravate the crowd.
Policy-making decisions include budgeting concerns such as the number and location of substations, the amount of equipment to purchase, the size of the department, the number of units needed to patrol the city, the size of patrol districts, and in certain situations, where to deploy limited resources when faced with competing emergencies. The case before us is different. The resources were available to implement the protect and serve policy of the police department. The decisions to retreat and when to reenter were operational in nature. Whatever discretion existed was not based on policy.[4]
The instant case is distinguishable from Wong v. City of Miami, 237 So.2d 132 *1172 (Fla.1970), cited by the majority. In Wong when the police withdrew there was only speculation that a disturbance might occur. In the instant case, when the order was issued to pull out, the disturbance was in progress.
Having determined that the choice to withdraw and remain in a perimeter was operational in nature and not subject to immunity, we turn next to an examination of liability.
I agree with the majority that the failure to immediately remove the two females from the area by the officers initially responding to the homicide scene was not a cause-in-fact of plaintiffs' losses; however, I would add that the evidence presented did not prove that these officers violated any duty owed to plaintiffs. They responded to a homicide in an appropriate and reasonable manner. They taped off the scene and attempted to carry out a forensic investigation. They went about the task of determining what occurred and kept the two females separated from other witnesses. When they realized that it was necessary to remove the females from the scene, they called for additional support and a van. At this time, the store was protected by a perimeter of police. Under these circumstances, their actions were reasonable and not negligent.
The police chief was not notified for more than one (1) hour after the shooting. The chief arrived at the Sack-N-Pack after the females had been removed to the police station. The chief, who was surrounded by police officers, attempted to talk to the crowd. In his opinion the crowd had redirected their anger towards property and the police.[5]
The police chief decided to withdraw and told his officers to pull back and reorganize at 79th and Fairfield (approximately two blocks to the west). When the police pulled back, the fire department, which was fighting a brush fire in the park, was left without police protection. Because rocks were thrown at their truck, these firemen also retreated.
The fire chief joined the police chief at the command headquarters. One hour and twenty-one minutes after retreating to secure a perimeter, a fire was reported at Sack-N-Pack.[6] The decision was made by the police chief not to go back into the area at that time. When asked if that decision was agreed to by the fire chief, he stated:
That is a good question. I don't know the answer to that. To be honest with you, I don't know what his [fire chief] perception of our agreement was. My perception of the agreement was that it was pretty much my call as to whether it was too dangerous or not and he was going to respond accordingly. That he felt it was too dangerous, I felt too dangerous, and how he perceived that, I don't know.
Significantly, the city did not call the fire chief to testify. Thereafter, a reconnaissance team of five officers reported only fifteen people in the area of the fire. The team leader believed they could clear the area and protect firemen at that time. The team members were equipped with bullet-proof vests, ballistic helmets and heavy firepower. The team leader testified that the fire was just beginning to spread to the liquor store when he reported the estimated head count.
Clearly, the decision to withdraw and leave the area unprotected and then not respond to the Sack-N-Pack fire was a cause-in-fact of plaintiffs' losses.
The next inquiry is whether plaintiffs can articulate some general rule or principle of law that protects their interests and further, if that enunciated rule extends to protect them from this type of harm arising in this manner. The city and the police department had a general duty to protect *1173 the lives and properties of the citizens of Shreveport and therefore, owed plaintiffs a legal duty to perform that function according to reasonable standards of conduct. They also owed plaintiffs a particular duty to protect their property. In utilizing the Sack-N-Pack during the homicide investigation, they placed plaintiffs' property in jeopardy and, as testified by the police chief, were aware of the real danger from the crowd's redirected anger towards the property.
The next inquiry is whether the choices made by the police chief violated this duty owed to plaintiffs. The chief was confronted with several operational alternatives. He could have (1) immediately moved to disperse the crowd at the crime scene; (2) formed a perimeter around the Sack-N-Pack until the crowd quieted; (3) retreated, blocked off incoming traffic, regrouped and immediately acted to regain the area; or (4) as was done in this case, retreated, blocked off incoming traffic and regrouped to wait for the crowd to disperse on its own.
Many officers testified that they disagreed with the chief's choice. One officer stated he was shocked to learn "that we had given up ten city blocks of Cedar Grove and had backed out of that area and there were no police to serve and protect the citizens in that perimeter." Testimony indicated that a nursing home was directly across Line Avenue from Sack-N-Pack. The fire at Sack-N-Pack spread to B & R Liquor. Next to B & R Liquor was the Pel-State convenience store which dispensed gasoline. If the fire had spread and ignited the gasoline storage tanks at the Pel-State store, the occupants of the nursing home and surrounding residences would have been in great danger. As stated, the 5-man reconnaissance team behind the nursing home estimated only 15 people in the area. In addition, plaintiff, Billy Kniepp, who owned B & R Liquor, was just south of the Palmer Park on Line Avenue at a road block. He viewed the fire at Sack-N-Pack and confirmed the reconnaissance team's sighting of only a few people in the area. At this time, the "riot" was subsiding with only the fire remaining.
In retrospect, the decision to withdraw by the police chief may be questioned by others, but it was, in theory, a legitimate alternative. Officers on the scene of an emergency must be free to exercise choices between recognizably legitimate alternatives. Under the total circumstances, I cannot say that the tactic of withdrawal was unreasonable and thus negligent. It is possible that this nonconfrontational maneuver could have succeeded. We must judge this decision in the dimensions of the time and space in which the chief acted.
A more difficult task is to evaluate the failure to immediately dispatch a recon or Special Response Team when the fire was reported at Sack-N-Pack to evaluate the situation. This fire was a clear and present danger to both lives and property in the neighborhood. It spread from Sack-N-Pack to the adjoining liquor store and everyone feared possible ignition of the gasoline storage tanks at the Pel-State store. The intelligence reported from the area during this time frame indicated that the crowd was small. At 12:45 A.M. fireworks at the Sack-N-Pack exploded causing many onlookers to run.
In this limited situation, I believe the city's failure to respond to the fire was not reasonable and thus a breach of its duty to plaintiffs. In this respect I respectfully dissent.
NOTES
[1] See State v. Vergo, 594 So.2d 1360 (La.App. 2d Cir.1992), writ denied, 598 So.2d 373 (La.1992), where Tamala Vergo's conviction for manslaughter in the death of William David McKinney was affirmed.
[1] Surprisingly no case has questioned the constitutionality of R.S. 9:2798.1. See, however, Sibley v. Board of Supervisors of Louisiana State University, 462 So.2d 149 (La.1985), which found statutes limiting the amount of malpractice awards not unconstitutional. Also, see Industrial Risk Insurers v. New Orleans Public Service, Inc., 735 F.Supp. 200 (E.D.La.1990).
[2] The public duty doctrine of the 1970s provided that a city cannot be held liable for the failure to furnish adequate police protection because this duty flows only to the general public. This court in Fowler v. Roberts, 526 So.2d 266 (La. App. 2d Cir.1988), affirmed, 556 So.2d 1 (La. 1990), rejected the old public duty doctrine stating: "See Stewart v. Schmeider, 386 So.2d 1351 (La.1980), holding that a public agency may be held liable for a breach of a duty owed to the general public."
[3] Although both girls were indicted for second degree murder, one was acquitted and the other convicted of manslaughter. State v. Vergo, 594 So.2d 1360 (La.App. 2d Cir.1992).
[4] This view is further supported by the legislature enacting, the year following this incident, LSA-R.S. 9:2793.1 which granted immunity to public entities like the city and its employees from damages to property at the site of a crime, accident or fire. All that must now be shown to immunize the city and its employees is that the actor was "taking reasonable remedial action... necessary to abate a public emergency." This act is not retroactive and was passed to relieve officers and fire fighters from the threat of a lawsuit when responding to an emergency.
[5] The chief's vehicle did not sustain damage from a bullet at this time. This occurred later when the vehicle was used by a recon team.
[6] The radio logs show Lt. Woodard's order to withdraw was at 11:15 P.M.; at 11:45 P.M., the perimeter was reported secured; at 12:36 A.M., Officer Philly reported the fire; at 12:45 A.M., fireworks located at the Sack-N-Pack exploded; at 12:56 A.M., the SPD SRT arrived with the van at headquarters and, at 2:08 A.M., the recon team reported. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1973727/ | 627 F.Supp. 137 (1985)
Joseph HENNESSEY and Helen Hennessey, individually and as parents and next friends of Elizabeth Hennessey, a minor, Plaintiffs,
v.
STATE OF WASHINGTON, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, Carol Winterburn, individually and as Counselor for the Department of Social and Health Services, State of Washington; and Mike Padelford, Administrator, Pasco Community Services Office, Department of Social and Health Services, Defendants.
No. C-84-525 RJM.
United States District Court, E.D. Washington.
August 27, 1985.
(Richard H. Bennett), R. Henry Bennett, Inc., Everett, Wash., for plaintiffs.
Don G. Daniel, Asst. Atty. Gen., State of Wash., Olympia, Wash., for State of Wash., Dept. of S.H.S. and Carol Winterburn.
MEMORANDUM AND ORDER
ROBERT J. McNICHOLS, Chief Judge.
This is a civil rights action brought pursuant to 42 U.S.C. §§ 1983, 1985(3) and *138 1988 against the State of Washington, Department of Social and Health Services and two of its employees.[1] The operative facts are as follows. On or about October 4, 1983 plaintiffs' four year old daughter, Elizabeth, was taken to Dr. Nancy Johnson for treatment of a shattered front tooth. Two days later on October 6th, Elizabeth returned with a similar injury. On both occasions, a bicycle accident was given as the cause of injury.
Dr. Johnson suspected child abuse. She immediately notified Child Protective Services.[2] Defendant Carol Winterburn, a DSHS caseworker, responded to the call. Ms. Winterburn felt that the evidence indicated possible child abuse and she contacted the Kennewick Police Department. On October 7, 1983, Elizabeth was taken into protective custody by the police department and temporary foster care was arranged for her by Ms. Winterburn.
Further investigation was conducted that same day by Officer Larson of the Kennewick Police Department who was accompanied by Ms. Winterburn. From all indications it appeared to both Officer Lawson and Ms. Winterburn that Elizabeth had in fact sustained her injuries in a fall from her bicycle. Officer Lawson and Ms. Winterburn reported their findings to the Benton County Prosecutor, Les Ching, together with a recommendation that protective custody be removed. Prosecutor Ching concurred with their recommendation and he removed Elizabeth from protective custody at approximately 5:00 p.m. on October 7.
At some point in her discussions with Prosecutor Ching, Ms. Winterburn expressed concern that Elizabeth's recurring accidents might be due to developmental problems. Ms. Winterburn suggested to the plaintiffs that further evaluation of Elizabeth might be in order to determine the cause of Elizabeth's accidents. This suggestion understandably was met with some degree of opposition from plaintiffs. Ms. Winterburn renewed her concerns with Prosecutor Ching who agreed that further evaluation of Elizabeth was warranted. On October 9, 1983 Ms. Winterburn filed a request for a dependency petition to obtain a court ordered evaluation of Elizabeth. Apparently, Elizabeth remained in her parents' custody pending the outcome of the proceedings. The proceedings were eventually terminated in favor of the plaintiffs on January 12, 1984 on the motion of the prosecuting attorney based upon a lack of supporting evidence. This action followed.
All defendants have moved for summary judgment pursuant to Rule 56 Fed.R.Civ.P. The motions are based on several grounds and I will address each one in turn.
Jurisdiction
A threshold issue presented by the defendants is that the court lacks subject matter jurisdiction over this action. Defendants' argument is based upon the long-standing "domestic relations" exception to federal court jurisdiction. This exception has its roots in early judicial construction of the diversity statute. Csibi v. Fustos, 670 F.2d 134 (9th Cir.1982). A fair reading of Csibi would seem to limit its application to such cases.[3]But see Firestone v. Cleveland *139 Trust Co., 654 F.2d 1212 (6th Cir. 1981) (holding that federal question suits which are in substance domestic relations actions will not be entertained in federal court.)
Apart from the confusion over whether the domestic relations exception is only applicable to diversity actions, I believe that under the facts of this case the exception does not apply. As a jurisdictional limitation the exception has been narrowly construed. Csibi at 137. Only those cases most closely resembling ecclesiastical actions have been considered absolutely outside federal court jurisdiction. Id. Cases including those where a federal court is asked to grant a divorce or annulment, determine support payments, or award custody of a child are considered to be "at the core" of the exception. Id. As such, federal courts must decline jurisdiction in those cases concerning domestic relations only when "the primary issue concerns the status of parent and child or husband and wife." Buechold v. Ortiz, 401 F.2d 371 (9th Cir.1968).
In this action, plaintiffs seek redress for alleged violations of their constitutional rights. Plaintiffs do not challenge the competency of the state court in settling a domestic dispute. Nor is this an area which is particularly suited to state regulation and control. Cf., Csibi at 137. In this case, the subject of domestic relations is peripheral to the issues presented. Federal courts are not ousted of their jurisdiction merely because the suit arises in a domestic relations context. Elam v. Montgomery County, 573 F.Supp. 797 (S.D.Ohio 1983). Accordingly, I hold that this court does have jurisdiction over this action and I will now turn to the defendants' other contentions.
Plaintiffs' § 1985 Claims
Defendants have not tailored their present motion for summary judgment to address plaintiffs' claim under 42 U.S.C. § 1985(3). Presumably this claim is to be disposed of by the other grounds upon which defendants rely. Nevertheless, this claim may be dealt with quite summarily at the outset. Section 1985(3) is directed towards conspiracies which are motivated by racial or other class-based discriminatory animus. Mollnow v. Carlton, 716 F.2d 627 (9th Cir.1983), cert denied, 465 U.S. 1100, 104 S.Ct. 1595, 80 L.Ed.2d 126 (1984). The plaintiffs have neither alleged nor offered any evidence to indicate that the defendants were so motivated. Accordingly, plaintiffs' § 1985(3) claims are dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).
DSHS
Defendant DSHS, relying on Quern v. Jordan, 440 U.S. 332, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979) argues that suits against the State of Washington under 42 U.S.C. § 1981 et. seq are barred by the eleventh amendment. Defendant DSHS further contends that this immunity is extended to departments of state government citing Sykes v. State of California (Dept. of Motor Vehicles), 497 F.2d 197 (9th Cir. 1974). Defendant's argument has merit.
Further research indicates that the only erosion of the eleventh amendment immunity doctrine relied upon by defendant, is that local government units are not considered part of the state for Eleventh Amendment purposes. Monell v. New York City Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Plaintiffs do not allege that DSHS is a "local" government entity. Thus, their reliance on Monell is misplaced. Although a state may waive its Eleventh Amendment immunity, clearly the State of Washington has not done so. McConnell v. Critchlow, 661 F.2d 116 (9th Cir.1981). Accordingly, plaintiffs' claims against DSHS must fail.
Carol Winterburn
Plaintiffs' allegations as to Carol Winterburn appear to be that after investigating the circumstances surrounding their daughter's injury and determining that there was no basis for suspecting child abuse, Ms. Winterburn divulged false and misleading information to the Benton County *140 Deputy Prosecutor, Les Ching. This in turn caused the prosecutor to initiate dependency proceedings which were ultimately dismissed in plaintiffs' favor. It is complained that this conduct deprived plaintiffs of their constitutional rights. I have serious doubts as to whether the above conduct standing alone would constitute a violation of plaintiffs' constitutional rights. Cf. Duchesne v. Sugarman, 566 F.2d 817 (2nd Cir.1977). However, this is an issue I need not now decide. The state bases its motion for summary judgment on immunity and thus, for purposes of this motion I will assume that plaintiffs have stated an otherwise cognizable claim under section 1983.
All of the allegations against Carol Winterburn arise from her activities in preparing and presenting this case to County Prosecutor Ching. As such, the state argues that Ms. Winterburn is absolutely immune from civil rights liability under the absolute immunity doctrine enunciated in Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976). In Imbler, the question presented to the Court was whether a prosecutor who was acting within the scope of his duties in initiating and pursuing a criminal prosecution was amenable to suit under 42 U.S.C. § 1983. The Court held that he was not. The Court reasoned that imposing § 1983 liability on a prosecutor would have a debilitating effect on the criminal justice system. Of chief concern to the Court was the fact that imposing such liability on prosecutors would undermine the vigorous and fearless performance of his duties and dissipate his energies toward the defense of civil suits. Id. at 424-25, 96 S.Ct. at 992.
The reasoning of Imbler has been extended to child protective service caseworkers. The leading case in this area is Whelehan v. County of Monroe, 558 F.Supp. 1093 (W.D.N.Y.1983). Following the "functional comparability" test set forth by the Supreme Court in Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978), the court held that the roles of social services employees in reporting incidents of suspected child abuse were sufficiently analogous to the role of a prosecutor to warrant the extension of absolute immunity to them. The court's rationale is instructive:
If social service workers were required to guard against possible section 1983 claims arising from such decisions their evaluation of the information at hand could be easily colored and, it may be expected, sometimes at the expense of the life or well-being of abused or neglected children. Such a result cannot be countenanced for the administration of remedial child-protective laws anymore than for prosecutors' enforcement of the criminal laws.
Id. at 1099.
The reasoning of Whelehan is grounded in sound public policy and I expressly adopt it here. In so doing I am mindful that this is an area where the emotional stakes are high. The outrage and frustration that arises when the state intervenes in matters of family intimacy is obvious. Nevertheless, underlying the doctrine of absolute immunity is a recognition that the interests of particular individuals must sometimes be subordinated to the interests of society as a whole. Demery v. Kupperman, 735 F.2d 1139 (9th Cir.1984), cert denied, ___ U.S. ___, 105 S.Ct. 810, 83 L.Ed.2d 803 (1985). It is the responsibility of the Department of Social and Health Services to protect the health and welfare of the children of this state. They must be free to do so unhampered by the threat of civil suits of this nature. Accordingly, plaintiffs' claims against Carol Winterburn are dismissed.
Mike Padelford
Defendants argue that plaintiffs' claims against Mike Padelford are nothing more than an attempt to impose liability upon him under a theory of respondeat superior. Defendants rely on Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976) and its progeny for the *141 proposition that such claims do not establish a cause of action under § 1983. It is beyond dispute that a superior cannot be held liable under § 1983 for the constitutional deprivation caused by his subordinates, absent a showing that he participated or directed the deprivation. Ybarra v. Reno Thunderbird Mobile Home Village, 723 F.2d 675 (9th Cir.1984).
Plaintiffs advance various theories of liability in support of their claims against Mike Padelford. Again assuming that plaintiffs have in fact suffered a deprivation of their constitutional rights, the only theory that is somewhat supported by the record is that Mike Padelford was aware of his subordinate's activities and failed to take appropriate action to prevent their occurrence. Such acquiesence has been held to state a claim under § 1983. McClelland v. Facteau, 610 F.2d 693 (10th Cir.1979). This circuit has tacitly approved such a claim. Ybarra at 680.
This theory is nonetheless unavailing to the plaintiffs because Padelford is covered by the same absolute prosecutorial immunity as is his subordinate. His failure to take affirmative steps to prevent Ms. Winterburn's conduct is precisely the type of conduct to which immunity should attach. The protective services worker assigned to a particular case is infinitely more familiar with the facts involved and second guessing by a superior who is understandably fearful of civil liability would undermine the entire system. It would present anomalous results if Ms. Winterburn were allowed to act with impunity in preparing her case only to have her superior prevent the institution of any formal proceedings. Therefore, plaintiffs' claims against defendant Padelford must also be dismissed.
This Order addresses only the Federal claims asserted. What, if any, claims may be available through state procedures is not a matter for comment by this court. This action is dismissed. The Clerk shall enter judgment accordingly.
IT IS SO ORDERED.
NOTES
[1] Several pendent state law claims are also asserted including claims for slander, intentional infliction of emotional distress and malicious prosecution. For reasons that follow, I believe that summary judgment must be entered in favor of all defendants on plaintiffs' federal causes of action. Therefore, plaintiffs' pendent state law claims will also be dismissed. Jason v. Fonda, 698 F.2d 966 (9th Cir.1982).
[2] CPS is a departmental unit of the Department of Social and Health Services (DSHS) and will be referred to hereafter as DSHS.
[3] In Csibi the court noted that the Supreme Court has assumed jurisdiction over domestic relations cases on at least two occasions involving statutes granting broader jurisdictional power. Citing De La Rama v. De La Rama, 201 U.S. 303, 26 S.Ct. 485, 50 L.Ed. 765 (1906) and Simms v. Simms, 175 U.S. 162, 20 S.Ct. 58, 44 L.Ed. 115 (1899). The court concluded that domestic relations cases are within Article III judicial power of the federal courts, but outside the power bestowed by Congress in the diversity statute. Id at 136 n. 4. For a thorough analysis of this perplexing problem see Spindel v. Spindel, 283 F.Supp. 797 (E.D.N.Y.1968). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2002523/ | 822 F.Supp. 356 (1993)
SIERRA CLUB, et al., Plaintiffs,
v.
Mike ESPY,[1] In His Official Capacity as Secretary of Agriculture, et al., Defendants.
Civ. A. No. L-85-69-CA.
United States District Court, E.D. Texas, Lufkin Division.
May 12, 1993.
*357 *358 Douglas Honnold, Denver, CO, Edward Fritz, Dallas, TX, Barbara Lowe, Houston, TX, Larry Daves, San Antonio, TX, for plaintiffs.
Daniel Bowen, Temple, TX, Ruth Harris Yeager, Tyler, TX, Wells D. Burgess, Jean Mellor, Katheryn Toffenetti, Washington, DC, for defendants.
MEMORANDUM OPINION AND ORDER
ROBERT M. PARKER, Chief Judge.
Before the Court are: the Fourth Amended Complaint of Plaintiff Texas Committee on Natural Resources (TCONR), which has been interpreted by the Court as containing what amounts to a series of motionsfor a preliminary injunction, a declaratory judgment, and a permanent injunction prohibiting a number of imminent timber sales by Defendants in the Texas National Forests, as well as all future sales authorizing even-aged timber management;[2] Federal Defendants' Motion for Summary Judgment on TCONR's Even-Aged Claimsin response to the above motions; the Report and Recommendation of the Honorable Judith K. Guthrie, United States Magistrate Judge for the Eastern District of Texas, on the controversy presented by the above motions; Plaintiffs' Objections to Magistrate's Proposed Findings and Recommendations on Even-Aged Claim, along with Plaintiffs' Urgent Motion for Injunction Under 5 U.S.C. § 705; Federal Defendants' Response to Plaintiffs' Objections to Report and Recommendation of the United States Magistrate Judge as Modified for Clerical Error. Also before the Court are: Defendants' Request for Clarification of Order;[3] and Plaintiffs' Response to Request for Clarification.
The Court has read and reread the thorough work of the Magistrate Judge. Yet, for the following reasons, the Plaintiffs' motion for preliminary injunction must be granted as to Defendants' even-aged management agendapending final resolution of the plaintiffs' claims for declaratory relief and permanent injunction under the National Forest Management Act (NFMA) and the National Environmental Policy Act (NEPA).[4]
I. Background
The current controversy over timber sales dates back to the May 20, 1987, Record of *359 Decision by the Regional Forester promulgating the Final Land and Resource Management Plan, National Forests and Grasslands Texas, and its accompanying Final Environmental Impact Statement. Regarding the NFMA in particular, Plaintiffs contend that the defendants' even-aged logging agenda is illegal in that the agency has not complied with the constraints on the Service's choice of even-aged management techniques contained in that Act. And regarding the NEPA, Plaintiffs argue that the defendants' even-aged logging agenda is illegal in that determinations in favor of even-aged management were made without sufficient examination of various procedural requirements of the NEPA.
In an earlier proceeding, the Court refused to waive the (administrative) exhaustion requirement relative to Plaintiffs' NEPA and NFMA claims. Sierra Club v. Lyng, 694 F.Supp. 1256 (E.D.Tex.1988). At that time, it was uncontested that the appeal by TCONR of the LRMP-FEIS was pending before the Forest Service. Plaintiffs argued that the Court should waive the exhaustion requirement because of the irreparable harm that would occur between then and the time the administrative appeal was decided; and the plaintiffs said that the Forest Service might delay the resolution of the administrative appeal to prolong its current tree cutting practices. At the Court's 1988 hearing, Wells D. Burgess, Esq., counsel for the defendants, assured the Court "that the appeal would most likely be decided in eight months from the hearing date (by September 15, 1988), but no longer than fifteen months from the hearing date (by April 15, 1989)." Lyng, id., 694 F.Supp. at 1258. The Court concluded that the anticipated delay was not so unreasonable as to warrant the Court's intervention at that point in the administrative proceedings. Lyng, id.
However, in 1989, the Chief of the Forest Service announced that there would be no administrative decision on Plaintiffs' LRMP-FEIS appeal because a new LRMP and FEIS were required in view of the constraints imposed by this Court's Endangered Species Act decision in Sierra Club v. Lyng, 694 F.Supp. 1260 (E.D.Tex.1988), aff'd in part, vacated in part, and remanded by Sierra Club v. Yeutter, 926 F.2d 429 (5th Cir. 1991).[5]
*360 The NFMA and NEPA-oriented timber sale controversy has since been referred to the Honorable Judith K. Guthrie, United States Magistrate Judge, for a report and recommendation. The Report and Recommendation of the United States Magistrate Judge concludes that Plaintiffs are not entitled to certain sorts of judicial review of their claims against the defendants' logging agenda because Plaintiffs have not exhausted their administrative remedies (despite the fact that there is no way for them to do so). See Report and Recommendation of the United States Magistrate Judge, pp. 3-4. According to the Magistrate Judge's Report and Recommendation: "[t]hrough no fault of their own, Plaintiffs have been unable to exhaust administrative remedies so that they can directly attack the 1987 LRMP-FEIS on judicial review." Further, the Report and Recommendation of the United States Magistrate Judge concludes that Plaintiffs are foreclosed from judicially attacking the Environmental Assessments (EAs) used to justify the proposed sales as invalid because based on an allegedly invalid 1987 LRMP-FEIS:
"The validity of the `goal' was established in the LRMP-FEIS and may not be litigated here. Rather, the question for this Court is whether an EA contains facts showing that the proposed harvest is a rational means of achieving that goal." Id. at p. 4 (emphasis added).[6]
Subsequent to receipt of the Report and Recommendation of the United States Magistrate Judge and the parties' responses thereto, the Court allowed the defendants to proceed with a limited number of seed-tree cuts in the nine scheduled timber sales. Order of February 9, 1993. The outstanding question, resolved in this Memorandum Opinion and Order, is whether the Court should enjoin the defendants from continuing with their even-aged logging agenda.
II. Standard of Review
The Court must waive the administrative exhaustion requirement in this case because of the excessive "delay" in (or, rather, the absolute shut-down of) Defendants' administrative appeal apparatus. Under *361 both their general equitable powers and powers granted under the APA, courts are to insure that statutory rights are not denied by agency action or inaction. While it is generally accepted that federal agencies are entitled to a presumption of good faith and regularity in arriving at their decisions, Sierra Club v. Costle, 657 F.2d 298, 334 (D.C.Cir. 1981), the presumption is not irrebuttable. Federal courts would be abdicating their Constitutional role were they to simply "rubber stamp" agency decisions in the face of complex issues, rather than insuring that such decisions accord with clear congressional mandates. As Judge J. Skelly Wright so aptly put it: "[T]he judicial role ... is to see that important legislative purposes, heralded in the halls of Congress, are not lost or misdirected in the vast hallways of the federal bureaucracy." Calvert Cliffs' Coordinating Committee v. United States Atomic Energy Comm'n, 449 F.2d 1109, 1111 (D.C.Cir. 1971).
The APA requires that the agency undertake a "thorough, probing, in-depth review" of its actions in light of, or relative to controlling, substantive, statutory requirements. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971) (Marshall, J.). This APA-delineated standard of review insures that the agency's ultimate actions actually accord with the substantive "outer boundaries" or limitations marked by the NFMA, for example. See e.g., Texas Committee on Natural Resources v. Bergland, 573 F.2d 201, 210 (5th Cir.) ("The NFMA is a set of outer boundaries within which the Forest Service must work. Within its parameters, the management decision belongs to the agency and should not be second-guessed by a court.") (emphasis added), cert. denied, 439 U.S. 966, 99 S.Ct. 455, 58 L.Ed.2d 425 (1978).
The APA, at 5 U.S.C. § 706, provides in relevant part that "the reviewing court shall decide all relevant questions of law, interpret Constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action." In particular, the reviewing court is to hold unlawful and set aside agency action, findings, and conclusions when they are found to be: arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; or in excess of statutory jurisdiction, authority, or limitations, or short of statutory right. 5 U.S.C. § 706(2)(A) & (C).
Moreover, the United States Supreme Court has ruled that ambiguous statutes are to be deemed provisions of policy discretion (i.e., for the agency), rather than of purely legal interpretation (i.e., for the courts) and are thus properly "deferred" by courts to agencies for (reasonable) policymaking. Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (Stevens, J.). Accord Presley v. Etowah County Commission, ___ U.S. ___, ___, 112 S.Ct. 820, 831, 117 L.Ed.2d 51 (1992) (Kennedy, J.); United States v. Alaska, ___ U.S. ___, 112 S.Ct. 1606, 118 L.Ed.2d 222 (1992) (White, J.). Chevron thus dictates that it is the clarity of the substantive statutory law, not merely the existence of it, which separates law and policy and accordingly dictates the appropriate degree of judicial review under the APA. See Chevron, supra, 467 U.S. at 843 n. 9, 104 S.Ct. at 2781 n. 9 ("The judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent" by "employing traditional tools of statutory construction") (citations omitted); id. at 865-866, 104 S.Ct. at 2792-2793 (but, in the absence of clear statutory directives, courts must "respect legitimate policy choices" of government actors who are reviewable by a political constituency). See also Marbury v. Madison, 5 U.S. (1 Cranch) 137, 166, 2 L.Ed. 60 (1803) (Marshall, C.J.) (asserting that the courts' reviewing power is triggered "where a specific duty is assigned by law...."; and that discretionary acts by the executive "are only politically examinable").[7]
*362 Thus, the applicable standard of review for ambiguous statutory directives, as well as for largely discretionary procedural statutory decisions under the NFMA and the NEPA, is whether the challenged action is reasonable (i.e., relative to goals, or ends, themselves within the substantive "outer boundaries" of the NFMA). Chevron, supra, 467 U.S. at 865, 104 S.Ct. at 2792 ("an agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration's views of wise policy to inform its judgments."); Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 59, 103 S.Ct. 2856, 2875, 77 L.Ed.2d 443 (1984) (Rehnquist, J., concurring in part and dissenting in part) ("As long as the agency remains within the bounds established by Congress, it is entitled to assess administrative records and evaluate priorities in light of the philosophy of the administration."); Citizens for Environmental Quality v. United States, 731 F.Supp. 970, 983 (D.Colo.1989) (holding that, in reviewing the Forest Service's procedural decisions, a court should consider whether such are reasonable) (citing Portela v. Pierce, 650 F.2d 210, 213 (9th Cir.1981)).
III. Preliminary Injunction Analysis
Injunctive relief is the most common form of remedy sought by citizens suing federal agencies in environmental cases. In such cases, courts have traditionally exercised considerable equitable discretion in deciding whether to issue injunctions. See e.g., Citizens for Environmental Quality v. United States, 731 F.Supp. 970, 996-997 (D.Colo. 1989) ("The issuance of an injunction is governed by traditional principles of equity. [] The granting or refusing of injunctive relief rests in the sound discretion of the court.") (citing: Stringer v. United States, 471 F.2d 381, 384 (5th Cir.), cert. denied, 412 U.S. 943, 93 S.Ct. 2775, 37 L.Ed.2d 404 (1973); and Goldammer v. Fay, 326 F.2d 268 (10th Cir. 1964), for respective propositions).
In purely private-party civil suits, courts have long balanced the claims and potential injuries (harms) to each party before deciding whether to enjoin challenged conduct. Such balancing of claims and harms remains appropriate in citizen suits against federal agencies on allegations of the agencies' non-compliance with unambiguous statutory prescriptions. But in this latter area, traditional injunctive relief analysis also gives rise to separation of powers and checks and balances considerations. See generally Michael D. Axline, Constitutional Implications of Injunctive Relief Against Federal Agencies in Environmental Cases, 12 HARV. ENVTL.L.REV. 1, 1 (1988).[8]
Under the traditional framework of preliminary injunction analysis, Plaintiffs must establish four factors in order to obtain relief:
(1) a substantial likelihood of success on the merits;
(2) a substantial threat of irreparable harm absent an injunction;
(3) that the irreparable harm threatened is greater than that caused by the injunction; and
*363 (4) that the public interest would be served by the injunction.
See generally Sierra Club v. Lyng, 694 F.Supp. 1260, 1277 (E.D.Tex.1988). If irreparable injury to the environment is sufficiently likely, the balance of harms will usually favor the issuance of an injunction to protect the environment. Amoco Production Co. v. Gambell, 480 U.S. 531, 542, 107 S.Ct. 1396, 1402, 94 L.Ed.2d 542 (1986) (White, J.).
A. Plaintiffs Enjoy a Substantial Likelihood of Success on Their NFMA and NEPA Claims
The Court is convinced that Plaintiffs are substantially likely to succeed on their NFMA and NEPA claims against Defendants' even-aged logging agenda.
1. The NFMA Sets Unambiguous, Substantive Boundaries on Agency Discretion
It appears quite likely that Plaintiffs will succeed in demonstrating that Defendants have failed to fulfill the latter's substantive NFMA obligations. Defendants have taken the extreme, and untenable, position that there is no provision of the APA or the NFMA allowing the plaintiffs to judicially challenge actual, on-the-ground practices of the Forest Service. Transcript of March 3, 1993, Motion Hearing Before the Honorable Robert M. Parker, Chief Judge for the Eastern District of Texas, p. 14 (statement of Wells D. Burgess, Esq.) (hereinafter Hearing Transcript). Defendants have argued to the Court that the NFMA is a mere "planning statute," i.e., with no substantive component (in contrast, they say, to the Endangered Species Act (ESA), 16 U.S.C. § 1531 et seq., for example). Hearing Transcript, p. 16 (statement of Wells Burgess, Esq.).[9] However, the NFMA does erect unambiguous, substantive "outer boundaries" on the Forest Service's discretion in terms of forest management valuations (i.e., the setting of agency goals, or "ends") and concomitant, consistent practices.
The NFMA addresses wildlife management, for example, on several levels. Some of the Act's provisions are general, and others are far more specific. Id. at 291. This Court is presently most concerned with the quite specific NFMA requirement that even-aged cuts such as those scheduled by Defendants "are carried out in a manner consistent with the protection of soil, watershed, fish, wildlife, recreation, and aesthetic resources, and the regeneration of the timber resource." 16 U.S.C. § 1604(g)(3)(F)(v) (emphasis added). The mandate of this Section is amplified by the NFMA's Section 1604(g)(3)(B), which states that the Service Planners must manage to "provide for diversity of plant and animal communities based on the suitability and capability of the specific land area in order to meet overall multiple-use objectives."[10]
Defendants Seem to Have "Managed" to Turn Congress' NFMA-Envisioned Exception Into Their Rule
Specifically, the NFMA mandates that the Service "insure," by means of regulation promulgation, this essential end: that even-aged management practices be used in the national forests only when "consistent with the protection of soil, watershed, fish, wildlife, recreation, and aesthetic resources, and the regeneration of the timber resource." 16 U.S.C. § 1604(g)(3)(F)(v) (emphasis added). The NFMA thus contemplates that even-aged management techniques will be *364 used only in exceptional circumstances. Yet, the defendants appear to utilize even-aged management logging as if it comprised the statutory "rule," rather than the exception. The Service in fact utilizes uneven-aged management techniques very rarely i.e., as an exception to even-aged logging. In the ESA-oriented Lyng decision, it was noted that the 1987 Plan provided for one hundred percent (100%) of the timber base of the East Texas National Forests, or eighty-two (82%) of the entire forest was under even-aged management.[11] And still today, with respect to the nine scheduled sales at issue: of the 6,027 acres scheduled to be cut, only 587 acres, or less than ten percent (selection (uneven-aged) management methods.
The mandate of Section 1604(g)(3)(F)(v) could not be more clearly expressed: actions speak louder than words. No amount of means or words of "consideration" can take the place of the statutorily-compelled end or action that the Service must perform. The NFMA clearly requires the Service's Planners to treat the natural resources of our national forests as controlling, co-equal factors in forest management in particular, as substantive limitations on the particular logging practices that can take place in these forests. That is why the Act's Section 1604(g)(3)(F)(v) states that the Service can use even-aged logging practices only in the exceptional circumstance i.e., only when such is insured to be consistent with the protection of the forests' natural resources. And this statutory duty clearly requires protection of the entire biological community not of one species (e.g., the Red-Cockaded Woodpecker) alone. Indeed, the imposition by this provision of such a broad and stringent duty to protect reflects the truism that the monoculture created by clear-cutting and resultant even-aged management techniques is contrary to NFMA-mandated bio-diversity. See 16 U.S.C. § 1604(g)(3)(B).
History illuminates the NFMA's clear substantive mandate.[12] During the sixteen (16) years following enactment of the Multiple-Use Sustained Yield Act of 1960 (MUSY), Congress imposed only one major substantive restriction on the Forest Service's discretion in wildlife matters, and that was the one reflected in the Endangered Species Act of 1973 (ESA), at 16 U.S.C. § 1536(a)(2).[13] While the ESA set out mandatory constraints on all land use decisions that might adversely affect the habitat of a threatened or endangered species, it extended protection only to those species specifically listed as threatened or endangered by the Secretary of the Interior. As to all other forest species, the Service possessed virtually absolute, unreviewable managerial discretion.
Public outcry over the use, or abuse, of that discretion, if not the broad agency discretion *365 itself, led Congress to intervene in the Service's operationsfirst by way of oversight, and later, in 1976, through enactment of the NFMA. See generally Charles F. Wilkinson and H. Michael Anderson, Land and Resource Planning in the National Forests, 64 OR.L.REV. 1, 290-291 (1985) (hereinafter Wilkinson & Anderson, Land and Resource Planning).[14] The public and Congress were concerned that, left to its own essentially unbridled devices, the Service would manage the national forests as mere monocultural "tree farms."[15]
When Senator Hubert H. Humphrey introduced legislation calling for the national forests to be managed on a better balanced, ecologically sound basis, he said:
The days have ended when the forest may be viewed only as trees and trees viewed only as timber. The soil and water, the grasses and the shrubs, the fish and the wildlife, and the beauty that is the forest must become integral parts of resource managers' thinking and actions.
FOREST AND RANGELAND MANAGEMENT: JOINT HEARINGS BEFORE THE SUBCOMM. ON ENVIRONMENT, SOIL CONSERVATION, AND FORESTRY OF THE SENATE COMM. ON AGRICULTURE AND FORESTRY AND THE SUBCOMM. ON THE ENVIRONMENT AND LAND RESOURCES OF THE SENATE COMM. ON INTERIOR AND INSULAR AFFAIRS, 94th Cong., 2d Sess., at p. 260 (Comm. Print 1976) (statement of Senator Humphrey), quoted in Wilkinson & Anderson, Land and Resource Planning, supra, at 292. The actual discretion for which the defendants argue amounts to nothing less than a bald attempt at exorbitant agency self-aggrandizement i.e., an effort to return to "the bad old days" decried by Senator Humphrey, among others, which were supposed to be left behind by the NFMA.[16]
The Court cannot "rubber stamp" the clearly overly-restrictive interpretation of the NFMA the defendants advocate; "[t]his argument does not meet the express requirement of the statute." Presley v. Etowah County Commission, ___ U.S. ___, ___-___, 112 S.Ct. 820, 831-832 (1992) (Kennedy, J.). In this case, like in Presley (a Section 5, Voting Rights Act (42 U.S.C. § 1973c) case):
The United States urges that despite our understanding of the language of § 5, *366 we should defer to its administrative construction of the provision. We have recognized that "the construction placed upon the [Voting Rights] Act by the Attorney General ... is entitled to considerable deference." [] But the principle has its limits. Deference does not mean acquiescence. As in other contexts in which we defer to an administrative interpretation of a statute, we do so only if Congress has not expressed its intent with respect to the question, and then only if the administrative interpretation is reasonable. [] Because the first of these conditions is not satisfied in the cases before us we do not defer to the Attorney General's interpretation of the Act.
Id. at ___, 112 S.Ct. at 831 (quotation and citations omitted). Cf. United States v. Alaska, ___ U.S. ___, ___, 112 S.Ct. 1606, 1611, 118 L.Ed.2d 222 (1992) (White, J.) ("on its face," Section 10 of the Rivers and Harbors Appropriation Act of 1899 (RHA) (30 Stat. 1151, 33 U.S.C. § 403), "appears to give the Secretary unlimited discretion to grant or deny a permit for construction of a structure such as the one at issue in this case. The Reports of the Senate and House Committees charged with making recommendations on the Act contain no hint of whether the drafters sought to vest in the Secretary the apparently unbridled authority the plain language of the statute seems to suggest. See H.R.Rep. No. 1826, 55th Cong., 3d Sess. (1899); S.Rep. No. 1686, 55th Cong., 3d Sess. (1899).") (emphasis added).
TCONR does stand a substantial likelihood of success in its attempt to demonstrate, through the window of this Court's waiver of the exhaustion requirement, that Defendants have not satisfied Section 1604(g)(3)(F)(v)'s unambiguous requirement of actual forest resource protection. Magistrate Judge Guthrie's Report and Recommendation contains telling information and analysis. For example, her Report and Recommendation states: "Ecosystems of old growth forests are not explicitly considered in the EAs as an element of diversity....". Report and Recommendation of the United States Magistrate Judge, p. 44. And "[d]isruption and diminution of inner forest species is explicitly acknowledged in the [harvesting activity "consideration"] chart showing that the pileated woodpecker and the fox squirrel decline under even-age." Id. at pp. 44-45 (citing Admin.Rec., Vol. III, Compartment 93, EA at 38). Magistrate Judge Guthrie in fact concludes that a reader of the relevant timber sale EAs is "made aware of the unfavorable impacts on species of the mature forest." Id. at p. 56. Still other agency-"forgottens" are substantially likely to amount to a lack of Section 1604(g)(3)(F)(v) protection. See Report and Recommendation of the United States Magistrate Judge, p. 44 ("There is not an inventory of the flora and fauna in each compartment."); id. at p. 41 ("in Compartment 93, only one of the eight stated needs in the proposal pertains to habitat per se (Adm.Rec. Vol. III, Comp. 93 EA at 3) and the Decision Notice and FONSI does not adopt habitat as a need, although creation of early successional habitats required by some species of plants and animals is mentioned as one of nine reasons for selection of the chosen Alternative. Adm.Rec. Vol. III, Comp. 93 DN and FONSI at 2.") (emphasis added here).[17] The failure to comply with the *367 NFMA's substantive, forest resource protection requirement is clearly an act "not in accordance with law," or "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." See 5 U.S.C. § 706(2)(A) & (C).
2. The NEPA Does Not Sanction Shallow, Circular, Conclusory, or Simply Unreasonable Agency "Considerations"
The NFMA incorporates the NEPA's procedures. 16 U.S.C. § 1604(g)(1). The plaintiffs stand a substantial likelihood of success on their NEPA claims against Defendants' even-aged logging agenda, as well.
The NEPA requires that an agency charged with preparing an environmental impact statement take a "hard look" at the environmental consequences of the project, and that it disclose the risks, present the alternatives, and respond with reasoned analysis to the opinions of reputable scientists concerning the hazards. See Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 2730 n. 21, 49 L.Ed.2d 576 (1976) (Powell, J.). Accord Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350-351, 109 S.Ct. 1835, 1845-1846, 104 L.Ed.2d 351 (1989) (Stevens, J.).
The plaintiffs have not yet been able to receive judicial review of the 1987 LRMP-FEIS to which the scheduled sales at issue are tiered. As Magistrate Judge Guthrie stated, this is troubling because "to the extent it has been judicially reviewed, the LRMP has been found severely wanting with respect to the Red-Cockaded Woodpecker, a species that was ostensibly protected and provided for by the Plan." Report and Recommendation of the United States Magistrate Judge, p. 12 (citing Sierra Club v. Lyng, 694 F.Supp. 1260 (E.D.Tex.1988)). Still, Magistrate Judge Guthrie did review the EAs (and findings of no significant impact (FONSIs)) concerning the scheduled timber sales. And this Court has now waived the exhaustion of administrative remedies requirement relative to the plaintiffs' NFMA and NEPA claims against Defendants.
Under the NEPA, the Court has a duty to acknowledge the agency's presumed expertise in making its environmental impact findings and in deciding ultimate issues as to whether or not to proceed with a particular forest management operation. But the Court must nonetheless safeguard the congressionally-envisioned procedural process. The Court must insure that the Service, in conducting its NEPA-required evaluations, meaningfully assesses the foreseeable environmental effects of a proposed action.
For example, in Citizens for Environmental Quality v. United States, the Colorado district court recognized that the NEPA requires that the Forest Service give a meaningful consideration to alternatives which not only emphasize differing factors, but lead to differing results. 731 F.Supp. 970, 989 (D.Colo.1989) ("Considerations of alternatives which lead to similar results is not sufficient under NEPA and [36 C.F.R. § 219.12(f)]"). Specifically, the court agreed with the citizen-plaintiffs and intervenors, that the Rio Grande Forest Plan failed to formulate a meaningfully "broad range" of alternatives in *368 violation of Forest Service regulation 36 C.F.R. § 219.12(f). Id. at 989.[18] The Forest Planners ostensibly considered nine alternatives before arriving at the LRMP for the Rio Grande National Forest. But the court found from the record that it appeared the Forest Service had first established timber production goals, and then formulated its "alternatives" in a manner guaranteeing that the Service Planners would reach those goals. The court held that this result-driven (biased) decisionmaking process prevented the Service from establishing a legitimately broad range of reasonable alternatives as required by the relevant statutory and regulatory scheme. Id. at 989-990. In short, Chief Colorado District Court Judge Sherman Finesilver was not persuaded that the Service adequately considered each of the alternatives which were developed during the planning, or consideration process:
From its evaluation, it is clear that the Forest Service gave a "hard look" only to those alternatives which increased timber production. Alternatives which reduced timber production were "readily dismissed." The Forest Service thus considered only alternatives which led to a similar result increased timber production. This does not constitute a consideration of a broad range of alternatives as contemplated by § 219.12(f). While nothing prevents the Forest Service from adopting an alternative which increases timber production, this does not permit the Forest Service to seriously consider only those alternatives which provide for increased timber production, to the exclusion of alternatives which do not have the same end result.
Id. at 990 (emphasis added).
It seems likely that the defendants performed a similarly skewed "consideration" of alternatives in this case, as Plaintiffs contend. The Service here purports to have considered only four tree cutting options for the Compartments at issue (one of which was the essentially non-alternative (because of southern pine beetle infestation) of "no action"). See Report and Recommendation of the United States Magistrate Judge, p. 26 ("Four different alternatives were considered in most of the EAs: number one was No Action; Number Two was selection (uneven-age); three and four were various combinations of even-age."). And even the consideration of these four alternatives appears obviously and extremely cursory.
The Court is convinced that the plaintiffs stand a substantial likelihood of demonstrating that the defendants have "swept" some significant environmental considerations and criticisms of its scheduled even-aged management actions "under the rug," or failed to give good faith, meaningful consideration to foreseeable, statutorily important, environmental consequences of its planned even-aged logging activities. What has been addressed above with respect to the NFMA is important in regard to the NEPA as well: the defendants somehow choose NFMA-exceptional even-aged management techniques as a rule. Meanwhile, as the Report and Recommendation of the United States Magistrate Judge states: "Ecosystems of old growth forests are not explicitly considered in the EAs as an element of diversity; the EAs do not inform the public that there are types of ecosystems that exist only in old growth." Report and Recommendation of the United States Magistrate Judge, p. 44. And while "many" aspects of diversity were apparently considered, "[d]isruption and diminution of inner forest species is explicitly acknowledged in the [harvesting activity "consideration"] chart showing that the pileated woodpecker and the fox squirrel decline under even-age." Id. at pp. 44-45 (citing Admin.Rec., Vol. III, Compartment 93, EA at 38); see also id. at p. 45 (while acknowledging that "the FEIS to which the EAs are tiered contains a fuller discussion of diversity," also noting that it still does not reference old growth ecosystems per se). Moreover, "[t]here is not an inventory of the flora and fauna in each compartment." Report *369 and Recommendation of the United States Magistrate Judge, p. 44. See also id. at p. 41 ("in Compartment 93, only one of the eight stated needs in the proposal pertains to habitat per se (Adm.Rec. Vol. III, Comp. 93 EA at 3) and the Decision Notice and FONSI does not adopt habitat as a need, although creation of early successional habitats required by some species of plants and animals is mentioned as one of nine reasons for selection of the chosen alternative. Adm.Rec. Vol. III, Comp. 93 DN and FONSI at 2.") (emphasis added here). Compare Sabine River Authority v. Department of the Interior, 951 F.2d 669, 676-677 (5th Cir.) (recognizing: (1) the purpose of the NEPA is to insure that federal agencies "carefully consider detailed information" concerning significant environmental impacts; and (2) the NEPA commands that the agency cannot proceed with an action until it has taken a "hard look" at foreseeable environmental consequences), cert. denied, ___ U.S. ___, 113 S.Ct. 75, 121 L.Ed.2d 40 (1992) (emphasis added). Compare also Seattle Audubon Society v. Moseley, 798 F.Supp. 1473, 1483 (W.D.Wash.1992) (agency must in fact consider the environmental effects of its actions on all species i.e., it must plan for the entire biological community) (citing Seattle Audubon Society v. Evans, 952 F.2d 297, 301 (9th Cir.1991)).
In sum: Defendants fail to appreciate that the NFMA's Section 1604(g)(3)(F)(v) places clear, substantive limits on their logging activities no matter how "considered" and this failure on the part of Defendants is itself "a clear error of judgment." See March v. Oregon Natural Resources Council, 490 U.S. 360, 378, 109 S.Ct. 1851, 1861, 104 L.Ed.2d 377 (1989) (Stevens, J.) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971) (Marshall, J.)). Certainly in light of this failure on the part of Defendants to recognize their actual managerial duties, the above-referenced, administrative record(ed) appearances of cursory and/or biased planning confirm that it is indeed substantially likely that Plaintiffs will prevail on their NEPA claims, as well as their NFMA claims against Defendants' even-aged logging agenda.
B. Substantial Threat of Irreparable Harm Absent Injunction
As noted above, environmental injury, by its nature, can seldom be adequately remedied by money damages and is often permanent or at least of long duration i.e., irreparable. If such injury is sufficiently likely, therefore, the balance of harms will usually favor the issuance of an injunction to protect the environment. Amoco Production Co. v. Village of Gambell, Alaska, 480 U.S. 531, 545, 107 S.Ct. 1396, 1404, 94 L.Ed.2d 542 (1987) (White, J.). In that the immediately impending timber sales at issue appear substantially likely to violate the NFMA's substantive prescriptions about natural resource valuations, or priorities, the sales pose a quite substantial threat of irreparably injuring the NFMA-protected national forest resources, and thus, the frequent-forest-user plaintiffs. See Memorandum Opinion and Order of July 28, 1992, 1992 WL 501733 (deciding that Plaintiffs are regular visitors to the Texas National Forests and that Defendants' alleged illegal alteration of the esthetics and ecology of these forests would directly harm Plaintiffs).
C. The Irreparable Harm Threatened is Greater Than That Caused by the Injunction
Certainly, in light of the above considerations relative to natural resource values, the irreparable injuries threatened by the defendants' impending even-aged logging are greater than any harm potentially caused by the Court's issuance of a preliminary injunction against such logging activities. This is especially so given that such an injunction will not prevent Defendants from proceeding with their thinning and selection management tree cutting.
D. The Public Interest Would be Served by the Injunction
Bypassing the environmental laws will not fend off the changes transforming the timber industry. See Seattle Audubon Society v. Evans, 771 F.Supp. 1081, 1095-1096 (W.D.Wash.), aff'd, 952 F.2d 297 (9th Cir. *370 1991). And the public in fact has a significant stake in the judiciary insuring that executive agencies duly and faithfully execute the NFMA and the NEPA.
The federal courts have an obligation to insure that the agencies obey valid congressional prescriptions. When a federal court fails to prevent and correct statutory violations by excessively self-aggrandized, runamok executive agencies, Congress' (and the people's) purposes are frustrated, and, more generally, the rule of law itself is subverted.[19] Judicial refusals to enjoin such violations abdicate, for one thing, the courts' affirmative role in the Constitution's system of checks and balances.
Specifically, the people have a substantial interest in this Court insuring that the national forests' resources are protected. As Judge William Dwyer recognized recently:
The records of this and other reported cases show that management of the national forests in compliance with NFMA is vital because other measures are inadequate for many species. * * * The efforts of the Fish and Wildlife Service ("FWS") under the Endangered Species Act ("ESA"), 16 U.S.C. § 1531 et seq., come only after a species is threatened or endangered and fall short of systematic management of a biological community. See 57 Fed.Reg. 1796, 1804. In this sense the national forests offer a last chance.
Seattle Audubon Society v. Moseley, 798 F.Supp. 1484, 1490 (W.D.Wash.1992). Were the Court to abdicate to the agency defendants its Constitutional responsibility to hold them to their duty to enforce unambiguous environmental laws, the Court would effectively "repeal" the oft-times "last chance" environmental protection validly championed into the United States Code by the citizenry. Such a repeal would be especially certain given that (after having secured the Court's deference to it) the defendants have shut down their administrative apparatus. The Court simply will not enlist itself in such a would-be contra-Constitutional "silent coup."
