url stringlengths 54 59 | text stringlengths 0 3.41M | downloaded_timestamp stringclasses 1 value | created_timestamp stringlengths 10 10 |
|---|---|---|---|
https://www.courtlistener.com/api/rest/v3/opinions/1431435/ | 484 F. Supp. 1072 (1980)
Robert WILKINSON et al.
v.
John ELLIS et al.
Civ. A. No. 77-869.
United States District Court, E. D. Pennsylvania.
January 21, 1980.
*1073 *1074 *1075 Jack Levine, Robert J. Matthews, David Kairys, Philadelphia, Pa., for plaintiffs.
Stephen T. Saltz, Asst. City Sol., Philadelphia, Pa., for the police and city defendants.
Michael F. Henry, Asst. Dist. Atty., Philadelphia, Pa., for defendant Fitzpatrick.
Donald E. Matusow, Philadelphia, Pa., for defendant Haines.
John Rogers Carroll, Philadelphia, Pa., for defendant Berman.
Dennis J. Cogan, Philadelphia, Pa., for defendant Harris.
MEMORANDUM OPINION AND ORDER
EDWARD R. BECKER, District Judge.
I. Preliminary Statement
This civil rights action arises out of the state investigation and prosecution that followed *1076 the October 5, 1975 firebombing of the home of Radames Santiago in the Feltonville section of Philadelphia which killed five persons. The lead plaintiff is Robert Wilkinson ("Wilkinson"), who was convicted in the Philadelphia Court of Common Pleas of five counts of murder in connection with the firebombing, but who was subsequently, after serving 439 days in prison, cleared of any involvement in the crime.[1] The other plaintiffs are Wilkinson's wife, Christine Wilkinson, and his son, Robert Wilkinson, Jr. Defendants, all of whom are alleged to have been involved in some phase of the investigation or prosecution, include a number of Philadelphia police officers,[2] supervisory personnel of the police department and the District Attorney's office,[3] and the City of Philadelphia itself.[4] Advancing federal and pendent state law claims, plaintiffs seek both compensatory and punitive damages.[5] Before us are several motions to dismiss plaintiffs' claims, raising a variety of legal issues. We herein address and dispose of all but one of the issues raised by these motions,[6] while reserving decision on the final point until a later time.[7] Before our legal discussion, it will be useful to outline briefly plaintiffs' allegations. The complaint, which chronicles the factual basis for the plaintiffs' claims in enormous detail, alleges the following facts.
On October 5, 1975, plaintiff Robert Wilkinson was taken into custody for questioning concerning the firebombing of the Santiago *1077 residence. He was subsequently charged with the crime on the basis of an eyewitness account by sixteen-year-old Nelson Garcia, who stated that he had seen Wilkinson throw the firebomb. During interrogation, Wilkinson was beaten, threatened, and coerced by police defendants, and an involuntary statement, later suppressed on the ground that plaintiff did not understand the Miranda warnings he was given, was forcibly extracted from him. In addition to assaulting Wilkinson, the police defendants are alleged to have threatened and physically coerced suspects and witnesses, including plaintiff Christine Wilkinson, into making false statements consistent with Garcia's version of the incident.
On October 5 and 6 and November 3, 1975, the defendant detectives received written statements to the effect that plaintiff Robert Wilkinson was not involved in the crime, but that one David McGinnis, in the presence of others, had thrown the bomb. This information was, however, never investigated and, although defendants Berman, Haines, and Ellis knew of the statements prior to trial, defense counsel was never informed of them. Nor was counsel informed that, on November 14, 1975, Nelson Garcia gave a statement to police which differed materially from his previous statements.
On the eve of plaintiff's trial, March 26, 1976, David McGinnis came forward to explain to defendants Berman, Ellis, Brennan, and Harris his involvement in the firebombing, exonerating Wilkinson. McGinnis' written statement, the complaint alleges, was not revealed to defense counsel until midway into the trial; not until even later was it disclosed that a tape-recording had existed of a portion of the interview with McGinnis, but that the tape had been destroyed by defendant Berman. During the trial, defendants Ellis, Haines, and Berman made false statements to the court concerning disclosure of exculpatory material to defense counsel.
On October 4, 1976, after their own investigation of the firebombing incident, federal authorities furnished defendants Haines and Ellis with the entire federal investigative file. Although this investigation exculpated Wilkinson, defendant Haines refused to comply with the federal request to seek plaintiff's release. Because of this inaction, federal indictments against McGinnis and another were pursued, resulting in convictions.[8] The testimony at the federal trial again exonerated Wilkinson.
Furthermore, in November, 1976, Nelson Garcia stated in a sworn deposition that he had not seen Wilkinson throw the firebomb and, on December 20, 1976, he formally recanted his state trial testimony before a state judge. At the conclusion of the hearing, Wilkinson was finally released from prison. Nonetheless, on March 3, 1977, defendants Haines and Fitzpatrick, again without disclosing to defense counsel exculpatory evidence in their possession, approved and announced a decision to retry Wilkinson, who immediately moved to dismiss the indictment. During the hearing on this motion, the complaint further alleges, defendants Ellis and Berman again perjured themselves concerning their conduct in the firebombing investigation. On March 10, 1977, the complaint in this action was filed. On June 2, 1977, the state court granted Wilkinson's motion to dismiss, holding that the prosecution was being maintained in bad faith without reasonable expectation of obtaining a supportable verdict.[9]
Thus, in summary, plaintiffs have alleged:
Starting in October, 1975, Defendants intentionally and maliciously engaged in a pattern and course of conduct that included their ignoring, secreting, and destroying evidence that Wilkinson had neither thrown the bomb nor been involved *1078 evidence that, viewed fairly, amounted to conclusive proof of Wilkinson's innocence. This pattern and course of conduct was intended by the defendants to justify their continued prosecution of Plaintiff Wilkinson and thereby avoid or soften exposure of the irresponsible and unlawful course of the investigation.
Starting in early October, 1975, the defendants, under color of the laws and authority of the Commonwealth of Pennsylvania, having first pursued an erroneous course in their investigation and utilized unlawful and brutal methods, proceeded to knowingly, intentionally, and maliciously deprive Plaintiff Robert Wilkinson of his liberty and other rights secured by the Constitution of the United States after there was no sufficient or believable cause that he was guilty in an apparent attempt to foreclose or minimize the repercussions of their irresponsible, illegal, and unjustifiable acts.
Complaint, ¶¶ 51 & 54.[10] We turn now to the issues raised by defendants' motions.
II. The Statute of Limitations Issues
Defendants contend that some or all of Wilkinson's federal and state law claims were time-barred when he filed his complaint on March 10, 1977.[11] We assess these contentions by first setting forth the general principles governing limitations in civil rights cases, and then by applying these principles to each of Wilkinson's claims.
There being no limitations period written into the Civil Rights Act, as a federal court sitting in Pennsylvania we must apply the Pennsylvania limitations period(s) for the tort or torts most analogous to the conduct alleged in the complaint. See Polite v. Diehl, 507 F.2d 119, 122 (3d Cir. 1974); Ammlung v. City of Chester, 494 F.2d 811 (3d Cir. 1974). Where the analogous state causes of action are "inextricably intertwined," all of the defendant's alleged conduct may be subsumed under one limitations period, see, e. g., Gagliardi v. Lynn, 446 Pa. 144, 285 A.2d 109 (1971), but where the analogous causes of action are "separable," different statutes of limitations may be applied. See, e. g., Polite v. Diehl, supra.
Wilkinson contends that the assault and battery, malicious prosecution, abuse of process, and intentional infliction of emotional distress causes of action alleged in his complaint are separable and thus governed by different statutes of limitations. He submits that the assault and battery and intentional infliction claims are governed by 12 P.S. § 34, which allows two years to bring personal injury actions; that the abuse of process claim is governed by 12 P.S. § 31, a two-year statute for other kinds of personal actions; and that the malicious prosecution claim is governed by the one-year period of 12 P.S. § 51. We agree with Wilkinson's analysis of these causes of action and the applicable limitations period for each,[12] and conclude that they are separable and not time-barred.[13]
*1079 Wilkinson's assault and battery claim accrued on October 5, 1975, when he was allegedly beaten by the police defendants sometime after his arrest. See complaint ¶ 23. Some of the defendants contend that Wilkinson's assault and battery claim is "inextricably intertwined" with his false arrest claim, and thus is subsumed under the one-year false arrest statutory period. However, this identical argument was rejected by the Third Circuit Court of Appeals in Polite v. Diehl, supra. The Polite Court, explaining Gagliardi v. Lynn, supra, the leading case on the scope of Pennsylvania's statute of limitations for false arrest actions, said that a "touching" committed in accomplishing a false arrest would be subsumed under the one-year provision but that any "touching" not so "inextricably intertwined" as, for example, an assault while the arrestee is being held at the police station, would be governed instead by the two-year personal injury limitations statute. Polite v. Diehl, supra, at 122-23. Here Wilkinson has alleged not a "touching" in the course of effecting an arrest, but a beating inflicted later during interrogation at the police station. Thus the two-year period of 12 P.S. § 34 applies, and Wilkinson's assault and battery claims were timely filed on March 10, 1977, less than two years after they accrued.
Wilkinson's cause of action for intentional infliction of emotional harm, a tort now clearly accepted under Pennsylvania law, see Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265 (3d Cir. 1979) (en banc), accrued on October 5, 1975, when, according to the allegations of the complaint, some of the police defendants beat and threatened him, told him, inter alia, that he would lose custody of Robert, Jr. unless he signed a statement implicating himself in the firebombing, and ultimately coerced an involuntary and untruthful confession from him. See complaint ¶¶ 23, 27, and 28. Defendants do not, and could not, seriously argue that these alleged activities are "inextricably intertwined" with the initial arrest. Because these allegations state a separable cause of action for injury to the person, they are governed by the two-year period of 12 P.S. § 34, and the claim was timely filed.
Wilkinson's complaint in effect states two separate claims for malicious prosecution, or prosecution without probable cause: one relating to the initial prosecution, and a second relating to the decision to reprosecute. The limitations period applicable to an action for malicious prosecution is 12 P.S. § 51, a one-year statute, but the cause of action does not accrue until there has been a disposition terminating the underlying criminal proceeding in such a manner that it cannot be revived. See Sicola v. First National Bank, 404 Pa. 18, 170 A.2d 584 (1961). The criminal proceedings against Wilkinson were not terminated until June 2, 1977, when Judge Marshall dismissed the indictments with prejudice; hence his malicious prosecution claims were timely filed.
Wilkinson's final state law claim is for abuse of process, which is the use of legal process against another primarily to accomplish a purpose for which it is not designed. See, e. g., Jennings v. Shuman, 567 F.2d 1213 (3d Cir. 1977). Wilkinson alleges that legal process was used against him, not for the permissible purposes of bringing a guilty person to justice or enforcing *1080 the law, but for the impermissible purposes of covering up or minimizing the repercussions of defendants' illegal conduct. The statute of limitations for abuse of process is the general trespass two-year statute of 12 P.S. § 31. See, e. g., Jennings v. Shuman, supra. The abuse of process action did not accrue until the relevant defendants became aware of events, including McGinnis' confession, which suggested Wilkinson's innocence. These events were all well within the two-year period.
Concluding as we do that Wilkinson's claims are separable and that none with the exception of his false arrest and false imprisonment claims is time-barred, see n. 13 supra, we reject defendants' statute of limitations contentions and decline to dismiss on those grounds.
III. Prosecutorial Immunity
A. General Principles
The motions to dismiss by assistant district attorney defendants Haines and Berman raise several difficult issues of the extent to which prosecutorial personnel are immune from civil suits for damages under § 1983.[14] The preeminent case on prosecutorial immunity is Imbler v. Pachtman, 424 U.S. 409, 96 S. Ct. 984, 47 L. Ed. 2d 128 (1976). Accordingly, we look to Imbler and to the Third Circuit's most recent exposition of Imbler, Forsyth v. Kleindienst, 599 F.2d 1203 (3d Cir. 1979), for guidance in resolving these issues.[15]
In Imbler the Supreme Court granted to a state prosecutor absolute immunity from a § 1983 suit which charged him with the knowing use of perjured testimony. The Third Circuit has characterized the Imbler holding as narrow, noting that the Court emphasized that the prosecutor's activities in Imbler "were intimately associated with the judicial phase of the criminal process," and therefore, were "functions to which the reasons for absolute immunity apply with full force." 424 U.S. at 430, 96 S.Ct. at 995. See Forsyth, supra, at 1213. Imbler left open the question whether a prosecutor should have absolute immunity for those aspects of his responsibility that cast him in the role of an administrator or investigative officer, rather than that of an advocate. In Forsyth the Third Circuit answered this question in the negative, holding that where the activities of a prosecutor depart from those which cast him in a quasi-judicial role, the protection of absolute immunity will not be available. 599 F.2d at 1214-15. For those non-advocatory functions, a prosecutor has qualified immunity only.[16]
The test we derive from Imbler and Forsyth for determining the scope of immunity to be afforded for particular prosecutorial activities is a functional one: there is absolute immunity for quasi-judicial functions, but only qualified immunity for administrative or investigative functions.[17] Plaintiffs have suggested several *1081 factors to consider in undertaking a functional analysis of particular prosecutorial activity: the physical and temporal relationship of the activity in question to the judicial process,[18] the degree to which the acts depend upon legal opinions and/or discretionary judgments,[19] and the extent to which the acts at issue are primarily concerned with the prosecutor's role as an advocate.[20] We find these factors to be useful and will apply them to the allegations of the complaint as an aid in determining the scope of the immunity appropriate to this case.
The two assistant district attorneys whose motions we now consider are Haines, the chief of homicide, and Berman, the prosecutor assigned to the Santiago firebombing case. Plaintiffs' allegations with respect to them may be summarized as follows: 1) Both Berman and Haines knew of and failed to prevent an ongoing pattern of police use of illegal investigative methods, and were present during or participated in some or all of the unlawful interrogations concerning the Santiago firebombing, ¶¶ 16 and 22; 2) Both Berman and Haines knowingly withheld exculpatory evidence from Wilkinson's lawyer, ¶¶ 35, 38, 40, 41, and 43; 3) Berman threw away a tape-recorded statement by David McGinnis (who was subsequently convicted of the firebombing, ¶ 48) that Wilkinson was not involved in the firebombing, ¶ 38; 4) Both Berman and Haines made false declarations in various court hearings regarding the existence of exculpatory evidence, ¶ 42; and 5) Both Berman and Haines acted in bad faith in continuing to prosecute Wilkinson without probable cause and in deciding to reprosecute him when he won a new trial, ¶¶ 49, 51, and 54.
Plaintiffs concede that their allegations concerning the withholding of exculpatory material, the decision to prosecute, and the decision to reprosecute Wilkinson come within the ambit of the absolute immunity delineated in Imbler. They contend, however, that there are three categories of prosecutorial activity alleged in the complaint that are nonadvocatory, and therefore protected only by qualified immunity: participation in and/or knowledge of illegal police activity; destruction of evidence; and giving false testimony concerning the existence of exculpatory evidence.[21] Employing the Imbler/Forsyth "functional approach," we turn now to a discussion of these three categories of alleged prosecutorial activity.
B. False Testimony Concerning the Existence of Exculpatory Evidence
Wilkinson attempts to distinguish between withholding exculpatory evidence from the defense on the one hand and falsely testifying in court proceedings as to the existence of such evidence on the other; he concedes absolute immunity for the former, but asks us to hold that the latter is subject only to qualified immunity. We believe this distinction to be untenable, and we decline to so hold.
Wilkinson relies heavily on Briggs v. Goodwin, 186 U.S.App.D.C. 179, 569 F.2d 10 (D.C.Cir.1977), cert. denied, 437 U.S. 904, 98 S. Ct. 3089, 57 L. Ed. 2d 1133 (1978), in which the court characterized as "investigative" the role of a Justice Department attorney who allegedly stated falsely, under oath, *1082 that none of a group of witnesses subpoenaed to appear before a grand jury, all ostensibly members of an antiwar group, were in reality government informants.[22] Having characterized the conduct at issue as "investigative," the Briggs majority affirmed the district court's order denying the prosecutor's motion to dismiss, holding that investigative activity, unlike quasi-judicial activity, is entitled to only qualified immunity.[23]
Emphasizing the Briggs court's statement that the prosecutor's alleged perjury "[bore] no relation whatever to the advocate's role as conceived by the Supreme Court in Imbler," 186 U.S.App.D.C. at 190, 569 F.2d at 21, Wilkinson reasons that the alleged perjury in the instant case is non-advocatory as well. The flaw in Wilkinson's reasoning is that Briggs did not hold that perjury qua perjury was non-advocatory.[24] Instead, it found that the prosecutor's allegedly false statement was made in an investigative capacity after focusing on considerations similar to those we adopted, at plaintiffs' suggestion, to aid our analysis of this issue. See notes 18-20 and accompanying text, supra.
Examining the false testimony alleged in this suit in light of those considerations, we are constrained to characterize it as quasi-judicial activity, and thus to hold that it is protected by absolute immunity. First, the statements to the court were closely related, both physically and temporally, to an ongoing criminal prosecution. Second, the determination whether or not evidence is "exculpatory" is a uniquely legal judgment. Finally, the conduct alleged is so closely connected with the whole range of evidentiary judgments made by a prosecutor in an advocatory role that it cannot be separately considered. In fact, to permit this suit would, as a practical matter, negate an immunity which plaintiffs concede, i. e., immunity for failing to turn over exculpatory evidence.
We would reject, as did the Briggs court, any claim that conduct was per se "intimately associated with the judicial process," see Imbler, supra, 424 U.S. at 430, 96 S.Ct. at 995, solely because it occurred in a court-room exchange. 186 U.S.App.D.C. at 192, 569 F.2d at 23. However, our decision that the alleged perjury in this suit was committed in the performance of the prosecutor's quasi-judicial function is not based on these grounds; rather, it is based on the kind of functional analysis we read Imbler and Forsyth to require.
C. Destruction of Evidence
Wilkinson urges that because the McGinnis tape was evidence gained by prosecutors in their investigative capacities, Berman's alleged destruction of the tape was an investigative act, protected by only qualified immunity. Berman, on the other *1083 hand, contends that throwing evidence away is functionally indistinguishable from refusing to furnish it to the defense or lying to the court about whether or not it exists. It was, he claims, a Brady judgment[25] (that McGinnis was lying and therefore his statement did not exculpate Wilkinson) performed in his quasi-judicial role, for which he is absolutely immune.[26]
We must confess that we have some difficulty in functionally categorizing the prosecutorial act of discarding a tape-recorded confession to a crime by one person on the eve of another's trial for that same crime. Because it does not fit neatly into any of the three categories quasi-judicial, investigative, or administrative suggested by Imbler and Forsyth, we approach the problem by examining Berman's alleged conduct in light of those features, previously enumerated, which generally characterize quasi-judicial activity, the category for which absolute immunity is available. See notes 18-20, supra, and accompanying text.
First, although the evidence was thrown away on the eve of trial, that action was not closely related to the judicial process. Indeed, when evidence is disposed of, it is kept from judicial scrutiny altogether. In terms of the extent to which the decision to throw away evidence involves the exercise of discretion, we cannot accept Berman's characterization of his act as a Brady judgment.[27] Prosecutors make Brady judgments when they decide whether to turn evidence over to the defense or when they respond to a court's question as to whether there is "exculpatory" evidence in their files. Imbler absolutely protects these prosecutorial acts by shielding prosecutors from suits alleging that their judgments were wrong, or even that they were wrongly motivated. But even if we were to accept Berman's representation that he made such a judgment with respect to the McGinnis tape, it would explain only why the tape was kept from the defense, not why it was destroyed. We view the distinction as critical and dispositive in Wilkinson's favor.
It can of course be argued and with considerable force that there is no conceptual difference between withholding and destroying evidence, and that we are really looking at a continuum on which various results flow from the same decision. On the other hand it can be argued, and indeed we think with greater force, that once the decision is made not to furnish evidence to the defense, no additional protectible prosecutorial discretion is involved in deciding to dispose of it, and similarly that, while deciding not to furnish the prosecution's evidence to the defense may be an act of advocacy, throwing that evidence away is not such an act.
In such a situation, the decisional process becomes one of judicial line-drawing, a difficult process, but one which can be aided by an examination of the policies underlying the question at issue. In the context of prosecutorial immunity, the most important policy consideration articulated by the Imbler Court concerns the danger that the exercise of prosecutorial discretion might be unduly influenced if civil suits were permitted. Specifically, the Court noted that while an executive may face angry citizens on either side of a contemplated discretionary action, a prosecutor is likely to be sued only when he decides, rather than declines, to prosecute. If a prosecutor wished to avoid potential liability, and this desire led him to bring fewer prosecutions, his ability *1084 to perform his public duty would be diminished. In addition, the Court pointed out that the sheer volume of potential lawsuits poses a grave threat to both prosecutorial decisionmaking and the public interest: because there is an identifiable potential plaintiff each time a prosecution is initiated, in an already overloaded criminal justice system defense of such actions could drain a disproportionately large amount of prosecutorial time.
The Imbler Court also mentioned certain unique considerations which support granting absolute immunity to prosecutors. First, if prosecutors face the possibility of damage suits for the denial of due process, they may be dissuaded from admitting weaknesses in their cases or producing later-discovered exculpatory evidence. Furthermore, judges may be less prone to reverse convictions on appeal if their findings could trigger damage suits. Additionally, the Court noted that due to "serious constraints of time and even information, a prosecutor inevitably makes many decisions that could engender colorable claims of constitutional deprivation," 424 U.S. at 425, 96 S.Ct. at 992-993, but that reexamination of prosecutorial decisionmaking in a civil proceeding, after it has been judicially scrutinized via appellate review, would amount to a retrial of the criminal charges in a new forum, and for that reason should be avoided.
In our view, none of these policy considerations would be undermined by denying absolute immunity to a prosecutor who is charged in a civil suit with having destroyed evidence in a pending criminal prosecution. There would be no chilling effect on the exercise of legitimate prosecutorial discretion, for evidence could merely be retained for a reasonable period. Moreover, because civil rights plaintiffs must plead facts with specificity, see e. g., Rotolo v. Borough of Charleroi, 532 F.2d 920, 922 (3d Cir. 1976); Kauffman v. Moss, 420 F.2d 1270, 1275-76 (3d Cir.), cert. denied, 400 U.S. 846, 91 S. Ct. 93, 27 L. Ed. 2d 84 (1970), there would be little chance of a proliferation of frivolous civil suits on these grounds. Although the policies undergirding Imbler could be further served by extending prosecutorial immunity to destruction of evidence, we believe it improvident to extend the immunity beyond the boundaries necessary to ensure that the underlying policies are fulfilled. Furthermore, we believe there to be countervailing policies in this situation which reinforce our view that the prosecutorial acts here alleged are entitled to only qualified immunity. The destruction of evidence has a uniquely damaging effect on the administration of justice, for once evidence has been destroyed it cannot be retrieved for judicial review. And the destruction is irrevocable, with a concomitant impossibility of vindication by a wronged defendant and an accompanying subversion of the public interest in correct, not merely swift, justice.[28]
Accordingly, while it is problematical whether the activity at issue can be characterized as "investigative"[29] or "administrative,"[30] and while the decision is a close one, we are convinced that the rationale underlying the absolute immunity doctrine of Imbler and Forsyth fails to support such immunity for the activity alleged here, particularly in light of the countervailing policies enunciated above. Therefore, we hold that defendant Berman is entitled only to qualified immunity for his alleged destruction *1085 of the McGinnis tape, and his motion to dismiss will be denied.[31]
D. Participation in Illegal Police Activity
Plaintiffs allege that Haines and Berman were present during, and participated in to some extent, the illegal police interrogations. They also allege that with knowledge of the specific illegalities pleaded in the complaint and of an ongoing pattern of such police behavior generally, Haines and Berman wrongfully failed to prevent or remedy the illegal conduct. Defendants make two contentions with respect to these allegations: first, they say no claim is stated against them by these allegations; and second, they say that if a claim is stated, they have absolute immunity under Imbler. We reject defendants' first contention, and reserve decision on the second.
In our view, immunity considerations aside, plaintiffs' allegations that the assistant district attorneys participated in the illegal police conduct are enough, standing alone, to withstand this motion to dismiss. Moreover, we believe that allegations that the defendants were present during police beatings or coercion, even without any allegations of direct participation, would state a claim against them. It is a long-established principle that § 1983 should be read against a tort background, see Monroe v. Pape, 365 U.S. 167, 81 S. Ct. 473, 5 L. Ed. 2d 492 (1961), overruled on other grounds in Monell v. Department of Social Services, 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), so that liability under § 1983 may clearly be based on acts of omission, at least insofar as a duty to act exists.
This was precisely the theory of liability in Byrd v. Brishke, 466 F.2d 6 (7th Cir. 1972), in which the court held that the failure of a non-supervisory police officer to stop other officers from summarily punishing a third person in his presence is actionable under § 1983 because it constitutes neglect of his duty to enforce the law. We believe that the prosecutors in this case, like the police in Byrd, had a duty to intervene if, as plaintiffs allege, summary punishment was being inflicted by police officers in their presence. While the prosecutor's function is clearly different from that of a police officer, he is nonetheless a quasi-judicial officer, see, e. g., Commonwealth ex rel. Specter v. Martin, 426 Pa. 102, 232 A.2d 729 (1967), with a duty to seek impartial justice, to see that no innocent man suffers and no guilty man escapes. Commonwealth v. Nicely, 130 Pa. 261, 270, 18 A. 737 (1889). It is the alleged failure to perform this duty, rather than any failure to supervise the police, that forms the basis for the cause of action.
As for the absolute immunity issue, we believe the plaintiff's allegations of prosecutorial involvement in illegal police activity bring the conduct squarely within Forsyth. If Berman and Haines were involved in the police activity at the Police Administration Building on the night of the firebombing, quite clearly they were acting in an investigative capacity. To the extent that their investigative activities consisted of gathering information necessary to decide whether to initiate a criminal prosecution, they are absolutely immune under Forsyth. For any investigative activity beyond this necessary information-gathering, Forsyth accords them only qualified immunity. Forsyth teaches that to place investigative activity into one or the other of these two categories may require some limited *1086 exploration of the factual setting in which the activity took place, 599 F.2d at 1215-16. Accordingly, we authorize, in the accompanying order, the taking of discovery on this point, and we reserve decision on the motions to dismiss this claim.
IV. Liability of the Police Commissioner and the District Attorney
Defendants O'Neill and Fitzpatrick, the Police Commissioner and former District Attorney respectively, contend that plaintiffs' factual allegations are insufficient to support any theory of liability against them, and move to dismiss on those grounds. For reasons explained infra, we grant Fitzpatrick's motion to dismiss but deny O'Neill's.
The claims against Fitzpatrick and O'Neill are essentially the same. The complaint alleges that beginning on October 5, 1975 and continuing thereafter, certain defendants other than O'Neill and Fitzpatrick threatened and coerced witnesses into making false statements incriminating Wilkinson, and that O'Neill and Fitzpatrick were aware of an ongoing pattern of the use of such methods by the police both generally and in this case, yet failed to remedy or prevent the unlawful consequences. Complaint ¶ 22. Paragraphs 22 through 26 of the complaint outline specific facts of which O'Neill and Fitzpatrick allegedly had gained subsequent knowledge but had failed to act upon, including, inter alia, that various statements implicating Wilkinson had been coerced and were false, and that the witnesses who made these statements had been beaten and threatened by Philadelphia police.
The basis for plaintiffs' claims against O'Neill and Fitzpatrick is that of supervisory inaction. After the Supreme Court's decision in Rizzo v. Goode, 423 U.S. 362, 96 S. Ct. 598, 46 L. Ed. 2d 561 (1976), there was some question whether official inaction could ever be a basis for § 1983 liability. Rizzo held that the causal link between official inaction and a constitutional violation is insufficient if all that is found is a supervisor's failure to act in the face of unconstitutional actions by subordinates, but that the requisite causal connection can be established from the fact that the subordinates' actions are an implementation of policies or practices endorsed by the supervisor. See Santiago v. City of Philadelphia, 435 F. Supp. 136, 152 (E.D.Pa.1977). The existence of general policies and practices within an organization can create constructive knowledge on the part of the supervisor of alleged constitutional deprivations, and the greater the duty a supervisor has to control those employees who actually committed the violation(s), the less specific knowledge of the offending conduct the supervisor will be required to have. Id.
In Rizzo the plaintiffs were given the opportunity to prove the existence of the requisite causal connection, but the Supreme Court held that their trial proof was insufficient for purposes of establishing supervisory liability. Plaintiffs in this case have not yet had an opportunity to prove, or even to take discovery on, their claims. We read the complaint to allege specific knowledge on O'Neill's part of a pervasive pattern of illegal police behavior generally and in this case, and to allege that O'Neill had ultimate supervisory responsibility for the police who actually committed the alleged beatings, threats, and other coercive acts. If in fact O'Neill actually knew of the pervasive pattern of abuse alleged to have resulted in plaintiff's injuries yet failed to take any steps to remedy or prevent this situation, his endorsement of these practices could be inferred under the principles set forth in Rizzo. Whether or not plaintiffs can actually produce evidence of such a pattern and of O'Neill's knowledge of it is an issue which can properly be tested on a motion for summary judgment.[32] Under Federal Rule of Civil Procedure 12(b)(6), all well-pleaded allegations must be taken as *1087 true for purposes of a motion to dismiss, and the allegations of the complaint against O'Neill are sufficient to withstand his motion.
Although plaintiffs' claims against Fitzpatrick are nearly identical to those against O'Neill, we reach the opposite result on his motion. Assuming, as we must at this juncture, that Fitzpatrick knew all he is alleged to have known with respect to patterns of police abuse he nevertheless had no direct supervisory authority over the police. Because he had no such authority, a § 1983 suit based only on his alleged failure to supervise is untenable. The complaint also charges Fitzpatrick with failure to prevent the alleged actions of the other district attorney defendants, over whom he does have supervisory authority. However, there has been no allegation of a widespread pattern of prosecutorial misconduct which would give rise to the constructive knowledge in Fitzpatrick necessary to overcome Rizzo.
The only other possible theories of liability for official inaction against Fitzpatrick would involve either his failure to halt the Wilkinson prosecution (which he allegedly knew was proceeding without probable cause) or his failure to initiate prosecutions against the police (whom he allegedly knew to have committed assaults and batteries against witnesses in the firebombing case). These theories, like the failure-to-supervise theory, are untenable, but for a different reason: they are based on prosecutorial decisions for which Imbler clearly mandates absolute immunity, i. e., decisions made in a quasi-judicial capacity. There being no cognizable theory of § 1983 liability against Fitzpatrick, we will grant his motion to dismiss.
V. Collateral Estoppel
Certain defendants contend that Wilkinson is collaterally estopped from claiming that he was physically abused by the Philadelphia police because of a contrary determination in a prior proceeding in the Philadelphia Court of Common Pleas. Specifically, they point to Judge Bonavitacola's finding of fact, at the conclusion of an exhaustive evidentiary hearing on Wilkinson's motion to suppress his confession, that Wilkinson "was not at any time during police interrogation physically abused."
The doctrine of collateral estoppel requires (1) that the issue in question be identical to an issue actually litigated in the prior litigation; (2) that the prior litigation have resulted in a final judgment on the merits; and (3) that the party against whom the estoppel is asserted was a party or in privity with a party to the prior adjudication. See Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 844 (3d Cir. 1974).
In Jones v. Saunders, 422 F. Supp. 1054 (E.D.Pa.1976), a civil rights action, defendants premised a motion for summary judgment on a theory similar to the one advanced by the defendants in this case. The plaintiff in Jones had previously filed a state court motion to suppress relating to the alleged illegality of his arrest. The motion was denied, but he was subsequently acquitted on a directed verdict of not guilty. Defendants argued, as here, that plaintiff was collaterally estopped from raising the question of the legality of his arrest by the state court denial of his suppression motion. Chief Judge Lord, denying defendants' motion for summary judgment, stated:
A conviction is a final judgment. An order denying a motion to suppress is not; it is interlocutory. An acquitted defendant never has the opportunity to test finally in the state court the propriety of the lower court's ruling. . . . To hold that [he] is estopped would deprive a plaintiff of an opportunity for a definitive determination of important federal rights for the vindication of which the Civil Rights Acts were specifically designed.
422 F.Supp. at 1055.
Wilkinson, like the plaintiff in Jones, had no opportunity to test the propriety of the lower court's ruling in his suppression hearing, although for different reasons. Although *1088 unlike Jones he was subsequently convicted in state court (before he was ultimately exonerated), Wilkinson did win his pre-trial motion to suppress his confession. Judge Bonavitacola found against Wilkinson on the issue of physical coercion, but he also found that Wilkinson's limited mental ability prevented him from fully understanding the nature and consequences of Miranda warnings and from being capable of a knowing and intelligent waiver of his rights. It was on this basis that Wilkinson's confession was suppressed. Thus Judge Bonavitacola's finding on physical coercion was not essential to his suppression order, and since Wilkinson won the motion he had no reason to challenge any adverse determination contained in the order.
According to Professor Moore:
[T]he general rule is that a judgment has no conclusive effect adverse to the winning litigant, except insofar as it merges his cause of action if he was the plaintiff. This rule is based upon two considerations. First, any adjudication of an issue adverse to a litigant who nonetheless wins on another ground is not a dispositive adjudication, and the judgment that results does not depend upon that adjudication. Second, it would be unjust to conclude the winning litigant as to an issue adjudicated against him because, as the winning litigant, he was unable to seek appellate review. . . .
1B Moore's Federal Practice ¶ 0.416[5] at 2302-03 (2d ed. 1974) (footnote omitted). In accordance with this general rule, and for the reasons expressed by Chief Judge Lord in Jones v. Saunders, supra, we deny defendants' motion to dismiss Wilkinson's assault and battery claims on grounds of collateral estoppel.
VI. Claims of Christine Wilkinson and Robert Wilkinson, Jr.
A. Introduction
Certain of the defendants, citing Howell v. Cataldi, 464 F.2d 272 (3d Cir. 1972), urge that Christine Wilkinson and Robert Wilkinson, Jr. are not "legally cognizable parties" to this proceeding. To the extent that defendants' argument is couched in terms of standing and amounts to the contention that Christine and Robert, Jr. cannot assert claims based upon alleged violations of Robert Wilkinson's constitutional rights, we believe it misses the mark. Christine and Robert, Jr. do not assert Wilkinson's rights in this action; rather, they seek to assert their own. Accordingly, the issue is not one of standing; it is whether the claims asserted by Christine and Robert, Jr. are cognizable under § 1983, i. e., whether the allegations of the complaint state claims on behalf of Christine and Robert, Jr. upon which relief can be granted. For the reasons which follow, we believe that Christine's allegations do state a federal claim, but that Robert, Jr.'s do not.
B. Christine Wilkinson's Claim
Christine Wilkinson alleges, inter alia, that on October 5, 1975 she was threatened by the police defendants and was told that she would lose custody of Robert, Jr. if she did not sign a statement implicating her husband in the firebombing.[33] Complaint ¶ 24. She contends that these allegations state claims under both federal and state law. Our concern at this juncture is not with the alleged state law claims, but only with whether the complaint states a cognizable federal claim on Christine's behalf.[34] We believe that it does.
*1089 In Paul v. Davis, 424 U.S. 693, 96 S. Ct. 1155, 47 L. Ed. 2d 405 (1976), the Court admonished against unduly expanding § 1983, and it may fairly be said that the case stands for the proposition that not every state-inflicted injury gives rise to a cause of action under § 1983. But Paul also reaffirms the undisputed principle that a cause of action is created under § 1983 when acts perpetrated under color of state law deprive an individual of a right secured by the Constitution.
The right asserted by Mrs. Wilkinson in this lawsuit may be characterized as a parental right or a right to family integrity. That such a privacy right is fundamental to American jurisprudence has been frequently affirmed by the Supreme Court. See Parham v. J. L., 442 U.S. 584, 99 S. Ct. 2493, 61 L. Ed. 2d 101 (1979); Moore v. City of East Cleveland, 431 U.S. 494, 97 S. Ct. 1932, 52 L. Ed. 2d 531 (1977); Roe v. Wade, 410 U.S. 113, 93 S. Ct. 705, 35 L. Ed. 2d 147 (1973); Wisconsin v. Yoder, 406 U.S. 205, 92 S. Ct. 1526, 32 L. Ed. 2d 15 (1972); Stanley v. Illinois, 405 U.S. 645, 92 S. Ct. 1208, 31 L. Ed. 2d 551 (1972); Griswold v. Connecticut, 381 U.S. 479, 85 S. Ct. 1678, 14 L. Ed. 2d 510 (1965); Prince v. Massachusetts, 321 U.S. 158, 64 S. Ct. 438, 88 L. Ed. 645 (1944); Skinner v. Oklahoma, 316 U.S. 535, 62 S. Ct. 1110, 86 L. Ed. 1655 (1942); Pierce v. Society of Sisters, 268 U.S. 510, 45 S. Ct. 571, 69 L. Ed. 1070 (1925); Meyer v. Nebraska, 262 U.S. 390, 43 S. Ct. 625, 67 L. Ed. 1042 (1923). The familial right has been asserted under various Constitutional provisions, see, e. g., Mr. Justice Douglas' "penumbra" theory of Griswold v. Connecticut, supra, but has recently come to rest rooted in the Fourteenth Amendment's guarantee of personal liberty, Roe v. Wade, supra, 410 U.S. at 152-53, 93 S. Ct. 705, 726, 35 L. Ed. 2d 147. See Whalen v. Roe, 429 U.S. 589, 598-99 n.23, 97 S. Ct. 869, 876 n.23, 51 L. Ed. 2d 64 (1977).
If a state regulation had provided that Mrs. Wilkinson must give up either her son or her husband, the choice essentially alleged in the complaint, we would have an easy case. We are dealing here, however, with an isolated threat to remove her son if she refused to implicate her husband, and not with an actual removal. What we must decide is whether such a threat, when made by a police officer, may constitute an intrusion into Mrs. Wilkinson's right of family integrity sufficient to state a cause of action under 42 U.S.C. § 1983. We hold that, under the unique circumstances of this case, it does.
Justice Harlan, dissenting in Poe v. Ullman, 367 U.S. 497, 542-43, 81 S. Ct. 1752, 1776, 1777, 6 L. Ed. 2d 989 (1961), discussed the Court's function under the Due Process Clause:
Due process has not been reduced to any formula; its content cannot be determined by reference to any code. The best that can be said is that through the course of this Court's decisions it has represented the balance which our Nation, built upon postulates of respect for the liberty of the individual, has struck between that liberty and the demands of organized society. . . . The balance of which I speak is the balance struck by this country, having regard to what history teaches are the traditions from which it developed as well as the traditions from which it broke. That tradition is a living thing. . . .
. . . [T]he full scope of the liberty guaranteed by the Due Process Clause cannot be found in or limited by the precise terms of the specific guarantees elsewhere provided in the Constitution. This `liberty' is not a series of isolated points pricked out . . .. It is a rational continuum which, broadly speaking, includes a freedom from all substantial arbitrary impositions and purposeless restraints, . . . and which also recognizes, what a reasonable and sensitive judgment must, that certain interests require particularly careful scrutiny. ..
*1090 This passage was quoted with approval by Justice Powell writing for the Court in Moore v. City of East Cleveland, supra, at 501-02, 97 S.Ct. at 1936-1937. After a discussion of the pitfalls of the substantive due process doctrine, Justice Powell continued: "Appropriate limits on substantive due process come not from drawing arbitrary lines but rather from careful `respect for the teachings of history [and] solid recognition of the basic values that underlie our society.'" Id. at 503, 97 S.Ct. at 1937, quoting Griswold v. Connecticut, supra, 381 U.S. at 501, 85 S.Ct. at 1690 (Harlan, J., concurring).
Guided by this wisdom, we conclude that, if the facts proved at trial comport with those alleged in the complaint, the actions of the police in questioning Mrs. Wilkinson intruded to a constitutionally impermissible degree into the Wilkinson family's integrity, a value basic to our heritage, and protected by the liberty guarantee of the Fourteenth Amendment. We do not deal here with a police officer's idle or random threat, but rather with what is alleged to have been a colossal intimidation delivered in the midst of a high drama involving the suspects, the police, and the public (the police were under intense public pressure to solve the heinous crime), with potential consequences of the gravest sort for Mrs. Wilkinson's family. By essentially forcing her to choose between her husband and her son, the police officers created a classical Hobson's choice, which must inexorably lead to a psychic family disruption similar in scope to that which would have resulted had the threat been carried out. This the Constitution does not permit, and the motions to dismiss as to plaintiff Christine Wilkinson will be denied.
C. Robert Wilkinson, Jr.'s Claims
The constitutional protection given the rights asserted by Christine Wilkinson is based at least in part on the central role which Christine herself was forced to play in the disruption of her own family. This analysis does not, in our view, extend to the rights asserted by Robert, Jr., who alleges that the defendants deprived him of his father during the first years of his life. Complaint ¶ 68. While we do not dispute plaintiffs' contention that this deprivation could cause emotional injury and could be highly disruptive of the family unit, we do not believe that the right Robert, Jr. asserts is within the ambit of those familial rights discussed with respect to Christine. Nor do the allegations with respect to Robert, Jr. fall within the unique factual matrix which motivated us to recognize his mother's claim. Rather, Robert, Jr.'s action is in essence one for the false imprisonment of his father a derivative action not permitted under § 1983. Mindful of the admonition of Paul v. Davis, supra, against undue expansion of § 1983, we will grant defendants' motions to dismiss as to plaintiff Robert Wilkinson, Jr.
VII. Section 1983 Claim Against the City of Philadelphia
In Monell v. Department of Social Services, 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), the Court overruled prior precedent and held that, in certain situations described infra, municipalities could be sued under § 1983. Plaintiffs allege that the City of Philadelphia is liable under federal law because it failed properly to train or control its police officers and has in effect condoned the use of unlawful and brutal police methods by, inter alia, openly and repeatedly refusing to discipline or arrest officers who violate the law. Complaint ¶ 59. Plaintiffs also allege that certain Philadelphia police department supervisory officials, including a lieutenant and supervisor in the homicide division (Murray), a captain directly in charge of the homicide division (Patterson), an inspector in charge of all detective operations including those of the homicide division (Golden), and the Commissioner himself (O'Neill) either had knowledge of an ongoing pattern of the use of illegal and abusive methods by the police or were actually present at some or all of the unlawful interrogations alleged in this case. Complaint ¶ 22. The City contends that these allegations do not state a claim under Monell. We disagree.
In Monell the Court held that while a municipality "cannot be held liable solely *1091 because it employes a tortfeasor or, in other words, a municipality cannot be held liable under 1983 on a respondeat superior theory," 436 U.S. at 691, 98 S.Ct. at 2036, it may be sued for constitutional deprivations "visited pursuant to governmental `custom' even though such a custom has not received formal approval through the body's official decisionmaking channels." Id. at 690-91, 98 S.Ct. at 2036. While disclaiming any intention of attempting to delineate the full contours of municipal liability under § 1983, the Court did give some guidance as to the meaning of governmental custom by referring to the definition of custom provided in Adickes v. S. H. Kress & Co., 398 U.S. 144, 167-68, 90 S. Ct. 1598, 1613, 26 L. Ed. 2d 142 (1970). There Justice Harlan, writing for the Court, defined custom as a persistent practice of state officials which is so well-settled that it has the force of law. He noted that official inaction, at least in the sense of neglecting to enforce laws already on the books, could become so entrenched as to qualify as custom within the scope of § 1983. 398 U.S. at 167 n.39, 90 S.Ct. at 1613 n.39. See also Nashville, C. & St. L. Ry. v. Browning, 310 U.S. 362, 369, 60 S. Ct. 968, 84 L. Ed. 1254 (1940), cited in Monell, supra, 436 U.S. at 691 n.56, 98 S.Ct. at 2036 n.56.
Applying this principle to the present case, we believe that the complaint states a § 1983 claim against the City of Philadelphia. It alleges the repeated use of brutal and unlawful police methods and the City's refusal, through the acquiescence of a number of the most highly placed supervisory police officials, to enforce existing rules or laws prohibiting such conduct. These allegations are sufficient to state a § 1983 claim against the City.
VIII. Pendent Jurisdiction
The determination whether or not to decide state law claims pendent to the federal claims asserted in this suit is a matter committed to our discretion, to the extent that the claims arise out of a "common nucleus of operative fact" and are such that a plaintiff "would ordinarily be expected to try . . . all in one judicial proceeding." United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966). Gibbs specified three major factors to be taken into consideration by courts considering the exercise of pendent jurisdiction: judicial economy, convenience, and fairness to the litigants. Id., at 726, 86 S.Ct. at 1139. Hagans v. Lavine, 415 U.S. 528, 545-46, 94 S. Ct. 1372, 1383, 39 L. Ed. 2d 577 (1974) explains that when these factors are present, Gibbs contemplates the federal adjudication of pendent state claims. Consequently, in cases on our docket we have generally exercised our discretion in favor of retaining pendent state law claims in civil rights actions when, as here, such retention advanced judicial economy and convenience, and no unfairness to the litigants appears. We will deny motions by all defendants against whom the plaintiffs have stated a substantial federal claim to dismiss pendent state law claims.
IX. Conclusion
The appended order disposes of all outstanding motions, with the exception of the motions of defendants Haines and Berman to the extent they relate to immunity for alleged activity at the Police Administration Building on October 5, 1975. Decision on these motions is reserved pending discovery and hearing as outlined in § III.D., supra.
NOTES
[1] There was also a federal investigation and prosecution which resulted in the exoneration of Wilkinson and the convictions of David McGinnis and Ronald Hanley. The federal proceedings are not at issue here.
[2] The police officer defendants include John Ellis, William Jones, James Crown, George Kuhar, James Carty, James Curley, Leonard Mitchell, and Roseborough McMillan. Ellis, Carty, Curley, Jones, Crown, and McMillan were convicted in federal court of conspiring to deprive Philadelphia citizens of federal civil rights in connection with their investigation of the firebombing; their convictions were upheld on appeal. United States v. Ellis, 595 F.2d 154 (3d Cir. 1979). They are currently serving 15 month sentences at a Florida federal prison camp.
[3] Supervisory police defendants include Joseph O'Neill, Police Commissioner; Joseph Golden, inspector in charge of detective operations; Donald Patterson, captain in charge of the homicide division; James Murray, lieutenant and supervisor in the homicide division; and William Harris and John Brennan, both assigned to the District Attorney's office. District Attorney defendants include F. Emmett Fitzpatrick, the former District Attorney; Clifford Haines, Assistant District Attorney in charge of homicide; and David Berman, Assistant District Attorney assigned to the firebombing prosecution.
[4] Also named as defendants are John Doe and Richard Roe, unknown police officers and prosecutorial officials who allegedly participated in the events described in the complaint.
[5] Wilkinson alleges federal causes of action under the Civil Rights Acts, 42 U.S.C. §§ 1983, 1985, & 1988, and under 28 U.S.C. §§ 2201 & 2202. He originally applied for injunctive relief as well, seeking to prohibit the Commonwealth from retrying him after he won a new trial when the only eyewitness against him recanted his testimony. A motion for a temporary restraining order was denied and the entire retrial issue was mooted by a June 2, 1977 order, entered by Judge Merna Marshall of the Philadelphia Court of Common Pleas, terminating with prejudice all criminal proceedings against Wilkinson and dismissing the indictments. Commonwealth v. Wilkinson, November Term, 1975, Nos. 788-801 (C.P. Phila. June 2, 1977).
[6] See Part III.D., infra, for a discussion of the outstanding issue. Three motions will be disposed of in the accompanying order with only the following discussion. The motion by defendant Harris for a more definite statement will be dismissed as moot, following the filing of an amended complaint designed to clarify the allegations with regard to his actions. The motion by defendant Berman for a more definite statement will be denied, for the complaint is more than adequately specific to allow defendant Berman to frame a responsive pleading. The motions by certain defendants to dismiss for lack of subject matter jurisdiction as to claims against them in their individual capacities is dismissed. That motion is based on a plainly incorrect theory, see, e. g., Norton v. McKeon, 444 F. Supp. 384, 386 (E.D.Pa.1977), aff'd, 601 F.2d 575 (3d Cir. 1979).
[7] Because of the plethora of issues, parties, and motions, we have attempted to simplify our discussion by occasionally ascribing to the defendants generally a motion or argument which all defendants do not in fact join. We do this only where the identity or status of the moving defendant(s) is not important for purposes of resolving the issue(s) raised.
[8] United States v. Hanley et al., Crim. No. 76-513. McGinnis pled guilty on December 15, 1976; his co-defendant, Ronald Hanley, was subsequently tried and convicted on January 7, 1978.
[9] Commonwealth v. Wilkinson, supra note 5.
[10] While the above recitals have been framed in terms of the allegations of the complaint and our decision rests on the legal sufficiency of the pleadings alone, it is a matter of widespread public knowledge that a number of these allegations have actually been admitted or established in other court proceedings. For example, defendant Berman has admitted to having thrown out the tape recording of the interview with David McGinnis. It has also been established that the Commonwealth's files contained statements by several persons interviewed by the police within one month after the firebombing, implicating McGinnis and another while tending to exculpate Wilkinson, but that none of these statements were turned over to the defense. Finally, when Judge Marshall dismissed the indictments against Wilkinson, she did so on grounds, inter alia, of prosecutorial misconduct.
[11] Because no defendant contends that Christine's or Robert, Jr.'s claims are time-barred, we address only Wilkinson's claims in our limitations discussion. We note that our analysis is the same respecting both the federal and state law claims.
[12] We note that Pennsylvania has recently amended some of its limitations statutes, see 42 Pa.C.S. § 5501 et seq., but we do not consider the applicability of the amendments because they expressly provide that they cannot revive a time-barred claim.
[13] The complaint also alleges false arrest and false imprisonment claims, but Wilkinson appears to concede, by failing to list these in his Memorandum in Response to Defendants' Motions to Dismiss, that they are time-barred. Under Pennsylvania law an action for false arrest must be brought within one year from the time the cause of action accrues, 12 P.S. § 51, as must an action for false imprisonment based on incarceration arising out of an allegedly unlawful arrest. See Kedra v. City of Philadelphia, 454 F. Supp. 652, 670-71 (E.D.Pa. 1978); Gagliardi v. Lynn, 446 Pa. 144, 285 A.2d 109 (1971). Wilkinson's Complaint arguably concedes probable cause at the time of the arrest, but goes on to allege the dissipation of this probable cause so as to render illegal his continued incarceration. However, he does not press this contention. There is no serious question that there was probable cause at the time of arrest. Accordingly, Wilkinson's causes of action for false arrest and for false imprisonment growing out of the false arrest, which accrued on October 5, 1975, were time-barred when he filed his complaint on March 10, 1977.
[14] Defendant Fitzpatrick also moves to dismiss on the grounds of prosecutorial immunity, but the issues he raises are sufficiently different from the ones raised by Haines and Berman to warrant separate treatment. See Part IV., infra.
[15] Although Imbler was a § 1983 action against a state prosecutor while Forsyth involved a Bivens-type action against federal officials, the Third Circuit has held that public policy mandates extension of a similar immunity to state and federal prosecutors. See Brawer v. Horowitz, 535 F.2d 830, 834 (3d Cir. 1976).
[16] The Forsyth court did, however, carve out a narrow exception to the general rule that a prosecutor's investigative activity would receive only a qualified immunity, holding that to the extent that the securing of information is necessary to a prosecutor's decision to initiate a criminal prosecution, it is encompassed within the absolute protection afforded the decision itself. 599 F.2d at 1215. We understand this exception to be an expression of the perception that some investigative activity is tied so closely to quasi-judicial activity that to deny absolute immunity for the former would dilute the immunity accorded the latter. As will appear infra, this investigative exception may be relevant to some of the prosecutorial activities alleged in the complaint.
[17] But see note 16, supra. There may, of course, also be situations in which a prosecutor's conduct cannot be included within any of the three functional categories suggested in Imbler and Forsyth, but instead goes beyond the proper performance of any aspect of a prosecutor's job. See Helstoski v. Goldstein, 552 F.2d 564, 566 (3d Cir. 1977). Such conduct would be subject to qualified immunity at most.
[18] See Briggs v. Goodwin, 186 U.S.App.D.C. 179, 193, 569 F.2d 10, 24 (D.C.Cir.1977), cert. denied, 437 U.S. 904, 98 S. Ct. 3089, 57 L. Ed. 2d 1133 (1978).
[19] See Imbler v. Pachtman, 424 U.S. at 423 n.20 and 424-26, 96 S.Ct. at 991 n. 20.
[20] See Briggs v. Goodwin, supra, note 18, 186 U.S.App.D.C. at 190-191, 569 F.2d at 21-22, rejecting appellant's absolute immunity claim because his alleged activity was not "advocatory" as contemplated by Imbler.
[21] Plaintiffs have alleged both false sworn testimony at certain hearings and knowingly false statements to the court as members of the bar and officers of the court. While recognizing the difference between the two types of statements, we will refer to them collectively as "false testimony," for the distinction has no bearing on our analysis.
[22] Briggs was a 2-1 decision, written by Judge McGowan for himself and Judge Robinson, with Judge Wilkey authoring a lengthy dissent.
[23] The Third Circuit's views on the Briggs case are far from clear. In Jennings v. Shuman, 567 F.2d 1213, 1221 (3d Cir. 1977), the court cited Briggs as the only court of appeals decision to have considered the question, left open in Imbler, whether a prosecutor should have absolute immunity for non-advocatory activity. The Jennings court also noted that because it was not required to decide the open Imbler question, it would not comment on the correctness of Briggs except to note that there was a split of opinion in Briggs itself and among commentators generally. 567 F.2d at 1221 n.15. Then in Forsyth the Third Circuit did answer the open Imbler question, agreeing substantially with the Briggs court, but saying that in its Jennings opinion it had questioned the correctness of the scope of the immunity afforded in Briggs. 599 F.2d at 1214. We believe, however, for reasons we discuss infra, that Wilkinson's reliance on Briggs is misplaced irrespective of the Third Circuit's views on the case.
[24] The Briggs court rejected this somewhat simplistic approach in that although it affirmed the district court's order denying the prosecutor's motion to dismiss, it expressly disapproved the lower court's reasoning. The district court had reasoned that since a prosecutor was immune from suit only when acting within the scope of his authority, there could be no immunity for a prosecutor who allegedly perjures himself, because perjury is never within a prosecutor's authority. The court of appeals, in opting for a functional approach, said that the district court's approach would completely abrogate the immunity doctrine. 186 U.S.App. D.C. at 184, 569 F.2d at 15.
[25] See Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963).
[26] We note that this would seem inconsistent with Berman's testimony at Wilkinson's Brady hearing before Judge Geisz of the Philadelphia Court of Common Pleas that he (Berman) was not familiar with the contents of the tape because he was not present when McGinnis's statement was made. Because this is a motion to dismiss rather than a motion for summary judgment, however, we advert to this testimony only in passing, and do not rely on it in disposing of the motion.
[27] It is, of course, true that all office "house-cleaning" or file straightening requires the exercise of some judgment. There is no suggestion, however, that the McGinnis statement was discarded as part of such routine upkeep. To the contrary, Berman's action took place in the context of a particular prosecution.
[28] We recognize, of course, that the sterilization involved in Stump v. Sparkman, 435 U.S. 349, 98 S. Ct. 1099, 55 L. Ed. 2d 331 (1978) was equally irrevocable. Judicial immunity, however, is wider than is prosecutorial immunity: a Judge is absolutely immune from civil suit so long as he has jurisdiction over the subject matter before him. That jurisdiction was found in Stump.
[29] Wilkinson argues that the gathering of evidence is an investigative act, citing J.D. Pflaumer, Inc. v. United States Dept. of Justice, 450 F. Supp. 1125 (E.D.Pa.1978). However, his allegations go not to the initial gathering of evidence, but to the subsequent destruction of that evidence in connection with a pending judicial proceeding.
[30] See note 27, supra.
[31] We note that the Seventh Circuit reached a contrary result in Hampton v. Hanrahan, 600 F.2d 600 (7th Cir. 1979) and Heidelberg v. Hammer, 577 F.2d 429 (7th Cir. 1978). Those cases do not analyze the issue, however, merely stating the conclusion and citing Imbler. We respectfully disagree that Imbler leads inexorably to the Seventh Circuit's result. We are more inclined to agree with Cunningham v. Tonetti, 78 Civ. 993 (WWC) (S.D.N.Y. July 13, 1978), in which a judge was alleged to have participated in a conspiracy to destroy evidence. Judge Conner, in an unpublished opinion, wrote that "[a]n agreement to conceal, destroy or manufacture evidence is plainly not [a judicial] act." Slip op. at 3. We would not, however, be inclined to extend our rationale quite so far, and hold only that a prosecutor is not absolutely immune for the destruction of evidence.
[32] We note that the Tenth Circuit recently reversed a summary judgment for police supervisory personnel, holding in McCelland v. Facteau, 610 F.2d 693 (10th Cir. 1979), that there was a factual issue for jury consideration as to whether the police chief had adequate notice of police misconduct in order to find that he had breached his duty to supervise.
[33] The Complaint does not reveal whether Mrs. Wilkinson ever signed such a statement, although it is alleged that some witnesses were held involuntarily for up to 20 hours, with spouses separated, in order to increase the psychological pressure and to obtain false statements implicating Wilkinson, and that such false inculpatory statements were indeed obtained. Complaint ¶ 26. A decision whether any federally protected right of Christine Wilkinson's was implicated by the alleged police conduct does not, in any event, turn on the effectiveness of the pressure allegedly brought to bear upon her.
[34] To the extent that a party has a cognizable federal claim, a federal court has jurisdiction over that party's state law claims arising out of a "common nucleus of operative fact," see United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966), and can make a discretionary determination to exercise that jurisdiction and decide the state law claims. If a party has no federal claim, and there is no other independent ground of federal jurisdiction, there may not be judicial power to decide the nonfederal or state law claims. See Aldinger v. Howard, 427 U.S. 1, 96 S. Ct. 2413, 49 L. Ed. 2d 276 (1976). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2906804/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
____________________
NO. 09-08-045 CV
____________________
DAVID ALEVY AND DAVID'S CADILLAC & GM SPECIALIST, Appellants
V.
GREG TURNER AND ELIZABETH TURNER, Appellees
On Appeal from the County Court at Law No. 1
Jefferson County, Texas
Trial Cause No. 106684
MEMORANDUM OPINION
The appellees, Greg Turner and Elizabeth Turner, filed a concession of error and join
the appellants' prayer to reverse the trial court's judgment and remand the case to the trial
court. Reversal and remand is the only relief sought in the brief filed by appellants David
Alevy and David's Cadillac & GM Specialist. Accordingly, we submit the appeal on the
appellants' brief and the joinder of the appellees to the appellants' request for a remand. We
reverse the judgment and remand the case to the trial court.
REVERSED AND REMANDED.
_____________________________
STEVE McKEITHEN
Chief Justice
Opinion Delivered May 1, 2008
Before McKeithen, C.J., Gaultney and Kreger, JJ. | 01-03-2023 | 09-10-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1721480/ | 430 S.W.2d 494 (1968)
Ronald Dale DARDEN, Appellant,
v.
The STATE of Texas, Appellee.
No. 41453.
Court of Criminal Appeals of Texas.
July 24, 1968.
*495 Paul B. Underkofler, Jr., Dallas, court appointed, for appellant.
Henry Wade, Dist. Atty., Curtis D. Glover, Douglas D. Mulder, Kerry P. FitzGerald, Malcolm Dade, Camille Elliott, Asst. Dist. Attys., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State.
OPINION
ONION, Judge.
The offense is robbery by assault; the punishment, 99 years confinement in the Texas Department of Corrections.
Appellant entered a plea of guilty before a jury and the trial was conducted under the provisions of Article 26.14, Vernon's Ann.C.C.P. No motion for probation was filed.
The evidence reflects that Ernest Phelps, Jr., manager of the Seven-Eleven Ice House in Grand Prairie, Texas, was robbed at gunpoint of $136.00 by the appellant on November 28, 1965, at approximately 9:30 p. m. On December 4, 1965, appellant was apprehended while in the process of an armed robbery at Wyatt's Food Store in Waxahachie, Texas. His written confession of the robbery alleged in the indictment of the Seven-Eleven Ice House in Dallas County, Texas was admitted without objection.
While not challenging the sufficiency of the evidence to sustain the conviction, appellant, in his first ground of error, contends the trial court erred in refusing to allow him and his wife to testify on direct examination as to his motive in committing the offense charged, his financial and social background, his expression of remorse and contrition.
We do not find that appellant's wife was interrogated concerning his motive. She did relate that she had been married to appellant for four years and had two sons, ages 3 and fifteen months. The court sustained the objection to the question that she "tell the jury something about the financial status" of her family. Nevertheless, she subsequently testified that because of her financial condition the two children were living with her mother-in-law. When the court sustained another objection to "this line of testimony" the witness was passed for cross-examination and no exception was taken to the court's action.
Testifying in his own behalf, appellant related he was 27 years old and had an eighth grade education. He listed some of his previous places of employment, including his job with the Grand Prairie Water Department at the time of the robbery in question. He was not permitted to testify as to his motive in committing the robbery, but did relate that he had made a written confession because he did not "want to live a lie" and wanted to get "forgiveness from God."
It is well established that a plea of guilty to a felony charge before a jury admits the existence of all facts necessary to establish guilt and, in such cases, the introduction of testimony by the State is to enable the jury to intelligently exercise the discretion which the law vests in them touching the penalty to be assessed. Miller v. State, Tex.Cr.App., 412 S.W.2d 650; Richardson v. State, 164 Tex. Crim. 500, 300 S.W.2d 83; Burks v. State, 145 Tex. Crim. 15, 165 S.W.2d 460; Grounds v. State, 140 Tex. Crim. 209, 144 S.W.2d 276; Hawkins v. State, 158 Tex. Crim. 406, 255 S.W.2d 875; Vance v. State, 122 Tex. Crim. 157, 54 S.W.2d 118; Aills v. State, 114 Tex. Crim. 345, 24 S.W.2d 1097; Crumbley v. State, 103 Tex. Crim. 391, 280 S.W. 1064.
Where the guilty plea is before the jury, the presumption of innocence does not obtain under the plea and there is no issue of justification under it. Stullivan *496 v. State, 47 Tex. Crim. 615, 85 S.W. 810; Garcia v. State, 91 Tex. Crim. 9, 237 S.W. 279. See also Jackson v. State, 155 Tex. Crim. 466, 236 S.W.2d 623. Where such plea is before a jury, the accused may at any time before the retirement of the jury withdraw his plea and thus put upon the State the burden of proving his guilt beyond a reasonable doubt. Alexander v. State, 69 Tex. Crim. 23, 152 S.W. 436. It is observed that appellant made no effort to withdraw his guilty plea.
While a jury is entitled to information which will fairly tend to enlighten them in their discretion in imposing punishment, testimony by an accused is subject to the general rules as to necessary relevancy. See 22A C.J.S. Criminal Law § 600, p. 394. It may or should be excluded when it has no bearing on the matters in issue. Gomez v. State, 145 Tex. Crim. 168, 166 S.W.2d 699; Moore v. State, 142 Tex. Cr.R. 99, 151 S.W.2d 595.
The answer sought to be elicited by the question relating to motive is not in the record before us and cannot be properly appraised. If the answer sought had been self-serving, it would have been properly excluded. Johnson v. State, 165 Tex. Cr.R. 468, 308 S.W.2d 869; 22A C.J.S. Criminal Law § 737. Evidence tending to show the reason why an accused committed an unlawful act is properly excluded as being irrelevant and immaterial. People v. Temple, 102 Cal. App. 2d 270, 227 P.2d 500.
Further, we find no error in the trial court's exclusion of the amount of appellant's wages at the time of his arrest. See Clay v. State, 41 Tex. Crim. 653, 56 S.W. 629. Ground of error #1 is overruled.
We reject appellant's ground of error #2 that the punishment assessed is excessive in view of the evidence, particularly in light of his cooperation and extrajudicial confession. If the punishment is within that prescribed by the statute, it is beyond the province of this Court to pass upon the question of excessive punishment. Lewallen v. State, 166 Tex. Crim. 287, 313 S.W.2d 293; Bell v. State, 166 Tex. Crim. 340, 313 S.W.2d 606; Lambright v. State, 167 Tex. Crim. 96, 318 S.W.2d 653; Lambright v. State, Tex.Cr.App., 318 S.W.2d 654; McGruder v. State, Tex.Cr.App., 377 S.W.2d 191; Gonzales v. State, Tex.Cr. App., 386 S.W.2d 139.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1862622/ | 275 B.R. 307 (2002)
In re Richard Gerald ROUSEY and Betty Jo Rousey, Debtors.
No. 3:01-BK-13241.
United States Bankruptcy Court, W.D. Arkansas, Harrison Division.
February 13, 2002.
*308 Claude Jones, Harrison, AR, for Richard and Betty Jo Rousey.
Colli C. McKiever, Fayetteville, AR, for trustee Jill R. Jacoway.
Jill R. Jacoway, Fayetteville, AR, trustee.
*309 Order Sustaining Trustee's Objection to Exemptions and Granting Motion for Turnover
ROBERT F. FUSSELL, Bankruptcy Judge.
Pending before the Court is the "Objection to Claim of Exemptions and Motion for Turnover" filed by Jill Jacoway, the chapter 7 trustee (the "Trustee"), on August 3, 2001. The Court conducted an evidentiary hearing on the objection to exemptions and motion for turnover on October 24, 2001. For the reasons stated below, the Trustee's objection to exemptions is sustained and her motion for turnover is granted.
I. Jurisdiction.
This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(B) and (E). The following order constitutes findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052(a).
II. Findings of Fact.
Richard Gerald Rousey and Betty Jo Rousey ("Debtors") filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code on April 27, 2001. Debtors' Schedule B, "Personal Property," lists Debtors' interests in two IRAs at the First National Bank in Berryville, Arkansas, specifically, IRA CERT # 208221 in the name of Richard Gerald Rousey, and IRA CERT # 208345 in the name of Betty Jo Rousey (collectively the "IRAs").
On Debtors' Schedule C, "Property Claimed as Exempt," Debtors claimed the following exemptions of the IRAs:
------------------------------------------------------------------------------------------------
Current Market
Value of Value of Property
Description of Specify Law Providing Claimed Without Deducting
Property Each Exemption Exemption Exemption
------------------------------------------------------------------------------------------------
IRA CERT # 208221 First 11 U.S.C. § 522(d)(5) 5,033.00 42,915.32
National Bank, Berryville, AR. 11 U.S.C. § 522(d)(10)(E) 37,882.32
------------------------------------------------------------------------------------------------
IRA CERT # 208345 First 11 U.S.C. § 522(d)(5) 5,648.00 12,118.16
National Bank, Berryville, AR 11 U.S.C. § 522(d)(10)(E) 6,470.16
-------------------------------------------------------------------------------------------------
On August 3, 2001, the Trustee filed an objection to exemptions and motion for turnover, and argued that Debtors are not entitled to claim exemptions of the IRAs pursuant to 11 U.S.C. § 522(d)(10)(E) in the total amount of $44,352.48. The Trustee does not object to Debtors' claimed exemptions in the total amount of $10,681.00 pursuant to 11 U.S.C. § 522(d)(5).
On October 24, 2001, the Court conducted an evidentiary hearing on the Trustee's objection to exemptions and motion for turnover. At the hearing, the parties stipulated to the amounts and account numbers of the IRAs, as set forth above. The Court heard the testimony of Debtors, who each testified that it is their understanding that they can withdraw money from the IRAs at any time, subject to a 10% tax penalty. At the conclusion of the hearing, upon the request of the parties, the Court continued the matter to allow for additional discovery and the introduction of additional evidence as to the extent to which the IRAs are reasonably necessary for the support of Debtors. In addition, the Court informed the parties that it would rule in the interim on the issue of whether Debtors' ability to withdraw money from the IRAs at any time renders 11 U.S.C. *310 § 522(d)(10)(E) inapplicable to this case as a matter of law.
On December 21, 2001, the parties filed a joint stipulation, admitting into evidence copies of the IRA custodial account agreements pertaining to the IRAs. The two account agreements are identical, and, with regard to distribution, provide as follows:
1. Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor's interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.401(a)(9) 2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to the Depositor under paragraph 3, or to the surviving spouse under paragraph 4, other than in the case of a life annuity, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or begin to be, distributed by the Depositor's required beginning date, (April 1 following the calendar year end in which the Depositor reaches age 70 1/2). By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantial equal monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the joint and last survivor lives of the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period that may not be longer than the joint life and last survivor expectancy of the Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest has begun, distribution must continue to be made in accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has begun, the entire remaining interest will, at the election of the Depositor, or if the Depositor has not so elected, at the election of the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the life or life expectancy of the designated beneficiary or beneficiaries starting by December 31 of the year following the year of the Depositor's death. If, however, the beneficiary is the Depositor's surviving spouse, then this distribution is not required to begin before December 31 of the year in which the Depositor would have turned 70½.
*311 (c) Except where distribution in the form of an annuity meeting the requirements of section 408(b)(3) and its related regulations has irrevocably commenced, distributions are treated as having begun on the Depositor's required beginning date, even though payments may actually have been made before that date.
(d) If the depositor dies before his or her entire interest has been distributed and if the beneficiary is other than the surviving spouse, no additional case contributions or rollover contributions may be accepted in the account.
Both IRA agreements included an IRA Disclosure Statement, which states the following regarding withdrawals:
10. Federal Penalties. In addition to the taxes imposed on IRAs, distributions from IRAs are also potentially subject to a wide variety of penalties (excise taxes).
A. Penalty for Premature Distribution. Generally, if you take a distribution from your IRA before you reach the age 59 1/2 , you will owe, in addition to regular income taxes, a 10% excise tax on the taxable amount of the distribution. Exceptions to the 10% excise tax in the case of disability, death, a first home, qualified higher education expenses, distribution for health care expenses exceeding 7.5% of your adjusted gross income, distributions used to pay for health care insurance if you are unemployed, or if you agree to take a series of substantially equal periodic payments made over your life expectancy or the joint life expectancy of yourself and your designated beneficiary.
Based on the language of the IRA agreements, the Court finds that Debtors have an immediate right to withdraw the funds in the IRAs. The only impediment to the Debtors' right to withdraw is the 10% excise tax penalty referenced in the IRA Disclosure Statement.
III. Conclusions of Law.
The Trustee does not dispute that Debtors are entitled to exempt $10,681.00 of the IRAs pursuant to 11 U.S.C. § 522(d)(5). The only issue before the Court is whether Debtors are entitled to exempt the remaining $44,352.48 of the IRAs pursuant to 11 U.S.C. § 522(d)(10)(E), which provides:
(d) The following property may be exempted under subsection (b)(1) of this section:
(10) The debtor's right to receive
(E) a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless
(i) such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor's rights under such plan or contract arose;
(ii) such payment is on account of age or length of service; and
(iii) such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.
11 U.S.C. § 522(d)(10)(E).
In interpreting § 522(d)(10)(E), the Court is mindful of the familiar principle that "exemption statutes must be construed liberally in favor of the debtor and in light of the purposes of the exemption." In re Andersen, 259 B.R. 687, 690 (8th Cir. BAP 2001) (citing In re Wallerstedt, 930 F.2d 630, 631 (8th Cir.1991)). However, the liberal construction of exemption statutes is "for the purpose of achieving the *312 legislative intent, not to `extend the provisions of the legislative grant.'" Eilbert v. Pelican (In re Eilbert), 162 F.3d 523 (8th Cir.1998) (citations omitted). The purpose of exempting the right to payments under a pension, annuity, or similar plan is to "protect payments which function as wage substitutes after retirement." Id. The exemption is intended to protect payments that "support basic living requirements during the time of life when earning capacity is limited by age, disability, or illness." Id.
The Eighth Circuit Bankruptcy Appellate Panel has crafted a three prong test for the § 522(d)(10)(e) exemption. Specifically, the right to payment is exempt only to the extent the following conditions apply:
(1) they [the payments] are received pursuant to a "pension, annuity, or similar plan or contract,"
(2) "on account of illness, disability, death, age or length of service," and
(3) are reasonably necessary for the debtor's support or for the support of a dependent of the debtor.
Id. (citing generally to Eilbert, 162 F.3d at 527-28). Pursuant to Federal Rule of Bankruptcy Procedure 4003(c), the Trustee has the burden to demonstrate that the conditions of the exemption are not met. Id. If any of the conditions of the exemption are not met, Debtors may not claim the exemption.
A. Are the payments received pursuant to a pension, annuity, or similar plan or contract?
The Court must first determine whether the IRAs constitute pensions, annuities, or similar plans or contracts within the meaning of § 522(d)(10)(E). Section 522(d)(10)(E), particularly as applied to IRAs that qualify for tax-exempt status under § 408 of the Internal Revenue Code, has been the subject of much judicial interpretation, and a significant amount of judicial consternation.[1] It seems the number of different judicial interpretations of the § 522(d)(10)(E) exemption is limited only to the number of courts that analyze the issue.
At least four of the circuit courts of appeals have reached the conclusion that "some if not all IRAs were intended to be included in the phrase `similar plan or contract.' "In re Carmichael, 100 F.3d 375, 378 (5th Cir.1996); see also In re Dubroff, 119 F.3d 75 (2d Cir.1997); In re McKown, 203 F.3d 1188 (9th Cir.2000); In re Brucher, 243 F.3d 242 (6th Cir.2001). Although each of the four circuits employs a unique analysis of the issue, each of the four opinions contains a common thread the notion that Congress's mention of Internal Revenue Code § 408 in subparagraph (d)(10)(E)(iii) compels a holding that Congress intended for IRAs to be included in the § 522(d)(10)(E) exemption.
The Carmichael court noted that subparagraph (d)(10)(E)(iii) "specifically denies exemption to those `similar plans or contracts' that come within the proscription of (d)(10)(E)(i) and (d)(10)(E)(ii) and also fail to qualify under . . . § 408." Carmichael, 100 F.3d at 378. The Carmichael court surmised that if IRAs are not "similar plans or contracts," "there would be no exempt § 408 plans or contracts from which . . . § 408 plans or contracts could be exceptions." Id. The Carmichael court also proposed that IRAs should be included in the exemption because they are substitutes for future earnings; to *313 hold otherwise would penalize self-employed individuals who chose to depend on IRAs for retirement; and "exempting IRAs comports with the very policy furthered by exemptions-providing the honest debtor with a fresh start" by "protecting a debtor's future income stream." Id.
The Dubroff court, interpreting a New York statute materially identical to § 522(d)(10)(E), rejected the proposition that its "initial task in interpreting [the exemption] is to determine whether an IRA is a `similar plan or contract.'" Dubroff, 119 F.3d at 77. The court reasoned that "if [it] were to do so and reach the conclusion that an IRA was not a `similar plan or contract,' [subparagraph (iii)] would become surplusage." Id.
The McKown court, citing Carmichael and Dubroff, posed the rhetorical question "[w]hy would Congress talk about IRAs in the exception unless it included IRAs in the rule?" McKown, 203 F.3d at 1190. The court concluded that "[Congress] would not. . . . There could be no reason for legislators to exclude non-qualifying IRAs from the exemption, as the exception does, unless they intended that qualifying IRAs could be exempt." Id.
The most recent circuit court decision on the issue, Brucher, essentially follows the reasoning set forth in Carmichael. The Brucher court determined that "[i]f IRAs were never to be exempted under § 522(d)(10)(E), the inclusion in subsection (iii) of the reference to section 408 would have been utterly pointless." Brucher, 243 F.3d at 243.
Debtor urges the Court to follow the reasoning set forth in Carmichael, Dubroff, McKown, and Brucher, and hold that Debtor's IRA is a "similar plan or contract" under § 522(d)(10)(E). However, for the Court to so hold, it would have to ignore considerable Eighth Circuit precedent.
The Eighth Circuit first interpreted the phrase "similar plan or contract" in Huebner v. Farmers State Bank (In re Huebner), 986 F.2d 1222 (8th Cir.1993). In Huebner, the issue before the court was whether the debtor could claim an exemption in two flexible premium annuities. Both annuities qualified as IRAs under § 408 of the Internal Revenue Code. Huebner, 986 F.2d at 1224. The exemption issue was analyzed under an Iowa statute, as Iowa has opted out of the federal exemption scheme. The Iowa statute at issue was materially similar to § 522(d)(10)(E), allowing debtor to exempt the right to payment under "a pension, annuity, or similar plan or contract on account of illness, disability, death, age or length of service." Id. The Eighth Circuit later described the Iowa statute as "nearly identical" to and "borrowed from" § 522(d)(10)(E).[2]
Like the Debtors in this case, the debtor in Huebner had "the unfettered discretion to receive payments at any time . . . subject only to relatively modest penalties for withdrawals before age 59 1/2 ." Id. The court determined that the debtor's "access to and complete control over the timing of the annuity payments mean[s] that any payments received under the contracts would not be `on account of' his age." Id. Accordingly, the court determined that the IRAs were not "similar plans or contracts." In so holding, the court observed that the debtor "could have invested his savings in retirement annuities that prevented him from withdrawing funds prior to his reaching retirement age, in which event retirement payments under those annuities would have been exempt." Id. *314 Instead of choosing that option, the debtor "decided to invest in annuities that place virtually no restrictions on his right to withdraw." Id. The court found that "[s]uch assets are essentially `bank savings accounts' with favorable tax treatment." Id.
The Eighth Circuit Bankruptcy Appellate Panel (the "B.A.P.") analyzed the "similar plan or contract" language of the Iowa statute in Eilbert v. Pelican (In re Eilbert), 212 B.R. 954 (8th Cir. BAP 1997). The B.A.P. identified four factors a court may use to aid its determination of whether a particular annuity is a "similar plan or contract." First, a court may consider whether the debtor made contributions to the annuity over time. Id. at 958-59. Second, a court may consider whether the investment was purchased in isolation, or whether it included contributions by others. Id. at 959. Third, a court may look to the debtor's return on an investment. Id. Finally, a court may consider the extent to which the debtor may control the annuity. The court held that "if the debtor has complete discretion to withdraw the entire corpus, then the contract resembles a non-exempt investment." Id. The final factor was apparently conclusive to the B.A.P. Because the debtor "enjoyed unfettered discretion to liquidate the corpus at any time, subject only to contractual penalties assessed against principal," the B.A.P. determined that the annuity was not a "similar plan or contract." Id. at 959-60. In addition, the B.A.P. stated that "[a] contractual or tax penalty is not necessarily a limitation on withdrawal." Id. at 959.
The B.A.P. decision was affirmed by the Eighth Circuit. Eilbert v. Pelican (In re Eilbert), 162 F.3d 523 (8th Cir.1998). In affirming the B.A.P.'s decision, the court stated that "similar plan or contract" includes within the exemption "retirement plans or investments that are `created to fill or supplement a wage or salary void.'" Eilbert, 162 F.3d at 527. Because the debtor's annuity did not replace lost income, was not purchased with contributions over time as part of a long term retirement strategy, and was purchased as a pre-bankruptcy planning measure, the court determined that the annuity was not a "similar plan or contract" included within the exemption. Id.
The B.A.P. recently re-visited the "similar plan or contract" issue in Andersen v. Ries (In re Andersen), 259 B.R. 687 (8th Cir. BAP 2001). In Andersen, the debtor used a $40,000.00 inheritance to purchase an annuity in lieu of a retirement plan. Andersen, 259 B.R. at 689. Before reaching retirement age, and before filing bankruptcy, the debtor made the required election on the annuity to state the date on which she would begin receiving payments. Id. Upon making the election, the debtor lost the discretion to withdraw, settle, or surrender the corpus of the annuity. Id. At the time she filed bankruptcy, the debtor was retired and receiving monthly annuity payments. Id.
In Andersen, the B.A.P. looked to the analysis performed in Eilbert, and stated that "numerous factors may be considered" in determining whether an annuity is a "similar plan or contract." As in Eilbert, the B.A.P. stated that specific queries may include:
* Were the payments designed or intended to be a wage substitute?
* Were the contributions made over time? The longer the period of investment, the more likely the investment falls within the ambit of the statute and is the result of a long standing retirement strategy, not merely a recent change in the nature of the asset.
* Do multiple contributors exist? Investments purchased in isolation, outside *315 the context of workplace contributions, may be less likely to qualify as exempt.
* What is the return on investment? An investment which returns only the initial contribution with earned interest or income is more likely to be a nonexempt investment. In contrast, investments which compute payments based upon the participant's estimated life span, but which terminate upon the participant's death or the actual life span, are akin to a retirement investment plan. That is, will the debtor enjoy a windfall if she outlives her life expectancy? Is she penalized if she dies prematurely?
* What control may the debtor exercise over the asset? If the debtor has discretion to withdraw from the corpus, then the contract most closely resembles a nonexempt investment.
FN1. This was the obstacle that the debtor in Huebner v. Farmers State Bank (In re Huebner), 986 F.2d 1222 (8th Cir.), cert. denied, 510 U.S. 900, 114 S. Ct. 272, 126 L. Ed. 2d 223 (1993) could not overcome.
Andersen, 259 B.R. at 691.
The Eighth Circuit's analysis of the "similar plan or contract" issue stands in stark contrast to the Carmichael, Dubroff, McKown, and Brucher holdings, each of which suggests that IRAs fall within the "similar plan or contract" language per se. This Court is bound to follow the precedent of the Eighth Circuit.[3] Moreover, this Court is convinced that the Eighth Circuit analysis is the better rule of law.
The rule adopted in Carmichael, Dubroff, McKown, and Brucher (the "Per Se Exemption") requires leaps of statutory construction that this Court is not willing to make. The courts that have adopted the Per Se Exemption argue that holding otherwise would render the mention of § 408 in subparagraph (d)(10)(E)(iii) of § 522 surplusage. However, this Court believes that adopting a Per Se Exemption of IRAs would render the "similar plan or contract" language of paragraph (d)(10)(E) surplusage in cases involving IRAs.[4]
This Court, like another court that researched the issue, "cannot find anything within the Bankruptcy Code or the legislative history which manifests a Congressional intent to exempt retirement plans in toto." In re Dale, 252 B.R. 430, 434 (Bankr.W.D.Mich.2000). In fact, the evidence is quite to the contrary. If Congress intended to enact a Per Se Exemption of § 408 IRAs, it could have done so by simply stating that "a right to receive payment from an individual retirement annuity qualified for tax exempt status under 26 U.S.C. § 408 shall be exempt." In the absence of such a specific enactment, the Court refuses to infer that Congress manifested any such intent by mentioning *316 § 408 in subparagraph (iii) of § 522(d)(10)(E).
Statutory provisions, such as subparagraph (d)(10)(E)(iii), must be construed in pari materia, that is, in reference to one another. In re Zott, 225 B.R. 160, 167 (Bankr.E.D.Mich.1998). Statutory language must be evaluated in context, and the Supreme Court has observed that the plain meaning a court should attempt to discern is the plain meaning of the whole statute, not of isolated sentences. Beecham v. United States, 511 U.S. 368, 372, 114 S. Ct. 1669, 128 L. Ed. 2d 383 (1994). Courts should avoid interpretations that render statutory terms as surplusage. Babbitt v. Sweet Home Chapter of Communities for a Great Or., 515 U.S. 687, 698, 115 S. Ct. 2407, 132 L. Ed. 2d 597 (1995). If at all possible, courts should strive to read the provisions of a statute as harmonious with each other.
The Court concludes that the most harmonious interpretation of § 522(d)(10)(E) is that Congress intended to exempt § 408 IRAs to the extent they are "similar plans or contracts"; payable "on account of illness, disability, death, age or length of service"; and "reasonably necessary for the support of the debtor and any dependent of the debtor." This interpretation gives meaning to the requirements of paragraph (d)(10)(E), without ignoring the mention of § 408 in subparagraph (d)(10)(iii). Under this interpretation, no part of the statute is surplusage.[5]
Based on the Eighth Circuit's decision in Huebner, the Court concludes that the IRAs in this case are not "similar plans or contracts." In Huebner, the Eighth Circuit specifically held that an IRA is not a "similar plan or contract" where the debtor has unfettered discretion to withdraw from the corpus. Huebner, 986 F.2d 1222.
In this case, both Debtors' testimony and the language of the IRA agreements establish that Debtors may withdraw from the corpora of the IRAs at any time, subject only to a 10% excise tax penalty. The Court concludes that Debtors' IRAs are not "similar plans or contracts" within the meaning of § 522(d)(10)(E).
B. Are the payments on account of illness, disability, death, age, or length of service?
The Court's conclusion that the IRAs are not "similar plans or contracts" is sufficient to sustain the Trustee's objections to exemptions and grant the Trustee's motion for turnover. However, because the Court has heard evidence as to whether the right to payment under Debtors' IRAs are triggered by illness, disability, death, age or length of service, the Court will also issue findings on that issue.[6] The Eighth Circuit has held that in *317 order for an annuity to qualify for the exemption, "the debtor may not have access to or control over the timing of the annuity payments." Huebner, 986 F.2d at 1225; see also Eilbert, 162 F.3d at 527; Andersen, 259 B.R. at 693. Access to and control over the timing of annuity payments mean that any payments received are not "on account of age." Id. The ten percent federal tax penalty imposed on early withdrawals from a § 408 IRA has been described by the Eighth Circuit as "relatively modest," and does not constitute a restriction on the right to withdraw. Id.
In this case, the testimony of Debtors and the language of the IRA agreements establish that Debtors may withdraw from the IRAs at any time. Therefore, Debtors' right to payment under the IRAs is not on account of illness, disability, death, age, or length of service, and Debtors right to payment under the IRAs is not entitled to an exemption under § 522(d)(10)(E).
IV. Conclusion.
The IRAs do not meet the first two requirements of § 522(d)(10)(E). Accordingly, Debtors are not entitled to claim exemptions pursuant to that section. The Trustee's objection to exemptions and objections to amended exemptions are hereby SUSTAINED and the Trustee's motion for turnover is hereby GRANTED, provided that Debtors are entitled to their "wildcard exemption" in the total amount of $10,681.00 pursuant to 11 U.S.C. § 522(d)(5).
IT IS SO ORDERED.
NOTES
[1] One court has described the language of § 522(d)(10)(E) as "seemingly irreconcilable" and requiring a navigation between the "`Scylla of rigid construction' and the `Charybdis of meaninglessness.'" In re Dale, 252 B.R. 430, 432 (Bankr.W.D.Mich.2000).
[2] The Court recognizes that the Iowa statute lacked the internal reference to § 408 that influenced the holdings in Carmichael, Dubroff, McKown, and Brucher.
[3] None of the Eighth Circuit cases cited herein involve both the federal § 522(d)(10)(E) exemption and a § 408 IRA. Nonetheless, the Court finds no indication in the Eighth Circuit opinions that the court would forego its analysis of the "similar plan or contract" requirement merely because subparagraph (iii) of § 522(d)(10)(E) mentions § 408.
[4] Moreover, the Court perceives an inconsistency in the manner the Carmichael court applied the Per Se Exemption. Specifically, the Carmichael court dispensed of the "similar plan or contract" and "on account of illness, disability, death, age, or length of service" requirements of paragraph (d)(10)(E), but nonetheless imposed the "reasonable necessary for the support of the debtor and any dependent of the debtor" requirement of (d)(10)(E). If the Carmichael court determined that (d)(10)(E)(iii) requires the exemption of IRAs per se, then all IRAs, even those not reasonably necessary for support, should be exempt. The Court does not believe that Congress intended such a result.
[5] One might argue that this interpretation renders IRAs, as they exist today, non-exemptible de facto because IRAs are standardized agreements, allowing for preset payment with a tax penalty imposed for withdrawal before age 59 1/2 . Therefore, it may be that few, if any, IRAs meet the "on account of" requirement. In fact, one court has held that IRAs, as they exist today, are non-exempt per se under § 522(d)(10)(E). In re Zott, 225 B.R. at 168. However, this Court finds no reason why IRAs that meet the "on account of" requirement cannot be drafted. There is nothing in the Internal Revenue Code or tax regulations to prevent a person from including a spendthrift provision in his IRA contract that takes away discretion to access the corpus of the account. Id. If, as the Zott court believed, it is "unlikely" that individuals would insist on such a provision, and if Congress determines that all IRAs should be exempt, then Congress should amend § 522 to exempt all IRAs. The Court must assiduously avoid the temptation to "fix" statutes. In re Widdicombe, 269 B.R. 803, 807 (Bankr.W.D.Ark.2001).
[6] Other Courts have disregarded this requirement with regard to § 408 IRAs. See Brucher, 243 F.3d at 244. For the reasons set forth previously in this opinion, this Court will adhere to Eighth Circuit precedent and give meaning to all of the requirements of § 522(d)(10)(E). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1796846/ | 687 So. 2d 1180 (1996)
Howard Monteville NEAL
v.
STATE of Mississippi.
No. 92-KA-00601-SCT.
Supreme Court of Mississippi.
August 8, 1996.
Rehearing Denied November 14, 1996.
*1181 James W. Craig, Phelps Dunbar, Jackson, James L. Sultan, Rankin & Sultan, Boston, MA, Charles R. Bliss, Gainesville, FL, for Appellant.
Michael C. Moore, Attorney General, Marvin L. White, Jr, Assistant Attorney General, Charlene R. Pierce, Sp. Asst. Attorney General, Jackson, for Appellee.
En Banc.
JAMES L. ROBERTS, Jr., Justice, for the Court:
Howard Monteville Neal was convicted of the capital murder of Amanda Joy Neal on February 4, 1982, and on that same day, given a sentence of death. The conviction and sentence were affirmed by this Court in Neal v. State, 451 So. 2d 743 (Miss. 1984), cert. denied, Neal v. Mississippi, 469 U.S. 1098, 105 S. Ct. 607, 83 L. Ed. 2d 716 (1984). Neal sought post-conviction review of his conviction and sentence, and in Neal v. State, 525 So. 2d 1279 (Miss. 1987), this Court remanded the case to the Circuit Court of Lawrence County for an evidentiary hearing on Neal's claim that he was denied the right to testify in his own behalf at trial. On March 30, 1992, the trial court conducted an evidentiary hearing and found that Neal had not been denied the right to testify in his own behalf. It is from this decision that Neal now appeals, asserting the following errors:
1. THE SUBMISSION TO THE SENTENCING JURY OF THE "ESPECIALLY HEINOUS, ATROCIOUS, OR CRUEL" AGGRAVATING CIRCUMSTANCE REQUIRES THAT THE DEATH SENTENCE IN THIS CASE BE VACATED.
2. THE TRIAL COURT ERRED IN DENYING PETITIONER A HEARING TO DETERMINE HIS COMPETENCY TO PARTICIPATE IN THE EVIDENTIARY HEARING ORDERED BY THIS COURT.
3. THE CIRCUIT JUDGE ERRED IN FAILING TO RECUSE HIMSELF FROM THIS CASE.
4. THE CIRCUIT COURT ERRED IN EXCLUDING THE TESTIMONY OF THE PETITIONER'S EXPERT.
5. THE CIRCUIT COURT USED AN ERRONEOUS LEGAL STANDARD IN DENYING RELIEF.
STATEMENT OF THE FACTS
An evidentiary hearing was held on March 30, 1992, some ten years after trial, to determine whether Neal was denied the right the testify in his own behalf during his capital murder trial at which he was sentenced to death. Several motions were filed by the State, as well as by Neal and ruled on by the trial court.
The State filed a motion for summary judgment and a renewed motion for summary judgment which were denied by the trial judge. At the hearing, Neal's counsel renewed several motions previously ruled on by the trial judge. Neal filed a motion for recusal which Judge Prichard denied. Neal argued that if available they would call the judge as a witness. The motion was denied, but the trial judge did allow a deposition which he had given earlier to be placed into evidence. Neal's counsel also renewed a motion for a separate competency hearing to determine Neal's competency to proceed with the evidentiary hearing. The trial court had *1182 denied the original motion which sought to have a jury impaneled to determine Neal's competence. The trial court again denied the motion stating:
it would take a psychologist or psychiatrist to say there has been some change of mental ability and competency since the trial to date. And that has never been done. It is still the same grounds that were alleged to have been present at the time of trial. The Supreme Court has in their opinion satisfied themselves that he was at that time competent even though it was admitted he is mentally retarded.[1] The Court finds no new evidence of new psychiatric and/or psychological problems which have evolved since the date of the conviction to the date of today.
After the trial judge ruled on these motions they proceeded with the hearing. All the witnesses also gave depositions before the hearing which were entered into evidence although they were not read into the record. After listening to all the testimony and examining the evidence, the trial court denied Neal's motion for post-conviction collateral relief saying he had not met his burden of proof.
DISCUSSION
1. WHETHER THE SUBMISSION TO THE SENTENCING JURY OF THE "ESPECIALLY HEINOUS, ATROCIOUS, OR CRUEL" AGGRAVATING CIRCUMSTANCE REQUIRES THAT THE DEATH SENTENCE IN THIS CASE BE VACATED.
First, Neal argues that the especially heinous, atrocious, or cruel aggravating circumstance instruction given to the jury requires his sentence of death to be reversed and a new sentencing hearing held because of the U.S. Supreme Court's decisions in Maynard v. Cartwright, 486 U.S. 356, 108 S. Ct. 1853, 100 L. Ed. 2d 372 (1988), and Clemons v. Mississippi, 494 U.S. 738, 110 S. Ct. 1441, 108 L. Ed. 2d 725 (1990).
This is an appeal from an evidentiary hearing; therefore, this issue is not properly before this Court and will not be discussed. See Walton v. State, 666 So. 2d 752, 753 (Miss. 1995); Billiot v. State, 655 So. 2d 1, 17 (Miss. 1995), cert. denied, ___ U.S. ___, 116 S. Ct. 818, 133 L. Ed. 2d 762 (1996); Culberson v. State, 456 So. 2d 697 (Miss. 1984).
2. WHETHER THE TRIAL COURT ERRED IN DENYING PETITIONER A HEARING TO DETERMINE HIS COMPETENCY TO PARTICIPATE IN THE EVIDENTIARY HEARING ORDERED BY THIS COURT.
Neal contends that the trial court erred in not granting him a hearing to determine his competence to participate in the evidentiary hearing. When this Court remanded this case for an evidentiary hearing, Neal filed a motion requesting a competency hearing. The trial court denied the motion, finding it did not have jurisdiction over the matter. This Court originally denied a request by Neal for an interlocutory review of this issue. Neal then filed with this Court a Supplemental Application for Leave to File Motion to Vacate Judgment and Death Sentence. In denying this application this Court held:
Furthermore, the jurisdiction of the Circuit Court of Lawrence County in this cause extends to the issue of Neal's present competence vel non, and that court may entertain such a claim at any stage of the proceedings, and may conduct an evidentiary hearing in response to a claim that Neal is presently incompetent to proceed if satisfied that such a hearing is warranted under the applicable facts and legal standards.
Neal v. State, No. 03-DP-0036 (Miss., July 11, 1990) (unpublished order) (emphasis added). Subsequently, Neal again filed with the lower court a motion for hearing on competency to proceed. The Circuit Court again denied the motion in an order stating in part:
After having considered the holding of the Mississippi Supreme Court in this matter and the reports received from the experts *1183 that have examined petitioner, the Court finds that no hearing is warranted under the factual circumstances and legal standards applicable in such cases.
Neal renewed the motion at the evidentiary hearing. The trial court allowed into evidence the Third Supplemental Affidavit of June Kaufman, Ph.D., but once again denied the motion stating in part:
[T]he Court does agree with Mr. White's assessment that it would take a psychologist or psychiatrist to say there has been some change of mental ability and competency since the trial to date. And that has never been done. It is still the same grounds that were alleged to have been present at the time of trial. The Supreme Court has in their opinion satisfied themselves that he was at that time competent even though it was admitted he is mentally retarded. The Court finds no new evidence of new psychiatric and/or psychological problems which have evolved since the date of the conviction to the date of today. So those motions be and the same are hereby overruled.
Neal correctly argues that a defendant must be competent at all stages of the criminal process, "whether trial, Gammage v. State, 510 So. 2d 802 (Miss. 1987); appeal, Tarrants v. State, 231 So. 2d 493 (Miss. 1970); post-conviction, Rumbaugh v. Procunier, 753 F.2d 395 (5th Cir.1985); or at the point of execution, Billiot v. State, 478 So. 2d 1043 (Miss. 1985), cert. denied, 475 U.S. 1098, 106 S. Ct. 1501, 89 L. Ed. 2d 901 (1986)."
In his brief, Neal cites authority concerning when a hearing should be held on a defendant's competency to stand trial. See Emanuel v. State, 412 So. 2d 1187, 1188 (Miss. 1982). He also points out the test to be used to determine if a defendant is competent to stand trial. See Dusky v. United States, 362 U.S. 402, 80 S. Ct. 788, 4 L. Ed. 2d 824 (1960); Gammage v. State, 510 So. 2d 802 (Miss. 1987); Jaquith v. Beckwith, 248 Miss. 491, 157 So. 2d 403 (1963). Neal goes on to cite numerous other authority as to a defendant's right to a hearing on his competence to stand trial. However, he gives no authority concerning a petitioner's right to a competency hearing at a later stage in the criminal process when that person was given a pretrial competency hearing and found competent to stand trial. That is the situation that concerns us here.
Neal was given a competency hearing prior to his murder trials and found competent to stand trial despite his mental retardation. In both his direct appeal and his application for post-conviction relief before this Court, Neal attempted to put on proof of his lack of mental capacity. This Court held,
The problem with these charges is that they are substantially redundant or cumulative when compared with the evidence Neal offered at trial. Specifically, Neal now wants to present evidence of his lack of mental capacity, a fact said to go to the voluntariness of his confession and to be in mitigation of sentence. But he went into these same matters at trial... . Because it is cumulative, what Neal alleges and purports to show now that counsel should have developed and proved simply does not amount to a substantial showing of denial of a state or federal right. Miss. Code Ann. § 99-39-27(5).
Neal v. State, 525 So. 2d 1279, 1282-83 (Miss. 1987).
The situation here is similar to that in Billiot v. State, 478 So. 2d 1043 (Miss. 1985) cert. denied, 469 U.S. 1230, 105 S. Ct. 1232, 84 L. Ed. 2d 369 (1985). There Billiot claimed he was presently insane and therefore could not be executed. Miss. Code Ann. § 99-19-57(2)(b) (Supp. 1995), states:
For the purposes of this subsection, a person shall be deemed insane if the court finds the convict does not have sufficient intelligence to understand the nature of the proceedings against him, what he was tried for, the purpose of his punishment, the impending fate which awaits him, and a sufficient understanding to know any fact which might exist which would make his punishment unjust or unlawful and the intelligence requisite to convey such information to his attorney or the court.
Billiot's claim lacked merit because he failed to show supervening present insanity as required under Miss. Code Ann. § 99-19-57(2)(a). All Billiot's evidence went to show *1184 that his mental condition existed prior to trial. He did not even argue that his mental condition developed after his trial. This Court held,
It follows in these circumstances that the action of the trial court in determining that Billiot was sane and competent is also res judicata as to the issue of his present sanity, as the matter is raised in this petition. These issues were thoroughly litigated at trial and upon direct appeal and may not be litigated again by way of post conviction writ.
Billiot, 478 So.2d at 1045. See Miss. Code Ann. § 99-39-21(2)(3) (Supp. 1993); See also Mitchell v. State, 179 Miss. 814, 176 So. 743 (1937); Johnson v. State, 508 So. 2d 1126 (Miss. 1987); Johnson v. Cabana, 818 F.2d 333, 340 (5th Cir.1987), cert. denied, 481 U.S. 1061, 107 S. Ct. 2207, 95 L. Ed. 2d 861 (1987).
Neal makes no assertion that there has been any change in his mental condition since the trial in this case. In fact, the evidence presented shows that he had been diagnosed as mentally retarded as early as age eleven when he was admitted to the Ellisville State School. Neal was found competent at a pretrial competency hearing, and he has offered no evidence that his condition has changed in any way since that time. This issue is therefore without merit.
3. WHETHER THE CIRCUIT JUDGE ERRED IN FAILING TO RECUSE HIMSELF FROM THIS CASE.
Neal requested on several separate occasions that the trial judge recuse himself from presiding over the evidentiary hearing in this case. The trial judge denied the motion to recuse himself in each instance, but allowed his deposition into evidence to preserve the record. The trial judge stated that he had reviewed the deposition of the witnesses and
the Court has no independent recollection that differs in any wise, shape, form, or fashion with what they have asserted, and the Court has nothing before it to show that the Movant herein has any disagreement with any of the recollections of those parties. And the Court is open for any factual proof to the contrary, and the Court assumes that what Mr. Neal may be complaining of may not even have anything to do with the time period that the depositions and my recollection go to, and may be entirely different.
Neal argues that Judge Prichard had personal knowledge of evidentiary facts which went to proving one of the central aspects of Petitioner's claim, that given his mental retardation and the circumstances surrounding his attempt to assert his rights, any waiver of his right to testify or address the jury was not knowing, intelligent, or voluntary. The issue before the court during the evidentiary hearing was whether Neal was denied the right to testify on his own behalf during the trial for the murder of Amanda Joy Neal.
It is undisputed that it was brought to the attention of the trial court that Neal wanted to take the witness stand. There was a conference held between Judge Prichard, Neal and the attorneys for both sides. During this conference, Judge Prichard agreed to allow Neal to testify, but requested that he confer further with his attorneys. Judge Prichard was not present during the meeting between Neal and his attorneys. After conferring privately with Neal, his attorneys informed the Court that Neal had decided not to testify.
There was some conflicting testimony regarding the circumstances surrounding Neal's decision not to testify. All the witnesses agreed that the conference concerning Neal's desire to testify occurred. Everyone except Joe Dale Walker remembered it occurring during the first trial. With the exception of John Clay, everyone remembered Neal wanted to address the jury for the purpose of requesting the death penalty. No one remembered how long the conference between Neal and his attorneys lasted, but all agreed that it was not a long conference. There was no dispute that Judge Prichard was willing to let Neal testify after he conferred with his attorneys. Everyone agreed that Judge Prichard was not present during the meeting between Neal and his attorneys after which the court was informed Neal had changed his mind.
*1185 This Court addressed the issue of recusal in Collins v. Joshi, 611 So. 2d 898 (Miss. 1992). There it was held:
The standard by which the Court determines if a judge should have disqualified him or herself, is an objective standard under Canon 3. "A judge is required to disqualify himself if a reasonable person, knowing all the circumstances, would harbor doubts about his impartiality." Rutland v. Pridgen, 493 So. 2d 952, 954 (Miss. 1986); Jenkins, 570 So.2d at 1192; Collins, 543 So.2d at 166. The presumption is "that a judge, sworn to administer impartial justice, is qualified and unbiased. To overcome the presumption, the evidence must produce a `reasonable doubt' (about the validity of the presumption)[.]" Turner v. State, 573 So. 2d 657, 678 (Miss. 1990). When a judge is not disqualified under the constitutional or statutory provisions, "the propriety of his or her sitting is a question to be decided by the judge and is subject to review only in case of manifest abuse of discretion." Buchanan v. Buchanan, 587 So. 2d 892 (Miss. 1991); Turner, 573 So.2d at 677; Ruffin v. State, 481 So. 2d 312 at 317 (1985) (quoting McLendon v. State, 187 Miss. 247, 191 So. 821, 823 (1939)).
Under the appropriate standard, the judge is presumed qualified and unbiased. This presumption may only be overcome by evidence showing beyond a reasonable doubt that the judge was biased or not qualified. If a reasonable person, knowing all the circumstances, would doubt the judge's impartiality, the judge is required to recuse him or herself from the case.
Collins, 611 So.2d at 901. See Code of Judicial Conduct, Canon 3(C)(1)(a).
Neal cites Collins v. Dixie Transport, Inc., 543 So. 2d 160 (Miss. 1989), wherein this Court held that the trial judge erred in not recusing himself from the case. That case differs from the case sub judice. In Collins v. Dixie Transport, "the trial judge was in the room during the critical settlement conference." Throughout the hearing the trial judge "felt compelled to testify." "He went so far as to request the court clerk to swear him in so he could be questioned, but the attorneys balked at that." In reversing the case, this Court held:
On the record before us, the trial judge was both a witness to and adjudicator of fact issues with respect to which he was obliged to have played but one role. As those matters went to what was central the credibility of Curtis Lee Collins and his sons, we may but reverse the order enforcing settlement.
543 So.2d at 167.
Here, Judge Prichard was not present during the critical conference between Neal and his attorneys. His only personal knowledge was concerning the events that led up to that meeting between client and counsel. Regardless of what Neal would have us believe, those events do not concern us here. It is undisputed that it was brought to the trial court's attention that Neal wanted to testify. However, Judge Prichard had no personal knowledge concerning whether or not Neal's attorneys refused, against his will, to allow him to testify. It is that issue that was the subject of the evidentiary hearing.
Neal argues that the events leading up to the time when Neal's attorneys informed the court that he had decided not to testify go to show that Neal did not make a voluntary, knowing and intentional waiver of that right. See Hollenbeck v. Estelle, 672 F.2d 451, 453 (5th Cir.1982). This is just another attempt to put the matter of Neal's competence into issue. The issue of Neal's competence to stand trial was decided at a pre-trial hearing and the finding has previously been affirmed by this Court.
Judge Prichard had no personal knowledge concerning the issue before the court during the evidentiary hearing. Neal has not offered evidence to produce a reasonable doubt as to the trial judge's impartiality. From the facts presented it cannot be said that there was a manifest abuse of the trial court's discretion in failing to recuse himself from the evidentiary hearing.
4. WHETHER THE CIRCUIT COURT ERRED IN EXCLUDING THE TESTIMONY OF THE PETITIONER'S EXPERT.
*1186 Neal contends that the trial court's refusal to allow Dr. Kaufman to testify was reversible error. He argues she was an expert and would have offered relevant testimony, and therefore, excluding that testimony was a violation of Miss.R.Evid. 702. See Hall v. Hilbun, 466 So. 2d 856, 874 (Miss. 1985); Hardy v. Brantley, 471 So. 2d 358, 365-69 (Miss. 1985). See also, Hecklar v. State, 503 So. 2d 269 (Miss. 1987); Hooten v. State, 492 So. 2d 948 (Miss. 1986); Henry v. State, 484 So. 2d 1012 (Miss. 1986).
This entire argument hinges on the contention that due to his mental capacity, Neal did not make a knowing and voluntary waiver of his right to testify. Again this goes to his competence. The trial court refused to allow Dr. Kaufman's testimony, stating that this same matter was gone into at trial and the evidence presented at the hearing was cumulative and did not "amount to a substantial showing of denial of the State or Federal right." The trial court held:
Now, the Court finds from this proffer that this would go to Neal's entire competence and could not be extracted for the sole purpose of whether or not he understood his right to testify or whether or not he was, quote, denied the right to testify because he did not have the competence to make that decision. The one point that I think is totally being missed here, that even if the Court admitted this testimony, the opinion of the Supreme Court on Page 11 and the prior filings in this court state that Neal claims that he was denied the right to take the witness stand to testify in his own behalf. And obviously because he would have mitigated the sentence that was ultimately imposed on him by the jury. And the Court finds that had Mr. Neal been allowed to testify to what is now before the court, and that is, that he wanted to go and ask the jury to give him the death penalty, the result would have been no change in results in that the jury did exactly that what Mr. Neal, from the proof before this court, was seeking to want to testify to.
This court finds that usually to obtain relief the Movant in a trial such as this, as reiterated on Page 7 of the Supreme Court (sic), is that Neal has the burden to show a reasonable probability that the result of his trial would have been different. And this court finds that from this point on this witness, without any further bases (sic) or any other incidences (sic) that could be utilized to show that he was denied the right to testify to some facts or facet of the case that would have produced a different result, that this is not a matter that would actually be complained of by the Movant. So for this reason the relevancy of the testimony, the fact that it has already been ruled on by the Mississippi State Supreme Court, and the fact that it encompasses Mr. Neal's entire competency throughout the entire trial, all of this again is just a rehashing of the same matters that have been before the Supreme Court and ruled upon by the members of the Supreme Court, and not assigned to this court for hearing. So for all these reasons the testimony of this witness will not be allowed, and the objection to her testimony is sustained.
Dr. Kaufman's testimony was being offered to showed that because of Neal's mental retardation, he could not make a knowing, intelligent or voluntary waiver of his right to testify. Again this goes to his overall competence to stand trial and cannot be separated to encompass only the issue before us now. Neal was found competent to stand trial and all the evidence presented was merely cumulative. This issue is res judicata under Miss. Code Ann. § 99-39-21(3) (Supp. 1993). "Rephrasing direct appeal issues for post-conviction purposes will not defeat the procedural bar of res judicata." Lockett v. State, 614 So. 2d 888, 893 (Miss. 1992), cert. denied, 510 U.S. 1040, 114 S. Ct. 681, 126 L. Ed. 2d 649 (1994); Irving v. State, 498 So. 2d 305 (Miss. 1986), cert. denied, 481 U.S. 1042, 107 S. Ct. 1986, 95 L. Ed. 2d 826 (1987); Gilliard v. State, 446 So. 2d 590 (Miss. 1984). This issue is without merit.
5. WHETHER THE CIRCUIT COURT USED AN ERRONEOUS LEGAL STANDARD IN DENYING RELIEF.
Neal contends that the trial court erroneously applied a harmless error analysis in denying him post-conviction relief. The *1187 Uniform Post-Conviction Collateral Relief Act, Miss Code Ann § 99-39-23(7) (Supp. 1995), states:
No relief shall be granted under this chapter unless the prisoner proves by a preponderance of the evidence that he is entitled to such.
See Moore v. State, 587 So. 2d 1193, 1196 (Miss. 1991); Schmitt v. State, 560 So. 2d 148, 151 (Miss. 1990); McClendon v. State, 539 So. 2d 1375 (Miss. 1989). If the trial court applied the wrong legal standard in coming to its decision, this Court will not hesitate to reverse and will give no deference to the findings of the trial court. Schmitt, 560 So.2d at 151; McClendon, 539 So.2d at 1377; Detroit Marine Engineering v. McRee, 510 So. 2d 462, 467 (Miss. 1987); Bell v. City of Bay St. Louis, 467 So. 2d 657, 661 (Miss. 1985).
The trial court in making its ruling stated that Neal as the Movant had the burden of proof. After examining the depositions and listening to the testimony including that proffered by Dr. Kaufman, the court found as a matter of fact:
One: That there has been no change in the mental retardation of the Movant since the commission of the crime and the trial held thereon.
Two: That there has been no change as to the competency of the Movant either in a psychiatric vein or in a psychological vein or as to mental retardation. That the Court finds that there is absolutely no proof that the Defendant is in anywise in any changed condition today that he was in February of 1982 during the trial or in 1981 during the commission of the crime.
Three: That taking all of the testimony before the Court, there is absolutely no proof that the Defendant was ever denied the right to testify. That the only difference in the testimony before the Court as to when a certain request occurred and whether or not it was during the first trial or the second trial, I believe Mr. Walker was the only one who thought it was during the second trial, and I believe everyone agreed it was during the sentencing phase, and I believe everyone agreed that the thing that was to be testified to was that Mr. Neal wanted to ask the jury to give him the death penalty, a fact the Court finds that the jury saw fit to do without Mr. Neal being required to make that request.
The next finding of fact the Court makes is that from all of the testimony it is undisputed that had the Defendant decided to go forward with his testimony, the testimony that he allegedly desired to give would have been totally detrimental to the Defendant's case and certainly under no stretch of the imagination would have resulted in a positive result to the Defendant. And the Court finds that there is absolutely no reasonable probability that the result of his trial would have been any different than the result that was obtained.
From the foregoing findings of fact the Court concludes as a matter of law that the Plaintiff or Movant in this Post-Conviction Collateral Relief Act has wholly failed to meet his burden of proof and to have this Court grant the relief sought. That this Court finds that the motion should be by this court denied; and it is therefore ordered and adjudged that all relief sought by the Movant herein be and the same is hereby denied and the Motion for Post-Conviction Collateral Relief is hereby overruled.
The trial court did make a finding of fact that if Neal had been denied the right to testify under the circumstances it would have been harmless error. However, this does not prove that he used "harmless error" as the legal standard in reaching his decision to deny relief. The trial court made several findings of fact before giving its final decision. Although he did not specifically state what Neal's burden of proof was, the trial judge stated that there was "absolutely no proof that the Defendant was denied the right to testify." He went on to hold that as a matter of law Neal failed to meet his burden of proof under the Post-Conviction Collateral Relief Act.
The trial court was correct in stating that Neal did not meet his burden of proof of showing by a preponderance of the evidence that he was denied the right to testify. Neal did not testify at the evidentiary hearing nor *1188 did he offer any evidence other than Dr. Kaufman's proffered testimony to show he did not voluntarily waive the right to testify. Both Joe Dale Walker and John Clay testified that any decision not to testify was ultimately made by Neal. Neal's sole argument lies in his attempt to once again bring his competence into issue. This issue is without merit.
CONCLUSION
Finding that the issue concerning the use of the heinous, atrocious, and cruel aggravating circumstance at Neal's capital murder trial is not properly before the Court on this appeal from an evidentiary hearing, we do not address that issue. We find all other issues presented by Neal to be without merit, and therefore, we affirm the lower court's decision denying Neal's motion for post-conviction relief.
LOWER COURT'S DENIAL OF POST CONVICTION RELIEF AFFIRMED.
DAN LEE, C.J., PRATHER and SULLIVAN, P.JJ., and PITTMAN, BANKS, SMITH and MILLS, JJ., concur.
McRAE, J., concurs in result only.
NOTES
[1] See Neal v. State, 451 So. 2d 743, 751-56 (Miss. 1984); Neal v. State, 525 So. 2d 1279, 1282-83 (Miss. 1987). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1806247/ | 744 So. 2d 266 (1999)
Richard J. LEUER, Jr.
v.
CITY OF FLOWOOD.
No. 98-KA-00062-SCT.
Supreme Court of Mississippi.
June 24, 1999.
Rehearing Denied September 23, 1999.
*267 William P. Featherston, Jr., Jackson, Attorney for Appellant.
Michael A. Boland, Jackson, Attorney for Appellee.
EN BANC.
BANKS, Justice, for the Court:
¶ 1. Richard Leuer appeals an October 1, 1997, order of the Rankin County Circuit Court affirming his conviction for driving under the influence of intoxicating liquor pursuant to then applicable Miss. Code Ann. § 63-11-30(1)(a) (1995) and careless driving in violation of Miss.Code Ann. § 63-3-1213 (1996). Leuer now asks this Court to consider for the first time whether both statutes are facially void for vagueness and thus in violation of the due process clauses of the Fifth and Fourteenth amendments to the United States Constitution and Art. 3, § 14 of the Mississippi Constitution of 1890. We conclude that both § 63-11-30(1)(a) and § 63-3-1213 provide drivers with adequate notice of the conduct for which they are subject to be penalized. Thus, the judgment of the circuit court is affirmed.
I.
¶ 2. Richard Leuer, a licensed driver in the State of Indiana, was taken into custody and charged with DUI and careless driving after he was stopped on Old Brandon Road in Rankin County at 2:30 a.m. on November 11, 1995. Officer Brian Harper of the Flowood Police Department stopped Leuer after he observed his vehicle run off the road onto the shoulder, make a left turn and then go out into the middle of the roadway. He testified that Leuer smelled strongly of alcohol, his eyes were glassy and he was having a little difficulty with his speech. Leuer admitted that he had had two or three bourbon and Cokes earlier in the evening, around 10:00 or 10:30 p.m. He denied having anything to drink subsequently. At the time he was stopped by Officer Harper, Leuer testified that his date was sick and he had been looking for a place by the side of the road for her to throw up.
¶ 3. At the police station, Leuer stated that he tried to blow into the intoxilyzer but could not make it register. He recalled that Harper told him that he was "huffing" it. Harper contends that Leuer refused to take the breath test. Leuer's test card indicated that no test results were obtained. No blood test was requested or given.
¶ 4. Leuer filed a motion to dismiss the charges on June 14, 1996, asserting that the laws under which he was charged were unconstitutionally vague "in that they fail to give adequate notice of the conduct they seek to prohibit." A bench trial was held on August 21, 1996, in the County Court of Rankin County, and Leuer was found guilty as charged. He was sentenced to pay a $50 fine and a $19 assessment for the careless driving charge. For the DUI charge, he further was ordered to pay an $800 fine plus assessments of $137, to attend the MASEP driving course in Mississippi or a similar course in his home state of Indiana, where he was licensed, as well as one session of the Victim's Impact Response Seminar, and to serve a term of forty-eight hours in the Rankin County Jail, with credit given for the twelve hours he was detained after his arrest. Leuer then appealed the County Court judgment to the Circuit Court of Rankin County, where his conviction was affirmed.
II.
¶ 5. Leuer first asserts that Miss. Code Ann. § 63-11-30(1)(a)(1995) (as enacted by 1995 Miss. Laws Ch. 540), the statute under which he was convicted, fails to adequately advise citizens as to how much an individual may drink without subjection to criminal penalties. He further contends that it does not provide law enforcement officers with adequate guidance *268 in its enforcement and thus is unconstitutionally vague. Miss.Code Ann. § 63-11-30(1)(a) proscribes the "operation of vehicle while under the influence of intoxicating liquor, drugs or controlled substances, or other substances impairing ability to operate vehicle or with blood alcohol concentrations above specified levels," stating that "(1) It is unlawful for any person to drive or otherwise operate a vehicle within this state who (a) is under the influence of intoxicating liquor...."
¶ 6. Miss.Code Ann. § 63-11-30(1)(a) comes into play primarily in those instances where there were no accurate test results, where an individual tested below the.10% level [at which point one is deemed per se to be in violation of the DUI law pursuant to Miss.Code Ann. § 63-11-30(1)(c)], or where a DUI test has been refused.
¶ 7. Presiding Justice Sullivan has explained the distinction between common law DUI and § 63-11-30(1)(c) thusly:
The distinction between "common law" DUI and DUI per se was made in Hedrick v. State, 637 So. 2d 834 (Miss. 1994). In interpreting 63-11-30(1) and (4) in an attempt to analyze whether Hedrick violated 63-11-30(4) for purposes of the felony when one kills or maims a victim while violating 63-11-30(1), Hedrick stated that the elements are "operating a vehicle under the influence of intoxicating liquor, or operating a vehicle with ten one-hundredths percent or more...." Hedrick, 637 So.2d at 837. See also Fisher v. City of Eupora, 587 So. 2d 878 (Miss.1991). By definition, the two subsections of 63-11-30(1) pertaining to common law DUI and per se DUI require different standards for determining a violation of the separate crime:
[I]t is the opinion of this office that the first block, charging DUI under Sec. 63-11-30(1)(a), should be checked by the officer either when test results are not available or the results that are available show a BAC [blood alcohol content] of less than .10%, and when the officer has probable cause to believe that the person is driving or operating a vehicle under circumstances indicating that his ability to so drive or operate the vehicle has been impaired by the ingestion of intoxicating liquor. The third block, charging an offense under Sec. 63-11-30(1)(c), should be checked when test results are available and are sufficient to give the officer probable cause to believe that the person is driving or operating a vehicle with a BAC of .10% or more.
Young v. City of Brookhaven, 693 So. 2d 1355, 1363-64 (Miss.1997) (Sullivan, P.J., concurring in part, dissenting in part)(quoting DUI Traffic Citation, Op. Att'y Gen. (Jan. 6, 1987)).
¶ 8. "Specifically, 63-11-30(1)(c) is designated for persons testing above .10 percent blood alcohol content; 63-11-30(1)(a) is either for persons not tested or for persons not registering above .10 percent blood alcohol level." Id. at 1363.
¶ 9. The void for vagueness doctrine states, "[A] statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process." Meeks v. Tallahatchie County, 513 So. 2d 563, 565 (Miss.1987) (quoting Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S. Ct. 126, 127-28, 70 L. Ed. 322, 328 (1926)). "[A] criminal statute is unconstitutional under the due process clause of the Fourteenth Amendment if it is so vague and uncertain that it does not inform those subject to it what acts it is their duty to avoid, or what conduct on their part will render them liable to its penalties.... `The test is whether the language conveys sufficiently definite warning as to the proscribed conduct when measured by common understanding and practices.'" Cassibry v. State, 404 So. 2d 1360, 1367-68 (Miss.1981) (quoting Jordan v. DeGeorge, 341 U.S. *269 223, 231-32, 71 S. Ct. 703, 708, 95 L. Ed. 886 (1951)); see also Reining v. State, 606 So. 2d 1098, 1103 (Miss.1992).
¶ 10. In Government of Virgin Islands v. Steven, 134 F.3d 526 (3rd Cir.1998), the Third Circuit noted that courts have consistently rejected constitutional vagueness challenges to statutes containing the term "under the influence." Id. at 528; see People v. Seefeldt, 112 112 Ill.App.3d 106, 67 Ill. Dec. 947, 445 N.E.2d 427 (1983)(upholding constitutionality of a statute prohibiting driving "under the influence of intoxicating liquor"); State v. Campbell, 9 Kan. App. 2d 474, 681 P.2d 679 (1984)(finding that the term "driving under the influence" does not render a statute void for vagueness). There, the Third Circuit analyzed Title 20 V.I.C. § 493(a)(1) which provides, in relevant part, that "[i]t is unlawful for any person who is under the influence of an intoxicating liquor ... to drive, operate, or be in actual physical control of, any motor vehicle within the Territory." 134 F.3d at 528 (emphasis added).
¶ 11. In addition, the Third Circuit noted that courts have recognized for over half a century that driving "under the influence" is commonly understood to mean driving in a state of intoxication that lessens a person's normal ability for clarity and control. Id.; see, e.g, Weston v. State, 49 Ariz. 183, 65 P.2d 652, 654 (1937); State v. Graham, 176 Minn. 164, 222 N.W. 909, 911 (1929). The Third Circuit reasoned that "[t]his common understanding is consistent with the obvious purpose of drunk driving statutes; i.e., to prevent people from driving unsafely due to an alcohol-induced diminished capacity. Because driving `under the influence' is commonly understood, it therefore puts citizens on fair notice of proscribed conduct...." 134 F.3d at 528.
¶ 12. Following the above reasoning, we conclude that Miss.Code Ann. § 63-11-30(1)(a) is not void for vagueness and does sufficiently provide fair notice of the proscribed conduct. Through § 63-11-30(1)(a), the average person is put on notice that drinking intoxicating liquors and subsequently driving a motor vehicle is prohibited. Common understanding and practice recognize that Leuer's behavior here is most consistent with being "under the influence" of intoxicating liquors, and thus clearly supports his conviction for DUI. Officer Harper had a reasonable suspicion that Leuer was driving "under the influence" when he observed Leuer run off the road onto the shoulder, make a left turn and then go out into the middle of the roadway at 2:30 a.m. Once Leuer pulled over, Harper observed that Leuer smelled strongly of alcohol and had glassy eyes and difficulty speaking. Harper opined that Leuer was "under the influence" of intoxicating liquor. Leuer admitted having alcoholic drinks earlier in the evening, but predictably denied having anything else since 10:30 p.m. Finally, he tried to excuse his careless driving by offering that his date was sick and needed to "throw up."
¶ 13. Leuer refused the intoxilyzer according to Officer Harper, and Leuer testified contrarily that the machine would not register. The record reveals that no test results were obtained. Since no BAC analysis was available, subsection (1)(a) is the offense committed as it is a different method of proving the same crime-DUI. See Young v. City of Brookhaven, 693 So. 2d 1355, 1358 (Miss.1997). Accordingly, this assignment fails.
III.
¶ 14. Leuer further asserts that the careless driving statute, under which he also was convicted, is unconstitutionally vague. Miss.Code Ann. § 63-3-1213 (1996), in relevant part, provides as follows:
Any person who drives any vehicle in a careless or imprudent manner, without due regard for the width, grade, curves, corner, traffic and use of the streets and highways and all other attendant circumstances is guilty of careless driving. *270 Careless driving shall be considered a lesser offense than reckless driving.
. . . .
He contends that the phrase "careless or imprudent manner" is vague and subjective and provides no objective criteria by which an individual is put on notice of what conduct the statute proscribes. This Court generally looks to the "plain meaning" of a statute. Jones v. Mississippi Employment Sec. Comm'n, 648 So. 2d 1138, 1142 (Miss.1995). "Popular words in statutes must be accepted in their popular sense and we must attempt to glean from the statutes the legislative intent." Chandler v. City of Jackson Civil Serv. Comm'n, 687 So. 2d 142, 144 (Miss.1997) (citing Mississippi Power Co. v. Jones, 369 So. 2d 1381, 1388 (Miss.1979); Dennis v. Travelers Ins. Co., 234 So. 2d 624, 626 (Miss.1970)). Looking at the "plain meaning" of the language to which Leuer objects, the statute echoes the familiar tort law standard, requiring that drivers on Mississippi roads exercise the same standard of care as a prudent person would in the same circumstances. Those few jurisdictions which have considered the constitutionality of language used in careless driving statutes have found that words communicating negligence or the absence thereof are not unconstitutionally vague. See, e.g., State v. Merithew, 220 Neb. 530, 371 N.W.2d 110, 112 (1985)("`carelessly or without due caution' are synonymous with `negligently or without due care'"); State v. Hagge, 211 N.W.2d 395, 397 (N.D.1973)(statute requiring those traveling on highways to drive "in a careful and prudent manner" not unconstitutionally vague).
¶ 15. When our careless driving statute is coupled with the rules of the road, Miss. Code Ann. § 63-3-1 et seq., (1996 & Supp. 1998), there is specificity sufficient to withstand constitutional scrutiny. We, therefore, find no merit to appellant's contention that the careless driving statute is unconstitutional.
IV.
¶ 16. For the foregoing reasons, Leuer's convictions for driving under the influence of intoxicating liquor and careless driving are affirmed.
¶ 17. CONVICTION OF CARELESS DRIVING AND SENTENCED TO PAY $50 AND ASSESSMENT COST OF $19 AFFIRMED. CONVICTION OF DRIVING UNDER THE INFLUENCE OF INTOXICATING LIQUOR AND SENTENCED TO PAY $800 AND ASSESSMENT COST OF $137 AFFIRMED. LEUER IS ORDERED TO ATTEND THE MASEP DRIVING COURSE AND SERVE 36 HOURS IN THE RANKIN COUNTY JAIL.
PRATHER, C.J., SULLIVAN AND PITTMAN, P.JJ., SMITH, MILLS, WALLER AND COBB, JJ., CONCUR.
McRAE, J., NOT PARTICIPATING. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2612655/ | 656 P.2d 262 (1982)
In the Matter of the ADOPTION OF C.M.G., a minor child.
Rebecca Sue BAILEY, formerly Rebecca Sue Gniech, Appellant,
v.
Stephen Eugene GNIECH and Pamela Jean Gniech, Appellees.
No. 57718.
Supreme Court of Oklahoma.
December 21, 1982.
Randle L. Graham, Sr., Oklahoma City, for appellant.
Thomas D. McCormick, Oklahoma City, for appellees.
*264 OPALA, Justice:
The dispositive issue for review is whether, under the provisions of 10 O.S.Supp. 1974 § 60.6(3), the mother's consent to the adoption was correctly declared to be unnecessary. We answer in the negative. The child's statutory eligibility status for adoption without its mother's consent depends here upon [1] whether the mother's failure to provide support in the discharge of her unadjudicated financial responsibility was "wilful" and [2] whether the contributions she claimed to have made meet the statutory standard and may hence be treated as "support".
We hold that (a) an unadjudicated support obligation may be discharged by contributions other than cash payments, (b) the trial court erred in excluding testimony by which the mother sought to elicit acts in a form other than cash payments in the discharge of her unadjudicated parental responsibility and (c) the extent of the mother's ability to provide support cannot be judicially gauged without first affording her the opportunity to elicit the full range of her contributory efforts.
Unable adequately to provide for her needs, the natural parents of Christina G. [child], agreed at the time of their divorce to place her custody with the paternal aunt and uncle [custodians]. By the terms of the decree's support order the father was required to pay the child's custodians $50.00 per month. No support obligation stood imposed upon the mother. She remained free of any adjudicated financial responsibility.
One year after this custody disposition, the custodians attempted to bring about the child's adoption. They had the father's consent and sought a judicial declaration of the child's eligibility for adoption without the consent of her natural mother. Their claim rested on the mother's alleged wilful failure to provide support within the meaning of 10 O.S.Supp. 1974 § 60.6(3)[1] for a full year last preceding the filing of the case. The mother testified she had made a $15.00 cash payment for the child's benefit. Her efforts to elicit other forms of contributions met with adverse rulings. The trial court found that the mother's consent was unnecessary because she had "wilfully failed, refused, and neglected to contribute to the child's support according to her financial ability to contribute."
The mother claims error in the trial court's refusal to admit evidence of her contributions in the form of gifts, food and clothing. The import of her argument is that the judge's refusal to admit this evidence deprived her of the opportunity to show that her child was not, in fact, eligible for adoption under § 60.6(3) without her consent.
The question presented is one of first impression. We are called upon to decide whether the provision of "support" that will satisfy § 60.6(3) must be solely in money or may be effected in some other *265 form of contributions to the child's living expenses.[2]
In the absence of a court order imposing some specific duty upon her, the mother was nonetheless obligated ex lege to provide support during the critical one-year period here at issue. In Davis v. Neely[3] we held that even though custody stands awarded to one parent, the other continues under a legal support obligation which, if allowed to go undischarged, may result in an adoption without the offending parent's consent.[4] The support obligation of a natural parent stands imposed by law. Its existence is recognized in the absence of any court order. The responsibility so cast survives a custody award to the other parent.[5] In short, the non-custodial natural parent stands under a status-based duty to provide support commensurate with his financial ability.[6]
In this case, the mother sought to show that she was in fact discharging her unadjudicated legal duty by (a) proof of the $15.00 payment to the custodians and (b) by other evidence tendered at the hearing which the trial court excluded in the erroneous belief that only money payments will satisfy the law's command.
I.
Adoption statutes are in derogation of the natural rights of parents. They must be strictly construed.[7] This principle is designed to protect the integrity of the home and of the natural bond between parent and child.[8] The law presumes that consent of the child's natural parents is necessary before its adoption may be effected.[9] The burden rests on those who seek to destroy the bond to show why consent may be dispensed with.[10] In any controversy between the parent and another who seeks to destroy parental status, adoption statutes are to be construed strictly in favor of natural parents.[11] Termination of a right so fundamental as that of a parent to his natural child calls for an application of "the full panoply of procedural safeguards".[12] Clear-and-convincing standard of persuasion must be met to warrant judicial severance of the parental bond.[13]
II.
The object of § 60.6(3) is to allow a child's adoption without the consent of *266 that parent who for the requisite period of time has wilfully failed to discharge his duty to contribute. If such offending parent was required by court order to pay support, the inquiry in a § 60.6(3) dispute must address the measure of compliance that was rendered. A court order that calls solely for payment of money may not be satisfied by means other than payment. Failure substantially to comply with the order may be wilful and subject the delinquent parent to forfeiture of his consent power under § 60.6(3).[14] Unadjudicated support duty ex lege unlike that which stands determined by a specific court order may be satisfied by means different from monetary contributions. A general legal obligation of a noncustodial parent differs vastly from that which is judicially determined. The former resembles the common-law concept of parental liability for "necessaries" a norm adopted by our statutory law.[15]
When a parent not under a support order is alleged to have forfeited, by operation of § 60.6(3), his power to grant or withhold consent to adoption, the allegedly delinquent parent must be afforded full and fair opportunity to show any contributions made to the child for which both at common law and under our statutes a stranger would have an action for "necessaries".[16] In short, the bond is not subject to a § 60.6(3) severance without the natural parent's consent when the parent claimed to be delinquent has, in fact, during the period in question contributed in any form toward his child's living expenses according to his ability.[17]
III.
Exclusion of evidence constitutes reversible error if it affects a substantial right of a party and the substance of the tendered evidence was either made known to the judge by offer or was apparent from the context within which it was sought to be elicited.[18] It is not necessary that a formal offer of proof be made if the significance of the excluded evidence is shown.
In the instant case, the trial court excluded the tendered proof of non-monetary support by the mother during the critical one-year pre-adoption period. The court's ruling was doubtless based upon the erroneous view that unadjudicated support duty, within the meaning of § 60.6(3), must be discharged solely by payment of money. This was the very position taken by the custodians' counsel who advised the court that "gifts, premiums [and] medical insurance" do not constitute support. The argument by mother's counsel that there were other means of discharging a general (unadjudicated) *267 parental obligation such as "buying clothes for one's child" went unheeded. A formal offer of proof which was not made here would have been futile. The court had announced, in clear and unequivocal terms, that, as a matter of law, "support" meant money payments only.
The evidence of non-monetary contributions, which was critical in the mother's quest to retain her parental consent power, was erroneously excluded to her prejudice.
The trial court's order is accordingly reversed and the cause is remanded for further proceedings not inconsistent with the views expressed in this pronouncement.
IRWIN, C.J., BARNES, V.C.J., and LAVENDER, SIMMS, DOOLIN and HARGRAVE, JJ., concur.
WILSON, J., concurs in the result.
NOTES
[1] The terms of 10 O.S.Supp. 1974 § 60.6(3), the statute in effect at the time of this litigation, are:
"A legitimate child cannot be adopted without the consent of its parents, if living ... except that consent is not necessary from a father or mother:
* * * * * *
3. Where a parent has wilfully failed, refused or neglected to contribute to the support of his child, as provided in the decree of divorce, or according to his financial ability if no provision for support is provided in the decree, for a period of one (1) year next preceding the filing of a petition for adoption of such child ... ." The 1974 version of § 60.6(3) was amended in 1981. Laws 1981, c. 107 § 1. Although the section appears, in the 1981 compilation, in a different form, the change does not affect the portions here under consideration.
[2] What constitutes "living expenses" should be regarded as an issue of fact for the trier. Within this category Oklahoma law does, generally, include food, shelter, clothing and requisite medical care.
The terms of 10 Ohio St. 1981 § 4 provide: "The parent entitled to the custody of a child must give him support and education suitable to his circumstances. If the support and education which the parent having custody is able to give are inadequate, the other parent must assist to the extent of his or her ability." [Emphasis added].
The terms of 21 Ohio St. 1981 § 852 provide in pertinent part: "Every parent of any child who wilfully omits, without lawful excuse, to perform any duty imposed upon the parent by law to furnish necessary food, clothing, shelter or medical attendance for such child is guilty of a misdemeanor * * *." [Emphasis added]
[3] Okl., 387 P.2d 494 [1963].
[4] Davis v. Neely, supra note 3 at 500.
[5] Davis v. Neely, supra note 3, in which adoption was allowed without the natural father's consent, is distinguishable from the present case. There it was held that the father's letters and gifts met none of the child's essential needs, while here the natural mother's tendered proof included support-related contributions.
[6] 10 O.S.Supp. 1974 § 60.6(3), supra note 1.
[7] In re Adoption of Graves, Okl., 481 P.2d 136, 138 [1971].
[8] Mann v. Garrette, Okl., 556 P.2d 1003, 1006 [1976].
[9] 10 O.S.Supp. 1974 § 60.6; Matter of Adoption of Darren Todd H., Okl., 615 P.2d 287, 288 [1980].
[10] Matter of Adoption of Darren Todd H., supra note 9 at 288. 10 O.S.Supp. 1974 § 60.6.
[11] In re Adoption of Graves, supra note 7 at 138.
[12] Matter of Adoption of Darren Todd H., supra note 9 at 290.
[13] Matter of Adoption of Darren Todd H., supra note 9 at 290; Matter of C.G., Okl., 637 P.2d 66, 69-72 [1981].
[14] Disputes arising under § 60.6(3), in which the allegedly offending parent was under a court-imposed order, are to be distinguished from those in which such parent was merely under the law's general duty of support. Cf. In re Adoption of Eddy, Okl., 487 P.2d 1362 [1971] and In re Adoption of Greer, Okl., 463 P.2d 677 [1970], where the provision of gifts, toys, clothing and medical insurance was found insufficient as "support". The non-custodial parent in those cases was under a specific court order for support.
[15] 10 Ohio St. 1981 § 13, infra note 16.
[16] The terms of 10 Ohio St. 1981 § 13 provide: "If a parent neglects to provide articles necessary for his child who is under his charge, according to his circumstances, a third person may in good faith supply such necessaries and recover the reasonable value thereof from the parent."
Cotner v. Lon Jacobs Grocery Co., 84 Okl. 1, 202 P. 997, 1000 [1921]. The word "necessaries" is a term used in a common-law action by a third party for recovery of money spent on articles necessary to a child's support. In 10 Ohio St. 1981 § 13, it represents the liability of a parent to a third party.
[17] Just as any custodial parent is free to contribute support in forms other than cash, so is the non-custodial parent, when not under a court-imposed support duty, equally free to resort to a variety of forms. "Support" in this sense is a legal right of the child which may be discharged in a variety of ways.
[18] The terms of 12 Ohio St. 1981 § 2104(A)(2) provide in pertinent part: "A. Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of a party is affected, and: * * * 2. If the ruling is one excluding evidence, the substance of the evidence was made known to the judge by offer or was apparent from the context within which questions were asked. * * *" | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2418537/ | 974 S.W.2d 168 (1998)
Vincent MENETTI and Felecia Menetti, Individually, Appellants,
v.
Hilario CHAVERS and Arnitta Chavers, Appellees.
No. 04-97-00253-CV.
Court of Appeals of Texas, San Antonio.
April 22, 1998.
*169 David R. DeWall, Law Office of David DeWall, San Antonio, for Appellants.
Hilario and Arnitta Chavers, San Antonio, pro se.
Before HARDBERGER, C.J., and RICKHOFF and DUNCAN, JJ.
OPINION
HARDBERGER, Chief Justice.
INTRODUCTION
This is an appeal by individual shareholders from a default judgment against their corporation, Menetti & Co., Inc., and from jury findings that impose individual liability on the shareholders. Vincent and Felecia Menetti assert, inter alia, that the trial court denied them the opportunity to present a defense as to their individual liability claims arising from faulty construction of an addition to the Chaverses' home. The Menettis also claim that they were denied the opportunity to challenge a claim that they were their corporation's alter ego. Appellees, the Chaverses, assert that the Menettis lack standing to assert the bulk of their claims. We hold that the trial court erred in finding the Menettis individually liable for the acts of their corporation because there was legally insufficient evidence to show actual fraud. Therefore, we reverse the judgment and render a decision in favor of the Menettis.
FACTS
The Chaverses sued Menetti & Co., Inc., and the Menettis individually for damages arising from faulty construction of an addition to the Chaverses' home. They sued under several theories: DTPA, fraud, breach of contract, negligence, and piercing the corporate veil.[1] They also included claims that the corporation had violated the Texas Tax Code.
*170 Prior to trial, the attorney hired to represent the Menettis and their corporation requested and was granted leave to withdraw his representation. Sometime after that, the Chaverses moved to show authority, requesting that the trial judge order the corporation to retain the services of an attorney by a "date certain" or have its pleadings stricken. See Dell Dev. Corp. v. Best Indus. Uniform Supply Co., Inc., 743 S.W.2d 302, 303 (Tex. App.Houston [14th Dist.] 1987, writ denied) (corporation may not represent itself in court). After a hearing at which the Menettis did not appear, the judge issued an order that the corporation retain an attorney within three days of the entry of the order or have its pleadings stricken. The corporation did not appeal this order, and the corporation did not comply within the time period (it did retain a lawyer several months before trial). Although an order decreeing the corporation's pleadings stricken was never entered, this was assumed to have occurred, de facto, in later proceedings.
Trial began on November 6. On November 7, in response to a motion by the Chaverses, the trial judge entered a default judgment against the corporation. Apparently, the judgment had two bases: first, the trial court accepted that the corporation's pleadings had been de facto stricken, based on the prior order that the corporation appear with counsel. Second, the trial court held that the corporation could not defend itself in court because it was behind on its franchise taxes and was thus not a corporation in good standing. The corporation's lawyer asked if the corporation could defend if the taxes were paid the following day; the trial judge refused the request.
At trial, the Menettis presented a defense on damages only. The jury charge instructed the jury that all issues of liability had been found against the defendant corporation and asked the jurors to determine damages. However, the charge also asked the jury to determine the alter ego, sham corporation, denuding, and Trust Fund Doctrine issues as questions of fact. All questions were answered in favor of the Chaverses, and the jury awarded them $137,000. The trial judge reduced this amount to $97,000. After their motion for new trial was refused, the Menettis filed an appeal with this court in the corporation's name. They later asked the court to dismiss the appeal, and they filed a second appeal as individuals.
In eight points of error, the Menettis claim that (1) the trial court erred in refusing to allow the Menettis, individually, to assert defenses on liability or alter ego issues;[2] (2) the trial court erred in entering judgment against the Menettis, because alter ego was not properly established;[3] (3) the trial court erred in entering judgment on the DTPA claims;[4] (4) the trial court erred in entering judgment against the Menettis based on negligence, because there is no negligent breach of contract cause of action; (5) the trial court erred in basing a judgment on denuding, because there was no or insufficient evidence to support the finding; (6) the trial court erred in basing its judgment against the Menettis on any violation of the Trust Fund Doctrine, because such a finding was based on insufficient evidence; (7) the trial court erred in admitting hearsay testimony; and (8) the trial court denied the Menettis their due process right to a fair trial under the state and federal constitutions.
LIABILITY
Standing
We first address the Chaverses' claim that the Menettis do not have standing to assert *171 most of the claims brought in this appeal. The Chaverses assert that, because the Menettis have appealed as individuals, rather than as a corporation, they do not having standing to bring claims as to the merits of the judgment against the corporation. This contention requires us to consider carefully the nature of the suit brought against the corporation and its individual shareholders and the actions taken by the trial court.
Standing to sue exists when a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy. Sierra Club v. Morton, 405 U.S. 727, 731, 92 S. Ct. 1361, 1364, 31 L. Ed. 2d 636 (1972). On appeal, a party may only complain of error that injuriously affects that party.[5]Pierson v. Houston Indep. Sch. Dist., 698 S.W.2d 377, 381 (Tex.App.Houston [14th Dist] 1985, writ ref'd n.r.e.); see also Buchele v. Woods, 528 S.W.2d 95, 98 (Tex.Civ.App.Tyler 1975, no writ) ("while it is normally true that a party of record is entitled to appellate review, there is the additional requirement that a party's own interest must be prejudiced by the decision before he has standing to appeal").
The Chaverses' petition raised both liability claims and claims that would allow them to pierce the corporate veil. In a sense, these are joint claims. The liability of the Menettis individually necessarily depends on a finding of liability against the corporation. However, a finding of liability against the corporation does not necessarily amount to a finding of liability against the Menettis individually. The corporate structure is designed to shield shareholders from just such liability. See Equinox Enterprises, Inc. v. Associated Media, Inc., 730 S.W.2d 872, 877 (Tex.App.Dallas 1987, no writ) (stating that alter ego is a theory under which individual liability may be imposed when it would not otherwise exist). In other words, the Menettis, as individuals, could not be held liable for the acts of the corporation if the corporate veil were not pierced. Thus, the default against the corporation on the liability issues does not injure or prejudice the Menettis so as to give them standing to complain of that default judgment.[6]See Shults v. State, 682 *172 S.W.2d 260, 260 (Tex.1984) (suggesting that individual shareholders do not have standing to appeal on behalf of their corporations); see also Thomas v. Thomas, 917 S.W.2d 425, 431 n. 3 (Tex.App.Waco 1996, no writ). The Menettis are only injured when the corporation's veil is pierced, and that is the only issue about which the Menettis have standing to complain.
Right to Defend Liability Issues
The same reasoning supports our holding that, once the default judgment was entered against the corporation, liability was established, and the Menettis had no right to present a defense on the existence of liability for the underlying claim.
A strongly analogous case is Karl & Kelly Co., Inc. v. McLerran, 646 S.W.2d 174 (Tex. 1983). In that case, the plaintiffs sued both the corporation and its officers as individuals. Karl & Kelly, 646 S.W.2d at 174. However, the plaintiffs' petition raised no claims that the corporate veil should be pierced. Id. at 175. The trial court ordered a default judgment against all defendants after the defendants failed to appear at trial. Id. at 174. The individual officers complained that they could not be held liable for corporate acts in the absence of a veil-piercing allegation and proof of that allegation. Id. at 175. The supreme court agreed. The contract that was the subject of the suit had been entered into between the plaintiffs and the corporation. Id. Unless the court pierced the corporate veil, the individual officers could not be held liable for corporate acts. Id; see also United Salt Corp. v. McKee, 96 N.M. 65, 628 P.2d 310, 313 (1981) (corporate defendant was not prejudiced by finding of liability against employees as long as corporate defendant was allowed to contest negligent entrustment, respondeat superior, and damages).
Karl & Kelly is highly instructive. Because individual liability is impossible without some piercing of the corporate veil, the Menettis were not injured by the default judgment against the corporation. In fact, under the reasoning in Karl & Kelly, absent a piercing of the veil, the Menettis did not commit the complained-of acts: "[S]ince the contract was with the corporation and not with [the individual defendants], any representations made by [the individual defendants] were made as agents of the corporation.... [T]here is no evidence in the record before us that Karl and Kelly Company was the alter ego of either [individual defendant]. The courts below erred in rendering a personal judgment against them on this theory." Karl & Kelly, 646 S.W.2d at 175; see also Crum & Forster, Inc. v. Monsanto Co., 887 S.W.2d 103, 151 (Tex.App. Texarkana 1994) (holding that it does not violate due process to impose punitive damages on parent corporation when that corporation did not, itself, engage in wrongdoing, because corporate veil had been pierced, and liability thus was found for all entities in suit), vacated pursuant to settlement agreement, 1995 WL 273592 (Tex. App.Texarkana March 9, 1995); Jeff Robinson Bldg. Co. v. Scott Floors, Inc., 630 S.W.2d 779, 782 (Tex.App.Houston [14th Dist.] 1982, writ ref'd n.r.e.) (where petition alleged bad acts on part of "defendant" without indicating which defendant it was referring to and where corporation was sued on sworn account and individuals were brought in for purposes of piercing corporate veil, the individuals were not sued on sworn account but on alter ego theory of liability).
The Menettis' lack of standing disposes of all claims that the trial court erred in finding liability for fraud, DTPA violations, breach of contract, and negligence. We further find that the Menettis were not entitled to present a defense as to the existence of liability for the underlying claims. The remaining issues are whether the Menettis had a right, as individuals, to challenge the alter ego and similar claims; whether the Menettis' right to defend was violated; whether there was sufficient evidence upon which to pierce the corporate veil, under any theory, and hold the Menettis individually liable for the acts of the corporation; whether impermissible hearsay was allowed during trial; and whether *173 the Menettis were denied their due process right to a fair trial. We need only address the sufficiency of the evidence supporting the determination to pierce the corporate veil. See TEX.R.APP. P. 47.1 (appellate court must address all issues necessary to final disposition of appeal).
PIERCING THE CORPORATE VEIL
The Menettis allege that they were not given the opportunity to defend the piercing-the-corporate-veil allegations. Undoubtedly, the Menettis were entitled to defend this claim, as it was the sole basis for finding them liable for the liability of the corporation. Whether they were denied this right is unclear from the record.[7] However, because we find that the Chaverses failed to introduce legally sufficient evidence to support their piercing the corporate veil, we do not reach the issue of whether the Menettis were deprived of the opportunity to present a viable defense. Instead, we turn to the sufficiency point of error.
WAS A SHOWING OF ACTUAL FRAUD NECESSARY?
Texas case law and the Texas Business Corporation Act (TBCA) provide several theories under which the corporate veil may be pierced so that individual shareholders may be held liable for corporate acts. Those theories include: (1) where the corporate fiction is used to perpetrate fraud; (2) where a corporation is organized and operated as a mere tool or business conduit of another corporation (alter ego); (3) where the corporate fiction is resorted to as a means of evading an existing legal obligation; (4) where the corporate fiction is employed to achieve or perpetuate monopoly; (5) where the corporate fiction is used to circumvent a statute; (6) where the corporate fiction is relied upon as a protection of crime or to justify wrong; and (7) where the corporation is inadequately capitalized. Castleberry v. Branscum, 721 S.W.2d 270, 272 (Tex.1986); see also TEX. BUS. CORP. ACT ANN. art. 2.21 (Vernon Supp.1998).
In 1993, the TBCA was revised to state that no contractual liability could be found under alter ego or "similar" theories unless there was also a finding that the individual to be charged used the corporation to perpetuate and did perpetuate actual fraud on the obligee of the contract, primarily for the personal benefit of the individual. See TEX. BUS. CORP. ACT. ANN. art. 2.21(A)(2) (Vernon Supp.1998). Prior to these amendments, commentators and courts agreed that all claims that were not contractual were governed by Castleberry, which required only a showing of constructive fraud in order to pierce the corporate veil. See James Gerard Gaspard, II, A Texas Guide to Piercing and Preserving the Corporate Veil, 31 BULL. BUS. L. SEC. ST. B. TEX. 24, 34 (Sept.1994) (1993 amendments in no way limited alter ego tort claims); see also Stewart & Stevenson Serv., Inc. v. Serv-Tech, Inc., 879 S.W.2d 89, 107 (Tex.App.Houston [14th Dist.] 1994, writ denied) (considering alter ego claim under Castleberry, without requiring showing of actual fraud, where parties had not entered into contract, and claim was in tort). Traditionally, Texas cases have attempted to treat contract claims and tort claims differently in determining whether to pierce the corporate veil. See Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 375 (Tex. 1984) (pointing out differences between tort and contract alter ego cases). The 1989 amendments to article 2.21 apparently tried to keep this distinction alive.
One commentator has suggested that this distinction has existed because, in contract *174 cases, the parties have voluntarily come together to conduct business, but in tort cases there is no such voluntariness: "The theory of the statute is that the Texas Business Corporations Act should be more stringent in contract cases than in tort cases because in contract cases the plaintiff had the opportunity to select the entity with which he deals as opposed to tort cases in which no such choice exists." Gaspard, A Texas Guide to Piercing and Preserving the Corporate Veil, at 34.
Under 1997 amendments, article 2.21(A)(2) appears to blur the distinction between contractual obligations and other claims. The provision now states that it covers all contractual obligations of the corporation "or any matter relating to or arising from the obligation." TEX. BUS. CORP. ACT ANN. art. 2.21(A)(2) (Vernon Supp.1998) (amended by Act of May 1, 1997, ch. 375, § 7, 1997 Tex. Sess. Law Serv. 1522-3) (emphasis added). The amendment took effect on September 1, 1997, and applies to all corporations, regardless of the date of their incorporation. Act of May 1, 1997, ch. 375, § 125, 1997 Tex. Sess. Law Serv. 1610. For all matters covered by this provision, the corporate veil may not be pierced absent a showing of actual fraud. The commentary following the 1996 amendments suggests that the actual fraud requirement should be applied, by analogy, to tort claims, especially those arising from contractual obligations. See TEX. BUS. CORP. ACT. ANN. art. 2.21 comment (Vernon Supp.1998).
In the case before the court, both contract and tort claims have been brought against the Menettis. Whether a showing of actual fraud is required to pierce the corporate veil in this case is, we believe, a question of some difficulty. However, after surveying the case law and the legislation, which seem to be somewhat at odds on the entire issue of corporate-veil piercing, we conclude that the claims before us do relate to or arise from a contractual obligation and therefore fall under the amended article 2.21. Thus, the Chaverses were required to demonstrate actual fraud to pierce the corporate veil and hold the Menettis individually liable. We are persuaded that this is the correct course because we believe the traditional concerns of tort cases, that the parties have not encountered each other voluntarily, do not apply here, where the Menettis and the Chaverses did in fact enter a bargain knowingly. See Gaspard, A Texas Guide to Piercing & Preserving the Corporate Veil, at 34.
The Menettis raise several claims regarding the issue of piercing the corporate veil. Because we believe there was legally insufficient evidence to support the finding of actual fraud, we need reach only that issue. See Stewart, 879 S.W.2d at 107 (where there is insufficient evidence of alter ego, rendition of judgment is required). A finding that no actual fraud was committed destroys not only the attempt to pierce the corporate veil by a showing of an alter ego, but by "other similar theor[ies]." TEX. BUS. CORP. ACT. ANN. art. 2.21(A)(2) (Vernon Supp.1998). Thus, our conclusion that there is insufficient evidence to find actual fraud precludes holding the Menettis individually liable for the acts of their corporation.
Actual Fraud: Sufficiency of the Evidence
Actual fraud in the corporate-veil context involves "dishonesty of purpose or intent to deceive." Castleberry, 721 S.W.2d at 273. The Menettis note that the instructions given to the jury narrow that definition to fraud by material representation. According to the Menettis, there was no or insufficient evidence to prove fraud through misrepresentation and, by virtue of the instruction, the Chaverses were precluded from proving it in any other way. See Thrift v. Hubbard, 44 F.3d 348, 354 (5th Cir.1995) (where question defined fraud in terms of material misrepresentations, appellant could not ask court to find it had proved fraud in other ways). We agree.
The Chaverses claim that the Menettis' sufficiency objection was not specific enough to preserve error. However, the Menettis did raise sufficiency-of-the-evidence points on fraud in their motion for an instructed verdict and their motion for new trial. Error is sufficiently preserved.
In considering a "no evidence," or legal sufficiency point, we consider only the *175 evidence favorable to the decision of the trier of fact and disregard all evidence and inferences to the contrary. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex.1988). If there is any evidence of probative force to support the finding, the finding will be upheld. Southern States Transp., Inc. v. State, 774 S.W.2d 639, 640 (Tex.1989). We conduct this review in alter ego claims, even though the jury is instructed to consider all the evidence surrounding the corporate entity and its relationship with the plaintiff. See Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 232 n. 1 (Tex.1990) (Hecht, J., dissenting) (objecting to consideration of only the evidence favoring the verdict, when jury was required to consider all relevant factors).
The evidence favorable to the verdict is that Mr. Menetti made several representations to the Chaverses. These representations include: (1) that Mr. Menetti would work from agreed upon blueprints; (2) that Mr. Menetti would obtain all appropriate permits to complete the job; (3) that Mr. Menetti would hire qualified employees or sub-contractors; (4) that Mr. Menetti had a crew of workers to complete the project; (5) that Mr. Menetti would provide a patio cover at no extra charge; (6) that Mr. Menetti had the expertise to do the work; and (6) that Mr. Menetti would be there to supervise the work.
Actual fraud by misrepresentation consists of a representation that is (1) material; (2) false; (3) knowingly false or made with reckless disregard for its truth or falsity; (4) made with the intention that it be acted upon by the other party; (5) relied upon by the other party; (6) damaging to the other party. Thrift, 44 F.3d at 354; Huff v. Harrell, 941 S.W.2d 230, 237 (Tex.App. Corpus Christi 1996, writ denied). The Chaverses have failed to show that any of the relevant representations were material or knowingly or recklessly false.
The Chaverses did establish reliance, but there is little, if any, proof that any mis representations were made to them. The parties agree that Mr. Menetti did work from blueprints. As for the obtaining of permits, the parties reached a standstill before the time at which this would have been appropriate. There is no evidence that Mr. Menetti did not hire contractors to do the work or that he did not have a crew. Although he did end up charging $400 for a patio cover that he said he would provide at no extra charge, there is no evidence that he knew at the time he would charge for the cover. There was no showing that Mr. Menetti did not have the expertise to do the work. Finally, Mr. Chavers's own testimony established that Menetti at least supervised the project to some degree.
There was also no evidence that Mr. Menetti knew that any of the allegedly false statements were false or that the Menettis personally benefitted from any misrepresentations. See Thrift, 44 F.3d at 354 (direct personal benefit shown where the funds that the corporation should have used to pay creditor were used by shareholders to pay office lease, which shareholder held in its own name). Evidence that the Menettis bought their groceries or paid their credit card bills from the corporate account is insufficient, because the fraud must relate to the transaction at issue, the contract between the Menettis and the Chavers. Id.Thus, Ms. Chavers' testimony about her generally inept handling of the corporate accounts is not relevant to this issue.
What the evidence abundantly shows is that the Menettis were careless bookkeepers and perhaps enjoyed the tax advantages of living off their corporate funds with little effort to preserve the corporate fiction. The record also provides ample evidence of shoddy workmanship. What the record does not show is that the Menettis committed actual fraud against the Chaverses that would justify piercing the corporate veil. Because article 2.21 requires a fraud finding to pierce the corporate veil by the methods outlined in the statute and by "other similar" theories, this finding eliminates individual liability for all the other theories pleaded by the Chaverses, as well.[8]See Huff, 941 S.W.2d at 237 (no *176 piercing corporate veil unless fraud is proved, where plaintiffs claimed alter ego, unfair device, and denuding a corporation).
CONCLUSION
We find that the Menettis were not entitled to defend, as individuals, liability once it was deemed against the corporation. They were entitled to defend the alter ego claim. Although we have serious doubts as to whether they were permitted to do so, we are not required to reach that issue. We find that under the amended article 2.21 of the Texas Business Corporations Act, the Chaverses were required to prove that the Menettis were guilty of actual fraud in their transactions with the Chaverses in order to pierce the corporate veil. We find legally insufficient evidence of such fraud; therefore, we must reverse the judgment and render a decision that the Chaverses take nothing from the Menettis as individuals. The judgment against the corporation is not affected by this holding.
All other claims are unaddressed either because the Menettis lack standing to bring them or they are unnecessary to the disposition of this appeal.
Concurring opinion by DUNCAN, J.
DUNCAN, Justice, concurring.
I agree with and join that part of the majority opinion holding actual fraud is required to pierce the corporate veil and impose liability on the Menettis in these circumstances and, further, the record contains no evidence to support the jury's finding on this issue. I do not, however, join the dicta in the majority opinion regarding a corporation's shareholders' standing to challenge a judgment against the corporation. at 172. Nor do I read Shults v. State, 682 S.W.2d 260 (Tex.1984), to support either the majority's explicit statement that a judgment against a corporation does not injure or prejudice the corporation's shareholders or its implicit statement that corporate shareholders will never have standing to appeal such a judgment. Additionally, while the other case cited by the majority, Thomas v. Thomas, 917 S.W.2d 425 (Tex.App.Waco 1996, no writ), holds that the sole shareholder of a defunct corporation did not have standing to raise the corporation's complaints regarding a turnover order, id. at 432, the corporation was not a party to the proceeding in the trial court or the trial court's order, id. at 431, and the court reached this conclusion without analysis or a single citation to authority.
In my view, it is beyond dispute that the shareholders of a corporation are always damaged by a judgment against the corporation at least to the extent the value of their stock is diminished, and this issue is much too complex and fact-specific to be addressed in a cursory or abstract manner, particularly in light of Texas' express authorization of shareholder derivative suits in certain situations. See, e.g., TEX. BUS. CORP. ACT ANN. art. 5.14 (Vernon 1980); TEX.R. CIV. P. 42(a).
With these comments, I concur in the court's judgment and in its denial of the Menettis' motion to recall the mandate and to reinstate Menetti & Co., Inc.'s appeal.
NOTES
[1] To establish individual liability, the Chaverses claimed that the Menettis were the alter egos of their corporation, that the corporation was a sham, that it was formed for an illegal purpose, that the Menettis had violated the Trust Fund Doctrine, and/or that they were guilty of denuding the corporation.
[2] Subsumed in this point are claims that the trial court erred in striking the pleadings based on the corporation's failure to obtain counsel, that the trial court erred in striking the pleadings based on the failure to pay franchise taxes, and that individual liability must be established separate from corporate liability, even if alter ego is established.
[3] Subsumed in this point are claims that two of the questions to the jury did not properly submit the issue to the jury and that there is insufficient evidence to establish fraud against Felecia and Vincent Menetti.
[4] Subsumed in this point are claims that the wrong statute was relied upon; that notice, proof, and jury questions and answers didn't comply with property code requisites; that, alternatively, additional damages were not authorized as a matter of law; and that the DTPA cause of action sounded in contract and thus was inappropriate under the DTPA.
[5] The Menettis argue that we should find standing under a line of cases holding that a default judgment against a party cannot bind a principal or a guarantor. See Howze v. Surety Corp. of America, 584 S.W.2d 263, 265 (Tex.1979); Mayfield v. Hicks, 575 S.W.2d 571, 574 (Tex.Civ. App.Dallas 1978, writ ref'd n.r.e.). These cases cannot support standing in this situation. If the corporate veil is pierced, the shareholders are considered the equivalent of the corporation, not separate parties with individual defenses. The corporation's liability becomes the shareholder's liability absolutely.
[6] Our finding that the Menettis do not have standing to complain of the default judgment by no means indicates our approval of the summary disposition of the corporation's defense. We have found no cases to support Judge Peden's striking of the corporation's pleadings on the basis that it did not have an attorney several months before trial. See Home Sav. of America FSB v. Harris Co. Water Control and Imp. Dist. No. 70, 928 S.W.2d 217, 219 (Tex.App.Houston [14th Dist.] 1996, no writ) (failure of corporate appellant to file answer through attorney does not prevent corporation's response from precluding a default); R.T.A. Intern., Inc. v. Cano, 915 S.W.2d 149, 151 (Tex.App.Corpus Christi 1996, writ denied); Handy Andy, Inc. v. Ruiz, 900 S.W.2d 739, 741 (Tex.App.Corpus Christi 1994, writ denied). In addition, the supreme court recently overruled the Houston court of appeals and held that it is inappropriate to dismiss an appeal that was perfected by a corporate officer on behalf of the corporation. Kunstoplast of America, Inc. v. Formosa Plastics Corp., USA, 937 S.W.2d 455, 456 (Tex.1996) (overruling Chauhan v. Formosa Plastics Corp., USA, 928 S.W.2d 582 (Tex.App.Houston [14th Dist.] 1996)). In Kunstoplast, the supreme court stated that the general rule that a corporation must be represented by a licensed attorney is not meant to preclude a corporation's right to appeal on a purely procedural ground. Id. A nonlawyer, the court stated, may perform ministerial tasks. Id.
Nor can we understand how Judge Spears felt authorized to find that the corporation's pleadings had been stricken when the record is devoid of an order ordering them stricken.
Finally, we believe striking the corporation's pleadings because its franchise taxes were unpaid, especially when the corporation offered to pay the taxes in order to maintain its defense, was an abuse of discretion. See Bryan v. Cleveland Sand & Gravel Co., 139 S.W.2d 612, 613 (Tex.Civ.App.Beaumont 1940, writ ref'd) (failure to pay corporation taxes doesn't preclude corporation from putting on purely defensive claims); see also Hardwick v. Austin Gallery of Oriental Rugs, Inc., 779 S.W.2d 438, 441 (Tex. App.Austin 1989, writ denied) (dismissal should not be granted until plaintiff has been given opportunity to cure defect).
However, despite the grievous error committed in granting the default, the corporation voluntarily dismissed its right to appeal. We cannot, in hindsight, correct an error that is not properly before us, no matter how grievous that error may be.
[7] The record reflects a great deal of confusion as to whether the Menettis would be allowed to defend on the theories to pierce the corporate veil. Although many contradictory statements were made by the judge and the Chaverses' attorney on the issue, the last word from the Chaverses was, "They [the Menettis] should only be allowed to assert the fact that they say there is no corporate veil piercing, alter ego, sham to perpetrate a fraud, and trust fund doctrine." The Menettis made no attempt to present evidence on the issue and made no objections during the presentation of their defense on damages. However, they objected at earlier points to suggestions by opposing counsel and by the trial judge that they would not be allowed to raise a defense on veil-piercing claims. Further, the record suggests that, by the time the Menettis were given an opportunity to put on any defense at all, the issue had become so confused that the Menettis may have believed the matter to have been definitively resolved against them at an earlier point.
[8] At any rate, we have serious reservations about the relevance and application of the Trust Fund Doctrine in this case. In the first place, there is case law suggesting that the doctrine only applies when a corporation is dissolved. See Kern v. Gleason, 840 S.W.2d 730, 738 (Tex.App.Amarillo 1992, no writ) (refusing to apply Trust Fund Doctrine where corporation was not dissolved). In the second place, the doctrine provides no basis for personal liability of corporate directors. Siegel v. Holliday, 663 S.W.2d 824, 827 (Tex. 1984). It merely allows corporate creditors to follow corporate assets that are traceable and to subject those assets to their claims. Id. In order to rely on this theory, then, the Chaveres needed to demonstrate the amount of corporate assets (probably of a dissolved corporation) received and held by the Menettis. No such showing was made. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1418294/ | 477 F.Supp. 682 (1979)
Guta SEISLOWSKI, Plaintiff,
v.
SECRETARY OF HEALTH, EDUCATION AND WELFARE, Defendant.
No. 78 C 2309.
United States District Court, E. D. New York.
October 2, 1979.
*683 Joseph R. Walsh, New York City, for plaintiff.
Edward R. Korman, U.S. Atty., E.D. New York, Brooklyn, N.Y. by Jo A. Davis, Asst. U.S. Atty., and Borge Varmer, Regional Atty., Region II Dept. of Health, Ed. and Welfare, New York City by Julia T. Reed, Asst. Regional Atty., New York City, for defendant.
MEMORANDUM OF DECISION AND ORDER
NEAHER, District Judge.
This action to review a denial of Social Security disability insurance benefits was initially referred to a United States Magistrate to review the administrative record, hear the contentions of the parties, and report to the court his recommended disposition of the parties' respective motions for judgment on the pleadings. That has been done and the matter is now before the court on the Magistrate's recommendation that *684 the case be remanded to the Secretary "with instructions to obtain more substantial evidence . . . and to give the plaintiff an opportunity to produce more appropriate medical testimony regarding her disability."
After an independent searching review of the record and careful study of the parties' briefs, the court is of opinion that the Secretary's decision is supported by substantial evidence and thus a remand is not called for. In reaching its conclusion, the court is mindful that the Social Security Act should be liberally construed so as to accomplish its humane purposes. These purposes are twofold: (1) to provide disability benefits to insured persons when their physical impairments are of such severity as to prevent gainful employment; and (2) to provide retirement benefits to those who have reached the specified age of retirement, namely 65, and cease employment. The contributions made by plaintiff and other workers support both purposes, but one purpose is not to be mistaken for the other.
On September 30, 1975, when plaintiff's insured status expired, she was 51 years of age. Born in Poland, she came to the United States in 1950 and became a citizen. Although her childhood education ended with the third grade, she went to school here to learn English, which she speaks adequately as reflected in the record. In 1959, at the age of 35, plaintiff began employment in the garment industry as an electric sewing machine operator and later as a finisher of men's clothes.
The record is not altogether clear when plaintiff actually ceased working because of claimed disability. Her Social Security earnings record shows no earnings in 1970, only $86.92 in 1971 and $1,221.13 in 1972 (Exh. 7), when, she testified, she stopped working because she was "not feeling good" and thereafter collected unemployment insurance benefits for 26 weeks (Tr. 25). Plaintiff's application for disability insurance benefits filed on November 22, 1974, reveals that she also received a workmen's compensation award of $15 per week for the period May 1974 to September 1974. In that application "August 25, 1972" appears as the date when plaintiff claims she became unable to work because of "head injury dizzinessheadaches" (Exh. 1, Tr. 54-55).
In recommending a remand, the Magistrate viewed the medical evidence as insufficient to justify "the Secretary's negative answer" to plaintiff's claim and thus she ought to be given a further opportunity to produce "more appropriate medical testimony regarding her disability." The court's difficulties with that recommendation are twofold.
First, plaintiff was represented throughout by a private attorney who had prior written notice of the nature of the disability issue to be determined and the claimant's burden of proof; who was invited to examine in advance of the hearing the documentary evidence which had been gathered by the administrative law judge; and who was offered the assistance of the judge in submitting any additional evidence which was available (Tr. 15-16). If evidence was lacking to sustain the plaintiff's acknowledged burden of proof, it was not the responsibility of the administrative law judge to find it or create it. This case is to be distinguished from one where the claimant is not represented by counsel, prompting courts to impose a greater burden on the administrative law judge "scrupulously and conscientiously [to] probe into, inquire of and explore for all the relevant facts," see Cutler v. Weinberger, 516 F.2d 1282, 1286 (2 Cir. 1975), even though the role of the administrative agency is that of "an adjudicator and not as an advocate or adversary." Richardson v. Perales, 402 U.S. 389, 403, 91 S.Ct. 1420, 1428, 28 L.Ed.2d 842 (1971). Any dearth of medical evidence in this case is not due to agency fault but rather, as shown below, to its non-existence.
Second, there is nothing in the record even suggesting that plaintiff was ever hospitalized or treated for any "head injury" claimed as a disability in her application (Exh. 1, Tr. 54). What does appear is that she is suffering from essential hypertension[1]high *685 blood pressureand mild arthritis, ailments common to many who nonetheless manage to perform their daily work (Tr. 85, 87). Furthermore, she has been followed for those conditions at the Sidney Hillman Health Center "for many years with no significant abnormalities" (Tr. 95).
Her additional disability complaints of "headaches, dizziness" began in 1950, long before she became employed (Tr. 66), and for which she saw a Dr. German "every few weeks" from 1950 until he died in 1974 (Tr. 66). Thereafter she was treated "every few months" for similar complaints by Dr. Martin Bandler, a gastroenterologist, who continued her on valium and other "pills" (Tr. 66, 92) and has apparently kept her hypertension under good control. In recent years her blood pressure has dropped from 160/100 to 140/74 (Tr. 87, 95), although she apparently still has a problem with obesity because of failure to follow her prescribed diet.
In sum, the medical reports in the record provided ample substantial evidence to support the Secretary's conclusion that controlled hypertension and mild osteoarthritis are not physical impairments of such severity as to prevent plaintiff from resuming the type of work she formerly performed or work of similar nature. Supporting that conclusion is the testimony of the vocational expert at the hearing who stated that plaintiff's former work was considered semi-skilled and sedentary to light activity, which she could undoubtedly perform, were it not for her subjective complaints.
Thus there remains for consideration only the newly described subjective claim of "anxiety state" which, in the opinion of Dr. Bandler, "prevents [plaintiff] from using public transportation; therefore, she is totally disabled from work" (Exh. 15, Tr. 92). Initially, it should be noted that Dr. Bandler's opinion was given as of April 14, 1978, almost two and a half years after plaintiff's insured status had expired. Thus, even assuming that her "anxiety state" predated September 30, 1975, there is no evidence that it had reached disabling severity prior to that date. Evidence of impairment which reached disabling severity after the expiration of plaintiff's insured status, or exacerbation of an existing impairment after expiration, cannot be the basis for the determination of entitlement to a period of disability and disability insurance benefits, even though the impairment itself may have existed before plaintiff's insured status expired. DeNafo v. Finch, 436 F.2d 737 (3 Cir. 1971); Henry v. Gardner, 381 F.2d 191 (6 Cir. 1967), cert. denied, 389 U.S. 993, 88 S.Ct. 492, 19 L.Ed.2d 487 (1967), rehearing denied, 389 U.S. 1060, 88 S.Ct. 797, 19 L.Ed.2d 864 (1968); Selig v. Richardson, 379 F.Supp. 594 (E.D.N.Y.1974); Clark v. Weinburger, 389 F.Supp. 1168, 1170 (D.Ct.1974); Gardner v. Richardson, 383 F.Supp. 1 (E.D. Pa.1974); LaBoy v. Richardson, 355 F.Supp. 602 (D.P.R.1972); Hernandez v. Secretary of Health, Education, and Welfare, 336 F.Supp. 1077 (D.P.R.1972); McConnell v. Richardson, 321 F.Supp. 1397 (W.D.Pa. 1971); Mann v. Richardson, 323 F.Supp. 175 (S.D.N.Y.1971).
Moreover, although Dr. Bandler is a treating physician, this is not a case in which his opinion must be held to be binding upon the Secretary. Cf. Bastien v. Califano, 572 F.2d 908 (2 Cir. 1978), recently reaffirmed in Alvarado v. Califano, 605 F.2d 34 (2 Cir. 1979). That rule is applicable only when no contradictory medical evidence appears in the record. Here, the medical reports of physicians at the Sidney Hillman Health Center establish that plaintiff's only ailments are hypertension, which is being controlled by medication, mild osteoarthritis, and obesity for which a diet has been prescribed. However distressful plaintiff's anxiety state may be to her, there is substantial evidence to support the Secretary's determination that she is neither physically nor mentally disabled from performing gainful work, if she chooses to do so.
*686 Finally, contrary to Dr. Bandler's opinion, plaintiff's feelings of apprehension, uncertainty and fear do not constitute a disability in the absence of any significant medically determinable physical or mental impairment as is the case here. Alvarado v. Weinberger, 511 F.2d 1046 (1 Cir. 1975); Ennis v. Califano, 427 F.Supp. 260 (E.D. Mo.), aff'd, No. 17-1167 (8 Cir., September 29, 1977). And while inability to use public transportation is a factor to be considered in determining ability to pursue gainful employment, Robinson v. Richardson, 360 F.Supp. 243 (E.D.N.Y.1973), it should be established by objective evidence, not merely by subjective statements of a clearly interested party. Plaintiff acknowledged continued use of public transportation at the hearing, albeit claiming she was accompanied by her daughter or son after feeling "sick" and "dizzy" when she took a bus alone (Tr. 31, 33). The credibility of such statements is a matter solely for the Secretary's determination; they do not have to be "accepted at face value." Deyo v. Weinberger, 406 F.Supp. 968, 973 (S.D.N.Y.1975).
Upon the entire record, the court is left with no doubt that the Secretary's determination was based upon substantial evidence, that there is no need for a remand, and that judgment in favor of the Secretary should be granted, dismissing the complaint.
SO ORDERED.
NOTES
[1] Dorland's Medical Dictionary (24th ed.) defines essential hypertension as "high blood pressure occurring without discoverable organic cause." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2615631/ | 990 P.2d 328 (1999)
1999 OK CIV APP 99
UNION PACIFIC RAILROAD COMPANY, Appellant,
v.
STATE of Oklahoma, ex rel. CORPORATION COMMISSION and ex rel. Drew Edmondson, Attorney General of the State of Oklahoma, Appellees.
No. 91,210.
Court of Civil Appeals of Oklahoma, Division No. 1.
July 19, 1999.
As Corrected July 27, 1999.
Certiorari Denied October 31, 1999.
Hugh D. Rice, Oklahoma City, Oklahoma, For Appellant.
Lawrence R. Edmison, Andrea P. Johnson, Oklahoma Corporation Commission, Oklahoma City, Oklahoma, For Appellees.
Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.
*329 OPINION
CARL B. JONES, Chief Judge:
¶ 1 Appellant, Union Pacific Railroad Company (Union Pacific), appeals from an order entered by the Oklahoma Corporation Commission requiring Union Pacific to fence its right-of-way. On March 17, 1997, the Corporation Commission, on behalf of Jack Eubank, filed an Application for an order requiring Union Pacific to repair or build fencing along its right-of-way continuous to the private property upon which Mr. Eubank has cattle. Union Pacific filed a response asserting affirmative defenses.
¶ 2 This matter was heard by an Administrative Law Judge. During the hearing, testimony showed that the real dispute in this matter was over who should construct the fence as Union Pacific had already purchased all of the fencing materials necessary to build a new fence on the right-of-way. The Administrative Law Judge found that Union Pacific was required to repair or construct a fence along its right-of-way. Union Pacific appealed to the Commission, en banc. After a hearing before the Commission, en banc, the Commission affirmed the Administrative Law Judge's decision and issued an order directing Union Pacific to repair or build a fence along its right-of-way. Union Pacific appeals.
¶ 3 On appeal, Union Pacific asserts three propositions of error: (1) The Corporation Commission lacks subject matter jurisdiction to enforce an order requiring a railroad to repair or fence private property; (2) If the Corporation Commission has subject matter jurisdiction, its jurisdiction has been preempted by federal law; and (3) A Corporation Commission order requiring a railroad to repair or build a fence for the benefit of a private property owner denies the railroad equal protection under the law.
¶ 4 Union Pacific asserts that any action requiring a railroad to fence its right-of-way at the request of a private property owner is outside the scope of the Corporation Commission's limited jurisdiction. The Corporation Commission only has jurisdiction and authority as is expressly or by necessary implication conferred upon it by the Constitution and statutes of this state. Oklahoma Gas & Electric Co. v. Corporation Comm'n, 1975 OK 15, ¶ 29, 543 P.2d 546, 551. A railroad is required by statute to fence its right-of-way. 66 O.S.1991 § 141. Since 1919, the Corporation Commission has been vested with the authority to enforce the installation and repair of fences along a railway's right-of-way at the request of a landowner. 17 O.S.1991 § 91. Although, there was some dispute over whether Mr. Eubanks was the landowner, it was undisputed that Mr. Eubanks ran cattle on the property in question and that Mr. Eubanks had directly contacted the Union Pacific regarding the fence. The Administrative Law Judge's decision was not contrary to the law or evidence presented. Pursuant to these statutes, the Corporation Commission has subject matter jurisdiction to enforce the installation and repair of fences between a railroad and a landowner.
¶ 5 Union Pacific's second contention is that the federal enactment of the ICC *330 Termination Act of 1995 preempts state law. Title 49 U.S.C. § 10501 provides that the Surface Transportation Board (Board) has exclusive jurisdiction over transportation by railroads. Contained in this provision is an express preemption clause which provides that the Board's jurisdiction extends to the "rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and (2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities". Union Pacific argues that the right-of-way is a facility of the railroad and as such is now under the purview of the Surface Transportation Board and not the Corporation Commission. Neither the ICC Termination Act of 1995 nor the case law applying the Act has defined "facilities". In Atchison, Topeka & Santa Fe Ry. Co. v. Corp. Comm., 1983 OK 7, ¶ 5, 658 P.2d 479, 481, the Oklahoma Supreme Court discussed the definition of "facilities" as it applies to railroads and concluded that the term encompassed everything necessary for the convenience of passengers and the safety and prompt transportation of freight. All of the case law relied upon by Union Pacific involves depots, agencies or business offices which are undeniably facilities of a railroad. See, Burlington Northern Santa Fe Corp. v. Anderson, 959 F.Supp. 1288 (D. Montana 1997); CSX Transp. Inc. v. Georgia Public Serv. Com'n, 944 F.Supp. 1573 (N.D.Ga.1996); Burlington Northern R. Co. v. Page Grain Co., 249 Neb. 821, 545 N.W.2d 749 (1996). In this instance, no facilities are on the land. The only improvements to this property are the fence and the railroad track.
¶ 6 The Corporation Commission argues that the Act did not preempt the historic police powers of the state relying upon 49 U.S.C. § 20106. This provision provides that a state may adopt or continue to enforce a law related to railroad safety until the Secretary of Transportation prescribes a regulation or issues an order covering the subject matter of the state law. No federal regulation or federal law directly addresses this issue of maintenance of a railroad right-of-way. Therefore, the Corporation Commission may continue to enforce the safety requirement that the railroad maintain a fence on its right-of-way.
¶ 7 The final proposition of error is based on a denial of equal protection. Union Pacific argues the statutory requirement that railroads must construct fences on their right-of-ways is a denial of equal protection because the State of Oklahoma and its counties are not required by statute to fence their rights-of-ways. The Equal Protection Clause of the Fourteenth Amendment directs that no state shall "deny to any person within its jurisdiction the equal protection of the laws". The general rule is that legislatures are presumed to have enacted laws within their constitutional power although, in execution, their laws may result in some inequality. Nordlinger v. Hahn, 505 U.S. 1, 10, 112 S.Ct. 2326, 2331, 120 L.Ed.2d 1 (1992). Accordingly, unless a classification triggers some form of heightened review because it endangers the exercise of a fundamental right or categorizes on the basis of an inherently suspect characteristic, the Equal Protection Clause requires only that the classification rationally further a legitimate state interest. Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 439-441, 105 S.Ct. 3249, 3254-3255, 87 L.Ed.2d 313 (1985).
¶ 8 Union Pacific has not identified any suspect classification which triggers a heightened review. In Atchison, Topeka & Santa Fe Ry. Co. v. State, 1984 OK 29, ¶ 18, 683 P.2d 974, 979, quoting Erie Ry. Co. v. Board of Public Utility Com'rs, 254 U.S. 394, 41 S.Ct. 169, 65 L.Ed. 322 (1921), the Oklahoma Supreme Court found that the most obvious case of a state's police power is the state's constitutional right to require railroads to maintain their property in such form to be safe to the public. Thus, we find that the Corporation Commission had the authority to issue its Order and the Order does not violate the equal protection clause under the United States Constitution.
¶ 9 AFFIRMED.
¶ 10 ADAMS, J., and JOPLIN, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1418295/ | 546 P.2d 855 (1976)
97 Idaho 458
John C. McFARLIN, Plaintiff-Appellant,
v.
Hilda Beth (McFarlin) CRAWFORD, Defendant-Respondent.
No. 11837.
Supreme Court of Idaho.
March 2, 1976.
Robert S. Williams, Moscow, for plaintiff-appellant.
No appearance for defendant-respondent.
McFADDEN, Justice.
Respondent Hilda Beth McFarlin (Crawford) sought modification of a decree of divorce so as to require her former husband, appellant John C. McFarlin, to pay child support for the children of the marriage. The district court, finding that the appellant had a duty to support two children of the marriage, modified the decree and McFarlin appealed. We reverse.