IV. Conclusion and Order
The "balance of harms" test results in a ruling favorable to Plaintiffs. The Court has weighed and considered the public interest and the balance of equities between the parties. And the Court has concluded that Plaintiffs have shown a probability of environmental injury serious enough to outweigh any adverse affects from the issuance of an injunction.
Still, while further even-aged logging by Defendants must be preliminarily enjoined, there is no reason for the Court to enjoin the defendants' thinning and selection cuts. The essence of the Court's equity jurisdiction is to mold decrees to the necessities of each case. Flexibility, rather than rigidity, has distinguished such jurisdiction. Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 591, 88 L.Ed. 754 (1944) (Douglas, J.).
Order
For the foregoing reasons, the following is hereby ORDERED, ADJUDGED AND DECREED:
Plaintiffs' Urgent Motion for Injunction Under 5 U.S.C. § 705 is GRANTED; a preliminary injunction against Defendants' even-aged logging hereby issues;
There exist for judicial resolution genuine issues of material fact regarding (1) whether the even-aged logging activities of Defendants are, as unambiguously required by the NFMA's Section 1604(g)(3)(F)(v), "insured" (i.e., certain) to be consistent with the protection of soil, watershed, fish, wildlife, recreation, and esthetics resources, and the regeneration of the timber resource; and (2) whether, under the NEPA, the defendants' even-aged logging agenda is the product of good faith, meaningful considerations of, or a "hard look" at foreseeable, statutorily important, environmental consequences. Accordingly, Defendants' Motion for Summary Judgment is DENIED.
*371 To the extent it is inconsistent with this Memorandum Opinion and Order, the Report and Recommendation of the Magistrate Judge is REJECTED; it is otherwise ADOPTED.
SO ORDERED.
NOTES
[1] Mike Espy, in his official capacity as Secretary of Agriculture, has been substituted as a defendant (pursuant to Fed.R.Civ.P. 25(d)) for Edward Madigan. Also (pursuant to the same rule), Alan G. Newman, in his official capacity as Forest Supervisor of the National Forests in Texas, United States Forest Service, has been substituted as a defendant for William M. Lannan.
[2] The Texas National Forests include: the Sam Houston National Forest; the Angelina National Forest; the Davy Crockett National Forest; and the Sabine National Forest.
[3] The Order referenced is that entered by the Court on February 9, 1993, which allowed the defendants to proceed with the advertising, sale and implementation of timber contracts on the East Texas National Forests relative to (and only relative to) sales scheduled in Compartment 57 and Compartment 98.
[4] Plaintiffs' claims against the defendants' scheduled timber sales arise under: the NFMA, 16 U.S.C. §§ 1600-1614, and its implementing regulations, 36 C.F.R. Part 219; the NEPA, 42 U.S.C. § 4321 et seq., and its implementing regulations, 40 C.F.R. Parts 1500-1508; and the Administrative Procedure Act (APA), 5 U.S.C. §§ 551-596, §§ 601-612, and §§ 701-706.
The term "even-aged" management includes: "clear-cutting," where all the trees are cut down; "seed-tree cutting," where most of the trees are cut down (i.e., excepting some trees left to naturally seed an area otherwise cut); and "shelterwood cutting," where about double the number of trees are left standing as would be left after a seed-tree cutting expedition. The density of a "shelterwood forest" is fairly lowwith only about 16 trees per acre. And even under seed-tree cutting expeditions, the older trees used initially for natural germination purposes will later be removed. Sierra Club v. Lyng, 694 F.Supp. 1260, 1263 n. 2 (E.D.Tex.1988), aff'd in part, vacated in part, and remanded by Sierra Club v. Yeutter, 926 F.2d 429 (5th Cir.1991). "Unevenaged management," or "selection management," in contrast, consists of selecting individual, particular trees in a given area for cutting.
[5] On April 11, 1989, the Chief of the United States Forest Service notified Plaintiffs that no decision on the merits of their administrative appeal would be forthcoming, after all. The Chief stated that the Forest Plan was being remanded for revision in light of this Court's ruling regarding protection of the Red-Cockaded Woodpecker and constraints on the 200,000 acres to be managed for the endangered bird. The Regional Forester was directed to conduct a new analysis and to change the Texas Forest Plan, completing the ten planning steps required by 36 C.F.R. § 219.12. Defendants expect a final Texas LRMP and EIS to be completed by December, 1993. Federal Defendants' Motion for Summary Judgment on TCONR's Even-Aged Claims, p. 5. Interim management during the time the Forest Plan is being reanalyzed per the Chief's April 11, 1989, Decision is to be governed as follows:
Except as provided below regarding appropriate silvicultural systems, management of the remaining two-thirds of the National Forests will be conducted in accordance with the management prescriptions and standards and guidelines contained in the Forest Plan approved by the Regional Forester on May 20, 1987.
The determination of appropriate silvicultural systems to be used in timber harvesting, including uneven-aged management, is to be accomplished during project-level analysis. Harvesting under the even-aged management system may be done if it is determined to be appropriate to meet the objectives and requirements of the Forest Plan (Forest Service Handbook 1909.12, Chapter 5 [July 1988]). Clearcutting may be selected as the appropriate harvest method if it is determined to be the optimum method. These determinations must be documented as part of the project decisions.
Chief's Decision, at 5. In short, the interim remand Decision provides direction to the Texas Forester to consider uneven-aged management systems during project analysis. Id. at 6.
This Court's review of the logging agenda at issue is guided in particular by Public Law 101-121, Title III, § 312, of October 23, 1989, at 103 Stat. 743, which states:
The Forest Service and Bureau of Land Management are to continue to complete as expeditiously as possible development of their respective Forest Land and Resource Management Plans to meet all applicable statutory requirements. Notwithstanding the date in section 6(c) of the NFMA (16 U.S.C. 1600 [subsec. (c) of this section]), the Forest Service, and the Bureau of Land Management under separate authority, may continue the management of lands within their jurisdiction under existing land and resource management plans pending the completion of new plans. Nothing shall limit judicial review of particular activities on these lands: Provided, however, That there shall be no challenges to any existing plan on the sole basis that the plan in its entirety is outdated, or in the case of the Bureau of Land Management, solely on the basis that the plan does not incorporate information available subsequent to the completion of the existing plan: Provided further, That any and all particular activities to be carried out under existing plans may nevertheless be challenged.
(emphasis added), reprinted in 16 U.S.C.A. § 1604 note (Supp.1993).
[6] The timber sale decisions at issue are "tiered" to the 1987 Land Resource Management Plan Final Environmental Impact Statement (LRMP-FEIS). "Tiering" is the process by which the Forest Service incorporates the broad, programmatic 1987 environmental impact statement and forest management plan for the Texas National Forest by reference, into subsequent and narrower, site-specific documents such as environmental assessments (EAs). 40 C.F.R. § 1508.28, cited in Report and Recommendation of the United States Magistrate Judge, p. 3, n. 2.
An EA is a rough-cut, low budget environmental impact statement designed to show whether a full-fledged environmental impact statement is necessary. Sabine River Authority v. United States Department of the Interior, 951 F.2d 669, 677 (5th Cir.), cert. denied, ___ U.S. ___, 113 S.Ct. 75, 121 L.Ed.2d 40 (1992). As the Magistrate Judge's Report and Recommendation recognizes, EAs are prepared in two circumstances. First, when there is no existing environmental impact statement, an EA is required to determine whether a proposed federal agency action will have a significant impact on the environment. If the action will have a significant effect, an EIS must be prepared. Second, when there is a programmatic EIS in place, an EA is required to determine whether the action is one anticipated in the EIS, consistent with the EIS, and sufficiently explored by the EIS. The EA will come to one of two findings: either that the project requires the preparation of an EIS to detail its environmental impact, or that the project will have no significant impact (a FONSI) necessitating no further study of the environmental consequences which would ordinarily be explored through an EIS. Sabine River Authority, id. (citing cases).
Defendants claim now, in response to the plaintiffs' objections to the Magistrate Judge's Report and Recommendation, that they did not argue for the essentially categorical, non-exhaustion/foreclosure-of-legal-avenues result reached by the Magistrate Judge. See generally Federal Defendants' Response to Plaintiffs' Objections to Report and Recommendation of the U.S. Magistrate Judge; see also Transcript of March 3, 1993, Motion Hearing Before the Honorable Robert M. Parker, Chief Judge for the Eastern District of Texas, p. 4 (statement of Wells D. Burgess, Esq.). The fact remains that this is the conclusion Magistrate Judge Guthrie reached through her review and analysis.
[7] Some, though, contend that by requiring deference to agency legal interpretations in certain instances, Chevron is, categorically, in tension with Marbury. See generally e.g., Cynthia R. Farina, Statutory Interpretation and the Balance of Power in the Administrative State, 89 COLUM.L.REV. 452 (1989); Keith Werhan, The Neoclassical Revival in Administrative Law, 44 ADMIN.L.REV. 567 (1992).
[8] Of course, despite the formally tripartite nature of our Constitutional scheme of government, often referred to as a scheme of separation of powers, there is considerable overlap in functions among the formal governmental branches. These overlaps give rise to a system of "checks and balances" that is supposed to prevent any one branch from exceeding the proper limits of its power or from exercising its power improperly. See Mistretta v. United States, 488 U.S. 361, 380-384, 109 S.Ct. 647, 658-660, 102 L.Ed.2d 714 (1989); JAMES MADISON, THE FEDERALIST No. 48 and THE FEDERALIST No. 51; CHARLES LOUIS DE SECONDAT MONTESQUIEU, THE SPIRIT OF LAWS: A COMPENDIUM TO THE FIRST ENGLISH EDITION xiii, at 72 (D. Carrithers ed. 1977) (first edition published in 1748) ("Evident throughout Montesquieu's political writings is a profound distrust of unchecked political power."). See also Clark Byse, Judicial Review of Administrative Interpretation of Statutes: An Analysis of Chevron's Step Two, 2 ADMIN.L.J. 255, 262 (1988) (finding "merits to both the pro and con arguments relating to Chevron" and counseling "a middle ground which will enable agencies to function effectively and, at the same time, avoid shackling reviewing courts with a single, simple indiscriminate mode of review that would materially hinder them in the performance of their essential control function.").
[9] Defendants follow through by stating that the remedies available to Plaintiffs are simply administrative. And yet, as already noted: after having secured this Court's deference back in 1988 to an administrative review "assured" to be decided "no longer than fifteen months from the hearing date (by April 15, 1989)," the defendants shut down the administrative apparatus they herald. Also, it is certainly not insignificant that the Forest Service's developed practice "of issuing a decision, upholding it on administrative appeal, and then withdrawing it after the plaintiff has filed a lawsuit" has been judicially recognized recently and nearby. See e.g., Sierra Club v. Robertson, 764 F.Supp. 546, 554-555 (W.D.Ark. 1991). See also Seattle Audubon Society v. Moseley, 798 F.Supp. 1494, 1497 (W.D.Wash.1992) ("The record in this case and in SAS v. Evans, 952 F.2d 297 (9th Cir.1991), shows a long history of delays by the Forest Service.").
[10] The remainder of this subsection provides specifically that steps must be taken, to the degree practicable, to preserve "the diversity of tree species similar to that existing in the region controlled by the plan."
[11] Sierra Club v. Lyng, 694 F.Supp. 1260, 1263 n. 2 (E.D.Tex.1988) (citing: Final Environmental Impact Statement, Land and Resource Management Plan National Forests and Grasslands Texas (1987) (Forest Plan EIS), pp. III-14 to III-16; and Final Land and Resource Management Plan National Forests and Grasslands Texas (1987) (Forest Plan), pp. J-2, J-3).
[12] As for the propriety of using legislative history at all, common sense suggests that inquiry benefits from reviewing additional information rather than ignoring it. As Chief Justice Marshall put it, "[w]here the mind labours to discover the design of the legislature, it seizes every thing from which aid can be derived."[ ] Legislative history materials are not generally so misleading that jurists should never employ them in a good faith effort to discern legislative intent. Our precedents demonstrate that the Court's practice of utilizing legislative history reaches well into its past.[ ] We suspect that the practice will likewise reach well into the future.
Wisconsin Public Intervenor v. Mortier, ___ U.S. ___, ___ n. 4, 111 S.Ct. 2476, 2484 n. 4, 115 L.Ed.2d 532 (1991) (White, J.) (quoting Fisher v. Blight, 6 U.S. (2 Cranch) 358, 386, 2 L.Ed. 304 (1805), and citing Wallace v. Parker, 31 U.S. (6 Peters) 680, 687-690, 8 L.Ed. 543 (1832), respectively).
[13] While the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. §§ 4321-4347), and the Sikes Act Extension (SAE) of 1974 (16 U.S.C. §§ 670g-670o) were enacted during this time, neither imposed substantive restrictions upon the Service. There is some substantive component to the Wild Free-Roaming Horses and Burros Act of 1971, 16 U.S.C. §§ 1331-1340. Yet, while this Act applies to the Forest Service, the animals covered by it are mostly on Bureau of Land Management (BLM) lands, not in the national forests. Charles F. Wilkinson and H. Michael Anderson, Land and Resource Planning in the National Forests, 64 OR.L.REV. 1, 290 n. 1547 (1985).
[14] There has been increasing recognition of, and principled discomfort with modern-era agency power. See generally Theodore J. Lowi, Two Roads to Serfdom: Liberalism, Conservatism and Administrative Power, 36 AM.U.L.REV. 295, 295-296 (1987) ("the delegation of broad and undefined discretionary power from the legislature to the executive branch deranges virtually all constitutional relationships and prevents attainment of the constitutional goals of limitation of power, substantive calculability, and procedural calculability."); LOUIS L. JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 320 (1965) ("The availability of judicial review is the necessary condition, psychologically if not logically, of a system of administrative power which purports to be legitimate, or legally valid."); JAMES O. FREEDMAN, CRISIS AND LEGITIMACY: THE ADMINISTRATIVE PROCESS AND AMERICAN GOVERNMENT (1978) (cataloging recognitions by observers of regulatory law that congressional purposes could be undermined not merely by excessive regulation, but also by insufficient regulation or agency hostility to statutory programs); MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOOD AND THE THEORY OF GROUPS (1971) (empirical work suggesting that agencies are sometimes subject to sustained political pressure from regulated industries; the result being termed agency "capture"); PAUL J. QUIRK, INDUSTRY INFLUENCE IN FEDERAL REGULATORY AGENCIES (1981) (general discussion of the agency "capture" phenomenon).
[15] See generally Charles F. Wilkinson and H. Michael Anderson, Land and Resource Planning in the National Forests, id. at 171-173.
[16] Senator Jennings Randolph was another disturbed by the substantial loss of wildlife habitat resulting from the Service's pre-NFMA, even-aged logging-oriented management of the national forests. He introduced his own bill, concurrent with Senator Humphrey's. Randolph's proposal required timber management to be adapted to a conservationist philosophyi.e., preservation of the natural diversity of forest types and species. Randolph sought to prohibit any action in a national forest that would result in significant loss of fish or wildlife habitat. And Senators Lee Metcalf and Dale Bumpers offered an amendment to the NFMA, adopted, which drew heavily on Randolph's bill. (Metcalf and Bumpers were concerned in particular with the Service's practice of converting eastern hardwoods forests to "pine tree farms.") The Metcalf-Bumpers contribution to the NFMA strengthened the objectives of the Humphrey bill; their "diversity" and "overall multiple-use" terminology, for instance, aggressively promotes balanced resource management in national forests. See Wilkerson & Anderson, Land and Resource Planning, supra, at 293-295.
[17] Compare the following findings from Sierra Club v. Lyng, 694 F.Supp. 1260, 1266-1268 (E.D.Tex.1988):
4. Even-aged stands are more susceptible to southern pine beetle infestation.
5. The Forest Service contention that at rotation age there is little difference economically between clear-cutting and selection management is not persuasive to the Court. The Court is persuaded that selection management does have economic advantages resulting from the avoidance of the high cost of regenerating clear-cut areas and the costs associated with the care required by highly vulnerable young stands. Selection management provides a good return during the entire lifetime of the period in question. Taking into consideration the value of money coupled with the high initial expense of even-age management, economic factors mitigate in favor of selection management. In addition to excellent economic returns, a well managed selection forest provides excellent habitat for deer and other wildlife, for recreational users, and is pleasing to the eye of even city dwellers.
6. The sole reason for the Forest Service's adoption of even-age or clear-cutting as the management method of choice is the fact that it is preferred by the timber companies. The Forest Service is an agency that has experienced a high degree of the "revolving door" phenomenon between governmental and private interests. That is to say that the greatest market for government employees in private industry is with the large timber companies. This fact provides an incentive for agency personnel to accommodate industry desires thus, that explains the high level of influence the timber companies have over policies and practices of the Forest Service.
And compare all of the above with: JAMES O. FREEDMAN, CRISIS AND LEGITIMACY: THE ADMINISTRATIVE PROCESS AND AMERICAN GOVERNMENT (1978) (recognizing that congressional purposes can be undermined by insufficient regulation or agency hostility to statutory programs); PAUL J. QUIRK, INDUSTRY INFLUENCE IN FEDERAL REGULATORY AGENCIES (1981) (general discussion of the agency "capture" phenomenon). The Service's argument for the Court to allow the even-aged logging now scheduled must also be considered by the light of the observation of many that the Forest Service has a "habit" of maximizing timber production at the cost of other NFMA statutory factors. See e.g., West Virginia Div. of Izaak Walton League of America, Inc. v. Butz, 522 F.2d 945, 954-955 (4th Cir.1975); John S. Harbison, Hard Times in the Softwoods: Contract Terms, Performance, and Relational Interests in National Forest Timber Sales, 21 ENVTL.L. 863, 879 (1991); George C. Coggins and Michael E. Ward, The Law of Wildlife Management on the Federal Public Lands, 60 OR. L.REV. 59, 133 (1981). WILLIAM DIETRICH, THE FINAL FOREST (1992).
[18] The court construed 36 C.F.R. § 219.12(f):
The interdisciplinary team shall formulate a broad range of reasonable alternatives according to NEPA procedures. The primary goal in formulating alternatives, besides complying with NEPA procedures, is to provide an adequate basis for identifying the alternative that comes nearest to maximizing net public benefits....
[19] As already noted, it was public umbrage over the use (or, abuse) of the virtually unbridled, pre-NFMA Forest Service resource-management discretion that led Congress through enactment of the NFMA to restrain Service operations. Wilkinson & Anderson, Land and Resource Planning, supra, at 290-291. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2444935/ | 645 S.W.2d 845 (1982)
James D. DURHAM, Jr., Appellant,
v.
CANNAN COMMUNICATIONS, INC., Appellee.
No. 07-82-0235-CV.
Court of Appeals of Texas, Amarillo.
December 15, 1982.
Rehearing Denied January 10, 1983.
Second Rehearing Denied February 3, 1983.
*846 Wolfram Law Firm, Frederic M. Wolfram, Amarillo, for appellant.
Gibson, Ochsner & Adkins, Joe Harlan, Amarillo, for appellee.
Before DODSON, COUNTISS and BOYD, JJ.
BOYD, Justice.
Appellant James D. Durham brings this appeal from a summary judgment in favor of appellee Cannan Communications, Inc. Appellant brings eleven grounds of asserted error. For reasons hereinafter set out we reverse the summary judgment and remand the case for further proceedings.
The record reveals that appellant is an attorney at law practicing in the city of Amarillo. The appellee is a corporation owning a television broadcasting station also located in Amarillo. This case involves *847 two broadcasts made on appellee's television station on March 31, 1978. In these broadcasts appellee's newsman reported that after two weeks of personal investigation he had discovered that appellant was connected with a club located just north of Amarillo called the Chicken Ranch, which was used as a front for various activities including orgies and prostitution. In the report the newsman identified his sources for the story as Anna Bryant, owner of the lounge and Eddie Kirkwood, a deputy in the Potter County Sheriff's office. He interviewed both Bryant and Kirkwood on the air and both stated that appellant was involved with the Chicken Ranch. On April 3, 1978 this libel suit was brought by appellant. During pretrial discovery proceedings, appellant deposed, among others, appellee's news director and anchorman Ben Boyett. At numerous times during the deposition, appellant asked Boyett to disclose appellee's sources for the broadcast. While Boyett disclosed the names of those sources who were mentioned in the broadcast he refused to disclose the names of any other sources who may have assisted appellee in its investigations. After a hearing, the trial court refused appellee's motion to compel Boyett to disclose appellee's sources. On the 20th day of April, 1982, the summary judgment in question was rendered on the basis that appellant was a public figure as a matter of law requiring the showing of actual malice on the part of appellee and nothing existed which would raise a fact issue on this question.
Appellant raises eleven points of asserted error. These points of error can be divided into two general areas. First, appellant, in his second point asserts error in denying the motion to compel disclosure of news sources because such answers are discoverable under Tex.R.Civ.P. 186a. Secondly, appellant, in his first and in his third through eleventh points argues error in the granting of the motion for summary judgment. The disposition which we make of points five through eight renders, we think, discussion of the remainder of the points attacking the summary judgment unnecessary. We discuss point two because we think that question relevant to preparation for any trial on the merits.
As stated above, in point two, appellant contends that Rule 186a requires disclosure of certain news sources. This rule states in relevant part:
Any party may take the testimony of any person, including a party, by deposition... for the purpose of discovery or for use as evidence in the action or for both purposes. Unless otherwise ordered by the court as provided by Rule 186b, the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the examining party, including the ... identity and location of persons ... having knowledge of relevant facts. [Emphasis added.]
The trial court is allowed wide latitude in its decision on whether or not to order discovery and its action cannot be set aside unless there is a clear showing of abuse of discretion. Martinez v. Rutledge, 592 S.W.2d 398 (Tex.Civ.App.1979, writ ref'd n.r.e.). The question presented by this point is whether the facts show abuse of discretion on the part of the trial court in refusing to order disclosure.
The burden is upon appellant, as the moving party, to both plead and prove relevancy of information sought and a mere conclusion or assertion is not sufficient. Lueg v. Tewell, 572 S.W.2d 97 (Tex.Civ. App.-Corpus Christi 1978, no writ history). At the time of the broadcast in question, appellee was considering the broadcast of another story concerning appellant's alleged involvement in a conspiracy to fix beef prices. This other story was never broadcast. At the deposition Boyett was extensively questioned in an effort to obtain the names of any sources who may have played a part in the development and investigation of either story. Boyett did reveal the sources named on the air as a source of the broadcast in question. There is no proof or showing to suggest that appellee's sources and actions in the investigation of the beef price fixing story which was never broadcast *848 had any connection or would shed any light on appellant's actions in developing and broadcasting the Chicken Ranch story. Rule 186a was not intended to permit "fishing excursions." Bryan v. General Electric Credit Corp., 553 S.W.2d 415, 419 (Tex.Civ. App.-Houston [1st Dist.] 1977, no writ history). Since the question of Boyett was so broad and pertains to sources for stories other than that in question, we cannot say the record reveals an abuse of discretion in the action of the trial court in overruling the motion in question. Appellant's point of error two is overruled.
Appellant groups and argues his points five through eight together and we will likewise consider them together. In these points appellant argues that the trial court erred in determining as a matter of law that appellant was a public official or public figure and, consequently, it applied the wrong legal standard in determining whether or not appellee's motion for summary judgment should be granted.
Under the standard promulgated by the United States Supreme Court in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), a "public official" plaintiff in an action such as this cannot recover damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with "actual malice, that is, with knowledge that it was false or with reckless disregard of whether it was false or not." Id. at 280, 84 S.Ct. at 726. The New York Times rule, which previously had been restricted in application to "public officials" was extended to cover "public figures" in Curtis Publishing Company v. Butts and its companion case, Associated Press v. Walker, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967).
The basis of appellee's motion for summary judgment, accepted by the trial court, is that appellant was either a "public official" or "public figure" and consequently there could be no recovery unless appellant established by clear and convincing evidence that appellee knowingly broadcast that which it knew to be false or that which it had a strong suspicion was untrue or false or that the broadcasts were made with constitutional malice. It is readily apparent that the initial and crucial question for our decision is whether the trial court correctly classified appellant as a "public official" or "public figure."
I. Public Official
The record shows that about six months before the broadcasts in question appellant was appointed as special counsel for a court of inquiry investigating alleged irregularities in Potter County Fund management. However, the final report of the court of inquiry was returned some two months prior to the broadcasts and at the time of the broadcasts appellant was not a special counsel or on the county payroll. The U.S. Supreme Court has stated that a public official is, among other things, one "who hold [s] governmental office." Gertz v. Welch, 418 U.S. 323, 342, 94 S.Ct. 2997, 3008, 41 L.Ed.2d 789 (1974) [Emphasis added.] Appellee cites Rosenblatt v. Baer, 383 U.S. 75, 87 n. 14, 86 S.Ct. 669, 676 n. 14, 15 L.Ed.2d 597 (1966) for the proposition that a person can still be deemed a public official for the purposes of a defamation suit even if, at the time the offensive statement was made he was no longer serving in his governmental position. While it is true that the Court in Rosenblatt did state that under certain circumstances a person could be deemed a public official even though he no longer held his governmental position at the time that the allegedly defamatory statement was made, we believe even under that case it would be improper to classify appellant as a public official. Rosenblatt concerned statements made by a local newspaper reporter which arguably implied that the plaintiff had mismanaged public funds while he had been in charge of a state-run recreation area. These statements arguably concerned the way in which he conducted his duties while he was an official. In the instant case, the allegedly defamatory statements did not concern the manner in which appellant conducted his official duties as a special prosecutor. Instead, they dealt with his alleged involvement with a house of prostitution. It is true that the courts have recognized a case where a public official is so well-known in his community *849 that the general public automatically associates him with his official position and an express reference to the individual's official capacity is unnecessary and the reference is implied. Foster v. Laredo Newspapers, Inc., 541 S.W.2d 809, 815 (Tex.1976), cert. denied, 429 U.S. 1123, 97 S.Ct. 1160, 51 L.Ed.2d 573. However, we do not believe that the summary judgment evidence would justify such a finding in this case. Since appellant was not a holder of a governmental office at the time of the broadcast in question and since the broadcast did not discuss his performance at duty as a special prosecutor, we conclude he was not a "public official" within the purview of New York Times v. Sullivan and its progeny. We now proceed to consideration of the "public figure" question.
II. Public Figure
In the Gertz case the Supreme Court further elaborated on the "public figure" concept. The plaintiff in that case was an attorney representing a murder victim's family in a civil suit against a police officer who had been convicted of the murder. The magazine article giving rise to the libel suit falsely implied that the plaintiff had a criminal record; was a "Leninist" or a "Communist-fronter," and identified the plaintiff as a former official of a Marxist organization. In making the determination as to whether Gertz was a "public figure" the court observed that "public figures" fall into two general categories:
"In some instances an individual may achieve such pervasive fame or notoriety that he becomes a public figure for all purposes and in all contexts. More commonly, an individual voluntarily injects himself or is drawn into a particular public controversy and thereby becomes a public figure for a limited range of issues. In either case such persons assume special prominence in the resolution of public questions. [Emphasis added]. 418 U.S. 323 at 351, 94 S.Ct. 2997 at 3012, 41 L.Ed.2d 789.
The Court there concluded that that plaintiff did not fit within the category of individuals who are "public figures" for all purposes and in all contexts. It then considered the question whether the plaintiff was a public figure with respect to the particular controversy giving rise to the defamation and concluded:
"In this context it is plain that petitioner was not a public figure ... He plainly did not thrust himself into the vortex of this public issue, nor did he engage the public's attention in an attempt to influence its outcome. [Emphasis added.] 418 U.S. at 352, 94 S.Ct. at 3013.
It thus appears that the question presented for our determination is twofold. Is appellant a "public figure" for all purposes and, if not, is he a "public figure" for the issues discussed in the broadcast in question here?
Examination of the summary judgment evidence reveals that appellant had achieved a certain amount of notoriety in the Amarillo region. However, no evidence indicates his notoriety extended beyond the Amarillo region. While no U.S. Supreme Court opinion deals specifically with the question as to whether a person can be an all-purpose public figure if he has only achieved regional notoriety, the U.S. Court of Appeals for at least two circuits have held an individual can be deemed an all purpose public figure under such circumstances. Walbaum v. Fairchild Publications, Inc., 627 F.2d 1287, 1295 n. 22 (D.C. Cir.1980), cert. denied, 449 U.S. 898, 101 S.Ct. 266, 66 L.Ed.2d 128; Brewer v. Memphis Publishing Co., Inc., 626 F.2d 1238, 1254 (5th Cir.1980), cert. denied, 452 U.S. 962, 101 S.Ct. 3112, 69 L.Ed.2d 973 (1981). However, in order to be classified as such an all-purpose public figure the fame and notoriety must be of a high level. Indeed, the Court of Appeals for the District of Columbia has stated that a person can be an all-purpose public figure only "if he is a `celebrity' his name a `household word' whose ideas and actions the public in fact follows with great interest." Walbaum, 627 F.2d at 1292. This definition seems consistent with the U.S. Supreme Court's approach in Gertz and we adopt it here.
The summary judgment evidence reveals that appellant had achieved some notoriety when he acted as defense counsel for a city *850 patrolman who had been dismissed by the chief of police for various alleged disciplinary infractions. These activities were reported on by the local press. He also achieved some degree of notoriety when he was appointed to serve on a panel investigating the causes of a jail riot in Potter County. The local press reported on both his appointment to the panel and on the report issued by the panel a few months later. However, appellant achieved his greatest notoriety when he was appointed special counsel for a court of inquiry which was charged with investigating alleged irregularities in the way in which Potter County funds were being managed. As a result of information uncovered by the Court of Inquiry, the Potter County Sheriff and a deputy sheriff were indicted. The court of inquiry, in a report written by appellant, also recommended that the Potter County Auditor should be forced to resign for allegedly mismanaging Potter County funds. Appellant's appointment to the court of inquiry and the subsequent actions of the court were regularly reported on by the local news media. Appellant also held a number of press conferences during his tenure as special counselat least two televised press conferences by appellant's own admissionin which he answered questions about the progress of the investigation. Appellant's appointment as special counsel took place about six months prior to appellee's broadcasts. The court of inquiry's final report was issued about two months later. It is apparent, we think, that appellant had achieved notoriety for his activities.[*] However, we believe it is another matter as to whether this evidence indicates that appellant was a celebrity or household name and thus an all-purpose public figure.
While the Supreme Court has never specifically articulated the factors towards which a court should look in determining if an individual is an all-purpose public figure we note that in Gertz the court placed considerable reliance upon the fact that the defendant had presented no proof that the local population had heard of the plaintiff. In determining that he was not a public figure the court used the following language:
We would not lightly assume that a citizen's participation in community and professional affairs rendered him a public figure for all purposes. Absent clear evidence of general fame or notoriety in the community, and pervasive involvement in the affairs of society, an individual should not be deemed a public personality for all aspects of his life. It is preferable to reduce the public figure question to a more meaningful context by looking to the nature and extent of an individual's participation in the particular controversy giving rise to the defamation. [Emphasis added]. 418 U.S. 323 at 351, 94 S.Ct. 2997 at 3012, 41 L.Ed.2d 789.
In this instant case appellee failed to present any proof as to how well known the appellant was in the community. Counter-balancing the lack of proof as to appellant's general fame is the substantial press coverage of appellant's activities, particularly his conduct as special counsel for the court of inquiry, and the appellant's general availability to the press during this period. No one factor is dispositive. Walbaum v. Fairchild, supra at 1295. Weighing all the factors, however, we conclude that the summary judgment evidence is insufficient to establish as a matter of law that appellant was such a celebrity or household name as to make him an all purpose public figure.
While the evidence does not support a finding that appellant was an all-purpose public figure, we must determine if appellant was a limited public figure for the *851 particular issue which was the subject to appellee's allegedly defamatory broadcast, i.e., the controversy surrounding the Chicken Ranch. Commonly, persons are public figures when they "have thrust themselves to the forefront of particular public controversies in order to influence the resolution of issues involved." Gertz, 418 U.S. at 345, 94 S.Ct. at 3009. In this case, appellant was certainly at the forefront of the controversy surrounding the alleged mismanagement of public funds by certain Potter County officials. Indeed, all the record evidence of appellant's predefamation activities concerns his involvement with the controversies involving the management of the county funds. It might well be concluded that appellant was a limited public figure for those particular public controversies.
In this case, however, the broadcast in question concerned appellant's alleged involvement with the Chicken's Ranch. This was a controversy apart from the public controversies in which appellant had thrust himself to the forefront. There is no evidence that appellant's alleged involvement with the Chicken Ranch had anything to do with his legal and investigative activities for the county government. There is no evidence which suggests that appellant had sought publicity over his alleged Chicken Ranch activities or that the Chicken Ranch had become a center of public controversy prior to the time of appellee's broadcast. We therefore conclude that the summary judgment evidence failed to establish that appellant had achieved the status of a public figure within the context of his involvement with the Chicken Ranch.
A private individual who is not a public official or public figure may recover damages from a publisher or broadcaster of a defamatory falsehood as compensation for actual injury upon a showing that the publisher or broadcaster knew or should have known that the defamatory statement was false. Foster v. Laredo Newspapers, Inc., supra. Appellees motion for summary judgment sought to establish the applicability of the New York Times standard to appellant as a "public official" or "public figure" and then to negate the existence of any fact issue with regard to actual malice. Appellee has not asserted a right to summary judgment upon a negligence standard. We therefore find it unnecessary to determine whether the summary judgment proof negates the existence of any fact issues with regard to negligence. Since we have concluded that the summary judgment evidence did not support a finding that as a matter of law that appellant was a "public official" or "public figure" for the purposes of this suit we must reverse the summary judgment rendered. Appellant's points of error five through eight are sustained and the case remanded.
ON MOTIONS FOR REHEARING
Both appellant and appellee have filed motions for rehearing in this case. Appellee asserts this court erred: (1) in reversing the judgment on a point not assigned; (2) in reversing on a point not stated or briefed; (3) in holding that plaintiff was not a public official for defamation purposes; (4) by failing to hold as a matter of law that appellant was both a public official and a public figure; (5) by holding that a news media can be held liable in damages upon a news story accurately reported; (6) by, in its ruling, violating the established rule of law that it is the duty of the appellate court to sustain the judgment of the trial court if that judgment is correct upon any theory of law; and (7) in denying due process by reversing the judgment of the trial court upon grounds not supported by the record. Appellant asserts error on the part of this court in failing to reverse the trial court's denial of appellant's motion to compel answers to disclose names of witnesses.
In advancing its first two assertions, appellee has apparently overlooked points of error five, six and seven of appellant's brief wherein he specifically attacked the finding of the trial court that appellant was a public figure as a matter of law and its counterpoint five wherein appellee asserted that, as a matter of law appellant was a public official and a public figure. Examination of the opinion will reveal that appellant's points of error five through seven *852 were granted and the basis therefore explained.
It must also be remembered that this was an appeal from the granting of a motion for summary judgment. In summary judgment cases the summary judgment granted should be affirmed only if the summary judgment record establishes a right thereto as a matter of law and the movant must establish that it is entitled to the judgment by reason of the matters set out in the motion. Clear Creek Basin Auth. v. City of Houston, 573 S.W.2d 839 (Tex. 1978); Gibbs v. General Motors Corporation, 450 S.W.2d 827, 828 (Tex.1970); Harrington v. Young Men's Christian Association of Houston and Harris County, 452 S.W.2d 423, 424 (Tex.1970). The burden of demonstrating the lack of a genuine issue of material fact is upon the movant and all doubts are resolved against him. Womack v. Allstate Ins. Company, 156 Tex. 467, 296 S.W.2d 233, 235 (1957); Lindley v. Smith, 524 S.W.2d 520, 523 (Tex.Civ.App.-Corpus Christi 1975, no writ); Cox v. Bancoklahoma Agri-Service Corp., 641 S.W.2d 400, 402 (Tex.App.-Amarillo 1982, no writ).
This court did not hold that a news media could be held liable in damages upon a news story accurately reported. We did hold that, under the rules governing the consideration of an appeal from a summary judgment, the summary judgment evidence under consideration in this appeal did not support a finding that, as a matter of law, appellant was a "public official" or "public figure." We pointed out that since appellee had not asserted a right to summary judgment upon a negligence theory it was not necessary to determine if the summary judgment proof negated the existence of any fact issue with regard to negligence. Appellee's motion for rehearing is overruled.
We have also considered appellant's motion for rehearing and we remain convinced our ruling on this point was correct. Appellant's motion for rehearing is also overruled.
NOTES
[*] In our consideration of the public figure question, appellee directs our attention to an April 4, 1978 newspaper story dealing with appellant's alleged involvement with the Chicken Ranch. However, this story was written after appellee had broadcast the story in question. The U.S. Supreme Court has indicated that we should not consider post-defamation press coverage in determining whether or not an individual is a public figure. See Hutchinson v. Proxmire, 443 U.S. 111, 99 S.Ct. 2675, 61 L.Ed.2d 411 (1979). We think this logical. To do otherwise would be to permit the press to turn a person into a public figure by publicizing the defamation itself. We, therefore, cannot consider this story in determining whether or not appellant was a public figure. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2409429/ | 597 S.W.2d 425 (1980)
GREAT AMERICAN MORTGAGE INVESTORS, Appellant,
v.
LOUISVILLE TITLE INSURANCE COMPANY, Guardian Title Company and Max E. Clark, Appellees.
No. 18223.
Court of Civil Appeals of Texas, Fort Worth.
February 28, 1980.
Rehearing Denied April 3, 1980.
*427 Shannon, Gracey, Ratliff & Miller, Kleber C. Miller, Richard G. Williams and Daniel L. Lowry, Fort Worth, for appellant.
Biggers, Beasley, Amerine & Earle, Larry F. Amerine, Rick W. Hightower, and Jeffrey A. Hage, Dallas, for Louisville Title Ins. Co.
Meier & Keller, William C. Meier and Wallace T. Keller, Euless, for Guardian Title Co.
George J. Petrovich, Jr., Law Offices of Max E. Clark, and Lawrence E. Meyers, Fort Worth, for Max E. Clark.
OPINION
SPURLOCK, Justice.
This is an appeal from a take nothing judgment rendered in a suit alleging the tort of negligent misrepresentation. Great American Mortgage Investors (GAMI), plaintiffs below, brought this action against defendants below, Louisville Title Insurance Company, Guardian Title Company, and Max E. Clark, a title attorney and agent for both title companies, seeking damages allegedly sustained as a result of GAMI's reliance on misrepresentations in a mortgagee's information letter (MIL) and title policy binder which erroneously stated that there were no deed restrictions covering the property upon which GAMI was financing the construction of an apartment complex.
We affirm.
Because numerous parties and a rather complex loan transaction are involved in this case, it is helpful to identify the parties and briefly discuss some of the pertinent facts.
Ridglea Park Corporation was a real estate development company. Through its president, Pat Reed, it planned to build three apartment complexes in the Ridglea Park Addition to the City of Fort Worth. Prior to the construction of any apartments, an application was made to change the zoning of this area from single family to a classification allowing apartments. A compromise with adjoining landowners was reached allowing the construction of apartments *428 which complied with a number of agreed restrictions. These restrictions were prepared and filed of record in 1964 covering the entire 40 acre addition. They include a required number of square feet per dwelling unit, a 75% masonry requirement, a height restriction of two stories, a landscaping restriction, and a restriction upon the number of dwelling units allowable in one building.
Ridglea Park planned to build its three complexes one at a time. The first two complexes were completed and will no longer be noticed. This case deals with the construction of the third complex. Ridglea Park needed interim and long term financing. Through a number of mortgage brokers GAMI, a mortgage lending institution, with its principal place of business in Atlanta, Georgia, became interested in the project. Before GAMI would make a loan it required a local bank to act as a lead lender. The Wynnewood State Bank in Dallas became the lead lender and executed the loan documents. GAMI funded the loan and construction began.
Before the complex was completed, several adjacent land owners obtained an injunction preventing Ridglea Park from any further construction which violated the deed restrictions. In order to complete construction Ridglea Park had to demolish some of the buildings which were three stories high in violation of the height restriction, and alter the exterior of other buildings to make them 75% masonry. It was also necessary to acquire more land to have the requisite number of square feet of land per dwelling unit. The expense of compliance with the restrictions and other cost overruns caused Ridglea Park to default. The Bank foreclosed on the property. GAMI bought the Bank's interest in the project and the Bank conveyed title to the project to GAMI, together with all of the Bank's choses in action arising from its involvement therein.
Succinctly stated GAMI's position in the trial court was that before the loan was closed the Bank had requested that the defendants provide it with title information on the land upon which the complex was to be built. It is undisputed that the defendants have an agency relationship with each other concerning the acts complained of in this case. The defendants sent the Bank title information in a mortgagee's information letter (MIL) dated May 4, 1971 covering the lots upon which the complex was to be built. This May 4, MIL stated that there were no restrictions on these lots except those recorded in volume 3955, page 420 of the Deed Records, Tarrant County, Texas. Thus it revealed that there were restrictions recorded.
In addition to its first lien on the lots upon which the complex was to be built, the Bank wanted a second lien on some additional lots for extra security. The defendants issued a second MIL dated May 12, 1971 which covered the lots for both the first and second liens. The May 12th MIL, in the space provided for deed restrictions, stated "none". On May 17, 1971 a title policy binder was issued stating there were no deed restrictions of record. Max Clark explained that the typist who prepared the May 12th MIL mistakenly typed "none" rather than "none, except for those recorded in volume 3955, page 420 of the Deed Records, Tarrant County, Texas", as found on the May 4th MIL. He further explained that this error was perpetuated because the title binder was prepared from the May 12th MIL.
GAMI claimed it relied on misrepresentations of the May 12th MIL and the title binder. It asserted that had it known of the restrictions, it would have had an architect inspect the construction plans to determine whether the contemplated construction would violate the restrictions before construction began. GAMI maintains that it first learned of the restrictions when Ridglea Park was enjoined from continuing to violate them. GAMI notes that by this time it was too late as the damage had already occurred.
By its answers to the thirty special issues submitted by the trial court, the jury found that the building project had violated the restrictions; and that the May 12th MIL and the title binder both stated that there *429 were no restrictions. However, the jury failed to find that either of these representations was material. The jury also found that both the May 12th MIL and the title binder negligently misrepresented that there were no restrictions. The jury failed to find that the Bank had justifiably relied on either of these misrepresentations. It found that the Bank knew of the restrictions before the loan was closed. The jury found that GAMI justifiably relied on the misrepresentation in the May 12th MIL, but failed to find that the MIL was intended for GAMI's benefit and guidance. The jury also found that GAMI justifiably relied on the title binder and that the binder was intended for GAMI's benefit and guidance. Additionally, the jury failed to find that GAMI knew of the restrictions before the loan was closed.
Concerning damages the jury failed to find that the Bank was damaged. It found that GAMI was damaged as a result of its reliance on the misrepresentation in the title binder. It found that $160,000.00, the cost of bringing the project into compliance with the restrictions, would reasonably compensate GAMI for damages resulting from the violation of the restrictions.
Both GAMI and the defendants moved for judgment on the verdict. The trial court granted the defendants' motion and rendered a judgment that GAMI take nothing. In order to facilitate clarity in the consideration of GAMI's points of error, it is helpful to first address two issues raised by the points and arguments thereunder, and which apply generally to GAMI's allegations of error. The first are the threshold questions of whether the tort of negligent misrepresentation is recognized in Texas, and, if so, whether it applies to title insurers. Negligent misrepresentation is a rather recent development in tort law and has been described in the Restatement (Second) of Torts § 552 (1977), as follows:
"TOPIC 3. NEGLIGENT MISREPRESENTATION
"§ 552. Information Negligently Supplied for the Guidance of Others
"(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
"(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered
"(a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and
"(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction.
"(3) The liability of one who is under a public duty to give the information extends to loss suffered by any of the class of persons for whose benefit the duty is created, in any of the transactions in which it is intended to protect them."
An action for negligent misrepresentation has been recognized in Texas. Rosenthal v. Blum, 529 S.W.2d 102, 104 (Tex.Civ.App. Waco 1975, writ ref'd n. r. e.). That court stated:
"Most jurisdictions, and particularly the more modern decisions, have recognized a cause of action on negligent misrepresentation. 37 Am.Jur.2d 277, Fraud And Deceit, § 209. 32 A.L.R.2d 232. It constitutes a specie of remedial fraud in Texas. Shatterproof Glass Corporation v. James, (Tex.Civ.App.Fort Worth, 1971, writ ref. n. r. e.) 466 S.W.2d 873, 879; Cameron v. First Nat. Bank, (Tex.Civ. App.Galveston, 1917, writ ref.) 194 S.W. 469, 476; Durham v. Wichita Mill & Elevator Co., (Tex.Civ.App.Fort Worth, 1918, writ ref.) 202 S.W. 138, 140. Cf. American Indemnity Co. v. Ernst & Ernst, (Tex.Civ.App.Waco, 1937, writ. *430 ref.) 106 S.W.2d 763. Its elements are set forth in Tentative Draft No. 12, Restatement of Torts (2nd ed., 1966), § 552, under Topic 3 of that work, ...."
The court in Rosenthal further stated that the defendant supplied false information to the plaintiff for plaintiff's guidance in his business transaction. The court concluded that the plaintiff stated a cause of action holding as follows:
"[T]hat the defendant failed to exercise reasonable care in several particulars in the gathering of the information, that the plaintiff relied on the information in a transaction the defendant intended it to influence; and that the plaintiff thereby suffered pecuniary loss. These pleadings state a cause of action on negligent representation." (Emphasis ours.)
Texas recognizes a cause of action for negligent misrepresentation. In this case the defendants contend that an action for negligent misrepresentation does not apply to title companies. They contend the rights, duties, and obligations of a title insurer are to be measured by the provisions of the MILs and title binder in question. They conclude that GAMI's only cause of action, if any, is for breach of contract. Defendants also assert that title insurers have no duty to reveal deed restrictions or title defects because they are not title abstractors and do not have the duty owed by an attorney who examines a title to report the condition of the title to his client. A title policy is a contract of indemnity based upon the terms of the policy.
The same contentions were made and rejected in the case of Lane v. Security Title & Trust Company, 382 S.W.2d 326 (Tex.Civ. App.-Dallas 1964, writ ref'd. n. r. e.). Here as in Lane the cause of action against the insurer was in tort rather than on a title binder as a contract. Also in Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183 (Tex.1977), the Texas Supreme Court reversed the court of civil appeals, holding that a title insurer can be liable for fraud in misrepresenting the state of the title. A close reading of the supreme court's opinion reveals that the tort of negligent misrepresentation is included within the ambit of the decision. The court of civil appeals, 537 S.W.2d 55 (Tex.Civ.App.Corpus Christi 1976), had held that the failure of a title insurer to show a pipeline easement as an exception to its policy would not support a cause of action because the title insurer had no duty to disclose any such encumbrance.
It is well settled that even though one does not have a duty to act, if one acts voluntarily, he must do so with due care and is generally liable for negligence. In our case whether the title insurer had the duty to disclose the existence of the deed restrictions is immaterial because the May 12, MIL and the title binder actually represented that no deed restrictions were in existence. Having made the representation the title insurer is held to the standard of reasonable care and may under the proper circumstances be liable in tort for damages caused by a negligent misrepresentation. In other words, under the proper circumstances the tort of negligent misrepresentation can apply to title insurers.
The second issue which prefaces detailed analysis of GAMI's points of error is what legal relationship GAMI had with the Bank regarding this transaction. The defendants contend that GAMI and the Bank were joint adventurers or agents, each for the other. GAMI characterizes the relationship as at most buyer-seller and/or trustee-beneficiary. The characterization of the relationship between GAMI and the Bank is crucial to the disposition of this case.
Before entering into this transaction GAMI and the Bank executed an agreement called a Participation Agreement. This agreement is largely determinative of their relationship concerning this transaction. The agreement provides that the Bank would actually make the loan to Ridglea Park in its name, but would sell GAMI an undivided interest in the loan. GAMI in fact purchased a 95% undivided interest in the loan. The bank retained the remaining 5%. The agreement states that the Bank could, after notice to and approval of GAMI, and would, upon GAMI's request, take any action authorized by the construction *431 loan agreement or other loan documents.
The agreement was that GAMI would fund the first 95% of the loan before the Bank would fund the remaining 5%. While the loan was being funded the Bank, pursuant to the agreement, was to hold the loan documents for GAMI's benefit. After full funding the Bank was to hold the loan documents for the benefit of itself and GAMI without preference or priority, and without recourse on the Bank. Further the agreement provided that the Bank was to account for and pay to GAMI when received, GAMI's share of all collections determined according to GAMI's interest in the loan at the time of the collection.
GAMI agreed to bear losses up to its participation, with the Bank being liable only up to the funds it had advanced on its interest in the loan. After the loan had been fully funded, the agreement provided that losses were to be shared ratably according to the interest of each participant.
A GAMI loan officer, Thomas Roan, testified on behalf of GAMI concerning its agreement and relationship with the Bank. He testified to the effect that finding a local lender to act as a "lead lender" was a condition precedent to making the loan. He defined "lead lender" as a lending institution that actually closes the loan in its name and services the loan. GAMI needed a local lender because it did not have a permit to do business in Texas and because it wanted a lead lender with experience in local real estate customs and laws. In choosing the Bank, GAMI wanted the Bank to do all things necessary to set up the loan and actually put it in operation including making, processing, funding, and payment of money under the loan. Also the Bank was to obtain title letters and title binders, and to make sure no codes or similar restrictions were violated. The Bank was to act as any prudent lender would act in making the loan.
From the evidence outlined above we must determine what legal relationship GAMI had with the Bank. First we consider whether a joint adventure was established. It is well settled that the establishment of a joint adventure requires (1) community of interest; (2) joint right of control; and (3) sharing of profits, losses, and costs or expenses. Brown v. Cole, 155 Tex. 624, 291 S.W.2d 704 (1956). Because GAMI and the Bank were co-owners of the loan we find it clear that they had a community of interest in the loan. The fact that the Bank was to act as if it were the lender together with GAMI's right to approve the Bank's actions in our opinion establishes a joint right of control. The participation agreement expressly provides for the sharing of profits and losses. Thus we conclude that the evidence established as a matter of law that GAMI and the Bank were joint adventurers.
If we are in error in holding that as a matter of law there was a joint adventure relationship, there still would exist the question of whether there was an agency relationship between GAMI and the Bank. Agency has been defined in 2 Tex.Jur.2d Agency § 1, p. 436 (1959) as follows:
"Agency is defined as the legal relation, founded on the express or implied contract of the parties or else created by law, by virtue of which one party, the agent, is authorized to act for the other party, who is the principal. More specifically, an agent is one who is authorized by another to transact business or manage some affair for him, and to render to him an accounting of such transaction."
As noted above, the participation agreement expressly provided that upon GAMI's request the Bank would act on its behalf. Further the conduct of the parties reveals that the Bank acted for GAMI in processing, closing, and managing the loan. Thus from this and other evidence in the record we conclude that as a matter of law the Bank was GAMI's agent.
By its first point of error GAMI contends that it is entitled to judgment on the verdict having established its negligent misrepresentation cause of action as a matter of law. Its position is that because the jury found that there was a misrepresentation in *432 the title binder; that the information in the binder was intended for GAMI's benefit and guidance; that it justifiably relied on the information in the binder without knowing of the restrictions; and that it was damaged as a result of its reliance; therefore, it is entitled to judgment as a matter of law.
The defendants contend that GAMI is not entitled to judgment because the jury found that the Bank knew of the deed restrictions before the closing of the loan. It is the defendant's position that since the evidence established that GAMI and the Bank were joint adventurers or agents as a matter of law, the trial court properly imputed the Bank's knowledge to GAMI. Thus the defendants conclude that the trial court properly rendered its judgment because with knowledge of the restrictions imputed, GAMI could not have justifiably relied on the misrepresentation that no restrictions existed, nor could it have been damaged by the misrepresentation.
The jury found that the Bank knew of the deed restrictions before the loan was closed. GAMI contends there is no evidence to support this finding. Our review of the record indicates that the evidence established that the Bank received the May 4th MIL which disclosed that there were deed restrictions recorded. Therefore, the Bank had actual notice of the restrictions and the jury's answer to this issue is supported by the evidence.
Having concluded that GAMI and the Bank were joint adventurers and/or that the Bank was GAMI's agent, we recognize the well settled rule that the knowledge of one adventurer concerning the adventure is imputed to the other adventurers. Heinrich v. Wharton County Livestock, Inc., 557 S.W.2d 830 (Tex.Civ. App.Corpus Christi 1977, writ ref'd n. r. e.). Likewise the knowledge of an agent relating to information, acts and events within the scope of the agency is imputed to the principal. Community S. and L. Ass'n of F. v. Lubbock S. and L. Ass'n of L., 509 S.W.2d 448 (Tex.Civ.App.Amarillo 1974, writ dism'd). We conclude that as a matter of law the Bank's knowledge of the deed restrictions is imputed to GAMI and that it could not have justifiably relied on the misrepresentation, nor could it have been damaged thereby.