The parties were divorced July 12, 1968. The decree of divorce dissolved the marriage, granted custody of the three children of the marriage to Mrs. Crawford, "approved, confirmed, and ratified" a property settlement agreement of the parties, and decreed property to the parties in accordance with the agreement.
By the property settlement agreement, Mrs. Crawford received the family home, the household goods and furniture, a 1964 automobile, the family business known as the Arctic Circle, and certain shares of Arctic Circle stock. McFarlin received 215 shares of Arctic Circle stock, a 1967 automobile, personal items and $25,000.00 in cash. The wife agreed to assume all debts and liabilities existing on the house, furniture and appliances, and the family business. The husband agreed to assume a *856 debt on the 1967 automobile which he received. The parties stipulated that "the family business * * * has an excellent income that [sic] she will support and maintain the children of the parties thus relieving the husband of making any support and maintenance payments for and on behalf of said children."
In 1973, Mrs. Crawford sold the family business known as the Arctic Circle, married her present husband, a resident of Salt Lake City, Utah, and moved with the children to Salt Lake City. McFarlin has also remarried.
Mrs. Crawford petitioned to modify the decree of divorce, seeking child support for the three children. The district court modified the decree of divorce and ordered McFarlin to pay child support on behalf of the two youngest children in the amount of $50.00 per month per child, the oldest child having reached the age of majority. The court further ordered that, when the next older child who was awarded child support died, married or obtained majority, the child support payments on behalf of the youngest daughter would be increased to $75.00 per month. The husband appeals from the judgment modifying the decree of divorce.
This appeal raises two issues: as child support was provided for in the property settlement agreement, may the court, upon a showing of a material and permanent change of circumstances, in effect modify the agreement to provide for child support; if the court may modify the agreement, did the trial court abuse its discretion by finding a permanent and material change in circumstances had occurred and awarding child support for the two children in the amount of $50.00 per child per month.
I
McFarlin contends that the property settlement agreement was not merged into the divorce decree and that the agreement was an integrated contract between the parties; he argues that the court may not modify the decree as the court would be modifying a contract between the parties.
The underlying assumption of McFarlin's argument is that the parties may determine the rights of the children to child support by entering into a property settlement agreement in contemplation of a divorce. This assumption is in direct conflict with past decisions of this court.
"* * * This Court has consistently held that the district courts have continuing jurisdiction to enforce, and, if necessary, to modify their decrees relating to minor children [as to care, custody and support]. (Citations omitted.)
"The parties cannot by contract or agreement divest the court of its continuing jurisdiction in the matter of minor children. (Citation omitted.)" Phillips v. Phillips, 93 Idaho 384, 387, 462 P.2d 49, 52 (1969).
Accord, Patton v. Patton, 88 Idaho 288, 399 P.2d 262 (1965); Keyes v. Keyes, 51 Idaho 670, 9 P.2d 804 (1932). Thus, we must reject the respondent's contention. The trial court, upon a finding of permanent and material change in circumstances as to child support, may modify its decree to provide for child support. I.C. § 32-705. See 61 A.L.R.3d Annot. Modification of Child Support Decree, § 7, p. 679 (1975).
II
The second issue raised by this appeal is whether the trial court erred in finding a permanent and material change in circumstances and in ordering McFarlin to pay $50.00 per month support for each of his two minor children. McFarlin submits that Mrs. Crawford failed to meet her burden of proving that a material and permanent change in circumstances requiring modification of the decree had occurred.
The district court found:
"That a change in circumstances was alleged and proven. Specifically, the cost of living has increased from July of 1968 through September of 1974 in the amount of 45.8%. In addition, the contract *857 does not fill its purpose of providing the children with support in that the business has been sold and that there is no income available for the children's support from the business."
Upon the basis of this finding as to the circumstances of Mrs. Crawford, the district court modified the decree of divorce to provide for child support of the two children.
Under the terms of the property settlement agreement, Mrs. Crawford received the Arctic Circle business with the understanding that the children would be supported from the income derived from the business. McFarlin testified at the modification hearing that the community property (whose principal assets were the family business and the family home) had been divided one-third to the husband, one-third to the wife, and one-third to the wife for support of the children. He further testified that the estimated value of the business at the time of divorce was $75,000.00 to $80,000.00 for which he received $25,000.00 cash from Mrs. Crawford as his share. The cash for this purpose came from a loan taken out by Mrs. Crawford. Mrs. Crawford did not testify as to the business's estimated value at the time of the divorce.
Mrs. Crawford sold the business in 1973, receiving approximately $30,000.00 only from the sale. She testified that, from the proceeds of the sale, she paid $12,000 on a business debt, and the balance of the loan for $25,000.00. She stated that "the net income [proceeds] from the sale was less than $3,000.00". She also testified that she sold the family home at that time, for which she received $7,700.00 cash after expenses of the sale, with the balance due her to be paid at $80 per month for 10 years. She testified that from the sale of the business and the home she accumulated approximately $10,000.00, and that $5,000.00 was spent on expenses for moving to Salt Lake City and for clothing for the children and herself, and $5,000.00 was placed in a savings account in trust for the children. According to the record, Mrs. Crawford had withdrawn $2,700.00 from the savings account to help her husband meet the payroll of a corporation of which he was a stockholder. She testified that she invested $17,000.00 in a home in Salt Lake City but that title to the home was held by her husband.
A divorce decree may not be modified as to child support unless a permanent, material change in circumstances has been alleged and proven. Embree v. Embree, 85 Idaho 443, 380 P.2d 216 (1963). In a petition to modify a decree of divorce, the moving party has the burden of proof as to changes in the circumstances of the parties. Larkin v. Larkin, 85 Idaho 610, 382 P.2d 784 (1963).
No evidence was presented as to the costs of providing the children's support and maintenance or as to their standard of living other than testimony that one child might require medical care for a foot problem and that both children would require orthodontic care; however, the district court found the McFarlin was not obligated to pay these costs of health care. Moreover, the record is silent as to Mrs. Crawford's ability to support the children and the resources available for her support; she did testify that she was unable to work at the time of the hearing because of pending surgery, but she did not testify as to any permanent condition which would limit her ability to work. Upon the basis of the record before us, we find that there was not sufficient evidence to support the trial court's order finding that a material and permanent change in circumstances had occurred.
Although the order modifying the divorce decree must be reversed, Mrs. Crawford may institute a new proceeding in the district court.
Order modifying decree reversed. Costs to appellant.
McQUADE, C.J., and DONALDSON, SHEPARD and BAKES, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1418297/ | 477 F.Supp. 954 (1979)
EASTERBY-THACKSTON, INC., Plaintiff,
v.
CHRYSLER CORPORATION.
Civ. A. No. 78-1144.
United States District Court, D. South Carolina, Greenville Division.
July 18, 1979.
*955 H. Donald Sellers, W. Francis Marion, Thomas H. Coker, Jr., Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, S. C., for plaintiff.
C. T. Wyche, Greenville, S. C., for defendant.
Cary H. Hall, Jr., Greenville, S. C., for defendant and non-party Chrysler Credit Corporation.
ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT AND JUDGMENT ON PLEADINGS
HEMPHILL, District Judge.
Plaintiff brings this action as a former franchise dealer of Chrysler Corporation whose dealership area covered portions of Greenville and Pickens Counties. From 1959 until April 5, 1978, when plaintiff terminated its direct dealership agreement pursuant to the terms of that agreement, plaintiff was Chrysler, Plymouth, and Imperial dealer for the Chrysler Corporation; prior to June 1, 1976, its direct dealership agreement was with the subsidiary, Chrysler Motors Corporation. After terminating the contract, plaintiff filed this action charging defendant with breach of contract; coercion, intimidation and bad faith under 15 U.S.C. § 1221 et seq. (Automobile Dealers' Day In Court Act); breach of contract in violation of that Act; unfair and deceptive acts under § 56-15-40, Code of Laws of South Carolina, 1976; violations of the Clayton Act; unfair trade practices under § 39-5-20; and unfair competition under § 39-3-10. Defendant answered by specifically denying many of the allegations; asserting the protection of various statutes of limitations; claiming that plaintiff breached the contract and violated § 1221 of Title 15 and § 56-15-40 by its act of bad faith; and that plaintiff's cause of action under § 56-15-40[1], regulating motor vehicle manufacturers, distributors and dealers, must fail as the contract predates the Act which is prospective only in effect. By its Motion for Judgment on the Pleadings, Rule 12(c), Federal Rules of Civil Procedure, defendant, in effect demurs to plaintiff's cause of action under § 56-15-40. Plaintiff then filed a Motion for Partial Summary Judgment pursuant to Rules 12(b) and 56, which demurs to defendant's position that § 56-15-40 is inapplicable to the facts of this case. Thus the question presented for decision is whether § 56-15-40 was intended by the legislature to apply to this case, and if so, whether the statute thus violates the South Carolina and federal Constitution.
Chrysler contends that the dealership contract signed on October 10, 1959, predates the passage of the Act on May 29, 1972, with the result that the Act should be held inapplicable. Plaintiff has responded that the merger of Chrysler Motors Corporation into Chrysler Corporation on June 1, 1976, with the assumption by Chrysler Corporation of the rights and duties under the contract, constitutes a new contract which postdates the Act.[2]
*956 Plaintiff's characterization of the June 1, 1976 activity as constituting a "new contract," strains the meaning of that term beyond the limits which this court is willing to project. There was no change in the rights or duties of Easterby-Thackston as a result of Chrysler becoming a party to the contract. Nor was the consent of plaintiff necessary for the substitution of Chrysler as a party. Furthermore, the original contract specifically contemplated this very situation, stating that Chrysler Motors "may assign this agreement only to Chrysler Corporation." Since the parties operated exclusively under the terms of the original agreement, as amended prior to passage of this Act, the assumption of this contract by Chrysler, does not constitute a "new contract." See Pittsburgh-Buffalo Co. v. American Fidelity Co., 219 F. 818, 824 (3rd Cir. 1915) (defining a new contract as a new agreement which contemplates concurrence and action by both the parties making the alteration).
Nor does the immaterial modification of March 17, 1976 which adds the position of Chrysler National Dealer Placement Manager to the list of positions in paragraph 5 of the Direct Dealer Agreements which are authorized to consent to assignments or approve modifications, constitute a sufficient alteration of contractual rights to call it a new contract. While this court might accept a fairly low threshold of materiality in determining whether a new contract exists which postdates the Act, the modification in question is simply too trivial.
The latest material modifications of the contracts which this court has before it are prior to the passage date of the Act, May 29, 1972, or the intended effective date six months earlier of January 1, 1972.[3]
Plaintiff argues that no provisions of the Act impair any obligation of the Direct Dealer Agreement between Chrysler and Easterby-Thackston. If this is true, then the statute can be applied to this agreement, without being retroactive. South Carolina follows the rule of statutory construction which construes legislation to be prospective in operation unless the legislative intent that it be given retrospective operation clearly appears from the express language of the Act. Pulliam v. Doe, 246 S.C. 106, 142 S.E.2d 861 (1965); Independence Ins. Co. v. Independent Life & Acc. Ins. Co., 218 S.C. 22, 61 S.E.2d 399 (1950); Johnson v. Baldwin, 214 S.C. 545, 53 S.E.2d 785 (1949); Jefferson Standard Life Ins. Co. v. King, 165 S.C. 219, 163 S.E. 653 (1932); Home Bldg. & Loan Ass'n v. City of Spartanburg, 185 S.C. 313, 194 S.E. 139 (1937). But as plaintiff has implied, a statute would not be defined as retroactive unless it first impairs a vested contractual right. Rowell v. Harleysville Mutual Ins. Co., S.C., 250 S.E.2d 111 (1978); McLure v. Melton, 24 S.C. 559 (1886), appeal dismissed Hopkins v. McLure, 133 U.S. 380, 33 L.Ed. 660 (1890).
Chrysler's attorneys have furnished this court with examples of ways in which the dealership agreement might be altered by the Act. While the contract requires Chrysler to fill Dealer's orders on a "best effort" basis, the Act required the orders to be filled unless an "Act of God" or some other event beyond defendant's control prevents the order from being filled. § 56-15-40(3)(a).[4] Chrysler asserts that the Act might impose liability on the manufacturer *957 for failure to fill orders at the end of the model year when the plants must cease production and retool for the new model year. This court's attention has also been directed to the paragraphs relating to the need for Chrysler's consent for any changes in dealer's capital structure or assignment of the dealer's interest.[5] Both, it is asserted, are impaired by the provisions of the Act. § 56-15-40(3)(h) & (i).[6]
Defendant also argues that § 56-15-40(2)(a)[7] could be construed to prohibit Chrysler from advising a dealer that it must order a sufficient number of cars to meet its Minimum Sales Responsibility under the agreement.
While this court is doubtful that a good faith effort by Chrysler to carry out the terms of the contract would be impaired by the Act, this court prefers to leave these matters to the state courts. Sufficient for the determination of this case are the conclusions of Judge Simons in Superior Motors v. Winnebago Industries, Inc., 359 F.Supp. 773 (D.S.C.1973), that the Act would impair the contractual obligations in that case. While not intimating an endorsement of the constitutional analysis in that case, this court does agree that the Act would have had a retroactive effect in Superior Motors. In discussing the effect on the rights of the parties, Judge Simons wrote:
In the case at hand, the new legislation imposes several added conditions or *958 duties upon the manufacturer, while taking from that party rights to which it was entitled in the contract. Under the contract, the franchise automatically terminated without any notice at the expiration of the term unless it was renewed in writing. Under the statute, the manufacturer cannot simply allow the agreement to expire, but must give sixty days' notice of his intention not to renew, together with a statement of his specific reasons for nonrenewal. Under the contract, either party had the right to cancel the agreement without any requirement of "cause", but simply upon ninety days' notice. Under the statute, the nonrenewal of a franchise without "due cause" is declared to be an "unfair termination," any provisions of the contract to the contrary notwithstanding. A manufacturer running afoul of the provisions of this legislation renders itself vulnerable to an award of double the plaintiff's actual damages, and treble punitive damages.
Contrary to plaintiff's position, a law cannot be applied retroactively in some instances, and not be so applied in others; it is an "all or none" proposition. The finding of potential impairment with vested rights places the burden on plaintiff to establish the legislative intent necessary for retroactive application of this law. The Act itself provided for an effective date of January 1, 1972, some six months before it was signed. Thus the South Carolina legislature evidenced an intent for the Act to be retroactive, but clearly limited the scope of that effect. In the face of this clear language, this court fails to see how the provisions of the Act can be read to apply to a contract entered into on May 10, 1965. Clearly, plaintiff is caught in the net of judicial reluctance to impair vested rights.
Plaintiff has cited the case of Willys Motors v. Northwest Kaiser-Willys, 142 F.Supp. 469 (D.Miss., 1956) in which a federal district court gave retroactive effect to an automobile dealer's day in court statute. That court declared that the public purpose of protecting dealers and their employees from the coercive pressures of manufacturers furthered a sufficiently strong state interest to be a valid exercise of the police power and therefore constitutional under the Contracts Clause of the United States Constitution.[8] However, the Minnesota court failed to examine the legislative intent in reference to retroactivity once it found an impairment of a contractual clause. In this court's eyes, the Willys Motors case loses its persuasive force when it skirts this crucial issue.
For the reasons stated above, defendant's Motion for Judgment on the Pleadings is hereby granted, plaintiff's Motion for Partial Summary Judgment is denied, and judgment on Plaintiff's Fourth Cause of Action is hereby awarded to defendant.
AND IT IS SO ORDERED.
NOTES
[1] S.C.Code of Laws, 1976, § 56-15-30 reads: Unfair methods of competition and unfair or deceptive acts or practices declared unlawful.
(a) Unfair methods of competition and unfair or deceptive acts or practices as defined in § 56-15-40 are hereby declared to be unlawful.
(b) In construing paragraph (a) the courts may be guided by the definitions in the Federal Trade Commission Act (15 U.S.C. 45).
§ 56-15-40 then proceeds to list certain acts which are prohibited under § 56-15-30.
[2] Chrysler must be considered a new party to this contract due to the merger. Chrysler Motors was dissolved while Chrysler Corporation remained in existence as the absorbing corporation. See Metropolitan Edison Co. v. Commissioner of Internal Revenue, 98 F.2d 807, 810 (3rd Cir. 1938).
[3] See Superior Motors v. Winnebago Industries, Inc., 359 F.Supp. 773, 780 (D.S.C.1973).
[4] S.C.Code of Laws, 1976, § 56-15-40(3)(a) provides: Specific acts deemed unfair methods of competition and unfair or deceptive acts or practices; Office of Administrator; appointment of personnel . . .
(3) It shall be deemed a violation of paragraph (a) of § 56-15-30 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent or other representative thereof:
(a) To refuse to deliver in reasonable quantities and within a reasonable time after receipt of dealer's order, to any motor vehicle dealer having a franchise or contractual arrangement for the retail sale of new motor vehicles sold or distributed by such manufacturer, distributor branch or division, factory branch or division or wholesale branch or division, any such motor vehicles as are covered by such franchise or contract specifically publicly advertised by such manufacturer, distributor, wholesaler, distributor branch or division, factory branch or division, or wholesale branch or division to be available for immediate delivery; provided, however, the failure to deliver any motor vehicle shall not be considered a violation of this chapter if such failure be due to an act of God, work stoppage or delay due to a strike or labor difficulty, shortage of materials, freight embargo or other cause over which the manufacturer, distributor, or wholesaler, or any agent thereof, shall have no control.
[5] Chrysler Direct Dealer Agreement, Paragraphs 3 and 5 are as follows:
(3) Direct Dealer's Capital Stock or Partnership Interest.
If DIRECT DEALER is a corporation or partnership, DIRECT DEALER represents and agrees that the persons named below own beneficially, and will continue to own beneficially (except for transfers not affecting a change in majority control or interest) unless CHRYSLER agrees otherwise in writing, the capital stock or partnership interest of DIRECT DEALER in the percentages indicated below:
J. E. Thackston _ _ _ _ _ _ 75% Voting Stock
T. R. Easterby _ _ _ _ _ _ 25% Voting Stock
(5) Former Agreements and Waiver, Modification or Assignment of this Agreement.
. . . . .
DIRECT DEALER may not assign this agreement without the written consent of CHRYSLER, executed by the President or a Vice-President of Chrysler Motors Corporation.
CHRYSLER may assign this agreement only to Chrysler Corporation or any wholly owned subsidiary of Chrysler Corporation and will advise DIRECT DEALER of any such assignment by notice signed by the President of a Vice-President of Chrysler Motors Corporation and mailed to DIRECT DEALER.
[6] S.C.Code of Laws, 1976, § 56-15-40(3)(h) & (i) read as follows:
(h) To prevent or attempt to prevent by contract or otherwise, any motor vehicle dealer from changing the capital structure of his dealership or the means by or through which he finances the operation of his dealership, provided the dealer at all times meets any reasonable capital standards agreed to between the dealership and the manufacturer, distributor or wholesaler, and provided such change by the dealer does not result in a change in the executive management of the dealership.
(i) To prevent or attempt to prevent by contract or otherwise, any motor vehicle dealer or any officer, partner or stockholder of any motor vehicle dealer from selling or transferring any part of the interest of any of them to any other person or persons or party or parties; provided, however, that no dealer, officer, partner or stockholder shall have the right to sell, transfer or assign the franchise or power of management or control thereunder without the consent of the manufacturer, distributor or wholesaler except that such consent shall not be unreasonably withheld.
[7] S.C.Code of Laws, 1976, § 56-15-40(2)(a) provides:
(2) It shall be deemed a violation of paragraph (a) of § 56-15-30 for a manufacturer, a distributor, a wholesaler, a distributor branch or division, a factory branch or division, or a wholesale branch or division, or officer, agent or other representative thereof, to coerce, or attempt to coerce, any motor vehicle dealer:
(a) To order or accept delivery of any motor vehicle or vehicles, appliances, equipment, parts or accessories thereof, or any other commodity or commodities which such motor vehicle dealer has not voluntarily ordered.
[8] Art. 1, § 10 reads: Restrictions upon powers of states.
No state shall enter into any treaty, alliance or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law or law impairing the obligation of contracts, or grant any title of nobility.
No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net product of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.
No state shall, without the consent of Congress, lay any duty of tonnage, keep troops, or ships of war in time of peace, enter into any agreement or compact with another state, or with a foreign power, or engage in war, unless actually invaded, or in such imminent danger as will not admit of delay. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1767054/ | 633 So.2d 1210 (1994)
Lynn Beaucoudray, Wife of/and James KELTY, Jr. Individually and On Behalf of Their Minor Child, Anne Mary Kelty
v.
Fred O. BRUMFIELD, M.D., and Southern Baptist Hospital.
No. 93-C-1142.
Supreme Court of Louisiana.
February 25, 1994.
Concurring and Dissenting Opinion March 1, 1994.
Dissenting Opinion February 25, 1994.
Revised March 8, 1994.
Rehearing Denied March 25, 1994.
Concurring and Dissenting Opinion of Justice Hall March 1, 1994.
Dissenting Opinion of Justice Lemmon Filed February 25, 1994.
*1212 PER CURIAM.
The plaintiffs, parents of a child who was severely brain-damaged at birth by a physician's malpractice, recovered by settlements and a judgment the $500,000 maximum principal sum amount permitted for the child under the cap on damages set by the Medical Malpractice Act ("MMA"). La.R.S. 40:1299.41 et seq. The recovery for the child did not include any amount or value for her medical care and related expenses. This is the third proceeding in which the plaintiffs have moved the district court from which the judgment issued for a certification that the child is "a patient in need of future medical care and related benefits" from the Patients' Compensation Fund ("PCF") as provided for by Section 43 of the MMA. La.R.S. 40:1299.43. In the first proceeding, the plaintiffs and the PCF stipulated and the trial court found facts that show the child fits the definition of a "patient in need of future medical care," i.e., her recovery consumes the whole amount permitted by the $500,000 cap, "exclusive of the value of future medical care and related benefits." La.R.S. 40:1299.43A(3). However, the district court concluded that the child could not receive future medical care benefits because her claim for damages was filed and pending prior to September 1, 1984, and Section 43 of the MMA adding such benefits was made "applicable to all malpractice claims filed on or after September 1, 1984." 1984 La.Acts No. 435, § 3. The district court's decision was affirmed on appeal. Kelty v. Brumfield, 534 So.2d 1331 (La.App. 4th Cir.1988). Subsequently, in a different case, this court declared unconstitutional and reformed Section 3 of Act 435 of 1984 to make Section 43 of the MMA applicable to "claims and litigation pending when it was passed." Williams v. Kushner, 549 So.2d 294, 297 (La.1989). When the plaintiffs re-urged their motion in the second proceeding, the district court overruled the PCF's exception of res judicata. The court of appeal, however, granted the PCF's application for a supervisory writ and sustained the exception. Kelty v. Brumfield, 559 So.2d 907 (La.App. 4th Cir.1990). In the current proceeding, the plaintiffs again moved the district court for a certification that the child is a patient in need of future medical care, the district court sustained the PCF's exception of res judicata, and the appeals court affirmed. Kelty v. Brumfield, 92-CA-0904, 615 So.2d 1131 (La. App. 4th Cir.1992). We grant certiorari to sort out the thorny jurisdictional-res judicata problems which the plaintiffs' claim presents and, after considering the extensive pleadings, *1213 records and briefs in all three proceedings, reverse.
I.
Anne Mary Kelty sustained severe brain damage during childbirth on July 18, 1978 because of the malpractice of a physician insured by the PCF. The malpractice occurred when the doctor administered Pitocin intra-muscularly to induce labor, causing abruption of the placenta and resulting hemorrhage. Lynn and Edward Kelty, the child's parents, were not made aware that the child's birth had been induced by Pitocin until several years later.
In 1983, the Keltys launched what has become a repetitive, ten year campaign of litigation against the physician, a hospital and the PCF in behalf of Anne Mary Kelty. The Keltys requested a medical review panel on April 22, 1983. Before the review panel was convened, the physician filed an exception claiming that the Keltys' claim had prescribed. On February 13, 1985, the exception was overruled. The review panel rendered its expert opinion as to whether or not the evidence supported the conclusion that the defendants failed to act within the appropriate standards of care on June 25, 1985.
The Keltys filed their original court petition in behalf of their child on August 23, 1985. The physician filed another exception of prescription. The trial court referred the exception to the merits. The defendants' applications for writs were denied by the court of appeal. See Kelty v. Brumfield, 534 So.2d 1331, 1332 (La.App. 4th Cir.1988).
On April 29, 1987, the hospital paid $75,000 in settlement of the plaintiffs' claims in behalf of the child and themselves. On October 31, 1987, the physician and his individual insurer agreed to a voluntary payment to the plaintiffs of $100,000, the amount of their maximum potential liability under the medical malpractice act. The lawsuit was dismissed as to the physician and the hospital. On November 2, 3, and 6, the trial court heard evidence on the exception of prescription which the PCF continued to urge. During the hearing, the parties stipulated that the child's damages, exclusive of future medical care and related expenses, exceeded $500,000.
On November 17, 1987, the trial court overruled the exception of prescription on the ground that the PCF did not have standing to raise the issue of prescription after the physician made the voluntary payment of his maximum potential liability, which constituted an admission of liability binding on the PCF. In the same judgment, the trial court awarded the plaintiffs $500,000 exclusive of future medical care and related losses, subject to certain credits and debits, the maximum amount recoverable for the child under the damages cap. On December 3, 1987, the plaintiffs filed a motion requesting a trial before a jury "on the issue of future medicals and on the issue of damages". The trial court set the issues of future medicals and damages to be heard before a jury. On January 11, 1988, however, the trial court, in supplemental reasons for judgment, ruled that the Keltys' allegations as to future medical damages could not be considered because their claim and suit had been filed before September 1, 1984, the effective date of Section 3 of Act 435 of 1984.
The PCF appealed, and the Keltys answered contending that they were entitled to a trial on the issues of total damages, including future medical losses, because they intended to contest the constitutionality of the $500,000 cap on damages. The court of appeal fully affirmed the trial court's judgment against the PCF overruling its exception of prescription. As to the Keltys arguments, however, the appeals court made rulings with a reservation. First, because Act 435 of 1984, which provided for the payment of future medical care and related benefits in excess of the statutory cap of $500,000 on damages provided that the Act would be applicable to claims filed on or after September 1, 1984, and the Keltys "claim" was filed when they requested a medical review panel on April 22, 1983, rather than when they filed suit on August 23, 1985, the partial amendment of the cap as to future medical expenses by Act 435 of 1984 is not applicable to this case. Second, the legislature expressly intended for Act 435 of 1984 to apply prospectively only. Finally, the court of appeal concluded its opinion with this reservation:
Plaintiffs argue that they should be allowed to proceed with a trial on the damage issue because they intend to contest *1214 the constitutionality of the five hundred thousand dollar limitation. This Court, in Williams v. Kushner, 524 So.2d 191 (La. App. 4th Cir.1988), writs granted 526 So.2d 785, has upheld the constitutionality of the statutory limitation. The Supreme Court has granted writs to consider this issue, but as of the date of this opinion no judgment has been rendered. Therefore, at this time, plaintiffs have no right to proceed further. However, should the Williams case be reversed, we reserve to plaintiffs the right to proceed to trial on the issue of quantum. Kelty v. Brumfield, 534 So.2d 1331, 1335 (La.App. 4th Cir. 1988).
Subsequently, on September 12, 1989, this court rendered its much awaited decision in the case that the court of appeal had anticipated would resolve the question of the constitutionality of the $500,000 cap on damages. Williams v. Kushner, 549 So.2d 294, 297 (La.1989). Surprisingly, however, a majority of this court concluded that neither the constitutionality of the $500,000 cap on total damages or that of the $100,000 cap on liability of a qualified health care provider was properly before the court and must therefore await consideration on another day. Id. at 296. Yet, even more unexpectedly, the court reached an issue that had not been assigned as error or argued explicitly by deciding that there was a constitutionally intolerable inconsistency between Act 435 of 1984 which added "future medical care and related benefits" to the MMA and Act 239 of 1985 which provided future medical benefits in the Malpractice Liability for State Services Act, R.S. 40:1299.39 et seq. ("MLSSA"). Act 435 of 1984, in adding R.S. 40:1299.43, made future medical care and related benefits available under the MMA only to those victims of private malpractitioners whose claims were filed after September 1, 1984. But Act 239 of 1985, in amending the MLSSA, made such benefits available to victims of public malpractitioners regardless of when their claims had been filed so long as they were pending upon passage of the act. This court declared that the discrepancy in treatment of future medical care claimants by the two acts was a violation of the state constitutional guarantee of equal protection of the laws. Furthermore, this court held that the violation required that the MMA's provision be reformed to give equal treatment to claims pending upon the date of its passage. In declaring unconstitutional and reforming the MMA's provision cutting off claims filed before September 1, 1984, this court observed:
Thus, if Mark Williams had been injured at birth in a state facility under the care of a state employee, his future medical expenses could be recovered. Because he was born in a private hospital under the care of a private physician, those expenses are legislatively placed in a different category. This anomaly is a clear violation of the Louisiana constitutional guarantee of equal protection. Williams v. Kushner, 549 So.2d at 297.
Anne Mary Kelty had been deprived of needed medical care benefits because of the identical anomaly and unequal protection of the laws that this court corrected in Williams v. Kushner. As a basic element of justice is to treat like cases alike, the Keltys sought to have the district court correct the same constitutional error in their child's case. On November 10, 1989, they filed their second proceeding, a rule to fix costs in the trial court, seeking an order "fixing the amount of `future medicals' from the date of the alleged medical malpractice, namely July 1978, pursuant to the opinion of the Supreme Court of Louisiana, dated September 12, 1989, in the case entitled Prince A. Williams versus Jack Kushner, et al,...." The PCF filed an exception of res judicata. But the trial court recognized the merit of the Kelty's plea for relief and overruled the exception. The court of appeal, however, granted the PCF's application for a supervisory writ and reversed on March 29, 1990, sustaining the PCF's exception of res judicata. Kelty v. Brumfield, 559 So.2d 907, 909 (La.App. 4th Cir.1990).
The plaintiffs brought a third proceeding, in the form of a rule to fix future medical care and related benefits, on December 20, 1991, to order the PCF to show cause why it should not be ordered to pay all future medical care and related benefits to the child as the result of the medical negligence of the physician. The PCF filed an exception of res *1215 judicata. The trial court granted the exception and dismissed the plaintiffs' suit with prejudice. The court of appeal affirmed, concluding that:
There exists identity of the parties, the cause and the thing demanded. A panel of this Court narrowly interpreted the language of the first Kelty opinion to dispose of future medical expenses. The trial court had no choice but to maintain the exception of res judicata. Kelty v. Brumfield, 615 So.2d 1131 (La.App. 4th Cir. 1992).
II.
The basic legal question presented by this case is whether a court has subject matter jurisdiction to make the initial adjudication of a future medical care benefits claim under the MMA. The issue is decisive because a claim is not barred by res judicata if the court in which a prior action was brought lacked subject matter jurisdiction to adjudge that claim. In the present case, courts in two previous proceedings ruled that the plaintiffs were not entitled to present a claim in behalf of their child for payment of future medical care benefits from the PCF. We conclude, however, that those judgments were invalid with respect to plaintiffs' medical care claim and therefore have no preclusive effect because the statute which creates the plaintiffs' special remedial claim vests exclusive original subject matter jurisdiction of the initial disposition of that claim in the state agency or agencies having exclusive authority to pay, reject, settle, and monitor all claims and to administer the fund from which they must be paid.
A.
Although our res judicata rules have been revised recently, La.R.S. 13:4231 (Act 521 of 1990), the basic principles that govern the present case have not changed. To have any preclusive effect a judgment must be valid, that is, among other things, it must have been rendered by a court with jurisdiction over the subject matter. Id., comment (d). A claim is not barred by res judicata if the court in which the first action was brought lacked subject matter jurisdiction to adjudicate that claim. Id.; See Cullen v. Margiotta, 811 F.2d 698 (2nd Cir.1987), citing Salwen Paper Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 72 A.D.2d 385, 424 N.Y.S.2d 918 (2d Dep't 1980); Restatement (Second) of Judgments § 26(1)(c) (1982). The applicability of res judicata depends on the valid jurisdiction of the court which rendered the judgment, just as the applicability of lis pendens depends upon the valid jurisdiction of the court in the first suit. Slater v. Slater, 336 So.2d 965 (La.App. 4th Cir.1976); Sims v. Sims, 247 So.2d 602 (La. App. 3d Cir.1971). See, La.Code Civ.P. arts. 2, 3, 2002, 2003; Tucker v. New Orleans Laundries, Inc., 238 La. 207, 114 So.2d 866 (1959); Watts v. Town of Homer, 301 So.2d 729 (La.App. 2d Cir.1974).
The doctrine of res judicata is stricti juris; any doubt concerning application of the principle of res judicata must be resolved against its application. Eugene v. Ventress, 253 La. 840, 220 So.2d 94 (1969); Tucker v. New Orleans Laundries, Inc., supra. The doctrine of res judicata cannot be invoked unless all its essential elements are present, Hancock v. Lincoln American Life Ins. Co., 278 So.2d 561 (La.App. 1st Cir.1973); Coates Equipment & Service, Inc. v. Glover, 181 So.2d 455 (La.App. 1st Cir.1965), and each necessary element must be established beyond all question. Hancock v. Lincoln American Life Ins. Co., supra; Road Equipment Co. v. Prestenback, 143 So.2d 135 (La. App. 1st Cir.1962).
B.
The determination of whether an administrative agency has exclusive statutory jurisdiction of an issue requires detailed analysis of the statutory provisions. See Giallanza v. LPSC, 412 So.2d 1369 (La.1982); Steeg v. Lawyers Title Insurance Corp., 329 So.2d 719 (La.1976); O'Meara v. Union Oil Co., 212 La. 745, 33 So.2d 506 (1947); II Davis & Pierce, Administrative Law Treatise §§ 14.1, 14.2 (3rd ed. 1994). See also Gordon v. New York Stock Exchange, 422 U.S. 659, 95 S.Ct. 2598, 45 L.Ed.2d 463 (1975) (Securities and Exchange Act eliminated judicial power to regulate rates and vested it in the SEC, subject only to court review). Exclusive *1216 jurisdiction exists in the administrative agency when the statutory scheme requires that the claimant first avail herself of and exhaust her administrative remedy before seeking judicial relief. Daily Advertiser v. Trans-La, 612 So.2d 7 (La.1993); Bonomo v. Louisiana Downs, Inc., 337 So.2d 553 (La. App. 2d Cir.1976), citing McKart v. United States, 395 U.S. 185, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969); Richardson v. Parish Council of East Baton Rouge, 53 So.2d 458 (La.App. 1st Cir.1951); Penny v. Southwestern Bell Telephone Co., 906 F.2d 183, 185-86 (5th Cir.1990). Accordingly, we will consider the language of the statutory provisions, and the purpose of the law in question in light of the principles of statutory interpretation. La.Civ.Code arts. 9-13.
Preliminarily, it should be noted that the MMA, and the MLSSA, were enacted to provide for a different adjustment of the conflicts of interests between private (MMA) and public (MLSSA) health care providers and their patient-claimants than was made previously by general tort law. As part of their sweeping changes, the laws impose significant limitations on the courts' power and authority to adjudicate medical negligence cases, viz., (1) a comprehensive $500,000 cap on damages; La.R.S. 40:1299.42B, 1299.39F; and (2) mandated medical review before trial. Id. 1299.47, 1299.39.1. See Everett v. Goldman, 359 So.2d 1256 (La.1978); for discussion of the Indiana law upon which the MMA and MLSSA were modelled, see Kinney, Gronfein, & Gannon, Indiana's Medical Malpractice Act: Results of a Three-Year Study, 24 Ind.L.Rev. 1277 (1991). In the absence of any challenge to these legislative limits upon the courts' constitutional jurisdiction, we assume without deciding their validity for purposes of the present case.
Further, the MMA and the MLSSA must be strictly construed because they grant immunities or advantages to special classes in derogation of the general rights available to tort victims. Galloway v. Baton Rouge Gen. Hosp., 602 So.2d 1003 (La.1992); Head v. Erath Gen. Hosp., 458 So.2d 579 (La.App. 3d Cir.1984); Williams v. St. Paul Ins. Co., 419 So.2d 1302 (La.App. 4th Cir.1982). See also, Touchard v. Williams, 617 So.2d 885 (La.1993); Rodriguez v. La. Med. Mut. Ins. Co., 618 So.2d 390 (La.1993); Monteville v. Terrebonne Par. Con. Gov., 567 So.2d 1097 (La.1990); Keelen v. State Dept. of Culture and Rec., 463 So.2d 1287 (La.1985). Moreover, because the cap on damages imposed by each act harshly impacts the most severely injured victims, mitigating benefits or advantages provided for them by the laws must be liberally construed, and any disparity of treatment between such claimants by either law will be given careful scrutiny; in the absence of a showing that the classification substantially furthers an important state interest, it shall be stricken or reformed as a denial of the equal protection of the laws. See Williams v. Kushner, 549 So.2d 294 (La.1989).
Under the MMA, even before the adoption of the future medical care provisions, medical malpractice actions were no longer traditional adversarial matters. As a consequence of the statutory modifications, a medical malpractice claimant no longer has a full tort remedy against a qualified health care provider enforceable in an ordinary adverse judicial proceeding. A suit under the statutes is against the qualified health care provider, who may be held liable only for $100,000 in damages for the injuries caused by his malpractice. La.R.S. 40:1299.42B(2). Nevertheless, when the health care provider or his individual insurer pays the claimant $100,000, the PCF is deemed to be liable for the damages between this amount and $500,000. The PCF is in the nature of a statutory intervenor, not a true defendant, and may dispute the quantum of damages over $100,000 but not its own liability therefor. Stuka v. Fleming, 561 So.2d 1371 (La.1990); Felix v. St. Paul Fire and Marine Insurance Co., 477 So.2d 676 (La.1985).
In 1984, the legislature added provisions to the MMA affording "Future medical care and related benefits" to "patients in need." La.R.S. 40:1299.43. The purpose of the statutory provision is to grant severely injured malpractice victims, who have been deprived by the cap of compensation for any necessary medical service, a speedy, convenient, and inexpensive administrative remedy *1217 for the payment of actually incurred medical expenses, without limit except as tailored to the patient's needs. The legislation aims to remedy to an extent the damage cap's harsh tendency to prune recovery inversely to the injury; and it evinces legislative preference for an administrative medical relief program over simply raising the cap as other states have done. Kinney et al, supra. Another objective is to provide cost-effective, actuarially sound methods for financing and delivering compensation for medical services necessitated by medical malpractice.
The statutory scheme is plagued by misnomers and a cumbersomely complex structure, but the objects of the provisions are fairly clear and simple. First, the added MMA provision comprehends all past, present, and future medical and related care services necessitated by a qualified health care provider's malpracticenot just what is usually thought of as "future" medical needs. The broad category of services involved is defined as "all reasonable medical, surgical, hospitalization, physical rehabilitation, and custodial services and includes drugs, prosthetic devices, and other similar materials reasonably necessary in the provision of such services, after the date of the injury." La.R.S. 40:1299.43B(1) (emphasis added). Second, all malpractice victims or patients affected by the law are divided into two major classes: (i) Any patient who will be fully compensated for all damages, including an award for past, present, and future medical and related services, by a settlement and/or judgment no greater than the level set by the cap, id. A(5); (In such cases, which continue to be accommodated completely within the tort system, the PCF acts merely as an insurer to pay off its share of the liability in lump sum.); (ii) Any patient whose damages are so great that they consume the entire limits set by the cap without affording her full compensation for all past, present, and future medical and related care services necessitated by the malpractice, id. A(3), (4); (Such a person is called a "patient in need" by the statute and is entitled to receive from the PCF compensation or reimbursement for all actually incurred medical and related care expenses necessitated by the malpractice. Id. A(1), B(1), C).
During the brief history of the future medical benefits program, the responsibility for its administration has been vested in three different agencies, but the basic characteristics of the program have remained the same.[1] First, the claim for such benefits is a special statutory creation inherently different from a general tort law claim for a money judgment for damages. In fact, the program is designed as a remedy, although only a partial, carefully cost-effective one, to the harsh effects of recent changes in medical malpractice tort law. A claimant must meet a special definition of "need" to be entitled to benefits and may receive recompense for actual necessary medical expenses only so long as that need continues. Second, the statute authorizes a patient in need to file her claim only with the agency vested with the authority to administer the program. Section 1299.43C of the MMA expressly provides:
Once a judgment is entered in favor of a patient who is found to be in need of future medical care and related benefits or a settlement is reached between a patient and the patient's compensation fund in which the provision of medical care and related benefits is agreed upon and continuing as long as medical or surgical attention is reasonably necessary, the patient may make a claim to the patient's compensation fund through the board for all future medical *1218 care and related benefits directly or indirectly made necessary by the health care provider's malpractice unless the patient refuses to allow them to be furnished.
This feature of the statutory scheme alone clearly indicates that the agency has exclusive jurisdiction of future medical and related care claims, and this meaning becomes even more evident when other aspects of the legislation are taken into consideration. Third, the same agency that is granted the authority to receive and evaluate claims, and to pay, settle or reject them, is also vested with full powers to assure the cost-effectiveness of claims adjustment and the fiscal soundness of the PCF. The agency has the power to require a medical inspection of the need of each claimant for medical care benefits every six months without a court order and more often with a court order. La.R.S. 40:1299.43G. The agency may reduce the payment of claims pro rata below actual cost of medical expenses if the agency determines that the PCF would be exhausted by payment in full of all claims during any semi-annual period. Id. 44A(7). The agency is authorized to apply for and cause to be established appropriate surcharges to be imposed on health care providers and to collect surcharges from self-insured providers. Id. 44A(2).
In establishing the administrative program, the legislature gave statutory jurisdiction to the responsible agency for the purpose of granting, denying, or settling medical and related care services claims. Along with this initial decision-making responsibility the legislature gave clear authority to the agency to supervise the administration of continuing claims. The statutory provisions contemplate that the agency will develop expertise and experience in administering not only future medical care claims but also the moneys from which they are to be paid. The administering agency is required to develop specialized knowledge and assume the responsibility of establishing, and applying for appropriate surcharges to be imposed on health care providers and collecting surcharges from self-insured providers. La.R.S. 40:1299.44A(2), (3), (4).
Finally, the statutory provisions referring to the courts clearly indicate that they are not vested with original jurisdiction or decision making responsibility over future medical care claims. The courts are authorized to perform two limited functions: (i) certification of whether a malpractice victim is a patient in need, i.e., whether the victim's damages consumed the cap limits without affording her compensation for all actual medical expenses necessitated by the malpractice, La.R.S. 40:1299.43A; and (ii) random and ephemeral housekeeping matters, viz., the court is granted a very limited continuing jurisdiction to award attorney fees when the PCF fails to pay timely, id. 43E(2), and order more frequent physical examinations of a patient, upon reasonable cause. Id. 43G(5).
Given the minor, supporting role assigned to the courts, the expertise expected of the agency, the confidence the legislature has placed in the agency, and the active decision-making, administrative, and supervisory roles the agency is required to play, permitting courts throughout the state to conduct their own litigation involving future medical care claims would conflict with and hinder the regulatory scheme rather than supplement or promote its objectives. Indeed, the legislative scheme would be absurd and unworkable if courts were authorized to redetermine de novo reasonable, non-arbitrary decisions made by the agency with respect to the initial disposition of claims, the continuing need of patients for medical care benefits, the fiscal ability of the PCF to pay claims in full, the percentage of pro rata reduction of claim payments required to maintain the PCF's fiscal stability, and the level of surcharges necessary to maintain the PCF's actuarial soundness. Because all of these determinations are interrelated, the legislature clearly intended to assign the original decision-making function with respect to them to the expert administrative agency. Consequently, we conclude that the legislature intended to eliminate all judicial power in initial decision making or supervision over medical and related care claims and to vest such exclusive jurisdiction in the agency legislatively assigned to administer the PCF, subject only to court review of the agency's actions pursuant to well established *1219 principles of judicial review. Bowen v. Doyal, 259 La. 839, 253 So.2d 200 (1971). See also Matter of American Waste v. State Dept. of Environmental Quality, 588 So.2d 367 (La.1991), citing Loop Inc. v. Collector of Revenue, 523 So.2d 201 (La.1987) (on original hearing); Delta Bank & Trust Co. v. Lassiter, Comm'r of Financial Institutions, 383 So.2d 330 (La.1980) (Commissioner of Financial Institutions held to be a state agency whose non-adjudicative action in approving a bank charter was subject to administrative judicial review).
Conclusion
Accordingly: (1) Because the challenged claim was subject to the exclusive statutory jurisdiction of the administrative agency under Section 43 of the MMA and therefore was not subject to the jurisdiction of the courts, the prior court judgments insofar as they purported to adjudicate the issue are invalid and have no res judicata or preclusive effect; (2) Because the stipulation of the parties, the findings of the district court and the original judgment of the district court amount to a declaration that the plaintiffs' child is a patient in need, i.e., that her recovery consumes the whole amount permitted by the $500,000 cap, exclusive of the value of her necessary medical care and related benefits, we conclude that by law, consent, and judgment she is a patient in need and thus entitled to receive compensation for all unrepaired past, present, and future medical and related services necessitated by the malpractice.
For these reasons, we grant the application for certiorari, reverse the judgments of the court of appeal and the district court, and order the Patient's Compensation Fund Oversight Board ("PCFOB"), the agency currently authorized to administer the PCF and future medical and related care claims, to accept and respond to plaintiffs' claim in behalf of their child, in accordance with law and the opinion of this court. All costs of all judicial proceedings related to this matter are charged to the PCFOB.
IT IS SO ORDERED.
WATSON, J., concurs and assigns reasons.
HALL, J., concurs in part and dissents in part for reasons assigned.
LEMMON, J., dissents and assigns reasons.
MARCUS, J., not on panel.
WATSON, Justice, concurs and assigns the following reasons:
The court of appeal opinion in Kelty v. Brumfield, 534 So.2d 1331 (La.App. 4th Cir. 1988), reserved plaintiffs' quantum rights under the pending case of Williams v. Kushner, 549 So.2d 294 (La.1989), and that reservation extends to future medical expenses. The PCF's exception of res judicata should not have been sustained.
Therefore, I respectfully concur.
HALL, Justice, concurring in part and dissenting in part.
[Filed March 1, 1994.]
Because it seems that the application of res judicata principles will work an injustice on the applicants under the unusual circumstances of this case, I concur in the granting of the writ. I disagree and dissent, however, for both procedural and substantive reasons, from the peremptory disposition which reverses the judgment of the district and appellate courts on grounds not presented by the applicants nor briefed or argued by any of the parties.
In accordance with usual procedure, the case should be docketed for briefing and oral argument, followed by an opinion. Peremptory grants and orders are generally reserved for clear-cut cases involving well established principles of law. This is not such a case; to the contrary, it involves complex issues of res judicata and the per curiam opinion is grounded on novel principles of jurisdiction. This is not to imply that the case has not been carefully considered. It has, but without the benefit of adversary presentations by the competing parties.
Further, although I believe there may be supportable legal grounds for avoiding the preclusive effect of res judicata in this case, I find the reasoning of the per curiam insupportable. *1220 The majority errs when it finds that exclusive original jurisdiction of a claim for future medical benefits is vested in the Patient's Compensation Fund Oversight Board, and that the court lacked subject matter jurisdiction in the two previous proceedings which proceeded to final, definitive judgments. Inconsistently in this third proceeding, the court in its per curiam renders judgment granting relief to the applicants after finding that the court lacks subject matter jurisdiction over claims for future medical benefits.
The majority per curiam opinion concludes that by virtue of the medical malpractice act, "the legislature intended to eliminate all judicial powers in initial decision making or supervision over medical and related care claims and to vest such exclusive jurisdiction in the agency legislatively assigned to administer the Patient's Compensation Fund, subject only to court review of the agency's actions pursuant to well established principles of judicial review." To the contrary, it is clear to me that the act affirmatively confirms the district court's subject matter jurisdiction to make the initial determination of a claimant's entitlement to future medical care. LSA-R.S. 40:1299.43(C) provides that:
Once a judgment is entered in favor of a patient who is found to be in need of future medical care and related benefits or a settlement is reached between a patient and the patient's compensation fund in which the provision of medical care and related benefits is agreed upon and continuing as long as medical or surgical attention is reasonably necessary, the patient may make a claim to the patient's compensation fund through the board for all future medical care and related benefits directly or indirectly made necessary by the health care provider's malpractice unless the patient refuses to allow them to be furnished.
The above statute, upon which the majority relies heavily, clearly states that the patient may make a claim for future medical expenses to the Patient's Compensation Fund Oversight Board only after a court issues a judgment against the health care provider finding liability for expenses related to future medical care, or a court-approved settlement between the parties is made to the same effect. Thus, the initial determination of a claimant's entitlement to future medical care is, under the statute, to be made by the court. Rather than divesting the court of subject matter jurisdiction in this respect, the statutory scheme confirms the court's original jurisdiction.
When the first proceeding was filed, the Patient's Compensation Fund was under the administration of the Commissioner of Insurance and Attorney General. The commissioner resisted and defended against the claim on the basis of prescription and, after adoption of the 1984 amendment, the inapplicability of the amendment to this pending claim. Certainly the court had jurisdiction to determine the prescription and amendment applicability issues. Obviously, the Commissioner of Insurance or Attorney General had no jurisdiction, much less exclusive jurisdiction, to make those legal determinations bearing on the claimant's entitlement, vel non, to future medical care. And, by defending against plaintiff's claims, it is apparent that the administrative agencies rejected the claim.
Further, it is not within the legislative power, absent authorization in the constitution, to limit or remove the district court's original jurisdiction over civil matters. Jurisdiction over all civil matters is vested in the district courts by Article 5 § 16 of the Louisiana Constitution of 1974, which provides that "[e]xcept as authorized by this constitution, a district court shall have original jurisdiction of all civil or criminal matters." As this provision notes, the court's power cannot be limited short of a constitutional provision. See Moore v. Roemer, 567 So.2d 75 (La. 1990).
The majority opinion errs in concluding that the court was without jurisdiction to adjudicate the issues presented in the two previous proceedings and in this instant proceeding, and consequently errs in holding that res judicata is not applicable because of the court's lack of jurisdiction. However, as previously stated, it is my view that the writ should be granted to carefully consider the arguments urged by the applicants which would avoid the preclusive effect of res judicata *1221 on other grounds. The grounds urged are principally the extraordinary circumstances of this case where the amendment allowing recovery of future medical expenses over and above the cap was held to be inapplicable to this pending claim at a time when the same issue was pending before this court in the Williams case, which ultimately held to the contrary. Applicants also urge that since medical expenses continued to accrue after the original decision in this case and after the decision in the Williams case, the original decision should not be res judicata as to medical expenses accruing after those decisions were rendered. These issues deserve the careful attention of this court.
LEMMON, Justice, dissenting.
[Filed Feb. 25, 1994; Revised March 8, 1994.]
At the time that plaintiffs' cause of action came into existence, the Medical Malpractice Act contained a $500,000 limitation on the amount of damages that a malpractice victim could recover. This limitation included past and future medical expenses, as well as all other damages.
After plaintiffs' cause of action came into existence, the Legislature adopted Act 435 of 1984, which amended the Medical Malpractice Act to exclude "future medical expenses" from the limitation.[1] In plaintiffs' malpractice action against the health care providers, the district court took notice of Act 435 and refused to grant plaintiffs the benefits of the Act, because the Act was by its terms effective only as to malpractice claims filed after September 1, 1984. Viewing the 1983 filing for a medical review panel as the date the claim was filed, the court denied plaintiffs any recovery of medical expenses in addition to the limited $500,000 recovery of all other damages. The court of appeal expressly affirmed the district court as to the non-applicability of Act 435, 534 So.2d 1331 (La.App. 4th Cir.1988), and this court denied certiorari, 536 So.2d 1222 (La.1989),[2] a fact not mentioned by the majority.
The majority takes the position that res judicata does not control because the district court did not have subject matter jurisdiction to adjudicate plaintiffs' claim for medical expenses in excess of the $500,000 limitation, which could only be viable if Act 435 were applicable. I disagree for several reasons. First, the district court under La. Const. art. V, § 16 had original jurisdiction over all civil and criminal matters, and the applicability of a legislative act to a specific claim surely constitutes a civil matter. Significantly, the district court's 1988 judgment on Act 435's applicability, which has now acquired the authority of the thing adjudged, is what is now barring plaintiffs' recovery of medical expenses in excess of the cap; it is not the decision of any court or administrative tribunal on the validity of the medical expenses.[3] Moreover, even if the Patient's Compensation Fund Oversight Board was intended to be a quasi-judicial tribunal where a medical malpractice victim was required to present claims for medical expenses and thereby to exhaust his or her administrative remedies before going to court, this Board was never intended to decide the applicability of legislative acts to specific claims.[4] That was solely a decision for the court.
*1222 Second, La.Rev.Stat. 40:1299.43C, which the majority relies upon to confer original subject matter jurisdiction over medical expenses to the Board, had not been enacted when plaintiffs' cause of action came into existence in 1978 or when plaintiffs first presented their claim in 1983. Therefore, that statute can have no applicability to this case.
Third, La.Rev.Stat. 40:1299.43C does not purport to give the Board authority to adjudicate medical expense claims in the first instance and as a prerequisite for the malpractice victim to present his or her claims to the court. The statute simply permits[5] the malpractice victim to "make a claim to the patient's compensation fund through the board for all future medical care and related expenses" after the court, in exercising original subject matter jurisdiction, has rendered a judgment in favor of the victim decreeing a need for future medical care or after the parties have reached a court approved settlement providing for such care.[6] The Board is the obligor on valid claims, not a quasi-judicial tribunal exercising original jurisdiction (which the district court has already exercised).
This is a heart-wrenching case because the Medical Malpractice Act denies the malpractice victim recovery of her damages, which in my view is a denial of equal protection of the laws. The case is even more sympathetic because this court, at the time of denying certiorari on the issue of the applicability of Act 435 of 1984, had under advisement another case in which we had granted certiorari to decide the constitutionality of the $500,000 limitation, but which also contained the issue of the retroactive application of Act 435 as an alternative grounds for partial recovery. See Williams v. Kushner, 549 So.2d 294 (La. 1989). Had we realized at the time of acting on the present plaintiffs' application for certiorari that the Williams case contained the same issue, we probably would have withheld action on the application until finality of our judgment in the Williams case. Ironically, when we rendered the Williams decision, we did not reach the constitutional issue regarding the limitation, but did allow retroactive application of Act 435.
In the respect that the malpractice victims in Williams were allowed retroactive recovery of Act 435, a remedy denied the present malpractice victim, the result in this case appears on its face to be unfair. However, this case is no different from any other in which a legal argument is presented and rejected time and time again by this court until the court finally changes its position and adopts the previously rejected theory.[7] Because of res judicata, this court cannot "do justice" and allow a party whose claim was previously rejected to benefit from the court's subsequent change of position; we can only "do justice" to those litigants whose cases reach this court after the change of position is adopted.
NOTES
[1] Before the advent of future medical care benefits the MMA simply created the Patients' Compensation Fund to be collected, received, used, and disposed of in the defense, settlement, and payment of court judgments exclusively by the Commissioner of Insurance. 1975 La.Acts No. 817, § 1299.44. In 1984, the MMA was amended to add future medical and related care benefits to be paid out of the PCF, and the authority to administer the fund and to make original disposition of claims for medical care benefits against the fund was divided between the Commissioner and the Attorney General. 1984 La. Acts No. 435, §§ 1299.43C, 44. Finally, in 1990, the MMA was amended to grant the exclusive authority and responsibility for the administration of the PCF and the disposition of future medical care claims to the Patients' Compensation Fund Oversight Board, a new agency created by the Act for this purpose. 1990 La.Acts No. 967, §§ 1299.43C, 44D.
[1] This amendment was interpreted to encompass all medical expenses, both past and future. Lamark v. NME Hospitals, Inc., 522 So.2d 634 (La.App. 4th Cir.), cert. denied, 526 So.2d 803 (La.1988).
[2] In their application for certiorari, plaintiffs expressly assigned as error the lower courts' refusal to allow recovery under Act 435 of medical expenses in addition to other damages covered by the $500,000 limitation.
[3] Even under the majority's jurisdiction theory, the administrative tribunal would have power and authority only to approve or disapprove medical expenses incurred after the district court, exercising original jurisdiction, finds the health care provider liable and the malpractice victim in need of additional medical expenses. In deciding liability and other damages, the district court would adjudicate medical expenses incurred prior to trial.
[4] I simply cannot believe that the Legislature ever intended for a malpractice victim to present part of his or her claim (liability and all damages except medical expenses) to the court, while requiring the victim to present the claim for medical expenses to the Board as a tribunal of original jurisdiction. As to medical expenses incurred after trial, claims should be presented for payment or denial to the Board as the obligor, and not as a quasi-judicial tribunal.
[5] The statute provides that a malpractice victim "may make a claim to the patient's compensation fund through the board for all future care and related benefits...." The word "may" is permissive and does not mean "shall" make a claim to the Board exclusive of the court.
[6] It appears that the majority, in according original subject matter jurisdiction over future medical expenses to the Board, intended for the Board to adjudicate claims only for those medical expenses incurred after the district court denied recovery beyond the cap of all medical expenses incurred to date. The district court, however, effectively denied all past and future medical expenses (beyond the cap) by denying applicability of Act 435.
[7] This court rejected innumerable claims for mental anguish caused by injury to third persons until the decision in Lejeune v. Rayne Memorial Hospital, 556 So.2d 559 (La.1990), changed the law to permit such claims under limited circumstances. Although facially unfair, the mental anguish claimants whose claims were rejected at this court's certiorari conferences in the weeks preceding the grant of certiorari in Lejeune are barred by res judicata from recovering what Mrs. Lejeune was allowed to recover. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1491459/ | 970 S.W.2d 540 (1998)
UNITED SERVICES AUTOMOBILE ASSOCIATION, Petitioner,
v.
Dianna KEITH, Respondent.
No. 97-0871.
Supreme Court of Texas.
June 5, 1998.
*541 James V. Sylvester, Austin, for petitioner.
Linda L. Daniels, San Antonio, for respondent.
PER CURIAM.
In these cross-appeals, the court of appeals described this case as one in which it "explore[d] the outer boundaries of the bystander cause of action in Texas." 953 S.W.2d 365. Because the court of appeals exceeded those boundaries when it held that a cause of action may exist under the facts presented here, we reverse the judgment of the court of appeals and render judgment for United States Automobile Association (USAA).
The facts are not in dispute. Dianna Keith's daughter, Lyndsay Keith, was a passenger in a car that swerved out of control and hit a tree. The owner of the vehicle was uninsured or underinsured. The accident occurred approximately one block from the Keith residence where Dianna Keith was asleep at the time of the crash. Shortly after the accident, Adam Hahn, a friend of Lyndsay's who had been following the car in which she was a passenger, drove to the Keith residence and awoke Dianna Keith. From the summary judgment evidence, it appears that Hahn was in shock and was only able to tell her that his urgency had "something to do with Lyndsay." Hahn rushed Dianna Keith to the accident scene, where the wrecked car was still smoking and a tail-light was blinking. Keith could not see her daughter, but she could hear her inside the wreckage making "scary noises and crying out."
After Lyndsay was removed from the car, Dianna Keith accompanied her daughter in the ambulance to a location where a helicopter took Lyndsay to the hospital. Keith later arrived at the hospital and waited while her daughter was in the operating room. She was informed around 3:20 a.m. that Lyndsay had died.
Dianna Keith was insured by USAA. She presented claims under her uninsured/underinsured motorist policy as the representative of Lyndsay's estate, as a beneficiary under the Texas Wrongful Death Statute, and for her own injuries as a bystander. USAA settled the estate's claims for $20,000 but denied Dianna Keith's bystander recovery claim. Keith filed suit on a bystander theory of recovery and elected not to pursue her wrongful death claim. Both parties moved for summary judgment. The trial court granted summary judgment for Dianna Keith, but the court of appeals reversed and remanded, concluding that there was a fact issue. Each party filed a petition for review in this Court.
Texas has adopted the bystander elements that the California Supreme Court identified in Dillon v. Legg, 68 Cal. 2d 728, 69 Cal. Rptr. 72, 441 P.2d 912, 920 (1968). See Freeman v. City of Pasadena, 744 S.W.2d 923, 923-24 (Tex.1988); see also Edinburg Hosp. Auth. v. Trevino, 941 S.W.2d 76, 80 (Tex.1997); Boyles v. Kerr, 855 S.W.2d 593, 597-98 (Tex.1993); Reagan v. Vaughn, 804 S.W.2d 463, 467 (Tex.1990). To recover as a bystander, a plaintiff is required to establish that:
*542 (1) The plaintiff was located near the scene of the accident, as contrasted with one who was a distance away from it;
(2) The plaintiff suffered shock as a result of a direct emotional impact upon the plaintiff from a sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence; and
(3) The plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.
See Freeman, 744 S.W.2d at 923-24.
The court of appeals correctly recognized that the existence of a bystander cause of action depends on whether the plaintiff can prove these three elements. However, the court of appeals erroneously concluded that although there was "little dispute concerning the operative facts ..., the ultimate issue of whether Mrs. Keith had a contemporaneous perception of the accident is in and of itself a material fact issue in dispute." 953 S.W.2d at 368.
The bystander elements are flexible and should be applied on a case-by-case basis. Freeman, 744 S.W.2d at 924. But, when the material facts are undisputed, as they are here, whether the plaintiff is entitled to recover as a bystander is a question of law. Id. at 923.
The facts of this case are similar to those in Freeman. John Freeman sued the City of Pasadena for mental anguish damages he allegedly suffered because of an automobile accident involving two of his stepsons. Id. Freeman was at home when the accident occurred. An unidentified person rang the front doorbell and informed Freeman of the accident. Freeman rushed to the scene where he observed the wrecked automobile and saw one of his stepsons covered with blood and lying on a stretcher. Id. Based on "the undisputed facts," we concluded that Freeman "did not contemporaneously perceive the accident," and therefore, we declined to allow a bystander cause of action. Id. at 923-24.
Like Freeman, the undisputed facts in this case show that Dianna Keith was not at the scene when the accident occurred. She did not see or hear the crash. The emotional impact that she undoubtedly suffered did not result from a sensory and contemporaneous observance of the accident. In this regard, Dianna Keith is in the same position as any other close relative who sees and experiences the immediate aftermath of a serious injury to a loved one. For example, we have not recognized bystander recovery simply because a relative arrived on the scene in time to see an injured loved one placed in an ambulance. See Freeman, 744 S.W.2d at 923. The fact that Dianna Keith arrived on the scene while rescue operations were underway and witnessed her daughter's pain and suffering at the site of the accident rather than at the hospital or some other location does not affect the analysis. Although we have not insisted that a bystander must be within a "zone of danger" to recover, Texas law still requires the bystander's presence when the injury occurred and the contemporaneous perception of the accident. See id. at 923.
Accordingly, without hearing oral argument, the Court grants both USAA's and Dianna Keith's petitions for review, reverses the judgment of the court of appeals, and renders judgment that Keith take nothing on her bystander claim. TEX.R.APP. P. 59.1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623172/ | 609 S.W.2d 743 (1980)
BOATLAND OF HOUSTON, INC., Petitioner,
v.
Valerie BAILEY et al., Respondents.
No. B-8827.
Supreme Court of Texas.
July 30, 1980.
On Rehearing December 17, 1980.
*745 Butler, Binion, Rice, Cook and Knapp, Donald B. McFall, Richard A. Sheehy and Richard E. Gray, III, Houston, for petitioner.
Kronzer, Abraham & Watkins, James E. Robinson, Edwards & Hitt, Tom Edwards, Houston, for respondents.
McGEE, Justice.
This is a product defect case involving an alleged defect in the design of a 16-foot bass boat. The plaintiffs were the widow and adult children of Samuel Bailey, who was killed in a boating accident in May of 1973. They sued under the wrongful death statute, alleging that Samuel Bailey's death occurred because the boat he was operating was defectively designed. The boat had struck a partially submerged tree stump, and Bailey was thrown into the water. With its motor still running, the boat turned sharply and circled back toward the stump. Bailey was killed by the propeller, but it is unclear whether he was struck when first thrown out or after the boat circled back toward him.
Bailey's wife and children sought damages under a strict liability theory from the boat's seller, Boatland of Houston, Inc. At trial, they urged several reasons why the boat was defectively designed, including inadequate seating and control area arrangement, unsafe stick steering and throttle design, and the failure of the motor to automatically turn off when Bailey was thrown from the boat.
The trial court rendered a take-nothing judgment based on the jury's failure to find that the boat was defective and findings favorable to Boatland on several defensive issues. The court of civil appeals, with one justice dissenting, reversed and remanded the cause for a new trial because of errors in the admission of evidence and the submission of the defensive issues.[1] 585 S.W.2d 805. We reverse the judgment of the court of civil appeals and affirm that of the trial court.
EVIDENCE OF DESIGN DEFECT
The alleged design defects are causally related to Bailey's being thrown from the boat and struck by the propeller and not to the boat's hitting the stump. Nevertheless, the same rules of strict liability govern cases in which the defect caused the initial accident and cases in which the defect caused the injuries. Turner v. General Motors Corp., 584 S.W.2d 844, 848 (Tex. 1979).
In Turner v. General Motors Corp., this court discussed the strict liability standard of "defectiveness" as applied in design defect cases. Whether a product *746 was defectively designed requires a balancing by the jury of its utility against the likelihood of and gravity of injury from its use. The jury may consider many factors before deciding whether a product's usefulness or desirability are outweighed by its risks. Their finding on defectiveness may be influenced by evidence of a safer design that would have prevented the injury.[2]Turner v. General Motors Corp., supra at 849. See Keeton, Product Liability and the Meaning of Defect, 5 St. Mary's L.J. 30, 38 (1973); Wade, Strict Tort Liability of Manufacturers, 19 Sw.L.J. 5, 17 (1965). Because defectiveness of the product in question is determined in relation to safer alternatives, the fact that its risks could be diminished easily or cheaply may greatly influence the outcome of the case.
Whether a product was defectively designed must be judged against the technological context existing at the time of its manufacture. Thus, when the plaintiff alleges that a product was defectively designed because it lacked a specific feature, attention may become focused on the feasibility of that featurethe capacity to provide the feature without greatly increasing the product's cost or impairing usefulness. This feasibility is a relative, not an absolute, concept; the more scientifically and economically feasible the alternative was, the more likely that a jury may find that the product was defectively designed. A plaintiff may advance the argument that a safer alternative was feasible with evidence that it was in actual use or was available at the time of manufacture. Feasibility may also be shown with evidence of the scientific and economic capacity to develop the safer alternative. Thus, evidence of the actual use of, or capacity to use, safer alternatives is relevant insofar as it depicts the available scientific knowledge and the practicalities of applying that knowledge to a product's design. This method of presenting evidence of defective design is not new to the Texas law of product liability. See, e. g., Rourke v. Garza, 530 S.W.2d 794 (Tex.1975); Henderson v. Ford Motor Co., 519 S.W.2d 87 (Tex. 1974); Williams v. General Motors Corp., 501 S.W.2d 930 (Tex.Civ.App.Houston [1st Dist.] 1973, writ ref'd n.r.e.); Hartzell Propeller Co. v. Alexander, 485 S.W.2d 943 (Tex.Civ.App.Waco 1972, writ ref'd n.r. e.); Pizza Inn, Inc. v. Tiffany, 454 S.W.2d 420 (Tex.Civ.App.Waco 1970, no writ).
As part of their case-in-chief, the Baileys produced evidence of the scientific and economic feasibility of a design that would have caused the boat's motor to automatically shut off when Bailey fell out. According to the Baileys, the boat's design should have incorporated an automatic cut-off system or the boat should have been equipped with a safety device known as a "kill switch."
The deposition of J. C. Nessmith, president of Boatland, was read, in which he stated that there were presently several types of "kill switches" available, and that they were now installed by Boatland when it assembled and sold bass boats.
The deposition of Bill Smith, who was a passenger in the boat with Bailey at the time of the accident, was also read. Smith had not heard of automatic kill switches before the accident, but afterwards he got one for his own boat.
The deposition testimony of George Horton, the inventor of a kill switch designed for open-top carriers, was also introduced. Horton began developing his "Quick Kill" in November of 1972 and applied for a patent in January of 1973. According to Horton, his invention required no breakthroughs in the state of the art of manufacturing or production. He stated that his invention was simple: a lanyard connects the operator's body to a device that fits over the ignition key. If the operator moves, the lanyard is pulled, the device rotates, and the *747 ignition switch turns off. When he began to market his "Quick Kill," the response by boat dealers was very positive, which Horton perceived to be due to the filling of a recognized need. He considered the kill switch to be a necessary safety device for a bass boat with stick steering. If the kill switch were hooked up and the operator thrown out, the killing of the motor would prevent the boat from circling back where it came from. Horton also testified that for 30 years racing boats had been using various types of kill switches. Thus, the concept of kill switches was not new.
Robert Swint, a NASA employee who worked with human factors engineering, testified that he had tested a bass boat similar to Bailey's. He concluded that the boat was deficient for several reasons and that these deficiencies played a part in Bailey's death. According to Swint, when the boat struck a submerged object and its operator became incapacitated, the seating and control arrangement caused the boat to go into a hard turn. If the operator were thrown out, the boat was capable of coming back and hitting him. Swint also stated that a kill switch would have cut off the engine and the motor would not have been operative when it hit Bailey.
Jim Buller, who was fishing in the area when Bailey was killed, testified that his own boat did not have a kill switch at that time, but he ordered one within "a matter of days."
Boatland elicited evidence to rebut the Baileys' evidence of the feasibility of equipping boats with kill switches or similar devices in March of 1973, when the boat was assembled and sold. The Baileys had been granted a running objection to all evidence of this nature. In response to the Baileys' evidence that kill switches were presently used by Boatland, Nessmith testified that he did not know of kill switches until the spring of 1973, and first began to sell them a year later.
In response to the Baileys' evidence that the "Quick Kill" was readily available at the time of trial, Horton stated on cross-examination that until he obtained the patent for his "Quick Kill" in 1974 he kept the idea to himself. Before he began to manufacture them, he investigated the market for competitive devices and found none. The only applications of the automatic engine shut-off concept in use at the time were homemade, such as on racing boats. He first became aware of competitive devices in August of 1974.
Boatland introduced other evidence to show that kill switches were not available when Bailey's boat was sold. The deposition of Jimmy Wood, a game warden, was read in which he stated that he first became aware of kill switches in 1975. He testified that he had a "Quick Kill" on his boat since 1976, and he thought it was the only kill switch made. Willis Hudson, who manufactured the boat operated by Bailey, testified that he first became aware of kill switches in 1974 or 1975 and to his knowledge no such thing was available before then. Ralph Cornelius, the vice-president of a marine appliance dealership, testified that kill switches were not available in 1973. The first kill switch he saw to be sold was in 1974, although homemade "crash throttles" or foot buttons had long been in use.
Apart from evidence of the feasibility of an automatic motor cut-off design, evidence was introduced pertaining to whether such a design would have prevented Bailey's injuries. After considering the feasibility and effectiveness of an alternative design and other factors such as the utility and risk, the jury found that the boat was not defective. The trial court rendered judgment for Boatland. The Baileys complained on appeal that the trial court erred in admitting Boatland's evidence that kill switches were unavailable when Bailey's boat was assembled and sold. The court of civil appeals agreed, holding that the evidence was material only to the care exercised by Boatland and thus irrelevant in a strict liability case.
In its appeal to this court, Boatland contends that the court of civil appeals misconstrued the nature and purpose of its evidence. According to Boatland, when the Baileys introduced evidence that kill *748 switches were a feasible safety alternative, Boatland was entitled to introduce evidence that kill switches were not yet available when Bailey's boat was sold and thus were not a feasible design alternative at that time.
The primary dispute concerning the feasibility of an alternative design for Bailey's boat was the "state of the art" when the boat was sold. The admissibility and effect of "state of the art" evidence has been a subject of controversy in both negligence and strict product liability cases. In negligence cases, the reasonableness of the defendant's conduct in placing the product on the market is in issue. Evidence of industry customs at the time of manufacture may be offered by either party for the purpose of comparing the defendant's conduct with industry customs. An offer of evidence of the defendant's compliance with custom to rebut evidence of its negligence has been described as the "state of the art defense." See generally 2 L. Frumer & M. Friedman, Products Liability § 16A[4][i] (1980). In this connection, it is argued that the state of the art is equivalent to industry custom and is relevant only to the issue of the defendant's negligence and irrelevant to a strict liability theory of recovery.
In our view, "custom" is distinguishable from "state of the art." The state of the art with respect to a particular product refers to the technological environment at the time of its manufacture. This technological environment includes the scientific knowledge, economic feasibility, and the practicalities of implementation when the product was manufactured. Evidence of this nature is important in determining whether a safer design was feasible. The limitations imposed by the state of the art at the time of manufacture may affect the feasibility of a safer design. Evidence of the state of the art in design defect cases has been discussed and held admissible in other jurisdictions. See, e. g., Raney v. Honeywell, Inc., 540 F.2d 932 (8th Cir. 1976); Caterpillar Tractor Co. v. Beck, 593 P.2d 871 (Alaska 1979); Barker v. Lull Engineering Co., 20 Cal. 3d 413, 573 P.2d 443, 143 Cal. Rptr. 225 (1978); Kerns v. Engelke, 76 Ill. 2d 154, 28 Ill. Dec. 500, 390 N.E.2d 859 (1979); Cepeda v. Cumberland Engineering Co., Inc., 76 N.J. 152, 386 A.2d 816 (1978). See generally J. Sales & J. Perdue, The Law of Strict Tort Liability in Texas 41 (1977). Note, The State of the Art Defense in Strict Products Liability, 57 Marq.L.Rev. 491 (1974). Note, Product Liability Reform Proposals: The State of the Art Defense, 43 Albany L.Rev. 944, 944-45 (1979). In this case, the evidence advanced by both parties was relevant to the feasibility of designing bass boats to shut off automatically if the operator fell out, or more specifically, the feasibility of equipping bass boats with safety switches.
The Baileys offered state of the art evidence to establish the feasibility of a more safely designed boat: They established that when Bailey's boat was sold in 1973, the general concept of a boat designed so that its motor would automatically cut off had been applied for years on racing boats. One kill switch, the "Quick Kill," was invented at that time and required no mechanical breakthrough. The Baileys were also allowed to show that other kill switches were presently in use and that the defendant itself presently installed them.
Logically, the plaintiff's strongest evidence of feasibility of an alternative design is its actual use by the defendant or others at the time of manufacture. Even if a safer alternative was not being used, evidence that it was available, known about, or capable of being developed is relevant in determining its feasibility. In contrast, the defendant's strongest rebuttal evidence is that a particular design alternative was impossible due to the state of the art. Yet the defendant's ability to rebut the plaintiff's evidence is not limited to showing that a particular alternative was impossible; it is entitled to rebut the plaintiff's evidence of feasibility with evidence of limitations on feasibility. A suggested alternative may be invented or discovered but not be feasible for use because of the time necessary for its application and implementation. Also, a suggested alternative may be available, but *749 impractical for reasons such as greatly increased cost or impairment of the product's usefulness. When the plaintiff has introduced evidence that a safer alternative was feasible because it was used, the defendant may then introduce contradictory evidence that it was not used.
Thus in response to the Baileys' evidence of kill switch use in 1978, the time of trial, Boatland was properly allowed to show that they were not used when the boat was sold in 1973. To rebut proof that safety switches were possible and feasible when Bailey's boat was sold because the underlying concept was known and the "Quick Kill," a simple, inexpensive device had been invented, Boatland was properly allowed to show that neither the "Quick Kill" nor any other kill switch was available at that time.
It could reasonably be inferred from this evidence that although the underlying concept of automatic motor cut-off devices was not new, kill switches were not as feasible an alternative as the Baileys' evidence implied. Boatland did not offer evidence of technological impossibility or absolute nonfeasibility; its evidence was offered to show limited availability when the boat was sold. Once the jury was informed of the state of the art, it was able to consider the extent to which it was feasible to incorporate an automatic cut-off device or similar design characteristic into Bailey's boat. The feasibility and effectiveness of a safer design and other factors such as utility and risk, were properly considered by the jury before it ultimately concluded that the boat sold to Bailey was not defectively designed.[3]
In cases involving strict liability for defective design, liability is determined by the product's defective condition; there is no need to prove that the defendant's conduct was negligent. Considerations such as the utility and risk of the product in question and the feasibility of safer alternatives are presented according to the facts as they are proved to be, not according to the defendant's perceptions. Thus, even though the defendant has exercised due care his product may be found defective. When the Baileys introduced evidence of the use of kill switches, Boatland was entitled to introduce rebuttal evidence of nonuse at the time of manufacture due to limitations imposed by the state of the art. Evidence offered under these circumstances is offered to rebut plaintiff's evidence that a safer alternative was feasible and is relevant to defectiveness. It was not offered to show that a custom existed or to infer the defendant's compliance therewith. We would be presented with a different question if the state of the art in 1973 with respect to kill switches had not been disputed and Boatland had attempted to avoid liability by offering proof that Bailey's boat complied with industry custom.
THE DEFENSIVE ISSUES
In its remaining points of error Boatland contends that the submission of several defensive issues was proper, and alternatively, error in their submission, if any, was harmless. Three defensive issues were submitted, and the jury found that Bailey had misused the boat, had failed to follow proper warnings and instructions, and had assumed the risk of injury in using the boat as he did.
The Baileys reply that the submission of the misuse and assumption of the risk issues was not warranted by any evidence. They also urge that failure to follow warnings was not a defense in this case.
Assuming without deciding that the Baileys are correct, we believe that the error, if any, in the submission of the defensive issues was harmless. The improper submission of issues constitutes reversible error when harm is suffered by the complaining *750 party. Whether harm has been suffered may be considered in light of the charge as a whole. Texas Employers Insurance Association v. McKay, 146 Tex. 569, 210 S.W.2d 147, 149 (1948). Generally, error in the submission of an issue is harmless when the findings of the jury in answer to other issues are sufficient to support the judgment. Texas & New Orleans Railroad Co. v. McGinnis, 130 Tex. 338, 109 S.W.2d 160, 163 (1937). An exception exists, however, when the erroneously submitted issue confuses or misleads the jury. H. E. Butt Grocery Co. v. Johnson, 226 S.W.2d 501, 504 (Tex.Civ.App.San Antonio 1949, writ ref'd n.r.e.).
In this case, the jury failed to find that Bailey's boat was defective. This finding was sufficient to support the judgment of the trial court. The focus of the defensive issues was different from the defectiveness issue. The Baileys have failed to demonstrate, and our review of the record fails to disclose, how erroneous submission of the defensive issues would probably result in an improper verdict.
CONCLUSION
For the reasons stated above the judgment of the court of civil appeals is reversed. The judgment rendered by the trial court, that the Baileys take nothing against Boatland, is affirmed.
POPE, J., concurring, in which BARROW, J., joins.
POPE, Justice, concurring.
I concur in the majority opinion because the jury finding that there was no defect disposes of the cause. I also concur in its holding that state of the art may be developed by the evidence directed at the issue concerning defect, but that state of the art is not itself an issue which should be submitted to the jury. This case, however, dramatically illustrates the problems with shadowy distinctions between defenses in products cases and negligence cases, and the need to reexamine certain defenses.
Defendant Boatland asserted three defenses, each of which the court submitted to the jury, and all of which the jury answered favorably to the defendant Boatland. The jury made findings that (1) decedent misused the boat, (2) decedent failed to follow proper warnings and instructions, and (3) decedent voluntarily assumed the risk.
It is my opinion that all of those defensive issues are issues which mix and ask about the decedent's contributory negligence. The defendant alleged that the decedent misused the boat in these ways: (1) he drove the boat at an unsafe speed, (2) he failed to keep a proper lookout, (3) he permitted passengers to stand in the boat, and (4) he failed to place the motor in a tilt position. Those are traditional contributory negligence allegations even though we call them "misuse" when we move from a negligence case to a products case.
Strict liability is a doctrine which excuses a harmed plaintiff from proving privity of contract and that the seller of goods was negligent. The doctrine looks to the defect in the product and not to the conduct of the supplier. That rule which excuses proof is inapplicable, however, to the plaintiff, because his conduct is and ought to be examined to determine whether it was up to standard or was substandard. Misuse, as in this case, does look to the plaintiff's conduct. Hence, while the conduct of the manufacturer or supplier is not a suitable inquiry in products liability cases, the conduct of the plaintiff is an important inquiry, and we should clarify this fact.
One of the policy reasons for the doctrine of strict liability is that the manufacturer or supplier can spread the losses occasioned by the supplier's defective product; but in spreading those losses, the general consumer should not have to pay additionally for that percentage of the loss that was caused by the plaintiff's own fault.
In an action in which the plaintiff pleads an action in contributory negligence and alternatively as strict liability, the defendant receives an issue on contributory negligence and another issue on misuse. The same evidence bears on both. This is, however, *751 a double submission of the same acts or omissions. If the jury answers that there was no contributory negligence, but that there was misuse, we run into the problem of conflicts.
Misuse is really contributory negligence, and it would simplify trials if we treated it as such. We should recognize this fact and hold a plaintiff to the standard of an ordinary prudent person or of reasonableness in his use of the product. We should eliminate the confusing misuse defense and return to contributory negligence as an appropriate defense in strict liability cases.
Voluntary assumption of risk should also be eliminated as a viable defense in strict liability cases. There is no more reason for an all-or-nothing defense in strict liability cases than there is in negligence cases. We held in Farley v. M M Cattle Co., 529 S.W.2d 751 (Tex.1975), writing about voluntary assumption of risk, "the reasonableness of an actor's conduct in confronting a risk will be determined under principles of contributory negligence." The doctrine is a variant of contributory negligence, and it stands alone, as an all-or-nothing defense in strict liability cases. As stated by Professor Hadley Edgar in 11 Texas Tech.L.Rev. 22, 50 (1979):
The strict liability tortfeasor should be allowed a reduction in damages corresponding to the quantum of the victim's contributory negligence. The distribution of loss between the victim and several tortfeasors, either with or without settlement should be applied uniformly rather than turning upon whether the nonsettling tortfeasor was negligent or strictly liable. The legislature's failure to act leaves the supreme court no reasonable alternative except to resolve these issues when next called upon to do so.
The defense under the more familiar format of contributory negligence, which would subsume and supplant the confusing defenses of misuse and voluntary assumption of risk could restore simplicity to the trials of product liability cases. Daly v. General Motors Corp., 20 Cal. 3d 725, 144 Cal.Rptr.380, 575 P.2d 1162 (1978). In such a trial, the fault of the supplier and the plaintiff should be apportioned between the products defect and the plaintiffs' sub-par conduct. See, e. g., Caterpillar Tractor Co. v. Beck, 593 P.2d 871 (Alaska 1979); Daly v. General Motors Corp., 20 Cal. 3d 725, 144 Cal. Rptr. 380, 575 P.2d 1162 (1978). The fault of the supplier and the plaintiff should be apportioned in both kinds of cases. We have on two occasions, judicially fashioned a method for such an apportionment. In General Motors Corp. v. Hopkins, 548 S.W.2d 344 (Tex.1977), we held that the misuse of a carburetor on a truck was a partial defense to a strict liability action. We also held that the trier of fact should determine the percentages by which the defect and the misuse contributed to cause the event. General Motors Corp. v. Hopkins, supra at 352. In Signal Oil & Gas Co. v. Universal Oil Products, 572 S.W.2d 320 (Tex.1978), Signal Oil sued the defendant for negligence, strict liability, and breach of implied warranty. We wrote:
The seller should only be held liable for that portion of the consequential damages caused by the breach of implied warranty. Therefore, this court holds that in a cause of action for breach of an implied warranty the buyer may not recover consequential damages to the extent that the buyer's negligence or fault was a concurring proximate cause of such damages. [Emphasis in opinion.]
Sooner or later, and the sooner the better, we must bring products liability cases within a manageable format. Simplicity, order and consistency can be advanced in those cases, in my opinion by:
1. The elimination of the misuse and voluntary assumption of risk issues and by substituting in their place the more familiar issue about contributory negligence on the part of the plaintiff.
2. The submission of a products liability case to determine the percentage that the defective product caused the event and the percentage that the substandard conduct of the plaintiff caused it.
BARROW, J., joins in this concurring opinion.
*752 ON REHEARING
CAMPBELL, Justice, dissenting.
I dissent.
"State of the art" does not mean "the state of industry practice." "State of the art" means "state of industry knowledge." At the time of the manufacture of the boat in question, the device and concept of a circuit breaker, as is at issue in this case, was simple, mechanical, cheap, practical, possible, economically feasible and a concept seventy years old, which required no engineering or technical breakthrough. The concept was known by the industry. This fact removes it from "state of the art."
Boatland is a retail seller. It is not the manufacturer. From the adoption of strict liability in this case, and consideration of public policy, each entity involved in the chain of commercial distribution of a defective product has been subject to strict liability for injuries thereby caused, even though it is in no way responsible for the creation of a defective product or could not cure the defect. The remedy for a faultless retail seller is an action for indemnity against the manufacturer.
In products liability, the measure is the dangerously defective quality of the specific product in litigation. The focus is on the product, not the reasoning behind the manufacturer's option of design or the care exercised in making such decisions. Commercial availability or defectiveness as to Boatland is not the test. Defectiveness as to the product is the test. If commercial unavailability is not a defense or limitation on feasibility to the manufacturer, it cannot be a defense to the seller.
The manufacturer of the boat, Mr. Hudson, testified as follows as concerns the concept of a "kill switch." It is practically without dispute that this is one of the simplest mechanical devices and concepts known to man. Its function is, can be, and was performed by many and varied simple constructions. It is more a concept than an invention. The concept has been around most of this century. It is admittedly an easily incorporated concept. Was an invention required in order to incorporate a circuit breaker on a bass boat? Absolutely not! Did the manufacturer have to wait until George Horton invented his specific "Quick Kill" switch before it could incorporate a kill switch of some sort on its bass boats? Absolutely not! Mr. Hudson uses an even simpler electrical circuit breaker on his boats.
Mr. Hudson testified he could have made a kill switch himself, of his own, and of many possible designs, but simply did not do it. Why didn't he do it? He didn't think about it. He never had any safety engineer examine his boats. He hadn't heard of such, he puts them on now, but still thinks people won't use them.
Was the manufacturer faced with a limitation or state of the art due to commercial unavailability? No. If the manufacturer of this boat were the defendant in this case, would the majority hold under this evidence that the commercial unavailability of someone else's simple product is a limitation on the manufacturer's capability (feasibility) to incorporate a device performing the same safety function on its boat? Not if any semblance of strict product liability is to be preserved.
The test for defectiveness of a given product is the same, whether the defendant is the manufacturer, wholesaler or retail seller. The focus is upon the product and not the care or conduct of the particular defendant. The majority opinion has made a new test for each.
The next critical point that the majority fails to take cognizance of is that the factors held by this Court in Turner v. General Motors Corp., 584 S.W.2d 844, 848 (Tex. 1979), to apply as to a manufacturer, in its design of a product, have absolutely no relevance or relation to the reasons for holding the mere retail supplier strictly liable to a consumer. The Turner decision and its departure from the RESTATEMENT definition of the term "unreasonably dangerous," was limited solely to the liability of a manufacturer in its design of products. The definition of "unreasonably dangerous" in the RESTATEMENT (2d) of Torts, *753 § 402A, Comment (i) remains applicable to a retail supplier who did not participate in the product design. The focus is thus upon the expectation of an ordinary consumer instead of the propriety of the manufacturer's decision as to design. The harm to the plaintiff in the admission of evidence of commercial unavailability to a retail seller lies in the certainty of such evidence to divert the jury's thought to the reasonableness of the supplier's conduct instead of the true issue; whether the danger was beyond the contemplation of the ordinary use.
What is this Court faced with in this case? Nothing more than a defendant seller attempting to avoid liability by offering proof that Bailey's boat complied with industry practice (which it did at that time) but not because of any limitations on manufacturing feasibility at that time. This is an industry practice case. The evidence does not involve "technological feasibility." The law of the majority opinion is that a simple device, not supplied by the manufacturer, is a defense in a strict liability suit, against a retailer, even though the industry practice was created by the manufacturing industry.
There is no dispute that commercially marketed "kill switches" for bass boats were unavailable to Boatland at the time it sold the boat. Horton's "Quick Kill" was unavailable. The important point is that there is no dispute that at the time of the manufacture of Mr. Bailey's boat, a circuit breaker, whether electrical or mechanical could have easily and cheaply been incorporated into the boat.
Evidence of commercial unavailability to this retail seller should not be admissible. If it is, the majority opinion has created a new and separate test for defectiveness for a retail seller in a strict liability case. The type of commercial unavailability evidence offered here is not true limitation on feasibility to the manufacturer and therefore relevant to the existing state of the art, rather, it is the result of practice in the bass boat manufacturing industry. Subjective commercial unavailability to a retail seller does not operate as a limitation on objective state of the art.
Feasibility as to Boatland is not the test. In a design case, the test is one of feasibility, or a limitation on feasibility as to the manufacturer. If, as to the manufacturer, unavailability to a retail seller is due to the manufacturer's custom or standard, then such evidence should not be admitted because this would allow the manufacturer to set its own standards for liability.
I would hold that the trial court erred in permitting such evidence by Boatland to go to the jury, and would affirm the judgment of the Court of Civil Appeals.
I further disagree with the majority opinion and agree with the Court of Civil Appeals on the submission of the issues pertaining to Bailey's conduct in handling the boat. There is no evidence that Bailey was struck when first thrown from the boat. The evidence is that he was hit when the boat circled.
The theory of Valerie Bailey's lawsuit is that if the manufacturer had incorporated a circuit breaker in the manufacture of the boat, the boat motor would have cut off when Mr. Bailey was first thrown from the boat. The boat would not have circled back to where he was thrown and struck him with a rapidly spinning propeller. Under this theory, Mr. Bailey's conduct is not determinative of anything. The result would have been the same if he had been in a stump-free lake, hit a submerged log which had just drifted in, and had been thrown from the boat.
The evidence stated in the opinion of the Court of Civil Appeals clearly shows the alleged conduct of Mr. Bailey in operating the boat was reasonably foreseeable by Boatland. The foreseeability of that deviation in the manufacturer's intended use of the product is relevant to the basic question of whether the product was unreasonably dangerous when and as it was marketed. General Motors Corp. v. Hopkins, 548 S.W.2d 344 (Tex.1977).
The harmful effect of the submission of these issues cannot be more vividly displayed than by considering the emphasis *754 placed on them by counsel for Boatland in his argument to the jury. I would affirm the judgment of the Court of Civil Appeals.
RAY, J., joins in this dissent.
NOTES
[1] Because no error was assigned to the jury's failure to find that Bailey's adult children suffered pecuniary loss, the cause was severed and remanded only as to Mrs. Bailey's claims.
[2] In Turner, this court stated that a number of evidentiary factors may be considered in determining whether a product's design is defective. The product's usefulness and desirability, the likelihood and gravity of injury from its use, the ability to eliminate the risk without seriously increasing the product's usefulness or cost, and the expectations of the ordinary consumer are some of these factors. Turner v. General Motors Corp., 584 S.W.2d 844, 849 (Tex. 1979).
[3] This opinion, insofar as it holds that certain evidence of the state of the art is admissible on the issue of defectiveness in product design cases, is not intended to suggest that such evidence constitutes a defense, such as do misuse and assumption of the risk. Nor does evidence of the state of the art entitle the defendant to a defensive issue inquiring whether it complied with the state of the art at the time of manufacture. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1687418/ | 682 So. 2d 678 (1996)
Richard D. WASSALL, Appellant,
v.
W.H. PAYNE and Dean Highfield, Appellees.
No. 95-3874.
District Court of Appeal of Florida, First District.
November 7, 1996.
*679 Robert M. Ervin, Jr. and J. Stanley Chapman of Ervin, Varn, Jacobs, Odom & Ervin, Tallahassee, for Appellant.
Mark D. Dreyer of Harrison, Sale, McCloy & Thompson Chartered, Panama City, for Appellees.
VAN NORTWICK, Judge.
Richard D. Wassall appeals two orders, one granting appellee Dean Highfield a judgment on the pleadings on Wassall's count against him for fraudulent misrepresentation, negligent misrepresentation and negligence per se; and the other dismissing with prejudice Wassall's cause of action against appellee W.H. Payne for fraudulent misrepresentation. Wassall had leased real property which Payne sold to Dorothy Frazier, for which sales transaction Highfield allegedly acted as the broker. In the appealed orders, the trial court concluded that Wassall could not state a cause of action against appellees, because Wassall, as lessee from Frazier, had no privity of contract with either Highfield or Payne, and because neither Highfield nor Payne had a duty to disclose to Wassall the latent defects of the property which caused it to flood on occasion. Wassall contends, and we agree, that the lack of privity of contract does not preclude his action for fraudulent or negligent misrepresentation, and, thus, the orders appealed must be reversed.
I.
On April 24, 1989, Frazier purchased real property and improvements from Payne, with Highfield allegedly acting as the real estate broker for this transaction. One day later, Wassall leased the premises from Frazier. Pursuant to the lease, Wassall was responsible for making the payments to Payne for purchase of the property.
As Wassall alleges, he was an active participant in the negotiations which preceded the sale and, initially, it was he, not Frazier, who was planning to purchase the property. He also alleges that, prior to this sale and lease, he inquired whether the property was subject to flooding and that both Payne and Highfield misrepresented the property's propensity for flooding to him. He alleges further that Payne made this misrepresentation knowingly and with the intent that Frazier and Wassall rely upon the misrepresentation and consummate the sale and lease; and that he detrimentally relied upon this misrepresentation and expended money on improvements to the property before realizing that the property was subject to periodic flooding. Wassall's allegations are the same regarding Highfield, except that he alleges Highfield made the misrepresentation either knowingly or without knowledge of its truth or falsity.
*680 Both Frazier and Wassall filed a complaint against Payne, Highfield, and Bay County. In the order on appeal, the trial court granted a judgment on the pleadings as to Wassall's claims against Payne and Highfield. Frazier's claims are still pending in the trial court, as are Wassall's claims against Bay County for negligence, inverse condemnation and trespass.
II.
At the outset, we point out that this suit involves alleged misrepresentations by both appellees which preceded the creation of the contracts for sale and lease of the subject real property. The complaint alleges that the misrepresentations induced Frazier to buy and Wassall to lease this property. As the supreme court explained in A.R. Moyer, Inc. v. Graham, 285 So. 2d 397, 399 (Fla. 1973):
Privity is a theoretical device of the common law that recognizes limitation of liability commensurate with compensation for contractual acceptance of risk. The sharpness of its contours blurs when brought into contact with modern concepts of tort liability.
In this instance, the distinction between tort and contract is important. It cannot be said that Wassall contractually accepted the risk that defendants would lie to him (as it is alleged) so that he would enter into the lease in the first instance. Thus, the theoretical underpinnings for contractual limitation of the defendants' liability are not present in this case.
We conclude that the instant case is governed by the principles enunciated by the Second District in Wallis v. South Florida Savings Bank, 574 So. 2d 1108 (Fla. 2d DCA 1990). In Wallis, the court determined that the Wallises had stated a cause of action against South Florida Savings Bank for intentional misrepresentation in connection with obtaining the Wallises' personal guarantee of a loan by Park Bank to a developer. The Wallises alleged that they gave their guarantee based upon South Florida's representation that it would loan the developer $27,000,000. South Florida failed to honor its commitment letter and the development went into foreclosure. As explained by Judge Altenbernd in his concurring opinion:
The primary theory which the Wallises allege against South Florida is a more traditional theory of fraud. They allege that South Florida made a material misrepresentation of fact concerning its ability to lend $27,000,000. South Florida allegedly knew this statement was untrue and knew that the Wallises were relying upon its accuracy when they agreed to guarantee the subordinated loan. They allege that South Florida intended to induce persons in their capacity to rely upon the incorrect information in the commitment letter. Finally, they allege that they were damaged by their justifiable reliance on the misrepresentation. If true, these allegations are enough to establish fraudso long as the relationship between South Florida and the Wallises is sufficiently close to create a duty owing under a theory of fraud.
Frequently, the relationship which creates a duty owing in fraud is also a relationship involving contractual privity. See, e.g., Johnson [v. Davis, 480 So. 2d 625 (Fla. 1985)]. In this case, no contractual privity exists. It is not clear that the Wallises are third-party beneficiaries of any contract executed by South Florida. See Deanna Constr. Co. v. Sarasota Entertainment Corp., 563 So. 2d 150 (Fla. 2d DCA 1990). There are occasions, however, when third persons with close connections to a business transaction may allege a cause of action in fraud or negligence against a party involved in the transaction. See 37 Am.Jur.2d Fraud and Deceit § 297 (1968). See generally First Fla. Bank v. Max Mitchell & Co., 558 So. 2d 9 (Fla.1990); Restatement (Second) of Torts § 552 (1976). The buy-out of this partnership was in the broadest sense a single business transaction. If the allegations of the complaint are true, South Florida certainly had reason to expect that another bank or a guarantor would rely upon its commitment to loan $27,000,000. The inaccuracy of that representation could greatly increase the risks of a subordinated bank or guarantor. If South Florida had actual knowledge *681 that Mr. Propps [the developer] was using the commitment letter to induce the Wallises or other people to undertake financial risks in this development, it does not appear ill-conceived to make the bank liable for some measure of resulting damage. By this court's decision, we are merely giving the Wallises an opportunity to prove a set of facts which establishes such a relationship and which also establishes the remaining elements of the alleged fraud.
Id. at 1110-1111.
We distinguish the instant case from this court's opinion in Haskell Co. v. Lane Co., Ltd., 612 So. 2d 669 (Fla. 1st DCA), rev. dismissed sub nom., Service Merchandise Co., Inc. v. Lane Co., Ltd., 620 So. 2d 762 (Fla.1993). In Haskell, this court held that the requirement of privity precludes a lessee from bringing a suit for nondisclosure of material latent defects in connection with the sale of real estate. The instant action, however, is not a suit involving mere nondisclosure, but instead seeks a recovery for the separate and distinct tort of material misrepresentation.
III.
Although not a basis for the trial court's rulings in this case, appellees suggest that this court should affirm the trial court on the grounds that the economic loss rule precludes the instant action. This rule has been summarized by this court to mean that "absent a tort independent of breach of contract, remedy for economic loss lies in contract law." Monco Enterprises, Inc. v. Ziebart Corp., 673 So. 2d 491, 492 (Fla. 1st DCA 1996). Until recently, the district courts of appeal were split regarding the economic loss rule's application to the tort of fraud in the inducement. Compare, Monco Enterprises, supra; TGI Development, Inc. v. CV Reit, Inc., 665 So. 2d 366 (Fla. 4th DCA 1996); and Williams v. Peak Resorts International, Inc., 676 So. 2d 513, 517-518 (Fla. 5th DCA 1996) with Woodson v. Martin, 663 So. 2d 1327 (Fla. 2d DCA 1995), quashed, 21 Fla. L. Weekly S446, ___ So.2d ___ [1996 WL 600478] (Fla. October 17, 1996); and Florida Bldg. Inspection Services, Inc. v. Arnold Corp., 660 So. 2d 730 (Fla. 3d DCA 1995). The Supreme Court resolved this conflict, however, in HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 21 Fla. L. Weekly S447, ___, So.2d ___ [1996 WL 600501] (Fla. October 17, 1996), in which the court held that the "cause of action for fraud in the inducement is an independent tort and is not barred by the economic loss rule." Id. at S448, at ___. Thus where, as here, fraudulent misrepresentation and negligent misrepresentation in the formation of a contract are alleged, the economic loss rule does not bar the tort action based on such misrepresentations. Id.
We do not address whether the elements of fraudulent misrepresentation and negligent misrepresentation have been sufficiently pled to state a cause of action under those theories. Because the trial court has not had an opportunity to rule on sufficiency of the allegations of fraudulent misrepresentation or negligent misrepresentation, it would be premature for this court to decide that issue. Wolfe v. American Sav. and Loan Assoc. of Florida, 539 So. 2d 606 (Fla. 3d DCA 1989).
IV.
Finally, turning to the dismissal of the claim for negligence per se, the trial court's order indicates that it erroneously considered the sufficiency of this cause of action based solely upon the privity requirement. We thus reverse the trial court's decision that Wassall does not have a cause of action against Highfield for negligence per se. In so doing, we decline to consider whether there are other factual and legal arguments which, if they had been considered by the trial court, might have justified dismissal of the claim for negligence per se. See e.g., Greenberg v. Mahoney Adams & Criser, P.A., 614 So. 2d 604, 605 (Fla. 1st DCA 1993).
REVERSED and REMANDED for proceedings consistent with this opinion.
BOOTH and BENTON, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1488990/ | 151 F.2d 851 (1945)
UNITED STATES
v.
PITTMAN et al.
No. 11395.
Circuit Court of Appeals, Fifth Circuit.
November 6, 1945.
Rehearing Denied January 7, 1946.
Francis M. Shea, Asst. Atty. Gen., Rawlings Ragland, Acting Head, Claims Division, Department of Justice, Joseph M. Friedman, Chief, War Frauds Civil Section, and George W. Meuth and J. Gregory Bruce, Attys., Department of Justice, all of Washington, D. C., and Jim C. Smith, U. S. Atty., and William H. Burton, Jr., Asst. U. S. Atty., both of Birmingham, Ala., for appellant.
J. K. Brockman, of Birmingham, Ala., for appellees.
Before SIBLEY and McCORD, Circuit Judges, and KENNAMER, District Judge.
SIBLEY, Circuit Judge.
A qui tam suit under R.S. § 3491, 31 U.S.C.A. § 232, was brought on August 5, 1943, by Charles M. Hewitt as relator in the name of the United States against the appellees. After R.S. § 3491 was amended by the Act of Dec. 23, 1943, 57 Stats. 608, and under the provisions of the amendment, the United States appeared in the suit and asserted a purpose to carry it on. The defendants-appellees moved to dismiss the suit (1) because the plaintiff Hewitt had not given notice to the Attorney General of the pendency of the suit as required by the Act, and (2) because the plaintiff had not disclosed to the United States or the Attorney General any information or evidence not already possessed, the court therefore having no jurisdiction under the Act. The district court dismissed the suit for want of jurisdiction, apparently on the second ground. The United States appeals.
As to the first ground of the motion, clause D of the amending Act relates to suits under R.S. § 3491 pending at its passage, and provides that "the court in which said suit is pending shall stay all further proceedings, and shall forthwith *852 cause written notice, by registered mail, to be given the Attorney General that such suit is pending, and the Attorney General shall have sixty days from the date of such notice to appear and carry on such suit in accordance with clause (C)." This notice given by the court is, we think, the only notice necessary of a suit pending on Dec. 23, 1943. The notice required by clause C to be given by the plaintiff on bringing a suit after that date is not necessary. The notice given here seems to have been that ordered by the court on suspending proceedings under clause D. If any other or more formal notice was required than was given, its only purpose was to cause an appearance by the United States within sixty days, and that was accomplished in this case. The general appearance of the United States waived any defect in the notice given, just as such appearance by a defendant in an ordinary suit waives defects in process or the service thereof. The appellees were prejudiced in no manner.
The second ground of the motion presents greater difficulty. Clause D as above quoted indicates that the pending suits to which it applies are, after notice to the Attorney General, to be carried on in accordance with clause C which regulates new suits. Clause C states: "If the United States shall fail, or decline in writing to the court, during said period of sixty days (after notice) to enter any such suit, such person (i. e. the relator) may carry on such suit. If the United States within said period shall enter appearance in such suit the same shall be carried on solely by the United States. In carrying on such suit the United States shall not be bound by any action taken by the person who brought it, and may proceed in all respects as if it were instituting the suit: Provided, That if the United States shall fail to carry on such suit with due diligence within a period of six months from the date of its appearance therein, or within such additional time as the court after notice may allow, such suit may be carried on by the person bringing the same in accordance with clause (B) above. The court shall have no jurisdiction to proceed with any such suit brought under clause (B) or pending suit brought under Section 3491 of the Revised Statutes whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States, or any agency, officer or employee thereof, at the time such suit was brought: Provided, however, That no abatement shall be had as to a suit pending at the effective date of this Act, if before such suit was filed such person had in his possession and voluntarily disclosed to the Attorney General substantial evidence and information which was not theretofore in the possession of the Department of Justice." (Italics added.) Clause (E) then provides for rewarding the relator for such disclosure in a suit taken over by the United States and successfully carried on or settled, in an amount fixed by the court not exceeding one-tenth of the proceeds; or an award of not exceeding one-fourth of the proceeds when not carried on by the United States, but by the relator.
The persons here sued proved by the relator and his attorney that when the latter brought this suit they had no information not in the possession of the United States and disclosed none to the Attorney General, but based the complaint on a federal indictment returned against the defendants and on nothing else. The district court thought the words of clause C denying jurisdiction to proceed under such circumstances were intended to apply not only to suits carried on by the relator, but also to those taken over and carried on by the United States, and required dismissal, although it appears that a new suit by the United States for the frauds here charged would now be barred by the six-year limitation fixed by R.S. § 3494, 31 U.S.C.A. § 235. It is argued that such is the unambiguous purport of the words above quoted, and no different intent ought to be considered.
Congress, however, did not say "any suit brought under clause (B) or Revised Statutes Section 3491", but "any such suit" so brought. We cannot throw away the word "such." It is descriptive and limiting, referring always to a class just before pointed out. Now several sorts of suits brought under clause B or R.S. § 3491 had just been mentioned in clause C: Those in which the United States appeared; those in which it neglected or declined to appear; and those in which the United States having appeared failed to prosecute in six months. Is it certain that all three of these classes are clearly meant? To include the class of qui tam suits taken over and diligently *853 prosecuted by the United States would collide with the broad provision just preceding that "the United States shall not be bound by any action taken by the person who brought it, and may proceed in all respects as if it were instituting the suit." If the United States had instituted suit for the fraud it would not matter what Hewitt knew or disclosed, but the United States would be entitled to prove the fraud by others if it could. We cannot believe the Congress intended that the United States should have no redress for such frauds merely because some relator had sued in its name without having possessed or disclosed original evidence or information. We would think rather that the provisions of the Act taken together mean that when a relator starts such a suit the Attorney General shall be notified and the United States as against the defendants has the right to adopt as its own what was from the first claimed in its name, unprejudiced by any thing the relator may have done or omitted to do; but as respects the relator the United States must reward him out of the proceeds if he has really contributed original information in bringing the suit. It is when the United States fails to adopt or prosecute the suit, and the relator carries it on, that the defendants may raise an issue with the relator as to the merit of his activity in bringing it, and on this collateral issue may defeat it utterly.
The legislative history of the Act supports this view. The old law permitted suit by any private person, even though he acted only on evidence in the possession of the United States. United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443. A concurrent suit might also be brought by the United States, causing a conflict of suits. United States v. Baker-Lockwood Mfg. Co., 8 Cir., 138 F.2d 48. The Attorney General pointed out the resulting evils and asked repeal of the provision authorizing suit by private relators. The House of Representatives passed such a Bill. The Senate substituted a Bill which retained but undertook to limit the private suits, but only if based on information and evidence original with the relator and disclosed beforehand to the Attorney General with a refusal by him to sue; but if the Attorney General should sue and succeed, the relator to be rewarded from the proceeds by a sum not to exceed one-tenth. As to pending suits, they were to be stayed, the Attorney General notified, and he might move to dismiss the suit, but after relator disclosed original evidence without action by the Attorney General, the relator might bring a new suit. This Bill expressly provided that the Attorney General might bring suit himself based in whole or in part upon the information and evidence disclosed, and if the relator's suit was timely, that brought by the Attorney General would not be barred by limitation if filed within eight months. The conflicting bills went to a Conference Committee which wrote the act of December 23, 1943, passed by both houses. This Act follows most of the ideas of the Senate Bill, with two broad differences: The relator's suit is not to be dismissed and a new one filed when the Attorney General elects to carry on, but it is to be carried on by the United States "in all respects as if it were instituting the suit"; and the provision extending the period of limitation was dropped because, since the same suit is thus to be carried on, such a provision was not needed for the protection of the United States. The Senate bill denied jurisdiction to the court to hear or try "such suit brought or carried on by any person for himself and the United States" unless based on original evidence and information not in possession of the United States, and also denied jurisdiction to hear or try any suit then pending brought "by any person for himself and the United States" as to which there would not be jurisdiction if brought afterward. These provisions of the Senate Bill clearly applied only to a suit carried on by the informer, and not to the new suit the Attorney General might bring. We think the same purpose pervades the cognate provision of the Act as passed, and the denial of jurisdiction under the stated circumstances is intended to apply only to suits carried on by the relator, and not to those taken over (instead of bringing a new suit) by the United States. It seems wholly unreasonable to think that Congress intended that after the Attorney General appears and takes over for the United States the prosecution of a fraud claim because he thinks the claim a valid one, the United States should be cut off from a trial on the merits and the culprit should escape merely by proving that at the time the suit was brought the relator knew no more than some government *854 "agency, officer or employee" knew, even though that were enough to fully establish the claim. The intention was to discourage the carrying on of suits by undeserving relators; not to nullify the just claims of the United States when the Attorney General takes over the case in behalf of the United States.
The judgment of dismissal is reversed and the cause remanded to the district court for further proceedings consistent with this opinion.
Reversed and remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1807418/ | 813 F.Supp. 1382 (1993)
William H. SMITH, Plaintiff,
v.
Nicholas F. BRADY, Secretary, Department of the Treasury, and Stephen E. Higgins, Director, Bureau of Alcohol, Tobacco and Firearms, Defendants.
Civ. A. No. 92-C-478.
United States District Court, E.D. Wisconsin.
February 24, 1993.
*1383 Robert A. Kennedy, Jr., Kennedy Law Office, Crandon, WI, for plaintiff.
Nathan A. Fishbach, Deputy U.S. Atty., Chief, Civ. Div., Milwaukee, WI (David C. Lieberman Office of Chief Counsel, Bureau of Alcohol, Tobacco and Firearms, of counsel), for defendants.
DECISION AND ORDER
REYNOLDS, Senior District Judge.
In this action, filed April 30, 1992, plaintiff William H. Smith ("Smith") seeks review of the decision by defendants Nicholas F. Brady ("Brady"), Secretary of the Treasury, and Stephen E. Higgins ("Higgins"), Director of the Treasury Department's Bureau of Alcohol, Tobacco, and Firearms, denying Smith's application for relief from firearm disability pursuant to 18 U.S.C. § 925(c). On December 18, 1992, Smith filed a motion for an evidentiary hearing on this matter, and defendants filed a motion for summary judgment. For reasons stated below, Smith's motion is denied, and defendants' motion for summary judgment is granted.
FACTS[1]
On June 19, 1978, Smith pled guilty in a Wisconsin court to a charge of arson, a felony, and was sentenced to three years probation. Because of the felony conviction, Smith was prohibited under 18 U.S.C. § 922(g)(1) from possessing firearms. In June 1989, Smith applied to the Treasury Department's Bureau of Alcohol, Tobacco and Firearms ("ATF") for relief from his firearm disability, pursuant to 18 U.S.C. § 925(c), listing Illinois as his residence. (Deft. Statement of Facts at ¶ 8.[2]) ATF denied the application pursuant to its policy of refusing to restore firearms privileges to any applicant whose state of residence would prohibit the applicant from possessing firearms, as Illinois would in this case. 27 C.F.R. § 178.144(d). (Deft. Statement of Facts at ¶ 10.)
Smith filed a second relief application on August 25, 1989, this time listing Alvin, Wisconsin, as his residence. That application was denied on April 10, 1991, because ATF investigators were unable to contact Smith at the address and telephone he supplied.
On July 18, 1991, Smith filed a third relief application along with supporting materials indicating that he did in fact reside in Alvin, Wisconsin. An ATF agent eventually was able to contact Smith in Oak Park, Illinois, where his parents lived. After making this initial contact, the agent conducted an investigation into the merits of Smith's application. The agent found that Smith's arson conviction arose from a fire he set to the cabin of a former girl-friend by dousing it with gasoline. Several of Smith's long-time acquaintances, apparently from Illinois, recommended that his firearm privileges be restored; each of these acquaintances described him as a decent person, although two mentioned that he had been "messed up" in the past. But *1384 a few Wisconsin residents familiar with Smith said he was "unpredictable," a trouble-maker, and "involved with drugs." These people recommended that Smith's application be denied. So did Smith's parole officer and a Forest County Deputy Sheriff, both of whom cited Smith's long history of violence and drug abuse.
Smith's criminal record, not including the arson conviction, revealed that in June 1977 he pled guilty in a Michigan court to obtaining a controlled substance by fraudulent means (he forged a prescription) and was sentenced to probation for about nine months; in December 1977 he was found guilty in a Wisconsin court of stealing lumber and was sentenced to one year probation; in January 1978 he was arrested for bribery of a witness involved in the lumber case; and in February 1980 he was arrested for reckless use of firearms (he was said to have pointed a gun at his wife), a charge which was dismissed when Smith agreed to enter a drug treatment program.
Smith told the ATF agent that he was a self-employed electrician working out of the basement of his parents' home in Oak Park, Illinois, and that he made occasional weekend trips to his residence in Wisconsin. Smith acknowledged that more than once in the past he had threatened to commit suicide and that he abused alcohol and drugs when he was younger. He said he wanted his firearms privilege restored so that he could go deer-hunting.
The ATF agent recommended that Smith's application be denied, based on his apparently unstable emotional state, his history of substance of abuse and violence, his tendency to minimize the severity of his criminal activity, and his lack of a "compelling need" for restoration of the firearms privilege. ATF accepted the recommendation and, on April 3, 1992, informed Smith that his relief application had been denied.
Smith seeks to challenge the ATF's findings on the ground that its investigative techniques were improper, citing reports from "Frontline" and "60 Minutes" concerning the Justice Department's prosecution of Leonard Peltier, the State Department's red-baiting of a college professor, and the sexual harassment of ATF agents by their superiors.
As for his own case, which seems entirely unrelated to any of those, Smith claims the ATF investigation did not take into account his volunteer work for the Forest Service, for which he has received certificates of appreciation that were submitted along with his application. (Dec. 16, 1992 Smith Aff. Concerning Investigation at 2.) Smith also claims the ATF agent failed to interview one of the three character references listed on Smith's application. (Id. at 3.) Further, Smith says the agent's report was inaccurate in various respects, including these: Smith was convicted in 1977 on one count, not four counts as the agent reported, of fraudulently obtaining a controlled substance, and Smith's probation officer was Clinton Hand, not Jean Young as the agent reported. (Dec. 16, 1992 Smith Aff. Concerning Record at 3.)
ANALYSIS
I. Scope of Review.
The Gun Control Act of 1968, 18 U.S.C. § 921 et seq., prohibits convicted felons from possessing firearms but permits anyone subject to such "disability" to apply to the Treasury Secretary for relief from it. 18 U.S.C. § 925(c). The Secretary is to grant such relief if:
it is established to his satisfaction that the circumstances regarding the disability, and the applicant's record and reputation, are such that the applicant will not be likely to act in a manner dangerous to public safety and that the granting of the relief would not be contrary to the public interest.
Id. If the Secretary denies an application for relief, the applicant may seek review of the denial in federal district court. Id. The Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., supplies the standard of review in such cases. The reviewing court is to determine whether the Secretary's decision was "arbitrary" or "capricious." 5 U.S.C. § 706; Bradley v. Bureau of Alcohol, Tobacco, and Fire-arms, 736 F.2d 1238, 1240 (8th Cir.1984).
*1385 But the applicable scope of review is another question. Normally, the APA requires that the reviewing court consider the "whole record" compiled by the agency. 5 U.S.C. § 706. Defendants insist, however, that the court should review only the "statement of reasons" submitted by Higgins explaining his denial of Smith's application. That more limited scope of review was first articulated in Dunlop v. Bachowski, 421 U.S. 560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975), a case involving review of the Labor Secretary's decision not to bring suit to set aside a union election allegedly conducted in violation of the Labor-Management Reporting and Disclosure Act ("LMRDA"). The Supreme Court held that although the Secretary's decision would be reviewed pursuant to APA standards, there would be no "trial-type inquiry into the factual bases of the Secretary's conclusion." Id. at 566, 95 S.Ct. at 1857. Instead, the scope of review would be limited to the Secretary's statement of reasons for the decision, including a statement of the "essential facts" upon which the decision was based. Id. at 574, 95 S.Ct. at 1861.
In that respect, Dunlop conflicts with Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), where the Supreme Court held that the APA review was to be based on the "`whole record' compiled by the agency," not merely on "litigation affidavits" supplied by the agency in support of its decision. Citizens, 401 U.S. at 419, 91 S.Ct. at 825. Such affidavits, described as "merely `post hoc' rationalizations," would be reviewed only when necessary to draw a connection between the administrative record and the agency's conclusion, mainly in situations where the record contained no specific findings. Id. at 420, 91 S.Ct. at 825. Thus, while Dunlop allows the statement of reasons to substitute for the administrative record, Citizens allows the statement only to supplement the record.
The Dunlop court departed from Citizens and, really, from the language of the APA, apparently out of concern that a more thorough inquiry into the Labor Secretary's decision on whether to challenge union elections would defeat the very purpose of giving the Secretary the exclusive authority to bring such challenges. That purpose, the court said, was "`to settle as quickly as practicable the cloud on the incumbents' titles to office.'" Dunlop, 421 U.S. at 568-69, 95 S.Ct. at 1858. Chief Justice Burger's concurrence confirms the exceptional nature of the Dunlop decision. He writes, "The language and purposes of [the LMRDA] have required the Court to define a scope of review much narrower than applies under [the APA] in most other administrative areas." Id. at 590, 95 S.Ct. at 1868.
Notwithstanding the limited reach of Dunlop, the Ninth Circuit has held that it applies to the review of ATF decisions denying relief from firearms disability. Kitchens v. Dept. of the Treasury, 535 F.2d 1197, 1199-1200 (9th Cir.1976). The Kitchens court said, in effect, that Dunlop applies whenever an agency is granted "broad discretion" with respect to the decision at issue. Id. at 1199. But if that is the case, it is difficult to conceive of a situation in which Dunlop would not apply, for, in the vast majority of cases, judicial review of agency decisions is premised on the assumption that the agency enjoys broad discretion; hence, the arbitrary-and-capricious standard. While Dunlop did take note of the degree of discretion afforded the Labor Secretary, clearly the court's central concern was about resolving the underlying labor dispute in a speedy, definitive manner. Dunlop, 421 U.S. at 573, 95 S.Ct. at 1860.
This court concludes that the APA, not Dunlops exception to it, applies in the instant case. Dunlop is simply not analogous here, because there is no indication that the statute authorizing the Treasury Department to restore firearms privileges was designed primarily to ensure the speedy resolution of relief applications. On the contrary, the Gun Control Act by its terms makes possible the very "trial-type inquiry" that Dunlop hoped to avoid; the reviewing court is permitted to "admit additional evidence where failure to do so would result in a miscarriage of justice." *1386 18 U.S.C. § 925(c). As the concerns underlying Dunlop are not present in this case, the court will follow the APA and base its decision on the administrative record, not merely on defendants' statement of reasons.
Defendants ask that if the record must be considered, the court accept a redacted version of it, in which the names and identities of those who spoke concerning Smith's application are blackened out. The government does enjoy a privilege with respect to the names and identities of informants, apparently qualified only to the extent that if disclosure is necessary to a defense in a criminal case, the government must either disclose the information or dismiss the case. 1 McCormick on Evidence at 402, 410 (1992); 5 U.S.C. § 552(b)(7)(D). Having reviewed both the original and the redacted versions of the record, the court concludes that the redactions are not improper.
The final issue concerning scope of review is whether the court should, as Smith requests, go beyond the record and admit testimony telling Smith's side of the story, pursuant to 18 U.S.C. § 925(c). The court declines to do so, however, because it finds that no "miscarriage of justice" would result from relying solely on the administrative record. Although Smith has identified a few minor inaccuracies in defendants' report, he does not claim that defendants overlooked or disregarded or distorted any significant factual information that was particularly relevant to his relief application. Nor does Smith propose to offer some new evidence that came to light only after the ATF investigation.[3] Since Smith has identified no specific factual information favorable to him that is not mentioned in the record, no miscarriage of justice results from the court's failure to admit additional evidence.
II. Review of Defendants' Decision.
As noted above, the applicable APA provision requires the court to determine whether the agency's actions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). These standards may be satisfied if the agency failed to consider factors relevant to its decision or if it committed a "clear error of judgment." Citizens, 401 U.S. at 416, 91 S.Ct. at 823. The court is not to substitute its judgment for that of the agency. Id.
The relevant factors here are the circumstances surrounding Smith's conviction, his record, and his reputation, as each of these bears on the question of whether restoration of his firearms privilege would be contrary to the public safety or interest. 18 U.S.C. § 925(c). Defendants say they took into account the "revengeful, violent" nature of his arson conviction, as well as the violent conduct underlying his arrest in 1980 for reckless use of a firearm, which took place when Smith was under his firearms disability. (Oct. 30, 1992 Higgins Declaration at ¶ 9(b).) Defendants say they also considered Smith's history of substance abuse, manifested most clearly in his 1977 arrest for fraudulently acquiring a controlled substance. Smith's 1977 conviction for theft and his 1978 arrest for bribery of a witness were taken into account, too.
Defendants concede that, with respect to Smith's reputation, he received mixed reviews. Interviewees who knew him in Wisconsin were unanimously opposed to restoration of his firearms privilege, while his Illinois neighbors said his application for relief should be granted. But defendants say they gave more weight to the people interviewed in Wisconsin, where Smith says he resides and where most of his misbehavior has occurred.
The record indicates that defendants considered each of the factors set forth in the Gun Control Act, and the court cannot conclude that defendants' application of those factors reflects a clear error of judgment. *1387 According to the record, Smith has exhibited violent behavior in the past, has abused drugs and alcohol, and has developed, in certain Wisconsin circles at least, a quite poor reputation. While it does appear that defendants gave considerable emphasis to events of the distant past, they do not seem to have entirely disregarded more recent mitigating factors, such as the opinions of at least two of his character witnesses.
Under these circumstances, the court concludes that there is no genuine issue of fact as to whether defendants' denial of Smith's relief application was arbitrary or capricious. Thus, defendants are entitled to summary judgment.
IT IS THEREFORE ORDERED that the motion to admit additional evidence and the motion for a de novo hearing filed by plaintiff William H. Smith on December 18, 1992, are DENIED.
IT IS FURTHER ORDERED that the motion for summary judgment filed by defendants Nicholas F. Brady and Stephen E. Higgins on December 18, 1992, is GRANTED and this action DISMISSED.
NOTES
[1] Unless otherwise indicated, what follows is taken from the redacted administrative record submitted by defendants, which, as discussed below, must be the basis for the court's decision in this case.
[2] This and all subsequent statements of fact by defendants are deemed to be undisputed because Smith has not directly responded to them. Local Rule 6.05(d) (E.D.Wis.)
[3] Smith asks the court to consider a recent letter of recommendation from the Forest County circuit judge who presided over Smith's arson conviction. But the judge's views on the ATF investigation, while interesting, are not so enlightening as to demand the court's formal consideration. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2298212/ | 523 F.Supp. 790 (1981)
ALSCO-HARVARD FRAUD LITIGATION Consolidated Cases.
Civ. A. No. 659-71.
United States District Court, District of Columbia.
August 21, 1981.
*791 *792 *793 Alexander Younger, Washington, D. C., for plaintiff.
Edward F. Canfield, Washington, D. C., for defendant A. L. Stone.
Francis Rosenbaum, pro se.
MEMORANDUM
OBERDORFER, District Judge.
I. INTRODUCTION
In this civil action, plaintiff United States has moved for summary judgment against defendants Andrew L. Stone and Francis N. Rosenbaum. Both defendants have been charged with violations of the False Claims Act, 31 U.S.C. § 231 (1976); breach of warranty; liability under the doctrine of "recoupment of public funds paid by mistake"; and violations of the Anti-Kickback Act, 41 U.S.C. §§ 51 et seq. (1976). In addition, the Government seeks imposition of a constructive trust upon certain property that allegedly is traceable to defendants' wrongful acts. Plaintiff's claims are set forth in a First Amended Complaint filed with this Court, and in a First Amended Complaint filed in the United States District Court for the Eastern District of Missouri.[1] The actions have been consolidated here by the Judicial Panel on Multidistrict Litigation because both actions arise out of a common factual background of alleged fraud against the United States Government.[2] The other suits that were part of this Multidistrict Litigation have been terminated;[3] only the United States' actions against defendants Stone and Rosenbaum remain. In addition, the United States Tax Court has under advisement the report of Special Trial Judge Caldwell in Rosenbaum, et al. v. Commissioner, Docket Nos. 5199-72, 5200-72, 5311-72, 5312-72, and 2460-75.
For reasons stated below, the Court grants plaintiff's motion for summary judgment in part, and denies it in part.
II. BACKGROUND FACTS
Plaintiff's claims against defendants Stone and Rosenbaum are based upon an alleged scheme of fraudulent conduct in the sale of 2.75-inch rocket launchers to the Navy during the years 1962 through 1968 by Chromcraft Corporation (hereinafter "Chromcraft") and its corporate successor, Alsco, Inc.[4] The fraudulent conduct is alleged *794 to have occurred in connection with two components of the rocket launchers: the electrical assemblies, which relate to the mechanism by which the rockets are fired, and the fairings, which are the molded fibre nose cone and aft attachments to the launchers. In its Complaints, plaintiff has alleged that Stone and Rosenbaum, who were the president of Chromcraft and its special counsel respectively, submitted or caused to be submitted to the Navy inflated cost data regarding the electrical assemblies and fairings, as a result of which the Navy overpaid Chromcraft, with the overpayments accruing to defendants. Plaintiff suggests the defendants' scheme is segregable into three distinct phases: 1) the "Scientific/Bregman" stage; 2) the "Republic" stage; and 3) the "Western Molded" stage.
A. The Scientific/Bregman Stage
During the first phase of the scheme, which occurred between March 1963 and December 31, 1965, Stone and Rosenbaum allegedly submitted or caused to be submitted inflated cost data regarding electrical assemblies through the use of two subcontractors, Scientific Electronics, Limited (hereinafter "Scientific") and Bregman Electronics, Inc. (hereinafter "Bregman"). The Government contends that Scientific and Bregman were "dummy" corporations established by Stone and Rosenbaum and subject to their control.
According to plaintiff, defendants represented to the Navy that they had purchased completed electrical assemblies from Scientific and Bregman for prices independently set by those subcontractors. In fact, however, the Government alleges that Scientific and Bregman were sham corporations that created false invoices for Chromcraft and accumulated the resulting payments from Chromcraft for the use and benefit of Stone and Rosenbaum. Specifically, the Government contends that the electrical assemblies for the launchers were assembled not by Scientific and Bregman but instead by Robert L. Wolf and Associates (hereinafter "Wolf") with raw materials that Chromcraft purchased from other vendors and supplied directly to Wolf without charge. The purchase orders addressed to Wolf were, however, typed on Scientific and, later, on Bregman stationery. Wolf would bill the work for his assembly services on invoices addressed to Scientific and Bregman but actually delivered to Chromcraft. Scientific and Bregman would then pay the Wolf invoices out of money received from Chromcraft. Stone's secretary would, at Stone's direction, in turn type quotation letters whereby Scientific and Bregman purported to quote prices for the electrical assemblies to Chromcraft. Chromcraft would then respond to Scientific's and Bregman's quotations by preparing purchase orders, responsive invoices per the quoted prices, as well as receiving reports reflecting the receipt of the units at Chromcraft's plant. The prices set forth in these fictitious Bregman and Scientific quotation letters, invoices and corresponding Chromcraft purchase orders were included in the cost data furnished by Stone to the Government and were in fact paid by the Government under the contracts awarded Chromcraft. These prices were substantially higher than the combined amount in fact paid to Wolf for assembly charges and to other vendors for the raw materials supplied to Wolf.
The Government also contends that defendants used fictitious invoices from foreign companies to siphon the illegal profits thus made out of Scientific and Bregman. The invoices came to Scientific and Bregman from several Swiss and Liechtenstein entities, and purported to be for raw materials shipped to the dummy corporations. Scientific and Bregman paid the invoices, allegedly upon instructions from Stone and Rosenbaum. It is undisputed that the checks were negotiated by the Swiss and Liechtenstein entities, and the proceeds were remitted to Swiss bank accounts in which, according to plaintiff, Stone and Rosenbaum *795 purportedly held concealed interests.
Defendants counter this characterization of the Scientific/Bregman phase by contending that both Scientific and Bregman were formed as bona-fide attempts by Chromcraft to obtain a "second supplier" (in addition to Wolf) of the electrical assemblies needed for the rocket launchers. They allege that neither entity was controlled by Stone or Rosenbaum, except insofar as both companies relied extensively on Chromcraft's business. Moreover, defendants suggest that Scientific's and Bregman's use of Wolf as a vendor of electrical assemblies was known to both Chromcraft and the Navy, and not objected to by either. Wolf was to be the supplier until Scientific and Bregman could become geared up as a second supplier, an event that in the eyes of defendants unfortunately never transpired. Instead, Wolf was the only supplier of assemblies during this period, and it utilized raw materials supplied directly by Chromcraft and on occasion "drop shipped" completed assemblies at Chromcraft's plant, despite working through Scientific and Bregman. Wolf's relationship with Chromcraft was not out of the ordinary, according to defendants, and its contact with Chromcraft did not violate its role as a bona-fide subvendor of Scientific and Bregman.
As for the siphoning of excess profits to Swiss bank accounts, Stone and Rosenbaum do not dispute the Government's demonstration of the flow of funds but attempt instead to explain that Scientific and Bregman accumulated sizeable bank accounts not because of any excess profits, but because Chromcraft did not bill the companies for raw materials used in the electrical assemblies, materials that Chromcraft supplied to Wolf directly. Scientific and Bregman paid for the raw materials upon receiving invoices from foreign companies, and the monies found their way into Swiss accounts, accounts that defendants allege they did not control and/or use to their own use and benefit.
B. The Republic Stage
In late 1965 and early 1966 the "Scientific/Bregman" phase ended with Chromcraft's discontinuance of Bregman as a subcontractor. At about that time, defendants allegedly used Falrock Corporation (hereinafter "Falrock"), a corporation they allegedly controlled, to acquire 62 per cent of the outstanding common stock of Republic Electronics Industries Corporation (hereinafter "Republic"). Republic was an ongoing electronics manufacturer that was in financial difficulty and ripe for a takeover. Falrock's interest in Republic allegedly was financed by funds that had been siphoned off Scientific's and Bregman's fund of excess profits and deposited in a secret Swiss bank account.[5]
Upon acquiring control of Republic, the Government contends, defendants used it in much the same way as they allegedly had used Scientific and Bregman to raise artificially the prices ultimately charged to the Navy for rocket launchers. Specifically, plaintiff alleges that Stone and Rosenbaum caused Chromcraft (and then Alsco) to represent to the Navy that Republic manufactured the launchers' electrical components in their entirety, and sold them to Chromcraft and Alsco at specified prices which were included in the total contract prices which the Navy paid. In fact, however, Chromcraft and Alsco allegedly continued the practice of directly purchasing raw materials and supplying them at no cost to Wolf who remained the undisclosed assembler for virtually all of the electrical components produced during the Republic phase. As in the Scientific/Bregman phase, Republic's prices were substantially higher than the cost of the raw materials plus Wolf's assembly charge. In addition, the Government contends that Republic fabricated invoices and quotation letters for Chromcraft and that Chromcraft in turn submitted false purchase orders to Republic, all hiding *796 the fact that Wolf was the real supplier of the vast majority of electrical assemblies. Republic accordingly accumulated large false profits during this period.
Defendants deny plaintiff's characterization of Republic's role in the rocket launcher controversy. They contend that after Scientific's and Bregman's failure to become the hoped-for "second supplier" of electrical assemblies, Chromcraft turned to Republic, an established electronics firm. According to defendants, after Falrock's acquisition of Republic (without the use of fraudulently-obtained funds), Chromcraft assisted the company's entrance into the business of assembling the electrical components required by 2.75-inch rocket launchers. With Chromcraft's technical assistance, and through application of the fruits of its research and development efforts, Republic was able to become a reliable, efficient producer of electrical assemblies, a producer that supplanted Wolf as the number one supplier of assemblies. Defendants admit that Wolf continued as a supplier, but that its role was never hidden from Chromcraft or the Navy. Also, defendants do not contest the fact that Chromcraft continued its practice of supplying the raw materials for the assemblies to Republic (and Wolf), a practice that they allege is not uncommon in the industry. Finally, defendants contend that Republic's increasingly stable financial position during this phase was not due to excess profits, but to Chromcraft's commitment to making them a reliable second supplier of needed electrical assemblies.
C. The Western Molded Stage
Western Molded Fibre Products, Inc. (hereinafter "Western Molded") was a Chromcraft subcontractor that manufactured the "fairings" (nose cone and fins) for Chromcraft's rocket launchers. According to plaintiff, Stone induced Western's president, in 1963, to increase the price of fairings by a designated amount per set and to accrue the amount on Western's books in order to pay kickbacks to himself and Rosenbaum. The fairing prices were increased, Chromcraft paid the increase, and Stone and Rosenbaum allegedly caused Chromcraft to certify to the Navy that the increased price represented a legitimate cost of the fairings. The Navy, by paying the contract price to Chromcraft, financed the kickbacks.
Plaintiff also contends that Western accumulated a large surplus as a result of accruing the kickback payments on its books. Stone and Rosenbaum purportedly eliminated this surplus by causing a stream of fictitious invoices from five Swiss and Liechtenstein entities to be sent to Western for phenolformaldehyde or electrical parts which were not to be, and were not in fact, delivered to Western. For its part, Western paid the fictitious foreign invoices and, following negotiation of Western's checks in Switzerland, the proceeds allegedly were remitted to Stone's and Rosenbaum's Swiss bank accounts.
Defendants again dispute plaintiff's interpretation of their conduct. They admit that Western Molded increased the prices of its fairings, but the increase was not a kickback. Instead, they suggest that the differential in price was payment for the increased cost of producing the new, grenade-type fairings, and also partial payment for Chromcraft's developmental cost in designing the new fairings and rocket launchers. Stone and Rosenbaum contend that the president of Western Molded recognized his company's responsibility to reimburse Chromcraft for its developmental costs, but the president decided to do so through the use of false invoices for nonexistent materials because his company could not "justify" the expenditures publicly in view of its own research and development budget.
III. PRELIMINARY MOTIONS
Defendants have moved to dismiss Claims Two, Three and Five of the First Amended Complaints because of the lack of an indispensable party under Rule 19(b) of the Federal Rules of Civil Procedure. Plaintiff does not oppose the dismissal of the Second Claim, and it accordingly is dismissed.
*797 The third Claim alleges the defendants are liable to plaintiff under the doctrine of recoupment of public funds paid by mistake. Under that common law theory, the Government can "recover funds which its agents have wrongfully, erroneously, or illegally paid." United States v. Wurts, 303 U.S. 414, 58 S.Ct. 637, 82 L.Ed. 932 (1938). The standard is that "if the Government made these payments under an erroneous belief which was material to the decision to pay, it is entitled to recover the payments." United States v. Mead, 426 F.2d 118, 124 (9th Cir. 1970).
Defendants contend that, even assuming the doctrine's application in this case, the plaintiff's failure to join Chromcraft and Alsco requires the Court to dismiss the claim under Rule 19(b) because Chromcraft and Alsco are indispensable parties. According to defendants, Chromcraft and Alsco are needed "not only to show such matters as payment and the alleged mistake, but to prevent Chromcraft/Alsco, which has reserved its rights in this matter against Stone, from instituting an action to recover funds from Stone after the adjudication of this case." See Consolidated Response of Defendant Stone to Motion for Summary Judgment at 75 (March 5, 1979).
Defendants' motion is without merit. Rule 19(b) requires the Court to determine whether "in equity and good conscience" the action should proceed despite the absence of a party, or whether the suit must be dismissed because the absent party is indispensable. In considering indispensability, the Court should consider the following factors:
[F]irst, to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. F.R.Civ.P. 19(b).
Applying these factors to the case at hand, the Court finds that Harvard Industries, the corporate successor to Chromcraft and Alsco, is not an indispensable party to the third Claim of the Amended Complaints. Any judgment rendered against Stone and Rosenbaum under this claim would not be prejudicial to Harvard it already has settled with defendants and with the United States and forsaken the claims it once asserted in this litigation. See Order and Judgment (November 13, 1976). Defendants contend that they will be prejudiced by Harvard's absence, but their prejudice is not a factor relevant to Rule 19(b) and, moreover, they will not be prejudiced because Harvard has abandoned any recourse it might have against them. See id. ¶ 3. As for defendants' argument that Harvard is needed in order to prove the alleged mistake, that duty rests upon plaintiff Harvard need not participate.
Defendants similarly contend that the Fifth Claim of the Amended Complaints should be dismissed for failure to join an indispensable party. Once again defendants fail to persuade the Court. Under the Fifth Claim, plaintiff requests that a constructive trust be put on certain assets that allegedly represent the fruits of defendants' fraudulent scheme.[6] Defendants argue that the Falrock Corporation must be a party to this Claim because its assets are implicated by plaintiff's charge.[7] They suggest that because Falrock's right of ownership of certain of its assets are at issue, it necessarily must be a party to this Fifth Claim.
Defendants' contention might be well taken except that Falrock has surrendered *798 its right to contest this Court's resolution of plaintiff's Fifth Claim. The Consent Judgment entered on December 27, 1976 in United States v. Falrock Corporation, C.A. No. 76-2350 (D.D.C.) states, in part:
7. Defendants herein having adopted any and all defenses, of whatever nature, which are or which could be interposed by the defendants in Alsco-Harvard, and having agreed to be bound by the terms of any final judgment entered in Alsco-Harvard, the entry of a final judgment on the Fifth Claim of plaintiff's First Amended Complaint in Alsco-Harvard shall in all respects adjudicate the rights and liabilities of defendants herein with respect to the aforesaid stock of Heath Tecna Corporation.
Thus Falrock has abandoned any claims it might have against defendants insofar as those claims would arise from disposition of this Fifth Claim for a constructive trust. It therefore cannot be prejudiced by this litigation in any legally meaningful manner, and its absence also does not affect the enforceability of a constructive trust should one be placed upon its assets.
In refusing to dismiss plaintiff's Fifth Claim for failure to join an indispensable party, the Court does not express, of course, any opinion about the ultimate disposition of that claim.
Finally, on June 5, 1981 Rosenbaum filed a motion to dismiss in which he alleges inter alia that this action should be dismissed for failure to prosecute pursuant to Rule 41(b) of the Federal Rules of Civil Procedure. Rosenbaum alleges that "plaintiff has done nothing to prove the claim it has asserted against defendants, other than to take depositions which were substantially completed by 1973." Memorandum in Support of Motion to Dismiss at 3. In fact, however, plaintiff has filed a detailed motion for summary judgment and has opposed any stay in the proceedings. The facts of the case do not in any way warrant the "drastic step" of dismissal for failure to prosecute suggested by Rosenbaum. Jackson v. Washington Monthly Co., 569 F.2d 119, 123 (D.C.Cir.1977).
IV. THE MOTION FOR SUMMARY JUDGMENT
A. Threshold Questions
Defendant Stone opposes plaintiff's motion for summary judgment because, inter alia, plaintiff allegedly violated his constitutional rights, because plaintiff's motion does not conform to Rule 56, and because defendant has been unable to present all the affidavits and evidence to which he is entitled. None of these contentions have merit.
Defendant Stone's due process complaints concern alleged interference with his parole by plaintiff and alleged interference with his legal defense by the Internal Revenue Service's attachment of funds designated for his legal fees, and by the Government's decision to depose him while in jail. Defendant Rosenbaum voices similar due process complaints, contending that the harshness of his confinement deprived him of funds and prevented him from vigorously defending this case.[8] He complains, for example, that his lack of funds has prevented him from taking any discovery that would help him oppose the motion for summary judgment now before the Court. Rosenbaum also reminds the Court that a previous Order of this Court reserved the question whether plaintiff's depositions could be used against Rosenbaum on a motion for summary judgment. See Memorandum and Order (January 23, 1976).
Stone's and Rosenbaum's due process arguments already have been considered by this Court, and they need not detain us further. Specifically, both defendants filed extensive motions to dismiss based in large part on their due process complaints. The motions to dismiss were denied for reasons stated in plaintiff's memoranda. See Order (April 14, 1978). See also Memorandum *799 and Order (January 23, 1976); Memorandum and Order (January 8, 1974). Thus defendants' contentions regarding alleged interference with their ability to present a defense in this case already have been decided in plaintiff's favor.[9] Defendant Stone also opposes plaintiff's summary judgment motion on the ground that it does not comport with Rule 56. Stone argues that the motion does not concisely state the material facts not in dispute, and he renews his and Rosenbaum's complaints regarding the inadequacy of their discovery. See F.R.Civ.P. 56(f). Once again defendants' arguments do not persuade the Court.
First, the Court finds that plaintiff's motion satisfies Local Rule 1-9(h). It includes a statement of material facts not in issue. Defendant Stone's complaints that the "9(h)" statement is too lengthy and contains immaterial and general facts are unavailing. Stone may be unhappy with the burdensomeness of responding to plaintiff's many papers, but his displeasure does not justify dismissal of plaintiff's bona-fide attempt to comply with Local Rule 1-9(h) and F.R.Civ.P. 56.[10] This litigation is highly complex and plaintiff's motion substantially comports with the governing rules.
Second, defendants' contentions that the Court should deny the motion for summary judgment or, at least, should continue it until defendants can take more discovery under Rule 56(f)[11] are not persuasive. Defendants have had, during the long course of this litigation, many opportunities to pursue discovery efforts of their own, either by depositions, interrogatories, requests for documents and admissions, and the like. The Court cannot now delay this litigation further because of their failure to complete discovery.[12] Indeed, as the case has unfolded, it appears that defendants do not need any additional discovery to successfully oppose plaintiff's motion for summary judgment. As explained below, the Court has denied the bulk of that motion.
Defendant Stone's renewed argument that his lack of funds has prejudiced his defense, and that his and Rosenbaum's inability to attend plaintiff's key depositions has denied them their constitutional right to cross examination, also are without merit. The Court is sympathetic to Stone's financial straits, especially in light of the Internal Revenue Service's attachment of those assets intended to serve as Stone's defense fund,[13] but neither he nor Rosenbaum is indigent. Even if they were, indigent defendants do not have the right to have court-appointed counsel in civil cases where defendants do not face possible loss of their physical liberty. See, e. g., Lassiter v. Department of Social Services of Durham Cy., North Carolina, ___ U.S. ___, 101 S.Ct. 2153, 68 L.Ed.2d 640 (1981); Plaintiff's *800 Opposition to Defendants' Motion to Dismiss at 19-26 (Sept. 20, 1976) (incorporated in this Court's April 14, 1978 Order). As for their absence at certain depositions conducted by plaintiff, defendants have not demonstrated that they did not have notice or opportunity to attend the depositions. The record in this case contains notices of the depositions that were sent to defendants, and defendants' subsequent failure to attend results in a waiver of their rights to object to the depositions. See F.R.Civ.P. 32; Houser v. Snap-on-Tools Corp., 202 F.Supp. 181 (D.Md.1962). The Court also notes that the depositions have not significantly damaged defendants because they have put sufficient material facts in dispute to avoid a complete grant of summary judgment against them. Also, defendants have had ample opportunity to cross examine several of the deponents in Tax Court litigation that has arisen out of the same facts and occurrences that form the basis of the present suit.
Finally, on June 27, 1980, defendant Stone filed a supplemental memorandum in opposition to plaintiff's motion for summary judgment in which he argued that Special Trial Judge Caldwell's report to the Tax Court "supports" Stone's contention that material facts are in dispute which preclude granting summary judgment in plaintiff's favor. However, this report which the Tax Court continues to have under review, is merely interlocutory and advisory in nature and therefore is not a final judgment establishing a basis for denial of plaintiff's motion.
In sum, neither Stone's nor Rosenbaum's scatter gun attack on due process, discovery, or pecuniary deficiencies persuades the Court that they are valid defenses to the summary judgment motion now pending before the Court.
B. Estoppel Effect of the Guilty Plea
On February 10, 1970, defendants Stone and Rosenbaum plead guilty to several counts of a criminal indictment that had been lodged against them in United States v. Stone, Rosenbaum, et al., Criminal Nos. 1233-68 (D.D.C.). Specifically, they plead guilty to nine counts of a thirty count indictment. They admitted participation in a conspiracy to commit an offense or to defraud the United States under 18 U.S.C. § 371 (Count 1)[14], and they plead guilty to making knowingly false, fictitious or fraudulent statements or representations to the Government in violation of 18 U.S.C. § 1001[15] with regard to eight specific Government contracts: NOw 64-0190f (Count 3); NOw 65-0121f (Count 7); NOw 65-0472f (Count 8); NOw 65-0547f (Count 9); NOw 66-0082f (Count 10); NOw 66-0307f (Count 11); Form RB-1 filed June 2, 1965 (Count 15); and Form RB-1 filed April 28, 1966 (Count 16).
Plaintiff contends that defendants' guilty pleas estop them from denying complicity under the False Claims Act, Anti-Kickback Statute and various common law claims presented by plaintiff in the civil complaints brought against defendants. Indeed, the United States alleges that Stone's and Rosenbaum's pleas conclusively establish defendants' False Claims violations relating *801 to all the contracts entered into between Chromcraft/Alsco and the Government during the Scientific/Bregman and Republic stages of the fraud, as well as an Anti-Kickback claim relating to Chromcraft's relationship with Western Molded. The Government accordingly has moved for summary judgment.
Defendants offer basically three responses to the Government's contention. They argue, first, that their pleas were not knowing or voluntary in the sense that they would not have plead guilty had they been aware that such pleas might work an estoppel against them in these civil suits.[16] Second, they contend that a guilty plea does not act as an estoppel in a related civil case. Finally they suggest that, even assuming arguendo that their pleas act as an estoppel, the estoppel only applies to the specific counts that defendants admitted; the plea of guilty to the conspiracy count was not an admission of guilt as to each substantive false claim enumerated therein.
1. Validity of Guilty Plea
Faced with the application of their guilty pleas against them in this civil action, both defendants complain in their memoranda that their pleas were made without knowledge of the possible consequences that they might bring, and also without true convictionboth defendants suggest that they plead guilty for reasons of expediency rather than actual guilt. Additionally, defendant Rosenbaum argued at length at the hearing on plaintiff's motion for summary judgment that this plea has no estoppel effect because he was not fully aware what he was pleading guilty to.
Defendants' excuse for their guilty pleas come too late. The transcripts of the proceedings before Judge Gasch on October 13, 1969, at which defendants pled guilty additionally makes clear that Rosenbaum fully understood the nature and implications of the counts to which he pled guilty. Defendants' attorney, Edward Bennett Williams, stated in those proceedings that "these counts and all the implications of the counts have been very carefully explained to [the defendants]." Additionally, the transcript reflects that Rosenbaum, himself an attorney, answered affirmatively the judge's questions whether he "fully understood [the] charges brought by the Government" to which he was pleading guilty and whether he was entering his plea "voluntarily and of [his] own free will and for no other reason." And both Stone and Rosenbaum unequivocally stated in open Court that they were pleading guilty because they were, in fact, guilty of the crimes to which they pled. Reply to Defendants' Opposition to Plaintiff's Motion for Summary Judgment, Exhibit B at 4-8. They cannot now engage in post hoc rationalizations for their admissions, at least for purposes of mitigating the estoppel effect of their pleas. Like the petitioner in Plunkett v. Commissioner, 465 F.2d 299 (7th Cir. 1972), defendants here cannot expect the Court "to look behind [their] convictions," especially when the record demonstrates that the pleas were made knowingly and voluntarily. See also Brady v. United States, 397 U.S. 742, 757, 90 S.Ct. 1463, 1473, 25 L.Ed.2d 747 (1970); Parker v. North Carolina, 397 U.S. 790, 795, 90 S.Ct. 1458, 1461, 25 L.Ed.2d 785 (1970).
2. Plea Estoppel
Defendants further argue that although a judgment after full litigation in a criminal case may, in some circumstances, conclusively establish liability for a related civil suit, a plea of guilty does not do so. Defendants' argument does find some support, *802 especially by state courts or federal courts construing state law,[17] but well-established principles of federal law hold that guilty pleas collaterally estop the future civil adjudication of issues necessarily admitted to by the plea. See generally, Emich Motors v. General Motors, 340 U.S. 558, 568, 71 S.Ct. 408, 413, 95 L.Ed. 534 (1951); United States v. Podell, 572 F.2d 31 (2nd Cir. 1978).
In United States v. Ben Grunstein & Sons Co., 127 F.Supp. 907 (D.N.J.1955), for example, certain defendants had previously pleaded guilty to a false claims conspiracy. The Court held that their pleas estopped them from relitigating the conspiracy issue under the False Claims Act. In reaching this conclusion, the Court was careful to point out that it is not material whether the judgment of conviction resulted from a trial or a plea of guilty. Both are formal admissions of guilt. "Indeed at times a plea of guilty is given greater scope than is a judgment of conviction after trial..." Id. at 909-10. Similarly, in United States v. Schneider, 139 F.Supp. 826 (S.D.N. Y.1956), a case involving the collateral estoppel effect of a plea under the Surplus Property Act, a statute similar to the False Claims Act, the Court rebutted defendants' argument that guilty pleas should not be given as much estoppel effect as convictions that are based on full trials:
[W]here the prior conviction resulted from a plea of guilty there would appear to be greater warrant for application of the doctrine [than after a trial on the merits] since the defendant has admitted the truth of the charges contained in the indictment. Id. at 829.
See generally, Ivers v. United States, 581 F.2d 1362 (9th Cir. 1978); Metros v. United States District Court for District of Columbia, 441 F.2d 313, 316-17 (10th Cir. 1970); Hyslop v. United States, 261 F.2d 786 (8th Cir. 1958); United States v. Accardo, 113 F.Supp. 783 (D.N.J.1953), aff'd. 208 F.2d 632 (3d Cir.), cert. denied, 347 U.S. 952, 74 S.Ct. 677, 98 L.Ed. 1098 (1954). As recently summarized by the Court in United States v. Cripps, 460 F.Supp. 969 (E.D.Mich.1978), when granting a Government motion for summary judgment in a civil suit under the False Claims Act:
It is well established that a prior criminal conviction establishes the facts underlying the conviction conclusively for purposes of a subsequent civil proceedings instituted by the federal government on the basis of the same facts. Collateral estoppel is operative whether the conviction is obtained by jury verdict or through a guilty plea. Id. at 975.
See also, United States v. Krietemeyer, 506 F.Supp. 289, 292 (S.D.Ill.1980) (defendants' guilty pleas held to establish civil liability for purposes of partial summary judgment under the False Claims Act).
3. Scope of the Guilty Plea Admissions
Just as it is clear that a guilty plea can collaterally estop the relitigation of certain issues in subsequent civil litigation, it also is clear that the estoppel extends only to those issues that were essential to the plea. Emich Motors v. General Motors, 340 U.S. 558, 569, 71 S.Ct. 408, 414, 95 L.Ed. 534 (1951); Brown v. United States, 524 F.2d 693, 705 (Ct.Cl.1975).
Given this second, equally well-established principle, it is necessary to examine the issues that defendants necessarily admitted by pleading guilty to several counts of the criminal indictment lodged against them. As for Counts 3, 7, 8, 9, 10, 11, 15, and 16, defendants admitted, by their plea, that the "Certificates of Current Cost or Pricing Data" that accompany certain contracts, and that certain "Form RB-1" reports that account for costs and expenses during specified contract periods knowingly contained false, fictitious and fraudulent statements and representations. These admissions satisfy the requisites of *803 the False Claims Act,[18] and thus defendants are liable under that Act for the false certificates and Forms RB-1.
The less obvious question is the estoppel effect of defendants' plea of guilty to the conspiracy count, Count 1. That count alleges that defendants conspired to frustrate proper Navy contract procedures by agreeing to submit false, fictitious and fraudulent statements and representations to the Government. The count also describes in some detail the United States' entire version of defendant's allegedly fraudulent scheme, beginning with the Scientific/Bregman stage, through the Republic stage, and into the Western Molded stage.
Plaintiff contends that defendants' plea of guilty to the conspiracy count of the indictment amounts to an admission of guilt to all the allegations made in Count 1, including the substantive allegations. They illogically argue that despite the dismissal of the majority of the indictment's substantive counts in exchange for defendants' plea, defendants are liable for the substantive allegations set forth in those counts because they are incorporated in the comprehensive conspiracy count.
Plaintiff's position finds no support in logic or in the law. A review of the following three, often-cited opinions demonstrates the fallacy of plaintiff's position.
In United States v. American Packing Corp., 113 F.Supp. 223 (D.N.J.1953), a case strikingly similar to the one before the Court, the Government moved for summary judgment in a False Claims Act civil proceeding. The motion was based on defendants' plea of guilty to count one of the indictment conspiracy. [18 U.S.C. § 371]. The count generally alleged defendants' conspiratorial conduct, and then described the conspiracy in some detail. The civil complaint contained ninety-nine counts that detailed asserted violations of the False Claims Act.
Faced with the question whether defendants' plea of guilty to the conspiracy count established their liability for the acts undertaken by the conspiracy as described in Count 1, the American Packing Court found that the plea was of limited effect. The Court concluded that "the plea of guilty to the charge of conspiracy must be confined to the judicial admission that the defendants engaged in a conspiracy to defraud the United States..." Id. at 225. The Court reasoned that pleas of guilty must be construed strictly, and that the admission of a conspiracy is not tantamount to an admission of responsibility for the complete recital of deeds that plaintiff ascribes to the conspiracy. As the Court stated: "[T]hough the defendants pleaded guilty to the general conspiracy, nevertheless the burden is on the Government to prove that the specific transactions affecting each contract were the fruitful result of said conspiracy." Id. at 225-26. "It would seem, therefore, that on the strength of the plea alone the Government would not be entitled to summary judgment as to liability." Id. at 226.
*804 Another decision reaching the same conclusion under similar facts is United States v. Ben Grunstein & Sons Co., supra. In that case, certain defendants had pled guilty to a conspiracy count of an indictment, but were opposing a summary judgment motion lodged against them in a related civil action under the False Claims Act. The civil complaint covered the conspiracy itself, but it also detailed more than 400 other counts of alleged substantive violations of the Act. The Court faced the question of the estoppel effect of the plea to the conspiracy count.
The Grunstein Court first recognized that a guilty plea did serve as an estoppel device, but only for issues "essential to the verdict." It then found that the many acts allegedly undertaken in furtherance of the conspiracy were not themselves admitted to by defendants by reason of their plea. As the Court stated:
But since in a criminal conspiracy case proof of the unlawful agreement between the parties, plus the commission of any overt act, not necessarily all those alleged, suffices to support a verdict of guilty, no conviction of a criminal conspiracy, whether on verdict or plea, suffices of itself, without further evidence, to prove that defendant either admitted, or was found guilty by the jury, of committing any particular act. 127 F.Supp. at 910.
Following its reasoning to its necessary conclusion, Grunstein held that the admission of conspiracy estopped further relitigation of the question whether a conspiracy existed or not, but that the alleged effectuation of the conspiracy, manifested in the substantive counts of plaintiff's civil complaints, was not conclusively established by reason of the plea. Summary judgment was denied.
Finally, the Second Circuit case of United States v. Guzzone, 273 F.2d 121 (2d Cir. 1959) echoes the propositions put forth in American Packing and Grunstein. In that case the Court found that defendants' plea of guilty to a conspiracy charge estopped their later denial of the conspiracy or of the overt acts allegedly a part of the conspiracy. The plea did not, however, establish substantive facts not essential to the conspiratorial behavior of defendants.
In summary, it is clear that plaintiff cannot hope to use defendant Stone's and Rosenbaum's admission to a conspiracy to defraud the Government under 18 U.S.C. § 1001 as a catch-all for conclusively establishing the specific manner by which that conspiracy was effectuated, even though a recital of the alleged scheme is included in Count 1 of the indictment. Instead, the plea of guilty to conspiracy only serves as an admission of the necessary elements of 18 U.S.C. §§ 371 and 1001: viz., that defendants conspired to defraud the United States through knowingly submitting false, fictitious or fraudulent statements or representations to the United States. The fact that defendants allegedly formed "sham" corporations to effectuate such misrepresentations, and that they caused the fabrication of cost data for various contracts is not essential to the fact that a conspiracy existed. Indeed, defendants could be guilty of criminal conspiracy even if their conspiracy were detected and interrupted before they were able to submit any false claims to the Government.
4. Summary of Estoppel Effect
As explained above, defendants' prior guilty plea to nine counts of a criminal indictment under 18 U.S.C. §§ 371 and 1001 collaterally estops them from relitigating issues essential to the convictions. As a result, defendants are liable under the False Claims Act for false certificates and Form RB-1 described in Counts 3, 7, 8, 9, 10, 11, 15, and 16. They also are liable for conspiracy under the False Claims Act by reason of their plea of guilty to Count 1 of the indictment. Their plea on that count, however, does not conclusively establish the substantive counts incorporated in Count 1's explanation of the effectuation of defendants' conspiracy.
C. Summary Judgment for Claims not Admitted by Defendants' Guilty Pleas
Plaintiff has filed an extensive statement of material facts allegedly not in dispute as *805 support for its motion for summary judgment. It suggests that its statement, when taken in conjunction with depositions and other supporting material, conclusively establishes that defendants presented 1,522 false claims for payment to the Government in contravention of the False Claims Act. Plaintiff also alleges that the damages flowing from the purportedly false claims are not in dispute, and it asks for a False Claims award totalling $14,870,626.22. In the alternative, plaintiff contends that it is entitled to recover several million dollars in alleged overcharges under the theory set forth in the Third Claim, recoupment of public funds paid by mistake and under the Anti-Kickback Act. The United States also argues that it has established the Fifth Claim based on facts not in dispute, and thus it asks that the Court impose a constructive trust on certain assets that purportedly represent the fruits of the fraudulent conduct.
Defendants vigorously oppose plaintiff's motion by contending that material facts regarding the allegedly false payments remain in dispute.
After a careful review of the record in this case, the Court concludes that plaintiff is not entitled to summary judgment for those allegedly false statements that are not established by defendants' guilty pleas, except that defendants have been proven liable for certain fictitious claims submitted to the United States under the Western Molded stage of the alleged fraud.
1. Summary Judgment Standard of Scrutiny
Plaintiff bears a heavy burden in order to prevail on a motion for summary judgment. Rule 56(c) of the Federal Rules of Civil Procedure sets forth the standard:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
This Circuit has recognized that a party seeking summary judgment bears a heavy burden of showing an absence of material, disputed facts; inferences drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. See generally Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). As recently summarized by our Court of Appeals in Lee v. Flintkote Co., 593 F.2d 1275, 1281-82 (D.C. Cir. 1979):
In the federal courts, a party moving for summary judgment bears the burden of establishing the absence of any issue of material fact. This principle obtains although the movant would not have the burden of proof at trial. Moreover, the party opposing summary judgment need not present any evidentiary matter unless the movant has made a prima facie showing that the case is completely free from any significant question of fact.
See also Smith v. Nixon, 606 F.2d 1183 (D.C. Cir. 1979).
2. Material Facts to be Proven
Before the Court can evaluate whether "material" facts are in dispute in this case, it must identify the essential elements of a violation of the False Claims Act, the doctrine of recoupment of public funds paid by mistake, and the Anti-Kickback Act. Accordingly, the Court quickly reviews the necessary elements of each.
a) The False Claims Act. For purposes of the remaining issues in this suit the False Claims Act applies to persons who: "make or cause to be made, or present or cause to be presented, for payment or approval ... any claim upon or against the Government of the United States ... knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry..." 31 U.S.C. § 231.
*806 The essential elements of the False Claim Act at issue in the present suit include the "false, fictitious, or fraudulent" nature of the claims presented to the Government, and the fact that defendants "know" that the claims are false, fictitious or fraudulent.
The "knowing" requirement of the False Claims Act has caused some confusion among courts. Some courts have applied common law fraud principles and held that in order to prevail, plaintiff must demonstrate that defendants had a "specific intent" to defraud the Government of the United States. See, e. g., United States v. Aerodex, 469 F.2d 1003 (5th Cir. 1972); United States v. Mead, 426 F.2d 118 (9th Cir. 1970); United States v. Hangar One, Inc., 406 F.Supp. 60 (N.D.Ala.1975) reverse on other grounds, 563 F.2d 1155 (5th Cir. 1977). The preponderant, and better view, however, is that the Act only requires that the defendant knowingly present a false claim to the Government. See United States v. Hughes, 585 F.2d 284 (7th Cir. 1978); United States v. Cooperative Grain & Supply Co., 476 F.2d 47, 58 (8th Cir. 1973); United States v. Krietemeyer, 506 F.Supp. 289, 292 (S.D.Ill.1980). This view is supported both by the language of the statute, which identifies only "intent to defraud" as the requisite state of mind, and by the fact that the statute is remedial and civil, rather than criminal, in nature.
Despite the fact that plaintiff need only prove that defendants had knowledge of the submission of false claims and not a specific intent to deceive the Government, the United States must prove that defendants had "actual knowledge." It is not enough to allege that defendants knew "or should have known" that certain claims presented to the Government were false, fictitious or fraudulent. United States v. Ekelman & Associates, Inc., 532 F.2d 545 (6th Cir. 1976). For example, a defendant's certification of the truth of information given to the Government "to the best of his knowledge or belief" does not demonstrate the actual knowledge of the falsity of the claims that is required to support a violation of the False Claims Act. Id. at 550. Also, there is some authority that plaintiff must prove defendants' knowledge of the falsity of various claims, and the falsity of the claims themselves by "clear, unequivocal, and convincing evidence." See, e. g., United States v. Ueber, 299 F.2d 310, 314 (6th Cir. 1962).[19]
b) Recoupment of Public Funds Paid by Mistake. It is a well-established principle that the Government generally can "recover funds which its agents have wrongfully, erroneously or illegally paid." United States v. Wurts, 303 U.S. 414, 58 S.Ct. 637, 82 L.Ed. 932 (1938); Wisconsin Central Railroad v. United States, 164 U.S. 190, 17 S.Ct. 45, 41 L.Ed. 399 (1896). This common law basis for recovery of funds runs against a person "who received them by mistake and without rights," United States v. Wurts, 303 U.S. at 416, 58 S.Ct. at 638 (emphasis added) these are the material elements that must be proven in order to establish the right to recovery under the doctrine.
c) Imposition of a Constructive Trust. The imposition of a constructive trust is an equitable device designed to deny the use and enjoyment of property to persons who gained the property through wrongful means. See, e. g., Independent Coal & Coke Company v. United States, 274 U.S. 640, 47 S.Ct. 714, 71 L.Ed. 1270 (1926). The imposition of a constructive trust requires proof of three elements. First, there must be a wrongful act. See, e. g., Cunningham v. Brown, 265 U.S. 1, 44 S.Ct. 424, 68 L.Ed. 873 (1924). Second, specific property acquired by the wrongdoer must be *807 traceable to the wrongful behavior. St. Louis & San Francisco & Co. v. Spiller, 274 U.S. 304, 47 S.Ct. 635, 71 L.Ed. 1060 (1926); Reynolds v. Whitin Machine Works, 167 F.2d 78 (4th Cir. 1945), cert. denied, 334 U.S. 844, 68 S.Ct. 1513, 92 L.Ed. 1768 (1948). Finally, there must be a reason why the party holding the property should not be allowed in good conscience to keep it.
d) The Anti-Kickback Act. To recover under the Anti-Kickback Act, plaintiff must establish two elements. First, plaintiff must prove that a payment was made by a subcontractor to an employee or agent of a prime contractor with the United States, or of a higher tier subcontractor under such a prime contract. 41 U.S.C. § 51. Second, plaintiff must prove that such payments were made "as an inducement for the award of a subcontract or order from the prime contractor of any subcontractor, or as an acknowledgement of a subcontract ... previously awarded." Id.
3. Material Facts in Dispute
Defendants dispute certain material facts that are essential to plaintiff's various theories of liability and damages. If defendants' disputes are "genuine," and if they focus on "material facts," i. e., facts that are essential ingredients of plaintiff's theories, then plaintiff's motion for summary judgment must be denied. See F.R. Civ.P. 56 and discussion supra.
The Court finds that defendants have put into genuine dispute certain facts that go to the heart of plaintiff's False Claims Act, recoupment of public funds paid by mistake, constructive trust, and Anti-Kickback Act theories of liability. Only certain material facts relating to the Western Molded Stage of the alleged fraud are not in genuine dispute, and these undisputed facts suffice to establish certain False Claims Act violations that will be detailed below. Defendants also have put into genuine dispute facts essential to plaintiff's claimed damages, and thus summary judgment as to damages must be denied. The following discussion describes, in general terms, the material facts that defendants have genuinely disputed. Each stage of the alleged fraud is considered in turn.
a) The Scientific/Bregman Stage
Plaintiff lays the ground work for the bulk of its False Claims Act, recoupment of public funds paid by mistake, and constructive trust claims by describing the formation and activities of Scientific and Bregman. See generally Plaintiff's 9(h) Statement ¶¶ 14-59. It contends that both companies were "dummy corporations" subject to the direction, control and use of defendants. Plaintiff alleges that these "sham" organizations were falsely represented to the Government as subcontractors who assembled the electrical components for Chromcraft's rocket launchers. The representation allegedly was false because, according to the Government, Scientific and Bregman were only a "paper operation." Stone and Rosenbaum supposedly caused the creation of purchase orders, invoices, receiving reports, and the like between Scientific/Bregman and Chromcraft when in fact Wolf remained the actual assembler of electrical components and when Chromcraft provided Wolf with the raw materials and Wolf delivered the completed assemblies directly to Chromcraft. The United States also contends that the prices stated on Scientific and Bregman's invoices to Chromcraft were inflated: they were higher than the cost of the raw materials and the cost of Wolf's assembly charge, even though neither Scientific nor Bregman did any actual production work to earn what they received. Indeed, the Government suggests that it did not know of the Chromcraft/Scientific-Bregman/Wolf relationship at all; if it had, it allegedly would not have paid the claims presented to it by Chromcraft. Finally, plaintiff alleges that defendants siphoned off the allegedly-inflated profits of Scientific and Bregman into Swiss bank accounts that were established for their own benefit and use. The money was siphoned off by means of fictitious invoices for raw materials that were sent to Scientific and Bregman by foreign companies, acting at the direction of Stone and Rosenbaum.
*808 The Government concludes that Rosenbaum and Stone are liable for hundreds of false claims submitted to the United States during this period, claims based on artificially high prices and/or that concealed the true nature of Scientific's and Bregman's negligible role in the assembly of electrical assemblies. Defendants, however, have put into issue several material facts that undermine the basic theory of the Chromcraft/Scientific-Bregman/Wolf relationship so that it would be inappropriate to grant summary judgment on the hundreds of false claims alleged.
First, defendants strongly contend that neither Scientific nor Bregman were "sham" corporations. Both of them consistently have stated throughout the course of this litigation that the two companies were pioneered in the hope that they would become "second suppliers" of rocket launcher electrical assemblies, complementing Wolf. They state that Chromcraft was receiving increasing Government requests for rocket launchers because of Chromcraft's quality, reliability and low cost, and that Wolf was an undependable supplier of the electrical components of the launchers. Neither Stone nor Rosenbaum admit that they controlled the two companies, except inasmuch as any sole customer "controls" any supplier's business. They further contend that they made great efforts for Scientific and Bregman to become established suppliers, envisioning them to take complete control of the electrical operation, much as an earlier subcontractor, Insul-8, had done previously. The defendants explain that Chromcraft had been forced to become involved in certain aspects of Wolf's assembly operations because of Wolf's inability to handle any responsibilities other than assembly itself. Chromcraft was interested in outfitting Scientific and Bregman with the quality control, inspection, and research and development capability that Wolf lacked, and it was Scientific and Bregman's responsibilities in these matters that justified a markup in electrical assemblies that exceeded the simple cost of raw materials and assemblies.
Defendants buttress this explanation by pointing out that the overall cost of the launcher was, by all accounts, a "lot of launcher" for the price. See, Hearings Before A Subcommittee of the House Committee on Government Operations, 90th Cong.2d Sess. 26 (1968) (statement of Barry J. Shillito, Assistant Secretary of the Navy).
Indeed, defendants point out that Bregman's and Scientific's prices were competitive with other vendors, evidencing the fact that the difference between the total cost for the electrical components and the mere cost of raw materials and assembling charge was merited. The fact that Chromcraft directly supplied raw materials to Wolf and that Wolf directly delivered completed assemblies to Chromcraft does not mitigate the legitimacy of the operation, according to defendants. They point out that such practices are common in the industry; subvendors often "drop ship" their product to the prime contractor. Also, defendants contend that the Government knew that Wolf was involved in the assembly operation, and it did not complain about Wolf's participation.
Finally, defendants admit that Chromcraft's failure to bill Scientific and Bregman for the raw materials used in the assemblies, and to fabricate invoices for materials from foreign firms and thereby siphon off income into Swiss accounts was a tax avoidance device. Indeed, the Internal Revenue Service has determined tax deficiencies and penalties against defendants on the theory that the transactions in Switzerland resulted in understatement of taxable income. A petition for redetermination of the deficiencies and penalties is under submission in the United States Tax Court. Defendants do not admit, however, that their alleged tax avoidance scheme constituted actionable false claims against the United States.
The Court is persuaded that defendants have put into general dispute some material facts underlying the Government's allegations relating to the Scientific/Bregman stage of the alleged fraud. First, the nature of Stone's and Rosenbaum's "control" *809 of Scientific and Bregman is in dispute.[20] It is not clear whether Scientific and Bregman had an independent life of their own. More importantly, there are questions about whether the use of Scientific and Bregman as subcontractors/vendors in charge of electrical assemblies for the rocket launchers was a sham. The Court cannot now accept plaintiff's arguments that these companies had no purpose but to fabricate a flow of paper. Defendants persuasively argue that Chromcraft was unhappy with Wolf, both because he was the sole supplier of the assemblies, and because Chromcraft was unable to depend on Wolf for quality control, inspection, research and development, and the like. Accordingly, it is a reasonable inference that Chromcraft wished to put responsibility for total management of the electric component assemblies on Scientific and Bregman, in the hope that through their relationship with Wolf they might themselves gain the expertise required to become a "second supplier" of the assemblies to Chromcraft. The fact that Wolf continued to receive raw materials during this period from Chromcraft, and the fact that it delivered the assemblies directly to Chromcraft is not conclusive evidence that the intermediaries, Scientific and Bregman, were shams. Defendants have shown that "drop shipping" is an industry practice, as is the purchase of raw materials by third parties. Finally, the alleged "siphoning" of excess profits has been put into dispute by defendants. They contend that the money sent by Scientific and Bregman to foreign firms did not represent excess profits but instead represented the amounts paid to Scientific and Bregman by Chromcraft for raw materials and not recouped by Chromcraft after the latter's free delivery of the materials to Wolf. As such, the siphoning off of this money to Europe may have represented a tax avoidance scheme,[21] but it remains disputed whether any false claims vis-a-vis the price of electrical assemblies paid by the United States resulted from the practice. Finally, defendants allege that the Government knew that Wolf was assembling the electrical components of the launchers, and that Government inspectors actually had visited Wolf's operation.
Defendants thus have put in substantial dispute material facts relating to the overall Scientific/Bregman stage of the allegedly fraudulent schemes. The Court accordingly cannot grant summary judgment on any of plaintiff's theories. They have not shown the required falsity, fictitiousness or fraudulence of the claims, nor have they demonstrated actual knowledge of such, as required under the False Claims Act. Plaintiff also has not demonstrated that it paid Chromcraft "by mistake" nor, more importantly, have they shown that defendants had no right to the contract money, as required under the "recoupment of public funds paid by mistake" theory. Finally, defendants have put into dispute the alleged "wrongfulness" of their acts, as well as the nature of the money "siphoned" from Scientific and Bregman to foreign bank accounts, and therefore a summary judgment motion based on a constructive trust theory must be denied.
b) The Republic Stage
As explained at the outset of this Memorandum, the Government contends that Stone and Rosenbaum used Republic in much the same allegedly false, fictitious or fraudulent manner as it had used Scientific and Bregman. That is, Republic was used by Chromcraft as a "front" intended to disguise cost overcharges for electrical assemblies. Republic was the purported assembler of the electrical components, according to plaintiff, while Wolf continued to assemble the great bulk of the components. Chromcraft allegedly hid Wolf's continued role in the assembly operation for passing along inflated costs to the Government.
Defendants have put several material facts into dispute that require the Court to deny summary judgment for plaintiff on any theory for defendants' conduct during *810 this stage of the alleged fraud. Specifically, defendants point out that Republic was acquired by the Falrock Corporation, a company that neither Stone nor Rosenbaum controlled. Secondly, and more importantly, they contend that Chromcraft looked to Republic as its needed "second supplier" after the Scientific and Bregman experiments failed. Republic was, after all, an established electronics firm, and it demonstrated the potential to take full responsibility for electrical assembly, unlike Wolf.
As it developed, Republic did, in fact, not only assist Chromcraft by taking general responsibility for Wolf's assembly operation, but Republic itself became Chromcraft's long-awaited "second supplier" it also engaged in the assembly process.
In sum, defendants have put into genuine dispute plaintiff's assertion that Republic was controlled by Stone and Rosenbaum, and was used by them to deceive Government contracting personnel. Plaintiff has not conclusively established that any false, fictitious or fraudulent claims were presented to the Government during this stage of the alleged fraud, so no False Claims Act liability can prevail at this stage of the litigation. Likewise, plaintiff has not shown that Government funds were paid by mistake to Chromcraft during this period, nor has it demonstrated that Chromcraft had no right to the funds it requested from the Government. Accordingly, plaintiff cannot now prevail under the doctrine of recoupment of public funds paid by mistake. Similarly, the United States cannot now establish a constructive trust based on alleged improprieties during the Republic stage. No improprieties have been established by undisputed material evidence and, even if they had, the fruits of the allegedly wrongful acts have not been traced to repositories shown by the undisputed material evidence to be under the control of Stone and Rosenbaum.
c) The Western Molded Stage
Defendants have introduced a genuine dispute regarding alleged "kickbacks" paid by Western Molded to Chromcraft during the final stage of the alleged fraud. Defendants present an arguable explanation for the price increase for fairings charged by Western Molded and allegedly set aside as kickback money for Chromcraft to "induce" the award of their business or to "acknowledge" previous awards. See 41 U.S.C. § 51. Defendants allege that part of the money was attributed to Western Molded's higher costs for the new "grenade" type fairing, and that the rest of the increased cost represented research and development costs that DeLuca, Western Molded's president, recognized as owing to Chromcraft.
Thus, defendants have put into dispute whether the alleged kickback accrued to Stone's and Rosenbaum's personal use and whether it played any role at all in Western Molded's continued subcontracting work for Chromcraft. Instead, the money arguably was set aside for Chromcraft as consideration for legitimate recoupment costs for Chromcraft's considerable investment in the development of new designs for rocket launchers.
In establishing a valid summary judgment defense for the alleged kickbacks under the Anti-Kickback Act, however, defendants also have made admissions that require the Court to grant summary judgment in favor of plaintiff under the False Claims Act. Specifically, defendants have admitted that they caused fictitious invoices to be sent by certain foreign companies to Western Molded, requesting payment for certain raw materials that never were delivered nor intended to be delivered to Western Molded. Admission of this fact demonstrates that defendants had "actual knowledge" of the fictitiousness of certain claims made against the Government. Accordingly, summary judgment lies in plaintiff's favor under the False Claims Act for those claims.[22]
*811 d) Damages
While defendants' guilty pleas do establish their liability under the False Claims Act for false certificates and Forms RB-1 described in Counts 3, 7, 8, 9, 10, 11, 15, and 16, they do not determine either the statutory forfeiture or the amount of actual damages for which defendants are liable under the Act. Therefore, summary judgment on the damages issue, as the Government requests, is inappropriate.
Since 31 U.S.C. § 231 provides for a $2,000 forfeiture for each false claim made, a threshold question which must be resolved before the statutory forfeiture can be computed is: what constitutes a "claim" under the False Claims Act? It is clear from the case law that each "individual false payment demand" under a government contract which, as in this case, calls for numerous payments constitutes a false claim. United States v. Bornstein, 423 U.S. 303, 309 n. 4, 96 S.Ct. 523, 528 n. 4, 46 L.Ed.2d 514 (1976). This conclusion is consistent with the Supreme Court's earlier statement that the statutory term "claim" should, in order to effect the remedial purposes of the Act, be broadly construed to include "all fraudulent attempts to cause the Government to pay out sums of money." United States v. Neifert-White, 390 U.S. 228, 88 S.Ct. 959, 19 L.Ed.2d 1061 (1968). Plaintiff accordingly argues that each invoice that was submitted to the Government constituted a "claim since each represented a demand for payment of money." Plaintiff contends that 794 such invoices fall under Counts 3, 7, 8, 9, 10, 11, 15, and 16. Defendants, however, argued that each Public Voucher, Form DD 1034, constituted a "claim" under the Act because the vouchers, and the invoices, cause the payment of money under the United States Government procurement procedures. The Court is, however, unable to determine on the basis of counsels' assertions which of these interpretations is correct because application of the legal standard turns primarily on specific facts not clearly presented to the Court at this time, namely: were those invoices which are listed together on public voucher Forms DD 1034 presented for payment at one time, and attached to the vouchers, or were they individually submitted as separate demands for payment?[23]See, e. g., United States v. National Wholesalers, 236 F.2d 944, 950 (9th Cir. 1956). ("In the absence of evidence that ... the invoices attached by the Army to a single voucher were not sent in together by the supplier, and attached to vouchers by the Army as submitted, it would seem that the number of claims should be computed on the number of vouchers rather than the number of invoices") (emphasis supplied).
Second, as to actual damages, the indictment does not detail damages allegedly flowing from the various counts and thus defendants did not admit to any specific damages. Plaintiff nonetheless asserts that summary judgment on the issue of actual damages is appropriate and it has proffered the affidavit of FBI Agent Edwin Kelly to show the specific damages suffered as a result of the violations under the False Claims Act. Defendants present several defenses to those computations, and the Court finds that those defenses have put material facts into dispute so that the Court cannot grant summary judgment on the issue of damages, even for those claims for which liability has been established.
The Court specifically finds that defendants have genuinely disputed certain important premises of Agent Kelly's computations. Defendants contend that Agent Kelly *812 did not accurately compute the scrap/repair costs pertaining to the assembly of electrical components; they also take issue with Agent Kelly's premise that the addition of the cost of the raw materials plus the bare-bone cost of assembly, together with some percentage allowance for administrative expenses and the like represent the real cost of assembling the electrical components. Instead defendants argue that Kelly has not included the cost of quality control, inspection, and importantly, research and development into his computations. The Court concludes that defendants have, through their broad ranging attack on Kelly's computations, put them in genuine dispute. Plaintiff has not met its "heavy burden" under Rule 56, although it may well prevail when the case reaches the merits.
ORDER
For reasons more fully stated in the accompanying memorandum, it is, this 21st day of August, 1981, hereby
ORDERED: That defendant Stone's motion to dismiss the Third and Fifth Claims is denied; and it is
FURTHER ORDERED: That defendant Stone's motion to dismiss the Second Claim is granted; and it is
FURTHER ORDERED: That defendant Rosenbaum's supplemental motion to dismiss is denied; and it is
FURTHER ORDERED: That plaintiff's motion for summary judgment is granted in part and denied in part. Judgment for plaintiff is granted, for liability only, for conspiracy under the False Claims Act, 31 U.S.C. § 231, and for specific false claims made under contract numbers NOw 64-0190f; NOw 65-0121f; NOw 65-0472f; NOw 65-0547f; NOw 66-0082f; NOw 66-0307f; and for Form RB-1 filed June 2, 1965 and Form RB-1 filed April 28, 1966; and it is
FURTHER ORDERED: That a status conference in this case will be held on September 22, 1981, to discuss the scheduling of the remainder of this action for trial, specifically the scheduling of pretrial briefs leading to a pretrial order which will build upon the issues here resolved and, it is hoped, further refine and isolate the particular issues for trial. The Court also wishes to discuss the desirability of separate trials for liability and damages.
NOTES
[1] The action filed in this Court names Andrew L. Stone and Francis N. Rosenbaum as defendants. The Missouri action names Stone, Chromcraft Corporation and Alsco, Inc. as defendants. The latter two corporate entities have been dismissed pursuant to a Consent Judgment approved by this Court on November 19, 1976.
[2] See, In re Alsco-Harvard Fraud Litigation, 328 F.Supp. 1405, 325 F.Supp. 315 (Jud.Pan. Mult.Lit.1971).
[3] See, e. g., Consent Judgment (November 19, 1976).
[4] Subsequent to the events at issue, Alsco, Inc. became Harvard Industries. Harvard was named a defendant in two suits brought by the Government, but it is no longer a party by reason of a settlement approved by order dated November 19, 1976.
[5] In January 1966, Falrock also acquired 44 percent of the outstanding common stock of Alsco. In that transaction, Falrock's source of funds, according to the Government, was the same Swiss bank account that was the repository for Scientific and Bregman's excess profits.