GAMI complains that the trial court erred in that no special issue concerning agency was submitted to the jury, and further that the evidence did not establish agency as a matter of law. A review of GAMI's objection to the court's charge at the time of trial reveals that it waived any error regarding the failure of the court to submit such an issue because no objection was made concerning this point. However, even if GAMI had properly preserved the point for review, it is well settled that where as here the evidence has established a fact as a matter of law, no special issue concerning that fact should be submitted. 3 McDonald, Texas Civil Practice, § 12.08-c (1970). Therefore, the trial court did not err in failing to submit the issue of agency because it was established by the evidence as a matter of law. We overrule points of error numbers three and four.
GAMI's final points of error, numbers five, six, and seven, concern special issues numbers twenty-nine and thirty. They are as follows:
"Special Issue No. 29:
"Do you find from a preponderance of the evidence that Wynnewood State Bank, through its authorized officers and agents, knew of the restrictive covenants on the Ridglea Park land on or before the interim construction loan was closed?
"Answer `We do' or `We do not'.
"Answer: We do.
"Special Issue No. 30:
"Do you find from a preponderance of the evidence that Great American Mortgage Investors, through its authorized officers and agents, knew of the restrictive covenants on the Ridglea Park Land on or before the interim construction loan was closed?
"Answer `We do' or `We do not'.
"Answer. We do not."
*433 GAMI complains the trial court erred in ignoring the jury's answer to special issue number thirty, and therefore erred in rendering judgment for the defendants. Having held that the trial court properly concluded that as a matter of law the Bank's knowledge of the restriction, as found by the jury in special issue number twenty-nine, is imputed to GAMI, it did not err in ignoring issue no. thirty. This point of error is overruled.
GAMI further contends that the trial court erred in submitting issue twenty-nine for three reasons. First, it contends there is no evidence that any of the Bank's officers or agents had actual knowledge of the restrictions. Having already discussed that there is evidence supporting the jury's finding on this issue, this contention is overruled without further consideration. Second, GAMI complains that special issue number twenty-nine as worded inquires into an unlimited time in the past and is therefore error. This contention is without merit and is overruled.
GAMI's third contention is that issue twenty-nine is an inferential rebuttal issue. GAMI contends that whether the Bank had knowledge of the restrictions before the loan was closed is merely a shade or an element of the issue on whether the Bank justifiably relied on the misrepresentation in the title binder. It thus concludes that the issue on knowledge is an inferential rebuttal issue. GAMI correctly states the general rule that inferential rebuttals are not to be submitted. Tex.R.Civ.P. 277.
A reason for the rule prohibiting the submission of inferential rebuttal issues was stated in Select Ins. Co. v. Boucher, 561 S.W.2d 474 (Tex.1978). It is that inferential rebuttals disprove a factual element relied upon by the opposing party by establishing the truth of a fact theory inconsistent with the fact relied upon. Additionally the prohibition against submission or inferential rebuttals is designed to avoid confusion and conflicting answers to the special issues submitted.
Applying the above to the facts of this case, we agree with GAMI that issue number twenty-nine is an inferential rebuttal issue and should not have been submitted. However, we must determine whether this error was calculated to cause and probably did cause the rendition of an improper verdict under Tex.R.Civ.P. 434. GAMI's position is that submission of the issue, assuming that the Bank was its agent, caused an irreconcilable conflict with other issues in the case, particularly issue number thirty.
On its face it appears that issue number twenty-nine, finding that the Bank knew of the restrictions, conflicts with issue number thirty, where the jury failed to find GAMI knew of the restrictions, if the Bank is considered as GAMI's agent. However, the trial court did not instruct the jury on the issue of agency. Thus the jury was never informed of the possibility that the Bank might be GAMI's agent or co-adventurer. There is no indication the jury considered the possibility that the knowledge of the Bank would be imputed to GAMI. The facts as found by the jury are obviously consistent. It found that the Bank knew of the restrictions and therefore failed to find that the Bank had justifiably relied on the misrepresentation or was damaged thereby. Also consistent are the findings that GAMI relied on the misrepresentation, that it was damaged thereby, and the failure to find that it knew of the restrictions.
From the above we conclude that there is no irreconcilable conflict or confusion presented by the trial court's submission of this case or the jury's answers to the issues. Where, as here, it is the application of the law that creates an apparent conflict rather than the method of submission, there is no basis for reversal. We hold that the error in submitting an inferential rebuttal is harmless. We further conclude that the correct result was reached by the trial court.
In view of our holdings it is not necessary to consider the numerous cross-points of error presented by the appellees. However, we have severally considered each cross-point of error and each is overruled. Likewise, *434 even though every point of error may have not been individually discussed, each has been severally considered and overruled.
The judgment of the trial court is affirmed.
OPINION ON MOTION FOR REHEARING
By its motion for rehearing GAMI has directed our attention to matters contained in a supplemental transcript. It consists of a question from the jury to the trial judge made during deliberation, and the trial judge's response. They are as follows:
"Judge Young
"Special Issue # 30
"We do not consider GAMI officers and
agents to include those that are employed
by Wynnewood since issue # 29 covers
Wynnewoods officers and agents.
"Right?
"R B Brown
"LADIES AND GENTLEMEN OF THE
JURY:
"Replying to the attached note, you
will consider Special Issues 29 and 30
separately and independent of each other.
"Please retain your note and this reply.
"Ardell M. Young
"Judge presiding"
In view of the above it appears that the statements in our original opinion that there was no indication that the jury was informed of the possibility or considered the possibility that the Bank might be GAMI's agent or co-adventurer are incorrect. However, we conclude that this will not affect the result in this case.
There was no objection to the trial court's instruction. Therefore error therein, if any, is waived. GAMI claims that we have erred in concluding that the trial court's submission of the issue of knowledge of the restrictions in special issues nos. 29 and 30 was harmless error. Obviously, because the Bank's knowledge was imputed to GAMI as a matter of law, the issue is adverse to GAMI. However, this is not the test for harmless error under Rule 434. The test is whether the error was calculated to cause and probably caused the rendition of an improper verdict. We are still of the opinion that the verdict and the judgment rendered in this case are proper.
The motion for rehearing is overruled. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1777153/ | 695 S.W.2d 88 (1985)
Charles Leon METTERS, Appellant,
v.
The STATE of Texas, Appellee.
No. 01-84-0285-CR.
Court of Appeals of Texas, Houston (1st Dist.).
July 3, 1985.
Walter J. Pink, Houston, for appellant.
*89 John B. Holmes, Jr., Harris County Dist. Atty., J. Harvey Hudson, Harris County Asst. Dist. Atty., Houston, for appellee.
Before WARREN, DUGGAN and LEVY, JJ.
OPINION
WARREN, Justice.
A jury convicted appellant of aggravated robbery; the trial court found the enhancement allegation to be true and assessed his punishment at 18 years confinement. We affirm.
In his first ground of error, appellant alleges that the trial court erred in overruling his motion to strike the jury panel. After the jury had been sworn, the defense counsel dictated the following motion into the record:
At this time, Your Honor, comes now the defendant, Chester Metters, by and through his attorney of record, Walter Pink, and would respectfully object to the jury as it is situated at this time.
We would like to point out to the judge that the state has unconstitutionally, systematically excluded all blacks from the jury panel. There were some eight from the array. I did not use any of my strikes for blacks, as such. The state has used eight of its ten strikes for blacks improperly and it is an attempt to eliminate the minority.
The defendant is black and we would like the record to reflect that the state used its peremptory challenges. We would ask that this jury panel be struck and another panel brought forth.
The prosecutor responded to this motion as follows:
There is no evidence whatsoever, not even one scintilla of evidence that there was any systematic exclusion of any group based on race, and I would object to counsel saying it in those terms on the record, and I would at this time object to the record reflecting that.
The trial court denied the motion to strike the jury panel. Appellant later made a motion for new trial on the same basis, and the trial court overruled the motion for new trial.
Mere allegations of the use of peremptory challenges to strike qualified blacks from a jury venire is not sufficient to establish prohibited systematic exclusion of blacks in selection of a petit jury. Evans v. State, 622 S.W.2d 866 (Tex.Crim.App.1981); Cano v. State, 663 S.W.2d 598 (Tex.App.Austin 1983, no pet.); see also Swain v. Alabama, 380 U.S. 202, 85 S. Ct. 824, 13 L. Ed. 2d 759 (1965). Appellant argues that Swain and its progeny should be overruled or reinterpreted to allow a criminal defendant to make a prima facie case of unconstitutional discrimination by the state in its peremptory strikes by showing that the prosecutor struck every member of a minority group on the venire. However, as an intermediate court, we are bound to follow the rules enunciated by the Court of Criminal Appeals. Tex.Code Crim.P.Ann. art. 4.04, sec. 2 (Vernon Supp.1985). Appellant's first ground of error is overruled.
In his second ground of error, appellant alleges that the trial court erred in overruling his objection to the use of the enhancement offense. The state originally alleged two enhancement paragraphs, but it abandoned the first enhancement paragraph at the time of trial. Appellant objected to the use of the second enhancement paragraph as follows:
At this time, Your Honor, the defendant would respectfully ask first to quash the second paragraph in that the defendant did not sign a waiver of trial by jury.... We ask the motion to quash because he failed to sign a waiver of trial by jury in that particular case as required by law. We would ask that that would be quashed....
When the state offered into evidence at the punishment hearing appellant's "pen packet" for the enhancement offense, appellant again objected:
Again, we would renew our objection to the one count that is in the indictment. We renew our objection that there was no waiver of a jury trial in that one.
*90 The trial court overruled appellant's objection. Appellant offered no evidence in support of his motion to quash the enhancement paragraph.
The judgment from the enhancement offense contains the following recitation:
The defendant, in person and in writing, in open court, having waived his right of trial by jury (such waiver being with the consent and approval of the court and now entered of record in the minutes of the court, and such waiver being with the consent and approval of the District Attorney in writing and filed in the papers of this cause), waived arraignment and formal reading of the indictment, and in open court, pleaded guilty to the charge contained in the indictment.
The recitations in a judgment are presumed to reflect the events of the trial as they actually occurred, and a defendant who alleges that a judgment erroneously shows a jury waiver must present evidence to support his claim. Breazeale v. State, 683 S.W.2d 446, 451 (Tex.Crim.App.1985) (op. on reh'g). Appellant's second ground of error is overruled.
In his third ground of error, appellant alleges that the trial court erred in admitting into evidence a pen packet containing judgments and sentences in a 1958 arson conviction and a 1959 theft conviction out of Dallas County. Appellant objected to the introduction of these documents on the basis that he was not represented by counsel at the sentencing hearings in either case.
Both judgments reflect that appellant was represented by counsel at the guilt-in-nocence stage of each trial. However, neither sentence reflects representation by counsel or waiver of counsel at the punishment stage at either trial. The order revoking probation for the arson charges reflects that appellant was represented by counsel at that hearing.
A defendant has the burden of presenting proof that he did not have counsel at a sentencing hearing where the judgment recites that he was represented by counsel at the guilt-innocence stage of the trial, and the judgment and sentence were entered on the same day after a plea of guilty. Turner v. State, 486 S.W.2d 797 (Tex.Crim.App.1972). In both prior offenses included in the exhibit in the instant case, the judgment and sentence were entered on the same day after pleas of guilty, and appellant failed to prove that he was not represented by counsel at the punishment hearing in either case. Appellant's third ground of error is overruled.
The judgment of the trial court is affirmed.
Publish. Tex.R.Crim.App. P. 207.
LEVY, Justice, concurring.
In concurring with the result reached by the majority, I feel compelled to point out an injustice in the law as it now stands.
Swain v. Alabama, 380 U.S. 202, 85 S. Ct. 824, 13 L. Ed. 2d 759 (1965), has established the necessary proof of racially motivated peremptory strikes to be extraordinarily demanding and possibly insurmountable, to the extent that many legal scholars assert that this established standard perpetuates both systematic exclusion of blacks (and perhaps other identifiable ethnic groups) from the judicial process and severely inhibits fair and impartial trials, thereby offending the Equal Protection and Due Process Clauses of the Constitution of the United States. See, Thiel v. Southern Pacific Co., 328 U.S. 217, 66 S. Ct. 984, 90 L. Ed. 1181 (1946); Smith v. Texas, 311 U.S. 128, 61 S. Ct. 164, 85 L. Ed. 84 (1940); The Jury System: New Methods for Reducing Prejudice (National Jury Project 1975) pp. 6, 10-11. Although the prohibitions of the Equal Protection Clause go no further than the "invidious" discrimination, Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 489, 75 S. Ct. 461, 465, 99 L. Ed. 563 (1955), our superior courts have said that that point has not yet been reached, or at least that the proof offered in each case has not been sufficient. It would appear that, in the conflict between this Clause and the procedural right of the prosecutor to strike venire members peremptorily, the constitutional *91 guarantee has been relegated to a subordinate positionat least for now.
Appellant's argument that Swain and its progeny should be overruled or reinterpreted in order to allow a criminal defendant to make a prima facie case of unconstitutional discrimination by the State in its peremptory strikesby showing that the prosecutor struck, in a single case, every member of a minority group on the venire panelis not without justification. Where the prosecutor strikes all members of the venire who are members of a recognizable ethnic group, logic would certainly allow, if not require, the presumption to arise that such striking amounts to systematic exclusion of that group, even if on an ad hoc basis, and thereby shift the burden to the prosecutor, upon timely objection, to justify his action on non-racial grounds or have the jury panel quashed. See Willis v. Zant, 720 F.2d 1212 (11th Cir.1983). Reliance on the good faith of a prosecutor entrusted with participating in the selection of jurors for the administration of criminal justice is not in itself an investiture of discriminatory power offensive to due process. Representing as it does a living principle, "due process" is not confined within a permanent catalog of what may at a given time be deemed the limits or the essentials of fundamental rights. The right of a prosecutor to peremptory challenges is so established today that it leads to the easy assumption that it is fundamental to the protection of life and liberty and therefore a necessary ingredient of due process of law. But we should not confuse the familiar with the necessary. "Due Process" is, perhaps, the least frozen concept of our law, the least confined to history, and the most absorptive of powerful social standards of a progressive society.
As an intermediate court, however, we are bound to follow the rules and precedent enunciated by the United States Supreme Court and the Texas Court of Criminal Appeals. Tex.Code Crim.P.Ann. art. 4.04, sec. 2 (Vernon Supp.1985). Those courts have established the test for proving that venire members were struck solely for racial reasons, and appellant in the case at bar has not met his burden of statistical or other proof on that issue. The proof required by Swain and its progeny is indeed demanding, but not theoretically impossible. I must therefore reluctantly agree that appellant's first ground of error must be overruled.
Publish. Tex.R.Crim.App. P. 207. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2412032/ | 839 S.W.2d 866 (1992)
PRUDENTIAL INSURANCE COMPANY OF AMERICA, Appellant,
v.
JEFFERSON ASSOCIATES, LTD. & F.B. Goldman, Appellees.
No. 3-90-217-CV.
Court of Appeals of Texas, Austin.
August 12, 1992.
Rehearing Overruled October 14, 1992.
*868 John Hill, Jr., Liddell, Sapp, Zivley, Hill & La Boon, Austin, for appellant.
Douglass D. Hearne, Don W. Kothmann, Hearne, Knolle, Lewallen, Livingston & Holcomb, Austin, for appellees.
Before CARROLL, C.J., and ABOUSSIE and KIDD, JJ.
KIDD, Justice.
This case arises from the sale of the Jefferson Building, a four-story commercial office building in Austin, Travis County, Texas. In late 1983, the Prudential Insurance Company of America (Prudential), after becoming, through foreclosure, the owner of the Jefferson Building, proposed to sell it to Jefferson Associates, a limited partnership, and F.B. Goldman (collectively, Goldman). Two years after the sale was consummated, Goldman discovered that the building contained asbestos. Alleging that the presence of asbestos significantly depreciated the value of the building, Goldman brought suit against Prudential. Following a jury verdict and judgment awarding Goldman actual and exemplary damages, Prudential brings this appeal. We affirm.
THE CONTROVERSY
The Jefferson Building was constructed in 1972 and was situated in a prime neighborhood in Austin, Texas, suitable for medical office buildings. It commanded high rents and experienced favorable occupancy rates. In 1976 Prudential, having provided construction financing, acquired the building through foreclosure. In late 1983, Prudential decided to sell the Jefferson Building. Goldman successfully bid on the building. Before the purchase was completed, Goldman inspected the property himself. In May 1984, he signed a contract to purchase the Jefferson Building "as is" for $7,150,000.
*869 In 1986, after the purchase, Goldman discovered that the building contained asbestos, which lowered the building's market value. Goldman filed suit against Prudential for misrepresentation under the Deceptive Trade PracticesComsumer Protection Act (DTPA), Tex.Bus. & Com.Code Ann. §§ 17.41-.63 (1987 & Supp.1992), fraudulent concealment, and other grounds related to the nondisclosure of the asbestos.[1] Trial to a jury included several weeks of testimony. Upon conclusion of the evidence, the parties agreed to submit liability in the case on a general charge. Therefore, the liability issue was submitted in one question:
Question: Do you find from a preponderance of the evidence that the plaintiffs should be entitled to recover damages from the defendant as the result of any wrongful conduct by the defendant?
Answer: We do.
The jury also found: (1) Prudential engaged in wrongful conduct; (2) Goldman sustained actual damages in the amount of $6,023,993.03; (3) Prudential's wrongful conduct was done with conscious indifference to Goldman's rights, with gross negligence, and with actual awareness that such conduct was wrongful; and (4) Goldman was entitled to exemplary damages of $14,300,000. The district court rendered final judgment, including prejudgment interest and attorney's fees, on the verdict.
Prudential appeals by nine points of error. In five points, Prudential attacks the legal and factual sufficiency of the evidence to support the jury's verdict. Prudential also attacks, in single points, the admission of certain evidence, the trial court's failure to grant a remittitur, and, in its final two points, the awarding of prejudgment interest and attorney's fees.
DISCUSSION
LiabilityWrongful Conduct
In points of error one and two, Prudential attacks the jury's liability finding that Prudential engaged in wrongful conduct. In point one, Prudential contends that there is no evidence to support the jury finding; in point two, Prudential contends that the finding is "against the great weight and preponderance of the evidence."[2] The standards of review are well settled for reviewing jury findings. In reviewing a "no evidence" challenge, we consider only the evidence and reasonable inferences drawn therefrom which, when viewed in their most favorable light, support the jury's finding. The appellate court must disregard all evidence and inferences to the contrary. Aim v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex.1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). Any probative evidence supporting the finding is sufficient to overrule the point of error. See also Robert Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex.L.Rev. 361, 364 (1960).
We will sustain a challenge that the finding is factually insufficient to support the verdict only if, after reviewing the entire record, the evidence is too weak to support the finding or the finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See, e.g., Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951). See Powers and Ratliff, supra, at 525.
We note at the outset that the parties agreed to submit the liability portion of this case on a general charge. Thus, in reviewing the evidence, we are required to uphold the jury's liability finding if there is sufficient proof on any theory of recovery pleaded by Goldman.
*870 A. Events Leading to the Sale of the Jefferson Building
Goldman introduced evidence that, in the late 1970's, Prudential's corporate headquarters determined that asbestos was a dangerous material which should not be used in the fireproofing of any of Prudential's buildings. Because of this knowledge, Prudential's Director of Architecture, A.E. Zielinski, testified that Prudential would not accept plans or specifications for any of Prudential's buildings if the plans and specifications included asbestos fireproofing. By 1978, Prudential became concerned about asbestos in its existing buildings. In 1979, Mr. Arnold F. Rebholz,[3] who was in charge of the leasing and management of Prudential's real-estate portfolio at corporate headquarters, became aware of an asbestos issue involving one of Prudential's office buildings in Jacksonville, Florida. IBM, the anchor tenant, objected to the presence of asbestos in the building and eventually vacated the premises. In a confidential memo to his corporate division, Rebholz compared the economic consequences of asbestos contamination with those following the outbreak of Legionnaires' Disease in a downtown Philadelphia hotel.
In the early 1980's, Prudential began a survey of all of its properties to determine if any of the buildings had used asbestos in its fireproofing. These surveys were performed by reviewing the plans and specifications for the type of materials to be used in the structures. By 1984, Prudential had a demonstrated concern about asbestos and recognized it as an economic issue regarding both the sale of property and tenant occupancy in its buildings. Goldman contended that Prudential began selling those properties containing asbestos while continually worrying about the public relations problems associated with the existence of asbestos in its commercial-building portfolio. In one instance in the spring of 1984, Prudential attempted to sell the Gibraltar Building to the Newark Board of Education. One of Prudential's employees made full disclosure of the asbestos building materials used in the Gibraltar Building and the Newark Board refused to buy the building. Goldman argues that, from that point forward, Prudential, being aware of the economic consequences of full disclosure, set upon a course of concealing any information concerning asbestos from prospective purchasers. Prudential contended that any prior knowledge of asbestos was acquired by the corporate headquarters and not the real estate sales division. Prudential officials testified that asbestos information was not shared among the various divisions.
In the spring of 1984, Goldman and Prudential entered negotiations concerning the possible sale of the Jefferson Building. Goldman's employees and experts conducted investigations and attempted careful inspection of the building. In March of 1984, before execution of the contract, Mr. Tim Don Kirk, a maintenance supervisor for Goldman, met with Prudential's on-site manager, Ms. Donna Buchanan, to inspect the building. During the course of his inspection, Mr. Kirk asked Ms. Buchanan if the building "had any defects or problems." Ms. Buchanan represented to Mr. Kirk that the building had no defects and that it only had one problema concrete floor in the mechanical room, which had been corrected. Mr. Kirk also asked Ms. Buchanan for the drawings, plans and specifications for the building; however, she told him that Prudential had only tenant asbuilt drawings, that no other plans or specifications were available. Goldman contended at trial that Prudential purposely and intentionally withheld the building plans and specifications. He contended that those plans and specifications listed a fireproofing material with the trade name MonoKote, a product which sometimes contained asbestos.[4] Prudential, on the other *871 hand, denied having purposely withheld the plans and specifications. Furthermore, it claimed that an architect or engineer could not determine whether the MonoKote used in the Jefferson Building contained asbestos, since MonoKote was manufactured and sold both with and without asbestos.
Goldman introduced additional evidence to show that, before the sale of the Jefferson Building, Prudential had developed a sophisticated concealment strategy to prevent prospective buyers from discovering asbestos in its buildings. He introduced evidence that a prospective buyer on routine inspection would not be able to determine by visual examination whether asbestos materials were present. Prudential's Corporate Vice President, Mr. Rebholz, conceded that by 1983 he knew that the presence of asbestos had an adverse affect on the marketability of buildings and was therefore a "subject of extreme importance" to Prudential. Prudential's Corporate Vice President and Senior Portfolio Manager, Mr. Charles Lightner, knew that asbestos removal was expensive and that appropriate appraisal practice and policy required discounting a building to reflect removal costs. In his own words, asbestos had a "significantly detrimental effect on the value of a property." Although several Prudential officers acknowledged Prudential's obligation to disclose asbestos to potential buyers, Mr. Rebholz, the officer in charge of selling the Jefferson Building, testified that other Prudential executives maintained that it was unnecessary to disclose the presence of asbestos to prospective buyers.
One example, Goldman contended, of this concealment strategy involved the General Services Administration of the United States Government (GSA). When GSA submitted an asbestos-survey questionnaire to Prudential's corporate headquarters, Prudential responded with a memorandum to all of its leasing and management staff which mandated that "all members of the staff and our contract managers should be instructed not to complete this form." In addition, when Prudential circulated confidential articles concerning public health hazards related to asbestos in buildings constructed between 1950 and 1972, personnel at corporate headquarters were asked "not to circulate this outside of Prudential." Finally, a policy proposal for disclosure of the existence of asbestos with respect to any properties being sold by Prudential, suggested by a Prudential officer, did not make it through committee. The chief lawyer for Prudential's real-estate department redrafted this policy memorandum to delete any reference to asbestos.[5]
Based upon the foregoing testimony, the jury answered in favor of Goldman and against Prudential on the single liability issue submitted to it. The wrongful conduct of Prudential as found in this special issue was premised primarily upon two tort theories, DTPA misrepresentations and fraudulent concealment.
B. Prudential's Affirmative Misrepresentations
Prior to the execution of the sales contract involving the Jefferson Building, Prudential's on-site manager, Ms. Buchanan, with Prudential's express authorization, made several representations to Goldman's representative, Mr. Kirk. Specifically, in response to his inquiry she represented that the building had "no defects" and that it had only "one problem," the concrete floor in the mechanical room. In addition, she represented to Goldman that the Jefferson Building was "one of the finest little properties in the City of Austin" and was a "superb, super fine building." Goldman argued at trial that these representations were false and the jury agreed. Prudential takes the position that these representations were no more than "puff talk" and cannot form a legal basis for a judgment in favor of Goldman.
In Pennington v. Singleton, 606 S.W.2d 682, 687 (Tex.1980), the Texas Supreme Court held that similar representations with respect to a boat in "excellent" or *872 "perfect" condition were actionable misrepresentations under the DTPA. Similarly, in HOW Insurance Co. v. Patriot Financial Services, Inc., 786 S.W.2d 533, 543-544 (Tex.App.1990, no writ), this Court held that the use of the term "meticulous construction" denoted a high degree of quality such as "excellent" or "perfect," and such use, if inaccurate, was actionable under statutory or common-law fraud theories even though the description was general in nature. Although general or broad statements can be actionable, the more imprecise or vague a statement the more likely it constitutes opinion as opposed to a factual misrepresentation. For example, in Autohaus, Inc. v. Aguilar, 794 S.W.2d 459, 464 (Tex.App.1990, writ ref'd), the Dallas Court of Appeals held that a car salesman's statement that a Mercedes was the "best engineered car in the world" did not qualify as an actionable misrepresentation of the car's characteristics or qualities. It appears to us that although these representations, standing alone, might be insufficient to sustain a cause of action, viewed under the totality of the circumstances and evidence, they are legally sufficient to support the general-charge single issue inquiring as to Prudential's wrongful conduct. Further, as we discuss below, additional evidence supports the jury's finding of liability.
C. Fraudulent Concealment
Goldman contends that Prudential's affirmative misrepresentations led directly to the nondisclosure and fraudulent concealment of the asbestos problem in the Jefferson Building. Prudential responds that there is no direct testimony in this record showing Prudential had actual knowledge of the asbestos material in the Jefferson Building. While conceding a lack of direct evidence of Prudential's actual knowledge, Goldman contends that there is abundant circumstantial evidence in this record from which the jury could impute such knowledge to Prudential. Goldman argues that the most significant piece of evidence in this regard is the misrepresentation by Prudential's agent that Prudential did not have the plans and specifications for the Jefferson Building. Goldman points to testimony in the record that this representation, made to his representative, was false and that Prudential had the plans and specifications on-site for a lengthy period of time. Prudential characterizes the failure to deliver the plans and specifications as an innocent mistake without any intent to deceive. Goldman, on the other hand, takes the position that Prudential intentionally concealed the plans and specifications because they were the key to detecting the use of MonoKote and thus the possible presence of asbestos in the Jefferson Building. "The jury is the exclusive judge of the facts proved, the credibility of the witnesses, and the weight to be given their testimony." Dyson v. The Olin Corp., 692 S.W.2d 456, 458 (Tex. 1985) (quoting Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792, 796 (1951)). Apparently, the jury resolved much of the disputed testimony in Goldman's favor. We may not substitute our judgment for that of the jury. Benoit, 239 S.W.2d at 796.
Goldman introduced a significant quantum of circumstantial evidence to establish Prudential's course of conduct in failing to disclose information concerning asbestos in its properties when possible. This evidence included corporate memoranda and policy decisions, at the highest levels, affirmatively sanctioning the concealment of the presence of asbestos in any of Prudential's commercial properties. Prudential rebuts much of this testimony by denying any link between what obviously was an "asbestos cover-up" by Prudential's corporate home office and the subsequent sale of the Jefferson Building by Prudential's real estate division. In reviewing circumstantial evidence, we set forth the following guidelines:
Any disputed fact may be established by circumstantial as well as by direct evidence. In neither case is the burden of proof greater than the preponderance. This rule does not require the quality of absolute certainty, nor does it require the plaintiff to exclude every other possibility. All that is required of such rule is that the circumstances point to the ultimate fact sought to be established with *873 that degree of certainty as to make the conclusion reasonably probable.
McMillen Feeds, Inc. v. Harlow, 405 S.W.2d 123, 130 (Tex.Civ.App.1966, writ ref'd n.r.e.).
Certainly, the evidence in this record was sharply contested and both parties vigorously presented their viewpoints. It is obvious from the verdict that the jury simply did not agree with Prudential's presentation and resolved much of the conflicting evidence and testimony in Goldman's favor. This is the jury's role and function. After reviewing the entire record, we conclude that the evidence was both legally and factually sufficient to sustain the jury's answer to Question No. 1, that Prudential had engaged in wrongful conduct.
D. The "As Is" Contract
Prudential argues that even if it had a duty to disclose the asbestos in the Jefferson Building, that duty was contractually eliminated under the "as is" clause of the purchase-and-sale agreement with Goldman.[6] We disagree. The presence of actionable fraud or a violation of the DTPA creates liability in tort irrespective of contractual disclaimers. See, e.g., Weitzel v. Barnes, 691 S.W.2d 598, 600 (Tex.1985); Cockburn v. Mercantile Petroleum, Inc., 296 S.W.2d 316, 326 (Tex.Civ.App.1956, no writ). On this very question, the Cockburn court held that an "as is" agreement does not defeat an action for fraud. Id. at 326.
More recently, in Weitzel, the Texas Supreme Court addressed a similar issue under a DTPA cause of action. As in this case, the seller in Weitzel argued that to allow liability under such circumstances would "do violence to all written contracts which provide that the purchaser takes `as is.'" Id. at 599. After noting that silence could amount to a misrepresentation in certain situations, the supreme court held: In this instance, [the seller] affirmatively represented that the systems had qualities which they did not actually possess. Even under a contract allowing inspection, an affirmative misrepresentation is actionable under the DTPA.
Id. at 601. Thus, we hold that the "as is" clause in the contract between Prudential and Goldman does not preclude, as a matter of law, Goldman's tort actions for fraud and violations of the DTPA. We overrule Prudential's points of error one and two.
Admission of Prior Lawsuit
Plaintiffs' trial exhibit 102 was a copy of a first amended complaint filed by Prudential in a separate unrelated lawsuit against certain manufacturers of the identical asbestos-containing materials found in the Jefferson Building. The trial court admitted the exhibit. Goldman maintains that the pleading was admissible because it contained statements that were inconsistent with various positions taken by Prudential in the instant lawsuit. Prudential, in point of error three, disputes the admissibility of this exhibit.
Prudential has waived this point of error. A review of the record reveals that the exhibit was introduced without objection. In order to preserve the right to complain on appeal about the admission of evidence, Prudential was required to object at the time the prior-lawsuit pleading was offered. Pope v. Darcey, 667 S.W.2d 270, 273 (Tex.App. 1984, writ ref'd n.r.e.). The objection needs to be specific enough to enable the trial court to understand the precise nature of the objection. Texas Mun. Power Agency v. Berger, 600 S.W.2d 850, 854 (Tex.Civ.App.1980, no writ). Prudential was next required to obtain a ruling on its objection. MBank Dallas N.A. v. Sunbelt Mfg., Inc., 710 S.W.2d 633, 638 (Tex.App.1986, writ ref'd n.r.e.); Huckaby v. Henderson, 635 S.W.2d 129, 131 (Tex. App.1981, writ ref'd n.r.e.); see also Tex. R.Civ.Evid.Ann. 103(a) (Pamph.1992). Having failed to take any of these steps, Prudential has not preserved error.
*874 However, even if the point were properly preserved, no error is presented. The general rule governing the admission of pleadings from other actions is succinctly stated in St. Paul Fire & Marine Insurance Co. v. Murphree, 163 Tex. 534, 357 S.W.2d 744, 747 (1962): "Pleadings in other actions which contain statements inconsistent with the party's present position are receivable as admissions."
The test for the appellate court to review the admission or exclusion of evidence by the trial court is abuse of discretion. "The trial judge has broad discretion in determining issues concerning the general admissibility of evidence." Thompson v. Mayes, 707 S.W.2d 951, 956 (Tex.App.1986, writ ref'd n.r.e.); see also Tex.R.Civ.Evid. Ann. 104(a) (Pamph.1992).
Goldman sought to introduce the evidence of the prior lawsuit to impeach two positions taken by Prudential at the time of trial: (1) Prudential took the position that the presence of asbestos in the Jefferson Building was not a problem, and that Goldman had not suffered any damages as a result of the presence of asbestos; (2) Prudential took the position that it had "no knowledge" about MonoKote which was manufactured by W.R. Grace and Company, the defendant in the other lawsuit.
Goldman contends that Prudential's position in the prior lawsuit is contradictory to its position in the instant case. We agree. Specifically, in the prior lawsuit, Prudential stated:
The use of [Prudential's] buildings ... has been materially impaired due to the presence of the asbestos-containing materials of Defendants in the buildings, both through a diminution of market value and physical property damage to the buildings.
Additionally, in the instant lawsuit, Prudential's answers to requests for admissions suggested that they had no knowledge of MonoKote. By way of contrast, the pleadings contained in plaintiffs' exhibit 102 include great detail about asbestoscontaining MonoKote manufactured by W.R. Grace and Company.
Goldman contends, therefore, that he was entitled to introduce Prudential's prior pleadings to show these inconsistencies. In addition to the fact that Prudential voiced no objection to the admission of the pleading, we also note that Prudential did not ask for any type of limiting instruction. We conclude that the trial court did not abuse its discretion in admitting Prudential's prior lawsuit as an exhibit. See Sell v. C.B. Smith Volkswagen, Inc., 611 S.W.2d 897, 901 (Tex.App.1981, writ refd n.r.e.). Prudential's third point of error is overruled.
Actual Damages
In its fourth point of error, Prudential claims that the evidence is factually insufficient to support the jury's finding regarding Goldman's actual damages. At trial, Goldman presented evidence of actual damages which included the testimony of an appraisal expert witness, Rudy Robinson. Mr. Robinson, testified that the presence of asbestos in the Jefferson Building diminished its market value on May 10, 1984, by over six million dollars. In arriving at his opinions, Mr. Robinson examined sales of comparable buildings by Prudential, including the Executive Plaza Building in Houston, Texas. He reviewed the substantial discounts in sale prices due to asbestos in those buildings. In addition, under the cost approach for removal of the asbestos from the Jefferson Building, Robinson estimated the actual economic damages at $6,574,783.00. The jury awarded $6,023,993.03 as actual damages.
Although Prudential did not call a single witness to testify on the issue of actual damages, many of the witnesses from Prudential's corporate headquarters confirmed that asbestos abatement was expensive and that appropriate appraisal practices and policy would be to discount the value of commercial buildings to reflect such cost.
Prudential contends that Goldman's recovery should be limited to $60,999.03, his out-of-pocket expenses. Upon discovery of the asbestos fireproofing in the building, Goldman retained Maxim Engineers, an asbestos consulting firm, to inspect the Jefferson *875 Building, to advise Goldman of the nature and condition of the asbestos fireproofing, and to recommend and implement any prudent remedial measures. Following inspection, Maxim advised Goldman that the asbestos did not pose a health risk and that the fireproofing was in very good condition. However, Maxim recommended the adoption of an operations and maintenance program, the total cost of which was $60,999.03 at the time of trial. Prudential contends that this amount should be the upper limit of Goldman's actual damages. We disagree.
The evidence at trial conclusively established that the discovery of asbestoscontaining materials within the building substantially diminished the market value of the Jefferson Building. Much of this evidence came from Prudential's own officers who had substantial experience with the economic impact of asbestos in its commercial properties. This testimony regarding the depreciation of the Jefferson Building was sufficient to sustain the jury's award of actual damages. In addition, Goldman introduced evidence on the cost of asbestos removal. Prudential attacks this approach on the basis that the asbestos removal was never performed. We believe the case law is clear: where property has sustained damage which diminishes its fair market value, the cost of repairing or restoring the property to its full market value is an appropriate element of damage, irrespective of whether the repairs are actually performed. See Ortiz v. Flintkote Co., 761 S.W.2d 531, 536 (Tex.App.1988, writ denied); Greene v. Bearden Enters., Inc., 598 S.W.2d 649, 653 (Tex.Civ.App. 1980, writ ref'd n.r.e.). As the Texas Supreme Court observed in Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 373 (Tex.1984):
Texas courts have recognized two measures of damages for misrepresentation. Texas common law allows an injured party to recover the actual injury suffered measured by "the difference between the value of that which he has parted with, and the value of that which he has received." George v. Hesse, 100 Tex. 44, 93 S.W. 107 (1906). This measure of damages is known as the "out of pocket" measure and is calculated as of the time of sale. W. Prosser, Handbook of the Law of Torts, § 110 (4th ed. 1971). The second remedy available in Texas, known as the "benefit of the bargain" measure, allows the plaintiff to recover the difference between the value as represented and the actual value received. Johnson v. Willis, 596 S.W.2d 256, 262 (Tex.Civ. App.Waco), writ ref'd n.r.e. per curiam, 603 S.W.2d 828 (Tex.1980). The DTPA permits a plaintiff to recover under either the "out of pocket" rule or the "benefit of the bargain" rule, whichever gives the consumer the greater recovery. Id. at 263.
Based on the theories of actionable fraud and DTPA violations, we hold that there is factually sufficient evidence to support the jury verdict on actual damages. Accordingly, Prudential's point of error number four is overruled.
Exemplary Damages
In its fifth and sixth points of error, Prudential contends that: (1) exemplary damages are not recoverable as a matter of law; (2) there is legally and factually insufficient evidence to support an award of exemplary damages; and, (3) the award of exemplary damages violated Prudential's right to due process under the United States Constitution and the Texas Constitution.
A. Right to Exemplary Damages
Prudential argues that this case is not appropriate for the recovery of exemplary damages and that Goldman's judgment for such damages fails as a matter of law. Prudential relies primarily on the Texas Supreme Court decision in Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex.1986), and its progeny.
Jim Walter Homes involved a dispute over the sale and construction of a house. The jury found that Jim Walter Homes had breached the warranty of good workmanship in the contract and was grossly negligent in supervising the construction of the *876 house. The jury found actual damages, additional damages under the DTPA, exemplary damages, and attorney's fees. Jim Walter Homes, 711 S.W.2d at 617. The Texas Supreme Court reversed the award of exemplary damages. Id. at 618. In Jim Walter Homes, the plaintiff had pleaded both breach of contract and tort causes of action. Id. at 617. The negligence and DTPA claims arose during the performance of the contract. The case was submitted on both contract and tort theories. The actual damages found by the jury were clearly contract damages. On appeal to the Texas Supreme Court, that court held that the plaintiffs had not met their burden of establishing actual damages arising from a separate tort, independent of the breach of contract cause of action. Therefore, the court reasoned that a jury award for exemplary damages could not be upheld in the absence of an independent tort, with actual damages flowing therefrom. Id. at 618.
We believe that Jim Walter Homes is distinguishable and does not control the disposition of this case. In the instant case, Goldman sought recovery exclusively in tort and did not plead any allegations involving breach of contract. More importantly, the tort causes of action, i.e., fraudulent concealment and violations of the DTPA, all involved conduct predating the consummation of a contract. Indeed, Goldman's entire tort theory was premised upon Prudential's concealment and misrepresentations which induced him to enter into a binding contract. Thus, this case is distinguishable in that it is based entirely upon tort theories predating the entry of the binding contract between the parties and is not primarily a breach-of-contract case that incidentally contains a tort cause of action.
We also note that the damages awarded by the jury are actual damages for fraud and not contract damages. See Leyendecker & Assocs., 683 s.W.2d 369; Trenholm v. Ratcliff 646 S.W.2d 927 (Tex.1983). As the Texas Supreme Court stated in American National Petroleum Co. v. Transcontinental Gas Pipeline Corp., 798 S.W.2d 274, 278 (Tex.1990):
In a commercial relations tort, the fact that the damages are "economic" does not mean that they may not be damages for the tort. The basic measure of actual damages for tortious interference with contract is the same as the measure of damages for breach of the contract interfered with, to put the plaintiff in the same economic position he would have been in had the contract interfered with been actually performed.
We therefore conclude that Goldman, by his pleading, proof, and jury findings established his right to recover exemplary damages.
B. Evidence Supporting Exemplary Damages
We now turn to a consideration of whether the evidence was legally and factually sufficient to sustain the jury finding supporting an award of damages. In Question No. 3, the jury found that Prudential's wrongful conduct was committed: (a) with conscious indifference to the rights of plaintiffs; (b) with gross negligence; and (c) with actual awareness that such conduct was wrongful. Prudential argues that the evidence in the record is insufficient to sustain jury findings in Question 3(a), (b), and (c). We disagree. We have already detailed the evidence in the record regarding Prudential's "cover-up" on the issue of asbestos contamination. Several Prudential officials testified that they felt no obligation to share their knowledge regarding the dangers of asbestos with other Prudential personnel, much less with the potential buyers of asbestos-contaminated commercial properties. The jury could have concluded that such conduct was either consciously indifferent to the rights of Goldman or constituted gross negligence. We conclude there was ample testimony to support the jury finding to Question 3(a), (b) and (c).
C. Due Process
Prudential contends that the award of exemplary damages violated its right to due process under the United States Constitution *877 and under the Texas Constitution.[7] We reject this argument.
While this appeal was pending, the United States Supreme Court handed down its landmark decision in Pacific Mutual Life Insurance Co. v. Haslip, ___ U.S.___, 111 S. Ct. 1032, 113 L. Ed. 2d 1 (1991). In Haslip, the Supreme Court, in a seven-to-one majority opinion authored by Justice Blackmun, held that exemplary damages did not violate the due process clause of the Fourteenth Amendment.[8] The Court stated that the traditional, common-law approach allowing a jury discretion over the appropriateness and amount of the exemplary damage award based on the gravity of the wrong and the need to deter similar conduct, was not so inherently unfair as to deny due process. ___ U.S. at ___, 111 S.Ct. at 1043, 113 L. Ed. 2d at 19. In arriving at this conclusion, the Court considered the fact that jury discretion in awarding exemplary damages was deeply rooted in the history of Anglo-American jurisprudence. Further, the Court relied heavily upon the checks-and-balances provided by review of exemplary damage awards, first by the trial court and then by the appellate courts. ___ U.S. at ___, 111 S.Ct. at 1046, 113 L. Ed. 2d at 23. We conclude that Haslip is controlling in determining that the jury's award of damages does not violate the federal due process clause.
We also conclude that the exemplary-damage award in this case does not violate the Texas Constitution. While we recognize that the Texas Constitution may well provide broader rights and protections than its federal counterpart, many of the judicial safeguards relied upon in Haslip are applicable to a state constitutional due process analysis. For example, the opportunity for review by a trial court was available. Indeed, one of Prudential's points of error concerns the fact that the trial court did not grant a remittitur. Appellate review is also available. However, the jury award in the present case, which is less than two and one-half times the actual damages, does not offend traditional notions of due-process fairness.[9] We conclude that adequate procedural safeguards are provided to satisfy both federal and state constitutional due process concerns.
We find persuasive the holding of the court in Lawson-Avila Construction Co. v. Stoutamire, 791 S.W.2d 584, 593 (Tex. App.1990, writ denied), rejecting an attack on exemplary damages as violating state constitutional due process:
We hold that the gross negligence standards upon which Texas allows exemplary damages is not vague and amply satisfies the due process safeguards guaranteed by the federal and state constitutions. See Victoria Bank & Trust Co. v. Brady, 779 S.W.2d 893, 913 (Tex. App. Corpus Christi 1989, no writ). This is particularly true where we find, as we do below, that the award of exemplary damages was not excessive or unreasonable. See Browning-Ferris Industries v. Kelco Disposal, Inc., 492 U.S. 257, 273, 109 S. Ct. 2909, 2920, 106 L. Ed. 2d 219 (1989) (Brennan, J., concurring).
See also Celotex Corp. v. Tate, 797 S.W.2d 197, 208 (Tex.App.1990, no writ) (exemplary damages do not offend state constitutional due-process or excessive-fines clauses). Prudential's fifth and sixth points of error are overruled.
*878 Remittitur
In its seventh point of error, Prudential contends that both the actual and punitive damages awarded by the jury are excessive and complains of the trial court's failure to grant a remittitur.
The standard of review for suggestions of remittitur or claims of excessive damages is succinctly set forth in Pope v. Moore: "Factual sufficiency is the sole remittitur standard for actual damages. In determining whether damages are excessive, trial courts and courts of appeal should employ the same test as for any factual insufficiency question." 711 S.W.2d 622, 624 (Tex.1986) (citations omitted).
A. Actual Damages
In the instant case, Goldman's evidence established damages up to $6,500,000. Prudential called no witnesses on damages, relying instead on cross-examination of Goldman's witnesses. The problem in reviewing excessiveness claims when the damage testimony is largely undisputed is discussed in Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768, 861 (Tex.App. 1987, writ ref'd n.r.e.), cert. denied, 485 U.S. 994, 108 S. Ct. 1305, 99 L. Ed. 2d 686 (1988), which summarized the problems as follows:
Texaco presented no expert testimony to refute the claims but relied on its crossexamination of Pennzoil's experts to attempt to show that the damages model used by the jury was flawed. Dr. Barrow testified that each of his three models would constitute an accepted method of proving Pennzoil's damages. It is inevitable that there will be some degree of inexactness when an expert is attempting to make an educated estimate of the damages in a case such as this one. Prices and costs vary, depending on the locale and the type of crude found. The law recognizes that a plaintiff may not be able to prove its damages to a certainty. But this uncertainty is tolerated when the difficulty in calculating damages is attributable to the defendant's conduct.
In Flanigan v. Carswell, 329 S.W.2d 902, 903 (Tex.Civ.App.1959, writ ref'd n.r.e.), this Court reached a similar conclusion in upholding a jury's damage award and pointedly noted that "appellants offered no rebutting medical testimony." From a complete review of the actual damage testimony in this record, we conclude that the trial court did not err in refusing to grant a remittitur. We conclude there is ample evidence from which the jury could arrive at actual damages of $6,023,993.03.
B. Exemplary Damages
In Alamo National Bank v. Kraus, 616 S.W.2d 908 (Tex.1981), the supreme court identified the following factors to assess whether a punitive damages award is excessive:
1. the nature of the wrong;
2. the character of the conduct involved;
3. the degree of culpability of the wrongdoer;
4. the situation and sensibilities of the parties concerned; and
5. the extent to which such conduct offends a public sense of justice and propriety.
616 S.W.2d at 910. Each of these factors must be assessed in light of the facts and circumstances of the particular case. Underwriters Life Ins. Co. v. Cobb, 746 S.W.2d 810, 818-19 (Tex.App.1988, no writ).
In addition, the ratio between the actual and exemplary damages should be evaluated for reasonableness. While it has been stated many times that no absolute ratio exists to test the reasonableness of an exemplary damage award, the 2.3:1 ratio of exemplary damages in this case falls well below the amounts allowed in other cases. See, e.g., American Natural Petroleum Co., 798 S.W.2d at 281 (3.4:1 ratio; $4.7 million actual, $16 million punitive); John Deere Co. v. May, 773 S.W.2d 369, 377-78 (Tex.App.1989, writ denied) (3.5:1 ratio); K-Mart Corp. Store # 7441 v. Trotti, 677 S.W.2d 632, 639-640 (Tex.App.1984), writ ref'd n.r.e., 686 S.W.2d 593 (Tex. 1985) (12.5:1 ratio); Russell v. Truitt, 554 S.W.2d 948, 955-56 (Tex.Civ.App.1977, writ ref'd *879 n.r.e.) (7:1 ratio). Based upon a review of all of the evidence in the record in view of the Kraus factors, as well as the reasonableness of the ratio of exemplary damages to actual damages, we conclude that the trial court did not err in failing to order a remittitur. Prudential's seventh point of error is overruled.
Prejudgment Interest
In its eighth point of error, Prudential attacks the trial court judgment for awarding prejudgment interest on the actual damages. Prudential complains that although Goldman did not discover the presence of asbestos until 1986, the trial court permitted prejudgment interest from the date of the sale.
The general rule for when to commence prejudgment interest in a case such as the one at bar is summarized in Smith v. National Resort Communities, 585 S.W.2d 655, 660 (Tex.1979):
This Court in Watkins v. Junker, 90 Tex. 584, 40 S.W. 11 (1897) laid down the rules that where the measure of recovery is fixed by the conditions existing at the time that the injury is inflicted, the person entitled to recover has also the right to have compensation for the detention of the money to which he is entitled by reason of the wrong done to him; that if interest be properly an element of damages in any case, then it is so as a matter of law....
In the instant case, Goldman's expert witness established damages in excess of $6,500,000 as of the date of the sale of the Jefferson Building on May 10, 1984. Further, Goldman sustained his actual damages as soon as he purchased the Jefferson Building because of the presence of asbestos. We believe that the ruling in Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549 (Tex.1985), supports the proposition that the plaintiff is entitled to recover prejudgment interest on the actual damages from the date sustained until the date of the judgment.
One reason for this rule is that "[prejudgment interest compensates a [plaintiff] for lost opportunities to invest and earn interest on the amount of damages between the time of the occurrence and the time of judgment." Kilgore Junior College Dist. v. Kettle Restaurants, 768 S.W.2d 775, 776 (Tex.App.1989, writ denied). This rule is also applicable to tort cases involving fraud. Neeley v. Bankers Trust Co., 757 F.2d 621, 633 (5th Cir.1985).
In the instant case, although the asbestos was discovered at a later time, Goldman's damages actually accrued on the date of the sale and therefore it was appropriate for the district court to allow prejudgment interest from the date of the injury and sale, as opposed to the date of actual discovery of the asbestos.
Finding no error in the award of prejudgment interest by the district court, we overrule Prudential's eighth point of error.
Attorney's Fees
In its ninth and last point of error, Prudential argues that the award of attorney's fees permitted Goldman to make a double recovery. Prudential complains that Goldman's attorney, in final argument, mentioned attorney's fees as an element of general damages. Then, on final judgment, the trial court included the stipulated attorney's fees as an additional item of damage. We note first that the parties stipulated to the amount of the attorney's fees in the record. We also note that attorney's fees were stipulated prior to the submission of the case to the jury. Tex.R.Civ. P.Ann. 11 (Supp.1992). Attorney's fees are appropriately recoverable under the DTPA. Tex.Bus. 17.50 (1987). The jury question regarding actual damages, to which Prudential did not object, does not mention attorney's fees. Because it failed to object to the damage issue as submitted, Prudential waived any alleged error that attorney's fees should have been expressly excluded from the damage submission. Tex.R.Civ.P.Ann. 272 (Supp. 1992); see Home Sav. Ass'n v. Guerra, 733 S.W.2d 134, 137 (Tex.1987); Matthews v. Candlewood Builders, 685 S.W.2d 649, 650 (Tex.1985). Prudential also failed to request an instruction in the charge that attorney's fees constituted a double recovery *880 and so waived that objection. Tex.R.Civ. P.Ann. 273 (Supp.1992). Finally Prudential waived any objection to attorney's fees being mentioned on closing argument by failing to object to such reference. Shenandoah Ass'n v. J & K Properties, 741 S.W.2d 470, 486 (Tex.App. 1987, writ denied). Therefore, based upon this record, it appears that Prudential waived any complaint that it might have had regarding a potential double recovery due to the trial court's award of attorney's fees. Prudential's ninth point of error is overruled.
CONCLUSION
Finding no error, the judgment of the district court is affirmed.
NOTES
[1] In Goldman's trial pleading, he listed the following causes of action against Prudential: statutory, common-law and constructive fraud; fraudulent and negligent concealment and nondisclosure; breach of the duty of good faith and fair dealing; negligent misrepresentation; and various violations of the DTPA.
[2] Since the plaintiff had the burden of proof in this case, this issue should be worded as an insufficiency of the evidence point of error, which is the way we shall address the point. See William Powers, Jr. and Jack Ratliff, Another Look at "No Evidence" and "Insufficient Evidence", 69 Tex.L.Rev. 515, 519 (1991).
[3] Significantly, Mr. Rebholz was also the person at corporate headquarters in charge of the sale of the Jefferson Building in May of 1984.
[4] Evidence was admitted at trial that Prudential, in an unrelated lawsuit, had sued W.R. Grace and Company, the manufacturer of MonoKote, which was the trademark for an asbestos-containing fireproof material. The admissibility of this evidence forms the basis of a separate point of error.
[5] This policy memorandum was an especially damaging piece of evidence to Prudential since it indicated that any reference to asbestos was deleted intentionally.
[6] The sale of property on an "as is" basis is a long-standing practice that Texas courts have recognized and enforced. See, e.g., Mid Continent Aircraft Corp. v. Curry County Spraying Serv., Inc., 572 S.W.2d 308 (Tex.1978); Singleton v. LaCoure, 712 S.W.2d 757 (Tex.App.1986, writ ref'd n.r.e.); Henderson v. Ford Motor Co., 547 S.W.2d 663 (Tex.Civ.App. 1977, no writ).
[7] We note that the language used in art. 1, § 19 of the Texas Constitution is "due course of law" rather than "due process of law." However, the two phrases can be used interchangeably. See generally James Harrington, Our Texas Bill of Rights 13-14 (1991).
[8] In Browning-Ferris Indus, v. Kelco Disposal, Inc., 492 U.S. 257, 109 S. Ct. 2909, 106 L. Ed. 2d 219 (1989), and Bankers Life & Casualty Co. v. Crenshaw, 486 U.S. 71, 108 S. Ct. 1645, 100 L. Ed. 2d 62 (1988), the Supreme Court upheld exemplary-damage awards subjected to constitutional challenge. However, in those cases, they specifically reserved the question of whether such awards would violate the due process clause.