[6] An injunction already has been placed on certain assets that may qualify for a constructive trust under the Fifth Claim. See, Judgment (December 27, 1976), United States v. Falrock Corporation, et al, No. 76-2350 (D.D. C.).
[7] The injunction now in effect limits Falrock's power to dispose of the stock it holds in the Heath Tenca Corporation.
[8] Rosenbaum raised this argument most recently in his supplemental motion to dismiss filed June 5, 1981.
[9] As mentioned above, this Court's January 23, 1976 memorandum and order reserved the question whether plaintiff could use depositions against defendant Rosenbaum in a motion for summary judgment. The Court need not decide that question because it finds that defendants prevail on those portions of plaintiff's summary judgment motion that are based on deposition testimony.
[10] Stone also argues that plaintiff's 9(h) statement is inadequate because it does not mention claims 2, 3, and 5. This contention is wide of the mark. The 9(h) statement describes facts not in dispute. It is not intended to set forth legal theories.
[11] F.R.Civ.P. 56(f) states:
Should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained depositions to be taken or discovery to be had or may make such other order as is just.
[12] The Court may be sympathetic to a motion to reopen discovery to aid pretrial preparation of the parties if such discovery would not interfere with a trial date for this case and if it would not unduly burden any of the parties in this litigation.
[13] As the trial of this case approaches, the Court renews Judge Weiner's suggestion in his January 8, 1974 memorandum that the Government "give careful consideration to a plan that would permit the movants a reasonable amount to apply towards their defense. This practical situation may prevent this costly and time-consuming case from terminating as an exercise in futility." Id. at 5.
[14] 18 U.S.C. § 371 states:
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than $10,000 or imprisoned not more than five years, or both.
If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment of such conspiracy shall not exceed the maximum punishment provided for such misdemeanor.
[15] 18 U.S.C. § 1001 states:
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.
[16] Defendant Stone also complains that the wording of the indictment differs in significant respects from that captioned in the civil complaints. For example, he states that at most he admitted to "inflated prices" in the criminal proceeding, not the "grossly inflated" prices alleged in the civil matter. This is a distinction without legal significance. The civil liability in this case only requires a showing of inflated (i. e., false, fictitious, or fraudulent) prices plaintiff's vivid use of adjectives does not address the legal question of liability. Also, Stone's contention that the guilty plea only deals with DD form 633 while the complaint also encompasses "related documents" is incorrect. See, e. g., Indictment, Count 1 ¶ 21-24; Counts Two through Thirteen ¶ 2.
[17] See, e. g., United States v. Fabric Garment Co., 366 F.2d 530 (2d Cir. 1966); Teitelbaum Furs, Inc. v. Dominion Insurance Co., 58 Cal.2d 601, 25 Cal.Rptr. 559, 375 P.2d 439 (1962).
[18] The substantive provision of the False Claims Act, 31 U.S.C. § 231 states in relevant part:
Any person not in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the United States, who shall make or cause to be made, or present or cause to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim ... shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act, together with the costs of suit; and such forfeiture and damages shall be sued for in the same suit.
[19] The Court does not necessarily adopt this substantive standard of proof because defendants have put sufficient material facts in dispute to avoid summary judgment regardless of the standard of proof that would be applied to their conduct at trial. It appears to the Court that the Ueber Court's requirement of "clear, unequivocal and convincing" evidence may not be appropriate. Like the "specific intent" requirement, the "clear, unequivocal and convincing" standard is based on common law fraud requirements, not on the language of the False Claims Act.
[20] These facts have been developed in the Tax Court case now under submission.
[21] These facts have also been developed in the Tax Court case now under submission.
[22] The claims based on the false invoices sent by foreign companies to Western Molded will be precisely delineated in the pretrial order and should be more precisely identified by plaintiff in its pretrial brief. The Court need not reach the validity of the claims of recoupment of public funds paid by mistake and imposition of a constructive trust because those theories are pleaded in the alternative to the False Claims Act.
[23] Another difficult and novel question which requires resolution before computation of the statutory forfeiture is: what is the amount of the forfeiture resulting from an admitted conspiracy under the Act? See, e. g., United States v. Kates, 419 F.Supp. 846, 854 and n. 12 (E.D. Pa.1976). Also, the evidence may show that defendants are entitled to a set-off against the double damages authorized under the Act because of any compensatory payments already received by the Government from any source. See generally, United States v. Bornstein, supra, 423 U.S. at 314-317, 96 S.Ct. at 530-531. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2406281/ | 307 S.W.2d 311 (1957)
Thelma GRABES et vir. Appellants,
v.
Ethel O. FAWCETT, a feme sole, Appellee.
No. 6989.
Court of Civil Appeals of Texas, Texarkana.
November 5, 1957.
Rehearing Denied November 26, 1957.
Harold B. Berman, Dallas, for appellants.
Brown & Brown, Texarkana, for appellee.
FANNING, Justice.
*312 This is a plea of privilege case. Appellee, Ethel O. Fawcett, a widow, sued appellants herein in the District Court of Bowie County, Texas. Appellant Thelma Grabes filed a plea of privilege to be sued in Dallas County, Texas, and appellant Walter Grabes filed a plea of privilege to be sued in Harris County, Texas. Appellee duly controverted the pleas on various statutory grounds. The trial court, after hearing the evidence, overruled the pleas, and appellants have appealed.
Among the statutory exceptions relied upon by appellee to sustain venue in Bowie County, Texas, is subdivision 9 of Article 1995, Vernon's Ann.Civ.St. Plaintiff pleaded and proved that appellants committed a trespass in Bowie County, Texas, by converting personal property situated in Bowie County, Texas, and removing said property from said County without the consent of plaintiff, in which property the plaintiff had a sufficient property interest and right of possession to support an action for conversion.
Thelma Grabes and Walter Grabes were married in 1948 in California and were divorced in 1954 in Nevada; as hereinafter related there was evidence in the record that they later lived together and conducted themselves in such manner as to raise the issue that they were common law man and wife; there was also evidence in the record to the effect that they were transient persons and non-residents of Texas.
The plaintiff, Ethel O. Fawcett, who resided in Texarkana, Arkansas, testified to the effect: That defendant Thelma Grabes was a third or fourth cousin of hers and that for a period of about a year prior to the transaction in question, Walter Grabes and Thelma Grabes, who held themselves out to Mrs. Fawcett (and to others) as man and wife, began a course of visiting her home, phoning her (but never writing letters), and frequently spent the night in her home, occupying the same room and the same bed; that they each drove new Cadillac automobiles and represented themselves as being very wealthy and wanted Mrs. Fawcett to go into business with them, representing to her that they would sell her a half interest in some machinery for $25,000; that they would transport the machinery to Texarkana, Texas, and open up a factory, that they would assure her that the factory would pay 15% profits within six months and close to 50% profits or more annually in the next two years; that Walter Grabes represented to her that if she got dissatisfied that he would pay her back and said, "I have the money. It will be her business and yours. I will work for two women instead of one;" that on December 28, 1956, a written agreement (which is found in the record) was entered into for Mrs. Fawcett to purchase a half interest in the listed machinery from Thelma Grabes for the sum of $25,000, with the machinery to be moved to Texarkana; which agreement was witnessed by Walter Grabes and another person; and that Walter and Thelma Grabes demanded that she sign the agreement and get the money. We quote from Mrs. Fawcett's testimony in this connection as follows:
"A. * * * Thursday after Christmas Thelma and Walter followed behind me and demanded the money. And they said, `Tell me where your typewriter is.' And I said, `Over there.' And they listed the equipment and were going to sell me half of it for $25,000.00. I said that I didn't have it. I signed it and she signed it. I didn't think any more about it. I didn't have the money. He said, `Ethel, I have to move that stuff by the first of January.' I said, `Walter, I don't have the money and I can't go on a new venture.' They said, `You get some together and we will be back.' They went to Houston. They were constantly on the road or calling me. After they got my money, they were not the same people any more.
"Q. What did they say about opening a place after they got your money? *313 A. They got to talking about the town. It was lousynobody here. It was the commonest place in the world. They went to condemning me and everybody in Texarkana. They went to drinking heavy.
"Q. You say they did occupy the same room together? A. Yes. When I was crowded during Christmas, they occupied one of my apartments and it only had one bed, and they occupied it, and one time they occupied a garage apartment with one bed, and they occupied it.
"Q. When you paid them this $19,965.00, I will ask you whether or not you had been to the cafeteria on that occasion? A. Yes, we had just been to one, but this was at my house. With what I had borrowed, I had $20,000.00, but I had a grandson in the University that I had to send $35.00, and that left it $35.00 short of $20,000.00, and Walter said that was all right, and Thelma said when she was on the stand that she had asked me for the rest of it but to this day, they have not asked me for another dime.
"Q. Did she ask you that day? A. No.
* * * * * *
"Q. Do you have the original receipt, Mrs. Fawcett? A. He has the receipt. At no time did they ever ask me for any more. They said when we got it up and started that would be soon enough.
* * * * * *
"A. I had two weeks for them to keep wanting me to get it up, and I finally got enough together to satisfy them, and he said I wouldn't have to pay the rest until he got it set up in operation." (Emphasis added.)
The evidence further shows that Mrs. Fawcett paid $19,965 on January 15, 1957, and was given a receipt. We quote further from her testimony with reference to this receipt as follows:
"Q. Mrs. Fawcett, this receipt here reads, `Received $19,965.00 (Nineteen Thousand Nine Hundred Sixty Five and 00/100 Dollars toward one half interest on machinery as per agreement December 28, 1956.' They accepted that $19,965.00 as part interest in that machinery, did they not? A. That's right. (Emphasis added.)
"Q. Now, they took this stuff without your consent and over your protest out of Bowie County, did they not? A. Yes.
"Q. You have sued in here and say if you are not entitled to your money back, you are entitled to your interest in that machinery? A. Yes.
"Q. And you ask that the machinery be partitioned and divided? A. Yes."
The evidence further shows that following the payment of the $19,965 appellants did move a load of machinery to Texarkana, Texas, and placed the same in a building at Spring Lake Park owned by the Four States Fair Association and located in Bowie County, Texas. It is also a rather clear inference from the evidence adduced that appellants made no serious efforts to open a factory in Texarkana, Texas, and really had no good faith intentions of opening up a factory. Mrs. Fawcett testified to the effect that as soon as the Grabes got her money their attitude changed drastically and she asked to get her money back and that they promised to give her money back to her, but did not do so. She further testified that on February 18, 1957, the Grabes (after the lock was broken on the building where the machinery was stored) caused the machinery to be loaded on trucks over her protest and without her consent. That on the morning of February 18, 1957, Mr. and Mrs. Grabes were at the building in Bowie County, Texas, where the machinery in question was being *314 loaded and Mrs. Grabes when told by Mrs. Fawcett not to move the machinery until she could get back out there said, "You come back. It will take to 3:00 or 4:00 to get this stuff loaded." Mrs. Fawcett further testified that on February 18, 1957, she forbade Mr. and Mrs. Grabes to move the machinery, asked Mrs. Grabes where she was going to move the property and that Mrs. Grabes testified that she did not know and might not move it out of Bowie County, Texas, but that after a while Mrs. Fawcett was informed by the truck driver that he was going to take the property to Dallas. Mrs. Fawcett testified that she had her attorney to begin preparing papers for a suit and testified:
"Q. I will ask you whether or not you sued out a writ of injunction before they moved that? A. That's right.
"Q. Was the sheriff able to catch them? A. No, they got away from the county.
"Q. Then you caused the writ of attachment to issue? A. That's right.
"Q. And had it served in Dallas, Texas? A. Yes.
"Q. They have never paid you any of that money back, have they? A. No.
"Q. And you have not released your interest in that machinery? A. No.
"Q. This was in Bowie County that they refused to tell you where they were taking it? A. Yes.
"Q. It was in Bowie County that you told them not to move the machinery? A. Yes.
"Q. Did they move it over your protest? A. That's right." (Emphases added.)
There was testimony in the record to the effect that the truck which went to Dallas left the Fairgrounds building Texarkana, Texas, about 2:00 p. m. The record is silent, however, as to whether the truck proceeded to Dallas immediately without making any further stops in Bowie County. Texarkana, Texas, is on the East boundary line of Bowie County and there is a considerable distance from the East boundary of Bowie County to the West boundary of Bowie County. Dallas is West and South from Bowie County. Papers in the suit were prepared and the District Judge of Bowie County, Texas, 5th Judicial District of Texas, at 3:40 p. m. on February 18, 1957, granted a temporary restraining order restraining the defendants from moving the property in question out of Bowie County, Texas, and the file mark on plaintiff's original petition shows that it was filed with the District Clerk of Bowie County, Texas, at 3:45 p. m., February 18, 1957. The record is silent as to whether the truck in question had gotten out of Bowie County, Texas, by 3:45 p. m., February 18, 1957. The evidence does show that the truck was on the East boundary of Bowie County at 2:00 p. m. on February 18, 1957. The evidence does not show when the truck reached Dallas, however the machinery which went by truck to Dallas was attached in Dallas County, Texas, on February 20, 1957, and the two defendants, Thelma Grabes and Walter Grabes were served with personal citation in Dallas County, Texas, February 20, 1957.
The evidence further shows that another part of the machinery in question was loaded at Spring Lake Park (in Bowie County, Texas) in the truck of Royce E. Nix of Texarkana at the direction of Mr. and Mrs. Grabes, Mr. Nix testified that he was employed by Mr. Grabes, and that both Mr. and Mrs. Grabes instructed him to store such machinery for them at his storage yard in Texarkana which he did. He further testified that he left his storage yard about 12:30 and went to Spring Lake Park and that he loaded part of the machinery on his truck and that "We got back to our yard about 3:30." The evidence does not disclose affirmatively whether the location of Mr. *315 Nix's storage yard was located in Bowie County, Texas, or not.
It is well settled law in Texas that a conversion of personal property amounts to a trespass as contemplated by subdivision 9 of Article 1995, V.A.C.S. Friemel v. Crouch, Tex.Civ.App., 189 S.W.2d 764; Commercial Credit Corp. v. Harris, Tex. Civ.App., 225 S.W.2d 247. Also see authorities cited in 42 Tex.Jur. p. 546.
It is also well-settled law in Texas that a suit for conversion may be maintained by one tenant in common against another tenant in common who appropriates to his own use and benefit the entire property owned in common between them. See Friemel v. Crouch, Tex.Civ.App., 189 S.W.2d 764, and authorities cited therein.
Appellants argue to the effect that appellee Mrs. Fawcett did not have a sufficient property interest and right of possession to a portion of the machinery in question so as to entitle her to maintain a suit for conversion under the facts in this case. In the recent case of Hart (McFarland) v. Meadows, Tex.Civ.App., 302 S.W.2d 448, 450, er. ref., n. r. e., it was stated in the opinion by Chief Justice Chadick as follows:
"Besides asserting there that there is no pleading and no evidence, or at least insufficient evidence to support the judgment, the appellants' points are directed at the proposition that the judgment was erroneous because the plaintiff did not have an interest in and right of possession to the personalty sufficient to maintain an action for its conversion.
"To determine this question, it should be kept in mind that the reassignment and reconveyance provision of the contract (Meadows to Wimberly assignment) is an agreement to convey a title to an interest in real property as well as title to personal property. Both are a part of a single contract and both are inseparably interwoven in the transaction. It is not possible to determine from the contract what the worth of the lease is separated from the worth of the personal property or how much of the $20,000 reserve payment was meant for the lease and how much for the machinery, etc. In Amsler v. Cavitt, Tex.Civ.App., 210 S.W. 766, wr. ref., it was held that the remedy of specific performance was available to require the performance of a contract where both the realty and personalty were the subject of the contract. In Citizens' Water Co., v. McGinley, Tex.Civ.App., 175 S.W. 457, no writ history, there was an agreement to reconvey land if a water well was not drilled. "On failure to drill, it was said that this provision, if regarded as a condition subsequent, was breached, and the court held the grantor might make re-entry and revoke the grant. Or if the provision was considered as an agreement to reconvey upon certain contingencies (if a condition subsequent and an agreement to reconvey upon contingencies may be differentiated) then the grantor or his assigns would have a right to enforce the contract to reconvey by specific performance. In addition to the reasoning and the authority inherent in the cases mentioned, in determining the nature of the property and possessory right of the plaintiff reliance also may be had upon the equitable maxim that equity regards that as done which ought to have been done. Surely, it would not be argued that the plaintiff below could not have properly filed an appropriate equitable action compelling the reassignment of title to the real and personal property when Mid-Gulf failed to continue production operations. Mid-Gulf having breached its obligation and failed to reconvey title, a court of equity would have compelled by specific performance a reassignment of the lease and delivery of title and possession of the machinery, etc.
*316 "While the term `equitable title' is generally associated with a title to real property, there appears to be no sound reason why a property right and ownership in personal property might not be so described. In Henshaw v. Texas Natural Resources Foundation, Tex. Civ.App., 212 S.W.2d 241, 242, wr. ref., n. r. e., a case concerned with land, it is said: `An equitable title in Texas has been defined as "the present right to the legal title."' By analogy it can be said that the interest of the Meadows estate in the personalty was a present right to the legal title and possession of the machinery, etc., in the nature of an equitable title.
"Consideration of the foregoing authorities and reasoning results in the conclusion that plaintiff in this suit had a sufficient property interest and right of possession in the machinery, equipment and supplies to support an action for conversion. In 42 Tex.Jur., p. 530, Sec. 21, on the basis of authorities cited in the footnotes, it is stated:
"`In some of the cases it is simply said that in order to maintain trover a plaintiff must have had some right or title to the chattel in question at the time of the alleged conversion. In other decisions it is declared that the plaintiff must have had either a general or special ownership and, in addition, either possession or the right to immediate possession of the property in question.'
and at page 533, Sec. 23, considering interests in personalty somewhat different but of lesser title and right of possession than shown here, it is said:
"`It is well settled that a chattel mortgagee, pledgee, landlord, or other lienholder may sue for a conversion of the encumbered property and recover its value to the extent of his lien, though he was not entitled to the possession at the time of the conversion.'
"Having concluded that the action for conversion was a proper remedy the appellants', Hart and McFarland's points of error do not show merit and are respectfully overruled. The evidence is sufficient to support the judgment under the pleading and proof."
We hold that under the evidence in this case appellee had a sufficient property interest and right of possession in the machinery in question to maintain the action for conversion.
We also hold that the evidence is sufficient to show that both Thelma and Walter Grabes actively participated in the conversion and are suable jointly for the conversion, irrespective of whether they were common law man and wife.
We are also inclined to the view that the evidence as shown in the record was sufficient to sustain an implied finding by the trial judge to the effect that Thelma Grabes and Walter Grabes were common law husband and wife. Clark, Venue in Civil Actions in Texas, p. 21; Wingfield v. Pool, Tex.Civ.App., 38 S.W.2d 422, and authorities cited therein.
We hold that venue in this case under this record was clearly sustainable in Bowie County, Texas, against both appellants, Walter Grabes and Thelma Grabes, under subdivision 9 of Article 1995, V.A. C.S.
We are inclined to the further view that under the peculiar and unusual facts in this case, the evidence was probably sufficient to support an implied finding by the trial court to the effect that the machinery in question, or a part of it, was located in Bowie County, Texas, at the time the suit was filed, so as to sustain venue in Bowie County, Texas, under subdivision 10 of Article 1995, V.A.C.S., which provides in part as follows: "Suit for the recovery of personal property may be brought in any county where the property may be. * * *"
*317 We sustain venue in Bowie County, Texas, in this case, primarily under subdivision 9 of Article 1995, V.A.C.S. We are of the further view that under this record venue in Bowie County is also probably sustainable under subdivision 10 of Article 1995, V.A.C.S. We deem it unnecessary to discuss the other grounds relied upon by appellee to sustain venue in Bowie County, Texas.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2901599/ | Becker v. State
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
)
IN RE: JOHNNIE LEE CARTER, ) No. 08-05-00349-CV
)
Relator. ) AN ORIGINAL PROCEEDING
)
)IN MANDAMUS
)
OPINION ON PETITION FOR WRIT OF MANDAMUS
Relator Johnnie Lee Carter asks this Court to issue a writ of mandamus against the Honorable
Luis Aguilar, Judge of the 120th District Court of El Paso County, ordering him to vacate or rescind
his orders granting consolidation of causes 2005-3446, 2005-3445, and 2005-3431. Mandamus will
lie only to correct a clear abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992)
(orig. proceeding). Moreover, there must be no other adequate remedy at law. Id.
According to his petition, Relator brought suit against Sun City Towing & Recovery, L.P.
(“Sun City Towing”) for conversion of his truck. Relator alleges that Sun City Towing ordered
Stevens Transport, Inc. to pick up the truck. Relator brought suit against Stevens Transport, Inc. for
conversion. Relator also brought suit against Alliance Leasing, Inc. for breach of contract. The trial
court consolidated the causes.
Under Rule 174 of the Texas Rules of Civil Procedure:
When actions involving a common question of law or fact are pending before the
court, it may order a joint hearing or trial of any or all the matters in issue in the
actions; it may order all the actions consolidated; and it may make such orders
concerning proceedings therein as may tend to avoid unnecessary costs or delay.
Tex.R.Civ.P. 174(a).
It is within the trial court’s sound discretion to order either a consolidated or separate trial.
Womack v. Berry, 156 Tex. 44, 291 S.W.2d 677, 683 (1956). Because most consolidation orders do
not threaten a defendant’s substantial rights, mandamus typically does not lie from a trial court’s
consolidation order. In re Van Waters & Rogers, Inc., 145 S.W.3d 203, 211 (Tex. 2004). However,
if “extraordinary circumstances” exist rendering an ordinary appeal inadequate, mandamus relief
may be appropriate. Id.
Relator asserts that such circumstances exist because as an indigent plaintiff proceeding pro
se he faces substantial expenses in having to serve all three defendants with written discovery,
particularly when two are represented by the same attorney but require separate service. Relator
claims that if he fails to serve all defendants, he will face sanctions. Relator also asserts that
consolidation will limit his ability to uncover additional causes of action and to amend the individual
petitions without adding complexity and within different discovery schedules, which would increase
his chances of prevailing in each case. Further, Relator states that the case against Alliance Leasing,
Inc. is not related to the cases against Sun City Towing and Stevens Transport Inc.
This case does not present “extraordinary circumstances” warranting mandamus relief. The
trial court’s consolidation order involves only three defendants and the issues involved have not been
shown to be complex. Moreover, we do not believe that a joint trial will create any difficulties in
reviewing the evidence upon appellate review. Cf. Dal-Briar Corp. v. Baskette, 833 S.W.2d 612
(Tex.App.--El Paso 1992, orig. proceeding). Because Relator has an adequate remedy by appeal, he
has not established that he is entitled to mandamus relief.
Accordingly, we deny mandamus relief. See Tex.R.App.P. 52.8(a).
December 22, 2005
ANN CRAWFORD McCLURE, Justice
Before Barajas, C.J., McClure, and Chew, JJ. | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1329567/ | 116 S.E.2d 365 (1960)
253 N.C. 86
STATE
v.
Elmer DAVIS, Jr.
No. 217.
Supreme Court of North Carolina.
October 12, 1960.
*369 T. W. Bruton, Atty. Gen., Harry W. McGalliard, Asst. Atty. Gen., for the State.
Charles V. Bell, Charlotte, W. B. Nivens, for defendant, appellant.
HIGGINS, Justice.
Counsel for the prisoner contend the trial court committed five prejudicial errors: (1) Holding the confessions voluntary and permitting the State to offer them in evidence. (2) Overruling defendant's motion to dismiss. (3) Failing to set aside the judgment upon the ground the confessions were involuntary and obtained and offered in evidence in violation of the prisoner's rights under the Due Process Clause of the Fourteenth Amendment. (4) Ordering counsel for the prisoner to sit down and reminding him the trial is not a Roman circus. (5) Denying prisoner's timely request for special instructions.
The first three errors assigned in reality present one question: Were the prisoner's admissions to the officers voluntary? If voluntary, as the term is defined by our Court, they were admissible in evidence. As stated by Henderson, J., in State v. Roberts, 12 N.C. 259, "Confessions are either voluntary or involuntary. They are called voluntary when made neither under the influence of hope or fear, but are attributable to that love of truth which predominates in the breast of every man, not operated upon by other motives more powerful with him, * * *."
In the case of State v. Rogers, 233 N.C. 390, 64 S.E.2d 572, 576, 28 A.L.R. 2d 1104, Justice Ervin collected and analyzed our leading authorities on confessions. We quote one paragraph from his opinion:
"An extrajudicial confession of guilt by an accused is admissible against him when, and only when, it was in fact voluntarily made. State v. Thompson, 227 N.C. 19, 40 S.E.2d 620; State v. Moore, 210 N.C. 686, 188 S.E. 421; State v. Anderson, 208 N.C. 771, 182 S.E. 643. A confession is presumed to be voluntary, however, until the contrary appears. State v. Mays, 225 N.C. 486, 35 S.E.2d 494; State v. Grier, 203 N.C. 586, 166 S.E. 595; State v. Christy, 170 N.C. 772, 87 S.E. 499. When the admissibility of a confession is challenged on the ground that it was induced by improper means, the trial judge is required to determine the question of fact whether it was or was not voluntary before he permits it to go to the jury. State v. Litteral, 227 N.C. 527, 43 S.E.2d 84; State v. Andrew, 61 N.C. 205. In making this preliminary inquiry, the judge should *370 afford both the prosecution and the defense a reasonable opportunity to present evidence in the absence of the jury showing the circumstances under which the confession was made. State v. Gibson, 216 N.C. 535, 5 S.E.2d 717; State v. Alston, 215 N.C. 713, 3 S.E.2d 11; State v. Smith, 213 N.C. 299, 195 S.E. 819; State v. Blake, 198 N.C. 547, 152 S.E. 632; State v. Whitener, 191 N.C. 659, 132 S.E. 603. The admissibility of a confession is to be determined by the facts appearing in evidence when it is received or rejected, and not by the facts appearing in evidence at a later stage of the trial. State v. Richardson, 216 N.C. 304, 4 S.E.2d 852; State v. Alston, supra. When the trial court finds upon a consideration of all the testimony offered on the preliminary inquiry that the confession was voluntarily made, his finding is not subject to review, if it is supported by any competent evidence. State v. Hairston, 222 N.C. 455, 23 S.E.2d 885; State v. Manning, 221 N.C. 70, 18 S.E.2d 821; State v. Alston, supra. A confession is not rendered incompetent by the mere fact that the accused was under arrest or in jail or in the presence of armed officers at the time it was made. State v. Litteral, supra; State v. Bennett, 226 N.C. 82, 36 S.E.2d 708; State v. Thompson, 224 N.C. 661, 32 S.E.2d 24; State v. Wagstaff, 219 N.C. 15, 12 S.E.2d 657."
Without repeating the testimony which is recited in the statement of facts, the trial court had the evidence of the officers that the prisoner was advised he need not make a statement; that if he did it might be used against him. These statements are repeated in the paper signed by him. The officers testified the prisoner had not been mistreated in any way; that he had the same food as other prisoners; that he did not ask to see or communicate with any person except his sister. This request was granted. On the day after the confession the prisoner told Dr. Tross, his former pastora member of his own racethat he had been well treated by the officers. Thus Judge Campbell had before him on the preliminary inquiry substantial and competent evidence upon which to base his finding the admissions of the prisoner were voluntary.
According to our practice the question whether a confession is voluntary is determined in a preliminary inquiry before the trial judge. He hears the evidence, observes the demeanor of the witnesses, and resolves the question. The appellate court must accept the determination if it is supported by competent evidence. State v. Fain, 216 N.C. 157, 4 S.E.2d 319; State v. Whitener, 191 N.C. 659, 132 S.E. 603; State v. Andrew, 61 N.C. 205.
The confession is corroborated in many essential particulars: By the findings of the pathologist; by John Shannon who saw a person hiding in the hedge near the Nivens monument as the prisoner told the officers he had done; by the police having previously found Mrs. Cooper's pocketbook (wrapped in a newspaper) and her glasses in the hedge where he said he had hidden them; by Bishel Buren Hayes who testified his shoes and socks, billfold and contents were stolen from him as the prisoner had admitted to the officers; by the fact the prisoner was able to take the officers to the bushes near the railroad track and recover his discarded clothing. The evidence was amply sufficient to make out a case of murder in the perpetration of the crime of rape. The motion to dismiss was properly denied.
The prisoner has urged that the trial court denied him his rights under the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. Of course, it is as much the duty of the State courts to protect the prisoner's rights under the Due Process Clause of the Fourteenth Amendment as it is to protect his rights under the State *371 Constitution and State laws. There is this difference, however, as we understand it: We place our own interpretation on our State Constitution and laws; but we are required to accept the interpretation the Supreme Court of the United States has placed on the Due Process Clause. Constantian v. Anson County, 244 N.C. 221, 93 S.E.2d 163; Constitution of North Carolina, Article I, Sections 3 and 5; Norris v. Western Union Telegraph Co., 174 N.C. 92, 93 S.E. 465.
In support of their contention the trial court denied to the prisoner due process rights, they cite many cases in which confessions have been rejected when a prisoner has been held beyond the time when he should have been taken before a committing magistrate for preliminary hearing. Careful examination will disclose that confessions were rejected under a rule of evidence set up for trials in the Federal courts and not for violation of constitutional rights under the Due Process Clause.
In the case of Brown v. Allen, 344 U.S. 443, at page 476, 73 S. Ct. 397, at page 417, 97 L. Ed. 469, the Supreme Court of the United States said: "If the delay in the arraignment of petitioner was greater than that which might be tolerated in a federal criminal proceeding, due process was not violated. Under the leadership of this Court a rule has been adopted for federal courts, that denies admission to confessions obtained before prompt arraignment notwithstanding their voluntary character. McNabb v. United States, 318 U.S. 332, 63 S. Ct. 608, 87 L. Ed. 819; Upshaw v. United States, 335 U.S. 410, 69 S. Ct. 170, 93 L. Ed. 100 * * *. This experiment has been made in an attempt to abolish the opportunities for coercion which prolonged detention without a hearing is said to enhance. But the federal rule does not arise from constitutional sources. The Court has repeatedly refused to convert this rule of evidence for federal courts into a constitutional limitation on the states. Gallegos v. State of Nebraska, 342 U.S. 55, 63-65, 72 S. Ct. 141, 146-147, 96 L. Ed. 86. Mere detention and police examination in private of one in official state custody do not render involuntary the statements or confessions made by the person so detained."
The prisoner argues the notation on the arrest sheet that he is to be held for Hucks and Festerman re Mrs. Cooper and not allowed to see or call anyone was a violation of his Due Process rights by the police department. The undisputed evidence, however, is the notation was made by the arresting officer on an envelope at the time of arrest and copied on the arrest sheet at the time the prisoner was placed in jail. The undisputed evidence as testified to by the chief of police is that no one in the department had authority to enter any such memorandum or order. Like-wise undisputed is the evidence of Captain McCall that the notation or order was not enforced. The prisoner asked to see his sister, whom the officers searched for, after some difficulty found, and delivered the prisoner's message. She appeared at the jail and Captain McCall admitted her to a private conference with the prisoner. In fact the prisoner does not even claim he requested or wanted to see any other person. The notation on the record, there-fore, becomes nothing more than an unauthorized and unenforced entry made by the arresting officer at the time of the arrest. There is no question about the right of the officer to make the arrest. Even a private citizen of the State "shall have authority to apprehend any convict who may escape before the expiration of his term of imprisonment whether he be guilty of a felony or misdemeanor, and retain him in custody and deliver him to the State Prison Department." G.S. § 148-40.
At all times after the arrest the defendant was the prisoner of the State under the custody and control of the Director of Prisons. G.S. § 148-4. The Charlotte officers gave the director prompt notice that they had the prisoner in custody. The director might have ordered the prisoner's return to the State's prison, in which case *372 the Charlotte officers would have been required to travel long distances in order to question him. Instead, the director authorized that he be held until they completed their investigation. The arrangement was one of convenience. The place of imprisonment was properly left to the director. The prisoner's term as a State's prisoner began and continued to run from the time of his arrest.
In reviewing a trial court's decision holding a confession voluntary, Federal appellate courts follow our State rule and accept the findings of the trial court if supported by competent evidence. This holding is based upon the ground appellate courts are not triers of the facts. In Stroble v. State of California, 343 U.S. 181, 72 S. Ct. 599, 603, 96 L. Ed. 872, the Supreme Court of the United States said: "This Court has frequently stated that, when faced with the question whether there has been a violation of the Due Process Clause of the Fourteenth Amendment by the introduction of an involuntary confession, it must make an independent determination on the undisputed facts (emphasis added) * * * We adhere to that rule."
The rule is stated in another way in Watts v. State of Indiana, 338 U.S. 49, 69 S. Ct. 1347, 1348, 93 L. Ed. 1801: "In the application of so embracing a constitutional concept as `due process,' it would be idle to expect at all times unanimity of views. Nevertheless, in all the cases that have come here during the last decade from the courts of the various States in which it was claimed that the admission of coerced confessions vitiated convictions for murder, there has been complete agreement that any conflict in testimony as to what actually led to a contested confession is not this Court's concern. Such conflict comes here authoritatively resolved by the State's adjudication."
The record on this appeal discloses the prisoner was arrested as an escapee with 15 years to serve. The State prison authorities authorized the Charlotte police to hold him in custody until they had completed their investigation into the suspicious character of some of the articles of clothing, ladies' panties, billfold and contents, etc. The officers first took him to Canton and Asheville where he was unable to identify the place where he claimed to have stolen these articles. The officers were searching especially for Bishel Buren Hayes whose social security, blood donation cards, etc., were in a billfold taken from the defendant. The prisoner's explanation that he got the billfold and contents from a railroad bum aroused suspicion. These matters were inquired into following the arrest. While it is fair to assume the prisoner from the first was a suspect in the Cooper case, he was not questioned about it until October 2. Four days later he confessed and the following day was specifically charged with the crime of murder. Counsel argue the prisoner's detention for 16 days without filing the murder charge violated Due Process rights, citing Ashcraft v. State of Tennessee, 322 U.S. 143, 64 S. Ct. 921, 88 L. Ed. 1192; Snyder v. Commonwealth of Massachusetts, 291 U.S. 97, 54 S. Ct. 330, 78 L. Ed. 674; Upshaw v. United States, 335 U.S. 410, 69 S. Ct. 170, 93 L. Ed. 100. This, however, is not a case in which a prisoner was held without formal arraignment to determine the legality of his arrest or detention. It is a case in which the officers questioned the prisoner in lawful custody about crimes committed while he was at large as an escapee. Escape from a felony sentence is a felony. Larceny from the person is a felony.
The object of a preliminary hearing is to effect a release for one who is held in violation of his rights. Counsel's argument is answered by the Supreme Court of the United States in the case of United States v. Carignan, 342 U.S. 36, 72 S. Ct. 97, 99, 96 L. Ed. 48: "So long as no coercive methods by threats or inducements to confess are employed, constitutional requirements do not forbid police examination in *373 private of those in lawful custody or the use as evidence of information voluntarily given * * *. We decline to extend the McNabb fixed rule of exclusion to statements to police or wardens concerning other crimes while persons are legally in detention on criminal charges."
The record fails to disclose any violation of the prisoner's rights under the Due Process Clause of the Fourteenth Amendment. His assignment of error with respect thereto is not sustained.
Likewise without merit is the assignment based on the court's command to counsel to sit down and permit the witness (Lt. Sykes) to complete his answer without interruption, and the comment by the court that "this is not a Roman circus." The trial court did not thus express any opinion as to the facts in the case. It may be noted that it is the practice of some superior court judges to require counsel to remain seated at the counsel table when examining witnesses in order to facilitate orderly procedure. The idea is to prevent counsel from approaching too closely to the witness, especially when charging the witness with improper conduct. The prior exchange of comments between counsel and the witness justified the order.
Finally, the prisoner contends he should be awarded a new trial for failure of the court to charge the jury: "If the evidence produced in the trial for this case has proven to you beyond a reasonable doubt that the defendant murdered the deceased in the perpetration of a felony `crime against nature' and has failed to prove to you beyond a reasonable doubt that the deceased was murdered by the defendant in the perpetration of a felony `rape,' then it would be your duty to return a verdict of not guilty."
The bill of indictment as drawn required the State to satisfy the jury by the evidence beyond a reasonable doubt that the prisoner murdered Foy Bell Cooper in the perpetration or attempt to perpetrate the crime of rape in order to justify a verdict guilty of murder in the first degree.
Ordinarily the State is better advised if the bill of indictment is drawn in the form approved by this Court in State v. Kirksey, 227 N.C. 445, 42 S.E.2d 613. When the bill is drawn as thus approved, the State may make out a case of murder in the first degree by satisfying the jury from the evidence beyond a reasonable doubt the murder was "perpetrated by means of poison, lying in wait, imprisonment, starvation, torture, or by any other kind of willful, deliberate and premeditated killing, or which shall be committed in the perpetration or attempt to perpetrate any arson, rape, robbery, burglary or other felony." G.S. § 14-17. By specifically alleging the offense was committed in the perpetration of rape the State confines itself to that allegation in order to show murder in the first degree. Without a specific allegation, the State may show murder by any of the means embraced in the statute.
In the charge as given, to which no exception was taken, the court defined all essential elements of the offense charged, properly placed upon the State the burden of satisfying the jury "from the evidence and beyond a reasonable doubt the defendant on September 20, 1959, while perpetrating the crime of rape, as that term has been defined to you, or while attempting to perpetrate the crime of rape, as that term has been defined to you, upon one Mrs. Foy Bell Cooper, the defendant caused her death, that then it would be your duty to return a verdict of guilty." Then follows the charge as to the verdict of guilty with a recommendation that the punishment be for life in the State's prison. "In conclusion, the court again instructs you that in this case, depending on how you find the facts to be, bearing in mind the defendant has no burden of proof, the burden of proof remaining at all times upon the State of North Carolina, to satisfy you from the evidence and beyond a reasonable doubt as to each and every element necessary to *374 constitute the guilt of the defendant before you may enter any verdict of guilty, and you may return either one of three verdicts in this case; first, the verdict of guilty of murder in the first degree, * * * or 2, guilty of murder in the first degree with a recommendation of life imprisonment, * * * or, 3, you may return a verdict of not guilty."
The charge placed upon the State the burden of proving murder in the commission, or attempt to commit rape; otherwise the court instructed the jury to return a verdict of not guilty. The charge certainly was not unfavorable to the prisoner.
In view of the gravity of the verdict and judgment, we have not only reviewed all assignments of error, the reasons given and authorities cited in support, but in addition we have examined the record proper. In the trial we find
No error. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1627614/ | 561 S.W.2d 897 (1978)
GARDNER MACHINERY CORPORATION et al., Appellants,
v.
U. C. LEASING, INC., Appellees.
No. 8022.
Court of Civil Appeals of Texas, Beaumont.
January 12, 1978.
Rehearing Denied February 9, 1978.
*898 Thomas O. Harris, Houston, for appellants.
Daniel H. Johnston, Jr., Houston, for appellees.
CLAYTON, Justice.
Appellee U. C. Leasing, Inc., brought this suit against Gulf Coast Crane & Rigging, Inc., and Gardner Machinery Corporation for default on a lease contract involving four cranes. Appellee also sued Gardner Machinery Corporation (hereinafter referred to as Corporation) and its president, William C. Gardner, Jr., for conversion of the proceeds of an agreed sale of one of the cranes. The case was tried before a jury, and judgment was entered upon the verdict in favor of appellee and against Gardner Machinery Corporation in the sum of $4,000 and against the Corporation and William C. Gardner, Jr., jointly and severally, in the sum of $80,000, from which judgment appellants appeal.
Gardner Corporation and appellee entered into a business arrangement in 1969. The Corporation purchased four heavy equipment cranes from the manufacturer of such cranes. In order to finance such purchase, the Corporation sold the cranes to appellee, took the proceeds of such sale and paid the manufacturer the total purchase price. The Corporation then leased the cranes from appellee and agreed to pay a certain amount of rental over a certain period of time. This amount of rental is referred to as the "payoff" figure or amount. At the end of the lease, if the payoff amount had been paid, title to such cranes would vest in the Corporation. Under their agreement, the Corporation, at all times, had the right to sell any or all of such cranes. Title to such cranes remained in appellee, and, whenever a crane was sold, a bill of sale would be executed by appellee to the new purchasers.
The Corporation attempted to negotiate a sale of the four cranes to Gulf Coast Crane & Rigging, Inc., but the sale was not consummated. Instead, the cranes were leased by Gulf Coast Crane & Rigging, Inc., from U. C. Leasing, Inc., appellee, with the Corporation guaranteeing the lease. Subsequently, the new lessee defaulted, and appellant William G. Gardner, Jr., met with a representative of appellee, and they negotiated a new agreement with reference to the four cranes. The trial court held that this new agreement constituted a novation of all previous agreements between appellants, appellee, and Gulf Coast Crane & Rigging, Inc. No complaint of this holding by the trial court is made by either party. This oral agreement, therefore, determines the obligations of appellants and appellee for the purpose of judging their subsequent actions. At this meeting, and at the time of making this new agreement, Gardner purchased for cash one of the cranes. The parties agreed that, in the words of appellee's *899 witness, "... Bill Gardner would look for buyers for the three remaining cranes, he would locate those buyers, bring them to us, and remit any funds that were received to us." They also agreed upon the total amount which was to be remitted to appellee. It was further agreed that, if the sale price for the three cranes exceeded the total amount of the "payoff", then the Corporation would retain the excess, and, if the sale price was not equal to the amount of the "payoff", then the Corporation would be obligated to pay to appellant the difference.
Pursuant to this agreement, the Corporation sold two of the cranes and remitted to appellee the sum of $104,000. The Corporation subsequently sold the remaining crane for $80,000. The amount to be remitted was in dispute, appellants' contention being the sum to be remitted was $35,996.87 and appellees asserting the proper amount would be $84,277.74. The Corporation then tendered a check to appellee in the sum of $37,400.29 in full settlement. When there was no immediate response, the proceeds of the sale were used for general corporate purposes of the Corporation. Finally, sixty-two days after the tender letter, appellee returned the tender and refused to accept the same.
In answering the special issues, the jury found that in accordance with the oral agreement between the parties the sum of $84,277.74 was due and owing to the plaintiff (appellee) U. C. Leasing, Inc.; that the Corporation, acting by and through its officers, agents, servants, or employees, converted the proceeds from the sale of the fourth crane, and that William C. Gardner, Jr., in his capacity as President of the Corporation did not participate in, instigate, aid, or abet the Corporation in such conversion. Special Issue No. 4 inquired as to whether or not the plaintiff (appellee) waited more than a reasonable time to return the check to Gardner Machinery Corporation. This issue was predicated upon an affirmative answer to the issue inquiring of the conversion on the part of William C. Gardner, Jr., to which the jury answered in the negative. The jury did not answer this Special Issue No. 4.
The trial court set aside the finding that Gardner, individually, did not participate in the conversion, and held that he was liable for conversion in his individual capacity, and the court entered judgment against the Corporation and Gardner, jointly and severally, for conversion of the sale price of the crane in the amount of $80,000.
Appellant urges in its first point that the trial court erred in holding William C. Gardner, Jr., individually liable because a corporate failure to pay indebtedness is not a conversion. The law is well settled that an officer of a corporation is liable for any tort committed by the corporation through him. Western Rock Company v. Davis, 432 S.W.2d 555 (Tex.Civ.App.Fort Worth 1968, no writ); Permian Petroleum Company v. Barrow, 484 S.W.2d 631 (Tex.Civ.App. El Paso 1972, no writ). Furthermore, this is true whether or not the officer personally benefits from the tort committed. McCollum v. Dollar, 213 S.W. 259 (Tex. Comm.App.1919, jdgmt adopted). The liability of Gardner individually depends, therefore, on whether the refusal to pay over the proceeds of the sale of the fourth crane was a tort by the Corporation or simply a breach of contract. On this point, both parties apparently are in agreement.
The oral agreement between the parties consisted of two completely separate and distinct agreements or undertakings, namely: (1) The parties agreed on the amount of the liability of the Corporation under its guaranty of the Gulf Coast lease which was in default, and (2) The parties agreed that the Corporation would act as appellee's agent in the sales of the cranes. The terms of this second portion of the agreement are not in substantial dispute, nor, when this latter portion of the agreement is isolated can there be any dispute over its legal effect.
The evidence shows that appellant Gardner agreed to sell the cranes and remit the proceeds of those sales to appellee. The absolute title and ownership in and to the cranes was in appellee. It is true that the *900 Corporation's obligation to remit proceeds was limited by the extent of its agreed obligation, and it is likewise true that the Corporation would have been obligated, after remitting all of the proceeds, for any deficiency on the total amount of its obligation. These conditions do not in any way alter, however, the absolute duty of the Corporation to remit the proceeds obtained from the sales of the cranes.
Under the facts of this case, the cranes were in possession of Gulf Coast, the Corporation was to sell the cranes, remit the proceeds to appellee and obtain a bill of sale for the purchaser. This factual situation seems to be almost identical with the facts in Searle-Taylor Mach. Co., Inc. v. Brown Oil Tools, Inc., 512 S.W.2d 335, 337-338 (Tex.Civ.App.Houston [1st Dist.] 1974, writ ref'd n.r.e.). The court held in that case that:
"Appellant ... was authorized to sell the machinery on behalf of appellee and to collect the proceeds of sale for appellee's benefit. As appellee's agent in such transaction, it had a duty to notify appellee of its collection and to make remittance of the proceeds to appellee within a reasonable period of time ... Until remittance was effected, appellant had the duty to keep and maintain the sales proceeds as a separate and identifiable account for the benefit of appellee."
We hold that the sales proceeds, coming into the hands of the Corporation, constituted trust funds and the Corporation owed a duty to appellee to account for such funds. A fiduciary relationship existed between appellee, as principal, and the Corporation, as agent, with respect to the sales proceeds. Searle-Taylor Mach. Co. Inc. v. Brown Oil Tools, Inc., supra. The breach of this duty by the Corporation and through its President, William C. Gardner, Jr., constituted a tort of conversion for which both the Corporation and William C. Gardner, Jr., are liable. Appellants' first point is overruled.
Appellants' second point is that the jury finding as to the amount owing under the contract is so against the great weight and preponderance of the evidence as to be manifestly unjust. The method of calculating the amount of the indebtedness was in dispute. The total amount was in dispute. However, we feel no useful purpose would be served by reciting the conflicting evidence given by the parties. Appellee's witness testified the amount to be $84,277.74. Appellants testified the amount was $35,996.87. The jury chose to believe the appellee. The evidence presented was of probative value to support the findings of the jury. This point is overruled.
The third point urges error of the trial court in submitting the conversion issues. In view of our disposition of the question concerning conversion we agree that these issues should not have been submitted. However, it is clear that no harm was suffered by Gardner individually even though there was no factual dispute justifying the submission of such issues. The jury found that he had nothing to do with the failure by the Corporation to turn over the proceeds (although this finding was properly disregarded by the trial court). The error, if any, did not amount to such a denial of the rights of the appellant "as was reasonably calculated to cause and probably did cause rendition of an improper judgment in the case." Tex.R.Civ. P. 434; Associates Investment Company v. Cobb, 386 S.W.2d 578 (Tex.Civ.App.Beaumont 1964, no writ).
Appellants further complain that the submission of the conversion issues prevented them from obtaining a jury answer to Special Issue No. 4 which related to the delay in returning the appellants "in full settlement" check. Special Issue No. 4 was predicated on an affirmative answer to Special Issue No. 3, which inquired as to Gardner's actions relating to conversion. Appellants made no objection to Special Issue No. 4; so, we have nothing before us to consider in connection therewith. The complaint is made that since the jury answered Special Issue No. 3 in the negative, they could not answer Special Issue No. 4 because of its predicate on an affirmative answer to Special *901 Issue No. 3. The only objections to the charge made by appellants were:
"... objects to ... Issue No. 2 in the following respects:
"1. There is no dispute in the evidence as to the facts behind this charge.
"2. As a matter of law it is impossible to convert monetary proceeds.
"And I will make the same objection to No. 3."
The purported objection to Special Issue No. 3 is in direct conflict with the provisions of Tex.R.Civ.P. 274, and cannot be considered by this court. Sledge v. Murphy, 284 S.W.2d 938 (Tex.Civ.App.Waco 1955, no writ). There being no valid objections in the charge to Special Issues No. 3 and No. 4, there is nothing before us for review. This point is without merit and is overruled.
No error being shown, the judgment of the trial court is affirmed.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3102332/ | Fourth Court of Appeals
San Antonio, Texas
JUDGMENT
Nos. 04-13-00715-CR, 04-13-00716-CR, 04-13-00717-CR & 04-13-00718-CR
EX PARTE Rogelio RINCON, Jr.
From the 379th Judicial District Court, Bexar County, Texas
Trial Court Nos. 2012CR2442, 2012CR2443, 2012CR2444 & 2012CR2445
Honorable Ron Rangel, 1 Judge Presiding
BEFORE JUSTICE BARNARD, JUSTICE MARTINEZ, AND JUSTICE CHAPA
In accordance with this court’s opinion of this date, the trial court’s orders of September
16, 2013, denying habeas relief in these four causes are AFFIRMED.
SIGNED May 28, 2014.
_____________________________
Luz Elena D. Chapa, Justice
1
The Honorable Ron Rangel, presiding judge of the 379th Judicial District Court, referred Rincon’s habeas
applications to the Honorable Andrew Carruthers, Criminal Magistrate Judge, who conducted the evidentiary hearings
on the applications and signed the orders denying relief. | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1521822/ | 636 S.W.2d 851 (1982)
S. M. ADAMS, Jr., Trustee, Appellant,
v.
Maida Harris WILHITE, Appellee.
No. 1532.
Court of Appeals of Texas, Tyler.
July 8, 1982.
Rehearing Denied August 12, 1982.
*852 E. McAlister Benchoff, William D. Guidry, Benchoff & Guidry, Nacogdoches, for appellant.
Marion G. Holt, Holt, Tatum & McCarver, Nacogdoches, for appellee.
McKAY, Justice.
This appeal is from a take-nothing judgment entered against appellant S. M. Adams, Jr., Trustee (Trustee) who sued appellee Maida Harris Wilhite (Mrs. Wilhite) to set aside a transfer of property to her from William J. Wilhite (Mr. Wilhite), who had previously received a discharge in bankruptcy. Appellee cross appeals, claiming that the trial court should have granted her collateral estoppel plea.
In 1971 Mr. Wilhite leased 188 acres of land in Nacogdoches County and began operating the Bill Wilhite Dairy upon it. The lease gave Mr. Wilhite an option to purchase the land.
On August 5, 1977, Mr. Wilhite married appellee. Prior to their marriage, they had orally agreed that appellee would purchase Mr. Wilhite's dairy business. A handwritten document, dated July 28, 1977, reduced this agreement to writing.
On November 3, 1977, Mr. and Mrs. Wilhite executed numerous documents pertaining to the transfer of the dairy business to Mrs. Wilhite. They both signed a formal "Memorandum of Buy-Sell Agreement" stating they had orally agreed on or about August 1, 1977, that appellee would purchase Mr. Wilhite's dairy business.[1] In addition *853 to the Memorandum of Buy-Sell Agreement, Mr. Wilhite executed a Bill of Sale of personal property used in the dairy business, and assigned his interest in the 188 acre lease and purchase option to Mrs. Wilhite. Mrs. Wilhite executed a Financial Statement and signed two promissory notes totalling $149,661.14 which secured the indebtedness on the personal property and cattle.
In March 1978 Mr. Wilhite filed for bankruptcy. In April 1978 Mrs. Wilhite exercised the option to purchase the 188 acre tract of land. The Trustee, on September 7, 1978, objected to Mr. Wilhite's discharge in bankruptcy alleging, inter alia, that Mr. Wilhite's transfer to Mrs. Wilhite of the leasehold interest and purchase option was done with the intent to defraud his creditors. The Bankruptcy Court overruled the objections to his discharge and granted Mr. Wilhite a discharge in bankruptcy, finding that he did not intend to defraud his creditors.
On October 19, 1978, the Trustee filed suit against Mrs. Wilhite in State court to set aside Mr. Wilhite's transfer of properties to Mrs. Wilhite. The Trustee alleged that, prior to August 5, 1977, and at all times thereafter, Mr. Wilhite was deeply indebted and unable to pay his business debts as they became due; that he owned certain real and personal property connected with his dairy business, including the 188 acre leasehold and purchase option; and that he transferred this property to Mrs. Wilhite on November 3, 1977, without fair or adequate consideration and with the intent to hinder, delay, and defraud his creditors. The Trustee further pleaded that following Mr. Wilhite's transfer of this property he remained in possession of the property; that Mrs. Wilhite knew of Mr. Wilhite's intent to hinder, delay, and defraud his creditors; and that at the time of Mr. Wilhite's transfer to Mrs. Wilhite he had no property subject to execution and that she also knew this fact. By trial amendment the Trustee limited his suit to seeking recovery of the leasehold interest and purchase option. The Trustee prayed that Mr. Wilhite's transfer of this property to Mrs. Wilhite be set aside.
Mrs. Wilhite filed a plea in abatement, a general denial, and a special denial. She then filed a "Plea of Collateral Estoppel" alleging that the prior bankruptcy proceeding resulting in Mr. Wilhite's discharge settled the issue of whether Mr. Wilhite fraudulently conveyed property to Mrs. Wilhite.
The trial court overruled Mrs. Wilhite's collateral estoppel plea, and the case was tried before a jury. The jury found that Mrs. Wilhite's transfer to Mrs. Wilhite was made with the intent to defraud a creditor existing at the time of the transfer; refused to find that Mrs. Wilhite acquired the property with notice of Mrs. Wilhite's fraudulent intent; refused to find that the transfer from Mr. Wilhite to Mrs. Wilhite was not made for a fair consideration; found that Mrs. Wilhite had made payments on the purchase price of the 188 acre tract of land; found that these payments were made from her own separate funds; found that she had paid $18,080 as the purchased price of the land; found that she has made improvements on the land with her separate funds; found that she made these improvements in good faith and with the belief that the land was her separate property; and found that the enhanced value of the land was $35,000.
Based upon the jury verdict, the trial court entered a take-nothing judgment against the Trustee.
*854 We first address appellee's contention the trial court should have granted her collateral estoppel plea because the bankruptcy court had previously ruled upon the same issue that was involved in the State court suit. Appellee raises this issue by a "counter point."
The correct title for a point of error brought by an appellee appealing an adverse ruling of the trial court is a "cross-point of error." The Basic Brief and Its Parts, in State Bar of Texas, Texas Appellate Practice Manual § 1.47, at 57 (1974). Rule 422 of the Texas Rules of Civil Procedure, however, mandates a liberal construction of the rules governing appellate briefs. We, therefore, will consider appellee's complaint concerning the trial court's action overruling her collateral estoppel plea.
Whether the trial court acted correctly in overruling appellee's collateral estoppel plea depends upon whether the prior judgment in the bankruptcy court decided the same issue as that presented in the subsequent state court suit. Windmill Dinner Theatre of Dallas v. Hagler, 582 S.W.2d 585, 586 (Tex.Civ.App. Dallas 1979, writ dism'd).
In the bankruptcy proceeding the Trustee was seeking to deny the bankrupt a discharge in bankruptcy. To deny the bankrupt his discharge, the Trustee had to prove that the bankrupt actually intended to defraud a creditor. 11 U.S.C.A. 727(a)(2) (1978); In re Adlman, 541 F.2d 999, 1003-04 (2nd Cir. 1976). The suit in state court was brought by the Trustee to set aside the bankrupt's transfer of property to appellee. Setting aside a transfer of property is governed by Article 24.02 of the Texas Business and Commerce Code (Vernon 1968). It provides:
(a) A transfer of real or personal property, a suit, a decree, judgment, or execution, or a bond or other writing is void with respect to a creditor, purchaser, or other interested person if the transfer, suit, decree, judgment, execution, or bond or other writing was intended to
(1) delay or hinder any creditor, purchaser, or other interested person from obtaining that to which he is, or may become entitled; or
(2) defraud any creditor, purchaser, or other interested person of that to which he is, or may become, entitled.
(b) The title of a purchaser for value is not void under Subsection (a) of this section unless he purchased with notice of
(1) the intent of his transferor to delay, hinder, or defraud; or
(2) the fraud that voided the title of his transferor.
The Trustee pleaded that Mr. Wilhite's transfer to Mrs. Wilhite was made with the intent to delay, hinder, and defraud a creditor. Mrs. Wilhite's collateral estoppel plea asserts that the bankruptcy court's finding that Mr. Wilhite did not have the intent to defraud a creditor settles the "issue of whether or not there was a fraudalent [sic] conveyance of William J. Wilhite to Maida Harris Wilhite ...."
Article 24.02 clearly states that a transferor's intent to defraud is not the only ground warranting a finding of a fraudulent conveyance;[2] the other grounds are the transferor's intent to delay or hinder a creditor. The bankruptcy court passed only upon the issue of Mr. Wilhite's actual intent to defraud his creditors; it did not rule upon whether he intended to delay or hinder his creditors. The Trustee had pled that Wilhite intended to delay or hinder his creditors; thus, at the time the collateral estoppel plea was filed and ruled upon, these issues were properly before the state court. Therefore, there was not an identity of issues before the bankruptcy court and the state court. It follows that the trial court correctly overruled appellee's collateral estoppel plea. See Steakley & Howell, "Ruminations on Res Judicata," 28 Sw.L.J. 355, 356-57 (1974).
The special issues concerning Mr. Wilhite's intent, however, inquired only *855 whether he intended to defraud a creditor and whether Mrs. Wilhite knew of his intent to defraud a creditor.[3] These issues asked the precise question previously decided by the bankruptcy court, and thus, under the doctrine of collateral estoppel, should not have been submitted.
Mrs. Wilhite apparently did not reurge her collateral estoppel plea because no objections were made to the court's charge. In Lanphier Const. v. Fowco Const. Co., 523 S.W.2d 29, 43 (Tex.Civ.App. Corpus Christi 1975, writ ref'd n. r. e.) it is stated:
Where the ground of recovery is submitted, even though it is erroneous, the parties are thereby put on notice that the jury's answers to the issues actually submitted will, if supported by the evidence, form the basis of the court's judgment. It then becomes the duty of each party to point out the errors of omission or commission, or be held estopped from thereafter urging them.
Since Mrs. Wilhite failed to object to the charge as given, she has waived her right to complain. Rule 274, Tex.R.Civ.P.; Leatherwood v. Holland, 375 S.W.2d 517 (Tex.Civ. App. Fort Worth 1964, writ ref'd n. r. e.). We overrule appellee's cross point.
It might also be pointed out that the Trustee did not submit an issue on delay or hinder nor object to the charge. As a result the allegation that Mr. Wilhite did delay or hinder his creditors was waived. Rule 274, Tex.R.Civ.P.
Appellant's first and second points of error will be discussed together. Appellant's first point of error is that the trial court erred in rendering judgment against the Trustee because it was conclusively proved as a matter of law that at the time of the transfer appellee had constructive or actual notice of Mr. Wilhite's intent to defraud his creditors. Appellant's second point of error is that the great weight and preponderance of the evidence shows that Mrs. Wilhite knew facts concerning Mr. Wilhite's financial condition which did give her or should have given her fair notice of his intent to defraud his creditors. We overrule appellant's first point of error, but sustain his second point.
Although appellant attacks the adequacy of the consideration paid by Mrs. Wilhite in points of error three through five, he concedes for the first two points of error that Mrs. Wilhite paid some valuable consideration for the property she received from Mr. Wilhite. Thus, our discussion is limited to subsection (b) of art. 24.02, supra.
If the intent of the transferor to delay, hinder or defraud his creditors is known to the purchaser, or if the purchaser had constructive notice of this intent, the transfer in question is voidable, even where valuable consideration is paid. "[I]f the purchaser knows facts which would put a reasonably prudent person on inquiry and if diligence would lead to knowledge of the transferor's fraudulent intent, the purchaser is charged with constructive notice of the intent and is not protected." Creditors' Bills To Discover and Reach Property, in State Bar of Texas, Creditors' Rights in Texas § 14.43(a)(2), at 631 (2d ed. 1981).
Appellant urges that the presence of numerous "badges of fraud" compel the conclusion that Mrs. Wilhite had actual or constructive notice of Mr. Wilhite's fraudulent intent. A badge of fraud is an act or circumstance from which fraud may be inferred. *856 Id. at 632. Badges of fraud are more or less strong or weak according to their nature and the number concurring in the same case. Although badges of fraud are not conclusive, a concurrence of many in the same case will always make out a strong case of fraud. 37 Corpus Juris Secundum Fraudulent Conveyances § 79 (1943).
The existence of pending lawsuits against an indebted vendor at the time of the transfer alleged to be fraudulent is a badge of fraud. Texas Sand Co. v. Shield, 381 S.W.2d 48, 52 (Tex.1964). Another badge of fraud is the debtor's transfer of all of his property subject to execution. Id. at 52-53. Likewise, the purchaser's failure to examine or inventory the goods bought, or looseness or incorrectness in determining the value of the purchased property is a badge of fraud. 37 Corpus Juris Secundum Fraudulent Conveyances § 94 (1943). Furthermore, a close relationship between the transferor and transferee is not, standing alone, a badge of fraud; however, it does call for rigid scrutiny of the transfer and may, when considered in conjunction with other suspicious circumstances, constitute a badge of fraud. Id. § 96.
Mrs. Wilhite's testimony may be fairly summarized as follows: She stated that Mr. Wilhite told her "he was unable to continue his business due to his financial state"; that she did not question his financial status; that she assumed his debts on cattle, equipment, and the leasehold interest and option to purchase; that she did not go out and count the cows at the dairy; that while she had grown up with dairy animals, she had no experience actually operating a dairy; that she had never bought dairy cows before, that she sought no advice on the purchase of the cows; and that she had not previously purchased any farm equipment and had no idea of its value. She also testified that Mrs. Wilhite told her the cattle and equipment had a negative equity of $30,000 against what he owed the bank on them. She stated that she mainly looked at the lease and purchase option as a place to operate the dairy, and that the lease and the negative equity on the cattle and equipment were a "package deal." She said that she was unaware of a suit against Mr. Wilhite brought by the C. A. Burgess Feed Company to collect a past-due account "until almost court date." She subsequently stated, however, that she learned of the existence of this suit in late October, prior to the execution of the November 3 document. She also testified that at the time Mr. Wilhite transferred his property to her she "didn't feel he had anything else ...." She said she would not have entered into the Buy-Sell agreement if she could not have obtained the lease assignment and that she would not have been able to obtain the lease assignment without assuming all the indebtedness.
Although we do not believe it was conclusively proved as a matter of law, we are of the opinion that the great weight and preponderance of the evidence, including Mrs. Wilhite's testimony, demonstrates she knew facts at the time of the transfer of the property which would put a reasonably prudent person on inquiry concerning Mr. Wilhite's fraudulent intent. Mrs. Wilhite's knowledge of Mr. Wilhite's distressed financial condition and her statement that she felt Mr. Wilhite did not have "anything else," are sufficient, in our opinion, to charge her with constructive notice of Mr. Wilhite's fraudulent intent. Coupling these facts with Mrs. Wilhite's failure to inventory the property she purchased and the close relationship between Mr. and Mrs. Wilhite at the time of the transfer leads us to conclude that the jury's answer to special issue two is so against the great weight and preponderance of the evidence that it is wrong and unjust.
Appellant's third, fourth, and fifth points of error urge respectively that it was conclusively proved as a matter of law that the sale was for a grossly inadequate consideration; that after appellant put on his prima facie case showing the transfer was not for adequate consideration, appellee failed to assume her burden of proof that it was for adequate consideration; and that the great weight and preponderance of the evidence *857 was that the transfer was not for fair consideration. We overrule these points.
Article 24.03 of the Texas Business and Commerce Code (Vernon 1968) states:
(a) A transfer by a debtor is void with respect to an existing creditor of the debtor if the transfer is not made for fair consideration, unless, in addition to the property transferred, the debtor has at the time of transfer enough property in this state subject to execution to pay all of his existing debts.
"Fair consideration" has been defined as "that which is equal or reasonably proportioned to the value of that for which it is given on the date of the transfer." Letsos v. H. S. H., Inc., 592 S.W.2d 665, 668 (Tex. Civ.App. Waco 1980, writ ref'd n. r. e.). See also, Cole v. Loma Plastics, Inc., 112 F. Supp. 138, 140-41 (N.D.Tex.1953).
Mrs. Wilhite obligated herself to pay the following debts: two promissory notes totalling $149,661.14 and securing cattle and personal property in favor of the Stone Fort National Bank; and $4,533.99 to exercise the purchase option on the 188 acre tract of land. The remaining balance owed on the 188 acre tract was $108,000 which bore interest at the rate of five percent (5%) per annum and was payable in $600.00 monthly installments. At the time of trial, uncontroverted testimony established the value of this loan would be $73,374.96 if it bore the market rate of interest. Thus, the consideration paid by Mrs. Wilhite, figured at fair market value, was $227,570.09.
Even though the assets received by Mrs. Wilhite were widely valued, to determine whether she paid fair consideration, we consider only the lowest values. The machinery and cattle were valued at $121,290.00, and the 188 acre tract of land was valued at $115,225.00. Thus, the total amount of assets received by Mrs. Wilhite at the lowest valuation figures is $236,515.00. We are unable to say that she did not pay fair consideration for what she received.
In appellant's sixth point of error, he urges the trial court erred in permitting the Wilhite's accountant to testify concerning the dairy business' losses because it was immaterial, irrelevant, and inflammatory. Appellant argues that the income tax losses of the dairy business are not relevant to whether Mrs. Wilhite paid fair consideration for the dairy business and that, on the contrary, the tax losses caused the jury to be unduly sympathetic to Mrs. Wilhite. Appellee's position is that evidence of the dairy business' income tax losses was relevant to the question of whether Mrs. Wilhite paid fair consideration, because part of the consideration for the transaction was that she took over a "badly failing business" instead of a "going concern." We overrule appellant's sixth point of error.
Mr. and Mrs. Wilhite's accountant testified that he prepared their income tax returns for 1977, 1978, and 1979, and that for those three years the total losses amounted to $43,471.00. The only objection lodged at trial was that this evidence was immaterial. The trial judge overruled this objection.
"Immateriality" is a general objection, and courts have frequently said that it is equivalent to no objection. 1 Ray, Texas Practice § 24 (3rd ed. 1980). We do not believe the trial judge acted improperly in overruling the objection. Id. § 25.
The judgment of the trial court is reversed and the cause is remanded.
NOTES
[1] The Memorandum of Buy-Sell Agreement recited that Mr. Wilhite was unable to pay his business debts as they came due; that Mrs. Wilhite had used her separate funds to operate the dairy since August 1, 1977; and that Mrs. Wilhite had obtained a health permit for the dairy in her name. It further stated that on August 1, 1977, appellee and Mr. Wilhite agreed that (1) appellee would assume all secured obligations owed by Mr. Wilhite, (2) Mr. Wilhite would transfer all assets of the dairy farm to appellee, including any interest he had in the 188 acres of land, (3) appellee would use her separate funds to operate the dairy, (4) the name of the dairy would be changed to the Maida Wilhite Dairy as soon as appellee received a health permit in her name, (5) Mr. Wilhite would receive a salary and help operate the dairy, and (6) Mr. Wilhite would executed any and all papers necessary to complete the transfer of the dairy business.
[2] See Glenney v. Crane, 352 S.W.2d 773, 775 (Tex.Civ.App. Houston 1962, writ ref'd n. r. e.), which holds that to set aside a transfer in a state court suit, a Trustee does not need to prove the bankrupt actually intended to defraud his creditors.
[3] Special Issues Numbers one and two were submitted and answered as follows:
Do you find from a preponderance of the evidence that W. J. Wilhite's transfer of the property in question to Maida Harris Wilhite was made with the intent to defraud any creditor existing at the time of the transfer represented by S. M. Adams, Jr., trustee; from obtaining that to which he is or may become entitled?
Answer "We do" or "We do not"
Answer: We do
If you have answered Special Issue No. 1 "We do" and only in that even, then answer Special Issue No. 2.
Do you find from a preponderance of the evidence that Maida Harris Wilhite acquired the property in question with notice of W. J. Wilhite's intent to defraud any such creditor represented by S. M. Adams, Jr., Trustee?
Answer "We do" or "We do not"
Answer: We do not | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1714756/ | 402 So. 2d 316 (1981)
James Calvin GATOR
v.
STATE of Mississippi.
No. 52612.
Supreme Court of Mississippi.
April 8, 1981.
As Modified on Denial of Rehearing April 29, 1981.
William K. Duke, Richard C. Davis, Oxford, for appellant.
Bill Allain, Atty. Gen. by Mark A. Chinn, Sp. Asst. Atty. Gen., Jackson, for appellee.
Before ROBERTSON, P.J., and BROOM and HAWKINS, JJ.
ROBERTSON, Presiding Justice, for the Court:
James Calvin Gator was indicted, tried and convicted in the Circuit Court of Lafayette County for the rape of a 58-year-old widow. The jury was unable to agree on punishment, whereupon, the trial court sentenced Gator to serve 23 years in an institution designated by the Mississippi Department of Corrections.
Around 10:30 p.m. on October 10, 1978, the prosecutrix, a 58-year-old widow, was awakened by a light in her bedroom. She heard a noise, and turned on a lamp by her bed. After checking the living room and kitchen doors, which were locked, she checked the drapes which were still drawn on the patio sliding door. When she pulled the drapes, she saw a face in the glass door, which was not completely closed. She attempted to close the sliding door but the man outside grabbed her wrist. As she struggled with her assailant, he entered the house and grabbed her by both wrists. After he had pulled her out on the patio, he threw her on the ground and raped her.
He then jerked her to her feet and ordered her back in the house. He told her that he had done a terrible thing, and that he had come there primarily looking for money. She offered him $20 if he would leave, and after she handed him the money she slammed the door and called the police. She was unable to give a description of her assailant other than that he was a black man of about medium build.
About a month and 20 days later, defendant was picked up after midnight on November 29, 1978, for investigation in connection with a series of burglaries. He was transported to the police station and advised *317 of his Miranda rights. After defendant Gator stated that he understood his rights, he signed a printed waiver of rights form in the presence of Detective Captain David Webb and Lieutenant Metts. He then made a statement, reduced to writing by Captain Webb, admitting the rape of the prosecutrix. Gator signed the statement and Webb and Metts signed as witnesses.
At the preliminary hearing, on defendant's motion to suppress, Gator testified, denying that he had raped the prosecutrix or that he had made any statement about the rape. However, he admitted making statements about the burglaries. He admitted that he was not threatened or pressured on the burglary statements. The court overruled the motion to suppress the confession.
Dr. John W. Hunsicker, a young clinical psychologist, testified, at the pre-trial hearing to determine defendant's competency to stand trial, that he had given Gator psychological and personality tests a few days before, that the tests indicated an IQ of 43, and a mental age of 7 years and 2 months. Dr. Hunsicker was unable to testify that Gator had been overreached in making his confession, nor did he have an opinion as to whether Gator knew the difference between right and wrong. The court found that defendant was competent to stand trial. After a full trial, the defendant was convicted and sentenced as aforesaid.
The defendant has assigned 11 errors allegedly committed by the trial court. Most of them have to do with the feeblemindedness of the defendant, and the bearing this would have on his competency to stand trial, or to intelligently waive his rights and make a voluntary confession. The defendant's position seems to be that an IQ of 43, per se, conclusively proves that the defendant, although an experienced 41-year-old man, was not capable of forming a criminal intent to commit rape, was incapable of distinguishing between right and wrong, and was incapable of aiding his two court-appointed attorneys in preparing his defense.
At the trial, Dr. Hunsicker testified as to the psychological tests given Gator and as to his mental and social ages, but he could not state whether defendant was capable of forming a criminal intent, nor could he state whether the defendant knew the difference between right and wrong.
Dr. Donald C. Guild, director of forensic psychiatry at Mississippi State Hospital at Whitfield, testified that he, in conjunction with Dr. Stanley, the staff psychologist, had examined the defendant, after they had reviewed the defendant's history. Dr. Guild testified that he looked primarily at two things: (1) is he competent to stand trial; and (2) is he criminally responsible? Dr. Guild's opinion was that he was competent to stand trial, that he knew the difference between right and wrong, and that he knew the nature and quality of his wrongful act and was, therefore, criminally responsible. Dr. Guild explained that an IQ of 43 arrived at through the Stanford Benet test would not be conclusive as to the real intelligence of a person, that an IQ test can be influenced to a considerable extent by motivation, that most IQ tests contain a social comprehension scale, that an IQ of 43 would be the very bottom reading, and that in his opinion, although Whitfield did not give defendant Gator any psychological tests, his considered opinion, after interviewing and observing defendant and after studying his history, would be that the defendant had an IQ of 70.
The trial of this case took two full days. The record consists of 410 pages, contained in two volumes. The trial judge, in ruling on a motion for a new trial, said, among other things:
"This defendant was indicted by a grand jury of Lafayette County on the 4th day of January, 1979, on the crime of rape. During the January, 1979, term of court and particularly on January 9th, 1979, a motion for psychiatric examination was filed, no jury trial was asked for to determine whether or not the defendant was capable of assisting his lawyers in his defense. After the court had heard the matter without a jury, the court entered *318 an order that the defendant would be examined by a psychiatrist at Whitfield, Mississippi, Mississippi State Hospital. He was finally examined by them. Of course, I am sure the Supreme Court is aware of the problems that the trial courts are having in getting people committed to Whitfield for such examination. After this examination, of course, the psychiatrist at Whitfield says he was capable of communicating, capable of knowing right from wrong, in other words, he met the McNaghton test that is still used by the State Supreme Court. Some time later in the fall of the year, he was examined by a clinical psychologist which the court authorized and upon the trial of the case when the matter involving the motion to suppress confession was heard, the trial court saw and observed the defendant, heard him testify in his own behalf, observed him in the courtroom and heard the other evidence that was presented. The trial judge determined that he was capable of understanding and knowing and appreciating his situation that he was in which he did make a confession and then after he made the confession, he went in the automobile with the officers and pointed out the house where the lady lives. Now it's urged upon this court that due to the facts that the clinical psychologist testified, that this defendant had an IQ of some 43, that as a matter of law, he is incapable of being able to give a confession or incapable of assisting in a rational defense. This court is of the opinion that when the legislature placed feeblemindedness in the same statute as that of insanity, it put the ultimate question to the jury and not to that of the trial judge concerning a person's feeblemindedness, and if I recall correctly, at the arraignment of this defendant, he entered pleas of not guilty by reason of insanity and feeblemindedness, and therefore this court is of the opinion the whole issue to be finally determined is a question of fact for the jury and certainly not a question of law since the same statute now embraces both insanity and feeblemindedness... . The mere fact that the legislature has seen fit to put that [feeblemindedness] under the same statute as that of insanity, this court is of the opinion that he should be tried the same as the issue of insanity and under the same rules and regulations of insanity and the state psychiatrist having testified that although he did not test this man from his interview, talking with him, seeing him, and his diagnosis was that his IQ would be in the range of the 70's, from his long experience working in this field so there was the issue of fact as to what the clinical psychologist testified to and that of the psychiatrist to be resolved by the jury and the whole issue was put to the jury. On the matter of restricting the clinical psychologist in his testimony on the stand concerning many and varied tests that he performed, he testified specifically to the two he said that was the most important, and then after having testified as to this, he would not, even upon the court's question to him, formulate an opinion as to whether or not this defendant was capable of knowing right from wrong. He said he was not qualified to answer that. So having answered that in that manner, the court was of the opinion that and his other testimony he was not going to give an opinion. He was about in the same position as any lay witness not having any facts to back upon and would not render an opinion. His testimony was really of very little value to the court in the trial of the case or to the jury. For those reasons the court will overrule the motion for a new trial, and the judgment notwithstanding the verdict.
MR. DUKE: If it please the court, as a point of clarification, is the court holding that the matter of whether or not the confession itself should have been admitted in evidence was cured by the jury?
THE COURT: No sir, I am not holding that. I am holding that on the basis of the evidence I stated while ago, on the basis of the evidence presented to the court, the court's observation of the defendant *319 in the courtroom the defendant taking the stand and testifying, this court was of the opinion that he did have sufficient understanding and ability to make a confession which the court ruled on in the trial of the case."
(Emphasis added).
We agree with the trial judge that the defendant was capable of understanding his Miranda rights, and, after having these rights explained to him, that he intelligently, knowingly and voluntarily waived these rights and confessed that he committed the offense with which he was charged.
With defendant's confession and Dr. Guild's testimony that defendant was criminally responsible, before them, the evidence was such that the jury could reasonably have found the defendant guilty beyond a reasonable doubt.
One other assignment of error that should be mentioned was that the court erred in not dismissing the charge because the trial took place 385 days after the indictment. The indictment was filed January 4, 1979. The order appointing two attorneys to represent the defendant was dated January 8, 1979, and a motion for psychiatric examination was made by defense counsel on January 9, 1979. The court, after a detailed hearing on January 17, 1979, properly sustained the motion for psychiatric examination. That psychiatric examination was completed at Whitfield on November 6, 1979, at which time defendant was certified as competent to stand trial. A motion to dismiss because defendant had not been speedily tried was filed on January 17, 1980. The record reflects that it was not until the case was called for trial on January 24, 1980, that defendant was arraigned and pled "not guilty". After overruling the motion to dismiss, the court proceeding with a full trial on January 24 and 25, 1980. Most of the delay between the date of the indictment and the date of trial was because of the difficulty in getting a psychiatric examination at Whitfield. The motion for psychiatric examination at Whitfield was made by defendant, and no motion for a private examination was ever made.
Mississippi Code Annotated section 99-17-1 (Supp. 1980) provides:
"Unless good cause be shown, and a continuance duly granted by the court, all offenses for which indictments are presented to the court shall be tried no later than two hundred seventy (270) days after the accused has been arraigned."
(Emphasis added).
Admittedly the defendant was not arraigned until January 24, 1980. There is no merit in this assignment of error.
We have carefully considered and studied the other assignments of error and find them to be without merit.
The conviction and sentence are, therefore, affirmed.
AFFIRMED.
PATTERSON, C.J., SMITH, P.J., and SUGG, WALKER, BROOM, LEE, BOWLING and HAWKINS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1751685/ | 900 S.W.2d 363 (1995)
Rudolfo MATA, Appellant,
v.
ANDREWS TRANSPORT, INC., Appellee.
No. A14-94-00259-CV.
Court of Appeals of Texas, Houston (14th Dist.).
April 13, 1995.
*364 Edward L. Noah, Houston, for appellant.
Deanna Dean Smith, Houston, for appellee.
Before MURPHY, ANDERSON and HUDSON, JJ.
OPINION
ANDERSON, Justice.
This is an appeal from a summary judgment. In one point of error, Rudolfo Mata challenges the grant of summary judgment on the ground that federal law precludes appellee's state law defense that the driver of a truck involved in the collision was not acting in the course and scope of his employment. Holding that federal law does not impose such strict liability upon commercial carriers for the negligence of their drivers, we affirm the trial court's judgment.
Appellant sued appellee for damages for personal injuries suffered when a truck bearing appellee's insignia collided with appellant's vehicle. Appellee was a commercial carrier who leased the truck involved in the collision. Appellant also sued the lessor/owner and driver of the truck, Stephen Joe Henry. Appellee filed a motion for summary judgment, contending that no fact issues existed to prove that Mr. Henry was driving within the course and scope of his employment at the time of the collision. Appellant then filed a second amended original petition asserting provisions of the Interstate Common Carrier Act and ICC regulations. Appellant also filed a response to the motion, arguing application of these regulations. After a hearing, the trial court granted appellee's motion.
*365 Before turning to appellant's challenge to the summary judgment, we must address appellee's claim that this appeal was not timely perfected and should be dismissed for want of jurisdiction. The trial court granted appellee's motion for summary judgment on December 29, 1993. This did not become a final, appealable order, however, until January 25, 1994, when the trial court granted a severance from the claims against the driver of the truck. Appellant filed a motion for new trial on February 9, 1994. After this motion was denied, appellant perfected this appeal by a cash deposit on March 16, 1994.
Appellee contends that appellant's motion for new trial was untimely and that appellant's cash deposit in lieu of an appeal bond was also untimely. Rule 41 sets out the requirements for perfecting an appeal:
When security for costs on appeal is required, the bond or affidavit in lieu thereof shall be filed with the clerk within thirty days after the judgment is signed, or, within ninety days after the judgment is signed if a timely motion for new trial has been filed by any party....
TEX.R.APP.P. 41(a)(1).
Appellee's argument would have merit if the date of the final judgment was December 29, 1993, the date the trial court granted the summary judgment motion. This, however, is not the date of the final judgment. The order of December 29, 1993 was merely an interlocutory order and unappealable because the order did not dispose of all parties and causes of action. Cherokee Water Co. v. Ross, 698 S.W.2d 363, 365 (Tex. 1985). The order granting summary judgment did not become a final judgment until the trial court granted a severance on January 25, 1994. See id.; North East Indep. School Dist. v. Aldridge, 400 S.W.2d 893, 897-98 (Tex.1966). Thus, the time periods for filing a motion for new trial and for perfecting an appeal did not begin until January 25, 1994. Calculating from this date, appellant's motion for new trial was timely filed and this appeal was timely perfected.
Appellant raises one point of error, challenging the grant of summary judgment. 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." Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex. 1970). In determining whether there is a disputed material fact issue precluding summary judgment, we must take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving all doubts in favor of the nonmovant. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).
In its motion for summary judgment, appellee contended that no fact issues existed to show that Stephen Joe Henry was acting within the course and scope of his employment when he collided with appellant's vehicle. In response, appellant raised ICC regulations, contending that these imposed liability on the employer even if there would be no liability under state law. Appellant asserts that these regulations preempt state law regarding course and scope of employment.
In 49 U.S.C.A. § 11107, Congress delegated to the Interstate Commerce Commission the power to impose certain requirements on carriers in the operation of motor vehicles, which they do not own, in providing transportation subject to the Commission's jurisdiction. This statute authorizes the Commission to impose certain requirements upon the lease of commercial truck-tractors. See 49 U.S.C.A. § 11107 (1994). Both federal regulations promulgated to effect these statutory guidelines and Texas law require a written lease providing the name and address of the person other than the owner of the vehicle under whose supervision, direction, and control the vehicle will be operated, and providing that the operation of the truck-tractor shall be under the full and complete control and supervision of the lessee (non-owner). See 49 C.F.R. § 1057.12(b); Tex.Rev.Civ. Stat.Ann. art. 6701c-1, § 4 (Vernon Supp. 1995). In Texas, the lease must be filed with the Texas Department of Public Safety. See Tex.Rev.Civ.Stat.Ann. art. 6701c-1, § 2 (Vernon Supp.1995).
Because these laws require the lease to include language imposing complete control of the leased vehicle in the lessee, appellant *366 contends that these laws essentially impose strict liability on the lessee for negligent operation of the vehicle causing injury to others. The purpose of these laws was to stop the practice of leasing vehicles under informal, oral arrangements that, among other things, "made the fixing of the lessee's responsibility for accidents highly difficult." American Trucking Ass'ns v. United States, 344 U.S. 298, 305, 73 S. Ct. 307, 312, 97 L. Ed. 337 (1953). Thus, the federal statute was construed "to protect the public from the tortious conduct of judgment-proof operators of interstate motor carrier vehicles...." Price v. Westmoreland, 727 F.2d 494, 496 (5th Cir.1984).
In applying these laws, courts have developed and applied the "statutory employee" principle. This principle holds a carrier vicariously liable for injuries resulting from a driver's negligent operation of the truck when three factors are present:
(1) the carrier does not own the vehicle;
(2) the carrier operates the vehicle, under an "arrangement" with the owner, to provide transportation subject to the Commission's jurisdiction; and
(3) the carrier does not literally employ the driver.
John B. Barbour Trucking Co. v. State, 758 S.W.2d 684, 688 (Tex.App.Austin 1988, writ denied). In these circumstances, the courts hold that the driver is the constructive or "statutory" employee of the carrier and that the carrier may be vicariously liable for the employee's negligence through the doctrine of respondeat superior. Id. The "statutory employee" principle, however, is not one of strict liability and the carrier may raise any defense available to an employer under state law. Id.
Under Texas law, employers may be held liable for negligent acts by their employees under a theory of respondeat superior only if the employee's actions are in the course and scope of their employment. See Drooker v. Saeilo Motors, 756 S.W.2d 394, 396 (Tex.App.Houston [1st Dist.] 1988, writ denied). To show that a party acted within the course and scope of his employment, a plaintiff need not show the negligent act was expressly authorized by the employer. Id. at 397. Instead, the plaintiff need only show that the act was:
(1) within the general authority given him;
(2) in furtherance of the employer's business; and
(3) for the accomplishment of the object for which the employee was employed.
Id.
Employers generally are not liable for accidents involving their employees while they are travelling to and from work. See Texas General Indem. Co. v. Bottom, 365 S.W.2d 350, 354 (Tex.1963). There is a presumption that an employee is within the course and scope of employment while travelling to and from work if the employer owns the vehicle and regularly employs the driver. Robertson Tank Lines, Inc. v. Van Cleave, 468 S.W.2d 354, 357 (Tex.1971). The employer may rebut this presumption with evidence that the employee was not in the course and scope of employment. Id. This presumption is inapplicable in this case because appellee did not own the truck involved in the collision.
Another exception to the general rule removing liability from an employer for collisions involving employees driving to and from work is where the employee was furthering the employer's business and being compensated for the time. See Texas Gen. Indem. Co., 365 S.W.2d at 354. Appellee attached portions of Mr. Henry's deposition in which he stated that he was commuting from his home in Austin to appellee's shipping yard in Houston at the time of the collision. Mr. Henry further stated that appellee did not designate a specific route, did not compensate him for the commute, and did not supply fuel for this trip. Appellant did not present any evidence to contradict appellee's testimony. Thus, the second exception regarding travel to and from work does not apply. The summary judgment proof establishes that Mr. Henry was not acting within the course and scope of his employment when the collision occurred. Therefore, the trial court properly granted *367 summary judgment in favor of appellee. We overrule appellant's sole point of error.
We affirm the judgment of the trial court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2432588/ | 898 S.W.2d 924 (1995)
Charlotte A. KELLY, Appellant,
v.
Donald L. STONE and Erath County Electric Cooperative Association, Appellees.
No. 11-94-035-CV.
Court of Appeals of Texas, Eastland.
April 27, 1995.
Rehearing Overruled June 15, 1995.
*925 Garry Lewellen, McMillan & Lewellen, Stephenville, David Fielding, Tim G. Sralla, Fielding, Barrett & Taylor, Fort Worth, for appellant.
Charles Nichols, Amy Witherite, Russell W. Schell, R. Michael Beene, Schell, Beene & Vaughan, Dallas, for appellees.
McCLOUD, Chief Justice (Retired).
Charlotte A. Kelly sued her employer, Erath County Electric Cooperative Association (Cooperative), and two of its employees, Donald L. Stone who was the general manager of the Cooperative and Stephen McArthur who was the office services division manager of the Cooperative, alleging intentional infliction of emotional distress and assault.[1] The jury found that the Cooperative (through McArthur) committed assault or intentionally inflicted emotional distress on Kelly and awarded compensatory and punitive damages in the amount of $300,000 against the Cooperative. The jury also found that Stone did not intentionally inflict emotional distress on Kelly.
The trial court granted the appellees' motion to disregard jury findings, or, in the alternative, motion for judgment notwithstanding *926 the verdict[2] and ordered that Kelly take nothing in her suit against Stone and the Cooperative. Kelly appeals, and the Cooperative and Stone file cross-points.[3] We affirm.
The Cooperative hired Kelly as the senior billing clerk in 1980. Kelly's duties included handling the billing, checking for billing errors, and managing the accounts receivable. Stone was hired in 1987 as the general manager. Stone hired McArthur in 1988 to manage the "office services division" of the Cooperative. McArthur answered directly to Stone and was responsible for the "inside" operations of the Cooperative.
McArthur and Kelly developed a relationship outside of the Cooperative. Kelly visited in McArthur's home more than once. On one occasion, while Kelly was visiting in McArthur's home, McArthur told Kelly that they were "soul mates" and that they had been together in a past life and belonged together in this life. McArthur made sexual advances toward Kelly on another occasion while Kelly was visiting in McArthur's home.
At the Cooperative, McArthur left books about reincarnation on Kelly's desk. On another occasion, McArthur chased Kelly around a table and "rubb[ed] [her] on the bottom." McArthur also looked up Kelly's dress while she was on a ladder and made lewd comments. During coffee breaks, McArthur told Kelly about sexual problems that he was having with his wife. McArthur called Kelly on a daily basis on her phone intercom and spoke to Kelly for approximately 30 minutes. During these conversations, McArthur told Kelly that he wanted her and her children to move in with him, his wife, and children. McArthur also told Kelly that they were "soul mates." In the fall of 1988, McArthur placed an audiotape on Kelly's desk and told her that "this [was her] copy of the tape." The tape contained a lewd label and lewd songs. We have reviewed the audiotape, and we find that there is nothing on the tape that relates to the business of the Cooperative.
In January of 1990, Kelly told her immediate supervisor, Ruth Boucher, "basically everything" that was going on at work with McArthur. Boucher arranged a meeting between Stone and Kelly to discuss McArthur. Kelly told Stone that McArthur was "obsessed" with her and that McArthur believed that he and Kelly were "soul mates." Kelly also told Stone that she wanted to be left alone so that she could do her work.
After Kelly's meeting with Stone, McArthur did not call Kelly on the intercom "quite as much"; but McArthur stared at Kelly and continued to touch Kelly and to make lewd comments. Kelly resigned her position at the Cooperative as a result of the problems with McArthur. Kelly testified that she and McArthur had never had an extramarital affair. McArthur, who testified by deposition, described in detail an alleged extramarital sexual relationship with Kelly. The jury rejected McArthur's testimony. We will disregard any of McArthur's testimony that is contrary to the jury's finding.
In her first and second points of error, Kelly contends that the trial court erred in disregarding the jury's finding to Question No. 2 and/or granting the judgment n.o.v. because there was sufficient evidence to support the finding that the Cooperative, acting through McArthur, assaulted Kelly or intentionally inflicted severe emotional distress on Kelly.[4] We disagree.
A trial court may render judgment notwithstanding the verdict if a directed verdict *927 would have been proper. A trial court may, upon motion and notice, disregard any jury finding on a question that has no support in the evidence. TEX.R.CIV.P. 301. In order to uphold the trial court's judgment n.o.v., we must determine that there is no evidence to support the jury's finding. Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 227 (Tex.1990); Williams v. Bennett, 610 S.W.2d 144, 145 (Tex.1980). When reviewing a "no evidence" question, we consider only the evidence and the reasonable inferences therefrom that tend to support the jury's findings and disregard all evidence to the contrary. Mancorp, Inc. v. Culpepper, supra. If there is more than a scintilla of competent evidence to support the jury's findings, it must be upheld. Mancorp, Inc. v. Culpepper, supra at 228.
On the issue of whether the Cooperative (through McArthur) assaulted or intentionally inflicted emotional distress on Kelly, the jury was given the following instructions:
You are instructed in answering Question No. 2 that an association or corporation acts through its agents and employees and that any act of an agent or employee is considered to be the act of the association or corporation so long as that act was committed in the course and scope of employment. You are further instructed that a person acts within the course and scope of employment if the acts were done within the scope of the general authority given to the employee by the employer. Furthermore, the acts must have been done in furtherance of the Employer's business, and the acts must have been done to accomplish the job for which the employee was employed. (Emphasis added).
It is not ordinarily within the scope of an employee's authority to commit an assault on a third person. Texas & P. Ry. Co. v. Hagenloh, 151 Tex. 191, 247 S.W.2d 236, 237 (1952). Assault is usually the expression of personal animosity and is not for the purpose of carrying out the employer's business. Texas & P. Ry. Co. v. Hagenloh, supra; Green v. Jackson, 674 S.W.2d 395, 398 (Tex.App.Amarillo 1984, writ ref'd n.r.e.) In general, to impose liability on the employer for the tort of his employee, the act of the employee must fall within the scope of the general authority of the employee in the furtherance of the employer's business and for the accomplishment of the object for which the employee was hired. See Smith v. M System Food Stores, 156 Tex. 484, 297 S.W.2d 112, 114 (1957); Texas & P. Ry. Co. v. Hagenloh, supra at 239-240; International & G.N.R. Co. v. Anderson, 82 Tex. 516, 17 S.W. 1039, 1040 (1891); Home Telephone & Electric Co. v. Branton, 7 S.W.2d 627, 629 (Tex.Civ.App.Eastland 1928), affm'd, 23 S.W.2d 294 (Tex.Comm'n App.1930). To be within the scope of employment, "the conduct must be of the same general nature as that authorized or incidental to the conduct authorized." Smith v. M System Food Stores, supra.
In Hagenloh, the plaintiff worked as a brakeman on the defendant's freight trains. Houghland also worked for the defendant as a special agent. Houghland's duties were to protect the defendant's property, investigate trespasses and claims, and search for missing property. While he was searching for missing jewelry, Houghland confronted the plaintiff. The plaintiff called Houghland a liar, and Houghland struck the plaintiff. The court held that, in striking the plaintiff, Houghland was not acting in furtherance of the defendant's business but was carrying on an enmity that had developed between Houghland and the plaintiff and that Houghland's acts were not for his employer but were personal to Houghland.
In Tierra Drilling Corporation v. Detmar, 666 S.W.2d 661, 662 (Tex.App.Corpus Christi 1984, no writ), the plaintiff was assaulted by his immediate supervisor while the two were eating lunch in the defendant company's trailer. The defendant company challenged the legal and factual sufficiency of the evidence to support the jury's finding that the attack occurred while the assaulting employee was acting in the course and scope of his employment with the defendant company. The court found that the use of force *928 was in no way related to the defendant's business and that the defendant had never authorized any employee to use force on another employee. The court also found that there was no close relationship between the assault and the performance of the duties of the employee. The court held that, in assaulting the plaintiff, the supervisor was pursuing his own interests.
In Southwestern Bell Telephone v. Wilson, 768 S.W.2d 755 (Tex.App.Corpus Christi 1988, writ den'd), the defendant was held vicariously liable for the wrongful conduct committed by agents of the defendant, which included two attorneys who represented the defendant in collecting an agreed judgment. The plaintiff alleged claims of intentional infliction of emotional distress, assault, and battery in addition to other causes of action. The trial court entered findings of fact that one of the attorneys verbally and physically assaulted and battered the plaintiff during the attempted execution on the plaintiff's property, that the attorney told the plaintiff that he was going to ruin him and put him out of business, and that the attorney repeatedly poked the plaintiff on the chest with his hand and "cussed" him out. Southwestern Bell Telephone v. Wilson, supra at 758-759.
The Wilson court found that the alleged intentional torts were committed in furtherance of the collection efforts for the defendant's benefit. The court also found that, while there was no evidence that the defendant encouraged or ordered the tortious behavior, the acts were committed for the purpose of accomplishing the mission entrusted to the attorneys as opposed to those cases in which the agent or employee committed a tortious act because of some personal animosity.
Kelly cites Bushell v. Dean, 781 S.W.2d 652 (Tex.App.Austin 1989), rev'd on other grounds, 803 S.W.2d 711 (Tex.1991), as support for her contention that McArthur was fulfilling a company purpose while conducting his misdeeds. In Bushell, the plaintiff sued her former manager and employer, claiming assault, sexual harassment, and intentional infliction of mental or emotional distress. On appeal, the employer argued that the evidence was legally and factually insufficient to show that the manager's actions were within the course and scope of his employment. The facts showed that, after the plaintiff publicly spurned the manager's desires for her, the manager retaliated by assigning the plaintiff more work and by becoming more demanding as a supervisor. The court found that assigning more work was within the manager's authority and that supervising employees more closely furthers the object for which the manager was hired. Bushell v. Dean, supra at 659.
In an effort to show that McArthur was acting within the scope of his duties, Kelly established that McArthur had direct control over the work of the Cooperative's office staff, including Kelly. McArthur was able to implement changes concerning the duties of Kelly. Although McArthur was not Kelly's immediate supervisor, McArthur was "in charge of" the office staff and "could tell anybody what to do." Kelly had daily contact with McArthur because she had to pass directly by McArthur's office whenever she went to the break room or to the rest room.
McArthur was hired to manage and supervise the "office services division" of the Cooperative. McArthur's duties at the Cooperative did not include the use or threat of physical force or physical conduct against employees, nor did Stone ever direct McArthur to assault or inflict emotional distress on Kelly. There is no evidence to show that McArthur's conduct was in the furtherance of the Cooperative's business or for the accomplishment of the object for which McArthur was employed. While a manager can be expected to communicate with his subordinates, McArthur's comments to Kelly about his desires that they belonged together in this life, his comments about his marital problems, and his comments about Kelly's attire were not work related. Additionally, McArthur's assault against Kelly, the daily intercom calls to Kelly, and the audiotape that McArthur gave Kelly were not within *929 the scope of general authority given to McArthur by the Cooperative.
When only the evidence supporting the jury's finding is considered, the record clearly shows that McArthur was motivated by his personal obsession and that he pursued his own personal gratification. This was not in the furtherance of the Cooperative's business. Moreover, McArthur turned aside from his duties with the Cooperative to pursue purely personal interests. When he did so, McArthur ceased to act in the course and scope of his employment.
Bushell and Southwestern Bell Telephone are distinguishable because there was some evidence in those cases that the employee or agent was acting in the course and scope of their employment or agency. Moreover, the agents' actions related to the business of the employer. In Bushell, the defendant's employee used his position as a general manager to retaliate against the plaintiff by becoming more demanding as a supervisor. In Southwestern Bell Telephone, the attorneys committed the tortious conduct while they were furthering the collection efforts of Southwestern Bell. In this case, there was no close relationship between McArthur's actions and the performance of McArthur's duties with the Cooperative. The other cases cited by Kelly are also distinguishable.
Kelly further contends that the Cooperative should still be liable for McArthur's actions even if the actions were outside the course of employment. Kelly argues that McArthur was aided in accomplishing the tort by the existence of the agency relationship. We measure the sufficiency of the evidence against the instructions given to the jury. The jury was not instructed on this issue.
We hold that there was no evidence to support the jury's finding to Question No. 2. Appellant's first and second points of error are overruled.
In her third, fourth, fifth, sixth, and seventh points of error, Kelly defends the issue of damages and the trial court's jurisdiction to consider her claims. Because of our holding in the first and second points of error, we need not address these points of error. See TEX.R.APP.P. 90(a).
In her final point of error, Kelly contends that the trial court erred in allowing the introduction of evidence regarding allegations that Kelly incorrectly entered data relating to her personal electric bill. Kelly argues that specific instances of conduct were used to attack her credibility, which is prohibited by TEX.R.CIV.EVID. 403, 404, and 608.
To obtain reversal of a judgment based on error in the admission or exclusion of evidence, the party seeking review must show that the trial court's ruling was in error and that the error was calculated to cause and probably did cause rendition of an improper judgment. TEX.R.APP.P. 81(b)(1); Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 837 (Tex.App.Houston [1st Dist.] 1987, writ ref'd n.r.e.), cert. dism'd, 485 U.S. 994, 108 S. Ct. 1305, 99 L. Ed. 2d 686 (1988). Because of our holding on the first and second points of error, we hold that, even if the trial court erred in admitting the evidence, such evidence did not cause the rendition of an improper judgment. Appellant's eighth point of error is overruled.
Since all of Kelly's points of error are overruled, we need not address the Cooperative's and Stone's cross-points of error. Rule 90(a).
The judgment of the trial court is affirmed.
McCLOUD, Chief Justice, Retired, Court of Appeals, Eastland, sitting by assignment pursuant to TEX.GOV'T CODE ANN. § 74.003(b) (Vernon 1988).
WRIGHT, J., not participating.
NOTES
[1] Kelly subsequently dismissed her suit against McArthur.
[2] Stone joined in the motion even though the jury answered the only submitted liability question in his favor.
[3] Kelly does not challenge the jury's finding in favor of Stone.
[4] Question No. 2 and the jury's answer read in relevant part:
Question 2: Did Erath County Electric Cooperative (through Stephen McArthur) assault or intentionally inflict severe emotional distress on Charlotte Kelly?
Answer: Yes (Emphasis added). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1706667/ | 270 So. 2d 280 (1972)
Ignatius ANDRUS, Plaintiff-Appellant,
v.
POLICE JURY OF PARISH OF LAFAYETTE, Defendant,
Maryland Casualty Company, Defendant-Appellee,
Highlands Insurance Company, Defendant-Appellant.
No. 4024.
Court of Appeal of Louisiana, Third Circuit.
December 13, 1972.
*281 Koury, Hill & Moss by John K. Hill, Jr., Lafayette, for plaintiff-appellant.
Davidson, Meaux, Onebane & Donohoe by Richard C. Meaux, Lafayette, for defendant-appellant.
Mouton & Mouton by Welton P. Mouton, Sr., Bertrand deBlanc, Dist. Atty., Lafayette, for defendant-appellee.
Before FRUGÉ, HOOD and MILLER, JJ.
MILLER, Judge.
The trial court sustained defendant Maryland Casualty Company's motion for summary judgment based on its policy exclusion. Plaintiff Ignatius Andrus and defendant Highlands Insurance Company appeal contending that the policy exclusion does not apply. We affirm.
Maryland Casualty Company's motion to dismiss the appeals was overruled. Andrus v. Police Jury of Parish of Lafayette, 266 So. 2d 535 (La.App. 3 Cir. 1972).
Plaintiff alleged that his wife and three children were killed in an automobile accident caused by Lafayette Police Jury's negligence in failing to provide signs and safety devices in an area where a parish road ran dangerously close to the Vermilion river.
Maryland Casualty's relevant policy exclusion provides:
"It is agreed that the insurance does not apply to bodily injury or property damage arising out of
(a) the ownership, maintenance or use of the premises designated in this endorsement or of any property located thereon;
(b) operations on such premises or elsewhere which are necessary or incidental to the ownership, maintenance or use of such premises; or
(c) goods or products manufactured at or distributed from such premises.
* * * *
"DESCRIPTION AND LOCATION OF PREMISES:
Any highway, street, sidewalk, road, bridge, or other public way."
Appellants' contention that the exclusion is inapplicable is divided into three categories. First, the exclusion is too ambiguous to include the alleged negligence. Second, the exclusion does not exclude coverage of the alleged negligence. Third, the case of Snell v. Stein, 261 La. 358, 259 So. 2d 876 (1972) effects a change in the jurisprudential rule for policy language construction, and requires a reversal of the trial court judgment.
We reject all three arguments.
*282 The policy exclusions were stated clearly and contained no ambiguity. This court construed a similar exclusion in Foreman v. Maryland Casualty Company, 224 So. 2d 553 (La.App. 3 Cir. 1969), a case involving similar facts. We held then as we do now that the exclusion applied. Clear and unambiguous policy provisions are to be enforced as written. LSA-C.C. Art. 1945; Albritton v. Fireman's Fund Insurance Company, 224 La. 522, 70 So. 2d 111 (1953); Indiana Lumbermens Mutual Insurance Company v. Russell, 243 La. 189, 142 So. 2d 391 (1962); Martin v. Starke, 208 So. 2d 723 (La.App. 3 Cir. 1968).
Appellant's second argument is that the exclusion unambiguously reflects the intent of the parties to cover the alleged acts of negligence. It is inferred from the definitions of each term and the syntax of the terms used, that the parties intended to limit the exclusion to liability for injuries arising out of the ownership, maintenance, and use of the premises only insofar as the roads were to be used by the police jury; that use of the premises by others is not excluded.
Appellants distort the intent of the parties by adverting to hypertechnicalities in definitions and syntax. Their means of construing the policy language conflicts with the guidelines for construction established in the jurisprudence that words in an insurance policy are to be understood according to their common and usual signification, without reference so much to grammatical rules as to general and popular usage. Taylor v. State Farm Mutual Automobile Insurance Company, 248 La. 246, 178 So. 2d 238 (1965); Conner v. Motors Insurance Corporation, 216 So. 2d 555 (La.App. 3 Cir.1968). Rather than to search for hidden subtleties and conjectures, our goal in interpreting policy wording is the ascertainment of the apparent object and plain intent of the parties. Hemel v. State Farm Mutual Automobile Insurance Company, 211 La. 95, 29 So. 2d 483 (1947). The apparent object, the plain intent discernible from the words in the contested policy, given their common and usual usage, is the construction advanced by appellee.
In construing insurance policies, considerations should be given to the fact that the insurer has the right to limit its contracted liability. When this limitation is expressed unambiguously in its coverage exclusions, courts will enforce the provisions as written. West v. City of Ville Platte, 237 So. 2d 730 (La.App. 3 Cir. 1970). It is inappropriate, moreover, for a court construing an insurance policy provision to attach a strained construction to the words used. Thibodeaux v. Parks Equipment Company, 185 So. 2d 232 (La. App. 1 Cir. 1965). In the case at bar, appellants strain the meaning of the words in an effort to turn around the clear intent of the parties. How else than by the use of the premises-hazards method employed, could an insurer collate the vast array of intended exclusions in its comprehensive liability policy issued to a municipality? The risks and hazards are too great in number to list and describe each with the certitude appellants would have us require of the insurer.
It is true that the use of words in the communication of intent is less than perfect, and that some misinterpretation however slight is invariably encountered. These normal shortcomings in communication do not however justify judicial rewriting of insurance policies when there is no real ambiguity. Muse v. Metropolitan Life Insurance Company, 193 La. 605, 192 So. 72, 125 A.L.R. 1075 (1939); J. M. Brown Construction Company v. D & M Mechanical Contractors, Inc., 222 So. 2d 93 (La.App. 1 Cir. 1969). We do not find that Snell v. Stein, 261 La. 358, 259 So. 2d 876 (1972) requires a reversal of this case. Stein is not the panacea to appellants problems in this case. It was distinguished by the Supreme Court in the holding that the exclusion clause in Stein was less encompassing than that of Foreman v. Maryland *283 Casualty Company, 224 So. 2d 553 (La.App. 3 Cir. 1969). See 259 So.2d page 879 for the court's critical distinction.
The exclusion in the case at bar is as broad as that in Foreman. Foreman and Stein are distinguishable in other respects,[1] but the distinction made by the Supreme Court is dispositive of the issue.
The trial court properly sustained the motion for summary judgment on finding that the exclusion deleted coverage for the alleged negligence.
The judgment is affirmed at appellants' costs.
Affirmed.
NOTES
[1] The exclusion in Stein referred to definitions not found in the policy. 259 So. 2d 876 at 878. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1984770/ | 730 F. Supp. 747 (1990)
Theotis Lee HODGE, Jr., Plaintiff,
v.
Billy PRINCE, et al., Defendants.
Civ. A No. CA3-87-2831-D.
United States District Court, N.D. Texas, Dallas Division.
February 16, 1990.
*748 Theotis Lee Hodge, Jr., Huntsville, Tex., pro se.
Thomas P. Brandt, Asst. City Atty., Dallas, Tex., for the City of Dallas, Tex.
FITZWATER, District Judge:
The court is asked to decide whether an indigent prisoner proceeding in forma pauperis in a civil action that does not seek federal habeas relief is entitled to obtain issuance of a subpoena without paying the witness fees required by 28 U.S.C. § 1821. Concluding that no such right arises by statute or pursuant to the constitutional right of access to the courts, the court affirms an order of the U.S. Magistrate declining to issue a subpoena without payment of the fees.
I
On September 15, 1986 Dallas police officers Teddy D. Weeks ("Weeks") and Kevin L. Ross ("Ross") responded to a report of an assault. The report was telephoned to the Dallas Police Department by a woman claiming to be the mother of plaintiff Theotis Lee Hodge ("Hodge"). Upon arriving on the scene, officers Weeks and Ross determined the woman was in fact Hodge's mother. They asked Hodge to step outside, which he did.
Once outside, the officers instructed Hodge to leave the premises or be taken to jail. Hodge refused to depart and was arrested on charges of criminal trespass and transported to jail. Hodge was later charged with criminal retaliation against Weeks. On January 6, 1987 a mistrial was declared in Hodge's trial on the retaliation charge. Following the trial court's refusal to dismiss the indictment, Hodge pleaded nolo contendere to the retaliation charge and was sentenced to two years in prison. Hodge's conviction was affirmed on appeal. Hodge v. State, 756 S.W.2d 353 (Tex.App. 1988, no pet.).
*749 On December 2, 1987 Hodge instituted this pro se action against Weeks, Ross, and Billy Prince ("Prince"), the then City of Dallas Chief of Police. Hodge alleged a variety of constitutional claims, federal statutory violations, and state common law rights of recovery, seeking relief pursuant to 42 U.S.C. § 1983, as well. The U.S. Magistrate granted Hodge leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a).
On November 13, 1989 Hodge moved the court to issue a subpoena duces tecum to the District Clerk of Dallas County, Texas, ordering the District Clerk to appear at a deposition and to produce all trial records, including court reporter's notes, generated in Hodge's state case. Hodge contended the court had the power to do so "pursuant to the Federal Rules of Civil Procedure, including, but not limited to, Rule 40." Hodge alleged that he needs the trial court record "for impeachment purposes" when his lawsuit is tried or for any subsequently filed motion for summary judgment. The court referred Hodge's motion to the magistrate, who denied the relief requested. The magistrate determined that the court lacked authority under 28 U.S.C. § 1915 to waive the payment of the witness fees and that Hodge did not make a sufficient showing to justify the court's issuing the subpoena as a matter of discretion. Hodge now appeals, contending he is entitled to procure the attendance of necessary witnesses without advance payment of fees and travel expenses by virtue of Fed.R. Civ.P. 45(c), 28 U.S.C. § 1915, and the constitutional right of access to the courts recognized in Bounds v. Smith, 430 U.S. 817, 97 S. Ct. 1491, 52 L. Ed. 2d 72 (1977), and other Supreme Court decisions.
II
A
The court begins by noting the standard of review that applies to orders of the magistrate entered in non-dispositive matters. Pursuant to 28 U.S.C. § 636(b)(1)(A), a judge may designate a magistrate to hear and determine, with certain exceptions not pertinent here, any pretrial matter pending before the court. Under our Miscellaneous Order No. 6, Rule 4(b)(2), reprinted in Texas Rules of Court: Federal at 131-32 (West Pamp.1989), no ruling of the magistrate in a matter that the magistrate is empowered to hear and determine shall be reversed, vacated, or modified on appeal unless the district judge shall determine, inter alia, that the magistrate's ruling is clearly erroneous, contrary to law, or constitutes an abuse of discretion.
B
Hodge contends the magistrate's order is contrary to law because Fed.R.Civ.P. 45(c), 28 U.S.C. § 1915(a), and an indigent prisoner's constitutional right of access to the courts entitle him to issue a subpoena to, and to procure the production of records from, a non-party witness without payment of fees. The court first addresses the question whether § 1915(a) confers upon Hodge the right he seeks,[1] since it is a fundamental and long-standing principle of judicial restraint that a court will avoid reaching a constitutional question if it can decide the issue on a statutory ground. Lyng v. Northwest Indian Cemetery Protective Ass'n, 485 U.S. 439, 445, 108 S. Ct. 1319, 1323, 99 L. Ed. 2d 534 (1988); see Edward J. DeBartolo Corp. v. N.L.R.B., 463 U.S. 147, 158, 103 S. Ct. 2926, 2933, 77 L. Ed. 2d 535 (1983) (until statutory question decided, review of constitutional issue is premature).
1
Section 1915(a) empowers the district court to authorize the commencement of a civil action without prepayment of fees *750 or costs by a person unable to pay such costs. Section 1915(c)[2] provides in part that "[w]itnesses shall attend as in other cases, and the same remedies shall be available as are provided by law in other cases." Although the Fifth Circuit has not squarely addressed the question whether § 1915(c) provides a statutory waiver of witness fees,[3] the courts of appeals that have decided the issue have uniformly held that § 1915 does not provide the necessary authority for such a waiver. See McNeil v. Lowney, 831 F.2d 1368, 1373 (7th Cir.1987), cert. denied, 485 U.S. 965, 108 S. Ct. 1236, 99 L. Ed. 2d 435 (1988); United States Marshals Serv. v. Means, 741 F.2d 1053, 1056-1057 (8th Cir.1984) (en banc); Johnson v. Hubbard, 698 F.2d 286, 289-290 (6th Cir.), cert. denied, 464 U.S. 917, 104 S. Ct. 282, 78 L. Ed. 2d 260 (1983). In Means the en banc Eighth Circuit recognized that the plain language of § 1915 provides no basis for the waiver of witness fees and expenses. 741 F.2d at 1056. By examining the legislative history, the court became "convince[d] ... that [§ 1915] neither expressly nor implicitly authorizes the payment of the witness fees and expenses...." Id. at 1057. The Sixth Circuit in Hubbard followed a different path to the same result, reasoning that Congress' failure to amend § 1915 to allow for payment of witness fees in civil cases at the same time it passed 28 U.S.C. § 1825 to allow for payment of such fees in criminal cases precluded a finding that § 1915 authorizes the payment of witness fees in a civil case. 698 F.2d at 290. The Seventh Circuit relied on both cases in concluding a district court has no authority to waive payment of witness fees for an indigent litigant. McNeil, 831 F.2d at 1373.
This court gives § 1915(c) the same plain reading as did the Eighth Circuit in Means, and therefore concludes § 1915(c) does not provide the necessary statutory authority to waive the witness fees required by 28 U.S.C. § 1821(a)(1).[4] Section 1915(c) states only that witnesses shall attend as in other cases; it does not waive the requirement that witness fees be paid by the party who procures the subpoena.
Moreover, the specific government funding provisions delineated in § 1915(b)[5] compel *751 the conclusion that Congress did not intend for § 1915(c) to constitute an additional draw on the public exchequer. See Means, 741 F.2d at 1056. A contrary construction of § 1915(c) would require the court to infer congressional intent that is not apparent from the text, structure, or legislative history of the statute. See id. at 1056; 1057; Hubbard, 698 F.2d at 290. This the court declines to do.
2
Having concluded § 1915(c) does not authorize the district court to waive the witness fees required by 28 U.S.C. § 1821, the court next considers whether an indigent prisoner's inability to obtain a subpoena without paying the required fees violates the Constitution.
It is beyond dispute that a prisoner has a constitutional right of access to the courts. E.g., Bounds v. Smith, 430 U.S. 817, 821, 97 S. Ct. 1491, 1494, 52 L. Ed. 2d 72 (1977); Ex parte Hull, 312 U.S. 546, 549, 61 S. Ct. 640, 641, 85 L. Ed. 1034 (1941); Chambers v. Baltimore & Ohio R.R., 207 U.S. 142, 148, 28 S. Ct. 34, 35, 52 L. Ed. 143 (1907); Crowder v. Sinyard, 884 F.2d 804, 811 (5th Cir.1989). The right springs in part from the Due Process Clauses of the Fifth and Fourteenth Amendments and the right of petition found in the First Amendment. Crowder, 884 F.2d at 811 n. 7; see generally Ryland v. Shapiro, 708 F.2d 967, 971-972 (5th Cir.1983). The right of access is fundamental. Bounds, 430 U.S. at 828, 97 S. Ct. at 1498.
In its most apparent form, the right of access protects one's physical access to the courts. Crowder, 884 F.2d at 811. Thus, prison officials cannot refuse to convey or otherwise block transmission of legal documents that prisoners wish to send to the courts. Id. (citing Ex parte Hull, 312 U.S. at 549, 61 S. Ct. at 641). Prison officials may not deliberately delay mailing legal papers when they know such delay will effectively deny a prisoner access to the courts. Jackson v. Procunier, 789 F.2d 307, 310-312 (5th Cir.1986). They may not deny prisoners access to "adequate law libraries or adequate assistance from persons trained in the law." Bounds, 430 U.S. at 828, 97 S. Ct. at 1498; see Mann v. Smith, 796 F.2d 79, 83 (5th Cir.1986). Nor may prison officials take other actions such as confiscating legal papers that have a similar effect. Crowder, 884 F.2d at 811; Simmons v. Dickhaut, 804 F.2d 182, 184-85 (1st Cir.1986); Sigafus v. Brown, 416 F.2d 105, 107 (7th Cir.1969).
Hodge contends the constitutional right of access "includes the right to present evidence through necessary witnesses to prove an inmate[']s case, especially case arising under Sec. 1983 ..." and, therefore, the Constitution requires waiver of the payment of witness fees for indigent prisoners involved in civil litigation. The court disagrees.
There is a recognized distinction between actual access to the courts and procedures essential to the trial process. See Hubbard, 698 F.2d at 288. While it is clearly impermissible to obstruct a prisoner's physical access to the courts, or to take actions that effectively deny court access, it is not constitutionally repugnant to require an indigent civil litigant to comply with rules necessary to facilitate the functioning of the justice system. Thus, requiring compliance with procedures that make the trial process possible such as payment of transcript costs, expert witness fees, and fees to secure depositions presents no constitutional infirmity. See id. at 289; McNeil, 831 F.2d at 1373.
The Constitution has been interpreted to mandate that an indigent prisoner have physical access to the courts and an opportunity to present his claims. Hodge possesses that right in the present case, and is not barred from access solely because the court declines to waive the payment of witness fees. Moreover, to expand the right of access in the manner Hodge suggests would arguably confer a panoply of heretofore unrecognized rights upon all indigent civil litigants, not merely upon prisoners. Drawing upon the principle that "access" encompasses the right to the *752 same litigation tools enjoyed by pecunious litigants, indigent civil plaintiffs could claim entitlement even to appointed counsel. The court declines to discover a right that is not fairly discernible from the Constitution.
III
The court concludes neither 28 U.S.C. § 1915(c) nor the constitutional right of access to the courts entitles Hodge to procure issuance of the subpoena in question without paying the required fees. Thus, the magistrate's order denying Hodge's motion for a subpoena duces tecum neither amounted to an abuse of discretion nor was contrary to law and is, accordingly,
AFFIRMED.
APPENDIX
ORDER
Pursuant to the District Court's order of reference filed on November 14, 1989, came on to be considered Plaintiff's Motion for the Court to Issue Subpoena Duces Tecum filed on November 13, 1989, and the court finds and orders as follows:
Plaintiff seeks an order issuing a subpoena duces tecum on the District Clerk of Dallas County, Texas, requiring him to appear and produce the trial records from Plaintiff's criminal trial in State of Texas v. Theotis Lee Hodge, No. F-86-92387-H, i.e. the transcripts and statements of facts. Hodge was previously granted leave to proceed in this action in forma pauperis pursuant to 28 U.S.C. § 1915(a). An examination of the docket sheet reflects that no trial setting has been made.
In my opinion the same should be denied because the court is without authority to waive the payment of a witness fee under § 1915, and alternatively Plaintiff has not made the requisite showing to require the court, in its discretion, to issue the subpoena without Plaintiff's tendering of the witness fee.
Of the several circuits which have squarely addressed the issue of whether a civil plaintiff proceeding in forma pauperis is entitled to have subpoenas issued without prepayment of the witness fee, the courts have uniformly held that no statutory authority exists permitting a court to issue subpoenas, at government expense, on request by an indigent plaintiff. Johnson v. Hubbard, 698 F.2d 286, 289-90 (6th Cir.), cert. den. [464 U.S. 917] 104 S. Ct. 282[, 78 L. Ed. 2d 260] (1983); United States Marshals Service v. Means, 741 F.2d 1053 (en banc) (8th Cir.1984); McNeil v. Lowney, 831 F.2d 1368 (7th Cir.1987), cert. den. [485 U.S. 965] 108 S. Ct. 1236[, 99 L. Ed. 2d 435] (1988).
The Fifth Circuit has never directly addressed a federal court's authority to issue subpoenas on behalf of an indigent plaintiff at government's expense, but has examined the decision of a district court under an abuse of discretion standard. E.g. Gibbs v. King, 779 F.2d 1040, 1046-47 (5th Cir.) cert. den. 476 U.S. 1117, 106 S. Ct. 1975 [90 L. Ed. 2d 659] (1986), citing its earlier decision in Estep v. United States, 251 F.2d 579, 582 (5th Cir.1958); see also Lloyd v. McKendree, 749 F.2d 705, 706-707 (11th Cir.1985).
Hodge seeks copies of his trial records from the state criminal proceedings for his use in responding to any motion for summary judgment and for use at trial to impeach Defendants Weeks and Ross, based upon his representation that each was called as a witness in the first trial in No. F-86-92387-H.
Since Plaintiff is complaining of conduct toward him personally, it is clear that he is competent to respond to any motion for summary judgment which might be filed in this action, and he does not need to resort to his prior trial record to show that genuine issues of fact exist. While he argues that these Defendants prior testimony might be helpful for impeachment purposes, he has identified no aspect of their prior testimony which is inconsistent with their presently asserted positions. Moreover, there is no showing that these Defendants will not be present at trial at which he can fully explore in his examination any prior inconsistent statements which he claims they may have made. In short, Hodge has failed to show any compelling *753 need for the entire trial proceedings, assuming a statement of facts was presented.[1]
IT IS, THEREFORE, ORDERED that Plaintiff's motion for issuance of subpoena is denied.
A copy of this order shall be transmitted to Plaintiff and counsel for Defendants.
ENTERED this 16th day of November, 1989.
/s/ Wm. F. Sanderson
UNITED STATES MAGISTRATE
NOTES
[1] The court need not address Fed.R.Civ.P. 45(c). The only portion of the Rule that concerns non-payment of fees and mileage pertains to subpoenas issued on behalf of the United States or an officer or agency thereof. Plaintiff does not qualify as an officer under this proviso and any subpoena obtained by him would not be issued on behalf of the United States or an agency thereof. Under Fed.R.Civ.P. 45(c), service of a subpoena in a civil case must include the tendering of witness fees unless the subpoena is issued on behalf of the United States. Lloyd v. H.S. McKendree, 749 F.2d 705, 706 (11th Cir. 1985).
[2] 28 U.S.C. § 1915(c):
The officers of the court shall issue and serve all process, and perform all duties in such cases. Witnesses shall attend as in other cases, and the same remedies shall be available as are provided for by law in other cases.
[3] The Fifth Circuit has suggested that district courts have the implied or inherent power to subpoena witnesses for an indigent civil litigant, Estep v. United States, 251 F.2d 579, 582 (5th Cir.1958), but has held that the district court's exercise of this power is discretionary. Gibbs v. King, 779 F.2d 1040, 1047 (5th Cir.), cert. denied, 476 U.S. 1117, 106 S. Ct. 1975, 90 L. Ed. 2d 659 (1986); Estep, 251 F.2d at 582. To the extent Hodge contends the court should exercise its discretionary power to grant the relief he requests, the court finds no abuse of discretion in the decision of the magistrate. See infra 730 F.Supp. at 752, where the magistrate's order is set forth as an appendix to this opinion. The magistrate declined to permit Hodge to obtain his state court records without paying the required fees, finding that Hodge was competent to respond to any summary judgment motion since he is complaining of conduct toward him personally, id., because he has failed to identify any aspect of the state court testimony which is inconsistent with a defendant's present position, id., and since plaintiff has not shown he cannot fully explore any prior inconsistent statements by way of trial cross-examination, id. The magistrate acted well within his discretion in declining to grant relief for the reasons stated in his order.
[4] 28 U.S.C. § 1821(a)(1):
Except as otherwise provided by law, a witness in attendance at any court of the United States, or before a United States Magistrate, or before any person authorized to take his deposition pursuant to any rule or order of a court of the United States, shall be paid the fees and allowances provided by this section.
[5] 28 U.S.C. § 1915(b):
Upon the filing of an affidavit in accordance with subsection (9) of this section, the court may direct payment by the United States of the expenses of (1) printing the record on appeal in any civil or criminal case, if such printing is required by the appellate court; (2) preparing a transcript of proceedings before a United States magistrate in any civil or criminal case, if such transcript is required by the district court, in the case of proceedings conducted under Section 636(b) of this title or under Section 3401(b) of title 18, United States Code; and (3) printing the record on appeal if such printing is required by the appellate court, in the case of proceedings conducted pursuant to Section 636(c) of this title. Such expenses shall be paid when authorized by the Director of the Administrative Office of the United States Courts.
[1] Hodge's first criminal trial concluded with a mistrial being granted. His appeal was predicated on his conviction which was entered pursuant to a plea bargain in which he entered a plea of nolo contendere. See Hodge v. State of Texas, 756 S.W.2d 353 (Tx.App. Dallas, 1988). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2087226/ | 620 N.E.2d 691 (1993)
In the matter of Emil J. Becker, Jr.
No. 82S00-9204-DI-237.
Supreme Court of Indiana.
September 14, 1993.
*692 James G. McDonald, Princeton, for Becker.
Donald R. Lundberg, Executive Secretary, Indianapolis, for Ind. Sup. Disciplinary Comn'.
DISCIPLINARY ACTION
PER CURIAM.
The Respondent, Emil J. Becker, Jr., was charged in a one-count complaint for disciplinary action with violating Rules 1.1, 3.1, 8.2(a), and 8.4(d) of the Rules of Professional Conduct for Attorneys at Law. Thereafter, the Respondent and the Disciplinary Commission tendered for this Court's approval a "Statement of Circumstances and Conditional Agreement for Discipline" pursuant to Admission and Discipline Rule 23, Section 11(d). After careful review, we find that the agreement should be accepted and approved. All of the charges at issue stem from Respondent's representation of clients in an adoption proceeding.
Adopting the facts agreed by the parties, we find that Respondent represented clients S.T. and C.T. in connection with an adoption petition filed in Vanderburgh Superior Court, Probate Division. The Honorable Robert Lensing presided. The child who was the subject of the Respondent's petition was also the subject of a petition for adoption filed by another party who had custody of the child.
On August 28, 1990, the court held hearings on the competing adoption petitions. During the hearing on S.T. and C.T.'s petition, a tape recorder used to record the proceeding was turned off just prior to a recess. Upon reconvening and after the testimony of a witness, those participating in the hearing discovered that the tape recorder was not reactivated following the recess. Judge Lensing offered both the Respondent and opposing counsel the opportunity to recall the witness, but neither party accepted this invitation. The court reporter later prepared a transcript of the witness's unrecorded testimony from notes she had taken during the testimony.
The court denied S.T. and C.T.'s petition. On December 20, 1990, Respondent filed an appellate brief in the Indiana Court of Appeals, case number 82A01-9012-CV-00527, in which Respondent accused Judge Lensing of various acts of misconduct. In regard to the taping incident, Respondent stated the following in his brief:
The Court also CONTROLLED the recording of the trial and caused the recording to be turned off during some of the most important testimony, which testimony could have been the most beneficial to the Appellants. The Court then claimed that this interruption of the taping was "inadvertent" but no real attempt was made to correct the damage.
.....
The worst part of this case occurred when the judge totally trampled on the rights of the Appellants by controlling the recording of the trial. The judge had the recording equipment under his desk in the court room where he could reach down and turn the recording off and on without anyone knowing and at anytime he desired. When the examination of [the witness] showed her obvious conflict and obvious breach of that confidentiality to her clients it appears that the judge became worried.
Brief of Appellant at pp. 4 and 9.
In his brief, Respondent further characterized the taping incident as follows:
Although the judge left the recording equipment off during the entire testimony of [the witness], he then tried to advise the parties that his inadvertence had caused the break in the recording and he offered to recall the witness. The attorney for the Appellants indicated that it would not be necessary because the *693 damage had already been done and the [witness] had already heard the questions and could not contemplate and rehearse her answers more efficiently. The Court indicated at the time of the Praecipe that the reporter should build a transcript from her shorthand notes, but it is quite obvious when reading the record of this case that her notes are painfully inadequate when viewed against a transcription of a recording tape.
Brief of Appellant at pp. 9-10 (Emphasis ours).[1]
The hearing on the competing petitions had been postponed several times. Respondent asserted in his brief that Judge Lensing granted continuances and delayed the hearing so as to extend the amount of time the child was in custody of the other party in order to use length of custody as a factor in granting the adoption to the other party. Specifically, Respondent's brief stated:
The Court allowed continuances which created a time for custody of this child and the Court eventually used that period of time as one of the reason [sic] for allowing the child to be adopted by [the competing party].
Brief of Appellant at pp. 7-8.
Respondent's brief included no citation to statutory, constitutional, or case authority in support of its arguments. The statement of facts contained therein was conclusory and argumentative and included no references to supporting authority from the record of proceedings. The statement of the case contained in the brief failed to set out the course of the proceedings and failed to include a verbatim statement of the judgment below.
Respondent's allegations of judicial misconduct received widespread publicity as a result of the publication of portions of his brief in a local Evansville newspaper on March 18, 1991.
Because of the allegations contained in Respondent's brief, the Court of Appeals issued an order on July 16, 1991 ordering that the appeal of Respondent's clients be dismissed and that a cross appeal by Appellee for attorney's fees be granted on the basis of appellant's bad faith appeal. The trial court ordered Respondent to pay $2,150.00 to the Vanderburgh County Department of Public Welfare to cover fees it incurred in defending the appeal. After the sanction, a local newspaper quoted Respondent as saying, "It is a real reality refresher ... You just don't ask one judge to call another judge wrong."
By reason of the above conduct, this Court now finds that the Respondent, by making statements that he knew to be false or with reckless disregard as to their truth or falsity concerning the integrity or qualifications of a judge, violated Prof. Cond.R. 8.2(a). Further, Respondent violated Prof.Cond.R. 3.1 by asserting issues on appeal without a non-frivolous basis for doing so. Respondent failed to provide competent representation to his clients by submitting his defective brief and therefore violated Prof.Cond.R. 1.1. Finally, we find the general tenor of Respondent's above conduct prejudicial to the administration of justice and as such in violation of Prof. Cond.R. 8.4(d).
The parties have agreed that a thirty (30) day suspension from the practice of law is an appropriate sanction under the circumstances presented in this case. Although generally this Court looks at such factors as state of mind, harm, duty, and factors in aggravation and mitigation when assessing the appropriateness of discipline,[2] the agreed facts presented to us by the parties do not contain sufficient information for a detailed examination of these traditional factors. Nonetheless, Respondent's very *694 acts, standing alone, persuade us that the untruthful statements in his appellate brief and his unfounded attack on a trial court are reprehensible and must be sanctioned. While these facts do not approach judicial misconduct, when an attorney is confronted with what appears to be judicial misconduct, the appropriate avenue is the judicial disciplinary process available through the Indiana Commission on Judicial Qualifications. We also note that this is not the first time that Respondent has been disciplined by this Court. Matter of Becker, Jr. (1989), Ind., 535 N.E.2d 1163 (public reprimand pursuant to conditional agreement). Considering the facts before us, the Commission's assessment of a sanction, and their agreement to the proposed 30 day suspension, we are satisfied that the agreed sanction is consistent with our general assessment of the discipline in a case of this nature.
It is therefore ordered that, by reason of the misconduct found in this case, the Respondent, Emil J. Becker, Jr., is hereby suspended from the practice of law in the state of Indiana for a period of thirty (30) days beginning October 14, 1993, after which Respondent may be automatically reinstated. In addition, Respondent is ordered to attend the next available seminar in appellate practice offered in the state of Indiana by a certified continuing legal education provider, and upon completion of the same, Respondent shall show proof of attendance to the Executive Secretary of the Disciplinary Commission.
Costs of this proceeding are assessed against the Respondent.
DICKSON, J., dissents, believing that the sanction is grossly inadequate.
NOTES
[1] The transcript of the exchange between Respondent and Judge Lensing immediately after the taping error was discovered indicates the following response by Respondent after Judge Lensing invited Respondent to recall the witness:
"I think we got most of it, Your Honor, I don't think that's necessary at all." Addendum to Transcript of Evidence and Proceedings, August 28, 1990.
[2] Matter of Cawley, Jr. (1992), Ind., 602 N.E.2d 1022. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2455118/ | 429 S.W.2d 468 (1968)
Nicholas GARCIA, Jr., Appellant,
v.
The STATE of Texas, Appellee.
No. 41257.
Court of Criminal Appeals of Texas.
May 22, 1968.
Rehearing Denied July 17, 1968.
Hernandez, Cazorla & Ramirez (on appeal only), by Florentino Ramirez, Jr., Dallas, for appellant.
Henry Wade, Dist. Atty., John Stauffer, Douglas Mulder, Malcolm Dade and Wilson Johnston, Asst. Attys. Gen., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State.
OPINION
BELCHER, Judge.
The conviction is for felony theft of an automobile with a prior conviction of a non-capital felony alleged for enhancement; the punishment, ten years.
Error is urged on the ground that Criminal District Court No. 5 of Dallas County did not have jurisdiction to try the present Cause No. C-67-1739-IL.
*469 The statute creating Criminal District Court No. 5 of Dallas County conferred upon it concurrent jurisdiction with all the existing Criminal District Courts of Dallas County, one of which was Criminal District Court No. 2. Art. 1926-15, Vernon's Ann. Civ. St.
To support his position, the appellant contends that no indictment having been returned into Criminal District Court No. 5 of Dallas County in Cause No. C-67-1739-IL, and no other court having transferred this cause to Criminal District Court No. 5, his conviction in said court under this styled and numbered cause is void for want of jurisdiction.
The transcript reflects that on April 24, 1967, an indictment was presented by the grand jury into Criminal District Court No. 2 of Dallas County charging Nicholas Garcia, Jr., with felony theft in Cause No. C-67-1739-I. On the same date, the same court transferred Cause No. C-67-1739-I to Criminal District Court No. 5 of Dallas County. On the same date, an order receiving Cause No. C-67-1739-IL, styled The State of Texas vs. Nicholas Garcia, Jr., by Criminal District Court No. 5 of Dallas County from Criminal District Court No. 2 of Dallas County, charging the offense of felony theft, was entered in the minutes.
The jurisdiction of Criminal District Court No. 2 of Dallas County of Cause No. C-67-1739-I, charging Nicholas Garcia, Jr., with felony theft is not questioned. No attack is made on the sufficiency of the order transferring No. C-67-1739-I in Criminal District Court No. 2 to Criminal District Court No. 5 in Dallas County.
The receiving order of Court No. 5 of the cause transferred from Court No. 2 recites all the facts identifying it, and then adds the letter "L" as shown in the order, to-wit, No. C-67-1739-IL.
The transfer order from Court No. 2 to Court No. 5 was valid, and when the cause was entered on the docket of Court No. 5 it had like jurisdiction therein as in cases originally filed in said court. Art. 1926-15, supra. The adding of the letter "L" in Court No. 5 as it now appears on the indictment did not deprive it of its jurisdiction. This ground of error is overruled.
The failure of the court to submit his requested charge that "One of the elements of theft of a motor vehicle is an intent to permanently deprive the owner of such vehicle without the owner's consent." is urged as a ground of error.
In the charge to the jury, the court defined fraudulent taking and then required the jury to find beyond a reasonable doubt that appellant fraudulently took the automobile from the owner, without his consent, and with the intent to deprive him of it and to appropriate it to his own use and benefit before they could find him guilty, or, if they had a reasonable doubt thereof to find him not guilty. The charge as given sufficiently included the element of theft as requested. The ground of error is overruled.
The appellant contends that he was denied a fair and impartial trial and representation by adequate counsel in the trial court which constituted a denial of due process of law as a ground of error.
To support his contention, the appellant submits that he was dressed in a white jail uniform during a brief trial, and that without objection, leading questions were asked by the prosecution; that while he was testifying his counsel brought out that he was then on parole; that his counsel made a vain attempt to make out a defense of insanity, and no showing was made by defense counsel to obtain such testimony; that his counsel attempted to prove that he did not remember taking the automobile, and that he had no intent to permanently deprive the owner of it.
The testimony of the state reveals that about 2:15 a. m., two police officers saw an automobile without license plates being *470 driven along a public street in Dallas; that the appellant was driving the car and was accompanied by a female passenger, and he was intoxicated to a minor degree, but his speech was not slurred; and that the automobile had been stolen that night from a sales lot in Dallas.
While testifying, the appellant stated that he did not remember taking the car, did not know how he came in possession of it, and that he never intended to take the car "as a permanent thing."
The only testimony referring to appellant's attire was:
"Q Had you given permission, anybody permission to remove that 1967 LTD from that lot?
"A None whatever, no.
"Q I'll ask you to look at the man in the white coveralls seated the fourth man at the table and ask you if you know him.
"A I've never seen him before.
* * * * * *
"Q All right, would you recognize the driver of that vehicle were you to see him again?
"A Yes, sir, I would.
"Q All right. I'll ask you to look around the Courtroom and tell the Jury whether or not you see that man in this Courtroom.
"A Yes, sir, I do.
"Q All right, would you point him out, please, sir?
"A This is him here (indicating).
"State's Attorney: Mr. Reporter, will you let the record reflect
"Q Excuse me, Officer, are you indicating the last man at the table?
"A Yes, sir, I am, the white overalls."
The appellant testified on direct examination pertaining to his previous criminal record as follows:
"Q Now, then, you have beenyou have had previous felony convictions, have you not?
"A Yes, sir, I have.
* * * * * *
"Q No, how many previous convictions have you had?
"A Two, sir.
* * * * * *
"Q You're on probation on parole at this time, is that right?
"A Yes, sir.
* * * * * *
"Q Now, does a parole officer help parolees help get them adjusted?
"A Yes, sir.
"Q Have you made any kind of a request to the parole officer for unusual items to help you get adjusted?
"A Yes, sir, I have. I went up to him one time and asked him if he could help me to get psychiatric treatment, because I just couldn't seem to adjust to things.
"Q What was your main problem?
"A Well, drinking, and emotional problems ever since I have been divorced from my ex-wife. I just haven't been the same any more. I more or less have lost self confidence in myself.
"Q Nicholas, would you state the facts with reference to whether or not you intended to take this automobile as a permanent thing?
"A No, sir.
"Appellant's Attorney: Pass the witness."
*471 CROSS EXAMINATION
BY STATE'S ATTORNEY:
"Q Now, Garcia, you were convicted in Cause No. F-1145-HI on June 18th, 1965, in Judge Henry King's Court for the offense of burglary, isn't that right?
"A Yes, sir.
"Q At that time Judge King saw fit to grant you probation and release you and give you a second chance, didn't he?
"A Yes, sir.
"Q And then on September the 24th of 1965 you in Cause No. F-1972-JI, you were convicted of burglary in Judge Henry King's Court, and he revoked your probation and sent you on down to the penitentiary on both cases, didn't he?
"A Yes, sir.
"Q And on the second case he gave you a three-year term, is that right?
"A Yes, sir.
"Q And, of course, your short stay down there, you weren't able to get adjusted, were you? You didn't spend enough time down there to get adjusted, did you?
"A I don't know how to answer that, sir.
"Q Well, you said you had a drinking problem; you didn't whip your drinking problem down there at the penitentiary, did you, on the time that you spent down there?
"A No, sir."
Upon the appellant testifying, the prior convictions became admissible if the state wanted to ask him about them. To avoid the impact of such testimony on the jury, it is thought by some trial counsel at times to bring it out first instead of allowing the state to do so. This may have been the strategy in this case.
The appellant testified, as shown herein, that his main problem was drinking, emotional problems since divorce, and loss of self-confidence. These conditions fail to raise the issue of insanity.
No injury is perceived by the reference in the testimony set out herein to the appellant as the man in the white coveralls.
The record fails to reflect the legal background, the experience of appellant's court-appointed counsel in the trial court, and the nature and extent of preparation for trial.
From the record as a whole, it is concluded that appellant was not denied a fair and impartial trial and adequate representation by counsel.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2307620/ | 71 N.J. Super. 506 (1962)
177 A.2d 312
STATE OF NEW JERSEY, PLAINTIFF,
v.
SYLVESTER JOHNSON, STANLEY CASSIDY AND WAYNE GODFREY, DEFENDANTS.
Superior Court of New Jersey, Law Division.
Decided January 16, 1962.
*507 Mr. Norman Heine, Camden County Prosecutor, attorney for the plaintiff.
Mr. M. Gene Haeberle, attorney for the defendants.
MARTINO, J.C.C. (temporarily assigned).
The defendants were convicted of first degree murder without recommendation. They were charged with the crime which is referred to juridically as a felony murder. The verdict was rendered on January 24, 1959. A notice of appeal was filed on March 11, 1959 in behalf of the defendants and the New Jersey Supreme Court affirmed the convictions. State v. Johnson, 31 N.J. 489 (1960). New counsel was obtained by the defendants shortly before their scheduled execution, and on May 24 and May 25, 1960 hearings were held on an application for a new trial. This application was denied. State v. Johnson, 63 N.J. Super. 16 (Law Div. 1960). An appeal was taken to the New Jersey Supreme Court from this denial and the decision of the trial court was affirmed. State v. Johnson, 34 N.J. 212 (1961). An appeal was taken to the United States Supreme Court and while the appeal was pending in that *508 court the present attorney was substituted for the defendants. Immediately thereafter the present attorney began the task of gathering background information concerning these three defendants because he construed a statement in the last decision of our Supreme Court as an invitation to proceed in this manner to secure a new trial. In the very last paragraph of that opinion, commencing with the sentence on the last line of page 231 the court said:
"Since there is no indication in the record of the hearing on defendants' motion for a new trial of what background evidence they would introduce, and since their counsel's statement to us was uninformative, the defendants are not entitled to a new trial on this ground."
Parenthetically it should be stated here that the United States Supreme Court in a per curiam opinion dismissed the appeal before that court for want of a substantial federal question. Johnson v. New Jersey, 368 U.S. 145, 82 Sup. Ct. 247 (1961).
The present application was preceded by orders granted by this court without objection by the prosecutor for the right to obtain and permit psychiatric examination of all three defendants, as well as an examination of the records of these defendants contained in the files of the State Prison in Trenton, New Jersey. As a part of this motion there were attached 24 affidavits subscribed to by kin, friends and former fellow employees of each of the defendants, all of which affidavits follow similar patterns by indicating that the environment surrounding their home life was deteriorating and that such evidence if produced before a jury would incline to lead to a verdict with a recommendation of life imprisonment. Significantly, there is no denial of the commission of the crime itself in any affidavit filed.
A psychiatric report prepared by one Dr. Richard G. Lonsdorf was examined and it can be observed that the voluntary use of drugs admitted by these defendants plays *509 an important part in the conclusions therein. This is to be expected, but should it be an excuse, particularly where this fact is deliberately withheld from a jury's consideration at the time of trial?
The defendants by this motion seek relief from the judgment and sentence of death heretofore entered in the matter in that the judgment entered should be set aside and a new trial granted for all of these defendants. The defendants rely specifically on R.R. 4:62-2(e)(f): "(e) * * * it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief from the operation of a judgment or order." (Emphasis added) (Although not referred to, see R.R. 3:7-11.) A motion of this type is addressed to the sound judicial discretion of the trial court. However, such judicial discretion cannot be arbitrary, vague or fanciful but rather must be governed by and in accord with established principles of law. Concisely, it is concerned with the question whether justice requires that relief be given under the particular facts established. State v. Bunk, 4 N.J. 482 (1950); State v. Then, 114 N.J.L. 413 (Sup. Ct. 1935); State v. Hogan, 1 N.J. 375 (1949); State v. Collins, 2 N.J. 405 (1949).
On June 17, 1959 State v. Mount, 30 N.J. 195, was decided by the Supreme Court, and although that case was reversed because of prejudicial error allegedly made by the trial court in the selection of the jury, the court referred to the fact that since the defendant had raised the issue as to the trial court's exclusion of the general background testimony offered on his behalf and this would undoubtedly be presented at the new trial, the court decided to deal with this question and as a result re-examined the decision of State v. Wise, 19 N.J. 59 (1955), and concluded that if the punishment is at all to fit the offender as well as the crime, a defendant is entitled to have at least the evidence of general background before a jury.
*510 In dealing with the present application it must be remembered that in State v. Mount, supra, the trial court had rejected offered evidence with reference to past life and antecedent background as irrelevant to the issue of guilt or innocence, and ruled that under settled authority this evidence is properly excluded from the jury's deliberation in determining whether or not to recommend life imprisonment. State v. Wise, supra. The present application seeks a new trial but only on a basis that a right exists on the part of a defendant to introduce evidence of past life and antecedent background. It is not alleged that such an attempt to introduce such testimony was frustrated by the trial court. The present counsel in his memorandum refers to trial counsel as "able and competent." These able and competent counsel saw fit not to permit their clients to take the witness stand. The Supreme Court felt that trial counsels' decision not to put the defendants on the witness stand or introduce evidence in their behalf "was motivated largely by the belief that the criminal records of two of them and their use of narcotics would adversely affect the assessment of punishment." State v. Johnson, supra, 34 N.J., at page 231. If the defendants had taken the witness stand and no questions were asked concerning their past lives and antecedent backgrounds, it could be inferred that these questions were not asked because of counsels' acquaintance with Wise, supra. However, the record indicates that the principal and possibly the sole reason they did not take the stand was given in the Supreme Court opinion.
While the present attorney feels that evidence of the background as he has accumulated same at this late date might save the defendants from the extreme punishment, the trial attorneys concluded during the actual trial that to keep the background of the defendants from the jury would probably result in "life not electrocution." 63 N.J. Super. 16, 36 (Law Div. 1960).
*511 "* * * [A]lmost any judge or lawyer can point to potential mistakes in reviewing the record of a lost cause; and that even trial counsel, having lost, can almost invariably enumerate what in the hindsight of disaster appear to have been errors. * * * Trial counsel must make many decisions of an almost infinite variety in the course of a criminal trial: whether to advise a plea to a lesser offense; whether to object; whether to offer a witness of possibly doubtful credibility or with a criminal record; whether to risk crystallizing the view of the judge at that point by a motion for directed verdict before the defense testimony is in; whether to advise the defendant to take the stand and subject himself to cross examination; how to argue the case to the jury; whether to advise the defendant not to go to trial at all but rather to rely upon the mercy of the court. All these and more are practical questions and very real questions. Bad judgment, or even good but erroneous judgment, may result in adverse effects. These are simple facts of trial; they are not justiciable issues." (Emphasis added) Mitchell v. United States, 104 U.S. App. D.C. 57, 259 F.2d 787, at pp. 791-792 (1958), cert. denied 358 U.S. 850, 79 S.Ct. 81, 3 L.Ed.2d 86 (1958).
This application lacks merit and will, therefore, be denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2466257/ | 773 S.W.2d 322 (1989)
Dorsey Lee JOHNSON, Jr., Appellant,
v.
The STATE of Texas, Appellee.
No. 69750.
Court of Criminal Appeals of Texas, En Banc.
June 21, 1989.
*323 Frank W. Conard, II, Sweetwater, for appellant.
Ernie B. Armstrong, Dist. Atty., Snyder, Robert Huttash, State's Atty., Austin, for the State.
Before the court en banc.
OPINION
McCORMICK, Presiding Judge.
This is a direct appeal from a conviction of capital murder. V.T.C.A., Penal Code, Section 19.03(a)(2). Appellant was convicted of intentionally causing the death of Jack Huddleston in the course of committing and attempting to commit the offense of robbery. Upon finding appellant guilty of capital murder, the jury affirmatively *324 answered the special issues under Article 37.071(b)(1) and (2), V.A.C.C.P. Punishment was then assessed at death. We will affirm.
Appellant alleges seven points of error which we will address in the order in which they arose at trial. Appellant does not assert any sufficiency challenges, therefore, recitation of the facts is not required. We do, however, find a brief synopsis of the events which occurred in March 1986, appropriate.
In the early morning hours of Sunday, March 23, 1986, appellant and his accomplice, Amanda Miles, decided to commit a robbery at the Allsup's convenience store in Snyder. After planning the crime, deciding that there should be no witnesses, and waiting for the store to clear of customers, the pair entered the store. On the pretext of wanting a particular item, appellant lured Huddleston, the clerk, back to the cooler where he was told this was a robbery and to lie face down on the floor. Appellant then shot the clerk in the back of the neck with a .25 caliber pistol, killing him. Amanda Miles emptied out the cash drawer taking approximately $160.00 (one hundred sixty dollars). Two cartons of cigarettes were also taken.
Appellant was arrested in April for a subsequent robbery and attempted murder of a store clerk in the neighboring town of Colorado City. It was in the course of investigating this latter offense that appellant confessed to the capital offense committed in Snyder.
In his seventh point of error, appellant alleges that the trial court erred in failing to grant his motion for change of venue. Appellant asserts that the pretrial publicity of his case prevented him from receiving a fair trial, the result of which denied him the right to equal protection and due process. See Article 31.03, V.A.C.C.P.
When a motion for change of venue has been denied the standard of review to be applied by appellate courts is whether after review of the record the evidence reflects the trial court abused its discretion in refusing the motion. Phillips v. State, 701 S.W.2d 875 (Tex.Cr.App.1985) cert. denied 477 U.S. 909, 106 S. Ct. 3285, 91 L. Ed. 2d 574 (1986). This abuse of discretion must be determined in light of whether outside influences affecting the community climate concerning a particular defendant were inherently suspect. Sheppard v. Maxwell, 384 U.S. 333, 86 S. Ct. 1507, 16 L. Ed. 2d 600 (1966); Phillips, 701 S.W.2d at 879.
Merely because a case is publicized is not, in and of itself, a sufficient reason to change venuea venire need not be completely ignorant of the facts and circumstances which surround a particular case. Murphy v. Florida, 421 U.S. 794, 95 S. Ct. 2031, 44 L. Ed. 2d 589 (1975); Eckert v. State, 623 S.W.2d 359 (Tex.Cr.App.1981) (overruled on other grounds by Reed v. State, 744 S.W.2d 112 (Tex.Cr.App.1988)). A further factor to be considered is the passage of time. Where a period of time has passed between the publicity complained of and the time of trial, such delays tend to negate the inference that publicity would affect the climate of opinion in a community. Nethery v. State, 692 S.W.2d 686 (Tex.Cr.App.1985) cert. denied, 474 U.S. 1110, 106 S. Ct. 897, 88 L. Ed. 2d 931 (1986); Adami v. State, 524 S.W.2d 693 (Tex.Cr. App.1975).
Therefore, where the evidence is not sufficient to show that in the community there existed a pervasive feeling that the ability of the movant to receive a fair trial by an impartial jury was doubtful, then the decision rendered by the trial court to deny such a motion will not be disturbed on appeal. Beets v. State, 767 S.W.2d 711, 742 (Tex.Cr.App.1988).
In October, 1986, a hearing was held on appellant's motion for change of venue. Accompanying appellant's motion were ten affidavits from residents of Scurry County. In each affidavit, the affiant swore that in their opinion appellant could not receive a fair trial in the community. However at the hearing, the seven compurgators which appeared testified on cross-examination, that they had changed their minds and now thought appellant could receive a fair trial. In additional support of *325 his motion, and aside from the affidavits attached thereto, appellant introduced into evidence, through several representatives of the local media, news articles printed in newspapers and heard on the radio in Scurry County. The coverage consisted of some 14 to 16 articles of various sizes covering a variety of topics from the actual murder at the time it occurred to a suppression hearing held shortly before the change of venue hearing and selection of the jury.
The State pointed out through cross-examination of these witnesses that the reporting of the case was fair, non-inflammatory and for the purpose of informing the public of a current event. These witnesses also testified that they believed appellant could receive a fair trial.
The State brought forth seven witnesses from various areas of the county who testified that they had not heard any or at least had heard only very little discussion about the case since its occurrence in March. The media coverage had little effect on them or on any of the people they knew. Additionally, these witnesses testified that it was their opinion that appellant could receive a fair and impartial trial from a jury made up of Scurry County residents. At the close of evidence and final statements the trial court denied appellant's motion for change of venue.
In reviewing the testimony adduced at the hearing we find that the evidence supports the decision made by the trial court. The record reflects that the type and fashion of reporting was not of the requisite character as to create a suspect environment which would prevent the rendering of a fair trial, thereby depriving appellant of equal protection and due process of law.
Here it was not demonstrated that the publicity was anything other than an accurate reporting of an unusual occurrence in Scurry County. There was no evidence of any prejudicial or inflammatory remarks made in any of the articles. Additionally, the publicity complained of herein took place over the course of more than six months since the murder and nearly six months since appellant's arrest.
Therefore, the trial court did not abuse its discretion in denying the motion for change of venue. As a result, appellant's seventh point of error is overruled.
Appellant, in his second point of error, alleges that the trial court committed error in denying his challenge for cause of veniremember Nachlinger. Appellant asserts that Nachlinger had already formed a conclusion as to appellant's guilt. See Article 35.16(a)(10), V.A.C.C.P.
In making a determination as to the propriety of rulings on challenges for cause of this variety, the Court will review and determine if the trial court abused its discretion in light of the entire examination of the veniremember. That is, whether the record reflects the evidence tends to reasonably support the trial court's implied findings that the veniremember would be able to perform the tasks that are assigned to jurors in this State. See Hernandez v. State, 757 S.W.2d 744 (Tex.Cr.App.1988).
Nachlinger testified that he would follow the law as proscribed by the oath and would render a verdict based solely upon the evidence presented at trial. Nachlinger understood the concept of proof beyond a reasonable doubt and would require the State to provide that proof, otherwise he would return a verdict of not guilty.
During the State's voir dire examination the following colloquy took place regarding the prospective juror's feelings on presumption of innocence:
"Q. [Prosecutor] Do you understand that that indictment is not evidence that he is guilty. It cannot be used or even considered to be evidence that he is guilty?
"A. Yes, sir.
"Q. Do you understand that?
"A. Yes.
"Q. Having been charged with that offense, it merely means that we can go to trial and try to prove our case. He is presumed innocent and will remain innocent and presumed innocent until such time as the State produces evidence which shows beyond a reasonable doubt that he is guilty.
*326 "A. Yes, sir.
"Q. All right. Do you have any problems with the presumption of innocence that the law affords to any individual?
"A. No, sir. That's fair.
"Q. Would agree you would afford that presumption to this defendant? You have not yet determined in your own mind because you have not heard any evidence and you understand the principle that he is presumed innocent at this time as he sits here in the Courtroom. He is innocent and he is not guilty because there has been no proof.
"A. Yes."
During appellant's voir dire examination, Nachlinger was asked about an answer he entered on his questionnaire regarding his personal philosophy, in which he wrote, "[t]he man killed another man who was holding down an honest job. I see little need in a trial." When asked whether he remembered specifics about the crime he said he did not, except that he had heard there was a confession and that is why he had written in that response. When questioned further on his feelings regarding appellant's guilt or innocence the following transpired:
"Q. [Appellant] In your heart nowthis is not an abstract thing, but how do you really feel inside?
"A. Well, if you knowif I was listening to this and reading what I have read, if he can be proven otherwise, you know, I'm not completely ironed in on one thing anywhere, but, you know, I have been known to change my mind and I can do it. You know, I'm willing to listen to anything. But, like I say, you know, didn't sound real good.
"Q. Well, again, what you say, if it can be proven otherwise, that isand you said that you heard that he gave a confession and you have heard people talking about and you have heard that it was a cinch deal and what that kind of tells me is that you must have felt that at some point or at least when you wrote this paper out that Dorsie Johnson must be guilty of this. Is that how you felt when youI mean just general feelings inside and not thinking about what the State has to prove and this and that, but just how you actually felt?
"A. Well, sir, I suppose so.
"Q. Is thatI suppose so. Do you think that that is really an accurate answer: yes or no?
"A. Yes, sir.
* * * * * *
"Q. Do you think that that conclusion and that idea that you have already set up in your mind and expressed by even saying, `I see little need in a trial,' you think that would influence your actions and your deliberations and your decision if you were on the Jury?
"A. Well, I hope it wouldn't, but I'm sure it probably could.
"Q. In other words, are you saying
"A. Yes, sir, I think I could. I don't know, you know.
* * * * * *
"A. Well, you know, you say I have formed a conclusion here. If I was going to take what I have already read and just, you know, pass a verdict now, it would probably be a guilty verdict. But if I was to get on this deal here and, you know, I mean that's not a cut and dried thing in my mind right now, you know. I believe I could go in here open minded, you know. I'd try to do it the best I could.
* * * * * *
"Q. Honestly and from your feelings and not from abstract ideas, but just from your heart?
"A. Well, I'myou know, I know what you're getting at here. I know what I wrote down on the questionnaire and all, but, wellyou know, you just kind of leading it around and I feel like I've told you now two or three times, but I don't really know how to go ahead and tell you is what I'm getting at. I feel like I've already told you this a couple of times, you know. I don't know really what you're hunting or pushing on here.
* * * * * *
*327 "Q. Do you understand that if a personif those conclusions from a person or yourself or any Juror influences their decisionin other words, if it caused you to say, well, I think he is guilty, but if he can convince me he is not, you understand that person would have the duty not to be on that Jury?
"A. Yes, sir.
"Q. And do you feel that you would fit that category because of that reason?
[No response]
"Q. Of course, there is nothing wrong with it if you fit that category and because you have read all of those things or heard people talking about them, there is nothing wrong with that. If you feel that you would, then that is what I would like to know.
"A. Yes, sir. I believe it could have some effect on my judgment.
"Q. You thinkI hate to keep pushing. You say it could have. Do you think it would have?
"A. Yes, sir."
It was at this time that appellant challenged veniremember Nachlinger for cause on the ground that Nachlinger had already formed an opinion as to appellant's guilt. Article 35.16(a)(10), V.A.C.C.P. The judge overruled the challenge and allowed further questioning by the State which drew another objection from appellant in that pursuant to Article 35.16(a)(10), supra, no further questioning should be allowed.[1] This objection was overruled[2] and examination by the State continued in part as follows:
"Q. [Prosecutor] All right. Now, then, do you know anythingknow anything that tells you beyond a reasonable doubt at this time that Dorsie Johnson is the one that committed this crime?
"A. No, sir.
"Q. And would you require the State, that is me and my witnesses, to prove to you beyond a reasonable doubt that this Dorsie Johnson is the one that committed the crime before you found this Dorsie Johnson guilty?
"A. Yes, sir. It'd have to be proven to me."
Nachlinger stated that the State would have to prove appellant's guilt beyond a reasonable doubt, that he understood the presumption of innocence and would abide by it and that he would render a verdict based upon the evidence adduced at trial. There is sufficient evidence in the record to support the trial court's implied finding of fact that Nachlinger was a qualified juror. Therefore, the trial court did not abuse its discretion in overruling appellant's challenge for cause. Nethery v. State, 692 S.W.2d 686 (Tex.Cr.App.1985) cert. denied, 474 U.S. 1110, 106 S. Ct. 897, 88 L. Ed. 2d 931 (1986); Barefoot v. State, 596 S.W.2d 875 (Tex.Cr.App.1980) cert. denied, 453 U.S. 913, 101 S. Ct. 3146, 69 L. Ed. 2d 996 (1981). Appellant's second point of error is overruled.
In appellant's sixth point of error he alleges that the trial court erred in denying his challenge for cause as to veniremember Bruner. Appellant alleges that Bruner could not consider a life sentence in a capital case and as a result demonstrated a prejudice against the law applicable to appellant and upon which he was entitled to rely. Article 35.16(c), (2), V.A.C.C.P.
The standard of review in these circumstances turns on whether the trial court abused its discretion by overruling the challenge for cause. In determining abuse of discretion, this court shall review the *328 record and determine if it supports the trial court's implied finding that the prospective juror's views would not "prevent or substantially impair the performance of his duties as a juror in accordance with his instruction and oath." Cockrum v. State, 758 S.W.2d 577 (Tex.Cr.App.1988) cert. denied ___ U.S. ___, 109 S. Ct. 1358, 103 L. Ed. 2d 825 (1989); Hernandez, 757 S.W.2d at 752.
The examination of Bruner regarding the imposition of sentence revealed that Bruner would not automatically vote "yes" when answering the punishment questions because not every murder deserved the death penalty, although she felt that a capital crime deserved the death penalty. She stated that she would wait to hear all of the evidence presented at punishment before determining the answers to the punishment questions.
During appellant's examination, Bruner was asked if she would answer the punishment questions "yes" so appellant would receive the death penalty which Bruner had stated was the only proper punishment for a capital crime. To this she responded:
"A. I'll put it likeif I answered all of these yes because the State proved it, I would answer them all yes.... [b]ut if it is not proven to me to answer all of these yes, I'll put one no, yes, or maybe two, whatever. Right now I can't answer that, really."
On further examination by the State, Bruner reiterated that as to the punishment questions, she would not automatically answer them "yes" thereby disregarding the evidence presented. She understood her oath and stated that she would not violate it just so the death penalty could be imposed.
The court, in an effort to clear up any ambiguities in her answers regarding punishment engaged in the following discussion:
[Trial court]
"Q. You would still vote no? Would you still vote no knowing it would possibly be life if you voted no?
"A. Right.
"Q. If it was [sic] failed to be proven to you that it should be yes, could you vote no?
"A. On the second phaseyes, on the second phase. Yes, sir, if its proven.
* * * * * *
"Q. You haven't answered my question. Could you vote no if it was not proven to you that
"A. Yes.
"Q. that you can vote yes
"A. Yes, I could vote no.
"Q. You would do that if the evidence did not show it to be yes?
"A. Yes, sure, I would."
Based on the totality of the voir dire, it is evident that Bruner would listen to all of the evidence, put her personal feelings aside, and answer the punishment questions based upon that evidence. Although, she initially would have answered the questions "yes" if appellant were found guilty, after the veniremember understood the process involved she testified that she would listen to the evidence provided at the punishment phase and would answer the special issue questions on punishment accordingly. As a result, there is sufficient evidence in the record to support the trial court's determination that Bruner's beliefs would not substantially impair her abilities as a juror in light of the instructions and oath. Hernandez v. State, 757 S.W.2d 744 (Tex.Cr.App.1988). The trial court, therefore, did not abuse its discretion in overruling appellant's challenge for cause of veniremember Bruner. Appellant's sixth point of error is overruled.
Appellant's fourth point of error alleges that the trial court erred in sustaining the State's challenge for cause of veniremember Graves. Appellant asserts that it was not sufficiently shown that Graves would automatically answer the punishment questions in the negative. See Article 35.16(b)(1), (3), V.A.C.C.P.
In determining whether a potential juror was properly excused for cause due to his or her views on capital punishment, it must be determined if the trial court abused its discretion in its action regarding *329 the veniremember in light of the record. Only where the record supports the trial court's determination that those views would prevent or substantially impair that veniremember's duties in light of the instructions and oath, will the decision made by the trial court be undisturbed on appeal. Wainwright v. Witt, 469 U.S. 412, 105 S. Ct. 844, 83 L. Ed. 2d 841 (1985); Adams v. Texas, 448 U.S. 38, 100 S. Ct. 2521, 65 L. Ed. 2d 581 (1980); Hernandez v. State, 757 S.W.2d 744 (Tex.Cr.App.1988); Sharp v. State, 707 S.W.2d 611 (Tex.Cr.App.1986) cert. denied, ___ U.S. ___, 109 S. Ct. 190, 102 L. Ed. 2d 159 (1988).
In the present case, after having had the process explained to him, Graves stated that regardless of what the evidence proved he would answer one of the punishment questions "no" so as to not be a participant in the rendering of a death sentence. Graves, in his responses, went on to illustrate that if faced with such a decision as between the oath and his conscience, he would prefer not to take the oath rather than swear to perform a duty which he could not undertake.
During examination by appellant, Graves stated that he would follow the law in deciding the three punishment issues. Subsequently appellant was asked the following question:
"Q. Okay. I kind of keep going back, I guess, to the answers of theif you were a Juror and asked to deliberate on the punishment on a capital crime, again, it would be in the instance where a person was convicted of a capital crime and you were talking about punishment and that being punishment set by the answers to these three questions, could you, in fact, follow your oath to listen to the evidence and decide on the evidence and weigh the evidence and then put an answerthen go ahead and answer these three questions as the evidence indicated?
"A. Yes, but if it meant answering yes to all three, I couldn't because I really don't feel like the death penalty is appropriate."
The mere fact that a prospective juror states that they would not, under any circumstances, answer the punishment questions in the affirmative for any reason, is not, in and of itself, sufficient to disqualify a juror. Hernandez v. State, 757 S.W.2d 744 (Tex.Cr.App.1988). However, after review of the record we find that it clearly reflects a "substantial likelihood that [Graves would] balk at the task or falsify an answer" and therefore the trial court committed no error in finding that Graves was unqualified to be a juror. Id. It is evident that Graves' views on crime and punishment would substantially impair his abilities to carry out his duties as a juror in accordance with the oath and instructions necessitated by Texas law. Id. at 754. Therefore, as the trial court committed no error, appellant's fourth point of error is overruled.
Appellant in his first point of error alleges that the trial court sua sponte excused veniremember Walker over his objections and without a challenge for cause by either party.
Although this is true, appellant mischaracterizes the trial court's action by calling it a "sua sponte" excusal. Cf. Green v. State, 764 S.W.2d 242 (Tex.Cr.App.1989); Nichols v. State, 754 S.W.2d 185 (Tex.Cr. App.1988) cert. denied, ___ U.S. ___, 109 S. Ct. 819, 102 L. Ed. 2d 808 (1989); Rougeau v. State, 738 S.W.2d 651 (Tex.Cr.App.1987) cert. denied ___ U.S. ___, 108 S. Ct. 1586, 99 L. Ed. 2d 901 (1988); Moore v. State, 542 S.W.2d 664 (Tex.Cr.App.1976) cert. denied 431 U.S. 949, 97 S. Ct. 2666, 53 L. Ed. 2d 266 (1977). The Texas Code of Criminal Procedure provides that once a juror is sworn to answer truthfully to the questions to be asked during voir dire, "the court shall then hear and determine excuses offered by prospective jurors for not serving as a juror and if sufficient, discharge those members of the venire." Articles 35.02 and 35.03, V.A.C.C.P.
In the case before us, the State, in the course of examining Walker, inquired into several matters including whether she had responded affirmatively to a question regarding the care and custody of a child *330 under the age of ten years. Walker explained that the child was her grandson and that he stayed with her during the school year so he may attend school locally rather than in Grand Prairie where his mother lived.[3] She stated that he was eight years old and was currently being cared for by a friend while she was at the courthouse for this proceeding. The attorneys elicited from Walker that although her friend could care for the child during the course of the trial and although she characterized her grandson as very independent, if the trial lasted for the expected one to four weeks, she would have a difficult time keeping her mind on the trial. She stated that she wanted to do her civic duty and would like to be on a jury for a trial that would not be so lengthy. Veniremember Walker also stated that if she were a defendant in a criminal trial she would not want a juror who had her state of mind sitting on her jury panel.
The court then told Walker that if she wanted to be excused for these reasons that he would excuse her, if however, she wanted to serve on this jury then she may as she was qualified. The veniremember chose not to serve and asked to be excused. The court excused Walker, expressly pursuant to Article 35.03, over appellant's objection.
The objections raised by appellant began with an assertion that the trial court and prosecutor were seeking to exclude Walker because she was black, the same race as the appellant. That the testimony elicited by the State was intended for the sole purpose of having this veniremember excused because she was black. Additionally, appellant objected to the fact that the trial court was excusing her when there was no valid challenge for cause from either party and that the court was doing so based on her testimony which appellant felt was not sufficient to justify her excusal. We disagree.
As previously set out, Article 35.03 provides that it shall be the court that hears and determines the sufficiency of excuses for not serving as a juror. As the legislature has placed this responsibility and discretion upon the trial judges of this state, review of their decisions on appeal shall be whether such a decision constituted an abuse of discretion. That is, does the record reasonably reflect a tendency to support the trial court's holding. Where the record so reflects, decisions as to the sufficiency of excuses and the propriety of excusals rendered by trial courts shall not be disturbed on appeal. However, we feel that the exercise of this authority by trial judges should be jealously guarded and relied upon, not by the parties, but by the judges as a last resort for excusing, what would otherwise be, a proper juror. Cf. Nichols v. State, 754 S.W.2d 185 (Tex. Cr.App.1988) cert. denied, ___ U.S. ___, 109 S. Ct. 819, 102 L. Ed. 2d 808 (1989); Rougeau v. State, 738 S.W.2d 651 (Tex.Cr. App.1987) cert. denied ___ U.S. ___, 108 S. Ct. 1586, 99 L. Ed. 2d 901 (1988); Moore v. State, supra. Appellant's first point of error is overruled.
Appellant's fifth point of error alleges trial court error in overruling appellant's challenge for cause as to veniremember Kiker on the grounds that Kiker could not consider age as a mitigating factor at punishment. See Article 35.16(c)(2), V.A.C.C.P.
Appellant misconstrues the law when he characterizes Kiker's inability to consider age as a mitigating factor as a prejudice against the law applicable to the appellant's case. Although not cited in the briefs of either party, this Court has recently determined that it is not error for a trial court to overrule a challenge for cause where it is shown that a juror will not or may not give a particular variety of "mitigating *331 evidence" any consideration. Cuevas v. State, 742 S.W.2d 331 (Tex.Cr.App. 1987) cert. denied ___ U.S. ___, 108 S. Ct. 1488, 99 L. Ed. 2d 716 (1988); Cordova v. State, 733 S.W.2d 175 (Tex.Cr.App.1987), cert. denied ___ U.S. ___, 108 S. Ct. 2915, 101 L. Ed. 2d 946 (1988).
The United States Supreme Court has not yet mandated that jurors must give any amount of weight to any particular piece of evidence that might be offered in mitigation of punishment. Cordova, 733 S.W.2d at 189. What the Court has decided is that the factfinder must not be precluded or prohibited from considering any relevant evidence offered in mitigation of the punishment to be assessed, or in answering the punishment questions. Cordova at 189, citing Eddings v. Oklahoma, 455 U.S. 104, 102 S. Ct. 869, 71 L. Ed. 2d 1 (1982) and Lockett v. Ohio, 438 U.S. 586, 98 S. Ct. 2954, 57 L. Ed. 2d 973 (1978). See also Cuevas, 742 S.W.2d at 345. What this means is the factfinder must be allowed to hear the evidence and to act upon it. Adams v. Texas, 448 U.S. 38, 100 S. Ct. 2521, 65 L. Ed. 2d 581 (1980).
In Texas, this mitigating evidence is admissible at the punishment phase of a capital murder trial. See Article 37.071, V.A.C. C.P. Once admitted, the jury may then give it weight, if in their individual minds it is appropriate, when answering the questions which determine sentence. Adams, 448 U.S. at 46, 100 S. Ct. at 2526. However, "[t]he amount of weight that the factfinder might give any particular piece of mitigating evidence is left to `the range of judgment and discretion' exercised by each juror." Cordova at 189, quoting Adams v. Texas, 448 U.S. 38, 100 S. Ct. 2521, 65 L. Ed. 2d 581 (1980); Cuevas, 742 S.W.2d at 346.
During the voir dire examination of Kiker, she stated that as between a nineteen year old defendant with the maturity of a twenty-five year old versus a nineteen year old defendant with the maturity of a twelve year old, that as to punishment these people should be treated the same.
It was this inability to consider "either mental age or physical age" as a mitigating factor that appellant based his challenge. The trial court overruled appellant's challenge for cause finding that it was not a proper ground for disqualification.
The mere fact that a prospective juror, during voir dire, acknowledges that in their mind such evidence deserves little or no weight, does not create a sustainable challenge for cause under Article 35.16. See Cuevas, 742 S.W.2d at 345; Cordova, 733 S.W.2d at 189. We find the trial court committed no error in its ruling. Appellant's fifth point of error is overruled.
Lastly, appellant's third point of error alleges the trial court erroneously granted the State's challenge for cause to veniremember Guzman. Appellant asserts that it was not clear from the record that Guzman could not read or write.[4] Article 35.16(a)(11), V.A.C.C.P.
First, it has long been the law of this state that the statutory requirement that jurors be able to read and write meant something more than the mere ability to "write his name and nothing more." Hernandez v. State, 506 S.W.2d 884 (Tex.Cr. App.1974). Rather, the prospective juror should possess the ability to express their ideas in words upon paper. Hernandez at 887 citing Johnson v. State, 21 White & W. 368, 17 S.W. 252 (1886). This is a determination which rightfully belongs to the trial court and, absent an abuse of discretion, such a finding will not be disturbed on appeal. Garcia v. State, 581 S.W.2d 168 (Tex.Cr.App.1979) (vacated and remanded on other grounds, 453 U.S. 902, 101 S. Ct. 3133, 69 L. Ed. 2d 988 (1981)).
*332 During the State's examination of prospective juror Guzman, she stated that she could read but not very well since the extent of her education went no further then the fourth grade. In regards to the juror questionaire, Guzman stated that there were words that she did not understand, she did not know how to explain the answers she wished to express, that she "did not know how to put it." Guzman testified she could write but could not spell some of the words in the answers she wanted to put down so she would just leave those questions blank.
Guzman further testified specifically as to the charge that would be given in this case that if it contained "big words" then she would not be able to read and understand the charge. When asked about the three special punishment questions she stated she could read and understand some of them but did not understand the rest. She could not pronounce nor did she know what the word "deliberate" meant or what was the import of that part of the second question regarding "continuing threat to society", although she could read at least the first part of the question. She further stated that she did not know what it meant to "do something deliberately" that she had never seen the word until she saw the charge. Veniremember Guzman further testified that although she could read the instructions, it might however take her as many as five readings before she would be able to answer one question. She stated she would probably still not understand the questions and therefore would have to have somebody explain their meaning to her. Before ruling upon the State's challenge for cause pursuant to Articles 35.16(a)(11), (b)(1), (3), the court asked Guzman the following question:
"The Court: In talking about intentional, let me read this to you. A person acts intentionally or with intent with respect to the nature of his conduct or to a result of his conduct when it is his conscious desire to engage in the conduct or cause the result. Do you know what that means?
"Veniremember Guzman: No, sir."
The court then sustained the State's challenge for cause on all grounds raised over appellant's objections.
The record more than adequately reflects that Guzman, having obtained only a fourth grade education, could not satisfy the statutory requirement of having the ability to read and write. It is clear that she did possess rudimentary grammatical skills, however, these in and of themselves, will not satisfy the statutory requirement. Hernandez v. State, 506 S.W.2d 884 (Tex. Cr.App.1974). Given the fact that the trial court found Guzman's abilities to be in question, we find from the record sufficient evidence which supports the trial court's decision and therefore, the trial court did not abuse its discretion in sustaining the State's challenge for cause under Article 35.16(a)(11), V.A.C.C.P. Appellant's third point of error is overruled.
We, therefore, affirm appellant's conviction and sentence of death.
CLINTON, J., finds the majority is creating a new unsupported rule for reviewing exercise of discretion and therefore joins only the judgment of the Court.
TEAGUE, J., dissents.
DUNCAN, J., not participating.
NOTES
[1] Appellant also objected based on Article 35.16(a)(8), which allows for the discharge of a veniremember due to the fact "he had served on a petit jury in a former trial of the same case." There is no evidence in the record to support such an objection nor is this raised in appellant's appeal. Therefore, we need not determine its validity.
[2] Appellant raises the failure of the trial court to suspend examination and discharge Nachlinger pursuant to Article 35.16(a)(10), as a part of his second point of error being discussed herein. Although Nachlinger was "unequivocal" in one particular response, when viewed in the context of the preceding examination, the record reflects that Nachlinger was anything but "unequivocal" as to whether, in his opinion, the conclusion regarding appellant's guilt would influence his verdict. Therefore, the trial court did not err in allowing further questioning.
[3] Although it appears that the excuse raised by veniremember Walker is more along the lines of an exemption as per Section 62.106(2) of the Government Code, which states that a person qualified to serve as a juror may nonetheless establish an exemption from service if he has legal custody of a child or children younger than 10 years of age and that service requires leaving them without adequate supervision. We find that this exemption was not raised, therefore, we do not decide the applicability of the exemption, i.e., "legal custody," to grandmothers, such as veniremember Walker.
[4] The State was sustained on two separate challenges for cause of veniremember Guzman. The first regarding her ability to read and write and the second that she possessed a conscientious scruple against infliction of the death penalty as well as a bias or prejudice against the law upon which the State was entitled to rely. Article 35.16(b)(1), (3), V.A.C.C.P. Appellant objected to both challenges. As we find the first challenge under Article 35.16(a)(11) proper, we need not address the merits of the second challenge for cause sustained by the trial court and complained of herein by appellant. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2525632/ | 220 P.3d 498 (2009)
2009 WY 140
Kenneth J. ZALOUDEK, Jr., Appellant (Defendant),
v.
Becky ZALOUDEK, Appellee (Plaintiff).
No. S-09-0016.
Supreme Court of Wyoming.
November 12, 2009.
*499 Representing Appellant: William L. Combs, Combs Law Office, Evanston, Wyoming.
Representing Appellee: Richard J. Mulligan, Mulligan Law Office, Jackson, Wyoming; Heather Noble, Jackson, Wyoming. Argument by Ms. Noble.
Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.
BURKE, Justice.
[¶ 1] In this appeal, Kenneth J. Zaloudek challenges the district court's property division. We will affirm.
ISSUES
[¶ 2] Mr. Zaloudek states his three appeal issues as follows:
1. Did the trial court afford husband fundamental due process in its rulings surrounding the Order on Plaintiff's Motion Regarding Reimbursement of Hay?
2. Is a decree of divorce that simply adopts one party's proposal without offering it for approval to the other party entitled to this Court's deference when it contains unjust and inequitable divisions of property based on defective factual findings?
3. Does the decree of divorce unfairly divide assets and debts without adequate *500 analysis of property division factors and by improperly reaching non-marital assets?
Ms. Zaloudek restates the issue more simply: Did the trial court abuse its discretion in its divorce decree ordering an equitable division of the property?
FACTS
[¶ 3] Ms. Zaloudek began working as an airline flight attendant in 1972. Mr. Zaloudek began working as a pilot for the same airline in 1973. They met in 1986 when both were working on the same flight. They began living together later that year in a house owned by Ms. Zaloudek in Georgia. They were married in August of 1990. A short time later, Ms. Zaloudek sold the Georgia property, and the couple built a house in Park City, Utah. They sold the Utah property in 1996, and moved to a home near Evanston, Wyoming. The parties have no children.
[¶ 4] Ms. Zaloudek filed for divorce in February of 2007. She was still working for the airline, but Mr. Zaloudek had taken early retirement in 2003. Both had accumulated substantial retirement assets, but his were larger because his earnings as a pilot had exceeded those of Ms. Zaloudek as a flight attendant. Near the date of the divorce trial, Mr. Zaloudek's retirement accounts were valued at approximately $1,700,000.00, and he also received pension payments of over $2,000.00 per month. Ms. Zaloudek had a retirement account worth approximately $350,000.00, plus an IRA account worth a little more than $40,000.00. Ms. Zaloudek testified that she intended to keep working and would earn an annual salary of $40,000.00. She estimated that if she retired as of the date of the trial, she would be eligible for a monthly pension benefit of approximately $1,200.00 per month. The couple's net equity in their Evanston property was approximately $530,000.00. The parties owned personal property estimated by one of them to be worth approximately $120,000.00.
[¶ 5] The couple raised horses, and at one time kept as many as 27 horses on their Evanston property. At the time the divorce was filed, they owned 12 or 13 horses. After filing for divorce and moving to a condominium in Evanston, Ms. Zaloudek took two of the horses and kept them at a boarding facility. In the autumn of 2007, while the divorce was pending, Ms. Zaloudek filed a motion with the district court seeking an order allowing her to remove hay from the Evanston property to feed her horses at the boarding facility. Mr. Zaloudek opposed that motion. The district court held an unreported and unrecorded hearing on the matter. The court did not grant Ms. Zaloudek permission to remove hay from the property but, instead, ordered Mr. Zaloudek to pay Ms. Zaloudek for hay to be purchased from another source. Mr. Zaloudek was ordered to pay her $1,800.00 for hay, an additional $500.00 to reimburse her for miscellaneous horse boarding costs, and $500.00 in attorney's fees, for a total of $2,800.00. The district court indicated that it would "consider the payment" for the hay "in determining the final equitable distribution of property between the parties at the time of trial."
[¶ 6] At trial, the parties largely agreed to a division of their personal property. The parties also agreed that the Evanston property should be sold, with the net proceeds divided equally between them. They did not agree on how to divide the retirement assets, and after trial, in accordance with the district court's order, the parties submitted proposed divorce decrees setting forth their separate proposals for dividing the retirement assets. The proposals were detailed and rather complicated, but can be fairly characterized in simple terms. Ms. Zaloudek proposed an equal split of the retirement assets. To achieve an equal division of the property, Mr. Zaloudek would be required to pay Ms. Zaloudek an additional $782,659.17. In contrast, Mr. Zaloudek proposed that he should receive a substantially greater share, based in large part on the fact that each party had accumulated retirement assets before the marriage. He asserted that the pre-marital assets should not be divided, but that the district court should divide only those portions of the retirement accounts and benefits that had accumulated during the marriage. To achieve his proposed property division, Mr. Zaloudek would pay Ms. Zaloudek an additional $247,114.19.
*501 [¶ 7] The district court rejected Mr. Zaloudek's proposed division of the retirement assets. It accepted Ms. Zaloudek's proposal, and adopted her proposed divorce decree nearly verbatim. Mr. Zaloudek filed a timely appeal challenging the district court's decisions.
STANDARD OF REVIEW
[¶ 8] A district court's division of property in a divorce is entitled to substantial deference.
Decisions regarding the division of marital property are within the trial court's sound discretion, and we will not disturb them on appeal unless there was an abuse of discretion. Davis v. Davis, 980 P.2d 322, 323 (Wyo.1999). An abuse of discretion occurs when the property disposition shocks the conscience of this Court and appears to be so unfair and inequitable that reasonable people cannot abide it. Id. We view the evidence in the light most favorable to the prevailing party, affording that party every reasonable inference which can be drawn from the record. Id.
Pittman v. Pittman, 999 P.2d 638, 640 (Wyo. 2000).
[¶ 9] When dividing marital property, the district court considers the factors set forth in Wyo. Stat. Ann. § 20-2-114 (LexisNexis 2009):
In granting a divorce, the court shall make such disposition of the property of the parties as appears just and equitable, having regard for the respective merits of the parties and the condition in which they will be left by the divorce, the party through whom the property was acquired and the burdens imposed upon the property for the benefit of either party and children. The court may decree to either party reasonable alimony out of the estate of the other having regard for the other's ability to pay and may order so much of the other's real estate or the rents and profits thereof as is necessary be assigned and set out to either party for life, or may decree a specific sum be paid by either party.
The district court has discretion to determine what weight should be given each of these individual factors, and to divide the property as appropriate to the individual circumstances of each case. Carlton v. Carlton, 997 P.2d 1028, 1032 (Wyo.2000).
The justness and fairness of a marital property division cannot be gauged with a simple comparison of the amount of property awarded to each party. Rather, the disposition should be performed with regard to the respective merits of the parties, the condition in which they will be left by the divorce, the party through whom the property was acquired, and the burdens imposed upon the property for the benefit of either party.
Carter-Wallop v. Wallop, 2004 WY 46, ¶ 36, 88 P.3d 1022, 1032 (Wyo.2004). The goal in dividing marital property upon divorce is to reach an equitable result.
DISCUSSION
[¶ 10] While the divorce was pending, Ms. Zaloudek sought permission from the district court to take some of the hay stored at the Evanston property to feed the two horses she was keeping. Mr. Zaloudek objected, arguing that he was already bearing an unjust burden of expenses, and that Ms. Zaloudek had persistently violated the court's orders by coming onto the Evanston property and taking items of personal property. After a hearing held by telephone, the district court denied Ms. Zaloudek's request for permission to take the hay but, instead, ordered Mr. Zaloudek to pay for hay to be purchased from another source. Mr. Zaloudek filed a motion asking the district court to reconsider its ruling, claiming that the payment of money was relief that had not been sought by Ms. Zaloudek, and that the parties had presented no testimony or other evidence during the hearing to support the order. The district court apparently chose to deny Mr. Zaloudek's motion to reconsider and, instead, issued the written order that had been prepared and submitted by Ms. Zaloudek. On appeal, Mr. Zaloudek claims that the district court's decision was arbitrary and capricious, unsupported by the evidence, and contrary to law.
[¶ 11] Mr. Zaloudek initially contends that the district court erred in ordering him *502 to pay Ms. Zaloudek because she did not request that relief. The record does not support that assertion. In the motion, Ms. Zaloudek sought alternative forms of relief. First, she asked for permission to remove hay from the property. Alternatively, she requested payment for the costs of boarding the horses. The relief granted by the district court falls within this alternative request. Mr. Zaloudek had notice of this claim for relief and we find no error in the district court's consideration of this issue.
[¶ 12] Because the hearing on this motion was not reported, or otherwise recorded, it is nearly impossible for us to review the other challenges Mr. Zaloudek makes to the district court's order. In the absence of a transcript, we have no way to determine what evidence the district court considered during the hearing, and so our review is "greatly restricted." Arnold v. Day, 2007 WY 86, ¶ 9, 158 P.3d 694, 697 (Wyo.2007). Mr. Zaloudek attempted to fill this gap by moving to settle the record pursuant to W.R.A.P. 3.03. However, his request came more than a year after the hearing had been held, and a district court is not required to approve a statement of the evidence if it cannot recall the facts of a proceeding. Feaster v. Feaster, 721 P.2d 1095, 1097 (Wyo.1986). We are therefore left with no record of the hearing, and without a record, we must assume that the trial court had sufficient evidence to support its findings. Willowbrook Ranch, Inc. v. Nugget Exploration, Inc., 896 P.2d 769, 771-72 (Wyo.1995). Similarly, we are unable to evaluate Mr. Zaloudek's claims of fundamental procedural errors that denied him due process, because no such errors are reflected in the record.
[¶ 13] The trial record contains evidence relating to the hay. The parties testified that a substantial amount of hay had been stored on the Evanston property when the Zaloudeks separated. Mr. Zaloudek said that he had sold some of this hay. Ms. Zaloudek presented evidence of the value of this hay, along with receipts for expenses she had incurred in caring for the two horses she kept. This evidence is more than sufficient to support the conclusion that the hay was marital property, and that Mr. Zaloudek owed Ms. Zaloudek part of the money he received when he sold it.
[¶ 14] We also note that the challenged order required Mr. Zaloudek to pay Ms. Zaloudek a total of $2,800.00, in the context of a divorce in which the value of the marital estate exceeded $2,000,000.00. We review a district court's property division "from the perspective of the overall distribution of marital assets and liabilities, rather than from a narrow focus on the effects of any particular disposition." Carlton, 997 P.2d at 1032; Sweat v. Sweat, 2003 WY 82, ¶ 10, 72 P.3d 276, 279 (Wyo.2003).[1] Applying this perspective, we simply cannot deem the district court's order an abuse of discretion, contrary to law, or a denial of fundamental due process rights.
[¶ 15] Mr. Zaloudek's next issue relates to the district court's disposition of retirement assets. The district court ruled that all of the retirement assets should be divided equally between the two parties. Mr. Zaloudek challenges this decision. His arguments on this issue are somewhat difficult to follow, but we understand him to make two main points. First, he asserts that he should receive a greater share of the retirement assets because many of those assets were accumulated by him alone, not through the couple's joint efforts. Second, he contends that those portions of the retirement assets acquired prior to the marriage should not be considered marital property and should not be divided. Neither argument persuades us that the district court's decision to divide the retirement assets equally was an abuse of discretion.
[¶ 16] Although one statutory factor to be considered in dividing property in a divorce is "the party through whom the property was acquired," Wyo. Stat. Ann. § 20-2-114, previous cases have established that a party is not automatically entitled to all of that property. For example, in Humphrey *503 v. Humphrey, 2007 WY 72, ¶ 12, 157 P.3d 451, 454 (Wyo.2007), the property divided by the court included a business interest given to the husband by his parents. The husband objected, asserting that this property was "not a product of the marital union." Id. We rejected that argument because, pursuant to Wyo. Stat. Ann. § 20-2-114, "all property of the parties is subject to distribution." Id., ¶ 13, 157 P.3d at 454. We upheld the district court's decision to divide the business interest as part of the marital estate. To similar effect, in Breitenstine v. Breitenstine, 2003 WY 16, 62 P.3d 587 (Wyo.2003), we upheld a decree granting the wife one half of the marital estate, even though the property was largely from gifts and inheritance received from the husband's parents. Under Wyoming law, all of the Zaloudek's property was subject to equitable division upon divorce, and Mr. Zaloudek was not entitled to a larger portion of the couple's retirement assets just because he had earned more money than Ms. Zaloudek.
[¶ 17] Mr. Zaloudek also asserts that some of the retirement assets were acquired before the marriage, and therefore not part of the marital estate. This argument has merit, but the difficulty is that neither party provided any evidence of the value of the retirement assets at that earlier date. The record suggests that the parties were unsuccessful in obtaining this evidence, even though subpoenas were issued to the asset managers. Without evidence of the value of the retirement assets at the earlier date, the district court had no basis for excluding the pre-marital portion from division. The district court's refusal to speculate was not unreasonable, and was not an abuse of discretion.
[¶ 18] Mr. Zaloudek insists that the value of the retirement assets as of the date of the marriage should have been established by applying what he calls a "marital fraction." Mr. Zaloudek began acquiring retirement assets in 1973 when he began his employment with the airline. By the time of the divorce trial in 2008, he had owned these assets for thirty-five years. Seventeen of those years, or approximately 49%, were prior to his marriage to Ms. Zaloudek. Eighteen of those years, or approximately 51%, were after the marriage. On this basis, he claims that the district court should have considered 49% of his retirement assets as pre-marital property to be retained solely by him, and 51% of the retirement assets as marital property to be divided between the parties.
[¶ 19] This "marital fraction" method was used by an expert witness for Ms. Zaloudek during the divorce trial to establish a present value of Mr. Zaloudek's continuing pension payments. Mr. Zaloudek now claims that it was error for the district court not to apply this method to all of the retirement assets. However, the expert witness made it clear that he used this method only for the continuing pension payments, and explicitly stated that the method should not be applied to the other retirement assets. The district court did not abuse its discretion when it heeded the expert's testimony and declined to apply the "marital fraction" to the other retirement assets. In addition, experience indicates that a person's retirement accounts are worth substantially less in the early years of a career, and because of compound interest and continuing contributions, are worth substantially more in later years. The "marital fraction" method advocated by Mr. Zaloudek does not account for these changes in value over time. For this reason as well, we cannot conclude that the district court abused its discretion in declining to use the "marital fraction" method to estimate the pre-marital value of the retirement assets.
[¶ 20] The divorce decree reflects that the district court considered the statutory factors. It found that "most of the assets have been acquired during the marriage and... that those assets have appreciated during the marriage." The court determined that "an equitable distribution merits an equal distribution of the parties' assets and liabilities." It further found that "an equal division of the parties' assets would adequately allow each party to have sufficient income with which to support his or her individual living expenses." These findings and conclusions are sufficiently supported by the evidence of record, and are not so unfair *504 or inequitable as to constitute an abuse of discretion.
[¶ 21] As a final objection, Mr. Zaloudek asserts that the district court did not follow proper procedure when it entered the divorce decree. He complains that the district court adopted the proposed divorce decree submitted by Ms. Zaloudek, without allowing Mr. Zaloudek an opportunity to approve the order as to form or to assert any objections. Mr. Zaloudek claims that this violated W.R.C.P. 58(a).
[¶ 22] His reliance on W.R.C.P. 58(a) is misplaced. That rule, in pertinent part, provides as follows:
Presentation.... [U]nless otherwise ordered by the court, written judgments or orders shall be presented to the court within 20 days after its decision is made known. Before submitting the judgment or order, the party drafting it shall seek to secure the written approval as to form of the other parties. If, within 10 days, approval as to form is not obtained, the party drafting the form of judgment or order may forward the original to the court and serve a copy on the other parties with a notice advising objections must be made within 10 days. If no written objection is timely filed, the court may sign the judgment or order. If objection is filed, the court will resolve the matter with or without a hearing. A party objecting shall submit an alternative form of judgment or order with the objection.
This procedure is commonly used when the court orally announces a decision and asks one of the parties, usually the prevailing party, to draft an order reflecting that decision. That is not what happened in the Zaloudek's divorce, and accordingly, the rule does not apply here. The district court did not announce a decision at the end of the Zaloudek's divorce trial, and did not ask one of the parties to submit an order. Instead, it directed both parties to submit proposed divorce decrees. Both parties did so. In this way, the district court was reminded or made aware of the positions, arguments, and objections of both parties. We find no violation of W.R.C.P. 58(a).
[¶ 23] We affirm.
NOTES
[1] It is on this same basis that we decline to address in detail many of the minor complaints in Mr. Zaloudek's brief. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2457139/ | 895 S.W.2d 773 (1995)
Elaine Petre HOOPER, Appellant
v.
PITNEY BOWES, INC., Gary Simpson, and Robert Moretti, Appellees.
No. 06-94-00034-CV.
Court of Appeals of Texas, Texarkana.
Submitted August 18, 1994.
Decided January 31, 1995.
*775 Britton D. Monts, Dallas, for appellant.
Charles T. Frazier, Jr., Cowles & Thompson; Joseph W. Spence, Cynthia Hollingsworth, Gardere & Wynne, and Gayla C. Crain, Epstein, Becker & Green, Dallas, for appellees.
Before CORNELIUS, C.J., and BLEIL and GRANT, JJ.
OPINION
CORNELIUS, Chief Justice.
Elaine Hooper brought this suit against Gary Simpson, Robert Moretti, and Pitney Bowes, Inc. seeking damages for intentional infliction of emotional distress and slander. Hooper was a sales manager for Pitney Bowes, and Simpson and Moretti were two of her superiors. The jury found that only Simpson had inflicted emotional distress on Hooper. It also found that only Moretti had slandered Hooper, but it also found that Hooper consented to or otherwise produced the defamation. The jury awarded Hooper $50,000.00 actual damages and $5,000.00 punitive damages against Simpson and $20,000.00 actual damages and $5,000.00 punitive damages against Moretti. The trial court, however, rendered a take-nothing judgment for Moretti based on the jury's finding that Hooper consented to the slanderous statements. The jury did not find liability against Pitney Bowes.
On appeal Hooper contends that the jury's failure to find any liability against Pitney Bowes is against the conclusive evidence and the great weight of the evidence, that the jury answers as to Moretti's slander and Hooper's consent are irreconcilably conflicting, and that the finding of consent is against the great weight of the evidence. We conclude that the jury's failure to find liability against Pitney Bowes is against the great weight of the evidence, the issues of slander and consent are not conflicting, and the finding of consent is not against the great weight and preponderance of the evidence. Thus, we affirm the judgment as to Simpson and Moretti, but sever the cause of action against Pitney Bowes and reverse and remand that cause for a new trial.
Mrs. Hooper was a sales manager for Pitney Bowes. Her supervisors were Simpson, the regional vice-president, and Moretti, the branch manager. Hooper was a very successful *776 sales manager and was highly regarded by her superiors. Eventually, however, officials of Pitney Bowes discovered that Hooper was conducting emotionally charged sales meetings, as well as private encounters, where Hooper encouraged her sales staff to engage in mind-altering exercises, experience emotional breakthroughs, and release their inner energy so they could become better sales persons. Attendees at these meetings with Hooper characterized them as "cultlike." Complaints about Hooper's actions were relayed to Simpson and Moretti, who in turn launched an official investigation. Ultimately, Simpson and Moretti determined that Hooper was acting inappropriately. Consequently, they gave her a multi-page list of restrictions on her future activities that were designed to end the intimate emotional encounters with her staff and to return their activities to a more normal business climate. Hooper did not obey all of the restrictions, and she was eventually fired. Hooper did not base her suit on the investigation itself, but rather on Simpson's and Moretti's acts and statements that characterized her conduct as cult-like or occult, new-age, unchristian, and even satanic. Sonny Craft, a Pitney Bowes sales manager, testified that he, Simpson, and Moretti made statements that Hooper was "in the occult," "a witch," "a sorceress," and "satanistic."
To recover for intentional infliction of emotional distress, Hooper must have established that Simpson committed intentional or reckless acts that were extreme and outrageous and that caused her to suffer severe emotional distress. Wornick Co. v. Casas, 856 S.W.2d 732 (Tex.1993); Twyman v. Twyman, 855 S.W.2d 619 (Tex.1993). Simpson, in a cross-point, and Pitney Bowes, in its reply to Hooper's brief, say there is no evidence that Simpson engaged in such conduct toward Hooper. They do not argue that the statements and actions did not occur; only that they were not extreme or outrageous and were not made in the scope of Simpson's employment.
To be considered extreme and outrageous the conduct must go beyond all possible bounds of decency and be regarded as atrocious and utterly intolerable in a civilized society. Wornick v. Casas, supra; Twyman v. Twyman, supra. In these times, a high degree of opprobrium has attached to terms such as "cultist," "occult," "unchristian," and especially "sorceress," "satanistic," and "witch." False accusations against or characterizations of persons using those and similar terms, we believe, can certainly be considered to be beyond all bounds of decency and to be atrocious and utterly intolerable in a civilized society. We find sufficient evidence to support the jury's implied finding that the conduct in question was extreme and outrageous.
The jury failed to find Pitney Bowes liable for either Simpson's infliction of emotional distress or Moretti's slander. The jury's answers must have been based on its implied failure to find that Simpson and Moretti were acting in the scope of their employment when they committed their acts. Hooper says this implied failure to find is against the conclusive evidence or is against the great weight and preponderance of the evidence. We agree that it is against the great weight and preponderance of the evidence.
In its general instructions the trial court told the jury that a corporation is responsible for the acts of its officers, agents, or employees that are done within the course and scope of their employment, and defined course and scope of employment as any act done by an officer, agent, or employee in the furtherance of the corporation's business. An action is sustainable against a corporation for defamation by its agent if the defamation is referable to the duty owed by the agent to the corporation and was made while in the discharge of that duty. Neither express authorization nor subsequent ratification is necessary to establish liability. Texam Oil Corp. v. Poynor, 436 S.W.2d 129, 130 (Tex. 1968); Cotton Belt R.R. v. Hendricks, 768 S.W.2d 865, 870 (Tex.App.Texarkana 1989, no writ). The undisputed evidence shows that both Moretti and Simpson were managers for Pitney Bowes at the local and regional levels and that each had managerial responsibility including the authority to hire and fire employees. It is also undisputed that all of the statements they made to coworkers and to those outside the company *777 were made in the process of investigating Hooper's actions at her motivational meetings, and that their duties involved controlling the actions of a local manager such as Hooper. The investigation that they officially initiated was thus within their authority and responsibility.
Pitney Bowes argues that Simpson and Moretti did not act within the course of their employment because there is evidence that their investigation involved some clandestine meetings away from corporate offices, secret recordings, trips to libraries to investigate cult activity, and private meetings with employees concerning Hooper's behavior. It argues that this evidence shows that Simpson and Moretti were acting outside the scope of their employment because these activities would not have been approved by the company. Simpson's immediate superior testified that none of Simpson's actions was appropriate for the manager and that he would certainly want to know about them. Also, as soon as the central offices became aware of the accusations against Hooper an internal investigation was conducted which concluded that, although Hooper's actions as a manager were inappropriate, she should not be terminated, but instead should be given a second chance under strict written controls.
This evidence, however, is not dispositive on the question. The fact that an employee does an act that is unauthorized or that would not be approved by his employer does not mean that the employee was outside the scope of his employment. The employer is liable for the act of his employee, even if the specific act is unauthorized or contrary to express orders, so long as the act is done while the employee is acting within his general authority and for the benefit of the employer. Ramos v. Frito-Lay, Inc., 784 S.W.2d 667 (Tex.1990); J.V. Harrison Truck Lines, Inc. v. Larson, 663 S.W.2d 37 (Tex. App.Houston [14th Dist.] 1983, writ ref'd n.r.e.); Baker Hotel of Dallas v. Rogers, 157 S.W.2d 940 (Tex.Civ.App.Dallas 1941), writ ref'd per curiam, 138 Tex. 398, 160 S.W.2d 522 (1942).
The statements made by Simpson and Moretti about Hooper were made in their effort to investigate her conduct as their subordinate. Evidence showing that they met secretly away from the company to plan their next move is not dispositive. All of their activities were the kind that a manager was expected to conduct and were within the scope of their employment. We find the jury's failure to find liability against Pitney Bowes for Simpson's acts to be so against the great weight and preponderance of the evidence as to be manifestly wrong and unjust.
The remaining question as to Pitney Bowes is whether Simpson's and Moretti's acts were subject to a qualified privilege that shields them and Pitney Bowes from liability. As a defense to libel or slander, a qualified privilege extends to communications made in good faith on a subject in which the author has an interest or duty to another person having a corresponding interest or duty. Dixon v. Southwestern Bell Telephone Co., 607 S.W.2d 240 (Tex.1980); Gillum v. Republic Health Corp., 778 S.W.2d 558 (Tex.App. Dallas 1989, no writ); Houston v. Grocers Supply Co., 625 S.W.2d 798 (Tex.App.Houston [14th Dist.] 1981, no writ); Bergman v. Oshman's Sporting Goods, Inc., 594 S.W.2d 814 (Tex.Civ.App.Tyler 1980, no writ). The effect of the privilege is to justify the statements when they are made without actual malice. Dixon v. Southwestern Bell Telephone Co., supra. The privilege is peculiarly applicable to communications between employers and employees. Dixon v. Southwestern Bell Telephone Co., supra; Bergman v. Oshman's Sporting Goods, Inc., supra.
When publication of a defamatory statement is made under circumstances creating a qualified privilege, the plaintiff has the burden to prove malice or the absence of good faith. Houston v. Grocers Supply Co., supra. The jury found that both Simpson and Moretti acted with malice. Thus, although their acts were privileged, the privilege was lost.
Pitney Bowes challenges whether the intentional tort of infliction of emotional distress may be applied to impose liability under principles of respondeat superior. Generally, the willful and malicious actions of an employee acting within the scope of his *778 employment are imputed to the employer, and they subject the employer to liability under the principles of respondeat superior. Houston Transit Co. v. Felder, 146 Tex. 428, 208 S.W.2d 880 (1948); Moore v. El Paso Chamber of Commerce, 220 S.W.2d 327, 331 (Tex.Civ.App.El Paso 1949, writ ref'd n.r.e.); 33 Tex.Jur.3d Employer and Employee § 285 (1984). An exception to this rule, usually applied in cases involving serious criminal activity, is that an employer is not liable for intentional and malicious acts that are unforeseeable considering the employee's duties. Adami v. Dobie, 440 S.W.2d 330, 334 (Tex.Civ.App.San Antonio 1969, writ dism'd); 1 J. HADLEY EDGAR & JAMES B. SALES, TEXAS TORTS & REMEDIES § 4.02(2)[f] (1994). In this case Simpson's and Moretti's acts were committed while they were performing their official duties. It is reasonably foreseeable that a manager might mismanage his investigation of an employee to the extent that he would commit intentional infliction of emotional distress. Thus, Pitney Bowes is liable for the intentional and malicious acts of its manager.
Hooper next contends that the trial court erred in disregarding the jury finding that Moretti slandered her. She argues that the finding that she consented to the slander conflicts with the finding that Moretti slandered her without legal excuse, and that the finding of consent is supported by no or insufficient evidence.
In connection with the slander question the court instructed the jury that slander is any defamatory statement orally communicated to a third person without legal excuse or qualified privilege. Hooper argues that if she consented to the defamation, as the jury in Question 3 found she did, the slanderous statements could not have been "without legal excuse" and therefore the issues conflict. We disagree. Consent is an affirmative defense to an action for slander. The jury could properly find that the statements were without legal excuse and were thus slanderous, yet find in another issue that a cause of action for those statements is barred because they were authorized or made with consent. There is no conflict in those two findings. One simply finds there is a cause of action, while the other finds that the cause of action is barred by an affirmative defense.
Hooper also contends the jury finding of consent is supported by no or insufficient evidence. The question asked the jury if they found that Hooper "either consented to, authorized, wrote, or otherwise produced" the defamatory statements. The jury answered "yes."[1]
There is no testimony that Hooper wrote the statements or explicitly authorized or consented to them. There is, however, testimony and circumstantial evidence that we believe raises an inference that Hooper impliedly authorized or otherwise produced the defamatory statements. There is testimony from several sources that Hooper never denied the accusations against her when she was confronted with them; that she actually claimed she was engaged in "cult-like" activities; that she asked her supervisors to investigate her activities so the allegations of cultism could be "cleared up"; that she told the managers that she knew her actions could reasonably be considered as cultish; and that she orchestrated some of the activities and at least part of the investigation in an attempt to get Simpson fired. We are reluctant to overturn the finding of the jury on this question. They were entitled to judge the credibility and weight to be given the testimony and the inferences to be drawn therefrom. We therefore find there is sufficient evidence to support the jury's finding that Hooper authorized or otherwise produced the defamatory statements. One can consent to or authorize a defamation, and if she does so, that consent is an absolute bar to a defamation action. Smith v. Holley, 827 S.W.2d 433 (Tex.App.San Antonio 1992, writ denied), and cases there cited.
The judgment correctly awards damages against Simpson and decrees that Hooper take nothing against Moretti. Because the *779 jury's failure to find that Simpson was in the scope of his employment when he committed the acts is against the great weight and preponderance of the evidence, we reverse the judgment and remand the cause to the trial court for the limited purpose of a retrial of the issue whether Pitney Bowes, under the doctrine of respondeat superior, is jointly and severally liable for the damages found by the jury to have been caused by Simpson's conduct.
It is so ordered.
NOTES
[1] The consent issue was directed only to the slanderous statements. There was no contention made or jury question submitted on whether the intentional infliction of emotional distress was consented to or produced by Hooper. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3106255/ | COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00462-CR
Gustavo Ponce § From the 432nd District Court
§ of Tarrant County (1270527D)
v. § January 24, 2013
§ Per Curiam
The State of Texas § (nfp)
JUDGMENT
This court has considered the record on appeal in this case and holds that
the appeal should be dismissed. It is ordered that the appeal is dismissed.
SECOND DISTRICT COURT OF APPEALS
PER CURIAM
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00462-CR
GUSTAVO PONCE APPELLANT
V.
THE STATE OF TEXAS STATE
----------
FROM THE 432ND DISTRICT COURT OF TARRANT COUNTY
----------
MEMORANDUM OPINION1
----------
Appellant Gustavo Ponce attempts to appeal his third-degree felony
conviction, pursuant to a plea bargain, for evading arrest in a vehicle.2 On
June 6, 2012, appellant received written plea admonishments, waived his
constitutional and statutory rights, judicially confessed, and pled guilty. The trial
court convicted him of evading arrest in a vehicle and sentenced him to three
1
See Tex. R. App. P. 47.4.
2
See Tex. Penal Code Ann. § 38.04(a), (b)(2)(A) (West Supp. 2012).
2
years’ confinement. On the same day, the trial court signed a certification of
appellant’s right to appeal, which appellant and his trial counsel also signed. The
certification states that appellant entered into a plea bargain, has ―NO right of
appeal,‖ and has waived his right to appeal. Nonetheless, appellant brought this
appeal.
Through a letter, we notified appellant of the contents of the certification
and stated that we would dismiss the appeal unless he filed a response showing
grounds for continuing it. See Tex. R. App. P. 25.2(a)(2), (d). We have received
a response, but it does not contain appropriate grounds for continuing an appeal
from this plea-bargained case. See Tex. R. App. P. 25.2(a)(2) (stating that a
defendant who enters into a plea bargain may appeal only when the trial court
gives permission or when the appeal concerns matters raised by written motion
filed and ruled on before trial); Chavez v. State, 183 S.W.3d 675, 679–80 (Tex.
Crim. App. 2006) (concluding that a defendant must raise even a jurisdictional
issue in a pretrial motion or receive permission from the trial court that accepted
the plea bargain in order to bring the issue on appeal).3 Therefore, in
accordance with the trial court’s certification, we dismiss this appeal. See Tex.
R. App. P. 25.2(d) (―The appeal must be dismissed if a certification that shows
3
In appellant’s response to our letter, without addressing the language of
rule 25.2(a)(2), he complains about issues, such as the voluntariness of his plea,
that were not raised by a written motion before trial and are therefore not
appealable. See Cooper v. State, 45 S.W.3d 77, 83 (Tex. Crim. App. 2001);
Turley v. State, 242 S.W.3d 178, 179 & n.4 (Tex. App.—Fort Worth 2007, no
pet.) (mem. op.).
3
the defendant has the right of appeal has not been made part of the record under
these rules.‖), 43.2(f); Chavez, 183 S.W.3d at 680; Jackson v. State, 168 S.W.3d
239, 243 (Tex. App.—Fort Worth 2005, no pet.).
PER CURIAM
PANEL: LIVINGSTON, C.J.; DAUPHINOT and GARDNER, JJ.
DO NOT PUBLISH
Tex. R. App. P. 47.2(b)
DELIVERED: January 24, 2013
4 | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1398498/ | 626 F.Supp. 917 (1986)
FOREST OIL CORPORATION, Plaintiff,
v.
TENNECO, INC., Defendant.
Civ. A. No. J84-0084(L).
United States District Court, S.D. Mississippi, Jackson Division.
January 7, 1986.
*918 *919 Michael S. McKay and Glenn Gates Taylor, Jackson, Miss., for plaintiff.
Peyton S. Irby, Jr., John H. Holloman, III and Ernest G. Taylor, Jr., Watkins, Ludlam & Stennis, Jackson, Miss., for defendant.
MEMORANDUM OPINION AND ORDER
TOM S. LEE, District Judge.
This cause is before this court on motion by Tenneco, Inc. (Tenneco) to dismiss for failure to join indispensable parties pursuant to Rule 19 of the Federal Rules of Civil Procedure. Plaintiff Forest Oil Corporation (Forest) filed timely response to Tenneco's motion, and the court has considered the series of supplemented memoranda with attachments submitted by both parties.
On June 1, 1981, Tenneco contracted with Forest to purchase Forest's share of natural gas from wells located in what was known as the "Vintage Field" in Jefferson Davis County, Mississippi. By its terms the contract obligated Tenneco to make "pre-initial delivery payments"[1] (pre-I.D. payments) to Forest, the producer, in exchange for Forest's promise to commit all gas owned by it to the Tenneco contract upon completion of Tenneco's gas pipeline. Tenneco began making its pre-I.D. payments to Forest in March 1982, based upon invoices submitted by Forest indicating that Tenneco's pre-I.D. obligations began in November 1981. Tenneco began taking delivery of gas from the Vintage Field following completion of its gas pipeline in August 1982. The total amount in pre-I.D. payments tendered by Tenneco and received by Forest and the entities it represented under the contract exceeded $9,000,000.00.
In late 1982, Tenneco began experiencing increased deliverability capacity of high-cost gas by some of its producers, while at the same time experiencing a reduced demand for the gas it was reselling. In light of this increased supply and diminished demand, Tenneco began exercising its rights under the immediately exercisable market-out clauses in the vast majority of its contracts.[2] There remained, however, a number of gas purchase contracts which, like Forest's, contained no market-out clauses and which obligated Tenneco to high "takeor-pay *920 payments"[3] provisions over the life of the contracts. Thus, on April 29, 1983, Tenneco announced its Emergency Gas Purchase Policy (EGPP). Utilizing this EGPP, Tenneco either suspended or construed in its favor contractual provisions concerning price, deliveries, take-or-pay, nomination of gas categories and other related matters. The notice of the implementation of the EGPP that was sent to Forest contained a further demand that either Forest accede in writing within one month or Tenneco would terminate the contract. Forest rejected Tenneco's demand and, accordingly, Tenneco reduced its take-or-pay payments and the amount it paid for gas taken from the Vintage Field pursuant to the EGPP. Forest filed its original complaint in this action alleging breach of contract on February 3, 1984.
Tenneco's instant motion requests dismissal of this action on the ground that Forest's complaint seeks recovery not only for itself but also on behalf of two other entities, CDC Producing Company (CDC) and the Forest 1980 U.S. Drilling Partnership (the Drilling Fund). Tenneco argues that during contract negotiations it was aware that the Forest representative was offering to sell the gas interests of the "Forest Group";[4] however, it was unaware until discovery commenced that Forest had no authorization to commit the interests of CDC and the Drilling Fund to such long-term contracts, or that the interests of CDC and the Drilling Fund in the Vintage Field gas were so substantial.[5] Tenneco urges this court that, because the absence of CDC and the Drilling Fund as named plaintiffs in this action could leave Tenneco subject to a substantial risk of incurring multiple or otherwise inconsistent obligations if CDC and the Drilling Fund should be dissatisfied with the disposition of this action, the court should deem CDC and the Drilling Fund indispensable parties to be joined under Rule 19(a).[6] Tenneco concludes that since joinder of CDC and the Drilling Fund would destroy diversity jurisdiction in this cause,[7] dismissal of the action is proper.
Forest contends that at the time of contracting it was acting as an authorized agent of both CDC and the Drilling Fund in committing their gas to the Forest-Tenneco contract. As a party in whose name a contract has been made for the benefit of another, Forest asserts that it is the real party in interest authorized under Rule *921 17(a)[8] of both the Federal and Mississippi Rules of Civil Procedure to prosecute the action in its own name. Additionally, Forest alleges that throughout the course of performance of the contract, Tenneco was constantly aware of the interest of both CDC and the Drilling Fund and cannot now be heard to feign surprise that Forest is seeking to vindicate the substantial interests of CDC and the Drilling Fund in this action. Forest lastly asserts that CDC and the Drilling Fund will be bound by any judgment in this case since, as privies of Forest, they will be collaterally estopped from relitigating in a subsequent action any issues adjudicated in this action. The parties are in substantial agreement that this court, in following Mississippi choice-of-law rules, is Erie-bound to apply Mississippi substantive law. See Spragins v. Louise Plantation, Inc., 391 So.2d 97 (Miss.1980); Mitchell v. Craft, 211 So.2d 509 (Miss.1968).
Agency
In order to bring this suit in its own name, Forest has the burden of establishing the existence of an agency relationship between it and CDC and the Drilling Fund under Mississippi law. Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d 250, 256 (5th Cir.1980). Evidence of the existence of an agency relationship between Forest and CDC and the Drilling Fund is overwhelming in this case. While Forest has the burden of proving that an agency relationship existed at the time the contract was executed, Woods v. Nichols, 416 So.2d 659, 664 (Miss.1982), such relationship need not be established by a writing. A de facto agency may be proven by the presence of three elements at the time of contracting:
(1) Manifestation by the alleged principal, either by words or conduct, that the alleged agent is employed as such by the principal;
(2) The agent's acceptance of the arrangement;
(3) The parties understood that the principal will control the undertaking.
Engle Acoustic & Tile Co. v. Grenfell, 223 So.2d 613, 617 (Miss.1969); Ivey's Plumbing & Elec. Co. v. Petroleum Maintenance, Inc., 463 F.Supp. 543, 548 (N.D. Miss.1978).
The elements of a de facto agency relationship are clearly present here. CDC and the Drilling Fund manifested their assent to the Tenneco contract from the outset. By letter dated January 7, 1982, some two months following the commencement of the take-or-pay payments. CDC sent a confirmation of agency authorization to Forest, stating in part: "This letter will confirm CDC's PC's authorization to Forest to sell our share of gas produced from the Vintage Field, Jefferson Davis County, Mississippi, to TGP (Tenneco) under the terms of the referenced gas contract." A copy of this letter was sent to Tenneco. The obvious import of the word "confirm" is that Forest had de facto authority at the time of contracting. Such confirmation is an unequivocal manifestation of CDC's authorization for Forest's agency capacity.
The Drilling Fund acknowledges Forest's agency capacity in all of its communications regarding the Tenneco contract. Forest's authority to act as agent in negotiating gas purchase contracts is established in the Drilling Fund prospectus *922 sent to investors, in its Restated Articles of Partnership and in the quarterly status reports sent to its investors. In all of these communications, the Drilling Fund manifested its assent to Forest's actions on its behalf. It also appears from the record that the Drilling Fund marketed all of its gas interests through Forest; indeed, the Drilling Fund never signed any of its gas purchase contracts in its own name. Such evidence of industry custom and course of performance may be viewed as probative of the agency question and the issue of real party in interest under Rule 17(a). See Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d 250 (5th Cir.1980); Jackson Mfg. Co. of Mississippi, Inc. v. United States, 434 F.2d 1027 (5th Cir.1970); Mitsui & Co. v. Puerto Rico Water Resources Authority, 528 F.Supp. 768 (D.Puerto Rico 1981). Thus, by written confirmation and by the conduct of the parties, both CDC and the Drilling Fund manifested that Forest was acting as their agent in the execution and performance of the contract. It is undisputed by the parties that Forest accepted the arrangement.
Arguing that it could not have understood that the principals would control the undertaking or that they had manifested their assent to Forest's action on their behalf, Tenneco states that it had not heard of CDC or the Drilling Fund during the contract negotiations. This contention is refuted by copies of take-or-pay payment invoices submitted to Tenneco by Forest beginning in November 1981. These invoices expressly identify the separate interests of and the percentage of the total payment going to Forest, CDC and the Drilling Fund. Pursuant to these invoices, Tenneco made advance take-or-pay payments to Forest in the amount of $9,089,301.26, which the invoice allocated to Forest in the amount of $2,830,342.57, the Drilling Fund in the amount of $4,557,136.28 and CDC in the amount of $1,701,822.41. It is inconceivable that Tenneco would have disbursed funds in this amount without closely scrutinizing the specific interests dedicated to the contract, or without some knowledge and assurance that these interests were bound to the contract by the representations of Forest. The affidavit of Charles W. Brown, one of Tenneco's negotiators who was present during the contract negotiations, to the effect that he could not "recall" mention of CDC or the Drilling Fund does not serve to refute the specific mention of those entities in the invoices paid by Tenneco and the inference to be drawn therefrom.
Thus it appears that Forest has met its burden of establishing the existence of, at the very least, a de facto agency relationship between it and CDC and the Drilling Fund at the time of contracting. The parties' course of performance over the past four years indicates a recognition on Tenneco's part that Forest was authorized to act as agent of CDC and the Drilling Fund in marketing the Vintage Field gas. This authorization was put in writing by CDC in a February 1982 letter. Forest's written authority to sell the gas owned by the Drilling Fund is contained in a series of writings authored by the Drilling Fund's managing partners and distributed to its investors. Therefore, this court is of the opinion that Forest was acting as an agent of CDC and the Drilling Fund at the time of contracting and is entitled to prosecute this action in its own name pursuant to Rule 17(a) of both the Federal and Mississippi Rules of Civil Procedure. While the mere fact that Forest fits the definition of a real party in interest under Rule 17(a) is not dispositive of this question, the fact that Forest was acting as an authorized agent for CDC and the Drilling Fund at the time of contracting means that it is entitled to prosecute the action in its own name without joining its principals under Mississippi substantive law. See Lubbock Feed Lots, 630 F.2d at 256-57; see also Restatement (Second) of Agency § 364 (1957); Miss.R.Civ.Proc. 17(a) (comment).
Tenneco's last argument on the existence vel non of an agency relationship raises the issue of apparent conflicts as between Forest, CDC and the Drilling Fund. The written contractual document, *923 the Operating Agreement controlling the relationship between Forest and CDC, specifically prohibits Forest from making any long-term commitments of CDC's gas. The Forest-Tenneco contract was for a term of ten years. Likewise, the Drilling Fund's limited partnership agreement authorizes only Forest Energy, Inc., not Forest Oil, to sell its gas. A lengthy discussion of the effect of these purportedly controlling documents is unnecessary, for even if Forest's commitments at the time of contracting were unauthorized, they were clearly ratified by both CDC and the Drilling Fund. Under Mississippi law, a party who has actual knowledge of the facts of a transaction and who accepts some benefit and an obligation to perform thereunder may affirm or ratify a prior act by another party which did not bind him but which was professedly done on his account, and the act thereby constitutes an agency relationship and is given effect as if originally authorized by him. FMC Finance Corp. v. Reed, 592 F.2d 238, 240 (5th Cir.1979) (applying Mississippi law); Gulf Refining Co. v. Travis, 29 So.2d 100, 104 (Miss.1947); Restatement (Second) of Agency § 82 (1958).
Tenneco contends that the ratification doctrine cannot be conscionably applied in this case because any such clear affirmance of the contract did not occur until at least January 1982, a point some six months after execution of the contract when market conditions had changed dramatically. Tenneco urges this court to deny CDC and the Drilling Fund the advantage of a hindsight decision to ratify a six-month-old contract only when it looked like the best available offer. As stated previously, this court is of the opinion, and the affidavits and deposition testimony indicate, that during contract negotiations Tenneco knew that Forest was offering to commit the gas owned by the Forest Group, and that CDC and the Drilling Fund were members of the Forest Group. Had CDC and the Drilling Fund attempted to withdraw their gas from the Forest-Tenneco contract at any point between June 1981 and January 1982, as Tenneco contends they were free to do, Tenneco's proper remedy would have been a suit for damages against each for breach of a contract executed by an agent clothed with apparent authority to bind their interests. A principal is bound, once an agency relationship exists, not only to those transactions entered into by an agent that are within his actual authority, but those which are within his apparent authority. Weathersby v. Gore, 556 F.2d 1247, 1253 (5th Cir.1977) (applying Mississippi law); Steen v. Andrews, 78 So.2d 881, 883 (Miss.1955).
This court cannot agree with Tenneco that CDC and the Drilling Fund were acting under an assumption that their interests were not bound by the contract executed by Forest, or that they had no intention of recognizing their obligation under the contract until it appeared that the contract offered the highest price for their gas. Throughout the relevant time period, CDC and the Drilling Fund acted consistently with the theory that Forest had actual authority to bind their interests to the June 1, 1981 contract. As a party promisee to the contract acting as an agent for disclosed principals for whose benefit, at least in part, the contract was made, Forest is entitled to prosecute this action in its own name. Restatement (Second) of Agency § 364 (1957).
Preclusive Effect of a Judgment
Rule 19(a) of the Federal Rules of Civil Procedure provides certain criteria for determining whether to allow an action to proceed or to dismiss it in the forced absence of an interested party.[9] These criteria require the court to examine inter alia whether continuing the action in the absence of an interested party will work a deprivation of the substantive rights of any persons already parties to the action. See Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968). In this context, Tenneco raises the question of whether proceeding *924 in this action in the absence of CDC and the Drilling Fund will leave Tenneco "subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations" by reason of their interests in the contract under Rule 19(a)(2)(ii). In short, the fear expressed by Tenneco in its motion is that the judgment in this action will not be res judicata as to any claims which CDC or the Drilling Fund may wish to assert in the future.
The Mississippi law of res judicata and collateral estoppel has been "characterized as being as rigid as any now extant." Stovall v. Price Waterhouse Co., 652 F.2d 537, 540 (5th Cir.1981). See also Note, Collateral Estoppel The Multiple Tort Claimant Anomaly, 41 Miss.L.J. 497, 498 (1970). Tenneco reasons that if CDC or the Drilling Fund were to bring suit against it subsequent to conclusion of this action in a Mississippi state court there being no diversity between the parties the Mississippi court would apply the restrictive Mississippi law of res judicata, and as there would be no strict identity of the parties under Mississippi law, the state court action would not be barred. See Dunaway v. W.H. Hopper & Associates, Inc., 422 So.2d 749 (Miss.1982). Therefore, Tenneco concludes, the failure to join CDC and the Drilling Fund as named parties herein leaves it subject to a substantial risk of incurring multiple and otherwise inconsistent obligations within the meaning of Rule 19(a)(2)(ii).
While the court has some reservations concerning the application of Mississippi law of res judicata and collateral estoppel to determine the preclusive effect of this court's judgments,[10] the parties are in substantial agreement that a Mississippi state court would apply the Mississippi law of res judicata and collateral estoppel in any subsequent action based on this contract. This court cannot disagree.
Forest argues, however, that even if Mississippi law of res judicata would not bar a subsequent state court action on the contract by CDC or the Drilling Fund, the Mississippi law of collateral estoppel is broad enough to preclude such further relitigation on the contract issue. In general, the Mississippi cases hold that where an issue of fact is actually litigated and resolved in one trial, and where that fact was essential to the judgment in that first trial, that determination is conclusive between the same parties or their privies in a subsequent suit on a different cause of action. Mississippi Employment Security Commission v. Philadelphia Municipal Separate School District, 437 So.2d 388, 396 (Miss.1983); Bush Construction Co. v. Walters, 254 Miss. 266, 179 So.2d 188, 190 (1965). Unlike the broad doctrine of res judicata, collateral estoppel applies only to questions actually litigated in the prior suit, and not to all questions which might have been litigated. Dunaway, 422 So.2d at 751. Forest concludes that since the *925 central issues involved in any subsequent state court suit would be identical to the issues to be litigated in this action Tenneco's liability on the contract and the efficacy of its EGPP CDC and the Drilling Fund would be collaterally estopped from relitigating their claims under Mississippi law.
In State Farm Mutual Automobile Insurance Co. v. Universal Underwriters, 601 F.Supp. 286 (S.D.Miss.1984), this court undertook an examination of the requirement of party identity under the Mississippi law of collateral estoppel. Following an adjudication in Mississippi state court of liability between drivers of two cars involved in an automobile accident, two insurance companies brought a diversity action in this court seeking to determine their respective coverage obligations. The insurance companies were not named parties in the state court action, but they controlled the litigation. Id. at 289. This court, after a review of the Mississippi law of collateral estoppel, noted that "the exact parameters of the requirement for party identity in Mississippi have not been established." Id. Under the facts presented, this court held that the insurance companies were collaterally estopped from relitigating the liability issue because of the central role played by the companies in the prior litigation, regardless of whether they were named parties.
Thus, this court is of the opinion that the Mississippi law of collateral estoppel would bar relitigation in state court of the contract issue and Tenneco's chief defenses following a final judgment by this court. Such judgment on the merits by this court would necessarily subsume the issue of Tenneco's liability on the contract and the merit of its substantive defenses. As Tenneco's alleged liability to CDC and the Drilling Fund arises solely out of the June 1981 contract and has no independent basis which conceivably would not be litigated in this action, there is no need for this court to demand that its judgment be accorded res judicata effect as to all claims which could have been brought in this action. Operation of the Mississippi law of collateral estoppel should provide Tenneco with sufficient protection from future litigation by these same parties to allow this action to proceed.
Furthermore, through affidavits submitted by Douglas K. Thompson, Executive Vice President of CDC, and J. Brent Garfield, counsel for Forest Energy, Inc., managing general partner of the Drilling Fund, CDC and the Drilling Fund have each stated that it "understands and agrees that any judgment in this lawsuit would be binding upon the rights of [CDC and the Drilling Fund] with respect to the subject contract." Tenneco may utilize these sworn statements by both CDC and the Drilling Fund as grounds for various affirmative defenses, including waiver and collateral estoppel, should either party pursue any further remedies in state court. The plain meaning of the statements is that no such action will follow a final judgment by this court.
For the reasons stated above, this court concludes that Tenneco will not suffer a substantial risk of incurring multiple or otherwise inconsistent obligations if this action is allowed to go forward without joining CDC and the Drilling Fund as named plaintiffs. If further problems of this nature arise during the life of this litigation, this court is authorized under Rule 19(b) of the Federal Rules of Civil Procedure to adopt protective provisions in a judgment, shape the relief or take other measures to lessen or avoid any prejudice to Tenneco. Furthermore, and in accordance with this opinion, Tenneco must be allowed full discovery from both CDC and the Drilling Fund to the same extent as if they were named party plaintiffs.
It is, therefore, ordered that Tenneco's motion to dismiss for failure to join indispensable parties pursuant to Rule 19 of the Federal Rules of Civil Procedure is denied.
NOTES
[1] Pre-I.D. payments are prepayments for gas made to the producer by Tenneco before completion of a gas pipeline, based upon an agreed percentage of ownership which Tenneco agrees to pay a producer in the event the pipeline is not hooked up by a specified time.
[2] An immediately exercisable market-out clause was included in many of Tenneco's contracts with other producers. It gave Tenneco the right to unilaterally reduce the contract price payable to a producer whenever Tenneco considered it necessary in order to keep its resale price competitive and maintain its profit margin. Such immediately exercisable market-out clauses were the product of negotiation between the parties, and no such clause was contained in the Forest-Tenneco contract.
[3] A take-or-pay payment is in the nature of a prepayment for gas made available but not actually taken by Tenneco, calculated at a percentage (90% in the Forest-Tenneco contract) of the gas which the producer could have delivered during a contract year, reduced by the amount actually taken by Tenneco, with Tenneco paying the difference to the producer.
[4] Deposition testimony of Tenneco's chief gas contract negotiator, John Cameron, indicates that Cameron was aware during the negotiations of the Forest contract that the "Forest Group" was comprised of Forest Oil Corporation, CDC and the Drilling Fund.
[5] Tenneco contends, and Forest does not dispute, that over 66% of the gas committed to the Forest-Tenneco contract was owned by CDC and the Drilling Fund.
[6] Rule 19(a) provides:
Persons to be joined if feasible. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in the proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.
[7] Jurisdiction in this action is based upon diversity of citizenship. Forest is a New York corporation. Tenneco, CDC and the managing and general partners of the Drilling Fund are all Delaware corporations. Thus, joinder of CDC and the Drilling Fund would destroy this court's diversity jurisdiction.
[8] Rule 17(a) provides:
Real Party In Interest. Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in his own name without joining with him the party for whose benefit the action is brought; and when a statute of the United States so provides, an action for the use or benefit of another shall be brought in the name of the United States. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.
[9] See supra note 5 (text of Rule 19(a)).
[10] In Aerojet-General Corp. v. Askew, 511 F.2d 710 (5th Cir.), reh. denied 514 F.2d 1072 (5th Cir.), cert. denied 423 U.S. 908, 96 S.Ct. 210, 46 L.Ed.2d 137 (1975), the Fifth Circuit held that federal law of res judicata applies to determine the preclusive effect of a prior judgment by a federal court sitting in diversity in a subsequent diversity action in federal court. See also Willis v. Fournier, 418 F.Supp. 265 (M.D.Ga.), aff'd sub nom 537 F.2d 1142 (5th Cir.1978) (extending the Aerojet-General holding to include collateral estoppel); Stovall, 632 F.2d at 540. The rationale underlying these holdings is that a court, whatever the source of its jurisdiction, must have the power to determine the scope of its own judgments. A state should not be allowed to nullify the judgments of a federal court, constitutionally established and given power to enforce state-created rights, through the application of such state's more restrictive rules governing the preclusiveness of judgments. Aerojet-General, 511 F.2d at 516, quoting Kern v. Hettinger, 303 F.2d 333, 340 (2nd Cir.1962). The parties have not submitted, and the court has not found, any cases wherein a state court applied federal law of res judicata when faced with a subsequent suit filed there after a federal court sitting in diversity had entered judgment in the same action. Application of the federal law of res judicata would bar relitigation of this contract dispute by the named plaintiff, Forest, and those in privity with it, CDC and the Drilling Fund. See Hardy v. Johns-Manville Sales Corp., 681 F.2d 334 (5th Cir.1982), Hooker v. Klein, 573 F.2d 1360 (9th Cir.), cert. denied 439 U.S. 932, 99 S.Ct. 323, 58 L.Ed.2d 327 (1978). Application of federal law of res judicata would thus alleviate Tenneco's fears of multiple exposure. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2375477/ | 67 F. Supp. 2d 302 (1999)
KARA HOLDING CORP., Plaintiff,
v.
GETTY PETROLEUM MARKETING, INC., Getty Properties Corp., Getty Realty Corp., Leemilt's Petroleum Inc., and The Tyree Organization Ltd., Defendants.
No. 99 Civ. 0275(RWS).
United States District Court, S.D. New York.
September 22, 1999.
*303 Kaming & Kaming, New York City by Joseph S. Kaming, Elizabeth C. Kaming, Sean O'Donnell, of counsel, for plaintiff.
Law Offices of Robert G. Del Gadio, Uniondale, NY by Lawrence S. Novak, of counsel, for defendants.
OPINION
SWEET, District Judge.
Defendants Getty Petroleum Marketing, Inc. ("Getty Petroleum"), Getty Properties Corp. ("Getty Properties"), and Getty Realty Corp. ("Getty Realty") (collectively, "Getty"), as well as Leemilt's Petroleum, Inc. ("Leemilt's"), and The Tyree Organization, Ltd. ("Tyree") have moved pursuant to Rules 12(b)(1), 12(b)(6), and 56(b) of the Federal Rules of Civil Procedure to dismiss the complaint in this action. For the reasons stated herein, the motion is granted in part, and denied in part.
The Parties
Plaintiff Kara Holding Corp. ("Kara") is a New York corporation with its principal place of business in Bronx, New York.
Defendant Getty Petroleum is a corporation authorized to do business in the State of New York, with business locations in Bronx, New York and Manhattan.
Defendant Getty Properties is a corporation authorized to do business in the State of New York, with a business location in Manhattan.
Defendant Getty Realty is a corporation authorized to do business in the State of New York, with a business location in Manhattan.
Defendant Leemilt's is a corporation authorized to do business in the State of New York, with business locations in Jericho, New York and Manhattan.
Defendant Tyree is a corporation authorized to do business in the State of New York with business locations in Brookfield, Connecticut and Farmingdale, New York.
*304 Facts
The following facts are undisputed by the parties, except where otherwise indicated.
The instant action arises out of a petroleum spill that occurred on April 2, 1997 at Getty Service Station # 329 (the "Getty station" or the "station"), a gas station located in Bronx, New York. Plaintiff, the owner of a building situated adjacent to the gas station, contends that a gasoline spill or spills at the station have resulted in considerable soil and groundwater contamination, as well as contamination of the Bronx River which is located only a short distance away. Defendants are, variously, the alleged owner(s) and operator(s) of the Getty Station, or related corporate entities though the parties apparently disagree as to which corporate entities are actually responsible for operation of the Getty station.
Plaintiff's building is rented by the New York City Human Resources Administration (the "HRA"). Located at the building is an HRA office known as the "Colgate Learning Center," which is responsible for the administration of public assistance programs.
On April 2, 1997, the Colgate Learning Center was evacuated because of gasoline vapors attributable to petroleum spilled at the Getty station. According to Defendants, the discharge of petroleum at the gas station was halted on April 2nd, and remediation of the spill began in earnest on that very same day when a response team from defendant Tyree was dispatched to the gas station and began the removal of contaminants.
By letter dated November 19, 1997, New York State's Department of Environmental Conservation (the "DEC") contacted Scott Hanley of Getty Properties to obtain Getty's voluntary commitment to "cleanup and remove" the petroleum contamination at the gas station. (Hanley Aff.Ex. B.) Enclosed with the letter was a proposed Stipulation Agreement (the "Stipulation") that set a schedule for Getty's remediation efforts and allowed cleanup activities to proceed without the need for additional DEC permits. By signing the stipulation, the letter informed Hanley, Getty was not admitting any liability under New York's Navigation Law or waiving any defenses it might have to liability. By the same token, however, the letter informed Hanley that Getty's agreement to remedy the petroleum discharge itself would not affect the DEC's ultimate right to pursue an action under the Navigation Law or New York's Environmental Conservation Law.
On December 10, 1997, Getty Realty signed the Stipulation on behalf of "Getty" the generic entity listed on the Stipulation's caption. By its own terms, the Stipulation was. "equivalent to an order pursuant to [New York's] ECL §§ 17-0303 and a directive pursuant to NL § 176 and is enforceable as such." (Hanley Aff.Ex. B.) Getty's cleanup efforts were to be conducted in accordance with a "Corrective Action Plan" setting forth a timetable for the cleanup of petroleum wastes.
By complaint dated December 9, 1998, the DEC, nevertheless, commenced an administrative enforcement action concerning groundwater and soil contamination at the Getty station and adjoining properties. The complaint asserted, inter alia, violations of New York's Environmental Conservation Law and Navigation Law, and sought declaratory relief, injunctive relief, and civil penalties. Named as defendants in that complaint were Getty Petroleum, Getty Realty, and Getty Petroleum Corp., a predecessor of defendant Getty Properties.
According to the Defendants, the DEC has diligently prosecuted that enforcement action, and a pre-hearing conference was conducted to that end on January 25, 1999. In an affidavit submitted by Defendants, a representative of Getty Properties with oversight responsibility for the remediation of petroleum contamination at the Getty station also states that Getty and the DEC are currently engaged in negotiations *305 expected to lead to a "consent order based upon a revised corrective action plan to be approved by the DEC." (Hanley Aff. ¶ 15.) Papers submitted by defendants also assert that remediation activities at the Getty station continue to the present day.
While plaintiff Kara has asserted that the petroleum contamination at issue in this action has its origins in a discrete spill event in April of 1997, it also claims that the petroleum hydrocarbon wastes released during that spill have yet to be fully cleaned, and that additional spill events have occurred since April of 1997. According to the papers submitted by Kara, the Colgate Learning Center has been evacuated on multiple occasions over the past several years as a result of gasoline vapors attributable to the Getty station's spilled petroleum. These vapors, which emanate from the basement of Kara's building, have resulted in repeated complaints by HRA employees, and have required responses from the New York City Fire Department and a "HAZMAT" unit. According to Kara, groundwater contaminated by petroleum and petroleum products enters the cellar of the Colgate Learning Center periodically, creating a potentially explosive petroleum water and vapor condition. In late spring of 1998, samples taken from wells on the Getty property revealed elevated levels of petroleum constituents in the groundwater circulating beneath the Getty station.
The complaint in this action was filed on January 14, 1999, and asserts federal causes of action under the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Solid Waste Amendments of 1984 (referred to collectively as the "RCRA"), 42 U.S.C. § 6901 et seq., and the Clean Water Act (the "CWA"), 33 U.S.C. § 1251 et seq., as well as various state claims for trespass, nuisance, negligence, gross negligence, intentionally wrongful conduct, indemnity, restitution, and violations of New York's Navigation Law and Education Law. For its federal RCRA and CWA claims, Kara requests injunctive relief, declaratory relief, the imposition of civil penalties, and an award of both costs and attorneys' fees.
Defendants filed the instant motion on March 22, 1999. Oral argument was heard on April 14, 1999, at which time the motion was deemed fully submitted.
Discussion
Summary judgment is appropriate only where the evidence is such that a reasonable jury could not return a verdict in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-51, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Under Rule 56(c), Fed.R.Civ.P., it shall be rendered "forthwith 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." As the Second Circuit has explained:
"As a general rule, all ambiguities and inferences to be drawn from the underlying facts should be resolved in favor of the party opposing the motion, and all doubts as to the existence of a genuine issue for trial should be resolved against the moving party." However, where the nonmoving party will bear the burden of proof at trial, Rule 56 permits the moving party to point to an absence of evidence to support an essential element of the nonmoving party's claim.
Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir.1991) (quoting Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir.1988) (internal citations omitted)).
Defendants have asserted two basic grounds for dismissal. First, Defendants assert that the DEC's commencement of an administrative enforcement action bars Kara's suit under the RCRA, and that any claim brought under the aegis of the CWA is similarly precluded by New York's diligent prosecution of that administrative action. Second, Defendants contend that *306 Kara has failed to establish that any gasoline spill(s) at the Getty station have resulted in an imminent and substantial endangerment to health or the environment, as is required by section 7002(a)(1)(B) of the RCRA. These alternate grounds for dismissal shall be addressed in turn.
I. Kara's RCRA and CWA Claims Are Not Precluded by the DEC's Enforcement Activities
Under the citizen suit provisions of the RCRA, "`any person' may commence a civil action on his own behalf" either "against any person ... who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order" effective pursuant to the RCRA, 42 U.S.C. § 6972(a)(1)(A), or "against any person ... who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment." 42 U.S.C. § 6972(a)(1)(B). This right to sue as a private attorney general has its limitations, however. In addition to a whole host of procedural restrictions not specifically at issue in the present litigation, including the requirement that potential litigants provide formal notice of alleged violations or endangerments in advance of filing suit, see 42 U.S.C. § 6972(b)(1)(A), (b)(2)(A), the RCRA provides that no action may be commenced by a private litigant under subsection (a)(1)(A) for a violation:
if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States or a State to require compliance with such permit, standard, regulation, condition, requirement, prohibition, or order.
42 U.S.C. § 6972(b)(1)(B). Likewise, no action may be commenced by a private litigant under subsection (a)(1)(B) for an imminent and substantial endangerment:
if the State, in order to restrain or abate acts or conditions which may have contributed or are contributing to the activities which may present the alleged endangerment
(i) has commenced and is diligently prosecuting an action under subsection (a)(1)(B) of this section;
(ii) is actually engaging in a removal action under section 104 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 [42 U.S.C. § 9604]; or
(iii) has incurred costs to initiate a Remedial Investigation and Feasibility Study under section 104 ... and is diligently proceeding with a remedial action under that Act....
42 U.S.C. § 6972(b)(2)(C).
Defendants press that dismissal is required pursuant to section 6972(b)(2)(C), in that the DEC had already commenced an administrative enforcement action by the time Kara filed the complaint in the instant action, and "Getty" had also previously entered into a Stipulation agreeing to remedy the petroleum contamination. In their papers, Defendants contend that the DEC enforcement action which asserts causes of action for violations of state environmental laws and seeks injunctive relief as well as significant civil penalties precludes Kara's RCRA claim. Defendants also suggest that the "word `action' as used in the [RCRA] statute does not appear to connotate [sic] a legal action but merely activities to remove the contamination." (Defs.' Mem.Law Supp.Mot. Summ.J. at 4 n. 2.)
A review of the cases specifically interpreting section 6972(b) reveals that Defendants have either neglected to research and read applicable caselaw or simply decided to avoid bringing contrary authority to the attention of the Court, and consequently have required both the Court and opposing counsel to undertake research that could well have been avoided.
*307 Under the clear language of 42 U.S.C. § 6972(b)(1)(B), the only state action capable of precluding a citizen suit under section 6972(A)(1)(A) is a "civil or criminal action in a court." This language does not afford any preclusive effect to a state administrative action.
Claims brought under section 6972(A)(1)(B) are admittedly governed by less straightforward preclusionary language. Yet, most courts that have focused any attention on 42 U.S.C. § 6972(b)(2)(C)(i) have held as a matter of course that state administrative "actions" are not covered by its terms. See Gilroy Canning Co. v. California Canners & Growers, 15 F. Supp. 2d 943, 946-47 (N.D.Cal.1998) (state administrative actions do not preclude RCRA claims under terms of section 6972(b)(2)(C)); Echternach v. D.H. Martin Petroleum Co., No. 97 C 3802, 1997 WL 627646, at *2-3 (N.D.Ill. Sept.30, 1997) ("[S]ubsection (b)(2)(C)(i) only bars (a)(1)(B) claims where a state has brought an action in court."); Goe Engineering Co. v. Physicians Formula Cosmetics, Inc., No. CV 94-3576-WDK, 1997 WL 889278, at *8 (C.D.Cal. June 4, 1997) ("[W]hile Congress could have stated its intent more clearly, this Court holds that subsection (b)(2)(C)(i) only prohibits (a)(1)(B) claims where a state has brought an action in court."); Orange Env't, Inc. v. County of Orange, 860 F. Supp. 1003, 1024-25 (S.D.N.Y.1994) (same). Given the language of section (b)(2)(C)(i), such an action must also specifically press claims under the RCRA. See Goe Engineering, 1997 WL 889278, at *9 n. 6 ("[E]ven if section (b)(2)(C)(i) were read to preclude citizen suits where the state has taken `administrative' rather than `court' action, the action must be taken `under subsection (a)(1)(B)....' There is no evidence that the actions taken by the RWQCB have been taken under RCRA rather than under state law."); Hudson Riverkeeper Fund, Inc. v. Harbor at Hastings Assocs., 917 F. Supp. 251, 256 (S.D.N.Y.1996) (observing that language of subsection (b)(2)(C)(i) "seems to suggest that any state action, to qualify as barring the RCRA action, must be brought under the act itself," but finding that action in state court of general jurisdiction "is the equivalent of one brought under the RCRA").
Thankfully, the instant motion does not require resolution of the more thorny questions raised by the language of section 6972(b)(2)(C), as state administrative actions simply do not constitute "actions" under subsection (b)(2)(C)(i), New York State had not engaged in any "removal action" under the meaning of subsection (b)(2)(C)(ii) as of the filing of Kara's suit, c.f. Orange Env't, 860 F.Supp. at 1026-28 (discussing "removal actions" under meaning of statute), and none of the other preclusionary provisions of 42 U.S.C. § 6972(b) apply to the facts of this case. See Echternach, 1997 WL 627646, at *2-3 (holding that state agency's issuance of administrative "violation notice letter" to RCRA defendant allegedly responsible for gasoline spill did not constitute bar to citizen suit under subsections (b)(2)(C)(i)-(iii); subsection (b)(2)(C)(i) requires state action to be prosecuted in court, and subsections (b)(2)(C)(ii)-(iii) "state precise administrative actions taken pursuant to a specific section of CERCLA").
Private rights of action under the CWA are governed by a similar, though not identical, statutory regime. Like the RCRA, citizen suits are only intended to allow private attorneys general to fill the gaps in public enforcement endeavors, and are oftentimes conditioned upon the failure of federal and state officials to exercise their own enforcement responsibilities. See Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., 484 U.S. 49, 60, 108 S. Ct. 376, 98 L. Ed. 2d 306 (1987). Under the CWA, "any citizen may commence a civil action on his own behalf":
against any person ..; who is alleged to be in violation of (A) an effluent standard or limitation under this chapter or (B) an order issued by the Administrator *308 or a State with respect to such a standard or limitation....
33 U.S.C. § 1365(a)(1). As with the parallel statutory scheme governing RCRA suits under 42 U.S.C. § 6972(a)(1)(A), however, no private action under section 1365(a)(1) may be brought "if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States, or a State to require compliance." 33 U.S.C. § 1365(b)(1)(B). The Second Circuit has specifically considered whether a state administrative action qualifies as an "action in a court" under this language and resolved that it does not. See Friends of the Earth v. Consolidated Rail Corp., 768 F.2d 57, 62 (2d Cir.1985) ("The Clean Water Act citizen suit provision unambiguously and without qualification refers to an `action in a court of the United States, or a State.' ... It would be inappropriate to expand this language to include administrative enforcement actions."); see Jones v. City of Lakeland, 175 F.3d 410, 414 (6th Cir.1999) (state administrative proceedings against polluter "unquestionably are not actions taken in court as contemplated by Congress").
An additional layer of complexity is added by 33 U.S.C. § 1319(g)(6)(A)(ii), which mandates in part that violations "with respect to which a state has commenced and is diligently prosecuting an action under a state law comparable to this subsection ... shall not be the subject of a civil penalty action under subsection (d) of this section or section 1321(b) of this title or section 1365 of this title."
There is a wide range of judicial opinion concerning the parameters of administrative preclusion under subsection (g)(6)(A)(ii), especially insofar as the diligence of state prosecution and comparability of state legal regimes are concerned. Nevertheless, Defendants' contention that a DEC administrative action can preclude certain CWA claims is perhaps most accurate in the context of section 1365(g)(6)(A), in that preclusive effect is not only accorded to actions in state courts. See Jones, 175 F.3d at 415 (state administrative enforcement proceedings under comparable state law covered by language of section 1319(g)(6)(A)); Orange Env't, 860 F.Supp. at 1014-16 (DEC's diligent prosecution of administrative action precludes suit for civil penalties under CWA; state environmental laws and regulatory scheme comparable to federal regulatory regime); Saboe v. State of Oregon, 819 F. Supp. 914, 918-19 (D.Or.1993) (Oregon Division of State Lands' final administrative consent order fining Oregon Department of Transportation an "action" under comparable state law precluding plaintiffs' suit).
A qualifying administrative action appears to operate as a bar only to civil penalty actions, and not CWA claims seeking merely declaratory or injunctive relief. See Sierra Club v. Hyundai America, Inc., 23 F. Supp. 2d 1177, 1179 (D.Or.1997); Orange Env't, 860 F.Supp. at 1017-18; Coalition for a Liveable West Side, Inc. v. New York City Dep't of Envtl. Protection, 830 F. Supp. 194, 196 (S.D.N.Y.1993); New York Coastal Fishermen's Assoc. v. New York City Dep't of Sanitation, 772 F. Supp. 162, 169 (S.D.N.Y.1991). Setting this issue aside, however, additional language in the CWA makes clear that the limitations of section 1319(g)(6)(A) do not apply with respect to violations for which:
notice of an alleged violation of section 1365(a)(1) of this title has been given in accordance with section 1365(b)(1)(A) of this title prior to commencement of an action under this subsection and an action under section 1365(a)(1) of this title with respect to such alleged violation is filed before the 120th day after the date on which such notice is given.
33 U.S.C. § 1319(g)(6)(B).
Notice was given by Kara of its intent to sue Defendants on or about October 2, 1998, and the form of that notice has not been challenged. The complaint in this action was filed on January 14, 1999, less than 120 days thereafter. Consequently, while the DEC enforcement action *309 was initiated prior to the commencement of the instant lawsuit, by the very terms of the governing statute the provisions of section 1319(g)(6)(A) do not apply. See Louisiana Envtl Action Network, Inc. v. Evans Cooperage Company, Inc., No. Civ.A. 95-3002, 1997 WL 824310, at *5 (E.D.La. Sept.30, 1997); Sierra Club, 23 F.Supp.2d at 1179, 1181-82; Ohio Envtl Council v. Vari-Seal Mfg. Corp., No. C883299, 1989 WL 106710, at *1 (N.D.Ohio Apr. 13, 1989).
Defendants have attempted to bolster their position that state administrative actions generally preclude citizen suits by invoking Meghrig v. KFC Western, 516 U.S. 479, 116 S. Ct. 1251, 134 L. Ed. 2d 121 (1996), in which the Supreme Court stated that "no citizen suit can proceed [under 42 U.S.C. § 6972(a)(1)(B)] if either the EPA or the State has commenced, and is diligently prosecuting, a separate enforcement action." Id. at 486, 116 S. Ct. 1251. Setting aside the fact that the Meghrig case did not present the Court with any question whatsoever concerning the proper interpretation of 42 U.S.C. § 6972(b)(2)(B), and that the portion of text selected by Defendants is therefore dicta, the text itself does not yield any definite conclusions about the meaning of "enforcement action." Nowhere in the Meghrig decision, for example, does the Supreme Court ever indicate that such an action may be an enforcement action in an administrative arena, as opposed to an enforcement action in the courts alone.
Meghrig did not alter the entire RCRA and CWA statutory regime. Defendants' motion is denied insofar as it seeks dismissal of the instant action because of the DEC's administrative activities.
II. Defendants' Motion for Summary Judgment on Kara's RCRA Claim is Granted in Part, and Denied in Part
Defendants next press that dismissal of Kara's RCRA claim is required because the discharge of petroleum at the Getty station was "halted on the day it began." (Defs.' Mem.Supp.Mot.Summ.J. at 5.) According to Defendants, plaintiff Kara is only entitled to recovery on their RCRA claim if there is, at present, an "imminent and substantial" endangerment to health or the environment. Because defendant Tyree has been remediating and continues to clean the petroleum contamination in the vicinity of the Getty station, Defendants claim that they are therefore entitled to summary judgment.
While RCRA is a "comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste," Meghrig, 516 U.S. at 483, 116 S. Ct. 1251, it is "not principally designed to effectuate the cleanup of toxic waste sites or to compensate those who have attended to the remediation of environmental hazards." Id. Consequently, while the RCRA contains a private attorney-general provision allowing private citizens to sue for relief, as interpreted by the courts it does not allow suits by private citizens to recover for purely past damages or to recover costs already incurred by a plaintiff to respond to an environmental hazard of the defendant's creation. See id. at 484-88, 116 S. Ct. 1251. As a result, any claims that Kara might have for past costs or damages cannot be pursued under the RCRA. To the extent that Kara's RCRA prayer for relief requests civil penalties for past events and "declaratory judgment" for "all remedial costs incurred" as a consequence of wastes discharged by the Getty station, those portions of the complaint shall therefore be dismissed as a matter of law. (Compl. ¶¶ 49, 51.)
To successfully prosecute a claim under 42 U.S.C. § 6972(a)(1)(B), a RCRA plaintiff must ultimately demonstrate that:
(1) the defendant was or is a generator or transporter of solid or hazardous waste or owner or operator of a solid or hazardous waste treatment, storage or disposal facility, (2) the defendant has contributed or is contributing to the *310 handling, storage, treatment, transportation, or disposal of solid or hazardous waste, as defined by RCRA, and (3) that the solid or hazardous waste in question may pose an imminent and substantial endangerment to health or the environment.
Prisco v. A & D Carting Corp., 168 F.3d 593, 608 (2d Cir.1999). Defendants do not contend that petroleum is not considered a hazardous waste under the RCRA, or gainsay that a petroleum spill at the Getty station could result in RCRA liability for an owner, operator, or transporter. See generally Mutual Life Ins. Co. v. Mobil Corp., No. CIVA96CV1781RSP/DNH, 1998 WL 160820, at *1-3, 5 (N.D.N.Y. Mar.31, 1998) (denying defendant's motion to dismiss RCRA and CWA claims arising from gasoline spill); Singer v. Bulk Petroleum Corp., 9 F. Supp. 2d 916, 920 (N.D.Ill.1998) (denying defendant's motion to dismiss RCRA claim arising out of petroleum leak, as complaint "specifically allege [d] that petroleum products have migrated through the soil, that petroleum contamination remains in the soil and groundwater near the site, and that such contamination requires a response"); United States v. Hill, No. 95-CV-1716 (RSP/GJD), 1998 WL 278291, at *3-6 (N.D.N.Y. May 20, 1998) (granting government's motion for summary judgment on RCRA claim against operator of gas station, as leakage of petroleum into surrounding soil constitutes disposal of solid waste under RCRA); Aurora Nat'l Bank v. Tri Star Mktg., Inc., 990 F. Supp. 1020, 1027 (N.D.Ill.1998) (leakage of petroleum from underground storage tanks constitutes "solid waste" within meaning of RCRA). Rather, they contend that the specific wastes at issue in this case do not pose any imminent and substantial endangerment to health or to the environment.
The operative word in section 6972(a)(1)(B) is "may," however, and a plaintiff "need not establish `an incontrovertible "imminent and substantial" harm to health and the environment.'" Orange Env't, 860 F.Supp. at 1029 (quoting Gache v. Harrison, 813 F. Supp. 1037, 1044 (S.D.N.Y.1993)). A finding of immanency also does not demand a demonstration that the actual harm will occur immediately. As the Supreme Court held in Meghrig, the language of the RCRA "`implies that there must be a threat which is present now, although the impact of the threat may not be felt until later.'" 516 U.S. at 486, 116 S. Ct. 1251 (quoting Price v. United States Navy, 39 F.3d 1011, 1019 (9th Cir.1994)).
Moreover, as the Second Circuit emphasized in Connecticut Coastal Fishermen's Assoc. v. Remington Arms Co., 989 F.2d 1305 (2d Cir.1993), it is the endangerment or harm to the environment and not further discharge of pollutants that must be threatened for a claim to be successfully prosecuted under section 6972(a)(1)(B):
An imminent hazard citizen suit will lie against any "past or present" RCRA offender "who has contributed to or who is contributing" to "past or present" solid waste handling practices that "may present an imminent and substantial endangerment to health or he environment." 42 U.S.C. § 6972(a)(1)(B). Therefore, under an imminent hazard citizen suit, the endangerment must be ongoing, but the conduct that created the endangerment need not be.
Id. at 1316. The language of this section of the RCRA is expansive, and is "`intended to confer upon the courts the authority to grant affirmative equitable relief to the extent necessary to eliminate any risk posed by toxic wastes.'" Dague, 935 F.2d at 1355 (quoting United States v. Price, 688 F.2d 204, 213 (3d Cir.1982)). In the present case, Kara therefore need not show that the Getty station continues to leak gasoline from its underground tanks, continued to be in violation of applicable environmental regulations at the time the instant action was commenced, or is even likely to do so in the future in order to recover under section 6972(a)(1)(B) though such a showing could well be required *311 for Kara to prevail on any claims under 42 U.S.C. § 6972(a)(1)(A) or the CWA.[1] Rather, Kara need only demonstrate that the petroleum previously spilled at the Getty station has not been satisfactorily removed, and that the petroleum that remains in the Getty station's soil and the surrounding area may pose an imminent and substantial endangerment. See Mutual Life Ins. Co., 1998 WL 160820, at *3.
Though the instant action has its genesis in a series of events following a discrete spill event in April of 1997, Kara's position throughout has been that hazardous contaminants attributable to that spill continue to manifest themselves in and around its property. Petroleum products and vapors have repeatedly appeared in the basement of plaintiff's building, requiring the evacuation of building occupants.
In opposition to Defendants' motion, Kara has also submitted the affidavit of Elliot J. Shapiro ("Shapiro"), a licensed professional engineer. According to Shapiro, the discharge of gasoline from the Getty station has resulted in an ongoing "imminent and substantial endangerment to health or the environment." (Shapiro Aff. ¶ 8.) Shapiro bases his analysis, in part, on groundwater testing conducted at the Getty station in April and May of 1998 revealing "excessive hazardous petroleum groundwater contaminants," (Shapiro Aff. ¶ 9), and his understanding that "as of January 14, 1999 no meaningful remediation of the [Getty] site had commenced" though it is not at all clear upon what basis this understanding concerning the status of remediation is premised. Id. Those tests revealed levels of benzene, tolulene, ethyl-benzene, xylenes, and MTBE far in excess of the DEC's groundwater standards and, according to Shapiro, the results could be expected to be comparable to results obtained when testing adjacent to or underneath the Colgate Learning Center.
Defendants challenge the Shapiro affidavit, offering in reply an affidavit from Steven Gustems, an environmental scientist employed by defendant Tyree. According to Gustems, the Shapiro affidavit contains a host of deficiencies, the most significant of which is Shapiro's failure to base his opinion on any recent data collected from the Kara property itself. Given that Bronx groundwater is not used for bathing or drinking, Gustems states, only aboveground air testing results could establish a present danger to human health. Nevertheless, while Defendants press that the operators of the Getty station have been making sincere efforts to remediate any pollution attributable to gasoline spillage, *312 nowhere do they ever claim that the cleanup is complete.
According to Kara, discovery has yet to even commence in this action, and "[f]urther access to information would be necessary for Kara to pursue identifying additional violations relating to the Getty station." (Kaming Aff. ¶ 19.) Shapiro has stated that greater access to information is necessary for him to draw any further conclusions about conditions at the Getty station and adjacent properties. Given the previous levels of groundwater contamination at the Getty station, as reflected in the 1998 tests, and the repeated incidents at the Colgate Learning Center involving petroleum vapors, allowing discovery to proceed in this action is appropriate in the face of the conflict in expert testimony.
Even where jurisdiction is properly exercised ab initio over certain environmental claims, a plaintiff's ability to prosecute such claims may at times become compromised by a defendant's post-complaint compliance efforts. Partial dismissal on the ground of mootness is not easily obtained, however, and a defendant's empty "protestations of repentance and reform" do not themselves provide grounds for dismissal. Gwaltney, 484 U.S. at 66-67, 108 S. Ct. 376. Given the parties' stark disagreement over the status of remediation at the Getty station and the rather thin nature of the record currently before the Court, summary judgment on Kara's RCRA claim is not warranted at this time.
Conclusion
For the reasons set forth above, Defendants' motion is granted in part, and denied in part. However, leave is granted for Defendants to renew their motion for summary judgment concerning Plaintiff's RCRA claim within thirty (30) days of the close of discovery in this action, subject to further application by the parties.
It is so ordered.
NOTES
[1] In Gwaltney, 484 U.S. at 56-59, 108 S. Ct. 376, the Supreme Court held that the language of 33 U.S.C. § 1365(a)(1) does not confer federal jurisdiction over citizen suits for "wholly past violations," and that a plaintiff bringing suit under that provision of the CWA must therefore "allege a state of either continuous or intermittent violation that is, a reasonable likelihood that a past polluter will continue to pollute in the future." Id. at 57, 108 S. Ct. 376. Because the language of section 1365(a)(1) is analogous to that of 42 U.S.C. § 6972(a)(1)(A), the logic of Gwaltney applies equally to claims brought under that portion of the RCRA. See Gwaltney, 484 U.S. at 57 & n. 2, 108 S. Ct. 376; Connecticut Coastal Fishermen's Assoc., 989 F.2d at 1315.
As the Second Circuit explained in Connecticut Coastal Fishermen's Association, a plaintiff bringing suit under the CWA: must show that defendant's violations continued subsequent to the date the complaint was filed, or present proof from which a trier of fact could find a continuing likelihood that violations would recur.
Id. at 1311. As far as the CWA is concerned, the "critical time for determining whether there is an ongoing violation is when the complaint was filed." Id.
Be that as it may, Defendants have not moved to dismiss Kara's CWA claims on any basis other than that the DEC's enforcement activities preclude Kara's citizen suit. Furthermore, while Defendants have moved to dismiss Kara's RCRA claim insofar as Kara has failed to establish an imminent and substantial harm to health or the environment as is required by section 6972(a)(1)(B) it has not contended that Kara's inability to demonstrate continuing RCRA violations at the Getty Station forecloses liability under section 6972(a)(1)(A). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3953866/ | This is an appeal from a temporary injunction granted by the district judge in Chambers enjoining and restraining appellants from removing or in any manner molesting a building located upon property formerly belonging to them but which had been condemned for highway purposes. In connection with their motion to dissolve the temporary injunction appellants filed an answer to the allegations of the petition and, upon grounds alleged in their answer, they sought, by way of cross-action, an injunction against appellees and the sheriff of Dallam County restraining them from executing a writ of possession which had been placed in the hands of the sheriff.
The case made by the petition, the motion to dissolve and the answer and cross-action was set for hearing on the 25th of April, 1939. On that day, the record shows, all parties appeared and announced ready for trial. The court heard the pleadings, the evidence and argument of counsel and, after duly considering the same, rendered judgment denying the motion to dissolve the injunction theretofore granted, denying also the application for injunction contained in appellants' cross-action and extending the original injunction until the further orders of the court. It is from that judgment this appeal is prosecuted.
The record is before us without a statement of facts, assignments of error or briefs and we are not apprised, therefore, of the nature of appellants' complaint of the judgment. We have examined the transcript, including the pleadings, judgments and other documents shown therein and we do not find anything in the record which could be considered fundamental error. The rule is well established by the decisions that the granting or refusing of a temporary injunction is a matter that rests within the sound discretion of the trial court and, unless it clearly appears from the record that there has been an abuse of that discretion, the action of the trial court will not be disturbed by an appellate tribunal. Harding v. Pearson Co., Tex.Com.App., 48 S.W.2d 964; Southland Life Ins. Co. v. Egan, 126 Tex. 160, 86 S.W.2d 722; City of Farmersville v. Texas-Louisiana Power Co., Tex. Civ. App. 33. S.W.2d 271, 272; Woods v. Humber, Tex. Civ. App. 282 S.W. 834; City of Waco v. Grimes, Tex. Civ. App. 279 S.W. 312.
Appellees' pleadings were amply sufficient to support the relief granted and, in the absence of a statement of facts, we have no way of knowing what was shown by the evidence. The record shows that the case was presented by both pleadings and evidence and we must presume the evidence was sufficient to support the judgment rendered by the trial court.
We find no error revealed by the record and the judgment of the court below will be affirmed. *Page 1106 | 01-03-2023 | 07-06-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1732225/ | 606 S.W.2d 867 (1980)
James Russell GANT, Appellant,
v.
The STATE of Texas, Appellee.
No. 59034.
Court of Criminal Appeals of Texas, Panel No. 3.
September 17, 1980.
Rehearing Denied November 12, 1980.
*868 David B. Ziegler, Houston (Court-appointed), for appellant.
Carol S. Vance, Dist. Atty., James C. Brough, and Connie B. Williams, Asst. Dist. Atty., Houston, Robert Huttash, State's Atty., Austin, for the State.
Before ODOM, TOM G. DAVIS and CLINTON, JJ.
*869 OPINION
CLINTON, Judge.
This is an appeal from a conviction for the felony theft offense recently created by enactment of V.T.C.A. Penal Code, § 31.03(d)(4)(C),[1] in which the State had alleged a prior robbery offense for purposes of punishing appellant as a repeat offender under the provisions of V.T.C.A. Penal Code, § 12.42(a);[2] the punishment assessed is not less than two nor more than twenty years[3] confinement.
The evidence adduced at trial reflects that Valerie Tullis, an employee of Eckerd Drug Store, observed a black man identified as appellant, placing a stereo unit in a shopping cart, on August 28, 1975. Appellant pushed the shopping cart to the railing at the front of the store and walked away. Tullis then observed a tall white man outside the rail reach over and take the stereo from the cart, whereupon she summoned the manager, Paul Tagliabue.
Tagliabue testified that he saw appellant leave the store; upon following him out, the witness observed appellant enter an automobile driven by a white male, and observed a Lloyd's stereo unit sitting in the back seat. Tagliabue was able to see the box containing the stereo, and the number "353" written on it, which he testified was his store number. According to Tagliabue, the retail value of the stereo unit was $149.95. Tagliabue made a notation of the license number of the car, a white Buick LeSabre, then called the police.
On August 31, 1975, Officer G. W. Bailey recognized a white Buick LeSabre and its license number as wanted, and stopped it. As appellant stopped the car, his passenger exited and ran; appellant then attempted to run, but was apprehended. Upon being asked his name, appellant stated it was James Gibe. Appellant was later identified in a corporeal lineup by both Tullis and Tagliabue.
Proof of the prior misdemeanor theft convictions was established through the testimony of a Deputy District Clerk, certified judgments and sentences, Harris County *870 jail cards and the testimony of a fingerprint expert from the Harris County Sheriff's Office.
Appellant now complains of the trial court's failure to instruct the jury on the law of circumstantial evidence; there is no evidence, appellant contends, which connects him directly with the removal of the stereo unit from the store, or to show that he had any knowledge of the unit's being stolen.
The distinction between direct and circumstantial evidence is that the former directly demonstrates the ultimate fact to be proved, while the latter is direct proof of a secondary fact which, by logical inference, demonstrates the ultimate fact to be proved. Richardson v. State, 600 S.W.2d 818 (Tex.Cr.App.1980); Oliver v. State, 551 S.W.2d 346 (Tex.Cr.App.1977); Crawford v. State, 502 S.W.2d 768 (Tex.Cr.App.1973).
The State clearly adduced direct evidence that appellant and his confederate, Charles Cloud, exercised control over[4] the stereo unit in issue without the consent of the owner. Compare Mulchahey v. State, 574 S.W.2d 112 (Tex.Cr.App.1978). Furthermore, the intent to deprive the owner of the property was established by an eyewitness who testified that appellant and Cloud drove away in a car in which the stereo was clearly visible. And finally, the testimony of Valerie Tullis constitutes direct evidence of the aid[5] appellant provided his confederate in placing the stereo in a shopping cart and abandoning it near the front rail of the store. So, the State did not rely upon inferences or circumstances in order to establish the allegations contained in the indictment. See Ransonette v. State, 550 S.W.2d 36 (Tex.Cr.App.1977). Thus, no error attended the trial court's refusal to instruct the jury on the law of circumstantial evidence. This ground of error is overruled.
Appellant's second and third grounds of error assert that proof of the two prior theft convictions alleged as elements of the felony offense for which appellant was on trial, should have been excluded because appellant neither was represented by counsel, nor had waived his right to counsel at the time those convictions were obtained.
The record before us contains the judgments and sentences in Cause Numbers 3001P and 305459, introduced by the State in order to prove the "two previous theft convictions" element of felony theft alleged under § 31.03(d)(4)(C).
The judgment in each cause recites that appellant waived counsel. Outside the presence of the jury, appellant testified that he did not remember waiving counsel in either case.
This testimony was clearly insufficient to overcome the presumption of regularity of the recitation of waiver of counsel reflected upon the judgments. Martinez v. State, 504 S.W.2d 897 (Tex.Cr.App.1974). These grounds of error are without merit.
By his fourth ground of error, appellant alleges that the trial court committed fundamental error in allowing the jury to return verdicts which were not "general"[6] at the guilt-innocence phase of trial.
At the guilt stage, the trial court charged the jury, applying the law of § 31.03(a)(2) *871 and (b)(1), supra, (see n. 1, ante), to the facts of the case, and instructed that a finding of guilt first be made pursuant to that consideration. At the bottom of the verdict form it was recited:
In the event you find the defendant `guilty' beyond a reasonable doubt as alleged in the indictment then and only in that event will you answer the following question, otherwise, you are not to answer the following question:
Based upon the evidence do you find beyond a reasonable doubt that James Russell Gant, the defendant in this case, is the same person who is alleged to have been convicted on the 16th day of December, 1971, in Cause No. 300019 in the County Criminal Court of Law No. 2 in Harris County, Texas, of the offense of misdemeanor shoplifting and is James Russell Gant, the defendant in this case the same person convicted on the 20th day of December, 1971, in Cause No. 305459 in the County Criminal Court of Law No. 2, in Harris County, Texas, of the offense of misdemeanor shoplifting?
ANSWER: "We do" or "We do not."
To this the jury replied: "We do."
Appellant offered no objection to this form of the verdict and now contends that "the failure of the Court to incorporate the prior convictions alleged for jurisdictional purposes into the main body of the charge was fundamental error" and requests that this Court "hold that the jury found [him] merely guilty of the misdemeanor offense of theft."
In Diamond v. State, 530 S.W.2d 586 (Tex.Cr.App.1975), it was held that § 31.03(d)(4)(C), supra, created a new offense of a felony grade and vested the District Court with jurisdiction. The elements of this theft offense are the same as alleging other theft offenses,[7] but the value of the property stolen must be any amount under $200,[8]and the defendant has been previously convicted two or more times of any grade of theft." As is explicated by the Practice Commentary to § 31.03, supra, the intent in creating this new offense, is to punish a third theft offense, though "petty," as a felony, irrespective of the value of the property, so long as it is under $200.
Thus, we agree with appellant, that in instructing the jury in a trial for an offense alleged under § 31.03(d)(4)(C), the prior theft offenses, as jurisdictional elements of the offense alleged, must be included in the body of the main charge before the jury is authorized to make a general finding of guilt, and we so hold.[9]
However, we are unable to agree that the form of the charge and verdict *872 concerning guilt in the instant case constituted error of a fundamental nature which obviated the voice of objection by the accused. Our review of the record as a whole convinces us that the trial court's error in this regard was neither calculated to injure the rights of the accused, nor deny him a fair and impartial trial, absent an objection.[10] Article 36.19, V.A.C.C.P.
Appellant's fourth ground of error is overruled.
By way of an untimely supplemental brief, appellant has raised an additional ground of error alleging that the trial court's instruction to the jury on the law of parties constituted a comment by the court on the weight of the evidence. Appellant cites no authority for this proposition and we have found none.
Accordingly, the judgment of conviction is affirmed.
NOTES
[1] At the time of commission of the offense alleged, § 31.03, supra, provided in part relevant to the instant case:
"(a) A person commits an offense if, with intent to deprive the owner of property:
* * * * * *
(2) he exercises control over the property, other than real property, unlawfully.
(b) ... [E]xercising control over property is unlawful if:
(1) the actor ... exercises control over the property without the owner's effective consent;...
* * * * * *
(d) An offense under this section is:
* * * * * *
(4) a felony of the third degree if:
* * * * * *
(C) the value of the property stolen is less than $200 and the defendant has been previously convicted two or more times of any grade of theft; ...."
See Foster v. State, 603 S.W.2d 879 (Tex.Cr. App.1980); Diamond v. State, 530 S.W.2d 586 (Tex.Cr.App.1975); see also and compare Fennell v. State, 455 S.W.2d 248 (Tex.Cr.App. 1970); Leal v. State, 445 S.W.2d 750 (Tex.Cr. App.1969); and Ex parte Gutierrez, 600 S.W.2d 933 (Tex.Cr.App.1980). (All emphasis is supplied throughout by the writer of this opinion unless otherwise indicated.)
[2] Section 12.42, supra, provides in part:
"(a) If it be shown on the trial of a third-degree felony that the defendant has been once before convicted of any felony, on conviction he shall be punished for a second-degree felony."
See Foster, supra, and cf. Rawlings v. State, 602 S.W.2d 268 (Tex.Cr.App.1980), [wherein (though characterizing § 31.03(d)(4)(C), supra, as a "special enhancement provision" which governs § 12.42, a "general enhancement provision") it was held that enhancement of punishment under § 12.42, supra, must be composed of felony convictions other than for theft, when the primary offense alleged is the new felony theft created by § 31.03(d)(4)(C). As stated above, and to be illuminated post in n. 9, § 31.03(d)(4)(C), supra, delineates the elements of the felony offense and, we believe, is not an "enhancement" provision at all].
[3] V.T.C.A. Penal Code, § 12.33, provides:
"(a) An individual adjudged guilty of a felony of the second degree shall be punished by confinement in the Texas Department of Corrections for any term of not more than 20 years or less than 2 years."
[4] Contrary to appellant's contention, there was no necessity for the State to establish that appellant or his codefendant removed the stereo from Eckerd's, under the indictment allegations. See n. 1, ante, for recitation of the theory of theft under which appellant was tried, i. e., "exercising control."
[5] The trial court charged the jury in germane part:
A person is criminally responsible for an offense committed by the conduct of another if, acting with intent to promote or assist the commission of the offense, he encourages, directs, aids, or attempts to aid the other person to commit the offense.
See V.T.C.A. Penal Code, §§ 7.01 and 7.02.
[6] Article 37.07, V.A.C.C.P. provides in part:
"Sec. 1. (a) The verdict in every criminal action must be general. * * *
(b) If the plea is not guilty, [the jury] must find that the defendant is either guilty or not guilty; ...."
[7] See generally Ex parte Cannon, 546 S.W.2d 266 (Tex.Cr.App.1976) (Opinion on State's motion for rehearing).
[8] Compare § 31.03, subsection (d) which provides that "An offense under this section is:"
(3) a class A misdemeanor if the value of the property stolen is $20 or more but less than $200; ...."
[9] As alluded to in n. 2, ante, some confusion has arisen as to whether the phrase in § 31.03(d)(4)(C), supra:
"... and the defendant has been previously convicted two or more times of any grade of theft,"
constitutes an "enhancement" provision for punishment purposes, or a jurisdictional "element" of the particular offense proscribed. See, e. g., Rawlings, supra; and Ex parte Lucky, 571 S.W.2d 913 (Tex.Cr.App.1978). Compare also, e. g., Bell v. State, 504 S.W.2d 408 (Tex.Cr.App.1974). Because of the procedure employed in the instant case and the ground of error brought pursuant to it, we are squarely presented with the issue here.
Article 36.01, V.A.C.C.P., entitled "Order of Proceeding in Trial" provides that in a jury trial, the prosecutor is to first read the indictment and "when prior convictions are alleged for purposes of enhancement only and are not jurisdictional, that portion of the indictment... reciting such convictions shall not be read until the hearing on punishment is held as provided in Article 37.07." The latter Article provides, of course, for our bifurcated trial procedure, Section 2 of which directs:
"(a) In all criminal cases, other than [some] misdemeanor cases ..., which are tried before a jury on a plea of not guilty, the trial judge shall ... first submit to the jury the issue of guilt or innocence of the defendant of the offense or offenses charged, without authorizing the jury to pass on the punishment to be imposed."
So, a coincidental reading of Article 36.01(1) and Article 37.07, § 2(a), both supra, convinces us that the phrase in question must constitute a jurisdictional element-a "forbidden conduct"-of the felony theft proscribed by § 31.03(d)(4)(C), and must therefore be both alleged and charged as such before the jury is authorized to render a general verdict of guilt. See Ex parte Gutierrez, supra.
Under this rationale, the reason the State may not allege prior felony theft offenses for purposes of enhancement under the general provisions of § 12.42, supra, is that § 31.03(d)(4)(C), supra, specifically provides as an element of the felony theft it proscribes: "... and the defendant has been previously convicted two OR MORE times of ANY grade of theft."
By way of example, in Rawlings, supra, the State was not permitted to allege two prior misdemeanor theft convictions for jurisdictional purposes, and then add two prior felony theft convictions, for general enhancement purposes. But we believe such conclusion is compelled because all of the prior alleged constituted "two or more" convictions for "any grade of theft," and not because § 31.03(d)(4)(C) is a "special enhancement" statute which governs § 12.42, supra, a "general enhancement" provision.
[10] We note, however, that under the court's instructions in this cause, no lesser included offense was submitted for the jury's consideration; thus, if the jury had answered the erroneous "special issue" submitted: "We do not," we would be constrained to interpret such verdict to be a general verdict of "not guilty," and accordingly order the entry of a judgment of acquittal, since there is no proscription against theft "less than $200." See n. 8, ante, and accompanying text. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1165233/ | 652 P.2d 120 (1982)
John McBETH, Appellant,
v.
STATE of Alaska, Appellee.
Nos. 5589, 5607.
Court of Appeals of Alaska.
October 8, 1982.
*121 Margaret W. Berck, Asst. Public Defender, Juneau, and Dana Fabe, Public Defender, Anchorage, for appellant.
Patrick Gullufsen, Dist. Atty., Michael J. Stark, Asst. Atty. Gen., and Wilson L. Condon, Atty. Gen., Juneau, for appellee.
Before BRYNER, C.J., and COATS and SINGLETON, JJ.
OPINION
COATS, Judge.
On the evening of October 26, 1979, an attempt was made to rob the Home Liquor Store in Juneau. During the attempt, the store clerk was assaulted with a knife and injured. Following an investigation, John McBeth was charged in a three count indictment with attempted robbery, assault with intent to commit robbery, and assault with a dangerous weapon. McBeth was tried by jury in superior court in Juneau before Judge Thomas B. Stewart and was found guilty on all three counts. However, Judge Stewart only sentenced McBeth on the charge of assault with intent to commit robbery. The sentence imposed was thirteen years' imprisonment with three years suspended.
At the time of this offense, McBeth was on probation for a prior armed robbery conviction. McBeth's probationary status was subsequently revoked based on the new conviction, and he was ordered to serve the suspended portion of the sentence imposed upon his prior conviction. Thus, McBeth was ordered to serve five years concurrent with the thirteen-year sentence imposed upon his most recent conviction.
McBeth now appeals to this court alleging various trial errors. He further alleges that a reversal of his probation revocation should follow upon a reversal of his most recent conviction. The facts of the case as they were presented at trial can be summarized briefly:
*122 On the evening of October 26, 1979, Robert Elmore was working alone in the Home Liquor Store in Juneau. Sometime between 10:00 and 11:00 p.m., a man entered the store; he was wearing a nylon stocking over his face and his hands were in his pockets. The man told Elmore to give him the money, but at first Elmore did not think he was serious. The man repeated his demand and walked behind the counter. At this point, Elmore said, "I'm going to have to see more than your hand in your pocket." The man then pulled a knife out of his pocket and began slashing at Elmore.[1] The two men grappled, and Elmore managed to push the assailant up against a cooler. Elmore took this opportunity to grab an eighteen-inch section of lead weighted hose kept behind the counter. Elmore brandished it at the man, who then fled.
Elmore was able to provide a brief physical description of the robber. He described him as a 6'0" to 6'2" tall black male, with a slender to medium build. Furthermore, he described the robber as wearing a nylon stocking mask, a dark blue sweatshirt and tan slacks.
The subsequent investigation into the incident soon focused on John McBeth as a prime suspect; he fit the description given by Elmore and he was known to be on probation for an armed robbery conviction. It was learned that McBeth, although not registered in his own name, had been staying at the Driftwood Lodge in a room with a view directly overlooking the Home Liquor Store. On the day following the attempted robbery, a search warrant was executed on the room where McBeth had stayed. Among the items found in the room was a dark blue sweatshirt. Also at this time, the police found a knotted nylon stocking lying in a puddle near the Driftwood Lodge. According to the testimony presented at trial, both the sweatshirt and the nylon stocking were sent to the FBI for analysis. An FBI agent testified that he found head hairs on both the stocking and the sweatshirt which either came from McBeth or another Negroid whose head hairs were microscopically the same as McBeth's. The agent also testified that he found a head hair on the sweatshirt which either came from Robert Elmore, the victim of the robbery, or another Caucasian whose head hairs were microscopically the same as Elmore's.
The room at the Driftwood Lodge had been registered in the name of Dennis Franzen. The police contacted Franzen and he eventually told the following story, implicating McBeth in the attempted robbery of the Home Liquor Store. Franzen initially met McBeth while incarcerated in the Juneau Jail. Following their releases from jail, Franzen used to run into McBeth occasionally. Sometime during the week before the attempted robbery, McBeth asked Franzen if he could stay at his apartment for a few nights. On Friday, October 26, 1979, after having stayed at Franzen's for four days, McBeth decided to get a hotel room and he gave Franzen fifty dollars and asked him to register him at either the Hilton or the Driftwood Lodge. About 9:30 that evening, Franzen went to see McBeth at the Driftwood Lodge and they sat around drinking beer. They started talking about the Home Liquor Store, and then McBeth left and returned after fifteen or twenty minutes and said that there were too many people in there. McBeth waited for awhile, continually looking out the window at the liquor store, and then he asked to borrow Franzen's sweatshirt and knife. McBeth again left for another fifteen or twenty minutes, but this time he left with the nylon stocking on his head. When he returned, he said he had cut the clerk in an entanglement and that the clerk had shut the cash register on him. McBeth told Franzen to get rid of both the knife and the sweatshirt. Accordingly, Franzen dropped the sweatshirt between the bed and the wall, but he pocketed the knife after wiping blood off of the blade. McBeth then went to sleep and Franzen left.
*123 McBeth testified that he spent the evening hours of October 26 in Room 31 at the Driftwood Lodge. He stated that he had been drinking that evening and fell asleep in his room at about 9:00 p.m., while watching television. He did not wake up until about 4:00 a.m. the next morning.
McBeth first argues that the trial court erred when it permitted the prosecution to cross examine him about the fact that he had been previously incarcerated. Some knowledge of earlier proceedings is necessary to fully understand McBeth's contention. Prior to the introduction of any evidence, the trial court issued a protective order which prohibited the state from introducing the fact that McBeth had a prior conviction for armed robbery. The trial judge granted the protective order, reasoning that the prejudicial effect of the prior conviction outweighed its probative value.[2] However, during the trial and before McBeth testified, the fact that he had been in jail came before the jury. Witness James Rhodes stated that McBeth told him he wanted to leave the state "because he had done time here in Alaska, he hadn't seen his family for quite a while, and he was ready ... to get out." There was no objection to this statement. Somewhat later in the trial Dennis Franzen was permitted, over a defense objection, to testify that he originally met McBeth in jail.[3] Apparently because the information was already before the jury, McBeth testified on direct examination that he had been in jail and was on probation. McBeth then described his family, educational, military, and employment background. For example, McBeth testified that he had served two years in Viet Nam and had been awarded several medals and citations, including two purple hearts. McBeth then testified that he had spent the evening of October 26, 1979, in his room at the Driftwood Lodge and had not committed the robbery.
In cross examination, the prosecution stated, "You didn't give us much with regard to your background and activities since 1974 [when McBeth was released from the military]... ." Defense counsel objected in order to prevent any questioning into McBeth's prior conviction and incarceration. The trial judge ruled that since the defense had introduced evidence of McBeth's good character the prosecution was entitled to rebut that evidence. The court, however, limited this rebuttal to inquiry into whether McBeth had been previously convicted, whether he had spent time in jail as a result, and if so, how much time. The court prohibited inquiry into the nature of the conviction. Accordingly, the following exchange took place on McBeth's cross examination:
Q: Mr. McBeth, my question to you is since your discharge from the army things have not gone so well. You have as a matter of fact spent a considerable period of that time to the present in jail, is that correct?
A: A portion of that time, yes.
No more was said inregard to McBeth's previous conviction and incarceration.
McBeth argues that to the extent that he did present character evidence by *124 bringing in testimony about his favorable military record, his education, and his family background, the prosecution nonetheless could not introduce evidence of specific instances of misconduct such as McBeth's prior conviction.[4] McBeth relies in part on Evidence Rule 405, which reads:
Methods of Proving Character.
(a) Reputation or Opinion. In all cases in which evidence of character or a trait of character of a person is admissible, proof may be made by testimony as to reputation in any community or group in which the individual habitually associated or by testimony in the form of an opinion. On cross-examination, inquiry is allowable into relevant specific instances of conduct.
(b) Specific Instances of Conduct. In cases in which character or a trait of character of a person is an essential element of a charge, claim, or defense, proof may also be made of specific instances of his conduct.
McBeth argues that this situation was not within the ambit of Rule 405(b), so that the question by the prosecutor was not a permissible method of proving character. See Freeman v. State, 486 P.2d 967 (Alaska 1971). The state does not disagree with McBeth on this point. Rather, the state argues that, in asking McBeth about his prior incarceration, the prosecutor was only addressing a specific matter opened up by defense counsel on his direct examination of McBeth. The state contends that this court may affirm a trial court's ruling on different grounds from those advanced by the trial court. See, e.g., Rutherford v. State, 605 P.2d 16, 21 n. 12 (Alaska 1979). The state also argues that the prosecutor's cross-examination of McBeth did not elicit any fact that was not already before the jury and therefore any error was harmless.
We are persuaded by the state's harmless error argument. Although McBeth did bring out the fact of his incarceration and probation during direct examination, it is clear that he did this only to create the appearance of candidly admitting evidence that was already before the jury. He certainly gained no other benefit from this admission, and we do not believe that there was any need for the prosecution to inquire further on this matter. However, the only factor which the prosecution's inquiry might have added to what was already before the jury was the implication that McBeth might have spent "a considerable period of time" in jail. Although this implication in the question might have some prejudicial effect, given the strength of the state's case and the fact that the evidence of McBeth's incarceration and probation *125 was already before the jury, we do not believe that this evidence appreciably affected the jury's verdict. Love v. State, 457 P.2d 622 (Alaska 1969).
McBeth next contends that the trial court erred in denying his motion for a mistrial based upon the prosecution's questioning of Freeman Lafferty. In presenting his defense, McBeth called Lafferty as an alibi witness. Lafferty testified that on October 26, 1979 at 10:15 p.m. he went to McBeth's room at the Driftwood Lodge and that after knocking on the door but getting no answer, he looked in the window and saw McBeth asleep on the bed. In cross examining Lafferty, the prosecution tried to impeach him by establishing first that Lafferty came forward with his exculpatory story only shortly before trial. The prosecution then inquired into the events of March 4, nine days before Lafferty's testimony at trial. Lafferty stated that he was at home and that McBeth was with him from 4:00 or 5:00 p.m., to approximately 7:50 p.m. on March 4. Lafferty was asked if he had "bumped into [a] Mr. Darrell Powell that evening," and Lafferty responded that he never saw Darrell Powell on that evening and that he did not even know who Darrell Powell was. The prosecution subsequently asked, "Did you, Mr. Lafferty, participate in a beating of Mr. Darrell Powell inflicted by Mr. McBeth last Tuesday, October[5] the 4th between 6:00 and 8:00 o'clock?" Lafferty responded, "I did not," and the prosecution terminated its cross examination. The jury was then excused and McBeth moved for a mistrial based upon this question. After argument the trial judge denied the mistrial motion. No objection had been made to the question and no other relief was requested.
McBeth argues that evidence of specific instances of misconduct are not admissible to attack the character of a witness. He argues that any evidence that McBeth and Lafferty had beat up a person was prejudicial evidence of misconduct which was not admissible for any purpose. The state argues that proof that Lafferty would help McBeth beat someone up established Lafferty's bias in favor of McBeth. The state also argues that Lafferty might have been coerced into testifying for McBeth because he feared that McBeth might inform on him about his participation in the beating episode if he did not testify. We disagree with the state that the probative value of evidence that Lafferty and McBeth had assaulted someone was greater than the prejudicial effect of this evidence.[6] The probative value of the fact that Lafferty was biased in favor of McBeth because he helped him beat someone up was minimal, yet the prejudicial effect could be great. Furthermore, there was no indication of any possibility that McBeth was considering informing on Lafferty. We do not think it was an accident that this bias theory for admissibility was never presented by the state in the trial court. We also believe that it was improper for the prosecution to inquire about a prior crime which was allegedly committed by a witness, Lafferty, and a defendant, McBeth, without making a prior application to the court so that the court could weigh the probative value of the evidence against the prejudicial effect.[7]*126 We conclude that the trial court erred in failing to grant a mistrial.
No attempt was made by the District Attorney to bring this matter to the attention of the trial court before the question was asked, and once it was asked the potential damage was done. The defense counsel's only real course of action was to move for a mistrial. Therefore, this situation is not one where the defendant's failure to object is of significance. Had the matter properly been brought to the attention of the trial court before the question was asked, defense counsel would have had time to make an objection. By not bringing this matter to the trial court's attention before asking the question, the District Attorney deprived the defendant of any opportunity to object before the prejudicial question was asked and forced the trial court to rule on the evidence from a mistrial perspective.[8]
Whether an error is so harmful that a mistrial must be declared is a decision which is committed to the sound discretion of the trial court. The trial judge's decision will be overturned on review only where it is clearly erroneous. Roth v. State, 626 P.2d 583, 585 (Alaska App. 1981). The question which was asked here was potentially harmful to the point that a mistrial was required. The question contained an accusation that McBeth and his chief witness had engaged in beating up another person. An accusation of the sort which was made here, from a person who holds the office of District Attorney, could have a significant impact on the jury. If the accusation were believed it might very well have damaged the credibility of McBeth and Lafferty and have undercut McBeth's alibi defense in an unfair and prejudicial manner. Reversal of McBeth's conviction is therefore required.[9]
McBeth's probation on a prior armed robbery offense was revoked based solely upon the record of his conviction in the instant case. McBeth argues that if his conviction in the instant case is reversed then his probation revocation must also be reversed. Oksoktaruk v. State, 619 P.2d 480 (Alaska 1980). The state agrees that under Oksoktaruk if this case is reversed, McBeth's probation revocation must also be reversed. We agree that Oksoktaruk requires us to set aside McBeth's probation revocation.
The conviction and probation revocation are REVERSED.
NOTES
[1] As a result of his tussle with the robber, Elmore received a cut on the neck requiring nine stitches, a cut on the right hand requiring thirteen or fourteen stitches, and a smaller cut on his left hand.
[2] Evidence Rule 609 reads in part:
Impeachment of Evidence of Conviction of Crime
(a) General Rule. For the purpose of attacking the credibility of a witness, evidence that he has been convicted of a crime is only admissible if the crime involved dishonesty or false statement.
... .
(c) Admissibility. Before a witness may be impeached by evidence of a prior conviction, the court shall be advised of the existence of the conviction and shall rule if the witness may be impeached by proof of the conviction by weighing its probative value against its prejudicial effect.
Robbery is a crime involving dishonesty or false statement. See Frankson v. State, 645 P.2d 225 (Alaska App. 1982).
[3] The ruling of the trial court that the probative value of this statement outweighed its prejudicial effect has not been challenged on appeal. Evidence Rule 403. The trial court offered to give a cautionary instruction to the jury charging them that the fact that McBeth had formerly been in jail was not relevant to his guilt or innocence of the crime for which he was on trial. McBeth never requested a cautionary instruction.
[4] In Salud v. State, 630 P.2d 1008, 1010 (Alaska App. 1981) this court discussed under what circumstances a character trait of the accused may be proven for the purpose of showing that he acted in conformity with that trait. We said:
Generally a character trait of an accused ... is inadmissible to prove that he acted in conformity with that character trait. However, the accused may offer evidence of his good character for a character trait which is relevant to the issues being tried. Once the accused has introduced evidence of good character, the prosecution is permitted to rebut the evidence that the accused possesses that character trait. [Footnote omitted]
Alaska R.Evid. 404(a)(1) states:
(a) Character Evidence Generally. Evidence of a person's character or a trait of his character is not admissible for the purpose of proving that he acted in conformity therewith on a particular occasion, except:
(1) Character of Accused. Evidence of a relevant trait of his character offered by an accused, or by the prosecution to rebut the same... .
Although McBeth does not argue strenuously that he did not open up the character issue, we believe that by introducing some background information, he did not open up the relevant character trait issue. A certain amount of background information can be given by a witness, including the accused, as part of his testimony. Given the fact that McBeth had obtained the protective order concerning his prior conviction, it was clear from the facts of this case that he did not intend to open himself up to rebuttal from the prosecution about his prior conviction. To the extent that McBeth's background information may have gone slightly beyond what was permissible, the prosecutor's remedy was to object to this information on the ground that it lacked relevance. The prosecution should not have allowed the information to go in without objection and then argue that McBeth had produced sufficient evidence of good character so that the prosecution was entitled to rebut this evidence.
[5] It is clear that the prosecutor meant to say "March the 4th."
[6] Evidence Rule 403 reads:
Exclusion of Relevant Evidence on Grounds of Prejudice, Confusion, or Waste of Time. Although relevant, evidence may be excluded if its probative value is 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.
[7] We believe that the Alaska Rules of Evidence clearly imply that a prior application to the court is necessary before a party can inquire into evidence concerning whether a witness has engaged in criminal conduct. Evidence Rule 608(b) and (c) provide in part:
(b) Evidence of ... specific instances of the conduct of a witness offered for the purpose of attacking or supporting that witness' credibility is inadmissible unless such evidence is explicitly made admissible by these rules, by other rules promulgated by the Alaska Supreme Court or by enactment of the Alaska Legislature.
(c) Admissibility. Before a witness may be impeached by inquiry into specific instances of conduct pursuant to subdivision (b), the court shall be advised of the specific instances of conduct upon which inquiry is sought and shall rule if the witness may be impeached by such inquiry by weighing its probative value against its prejudicial effect. See also Evidence Rule 609(a) and (c), supra note 2.
[8] On the day following Lafferty's testimony, the prosecution did present Darrell Powell as a witness, out of the presence of the jury, in moving to revoke McBeth's bail. Powell testified that he was beat up by McBeth and Lafferty. Powell's testimony did establish that at least the prosecution's question had an evidentiary base.
[9] Since we are reversing on this point, it is not necessary for us to reach the other points McBeth raised on appeal concerning his robbery conviction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/327636/ | 516 F.2d 145
Darol D. TAYLOR, a minor by his Guardian, David A. Taylorv.PAUL O. ABBE, INC., Appellant in No. 74-1787,v.DIAMOND SHAMROCK CHEMICAL CO., SUPERIOR ZINC DIVISION,SUPERIOR ZINC COMPANY, Third-Party Defendant,Appellant in No. 74-1788.
Nos. 74-1787 and 74-1788.
United States Court of Appeals,Third Circuit.
Argued Feb. 28, 1975.Decided May 15, 1975.
Howard D. Scher, Alan R. Kutner, Goodis, Greenfield, Henry, Shaiman & Levin, Philadelphia, Pa., for appellee.
Francis E. Marshall, Marshall, Dennehey & Warner, P. A., Philadelphia, Pa., for appellant, Paul O. Abbe, Inc.
Robert R. Reeder, White & Williams, Philadelphia, Pa., for appellant, Superior Zinc Co.
Before VAN DUSEN, GIBBONS and HUNTER, Circuit Judges.
OPINION OF THE COURT
JAMES HUNTER, III, Circuit Judge:
1
This case involves the question of a manufacturer's liability, under section 402A of the Restatement (Second) of Torts,1 for an alleged design defect of a continuously operating pebble mill. Appellee Taylor, a seventeen-year old boy, sustained severe injuries when his right hand got caught in the nip point of two interlocking revolving gears. As a result of this accident his hand was later amputated.
2
The mill was owned and operated by Taylor's employer, Superior Zinc Co. ("Superior"), and had originally been manufactured in 1909 by the Hardenge Company (not a party to this law suit). In 1964, Superior contacted appellant Paul O. Abbe, Inc. ("Abbe") to request quotations for the replacement of a worn cylinder, the large drum in which the grinding took place (187a). An Abbe representative, R. S. Page, then visited Superior's plant and took measurements. Abbe concluded, however, that because its cylinder had a different shape than the one on Superior's Hardenge mill, replacement of the cylinder would also necessitate provision of a new ring gear (which surrounds the cylinder), a new pinion gear to mesh properly with the ring gear, and a new jack shaft to connect the pinion gear to the motor (191a-192a). Abbe thus provided those four parts, and Superior continued to use the base, the motor and the "V" belts (connecting the motor to the jack shaft) from the original Hardenge mill. Abbe had nothing to do with the assemblage of the mill, since it merely shipped the parts to Superior. There was also uncontroverted evidence that Abbe offered to provide, at an additional cost of $110.00, a guard to cover the point at which the ring and pinion gears meshed, but that Superior rejected the offer of this safety device (207a-209a, 219a).
3
The accident occurred in 1970, while Taylor was taking a break near the mill. At the trial, plaintiff testified that he had placed his work gloves on top of a 42 high guard rail surrounding the mill, and that when he noticed that they had fallen to the ground between the rail and the mill, he reached down to retrieve them. The next thing he knew was that he found himself "being caught, being pulled" into the unguarded inrunning nip point of the mill (126a). He did not recall exactly how his hand got caught in the gears (127a). He began screaming for help and tried without success to stop the machine by pulling on the "V" belts and by searching for an on-off switch. After more than fifteen minutes had passed another worker finally located an on-off switch forty feet away and shut off the mill.
4
Plaintiff then brought this suit against Abbe in the Eastern District of Pennsylvania.2 Through his expert witness, plaintiff contended that mill manufactured by Abbe was defectively designed in two respects: it lacked both a guard over the gears and an on-off switch in the vicinity of the machine (275a). At the conclusion of the evidence, the trial judge instructed the jury that the absence of either a safety guard or an on-off switch could constitute a design defect which made the mill unreasonably dangerous (549a, 558a).
5
The precise question presented by this case, as we see it, is as follows: assuming arguendo that the absence of a gear guard and an on-off switch made the mill unreasonably dangerous, and that this "defect" in design was the proximate cause of plaintiff's injuries, was the parts supplier (Abbe) responsible for the design defect? Since this is a diversity case, we are required to follow the law of the forum state, Pennsylvania. However, while Pennsylvania has adopted the principle of strict liability set forth in Restatement § 402A, Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966), and while it has indicated that design defects are actionable under § 402A, Bartkewich v. E. K. Billinger, 432 Pa. 351, 247 A.2d 603 (1968), we have found no Pennsylvania cases involving the precise issue presented here.3 Nevertheless, we believe that the requirement that liability only be imposed where the manufacturer is responsible for the defective condition is necessarily implicit in § 402A, and the absence of case law is probably a result of the fact that, in most cases, the manufacturer's responsibility is either self-evident or is arguably negated by such traditional doctrines as superseding cause or change in condition.4 For the reasons discussed below, we do not believe that Abbe was responsible for the alleged defects, and we find no indication that Pennsylvania courts would extend the principle of strict liability to cover these facts. Consequently, we conclude that plaintiff's judgment against Abbe must be reversed and judgment n.o.v. must be entered in favor of Abbe.
A. THE ON-OFF SWITCH
6
The evidence in this case shows conclusively that Abbe had absolutely nothing to do with the electrical set-up of the mill (221a). Rather, it merely provided replacements for the cylinder, the jack shaft and the two gears, and Superior chose to keep the same electric motor that had been furnished as part of the original Hardenge mill. Abbe was not requested to submit a proposal on any parts relating to electrical switches or mechanisms, nor was it requested to install any such parts. Not only did Abbe in fact have nothing to do with the electrical set-up, but the replacement parts it furnished comprised a distinct unit independent of the mill's electrical system; none of the parts provided were directly connected to any electrical wiring or switches. If Abbe had furnished the motor as well as the other parts, it might arguably be considered responsible for the safety of the electrical set-up powering the motor. However, since it only supplied individual component parts which were to be assembled by the purchaser alone and which were to be powered by an existing motor manufactured by someone else, we cannot see any legal responsibility on Abbe's part for the electrical system connected to that motor. We see no logical reason for requiring a supplier of component parts to insist that the purchaser of those parts change its existing electrical set-up to place an on-off switch closer to an existing motor.
B. THE GEAR GUARD
7
Abbe's failure to provide a gear guard presents a more difficult question, since such a guard is arguably an integral part of the functioning unit provided by Abbe, and thus the provision of a guard would appear to be more a matter of Abbe's concern than the location of an electrical switch to turn off an existing Hardenge motor. Nevertheless, we conclude that as a matter of law Abbe was not responsible for the absence of a guard. Of critical importance in this case is the undisputed testimony that Abbe offered to sell such a guard to Superior but that Superior refused it. Under these circumstances, we think it clear that the responsibility for the absence of the guard should be placed on Superior rather than Abbe, since Superior was the party which made the decision as to the composition of the fully assembled mill. We believe that in a case like this a supplier should be required only to make a bona fide offer of a safety device. Where it has made such an offer and that offer has been refused, it should not be held liable for the failure to provide the particular safety device.
8
We do not mean to imply that a supplier may always avoid liability where there is uncontradicted evidence that it offered a safety device which was refused. In many cases there may well be strong public policy reasons for imposing liability despite such an offer and refusal. However, we believe that no such reason is present here. Abbe was under no statutory obligation to furnish a gear guard under these circumstances, and thus we are not faced with the situation where a manufacturer seeks to avoid a legislatively-imposed responsibility. Also, while we must accept the jury's conclusion, based on expert testimony, that the mill was unreasonably dangerous, we do not believe that the absence of a gear guard was such a hazard that it was a near certainty that the machine, if operated at all without the guard, would result in serious injury.5 Thus, the public policy considerations against absolving the offeror of a safety device from liability are less compelling than, for example, a case in which the manufacturer of a car makes brakes optional. In addition, the purchaser here was an established business entity with over fifty years of experience in the operation of its pebble mill, rather than an individual consumer who might warrant special judicial protection.
9
Another factor here is that Abbe neither supplied all the parts of the mill nor assembled the parts it did supply. Where a manufacturer sells a complete and pre-assembled product minus only an optional safety device, there would appear to be a stronger basis for holding it responsible for the absence of a safety device than this case, where Abbe merely supplied components which were later assembled by the purchaser without any supervision on Abbe's part. Furthermore, Abbe was not supplying component parts for an entirely new mill, but was replacing parts on a pre-existing mill which the purchaser had been operating for over fifty years. Where a purchaser seeks only replacement parts for a pre-existing machine, it seems more logical to place responsibility for the absence of a safety device on the party requesting the replacements than on the party providing them, at least where the latter has specifically offered such a device and the purchaser has refused it.
10
Therefore, since Abbe merely provided individual and unassembled replacement parts for less than the entire mill, and since none of the strong public policy considerations enumerated above is present, we believe that there is no compelling reason to hold Abbe responsible for the absence of a guard which, according to the undisputed testimony, it offered to the purchaser at minimal cost. Furthermore, we do not see how a jury question is presented here. There is no dispute in this case with respect to the critical facts, and thus the only issue before us is the legal significance of those facts. See Schreffler v. Birdsboro Corp., 490 F.2d 1148, 1154 (3d Cir. 1974). Consequently, since we believe that Abbe was not legally responsible either for the absence of the gear guard or a nearby on-off switch, the only two bases on which strict liability was premised, we conclude that Abbe was entitled to judgment n.o.v.
11
The judgment of the district court will be reversed with instructions to grant judgment n.o.v. in favor of Abbe.6
1
Restatement Torts § 402A provides:
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not brought the product from or entered into any contractual relation with the seller.
While plaintiff's complaint also listed a cause of action in negligence, the case against Abbe was tried and submitted to the jury solely on the basis of strict liability (108a, 546a).
2
The complaint alleged causes of action both in negligence and strict liability. Since plaintiff pursued only the strict liability theory at trial (108a), the trial court granted a directed verdict in favor of Abbe on the negligence allegations (322a)
3
Pennsylvania has imposed liability under § 402A on a supplier of component parts where one of the parts is defective. Burbage v. Boiler Engineering and Supply Co., 433 Pa. 319, 249 A.2d 563 (1969). However, this is not such a case, since plaintiff seeks to impose liability for a design defect, and there is no evidence or contention that any of the component parts supplied by Abbe malfunctioned in any way
4
Neither the doctrine of change in condition, which is explicitly made a defense under § 402A(1)(b) (see note 1 supra ), nor the doctrine of superseding cause (see Schreffler v. Birdsboro Corp., 490 F.2d 1148, 1154 (3d Cir. 1974)) is applicable to this case, since they both refer only to a changing circumstance or condition arising after the product has left the manufacturer's hands. Both of these doctrines, however, are consistent with the general tort rule that a defendant can be held liable only where he is responsible for the harm suffered
5
This is especially true in light of the fact that the mill was surrounded by a forty-two inch high protective rail, a fact known to Abbe (219a)
6
Abbe impleaded Superior as a third-party defendant, and the jury entered judgment in favor of Abbe against Superior. Since Superior's liability was wholly derivative of Abbe's, and since we conclude that judgment n. o. v. must be entered against plaintiff, the judgment against Superior in No. 74-1788 must automatically be vacated. Thus, there is no need to consider any of the issues raised by Superior in its appeal | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1100155/ | 415 So.2d 738 (1982)
Beverly CRONEBAUGH, Appellant,
v.
Rufus Oscar VAN DYKE, Jr., Appellee.
No. 80-1267.
District Court of Appeal of Florida, Fifth District.
May 12, 1982.
Rehearing Denied June 23, 1982.
*740 Robert L. Thomas, Apopka, for appellant.
Hubert W. Williams of Robertson, Williams, Duane, Lewis, Briggs & Ranson, P.A., Orlando, for appellee.
COWART, Judge.
Appellant, the former wife, sued appellee, her former husband, for alleged arrearages in child support. The trial court entered summary judgment for the father and dismissed the cause, ruling the mother did not have standing to enforce the alleged arrearage because, at the time the child support payments were supposedly not paid, the "children" were over eighteen years of age and able to sue in their own right. We affirm.
The parties were divorced in 1964. The dissolution decree incorporated an agreement which provided that the father would pay child support for the parties' three children in the mother's custody until each child attained majority, died, married or became self-supporting. The final decree also provided that the father would pay the costs and expenses incurred by each child in attending a college or university.
The appellee father paid to the appellant custodial mother the stipulated child support for each child until the particular child reached 18 years of age and even thereafter until the particular child moved away from the mother's home and into his own apartment or fraternity house in September following his 18th birthday.[1] Thereafter the father paid the required support amount and costs and expenses of college directly to the child. The mother waited until after the two oldest children had each received directly from their father "monies far in excess" of the father's formally adjudicated support obligation and were both over 21 years of age; then the mother sued the father for the amount of support due under the support judgment for the three years she did not receive the support payments, saying that by the terms of the final judgment her right to receive the child support accruing after the child was 18 years of age was vested in her. The father maintained that he had satisfied his obligation by his payments directly to the children, rather than through their mother. The mother moved for summary judgment, admitting the father had paid the support directly to each child, but asserting that the support obligation was due her. The father filed a motion for judgment on the pleadings or alternatively a motion to dismiss for failure to state a cause of action, arguing that, with regard to support obligations admittedly due a "child" between the ages of 18 and 21, enforcement rests with the child and therefore the mother did not have standing to sue. On these facts and procedural setting the trial court granted summary judgment for the father.[2]
The trial court's order can be affirmed on either of two grounds. First, the trial court correctly determined that the wife lacks standing to enforce any support *741 obligation due the child after the child turns 18. A minor child has a legal right to support from both parents in keeping with its needs and the parents' ability. This parental duty to support a minor child is created by law, exists before[3] and after dissolution of the marriage to which the children were born, and is independent of any settlement agreement made attendant upon dissolution. The parents' obligation of support cannot be bargained or stipulated away by parents so as to deprive the minor of the benefit thereof.[4] However, a minor is under a disability of nonage that prevents the minor from suing to enforce its own rights. While it is under the disability of minority, the child's right to support must be enforced by a legal representative, such as a guardian or other like fiduciary, a guardian ad litem or a next friend,[5] but more commonly it is enforced against one parent by an opposing parent, as natural guardian, or by a governmental agency.[6] In each event, the recipient of the child support receives the support monies, not in his own right or for his own benefit, but in trust for the cestui que trust, who is the child. Child support is a right that belongs to the child.[7]
The same event that removes the child's disability its arrival at the age of majority is usually the same event that terminates the parents' duty to support. Hence, the problem of an emancipated child suing his or her parent for nonsupport would normally never arise. However, the enactment of section 743.07(3), Florida Statutes (1973), allows such a result. Section 743.07(3) does not affect rights and obligations existing prior to July 1, 1973, and the father's prior duty of support is therefore not affected. However, the effect of section 743.07(1), Florida Statutes (1973), is to remove the disability of nonage of persons who are 18 years of age[8] and enables them to enjoy and suffer the rights, privileges and obligations of all persons 21 years of age or older. This means a person 18 years of age or older has the right to receive, and to assume the management of, his own estate, to contract and to be contracted with and to sue and to be sued. This effectively gives such person a new remedy the right to sue in his own name to enforce his own legal rights. By virtue of this statute, young adults become legally emancipated, sui juris and can no longer accurately be said to be in the custody of either parent.
Provisions in dissolution settlement agreements relating to payment of child support, even when incorporated by reference in final judgments, serve only to formalize and document the promisor's pre-existing legal duty of support, to state the frequency and amount of periodic payments, theretofore unliquidated, which at that time the relevant parties agree will discharge the promisor's support duty and to recognize who is to receive the support on behalf of the minor. The recipient receives the sums as trustee for the children. That such agreements are not the basis for the right to child support is demonstrated by the fact that they are subject to modification by the court as to these provisions.[9] If support orders, whether based on settlement agreements or not, were personal to the minor's custodian, who is the usual recipient, the obligation would not survive the death of the designated payee and this is not true. The trustee nature of the recipient of child support is also illustrated by the last sentence in section 61.13(1), Florida Statutes (1979), which provides that the court entering the support can require "the person or persons awarded custody of the child or children to make a report to the *742 court on terms prescribed by the court as to the expenditure or other disposition of said child support payments." The law does not require one to account for his own personal funds.
To the extent that in an agreement a parent may, as here, agree to pay sums for the benefit of a child which are in excess of the duty imposed by law, such as the cost of higher education, the child, who is a third party donee beneficiary of any such executory contract, has a vested pecuniary interest in performance. In cases of this sort, as in contract law generally, it is the beneficiary, not the promisee, who is entitled to performance and who, subject to defenses and conditions, has a cause of action against the promisor and who is entitled to receive the performance which discharges the obligation.[10] Since child support is truly a right of the child and can be enforced by the child once he or she turns eighteen, the wife in the present case does not have standing to sue.[11]
In relying on Kern v. Kern, 360 So.2d 482 (Fla. 4th DCA 1978), the trial court relied on the following passage:
The award of child support, although made to the mother as the child's natural guardian, is solely for the benefit of the child, who, because of the disability of non-age, lacks the legal status to bring suit directly against his parent for support. Under Florida law, when a child reaches eighteen years of age, this disability of non-age is removed, and if an obligation of support exists, the child may proceed in his own right in a court of competent jurisdiction to establish such obligation. See Rudnick v. Solomon, 311 So.2d 385 (Fla. 3d DCA 1975). The parent who formerly had legal custody of the child has no pecuniary interest in such litigation. Thus, once a normal child reaches majority, a parent has no standing to seek support money for that child in the courts of this state. 360 So.2d at 485.
This appears to be a good and applicable statement of law. A person who has reached the age of 18 can no longer accurately be called a child. Instead, he or she is a young adult who can remove himself from the custody of his mother. Although the supreme court has interpreted agreements to pay support until majority to mean until 21,[12] once the child reaches 18 he can enforce this support obligation himself.
Notwithstanding the standing issue, the trial court's summary judgment can be affirmed on the issue of payment. In this case there is no issue but that the father had paid the sums due after the children reached 18 years of age directly to the children when they moved away from home.[13] This payment satisfied and discharged the father's duty. This was sufficient alone to justify the summary judgment entered by the trial court. However, realizing that the children were not parties to the cause, the able trial judge carefully provided that the dismissal of the mother's cause was "without prejudice to the recipient of the obligation to seek enforcement in a separate action."
The trial court was correct in granting the father's motion for summary judgment and the order is hereby
AFFIRMED.
FRANK D. UPCHURCH, Jr., J., concurs specially with opinion.
SHARP, J., dissents with opinion.
*743 FRANK D. UPCHURCH, Jr., Judge, specially concurring:
I do not interpret the majority opinion as limiting in any way the right of parties to contract in a dissolution agreement or to prohibit the enforcement of the agreement upon its breach. In this case, support was payable until the children reached "majority." However, the age of majority was changed after execution of the agreement. While the obligation of support which arose pursuant to the agreement was to continue until the affected children reached twenty-one years, Daugherty v. Daugherty, 308 So.2d 24 (Fla. 1975), the children were no longer minors and had acquired all the rights and privileges of adults. As adults, they themselves could contract, give acquitances, sue in their own right and live where they wished. Conversely, the "custodial" parent had no further legal duty to the newly emancipated children, although the parent may have voluntarily continued to support or maintain a home for the individual.
While I concede that a custodial parent may make financial commitments for the benefit of his or her children, such as car or house payments, and should be allowed to do so as suggested by the dissent, I disagree that the majority opinion obliterates this right. The only requirement is that such eventuality be anticipated in the dissolution agreement. In the event that it is anticipated, I see no obstacle to its enforcement created by the majority opinion.
SHARP, Judge, dissenting.
I dissent in this case because under principles established by the Florida courts to handle "limbo" dissolution decrees[1] (like the one involved in this case), the custodial parent still should have standing to enforce the child support obligation, even though the children have attained eighteen years of age.
These parties were divorced in 1964. The final judgment (allegedly based on an agreement by the parties) entered by Judge W. Troy Hall, Jr. provided:
7. The Defendant shall pay to the plaintiff as child support for the three children ... the sum of $125.00 per month[2] for each child who is living with the Plaintiff and who is a minor. Such child support payments shall continue even though the child is away from the home of the Plaintiff temporarily such as at camp, school or vacation. ... (Emphasis supplied).
* * * * * *
10. The Defendant shall pay the costs and expenses incurred by each child in attending a college or university.
In 1980, the former wife and mother brought suit to collect arrearages in child support due for the two older boys, Rufus and Keith, who at the time of this litigation were over twenty-one years of age. She alleged by verified pleadings that she had not received the bulk of the child support payments which accrued while they were between eighteen and twenty-one years of age some eight thousand dollars ($8,000).[3] The appellee (Rufus Van Dyke) asserted three affirmative defenses[4] in his pleadings and deposition based on his claim that he had paid the full amount of the child support directly to the respective children after they went to college and lived (during the school year) in their fraternity houses and apartments, and that this course of action was taken by him with his former wife's knowledge and acquiescence. In her verified reply, the appellant, Mrs. Cronebaugh, alleged she had made repeated demands for payment and had not agreed to this arrangement.
*744 At this point, appellee moved for a Judgment on the Pleadings or Motion to Dismiss for Failure to State a Cause of Action, on the sole ground that appellant lacked standing to enforce the child support obligation after the children attained the age of eighteen years. I cannot agree with the majority opinion that the trial court reached (or should have reached) the merits of any of the appellee's defenses (including payment) since that was denied by appellant's verified pleadings,[5] nor did the argument of counsel and statements of the court at the hearing on the motion address them.[6]
If a child support obligation can be fully discharged by payment to a person not specified in the dissolution judgment, that makes it, for all practical purposes, unenforceable by the former spouse. Note number 11 of the majority opinion ignores the realities of its decision. Whether or not the payments were made, whether required by a judgment or an agreement, the former spouse will not be able to enforce them because this opinion holds she lacks standing to sue. Further, the majority ignores the realities that a former spouse often has made financial commitments for the benefit of her children, such as car payments and house payments, which I think she should be allowed to do.[7] The majority opinion obliterates this right.[8]
The effect of this decision is to modify retroactively, the "limbo" dissolution decrees, which I think, is contrary to Florida law. It is well established that separation agreements and dissolution judgments effective before July 1, 1973, which require child support payments until a child is twenty-one or until he attains his "majority" are enforceable until the child reaches the age of twenty-one (21). Section 743.07(1), Florida Statutes (1973), which changed the age of "majority" to eighteen (18), has no effect on the rights and obligations of parties under a dissolution judgment, prior to its effective date. Daugherty v. Daugherty, 308 So.2d 24 (Fla. 1975); Burgdorf v. Burgdorf, 372 So.2d 988 (Fla. 2d DCA 1979); Hoffman v. Hoffman, 371 So.2d 1061 (Fla. 3d DCA 1979). Swallick v. Swallick, 351 So.2d 1119 (Fla. 4th DCA 1977). In each of these cases the party seeking enforcement of a child support obligation was the mother (or former wife) and the children were over eighteen (18) years of age.
The lower court relied upon Kern v. Kern, 360 So.2d 482 (Fla. 4th DCA 1978). I agree with Holmes v. Holmes, 384 So.2d 1295, *745 1296 (Fla. 2d DCA 1980), that Kern does not apply to this case:
The trial court's reliance on Kern v. Kern, supra, was misplaced. There the wife had filed for modification of the child support provisions of a final judgment of dissolution of marriage, seeking to require the husband to provide for the college education of the adult children of the parties where there had been no agreement to do so and the final judgment did [not] so provide. The district court there held that absent an agreement, a divorce court had no jurisdiction to require a parent to furnish an adult child with support in the form of a college education. In a footnote to that holding, the court emphasized: `Nothing in this opinion should be construed as limiting the power of a court to enforce a stipulated to agreement between the parties in a dissolution proceeding.' 360 So.2d at 486, n. 6. (Emphasis supplied).
In this case, the agreement between the parties contemplated the former husband would pay child support to the wife while the children were in college,[9] until they reached twenty-one (21) years of age, or became emancipated in other ways not applicable. Prior to 1973 the former wife had standing to enforce that obligation and receive the payments because she was the custodial parent of the non-emancipated children, and because she was a party to the agreement which is the source of Van Dyke's obligations. Neither her right to enforce nor Van Dyke's obligation to pay should be affected by section 743.07(1), Florida Statutes (1973).[10] The fact that a child attains eighteen years should not make the child support obligation unenforceable by the former spouse, whether it is a post 1973 dissolution judgment or not.[11] The fact that an ostensibly third party beneficiary (the child) can, if it chooses, enforce an agreement incorporated in a judgment, should not deprive one of the parties in privity (the wife in this case) of the right to enforce the provisions of that same agreement or judgment.
NOTES
[1] Rufus Oscar Van Dyke III was born January 15, 1957 and Keith Camper Van Dyke was born February 9, 1958. Appellant sought to recover child support for Rufus from September 1975 through January 1978 and sought to recover child support for Keith from September 1976 through February 1979. When the instant complaint was filed (March 10, 1980), Rufus was 23 years old and Keith was 22 years old.
[2] The judge's order specifically states:
Upon consideration it is ORDERED that: It appearing that all claims for past due support accrued subsequent to the child obtaining majority age, the legal right to enforce such obligation rests with the child, not with the mother.
Summary Judgment is GRANTED and cause is DISMISSED, without prejudice to the recipient of the obligation to seek enforcement in a separate action.
See: Kern v. Kern, 360 So.2d 482 (4 DCA 1978).
DONE AND ORDERED in Chambers at Orlando, Florida, this 8th day of September, 1980.
[3] See § 61.09, Fla. Stat. (1979).
[4] Isaacs v. Deutsch, 80 So.2d 657 (Fla. 1955).
[5] See Fla.R.Civ.P. 1.210(b).
[6] See §§ 409.2564, 88.101, 88.181(2), Fla. Stat. (1979).
[7] Armour v. Allen, 377 So.2d 798 (Fla. 1st DCA 1979).
[8] See also § 1.01(14), Fla. Stat. (1979) (defining "minor" as any person who has not attained the age of 18 years).
[9] See § 61.13(1), Fla. Stat. (1979).
[10] See generally 4 A. Corbin, Contracts, §§ 774, 776, 779A, 811, 812 (1951).
[11] This opinion does not address the situation where one spouse by contract with the other has agreed to support his or her adult child but has failed to pay or provide such support. For example, where a husband has agreed to pay the costs of a college education, or to pay a wife the cost of maintaining a home for such child past its 18th birthday.
[12] Daugherty v. Daugherty, 308 So.2d 24 (Fla. 1975).
[13] Not only does the record contain the father's deposition testimony, but the wife's motion for summary judgment admits the father made the support payments directly to each child when he became 18 and moved off to college and the wife's counsel conceded this fact at the hearing on a motion for rehearing.
[1] "Limbo" dissolution decrees are those rendered prior to July 1, 1973 which require child support payments until a child attains twenty-one years or his age of "majority."
[2] The judgment was later amended to increase this amount to $150.00 per month per child.
[3] The parties' younger daughter had recently attained eighteen years of age and the child support payments for her were also not being received, although they were not involved in this litigation.
[4] The defenses asserted were Laches, Waiver and Estoppel, and accord and satisfaction.
[5] Shepard v. City of Palatka, 399 So.2d 1044 (Fla. 5th DCA 1981); Squitieri v. Aetna Casualty & Surety Co., 382 So.2d 730 (Fla. 5th DCA 1980); Jones v. Ryder Truck Rental, Inc., 382 So.2d 869 (Fla. 5th DCA 1980).
[6] Appellee's counsel said all the money was paid to the boys:
But we need not get to that issue today. The issue today is on the motion on Judgment on the Pleadings as I have raised it and is whether or not Mrs. Cronebaugh has any standing in this court to bring this action. The legal proposition that I am citing the court is that once an individual attained the age of 18, there may be a legal duty of support to that individual imposed by previous court order but it is to that individual and not to his mother once he has reached the age of 18 and she is no longer guardian and no longer has a proprietor's interest in the support payments due him.
[7] Often times it is the child support payments that allow a former spouse to maintain a sizable home for the children during their years of high school and college. In reality, as every parent learns at this stage, the children are away more often than not. But many families maintain their over-sized "nests," during this final transition stage.
[8] Public policy encourages the enforcement of child support obligations. The majority erodes that policy by leaving enforcement solely to the discretion of the child once he or she reaches the age of majority. Such a holding ignores the natural reluctance of a child to sue his or her parent. If equity so requires, a trial court is free to use its equitable powers to prevent an unjust double payment result. Payment directly to a child may not totally satisfy a spouse's child support obligation under a dissolution judgment. The wife to whom child support payments are payable should not be required to chase down any party the husband selects to pay in order to secure money to defray necessary child support expenses such as mortgage payments on the family home. However, the contrary should follow if the wife by her conduct has accepted or acquiesced in the manner of payment chosen by the former husband.
[9] The judgment specifically provided: "Such child support payments shall continue even though the child is away from the house of plaintiff temporarily, such as camp, school or vacation."
[10] Daugherty v. Daugherty, 308 So.2d 24 (Fla. 1975).
[11] Cf. Catches v. Catches, 409 So.2d 1199 (Fla. 1st DCA 1982) [1982 F.L.W. 475] (Evident standing of wife to seek reinstatement of contempt order for nonpayment of support after children have reached their majority). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1745933/ | 858 S.W.2d 549 (1993)
EXPLORACION DE LA ESTRELLA SOLOATARIA INCORPORACION et al., Appellants,
v.
Beryl BIRDWELL and Rosalie McGlaun, Appellees.
No. 11-92-253-CV.
Court of Appeals of Texas, Eastland.
July 1, 1993.
*551 Richard D. Davis, Midland, for appellants.
David Cotton, Cotton & Cotton, Snyder, Richard P. Marshall, Jr., Steve Selby, Scott, Douglass & Luton, Austin, for appellees.
OPINION
ARNOT, Justice.
This is an appeal from a declaratory judgment canceling two oil and gas leases because of cessation of production after the primary term and for failure thereafter to conduct timely and continuous reworking operations. We affirm.
On September 14, 1987, Beryl Birdwell, as lessor, executed an oil and gas lease to John Vickers, as lessee, covering the east 180 acres of the south one half of Section No. 177, Block No. 97, H & TC Ry. Co. Survey, Scurry County. The Vickers lease provided for a three-year primary term and contained the following continuous operation provision:
[I]f, after discovery of oil, gas or other minerals, the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional drilling or reworking operations within sixty (60) days thereafter, or (if it be within the primary term) commences or resumes the payment or tender of rentals on or before the rental paying date next ensuing after the expiration of three (3) months from the date of completion and abandonment of said dry hole or holes or the cessation of production.
On September 14, 1987, Rosalie McGlaun along with Beryl Birdwell, as lessors, executed an oil and gas lease to Rodger D. Allen, as lessee, covering the west 140 acres of the south one half of Section No. 177, Block No. 97, H & TC Ry. Co. Survey, Scurry County. The Allen lease, on a Producer's 88 Revised 9-64 lease form, provided for a primary term to expire on May 20, 1988. The Allen lease contained an identical continuous operation provision as included in the Vickers lease.
Mrs. Birdwell and Mrs. McGlaun brought a declaratory judgment suit seeking cancellation of the above leases because of the cessation of production, the failure to resume paying delay rentals within the primary term, and the failure to commence reworking operations within the 60-day time period. The pleadings alleged that Exploracion De La Estrella Soloataria Incorporacion (Spanish for Lone Star Exploration Incorporated) owned all of the working interest in the Vickers lease subject to a reservation of a leasehold interest (commonly called a working interest) which would vest after payout in Robert H. Rex and John Vickers. The pleadings also alleged that Mamie Jo Cope owned an overriding royalty interest in this lease. Marquis Petroleum, Inc. and Exploracion were alleged to have owned all the working interest in the Allen lease subject to the after payout interest of Rex and Vickers and the overriding royalty interest of Mamie Jo Cope. After appellants had filed their amended answer, Vickers and Rex each filed disclaimers as to any interest they might have owned in the leases.
At trial, appellants asserted that there had been continuous production and, alternatively, that there had been reworking operations that perpetuated the leases. *552 Also, appellants contended that, by execution of division orders, Mrs. Birdwell and Mrs. McGlaun, as lessors, had revived the leases. Further, Exploracion urged that, because of the lessors' repudiation of their leases, it, as operator, was excused from conducting further operations on the leases.
The trial court found in its Finding of Fact No. 4 that the Vickers lease terminated on September 14, 1989, because of the cessation of production and in its Finding of Fact No. 6 that the Allen lease terminated on May 20, 1988, because of the cessation of production.
Because the discussion is germane to a full understanding of the underlying dispute and the other points, we will first address appellants' sixth and seventh points of error complaining that, as a matter of law, the evidence establishes that there was production for the time periods from November 1989 through June 1990 and that, as a matter of law, there were work-over operations performed on the leases that would have perpetuated the leases.[1]
Karl Thiel, District Director for the Texas Railroad Commission, testified that there was one producing well on the Vickers lease. The operator of that well filed production reports with the Commission. These reports recorded production for the years 1987 and 1988; however, those reports showed no production from the years 1989, 1990, 1991, and 1992. The Commission's records showed reported production from one well on the Allen lease for 1987 and 1988 with no production reported for the years 1989, 1990, 1991, and 1992. The Commission imposed a pipeline severance on both leases and ordered both wells plugged: the well on the Vickers lease in June of 1989 and the well on the Allen lease in May of 1989.
Mrs. Birdwell said that she received royalty checks from the Vickers lease in 1987 and 1988 but did not receive any payments after that year. Mrs. McGlaun said that she received royalty payments in 1987 and 1988 from the Allen lease. Mrs. McGlaun also received one check in 1990 which was for production that occurred in 1987 or 1988 and for which the monies had been held in a suspense account by the oil purchaser.
Edward Glenn Cope testified on behalf of Exploracion and Marquis. Glenn Cope said that, in the months of September, October, November, and December of 1989, the two wells produced in paying quantities making 15 to 20 barrels of oil a month during this period. As evidence that there was production, Glenn Cope produced electrical bills for the eight months between November 1989 and June 1990 showing that the leases were supplied with and used electricity. As additional evidence that the Allen lease produced, Glenn Cope testified that the Birdwell-McGlaun well would flow without the aid of a pump but that it made more oil with a pump.
Ordinary minds could differ as to the conclusion to be drawn from the conflicting evidence of the existence of production in paying quantities. Consequently, the evidence does not conclusively establish that there was continuous production on the Vickers lease after September 14, 1989, and on the Allen lease after May 20, 1988. Appellants' sixth point of error is overruled.
The trial court also found in its Finding of Fact No. 4 that the Vickers lease terminated because of the absence of reworking operations on the lease for a period in excess of 60 consecutive days from September 14, 1989, and in its Finding of Fact No. 6 that the Allen lease terminated for failure to conduct reworking operations within 60 consecutive days after May 20, 1988. Appellants argue in their seventh point of error that, as a matter of law, reworking operations were conducted on the two leases that resulted in production which would have perpetuated the leases.
*553 Mark Glass, Mrs. Birdwell's son-in-law, testified that he was physically on the surface covered by the two leases every few weeks and that he observed no activity, either production operations or reworking operations. Glass observed that the electric motor to the pump was running but that the belts had broken and, therefore, that the pump jack was not working. Glass offered this observation as an explanation as to why Exploracion might have received electrical bills but that the bills did not necessarily mean the well was producing. Glass said that there were some heavy rains in September of 1989. During quail season, he was out on the land and saw no fresh tire tracks. Glass stated that there was no activity on the lease in 1988 or 1989.
Glenn Cope testified that work-over operations were performed on the Allen lease and produced an invoice for work-over operations from Gladco Well Service for work performed in May of 1990. Glenn Cope also produced a bill for a down-hole pump dated May 29, 1990, from Gibco Pump and Packer that was placed in this well. Glenn Cope said that Kalko Well Service performed work-over operations on the Vickers lease in November of 1988.
However, taking as an established fact that Kalko reworked the Vickers lease in November 1988, that date is some eleven months prior to September 14, 1989, the date found by the court that the Vickers lease ceased to produce. And, the Gladco Well Service reworking of the Allen lease in May of 1990 was performed more than 60 days after September 14, 1989, the date the court found that this lease had ceased to produce. Appellants have not shown that, as a matter of law, there were reworking operations conducted on the two leases within 60 days of the cessation of production. See Samano v. Sun Oil Company, 621 S.W.2d 580 (Tex.1981); Sunray DX Oil Company v. Texaco, Inc., 417 S.W.2d 424 (Tex.Civ.App.-El Paso 1967, writ ref'd n.r.e.); Bachler v. Rosenthal, 798 S.W.2d 646 (Tex.App.-Austin 1990, writ den'd). The seventh point of error is overruled.
We will now address the first two points of error in which appellants assert that there is no evidence to prove that appellants owned the leasehold interest or overriding royalty interest.[2]
A suit to cancel an oil and gas lease has been described as a suit to quiet title. McCurdy v. Morgan, 252 S.W.2d 264 (Tex. Civ.App.-San Antonio 1952, no writ); Thomason v. Ham, 210 S.W. 561 (Tex.Civ. App.-Fort Worth 1919, writ ref'd). Although he must base his action on the strength of his own title, the plaintiff in a suit to quiet title does not have to prove superior right to the property by tracing his title to the sovereignty. Humble Oil & Refining Co. v. Sun Oil Co., 191 F.2d 705 (5th Cir.1951); Katz v. Rodriguez, 563 S.W.2d 627 (Tex.Civ.App.-Corpus Christi 1977, writ ref'd n.r.e.).
Specifically, appellants urge that Mrs. Birdwell and Mrs. McGlaun failed to offer any competent probative evidence of any conveyances of the leases from Vickers and Allen to appellants. We disagree. By his testimony, Glenn Cope established himself as the president of Exploracion and the sole owner of Marquis Petroleum. Glenn Cope said that, in 1987, Marquis purchased the Vickers lease from Vickers and subsequently assigned its interest to Exploracion. *554 Glenn Cope testified at trial that his mother, Mamie Jo Cope, was the sole shareholder in Exploracion and owned all of the working interest in the two leases. The evidence is legally sufficient to prove that appellants were the owners of the leasehold and overriding royalty interest.
Further, appellants argue that, without evidence of the conveyances of the leasehold estate, appellees have not ensured that the proper parties are before the court for cancellation of the lease and cite Royal Petroleum Corporation v. Dennis, 160 Tex. 392, 332 S.W.2d 313 (1960), as authority. Royal Petroleum Corporation is not controlling. In Pirtle v. Gregory, 629 S.W.2d 919 (Tex.1982), an oil and gas case, the court held that the failure to have the proper parties before the court could not be raised for the first time on appeal. Appellants did not raise this objection at trial by exception, plea in abatement, motion to join other parties, or otherwise. Appellants' first and second points of error are overruled.
In their third point of error, appellants urge that the trial court erred in granting judgment for Mrs. Birdwell and Mrs. McGlaun because they revived the two oil and gas leases. Exploracion argues that, by virtue of executing a division order and retention of royalty payments, Mrs. Birdwell and Mrs. McGlaun, as the lessors, revived the two leases.
The doctrine of revival or notification holds that the subsequent execution of a formal document which expressly recognizes in clear language the validity of a lifeless lease revives the lease. Westbrook v. Atlantic Richfield Company, 502 S.W.2d 551 (Tex.1973); Loeffler v. King, 149 Tex. 626, 236 S.W.2d 772 (1951); McVey v. Hill, 691 S.W.2d 67, 71 (Tex. App.-Austin 1985, writ ref'd n.r.e.); George T. Bond, Note, Revival and Ratification of LeasesSynonyms or Antonyms?, 26 Baylor L.Rev. 455 (1974). In Bradley v. Avery, 746 S.W.2d 341 (Tex. App.-Austin 1988, no writ), the court, citing 4 Williams and Meyers, Oil and Gas Law, § 709 (1986), suggested that, in the absence of an express grant, a terminated oil and gas lease may be revived by the mere execution of division orders only if detrimental reliance is found on the part of the lessee.
The division orders were on forms provided by Permian (the crude oil purchaser), were dated February 7, 1990, and were signed after the cessation of production. Mrs. Birdwell and Mrs. McGlaun stated that they executed the division orders to recover monies held in suspense by the purchaser for prior production in 1987 and 1988.
In its findings of fact, the trial court found that the division orders contain no express language pursuant to which an executing party could ratify or revive the lease. Although the division order forms contained an adequate property description of the lease, the division orders did not contain language granting an estate in land or any express language that would effect a revival of the lease. Appellants have not shown that they detrimentally relied upon the execution of the division orders. Bradley v. Avery, supra. See also Exxon Corporation v. Middleton, 613 S.W.2d 240 (Tex.1981); Simonds v. Stanolind Oil & Gas Co., 134 Tex. 332, 136 S.W.2d 207 (1940); Ladd Petroleum Corporation v. Eagle Oil and Gas Company, 695 S.W.2d 99 (Tex.App.-Fort Worth 1985, writ ref'd n.r.e.); Texas & Pacific Coal & Oil Co. v. Kirtley, 288 S.W. 619 (Tex.Civ.App.-Eastland 1926, writ ref'd n.r.e.). Appellants' third point of error is overruled.
In their fourth point of error, appellants complain that the lessors' repudiation of the leases relieved them from any obligation to conduct operations on the land.
Repudiation of a lease by a lessor relieves the lessee from any obligation to conduct any operation on the land in order to maintain the lease in force while a judicial resolution of the controversy between the lessee and lessor over the validity of the lease is pending. Kothmann v. Boley, 158 Tex. 56, 308 S.W.2d 1 (1957); Cheyenne Resources, Inc. v. Criswell, 714 S.W.2d 103 (Tex.App.-Eastland 1986, no writ). The doctrine of repudiation is a variation of the doctrine of estoppel. Kothmann v. Boley, supra.
*555 Mrs. Birdwell and Mrs. McGlaun considered the leases terminated. When Exploracion reentered the leased premises and attempted to put the wells back in production, Mrs. Birdwell and Mrs. McGlaun directed their attorney to write a demand letter to appellants. On June 6, 1990, their attorney wrote appellants requesting a release of the leases and demanding that appellants cease further operation on the properties. Appellants urge that this repudiation excused their further performance under the leases.
However, for the doctrine of repudiation to apply, the lease must be subsisting. Cheyenne Resources, Inc. v. Criswell, supra. We have previously held that there is sufficient evidence to support the trial court's findings that the leases terminated under their own terms 60 days after May 20, 1988, and September 14, 1989. The trial court found that both leases had terminated prior to June 18, 1990, the date appellants received appellees' demand letter. Because the leases had already terminated, an excuse of performance because of the repudiation on June 6, 1990, would not perpetuate the leases. Appellants' fourth point of error is overruled.
In their fifth point of error, appellants assert that their strict performance was excused by virtue of the force majeure clause contained in the two leases. Exploracion contends that three acts of theft and vandalism prevented it from producing the leases, invoked the force majeure clause of the leases, and extended the time within which they were allowed to resume production under the terms of the leases. Exploracion complains that, before they could remedy the acts of vandalism, Mrs. Birdwell and Mrs. McGlaun repudiated their leases. The pertinent part of the force majeure clause contained in the leases is as follows:
When drilling or other operations are delayed or interrupted by ... or as a result of any cause whatsoever beyond the control of the lessee, the time of such delay or interruption shall not be counted against lessee, anything in this lease to the contrary notwithstanding.
Glenn Cope testified: that a circulating pump was stolen from the Allen lease in May of 1989; that someone had removed several hundred barrels of oil from the storage tanks on the Vickers lease during the months of September, October, November, and December of 1989, pumping the oil back into the ground; and that the electrical power pole supplying electricity to the two leases had been pushed over by a tractor in June of 1989. Glenn Cope suggested that the surface tenant farmer may have done these acts and, as such, that the acts were beyond the control of Exploracion.
The trial court found that these acts would not have invoked the force majeure clause. Assuming without agreeing that the force majeure clause did apply, Exploracion has not shown that its delays in resuming production were justified. The circulating pump was stolen in May of 1989 from the Allen lease, but the lease had previously terminated in May of 1988. Oil from the Vickers lease was reinjected in December of 1989, but that lease had terminated for lack of production in September of 1989. Unlike the acts of theft in Casey v. Western Oil and Gas, Inc., 611 S.W.2d 676 (Tex.Civ.App.-Eastland 1980, writ ref'd n.r.e.), theft or reinjection of the oil did not prevent Exploracion from resuming production of the lease. Power was discontinued to both leases in June of 1989, 3 months before the Vickers lease terminated and 13 months after the Allen lease terminated. The leases were repudiated in June of 1990, one year after the pump was stolen, six months after the oil was reinjected, and one year after the power was disconnected. Exploracion has not shown any justification for the unexplained delays in returning the leases to producing status. The force majeure clause, if applicable, does not justify these delays. Appellants' fifth point of error is overruled.
The judgment of the trial court is affirmed.
NOTES
[1] An issue is conclusively established when the evidence is such that there is no room for ordinary minds to differ as to the conclusion to be drawn from it. Triton Oil and Gas Corporation v. Marine Contractors and Supply, Inc., 644 S.W.2d 443 (Tex.1982)
[2] A "no evidence" point may only be sustained when the record discloses one of the following: (1) a complete absence of the evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla of evidence; or (4) the evidence establishes conclusively the opposite of a vital fact. Marifarms Oil & Gas, Inc. v. Westhoff, 802 S.W.2d 123 (Tex.App.-Fort Worth 1991, no writ); Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361 (1960).
In determining a "no evidence" point, we must consider only the evidence and inferences which tend to support the finding and disregard all evidence and inferences to the contrary. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951); Cox v. Stowers, 786 S.W.2d 102 (Tex. App.-Amarillo 1990, no writ). If there is any evidence of probative force to support the finding, the point must be overruled and the finding upheld. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1779804/ | 828 S.W.2d 101 (1992)
HURD ENTERPRISES, LTD., Killam & Hurd, Ltd., & Killam and Hurd, Appellants,
v.
Fred M. BRUNI, Ernest M. Bruni & Ernesto Ramirez as Trustees of the Bruni Mineral Trust No. 2, Appellees.
No. 04-90-00330-CV.
Court of Appeals of Texas, San Antonio.
February 12, 1992.
Rehearing Denied April 14, 1992.
*103 Richard N. Hansen, Law Offices of Richard N. Hansen, Laredo, Bertrand C. Moser, Paul Herrmann, William Pannill, Pannill & Moser, Houston, Emilio Davila, Jr., Laredo, William C. Denton, Conoco, Inc., William M. Sutton, Exxon Co., U.S.A., Michael L. Homeyer, Amoco Corp., Everard A. Marseglia, Jr., Jo Ann P. Russell, Butler & Binion, Houston, for appellants.
Steve A. Whitworth, Donato Ramos, George J. Person, Person, Whitworth, Ramos, Borchers & Morales, Laredo, for appellees.
Before REEVES, C.J., and BUTTS and BIERY, JJ.
OPINION
BIERY, Justice.
This is an appeal from a jury verdict and judgment thereon in a suit to recover royalty on a take-or-pay settlement and damages for breach of an asserted duty of good faith and fair dealing. We reverse and render judgment that the appellees take nothing on their claims.
In 1974, the trustees of the Bruni Mineral Trust[1] (Bruni) entered into an oil and gas lease with Killam & Hurd, Ltd.[2] The net effect of the lease was that Bruni conveyed all of the oil and gas estate to Killam & Hurd, Ltd. Killam and Hurd took on the risk and expense of exploration and drilling; Bruni was to receive a one-eighth royalty if, as, and when oil and gas was produced. Nine producing gas wells were completed on the lease premises, and gas production from two of the wells was marketed under a gas purchase contract between Killam & Hurd, Ltd. and United Texas Transmission Company (UTTCO). The gas purchase contract provided for a 15-year term and included a take-or-pay *104 provision.[3] Shortly after the gas contract was signed, the gas market collapsed and by 1984, UTTCO was buying only five to ten percent of the contract amount and refused to pay for the gas not taken. Hurd could not sell the gas elsewhere because the contract contained a dedication clause; therefore, Hurd strived to obtain marketing concessions from UTTCO. The contract was amended in January of 1986 to lower the contract price gradually, and a second amendment was made at the end of 1986, to allow either party to change the price of the gas by giving 30 days' notice. Hurd's next mission was to obtain a release of the dedication clause so it could market the gas elsewhere. The release was obtained and in exchange, UTTCO received a volume credit under the contract for gas sold to others. Hurd was still in a predicament because the only pipeline available to transport the gas to other markets was owned by UTTCO which demanded a high transportation fee. In response, Hurd invested $1.5 million in a pipeline to compete with UTTCO, and UTTCO reduced its transportation rate by 17 cents per Mcf.[4]
In the meantime, the owner of the other fifty percent interest, Killam Oil Company, sued UTTCO for take-or-pay deficiencies arising under the gas purchase contract. A cash settlement was reached, and Killam dismissed its suit. Hurd negotiated a settlement with UTTCO without filing suit, and Hurd released UTTCO from all prior claims under their 1981 contract for takeor-pay deficiencies and agreed to cancel the contract. At the request of UTTCO, the settlement agreements were to be kept confidential; however, Bruni learned of the Killam settlement and made demand for its royalty share. When Killam refused the Bruni demand, Bruni filed suit against Killam. Hurd was later added as a defendant when Bruni learned of Hurd's settlement with UTTCO during the course of the Killam discovery.
Cross motions for summary judgment were filed. The trial court concluded as a matter of law that the gas royalty clause was applicable to the settlement payments and rendered judgment for Bruni. The trial court severed the royalty claim, and Killam and Hurd appealed the partial summary judgment to this Court. The remaining issues were tried before a jury[5] and the following verdict was rendered:
1. Bruni was entitled to $98,048 as its share of the royalty interest of the settlement that Hurd obtained from UTTCO.
2. Hurd did not fail to reasonably market the gas by (a) agreeing to the two contract amendments and (b) settling the contract claims as it did.
3. A confidential relationship existed between Hurd Enterprises, Ltd. and the Bruni Mineral Trust.
4. Hurd did not breach its duty of good faith and fair dealing in regard to its marketing obligations by agreeing to the two contract amendments but did breach its duty of good faith and fair dealing by settling the contract claims as it did.
*105 5. The breach was a proximate cause of the damages sustained by Bruni in the amount of $183,926.
6. Bruni was not entitled to punitive damages.
7. Bruni was entitled to attorney's fees in the amount of $198,000 for trial and $25,000 for appeal in its claim against Hurd for its royalty share of the UTCO settlement.
After the final judgment was entered, this Court issued its opinion on the previously severed motion for summary judgment concerning the royalty. We held, as a matter of law, that Bruni was not "entitled to royalties on the settlement proceeds arising from the take-or-pay provision of the contract between Killam, Hurd, and UTTCO." Killam Oil Co. v. Bruni, 806 S.W.2d 264, 268 (Tex.App.San Antonio 1991, writ denied). The summary judgment granted in favor of Bruni was reversed, and judgment was rendered in favor of Killam Oil and Hurd Enterprises. Hurd brought its appeal from the jury trial, and oral argument was heard prior to the supreme court denying writ on the first Bruni decision. In its appeal, Hurd asserts three points of error contending the court erred in granting Bruni judgment because: (1) there is no duty of good faith and fair dealing in a lessor-lessee case, and there is no evidence to support the verdict; (2) Bruni is not entitled to share in the take-or-pay settlement because a royalty owner is not entitled to share in the settlement; and (3) Bruni is not entitled to attorney's fees because Hurd has no contractual liability.
In the second point of error, Hurd contends the trial court erred in granting Bruni judgment for royalty on Hurd's settlement with UTTCO because a royalty owner is not entitled to share in a take-orpay settlement. Hurd requests that we reverse, as a matter of law, that portion of the judgment awarding $98,048 in royalty to Bruni because in the first appeal, this Court has already ruled that Hurd owes no royalty to Bruni.
In response to Hurd's argument, Bruni argues that although the settlement was labeled as a "take-or-pay settlement," the experts testified at trial that the settlement was not a take-or-pay settlement because there was no right of recoupment.[6] The jury, however, was not asked to determine whether the settlement was in fact a "takeor-pay" settlement but rather, based on the district court's ruling on the partial summary judgment that Bruni was entitled to royalty, was simply asked what amount Bruni's royalty share should be. Bruni also asks that we consider the arguments that it made in its Application for Writ of Error to the Texas Supreme Court. In addition, after oral argument in this case, Bruni filed a supplemental brief with this Court requesting that we reconsider our ruling on the royalty issue because the Fifth Circuit Court of Appeals reversed the district court in Frey v. Amoco, 708 F. Supp. 783 (E.D.La.1989), and allowed the royalty owners to share in the take-or-pay settlement. Frey v. Amoco Prod. Co., 943 F.2d 578 (5th Cir.1991). Bruni urges us to consider this decision and likewise find that it is entitled to its proportionate share of the settlement monies paid to Hurd.
The 5th Circuit Court in Frey distinguishes its previous decision in Diamond Shamrock Exploration Co. v. Hodel, 853 F.2d 1159 (5th Cir.1988), which did not allow royalty owners to share in the settlement and which is cited by this Court in the first Bruni decision, in three ways: (1) the cases concern different lease language; (2) federal law was applied in the Diamond Shamrock decision but the Frey decision was based on Louisiana law; and (3) the lessor wrote the lease in Diamond Shamrock whereas the lessee prepared the lease and presented it to the lessor for execution *106 in Frey. Bruni contends that the Frey decision should be controlling because the lease language in Frey is the same as in the lease at issue here. Subsequently, on January 8, 1992, the Fifth Circuit in Frey, granted Amoco's petition for rehearing and certified the take-or-pay royalty issue to the Louisiana Supreme Court because of its "tremendous consequences for Louisiana's gas industry and its citizens who own mineral interests in Louisiana real estate." Frey v. Amoco Prod. Co., 951 F.2d 67 (5th Cir. 1992).
In Frey, the language concerning royalty read that "the royalty on gas sold by Lessee to be one-fifth (Vs) of the amount realized at the well from such sales." The court stated that the lease provides for royalty on the amount realized from sales, not on production, and in Louisiana, a "sale is sometimes made of a thing to come: as of what shall accrue from an estate, of animals yet unborn, or such like other things, although not yet existing." (Emphasis added.) The court cites to Diamond Shamrock and this Court's first decision in Bruni by using a comparison signal which is used when the cited authority supports a proposition different from the main proposition but sufficiently analogous to lend support. The court further stated that the fact that "the Lease explicitly bases oil and miscellaneous mineralbut not gasroyalties on production strongly suggests that we not interpret production to be a prerequisite to royalties on gas."
(Emphasis added.) In the Bruni lease, the royalty clause in the lease is as follows:
The royalties to be paid by lessee are ... (b) on gas, including casinghead gas and all gaseous substances, produced from said land and sold or used off the premises or in the manufacture of gasoline or other product therefrom, the market value at the mouth of the well of one-eight of the gas so sold or used provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale.... (Emphasis added.)
In the first Bruni decision, we clearly stated that under Texas law, the term "production" in oil and gas leases means the actual physical extraction of the mineral from the soil. Killam Oil Co. v. Bruni, 806 S.W.2d 264, 267 (Tex.App.San Antonio 1991, writ denied). In addition, we also stated in the first Bruni decision that "[t]he Trust, as drafters of the lease, could have specifically included a provision allowing for royalties to be paid upon proceeds received by Killam and Hurd from settlements of disputes arising from a breach of take-or-pay provision in gas contracts," and in fact, the present lease form used by the Trust does contain such a provision. Id. at 267-68 & n. 3.
In view of this Court's first opinion, the fact that the Texas Supreme Court denied writ of error, and the distinguishing factors between the Bruni lease and the lease at issue in Frey, we apply the "law of the case" doctrine[7] and sustain the second point of error. Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.1986).[8]
*107 In its first point of error, Hurd contends that the court erred in granting Bruni judgment for the breach of the duty of good faith and fair dealing because there is no such duty in a lessor-lessee relationship, and there is no evidence to support the finding of a confidential relationship. Bruni responds that it is not the lessor-lessee relationship itself but the special relationship that arises because of the nature of the marketing of gas and the unequal bargaining position of the parties which mandates that the jury consider whether a confidential or special relationship exists giving rise to the duty of good faith and fair dealing.
The jury found that a confidential relationship existed between Hurd and the Bruni Trust and also found that Hurd breached its duty of good faith and fair dealing only with respect to its marketing obligations to the Trust by settling the November 24, 1981, contract claims in the manner it did. The jury did not find, however, that Hurd breached its duty to reasonably market the gas by settling the contract claims.
The Bruni Trust asks this court to uphold the jury's findings and impose a duty of good faith and fair dealing on Hurd based upon its settlement with UTTCO of their contract dispute. Bruni contends the evidence presented at trial showed the existence of a confidential relationship between the parties and an imbalance of bargaining power which allowed the court to impose a duty of good faith and fair dealing in this case. We disagree.
In the context of oil and gas contracts, the relationship between a lessor and a lessee has been held to be purely contractual absent some other special relationship between the parties. Cambridge Oil Co. v. Huggins, 765 S.W.2d 540, 544 (Tex.App.Corpus Christi 1989, writ denied). A unity of interest arises as a result of the lessor/lessee relationship because the parties derive mutual economic benefits from the gas production. Frank Douglass, Tort Liability Between Lessors and LesseesThe Duty of Good Faith and Fair Dealing (If Any), Punitive Damages, Royalty Owner Exposure, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINERAL LAW COURSE 1-2 (1991). It is also recognized that the parties' interests will conflict in matters of maintaining production, marketing the product, treating, testing, and reworking wells, and in appearing before administrative bodies.[9]Id. The protection for the lessor arises out of the lease agreement and is provided through the use of express covenants, like the duty to pay royalty, and through implied covenants which arise by virtue of the lessor/lessee relationship. Id. The implied covenants require the lessee to: (1) reasonably develop the premises, (2) protect the leasehold, and (3) manage and administer the lease. Cabot Corp. v. Brown, 754 S.W.2d 104, 106 (Tex.1987). The covenant to manage and administer the lease includes the duty to reasonably market the oil and gas produced from the premises. Under the duty to reasonably market, the *108 lessee Is required to market the production with due diligence and obtain the best price reasonably possible. Id. The standard applied to test the performance of the lessee in the marketing of the gas is that of "a reasonably prudent operator under the same or similar circumstances." Id. The jury did apply this standard with respect to Hurd's marketing duty and found Hurd did not breach its implied duty. However, instead of ending the inquiry at that juncture, the jury was asked if a confidential relationship existed and if so, whether Hurd breached its duty of good faith and fair dealing.
Bruni asserts that the supreme court in Texas Oil & Gas Corp. v. Hagen, 31 Tex.Sup.Ct.J. 140, 1987 WL 47847 (Dec. 16,1987), opinion withdrawn, case settled, 760 S.W.2d 960 (Tex. 1988), made it clear that a necessary prerequisite for recovery under the duty of good faith and fair dealing is a finding of a special relationship or a finding of an inherent imbalance of bargaining power between the parties. However, in Hagen the court stated that the standard of care, which the marketing duty traditionally carries, is the "prudent operator standard." Hagen, 31 Tex.Sup.CtJ. at 141. The court quoted from a previous opinion which defined the standard of care as follows:
The standard of care in testing the performance of implied covenants by lessees is that of a reasonably prudent operator under the same or similar facts and circumstances.... Every claim of improper operation by a lessor against a lessee should be tested against the general duty of the lessee to conduct operations as a reasonably prudent operator in order to carry out the purpose of the oil and gas lease, (quoting Amoco Production Co. v. Alexander, 622 S.W.2d 563 (Tex.1981).
Id.
The court further stated it had never advocated a fiduciary or "highest good faith" or "utmost good faith" standard in any oil and gas implied covenant case. "[U]nless the lease document itself creates in law a trust, or unless a relationship of trust and confidence necessarily results from the lessor-lessee relationship, the standard of conduct of the lessee cannot be appropriately categorized as fiduciary." Id. at 142; see Cabot Corp. v. Brown, 754 S.W.2d 104, 106 (Tex. 1987) (standard of care to test performance of lessee in marketing gas is that of a reasonably prudent operator under same or similar circumstances). Bruni relies on the decisions in LeCuno Oil Co. v. Smith, 306 S.W.2d 190 (Tex.Civ.App.Texarkana 1957, writ refd n.r.e), cert, denied, 356 U.S. 974, 78 S. Ct. 1137, 2 L. Ed. 2d 1147 (1958), and Amoco Prod. Co. v. First Baptist Church, 579 S.W.2d 280 (Tex.Civ.App.El Paso 1979), writ refd n.r.e., 611 S.W.2d 610 (Tex.1980), to support its claim of a higher good faith standard than that imposed by the reasonably prudent operator standard.
In LeCuno Oil, the court did require that LeCuno exercise the highest good faith in any contract it entered into with regard to the royalty owner's gas. However, the court immediately pointed out that the relationship between the parties in that case was distinguishable from that found in most cases because LeCuno was both lessee and pipeline owner, a situation not present in the case before us. In Amoco v. First Baptist Church, the issue was whether there was a duty or implied covenant to market the gas at any particular price, particularly when the lease provided for royalty based on the amount realized from the sale. The evidence indicated that about twenty months after the well began producing gas, Amoco committed and dedicated the gas to long-term contracts on terms approximately one-half of the amount at which gas was then being sold to other purchasers from the same well and with no right of future price redetermination based on market increases. Amoco v. First Baptist Church, 579 S.W.2d at 284. Additionally, Amoco obtained for itself extra benefits in respect to other properties in which the appellees had no interest. The court focused on the duty owed with respect to obtaining the highest price reasonably *109 obtainable.[10] In the case before us, the jury found that Hurd did obtain the highest price reasonably possible. In addition, the supreme court in Hagen disapproved of the Amoco v. First Baptist Church decision. Texas Oil & Gas Corp. v. Hagen, 31 Tex.Sup.Ct.J. 140, 142 n. 2, 1987 WL 47847 (Dec. 16, 1987).[11] Furthermore, it has also been argued by many commentators, that no sound reason exists for distinguishing the duty owed in marketing cases from other implied covenant cases because the "reasonably prudent operator standard is sufficiently flexible to permit a gas producer to use its judgment in choosing the better alternative." ENEST E. SMITH & JACQUELINE LANG WEAVER, TEXAS LAW OF OIL AND GAS Vol. 1, § 5.4(b)(1) p. 279 (Issue 2, Butterworth 1991). However, Bruni also asserts that as to the duty of good faith and fair dealing, the jury finding is dispositive and in addition, the imbalance of the bargaining power between Bruni and Hurd is analogous to that found in the insurance context where a duty of good faith and fair dealing is applied.
In support of its insurance analogy, Bruni relies on the decisions of the supreme court in Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165 (Tex.1988), and Aranda v. Insurance Co. of North America, 748 S.W.2d 210 (Tex.1988), wherein the court found a special relationship to exist because of the parties unequal bargaining power and the nature of insurance contracts. In Arnold, a special relationship arising out of an insurance policy was found because of:
the parties' unequal bargaining power and the nature of insurance contracts which would allow unscrupulous insurers to take advantage of their insureds' misfortunes in bargaining for settlement or resolution of claims. In addition, without such a cause of action insurers can arbitrarily deny coverage and delay payment of a claim with no more penalty than interest on the amount owed. An insurance company has exclusive control over the evaluation, processing and denial of claims.
Arnold, 725 S.W.2d at 167. However, a "special relationship" cause of action in tort for breach of the duty of good faith and fair dealing was not extended to ordinary commercial contractual relationships such as the supplier-distributor relationship. Adolph Coors Co. v. Rodriguez, 780 S.W.2d 477, 481 (Tex.App.Corpus Christi 1989, writ denied). The court stated that the nature of the supplier-distributor relationship did not require special protection nor did the supplier have the same exclusive control over the distributor's business that the insurer had over the insured's claim. Id.
Likewise in the oil and gas lease context, the lessee does not have the exclusive control over the lessor as is found in the insurance contract. A lessee is not an agent with respect to the sale of the lessor's gas, because the lessor has no gas to sell. An oil and gas lease conveys to the lessee title to the gas in place, subject only to the contractual obligation to pay royalty on gas, if, as, and when produced. See Stanolind Oil & Gas Co. v. Barnhill, 107 *110 S.W.2d 746 (Tex.Civ.App.Amarillo 1937, writ refd). The parties to the lease are free to decide and to define what returns from the lease are to be regarded as "royalty." Walter Cardwell, Do Producers Owe Royalty On Take-Or-Pay Settlements?, in STATE BAR OF TEXAS AVANCED OIL, GAS AND MINERAL LAW COURSE S-2 (1991). The lease transaction offers an opportunity for the lessor to receive royalty with only limited risks (mainly, the risk the lessee will not develop the lease and that drainage will remove the oil and/or gas from under the lease before the royalty owner can receive royalty from production by its lessee). John P. Bowman, Marketing Gas to Affiliates: A Producer Perspective, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINERAL LAW COURSE T-23 (1991). On the one hand the lessee pays a bonus, takes the risks, assumes the production costs, provides lease use gas to the lessor, and in certain circumstances can lose the lease; while on the other hand the lessor can require the lessee to share information concerning exploration, production, and marketing.[12]Id. It does not appear that an imbalance of bargaining power exists generally in the lessor/lessee relationship such that more protection is needed than the reasonably prudent operator standard.
Even if the insurance analogy is correct, in determining whether an insurer has breached the duty of good faith and fair dealing, a two part test is imposed. The first part of the test requires an objective determination of whether a reasonable insurer under similar circumstances would have delayed or denied the claimant's benefits. Aranda, 748 S.W.2d 210, 213 (Tex. 1988). The second part balances the right of an insurer to reject an invalid claim, and the duty of the carrier to investigate and pay compensable claims. Carriers maintain the right to deny invalid or questionable claims and will not be subject to liability for an erroneous denial of a claim. Id. (Emphasis added). If an insurance company has a reasonable basis for denying the benefits, it cannot be guilty of bad faith and unfair dealing in settling a claim. Id.
This determination to deny the claim is not to be based on the insurer's success or failure in court on liability for the claim. The denial may be erroneous and still be in good faith if it is based upon the information which was available to the insurer at the time of the denial and which supported the denial of the claim.
St. Paul Guardian Ins. Co. v. Luker, 801 S.W.2d 614, 621 (Tex.App.Texarkana 1990, no writ). In this case, there was no settled case law which determined that Hurd owed the royalty owners royalty with respect to the settlement of a take-or-pay claim, or that Hurd was required to consult with the royalty owners, who were not third party beneficiaries to the gas contract, prior to settling the take-or pay claim. In fact, two cases have specifically held that the royalty obligations are determined from the lease agreements which are executed prior to and are wholly independent of the gas contracts. Exxon Corp. v. Middleton, 613 S.W.2d 240, 245 (Tex.1981); Texas Oil & Gas Corp. v. Vela, 429 S.W.2d 866, 870-71 (Tex.1968).[13] Hurd testified that he did not consider the settlement to belong in part to the Bruni Trust because it did not reflect gas which had been sold but was a penalty imposed upon UTTCO for *111 not performing under the contract between Hurd and UTTCO. One of the trustees even testified that this controversy was a brand new area of law as to whether a royalty owner was entitled to share in the settlement.[14] Although experts testified concerning Hurd's settlement, the opinions ranged from those who felt Hurd had not acted as a reasonably prudent operator to others who felt that Hurd had acted reasonably. In applying the reasonably prudent operator standard, the jury resolved the question in favor of Hurd. In fact, by finding that Hurd had not failed to reasonably market, meaning to "undertake such action in selling gas as a reasonably prudent operator would have done under the same or similar circumstances, having due regard for the interest of all interested parties and to obtain the highest price that was reasonably obtainable," it appears that the jury did find that Hurd did have regard for the Trust's interest. Bruni also asserts, as further evidence of the unequal bargaining power between the parties, that at no time did the Bruni Trust under its lease with Hurd have any right to take gas in kind nor did they ever exercise, either directly or indirectly, any effort with regards to the marketing of gas because the sole responsibility was on Hurd and Killam as joint operators. Bruni claims Hurd never consulted with any of the trustees in any manner with regard to the marketing of the gas on behalf of the Bruni Trust. However, as previously mentioned, it was the Bruni Trust which prepared the lease for Hurd's signature, and it could have required Hurd to consult with the Trust in marketing the gas if that had been its desire, and in fact in later leases the Trust did include such a provision.[15]See Mid-American Oil & Gas v. Borchers, 597 S.W.2d 803 (Tex.Civ.App.Eastland 1980, writ ref'd n.r.e.) (royalty owners did not want lessee and pipeline to renegotiate contract to their detriment so entered into letter agreement where they became a party to the gas contract). Moreover, there is no evidence that the Bruni Trust was in a position any different, with respect to the gas contract, than other royalty owners who enter into standard oil and gas leases. Ernest Bruni testified that the Trust had made approximately 300 leases since its inception, and the duties of the trustees were to oversee the leases, making sure other oil companies were not draining from their land, talk to oil companies about prices, invest money on behalf of the Trust, and file lawsuits on its behalf. There was no evidence that the relationship between the parties was more than that of lessor/lessee. Although the duty of utmost good faith has been recognized as the duty owed by the owner of the executive rights of the mineral estate to the non-executives, such is not the case here. Manges v. Guerra, 673 S.W.2d 180, 183 (Tex.1984) (duty requires holder of executive right to acquire for the non-executive every benefit exacted for himself). No evidence was presented that Hurd had acquired influence over the Bruni Trust or abused any confidence. The evidence does support the contention that the relationship between the parties was purely a business relationship which alone cannot establish a confidential relationship. Consolidated Gas & Equip. Co. v. Thompson, 405 S.W.2d 333 (Tex. 1966).