[9] Although inapplicable to the present case, we note that the Legislature has provided for a mandatory cap on exemplary damages of four times the actual damages or $200,000, whichever is greater. See Tex.Civ.Prac. & Rem.Code Ann. § 41.007 (Supp.1992). This legislative provision places an absolute limit on the jury's discretion to award exemplary damages in appropriate cases. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2462507/ | 389 S.W.2d 135 (1965)
ANCHOR CASUALTY COMPANY, Appellant,
v.
ROBERTSON TRANSPORT COMPANY, Appellee.
No. 53.
Court of Civil Appeals of Texas, Corpus Christi.
March 25, 1965.
Rehearing Denied April 15, 1965.
*136 Carey Williams, Houston, for appellant.
John L. McConn, Jr., of Butler, Binion, Rice & Cook, Houston, for appellee.
NYE, Justice.
Anchor Casualty Company, appellant, as intervenor, sued Robertson Transport Company for the sum of Two Thousand Two Hundred Dollars ($2,200.00) based upon the amount that it had paid to Clyde Haynes on a policy of collision insurance. Anchor succeeded to all of the rights of Haynes by subrogation with reference to an alleged claim against Robertson.
Haynes owned a truck that was leased to Robertson. Anchor carried the collision insurance on the truck. The truck was wrecked due to the negligence of Robertson while in its possession and control. Anchor paid Haynes' claim for the damage suffered and then intervened in this suit against Robertson. Anchor seeking the amount it had paid Haynes alleged that the truck was under a contract of bailment from Haynes requiring Robertson to be responsible for the damage caused by his negligence. Robertson's suit against Haynes was dismissed, leaving only the suit by Anchor against Robertson, which was tried before the court without the intervention of a jury. Robertson, in effect, defended on the basis that the contract of bailment was a special contract relieving it from any liability. Judgment was entered against Anchor that it take nothing from Robertson.
Anchor, perfecting its appeal to this Court, contends in three points that the trial court erred in refusing to render judgment for Anchor because: (1) the necessary elements for recovery were proved as a matter of law; (2) the only affirmative defense plead by Robertson was proved by Anchor to have no basis in fact; and (3) the only reason assigned by the trial court for refusing to render judgment for Anchor is immaterial as a matter of law and does not support the judgment rendered. All of these points will be considered together.
The trial court found that it was never within the contemplation of Haynes and Robertson that Robertson would be held liable to Haynes or anyone claiming by or through Haynes for damages to the truck *137 while it was in the care, custody and control of Robertson. The trial court concluded that Haynes could not recover from Robertson for the damage to the truck because such recovery was not within the contemplation of the parties at the time Haynes and Robertson entered into the contract and therefore Anchor as subrogee of Haynes and standing in the shoes of Haynes cannot recover from Robertson for the damage to the truck.
The lease in question was entered into by Haynes and Robertson after a series of negotiations. The lease provided in effect that Robertson would operate the truck and receive a set percentage of the gross take for its services. Thereafter, all of the expenses of the operation were to be deducted and the balance remaining, if any, was to be turned over to Haynes. If there was not sufficient revenue to cover the expenses of operation it was to be carried forward and deducted from any future amounts that Haynes would subsequently become entitled to. The contract provided that Haynes would personally drive and operate the truck. If it ever became necessary to substitute a driver, then such substitute operator would have to be approved by Robertson; otherwise, the contract would become null and void. A former employee of Haynes was driving the truck at the time of the damage, working, however, under the direction of Robertson. The contract further provided that Robertson was to deduct from the gross revenue before any payment was made to Haynes, the cost of collision insurance "for the protection of the equipment (the truck in question) described herein."
The contract further provided that
"* * * if the lessor (Haynes) already has fire, theft and collision insurance on his equipment, and the premium has already been paid, then the lessor shall be required to furnish to the lessee (Robertson) before this lease is effective, an endorsement from his fire, theft and collision carrier showing that the lessee (Robertson) is an additional insured under the lessor's (Haynes) fire, theft and collision coverage."
Robertson contends that it was made clear by the terms of the lease that any loss or damage to the truck would be borne by insurance and not by Robertson or Haynes individually. To substantiate this position, Robertson points out that the lease agreement specifically provided for collision insurance for the protection of the vehicle; that the cost of such insurance was to be borne by Haynes, either by providing for insurance initially or to permit the cost of such insurance to be deducted by Robertson from proceeds which otherwise would go to Haynes; and that if Haynes already had collision insurance he was required to obtain an endorsement showing Robertson to be an additional insured under the collision coverage before the lease was to become effective. Robertson further contends that it was established by the evidence, and/or found by the trial court, that it was never the intention of the contracting parties (Haynes and Robertson) that either of them would bear any loss from damage to the truck, in that the evidence showed: that both Haynes and Robertson thought that Haynes had collision insurance initially protecting both parties from damages to the vehicle; that Robertson relied on Haynes' statement that he had such insurance initially, and further that Haynes would secure an endorsement showing that Robertson was an additional insured on his collision insurance policy. We agree with Robertson's contentions.
The record showed that Robertson and Haynes believed that the truck in question was insured for loss caused by a collision. Haynes had collision coverage prior to the lease of the truck in question to Robertson, but the insurance either expired by its own terms, or was inadvertently cancelled by Haynes prior to the time the lease went into effect. During negotiations of the lease it developed that the truck was mortgaged by Haynes to his *138 bank. One of Robertson's employees testified to the effect, that he too believed that Haynes had the collision coverage insurance because it was the usual policy of banks to require such coverage to protect the chattel that was mortgaged. Robertson's employee contacted Haynes on several occasions prior to the loss requesting Haynes to send them the collision endorsement naming Robertson as an additional insured. Each time Haynes would be surprised that Robertson had not already received such endorsement, and would then go on to assure them that he would obtain the endorsement. No endorsement for Robertson was ever obtained by Haynes. Actually, Haynes did not have collision insurance on the truck during the several months the truck was leased to Robertson and not until it was brought finally to Haynes' attention by his banker and a collision binder or coverage was obtained from Anchor a few days before the loss.
It is the law generally that where a chattel is delivered to a bailee in good condition and is not returned, or returned in a damaged state caused by the negligence of the bailee, the bailor is entitled to his damages. 8 Tex.Jur.2d 264, § 50; Louisiana & Arkansas Railway Co. v. Priddy, 355 S.W.2d 835 (Tex.Civ.App.1962, err. dism.); Big "D" Auto Auction, Inc. v. Hightower, 368 S.W.2d 881 (Tex.Civ.App. 1963). However, the application of the general principles of the law of bailment may be abrogated by the parties who may make their own contract in reference to their mutual rights and liabilities. Sanchez v. Blumberg, 176 S.W. 904 (Tex.Civ.App. 1915); Brazos River Gas Co. v. McGarr, 113 S.W.2d 643 (Tex.Civ.App.1938); 8 Tex.Jur.2d 256, § 39. They may be express contract, enlarge, abridge, qualify or supersede the obligations which otherwise would arise from the bailment by implication of law. 8 Am.Jur.2d 1021, § 127; Callihan v. Montrief, 71 S.W.2d 564 (Tex.Civ.App. 1934, err. ref.); Langford v. Nevin, 293 S.W. 673 (Tex.Civ.App.1927); Munger Automobile Co. v. American Lloyds of Dallas, 267 S.W. 304 (Tex.Civ.App.). If such contract is not contrary to public policy there is nothing inherently bad about a contract provision which exempts one of the parties from liability for its own negligence. The validity of an arrangement whereby a bailee contracts with the bailor to procure insurance covering the bailed property is valid and not contrary to public policy. Either the bailor or the bailee may insure, or by special contract require one party or the other to insure, the bailed property for the joint benefit of both parties. See 8 C.J.S. Bailments § 23, p. 378. Collision insurance protecting the bailee from his own negligence or the negligence of his employees may be required by special contract through a course of dealings which establishes a standard of conduct between the parties. Robertson's employee testified, without objection, that the provision requiring Haynes to furnish Robertson with an endorsement from his collision insurance carrier naming Robertson as an additional insured, was the usual provision that Robertson, as well as any other truck people around there usually required from the lessor. 13 Tex. Jur.2d § 129.
Appellant Anchor admits that the parties to a bailment may expressly limit the tort liability of the bailee by the express provision of the contract of bailment but such limitation of liability will not be implied and provisions in the contract alleged to have such effect will be strictly construed and will not be held to have such effect unless no other meaning may reasonably be ascribed to the language imposed. Citing Langford et al. v. Nevin, 117 Tex. 130, 298 S.W. 536 (1927).
We recognize the rule that requires a strict construction of the terms of the contract exonerating the bailee from liability for its own negligence. Wichita City Lines, Inc. v. Puckett, 156 Tex. 456, 295 S.W.2d 894 (1956). This case, cited by Anchor, is distinguishable by the facts. In this Wichita City Lines case, a building *139 was occupied by a lessee and was damaged by fire caused by the negligence of the lessee. The building was insured by the lessor. The lessee contended that the insurance was for his protection and benefit and predicated this contention on a single phrase in the lease, i. e. "Lessor agrees to carry his own insurance against loss by fire, etc., on the entire building." The Supreme Court held that this provision did not impose any obligation on the lessor to take out any insurance to protect himself or the lessee. The lease contract provided that in the event of fire, and should the lessor deem it unfit for occupancy, he could decide not to repair, and terminate the lease. The court held that this was inconsistent with any intention in the insurance provision (above quoted) to protect the interests of the lessee.
The subject contract provided for collision insurance for the protection of the vehicle. This was during the period of time that the vehicle was under the care, custody and control of Robertson. Haynes testified that he never intended to hold Robertson responsible for the bailed truck. Haynes stated that during a discussion of subrogation possibilities with Anchor that he protested to Anchor's insurance adjuster when advised that Anchor might look to Robertson to recoup its loss. Haynes said: "And when they told me that, I protested, because I did not want them to go to Robertson Transport because that was not my intent. I have my truck insured and I did not look to anyone to carry the insurance for me." If there is any doubt in construing the lease agreement, then the party's construction of his own language constitutes the highest evidence of his intentions. Where the parties to an instrument in writing have by their acts and conduct placed a construction upon the same, showing their intentions, then such acts and conduct should be given strong weight in arriving at the intention of the parties in the execution of the instrument, and, in the absence of clear language in such instrument indicating an intention to the contrary of the parties as expressed by their acts and conduct, the courts should adopt the construction of such instrument as placed upon it by the parties thereto. 14 Tex.Jur. pp. 924, 925; 13 Tex.Jur.2d § 128; Col-Tex Refining Co. v. Coffield & Guthrie, Inc., 264 S.W.2d 462, (Tex.Civ.App., err. ref. 1954); Zeppa v. Houston Oil Co. of Texas, 113 S.W.2d 612 (Tex.Civ.App.1938, err. ref.); Lone Star Gas Co. v. X-Ray Gas Co., 139 Tex. 546, 164 S.W.2d 504 (1942); City of Fort Worth v. Barlow, 313 S.W.2d 906 (Tex. Civ.App.1958, ref., n. r. e.).
There is ample evidence that Haynes lead Robertson to believe that the truck in question was covered by collision insurance at the time that the contract of bailment was entered into, and several times subsequently. The record further shows that Robertson relied upon these representations. Booty v. O'Connor, 287 S.W. 282 (Tex.Civ. App.1926, err. ref.); 22 Tex.Jur.2d 660, Estoppel, § 1 and following.
It is, of course, fundamental that a subrogee stands in the shoes of the subrogor and in absence of some special contract arrangement has no greater rights than those of the subrogor. Fox v. Kroeger, 119 Tex. 511, 35 S.W.2d 679, 77 A.L.R. 663 (1931); San Antonio Cattle Loan Co. v. Blalack & Son, 256 S.W. 974 (Tex.Civ. App.1923), affirmed Sup.Ct. 267 S.W. 474; 39 Tex.Jur. 795, § 35, Subrogation. We hold that under the facts before us, for the reasons stated herein, Haynes could not have recovered the damages to the bailed truck from Robertson. It therefore follows that since Anchor admits that it stands in the shoes of Haynes, the trial court was correct in denying Anchor's claim against Robertson. Appellant's points are overruled. The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2447500/ | 841 S.W.2d 853 (1992)
Charles J. SCHINDLER, II, Petitioner,
v.
AUSTWELL FARMERS COOPERATIVE, Respondent.
No. D-2616.
Supreme Court of Texas.
October 14, 1992.
Rehearing Overruled December 31, 1992.
Edmond J. Ford, Jr., Corpus Christi, for petitioner.
*854 James H. Robichaux, Corpus Christi, for respondent.
PER CURIAM.
Charles Schindler II, a cotton and grain farmer, had an agreement with Austwell Farmers Cooperative which allowed him to purchase agricultural products on account. Austwell charged purchases by Schindler, his father and his cousin to this account. When Schindler refused to pay the balance due on the account, Austwell sued him for breach of contract and fraud. The jury found that Schindler owed $65,722.11 on the account; that he obtained products from Austwell fraudulently, causing damages of $65,722.11; and that Austwell should be awarded punitive damages of $10,000 and attorney fees. The trial court rendered judgment on the verdict for Austwell for $65,722.11 actual damages, $10,000 punitive damages, attorney fees and interest. The court of appeals affirmed. 829 S.W.2d 283. Schindler argues that Austwell cannot recover both attorney fees for breach of contract and punitive damages for fraud, based upon the same event and the same injury. Schindler also complains that there is no evidence to support a recovery for fraud in this case. Because we agree with this latter contention, we do not reach the former.
Austwell's fraud claim is based upon its manager's testimony that he confronted Schindler at least twice about paying his account balance, and that both times Schindler acknowledged he owed the debt and promised prompt payment. Austwell claims that this promise was fraudulent. For a promise of future performance to be the basis of actionable fraud, it must have been false at the time it was made. "Failure to perform, standing alone, is no evidence of the promisor's intent not to perform when the promise was made. However, that fact is a circumstance to be considered with other facts to establish intent." Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex. 1986); accord, Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 597 (Tex. 1992). There is evidence in this record that Schindler promised to pay the amounts charged to the account and then later refused, but there is no evidence that Schindler had no intention of paying for what he bought at the time he promised he would pay. Thus, there is no evidence to support recovery for fraud, and no basis for an award of punitive damages.
Without hearing oral argument, a majority of the court grants Schindler's application for writ of error, modifies the judgment of the court of appeals to eliminate the award of punitive damages, and as modified, affirms that judgment. Tex. R.App.P. 170. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1744562/ | 702 S.W.2d 677 (1985)
Shannon SELLARDS, Individually and as Next Friend of Darlene Demarais, Appellant,
v.
The EXPRESS-NEWS CORPORATION, Appellee.
No. 04-84-00253-CV.
Court of Appeals of Texas, San Antonio.
November 13, 1985.
Rehearing Denied December 18, 1985.
*678 A.J. Hohman, Jr., Hope, Henderson, Hohman & Georges, San Antonio, for appellant.
Mark J. Cannan, Lang, Cross, Ladon Law Firm, San Antonio, for appellee.
Before CANTU and REEVES and SHARPE (Assigned), JJ.
OPINION
T. GILBERT SHARPE, Assigned Justice.[*]
This is an appeal from a summary judgment the trial court rendered in favor of defendants, The Express-News Corporation and Karen Kennedy, against Shannon Sellards, as next friend of her daughter, Darlene Demarais.[1]
Darlene Demarais was involved in a one-car accident on February 10, 1983, in which she, as passenger, sustained serious injuries. The driver and another passenger were killed, and a fourth passenger sustained injuries. Karen Kennedy, a police reporter for the defendant newspaper, called in the story to the paper and wrote a follow-up article for the paper. An editor for the paper also wrote an article on the accident. Two of the articles referred to the use of drugs by one or more of the occupants of the automobile. The first article, appearing on the front page of the February 11, 1983, San Antonio Express, under Kennedy's byline, states "Police twice gave reports that the terrifying smashup that destroyed the car was a drug-induced suicide but offered no details." Demarais' name does not appear in this article. The second article, appearing in the February 11, 1983, San Antonio News, names Demarais as one of the victims. The third article, from the February 12, 1983, San Antonio Express-News, written by Kennedy, states "Initial police reports were that drugs were involved, but later reports did not indicate any involvement of drugs." Demarais' name also appeared in this article.
Shannon Sellards, as next friend of Demarais, brought suit in district court against the Express-News Corporation and Karen Kennedy alleging the above quoted language is slander per se, libelous, defamatory, and an invasion of privacy. The Express-News Corporation and Kennedy moved for summary judgment claiming none of the language in the articles concerning Demarais is libelous. Plaintiffs filed affidavits stating the newspaper articles are not true, that the parties suffered damages, and that to one of the affiants, an attorney, the statement, "drug-induced suicide," could mean that every occupant in the vehicle, including Darlene Demarais, *679 was or may have been under the influence of drugs and that all the occupants intended to commit suicide. The trial court granted summary judgment against Sellards as next friend for Demarais. Sellards brings this appeal claiming the trial court erred in granting summary judgment because the Express-News Corporation and Kennedy failed to prove they are entitled to judgment as a matter of law and that an ambiguity exists as to whether the statements are libelous.
A movant for summary judgment must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Wilcox v. St. Mary's University of San Antonio, 531 S.W.2d 589, 592-93 (Tex. 1975); Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); TEX.R.CIV.P. 166-A(c). A summary judgment will be affirmed on appeal only if the summary judgment proof establishes a right thereto as a matter of law. The question on appeal is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff's cause of action. The judgment sought shall be rendered if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Gibbs v. General Motors Corp., supra. In determining whether a summary judgment is proper, we must keep the following rules in mind: (1) the burden of proof is on the movant; (2) we view the evidence in a light most favorable to the non-movant and resolve all doubts concerning the existence of a material fact in his favor, disregard all conflicts in the evidence, and accept as true the evidence tending to support the nonmovant; (3) we will not consider an affidavit or deposition if its credibility or weight is involved, or if it raises a mere inference; and (4) we will accept uncontradicted evidence from an interested witness as raising merely an issue of fact unless it is clear, direct, positive, and no circumstances in evidence tend to discredit or impeach it, especially if the opposite party could readily impeach the testimony. Gravis v. Abbott Laboratories, 462 S.W.2d 410, 414 (Tex.Civ.App. Corpus Christi 1970), aff'd in part, rev'd in part on other grounds, 470 S.W.2d 639 (Tex.1971).
Texas statutory law defines libel as a written or printed defamation which tends to injure the reputation of a living person and thus expose him to public hatred, contempt, ridicule, or financial injury, or impeach his honesty, integrity, virtue, or reputation. TEX.REV.CIV.STAT.ANN. art. 5430 (Vernon 1958). To determine whether a statement is libelous we must look at it from the point of view it would have on the mind of ordinary reader. We must construe it as a whole in light of all the surrounding circumstances. If the statement is ambiguous, that is if the statement may have a defamatory meaning but it is not necessarily defamatory, the issue must be submitted to the jury. Guisti v. Galveston Tribune, 105 Tex. 497, 150 S.W. 874 (1912). The trial court may not grant a summary judgment on an ambiguous statement. Beaumont Enterprise & Journal v. Smith, 687 S.W.2d 729, 730 (Tex.1985); Denton Publishing Co. v. Boyd, 460 S.W.2d 881, 884 (Tex.1970); Gartman v. Hedgpeth, 138 Tex. 73, 157 S.W.2d 139, 141 (1941); Raymer v. Doubleday & Co., 615 F.2d 241, 246 (5th Cir.), cert. denied, 449 U.S. 838, 101 S. Ct. 115, 66 L. Ed. 2d 45 (1980). The jury must determine how the statement would have been interpreted by the ordinary reader. Beaumont Enterprise & Journal v. Smith, supra; Denton Publishing Co. v. Boyd, supra; Gartman v. Hedgpeth, supra.
We believe an ordinary reader could take the statements to mean Demarais was involved with drugs and suicide. An ordinary reader could also take them to mean only the driver was involved with drugs and suicide. The statement is ambiguous and it is, therefore, error for the trial court to grant summary judgment and not submit the issue to a jury.
*680 A summary judgment may be rendered based on pleadings, depositions, answers to interrogatories, admissions, affidavits, stipulations, and certified public records. TEX.R.CIV.P. 166-A. We will consider the other possible grounds for a summary judgment. The Express-News and Kennedy filed a general denial pursuant to TEX. R.CIV.P. 92; alleged the statements were not false and/or are substantially true; that they made no defamatory statements of and concerning Demarais; and that the alleged defamatory statements are privileged. In their motion for summary judgment, defendants relied solely on the issue that the language could not be considered libelous and of and concerning Demarais.
Demarais' affidavit avers that no mention of a drug-induced suicide appears in the police reports (a copy of the police report is attached to her affidavit). She further avers none of the occupants were using or had used drugs nor had they discussed or intended to commit suicide. In her oral deposition, Kennedy states she heard the language "drug-induced suicide" used by an unidentified police officer over a police radio. The auto accident the officer referred to was not identified. There is a genuine issue of material fact concerning the truth of the statements about what was in the police reports.
The Express-News and Kennedy maintain, in support of the summary judgment, that the articles did not specifically refer to Demarais as being involved with drugs and that she clearly could not be included in the reference to suicide. Though the article did not specifically state Demarais was involved in drugs or suicide, the statement, as written, could be taken to refer to any or all of the passengers. When a group is named and the plaintiff is a readily identifiable member of the group, a cause of action for defamation exists if those who know and are acquainted with the plaintiff understand the article refers to the plaintiff. Newspapers, Inc. v. Matthews, 161 Tex. 284, 339 S.W.2d 890, 894 (1960); Poe v. San Antonio Express-News Corp., 590 S.W.2d 537, 542 (Tex.Civ.App. San Antonio 1979, writ ref'd n.r.e.); Buck v. Savage, 323 S.W.2d 363, 376-77 (Tex.Civ. App.Houston 1959, writ ref'd n.r.e.).
The Express-News and Kennedy also pleaded privilege as a defense. They presented no evidence on that issue to the trial court and is therefore not to be considered a ground for the summary judgment.
The judgment of the trial court is reversed and the cause is remanded for trial on the merits.
NOTES
[*] Assigned to this case by the Chief Justice of the Supreme Court of Texas as authorized pursuant to Paragraph (d) of Article 1812, Texas Revised Civil Statutes as amended by H.B. 2244 (Acts 1983, 68th Leg., p. 1912, Ch. 354, Sec. 1, eff. June 16, 1983).
[1] Sellards brought suit individually and as next friend of her daughter. The trial court severed the suit by Sellards individually from the suit by Sellards as next friend of her daughter and granted summary judgment only on Sellard's suit brought in her capacity as next friend. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1112521/ | 625 So. 2d 1112 (1993)
Jack E. CUTTING, Plaintiff-Appellee-Appellant,
v.
Gail CUTTING, Defendant-Appellant-Appellee.
No. 92-1358.
Court of Appeal of Louisiana, Third Circuit.
October 6, 1993.
*1113 A Steven William Hale, for Jack E. Cutting.
Rudie Ray Soileau Jr. and David LeRoy Hoskins, for Gail Cutting.
Before DOUCET, KNOLL and DECUIR, JJ.
KNOLL, Judge.
This is an appeal from a judgment partitioning the community that formerly existed between Gail and Jack E. Cutting.
Gail appeals, asserting that the trial court erred in: (1) its valuation of the disputed community assets; (2) characterizing certain *1114 community liabilities as her separate debts; and, (3) determining the reimbursements owed by the parties concerning the community residence. Jack also appeals the trial court's ruling that Gail was entitled to elect the method of payment to her of her portion of the Reynolds Metals Company Savings and Retirement Plan (Reynolds Metals Plan). For reasons which follow, we affirm the trial court's judgment as amended.
FACTS
The Cuttings married in Arkansas on May 13, 1981. Both had children from previous marriages. In January of 1984, the couple moved to Lake Charles, Louisiana where they purchased a home. Gail, Jack, and Gail's two minor children from her previous marriage, lived in the home until the Cuttings' physical separation on February 9, 1989. From that date, Jack retained the sole use and occupancy of the house until it was sold on April 30, 1991. The Cuttings legally separated on March 7, 1989, and were divorced on June 27, 1990. On April 25, 1990, Gail requested a partition of the community property.
The trial court heard the partition proceeding on December 10, 1990. On October 24, 1991, in written reasons, the trial court assigned values to and apportioned the assets and debts of the community. On May 4, 1992, Gail moved to reopen the matter for the limited purpose of adducing evidence pertinent to the entry of a Qualified Domestics Relations Order (QDRO) disposing of the parties' proportionate shares of the Reynolds Metals Plan in accordance with the trial court's written reasons for judgment. The trial court granted the motion and accepted additional evidence via joint offerings and stipulations. The trial court entered written reasons concerning the QDRO on September 8, 1992.
On September 24, 1992, after valuing and apportioning the assets and liabilities, the trial court signed a judgment which allocated the assets and debts between the parties. This original judgment erroneously ordered Gail to pay $104.79 to Jack. On the same day, the trial court corrected the judgment to order Jack to pay Gail $192.70. It also declared Gail to be entitled to a ½ interest in that portion of the benefits ultimately payable under the Reynolds Metals Plan which are attributable to Jack's employment during the existence of the community property regime, a period of 8.203 years. From this judgment, both parties bring this appeal.
VALUATION OF COMMUNITY ASSETS
Gail attacks the trial court's valuation of three disputed community assets, namely, the 1984 Nissan Maxima, the 1987 Nissan Pathfinder, and the Reynolds Metals Plan.
At trial, Jack submitted an appraisal from Lakeside National Bank which valued the Pathfinder at $10,475 and the Maxima at $4,250. Gail submitted an appraisal from National Bank of Commerce which valued the Pathfinder at $11,000 and the Maxima at $3,100. Neither party called the appraisers as witnesses at trial. Gail contends that the trial court erred because the LNB appraisal contained a high mileage deduction for the Pathfinder, which had 55,000 miles, but did not contain a high mileage deduction for the Maxima, which had over 100,000 miles.
LSA-R.S. 9:2801(4)(c) provides in pertinent part that, "[i]n allocating assets and liabilities, the court may divide a particular asset or liability equally or unequally or may allocate it in its entirety to one of the spouses...." The trial court has great discretion in partitioning community property, and it is not required to accept at face value a spouse's valuation of assets or debts, or claims against the community. Breaux v. Breaux, 555 So. 2d 1001 (La.App. 3rd Cir. 1990). Confronted with the appraisals and in absence of live testimony concerning the method of calculating appraised values, the trial court valued the Pathfinder at $10,737.50 and the Maxima at $3,675. We cannot say that this median figure constituted an abuse of the trial court's discretion.
Next, Gail attacks the trial court's valuation of the Reynolds Metals Plan. The record shows that Jack had participated in the savings plan since its inception in 1976 or 1977. Prior to his marriage on May 13, 1981, he had invested $7,171.57 of separate funds. This figure is supported by Jack's testimony *1115 and a joint exhibit reporting a balance of $7,171.57 as of June 30, 1981, approximately 48 days after the marriage. To ascertain the value of the plan as of the date the community terminated, March 7, 1989, the parties introduced one report showing a value of the plan of $42,806.77 as of December 31, 1988, 66 days prior to the termination of the community regime, and one showing a value of $46,718.07 as of June 30, 1989, 115 days after the termination of the community regime.[1]
The trial court accepted Jack's argument that the $7,171.57 value as of June 30, 1981, represented a separate property contribution and subtracted that amount to calculate community property contributions to the plan. In doing so, the suggested valuation would be between $35,635.50 and $39,546.50. The trial court apparently valued the account at a median figure of $37,581.81.
Gail contests this valuation. First, she contends that the $7,171.57 should not be subtracted because under Louisiana law, separate funds commingled with community funds are deemed as a matter of law to be the first funds withdrawn. She maintains that because Jack withdrew $12,000 to $13,000 during the marriage, he necessarily removed the entirety of the separate property funds from the plan.
Our jurisprudence shows that when separate funds are commingled with community funds to the extent that the separate funds are no longer capable of identification, and it is impossible to trace the origin of the funds, then all of the funds are considered community. See, e.g., Thibodaux v. Thibodaux, 577 So. 2d 758 (La.App. 1st Cir.1991). Jack argues that the funds are clearly traceable and were not commingled to the extent that it is impossible to establish which funds belong to the separate and community estate and, thus, Succession of Sonnier, 208 So. 2d 562 (La.App. 3rd Cir.1968), is inapplicable and the court need not allocate the $12,000-$13,000 from the separate funds first.
In Sonnier, a deposit of $17,500 was made from Jean Batiste Ardoin's separate funds. Subsequently withdrawals amounting to $8,645.36 were made from the account before the death of his wife, Evangeline Sonnier. The Third Circuit stated at page 569:
"Since there is a presumption that all of the funds in the checking account belonged to the community, and the burden rests on Ardoin to establish the contrary, it seems proper to us to regard all of the withdrawals made from this account during the period beginning November 10, 1965, and ending May 22, 1966, as having come from Ardoin's separate funds. This leaves a balance of $8,854.64 in the checking account at the time of Evangeline Sonnier's death which the evidence establishes as belonging to the separate estate of Ardoin. The remaining balance of $2523.87 which was in the checking account at the time of her death must be classified as community property." (Citation omitted.)
We are further persuaded by Professor Katherine Sphat's comments[2] concerning the presumption in Sonnier:
"... [There is a] presumption that withdrawals from an account in which community and separate funds are commingled are presumed to come first from separate funds. This may or may not have a basis in reality, but it would seem to be a corollary consistent with the presumption of community; what remains in the account is subject to the presumption. At least one author suggests this approach is a reasonable one: `There is a problem, of course, when community and separate fungibles or funds have been placed in a single pool or account from which withdrawals have been made without records over so long a period as to make a tracing of values impossible. In that case it may be legitimate to have a presumption in favor of the community character of the thing, for in this way the most any spouse could lose under the formula is half of that to which he would have been entitled." (Footnotes omitted.)
In Succession of Russo, 246 So. 2d 26 (La. App. 4th Cir.1971), writ denied, 258 La. 760, 247 So. 2d 861 (1971), Mrs. Russo had opened *1116 an account with $8,966.32 of separate funds. With the exception of credits to the account for interest earned, the only other deposits made were two totaling $343 of admittedly community funds. As of the date of her death, the balance in the account, after various withdrawals, was $7,521.09. The Fourth Circuit found it clear that the commingling of the amount deposited originally by Mrs. Russo and the $343 of community funds is inconsequential and did not cause the funds to lose their separate identities. The court then recognized that in conformity with the rationale of Sonnier, all subsequent withdrawals from such an account are made from separate funds. The court found that the withdrawals came first from Mrs. Russo's separate funds, the $343 community property was preserved, and the remaining sum was Mrs. Russo's separate property.
We find the present case analogous to the Russo case. In the present case, the separate and community funds were commingled, but not to the extent as to cause the funds to lose their identities.[3] Under the rationale of Russo, the withdrawals come first from separate funds. Thus, without evidence to the contrary, we presume that the $12,000 to $13,000 withdrawn by Jack first depleted his separate funds of $7,171.57. As such, we conclude that the trial court erred in deducting the $7,171.57 from the total amount of funds in the account when the community regime terminated. Thus, we find that the savings plan should be valued at $42,806.77 as of December 31, 1988, and $46,718.07 as of June 30, 1989.
Gail also contends that the trial court should have prorated to determine the value of the account instead of dividing the difference between the values as of December 31, 1988, and June 30, 1989, to determine its value as of March 7, 1989. We agree and prorate to recalculate the value of the account as of March 7, 1989. We determine that this value equals $44,232.37 ($21.60 per day for 66 days [$1,425.60] plus the beginning balance, $42,806.77) as of March 7, 1989, the date the community terminated.
Next, Gail contends that the trial court failed to consider the investment return of the plan which she alleges amounts to a return between 9% and 10%. However, Gail failed to submit any evidence to value the account based on an assumed average return of 9% to 10%. At trial, Jack, under cross-examination stated that he did not know what, if any, investment return the community received on this savings and investment plan. The trial court after hearing and evaluating the testimony was obviously not satisfied that Gail had met her burden of proving that the account earned any assumed rate of return. Thus, we find no error by the trial court in not adding a rate of return to its valuation of the account.
CHARACTERIZATION OF COMMUNITY LIABILITIES
In her next contention of error, Gail argues that the trial court erred in characterizing the following accounts as her separate liabilities:
Beall-Ladymon: $ 614.28
FNB VISA: 1,426.98
Citibank VISA: 5,025.16
Discover: 1,162.83
Gaidry's: 810.24
Commercial Securities: 2,100.00
Commercial Credit: 1,235.17
__________
Total: $12,374.66
LSA-C.C. Art. 2361 provides:
"Except as provided in Article 2363, all obligations incurred by a spouse during the existence of a community property regime are presumed to be community obligations."
Article 2363 provides in pertinent part:
"A separate obligation of a spouse is one incurred by that spouse prior to the establishment of a community property regime, or one incurred during the existence of a community property regime though not for the common interest of the spouses or for the interest of the other spouse."
*1117 At trial, Jack testified that he was unaware of the existence of several of the accounts and does not know how the use of the accounts resulted in any benefit to the community or himself, or what purchases or transactions were made. Gail and Jack testified that Jack knew of the Beall-Ladymon account, but did not know what type of purchases were made. Gail testified that she purchased items for her children from a prior marriage, Lance and Laurie, and for Jack, Jack's mother, and his son.
She admitted that she opened the First National Bank Visa account by forging Jack's signature on the application. She does not recall what purchases she made on that account. With the Citibank Visa account, Gail remembers that the majority of purchases on that account were for the children, and herself, and she remembers purchasing tires. Admittedly, these were made without Jack's knowledge. Also, she requested cash advances to pay her car insurance and other bills. She charged more unidentified purchases without Jack's knowledge on the Discover Card and Gaidry's account, and obtained a loan with Commercial Securities. Furthermore, she obtained a loan from Commercial Credit, which she used to help her son.
Although neither party could identify the specific purchases made through the disputed accounts, Gail did describe the types of purchases and payments she made such as, clothing for herself and her children, various bill payments, school supplies, tires and insurance for her car, and items for Jack, and his mother and his son. These expenditures presumptively benefitted the community. See, e.g., Ledet v. Ledet, 496 So. 2d 381 (La. App. 4th Cir.1986); First Security Bank & Trust Co. v. Dooley, 480 So. 2d 842 (La.App. 2nd Cir.1985); but, see, First Nat. Bank of Commerce v. Ordoyne, 528 So. 2d 1068 (La. App. 5th Cir.1988), writ denied, 532 So. 2d 179 (La.1988), in which the court found that under Article 2363, the presumption of community status does not apply to "[a]n obligation resulting from an intentional wrong not perpetrated for the benefit of the community."
Jack relies on the fact that he never knew of nor approved many of the purchases. However, Gail was not required to obtain his consent. See, Ledet, supra. In fact under LSA-C.C. Art. 2346, either spouse acting alone may manage, control, or dispose of community property unless otherwise provided by law. Comment (a) to article 2346 states:
"This provision establishes the principle of equal management of community property. Each spouse has the right to manage community property without the consent or concurrence of the other spouse unless otherwise provided by law."
The exceptions to LSA-C.C. Art. 2346 are set forth in LSA-C.C. Art. 2347, but none apply to the instant case. Thus, by law, Gail had the managerial authority to incur a community obligation, notwithstanding the lack of her husband's consent or concurrence.
Furthermore, Jack relies on the fact that some of the debts were incurred for the daily living expenses and necessities of Lance and Laurie, Gail's children from a prior marriage. Jack's argument overlooks LSA-C.C. Arts. 227 and 2362.
Under Article 227 parents have an alimentary obligation imposed by law to provide their children with nourishment, lodging, support, and education. Article 2362 further characterizes a spouse's alimentary obligation as a community obligation. As noted by Professor Janet Mary Riley in her law review article, Matrimonial Regimes Law, 26 Loyola Law Review 500 (1980), these obligations do not fit the general definition of community obligations. When a parent, such as Gail, fulfills her alimentary obligation, it is a community obligation and the non-parent spouse may not demand repayment. See also, Connell v. Connell, 331 So. 2d 4 (La.1976).
In conclusion, we find that the trial court erred in characterizing the above listed disputed liabilities as Gail's separate obligations because Jack failed to rebut the presumption that the liabilities are community. Therefore, we amend the trial court's judgment to reflect these obligations as community.
*1118 REIMBURSEMENT
We easily resolve Gail's assignment of error that the trial court erroneously calculated the total reimbursement due Jack from Gail for mortgage payments made on the community home by him after the termination of the community. The parties agree, and the record supports that the total reimbursement due is $8,158.80, not $8,257.23 as the trial court calculated.
Next, Gail attacks the trial court's failure to award her claim for rental value for Jack's use and occupancy of the community home. The decision to award rent to a nonoccupant spouse rests within the discretion of the trial court. LSA-R.S. 9:374; Jones v. Jones, 605 So. 2d 689 (La.App. 2nd Cir.1992), writ denied, 607 So. 2d 571 (La.1992); Rozier v. Rozier, 583 So. 2d 87 (La.App. 3rd Cir. 1991).
In the present case, the trial court found that:
"[t]here was no evidence furnished at trial of this matter which supports any claim for rental value owed to Mrs. Cutting by Mr. Cutting. The Court does not recognize this claim. See La. Revised Statutes 9:374, Bolden v. Bolden, 524 So. 2d 10 (La. App. 1st Cir.1988) and Wochomurka v. Wochomurka, 552 So. 2d 405 (La.App. 1st Cir.1989)."
Gail asserts that Jack's expert appraiser established a fair rental value of $625 for the family residence. Holly Heard, the expert appraiser, testified as follows:
"Q. You have a lot of information about this house, of course. What's the rental value of this home?
A. Oh, I'm not familiar with the rental areas out there, but usuallyLet me just look at something here.
Q. Yes, sir.
A. I'd say $625 a month."
The trial court apparently concluded that the estimated rental value was merely speculative. We cannot find that the trial court's refusal to award Gail rent for Jack's occupancy of the community home was an abuse of discretion. Thus, we find that this assignment of error lacks merit.
In conclusion, we amend the apportionment of the assets and liabilities as follows:
COMMUNITY ASSETS
Trial Court's Amended
Description Value Value
1. Sale proceeds, 3717 Pin Oak Court 35,930.46
2. Reynolds Savings & Investment Plan 37,581.81 44,232.37
3. 1984 Nissan Maxima 3,675.00
4. 1987 Nissan Pathfinder (subject to mtg) 5,481.50
5. 1986 Boat, Motor & Trailer 2,800.00
6. Credit Union Account # 137 1,075.00
7. Gail Cutting Retirement Fund 1,936.62
8. LNB Savings Account 2,322.64
9. LNB Checking Account 837.88
10. FNB Checking Account 396.45
11. Reynolds Retirement Plan Sims v. Sims (Presently incalculable)
________________________________________
Total Assets: 92,037.36 98,687.92
COMMUNITY LIABILITIES
1. Sears, Roebuck (438.00)
2. LNB VISA (48.00)
3. Beall-Ladymon (614.28)
4. FNB VISA (1,426.98)
5. Citibank VISA (5,025.16)
6. Discover (1,162.83)
7. Gaidry's (810.24)
8. Commercial Securities (2,100.00)
9. Commercial Credit (1,235.17)
____________
Total Liabilities: (12,860.66)
*1119
RECAPITULATION
Total Assets: 92,037.36 98,687.92
Total Liabilities: (486.00) (12,860.66)
__________ ____________
Net Value of Community: 91,551.36 85,827.26
Net Value of ½ Interest: 45,775.68 42,913.63
PARTITION OF COMMUNITY ASSETS AND LIABILITIES
TO JACK CUTTING
1. ½ proceeds, 3717 Pin Oak Court 17,965.23
2. Reynolds Savings & Investment Plan 37,581.81 44,232.37
3. 1987 Nissan Pathfinder ( & mtg) 5,481.50
4. 1986 Boat, Motor, & Trailer 2,800.00
5. Credit Union Account # 137 1,075.00
6. LNB Savings Account 2,322.64
7. LNB Checking Account 837.88
8. Reynolds Retirement Plan (Sims v. Sims) (Presently incalculable)
__________________________________
Total Value Distributed: 68,064.06 74,714.62
Liabilities
1. Sears, Roebuck (438.00)
2. LNB VISA (48.00)
__________
Total Liabilities Distributed: (486.00)
Net Value Distributed: 67,578.06 74,228.62
TO GAIL CUTTING
Assets
1. ½ proceeds, 3717 Pin Oak Court 17,965.23
2. 1984 Nissan Maxima 3,675.00
3. Gail Cutting Retirement Fund 1,936.62
4. FNB Checking Account 396.45
5. Reynolds Retirement Plan (Sims v. Sims) (Presently incalculable)
______________________________________
Total Value Distributed: 23,973.30
Liabilities
None 0.00
1. Beall-Ladymon (614.28)
2. FNB VISA (1,426.98)
3. Citibank VISA (5,025.16)
4. Discover (1,162.83)
5. Gaidry's (810.24)
6. Commercial Securities (2,100.00)
7. Commercial Credit (1,235.17)
_____________
Total Liabilities (12,374.66)
Net Value Distributed: 23,973.30 11,598.64
CREDITS TO JACK CUTTING
1. Alimony advanced to defendant 1,600.00
2. ½ mortgage payments made with separate funds 8,257.23 8,158.80
3. ½ separate funds invested in community property 11,752.50
__________
Total Additional Credits: 21,609.73 21,511.30
Our amendments require adjusting the cash pay-out to Gail. Jack is entitled to receive a value equal to one-half the net *1120 value of the community ($42,913.63), plus the additional credits due him ($21,511.30), for a total entitlement of $64,424.93. Gail is entitled to her one-half interest in the net value of the community ($42,913.63), less credits due Jack ($21,511.30), for a total of $21,402.33.
The net value of the actual distribution in kind to Jack is $74,228.62. If we subtract his $64,424.93 entitlement from this amount, we find that he obtained $9,803.69 more than his entitlement. The net value of actual distribution to Gail is $23,973.30, $9,803.69 less than her entitlement ($42,913.63 minus $11,598.64 liabilities allocated to her minus credits to Jack of $21,511.30). Therefore, we order Jack to pay Gail $9,803.69 plus legal interest thereon from date of judicial demand until paid.
We note that the trial court awarded legal interest on the equalizing cash payment due to Gail from the date of judicial demand, until paid. Because Jack did not assign this as error, we pretermit any discussion on the correctness of this legal interest award. See, Vice v. Vice, 567 So. 2d 774 (La.App. 3rd Cir.1990); Barbin v. Barbin, 546 So. 2d 609 (La.App. 3rd Cir.1989); and, compare, Oliver v. Oliver, 561 So. 2d 908 (La.App. 2nd Cir. 1990).
RETIREMENT PLAN
Jack appeals the trial court's judgment, asserting that it committed manifest error when it ruled that Gail was entitled to determine how her portion of the benefits in the Reynolds Metals Plan be paid.
On May 4, 1992, Gail moved the trial court to reopen the evidence pertinent to the entry of a QDRO[4] to determine whether Gail's proportionate benefits should be paid in the form of a joint and 50% survivor's annuity or in the form of a straight life annuity. In written reasons for judgment dated September 8, 1992, the trial court addressed the issue of who may select the manner by which each spouses' interest in the plan is to be paid and from what source it is to be paid. The trial court stated:
"Mrs. Cutting, as an owner of the interest that she possesses, is entitled to determine how her portion is to be paid. Her selection of a method will in no way affect the way Mr. Cutting will be paid. Her selection does not prohibit Mr. Cutting from selecting any other manner of payment that he may chose [sic] with reference to his interest in the Plan. She would not gain any benefit other than the right to receive as much as she can from the interest that she owns in the Plan.... [S]he does have the right to designate how that proportionate interest and only that proportionate interest should be paid."
Under the straight life annuity option, the amount of the total retirement benefits payable would be calculated in accordance with the provisions of the Reynolds Metals Plan. That portion of the total benefits owned by Gail would then be calculated in accordance with the Sims v. Sims formula, and would be paid directly to her. The difference between Gail's benefit amount and total benefit amount would be paid directly to Jack. Under this option, all benefits payable to Gail would terminate upon Jack's death.
Under the qualified joint and 50% survivor annuity option, the amount of the total retirement benefits would be calculated, and that amount would be reduced in accordance with *1121 the provisions of the Plan in order to pay the cost of the joint and 50% survivor annuity option. That portion of the net benefits owned by Gail would then be calculated in accordance with the Sims formula, and would be paid directly to her. The difference between Gail's benefit amount and the net benefit amount would then be paid to Jack. Under this option, the amount of the benefits paid to Jack and to Gail during Jack's lifetime would be less than the amount of the benefits paid under the straight life annuity option. In addition, the amount of the benefits paid to Jack's present wife after his death should he elect to provide her with a survivor annuity would likewise be less than the benefit amount she would receive if Gail received a straight life annuity. The benefits payable to Gail under this option, however, would not terminate upon Jack's death. Rather, Gail would continue to receive 50% of her original benefit amount for her lifetime.
The right to receive benefits payable from the retirement plan, whether in the form of a straight life annuity or 50% survivor annuity, is, to the extent attributable to the spouse's employment during the community, a community asset. Sims v. Sims, 358 So. 2d 919 (La.1978); Johnson v. Johnson, 532 So. 2d 503 (La.App. 1st Cir.1988). Our jurisprudence, however, has not been extended to recognize that a non-employee spouse may dictate how the retirement funds are invested and ultimately paid.
When the community is dissolved, the non-employee spouse is entitled to have her interest in the employee spouse's pension rights recognized. Sims, supra; Johnson, supra. Only if and when the employee spouse decides to retire will the retirement benefits become payable. Sims, supra. Until that time, the monetary value cannot be fixed.
The Sims opinion recognizes the difficulty of valuing annuities until distribution because of the numerous variables which affect the ultimate pay-out. Allowing a former spouse to dictate how her portion of her ex-husband's retirement benefits will be paid will add more uncertainty to the valuation computation, further complicating investment practices. The possibility of several former spouses and/or a current spouse, as in the present case, further complicates the issue. Thus, we find that allowing the non-employee spouse to elect the method of payment is undesirable. Furthermore, in Sims, footnote 4, the court noted that until the husband retired, "the community's retirement-plan interest, as yet inchoate, is in annuities or lump-sum payments to become payable in the future, as determined by the husband's good-faith election of options available to him...." (Emphasis added). Katherine Spaht in her article "To Divide or Not to Divide the Community Interest in an Unmatured Pension: Present Cash Value v. Fixed Percentage, 53 La.L.Rev. 3 (Jan 1993) recognizes the duty of the employee spouse to exercise control of the co-owned asset in good faith. We find that the employee spouse, Jack Cutting, not the non-employee spouse, Gail Cutting, has the right to elect, in good faith, the retirement annuity option. Thus, we amend the trial court's decision regarding this issue.
CONCLUSION
In summary, we affirm the trial court's valuation of the Nissan automobiles; we amend the trial court's valuation of the Reynolds Metals Plan to a value of $44,232.37; we recharacterize as community liabilities certain accounts which the trial court found to be Gail's separate liabilities; we amend the reimbursement due Jack from Gail for mortgage payments made on the community home to $8,158.80; and we deny Gail's claim for rental value for Jack's use and occupancy of the community home. The above is support for our judgment ordering Jack to pay Gail $9,803.69 plus legal interest thereon from date of judicial demand until paid. Additionally, we amend the trial court's judgment insofar as it allows Gail to elect how her portion of Jack's retirement benefits is to be paid. We find that Jack, the employee spouse, maintains the right to make the good faith election of retirement options.
For the above and foregoing reasons, the judgment of the trial court is affirmed as amended. Costs of this appeal are assessed equally between Jack and Gail Cutting.
*1122 AFFIRMED AS AMENDED AND RENDERED.
NOTES
[1] Valuations were reported every 6 months.
[2] K. Spaht & W. Hargrave, 16 Louisiana Civil Law Treatise, Matrimonial Regimes § 4.5 at 131 (1989).
[3] The record does not show specifically how the funds were used, but merely states that the funds were ultimately exhausted.
[4] The QDRO provides in part in paragraph 5:
"[t]he portion of the benefits payable under the Plan that are attributable to the Participant's employment during the existence of the community property regime shall be computed by multiplying (a) the amount of the total benefits payable under the Plan as of the date such payments begin in the form of a qualified joint and 50% survivor annuity, after applying all applicable reductions, times (b) a fraction, the numerator of which is 8.203 years, and the denominator of which is equal to the Participant's total years of pension service under the Plan as of the date payments begin.
The Participant may receive benefits in any form of annuity permitted under the Plan, so long as the benefit payable to the Alternate Payee under this formula is computed on the basis of the Participant's being paid in the form of a qualified joint and 50% survivor annuity."
Paragraph 7 provides that the alternate payee shall be treated as a spouse under the Plan for purposes of post-retirement survivor benefits to the extent of the proportionate share described in paragraph 5. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1162681/ | 830 P.2d 554 (1990)
113 N.M. 637
STATE of New Mexico, Plaintiff-Appellee,
v.
Timothy DUNCAN, Defendant-Appellant.
No. 10563.
Court of Appeals of New Mexico.
May 31, 1990.
*555 Hal Stratton, Atty. Gen., Margaret McLean, Asst. Atty. Gen., Santa Fe, for plaintiff-appellee.
J. Michael Norwood, UNM Clinical Law Program, Albuquerque, for defendant-appellant.
OPINION
APODACA, Judge.
Defendant appeals his jury convictions for aggravated burglary, kidnapping, false imprisonment, two counts of armed robbery, six counts of criminal sexual penetration (CSP) in the second degree, two counts of attempt to commit CSP in the second degree, and unlawful taking of a motor vehicle. He raises three issues on appeal: the trial court erred in (1) excluding the expert testimony of a psychologist concerning the character of the person defendant claimed coerced him, offered in connection with his defense of duress; (2) refusing defendant's requested jury instruction also relating to his defense; and (3) instructing the jury on the CSP charges where the evidence was insufficient to support the instruction. We reverse and remand for a new trial on the first issue, concluding the trial court's exclusion of the testimony denied defendant his defense of duress in that the coercer's character was an essential element of the defense.
We also address the second and third issues because they may arise again at a second trial. As to those issues, we affirm because we conclude the trial court did not err in refusing the tendered instruction and in instructing the jury on the CSP charges.
FACTS
A. Factual Background
Defendant met the primary victim (Polly) and her husband through a prison fellowship program while defendant was incarcerated at the Los Lunas Correctional Facility (the facility). Defendant temporarily stayed with Polly's family after he was released from the facility in 1985. Their friendship continued after defendant moved into his own place. Both Polly and defendant testified that defendant thought of Polly as a mother or grandmother. She would often assist him by arranging transportation and dental appointments. Ultimately, another inmate, Jim Wiggington, was released from the facility sometime in late July 1986.
*556 Defendant has been in and out of correctional institutions most of his life. He first met Wiggington in 1980 while they were incarcerated at the state penitentiary in Santa Fe. Eventually both were transferred to the facility, where they continued to be friends. In both institutions, they appeared to have been living in the same unit and to have spent a good deal of time together.
Wiggington had bragged to defendant that he had killed people during the 1980 riot but had not been caught. Both of them, along with other inmates, spent a fair amount of time playing Dungeons and Dragons, a fantasy quest game. Most inmates played to pass the time; Wiggington, however, played to antagonize and intimidate. He also seemed to particularly enjoy bullying and intimidating defendant while playing the game. One of his tactics was to "discover" and "kill," in bizarre ways, members of defendant's imaginary family. Defendant was aware Wiggington received counseling at the facility. It was this counseling that gave rise to the expert testimony at issue in this appeal.
B. Facts Surrounding the Incident
The charges against defendant grew out of an incident that occurred during the late night hours of August 5 and the early morning hours of August 6, 1986. Wiggington had been released about a week or ten days before the incident. Defendant had stored some boxes of Wiggington's personal belongings in Polly's garage. On July 30, 1986, defendant, Wiggington, and another former inmate went to Polly's home to get the boxes. Although they were there for only thirty minutes, they learned that Polly's husband would be away on the night of August 5.
On August 5, Wiggington picked up defendant at work. Instead of taking defendant home, Wiggington took him to a supermarket near Polly's house. He told defendant that they were going to play Dungeons and Dragons "for real" that night. He pulled a knife out of a satchel and told defendant he was going to use it to cut Polly's throat. Defendant protested, saying he loved Polly like a mother. Wiggington told defendant that if defendant went along, he would not have to kill Polly.
Defendant testified he accompanied Wiggington to prevent him from killing Polly and also because he feared Wiggington would kill him if he refused to go. Wiggington's use of the phrase "are you with me or against me," as well as his reference to the fact that he believed himself to be a magical person who would not be caught, reminded defendant of the way Wiggington had played Dungeons and Dragons. Defendant thought Wiggington was crazy, that he was extremely unstable, and that, if defendant refused to go with him, Wiggington would go alone and kill Polly.
At the supermarket, Wiggington told defendant to telephone Polly. Still possessing the knife, Wiggington was present when the call was made. Polly agreed to pick up defendant so he could spend the night at her house. When she arrived, Wiggington persuaded her to let him stay at the house also.
They arrived at Polly's home about 11:15 p.m. Polly went into her bedroom to get clean sheets, and Wiggington followed her. He immediately pulled the knife and told Polly he was going to rape and rob her. Throughout the course of the night, he forced her to commit various sexual acts. On several occasions during the night, at Wiggington's request, defendant brought coffee and cigarettes to Wiggington in the bedroom.
During the night, Wiggington told Polly he was possessed by two spirits, Dramasus and another whose name Polly could not remember. Wiggington considered himself a warlock who had sold his soul to the devil. The knife he was going to use to kill Polly had been dedicated on an altar for that purpose. Dramasus was mad at Polly because she had hung up the phone on Dramasus. Dramasus was also telling Wiggington to do terrible things to her because of her strong Christian faith.
Later, Wiggington attempted to murder Polly by suffocating her. He directed defendant to do the same to Paula, an exchange student living with Polly and her *557 husband. Paula also had been kept hostage during the night. Defendant did not do what Wiggington instructed. Instead, he eventually persuaded Wiggington to leave the two women alive. They then left with household belongings defendant had stacked in the living room during the night.
SUMMARY OF TRIAL PROCEEDINGS
A brief summary of what occurred at trial will provide an understanding of how the testimony exclusion issue arose. Wiggington did not testify at trial. Thus, the facts regarding Wiggington and the incident were introduced through the testimony of Polly, Paula, and defendant. A psychologist called by defendant and a psychiatrist called by the state testified concerning defendant's psychological status. There was little, if any, conflict in the facts of the incident. Defendant's defense of duress was premised on two contentions: (1) he had gone along with Wiggington because he was afraid Wiggington would kill Polly if he did not; (2) he feared Wiggington would kill him also, if he did not do as Wiggington directed.
Before trial, the state had moved to exclude the testimony of defendant's two psychologists. The trial court reserved ruling on the motion until trial. At trial, the state renewed its motion and requested a ruling. The expert testimony of only one of the psychologists is at issue. The state represented the testimony as follows:
[The psychologist's] sole purpose for testifying is that he knows ... Wiggington;... he worked with [him] as a patient at Los Lunas; ... he believes that ... Wiggington is a very scary person. On one occasion he has seen ... Wiggington transform himself into a different physical appearance; ... he's changed the color of his skin and not through the use of make-up; and ... he's changed the shape of his face; and ... he believes... Wiggington is a very frightening, ... menacing person.
Defendant later adopted this statement as his offer of proof, with the addition of the fact that the psychologist had been employed by the Corrections Department for seven years.
The state asserted that the expert testimony was about things "years ago." Defendant countered that the psychologist had treated Wiggington until he was released from the facility just a few days before the crime was committed. Relying on State v. Bazan, 90 N.M. 209, 561 P.2d 482 (Ct.App.1977), defendant argued the evidence was admissible under SCRA 1986, 11-405(B). He contended this case was one in which character or a trait of character of a person was an essential element of a charge, claim or defense. The trial court initially ruled the evidence was not relevant, but the discourse continued. The state again maintained that the physical transformation to which the psychologist would testify "preceded this incident by a considerable period of time." The trial court, apparently focusing only on the events that occurred on the night of the incident, finally concluded there was no evidence of a physical transformation of Wiggington on that night and disallowed the testimony as irrelevant.
DISCUSSION
A. Exclusion of Expert Testimony
To hold that the trial court committed reversible error, we must conclude that the error affected a substantial right of defendant. SCRA 1986, 11-103(A). An accused has a fundamental right to present evidence of a defense as long as the evidence is relevant and is not excluded by an established evidentiary rule. Commonwealth v. Greene, 469 Pa. 399, 366 A.2d 234 (1976).
Defendant contends his prior experiences with Wiggington were relevant to the issue of duress and that Wiggington's character was an essential element of the defense. This argument is based in part on an analogy to self-defense cases, since there are presently no cases in New Mexico directly on point. Defendant also argues that the expert testimony was important to corroborate his own testimony, particularly concerning Wiggington's alter ego. As part of this argument, defendant contends the psychologist was prepared to testify concerning defendant's character, Wiggington's character, and the interaction between the *558 two. This contention, however, was not in the offer of proof, and therefore was not preserved for our review. We thus do not address it. In countering defendant's arguments, the state essentially contends the testimony was both irrelevant and constituted inadmissible character evidence under SCRA 1986, 11-404.
Relevance does not exist in a vacuum; instead, it is the logical relationship between evidence and a proposition in issue that the party seeks to prove. Cf. State v. Martin, 101 N.M. 595, 686 P.2d 937 (1984) (character evidence of defendant's prior husband found irrelevant, for it failed to show a logical connection to the crime charged). For this reason, it would be useful to consider what defendant was attempting to prove in support of his defense.
The elements of a duress defense are stated in the uniform jury instructions, SCRA 1986, 14-5130:
Evidence has been presented that the defendant was forced to .............. under threats. If the defendant feared immediate great bodily harm to himself or another person if he did not commit the crime and if a reasonable person would have acted in the same way under the circumstances, you must find the defendant not guilty.
The burden is on the state to prove beyond a reasonable doubt that the defendant did not act under such reasonable fear.
Relevant evidence is defined by the rules of evidence, SCRA 1986, 11-401, as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Additionally, SCRA 1986, 11-402 provides, "All relevant evidence is admissible, except as otherwise provided by constitution, by statute, by these rules or by other rules adopted by the supreme court."
Both parties represent that the specific issue in this appeal, that is, the relevance of psychological testimony concerning the coercer, has not been addressed in New Mexico. We agree. Yet, the few cases existing on the duress defense strongly suggest that the relationship between a defendant and the coercer is relevant in determining the existence of a threat, as well as its immediacy. See, e.g., Esquibel v. State, 91 N.M. 498, 576 P.2d 1129 (1978) (holding duress is a defense, and the evidence was sufficient to present a jury issue on the immediacy of the danger where there was a long history of beatings of defendant by guards and the most immediate episode was two to three days before defendant's escape from the penitentiary); State v. Torres, 99 N.M. 345, 657 P.2d 1194 (Ct.App.1983) (evidence that woman had been beaten by man she referred to as her common-law husband over a period of seven years, the last of which occurred two or three days before the crime, was sufficient to present question for the jury; trial court erred in instructing that husband had to be present in the store at the time of the fraud).
By analogy to the self-defense cases, defendant contends the character of the coercer is an element of the claim or defense. We agree. See State v. Branchal, 101 N.M. 498, 684 P.2d 1163 (Ct.App. 1984) (holding it was reversible error to exclude prior acts of the victim, in part because they bear directly on defendant's perception of danger); State v. Melendez, 97 N.M. 740, 643 P.2d 609 (Ct.App.1981), rev'd on other grounds, 97 N.M. 738, 643 P.2d 607 (1982) (specifically holding that evidence of the reputation of the victim is admissible as probative evidence of "`an essential element of ... [self-] defense'") Cf. State v. Smith, 92 N.M. 533, 591 P.2d 664 (1979) (no abuse of discretion to exclude evidence of the victim's drug habit in a first degree murder conviction). We note that, in Bazan, the defendant had not raised self-defense. For that reason, the character evidence at issue was treated as collateral rather than as an essential element of a claim or defense. Indeed, such evidence has been held admissible even if the defendant was unaware of the victim's character or reputation. See State v. Montoya, *559 95 N.M. 433, 622 P.2d 1053 (Ct.App. 1981).
In the context of cases where self-defense was an issue, the exclusion of such evidence has been held to be reversible error, even if a defendant or other witnesses testified to the specific acts independently. See State v. Ardoin, 28 N.M. 641, 216 P. 1048 (1923) (reversible error to exclude evidence of prior specific acts of victim to third person, even though defendant testified victim had told him of the specific act); State v. Chesher, 22 N.M. 319, 161 P. 1108 (1916) (reversible error to exclude testimony by defendant's witnesses concerning a conversation between himself and the victim, even though defendant had testified to the conversation himself); State v. Melendez (reversible error to exclude testimony of police officers concerning reputation of victim, even though defendant had testified concerning reputation of victim); State v. Elliott, 96 N.M. 798, 635 P.2d 1001 (Ct. App.1981) (reversible error to exclude expert testimony concerning defendant's intent, even though lay witnesses have testified on the same issues); State v. Brown, 91 N.M. 320, 573 P.2d 675 (Ct.App.1977), aff'd on other grounds, 91 N.M. 349, 573 P.2d 1204, cert. denied, 436 U.S. 928, 98 S. Ct. 2826, 56 L. Ed. 2d 772 (1978) (reversible error to exclude psychologist's testimony concerning defendant's fear of police, even though lay witnesses testified on the same issues).
We understand the state's argument on relevancy to be that, because the standard on the duress issue is an objective one, expert psychological testimony is not necessary or relevant. We need not decide whether this argument is a correct characterization of the standard. To be sure, the plain language of the jury instruction on duress suggests to us that the standard consists of both subjective and objective components: (1) did defendant in fact fear immediate great bodily harm?; if he did, (2) would a reasonable person have acted in the same way under the circumstances? In 2 P. Robinson, Criminal Law Defenses Section 177(d), (f) (1984), Robinson suggests that the first part of the standard is a subjective rather than an objective test. See also State v. Gallegos, 104 N.M. 247, 719 P.2d 1268 (Ct.App.1986) (holding, in a self-defense case, that the standard has both subjective and objective components).
In their respective briefs, the parties have discussed the various factors considered in assessing the objective aspect of the defense of duress. Additionally, both parties rely on Robinson's treatise as authority, and among the factors cited by Robinson as appropriate to be considered is the apparent likelihood of execution of the threat. From a strictly practical point of view, it would appear that the character of a defendant and of the alleged coercer, including their respective psychological makeup, are relevant to the issue of the likelihood of the execution of the threat.
We believe defendant's purpose in introducing the expert testimony was to prove the gravity of the threat in connection with his defense of duress. Evidence bearing on the question of aggression and on defendant's reasonable apprehension are material and relevant. See State v. Ardoin (the court found reversible error in the exclusion of victim's prior violent acts in defendant's claim of self-defense). Based on our discussion, we hold that the expert testimony was relevant.
The state contends the expert testimony was not admissible under any of the exceptions under Rule 11-404, even if we determined it was relevant. However, in Bazan, we held that, where character is an element of the crime, claim or defense, testimony of such character is relevant. As such, that evidence is not prohibited under Rule 11-404 and is admissible under Rule 11-402. State v. Bazan. Such character evidence may be proved by three methods: (1) reputation; (2) opinion; or (3) specific instances of conduct. Id. Obviously, the expert testimony at issue here encompasses one of these methods. Our inquiry is not completed, however.
Having determined that the expert testimony was relevant under Rule 11-401 and admissible under Rule 11-402, the only question remaining is whether the trial court could have excluded it under SCRA *560 1986, Rule 11-403, which provides: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues or misleading the jury, or by considerations of undue delay, waste of time or needless presentation of cumulative evidence."
We hold that the expert testimony was not excludible under Rule 11-403. Exclusion for "unfair prejudice" involves an undue tendency to suggest a decision on an improper basis, usually on emotions. See 28 U.S.C.A. R. 403 note 189, at 191. We fail to see how the expert testimony would have injected an emotional element into the trial proceedings. Instead, the psychological evidence could have afforded the jury a further explanation of the rather bizarre events that transpired on the night of the incident. Neither was the proffered testimony misleading nor confusing, since it tended to identify, explain or corroborate the fear and threat testified to by defendant and the immediacy of the threat. Finally, the testimony was not cumulative and would not have unduly delayed the trial. On the contrary, defendant was entitled to buttress his testimony concerning his fear of Wiggington, as well as to explain Wiggington's actions on the night of the incident. Defendant should not be expected to depend solely on Polly's and Paula's testimony, which was a part of the state's case, for this purpose.
The state relies on State v. LeMarr, 83 N.M. 18, 487 P.2d 1088 (1971), contending there is a factual similarity between that case and this appeal. In LeMarr, our supreme court held that the trial court had properly refused the defendant's jury instruction on duress, where the evidence showed: (1) the coercer threatened the defendant with a knife but later handed the knife to the defendant; and (2) the defendant had several opportunities to escape. The state argues that in this case, like in LeMarr, defendant had a number of opportunities to escape.
We reject the state's argument for two reasons. First, this court has held that LeMarr was not to be read literally on the issue of the immediacy of the compulsion, given the holding of Esquibel that the issue of immediacy is a question of fact. State v. Torres, 99 N.M. at 347, 657 P.2d at 1196. Second, LeMarr is factually distinguishable. There, the defendant argued he was compelled by threats against himself. Here, the evidence indicated that defendant was concerned not only for himself but for Polly. He specifically testified he went along in order to prevent Wiggington from killing Polly. When the fear is for a third person, it would seem that opportunities for a defendant to escape are less compelling on the issue of immediacy.
The state further argues that expert testimony was not "necessary" and that defendant's testimony, as well as Polly's and Paula's testimony, was "sufficient" to provide the jury with a "reasonable basis" from which it could decide defendant's duress claim. The state also claims that defendant could have called Wiggington as a witness. We believe this argument begs the question and consequently fails. Polly had met Wiggington only once before, for thirty minutes. Paula never had. Wiggington had invoked his fifth amendment right against self-incrimination and refused to testify. As noted in Melendez, Chesher, and Ardoin, in a case involving this kind of defense, the credibility of a defendant is on the line. For that reason, it is extremely important that he be allowed to buttress his testimony through the testimony of other disinterested witnesses. See also State v. Elliott (suggesting the issue is not whether the testimony is necessary, but whether it is properly admissible).
We realize it is entirely possible that the jury may have chosen to reject the expert testimony, in any event. That may be, but that is not the issue. Defendant was nonetheless entitled to present the testimony as a part of his defense of duress. We thus conclude that the trial court committed reversible error in excluding the testimony.
B. Refusal of Jury Instruction
Defendant contends the trial court erred in refusing his requested instruction concerning *561 the lack of a duty to prevent commission of a crime. The instruction read as follows:
For criminal liability to be based upon a failure to act, there must be a duty to acta legal duty and not simply a moral duty. One has no legal duty to aid another person in peril, even when that aid can be rendered without danger or inconvenience to himself.
As authority, the instruction cited W. LaFave & A. Scott, Criminal Law Section 26, at 183 (1972) and People v. Beardsley, 150 Mich. 206, 113 N.W. 1128 (1907).
Defendant draws our attention to the procedural context of the request for the instruction and its refusal. During cross-examination, the state asked defendant a series of questions emphasizing the affirmative steps defendant could have taken to prevent commission of the crime. For example, defendant, Wiggington and Polly walked into Polly's home through the garage, where a broom and tools were located on a shelf. The state asked defendant if he had attempted to pick up any of these objects to hit Wiggington. Defendant immediately objected, contending there was no duty in Anglo-American law to prevent a crime and that the examination deprived defendant of due process. Defendant then requested the trial court to instruct the jury that defendant was not under a duty to prevent a crime. The court denied an oral instruction to the jury at that time but informed defendant it would be included in the instructions given to the jury later, and defendant could request such an instruction then. At the conclusion of the trial, defendant proffered the written instruction, which was also denied.
Defendant argues the jury "was unable to make an informed decision on the question of duress" because of the trial court's failure to give the instruction. He distinguishes between cross-examination dealing with opportunities to escape, which he concedes is relevant, and cross-examination implying defendant should have taken affirmative steps to stop the sequence of events. We interpret defendant's argument as contending that, without the instruction, the jury may have misunderstood the law on duress. Although the state appears to believe that defendant objected to the refusal of not one but two instructions (the other one concerning aiding and abetting), we do not view defendant's contention as such.
Jury instructions must be read as a whole, and, when so considered, if they fairly and correctly present the law, nothing more is required. State v. Fields, 74 N.M. 559, 395 P.2d 908 (1964). Additionally, since adoption of the uniform jury instructions, trial courts are required to give them without substantive modifications or substitution. State v. Blakley, 90 N.M. 744, 568 P.2d 270 (Ct.App.1977). In Blakley, the defendant was convicted of vehicular homicide while driving recklessly. The trial court gave the uniform jury instructions on the crime but refused to give the defendant's requested instruction defining reckless driving. The trial court also refused to give a uniform jury instruction defining willful and wanton conduct. This court upheld the trial court on both issues, holding that the trial court must give instructions as directed by the supreme court without substantive modifications or substitution. See also State v. Sparks, 102 N.M. 317, 694 P.2d 1382 (Ct.App.1985) (if the subject matter is adequately covered in the instructions, a requested jury instruction is properly refused); State v. Beal, 86 N.M. 335, 524 P.2d 198 (Ct.App.1974) (instructions should be read as a whole, and where other instructions adequately cover the issue, refusal to give a separate instruction is not error). Thus, the issue on appeal is narrowed to the question of whether the instructions given here adequately defined the crime.
On the whole, we believe the trial court correctly refused the requested instruction. Even if we assume there is no legal duty to act to prevent a crime, that is not the issue. The issue is whether the jury was adequately instructed on the duress defense. Since the trial court used the uniform jury instruction without substantive modification, we must conclude that the jury was adequately instructed.
*562 C. Sufficiency of the Evidence to Instruct on CSP
Pursuant to State v. Franklin, 78 N.M. 127, 428 P.2d 982 (1967), and State v. Boyer, 103 N.M. 655, 712 P.2d 1 (Ct.App. 1985), defendant argues there was not sufficient evidence to warrant instructing on CSP. An instruction on a criminal charge is warranted if it is supported by substantial evidence. Cf. State v. Mosley, 75 N.M. 348, 404 P.2d 304 (1965) (court not required to charge jury on defendant's theory of the case unless it is supported by substantial evidence); State v. Lara, 109 N.M. 294, 784 P.2d 1037 (Ct.App.1989) (defendant entitled to self-defense instruction if there is evidence to support it); State v. Armijo, 90 N.M. 614, 566 P.2d 1152 (Ct.App.1977) (defendant entitled to instruction on lesser offense if some evidence tending to establish it). It is the jury's duty to determine the weight and sufficiency of the evidence, including all reasonable inferences. State v. Vialpando, 93 N.M. 289, 599 P.2d 1086 (Ct.App.1979). Applying these standards to the facts of this appeal, we believe that the evidence reviewed below, although admittedly circumstantial, was sufficient to support the instructions on CSP.
Defendant himself never assaulted Polly sexually. Nor was that the state's contention. Instead, the jury was instructed it could convict defendant if he aided and abetted Wiggington in the commission of the CSP. This required a showing that defendant intended the crimes to be committed and helped, encouraged, or caused their commission. SCRA 1986, 14-2822. We proceed to review the evidence with this premise in mind.
Defendant placed the original call to Polly. Shortly after entering the house, he went into Polly's bedroom and saw her partially naked on the bed with Wiggington. While there was a fair amount of moving around during the six or seven hours defendant and Wiggington were in the house, it was clear that Wiggington and Polly were spending a lot of time in the bedroom. Defendant entered the bedroom a number of times to bring Wiggington coffee and cigarettes. Defendant had a knife in his belt during some part of the night. Although the testimony was not clear as to whether defendant had a knife in his belt on one or more of the occasions when he went into the bedroom, the jury could infer that he did.
At some point, defendant was asked by both Polly and Paula whether he had participated in planning the crimes. Both questions referred generally to the crimes, not to the specific crimes of CSP, but the jury could infer that the questions referred to all crimes committed that night. Defendant's testimony at trial explained his failure to deny planning the crimes in response to Polly's and Paula's inquiries, but the jury was entitled to disbelieve his explanation.
Defendant essentially argues that all the evidence against him was circumstantial. However, circumstantial evidence alone can be sufficient to prove guilt beyond a reasonable doubt. See State v. Brown, 100 N.M. 726, 676 P.2d 253 (1984); State v. Duran, 86 N.M. 594, 526 P.2d 188 (Ct.App.1974) (circumstantial evidence can be sufficient to sustain a conviction); SCRA 1986, 14-5001. Additionally, he contends that even the evidence concerning his planning of the crime with Wiggington, which he denied, goes only to the planning of the robbery, not CSP. He contends further that presence, even with mental approbation, is not, in itself, sufficient to support a conviction, unless it is accompanied by some outward manifestation or expression of approval. State v. Luna, 92 N.M. 680, 594 P.2d 340 (Ct.App.1979).
Defendant also argues that the aider and abettor must share the criminal intent of the principal. See State v. Harrison, 81 N.M. 324, 466 P.2d 890 (Ct.App. 1970). We would have viewed this a more compelling argument in connection with a different crime. However, CSP does not require a specific intent. See State v. Ramirez, 84 N.M. 166, 500 P.2d 451 (Ct.App. 1972) (decided under former law). In a general intent crime, the only intent required is one of conscious wrongdoing. See State v. Mascarenas, 86 N.M. 692, 526 P.2d 1285 (Ct.App.1974).
*563 On the whole, the jury was entitled to infer that defendant was well aware of the repeated CSP perpetrated throughout the night. We believe that this knowledge, coupled with defendant's actions of bringing Wiggington coffee and cigarettes, possibly while defendant was armed with a knife, and the evidence concerning planning the crimes in advance, met the test of sufficiency. From this evidence, the jury could have concluded and inferred that defendant intended the crimes to be committed, and that he helped, encouraged or caused their commission. The admission of the jury instructions was proper.
CONCLUSION
In summary, we hold that the exclusion of the expert testimony denied defendant his defense of duress in that Wiggington's character was an essential element of the defense. We therefore reverse defendant's convictions under Issue 1 and remand for a new trial. We affirm the trial court on Issues 2 and 3.
IT IS SO ORDERED.
BIVINS, C.J., and ALARID, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1406121/ | 758 P.2d 1248 (1988)
John A. HILLMAN and Janet Hillman, individually, and Janet Hillman as Personal Representative of the Estate of Julie G. Hillman, a deceased minor, Appellants,
v.
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY and Maury Hafford, Appellees.
No. S-1669.
Supreme Court of Alaska.
July 1, 1988.
*1249 Michael J. Schneider, Mestas & Schneider, P.C., Anchorage, for appellants.
Peter J. Maassen, Burr, Pease & Kurtz, Anchorage, for appellees.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
OPINION
MATTHEWS, Justice.
Following the death of their eleven year old daughter, John and Janet Hillman filed suit against Nationwide Mutual Fire Insurance Company for benefits under the uninsured motorists and medical payments sections of their automobile insurance policy issued by Nationwide. Nationwide denied liability, claiming that the policy provides no coverage in this instance. After making several important but non-dispositive rulings, the superior court granted Nationwide's motion for summary judgment and entered a final judgment dismissing the Hillmans' complaint. This appeal followed.
The facts are undisputed. On August 14, 1983, eleven year old Julie Hillman was driving her family's three wheel all-terrain vehicle (ATV) in the Nancy Lake area near Wasilla. The accident occurred when Julie attempted to cross Long Lake Road, and the ATV was struck by a truck. Julie died as a result of the collision.
The driver of the truck was uninsured. At the time of Julie's accident, however, the Hillmans had a Nationwide auto policy which listed three insured vehicles: a 1977 Datsun pickup, a 1976 Plymouth, and a 1978 GMC pickup. The ATV was not listed. Each listed vehicle had uninsured motorists coverage. The policy provided, in the "Uninsured Motorists" section under the bold-faced heading "coverage," that Nationwide
will pay bodily injury damages that you or your legal representatives are legally entitled to recover from the owner or driver of an uninsured motor vehicle. Damages must result from an accident arising out of the ownership, maintenance, or use of the uninsured vehicle... . . Relatives living in your household also have this protection.
In the same section of the policy several "COVERAGE EXCLUSIONS" are listed. The pertinent exclusion is number four:
This Uninsured Motorists insurance does not apply as follows:
... .
4. It does not apply to bodily injury suffered while occupying a motor vehicle owned by you or a relative living in your household, but not insured for Uninsured Motorist coverage under this policy. It does not apply to bodily injury from being hit by any such vehicle.
The final relevant policy language is the definition of "motor vehicle:"
In this policy:
... .
6. the words "MOTOR VEHICLE" mean a land vehicle designed to be driven on public roads. They do not include vehicles operated on rails or crawlertreads. Other motor vehicles designed for use mainly off public roads are covered when used on public roads.
(Emphasis added). This definition is under the bold-faced heading "DEFINITIONS."
About one year after the accident, Mrs. Hillman wrote to Nationwide to initiate a claim under the policy. In September, *1250 1984, Nationwide's claims adjuster, Maury Hafford, denied the Hillmans' claim, stating that coverage under the policy did not extend to the ATV. The Hillmans wrote Nationwide several more times, but Nationwide continued to deny coverage. Eventually, the Hillmans filed suit. On cross-motions for summary judgment, the superior court determined that the Nationwide policy did not provide coverage for the accident, and entered final judgment dismissing the Hillmans' complaint.
DISCUSSION
A. WHAT DOES "COVERED" MEAN IN THE MOTOR VEHICLE DEFINITIONS PARAGRAPH?
Initially, it is apparent that this accident falls within the general "Coverage" language of the "Uninsured Motorists" section of the policy. Julie suffered bodily injury resulting from an accident with a driver of an uninsured vehicle. It is equally apparent, however, that if Julie were occupying a motor vehicle owned by the Hillmans but not insured under the policy, "Uninsured Motorists Exclusion" number four would apply, and there would be no policy coverage. The Hillmans' position is that the final sentence of the motor vehicle definition, "[o]ther motor vehicles designed for use mainly off public roads are covered when used on public roads" (emphasis added), constitutes an affirmative grant of coverage to persons operating off road vehicles on public roads. Nationwide, on the other hand, argues that the words "are covered" in the definition mean that off road vehicles are included in the "motor vehicle" definition when they are operated on public roads. Thus, they conclude that Julie was operating an owned, but uninsured, "motor vehicle" and her accident is expressly excluded under the policy.
Insurance policies are contracts. Thus, the liability of an insurer is generally determined by the terms of the policy which it has issued. State v. Underwriters at Lloyds, London, 755 P.2d 396 (Alaska 1988). However, since an insurance policy is a contract of adhesion, it will be construed according to the principle of reasonable expectations: "The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though a painstaking study of the policy provisions would have negated those expectations." Id. (quoting R. Keeton, Basic Text on Insurance Law § 6.3(a), at 351 (1971)).
Another rule of construction applicable to insurance policies is that ambiguities in the contract language should be resolved in favor of the insured. U.S. Fire Ins. v. Colver, 600 P.2d 1, 3 (Alaska 1979). However, this rule does not apply to every case in which the parties disagree as to the interpretation of a term; ambiguity exists "only when the contract, taken as a whole, is reasonably subject to differing interpretations." Modern Constr. v. Barce, Inc., 556 P.2d 528, 529 (Alaska 1976), quoted in Jarvis v. Aetna Casualty & Sur., 633 P.2d 1359, 1363 (Alaska 1981).
We find that the only reasonable interpretation of the "motor vehicle" definition is that advanced by Nationwide, i.e., that the sentence on which the Hillmans rely means that motorized vehicles designed mainly for use off public roads, such as an ATV, are "motor vehicles" within the policy definition when they are used on public roads.[1] The definitional section is distinct from the coverage provisions, and cannot logically be read as providing any substantive additions to the coverage section of the policy.
Further, we have no basis for concluding from extrinsic evidence that an insured in the position of the Hillmans would have held an objectively reasonable expectation of coverage. Mrs. Hillman stated to the insurance adjuster investigating this case that she and her husband had thought that insurance was unobtainable for the ATV.
B. IS THE UNINSURED OWNED VEHICLE EXCLUSION PROHIBITED BY STATUTE?
Alternatively, the Hillmans argue that even if the ATV is a "motor vehicle" *1251 under the policy, the uninsured owned vehicle exclusion set out as exclusion number 4 in the uninsured motorists section of the policy, supra p. 3, is impliedly prohibited by law. In 1983, AS 28.20.440 provided:[2]
(b) The owner's policy of liability insurance shall
... .
(2) insure the person named and every other person using the vehicle ... against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of the vehicle [as provided herein] ...;
(3) contain coverage in the amounts set out in (2) of this subsection for the protection of the persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury or death arising out of the ownership, maintenance or use of the uninsured motor vehicle, except that this coverage may be waived in writing by the insured on or before the effective date of the policy.
The Hillmans argue that the uninsured owned vehicle exclusion contravenes this statute.
There is extensive case law on the question whether statutory sections similar to AS 28.20.440(b)(3) relating to the scope of uninsured motorists coverage preclude giving effect to similar uninsured owned vehicle exclusions. The Supreme Court of Arizona, in Calvert v. Farmer's Insurance Co. of Arizona, 144 Ariz. 291, 697 P.2d 684 (1985), has listed some twenty-six states[3] which have refused to give effect to uninsured owned motor vehicle exclusions.[4] There is also contrary authority, though it is a distinct minority view.[5]
We align ourselves with the majority position on this question. Our statute prohibited coverage narrower than that which was statutorily prescribed. As the Supreme Court of Florida stated in a similar case:
Insurers or carriers writing automobile liability insurance and reciprocal uninsured motorist insurance are not permitted by law to insert provisions in the *1252 policies that they issue that exclude or reduce the liability coverage prescribed by law for the class of persons insured thereunder who are legally entitled to recover damages from owners or operators of motor vehicles because of bodily injury.
Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229, 234 (Fla. 1971). All that the statutory coverage requires is that the person injured be insured and that he or she be entitled to recover damages from the operator of the uninsured motor vehicle arising out of the use of the uninsured motor vehicle. Those conditions are met in this case. Statutory coverage bears no relationship to the occupancy of any particular motor vehicle by the person insured. For the policy to impose as a coverage limitation a requirement that the person insured not be occupying an owned uninsured vehicle plainly conflicts with the mandated coverage:
The purpose of the statute is to protect completely, those willing to accept its protection, from all harm, whatever their status passenger, driver, pedestrian at the time of injury, produced by uninsured motorists. The only restrictions are that the plaintiff must be an insured, the defendant motorist uninsured, and that plaintiff be legally entitled to recover.
Elledge v. Warren, 263 So. 2d 912, 918-19 (La. App. 1972).
They are insured when injured in an owned vehicle named in the policy, in an owned vehicle not named in the policy, in an unowned vehicle, on a motorcycle, on a bicycle, whether afoot or on horseback or even on a pogo stick.
... .
... [O]nce uninsured motorist coverage is purchased, the insured and his relatives insured for liability have insured motorist protection under all circumstances. Uninsured motorist coverage, like no fault coverage, is personal and portable.
Bradley v. Mid-Century Ins. Co., 409 Mich. 1, 294 N.W.2d 141, 152 (1980) (footnote omitted).
Nationwide points to a statutory change now contained in AS 28.20.445(d):
(d) Uninsured and underinsured motorists coverage does not apply to bodily injury or death or damage to or destruction of property of an insured
(1) while occupying a motor vehicle owned by, but not insured by, the named insured or the insured's spouse or relative residing in the same household... .
This section took effect on January 1, 1985, more than a year after the accident in question. Nationwide argues that this change must be read as a clarification of pre-existing law, rather than a change in law.
We reject this argument for two reasons. First, an "amendment to an unambiguous statute is generally presumed to indicate a substantive change in the law." Torkko/Korman/Engineers v. Penland Ventures, 673 P.2d 769, 773-74 (Alaska 1983).
Second, the inquiry as to whether a legislature which has amended a statute intends to change or merely clarify the statute is usually fruitless. While the legislature is fully empowered to declare present law by legislation, it is not institutionally competent to issue opinions as to what a statute passed by an earlier legislature meant. If the legislature were in some form to declare its opinion as to the meaning of prior law, that declaration would be entitled to the same respect that a court would afford to, for example, an opinion of a learned commentator; that is, the court would examine the reasoning offered in support of the opinion and either reject or accept it based on the merit of the reasons given. However, instances where the legislature offers reasons in support of an opinion as to the meaning of prior law are very rare. It is possible to argue that the legislature has knowledge superior to a disinterested commentator because there may be some legislators in the current legislature who were also members of the legislature which passed the prior law and thus have special insight into the intent of the legislature. However, the force of this is dispelled when one considers that it is not permissible to allow a legislator to testify on the *1253 question of his unexpressed legislative intent or on the unexpressed legislative intent of others. Kenai Peninsula Borough School Dist. v. Kenai Peninsula Educ. Assoc., 572 P.2d 416 (Alaska 1977).
In the present case, AS 28.20.440(b)(2) was enacted in 1966, whereas AS 28.20.445 was enacted in 1984. The 1984 legislation was not accompanied by any language or committee reports expressing an opinion as to the meaning of the 1966 statute. Thus, even if we could ascertain what the collective judgment of the 1984 legislature was as to the meaning of the 1966 act, we would have no grounds for giving weight to that opinion.
C. MEDICAL PAYMENTS
A separate section of the Hillmans' policy provided for medical payments coverage. The Hillmans contend that the medical payments coverage is applicable based on the "are covered" language in the definition of "motor vehicle."
For the reasons set forth in part A above, this position is rejected.
D. ARBITRATION
Before ruling that the policy provided no uninsured motorist or medical payments coverage, the trial court held that Nationwide had not waived its right to arbitrate the underlying uninsured motorists claim. This ruling is challenged by the Hillmans on appeal. The ruling did not encompass the question of coverage, but included questions of negligence, comparative fault, damages, whether the driver of the truck was uninsured, and whether the claim is barred by a statute of limitations. The trial court concluded that although "Nationwide acted in bad faith in failing to disclose the availability of the arbitration procedure in four separate pieces of correspondence to Mrs. Hillman," arbitration should proceed because the Hillmans were represented by counsel who "simply made a calculated decision to attempt to obtain relief through the court system, knowing that the policy actually required dispute resolution through arbitration." Noting authority to the effect that a plaintiff cannot claim waiver when the plaintiff initiates court action in violation of the arbitration clause,[6] the trial court concluded "that none of the litigants herein has clean hands. The balance tips in favor of submitting appropriate issues to the contractually mandated arbitration process in light of the absence of demonstrated prejudice to the plaintiffs and the strong policy favoring arbitration." We can find no error in the trial court's reasoning or conclusion and thus affirm on this point.
E. HAS NATIONWIDE WAIVED DEFENSES WHICH IT DID NOT SPECIFICALLY SET FORTH IN CORRESPONDENCE WITH THE HILLMANS?
The trial court also ruled that Nationwide had not waived all of its defenses not specifically set forth in its correspondence with the Hillmans. The Hillmans claim that this was error.
Waiver has been defined as an express or implied voluntary and intentional relinquishment of a known or existing right. See National Tea Co. v. Commerce & Industry Ins. Co., 119 Ill. App. 3d 195, 74 Ill. Dec. 704, 456 N.E.2d 206 (1983); Arctic Contractors, Inc. v. State, 564 P.2d 30 (Alaska 1977). When waiver is to be implied from a party's conduct, that conduct must be clear and unambiguous. National Tea, 119 Ill. App. 3d 195, 74 Ill. Dec. 704, 456 N.E.2d 206 (1983).
The parties in this case both signed a "non-waiver agreement" which provided in part:
NOW, THEREFORE, it is understood and agreed between the Insured and the Company that the Company may by its representatives proceed to investigate the said accident, negotiate the settlement of any claim, or undertake the defense of any suit growing out of said accident, without prejudice to the rights of the said Company... .
This language negates an intent to waive defenses. No reasons or authorities are *1254 submitted as to why the agreement should not be given effect, and we are aware of none. We affirm the trial court's ruling.
F. DID THE TRIAL COURT ERR IN SUBMITTING NATIONWIDE'S STATUTE OF LIMITATIONS DEFENSE TO THE ARBITRATOR?
The Hillmans argue that the trial court erred in submitting Nationwide's statute of limitations defense to the arbitrator. Though neither party states which statute of limitations they are referring to, we assume that they are referring to the two-year period of limitations applicable to death[7] or injury[8] which would pertain to a claim by the Hillmans against the uninsured motorist.
There is no dispute that the Hillmans initiated a claim against Nationwide within two years of the accident. The insurance policy does not require the Hillmans to file suit against the uninsured motorist, and thus Nationwide cannot use that as a defense. If the Hillmans had failed to make a timely demand on Nationwide, such that Nationwide might have lost subrogation rights against the uninsured motorist, then Nationwide might have an arguable defense. This is not the case here. Thus we reverse the trial court's determination and hold as a matter of law that there is no statute of limitations defense applicable in this case.
G. DID THE TRIAL COURT ERR IN HOLDING THAT THE HILLMANS WERE NOT ENTITLED TO STACK THE COVERAGE LIMITS IN THEIR POLICY?
Each of the Hillmans' three insured vehicles had uninsured motorists protection of $25,000 for bodily injury to each person. They paid a separate premium as to each vehicle for this coverage. They contend that these limits should be cumulated, or stacked, so that there is $75,000 available in uninsured motorists protection for their death claim.
The policy is clear in not permitting this. It states:
The insuring of more than one person or vehicle under this policy does not increase our Uninsured Motorist payment limits. Limits apply to each insured vehicle as stated in the Declarations. In no event will any insured be entitled to more than the highest limit applicable to any one motor vehicle under this or any other policy issued by us.
The Hillmans cite Werley v. United States Automobile Association, 498 P.2d 112 (Alaska 1972) for the proposition that stacking of uninsured motorist coverages should be allowed, apparently regardless of policy language.
In Werley, an insured was injured by an uninsured motorist. The insured filed suit to recover under the uninsured motorist provisions of three policies covering his automobile, the driver of his automobile, and the driver's husband. We adopted the "Lamb-Weston"[9] rule that when an "other insurance" clause conflicts with an "other insurance" clause of another policy, the clauses should both be disregarded. We held that the insured was entitled to recover for his injuries up to the full limits of all three policies, and if the loss was less than the aggregate policy limits, it should be prorated according to the limits of all policies. Werley, 498 P.2d at 117-19.
The Werley decision was based on several factors. First, the "other insurance" provisions were circular. Id. at 117. Second, the language of the policies was ambiguous. Id. at 116. Third, not allowing stacking would result in a windfall for the insurance companies since they would have received premiums for no risk. Id. at 119.
This case is different. Here there is no circularity in language nor any ambiguity. The policy is clear in limiting coverage to the highest limit applicable to any of the insured vehicles. Further, there is no windfall, since the Hillmans' separate premiums *1255 bought protection for non-relatives who might be injured in each of the covered automobiles. See Westchester Fire Ins. Co. v. Tucker, 512 S.W.2d 679 (Texas 1974). For these reasons, we affirm the trial court's holding that the Hillmans are not entitled to stack the coverage in their policy.
H. WRONGFUL DEATH
The Hillmans assert that they are entitled to assert individual claims for the wrongful death of their daughter. The trial court did not reach a decision on this issue, thus we have no occasion to address it.
REVERSED and REMANDED for further proceedings in accordance with this opinion.
BURKE, Justice, with whom MOORE, Justice, joins, dissenting.
I disagree with the holding that the uninsured owned vehicle exclusion contained in the Nationwide policy was invalid at the time of the accident.
If uninsured owned vehicle exclusions were invalid before 1985, an insured would have been able to buy a policy on one owned vehicle, pay premiums for only that vehicle, and, thereby, claim coverage for himself and others for any number of uninsured motor vehicles he owned. If we had prohibited insurers from limiting uninsured motorists coverage with such exclusions, we would have sanctioned this very behavior; we would have provided a disincentive for owners of multiple vehicles to insure each vehicle. A rule that discouraged vehicle owners from obtaining insurance for all their owned vehicles would have contravened the stated purpose of the Motor Vehicle Safety Responsibility Act. See AS 28.20.010 (motorists should be financially responsible for their acts, and thus they are encouraged to obtain full insurance coverage).
In holding an exclusionary clause similar to the one at issue here valid, the Idaho Supreme Court stated:
If an insure[r] is required to insure against a risk of an undesignated but owned vehicle, or a different and more dangerous type of vehicle of which it has no knowledge, it is thereby required to insure against risks of which it is unaware, unable to underwrite, and unable to charge a premium therefor.
If the legislature had desired to place such a burden on insurance carriers, it could have required carriers to insure all applicants for motor vehicle liability policies at a uniform rate... . The legislature has not enacted such a requirement, and if it did so, undoubtedly owners of a single vehicle would sustain rate increases.
Dullenty v. Rocky Mountain Fire & Casualty, 111 Idaho 98, 106, 721 P.2d 198, 206 (1986). Similarly, there is no indication in AS 28.20.440 of a legislative intent to require insurers to increase their exposure and accept unknown and uncalculable risks. Thus, I would not interpret our statutory scheme as prohibiting insurers from excluding from coverage accidents resulting from the use of an owned but uninsured motor vehicle.
This interpretation is supported by the fact that AS 28.20.445(d), which took effect January 1, 1985, expressly approves the very exclusion at issue here: uninsured motorists coverage does not apply to losses incurred while occupying an uninsured owned vehicle. Section .445(d) did not replace or supplant section .440, nor did its addition to chapter 20 change section .440 in any substantive way. Rather, section .445 was merely added to chapter 20. See ch. 70, § 12, SLA 1984. It is fair to infer that this statutory addition was intended as a clarification of the existing law. In U.S. Fidelity & Guaranty v. DeFluiter, 456 N.E.2d 429, 432 (Ind. App. 1983), the court, faced with a similar issue, stated:
[t]he Legislature through enactment of statutes defines public policy. Further, the subsequent amendment of a statute is indicative of the Legislature's intent at the initial enactment of that statute. Thus, it appears the Legislature always intended that insurance companies be allowed to limit their uninsured motorist *1256 coverage in the matter at issue in the instant case.
(citations omitted). See also Laborers and Hod Carriers Union, Local No. 341 v. Groothuis, 494 P.2d 808, 811 (Alaska 1972) ("it is just as logical to regard the [newly adopted] amendment as a legislative clarification of the original language and not a substantial change").
In light of these considerations, I would hold that the uninsured owned vehicle exclusion was valid. Julie Hillman's injuries were incurred while she was occupying a motor vehicle owned by her family but not insured, and thus the accident was explicitly excluded from coverage by the policy terms. I would affirm the order granting summary judgment for Nationwide.
NOTES
[1] The Hillmans concede that the ATV was a motor vehicle "designed for use mainly off public roads" and that it was "used on" a public road at the time of the accident.
[2] At the time of the accident no uninsured motorist coverage written in Alaska could be narrower than prescribed by this statute. AS 21.89.020.
[3] See Stephens v. State Farm Mut. Auto. Ins. Co., 508 F.2d 1363 (5th Cir.1975); State Farm Auto Ins. Co. v. Reaves, 292 Ala. 218, 292 So. 2d 95 (1974); Aetna Ins. Co. v. Hurst, 2 Cal. App. 3d 1067, 83 Cal. Rptr. 156 (1969); Harvey v. Travelers Indemn. Co., 188 Conn. 245, 449 A.2d 157 (1982); Mullis v. State Farm Mut. Auto Ins. Co., 252 So. 2d 229 (Fla. 1971); Bass v. State Farm Mut. Auto. Ins. Co., 128 Ga. App. 285, 196 S.E.2d 485 (1973), aff'd, 231 Ga. 269, 201 S.E.2d 444 (App. 1973); Kau v. State Farm Mut. Ins. Co., 58 Haw. 49, 564 P.2d 443 (1977); Doxtater v. State Farm Mut. Auto. Ins. Co., 8 Ill. App. 3d 547, 290 N.E.2d 284 (1972); State Farm Mut. Auto. Ins. Co. v. Robertson, 156 Ind. App. 149, 295 N.E.2d 626 (1973); Lindahl v. Howe, 345 N.W.2d 548 (Iowa 1984); Barnett v. Crosby, 5 Kan. App. 2d 98, 612 P.2d 1250 (1980); Elledge v. Warren, 263 So. 2d 912 (La. App. 1972); Pennsylvania Nat'l Mut. Casualty Ins. Co. v. Gartelman, 288 Md. 151, 416 A.2d 734 (1980); Bradley v. Mid-Century Ins. Co., 409 Mich. 1, 294 N.W.2d 141 (1980); Nygaard v. State Farm Mut. Auto Ins. Co., 301 Minn. 10, 221 N.W.2d 151 (1974); Lowery v. State Farm Mut. Auto. Ins. Co., 285 So. 2d 767 (Miss. 1973); Otto v. Farmers Ins. Co., 558 S.W.2d 713 (Mo. App. 1977); Jacobson v. Implement Dealer Mut. Ins. Co., 196 Mont. 542, 640 P.2d 908 (1982); State Farm Mut. Auto. Ins. Co. v. Hinkel, 87 Nev. 478, 488 P.2d 1151 (1971); Beek v. Ohio Casualty Ins. Co., 73 N.J. 185, 373 A.2d 654 (1977), aff'd, 135 N.J. Super. 1, 342 A.2d 547 (App.Div. 1975); Chavez v. State Farm Mut. Auto. Ins. Co., 87 N.M. 327, 533 P.2d 100 (1975); Ady v. West American Ins. Co., 69 Ohio St. 2d 593, 433 N.E.2d 547 (1981); Cothren v. Emcasco Ins. Co., 555 P.2d 1037 (Okla. 1976); State Farm Mut. Auto. Ins. Co. v. Williams, 481 Pa. 130, 392 A.2d 281 (1978); Hogan v. Home Ins. Co., 260 S.C. 157, 194 S.E.2d 890 (1973); Allstate Ins. Co. v. Meeks, 207 Va. 897, 153 S.E.2d 222 (1967); Touchette v. Northwestern Mut. Ins. Co., 80 Wash.2d 327, 494 P.2d 479 (1972); Richards v. State Farm Mut. Auto. Ins. Co., 122 Wis. 2d 172, 361 N.W.2d 680 (1985); see also A. Widiss, A Guide to Uninsured Motorist Coverage, § 2.9 (1969 & Supp. 1981); Annotation, Uninsured Motorist Coverage: Validity of Exclusion of Injuries Sustained By Insured While Occupying "Owned" Vehicle Not Insured By Policy, 30 A.L.R. 4th 172 (1984).
[4] With the decision in Calvert, Arizona became the twenty-seventh state.
[5] See Dullenty v. Rocky Mountain Fire & Casualty, 111 Idaho 98, 721 P.2d 198 (1986); Employers' Fire Ins. Co. v. Baker, 119 R.I. 734, 383 A.2d 1005 (1978); Broach v. Members Ins. Co., 647 S.W.2d 374 (Tex. App. 1983).
[6] See Nuclear Installation v. Nuclear Services, 468 F. Supp. 1187, 1194 (E.D.Pa. 1979).
[7] Alaska Statute 09.55.580.
[8] Alaska Statute 09.10.070.
[9] Lamb-Weston Inc. v. Oregon Auto. Ins. Co., 219 Or. 110, 341 P.2d 110, reh'g. denied, 219 Or. 110, 346 P.2d 643 (1959). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2408890/ | 570 S.W.2d 378 (1978)
The LIFE INSURANCE COMPANY OF VIRGINIA, Petitioner,
v.
GAR-DAL, INC., et al., Respondents.
No. B-7236.
Supreme Court of Texas.
July 12, 1978.
Rehearing Denied October 4, 1978.
*379 Atwell, Cain & Davenport, Mark T. Davenport, Dallas, for petitioner.
Lyne, Klein, French & Womble, Erich F. Klein, Jr., and Ron Edmondson, Stephens & Stephens, Bill J. Stephens, Dallas, for respondents.
BARROW, Justice.
The trial court granted plaintiff, The Life Insurance Company of Virginia, a summary judgment for the deficiency owing after foreclosure of a deed of trust which secured a promissory note executed by defendant, Gar-Dal, Inc., and guaranteed by defendants, O. K. Jones, Ted Hunt, Jr., R. L. McSpedden, Charles C. Shaver, and Paul Hamby. The judgment granted the latter three guarantors indemnity from Jones and Hunt under a written indemnity contract. Only Gar-Dal, Inc., Jones and Hunt appealed. The court of civil appeals held that the summary judgment proof was inadequate and reversed the trial court judgment and remanded the entire cause for a new trial. 557 S.W.2d 565. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.
Plaintiff's amended motion for summary judgment is supported by the affidavit of Ronald F. McRoberts, vice-president of plaintiff, which was executed on March 2, 1976, just before the motion for summary judgment was filed. After averring that the affidavit was made from his personal knowledge, he swore that Life of Virginia had acquired the note and deed of trust lien on or about December 3, 1974, and "thereafter has been and is the sole owner and holder of the Note," and that true and correct copies of the note and guaranty agreement were attached to his affidavit. Defendant Jones, individually and as president of Gar-Dal, Inc., replied to the motion for summary judgment but did not deny the execution or validity of the note, nor did he except to the form of plaintiff's motion or the supporting affidavit.
The amended motion for summary judgment was heard on August 26, 1976, and a partial summary judgment was granted. A hearing was set on the remaining fact question of reasonable attorney fees. This hearing was held on October 20, 1976, and a final judgment, which incorporated the partial summary judgment, was signed on October 21, 1976. This judgment was vacated *380 and a new judgment signed on December 3, 1976, in order to make a correction not material to this appeal.
The court of civil appeals held that plaintiff was not entitled to a summary judgment on the note because the photocopy of the note which was attached to the affidavit of McRoberts was not properly authenticated and further, the affidavit did not state that plaintiff was in possession of the original note. Although neither of these alleged defects were pointed out to the trial court before the partial summary judgment was rendered, or even before the judgment of October 21, 1976, was signed, the court of civil appeals held that since these defects were called to the attention of the trial court in the motion for new trial filed on November 1, 1976, they had not been waived by defendants.
Rule 166-A(e), Tex.R.Civ.Proc., sets forth the procedure for presenting summary judgment evidence by affidavit and documentary proof. Prior to January 1, 1978, this section provided:[1]
"(e) Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions or by further affidavits."
This rule, which has been considered by this Court in several others cases, has resulted in difficulty in resolving the question of what constitutes sufficient documentary summary judgment evidence. See: Gardner v. Martin, 162 Tex. 156, 345 S.W.2d 274 (1961); Youngstown Sheet & Tube Co. v. Penn, 363 S.W.2d 230 (Tex.1962); Boswell v. Handley, 397 S.W.2d 213 (Tex.1965); Southwestern Fire & Casualty Company v. Larue, 367 S.W.2d 162 (Tex.1963); Perkins v. Crittenden, 462 S.W.2d 565 (Tex.1970); Hidalgo v. Surety Savings and Loan Association, 462 S.W.2d 540 (Tex.1971); Texas Nat. Corp. v. United Systems Internat'l, Inc., 493 S.W.2d 738 (Tex.1973). This difficulty has been caused, at least in part, by the reluctance of the parties or counsel to attach the original of valuable instruments to the suit papers. Although we have recognized that attaching the original document would avoid many of the problems encountered in the above cited cases, we have held that Rule 166-A(e), Tex.R.Civ. Proc., does not require that originals be attached. In Perkins v. Crittenden, supra, this Court said:
"`[Crittenden] could have discharged [his] burden without producing and introducing the original note, under Rule 166-A(e), by attaching a sworn or certified copy of the note to a proper affidavit or by serving such copy with an affidavit. Gardner v. Martin, [162 Tex. 156, 345 S.W.2d 274 (1961)].' Other cases in point are Boswell v. Handley, 397 S.W.2d 213 (Tex.Sup.1966); and Mitchell v. Geosonic Corporation, 431 S.W.2d 958 (Tex.Civ. App.1968, no writ)."
In this cause plaintiff attached a properly identified photocopy of the note to the affidavit of McRoberts and McRoberts swore before an authorized person that the photocopy was a true and correct copy of the original note. We hold that the photocopy of the note attached to the affidavit under these circumstances was a "sworn copy" within the meaning of Rule 166-A(e) and that, therefore, it was proper summary judgment evidence.
Furthermore, defendants waived their right to complain of the alleged defect in the form of plaintiff's proof by failure to except to the motion for summary judgment or the affidavit accompanying same prior to entry of the judgment. Youngstown *381 Sheet & Tube Co. v. Penn, supra; Roland v. McCullough, 561 S.W.2d 207, (Tex.Civ.App.San Antonio 1977, writ ref'd n. r. e.). These alleged defects were matters of form that might easily have been cured if they had been timely pointed out in the response to the motion for summary judgment. Although the trial court still had jurisdiction on November 1, 1976, and thus the discretion to set aside the judgment, it did not abuse its discretion in refusing to do so. We conclude that the better rule is that defects of form are waived if not pointed out to the trial court before summary judgment is rendered. See: Jones v. McSpedden, 560 S.W.2d 177 (Tex.Civ.App.Dallas 1977, no writ).
It was also urged by defendants and found by the court of civil appeals that the affidavit of McRoberts is inadequate to support the judgment in that he did not swear that plaintiff was in possession of the note. In Texas Nat. Corp. v. United Systems Internat'l, Inc., supra, we said that if a sworn or certified copy, rather than the original of the note is used, "the motion or affidavit should clearly evidence that the plaintiff is the present owner and holder and in possession of the note." That case was reversed because the factual statements to support the motion for summary judgment were in the pleadings and not in a sworn motion or affidavit filed in support of the motion. Furthermore, although the original note was not attached to the motion for summary judgment filed by United Systems International, the affiant did not swear that plaintiff was the owner and holder of the note sued upon.