Recently, the supreme court in construing the relationship between a fiduciary duty and the duty of good faith stated *112 that "[t]he duty of good faith and fair dealing merely requires the parties to `deal fairly' with one another and does not encompass the often more onerous burden that requires a party to place the interest of the other party before his own, often attributed to a fiduciary duty." Crim Truck & Tractor Co. v. Navistar Int'l Transp., 823 S.W.2d 591, 592 (Tex.1992). "[A] party to a contract is free to pursue its own interest, even if it results in a breach of that contract, without incurring tort liability." Id. at 593. Bruni makes good arguments that the "reasonably prudent operator" standard is too lenient when applied to take-or-pay settlement proceeds where the right of recoupment is negotiated away. Nevertheless, given the Texas Supreme Court's language in Hagen, and other authorities cited herein, we hold that a confidential relationship must exist to give rise to the duty of good faith and fair dealing. The existence of a confidential relationship is usually a question of fact except when the issue is one of no evidence, it then becomes a question of law. Crim Truck & Tractor Co. v. Navistar Int'l Transp., 823 S.W.2d at 592. We further hold as a matter of law that no "confidential relationship" existed between Hurd and Bruni as that term is presently defined in Texas law. Point of error two is sustained.
Because points one and two are sustained, point three concerning Bruni's recovery of attorney's fees is necessarily sustained as well.
Accordingly, the judgment of the trial court is reversed, and judgment is rendered that Bruni take nothing on its claim.
NOTES
[1] The lease was executed by the Bruni Mineral Trust $ 1, Brunil's predecessor, and the lease covered 3,808 acres in Webb County.
[2] In 1981, Killam & Hurd, Ltd. dissolved and became a partnership known as Killan and Hurd. The partnership later split into two separate companies, Hurd Enterprises, Ltd. and Killam Oil Company. Each company acquired a one-half interest in the lease and in the gas purchase contract entered into with United Texas Transmission Company.
[3] The take-or-pay provision required UTTCO to take 85% of the deliverability of the wells each year or to pay for any amount less than 85% it did not take. UTTCO had five years following a deficiency to recoup gas not taken in earlier years. The contract provided for the maximum lawful price with periodic price escalations and also contained a dedication clause which prohibited the seller from disposing of the gas to any other buyer.
The purpose of the take-or-pay provision is to give the producer a continuous, stable, and assured source of revenue to cover the fixed charges such as service on its indebtedness, maintenance costs, and its initial capital investment. ERNEST E. SMITH & JACQUELINE LANG WEAVER, TEXAS LAW OF OIL AND GAS Vol. 1, § 4.6(E)(6) p. 211 (Issue 2, Butterworth 1991) (citing Diamond Shamrock Exploration Co. v. Hodel, 853 F.2d 1159 (5th Cir. 1988)).
[4] Mcf is defined as a thousand cubic feet. It is the standard unit for measuring natural gas volume. HOWARD R. WILLIAMS & CHARLES J. MEYERS, OIL AND GAS TERMS 552 (7th ed. 1987).
[5] The week before trial, Killam Oil Company settled all claims with Bruni except the claim that Killam owed Bruni royalty on the Killam-UTTCO settlement. Killam did not participate in the trial and is not a party to the appeal.
[6] Bruni raised the argument that if in the settlement between the producer and the pipeline, the right of recoupment is relinquished, this has the effect of increasing the price paid for gas produced in the past. The Federal Energy Regulatory Commission has rejected this rationale by ruling that "non-recoupable payments from gas purchasers to producers for revisions or waivers of take-or-pay obligations are not purchase payments for gas." Walter Cardwell, Do Producers Owe Royalty on Take-Or-Pay Settlements?, in STATE BAR OF TEXAS, ADVANCED OIL, GAS AND MINERAL LAW COURSE S-18 (1991).
[7] "The `law of the case' doctrine is defined as that principle under which questions of law decided on appeal to a court of last resort will govern the case throughout its subsequent stages." Hudson, 711 S.W.2d at 630.
[8] We recognize there are cogent arguments concerning the royalty owner's interest in take-orpay settlement funds, especially when, as here, the settlement terminates the purchaser's recoupment rights. One argument asserts that "if the gas purchase contract entitles the producer to retain take-or-pay proceeds, even though the pipeline never makes up the gas paid for, such proceeds have had the practical effect of increasing the price paid for gas actually produced. The lessor should be entitled to a royalty on these proceeds once the make-up right has terminated." ERNEST E. SMITH & JACQUELINE LANG WEAVER, TEXAS LAW OF OIL AND GAS Vol. 1, § 4.6(E)(6) p. 215 (Issue 2, Butterworth 1991). In addition, "[i]f the settlement terminates the pipeline's right to make-up gas not taken during the period covered by the settlement, the royalty owner will have no later opportunity to claim part of the settlement as gas is produced. Indeed, once the gas is produced, it may well be sold under a new contract which establishes a price significantly lower than the price provided for in the disputed take or pay clause." Id. at 215-0. A similar argument claims that "[a]ssuming that the [take-orpay] payment extinguishes the pipeline's makeup right with respect to gas not taken in the prior period, as is the usual case, the royalty owner has no subsequent opportunity to receive a share of the lump sum payment. Nor is the paid for but unproduced gas likely to be produced and sold under a subsequent contract at a price nearly as high as the original contract price." Frank Douglass, Tort Liability Between Lessors and LesseesThe Duty of Good Faith and Fair Dealing (If Any), Punitive Damages, Royalty Owner Exposure, in STATE BAR OF TEXAS, ADVANCED OIL, GAS AND MINERAL LAW COURSE 1-10 (1991) (citing Pierce, Lessor/Lessee Relations in a Turbulent Gas Market, 38 Oil & Gas Inst. sec. 1, 19-20 (Matthew Bender 1988)). "The legal issue is whether the nonrecoupable take-or-pay payment is compensation for past and/or future gas production, or whether it represents payment for the producer having the gas available but not producing it, i.e. storing the gas for the purchaser's benefit." Id. The recoupment issue, however, was not submitted in the case before us. Therefore, we are persuaded that current Texas precedent, which we are bound to follow, the drafting of the particular lease language by the appellees, and the procedural posture of the case require us to leave in place our earlier ruling.
[9] "For example, an eager lessor's interests are fulfilled when the lessee undertakes expensive operations to improve or maintain production. Yet, a cautious lessee will commit itself to an expensive course of action only after receiving some reasonable assurance of a compensating increase in its share of production and proceeds therefrom." Frank Douglass, Tort Liability Between Lessors and LesseesThe Duty of Good Faith and Fair Dealing (If Any), Punitive Damages, Royalty Owner Exposure, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINEAL LAW COURSE 1-2 (1991).
[10] One commentator has argued that the "good faith" language in Amoco v. First Baptist Church, is not a higher standard but just one aspect of the reasonable prudent operator standard. The reasonable prudent operator standard is comprised of three elements: to act in good faith, with competence, and with due regard to the interest of the lessor as well as its own interest. John S. Lowe, Developments in Nonregulatory Oil and Gas Law, 39 INST. ON OIL 1.03(2)(b) p. 1-17 to 1018 & n. 68 (1988).
[11] The court states:
Amoco Production Co. v. First Baptist Church of Pyote, was announced by the court on November 5, 1980. In this case, the court of appeals recognized an implied covenant by the working interest owner to act in good faith in marketing the gas of its royalty owners. Later, on September 21, 1981, our court announced its decision in Amoco Production Co. v. Alexander, 622 S.W.2d 563 wherein the court held that the standard of care owed by lessees to lessors in fulfilling implied covenants was that of a reasonably prudent operator. Being the latest pronouncement by this court on the question of the duty of lessees to their lessors, Alexander is dispositive on this issue.
[12] Because take-or-pay provisions are intended to apportion the risks of natural gas production, it follows that the benefits from those provisions should not be shared by royalty owners. Royalty owners are allowed to reap the benefits through royalty payments without having to shoulder the associated risks of exploration, production, and development. Walter Cardwell, Do Producers Owe Royalty On Take-Or-Pay Settlements?, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINERAL LAW COURSE S-7 (1991) (citing Diamond Shamrock Exploration Corp. v. Hodel, 853 F.2d 1159, 1167 (5th Cir.1988)).
[13] It seems to follow that because the lessors are not subject to the burdens of gas contracts, they are also not entitled to the take-or-pay benefits unless expressly provided for in the lease. Frank Douglass, Tort Liability Between Lessors and LesseesThe Duty of Good Faith and Fair Dealing (If Any), Punitive Damages, Royalty Owner Exposure, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINERAL LAW COURSE Ml (1991)
[14] Because of the confusion in the take-or-pay settlement area, the Bruni Trustees understandably were compelled to pursue the claim in order to fulfill their own fiduciary responsibilities.
[15] It is recommended that a provision be included in the lease which "contractually entitles the royalty owner to share in not only contractual take or pay and similar benefits but also in any benefits derived from the modification, amendment or termination of such provision." Donato D. Ramos, Direct Marketing IssuesRoyalty Owner's Perspective, in STATE BAR OF TEXAS ADVANCED OIL, GAS AND MINERAL LAW COURSE U-9 (1991) (footnote omitted). The lease should also provide that the operator provide in its gas purchase contract that the royalty owner is a third party beneficiary. Id. In addition, it is also recommended that the standard of conduct paragraph or clause be drafted in a manner that it "does not foreclose the royalty owner from being able to pursue an action in tort against the operator where warranted for breach of the standard." Id. at U-13. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2276436/ | 10 Cal. Rptr. 3d 477 (2004)
116 Cal. App. 4th 566
The PEOPLE, Plaintiff and Respondent,
v.
Christopher CONLEY, Defendant and Appellant.
No. D042716.
Court of Appeal, Fourth District, Division One.
March 3, 2004.
*479 Casey Gwinn, City Attorney, Susan M. Heath, Assistant City Attorney, and David M. Stotland, Deputy City Attorney, for Plaintiff and Appellant.
Cleary & Sevilla and John J. Cleary, San Diego, for Defendant and Respondent.
*478 McDONALD, J.
Defendant Christopher Conley, a peace officer then employed by the Sheriff of San Bernardino County, was involved in an off-duty incident that resulted in his conviction of one count of misdemeanor battery. At the sentencing hearing, Conley petitioned for an order under Penal Code section 12021, subdivision (c)(2)[1] relieving him of the 10-year firearm prohibition prescribed by section 12021, subdivision (c)(1). The trial court granted Conley's petition and the People appealed the order to the Appellate Division of the Superior Court, which reversed the trial court's order without opinion. This court granted Conley's petition for transfer (Cal. Rules of Court, rule 62 et seq.) and we now consider whether the trial court erred in concluding Conley was eligible for the relief provided by section 12021, subdivision (c)(2).
I
FACTUAL AND PROCEDURAL BACKGROUND
In September 2000 Conley was employed by the San Bernardino County *480 Sheriff's Department as a deputy sheriff. In the early morning hours of September 28, Conley was asleep in the open bed of his truck when the victim (Mr. Jiminez) approached and woke Conley by rocking the truck. After an exchange of words, Conley struck Jiminez. As a result of the incident, Conley's employment was terminated by the San Bernardino County Sheriff's Department.
A jury convicted Conley of one count of battery (§ 242/243, subd. (a)) and the court granted Conley two years' probation. At sentencing, Conley petitioned under section 12021, subdivision (c)(2) for an order relieving him of the 10-year firearm prohibition prescribed by section 12021, subdivision (c)(1), and submitted evidence that he had been a good deputy sheriff prior to the incident and wished to return to a law enforcement career. The trial court granted the petition. The People appealed the order to the Appellate Division, which reversed the trial court's order without opinion, and this court granted Conley's petition for transfer of the appeal to this court.
II
ANALYSIS
A. The People May Pursue This Appeal
Conley argues that a judgment entered by a San Diego Superior Court judge in a prior case to which the People were a party (the prior judgment) precludes the People from appealing the present order relieving Conley of the section 12021, subdivision (c)(1) firearm prohibition. He argues the present appeal violates the injunctive aspect of the prior judgment and should therefore be dismissed. He alternatively asserts the prior judgment collaterally estops the People from relitigating whether section 12021, subdivision (c) is unconstitutional under the equal protection clauses of the California and United States Constitutions.
The Prior Judgment
In 1999 the trial court issued the prior judgment, ruling that section 12021, subdivision (c) violated the equal protection clauses of the California and United States Constitutions because the distinctions drawn by that subdivision did not have a rational basis.[2] The court concluded a peace officer may not be barred from possessing a firearm under section 12021, subdivision (c) based on a conviction for simple battery, and issued an injunction (1) barring the San Diego City Attorney and San Diego County District Attorney from "prosecuting any peace officer ... under Penal Code section 12021(c)(1) where the underlying conviction is for Penal Code section 242, simple battery" and (2) barring the San Diego Police Department and City of San Diego from "enforcing Penal Code section 12021(c)(1) against any peace officer employed by the San Diego Police Department based on a legal disability imposed by that statute as a result of a *481 conviction for simple battery" or terminating the employment of the officer "based on a legal disability imposed by that statute as a result of a conviction for simple battery...." (SDPOA, supra, No. 727415, at pp. 3-4.)
The Injunction Issue
Conley argues the People may not pursue this appeal because it would violate the prior judgment's injunction against "prosecuting any peace officer ... under Penal Code section 12021(c)(1)" if the underlying conviction is for simple battery.[3] However, the People are not "prosecuting" Conley under section 12021, subdivision (c)(1), which imposes criminal sanctions if a person subject to the firearm prohibition is found in possession of a firearm. Conley is not charged in this proceeding with a violation of section 12021, subdivision (c)(1). Rather, the People seek reversal of the order entered under section 12021, subdivision (c)(2), relieving Conley of the section 12021, subdivision (c)(1) firearm prohibition. This appeal does not violate the injunction.
The Collateral Estoppel Issue
Conley also asserts the prior judgment, holding section 12021, subdivision (c) unconstitutional under the equal protection clauses of the California and United States Constitutions, collaterally estops the People from relitigating the enforceability of subdivision (c). We are not persuaded by this assertion for two reasons. First, although collateral estoppel may bar a party from relitigating identical factual issues actually and necessarily decided against the party in a prior final judgment (People v. Sims (1982) 32 Cal. 3d 468, 484-490, 186 Cal. Rptr. 77, 651 P.2d 321), Conley cites no authority that prior purely legal determinations by a trial court are accorded collateral estoppel effect in later proceedings. (See In re Pedro C. (1989) 215 Cal. App. 3d 174, 181, 263 Cal. Rptr. 428 [second court not bound by decision of first court on purely legal issue].) Second, even assuming collateral estoppel can apply to determinations on questions of law, a court may decline to apply collateral estoppel if injustice would result. (Thain v. City of Palo Alto (1962) 207 Cal. App. 2d 173, 185-186, 24 Cal. Rptr. 515.) We conclude that applying collateral estoppel would result in potential injustice because section 12021, subdivision (c) would be unenforceable in San Diego County but would remain enforceable throughout the remainder of the state, creating inconsistent results depending on the fortuity of the county in which the defendant was prosecuted. (Thain, supra; see also People v. Mendez (1991) 234 Cal. App. 3d 1773, 1784, 286 Cal. Rptr. 216.) We therefore decline to give collateral estoppel effect to the prior order.
B. Conley Does Not Qualify for Relief Under Section 12021, Subdivision (c)(2)
The People assert Conley does not qualify for the relief provided by section 12021, subdivision (c)(2) because he was convicted of an offense not included within the narrowly drawn class of offenses for which relief from the firearm prohibition may be granted.[4]
*482 The Statutory Scheme
Section 12021 provides that persons convicted of a felony or certain other offenses are forever prohibited from owning or possessing a firearm (§ 12021, subds.(a), (b)), and persons convicted of specified misdemeanor or other listed offenses are prohibited from owning or possessing a firearm for 10 years. (§ 12021, subd. (c)(1).)[5]
However, the Legislature has carved a narrow avenue of relief from the 10-year ban by providing "the [10-year] prohibition in [subdivision (c)(1)] may be reduced, eliminated, or conditioned as provided in [subdivision (c)(2)]." (§ 12021, subd. (c)(1).)
Subdivision (c)(2) provides: "Any person employed as a peace officer described in Section 830.1, 830.2, 830.31, 830.32, 830.33, or 830.5 whose employment or livelihood is dependent on the ability to legally possess a firearm, who is subject to the prohibition imposed by this subdivision because of a conviction under Section 273.5, 273.6, or 646.9, may petition the court only once for relief from this prohibition.... Upon making each of the following findings, the court may reduce or eliminate the prohibition, impose conditions on reduction or elimination of the prohibition, or otherwise grant relief from the prohibition as the court deems appropriate:
Finds by a preponderance of the evidence that the petitioner is likely to use a firearm in a safe and lawful manner.
Finds that the petitioner is not within a prohibited class as specified in subdivision (a), (b), (d), (e), or (g) or Section 12021.1, and the court is not presented with any credible evidence that the petitioner is a person described in Section 8100 or 8103 of the Welfare and Institutions Code.
Finds that the petitioner does not have a previous conviction under this subdivision no matter when the prior conviction occurred. [¶] In making its decision, the court shall consider the petitioner's continued employment, the interest of justice, any relevant evidence, and the totality of the circumstances. The court shall require, as a condition of granting relief from the prohibition under this section, that the petitioner agree to participate in counseling as deemed appropriate by the court. Relief from the prohibition shall not relieve any other person or entity from any liability that might otherwise be imposed. It is the intent of the Legislature that courts exercise broad discretion in fashioning appropriate relief under this paragraph in cases in which relief is warranted. However, nothing in this paragraph shall be construed to require courts to grant relief to any particular petitioner. It is the intent of the Legislature to permit persons who were convicted of an offense specified *483 in Section 273.5, 273.6, or 646.9 to seek relief from the prohibition imposed by this subdivision." (Italics added.)
Analysis
We first determine whether Conley was within the class of persons who may seek discretionary relief from the firearm prohibition.[6] "We begin with the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent. [Citations.] `In determining intent, we look first to the language of the statute, giving effect to its "plain meaning."' [Citations.] Although we may properly rely on extrinsic aids, we should first turn to the words of the statute to determine the intent of the Legislature. [Citation.] Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history. [Citation.]" (Burden v. Snowden (1992) 2 Cal. 4th 556, 562, 7 Cal. Rptr. 2d 531, 828 P.2d 672; see also Lungren v. Deukmejian (1988) 45 Cal. 3d 727, 735, 248 Cal. Rptr. 115, 755 P.2d 299["[i]f the [statutory] language is clear and unambiguous[,] there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature"].)
We conclude Conley is not within the narrow class of persons entitled to seek relief from the firearm prohibition under section 12021, subdivision (c)(2). Conley was convicted of violating section 243, thereby invoking the 10-year prohibition under section 12021, subdivision (c)(1). The plain language of subdivision (c)(2), the only legislatively-prescribed exemption available to Conley, permits certain peace officers who are "subject to the prohibition imposed by this subdivision because of a conviction under Section 273.5, 273.6, or 646.9" to seek the relief permitted under subdivision (c)(2). Conley was not subject to the prohibition based on a conviction for violating sections 273.5, 273.6, or 646.9, and therefore under the plain language of the statute does not qualify for relief.
Conley acknowledges the Legislature listed nearly 50 statutes the violation of which carries the 10-year firearm prohibition, but expressly authorized relief from the prohibition for convictions under only three of the listed statutes. However, Conley nevertheless asserts that, because the Legislature declared its intent was to allow relief to persons convicted of "an offense specified in Section 273.5" (§ 12021, subd. (c)(2)), we may and under the rule of lenity (People v. Hernandez (2003) 30 Cal. 4th 835, 869, 134 Cal. Rptr. 2d 602, 69 P.3d 446) should construe the statute to allow relief for peace officers convicted of violating section 243 because section 243 is a lesser included offense in one of three enumerated offenses for which relief is available. (See People v. Thurston (1999) 71 Cal. App. 4th 1050, 1053-1055, 84 Cal. Rptr. 2d 221 [treating section 273.5 as form of aggravated battery].) However, Conley's construction minimizes consideration of the statutory language as a whole, and instead emphasizes the single preposition "in" to expand the narrow list of qualifying offenses into a broader list that potentially includes numerous *484 offenses. Furthermore, a maxim of statutory construction states that the expression of certain items in a statute necessarily involves exclusion of other things not expressed. (Fischer v. Los Angeles Unified School Dist. (1999) 70 Cal. App. 4th 87, 97, 82 Cal. Rptr. 2d 452; see also In re Bryce C. (1995) 12 Cal. 4th 226, 231, 48 Cal. Rptr. 2d 120, 906 P.2d 1275.) Because the Legislature has demonstrated its ability to identify the offenses that impose the 10-year prohibition and to identify the subset of those offenses that qualify for relief from the prohibition, we decline to add to the subset articulated by the Legislature under the guise of interpretation.
Conley next argues that interpreting section 12021, subdivision (c)(2) to permit relief for the three listed offenses but excluding relief for other offenses, including a violation of section 242, creates an arbitrary and irrational classification violating the equal protection clauses of the California and United States Constitutions. However, equal protection is not violated by a legislative scheme that distinguishes between different groups of persons if the classification bears a rational relationship to a legitimate public purpose. (People v. Acuna (2000) 77 Cal. App. 4th 1056, 1061, 92 Cal. Rptr. 2d 224.) When, as here, the classification is not based on a suspect class and does not involve a fundamental right, we evaluate the classification under the "rational basis" test and determine only if the classification "bears a fair relationship to a legitimate public purpose." (In re Evans (1996) 49 Cal. App. 4th 1263, 1270, 57 Cal. Rptr. 2d 314.) We remain "[m]indful of the deference we must accord the Legislature under the rational basis standard" (Kasler v. Lockyer (2000) 23 Cal. 4th 472, 482, 97 Cal. Rptr. 2d 334, 2 P.3d 581) and uphold a statutory classification against an equal protection challenge "if there is any reasonably conceivable state of facts that could provide a rational basis for the classification." (FCC v. Beach Communications, Inc. (1993) 508 U.S. 307, 313, 113 S. Ct. 2096, 124 L. Ed. 2d 211.)
The court in In re Evans, supra, 49 Cal. App. 4th 1263, 57 Cal. Rptr. 2d 314 recognized that in 1993, when the Legislature amended the list of offenses invoking the 10-year firearm prohibition to add three offenses that "tend to arise out of troubled personal relationships" (Evans, at p. 1271, 57 Cal. Rptr. 2d 314) (e.g., violations of sections 273.5, 273.6, or 646.9), it also significantly narrowed the group of persons eligible to seek relief from the prohibition. First, the Legislature narrowed the list of persons eligible for relief from any person whose employment or livelihood was dependent on the ability to legally possess a firearm to peace officers with that need. Second, the Legislature narrowed the list of offenses eligible for relief from any of the offenses listed in section 12021, subdivision (c)(1) to the three newly added offenses. (Evans, at p. 1267, 57 Cal. Rptr. 2d 314.) This statutory classification is supported by a reasonably conceivable state of facts providing a rational basis for treating differently the group of persons eligible for relief from other persons not similarly situated. The Legislature could reasonably conclude that a peace officer involved in a troubled domestic relationship who commits one of the listed offenses should be encouraged to plead guilty under an agreement for a probation/counseling disposition provided by sections 273.5, 273.6, or 646.9, and should not be dissuaded from seeking the benefits of the counseling contemplated by those sections by the concern that his guilty plea would necessarily carry a "career forfeiture" penalty. The court in Evans explained:
"It will be recalled that it is limited to those convicted of offenses which tend *485 to arise out of troubled personal relationships. Legislative history materials indicate that one reason for the provision was that the failure to allow for any appeal of the firearms prohibition might well discourage defendants from pleading guilty under an agreement for mandatory counseling considered a `valuable tool' in such cases, which may be uniquely suited to disposition by counseling rather than punishment. Although this appeal provision is now limited to peace officers, and does not extend to any person whose occupation requires the use of a firearm, the distinction is rational. Few other occupations require the ability to possess a firearm and none that we can think of is of such a skilled, professional, and typically long-term nature as is law enforcement. The Legislature could have reasonably determined that other persons subject to the firearms prohibition could obtain alternative employment." (Evans, at p. 1271, 57 Cal. Rptr. 2d 314.)
The Legislature could also reasonably conclude that peace officers who engage in criminal behavior toward strangers are more culpable than those whose crimes occur in the context of a dysfunctional domestic relationship, and the former group should not be accorded the same rehabilitative opportunities provided to the latter group. Because we can conceive of "facts that could provide a rational basis for the classification" (FCC v. Beach Communications, Inc., supra, 508 U.S. at p. 313, 113 S. Ct. 2096), the distinctions drawn by section 12021, subdivision (c)(2) do not offend equal protection.
Conley argues that to the extent the People contend the classification is rationally related to the public purpose of according special consideration for peace officers involved in troubled domestic relationships, limiting eligibility for relief to only those three offenses is irrational and arbitrary because the classification is both overinclusive and underinclusive. Conley asserts it is overinclusive because relief is permitted for violation of the stalking statute (§ 646.9) and only some not necessarily all victims of a violation of the stalking statute are domestic partners. He asserts it is underinclusive because a conviction for criminal threat under section 422 invokes the 10-year prohibition but the convicted peace officer is not eligible for relief even if the victim were the peace officer's domestic partner. However, the United States Supreme Court in Vance v. Bradley (1979) 440 U.S. 93, 99 S. Ct. 939, 59 L. Ed. 2d 171, applying the rational basis test to reject an analogous challenge to a legislative classification, observed at pages 108-109: "Even if the classification involved here is to some extent both underinclusive and overinclusive, and hence the line drawn by Congress imperfect, it is nevertheless the rule that in a case like this `perfection is by no means required.' [Citations.]. The provision `does not offend the Constitution simply because the classification "is not made with mathematical nicety...."' [Citation] ... [¶] Whether we, or the District Court, think Congress was unwise in not choosing a means more precisely related to its primary purpose is irrelevant.'' (Accord, Kasler v. Lockyer, supra, 23 Cal.4th at p. 487, 97 Cal. Rptr. 2d 334, 2 P.3d 581 ["The perfect can be the enemy of the good.... [T]he Legislature was not constitutionally compelled to throw up its hands just because a perfectly comprehensive regulatory scheme was not ... achievable."].) Accordingly, the fact that one of the eligible offenses sweeps more broadly than necessary to achieve the legislative purpose, or that other offenses could have been included that would have furthered the legislative purpose, does *486 not undermine our conclusion that the classification adopted by the Legislature bears a fair relationship to a legitimate public purpose.
Conley's final challenge asserts the statute violates equal protection because it could result in different disabilities for similarly situated offenders who commit battery on their domestic partners, based solely on the vagaries of whether the offender was convicted of the greater offense of violating section 273.5 (which is eligible for section 12021, subdivision (c)(2) relief) or was instead convicted on the lesser included offense of violating section 242/243, subdivision (e) (which is not eligible for section 12021, subdivision (c)(2) relief). However, Conley's section 242/243 conviction did not arise from a battery on a domestic partner victim and he therefore does not have standing to assert that equal protection claim in this case. "`One who seeks to raise a constitutional question must show that his rights are affected injuriously by the law which he attacks and that he is actually aggrieved by its operation.' [Citation.]" (People v. Cortez (1992) 6 Cal. App. 4th 1202, 1212, 8 Cal. Rptr. 2d 580, quoting People v. Black (1941) 45 Cal. App. 2d 87, 96, 113 P.2d 746.) Conley may not raise equal protection claims of other hypothetically disadvantaged peace officers as a basis to invalidate the statute's application to the circumstances of his case. (People v. Garcia (1999) 21 Cal. 4th 1, 11-12, 87 Cal. Rptr. 2d 114, 980 P.2d 829 [whether statute had hypothetical potential for equal protection violation "must await a case in which it is actually presented"]; People v. Superior Court (Manuel G.) (2002) 104 Cal. App. 4th 915, 934, 128 Cal. Rptr. 2d 794.)
DISPOSITION
The order granting Conley's petition is reversed, and the trial court shall enter a new and different order denying Conley's petition.
WE CONCUR: McCONNELL, P.J., and HALLER, J.
NOTES
[1] All statutory references are to the Penal Code unless otherwise specified.
[2] The trial court noted a peace officer convicted of simple battery (§ 242) is subject to the firearm prohibition although a peace officer convicted of assault under color of authority (§ 149) is not subject to the same prohibition, and concluded this distinction did not have a rational basis. Additionally, the trial court noted a peace officer may obtain relief under section 12021, subdivision (c)(2) from the firearm prohibition if convicted of three specified offenses, including a conviction for inflicting corporal injury on a spouse (§ 273.5), but may not seek relief if he was convicted of a lesser offense of simple battery, and concluded this distinction did not have a rational basis. (San Diego Police Officers Association v. San Diego County District Attorney Paul Pfingst (Super. Ct. San Diego County, 1999), No. 727415, p. 2 (hereafter SDPOA).)
[3] Conley does not assert that pursuing this appeal violates the "enforcing Penal Code section 12021(c)(1) against any peace officer employed by the San Diego Police Department" aspect of the injunction. (SDPOA, supra, No. 727415, at pp. 3-4.)
[4] The People also assert the trial court did not have authority to grant Conley relief from the firearm prohibition because Conley did not satisfy two other predicates to relief under subdivision (c)(2): he was not employed as a peace officer at the time he petitioned for relief, and he did not need a firearm for his continued employment or livelihood. We do not evaluate those arguments because we conclude the nature of Conley's underlying conviction does not qualify him for the relief he requested.
[5] Section 12021, subdivision (c)(1) provides: "Except as provided in subdivision (a) or paragraph (2) of this subdivision, any person who has been convicted of a misdemeanor violation of Section 71, 76, 136.1, 136.5, or 140, subdivision (d) of Section 148, Section 171b, 171c, 171d, 186.28, 240, 241, 242, 243, 244.5, 245, 245.5, 246.3, 247, 273.5, 273.6, 417, 417.1, 417.2, 417.6, 422, 626.9, 646.9, 12023, or 12024, subdivision (b) or (d) of Section 12034, Section 12040, subdivision (b) of Section 12072, subdivision (a) of former Section 12100, Section 12220, 12320, or 12590, or Section 8100, 8101, or 8103 of the Welfare and Institutions Code, any firearm-related offense pursuant to Sections 871.5 and 1001.5 of the Welfare and Institutions Code, or of the conduct punished in paragraph (3) of subdivision [(g)] of Section 12072" is subject to the 10-year firearm prohibition.
[6] Where, as here, the facts are undisputed, we independently review the construction and application of the disputed statute to the undisputed facts. (Murphy v. Padilla (1996) 42 Cal. App. 4th 707, 711, 49 Cal. Rptr. 2d 722; see also Lazar v. Hertz Corp. (1999) 69 Cal. App. 4th 1494, 1502, 82 Cal.Rptr.2d 368["[w]e independently construe statutory law, as its interpretation is a question of law on which we are not bound by the trial court's analysis"].) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2608501/ | 432 P.2d 250 (1967)
78 N.M. 406
Charles CROUCH, Plaintiff-Appellant,
v.
John A. MOST, Defendant-Appellee.
No. 8191.
Supreme Court of New Mexico.
October 2, 1967.
*251 Emmett C. Hart, Tucumcari, for appellant.
Rodey, Dickason, Sloan, Akin & Robb, Robert D. Taichert, Albuquerque, for appellee.
OPINION
CHAVEZ, Chief Justice.
Plaintiff-appellant Charles Crouch filed a complaint alleging that defendant-appellee John A. Most, as a physician, negligently treated appellant for a snakebite, resulting in the amputation of the index and middle fingers of appellant's left hand. The jury returned a verdict for appellee and appellant appeals.
On August 11, 1963, appellant, an amateur snake handler, received a rattlesnake bite on the index and middle fingers of his left hand while working at a reptile garden some fifteen or twenty miles from Carlsbad, New Mexico. Suction cups and a tourniquet were immediately applied and appellant was taken to a hospital in Carlsbad in about fifteen minutes. Appellee was called and arrived within fifteen to twenty minutes. Appellee treated the snakebitten fingers by injecting "Antivenin" into the base of the fingers bitten by the snake and into the left deltoid area. The hand was packed in ice and appellant was admitted to the hospital for forty-eight hours, then dismissed with instructions that the hand be kept in ice. By August 21, 1963, appellant's fingers, hand and arm were swollen, discolored and odorous with dry gangrene. On this date, Dr. Bronnenberg took over the care of appellant because appellant and his parents had become concerned over his condition. Dr. Bronnenberg discontinued the ice treatment, put the hand on a heat pad, and commenced antibiotic shots for the gangrene and infection. The fingers, hand and arm began clearing up but the ends of the two fingers were dead. Dr. Pate, a surgeon, amputated portions of the two fingers on September 9, 1963.
"Antivenin" is a trade name for "Polyvalent Antisnakebite Serum" manufactured by Wyeth Laboratories and distributed in interstate commerce in "kit" form. The kit contains all that is needed to dissolve and inject the serum. Included, as a part of the kit, is an instruction sheet with detailed instructions making it possible for the kit to be used by the layman in the treatment of snakebites. One such instruction is: "Do not inject the serum into a finger or toe." The "Antivenin" kit, without the instruction sheet, was admitted in evidence. The instruction sheet was offered as a separate exhibit. Objection was made to this exhibit and sustained by the trial court.
The record also shows, by expert testimony, that rattlesnake bites in extremities always present a good chance of some tissue destruction, whatever the treatment; that the most probable cause of the death of the tissue in the two finger tips was the venom of the rattlesnake; that there are wide variations in accepted methods of treatment of rattlesnake bite, which is subject of continuing debate and change in the United States; and that the method of treatment chosen and used by appellee was an acceptable and accepted method of treatment. Appellant's expert witness could not say it was probable that the gangrene was caused by the treatment.
Appellant's first contention is that the instruction sheet contained in the "Antivenin" kit was admissible to establish a standard of care, and that a failure to observe the warnings contained in the instructions would amount to negligence as a matter of law.
We do not agree. Appellant apparently wanted to prove by this exhibit that the drug manufacturer stated that "Antivenin" should not be injected into a finger. The record reveals testimony on this point. Appellee testified he did not deem the instructions to be authoritative, but admitted the manufacturer of the drug advised against injecting the "Antivenin" into the finger. Dr. Evetts, appellant's expert witness, testified he personally followed the manufacturer's instruction sheet and that the directions for use stated the serum *252 should not be injected into fingers or toes. Thus, such proof got into the record so that whether or not it was error to exclude the instruction sheet is immaterial, since it was harmless error. Johnson v. Nickels, 66 N.M. 181, 344 P.2d 697.
Appellant's second contention is that the trial court erred in refusing the following requested instructions of appellant:
"8. It is the duty of a physician or surgeon in diagnosing and treating a case to use due diligence in obtaining all available facts and collecting data essential to a proper diagnosis and proper treatment. If in this case you find from the evidence that the defendant, John Most, failed to use due diligence in availing himself of or using the technical information provided by the drug manufacturer for the administration of antivenin, then you shall find the defendant liable for negligence, and if such negligence proximately caused, contributed to, or aggravated the condition requiring amputation of the fingers of the plaintiff then you shall find in favor of the plaintiff and against the defendant.
"14. You are instructed that the Court takes judicial notice of the laws of the State of New Mexico and in this connection the laws of the State of New Mexico provide that a drug shall be deemed to be misbranded unless it's labeling bears adequate directions for use and such adequate warnings against unsafe dosage or methods or duration of administration or application in such manner and form as are necessary for the protection of users.
"17. You are instructed that an exception to the rule that a physician's negligence must be based on expert testimony exists where the matters of proof are nontechnical, or involve matter of which an ordinary person would be expected to have knowledge, or whether the evidence so obviously demonstrates lack of skill or one of care as to render expert testimony unnecessary.
If you find that the defendant, John Most failed to observe and comply with warnings against the injection of antivenin into the fingers of the plaintiff, Charles Crouch, the Court takes judicial notice of the fact that such directions for use are packaged with each antivenin kit and are clearly expressed in the english language and thereby involves a matter of common knowledge."
The trial court did not err in failing to give the requested instructions because they are not a correct statement of the law. The directions in the brochure are, at best, only proof of a proper method of use. Julien v. Barker, 75 Idaho 413, 272 P.2d 718; Salgo v. Leland Stanford Jr. University Board of Trustees, 154 Cal. App. 2d 560, 317 P.2d 170. Likewise, there is no basis for applying a rule of res ipsa loquitur, which the instructions approximate. Compare, Buchanan v. Downing, 74 N.M. 423, 394 P.2d 269; Renrick v. City of Newark, 74 N.J. Super. 200, 181 A.2d 25.
Under point III, appellant contends that the trial court erred in admitting hearsay testimony. One of the issues presented during the trial of the case concerned the use of cryotherapy, the packing of the hand in ice, as a form of treatment by appellee for the period of time that he used it. Appellant, at the trial, contended that the use of cryotherapy for such an extended period of time was improper treatment and negligence on the part of appellee, and especially so in view of the manner and circumstances of the use of cryotherapy.
Appellee supported his treatment and asserted that appellant did not keep his hand in the ice as prescribed by him. Appellant, together with his father, testified that appellant did follow the doctor's instructions as to keeping his hand in the ice. *253 In support of his contention, appellee called Mrs. Kamoss, a nurse, who testified:
"Q. Did you make any personal observations with respect to the patient either keeping his hand in the ice or taking it out?
"A. I found him myself with his hand out of the ice and it was reported to me on several occasions by the other employees on the floor to which I reported.
"MR. HART: To which I object and move that it and request the Court to instruct the jury to what might have been stated to her by other persons is not admissible.
"THE COURT: What do you say counsel?
"MR. TAICHERT: I think your Honor that she can testify what came to her while in the care of this patient and her regular control and responsibility of
"THE COURT: (interposing) the objection is overruled, because the answer gave a statement reported a fact rather than a quotation. The answer will remain."
Appellant contends that the answer given by the witness with respect to what was reported to her by others was hearsay. We agree that the latter part of the answer may have been hearsay, but the error if any, was harmless. The testimony concerning the hand being out of ice was immaterial, in that the hypothetical questions asked of the doctors, who testified as expert witnesses, were on the assumption of the continued cryotherapy with no mention made of removing the hand from ice. The testimony of Doctors Gordon, Pate and Lockhart, that appellee's treatment was within recognized medical standards, was premised on appellant's version of the facts, that he used the cryotherapy diligently. Under such circumstances, the hearsay part of the witness's testimony was immaterial and, if error, it was harmless.
Appellant's fourth contention is that it was error to exclude statements made by a consulting doctor in a conversation with appellee. From the tender made by appellant on this point, it appears that Dr. Bronnenberg, who was requested as a consultant by appellant, told appellee he thought that circulation was impaired; that the hand should be out of the ice; and that there might be some infection. Simply stated, appellant's position is that the offered testimony was not hearsay or, if hearsay, was an exception to the hearsay rule. Appellant cites, as support for his argument, 20 Am.Jur., Evidence, § 555, now found in 29 Am.Jur.2d, Evidence, § 606.
In our view, it is unnecessary for us to consider whether or not it was hearsay or admissible as an exception to the hearsay rule. However, see Glass v. Stratoflex, Inc., 76 N.M. 595, 417 P.2d 201, and McCord v. Ashbaugh, 67 N.M. 61, 352 P.2d 641. Even if the offered testimony was admissible, its exclusion does not require reversal because the error, if it was error, was harmless, and the result reached in the case could not have been affected thereby. Putney v. Schmidt, 16 N.M. 400, 120 P. 720.
Under point V, appellant contends that the doctors, who testified as expert witnesses, should not have been allowed to state whether or not they thought appellee's treatment was within or without recognized standards of medical practice. Upon the basis of a hypothetical question setting out the treatment given by appellee, the doctors were asked whether or not such treatment was within accepted standards. Over objection, the doctors were permitted to testify and appellant argues this permitted the doctors to decide the ultimate issue in the case. Appellant cites Beal v. Southern Union Gas Co., 66 N.M. 424, 349 P.2d 337, 84 A.L.R. 2d 1269, for the holding that it is not the function of a witness to state where the responsibility, burden or negligence is in any given case.
*254 We cannot agree with appellant. It is settled law in this state that expert testimony is generally necessary to prove whether or not the doctor's handling of the case was within recognized standards of medical practice in the community. Cervantes v. Forbis, 73 N.M. 445, 389 P.2d 210. As held in Beal v. Southern Union Gas Co., supra, it is also the law in this state that:
"* * * [A]n expert may give his opinion on matters pertaining to his field which concern questions of fact, * *."
In Lopez v. Heesen, 69 N.M. 206, 365 P.2d 448, this court, when confronted with a similar situation, stated:
"* * * Opinion evidence on an ultimate issue of fact does not attempt or have the power to usurp the functions of the jury, and this evidence could not usurp the jury's function because the jury may still reject these opinions and accept some other view. * * *"
See also, Lewis v. Knott, 75 N.M. 422, 405 P.2d 662; Salazar v. County of Bernalillo, 69 N.M. 464, 368 P.2d 141.
In the instant case, the question of whether or not appellee's treatment was within an accepted medical standard was a factual question requiring special scientific knowledge that could best be answered by the expert witnesses.
Appellant's final contention is that a physician has a legal duty to fully and frankly disclose to the patient all facts pertinent to his case; that the physician cannot minimize known dangers; and that the trial court erred in failing to give appellant's requested instruction as follows:
"7. You are instructed that the relation existing between a patient and a physician is to the highest possible degree a fiduciary relationship involving every element of trust and confidence and that by reason of such confidential relationship, the law requires that physicians make a frank and full disclosure to an adult mentally competent patient of all facts pertinent to that patient's case."
Appellant argues that appellee failed to warn appellant of the possible gangrene and minimized known dangers in his treatment, and that such action was contrary to the following statement in Woods v. Brumlop, 71 N.M. 221, 377 P.2d 520:
"Courts have frequently said that the relation between a physician and his patient is one of trust and confidence and that the physician has the duty to make a full and frank disclosure to the patient of all pertinent facts relative to his illness and the treatment prescribed or recommended therefor. * * *"
Woods v. Brumlop, supra, is distinguishable. In that case, the doctor failed to inform and advise plaintiff of the dangers inherent in electroshock treatments, and falsely advised the patient that no danger could result from the treatment. In the instant case, there is nothing in the record showing that the damage was the consequence of the treatment by appellee. Rather, the record appears to show that the gangrene which developed in the tips of appellant's fingers was a complication of the snakebite.
Further, we do not find the degree of emergency in Woods v. Brumlop, supra, which existed in the instant case. It would indeed be most unusual for a doctor, with his patient who had just been bitten by a venomous snake, to clamly sit down and first fully discuss the various available methods of treating snakebite and the possible consequences, while the venom was being pumped through the patient's body.
In Woods v. Brumlop, supra, we stated:
"An exception to the rule requiring a disclosure of the dangers of a treatment procedure, of course, is an actual emergency where the patient is in no condition to determine for himself. * * *"
See also, 79 A.L.R. 2d 1028. We think such is the situation in the instant case. *255 Based on the foregoing, the trial court correctly refused the requested instruction.
Finding no error, the judgment is affirmed.
It is so ordered.
MOISE, J., and OMAN, J., Ct. App., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1407055/ | 725 F. Supp. 1525 (1989)
MASTER PALLETIZER SYSTEMS, INC., a Colorado corporation, f/k/a Master Conveyor Corporation, Plaintiff,
v.
T.S. RAGSDALE COMPANY, INCORPORATED, a South Carolina corporation, Defendant.
Civ. A. No. 87-B-798.
United States District Court, D. Colorado.
November 29, 1989.
*1526 *1527 Gwen S. Anderson, Law Offices of Gwen Anderson, Denver, Colo., for plaintiff.
Robert E. Warren, Jr., Peter R. Nadel, Gorsuch Kirgis Campbell Walker & Grover, Denver, Colo., for defendant.
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
BABCOCK, District Judge.
Plaintiff, Master Palletizer Systems, Inc. (Master), commenced this action alleging breach of contract and breach of the duty of good faith and fair dealing by defendant, T.S. Ragsdale Company, Incorporated (Ragsdale), in connection with the sale and installation of a palletizing system (system). Ragsdale counterclaims for breach of contract, deceit, intentional concealment, and punitive damages, based upon representations and concealments allegedly made both before and after contract formation. Master contends that Ragsdale's counterclaims are frivolous and groundless. Jurisdiction exists pursuant to 28 U.S.C. § 1332, and the parties stipulate that Colorado substantive law applies to this diversity action. Trial to the Court began October 30, 1989 and concluded November 8, 1989. Based upon all of the evidence and arguments presented, I enter judgment in favor of Master against Ragsdale upon the following findings of fact and conclusions of law.
I. Findings of Fact.
Master, a Colorado corporation, is in the business of building and installing industrial machinery called "palletizers." Ragsdale, a South Carolina corporation, manufactures charcoal briquets at Conway, South Carolina. The briquets are then packaged at and sold from Lake City, South Carolina.
In May 1985, Ed Diggs (Diggs) of Ragsdale contacted a Master representative regarding the purchase and installation of a system for use at Ragsdale's Lake City plant. Diggs visited Master's manufacturing *1528 facility in Colorado to inspect it and to meet with Master representatives.
In the Summer of 1985, based on its projected labor savings and independent investigation of palletizing systems, Ragsdale decided to purchase from Master an automatic palletizing system. Accordingly, on June 20, 1985 Master sent Ragsdale its Proposal No. 85-6-0763 which consisted of: (1) a cover sheet; (2) a one-page letter erroneously dated July 20, 1985 from Master's Jack Bertram (Bertram) to Smith Ragsdale; (3) a three-page letter from Bertram to Smith Ragsdale; and (4) general notes.
There is a factual dispute whether "Conditions of Sale" were included with Quotation No. 85-6-0763. Ragsdale claims that it never received the Conditions of Sale, but admits that it received the remainder of the proposal. Master's personnel testified that it was their regular and habitual practice to include these boilerplate Conditions of Sale with all initial proposals sent to customers and there was no reason to believe that they had failed to do so in this instance. Master's then president, John Mylrea (Mylrea), testified that it was his regular practice to review all proposals before mailing to ensure that all enclosures were present and that he would not have permitted a proposal to be mailed without the Conditions of Sale. I find that Ragsdale received the Conditions of Sale as part of Quotation No. 85-6-0763.
After further discussions between the parties regarding reducing the size and cost of the system, on July 9, 1989, and July 17, 1985 Master sent Ragsdale Revision 1 of Quotation No. 85-6-0763 (Revision 1), and Revision 2 of Quotation No. 85-6-0763 (Revision 2), respectively. These quotations provided for the design, manufacture, shipment (approximately 34 weeks after purchase order issue), installation, and start-up (including operator training) of the system.
Bertram met with Smith Ragsdale and Diggs on July 18, 1985. At Diggs request, Bertram reserved a production slot. In a letter dated July 22, 1985, Bertram informed Smith Ragsdale of yet additional items and prices discussed at the July 18, 1985 meeting that were not included in Revision 2. On August 2, 1985, Diggs telephoned Master informing Master that Ragsdale wanted to purchase the system and would send a purchase order.
Ragsdale prepared three purchase orders, Nos. 029529, 029530, 029531 dated August 15, 1985. Each order is signed by Steve Godwin, Ragsdale's purchasing agent, and each contains express language that the purchase order is contingent upon approval of industrial revenue bonds. Master received these purchase orders on August 31, 1985.
On September 10, 1985, Bertram wrote a letter to Diggs accepting Ragsdale's purchase orders. Delivery was scheduled during the week of March 3, 1986. The letter also confirmed their telephone conversation on that same date that alternate funding was available if the industrial revenue bonds were not approved.
In August 1985, Ragsdale placed orders with two other manufacturers, Rapistan and Muller, for additional equipment to convey and wrap full charcoal pallets. Diggs was responsible for coordinating the integration of this equipment with the Master system.
On October 17, 1985, Master's project engineer, Jamie Flot (Flot), visited Ragsdale's Lake City plant for initial engineering as required by the contract. He met with Diggs and representatives of Rapistan. At that time, Flot measured the building and certain products there being packaged and stored.
In November 1985, Diggs telephoned Master to discuss project payment and delivery of system drawings. During the next few weeks, Ragsdale requested additional changes in the system drawings that required Master to revise and modify the design. In late December 1985, Flot resigned from Master. On January 7, 1986, Diggs was informed that Matt Kraus (Kraus) would be the new project engineer.
In January 1986, Ragsdale requested a change to the catwalks around the system and in February 1986, Master determined that the entire structural support system should be revised. Therefore, on February *1529 18, 1986, Kraus telephoned Diggs to inform him that delivery would be delayed until mid-May.
Ragsdale objected to the delay and demanded compensation for the delay and interest on sums it had already paid to other equipment vendors. Master agreed to provide additional personnel and training for the start up of the system but refused to pay interest. Ragsdale expressed concern that the delay would interfere with its peak charcoal production period but it neither canceled its order nor rescheduled delivery. Ragsdale instead insisted that delivery be made by mid-May.
Smith Ragsdale and Diggs attended a pre-delivery "acceptance test" for the system held at Master's Colorado plant on May 7, 1986. Upon completion of the test, they expressed to Master dissatisfaction because the accumulation portion of the system was not then erected and tested and the computer program for the accumulation system had not been completed. Again, Ragsdale did not cancel the order or otherwise halt production of the system.
Master began shipping the system to Ragsdale's plant in the first week of May 1986. Installation of the system began on May 15, 1986, and was completed during the first week of June. However, Master's start-up and debugging of the system extended over several months and required mechanical and programming changes. The system met contract specifications in October 1986.
On November 14, 1986, Master determined that Ragsdale's remaining objections had been satisfied and that the system operated to contract specifications. Master demanded payment of the balance due on the system. Ragsdale refused to pay, advising Master that the system was not working properly and was not achieving quoted rates. The contract price, including revisions, was $493,815.00. Ragsdale made payments totalling $239,270.00, leaving $253,775.00 unpaid. Interest on this unpaid balance at 1 per cent per month from November 14, 1986 to October 30, 1989 is $90,191.00.
The Master system sold to Ragsdale was described as "fully automatic." Ragsdale claims that this means that the system should require no human involvement except to start and stop its operation. Because Ragsdale assigns a full-time operator to attend to the system, Ragsdale argues that the system is not fully automatic.
Master's evidence established that the this system is fully automatic because there is no human element designed into the machine's regular operation. Master personnel testified that, barring normal mechanical difficulties, the system operated without assistance by October 5, 1986. I find that the palletizing system sold to Ragsdale is fully automatic. The machine is designed to and substantially performs its job without human intervention as part of the process.
The maximum rates specified for the system's operation are contained both on the mechanical drawings and in Bertram's December 27, 1985 letter. The evidence established that the system achieved these specified rates by October 5, 1986.
In 1986 and 1987, Ragsdale filled all orders it received for charcoal briquets. No orders were cancelled. Historically, Ragsdale's Conway briquet production plant, operating 168 hours per week, 50 weeks per year, has produced 4.09 tons of charcoal briquets per hour. The evidence demonstrates that Ragsdale has operated this plant at a 70.1 per cent efficiency rate from 1984 through 1988, or an average of 48,373 tons of briquets per year.
In April 1986, Ragsdale reduced the operating hours of its bagging plant by 40 hours per week. Nevertheless, the system has demonstrated its ability to handle quantities of bagged charcoal that exceed historical briquet production averages. The system has not impeded charcoal production. The annual Conway briquet production has been handled by the system at Lake City's reduced hours of operation.
Ragsdale has made changes to the system's computer program. These changes have slowed the system's production rate. Even so, the system handles the Conway briquet production.
Ragsdale claims that the system did not achieve the expected level of labor savings. *1530 Although start-up costs exceeded those reasonably anticipated by $19,800, the evidence shows that Ragsdale has and will continue to realize greater labor savings than reflected in its "savings study" which Ragsdale prepared and relied upon shortly before the system was purchased. Consequently, I find that Ragsdale did not expect to receive any greater labor savings from the system than those achieved.
In January 1988, Gregory Toller, Ragsdale's Sales Manager, left the company. A new Sales Manager was not hired until approximately May 1988.
Ragsdale has presented no satisfactory evidence from which I can find that its inability to sell more charcoal is caused by problems with the system. To the contrary, the evidence shows that Ragsdale sold more tonnage of charcoal in fiscal year 1987, the year the palletizer was installed and the year of greatest operational disruption, than in either of the preceding or following fiscal years. Additionally, there is no satisfactory evidence to support Ragsdale's contention that it would have sold more charcoal had the palletizer worked more quickly and allowed greater production volume. The evidence shows that charcoal sales are largely a function of price and in recent years the market has burned out.
Ragsdale claims that its costs and prices are inflated because of problems with the palletizer, lowering its ability to compete. However, there is neither satisfactory evidence of such cost increases nor satisfactory evidence of any causal relation between increased costs attributable to the machine and Ragsdale's place in the market. Rather, the evidence shows that there is heavy competition in Ragsdale's national and regional markets, forcing competitors to continually lower prices in order to stay competitive. There is no satisfactory evidence that Ragsdale has lost national or regional market share or sales.
Master made no knowing or recklessly false representation to Ragsdale regarding its ability timely to test, deliver, install, and start-up the system according to specifications. There was no misrepresentation of Master's prior experience or with the system's ability to palletize Ragsdale's product. Diggs and Smith Ragsdale observed Master's systems in operation at Kingsford Charcoal and relied substantially upon Kingsford's satisfactory experience with Master in purchasing the Master system.
Installation was complete within the two weeks estimated by Master. Although start-up took longer than the additional estimated two weeks, Master did not knowingly or recklessly misrepresent this time frame. By October 1986, the completed system was "automatic" as represented and operated according to contract specifications.
Master's representations are contained fully within the contract documents. These documents do not represent that the system would handle Ragsdale's total bagging capacity. Had such representations been made, however, I find that the system can and does handle Ragsdale's historic production, and thus, bagging capacity.
An engineer was sent to Ragsdale's bagging plant and the system was delivered within the contract's time requirements. Further, there is no credible evidence that Master intentionally or recklessly concealed any material facts that should have been disclosed to Ragsdale during the course of performance. Finally, Ragsdale has proved no damage suffered as a result of any alleged misrepresentation or concealment.
II. Conclusions of Law.
A. Breach of Contract.
Master contends that it substantially performed its contract with Ragsdale and is entitled to an award of the balance of the purchase price together with interest at 1 per cent per month from November 14, 1986 to October 30, 1989, less offset for excess start-up costs. Ragsdale denies that it breached the contract and argues that Master's claims are barred by Master's breach.
The parties agree that a contract exists. They disagree as to when it was formed. This date is important in determining whether Master unreasonably delayed its performance.
*1531 The existence of a contract is a question of fact to be determined by consideration of all facts and circumstances. I.M.A., Inc. v. Rocky Mountain Airways, Inc., 713 P.2d 882 (Colo.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). I conclude that the contract was formed on September 10, 1985 under two alternative theories.
1. Contract Formation and Terms.
a. Invitation to Make an Offer.
A price quotation or proposal is generally not an offer, but is an invitation to enter into negotiations or a preliminary solicitation of an offer. Nations Enterprises, Inc. v. Process Equipment Co., 40 Colo. App. 390, 579 P.2d 655 (1978). While price quotations, if detailed enough, can amount to an offer creating the power of acceptance, Brown Machine v. Hercules, Inc., 770 S.W.2d 416 (Mo.App.1989), the submission of a purchase order by a buyer in response to a price quotation usually constitutes the offer. Brown Machine v. Hercules, Inc., supra; Maurice Elec. Supply Co. v. Anderson Safeway Guardrail Corp., 632 F. Supp. 1082 (D.D.C.1986).
I conclude that Master's quotation was intended to be an invitation to enter into negotiations for the system. The cover letter accompanying the proposal mentioned that Smith Ragsdale should contact Master "to discuss the operation" and that different options are available. Thus, when Ragsdale submitted its purchase order on August 31, 1985, it offered to purchase the system from Master. Master accepted Ragsdale's offer in its September 10, 1985 letter which stated, "[t]he following letter is being submitted as Master Conveyor's acceptance of referenced purchase orders." (Emphasis added).
b. Counteroffer.
Section 4-2-207(1), C.R.S. 1973, Colorado's version of the Uniform Commercial Code § 2-207, provides that:
A definite and seasonal expression of acceptance or a written confirmation which is sent within a reasonable time, operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. (Emphasis added).
Under this section, whenever an offeree's acceptance contains terms that materially alter the contract, and the offeree has conditioned his participation on the offeror's acceptance of such terms, see Reaction Molding Technologies, Inc. v. General Elec. Co., 588 F. Supp. 1280 (E.D.Pa. 1984), the offeree's response becomes a counteroffer, to be accepted or rejected by the offeror, rather than an acknowledgment of the original offer. See Id; Alloy Computer Products, Inc. v. Northern Telecom, Inc., 683 F. Supp. 12 (D.Mass. 1988); See also Nucla Sanitation District v. Rippy, 140 Colo. 444, 344 P.2d 976 (1959).
Here, even if Master's quotation is considered an offer, rather than an invitation to make an offer, Ragsdale's purchase orders, which added language explicitly making its obligation to purchase the system contingent upon approval of industrial revenue bonds, constituted a counteroffer. See J. White & R. Summers, Uniform Commercial Code § 1-3 at 38 (3d ed.1988); See also Nucla Sanitation District, supra; cf. Westinghouse Elec. Corp. v. Nielsons, Inc., 647 F. Supp. 896 (D.Colo.1986). The counteroffer was then accepted by Master in its September 10, 1985 letter.
2. The Conditions of Sale
In the absence of fraud or concealment, a party signing a contract cannot deny knowledge of its contents. O'Brien v. Houston, 83 Colo. 109, 262 P. 1020 (1927). A party need not sign every page of a contract for the whole of the document to be effective. Westinghouse Elec. Corp. v. Nielsons, Inc., supra. A contract may consist of two or more writings when so intended and relating to the same subject matter. Grizzly Bar, Inc. v. Hartman, 169 Colo. 178, 454 P.2d 788 (1969).
Ragsdale contends that it never received the Conditions of Sale, but admits *1532 receiving all other writings that form the agreement. Bertram testified in deposition that it was Master's regular business practice to include the Conditions of Sale in each proposal. Bertram further testified that he had no reason to believe that the Conditions of Sale were omitted from the proposal sent to Ragsdale. Mylrea testified that he reviewed every proposal to insure that all enclosures were attached. Mylrea also testified that he would not have allowed the proposal to be mailed absent all documents attached. Having found that Ragsdale received the Conditions of Sale, see Fed.R.Evid. 406, I conclude that Ragsdale is bound by their terms.
3. Contract Performance.
Ragsdale contends that Master delayed its performance in material respects and thus breached the contract. Master argues that it has substantially performed the contract. I conclude that Master has substantially performed.
Substantial performance of a contract means that although there is deviation from conditions of the contract in minor details, not materially detracting from the benefit the other party would derive from a literal performance, the other party has received substantially the benefit expected, and therefore, is bound to pay. Rohauer v. Little, 736 P.2d 403 (Colo.1987); Newcomb v. Schaeffler, 131 Colo. 56, 279 P.2d 409 (1955); See University of Colorado v. K.D.I. Precision Products, Inc., 488 F.2d 261 (10th Cir.1973).
Although the General Notes portion of Master's proposal calls for Master's engineering visit to occur immediately after receipt of the purchase orders, Diggs testified in deposition that he understood this to mean thirty days. Flot made the initial engineering visit to Ragsdale's plant on October 17, 1985, thirty-seven days after contract formation. The contract did not provide that time was of the essence. Thus, I conclude that the initial engineering visit occurred within a reasonable time.
The system drawings were to be sent to Ragsdale on November 7, 1985, twenty-one days following Flot's visit. The drawings were not delivered until November 27th. However, the drawings were delayed because of additional charges requested by Ragsdale. Hence, they were delivered within a reasonable time.
On May 7, 1986, when Smith Ragsdale and Diggs attended the acceptance test at Master's Englewood facility, neither man expressed any significant dissatisfaction with the system. Nor did they direct Master to stop work or to delay delivery for any reason. The system was delivered to Ragsdale beginning the first week in May.
After Ragsdale learned that delivery would be postponed, it demanded additional training and interest on sums paid to other vendors. Master agreed to and did furnish additional training services but refused to pay interest. Thus, the parties formed an independent agreement that Ragsdale receive extra consideration in exchange for any delay in delivery. Ragsdale may not now seek further damages or other relief for delivery delay.
Moreover, the contract, Revision 2, provides a shipment date of approximately 34 weeks following issuance of the purchase order. The purchase orders were issued on August 15, 1985 and received by Master on August 31, 1985. The system originally was scheduled for delivery the week of March 3, 1986. However, because both Ragsdale and Master made certain design modifications and because there was a change of project engineers, Master informed Ragsdale in February 1986 that delivery would be delayed until mid-May. Early May is reasonably within the 34 week shipment period provided for in the contract, Revision 2. And, as the Conditions of Sale indicate in paragraph 4, the specified shipment date is approximate only. Moreover, Ragsdale's purchase order contains the precatory language that "If At Any Way Possible This Equipment should be delivered by 3-1-86." None of the contract documents reflect an intention that time was of the essence. I conclude, therefore, that delay, if any, in the shipment and delivery of the system was neither unreasonable nor a material breach of contract.
*1533 Installation of the system began on May 15, 1986 and was completed timely by June 1, 1986. Master admits that start-up took longer than expected and extended into October 1986. During this period, Ragsdale sustained excess labor overtime costs of $19,800. Master concedes that Ragsdale is entitled to a setoff of $19,800 against Master's damages.
By October 5, 1986 the system was fully operational and the specified rates for palletizing Ragsdale's charcoal products had been achieved. Ragsdale has continuously and profitably used the system since that time in its daily operations. Ragsdale has never abandoned the system or stopped using the system for any significant period.
I conclude that Master substantially performed its obligations under the contract, that Ragsdale received substantially the benefit it expected, and that Ragsdale is bound to pay the contract price balance, plus interest, less setoff. Accordingly, Ragsdale breached the contract by refusing to pay this balance due.
B. Ragsdale's Breach of Covenant of the Good Faith and Fair Dealing.
C.R.S. § 4-1-203 requires that "[e]very contract or duty within this title imposes an obligation of good faith in its performance or enforcement." Good faith in the case of a merchant is defined as honesty in fact and the observance of reasonable commerical standard of fair dealing in the trade. C.R.S. § 4-2-103(b). I conclude as a matter of law that Master has failed to meet its burden of proof regarding Ragsdale's breach of the convenant of good faith and fair dealing.
III. Ragsdale's Counterclaims.
A. Master's Breach of Contract.
For the reasons set forth above, Ragsdale has failed to prove Master's prior breach of contract. (Setoff is allowed for Ragsdale's excess costs incurred during Master's admitted delay in system startup).
B. Ragsdale's Claim for Deceit.
The elements of a cause of action for deceit are: 1) a false representation of a material fact; 2) made with knowledge of the falsity or with reckless disregard of its truth or falsity; 3) made with the intent that the plaintiff act on the misrepresentation; 4) the party claiming fraud must have justifiably relied on the misrepresentation; and 5) in doing so suffered damage. Trimble v. Denver, 697 P.2d 716 (Colo.1985); Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458, 462 (1937).
Under the facts of this case, I conclude that Ragsdale has failed to prove that Master made knowing or recklessly false representations to Ragsdale regarding its experience and ability to test, deliver, install, and start-up the automatic system according to specifications. As a matter of fact and law, Master substantially performed its contract with Ragsdale.
Moreover, although Ragsdale argues that it relied solely on Master's misrepresentations, both Smith Ragsdale and Diggs testified at trial that they also relied heavily upon Kingsford in making the decision to purchase the Master system. Ragsdale also relied substantially on its own labor savings projections. Finally, Ragsdale has suffered no damage as a result of any alleged misrepresentation. Therefore, I conclude that Ragsdale has failed to prove its claim of deceit.
C. Fraudulent Concealment.
In order to establish a prima facie case of fraudulent concealment, Ragsdale must prove: 1) concealment of a material existing fact that in equity and good conscience should be disclosed; 2) knowledge on the part of the party against whom the claim is asserted that such a fact is being concealed; 3) ignorance of that fact on the part of the one from whom the fact is concealed; 4) the intention that the concealment be acted upon; and 5) action on the concealment resulting in damage. Kopeikin v. Merchants Mortgage & Trust Corp., 679 P.2d 599 (Colo.1984).
Ragsdale contends that after entering into the contract, Master had knowledge of additional material facts which it recklessly disregarded or knew would render Master's performance under the contract *1534 impossible or highly unlikely. However, for the reasons set forth above, I conclude that Ragsdale failed to meet its burden of proving that Master intentionally or recklessly concealed any facts that ought to have been made known to Ragsdale. Master substantially performed its contract with Ragsdale. Thus, I further conclude that Ragsdale has not demonstrated that Master's performance under the contract was either impossible or improbable. And, as I discuss in the following sections, Ragsdale has suffered no damages.
D. Damages.
Here, as a matter of fact and law, Master has neither breached its contract with Ragsdale nor committed a tortious act. However, I discuss this issue to render complete my Fed.R.Civ.P. 52 findings and conclusions.
1. Punitive Damages.
Ragsdale failed to show that any of Master's actions were attended circumstances of wanton or reckless conduct under C.R.S. § 13-17-102. Accordingly, Ragsdale's claim for punitive damages was dismissed at trial pursuant to 41(b).
2. Compensatory Damages.
a. Additional Operator Costs.
Because it must employ one full-time operator per shift to run the system represented by Master to be "fully automatic", Ragsdale contends that it is entitled to recover the cost of these operators for the useful life of the system. I have rejected this claim as a matter of fact and law.
b. Additional Equipment Costs.
Ragsdale claims damages for the cost of additional equipment. Ragsdale admits that Diggs was responsible for coordinating the phases of the project involving different contractors. However, Ragsdale contends that because Master delayed delivery, equipment put into place by other contractors had to be moved and augmented to fit with Master's equipment. Ragsdale claims that it was required to expend an additional $13,024.00 to coordinate the entire system.
First, Master did not unreasonably delay delivery. Furthermore, during the initial engineering visit, Flot met with a representative of Rapistan, one of Ragsdale's other contractors. At that time, it was discovered that Rapistan designed its conveyors to accept the pallets lengthwise. However, the Master system ejected the pallets widthwise. Thus, Rapistan had to design a turntable to rotate the pallet 90 degrees.
Rapistan previously had provided drawings to Diggs, who could have coordinated with Master at that time, but neglected to do so. Moreover, Rapistan's purchase orders did not contain the bond contingency language placed on Master's purchase orders, and Rapistan's schedule was ahead of Master's.
Therefore, Ragsdale has failed to prove that the coordination or work among the equipment contractors was Master's responsibility. There was no agreement between Master and Ragsdale to that effect. Rather, the evidence shows that Diggs was responsible for coordinating the contractors' work. The evidence also shows that Diggs blamed Rapistan for the mix-up and that Ragsdale was made whole by Rapistan.
c. Additional Labor Costs and Lost Labor Savings.
Ragsdale claims that had Master's equipment been installed and functioning earlier, it would have saved greater labor expenses than actually realized. Ragsdale bases its argument on a "cost savings analysis" it prepared before it purchased the Master system. According to this study, Ragsdale projected that it would save $43,055.00 in the first five years of operation. The evidence shows, however, that Master's system exceeded Ragsdale's anticipated labor savings by $155,000.00.
This claim is disingenuous. Ragsdale, having saved more labor costs than expected at the time the contract was formed, cannot now, in hindsight, claim more than was then contemplated.
*1535 d. Interest on Bills Paid to Third Party Contractors.
Ragsdale claims interest on sums paid to other equipment contractors for the period of time that delivery and start-up was delayed. I conclude that Ragsdale is not entitled to interest on bills relating to the system paid to third parties. Master did not agree to pay interest during this period of time. Instead Ragsdale agreed to receive additional training and support in consideration for any delayed delivery and start-up date. Moreover, Master has substantially performed its obligations under the contract. Accordingly, Ragsdale is responsible for timely paying its third-party contractors.
3. Lost Profits.
In order to recover lost profits, a plaintiff must show that a defendant's breach or tortious conduct was the proximate cause of its injury. Prutch v. Ford Motor Co., 618 P.2d 657 (Colo.1980). Recovery of lost profits is determined by whether the consequences resulting in damages were foreseeable. Id. Lost profits are not recoverable if either the amount of the profit that would have been earned or the fact that the plaintiff would have earned them is too speculative, remote, imaginary, or impossible to ascertain. Republic Nat'l Life Ins. v. Red Lion Homes, Inc., 704 F.2d 484 (10th Cir.1983).
The facts show that Ragsdale lost no sales. No orders were cancelled and none were unfilled. In fiscal year 1987, the year in which the system was installed, Ragsdale's charcoal sales actually exceeded the average of the two previous years.
Ragsdale, however, claims lost profits for charcoal briquets that it claims it could have produced and sold had the system performed properly. However, the evidence demonstrates that historically, Ragsdale's Conway production plant operated at a 70.1 per cent efficiency rate, and its maximum rate of production was 48,373 tons per year. Hence, there is no satisfactory evidence that Ragsdale could have produced additional tonnage for bagging regardless of system limitation.
Moreover, even if it could produce the extra tonnage, Ragsdale failed to prove that it could have sold the additional briquets. Ragsdale's former production sales manager, Gregory Toller, speculated that he could have sold the additional briquets, but admitted that he could not prove that he would have sold the extra charcoal for which lost profits are claimed. Ragsdale presented no evidence of probable buyers to whom he could have sold briquets at a specified price. See Cope v. Vermeer Sales and Service of Colo., 650 P.2d 1307 (Colo.App.1982). Toller also admitted that it was unclear what Ragsdale's competitors would have done in light of increased competition. The evidence further shows that Ragsdale's inventory of briquets has increased steadily since 1986. This indicates its inability to sell additional amounts of charcoal, not a system limitation. Moreover, the evidence shows a flat national market for charcoal briquets in recent years and that Ragsdale has intense competition for sales in its markets.
I conclude that Ragsdale's claims for lost profits is speculative, remote, and imaginary. See Republic Nat'l Life Ins. v. Red Lion Homes, Inc., supra.
E. Groundless and Frivolous Counterclaims.
I finally conclude that Ragsdale's counterclaims and defenses are neither groundless nor frivolous. See § 13-17-102 C.R.S.
IV. Conclusion.
Master has established that it substantially performed its contract with Ragsdale, that Ragsdale has breached its contract with Master, and that as a result, Ragsdale is indebted to Master for $253,775, plus $90,191 interest, less setoff of $19,800. Master has not established its claim of breach of § 4-1-203 C.R.S. Ragsdale has failed to prove its counterclaims of breach of contract, deceit, or fraudulent concealment. Accordingly, based on the Findings of Fact and Conclusions of Law made above IT IS ORDERED that:
1. Judgment shall enter in favor of Master and against Ragsdale for $324,166, *1536 plus interest thereon from the date of judgment.
2. Judgment shall enter in favor of Master and against Ragsdale on Ragsdale's counterclaims for intentional misrepresentation, intentional concealment, breach of contract, and punitive damages.
3. Master is awarded its reasonable costs. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2050253/ | 284 N.W.2d 406 (1979)
204 Neb. 602
Dale R. BENGTSON, Appellee,
v.
Esther B. BENGTSON, Appellant,
Impleaded with Oliver E. Wise and Ruth L. Wise, Intervenors-Appellees.
No. 42358.
Supreme Court of Nebraska.
October 16, 1979.
*407 Richard L. Swenson of Lathrop, Albracht & Swenson and Charles S. Lashelle, Omaha, for appellant.
Everett O. Inbody of Haessler, Sullivan & Inbody, Wahoo, for appellee.
Heard before BOSLAUGH, CLINTON, and WHITE, JJ., and HAMILTON and HENDRIX, District Judges.
HENDRIX, District Judge.
This is an appeal from a dissolution of marriage decree determining custody of a minor child. The wife, respondent-appellant, prosecutes this appeal attacking the order of the District Court for Saunders County, Nebraska, which retained legal custody, awarded physical custody in the husband, petitioner-appellee, and granted reasonable visitation to respondent. The parents of the respondent appeared as intervenors in the District Court, but are not parties here. We affirm.
The parties were married February 20, 1971, and began living in the Omaha, Nebraska, area. On September 1, 1973, the respondent gave birth to the parties' only child, Michelle. The pregnancy was planned, and the respondent was happy that she was having the child. During the first year after Michelle was born, the respondent stayed home with her. While the respondent furnished physical care for the child, she had difficulties in adjusting to the pressures of motherhood. At this time the respondent felt she couldn't cope with Michelle and complained that Michelle would "drive her up the wall." About a year after Michelle's birth the respondent wanted to go back to work and the parties agreed that she would do so. The respondent secured the first of several waitress jobs, working at night. She continued to complain that Michelle bothered her so much she couldn't stand it. It was her custom to leave Michelle at the day care center while shopping or going out to lunch.
For some time the parties continued to share the care of Michelle with the petitioner working days and caring for Michelle during the night, and the respondent working nights and caring for Michelle during the day. During this period there were disagreements about the toilet training of Michelle. The petitioner took a much more firm stand on the matter than did the respondent. In May of 1976 the respondent, her mother, and Michelle took a 2-week trip to near Scranton, Pennsylvania. Respondent and her mother reported that during this trip the relationship between the respondent and Michelle seemed normal.
However, shortly after this trip and about the end of June 1976, the respondent moved away from the family home, leaving Michelle with petitioner. During this time the respondent visited Michelle, but the frequency of the visits is in dispute. Respondent testified she visited at least two times a week, except for a couple weeks. The petitioner testified the respondent visited Michelle once a week for the first couple of *408 months, began skipping weeks, and then at one time it was 4 to 6 weeks without contact with Michelle. In about December 1976, the parties worked out a joint custody agreement by which petitioner would deliver Michelle to the day care center Monday mornings, and respondent would have custody until she delivered Michelle to the day care center Thursday mornings. The petitioner would pick up Michelle Thursday night and have custody until Monday morning.
In about May 1977, the petitioner moved to Yutan, Nebraska. In July the petitioner was laid off work, making it difficult for him to pay the day care center. The parties agreed that the petitioner would then have custody. During this time the petitioner had custody the respondent did not visit Michelle, although she may have tried on one occasion. The parties reestablished the joint custody arrangement in the latter part of July or the first part of August when respondent's parents agreed to pay the expenses at the day care center.
The joint custody arrangement continued this time until September 15, 1977. On September 1, 1977, a Thursday, the petitioner noticed a lesion on Michelle's cheek. On September 15, 1977, petitioner noticed a second lesion. Michelle was taken by petitioner to the emergency room at Nebraska Methodist Hospital where she was examined by Dr. Frank O. Hayworth. Dr. Hayworth testified that the lesions appeared to be second degree burns, one at least 5 or 6 days old and the other 1 or 2 days old. The doctor also stated that it was possible the lesions were caused by burns from a cigarette or any round hot instrument. The trial court found the evidence tended to exonerate both parties, but determined that the lesions occurred while the child was in the custody of the respondent. As a result of the lesions, petitioner terminated the joint custody arrangement, but it was reinstated October 11, 1977, at a conference of parties and counsel.
In the meantime, both parties became sexually involved with other partners; the respondent with a Nick Watson, and the petitioner with a Penny Nelson. The affair between respondent and Mr. Watson, insofar as Michelle was present, began in late summer or early fall of 1977. It was terminated by respondent in November of 1977. At trial time, respondent was living in an apartment in Papillion. The petitioner met Penny Nelson shortly after he moved to Yutan. This developed into a close relationship and they began living together at the end of July or the first part of August of that year. A baby was conceived of the relationship and was expected to be born April 1, 1978. The petitioner and Penny Nelson planned to marry on September 30, 1978, if the dissolution between petitioner and respondent was final by that time. On February 1, 1978, the petitioner and Penny Nelson moved to Hordville, Nebraska, the petitioner believing that to be a better place to engage in his occupation of carpentry. This is where the petitioner and Penny Nelson were living at the time of the trial. The social service worker who made the study of the home in Yutan reported a physical environment which was clean and neatly arranged. She also reported Michelle had a warm and loving attitude towards her father and Penny Nelson. The social worker who made the study of the home in Hordville reported petitioner and Penny Nelson related well to Michelle and that they were able to provide adequate and suitable care. This and other evidence reveals an atmosphere of mutual love and parental relationship between Michelle on one hand and petitioner and Penny Nelson on the other. The director of the day care center which Michelle attended from about October 12, 1977, related that at first Michelle was apprehensive as to who was picking her up, and on one occasion became very upset and cried when she found out Penny Nelson was picking her up rather then the respondent. She further testified, however, that the situation had improved, and that she did not at trial time see any difference between the way Michelle received petitioner and Penny Nelson as compared to the way she received the respondent.
*409 The respondent objects to the receipt of copies of social workers' reports into the evidence. In Jorgensen v. Jorgensen, 194 Neb. 271, 231 N.W.2d 360, we held that such reports are not competent unless the investigator takes the stand as a witness, is sworn, and is subject to the usual test of cross-examination. In this case each social worker was sworn, testified, and was cross-examined. Further, the court advised that in receiving the reports it would only consider the evidence properly admissible. Under these circumstances, there was no error.
Respondent further objects to the court's refusal to permit a Mr. Nanos to answer hypothetical questions relating to possibility and effect of a second parental breakup upon a 4-year-old child. Mr. Nanos was qualified as an expert by virtue of being the assistant director of the alcoholics treatment center of Emmanuel Center, with a masters degree in psychiatric social work and postgraduate work primarily in the field of alcoholism. He had been permitted to testify at great length on theory entirely. He had no personal knowledge of any of the parties or the child. His direct examination covers 39 pages in the bill of exceptions. The line was drawn by the court at the place determined by it to prohibit Mr. Nanos from relating matters only involving speculation, possibility, or conjecture. In dealing with questions calling for expert opinion, particularly hypothetical questions, much must be left to the discretion of the trial judge. Fowler v. Bachus, 179 Neb. 558, 139 N.W.2d 213; Hawkins Constr. Co. v. Matthews Co., Inc., 190 Neb. 546, 209 N.W.2d 643. The ruling of the trial judge in this matter was appropriate, and not an abuse of his discretion.
In cases involving questions of child custody, the findings of the trial court, both as to an evaluation of the evidence and as a matter of custody, will not be disturbed unless there is a clear abuse of discretion or the decision is against the weight of the evidence. Mason v. Mason, 200 Neb. 476, 263 N.W.2d 865. The court chose what appeared to be the more stable home and environment for Michelle. The decision does not abuse the discretion of the court, nor is it against the weight of the evidence.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2229490/ | 883 N.E.2d 1156 (2005)
354 Ill. App. 3d 1177
WARD
v.
MID-AMERICAN ENERGY CO.
No. 3-03-1015.
Appellate Court of Illinois, Third District.
January 18, 2005.
Aff'd in pt., rev'd in pt. & rem. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1969843/ | 559 F. Supp. 2d 892 (2008)
EXELON GENERATION CO., LLC, Plaintiff,
v.
GENERAL ATOMICS TECHNOLOGIES CORP., Defendant.
Case No. 06 C 5516.
United States District Court, N.D. Illinois, Eastern Division.
March 27, 2008.
*893 Jose A. Lopez, Lesley Gayle Smith, Steven A. Weiss, Schopf & Weiss LLP, Chicago, IL, Francis P. Devine, Michael A. Schwartz, Pepper Hamilton LLP, Philadelphia, PA, for Plaintiff.
Gregory A. Markel, Jason M. Halper, Heather L. Fesnak, Jessica A. Bohrer, Tom M. Fini, Cadwalader, Wickersham & Taft LLP, New York, NY, James R. Figliulo, Peter A. Silverman, Figliulo & Silverman, Tonita Marie Helton, Freeborn & Peters, Chicago, IL, for Defendant.
*894 MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
This case arises from a series of uranium supply contracts between plaintiff Exelon Generation Co., LLC, a power-generation business, and Heathgate Resources Proprietary Ltd., a subsidiary of defendant General Atomic Technologies Corp. ("GATC"), and between Exelon and GATC. Exelon sued GATC for fraudulent inducement and breach of contract. Exelon and GATC have filed cross-motions for summary judgment on Exelon's breach of contract claims. GATC has also moved for summary judgment on Exelon's fraudulent inducement claim; the Court denied GATC's motion as to that claim-in an oral ruling on March 7, 2008. For the reasons set forth below, the Court grants in part and denies in part both sides' motions for summary judgment on the breach of contract claims.
Facts
Exelon entered into two contracts with Heathgate on October 3, 2001 and April 30, 2002, in which Heathgate agreed to deliver up to 525,000 pounds of uranium concentrates in 2003, 690,000 pounds per year in 2004 and 2005, and 450,000 pounds in 2006. In total, the contracts called for Heathgate to supply Exelon 2,355,000 pounds of uranium. The contracts set fixed prices for each year, ranging from $10.30 to $11.04 per pound.
On August 31, 2003, Exelon entered into a contract with another GATC subsidiary, Nuclear Fuels Corporation, in which NFC agreed to deliver up to 275,000 pounds per year of uranium to Exelon in 2005, 2006, and 2007, at prices ranging from $10.89 to $11.29 per pound.
On March 31, 2004, Susan Speight and Larry Davis, representatives of Heathgate and GATC, met with James Nevling of Exelon at Exelon's Illinois offices. At that meeting or shortly thereafter, Heathgate and GATC representatives stated that Heathgate was experiencing financial and production difficulties that prevented it from being able to perform its contractual obligations to Exelon. The Heathgate/GATC representatives said that Heathgate's uranium resources were diminishing, its recovery rates were lower than anticipated, and it did not have the resources to search for additional uranium. They advised that if Exelon did not relieve Heathgate of its obligations to deliver the full quantities of uranium called for in the Heathgate contracts, Heathgate was likely to be forced into formal reorganization, an Australian process equivalent to bankruptcy. Over the next several months, Heathgate and GATC repeated these representations, consistent with what Exelon contends was a concerted effort to escape Heathgate's contractual obligations so it could take advantage of an increase in the market price for uranium.
In October 2004, Exelon agreed to a modification of the Heathgate contracts on the condition that GATC participate in any renegotiation as a guarantor. Exelon and Heathgate signed amendments to the contracts, effective December 21, 2004, that deferred the remaining delivery dates from 2004, 2005, and 2006 to 2007, 2008, and 2009, reduced the overall uranium quantities to be supplied from a total of up to 1,830,000 pounds to a total of up to 525,000 pounds (126,000 pounds in 2007, 241,500 pounds in 2008, and 157,500 pounds in 2009), and raised the contract prices to a range of $11.20 to $11.89 per pound, depending on the year of delivery.
At the same time, Exelon and GATC entered into an agreement that both incorporated and guaranteed Heathgate's performance under the amended contracts. *895 GATC's guarantee provided, in relevant part, as follows:
This Guarantee shall constitute a guarantee of performance and not of collection.
GATC agrees to promptly and faithfully perform Heathgate's obligations under the Contracts if Heathgate fails to perform such obligations for any reason other than reasons excused, limited or provided for in the Contracts.
The obligations of GATC under this Guarantee shall be absolute and unconditional, and shall remain in full force and effect until Heathgate fully performs its delivery obligations under the Contracts. GATC shall not be released or discharged for any reason.
GATC specifically agrees that Exelon need not file suit or otherwise assert any claim against Heathgate for any failure to perform its obligations under the Contracts before, or as a condition of, enforcing GATC's liabilities under this Guarantee.
2d Am. Compl., Ex. C, §§ 1.2, 1.3, 1.4 & 6.2.
On January 12, 2006, Exelon set a final delivery date of June 6, 2006 for that year's delivery from NFC. On May 16, 2006, NFC requested a meeting with Exelon to discuss its contract. On May 22, 2006, NFC wrote to Exelon to confirm a meeting scheduled for May 31, 2006 and to state that NFC anticipated that it would not perform its delivery obligations.
At the meeting on May 31, 2006, Exelon representatives met with David Christensen, vice president of GATC and acting president of NFC, and Horst Maerten, president of Heathgate. Christensen and Maerten stated that neither NFC nor Heathgate would perform Heathgate's delivery obligations. After the meeting, representatives of GATC, NFC, and Heathgate proposed that NFC would deliver 500,000 of the 550,000 pounds of uranium remaining to be delivered under the NFC contract's two remaining years on the condition that Exelon agree to release Heathgate from its obligation to make any future deliveries. NFC did not deliver the previously scheduled shipment of 275,000 pounds of uranium on June 6, 2006, nor did it make any subsequent deliveries. NFC's alleged breach is the subject of a separate suit brought by Exelon.
On June 23, 2006, Exelon demanded in writing that GATC honor its guarantee of performance of Heathgate's repudiated delivery obligations. On July 14, 2006, GATC wrote Exelon, stating that it did not believe Heathgate had repudiated its contract with Exelon. That same day, Heathgate wrote Exelon, purporting to withdraw its repudiation of the contract. On August 1, 2006, Exelon provided a binding delivery notice to Heathgate, setting January 2007 as the month for Heathgate's 2007 delivery to Exelon.
On August 7, 2006, Exelon wrote Heathgate and demanded specific written assurances by September 6, 2006 that Heathgate was willing and able to perform its January 2007 delivery obligation. Instead, on September 5, 2006, Heathgate declared commercial impracticability under the contracts. As a result, Exelon wrote GATC again on September 21, 2006, demanding that GATC confirm in writing within seven days that it would perform its obligations under the guarantee. On September 27, 2006, GATC responded, stating that it would not perform.
Exelon sued GATC on October 11, 2006. Its second amended complaint includes three claims. Count 1 is a claim of fraudulent inducement, in which Exelon alleges that GATC made knowingly false statements to Exelon in 2004, in reliance on which Exelon entered into the amendments to the Heathgate contracts and the *896 GATC guarantee. The Court previously denied GATC's motion for summary judgment on Count 1. Counts 2 and 3 are claims for breach of contract; in Count 2, Exelon seeks specific performance by GATC, and in Count 3, Exelon seeks, in the alternative, an award of damages. In these claims, Exelon alleges that GATC breached its guarantee of performance by repudiating its obligations and failing to deliver the uranium called for in the amended Heathgate contracts.
Discussion
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The Court, when determining whether a genuine issue of material fact exists, must view the facts in the light most favorable to the nonmoving party and draw reasonable inferences in that party's favor. See Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). When the Court has been presented with cross-motions for summary judgment on the breach of contract claims, it considers each party's motion separately and draws reasonable inferences against the party whose motion is under consideration. See Crespo v. Unum Life Ins. Co. of Am., 294 F. Supp. 2d 980, 991 (N.D.Ill.2003) (citing Brownlee v. City of Chicago, 983 F. Supp. 776, 779 (N.D.Ill. 1997)). The Court will apply New York law, which governs both the Heathgate contracts and the GATC guarantee, to Exelon's breach of contract claims.
Exelon alleges that GATC breached its guarantee because it failed to perform after Heathgate allegedly breached its uranium contracts with Exelon. To prevail on a breach of contract claim under New York law, the plaintiff must prove the existence of a contract; its performance under that contract; defendant's breach of the contract; and resulting damages. See Furia v. Furia, 116 A.D.2d 694, 695, 498 N.Y.S.2d 12, 13 (App.Div.1986).
Exelon claims that in 2004, it entered into a binding guarantee agreement with GATC, which unconditionally required GATC to specifically perform Heathgate's obligations under the amended contracts should Heathgate fail to do so. Exelon also claims that after Heathgate repudiated the amended contracts, Exelon performed its obligations by making a written demand of performance but that GATC breached by failing to perform Heathgate's delivery obligations. Exelon contends that it was damaged when it was unable to get either the security of an assured supply of uranium or the delivery of uranium.
A. GATC's motion
GATC seeks summary judgment on Count 2, arguing that specific performance is not appropriate in this case. GATC also seeks partial summary judgment on Count 3 based on contractual language limiting damages. In addition, GATC seeks summary judgment on Counts 2 and 3 on the ground that it appropriately terminated the guarantee after Exelon allegedly breached its confidentiality provisions. The Court will begin' by addressing GATC's last argument.
1. GATC's purported termination of the guarantee (Counts 2 and 3)
GATC argues that its guarantee was terminated on August 30, 2007 and that as a result, any claims under the guarantee were also terminated. GATC bases its argument on Exelon's alleged breach of the confidentiality provision contained within the guarantee. The provision allows GATC to terminate the guarantee *897 if it "learns that any third party has obtained knowledge of the existence of this Guarantee and/or the terms and conditions hereof ... unless Exelon can clearly establish, to the reasonable satisfaction of GATC, that the knowledge of the third party was not as a result of a breach by Exelon." 2d Am. Compl., Ex. C at 5. During a deposition on July 18, 2007, James Graham, a former employee of Heathgate who left the company in or around April 2004, testified that he first learned of the GATC guarantee from James Malone of Exelon at some point during the six months preceding the deposition. The following month, as a result, GATC purportedly terminated the guarantee.
In response, Exelon argues that by its terms, the guarantee does not allow GATC to discharge liabilities that had accrued before the date of termination. Specifically, the guarantee states that "[n]o termination shall affect, release or discharge GATC's liability with respect to any obligations existing or arising under the Contracts) prior to the effective date of termination, which obligations shall remain guaranteed pursuant to the terms of this Guarantee." 2d Am. Compl., Ex. C at 3.
The contractual language that Exelon has cited is sufficient, in the Court's view, to preclude entry of summary judgment in GATC's favor on Counts 2 and 3 based on its termination argument.
2. Construction of contractual damages limitation (Count 3)
GATC also argues that because of contractual language limiting damages, Exelon cannot claim damages in excess of the product of the number of pounds called for in the contract and the contractual price per pound. The relevant section of each contract, entitled "Article 14Liabilities," reads as follows:
14.1 If either party defaults in the performance of its obligations under this Contract and such default continues for a period of thirty (30) days after notice by the other party in default specifying the events of default, then that other party shall be entitled to pursue an action for damages and any other remedy available to the parties under the provisions of this agreement, law, statute or otherwise.
14.2 Neither Party shall be responsible to the other party under this Contract for incidental, special, economic, indirect or consequential damages arising out of or in connection with the performance or non-performance of its obligations under this Contract, except for such loss and/or damage caused by or arising from willful act or gross negligence of the party. In no event shall damages exceed the Price times the total number of pounds of Concentrates to be Delivered hereunder.
2d Am. Compl, Ex. A at 11; Ex. B at 10.
GATC argues that the reference in the last sentence of Article 14.2 to the "total number of pounds of Concentrates to be Delivered hereunder" refers to the quantities of uranium to be delivered under the contracts and that "Price" refers to the fixed price for each scheduled delivery, as set forth in Article 3. GATC argues that as a result, the contracts cannot be interpreted to allow Exelon to seek cost-of-cover damages calculated using the market price at the time of the breach or when Exelon covered. GATC contends that in requesting such damages, Exelon is asking the Court to add an unagreed term to the Heathgate contracts when "`the meaning of [a] ... contract [that] is plain and clear... [is] entitled to [be] enforced according to its terms.'" Uribe v. Merchants Bank of N.Y., 91 N.Y.2d 336, 341, 670 N.Y.S.2d *898 393, 693 N.E.2d 740, 743 (1998) (quoting Loblaw, Inc. v. Employers' Liab. Assurance Corp., Ltd., 57 N.Y.2d 872, 877, 456 N.Y.S.2d 40, 442 N.E.2d 438, 441 (1982)).[1]
In response, Exelon argues that Article 14 does not apply, because, it contends, the provision is not incorporated into the GATC guarantee. The guarantee states that GATC's obligations will be "absolute and unconditional" and that GATC will not "be released or discharged for any reason." 2d Am. Compl, Ex. C at 1. According to Exelon, under Article 2.1, the only defenses GATC did not expressly waive are certain defenses Heathgate might have to performance. Article 2.1 provides that
GATC reserves to itself all rights, setoffs, counterclaims and other defenses which Heathgate may have to performance of any obligation except for defenses arising out of the bankruptcy, insolvency, dissolution or liquidation of Heathgate or lack of validity of the Contracts.
Id. at 2. Exelon contends that because the damages limitation in Article 14 is not a defense to performance, GATC waived it when it guaranteed absolute, unconditional performance of Heathgate's obligations.
The Court rejects Exelon's argument. The guarantee makes GATC's obligations coextensive with Heathgate's obligations, not greater than those obligations. Article 2.1 must be read together with Article 1.3, which states that
GATC agrees to promptly and faithfully perform Heathgate's obligations under the Contracts if Heathgate fails to perform such obligations for any reason other than reasons excused, limited or provided for in the Contracts.
Id. at 1 (emphasis added). The word "limited" in Article 1.3 reflects that Heathgate's obligations, and thus GATC's obligations, are limited in the same way, including the limitation on damages set forth in Article 14.2.
The Court turns next to the question of how Article 14.2 should be read. GATC argues that the provision is clear and unambiguous; it imposes a limitation on all types of damages, including cost-of-cover damages; and its reference to "Price" limits damages to the contract price, not the higher price that GATC would have to pay to cover when Heathgate did not deliver. Exelon argues that the damage limitation in Article 14.2 applies only to indirect or consequential damages, not cost-of-cover damages like those it seeks in Counts 2 and 3 and that, in any event, the reference to "Price" in Article 14.2 means the price at which it obtained other uranium when Heathgate did not deliver, not the contract price.
As the Second Circuit has stated:
Under New York law, the initial interpretation of a contract is a matter of law for the court to decide. The key inquiry at this initial interpretation stage is whether the contract is unambiguous with respect to the question disputed by the parties. An ambiguity exists where the terms of a ... contract could suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business. If an ambiguity is found, the court may accept any available extrinsic evidence to ascertain the *899 meaning intended by the parties during the formation of the contract. We have explained that if the court finds that the contract is not ambiguous it should assign the plain and ordinary meaning to each term and interpret the contract without the aid of extrinsic evidence and it may then award summary judgment.
Int'l Multifoods Corp. v. Comm'l Union Ins. Co., 309 F.3d 76, 83 (2d Cir.2002) (applying New York law; internal quotation marks and citations omitted).
The Court sees two ambiguities in Article 14.2 that preclude entry of summary judgment. First, it is unclear whether the limitation on damages in Article 14.2 applies only to the types of damages referenced in that provision consequential or other indirect damages or instead applies to all types of damages, including direct, cost-of-cover damages. A reasonably intelligent person, reading Article 14.2 objectively, could come out either way. Because the limitation appears in a contract term that otherwise discusses only indirect damages, it reasonably can be read as limiting only damages of that type. On the other hand, because the limitation does not expressly apply to "such" damagesin other words, to indirect damages of the type discussed just before the limitationit reasonably can be read as limiting all damages, not just indirect damages.
Second, the limitation of damages to the quantity to be delivered times the "Price" is ambiguous, in the Court's view. Because the limitation refers to "the Price" times the quantity "to be Delivered hereunder," it reasonably could be read as a cross-reference to the price listed in the contract. The capitalization of "Price" provides some support for this interpretation. On the other hand, the reference to "the Price" could be read as a reference to the price Exelon pays to cover in the event of a nondelivery. In this regard, Exelon has introduced the testimony of James Graham, Heathgate's president and chief executive officer at the time of contracting, that people in the uranium business would understand the term "Price" to refer to the price at which the buyer covered, not the contract price. Graham Dep. 5/8/07 at 225-29. Under the Uniform Commercial Code as adopted in New York, terms in an integrated contract like those at issue here "may be explained or supplemented ... by. . . usage of trade," a term defined as "any practice or method of dealing having such regularity of observance in a ... trade as to justify an expectation that it will be observed with respect to the transaction in question." N.Y. U.C.C. Law §§ 2-202(a), 1-205(2) (McKinney 2008). These provisions do not permit evidence of custom or trade usage to be introduced when it would contradict or be inconsistent with a contract term. See Div. of Triple T Serv., Inc. v. Mobil Oil Corp., 60 Misc. 2d 720, 731, 304 N.Y.S.2d 191, 202-03 (Sup.Ct. 1969); Cliffstar Corp. v. Cape Cod Biolab Corp., 37 A.D.3d 1073, 1074, 829 N.Y.S.2d 779, 780 (App.Div.2007). But the UCC does permit the admission of trade usage evidence to explain a contract term, even if it has not been found ambiguous. See Walk-In Med. Ctr. v. Breuer Capital Corp., 818 F.2d 260, 264 (2d Cir.1987) (applying New York law); N.Y. U.C.C. Law § 2-202, cmt. 1(c) (McKinney 2008) ("This section definitely rejects ... [t]he requirement that a condition precedent to the admissibility of [trade usage] evidence . . . is an original determination by the court that the language used is ambiguous."). Graham's testimony is admissible to assist in the interpretation of Article 14.2.[2]
*900 When interpretation of an ambiguous contract depends, as it does in this case, on evidence other than the contract itself, it presents questions of fact that a jury must decide. See, e.g., Hartford Accid. & Indent. Co. v. Wesolowski, 33 N.Y.2d 169, 172, 350 N.Y.S.2d 895, 305 N.E.2d 907, 909 (1973). As a result, GATC is not entitled to a ruling on summary judgment that Exelon's damages are limited to the contract price multiplied by the quantity that Heathgate failed to deliver.
3. Availability of specific performance (Count 2)
GATC contends that Exelon is not entitled to specific performance because money damages are an adequate remedy in this case. Under New York's version of the UCC, "[s]pecific performance may be decreed where the goods are unique or in other proper circumstances." N.Y. U.C.C. Law § 2-716(1) (McKinney 2008). Though a comment to this provision indicates that it "seeks to further a more liberal attitude than some courts have shown in connection with the specific performance of contracts of sale," id., cmt. 1, Exelon has offered no evidence from which a finding reasonably could be made that the goods in question were unique or that "other proper circumstances" exist.
First, the Court rejects Exelon's argument that the contract language itself makes specific performance appropriate. Exelon relies on language stating that GATC guaranteed "that Heathgate will punctually and fully perform its delivery obligations when sued," the guarantee "shall constitute a guarantee of performance and not of collection," and GATC would "promptly and faithfully perform Heathgate's obligations" if Heathgate failed to do so. 2d Am. Compl., Ex. C, §§ 1.1-1.3. These provisions describe GATC's obligations; they do not dictate the remedy for breach of those obligations.
Second, the New York cases that Exelon cites for the proposition that guarantee contracts are always enforceable by specific performance, as otherwise such contracts would be meaningless, are not controlling. Both of the cases that Exelon cites involved guarantees relating to security interests in specific collateral, a situation that does not exist in this case. See TCW Gem V. Ltd. v. Grupo Iusacell Cellular, S.A. de C.V., 7 Misc.3d 1008(A), 801 N.Y.S.2d 243, 2004 WL 3267267, at *4 (Sup.Ct. July 16, 2004); Nat'l Sur. Corp v. Titan Constr. Corp., 26 N.Y.S.2d 227, 230 (Sup.Ct.1940).
The Court also rejects Exelon's argument that damages are inadequate because it requires a reliable stream of uranium and if it had to purchase uranium on the spot market, doing so would raise the market price, causing its subsequent purchases to be more expensive. The Court has a hard time seeing how that would make damages inadequate; it would seem that it would simply increase the amount recoverable as damages. Cf. 12 Corbin on Contracts § 1146 (2007) ("Specific performance of a contract for the sale of [goods] will not, apart from statute, be decreed if such [goods] are readily procurable in the market. The cost of obtaining them can be ascertained; and money damages are adequate."). In any event, however, Exelon has failed to offer admissible evidence that reasonably would permit a finding that this hypothetical effect would occur. Exelon points to a report by its expert witness Gene Clark, which includes a statement that a purchase of 525,000 pounds of uranium on the open market would have the effect of raising the market *901 price. As GATC argues, however, neither Clark nor Exelon has offered any foundation supporting the admissibility of this particular opinion.
Finally, the cases Exelon cites for the proposition that specific performance is always available when a long-term supply contract is intentionally breached are unpersuasive. See Laclede Gas Co. v. Amoco Oil Co., 522 F.2d 33, 38-40 (8th Cir.1975) (applying Missouri law); Mo. Pub. Serv. Co. v. Peabody Coal Co., 583 S.W.2d 721, 725-28 (Mo.App.1979). Though these cases were decided under the UCC (albeit in Missouri), the fact that Exelon has been able to find only two thirty-year-old Missouri decisions suggest that specific performance of a long-term contract for the sale of a fungible good for which a market exists is the exception rather than the rule.
For these reasons, the Court grants summary judgment in favor of GATC on Count 2.
B. Exelon's Motion
Exelon moves the court for summary judgment of GATC's liability on Counts 2 and 3, and on the appropriateness of specific performance as a remedy in Count 2. Because the Court has determined that GATC is entitled to summary judgment on Exelon's claim for specific performance, the Court denies Exelon's motion as to Count 2. In support of its motion for summary judgment as to liability on Count 3, Exelon argues that it has satisfied all of the elements of a breach of contract claim against GATC and that GATC's affirmative defenses, including commercial impracticability, lack merit.
GATC effectively concedes that Exelon has satisfied all of the required elements for liability on its breach of contract claim but raises two defenses. GATC first argues that it cannot be liable to Exelon because it purportedly terminated its guarantee in August 2007. The Court has already rejected this argument. As explained earlier, the guarantee's language expressly releases GATC only from prospective liability following termination. In this case, Exelon is suing GATC based on pre-termination obligations.
GATC's second defense, to which the parties devote most of their argument, is that its obligations, along with Heathgate's, are excused under the doctrine of commercial impracticability because of a confluence of unforeseeable contingencies. GATC contends that Heathgate had to decrease its estimate of recoverable reserves by nearly 13 million pounds after it switched to a new reserve-estimating tool. GATC further contends that Heathgate's unit cost of production tripled between 2002 and 2006 due to the United States dollar's decline against the Australian dollar, inflation in the Australian mining sector, and an increase in chloride content of the uranium in the mine. As a result, GATC argues, Heathgate had insufficient reserves and inventory to meet its contractual commitments, and performing the contracts according to (heir terms would have had a severe effect on Heathgate's financial viability.
The New York Uniform Commercial Code codifies the common law doctrine of commercial impracticability by excusing a seller from performance "made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made." N.Y. U.C.C. Law § 2-615(a) (McKinney 2008). The rule "is based on the notion that where the parties can reasonably anticipate events that may affect performance, the prudent course is to provide for such eventualities in their contract." Florida Power & Light Co. v. Westinghouxe Elec. Corp., 517 F.Supp. *902 440, 454 (E.D.Va.1981). The contingency the seller relies upon cannot be one that was foreseeable at the time of contracting. N.Y. U.C.C. Law 2-615(a), cmt. 1 (McKinney 2008) ("This section excuses a seller... where his performance has become commercially impracticable because of unforeseen supervening circumstances not within the contemplation of the parties at the time of contracting."). Finally, if an unexpected contingency causing impracticability affects only a part of the seller's capacity to perform, the seller must allocate its goods among customers in a "fair and reasonable" manner. Id. § 2-615(b).
Exelon contends that Heathgate's rising production costs and its reduced reserves and inventory were all foreseeable in 2004 when the amendments to the Heathgate contracts were signed. In fact, Exelon argues, Heathgate claimed that these very same contingencies existed in 2004 and used them to induce Exelon to amend the contracts. GATC's argument is not so much that these contingencies themselves were unforeseeable, but that their magnitude was unforeseeable.
Production costs
Exelon argues that because Heathgate claimed in 2004 that rising production costs required it to amend its contracts with Exelon, GATC cannot now claim that later increases were, as required by section 2-615(a), a contingency the nonoccurrence of which was a basic assumption underlying the contracts. Exelon alleges that at the March 31, 2004 meeting between the parties, representatives of Heathgate and GATC told Exelon that Heathgate's cost of production had increased. They made a presentation to Exelon that highlighted their rising production costs, claiming that though costs in 2002 had been $11.50 per pound, they were expected to average $15.00 per pound in 2004. On May 7, 2004, Heathgate told Exelon that it needed to renegotiate its contracts with Exelon because of "increased costs due to the relative strength of the Australian dollar over the U.S. dollar." PX 10 at 2. An August 2004 valuation of Heathgate's Beverley uranium mine resources, completed prior to the date Heathgate amended its contracts with Exelon, stated, "[a] processing solution has yet to be developed for the high chloride content of South. It is impossible to accurately predict the likely associated costs at this stage." PX 90 at 6. In sum, Exelon contends that rising production costs had been a continuous reality for Heathgate from the time it began mining uranium at the Beverley mine, and that it well knew the unpredictable nature of such increases. PI. 56.1 Stat. ¶ 49.
Exelon also contends that courts have long held that rising production costs are foreseeable, and "[increased cost alone does not excuse performance unless the rise in cost is due to some unforeseen contingency which alters the essential nature of the performance." N.Y. U.C.C. Law § 2-615, cmt. 4 (McKinney 2008). In Maple Farms v. City School Dist. of City of Elmira, N.Y., 76 Misc. 2d 1080, 352 N.Y.S.2d 784 (Sup.Ct.1974), a milk seller sought a declaratory judgment of commercial impracticability after rising costs increased the cost of delivering milk to defendant to more than ten percent over the contractual price. Because the seller had entered into a fixed price contract, the purpose of which was to allow both parties to guard against fluctuation of milk prices, the court held that the risk of "substantial or abnormal" price increases was allocated to the seller. Id. at 1085, 352 N.Y.S.2d 784. In a case in which a uranium seller claimed impracticability because increased production costs made performance unprofitable, the court held that although it *903 "would be unfair to expect [the seller] to have prophesied the magnitude of the increases complained of," the seller could not rely on them to discharge its liability because it could have protected itself contractually. Iowa Elec. Light & Power Co. v. Atlas Corp., 467 F. Supp. 129, 134-35 (N.D.Iowa 1978), rev'd on other grounds, 603 F.2d 1301 (8th Cir.1979).
GATC responds that Heathgate could not have foreseen the rapid rate at which its costs of production rose and that the risk of the increase occurring was allocated to Exelon. GATC contends that the increase was "the result of a perfect, but unexpected storm" of factors, including the Australian dollar's decline against the United States dollar, inflation in the Australian mining sector, and an increase in the uranium ore's chloride content. Def. Resp. at 14. All of these factors, GATC asserts, were unanticipated. GATC argues that the magnitude of the cost increase is extraordinary because, it contends, Heathgate lost $4.2 million in connection with its 2003 and 2004 deliveries to Exelon and would lose an additional $10 million if it performed under the amended contracts. In Aluminum Co. of Am. v. Essex Grp., Inc., 499 F. Supp. 53, 76 (W.D.Pa.1980), the court excused the plaintiff from its obligations under a contract with an escalation clause indexed to both the Wholesale Price Index-Industrial Commodities ("WPI") and the labor rates paid to the plaintiff's employees. Id. at 55. The court found that a basic assumption of the contract was that any increase in the plaintiff's costs would correspond to an increase in the WPI. Id. at 72. As a result, the risk of a great disparity between the actual costs and the WPI was not allocated to the plaintiff, which would have lost $75 million over the life of the contract if forced to perform. Id.
GATC also cites Moyer v. City of Little Falls, 134 Misc. 2d 299, 510 N.Y.S.2d 813 (Sup.Ct.1986), in which a contractor sought to be excused from performing a waste-collecting agreement after the New York Department of Environmental Conservation closed a landfill, leading to a six-fold increase in the cost of dumping. Because the government action created a "substantially unjust situation totally outside the contemplation of the parties," the court excused the contractor from performing. Id. at 301, 510 N.Y.S.2d at 815.
The cases GATC cites are distinguishable from the case at hand. Unlike the supplier in Aluminum Co., Heathgate did not include a price escalation clause in its contract with Exelon to supply uranium. Instead, it chose to enter into multi-year, fixed-price contracts, both in the first instance and when it later amended the contracts. Likewise, GATC can point to no unforeseeable act by a third party, like the closure of the landfill in Moyer, that led to its increased production costs. Rather, it merely cites unfavorable exchange rates, inflation in the industry, and an increase in the chloride content of the uranium ore. As Exelon points out, the Court may take judicial notice of the fact that the exchange rate between the Australian and United States dollars changed very little between late 2004, when the Heathgate contracts were amended, and late 2006, when Heathgate declared impracticability.[3]See Fed. R.Evid. 201 (stating that a "judicially noticed *904 fact must be one not subject to reasonable dispute in that it is ... capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned"); cf. Transorient Navigators Co. v. M/S Southmnd, 788 F.2d 288, 293 (5th Cir.1986) ("The district court may properly take judicial notice of prevailing interest rates"). In addition, GATC has offered no evidence at all of the inflation in the mining sector to which it refers. As for the increase in the chloride content of the uranium, GATC itself cited "the hydro-geological, geochemical and other underground conditions unique to the Beverley site" as one of the justifications for amending the contracts in 2004 and was well aware of the uncertainty surrounding the costs of processing that uranium. PX 10 at E000468. Thus, that factor was neither unforeseen nor outside the parties' contemplation.
GATC argues that nevertheless, the risk that the post-2004 cost increases would occur was allocated to Exelon through the damage limitation contained in Article 14 of the contracts. In support of this argument, GATC cites Besicorp Grp., Inc. v. Thermo Electron Corp., 981 F. Supp. 86, 100 (N.D.N.Y.1997), in which the court upheld a damages limitation clause on the grounds that it reasonably allocated risk between the parties. Besicorp, however, has nothing whatsoever to do with commercial impracticability; the court merely addressed whether the provision was enforceable.
The Seventh Circuit has held that a fixed price contract expressly assigns the risk of market price increases to the seller and the risk of market price decreases to the buyer. Northern Ind. Pub. Serv. Co. v. Carbon County Coal Co., 799 F.2d 265, 278 (7th Cir.1986). The Court has a hard time seeing how the analysis of assignment of the risk of production cost increases is any different. When a seller sets a fixed price, it takes on the risk that its production costs will increase to a point at which it can no longer sell at a profit. The doctrine of commercial impracticability, which is devised to "[shift] risk in accordance with the parties' presumed intentions," has "no place when the contract explicitly assigns a particular risk to one party or the other." Id. The Court agrees with Exelon's contention that Heathgate and GATC assumed the risk that production costs would rise. Thus, those cost increases cannot excuse GATC's performance.
Reduced reserves and inventory
Exelon contends that Heathgate could and did anticipate that it would have to reduce its estimates of uranium reserves. As far back as 2001 and 2002, when Heathgate signed the original contracts, it included a provision allowing it to supply uranium from other sources if, for any reason, uranium from the Beverley mine became unavailable. In its August 2004 business valuation, Heathgate noted that there was a "low level of confidence" in the quantity of uranium in reserve due to the "dated techniques (i.e. use of gamma logging)" that Heathgate used to estimate probable reserves. PX 90 at 6.
Exelon contends that in addition to anticipating the likelihood of inaccurate reserve estimates, Heathgate also knew in advance that the in-situ leach ("ISL") mining process it used at the Beverley mine was risky. A memorandum between Heathgate employees Mark S. Chalmers and Maerten on March 10, 2004 refers to ISL mining as "probably the riskiest of all the mining methods," and states that it was "by far less predictable and more variable than conventional" uranium mining methods. PX 153 at HG_GA_EX 00028881. Two months later, on May 7, 2004, in a letter to Exelon, Heathgate complained *905 of production shortfalls due primarily to "uncertainties inherent in in-situ leach mining." PX 10 at 2. All of this evidence predates the 2004 amendments to the Heathgate contracts.
GATC argues that Heathgate could not have foreseen that it would have to reduce its estimates of pre-mining recoverable uranium reserves by 13 million pounds between 2001 and August 2006 because its reserve calculations were always conducted by experienced competent geologists following the Joint Ore Reserve Committee's established Code. GATC contends that because of write-downs in reserves following its improved estimate, Heathgate had only 5.4 million pounds of recoverable uranium left in the mine, rather than over 18 million pounds.
In Sunflower Elec. Coop., Inc. v. Tomlinson Oil Co., 7 Kan. App. 2d 131, 638 P.2d 963, 971 (1981), a case with similar facts, the court rejected a natural gas seller's claim of impracticability based on its discovery that its oil fields contained inadequate reserves. In analyzing the issue of foreseeability, the court focused on the seller's knowledge at the time of contracting that the reserves were difficult to predict and that its estimates might be wrong. Id. Because the seller entered into a fixed quantity contract "before it was determined that that quantity existed and without any provision being made in the contract for such a contingency," the court concluded that the seller should have foreseen that the fields might not contain sufficient reserves. Id. at 973.
In Cliffstar Corp. v. Riverbend Prods., Inc., 750 F. Supp. 81 (W.D.N.Y.1990), the plaintiff, a purchaser of tomato paste, argued that the defendant tomato paste supplier was aware of a tomato crop shortfall by the time it confirmed the plaintiff's late-July order. Id. at 84-85. Therefore, the purchaser contended, the supplier could have foreseen at the time of contracting that it would be unable to deliver the ordered tomato paste. Id. at 85. The supplier admitted that a disappointing Arizona tomato harvest had concluded by the time of the contract but said that it remained hopeful that the California harvest, which would not conclude until later, would make up the shortfall. Id. Furthermore, an industry report had forecasted that California's harvest would be larger than previously estimated. Id. The court ruled that there was a genuine issue of material fact as to whether the overall tomato crop shortage was foreseeable at the time the contract was made. Id.
Unlike in Cliffstar, in which a jury reasonably could find that the supplier relied on estimates of a bumper crop when it entered into a fixed-volume contract, there is no evidence that Heathgate believed its reserves might be greater than it estimated. Rather, it is undisputed that Heathgate was aware that its dated gamma logging estimation technique was likely overestimating its reserves, or at the very least (like the seller in Sunflower) that its reserves were largely unknown. Furthermore, Heathgate knew early on the risks of ISL mining but entered into a fixed-volume contract with Exelon anyway. In entering into a fixed-volume contract while simultaneously contracting to obtain uranium elsewhere if it was unavailable from the Beverley mine, Heathgate allocated the risk of reduced production and reserves to itself, not to Exelon. Even if the precise magnitude of Heathgate's reduction in reserves was not foreseeable, there is no genuine issue of fact as to whether the reduction itself was.
Because the contingencies upon which GATC bases its impracticability argument were both foreseeable and actually foreseen by Heathgate, the impracticability defense *906 is unavailable as a matter of law. The Court thus need not reach the questions of whether the contingencies made performance impracticable, whether Heathgate caused the impracticability itself, and, if the impracticability was only partial, whether Heathgate allocated its product in a fair and reasonable manner.
For the foregoing reasons, the Court concludes that Exelon is entitled to summary judgment on Count 3 as to GATC's liability for breach of contract.
Conclusion
For the reasons stated above, the Court grants in part and denies in part GATC's motion for summary judgment [docket no. 70] and Exelon's motion for summary judgment [docket no. 66]. Summary judgment is granted in favor of GATC on Count 2 and in favor of Exelon as to liability on Count 3. The motions are otherwise denied. The case is set for a status hearing on April 12, 2008 at 9:30 a.m. Counsel are to be prepared to discuss what witnesses each side expects to call at trial and the anticipated length of the trial.
NOTES
[1] Although GATC argues that the Court should not consider extrinsic evidence of the parties' intentions, it notes that in the event that the Court chooses to do so, the Exelon employee who negotiated the contract agrees with GATC's interpretation.
[2] The Court need not address at this time the admissibility of the other purported trade-usage evidence that Exelon cites.
[3] See Exchange Rates Historic lookup, http://www.x-rates.com/cgi-bin/hlookup.cgi (last visited Mar. 26, 2008). After viewing the values gathered from the Federal Reserve Bank of New York, the Court takes judicial notice that the Australian dollar was worth $.766 USD on December 21, 2004, the day the Heathgate amendments were signed, and that it was worth $.77 USD on September 5, 2006, the day Heathgate declared commercial impracticability. Id. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1099607/ | 97 So. 2d 415 (1957)
233 La. 617
W. F. TAYLOR, Jr., et al.
v.
Joe W. DUNN et al.
W. F. TAYLOR, Jr., et al.
v.
Clyde R. MINOR, Jr., et al.
No. 43166.
Supreme Court of Louisiana.
June 28, 1957.
Rehearing Denied October 8, 1957.
*417 Jackson, Smith, Mayer & Kennedy, Hargrove, Guyton, Van Hook and Hargrove, Shreveport, for defendants-appellants.
Cook, Clark, Egan, Yancey & King, Shreveport, for plaintiffs-appellees.
FOURNET, Chief Justice.
The plaintiffs,[1] alleging that on October 31, 1936, W. F. Taylor Company, Inc., a Louisiana corporation domiciled at Shreveport and owner of Cedar Croft Plantation consisting of some 1,500 acres of land in Caddo Parish, sold the plantation to Clyde R. Minor, reserving in the sale an undivided half mineral interest, and that they, the plaintiffs, as successors in title of W. F. Taylor Company, Inc.,[2] on October 1, 1946, granted an oil, gas and mineral lease covering their said half interest in favor of Atlas Oil and Refining Corporation, which commenced drilling operations on Cedar Croft Plantation on October 19, 1946, drilled with due diligence to a depth of approximately 3,000 feet and finally abandoned the well as a dry hole on November 4, 1946, and that said lease was still a valid and existing lease upon the property, filed two petitory actions against the present owners of Cedar Croft[3] who, it is said, *418 deny the existence and validity of petitioners' mineral servitude. They prayed to be recognized the true and lawful owners of a mineral servitude affecting half of the minerals in and under and upon Cedar Croft Plantation, and for judgment quieting them in their possession and enjoyment of same.
For answer, similar in the two cases, the defendants averred that the drilling operations did not constitute a bona fide attempt to obtain production of minerals in paying quantities, but were merely an attempt to interrupt the running of prescription liberandi causawhich ten year prescription under provisions of the Civil Code of Louisiana was specially pleaded by the defendants. The Minors, further answering in the alternative, averred that a road which divides the plantation into two sections was the result of two dedications made by the W. F. Taylor Co., Inc. before the sale to Minor;[4] that said dedications to public use "constituted transfers in fee simple to the strips of land described," thus having the effect of dividing the servitude retained by W. F. Taylor Co., Inc., into two separate and distinct mineral servitudes, so that the drilling of the well on one portion of Cedar Croft did not have the effect of interrupting the ten year liberative prescription running against the mineral servitude affecting the other. Defendants in both cases prayed for trial by jury on the issues, and on joint motion of all parties the cases were ordered consolidated for purposes of trial and were set for June 7, 1956. On that date, when the cases were called, exception of non-joinder of indispensable parties was filed by each defendant group, as well as motions for a continuance; and these having been argued, submitted and overruled, trial on the merits was had, resulting in the jury's verdict "for the plaintiffs and against the defendants, as prayed for." Separate judgments were rendered in which the trial judge adopted the jury's verdict, and accordingly the plaintiffs were recognized to be the true and lawful owners of half of the minerals in, under and to be produced from the therein described property, with the right of ingress and egress for proper development of same. The defendants have appealed, specifying as error the trial court's (a) holding that drilling was conducted in good faith; (b) failure to recognize that two separate servitudes resulted from the reservation by W. F. Taylor Co.; (c) overruling of defendants' Exceptions of Nonjoinder of Indispensable Parties; (d) failure to grant their Motion for a Continuance; and (e) exclusion of certain testimony offered by defendants.
The appellants, in support of their contention that the drilling operations were not conducted in good faith, argue that those operations were carried on under the direction of a Special Committee which had been set up by Atlas Oil and Refining Corporation solely for the purpose of spending some three-quarters of a million dollars to avoid the payment of excess profits taxes, and were undertaken without regard to the prospects of discovering minerals in paying quantities; as proof thereof, defendants claim that the record shows the only lease acquired by Atlas Oil and Refining Corporation in the area around the plantation, although supposedly an area approved by the Committee as suitable for development purposes, was the lease of Cedar Croft itselfcovering, however, only an undivided half interest in the minerals; the drill site, although first located on the *419 west side of the highway, on the smaller portion of the plantation, was moved, without explanation, over to the very much larger east side, and located on the extreme northern edge of the property, offset on three sides by unleased acreage; that drilling operations were begun nineteen days after execution of the lease, and only twelve days before the servitude would have expired; that numerous wells had previously been drilled in the surrounding area to a depth sufficient to test the horizon to which this well was completed, and Atlas-Minor No. 1 well was surrounded by numerous dry holes, nothing having been found in any of those wells which would give hope or encouragement in the selection of that location.
Defendants' argument that "drilling operations under a lease covering only an undivided mineral interest do not constitute sufficient use of the servitude to interrupt prescription" is clearly without merit. Huckabay v. Texas Company, 227 La. 191, 78 So. 2d 829. In that case we held that the lessee of fractional mineral rights had an absolute right to go upon and develop the property, independent of the holder of the remaining fractional mineral interest, "the only limitation being that if minerals are found, the finder is entitled to take only his share; * * *." 227 La. at page 197, 78 So.2d at page 831.
We think a fair appraisal of the evidence does not support appellants' contention of lack of good faith on the part of Atlas Oil & Refining Corporation in the drilling of the well; on the contrary, we think the evidence is most convincing that these operations were conducted in good faith, and fully warranted the jury's verdict for the plaintiffs. It is shown that it was common practice among oil companies, when they had enjoyed a profitable and successful year, to undertake a search for oil reserves, devoting to the project money which would otherwise have to be paid to the government as excess profits taxes; that in the year 1946 Atlas Oil and Refining Corporation, having profits of some three quarters of a million dollars, decided to spend the amount in developing fields for oil and gas. The so-called Paluxy sands occur in the general area of North Louisiana with which we are here concerned, being found at a depth of from 2,500 to 3,000 feet, and Paluxy was a known producing horizon, so an exploratory program to discover reserves of oil and gas in the Paluxy sands was started by Atlas. To implement the program it secured the services of several men respected and experienced in the oil business, men outstanding in their professions of geologist or independent oil producer. These men composed a Special Committee which met at regular intervals, and on the basis of geological surveys would designate an area as showing promise for development, whereupon leases would be obtained, drilling contracts would be let, a site would be chosen and actual drilling would proceed.
The record also discloses that in developing the program, Atlas drilled or participated in drilling about thirty wells, these being located all over North Louisiana, some in Texas and some in Mississippi; a total of three wells were drilled in the Greenwood area, of which Atlas-Minor No. 1 was one, all having been drilled to a depth sufficient to test the Paluxy formation. While there was no way to determine before the well was drilled whether the Paluxy sands were present, or, if present, whether they would be productive, since the sands come and go (yet trap the oil in pockets), nevertheless when the drilling of Atlas-Minor No. 1 was undertaken it was thought there was a good possibility of obtaining production in commercial quantities in the Paluxy zone because there had been found oil and gas in that zone northeast of the town of Greenwood, the Paluxy was a known producing area both north and south of the location in which this well was drilled, and the Paluxy sands were the *420 nearest productive sands when Atlas Minor No. 1 was drilled in 1946.
Defendants' claim that two separate servitudes resulted from the mineral reservation by W. F. Taylor Co. because of the fact that Cedar Croft was at the time traversed by a highway, and the effect of the dedications of that strip of land was to transfer title, so that even if it should be held that the drilling of the well on one section of the plantation interrupted prescription, the servitude has become extinguished as to the other section, is not supported by the two instruments creating such roadway. The first, dated May 15, 1917, was a dedication by Mr. W. F. Taylor to the public use for a public road of "A right of way sixty feet wide," following a certain center line of the then proposed highway "as has been surveyed through Sec. 34 and Sec. 35, T. 17, R. 16;" the other instrument, dated December 9, 1929, signed W. F. Taylor Co., Inc., by its President, F. H. Ford, merely widened the strip to one hundred feet, which "strip includes the right of way now used as a public highway." The jurisprudence is well settled that the instrument as a whole must be considered in arriving at what was meant in the dedication, and that unless the deed itself evidences that the parties intended otherwise, the conveyance of a right of way is the grant of a servitude and not a transfer of title to the land. See Texas & Pac. Ry. Co. v. Ellerbe, 199 La. 489, 492, 6 So. 2d 556, and cases there cited.
The defendants' exception of non-joinder of indispensable parties is based on the legal presumption obtaining under our Civil Law that property acquired in the name of either spouse during the existence of the community belongs to the community, and that therefore the rights acquired by the children of W. F. Taylor in the mineral servitude at issue here,[5] regardless of the recitation of a purchase with separate and paraphernal funds, were acquired (it is said) for the benefit of and became assets of the respective communities of acquets and gains then existing between plaintiffs and their respective spouses; and that therefore Charles D. Evans, if he be alive, or, if not alive, then his heirs or legatees, and Frank H. Ford are indispensable parties to this suit. And, as to W. F. Taylor, Jr., it is their contention that unless it be affirmatively shown there has been no change in his marital status *421 in the interval between the date of the transfer of the servitude and the present, then Gertrude Cox is also an indispensable party.
It is elementary that every party who may be affected by a decree must be made a party to a suit, because no one should be condemned without a hearing. Heirs of Burney v. Ludeling, 41 La.Ann. 627, 6 So. 248; Succession of Todd, 165 La. 453, 115 So. 653; Commercial Nat. Bank in Shreveport v. Haas, 182 La. 504, 162 So. 57; Jamison v. Superior Oil Co., 220 La. 923, 57 So. 2d 896. Under the laws of this State, all property acquired during the existence of the marriage, whether purchased in the name of the husband or the wife, is presumed to be community property (Article 2402, Louisiana Civil Code), and the jurisprudence holds that the presumption is not overcome by a mere declaration of the spouses in a deed to the wife that the latter is purchasing with her separate and paraphernal funds, under her separate administration; that "the wife, * * * to overcome the presumption in favor of the community, must establish three crucial facts, namely: (1) The paraphernality of the funds; (2) the administration thereof separately and apart from her husband; and (3) investment by her." Houghton v. Hall, 177 La. 237, 244, 148 So. 37, 39; Johnson v. Johnson, 213 La. 1092, 36 So. 2d 396; Succession of LeJeune, 221 La. 437, 59 So. 2d 446; Stevens v. Johnson, 230 La. 101, 87 So. 2d 743. The husband, as head and master of the community of acquets and gains (Article 2404, Louisiana Civil Code), is the proper party to prosecute its rights and defend its interests, and the wife alone can neither prosecute such a claim nor defend an action against the community and stand in judgment to bind it.
Inasmuch as the record shows that the wife of William F. Taylor, Jr., is still living with him in community, she is clearly not a necessary party to this suit. With respect to Frank H. Ford and Charles D. Evans, however, the situation is different, and the point is well taken. While the record lends the impression that the subject property was actually paraphernal, yet as the purchasers of the assets of W. F. Taylor Company, Inc., assumed the debts of that company, in the absence of a showing that either Mrs. Ford or Mrs. Evans had separate funds with which to pay their share of such debts, if there were any, or that they did pay debts under their obligation with separate funds rather than community funds, and as it is not clear the time and manner of acquisition of the stock of W. F. Taylor Co., Inc., given in consideration of their respective purchases, it necessarily follows that the presumption that the property acquired in the deeds was community property has not been overcome. Under such circumstances Mrs. Ford can neither prosecute nor stand in judgment for the community without Frank H. Ford joining her or being made a party to this suit. The fact that he executed the deeds in his capacity as Liquidator of W. F. Taylor Company, Inc., and that he testified in court disclaiming any interest in the property, cannot be the basis of an estoppel by which his forced heirs would be concluded. Louisiana Civil Code, Article 2239; Houghton v. Hall, supra, 177 La. at page 258, 148 So. at page 43, and authorities there cited. And inasmuch as the record shows that Mr. Evans died subsequent to the acquisition of the mineral servitude at issue, his widow, as the surviving widow in community, can prosecute her claim, defend the same and stand in judgment only to the extent of her half of the community interest; as to the other half it will be necessary (in the absence of a showing that the property was in fact paraphernal) to determine who are the heirs or successors of Mr. Evans, so that they may be made parties.
The defendants, anticipating that "the absence of indispensable parties may cause this case to be remanded", argue that their motion for a continuance should *422 have been granted to permit them an opportunity to "attempt to locate certain missing minutes of its [Atlas'] Exploration and Development Committee to see whether they threw any light on the question of whether this well was a good faith attempt to find production in paying quantities;" also, that two witnesses offered by the defendants, being the owners of land adjoining Cedar Croft Plantation, "should have been permitted to testify fully with respect to the fact that their land was unleased and no attempt was made to lease their land, so that this testimony would be available to the jury in its deliberations." There is no merit in either point. The defendants could make no showing that the minutes they seek are in existence, or as to their contents; defendants did show a diligent effort in the several months preceding trial to unearth all minutes kept by the Committee,[6] and we are impressed with the fact that the data which they did find indicated a completely honest and aboveboard course of conduct on the part of the Special Committee. The testimony of the owners of lands adjoining Cedar Croft, for the purpose introduced, was immaterial to the issue here.
As previously stated, from the record it appears very probable that this property is the separate property of these plaintiffs. We have therefore concluded to remand the case to the lower court for the purpose of determining the paraphernality of the interest involved. Following a hearing, should the trial judge conclude that the property is the separate property of the plaintiffs, then he is to reinstate his former judgments; and if the property is found to be community property, then he is to grant a new trial in order that all necessary parties may be joined.
For the reasons assigned, the judgments of the lower court are annulled and set aside and the cases are remanded to the lower court for further proceedings in accordance with law and not inconsistent with the views herein expressed; costs of this appeal are to be borne by the appellees; all further costs to await the final determination of this cause.
NOTES
[1] William F. Taylor, Jr., Mrs. Nell Taylor Boggs, widow of W. Kyle Boggs, and Mrs. Amanda Taylor Ford, wife of Frank H. Ford.
[2] On December 30, 1936, the W. F. Taylor Company, Inc., acting through Frank H. Ford, its duly qualified Liquidator, transferred and conveyed all of the assets formerly owned by the said Company to Mrs. Genevieve Gray Taylor, widow of W. F. Taylor, and to the Taylor children, Mrs. Nell Taylor Evans (who later became Mrs. Boggs), Mrs. Amanda Taylor Ford and William F. Taylor, Jr., in the proportion of one-half to the widow and one-sixth to each of the children. Upon the death of Mrs. Genevieve Gray Taylor, which occurred shortly thereafter, her above-named children, as sole heirs, were recognized and sent into possession as owners, in equal proportions, of her property, including her interest in the servitude at issue in this suit.
[3] In the first suit, filed May 13, 1955, the named defendants were Joe W. Dunn, Jack R. Dunn and Eugene F. Dunn; in the second suit, filed March 8, 1956, those made defendants were the heirs of Clyde R. Minor, deceased, namely, his widow, Mrs. Audrey N. Minor, and Clyde R. Minor, Jr. and Edwin C. Minor. Plaintiffs concede that the Dunns own title to part of the plantation and that the Minors (Mrs. Minor actually resides at Cedar Croft) own such part as is not owned by the Dunns; and that title to the mineral interest not claimed by them, the plaintiffs, is in the various named defendants.
[4] The first dedication, made by instrument dated May 15, 1917, granted "A right of way 60 feet wide, 30 feet on each side of the center line of the proposed Greenwood-Bethany Road;" the second, by instrument dated December 9, 1929, widened the strip to 100 feet. The road forms part of Louisiana State Highway No. 203 and U. S. Highway No. 79.
[5] The record reveals that the interest of the plaintiffs herein was acquired by virtue of two instruments; in the first, by notarial act dated December 30, 1936, Frank H. Ford, appearing in his capacity as Liquidator of W. F. Taylor Company Inc., acting pursuant to authority granted to him by consent of the stockholders and duly recorded in the Conveyance Records of Caddo Parish and with the Secretary of State, bargained, sold, conveyed and delivered, unto the widow of W. F. Taylor and his three children, Mrs. Nell Taylor Evans, wife of Charles D. Evans, Mrs. Amanda Taylor Ford, wife of Frank H. Ford, and William F. Taylor Jr., whose wife is Gertrude Cox, all spouses living in full community, various described tracts of real property, as well as "all of the assets of whatsoever kind and wheresoever situated * * * formerly owned by W. F. Taylor Company, Inc." The transfer was made "in consideration of the delivery and cancellation by the purchasers of all of the stock of W. F. Taylor Company, Inc., and the assumpsit by the vendees of the outstanding liabilities of W. F. Taylor Company, Inc., such assumpsit being made by the vendees in the ratio which their interest in the property herein acquired bears to the whole property; that is to say, one-half is assumed by Mrs. W. F. Taylor and one-sixth (1/6) each by the other three vendees." That instrument was signed only by Frank H. Ford as Liquidator none of the vendees having signed. Upon discovery that the mineral servitude at issue here had not been included in the properties described in the above instrument, a second notarial act was executed to remedy the oversight; dated April 30, 1937, it conveyed the mineral interest to the same parties in the same proportions as the former deed, the purchase being with paraphernal funds and the consideration being that expressed in the former deed. This instrument was signed by Frank H. Ford as Liquidator, by Mrs. Taylor and the three Taylor children, plaintiffs here, but not by their respective spouses either as parties or as witnesses.
[6] Atlas Oil and Refining Corporation is now defunct and its files have been removed to another State. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1477404/ | 125 F.2d 879 (1942)
KHARAITI RAM SAMRAS
v.
UNITED STATES.
No. 9831.
Circuit Court of Appeals, Ninth Circuit.
February 13, 1942.
*880 Walter F. Lynch, of San Francisco, Cal., for appellant.
Frank J. Hennessy, U. S. Atty., and R. B. McMillan and L. R. Mercado, Asst. U. S. Attys., all of San Francisco, Cal., for appellee.
Before GARRECHT, HANEY, and HEALY, Circuit Judges.
HANEY, Circuit Judge.
Appeal is taken from an order of the court below denying a petition for citizenship.
Appellant was born in Manko, India in 1904, and is of the East Indian (Hindu) race. He was admitted into the United States for permanent residence on May 1, 1923. He filed his declaration of intention on August 12, 1937 and his petition for naturalization on August 15, 1940. On December 23, 1940, an examiner designated to conduct preliminary hearings on such petitions pursuant to 8 U.S.C.A. § 733, recommended that appellant's petition be denied on the ground that he "is not a person of the White Race or of African nativity or descent, and therefore is not eligible to naturalization". The order denying the petition was entered on December 27, 1940 "on the ground of racial ineligibility". This appeal was then taken.
The provisions for naturalization of aliens, at the time material here, were extended only to "aliens being free white persons, and to aliens of African nativity and to persons of African descent". Rev. St. § 2169, as amended, 8 U.S.C.A. § 703 note. Appellant contends that such statute is unconstitutional and void because: (1) Art. 1, § 8, Cl. 4 of the Constitution empowers Congress "To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States", and this clause means uniformity as to all races and not uniformity geographically throughout the United States; (2) Art. 1, § 8, Cl. 18 of the Constitution *881 empowers Congress "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers" and the statute in question is neither "necessary" nor "proper" in that respect; and (3) the Fifth Amendment of the Constitution provides that "No person shall * * * be deprived of life, liberty, or property, without due process of law" and the statute in question violates that amendment in that the statute in question is a manifestly and grossly unreasonable, irrational, illogical, arbitrary, capricious and discriminatory classification based on race or color.
The argument of appellant is based on the assumption that the courts may determine questions regarding naturalization not entrusted to them by Congress. In other words, there are certain actions of Congress which cannot be reviewed in the courts. For example, Congress is empowered to declare war, but we suppose no one would contend that the courts could nullify such a declaration on the ground that it was arbitrary, capricious and unreasonable. Power over naturalization, although expressly given to Congress by the Constitution, is similar to the inherent power of Congress over the exclusion and deportation of aliens. Regarding the latter, the power is political, and the exercise thereof cannot be challenged in the courts. Nishimura Ekiu v. United States, 142 U.S. 651, 659, 660. No less reason exists for saying that the power over naturalization is political also. This point is not argued by either party.
However, assuming that we may discuss the questions argued, we think none of the contentions is sound. Regarding the provision in the Constitution empowering Congress to establish a "uniform" rule of naturalization, we think the restriction of uniformity relates to geography only. See The Federalist No. XLII; Thomas v. Woods, 8 Cir., 173 F. 585, 591, 26 L.R.A., N.S., 1180, 19 Ann.Cas. 1080.
The test, as to what the Constitution means when it empowers Congress to make all laws which shall be "necessary and proper" for carrying into execution the preceding enumerated powers, is stated in Legal Tender Cases, 110 U.S. 421, 440, 4 S.Ct. 122, 125, 28 L.Ed. 204:
"By the settled construction and the only reasonable interpretation of this clause the words `necessary and proper' are not limited to such measures as are absolutely and indispensably necessary, without which the powers granted must fail of execution; but they include all appropriate means which are conducive or adapted to the end to be accomplished, and which, in the judgment of Congress, will most advantageously effect it."
It is obvious that the statute was one which in the judgment of Congress would effect a "uniform Rule of Naturalization", otherwise it would not have been passed. It is likewise obvious that a statute is an appropriate means of establishing the rule, and that the statute in question was adapted or suitable to establish such uniform rule. The statute cannot, therefore, be voided on the ground that it is not "necessary and proper".
"Life" and "liberty" mentioned in the Fifth Amendment are not involved here. Has appellant been deprived of "property" without due process of law? The only thing in question is appellant's alleged right to citizenship. Assuming that such a right is property, the real question comes down to: Does appellant have a right to citizenship? He obviously has obtained no such right by statute because the statute does not include him. If he has such a right, he could obtain it from only one source the Constitution. Does he have such a right under the Constitution? That question is settled by the following statement from Tutun v. United States, 270 U.S. 568, 578, 46 S.Ct. 425, 427, 70 L.Ed. 738: "It is true that the Constitution does not confer upon aliens the right to naturalization". See, also, United States v. Macintosh, 283 U.S. 605, 615, 51 S.Ct. 570, 75 L.Ed. 1302; United States v. Schwimmer, 279 U.S. 644, 649, 49 S.Ct. 448, 73 L.Ed. 889; Maney v. United States, 278 U.S. 17, 22, 49 S.Ct. 15, 73 L.Ed. 156.
Appellant also contends that he is a free white person within the meaning of the statute. 8 U.S.C.A. § 703 note. United States v. Bhagat Singh Thind, 261 U.S. 204, 43 S.Ct. 338, 67 L.Ed. 616 is admittedly contrary. Appellant contends that such decision "should be reconsidered and departed from" and states:
"* * * We believe that with the present changed personnel of the United States Supreme Court it is entirely possible that they may reconsider their decision in the Thind case, supra, and depart therefrom and hold that natives of India (Hindus) *882 are `white' persons within the spirit and meaning of" the statute. While the Supreme Court of the United States can overrule the Supreme Court of the United States, that is something which we cannot do. On the authority of United States v. Bhagat Singh Thind, supra, we hold that appellant is not within the statute in question. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/819119/ | 196 F.Supp.2d 1351 (2002)
Byung Wu LEE, Plaintiff,
v.
UNITED STATES, Defendant.
SLIP.OP. 02-33, No. 97-12-02192.
United States Court of International Trade.
March 29, 2002.
*1352 *1353 Peter S. Herrick, Miami, FL, for Plaintiff.
Robert D. McCallum, Jr., Assistant Attorney General; Joseph I. Liebman, Attorney-In-Charge, and John J. Mahon, Acting Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Aimee Lee and Arthur J. Gribbin); David Fleck, Office of Associate Chief Counsel, U.S. Customs Service, Of Counsel; for Defendant.
OPINION
RIDGWAY, Judge.
Plaintiff Byung Wu Lee ("Mr.Lee") initiated this action pursuant to 19 U.S.C. § 1641(d)(2)(B) to contest the decision of *1354 the Secretary of the Treasury ("Secretary") revoking his customhouse broker's license. Mr. Lee has moved for judgment on the agency record under U.S. CIT Rule 56.1 to set aside the Secretary's decision. For the reasons that follow, Mr. Lee's motion is denied, and the Secretary's decision is affirmed.
I. Background
The United States Customs Service ("Customs"), a bureau of the Department of the Treasury, issued a broker's license to Mr. Lee on August 12, 1987. Agency Record ("A.R.") 17 at 4. On two separate occasions in the years that followed, Customs assessed monetary penalties against him for various violations of applicable statutes and regulations. On both occasions, he failed to pay the penalties within 60 days of their assessment.
Mr. Lee's failures to make timely payment themselves constituted new breaches of Customs regulationsspecifically, 19 C.F.R. §§ 111.29 and 111.94.[1] Invoking 19 C.F.R. § 111.53,[2] Customs sought revocation of Mr. Lee's license based on the new charges. The specific facts underlying the new charges were set forth in two so-called "specifications" in the administrative proceedings which ultimately resulted in the decision to revoke Mr. Lee's license, and which are at issue here.
A. Specification I
On August 16, 1990, Customs issued to Mr. Lee a Notice of Intent to Issue Monetary Penalty, advising that Customs was considering assessing a $1,000 penalty against him. That "$1,000 Pre-Penalty Notice" charged Mr. Lee with failure to exercise responsible supervision and control over Customs business conducted (a violation of 19 U.S.C. § 1641(b)(4)) and with failure to obtain a power of attorney before transacting Customs business for a principal (a violation of 19 C.F.R. § 141.46). A.R. 17 at 6.
Through counsel, Mr. Lee responded to the $1,000 Pre-Penalty Notice on September 13, 1990, contesting Customs' allegations and urging that the agency take no further action. A.R. 17 at 7-8. Customs considered but rejected Mr. Lee's arguments and, on January 15, 1991, issued a Notice of Penalty for $1,000 (the "$1,000 Penalty Notice"). A.R. 17 at 9. Mr. Lee responded to the notice through counsel on *1355 February 8, 1991, requesting "administrative relief' from the penalty. A.R. 17 at 13-14. After consideration of that second response, Customs rendered its final determination on October 10, 1991 ("Final Determination I"), mitigating the penalty to $250. A.R. 17 at 15.
Customs sent demand letters in November 1991 and in January, March, and April 1992. A.R. 17 at 17, 20, 23, 26. However, Mr. Lee failed to respond. Only after the matter had been forwarded to the Department of Justice for collection did Mr. Lee pay the $250in January 1993, well more than a year after Customs' Final Determination I. A.R. 17 at 27-28.
B. Specification II
In the meantime, on December 7, 1992, Customs had issued to Mr. Lee another Notice of Intent to Issue Monetary Penalty. That notice (the "$30,000 Pre-Penalty Notice") advised that Customs was considering assessing a $30,000 penalty against Mr. Lee for a laundry list of violations of applicable statutes and regulations identified in an agency audit of his books and records conducted in March 1992.[3] A.R. 17 at 29-33.
Mr. Lee filed no response to the $30,000 Pre-Penalty Notice. See A.R. 9, Recommended Decision and Order of Administrative Law Judge John M. Frysiak, In the Matter of Customs Broker's License Revocation of Byung Wu Lee ("ALJ Decision") ¶ 10. After considering the applicable laws and regulations, Customs issued a Notice of Penalty for $30,000 dated January 12, 1993 (the "$30,000 Penalty Notice"). A.R. 17 at 34. In the absence of any submission or other response from Mr. Lee, that determination was deemed to be the agency's final determination ("Final Determination II"). ALJ Decision ¶¶ 11, 23.
Customs sent demand letters in March, April and May 1993. A.R. 17 at 39, 46, 53. Customs' final demand for payment, dated December 15, 1993, offered to explore settlement possibilities. A.R. 17 at 60. The letter also warned Mr. Lee that, absent a response by December 24, 1993, the matter would be forwarded to the Justice Department for collection and action might be taken against his broker's license. Id. Mr. Lee failed to pay the penalty or otherwise respond to Customs' letter. ALJ Decision ¶ 25.
C. The Collection Action and The License Revocation Proceeding
Seeking to collect the $30,000 penalty, the Justice Department brought suit against Mr. Lee in this Court. The collection action, captioned United States v. Byung Wu Lee, Court No. 95-08-01075, was filed August 23, 1995. See A.R. 23.
In parallel with the Justice Department's prosecution of the collection action *1356 in this forum, Customs took action at the administrative level, commencing preliminary proceedings to revoke Mr. Lee's broker's license, based on his failure to timely pay the assessed penalties. The Commissioner of Customs approved the initiation of those proceedings on December 7, 1995, pursuant to 19 C.F.R. § 111.53(c), which authorizes license suspension or revocation proceedings where a broker has "violated any provision of any law enforced by Customs or the rules or regulations issued under any such provision." A.R. 28; see also 19 C.F.R. § 111.53(c) (1995).
Customs issued a Notice of Preliminary Proceedings and a Proposed Notice to Show Cause and Statement of Charges ("Proposed Notice to Show Cause") on December 27, 1995. See A.R. 26 at 1; A.R. 27 at 1. The Proposed Notice to Show Cause informed Mr. Lee of the charges against him in two specifications. A.R. 27 at 2. Specification I concerned Mr. Lee's failure to pay the mitigated penalty of $250 within 60 days of Customs' Final Determination I, issued October 10, 1991; Specification II concerned his failure to pay the $30,000 penalty within 60 days of Customs' Final Determination II, issued January 12, 1993. In both instances, the failures to make timely payment were cited as violations of 19 C.F.R. §§ 111.29 and 111.94. The Proposed Notice to Show Cause noted that almost three years after Customs' Final Determination IIMr. Lee still had not paid the $30,000 penalty. Id.
By letter from counsel dated January 29, 1996, Mr. Lee requested that the license revocation proceeding be held in abeyance pending resolution of the collection action. A.R. 25. Customs denied the request for an abeyance, but granted Mr. Lee additional time to respond to the proposed charges in the revocation proceeding. A.R. 24.
In a March 4, 1996 submission, Mr. Lee argued that the statute of limitations had expired for the violations which are the basis for Specification I, and that Specification II was "covered" by the $30,000 collection action he was then contesting. A.R. 20. The submission also incorporated by reference Mr. Lee's answer, affirmative defenses, and response to the request for admissions filed in the collection action. A.R. 21-22.
In a supplemental submission dated May 13, 1996, Mr. Lee argued that Customs could not proceed in a revocation action because it was already suing him to collect a penalty based on the same facts. A.R. 19 at 1. The Commissioner of Customs rejected that argument and authorized the institution of formal revocation proceedings on June 14, 1996.[4] A.R. 18.
The formal revocation proceedings commenced on August 13, 1996, with Customs' issuance of a Notice of Revocation Proceedings and a Notice to Show Cause and Statement of Charges ("Notice to Show Cause"). See A.R. 16; A.R. 17. Among other things, those documents informed Mr. Lee of his right to file an answer to the charges, his right to be represented by counsel at the formal revocation proceedings, and his right to cross-examine witnesses. A.R. 16 at 1.
D. The Administrative Hearing and The Decision of the Secretary
The license revocation hearing was conducted before an administrative law judge *1357 ("ALJ") on September 11, 1996. ALJ Decision ¶ 5. In his Recommended Decision and Order dated December 16, 1996, the ALJ made findings of fact and drew conclusions of law concerning both Specifications I and II, as well as the non-payment of penalties. See generally ALJ Decision.
Based on the record developed before him, the ALJ found that Mr. Lee was on notice that he owed the $250 penalty assessed against him on October 10, 1991, but chose not to pay or otherwise resolve it. ALJ Decision ¶ 24. The ALJ further found that Mr. Lee did not resolve the $250 penalty until January 1993well more than 60 days following Customs' Final Determination I, and only after a number of demands had issued and the case had been forwarded to the Justice Department for collection. Id.
Based on the record, the ALJ similarly determined that Mr. Lee was on notice that he owed the $30,000 penalty assessed on January 12, 1993, but again chose not to make timely payment or otherwise respond to Customs or resolve the penalty, whichas the ALJ notedstill remained unpaid. Id. ¶ 25.
The ALJ therefore concluded that Customs had met its burden of proof to establish the alleged violations. Specifically, he determined that:
[Customs] . . . proved by a preponderance of the evidence that Mr. Lee twice violated 19 C.F.R. § 111.29 as set forth in Violation I, Specifications I and II of the Charges; and . . . twice violated 19 C.F.R. § 111.94 as set forth in Violation II, Specifications I and II of the Charges.
Id. ¶ 26. The ALJ further noted:
Warning notices of a variety of deficiencies were issued to Mr. Lee. Although informed in each letter that he could contact the broker compliance unit, Mr. Lee failed to respond in any way to any of these notices. Mr. Lee's continued course of ignoring and disregarding the Customs Service when problems were brought to his attention, as evidenced by the three warning notices and his action regarding the two penalties, demonstrates gross irresponsibility in the performance of his duties. The evidence also demonstrates that he failed to improve his performance despite repeated communications from Customs and the imposition of disciplinary measures including monetary penalties.
Id. ¶ 27 (citation omitted). The ALJ therefore recommended that Mr. Lee's license be revoked. ALJ Decision at ¶ 29.
The Secretary of the Treasury adopted the ALJ's recommendation and revoked Mr. Lee's license on September 16, 1997.[5] The Commissioner of Customs notified Mr. Lee of the Secretary's decision by mailing a Notice of Revocation to Mr. Lee on November 3, 1997. See Letter to P. Herrick from Deputy Assistant Secretary of Treasury (Dec. 21, 1997) (advising of mailing of Notice of Revocation), attached to Letter from P. Herrick to Court (March 21, 2002) and Defendant's Supplemental Submission As Requested By The Court (March 22, 2002) ("Defendant's Supplemental Submission").
Mr. Lee filed this action to appeal the *1358 Secretary's decision.[6]
II. Jurisdiction and Standard of Review
Jurisdiction in this matter is predicated on 28 U.S.C. § 1581(g), which accords the Court exclusive jurisdiction over any action contesting the revocation of a customs broker's license. See also 19 U.S.C. § 1641(e).
Mr. Lee seeks to have the decision of the Secretary of the Treasury revoking his license set aside. See Complaint.[7] However, in a case such as this, the Court's role is limited. "[T]he Court may not substitute its judgment for that of the agency," but rather is only to "assure itself the decision was rational and based on consideration of relevant factors." Barnhart v. U.S. Treasury Dep't, 9 CIT 287, 290, 613 F.Supp. 370, 374 (1985). Thus, the Court may not second-guess the agency's choice of sanctions: "When the penalty chosen by an agency is within the range of sanctions provided by applicable disciplinary regulations, the severity of the sanction imposed is within the discretion of the agency." Id. at 291, 613 F.Supp. at 374 (quoting Tempo Trucking and Transfer Corp. v. Dickson, 405 F.Supp. 506, 514 (E.D.N.Y.1975)) (citation omitted).
In short, the Secretary's decision here must be affirmed unless the underlying *1359 findings of fact are unsupported by substantial evidence on the record, or unless the decision is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. See 5 U.S.C. §§ 706(2)(A), 706(2)(E); Tarnove v. Bentsen, 17 CIT 1324 (1993).
III. Analysis
A. Availability of Damages
In addition to the restoration of his broker's license, Mr. Lee also seeks unspecified damages from the Government. See Complaint ¶ 63; Plaintiff's Motion on the Agency Record to Set Aside the Secretary of the Treasury's Revocation of His Customs Broker's License at 1; Plaintiff's Brief in Support of His Motion on the Agency Record to Set Aside the Secretary of the Treasury's Revocation of His Customs Broker's License ("Plaintiff's Brief") at 1, 11. However, the claim for damages is beyond the jurisdiction of the Court.
It is axiomatic that "`[t]he United States, as sovereign, is immune from suit save as it consents to be sued . . ., and [that] the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (quoting United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941)). Accord United States v. Boe, 64 C.C.P.A. 11, 543 F.2d 151, 154-55 (Cust. & Pat.App.1976). See also Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) ("[s]overeign immunity is jurisdictional in nature"). Moreover, a waiver of sovereign immunity "`cannot be implied but must be unequivocally expressed.'" Mitchell, 445 U.S. at 538, 100 S.Ct. 1349 (quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 23 L.Ed.2d 52 (1969)); see also Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) (waiver of sovereign immunity "must be unequivocally expressed in statutory text" and will be "strictly construed, in terms of its scope, in favor of the sovereign") (citations omitted).
The Court's jurisdiction in this case rests on 28 U.S.C. § 1581(g) and 19 U.S.C. § 1641(e), which extend only to the review of the Secretary of the Treasury's decision revoking Mr. Lee's license. And Mr. Lee has identified no other statute where the United States has waived its immunity from liability for damages in circumstances such as these.[8] Accordingly, Mr. Lee's claim for damages must be dismissed for want of jurisdiction.
B. Statute of Limitations
As a threshold matter, Mr. Lee contends that the revocation of his license is invalid because the revocation proceeding was initiated more than five years after the asserted violations. Plaintiff's Brief at 4-6. He argues that the proceeding was therefore barred by the statute of limitations. Id.
The applicable statute of limitations requires that a revocation proceeding such as the one at issue here be "instituted by the appropriate service of written notice within 5 years from the date the alleged violation was committed." 19 U.S.C. § 1641(d)(4) (emphasis added).
*1360 1. Specification I
Mr. Lee posits that the statute of limitations for Specification I was triggered either on December 22, 1989 (the date of the violation that gave rise to the $1,000 penalty, which was later mitigated to $250), or on August 16, 1990 (the date of Customs' $1,000 Pre-Penalty Notice). Plaintiff's Brief at 5. Under Mr. Lee's reasoning, then, the statute of limitations would have expired five years later, either on December 22, 1994 or on August 16, 1995. Id. However, his position is at odds with both the facts and the law.
The violations at issue in the revocation proceeding were Mr. Lee's failures to timely pay assessed penalties not the underlying violations which resulted in those penalties (such as the December 22, 1989 violation). Moreover, the 60-day clock for timely payment did not begin to run until Customs issued its "final determination."[9] 19 C.F.R. § 111.94. Thus, the violation detailed in Specification I in the revocation proceeding did not occur until December 9, 1991 when Mr. Lee failed to pay the mitigated penalty within 60 days after Customs' October 10, 1991 issuance of its Final Determination I. Customs therefore had until December 8, 1996 to institute a revocation proceeding. See generally Defendant's Brief at 13-14. The Proposed Notice to Show Cause, dated December 27, 1995, issued almost a full year before the statute of limitations expired. Id.; see also Defendant's Supplemental Submission at 5-6.
2. Specification II
Although he offers no argument on the point, Mr. Lee also makes the conclusory assertion that "[t]he statute of limitations has expired regarding Specification II." Plaintiff's Brief at 8. That position too finds no support in the record.
When Mr. Lee failed to respond to Customs' $30,000 Penalty Notice (dated January 12, 1993), that notice became Customs' final determination. ALJ Decision ¶¶ 11, 23. Thus, the violation detailed in Specification II in the revocation proceeding occurred on March 15, 1993when Mr. Lee failed to pay the $30,000 penalty within 60 days after January 12, 1993. Customs then had five years from March 15, 1993until March 14, 1998to institute a revocation proceeding. See generally Defendant's Brief at 14-15. The Proposed Notice to Show Cause preceded that date by more than two years. Id.; see also Defendant's Supplemental Submission at 5-6.
In short, Mr. Lee has no statute of limitations defense.
C. Right to Judicial Review of the Legality of A Penalty
Mr. Lee also contends that Customs' action in seeking revocation of his license for his failure to timely pay assessed penalties effectively deprived him of his right to seek judicial review of those penalties. Plaintiff's Brief at 6-7. Mr. Lee asserts that "[t]he only course of action *1361 [open to him] . . . to prove he did not owe the penalty was to be sued by United States in a collection action." Id. at 7. But, he claims, the Government's position means that "if a customs broker . . . fails to pay a penalty timely by choosing to be sued for the penalty, such broker is automatically subjecting himself to revocation of his license." Id.[10]
Mr. Lee asserts, in essence, that he was confronted by a Hobson's choice: He could either (1) timely tender payment of a penalty he considered unjust and forever waive his right to challenge the legality of the penalty; or (2) put his license on the line by failing to pay within 60 days, in order to preserve his ability to challenge the legality of the penalty when a collection action was brought. But in fact Mr. Lee's options were not nearly so bleak.
The gravamen of Mr. Lee's argument is that a customs broker must be able to obtain judicial review of the legality of a penalty without jeopardizing his license. A broker's right to judicial review of a penalty assessed against him is settled law. See United States v. Ricci, 21 CIT 1145, 1148, 985 F.Supp. 125, 128 (1997) (while agency decision concerning mitigation of penalty is beyond judicial review, "[t]his does not prevent a broker from challenging the legality of the underlying *1362 penalty" in court). However, Mr. Lee has cited no authority to suggest that a broker is entitled to sit on his rights, as Mr. Lee did here.
Indeed, as the Government observes, Mr. Lee's actions at the time belie his present claim "that he intentionally refrained from paying the penalt[ies] in order to obtain judicial review." See Defendant's Brief at 22. Certainly nothing in Mr. Lee's correspondence with Customs concerning the $1,000 penalty (eventually mitigated to $250) hinted at such an intent. But most telling was his response when Customs referred the matter to the Justice Department for collection. Rather than seeking to seize on the threatened collection action as an opportunity to argue his case in a judicial forum (his purported objective), Mr. Lee instead chose to pay the penalty to avoid litigation. On those facts, Mr. Lee simply cannot now claim that he was deprived of his rights.
Similarly, Mr. Lee gave Customs no indication that he was intentionally refraining from paying the $30,000 penalty in order to obtain judicial review. As discussed in section I.B above, Mr. Lee "stonewalled" Customsignoring the agency for the 60-day period and beyond, even after he was expressly warned that a failure to respond might lead to license revocation proceedings. See also A.R. 17 at 60. This case is thus readily distinguished from Pentax, on which Mr. Lee relies.[11]See Plaintiff's Brief at 3, 7. While *1363 Mr. Lee here sat mute, the importer in Pentax affirmatively "informed Customs that they would `not make any written or oral presentation in response to the . . . prepenalty notices.'" Pentax Corp. v. Robison, 20 CIT 486, 489, 924 F.Supp. 193, 196 (1996), rev'd, 125 F.3d 1457 (Fed.Cir. 1997).
In short, the facts of this case do not support Mr. Lee's depiction of himself as a man on the horns of a dilemma. Nor is the asserted dilemma as Mr. Lee suggests.
Implicit in Mr. Lee's argument is the assumption that a broker cannot timely pay a penalty and nevertheless challenge its legality in an action to recover the monies paid. However, by analogy to Trayco, Inc. v. United States, 994 F.2d 832 (Fed.Cir.1993), a broker conceivably could tender timely payment under protest, specifically reserving his right to challenge the legality of the penalty, and then bring an action for a refund, either in federal district court or in the Court of Federal Claims.[12]See Trayco, 994 F.2d at 835 (noting that importer's cover letter indicated payment was being made "under protest reserving all rights to judicial review following the exhaustion of the administrative remedies").[13]See also 28 U.S.C. § 1346(a)(2) (concurrent jurisdiction of district courts and U.S. Court of Federal Claims under "Little Tucker Act"); 28 U.S.C. § 1491(a)(1) (jurisdiction of U.S. Court of Federal Claims under "Tucker Act").
The other "horn" of the asserted dilemma assumes that any failure to tender timely payment necessarily imperils a broker's licenseeven if payment is withheld for the purpose of preserving the broker's right to judicial review of the legality of the penalty. However, by analogy to Pentax (discussed above), a broker conceivably could withhold payment of a penalty (possibly depositing the funds in escrow), timely notify Customs that he is doing so to *1364 ensure that his right to judicial review is preserved, and then challenge the legality of the penalty when a collection action is brought. See Pentax, 20 CIT at 489, 924 F.Supp. at 196, rev'd, 125 F.3d 1457.
Neither of these paths has yet been definitively established as a proper means of vindicating the settled right of a broker to obtain judicial review of the legality of a penalty. But a Customs Directive has made it clear that a broker's failure to timely pay a penalty will not result in license revocation proceedings where the broker is contesting the penalty in good faith and in a timely fashion.[14]See A.R. 29, Customs Directive No. 099 3530-007 (Aug. 11, 1992).
Specifically, that Customs Directive notes that, "[b]ecause of the brokers' integral role in the conduct of Customs business, a high standard of broker performance is critical to the efficiency of the Customs Service and the accomplishment of the customs mission." Id. at 1. The Directive continues:
8. SUSPENSION/REVOCATION POLICY
Penalties issued to brokers under 19 U.S.C. § 1641 that remain unpaid can be considered the basis of suspension or revocation proceedings against the broker's license. As a matter of policy, Customs will not institute such proceedings against a broker who actively contests a monetary penalty by raising legal or factual issues on a timely basis and in the appropriate forum. However, the license of a broker who simply refuses to pay without raising a substantive legal or factual issue in a supplemental petition concerning the penalty is subject to revocation or suspension.
Id. at 5-6 (emphasis added).
In sum, there is no truth to Mr. Lee's claim that "if a customs broker . . . fails to pay a penalty timely by choosing to be sued for the penalty, such broker is automatically subjecting himself to revocation of his license." Plaintiff's Brief at 7. The dilemma that he posits does not exist. Ultimately, Mr. Lee's undoing was not his failure to pay, but his silence. Neither the law nor the facts of this case suggests that he was deprived of any of his rights.
D. "Election of Remedies"
Characterizing the Secretary's decision as an attempt to "bootstrap" a penalty into grounds for revoking his license, Mr. Lee contends thatwith respect to Specification IIthe Government "had a choice between assessing a penalty or to institute a license revocation proceeding." Plaintiff's Brief at 3, 7-8. In essence, he argues that the Government cannot both assess a penalty and revoke his license. In support of this variation on an "election of remedies" defense, Mr. Lee cites Appendix C to 19 C.F.R. Part 171. Appendix C provides (in pertinent part): "Assessment of a monetary penalty is an alternative *1365 sanction to revocation or suspension of the broker's license or permit." See Plaintiff's Brief at 8, quoting 19 C.F.R. Part 171, App. C (1995) (emphasis added).
Mr. Lee's charges of "bootstrapping" are unfounded. Again, as elsewhere,[15] he fails to recognize "that the reasons for the penalties and the reasons for the revocation of license are different and separable." Defendant's Brief at 16. The $30,000 penalty was imposed for the numerous violations identified in Customs' March 1992 audit. The license revocation proceeding was based on Mr. Lee's failure to timely pay that penalty (and an earlier one).
Mr. Lee's reliance on Appendix C to 19 C.F.R. Part 171 is similarly unavailing. Appendix C's reference to an "alternative sanction" concerns Customs' choice of remedy for a single violation. Because Customs in this case sought different remedies for different violations, Appendix C is simply inapposite. Accordingly, Mr. Lee's "election of remedies" argument must be rejected.
E. Penalty as "Debt" or "Obligation" Owed to Government
In yet another attempt to undermine the license revocation determination, Mr. Lee challenges the ALJ's determination that his failure to timely pay penalties constitutes a breach of 19 C.F.R. § 111.29. See Plaintiff's Brief at 9-10 (discussing ALJ Decision ¶ 21). As discussed above (see n. 1), § 111.29 requires that any "debt or obligation owing to the Government for which the broker is responsible" be paid "on or before the date that payment is due." 19 C.F.R. § 111.29 (emphasis added). Specifically, Mr. Lee contends that the penalties assessed against him were not "debt[s] or obligation[s]" within the meaning of § 111.29. Plaintiff's Brief at 9-10.
Neither "debt" nor "obligation" is defined in Customs regulations. Mr. Lee therefore looks to Black's Law Dictionary to define the terms, and selects as the "most appropriate" definition:
An obligation or debt may exist by reason of a judgment as well as an express contract, in either case, there being a legal duty on the part of the one bound to comply with the promise . . . Liabilities created by contract or law (i.e. judgments).
Plaintiff's Brief at 9 (quoting Black's Law Dictionary (6th ed.1990) at 1074). Based on that definition, Mr. Lee reasons that, since he never contracted with Customs to pay either penalty, the penalties can constitute "debt[s] or obligation[s]" only if they constitute judgmentswhich they do not. Plaintiff's Brief at 9-10.[16]
As the ALJ correctly observed, this argument is simply "specious." See ALJ Decision ¶ 21. A penalty assessed against a *1366 broker is so plainly a "debt or obligation owing to the Government for which the broker is responsible" that recourse to a dictionary is unnecessary. Indeed, Mr. Lee's selective citation of definitions is affirmatively misleadingand one need look no further than the very authority on which he relies. The sixth edition of Black's Law Dictionary begins its definition of "obligation" by noting that the term is "[a] generic word, . . . having many wide, and varied meanings, according to the context in which it is used." One example of such a meaning is "[t]hat which a person is bound to do or to forbear; any duty imposed by law, promise, contract relations of society, courtesy, kindness, etc." See Black's Law Dictionary (6th ed.1990) at 1074.
In short, even if it were necessary to consult a dictionary to determine whether a penalty constitutes a "debt or obligation" (which it is not), the same dictionary that Mr. Lee cites actually supports the Government's position. A penalty assessed against a broker qualifies easily as a "duty imposed by law," and thus is a "debt or obligation" for purposes of 19 C.F.R. § 111.29.
F. Failure to Timely Pay Penalty as Basis for License Revocation
Although the argument is not articulated with precision, Mr. Lee also appears to contend that, since 19 C.F.R. § 111.94 authorizes the institution of a collection action for failure to timely pay a penalty, revoking his license for such a failure constitutes an abuse of discretion and is not in accordance with law. Plaintiff's Brief at 10.
In pertinent part, § 111.94 provides:
If the final determination is that the person is liable for a monetary penalty, the person shall pay, or make arrangements for payment, within 60 days of the date of the final determination. If the monetary penalty is not paid or arrangements made for payment within the time limitations, the Customs Service shall refer the matter to the Department of Justice for institution of appropriate judicial proceedings.
19 C.F.R. § 111.94. As Mr. Lee correctly notes, "[t]here is absolutely no language in this section [to indicate] that if a person does not pay a penalty within 60 days after a final determination that such nonpayment constitutes grounds for revocation." Plaintiff's Brief at 10. However, his observation misses the mark.
The ALJ relied upon § 111.94 only as the basis for his determination that a penalty must be paid within 60 days of its assessment. See ALJ Decision ¶ 21. The remedy of license revocation is authorized by a different provision of the regulations 19 C.F.R. § 111.53(c). Indeed, Mr. Lee concedes as much. See Plaintiff's Brief at 10 (acknowledging that revocation was "pursuant to 19 C.F.R. § 111.53(c)"). It is thus of no moment that § 111.94 does not mention license revocation. What matters is that revocation is authorized under § 111.53(c) where, as here, a broker "has violated any provision of any law enforced by Customs or the rules or regulations" issued thereunder.[17]
Apparently arguing in the alternative, Mr. Lee further contends that "since [he] did not violate sections 111.29 [requiring payment of debts or obligations to the Government `on or before the date that payment is due'] or 111.94 [requiring payment of penalties within 60 days]," it was "an abuse of discretion and not in accordance *1367 with the law for the Secretary to rely on section 111.53(c) to revoke [his] license." Plaintiff's Brief at 10.
But the premise of that argument is faulty. Contrary to Mr. Lee's assertion, as discussed above, the ALJ properly concluded that Mr. Lee violated §§ 111.29 and 111.94 by failing to timely pay assessed penalties, and the Secretary properly relied upon the ALJ's conclusion. Accordingly, under § 111.53(c), the Secretary was entitled to revoke Mr. Lee's license.
IV. Conclusion
For the foregoing reasons, the decision of the Secretary to revoke Mr. Lee's broker's license is supported by substantial evidence and is otherwise in accordance with law. Accordingly, Mr. Lee's motion is denied, and the Secretary's decision is affirmed.
Judgment will be entered accordingly.
NOTES
[1] The 60-day requirement is set forth in 19 C.F.R. § 111.94, which requires that, where Customs makes a final determination that a broker is liable for a monetary penalty, the broker "must pay the monetary penalty, or make arrangements for payment of the monetary penalty, within 60 calendar days of the date of the written decision." 19 C.F.R. § 111.94 (emphasis added).
19 C.F.R. § 111.29, in turn, requires that a broker "exercise due diligence in making financial settlements, in answering correspondence, and in preparing or assisting in the preparation and filing of records relating to any customs business matter handled by him as a broker. Payment of duty tax, or other debt or obligation owing to the Government for which the broker is responsible, . . . shall be made to the Government on or before the date that payment is due." 19 C.F.R. § 111.29 (emphasis added).
For purposes of this opinion, citations to the Code of Federal Regulations generally refer to the 1991 or 1993 edition, as appropriate, unless otherwise noted. The regulations at issue here are identical in the two editions.
Similarly, except as otherwise noted, statutory citations herein generally are to the 1994 version of the U.S.Code.
[2] 19 C.F.R. § 111.53 authorizes license revocation proceedings in any case where "(c) The broker has violated any provision of any law enforced by Customs or the rules or regulations issued under any such provision." 19 C.F.R. § 111.53 (1995) (emphasis added).
[3] Specifically, the $30,000 Pre-Penalty Notice cited Mr. Lee for failure to exercise responsible supervision and control over Customs business conducted (a violation of 19 U.S.C. § 1641(b)(4)); for violation of "any provision of any law enforced by the Customs Service or the rules or regulations issued under any such provision" (a violation of 19 U.S.C. § 1641(d)(1)(C)); for failure to maintain records in the prescribed format (a violation of 19 C.F.R. § 111.22); for failure to timely provide employee information (a violation of 19 C.F.R. § 111.28); for failure to exercise due diligence in the conduct of financial affairs and failure to notify clients of responsibilities and liabilities for Customs charges (a violation of 19 C.F.R. § 111.29(a)-(b)); for utilization of a fictitious name without the requisite approval (a violation of 19 C.F.R. § 111.30(c)); and for failure to maintain valid powers of attorney for his principals (a violation of 19 C.F.R. § 141.46). A.R. 17 at 29-30.
[4] The Government, in its discretion, dismissed the collection action in May 1997. A.R. 3.
[5] The Secretary's decisionentered on his behalf by the Acting Deputy Assistant Secretary for Regulatory, Tariff & Trade Enforcement is included as an Addendum to the certified list filed with the agency record pursuant to U.S. CIT Rule 72(a).
[6] Under 19 U.S.C. § 1641(e)(1), a decision by the Secretary to revoke a customs broker's license may be appealed by commencing an action in this Court "within 60 days after the issuance of the decision or order." 19 U.S.C. § 1641(e) (1994). See also 28 U.S.C. § 2636(g) (barring action to contest denial or revocation of broker's license unless commenced in accordance with CIT Rules within 60 days after date of entry of Secretary's decision or order). However, there are conflicting statutory provisions as to precisely how an action is commenced. See generally Defendant's Supplemental Submission at 1-5.
Under 19 U.S.C. § 1641(e)(1), an action is commenced by the filing of "a written petition," a copy of which is to be "transmitted promptly by the clerk of the court to the Secretary or his designee." In contrast, 28 U.S.C. § 2632(a) requires the concurrent filing with the Court of "a summons and complaint," which must then be served upon the Government in accordance with U.S. CIT Rule 4(i). Recognizing the statutory inconsistency, the Practice Comment to U.S. CIT Rule 3 advises that the "preferred procedure to achieve uniformity and consistency and to minimize the ambiguity . . . is to follow the provisions in Title 28."
Under 19 U.S.C. § 1641(e)(1), Mr. Lee had until January 2, 1998 60 days from November 3, 1997 to file a petition appealing the revocation of his license. On December 31, 1997, he filed a "Petition for Review" and a "Summons" with the Court. There is no docket entry to indicate whether the Clerk of the Court transmitted a copy of the petition and summons to the Secretary. On February 3, 1998, counsel for the Government wrote to counsel for Mr. Lee, acknowledging the filing of the petition and summons with the Court but noting that Mr. Lee had failed to serve the United States as required by U.S. CIT Rule 4(i). See Letter to P. Herrick from A. Lee (Feb. 3, 1998), attached to Defendant's Supplemental Submission. At some point thereafter, the office of the Clerk of the Court advised Mr. Lee's counsel of the need to file a summons and complaint and to properly serve the United States. However, Mr. Lee's petition (filed on December 31, 1997) was never rejected by the Clerk of the Court. Mr. Lee filed his summons and complaint on March 10, 1998, and served them on the United States two days later. See Defendant's Supplemental Submission.
Mr. Lee's petition and summons were timely filed under 19 U.S.C. 1641(e)(1); but the summons and complaint filed on March 10, 1998 were not. In any event, under the circumstances, the Government has not interposed a statute of limitations defense. Id. Accordingly, the Court may properly reach the merits of the case.
[7] As discussed in section III.A immediately below, Mr. Lee has also asserted a claim for damages.
[8] Indeed, since Mr. Lee elected not to file a reply brief, he made no response whatsoever to the Government's jurisdictional argument. See Memorandum in Support of Defendant's Response in Opposition to Plaintiff's Motion on the Agency Record to Set Aside the Secretary of the Treasury's Revocation of His Customs Broker's License ("Defendant's Brief") at 11-12 (setting forth Government's jurisdictional argument).
[9] Mr. Lee mistakenly claims that the Government contends that "the statute of limitations did not begin to run until January 13, 1993 when Lee paid the penalty [initially $1,000, mitigated to $250] as part of an offer in compromise." Plaintiff's Brief at 6. The Government does not assert that the statute of limitations was triggered when Mr. Lee finally (belatedly) paid the penalty. Rather, as discussed above, the Government's point is that the statute began to run when the violation at issue in the revocation proceeding occurred that is, when the payment became overdue, when the penalty was not paid within 60 days of its assessment. Defendant's Brief at 13-14.
[10] Asserting that "Mr. Lee . . . never raised this issue in the administrative proceedings held below," the Government argues that "this newly introduced argument is not properly considered" by the Court. According to the Government, "Customs, [the ALJ], and the Secretary of Treasury were deprived of the opportunity to consider such argument which in turn prevents this Court from considering Mr. Lee's position." See Defendant's Brief at 20, citing United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952).
Contrary to the Government's assertions, Mr. Lee's counsel in fact did allude to this argument in the course of the administrative hearing. For example, in his opening argument, counsel for Mr. Lee asserted that "[t]he forum that [Mr. Lee] chose to defend himself was in court, not during the administrative proceeding." A.R. 14, Administrative Hearing Transcript ("Tr.") at 10. See also Tr. at 37 (Mr. Lee's counsel queried, "Why would that be absurd if somebody wants to choose a judicial forum rather than an administrative forum to contest penalty issues?"). Similarly, Mr. Lee's post-hearing submission argued that he "chose to challenge the Customs penalty decisions by not paying the penalties." A.R. 4. However, Mr. Lee's counsel did not develop the argument in the course of the hearing, the Government did not respond to it, and Mr. Lee gave no testimony to support it.
Indeed, Mr. Lee testified that his failure to pay was for other reasons. For example, when questioned why he did not pay the $1,000 penalty, Mr. Lee replied that he didn't think he owed $1,000. Tr. at 210. When asked why he paid the mitigated penalty of $250, Mr. Lee responded that he "didn't want to go through all the hassles . . . That's the reason why I paid. It's not because I felt I had to pay." Id. at 211. When asked why he did not pay the $30,000 penalty, Mr. Lee answered, "First of all, I don't think I owe $30,000. And secondly, I have no [financial] capabilities." Id. at 220. In short, nothing in Mr. Lee's testimony suggested that he intentionally failed to pay the penalties to preserve his right to judicial review.
Nor did Mr. Lee make such an argument to Customs at any time prior to the administrative hearing. However, there is no indication in the record of the hearing that the Government objected to the argument on that basis. And Defendant's Brief here does not specifically address whether Mr. Lee was free to raise the argument for the first time at the hearing, andif notwhat the consequences are, particularly where the Government did not object at the time.
In any event, it is not necessary to definitively resolve whether or not Mr. Lee's argument is properly before the Court, because for all the reasons discussed hereinthat argument has no merit.
[11] The Pentax cases concerned an importer's liability for duties and penalties for the importation of photographic and optical merchandise which was produced in China but marked "Hong Kong," in violation of the "country of origin marking" requirements of U.S. customs law. See generally 19 U.S.C. § 1304(a) (1988). To minimize its liability for penalties, Pentax made a "prior disclosure" to Customs, reporting its misstatements concerning the merchandise's country of origin. To secure "prior disclosure" treatment, an importer must: (1) voluntarily disclose its violation "before, or without knowledge of, the commencement of a formal investigation of such violation," and (2) pay Customs the "actual loss of duties" suffered as a result of the violation. See 19 U.S.C. § 1592(c)(4); 19 C.F.R. §§ 162.74(a)(1), 162.74(h). The phrase "actual loss of duties" is defined as "the duties of which the government has been deprived by reason of the violation." 19 C.F.R. § 162.71(a)(1).
Pentax interpreted "actual loss of duties" under these circumstances as meaning the difference between (1) the true duty liability based upon the true country of origin and (2) the duty liability based upon the state country of origin. Since the duty liability for the merchandise at issue was precisely the same whether it was imported from China or Hong Kong, Pentax contended that it was not obligated to advance any additional funds to secure prior disclosure treatment. Customs maintained that "actual loss of duties" included "marking duties," which are imposed for failure to properly mark merchandise with its country of origin. See 19 U.S.C. § 1304(f); 19 C.F.R. § 134.2. But Pentax reasoned that unpaid marking duties did not constitute an "actual loss of duties," because a marking duty is a special ad valorem duty that is not "lost," but rather arises as a result of a country of origin mis-marking.
Pentax sought pre-enforcement review of Customs' position in federal district court. See Pentax Corp. v. Myhra, 844 F.Supp. 611 (D.Mont.1994), aff'd, 72 F.3d 708 (9th Cir. 1995). The district court dismissed the case, finding that Congress intended to preclude interlocutory judicial review of such an interim agency decision. However, the district court granted Pentax's motion for a preliminary injunction pending review on appeal, on the condition that Pentax deposit funds in the court's registry sufficient to cover the marking duties until the "actual loss of duties" issue was resolved. Pentax deposited the funds, and filed an appeal in the Ninth Circuit Court of Appeals. Id. The Ninth Circuit affirmed the district court's dismissal of the suit, holding that the district court lacked subject matter jurisdiction and that "if judicial review is available at all, [it] is available only in the Court of International Trade." Pentax, 72 F.3d at 710-11.
Pentax's case was then transferred to the Court of International Trade, along with the funds Pentax had deposited in the registry of the district court. Following Customs' issuance of pre-penalty and penalty notices (which Pentax declined to answer), the Government initiated an enforcement action in the Court of International Trade, seeking to recover duties and penalties. After consolidating that action with Pentax's suit, the Court of International Trade upheld Customs' determination that the "actual loss of duties" included marking duties. Pentax v. Robison, 20 CIT 486, 924 F.Supp. 193 (1996), rev'd, 125 F.3d 1457 (Fed.Cir.1997). The Court of Appeals for the Federal Circuit reversed, holding that the act of mismarking the goods had not deprived the government of marking duties. Thus, payment of mismarking duties was not required for prior disclosure treatment. Pentax, 125 F.3d at 1462-63.
[12] Citing Jose G. Flores, Inc. v. United States, 11 CIT 948, 676 F.Supp. 1232 (1987), Mr. Lee argues that, had he paid the assessed penalties and then filed for a refund, "this court [the Court of International Trade] would lack jurisdiction to make such a refund." Plaintiff's Brief at 7. However, even assuming that this Court would lack jurisdiction over a broker-initiated suit to recover a penalty imposed on that broker, nothing in Flores speaks to the jurisdiction of other federal courts such as the district courts and the Court of Federal Claims.
[13] See Defendant's Brief at 21 n. 9 (discussing potential availability of Trayco-type proceeding, to secure judicial review of penalty imposed on broker). In Trayco, an importer filed suit in district court seeking a refund of a mitigated penalty paid under protest to Customs. The Court of Appeals for the Federal Circuit affirmed the district court's decision, which rejected the government's argument that the Court of International Trade had exclusive jurisdiction over such matters, and found that there was no legal basis for the penalty. Trayco, 994 F.2d 832 (Fed.Cir. 1993).
[14] United States v. Ricci, 21 CIT 1145, 985 F.Supp. 125 (1997)on which Mr. Lee so heavily relies (see Plaintiff's Brief at 1-6, 9, 11)is illustrative. In Ricci, a broker failed to pay a $30,000 penalty, which Customs sought to recover in a collection action in the Court of International Trade. As Mr. Lee emphasizes (see Plaintiff's Brief at 1-4), Customs did not there seek to revoke the broker's license. But, in that case, the broker had responded to Customs' notices. See Ricci, 21 CIT at 1145, 985 F.Supp. at 126 (noting that broker had responded to Customs' prepenalty notice and had continued communication with agency). The action of the broker in Ricci thus stands in stark contrast to Mr. Lee's inaction here, and rendered that broker eligible for more favorable treatment under the Customs Directive.