Here, McRoberts swore in his affidavit that plaintiff "is the sole owner and holder" of the note. As defined in Tex.Bus. & Comm.Code Ann. § 1.201(20), "`Holder' means a person who is in possession of a document of title or an instrument or an investment security drawn, issued or indorsed to him or to his order or to bearer or in blank." Furthermore, as defined in Webster's New Collegiate Dictionary, a "holder" is (1) a person that holds; (2) a person in possession of and legally entitled to receive payment of a bill, note or check. Thus, under either legal or lay terms, the affidavit of McRoberts, which was predicated upon sufficient facts to show personal knowledge, evidences that at the time of filing the motion for summary judgment plaintiff was the owner, holder and in possession of the note. This evidence stands uncontroverted by defendants and properly supports the summary judgment on the note.
Defendants urge by a cross-point that the trial court erred in granting the summary judgment because there are genuine issues of material fact raised as to whether all offsets and payments have been credited to the note by plaintiff. Since payment is an affirmative defense, the burden was upon defendants to come forward with summary judgment proof sufficient to raise at least an issue of fact that offsets or payments had not been credited to the note. Nichols v. Smith, 507 S.W.2d 518 (Tex. 1974); Seale v. Nichols, 505 S.W.2d 251 (Tex.1974).
The affidavit of defendant Jones avers generally that Gar-Dal, Inc. was not given credit for the value of the leases and revenues from the building which were assigned to plaintiff along with the lien on the building. He does not state that any specific amount was received by plaintiff nor does he name any person who he claims made a payment. In response to this general statement, McRoberts swore unequivocally that no revenues were received from the building by plaintiff prior to foreclosure of the lien.
A similar question was considered in Smith v. Crockett Production Credit Association, 372 S.W.2d 956 (Tex.Civ.App.Houston 1963, writ ref'd n. r. e.) wherein the defendant swore in response to plaintiff's motion for a summary judgment on a note that he had not been given credit for all of the offsets and payments that had been made. In rejecting the contention that this response raised a fact issue, the court said:
"we are of the view that the plea in appellant Smith's affidavit, there being nothing more, stating that all offsets and *382 credits have not been allowed, is but a conclusion. It should have gone further and specified what such credits and offsets were. If this had been a trial on the merits and the only thing stated by appellant was that all offsets and payments had not been credited, the court would have been required to instruct a verdict against appellant. His testimony in such a trial, that all payments and offsets had not been allowed, without more, would be a pure conclusion. See Franklin Life Ins. Co. v. Rogers, 316 S.W.2d 116 (CCA), ref., n. r. e."
We agree with this holding and conclude that the statement in the opposing affidavit of defendant Jones that all offsets and payments had not been credited to the note is a conclusion and is insufficient to raise an issue of fact that plaintiff failed to credit all offsets and payments to the note.
Defendants assert by a second cross-point that if the judgment is reversed as to Gar-Dal, Inc., Jones and Hunt, and the cause remanded as to them, it should be remanded as to all defendants. This point is immaterial in view of our affirmance of the trial court judgment.
The judgment of the court of civil appeals is reversed and the judgment of the trial court is affirmed.
NOTES
[1] The following sentence was added to this section effective January 1, 1978:
"Defects in the form of affidavits or attachments will not be grounds for reversal unless specifically pointed out by objection by an opposing party with opportunity, but refusal, to amend." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1483088/ | 157 F.2d 797 (1946)
UNITED STATES
v.
WERNES.
SAME
v.
KING.
Nos. 8906, 8907.
Circuit Court of Appeals, Seventh Circuit.
November 15, 1946.
*798 Leonard L. Cowan, of Chicago, Ill., and George W. Spenger, of Peoria, Ill., for appellant.
Howard L. Doyle, U. S. Atty., and Marks Alexander, Asst. U.S. Atty., both of Springfield, Ill., and Robert T. Wright, of Chicago, Ill. (Thomas B. Hart, Max Davidson, and Lee Soltow, Attys., Securities and Exchange Commission, all of Chicago, Ill., of counsel), for appellee.
Before SPARKS and KERNER, Circuit Judges, and BRIGGLE, District Judge.
SPARKS, Circuit Judge.
Appellants were convicted on six counts of a ten-count indictment charging them and their attorney with violation of the Securities Act of 1933, 15 U.S.C.A. § 77a et seq., and the Mail Fraud Act, 18 U.S. C.A. § 338. The other four counts were dismissed by the Government at the close of its case, and, at the same time, the court directed verdict in favor of the attorney on his motion, and discharged him from further action in the case. King received a sentence of two and a half years' imprisonment, and Wernes, a year and a day.
Appellants' activities which were charged to constitute a violation of the two statutes related to their obtaining of monies for the development and operation of certain oil leases, purchase of equipment, and building of a refinery for use thereon. The leases were on lands within the Crow Indian Reservation in Montana, hence subject at all times to the Department of Interior.
The Government admitted that there was oil underlying the lands leased, and that there were producing wells thereon. It contended, however, that appellants knew that the possibilities of operating the wells and a refinery at a profit in that particular field were extremely doubtful in view of its history, the low grade and value of the oil produced, and the lack of a market nearby or transportation for it, hence, that their representations as to the safety of the venture and its possibilities for profits constituted actionable fraud. Appellants, on the other hand, contended that since the field was proven, as shown by the fact of the producing wells thereon, their expressions of confidence in it as a business venture were not misrepresentations, nor made in bad faith.
In addition to their denial that they were guilty of any misrepresentation or fraud, appellants also asserted that the Statute of Limitations had operated prior to the indictment against any offense they might have committed with reference to their issuance of beneficial certificates in a limited partnership organized by them under the Illinois laws, and the subsequent exchange of these certificates for others in a second company; that the certificates in the second company were not securities within the meaning of the Act, and that the alleged exchange of these for the certificates in the limited partnership did not constitute a sale or exchange for value within the meaning of the Act; that the proof showed two wholly unrelated sets of transactions, *799 hence that there was a fatal variance between the indictment and the proof; and that appellant Wernes was entitled to immunity by reason of having been compelled to furnish evidence against himself.
As to appellants' defense on the merits, we find clear and convincing evidence to support the verdict of the jury that they were guilty of a scheme to defraud. Representations of large profits and absolute safety in a highly speculative oil venture were backed up by the payment of so-called dividends of 1% a month, stated to have been paid out of earnings from current operations, but in fact, paid out of capital assets of the company as long as those assets lasted. When resources for the payment of these "dividends" were exhausted, the victims were lulled into a false sense of security by representations that "earnings" were being used for the purchase of new equipment, but that the payments would be resumed soon. Appellants stated that they were the sole owners of the leases and promised to turn them over to the limited partnership as their share of the capital assets. They did not disclose that these leases were subject to a very large indebtedness secured by mortgage, and that money collected from investors was used to pay rentals, necessary to avoid cancellation. These and many other serious misrepresentations of fact fully sustain the verdict of guilt.
In setting up the defense of the Statute of Limitations, appellants assert that there was no proof of any sale of a security within three years of the indictment, which was returned June 22, 1944, and that such sales, if any, all took place prior to August 1940, when the last investment was made in the limited partnership, after which time no effort was made by appellants to obtain any further funds from the limited partners, and further, that letters set forth in the indictment to sustain the use of the mails in furtherance of a scheme to defraud, dated from July, 1941 on, were all sent after the scheme, if any, had been fully executed and completed, hence were not in furtherance of it. This contention overlooks the fact, fully discussed by this court in United States v. Riedel, 7 Cir., 126 F.2d 81, that a scheme to defraud may well include later efforts to avoid detection of the fraud. See also United States v. Earnhardt, 7 Cir., 153 F.2d 472; Mitchell v. United States, 10 Cir., 126 F.2d 550, certiorari denied, 316 U.S. 702, 62 S. Ct. 1307, 86 L. Ed. 1771; United States v. MacAlpine, 7 Cir., 129 F.2d 737. There is ample evidence to indicate a continuation of activities designed to prevent too much complaint or inquiry even after attempts to obtain further money from the limited partners had ceased, and the "mailings" fall within this period of continued activity and cannot be said to be not "in furtherance" of the scheme. Hence we find no merit in appellants' contention that prosecution was barred by the Statute of Limitations.
We do not agree with appellants' contention that the certificates offered in exchange for the limited partners' certificates were not securities within the meaning of the Securities Act. It is true that they did not contemplate any new financing or require the payment of any new funds to obtain them. However, section 2 of the Act, 15 U.S.C.A. § 77b, includes in its definition of security, any evidence of indebtedness or certificate of interest or participation in any profit-sharing agreement or investment contract. We think the beneficial trust certificates here involved easily fall within this definition (cf. Securities & Exchange Commission v. C. M. Joiner Leasing Corp., 320 U.S. 344, 64 S. Ct. 120, 88 L. Ed. 88), and that the offer to exchange them for the limited partnership certificates constitutes a sale within the meaning of the same section, under the ruling of this court in United States v. Riedel, supra.
Appellants further contend that the proofs showed two wholly unrelated sets of transactions, one set involving appellants and the limited partners, and the other, an individual, Henry Kuck, and King, and that this variance between the indictment and proofs is fatal. We do not agree. The indictment properly charged, and the evidence fully sustains the charge of a single, integrated scheme to defraud by means of false representations of the value of the leases and the profits to be derived from their development by the drilling of *800 new wells and the improvement of the old, the use of new equipment to be purchased, the building of a refinery. Money was obtained from some victims by the issuance of certificates of interest in the limited partnership, later exchanged for certificates in another company. It was obtained from Kuck for precisely the same stated purposes in the form of loans to King, evidenced by personal notes and delivery, without assignment, of the leases involved. That the mode of executing the scheme differed between the various victims is immaterial. Weiss v. United States, 5 Cir., 120 F.2d 472, 122 F.2d 675. It remained the same general scheme, a unitary, integrated one in which, the record shows both appellants actively participated.
In addition to the foregoing defenses, appellant Wernes also contends that his Constitutional rights were violated when he was compelled to produce the books and records of the various organizations, corporate and non-corporate, through which appellants carried on their operations, and not granted immunity from prosecution after producing those records. The record shows that in each of these organizations he was the officer who had legal custody of the books and records, and the subpoena duces tecum required him to produce those books and records. The case of United States v. White, 322 U.S. 694, 64 S. Ct. 1248, 152 A.L.R. 1202, 88 L. Ed. 1542, is a complete answer to his defense of self-crimination. There the Court held that an officer of an unincorporated labor union who had custody of books and records of that union could not refuse to produce those records on the ground that they might tend to incriminate him. Wernes contends that the cases in which the question of privilege has arisen and been denied have been those where the proceedings were investigations against organizations themselves subject to the proceedings involved, and that in no cases have officers, themselves on trial, been forced to produce corporate documents in their custody for use against themselves. The White case, supra, negates this contention. It is quite clear from that case that the only papers and effects which the privilege protects are those which are the private property of the person claiming it, or at least in his possession in a purely personal capacity. Certainly the records here required by the subpoena did not fall within this category. The rule is as stated in Wigmore on Evidence (3rd Ed.), Vol. 8, section 2259b, as corrected in the 1943 Supplement: "Nor can he refuse to produce on the ground that some parts of the corporate records would criminate himself, even if such parts were made by himself; * * *" Hence there was no error in the denial by the court of the motion to quash the subpoena and its refusal to grant immunity to Wernes after his compliance therewith.
Other errors are asserted by appellants as to certain of the six counts on which they were convicted. We find no merit in any of these contentions and deem it unnecessary to discuss the questions sought to be raised inasmuch as there is no question as to their guilt under the Mail Fraud counts. It is, of course, axiomatic that, where the sentence imposed is one which could have been imposed on each and every count of the indictment, one good count will support a general conviction.
Judgment affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2429747/ | 845 S.W.2d 364 (1992)
Marcus Lemont BARNES, Appellant,
v.
The STATE of Texas, Appellee.
No. 01-91-01454-CR.
Court of Appeals of Texas, Houston (1st Dist.).
December 10, 1992.
*365 Bill May, Corpus Christi, for appellant.
John B. Holmes, Jr., Dist. Atty., Carol M. Cameron, Andy Tobias, Asst. Dist. Attys., Houston, for appellee.
Before DUGGAN, DUNN and MIRABAL, JJ.
OPINION
MIRABAL, Justice.
A jury found appellant, Marcus Lemont Barnes, guilty of aggravated robbery. The jury assessed punishment at 35-years confinement and a fine of $8,000. We affirm.
In his first point of error, appellant asserts that there is insufficient evidence to sustain his conviction.
In reviewing the sufficiency of the evidence to support a conviction, the evidence is viewed in the light most favorable to the judgment. Flournoy v. State, 668 S.W.2d 380, 383 (Tex.Crim.App. 1984). The critical inquiry is whether, after viewing the entire body of evidence in the light most favorable to the judgment, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979); see also Sharp v. State, 707 S.W.2d 611, 614 (Tex.Crim.App.1986), cert, denied, 488 U.S. 872, 109 S. Ct. 190, 102 L. Ed. 2d 159 (1988). The standard of review is the same for both direct and circumstantial evidence. Geesa v. State, 820 S.W.2d 154, 162 (Tex.Crim.App.1991); Sutherlin v. State, 682 S.W.2d 546, 548-49 (Tex.Crim.App.1984).
The evidence, presented in the light most favorable to the judgment, follows.
Officers of the Houston Police Department, Narcotics Division, planned a "buybust." A "buy-bust" occurs when an officer poses as a drug dealer and buys drugs from a seller. Other undercover officers observe the purchase and arrest the seller after he delivers the drugs.
Officer Paul Powell arranged to purchase 1000 "hits" of lysergic acid diethylamide (LSD) for $900. Powell negotiated the purchase over the phone with Patrick Weaver. Weaver and Powell agreed to meet at a Dairy Queen, then proceed to a car wash around the corner where the person with the LSD would be waiting.
Powell and his partner, Officer Marino, met Weaver at the Dairy Queen. Undercover officers were in a van parked nearby in order to observe the transaction and arrest appellant when he sold Powell the drugs. Weaver told Powell to drive to the car wash around the corner. At the car wash, Weaver exited his vehicle, walked over to appellant's car, and spoke with appellant. Weaver then walked over to Powell and Marino, and told Powell that appellant was ready. Powell and Marino proceeded towards appellant's car, but appellant yelled that only one of the men could meet with him. Marino returned to Powell's car, and Powell continued to walk towards appellant's car.
Appellant remained seated in his car as Powell approached the car. Appellant asked Powell if he and Marino were police *366 Officers, and Powell assured him that they were not. Powell then asked appellant if he had the "stuff," and appellant stated that he had it with him. Powell asked to see the LSD, but appellant refused to show it to Powell. Appellant asked to see Powell's money, and Powell replied that it was back in his car. Powell walked back to his car, retrieved a bag containing the money, and returned to appellant's car. Powell counted out $900, showed it to appellant, placed the money back inside the bag, and kept possession of the money.
There was silenceneither Powell nor appellant spoke. Appellant then reached behind his seat, and Powell moved towards the front of the car to see what appellant was doing. Appellant pulled out a revolver and pointed it at Powell. Powell ducked and started to run away. Appellant exited the car and started shooting at Powell. Powell testified that when he was only a couple of steps away from appellant, he felt a sting. Officer Estes, who observed the shooting from inside the van, testified that Powell was approximately 12 feet from appellant when he was shot. Appellant fired two more shots as Powell continued to run. Eventually, Powell fell in the middle of the street.
After Powell fell, the surveillance team moved in and arrested appellant, who was standing next to his car. The officers also arrested Weaver while he was attempting to drive away. Powell was taken to the hospital, where pellets were removed from his arms, back, and legs. At trial, Powell still had pellets in his head, back, arms, legs, and buttocks.
The officers searched appellant's car, but did not find the LSD or any other drugs. The officers recovered appellant's revolver and found that three .38 caliber "rat shots" were fired and three were not. The "rat shot" was approximately number 9 and number 10 lead shot in a .38 caliber cartridge. An expert for the State testified that the cartridges could cause death or serious bodily injury, depending upon the distance between the shooter and the target. Appellant's expert testified that these particular cartridges were manufactured ror noniemai purposes ana ceasea to De deadly at distances greater than 30 feet. The expert conducted test firings of rat shot from a gun similar to appellant's, and by analyzing the density of the pellets that hit Powell, concluded that Powell was 30 or more feet away from appellant when he was shot.
Appellant was indicted for aggravated robbery. The elements of aggravated robbery are (1) a person; (2) in the course of committing theft; (3) with intent to obtain or maintain control of property; (4) intentionally or knowingly; (5) threatens another with, or places another in fear of; (6) imminent bodily injury or death; and (7) uses or exhibits (8) a deadly weapon. Bilbrey v. State, 594 S.W.2d 754, 759 (Tex. Crim.App. 1980); Sanchez v. State, 722 S.W.2d 781, 785 (Tex.App.Dallas 1986, pet. refd); Tex.Penal Code Ann. § 29.02 (Vernon 1989) 29.03 (Vernon Supp. 1992).
Appellant contends that the State failed to prove the second element, "in the course of committing theft." "In the course of committing theft" means conduct that occurs in an attempt to commit, during the commission, or in immediate flight after the attempt or commission of theft. Thomas v. State, 807 S.W.2d 803, 806 (Tex. App.Houston [1st Dist] 1991, pet. refd); Tex.Penal Code Ann. § 29.01 (Vernon 1989). The jury charge included this definition.
Because there was no completed theft, the State had to prove that appellant attempted to commit theft. "Attempt" is defined by section 15.01(a) of the Texas Penal Code. The section provides:
[a] person commits an offense if, with specific intent to commit an offense, he does an act amounting to more than mere preparation that tends but fails to effect the commission of the offense intended.
TEX.PENAL CODE ANN. § 15.01(a) (Vernon Supp.1992).
It is the State's theory that because appellant never showed Powell the LSD, and no LSD was found in appellant's car, appellant *367 never intended to sell Powell the LSD; he planned to steal Powell's money.
The evidence shows that in transactions like this, the buyer and seller are often suspicious of each other, and each one may be looking for an opportunity to steal from the other. Appellant therefore concedes the evidence is sufficient to show appellant may have intended to steal Powell's money. Appellant contends that he never performed an act amounting to more than mere preparation to commit the offense, as required by section 15.01(a) of the Penal Code. Appellant argues that he never stated "give me your money," he did not attempt to grab the money from Powell, and he did not run up to Powell after he shot him. Appellant contends the evidence supports, as reasonable hypotheses, that appellant got nervous that Powell might be a policeman, or that Powell might rob appellant, and that appellant therefore was trying to scare Powell away by shooting him. Also, appellant asserts the absence of the drugs in the car proves nothing. He argues that it is feasible the drugs were kept in another location nearby, just as Powell kept his money back at the car, not on his body.
Appellant argues that, viewing the evidence from the standpoint most favorable to the State, it does no more than establish the opportunity to commit attempted theft, as in Thomas, 807 S.W.2d at 807. Thomas, however, is distinguishable from the facts at hand. In Thomas, officers found the complainant murdered, but still in possession of a large amount of gold jewelry, the contents of her purse, and cocaine. Id. at 806. The court held that there was not sufficient evidence to convict the defendant of aggravated robbery. Id. at 807.
In the present case, Powell counted out $900 in front of appellant, and then put the money back in a bag and in his pocket. Appellant paused for a moment, then reached for his gun. When Powell started running away, appellant did not let him just leave. Rather, appellant got out of his car and shot Powell three times as Powell ran. Powell was hit approximately 12 feet away from appellant, where rat shot can be deadly according to appellant's own expert witness. Appellant did not have an opportunity to get the money out of Powell's pocket because the arresting officers moved in quickly after Powell was shot, and appellant was apprehended while standing outside his car.
We conclude there was sufficient evidence for a jury to find that appellant intended to steal Powell's money, and that by shooting Powell, appellant performed an act amounting to more than mere preparation. We overrule appellant's first point of error.
In his second point of error, appellant claims that the trial court erred in charging the jury that a deadly weapon means a firearm. At trial, appellant objected to the charge, claiming the charge created an improper irrebuttable presumption. The trial judge overruled the objection.
The jury charge reads as follows:
"Deadly weapon" means a firearm.
"Firearm" means "any device designed, made, or adapted to expel a projectile through a barrel by using the energy generated by an explosion or burning substance or any device readily convertible to that use."
These definitions track the statutory definitions. TEX.PENAL CODE ANN. § 1.07(a)(11)(A) (Vernon 1974) and § 46.-01(3) (Vernon 1989). Appellant argues that evidence presented to the jury rebutted the presumption that a firearm is always a deadly weapon. Appellant contends that because his expert testified that the cartridges in the gun were nonlethal at distances of 30 feet or more, there was an issue for the jury to decide in determining whether the firearm was a deadly weapon, and it was error to instruct the jury that a firearm is always a deadly weapon.
A firearm is a deadly weapon per se under section 1.07(a)(11)(A) of the Texas Penal Code. Gomez v. State, 685 S.W.2d 333, 336 (Tex.Crim.App. 1985). Appellant's argument that a firearm is not a deadly *368 weapon per se conflicts with the current law. We overrule point of error two.
We affirm the judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1567651/ | 450 S.W.2d 715 (1970)
Roger Lee MERCER, Appellant,
v.
The STATE of Texas, Appellee.
No. 11724.
Court of Civil Appeals of Texas, Austin.
January 28, 1970.
Rehearing Denied February 18, 1970.
*716 Phillip Sanders, Seth B. Cox, Jr., Austin, for appellant.
Crawford C. Martin, Atty. Gen., Nola White, First Asst. Atty. Gen., Hawthorne Phillips, Exec. Asst. Atty. Gen., Robert C. Flowers, Bennie W. Bock, II, Monroe Clayton, Asst. Attys. Gen., Ray Grill, Austin, for appellee.
O'QUINN, Justice.
This is an appeal from the juvenile court of Travis County in which appellant was adjudged a delinquent child and committed to the custody of the Texas Youth Council.
These proceedings grew out of discovery, by the principal of the school the youth was attending, of several forms of marijuana in possession of appellant.
Appellant contends that the marijuana he took from his pockets and placed on the principal's desk was recovered by an unreasonable search and seizure in contravention of his constitutional rights afforded by the Fourth Amendment to the Constitution of the United States and that at the disposition hearing following trial, the court permitted the introduction of a "supplemental report' containing hearsay to the prejudice of appellant.
We affirm the action of the trial court.
Appellant was a student at Reagan High School in Austin. The dean of men received a "tip" that appellant was in possession of marijuana at school and relayed the information to the principal. The principal caused appellant to be brought to his office where he directed the youth to empty his pockets. Appellant after some hesitation emptied his pockets upon being informed that his father would be called if he failed to comply, with the principal's request. This procedure produced two marijuana cigarettes, marijuana, and marijuana seed.
No force was used on appellant, nor was he searched or handled by the principal in the usual sense. The youth testified that if his father had been called, the father would have made appellant empty his pockets, and his father would not have used force to require the boy to empty his pockets.
After appellant emptied his pockets, the principal called the youth's father. Following the father's arrival, the police were called, with the father's knowledge. The principal told appellant's father, "You understand I am going to have to call the police," and the boy's father said, "Yes."
*717 We have able briefs from counsel affording extended examination of the case law and legal writings pertaining to search and seizure. Upon due consideration, we conclude that the principal of the school in insisting that appellant disclose the contents of his pockets acted in the place of the boy's father, and that the father by words and action later acquiesced in the summoning of police officers which resulted in trial of appellant as a delinquent.
The statute under which appellant was declared a delinquent makes the proceeding a civil action, and the law does not provide for conviction and punishment of the minor for commission of a crime. Article 2338-1, Vernon's Ann.Tex.St.; Yzaguirre v. State, 427 S.W.2d 687 (Tex.Civ. App., Corpus Christi, 1968, no writ); Solis v. State, 418 S.W.2d 265 (Tex.Civ.App., San Antonio, 1967, no writ); The Supreme Court of Texas in 1969 concluded that the rule of In re Gault, 387 U.S. 1, 87 S. Ct. 1428, 18 L. Ed. 2d 527 (1967) "* * * does not require that the juvenile trial be adversary and criminal in nature, and that the `beyond a reasonable doubt' test is not required." State v. Santana, 444 S.W.2d 614 (Tex. 1969).
Unreasonable seizure forbidden by the Fourth Amendment is that undertaken through governmental action, and the security afforded by the Amendment is not invaded by acts of individuals in which the government has no part. Burdeau v. McDowell, 256 U.S. 465, 41 S. Ct. 574, 65 L. Ed. 1048 (1921). The principal in dealing with appellant acted in loco parentis, not for an arm of the government, when he demanded that appellant disclose the contents of his pockets.
Blackstone stated this authority of the school principal as one delegated by the parent. It was said that a parent may delegate part of parental authority to the schoolmaster "* * * who is then in loco parentis, and has such a portion of the power of the parent * * * as may be necessary to answer the purposes for which he is employed." 1 W. Blackstone, Commentaries, 453.
This principle has been recognized in Texas. Hailey v. Brooks, 191 S.W. 781 (Tex.Civ.App., Fort Worth, 1916, no writ). In Hailey the court asserted that
`Generally speaking * * * the * * * principal * * * of a public free school, to a limited extent at least, stand[s], as to pupils attending the school, in loco parentis, and * * * may exercise such powers of control, restraint, and correction over such pupils as may be reasonably necessary to enable the teachers to perform their duties and to effect the general purposes of education."
It does not seem to be outside the purposes of discipline in a system of education for the principal of a public school to discover and bring under control drugs considered dangerous under law and possession of which is made an offense by law. The same procedure employed by the principal, if used by the boy's father, would not violate security of appellant under the Fourth Amendment.
Even with a statute granting to teachers in public schools "the same authority as to conduct and behavior over the pupils * * * as the parents * * * may exercise over them * * *", 24 P.S.Pa. § 13-1317, the law has been construed as limiting the grant to those powers necessary to effectuation of the school's purposes. Guerrieri v. Tyson, 147 Pa.Super. 239, 24 A.2d 468 (1942).
This rule is concisely stated in the Restatement of Torts, Second, limiting in loco parentis authority of a school to the purposes of the school's existence. Restatement (Second) of Torts, secs. 152, 154 (1965). See discussion in 117 Pa.L. 373, 377 et seq.
In Texas it has been held that schools have plenary parental power over pupils while in school, and that violation of a rule not shown to be an abuse of power and discretion to insure proper conduct and decorum may be punished even though in violating the rule the pupil "was following her father's instructions." McLean Independent School District v. Andrews, 333 S. *718 W.2d 886 (Tex.Civ.App., Amarillo, 1960, no writ).
About a week following trial of appellant a disposition hearing was conducted, with a different district judge presiding. After the disposition hearing, the trial court stated to appellant, "I have come to the conclusion that the best thing to be done for you as well as for society is that you be committed to the Texas Youth Council."
At the disposition hearing appellant objected to the presentation of a "supplemental report' to the court on the grounds that the report contained hearsay evidence, was prejudicial, contained unsworn testimony and inflammatory matter, and was not subject to cross examination.
The presiding judge overruled the objections and stated:
"The objection is overruled, with this statement: that the Court, if he considers the supplemental report at all, will only consideror, will not consider any portion thereof which would not be admissible in the trial of a criminal action."
No findings of fact or conclusions of law were requested or filed. This being a civil action, the usual rules of procedure in civil cases are applicable. Without findings of fact or conclusions of law, the trial court is presumed in rendering its decision not to have considered inadmissible evidence. Unless appellant shows from the record that under no theory was the court authorized to enter judgment, the cause will be affirmed if the judgment on any theory is supported by the statement of facts. 3 Tex.Jur.2d, Appeal and Error Civil, p. 689, sec. 438; Rosales v. Rosales, 377 S.W.2d 661 (Tex.Civ.App., Corpus Christi, 1964, no writ).
Appellant brings a seventh point of error that the testimony of two employees of the juvenile detention home was incompetent, irrelevant, and highly inflammatory. The trial court sustained objections on the ground of hearsay as to the testimony of these witnesses, but did admit other testimony that appellant had left the juvenile home without permission after being committed pending the disposition hearing and upon being returned gave the appearance and bore the marks of a person under the influence of drugs. Appellant relies upon Article 38.29, Texas Code of Criminal Procedure (1965) which we conclude is applicable to "a defendant in a criminal case" and has no bearing upon a civil proceeding as the one before us.
We have carefully considered all points of error brought by appellant in this appeal and have overruled all points.
The business of trying and sending young boys and girls to confinement until they attain their majority is a dismal and depressing business. As pointed out by the Supreme Court of Texas in the Santana case, supra, "The policy of the juvenile laws has been fixed by the Texas Legislature; and we conceive it to be our duty to uphold the spriit of that law * * *" 444 S.W.2d 614, 617, col. 2.
The judgment of the trial court is in all things affirmed.
HUGHES, Justice (dissenting).
I agree with all the statements of law from other cases and authorities quoted in the opinion of the Court regarding the legal doctrine of in loco parentis but I do not agree that such authorities have been followed in this case. Rather, I am of the opinion that the Court has enlarged and extended the doctrine of in loco parentis to unconstitutional proportions. I, therefore, respectfully dissent.
In order that the facts may be more fully stated, I copy the following undisputed statement from appellant's brief:
"On or about February 27, 1969, Mr. Kermit Heiman, Dean of Boys at Reagan High School, Austin, Texas, received a `tip' from an unidentified student that your Appellant, Roger Mercer, had marijuana in his possession. This information was conveyed to Mr. J. Davis Hill, Principal of Reagan, *719 who then sent the Dean to get Roger and bring him to his (Mr. Hill's) office. Mr. Hill had no knowledge as to the reliability of the information or the informant, nor did he know the identity of the informant. Mr. Hill made no inquiry into the identity of the informant, nor did he make any attempt to ascertain the reliability of the information. The Dean got Roger out of class, took him by his locker, and then took him to Mr. Hill's office. In the principal's office Mr. Hill asked Roger to empty his pockets and Roger refused. Mr. Hill then insisted that Roger empty his pockets. After some discussion Mr. Hill convinced Roger that he was obligated to empty his pockets.[1] Roger then emptied his pockets onto Mr. Hill's desk. The Dean then called Roger's father, James Vernon Mercer. Roger's father was told by Mr. Hill: `You understand that I am going to have to call the police,' to which Mr. Mercer replied `yes.' Mr. Hill called the police who arrived at Reagan a short time later and took possession of the items Roger had taken from his pockets and placed upon the principal's desk."
The Court, in its opinion, states:
"The (school) principal in dealing with appellant acted in loco parentis, not for an arm of the government, when he demanded that appellant disclose the contents of his pockets."
This ruling seems supported by the decision In Re Donaldson, Cal.App., 75 Cal. Rptr. 220 (1969). This decision was by the Court of Appeal, Third District. Three Supreme Court Justices, including Chief Justice Traynor, dissented when that Court denied a hearing. I quote from the opinion of the Court:
"We find the vice principal of the high school not to be a governmental official within the meaning of the Fourth Amendment so as to bring into play its prohibition against unreasonable searches and seizures. Such school official is one of the school authorities with an obligation to maintain discipline in the interest of a proper and orderly school operation, and the primary purpose of the school official's search was not to obtain convictions, but to secure evidence of student misconduct. That evidence of crime is uncovered and prosecution results therefrom should not of itself make the search and seizure unreasonable. * *
The school stands in loco parentis and shares, in matters of school discipline, the parent's right to use moderate force to obtain obedience (43 A.L.R. 2d 473; 79 C.J.S. Schools and School Districts § 493; People v. Curtiss, 116 Cal.App. Supp. 771, 775, 330 P. 801), and that right extends to the search of the appellant's locker under the factual situation herein related.
The marijuana was not obtained by an unlawful search and seizure."
The California Court cited no authority to support its decision.
In Texas our public schools were created and they function under a constitutional mandate. Art. VII, Sec. 1 of the Texas Constitution provides:
"Section 1. A general diffusion of knowledge being essential to the preservation of the liberties and rights of the people, it shall be the duty of the Legislature of the State to establish and make suitable provision for the support and maintenance of an efficient system of public free schools."
A trustee of a school district is a public officer. Kimbrough v. Barnett, 93 Tex. 301, 55 S.W. 120 (1900).
*720 Regarding school teacher and school employees, I quote from Schools, Tex.Jur.2d, Sec. 202, 203:
"Local administrative officers and teachers in the public school system are ordinarily selected by, and are subject to the control of, the district school trustees. They function under the supervision of the board and are required to comply with its reasonable rules and regulations.
A teachers' retirement system is provided for by statute, having been authorized by the constitution. * * *
Any citizen may have an inherent right to teach in a private school, but no one has an inherent right to teach in the public free schools. Since the state supplies the revenue to support public schools and pay the salaries of teachers, the state may justly claim the right to prescribe the qualifications of those who teach, and name the conditions under which the privilege of teaching may be exercised."
Regarding disciplinary powers of school authorities, I quote from Sec. 237 of the same authority:
"In a limited sense the superintendent, principal, and board of trustees of a public free school stand in loco parentis to pupils attending the school, and they may officially exercise whatever powers of control, restraint, and correction over pupils as may be reasonably necessary to enable the teachers to perform their duties and to effect the general purposes of the educational system." (Italics added)
Art. 2898, V.T.C.S., provides, in part, that any child within the compulsory school age (7 and not more than 16 yrs.) who is an incorrigible shall be reported to the attendance officer who shall proceed against such child in the juvenile court.
I cannot agree that Mr. Hill was acting in a purely personal capacity when he demanded that appellant empty his pockets. He was acting within the scope of his duties as an employee of the State. It was through such employment that he succeeded to some of the authority of the parents of appellant under the doctrine of in loco parentis, and but for his position he would have had no parental control over appellant.
It is my opinion that the search made of appellant was a valid administrative search for school purposes only and that to this extent, and this extent only, have the parents of appellant transferred their right as parents to public school authorities.
No one would contend that a parent has transferred all of his rights as a parent by sending his children to school or that thereby the school authorities have become obligated to assume all the responsibilities of parenthood. The primary responsibility of a parent is to support his minor children. School authorities would surely disclaim this responsibility. It is common knowledge that school authorities will not give medicine to a child unless authorized by the parent and a physician. Also, that in some schools corporal punishment will not be administered to a child without parental consent.[2]
Here, however, it is held that school officials may use their derivative parental *721 authority and exercise their derivative parental discretion in deciding, not whether a boy should be strapped, suspended or expelled from school but whether he should be deprived of his liberty for a period of years.
Let us examine what the rights of appellant's parents would be had they searched him with the same results as the search by Mr. Hill.
Art. 77, V.T.P.C., defines an accessory as one, knowing that an offense has been committed, conceals the offender, or gives him any other aid to enable him to escape arrest or punishment. Art. 78, id., provides, in part, that the relations of the offender in the ascending or descending line by consanguinity or affinity cannot be accessories.
In Villareal v. State, 78 Tex. Crim. 369, 182 S.W. 322, (1916), it was held that a father by concealing the fact that his son had shot and killed a person was not guilty as an accessory to the crime.
It follows that the parents of appellant had they searched him in privacy could have remained silent as to the result of the search without incurring criminal liability. This was a right or privilege which Mr. Hill did not have and which I submit could not be and was not transferred to school authorities under the doctrine of in loco parentis.
The only manner in which these parental rights, conferred by statute, can be preserved is by denying to others imputed authority to exercise them.
How many parents of teenage children would knowingly transfer to school authorities their right and privilege of determining whether evidence incriminating their child should be suppressed or used to deprive him of his freedom for years?
I believe the law to be, as stated above, that school authorities may use such powers of control, restraint and correction over pupils as may be reasonably necessary to enable them to perform their duties and to effect the general purposes of the educational system, and that here their authority ends.[3]
*722 It was in furtherance of this power that appellant was searched, and proper punishment, suspension or expulsion would also have been pursuant to this power. It was not, however, pursuant to or in furtherance of this power that appellant was deprived of his liberty for a period of years.
The search of appellant was made before his father was called, and, hence, his father could not have consented to the search. I find no evidence that appellant's father consented to admission in evidence the results of the search of his son. Also, I note, the arrest of appellant was made after the search.
Appellant has devoted a considerable portion of his brief to the tortuous history of Overton v. New York, 393 U.S. 85, 89 S. Ct. 252, 21 L. Ed. 2d 218, reh. den., 393 U.S. 992, 89 S. Ct. 441, 21 L. Ed. 2d 457. I do believe it supports appellant in his views regarding the doctrine of in loco parentis as applied to school authorities which have been adopted by me as shown herein. The confused state of the litigation does not, however, warrant me in detailing its travail here.
I agree with this statement of the law in Ciulla v. State, 434 S.W.2d 948, Tex. Civ.App., Houston (1st), no writ (1968):
"A minor has the same constitutional right to be secure in his person from all unreasonable seizures as has an adult. The 14th Amendment and the Bill of Rights protect minors as well as adults. In re Gault, 387 U.S. 1, 87 S. Ct. 1428, [18 L. Ed. 2d 527] (1967); Continental Casualty Co. v. Miller, 135 S.W.2d 501 (Waco Civ.App.1940, n. w. h.)."
I believe that appellant has been deprived of this constitutional right in this case.[4] I would reverse and remand this case with instructions to sustain appellant's motion in limini to suppress evidence obtained as a result of the search of appellant by Mr. Hill.
NOTES
[1] Under these circumstances there was no consent by appellant to the search. Bumper v. North Carolina, 391 U.S. 543, 88 S. Ct. 1788, 20 L. Ed. 2d 797 (1968).
[2] In Gould v. Christianson, D.C.N.Y., 10 Fed.Cas.No.5,636, p. 857, Blatchf. & H. 507 (1836) where a "boy" before the mast sued the shipmaster for damages for cruel treatment it was contended by the defendant that "in respect to the minor, the master stood emphatically in loco parentis, and was empowered to correct him under the same immunity that a father may correct a child." The Court disagreed saying, "A master of a vessel, under the imputed authority of a parent over crew, or even over mere boys under his charge, cannot claim the exemption or immunity which a father enjoys, to chastise a child at his discretion, without responsibility to the law, by punishments other than such as are cruel and injurious to the life or health of the child or are a public offense. On the contrary, a shipmaster is liable directly to a minor for every personal tort committed upon him without legal justification."
[3] The record reflects these facts:
"Mr. Hill has a number of students (whose identities remain undisclosed) who provide `tips' to school officials as to whom may be in possession of marijuana.
Mr. Hill meets with the Austin Police Department on a weekly basis. Particularly with the Special Services Division (narcotics squad).
Mr. Hill maintains lists of suspected marijuana users. In connection with maintaining such lists, Mr. Hill confers with the police agents of the Special Services Division and notifies them of students who might be using drugs.
Mr. Hill considers his powers to investigate possible criminal activity to be virtually unlimited (`the same as the parent'). It is the practice of Mr. Hill to conduct `shake downs' of large groups of students when he deems it necessary."
These facts make relevant the following comments from respected sources:
"School officials are said to be in loco parentis to each student. Consequently, they may have a duty to each student to advise him of his rights and protect him against over zealous police investigation." Knowles, "Crime Investigation in the School: Its Constitutional Dimensions," 4 J. of Fam.L. 151, 152 (1964).
"The enigmatic nature of the in loco parentis relationship comes into sharp focus when police visit the school and ask the assistance of the school personnel in the questioning and search of the person or effects of a student. Should school personnel protect the student, respecting his right to privacy and the privilege against self incrimination, or is their loyalty to the societal interest in the detection of crime and the protection of the mass of the student body from danger * * *" Suffice it to say that, since Gault (387 U.S. 1. [87 S. Ct. 1428, 18 L. Ed. 2d 527]), the emphasis seems to be on guaranteeing the student full access to due process of law pending full disclosure. Anything short of this guarantee may subject the principal and his staff to embarrassing complications at a later date. Thus, in loco parentis may now more clearly mean an obligation to the accused, particularly if the penalty which may be the result of disclosure deprives him of his liberty * * *" Nolte, Guide to School Law, p. 113 (Parker 1969).
[4] That these rights may be asserted in juvenile cases see State in interest of L.B. 99 N.J.Super. 589, 240 A.2d 709, N.J. Juvenile and Domestic Relations Court, Union County (1968) and authorities there cited. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1599994/ | 571 So. 2d 946 (1990)
Lois WEBSTER
v.
MISSISSIPPI PUBLISHERS CORPORATION.
No. 07-CA-58372.
Supreme Court of Mississippi.
November 28, 1990.
Cotton Ruthven, Waller & Waller, Jackson, for appellant.
Suzanne N. Saunders and Sheila R. Fortenberry, Saunders Abel & Fortenberry, Jackson, for appellee.
W. Wayne Drinkwater, Jr., John C. Henegan, Butler Snow O'Mara Stevens & Cannada, Jackson, Robb M. Jones, Nixon Hargrave Devans & Doyle, Washington, D.C., John Grower, William L. Smith, Brunini Grantham Grower & Hewes, Jackson, S. Russell Headrick, Armstrong Allen Prewitt Gentry Johnston & Holmes, Memphis, Tenn., Daniel L. Singletary, Heidelberg & Woodliff, Luther Ott, Ott & Purdy, Peyton S. Irby, Jr., Watkins Ludlam & Stennis, Jackson, Steven Moll, Sabin Bermant & Gould, New York City, Edward Sledge, III, Hand Arandall Bedsole Greaves & Johnson, Mobile, Ala., John Nangle, Des Plaines, III., Louis Watson, Wise Carter Child & Caraway, Vardaman S. Dunn, Watkins & Eager, Jackson, Jack M. Weiss, Phelps Dunbar Marks Claverie & Sims, New Orleans, La., for amici curiae.
En Banc.
*947 BLASS, Justice, for the Court:
THE ORIGINAL OPINIONS IN THIS CASE ARE WITHDRAWN AND THESE OPINIONS ARE SUBSTITUTED THEREFOR.
I.
Today's appellant complains of personal injuries caused by the negligent driving of a hauler for a newspaper publishing company. The complaint below was dismissed on the defendant's motion for summary judgment on the ground that the hauler was an independent contractor for whose torts the publisher is not responsible. We affirm. We cannot do otherwise without calling into question issues which have long been settled and making changes best left to the legislative branch.
II.
A.
Charles Savell has been hauling bundles of newspapers for the Mississippi Publishers Corporation (MPC) for forty-two years. He does business as Savell Trucking Company. Bennie W. Savell is Charles Savell's grandson and sometime employee. Doing the run for his grandfather one Saturday in April of 1985, Bennie apparently drove his grandfather's truck into the rear of Lois Webster's car, causing her extensive personal injuries.
In addition to hauling newspapers seven days a week from Jackson to Magee and Mendenhall, Savell carriers other freight. He runs an "office" at 822 South West Street in Jackson, a sort of central dispatch for the twelve other haulers that the MPC uses. Savell pays the rent and the twelve others pay Savell a fee for use of this central facility, a place where companies can call in to have their goods carried around the state. This arrangement has apparently developed over time, with Savell as the leader because of his longevity.
MPC owns The Clarion-Ledger, Jackson Daily News[1] and is the distribution agent for USA Today. On any given Saturday approximately 95,000 (MPC) newspapers are delivered. MPC's thirteen haulers pick up the prepackaged bundles of papers at the Jackson plant and deliver them, on time, in accordance with a delivery route. None of the haulers, however, actually makes home deliveries, nor do they handle money. If a retailer is dissatisfied with service, his call is ultimately directed to Reece Shook, State Operations Manager for The Clarion-Ledger. Virtually all of the newspapers are distributed by MPC in this manner.
Charles Savell and MPC sign a short form contract, yearly, outlining their respective rights and duties.[2] The contract *948 provides that MPC will furnish Savell with a delivery schedule and that Savell will deliver the newspapers to all points on the schedule at the scheduled times. The contract further provides that MPC will pay Savell a fixed sum of $2,944.00 per month. Savell is free to engage in other businesses and does so.
MPC, in addition, requires a valid driver's license from Savell, adequate equipment with which to haul the papers, and the physical ability to lift bundles. No other financial relationship is entered into: i.e., no advances, no loans, no Workers Compensation, no insurance requirements. The carriers are responsible for their own employees, maintenance, repairs, and fuel. Legal effect aside, all deponents "understand" that Savell is an independent contractor: that he is in business for himself. Savell: "I work for myself and I don't answer to the Clarion Ledger other than what is in this contract;" Williams Hunsberger, Circulation Director: "He's in business for himself."
B.
On May 23, 1985, Lois Webster filed her original complaint in the Circuit Court of Rankin County. Webster named Charles Savell, d/b/a Savell Trucking Company, and Bennie W. Savell as defendants. Mississippi Publishers Corporation was added as a party defendant about seven months later in an amended complaint filed December 19, 1985. The complaint charges that on April 20, 1985, a truck operated by Bennie W. Savell, an employee of Charles Savell, d/b/a Savell Trucking Company, struck the rear of an automobile in which Webster was riding, causing serious personal injuries.
After a volley of interrogatories, depositions and document production requests, MPC moved for summary judgment under Rule 56, Miss.R.Civ.P., asserting that the depositions of Charles Savell and two representatives of the MPC, William Hunsberger and Reece Shook, show that there is no genuine issue of material fact in dispute, and that, as a matter of law, Savell's relationship with MPC is that of an independent contractor, absolving MPC of liability in the premises. Webster asserts in her pleadings that Savell's relationship with MPC is a master and servant relationship.
Discovery developed the following facts:
1) The parties may terminate the hauling agreement without cause upon thirty days notice; no notice is required if there is a material breach of the contract;
2) Savell and MPC negotiate their contract and its terms;
3) Savell supplies his own truck, which he owns;
4) MPC contracts to have papers delivered in accordance with a delivery route and schedule;
5) There is no contractual right or obligation between MPC and Savell's employees;
6) The MPC-Savell business relationship has been long forty-two years;
7) MPC's payment is a flat fee, but is renegotiated if the route changes substantially to reflect the route's requirements;
8) Savell does not purchase nor lease his route from MPC, sell newspapers himself, get additional customers nor deliver to the ultimate consumer; he has not collected money from retailers;
9) The contract calls the relationship one of an "independent contractor";
10) Savell receives no benefits apart from his monthly payment; MPC provides no insurance.
MPC based its motion for summary judgment upon the foregoing facts, established by depositions, interrogatories and documentary exhibits. Webster produced no evidence to dispute those facts. In this setting, the circuit court granted summary judgment, dismissing Webster's complaint against MPC. The circuit court certified the case for immediate appeal. Miss.R. Civ.P. 54(b); Fruchter v. Lynch Oil Co., 522 So. 2d 195, 197-98 (Miss. 1988); Cox v. Howard, Weil, Labouisse, Friedrichs, Inc., 512 So. 2d 897, 899-901 (Miss. 1987).
III.
A motion for summary judgment tests the legal sufficiency of all or part of *949 an opponent's case. Mississippi Moving & Storage Co. v. Western Elec. Co., Inc., 498 So. 2d 340, 342 (Miss. 1986); Willis v. Mississippi Farm Bureau Mut. Ins. Co., 481 So. 2d 256, 258 (Miss. 1985); Brown v. Credit Center, Inc., 444 So. 2d 358, 362 (Miss. 1984). Where a party has moved for summary judgment on an issue, the burden of production rests on the party who, at trial, would have the burden of proof on that issue. Atkinson v. Natl Bank of Commerce, 530 So. 2d 163, 166 (Miss. 1988); Grisham v. Long V.F.W. Post No. 4057, Inc., 519 So. 2d 413, 415-16 (Miss. 1988); Galloway v. Travelers Ins. Co., 515 So. 2d 678, 683 (Miss. 1987). As Webster would be burdened at trial with persuading the court of MPC's vicarious liability for Savell's negligence via respondeat superior, she bore the burden of production on summary judgment. Fruchter v. Lynch Oil Co., 522 So.2d at 198 (Miss. 1988). None of this changes MPC's burden, once the facts are on the table, of persuading the court (1) that there is no genuine issue of material fact and (2) that MPC is entitled to a judgment as a matter of law. Brocato v. Mississippi Publishers Corp., 503 So. 2d 241, 243 (Miss. 1987); Pargo v. Elec. Furnace Co., 498 So. 2d 833, 835-36 (Miss. 1986); Modling v. Bailey Homes & Ins., 490 So. 2d 887, 891 (Miss. 1986); Smith v. Sanders, 485 So. 2d 1051, 1054 (Miss. 1986); Gray v. Baker, 485 So. 2d 306, 308 (Miss. 1986); Brown v. Credit Center, Inc., 444 So. 2d 358, 362-63 (Miss. 1983).
When passing on a motion for summary judgment, the trial court must view the evidence in the light most favorable to the party against whom the motion has been made. Turner v. Johnson, 498 So. 2d 389, 391 (Miss. 1986); Adams v. Fred's Dollar Store, 497 So. 2d 1097, 1099 (Miss. 1986); Hudson v. Bank of Edwards, 469 So. 2d 1234, 1238 (Miss. 1985); Vickers v. First Mississippi Natl Bank, 458 So. 2d 1055, 1061 (Miss. 1984). Generally, a summary judgment motion should be denied where the record is incomplete regarding a material fact. Smith v. Sanders, supra, 485 So.2d at 1054-55.
MPC argues forcefully that the status issue is one of law, peculiarly susceptible of resolution on summary judgment. Where the status issue has been fully fleshed out and there are no genuine issues of material fact, summary judgment may be appropriate. Fruchter v. Lynch Oil Co., 522 So. 2d 195, 199-201 (Miss. 1988).
IV.
The latest decisions of this Court dealing with the problem of distinguishing between independent contracts and agency or employment, discuss in some depth the issues involved, and the cases indisputably require that the judgment of the trial court be affirmed.[3]See Fruchter v. Lynch Oil *950 Co., 522 So. 2d 195, 201 (Miss. 1988) (determining that relation of master and servant was not established as between gasoline distributor and service station attendant and finding that where principal was concerned only with ultimate results and not details of agent's work, then principal was not liable for agent's acts); Champion Cable Constr. Co., Inc. v. Monts, 511 So. 2d 924, 927-29 (Miss. 1987) (held cable lineman to be subcontractor of cable construction company after finding that cable construction company had agreed to pay lineman for performance of specific task with lineman's own equipment and that lineman was responsible for liability insurance and payment of his own employees); Leaf River *951 Forest Prod., Inc. v. Harrison, 392 So. 2d 1138, 1142-43 (Miss. 1981) (finding independent contractor relation existed as between sawmill operator and logging contractor since payments from sawmill operator to logging operator were computed on basis of volume unit or production and also since logging operator controlled physical management of equipment and employees used). We do not find a single authority which dictates reversal, nor do we find, anywhere, any genuine issue of material fact that remains unresolved. Webster had the duty to respond in the trial court, but no issue of fact was raised by the affidavits or the depositions. See Galloway v. Travelers Ins. Co., 515 So. 2d 678, 683 (1987) (stating that for summary judgment, movant had burden of production only where movant would have had burden of proof at trial).
Plainly, the scheduling of delivery of the freight at fixed times at several destinations and the enforcement of the terms of the contract cannot be found to confer sufficient control to convert the hauler and his employees into employees of the owner of the freight under the decisions of this Court. The requirement of the contract presently in issue that the hauler deliver the newspapers to several destinations before or within a fixed time merely constitutes the ultimate performance sought to be obtained, not control. See Miss. Code Ann. § 71-3-3-(s) (1972) (control as to result does not make one employer under Worker's Compensation Statute); Fruchter, 522 So.2d at 199 (stating that if principal was concerned only with ultimate results rather than the details of agent's work, then principal was not liable for agent's acts); Champion Cable Constr. Co., 511 So.2d at 927-29 (1987) (explaining that independent contract relation merely called for payment for performance of specific task); Cook v. Wright, 177 Miss. 644, 171 So. 686, 689-91 (1937) (finding that subcontract to haul constituted contract for service and not for employment even though materials were to be hauled and delivered in accordance with approved plans, specifications, and requirements).
We are not confronted here with a void or even an uncertainty in the law, and therefore, we must simply declare the law as it very clearly now stands. See J.L. Teel Co., Inc. v. Houston United Sales, 491 So. 2d 851, 857 n. 3 (Miss. 1986) (citing Southern Pacific Co. v. Jensen, 244 U.S. 205, 221, 37 S. Ct. 524, 531, 61 L. Ed. 1086 (1917) (for proposition that judges do and must legislate but may do so only interstitially).
The performance requirements in issue are insufficient to confer such control so as to convert the employees of the hauler into employees of MPC, and no genuine issue of material fact remains unresolved. This case is therefore affirmed.
AFFIRMED.
HAWKINS and DAN M. LEE, P.JJ., and PRATHER and ANDERSON, JJ., concur.
ROY NOBLE LEE, C.J., and ROBERTSON, SULLIVAN and PITTMAN, JJ., dissent.
ON PETITION FOR REHEARING
ROBERTSON, Justice, dissenting.
I.
I regret that I cannot agree with the Court's decision. The issue is of some importance and I think it appropriate to state my views.
Today's appeal challenges that we take seriously a rule of law we have long given lip service. At least since 1885 we have said the proverbial independent contractor defense is not available to one who holds the right to control[1] a tortfeasor's injury-causing conduct. Here Mississippi Publishers Corporation (MPC) by contract enjoys full legal right of control of the particular *952 details of his hauler's work proximate to the risk of harm actualized on April 20, 1985. For reasons I cannot find expressed or implicit, the Court today affirms judgment for MPC a judgment entered summarily at that. Aside from injustice worked to Lois Webster, the Court's opinion suggests doubt regarding our will to enforce the law we declare.
If MPC had engaged Savell merely to haul its newspapers, indifferent to all else, I would affirm without hesitation.[2] Common sense suggests at least one detail to which no newspaper publisher may be indifferent if it hopes to stay in business, and that is timeliness of delivery. MPC by contract the Independent Hauler Agreement has reserved unto itself right of control of Savell's schedule and timing, viz., Savell "will deliver the newspapers to all points on such schedule at the scheduled times;" MPC's "newspapers are to be delivered in a timely manner." The contract gives MPC the right to terminate Savell upon "material breach." These contract terms suggest MPC's right of control of the operative details of Savell's work such that, at the very least, there is a genuine issue of material fact regarding MPC's right to control (and thus affect) the speed and care with which Savell's driver drove his truck. This is an issue of fact, and a material one at that, precluding summary judgment.
I do not question for a moment that our law has long empowered persons to make and operate under business arrangements in which one pays the other for performing a task without incurring liability to third persons for the contractor's defaults. Such contractors are commonly labeled independent contractors. This is but one of several facilities our law affords entrepreneurs whereby they may limit their liability. See also the device of the corporation, the limited partnership, the vessel owner's Limitation of Liability Act, 46 U.S.C. § 183, not to mention the private facility of insurance. But a look out the window reveals many who have relied upon these facilities and may legitimately demand that such reliance be respected, absent powerful countervailing circumstances. But the quid pro quo for enjoyment of the independent contract's limitation of liability is respect for its sine qua nons. A party may not disregard the grounds rules prescribing the independent contractor relationship and at once demand protection from third party liability, yet that is precisely the privilege MPC demands here.
It is perhaps natural that MPC would want to eat its cake and keep it as well. It is our job to prevent such excesses.
I regard the right to control test sound in theory and in practice. An employee has been thought one who works at the employer's direction in exchange for a wage. Because the employer supervises the details of the employee's work, the employer has practicable power to prevent the employee from committing torts; and the rule of respondeat superior gives the employer a strong incentive to do this. White's Lumber & Supply Co. v. Collins, 186 Miss. 659, 672, 191 So. 105, 106 (1939). The independent contractor by definition does not work under the employer's (more properly, the principal's) direction but rather promises a certain output in exchange for the contract price. Because the principal does not supervise the inputs into this contractual performance, he is not in a good position to prevent the independent contractor's torts and should not in justice be held liable for those torts absent independent *953 negligence.[3]McDonald v. Hall-Neely Lumber Co., 165 Miss. 143, 151-152, 147 So. 315, 316 (1933); Kisner v. Jackson, 159 Miss. 424, 428, 132 So. 90, 91 (1931). Against this backdrop we have regularly repeated the legal right of control test for deciding whether the relationship is one of employer/independent contractor of employer/employee. Magee, Administratrix v. Transcontinental Gas Pipe Line Corp., 551 So. 2d 182, 186, (Miss. 1989); Champion Cable Const. Co., Inc. v. Monts, 511 So. 2d 924, 927 (Miss. 1987); Georgia-Pacific Corporation v. Crosby, 393 So. 2d 1348, 1349 (Miss. 1981).
This Court has spoken to issues related to today's in a workers' compensation context.[4]Laurel Daily Leader v. James, 224 Miss. 654, 80 So. 2d 770 (1955) held a fifteen-year-old working a newspaper route an employee and entitled to compensation benefits when injured while riding his motorcycle delivering papers. Havens v. Natchez Times Publishing Co., 238 Miss. 121, 117 So. 2d 706 (1960) is to like effect, citing general independent contractor law. Certain Havens wording appears apt.
But it is contended that the appellee [the newspaper] did not actually exercise all of the rights conferred upon it in the written contracts in the instant case. [The contract read: "All deliveries shall be made as quickly as possible... .] However, the test of whether or not a person is an employee is not always whether or not the alleged employer actually controls the alleged employee, but whether he has the right to control."
238 Miss. at 127, 117 So.2d at 709.
It is true that in 1956[5] the legislature partially repealed the Laurel Daily and Havens holdings. Miss. Code Ann. § 71-3-3(d) (Supp. 1988) excludes from the Compensation Act's definition of "employee"
... any individual performing service in, and at the time of, the sale of newspapers or magazines to ultimate consumers under an arrangement under which the newspapers or magazines are to be sold by the individual at a fixed price, the individual's compensation being based on the retention of the excess of such price *954 over the amount at which the newspapers or magazines are charged to the individual, whether or not the individual is guaranteed a minimum amount of compensation for such service or is entitled to be credited with the unsold newspapers or magazines returned.
This exclusion removed from compensation coverage the familiar "paper boy." MPC gains no advantage from this statutory exclusion as its contract with Savell is quite different. The same statute excludes as well "all independent contractors." Presumably the general contours of that legal status, as outlined in Laurel Daily and Havens, remain good law. If so, Savell is quite likely not an independent contractor.
Statutes are expressions of public policy made by that department of government charged primarily to make public policy and often have force beyond that expressed. J.L. Teel Co., Inc. v. Houston United Sales, Inc., 491 So. 2d 851, 857 (Miss. 1986). It is not quite apparent why on principle newspaper boys should be removed from the coverage of the compensation act and not haulers like Savell. The better perspective, however, is from a step back where we see the general definitions of, and divide between, employees and independent contractors, from whence Miss. Code Ann. §§ 71-3-3(d) and (r) (Supp. 1988) appear an aberration in an otherwise coherent scheme.
Today's question is more narrow. On this record, does Rule 56, Miss.R.Civ.P., empower the Circuit Court to decide summarily that Savell was an independent contractor, thus exonerating MPC of liability for Webster's injuries? The question turns on whether there may be found in the record a genuine issue of material fact on the matter of MPC's right of control of those details of Savell's work proximate to the risk of harm here actualized. Laurel Daily and Havens cinch the point for reversal. Beyond these our other cases in the field suggest a like result, including most recently Magee which states "[w]hat is critical is whether ... [MPC] maintains any right of control over the performance of that aspect of the work that has given rise to the injury." Magee, 551 So.2d at 186.
In Blackmon v. Payne, 510 So. 2d 483 (Miss. 1987) this Court held as error the trial court's entry of summary judgment in favor of defendant trucking company. Citing a direct conflict in evidence between an affidavit and a deposition submitted by Payne, the tortfeasor, concerning whether Payne worked exclusively for the trucking company, this Court held that the determination of Payne's relationship with the trucking company was a question for further litigation. Blackmon tends toward reversal here.
In contrast, Fruchter v. Lynch Oil Co., 522 So. 2d 195 (Miss. 1988) held that a gasoline distributor's relationship to a service station operator was that of independent contractor. Fruchter is distinguishable on its facts. Lynch Oil's enterprise vis-a-vis the service station operator neither exercised control nor created risks remotely comparable to the facts at bar. Still, much there said affords perspective today.
Our cases in the field revolve around the idea of control. The right to control is as important as de facto control at the tortious moment, for the right to control the work of another "carries with it the correlative obligation to see to it that no torts shall be committed" by the other in the course of the work. [Citation omitted] Our question thus is not what Lynch Oil did but what it may have done on August 17, 1984. [Citation omitted]
Fruchter, 522 So.2d at 199. As there was no evidence Lynch Oil had any right of control over the details of the work proximate to Fruchter's injuries, Fruchter is no authority for affirmance today.
Turner v. Williams, 257 So. 2d 525 (Miss. 1972) concerned a charge of wrongful cutting of timber. Turner argued that his timber cutter, Rogers, was an independent contractor. Because Turner had the right to direct which trees were to be cut, the Court held his control sufficient that he was not entitled to judgment as a matter of law on his independent contractor defense. Turner, 257 So.2d at 527. In Leaf River Forest Products, Inc. v. Harrison, 392 *955 So.2d 1138 (Miss. 1981), we recognized the independent contractor defense because "the contract gave Leaf River no right of control over the time, manner or method of doing the work... ." Leaf River, 392 So.2d at 1141. See also, Crescent Baking Co. v. Denton, 147 Miss. 639, 647-48, 112 So. 21, 22-23 (1927). Lewis v. Brogdon, 208 So. 2d 761, 769 (Miss. 1968) decreed a like result after two trials on the merits, although "timing was an important part of the result to be achieved by shipper." Of course, defendant's right of control need not extend to every detail of the work before he may be held vicariously liable, only those details which may be said proximate to the risk of harm actualized in the case at bar. Magee, Administratrix, Etc. v. Transcontinental Gas Pipe Line Corp., supra.
MPC aggressively pursues the role of this state's leading print media enterprise. Not only do its newspapers' reporters cover the news across the state, it seeks to reach readers in all eighty-two of our counties. To achieve this end, it dispatches trucks from Jackson and onto our roadways 365 days a year directed toward distribution centers near and far. MPC holds the legal right to and does prescribe the routes for these trucks and points of delivery. Time is of the essence in this work.[6] Employing conventional terminology, MPC maintains sufficient control over its haulers that timely daily delivery is accomplished. Few occurrences are of greater consternation than late delivery.
MPC's goal is to "shoot for 6:30 a.m. delivery" of The Clarion Ledger to its customers each day. The target delivery deadline for The Jackson Daily News, the afternoon newspaper, is between 5:00 and 5:30 p.m. each day. MPC's Hunsberger on deposition said there are times when these deadlines are not met, citing "press problems, distribution problems, contractors breaking down, carriers breaking down, a lot of factors." In characterizing the delivery deadlines, Hunsberger said, "That's ... when we like to see all the papers delivered by." MPC has done a "time study" on its haulers, using one of its employees to follow the carriers and keep detailed records on the routes followed and the times when deliveries are made. On deposition, MPC's State Operations Manager Shook stated he would tolerate a contractor's truck breakdown causing the papers to be three hours late one night, but if this continued for several weeks, he would tell the contractor "he needed a new vehicle." He said he would not tolerate this for as long as a month.
In the end, two points predominate. First, neither the label "Independent Hauler Agreement" nor the parties' (MPC and Savell) understanding of the nature of their relationship is controlling. See Elder v. Sears Roebuck & Co., 516 So. 2d 231, 235 (Miss. 1987); Royal Oil Co., Inc. v. Wells, 500 So. 2d 439, 447 (Miss. 1986); Hardy v. Brantley, 471 So. 2d 358, 369-74 (Miss. 1985); Hobbs v. International Paper Co., 203 So. 2d 488, 490 (Miss. 1967); cf. Havens v. Natchez Times Publishing Co., 238 Miss. at 124-28, 117 So.2d at 707-09.
Second, and overriding at least in today's summary judgment context are the undisguised and inexorable realities of MPC's relationship with Savell. MPC has been careful to secure for itself the right to control timely delivery. Its written contract with Savell expressly confers this right. Without doubt, significant failure to make timely delivery would constitute a material breach, authorizing MPC to terminate Savell without notice. MPC's right to control timely delivery means that Savell's drivers may not be allowed to pull off the road and rest if they get sleepy.[7] All of *956 this suggests that Webster, not MPC, should have been the party moving for (partial) summary judgment.
A not insignificant backdrop is MPC's certain level of indifference to what else Savell does so long as he timely does his job. MPC's Reece Shook gives the point potency. When asked if a hauler showed up at the newspaper visibly intoxicated, would MPC allow him to leave with the newspapers, Shook stated "that will be left entirely up to the man that they work for." Hunsberger, on the other hand, stated that there was no kind of testing or requirements for qualifications for Savell's drivers other than the need for a valid driver's license and that he look at his equipment "to be sure that it will make it down the road."
These points, coupled with the facts elaborated by the majority, convince me that there are present genuine issues of material fact regarding MPC's legal control of and hence legal responsibility for the torts of its hauler of 42 years, Charles Savell, d/b/a Savell Trucking. This conclusion precludes summary disposition of Webster's claim against MPC. I would reverse.
ROY NOBLE LEE, C.J., and SULLIVAN and PITTMAN, JJ., concur.
NOTES
[1] MPC ceased publishing The Jackson Daily News on June 9, 1989. The facts narrated here are those reflected by the record formally closed before that time.
[2] The form contract reads as follows:
Independent Hauler Agreement
This agreement is made on the ____ day of ____, 19__, at ____ between Mississippi Publishers Corporation and ____ of ____, hereinafter called "the hauler".
Whereas Mississippi Publishers Corporation is the publisher of the Clarion Ledger Jackson Daily News and distributor of U.S.A. Today and the hauler desires to engage in the independent business of transporting the Clarion Ledger/Jackson Daily News and USA Today, the parties therefore agree as follows:
(1) Mississippi Publishers Corporation will furnish the hauler with a delivery schedule and the hauler will deliver the newspapers to all points on such schedule at the scheduled times.
(2) Mississippi Publishers Corporation will pay the hauler ____ per month for delivery of the newspaper. Mississippi Publishers Corporation will pay the hauler once every month for services rendered during the month.
(3) It is understood that the hauler is free to engage in other business activities, but it is understood and agreed that Mississippi Publishers Corporation's newspapers are to be delivered in a timely manner in accordance with the delivery schedule. The hauler agrees that he will insert no foreign matter into the newspapers without prior consent of Mississippi Publishers Corporation.
(4) It is mutually agreed that the manifest delivery routes and schedules and all information contained therein are the property of Mississippi Publishers Corporation and are to be held in strictest confidence by the hauler at all times. The hauler agrees not to disclose any such information to anyone other than a representative of Mississippi Publishers Corporation, or the hauler's employees or agents who require this information in order to deliver the newspapers or to otherwise comply with this agreement.
(5) Mississippi Publishers Corporation and the hauler agrees if there is a material breach of this agreement by either party, it may be terminated without any advance notice by the other party. In addition, the parties agree that either party may terminate this agreement without any breach having occurred and without cause upon thirty (30) days advance written notice, or such shorter time as may be mutually agreed upon.
[3] See, e.g., Fruchter v. Lynch Oil Co., 522 So. 2d 195, 199, 201 (Miss. 1988) (holding that gasoline distributor lacked sufficient control over service station attendant to establish relation of master and servant after stating that employment status issue constituted question of law); Elder v. Sears, Roebuck Co., 516 So. 2d 231, 235 (Miss. 1987) (finding Sears liable for patron's slip and fall at catalogue store because Sears, in addition to evidence of control, induced customers to rely upon Sears in doing business with its agent, catalogue store); Blackmon v. Payne, 510 So. 2d 483, 489 (Miss. 1987) (holding genuine issue of material fact existed as to whether driver of tractor/trailer was independent contractor or agent of trucking company thereby precluding summary judgment where trucking company leased trailer to driver and driver's affidavit contradicted his deposition regarding issue of exclusiveness of his performance to trucking company); Hardy v. Brantley, 471 So. 2d 358, 374 (Miss. 1985) (finding Hinds General Hospital liable for negligence of emergency room staff because the hospital placed emergency room physicians in position which induced public to rely upon hospital); Ingalls Shipbuilding Corp. v. McDougald, 228 So. 2d 365, 367 (Miss. 1969) (recognizing that ordinarily prime contractor was not liable for torts of independent contractor, even though prime contractor who employed an independent contractor was found nevertheless answerable for his own negligence for failure to exercise reasonable care to provide employees of independent contractor with reasonably safe place to work upon ship under repair); Smith v. Jones, 220 So. 2d 829, 833 (Miss. 1969) (in addressing action against owner and contractor by contractor's laborer for injuries sustained during construction of chicken house, Court held contractor was independent contractor and not servant of owner even though owner furnished material as well as particular truck which had caused injuries in question. The Court explained its reasoning in stating that owner had contracted for completed job and exercised absolutely no control over details of work or acts of independent contractor or his employees); Hercules Powder Co. v. Westmoreland, 249 Miss. 849, 164 So. 2d 471, 475 (1964) (clearly finding no master and servant relation where driver owned his own truck and other equipment and hired his own employees to dig and haul stumps which were sold to defendant company); Mississippi Power & Light Co. v. Walters, 248 Miss. 206, 158 So. 2d 2 (1963) (determining that independent contractor relation existed between hauler and drilling company); Mississippi Employment Sec. Comm'n v. Plumbing Wholesale Co., 219 Miss. 724, 69 So. 2d 814, 818-20 (1954) (Court held that relationship of master and servant was established where plumbing company, which employed laborer at regular intervals to unload plumbing materials, had right to control laborer and had in fact exercised such right when it deemed fit. Court, therefore, found employer was liable for state unemployment taxes); Lancaster v. Lancaster, 213 Miss. 536, 57 So. 2d 302, 309 (1952) (Court determined that contractor was under no legal duty to employee of independent contractor with respect to dangers or exposures which were under sole control of independent contractor. Facts of case revealed that plaintiff was struck by automobile of defendant independent contractor which was driven by his employee who was engaged in sprinkling highway shoulder in connection with contracted construction work); Meridian Taxicab Co. v. Ward, 184 Miss. 499, 186 So. 636, 638-40 (1939) (determining that driver of taxicab was servant of taxicab company as driver's physical acts were subject to control of cab company in details of performance); Crosby Lumber & Mfg. Co. v. Durham, 181 Miss. 559, 179 So. 285, 287-88 (1938) (Court defined independent contractor relation as one who contracted with another to do something for him, but was not controlled nor subjected to right of control by such other with respect to his physical conduct in performance of undertaking. Court then held that contract between trucker and lumber company created independent contractor relationship. Court explained that contract in issue expressly provided lumber company with no control over methods of hauling, and Court thereafter determined that power given by contract to terminate at will constituted one factor to consider in determining whether contract created relationship of master and servant. However, Court firmly stated that power to terminate at will did not constitute such control over trucker so as to establish relation of master and servant); Cook v. Wright, 177 Miss. 644, 171 So. 686, 689-91 (1937) (Court held that master and servant relation was not established between employee of subcontractor and contractor, who had sublet contract for loading and hauling, merely because it provided that work was to be done to complete satisfaction of Highway Department and also required competent workmen. Court alternatively held that where contractor's obligation was to produce certain net result by means and methods over which, so far as concerned details of management of means and of physical conduct of himself and employees, contractor then had own control, then contract constituted contract for service as opposed to contract of service. Contract in question was to procure services of loading, hauling and distributing gravel, stone, sand, and clay in accordance with approved plans, specifications, and requirements of the State Hwy. Dept. of Mississippi); Texas Co. v. Jackson, 174 Miss. 737, 165 So. 546, 550 (1936) (Court stated that for decision of whether one was servant or independent contractor, ultimate question was whether physical conduct of employee was controlled, or subject to right of control, by employer. Thereafter, Court held master and servant relation existed as between petroleum company and its commission agent and person employed by agent since contract at bar unambiguously and expressly created such relation); Gulf Coast Motor Express Co. v. Diggs, 174 Miss. 650, 165 So. 292, 293 (1936) (Court determined that relation of master and servant existed where common carrier for hire contracted with motor trucks to deliver and accept freight because common carrier retained substantial control as to means and methods used in carrying freight. Court explained that independent contractor was one rendering services in course of his occupation which represented will of his employer as to results alone, and not as to means of accomplishing those results); Shell Petroleum Corp. v. Linham, 163 So. 839 (Miss. 1935) (clearly finding oil and sales requirement contract established independent contractor relation between producer and wholesale dealer in petroleum products and lessee of gasoline filling station); See also Crescent Baking Co. v. Denton, 147 Miss. 639, 112 So. 21 (1927) (Court held that independent contractor relation was established where truck driver was engaged in delivering bread along designated route of baking company from which truck driver purchased bread and over whom baking company exercised no control, except as to route, in operation of business and in selling and delivering bread to patrons. Court explained that truck driver was simply vendor of bread on his own account even though he sold in prescribed territory and on prescribed route).
[1] See New Orleans, Baton Rouge, Vicksburg and Memphis Railroad Co. v. Norwood, 62 Miss. 565, 568 (1885); Hutchinson-Moore Lumber Co. v. Pittman, 154 Miss. 1, 12, 122 So. 191, 193 (1929); Texas Company v. Mills, 171 Miss. 231, 243, 156 So. 866, 869 (1934) down through Fruchter v. Lynch Oil Co., 522 So. 2d 195, 199 (Miss. 1988).
[2] In a survey of other states, "the most important consideration in the determination of whether a carrier is an employee or an independent contractor is the amount of control the employer possesses over him." Annotation, Newspaper Boy or Other News Carrier as Independent Contractor or Employee for Purposes of Respondeat Superior, 55 A.L.R. 3d 1216, 1219 (newscarriers as independent contractors). This A.L.R. annotation focuses exclusively on newspapers and their carriers and the legal status of the relationships into which they have entered. The cases prove strikingly helpful for pointing out that the facts of each relationship are key, but also prove on closer inspection to be nearly universally inapplicable to today's case because of the details of those relationships. See also Note, Newspaper Carrier Servant or Independent Contractor 46 Ky. L.J. 596, 598 (1958).
[3] See Landes and Posner, The Economic Structure of Tort Law 207 (1987). That the rule of respondeat superior is settled is not to suggest its rationale is unproblematic. It has puzzled some of our most pre-eminent pundits. See Holmes, Law in Science and Science in Law, 12 Harv.L.Rev. 443, 455 (1899).
[4] Under Mississippi's Workmen's Compensation Statute § 71-3-1, et seq., (Supp. 1988), the following definitions are analogous and thus instructive, though not controlling:
Section 73-3-3(d): "Employee" means any person, including a minor whether lawfully or unlawfully employed, in the service of an employer under any contract of hire or apprenticeship, written or oral, express or implied, provided that there shall be excluded therefrom all independent contractors and especially any individual performing service in, and at the time of, the sale of newspapers or magazines to ultimate consumers under an arrangement under which the newspapers or magazines are to be sold by the individual at a fixed price, the individual's compensation being based on the retention of the excess of such price over the amount at which the newspapers or magazines are charged to the individual, whether or not the individual is guaranteed a minimum amount of compensation for such service or is entitled to be credited with the unsold newspapers or magazines returned.
Section 71-3-3(r): "Independent Contractor" means any individual, firm or corporation who contracts to do a piece of work according to his own methods without being subject to the control of his employer except as to the results of the work and who has the right to employ and direct the outcome of the workers independent of the employer and free from any superior authority in the employer to say how the specified work shall be done or what the laborers shall do as the work progresses, one who undertakes to produce a given result without being in any way controlled as to the methods by which he attains the result.
See also Restatement (Second) of Agency §§ 2, 220 (1933).
The definitions found in the compensation act with one quite relevant exception appear consistent with those long embodied in our general law. See Dunn, Workers Compensation §§ 128, et seq. (1982). No legal imperative compels identical or differing definitions both for compensation purposes and in today's third party liability context. The law may not be a seamless web yet virtue hardly attends the judicial effort that consciously rents the web.
[5] The amendment was enacted on April 6, 1956. Miss. Laws ch. 344 (1956). The accident in Havens had occurred on July 31, 1955. Hence, Havens was decided under the compensation act as it pre-existed the amendment.
[6] Remember Laurel Daily Leader, Inc. v. James, 224 Miss. 654, 662, 80 So. 2d 770, 772 (1955), the newspaper boy workers compensation case in which the Court observed "Circulation is a necessity for success. The delivery boys are just as much an integral part of the newspaper industry as are the typesetters and pressmen or the editorial staff."
[7] The record is not clear regarding the extent MPC demands strict compliance with its time schedule. The contract certainly empowers MPC to tell Savell he must deliver the newspapers to Mendenhall at 5:30 a.m. each morning and not a minute later, but we are not clear how strictly this is enforced. More significantly, the record is less than clear what role, if any, MPC's control of timely delivery may have played in the accident of April 20, 1985, and Lois Webster's attendant injuries. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1608481/ | 773 F. Supp. 1005 (1991)
Joseph WAECHTER and Gloria Waechter, individually and as Personal Representatives of the Estate of Michael A. Waechter, Deceased, Plaintiffs,
v.
SCHOOL DISTRICT NO. 14-030 OF CASSOPOLIS, MICHIGAN; Edwardsburg Public Schools Board of Education; James Olin; Patrick Fetherston; James Culver; and Craig Gordon, in their individual capacities only, Defendants.
No. 1:90-CV-769.
United States District Court, W.D. Michigan, S.D.
September 11, 1991.
*1006 William J. Brennan, Dykema, Gossett, Grand Rapids, Mich. and John B. Roesler, Caldwell, Smith, Jesmer & Roesler, P.A., Santa Fe, N.M., for plaintiffs.
Charles F. Behler, Smith, Haughey, Rice & Roegge, P.C., Grand Rapids, Mich. and Donald J. Bonato, Thrun, Maatsch & Nordberg, Lansing, Mich., for defendants.
Charles E. Barbieri, Foster, Swift, Collins & Smith, P.C., Lansing, Mich., for arbitrator.
OPINION
BENJAMIN F. GIBSON, Chief Judge.
This matter arises out of the death of Michael A. Waechter ("decedent"). Plaintiffs Joseph and Gloria Waechter, parents of the decedent, allege violations of their and their son's civil rights protected by the United States Constitution. They also allege violations of the Federal Rehabilitation Act of 1973, 29 U.S.C. § 794, and the Michigan wrongful death statute, M.C.L.A. § 600.2922.[1] Pending before the Court is *1007 defendants School District No. 14-030 et al.'s motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6).
I.
The facts as taken from plaintiffs' complaint are treated as true for the purposes of a motion to dismiss. According to the complaint, decedent died on December 19, 1988, on the playground of Eagle Lake Elementary School. At that time he was a thirteen year old, fifth grade special education handicapped student enrolled at the school.
Decedent was born with a congenital heart defect requiring temporary corrective surgery at the age of one week and open heart surgery at the age of sixteen months. His condition left him with symptoms of dizziness, fainting, chest pain, exhaustion, and rapid heart palpitations. As an infant, he also contracted meningitis which left him with orthopedic and learning disabilities. His legs were of uneven length and he wore a brace on the right leg from his knee to his toes to restrict ankle movement. As a result, he had poor balance and certain physical limitations. Because of his heart condition, decedent's physician directed that he was not to participate in competitive contact sports or any forced exertion. Defendants were informed and aware of decedent's medical history, physical limitations, and doctor's orders.
Defendant Craig Gordon was decedent's fifth grade teacher and recess supervisor. As recess supervisor, he customarily employed a form of punishment known as the "gut run." The gut run was a 350-yard sprint that was required to be completed in under two minutes. Plaintiffs allege that the other defendants knew, or should have known, that Gordon employed the gut run as a disciplinary punishment. On December 19, 1988, Gordon instructed decedent to run the gut run as punishment for talking in line with another classmate during recess. While making the run, decedent suffered cardiac arrhythmia and died. Thereafter, defendants allegedly concealed the true circumstances of decedent's death. Plaintiffs were informed that their son died while voluntarily playing football.
Eagle Lake Elementary School was at all pertinent times a public elementary school in Cass County, Michigan. It was under the jurisdiction of defendants School District Number 14-030 of Cassopolis, Michigan ("School District") and Edwardsburg Public Schools Board of Education ("School Board"). Defendants School District and School Board were allegedly responsible for the training of teachers as to discipline, safety, and supervision of students. They were recipients of federal financial assistance and special education programs for handicapped students. Defendant Olin was at all pertinent times the superintendent of schools for the School District. Defendant Fetherston was president of the School Board and defendant Culver was principal of Eagle Lake Elementary School. These defendants are all sued in their individual capacities only.
II.
A motion to dismiss tests whether a claim has been adequately stated in the complaint. The Court's inquiry at this point, before the reception of any evidence by affidavit or admission, is merely whether the challenged pleading sets forth allegations sufficient to make out the elements of a right to relief. In making this determination, the allegations in the pleading are taken at "face value", California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 515, 92 S. Ct. 609, 614, 30 L. Ed. 2d 642 (1972), and should be construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 1686, 40 L. Ed. 2d 90 (1974). "[W]ell pleaded facts are taken as true, and the complaint *1008 is construed liberally in favor of the party opposing the motion." Davis H. Elliot Co. v. Caribbean Utilities Co., 513 F.2d 1176, 1182 (6th Cir.1975). All reasonable inferences which might be drawn from the pleading must be indulged. Fitzke v. Shappell, 468 F.2d 1072, 1076 n. 6 (6th Cir.1972). The court must deny the motion to dismiss unless it can be established beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983), cert. denied, 469 U.S. 826, 105 S. Ct. 105, 83 L. Ed. 2d 50 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957).
III.
A. FOURTEENTH AMENDMENT SUBSTANTIVE DUE PROCESS
The Due Process Clause of the fourteenth amendment provides that no state may "deprive any person of life, liberty, or property, without due process of law." Plaintiffs' claim invoking the substantive component of the Due Process Clause is brought pursuant to Title 42 United States Code Section 1983 and is premised on the assertion that defendants had a categorical obligation not to harm decedent under the circumstances of this case. DeShaney v. Winnebago County Dept. of Social Services, 489 U.S. 189, 195, 109 S. Ct. 998, 1003, 103 L. Ed. 2d 249 (1989).[2] Mere lack of due care cannot trigger a violation of constitutional proportions. In Daniels v. Williams, 474 U.S. 327, 328, 106 S. Ct. 662, 663, 88 L. Ed. 2d 662 (1986), the Supreme Court found that:
[T]he due process clause is simply not implicated by a negligent act of an official causing unintended loss of or injury to life, liberty, or property. (Emphasis in original.)
For plaintiffs to prevail, the action taken must amount to a deliberate decision of a government actor to deprive a person of life, liberty, or property. Daniels, 474 U.S. at 331, 106 S.Ct. at 665.
In DeShaney, the court determined that when an individual is in the "custody" of the state, the state has an affirmative responsibility to protect that individual from deprivations of life, liberty, or property. DeShaney, 489 U.S. at 199-200, 109 S.Ct. at 1005-1006. The court found that the state's failure to protect a child from physical abuse did not amount to a substantive due process violation where that child was beaten to death by his father. Although the state knew of the father's propensity for child abuse, and it voluntarily undertook to protect the child from abuse, as long as the child was not in state custody the state was under no constitutional duty to protect the child. Accordingly, the state did not cause the deprivation of the child's life. The court held that the state's affirmative duty toward an individual:
[A]rises not from the State's knowledge of the individual's predicament or from its expressions of intent to help him, but from the limitation which it has imposed on his freedom to act on his own behalf. In the substantive due process analysis, it is the State's affirmative act of restraining the individual's freedom to act on his own behalf through incarceration, institutionalization, or other similar restraint of personal liberty which is the "deprivation of liberty" triggering the protections of the Due Process Clause, not its failure to act to protect his liberty interests against the harms inflicted by other means.
DeShaney, 489 U.S. at 200, 109 S.Ct. at 1005 (citations omitted) (emphasis added).[3]
*1009 This language is somewhat troublesome in undertaking a comprehensive substantive due process analysis. Several circuit courts have held that an egregious abuse of governmental power gives rise to a substantive due process claim. There is no requirement that the government actor stand in any sort of custodial relationship with the individual affected by his action. The state need not restrain the individual's personal liberty, but more generally:
The substantive component of the due process clause "bar[s] certain government actions regardless of the fairness of the procedures used to implement them [and thereby] serves to prevent governmental power from being `used for purposes of oppression.'"
Vinson v. Campbell County Fiscal Court, 820 F.2d 194, 200 (6th Cir.1987) (quoting Daniels v. Williams, 474 U.S. 327, 106 S. Ct. 662, 88 L. Ed. 2d 662 (1986) (citations omitted)). See also Cale v. Johnson, 861 F.2d 943, 950 (6th Cir.1988); Burton v. Livingston, 791 F.2d 97, 99-100 (8th Cir. 1986).
Arguably, after DeShaney, an egregious abuse of governmental power can only arise in situations where, in some sense, a custodial relationship exists between the individual harmed and the state actor who inflicted the harm. DeShaney is explicit that the protections of the due process clause are triggered when the state's affirmative action "restrains the individual's freedom to act on his own behalf." DeShaney, 489 U.S. at 200, 109 S.Ct. at 1006.[4] Applying this reading of DeShaney as a general rule in substantive due process analysis, it is clear that decedent was in a custodial relationship with defendant Gordon.[5] Gordon was his teacher. He was aware of decedent's physical limitations and as recess monitor he undertook to supervise decedent's activities. As alleged in the complaint, Gordon's affirmative action led to decedent's death. The situation is clearly similar to that in Webb v. McCullough, 828 F.2d 1151 (6th Cir.1987). In that pre-DeShaney case, the Sixth Circuit found that a high school teacher stands in an in loco parentis relationship with his students.[6] This relationship heightens his responsibility for the students' well-being. Accordingly, punishment which is not disciplinary in nature or which clearly exceeds reasonable discipline may amount to a substantive due process violation. Webb, 828 F.2d at 1158.
*1010 Likewise, even if the "egregious abuse of governmental power" standard survives DeShaney without a custody requirement, Gordon's instruction to run the gut run may have violated decedent's substantive due process rights. It was not simple negligence as urged by defendants. If true, a reasonable jury could conclude that Gordon's command:
[W]as so disproportionate to the need presented, and was so inspired by malice or sadism rather than a merely careless or unwise excess of zeal that it amounted to a brutal and inhumane abuse of official power literally shocking to the conscience.
Webb, 828 F.2d at 1158.
Plaintiffs' substantive due process claims against the remaining defendants rely on a finding that they failed to properly train and supervise defendant Gordon. Paragraph 33 of the complaint alleges:
The individual Defendants, by their actions and inactions, could not help but know that permitting and sanctioning the "gut run" would subject Michael A. Waechter to the risk of injury or heart failure, and Defendants therefore were grossly negligent, grossly reckless and displayed reckless disregard and deliberate indifference for the health and safety of Michael A. Waechter in the face of his known health problems.
Liability attaches to official policy determinations which are made by a state official:
responsible for establishing final government policy respecting such activity.... [L]iability under § 1983 attaches where and only where a deliberate choice to follow a course of action is made from among various alternatives by the official or officials responsible for establishing final policy with respect to the subject matter in question.
Pembaur v. Cincinnati, 475 U.S. 469, 483, 106 S. Ct. 1292, 1300, 89 L. Ed. 2d 452 (1986). Defendants do not contend that they were not responsible for establishing final government policy. Rather, they assert that any alleged constitutional violations are not attributable to a policy or custom of the defendants. However, plaintiffs' complaint alleges that these defendants knew or should have known of Gordon's practice of using the gut run as discipline. They chose not to interfere with Gordon's customary imposition of this punishment. This alleged failure may show such "deliberate indifference" to the rights of persons such as decedent to rise to the level of a violation attributable to these defendants. See Canton v. Harris, 489 U.S. 378, 388-89, 109 S. Ct. 1197, 1204-05, 103 L. Ed. 2d 412 (1989).
Finally, defendants contend that they are protected by eleventh amendment qualified immunity. They assert that the legal standard making their actions a substantive due process violation was not clearly established at the time of decedent's death. If the defendants' actions were objectively reasonable as measured by clearly established law, then they are immune from liability. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 2738, 73 L. Ed. 2d 396 (1982). The important consideration is whether defendants could fairly be said to "know" that the law forbade the action they undertook. Harlow, 457 U.S. at 818, 102 S.Ct. at 2738. To answer this question, the Court need look no further than the Sixth Circuit's holding in Webb. As early as September 17, 1987, defendants were on notice that in the public school context, physical punishment which is not disciplinary in nature or which is so disproportionate to the need presented as to amount to "a brutal and inhumane abuse of official power literally shocking to the conscience" violates an individual's substantive due process rights. Webb, 828 F.2d at 1158 (citation omitted).
B. FOURTEENTH AMENDMENT PROCEDURAL DUE PROCESS
The procedural component of the fourteenth amendment requires the state to accord an individual appropriate procedural safeguards in cases where the state denies that individual life, liberty, or property. DeShaney, 489 U.S. at 195, 109 S.Ct. at 1005. In the related area of corporal punishment in the public school setting, the *1011 Supreme Court has determined that if the state affords a student adequate post-punishment remedies to deter unjustified and/or excessive punishment, the student receives all process that is constitutionally due. Ingraham, 430 U.S. at 682, 97 S.Ct. at 1418.
Michigan law provides that a school teacher or administrator may be civilly liable for inflicting physical force on a student in cases of "gross abuse and disregard for the health and safety of the pupil." M.C.L.A. 380.1312(3). The burden is on plaintiffs to affirmatively plead and prove that these state remedies are inadequate for redressing the alleged wrong. Watts v. Burkhart, 854 F.2d 839, 843 (6th Cir.1988). Plaintiffs have failed to fulfill this threshold requirement. Accordingly, their procedural due process claims must be dismissed.
C. DISCRIMINATION ON THE BASIS OF HANDICAP
Plaintiffs assert that decedent was discriminated against on the basis of handicap in violation of Section 504 of the Rehabilitation Act of 1973.[7] The elements of a cause of action under Section 504 are:
(1) The plaintiff is a "handicapped person" under the Act; (2) The plaintiff is "otherwise qualified" for participation in the program; (3) The plaintiff is being excluded from participation in, being denied the benefits of, or being subjected to discrimination under the program solely by reason of his handicap; and (4) The relevant program or activity is receiving Federal financial assistance.
Doherty v. Southern College of Optometry, 862 F.2d 570 (6th Cir.) cert. denied, 493 U.S. 810, 110 S. Ct. 53, 107 L. Ed. 2d 22 (1988).
From the face of the complaint, the first, second, and fourth elements of a cause of action are satisfied. Plaintiffs contend that the third element is satisfied by the fact that a reasonable accommodation was not made for decedent's handicap in "the general program of study which incorporated the gut run as a primary procedure for discipline." Plaintiffs' Brief at 28.
Assuming for the sake of argument that plaintiffs have successfully articulated this third element and stated a claim for violation of the Rehabilitation Act, it appears that they are not entitled to any relief under the Act. Section 505(a)(2) of the Rehabilitation Act provides that violations of Section 504 are to be remedied pursuant to the procedures and rights set forth in Title VI of the Civil Rights Act of 1964 (42 U.S.C. §§ 2000d et seq.). 29 U.S.C. § 794a(a)(1). Title VI provides aggrieved claimants with a right to seek modification of allegedly discriminatory programs, but it does not permit an award of damages. See Franklin v. Gwinnett County Public Schools, 911 F.2d 617 (11th Cir.1990). To the extent plaintiffs seek a modification of defendants' handicap program, their claims are moot. There is no longer a need to make allowances in the program for decedent's handicap. Likewise, they are foreclosed from bringing an action for damages either on their behalf or on behalf of their son.
D. PRIVILEGES AND IMMUNITIES CLAIMS
Plaintiffs allege that defendants conspired to conceal the circumstances surrounding decedent's death. This conspiracy was assertedly designed to block plaintiffs' constitutional right of access to the courts as found in Article IV, Section 2 and the first and fourteenth amendments to the United States Constitution. It is clear that individuals have a substantive constitutional right of access to courts. Ryland v. Shapiro, 708 F.2d 967, 974 (5th Cir.1983). The basis for this right is the provision of a free flow of ideas to assure that public decisionmakers will be sufficiently informed to carry out their function. Osborn *1012 v. Pennsylvania-Delaware Service Station Dealers Assn., 499 F. Supp. 553, 556-57 (D.Del.1980). In Ryland, the court found that interference with the right of access to the courts "may by itself amount to a constitutional deprivation (unless reasonably justified by a countervailing state interest)." Ryland, 708 F.2d at 975.
Plaintiffs' complaint fails to set out the prerequisites for a violation of their right of access to the courts. They assert that defendants conspired to cover up the true circumstances of decedent's death. However, plaintiffs have not alleged that this conspiracy in any way limited their access to the courts. They do not contend that it caused a delay in their recognizing a right to relief or that it impacted on their ability to bring the present action. Plaintiffs' allegations, if true, are insufficient to make a "showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).
E. PENDENT STATE CLAIMS
The Court is granted wide discretion in determining whether to exercise jurisdiction over state claims arising out of the same transaction or occurrence as plaintiffs' federal claims. The justification for exercising so-called pendent jurisdiction lies in considerations of judicial economy, convenience, and fairness. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 1139, 16 L. Ed. 2d 218 (1966).[8] In the present case, plaintiffs have pled a cause of action arising under Michigan's survival and wrongful death statutes. M.C.L.A. §§ 600.2922 and 600.2923. Although these claims arise out of the same transaction or occurrence as plaintiffs' federal claims, they involve questions of law unique to Michigan, especially regarding qualified immunity and other defenses to liability. Accordingly, the Court declines to exercise jurisdiction over these claims.
IV.
For the reasons stated above, defendants' motion to dismiss is denied in part and granted in part. It is denied as to plaintiffs' claim of a substantive due process violation. It is granted as to plaintiffs' procedural due process, handicap discrimination, right of access to courts, and pendent state law claims.
NOTES
[1] Plaintiffs' complaint is in 51 numbered paragraphs. However, the separate counts of the complaint are not separately numbered. Although the Court disapproves of this style of pleading, a review of the complaint indicates that plaintiffs have pled roughly five causes of action, as follows:
1. Violation of plaintiffs' fourteenth amendment substantive due process rights;
2. Violation of decedent's fourteenth amendment procedural due process rights;
3. Discrimination against decedent on the basis of handicap;
4. Violation of the Equal Protection and Privileges and Immunities Clauses of the United States Constitution; and
5. Pendent state law claims for wrongful death.
[2] Title 42 United States Code Section 1983 states, in pertinent part:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
[3] DeShaney implicitly rejects the notion that the state may stand in a "special relationship" with individuals by undertaking to protect them from harm by third parties. Unless the individual is in a custodial relationship with the state, no constitutional duty to protect him from third parties can arise. Id. 489 U.S. at 197-98, n. 4, 109 S.Ct. at 1004-05, n. 4.
[4] This Court's reading of the "egregious government conduct" cases indicates that typically the individual whose substantive due process rights were violated was in fact in a custodial relationship with the state or government actor. E.g. Cale v. Johnson, 861 F.2d at 944 (Plaintiff was a federal prisoner who claimed that drugs had been planted on him by a guard); Vinson, 820 F.2d at 200-201 (Plaintiff's children were taken into custody by state juvenile services probation officer); Burton, 791 F.2d at 98-99 (Plaintiff was a state prisoner, threatened by a prison guard). Accordingly, if DeShaney adds a custody requirement to substantive due process analysis, its impact appears to be fairly limited. Realistically, most substantive due process violations involve custodial relationships with the state.
[5] If a custodial relationship is required by DeShaney, it must be distinguished from the sort of relationship discussed in Ingraham v. Wright, 430 U.S. 651, 671-72, 97 S. Ct. 1401, 1412-13, 51 L. Ed. 2d 711 (1977). In that case, the Supreme Court found that a public school student was not in "custody" as that term is used in eighth amendment cruel and unusual punishment analysis. Accordingly, eighth amendment punishment concerns were not invoked by corporal punishment of a public school student via the due process clause. See also Youngberg v. Romeo, 457 U.S. 307, 102 S. Ct. 2452, 73 L. Ed. 2d 28 (1982) (Cruel and unusual punishment analysis applies via due process clause to involuntarily committed mental patients). The custody relationship that is arguably required by DeShaney is one where the individual's freedom is restricted by a government actor. It is not necessary that the individual be held against his will. The important consideration is whether the state actor exercised control over the individual's "personal liberty" under color of state law.
[6] Likewise, in Stoneking v. Bradford Area School Dist., 882 F.2d 720, 723-24 (3rd Cir. 1989), on remand from the Supreme Court in light of DeShaney, the circuit court found that a custody relationship may exist between a public school student and her teacher. The court determined that such a result was not inconsistent with DeShaney and may form the basis for a substantive due process claim.
[7] This Section provides:
No otherwise qualified handicapped individual in the United States ... shall, solely by reason of his handicap, be excluded from participation in, be denied the benefit of, or be subject to discrimination under any program or activity receiving federal financial assistance.
29 U.S.C. § 794.
[8] Gibbs may have been superseded by Title 28 United States Code Section 1367. That section requires federal courts to retain jurisdiction over pendent state claims, unless: (1) the claims raise a novel or complex issue of state law; (2) the claims substantially predominate over the federal law claims; (3) the district court has dismissed all the federal law claims; or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. This law became effective December 1, 1990, in all actions commenced on or after that date. Plaintiffs' complaint was filed September 18, 1990. Accordingly, Gibbs applies in this action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1638263/ | 675 F. Supp. 367 (1987)
Arnold GABRIELSEN and Benzion Koenig, Plaintiffs,
v.
BANCTEXAS GROUP, INC., Edward C. Nash, Jr., Michael G. Boswell, H. Glenn Butler, Charles Lee Davis, David Donosky, Jack D. Knox, John Lawrence, Bernard Rapoport, John A. Schlensker, H.D. Stanley, Charlie Thomas, C. Huston Bell, Edward O. Boshell, Jr., L.D. Brinkman, Kenneth R. Terry, Wayne G. Wickman, and Robert W. Wortham, III, Defendants.
Civ. A. No. CA3-85-2275-D.
United States District Court, N.D. Texas, Dallas Division.
June 17, 1987.
*368 *369 Dean Carlton, Dallas, Tex., for plaintiffs.
John L. Hauer, Robert E. Goodfriend, Robert B. Crotty, and Robert Elkin, of Akin Gump Strauss Hauer & Feld, Dallas, Tex., for defendants, BancTexas Group, Inc., et al.
James E. Coleman, Jr., Fletcher L. Yarbrough and Jeffrey S. Levinger, of Carrington Coleman Sloman & Blumenthal, Dallas, Tex., for defendant, Edward C. Nash, Jr.
MEMORANDUM OPINION AND ORDER
FITZWATER, District Judge.
Plaintiffs move to certify a class in this securities fraud action. The controlling question presented is whether plaintiffs have standing to assert their claims. Concluding that plaintiffs lack standing, the court dismisses the action.[1]
I.
BACKGROUND
Standing is a preliminary matter to be evaluated upon the allegations of the complaint. In re Beef Industry Antitrust Litigation, 600 F.2d 1148, 1168 (5th Cir. 1979). As it must, the court accepts as true the well-pleaded allegations of the complaint and construes the complaint in favor of plaintiffs. Warth v. Seldin, 422 U.S. 490, 501, 95 S. Ct. 2197, 2206-07, 45 L. Ed. 2d 343 (1975). As so construed, the complaint, together with plaintiffs' papers, reflect the following.
In approximately November 1983, Guy Robertson, a member of the Board of Directors of BancTexas ("BTX"), met with representatives of Texas Commerce BancShares, Inc. ("TCB") concerning a possible merger of BTX and TCB. In this meeting Robertson apparently represented two other BTX directors, Ed F. Vanston and John Hazard, but not the BTX Board. As a result of these meetings, on November 22, 1983 TCB proposed by letter to merge with BTX subject to certain conditions. The letter proposal was hand-delivered to Vanston and Robertson who, in turn, hand-delivered it to BTX's chief executive officer, Ed Nash. Nash immediately called a special meeting of the BTX Board for December 5, 1983.
Soon after Nash received the proposal and called the December 5 meeting, BTX's stock traded in unusually heavy volume on November 25, 1983, the day after Thanksgiving, which is usually a day of light volume trading. At this point, however, there *370 had been no authorized public disclosure of the TCB merger proposal. In fact, the proposed merger had been conditioned on the understanding that neither party would make any public release about the proposal until after the BTX Board had considered the proposal and TCB had made a preliminary review of BTX's assets.
On November 26, 1983, Nash insisted that TCB issue a unilateral press release stating that the merger proposal was unsolicited by BTX. Plaintiffs maintain that Nash insisted on the press release for the sole purpose of forcing TCB to withdraw its proposal before it could be considered by the BTX Board. TCB withdrew its merger proposal on November 27, 1983 and the December 5 Board meeting was cancelled. When Nash cancelled the meeting he reported that the merger proposal had been withdrawn by TCB when in fact, according to plaintiffs, he had intentionally forced withdrawal of the offer. Instead of meeting with the BTX Board on December 5, Nash called a meeting for December 5 of only the Executive Committee of the BTX Board. Nash allegedly called the meeting of the Executive Committee, rather than the BTX Board, for the purpose of preventing the BTX Board from considering the terms of the merger.
By letter, dated December 1, 1983, TCB told Nash that it would consider making another merger proposal if invited to do so. Nash did not advise the BTX Board that the December 1 proposal had been made, but told the Board by letter dated December 5, 1983 only that TCB had withdrawn its merger proposal and that there was no proposition before BTX. The terms of neither the November 22 nor December 1 offers were ever considered by the BTX Executive Committee or the BTX Board.
The BTX Executive Committee did meet on December 5, 1983 at which time Nash reported that Shearson American Express ("Shearson") had been retained to prepare a report on the current state of the banking industry and alternatives for BTX to consider. According to plaintiffs, Nash never revealed that in July 1983 he had retained Shearson, without authority of the BTX Board or the Executive Committee, to evaluate a possible merger with National BancShares, San Antonio or that Shearson would receive a commission based on a percentage of the consideration exchanged if any transaction with National BancShares, San Antonio was consummated. Plaintiffs claim that Nash manipulated Shearson's report by giving Shearson projected operating results for the last quarter in 1983, which were more favorable to BTX than were the actual 1983 year-end results. Shearson's report did not evaluate TCB's merger proposals. Nash allegedly manipulated the report for the purpose of maintaining his position as Chief Executive Officer of BTX, a position plaintiffs presume he would not have retained if a merger occurred.
Based on Shearson's report, on January 16, 1984 the BTX Executive Committee unanimously voted that it was in the best interests of BTX to continue a course of independence, rather than a course of merger or acquisition. The Shearson report was then presented to the BTX Board prior to the start of the BTX Board meeting on January 18, 1984. The terms of the TCB proposal were not revealed to or considered by the full Board at this meeting. Shearson did state at the meeting, however, that the offer from TCB should not be ignored. Two of the directors, including Robertson, requested that Shearson be allowed to analyze the TCB proposals and moved for authorization of a committee to invite TCB to make another merger proposal to the Board. A majority of the BTX Board rejected the idea of receiving another merger proposal from TCB and instead decided to adhere to the recommendations of the Shearson report. In addition to the reasons already discussed, plaintiffs claim that the BTX Board voted to follow the Shearson report and not to seek another merger proposal because the directors were not generally prepared for meetings, when they did attend the meetings, or because they owed money to or worked for BTX and were therefore subject to control of BTX management. Plaintiffs claim that after the meeting Nash forced some of the *371 BTX Board members who did not support him to resign.
In February 1984 BTX issued its proxy statement for the March 28, 1984 annual stockholders' meeting. Proxies were solicited only for (1) election of 17 BTX directors, (2) approval of a proposal to amend BTX's restated certificate of incorporation to increase authorized series preferred stock, (3) approval of a proposal to increase the number of authorized shares under the BTX stock option plan, and (4) ratification of Arthur Andersen & Co. as independent auditors of BTX.
Plaintiffs, Arnold Gabrielsen and Benzion Koenig, filed this class action complaint on November 14, 1985. The complaint first alleges three state law[2] causes of action against Nash: (1) fraud and misrepresentation; (2) breach of fiduciary duty; and (3) negligence. Two state law causes of action breach of fiduciary duty and negligence are also alleged against the BTX Board and the Executive Committee. Finally, the complaint generally alleges federal proxy violations of § 14(a) of the Securities Exchange Act of 1934 ("the SEC Act").
II.
DISCUSSION
A.
The question whether a party has standing to prosecute a claim concerns the power of federal courts to hear and decide cases. Standing focuses on the party seeking to get his complaint before the federal court and not on the issues he wishes to have adjudicated. Flast v. Cohen, 392 U.S. 83, 99, 88 S. Ct. 1942, 1952, 20 L. Ed. 2d 947 (1968). When the issue of a plaintiff's standing is raised,[3] the relevant inquiry is whether, assuming justiciability of the claim, the plaintiff has shown an injury to himself that is likely to be redressed by a favorable decision. To satisfy the constitutional requirement, the plaintiff who seeks to invoke judicial power must stand to profit in some personal interest. Absent a showing of personal injury, exercise of power by a federal court would be gratuitous and thus inconsistent with constitutional limitations. Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38-39, 96 S. Ct. 1917, 1924-25, 48 L. Ed. 2d 450 (1976).
Standing analysis is bipartite, involving both constitutional and prudential considerations. Constitutional standing analysis inquires whether a court possesses the jurisdictional power to hear a case; prudential analysis focuses upon a court's administrative discretion to hear a case. Lewis v. Knutson, 699 F.2d 230, 236 (5th Cir.1983).
The constitutional standing rules seek to ensure that a concrete Article III "case or controversy" exists by focusing on a plaintiff's "harm." They ask whether a plaintiff has "in fact" suffered a redressable *372 injury as a result of the defendant's actions. The plaintiff must demonstrate that his injuries "`fairly can be traced to the challenged action of the defendant,' or put otherwise, that the exercise of the Court's remedial powers would redress the claimed injuries." Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 74, 98 S. Ct. 2620, 2630-31, 57 L. Ed. 2d 595 (1978) (citations omitted).[4]
Even where constitutional standing is established the court must also satisfy itself that prudential considerations warrant hearing the case. See, e.g., Valley Forge, 454 U.S. at 474-75, 102 S.Ct. at 759-60; Warth, 422 U.S. at 500-01, 95 S.Ct. at 2205-07. In particular, the complaining party must demonstrate that his "injury" is of a sort against which the law seeks to protect him. See Valley Forge, 454 U.S. at 474-75, 102 S.Ct. at 759-60. As applicable to the present case, if investors are to fall within the zone of protection of a statute, it must be specifically found that they are intended beneficiaries of that particular statute. See, e.g., Moses v. Banco Mortgage Co., 778 F.2d 267, 272 (5th Cir. 1985).
B.