[15] See, e.g., section III.B, supra (addressing defects in Mr. Lee's statute of limitations argument, which similarly fails to differentiate between grounds for imposition of underlying penalties and distinct (albeit related) grounds for revocation of license).
[16] Mr. Lee cites two cases in support of his claim that "a civil penalty does not become final, due and owing until such time `that all available defenses may be presented to a competent tribunal.'" Plaintiff's Brief at 9 (citing Nickey v. Mississippi, 292 U.S. 393, 395, 54 S.Ct. 743, 78 L.Ed. 1323 (1934) and United States v. KAB Trade Co., 21 CIT 297 (1997)). However, he fails to discuss either case, and both appear to be completely inapposite. See generally Defendant's Brief at 18-20. Mr. Lee's continued reliance on Ricci is equally unavailing. See Plaintiff's Memo at 9 (citing United States v. Ricci, 21 CIT 1145, 985 F.Supp. 125 (1997)). Nothing in Ricci addressed the definition of "debt" or "obligation," and the case has no relevance here. See Defendant's Memo at 18 n. 6.
[17] As noted in section II above, "[w]hen the penalty chosen by an agency is within the range of sanctions provided by applicable disciplinary regulations, the severity of the sanction imposed is within the discretion of the agency." Barnhart v. U.S. Treasury Dep't, 9 CIT at 287, 291, 613 F.Supp. 370, 374 (1985) (quoting Tempo Trucking and Transfer Corp. v. Dickson, 405 F.Supp. 506, 514 (E.D.N.Y. 1975)) (citation omitted). Thus, the Court is not free to second-guess the agency's choice of sanctions. | 01-03-2023 | 02-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/327653/ | 516 F.2d 261
89 L.R.R.M. (BNA) 2257, 76 Lab.Cas. P 10,855
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.BASIC WIRE PRODUCTS, INC., Respondent.
No. 74-1922.
United States Court of Appeals,Sixth Circuit.
May 7, 1975.
Elliott Moore, William F. Wachter, Deputy Associate Gen. Counsel, N. L. R. B., Joseph C. Thackery, Peter Carre, Washington, D. C., Emil C. Farkas, Director, Region 9, N. L. R. B., Cincinnati, Ohio, for petitioner.
Robert K. Drummond, Foley & Lardner, Gary J. Okey, Milwaukee, Wis., for respondent.
Before CELEBREZZE, MILLER and ENGEL, Circuit Judges.
CELEBREZZE, Circuit Judge.
1
The National Labor Relations Board petitions for enforcement of its order that Respondent bargain with the United Paperworkers International Union. Respondent seeks to deny enforcement on the grounds that the Union committed unfair labor practices during the representation election and that section 10(b) of the National Labor Relations Act and principles of res judicata require dismissal of the Union's underlying charge.
2
On July 28, 1972, by a vote of 31 to 20 (out of 52 eligible voters), the International Brotherhood of Pulp, Sulphite and Paper Mill Workers (Sulphite Workers) won a consent election among certain of Respondent's employees. Respondent promptly objected to the Union's certification, asserting that a Union agent had given cash to an eligible voter near the polling place on election day, that Union supporters had promised immediate financial gain to the employees if the Union won, and that an eligible voter had been threatened by Union adherents two weeks before the election. After an administrative investigation, during which Respondent submitted a single affidavit and some correspondence with counsel, the Board's Regional Director recommended that the Sulphite Workers be certified as the employees' bargaining representative. Submitting no additional evidence, Respondent requested a full hearing on its charges or the election's invalidation. On January 18, 1973, the Board affirmed the Regional Director's Report and certified the Sulphite Workers.
3
On February 22, 1973, the Sulphite Workers filed a charge alleging a section 8(a)(5) and (1) violation, based on Respondent's refusal to bargain upon request. The Regional Director issued a complaint on March 13, and Respondent filed an answer asserting its objections to the Union's conduct during the election. On July 26 the Regional Director permitted the charge to be withdrawn, at the Union's request.
4
Although the record is unclear as to why the Union sought to have the charge withdrawn, it may have been prompted by the Union's July 24 petition to amend its certification to substitute the United Paperworkers International Union (Paperworkers) for the Sulphite Workers, since the Sulphite Workers had recently merged into the Paperworkers. On August 23, the Acting Regional Director granted the amendment of certification, and on September 12 his action was affirmed by the Board.
5
The Union promptly requested that Respondent bargain but was refused on September 27. On October 25, the Union filed the section 8(a)(5) and (1) charge which underlies the Board's order. Respondent answered by reiterating its election objections and asserting procedural reasons for dismissal of the charge. On April 29, 1974, the Board granted the General Counsel's summary judgment motion and issued its Decision and Order, which requires Respondent to bargain with the Union and to post appropriate notices.
6
Respondent refuses to bargain with the Union because it views the certification as defective. If the amended certification is proper, it follows that Respondent violated section 8(a)(5) and (1) of the National Labor Relations Act.1 NLRB v. Wackenhut Corp., 471 F.2d 761, 762 (6th Cir. 1972).
7
Respondent's objections to the certification center on alleged improper activities by Union supporters and agents preceding the representation election. Respondent argues that its objections to the certification show that the "laboratory conditions"2 required during representation elections did not exist or at least that a hearing is required on this allegation.
8
In reviewing the Board's decision, we exercise a limited scope of review. Our task is to ascertain whether the Board acted in abuse of the "wide degree of discretion" which Congress has given the Board to resolve disputes over employee representation. NLRB v. A. J. Tower Co., 329 U.S. 324, 330, 67 S.Ct. 324, 91 L.Ed. 322 (1946); NLRB v. Kilgore Corp., 510 F.2d 1165, 1167 (6th Cir. 1975). Respondent "must shoulder a heavy burden of proof to demonstrate by specific evidence that the election was unfair." Harlan # 4 Coal Co. v. NLRB, 490 F.2d 117, 120 (6th Cir.), cert. denied, 416 U.S. 986, 94 S.Ct. 2390, 40 L.Ed.2d 763 (1974). Furthermore, the Board's failure to hold an evidentiary hearing on Respondent's exceptions to the Regional Director's Report does not nullify the Board's order unless the exceptions were "detailed, specific, and factual" and raised "substantial and material factual issues" which, if proven by Respondent, would invalidate the Union's certification. 29 C.F.R. § 102.69(c); NLRB v. Medical Ancillary Services, Inc., 478 F.2d 96, 99 (6th Cir. 1973); NLRB v. Tennessee Packers, Inc., 379 F.2d 172 (6th Cir.), cert. denied, 389 U.S. 958, 88 S.Ct. 338, 19 L.Ed.2d 364 (1967).
9
Respondent's objections to the Union's pre-election conduct involve three separate allegations.
10
The first is that Union adherents "created the impression of immediate financial gain by virtue of voting in favor of the Union," thus inhibiting the employees' free choice in deciding whether to choose union representation. The only evidence proffered by Respondent was an affidavit of its Vice President to the effect that "union people" told several employees "that it would pay to support the Union." No specific misconduct is cited beyond this general assertion.
11
We agree with the Board's finding that this general allegation, even if proven,
12
indicates that (the Union) engaged in nothing more than normal pre-election campaign promises of the type that employees may, on their own, evaluate, and accept or reject, as election propaganda.3
13
If the alleged statements meant anything more than that the Union would work to increase the employees' salaries, Respondent was obligated to offer evidence to that effect. In the absence of a proffer of such evidence, the Board properly refused to invalidate the election or to hold a hearing on the allegations. As we said in NLRB v. Shawnee Plastics, Inc., 492 F.2d 869, 871 (6th Cir. 1974),
14
(Respondent's) statements are ambiguous based on hearsay and self serving declarations. They do not, in our judgment, allege facts which if proven would be cause for setting aside the election.
15
See also NLRB v. Custom Craft Mfg. Co., 493 F.2d 500 (6th Cir. 1974); NLRB v. Sauk Valley Mfg. Co., 486 F.2d 1127, 1131 (9th Cir. 1973).
16
Respondent's second objection is that the Union's cash payment to an election observer inhibited its employees' free choice. Specifically, Respondent's Vice President alleged by affidavit that he observed a Union agent (Riley) "put money into (the) pocket" of an employee (Long), who served as the Union's election observer. The affidavit asserted that the employee received normal compensation from Respondent (including overtime) for his work on election day, so that the Union's payment did not compensate him for wages lost during the election.
17
We have previously embraced the Fourth Circuit's holding in Collins & Aikman Corp. v. NLRB, 383 F.2d 722, 729 (4th Cir. 1967), that "unreasonable or excessive economic inducements" to employees from Union officials are impermissible during an election campaign. Plastic Masters, Inc. v. NLRB, 512 F.2d 449 (6th Cir. 1975). In Plastic Masters, we denied enforcement to a Board order where the Union had made substantial overpayments to a respected and influential employee and several other employees ostensibly to cover expenses for attending numerous pre-election hearings and in other ways assisting the Union's organizing effort. The Union won the election by a vote of 51 to 46. The only Board representative who had heard evidence recommended setting aside the election but was overruled by the Regional Director and the Board. We held that the numerous overpayments, made before the election and known to other employees, "undoubtedly had a tendency to influence the election results," quoting Collins & Aikman Corp., 383 F.2d at 729.
18
This case presents a far different factual situation. As the Regional Director stated after conducting an administrative investigation into Respondent's allegations,
19
Riley admits that he paid Long $20.00 after the polls closed. He reports that he paid the money to Long to reimburse him for expenses incurred in attending pre-election day conferences with Riley at Chillicothe, Ohio, some 12 miles away from Long's home in Bourneville, Ohio, and 50 minutes away from his place of employment. Riley submitted a receipt signed by Long showing receipt from Riley of $20.00 as reimbursement for expenses and lost time incurred as the result of serving as an election observer. Riley states that he purposely did not pay Long until after the results of the election were known and they had left the vicinity of the polling area in order to avoid giving the wrong impression to other persons.
20
The mere fact, there being nothing more, that a union's election observer is paid after the polling period had closed and after the results of the election were known, for time spent in connection with election duties and/or for pre-election time and travel expenses, does not constitute conduct sufficient to warrant setting aside the election.
21
In the absence of evidence rebutting this account, Respondent was not entitled to an evidentiary hearing on this matter. Unlike in Plastic Masters, the payment here was not made until after the election, which the Union won by a sizeable margin (31 to 20). The mere "fact that he was paid in itself does not constitute ground for setting aside an election." Collins & Aikman Corp., 383 F.2d at 729. The evil which arises from excessive Union payments to employees during an election campaign is that they tend to influence votes without relation to the merits of the election. Here the $20 payment appears to be in the nature of reasonable reimbursement for expenses. Respondent has asserted no evidence supporting the conclusion that the 31-to-20 vote was swayed by the post-election payment to Long.
22
Respondent's general allegation that there was an excessive Union payment to one employee which influenced the election's outcome was simply not supported by an offer of proof. "The Board is entitled to rely on the report of the Regional Director in the absence of specific assertions of error, substantiated by offers of proof." NLRB v. Tennessee Packers, Inc., 379 F.2d 172, 178 (6th Cir.), cert. denied, 389 U.S. 958, 88 S.Ct. 338, 19 L.Ed.2d 364 (1967).
23
Respondent's third objection to the Union's certification is based on alleged "threats and coercion" which purportedly inhibited the employees' free choice. Respondent's allegation is that an eligible voter told its Vice President that two weeks before the election she was told she was "gonna be sorry" and would "regret it" if she did not vote for the Union, statements she perceived as threats.
24
The Regional Director declined to hold a hearing on this charge after an administrative investigation revealed that the voter in question wished to withhold her identity and that Respondent would not involve her in the proceedings. Furthermore, the Regional Director reported,
25
Although requested to do so repeatedly, the Employer failed to report specifically in regard to its claim that the Petitioner made "material misrepresentations" during the campaign. Moreover, in its final reply to requests for such specificity, the Employer took the position that in view of the timing of such alleged conduct it had concluded that standards set forth by the Board would preclude the setting aside of an election and, accordingly, the matter need not be pursued further.
26
Respondent's claim is thus a conclusory assertion that the election was affected by improper Union coercion. The picture painted by Respondent in no way approaches the "environment of tension of coercion . . . so related to the election as to have had a probable effect upon the employees' actions at the polls," which led to the invalidation of an election in NLRB v. Zelrich Co., 344 F.2d 1011, 1015 (5th Cir. 1965). See also Harlan # 4 Coal Co. v. NLRB, 490 F.2d 117, 121 (6th Cir.), cert. denied, 416 U.S. 986, 94 S.Ct. 2390, 40 L.Ed.2d 763 (1974) (granting enforcement); Home Town Foods, Inc. v. NLRB, 416 F.2d 392 (5th Cir. 1969) (denying enforcement).
27
Finally, Respondent argues that the cumulative effect of the alleged pre-election improprieties was sufficient to require a hearing on the election's overall fairness. Both individually and collectively, Respondent's assertions amount to a generalized claim that the election was unfair. Because Respondent failed to produce substantive evidence to support its overall claim, no hearing was required. Were we to mandate hearings every time a losing party cries "foul," we would frustrate the policy of the Act that calls for prompt certification of a properly victorious bargaining representative.4 "As to any conduct objected to as interference, the critical Board determination is whether the employees were permitted to register a free choice." Home Town Foods, Inc. v. NLRB, 416 F.2d 392, 396 (5th Cir. 1969). We hold that the Board did not abuse its discretion in making that determination. Accordingly, Respondent violated section 8(a)(5) and (1) when it refused to bargain with the Union.
28
This would end our consideration were it not for Respondent's claim that section 10(b) of the Act and principles of res judicata bar the Union's charge which underlies the Board's order.
29
The res judicata argument is based on the fact that a Union charge filed on February 22, 1973 was withdrawn at its request on July 26.5 It is the Union's second charge of refusal to bargain, filed on October 25, 1973, which is the basis of the Board's order. Respondent argues that the dismissal of the first charge absolutely bars Board consideration of a second charge based on identical underlying facts. Respondent cites no precedent for such a proposition.6
30
We agree with the Board that the principles of res judicata do not bar Board adjudication of a refusal to bargain charge where a prior similar charge has been filed but withdrawn at the Union's request. The first charge's dismissal was in no sense an adjudication, and it was not ordered with prejudice. The dismissal was at most "an administrative determination not to take action." NLRB v. Baltimore Transit Co., 140 F.2d 51, 54-55 (4th Cir.), cert. denied, 321 U.S. 795, 64 S.Ct. 848, 88 L.Ed. 1084 (1944). The Regional Director's dismissal of the Union's February 22 charge was not a "final and binding adjudication," which is required to trigger the operation of res judicata. NLRB v. Falls Dodge, Inc., 431 F.2d 33, 35 (6th Cir. 1970); Maxwell Co. v. NLRB, 414 F.2d 477, 479 (6th Cir. 1969).
31
Respondent also relies on section 10(b) of the Act,7 which states in part,
32
(N)o complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board . . ..
33
Since the unfair labor practice asserted was Respondent's refusal to bargain as expressed in a letter of February 9, 1973, Respondent contends, more than six months elapsed between then and October 25, 1973, when the Union filed the charge on which the Board's order is based. Accordingly, section 10(b)'s six-month statute of limitations bars Board action, Respondent maintains.
34
The Board, on the other hand, argues that the unfair labor practice asserted in the Union's October 25 complaint was Respondent's September 27 refusal to bargain in response to the Union's September 19 demand. Since Respondent was under a continuing obligation to bargain "for a 'reasonable' period, ordinarily 'one year' " from the date of the Union's certification (January 18), Brooks v. NLRB, 348 U.S. 96, 98, 75 S.Ct. 176, 178, 99 L.Ed. 125 (1954), Respondent was obliged to honor the Union's bargaining demand of September 19. Its September 27 refusal constituted an independent unfair labor practice to bring the October 25 charge within the six-month rule of section 10(b).8
35
The analysis of whether section 10(b) bars reliance on the Union's October 25 unfair labor charge must "focus on the purpose of Section 10(b) and on the needs of the defense." NLRB v. McCready and Sons, Inc., 482 F.2d 872, 875 (6th Cir. 1973). As we stated in McCready, section 10(b) was intended to "give alleged violators opportunity to prepare defenses and to protect them against stale claims," 482 F.2d at 875, quoting from NLRB v. Waterfront Employers, 211 F.2d 946, 955 (9th Cir. 1954). Thus, in McCready we held a claim barred by section 10(b) where its validity depended on whether the company had legitimate reasons for refusing to execute a labor contract more than six months before a charge was brought attacking the refusal. In that circumstance, the "continuing obligation" doctrine did not apply, since allowing revival of a charge on each successive request that the company sign the contract "would clearly jeopardize the employer's opportunity to prepare defenses and would risk subjecting him to a stale claim." 482 F.2d at 875.
36
This reasoning explains the distinction in treatment between charges based on an employer's discriminatory refusal to hire, where the continuing obligation doctrine applies, and an employer's refusal to rehire a discriminatorily discharged employee, where it does not apply. See McCready, 482 F.2d at 874-75; NLRB v. Pennwoven, 194 F.2d 521 (3d Cir. 1952). In the refusal to rehire situation, the basis of the complaint is the company's motive in firing the employee, not the company's continuing obligation to hire without discrimination.
37
Unlike the situation in McCready, where we were without precedent on the interrelationship between section 10(b) and a charge of refusal to execute a contract, we have guidance on the applicability of the "continuing obligation" doctrine in the refusal to bargain context. In Brooks v. NLRB, 348 U.S. 96, 75 S.Ct. 176, 99 L.Ed. 125 (1954), the Supreme Court expressly approved the Board's rule that "certification, if based on a Board-conducted election, must be honored for a 'reasonable' period, ordinarily 'one year,' in the absence of 'unusual circumstances.' " 348 U.S. at 98, 75 S.Ct. at 178. Thus, Respondent was under a continuing obligation to bargain with the Union for at least a year from the date of certification, January 18, 1973. One refusal during that time did not excuse a second refusal. The Union was, of course, required under section 10(b) to bring an unfair labor practice charge within six months of the refusal in question. It did so here, by filing a charge on October 25 in response to Respondent's September 27 refusal to bargain.
38
Respondent argues that Machinists Local 1424 v. NLRB, 362 U.S. 411, 80 S.Ct. 822, 4 L.Ed.2d 832 (1960), rejected the Board's "continuing violation" theory. A proper reading of Machinists indicates the contrary. There the Supreme Court distinguished between two situations:
39
The first is one where occurrences within the six-month limitations period in and of themselves may constitute, as a substantive matter, unfair labor practices. There, earlier events may be utilized to shed light on the true character of matters occurring within the limitations period; and for that purpose § 10(b) ordinarily does not bar such evidentiary use of anterior events (footnote omitted). The second situation is that where conduct occurring within the limitations period can be charged to be an unfair labor practice only through reliance on an earlier unfair labor practice. There the use of the earlier unfair labor practice is not merely "evidentiary," since it does not simply lay bare a putative current unfair labor practice. Rather, it serves to cloak with illegality that which was otherwise lawful. And where a complaint based upon that earlier event is time-barred, to permit the event itself to be so used in effect results in reviving a legally defunct unfair labor practice. 362 U.S. at 416-17, 80 S.Ct. at 826.
40
In Machinists the situation fell within the second category, "for the entire foundation of the unfair labor practice charged was the Union's time-barred lack of majority status when the original collective bargaining agreement was signed." 362 U.S. at 417, 80 S.Ct. at 827. Because the Board had waited more than six months to challenge the execution of the collective bargaining agreement between the company and the minority union, section 10(b) barred Board action.
41
The situation here is not within the second category. The Union's certification was not, of course, an unfair labor practice which "serves to cloak with illegality" Respondent's "otherwise lawful" refusal to bargain. Rather, the first category applies. The October 25 charge simply utilized "earlier events" (the certification) "to shed light on the true character of matters occurring within the limitations period" (the September 27 refusal to bargain). Respondent's first refusal to bargain is completely irrelevant to the validity of the Union's second charge. That charge rests entirely upon Respondent's September 27 refusal to bargain. This refusal was an unfair labor practice if, as we have held above, the Union's certification was valid. Accordingly, the Board's order was not barred by section 10(b).
42
Enforcement of the Order of the Board is granted.
1
29 U.S.C. § 158(a)(5) and (1) (1966)
2
See General Shoe Corp., 77 NLRB 124, 127 (1948); Home Town Foods v. NLRB, 416 F.2d 392 (5th Cir. 1969)
3
Report on Election, Objections to Election, and Recommendations to the Board, Regional Director for Region 9 (Sept. 21, 1972), aff'd by NLRB (Jan. 18, 1973)
4
See generally Funke, Board Regulation of Pre-Election Conduct, 36 Tex.L.Rev. 893 (1958)
5
The July 26, 1973 Order of the Acting Regional Director stated:
The Charging Party herein, having filed a request to withdraw the charge in the above-captioned case on July 24, 1973, and the undersigned having duly considered the matter,
IT IS HEREBY ORDERED that the request to withdraw the charge be, and it hereby is, approved, and
IT IS FURTHER ORDERED that the Notice of Hearing heretofore issued herein be, and it hereby is, withdrawn, that the Complaint heretofore issued herein be, and it hereby is, dismissed and that this case be, and it hereby is, closed.
6
Respondent cites two cases which rely on section 10(b) of the Act as a bar to a second charge, but neither case mentions the doctrine of res judicata. NLRB v. Silver Bakery, Inc., 351 F.2d 37 (1st Cir. 1965); NLRB v. Electric Furnace Co., 327 F.2d 373 (6th Cir. 1964)
7
29 U.S.C. § 160(b) (1966)
8
The Board cites particular circumstances of this case which explain the reason for the January to October gap between certification and the charge which underlies the Board's order. The first (February) charge was filed before the Sulphite Workers merged into the Paperworkers. It was withdrawn "to avoid the anomaly of alleging that the Company had unlawfully refused to bargain with a union not named in the certification," the Board argues. Within five days of the certification's amendment to reflect the name change, the Union requested that Respondent bargain. After refusal, the second charge was promptly filed
In these circumstances, contends the Board, the fact that Respondent refused to bargain in February should not bar action based on the September refusal.
In view of our holding, we need not consider whether the proceeding to amend the certification tolled the running of section 10(b)'s six-month period or whether for other reasons section 10(b) does not bar enforcement of the Board's order. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2269612/ | 887 F.Supp. 947 (1995)
Martha LEIJA and Jerry Leija, as Next Friends of Rosemarie Leija, a Minor,
v.
The CANUTILLO INDEPENDENT SCHOOL DISTRICT.
No. EP-93-CA-478-F.
United States District Court, W.D. Texas, El Paso Division.
June 9, 1995.
*948 Mark Berry, Christie, Berry & Dunbar, Thomas E. Stanton, El Paso, TX, for plaintiff.
Henry C. Hosford, Baskind, Samaniego & Hosford, El Paso, TX, for defendant.
MEMORANDUM OPINION AND ORDER
FURGESON, District Judge.
Introduction
Rosemarie Leija brought this case under Title IX of the Education Amendments of 1972, 20 U.S.C. งง 1681-88. She claimed that, while she was a second grade student in the Canutillo Independent School District, her physical education teacher Tony Perales sexually abused her. At the end of the testimony, this court determined as a matter of law that Miss Leija proved the abuse occurred. The jury was then asked agency questions to determine whether the acts of Coach Perales were to be imputed to the School District, because only an educational institution can be liable under Title IX for acts of intentional discrimination based on sex. In light of the court's view of Title IX, which has evolved since the trial ended three months ago, the court believes that the agency questions were unnecessary. Instead, in cases such as this one, the court believes that the actions of a teacher should be strictly imputed to an educational institution. Concurrently, the court believes that limitations should be placed on damages.
Although other courts have declined to interpret Title IX as a strict liability statute, see Howard v. Board of Educ. of Sycamore Community Unit School Dist., 876 F.Supp. 959, 974 (N.D.Ill.1995), this court was finally convinced of the correctness of its approach after reflecting on the jury's verdict awarding damages of $1,400,000 on the basis of the standard definitions of mental anguish, pain and suffering. The damages were excessive and unjustified, but not because the jury was inflamed or beset by passion. On the contrary, the jury was conscientious and deliberate. The problem it faced was that it had no clear guidance from the court about how to measure damages, which is certainly needed in cases where little girls are sexually abused by their teachers. With proper instructions, which admittedly go beyond the present general ones, the court firmly believes that juries will do their duty and will render verdicts within proper limits in this category of cases under Title IX. This opinion will suggest those limits, with the ultimate hope that a remedy legislated by the Congress will not be lost because damages cannot be given some rational parameters.
Litigation under Title IX has been a continuing challenge for federal courts, to some extent because of the elegant brevity of the statute. For example, a private cause of action with a damage remedy is not stated in the statute but instead has been implied to exist through court interpretation. See Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60, 112 S.Ct. 1028, 117 L.Ed.2d 208 (1992); Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). Since the text of and legislative intent behind Title IX are silent on both the issues of private rights and available remedies, it is "hardly surprising" that the usual sources for guidance on these questions "yield no explicit answer." Franklin, 503 U.S. at 76, 112 S.Ct. at 1038 (Scalia, J., concurring). Courts have thus been required to fill the gaps, and the results have not necessarily been uniform. See, e.g., Chance v. Rice Univ., 984 F.2d 151 (5th Cir.1993); Lipsett v. University of Puerto Rico, 864 *949 F.2d 881 (1st Cir.1988); Mabry v. State Bd. of Community Colleges & Occupational Educ., 813 F.2d 311 (10th Cir.), cert. denied, 484 U.S. 849, 108 S.Ct. 148, 98 L.Ed.2d 104 (1987); Floyd v. Waiters, 831 F.Supp. 867 (M.D.Ga.1993); Patricia H. v. Berkeley Unified Sch. Dist., 830 F.Supp. 1288 (N.D.Cal. 1993). In keeping with the trend, this opinion takes yet another view of Title IX, especially by suggesting an analytical framework which divides Title IX cases into categories.
Facts
While in the second grade at Canutillo Elementary School in Canutillo, Texas, throughout the 1989-1990 school year, Rosemarie Leija was taught health and physical education by Tony Perales. During that year, Coach Perales sexually molested her while she was in his classroom. For the most part, the abuse occurred while he was showing movies to Miss Leija's class in a darkened classroom. Coach Perales would instruct her to come to the back of the room and sit on his lap. He would then place his hands beneath her undergarments and rub her chest, her buttocks, and between her legs. There was no testimony suggesting penetration. At the minimum, this happened eight times; at the maximum, twenty times. Testimony also indicated that Miss Leija was not the only target of the coach's attentions. He molested her classmate Lizette Soto as well.
Eventually, the two girls reported this matter to their primary teacher, Pam Mendoza, who discounted the girls' story and took no action of any kind to address the matter. She did not, for example, tell any other teacher or administrator about the matter. After the abuse continued, Miss Leija reported the matter to her parents in March 1990, and they then talked to Ms. Mendoza, who advised against stirring up trouble and convinced the parents that nothing was happening anyway. Miss Leija left the school in the third grade and encountered no further problems from Coach Perales.
Later, in the next school year, Coach Perales continued to abuse young girls in his class, to an even greater degree. The parents of the girls initiated complaints to teachers and administrators, who adopted Ms. Mendoza's approach to the problem. Finally, around Christmas of 1990, when a complaint was filed with law enforcement officers against Coach Perales, the District's superintendent was notified and he relieved Coach Perales of his duties. Miss Leija eventually sued the Canutillo Independent School District and Coach Perales, under both Title IX and 18 U.S.C. ง 1983. The court entered summary judgment for the defendant School District under section 1983, a default judgment against Coach Perales under section 1983, and a judgment of dismissal in favor of Coach Perales under Title IX because only educational institutions can be sued under the statute. As to suits against institutions only, see Doe v. Petaluma City Sch. Dist., 830 F.Supp. 1560, 1576-77 (N.D.Cal.1993). The School District went to trial before a jury under Title IX.
The Trial
During trial, the court excluded from presentation to the jury evidence of Coach Perales' abuse against other girls, based in part on its prejudicial impact under Rule 403 of the Federal Rules of Evidence. The jury, however, heard the testimony of Coach Perales and Ms. Mendoza, which consisted mostly of their invocation of the Fifth Amendment. It also heard testimony from Miss Leija, her parents, some school personnel and psychological experts for both sides. Since the court found that Miss Leija proved the existence of sexual abuse as a matter of law, it instructed the jury that she had been the subject of intentional discrimination. The jury was then asked questions on agency to determine if the School District itself could be held liable under Title IX.
After quickly resolving the agency issues in favor of the plaintiff, the jury took over a day to consider damages. Early on, the jury sent a question to the court about damages, based on the fact that, in final argument, plaintiff's counsel had requested relief for $7,000,000. The court's response, although traditional in wording, was clearly less than helpful. The question was:
*950 Judge, we feel a compensation should be awarded, but we feel that $7 million is too much. Some help in determining an amount would be helpful.
The answer was:
You must determine the amount of damages you, the jury, believe is appropriate based on the instructions and the evidence. You are not bound in any way by the arguments of the lawyers as to what they might believe to be appropriate.
The referenced instructions to the jury were the traditional instructions given in federal cases where damages are properly sought for mental anguish.
After agonizing deliberation, the jury found that Miss Leija's past damages were $900,000 and future damages were $500,000. The jury did its best. It needed better instructions; it deserved better instructions. The court firmly believes, with better instructions, the jury would have reached a proper verdict. The next jury to hear the damage proof in this case will receive better instructions.
Title IX and Strict Liability
Plaintiff argued from the beginning of this case that the court should apply the principles of Title VII of the Civil Rights Act of 1964, 42 U.S.C. งง 2000e-2000e-17, to Title IX analysis. In particular, plaintiff sought to incorporate the agency rules of Title VII into Title IX to impute the acts of Coach Perales to the School District. Although there is some support outside the Fifth Circuit for the application of Title VII principles to Title IX, Lipsett v. University of Puerto Rico, 864 F.2d 881 (1st Cir.1988), the Fifth Circuit has held in clear language that Title IX is to be analyzed under Title VI of the Civil Rights Act of 1964, 42 U.S.C. งง 2000d-2000d-7, not under Title VII. Chance v. Rice Univ., 984 F.2d 151 (5th Cir.1993).
The Fifth Circuit decision in Chance does not, however, address the issue of imputed liability under Title IX. In the instant case, it must be addressed, because the plaintiff must establish some form of imputed liability or else lose her suit. The court has already granted summary judgment on Miss Leija's section 1983 claim because the School District's board had no knowledge of the abuse she suffered and therefore could not have been deliberately indifferent to her rights. The question thus becomes whether the intentional discrimination of Coach Perales against Miss Leija, unknown by the school board or administrators of the Canutillo Independent School District, can still be imputed to the District under Title IX.
As briefly stated earlier, the reason the case essentially boils down to the issue of imputed liability is that, at trial, discriminatory intent was shown. Not one witness refuted that the physical sexual abuse of the plaintiff occurred. Miss Leija testified to it. Her classmate testified to it. The School District was unable to rebut it. Coach Perales, the perpetrator, and Ms. Mendoza, plaintiff's teacher, invoked the Fifth Amendment when asked about the abuse. Although Coach Perales had been sued under Title IX, he was dismissed and therefore not a party at trial. The court allowed the jury to receive testimony from Coach Perales and Ms. Mendoza that included their invocation of the Fifth Amendment. To control to a reasonable extent the possible prejudice that can and does arise in such a context, the court required counsel for plaintiff to submit the questions calculated to draw a Fifth Amendment response before either of the witnesses took the stand. Counsel cooperated fully and the court screened the questions. The jury was then told that it could draw a negative inference from the invocation of the Fifth Amendment. See F.D.I.C. v. Fidelity & Deposit Co. of Md., 45 F.3d 969 (5th Cir.1995).
Based on these facts, the court took the matter from the jury's consideration and found that there was intentional discrimination in this case. "[W]hen a teacher sexually harasses and abuses a student," that teacher discriminates on the basis of sex. Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60, 75, 112 S.Ct. 1028, 1037, 117 L.Ed.2d 208 (1992). Therefore, the only question left for resolution was whether the teacher's intentional discrimination against Rosemarie Leija could be imputed to the Canutillo Independent School District.
*951 The proper resolution of this issue has not been self-evident or necessarily obvious. Indeed, the issue of imputed liability is one that plagues courts in all of the broad mass of litigation that fits under the civil rights rubric, including suits under Titles VI and VII of the Civil Rights Act of 1964, Title IX of the Educational Amendments of 1972 and 42 U.S.C. ง 1983. Even when the law regarding imputed liability or its absence is "well settled," such as in section 1983 suits, clear lines of distinction can sometimes be difficult to ascertain. When the statute itself provides for some imputed liability under agency principles, such as in Title VII suits, it can still be difficult to know where to draw the line. See, e.g., Meritor Savings Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). Finally, when the statute is silent about the issue of imputed liability, such as in Title VI and Title IX, even more difficulty comes into play. Compare, e.g., Howard v. Board of Educ. of Sycamore Community Sch. Dist., 876 F.Supp. 959 (N.D.Ill.1995); Hastings v. Hancock, 842 F.Supp. 1315 (D.Kan.1993); Floyd v. Waiters, 831 F.Supp. 867 (M.D.Ga.1993). From reading the cases, it is clear that this court is not the only federal court to engage in a jurisprudential struggle with imputed liability issues under all these statutes. We have each utilized various traditional analytical methods in coming to terms with the statute. This court's way is to establish categories of analysis for assistance in focusing the issue.
A. Analysis of Title IX Cases Based on Categories.
There is precedent for analyzing statutorily-created causes of action by types or categories. One example is Meritor Savings Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986), where the Supreme Court notes that two types of sexual harassment are actionable under Title VII: (1) where employment benefits are granted in return for sexual favors (now called quid pro quo cases) and (2) where improper acts create a hostile working environment (now called hostile environment cases). This differentiation is important for several reasons, and one relates to issues of agency. Under the quid-pro-quo category of cases, the actions of the employer's agents or supervisory personnel are to be imputed to the employer, "whether or not the employer knew, should have known, or approved of the supervisor's actions." 477 U.S. at 71, 106 S.Ct. at 2407. On the other hand, under the hostile-environment category of cases, the actions of the employer's agents are not to be imputed unless the employer knows of the harassment. Id. Just as analysis by category now makes a difference in Title VII cases because of Meritor, it should likewise make a difference in Title IX cases. In light of this view, it is the court's opinion that Title IX cases are properly analyzed under two categories: (1) relationships and (2) type of discrimination.
Intentional sexual discrimination under Title IX can arise in the following relationships: (1) the school and an employee, (2) the school and a student, and (3) one student and another student. As to the third relationship, see Doe v. Petaluma City Sch. Dist., 830 F.Supp. 1560 (N.D.Cal.1993). There can be several types of school discrimination: (1) denial of access to the school or the school's programs, normally but not always at the higher education level, (2) physical sexual abuse, or (3) non-physical but sexist harassment. These two categories (relationship and type of discrimination) probably do not exhaust the field, but the court draws the distinctions because of its belief that each distinction requires a separate analysis. For example, a case of discrimination brought by a teacher against a school district is different from a case of abuse brought by a student against a school district, and a case of access to a school or program is different from a case of sexual abuse. Although such distinctions may not create uniformity across the broad spectrum of Title IX litigation, some uniform analysis may be appropriate as to some combined categories, such as explicit sexual abuse of a student at the elementary and secondary and perhaps college levels. See comments in Doe v. Taylor Indep. Sch. Dist., 15 F.3d 443, 467 n. 5 (5th Cir.1994) (en banc) (Garwood, J., dissenting in part) (addressing a claim under 42 U.S.C. ง 1983).
B. One of the Core Categories of Title IX Cases.
Without question, one of the core objectives of Title IX is to provide relief to young *952 girls sexually abused by their male teachers at schools receiving federal funds. This category of cases will be referred to as "teacher-student sexual abuse" cases. It is true, of course, that there can be varying degrees of sexual abuse, from the very intrusive to the intrusive, but all degrees are objectionable.
No opinion polls are necessary to get a fix on this question. The American public has zero tolerance for sexual abuse of little girls, whether by teachers or others; their Congress has zero tolerance as well; hence, Title IX reaches this conduct with the full weight of its purpose. This being said, it should also be said that neither the American public nor their Congress nor Title IX promotes witch hunts of any kind. Allegations of teacher-child abuse should be carefully stated and carefully scrutinized; nonetheless, the unfortunate fact is that little girls (and little boys) are sometimes sexually abused by their teachers. When they are, Title IX provides an effective remedy to address the problem. As to the existence of abuse in the schools, see Carrie N. Baker, Comment, Proposed Title IX Guidelines on Sex-Based Harassment of Students, 43 EMORY L.J. 271, 276-78 (1994).
It was not until the Supreme Court decision in Franklin in 1992 that lawyers, litigants and judges grasped the full availability of Title IX remedies. See also Pfeiffer v. Marion Ctr. Area Sch. Dist., Bd. of Sch. Directors for the Marion Ctr. Area Sch. Dist., 917 F.2d 779 (3d Cir.1990). Before Franklin, cases of this nature were generally filed under 42 U.S.C. ง 1983. Since the principle of respondeat superior does not apply under section 1983 to suits against governmental entities, like school districts, relief was seldom granted in such suits, even when some relief seemed justified. See Doe v. Taylor Independent Sch. Dist., 15 F.3d 443 (5th Cir.1994) (en banc). In a thorough casenote written about the initial decision in Taylor Independent School District, the difficult history of section 1983 litigation in student abuse cases is chronicled. Barbara L. Horwitz, Note, The Duty of Schools to Protect Students from Sexual Harassment: How Much Recovery Will the Law Allow, 62 U.CIN.L.REV. 1165 (1994). The writer observes:
The argument generally accepted by the courts, allowing recovery where the plaintiff shows a pattern of deliberate indifference through policy or custom, has not worked well in providing a means of relief to those whose rights were seriously violated and has certainly not helped to quell the incidence of abuse.
Id. at 1222.
In the wake of Franklin, future school sexual abuse cases will more likely be litigated under Title IX than under section 1983. While the two statutes have some similarities, their differences are pronounced. The single fact that they were written in different centuries almost 100 years apart accentuates the differences. Section 1983 is a statute that opens a narrow and limited window for recovery in cases where governmental entities or actors are involved in constitutional deprivations. Passed under the spending power of Congress, Title IX deals with intentional torts relating to discrimination on the basis of sex. As different enactments, there should therefore be no presumption that the statutes should have the same attributes. In other words, there should be no requirement that the limitations of section 1983 should be transferred to Title IX. In the court's opinion, they should not. Otherwise, Title IX actions are transformed into section 1983 actions, to the extent the statutes cover the same substantive issues. Certainly, the Congress did not intend to enact Title IX to duplicate section 1983. Such redundancy should not be attributed to the institution created by the first article of the Constitution.
At least one judge on the Fifth Circuit suggests that section 1983 limitations do not apply to Title IX. In her dissent in Taylor Independent School District, Judge Jones writes as follows:
Not only is there no broad constitutional purpose to be served by recognizing for Doe's [the claimant-student] benefit a constitutional right not to have her bodily integrity compromised by a teacher's sexual abuse, but the constitutional remedy that the majority strives to assure her is *953 merely redundant of well-established criminal, tort and statutory sanctions. Coach Stroud [the offending teacher] went to jail for committing statutory rape. Doe [the claimant-student] has state-law tort claims available against [him] for assault and battery and intentional infliction of emotional distress. Most significant, perhaps, is her personal Title IX claim against the school district, which, in exchange for use of federal funds, rendered itself potentially liable for this type of sex harassment case. Franklin v. Gwinnett County Public Schools, 503 U.S. 60, 112 S.Ct. 1028, 117 L.Ed.2d 208 (1992). Doe in fact had a Title IX claim pending in state court when this case was orally argued en banc.
15 F.3d at 477. Judge Jones' reference to Title IX as a remedy for a sexually abused student is important to this court in light of other observations she makes in her opinion. For one thing, she notes that the coach's conduct in Taylor Independent School District cannot be seen by any stretch of the imagination to have been in the scope of his "pedagogical authority." Id. at 476. This comment points to a central problem of using agency principles in Title IX cases. No teacher who sexually abuses a student acts in the scope of his authority. No school district anywhere, with or without clearly stated policies on the subject, could ever be found to condone, much less authorize, the sexual abuse of a child as a part of its teachers' duties.
The problem in teacher-student sexual abuse cases is therefore as follows:
(1) only the school district can be liable under Title IX;
(2) only intentional acts of discrimination are reached by Title IX;
(3) the intentional acts can be committed only by the district's employees who will never have authorization to act; so
(4) unless the acts of the employees of the district are fully and strictly imputed to the district, Title IX becomes potentially inoperative.
In teacher-student sexual abuse cases, intentional discrimination can occur only through the intentional acts of a school district's employees. These acts of the employees must accordingly be imputed to the district in a meaningful way, so that the intent of Congress to provide a remedy for intentional discrimination is not thwarted. To be certain that it is not, this court thus believes that acts of employees should be imputed to the school district under strict liability principles. See Ronna Greff Schneider, Sexual Harassment and Higher Education, 65 TEX.L.REV. 525, 569-71 (1987) [hereinafter Schneider, Sexual Harassment and Higher Education]. In fact, this seems to be the import of Justice White's majority opinion in Franklin, where he writes that the availability of damage relief in Title IX cases "will require state entities to pay monetary awards out of their treasuries for intentional violation of federal statutes." Franklin, 503 U.S. at 75, 112 S.Ct. at 1037.
There are other alternatives, of course. A "knew or should have known" standard can be utilized, but the very nature of sexually abusive conduct is that it occurs or at least is attempted under cover of secrecy. A school district or its officials will thus hardly ever "know" of the conduct and will not likely be in a position to "should have known." Further, "the standard for the knowledge that [a school] official `should have' may vary." Kimberly A. Mango, Comment, Students Versus Professors: Combatting Sexual Harassment Under Title IX of the Education Amendments of 1972, 23 CONN.L.REV. 355, 395 (1991) [hereinafter Mango, Students Versus Professors]. Also, since a "knew or should have known" approach can result in administrators and others closing their eyes to the problem, it is not an effective way to address the problem. Moreover, the Supreme Court has already rejected this standard in quid pro quo cases under Title VII in the Meritor decision. Meritor Savings Bank v. Vinson, 477 U.S. 57, 70-71, 106 S.Ct. 2399, 2407, 91 L.Ed.2d 49 (1986).
Section 219(2) of the Restatement of Agency can also be utilized, because it does provide circumstances where a master is liable for the torts of his servant even when the servant acts outside the scope of his authority. Although more promising, this approach does, in the end, have limits because of the *954 nature of suits like these. For example, under Section 219(2)(b), liability can be imputed if a school district "was negligent or reckless." However, even if a district has no policy on the subject, can a district ever be negligent or reckless in the face of the fact of abuse, since again it usually happens behind closed doors in secret? In this case, for example, it is not altogether clear that the School District was negligent or reckless. One of its teachers failed to make a report, but is that conduct imputed to the District? Where does the line get drawn: at the teacher, at the principal, at the superintendent, or at the Board? See Hastings v. Hancock, 842 F.Supp. 1315, 1318-19 (D.Kan.1993); Mango, Students Versus Professors, at 394-95.
Although it is obvious this kind of inappropriate conduct should never happen and would never be condoned by a school system, it unfortunately does happen. Judge Jones examines this exact point in her dissent:
There is no systemic abuse of institutional power exemplified in this case, because no state agency, school, school superintendent or principal would ever condone what happened to Doe. Similarly, only by ipse dixit does the majority support its belief that Stroud's conduct was an abuse of state power. He was committing a crime just as surely as if he had stolen Doe's watch. Ordinarily, a state actor may point to some state policy in support of his actions. A court's job is to say how that proffered policy stacks up against constitutional protections. Here, there is no policy to be tested. The motive for Stroud's conduct was crass self-gratification. The Constitution has little to say about state actors who commit ordinary crimes for their own benefit. Compare Hudson v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). That task is better left to statutory and common law. `It is no reflection on either the breadth of the United States Constitution or the importance of traditional tort law to say that they do not address the same concerns.' Daniels, 474 U.S. at 333, 106 S.Ct. at 666.
15 F.3d at 477. After making this observation, Judge Jones then points meaningfully to the fact that, although the student in Taylor Independent School District did not state a section 1983 claim, even against school supervisory personnel, she still had a claim because she sued under Title IX in state court. Id.
Of course, this court does not want to read Judge Jones' dissent too broadly or in an unfair way. Still, while noting the limits of section 1983 cited above, she suggests that these limits do not exist under Title IX. In this court's opinion, they do not exist because, at least in regard to teacher-student sexual abuse cases, Title IX should be held to impute the intentional discrimination of a teacher to a school district under strict liability principles. Although this approach in Title VII cases was ultimately rejected by the Supreme Court in the Meritor decision, 477 U.S. at 72, 106 S.Ct. at 2408, there are real differences in language and scope between the two statutes that lead this court to believe that the reasoning in Meritor in this regard does not apply. The very fact that Title IX deals with children in the classroom instead of adults in the workplace is perhaps the most compelling reason for a different analysis. See Joanne Liebman Matson, Note, Civil Rights โ Sex Discrimination in Education โ Compensatory Damages Available in a Title IX Sexual Discrimination Claim. Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60, 112 S.Ct. 1028, 117 L.Ed.2d 208 (1992), 15 U.ARK. LITTLE ROCK L.J. (1993). Moreover, this rule of strict liability is not being implemented across all the categories of Title IX cases; it applies only to children suffering sexual abuse at the hands of their teachers. The standards applicable to other categories must be determined as those fact situations arise.
Defendant School District argues against this approach with vigor. In the first place, it asserts that teacher abuse of children is difficult to detect. With or without regulations and policies on the subject, teachers know abuse is wrong and thus do the acts in secret, as noted earlier. Young children, taught to respect their teachers and follow their teachers' requests, often do not know what to do when abuse occurs, no matter how many group counseling sessions a school might conduct on the subject. To place *955 strict liability on a district therefore creates liability, according to the argument, even when a school district has done everything in its power to avoid the problem.
Beyond the matters outlined earlier, there are other, countervailing policy considerations that answer this argument. For example, the risk of harm is better placed on a school district than on a young student. To do so heightens the vigilance of the district and causes employees at all levels of the system to be alert to the problem. See Schneider, Sexual Harassment and Higher Education, at 567-68. The young student, vulnerable in every way, should not be the only effective line of defense or the policing authority. The job of the student, especially the elementary student, is to learn in a trusting environment. As much as possible should be done to achieve this goal and to eliminate any interference with this goal. Given that the overwhelming majority of teachers are above reproach in this area, the problem for school districts should not be institutionally threatening as far as the number of potentially abusive activities is concerned.
Even if the number of incidents may be limited, the School District also argues that strict liability will still be ruinous for districts because they are strapped for funds and simply cannot respond to massive awards in these suits. The $1.4 million verdict in this case is an example of this concern. While it is acknowledged that Canutillo Independent School District is a financially poor school district, even rich districts would be strapped by a verdict of $1.4 million. Certainly, the Congress did not intend for Title IX suits to bankrupt school districts. See Howard v. Board of Educ. of Sycamore Community Unit Sch. Dist., 876 F.Supp. 959, 974 (N.D.Ill.1995). Everyone but a random plaintiff loses in such situations. Just as child abuse should not occur, school districts should not be subjected to potential insolvency when it does occur. For that reason, as set forth below, it is the opinion of the court that damages should be limited in teacher-student sexual abuse cases under Title IX.
Title IX and Limited Damages
As noted earlier, in the Franklin decision, the Supreme Court held that Title IX claimants were entitled to recover damages. In doing so, the Court reaffirmed a principle with "deep roots" in American jurisprudence: "we presume the availability of all appropriate remedies unless Congress has expressly indicated otherwise." 503 U.S. at 66, 112 S.Ct. at 1033. In Franklin, the Court cited Guardians Ass'n v. Civil Serv. Comm'n of the City of New York, 463 U.S. 582, 103 S.Ct. 3221, 77 L.Ed.2d 866 (1983), where issues of damages were considered and where "multiple opinions" suggested "the difficulty of inferring the common ground among Justices...." 503 U.S. at 70, 112 S.Ct. at 1035. Still, in Guardians Ass'n, "a clear majority [of the Court] expressed the view that damages were available under Title VI in an action seeking remedies for an intentional violation, and no Justice challenged the traditional presumption in favor of a federal court's power to award appropriate relief in a cognizable cause of action." Id.
It is also no less true that, in Guardians Ass'n, the Supreme Court observed that "make whole" remedies "are not ordinarily appropriate in private actions seeking relief for violations of statutes passed by Congress pursuant to its `power under the Spending Clause to place conditions on the grant of federal funds.'" 463 U.S. at 596, 103 S.Ct. at 3229. Moreover, as Justice White writes in his majority opinion in Franklin, some damage remedies, such as back pay, are not appropriate in suits by students under Title IX since students are not being paid by the schools in the first place. 503 U.S. at 75-76, 112 S.Ct. at 1038. Thus, the emphasis must be on the word "appropriate" when considering "any appropriate relief." Correspondingly, "make whole" remedies are not necessarily the norm when "spending statutes" are involved.
Concurring with Justice White's majority opinion in Franklin, Justice Scalia, joined by two other Justices, expresses this concern:
what the Court's analytical construct comes down to is this: Unless Congress expressly legislates a more limited remedial policy with respect to rights of action it *956 does not know it is creating, it intends the full gamut of remedies to be applied.
Id. at 77, 112 S.Ct. at 1039. Justice Scalia continues, suggesting the very approach implemented in this case: "when rights of action are judicially `implied,' categorical limitations upon their remedial scope may be judicially implied as well." Id.
This court agrees. In teacher-student sexual abuse cases under Title IX, appropriate remedies should have "appropriate limitations." The reason is clear. Public education is of critical importance to our Nation. Limited damages under Title IX protect the schools and simultaneously provide relief to sexually abused students. Under such circumstances, the majority and concurring opinions in Franklin are closer in philosophy than a first reading might suggest. In cases where rights are implied, "appropriate" remedies will also be implied. Those remedies, to be appropriate, may in certain categories of cases be limited.
In regard to Title IX cases involving sexual abuse of school children, the remedy this court deems most appropriate is a limited one that covers (1) the expenses for medical treatment, (2) the expenses for mental health treatment, and (3) the expenses for special education. These three elements of damage are designed to award money to pay for services that are best able to heal the child physically, emotionally and intellectually. The goal is to put money into direct services that focus on the child. The problem is complicated and the proof will often be difficult, because different children respond to abuse in very different ways. Some suffer extensive harm; some do not. See Eugene E. Levitt & Cornelia Mar่ Pinnell, Some Additional Light on the Childhood Sexual Abuse-Psychopathology Axis, 43 INT'L J. OF CLINICAL AND EXPERIMENTAL HYPNOSIS 145 (April 1995). The harm is also not limited to emotional issues; it can involve physical issues as well. Tori DeAngelis, New Threat Associated With Child Abuse, AMER. PSYCHOLOGICAL ASS'N MONITOR, April 1995, at 1. The child may also have special educational needs that can best be handled in a private school setting that is adapted for students who need special attention. The three elements of damage have short term and potentially long term consequences, but again all are designed to maximize the healing of the child so that the child can realize his or her full potential, in relationships and eventually at work.
Damages of this nature are specific and, to a real extent, limited. Although long term treatment may be required, it still should not cost so much as to impair the ability of a school district to meet the needs of all of its other students. The abused child will be provided for, but not to the detriment of that child's classmates, who do not suffer under the trauma of abuse but nonetheless deserve to have their own educational needs met.
The goal here is that school districts should not be placed in an impossible position under Title IX. This is an era of dwindling public resources. Federal funds are critically important to public schools. These funds must not be rejected because they carry with them the potential of a disastrous damage award, no matter how remote the potential is. Children who are abused deserve a fair opportunity to a full range of treatment, but they are not entitled to "make whole" relief, given the need to protect the schools and their critical mission in our society.
This balancing approach has other, obvious virtues to recommend it. In addition to protecting the schools and aiding the abused child, it should facilitate settlement, which is an important societal and judicial objective. A school will receive a claim and evaluate it. If the claim has no merit, the school will defend against the claim. If the claim has merit or potential merit, the school will investigate the treatment needs of the child and then will discuss settlement within reasonable parameters. The child's family will have the same parameters to analyze and evaluate. No windfalls are possible. Negotiations will center on three specific areas of recovery.
Moreover, by focusing on the treatment needs of the child, the parties can reduce some of the conflict and delay which often arises in litigation. The best interests of the child will be evaluated early. Even if the merit of the claim is unclear, the parties can *957 still agree to help the child without the specter of a windfall verdict hanging over the collective heads of the school district policy-makers.
In light of this court's decision, the damage award by the jury in this case cannot stand. The School District has requested a remittitur, but a remittitur is not appropriate here because there was no proof of how much treatment and assistance Miss Leija needed or will need or what the cost of such treatment and assistance was or will be. Under the circumstances, the court has no choice but to treat the Motion for Remittitur as a motion for new trial on the issue of damages and then grant a new trial. At a new trial on damages, proof can be presented to the new jury on expenses (1) for medical treatment, (2) for mental health treatment and (3) for special education. At the same time, the court can consider the award of legal fees, because the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. ง 1988, authorizes such an award to the prevailing parties under Title IX. It is important to mention the availability of fees to emphasize that limited relief for treatment for the abused student will not be reduced by legal costs.
Grove City College Issue and Remaining Issues
In one of its arguments for judgment, the School District asserts that, because the specific activity involved in this suit did not receive federal funds, Title IX does not apply. Although the Supreme Court agreed with this argument in Grove City College v. Bell, 465 U.S. 555, 104 S.Ct. 1211, 79 L.Ed.2d 516 (1984), Congress reversed the interpretation in the Civil Rights Restoration Act of 1987 and said that it is enough that the educational institution, rather than a specific activity of the institution, receives federal funds for liability to attach under Title IX. Therefore, the School District's argument is foreclosed.
In light of this decision, all other pending motions by both Miss Leija and the School District are either overruled or mooted. Subsequent orders will set the case for a jury trial on the issue of damages.
Conclusion
Although the approach of this court in this case may be unique in the way the concepts are combined, there is nothing new in the individual parts. In her excellent article in Texas Law Review, written before the Franklin decision, Professor Schneider writes:
Thus, there may be some drawbacks to imposing institutional liability in the absence of knowledge of sexual harassment. A compromise position would impose strict liability upon the institution, but would reduce accordingly any monetary award if the institution took action immediately upon discovering the harassment.
Schneider, Sexual Harassment and Higher Education at 570. Even though the court does not adopt all of Professor Schneider's recommendations, it does accept her basic approach to liability and damages under Title IX. In addition, the concept of categories of cases used in this opinion is grounded in Chief Justice Rehnquist's analysis in the Meritor decision. Justice Marshall's concurrence in Meritor forms the basis for the imposition of strict liability. The implied limitation on damages comes straight from Justice Scalia's concurring opinion in Franklin.
Under the circumstances, this opinion simply represents an amalgamation of existing pieces of analyses in the general area of federal statutes dealing with discrimination. Moreover, it does not cover the breadth of Title IX cases; instead, it covers only one category of Title IX cases, albeit a very important, core category. Finally, the goal of the opinion is to implement a Congressional statute in a balanced way, with three objectives in mind: to discourage sexual discrimination of students, to heal students who are sexually abused and to protect schools from ruinous judgments. Will it work? The new jury trial in this case on damages will be an early test. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/102851/ | 302 U.S. 46 (1937)
UNITED STATES
v.
WILLIAMS.
No. 11.
Supreme Court of United States.
Argued October 15, 1937.
Decided November 8, 1937.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.
Mr. Julius C. Martin, with whom Solicitor General Reed and Messrs. Wilbur C. Pickett, Thomas E. Walsh and W. Marvin Smith were on the brief, for the United States.
Mr. Frank C. Wade, with whom Mr. Perry Smith was on the brief, for respondent.
MR. JUSTICE BUTLER delivered the opinion of the Court.
Respondent brought this suit in the federal court for the northern district of Illinois to recover war risk insurance *47 on the life of her minor son, Benson Charles Williams, who died while serving in the navy. Trial by jury having been waived, the court made findings of fact, stated its conclusions of law and gave judgment for the plaintiff. The Circuit Court of Appeals affirmed. 86 F. (2d) 746.
The findings show: Plaintiff's son was born August 27, 1901, and January 13, 1919, enlisted in the navy for the period of his minority. At that time defendant issued a certificate of term insurance binding itself, in case of his death while insured, to pay plaintiff $10,000 in 240 equal monthly installments; he directed defendant to deduct premiums from his pay; his parents executed a writing by which they consented to the enlistment, released their claim to his pay, approved the transactions between him and defendant and declared that their consent was given on the condition that, during enlistment, he would carry war risk insurance in the sum of $10,000 in behalf of his mother. July 20, 1920, he made written request that his insurance be terminated. Thereafter, defendant made no deductions from his pay on account of premiums. The insured died June 30, 1921. At all times until his death his uncollected pay was more than enough to keep the insurance in force. Upon learning of her son's death plaintiff demanded payment of the insurance. When notified by defendant of her son's cancelation she repudiated it, offered to pay all premiums, reiterated her claim as beneficiary and, defendant having rejected it, brought this suit.
The Circuit Court of Appeals reasoned as follows: Plaintiff's consent was essential to the enlistment and was given on condition that the insurance be maintained. The minor and defendant could not set the condition at naught. Defendant could not avail itself of his services, to which it was entitled only if his mother so agreed, and ignore the condition upon which the agreement was obtained. Defendant was charged with notice of plaintiff's *48 interest as beneficiary and, the cancelation not having been ratified by her, defendant was bound to collect the premiums and maintain the insurance by deductions from the pay of the insured. On that basis the court concluded that the insurance remained in force and that plaintiff is entitled to recover.
The opinion strongly puts the considerations that make in favor of plaintiff's claim, but neglects the distinction between private employment of minors and their service in army or navy, and fails to give effect to the law applicable to contracts of enlistment and to the terms upon which the Government granted the war risk insurance here in question. In virtue of its power to raise and support armies, to provide and maintain a navy and to make rules for the government of land and naval forces, the Congress may require military service of adults and minors alike.[1] The power of the United States may be exerted to supersede parents' control and their right to have the services of minor sons who are wanted and fit for military service.[2] And the Congress may confer upon minors the privilege of serving in land or naval forces, authorize them to enlist, or draft them upon such terms as it may deem expedient and just.[3]
*49 The statute under which plaintiff's son was accepted declares that minors between ages of 14 and 18 years shall not be enlisted in the navy without the consent of their parents.[4] It means that, while minors over 18 may enlist without parental permission, the government elects not to take those between 14 and 18 unless their parents are willing to have them go. It is a determination by Congress that minors over 14 have capacity to make contracts for service in the navy.[5] And it is in harmony with rulings under the common law to the effect that enlistment of a minor for military service is not voidable by him or his parents.[6] Enlistment is more than a contract; it effects a change of status.[7] It operates to emancipate minors at least to the extent that by enlistment they become bound to serve subject to rules governing enlisted men and entitled to have and freely to dispose of their pay.[8] Upon enlistment of plaintiff's *50 son, and until his death, he became entirely subject to the control of the United States in respect of all things pertaining to or affecting his service.
The statute does not confer upon or leave with the parents any right to condition consent to their sons' enlistment. No Act of Congress permits enlistment of minors upon condition or upon the qualified consent of parents, nor does any Act authorize recruiting officers to bind the United States to carry, or to require an enlisted man to carry, war risk insurance for his own protection or for the benefit of any person. It follows that defendant was not bound by the condition on which the trial court found that the parents consented to the enlistment of their minor son.[9]
War risk insurance was made available to those in active military service for the greater protection of themselves and their dependents.[10] By the insurance contract, of which applicable provisions of statutes and regulations constitute a part,[11] the insured minor was authorized to allot a part of his pay for the payment of premiums,[12] to change beneficiaries without their consent[13] and to cancel the insurance in whole or in *51 part.[14] It follows that the cancelation was valid and plaintiff is not entitled to recover.[15]
Reversed.
NOTES
[1] Tarble's Case (1871) 13 Wall. 397, 408. In re Grimley (1890) 137 U.S. 147, 153. Selective Draft Law Cases (1918) 245 U.S. 366, 377-378, 386. Hamilton v. Regents (1934) 293 U.S. 245, 262-264. United States v. Blakeney (1847) 3 Gratt. 405, 408. Lanahan v. Birge (1862) 30 Conn. 438.
[2] United States v. Bainbridge (1816) Fed. Cas. No. 14,497, p. 950, per Story, J. Commonwealth v. Gamble (1824) 11 Serg. & R. 93, 94, per Gibson, J. Com. ex rel. Engle v. Morris (1852) 1 Phila. 381. In the matter of Beswick (1863) 25 How. Pr. 149, 151. Halliday v. Miller (1887) 29 W. Va. 424, 439; 1 S.E. 821.
[3] United States v. Bainbridge (1816) Fed. Cas. No. 14,497, p. 950. In re Riley (1867) Fed. Cas. No. 11,834, p. 797, per Blatchford, D.J. In re Davison (1884) 21 Fed. 618, 622. In re Cosenow (1889) 37 Fed. 668, 670, per Henry Billings Brown, D.J. United States v. Blakeney (1847) 3 Gratt. 405, 416. In re Gregg (1862) 15 Wis. 531, 532.
[4] "No minor under the age of fourteen years shall be enlisted in the naval service; and minors between the age of fourteen and eighteen years shall not be enlisted for the naval service without the consent of their parents or guardians." 34 U.S.C., § 161. (See R.S., §§ 1419, 1420, as amended by Acts: May 12, 1879, c. 5, 21 Stat. 3; February 23, 1881, c. 73, § 2, 21 Stat. 338; August 22, 1912, c. 336, § 2, 37 Stat. 356.)
[5] In re Morrissey (1890) 137 U.S. 157, 159. In re Davison (1884) 21 Fed. 618, 623. In re Gregg (1862) 15 Wis. 531, 533. United States v. Blakeney (1847) 3 Gratt. 405, 414-415. United States v. Bainbridge (1816) Fed. Cas. No. 14,497, p. 951.
[6] In re Morrissey (1890) 137 U.S. 157, 159. United States v. Blakeney (1847) 3 Gratt. 405, 413.
[7] In re Grimley (1890) 137 U.S. 147, 151. In re Morrissey (1890) 137 U.S. 157, 159.
[8] In re Morrissey (1890) 137 U.S. 157, 159-160. In re Miller (1902) 114 Fed. 838, 842-843. United States v. Reaves (1903) 126 Fed. 127, 130. United States v. Bainbridge (1816) Fed. Cas. No. 14,497, p. 951. Baker v. Baker (1868) 41 Vt. 55, 57. Halliday v. Miller (1887) 29 W. Va. 424, 439; 1 S.E. 821. Gapen v. Gapen (1895) 41 W. Va. 422, 425; 23 S.E. 579. Iroquois Iron Co. v. Industrial Com. (1920) 294 Ill. 106, 109; 128 N.E. 289. 1 Schouler, Domestic Relations (6th ed.) § 754, p. 820.
[9] Utah Power & Light Co. v. United States (1917) 243 U.S. 389, 408-409. Wilber Nat. Bank v. United States (1935) 294 U.S. 120, 123-124.
[10] War Risk Insurance Act of October 6, 1917, § 400, 40 Stat. 409.
[11] White v. United States (1926) 270 U.S. 175. Lynch v. United States (1934) 292 U.S. 571, 577.
[12] War Risk Insurance Act of October 6, 1917, § 202, 40 Stat. 403.
[13] Id., § 402, 40 Stat. 409: ". . . Subject to regulations, the insured shall at all times have the right to change the beneficiary or beneficiaries of such insurance without the consent of such beneficiary or beneficiaries, but only within the classes herein provided . . ." Bulletin No. 1, promulgated October 15, 1917: "The insured may at any time, subject to the regulations of the bureau, change the beneficiary or beneficiaries to any person or persons within the classes permitted by the act, without the consent of the beneficiary or beneficiaries." Regulations and Procedure, U.S. Veterans' Bureau, 1928 (Washington, 1930) Part 2, pp. 1235, 1237.
[14] T.D. 48 W.R. provides: "The yearly renewable term insurance shall. . . lapse and terminate . . . (c) Upon written request . . . to the Bureau . . . for cancelation of the insurance, in whole or in part, and corresponding cessation or reduction of the payment of premiums . . ." Regulations and Procedure, U.S. Veterans' Bureau, 1928 (Washington, 1930) Part 1, pp. 19-20.
[15] White v. United States (1926) 270 U.S. 175, 180. Von der Lippi-Lipski v. United States (1925) 4 F. (2d) 168, 169. United States v. Sterling (1926) 12 F. (2d) 921, 922. Lewis v. United States (1932) 56 F. (2d) 563, 564. Irons v. Smith (1933) 62 F. (2d) 644, 646. | 01-03-2023 | 04-28-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/102880/ | 302 U.S. 329 (1937)
SMYTH, EXECUTOR,
v.
UNITED STATES.[*]
No. 42.
Supreme Court of United States.
Argued November 18, 19, 1937.
Decided December 13, 1937.
CERTIORARI TO THE COURT OF CLAIMS.
*332 Mr. Robert A. Taft for petitioners in Nos. 42 and 43.
Solicitor General Reed, with whom Attorney General Cummings, Assistant Attorney General Whitaker, and Messrs. Harry LeRoy Jones, Edward First, Clarence V. Opper, and Bernard Bernstein were on the brief, for the United States.
Mr. H. Vernon Eney for Machen, respondent in No. 198.
*348 Opinion of the Court by MR. JUSTICE CARDOZO, announced by the CHIEF JUSTICE.
Three cases present a single question: Was a notice of call issued by the Secretary of the Treasury for the redemption of Liberty Loan bonds effective to terminate *349 the running of interest on the bonds from the designated redemption date?
Petitioner in No. 42 is the owner of a $10,000 First Liberty Loan 3 1/2% bond of 1932-1947, serial number 6670. The bond was issued pursuant to the Act of April 24, 1917 (40 Stat. 35), and Treasury Department Circular No. 78, dated May 14, 1917, and was purchased by petitioner in December, 1934, for $10,362.50 and accrued interest. Its provisions, so far as material, read as follows:
"The United States of America for value received promises to pay to the bearer the sum of Ten Thousand Dollars on the 15th day of June, 1947, with interest at the rate of three and one-half per centum per annum payable semi-annually on December 15 and June 15 in each year until the principal hereof shall be payable, upon presentation and surrender of the interest coupons hereto attached as they severally mature. The principal and interest of this bond shall be payable in United States gold coin of the present standard of value, . . . All or any of the bonds of the series of which this is one may be redeemed and paid at the pleasure of the United States on or after June 15, 1932, or on any semi-annual interest payment date or dates, at the face value thereof and interest accrued at the date of redemption, on notice published at least three months prior to the redemption date, and published thereafter from time to time during said three months period as the Secretary of the Treasury shall direct. . . . From the date of redemption designated in any such notice interest on the bonds called for redemption shall cease, and all coupons thereon maturing after said date shall be void. . . ."
On March 14, 1935, the Secretary of the Treasury published a notice of call for the redemption on June 15, 1935, of all the bonds so issued. "Public notice is hereby given:
1. All outstanding First Liberty Loan bonds of 1932-47 are hereby called for redemption on June 15, 1935. The *350 various issues of First Liberty Loan bonds (all of which are included in this call) are as follows:
First Liberty Loan 3 1/2 percent bonds of 1932-47 (First 3 1/2's), dated June 15, 1917; . . .
2. Interest on all such outstanding First Liberty Loan bonds will cease on said redemption date, June 15, 1935."
Thereafter, on April 22, 1935, the Secretary of the Treasury issued a circular (Department Circular, No. 535) prescribing rules for the redemption of First Liberty Loan bonds, and providing, among other things, as follows: "Holders of any outstanding First Liberty Loan bonds will be entitled to have such bonds redeemed and paid at par on June 15, 1935, with interest in full to that date. After June 15, 1935, interest will not accrue on any First Liberty Loan bonds."
Nearly two years before the publication of the notice of call Congress had adopted the Joint Resolution of June 5, 1933 (48 Stat. 112) by which every obligation purporting to be payable in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, was to be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment was legal tender for public and private debts. Nearly four weeks before the publication of the notice of call, the validity of that Joint Resolution had been the subject of adjudication by this court in the Gold Clause Cases, Norman v. Baltimore & Ohio R. Co., 294 U.S. 240, Nortz v. United States, 294 U.S. 317, and Perry v. United States, 294 U.S. 330, all decided February 18, 1935. We may presume that the call was issued with knowledge of those rulings.
About six months after the date designated for redemption, petitioner, on December 28, 1935, presented his bond (with coupons due on and before June 15, 1935, detached) to the Treasurer of the United States, and demanded the redemption by the payment of 10,000 gold dollars each *351 containing 25.8 grains of gold nine-tenths fine, which was the gold content of a dollar in 1917. The Treasurer refused to comply with that demand, but offered payment of the face amount of the principal in legal tender coin or currency other than gold or gold certificates. Petitioner declined to accept the tender and retained the bond. Thereafter, on the same day, petitioner presented to the Treasurer of the United States, the interest coupon for the six months period June 15 to December 15, 1935, and demanded payment either in gold coin or legal tender currency. The Treasurer refused payment on the ground that the bond to which the coupon was attached had been called for redemption on June 15, 1935.
An action followed in the Court of Claims, petitioner resting his claim upon the interest coupon only, and limiting his demand to a recovery in current dollars.[1] The Court gave judgment for the United States on the ground that on the designated redemption date, all coupons for later interest became void. Because of the important interests, public and private, affected by the judgment, a writ of certiorari was granted by this court.
Petitioner in No. 43 is the owner of a $50 Fourth Liberty Loan 4 1/2% bond of 1933-1938, which it bought on March 9, 1935. The bond was issued pursuant to the Act of September 24, 1917 (40 Stat. 288) as amended, and Treasury Department Circular, No. 121. It was to mature on October 15, 1938, subject, however, to redemption *352 on October 15, 1933 or later. The terms of redemption are stated in Circular No. 121, which is incorporated by reference into the bond itself. Six months notice by the Secretary of the Treasury was required, "From the date of redemption designated in any such notice, interest on bonds called for redemption shall cease." On October 12, 1933, the Secretary of the Treasury published a notice of call for redemption on April 15, 1934, of certain bonds of this issue. The bond now owned by petitioner is one of them. There were tenders and refusals similar to those described already in the statement of the other case. An action followed in the Court of Claims. Petitioner prayed for judgment in the sum of $1.07, the amount of the interest coupon for the six months period ending October 15, 1934.[2] The court dismissed the claim and the case is here on certiorari.
Respondent in No. 198 is the owner of a $1,000 First Liberty Loan 3 1/2% bond of 1932-1947, No. 47084, purchased on March 22, 1933, for $1,011.25. This is the same bond issue involved and described in No. 42. Respondent did not present his bond for payment either on the redemption date or later. He did not present the coupon which is the foundation of the suit. However, the fact is stipulated that the Treasurer of the United States and other fiscal agents have not at any time been directed by the Secretary of the Treasury to redeem the bonds in gold coin, but have been authorized and directed to redeem in legal tender currency. The fact is also stipulated that there was a refusal to pay similar coupons for interest accruing after the date of redemption. Respondent brought suit upon his coupon in the United States District *353 Court for the District of Maryland. The District Court gave judgment in favor of the United States. The Court of Appeals for the Fourth Circuit reversed and ordered a new trial (87 F. (2d) 594), declining to follow the ruling which had been made by the Court of Claims. The case is here on certiorari on the petition of the Government.
Hereafter, for convenience of reference, the bondholder in each of the three cases will be spoken of as a "petitioner," without adverting to the fact that in one of them (No. 198) he is actually a respondent.
First. The so-called redemption provisions of the bonds are provisions for the acceleration of maturity at the pleasure of the Government, and upon publication of the notice of call for the period stated in the bonds the new date became substituted for the old one as if there from the beginning.
The contract is explicit. "From the date of redemption designated in any such notice interest on the bonds called for redemption shall cease, and all coupons thereon maturing after said date shall be void." The contract is not to the effect that interest shall cease upon or after payment. Cf. Sterling v. H.F. Watson Co., 241 Pa. 105, 110; 88 A. 297. The contract is that interest shall cease upon the date "designated" for payment. The rule is established that in the absence of contract or statute evincing a contrary intention, interest does not run upon claims against the Government even though there has been default in the payment of the principal. U.S. ex rel. Angarica v. Bayard, 127 U.S. 251; United States v. North Carolina, 136 U.S. 211; United States v. North American T. & T. Co., 253 U.S. 330, 336; Seaboard Air Line Ry. v. United States, 261 U.S. 299, 304. The allowance of interest in eminent domain cases is only an apparent exception, which has its origin in the Constitution. Shoshone Tribe v. United States, 299 U.S. 476, 497; *354 United States v. Rogers, 255 U.S. 163, 169. If the bonds in suit had matured at the date of natural expiration, interest would automatically have ended, whether the bonds were paid or not. Maturity at a different and accelerated date does not make the obligation greater. In the one case as in the other the interest obligation ends, and this for the simple reason that the contract says that it shall end. Upon non-payment of principal at the original maturity, the bondholder, if unpaid, has a remedy by suit to recover principal, with interest then overdue, but not interest thereafter. Upon non-payment of principal at the accelerated date, he has a like remedy, but no other. Default, if there has been any, is as ineffective in one situation as in the other to keep interest alive.
Petitioners insist, however, that the notices of call were not adequate to accelerate maturity, with the result that interest continued as if notice had not been given. This surely is not so if we look to form alone and put extrinsic facts aside. "All outstanding First Liberty Loan bonds of 1932-47 are hereby called for redemption on June 15, 1935." "All outstanding Fourth Liberty Loan 4 1/4 per cent bonds of 1933-38, hereinafter referred to as Fourth 4 1/4's, bearing the serial numbers which have been determined by lot in the manner prescribed by the Secretary of the Treasury, are called for redemption on April 15, 1934, as follows," (the serial numbers being thereupon stated). Nothing could be simpler, nothing more clearly adequate, unless the notices are to be supplemented by resort to extrinsic facts, the subject of judicial notice, which neutralize their terms. Petitioners maintain that such extrinsic facts exist. In their view, each of the two forms of notice must be read as if it incorporated within itself the Joint Resolution of June 5, 1933, and promised payment in the manner called for by that Resolution, and not in any other way. Thus supplemented, we are told, the notice is a nullity, for the payment that it promises is not the payment owing under the letter of the bond.
*355 The notice of call for the redemption of the bonds was a notice, not a promise. The Secretary of the Treasury was not under a duty to make any promise as to the medium of payment. He did not undertake to make any. The obligation devolving upon the United States at the designated date was measured by the law, and the law includes the Constitution as well as statutes and resolutions. The medium of payment lawful at the time of issuing the call might be different from that prevailing at the accelerated maturity. This might happen as a consequence of an amendment of the statute. It might happen through judicial decisions adjudging a statute valid and equally through judicial decisions adjudging a statute void. The interval between notice and redemption was three months in the case of the First Liberty bonds; it was six months for the Fourth. The Secretary of the Treasury understood these possibilities when he sent out his notices for the redemption of the bonds in suit. Indeed, Perry v. United States, supra, had already been decided when bonds of the First Liberty issue were made the subject of his call. In each form of notice the implications of the call are clear. What the bondholders were told was neither more nor less than this, that at the accelerated maturity they would be entitled to payment in such form and in such measure as would discharge the obligation. The Secretary's beliefs or expectations as to what the proper form or measure would be at the appointed time are of no controlling importance, even if they were shown. The obligation was not his; it was that of the United States. His own beliefs and expectations and even those of the Government might be changed or frustrated by subsequent events. The bondholders had the assurance that the bonds would be redeemed, and they were entitled to no other. Whatever medium of payment would discharge the obligation if maturity had been attained through the natural lapse of time would discharge *356 it as completely at an accelerated maturity. The same money that would "pay" would serve also to "redeem." There is no reason to believe that the one situation was distinguished from the other in the minds of the contracting parties. The sum total of existing law Constitution and statutes and even controlling decisions, if there were any would say how much was due.
If this analysis is sound, it carries with it the conclusion that the call did not commit the Government either expressly or by indirection to a forbidden medium of payment. The case for the petitioners, if valid, must rest upon some other basis. A suggested basis is that the existence of the Joint Resolution amounted without more to an anticipatory breach, which made the notice of redemption void from its inception, if there was an election so to treat it, and this though the notice left the medium of payment open. But the rule of law is settled that the doctrine of anticipatory breach has in general no application to unilateral contracts, and particularly to such contracts for the payment of money only. Roehm v. Horst, 178 U.S. 1, 17; Nichols v. Scranton Steel Co., 137 N.Y. 471, 487; 33 N.E. 561; Kelly v. Security Mutual Life Ins. Co., 186 N.Y. 16; 78 N.E. 584; Williston, Contracts, rev. ed., vol. 5, § 1328; Restatement, Contracts, §§ 316, 318. Whatever exceptions have been recognized do not touch the case at hand. New York Life Ins. Co. v. Viglas, 297 U.S. 672, 679, 680. Moreover, an anticipatory breach, if it were made out, could have no effect upon the right of the complaining bondholders to postpone the time of payment to the date of natural maturity. The sole effect, if any, would be to clothe them with a privilege to declare payment overdue, which is precisely the result that they are seeking to avoid. The conclusion therefore follows that for the purpose of the present controversy the breach would be immaterial even if it were not unreal. But its unreality is the feature we *357 prefer to dwell upon. The Government was not subject to a duty to keep the content of the dollar constant during the period intervening between promise and performance. The erroneous assumption of the existence of such a duty vitiates any argument in favor of the petitioners as to an anticipatory breach just as it vitiates their argument as to the implications of the call. The duty of the Government and its only one was to pay the bonds when due. If the statutes had been amended before the date of redemption or if the courts had decided that payment must be made in gold or in currency proportioned to the earlier content of the dollar, there is little likelihood that any one would judge the efficacy of the notice by the test of the law in force at the date of its announcement.
The petitioners being dislodged from the position that the notices of call were void in their inception are perforce driven to the stand that they became nullities thereafter, when the statutes were unrepealed at the designated date. But at the designated date the accelerated maturity was already an accomplished fact. The duty of payment did not arise in advance of maturity. In the very nature of things it presupposes maturity as a preliminary condition. If there had been any different intention, the bonds would have provided that interest should cease upon payment or lawful tender, and not from the date of redemption stated in the call. This is not a case of mutual promises or covenants with performance to be rendered on each side at a given time and place. The obligees were not under a duty to do anything at all at the accelerated maturity, though they were privileged, if they pleased, to present the bonds for payment. Most of the learning as to dependent and independent promises in the law of bilateral contracts (Loud v. Pomona Land & W. Co., 153 U.S. 564, 576) is thus beside the mark. This is a case of a unilateral contract where *358 the only act of performance, the payment of the bonds, was one owing from the obligor, and arose by hypothesis upon maturity and not before. Let maturity, whether normal or accelerated, be accepted as a postulate, and it must follow that default in payment will not change the date again. If the Government were to come forward with a tender a day or a week after the designated date, the obligees would not be sustained in a rejection of the payment on the theory that the original date of maturity had been restored by the delay. If the obligees were to sue after the designated date, the Government would not be heard to say that because of the default in payment, the proposed acceleration was imperfect and inchoate. As pointed out already, the bondholders became entitled, when once the notice had been published, to a measure and medium of payment sufficient to discharge the debts. If the then existing Acts of Congress were valid altogether, payment would be sufficient if made in the then prevailing currency. If the Acts were invalid, either wholly or in some degree, there might be need of something more, how much being dependent upon the operation of an implied obligation, read into the bonds by a process of construction, to render an equivalent. Whatever the form and measure, the bondholders had a remedy if they had chosen to invoke it.
We do not now determine the effect of a notice given in bad faith with a preconceived intention to withhold performance later. Fraud vitiates nearly every form of conduct affected by its taint, but fraud has not been proved and indeed has not been charged. There is no reason to doubt that a Secretary of the Treasury who was willing to give notice of redemption after knowledge of the decision in Perry v. United States understood that the obligation of the Government would be measured by the Constitution and not by any statute, in so far as the two might be found to be in conflict. Never for a moment *359 was there less than complete submission to the supremacy of law. At the utmost, there was honest mistake as to rights and liabilities in a situation without precedent. Fraud being eliminated, the case acquires a new clarity. When we reach the heart of the matter, putting confusing verbiage aside and fixing our gaze upon essentials, the obligation of the bonds can be expressed in a simplifying paraphrase. "This bond shall be payable on June 15, 1947, or (upon three months notice by the Secretary of the Treasury) on June 15, 1932, or any interest date thereafter." That is what was meant. That in substance is what was said.[3]
No question of constitutional law is involved in the decision of these cases. No question is here as to the correctness of the decision in Perry v. United States, or as to the meaning or effect of the opinion there announced. All such inquiries are put aside as unnecessary to the solution of the problem now before us. Irrespective of the validity or invalidity of the whole or any part of the legislation of recent years devaluing the dollar, the maturity of the bonds in suit was accelerated by valid notice. As a consequence of such acceleration the right to interest has gone.
Second. The Secretary of the Treasury did not act in excess of his lawful powers by issuing the calls without further authority from the Congress than was conferred by the statutes under which the bonds were issued.
*360 The argument to the contrary is inconsistent with the plain provisions of the statutes and also of the bonds themselves.
There was also confirmation of his power in subsequent enactments. Victory Liberty Loan Act, § 6, 40 Stat. 1311, as amended, March 2, 1923, c. 179, 42 Stat. 1427, and January 30, 1934, § 14 (b), 48 Stat. 344; Gold Reserve Act of 1934, § 14, 48 Stat. 343; Act of February 4, 1935, §§ 2, 4, 49 Stat. 20.
Third. In issuing the calls, the Secretary of the Treasury was not limited by the Act of March 18, 1869 (R.S. 3693; 16 Stat. 1) which in its day placed restrictions upon the redemption by the Government of interest-bearing bonds.
The aim of that statute was the protection of holders of United States obligations not bearing interest, the "greenbacks" of that era. "The bonds of the United States are not to be paid before maturity, while the note-holders are to be kept without their redemption, unless the note-holders are able at the same time to convert their notes into coin." Statement of Robert C. Schenck, one of the House Managers, Congressional Globe, March 3, 1869, p. 1879. Upon the resumption of specie payments in 1879 the aim of the statute was achieved, and its restrictions are no longer binding.
The judgments in Nos. 42 and 43 should be affirmed, and that in No. 198 reversed.
Nos. 42 and 43, affirmed.
No. 198, reversed.
Dissenting: MR. JUSTICE McREYNOLDS, MR. JUSTICE SUTHERLAND and MR. JUSTICE BUTLER. See post, p. 364.
MR. JUSTICE STONE.
I concur in the result.
I think the court below, in the Machen case, 87 F. (2d) 594, correctly interpreted the bonds involved in *361 these cases as reserving to the government the privilege of accelerating their maturity by paying them or standing ready to pay them on any interest date according to their tenor, and upon giving the specified notice fixing the "date of redemption." The words "redeemed" and "redemption" as used in the bonds[1] point the way in which the privilege was to be exercised as plainly as when they are written in the bonds of a private lender. Lynch v. United States, 292 U.S. 571, 579; cf. Perry v. United States, 294 U.S. 330, 352. If payment, or readiness to pay the bonds in accordance with their terms was essential to "redemption," the one or the other, equally with the required notice, was a condition of acceleration.
The obligation of the bonds, read in the light of long established custom and of our own decision in Holyoke Water Power Co. v. American Writing Paper Co., 300 U.S. 324, 336, decided since the Perry case, must, I think, be taken to be a "gold value" undertaking to pay in gold dollars of the specified weight and fineness or their equivalent in lawful currency. Compare Norman v. B. & O.R. Co., 294 U.S. 240, 302. Feist v. Societe Intercommunale Belge, &c., L.R. [1934] A.C. 172, 173. The suppression of the use of gold as money, and the restriction on its export and of its use in international exchange, by acts *362 of Congress, 48 Stat. 1, 337, did not relieve the government of its obligation to pay the stipulated gold value of the bonds in lawful currency. Hence it has not complied, or ever stood ready to comply, with one of the two conditions upon performance of which the bonds "may be redeemed and paid" in advance of their due date the payment to the bondholder of the currency equivalent of the stipulated gold value.
It will not do to say that performance of this condition can be avoided or dispensed with by the adoption of any form of words in the notice. Nor can it be said that a declaration, in the notice, of intention to pay whatever can be collected in court, see the Perry case, supra, 354, is equivalent to a notice of readiness to pay the currency equivalent of the gold value stipulated to be paid, or that a statement of purpose to pay what will constitutionally satisfy the debt suffices to accelerate although no payment of the currency equivalent is made or contemplated or is permitted by the statutes. It follows that judgment must go for the bondholders unless the Joint Resolution of Congress of June 5, 1933, 48 Stat. 112, requiring the discharge of all gold obligations "dollar for dollar" in lawful currency, and declaring void as against public policy all provisions of such obligations calling for gold payments, is to be pronounced constitutional.
Decision of the constitutional question being in my opinion now unavoidable, I am moved to state shortly my reasons for the view that government bonds do not stand on any different footing from those of private individuals and that the Joint Resolution in the one case, as in the other, was a constitutional exercise of the power to regulate the value of money. Compare Norman v. B. & O.R. Co., supra, 304, 309. Without elaborating the point, it is enough for present purposes to say that the undertaking of the United States to pay its obligations in gold, if binding, operates to thwart the exercise of the *363 constitutional power in the same manner and to the same degree pro tanto as do bonds issued by private individuals, Norman v. B. & O.R. Co., supra, 311 et seq., except insofar as the government resorts to its sovereign immunity from suit. Had the undertaking been given any force in the Gold Clause Cases, or the meaning which we have since attributed to it when used in private contracts, it would, if valid and but for the immunity from suit, have defeated the government policy of suspension of gold payments and devaluation of the dollar. Compare the Norman case, supra, with the concurring memorandum in Perry v. United States, supra, 360-361.
The very fact of the existence of such immunity, which admits of the creation of only such government obligations as are enforceable at the will of the sovereign, is persuasive that the power to borrow money "on the credit" of the United States cannot be taken to be a limitation of the power to regulate the value of money. Looking to the purposes for which that power is conferred upon the national government, its exercise, if justified at all, is as essential in the case of bonds of the national government as it is in the case of bonds of states, municipalities and private individuals. See Norman v. B. & O.R. Co., supra, 313 et seq. Its effect on the bondholders is the same in every case. Compare Norman v. B. & O.R. Co., supra, with Nortz v. United States, 294 U.S. 317. No reason of public policy or principle of construction of the instrument itself has ever been suggested, so far as I am aware, which would explain why the power to regulate the currency, which is not restricted by the Fifth Amendment in the case of any obligation, is controlled, in the case of government bonds, by the borrowing clause which imposes no obligation which the government is not free to discard at any time through its immunity from suit. I cannot say that the borrowing clause which is without force to compel the sovereign to *364 pay nevertheless renders the government powerless to exercise the specifically granted authority to regulate the value of money with which payment is to be made.
MR. JUSTICE BLACK, concurring.
Agreeing altogether with the opinion of MR. JUSTICE CARDOZO, which deals only with the construction of the contract and the rights flowing from the notice, I find it unnecessary and therefore inappropriate to express any opinion as to the validity of the Joint Resolution of 1933 or other acts of legislation devaluing the dollar.
MR. JUSTICE McREYNOLDS, dissenting.[*]
MR. JUSTICE SUTHERLAND, MR. JUSTICE BUTLER and I cannot acquiesce in the conclusion approved by the majority of the Court. In our view it gives effect to an act of bad faith and upholds patent repudiation. Its wrongfulness is betokened by the circumlocution presented in defense.
The suit is to recover in currency of today the face value of a past due coupon originally attached to a three and one-half per cent bond of the United States issued in 1917 and payable 1947 nothing else.
The opinion of the Circuit Court of Appeals, to which little can be added, sets out the important facts and adequately supports its judgment.
In 1917, when gold coins contained 25.8 grains to the dollar, the United States obtained needed funds by selling coupon bonds among them the one here involved. They solemnly agreed to pay the holder one thousand dollars on June 15, 1947, with semi-annual interest, in "gold coin of the present standard of value" subject to the following option: "All or any of the bonds of the *365 series of which this is one may be redeemed[1] and paid at the pleasure of the United States on or after June 15, 1932, on any semi-annual interest payment date or dates, at the face value thereof and interest accrued at the date of redemption, on notice published at least three months prior to the redemption date. . .. From the date of redemption designated in any such notice, interest on the bonds called for redemption shall cease, and all coupons thereon maturing after such date shall be void."
The promise is to pay one thousand dollars in gold coin, 1917 standard. The face value of the bond is one thousand gold dollars. The option reserved is to redeem and pay after notice by giving the holder that number of such dollars. The notice required is nothing less than a declaration of bona fide purpose to redeem or pay off the obligation as written no other right was reserved. A notice divorced from that purpose could amount to nothing more than a dishonest effort to defeat the contract and defraud the creditor. It would not come within the fair intendment of the contract; would not, in truth, designate a "date of redemption"; and, therefore, could not hasten the maturity of the principal or cause interest to cease. All this seems obvious, if respect is to be accorded to the ordinary rules of construction and principles of law governing contracts.
The obligation of the bond was declared by this Court in Perry v. United States, 294 U.S. 330, 351, 353, 354, to be a pledge of the credit of the United States and an assurance of payment as stipulated which Congress had no power to withdraw or ignore. "The United States are as much bound by their contracts as are individuals. If they repudiate their obligations, it is as much repudiation, *366 with all the wrong and reproach that term implies, as it would be if the repudiator had been a State or a municipality or a citizen." "The power of the Congress to alter or repudiate the substance of its own engagements when it has borrowed money under the authority which the Constitution confers" was there denied. "The binding quality of the promise of the United States is of the essence of the credit which is so pledged. Having this power to authorize the issue of definite obligations for the payment of money borrowed, the Congress has not been vested with authority to alter or destroy those obligations. The fact that the United States may not be sued without its consent is a matter of procedure which does not affect the legal and binding character of its contracts. While the Congress is under no duty to provide remedies through the courts, the contractual obligation still exists and, despite infirmities of procedure, remains binding upon the conscience of the sovereign."
The right to redeem and pay the bond at face value after notice was reserved nothing else. Did the United States give notice of a bona fide purpose so to redeem and pay? If not they cannot properly claim to have exercised their option to mature the obligation. That they did not honestly comply with this necessary preliminary becomes obvious upon consideration of the circumstances and pertinent legislation.
There is no question here concerning the Government committing itself through notice sent out by the Secretary of the Treasury expressly or indirectly to a forbidden medium of payment. No question of an anticipatory breach of contract. The Government simply has not in good faith complied with a consideration precedent. It has never given notice of purpose to pay the obligation according to its terms. Its suggestion was to make payment of another kind.
The Circuit Court of Appeals well said
*367 "The notice calling the bond for payment was in the usual form; and there is no question but that it would have had the effect of stopping the running of interest and avoiding the coupons maturing after June 15, 1935, except for the legislation of Congress affecting the currency, which limited the power of the Secretary of the Treasury and must be read into the notice. At the time of the issuance of the bond the gold dollar was the standard of value in our monetary system and was defined by law as consisting of twenty-five and eight tenths grains of gold nine-tenths fine. Act of Mar. 14, 1900, c. 41, sec. 1, 31 Stat. 45, 31 U.S.C.A. 314. And the statutes provided for the use of gold coin as a medium of exchange. R.S. 3511. By Presidential Proclamation of January 31, 1934, issued under the act of May 12, 1933 (38 Stat. 52, 53), as amended by the act of January 30, 1934 (48 Stat. 342), the content of the dollar was reduced to 15-5/21 grains of gold nine-tenths fine; and, at the time of the publication of the notice calling the bond for payment, gold coin had been withdrawn from circulation, its possession had been prohibited under penalty, and payment in gold coin by the United States had been prohibited. 48 Stat. 337, 340. By joint resolution of June 5, 1933 (48 Stat. 112, 113), the payment of gold clause bonds in any legal tender currency `dollar for dollar' had been authorized; and it was paper currency based on the 15-5/21 grain dollar, and nothing else, that was offered in payment of gold clause bonds which were called for payment by the Treasury. The notice of redemption calling the bond in question for payment was equivalent, therefore, to a notice that the United States elected to redeem the bond in paper currency based on a 15-5/21 grain dollar, notwithstanding that it was payable in gold coin based on a 25-8/10 grain dollar and might be redeemed only at its face value. . . .
"It is manifest that when the bonds were payable in gold coin of the standard of value at the time of issue, *368 i.e., 25-8/10 grains of gold to the dollar, a proposal to redeem them in paper money based upon 15-5/21 grains of gold to the dollar was not a proposal to redeem them at face value; and a notice that the government would redeem them on such basis, which is what the notice in question means when considered as it must be in connection with the legislation binding upon the Secretary of the Treasury, was not such a notice as the bonds prescribed for the exercise of the option retained by the government."
We are not now concerned with the power of the United States to discharge obligations at maturity in depreciated currency or clipped coin. Did they cause respondent's bond to mature before the ultimate due date by proper exercise of the option reserved when they sent out a notice which in effect stated that payment would not be made as provided by the bond, but otherwise? The answer ought not to be difficult where men anxiously uphold the doctrine that a contractual obligation "remains binding upon the conscience of the sovereign" and reverently fix their gaze on the Eighth Commandment.
We concur in the views tersely expressed in the following paragraph excerpted from the opinion below
"No amount of argument can obscure the real situation. It is this: the government has promised to pay the bonds in question in gold coin of the standard of value prevailing in 1917. By their terms, it is permitted to redeem them only by paying them at their face value. It is proposing to redeem them, not by paying them at that face value but in paper money worth only about 59% thereof. The notice which it has issued means this and nothing else. Such a notice is not in accordance with the condition of redemption specified in the bond and consequently does not stop the running of interest or avoid the coupons."
The challenged judgment was correct and should be affirmed.
NOTES
[*] Together with No. 43, Dixie Terminal Co. v. United States, also on writ of certiorari to the Court of Claims; and No. 198, United States v. Machen, on writ of certiorari to the Circuit Court of Appeals for the Fourth Circuit.
[1] The Joint Resolution of Aug. 27, 1935 (49 Stat. 938, 939), withdrawing the consent of the United States to suit where the claimant asserted against it a right, privilege or power "upon any gold-clause securities of the United States or for interest thereon" makes an exception of any suit begun by January 1, 1936, as well as any proceeding "in which no claim is made for payment or credit in an amount in excess of the face or nominal value in dollars of the securities, coins or currencies of the United States involved in such proceeding." Petitioner has brought himself within each branch of the exception.
[2] The coupon reads as follows: "The United States of America will pay to bearer on October 15, 1934, at the Treasury Department, Washington, or at a designated agency, $1.07, being six months' interest then due on $50 Fourth Liberty Loan 4 1/4% Gold Bonds of 1933-1938 unless called for previous redemption."
[3] Important differences exist, and are not to be ignored, between the retirement of shares of stock (Sterling v. H.F. Watson Co., supra; Corbett v. McClintic-Marshall Corp., 17 Del. Ch. 165; 151 A. 218), and the accelerated payment of money obligations, and also between the acceleration of the obligations of the Government and those of other obligors. In the case of private obligations, a liability for interest survives the acceleration of the debt and continues until payment. In the case of Government obligations, interest does not continue after maturity (in the absence of statute or agreement) though payment is not made.
[1] The redemption clause is as follows:
"The principal and interest of this bond shall be payable in United States gold coin of the present standard of value, . . . All or any of the bonds of the series of which this is one may be redeemed and paid at the pleasure of the United States on or after June 15, 1932, or on any semi-annual interest payment date or dates, at the face value thereof and interest accrued at the date of redemption, on notice published at least three months prior to the redemption date, and published thereafter from time to time during said three months period as the Secretary of the Treasury shall direct. . . . From the date of redemption designated in any such notice interest on the bonds called for redemption shall cease, and all coupons thereon maturing after said date shall be void. . . ."
[*] This opinion was entitled in only one of the three cases, No. 198.
[1] Redeem 5. To buy off, take up or remove the obligation of, by payment or rendering of some consideration; as to redeem bank notes with coin.
Webster's New International Dictionary. | 01-03-2023 | 04-28-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/2229497/ | 883 N.E.2d 1154 (2005)
354 Ill. App. 3d 1172
PETERSON
v.
MAGEE.
No. 2-03-1046.
Appellate Court of Illinois, Second District.
January 20, 2005.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2405899/ | 441 S.W.2d 841 (1969)
MANDELL & WRIGHT, Petitioners,
v.
Enola M. THOMAS, Respondent.
No. B-1214.
Supreme Court of Texas.
April 16, 1969.
Rehearing Denied June 4, 1969.
*843 Barrow, Bland & Rehmet, David Bland, Houston, for petitioners.
Mack H. Hannah, III, Port Arthur, Newton B. Schwartz, Houston, for respondent.
McGEE, Justice.
Enola M. Thomas filed suit to rescind a contingent fee contract employing the law partnership of Mandell & Wright to prosecute the claim arising out of the death of her husband. Mrs. Thomas alternatively sought a judgment declaring the contract null and void or that Mandell & Wright be limited to a recovery in quantum meruit for services performed prior to the notification of discharge. Mandell & Wright also sought a declaratory judgment that the contract vested them with a one-third interest in any cause of action for the death of Joseph Thomas and a one-third interest in the proceeds of any settlement of the death claim.
Both parties moved for summary judgment. The trial court overruled the motion filed by Mrs. Thomas and entered summary judgment in favor of Mandell & Wright. The First Court of Civil Appeals at Houston reversed the judgment of the trial court and remanded the cause for trial. 433 S.W.2d 219.
We will review the testimony from Mrs. Thomas' deposition before discussing the points of error raised by the parties.
Early on the morning of October 24, 1966 Mrs. Thomas heard that her husband, Joseph, who was an employee aboard the "Gulfstag" had lost his life when the vessel sank. Surviving Mr. Thomas were his wife and seven children, one of whom was serving in the Armed Forces overseas. About noon of the same day Johnson, of the National Maritime Union, and Wright called at her home. Thomas had been a member of this union. Wright was introduced as the attorney for the union and was recommended to Mrs. Thomas. There was very little conversation on this occasion. Mrs. Thomas stated that her son would be home on leave soon and that she would take no action until he arrived.
Three days later her son did arrive home on emergency leave. On October 27, 1966, Patton, another representative of the union, and Wright called at her home. Patton explained benefits which would be received from the union and assured her that she need not worry about them. Wright asked the names and ages of the children and *844 wrote them down. He told her that his fee would be one-third of the claim and related that he represented others; but, she said that she did not see their names. Wright handed the contract to her in the presence of Patton and her son. She glanced over the contract but did not remember reading it. She could not remember whether or not her son read the contract. Her son was present at this time. She acknowledged that she signed the contract of October 27, 1966. After she signed the contract she remembers Wright saying, "Now we are going to represent you folks."
On November 2, 1966 Mrs. Thomas called Mack Hannah III and asked if she could change lawyers and was advised: "That is your privilege." She then telephoned Mandell & Wright and told them that she did not want them to represent her. She then went to Mr. Hannah's office and he dictated a letter, which she signed, notifying Mandell & Wright that they had been discharged. She then signed a one-third contingent fee contract with Hannah, and he called in Newton Schwartz as co-counsel. No reason for the discharge was stated in the letter to Mandell & Wright. Later, in her deposition, Mrs. Thomas gave as her reason for discharging Mandell & Wright the fact that she wanted to be represented alone and not with a group.
In reversing the summary judgment, the Court of Civil Appeals held that material issues of fact were raised concerning the identity of the claim in which Mandell & Wright were assigned an interest. Mandell & Wright assign error to this ruling and contend that the contract described with sufficient certainty the only claim to be prosecuted as a result of the death of Thomas at sea. We sustain this contention.
The claim is described in the contract as follows: "Mandell & Wright, a law partnership, are hereby employed to represent the undersigned in the prosecution of the following claim: Joseph Thomas (deceased husband) Gulfstag. * * * That said attorneys are authorized to sue for and recover all damages and compensation to which the undersigned may be entitled * * *."
The contract sufficiently identifies the claim arising out of the death of Thomas, because the only cause of action which Mrs. Thomas and her children possessed as the result of the death of her husband at sea is defined by Federal Statutes. The cause of action for the death of Thomas at sea can be asserted only by virtue of the Jones Act, 46 U.S.C.A. § 688, or the Death on the High Seas Act, 46 U.S. C.A. § 761 et seq. The Jones Act gives a cause of action to the "personal representative" of any seaman whose death is caused by personal injury in the course of his employment. The Death on the High Seas Act gives a cause of action to the "personal representative" of a person whose death is caused by wrongful act or negligence occurring on the high seas. Our State's Wrongful Death Act, as well as any common law remedy which Mrs. Thomas may have had for the death of her husband at sea, has been superseded by Federal Statute. Lindgren v. United States, 281 U.S. 38, 50 S. Ct. 207, 74 L. Ed. 686 (1929).
We stress the fact that the death action is vested by statute in the "personal representative." The right of Mrs. Thomas, as the surviving wife, to qualify as "personal representative" was fixed at the time she signed the contract, and this right could not have been pre-empted by any other person without her consent. V.A. T.S. Probate Code, Sec. 77. In this case Mrs. Thomas has not waived her right.
The "personal representative" who asserts a cause of action under the Jones Act or the Death on the High Seas Act is not suing for the benefit of the decedent's estate or as a representative thereof, nor does any amount which the "personal representative" may recover become an asset of the estate. The Probate Court has no interest in either the claim of damages recovered thereunder. Petition of Southern Steamship Co., 135 F. Supp. 358 (D.Del., *845 1955). The "personal representative" sues as trustee for the benefit of those for whom the statute authorizes recovery. Lindgren v. United States, supra; Hassan v. A. M. Landry & Son, Inc., 321 F.2d 570 (5th Cir., 1963); Stark v. Chicago, North Shore & Milwaukee Ry. Co., 203 F.2d 786 (7th Cir., 1953); Petition of Keystone Tankship Corporation, 237 F. Supp. 689 (W.D.Wash., 1965); Petition of Southern Steamship Co., 135 F. Supp. 358 (D.Del., 1935); Feliu v. Grace Line Inc., 97 F. Supp. 441 (S.D.N.Y., 1951); The Pan Two, 26 F. Supp. 990 (D.C.Md., 1939); Thornton v. Puget Sound Power & Light Co., 49 F.2d 347 (W.D.Wash., 1930).
The statutory beneficiaries in this case are the surviving wife and children. Wright recorded the names and ages of the children and then Mrs. Thomas signed the contract. We hold that under the undisputed facts of this case and the law applicable thereto, the claim in which Mandell & Wright were assigned an interest was identified and understood by the parties as a matter of law.
The Court of Civil Appeals reversed the summary judgment for the further reason that, in its opinion, the deposition testimony of Mrs. Thomas that she was "in shock" created a fact issue concerning her mental capacity at the time she signed the contract. Mandell & Wright contend that the summary judgment proof conclusively shows that Mrs. Thomas had the requisite mental capacity to execute the contract in question. This contention is sustained.
Mrs. Thomas had the mental capacity to contract if she appreciated the effect of what she was doing and understood the nature and consequences of her acts and the business she was transacting. Missouri-Pacific Ry. Co. v. Brazzil, 72 Tex. 233, 10 S.W. 403 (1888); 17 C.J.S. Contracts § 133(1)a; 13 Tex.Jur.2d, Contracts, § 10.
The record in this case conclusively demonstrates that Mrs. Thomas understood and agreed to the essential terms of the contract. Mrs. Thomas testified by deposition that she was "in shock" on October 24, 1966, which was the day she learned of her husband's death. That she was possibly "in shock" on that date is completely understandable and believable. But October 24, 1966 was not the date on which Mrs. Thomas signed the contract with Mandell & Wright. The contract was executed on October 27, 1966. Though Mrs. Thomas testified to being "in shock" on that date, her deposition testimony nevertheless conclusively shows that she understood the nature and consequences of her actions, for she in fact testified that on October 27, 1966 she did understand that she was employing lawyers to file suit for damages for the death of her husband and was agreeing to pay them one-third of any sum recovered. Her only complaint stated in the deposition was that she did not want to be represented in a group.
We hold that as a matter of law Mrs. Thomas possessed the mental capacity to contract at the time she executed the agreement with Mandell & Wright.
At the time Mrs. Thomas signed the contract in question, Mandell & Wright already represented another claimant by the name of James Hiott. The Court of Civil Appeals overruled the contention of Mrs. Thomas that a conflict of interest existed by reason of Mandell & Wright's representation of another claimant. We likewise overrule that contention and hold that as a matter of law, there was no conflict of interest at the time Mrs. Thomas signed the contract on October 27, 1966. While neither party has briefed the question of what effect such a conflict might have on the contractual rights and obligations of Mrs. Thomas, we think the question is immaterial in view of our holding under the record of this case that no conflict of interest existed between Mrs. Thomas and the other claimant. This is not to say that a conflict of interest could never arise in the representation of several claimants by a single attorney in a proceeding where liability is limited as provided in 46 U.S.C.A. *846 § 183 et seq. The rights and obligations of the attorney in that situation will be considered when the question is presented for decision.
Both of the claimants represented by Mandell & Wright were asserting claims against the owners of the Gulf stag, a common defendant. But that fact, standing alone, could not possibly lead to the inference that their respective interests were adverse and hostile, and that is what is required before the interests can be said to conflict. 7 C.J.S. Attorney and Client § 47. Mrs. Thomas' attorneys contend, however, that at the time she signed the contract there existed the probability that the shipowners would file a petition for limitation of liability as authorized by 46 U.S.C.A. § 183 et seq., and that the limitation fund established in that proceeding would in all probability be inadequate to satisfy all the claims against the fund. Mrs. Thomas urges that the claimant's respective interests necessarily conflicted due to the possibility, if not probability, that they would be seeking satisfaction out of a limited fund.
A petition to limit liability has actually been filed by the owners of the Gulf stag in the United States District Court for the Eastern District of Texas. Wright knew, when Mrs. Thomas signed the contract, that such a petition would probably be filed and that the limitation fund might well be inadequate to satisfy the many claims which would be asserted against the fund. We nevertheless hold that in representing James Hiott and Mrs. Thomas, Mandell & Wright did not represent conflicting interests within the meaning of Texas Canon of Ethics Number Six.
If the limitation fund exceeds the aggregate amount of all claims which are and which may be asserted against it, there cannot possibly be conflicting interests among the claimants. On the other hand, if the district court determines that the fund is inadequate to pay the total amount of damages which may be awarded, then the court will enforce a concursus and reduce proportionately the amount awarded each claimant. 46 U.S.C.A. § 184, Hartford Accident & Indemnity Co. of Hartford v. Southern Pacific Co., 273 U.S. 207, 47 S. Ct. 357, 71 L. Ed. 612 (1927); Maryland Casualty Co. v. Cushing, 347 U.S. 409, 74 S. Ct. 608, 98 L. Ed. 806 (1954); Petition of Texas Co., 213 F.2d 479 (2d Cir.1954); Petition of Trinidad Corporation, 229 F.2d 423 (2d Cir.1955).
We find no cases decisive of the exact point we are deciding here, but as illustrative of the cases which attest to the practice of multiple claimant representation, even when the limitation fund is inadequate to pay all the claims, we cite the case of Petition of Southern Steamship Company, 135 F. Supp. 358 (D.Del., 1955).
Since we have held that there was no conflict of interest at the time Mrs. Thomas signed the contract with Mandell & Wright, it is not necessary to discuss whether full disclosure of the conflict was made to Mrs. Thomas. It is, however, undisputed that Wright, at the time the contract was signed, told Mrs. Thomas that his firm was representing other claimants. Mrs. Thomas made no protest at that time, nor did she mention the firm's representation of Hiott at the time she actually discharged Mandell & Wright.
Mrs. Thomas contended in the Court of Civil Appeals, and renews the contention here, that the contract is void as being against public policy because it authorizes Mandell & Wright to compromise and settle the claim and to execute "* * * all necessary releases, receipts, acquittances, settlements discharges, notices or satisfaction of awards, judgments or recoveries of whatsoever character, and generally do all acts and things which in their judgment are essential to the handling of this matter."
This provision, which constitutes a general power of attorney with respect to the claim described in the contract, does not render the contract void. It simply accentuates the fiduciary relationship of attorney *847 and client and places upon the attorney, who occupies the position of a trustee, the very highest duty to act in accordance with that relationship. A breach of that duty to act in the utmost good faith would not leave Mrs. Thomas without a remedy. Thigpen v. Locke, 363 S.W.2d 247 (Tex.1962); Flanagan v. Pearson, 42 Tex. 1 (1874); Arrington v. Sneed, 18 Tex. 135 (1856); Bell v. Ramirez, 299 S.W. 655 (Tex.Civ.App., 1927, writ ref'd); Jinks v. Whitaker, 195 S.W.2d 814 (Tex.Civ. App., 1946, writ ref'd n.r.e.).
When, as in this case, an attorney has been expressly authorized to bind his client by a compromise or settlement of the claim, such a grant of power is valid in the absence of fraud of the attorney. Edge v. Business Men's Assurance Co. of America, 15 S.W.2d 44 (Tex.Civ.App., 1929, writ dism'd); 7 C.J.S. Attorney and Client § 105.
The summary judgment proof conclusively shows a complete lack of fraud or misrepresentation on the part of Mandell & Wright or the union representatives.
We reject respondent's contention that Mandell & Wright's recovery should be limited to one of quantum meruit for the value of work performed between the date of employment and date of discharge. Her refusal to cooperate in their prosecution of the claim made it impossible for them to proceed further. In Texas, when the client, without good cause, discharges an attorney before he has completed his work, the attorney may recover on the contract for the amount of his compensation. Myers v. Crockett, 14 Tex. 257 (1855); White v. Burch, 19 S.W.2d 404 (Tex.Civ. App., 1929, writ ref'd); White v. Burch, 33 S.W.2d 512 (Tex.Civ.App., 1930, writ ref'd); Cottle County v. McClintock & Robertson, 150 S.W.2d 134 (Tex.Civ.App., 1941, writ dism'd, judgment correct).
The trial court's judgment awarded Mandell & Wright an undivided one-third interest in "* * * all claims, actions, demands, or causes of action arising by operation of law for damages or other amounts due and owing to plaintiff, Mrs. Joseph (Enola M.) Thomas, or the Estate of Joseph Thomas, deceased, husband of plaintiff, because of the death of said Joseph Thomas." We hold that Mandell & Wright's contract embraces only the statutory claim arising out of the death of Thomas. This claim has been settled and the settlement fund is now on deposit with the federal district court in Beaumont in Civil Action Number 5343.
The judgment of the Court of Civil Appeals is reversed and that of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2411524/ | 534 S.W.2d 737 (1976)
Elizabeth HOWELL, Appellant,
v.
Bruce F. KELLY, Appellee.
No. 16637.
Court of Civil Appeals of Texas, Houston (1st Dist.).
March 4, 1976.
*738 Carl L. Ray, Bryan D. Coleman, Houston, for appellant.
Carl Douglas Haggard, Houston, for appellee.
COLEMAN, Chief Justice.
This is a suit by an attorney to recover in quantum meruit for the legal services rendered to the defendant. The service were rendered pursuant to a contingent fee agreement, which was terminated by the client. The trial court entered a judgment on a jury verdict for the attorney. We affirm.
No statement of facts was brought forward to this court. In answer to the special issues submitted, the jury found that the client terminated the services of the attorney without the attorney's consent and that the attorney should recover the sum of $800.00 for the legal services rendered prior to the termination, as well as $250.00 as reasonable attorney's fees in the present case. The jury failed to find that the client terminated the employment without just cause. It is the client's position that the last mentioned finding of the jury, as a matter of law, requires a judgment that the attorney take nothing by his suit. The further contention is made that this negative finding is in conflict with the finding that the attorney should recover the sum of $800.00 for the legal services rendered.
*739 The failure of the jury to find that the client discharged her attorney without just cause does not constitute a finding that the client discharged her attorney with just cause. The issue as submitted placed the burden of proof on the attorney to prove that he had been discharged without just cause, and he failed to carry the burden of proof. The issue facing this court, therefore, is whether it was necessary in this case that the attorney present evidence and secure a finding that his discharge was without just cause in order to sustain his cause of action, or whether the question of just cause is a defensive issue as to which the client has the burden of pleading and proof. The plaintiff alleged that he was discharged without just cause. The defendant filed an answer containing a general denial, but did not raise any affirmative defenses.
In a case where an attorney had been employed to recover certain land and was discharged by his client before the case was tried, the court upheld the right of the attorney to recover for services rendered prior to the termination of the contract by the client on the basis of quantum meruit. Thompson v. Smith, 248 S.W. 1070 (Comm. of App., Sec. B, 1923, judgment adopted). There the court said:
"... Smith had no right to discharge him or prevent the completion of those services without fault on Thompson's part. He had rendered services to Smith on the faith of a contract. It was not intended by either party that those services should be gratuitous. The law implies a promise on Smith's part to pay to Thompson the reasonable value of services already rendered by him when Smith discharged him and prevented him from further services under the written contract."
In Mandell & Wright v. Thomas, 441 S.W.2d 841 (Tex.1969), the Supreme Court of Texas sustained a trial court's summary judgment awarding attorneys a full recovery on their contingent fee contract with the "personal representative" asserting a cause of action under the Jones Act or the Death on the High Seas Act. The client testified by deposition that she discharged her lawyer because she wanted to be represented alone and not with a group. The Supreme Court stated:
"We reject respondent's contention that Mandell & Wright's recovery should be limited to one of quantum meruit for the value of the work performed between the date of employment and the date of discharge. Her refusal to cooperate in their prosecution of the claim made it impossible for them to proceed further. In Texas, when the client, without good cause, discharges an attorney before he has completed his work, the attorney may recover on the contract for the amount of his compensation ..."
In some jurisdictions an attorney having a contingent fee contract with his client, who has been discharged for sufficient cause, is allowed to recover the reasonable value of the services he has rendered up to the time of discharge. Fracasse v. Brent, 6 Cal. 3d 784, 100 Cal. Rptr. 385, 494 P.2d 9 (1972); Willis & Conner v. Turner, 25 S.W.2d 642 (Tex.Civ.App.Waco, 1930, writ dism'd); Phelps v. Elgin, Joliet & Eastern Ry. Co., 70 Ill.App.2d 89, 217 N.E.2d 519 (1st Dist. 1966); Guilbeau v. Firemen's Fund Ins. Co., 293 So. 2d 216 (La.App., 3rd Cir., 1974). In other jurisdictions, however, an attorney who is discharged for cause has no right to recover a fee and may be forced to remit a retainer paid in advance. Coclin Tobacco Co. v. Griswell, 408 F.2d 1338 (1 Cir., 1969).
Since an attorney under a contingent fee contract is permitted to recover on the contract in Texas, the usual rules of contract law are applicable. A party who has been damaged by a breach of contract has an election to pursue any of three remedies. He may treat the contract as rescinded and may recover upon a quantum meruit so far as he has performed; or he may keep the contract alive, for the benefit of both parties, being at all times ready and able to *740 perform; or, third, he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have received if he had not been prevented from performing. Restatement, Contracts, §§ 326, 327, 347; Restatement 2d Agency, §§ 453, 455; 11 Williston on Contracts, 3rd Ed. § 1358.
It is the burden of the plaintiff to establish the existence of the contract sued on; that he was ready and able to perform the contract; the happening of a condition on which liability is based, or that the condition would have happened if the promissor had abided by the terms of the contract; a breach of the contract; and the amount due him under the contract. The burden of proving the happening of a contingency which, by the terms of the contract, would discharge the party from liability, or any default or refusal to perform on the part of the plaintiff that would excuse the performance by the defendant, is on the party who seeks to avoid the contract or excuse a failure to perform it on that ground. 13 Tex.Jur.2d, Contracts, Sec. 390. As a general rule there must be specific pleading of excuses for nonperformance. 13 Tex. Jur.2d, Contracts, Sec. 385.
Once the plaintiff attorney has proven a contract to provide legal services to the defendant, and that the defendant has discharged him, he has established a prima facie case for the recovery of the resulting damage. Meade v. Rutledge, 11 Tex. 44 (1853); Hassell v. Nutt, 14 Tex. 260 (1855); Hearne v. Garrett, 49 Tex. 619 (1881); Beaumont v. J. H. Hamblen & Son, 190 Ark. 630, 81 S.W.2d 24 (1935).
The defendant failed to plead grounds justifying the discharge of the plaintiff, her attorney. There is no statement of facts. We must presume that the evidence supports the judgment of the trial court. While the jury failed to find that the employment contract was terminated without just cause, the answer made by the jury does not establish that the termination was with just cause. Since the burden of establishing just cause for the termination of the employment contract was on the defendant, the trial court properly entered a judgment for the plaintiff on the jury's verdict.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2451035/ | 522 S.W.2d 886 (1975)
E. C. HEDDIN et ux., Petitioners,
v.
DELHI GAS PIPELINE COMPANY, Respondent.
No. B-4760.
Supreme Court of Texas.
May 14, 1975.
*887 Elliott & Bass, Clyde Elliott, Jr., Canton, Wynne & Wynne, Gordon R. Wynne, Wills Point, for petitioners.
Jackson, Walker, Winstead, Cantwell & Miller, Jack Pew, Jr., Dallas, for respondent.
SAM D. JOHNSON, Justice.
Delhi Gas Pipeline Company brought this suit against E. C. Heddin and wife, Lillie Belle Heddin, to condemn a portion of their land for the purpose of laying a gas transmission pipeline. At trial the Heddins (landowners) recovered substantial damages for injury to their property by reason of the condemnation. Delhi Gas appealed; the court of civil appeals reversed and remanded the case for a new trial. 509 S.W.2d 954. We affirm the judgment of the court of civil appeals.
The landowners' property is an almost square-shaped, eighty-acre tract of land in Van Zandt County, Texas. The easement runs generally north to south through the western edge of the property; it is fifty feet wide, 1,644 feet long and totals approximately 1.5 acres. The gas pipeline is 12¾ inches in outside diameter and is buried thirty-six inches under the ground. This pipeline carries a gas which contains approximately 3.2 percent hydrogen sulfide, a lethal poison, at 1,180 pounds of pressure per square inch. As stated by the court of civil appeals, "[i]t is the dangerous nature of the contents of this line and the fear created by its presence on the land which generate the entire controversy of this appeal." 509 S.W.2d 954 at 955.
The landowners sought to prove that the market value of their property was decreased substantially by reason of fear in the minds of the buying public of the possible escape of this type of gas from gas transmission pipelines. Though the date of taking was December 8, 1970, the trial court, over objection, permitted the introduction of evidence of damages caused by a rupture in another gas transmission pipeline on July 5, 1971, almost eight months after the date of taking. This rupture occurred approximately two miles away in a gas transmission pipeline owned by Pan American.
In answer to special issues the jury found: (1) before the taking the per-acre value of the 1.5 acres actually taken for the easement was $400; (2) after the taking the per-acre value of the 1.5 acres actually taken for the easement was $50; (3) before the taking the per-acre value of the 78.5-acre remainder was $400; and (4) after the taking the per-acre value of the 78.5-acre remainder was $275. Upon this *888 verdict the trial court rendered judgment for the landowners in the amount of $10,287.50, less deposits.
On appeal Delhi alleged that the large diminution found by the jury in the market value of the landowners' remainder stemmed from error on the part of the trial court in admitting evidence of the Pan American rupture. The court of civil appeals agreed with Delhi's contention that evidence of the Pan American rupture was irrelevant to the question of the market value of the landowners' property on the date of taking. The basis for that court's decision was that "an event which occurred approximately eight months later could not affect the market value of the Heddin property determined as of the 8th day of December, 1970." 509 S.W.2d 954 at 957. The court of civil appeals held that admission of evidence of the Pan American rupture was reversible error and remanded the cause for a new trial.
For reasons which will hereinafter appear we affirm that court's judgment of reversal and remand to the trial court. Since this case must be retried, it is incumbent upon this court, as a guideline for trying this and other similar cases, to set out a definitive statement of its position regarding the relevance of evidence of ruptures occurring subsequent to the date of taking.
It is clear that compensation for land taken by eminent domain is measured by the market value of the land at the time of the taking. Tex.Const. art. 1, § 17, Vernon's Ann.St.; Vernon's Tex.Rev.Civ. Stat.Ann. art. 3268; City of Fort Worth v. Corbin, 504 S.W.2d 828 (Tex.1974); Fuller v. State, 461 S.W.2d 595 (Tex.1970). It is equally clear that fear in the minds of the buying public on the date of taking is relevant to the proof of damages when the following elements appear:
1. That there is a basis in reason or experience for the fear;
2. That such fear enters into the calculations of persons who deal in the buying and selling of similar property; and
3. Depreciation of market value because of the existence of such fear.
Buzzard v. Mapco, Inc., 499 S.W.2d 352 (Tex.Civ.App.Amarillo 1973, writ ref'd n. r. e.); Delhi Gas Pipeline Company v. Reid, 488 S.W.2d 612 (Tex.Civ.App. Waco 1972, writ ref'd n. r. e.); Gulledge v. Texas Gas Transmission Corp., 256 S.W.2d 349 (Ky.1952). See Delhi Gas Pipeline Company v. Mangum, 507 S.W.2d 631 (Tex.Civ.App.Tyler 1974, no writ); 4A Nichols, Eminent Domain § 14.241(1) (1971); Annot., 38 A.L.R. 2d 788, 801.
To establish that there is a basis in reason or experience for the fear, it is incumbent upon the landowners to show either an actual danger forming the basis of such fear or that the fear is reasonable, whether or not based upon actual experience. Reduction in market value due to fear of an unfounded danger is not recoverable. Northeastern Gas Transmission Co. v. Lapham, 19 Conn. Super. Ct. 468, 117 A.2d 441 (1955); East St. Louis Light & Power Co. v. Cohen, 333 Ill. 218, 164 N.E. 182 (1928); Yagel v. Kansas Gas & Electric Co., 131 Kan. 267, 291 P. 768 (1930); Kentucky Hydro Electric Co. v. Woodard, 216 Ky. 618, 287 S.W. 985 (1926); Onorato Brothers v. Massachusetts Turnpike Auth., 336 Mass. 54, 142 N.E.2d 389 (1957); Johnson v. Airport Authority of City of Omaha, 173 Neb. 801, 115 N.W.2d 426 (1962). See United States v. Borth, 266 F.2d 521 (6th Cir. 1959); 4A Nichols, supra, §§ 14.241 et seq. This rule is designed to exclude consideration only of those few situations in which the danger underlying the fear finds its basis in neither reason nor experience but is predicated rather on fancy, delusion or imagination.
Proof of specific instances in which similar pipelines have developed *889 ruptures under similar circumstances is directly relevant to the question of whether there is an actual danger underlying assertions that fear adversely affected market value. Evidence of specific similar ruptures occurring prior to the date of taking would of course be admissible to substantiate allegations that fear of an actual danger from the pipeline reduced market value. The question remains, however, whether evidence of a rupture subsequent to the date of taking is wholly precluded and precluded solely because it occurred after the date of taking.
The general rule that compensation for land taken by eminent domain is measured by its market value at the time of taking would appear to require exclusion of evidence of all ruptures occurring after the date of taking. A rupture occurring subsequent to the date of taking could not have had an effect on market value as of the date of taking. However, we believe evidence of a subsequent rupture is admissible under certain limited circumstances and for a properly limited purpose. That is, when the condemnor asserts the pipeline is free from danger, or when the condemnor otherwise takes the position that fear of a danger from the pipeline is not a factor affecting market value, the landowner may, in rebuttal, introduce evidence of specific ruptures in the same or a closely similar pipeline.
In the instant case evidence of the subsequent Pan American rupture was offered by the landowners and admitted by the trial court generally as a factor affecting market value before condemnor's appraisal witnesses testified on the subject. More specifically, the landowners' evidence of the subsequent rupture of the similar pipeline was not in rebuttal to the posture of the condemnor that the proposed pipeline was not dangerous. At the time the landowners offered evidence of the subsequent rupture, Delhi objected on the grounds that it occurred after the date of taking and could have no relevance to the market value of the landowners' property as of that date. Under these circumstances the court of civil appeals properly held the evidence was inadmissible.[1]
Moreover, the damaging nature of the testimony concerning the Pan American rupture is clearly evident from the record. Three witnesses were called by the landowners to establish the circumstances surrounding the Pan American rupture. These witnesses were allowed to give detailed accounts of the damage from the rupture and of the fact that it had killed three pets and ten head of cattle belonging to the landowner on whose property the pipeline was buried. Due to the impressive nature of the improperly admitted testimony concerning the Pan American rupture, the court of civil appeals properly reversed the judgment of the trial court and remanded the case for new trial under Rule 434, Texas Rules of civil Procedure.
Even if the evidence of the Pan American rupture had been offered for the limited purpose of rebuttal, which it was not, we would still be compelled under this record to affirm the court of civil appeals. This conclusion is inescapable when the method used to illustrate the damage caused by the Pan American rupture is examined. Over strenuous objections, a number of photographs of the carcasses of the cattle and the pets belonging to the landowner in the Pan American case were introduced. Although photographic reproductions can be beneficial to all parties in the trial of a lawsuit, those that are merely calculated to arouse the sympathy, prejudice or passion of the jury and do not serve to illustrate disputed issues or aid the jury in its understanding of the case *890 should not be admitted. Southern Transp. Co. v. Adams, 141 S.W.2d 739 (Tex.Civ. App.Beaumont 1940, writ dism'd jdgmt cor.); Ryan v. United Parcel Service, 205 F.2d 362 (2d Cir. 1953); Haddad v. Kuriger, 437 S.W.2d 524 (Ky.1968); Armentrout v. Hughes, 247 N.C. 631, 101 S.E.2d 793 (1958); 29 Am.Jur.2d Evidence § 787. See Annot., 73 A.L.R. 2d 769, 841. The photographs of the dead animals introduced on behalf of the landowners here had no relevance to the disputed issues; they were not calculated to aid the jury in its understanding of the case. Indeed, it must be concluded that they were shown not for the purpose of establishing the dangerousness of the pipeline but rather for their shock valuein the words of counsel for the landowners, "for further knowledge of what he [the landowner in the Pan American case] really saw out there." These photographs must be construed as an attempt to appeal to the prejudice and passion of the jury. Admission of these highly inflammatory and irrelevant photographs was such error as was reasonably calculated to cause and probably did cause the rendition of an improper judgment.
The judgment of the court of civil appeals is affirmed.
Concurring opinion by REAVLEY, J., in which WALKER, J., joins.
REAVLEY, Justice (concurring).
The Court of Civil Appeals has accurately disposed of the appeal. 509 S.W.2d 954. It may be that we will someday be faced with a case where we will not require the condemnor to pay for all of the actual consequences of the taking and the facility to be constructedthe reason for that limitation on condemnee's recovery being that the fear of the facility is a product of wild fancy. See 1 Orgel, Valuation Under Eminent Domain § 61 [1953]. However, imaginary danger is certainly not in the present case. The parties might debate the extent of the danger, though they should not be allowed to do so. But no one can find any reason to argue that fear of a high pressure gas pipeline is based on sheer ignorance or is a reaction to an imaginary danger.
Condemnor's expert witnesses testified that the market value of the remainder was not diminished by the taking. The majority opinion apparently regards the offer of this testimony by the condemnor as taking "the position that fear of a danger from the pipeline is not a factor affecting market value." The door is then opened to try out questions of the similarity of pipelines and to make proof of subsequent disasters. I submit that the trial thus becomes needlessly more complicated and confusing. The purpose of the introduction of evidence of the subsequent event may be limited, by condemnor's offer and by the court's instruction to the jury, but the jurors may have great difficulty in confining their thoughts accordingly. Since that proof could be highly prejudicial to the condemnor, and since there is no issue that requires its consideration for any purpose necessary to the case of the condemnee, evidence of the subsequent disaster should be excluded.
WALKER, J., joins in this concurring opinion.
NOTES
[1] We expressly reserve any holding as to whether liability for damages incurred from a rupture in the pipeline located on the land involved in the condemnation should be adjudicated in the condemnation proceeding. See Glade v. Dietert, 156 Tex. 382, 295 S.W.2d 642 (1956). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2382598/ | 238 Pa. Super. 386 (1976)
Commonwealth
v.
Conyers, Appellant.
Superior Court of Pennsylvania.
Submitted June 16, 1975.
February 2, 1976.
*387 Before WATKINS, P.J., JACOBS, HOFFMAN, CERCONE, PRICE, VAN DER VOORT, and SPAETH, JJ.
Joseph F. Castellino, for appellant.
William J. Perrone, Assistant District Attorney, and Patrick J. Toole, Jr., District Attorney, for Commonwealth, appellee.
*388 OPINION BY PRICE, J., February 2, 1976:
Appellant was tried and convicted of defiant trespass by a judge sitting without a jury. Post-trial motions were denied and appellant was sentenced to 6 to 12 months in the Luzerne County Prison. On appeal, appellant argues three alleged points of error, all without merit. We will, therefore, affirm the judgment of sentence of the lower court.
The background of this case is most unusual. Appellant and Adrienne McGlynn had been engaged in an amorous relationship since 1970. They had on various occasions lived together and at other times their relationship was stormy. The present unpleasantries stem from an altercation which occurred on March 4, 1970.
Appellant came to Miss McGlynn's house at around 4:00 p.m. to see her. The record reveals that the parties had spent the previous evening together and that appellant was not anticipating the problems which were to confront him. Appellant arrived at Miss McGlynn's house on March 4, but did not receive the warm, loving welcome he expected. Quite the contrary, he was told by Miss McGlynn to go away and leave her alone.
Appellant persisted in his endeavor to gain entrance to the house, and Miss McGlynn persisted in her admonitions that he was to leave and not attempt to enter the house. Appellant, at a loss to understand the sudden coolness on the part of his paramour, became more determined to gain admittance and confront Miss McGlynn. Appellant decided to make the final assault on the rear door. However, this course of action nearly proved fatal. Appellant began to pound on the back door and, in spite of adamant warnings by Miss McGlynn, broke in the door and started to enter the house.
Miss McGlynn defended her home in a most emphatic manner; i.e., she shot appellant once in the "flank" and *389 twice in the "hindquarters."[1] Appellant, not mortally wounded, maintained his composure and took the gun in order to avoid further gunplay. The police and an ambulance were summoned, appellant was charged with defiant trespass, and Miss McGlynn was charged with aggravated assault. In a magnificient display of chivalry, appellant refused to testify against Miss McGlynn. She, however, did not share the same reluctance to take the stand, and appellant was convicted of a misdemeanor of the third degree.
The crime of defiant trespass occurs when a person remains in a place where he is not privileged to remain after notice of trespass is given.[2] Appellant argues in his first two points of alleged error that the Commonwealth failed to establish either scienter or the necessary mens rea to sustain the finding of guilt. We find no merit to this argument.
Although appellant was a frequent visitor and even resided with Miss McGlynn on occasion, there is no doubt that the house belonged to Miss McGlynn and her brothers and that appellant did not own the house nor did he reside in it on the date in question. Miss McGlynn repeatedly informed appellant that he was to leave the *390 premises and was not to enter the house. In the face of stern warnings, communicated to appellant, he attempted to forcibly enter the house. Appellant deliberately carried out this course of behavior knowing that he was not privileged to remain on the premises. While he certainly did not expect to be shot for it, we must conclude he knew he had no right to break into the house.
Finally, appellant argues that Miss McGlynn was his common law wife and as such she should not have been permitted to testify against him. The existence of a common law marriage was not raised until after the trial and the actual existence of such a relationship is not at all obvious. This situation was directly covered by Commonwealth v. Stots, 436 Pa. 555, 261 A.2d 577 (1970). Our Supreme Court there held that the competency of a witness to testify must be raised at trial or it will be waived, and that only in cases where there is no question that the parties are married is spousal incompetency not waivable. Here there was no evidence indicating a common law marriage, and the trial judge was under no duty to raise the issue. We must conclude that appellant has waived this point.[3]
The Judgment of Sentence is affirmed.
SPAETH, J., concurs in the result.
HOFFMAN, J., dissents.
NOTES
[1] There is some confusion as to how many times appellant was shot. The police testified that there were three bullet holes in the "hindquarters" and one in the "flank," but Miss McGlynn testified she shot appellant three times.
[2] 18 Pa.C.S. § 3503(b) provides:
"(1) A person commits an offense if, knowing that he is not licensed or privileged to do so, he enters or remains in any place as to which notice against trespass is given by:
(i) actual communication to the actor;
. . .
(2) An offense under this subsection constitutes a misdemeanor of the third degree if the offender defies an order to leave personally communicated to him by the owner of the premises or other authorized person. Otherwise, it is a summary offense."
[3] As a final aside to this case, appellant and Miss McGlynn were married sometime after trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3769732/ | {¶ 22} I concur with the majority's decision. I write separately only to distinguish my prior decision in Rohr v. Cincinnati Ins. Co., Stark App. No. 2001CA00237, 2002-Ohio-1583, from the facts of the case sub judice.
{¶ 23} Rohr involved an accident and subsequent settlement with the tortfeasor and his carrier prior to the Ohio Supreme Court's decision in Scott-Pontzer. I concluded the notice and subrogation requirements may not be imputed where coverage results by operation of law as the coverage was not intended by the parties and was not the subject of any negotiated restrictions or conditions. Id. at 9.
{¶ 24} However, in the case currently before the court, I agree with the majority because the accident occurred only a few months prior to the Ohio Supreme Court's announcement of the Scott-Pontzer decision and the releases were executed almost two years after the Supreme Court's decision. Therefore, it is appropriate to apply the provisions of the contract of insurance concerning notice and subrogation requirements since settlement occurred subsequent to the Supreme Court's decision inScott-Pontzer, even though coverage applied by operation of law, as Appellee Ross was aware that he had a Scott-Pontzer claim. | 01-03-2023 | 07-06-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1862564/ | 603 So. 2d 238 (1992)
William D. ALLEN, D.D.S.
v.
The LOUISIANA STATE BOARD OF DENTISTRY.
No. 91-CA-1258.
Court of Appeal of Louisiana, Fourth Circuit.
May 28, 1992.
Rehearing Denied September 17, 1992.
*239 Guy Wooton, John C. Saunders, Jr., Wooton & Stakelum, APC, Brian M. Begue, New Orleans, for defendant/appellee.
Paul R. Baier, Baton Rouge, for plaintiff/appellant.
Before LOBRANO, WARD and ARMSTRONG, JJ.
LOBRANO, Judge.
This appeal arises from a judgment in favor of defendant-appellee, the Louisiana State Board of Dentistry, dismissing the Petition for Judicial Review and Injunctive Relief filed by plaintiff-appellant, Dr. William D. Allen.
FACTS AND PROCEDURAL HISTORY:
In November of 1985, the Louisiana State Board of Dentistry (the Board) filed formal charges against Dr. William D. Allen for numerous violations of the Louisiana Dental Practice Act, Louisiana Revised Statute 37:751, et seq. A total of seven (7) *240 charges were filed consisting of forty-five (45) individual counts. In due time, an administrative hearing was convened on February 21, 1986. The hearing lasted four (4) days. At the close of the hearing on February 24, 1986, the Board disciplinary committee took the matter under advisement. On March 24, 1986, the Board rendered its decision finding Dr. Allen in violation of twenty-seven (27) of the forty-five (45) counts. The eighteen (18) remaining counts were either voluntarily dismissed by the committee or by Guy Wootan, counsel for the Board. The committee suspended Dr. Allen's license to practice dentistry for ten (10) years and placed him on probation for an additional ten (10) years. In addition, he was ordered to pay twenty-five thousand five hundred dollars ($25,500.00) in fines and costs of sixty-one thousand four hundred and seventy eight dollars and nineteen cents ($61,478.19).
On March 27, 1986, Dr. Allen filed a Petition for Judicial Review and Stay Order in the Civil District Court for the Parish of Orleans. The district court remanded the matter back to the Board for a limited rehearing which was held on June 2, 1986. At the conclusion of the rehearing, the committee affirmed its prior decision in all respects. Subsequently, Dr. Allen filed several Petitions For Judicial Review in the district court, as well as supervisory writs in this Court and the Supreme Court alleging various violations by the Board including Wootan's involvement in the Board's decision. The Supreme Court granted writs and directed the district court to take evidence concerning the issue of Wootan's alleged involvement in the Board's decision. The trial court subsequently conducted a hearing on Dr. Allen's various assertions as well as the involvement of Wootan in the administrative proceedings. The court found "not a scintilla of evidence" to support the allegations against Wootan. However the court reversed six (6) of the Board's finding of misconduct. The fine was reduced to nineteen thousand five hundred dollars ($19,500.00). From that judgment Dr. Allen appealed.
In Allen v. Louisiana State Board of Dentistry, 531 So. 2d 787 (La.App. 4th Cir. 1988), this Court reversed three (3) additional charges and further reduced the fine to sixteen thousand five hundred dollars ($16,500.00). In all other respects the trial court judgment was affirmed, including the district court's finding that there was no evidence to support the allegations against Wootan.
The Supreme Court granted certiorari to consider various statutory and constitutional due process questions raised by Dr. Allen, particularly those dealing with prosecutorial (Wootan's) involvement in the decision making process.[1] That court ultimately held that Wootan's "ex parte" drafting of the findings of the committee constituted reversible error and remanded the case for a hearing "de novo". Allen v. Louisiana State Board of Dentistry, 543 So. 2d 908 (La.1989).
On June 29, 1989, pursuant to a timely application for rehearing, the high court modified its original decree to read as follows:
"The decision of the Louisiana State Board of Dentistry suspending the license of Dr. William D. Allen for ten years and imposing fines and costs is reversed. The case is remanded to the Board for a new hearing on the existing factual record before a committee composed of dentists who have had no involvement with the present case. Furthermore, both parties shall have the opportunity to present additional evidence to supplement the original record. The new committee may, at its discretion, permit the recall of any witnesses if it deems this necessary to pass on their credibility." Allen v. Louisiana State Board of Dentistry, 543 So. 2d 908 at p. 917 (La.1989) (emphasis added)
On May 22, 1990, the committee issued an administrative order informing Dr. Allen of the charges and specifications the committee found to be still viable and set *241 the rehearing date for August 4, 1990.[2]
On July 5, 1990, the committee issued an additional administrative order correcting a clerical error[3] and finding that Dr. Allen's objection to the composition of the newly appointed committee was not properly presented by affidavit as required by Louisiana Revised Statute 49:960(B).
On July 10, 1990, Dr. Allen filed the required affidavit in which he objected to Drs. James P. Tomaszewski, Ralph B. King, Jr. and James R. Long as members of the new committee. Dr. Allen asserted that all three doctors had been previously involved in his case and should be recused as per the Supreme Court's order. In addition, Dr. Allen objected to the inclusion of charges and specifications that were found not proven or reversed by the trial court and this Court. On this same day, Dr. Allen also filed a Petition for Judicial Review and Injunctive Relief in the civil district court for the Parish of Orleans.
On July 20, 1990, following a preliminary hearing, the trial court ordered the Board to meet prior to September 1, 1990 to decide the recusal motion filed by Dr. Allen. The August 4, 1990 administrative hearing was cancelled pending the Board's decision on the recusal issue as well as other issues raised by Dr. Allen in his Petition for Judicial Review.
In the interim, the Board filed with the Supreme Court a Motion for Clarification of Decree Under Original Jurisdiction and For Stay of District Court Proceedings. It was the Board's position that since a resolution of the issues raised by Dr. Allen depended in large measure upon an interpretation of the Supreme Court's decree, only the Supreme Court had jurisdiction to interpret it. This motion, however, was denied by the high court on July 19, 1990.[4]
Thereafter, on August 25, 1990, the Board ordered the recusal of the newly appointed committee in order to avoid the appearance of unfairness. The Board immediately notified Governor Roemer of this decision and requested that he appoint four dentists not residing or working in the same congressional district as Dr. Allen and who had no prior involvement with the matter to sit as pro tem members of the committee in accordance with Louisiana Revised Statute 49:960(B). Four new committee members were appointed as requested. No new rehearing date has been set pending the outcome of this appeal.
On February 4, 1991, a preliminary hearing was held in the district court on the Petition for Judicial Review and Injunctive Relief. No evidence was taken. Thereafter, on February 25, 1991, the trial court rendered judgment denying and dismissing Dr. Allen's Petition and authorized the Board to proceed with the administrative hearing ordered by the Supreme Court. No reasons for judgment were given by the trial court. Dr. Allen appeals that judgment asserting:
1) The trial court erred by denying the Petition and Prayer for Declaratory Relief Regarding the Charges found "Not Proven" at the first administrative hearing or reversed on appeal for insufficient evidence.
2) The trial court erred in not awarding attorneys fees and expenses pursuant to Louisiana Revised Statutes 49:965.1.
These assignments require us to interpret the meaning of the Supreme Court's decree.
ASSIGNMENT OF ERROR 1:
Dr. Allen asserts that the prohibition against double jeopardy, due process and res judicata precludes the newly appointed committee from requiring him to defend himself against charges found "not proven" *242 by the prior committee[5] and charges reversed by the district court[6] and this Court.[7] We disagree.
Double Jeopardy
Article I, Section 15 of the Louisiana Constitution provides:
"Prosecution of a felony shall be initiated by indictment or information, but no person shall be held to answer for a capital crime or a crime punishable by life imprisonment except on indictment by a grand jury. No person shall be twice placed in jeopardy for the same offense, except on his application for a new trial, when a mistrial is declared, or when a motion in arrest of judgment is sustained."
Dr. Allen argues that double jeopardy is applicable because the proceedings against him are "quasi criminal in nature." In support he cites Gulf States Utilities v. Louisiana Public Service Commission, 578 So. 2d 71 (La.1991), cert den. ___ U.S. ___, 112 S. Ct. 637, 116 L. Ed. 2d 655 (1991) and Labrosse v. St. Bernard Parish School Board, 483 So. 2d 1253 (La.App. 4th Cir.1986). We find neither case controlling, nor supportive of the assertion that double jeopardy is applicable to the instant administrative proceeding.
In Gulf States the court, in discussing a due process argument, made the comment that Allen v. Louisiana State Board of Dentistry, supra, "concerned a quasi-criminal prosecution...." In our opinion that statement is dicta and does not establish a rule of law which classifies license revocation proceedings as criminal in nature. The holding in Labrosse concerned the basic principle that due process requires notice of the specific charges and a chance to be heard in a trial of those charges. Bradley R. Labrosse, Jr. had been expelled from school for possession of marijuana. The court did not characterize all administrative proceedings as quasi criminal.
We find that the holding in Louisiana State Board of Medical Examiners v. Booth, 76 So. 2d 15 (La.App. 1st Cir.1954) is the better characterization of administrative proceedings involving the denial of practicing a profession. In that case the court, citing language from United States ex rel Marcus v. Hess, 317 U.S. 537, 63 S. Ct. 379, 87 L. Ed. 443 (1943), stated:
"Only actions intended to authorize criminal punishment to vindicate public justice... subject defendant to `jeopardy' within meaning of `double jeopardy' clause." at p. 19.
Following this principle the Booth court held that injunction proceedings brought pursuant to violations of Louisiana law prohibiting medical practice without a license were civil in nature and not subject to pleas of double jeopardy or res judicata. See also, In re Soileau, 502 So. 2d 1083 (La. 1987) where the court held that double jeopardy does not apply to disciplinary proceedings against a judge and Pullin v. Louisiana State Racing Commission, 484 So. 2d 105 (La.1986) where the exclusionary rule was inapplicable to a license revocation proceeding characterized as civil.
However, even assuming that the proceedings against Dr. Allen can be characterized as quasi criminal, under the facts of this case double jeopardy would still not be applicable. The Supreme Court's reversal of the Board's decision is analogous to the granting of a motion in arrest of judgment or a motion for new trial, where the "legality" of the verdict, not its "correctness" is the defect at issue. Dr. Allen will not be placed in jeopardy twice. See, State v. Butler, 331 So. 2d 425 (La.1976); C.Cr.P. Art. 859(5).
Res Judicata
Dr. Allen asserts that the "existing factual record", within the context of the Supreme Court's decree, includes the original committee's rejection of various charges and specifications as well as the reversals by the district court and this court of several other charges and specifications. He argues that these decisions *243 were not cross appealed by the Board and are therefore final and barred by res judicata. We disagree.
The theory of civilian res judicata embodies the principle that matters actually litigated and finally adjudicated are presumed correct and should not be contradicted in a subsequent suit. Sewell v. Argonaut Southwest Insurance Company, 362 So. 2d 758 (La.1978); Building Engineering Services Company Inc. v. State, 441 So. 2d 417 (La.App. 4th Cir.1983). A plea of res judicata presupposes that there exists a valid final judgment where the matters asserted were previously litigated. An issue becomes a "thing adjudged" when the judgment is final, meaning there is no further review. La.C.C. Art. 3506(31).
In the instant case, the Supreme Court reversed this Court and remanded the case for rehearing because it found that "[g]iven the absence of proper factual findings and reasons for judgment ... we have really nothing to review." Thus, there was no final adjudication to form the basis for an application of the doctrine of res judicata. The Supreme Court's decree did not finally decide the merits of any of the charges against Dr. Allen. This assignment of error is without merit.
ASSIGNMENT OF ERROR 2:
Dr. Allen asserts that he is entitled to attorney's fees and expenses because the filing of the Petition for Judicial Review and Injunctive Relief was a substantial factor in causing the Board to recuse Doctors Tomaszewski, King and Long. In support of this position he refers this Court to the provisions of Louisiana Revised Statute 49:965.1(A) and asserts that, by analogy, the federal law and jurisprudence pursuant to the Federal Civil Rights Attorneys' Fees Award Act, 42 U.S.C. Sec. 1988, should be applied in interpreting the Louisiana statute.[8] We disagree.
Louisiana Revised Statute 49:965.1(A) and (B) provide:
"A. When a small business files a petition seeking: (1) relief from the application or enforcement of an agency rule or regulation, (2) judicial review of the validity or applicability of an agency rule, (3) judicial review of an adverse declaratory order or ruling, or (4) judicial review of a final decision or order in an adjudication proceeding, the petition may include a claim against the agency for the recovery of reasonable litigation expenses. If the small business prevails and the court determines that the agency acted without substantial justification, the court may award such expenses, in addition to granting any other appropriate relief.
B. A small business shall be deemed to have prevailed in an action when, in the final disposition, its position with respect to the agency rule or declaratory order or ruling is maintained, or when there is no adjudication, stipulation, or acceptance of liability on its part. However, a small business shall not be deemed to have prevailed, if the action was commenced at the instance of, or on the basis of a complaint by, anyone other than an officer, agent, or employee of the agency and was dismissed by the agency on a finding of no cause for the action or settled without a finding of fault on the part of the small business."
Because the statute provides for an award for reasonable litigation expenses, it is penal in nature. See, GTM Carpet Company v. Richards, 534 So. 2d 539 (La.App. 5th Cir.1988). It is a well settled rule of *244 statutory construction that penal statutes must be strictly construed and their provisions shall be given a genuine construction according to the fair import of their words, taken in their usual sense, in connection with the context and with reference to the purpose of the provision. State v. Russland Enterprises, 555 So. 2d 1365 (La. 1990); Baten v. Taylor, 386 So. 2d 333 (La. 1979); Becnel v. Answer, Inc., 428 So. 2d 539 (La.App. 4th Cir.1983), writ den. 433 So. 2d 158 (La.1983). This rule of construction has been specifically applied to administrative law. Gibbs Construction Company, Inc. v. State Department of Labor, 540 So. 2d 268 (La.1989). Thus, no analogy to comparable federal statutes is necessary nor permitted. We must strictly construe the applicable Louisiana statute.
Dr. Allen's Petition seeks judicial review of "pre-trial rulings" of the Board. Assuming Dr. Allen's dental practice is a "small business" as required by section (D)(2),[9] none of the types of relief or review specified in the statute were sought by Dr. Allen. He does not seek relief from enforcement of an agency rule or regulation; judicial review from the validity of an agency rule; judicial review of an adverse declaratory order or ruling which deals with the applicability of any statutory provision or of any rule or order of the agency; or judicial review of a final decision or order.
Furthermore, Dr. Allen's affidavit setting forth the grounds for recusal and the petition for judicial review by the district court were filed at the same time. His district court petition was premature. The Board was not given the opportunity to first rule on his request. Under these circumstances it would be inappropriate to grant attorney fees.
THE EXISTING FACTUAL RECORD:
What constitutes "a new hearing on the existing factual record", as decreed by the Supreme Court, has been argued by both parties herein. That Court was given an opportunity to define the parameters of its order but declined to do so. While we recognize that the Supreme Court is the exclusive and final arbiter of its own decrees and judgments, Barber v. Houssiere-Latreille Oil Company, 163 La. 555, 112 So. 415 (1926); Hill v. Hill, 121 La. 578, 46 So. 657 (La.1907), we feel compelled, though reluctantly, to provide some guidance on this issue.
The majority in Allen v. Louisiana State Board of Dentistry, 543 So. 2d 908 (La. 1989), did not hold that the original administrative hearing was tainted. Rather, the court found that Wootan's participation in drafting the Board's findings and conclusions was improper. This is evident in the preamble to the Court's June 29, 1989 modified decree which states:
"The reversible error in the proceedings below occurred after the close of evidence during the deliberative process."
In our opinion, the entirety of the modified decree means that the new committee should review the record as it existed at the close of the hearing, receive whatever additional evidence either party desires to present, and render a decision accordingly.
For the reasons assigned, the judgment of the trial court is affirmed. All costs of this appeal to be paid by appellant.
AFFIRMED.
NOTES
[1] Allen v. Louisiana State Board of Dentistry, 536 So. 2d 1226 (La.1989).
[2] The committee found all the charges and specifications viable except the following:
Charge Number Specification Numbers
1 1
2 1, 16, 17, 19, 21 and 27
3 1 and 2
4 1 and 2
5 4 and 6
[3] Charge 5 specifications 4 and 6 should have read charge 6, specifications 4 and 6.
[4] Allen v. Louisiana State Board of Dentistry, 565 So. 2d 464 (La.1990).
[5] Charge 2, Specifications 5, 15 and 18, Charge 5, Specification 1 and Charge 6, Specification 5.
[6] Charge 2, Specifications 2, 3, 7, 8, 14 and 24.
[7] Charge 2, Specifications 13, 20 and 26.
[8] 42 U.S.C. Sec. 1988 entitled "Proceedings in vindication of civil rights; attorney's fees" provides in pertinent part:
"... In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985 and 1986 of this title, title IX of Public Law 92-318, or Title VI of the Civil Rights Act of 1964, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs."
Pursuant to this provision the federal jurisprudence has allowed civil rights plaintiffs to recover fees even when the subject of the litigation has been settled or has become moot, if, the plaintiff has established (1) that the goal of the lawsuit was achieved and (2) that the suit itself caused the defendant to remedy the discrimination." Associated Builders and Contractors v. Orleans Parish School Board, 919 F.2d 374 (5th Cir.1990).
[9] Louisiana Revised Statute 49:965.1(D)(2) provides:
"Small business" means a small business as defined by the Small Business Administration, which for purposes of size eligibility or other factors, meets the applicable criteria set forth in 13 Code of Federal Regulations, Part 121, as amended.
A dental office with annual receipts of less than $3.5 million dollars is considered a small business. 13 Code of Federal Regulations, Part 121.601. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2104083/ | 103 N.H. 141 (1960)
PEARL E. BERRY
v.
STATE.
No. 4845.
Supreme Court of New Hampshire.
Argued November 1, 1960.
Decided January 20, 1961.
*143 Donald G. Rainie, Upton, Sanders & Upton and Wesley E. Whitney (Mr. Whitney orally), for the plaintiff.
Louis C. Wyman, Attorney General, Jarlath M. Slattery and William J. O'Neil, Assistant Attorneys General (Mr. Slattery orally), for the State.
LAMPRON, J.
The parties agree that plaintiff's damages are to be measured by the difference between the value of her land after the taking and what it would have been worth on the day of the taking had it not occurred. Edgcomb Steel Co. v. State, 100 N. H. 480, 486. To prove her damages the plaintiff offered the testimony of one expert who testified to the value, before and after the taking, of the 30 acre tract located on the east side of the new highway on which are located plaintiff's house and other structures. Another expert testified to the "before and after" value of the 21 acres taken by the State and of the 70 acre tract of timberland remaining on the west side of the highway.
The State objected to this method of proving plaintiff's damages. "The obvious objection to the introduction of such evidence is that fractional appraisals will result in false values. We find it almost impossible to visualize a situation where the value of the timberland would have absolutely no bearing on the farm land and vice versa."
The Trial Court in admitting such evidence stated "I think it has some probative value, as long as you keep in mind it is the sum total value before and the sum total value after." No contention has been made that the Trial Court did not properly or adequately instruct the jury as to the rule to be followed by them in awarding damages and that the jury did not act accordingly.
*144 It is true that it may be difficult for an appraiser to segregate and ascribe to a part of an entire property a value entirely divorced from the value of the rest of it. However even though in this case the State presented the testimony of an expert concerning the before and after value of the whole property, he admitted that he went over the property "with a man who I consider eminently qualified to evaluate the standing timber." He also agreed "that at least since the taking the only way you can approach the fair value of the land lying west of the Interstate is to treat it as a single unit . . . a timber lot."
Furthermore from a practical viewpoint also it may be more difficult for a jury to deal with fractional appraisals in such a way as to prevent duplication in the amount of damages awarded. However in this case the parts which were separately appraised had such distinct characteristics that the danger of duplication could be found to be at a minimum.
These are all matters to be weighed by the Trial Court in deciding whether the testimony offered will aid the jury in arriving at its decision. Ricker v. Mathews, 94 N. H. 313, 317; Edgcomb Steel Co. v. State, supra, 491. We cannot say it was error for the Trial Court to admit such testimony in this case, or that it could not constitute the basis of a fair and just verdict. Cade v. United States, 213 F.2d 138 (4th Cir. 1954); United States v. 5139.5 Acres of Land, 200 F.2d 659, 661 (4th Cir. 1952); Clark v. United States, 155 F.2d 157 (8th Cir. 1946).
One Hyde, a qualified appraiser, testified as an expert witness for the State. His opinion of the fair market value of plaintiff's property was arrived at solely by the comparative approach method, that is "a study of similar properties which have sold on the open market in the vicinity." He used four sales of other properties in forming his opinion. Two of these were about 3 to 4 miles west of Straw Road on which plaintiff's property is located. The other two were 2 and 3 miles from Hopkinton Center.
On cross-examination plaintiff brought out dissimilarities between her property and those used by the witness as a basis of comparison. She took the position that he was not qualified to give an opinion on value because "as a matter of law there is no such similarity, as demonstrated in the four most similar properties which he in his testimony has said enabled him and solely enabled him to come to a conclusion as to the Berry property." See Wood v. Insurance Co., 89 N. H. 213, 215.
*145 The degree of similarity required between property to be taken and other tracts of land shown in evidence cannot be governed by any fixed rule, but the admissibility of such testimony must in each instance be determined by the trial judge within the proper limits of his discretion. Coastal Transmission Corp. v. Lennox, (Tex. App.) 331 S.W.2d 778; Eames v. Corporation, 85 N. H. 379, 381. In our opinion the properties in question could be found by the Trial Court to have enough elements of comparability to qualify the witness to express an opinion which would aid the jury in their search for the truth. Danos v. Company, 94 N. H. 200, 201; Cloutier v. Charland, 100 N. H. 63; Lustine v. State Roads Commission, 217 Md. 274, 281.
In cross-examination plaintiff asked said Hyde if in arriving at the value of her property he had considered certain lots on said Straw Road sold during a certain period. Receiving a negative reply, she was permitted, over the State's objections, to introduce in evidence certified copies of deeds of certain tracts of land on said road conveyed during that period and to question the witness about the amount of revenue stamps thereon. Plaintiff's counsel was also allowed to state to the jury the federal law (72 Stat. 1299) regulating the determination of the amount of tax on such conveyances represented by the revenue stamps.
The State maintains that proof of the consideration paid for certain parcels of land by evidence of the amount of revenue stamps on the deeds was hearsay the receipt of which constituted prejudicial error. It does not dispute the fact that an expert witness may testify that he has formed his opinion on the basis of hearsay evidence because he gives it the sanction of his general experience. "Nevertheless, the actual selling price of [a] tract of comparable property could not be shown by hearsay evidence." 38 Neb. L. Rev. 495, 500; National Bank of Commerce v. New Bedford, 175 Mass. 257; Ellis v. Ohio Turnpike Commission, 100 Ohio App. 10.
Plaintiff contends that she was entitled to present evidence of these sales for the purpose of testing the extent of witness Hyde's knowledge and the basis of his conclusions. She maintains that in order to determine the prices paid for these conveyances reference could be had to the revenue stamps if the Trial Court considered such evidence of sufficient probative value to warrant its admission. Bill v. Company, 90 N. H. 453, 456; Hebert v. Railroad, 90 N. H. 324, 327.
*146 It has been held that the presence of revenue stamps on a deed creates a presumption that consideration was given in an amount represented by the stamps. Flynn v. Palmer, 270 Wis. 43; In re McGeehin's Will, (Sur. Ct.) 235 N. Y. Supp. 477, 479. See anno. 51 A. L. R. 2d 1000. If these deeds had conveyed properties which the witness Hyde used as comparables in forming his opinion of the value of plaintiff's premises or if he had given his opinion of the value of these properties, the Trial Court could have allowed the introduction of evidence of the amount of revenue stamps on such deeds to test the basis of the conclusions of the witness and the weight to be given to them. Bill v. Company, supra; see United States v. 5139.5 Acres of Land, supra, 661; 5 Nichols, Eminent Domain (3d ed.) s. 18.45 [2].
However these properties were not considered by this witness in forming his opinion nor did he testify as to their values. These deeds were offered, among other purposes, to demonstrate "that the consideration paid for the various parcels of land conveyed, as denoted by the revenue stamps, was not in line with the minimal damages which Mr. Hyde testified the plaintiff had suffered." This was not a proper manner of proving the amount of consideration paid for these conveyances. It should have been proved by the testimony of one having personal knowledge thereof. Kimball v. Fenner, 12 N. H. 248, 251; Horn v. Thompson, 31 N. H. 562, 570; Spaulding v. Knight, 116 Mass. 148, 155; Denver v. Quick, 108 Colo. 111, 117; see United States v. Katz, 213 F.2d 799, 800 (1st Cir. 1954). The admission of this evidence constituted error which may have prejudicially affected the verdict. There must be a new trial. Daniels v. Barker, 89 N. H. 416, 421.
Plaintiff's expert witness Ordway testified to the "before and after" value of the 30 acre tract on the east side of the highway on which her home is located. He testified on cross-examination that he observed the dwelling had a central heating system but did not know if it was installed before or after the taking in May 1957. Plaintiff over the State's objection, was allowed to introduce evidence of the cost of said system which was installed after the taking.
The State maintains correctly that plaintiff's damage is measured as of the day of the taking and that evidence of improvements made to the property thereafter are usually immaterial and incompetent. However where there was an issue in this case as to when the system was installed and how it might have affected the *147 conclusions of the expert witness and where it most likely had also been observed by the jury on its view of the premises we cannot say that the State was prejudiced by admission of evidence of the cost of this heating plant. See Chouinard v. Shaw, 99 N. H. 26, 28.
New trial.
All concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2902022/ | Becker v. State
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
IN RE: CESAR MALDONADO,
M.D.,
Relator.
§
§
§
§
§
§
No. 08-05-00030-CV
AN ORIGINAL PROCEEDING
IN MANDAMUS
OPINION ON PETITION FOR WRIT OF MANDAMUS
This is an original proceeding in mandamus. Cesar Maldonado, M.D., Relator, seeks
a writ of mandamus requiring the trial court to vacate an order denying his motion to dismiss.
For the reasons stated below, we deny relief.
STANDARD OF REVIEW
Mandamus will lie only to correct a clear abuse of discretion. Walker v. Packer, 827
S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). Moreover, there must be no other adequate
remedy at law. Id.
1. Clear abuse of discretion
An appellate court rarely interferes with a trial court’s exercise of discretion. A clear
abuse of discretion warranting correction by mandamus occurs when a court issues a decision
which is without basis or guiding principles of law. See Johnson v. Fourth Court of Appeals,
700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding). With respect to resolution of factual
issues or matters committed to the trial court’s discretion, the reviewing court may not
substitute its judgment for that of the trial court. Walker, 827 S.W.2d at 839. The relator
must therefore establish that the trial court could reasonably have reached only one decision.
Id. at 840. Even if the reviewing court would have decided the issue differently, it cannot
disturb the trial court’s decision unless it is shown to be arbitrary and unreasonable. Id. With
respect to a trial court’s determination of the legal principles controlling its ruling, the
standard is much less deferential. A trial court has no “discretion” in determining what the
law is or applying the law to the facts. Thus, a clear failure by the trial court to analyze or
apply the law correctly will constitute an abuse of discretion, and may result in appellate
reversal by extraordinary writ. Walker, 827 S.W.2d at 840.
2. No adequate remedy by appeal
An appellate court will deny mandamus relief if another remedy, usually appeal, is
available and adequate. Street v. Second Court of Appeals, 715 S.W.2d 638, 639-40 (Tex.
1986) (orig. proceeding). Mandamus will not issue where there is “a clear and adequate
remedy at law, such as a normal appeal.” Walker, 827 S.W.2d at 840 (quoting State v.
Walker, 679 S.W.2d 484, 485 (Tex. 1984)). Mandamus is intended to be an extraordinary
remedy, available only in limited circumstances. The writ will issue “only in situations
involving manifest and urgent necessity and not for grievances that may be addressed by
other remedies.” Holloway v. Fifth Court of Appeals, 767 S.W.2d 680, 684 (Tex. 1989)
(quoting James Sales, Original Jurisdiction of the Supreme Court and the Courts of Civil
Appeals of Texas in Appellate Procedure in Texas, Sec. 1.4(1)(b) at 47 [2d Ed. 1979]).
APPLICATION OF THE LAW TO THE FACTS BEFORE THE COURT
The record before us does not reflect that the trial court clearly abused its discretion
by denying the motion to dismiss. Accordingly, we deny the relief requested in the petition
for writ of mandamus.
RICHARD BARAJAS, Chief Justice
February 17, 2005
Before Barajas, C.J., McClure, and Chew, JJ.
Chew, J., not participating | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1624673/ | 522 So. 2d 680 (1988)
TONY'S AUTO PARTS, INC. and AIU Insurance Company
v.
HONEYWELL, INC. d/b/a Honeywell Protection Services.
No. 87-CA-649.
Court of Appeal of Louisiana, Fifth Circuit.
March 14, 1988.
*681 Eric Shuman, McGlinchey, Stafford, Mintz, Cellini & Lang, P.C., New Orleans, for plaintiffs/appellants.
Paul V. Cassisa, Sr. and Carl J. Giffin, Jr., Metairie, for defendant/appellee.
Before BOWES, GAUDIN and WICKER, JJ.
WICKER, Judge.
This appeal arises from a suit filed on behalf of Tony's Auto Parts, (Tony's) and its insurer AIU Insurance Company against Honeywell, Inc., d/b/a Honeywell Protection Services (Honeywell). Tony's alleges that Honeywell was guilty of such willful and deliberate disregard of its contractual duty to provide protection that its contractual limitation of liability should not apply in this case. The trial court granted Honeywell's motion for summary judgment and dismissed Tony's suit. Tony's now appeals. We reverse.
On December 23, 1983 Tony's, a Jefferson Parish auto parts store, was burglarized. The Honeywell alarm was triggered. Although the police were notified, the owners were not notified. Thus, the police were unable to gain entry into the building. When the burglars "torched" the store's safe, a fire was started. The fire destroyed the store.
Appellant concedes that if Honeywell is guilty of only simple negligence, the terms of the contract limit its liability. The pertinent provision reads:
SUCH LIABILITY SHALL BE LIMITED TO AN AMOUNT EQUAL TO ONE-HALF THE ANNUAL SERVICE CHARGE PROVIDED HEREIN FOR THE PROTECTED PREMISES SUSTAINING THE LOSS, OR $300.00, WHICHEVER IS GREATER. THIS SUM SHALL BE COMPLETE AND EXCLUSIVE AND SHALL BE PAID AND RECEIVED AS LIQUIDATED DAMAGES AND NOT AS A PENALTY.
On the other hand if Honeywell is guilty of willful or deliberate disregard of its contractual duty then the contractual limitation does not apply. Carriage Meat Co., Inc. v. Honeywell, Inc., 442 So. 2d 796 (La. App. 4th Cir.1983). In Carriage Meat, supra the granting of a summary judgment was reversed since an issue of material fact existed as to whether Honeywell's failure to notify the plaintiff in that case fell within a similar exculpatory clause.
The thrust of appellant's argument on appeal is that the granting of the motion for summary judgment was improper since the issue of willful negligence is more appropriately decided at a trial on the merits after discovery has been completed. Furthermore, he contends that there exist pressing questions of material fact. We agree.
A major issue in this case is whether Honeywell acted in willful or wanton disregard of its contractual duty in its failure to notify the owners. This is clearly an issue of fact as to what Honeywell's operators and/or its supervisors intended.
In support of its motion for summary judgment Honeywell referred to exerpts from Mr. Peter Bertucci's (Bertucci) deposition. Bertucci, Tony's President, stated that the operator told him that she attempted to call him but could not find his number. He also stated that he had no knowledge of any intentional wrongdoing on the part of Honeywell. Tony's argument, however, is based on Honeywell's allegedly willful or deliberate disregard of its contractual duty to notify its customers.
In opposition to Honeywell's motion for summary judgment, Tony's attached the deposition testimony of Mr. Poche, Honeywell's local manager. Mr. Poche testified that Mrs. Stewart, the operator, called the police but did not call anyone else.
Mr. Poche further testified that Honeywell has a standard procedure whereby the operator contacts the authorities and the customers. However, the operator has the discretion to dispatch the alarm first to the *682 authorities and then to go back and inform the customer so as to avoid delaying contacting the authorities. Moreover, he testified that customers would be notified "[a]s soon as possible."
While Mr. Poche gave general reasons for the operators' failure to contact the customers immediately, he gave no reason as to why Tony's had not been notified. In addition, he testified as follows:
Q. Do you know of any problem, mechanical, electronic type of physical problem that was encountered in locating or telephoning anybody in regard to this incident?
A. Not to my knowledge.
We note, however, that there is no deposition testimony of Mrs. Stewart who was identified by Mr. Poche as the operator.
The second circuit recently summarized the law with regard to the granting of a motion for summary judgment as follows:
A motion for summary judgment should only be granted if the pleadings, deposition, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law. LSA-C.C.P. art. 966; Witty v. T.L. James & Company, Inc., 299 So. 2d 545 (La.App. 4th Cir.1974); Verrett v. Cameron Telephone Co., 417 So. 2d 1319 (La.App. 3d Cir.1982) [writ denied 422 So. 2d 164 (La.1982).] The party seeking the summary judgment has the burden of proving there is no genuine issue of material fact. Ledbetter v. Myers, 438 So. 2d 700 (La.App. 2d Cir.1983). Sanders v. City of Blanchard, 438 So. 2d 714 (La.App. 2d Cir.1983). Any doubt as to the existence of such an issue is resolved against granting the motion and in favor of a trial on the merits. Kay v. Carter, 243 La. 1095, 150 So. 2d 27 (1963); Ledbetter v. Myers, supra; Verrett v. Cameron Telephone Co., supra.
Because the mover has the burden of establishing that no material factual issue exist, inferences to be drawn from the underlying facts contained in the materials before the court must be viewed in light most favorable to the party opposing the motion. Mashburn v. Collin, 355 So. 2d 879 (La.1977); Vermilion Corp. v. Vaughn, 397 So. 2d 490 (La. 1981).
To satisfy his burden the mover must meet a strict standard by showing that it is quite clear what the truth is, and that it excludes any real doubt as to the existence of any genuine issue of fact. The papers supporting mover's position are closely scrutinized while the opposing papers are indulgently treated in determining whether the mover has satisfied his burden. Vermilion Corp. v. Vaughn, supra. Only when reasonable minds must inevitably concur is a summary judgment warranted. Verrett v. Cameron Telephone Co., supra.
A summary judgment is not appropriate when it is based upon affidavits and accompanying pleadings and other documentary evidence to establish subjective facts such as motive, intent or knowledge. Verrett v. Cameron Telephone Co., supra and cases therein cited.
Rhines v. Carpenter, 465 So. 2d 884, 886-87 (La.App. 2nd Cir.1985).
We have recently held that summary judgment "is not to be used as a substitute for trial on the merits, and all doubts concerning material issues of disputed facts must be resolved against granting the motion for summary judgment. Kinney v. Hutchinson, 449 So. 2d 696 (La.App. 5 Cir. 1984); Gatlin v. Coca-Cola Co., 461 So. 2d 452 (La.App. 5 Cir.1984)." Jones v. Gillen, 504 So. 2d 575, 576-77 (La.App. 5th Cir. 1987), writ denied 508 So. 2d 86 (La.1987).
The determination of whether the conduct of Honeywell constitutes either willful or deliberate disregard of its contractual duty rests upon a subjective fact. That determination is more properly made after a trial on the merits. Verrett, infra.
We find that Honeywell failed to carry the burden of proving that there is no genuine issue of material fact. Therefore, the trial court's finding to the contrary is manifestly erroneous.
*683 For the foregoing reasons, we reverse the decision of the trial court and remand the case for further proceedings.
REVERSED AND REMANDED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2261859/ | 861 F. Supp. 551 (1994)
Cheryl J. HOPWOOD, Douglas W. Carvell, Kenneth R. Elliott, and David A. Rogers, Plaintiffs,
v.
The STATE OF TEXAS; University of Texas Board of Regents; Bernard Rapopart, Ellen C. Temple, Lowell H. Lebermann, Jr., Robert J. Cruikshank, Thomas O. Hicks, Zan W. Holmes, Tom Loeffler, Mario E. Ramirez, and Martha E. Smiley, as members of the Board, in their official capacities; University of Texas at Austin; Robert M. Berdahl, President of the University of Texas at Austin in his official capacity; University of Texas School of Law; Mark G. Yudof, Dean of the University of Texas School of Law in his official capacity; Stanley M. Johanson, Professor of Law in his official capacity, Defendants.
No. A 92 CA 563 SS.
United States District Court, W.D. Texas, Austin Division.
August 19, 1994.
*552 *553 Terral Ray Smith, Small, Craig & Werkenthin, Steven W. Smith, Austin, TX, Joseph A. Shea, Jr., Michael P. McDonald, Vincent A. Mulloy, Center for Individual Rights, Washington, DC, R. Kenneth Wheeler, Wallace, Harris, Sims & Wheeler, Richmond, VA, Joseph A. Wallace, Wallace, Harris & Sims, Elkins, WV, Paul J. Harris, Wallace, Harris, Sims & Wheeler, Richmond, VA, Michael E. Rosman, Center for Individual Rights, Washington, DC, for plaintiffs.
Harry M. Reasoner, Allan Van Fleet, Betty Owens, Vinson & Elkins, Houston, TX, Javier Aguilar, Sp. Asst. Atty. Gen., Toni Hunter, Atty. General's Office, Sarah L. Anderson, Tex. Atty. Gen., Samuel Issacharoff, Charles Alan Wright, University of Texas School of Law, R. Scott Placek, Barry D. Burgdorf, Vinson & Elkins, Austin, TX, for defendants.
MEMORANDUM OPINION
SPARKS, District Judge.
The plaintiffs, Cheryl J. Hopwood, a white female, and Douglas W. Carvell, Kenneth R. Elliott, and David A. Rogers, three white males, have brought suit against the defendants[1] alleging violations of the Fourteenth Amendment, 42 U.S.C.A. § 1981 (West Supp. 1994), 42 U.S.C.A. § 1983 (West 1981), and Title VI of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000d (West 1981).[2] All of these provisions prohibit discrimination because of race. For the alleged violations, the plaintiffs seek injunctive and declaratory relief, as well as compensatory and punitive damages. The plaintiffs contend the defendants discriminated against them by favoring less qualified black and Mexican American applicants for admission to the University of Texas School of Law through the use of a quota system. This cause was tried before the Court, without a jury, on May 16th through May 20th and May 23rd through May 25th, 1994.
The cause focuses on one of the most divisive issues faced by society, affirmative action, and highlights the tension that exists when the individual rights of nonminorities come into conflict with programs designed to aid minorities. The plaintiffs have contended that any preferential treatment to a group based on race violates the Fourteenth Amendment and, therefore, is unconstitutional. However, such a simplistic application of the Fourteenth Amendment would ignore the long history of pervasive racial discrimination in our society that the Fourteenth Amendment was adopted to remedy and the complexities of achieving the societal goal of overcoming the past effects of that discrimination. Further, the Supreme Court, which is continually faced with trying to reconcile the meaning of words written over a century ago with the realities of the latter twentieth century, has declined to succumb to an original intent or strict constructionist argument. Therefore, the Court will decline the plaintiffs' *554 invitation to ignore the law established by the highest court of this land and to declare affirmative action based on racial preferences as unconstitutional per se. The issue before the Court is whether the affirmative action program employed in 1992 by the law school in its admissions procedure met the legal standard required for such programs to pass constitutional muster. The Court, having carefully considered the evidence presented at trial, the arguments of counsel, and the briefing provided by the parties, finds that it did not.
I. HISTORICAL BACKGROUND
The reasoning behind affirmative action is simple because society has a long history of discriminating against minorities, it is not realistic to assume that the removal of barriers can suddenly make minority individuals equal and able to avail themselves of all opportunities. Therefore, an evaluation of the purpose and necessity of affirmative action in Texas' system of higher education requires an understanding of past discrimination against blacks and Mexican Americans, the minorities receiving preferences in this cause, and the types of barriers these minorities have encountered in the educational system.
A. Discrimination in Primary and Secondary Education
The history of official discrimination in primary and secondary education in Texas is well documented in history books, case law, and the record of this trial. The Court, therefore, will address it only in summary fashion.
Even after the Supreme Court's decision in Brown v. Board of Education, the State of Texas adopted a policy of official resistance to integration of its public schools. This policy of resistance resulted in numerous lawsuits and court-imposed desegregation plans throughout the past twenty years. Wright, vol. 19 at 38-44; Romo, vol. 17 at 45-51. Many of the school districts found to be operating dual systems of education were also found to practice official discrimination against black and Mexican American students. Wright, vol. 19 at 40-43; Romo, vol. 17 at 45-51; Rodriguez, vol. 17 at 8-9.
The problem of segregated schools is not a relic of the past. Despite the fact that the public school population is approximately half white and half minority, minority students in Texas attend primarily majority minority schools while white students attend primarily white schools. Glenn, vol. 23 at 46-49. Further, as of May 1994, desegregation lawsuits remain pending against over forty Texas school districts. D-457; see also D-370, 373, 419; Wright, vol. 19 at 38-40; Romo, vol. 17 at 45-46.
The lack of educational opportunity for minorities has been compounded by the lower socioeconomic status of minorities in Texas. Statistics continue to indicate significant disparities between minority and nonminority students in skills and academic knowledge attained in the public schools. Although the generally lower socioeconomic status of black and Mexican American families is partially accountable for some of the disparities, the gap is exacerbated by historically inferior educational preparation of minorities. Glenn, vol. 23 at 30-36. Further, at each educational level, there is a marked decline in the level of attainment by minorities, as reflected in comparison of drop-out rates between minorities and nonminorities and the percentages of the respective groups that graduate from high school and college.[3]
B. Discrimination in Higher Education
As with primary and secondary education, Texas' system of higher education has a history of state-sanctioned discrimination. Discrimination against blacks in the state system of higher education is well documented in history books, case law, and the State's legislative history. The State of Texas, by constitution and statute, previously required the maintenance of "separate schools ... for the white and colored children." See Tex. Const. art. VII, § 7 (1925, repealed 1969). *555 This policy resulted in the establishment of segregated schools for blacks that were inferior to the white schools. Further, opportunities available to blacks to attend college were extremely limited.[4]
In 1946, when Heman Sweatt, a black man, sought admission to the law school and was refused admission, a Texas court, while holding that Article VII, Section 7 of the Texas Constitution precluded his admission, ordered the state to provide a law school for blacks. See Sweatt v. Painter, 210 S.W.2d 442 (Tex.Civ.App. Austin 1948). The State hastily created a makeshift law school that had no permanent staff, no library staff, no facilities, and was not accredited. Sweatt v. Painter, 339 U.S. 629, 632, 70 S. Ct. 848, 849-50, 94 L. Ed. 1114 (1950). In 1950, a unanimous United States Supreme Court ruled that the State of Texas' provisions regarding the legal education of white and minority students violated the Fourteenth Amendment and ordered that Sweatt be admitted to the previously all-white University of Texas School of Law. Sweatt, 339 U.S. at 636, 70 S. Ct. at 851. Sweatt left the law school in 1951 without graduating after being subjected to racial slurs from students and professors, cross burnings, and tire slashings. Wright, vol. 19 at 24-25.
The Sweatt case is the most flagrant incident of state-sanctioned discrimination occurring against blacks at the University of Texas. However, the record reflects that during the 1950s, and into the 1960s, the University of Texas continued to implement discriminatory policies against both black and Mexican American students. Mexican American students were segregated in on-campus housing and assigned to a dormitory known as the "barracks," as well as excluded from membership in most university-sponsored organizations. Romo, vol. 17 at 43. Additionally, until the mid 1960s, the Board of Regents policy prohibited blacks from living in or visiting white dormitories. Wright, vol. 19 at 26-28; D-482.
Beginning in the mid 1970s, discrimination in Texas' system of higher education came under attack through a court-ordered investigation by the Department of Health, Education and Welfare (HEW) Office for Civil Rights (OCR). The investigation of Texas' system resulted from a lawsuit initiated in 1970 to require HEW to take action to enforce the provisions of Title VI.[5] The courtordered *556 investigation of ten states, which did not include Texas, began in 1973. In 1977, the court extended the order to an additional six states, which included Texas. Ashworth, vol. 12 at 8; D-296.
Between 1978 and 1980, the OCR conducted an investigation of Texas' public higher education system. The investigation culminated in a finding that Texas had "failed to eliminate vestiges of its former de jure racially dual system of public higher education, a system which segregated blacks and whites." D-297. Additionally, the OCR found that Hispanics were significantly underrepresented in state institutions and indicated it would continue its investigation of discrimination against Hispanics. Id.
During the early 1980s, the OCR and Texas officials engaged in considerable negotiations regarding efforts to bring Texas into compliance with Title VI. Texas, in an effort to achieve a state-wide desegregation plan acceptable to the OCR, attempted to address OCR concerns through submission of the Texas Equal Education Opportunity Plan for Higher Education (Texas Plan), which included a commitment to the goal of equal educational opportunity and student body desegregation for both black and Hispanic students. D-237. In 1982, Assistant Secretary of Education Clarence Thomas informed Governor Clements that the Texas Plan was deficient because the numeric goals of black and Hispanic enrollment in graduate and professional programs were insufficient to meet Texas' commitment to enroll those minority students in proportion to the representation among graduates of the state's undergraduate institutions. Ashworth, vol. 12 at 16-17; D-284. Texas revised its plan and resubmitted it to the OCR; the OCR found the modified plan to be deficient because it did not set targets for increasing minority enrollment for each institution, instead of on a statewide basis, and it did not project achievement dates for the targeted goals. Ashworth, vol. 12 at 19-20; D-219.
In 1983, the District Court for the District of Columbia entered an order in the ongoing Title VI-enforcement suit, in which the court found that "Texas has still not committed itself to the elements of a desegregation plan which in defendants' judgment complies with Title VI." D-446. The court ordered the DOE to begin enforcement proceedings against Texas unless Texas submitted a plan in full conformity with Title VI within forty-five days. Ashworth, vol. 12 at 22-23; D-446. In response to the order, the OCR submitted thirty-seven suggested measures for increasing black and Hispanic student enrollment in professional and graduate programs at traditionally white institutions. Among the suggestions were that each graduate and professional school should re-evaluate its admissions criteria and that "admissions officers will consider each candidate's entire record and will admit black and Hispanic students who demonstrate potential for success but who do not necessarily meet all the traditional admission requirements." D-220.
In June 1983, the Texas Plan, as amended to account for the deficiencies identified by the OCR, was accepted by OCR as being in compliance with Title VI.[6] However, acceptance was contingent on adequate funding and completion of key activities within a specified time. D-314. Further, the Texas Plan was subject to monitoring for compliance until 1988. Ashworth, vol. 12 at 23, 25-26.
In November 1987, OCR contacted the state regarding the expiration of the plan in 1988 and indicated OCR would perform a final evaluation to determine if further action would be necessary to bring Texas into compliance with Title VI. OCR further instructed state officials that, pending the evaluation, Texas should continue to operate under the plan. Ashworth, vol. 12 at 32-34; D-323.