State Law Claims
Plaintiffs bring Delaware[5] common law claims for fraud and misrepresentation, breach of fiduciary duty, and negligence. The thrust of all these claims is corporate mismanagement by BTX. Defendants contend plaintiffs do not have standing to assert such claims because the claims belong to the corporation, BTX, and may only be asserted by a shareholder in a derivative action. The court agrees.
Delaware law and policy support the conclusion that plaintiffs' common law claims for damages must be pursued, if at all, on a derivative basis. Under Delaware law, issues of corporate management are committed to a corporation's board of directors. See, e.g., 8 Del.C. § 141(a) which provides, in pertinent part, that: "The business and affairs of every corporation ... shall be managed by or under the direction of a board of directors...." In Bokat v. Getty Oil Co., 262 A.2d 246, 249 (1970), plaintiff shareholder charged that Getty Oil had, among other things, forced its wholly-owned subsidiary to purchase oil from Getty at an inflated price. The court characterized this claim as one "seek[ing] money damages for improper management" and held that such claims belonged to the corporation and not to its minority stockholders:
When an injury to corporate stock falls equally upon all stockholders, then an individual stockholder may not recover for the injury to his stock alone, but must seek recovery derivatively in behalf of the corporation.
Id. The court concluded that "[m]ismanagement which depresses the value of stock is a wrong to the corporation; i.e., the stockholders collectively, to be enforced by a derivative action." Id. See also Crane Co. v. Harsco Corp., 511 F. Supp. 294, 304 (D.Del.1981); Elster v. American Airlines, Inc., 34 Del. Ch. 94, 98-99, 100 A.2d 219, 222 (1953).
Bokat reasons that claims of corporate mismanagement must be brought on a derivative basis because no shareholder suffers a harm independent of that visited upon the corporation and the other shareholders. Because each shareholder has been injured in proportion to his equity ownership, each will be made whole if the corporation obtains compensation or restitution from the wrongdoer. A contrary rule would authorize multitudinous litigation and ignore the corporate entity. Cowin, 741 F.2d at 414 (applying Delaware law). See also Gearhart Industries, Inc. v. Smith International, Inc., 741 F.2d 707, 721 (5th Cir.1984) (directors' duties of loyalty and care run to the corporation, not to *373 individual shareholders or even to a majority of the shareholders). Because the corporation and not the individual shareholder suffers the injury, when an officer, director, or controlling shareholder breaches a fiduciary duty to the corporation, the shareholder simply has no standing to bring a civil action at law against the faithless directors and managers. Lewis, 699 F.2d at 237-38 (applying Delaware law).
Delaware's declaration that an individual does not have standing to challenge corporate mismanagement may be avoided either (1) by the filing of a derivative action, which in this case would be pursuant to Rule 23.1, or (2) by the allegation of some special injury to the individual plaintiff shareholder. From the pleadings and the motion for class certification, it does not appear that plaintiffs in the present case desire to, or can, proceed with their complaints in a derivative action. Under Rule 23.1 a shareholder must either make a demand upon the corporate directors for action or plead with particularity the exceptional circumstances that demonstrate why a demand would be futile. Allison v. General Motors Corp., 604 F. Supp. 1106, 1112 (D.Del.1985). Rule 23.1 requires that a complaint in a derivative action "allege with particularity the efforts, if any, made by the plaintiff to obtain the action he desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for his failure to obtain the action or for not making the effort. Atkins v. Tony Lama Co., Inc., 624 F. Supp. 250, 255 (S.D.Ind.1985). In the present case none of the necessary Rule 23.1 allegations have been made. Plaintiffs likewise have not alleged any of the grounds which would allow them, under Delaware law, to proceed with a non-derivative action. See, e.g., Elster, 34 Del.Ch. at 99, 100 A.2d at 222; Condec Corp. v. Lunkenheimer Co., 43 Del. Ch. 353, 230 A.2d 769 (1967). Instead, plaintiffs allege only that their "special injury" is the violation of their voting rights under § 14(a). Because the court concludes below that plaintiffs lack standing to assert a § 14(a) claim, the court holds that such a claim cannot constitute the allegation of a "special injury" for purposes of demonstrating standing to assert Delaware common law claims.
Securities Act Claim
Applying the standing principles to plaintiffs' federal claim under § 14(a), the court must now determine whether plaintiffs have in fact alleged a real and immediate injury that is redressable by § 14(a), the constitutional standing limitation, and whether plaintiffs fall within the zone of interests protected by that section,[6] the prudential standing limitation.
Section 14(a) of the SEC Act, 15 U.S.C. § 78n(a), provides, in pertinent part:
It shall be unlawful for any person, by the use of the mails or by any means or instrumentality of interstate commerce ..., in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, to solicit ... any proxy or consent as authorization in respect of any security ... registered pursuant to section 781 of this title.
The pertinent SEC regulation appears to be 17 C.F.R. § 240.14a-9 (1980), which provides:
No solicitation subject to this regulation shall be made by means of any proxy statement ... which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading. *374 The determination whether plaintiffs have an injury which is redressable by § 14(a) or which falls within the zone of interests protected by § 14(a) is made by analyzing judicial decisions that have interpreted § 14(a).
Section 14(a) stems from a congressional belief that fair corporate suffrage is an important right that should attach to every equity security bought on a public exchange. Mills v. Electric Auto-Lite Company, 396 U.S. 375, 381, 90 S. Ct. 616, 620, 24 L. Ed. 2d 593 (1970). The provision was intended to promote the free exercise of the voting rights of stockholders by ensuring that proxies would be solicited with explanation to the stockholder of the real nature of the questions for which authority to cast his vote is sought. Id. The purpose of § 14(a) is to prohibit management from deceptively securing stockholder approval for transactions requiring such approval. See id. at 382, 90 S.Ct. at 620-21. Thus, the essential requirements of a § 14(a) claim are (1) an underlying transaction for which management sought stockholders' approval or disapproval by solicitation of proxies and (2) an injury caused by the approval or disapproval of the transaction. Any misrepresentations in or omissions from the proxy solicitation must concern this underlying transaction. The injury complained of must have resulted from a corporate transaction which was authorized as a result of the false or misleading proxy solicitations. Abbey v. Control Data Corp., 603 F.2d 724, 732 (8th Cir.1979). See also Ash v. GAF Corp., 723 F.2d 1090, 1094 (3d Cir.1983) (complainant must show harm suffered from infringement of corporate suffrage rights or from corporate transaction approved because of inadequate disclosure in proxy solicitation). Moreover, the scope of the federal securities laws is limited: they address those injuries arising from transactional fraud, as opposed to the results of underlying corporate mismanagement. See generally Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 479, 97 S. Ct. 1292, 1304, 51 L. Ed. 2d 480 (1977).
In this case the transactions complained of were not authorized and did not occur as a result of the solicitation of proxies. The transactions complained of were never the subject of a proxy solicitation. If the transaction complained of did not occur because of or as a result of the proxy solicitation then any misrepresentations or omissions in the proxy itself are not the legal cause of pecuniary loss to the plaintiffs. See Gaines v. Haughton, 645 F.2d 761, 775 (9th Cir.1981). A complaint is simply not within the reach of § 14(a) if the transaction complained of occurred without shareholder approval or disapproval. Id.
The court concludes that § 14(a) was intended to benefit only those individuals (1) whose proxies were actually solicited to approve or disapprove a particular transaction, and (2) which transaction, which was approved or disapproved by the proxy vote, caused the complained-of injury. Section 14(a) was not intended to protect a shareholder complaining of a corporate action which was not the subject of a proxy solicitation. Such a shareholder has suffered no injury that is "redressable," is not within the zone of interests protected by § 14(a), and has no standing to assert a § 14(a) claim.
III.
Because plaintiffs lack standing, the court does not reach the class certification question and, instead, dismisses this civil action. See Brown, 650 F.2d at 771.
SO ORDERED.
NOTES
[1] No evidentiary hearing was held on the class certification motion based on the parties' representations that no hearing was necessary. See February 10, 1987 order. Cf. Merrill v. Southern Methodist University, 806 F.2d 600, 608 (5th Cir.1986).
[2] Because BTX is incorporated in Delaware, the substantive law of that state governs disposition of plaintiffs' common law claims. Cowin v. Bresler, 741 F.2d 410, 414 n. 4 (5th Cir.1984).
[3] The issue of standing must be overcome before the court considers the typicality of claims or commonality of issues required for procedural reasons by Rule 23. Brown v. Sibley, 650 F.2d 760, 771 (5th Cir.1981). Rule 23 does not alter the requirement that the court first consider the issue of jurisdiction because a change in the definition of matters in controversy would clearly conflict with the command of Rule 82 that the rules of civil procedure not be construed to extend or limit the jurisdiction of the United States District Court. Snyder v. Harris, 394 U.S. 332, 337, 89 S. Ct. 1053, 1057, 22 L. Ed. 2d 319 (1969).
Inclusion of class action allegations in a complaint does not relieve a plaintiff of himself meeting the requirements for constitutional standing, even if the persons described in the class definition would have standing themselves to sue. If the plaintiff has no standing individually, no case or controversy arises. Brown, 650 F.2d at 771. A person simply cannot represent a class of which he is not a member; he cannot predicate standing on injury which he does not share. Standing cannot be acquired through the back door of a class action. Id. If the court concludes that the proposed class representatives lack individual standing, the proper procedure is to dismiss the complaint, rather than to deny the class for inadequate representation or to allow other class representatives to step forward. Id. Dismissal on standing grounds is to take place before class certification issues are ever reached. Id.
[4] This language imposes three fairly strict requirements, namely: (1) an injury; (2) a causal connection between the injury and the complained-of acts; and (3) "redressability." See, e.g., Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472-74, 102 S. Ct. 752, 758-60, 70 L. Ed. 2d 700 (1982).
[5] See note 2, supra.
[6] In this case it appears that there the prudential and constitutional requirements overlap, for if plaintiffs have no injury that is redressable it may be because they are not within the zone of interests to be protected or regulated by § 14(a). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1673100/ | 245 F. Supp. 755 (1965)
UNITED STATES of America, Plaintiff,
v.
WEST WILLOW APARTMENTS, INC., Defendant.
Civ. A. No. 21114.
United States District Court E. D. Michigan, S. D.
February 18, 1965.
*756 Lawrence Gubow, U. S. Atty., Robert H. Pytell, Asst. U. S. Atty., Detroit, Mich., for plaintiff.
Marvin W. Reider, Detroit, Mich., for defendant.
Ronald L. Greenberg, Detroit, Mich., for Frank W. Lynch (purchaser on foreclosure sale).
MACHROWICZ, District Judge.
The complaint of the United States filed in this cause prays, among other things, for an order and decree foreclosing a mortgage on real property and for a deficiency judgment. The loan which the mortgage secured was insured by the Federal Housing Commissioner pursuant to provisions of the National Housing Act, as amended, Title 12 U.S.C. § 1743, and the Administrative Rules and Regulations thereunder. The mortgagee assigned its interest in the mortgage to certain agencies of the State of Michigan which, in turn, assigned the mortgage to the Federal Housing Commissioner, his successors and assigns.
A foreclosure decree was filed and entered on September 24, 1963. This decree did not provide for an equity of redemption.
A foreclosure sale was held on August 13, 1964 at which time terms and conditions affecting the sale were announced by an Assistant District Attorney. One of the announced terms and provisions was to the effect that the property was being sold subject to an equity of redemption of six (6) months, that the Receiver for the mortgagor (appointed in this proceeding) would retain possession for such period for the benefit of the defendant mortgagor and its creditor, Federal Housing Administration, and that the rents and profits for this period would be applied on any deficiency. On August 26, 1964 the decree of foreclosure previously entered in this cause was amended to include such equity of redemption for a period terminating six (6) months from and after August 13, 1964.
The purchaser at the mortgage foreclosure sale, Frank W. Lynch, in negotiating for financing the purchase, encountered difficulties in such negotiations, and it was at his suggestion that the decree was amended to include the provision for an equity of redemption to meet requirements of insurers of the title of the purchaser. Apparently one of such requirements was inclusion of a provision for an equity of redemption in the decree of foreclosure, as required by state law.
*757 An order of confirmation of the mortgage foreclosure sale was entered on October 12, 1964.
The purchaser at the sale moved, on January 8, 1965, to amend the decree, as amended, so as to eliminate the provision for the equity of redemption and so that the decree stands as originally entered on September 24, 1963. It is the purchaser's contention that federal statutes do not provide for an equity of redemption, that state statutes which require provision for such an equity of redemption are inapplicable and that the amended decree including provision for an equity of redemption and right to redeem is improper and contrary to law.
Proceedings for relief from a judgment or order of this Court are controlled by Rule 60 of the Federal Rules of Civil Procedure. By virtue of Section (a) of such rule clerical mistakes in judgments or orders of this court may be corrected by the Court or on motion of any party. Section (b) provides, in effect, that a court may relieve a party or his legal representative from a final judgment or order for reasons therein enumerated. Although the language of this rule is clear, precise and exact, it has been subjected to interpretation in suits filed in federal courts. In Screven et al. v. United States, 5 Cir., 207 F.2d 740 a motion to set aside a judgment in condemnation proceedings was denied for the reason that the movants were not parties to the condemnation proceedings. See also United States v. 140.80 Acres of Land, etc., D.C., 32 F.R.D. 11, a condemnation proceeding in which the court held that procedures under rule providing for motion for relief to party or his legal representative from a final judgment, order or proceeding are not available to one who is not party to the suit in which the judgment was rendered.
It is the opinion of this Court that the rule and cases interpreting it, cited above, do not afford the relief sought to the movant. It has considered, however, and will discuss and determine other issues raised by the motion and by the Government in opposition to the motion, one of which is the claim of the Government that even if remedies sought were available to movant, he would be barred by laches from seeking remedies. This objection is well taken. Movant not only knew of the provisions of the amended decree but the amendment was effected upon his own suggestion. His motion to again amend was not filed until almost five (5) months elapsed following entry of the amended decree. See Goldfine v. United States, 5 Cir., 326 F.2d 456 in which the Court held that a party must act as diligently after learning of his equitable rights as he would have had to act to claim such rights which, through his own neglect, he lost. In Helene Curtis Industries v. Dinerstein, D.C., 17 F.R.D. 223, a defendant whose attorney entered into a stipulation and consent to judgment, who was served with a copy of the final judgment three months later, but who waited until eight months later before moving to vacate the stipulation and judgment, was guilty of laches and unreasonable delay. Movant has not explained the long delay in filing the motion to amend. Under the circumstances of this case, even if the remedy movant seeks were available to him, denial of it would be warranted on the ground of laches.
We now reach movant's claim that he is entitled to the relief prayed for because of illegality of the amended decree under federal legislation which was the basis for grant of the original mortgage loan. It is argued that creation of a redemptive period as part of a federal law would place a limitation on the scope of the Federal Housing Administration program not placed there by Congress and would contravene the congressional scheme, and that the Court should not now fashion a rule permitting the several states to determine rights of redemption when no such right now exists under federal law.
True, the Federal Housing Act makes no provision for an equity of redemption upon foreclosure of a mortgage. Thus a mortgagor cannot assert a right of redemption when no such right is created *758 by federal law. It does not follow, however, that the Government is prohibited from granting a right of redemption, as a matter of grace, or that grant of such a right in a foreclosure decree results in illegality of the decree. No authorities have been cited in support of such a claimed prohibition and illegality. It also does not follow that in acceding to the Government's request, that in this instance a right of redemption be included in a decree of foreclosure, this court fashioned a rule permitting states to determine rights of redemption. The Court is in accord with the claim of movant that the federal law determines matters of this nature, not state law, and that state statutes which require that a mortgagor be afforded an opportunity to redeem from a mortgage foreclosure sale do not bind this Court in mortgage foreclosure proceedings instituted under federal law. It is not the claim of the Government that the motion should be denied and the provision for an equity of redemption should remain in the decree because state law requires inclusion of it in a foreclosure decree. There being no prohibition in federal law against grant of an equity of redemption by the Government, as a matter of grace, the Government applied to this Court, in the exercise of its inherent equitable powers, to provide for a privilege of redemption to the mortgagor even though the mortgagor could not have demanded opportunity to redeem as a right, since the federal law does not provide such right. It is immaterial that the grant of such opportunity is identical to that which state law gives to a mortgagor as a matter of right.
Inclusion of the provision for an equity of redemption does not run afoul of federal policy under the Federal Housing Act. One of the purposes of that Act is to afford to the Federal Housing Administration the finest protection of its security interest. United States v. View Crest Garden Apts., Inc., 9 Cir., 268 F.2d 380, 383. That security would not be impaired, but enhanced, in the particular circumstances of this case, by grant of an equity of redemption with the corresponding right to the Government to reap the income from the property, during such period of redemption should the privilege of redemption be not exercised, thus producing additional revenue to the Government to be applied on the deficiency judgment entered in this cause.
In fact, this motion was heard and argued after the period of redemption had already expired. The obvious purpose of the motion is to divert the income from the property, during the redemption period, from the Government to the purchaser of the property at the foreclosure sale. Surely, movant stands in a very weak position when it argues that the decree, if amended in the respects stated in the motion, would advance the policy of the Government and carry out the intent of Congress in promulgating the Federal Housing Act.
The amount of the deficiency judgment is One Million Thirty-six Thousand Four Hundred Twelve and 37/100 Dollars, ($1,036,412.37). The purchase price paid by movant upon the sale on foreclosure was Six Hundred Ten Thousand Five Hundred Seventy-six and 30/100 Dollars, ($610,576.30) and financing of this price was made possible by the inclusion, by amendment, of the provision for an equity of redemption in the decree of foreclosure. Movant was not only informed of the conditions of sale, but was instrumental in creating the conditions of sale. He is entitled to nothing more.
For reasons herein stated the motion to amend the decree of foreclosure is denied and an order to that effect will be entered simultaneously with this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1715270/ | 518 S.W.2d 540 (1975)
Michael R. BURCH et ux., Petitioners,
v.
CITY OF SAN ANTONIO et al., Respondents.
No. B-4676.
Supreme Court of Texas.
January 29, 1975.
Rehearing Denied March 5, 1975.
*541 William H. Robison, San Antonio, Hart, Keahey & Hart, James P. Hart, Austin, for petitioners.
Crawford R. Reeder, City Atty., Sawtelle, Goode, Davidson & Troilo, John W. Davidson and Marquis E. Whittington, San Antonio, for respondents.
DENTON, Justice.
Plaintiffs, Michael R. Burch and his wife, appealed from an order of a district court in Bexar County denying their application for a temporary injunction to restrain further proceedings in a condemnation suit which has been brought by the City of San Antonio, acting through its Water Works Board of Trustees, that sought to obtain the fee simple title to land owned by the plaintiffs. The court of civil appeals affirmed the district court's action and thereby recognized the authority of the Board to exercise the power of eminent domain for the purposes of making extensions, improvements and additions to the city water system. 508 S.W.2d 653. We reverse and remand.
The San Antonio Water Supply Company, a private corporation, was purchased by the City of San Antonio in 1925 under the provisions of Art. 1109 (1963), Tex. Rev.Civ.Stat.Ann.[1] The legislature had further provided that the management and control of such a water supply system was to be placed in the hands of the city council of the city, or alternatively, if the city *542 council and the voters deemed it advisable, the management and control could be delegated to a board of trustees when bonds and notes used to finance the purchase or operation of the water system remained unpaid. Art. 1109a, § 4. The City, operating under this latter statute, decided that its water system would be governed under the alternate method and entered into a trust agreement, placing into the hands of its Water Works Board of Trustees the operation of the system.
In 1957, the City issued some $2 million in water revenue refunding bonds which were secured by a pledge of the system's revenues. Ordinance No. 24819, which authorized the issuance of the refunding bonds, again placed the management and control of the system in a board of trustees for so long as any bonds remained outstanding. Under the provisions of the ordinance the Board was given:
absolute and complete authority and power with reference to the control, management and operation of the System and the expenditure and application of the revenues of the System ... In connection with the management and operation of the System and the expenditure and application of the revenues therefrom, the Board of Trustees shall be vested with all of the powers of the City with respect thereto, including all powers necessary or appropriate for the performance of all the covenants, undertakings and agreements of the City contained in this Ordinance ... with the exception of fixing rates and charges for service ... and, to the extent authorized by law and by this Ordinance, shall have full authority with reference to making of extensions, improvements and additions to the System and the acquiring by purchase or condemnation of properties of every kind in connection therewith.
The City has from time to time issued additional revenue bonds including those that would finance the acquisition of the Burch's property, however, all are subject to the above grant of authority in that the pertinent provisions of Ordinance No. 24819 have been adopted by reference in the subsequent ordinances issuing revenue bonds.
The plaintiffs contend that this attempted delegation of the power of eminent domain by the city council was in contravention to Art. 1109, § 5 and Art. 1109b.
These statutes, dealing with the powers of eminent domain conferred by the legislature upon incorporated cities and towns who own their water supply system, are construed by the plaintiffs and the court of civil appeals opinion below as investing these powers in the legislative or governing body of the cities and not to subordinate municipal boards or officials. Since it is undisputed that the Board has been the only agency of the City that has determined the necessity for the taking of a fee simple interest in the plaintiffs' land, thereafter authorizing the institution of condemnation proceedings, the plaintiffs contend that such proceedings are void because the City's legislative body, the city council, should have made the pertinent determinations.
We agree that the terms "governing body" or "governing authority" as spoken to in the statutes cited by plaintiffs refer to that body which exercises the legislative powers within the City. Under Art. 23, the term "governing body" is defined as
the governing or legislative body of any incorporated town, city or village, whether known as a council, commission, board of commissions, common council, board of aldermen, city council, or by whatever name such bodies may be known or designated.
Therefore, this body, commonly referred to as the "city council" would be the particular agency within the city government to *543 have initiated the action on the condemnation of the Burch's property.
Notwithstanding the contention by plaintiffs that the power of eminent domain has been vested only with the city council by virtue of the above mentioned statutes, the City argues that article 1109a, which allows cities to place the management and control of encumbered water systems in a board of trustees, by necessary implication authorized the city council to delegate the power of eminent domain to the Board. The City therefore contends that Ordinance No. 24819, which sought to effect such a delegation, is not in contravention to any statute.
A reading of article 1109a, section 4 which is entitled "Management During Encumbrance" discloses that the organization and duties of the board of trustees may be specified in the contract of encumbrance along with a few examples of such duties being cited in the act. There is no mention of conferring the power of eminent domain upon the board of trustees when a city council and voters choose to operate the city water system through such an entity. The City here argues, however, that all powers necessary or desirable for control and management of the water system were spoken to in article 1109a and that the manifest purpose of the act was to provide for the removal of the operation of the water system entirely from the influence and control of the city government and to free it from political control or manipulation.
At this juncture it should be noted that the citizens of San Antonio have elected to govern themselves under the provisions of the Home Rule Amendment to the Texas Constitution, Article XI, Section 5, Vernon's Ann.St. A city which operates under the Home Rule Amendment is empowered to adopt or amend its charter in any manner in which it may desire, consistent and in accordance with the state constitution and the general laws of this State. Forwood v. City of Taylor, 147 Tex. 161, 214 S.W.2d 282 (1948); Davis v. City of Taylor, 123 Tex. 39, 67 S.W.2d 1033 (1934); City of Denton v. Denton Home Ice Co., 119 Tex. 193, 27 S.W.2d 119 (1930); see Tex.Const. Art. XI, § 5; Art. 1165. As a home rule city then, San Antonio is not required to look to the legislature for a grant of power to act, but only to ascertain if the legislature has placed any limitations on the city's constitutional power. State ex rel. Rose v. City of La Porte, 386 S.W.2d 782 (Tex.1965); Forwood v. City of Taylor, supra; City of El Paso v. State ex rel. Town of Ascarate, 209 S.W.2d 989 (Tex.Civ.App.1947, writ ref'd); Yellow Cab Transit Co. v. Tuck, 115 S.W.2d 455 (Tex.Civ.App.1938, writ ref'd).
The pertinent inquiry therefore is whether the City of San Antonio, having all powers not denied to it by the Texas Constitution and the general laws of this State, has the power to delegate its constitutional grant of the power of eminent domain to the Water Works Board of Trustees. Determinative of this question will be an examination of several general laws enacted by the legislature directed towards implementation of the power of eminent domain by cities and towns within Texas.
Since the enabling act to the Home Rule Amendment, including article 1175, is a general law within the meaning of that amendment, city charter provisions and ordinances may not be inconsistent with the terms of the statute. Article 1175 provides under section 15 that home rule cities "have the power to appropriate private property for public purposes whenever the governing authorities shall deem it necessary...."[2] The statute goes on to state that "[t]he power of eminent domain *544 hereby conferred shall include the right of the governing authority, when so expressed to take the fee in the lands so condemned ...." In situations involving city-owned water works systems, there are two more instances of legislative action as regards the implementation of the power of eminent domain. Article 1109, section 5 states that
Any such city may acquire the fee simple title to any land or property when same is expressed in the resolution ordering said condemnation proceedings by the governing body.
Additionally, article 1109b, entitled "Eminent Domain" states that "Incorporated cities and towns shall have the power to appropriate private property for public purposes whenever the governing authorities shall deem it necessary". Through these statutes the legislature appears to have limited the constitutional grant to home rule cities of the power of eminent domain to instances where the "governing body" or the city council has itself acted to condemn private property for public purposes. In addition to the specific mention of requiring action by the city council, these statutes, as all statutes implementing the power of eminent domain, are to be strictly construed. 1 P. Nichols, Law of Eminent Domain § 3.213[3] (3d rev. ed. 1973). These statutes, therefore, require that we hold that the delegation of management and control of the water works system to the Board under article 1109a does not give the City authority to delegate the exercise of the power of eminent domain to the Water Works Board. The Board can surely offer able advice and counsel to the City on matters of this nature, as would a city engineer or member of a city planning board, but the specific steps to be taken when condemnation of private property is sought must be accomplished by the city council.
The City further contends that if Ordinance No. 24819 was ineffective because the delegation of the power of eminent domain therein was not authorized by article 1109a, the ordinance nevertheless is controlling here because any defects were cured by a subsequent validation statute Art. 1174a-8. This contention was the basis for the holding of the court of civil appeals which concluded that the Board was the appropriate body to make the final determination concerning the condemnation of the Burch's property. The language in article 1174a-8 that was relied upon by the lower court is found in section 3 of that act:
All governmental proceedings of home rule cities, save and except those relating to annexation of territory, are hereby ratified and confirmed and all actions of the governing bodies of home rule cities in calling and holding elections for bonds and in the authorization, issuance and delivery of bonds, warrants, scrip, and certificates of indebtedness or of assessment are hereby ratified and confirmed and said obligations shall have effect according to their purport and tenor.
It is well settled that the legislature has the power to enact curative or remedial legislation. Anderson County Road District No. 8 v. Pollard, 116 Tex. 547, 296 S.W. 1062 (1927). If a statute is curative or remedial in its nature the rule is generally applied that it be given the most comprehensive and liberal construction possible. City of Mason v. West Texas Utilities Co., 150 Tex. 18, 237 S.W.2d 273 (1951); 2 Sutherland Statutory Construction § 41.11 (4th ed. C. Sands 1973). This statute, however, deals with the ratification of elections for bonds and the authorization and issuance of the indebtedness and makes no reference whatsoever to the ratification and confirmation of the power of eminent domain in subordinate agencies of home rule cities. Such power must be conferred by the legislature, either expressly or by necessary implication, and will not be construed from doubtful inferences. *545 Coastal States Gas Producing Co. v. Pate, 158 Tex. 171, 309 S.W.2d 828 (1958). In construing statutes that delegate the power of eminent domain, the language used by the legislature may be accorded a full meaning so as to carry out the manifest purpose and intention of the statute, however, the application of the law will be restricted to only those cases clearly falling within its terms. Coastal States Gas Producing Co. v. Pate, supra. These rules of construction must also be considered in conjunction with the overriding policy that because the exercise of the power of eminent domain is in derogation of the rights of the citizen that statutes conferring such power are strictly construed in favor of the landowner and against those corporations and subdivisions of the State vested therewith. City of Houston v. Derby, 215 S.W.2d 690 (Tex.Civ.App.1948, writ ref'd); 3 Sutherland Statutory Construction § 65.02 (4th ed. C. Sands 1974); 26 Am.Jur.2d Eminent Domain § 18 (1966).
The delegation of the power of eminent domain by the City must be strictly controlled in view of its effect on the rights of the individual citizen. We therefore hold that home rule cities are not given the authority to delegate the power of eminent domain to subordinate agencies in view of the limitations of article 1175, section 15, and articles 1109 and 1109b. Additionally, the retroactive validating statute relied upon by the City does not touch upon the delegation of the power of eminent domain by the city council and we hold that no such authority is conferred thereby. Accordingly, the city council is the authority to exercise the power of eminent domain and must itself officially express the intention and necessity to condemn the land in question for the City's water system.
The judgments of the courts below are therefore reversed and the cause remanded to the trial court for further proceedings in accordance with this opinion.
NOTES
[1] All statutory references are to Vernon's Annotated Texas Civil Statutes.
[2] Emphasis added throughout. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1724012/ | 463 S.W.2d 232 (1971)
Espanola Lakey WHITFIELD et al., Appellants,
v.
KLEIN INDEPENDENT SCHOOL DISTRICT et al., Appellees.
No. 430.
Court of Civil Appeals of Texas, Houston (14th Dist.).
January 20, 1971.
Rehearing Denied February 10, 1971.
*233 Clarke Gable Ward, Houston, for appellants.
James S. Kelly, Richard G. Sedgeley, Knipp & Sedgeley, Houston, for appellees.
BARRON, Justice.
This suit was filed by Espanola Lakey Whitfield and other alleged owners of a tract of land in Harris County, Texas, against Klein Independent School District, R. E. Lyon and others for cancellation and rescission of deeds to the land above and alternatively, for damages for fraud in the acquisition of the land.
The trial court submitted special issues to a jury empaneled to hear the case, and the jury found:
(1) That before the execution of the deeds from the Lakey family to Klein Independent School District, R. E. Lyon, school superintendent, Howard Klein, school board attorney, and Mrs. Marjorie Chitwood, agent for the school board, each represented to the plaintiffs, the Lakey family, that tract number 5 (the involved land) would be condemned for school purposes if it were not voluntarily sold to the Klein Independent School District.
(2) That such representations above were not false.
(3) That at the time tract number 5 was conveyed by plaintiffs to Klein Independent School District, it was not the intent of the school district to use said land for school purposes. (Special issue No. 13).
(4) That thereafter the land was conveyed by the school district to R. E. Lyon for other than school purposes.
(5) That the land was not used for school purposes at any time after it was conveyed by plaintiffs to the school district.
(6) That the fair and reasonable cash market value per acre of the land at the time and under all of the conditions and circumstances when the deeds in question were executed by plaintiffs to the school district was $770.00 per acre.
Based upon the above jury verdict and the undisputed evidence the trial court rendered a take nothing judgment in favor of the school district, Lyon and the other parties defendant. Plaintiffs have duly perfected appeal to this Court from the judgment below.
The tract of land involved is 7.8 acres and is commonly known as tract 5 of the Benjamin Page Survey, Abstract No. 618, Harris County, Texas. The tract was acquired by ancestors of the present alleged *234 owners about 1900. The record shows that prior to the purchase of tract 5 by Klein Independent School District, defendant, Mrs. Marjorie Chitwood, had been empowered by the school district to acquire various tracts of land for the school district. On several occasions, she, along with Howard Klein, an attorney for the school district, stated to the plaintiffs that the land was needed for the purposes of construction of a school and related facilities and that unless plaintiffs sold the land, it would be condemned. After several months of negotiations with respect to the sale of the land the plaintiffs continued to refuse to sell. Thereafter, Mrs. Chitwood and Howard Klein, by letter and in person stated to the plaintiffs that unless they sold the land forthwith, it would be condemned and used for school purposes. A few months thereafter the plaintiffs conveyed their land to the school district, allegedly under the threat of condemnation. The consideration paid to plaintiffs for the land was approximately Six Thousand Sixty Dollars ($6,060.00).
The deed conveying the land of the plaintiffs to the defendant school district was in two parts, one deed being signed by some of the plaintiffs under date of September 8, 1962 and an additional deed being signed by the remaining owners about the month of March, 1963. On May 10, 1963 the property was conveyed by the school district to its superintendent, R. E. Lyon.
In 1960 the school board of Klein Independent School District made a decision to buy twelve adjacent tracts of land located within the district, upon which a new public high school, a football stadium and other buildings were to be constructed. The tracts are numbered numerically and consecutively from tract 1 at one end to tract 12 at the other end of the total area. Titles were not complete and were clouded on various tracts, including tract number 5, and the task of acquisition of the properties for school expansion was difficult and time-consuming. None of the tracts of land were acquired by means of condemnation proceedings, all tracts being acquired by deeds with the exception of tract 1, which was never acquired by the school district.
Klein Independent School District had raised $850,000.00 for school development and expansion. The costs involved exceeded the estimates of the school board. The amount of the contract for the building alone was $829,200.00, and the estimated cost of the land to be acquired under the original program was about $50,000.00. In addition, equipment had to be purchased such as furniture and related items, and the anticipated expenditures were required to be revised to eliminate some of the cost.
The school board originally instructed Mrs. Chitwood to purchase the designated 92 acres of land. The board later revised its plans because of the shortage of funds to require only 55 acres of land. Shortly after the conveyance of tracts 3 and 4 by the respective owners to the Klein Independent School District in August, 1962, these two tracts, being then in excess of the land required by the school district, were conveyed to Marjorie Chitwood who subsequently sold them to R. E. Lyon, the school superintendent, for his private use. Such conveyances were consummated prior to the conveyance of tract 5 to the Klein Independent School District by plaintiffs, which occurred in part on September 8, 1962. Thus, the school district was selling property as excessive acreage before it actually acquired the 7.8 acre tract number 5 owned by the plaintiffs. Tracts 6 through 12 acquired by the school district were eventually used for the construction of a football stadium, a school building and various auxiliary buildings and supplementary areas for the school. Lyon purchased 23 of the original 92 acres of land from Mrs. Chitwood and the school board, including tract 5 involved in this suit.
Contention is made by plaintiff-appellants that the jury's answers to the various special issues are conflicting, and that *235 they are insufficient to support a judgment. We overrule such contention. The three special issues inquiring whether representations were made to plaintiffs that unless the land was sold to the school board it would be condemned by the school district involved a state of facts which existed long prior to the actual conveyance referred to in special issue number 13, which inquired concerning the intent of the school district at the time of conveyance. The jury answered each special issue regarding the representations made to plaintiffs in favor of the defendant-appellees, to-wit: that such representations were not false prior to the execution of the Lakey deeds. Thus, the jury answered the fraud issues in favor of the defendants on the basis of sufficient evidence in the record. We hold that there is no fatal conflict and that the above answers do not conflict with the answer to special issue number 13. The evidence clearly supports the jury's answers to the special issues inquiring whether such representations were false. At the time the representations were made, the school board was in the process of acquiring the land which it thought was necessary, and at that time condemnation would have been proper and authorized.
No recovery can be obtained by plaintiffs on their theory of damages for fraud. The jury found the cash market value of the land to be $770.00 per acre at all material times here involved. Plaintiffs were paid substantially that sum of money per acre when the land was purchased. In an action for rescission of a contract on the ground of fraud, the amount of damage is immaterial, provided it is substantial. Here the damage, if any, is insubstantial. See Dowlin v. Boyd, 291 S.W. 1095, 1098, (Tex.Com.App.1927); Featherlax Corporation v. Chandler, 412 S.W.2d 783, 789, (Tex.Civ.App.1966), writ ref., n. r.e.
Were it not for the reasons stated below, we might be inclined to reverse this case, because the jury found on sufficient evidence that at the time the land was conveyed by plaintiffs to Klein Independent School District, it was not the intent of the school district to use said land for school purposes. A taking of property for private use under the guise of a public use may violate due process and may constitute a legal fraud upon property owners, and this is true though there be no fraudulent intent. See Tod v. Massey, 30 S.W.2d 532, (Tex. Civ.App.1930), no writ; City of Wichita Falls v. Thompson, 431 S.W.2d 909, 911, (Tex.Civ.App.1968), writ ref., n.r.e.
The record shows, however, that the plaintiffs, the Lakeys, did not restore or offer to restore the consideration received by them for the deed to the school district, the sum of approximately $6,060.00. We have been unable to find any reference to such a tender or offer of tender by plaintiffs and this record stands with no refutation of an absence of tender of the purchase price or any part thereof. The general equitable rule is that a plaintiff in a suit for the rescission or cancellation of a contract or deed to which he is a party must return, or offer to return, any consideration which he has received under the contract. We are unable to find any exception to that rule in the record. See Casualty Reciprocal Exchange v. Bryan, 101 S.W.2d 895, (Tex.Civ.App.1937), no writ; Texas Employers Ins. Ass'n v. Kennedy, 135 Tex. 486, 143 S.W.2d 583, (1940), op. adopted; City of New Braunfels v. City of San Antonio, 212 S.W.2d 817, (Tex.Civ.App.1948), writ ref., n.r.e.; 10 Tex.Jur.2d, Sec. 45, pp. 372-376. We are therefore required to affirm the judgment of the trial court.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1762129/ | 812 F. Supp. 674 (1993)
UNITED STATES of America
v.
SUCCESSION OF James Mahlon SIDDON and succession of Joan (NMN) Lattishaw Siddon.
Civ. A. No. 92-1173.
United States District Court, W.D. Louisiana, Alexandria Division.
February 11, 1993.
Robert A. Thrall, Asst. U.S. Atty., Shreveport, LA, for plaintiff.
Johnny R. Boothe, Samuel T. Singer, Winnsboro, LA, James J. Brady, Gravel, Brady & Berrigan, Alexandria, LA, for defendants.
LITTLE, District Judge.
RULING
Plaintiff, the United States of America on behalf of Farmers Home Administration ("FmHA"), brings this suit against defendants the Succession of James Mahlon Siddon and the Succession Joanne Lattishaw Siddon seeking in rem judgment on two promissory notes signed by the defendants and seeking to foreclose on the mortgage securing payment of the notes. On 16 April 1981, the James Mahlon Siddon and Joanne Lattishaw Siddon executed and delivered to FmHA two promissory notes: one in the amount of $20,210 bearing interest at 5% per year and payable in yearly installments of $1,622 each from 1 January 1982 until 16 April 2001, when the unpaid balance would be due ("Note 1"), and another in the amount of $97,300 bearing interest at 12.25% per year and payable in annual installments of $13,232 each from 1 January 1982 until 16 April 2001 when the unpaid balance would be due ("Note 2"). Also on 16 April 1981, the Siddons executed a mortgage as security for both Notes 1 and 2. On 20 April 1981, the Siddons recorded the mortgage in the mortgage records of Franklin Parish. FmHA remains the owner and holder of the mortgage secured notes. The Siddons never made payment on the notes. Mrs. Siddon died on 11 January 1982. The FmHA sent a notice of acceleration for Notes 1 and 2 addressed to the Siddons on 27 March 1987. Mr. Siddon died on 27 October 1987. On 11 December 1987, FmHA sent a notice of acceleration on the notes to the Siddon's son and putative heir, James Russell Siddon. The United *675 States brought this mortgage foreclosure suit on 22 June 1992. This court appointed a curator to represent the successions on 6 July 1992, but on 17 November 1992, James Russell Siddon was substituted as administrator of his parents' estates. The defendants have not cured the default on either of the notes. Note 1 is past due in the amount of $20,210, plus accrued interest as of 11 September 1992 in the amount of $11,525.24 and additional interest accruing thereafter at an annual rate of 5%. Note 2 is past due in the amount of $97,300, plus accrued interest as of 11 September 1992 in the amount of $135,944.76 and additional interest accruing thereafter at an annual rate of 12.25%.
Before the court is the plaintiff's motion for summary judgment.
Summary judgment will be granted only if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. In our analysis, we view the facts and inferences from the evidence in the light most favorable to the nonmoving party. Lavespere v. Niagara Machine & Tool Works, Inc., 910 F.2d 167, 178 (5th Cir.), reh'g denied, 920 F.2d 259 (5th Cir.1990). Before we can find that no genuine issues of material fact exist, the court must be satisfied that no reasonable trier of fact could have found for the nonmoving party. Id. The nonmoving party may not depend solely on denials contained in the pleadings, but must submit specific facts showing that there is a genuine issue for trial. Fed. R.Civ.P. 56(e); see also Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), reh'g denied, 961 F.2d 215 (5th Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 82, 121 L. Ed. 2d 46 (1992). Mere conclusory rebuttals by the nonmoving party will not defeat a motion for summary judgment. Topalian, 954 F.2d at 1131.
As the Fifth Circuit has noted, "suits on promissory notes provide fit grist for the summary judgment mill." Federal Deposit Ins. Corp. v. Cardinal Oil Well Servicing Co., 837 F.2d 1369, 1371 (5th Cir.1988); see also Topalian v. Ehrman, 954 F.2d 1125, 1137 (5th Cir.1992); Colony Creek, Ltd. v. Resolution Trust Corp., 941 F.2d 1323, 1325 (5th Cir.) ("because of the relative simplicity of the issues involved, suits to enforce promissory notes `are among the most suitable classes of cases for summary judgment.'"), reh'g denied (5th Cir.1991); Lloyd v. Lawrence, 472 F.2d 313, 316 (5th Cir.1973).
A valid cause of action on a promissory note is asserted when the plaintiff alleges that it is the holder and owner of the note and that the note is in default. See American Bank v. Saxena, 553 So. 2d 836, 842 (La.1989); Gravois v. Helicopter Charter, Ltd., 416 So. 2d 609 (La.Ct.App. 4th Cir.1982). "When signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense." La.Rev.Stat.Ann. § 10:3-307(2) (West 1983). "Unless specifically denied in the pleadings each signature on an instrument is admitted." La.Rev.Stat.Ann. § 10:3-307(1). The plaintiff has produced the notes, and the defendants in their answer make only general denials, not a specific denial sufficient to challenge the genuineness of their signatures. The mortgages were executed by authentic act and thus are self proving. La.Civ.Code Ann. art. 1835 (West 1987). Plaintiff has therefore established the elements of its claim for judgment on the notes and mortgages.
The curator in his answer generally denied all plaintiff's allegations and asserted two affirmative defenses: failure to state a cause of action and prescription. The first is clearly meritless. The plaintiff has clearly alleged and established all elements necessary to recovering an in rem judgment.
As for the claim of prescription, the administrator argues that the United States' action to foreclose on the mortgages is time-barred under 28 U.S.C. § 2415(a). Under 28 U.S.C. § 2415(a), "every action for money damages" brought by the United States is subject to a statute of limitations *676 period of six years from the date that the cause of action arose. The administrator argues that the action to recover on the underlying notes has prescribed under § 2415(a) and thus the action to foreclose on the mortgages, because of its accessorial nature, must fall as well. La.Civ.Code Ann. art. 3411(3) (West Supp.1992). The plaintiff counters that § 2415(a) does not apply to foreclosure actions, especially when read in light of 28 U.S.C. § 2415(c), which provides that nothing in § 2415(a) shall be construed to limit the United States' time for bringing an action to establish title to or the right to possess real or personal property. The district courts that have confronted the issue have held that § 2415(a) does not apply to foreclosure actions. See Cummings v. United States Farmers Home Admin., No. 92-CV-1571-T (N.D.Tex. Dec. 21, 1992); Westnau Land Corp. v. United States Small Business Admin., 785 F. Supp. 41, 43-44 (E.D.N.Y. 1992); United States v. Freidus, 769 F. Supp. 1266, 1273-74 (S.D.N.Y.1991); United States v. Copper, 709 F. Supp. 905, 908 (N.D.Iowa 1988); Curry v. United States Small Business Admin., 679 F. Supp. 966, 970 (N.D.Cal.1987); Gerrard v. United States Office of Educ., 656 F. Supp. 570, 574 (N.D.Cal.1987). Recently, the Tenth Circuit agreed. See United States v. Ward, 985 F.2d 500 (10th Cir. 1993). We join these courts and hold that the plaintiff's right to foreclose on the mortgage is not prescribed under § 2415(a).
Consequently, we find that the plaintiff is entitled to in rem judgment on the two promissory notes as a matter of law and is entitled to foreclose on the mortgage.
For these reasons, the plaintiff's motion for summary judgment is GRANTED. Counsel for the plaintiff shall prepare and submit to this court a proposed judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1499004/ | 498 S.W.2d 923 (1973)
James L. REID et al., Petitioners,
v.
EL PASO CONSTRUCTION COMPANY et al., Respondents.
No. B-3478.
Supreme Court of Texas.
April 11, 1973.
Rehearing Denied July 25, 1973.
*924 Mayfield, Broaddus & Perrenot, Francis C. Broaddus, Jr., and Ellis O. Mayfield, Grambling, Mounce, Deffebach, Sims, Hardie & Galatzan, William T. Kirk, El Paso, for petitioners.
Edwards, Belk, Hunter & Kerr, Frank H. Hunter, Peticolas, Luscombe, Stephens & Windle, W. C. Peticolas, Kemp, Smith, White, Duncan & Hammond, William B. Duncan, El Paso, for respondents.
POPE, Justice.
Writ of error was granted in this case because we held that tentative view that the court of civil appeals, instead of reversing the whole judgment of the trial court and remanding the whole cause, should have made final disposition as to some of the causes and parties and severed and remanded as to others. 480 S.W.2d 15. Our further study of the case convinces us that this should be the correct disposition of the appeal, which consists of three sets of parties with different causes of action involved in each set.
James L. Reid and E. H. Baeza instituted this action against El Paso Construction Company and Farah Manufacturing Co., Inc. We shall first discuss this part of the case. The plaintiffs alleged in one court that defendant El Paso Construction Company, hereinafter called El Paso, fraudulently concealed material facts concerning three tracts of land that El Paso sold to plaintiffs in 1965 and 1967. These three tracts were located on the south side of Interstate 10 in El Paso, Texas. The plaintiffs alleged that El Paso, before selling the tracts, filed a natural drainage ditch, installed drainage pipes connected to three large conduits under Interstate 10, and then covered over all the evidence of this altered condition of the natural drainage. Plaintiffs alleged that they learned of this unnatural condition only after heavy rains in July, 1968, caused flooding and serious damage to their property.
The trial court rendered judgment on a jury verdict for the plaintiffs, Reid and Baeza, for the sum of $42,978.40 against El Paso on their claim for damages by reason of El Paso's fraudulent concealment. El Paso appealed and preserved a number of points, but the court of civil appeals did not reach any of them. The court of civil appeals reversed the whole judgment of the trial court and remanded the cause to the trial court. In our opinion the court of civil appeals should have reversed the judgment of the trial court and rendered judgment that plaintiffs take nothing on their claim for the fraudulent concealment action against El Paso.
El Paso objected at the trial to plaintiffs' proof of profits which plaintiffs say they lost by reason of El Paso's fraudulent concealment of the facts about the underground drainage. In our opinion the proof of lost profits was too remote, uncertain and conjectural to support the judgment. The proof is that plaintiff Reid bought one vacant tract in 1965 and that Baeza, Inc., bought a second vacant tract later that same year. They built sixty apartment units on those two tracts. In October, 1967, Reid and Baeza, who were then operating as partners, bought the third tract which was vacant. Shortly after their purchase, the owners deeded all three tracts to Feinberg Realty Company. After the water *925 damage, Feinberg deeded the land back to the owners.
Reid and Baeza claimed that they lost the profits they would have earned in building thirty apartment units for their purchaser, Feinberg. There was no evidence that El Paso was aware of any negotiations about a collateral building agreement by which plaintiffs would build thirty apartment units on the vacant tract for Feinberg. Plaintiffs and Feinberg had orally arrived at the terms for such a construction agreement, but it had not yet been reduced to written form. While there is evidence that El Paso knew plaintiffs intended to sell all three tracts to Feinberg, there is no evidence that El Paso knew or had any reason to know about an agreement by which plaintiffs intended to or had a contract to erect apartment units on the vacant lot under a building contract with Feinberg. C. McCormick, Damages § 122, at 459, 460 (1935). We regard plaintiffs' proof of lost profits arising out of the unexecuted collateral contract to build the apartment units for their purchaser as remote, contingent and too uncertain. El Paso Development Company v. Ravel, 339 S.W.2d 360 (Tex.Civ.App.1960, writ ref'd n. r. e.); Parker v. Solis, 277 S.W. 714, 717 (Tex.Civ.App.1925, writ dism'd); 37 Am. Jur.2d Fraud and Deceit § 343 (1968); 37 C.J.S. Fraud § 141b (1943).
Plaintiffs also asserted an action against El Paso and Farah Manufacturing Co., Inc., for damages caused by unlawful diversion of water from its natural course in violation of article 7589a Vernon's Ann. Tex.Civ.St. The basis for the action against Farah was that in 1967 Farah had commenced the construction of a large plant located on property on the north side of Interstate 10, and directly across from plaintiff's property, and in doing so, leveled the ground covering several natural arroyos which served as drainage channels in such a way as to direct all of the flow of waters on the north of Interstate 10 through the conduits beneath Interstate 10. The basis for the action against El Paso was that it had violated article 7589a by attaching extension pipes to the conduits and providing a new and artificial drainway for flood waters without authorization from the State.
On this part of plaintiffs' action, the trial court rendered a joint and several judgment against El Paso and Farah in the sum of $17,500 for their violation of article 7589a in diverting the water from its natural course in such a manner as to damage the property of another. The jury made findings that both El Paso and Farah diverted water from its natural flow and refused to find, as urged by El Paso, that Farah's diversion was the sole proximate cause of the damage to plaintiffs' lot. The joint and several judgment therefore was a correct one unless there is merit in El Paso's other point that the court improperly admitted the deposition of George Kistenmacher in a related case in violation of Rule 213 Texas Rules of Civil Procedure. We find that the deposition testimony was largely repetitious of testimony given by Kistenmacher in the trial of this case and that the error was harmless. We accordingly conclude that the plaintiffs' joint and several judgment against El Paso and Farah should be affirmed.
Farah asserted a third-party action against Kistenmacher Engineering Company, Inc., and George Kistenmacher individually. Farah's third-party pleading first alleged, by way of defense to plaintiffs' and El Paso's actions against it, that the Kistenmachers were solely responsible for any damage suffered by plaintiffs. Farah alleged that the Kistenmachers negligently designed the drainage system. In 1959, El Paso had employed the Kistenmachers to design the system on the south side of Interstate 10. Farah also asserted an affirmative action against the Kistenmachers. Farah had employed the Kistenmachers to provide site studies for use in the construction of the Farah plant, and Farah alleged that they failed to advise it of the earlier faulty design on the south.
*926 The trial court sustained the Kistenmachers' plea that Farah's action was barred by limitations, and upon Farah's refusal to amend, the trial court dismissed Farah's third-party suit. Farah appealed the judgment as to Kistenmacher Engineering Company, Inc., but not as to George Kistenmacher individually. The court of civil appeals considered only this phase of this appeal, and upon concluding that the trial court erroneously sustained the plea of limitations, reversed the case as to all actions and all parties.
On motion for rehearing the court of civil appeals wrote that Farah should have been permitted to try its actions against Kistenmacher Engineering and if Farah had been successful in that action, plaintiffs Reid and Baeza would not have obtained a judgment against Farah, because their judgment would have been against Kistenmacher Engineering instead. That holding is an erroneous one. Reid and Baeza sued El Paso and Farah, but they asserted no action against Kistenmacher Engineering and did not name either Kistenmacher Engineering or George Kistenmacher as defendants. Moreover, the action which Reid and Baeza asserted against Farah was different from that asserted by Farah against Kistenmacher Engineering. Reid and Baeza's suit against Farah was for wrongful diversion of water. Farah's suit against Kistenmacher Engineering was for damages for negligent design of the engineering work done for El Paso on the south side of Interstate 10 in 1959 and for failure to inform Farah of the underground drainage system.
Farah defended against plaintiffs' suit by alleging that Kistenmacher's negligent design was the sole cause of the damages on the theory that a finding in support of that pleading would have defeated plaintiffs' right to a judgment against Farah. Since Farah did not request an issue on its pleaded defense to plaintiffs' action, it waived that defense. 3 R. McDonald, Texas Civil Practice § 12.32.2 (Rev. ed. 1970).
The suit by Reid and Baeza against El Paso and Farah has been fully tried as well as El Paso's unsuccessful cross-claim against Farah. The trial court's dismissal of Farah's action against Kistenmacher Engineering, for the reasons stated by the court of civil appeals was erroneous, but the trial of that action upon remand does not require the reversal of the whole judgment of the trial court. Dallas Railway & Terminal Co. v. Gossett, 156 Tex. 252, 294 S.W.2d 377 (1956); Rule 434, T.R.C.P.
We reverse that part of the judgment of the trial court which orders that plaintiffs recover against El Paso for lost profits, as well as the judgment of the court of civil appeals which ordered a remand of that part of the cause. We render judgment that plaintiffs take nothing on that part of their action against El Paso. We reverse that part of the judgment of the court of civil appeals which ordered a remand of plaintiffs' joint and several cause of action against El Paso and Farah, and we affirm the judgment of the trial court that plaintiffs recover against El Paso and Farah jointly and severally, the sum of $17,500. We affirm that part of the judgment of the court of civil appeals which reverses the trial court's order dismissing Farah's third-party action against Kistenmacher Engineering and which remands that action for trial. We sever Farah's third-party action from the other portions of this cause of action, and remand that severed cause of action to the trial court. Costs are adjudged equally against plaintiffs, El Paso, Farah, and Kistenmacher Engineering. | 01-03-2023 | 10-30-2013 |
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