*557 Because Texas Higher Education Coordinating Board officials determined Texas had not met the goals and objectives of the plan, the board voluntarily developed a successor plan (Plan II) to avoid a mandate from the federal government to negotiate another plan. Ashworth, vol. 12 at 34-35; vol. 13 at 45-46. Plan II did not contain any specific numeric enrollment goals but retained Texas' commitment to increasing black and Hispanic student enrollment. D-326 at 9.
To date, OCR has not completed its evaluation to determine if Texas is in compliance with Title VI.[7] However, in January 1994, the DOE notified Governor Richards that OCR was continuing to oversee Texas' efforts to eliminate all vestiges of de jure segregation and that it would be reviewing the Texas system in light of United States v. Fordice, ___ U.S. ___, 112 S. Ct. 2727, 120 L. Ed. 2d 575 (1992). Ashworth, vol. 12 at 35-38; D-293.
Against this historical backdrop, the law school's commitment to affirmative action in the admissions process evolved.
II. THE ADMISSIONS PROCESS
A. Evolution of the Admissions Process and Affirmative Action
The law school's admissions procedure was not always a complicated process. In the early 1960s, all applicants who had taken the LSAT and had at least a 2.0 or 2.2 grade point average on a 4.0 scale were accepted.[8] In about 1965, the number of applicants began to significantly exceed the law school's capacity, and, as a result, the law school established additional criteria to aid in the selection process. Smith depo. at 7-8.
Under the more selective system, a baseline was established each year based on the Texas Index (TI).[9] The law school automatically admitted applicants whose TI exceeded the baseline, and the admissions committee reviewed applicants whose TI was below the baseline. This procedure was used until the late 1960s when an inundation of applications meeting the baseline criterion created a class of more students than could be adequately accommodated and precluded review of those who did not qualify for automatic admission. That particular year, the first-year class of law students consisted of almost 700 students. Johanson, vol. 3 at 14.
As a result, the law school modified the admissions process and changed the automatic admission baseline to a presumptive admission score. Additionally, the admissions committee began to use a presumptive denial baseline, and applicants whose TI fell below that baseline were presumptively denied admission. Also during the late 1960s, the law school began implementing affirmative action by attempting to recruit minority individuals who had performed well in the CLEO program.[10] The only race or ethnicbased scholarships available during this time, however, were limited to "whites only." Smith depo. at 12.
A perception began to develop that the CLEO program had shifted its focus from students who were just below the level where law schools would seriously consider them for admission to students who were significantly below that level. Smith depo. at 14-16. Therefore, those responsible for admissions *558 at the law school felt that the CLEO program could not successfully prepare the participants in one summer to be competitive students in a regular law school class. Id. at 16. Additionally, minorities represented only a small percentage of the entire pool of applicants to the law school, and law schools around the country competed for the top minority applicants. Id. at 18. In 1971, after the law school terminated its participation in the CLEO program, the law school admitted no black students. Wright, vol. 19 at 32.
In the early 1970s, because of the university's concern over the few minority students enrolled in the law school, a separate admissions committee, informally called the "Treece committee,"[11] was formed to consider applications from minority students and disadvantaged nonminority students.[12] The purpose of the committee was to ensure that the applicants the committee reviewed received "fuller consideration" than they would have in the regular admissions process. Smith depo. at 16. The applicants were evaluated separately from the applicants before the regular admissions committee, and the sole criterion for applicants before the Treece Committee was whether the applicant had a reasonable prospect of passing the first year.[13] The Treece committee had no set goals for the number of admissions to be made through the committee, and the number of applicants it admitted had little impact on the regular admissions.[14] In 1977, the Treece committee considered 500 applicants, including approximately 100 nonminority applicants. Of these applicants, the Treece committee admitted sixty-eight minority students and three nonminority students. "Thus, while the special subcommittee did consider and grant admission to some white applicants, the predominant objective of the special subcommittee was to increase minority enrollment at the Law School." P-1 (Smith memo to Rogers, Oct. 18, 1978, at 1).
The applications before the regular admissions committee were subjected to a different process. Because of the volume of applications, the admissions committee could not give individual consideration to each application. Therefore, the law school implemented a three-category system to narrow the pool of applications requiring committee consideration. The first category of applicants, those with TIs above a certain number, were granted "administrative admission"; that is, administrative personnel automatically sent offers of admission to these applicants based on the applicants' TIs. A "presumptive denial" category was at the other end of the scale, in which administrative personnel screened the applications based on specified criteria. If the administrative person determined the file warranted further consideration, the file was sent to the regular admissions committee. The admissions committee reviewed the individual applications in the middle category or "discretionary zone," which included those referred to the committee from the presumptive denial category.
The law school used this admissions procedure until 1978 when, as a result of the Supreme Court's decision in Bakke, the law school reassessed its minority admissions procedure. The law school determined that, although its procedure differed from that at issue in Bakke, the use of the separate committees to evaluate applicants was defective.[15] Therefore, then Dean Smith directed *559 the admissions committee to operate as one unit rather than as two subcommittees and instructed the committee to establish the administrative admission and presumptive denial lines at levels that would increase the number of applicants given individual consideration. P-1.
After 1978, Johanson set the lines to allow for a reasonable number of minority candidates to be included with nonminorities in the discretionary zone. Johanson, vol. 3 at 21. The discretionary zone was then divided into five or six "bands."[16] The law school offered admission to a set percentage of applicants from each band. The percentage decreased from the first or top band to the last, a reflection of the diminishing credentials of the bands. The minority applicants were primarily clustered in the lower bands with few in the upper bands. Wellborn, vol. 24 at 45.
Within each band, minority and nonminority files were blended into groups of thirty. Each pile was reviewed by three committee members, each of whom was allocated a certain fixed number of votes determined by the yield desired from a particular band. Therefore, each member of the committee ultimately had total discretion to decide whether and what extent to implement affirmative action for each pile of files that person reviewed. Wellborn, vol. 24 at 9. Professor Wellborn testified he and other faculty members perceived two problems with this system: 1) potential unfairness to nonminority candidates who could be affected by affirmative action solely as a result of the pile in which they were included and 2) the application of personal affirmative action efforts, requiring no justification to the committee as a whole, rather than a system based on a set policy. As a result, in 1980, the law school abandoned the banding admissions procedure and formed the minority subcommittee.
The minority subcommittee was a part of the full committee that reviewed and voted on nonminority files. All minority files below the presumptive admission line were studied by the minority subcommittee.[17] The subcommittee would then bring its recommendations to the full committee. At some point during the middle of the admissions process, the subcommittee would present a report to the full committee that summarized the features of the minority files being recommended for admission. The actual files were also available at the meeting so the full committee could make its own determinations about the recommended minority applicants in comparison to the nonminority applications pending at the time. At this point in the process, the members of the full committee were involved in reading piles of nonminority files and were cognizant of the qualifications of the nonminorities. Although this method often resulted in heated discussion and disagreement among committee members over whether to admit a particular candidate, the process also provided open discussion rather than the silent voting, which could have reflected personal agendas, that occurred with the banding procedure. Wellborn, vol. 24 at 15.
In the early 1980s, during these meetings, the committee members spent considerable time debating whether individual minority candidates met minimum admissions standards and, thus, could do passing work in law school. As a result, the full committee often examined specific minority files. The ultimate effect was that the entire committee voted on each minority applicant that the subcommittee brought before the full committee. Goode, vol. 9 at 6. However, as the *560 pool of minority candidates improved, the focus of the meetings shifted to choosing among minority candidates that the committee knew, based on their TIs, could succeed in law school. Wellborn, vol. 24 at 33. Therefore, less full committee review of each individual file became necessary.[18]
Ultimately, the admissions committee determined that the process was inefficient and not the most effective way of processing minority applicants. Johanson, vol. 5 at 27. In April 1991, "[a]fter considerable debate, the [admissions] committee, over some strong opposition, directed the chair [Johanson] to form a subcommittee (including Deans Aleman and Hamilton and the two minority students) which was to review the minority files and recommend sufficient candidates for admission to achieve a class that was 5% Black and 10% MA."[19] Therefore, by 1992, the full admissions committee no longer selected individual applicants for admission. Wellborn, vol. 24 at 53. Instead, the minority subcommittee compiled a list and presented it to the full committee, which made a judgment of how many offers to give to minority applicants. The minority subcommittee was then delegated the task of deciding which individual minority applicants were to receive offers of admission. Thus, by 1992, the admissions process, although involving some interaction and exchange of information between the full committee and minority subcommittee, was markedly similar to the pre-Bakke procedure of two separate committees. This 1992 procedure is the crux of this lawsuit.
B. 1992 Admissions Process
In 1992, the admissions committee was comprised of nine professors, two assistant deans, and four students. Johanson, vol. 6 at 26. The minority subcommittee was comprised of Johanson, Aleman, and Hamilton, all of whom were also members of the full committee.[20] Aleman, however, did not participate in reviewing nonminority applications. Johanson, vol. 6 at 25-26.
In 1992 when an application arrived, administrative personnel placed it in an individual folder, to which additional materials, such as letters of recommendation, were added as they arrived at the law school. Each folder was color-coded based on two criteria: residency and race or ethnicity. The residency classification indicated whether the applicant was a resident or nonresident of Texas. The race or ethnicity classification was based on which of several boxes the applicant checked on the application: Black/African American, Native American, Asian American, Mexican American, Other Hispanic, White, or Other. Hamilton, vol. 2 at 19-20.
The application deadline was February 1. However, because the law school wished to get early offers sent to top applicants in late January if possible, Johanson drew initial presumptive admission lines as soon as he had an initial computer printout showing the numbers and qualifications of the applicants. Johanson, vol. 3 at 26-27. At this point, about half of the applications were complete; therefore, Johanson drew the initial lines relatively high to avoid too many early offers of admission before the quality of the entire pool of applicants was defined.[21] The goal of *561 the initial presumptive admission lines Johanson drew was to ensure that the top candidates in each category received offers of admission from the law school as soon as possible.[22]
Once Johanson determined which files were in the presumptive admission category, he conducted a preliminary review of the files.[23] By the end of the admissions process, Johanson reviewed 300 to 350 resident files and 200 to 250 nonresident files in this category. Johanson, vol. 3 at 32-35. In his review of these files, Johanson checked to see if the applicant's TI was inflated by high grades in a noncompetitive major or at a weak school or if there was some other questionable feature of the applicant's file. Johanson generally held those files for further review in the discretionary zone. Johanson dropped approximately ten percent of the presumptive admission applicants into the discretionary category. Those applicants with a high TI reflecting a high LSAT and high grades in a rigorous major at a leading undergraduate institution were admitted by Johanson, who had unilateral authority to admit any applicant in this category without further consultation with the full admissions committee. D-362.
At the other end of the spectrum, Johanson set another line, and applicants whose TIs fell below that line were presumptively denied admission. One or two members of the admissions committee reviewed each application in this category to determine if the TI adequately reflected the applicant's likelihood of success in law school or competitive standing relative to the entire applicant pool. Johanson, vol. 3 at 31-32; P-41; D-362. Generally, as a result of this review, twenty to forty files were upgraded from the presumptive denial zone to the discretionary zone, although Johanson did not recall the specific number of files moved to the discretionary zone in 1992. Johanson, vol. 5 at 24-25.
The middle category was comprised of those applicants whose TIs fell between the presumptive denial line and the presumptive admission line, those applicants who Johanson had moved down from the presumptive admission category, and those applicants who reviewers had moved up from the presumptive denial category. In the middle discretionary category, reviewers focused less attention on the applicant's numbers, as all were relatively close, and instead carefully evaluated the applicant's qualifications as reflected by the entire file. Goode, vol. 9 at 4; D-362.
The standards the law school applied to assess applicants in this system differed based on race and national origin in two ways. First, Johanson's determination of the presumptive admission and denial TIs varied between nonminorities and minorities.[24] By March 1992, Johanson had lowered the presumptive admission score for resident nonminorities from a threshold setting of 202/90 to 199/87.[25] Similarly, Johanson lowered the *562 presumptive admission score for Mexican American applicants from 196/84 to 189/78 and the presumptive admission score for black applicants from 192/80 to 189/78. P-49. The presumptive denial score for nonminorities was 192/80, and the presumptive denial score for blacks and Mexican Americans was 179/69. Thus, the presumptive denial score for nonminorities was higher than the presumptive admission score for minorities.
Additionally, the law school admissions committee had different procedures for the review of nonminority and minority files in the discretionary zone. Nonminority files were divided into stacks of thirty, which were reviewed by three members of the admissions committee.[26] Each person on the three-person subcommittee voted, on an individual basis with no verbal or written explanation, to offer admission to a set number of applicants from within the stack of thirty files.[27] After the three members completed their independent screening of the files, Johanson compiled a master tally sheet reflecting the number of votes received by each applicant in the group of thirty-five. See, e.g., P-73. Subject to Johanson's review, those applicants that received two or three votes were offered admission.[28] In 1992, the law school made an average of nine offers of admission per stack. P-58. Those who received no votes were automatically denied admission at that time.[29] The law school sent a letter offering applicants who received one vote a place on the waiting list.
The minority subcommittee reviewed the minority files. In theory, each member of the subcommittee was to be part of the three-person subcommittees that reviewed the nonminority files. The testimony reflected, however, that in 1992 Aleman was not on any of the nonminority screening subcommittees. Compare D-362 with Johanson, vol. 6 at 26. According to the testimony, instead of each member of the minority subcommittee performing an individual review of the minority files, as was the procedure for review of nonminority files, the minority subcommittee met as a group and reviewed each minority applicant's file.[30] The subcommittee did not review a set number of files at each meeting but, instead, made as many decisions as the members felt comfortable with until their "decision-making powers started to wane." Johanson, vol. 5 at 30. Resident presumptive denial minority files were screened exclusively by Johanson and Hamilton. Id. at 25.
The members of the minority subcommittee attended the meeting of the full committee and provided the full committee with a summary of the files the subcommittee believed to be good applicants for admission. Wellborn, vol. 24 at 18. Although the evidence *563 reflected that the subcommittee shared general information about the minority pool of applicants with the full committee, the minority subcommittee's admission decisions on individual applicants were virtually final.[31]
C. Admission Goals and Guidelines
The law school is the State's premier law school and is top-rated nationally. The cost of a legal education at the law school, a state-supported institution, is inexpensive in comparison to other schools of its caliber and, therefore, a bargain for the quality of education the law school's students receive. As a consequence, over 4000 applicants to law school each year compete for approximately 500 available seats.[32]
In selecting the entering class, the law school admissions committee has two specified requirements it must achieve. First, state law mandates the percentage of nonresidents that may be included in the entering class. In 1992, the law school was prohibited from having more than fifteen percent nonresidents in the entering class.[33] The other fixed figure to which the admissions committee must adhere has been set by the Board of Regents. This mandate requires the entering class to be composed of at least 500 students.
In addition to these established figures, the law school attempts to meet the targets established by the Office of Civil Rights through the Texas Plan of ten percent Mexican American students and five percent black students in an entering class. Johanson, vol. 4 at 10. These numbers reflect an effort to achieve an entering class with levels of minority enrollment generally consistent with the percentages of black and Mexican American college graduates. The OCR figures, however, are aspirations only, subject to the quality of the pool of applicants. Johanson, vol. 4 at 9; Goode, vol. 9 at 12-13.
Personal interviews are not part of the law school's admission process.[34] Therefore, the law school must make its decision based on the information provided in the applicant's file, which, in addition to the application form and LSDAS material, may include a personal statement or letters of recommendation. The law school used the TI as an administrative tool to order candidates for review in the admissions process. However, the law school did not rely solely on the TI as the basis for admissions decisions but instead used it to create presumptions that could be overcome upon individual review of the files.[35] The importance of individual review stems from the fact that the applicants selected for admission come from a relatively narrow band within the full range of scores, and a difference of few points does not necessarily correlate with more successful work in law school. Johanson, vol. 3 at 11; Stein, vol. 18 at 15. Further, the TI does not adequately reflect the qualifications and characteristics a law school should consider in developing a diverse student body, which provides substantial educational benefit for all members of a law school class. Brest, vol. 22 at 14.
*564 III. THE PLAINTIFFS
In 1992, Hopwood, Elliott, Carvell, and Rogers applied for admission to the law school. Hopwood is a white female; Elliott, Carvell, and Rogers are white males. None of the plaintiffs are Mexican American and all are residents of Texas.[36]
A. Cheryl Hopwood
Cheryl Hopwood had a TI of 199, which placed her in the resident presumptive admit range. Hopwood's TI reflects a 3.8 grade point average and an LSAT score of 39.[37] Hopwood's application indicates she received an associate's degree in accounting from Montgomery County Community College in May 1984 and a bachelor's degree in accounting from California State University in Sacramento in 1988. The application further indicates she is a certified public accountant in California, she worked twenty to thirty hours a week while obtaining her undergraduate degree, and she was active in Big Brothers and Big Sisters in California. P-145. Hopwood submitted an additional letter to the law school dated January 22, 1992, requesting permission to attend law school on a limited basis the first year, if accepted, because of the needs of her child, who had been born with cerebral palsy.[38] Hopwood's application file contains no letters of recommendation.[39] Additionally, her responses to the questions are brief and do not elaborate on her background and skill. She provided no personal statement with the application.[40]
After his initial review of Hopwood's file, Johanson dropped her from the presumptive admission zone to the discretionary zone because, in his evaluation, she had not attended schools that were academically competitive with those of the majority of the applicants, had a large number of hours at junior colleges, and was able to maintain a high GPA although working a substantial number of hours.[41] Her file was subsequently reviewed by a three-member subcommittee of the admissions committee, which was comprised of Associate Dean Michael Sharlot, Dean Hamilton, and a law student. P-217 (Answer to int. 3). Because Hopwood received only one vote as result of the subcommittee review, the law school sent her a letter, dated April *565 8, 1992, offering her a place on the waiting list.[42]
The letter, which stated "[w]e regret that we cannot grant you admission to the 1992 entering class of the Law School at this time," instructed Hopwood to return the attached form to the law school within three weeks if she wished to be placed on the waiting list. P-145. The letter further instructed Hopwood not to put her name on the list if she would not be able to accept an offer of admission as late as August. Hopwood testified she subsequently called the law school admissions office and was told offers could be made from the waiting list through the first week of school. Hopwood, vol. 8 at 11-12. Hopwood did not put her name on the list because personnel in the law school's admissions office could provide no information regarding the likelihood of admittance from the list and Hopwood did not believe she would be in a position to make last minute arrangements for her special childcare needs if she were admitted either just before or in the first week of classes. Hopwood, vol. 8 at 12.
The Court finds that, under Hopwood's circumstances, she was effectively denied admission when she received the April 8 letter. Her failure to accept a position on the waiting list or to seek a deferral of admission until the following year, which information the Court notes is not included in the law school's April 8 letter to Hopwood, does not negate this fact.[43]
B. Kenneth Elliott
Kenneth Elliott applied with a TI of 197, representing a GPA of 2.98 and an LSAT score of 167. Elliott's application indicates he received a B.B.A. in accounting from the University of Texas in 1984, is a certified public accountant, and has worked as an auditor or examiner for state agencies since receiving his undergraduate degree. P-153. In addition to his personal statement, Elliott's file contains two letters of recommendation from employment supervisors.
In the discretionary zone of nonminority applicants, Elliott's file was reviewed by a subcommittee of three that included Johanson. D-332 at A-33. Elliott received no votes, and the law school sent him a denial letter dated April 11, 1992. P-153. In July 1992, Elliott's father wrote a letter to Dean Mark Yudof in which he requested that Elliott's application for admission be reconsidered. P-165. Elliott's father further stated that Elliott did not know he was writing the letter and that Elliott's "friends and family all feel that he was not accepted to U.T. because of limited openings at U.T. due to mandatory minority and women quotas which use a large percentage of the openings."[44] The dean referred the letter to Hamilton, who informed Elliott's father that although she was not at liberty to discuss Elliott's application, she would pursue the matter with Elliott if Elliott felt he had been treated unfairly. Hamilton, vol. 2 at 67. Hamilton testified she telephoned Elliott, told him she had received a letter on his behalf, and invited him to come to her office to visit. Id. at 67-68. Hamilton testified Elliott canceled the first appointment and she scheduled a second appointment, which she canceled. Hamilton testified she subsequently called him back and told him she was placing him on the waiting list.[45] Elliott, however, testified *566 he had no further conversations with anyone at the law school after the failed meetings and did not know he had been placed on the waiting list. Elliott, vol. 7 at 21.
Hamilton testified that on August 24, she decided to grant Elliott an offer of admission, left a message on his answering machine, and instructed admissions personnel to continue to try to reach him. Hamilton, vol. 2 at 58-59. Hamilton stated that approximately a week later, after classes had begun, Elliott returned her call but indicated it was impossible for him to attend school at that time. Id. at 59-60. However, in Hamilton's affidavit, submitted to this Court as part of the pretrial motions, Hamilton stated that Elliott never responded to her phone calls. D-447 (Supp.Decl. of Hamilton at 3). Further, Elliott's file contains no letters either notifying him of his placement on the waiting list or his admission to school, despite the existence of such documentation for others offered admission from the waiting list late in the process.
The Court finds that Elliott had to have realized, at minimum, his application was under reconsideration when an assistant dean initially contacted him. However, being offered a position on the waiting list, as the Court has already found, is not equivalent to admission. To determine whether Elliott actually received an offer of admission, the Court must evaluate the conflicting testimony of Elliott and Hamilton. The discrepancies in Hamilton's affidavit and trial testimony, as well as the law school's lack of documentation of Elliott's status, weigh in Elliott's favor.[46] Accordingly, the Court finds that Elliott was not notified of his admission to law school.
In 1992, Elliott also applied to Baylor School of Law and Texas Tech School of Law. He was denied admission to Baylor. Although accepted at Texas Tech, a state university, Elliott declined the offer of admission by letter dated June 2, 1992. See D-401.
C. Douglas Carvell
Douglas Carvell had a TI of 197, which was based on an undergraduate GPA of 3.28 and an average LSAT score in the 76th percentile.[47] His application reflects that in 1991 he received his B.A. in political science from Hendrix College in Conway, Arizona. P-151. The LSDAS report indicates Carvell ranked 98th in his class of 247 at Hendrix College. P-151; D-336 at A-49. Carvell provided detailed responses to the application questions on typewritten attachments to his application. Carvell's file included three letters of recommendation, one from a professor at Hendrix College that compliments his intellectual abilities but describes his performance as uneven, disappointing, and mediocre. P-151.
Because Carvell's TI placed him in the nonminority discretionary zone, his file was reviewed by a subcommittee of three. He received no votes from the two faculty members on the subcommittee, Professors Steven Goode and Mark Gergen, but did get one favorable vote from a student member of the committee. See D-335, D-336. Therefore, by letter dated April 15, 1992, the law school offered him a position on the waiting list, which he accepted. While he was on the waiting list, Carvell's file was reviewed by Associate Dean Michael Sharlot, a member of the admissions committee. Sharlot did not vote to admit Carvell from the waiting list. D-334 at A-43-A-44. By letter dated July 16, 1992, the law school denied Carvell admission. P-151.
In addition to the law school, Carvell applied for admission to Southern Methodist University School of Law and Vanderbilt *567 School of Law. He was denied admission to Vanderbilt, but was accepted at SMU, where he has completed his first year of law school. Carvell, vol. 10 at 6-7. Carvell also applied to the University of Texas School of Business and was denied admission. Id. at 12. At SMU, Carvell is pursuing a master's of business administration in a joint program with the SMU law school. Id. at 6.
D. David Rogers
David Rogers had a TI of 197 based on his undergraduate GPA of 3.13 and an LSAT score of 166. In the early to mid-1980s, Rogers attended the University of Texas as a student in Plan II, an honors program. However, in 1985, he was dismissed because of his poor scholastic performance. Rogers, vol. 11 at 55. Rogers subsequently attended the University of Houston-Downtown and received an undergraduate degree in professional writing in 1990. P-171; Rogers, vol. 11 at 56. In 1992, Rogers received an advanced degree in professional writing from the University of Southern California. P-171. Rogers noted on his law school application that "as a white who attended an allminority school for several years, and who was raised by a single mother, I have an unusual understanding of the challenges faced by women and minorities." P-171. Rogers's application file contains no letters of recommendation. P-171; see also D-335 at A-46-A-47.
Rogers received no votes from any member of the subcommittee that reviewed his file in the nonminority discretionary zone. By letter dated April 7, 1992, he was denied admission to the law school. P-171.
IV. DISCUSSION
A. Ripeness and Standing
As a preliminary matter, the defendants contest the ripeness of two of the plaintiffs' claims and the standing of all plaintiffs to bring this cause of action.[48] With regard to Hopwood and Elliott, the defendants argue their claims are not ripe because neither was denied admission.[49] As stated above, the Court has found both Hopwood and Elliott were, in effect, denied admission to the law school. Therefore, a ripe controversy exists between these two plaintiffs and the defendants.
The defendants contend Hopwood lacked standing to challenge the admissions policy because she failed to accept a position on the waiting list or to ask for deferred admission. Therefore, according to the defendants, she has failed to exhaust the administrative procedures available to her. The defendants further contend all plaintiffs lack standing in that none can show they would have been granted admission absent the challenged admissions policies.[50]
To have standing to challenge a governmental action, a plaintiff must demonstrate a concrete "injury in fact," a causal relationship between the injury and the challenged conduct, and a likelihood the injury will be redressed by a favorable decision. Northeastern Fla. Contractors v. City of Jacksonville, ___ U.S. ___, ___ - ___, 113 S. Ct. 2297, 2301-02, 124 L. Ed. 2d 586 (1993). However, the "injury in fact" in an equal protection case involving a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group is the denial of the equal treatment and not the ultimate inability to obtain the benefit. Id. at ___, 113 S.Ct. at 2303.
The defendants assert this exception to requiring plaintiffs to show a direct causal relationship is limited in its application to challenges to the validity of express set-asides or reservations such as those addressed in City of Jacksonville and Bakke. The Court does not read the requirements for standing set forth in City of Jacksonville *568 to be limited in the manner defendants contend. In defining standing as applied in equal protection cases, the Supreme Court reviewed its precedent on the issue. The overarching proposition of the cases the Supreme Court cited in reaching its holding was not that the causal-connection exception applied only to specific set-asides, but that an "injury in fact" stemmed from any governmental barrier that either created a discriminatory obstacle or had the effect of producing unequal access to a governmental benefit.[51] Accordingly, the Court finds all the plaintiffs have standing they have sufficiently alleged that the law school's admission process is the cause of their injury and that a judicial order could redress the injury.[52]
B. Standard of Review
Affirmative action plans based on race trigger strict judicial scrutiny. City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493, 109 S. Ct. 706, 721, 102 L. Ed. 2d 854 (1989); see also Bakke, 438 U.S. at 291, 98 S. Ct. at 2748 (Powell, J.) ("Racial and ethnic distinctions of any sort are inherently suspect and thus call for the most exacting judicial examination."). Further, "the level of scrutiny does not change merely because the challenged classification operates against a group that historically has not been subject to governmental discrimination." Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 273, 106 S. Ct. 1842, 1846, 90 L. Ed. 2d 260 (1986); see also Croson, 488 U.S. at 494, 109 S. Ct. at 722 (reaffirming equal protection analysis is not dependent on the race of those burdened or benefited by a classification).
The defendants contend, however, strict scrutiny is inappropriate in this cause in light of the Supreme Court's holding in Metro Broadcasting v. FCC, 497 U.S. 547, 110 S. Ct. 2997, 111 L. Ed. 2d 445 (1990). In Metro Broadcasting, the Supreme Court held that affirmative action plans adopted pursuant to federal mandates are subject to intermediate scrutiny a determination whether the plans serve important governmental objectives and whether they are substantially related to the achievement of the objectives. Id. at 565, 110 S. Ct. at 3009. The defendants contend that the Texas Plans equate to a federal mandate because they stem from the OCR's insistence on full compliance with Title VI, an objective that is within the power of Congress.[53]
The Court finds the argument unpersuasive. In Metro, the FCC's minority ownership programs had been specifically mandated and approved by Congress. Id. at 563, 110 S. Ct. at 3008. While it is true that Congress has the power to identify and redress the effects of discrimination and has charged the DOE with assuring compliance with Title VI, there is no similar congressional mandate in this cause. Further, the FCC is a licensing body that, pursuant to a congressional mandate, established specific minority ownership policies. The OCR has provided Texas with a number of suggested tools Texas may implement to bring the higher educational system into compliance with Title VI; it has not, however, required *569 the State to adopt any specific procedures. Although the defendants characterize the law school's efforts as pursuant to an OCR "consent decree," the evidence reflects that, to date, the State of Texas' efforts to comply with Title VI have been made voluntarily in an effort to avoid a specific mandate or the loss of federal funding. Ashworth, vol. 13 at 34, 39.
Further, under equal protection analysis, the same level of scrutiny applies to race-conscious affirmative action plans adopted pursuant to consent agreements as to other voluntarily adopted plans. See, e.g., In re Birmingham Reverse Discrimination Employment Litig., 833 F.2d 1492, 1501 (11th Cir.1987), aff'd sub nom. Martin v. Wilks, 490 U.S. 755, 109 S. Ct. 2180, 104 L. Ed. 2d 835 (1989) (Title VII consent decree). Indeed, the most recent circuit court opinion analyzing an affirmative action plan in the education context, specifically a scholarship plan adopted in response to protracted litigation and OCR guidelines, upheld the lower court's application of strict scrutiny as the proper standard for review of the plan. See Podberesky v. Kirwan, 956 F.2d 52, 55 (4th Cir.1992).
The most compelling justification for application of strict scrutiny in this context is to provide assurance that individual rights are afforded the full protection they merit under the Constitution. Only by applying strict scrutiny can a court honestly weigh the validity and necessity of efforts to remedy past wrongs against the rights of otherwise qualified nonminorities affected by the efforts. Although the use of racial classifications is disfavored, there are instances when such classifications serving proper purposes should be upheld. Only through diligent judicial examination can a court determine if a classification is consistent with constitutional guarantees and not related to "illegitimate notions of racial inferiority or simple racial politics." Croson, 488 U.S. at 493, 109 S. Ct. at 721. Accordingly, the Court concludes the law school admissions process must be subjected to a strict scrutiny test under the Equal Protection Clause of the Fourteenth Amendment to protect both the integrity of the process and the important individual rights at issue.[54]
C. Application of Strict Scrutiny
Strict judicial scrutiny involves a determination of whether the law school process served "a compelling governmental interest" and whether the process is "narrowly tailored to the achievement of that goal." See Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 274, 106 S. Ct. 1842, 1847, 90 L. Ed. 2d 260 (1986). The purpose of ascertaining whether a compelling governmental interest exists is to "smoke out" illegitimate uses of race by ensuring that the goal is important enough to use the suspect tool of racial preference. Croson, 488 U.S. at 493, 109 S. Ct. at 721. The narrowly tailored analysis "ensures that the means chosen `fit' this compelling goal so closely that there is little or no possibility that the motive for the classification was illegitimate racial prejudice or stereotype." Id.
1. Compelling Governmental Interest. Both sides expended considerable time and effort at trial on the issue of whether a compelling governmental interest existed sufficient to justify the need for the law school's affirmative action program. The defendants offered a number of reasons as justification for the law school's affirmative action program. These reasons are set forth in the law school's "Statement of Policy on Affirmative Action":[55]
*570 To achieve the School of Law's mission of providing a first class legal education to future leaders of the bench and bar of the state by offering real opportunities for admission to members of the two largest minority groups in Texas, Mexican Americans and African Americans;
To achieve the diversity of background and experience in its student population essential to prepare students for the real world functioning of the law in our diverse nation;
To assist in redressing the decades of educational discrimination to which African Americans and Mexican Americans have been subjected in the public school systems of the State of Texas;
To achieve compliance with the 1983 consent decree entered with the Office of Civil Rights of the Department of Education imposing specific requirement for increased efforts to recruit African American and Mexican American students;
To achieve compliance with the American Bar Association and the American Association of Law Schools standards of commitment to pluralist diversity in the law school's student population.
D-362. Although all are important and laudable goals, the law school's efforts, to be consistent with the Equal Protection Clause, must be limited to seeking the educational benefits that flow from having a diverse student body and to addressing the present effects of past discriminatory practices. See Bakke, 438 U.S. at 313; 98 S. Ct. at 2760 (environment fostering robust exchange of ideas makes goal of diversity "of paramount importance in the fulfillment of [a university's] mission"); United States v. Paradise, 480 U.S. 149, 167, 107 S. Ct. 1053, 1064, 94 L. Ed. 2d 203 (1987) ("The government unquestionably has a compelling interest in remedying past and present discrimination by a state actor."); Podberesky, 956 F.2d at 57 (race-related remedy may be used in attempt to remedy effects of past discrimination). Accordingly, the Court will evaluate the program in light of these goals.[56]
The plaintiffs do not dispute that under the holding of Bakke, obtaining the benefits that flow from a racially and ethnically diverse student body is a compelling interest justifying the use of racial preferences.[57] Nevertheless, the plaintiffs suggest that under more recent Supreme Court decisions, the only compelling interest recognized for race-conscious programs is remedying the past effects of racial discrimination.[58] However, none of the recent opinions is factually based in the education context and, therefore, none focuses on the unique role of education in our society.[59] Absent an explicit statement from the Supreme Court overruling Bakke, this *571 Court finds, in the context of the law school's admissions process, obtaining the educational benefits that flow from a racially and ethnically diverse student body remains a sufficiently compelling interest to support the use of racial classifications.
The defendants presented evidence, which included the testimony of deans from law schools across the country and the testimony of former and current law students, that the benefit to the law school educational experience derived from a diverse student population is substantial. See, e.g., Brest, vol. 22 at 22-23; Stein, vol. 18 at 20-21; Bollinger, vol. 16 at 23-26; Spector, vol. 15 at 9-10. Additionally, several professors testified regarding the educational benefit of having a diverse group of students in the classroom setting. See, e.g., Goode, vol. 9 at 20-21; Yudof, vol. 21 at 59-60. According to the evidence presented at trial, without affirmative action the law school would not be able to achieve this goal of diversity. Had the law school based its 1992 admissions solely on the applicants' TIs without regard to race or ethnicity, the entering class would have included, at most, nine blacks and eighteen Mexican Americans.[60]
Although under current law the goal of diversity is sufficient by itself to satisfy the compelling governmental interest element of strict scrutiny, the objective of overcoming past effects of discrimination is an equally important goal of the law school's affirmative action program. The plaintiffs have asserted that any past discrimination against blacks occurred so long ago, it has no present effects and that the law school has never discriminated against Mexican Americans.[61] The plaintiffs further assert the Court should limit its review of past discrimination to official acts and policy of the University of Texas law school and should not consider discrimination in Texas' educational system as a whole. As support for this contention the plaintiffs cite Croson, in which the Supreme Court struck down a city set-aside program that required thirty percent of city contracts to be subcontracted to minority businesses. 488 U.S. at 499, 109 S.Ct. at 724 ("Like the claim that discrimination in primary and secondary school justifies a rigid racial preference in medical school admissions, an amorphous claim that there has been past discrimination in a particular industry cannot justify the use of an unyielding racial quota.").
Recently, however, the Supreme Court held that a system of higher education is under an affirmative duty to eliminate every vestige of racial segregation and discrimination in its educational system and to reform those policies and practices that required or contributed to separation of the races. United States v. Fordice, ___ U.S. ___, ___, 112 S. Ct. 2727, 2743, 120 L. Ed. 2d 575 (1992). Thus, it appears the Supreme Court has recognized that the restrictions it has applied in ascertaining the present effects of past discrimination in the employment context, specifically the prohibition against remedying effects of "societal discrimination" and discrimination implemented by another governmental unit, are not appropriate in the education context. See also Podberesky v. Kirwan, 838 F. Supp. 1075, 1098 & n. 79 (D.Md. 1993). "Applicants do not arrive at the admissions office of a professional school in a vacuum," and, in fact, have ordinarily been students in an educational system for sixteen years. Geier v. Alexander, 801 F.2d 799, 809 (6th Cir.1986). The Court believes, therefore, the residual effects of past discrimination in a particular component of a state's educational system must be analyzed in the context of the state's educational system as a whole. The State's institutions of higher education are inextricably linked to the primary and secondary schools in the system. Accordingly, *572 this Court has not limited its review to the law school or Texas' higher education system in evaluating the present effects of past discrimination.[62] However, were the Court to limit its review to the University of Texas, the Court would still find a "strong evidentiary basis for concluding that remedial action is necessary." Podberesky v. Kirwan, 956 F.2d at 55.
As discussed above, Texas' long history of discrimination against blacks and Mexican Americans in public education is chronicled in court opinions, the findings of the OCR, and the continuing desegregation suits against the State.[63] The State of Texas engaged in overt discrimination against blacks until the practices were forcibly dismantled in the relatively recent past. Discrimination in education was at the center of official discrimination against black Texans. Additionally, the University of Texas has a history of racial discrimination.
Similarly, the State has subjected Mexican Americans to discriminatory practices in the education area as reflected in the findings of unlawful de jure discrimination in the numerous desegregation lawsuits. Less documentation exists of overt official discrimination against Mexican Americans than against blacks at the University of Texas. However, the legacy of Texas' discriminatory practices continues to hinder the University of Texas' efforts to attract qualified Mexican American students.
In recent history, there is no evidence of overt officially sanctioned discrimination at the University of Texas. The evidence reflects that the university has made genuine efforts in the last decade to end discrimination by recruiting and maintaining minority faculty members and students and condemning racial incidents occurring on campus or involving student organizations. Despite these efforts, however, the legacy of the past has left residual effects that persist into the present. The evidence presented at trial indicates those effects include the law school's lingering reputation in the minority community, particularly with prospective students, as a "white" school; an underrepresentation of minorities in the student body; and some perception that the law school is a hostile environment for minorities.
The university's efforts to recruit minorities has led to a modest increase in the number of minorities attending the law school. However, admissions and recruitment personnel face difficulties in attracting qualified minorities to enroll in the law school. These difficulties stem from negative perceptions of the racial climate at the law school as a result of past discrimination.[64] Because of the law school's legacy of discrimination, it must overcome a perception that it is a "white institution." Wright, vol. 19 at 33-34. Recent racial incidents, although not officially sanctioned by the school, have reinforced the perception that the university is hostile to minorities and has hurt its ability to recruit minority students. Wright, vol. 19 at 29-31. An affirmative action program is therefore necessary to recruit minority students because of the past discrimination.
The effects of the State's past de jure segregation in the educational system are reflected in the low enrollment of minorities in professional schools, including the law school. The OCR findings and the OCR's continuing review of Texas' efforts to desegregate demonstrate the pervasive nature of past discrimination in the higher education *573 system.[65] As a result of policies of official discrimination in the Texas higher education system, a generation of blacks and Mexican Americans who are the parents of those presently of law school age were denied meaningful opportunities for higher education. Glenn, vol. 23 at 51-53; Romo, vol. 17 at 63-64; Wright, vol. 19 at 45-47. The denial of these opportunities to the generation of minority parents bears a causal connection to the diminished educational attainment of the present generation. Glenn, vol. 23 at 51-52; Romo, vol. 17 at 53-54.
Further, many public schools in Texas continued to have a substantial degree of racial and ethnic segregation during the 1970s and 1980s, the decades in which the majority of 1992 law school applicants attended primary and secondary schools. Glenn, vol. 23 at 48-51; D-379. This segregation has handicapped the educational achievement of many minorities. The ultimate effect of the inferior educational opportunity, combined with the lower socioeconomic status of minorities in Texas, is a disproportionately smaller pool of minority applicants to law school. D-379 at 6-7; see also supra note 3.
In addition, some minority students enrolled in the law school feel isolated even with the current commitment to affirmative action and diversity and are often hesitant to participate in class discussion when they are the sole minority or one of a few minorities in a class. Longoria, vol. 15 at 32-34; Rodriguez, vol. 17 at 24-25. Some minority students continue to perceive a hostile racial environment on the campus, which they assert is reflected in insensitive comments by fellow students and faculty. Bell, vol. 14 at 16, 29-34; Escobedo, vol. 14 at 41-42; Longoria, vol. 15 at 32-24.
Accordingly, despite the plaintiff's protestations to the contrary, the record provides strong evidence of some present effects at the law school of past discrimination in both the University of Texas system and the Texas educational system as a whole. Therefore, the Court finds the remedial purpose of the law school's affirmative action program is a compelling governmental objective.
2. Narrowly Tailored. The Court must next decide if the admissions process was narrowly tailored to achieve the goals of diversity and overcoming the present effects of past discrimination. This determination requires the application of four factors: the efficacy of alternative remedies; the flexibility and duration of the relief; the relationship of the numerical goals to the percentage of minorities in the relevant population; and the impact of the relief on the rights of third parties. See United States v. Paradise, 480 U.S. 149, 171, 107 S. Ct. 1053, 1066, 94 L. Ed. 2d 203 (1987).
The defendants have shown it is not possible to achieve a diverse student body without an affirmative action program that seeks to admit and enroll minority candidates. Brest, vol. 22, at 15. As stated above, in 1992, the entering class would have included at most nine blacks and eighteen Mexican Americans, had the review of minorities been limited to those applicants in the presumptive admit and discretionary zones for white applicants. D-441; Yudof, vol. 21 at 44; Johanson, vol. 6 at 38. These numbers reflect the maximum potential and assume no adverse affect on the number of applicants stemming from the abandonment of affirmative action.
Further, the record indicates the ultimate effect of abandoning affirmative action at the law school would be to redirect minorities to the historically separate state law school at Texas Southern University, thereby resegregating the law school.[66] Alternatives, such as minority scholarships and increased minority *574 recruitment, while effective tools in conjunction with the affirmative action program, would not be effective means by themselves to meet the compelling governmental interests of true diversity and remedying the effect of past de jure segregation. In fact, the record in this case demonstrates that, without affirmative action, the perception of the law school as a "white" institution would be exacerbated, which would compound the difficulties of attracting top minority students. Wright, vol. 19 at 36-37; Goode, vol. 9 at 19; Rodriguez, vol. 17 at 25.
The evidence shows that despite genuine efforts to end discrimination, the legacy of the past continues to hinder the law school's efforts to attract highly qualified minority students. Accordingly, the Court finds affirmative action in the law school's admissions program is an effective and necessary means to overcome the legacy of the past and to achieve the diversity necessary for a first-class university.
The plaintiffs argue the admissions program establishes the functional equivalent of an impermissible quota system in which the law school attempts to camouflage quotas through the use of the term "goals." The plaintiffs contend because the admissions committee knows the approximate number of students in an incoming class, the five percent black and ten percent Mexican American figures translate into specific numbers.
The admissions data from the past ten years shows variations in the admission figures for the two groups receiving admissions preferences at the law school blacks and Mexican Americans. The data reflects that between 1983 and 1993, the percentage of black admissions varied from a low of 3.2 percent, occurring in 1987, to a high of 9.3 percent in 1983. The percentage in 1992 was 8.0 percent. Mexican American admissions varied from a low of 10 percent, occurring in both 1983 and 1993, and a high of 14.3 percent occurring in 1984. The percentage in 1992 was 10.7.[67]
An illegal quota, as defined by the Supreme Court, exists when a fixed number of seats are set aside or an unyielding number is set to achieve a goal. See Bakke, 438 U.S. at 288, 98 S. Ct. at 2747 (defining quota as fixed number of seats set aside); see also Metro Broadcasting, 497 U.S. at 599, 110 S. Ct. at 3027 (equating quota with a "fixed quantity set aside"); Croson, 488 U.S. at 499, 109 S. Ct. at 724-25 (describing thirty percent minority set-aside as rigid and unyielding quota); Fullilove v. Klutznick, 448 U.S. 448, 498, 100 S. Ct. 2758, 2785, 65 L. Ed. 2d 902 (1980) (equating quota with set-aside). Though it is evident from the admissions figures that the percentages of desired minorities in a class derived from the OCR investigation served as guidelines, the law school did not rigidly and inflexibly apply the numbers. Instead, the percentages fluctuate randomly, albeit within a relatively narrow range, and show no consistent pattern of increase. In some years, the law school has failed to meet its goals because of the relatively weak strength of the minority applicant pool. Goode, vol. 9 at 13-17. No evidence was presented at trial that the law school granted a set-aside for any particular group or that competition for any specific seat in the class was closed to some students because of race or ethnicity.[68] Accordingly, the Court finds the 1992 admissions process did not use an illegal quota but was, in fact, flexible in achieving its goals based on the strength of the minority applicant pool.
*575 As for duration, the law school has not stated precisely how long it envisions maintaining its affirmative action admissions program. However, in the 1990s, as the minority applicant pool improved, the admissions committee made the decision not to admit greater numbers of minority students but to attempt to close the gap in credentials of minority and nonminority students. Wellborn, vol. 24 at 31-35; Goode, vol. 9 at 7, 17-18. Therefore, in 1992, despite a significant increase in the number of minority applicants from the previous years, the law school's minority admissions remained relatively stable. Johanson, vol. 6 at 13-14; P-47; D-438; D-439.
The current objective of the law school, as articulated at trial, is to continue to narrow the gap to the point where affirmative action will not be required to achieve a representative percentage of minorities in the entering classes.[69] The evidence reflects that the law school admissions committee regularly reviews and adjusts the remedy to evaluate its necessity and efficacy.[70] Certainly, an indefinite program would violate the Equal Protection Clause. However, the law school's use of the program until the OCR has determined Texas is in compliance with Title VI and until the gap in minority and nonminority credentials has narrowed such that the State will remain in compliance with Title VI without the need for affirmative action does not offend the Constitution. See Podberesky, 764 F.Supp. at 376.
The third factor, the relationship of the numerical goals to the relevant population, is easily satisfied under these facts. The law school has not attempted to set goals that reflect the percentage of minorities in the general population or the percentage of minorities attending college. Instead the law school's goals for minority enrollment are generally in line with the percentages of black and Mexican American college graduates in the State of Texas. These goals stem from the OCR investigation and the resulting Texas Plans. Goode, vol. 9 at 12-13; Johanson, vol. 4 at 9-12. They are reasonable and logically related to the size of the relevant pool of minority prospects for higher education.
The final factor, the impact of the procedure on the rights of innocent third parties, is the most difficult to evaluate. By definition, if one person is given preferential treatment based on race or ethnicity to overcome a heritage of past societal wrongs, another person is penalized. However, the person penalized or that person's ancestors may never have discriminated against the preferred race or ethnicity. Although the past history of societal discrimination in certain institutions may justify the remedy, in the end, individuals pay the price. Therefore, it is imperative that the mechanics of any program implementing race-based preferences respect and protect the rights of individuals who, ultimately, may have to sacrifice their interests as a remedy for societal wrongs.
In 1992, admissions subcommittees of three reviewed all the nonminority files. With the exception of Johanson and Hamilton, none of the members of the subcommittees reviewed the individual minority files. Nonminority applicants receiving no votes were denied admission without any further consideration or any direct comparison to minority applicants. In fact, as early as February 28, 1992, the law school had sent denial letters to 201 resident applicants, none of whom were black or Mexican American. P-43. By March 24, 1992, 718 denial letters had been sent to resident applicants, all to nonminority applicants. P-52. The law school did not reject any minority applicants until later in the admissions process. P-60.
The lack of individual comparison between minority and nonminority files resulted primarily *576 from the separate admissions procedures for minorities and nonminorities in the discretionary zone; this is the aspect of the procedure that is at issue with respect to the four plaintiffs in this cause, who were evaluated in the discretionary zone. However, the setting of different presumptive denial lines for minorities and nonminorities creates a similar problem: some nonminority applicants who fell below the nonminority presumptive denial line, though having a higher score than minority applicants placed in the discretionary zone, were rejected early in the process with no comparison to the individual minority applicants.[71] Further, although a presumptive denial score was established for minorities, in 1992, every minority applicant not admitted from the presumptive admit category was treated as if in the minority discretionary zone. P-103.
The defendants defend the system used in 1992 as more effective in controlling the use of race for limited, legitimate purposes than the previous procedure of commingling minority and nonminority files in the stacks of thirty, a procedure that allowed individual reviewers complete discretion on the extent, if any, to implement affirmative action. Wellborn, vol. 24 at 8-17. The defendants assert the 1992 process was also more efficient in that minority files were reviewed by the persons most experienced in reviewing and evaluating minority files. Goode, vol. 9 at 3. The defendants concede that in 1992, with the exception of Johanson and Hamilton, no members of the general admissions committee reviewed individual minority files. However, they contend that the full committee was sufficiently apprised of the relative strengths of the minority and nonminority applicant pools through information provided by the minority subcommittee. Because the minority subcommittee shared this information with the full committee, the defendants argue that the full committee could reach a consensus on the weight to give race in the admissions process and evaluate the nonminority stacks of files with the relative strengths of the applicant pools in mind. Wellborn, vol. 24 at 10, 14-16; Goode, vol. 9 at 8-9. The defendants also defend the law school's process as consistent with similar processes used at major law schools across the country.[72] However, review of admissions *577 procedures for equal protection violations requires a fact-specific inquiry. The fact that other schools may use processes with similar components does not resolve the issue of whether the defendants deprived the four plaintiffs in this cause of equal protection under the law.
In Bakke, Justice Powell stated that although race or ethnicity could be a "plus" factor in consideration of a particular applicant, race or ethnicity should "not insulate the individual from comparison with all other candidates for the available seats." Bakke, 438 U.S. at 317, 98 S. Ct. at 2762. Justice Powell further discussed the importance of assuring applicants that they were treated as individuals in the admissions process:
The applicant who loses out on the last available seat to another candidate receiving a "plus" on the basis of ethnic background will not have been foreclosed from all consideration for that seat simply because he was not the right color or had the wrong surname. It would mean only that his combined qualifications, which may have included similar nonobjective factors, did not outweigh those of the other applicant. His qualifications would have been weighed fairly and competitively, and he would have no basis to complain of unequal treatment under the Fourteenth Amendment.
Id. at 318, 98 S. Ct. at 2762. The defendants contend this express language is limited in its application to only those affirmative action programs that, like the one at issue in Bakke, use a quota system to achieve diversity. They assert that Justice Powell's reasoning calling for a one-on-one comparison may have application when the primary objective is to obtain a diverse class based on a number of different qualifications. However, this reasoning does not apply, according to the defendants, when a primary objective is to remedy past discrimination. In such circumstances, the defendants maintain individuals need not be compared one-to-one, as long as the admissions committee had a generalized knowledge of the strengths of the minority and nonminority applicant pools.[73] The Court disagrees.
Overcoming the effects of past discrimination is an important goal for our society. The preservation and protection of individual rights are equally important. Society must be careful not to ignore the latter to achieve the former, for to do so would serve only to perpetuate actions of the type affirmative action attempts to redress. Two wrongs do *578 not make a right; nor does blatant discrimination cure the ills of past discrimination. Indeed, affirmative action that ignores the importance of individual rights may further widen the gap between the races that the law school so diligently attempts to close and create racial hostility. The only proper means of assuring that all important societal interests are met, whether in the context of creating diversity or redressing the ill effects of past wrongs, is to provide a procedure or method by which the qualifications of each individual are evaluated and compared to those of all other individuals in the pool, whether minority or nonminority.
The law school owes a duty to the citizens of Texas to allow access to a legal education to the best qualified applicants. This does not imply that those applicants with the highest numbers or most prestigious pedigrees are necessarily the best qualified. A multitude of factors, as discussed by Justice Powell in Bakke, should be considered in developing the best qualified class from a given group of applicants.[74] "Indeed, the weight attributed to a particular quality may vary from year to year depending upon the `mix' both of the student body and the applicants for the incoming class." Id. at 317-18, 98 S. Ct. at 2762. To achieve the compelling governmental goal of remedying past discrimination, race and ethnicity are factors that deserve "pluses" in the weighing of qualifications. To achieve the compelling governmental goal of diversity, nonobjective qualifications of nonminorities and minorities alike may deserve a similar "plus" factor.[75] Only by comparing the entire pool of individual applicants can both these goals be achieved and the best qualified class of entering law students be admitted.
The law school's 1992 admissions procedure, in theory, was designed to select the best qualified applicants from the thousands of applications it received. In 1992, the law school's affirmative action program involved a determination of those applicants who were the best qualified from the entire minority pool and an attempt to enroll sufficient numbers of those applicants in the entering class to satisfy the compelling governmental objectives at issue. The law school evaluated all nonminority applications through a separate process, with the goal of admitting the best qualified nonminorities. The defendants maintain this bifurcated process does not violate the Fourteenth Amendment because affirmative action is lawful and those minorities selected are evaluated against nonminority applicants by comparison of the general qualifications of the two pools of applicants. The process, however, incorporates no meaningful evaluation between the applicants selected from each pool a crucial element for protection of individual rights.
The Court holds that the aspect of the law school's affirmative action program giving minority applicants a "plus" is lawful. But the failure to provide comparative evaluation among all individual applicants in determining which were the best qualified to comprise the class, including appropriate consideration of a "plus" factor, created a procedure in which admission of the best qualified was not assured in 1992. Under the 1992 procedure, the possibility existed that the law school could select a minority, who, even with a "plus" factor, was not as qualified to be a part of the entering class as a nonminority denied admission. Thus, the admission of the nonminority candidate would be solely on the basis of race or ethnicity and not based on individual comparison and evaluation. *579 This is the aspect of the procedure that is flawed and must be eliminated.
The constitutional infirmity of the 1992 law school admissions procedure, therefore, is not that it gives preferential treatment on the basis of race but that it fails to afford each individual applicant a comparison with the entire pool of applicants, not just those of the applicant's own race.[76] Because the law school's 1992 admissions process was not narrowly tailored, the Court finds the procedure violated the Equal Protection Clause of the Fourteenth Amendment.
D. Effect of Process on Plaintiffs
The next issue the Court must address is whether, but for the manner in which the law school improperly considered race in its 1992 admissions procedure, the plaintiffs would have been offered admission. The defendants argue that the burden is on the plaintiffs to prove they would have been admitted. The plaintiffs argue that once they prove a constitutional violation, the burden shifts to the defendants to establish there was no but-for causation between the unconstitutional procedure and the denial of admission to each plaintiff.
Generally, in cases where a plaintiff establishes a constitutional deprivation, the burden shifts to the defendant to establish a legitimate, nondiscriminatory reason for the action. See, e.g., Carey v. Piphus, 435 U.S. 247, 263, 98 S. Ct. 1042, 1052, 55 L. Ed. 2d 252 (1978) (plaintiff seeking damages for due-process violation must show injuries resulted from denial of due process, not from corresponding justifiable deprivation); Mt. Healthy City Bd. of Educ. v. Doyle, 429 U.S. 274, 287, 97 S. Ct. 568, 576, 50 L. Ed. 2d 471 (1977) (once employee established conduct constitutionally protected, burden shifted to employer to show it would have reached same decision). Justice Powell's opinion in Bakke suggests the same holds true in Title VI discrimination suits when evidence of alternative reasons exists.[77] The Supreme Court has recently taken the analysis one step further in the context of Title VII discrimination cases and held that the failure of a defendant to produce credible evidence of legitimate nondiscriminatory reasons is insufficient to support a finding of discrimination *580 because the "ultimate burden of persuasion" remains at all times with the plaintiff. See St. Mary's Honor Ctr. v. Hicks, ___ U.S. ___, ___, 113 S. Ct. 2742, 2749, 125 L. Ed. 2d 407 (1993). In making this clarification, Justice Scalia stated that a court has no authority to impose liability upon an entity for alleged discriminatory practices unless a factfinder determines, according to proper procedures, that the entity has unlawfully discriminated. Id. at ___, 113 S.Ct. at 2751. Courts have borrowed the burden of proof standards formulated for Title VII in deciding claims brought under statutes prohibiting discrimination by educational institutions receiving federal funding. See, e.g., Elston v. Talladega County Bd. of Educ., 997 F.2d 1394, 1404 (11th Cir.1993) (Title VI disparate impact claim). But see Cohen v. Brown Univ., 991 F.2d 888, 901-02 (1st Cir.1993) (Title IX plaintiff bears burden of showing disparity and unmet interest).[78]
The Court finds that the cue in Justice Powell's opinion and the holdings of other constitutional cases suggest that a burden allotment similar to that in Title VII cases is appropriate. Therefore, because the plaintiffs established a prima facie case they proved the law school's 1992 admissions procedure was constitutionally flawed the burden shifted to the defendants to establish legitimate grounds for the decision not to admit these plaintiffs, notwithstanding the procedure followed. Unlike the university in Bakke, the defendants in this cause did not concede the plaintiffs would have been admitted had their applications been compared on a individual basis to minority files. Instead, they offered legitimate, nondiscriminatory reasons for denying each of the plaintiff's applications. D-332 (Hopwood, Elliott); D-334 (Hopwood, Carvell); D-335 (Carvell, Rogers); D-336 (Carvell). Further, a statistical analysis of the 1992 admissions data supports the defendants' assertion of the non-race based weaknesses in the plaintiffs' applications. D-338 at A-60-A-71.
The plaintiffs placed in evidence a chart created by the law school that depicts the TIs of all 1992 applicants and whether they were offered or denied admission. See P-139. The chart distinguishes minority and nonminority applicants, as well as residents and nonresidents.[79] The chart emphasizes the disparity in TIs between resident minority and nonminority applicants: the highest nonminority TI was 220, the highest black TI was 199 (the same as Hopwood's TI), and the highest Mexican American TI was 208. In the resident nonminority category, of fifty-one applicants with TIs of 199, six were denied admission. Additionally, the law school denied admission to ten nonminorities with TIs higher than Hopwood's TI. With regard to minority applicants with TIs of 199, the chart shows one black applicant, who was admitted, and three Mexican American applicants, all who were admitted.[80] With regard to a TI of 197, the TI shared by the other three plaintiffs, of fifty-seven resident nonminority applicants, the law school denied admission to nineteen. Only one black resident fell in this category, who was admitted. No Mexican-American applicants had a TI of 197.
On the other end of the scale, out of four black resident applicants with a TI of 185, one was denied admission. However, the law school offered admission to one nonminority resident with the same TI. Applicants with the lowest TI offered admission were all minorities.[81] However, the lowest nonminority *581 TI was only a couple of points higher at 185.
There are many possible methods of evaluating the numbers on the chart and making comparisons of the applicants' relative TIs. The plaintiffs placed the chart in evidence to show their numerical standing above that of the majority of minorities offered admission. The Court agrees with the plaintiffs that the chart shows a significant disparity in TIs between the minority and nonminority pools. But the visual depiction of this disparity further reinforces the Court's finding that the evaluation of applicants must include other nonobjective factors to achieve the compelling governmental interest of overcoming the past effects of discrimination.
What the chart does not prove, however, is that race or ethnic origin was the reason behind the denial of admission to the plaintiffs. Although the plaintiffs had higher TIs than the majority of minority applicants offered admission, the evidence shows that 109 nonminority residents with TIs lower than Hopwood's were offered admission.[82] Sixty-seven nonminority residents with TIs lower than the other three plaintiffs were admitted.[83]
Additionally, the Court has reviewed the files of the four plaintiffs as well as the files placed in evidence of other applicants reviewed in the discretionary zone, both minority and nonminority. P-146 to P-150, P-155 to P-164 (white applicants admitted); P-224 to P-237 (black and Mexican American applicants admitted). Based on the applications in evidence, it appears the majority of applicants, both minority and nonminority, made considerable effort to inform the admissions committee of their special qualifications through extensive answers to the questions on the application form or through personal statements. See P-146 to P-150, P-155 to P-163, P-225 to P-237. Most files contained one, if not several, letters of recommendation. See, e.g., P-155, 157, 158, 161, 225, 231, 233-236. In fact, of all the applications the Court reviewed, Hopwood's provides the least information about her background and individual qualifications and is the least impressive in appearance, despite her relatively high numbers. The files further reveal that both minorities and nonminorities were offered admission from the waiting lists. See P-146, 148, 156, 158, 162 (nonminority); P-231, 285 (minority).
In reviewing these files, the Court appreciates the difficulty of the task facing the admissions committee each year. Evaluation of applications involves both objective and subjective factors, and the Court is aware that some evaluators could use subjectivity to conceal discriminatory motives. As a general rule, however, judges are not as well suited to evaluate qualifications of applicants as those who are familiar with the process and have many years of experience evaluating applications. See Odom v. Frank, 3 F.3d 839, 847 (5th Cir.1993). The Court's review revealed a group of applicants with varying backgrounds and accomplishments, but none so clearly better qualified, in the Court's view, as to require that individual's selection over that of another in the group.[84] The Court sees no disparities in the applications of the admitted minorities when compared to those of the plaintiffs "so apparent as virtually to jump off the page and slap [the Court] in the face." Id. Without such a disparity, the Court cannot and will not substitute its views for those of admission committee members with years of experience and expertise in evaluating the law school applications. See id.
Therefore, the Court finds the defendants have met the burden of producing credible evidence that legitimate, nondiscriminatory grounds exist for the law school's denial of admission to each of the four plaintiffs and that, in all likelihood, the plaintiffs would not have been offered admission even under a constitutionally permissible process. The plaintiffs, who maintain the ultimate burden *582 of persuasion, have failed to prove otherwise.[85] The Court simply cannot find from a preponderance of the evidence that the plaintiffs would have been offered admission under a constitutional system.
The Court is mindful that the ultimate burden on the plaintiffs is a difficult and, perhaps, almost impossible obstacle to overcome in a case of this nature.[86] However, the Court may not ignore the precedent of other constitutional cases because, as a practical matter, the burden may be too difficult for plaintiffs to overcome.
E. Relief and Damages
The plaintiffs seek declaratory and injunctive relief, as well as compensatory and exemplary damages. Because the Court has found the admission procedure the law school used in 1992 was not narrowly tailored in that it impermissibly and unnecessarily harmed the rights of the plaintiffs, the Court will enter a judgment providing the plaintiffs with their requested declaratory relief. Specifically, the Court will enter judgment that the law school's use of the separate evaluative processes for minority and nonminority applicants in the discretionary zone violated the Fourteenth Amendment.
However, "the right to equal treatment guaranteed by the Constitution is not coextensive with any substantive rights to the benefits denied the party discriminated against." Heckler v. Mathews, 465 U.S. 728, 739, 104 S. Ct. 1387, 1395, 79 L. Ed. 2d 646 (1984). As discussed above, the Court cannot find from a preponderance of the evidence that the plaintiffs would have been admitted under a constitutional system. The Court, therefore, will not order injunctive relief. Nor does the Court find prospective injunctive relief necessary in light of the law school's voluntary change to a procedure, which on paper and from the testimony, appears to remedy the defects the Court has found in the 1992 procedure.[87] Further, neither a plaintiff denied admission under the new system nor evidence of the practical application of the new procedure is before this Court.
Although the plaintiffs have failed to prove an injury-in-fact, they have proved they were deprived of their right to equal treatment. The appropriate relief for a denial of equal treatment in a discriminatory government *583 program is a remedy mandating equal treatment.[88] Therefore, the Court finds it appropriate to allow the plaintiffs to reapply to the law school for admission in the 1995 entering class, if they so desire, without requiring them to incur further administrative costs, and for them to be fairly evaluated in comparison to all other applicants for admission in 1995.[89]
In addition, though the plaintiffs did not prove they suffered any other actual injury, the Court will not ignore the gravity of the noneconomic injury to persons denied equal treatment. Therefore, although normally assessed in the context of procedural due-process violations, the Court believes this to be an appropriate case for the assessment of nominal damages:
By making the deprivation of such rights actionable for nominal damages without proof of actual injury, the law recognizes the importance to organized society that those rights be scrupulously observed; but at the same time, it remains true to the principle that substantial damages should be awarded only to compensate actual injury or, in the case of exemplary or punitive damages, to deter or punish malicious deprivations of rights.
Carey v. Piphus, 435 U.S. at 266, 98 S. Ct. at 1054. The Court, therefore, will award each plaintiff nominal damages of one dollar.
With regard to general monetary damages, the evidence at trial consisted of each plaintiff's testimony and speculation about the value of a law degree.[90] Because the plaintiff's have failed to establish that they would have been admitted under a constitutional system, they are not entitled to these damages. Further, had the plaintiffs been entitled to damages, none of them established monetary damages as required under the law and rules of this circuit. See Haley v. Pan American World Airways, 746 F.2d 311, 316 (5th Cir.1984) ("A damage award cannot stand when the only evidence to support it is speculative or purely conjectural."). Finally, the Court would not award Title VI damages even were such damages appropriate because the Court does not believe the defendants intended to discriminate against the plaintiffs in an unlawful manner. See Carter v. Orleans Parish Pub. Schs., 725 F.2d 261, 264 (5th Cir.1984) (recovery of damages under Title VI precluded unless action intentional or manifested discriminatory animus); Marvin H. v. Austin Indep. Sch. Dist., 714 F.2d 1348, 1356-57 (5th Cir.1983) (same). Indeed, the evidence reflects the contrary. The defendants acted in good faith and made sincere efforts to follow federal guidelines and to redress past discrimination. The record contains no evidence that the defendants intended to discriminate against or to harm the plaintiffs. Under these facts, an award of damages, especially the punitive damages the plaintiffs request, would be inappropriate.
V. CONCLUSION
It is regrettable that affirmative action programs are still needed in our society. However, until society sufficiently overcomes the effects of its lengthy history of pervasive racism, affirmative action is a necessity. Further, although no one likes employing racial classifications and distinctions, "it would be impossible to arrange an affirmative action program in a racially neutral way and have it successful." Bakke, 438 U.S. at 407, 98 S. Ct. at 2808 (Blackmun, J., concurring in part and dissenting in part).
*584 Commitment to affirmative action programs in educational institutions as just and necessary, however, does not imply that the individual rights of nonminorities should fall by the wayside or be ignored. The concern for individual rights requires that programs implementing racial and ethnic preferences be subjected to the most searching judicial examination of strict scrutiny. Only by applying strict scrutiny can the judicial branch assure society that the important individual rights protected by the Fourteenth Amendment have not been unnecessarily and unfairly burdened solely as a function of the color of an individual's skin. The judicial branch must carefully and honestly assess the harm to those individual rights in light of the compelling interests served and benefit bestowed upon society by the affirmative action program. To do otherwise would do little more than, in the words of Justice Kennedy, move us from "separate but equal" to "unequal but benign." Metro Broadcasting, 497 U.S. at 638, 110 S. Ct. at 3047 (Kennedy, J., dissenting).
Further, if we wish to progress to a society in which affirmative action is no longer necessary, we must be cognizant of pitfalls and dangers created by affirmative action in the form of the stigma some associate with racial preferences and the potential institutionalization of a process that was designed to overcome institutionalized discrimination. The interests of all require that the government not diminish the importance of individual rights, whether belonging to a minority citizen or a nonminority citizen, through programs, that although well-intentioned, unwittingly "permit the seeds of race hate to be planted under sanction of law." Plessy v. Ferguson, 163 U.S. 537, 560, 16 S. Ct. 1138, 1147, 41 L. Ed. 256 (1896) (Harlan, J., dissenting).
The Court realizes that some individuals will continue to complain that any admissions program employing preferences based on race, no matter how carefully designed and administered to provide individualized consideration, deprives nonminorities of their rights. However, when the program functions to overcome the effects of years of discrimination and to serve important societal goals, affirmative action "is consistent with equal protection principles as long as it does not impose undue burdens on nonminorities." Metro Broadcasting, 497 U.S. at 597, 110 S. Ct. at 3026. The Court believes the only way of assuring an undue burden is not placed on innocent parties in an admissions procedure is to treat all applicants as individuals and to consider all qualifications in selecting the best qualified candidates to comprise an entering class. Using the color of an applicant's skin to limit the degree of individual comparison between the races neither serves societal goals nor sufficiently protects individual rights under our Constitution.[91]
Judgment will be issued consistent with the Court's findings in this opinion.
FINAL JUDGMENT
BE IT REMEMBERED on the 19th day of August 1994, the Court entered its memorandum opinion consisting of its findings of fact and conclusions of law in the above-captioned matter and, consistent with those findings and conclusions, enters the following judgment:
IT IS ORDERED, ADJUDGED, and DECREED, by declaratory judgment, that the 1992 admissions procedure of the law school at the University of Texas at Austin, as administered, was in violation of the *585 14th Amendment of the United States Constitution;
IT IS FURTHER ORDERED, ADJUDGED, and DECREED that Cheryl J. Hopwood, Douglas W. Carvell, Kenneth R. Elliott, and David A. Rogers shall be entitled to reapply for admission to the law school at the University of Texas at Austin for the 1995-96 school year without further administrative expense or fees and that their applications shall be reviewed by the admissions committee of the law school at the University of Texas at Austin along with all other applications for that school year;
IT IS FURTHER ORDERED, ADJUDGED, and DECREED that Cheryl J. Hopwood, Douglas W. Carvell, Kenneth R. Elliott, and David A. Rogers do have and recover judgment of and against the defendants University of Texas at Austin and the University of Texas School of Law, jointly and severally, in the total amount of One Dollar ($1.00) each;
IT IS FINALLY, ORDERED, ADJUDGED, and DECREED that all further affirmative relief requested by any party herein against any other party herein is DENIED.
NOTES
[1] Defendants Bernard Rapopart, Ellen C. Temple, Lowell H. Lebermann, Jr., Robert Cruikshank, Thomas O. Hicks, Zan W. Holmes, Jr., Tom Loeffler, Mario E. Ramirez, and Martha E. Smiley are sued in their official capacities as members of the University of Texas Board of Regents. Defendant University of Texas Board of Regents is the governmental entity created by Defendant State of Texas to administer the operation of the University of Texas system, which includes Defendant University of Texas at Austin as a component institution. Defendant University of Texas School of Law is an American Bar Association accredited law school operated by the University of Texas at Austin. Defendant Robert M. Berdahl is sued in his official capacity as president of the University of Texas at Austin. Defendant Mark G. Yudof is currently Provost of the University of Texas at Austin. At all times pertinent to this lawsuit, Yudof was Dean of the University of Texas School of Law and is sued in that official capacity. Defendant Stanley M. Johanson, a Professor of Law, is sued in his official capacity as Chair of the University of Texas School of Law Admissions Committee.
[2] The plaintiffs' Title VI, § 1981, and § 1983 claims serve as vehicles to enforce underlying rights guaranteed by the Fourteenth Amendment. Therefore, the law school's admissions program must be evaluated under the equal-protection clause of the Fourteenth Amendment.
[3] In 1990, the percentage of persons age 25 or older who completed high school was 81.5% non-Hispanic white, 66.1% black, and 44.6% Hispanic. D-411. College graduate rates for the same year reflect 25.2% non-Hispanic whites, 12% black, and 7.3% Hispanic. D-412.
[4] The Texas Legislature created Prairie View State Normal & Industrial College for Colored Teachers at Prairie View (now Prairie View A & M University) for the education of "students to be taken from the colored population of this State." Wright, vol. 19, at 17, 19-21. Until 1947, it remained the only state-supported institution of higher learning open to black students in Texas; no type of professional training was available to blacks. Commentary, Tex. Const. art. VII, § 14 (West 1993). In 1947, to avoid integration of the University of Texas, the Texas Legislature created the Texas State University for Negroes (now Texas Southern University). Id. at 21-22; D-382.
[5] See Adams v. Richardson, 356 F. Supp. 92 (D.D.C.), modified and aff'd, 480 F.2d 1159 (D.C.Cir.1973), dismissed sub nom. Women's Equity Action League v. Cavazos, 906 F.2d 742 (D.C.Cir.1990).
Title VI proscribes discrimination that violates the equal protection clause of the Fourteenth Amendment. See Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 286-87, 98 S. Ct. 2733, 2746-2747, 57 L. Ed. 2d 750 (1978). The prohibitions against discriminatory conduct contained in Title VI govern "program[s] or activit[ies] receiving Federal financial assistance." 42 U.S.C.A. § 2000d. Thus, "Congress was legislating to assure federal funds would not be used in an improper manner." United Steelworkers v. Weber, 443 U.S. 193, 206 n. 6, 99 S. Ct. 2721, 2729 n. 6, 61 L. Ed. 2d 480 (1979). The University of Texas, as a recipient of Title VI funds, is required to comply with Title VI.
The Department of Education, as the successor agency to HEW, is the governmental agency charged with the enforcement of Title VI and the review of programs funded through the DOE. The DOE has promulgated regulations to implement the provisions of Title VI, including regulations providing for affirmative action in certain circumstances. The regulations state that "[i]n administering a program regarding which the recipient has previously discriminated against persons on the ground of race, color, or national origin, the recipient must take affirmative action to overcome the effects of the prior discrimination." 45 C.F.R. § 80.3(b)(6)(i) (1993). The regulations state further that even if a recipient has never implemented discriminatory policies, if its services and benefits have not been equally available to some racial or nationality groups, the recipient may "establish special recruitment policies to make its program better known and more readily available to such group, and take other steps to provide that group with more adequate service." 45 C.F.R. § 80.5(j).
[6] D-314. The revised plan raised the goal previously set for increased minority enrollment in graduate and professional schools. The individual goal for UT-Austin had been ten additional black students and two additional Hispanic students. Ashworth, vol. 12 at 26-27; vol. 13 at 56-58. The revised plan included a commitment to "seek to achieve proportions of black and Hispanic Texas graduates from undergraduate institutions in the State who enter graduate study or professional schools in the State at least equal to the proportion of white Texas graduates from undergraduate institutions in the State who enter such programs." D-238a at. 5.
[7] Ashworth, vol. 12 at 32-24. The government, as usual, proceeds with "all deliberate speed."
[8] Johanson, vol. 3 at 12. Ernest Smith, who was a member of the admissions committee from 1965 through 1970 and dean of the law school from 1974 to 1979, testified by deposition that his recall of the required grade point average at that time was 3.0. Smith depo. at 7. Although neither Smith nor Johanson had exact recall of the number, their testimony is consistent in that the qualifications for admission at the time were minimal.
[9] The Texas Index is a composite number calculated by the Law School Data Assembly Service (LSDAS) that reflects an applicant's grade point average and LSAT score. The weight attributed to each component of the TI is determined by a prediction formula derived from the success of first year students in preceding years. Johanson, vol. 3 at 7-10.
[10] The CLEO (Council on Legal Education Opportunity) program provided summer training at participating law schools for minority graduates of various universities. At the end of the training period, the CLEO participants were given exams. Based on their performance on those exams, some of the participants were admitted to the law school. Smith depo. at 9-10.
[11] The committee was named after the chair of the committee, Professor James Treece.
[12] In the summer of 1974, just before Ernest Smith became dean of the law school, the then president of the university, Steve Spurr, expressed concern about the low minority population in the law school. Spurr indicated that a public university had an obligation to train a reasonably representative cross-section of the population in the law and that the TI, as the focus of the admissions procedure, did not adequately account for an applicant's ability to overcome past economic, cultural, and discriminatory practices. Smith depo. at 17.
[13] Johanson, vol. 3 at 15. Professor Johanson did not recall if any of the members of the Treece committee were also members of the regular admissions committee.
[14] During this time, the law school entering class was comprised of 500 students, and no more than 10% of the students could be nonresidents. Johanson, vol. 3 at 17.
[15] The law school's procedure differed from the Bakke procedure in that no fixed number of seats were set aside for minorities and some nonminorities were evaluated by the Treece committee. P-1 (Smith memo at 3).
[16] Professor Johanson testified the system used five bands, while Professor Wellborn testified there were six bands.
[17] Evidently, sometime between 1978 and 1991, the automatic or administrative admission line was changed to a presumptive admission line. The testimony is unclear as to when this occurred and, apparently, even after the change was made, those involved with the admissions procedure continued to make reference to automatic admission. Johanson, vol. 3 at 26, 66; see also id. at 29 ("I think we used the term `automatic admit' for a long period of time, when it became part of the colloquium but did not describe the process."). Dean Sutton, who succeeded Dean Smith and was dean from 1979 to 1984, established the rule that approximately 55% of the resident class should fall within the presumptive admission category. Johanson, vol. 3 at 24-25. Approximately 75% of nonresident applicants are admitted from the presumptive admission category for nonresidents. Id.
[18] Because the law school was receiving better qualified minority applicants, the focus of the process changed from whether to accept a particular minority applicant to a more selective process between the individual minority applicants. Wellborn, vol. 24 at 33. Had the admissions committee continued to apply its previous standards, the number of minorities in the entering class would have continued to grow. However, the committee elected instead to "take advantage of this opportunity to have more excellent minority students than we had before, who would be more competitive with the non-minority students, but perhaps in more limited numbers that would still constitute reasonable representation." Id. at 35.
[19] P-25. The percentage goals are based on the percentages of minority college graduates. See supra note 6.
[20] Professor Johanson, who is white, has been on the admissions committee since 1964 and chair of the committee since 1973. Dean Aleman is an assistant dean and is Mexican American. Dean Hamilton was an assistant dean from 1990 through 1993 and is black.
[21] At some point in the process, the presumptive admission line for nonminority resident admissions was adjusted downward to ensure that approximately 55% of the resident admissions would be presumptively admitted. The 55/45 split did not apply to nonresident applicants, approximately 75% of whom were admitted presumptively on the basis of their TI. See supra note 17.
[22] Johanson, vol. 3 at 26. In 1992, the law school received approximately 2100 resident applications and 2300 nonresident applications. Johanson, vol. 3 at 35. The pool of nonresident applicants was very strong, many with credentials well above those of the presumptively admitted residents. Id. at 36. Accordingly, the presumptive admission and denial scores were set at a higher level for nonresident applicants. However, as with resident applicants, lower scores were set for Mexican American and black nonresident applicants than for nonminority nonresident applicants.
Johanson testified the enrollment yield for nonresidents is approximately 26%, meaning that the law school has to offer approximately four nonresidents admission to enroll one. Id. at 37. The enrollment yield for residents is 66 to 68%, that is, for every 100 offers of admission, 66 to 68 resident applicants accept.
[23] Johanson reviewed minority and nonminority files together as a group during the preliminary review process. Johanson, vol. 6 at 55.
[24] Johanson's setting of these scores was a process that evolved over the course of the admissions process based on the pool of applicants, the number of offers, and the number of acceptances. Initially, the numbers were set high and lowered as the yield from offers and composition of the entering class began to develop. Johanson, vol. 5, at 10-11; P-38 P-44.
[25] P-38. In 1992, the law school was faced with two different types of TIs, one based on a two digit LSAT score and one based on a three digit LSAT score. This was a result of the change in the scaling of the LSAT from a 10-to-48 scale to a 120-to-180 scale. Johanson therefore had to set presumptive lines coordinated to two separate TI formulas to accommodate the two types of TIs received for applicants. Johanson, vol. 3 at 26-27.
[26] In 1992, the admissions committee reviewed 18 stacks in the nonminority discretionary zone 17 stacks of 30 files and one stack of 16 files. P-58, P-59. This process began in early March and was virtually complete by mid to late April. Johanson (by depo.), vol. 25 at 7.
[27] In 1992, Johanson allotted each person on the subcommittees nine votes per stack. D-332 at A-29. Committee members were required to screen five stacks. P-55. Therefore, although each member of the admissions committee reviewed more than one stack of files, no individual reviewed all the files in the discretionary zone.
[28] Johanson testified that he had "rarely, if ever" vetoed a committee recommendation based on two or three votes, except in instances where an administrative problem might make an individual ineligible for law school.
[29] Johanson, in rebuttal testimony provided by deposition, testified, "[T]hose candidates who receive zero votes to admit, they're done. I don't even look at their files. Three people have said in comparison to our applicant pool they are not worthy of being admitted. They will the next day they will get their denial...." Johanson (by depo.), vol. 25 at 10 (emphasis added). This testimony contradicts the statement in the law school's "Statement of Policy on Affirmative Action," which states that all final decisions on each applicant file are made by Johanson. See D-362 at 4.
[30] Both Johanson and Hamilton attended all the meetings; Aleman's attendance was not regular. Frequently, student members of the subcommittee attended the meetings, although they were not voting members of the subcommittee. Johanson, vol. 5 at 28-29.
[31] Johanson testified that, although a "particularly naughty problem" might be brought before the entire committee, almost all final decisions were made by the subcommittee. Johanson, vol. 5 at 29; see also Johanson, vol. 6 at 47.
[32] The law school received 4,494 applications for the fall 1992 incoming class. It offered admission to 936 applicants to fill a class of slightly over 500 students. D-447 (Aff. of Rita Bohr at A-4). The overall median GPA for entering students was 3.52, and the overall median LSAT was 162 (89th percentile). D-433. The median figures for nonminorities were a GPA of 3.56 and an LSAT of 164 (93rd percentile); for blacks, a GPA of 3.30 and an LSAT of 158 (78th percentile); and for Mexican Americans, a GPA of 3.24 and an LSAT of 157 (75%). Id.
[33] Johanson, vol. 4 at 9, 31. The percentage of nonresidents that may comprise an entering class has recently been increased to 20%. Johanson, vol. 4 at 46.
[34] Nevertheless, Hamilton, as assistant dean of admissions responsible for recruiting the law school class, actively recruited minority students through "one-on-one" discussions and scholarship enticements. Hamilton, vol. 2 at 4-5, 9, 12-13.
[35] The practice of using the GPA/LSAT index as a sorting mechanism is used by many nationally prominent law schools. Brest, vol. 22 at 13-14; Stein, Vol. 18 at 15; Bollinger, vol. 16 at 11-14; Wegner depo. at 9-10. However, none rely on the index as the sole basis for admission decisions. Id.; see also D-448.
[36] The defendants contend that Hopwood should have been evaluated as a nonresident and, accordingly, would not have been in the presumptive admit range for nonresidents. However, Johanson testified that Hopwood did not misrepresent her status to the law school. She stated in her application she was married to a person in the military who was stationed in Texas at the time of her application. The law school treated her application as that of a resident throughout the process. Johanson, vol. 5 at 14. Further, Hopwood's residency classification was consistent with the law school's policies in effect at the time. Id.; Johanson, vol. 4 at 44-45; Hopwood, vol. 8 at 12-13.
[37] Hopwood's LSAT score placed her in the 83rd percentile, well below the median LSAT for nonminorities in the 1992 entering class. P-145; D-433. Her two-digit TI was an 87, which correlates to 199 in the three-digit scoring system.
[38] Hopwood testified that although her child was initially diagnosed with cerebral palsy, she has been found to have an extremely rare muscle disease and is severely handicapped. Hopwood, vol. 8 at 8-9. This information is not included in her admission file.
[39] Hopwood testified that although she had been prepared to submit letters of recommendation, a person in the admissions office informed her that, because of the large number of applications, the school did not have time to look at recommendations. Hopwood, vol. 8 at 6.
[40] Hopwood testified that while in high school, she applied for college at Temple, Princeton, and Penn State and was offered admission at each school. However, because she had to pay for her own education and had to work her way through school, she could not afford to go to these schools. Hopwood, vol. 8 at 4. However, this information is not included in Hopwood's application despite the following statement on the application: "Please make any other comments about your college transcripts or your preparation for college (such as disadvantaged educational or economic background) that you believe will help the Admissions Committee in evaluating your application."
[41] Johanson, vol. 5 at 14-17. Johanson believed that Hopwood's ability to work a significant number of hours while maintaining a high GPA was indicative of earning her GPA while on "a fairly slow track" at a non-competitive institution. Id. at 15-16. In contrast, Associate Dean Sharlot found that Hopwood's achievement of a high GPA while working was a "definite plus." D-334. This "plus," however, was insufficient to overcome Hopwood's below-median performance on the LSAT and attendance at a series of "very weak schools." Id.
[42] Hopwood received one vote from Hamilton, who was also a member of the minority subcommittee. P-217 (Answer to int. 4); D-333 at A-37.
[43] The Court notes that during 1992, individuals were offered admission from the waiting list. Of the 332 applicants offered a position on the waiting list in 1992, 75 were admitted. D-447 (Aff. of Rita Bohr at A-5). Hamilton testified that as late as the first week of classes, seven persons were admitted from the waiting list. Hamilton, vol. 2 at 65-67. However, the Court also notes from the affidavits of Johanson and Hamilton that Hopwood had little likelihood of acceptance from a waiting list. In fact, Hamilton specifically stated, "It is my belief that Ms. Hopwood [would] not have been admitted off the waiting list at a later time." D-333 at A-39.
[44] P-165. The only copy of the letter in the record is an unsigned draft provided by the plaintiffs. Hamilton testified that the letter actually received by the law school had been administratively misplaced since the summer of 1992. Hamilton, vol. 2 at 68-69.
[45] Id. Johanson testified it was "quite unusual" for someone to be reconsidered and placed on the waiting list without Johanson's awareness of the decision. Johanson, vol. 5 at 19-21. He testified he knew nothing about Elliott being placed on the waiting list. Id.
[46] The Court is not implying that Hamilton testified in an untruthful manner. However, because of the number of applicant files Hamilton was required to address and the time pressures under which she was working as the beginning of the school year approached, the Court believes it very possible her recall of the chronology of specific events may be inaccurate.
[47] Carvell's application reflects that he took the LSAT twice, receiving a score of 34 (61st percentile) the first time and a score of 164 (91st percentile) the second time. The LSAT factored in his TI is an average of these two scores.
[48] This matter was addressed at length in pretrial motions and hearings, and the transcripts and evidence related to those motions are evidence in this cause.
[49] As discussed above, the defendants claim Hopwood voluntarily removed herself from the admissions process and Elliott was offered admission.
[50] With regard to Elliott, the defendants contend he lacks standing to challenge the initial decision to deny him admission.
[51] See id. ___ U.S. at ___ - ___, 113 S.Ct. at 2302-03 (discussing Clements v. Fashing, 457 U.S. 957, 102 S. Ct. 2836, 73 L. Ed. 2d 508 (1982); Bakke, 438 U.S. 265, 98 S. Ct. 2733 (1978); and Turner v. Fouche, 396 U.S. 346, 90 S. Ct. 532, 24 L. Ed. 2d 567 (1970)).
[52] Further, the law school's 1992 procedure for review of applicants in the discretionary zone effectively prevents any nonminority candidate from establishing that he or she would have been admitted but for the preference given to minority applicants. See infra note 86.
[53] The defendants also contend a suit against the State of Texas or the University of Texas is an impermissible collateral attack on OCR programs and regulations and, in support of this proposition, cite Milwaukee County Pavers Ass'n v. Fiedler, 922 F.2d 419 (7th Cir.), cert. denied, 500 U.S. 954, 111 S. Ct. 2261, 114 L. Ed. 2d 714 (1991). However, in this cause the plaintiffs are not attempting to challenge a federal statute creating minority business set-asides by challenging the State's role in the program. Instead, the plaintiffs in this cause are challenging the specific procedure the law school voluntarily designed and implemented to achieve affirmative action goals suggested by OCR. The constitutionality of the law school's procedure is not dependent on whether the OCR can require affirmative remedies for a Title VI violation. See Podberesky v. Kirwan, 764 F. Supp. 364, 374 (D.Md.1991), rev'd and remanded, 956 F.2d 52 (4th Cir.1992), on remand, 838 F. Supp. 1075 (D.Md.1993).
[54] As an additional point, even if the Court were to find intermediate scrutiny to be the proper standard of review, the Court would still be required to assess whether the process imposed undue burdens on nonminorities. See Metro Broadcasting, 497 U.S. at 596-97, 110 S. Ct. at 3026 ("[A] congressionally mandated benign race-conscious program that is substantially related to the achievement of an important governmental interest is consistent with equal protection principles so long as it does not impose undue burdens on nonminorities."). As discussed infra pp. 575-579, the burden imposed upon nonminorities by the law school's admissions procedure is a very troubling aspect of the process and, ultimately, in this Court's view, renders the process constitutionally impermissible.
[55] This written articulation of the purposes and policy of the law school's affirmative action program and description of the 1992 process was prepared in February 1994. Johanson, vol. 6 at 45-46; Yudof, vol. 20 at 30-31.
[56] Notwithstanding the personal views of this judge, it appears the goal of increasing the number of minority members in the legal profession and judiciary of Texas is not a legally sufficient reason to justify racial preferences under fourteenth amendment analysis. See Croson, 488 U.S. at 496-98, 109 S. Ct. at 723-24. Further, the desires and goals of a private entity such as the ABA or AALS, though important considerations for an accredited law school, do not provide sufficient justification for racial classifications. Similarly, Texas' "consent decree" with the OCR, though having evidentiary value in terms of past discrimination in Texas' higher education system, is not, in and of itself, a valid justification.
[57] The plaintiffs do contend the law school's affirmative action program is not narrowly tailored to meet the objective of diversity, an issue the Court will address below.
[58] In support of this proposition, the defendants cite Croson, 488 U.S. at 493, 109 S. Ct. at 722 ("Unless [racial classifications] are strictly reserved for remedial settings, they may in fact promote notions of racial inferiority and lead to politics of racial hostility."), and dissenting opinions from Metro Broadcasting and Johnson v. Transportation Agency, Santa Clara, California. See Metro Broadcasting, 497 U.S. at 613-15, 110 S. Ct. at 3035 (O'Connor, J., dissenting); Johnson, 480 U.S. 616, 673-75, 107 S. Ct. 1442, 1473-1474, 94 L. Ed. 2d 615 (Scalia, J., dissenting).
[59] The Supreme Court recognized the vital role education plays in our society in Brown v. Board of Education:
[Education] is the very foundation of good citizenship. Today it is a principal instrument for awakening the child to cultural values, in preparing him for later professional training, and in helping him to adjust normally to his environment. In these days, it is doubtful that any child may reasonably be expected to succeed in life if he is denied the opportunity of an education.
Brown v. Board of Educ., 347 U.S. 483, 493, 74 S. Ct. 686, 691, 98 L. Ed. 873 (1954).
[60] D-441. The Court believes such meager representation would be woefully inadequate in a state university supported, in part, by revenues from all state residents. Further, the Court concurs with the defendants that diversity requires more than token representation of minorities; strict reliance on the TIs for admission would not further the goal of diversity.
[61] The plaintiffs' expert, James Armor, a senior fellow at the Institute of Public Policy, George Mason University, in Fairfax, Virginia, testified there are no present direct effects of past discrimination in Texas' educational system. Armor, vol. 10 at 45-48. Armor testified the only cities in Texas he has visited are Dallas and Houston. Armor, vol. 11 at 41. The Court does not find Armor to be a credible witness.
[62] See also Ayers v. Allain, 893 F.2d 732, 751 (5th Cir.1990):
Brown states that the stigmatizing effects of segregation are not created by legally compelled attendance but rather from the vestiges of legally compelled separation. Thus the lesson of Brown is that the malignancy of apartheid does not vanish in state-sponsored forums simply because attendance is voluntary and admittance race-neutral.
[63] See, e.g., League of United Latin Am. Citizens v. Clements, 999 F.2d 831, 866 (5th Cir.1993), cert. denied, ___ U.S. ___, 114 S. Ct. 878, 127 L. Ed. 2d 74 (1994) ("Texas' long history of discrimination against its black and Hispanic citizens in all areas of public life is not the subject of dispute....").
[64] Hamilton, vol. 2 at 49-50, 52-53; Wright, vol. 19 at 33-36. Sweatt v. Painter is often studied in undergraduate courses and contributes to undergraduate minorities' perception of the University of Texas as an institution that does not welcome minorities. Wright, vol. 19 at 33-36; Romo, vol. 17 at 64.
[65] The plaintiffs contend the OCR's findings are invalid because the OCR did not apply the standards recently set forth by the Supreme Court in Fordice. However, neither the validity of the OCR investigation, nor the retroactive application of Fordice is the issue before this Court.
[66] Ashworth, vol. 12 at 44-45; D-432; D-453; D-454. In 1971, the year following the Board of Regents disapproval of the law school's participation in the CLEO program, the law school entering class had no blacks. As late as 1974 only ten of the law school's 1600 students were black. Wright, vol. 19 at 31-33. Texas Southern University, the law school Texas created to avoid integration of the law school, enrolls almost 50% of all entering minority law students in Texas. This percentage would increase dramatically in the absence of the law school's affirmative action program. Wright, vol. 19 at 21-22; Ashworth, vol. 12 at 44-45; D-432; D-452; D-453.
[67] The admissions data from 1983 to 1993 reflects the following minority admissions, both in percentages and actual numbers of students:
Year Black Mexican American
1983 9.3 (47) 10.0 (51)
1984 6.2 (32) 14.3 (74)
1985 4.6 (25) 11.2 (61)
1986 4.4 (24) 13.1 (71)
1987 3.2 (17) 10.2 (55)
1988 7.0 (44) 10.7 (60)
1989 6.0 (35) 11.4 (58)
1990 7.1 (39) 11.6 (64)
1991 6.9 (35) 10.6 (54)
1992 8.0 (41) 10.7 (55)
1993 5.9 (31) 10.0 (53)
D-71.
[68] The law school maintains racially segregated "wait lists," which the plaintiffs contend the law school uses to adjust the racial composition of the incoming class to meet its goals. However, the evidence at trial showed that there is no "last seat," as in Bakke, for which an applicant's race is the deciding factor. See, e.g., Johanson, vol. 4 at 43.
[69] See Goode, vol. 9 at 32 ("My position on the committee for many years has been, we ought to work and strive to decreasing the gap, little by little if we have to, but one day to the point where, in fact, we won't have such a gap, where we can truly have a race-blind system of admission. We're not there."); see also Wellborn, vol. 24 at 35; P-1.
[70] The evidence shows that the qualifications of minority applicants today are roughly equivalent to the qualifications of nonminority applicants 20 years ago. D-433. These figures demonstrate the progress that has occurred in the qualifications of minorities applying for law school. Glenn, vol. 23 at 52.
[71] The use of different presumptive admission lines to identify the top candidates in the different groups does not present the same problem for several reasons. First, the evidence shows that Johanson reviewed all candidates in the top category, both minority and nonminority. Additionally, those applicants that were not offered admission from this category were not denied admission but moved to the discretionary zone. Further, Johanson testified to the necessity of making offers of admissions to the top candidates in the minority pools as soon as possible because of the small pool of qualified applicants and the nationwide competition for them. A tool that considers the disparity in past educational opportunity based on historical discrimination to assist in attracting the top minorities does not create an undue burden on the rights of nonminorities when appropriately used. Conversely, the use of differing presumptive denial lines effectively removed some nonminority applicants from consideration early in the process without being provided a general, much less individual, comparison with a fully developed pool of minority applicants. One or two separate reviewers from the general admissions committee unilaterally made determinations with regard to these applicants. However, none of the plaintiffs in this lawsuit was affected directly by this aspect of the 1992 procedure. Further, the new admissions procedure adopted by the law school will no longer use presumptive denial lines to preclude comparison of applicants. See infra note 87. The Court, therefore, need not address the issue. If the issue were before the Court, the Court would find this aspect of the procedure suffers from the same infirmity that use of the minority subcommittee created in the discretionary zone lack of individual comparison between minority and nonminority applicants.
[72] The defendants imply that because the law school's affirmative action is fundamentally similar to that used at the major law schools around the country, it is constitutional. The evidence, however, reflects that while there are similarities, the other programs differ significantly from that at issue in this cause. Judith Wegner, Dean of the University of North Carolina School of Law, testified by deposition that the University of North Carolina School of Law does not set separate presumptive admission and denial scores based on race, does not have waiting lists segregated by race, and does not have separate committee review based on race. Wegner depo. at 48-49. Robert Stein, Dean of the University of Minnesota Law School, testified that the University of Minnesota uses mechanisms in the admissions procedure similar in function to those used by the law school. However, all applicants offered admission at the University of Minnesota, with the exception of those offered "automatic" admission based on high indices, are ultimately reviewed by the full admissions committee. Stein, vol. 18 at 12. The minority subcommittee does not have authority to admit applicants, only to recommend specific applicants to the full committee. Stein, vol. 18 at 48. Paul Brest, Dean of the Stanford Law School, testified his school uses a system comparable to that used by the law school, with a single admissions chair who has ultimate discretion on all admissions. Brest, vol. 22 at 19. Instead of a using a minority subcommittee, Stanford has one person that reviews minority files and makes recommendations to the admissions chair. Id. at 8-19. Until recently, that person reviewed only minority files. However, as the result of a recent settlement with OCR, the person began reviewing some nonminority files so that she would have a better sense of the entire pool of applicants and be able to make more appropriate comparisons between the applicants. Id. at 39.
[73] Additionally, the defendants assert that nothing in the case law following Bakke suggests that individual comparison of files is required in an admissions process redressing past discrimination, and in fact, indications exist to the contrary. See Croson, 488 U.S. at 519, 109 S. Ct. at 735 (Kennedy, J., concurring) (narrow tailoring standards should not be so strict as to chill state's ability to voluntarily eliminate results of past discriminatory actions); Sheet Metal Workers v. EEOC, 478 U.S. 421, 471, 106 S. Ct. 3019, 3047-48, 92 L. Ed. 2d 344 (1986) (narrow tailoring does not require specific beneficiaries of affirmative action be victims of past discrimination). The defendants assert that requiring a one-to-one comparison of over 4000 applicants a year would be incredibly burdensome. However, the Court finds no reason, when evaluating affirmative action in the educational context, that the protection afforded individuals under the Fourteenth Amendment should change based on the governmental goal that is to be achieved. Further, the defendants, citing Bakke, have asserted diversity as a constitutionally valid goal of the law school's affirmative action program. Bakke gives no indication that the burden to a school in implementing a constitutionally valid program should be considered as a reason to diminish the need for individual comparison. Additionally, more recent case law has made it clear that administrative convenience cannot support a finding that an affirmative action program is narrowly tailored to remedy the effects of past discrimination. Croson, 488 U.S. at 508, 109 S. Ct. at 729-730.
[74] In addition to race, Justice Powell suggested "[s]uch qualities could include exceptional personal talents, unique work or service experience, leadership potential, maturity, demonstrated compassion, a history of overcoming disadvantage, ability to communicate with the poor, or other qualifications deemed important." 438 U.S. at 318, 98 S. Ct. at 2762.
[75] A nonminority applicant from a disadvantaged background, although offered admission to prestigious colleges, who elects to attend less-prestigious schools for economic reasons but nonetheless performs well, seems to be penalized under the current system for not having financial means or opportunities commensurate with other nonminorities dealt a different lot in life. Therefore, the affirmative action program, as applied in 1992, seems to have had the somewhat ironic effect of affecting the rights of less advantaged and, indeed, even disadvantaged, nonminorities rather than the group of nonminorities as a whole.
[76] The record shows that two of the plaintiffs' applications were reviewed by members of the minority subcommittee who had familiarity with both pools of applicants, minority and nonminority. Initially, Johanson reviewed Hopwood's file early in the process before the entire pool of applications had developed. After he moved her to the discretionary zone, a subcommittee of three that included Hamilton reviewed her file. Elliott's file was reviewed by a subcommittee of three that included Johanson. Arguably, because Johanson and Hamilton had familiarity with individual minority applicant files, the procedure as applied to these two plaintiffs was not impermissible. However, because the other reviewers on the subcommittees had no familiarity with individual minority files, the Court finds the constitutional violation applies to all four plaintiffs. Additionally, the fact that these plaintiffs were reviewed by persons familiar with the entire pool was an inadvertent effect of Johanson's and Hamilton's dual roles and the random shuffle of the files into reviewing stacks; it did not result from the design of the procedure.
[77] The trial court in Bakke placed the burden of proof on Bakke. Therefore, although the court found the Davis program violated Bakke's fourteenth amendment rights, it denied him injunctive relief because he had failed to prove he would have been admitted in the absence of the impermissible program. On appeal, the Supreme Court of California, analogizing Bakke's situation to that of a plaintiff under Title VII, ruled that because Bakke established the university had discriminated against him, the burden of proof shifted to the university to prove that it would not have admitted him in the absence of the special admissions program. Bakke v. Regents of Univ. of Cal., 18 Cal. 3d 34, 132 Cal. Rptr. 680, 553 P.2d 1152, 1172 (1976). Because the university conceded its inability to carry the burden, the California court ordered Bakke's admission. Id. On review, the Supreme Court of the United States noted the burden shift but stated that because the university had not challenged that aspect of the decision, the issue of the proper placement of the burden of proof was not before it for consideration. Bakke, 438 U.S. at 280 n. 13, 98 S. Ct. at 2743 n. 13. At the end of his opinion, Justice Powell, affirming the injunction, noted that remanding the case would serve no useful purpose in light of the university's concession that it could not meet the burden imposed upon it by the burden shift. Id. at 320, 98 S. Ct. at 2764. In distinguishing Bakke from Mt. Healthy City Board of Education v. Doyle, Justice Powell noted that there was no question that race had been the reason for Bakke's rejection and no record existed in Bakke that legitimate alternative grounds for the university's decision existed. Id. at 320 n. 54; 98 S. Ct. at 2764 n. 54.
[78] The court in Cohen held that the burden shift applicable to Title VII cases should not apply to Title IX cases, a statute similar to Title VI. Among the reasons the court offered were the different scope and purpose of the two statutes and the largely aspirational goal of Title IX in comparison to the peremptory goal of Title VII. 991 F.3d at 902.
[79] The Court has focused on the statistics for residents in this discussion. The Court notes the chart reflects across-the-board higher numbers for nonresidents and correspondingly more difficult thresholds for admittance.
On the chart, "D" indicates denied, "A" indicates admitted, and "C" indicates cancelled. For purposes of evaluation of the numbers, applicants in the "C" category are counted as admissions because they were admitted but cancelled the acceptance. See Johanson, vol. 6 at 16.
[80] Two of the Mexican American applicants cancelled.
[81] Of five black applicants with a TI of 183, the law school admitted three; of eleven Mexican American applicants, the law school admitted two (one cancelled).
[82] Twenty-nine of these applicants canceled.
[83] Thirteen of these applicants canceled.
[84] The Court notes that several of the applicants, some of which, in the Court's opinion, were weaker candidates, initially were denied admission but offered a position on the waiting list. They were offered admission relatively late in the process from the waiting list.
[85] In this cause, the plaintiffs' initial position was that any consideration of race in an admissions procedure is improper. Upon the Court's indication that such a position was untenable under the law, the plaintiffs redirected their efforts to proving the law school improperly used race in the admissions process. However, the plaintiffs' causation evidence consisted of a demonstration that many more minority students were admitted in 1992 than would have been under a strictly race-blind process and that, had the plaintiffs been minorities, there was a high probability they would have been offered admission. Johanson, vol. 5 at 37; vol. 6 at 18-19. This evidence, although proof of affirmative action, does not establish that the plaintiffs, who are not minorities, would have received sufficient votes to be offered admission if individual minority files had been reviewed by the general admissions committee.
[86] In closing argument, the plaintiffs' counsel stated the plaintiffs could not prove they were denied admission because of their race because it was an impossible burden to meet. T. Smith, vol. 26 at 11, 40. Justice Souter, in expressing concern for Title VII plaintiffs with similar burdens, criticized the holding in St. Mary's as establishing a scheme, which, as a practical matter, could never be met by a plaintiff without direct evidence of discrimination. St. Mary's, ___ U.S. at ___, 113 S.Ct. at 2761 (Souter, J., dissenting).
The Court agrees that the plaintiffs have an impossible burden absent direct evidence. However, the difficulty does not stem from the unconstitutional aspects of the procedure alone but from the random shuffle of files into stacks of thirty, with each stack reviewed by different subcommittees of three. Under such a system, it is virtually impossible to establish the outcome of a comparison of the plaintiffs' applications against the other applicants, whether minority or nonminority.
[87] The law school followed the admissions procedure used in 1992 in 1993 and 1994. However, for selecting the 1995 entering class, the law school has established a new procedure that eliminates the minority subcommittee. D-363. All admissions decisions will be made by a small "administrative admissions group," which will be comprised of Johanson, Hamilton's successor, Dean Tonya Brown, and a faculty member who, as of the trial date, had not been selected. The new procedure will not use presumptive admission and denial scores. Johanson, vol. 6 at 34. The law school changed its procedure because "when one gets sued in federal court it catches one's attention." Id. at 57.
[88] See Heckler, 465 U.S. at 740, 104 S. Ct. at 1395. This remedy may be accommodated by an end to preferential treatment of others. Id. at n. 8. In the context of affirmative action, the Court interprets this to mean an end to unlawful preferential treatment of others.
[89] Because plaintiff Carvell has taken advantage of the opportunity to obtain a legal education at SMU, this aspect of the remedy may have little value to him. Carvell, in all probability, will be a practicing member of the bar long before the other plaintiffs, if offered admission to the law school under a constitutional admissions procedure, obtain law degrees.
[90] Elliott testified he thought the median income for recent law school graduates was $57,000 per year. Elliott, vol. 7 at 30. Rogers had a somewhat less inflated concept, testifying the average first-year salary for a graduate from the law school was $52,000. Rogers also testified that the defendants had "taken the top off my career" and requested some amount he could not quantify to compensate him for the loss. Rogers, vol. 11 at 67.
[91] hand that rounded Peter's dome,/ And groined the aisles of Christian Rome,/ Wrought in a sad sincerity./ He builded better than he knew!"
Those who devised the Fourteenth Amendment wrought in grave sincerity. They may have builded better than they knew.
They vitalized and energized a principle, as old and as everlasting as human rights. To some of them, the sunset of life may have given mystical lore.
They builded, not for a day, but for all time; not for a few, or for a race; but for man. They planted in the Constitution a monumental truth ... the golden rule.
Roscoe Conkling, Oral Argument in County of San Mateo v. Southern Pacific R.R., 116 U.S. 138, 6 S. Ct. 317, 29 L. Ed. 589 (1885), in Oral Argument on Behalf of Defendant by Roscoe Conkling 34 (1883). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1262104/ | 97 Wash. 2d 344 (1982)
644 P.2d 1149
JILL A. FARVER, Respondent,
v.
THE DEPARTMENT OF RETIREMENT SYSTEMS, ET AL, Petitioners.
No. 47842-2.
The Supreme Court of Washington, En Banc.
May 13, 1982.
*345 Betzendorfer, Deutscher & Granoski, by Charles M. Granoski, Jr., for petitioners.
Franklin K. Fogg, for respondent.
STAFFORD, J.
Phyllis and John Berling (petitioner) were married in 1944. In 1974 John petitioned for dissolution. At the time of trial, John had worked for the Washington State Patrol for 22 years and his contingent pension rights in the Washington State Patrol's retirement system constituted the most valuable marital asset.
The trial court, in the process of allocating the marital property, divided the retirement rights, giving three-fourths of the income from the contingent pension to John and one-fourth to Phyllis, with the unchallenged proviso that any additional benefits accruing in the event John decided to work past his earliest permissible retirement date in 1977 would be shared equally. Under the terms of the decree, payments to Phyllis were to begin only after John retired and were to continue only as long as he continued to receive benefits. John continued to work for the State Patrol and married his present wife Betty (petitioner) in 1975.
On May 19, 1978, Phyllis Berling died, leaving no will. She was survived by their two children. Their daughter, respondent Jill Berling Farver, was appointed administratrix. Farver's inventory of the estate included her mother's interest in the retirement benefits. Probate of the estate was completed in May 1979. As part of the distribution, the decedent's interest in the retirement benefits were assigned in equal shares to Farver and her brother.
John Berling retired from the State Patrol in June of 1979, with retirement benefits of $1,340.59 per month. Beginning in July 1979, the Department began paying the full amount of the pension to John. Mrs. Farver commenced this action against the Department and John and Betty Berling praying for a judgment declaring her rights in the pension fund and requiring the Department to pay her *346 share directly to her. Both Farver and the Berlings moved for summary judgment. The trial court denied Farver's motion and entered judgment for the Berlings, thereby necessarily rejecting any claim against the Department. No judgment was entered in the Department's favor, however.
Division Two of the Court of Appeals reversed the summary judgment, holding Phyllis Berling's interest in her former husband's pension was inheritable. The court also held, however, that the dissolution decree did not require the Department to pay the decedent's heirs directly. Farver v. Department of Retirement Sys., 29 Wash. App. 138, 629 P.2d 903 (1981).
We affirm the decision of the Court of Appeals, although under a different rationale.
I
[1] Pension and other retirement plans are unique property rights. They are in the nature of deferred compensation. As such they are not mere expectancies but are vested rights possessed by employees. Wilder v. Wilder, 85 Wash. 2d 364, 534 P.2d 1355 (1975); Payne v. Payne, 82 Wash. 2d 573, 512 P.2d 736 (1973);[1]DeRevere v. DeRevere, 5 Wash. App. 741, 491 P.2d 249 (1971); W. de Funiak & M. Vaugh, Principles of Community Property § 68, at 149 (2d ed. 1971).
It is a fundamental principle of community property law that since both spouses participate in the community, both are entitled to share in its reward. See Cross, The Community Property Law in Washington, 49 Wash. L. Rev. 733, 764 (1974); see Reppy, Community and Separate Interests *347 in Pensions and Social Security Benefits After Marriage of Brown and ERISA, 25 U.C.L.A.L. Rev. 417 (1978). The nonemployee (nonmember) spouse, then, has a property interest in the employee's or participant spouse's retirement plan. See Cross, supra; Wilder, supra; Payne, supra; DeRevere, supra.
Consistent with this principle the trial judge, in the dissolution action between Phyllis and John Berling, awarded a specified percentage of the income from John's retirement benefits to Phyllis for as long as he received such benefits. The dissolution decree stated:
[P]etitioner [John Berling] alone shall have the right to determine, within the limits of the plan, when and in what form payments should be made from the plan and, petitioner alone shall have the right to decide when he shall retire, and consequently start retirement benefit payments; ...
... the payments to respondent [Phyllis Berling], whether periodic, lump sum or otherwise, under the retirement plan benefits need not be paid and are not due until petitioner retires. If petitioner does not retire during March, 1977, at which time his retirement vests, and continues in the employment of the Washington State Patrol and consequently acquires additional retirement benefits, those additional retirement benefits shall be divided equally between the parties; it is further
ORDERED, ADJUDGED AND DECREED, that petitioner's obligation to make payment from his retirement income shall continue only so long as he receive such benefits; ...
(Italics ours.)
[2] The decree was never challenged. By its terms Mr. Berling was required to pay a specified percentage of his retirement income to Phyllis. The payments from that source of income were to continue only as long as income from the pension benefits were received by Mr. Berling. It is clear that Phyllis Berling's rights were only against Mr. Berling, not against the Department. The property to which she was entitled is the stated interest in whatever income Mr. Berling actually received from retirement benefits. *348 This is no more than the usual property division routinely made in dissolution decrees. See RCW 26.09. Thus, pursuant to the decree, the distributed property became Phyllis Berling's separate property. See Barkley v. American Sav. Bank & Trust Co., 61 Wash. 415, 112 P. 495 (1911); Washington State Bar Ass'n, Community Property Desk Book § 37.29 (1977). Her property right to the judicially specified percentage of John's income from retirement benefits was subject to the state's statutes governing the descent and distribution of property. RCW 11.04.015.[2]
Petitioners, John and Betty Berling, contend such a ruling would be contrary to the State Patrol Retirement System statute (RCW 43.43.120-.320). They assert the absence of a specific statement of statutory intent to permit retirement benefits to be given to the estate of a deceased nonemployee spouse indicates a legislative intent to restrict the operation of RCW 11.04.015. In support, petitioners cite a recent decision of the California Supreme Court. It held that a trial court may not award benefits (pursuant to a comprehensive dissolution property settlement) from a state judge's retirement plan to the former wife's devisees or heirs. Waite v. Waite, 6 Cal. 3d 461, 492 P.2d 13, 99 Cal. Rptr. 325 (1972). See also In re Marriage of Brown, 15 Cal. 3d 838, 544 P.2d 561, 126 Cal. Rptr. 633 (1976); Benson v. Los Angeles, 60 Cal. 2d 355, 384 P.2d 649, 33 Cal. Rptr. 257 (1963). In Waite, the California court found a legislative intent that the nonemployee former spouse's interest in the *349 pension would terminate upon the death of either spouse. Under this "terminable interest rule",[3] then, a nonemployee's community interest in the employee's retirement plan would end upon the nonemployee's death thereby cutting off the nonemployee's testamentary power.
Petitioner's argument is without merit. First, unlike Waite, we are not faced with a challenge to a dissolution settlement awarding benefits from a husband's retirement plan to the former wife and ultimately to her devisees or heirs. Rather, the issue is whether Phyllis Berling's separate property interest in the income from John Berling's pension may devolve to Jill Farver and her brother under the laws of intestate succession. Consequently, Waite is inapposite.
Moreover, the Waite court looked to the statutory design underlying the California pension legislation for support:
[T]he statutory design for judges' pensions negates the spouse's contention that her legatees should inherit pension payments payable for the balance of the judge's life. Whatever community interest the wife may claim, it cannot transcend the legislation upon which the pension itself rests. The legislation grants to the wife, not an inheritable legacy, but a continuing economic protection for her lifetime, a state-secured provision for subsistence.
Waite, at 474. One commentator has noted the absurdity of this argument:
It is senseless to say, as did the Waite court, that in fashioning a pension scheme the legislature had no intention of conferring benefits on the heirs or legatees of a participant's spouse. Undoubtedly there is the same absence of intent when it comes to the salary paid to a married state employee, yet if some savings from that salary are on hand when [wife] predeceases [husband] no one would dispute her power to bequeath half of it.
Reppy, Community and Separate Interests in Pensions *350 and Social Security Benefits After Marriage of Brown and ERISA, 25 U.C.L.A.L. Rev. 417, 471 (1978). See also Waite v. Waite, 17 Cal. App. 3d 108, 125, 94 Cal. Rptr. 677 (1971) (Kaus, J., dissenting), aff'd, 6 Cal. 3d 461, 492 P.2d 13, 99 Cal. Rptr. 325 (1972).
Unlike California, there is nothing in our statutory scheme indicating any intent to deprive the nonemployee former spouse of her actual and recognized community property rights in the income from the pension benefits paid the employee. Thus, since the "terminable interest rule" is clearly without statutory basis, we decline to engraft it onto the law of this state. See Reppy, supra at 462; Pattiz, In a Divorce or Dissolution Who Gets the Pension Rights: Domestic Law and Retirement Plans, 5 Pepperdine L. Rev. 191, 208 (1978).
II
[3] Finally RCW 41.04.320 does not alter the outcome of this case. RCW 41.04.320 reads in relevant part:
All payments made to a nonmember spouse or ex-spouse pursuant to the provisions of this amendatory act shall cease upon the death of such a nonmember spouse or ex-spouse. Upon such a death, the department is hereby authorized and directed to pay to the member his or her full monthly entitlement of benefits.
The statute was enacted in 1979 and, by its precise terms, applies only to "decrees of dissolution or legal separation and court-approved property settlement agreements entered after May 25, 1979". (Italics ours.) RCW 41.04.330. The settlement between Phyllis and John Berling was entered in 1974. Further, section.320 applies only to direct payments from the Department to the nonmember former spouse while the nonmember spouse is still alive. In the instant case, the dissolution settlement did not require direct payments from the Department to the nonemployee spouse. Farver v. Department of Retirement Sys., 29 Wash. App. 138, 629 P.2d 903 (1981). Most importantly, section .320 in no way impacts the interest of the nonemployee spouse or former spouse in the pension. Rather, section .320 *351 is procedural in nature and merely establishes when the Department must pay retirement benefits directly to the nonemployee spouse or former spouse.
The judgment of the Court of Appeals is affirmed.
BRACHTENBACH, C.J., and ROSELLINI, UTTER, DOLLIVER, WILLIAMS, DORE, and DIMMICK, JJ., concur.
NOTES
[1] Wilder v. Wilder, 85 Wash. 2d 364, 534 P.2d 1355 (1975) and Payne v. Payne, 82 Wash. 2d 573, 512 P.2d 736 (1973) both involved military pensions. The United States Supreme Court has recently ruled that under federal law, military pensions are the separate property of the employee spouse and are not subject to the community property laws of any state. See McCarty v. McCarty, 453 U.S. 210, 69 L. Ed. 2d 589, 101 S. Ct. 2728 (1981). Notwithstanding these decisions, however, Wilder and Payne still serve as authority for the proposition that pensions in general (except those of a federal nature such as military pensions and railroad pensions) are subject to our state community property laws.
[2] RCW 11.04.015 reads in relevant part:
"Descent and distribution of real and personal estate. The net estate of a person dying intestate, or that portion thereof with respect to which the person shall have died intestate, shall descend subject to the provisions of RCW 11.04.250 and RCW 11.02.070, and shall be distributed as follows:
"...
"(2) Shares of others than surviving spouse. The share of the net estate not distributable to the surviving spouse, or the entire net estate if there is no surviving spouse, shall descend and be distributed as follows:
"(a) To the issue of the intestate; if they are all in the same degree of kinship to the intestate, they shall take equally, or if of unequal degree, then those of more remote degree shall take by representation."
[3] For an excellent discussion of the genesis of the "terminable interest rule" in California, see Reppy, Community and Separate Interests in Persons and Social Security Benefits After Marriage of Brown and ERISA, 25 U.C.L.A.L. Rev. 417, 446-58 (1978). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1450886/ | 974 F. Supp. 684 (1997)
The NINTH AVENUE REMEDIAL GROUP, et al., Plaintiffs,
v.
ALLIS CHALMERS CORP., et al., Defendants.
No. 2:94-CV-331-RL-1.
United States District Court, N.D. Indiana, Hammond Division.
August 15, 1997.
*685 Harold Abrahamson, Abrahamson, Reed and Adley, Hammond, IN, Joseph V. Karaganis, A. Bruce White, Mark D. Erzen, John W. Kalich, Karaganis and White, Chicago, IL, H. Alfred Ryan, Chicago, IL, for Plaintiffs.
Dale E. Stephenson, Douglas A. McWilliams, Judith G. Deedy, Squire, Sanders and Dempsey, Cleveland, OH, for Defendants.
ORDER
LOZANO, District Judge.
This matter is before the Court on White Consolidated Industries, Inc.'s Motion to Dismiss Amended Complaint filed on January *686 31, 1997. For the reasons set forth below, the motion is DENIED.
BACKGROUND
This case concerns the Ninth Avenue Dump Superfund Site in Gary, Indiana (the "Site"). The Site, which operated as a chemical and industrial waste disposal facility during the 1970's, has been contaminated by releases and threatened releases of the hazardous waste dumped there. Plaintiff, Ninth Avenue Remedial Group, has conducted and is conducting cleanup activities at the Ninth Avenue Site under the approval of the Environmental Protection Agency ("EPA").
The Ninth Avenue Remedial Group is an unincorporated voluntary association of corporations which its members created to take collective action related to the Site. All of its members, who are also Plaintiffs in this action, have been named in orders issued by the EPA instructing them to undertake the cleanup of the Site. The Group and its members now sue several Defendants under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. § 9607 and 9613.
In their complaint, Plaintiffs allege that the Defendants, including White Consolidated Industries, Inc. ("WCI"), "by contract, agreement or otherwise, arranged (or is the successor in industry of an entity that arranged) for the disposal or treatment at the Site, or arranged with a transporter for the disposal or treatment at the Site, of hazardous substances." Am. Compl. ¶ 8. The Plaintiffs claim that the Defendants are strictly, jointly, and severally liable for all past and future response costs associated with the Site. The Plaintiffs also bring a contribution action for the response costs which the Plaintiffs have incurred which amount to over $20 million.
DISCUSSION
WCI moves to dismiss the Plaintiffs' amended complaint on three grounds. First, WCI claims that it rendered assistance in accordance to the National Contingency Plan ("NCP") and is therefore excused from liability pursuant to section 107(d) of CERCLA, 42 U.S.C. § 9607(d). WCI also asks that the Court dismiss Plaintiffs' section 107 claim because the Plaintiffs are potential responsible parties ("PRP's") which can only sue for contribution under section 113. Last, WCI argues that Plaintiffs' section 113 claim fails because it is untimely.
When deciding a motion to dismiss, this Court must assume the truth of a plaintiff's well-pleaded factual allegations, making all possible inferences in the plaintiff's favor. Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 420 (7th Cir.1994); Jenkins v. Heintz, 25 F.3d 536, 537 (7th Cir.1994), aff'd, 514 U.S. 291, 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995). This Court may not dismiss the Plaintiffs' Amended Complaint "unless it appears beyond doubt that the plaintiff[s] can prove no set of facts in support of [their] claim which would entitle [them] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957); Black v. Lane, 22 F.3d 1395, 1403 (7th Cir.1994). In order to prevail, the Defendant must demonstrate that the Plaintiffs' claims, as set forth in the Amended Complaint, are "without legal consequence." Veal v. First American Savings Bank, 914 F.2d 909, 913 (7th Cir.1990).
WCI introduces several exhibits with its motion to dismiss such as several EPA orders, several letters, and a state agency draft order. WCI argues that these documents are part of the pleadings that the Court can consider when deciding a motion to dismiss. A court can consider documents submitted by a defendant attached to a motion to dismiss as part of the pleadings if they are referred to in the plaintiff's complaint and they are central to the claims presented. See Venture Associates Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993); Marks v. CDW Computer Ctrs., Inc., 901 F. Supp. 1302, 1309 (N.D.Ill. 1995).
Plaintiffs do not object to the Defendant's Exhibits A, D, and E, which are administrative orders issued by the EPA. Because the complaint refers in general to administrative orders by the EPA and because the Plaintiffs do not object to the introduction of those orders, the Court assumes that the Plaintiffs *687 concede that such documents are central to their claims.
Plaintiffs do object to Exhibits B and C submitted by the Defendants. Exhibit B is a draft order by the Indiana Stream Pollution Control Board ("ISPCB"), which is neither signed nor dated. Exhibit C includes two letters from the ISPCB regarding the use and/or disposal of Blaw Knox Foundry Salt at the Site. (According to the Plaintiffs, Blaw Knox was a subsidiary of WCI, which merged with the latter.) The Court agrees with the Plaintiffs that these documents do not meet the test stated in Venture Associates.
The Defendant argues that Exhibits B and C are "documents and records concerning the Site," see Am. Compl. ¶ 6, that the Plaintiffs used to identify the Defendants as PRP's and that these exhibits are therefore part of the pleadings. If such a general reference in the complaint were sufficient to make a document a part of the pleadings, any document mentioning a Defendant and the Site could be considered part of the pleadings.
In addition, the Court cannot say that such documents are central to the Plaintiffs' claim. Unlike in Venture Associates, 987 F.2d at 431-32, where the defendants introduced the letter that constituted the contract in a breach of contract action, or in Ed Miniat, Inc. v. Globe Life Ins. Group., Inc., 805 F.2d 732, 739 n. 12, where the court looked at the employee benefit plan in a case concerning such plan, Exhibits B and C are not central to the Plaintiffs' claim. The Plaintiffs' claims against WCI are based on the alleged actions that WCI took with regard to the Site. To the point that those exhibits clarify the role of WCI in regard to the Site, they might be relevant evidence but they are not necessary to state a claim against the Defendants upon which relief can be granted. Accordingly, the Court will not consider Defendant's Exhibits B and C in deciding the motion to dismiss.
1. Rendering Care, Assistance, or Advice In Accordance With the National Contingency Plan ("NCP")
Section 107(d), 42 U.S.C. 9607(d)(1), provides that
[N]o person shall be liable ... for costs or damages as a result of actions taken or omitted in the course of rendering care, assistance, or advice in accordance with the National Contingency Plan ("NCP") ... with respect to an incident creating a danger to public health or welfare or the environment as a result of any releases of a hazardous substance or the threat thereof. This paragraph shall not preclude liability for costs or damages as the result of the negligence on the part of such person.
According to WCI, the Plaintiffs cannot recover from WCI because its only connection with the Ninth Avenue Site occurred when foundry salt from WCI was used to cover pools of hazardous substances at the Site in order to reduce the threat of fire and explosion, and to reduce the danger to the community in accordance with the applicable NCP. WCI alleges that the sand was used to comply with an order of ISPCB, which tested and approved the use of the sand as cover.
While in a future motion for summary judgment, WCI may prove its allegations, under Federal Rule of Civil Procedure 12(b)(6) the Plaintiffs have stated a valid claim against WCI. The Amended Complaint alleges that WCI or its predecessor in interest arranged for disposal or treatment at the Site of a hazardous substance.[1] That is sufficient to state a claim under CERCLA.
In order to rule in favor of WCI, the Court would have to make factual determinations which are not appropriate in a motion to dismiss. The Court would have to determine whether indeed the only actions of WCI relating to the Site were (1) in the rendering of care and assistance, (2) in accordance with the applicable NCP, and (3) in respect to an incident creating danger to the public or the environment. The Court cannot determine *688 this from the complaint and from the documents allowed as exhibits. Even if the Court would have considered Exhibits B and C, the Court could not have granted the motion to dismiss because WCI's argument is premised on the fact that its only involvement with the Site was the use of foundry salt as cover to comply with the ISPCB order. The Court cannot make such factual determination based on the complaint and in all the exhibits the Defendant submitted. Accordingly, the Court will not grant the motion to dismiss on this ground.
2. CERCLA Actions Brought By Other PRP's
WCI argues that Count One of the complaint must be dismissed because the Plaintiffs are potentially responsible parties ("PRP's") who cannot recover under CERCLA section 107, 42 U.S.C. § 9607. According to WCI, Plaintiffs' only remedy is a contribution action under section 113, 42 U.S.C. § 9613. The Plaintiffs have brought suit both under section 107 and section 113.
Prior to the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), CERCLA did not include an explicit contribution action. U.S. v. Colorado & Eastern R.R. Co., 50 F.3d 1530, 1535 (10th Cir.1995). To avoid leaving a PRP subject to liability under section 107 without means of fairly apportioning the CERCLA costs, courts allowed an implicit right to contribution under section 107 when a PRP had incurred in costs in excess of its pro rata share. Id.; United Technologies Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96, 100 (1st Cir. 1994). With the enactment of SARA in 1986, Congress codified this implicit right to contribution by amending section 113. Colorado & Eastern R.R. Co., 50 F.3d at 1535; see also In re Reading Co., 115 F.3d 1111, 1119 (3d Cir.1997) ("Congress acted to codify existing federal common law and to replace the judicially crafted measure with an express statutory remedy").
Under section 107 those liable for releases of hazardous waste must pay not only all the response costs incurred by a governmental entity but also for "any other necessary costs of response incurred by any other person." 42 U.S.C. § 9607(a)(4)(B). Under section 113 "[a]ny person may seek contribution from any other person who is liable or potentially liable under section [107(a) ]." 42 U.S.C. § 9613(f)(1). In a contribution action the court "allocate[s] response costs among liable parties using such equitable factors as the court determines are appropriate." Id.
There are several differences between suits brought under section 107 and those brought under section 113. See Pneumo Abex Corp. v. Bessemer and Lake Erie R.R. Co., 921 F. Supp. 336, 346 (E.D.Va.1996). Defendants held liable for costs under section 107 are subject to strict liability jointly and severally, unless the defendants show that the harm is divisible, which is difficult to do in CERCLA cases. See Akzo Coatings, Inc. v. Aigner Corp., 881 F. Supp. 1202, 1210 (N.D.Ind.1994). Under section 113, defendants are not subjected to several and joint liability and the plaintiff has the burden of allocating the harm to each defendants. Also, the statute of limitations for actions under section 113 is only three years while the statute of limitations is six years under section 107. See 42 U.S.C. § 9613(g).
Despite Plaintiffs' arguments to the contrary, the law in the Seventh Circuit is that liable parties can sue only for contribution under section 113. The appellate court first stated this legal principle in Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir.1994) and then affirmed it Rumpke, Inc. v. Cummins Eng. Co., 107 F.3d 1235 (7th Cir.1997).[2] In Akzo Coatings, the Seventh *689 Circuit ruled that when a party liable under CERCLA sues others, its claim is "a quintessential claim for contribution ... [Its] claim remains one by and between jointly and severally liable parties for an appropriate division of the payment one of them has been compelled to make." 30 F.3d at 764. According to the Akzo court, a party who generated or disposed of waste at a CERCLA site and who has incurred in response costs does not suffer the kind of injury that gives rise to a claim under section 107. Id. only parties forced to clean up contamination due to a third party's spill qualify as plaintiffs under a private cause of action under section 107. Id.
All other circuits which have considered the issue directly have agreed with the Seventh Circuit. See United Technologies Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96 (1st Cir.1994); New Castle Cty. v. Halliburton NUS Corp., 111 F.3d 1116 (3d Cir.1997); Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, (9th Cir.1997); U.S. v. Colorado & Eastern R.R. Co., 50 F.3d 1530 (10th Cir.1995); Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d 1489 (11th Cir.1996). According to these courts, Congress intended to provide full recovery of response costs under section 107 to innocent parties only. See New Castle Cty., 111 F.3d at 1121; United Technologies, 33 F.3d at 100.
Prior to SARA, PRP's could sue under section 107 only through an implied right of contribution. See supra. After Congress amended Section 113 in 1986, section 107 continued to determine liability, but section 113 now provided the mechanism for a liable party to apportion the costs. Pinal Creek Group, 118 F.3d at 1301-02; see also New Castle Cty., 111 F.3d at 1122 ("[S]ection 113 does not in itself create any new liabilities."). To permit a PRP to sue under section 107 directly would render contribution causes of action under section 113 and the statute of limitations for 113 actions meaningless. New Castle Cty., 111 F.3d at 1121, 1123; Colorado & Eastern R.R., 50 F.3d at 1536; United Technologies, 33 F.3d at 101.
The Plaintiffs argue that the law on this matter is mixed at best, and cite in support Key Tronic Corp. v. U.S., 511 U.S. 809, 818, 114 S. Ct. 1960, 1967, 128 L. Ed. 2d 797 (1994) ("§ 107 ... impliedly authorizes private parties to recover cleanup costs from other PRP's"), and Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746, 748 (7th Cir.1993) ("[T]he statute permits one responsible person to recover all or part of its response costs from another. § 9607(a)(4)(B)."). As the courts that have decided the question of whether a PRP can sue under section 107 have mentioned, reliance on the Key Tronic statement is misguided became the statement is only dicta. See Stearns & Foster Bedding Co. v. Franklin Holding Corp., 947 F. Supp. 790, 799 (D.N.J.1996); Sun Co. v. Browning-Ferris, Inc., 919 F. Supp. 1523, 1529 (N.D.Okla. 1996); see also In re Reading Co., 115 F.3d 1111, 1120 (3d Cir.1997) ("To the extent that the Supreme Court [in Key Tronic] refers to an `overlap' [between section 107 and 113], we construe this overlap to consist of the fact that some courts have held that a landowner may bring a direct action under § 107(a)(4)(B) to recover for its own clean-up costs from a polluter.") The only issue before the Key Tronic court was whether CERCLA permitted the recovery of attorney fees.
In Amcast, where the Seventh Circuit allowed a PRP landowner to sue another PRP under section 107, the court consider whether the district court had to apportion response costs between the parties when a PRP sues another PRP under section 107. The appellate court held that the lower court did not have to apportion the costs if the defendants had not counterclaimed for contribution. 2 F.3d at 748. Although the court did not consider the question of whether a PRP can only sue for contribution under section 113, the holding of the appellate court seems to clash with the idea that a PRP can only sue for contribution, which does require allocation from the lower court.
The Court does agree that Amcast appears to conflict with Akzo. Nonetheless, when confronted directly with the issue in Akzo the Seventh Circuit expressly ruled on the question before this Court. The Court cannot *690 ignore Akzo solely based on the implications of Amcast. The Seventh Circuit have subsequently endorsed Akzo in Rumpke and in AM Int'l. In addition, the final outcome in Amcast may stand even in light of Akzo because the PRP innocent landlord exception to the Akzo ruling likely applied to the plaintiff in Amcast.
The Plaintiffs cite several cases holding that PRP's can sue directly under section 107, but these are all district court cases from other circuits. See, e.g., Pneumo Abex Corp., 921 F. Supp. 336 (E.D.Va.1996); Barmet Aluminum Corp. v. Doug Brantley & Sons, Inc., 914 F. Supp. 159 (W.D.Ky.1995); Charter Township of Oshtemo v. Am. Cyanamid Co., 910 F. Supp. 332 (W.D.Mich.1995). Furthermore, several of the cases cited by the Plaintiffs have subsequently been reversed or overruled by the appellate courts in their circuits. See, e.g., Adhesives Research, Inc. v. Am. Inks & Coatings Corp., 931 F. Supp. 1231 (M.D.Pa.1996), overruled by New Castle Cty., 111 F.3d 1116; Pinal Creek Group v. Newmont Mining Corp., 926 F. Supp. 1400 (D.Ariz.1996), rev'd, 118 F.3d 1298, 1997 WL 362462.
The Plaintiffs and the district court cases that they cite argue that the express language of section 107 permits a cause of action by the Plaintiffs. They claim that section 107 provides for the recovery of response costs by "any other person," not "any innocent person." See Adhesives Research, 931 F.Supp. at 1238; Pinal Creek Group, 926 F.Supp. at 1406; Pneumo Abex, 921 F.Supp. at 347; Barmet Aluminum Corp., 914 F.Supp. at 163; Charter Township of Oshtemo, 910 F.Supp. at 337. SARA did not add any qualifications to this broad language. Pinal Creek Group, 926 F.Supp. at 1406; but see New Castle Cty., 111 F.3d at 1122 (stating that although section 107 provides for recovery of costs expended by any person, such person must experience an injury of the type that gives rise to the claim under section 107).
According to this line of cases CERCLA does not differentiate between liable and nonliable parties when suing under section 107, but rather between parties that have engaged in response actions and those that have not. Pinal Creek Group, 926 F.Supp. at 1409. Allowing liable but respondent parties to sue under section 107 creates incentives for early cleanup and response by (1) imposing the burden of proof concerning allocation on the defendants; (2) minimizing the plaintiff's cost in tracking down and suing every other PRP; (3) allowing the party that initiates cleanup the benefit of a longer statute of limitations; and (4) relieving the plaintiff of the risk of being held liable for "orphan shares" cleanup costs that correspond to insolvent or absent parties. Pinal Creek Group, 926 F.Supp. at 1407; see also Pneumo Abex, 921 F.Supp. at 347 (stating that allowing PRP's to sue under section 107 preserves the Act's incentive to settle early); Charter Township of Oshtemo, 910 F.Supp. at 337 (stating that liable parties may not be amenable to any initiate cleanup if their only recourse is through contribution).
While the Court may recognize the strength of some of these arguments, the Court is bound by the Seventh Circuit decision in Akzo. In this circuit, liable parties can sue other liable parties under CERCLA only for contribution, except for the exception discussed in Rumpke and Amcast.
The Plaintiffs argue further that before they can bring a section 113 action, there must be a prior or pending section 106 or section 107 action. Because no such action has occurred in this case, Plaintiffs argue that they can only bring a section 113 action if they also bring a section 107 action. Otherwise, they will be without remedy.
The Plaintiffs cite dicta from Rumpke, 107 F.3d at 1241, stating that "a § 106 or § 107 action apparently must either be ongoing or already completed before §§ 113(f)(1) is available." The appellate court's suggestion was based on language from section 113(f)(1) stating that a person may seek contribution from other PRP's "during or following any civil action under section [106] ... or under section [107(a)]." The court apparently ignored further language in section 113(f)(1) that clarified that "[n]othing in [the] subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action." 42 U.S.C. § 9613(f)(1); see also In re Reading Co., 115 *691 F.3d at 1120 ("§ 113(f)(1) specifically permits an action for contribution to be brought `in the absence of a civil action.'"); Sun Co., 919 F.Supp. at 1530 n. 5 ("A civil action clearly is not a precondition for bringing a contribution action, either under CERCLA ... or common law.") (citation omitted).
In light of the express language of Section 113(f)(1), this Court will not be guided by the equivocal dicta in Rumpke. Without a direct holding from the Seventh Circuit to the contrary, this Court finds that PRP can bring a section 113 action even when no prior or pending section 106 or 107 civil actions have occurred.
Although this Court agrees with the legal arguments of WCI, the Court will nevertheless deny WCI's motion because the Plaintiffs have not been adjudicated liable parties under CERCLA. Although Seventh Circuit precedent as well as case law from other courts cited above clearly states that a PRP can only sue for contribution, the case law is mixed as to whether a party must be adjudicated liable to be precluded from suing under section 107. In many cases, although the plaintiffs had not been adjudicated liable, they had admitted liability. See, e.g., Pinal Creek Group, 118 F.3d at 1299 (where the plaintiff admitted that it was partly responsible for a portion of the cleanup costs); New Castle Cty., 111 F.3d at 1124 (where the plaintiff conceded that it was a PRP under CERCLA); United Technologies, 33 F.3d at 101 (where the plaintiffs admitted that they were liable under CERCLA). In some other cases where the plaintiffs did not admit being liable but the courts did not allow them to sue under section 107, the issue was before the court in a motion for summary judgment and there was undisputed evidence before those courts that the plaintiffs were liable under CERCLA. See, e.g., Sun Co., 919 F.Supp. at 1528 (where, in a summary judgment motion, the plaintiffs conceded that they had generated waste at the site); INX Int'l Inks Co. v. A.C. Rochester, No. 89-C-834, at 9, 1996 WL 928490 (E.D.Wis. Dec. 18, 1996) (where, in a motion for summary judgment, undisputed evidence showed that a plaintiff had generated waste disposed at the site); see also Redwing Carriers, 94 F.3d at 1496 (where the plaintiff had been adjudicated liable under CERCLA by the trial court in a motion for summary judgment).
Two district courts in this circuit have espoused different views on whether a plaintiff must concede liability or be adjudicated liable before it is precluded from suing under section 107. A Wisconsin court concluded in an order for summary judgment that "the party need not have admitted liability or have been adjudged liable for the court to determine that the CERCLA action is one for contribution." INX Int'l, Inc.'s Co., No. 89-C-834, at 10 (E.D.Wis. Dec. 18, 1996).
In contrast, the court in U.S. v. SCA Services, Inc., 865 F. Supp. 533, 543 (N.D.Ind. 1994) rejected the defendant's motion to dismiss the plaintiff's section 107 action because the plaintiff had not been adjudicated liable and had not conceded liability. In SCA Services, the plaintiff denied liability even though it had entered into a consent decree with the government, allegedly to avoid the cost of litigation. 865 F.Supp. at 543. The court recognized that CERCLA allows parties to enter into consent decrees with the Government without admitting liability. See 42 U.S.C. § 9622(d)(1)(B) ("[T]he participation of any party in the process under this section shall not be considered an admission of liability for any purpose.") The SCA Services court added further:
Even though liability is strict under CERCLA, it is obvious that legal liability cannot attach until a party has either admitted liability or has been adjudicated as liable. Strict liability is simply "liability without fault," not liability without adjudication. Even in a strict liability case it is still necessary for there to be a determination that the conditions giving rise to strict liability were, in fact, present.
865 F.Supp. at 543 (citation omitted).[3]
This Court adopts the position of the SCA Services court. The Court first notes *692 that the motion before the Eastern District of Wisconsin, as well as the motion before the court in Akzo, were motions for summary judgment which allowed the courts to rely on the undisputed facts in the record to make their decision. The motion before this Court is a motion to dismiss, as was the motion before the SCA Services court. The determination of whether the Plaintiffs are liable as PRP's involve factual questions best left for a motion for summary judgment or for trial. See, e.g., Rumpke, 107 F.3d at 1239 (where the court denied summary judgment because there was a genuine issue of fact as to whether the landowner PRP had disposed of waste at the site).
From the stipulations filed by some of the Plaintiffs, see Stipulation Regarding Certain Facts, all filed on July 23, 1997, by Plaintiffs Pierce and Stevens Corp., Cargill, Inc., Flint Ink Corp., General Electric Company, Monsanto Company, Morton Int'l. Inc., Navistar Int'l Transportation Company, and Regal Tube, it is undisputed that at least some of the Plaintiffs generated waste that was disposed of at the Site. Nonetheless, the Plaintiffs deny liability. Even if they arranged for the disposal of waste at the Site, the Plaintiffs can present proof that the releases occurred under the very limited circumstances that constitute defenses under CERCLA. See 42 U.S.C. § 9607(b). Although few persons that fall under section 107(a)(1)-(4) would escape liability, the Court cannot say at this stage in the case that none of the Plaintiffs could do so. While the outcome could be different in a motion for summary judgment, the motion before the court is a motion to dismiss.
At the same time, the Court warns the Plaintiff that if the Defendants in this case show either in a motion for summary judgment or at trial that the Plaintiffs are liable as PRP's under CERCLA, they will not be able to recover under section 107. While the Court has denied WCI's motion to dismiss because the Court cannot conclude at this TOTAL P.03 juncture that the Plaintiffs are liable, the Court does agree with the legal argument presented by WCI. If the Plaintiffs are indeed liable, the Court will not hold Defendants jointly and severally liable and will apply the three-year statute of limitations to Plaintiffs' action.
The Court, however, also warns the parties that if it later determines that the Plaintiffs can proceed against the Defendants under section 113 only, and they cannot hold the Defendants jointly and severally liable, the Court may exercise its equitable authority under section 113(f)(1) to allocate the cost for any orphan shares among all the parties. See Pinal Creek Group, 118 F.3d at 1303 ("Under § 113(f)(1), the cost of orphan shares is distributed equitably among all PRP's, just as cleanup costs are."); Stearns & Foster Bedding, 947 F.Supp. at 801 (stating that although a PRP cannot sue under section 107, the courts, in equitably allocating the costs in a contribution action, can also allocate orphan shares, thus relieving the PRP plaintiff from the burden of paying for all the orphan shares.) Furthermore, the Court is aware that one of the factors it may take into account when allocating the response costs is the degree of cooperation shown by a PRP in cleaning up the site. See Pinal Creek Group, 118 F.3d at 1304-05.
3. Statute of Limitations for the Plaintiffs' Section 113 Action
Last, WCI argues that the Court should dismiss the Plaintiffs' section 113 action because it is time barred under CERCLA section 113(g)(3). CERCLA mandates that
no action for contribution for any response costs or damages be commenced more than three years after (A) the date of judgment in any action under this chapter for recovery of such costs or damage, or (B) the date of an administrative order under section 9622(g) of this title (relating to de minimis settlements) or 9622(h) of this title (relating to cost recovery settlements) or entry of a judicially approved settlement with respect to such costs or damages.
42 U.S.C. § 9613(g)(3). WCI claims that the statute of limitations for the Plaintiffs' contribution action began running on January 30, 1991, when several PRP's entered into a de *693 minimis settlement with EPA. Therefore, WCI argues, the Plaintiffs' section 113 claim against it filed in June 1996 is untimely.
Although the Plaintiffs were not parties to the de minimis settlement in January 1991, WCI claims that the settlement triggered the statute of limitations for the Plaintiffs because it applies to a contribution action for "any response cost or damages" regardless of whether the Plaintiffs took part in the de minimis settlement agreement. WCI argues that because the statute does not state that it triggers the statute of limitations only for settling parties, it must apply to nonsettling parties too. According to WCI, this is justifiable because at the time a de minimis settlement is entered, the relative contributions to a site by each party are determined and the parties have sufficient information on the site, the responsible parties, and their share of responsibility. WCI argues further that to limit the triggering of the statute of limitation to the de minimis settlers would be meaningless because in reality de minimis settlers never sue for contribution.
The main problem with WCI's argument is that a PRP may not have a cause of action against other PRP's at the time the de minimis parties settle. If a PRP has not incurred either response costs or damages at the time other parties settle, that PRP does not have a cause of action, even if it's aware that in the near future the government may demand it to engage in a cleanup response. How can a de minimis settlement trigger a statute of limitations in a cause of action which is not viable yet? As a general rule, the statute of limitations does not begin to run until a plaintiff's cause of action accrues. See New Castle Cty., 111 F.3d at 1124. Therefore, the language of section 113(g)(3) does not need specify that a settlement triggers the statute of limitation only for those claims which accrue with the settlement.
At this point the Court does not have to decide what event, if any, triggers the statute of limitations for the Plaintiffs' contribution action. Compare Rumpke, 107 F.3d at 1241 ("The contribution claim would not accrue until one of the events specified in § 9613(g)(2) occurred, at which time three years would be available in which to file an appropriate suit.") with Sun Co., 919 F.Supp. at 1531 ("Absent a judgement, a cause of action for contribution does not arise until the party seeking contribution has paid more than her fair share of a common liability."). The Court only holds that the de minimis settlement of which the Plaintiffs were not parties did not trigger the statute of limitations for their section 113 claim. For this reason, WCI's Motion to Dismiss is DENIED.
CONCLUSION
For the foregoing reasons, the Court DENIES White Consolidated Industries, Inc.'s Motion to Dismiss Amended Complaint.
NOTES
[1] The Court notes that the Plaintiffs have not alleged any negligence by WCI. If WCI later succeeds in showing that all of its actions relating to the Site involve rendering care or assistance in accordance with the NCP, the Plaintiffs have not stated a claim for negligence under section 107(d)
[2] Rumpke created an exception to the law as announced in Akzo. Under Rumpke, a present landowner who, although liable under section 107 of CERCLA, is not responsible for having caused the release of hazardous material on its property, can recover under section 107. 107 F.3d at 1241; see also AM Int'l Inc. v. Datacard Corp., 106 F.3d 1342 (7th Cir.1997). The First Circuit has also hinted that a PRP who spontaneously and without any governmental prodding initiates a cleanup may have a cause of action under section 107. See United Technologies, 33 F.3d at 99 n. 8. Neither exception applies to the case at hand because the Defendant claims that the Plaintiffs are liable as generators of hazardous materials, not as landowners, and because the Plaintiffs' response actions with regard to the Site occurred only after the EPA ordered them to clean up.
[3] The INX Int'l Inks court and the SCA Services court also differ in their interpretation of Akzo. According to the INX Int'l Inks court, the plaintiff in Akzo had not been adjudicated liable or admitted liability. In contrast, the SCA Services court interpreted Akzo as a case where the plaintiff had admitted liability. 865 F.Supp. at 542-43 (quoting Akzo, 30 F.3d at 763). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1388620/ | 884 F.Supp. 1068 (1995)
Ruth E. JOHNSON
v.
Gregory M. EATON, et al.
Civ. A. No. 93-1081-M1.
United States District Court, M.D. Louisiana.
May 4, 1995.
*1069 *1070 Garth J. Ridge, Bivins & Ridge, Baton Rouge, LA, for plaintiff.
Scott H. Crawford and David C. Sander, Crawford & Lewis, Baton Rouge, LA, for defendants.
RULING ON POST-TRIAL MOTIONS
RIEDLINGER, United States Magistrate Judge.
This matter is before the court on the defendants' motion to amend the judgment and motion for a finding that the action was brought in bad faith and for the purpose of harassment, and the plaintiff's motion for an award of attorney's fees. The motions are opposed.
Plaintiff, Ruth E. Johnson, brought this action pursuant to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. Plaintiff alleged that two communications sent to her by the defendants violated various provisions of the FDCPA and that the defendants were liable for actual and additional damages, as well as attorney's fees and costs under section 1692k(a). Defendants filed a motion for summary judgment on the issue of their status as debt collectors under the FDCPA. The motion was denied and the court determined that the defendants were debt collectors as that term is defined by the FDCPA.[1] Plaintiff then filed a motion for partial summary judgment to determine the defendants' liability for the violations alleged and asked that the issue of damages be reserved for determination by the jury. The court granted the plaintiff's motion for partial summary judgment, finding that the defendants' communications violated sections 1692g, 1692e(2)(A), 1692e(9) and 1692e(11). Plaintiff prevailed on all claims except those under sections 1692e, 1692e(10) and 1692f.[2]
A jury trial was held on March 8, 1995. The jury returned a verdict finding that the conduct of defendant Eaton was not a legal cause of any actual damages to the plaintiff; that the plaintiff was not entitled to an award of additional damages against defendant White, but was entitled to additional damages against Eaton in the amount of $125.00 for each of his violations of the FDCPA. See, special verdict form attached to record document number 61.
Defendants' Motion for Finding that the Action Was Brought in Bad Faith and for the Purpose of Harassment
Defendants moved for attorney's fees and costs under section 1692k(a)(3), claiming that the plaintiff brought this action in bad faith and for the purpose of harassment. Plaintiff asserted that such a motion can only be brought by a prevailing defendant, and since the defendants in this case violated the FDCPA they cannot be prevailing defendants.
*1071 Section 1692k(a)(3) provides in pertinent part that: "On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs." This section allows the court in its discretion to award attorney's fees and costs to a prevailing defendant who shows affirmatively that the plaintiff brought an FDCPA claim both in bad faith and for the purpose of harassment. See, Perry v. Stewart Title Co., 756 F.2d 1197, 1211 (5th Cir.1985), modified on other grounds, 761 F.2d 237 (5th Cir.1985); Knowles v. Credit Bur. of Rochester, 1992 WL 131107, 1992 U.S.Dist. LEXIS 8349 (W.D.N.Y., May 27, 1992).
White argued that she is a prevailing defendant in this action because the plaintiff withdrew allegations of actual damages against her approximately two weeks before trial and did not prevail on her claim of statutory damages. Eaton argued that he is a prevailing defendant because the jury found that his actions were not the cause of any actual damages to the plaintiff.
Defendants' contention that they are "prevailing defendants" is without merit. Defendants virtually ignore the summary judgment findings that their conduct violated numerous provisions of the FDCPA. Yet, clearly, except for the general claims under sections 1692e and 1692f, the plaintiff prevailed on the merits. Defendants have not pointed to any resolution of the merits of the dispute in their favor which changed the legal relationship between them and the plaintiff.[3] Furthermore, the defendants cite no authority to support their argument that their partial success in defending against the plaintiff's claims for damages is sufficient to support a finding that they are prevailing parties.
Even assuming that the defendants could somehow be designated as successful or prevailing, their arguments that the record supports a finding that the plaintiff brought this action both in bad faith and for purposes of harassment are unpersuasive. Defendants focused on the fact that the plaintiff made allegations against both defendants that she suffered stress, humiliation and extreme mental anguish and maintained these allegations throughout most of this litigation. Then, approximately two weeks before trial, the plaintiff withdrew the claim of actual damages as to the communication signed by White. As to defendant Eaton, the plaintiff maintained the allegations based only on her own testimony which the jury ultimately found to be not credible. The result, claimed the defendants, was that they were forced to bear the costs associated with defending themselves against baseless claims and put in a position of being potentially responsible for over $15,000.00 in attorney's fees. Defendants asserted that the only interpretation of these facts is that the plaintiff misled them for the purpose of building up her attorney's fees.
The fact that ultimately the plaintiff did not prevail on her claim for actual damages against Eaton or that there may have been unnecessary delay in notification that the plaintiff was not claiming actual damages against White, is insufficient evidence to conclude that the plaintiff initiated this action in bad faith or to harass. The record does not support the defendants' assertion that the claim for actual damages forced them to bear the cost of defending against baseless claims and increased their exposure to liability for attorney's fees. Defendants did not depose the plaintiff until less than a month before trial. Nothing prevented the defendants from deposing the plaintiff at an earlier date in order to explore the accuracy of her allegations or determine the factual basis for the actual damages claim.[4]
*1072 Plaintiff brought this action under the FDCPA and ultimately proved that the defendants violated four provisions of the Act, and that she was entitled to an award of statutory damages against Eaton. Defendants' motion for attorney's fees and costs is simply based on their own interpretation or characterization of the plaintiff's suit and her reasons for bringing it. However, there is no factual support for this interpretation nor any evidence to support a finding that the plaintiff was motivated by bad faith or a desire to harass the defendants.
Plaintiff's Motion for Attorney's Fees
Plaintiff moved for an award of attorney's fees and costs under section 1692k(a)(3). This section provides that in the case of any successful action to enforce the FDCPA, a debt collector who failed to comply with the Act's provisions with respect to any person is liable to that person for the costs of the action, and a reasonable attorney's fee as determined by the court. In support of the motion the plaintiff filed a memorandum accompanied by an affidavit of counsel setting forth the time expended in this case with a description of the services rendered. Plaintiff claimed compensation for 146.3 hours at a rate of $100.00 per hour, for a total fee of $14,630.00. Plaintiff submitted an affidavit from another attorney concerning the prevailing market rate and a statement of expenses claiming costs in the amount of $556.56. Plaintiff argued that the summary judgment finding that the defendants were liable for violating four provisions of the Act, and the jury's verdict awarding $500.00 in statutory damages against Eaton, establish that she is a prevailing party in this action. Based on these same facts the plaintiff argued that she achieved a high degree of success and should be awarded the entire fee requested.
Defendants opposed the plaintiff's motion on several grounds. First, defendant White argued that since the plaintiff was not successful in enforcing any liability against her, she should not be held responsible for any attorney's fees and costs under section 1692k(a)(3). She relied upon the Supreme Court's decision in Farrar v. Hobby, arguing that the finding of no damages against her is analogous to a civil rights plaintiff who is not entitled to fees because he only succeeds in obtaining an award of nominal damages. Defendant White asserted that the plaintiff cannot show any benefit or change in behavior as a result of filing suit against her. Defendant Eaton also argued that the plaintiff cannot show any modification in his conduct resulting from the outcome of this case. Therefore, no attorney's fees should be awarded because the plaintiff is not a prevailing party.
Alternatively, the defendants argued that the plaintiff's request for attorney's fees is unreasonable because the plaintiff only achieved limited success the plaintiff withdrew the allegations of actual injury against White prior to trial and failed to prove them at trial against Eaton. Furthermore, if the plaintiff had not made baseless allegations of actual injury in the complaint the defendants would have made an offer of judgment shortly after the complaint was filed that would have limited their exposure for attorney's fees. Defendants also contended that the amount of time submitted over 70 hours for researching and drafting memoranda in opposition and support of dispositive motions is excessive.
In the context of this FDCPA case the defendants' contention that the plaintiff is not entitled to any fees must be rejected. The statute states that any debt collector who fails to comply with the FDCPA is liable for reasonable attorney's fees and costs. Therefore, an award of attorney's fees and costs is mandatory where the plaintiff has established that the defendant has violated *1073 any provision of the Act.[5]See, Pipiles v. Credit Bur. of Lockport, Inc., 886 F.2d 22, 27 (2d Cir.1989); Emanuel v. American Credit Exch., 870 F.2d 805, 809 (2d Cir.1989). Furthermore, the plaintiff is a prevailing party in this action. Though White is not liable for actual or statutory damages, the findings of liability against her make her liable to the plaintiff for reasonable attorney's fees and costs. Based on the summary judgment ruling and the jury verdict, judgment was entered against Eaton for $500.00 in additional damages.[6] Clearly, the outcome of this case has materially altered the legal relationship of the parties.[7]
The next step is to determine what fee award is reasonable in this case. The $100.00 hourly rate claimed was not objected to by the defendants and is a reasonable rate.
After a thorough review of the plaintiff's motion it is clear that there must be some reduction in the amount of time compensated. Approximately 70 hours are claimed for research and drafting of two memoranda in opposition to the defendants' dispositive motions and the memoranda in support of the plaintiff's motion for partial summary judgment. A review of these pleadings and the amount of time indicated for the services described shows that this amount of time is excessive and should be reduced by 25 hours.[8]
Plaintiff achieved a high level success on summary judgment.[9] Both defendants were found liable for violating four specific provisions of the FDCPA. The alleged violations of the general provisions of sections 1692e and 1692f were the only claims on which the plaintiff did not prevail. This should not result in a reduction because this case cannot be viewed as a series of distinct claims. The same underlying facts supported all claims against both defendants.[10] However, the plaintiff's success at trial was more limited only one defendant was found liable for monetary damages. Plaintiff brought this action seeking both actual and additional damages against both defendants and ended up with only a $500.00 award of statutory damages against one defendant. Viewing the litigation as a whole, this factor warrants some reduction. The number of hours claimed for compensation will be reduced by 15 hours.[11]
After reducing the total number of compensable hours by 40 the lodestar is calculated by multiplying $100.00 times 106.3 hours. Adding $200.00 for plaintiff's opposition to the defendants' post-trial motions,[12] results in an award of reasonable attorney's fees in the amount $10,830.00. There is no dispute as to the amount or reasonableness of the plaintiff's request for an award of costs of $556.56.
Defendants' Motion to Amend
Defendants moved that the court amend the judgment to reflect that judgment is not *1074 rendered against them as to reasonable attorney's fees and cost. Defendants' arguments in support of this motion are essentially the same arguments made in regard to the motions for attorney's fees. This ruling on the motion for attorney's fees makes it clear that the defendants' motion to amend is without merit.
Accordingly, the defendants' motion to amend the judgment is denied and the defendants' motion for a finding that the action was brought in bad faith and for purposes of harassment is denied.
Plaintiff's motion for attorney's fees is granted. Plaintiff is awarded reasonable attorney's fees in the amount of $10,830.00 and costs in the amount of $556.56.
NOTES
[1] The Supreme Court recently addressed the issue involved in the defendants' motion for summary judgment the application of the FDCPA to attorneys engaged in consumer debt collections. The Court held that attorneys who meet the definition of debt collector are subject to the Act. See, Heintz v. Jenkins, ___ U.S. ___, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995).
[2] The basis for denying summary judgment on the claims under sections 1692e, 1692e(10) was that the defendants had already been found liable for the conduct underlying those claims under a more specific provision of section 1692e. Plaintiff also alleged that conduct that violated section 1692e(2)(A) also violated section 1692f. However, the court determined that the plaintiff had not established that she was entitled to summary judgment as a matter of law on this claim.
[3] See, Farrar v. Hobby, ___ U.S. ___, ___, 113 S.Ct. 566, 573, 121 L.Ed.2d 494 (1992) (under 42 U.S.C. § 1988 prevailing party must be able to point to resolution of the dispute which materially alters the legal relationship of the parties); Hensley v. Eckerhart, 461 U.S. 424, 433 n. 7, 103 S.Ct. 1933, 1939 n. 7, 76 L.Ed.2d 40 (1983) (standards for awarding attorney's fees under 42 U.S.C. § 1988 are generally applicable in all cases in which Congress has authorized an award of fees to a prevailing party).
[4] Defendants' argument that the plaintiff's conduct in this litigation somehow prevented them from making an offer of judgment under Rule 68, Fed.R.Civ.P., is both unsupported by the record and illogical, and therefore wholly without merit. Defendants could have promptly deposed the plaintiff and then made an offer of judgment. Instead they moved to dismiss on the basis of a non-existent exemption. Even after this effort proved fruitless, the defendants could have made an offer of judgment, but they did not. After the plaintiff received a favorable ruling on her motion for summary judgment, an offer of judgment could have been made. None was. Eaton and White chose to mount a vigorous defense, which is their right. But having chosen to put the plaintiff to the test, they cannot not bemoan the consequences of her passing it.
[5] The reason for mandatory fees is that Congress chose a private attorney general approach to enforcement under the FDCPA. Tolentino v. Friedman, 46 F.3d 645, 651 (7th Cir.1995).
[6] The Supreme Court has stated that a judgment for damages in any amount, whether compensatory or nominal, modifies the defendant's behavior for the plaintiff's benefit by forcing the defendant to pay an amount of money that he otherwise would not have to pay. Farrar, ___ U.S. at ___, 113 S.Ct. at 574.
[7] Eaton's assertion that this suit has not modified his conduct in regard to his collection notices is unsupported by any credible evidence presented at the trial.
[8] Counsel attested to the fact that he exercised billing judgment but did not specify how it was exercised by indicating where he spent time for which he did not claim compensation.
[9] The most critical factor in determining the reasonableness of a fee award is the degree of success obtained. Farrar, ___ U.S. at ___, 113 S.Ct. at 574.
[10] Hensley, 461 U.S. at 434-35, 103 S.Ct. at 1940.
[11] Defendants' "offer of judgment" argument is again rejected. The argument is unsupported by the record and not a valid basis for reduction of the plaintiff's claim for attorney's fees.
[12] Plaintiff asked to supplement the motion to include the time spent opposing the defendants' post-trial motions. This is unnecessary. The court can review the memoranda and fairly assess adequate compensation without the filing of any additional pleadings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/753119/ | 141 F.3d 1168
NOTICE: Eighth Circuit Rule 28A(k) governs citation of unpublished opinions and provides that they are not precedent and generally should not be cited unless relevant to establishing the doctrines of res judicata, collateral estoppel, the law of the case, or if the opinion has persuasive value on a material issue and no published opinion would serve as well.Kendrick Lee HARRIS, Appellant,v.Kelly FINAN, Officer; St. Louis Police Department; City ofSt. Louis, Appellees.
No. 97-2721.
United States Court of Appeals, Eighth Circuit.
Submitted March 20, 1998.Filed March 24, 1998.
Appeal from the United States District Court for the Eastern District of Missouri.
Before BOWMAN, WOLLMAN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
PER CURIAM.
1
Kendrick Lee Harris appeals from the order of the District Court1 dismissing without prejudice his 42 U.S.C. § 1983 (1994) suit for failing to comply with the court's show cause order and for failing to prosecute. After careful review of the record and the parties' submissions, we conclude that the District Court did not abuse its discretion. See Schooley v. Kennedy, 712 F.2d 372, 374 (8th Cir.1983) (per curiam). Accordingly, we affirm. See 8th Cir. R. 47B.
1
The Honorable Stephen N. Limbaugh, United States District Judge for the Eastern District of Missouri | 01-03-2023 | 04-18-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1520807/ | 767 F.Supp. 398 (1991)
In the Matter of the Complaint of G & G SHIPPING COMPANY, LTD. OF ANGUILLA, as Owner of the M/V "WISHING STAR" for Exoneration from or Limitation of Liability, Petitioner.
WILLIAM H. McGEE & CO., INC., Plaintiff,
v.
The M/V "NEDLLOYD VAN NOORT", et al., Defendants.
Alan GUMBS and Carlos Gumbs, Plaintiffs,
v.
The M/V "NEDLLOYD VAN NOORT", et al., Defendants.
INSTITUTE OF LONDON UNDERWRITERS, Plaintiff,
v.
The M/V "NEDLLOYD VAN NOORT", et al., Defendants.
Civ. Nos. 89-0701 HL, 89-1653 HL, 89-1669 HL and 89-1266 HL.
United States District Court, D. Puerto Rico.
April 26, 1991.
*399 *400 Fernando D. Castro, Calvesbert & Brown, San Juan, P.R.
Lourdes C. Menendez, Carolina, P.R.
Fernando Quintana, Sec., San Juan, P.R.
Carlos J. Quilichini, Hato Rey, P.R.
Rodriguez, Portas, Hidalgo, Inc., Aureliano J. Reyes, Controller, Puerto Nuevo, San Juan, P.R.
Eugene F. Hestress, Old San Juan, P.R.
OPINION AND ORDER
LAFFITTE, District Judge.
[T]he principal failing occurred in the sailing,
And the Bellman, perplexed and distressed,
Said he had hoped, at least, when the wind blew due East,
That the ship would not travel due West![1]
*401 The helmsman of the doomed M/V Wishing Star (the "Wishing Star") certainly can share the sentiments of Lewis Carroll's Bellman, for had he turned right instead of left, the Wishing Star would not now be lying on the ocean floor. The Wishing Star collided with the M/V Nedlloyd Van Noort (the "Van Noort") on December 16, 1988, interrupting an otherwise clear and tranquil night shrouding the international waters off the northern coast of Puerto Rico. Fortunately, there was no loss of life. The collision spawned four separate actions.
The owner of the Wishing Star, G & G Shipping Co. ("G & G"), petitioned for limitation of liability pursuant to 46 U.S.C.App. § 181, et seq., alleging the absence of privity and knowledge of any acts of negligence or unseaworthiness that led to the collision. The limitation action involves several cargo claimants with interests in the cargo that was lost aboard the Wishing Star. The Van Noort's owner, Nedlloyd Lijnen B.V. ("Nedlloyd"), has also joined as a claimant to recover damages sustained to the Van Noort. In a second action, the Institute of London Underwriters ("I.L.U."), the Wishing Star's hull underwriter, filed suit against the Van Noort to recover for the hull loss.[2] In a third action, William H. McGee and Co., an insurer of some of the cargo aboard the Wishing Star, filed a claim by subrogation against the Van Noort. Finally, two of the principal shareholders of G & G, Alan and Carlos Gumbs, filed an action against the Van Noort for the loss of property that was aboard the Wishing Star.[3] The Court, having original jurisdiction pursuant to 28 U.S.C. § 1333, consolidated the separate actions for a single trial, held on December 3-5, 1990.[4] After due consideration and deliberation on the testimonial and documentary evidence submitted, the Court enters its findings of fact and conclusions of law.
I. FINDINGS OF FACT
1. The Wishing Star was a 156-foot, 188 gross ton cargo vessel engaged in the inter-island trade between Puerto Rico and the Lesser Antilles. It flew the Anguillan flag and was owned and operated by G & G, an Anguillan, British West Indies corporation with its principal office located at The Valley, Anguilla. The Wishing Star is equipped with radar, a VHF radio and manual steering.
2. G & G, comprised of three shareholders including Alan and Carlos Gumbs, purchased the Wishing Star in May, 1988. Carlos Gumbs (hereinafter, "Captain Gumbs") is the president of the corporation and holder of 51% of its shares. Alan Gumbs is the corporation's secretary and managing officer. Captain Gumbs, a seaman with over 20 years experience in the inter-island trade and a licensed Anguillan and Honduran captain, was also the Wishing Star's master, living much of the time aboard the vessel. Besides Captain Gumbs, there were five members of the Wishing Star's crew, only one of whom, the third engineer Lenox Phillips, was licensed. The remaining four unlicensed crew members took watches on the bridge, generally under the supervision of Captain Gumbs.
3. The Van Noort, a 600-foot, 20,000 gross ton container ship, flies the Dutch flag. It is owned by claimant-defendant Nedlloyd, a Netherlands corporation with its principal office in Rotterdam. The Van *402 Noort, is engaged in "round the world" trade, and is replete with modern navigational equipment, including two radars, an Automatic Plotting Radar Aid ("ARPA"), gyro repeaters, echo sounders, a course recorder, a gyro compass, a magnetic compass, an automatic pilot and a satellite navigator.
4. On the night of December 15, 1988, the Caribbean waters were calm, the visibility good and the maritime traffic relatively light. The Van Noort departed from St. Lucia, in the Netherlands Antilles, en route to San Juan, Puerto Rico, with a crew of twenty three, headed by Captain Adrian Van Loo. The estimated time of the crossing was 24 hours. At approximately 10:00 p.m. on that same night, the Wishing Star and her crew of six left San Juan harbor fully loaded with cargo bound first for St. Maarten, Netherlands Antilles. The Wishing Star's usual course would take her across the northern coast of Puerto Rico in an easterly direction through the virgin passage between the islands of St. Thomas and Culebra.
5. At midnight, as December 15 slipped quietly into December 16, Patrick Riley, an unlicensed seaman with four years experience as a helmsman, a lookout, a cargo loader and a cook, came up to the bridge to take the Wishing Star's wheel for the 12:00 a.m. to 4:00 a.m. watch. Riley, along with the rest of the crew, had been loading cargo onto the Wishing Star from 7:00 a.m. that morning until 7:00 in the evening. When the Wishing Star left San Juan at 10:00 p.m. Riley testified that he went below to "cool[] out for a while and catch myself." Two hours later he was awake and at the helm.
6. Before approaching the wheelhouse Riley confirmed that all navigation and running lights were operating. The Wishing Star's radar was operating, but Riley was not trained in radar. He testified that he glanced at the screen every half hour or so to make sure the Wishing Star was clear of land on her starboard side. Riley continued to steer the ship's course at 110 degrees with a speed of approximately 11-12 knots.
7. Captain Gumbs supervised Riley while on watch, and served as the lookout. He left the bridge from time to time, always returning to check Riley's piloting and navigation. The helmsman on the previous watch, Charles Bryson, occasionally came up to the bridge to smoke cigarettes and serve as lookout when Captain Gumbs was below. Riley stated that visibility from the bridge was good, except for the glare from the lights of St. Thomas off the bow of the Wishing Star. Riley remembers being able to site a cruise ship about eight miles away off to the port side around 1:00 a.m.
8. The Van Noort steadily made her way up from St. Lucia, and prepared to make a turn to the west across the northern coast of Puerto Rico toward San Juan when the Van Noort's third officer, 24 year old Gisbert S. Van Nieuwkoop, came on duty to take the 12:00 to 4:00 a.m. watch. This particular shift was Nieuwkoop's last watch in a six month tour aboard the Van Noort. Nieuwkoop, is a graduate of a Dutch maritime academy and on the night of the collision he had been sailing as a fully licensed officer for one and a half years. Nieuwkoop stood his midnight watch on the bridge with one lookout, an unlicensed twenty year old seaman named Jacob Kocklekoren.
9. Shortly after taking over as watch officer on the bridge, Nieuwkoop increased the engine's revolutions to 88 rpm's, with a resulting speed equivalent to "full ahead" or slightly less than full speed. Captain Van Loo had requested that the watch officers strive to reach San Juan by 4:00 a.m. in order to arrive ahead of the cruise ships and avoid delay. Nieuwkoop took radar bearings every half hour and plotted these on the Van Noort's marine chart. Shortly before 1:00 a.m. Nieuwkoop changed course from a northerly direction, to a westerly course across the northern coast of Puerto Rico. The Van Noort's course recorder reflects this with a change from 346 degrees to 290 degrees. The Van Noort's steering was on automatic pilot.
10. At approximately 1:30 a.m. Nieuwkoop spotted another vessel on the ship's *403 radar about 13 miles away. He subsequently confirmed this visually, sighting a white masthead light about a half a compass point or 5.5 degrees off the Van Noort's port bow. Soon Nieuwkoop was able to see the red port light of the approaching vesselthe Wishing Star.
11. Nieuwkoop watched the Wishing Star approach for about 20 minutes without noticing a significant change in her bearing. At 1:50 a.m., at a distance of about seven miles from the Wishing Star, Nieuwkoop realized that the vessels were on reciprocal or near reciprocal courses. He took evasive action by attempting to alter the Van Noort's course 10 degrees to his starboard. Nieuwkoop checked with the Van Noort's ARPA, and calculated the closest point of approach ("c.p.a.") with the Wishing Star at three cables, or 1,800 feet. Nieuwkoop considered this to be a safe distance. Nieuwkoop's intended change to starboard by 10 degrees actually resulted in only a 6 degree alteration, thereby reducing the c.p.a. with the Wishing Star to approximately 1000 feet.
12. At 1:53 a.m., as the vessels drew ever nearer, Nieuwkoop allowed his lookout Kocklekoren to leave the bridge. Nieuwkoop continued to see the Wishing Star's red port light grow more prominent while the green starboard light remained hidden. He concluded there was no danger of a head on situation and that the ships would make a safe port to port passing.
13. At approximately 1:53 a.m., Captain Gumbs left the bridge of the Wishing Star leaving Riley alone at the helm. Before leaving the bridge, Captain Gumbs testified that he checked the radar but failed to notice the Van Noort approaching fast off the Wishing Star's port bow. Without lookouts the vessels approached one another, one cognizant, the other oblivious and both unaware of the impending doom that lay ahead.
14. According to the Van Noort's marine chart, Nieuwkoop had a scheduled course change to port at 2:00 a.m. Captain Van Loo had plotted a change in course from 290 degrees to 275 degrees at a position 10 miles northeast of Cape San Juan. At 2:00 a.m. Nieuwkoop went to his radar scopes to get a fix of his position off Cape San Juan, placing the Van Noort 9.6 miles off the Cape. He then went to place this fix on the marine chart located on the table on the opposite side of the wheelhouse. The taking of the radar fix took about one minute.
15. The radar Nieuwkoop used to check the Van Noort's position relative to Cape San Juan was set on a 24 mile range, a range which he himself admitted was inappropriate to observe the Wishing Star which was then only about 3,600 feet away. Nieuwkoop testified that he continued to observe the Wishing Star on another radar screen located nearby and set to a closer range.
16. At approximately 2:03 a.m., Riley testified that he saw something dark suddenly appear in front of the Wishing Star and loom over him. Reacting instinctively to what he perceived to be immediate danger, Riley attempted to take evasive action by turning hard to port.
17. Upon returning several steps to the wheelhouse, after taking the radar fix, Nieuwkoop saw the Wishing Star inexplicably veer to her left directly into the path of the Van Noort. Nieuwkoop blew one blast of the whistle and turned the Van Noort hard to starboard, without disengaging the automatic pilot.
18. Within a minute the ships collided; the starboard bow area of the Wishing Star hit the port bow of the Van Noort. The Van Noort crushed the Wishing Star's wheelhouse causing the vessel to list and burst into flames. All aboard the Wishing Star abandoned ship and were rescued by the crew of the Van Noort.
19. The United States Coast Guard arrived on the scene and allowed the Van Noort to continue on to San Juan. The Wishing Star soon capsized, and fearing environmental damage, the Coast Guard sank her.
20. Upon the Van Noort's arrival at San Juan the Coast Guard interviewed personnel from both vessels but closed its investigation because the incident involved two *404 foreign flag ships and had occurred in international waters.[5]
II. CONCLUSIONS OF LAW
At trial, the parties presented extensive evidence including expert testimony concerning their vessels' respective courses and actions taken on the night of December 15-16. Nedlloyd, as owner of the Van Noort, contends that the sole proximate cause of the collision was the negligence and unseaworthiness of the Wishing Star, culminating in Riley's panic and sudden turn to port. Nedlloyd argues that this negligence is directly attributable to G & G, the owner of the Wishing Star. G & G suggests that Riley's action was taken in extremis and argues that the Van Noort proximately caused the collision through the negligence of her helmsman, Nieuwkoop. Alternatively, G & G requests that it be exonerated from liability, should the Court find fault with the Wishing Star. The Court begins its discussion with the issue of fault.[6]
A. The Pennsylvania Rule
Collision liability is based on fault, a concept that presupposes a common standard of appropriate conduct. G. Gilmore & C. Black, The Law Of Admiralty § 7-3 (2d ed. 1975). The parties agree that the International Regulations For Preventing Collisions At Sea, 33 U.S.C. foll. § 1602 (the "72 Colregs"), are the rules of the road to be adhered to in the instant action. Fault will be predicated upon a finding that a vessel has violated one of these Rules. The fault accorded each party must have contributed to the collision, for a vessel may escape liability if it is plain that the violations played no role in the accident. See The Pennsylvania, 86 U.S. (19 Wall.) 125, 22 L.Ed. 148 (1873). To absolve itself from liability a vessel must overcome the burden provided by the Pennsylvania Rule. This judge-made rule, derived from The Pennsylvania, is the hoary anchor of American maritime jurisprudence. It dictates that when a ship
is in actual violation of a statutory rule intended to prevent collisions, it is no more than a reasonable presumption that the fault, if not the sole cause, was at least a contributory cause of the disaster. In such a case the burden rests upon the ship of showing not merely that her fault might not have been one of the causes, or that it probably was not, but that it could not have been. Such a rule is necessary to enforce obedience to the mandate of the statute.
Id. at 135-36.
Due to its exceedingly difficult burden, the Pennsylvania Rule has been a stubborn thorn in the sides of shipowners and attorneys alike.[7] Not surprisingly, plaintiffs claim that the Pennsylvania Rule is inapplicable to the present case. Instead, plaintiffs suggest that the burden of proof with respect to violations of the 72 Colregs ought to be governed by the International Convention For The Unification Of Certain Rules With Respect To Collision Between Vessels, Brussels 1910 (the "Convention").[8] Article 6 of the Convention abolishes legal presumptions of fault, leaving courts with discretion to attribute fault as they see fit rather than following the rigid rule of the Pennsylvania.
Although the United States is not a signatory to the Convention, the Court recognizes its power to take judicial notice of foreign law. See Fed.R.Civ.P. 44.1. *405 Nevertheless, the Court finds no reason to depart from the Pennsylvania Rule in this case. The Court notes that plaintiffs have relied solely on the Ninth Circuit case of Ishizaki Kisen Co., Ltd. v. United States, 510 F.2d 875 (9th Cir.1975), in which that court ruled that an accident occurring in Japanese waters, between a Japanese vessel and an American vessel, should be governed by the Conventionto which Japan is a signatoryrather than the Pennsylvania Rule.
In discussing the Pennsylvania Rule, the Ninth Circuit concluded that neither of its purposes dictated its application to the facts before it. The primary purpose of the Pennsylvania Rule is to "enforce obedience to the mandate of the statute violated." The Pennsylvania, 86 U.S. at 135. The Ninth Circuit concluded that, while the Rule would indeed promote obedience to local Japanese Port Regulations Law, Japanese maritime law never included a rule similar to the Pennsylvania Rule and probably never would. Ishizaki, 510 F.2d at 880. The court seemed reluctant to use the Pennsylvania Rule in conjunction with Japanese law for fear of "frustrating the ends of the Japanese system by necessitating the resort to the arbitrary result that an equal division of damages provides." Id. This reasoning is wholly inapposite here since this action, occurring in international waters, involves no application of foreign law. This obviates the need for the Court to determine whether the Pennsylvania Rule is a part of the law of the place of collision. Moreover, the parties have agreed on the application of the 72 Colregs, and a rule encouraging obedience to these rules of the road is well within the interests of this forum.
A second purpose of the Pennsylvania Rule discussed by the Ninth Circuit is its simplification of the adjudication of collision cases "when applied in conjunction with a system of admiralty law, such as is presently followed by the courts of the United States, in which there is an equal division of property damages when both vessels are at fault." Ishizaki, 510 F.2d at 880. Since the parties in Ishizaki agreed that the Japanese comparative fault system would apply, this objective was nullified. Plaintiffs now employ this reasoning anachronistically, however, for the United States has abolished the much maligned divided damages rule, in favor of a rule apportioning damages according to the comparative degree of fault. United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). Despite this development, the Pennsylvania Rule has not languished; it remains a vital component of American maritime law. See Tug Ocean Prince, Inc. v. United States, 584 F.2d 1151, 1160 (2d Cir.1978). Consequently, plaintiffs' reliance on the reasoning of Ishizaki with respect to the Pennsylvania Rule's second purpose is misplaced.
Plaintiffs, continuing to adhere to Ishizaki, also argue that the Pennsylvania Rule is substantive, rather than procedural, as it is outcome determinative. See Ishizaki, 510 F.2d at 880-81. Indeed, where the burden of proof is such that it affects the decision rather than regulates conduct, the law of the forum need not be applied. See Restatement (Second) of Conflict of Laws § 134 (1971). The Court notes, however, that application of the Pennsylvania Rule is not determinative of the outcome in this case. There is ample evidence to find negligence without the aid of the Rule. Moreover, the Restatement (Second) of Conflict of Laws discourages a wooden approach to the substance/procedure dichotomy, suggesting that courts instead focus on whether the interests of the forum will be served by the application of the rule. § 122 comment b.
Assessing the interest of the forum in Ishizaki, the Ninth Circuit found that it was outweighed by the lex loci delecti, Japan. But the Ninth Circuit noted that "[u]nder circumstances other than those presently before us it may be appropriate to apply the Rule because the interests of the forum may outweigh those of the place of the accident." Ishizaki, 510 F.2d at 881. Here, the forum's policy is implicated and is not subordinated to the policies of Anguilla, the domiciliary of the Wishing Star but not the situs of the accident. While the Court would be reluctant to impose our *406 rules on the standard of care for the operation of a vessel in Anguillan waters, the collision here occurred in international waters. And while the interests of the domicile must be weighed, a ship is by nature transient, making its domicile somewhat of a legal technicality. Where an accident occurs beyond a ship's home port, refuge in the law of domicile is not automatic but must be viewed in light of countervailing interests. In light of the foregoing, the Court finds that the facts of this case, unlike Ishizaki, do not warrant a departure from the Pennsylvania Rule. With the Rule's burden in mind, the Court turns to the specific violations alleged.
B. Violations Of The Rules Of The Road
Plaintiffs claim that the Van Noort is guilty of failing to have a proper lookout, of failing to properly determine the risk of collision, of failing to take appropriate action in order to avoid a collision, of navigating at an unsafe speed, and of failing to properly signal its alteration of course to starboard. Nedlloyd alleges that the Wishing Star also failed to keep a proper lookout and failed to properly determine the risk of collision. In addition, Nedlloyd contends that the Wishing Star violated the rules of the road with respect to head-on situations.
(1) NEGLIGENCE OF THE WISHING STAR
Rule 5 of the 72 Colregs requires that every vessel "at all times maintain a proper lookout by sight and hearing ... so as to make a full appraisal of the situation and of the risk of collision." 33 U.S.C. foll. § 1602. The Supreme Court emphasized the importance of this basic rule of seamanship in The Ariadne, 80 U.S. (13 Wall.) 475, 478-79, 20 L.Ed. 542 (1861):
The duty of the lookout is of the highest importance. Upon nothing else does the safety of those concerned so much depend.... Every doubt as to the performance of the duty, and the effect of non-performance, should be resolved against the vessel sought to be inculpated until she vindicates herself by testimony conclusive to the contrary.
Captain Gumbs supervised the helmsman's steering and was supposed to serve as the Wishing Star's lookout. But Captain Gumbs left Riley, an unlicensed helmsman alone at the wheel from time to time in order to do paper work below and thus failed to maintain a constant and vigilant watch. Consequently, Captain Gumbs testified that he never visually sighted the Van Noort, although it was a clear night and the vessels were on near reciprocal courses. Although Riley had the intermittent company of Charles Bryson, the off-duty helmsman, there is no evidence that he actually substituted for Captain Gumbs. The absence of Captain Gumbs on the bridge was a direct violation of Rule 5. The Wishing Star's second mistake with respect to Rule 5 concerns Riley's competence. A proper lookout must be maintained by a competent person of suitable experience. Chamberlain v. Ward, 62 U.S. (21 How.) 548, 570, 16 L.Ed. 211 (1859). "`An inefficient lookout is equivalent to none.'" Complaint of Interstate Towing Co., 717 F.2d 752, 755 (2d Cir.1983) (citations omitted). Riley's failure to notice the huge Van Noort for over half an hour as it approached on a near reciprocal course until it was practically on top of him raises the presumption that he was inattentive at his post. See Capt'n Mark v. Sea Fever Corp., 692 F.2d 163, 167 (1st Cir. 1982); Mystic S.S. Corp. v. M/S Antonio Ferraz, 498 F.2d 538, 541 (2d Cir.1974).
The Wishing Star's attempt at rebuttal consisted of expert testimony by Paul Simpson, a marine surveyor,[9] who said that Riley might have confused the lights from the Van Noort with the background glare of the lights from St. Thomas. While the Court finds the explanation plausible, it is a mistake more akin to a blunder as it evidences an obvious lack of experience and training. At the point of *407 collision, the Wishing Star was approximately 25 miles from St. Thomas. Besides the doubt cast as to the presence of any lights on St. Thomas with that type of range, a vigilant watch would have noticed the lights of the Van Noort moving and growing more prominent, and would have realized that land was far off.[10] Riley, an unlicensed helmsman, was an inefficient lookout, and with Captain Gumbs down below, the Wishing Star was in clear violation of Rule 5 of the 72 Colregs. This violation was clearly a contributing cause of the collision.
Captain Gumbs and helmsman Riley were also negligent in failing to properly use the Wishing Star's radar, thereby increasing the chances of a collision. Rule 7 of the 72 Colregs, 33 U.S.C. § 1602, governs a determination of whether a risk of collision exists. It provides, in relevant part:
(a) Every vessel shall use all available means appropriate to the prevailing circumstances and conditions to determine if risk of collision exists. If there is any doubt such risk shall be deemed to exist.
(b) Proper use shall be made of radar equipment if fitted and operational, including long-range scanning to obtain early warning of risk of collision and radar plotting or equivalent systematic observation of detected objects.
(c) Assumptions shall not be made on the basis of scanty information, especially scanty radar information.
The Wishing Star's radar was in good operating condition and capable of locating the approaching Van Noort. Before leaving the bridge, Captain Gumbs testified that he checked visually and by radar but failed to see the Van Noort, then 7 miles away. This error in failing to properly use the radar scope, especially before leaving the watch in the hands of a helmsman ignorant in the usage of radar, is a clear violation of Rule 7(b). The Court is convinced that had Captain Gumbs used the Wishing Star's radar effectively, he would have been able to avoid the collision.
The Wishing Star's sudden turn to port directly into the path of the oncoming Van Noort was undoubtedly the cause in fact of the collision. It was also a proximate or legal cause. Rule 14(a) of the 72 Colregs states that when a risk of collision exists due to vessels approaching on reciprocal or near reciprocal courses, "each shall alter her course to starboard so that each shall pass on the port side of the other." This elemental rule is known to all seamen, seasoned and amateurs alike. Riley's failure to observe it, due to fear and panic, is unfortunate but inexcusable. Evidence conclusively shows that had Riley simply maintained his course, the collision would have been averted.[11] This direct violation of Rule 14 requires the Court to weigh it heavily in apportioning the respective degrees of fault.
Plaintiffs argue that Riley's turn to port seconds before the collision was taken in apprehension of imminent danger the avoidance of a possible grounding and therefore must be viewed as an action taken in extremis. Plaintiffs thus admit that Riley's turn to port was technically incorrect but argue that it was justified under the circumstances. The Court is not persuaded.
The in extremis doctrine provides a limited exception to the general rule of strict compliance with the rules of the road. The Supreme Court, in The Blue Jacket, 144 U.S. 371, 392, 12 S.Ct. 711, 719, 36 L.Ed. 469 (1892), stated that "where one ship has, by wrong manoeuvres, placed another ship in a position of extreme danger, that other ship will not be held to blame if she has *408 done something wrong...." The First Circuit recently invoked the doctrine and explained that the vessel seeking shelter under it must be "`free from fault until the emergency arose.'" Puerto Rico Ports Authority v. M/V Manhattan Prince, 897 F.2d 1, 6 (1st Cir.1990) (quoting Bucolo, Inc. v. S/V Jaguar, 428 F.2d 394, 396 (1st Cir.1970)); see also G. Gilmore & C. Black, supra § 7-3 ("When a vessel, through no fault of her own, is placed in a position where a collision is seemingly imminent, she will not be cast in fault for action taken in violation of the Rules.") (emphasis added). As the Wishing Star significantly contributed to the dangerous situation leading to the collision, violating several of the 72 Colregs, she cannot now avail herself of the in extremis doctrine. The conclusion that the Wishing Star proximately caused the collision[12] does not lift the Van Noort off the hook entirely. It remains for the Court to determine whether the Van Noort in any way contributed to the collision.
(2) NEGLIGENCE OF THE VAN NOORT
Plaintiffs charge that the Van Noort's helmsman, Nieuwkoop, also failed to abide by the lookout provisions of Rule 5 by allowing his lookout Kocklekoren to leave the bridge at a critical moment when Nieuwkoop must have realized that a close-quarters situation was about to develop. The Court agrees. Nedlloyd attempts to justify the Van Noort's temporary absence of a lookout by noting that Nieuwkoop had spotted the Wishing Star some 13 miles away and subsequently tracked the vessel for over half an hour until it unexpectedly turned to port. Nedlloyd argues that under these circumstances an extra man on the bridge would have served little purpose save providing Nieuwkoop with another pair of eyes.
Had Nieuwkoop been on constant and vigilant watch, Nedlloyd might be correct.[13] Failure to comply with Rule 5 may be excused where a lookout would have been a superfluous addition to the navigational crew. See The Maria Martin, 79 U.S. (12 Wall.) 31, 42, 20 L.Ed. 251 (1870); U.S. v. Soya Atlantic, 330 F.2d 732 (4th Cir.1964); Slobodna Plovidba v. King, 688 F.Supp. 1226 (W.D.Mich.1988). However, where, as here, a helmsman is busy attending to other tasks, he is not a proper lookout. Interstate Towing, 717 F.2d at 755; see also Complaint of Flota Mercante Grancolombiana, S.A., 440 F.Supp. 704 (D.C.N.Y. 1977) (lookouts must have no other duties to perform). According to the marine chart presented at trial, when the ships were at a distance of approximately 3,600 feet from one another and approaching at a combined speed of 300 feet every 10 seconds,[14] Nieuwkoop was involved with the taking of a radar fix off of Cape San Juan, which he then placed on the marine chart located on the table at the opposite side of the wheelhouse.
To argue that the preoccupation was merely a momentary distraction blurs the mandate of the lookout provision. The man at the wheel is not a proper lookout, for he has the task of navigating as his primary concern. See Tug Ocean Prince, 584 F.2d at 1159; The Metamora, 144 F. 936 (1st Cir.1906) see also The Corozal, 62 F.Supp. 123 (D.C.N.Y.1945). This is especially true where the navigator is entering a close-quarters situation. It is at this crucial moment that an extra pair of eyes might spot the sudden and the unexpected and perhaps shave a few valuable seconds off of the vessel's response time. The Court is mindful of not becoming a Monday *409 morning admiral. Nevertheless, knowing that a close-quarters situation was developing in the dark of night, Nieuwkoop should not have allowed his lookout to leave the bridge. This was a clear violation of Rule 5 of the 72 Colregs and Nedlloyd has failed to overcome its burden of showing that the absence of a lookout did not contribute to the collision.
Nieuwkoop also failed to use the Van Noort's sophisticated radar and ARPA to plot the relative course and speed of the Wishing Star, in violation of Rule 7(b). See Hellenic Lines, Ltd. v. Prudential Lines, Inc., 730 F.2d 159, 163 (4th Cir.1984). Nieuwkoop also failed to adhere to the strictures of Rule 7(d). That section provides:
(d) In determining if risk of collision exists the following considerations shall be among those taken into account:
(i) Such risk shall be deemed to exist if the compass bearing of an approaching vessel does not appreciably change;
(ii) Such risk may sometimes exist even when an appreciable bearing change is evident, particularly when approaching a very large vessel or a tow or when approaching a vessel at close range.
Nieuwkoop admitted that the Wishing Star's bearings were relatively constant a clear sign of risk under Rule 7(d)(i). Even if the Court credits the testimony of Nedlloyd's expert, John Deck,[15] to the effect that the bearing of the Wishing Star was changing relative to the Van Noort, the vessels here were approaching at close range, invoking Rule 7(d)(ii). Indeed, Deck testified that using the ARPA was "elemental" in determining the risk of collision. "`A vessel equipped with radar is under a duty to use it intelligently and fully, and the master or pilot who fails to do so is heavily burdened to prove that such fault did not contribute to the collision.'" Complaint of Potomac Transport Inc., 741 F.Supp. 395, 406 (S.D.N.Y.1989), aff'd in part, vacated in part, 909 F.2d 42 (2d Cir.1990) (citations omitted).
Nieuwkoop testified that he continuously observed the Wishing Star, and utilized the Van Noort's ARPA to determine the c.p.a., but this is no substitute for careful mechanical plotting of the Wishing Star's position. "Even continuous observation by a competent person is unlikely to be accepted as proper use of radar to obtain early warning of risk of collision." A. Cockroft & J. Lameijer, A Guide to the Collision Avoidance Rules, at 56 (2d ed. 1976).[16] Any calculations not intended to ascertain the course, speed and relative motion of an approaching vessel is not the "equivalent"within the meaning of Rule 7(b)of a system that does. Hellenic Lines, 730 F.2d at 163. Nieuwkoop also admitted that he did not activate the ARPA's anti-collision devices which included audio and visual alarms that might have provided early warning of risk of collision. The Court is not convinced that the failure to fully and properly use the sophisticated radar on board the Van Noort had no bearing whatsoever on the collision.
Plaintiffs also claim that the Van Noort did not take appropriate action in order to avoid the collision. Rule 8 of the 72 Colregs requires that a vessel respond to the risk of collision, where circumstances permit, "in ample time and with due regard to the observance of good seamanship." Rule 8(a), 33 U.S.C. foll. § 1602. The rule further states that an alteration of course "be large enough to be readily apparent to another vessel observing visually or by radar; a succession of small alterations of course ... should be avoided." Rule 8(b). An alteration of course is perhaps the most effective antidote to a close-quarters situation "provided that it is made in good time, is substantial and does not result in another close-quarters situation. Rule 8(c). Whatever a vessel's response, Rule 8 warns that action taken to avoid a collision must "result in passing at a safe distance." Rule 8(d). *410 Rule 8 also provides that, "[i]f necessary to avoid a collision ... a vessel shall slacken her speed...." Rule 8(e).
The Court agrees with plaintiffs' allegation that the Van Noort violated every provision of Rule 8. After observing the Wishing Star off the Van Noort's port bow for over twenty minutes, and concluding that she was keeping a steady course and that evasive action was necessary in order to avoid a close-quarters situation, Nieuwkoop opened up a birth of what he thought to be 10 degrees to starboard. Satisfied that his c.p.a. would be 0.3 miles or 1800 feet, Nieuwkoop believed the situation to be under control. Had Nieuwkoop accurately maneuvered the Van Noort 10 degrees, his actions might still be regarded as imprudent. Due to navigational error, however, Nieuwkoop actually steered the Van Noort only 6 degrees starboard, amounting to a c.p.a. of approximately 1000 feet.
What constitutes a close-quarters situation is not defined in the 72 Colregs and must be determined on a case by case basis depending on the location of the vessels and the maneuverability space. The slim passage envisioned by Nieuwkoop, less than twice the length of the Van Noort, attempted at night without any indication that the approaching Wishing Star had sighted the Van Noort, is particularly brazen. In light of Captain Van Loo's standing orders considering one mile to be safe passage, and the sufficient sea room to the Van Noort's starboard side, a c.p.a. of 1000 feet is not substantial within the meaning of Rule 8(b) and 8(c).
Moreover, at no time during the intended passage did Nieuwkoop slacken the Van Noort's speed, a violation of Rule 8(e).[17] It appears that Nieuwkoop was preoccupied with the upcoming 2:00 a.m. course change of 15 degrees to port, and that the Van Noort's scheduled course change was hampered by the Wishing Star which continued approaching the Van Noort steady off her port bow. Perhaps not wanting to veer too far off course to starboard, Nieuwkoop may have been overly frugal in his calculations. Whatever the cause, Nieuwkoop should have focused solely on the Van Noort's approach until the Wishing Star was safely past and clear. Not doing so was a clear violation of Rule 8(d).
Although Nieuwkoop unwittingly created a close-quarters situation rather than avoiding one, Nedlloyd argues that there was nothing imprudent about Nieuwkoop's actions because the Van Noort was obligated to proceed on the basis that the Wishing Star would maintain her course. See The Victory, 168 U.S. 410, 18 S.Ct. 149, 42 L.Ed. 519 (1897). While the Van Noort was under no obligation to forecast the Wishing Star's sudden turn to port, this by no means excuses her from following the dictates of the rules of the road with respect to safe passage. Were vessels equipped with prescient radar devices, a helmsman could indeed calculate his maneuver to avoid a collision by a hair. But it is precisely because vessels cannot be counted on to expect the unexpected that the 72 Colregs mandate adherence to defensive strictures pertaining to early warning and substantial alteration of course to avoid collision. The Van Noort's errors are thus directly contrary to the dictates of Rule 8 and Nedlloyd has not been able to sustain its burden of showing that these errors could not have contributed to the collision.
When vessels are in sight of one another, and when the rules of the road require one of them to alter her course, Rule 34(a) of the 72 Colregs, 33 U.S.C. § 1602, states that "one short blast" shall indicate an alteration to starboard. Although the Van Noort emitted one blast when she turned hard to starboard immediately prior to the collision, plaintiffs seize on her failure to signal her starboard alteration about fifteen minutes earlier as a violation of Rule 34(a). It is doubtful, and *411 plaintiffs have failed to show otherwise, that the rules require a signal to be given at 7 miles. Under Annex III, 33 U.S.C. foll. § 1602, the Rules discuss the audibility and range of whistles depending on the length of the vessel. For a vessel the size of the Van Noortthe largest category the range is only expected to be 2 nautical miles. Thus, the failure to signal could not have been a factor in the collision.
The Van Noort, however, should have attempted to contact the Wishing Star on VHF radio. Especially in light of the intended close port to port passage, communication with the Wishing Star might have alerted the Wishing Star of the Van Noort's position in time to take evasive action. This error invokes Rule 2 of the 72 Colregs, 33 U.S.C. § 1602, which requires a vessel to take "any precaution which may be required by the ordinary practice of good seamen, or by the special circumstances of the case." It is certainly prudent seamanship to attempt radio contact with an approaching vessel on a reciprocal course, especially where there is no indication that the approaching vessel is aware of the circumstances.[18] Nieuwkoop should have done everything possible to warn the Wishing Star of the Van Noort's intentions, including communication by VHF radio. Nedlloyd has failed to demonstrate that the Van Noort's failure to communicate with the Wishing Star by VHF radio in no way contributed to the collision.
C. Limitation Of Liability
G & G, as corporate owner of the Wishing Star, has petitioned the Court for limitation of liability pursuant to The Limitation of Vessel Owner's Liability Act (the "Act"), 46 U.S.C. § 181 et seq. Section 183(a) of the Act allows a vessel owner to limit its liability "for any loss, damage or injury by collision ... incurred without the privity or knowledge of such owner" to the value of the vessel, which in this case is zero. In a limitation proceeding the initial burden is on the claimants to show that petitioner's vessel was unseaworthy[19] or negligent and that this unseaworthiness or negligence led to the collision. Complaint of Armatur, 710 F.Supp. 390, 397 (D.P.R. 1988). The burden then shifts to the owner to prove the absence of privity or knowledge of the acts of negligence or unseaworthiness. Coryell v. Phipps, 317 U.S. 406, 409, 63 S.Ct. 291, 292, 87 L.Ed. 363 (1943). The Court need not tarry long on the threshold question of causation. The foregoing discussion on fault has established that the negligence on board the Wishing Star was a proximate cause of the collision. The Court turns to the issue of privity.
Privity and knowledge are imputed to the owner if the owner "`knew or should have known that a certain [unseaworthy] condition existed.'" Potomac Transport, 741 F.Supp. at 407 (quoting Hellenic Lines, 730 F.2d at 166). When the vessel is owned by a corporation, the privity and knowledge of an officer, managing agent, or supervisory employee suffices. Id. The owner of a vessel has a duty to provide her with a competent, well-trained crew, Armatur, 710 F.Supp. at 398, and privity will exist if the owner fails to train the crew or fails to make appropriate inquiries as to the crew's competence. In re Ocean Foods Boat Co., 692 F.Supp. 1253, 1259 (D.Or.1988). Where, however, the negligence results from instantaneous navigational errors, such errors are generally not attributable to the owner, for the owner is not required to make the ship "failsafe." Armatur, 710 F.Supp. at 398. In this case the Court finds that G & G has not overcome its burden of proving a lack of privity and knowledge.
*412 Captain Gumbs is both the president of G & G and, with 51% interest, its principal shareholder. Although he left much of the financial handling of the corporation to his on shore partner Alan Gumbs, Captain Gumbs had the requisite authority and power to bind the corporation and is thus an owner under the meaning of the Act. See Petition of Kinsman Transit Co., 338 F.2d 708 (2d Cir.1964), cert. denied, 380 U.S. 944, 85 S.Ct. 1026, 13 L.Ed.2d 963 (1965). Captain Gumbs, the Wishing Star's owner, was also Captain Gumbs the Wishing Star's master. Limitation of liability is meant to accord protection to "`the physically remote owner who, after the ship breaks ground, has no effective control over his waterborne servants.'" Armatur, 710 F.Supp. at 398 (quoting Tittle v. Aldacosta, 544 F.2d 752, 756 (5th Cir.1977)). And, as this Court stated recently, "the duty to control increases proportionally with the possibility of control." Armatur, 710 F.Supp. at 399.
In this case Captain Gumbs was hardly physically remote; he lived on board the Wishing Star. He also hired and supervised the Wishing Star's crew, thereby exerting control over them. Yet Captain Gumbs never asked Riley whether he was licensed or whether he knew how to use the Wishing Star's radar. Instead, he allowed Riley, an unlicensed helmsman with no working knowledge of equipment as vital as radar or a gyro compass, to take the wheel without constant supervision. The Court also questions the prudence of allowing Riley to take the helm for the 12:00 a.m.4:00 a.m. watcha shift known as the "dog-watch"on only two hours sleep. Consequently, the Court finds that Riley's sudden turn to port was not the result of an instantaneous navigational error; rather it was a consequence of incompetence immanent in the Wishing Star before she ever left port. This unseaworthiness is directly attributable to Captain Gumbs.
The import of Captain Gumbs privity with Riley's negligence is lessened by the fact that Captain Gumbs himself was largely responsible for creating the conditions that contributed to the collision. He failed to keep a constant and vigilant lookout and he failed to properly use his radar which would have detected the approaching Van Noort. And, although Captain Gumbs holds a Master's License from Anguilla and Honduras, he admitted that he had no formal training in navigation. Alas, it is poignant that the Wishing Star's own expert witness, Paul Simpson, stated that he would hire neither Captain Gumbs nor Patrick Riley to man his vessel. Accordingly, the petition for limitation of liability is denied.
CONCLUSION
The primary responsibility for the collision rests with the Wishing Star, but the Van Noort was not entirely faultless. The Court thus apportions 80% of the negligence to the Wishing Star and 20% of the negligence to the Van Noort. Having denied G & G's petition for liability, the cargo claimants are entitled to recover the following:[20] Lausell Aluminum Jalousies, Inc. (by its insurer General Accident Insurance Company of Puerto Rico), $21,018.69$16,814.95 from G & G and $4,203.74 from Nedlloyd; William H. McGee and Co., Inc., $5,104.00$4,083.20 from G & G and $1,020.80 from Nedlloyd; A. Suarez & Co., Inc., $37,138.60$29,710.88 from G & G and $7,427.72 from Nedlloyd; and Victor M. Rincon, $26,570.00$21,256.00 from G & G and $5,314.00 from Nedlloyd. Nedlloyd, also a claimant in the limitation action, may recover for damages to the Van Noort's hull in the amount of $27,600.00 from G & G.[21] Furthermore, in Civil No. 89-1669, Alan Gumbs and Captain Carlos Gumbs shall recover a total of $2,000 from Nedlloyd[22] for the loss of personal property, *413 and in Civil No. 89-1266, I.L.U. shall recover $79,645.37 from Nedlloyd for the loss of the Wishing Star.[23] Judgment shall be entered accordingly.
IT IS SO ORDERED.
NOTES
[1] Lewis Carroll, The Hunting of the Snark, Fit. 2, "The Bellman's Speech."
[2] I.L.U., suing by way of subrogation, represents a group of insurance companies proceeding collectively. In this action various parties who appeared as cargo claimants in the limitation proceeding have intervened as plaintiffs.
[3] Alan Gumbs has filed a claim for the loss of personal cargo; Carlos Gumbs seeks to recover the loss of personal property.
[4] That the collision occurred in international waters between two foreign flagships is no bar to this Court's jurisdiction. A collision on the high seas between vessels of different nationalities is a proper subject of inquiry in any court of admiralty which first obtains jurisdiction. "The Belgenland", 114 U.S. 355, 362-63, 5 S.Ct. 860, 863, 29 L.Ed. 152 (1885). The Court first obtained jurisdiction over the limitation action filed by petitioner G & G, on May 22, 1989, and subsequently exercised jurisdiction over the remaining claims. Notwithstanding Nedlloyd's initial allegations as to this Court's lack of jurisdiction, it nonetheless submitted voluntarily to the jurisdiction of the Court and presented its claim for the Van Noort's hull damages in the limitation action and put forth its defense in the remaining consolidated actions at trial.
[5] The United States Coast Guard report of the accident was admitted into evidence, pursuant to Fed.R.Ev. 803(8). The Court minimally considered the fact based portions of the report but arrived at its own finding of facts independently and by reference to all the evidence submitted. None of the report's conclusions were relied upon.
[6] I.L.U., William H. McGee and Co., Alan and Carlos Gumbs and all other parties who intervened seeking recovery from Nedlloyd, the owner of the Van Noort, are collectively referred to herein as "plaintiffs" or the "Wishing Star".
[7] G. Gilmore and C. Black regard the rule as a "drastic and unusual presumption." The Law of Admiralty, § 7-5 (2d ed. 1975).
[8] For the complete text of the Convention, see 6 Benedict, Admiralty 3-7 (6th ed. 1941). The Netherlands and Anguilla are both signatories to the Convention.
[9] Paul Simpson is a marine surveyor and a graduate of the Massachusetts Maritime Academy. He holds an unlimited master's license enabling him to pilot any size ocean going vessel.
[10] This is not a case where the failure to notice an approaching vessel is mitigated by that vessel's absence of running lights. See Capt'n Mark v. Sea Fever Corp., 692 F.2d at 167.
[11] A curious development at trial, perhaps of only anecdotal value here, was Nedlloyd's line of questioning about Riley's automobile driving habits. In St. Kitts, Riley's home, the public drives on the left side of the road. Apparently, Nedlloyd wanted to draw the inference that Riley instinctively turned to port, for when facing a head on situation on the road, one generally turns to the side rather than into oncoming traffic. For Riley, this would be to the left or to port.
[12] Without entering the definition bog of "proximate cause", the Court simply notes that the term refers to the failure to protect another where a duty to protect exists. Thus there can be more than one proximate cause of an accident. See e.g. Puerto Rico Ports Authority v. M/V Manhattan Prince, 897 F.2d 1, 5-6 (1st Cir.1990) (liability apportioned between pilot and vessel as both proximately caused the allision).
[13] Nedlloyd, in its proposed findings of fact, suggests that the "adequacy of a lookout must be evaluated realistically in light of all the circumstances." Capt'n Mark v. Sea Fever Corp., 692 F.2d 163, 166-67 (1st Cir.1982). This maxim is generally reserved for situations involving smaller boats with a limited crew.
[14] At this speed, the vessels were scarcely two minutes apart.
[15] John Deck is a marine consultant and a naval architect with a degree in naval engineering and a master's degree in mechanical engineering, both from the Massachusetts Institute of Technology.
[16] The authors assisted in the drafting of the 72 Colregs. See Hellenic Lines, 730 F.2d at 163.
[17] Nieuwkoop, upon taking over as watch officer of the Van Noort, increased the engine's revolutions to 88 revolutions per minute or 16.5 knots. Full speed ahead is generally recognized to be over 100 revolutions per minute or 18 knots. The Van Noort was thus going "full ahead" or slightly shy of "full speed."
[18] Unlike the scenario that developed in Manhattan Prince, supra, 897 F.2d at 5, where a virtual Tower of Babel created "a prescription for an accident," no language barrier existed here; both helmsman were fluent in English.
[19] Seaworthiness is a variable concept that depends on the type of vessel and the nature of the voyage. Tug Ocean Prince, 584 F.2d at 1155. It is commonly understood, however, that the vessel must be well equipped, properly manned by a competent captain and crew and fit for her voyage. The Niagara v. Cordes, 62 U.S. (21 How.) 7, 16 L.Ed. 41 (1859); The Armatur, 710 F.Supp. at 398.
[20] The parties stipulated, prior to trial, to the total monetary damages suffered by the cargo claimants.
[21] This amount is 80% of the total damage to the Van Noort's hull (including loss of the vessel during repairs) or $34,500.00.
[22] Although Alan Gumbs and Captain Carlos Gumbs alleged a loss of $100,000.00 for personal effects on board the Wishing Star, the Court finds, based on the scant evidence presented, that the total loss to the Gumbs is $10,000.00 20% of which is to be paid by Nedlloyd.
[23] This figure is 20% of $398,226.84the total amount paid by the insurance company for the loss of the Wishing Star's hull. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557612/ | 22 So.3d 659 (2009)
818 ASSET MANAGEMENT, INC., Appellant,
v.
Judy NEIMAN, Appellee.
No. 3D08-97.
District Court of Appeal of Florida, Third District.
October 28, 2009.
Rehearing Denied December 8, 2009.
Arthur J. Morburger, Miami, for appellant.
Michael Seth Cohen, Coral Gables, for appellee.
Before WELLS and SHEPHERD, JJ., and SCHWARTZ, Senior Judge.
PER CURIAM.
Affirmed.
WELLS, J., and SCHWARTZ, Senior Judge, concur.
WELLS, J., (specially concurring).
I concur in the affirmance of the trial court's order denying 818 Asset Management, LLC's Rule 1.540 motion to set aside a default judgment. I find no merit to the company's claim that it had not been properly served with process, and thus conclude that no abuse of discretion has been demonstrated. See H & F Tires, L.P. v. D. Gladis Co., Inc. 981 So.2d 647, 649 (Fla. 4th DCA 2008) ("[T]he standard of review for an order denying a motion to vacate a default judgment is abuse of discretion." (quoting Top Dollar Pawn Too, Inc. v. King, 861 So.2d 1264, 1265 (Fla. 4th DCA 2003))).
818 is a limited liability company which pursuant to section 608.463, Florida Statutes (2007), may be served with process "[i]n accordance with chapter 48 or 49, as if [it] were a partnership." Section 48.061(2), Florida Statutes (2007), governing service of process on partnerships provides that where "service cannot be made on [a partnership] agent because of failure to maintain such an agent or because the agent cannot be found or served with the exercise of reasonable diligence, service of process may be effected by service upon the Secretary of State as agent of the limited partnership as provided for in s. 48.181."
The undisputed facts pertinent to this appeal are as follows. In 2004, Judith Neiman sold her condominium to 818, taking back a promissory note in the amount of $115,000 secured by a mortgage on the condominium. 818 defaulted on the note in 2006 by failing to make monthly payments, by failing to pay condominium association assessments, and by failing to pay real property taxes, a failure which resulted in issuance of tax certificates for 2004 and 2005.
In February 2007, Neiman sent notices of default to 818 by certified return receipt *660 mail to both the condominium unit purchased by 818 and the address 818 listed with the Secretary of State as the address of its registered agent. Both notices were returned as undeliverable. The following month, Neiman brought suit to collect on the note and to foreclose the securing mortgage.
In April, Neiman attempted to personally serve Esther Counné, 818's registered agent and sole manager, with a summons and complaint at the address 818 had listed with the Secretary of State as that of its registered agent. Service could not be affected because 818's registered agent was no longer at the listed address and because no other address had been provided to the Secretary of State. Neiman also attempted to serve Counné at the condominium unit, the condominium at which Counné claimed in her 1.540 motion she resided at all material times.
Unable to locate 818's agent at either its registered address or the residence of its sole manager and agent, Neiman served the Secretary of State under the provisions of section 48.181, which accepted service on 818's behalf. Neiman once again attempted to provide notice to 818 by certified return receipt mail at both 818's registered agent office and the condominium where Counné lived. Again, both mailings were returned as undeliverable.
On this record it is clear that Neiman satisfied all section 608.463 and 49.061 requirements. Counné claims, however, that because (1) Neiman knew that Counné lived in the condominium that is the subject of this suit; (2) Counné had made and Neiman had accepted two mortgage payments after this suit was brought; and (3) before and after the instant action was brought, Neiman and Counné were in "regular" telephone contact, that service on her via the Secretary of State was defective:
4. The parties, Ms. Neiman and Ms. Counné, were in regular, if not frequent, telephone contact with each other both before and after the initiation of this action.
5. From the date of the giving of the mortgage through the present date, Ms. Neiman always knew that Ms. Counné occupied the subject premises as her full time residence.
. . . .
8. Specifically, this action was commenced on March 30, 2007; thereafter, Ms. Counné paid, and Ms. Neiman accepted, payments [on April 6 and June 6, 2007].
. . . .
16. Florida Statute 48.181 only permits service of process upon the Secretary of State as agent for "any person who is a resident of the state and who subsequently becomes a nonresident of the state or conceals . . . her whereabouts. . . .". [sic]
Counné concedes that section 48.181, Florida Statutes (2007), provides that any person doing business in this state as a partner agrees to service of process on the Secretary of State if that person is concealing his or her whereabouts:
. . . [A]ny person . . . who is a resident of the state and who . . . conceals his or her whereabouts . . . [and who accepts] the privilege . . . to operate, conduct, engage in, or carry on a business . . . constitutes an appointment . . . of the Secretary of State . . . as their agent on whom all process in any action . . . arising out of any transaction or operation connected with or incidental to the business or business venture may be served. . . .
Counné argues however that a factual dispute remains as to whether she concealed her whereabouts. I disagree. Of *661 course Neiman knew that Counné lived at the condominium at issue, Neiman attempted to serve her there multiple timesall without successover a period of many months. The fact that Counné made some payments to Neiman during this period and spoke to Neiman one time while Counné was in Canada, as Counné asserted, also does nothing to establish that Counné was not concealing herself. Payments do not establish whereabouts, and while Counné may have spoken to Neiman at some point while she was in Canada from May through September of 2007, Counné does not claim that Neiman initiated the call or had any knowledge as to where and how to contact her. Counné also does not state that she ever told Neiman where in Canada, with its territory of approximately 3.8 million miles,[1] she could be located.
Moreover, the record is that from February through September of 2007, a period spanning eight months, Counné, the sole registered agent and manager of this partnership, did not claim her mail while at home and made no arrangements whatsoever to either have it forwarded or to otherwise obtain it. In short, Counné's motion fails to raise a fact issue regarding concealment.
I certainly see no similarities between the facts of this case and those in All Mobile Video, Inc. v. Whitener, 773 So.2d 587 (Fla. 1st DCA 2000). In that case, the plaintiff had successfully initiated contact with the defendant and had received a written response from the defendant advising that the defendant was represented by counsel. These contacts confirm that the plaintiff knew how and where to locate the defendant to either obtain information about services of process or to effectuate it. The plaintiff also had spoken to a number of defendant's employees and had been in contact with the defendant's insurance company. Yet despite all of these frequent contacts, and knowledge as to where the defendant could be found, the plaintiff secured a default after she was unable to locate the defendant's registered agent, apparently a defunct law firm. On these facts, the default secured by the plaintiff was reversed.
Nothing similar was alleged under oath to have happened here. Rather, Counné's insupportable conclusion that she could always be located at the condominium where she lived whenever she was here combined with her vague claim that she had talked once with Neiman while in Canada and had made a couple of mortgage payments does not give rise to a dispute that would entitle her to relief from the instant judgment.
Accordingly, and because I find no merit in 818's remaining argument, I join in the decision to affirm the order denying 818's 1.540 motion.
SHEPHERD, J., dissenting.
I respectfully dissent.
This is an appeal from an order denying Appellant's, 818 Asset Management, LLC, Sworn Motion to Set Aside Default and Final Judgment of Foreclosure. Appellee, Judy Neiman, was the purchase money mortgagee on the sale of the foreclosed property, a condominium unit located in Miami Beach, to 818 in March 2004. Neiman alleged in her foreclosure complaint that 818 had defaulted under the terms of the mortgage, by failing to make the required monthly mortgage payments.
Unable to serve 818 either at the location of its purported resident agent or the *662 condominium unit,[2] Neiman sought to serve the company by substituted service of process, pursuant to section 48.181(1) of the Florida Statutes (2007), alleging that "[818] ha[d] concealed its whereabouts while engaging in or carrying on a business venture within the State of Florida." 818's sole principal and managing member, Esther Counné, countered in 818's sworn motion that Neiman at all times knew of her whereabouts, including the critical period during which the substituted service was made and the required statutory notice was mailed to her. See § 48.161(1), Fla. Stat. (2007). Because this sworn testimony is unrebutted by Nieman, I believe we legally are compelled to reverse the order appealed and remand with directions to vacate the final judgment of foreclosure.[3]
818 is a limited liability company, created pursuant to the Florida Limited Liability Company Act. See §§ 608.401-.705, Fla. Stat. (2007). Florida limited liability companies are required by law to "have and continuously maintain in this state: (a) `A registered office' and `(b) A registered agent.'" § 608.415(1)(a)-(b) Fla. Stat. (2007). Florida limited liability companies also must report and keep current the address of the registered office and name of the registered agent in the records of the Florida Secretary of State. § 608.416, Fla. Stat. (2007). A breach of this obligation by a Florida limited liability company constitutes the appointment of the Secretary of State as the company's substituted agent for service of process. See § 48.181(1); All Mobile Video, Inc. v. Whitener, 773 So.2d 587, 589 (Fla. 1st DCA 2000). In this case, Neiman's attempt to serve process on 818 at the address recorded with Florida's Secretary of State was returned unexecuted because, according to the return of service, "[neither the] corporation [n]or registered agent are [] located at [this] address." As a matter of law, then, 818 designated the Florida Secretary of State as its resident agent for the service of process. See § 48.181(1).
In such a case, a plaintiff can elect to effectuate service on the Florida Secretary of State by (1) serving the public officer designated by law; (2) sending notice of service and a copy of the process by registered or certified mail to the defendant; and (3) filing the defendant's return receipt and an affidavit of compliance. See § 48.161(1), Fla. Stat. (2007); All Mobile Video, 773 So.2d at 589. Neiman satisfied the first pre-requisite for proper service by serving the Florida Secretary of State. She attempted to satisfy the second pre-requisite by mailing a copy of the notice of service and the process by certified mail to Counné at the registered office address where attempted service of process already had been unsuccessful, and also the condominium unit in foreclosure.[4] However, *663 taking as trueas we mustthe averments in Counné's Sworn Motion to Set Aside Default and Final Judgment of Foreclosure, that she had "regular, if not frequent, telephone contact [with Neiman] both before and after the initiation of this action," and that "she continued making mortgage payments after the initiation of the foreclosure action and Ms. Neiman accepted such payments," allegedly including two payments during the period her counsel was effectuating service on 818, Neiman's failure to follow an obvious lead to Counné's whereaboutsasking Counné herselfrenders the attempted service invalid.
The facts of this case closely mirror All Mobile Video. In All Mobile Video, as in the case before us, the plaintiff sought to effectuate substituted service of process on All Mobile Video pursuant to sections 48.181(1) and 48.161(1) of the Florida Statutes (1999). Id. at 588. As in our case, the corporate defendant was without a locatable registered agent in Florida. Id. However, the plaintiff, her counsel, and her insurance carrier were all in contact with representatives of the defendant's New York office. Id. However, when it came time to satisfy prong two of section 48.161(1), the plaintiff chose to send the required notice of service and the process to the address of a long since defunct, former law firm designated as All Mobile Video's resident agent in the State of New York, rather than to the company's current office. Id. at 588-89. All Mobile Video learned of the default taken against them after the plaintiff so advised All Mobile Video's insurance company. Id. at 589. The First District Court of Appeal reversed the order of default, stating defendant's failure to accurately register the business's listing with the New York Department of State did not excuse the plaintiff from his burden "to use knowledge at [his] command and exercise due diligence in attempting to notify [the defendant] of the suit." Id. at 590. The court explained that "to comply with section 48.161, plaintiffs who seek to employ substituted service but fail to obtain a return receipt must allege that the defendant is `concealing his whereabouts, or that they had exercised due diligence in attempting to locate him.'" Id. (quoting Chapman v. Sheffield, 750 So.2d 140, 143 (Fla. 1st DCA 2000)). Plaintiffs also must "reasonably employ knowledge at [their] command so that, if possible, the defendant will have notice of the suit." All Mobile Video, 773 So.2d at 589 (citing McAlice v. Kirsch, 368 So.2d 401, 403 (Fla. 3d DCA 1979) ("When a complainant resorts to constructive service, he should make an honest and conscientious effort, reasonably appropriate to the circumstances, to acquire the information necessary to fully comply with the controlling statutes.")).[5]
*664 In the case before us, Counné attested in her sworn motion that she was in "regular, if not frequent, telephone contact" with Neiman during the time Neiman was effectuating substituted service process on Counné via section 48.161(1) of the Florida Statutes. That testimony is unrebutted. It also is clear from the record that Neiman knew or should have known that Counné was the managing member of 818. At no time during this period did Neiman seek to obtain from Counné her current address (or, if it be the case, why it was not possible to do so). Counné's failure to accurately register 818's resident office and agent with the Florida Secretary of State did not excuse Neiman from her obligation to use the knowledge at her command to see that 818 received actual notice of the action. For this reason, I would reverse the order denying 818's Sworn Motion to Set Aside Default and Final Judgment of Foreclosure.
NOTES
[1] Bruce Pardy, Climate Change Charades: False Environmental Pretences of Statist Energy Governance, 26 Windsor Rev. Legal & Soc. Issues 179, 204 n. 37 (2009).
[2] The concurrence contends Neiman "attempted to serve Counné [at the condominium] multiple times . . . over a period of many months." See supra p. 661. That is not so. Neiman made but a single attempt to effectuate service on Counné at that locationon April 26, 2007. The return states: "Unit 3D Unable to make contact with anyone at address." The only other attempt at personal service on Counné was the unsuccessful attempt to serve the resident agent, also on the same date, immediately before proceeding to Counné's home. On this meager effort, Neiman abandoned personal service and, instead, proceeded to substitute service.
[3] Neiman was the purchaser at the judicial sale. Thus, there is no concern over a purchase by an innocent third-party purchaser of the property in this case. Cf. De Vico v. Chase Manhattan Bank, 823 So.2d 175, 175-76 (Fla. 3d DCA 2002).
[4] It appears this certified mailing, which occurred on May 29, 2007, and one other Neiman's certified mailing of a demand letter on February 9, 2007, forms the entire basis for the concurrence's sweeping conclusion at page five that for "a period spanning eight months, Counné [from February through September, 2007] . . . did not claim her mail while at home and made no arrangements whatsoever to either have it forwarded or to otherwise obtain it."
[5] Other cases from this district express the same sentiment or apply the same principle. See, e.g., Hanna v. Millbyer, 570 So.2d 1087, 1087 (Fla. 3d DCA 1990) (reversing order denying a motion to quash substituted service of process on the basis the plaintiffs presented insufficient evidence to establish due diligence of existence of concealment); Torelli v. Travelers Indem. Co., 495 So.2d 837, 838 (Fla. 3d DCA 1986) (reversing an order denying a motion to set aside a default final judgment where the injured plaintiff failed to make inquiry of the defendant's known attorney); Leviten v. Gaunt, 360 So.2d 112, 113 (Fla. 3d DCA 1978) (reversing order denying motion to quash service of process where the plaintiff who alleged the defendant "concealed her whereabouts" failed to pursue two individuals whose names and addresses were provided to the plaintiff by the defendant's parents); Bird v. Int'l Graphics, Inc., 362 So.2d 316, 317 (Fla. 3d DCA 1978) (reversing denial of motion to vacate default judgment on the basis the failure of the sheriff and a process service to locate the defendant at three different addresses furnished by the plaintiff was not enough to establish concealment); Fleischman v. Morris, 260 So.2d 278, 279 (Fla. 3d DCA 1972) (reversing order denying motion to vacate default and final judgment where affidavit and record reflected sufficient search and inquiry was not made to ascertain whether appellants were concealing their whereabouts). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1903306/ | 257 B.R. 344 (2001)
In the Matter of John Q. SMITH[1], Debtor.
No. 00-00000-JAC-13.
United States Bankruptcy Court, N.D. Alabama, Northern Division.
January 17, 2001.
*345 MEMORANDUM OPINION
JACK CADDELL, Bankruptcy Judge.
By order entered September 26, 2000, the Court required debtor and debtor's counsel to show cause why the filing of debtor's petition did not violate Bankruptcy Rule 9011(b) as having been filed for an improper purpose and why the filing was not an abuse of process under Title 11, § 105(a).[2] The order set forth the standards *346 for imposing sanctions and the Court's concerns as to whether sanctions should be imposed for what appeared to be flagrant misconduct. The order provided notice to debtor's counsel that possible sanctions included: (1) directives of a nonmonetary nature including the suspension of the practice of law before the Bankruptcy Court for the Northern District of Alabama, Northern Division for a period of up to 60 months; (2) an order to pay a penalty into court; or (3) an order directing payment to the injured parties of some or all of the reasonable attorney's fees and other expenses incurred as a direct result of any violations. On the date set for hearing, the Court approved a settlement agreement pursuant to which debtor's counsel was required to immediately refund to the estate attorney's fees in the amount of $2,800.00 which he had received and to pay as sanctions $10,000.00 to the estate for distribution to creditors. It was further agreed that the Chapter 13 estate would remain open for the trustee to pursue certain avoidance actions.
I FINDINGS OF FACT
On May 3, 2000, SunTrust Bank (hereinafter "the bank") filed a complaint against the debtor in the Circuit Court of Lauderdale County, Alabama seeking damages in the amount of $54,150.89 on two unsecured promissory notes. The bank filed a motion for summary judgment in the state court action and the same was set on August 15, 2000. The debtor did not file any response to the motion for summary judgment, but on August 14, 2000, filed for relief under Chapter 13 of the Bankruptcy Code. The automatic stay under § 362 was immediately entered and the state court action was stayed. The hearing on the motion for summary judgment was continued generally.
Four days after the Chapter 13 petition was filed, the debtor filed a "Notice of Dismissal" of the case under Title 11, § 1307(b). The Court, pursuant to Bankruptcy Rule 1017(f)(2), set the "Notice of Dismissal" for hearing on September 28, 2000.
Prior to the hearing on debtor's voluntary dismissal, the bank filed an objection to dismissal and a motion to convert the case to Chapter 7. The bank alleged as follows:
1. On October 22, 1999 the debtor's mother died intestate in Lauderdale County, Alabama, and the debtor and his brother filed for letters of administration of the estate in Lauderdale County, Alabama which said letters were granted in the Probate Court of Lauderdale County, Alabama.
2. The property of the probate estate consisted of, among other things, a house and 2.3 acres located in Lauderdale County, Alabama, the contents thereof and a 1988 Dodge Van.
3. Due to the death of his mother, under the laws of intestacy of the State of Alabama, the said debtor became the owner of an undivided ½ interest in his mother's real estate.
4. The debtor's petition for relief under the Bankruptcy Code is dated July 21, 2000; however, it was not filed until August 14, 2000 at 1:15 which was twenty-three hours and fifteen minutes prior to the date and time on which the bank would have been entitled to a judgment in its state court action.
5. On August 31, 2000, the debtor conveyed his undivided ½ interest in all or a portion of his mother's real estate to a third party. The total purchase price of the real estate was $48,200.
6. On August 31, 2000, the debtor transferred a substantial portion of the proceeds from the sale to his brother.
*347 7. The above stated conveyance and transfer were made at a time when the debtor's bankruptcy case was, and is at this date, still pending.
8. Due to the timing of the date of the petition, the filing of the petition and the date set for the hearing on the Bank's motion for summary judgment, the debtor invoked the protection of the bankruptcy court to enable him to convey assets which otherwise would have been subject to SunTrust's judgment lien.
In the debtor's response to the bank's motion to convert the debtor by counsel asserted that the case, pursuant to Title 11, § 1307(e) could not be converted because the debtor was a farmer. It was further asserted by both debtor and counsel that even though they were aware that under Alabama laws of intestacy, that the property vested in the debtor and his brother, that they some how believed that the property was in the name of the probate estate. They further alleged that under Alabama law, in the case of insolvency of the probate estate, that the property was subject to divestment. However, there was neither any indication of, nor was the probate estate insolvent. It was further admitted that the debtor had no defense to the bank's motion for summary judgment, but that the bankruptcy was filed to protect all of the debtor's unsecured creditors.
However, the primary debts scheduled by the debtor in his bankruptcy petition were owed to the bank. The debtor listed no secured creditors and the total debt listed to unsecured creditors was in the sum of $81,221.56 of which $59,000 was owed to the bank. There was only a total of four unsecured creditors listed, of which the bank was one.
The debtor in his statement of affairs listed his occupation as being a farmer. He projected monthly income in the amount of $1,650.00 from his farming operations, expenses in the amount of $794.13, and excess income in the amount of $855.87.
No where in the debtor's petition, schedules, or statement of affairs was it shown that the debtor was a co-administrator of his mother's estate in an action presently pending in the Probate Court for Lauderdale, County or that a proceeding was presently scheduled in that action whereby all of his mother's property was to be sold at public auction on August 31, 2000. No where in the petition did the debtor show that he owned any real property as part of his bankruptcy estate. In Schedule B, entitled "Personal Property," he listed a "one-half interest in the Estate" of his mother and listed the current market value of same as "unknown." In Schedule C, entitled "Property Claimed as Exempt," the debtor claimed the one-half interest in his mother's estate as exempt, but left the space entitled "Value of Claimed Exemption" blank.[3] Counsel for debtor argued the value was left blank because neither he nor the debtor knew the amount of the debtor's interest in his mother's estate. It is undisputed, however, that the debtor and his brother were co-administrators of their mother's estate and, pursuant to Alabama law, had filed an inventory of the property of the estate and posted a bond in twice the value of the property. This inventory had been done by the debtor in the pending administration and filed in the same under debtor's oath. Debtor failed to fully and honestly disclose this information in his petition, schedules and statement of affairs.
The petition did reveal, however, that counsel for debtor had been paid the sum of $2,800.00 in advance for services in connection with the bankruptcy. Debtor's counsel is a regular practicing bankruptcy attorney in our court. The ordinary fee *348 for filing a Chapter 13 of this size is in the amount of $1,000.00. In addition to representing the debtor in bankruptcy, counsel also represented the debtor in the state court action.
After reviewing the objection filed by the bank and the debtor's petition and schedules, the Court issued the order to show cause and described therein the specific conduct that appeared to violate Rule 9011(b) and § 105(a) of the Code.[4] The order provided that if the matters set forth in the bank's objection were true, then it appeared that the debtor may have invoked the protection of the bankruptcy court to enable him to convey assets which otherwise would have been subject to the bank's judgment and to dispose of the property without accounting to his creditors. It appeared that debtor's counsel may have either known or after an inquiry reasonable under the circumstances should have known about the debtor's ownership interest in the property and apparently assisted the debtor in his endeavor to thwart or delay the bank in its litigation against the debtor in manipulation of the Bankruptcy Code so that the debtor could divest himself of assets, or that the attorney counseled and assisted the debtor in invoking the automatic stay to harass or to cause unnecessary delay or needless increase in the cost of litigation to the bank.
On September 26, 2000, counsel for the debtor filed a pleading entitled "Debtor's Response to Objection To Motion to Dismiss Chapter 13." Debtor's counsel filed the response on the same day that the Court entered the rule to show cause, but prior to receiving notice of same. The response reads in part as follows:
"1. Debtor filed for relief under Chapter 13 of the Bankruptcy Code on August 14, 2000. Debtor is a farmer who lives in Lauderdale County, Alabama.
2. On August 18, 2000 the Debtor filed a Notice of Dismissal of his Chapter 13. The debtor seeks to dismiss this case in order to deal with anticipated debts from the debtor's current farming operations so as to be able to obtain the best "fresh start" possible.
3. At the time that the debtor filed this case there was pending action in the Probate Court for Lauderdale County, Alabama to administer the property of the estate of the debtor's mother. The debtor is a co-administrator *349 of this Estate along with his brother. Debtor along with his brother are the surviving heirs of their mother.
4. The probate estate consisted in part of certain real property located Florence, Alabama. This real property was sold at auction as part of the administration of the probate estate on August 31, 2000 for the sum of $48,200.00.
5. At closing, the closing attorney paid $18,557.20 in settlement charges which included paying off two mortgages owed by the debtor's deceased mother in the amount of $13,385.20, settlement charges, and the lawful claims which were filed against the probate estate. The balance of these proceeds, $17,748.10, was divided by the closing attorney between the debtor and his brother. Presumably, as part of the administration of the deceased's estate and to reflect the debtor's receipt of advancements, these proceeds were divided so that the debtor received $2,181.45 and his brother received $15,566.65.
* * * * * *
8. Section 1307(b) gives the debtor an absolute right to dismiss his Chapter 13 petition. Barbieri v. RAJ Acquisition Corp. (In re Barbieri), 199 F.3d 616 (2nd Cir.1999). This statute provides in pertinent part, that "[o]n request of the Debtor at any time, if the case has not been converted under section 706, 1112, or 1208 of this title, the court shall dismiss a case under this chapter." . . .
9. The debtor's absolute right to dismiss his petition is bolstered by § 301 of the Bankruptcy Code which provides that Chapter 13 is purely voluntary and may not be commenced involuntarily under § 303(a). For this reason alone, the Court cannot grant the request of Sun-Trust to keep the debtor in Chapter 13. Such a result would allow a creditor to effectuate an involuntary Chapter 13 without the need to comply with all of the requirements of § 303. Barbieri, 199 F.3d at 620.
* * * * * *
12. Because the debtor has an absolute right to dismiss his case, this Court should not convert the case to one under Chapter 7 of the Bankruptcy Code. Beatty v. Traub (In re Beatty), 162 B.R. 853, 856 (9th Cir. BAP 1994). . . . Furthermore, the Barbieri, court found that to grant a creditor's motion to convert in the face of the debtor's pending motion to dismiss a Chapter 13 would allow the creditor to effectuate an involuntary petition without complying with the requirements of § 303(a) of the Bankruptcy Code. "Such result flies in the face of the voluntary nature of [Chapter 13] and circumvents the standards for an involuntary liquidation set forth in § 303." 199 F.3d at 620 (citations omitted).
13. Finally, § 1307(e) provides that a court may not convert a case under Chapter 13 to one under Chapter 7 if the debtor is a farmer, unless the debtor requests such conversion. In this case the debtor is a farmer as defined under the Bankruptcy Code. The debtor does not request that this case be converted, instead the debtor seeks to dismiss this action. Accordingly, the Court may not convert this case to one under Chapter 7."
Counsel for debtor further argued that this case was not filed for an improper or unnecessary purpose and that it was not an abuse of process to have filed the case because the debtor filed bankruptcy to "to treat all unsecured creditors" the same, i.e., so that all the creditors would share, rather than the bank getting it all. The *350 debtor explained the dismissal of his case only four days after it was filed, stating that he realized that because of the drought [which had been going on for months] that his farming effort was futile. The sad reality is, however, that the creditors got nothing-apparently the brother got most of it. After the mortgages and settlement charges were paid, $17,748.10 remained to be divided between debtor and his brother as the only surviving heirs. Instead, the debtor's brother received $15,566.65 and the debtor only received $2,181.45. (If this accounting is believed, the debtor paid his attorney $2,800.00 to net himself $2,181.00.) Despite the debtor's argument that he filed bankruptcy to treat all unsecured creditors the same nothing could be further from the truth.
On October 16, 2000, the bankruptcy administrator filed a motion to determine the reasonableness of the attorney's fee paid to debtor's counsel and requested a disgorgement of the fee. The bankruptcy administrator argued that the fee exceeded the usual and customary fee which would be awarded to counsel for representation of a Chapter 13 debtor in a similar size case. The motion further alleged that it appeared that the case was filed for an improper purpose and that any fee should be forfeited. In counsel's written response to the rule to show cause, counsel admits that the $2,800.00 fee exceeded the usual and customary fee, but represented that such amount was charged because the case was originally prepared as a Chapter 12 case. After the fee was paid, counsel stated that he became aware that Chapter 12 law lapsed on July 1, 2000.
II CONCLUSIONS OF LAW
This case has required the Court to review its sanctioning powers under Bankruptcy Rule 9011 as well as the Court's statutory power to impose sanctions under § 105(a).[5] Rule 9011 provides as follows:
(a) Signature
Every petition, pleading, written motion, and other paper, except a list, schedule, or statement, or amendments thereto, shall be signed by a least one attorney of record in the attorney's individual name. A party who is not represented by an attorney shall sign all papers. Each paper shall state the signer's address and telephone number, if any. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party.
(b) Representations to the Court
By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,
(1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; [emphasis added]
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
*351 (4) the denials of factual contentions are warranted on the evidence of, if specifically so identified, are reasonably based on a lack of information or belief.
Section 105(a) states:
(a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. [emphasis added].
By placing his signature on the petition, schedules and statements, the debtor subjects himself to the tenor of Rule 9011(a) and (b). There is some uncertainty in the law as to whether Rule 9011(a) applies to debtor's counsel with reference to the representations made in debtor's statements and schedules because its language expressly excepts "a list, schedule, or statement, or amendments thereto." This Court has previously found that found that Rule 9011(b) as amended in 1997 clearly subjects debtor's counsel to the standards set forth in Rule 9011. In the case of In re Kelley, 255 B.R. 783 (Bankr.N.D.Ala.2000), the Court recognized that the argument could be made that because schedules and statements were omitted from the language of Rule 9011(a) that counsel may not be responsible for inaccuracies or misstatements in same. The Court found that by signing the bankruptcy petition and presenting the entire bankruptcy package to the Court, counsel subjected himself to the "limits, scope, and bounds of Rule 9011" because of the language found in paragraph (b) of Rule 9011 which uses the terms "whether by submitting, filing, or later advocating."[6] In Kelley, the debtor had obtained a judgment for a personal injury against a third party. The debtor scheduled the judgment as exempt in the amount of $1 and stated that its value was "unknown." With a few simple questions the debtor's attorney could have easily ascertained the true value of the judgment, which was in fact several thousand dollars. The Court warned debtor's counsel that his failure to investigate the true value of the judgment was sanctionable under Rule 9011(b).
Section 362(a) of the Bankruptcy Code provides that a bankruptcy petition operates as a stay to all collection efforts, all foreclosure actions, and any other actions against the debtor that are not specifically excepted from the stay by subsection (b) of § 362. Rule 9011(c)(1)(A) includes a safe harbor provision that prohibits a party from filing a motion for Rule 9011 sanctions unless the violating party does not withdraw or correct the challenged paper under subsection (b) within 21 days of service.[7] The safe harbor provision contained in Rule 9011(c)(1)(A) does not apply to the filing of a bankruptcy petition.[8] The petition is excluded from the safe harbor provision of Rule 9011 because its filing has immediate serious consequences.[9] The invocation of the automatic stay is perhaps one of the most powerful safeguards in all the law. With the filing of a single piece of paper, the law imposes a broad sweeping and powerful injunction which carries with it great implications and provides for sanctions for its violation. The purpose of the automatic stay is to give the debtor breathing room. The automatic stay is not to be used as an abusive litigation tactic.
*352 The case of In re Robinson, 198 B.R. 1017 (Bankr.N.D.Ga.1996), contained informative language where the automatic stay was involved as a litigation tactic instead of for a proper purpose. That case stated:
Filing even a skeletal petition secures the protection of the automatic stay of 11 U.S.C. § 326(a) for both the honest and the abusive debtor. The automatic stay serves to protect the honest debtor in desperate financial circumstances from creditor action and to provide a much-needed "breathing spell" to marshal resources and prepare to deal with creditors in a fair and orderly manner. The abusive debtor also obtains protection of the automatic stay but employs it to delay or thwart creditor action while refusing to fulfill the duties imposed by the Bankruptcy Code. The uses of the automatic stay as both a shield and a weapon are well-known to debtors' attorneys and to some debtors.
. . . .
Using the automatic stay and the filing of the petition as a shield to buy time to negotiate a loan refinancing abuses the bankruptcy system. The harm which devolves is not limited to the affected creditor. By example and word of mouth, the "technique" spreads until it is no longer perceived by the Bar or by debtors as an abuse but as a permissible manipulation of the system. In the meantime, respect for the bankruptcy system, including attorneys who wish to assist honest debtors, deteriorates. When public respect for any part of the legal system falters, it harms everyone involved in the system.[10]
Courts have also imposed Rule 9011 sanctions where the bankruptcy filing is motivated by the desire to delay a creditor from enforcing its rights in another court. In the case of In re Collins, 250 B.R. 645 (Bankr.N.D.Ill.2000), the debtor was involved in protracted litigation with another party, and when it appeared that the debtor had lost all hope of winning his case, he filed Chapter 7 bankruptcy. Although the debtor was worth millions of dollars and enjoyed a fabulous income as an insurance salesman, all his property was exempt except for about $75,000 which he proposed to pay to his adversary and discharge the balance of a $525,000 judgment against him. The Collins court, in dismissing the case for substantial abuse under § 707(a) observed:
Rule 11 creates duties to one's adversary and to the legal system, just as tort law creates duties to one's client. The duty to one's adversary is to avoid needless legal costs and delay. The duty to the legal system (that is, to litigants in other cases) is to avoid clogging the courts with paper that wastes judicial time and thus defers the disposition of other cases or, by leaving judges less time to resolve each case, or increases the rate of error. Rule 11 allows judges to husband their scarce energy for the claims of litigants with serious disputes needing resolution.[11]
In the instant case it appears that the debtor filed his petition in order to stop the state court from entering judgment in favor of the bank on a complaint to which the debtor admittedly had no viable defenses while the debtor effectuated the transfer of his only assets. The invocation of the automatic stay was used as a litigation tactic to stay the state court action, before the same could proceed to judgment. The Court has a nagging skepticism about counsel's defenses and explanations of what appears to be a deliberate plan to thwart the bank long enough for the debtor to dispose of his only assets. The circumstantial evidence is overwhelming. The bankruptcy filing just 23 hours in advance of the summary judgment setting; the dismissal just four days later (supposedly because the debtor realized *353 that the drought which had been going on for several months was detrimental to his farming operation); the fact that a Chapter 13 was filed at all since debtor had no secured debts and nothing to reorganize; the fact that a Chapter 13 could be dismissed at will and could not be converted to a Chapter 7 because the debtor was a farmer; the alleged fact that debtor and debtor's counsel did not know the value of the mother's estate, even though an accounting and inventory had been filed on the debtor's oath in the probate court; the alleged ignorance of debtor's counsel of Alabama law on real estate and intestacy law; the failure to disclose in the bankruptcy petition that an auction had been scheduled and was pending when the bankruptcy petition was filed; the fact that property was sold and debtor's brother got most of the profit; the debtor only realized $2,100.00 from the sale of his assets he inherited from his mother, but he paid his counsel $2,800.00 to file the bankruptcy petition. It is obvious that the automatic stay was invoked as a sword or a litigation tactic in the state court action instead of as a shield to give the debtor time to reorganize his affairs while treating his creditors fairly pursuant to the Bankruptcy Code. It is obvious that debtor's counsel was engaging in gamesmanship with the bank.
Debtor's counsel had a duty to investigate the factual contentions claimed by debtor in his bankruptcy petition and schedules. By signing the petition and presenting the bankruptcy to the Court, counsel was certifying that the factual contentions claimed therein were supported by the evidence and were submitted for a legitimate purpose. They were not.
The Court further finds that it has the power under Title 11, § 105(a) to impose sanctions. Section 105(a) sets forth as follows:
(a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. [emphasis added].
providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. [emphasis added].
Section 105(a) provides the Court with the power to protect the integrity of the bankruptcy system and to impose appropriate remedies for failure to make a reasonable inquiry under the appropriate circumstances such as involved in this case.[12] The vast majority of attorneys who practice before this Court have unquestionable integrity. Abuses like those here give bankruptcy a bad name when bankruptcy can least afford negative publicity. This Court will not tolerate this type of abuse.
The Court accepts the debtor's counsel's offer of settlement in this case $10,000.00 payment of a sanction and refund of attorney's fees in the sum of $2,800.00 sum of which are to be paid into the Chapter 13 estate for the benefit of creditors. The debtor has further agreed to keep Chapter 13 open so the Chapter 13 trustee may pursue avoidance actions. Lastly, the Court warns debtor's counsel that he has come very close to more draconian action. Any further sanctionable conduct by him will result in his suspension of practice before this Court.[13]
NOTES
[1] Pursuant to a settlement agreement approved by the Court, the names of the debtor and debtor's counsel have been changed for publication purposes.
[2] FED. R. BANKR. P. 9011(c)(1)(B) provides as follows:
(B) On Court's Initiative. On its own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto.
Title 11 § 105(a) provides that:
(a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.
[3] He cited ALA. CODE § 6-10-6 (Alabama's Code section allowing personal property exemption) as entitling him to said exemption.
[4] The procedure for imposing Rule 9011 sanctions on the court's own initiative is described in FED. R. BANKR. PROC. 9011(c) which states:
(c) Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.
(1) How Initiated.
(B) On Court's Initiative. On its own initiative, the court may enter an order describing the conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect thereto.
(2) Nature of Sanction; Limitations. A sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Subject to the limitations in subparagraphs (A) and (B), the sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorneys' fees and other expenses incurred as a direct result of the violation.
(A) Monetary sanctions, may not be awarded against a represented party for a violation of subdivision (b)(2).
(B) Monetary sanctions may not be awarded on the court's initiative unless the court issues its order to show cause before a voluntary dismissal or settlement of the claims made by or against the party which is, or whose attorneys are, to be sanctioned.
(3) Order. When imposing sanctions, the court shall describe the conduct determined to constitute a violation of this rule and explain the basis for the sanction imposed.
[5] See the case of In re Collins, 250 B.R. 645, 655-56 (Bankr.N.D.Ill.2000) for an excellent discussion of a courts sanctioning powers.
[6] See the recent article, James Shepard, Zealous Advocacy or Sanctionable Gamesmanship, NORTON BANKR. L. ADVISOR, Dec. 2000, at 6.
[7] FED. R. BANKR. PROC. 9011(c)(1)(A).
[8] FED. R. BANKR. PROC. 9011(c)(1)(A).
[9] In re Collins, 250 B.R. 645 (Bankr.N.D.Ill. 2000).
[10] In re Robinson, 198 B.R. at 1024.
[11] In re Collins, 250 B.R. at 660-61 (quoting Mars Steel Corp. v. Continental Bank, N.A., 880 F.2d 928, 932 (7th Cir.1989)).
[12] In re Kelley, 255 B.R. 783 (Bankr.N.D.Ala. 2000).
[13] In re Computer Dynamics, Inc., 253 B.R. 693, 698 (E.D.Va.2000)(stating that bankruptcy courts "possess `the inherent authority to disbar or suspend lawyers from practice'"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1898898/ | 51 B.R. 927 (1985)
In re Hubert Nelson CASH, Jr. and April Ann Cash.
Bankruptcy No. 84-06335.
United States Bankruptcy Court, N.D. Alabama.
August 12, 1985.
M. Douglas Ghee, Anniston, Ala., for debtors.
FINDINGS, CONCLUSIONS, AND ORDER DENYING CONFIRMATION OF CHAPTER 13 PLAN
L. CHANDLER WATSON, Jr., Bankruptcy Judge.
The above-styled case was commenced November 26, 1984, by a joint petition under *928 chapter 13, title 11, United States Code, filed in this Court, and this case is still pending in this Court under said chapter of the bankruptcy statute. The case came before the bankruptcy judge for a hearing upon confirmation of the debtors' plan, on March 26, 1985. Due to an irregularity of employment experienced by one of the debtors and uncertainty of future employment of this debtor, attendant with the debtors' having moved to Panama City, Florida, the bankruptcy judge withheld a final ruling upon the matter of confirming the plan, and the trustee was requested to report at a later date upon the reliability of the debtors' deposits pursuant to the proposed plan.
The case came before the Court for a continued hearing upon the matter of confirming the plan, on July 9, 1985; whereupon, the bankruptcy judge found that the plan was not then proposed in good faith, concluded that the plan could not be confirmed, and announced that confirmation of the plan was refused.
Findings of Fact
Taking judicial knowledge of the matters appearing of record in the court file for this case, and upon a due consideration thereof, the bankruptcy judge finds the facts as follows:
1. December 19, 1984, was the first day set by the United States trustee, pursuant to Bankruptcy Rule X-1006(a), for the meeting of creditors called, pursuant to 11 U.S.C. § 341(a);
2. With the chapter 13 petition, the debtors filed their Chapter 13 Statement, pursuant to the requirements of Bankruptcy Rule 1007(b) and Official Form No. 10, listing ten debts owed to nine separate creditors, which were there named with their mailing addresses;
3. Neither "Finance One of South Carolina, Inc.," nor "Associates Finance" was included in the list of debts and creditors, but debts owed to these two creditors, respectively, were listed in an amendment which the debtors filed on June 3, 1985, as permitted by the provisions of Bankruptcy Rule 1009; and
4. No proof of claim was filed by either of the latter two creditors in this case except a proof of claim in the sum of $2,062.74 which was tendered for filing by Finance One of South Carolina, Inc., to the clerk of the Court, on June 20, 1985.
Conclusions by the Court
The impediment to confirmation of this plan began with the debtors' omission of the two debts from the list of debts required in part 12 of the debtors' Chapter 13 Statement, Official Form No. 10. In Bankruptcy Rule 2002(a) and (f), it is required that the clerk or some other person directed by the Court give notice to "all creditors" and certain others of the order for relief, the meeting of creditors, and the time allowed for filing claims pursuant to Bankruptcy Rule 3002. The basic source of the names and addresses of the creditors is, of course, the list filed by the debtor or debtors under part 12 of Official Form No. 10. The omission of a creditor or creditors from this list by the debtor results in a lack of knowledge by the creditor or creditors that the chapter 13 case has been commenced, as well as ignorance of the date of the creditors' meeting and of the last date by which a proof of claim may be filed in the case, unless such knowledge comes to the creditor or creditors by other means. There is no indication of the latter in this case.
When a debtor's omission of a creditor is remedied by an amendment filed in time for the creditor to be notified and to file a proof of claim in the case before the claim's deadline, it may be that no substantial injury to the omitted creditor results from the debtor's having filed an incomplete list of debts and creditors. When, however, tardy listing of a creditor by a debtor prevents the creditor from making a timely filing of a proof of claim, it is obvious that different considerations are presented.
With certain exceptions not applicable here, the provisions of Bankruptcy Rule 3002(c) permit the filing of a proof of claim in a chapter 13 case only within 90 days after the first date set for the meeting of *929 creditors called pursuant to 11 U.S.C. § 341(a). In the present case, the creditors' meeting having been first set for December 19, 1984, the last day for the filing of a proof of claim fell on March 19, 1985. Bankruptcy Rule 9006(b) deals with enlargement of time periods by action of the Court, but under subpart (3) of part (b) of that rule, the Court may enlarge the time provisions of Rule 3002(c) "only to the extent and under the conditions stated in" the latter rule. This gives no latitude to the Court except in those circumstances unrelated to this case, as previously noted.[1]
As stated, Finance One of South Carolina, Inc., and Associates Finance were not added until an amendment was filed by the debtors on June 3, 1985. Although Bankruptcy Rule 1009 provides that a "Chapter 13 Statement may be amended by the debtor as a matter of course at any time before the case is closed," the failure of the debtors to list these two creditors until long after March 19, 1985, effectively prevented these two creditors from timely filing a proof of claim and deprived them of the opportunity to have an allowed claim as contemplated in 11 U.S.C. §§ 501(a) and 502(a).[2]
In this situation, it might be suggested that the debts owed to these originally-omitted creditors would not be discharged in this case and that, therefore, no substantial harm to the creditors would result from their being prevented from having the opportunity to hold an allowed claim in the case. This view would rest upon the relevant portion of 11 U.S.C. § 1328(a) which states that "the court shall grant the debtor a discharge of all debts provided for by the plan" after completion of all payments under the plan. It may very well be that a creditor who is not listed by the debtor in the Chapter 13 Statement in time for the creditor to have a reasonable opportunity to file a proof of claim in the case, within the time required by Bankruptcy Rule 3002(c), would hold a nondischargeable debt, because it could not be reasonably said that it was a debt "provided for by the plan." In short, it would be a strained construction to view the plan as providing for a debt owed to a creditor, when the debtor omits the debt and creditor from the Chapter 13 Statement.
Even though it be conceded that the debt would not be subject to the discharge which might be granted to the debtor in such a case, it is easy to conceive of circumstances under which the creditor would still have been seriously prejudiced or injured by the debtor's omission. In the first place, the omitted creditor would not receive any dividend paid under the plan to like creditors holding allowed claims but would be prevented from taking independent action for collection of the debt by the automatic stay provided for under 11 U.S.C. § 362(a). At most, the omitted creditor could seek relief from the stay, but the relief might or might not be forthcoming because of the potential interference with the chapter 13 plan which could result from independent collection efforts by the omitted creditor. To qualify for relief under chapter 13, a debtor is required to be "an individual with regular income" or such a person and that person's spouse.[3] By the time that an omitted creditor had obtained relief from the automatic stay or the stay had been terminated by the discharge of the debtor or dismissal or closing of the case,[4] the debtor's "regular income" may have substantially diminished or have vanished.
This basically unfair treatment of a creditor who is denied effective participation in a chapter 13 case by the debtor's intentional or inadvertent omission of the debt and the creditor from the Chapter 13 Statement, until added by an amendment after the creditor has no opportunity or no reasonable opportunity to file a proof of claim *930 in the case, is not compatible with a finding by the Court that the chapter 13 plan is "proposed in good faith," a prerequisite to the Court's confirmation of the plan.[5] Whether this would also be the result if the amendment adding the creditor came in time for the filing of a proof of claim but so late as to prevent the creditor from attending the meeting of creditorsor, in another example, from participating in the hearing on confirmation of the plan is not a question presented to the Court in this case.
Is, however, this issue of whether the plan is proposed in good faith a question presented to the Court in this case? Some may say not. No objection to confirmation of the plan was filed. Not even one creditor appeared or was represented at the continued confirmation hearing; but lack of creditor participation in bankruptcy cases is common. How much participation in a chapter 13 case, beyond tendering to the clerk a proof of one's claim against a debtor, is it reasonable to expect from the holder of an unsecured debt?
Bankruptcy Rule 3020(b)(2), in a fashion similar to 1973 Bankruptcy Rule 13-213(a), provides:
(2) Hearing. . . . If no objection is timely filed, the court may find, without receiving evidence, that the plan has been proposed in good faith and not by any means forbidden by law.
But this provision is obviously permissive and does not purport to dictate what shall be the court's finding on the issue of good faith, when an objection to confirmation is absent.[6] This rule certainly permits its converse that the court, in the absence of a timely objection, may find (without taking evidence) that the plan has not been proposed in good faith.
Confirmation of a chapter 13 plan is not properly conceived of as an action which the bankruptcy judge is to take as a matter of course, when notice has been given, an opportunity for a hearing has been given, and no party in interest has objected to confirmation. The statute mandates that the court hold a confirmation hearing.[7] It is a two-step procedure: (1) notice of the hearing; and (2) the hearing. It is distinctly not the three-step procedure referred to in 11 U.S.C. § 102(1): (1) appropriate notice; (2) an appropriate opportunity for a hearing; and (3) performance of a proposed act without an actual hearing, if none is requested.
Neither by statute nor by rule is the bankruptcy judge directed to confirm a chapter 13 plan simply because no party in interest objected to confirmation of the plan, as could have been done under the provisions of 11 U.S.C. § 1324. The statutory directive in 11 U.S.C. § 1325(a) is that "the court shall confirm a plan if" it conforms to the six requirements there listed, which requires an inquiry and finding by the court.[8] These requirements are of a different character than the vote against a plan which is now provided for in 11 U.S.C. § 1325(b), and were the basis for the United States Court of Appeals for the Second Circuit to observe that "[e]very Chapter 13 plan is subject to judicial review for `good faith' and `feasibility' as a condition of confirmation."[9]
What then is required for the court to find that "the plan has been proposed in good faith"? The United States Court of Appeals for the Eleventh Circuit dealt with the degree to which a debtor's plan proposes to repay creditors as an aspect of "good faith" and endorsed eleven factors which *931 had been detailed by the district court below.[10]
The circuit court approved the lower court's observation that the list was not exclusive even in this specific area of the good-faith inquiry and noted that "the accuracy of the plan's statements of debts and expenses and whether any inaccuracies are an attempt to mislead the court" are a factor which "calls for attention."[11]
Holding all of these principles in mind and considering the present case, one must be struck by the fact that the inaccuracy of the debtor's Chapter 13 Statement prior to its being tardidly amended led to the proposal of a plan under which the degree of repayment to the omitted creditors was zero, compared to 100% for listed creditors who timely filed proofs of claim. Such a plan cannot be found to have been proposed in good faith,[12] even if shrouded by the absence of any formal objection to confirmation.
The following statement concerning the term "good faith," as used in Chapter XI, § 366(4), Bankruptcy Act of 1898,[13] has been cited in at least four opinions from the circuit courts of appeal, when dealing with that term as it is used in chapter 13, § 1325(a)(3): "A comprehensive definition of good faith is not practical. Broadly speaking, the inquiry should be whether or not under the circumstances of the case there has been an abuse of the provisions, purpose or spirit of Chapter XI in the proposal or acceptance of the arrangement."[14] "Good faith" is also defined as follows:
[It] is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage, and an individual's personal good faith is [a] concept of his own mind and inner spirit and, therefore, may not conclusively be determined by his protestations alone. . . . Honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. An honest intention to abstain from taking any unconscientious advantage of another, even through technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render transaction unconscientious. In common usuage this term is ordinarily used to describe that state of mind denoting honesty of purpose, freedom from intention to defraud, and, generally speaking, means being faithful to one's duty or obligation.....[15] To similar intent is the term "bona fide":
In or with good faith; honestly, openly, and sincerely; without deceit or fraud. . . . Truly; actually; without simulation or pretense. Innocently; in the attitude of trust and confidence; without notice of fraud, etc. Real, actual, genuine, and not feigned. . . . [16]
In Official Form 10, Chapter 13 Statement, part 12b and c, debtors are admonished to list "all debts which are or may be secured," and "all other debts," not listed in 12a. [emphasis added]. Because of the failure of the debtors to list all debts, prior to the untimely amendment of June 3, 1985, the two omitted creditors were foreclosed from an opportunity to file a timely proof of claim[17] and, thereby, from participation *932 in the payments to be made on allowed claims. They also were prevented from participation in another substantial aspect of the case the meeting of creditors prescribed by 11 U.S.C. § 341(a), at which the debtors must submit to examination under oath by creditors or the trustee.[18] Thus, the debtors have also foreclosed the possibility that this or any other plan in this case may be found to have been proposed in good faith.
It is, of course, unnecessary for an expression of opinion to be given upon a similar circumstance which might arise upon failure of a creditor holding a listed debt to receive timely notice, due to a debtor's having stated the creditor's name and address in a fashion inadequate for timely delivery of notice by the postal service.
The debtors here having not reasonably satisfied the bankruptcy judge that the plan is now proposed in good faith, as stated in 11 U.S.C. § 1325(a)(3), confirmation of the plan must be refused. No purpose would be served by granting time for proposal of a modified or new plan.
Order
In view of the foregoing, it is ORDERED by the Court that confirmation of the debtors' chapter 13 plan in this case is refused, that no additional time is granted to the debtors for filing another plan or a modification of the plan, and that a copy of this order shall be sent through the United States mails to each of the following (which shall be sufficient service and notice hereof): the debtors, their attorney, the chapter 13 trustee, the creditors, and the United States trustee for this district.
NOTES
[1] In re Whitten, 13 BCD 42, 49 B.R. 220 (Bkrtcy. N.D.Al.1985).
[2] In the present case the problem outlined may not be remedied by the filing of a proof of claim for a creditor by the debtor, the trustee, or a codebtor. See 11 U.S.C. § 501(b) and (c) and Bankruptcy Rules 3004 and 3005(a).
[3] 11 U.S.C. § 109(e).
[4] 11 U.S.C. § 362(c).
[5] 11 U.S.C. § 1325(a)(3).
[6] See In re Williams, 6 BCD 237, 3 B.R. 728, 1 CBC2d 879 (Bkrtcy.N.D.Ill.1980).
[7] 11 U.S.C. § 1324. In re Martin, 8 BCD 1023, 17 B.R. 924 (N.D.Ill.1982).
[8] In re Martin, 8 BCD 1023, 17 B.R. 924 (N.D.Ill. 1982); In re Williams, 6 BCD 237, 3 B.R. 728, 1 CBC2d 879 (Bkrtcy.N.D.Ill.1980); In re Hockaday, 6 BCD 67, 3 B.R. 254 (Bkrtcy.S.D.Ca.1980); see In re Fizer, 5 BCD 1052, 1 B.R. 400, BLD ¶ 67,278, 1 CBC2d 189 (Bkrtcy.S.D.Oh.1979) (dictum).
[9] Regan v. Ross, 691 F.2d 81, 86 (2d Cir.1982) (9 BCD 1059, 23 B.R. [113]). Cf. In re Rimgale, 669 F.2d 426 (7th Cir.1982) (8 BCD 874, 17 B.R. [31]).
[10] In re Kitchens, 702 F.2d 885 (11th Cir.1983) (10 BCD 812, 28 B.R. [112]), aff'g. In re Kull, 12 B.R. 654, 5 CBC2d 600 (S.D.Ga.1981).
[11] 702 F.2d 885, 889. See In re Estus, 695 F.2d 311 (8th Cir.1982) [9 BCD 1348, 25 B.R. [112], 7 CBC2d 984].
[12] See In re Estus, 695 F.2d 311, at 317 (8th Cir.1982) [9 BCD 1348, 25 B.R. [53], 7 CBC2d 984].
[13] Formerly, 11 U.S.C. § 766(4).
[14] 9 Collier on Bankruptcy ¶ 920, at 319 (14th ed. rel. no. 23, 1975), cited in In re Kitchens, 702 F.2d 885, (11th Cir.1983) and cases listed at 888.
[15] Black's Law Dictionary 623 (5th ed. 1979).
[16] Id. at 160.
[17] Bankruptcy Rule 3002(c).
[18] 11 U.S.C. § 343. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1715671/ | 770 S.W.2d 599 (1989)
Martin MORIN, et al, Appellants,
v.
The STATE of Texas, Appellee.
No. B14-88-516-CR.
Court of Appeals of Texas, Houston (14th Dist.).
April 13, 1989.
Harold Klein, Houston, for appellants.
Linda A. West, Houston, for appellee.
Before PAUL PRESSLER, CANNON and ELLIS, JJ.
OPINION
PAUL PRESSLER, Justice.
Judgment for $5,000 was entered against appellants on a bond that was forfeited on March 12, 1987. We affirm.
Eunice Benton was surety on a bail bond for Martin Morin. The bond was forfeited because Mr. Morin failed to appear in court. On March 4, 1988, the judgment against Martin Morin, as principal, and Eunice Benton, as surety, was entered.
The threshold question is whether article 22.16 of the Tex.Code Crim.Proc. Ann. (Vernon 1988) is to apply retroactively to the date the bond was initially forfeited. Article 22.16 provides, in part, as follows:
(c) A final judgment can be entered against a bond not earlier than:
(2) 18 months after the date the forfeiture was entered, if the offense for which the bond was given is a felony.
This portion of the article was adopted and became effective on June 20, 1987, approximately three and one half months after the bond had been forfeited. Appellant is seeking to have this change in the statute applied retroactively.
Statutes are applied under the direction of section 311.022 of the Texas Government Code (Vernon 1987) which states as follows:
"A statute is presumed to be prospective in its operation unless expressly made retrospective."
A bond is a contract between the surety and the State. Keith v. State, 760 S.W.2d 746 (Tex.App.Fort Worth 1988, pet. pending); Cardenas v. State, 683 S.W.2d 128 (Tex.App.San Antonio 1984, no writ). The Texas Constitution provides that the legislature may not make a retroactive law or a law impairing obligations undertaken in contracts. Tex.Const. art. I, § 16. It is well settled that statutes are not to be applied retrospectively unless the language of the statute makes it clear the legislature intended to make it applicable both retrospectively and prospectively. Coastal Industrial Water Authority v. Trinity Portland Cement Division, General Portland Cement Co., 563 S.W.2d 916 (Tex.1978).
In Cardenas, supra, a similar question was presented. The legislature revised the remittitur law in bond forfeiture cases when the principal had been rearrested. The court held that the State has a vested contractual right once the bail bond contract was executed and that this contractual right includes the relevant law in force at the time the contract was made. Since the amended remittitur law was adopted *600 after the bond had been forfeited, it would have impaired the contractual obligation between the State and the surety had it been applied retroactively. As a result, the court found the provision could not only be applied retroactively in accordance with Tex.Const. art. I, § 16.
Appellant claims that the change to article 22.16 is merely a procedural change, rather than substantive, and should be applied retroactively. In Keith, supra, the court found that these same changes to article 22.16 were substantive changes and, therefore, not to be applied retroactively. In Lubbock Ind. School Dist. v. Bradley, 579 S.W.2d 78 (Tex.Civ.App.Amarillo 1979, writ ref'd n.r.e.), the court defined substantive law as follows:
"Substantive law includes those rules and principals which fix and clear the primary rights of individuals as respects to their person and their property, and generally the remedy available in the case of the invasion of those rights."
The changes to article 22.16 not only affect the rights of the State with respect to their property interest in the bond but also invade their contractual right to an available remedy by delaying the time in which they can collect on the bond. Consequently, the amendments made to article 22.16 must be regarded as substantive changes and cannot be applied retroactively.
There is no language contained in article 22.16 which indicates the legislature's intent to apply this statute retroactively. Had there been, it would probably be in violation of Tex.Const. art. I, § 16.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1461461/ | 842 F.Supp. 1031 (1994)
UNITED STATES
v.
Patrick Glen JORDAN, and Rose Heather Silverstein.
No. 3:91-00230.
United States District Court, M.D. Tennessee, Nashville Division.
January 14, 1994.
Robert Anderson, Asst. U.S. Atty., for the U.S.
*1032 Peter J. Strianse, Nashville, TN, for Rose Heather Silverstein.
Michael Noel, Nashville, TN, for Patrick Glen Jordan.
MEMORANDUM
WISEMAN, District Judge.
The question before the Court is the proper weight, for sentencing purposes, to be attributed to 22.2 milligrams of lysergic acid diethylamide (LSD) dissolved in 13.2 grams of an undetermined liquid. The government refers to this solution as "liquid LSD."
On November 11, 1991, federal agents executed a search warrant on a recreational vehicle owned by defendants Patrick Glen Jordan and Rose Heather Silverstein. The Agents seized a brown bottle containing liquid LSD, a square piece of glass, an ink roller with a spare design wheel, an ink pad, and a digital scale. According to the presentence report, these items constitute a laboratory for applying LSD to blotter paper for distribution. The total weight of the solution in the brown bottle was approximately 13.2 grams, of which 22.2 milligrams was LSD.
On February 9, 1993, defendants pled guilty to multiple counts of unlawful distribution of LSD, or possession with intent to distribute. Jordan pled guilty to Counts One and Two of the Superseding Indictment; Silverstein pled guilty to Counts One through Eight of the Superseding Indictment.
Defendants do not dispute that the government can establish that they are responsible for a total of 7.188 grams of LSD, excluding the bottle of liquid LSD. The government claims that the entire weight of the solvent and the pure LSD should be added to this 7.188 grams for sentencing purposes. Defendants argue that, because the LSD was in the process of being prepared for sale, only the actual weight of the pure LSD in the solution should be used.
I.
The sentencing enhancement statute, 21 U.S.C. § 841(b)(1)(A)(v), provides that a conviction involving "10 grams or more of a mixture or substance containing a detectable amount of lysergic acid diethylamide (LSD)" carries a ten year minimum sentence for a first offense, and a twenty year minimum sentence if the defendant has previously been convicted of a felony drug offense. If the Court were to find that defendants' conviction by guilty plea involved more than ten grams of LSD, Silverstein would be subject to the ten year minimum sentence, and Jordan would be subject to the twenty year minimum sentence by virtue of a previous felony drug conviction.
Because of the way LSD is commonly distributed, the question of what constitutes a "mixture or substance" for sentencing purposes is not as straightforward as it might seem. In its pure crystalline form, LSD is extremely potent. Before it may be used or sold to "retail customers" it must be combined with a "carrier medium." This is done initially by dissolving the pure LSD in a solvent such as alcohol. This form of the drug is somewhat unstable, however, because the solvent has a tendency to evaporate. The LSD solution, commonly referred to as "liquid LSD," is usually placed upon a stable carrier such as blotting paper, sugar cubes, or gelatin capsules before it is sold. The liquid LSD is applied to the carrier and the solution is allowed to evaporate, leaving a small amount of LSD on the carrier. Chapman v. United States, 500 U.S. 453, ___, 111 S.Ct. 1919, 1923, 114 L.Ed.2d 524 (1991); United States v. Marshall, 706 F.Supp. 650, 652 (C.D.Ill.1989).
In Chapman, the Supreme Court addressed the question whether the weight of an LSD carrier medium should be considered for sentencing purposes under 21 U.S.C. § 841. The Court did not consider liquid LSD, the intermediate form of the drug at issue in this case, but looked at the carriers commonly used by retail drug dealers, such as sugar cubes, blotter paper, and gelatin capsules. See Chapman, 500 U.S. at ___ _ ___ & n. 2, 111 S.Ct. at 1923-24 & n. 2.
The Court held that, in enacting § 841, Congress adopted a "`market-oriented' approach to punishing drug trafficking, under which the total quantity of what is distributed, rather than the amount of pure drug involved, is used to determine the *1033 length of the sentence." Id. at ___, 111 S.Ct. at 1925. The Court did not hold that the total weight of every conceivable "mixture" of a drug with a non-controlled substance may be used to calculate a sentence. E.g. United States v. Acosta, 963 F.2d 551 (2d Cir.1992) (holding cocaine dissolved in bottles of creme liqueur not a "mixture" under the statute); United States v. Jennings, 945 F.2d 129 (6th Cir.1991) (holding methamphetamine combined with chemical by-products not a "mixture" under the statute). The weight of a carrier medium is only used for sentencing purposes in those cases in which the drug is in a form in which it is "ready for wholesale or ready for distribution at the retail level." Chapman, 500 U.S. at ___, 111 S.Ct. at 1925. The Court reasoned that Congress' ultimate intent was to measure the quantity of drugs based upon the "street weight" of the drugs in the form in which they are sold. Id. at ___, 111 S.Ct. at 1927.
Because LSD is sold by the dose and not by weight, however, basing sentencing upon weight raises special problems of fairness and consistency. These problems are addressed to some extent in the most recent edition of the Sentencing Guidelines, which became effective on November 1, 1993. "Because the weights of LSD carrier media vary widely and typically far exceed the weight of the controlled substance itself, the Commission has determined that basing offense levels on the entire weight of the LSD and carrier medium would produce unwarranted disparity among offenses involving the same quantity of actual LSD." Guidelines, § 2D1.1, Application Note 18, Background; see also Chapman, 500 U.S. at ___-___ & n. 2, 111 S.Ct. at 1923-24 & n. 2. Accordingly, the Guidelines adopt a standard weight per dose of 0.4 milligram. Guidelines, § 2D1.1 n.*. This weight is based upon the most common carrier medium, blotter paper. See id.
Under the Guidelines, a liquid in which pure LSD is dissolved is not a "carrier," the weight of which is to be considered in sentencing. Application Note 18 reads as follows:
LSD on a blotter paper carrier medium typically is marked so that the number of doses ("hits") per sheet readily can by determined. When this is not the case, it is to be presumed that each ¼ inch by ¼ inch section of the blotter paper is equal to one dose.
In the case of liquid LSD (LSD that has not been placed onto a carrier medium), using the weight of the LSD alone to calculate the offense level may not adequately reflect the seriousness of the offense. In such a case, an upward departure may be warranted.
Guidelines, § 2D1.1 (emphasis added).
There can be no doubt that "liquid LSD" refers to the type of LSD at issue in this case. Liquid LSD is a term of art used to describe pure LSD dissolved in a solvent, usually alcohol. See, e.g., United States v. Martz, 964 F.2d 787, 790 (8th Cir.), cert. denied, ___ U.S. ___, 113 S.Ct. 823, 121 L.Ed.2d 694 (1992); United States v. Lawson, No. 91-1388, 1992 WL 142666, at *1, 1992 U.S.App. LEXIS 14730, at *2 (10th Cir. June 23, 1992); Anderson v. State, 89 Md. App. 712, 599 A.2d 861, 864 (1991). The government and the probation office both refer to the 13.2 grams of liquid found in defendants' recreational vehicle as "liquid LSD." Application Note 18 indicates that pure LSD dissolved in a liquid "has not been placed onto a carrier medium" for distribution, and that a sentencing court should weigh "the LSD alone to calculate the offense level."
Thus, the appropriate weight of liquid LSD, for purposes of the Drug Quantity Table and the sentence enhancement, is 22.2 milligrams. The weight of the solvent is not included, nor is the solvent a carrier medium within the meaning of the Guidelines, and so no carrier weight is added to the weight of the pure LSD.
Even if the court considered the solvent a carrier medium, the actual weight of this solvent would not be used in the weight calculation. As noted above, the Guidelines explicitly state that the actual weight of the carrier medium is not to be taken into account in LSD cases; rather, because the potency of LSD does not depend on the weight of the carrier medium (a "hit" of LSD *1034 on blotter paper can be just as powerful as a hit of LSD on a sugar cube), the Guidelines provide a presumptive dosage weight to be applied to cases involving LSD on a carrier medium: "treat each dose of LSD on the carrier medium as equal to 0.4 mg of LSD for the purposes of the Drug Quantity Table." Guidelines, § 2D1.1(c), n.*. The Background to § 2D1.1 explains:
Because the weights of LSD carrier media vary widely and typically far exceed the weight of the controlled substance itself, the Commission has determined that basing offense levels on the entire weight of the LSD and carrier medium would produce unwarranted disparity among offenses involving the same quantity of actual LSD (but different carrier weights), as well as sentences disproportionate to those for other, more dangerous controlled substances, such as PCP. Consequently, in cases involving LSD contained in a carrier medium, the Commission has established a weight per dose of 0.4 milligram for purposes of determining the base offense level.
Guidelines, § 2D1.1, Application Note 18, Background.
Using the prescribed methodology, each dose of LSD obtainable from the bottle in question would be weighted at 0.4 milligram. Of this 0.4 milligram, 0.05 is presumed to be pure LSD and 0.35 is presumed to be carrier medium, for a ratio of 1 part LSD to 7 parts carrier medium. See id. Thus, if there were 22.2 milligrams of pure LSD in the bottle, this would give a presumptive LSD plus carrier medium weight of 177.6 milligrams.[1]
For purposes of calculating the weight of the liquid LSD, the government assumed that the entire contents of the bottle was pure LSD. That is, the government assumed that all 13.2 grams of the liquid LSD could be translated into hits, at a conversion rate of 20,000 hits per gram of pure LSD. See Chapman, 500 U.S. at ___, 111 S.Ct. at 1923 (stating this conversion rate). This approach is clearly erroneous. Regardless of whether or not one considers the solvent a carrier, the overall weight of the liquid LSD would not be the weight for Guidelines purposes. If the solvent is not a carrier, only the weight of the pure LSD is used; if the solvent is a carrier, the presumptive weight for LSD plus carrier medium is used. Neither approach gives a weight that, when added to the other LSD seized, equals or surpasses 10 grams.
The Court therefore finds that, for sentencing purposes, defendants are responsible for less than 10 grams of LSD.
NOTES
[1] Alternatively, one may divide the total weight of pure LSD (22.2 mg) by the standard hit weight (0.05 mg) to determine the number of hits (444); the number of hits is then multiplied by the presumptive dosage weight (0.4 mg) to arrive at the total weight of LSD and carrier medium (177.6 mg). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622101/ | 725 N.W.2d 747 (2007)
In re the MARRIAGE OF Deborah A. GOLDMAN, f/k/a Deborah A. Greenwood, petitioner, Appellant,
v.
Mark E. Greenwood, Respondent.
No. A06-1110.
Court of Appeals of Minnesota.
January 2, 2007.
*748 Richard D. Goff, Minneapolis, MN, and Felipe Orner, Flushing, NY, for appellant.
Suzanne M. Edmiston, Edina, MN, for respondent.
Considered and decided by SHUMAKER, Presiding Judge; HUDSON, Judge; and CRIPPEN, Judge.
OPINION
*749 CRIPPEN, Judge.[*]
This appeal is from a district court order denying the sole physical custodian's motion for removal of the parties' child to New York City, the city where the custodian's spouse lives and works and where the child, soon to be age 11, may enjoy greater social and educational opportunities, coinciding with his Orthodox Jewish faith and practice. Appellant challenges, as a matter of law, the district court's application of Minn.Stat. § 518.18 (2004) to her removal motion and disputes the district court's analysis of evidence she submitted to establish a prima facie case for removal. Because the arguments advanced by appellant have merit, we reverse and remand for an evidentiary hearing under Minn. Stat. Ann. § 518.175, subd. 3 (West, Westlaw through 2006 Regular Session).[1]
FACTS
Appellant Deborah Goldman and respondent Mark Greenwood were married in 1993 and divorced by a June 2002 judgment. The parties are parents of I.G., a son born on January 30, 1996.
While divorce proceedings were pending in 2001, the district court determined disputed custody and parenting time issues in a memorandum decision awarding appellant sole physical custody of the child, who was then age 5. The court rejected appellant's proposal to move with the child to Boston, Massachusetts, to permit appellant to seek better employment and be closer to her family. The memorandum decision also stated what it labeled a "LaChapelle locale restriction," limiting appellant's freedom to remove the child from Minnesota. See LaChapelle v. Mitten, 607 N.W.2d 151, 162-63 (Minn.App.2000) (permitting custody award conditioned on parent's continuing residence in state), review denied (Minn. May 16, 2000).
Following child custody litigation, after the parties failed to conclude the matter by a stipulation or formation of a parenting plan, the district court formulated a 2002 judgment "award[ing] sole physical custody [of I.G.] . . . subject to reasonable parenting time by [r]espondent." Both the judgment's findings of fact and conclusions of law "incorporated by reference" the court's 2001 memorandum decision on child custody issues, including the root of this appeal, its 2001-02 court-created removal restriction.
Appellant contends that the 2001 removal restriction is not adequately certain,[2] but by reading the 2001 memorandum decision with the 2002 judgment, we are reasonably *750 certain that the following statement accurately represents the district court's custody award:
[Appellant] is hereby awarded sole physical custody of the minor child, namely: [I.G., six at the time of the 2002 judgment; eleven on January 30, 2007] subject to reasonable parenting time by Respondent. . . . [without] a major change in [I.G.'s] daily routine . . . as long as [a.] [appellant] remains available to parent him in Minnesota, [b.] a specific schedule ensures ample parenting time for [respondent], [c.] both parents engage in counseling, and [d.] a parenting consultant or parenting time expeditor is appointed to help reduce disputes over daily care and access issues.
In addition to awarding appellant sole physical custody, the 2001 memorandum reserved the question of I.G.'s legal custody but observed appellant's "greater disposition to continue [I.G.]'s religious training," demanded a sharing of information, and appointed a "parenting consultant."
In 2006, appellant moved the district court for permission to relocate with I.G. to New York City, where appellant's fiancé (now spouse) lives. Because this request was at odds with the judgment's custody provision requiring that appellant remain available to her son in Minnesota, appellant both moved the district to alter this provision of the judgment's custody provision and sought the court's permission for the proposed move.
Appellant submitted 15 affidavits in support of her motions. The child's teachers, baseball coach, and appellant's neighbors were among those who submitted affidavits. In her own affidavit, appellant pointed to I.G.'s improved opportunity to live as an Orthodox Jew and further his religious education in New York City, as well as his psychological adjustment and his changing relationships with respondent's other children. Appellant also highlighted I.G.'s limited opportunity to live his religious life and further his religious education in Minneapolis. Appellant cited her own engagement and the fact that her (then) fiancé lived and worked in New York City in support of her motion and asserted that the proposed move was in I.G.'s best interests. Respondent opposed appellant's motion, arguing that appellant failed to make a "prima facie showing" for relief conflicting with the removal provision in the 2002 judgment.
After a hearing, the district court denied appellant's plea to alter the removal restriction and, without a further evaluation or evidentiary hearing, denied her permission to remove I.G. to New York. Relying partly on an unpublished appellate decision, the district court treated appellant's motion as a motion to modify the custody provision of the judgment and imposed upon appellant the custody modification burdens provided in Minn.Stat. § 518.18 (2004) (amended 2006) rather than the requirements for residential removal addressed by Minn.Stat. § 518.175, subd. 3 (2004) (amended 2006). Assessing appellant's supporting affidavits, the court concluded that appellant failed to present a prima facie case of changed circumstances sufficient to require an evidentiary hearing on the question of whether she could modify the judgment's removal provision that she remain in Minnesota.
Although the court observed that an endangerment analysis might be unnecessary, the court determined that appellant failed to present a prima facie case of endangerment under Minn.Stat. § 518.18(d)(iv). Using still another standard of section 518.18(d)(iv), the court also concluded that appellant failed to "present[] a prima facie case that the advantages associated with the proposed removal . . . outweigh the harm to be caused by *751 the change." Notwithstanding these holdings, the court confirmed that appellant remains the parent with the "greater capacity and disposition to continue educating and raising [I.G.] in his religion" and has "attended to [I.G.]'s religious training, along with his structured social/extracurricular activities."
To challenge the district court's ultimate decision to deny removal without holding an evidentiary hearing, appellant primarily disputes the court's application of the custody-modification provisions of Minn.Stat. § 518.18 and its analysis of her asserted prima facie case for removal.
ISSUES
1. Does Minn.Stat. § 518.18 (2006) govern appellant's motion for removal?
2. Did the district court err in its determination that appellant failed to show a prima facie case for removing the child?
3. Can this court act on appellant's claim of district court bias?
ANALYSIS
The question of whether the district correctly applied the law is reviewed by this court de novo. In re A.R.M., 611 N.W.2d 43, 47 (Minn.App.2000).
1.
Appellant initially contends that the district court erred in reasoning that removal to New York City, because it conflicts with the court's 2001 removal restrictions, is governed by Minn.Stat. § 518.18 regarding custody modification rather than Minn.Stat. § 518.175 regarding removal of a child's residence from Minnesota. As previously stated, portions of the statutes at issue in this case were recently amended, effective on August 1, 2006. See supra note 1.
Generally, appellate courts apply the law "as it exists at the time they rule on a case. . . ." Interstate Power Co. v. Nobles Co. Bd., 617 N.W.2d 566, 575-76 (Minn.2000) (noting that exceptions to this general rule exist when "rights affected by the amended law were vested before the change in the law" or application of changed law would produce manifest injustice or conflict with statutory direction or legislative history). Respondent does not contend that the 2002 judgment establishes vested rights that are altered by the recent amendments. And because other Interstate exceptions also have not been asserted, we apply the relevant statutes as amended.
Minn.Stat. § 518.175 (2006) governs proceedings involving parenting time for the noncustodial parent. Subdivision 3(a) prescribes the manner in which the custodian must seek to remove the child:
The parent with whom the child resides shall not move the residence of the child to another state except upon order of the court or with the consent of the other parent, if the other parent has been given parenting time by the decree. If the purpose of the move is to interfere with parenting time given to the other parent by the decree, the court shall not permit the child's residence to be moved to another state.
Minn.Stat. § 518.175, subd. 3(a).
The central part of Minn.Stat. § 518.18 (2006) addresses modification of orders determining child custody and provides that the district court
shall not modify a prior custody order . . . which specifies the child's primary residence unless it finds, upon the basis of facts . . . that have arisen since the prior order or that were unknown to the court at the time of the prior order, that a change has occurred in the circumstances of the child or the parties and *752 that the modification is necessary to serve the best interests of the child.
Minn.Stat. § 518.18(d).
The Minnesota Supreme Court put Minn.Stat. § 518.175, subd. 3 (1982) at the threshold of its analysis of the statutory scheme affecting requests for removing the residence of a child. Auge v. Auge, 334 N.W.2d 393, 397 (Minn.1983) (observing that the statute permits denial of removal only when the custodian's purpose is to interfere with visitation rights and denial is not proper "simply because the move may require an adjustment in the existing pattern of visitation"). Auge further limited restrictive implications of Minn.Stat. § 518.175 by providing that the proponent of change is entitled to a presumption favoring removal and held that the opponent of the move has the burden of proof under Minn.Stat. § 518.18(d) (1982).[3]Auge, 334 N.W.2d at 399.
The 2006 amendment of section 518.175 eliminates the so-called Auge presumption, establishing that the proponent now must show cause for a removal but that the best interests of the child are to govern the court's decision. Minn.Stat. § 518.175, subd. 3 (2006). But the language of Minn. Stat. § 518.18(d) (2006) on the proposition of changing custody to the other parent, which no longer prompts a presumption for removal, also fails to diminish the reality that Minn.Stat. § 518.175 (2006) governs the standards and burden of proof for the proponent of removal.
The district court examined the state of the law before the 2006 amendment of Minn.Stat. § 518.175 and concluded that this case did not warrant application of the Auge removal presumption in favor of appellant because the judgment stated that removal of the child from Minnesota would not be in the child's best interests. On appeal, the court's non-application of the Auge removal presumption does not require attention because of the amendment of Minn.Stat. 518.175, establishing that appellant has the burden to show that removal is in the child's best interest. But the district court also found that the family-unit preservation rationale underlying the Auge decision should extend to a noncustodial parent whose contact with the child had been considered important enough to prompt the judgment's earlier use of a removal restriction, and this determination does require our attention.
The district court determined that the proposed removal following the 2001 location restriction, which the court saw as an "integral part of the prior `custody order,'" constituted a change (or modification) of the judgment's custody provision that should be governed by Minn.Stat. § 518.18 (2004). The court reasoned that application of section 518.18 served the ends of Auge by "avoiding de novo considerations" of a custody determination; by preserving the child's family-unit stability; and by "minimizing judicial interference" with family decisions. The court noted that Auge was premised on consistency, and reasoned that "parents seeking to remove locale restrictions should be required to meet a greater burden of proof than a simple, de novo best interests burden." The court also noted that "the Court already determined that [r]espondent is best-suited to have physical custody of [I.G.] if [appellant] leaves the state." The several parts of this analysis require our review.
The Statutes
The district court determined that Minn. Stat. § 518.18 should be read broadly, to *753 include any changes in the custody-order language, because it deals with modifying a "custody order" or a "custody arrangement." Minn.Stat. § 518.18(d). But this section, historically and currently, addresses a change in placement, a change in physical custody from one household to another. And the statute instructs the district court to "retain the custody arrangement or the parenting plan provision specifying the child's primary residence that was established by the prior order unless" the situation presents one of four circumstances. Id.
Those four circumstances include the case of the child who is "integrated into the family of the petitioner with the consent of the other party" and the case presenting changes in the "child's environment." Minn.Stat. § 518.18(d)(iii), (iv). We conclude that these provisions confirm the understanding that the statute's scope is confined to the change of provisions "specifying the child's primary residence."
We have had prior occasion to determine that Minn.Stat. § 518.18 addresses "substantial" changes in visitation, for example, where a parent "proposed to alter an arrangement from equal care to one where she has custody during the entire school year." Lutzi v. Lutzi, 485 N.W.2d 311, 315-16 (Minn.App.1992). In contrast, we have determined that visitation alterations accompanying change of the sole custodial parent's residence do not constitute the "restriction" of visitation that is limited by statute in the same fashion as changes governed by section 518.18. Danielson v. Danielson, 393 N.W.2d 405, 407 (Minn. App.1986).
Coinciding with our review of Minn.Stat. § 518.18, the language of Minn.Stat. § 518.175 (2006) provides governing provisions for enumerated changes without reference to whether there are related conditions to the award of sole custody stated in a judgment. Section 518.175 governs these changes notwithstanding removal language in the judgment because the section represents the legislature's specific determination on the subjects the statute addresses. Subdivision 3, as already observed, declares the standard on removal of the child from the state. Similarly, demonstrating the same effect as subdivision 3, subdivision 5 addresses and governs modifications of clauses in an order or judgment that provide for parenting time or a parenting plan. Minn.Stat. § 518.175, subd. 5.
We find no basis for departing from the foregoing statutory scheme to permit court-imposed limits on removal that put that relief beyond the reach of sole physical custodians in circumstances such as appellant's.[4]
Judgment Said to Address Future Change of Custody
In the course of its reasoning, the district court reflected on its statement in the judgment's custody provision that it would award "sole physical custody" to respondent if its location restriction was "found wanting." The court viewed this prior declaration as a continuing basis for respondent to assume full custody if the child were removed. But the found-wanting statement in the 2001 memorandum *754 deals facially with the prospect of immediate nullification of the removal restriction; the statement did not suggest, nor could it, that custody of the child would automatically change if appellant had future cause to move with the child. See Angelos v. Angelos, 367 N.W.2d 518, 519 (Minn.1985) ("[Because] domestic relationships, by their nature, continue under the jurisdiction of the court virtually throughout the lives of the parties. . . . the legislature specifically authorized modification [in child welfare matters].").
Presumption against Custodian
Finally, the district court determined that the application of Minn.Stat. § 518.18 (2004) to this situation complies with the Auge rationale of protecting the family unit. But we are concerned by the court's analysis because Minn.Stat. § 518.18 imposes a higher threshold on the moving party than Minn.Stat. § 518.175, meaning that, despite the district court's extensive discussion of Auge and its 518.18-based considerations, the court's analysis functionally turns Auge on its head and uses the holding as authority for a presumption favoring the opponent of change and opposing the sole custodian. Contrary to the district court's rationale, Auge does not prescribe non-interference in that form. Rather, Auge established a preference because of the importance of a child's relationship with his primary custodial parent under the scheme of Minnesota's child custody statutes, a circumstance enlarged here by over five years of primary caretaking since sole custody was placed by the district court in 2001.[5]Auge, 334 N.W.2d at 399.
Appellant's circumstances here are no different from those of appellant in Auge; both removal proponents are sole custodians. *755 And the legislature, although it has modified the laws to remove a presumption in favor of the custodian's proposed removal, it has not altered the statutory scheme that prompted the Auge court to protect the child's relationship with the sole custodian. The protection Auge afforded to a custodial parent is not enjoyed by more limited parental caretakers, even when this caretaker is designated a joint physical custodian. See Ayers v. Ayers, 508 N.W.2d 515, 520 (Minn.1993). Auge cannot feasibly be employed to permit for the noncustodial parent what statutes grant for the custodial parent.[6]
The sole physical custodian must proceed according to Minn.Stat. § 518.175 (2006) and is not required to satisfy a greater burden under the change-of-custody statute or Auge. Our conclusion is not affected by the fact that the proponent's sole custody was initially conditioned on a removal restriction. We reverse and remand on this determination of law.
2.
Our recognition of Minn.Stat. § 518.175 (2006) as the governing statute in this case diminishes the need to examine appellant's contention that the district court erred in analyzing whether there had been a substantial change in circumstances. But a response to appellant's contentions is required insofar as it bears on the best interests analysis to be applied on remand.
Reasons for Moving
Appellant contends that the district court, when it denied removal, wrongfully *756 omitted findings on the reasons for her planned move to New York City. In particular, appellant disputes the court's determination that this evidence does not bear on the best interests of the child.
The district court recognized as changed circumstances the evidence that appellant was engaged to marry and had plans to move to New York, and that the child knew and enjoyed the company of appellant's fiancé and his family. But the court observed that these facts "represent a change in [appellant's] circumstances, but not [I.G.]'s."
And the court declined to address whether appellant's move without the child would be detrimental to the child's best interests, noting that appellant failed to assert that she would move if her son did not. The court evidently assumed that appellant would not move under such circumstances. The court observed only that the child continues to prosper under the circumstances he has experienced since the court's prior order. Thus, the court observed that "[appellant] will have to choose" whether to leave the child in Minnesota or sacrifice instead what she believes is a worthy plan to move to New York, where her husband lives and works. This, the court acknowledged, was "a very unfortunate situation" and one "that impacts or will impact [appellant]" but does not "impact[] [I.G.]."
We conclude that the foregoing district court analysis is contrary to the essential character of Minnesota's statutes and case law, which protects the child's best interests by guarding his established relationship with a custodial parent, a matter addressed in the first issue and note 5 of this opinion. For over one hundred years, it has been the "cardinal principle" of Minnesota custody law that the child's best interest is the paramount consideration. State ex rel. Flint v. Flint, 63 Minn. 187, 189 n. 2, 65 N.W. 272, 273 (1895) (first observing that the child's best interests rise above the interests of the parent, even where the parent's interest is recognized by statute); see In re Custody of N.A.K, 649 N.W.2d 166, 176 (Minn.2002); Dailey v. Chermak, 709 N.W.2d 626, 630 (Minn.App.2006), review denied (Minn. May 16, 2006).
Arguing that the district court's analysis improperly disregards vital elements of the child's best interests, appellant first addresses her interpretation of Minn.Stat. § 518.18(d) (2004), utilized by the district court, which provides that a court "shall not modify a prior custody order" without a finding that a change has occurred in the circumstances of the child "or the parties." Minn.Stat. § 518.18(d) (2004).
Appellant correctly observes that the change-of-custody statute requires the district court to address facts constituting a change in the circumstances of the parties when such change is relevant to the need for a change in custody to serve the child's best interests. But on remand, appellant's reasons for the proposed move will be advanced under the statutory mandate to determine the child's best interests by considering, among other things, Minn. Stat. § 518.175, subds. 3(b)(6), (7) (2006), which direct the district court to consider the reasons each parent "seek[s] or oppos[es] the relocation" and whether relocation "will enhance the general quality of the life" for the child and his mother. Id.
Under Auge, the district court's study of the custodian's reasons for relocation was replaced by a presumption that removal should occur. Because this presumption was eliminated by statute, the need for attention to the custodian's reasons for relocation is resurrected, a conclusion put beyond question by the legislature's express inclusion of this topic among those the court must address.
*757 And standards contained in the revised Minn.Stat. § 518.175 coincide with the supreme court's reference to authorities in Auge.
The custodial parent, who bears the essential burden and responsibility for the child[], is clearly entitled to the same option to seek a better life for herself and the child[], particularly where the exercise of that option appears to be truly advantageous to their interests and provided that the parental interest can continue to be accommodated, even if by a different visitation arrangement than theretofore.
Auge, 334 N.W.2d at 398 (quoting D'Onofrio v. D'Onofrio, 144 N.J.Super. 200, 365 A.2d 27, 30 (1976)). Consistently, the Auge court instructs that "the motion requesting an order granting permission to remove the child to another state must include a statement of the reasons for the request and a designation of the geographic location of the proposed residence." Id. at 397.[7]
Under the relevant statutes, appellant correctly asserts her right to have the district court determine the worthiness of her proposed move. In the eyes of the legislature, appellant's reasons for moving impact the best interests of the child. See Minn.Stat. §§ 518.175, 518.18(d) (2006).
Separation
In addition, when denying a proposed move changes the child's sole custodian, Minn.Stat. § 518.18(d), which does not have the effect of limiting the sole custodian's request to remove the child, may limit this custody change. Auge, 334 N.W.2d at 396-97, 399. Characterizing Minn.Stat. § 518.18(d), materially unchanged between its decision and this case, the Auge court noted:
The statute is undoubtedly based in part upon the principle that interruption of the parent-child relationship may be seriously detrimental to the child's psychological developmenta principle which should apply with equal or greater force when the child has already been separated from one parent at the time of a dissolution.
Auge, 334 N.W.2d at 396 n. 3.
The custodial parent's need to move prompts the requirement that the district court address added factors if it decides to deny removal of a child. Primary among these requirements is the supreme court's determination that "[i]f denial of the motion will likely result in a modification of custody, the [district] court must consider the negative effects of separating the child and the [primary caretaker]." Id. at 399. Because the district court accepted the possibility that appellant, in the face of an order denying her motion to remove the child's residence from Minnesota, may move without the child, it is prudent for the court to consider, in the interests of the child, the impact on the child of what would functionally be a modification of custody. For the reasons discussed below, we direct the court to do so on remand.
Auge is frequently invoked for its "removal presumption," a topic now shaped by Minn.Stat. § 518.175, subd. 3(c), which identifies the burden of proof for removal motions. But when the district court denies a proposal to remove that prompts a change in the physical custody of the child, *758 portions of the Auge holding remain intact. In addition to requiring consideration of the consequences of separating the child from his custodial parent, the Auge holding precludes excessive deference to the child's parenting time away from the custodial parent: "Removal may not be denied under this statute simply because the move may require an adjustment in the existing pattern of visitation. . . . Though removal should not be allowed for frivolous or spiteful reasons, neither should it be disallowed solely to maintain the existing visitation patterns." Auge, 334 N.W.2d at 397-98. The Auge court then supported this observation with the much-cited New Jersey removal standards stated in D'Onofrio:
The court should not insist that the advantages of the move be sacrificed and the opportunity for a better and more comfortable lifestyle for the mother and children be forfeited solely to maintain weekly visitation by the father where reasonable alternative visitation is available and where the advantages of the move are substantial.
Auge, 334 N.W.2d at 398 (quoting D'Onofrio, 365 A.2d at 30).[8]
In these respects, the Auge rationale and its statutory roots remain undisturbed. The supreme court in Auge declared that denial is improper without an evidentiary hearing that fully addresses the child's best interests. Id. at 399; cf. Silbaugh v. Silbaugh, 543 N.W.2d 639, 642 (Minn.1996) (permitting disposition without evidentiary hearing in event proponent fails to make a prima facie showing for relocation).
Before remand, without an evidentiary hearing record, we have no occasion to specify more particularly how Minn.Stat. § 518.18(d) is implicated by the prospect of a change in the child's primary caretaking arrangement. This court will not exercise the supreme court's prerogative to prescribe a standard to guide the district court on this question before the district court has considered the issue. See State v. Gilmartin, 535 N.W.2d 650, 653 (Minn. App.1995) ("As an intermediate appellate court, we decline to exercise supervisory powers reserved to this state's supreme court."), review denied (Minn. Sept. 20, 1995).
In Auge, the supreme court found that "denial of appellant's request for removal was in fact a modification of custody. . . ." 334 N.W.2d at 396. This analysis took place within the context of the custodian's proposed removal of the child to Hawaii, because the custodian's husband planned to be away during much of the year "to oversee . . . business interests. . . ." Id. at 395. These circumstances were more telling because the Auge appellant and her husband had two children from their marriage, in addition to the Auge child. Id. The supreme court reversed a district court order that found that there was no "deep business necessity" for the yearly travel and that removal was not in the child's best interests because it would disrupt his school year. Id. As previously stated, the Auge court relied on authority finding the removal option of the physical custodian particularly apt "where the exercise of that option appears to be truly advantageous to the[] interests" of this parent and the child. Id. at 398 (quoting D'Onofrio, 365 A.2d at 30).
Finally, respondent asserts that the district court's 2001 memorandum decision already contained a footnoted finding that it would be in I.G.'s best interests to be with his father if his mother moves. In its 2006 order, the district court reflected on *759 its prior statement that "a major change in [the child's] daily routine would not be consistent with his best interests as long as mother remains available to parent him in Minnesota. . . ." But the district court's 2001 statement was premised on the circumstances existing at the time of the decision; it did not, nor could it, anticipate future changes in the circumstances of the parties and the child, and the court also could not foresee the impact of any such changes on the child's best interests.
The 2001 court statement was also conclusory, made without a finding that it would be best for the child to be separated from his mother. Moreover, the 2001 footnote merely observed that it "would award sole physical custody to [respondent]" if its locale restriction were "found wanting" and affirmed the court's resolve to protect the child's Minnesota relationships and environment. On remand, the district court is instructed to consider the standards of Minn.Stat. § 518.175, subd. 3, and to determine, in light of the evidence at a hearing, the effects of current circumstances as they bear on the denial standards stated in this opinion.
Conclusion: Interplay of Reasons for Removal and Change-of-Custody Evidence
In sum, there is merit in appellant's plea that the district court erroneously declined to address the worthiness of her plan for removal of the child to New York City. An adequate reason for the proponent's plan substantially alters the case from the perspective of the child's best interests, limiting the circumstances in which removal can be denied. We are directed to no precedent, in Minnesota or elsewhere, for denial of removal without findings either denying the need for the move or determining instead that the physical custodian can move without the child without detriment to the child's best interests.
Appellant also argues that an order without these findings implicates her constitutional rights. But these rights must give way to a compelling state interest in the form of the best interests of the child, judicially determined, but are not set aside in favor of a reconciliation of parental interests without a full determination of the child's interests. See LaChapelle, 607 N.W.2d at 164 ("Minnesota's interest in protecting [the child's] best interests is compelling and justifies intrusion into [appellant's] privacy in her familial relationship with [the child.]"). Recognizing the difference between this case and LaChapelle (below), and because the rationale stated in this opinion makes it unnecessary, we decline to decide the merits of appellant's constitutional argument.
We are mindful that LaChapelle affirmed a judgment condition against removal, id. at 168, but we observe the absence of evidence or argument in that case suggesting that the moving proponent had compelling reasons for a move. Rather, the facts in LaChapelle indicated no more than the mother's "employment reasons" for her desired move and her "desire to live in rural Michigan." Id. at 157, 165. A change of custody was not implicated in the removal denial reviewed in LaChapelle, which must be examined on its facts. See Dailey v. Chermak, 709 N.W.2d 626, 630 (Minn.App.2006) (treating LaChapelle on its "unique facts"), review denied (Minn. May 6, 2006).
Child's Interest in Removal
Appellant also asserts that the district court, when assessing changes in I.G.'s circumstances, wrongfully minimized the prima facie evidence of the child's preference to relocate to New York City and the advantages of the proposed move for I.G. The district court addressed both the child's preference and the advantages appellant asserted for the child. The court *760 noted assertions that "[I.G.] is committed to living as an Orthodox Jew," "[I.G.] has frequently expressed a passion for New York City," and I.G. "wants . . . an environment that offers more opportunities for him to meet his academic potential." Still, the court found that appellant's evidence was wanting because it did not suggest I.G. wanted to move a thousand miles from his father, and because there was no showing that the child was presented with the alternatives of remaining in Minnesota or moving. Although the district court recognized that there are no opportunities for the child to attend Orthodox high school in Minnesota, it observed that the child would not reach high school for four years.
On the record, the district court noted there was no indication that I.G. made his preference known: "[Appellant is] the one who is telling me, I reread the affidavit, that this is the life that [I.G.] wants. He wants New York. He wants the school and all that. The only person I've got telling me that is [appellant] as far as the want goes."
After it examined evidence that the child feels more out of place in Minneapolis than he would in New York City, the district court further explained that the boy's religion was not a given circumstance, but a topic of appellant's choice:
The fact that [I.G.] may feel different and stigmatized is not a product of the current custodial environment. Rather, if [I.G.] is truly stigmatized by his appearance, it necessarily reflects a judgment call by [appellant] that the benefits of meeting Orthodox appearance demands outweigh the attendant stigma. If there is any harm here, it is not causally related to the physical custody environment. Instead, it is the product of a decision that is more legal than physical in nature.
In support of her case for removal, appellant explained in her initial affidavit, among other things:
[I.G.] has been enveloped in the Orthodox way of life and that way of life is taught in his Orthodox Jewish school, Torah Academy, which he has attended since he was 4 years old.
Over the years, as [I.G.] has matured and has learned more about the Jewish laws, the Torah, and practices of his faith along the Orthodox tradition, it has become a way of life for him. He accepts Orthodoxy as his path and embraces it wholeheartedly.
. . . .
[I.G.] has frequently expressed a passion for New York City, as it is the cultural center for Orthodox Judaism in the United States, if not the world. . . . As just one example of the differences between Minneapolis and New York, in New York City, [I.G.] will have the choice of fifteen different Orthodox schools to attend. In Minnesota, there is only Torah Academy, which only goes through the eighth grade. Upon graduation from eighth grade, most boys leave Minnesota to further their education in larger cities that offer advanced Jewish studies. . . . Many leave before they finish the eighth grade. . . . There are only [seven] boys remaining in [I.G.]'s class, and most of those that remain are not at [I.G.]'s academic level.
There is merit in appellant's suggestion that her affidavits establish prima facie proof on questions of the child's preference and interests in a move. The child was five and one-half years old when the district court examined his circumstances in 2001. He has spent the intervening time in the sole physical custody of appellant. Although the district court never established the legal custody of the child, it is undisputed that appellant, the physical *761 custodian, was permitted by the court to shape the child's religious life. The child's religion is now a prominent consideration in shaping his best interests. See Minn. Stat. § 518.17, subd. 1(a)(10) (2004) (providing that religious considerations are part of a best interests analysis); Johnson v. Johnson, 424 N.W.2d 85, 88-89 (Minn. App.1988) (finding that the district court erred by failing to consider the parties' ability to raise the children in the Catholic faith).
Relating to the child's desire to move from Minnesota, I.G. has likely reached an age at which he has the ability to appreciate the distance between Minnesota and New York City. Appellant's affidavits state a prima facie case of his preference to move. She is entitled to a determination of the child's best interests at a hearing in which the court must examine the needs and the preferences of the child as well as the impact of the proposed change, including enhancements to I.G.'s general quality of life. Minn.Stat. § 518.175, subd. 3.
Other Factors
Appellant addresses a number of additional factors to support her argument that the district court erred in denying an evidentiary hearing. Our review of these factors, as they relate to the district court's application of Minn.Stat. § 518.18(d), is not necessary or valuable for purposes of remand proceedings, which are to be conducted according to the standards of Minn.Stat. § 518.175.
3.
Finally, appellant asserts that the district court demonstrated bias against her by selectively relying on facts favoring respondent while disfavoring her and by wrongfully minimizing her religious considerations. Appellant seeks removal of the district court judge and requests a remand "to Ramsey [County] or any other adjoining county."
All motions for removal of a judge, referee, or judicial officer, on the basis of actual prejudice or bias shall be heard in the first instance by the judge sought to be removed. If that judge denies the motion, it may subsequently be heard and reconsidered by the Chief Judge of the district or another judge designated by the Chief Judge.
Minn. R. Gen. Pract. 106. Because appellant has not brought a motion for removal to the judge she seeks to remove, we decline to address the merits of this argument. Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988).
DECISION
Minn.Stat. § 518.175, subd. 3 (2006), governs a custodial parent's request to remove a child from the state, even if the case involves a removal restriction. Because the district court erred by applying Minn.Stat. § 518.18(d) (2004), we reverse and remand for the court's consideration of the child's best interests, consistent with the appropriate standards as addressed in this opinion.
Reversed and remanded.
NOTES
[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
[1] Minn.Stat. § 518.175 (2004) and Minn.Stat. § 518.18 (2004) were both amended by 2006 legislation that became effective on August 1, 2006. 2006 Minn. Laws ch. 280 §§ 13 & 14 (amending statutes); 2006 Minn. Laws ch. 280 §§ 44, 45 (reciting effective dates for various portions of 2006 Minn. Laws ch. 280, but not mentioning an effective date for §§ 13, 14); Minn.Stat. § 645.02 (2004) (stating effective date for legislative acts is August 1 after enactment unless a different date is specified). Because the Minnesota Revisor of Statutes has not yet published the 2006 version of statutes, for ease of reference we cite the amended statutes as the 2006 Minnesota Session laws indicate they will be codified at Minn.Stat. § 518.175 (2006) and Minn.Stat. § 518.18 (2006).
[2] Specifically, appellant claims that the restriction "does not properly identify findings of fact vis-à-vis conclusions of law supporting the basis for the order. . . ." We note that appellant failed to make this validity argument to the district court. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988) (permitting appellate courts to decline considering issues that a party failed to raise with the district court). In any event, we find sufficient certainty in the court's judgment and memorandum to establish a child-residence demand.
[3] As relevant to this opinion, the legislature did not amend Minn.Stat. § 518.175 from the time Auge was decided until 2006. Therefore, courts continued to apply the Auge holdings. See, e.g., Rutz v. Rutz, 644 N.W.2d 489, 494 (Minn.App.2002), review denied (Minn. July 16, 2002).
[4] The district court and the parties on appeal discussed an unpublished decision of this court determining that the time limits of Minn.Stat. § 518.18(a), (c) governed a motion to change restrictions on removal of a child from Minnesota. This court's unpublished decisions lack precedential value. Minn.Stat. § 480A.08, subd. 3 (2004). And the analysis in the immediate opinion is confined to employment of the standards of Minn.Stat. § 518.18(d) and is not intended to comment in respect to whether section 518.18(a), (c) affect a removal restriction.
[5] Historically, the focus of Minnesota's custody law has been to protect the stability of the relationship between a child and that child's primary parent. See, e.g., Larson v. Dunn, 460 N.W.2d 39, 49 (Minn.1990) (Popovich, J., dissenting) (noting limitations on custody modification created by Minn.Stat. § 518.18 are a legislative acknowledgment "[of] the importance of maintaining a consistent and stable custody situation"); Sefkow v. Sefkow, 427 N.W.2d 203, 212 (Minn.1988) (recognizing that Pikula v. Pikula, 374 N.W.2d 705, 711 n. 1 (Minn.1985) both noted "four of the nine [best-interests] criteria [of Minn.Stat. § 518.17, subd. 1] rest on the centrality of continuity of care and environment" and "emphasized the importance of stability in custody determinations"); Auge, 334 N.W.2d at 399 (quotation omitted) (stating courts should restrict their interference in familial decisions because "continuity and stability in relationships are important for the child"); Geibe v. Geibe, 571 N.W.2d 774, 780 (Minn. App.1997) ("Minnesota law rests on a presumption that stability of custody is in a child's best interests."). Commentators refer to this relationship in terms of "[a]ttachment theory[,]" and continue to forcefully confirm the importance to the child of maintaining the stability of that relationship. See Carol S. Bruch, Sound Research or Wishful Thinking in Child Custody Cases? Lessons from Relocation Law, 40 Fam. L.Q. 281, 285 (2006).
As the supreme court found when approaching the Auge case, attachment-theory literature and statutes support "maintaining the child's household composition in relocation cases." Id. at 286; see id. at 313 (concluding that a "child-centered inquiry" inescapably takes into account that "children's access to each parent will change over time" and that removal restrictions may fail to provide child-centered results). See also Auge, 334 N.W.2d at 396 n. 3 (explaining that the modification statute has evident roots in the attachment principle "that interruption of the parent-child relationship may be seriously detrimental to the child's psychological development"; and citing then-current literature on research and thought advancing the attachment principle); Pikula, 374 N.W.2d at 711 (stating similar history of statutory best-interest factors; citing the same and additional publications).
Professor Bruch's recent article reviews the empirical basis for giving the protection of a child's relationship with the child's primary parent significantly disproportionate importance when addressing custody questions; citing multiple authorities, she notes both that "attachment theory" is "broadly accepted in child development[,]" and that "there is a broad consensus that the central importance of the primary relationship has been convincingly demonstrated, while no similar support has been found for the visiting relationship." Bruch, supra at 285, 293. In arriving at this conclusion, she reviews a substantial body of statistical evidence indicating that the "more effectively custodial parents can function, the better will be their children's adjustment," and that "the quality of the relationship between the nonresidential parent and child rather than sheer frequency of visitation . . . is most important." Id. at 290-91 (quotations omitted); see id. at 288-93. She then explains that conflicting views, some of which she acknowledges may be "deceptively appealing," are premised on "wishful thinking" rather than empirical evidence. Id. at 285, 293, 297, 306. In systematically critiquing the arguments for not giving significantly disproportionate importance to maintaining a child's relationship with his or her custodial parent, Bruch notes that these arguments are based on "broad generalizations" and "distortion" of the relevant empirical data, the "spin" of "political agenda[s]" focused on something other than a child's best interests, or are designed to be the stuff of "legal journals[,]" where the statistical and empirical data allegedly supporting the argument for diminishing the importance of the stability of child's relationship with his or her primary parent will not be reviewed as rigorously as would be the case if the same argument and data were presented in a "scientific [journal]." See id. at 295-312. Stating that some arguments for diminishing the significantly disproportionate weight to be given a child's relationship with his or her primary parent are simply "disingenuous" and endanger children, Bruch cites literature plainly stating that serving a child's best interests may not be "synonymous with fairness to both parents." Id. at 285, 396 n. 62. She ultimately concludes: "Too often the basic, scientifically sound goal of maintaining stability and continuity for children in their primary relationship is forgotten, as attention turns to satisfying the desire of a noncustodial parent to restructure the parent-child relationship." Id. at 311; cf. In re Welfare of J.J.B., 390 N.W.2d 274, 280 (Minn.1986) (stating, in context of a termination-of-parental-rights case, that in a conflict between the child's interests and the parent's interests, "parental rights must yield to the best interest of the child").
[6] We are reviewing a case in which the judgment establishes a sole custodial circumstance for appellant. Nothing determined in this case governs circumstances where a change interferes with a substantial pattern of caretaking by the other parent. See Lutzi, 485 N.W.2d at 315.
[7] We observed earlier the continued impact of Auge in its finding that Minnesota's statutory scheme protects the relationship of a child with his or her primary physical custodian. And see supra note 5 (reviewing continued prevalence of literature ratifying the Auge rationale). These considerations bear again on the portion of Auge valuing the moving plans of the custodial parent.
[8] This again constitutes an aspect of Auge, together with the rationale underlying it that has continued vitality. See supra notes 5 and 7. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1407738/ | 658 S.E.2d 300 (2008)
STATE of North Carolina
v.
KARSHIA BLIAMY LY and
Jeffrey Xiong.
No. COA07-578.
Court of Appeals of North Carolina.
April 1, 2008.
Attorney General Roy Cooper, by Assistant Attorney Generals Creecy Chandler Johnson and Harriet F. Worley, for the State.
Gilda C. Rodriguez, Durham, for defendant-appellant Karshia Bliamy Ly.
Appellate Defender Staples S. Hughes, by Assistant Appellate Defender Daniel R. Pollitt, for defendant-appellant Jeffrey Xiong.
BRYANT, Judge.
Karshia Bliamy Ly and Jeffrey Xiong (defendants) appeal from judgments dated 8 May 2000 and entered consistent with jury verdicts finding defendants guilty of two counts each of robbery with a firearm, five counts each of first-degree kidnapping, and one count each of felonious breaking and entering. We find no error.
Facts & Procedural History
On 1 April 1999, at approximately 5:30 p.m., Nhia Ly arrived at 1477 Hilltop Street in Albermarle, North Carolina where he resided with his parents, Kia and Xang Ly, and his wife and his two children. Nhia noticed nothing unusual when he approached the sliding glass door entrance to the house. However, after entering the house, as he walked towards the kitchen, Nhia was accosted by four unmasked males. One of the males pointed a gun in his face while the others shouted obscenities at him and ordered him to get down on the floor and "shut up." Once Nhia was on the floor, the assailants turned his head to the right, blindfolded him, and tied his hands behind his back. The assailants asked Nhia where his mother, wife and children were, then dragged him into the bathroom. While still bound and detained in the bathroom, Nhia overheard his father's truck pull into the driveway, his father enter the house, and the assailants restrain and bind him. Over the next five to ten minutes Nhia also overheard his mother, his sister-in-law, and his brother enter the house and the assailants attack and restrain each person.
The State also presented the testimony of Xang Ly, Nhia's father. Xang Ly testified he entered the Hilltop Street house through the front door at approximately 5:45 p.m. carrying a black bag containing currency in the amount of $8,000.00. Xang Ly testified that defendant Ly approached with a gun pointed towards him. Two other men came from behind defendant Ly, took the black bag, pushed Xang Ly, tied his hands behind his back, and blindfolded him. Xang Ly identified defendant Ly as one of the assailants and testified he recognized defendant Ly because defendant Ly's family were tenants in one of his rental properties. The State also presented the testimonies of Kia Ly, Nou Ly, and Pheng Ly. Each witness testified to substantially the same facts as Nhia Ly and Xang Ly.
On 2 August 1999, defendant Ly was indicted on one count of breaking and entering, two counts of robbery with a dangerous weapon, and five counts of first-degree kidnapping. On 13 September 1999, defendant Xiong was indicted on one count of breaking and entering, two counts of robbery with a dangerous weapon, and five counts of first-degree kidnapping. Defendants' cases were joined and came on for trial on 1 May 2000. On 5 May 2000, a jury returned a verdict finding both defendants guilty of one count of breaking and entering, two counts of robbery with a dangerous weapon, and five counts of first-degree kidnapping. In a judgment dated 5 May 2000, the trial court sentenced each defendant to two consecutive terms of 64 to 86 months imprisonment followed by two consecutive terms of 73 to 94 months imprisonment. Defendants appeal.
Defendants jointly raise four issues: (I) whether there is sufficient evidence of restraint apart from that inherent in the offense of robbery with a dangerous weapon to support the kidnapping convictions; (II) whether there was sufficient evidence that the victims were not released in a safe place to support the first-degree kidnapping convictions; (III) whether the indictments of breaking and entering were fatally defective because they did not sufficiently allege the identity and location of the building; and *304 (IV) whether the breaking and entering convictions must be vacated because there is insufficient evidence that defendants intended to commit a felony at the time of the entry. In addition, defendant Xiong raises two separate issues: (I) whether the trial court erred by admitting hearsay evidence as corroborative testimony; and (II) whether defendant Xiong received effective assistance of counsel during the sentencing hearing. For the reasons given below, we find no error.
I & II
Defendants argue the trial court erred by denying their motions to dismiss the first-degree kidnapping charges. We disagree.
The standard of review for a motion to dismiss is, "whether there is substantial evidence (1) of each essential element of the offense charged, or of a lesser offense included therein, and (2) of defendant's being the perpetrator of such offense. If so, the motion is properly denied." State v. Barnes, 334 N.C. 67, 75, 430 S.E.2d 914, 918 (1993) (quotation and citation omitted). "When ruling on a motion to dismiss, all of the evidence should be considered in the light most favorable to the State, and the State is entitled to all reasonable inferences which may be drawn from the evidence." State v. Davis, 130 N.C.App. 675, 679, 505 S.E.2d 138, 141 (1998). "Any contradictions or discrepancies in the evidence are for the jury to resolve and do not warrant dismissal." State v. Olson, 330 N.C. 557, 564, 411 S.E.2d 592, 595 (1992).
A. Restraint of victims
Defendants argue the first-degree kidnapping charges should have been dismissed because the restraint of the victims was an inherent part of robbery with a dangerous weapon and no separate or independent restraint or removal occurred. We disagree.
First-degree kidnapping is the unlawful confinement, restraint or removal from one place to another, of any other person 16 years of age or over without the consent of such person for the purpose of facilitating the commission of any felony or facilitating flight of any person following the commission of a felony. N.C.G.S. § 14-39(a) (2007). "A person may not be convicted of kidnapping and another felony if the restraint or removal is an inherent and inevitable element of the other felony, such as robbery with a dangerous weapon." State v. Morgan, ___ N.C.App. ___, ___, 645 S.E.2d 93, 99 (2007). "The key question is whether the kidnapping charge is supported by evidence from which a jury could reasonably find that the necessary restraint for kidnapping exposed the victim to greater danger than that inherent in the armed robbery itself." State v. Beatty, 347 N.C. 555, 559, 495 S.E.2d 367, 369 (1998) (citation and quotations omitted). Our Supreme Court held in State v. Pigott, 331 N.C. 199, 415 S.E.2d 555 (1992):
all the restraint necessary and inherent to the armed robbery was exercised by threatening the victim with the gun. When defendant bound the victim's hands and feet, he exposed the victim to a greater danger than that inherent in the armed robbery itself. This action, which had the effect of increasing the victim's helplessness and vulnerability . . . constituted such additional restraint as to satisfy that element of the kidnapping crime.
Id. at 210, 415 S.E.2d at 561.
In Morgan, the defendant was convicted of two counts of both first-degree kidnapping and robbery with a dangerous weapon. Morgan, ___ N.C.App. at ___, 645 S.E.2d at 97. This Court, in upholding the defendant's kidnapping convictions, determined that the restraint was not a necessary part of the robbery because the defendant placed the victims in greater danger than that inherent in the armed robbery by binding the victims' wrists with duct tape. Id. at ___, 645 S.E.2d at 99. Likewise, in Beatty, the defendant was convicted of two counts of kidnapping. Beatty, 347 N.C. at 556, 495 S.E.2d at 368. Our Supreme Court upheld the defendant's conviction as to one of the victims because the defendant restrained that victim by binding his wrists. Id. at 559, 495 S.E.2d at 370. The Court reasoned that by binding the victim, defendant "increased the victim's helplessness and vulnerability beyond what *305 was necessary to enable him and his comrades to rob the restaurant." Id.
Here, defendants bound and blindfolded each victim as he or she entered the home, forced them to lie on the floor, and left the victims bound. In addition, one of the victims attempted to escape, but was brought back to the house at gunpoint, and was bound and blindfolded. As in Beatty and Morgan, the restraint of the victims in the present case was not necessary to effectuate the armed robbery and the victims were placed in greater danger than that inherent in the offense of robbery with a dangerous weapon. Accordingly, defendants' motions to dismiss were properly denied. This assignment of error is overruled.
B. Release in a Safe Place
Defendants argue their first-degree kidnapping convictions should be vacated because the victims were released in a safe place. We disagree.
Kidnapping is of the first-degree when "the person kidnapped either was not released by the defendant in a safe place or had been seriously injured or sexually assaulted[.]" N.C. Gen.Stat. § 14-39(b) (2007). Releasing a person in a safe place "implies a conscious, willful action on the part of the defendant to assure that his victim is released in a place of safety." State v. Jerrett, 309 N.C. 239, 262, 307 S.E.2d 339, 351 (1983). Mere relinquishment of dominion or control over the person is not sufficient to effectuate a release in a safe place. State v. Love, 177 N.C.App. 614, 625, 630 S.E.2d 234, 242 (2006).
In Love, the defendants were convicted of four counts of first-degree kidnapping. Like defendants in the present case, the defendants in Love contended that their victims were released in a safe place because the victims were left bound in their own home. This Court held that "the mere departing of a premise" was not an affirmative action sufficient to effectuate a release in a safe place. Id. at 626, 630 S.E.2d at 242. Similarly, in Morgan, the defendant left the victims restrained by duct tape in their hotel room after the defendant stole the victims' cash and cell phones. This Court, in upholding the defendant's first-degree kidnapping conviction, reasoned there was no "affirmative or wilful action on the part of defendants to `release' the victims." Morgan, ___ N.C.App. at ___, 645 S.E.2d at 100.
As in Love and Morgan, defendants in the present case committed no affirmative or wilful act to release the victims in a safe place. Defendants departed the premises leaving the victims bound, blindfolded, and without access to a telephone. Without any action on either defendant's part to release the victims in a safe place, there was sufficient evidence to submit a charge of first-degree kidnapping to the jury. Therefore, the trial court did not err by denying defendants' motions to dismiss the first-degree kidnapping charges and defendants' convictions stand. Accordingly, this assignment of error is overruled.
III
Defendants argue their breaking and entering judgments should be vacated because the indictments failed to sufficiently allege the location and the identity of the building entered. We disagree.
An indictment alleging breaking and entering of a building under N.C. Gen.Stat. § 14-54 must describe the building to show that it is within the language of the statute and to identify it with reasonable particularity "so as to enable the defendant to prepare his defense and plead his conviction or acquittal as a bar to further prosecution for the same offense." State v. Sellers, 273 N.C. 641, 650, 161 S.E.2d 15, 21 (1968).
In the present case, both indictments allege defendants broke and entered "a building occupied by Xang Ly used as a dwelling house located at Albermarle, North Carolina[.]" (emphasis added). Defendants argue the indictments failed to sufficiently identify the building because Xang Ly owned six buildings used as dwelling houses and the indictments do not specify which building defendants broke and entered. Defendants base their argument on State v. Smith, 267 N.C. 755, 148 S.E.2d 844 (1966), where our Supreme Court vacated a conviction of breaking and entering because the indictment *306 alleged the defendant broke and entered a building occupied by the Chatham County Board of Education but did not specify the particular building. Id. at 756, 148 S.E.2d at 845. Smith is distinguishable from the present case.
In the case before us, the indictments identified the particular building defendants allegedly broke and entered as "a building occupied by Xang Ly used as a dwelling." Unlike the indictment in Smith, the description of the building in the present case specifically identified the building as a building which Xang Ly used as a dwelling. Although the evidence at trial tended to show that Xang Ly owned several buildings, including six rental houses, the evidence also showed there was only one building where Xang Ly actually livedthe 1147 Hilltop Street residence. Therefore, we hold the indictments where sufficient to reasonably identify the building as required by N.C.G.S. § 14-54. Accordingly, the trial court did not err in denying defendants' motions to dismiss. This assignment of error is overruled.
IV
Defendants argue the trial court erred by denying their motions to dismiss the breaking and entering charges because the State failed to present sufficient evidence that defendants intended to commit robbery with a dangerous weapon as alleged in the indictments. We disagree.
Breaking and entering is defined as "break[ing] or enter[ing] any building with [the] intent to commit any felony or larceny therein[.]" N.C. Gen.Stat. § 14-54(a) (2007). Although a breaking and entering indictment is not required to state the specific felony a defendant intended to commit, State v. Worsley, 336 N.C. 268, 281, 443 S.E.2d 68, 74 (1994), "when the indictment alleges an intent to commit a particular felony, the State must prove the particular felonious intent alleged," State v. Wilkinson, 344 N.C. 198, 222, 474 S.E.2d 375, 388 (1996) (citation omitted). See also State v. Silas, 360 N.C. 377, 383, 627 S.E.2d 604, 608 (2006). "An essential element of the crime is that the intent exist at the time of the breaking or entering." State v. Hill, 38 N.C.App. 75, 78, 247 S.E.2d 295, 297 (1978).
The indictments in the present case specifically allege defendants broke and entered the Ly home with the intent to commit the felony of robbery with a dangerous weapon. The elements of robbery with a dangerous weapon are: "1) the unlawful taking or attempt to take personal property from the person or in the presence of another; 2) by use or threatened use of a firearm or other dangerous weapon; 3) whereby the life of a person is endangered or threatened." State v. Wiggins, 334 N.C. 18, 35, 431 S.E.2d 755, 765 (1993). Thus, the State was required to prove defendants intended to commit robbery with a dangerous weapon at the time of the breaking and entering.
Defendants argue there was insufficient evidence of their intent to commit robbery with a dangerous weapon at the time they entered the Ly home. "Intent is an attitude or emotion of the mind and is seldom, if ever, susceptible of proof by direct evidence, it must ordinarily be proven by circumstantial evidence, i.e., by facts and circumstances from which it may be inferred." State v. Gammons, 260 N.C. 753, 756, 133 S.E.2d 649, 651 (1963). In breaking and entering cases, "[t]he intent to commit the felony must be present at the time of entrance, and this can but need not be inferred from the defendant's subsequent actions." State v. Montgomery, 341 N.C. 553, 566, 461 S.E.2d 732, 739 (1995).
Here, the evidence shows defendants entered the Ly home with the knowledge that members of the Ly family would arrive home while defendants were still inside. The evidence also shows defendants were not surprised when Nhia Ly arrived home, but were prepared for his arrival as demonstrated by the immediacy with which defendants accosted, bound and blindfolded Nhia Ly. Also, the evidence shows defendants asked Nhia Ly the location of members of his family, demonstrating that defendants were familiar with the Ly family. As each member of the Ly family arrived home, defendants were well prepared to overcome them in the same manner in which they overcame Nhia Ly. In addition, the evidence shows defendants were *307 armed with two guns when they entered the Ly home. The evidence presented was sufficient for the jury to conclude that defendants intended to commit robbery with a dangerous weapon at the time defendants entered the Ly home. Accordingly, the State met its burden of proving each element of breaking and entering including intent. Therefore, this assignment of error is overruled.
Defendant Xiong's Appeal
I
Corroborative Testimony
In addition to the issues raised jointly with defendant Ly, defendant Xiong argues he is entitled to a new trial because the trial court erroneously admitted hearsay testimony. We disagree.
Defendant Xiong specifically argues Detective Danny Bowen's testimony was erroneously admitted as corroborative testimony because it contradicted the testimony of one witness, Nhia Ly. Nhia Ly testified at trial that during an interview with Detective Bowen on 2 April 1999, he did not identify defendant Xiong as a suspect. Later, Detective Bowen testified that during the interview with the Ly family on 2 April 1999, Nhia, Pheng, and Nou Ly were the primary family members who answered his questions and that Nhia along with Pheng and Nou gave him defendant Xiong's name as a suspect. Before Detective Bowen testified about statements made by members of the Ly family during the 2 April 1999 interview, the trial court gave a limiting instruction to the jury to "only consider [Detective Bowen's] testimony for the purpose of assessing the credibility of the witnesses that have already testified, and for no other purpose."
"It is well established that a witness' prior consistent statements may be admitted to corroborate the witness' sworn trial testimony but prior statements admitted for corroborative purposes may not be used as substantive evidence." State v. Gell, 351 N.C. 192, 204, 524 S.E.2d 332, 340 (2000). "However, the State may not introduce as corroboration prior statements that actually, directly contradict trial testimony." Id.
Here, Detective Bowen's testimony was admitted as corroborative testimony. Detective Bowen's testimony was not elicited to corroborate one particular family member's testimony, but was intended to corroborate the testimonies given by Nhia, Pheng and Nou. Although Nhia Ly testified at trial that he did not give defendant Xiong's name to Detective Bowen as a suspect on 2 April 1999, two other witnesses, Pheng Ly and Nou Ly, testified at trial that they gave defendant Xiong's name to Detective Bowen on 2 April 1999. Given the trial court's limiting instruction and the testimonies by Pheng Ly and Nou Ly, Detective Bowen's corroborative testimony regarding the 2 April 1999 interview with members of the Ly family was properly admitted. Accordingly, this assignment of error is overruled.
II
Sentencing Hearing
Defendant Xiong argues he is entitled to a new sentencing hearing because he did not receive effective assistance of counsel at the sentencing hearing. We disagree.
Defendant Xiong's counsel stated the following during the sentencing hearing:
[Defense Counsel]: Your Honor, I've known some years this day would come, a hesitant prize fighter that's come into the ring one too many times, a lesson to be learned. And I'll have the weekend to reexamine what I'm to do in the future.
The Court: All right. Do you want to be heard on behalf of your client?
[Defense Counsel]: No, Your Honor, I do not.
"To prevail on a claim of ineffective assistance of counsel, a defendant must first show that his counsel's performance was deficient and then that counsel's deficient performance prejudiced his defense." State v. Allen, 360 N.C. 297, 316, 626 S.E.2d 271, 286 (2006) (quoting Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674, 693 (1984)), writ of cert. denied, ___ U.S. ___, 127 S. Ct. 164, 166 L. Ed. 2d 116 (2006). "Generally, `to establish prejudice, a defendant must show that there is a reasonable probability that, but for counsel's *308 unprofessional errors, the result of the proceeding would have been different.'" Id. (quoting Wiggins v. Smith, 539 U.S. 510, 534, 123 S. Ct. 2527, 2542, 156 L. Ed. 2d 471, 493 (2003)). "A reasonable probability is a probability sufficient to undermine confidence in the outcome." Id. (quotation omitted).
In State v. Taylor, 79 N.C.App. 635, 339 S.E.2d 859 (1986), the defense counsel refrained from speaking or presenting evidence during the sentencing hearing. This Court determined the defense counsel's decision, although "troublesome," did not "constitute[] deficient performance prejudicial to the defendant." Id. at 637, 339 S.E.2d at 861. The defense counsel's decision to remain silent was "`strategy and trial tactics' properly left within the control of counsel." Id. at 638, 339 S.E.2d at 861.
Here, as in Taylor, defense counsel refrained from speaking or presenting evidence during defendant Xiong's sentencing hearing. Unlike the case of State v. Davidson, 77 N.C.App. 540, 335 S.E.2d 518 (1985), relied on by defendant Xiong, where the defense counsel not only refused to present evidence during the sentencing hearing but also made negative statements regarding the defendant, the statements made by defense counsel in the present case were not concerning defendant Xiong and did not prejudice him. Therefore, we are constrained to hold that defendant Xiong has not demonstrated that his counsel's performance was deficient or that he was prejudiced by said performance. Accordingly, this assignment of error is overruled.
Defendants' remaining assignments of error are deemed abandoned pursuant to N.C. R.App. P. 28(b)(6) (2007) because defendants have failed to make any argument in support thereof.
NO ERROR.
Judge ELMORE concurs.
Judge WYNN concurs in a separate opinion.
WYNN, Judge, concurring in result only.
I concur with the majority opinion's holding that, under our previous precedents, we must affirm Defendants' convictions for first-degree kidnapping and other charges. I write separately to point out that our recent case law fails to make any distinction between the crimes of first-degree kidnapping and robbery with a dangerous weapon in the context of armed home invasions.
As our Supreme Court articulated in State v. Fulcher,
It is self-evident that certain felonies (e.g., forcible rape and armed robbery) cannot be committed without some restraint of the victim. We are of the opinion, and so hold, that G.S. 14-39 was not intended by the Legislature to make a restraint, which is an inherent, inevitable feature of such other felony, also kidnapping so as to permit the conviction and punishment of the defendant for both crimes. To hold otherwise would violate the constitutional prohibition against double jeopardy. Pursuant to the above mentioned principle of statutory construction, we construe the word "restrain," as used in G.S. 14-39, to connote a restraint separate and apart from that which is inherent in the commission of the other felony.
294 N.C. 503, 523, 243 S.E.2d 338, 351 (1978). In applying the test laid out in Fulcher, the Supreme Court further clarified,
The key question here is whether the kidnapping charge is supported by evidence from which a jury could reasonably find that the necessary restraint for kidnapping "exposed [the victim] to greater danger than that inherent in the armed robbery itself, . . . [or] is . . . subjected to the kind of danger and abuse the kidnapping statute was designed to prevent."
State v. Pigott, 331 N.C. 199, 210, 415 S.E.2d 555, 561 (1992) (emphasis added) (quoting State v. Irwin, 304 N.C. 93, 103, 282 S.E.2d 439, 446 (1981)). Thus, when faced with the type of armed-home invasion that occurred in the instant case, the critical issue is whether the restraint used by the defendants placed the victims in "greater danger" or subjected the victims to a particular "danger and abuse" aside from that which is inherent in robbery with a dangerous weapon.
*309 In State v. Beatty, our Supreme Court found that "the binding and kicking [of the victim] were not inherent, inevitable parts of the robbery" and exposed the victim to a greater degree of danger than which is inherent in an armed robbery. 347 N.C. 555, 559, 495 S.E.2d 367, 368 (1998) (emphasis added). Likewise, in Pigott, the binding of the victim's hands and feet, "rendering him utterly helpless," was held to "constitute[] such additional restraint as to satisfy that element of the kidnapping crime." 331 N.C. at 210, 415 S.E.2d at 561. However, the victim in Pigott was also shot in the head while bound, and was found to have died either from the gunshot wound or from smoke inhalation from the fire that the defendant subsequently set to the building. Id. at 202, 415 S.E.2d at 557.
In the instant case, this Court is bound by our prior holding in State v. Morgan, ___ N.C.App. ___, 645 S.E.2d 93 (2007). See In re Appeal from Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989) ("Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court."). In Morgan, this Court held that simply binding the victims, even in the absence of other physical violence, was sufficient to sustain a charge of first-degree kidnapping. ___ N.C.App. at ___, 645 S.E.2d at 99-100. Thus, on the question of restraint, this Court has extended the holdings of our Supreme Court to the point wherein any binding of the victims in an armed home invasion or robbery will constitute restraint sufficient to sustain a charge of kidnapping. I note the subsequent incongruity of outcomes in a case such as this, in which the victims were loosely bound and physically unharmed, but the defendants are nonetheless guilty of first-degree kidnapping, and a case such as State v. Wade, in which we vacated the charge of second-degree kidnapping because the dragging and severe beating of the victimbut without binding his hands or feetwas held to be "an inherent and integral part of either the robbery with a dangerous weapon or the assault." 181 N.C.App. 295, 302, 639 S.E.2d 82, 88 (2007). This incongruence needs resolution by our Supreme Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1317694/ | 216 S.C. 456 (1950)
58 S.E.2d 734
MOORER
v.
DOWLING ET AL.
16335
Supreme Court of South Carolina.
April 4, 1950.
*457 Messrs. Felder, Rosen & Horger, of Orangeburg, and J.H. Behling, of St. George, for Appellants.
*458 Mr. J.D. Parler, of St. George, for Respondent.
April 4, 1950.
TAYLOR, Justice.
This appeal comes from the Court of Common Pleas of Dorchester County, where action was commenced by respondent for damages alleged to have been sustained by reason of a collision between respondent's Ford truck and a large van in or near the Town of St. George, South Carolina.
The defendants set up as their defense first, a general denial; second, contributory negligence, willfulness, recklessness and carelessness on the part of respondent; and third, that if any damages were sustained, they were not due to the proximate cause of any negligence on the part of the defendants.
Seasonable motion on the part of the defendant for a directed verdict was overruled and the case submitted to the jury who found a verdict for the plaintiff in the sum of $2,000.00.
*459 The appellants thereafter moved for judgment non obstante veredicto based upon the same grounds as their motion for a directed verdict; failing in that, for a new trial or order nisi on the grounds that the verdict was excessive, all of which were refused.
A reading of the testimony discloses that there is evidence that respondent's truck at the time of the collision was traveling north on U.S. Highway No. 15 with appellants' pickup truck approaching from the opposite direction at an excessive rate of speed, towing another truck. There is evidence that it was or had been raining and that the road was wet. Respondent's truck was following two large vans, trailing the rear one at a distance of approximately 75 feet. Appellants' truck skidded across the center line in front of the first van, then returned to the right side of the road and skidded again in front of the second van, causing the driver to apply his brakes which, according to respondent, caused him to crash into the rear of the van.
It is a well-settled rule of law that when a motion is made by a defendant for a directed verdict, the evidence must be considered most favorable to the plaintiff in determining whether or not the motion should be granted, and if more than one inference can reasonably be drawn therefrom, it is the duty of the Trial Judge to submit the case to the jury. Cox v. McGraham, 211 S.C. 378, 45 S.E. (2d) 595; Crews v. Sweet, 125 S.C. 303, 118 S.E. 613, 29 A.L.R. 43; Ford v. Atlantic Coast Line R. Co., 169 S.C. 41, 168 S.E. 143; Lower Main Street Bank v. Caledonian Insurance Co., 135 S.C. 155, 133 S.E. 553; Lynch v. Pee Dee Express, 204 S.C. 537, 30 S.E. (2d) 449.
Not only should consideration of the facts be submitted to the jury when they are in dispute, but the jury must also pass on the questions of inference to be drawn from such facts after they have been determined. Anderson v. Hampton & Branchville R. & Lumber Co., *460 134 S.C. 185, 132 S.E. 47; Waring v. South Carolina Power Co., 177 S.C. 295, 181 S.E. 1.
Under the scintilla rule which prevails in South Carolina, if there is a scintilla of evidence, which is any material evidence that, if true, would tend to establish the issue in the mind of a reasonable juror, the case should be submitted to the jury for its determination. Marks v. Industrial Life & Health Insurance Co., 212 S.C. 502, 48 S.E. (2d) 445; Taylor v. Atlantic Coast Line R. Co., 78 S.C. 552, 59 S.E. 641; Bushardt v. United Investment Co., 121 S.C. 324, 113 S.E. 637, 35 A.L.R. 637; Turner v. American Motorists Insurance Co., 176 S.C. 260, 180 S.E. 55; Crawford v. Town of Winnsboro, 205 S.C. 72, 30 S.E. (2d) 841; Radcliffe v. Southern Aviation School, 209 S.C. 411, 40 S.E. (2d) 626.
Appellants contend that respondent was guilty of contributory negligence as a matter of law in following the van at a distance of 75 feet. Section 1616 (12), 1942 Code of Laws for South Carolina, provides as follows:
"Section 1616 (12) Following too closely. (a) The driver of a motor vehicle shall not follow another vehicle more closely than is reasonable and prudent, having due regard for the speed of such vehicle and traffic upon and the condition of the highway.
"(b) The driver of any motor truck or motor truck drawing another vehicle when traveling upon a roadway outside of a business or residence district shall not follow within 150 feet of another motor truck or motor truck drawing another vehicle, and the driver of any motor truck traveling in convoy of two or more such motor trucks shall not follow within 500 feet of any other motor truck in the said convoy. This requirement shall not be construed to prevent overtaking and passing nor shall the same apply upon any lane specially designated for use by motor trucks."
The testimony is conflicting as to whether the accident occurred within or without the town limits and being so, it *461 becomes a question for the jury to determine whether subsection (a) or (b) applies in this case.
If the inferences properly deducible from the evidence are doubtful or if they tend to show both parties guilty of negligence or willfullness, and there may be a fair difference of opinion as to whose act produced the injury complained of as a direct and proximate cause, then the question must be submitted to the jury. Harrison v. Atlantic Coast Line R. Co., 196 S.C. 259, 13 S.E. (2d) 137.
"It is impossible to lay down any hard and fast rule by which it may be determined whether or not the question of contributory negligence is to be found, under the evidence, as a conclusion of law or be submitted to the Jury as a question of fact. The determination of such a question must necessarily be controlled by the facts and the circumstances of each particular case as shown by the evidence. If the testimony be conflicting or the conclusions reached therefrom be doubtful or uncertain, the Courts will not decide this question as one of law but it then becomes a question of fact for the Jury. If, however, it appears there was such negligence * * * proximately entering into and contributing to the accident, it is the duty of the Court to so find as a matter of law." Arnold v. Charleston & Western Carolina R. Co., 213 S.C. 413, 49 S.E. (2d) 725, 730.
For the foregoing reasons, we are of the opinion that there was sufficient evidence to require the Trial Judge to submit the case to the jury and that there was no error in refusing appellants' motion for a nonsuit and for judgment non obstante veredicto.
The learned Trial Judge charged the jury that the amount of damages to the truck was the difference in the value of the truck before the accident and its value afterwards. Respondent testified that the value of the truck immediately prior to the collision was $2,500.00; that, although he spent $700.00 for repairs as a result of the collision, the truck never performed satisfactorily and he traded it in shortly thereafter, *462 on which he was allowed $800.00. He further testified that his damages for the loss of the use of the said truck, which was used to haul logs, was approximately $40.00 per day for 11 days. The jury found for the respondent in the sum of $2,000.00.
This Court, confined by constitutional limitations to the correction of errors of law in cases of this character, has no power to review and reverse the ruling of the Circuit Judge refusing to grant a new trial upon the ground that the verdict was excessive, unless the appeal record discloses and warrants the conclusion, as a matter of law, that such refusal amounts to a manifest abuse of the discretionary power exclusively vested in him to grant a new trial on account of matters of fact. See Duncan v. Record Publishing Co., 145 S.C. 196, 143 S.E. 31; Union Bleaching & Finishing Co. v. Barker Fuel Co., 124 S.C. 458, 117 S.E. 735; Bennett v. Southern Ry. Carolina Division, 98 S.C. 42, 79 S.E. 710; Southern Ry. Carolina Division v. Benett, 233 U.S. 80, 34 S. Ct. 566, 567, 58 L. Ed. 860; Payne v. Cohen, 168 S.C. 459, 167 S.E. 665, 667; Williams v. Tolbert, 76 S.C. 211, 56 S.E. 908; Steele v. Atlantic Coast Line R. Co., 103 S.C. 102, 87 S.E. 639; Jennings v. McCowan, 215 S.C. 404, 55 S.E. (2d) 522.
The amount of the verdict is within the amount of damages testified to, and since a view most favorable to the plaintiff must be taken by the Court in determining questions of this kind, we are of the opinion that the appellants have made no showing which would warrant this Court in concluding that the jury was manifestly actuated by caprice, passion, partiality, prejudice, corruption or other improper motives. See Haselden v. Atlantic Coast Line R. Co., 214 S.C. 410, 53 S.E. (2d) 60.
This Court is of the opinion that all exceptions should be dismissed and the judgment of the Circuit Court should be affirmed, and it is so ordered.
BAKER, C.J., and FISHBURNE, STUKES and OXNER, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1213046/ | 610 P.2d 1369 (1980)
SUGARHOUSE FINANCE COMPANY, Plaintiff and Appellant,
v.
Eugene L. ANDERSON and Colleen W. Anderson, Defendants and Respondents.
No. 16462.
Supreme Court of Utah.
April 15, 1980.
*1370 Wayne G. Petty and Royal I. Hansen of Moyle & Draper, Salt Lake City, for plaintiff and appellant.
H. Ralph Klemm, Salt Lake City, for defendants and respondents.
HALL, Justice:
Plaintiff Sugarhouse Finance Company appeals the lower court's grant of a motion made by defendant Eugene L. Anderson for an order enforcing the terms of an agreement in settlement of a judgment held against him.
On July 7, 1976, plaintiff filed a complaint against defendant for nonpayment of a promissory note. Judgment thereon was rendered in favor of plaintiff on December 17, 1976, in the amount of $2,423.86, plus interest, costs, and attorneys' fees. A copy of the judgment was docketed by plaintiff in Sevier County, defendant's county of residence.
Some two years later, on January 29, 1979, plaintiff served defendant with an Order in Supplemental Proceedings, apparently due to the latter's failure during the *1371 interim to satisfy the judgment. Two days after receiving this notice, defendant met with plaintiff's president, Mr. Neuman Petty, for the purpose of discussing an alternative to full payment of the judgment. While reports conflict as to the exact content of that conversation, it is clear the defendant informed plaintiff of the existence of numerous outstanding obligations against him, including medical expenses incurred pursuant to treatment for injuries sustained in an automobile accident in 1978. Defendant initially proposed that plaintiff accept $1,500 in full settlement of the claim, which proposal was refused. Defendant then asserted that he was contemplating bankruptcy, and that such a measure would result in plaintiff's judgment being discharged. The parties finally settled on a figure of $2,200 in full satisfaction of the claim. Defendant issued Petty a check for this amount, asking him, however, not to negotiate it immediately, there being some uncertainty as to the sufficiency of funds in the account to cover it. At no time during the conversation did defendant represent to Petty that defendant had any ownership interest in real property, nor did Petty make inquiry in that regard.
The day following these negotiations, plaintiff received a telephone call from a title company. Plaintiff learned from that call, allegedly for the first time, that defendant owned part interest in a 12-acre tract in Sevier County, Utah, four acres of which were the subject of a pending sale. The property was owned jointly with another party, and was otherwise encumbered, such that defendant hoped to receive no more than $2,000 from the transaction. The title company had telephoned to request that plaintiff file a satisfaction of judgment in order to clear title to the property in question; plaintiff refused the request.
The next day, the defendant called to inform plaintiff that there were then sufficient funds in the account to cover the previously issued check. Plaintiff responded by indicating that it did not intend on going through with the settlement based on what it had learned from the title company. The check was subsequently returned to defendant.
Defendant thereafter filed a motion in the original action, asking that the court order plaintiff to comply with the terms of the agreement of settlement. Hearing on the motion was convened on March 13, 1979, at the conclusion of which the motion was granted and the plaintiff was ordered upon receipt of the $2,200 payment, to file a satisfaction of judgment with the court. It is from this order that plaintiff appeals.
Plaintiff first challenges the procedural propriety of defendant's petition for judicial redress by means of a motion in the initial action. Under plaintiff's view, defendant should be constrained to raise the alleged accord and satisfaction only as an affirmative defense to further attempts by the plaintiff to enforce the terms of the original promissory note. This contention is in error.
It is true that an assertion of accord and satisfaction is generally raised by way of affirmative defense to an action on the original agreement.[1] When so raised, it must be properly pleaded.[2] This is not to say, however, that a party to an accord and satisfaction may seek judicial benefit thereof only by means of affirmative defense. The Utah Rules of Civil Procedure[3] provide that:
On motion and upon such terms as are just, the court may in the furtherance of justice relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: ... (6) the judgment has been satisfied, released, or discharged ... or it is no longer equitable that the judgment should have prospective application; . .. . The procedure for obtaining any relief from a judgment shall be by *1372 motion as prescribed in these Rules or by an independent action.
Under this rule, a party having a good faith claim of satisfaction of judgment need not wait until the opposing party, at leisure, seeks to enforce the judgment, but may seize the initiative, and seek direct judicial sanction of the satisfaction. Defendant's assertions were, therefore, properly brought before, and dealt with by, the trial court.
Plaintiff next challenges the validity of the accord allegedly reached between the parties on the basis of adequacy of consideration. Plaintiff points out that, as defendant sought a substitute settlement of an undisputed and liquidated claim, separate and additional consideration was required to support the accord. It is plaintiff's position that no such consideration existed in the present case.
Accord and satisfaction arises where the parties to an agreement resolve that a given performance by one party thereto, offered in substitution of the performance originally agreed upon, will discharge the obligation created under the original agreement.[4] Essential to its validity are, (1) a proper subject matter; (2) competent parties; (3) an assent or meeting of the minds of the parties; and (4) a consideration given for the accord.[5] Where the underlying claim is disputed or uncertain ("unliquidated"), the obligor's assent to the definite statement of performance in the accord amounts to sufficient consideration, as it constitutes a surrender of the right to dispute the initial obligation[6] Where, however, the underlying claim is liquidated and certain as to amount, separate consideration must be found to support the accord; otherwise, the obligor binds himself to do nothing he was not already obligated to do, and the obligee's promise to accept a substitute performance is unenforceable.[7] The original obligation in the present case being of a definite and undisputed amount, the question presented is whether or not separate consideration was given to support the accord reached by the parties.
No completely satisfactory and comprehensive definition of "consideration" has ever been devised.[8] It is generally agreed, however, that where a promise is supported by the incurrence, on the part of the promisee, of a legal detriment in order to confer a benefit on the promisor, such is sufficient to serve as consideration,[9] thereby rendering the promise legally enforceable.[10] This is particularly so when an accord and satisfaction is involved, the modern trend among the courts being to uphold such agreements wherever possible.[11] In such cases, consideration is often found in the obligor's agreement to alter the means or method of payment of the obligation initially owed,[12] or to surrender the assertion of a legally enforceable right.[13]
It is to be noted that, in the present case, plaintiff held a judgment which had been outstanding for more than two years. Pursuant to the parties' conversation of January 31, 1979, defendant agreed that, *1373 for a release of the judgment upon payment of a lesser agreed amount, he would negotiate a loan with a third party to enable him to pay off the substitute obligation immediately. A check was given for the agreed amount at the conclusion of that conversation, and authorization to cash it followed two days later. In effect, defendant had agreed to transfer the debt represented by plaintiff's judgment to a third party, thereby immediately satisfying the obligation owed to plaintiff. This was something defendant had no legal obligation to do; by law, plaintiff could only move by levy of execution against property already owned by the defendant plaintiff could not legally require defendant to incur additional obligations to satisfy the judgment.[14] By so doing, defendant deliberately incurred the detriment of surrendering his right to limit plaintiff's ability to obtain satisfaction of the underlying judgment, and bestowed upon plaintiff the benefit of immediate payment by means of the incurrence of additional indebtedness. We hold such action to constitute sufficient consideration to support the accord negotiated by the parties.
We note, in addition, that this jurisdiction recognizes the doctrine of promissory estoppel, whereby an individual who has made a promise which the individual should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is estoppel to deny or repudiate the promise should the promisee or some third party suffer detriment thereby.[15] We note that, in the present case, defendant agreed to incur additional indebtedness pursuant to the terms of the accord, in reliance on plaintiff's promise to accept immediate payment of a lesser amount in full satisfaction of the underlying obligation. As such, plaintiff should now be estopped to deny or reject the promise made.
Plaintiff next asserts that, even if adequate consideration exists to support the accord entered into by the parties, that agreement is rendered voidable by reason of fraudulent inducement. It is plaintiff's assertion that, by failing to inform him of the anticipated sale of the property located in Sevier County, defendant induced plaintiff to enter into the accord. We do not concur.
Where a party enters into an agreement in reasonable reliance upon a material and fraudulent misrepresentation, the agreement thereby created is voidable.[16] A finding of fraud requires a showing of a false representation of an existing material fact, made knowingly or recklessly for the purpose of inducing reliance thereon upon which plaintiff reasonably relies to his detriment.[17] Misrepresentation may be made either by affirmative statement or by material omission, where there exists a duty to speak.[18] Such a duty will not be found where the parties deal at arm's length, and where the underlying facts are reasonably within the knowledge of both parties.[19] Under such circumstances, the plaintiff is obliged to take reasonable steps to inform himself, and to protect his own interests.[20]
In the present case, plaintiff alleges fraud both in defendant's failure to state that he owned the property in question,[21]*1374 and in his failure to disclose the proposed sale thereof.
Plaintiff's assumption that defendant owned no assets, based simply on defendant's failure to inform him to the contrary, does not constitute reasonable reliance, in light of the fact that defendant's interest in the property in question was a matter of public record. Plaintiff is a professional financing institution; it had had sufficient foresight to protect its interests by docketing the judgment in Sevier County. If indeed it failed to investigate the record at that time, in order to ascertain those holdings of defendant which might be available to satisfy the judgment, and if it further failed to make inquiry as to defendant's holdings at the time the accord was negotiated, it may not now lay its failure to protect its own interests at defendant's feet in the form of an allegation of fraud.
It is similarly clear that plaintiff did not rely to its detriment on defendant's failure to disclose that a sale of property was contemplated. The docketing of the judgment in Sevier County constituted a valid lien on all property situated in that county.[22] Hence, the transfer of any property situate within the county would be subject to the lien thereby created. Consequently, the conveyance of the property in question could work no injury to plaintiff's interests.
The trial court's decision is hereby affirmed. Costs to defendant.
CROCKETT, C.J., and MAUGHAN, WILKINS and STEWART, JJ., concur.
NOTES
[1] Hintze v. Seaich, 20 Utah 2d 275, 437 P.2d 202 (1968).
[2] See Rule 8(c), Utah Rules of Civil Procedure.
[3] Rule 60(b), Utah Rules of Civil Procedure.
[4] Cannon v. Stevens School of Business, Inc., Utah, 560 P.2d 1383 (1977).
[5] Ralph A. Badger and Co. v. Fidelity Building and Loan Ass'n, 94 Utah 97, 75 P.2d 669 (1938).
[6] Bennett v. Robinson's Medical Mart, Inc., 18 Utah 2d 186, 417 P.2d 761 (1966); Tates, Inc. v. Little America Refining Co., Utah, 535 P.2d 1228 (1975).
[7] Tates, Inc. v. Little America Refining Co., supra footnote 6; F.M.A. Financial Corp. v. Build, Inc., 17 Utah 2d 80, 404 P.2d 670 (1965).
[8] 1 Corbin on Contracts § 109, p. 487.
[9] As to whether there need be a benefit as well as a detriment to constitute consideration see Petroleum Refractionating Corp. v. Kendrick Oil Co., 65 F.2d 997 (10th Cir.1933); Restatement 1, Contracts, § 81; 1 Corbin on Contracts §§ 121, 122.
[10] Manwill v. Oyler, 11 Utah 2d 433, 361 P.2d 177 (1961).
[11] F.M.A. Financial Corp. v. Build, Inc., supra footnote 7.
[12] Tates, Inc. v. Little America Refining Co., supra footnote 6.
[13] Petroleum Refractionating Corp. v. Kendrick Oil Co., supra footnote 9.
[14] See generally Rules 64A-F, 69, Utah Rules of Civil Procedure.
[15] Restatement 1, Contracts, § 90; Baggs v. Anderson, Utah, 528 P.2d 141 (1974).
[16] See generally 12 Williston on Contracts § 1486 et seq.
[17] Schwartz v. Tanner, Utah, 576 P.2d 873 (1978); Oberg v. Sanders, 111 Utah 507, 184 P.2d 229 (1947).
[18] Elder v. Clawson, 14 Utah 2d 379, 384 P.2d 802 (1963).
[19] See 37 C.J.S. Fraud § 16b.
[20] Jardine v. Brunswick Corp., 18 Utah 2d 378, 423 P.2d 659 (1967).
[21] The parties dispute whether or not an affirmative representation that defendant had no "assets" was made. This Court, reviewing the facts in the light most favorable to the prevailing party below, will assume that no such representation was made. See Bush v. Coult, Utah, 594 P.2d 865 (1979); Rodgers v. Hansen, Utah, 580 P.2d 233 (1978).
[22] See U.C.A., 1953, 78-22-1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1490837/ | 638 F. Supp. 547 (1986)
Adlai E. STEVENSON, et al., Plaintiffs,
v.
STATE BOARD OF ELECTIONS, Defendants,
Mark Fairchild, Dominick J. Jeffrey, George M. Laurence, and Elma J. Washington, Intervenors.
No. 86 C 2800.
United States District Court, N.D. Illinois, E.D.
May 16, 1986.
*548 Kelly R. Welsh, John E. Muench, Richard W. Shepro, Rosanne J. Araci, Mayer, Brown & Platt, Chicago, Ill., for plaintiffs.
Michael J. Hayes, Roger Flahaven, James R. Carroll, Bart Murphy, Robert McFarland, Asst. Attys. Gen., Chicago, Ill., for defendants.
Russell J. Stewart, Park Ridge, Ill., for intervenors.
MEMORANDUM OPINION AND ORDER
PARSONS, District Judge.
The problem posed by this case was presented on April 23, 1986. Subject to appeal, the attention of this court to it should be completed with this ruling. It raises this question: Is the Illinois statute establishing the filing deadline for persons seeking to run as independent candidates in the general election to state and county offices in this state unconstitutional?
The principal plaintiff who brought this question to this court is the former United States Senator from Illinois, Adlai E. Stevenson. Mr. Stevenson, who unsuccessfully ran for governor of Illinois in the campaign of 1982 on the democratic ticket, began again a campaign for that office by filing his papers as a democratic nominee for governor in December of 1985. A then relatively unknown person named Mark Fairchild also filed to run for lieutenant-governor in the democratic primary. Both Mr. Stevenson and Mr. Fairchild were nominated in the primary held on April 14, 1986. Mr. Stevenson, soon thereafter, determined that he would not run on the ballot with Mr. Fairchild because of his opposition to certain political and other views he discovered to have been espoused by Mr. Fairchild. In the general election in Illinois, the party candidates for governor and lieutenant-governor are listed as a team, with each voter casting one vote for the team.
After the nomination Mr. Stevenson formally resigned his position as the selected candidate for governor on the democratic ticket. Thereafter he publicly announced *549 his desire to run for governor as an independent candidate in the November election. But under the Illinois Election Code, his filing as an independent candidate had to have been performed back in December of 1985. The Election Code provides no other filing date. This provision of the Code, he says in the instant case, discriminates against him in violation of his freedom of association under the First Amendment, and in violation of his right to equal protection of the laws (freedom from a discriminatory classification) under the Fourteenth Amendment. By this suit he seeks to avoid this provision of the election code. He seeks to be able to file as an independent candidate at this time.
The proper defendant here is the Illinois Board of Elections, the official body vested by Illinois election laws with the responsibility of administering the Illinois election laws. Mr. Stevenson has been joined as plaintiffs by two voters who believe that their rights as voters also are injured by the filing deadline in question, and he is joined also by a prospective independent candidate for Congress who had neither been nominated in the primary nor listed as an independent candidate.
The defendant Board of Elections has also been joined by the Commissioners themselves. Then by a special order of this Court entered on May 2, 1986, the democratic nominee for lieutenant-governor, Mr. Fairchild, was allowed to intervene as another defendant.
The first preliminary task of this court, as in any other case, is to determine its jurisdiction over the parties and the subject matter. The defendants all claim that this court lacks jurisdiction because of the Eleventh Amendment to the Constitution of the United States which confers, they say, immunity upon the state from suit in federal court. The Eleventh Amendment provides that:
The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state.
And this amendment has long been interpreted to mean that a state is immune from suit in federal court brought by one of its own citizens as well. Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908).
Research discloses, however, that there are many exceptions to this literal statement, and that by a long line of consistent decisions of both the Supreme Court and inferior courts, a citizen's challenge to a state statute on the grounds that it is, either on its face or in its enforcement, in violation of the Constitution of the United States is not barred by the Eleventh Amendment. Ray v. Atlantic Richfield Co., 435 U.S. 151, 98 S. Ct. 988, 55 L. Ed. 2d 179 (1978); Griffin v. City School Bd., 377 U.S. 218, 84 S. Ct. 1226, 12 L. Ed. 2d 256 (1964); Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908); Orleans Parish School Board v. Bush, 242 F.2d 156 (5th Cir.1957), cert. denied 354 U.S. 921, 77 S. Ct. 1380, 1 L. Ed. 2d 1436; Terry v. Burke, 589 F. Supp. 853 (D.C.Ill.1984). On the basis of established precedent this Court's jurisdiction in this case is not subject to an Eleventh Amendment restraint.
The second preliminary task is to determine whether Mr. Stevenson and/or his co-plaintiffs have standing to sue. This task asks whether or not a case or controversy has matured to the point where the plaintiffs have a judicially recognized right to bring the suit. The defendants in this case all suggest that the plaintiffs have no standing because they have not tendered at this late date their petitions before the board and had them rejected. But this gesture of formality is unnecessary. The duties of the board are ministerial; the language of the statute simple. The statute does not confer upon the board the power to accept the declarations of independent candidacy beyond the statutory deadline, and to require the defendant to go through the gesture of refusing the declarations for independent candidacy before the plaintiffs have the standing to raise the question of the constitutionality in *550 the first place, is to require a futile and useless act. Mr. Stevenson has been nominated in the democratic primary, he has publicly and officially resigned from that candidacy, and he has publicly announced his purpose to run as an independent candidate. Even the defendants, if true to their pledge before this Court not to delay this Court's decision, should not justly ask for anything more. Similar situations have been found sufficient to justify standing to sue. Sporhase v. Nebraska, 458 U.S. 941, 944 n. 2, 102 S. Ct. 3456, 3458 n. 2, 73 L. Ed. 2d 1254 (1982); Illinois State Bd. of Elec. Commrs. v. Socialist Workers Party, 440 U.S. 173, 99 S. Ct. 983, 59 L. Ed. 2d 230 (1979); Nyquist v. Mauclet, 432 U.S. 1, 97 S. Ct. 2120, 53 L. Ed. 2d 63 (1977); Anderson v. Hooper, 498 F. Supp. 898 (D.N.M. 1980); Jackson v. Ogilvie, 325 F. Supp. 864 (N.D.Ill.) aff'd 403 U.S. 925, 91 S. Ct. 2247, 29 L. Ed. 2d 705 (1971).
Consider now the central question presented in this case. The general problem of different requirements for different types of access to the ballot has been reviewed and is not new to judicial attention. In Williams v. Rhodes, 393 U.S. 23, 89 S. Ct. 5, 21 L. Ed. 2d 24 (1968), the Court held that Ohio's election laws relating to the establishing of new political parties, taken as a whole, violated the equal protection clause. The Court examined the restrictions on the formation of the new party in the form of the signature requirements, the filing deadline, and the lack of alternative means by which to access the ballot, to find that the election laws gave a decided advantage to the two established political parties over new parties. Together these restrictions rendered ballot access a virtual impossibility for newly-created parties. Even in so holding, however, the Court noted that the State does have an interest in attempting to see that the winner of an election should represent the choice of the majority of voters. The Ohio restrictions challenged in Williams were unconstitutional.
In Bullock v. Carter, 405 U.S. 134, 92 S. Ct. 849, 31 L. Ed. 2d 92 (1972), the Court struck down a Texas law that required candidates in political primaries to pay filing fees ranging as high as $8,900.00. The Court reasoned that the system used a criterion of ability to pay as a condition precedent for securing a place on the ballot. The Court found that the filing fees excluded legitimate as well as frivolous candidates, but at the same time stressed that the state's legitimate interest in promoting efficiency in the election process, in avoiding voter confusion, and in assuring that the person elected represent a strong plurality, if not majority of the voters, must be respected. Id. at 145, 92 S.Ct. at 856.
Still earlier, in Jenness v. Fortson, 403 U.S. 431, 91 S. Ct. 1970, 29 L. Ed. 2d 554 (1971), the Court upheld the requirement that an independent candidate demonstrate substantial support by acquiring a certain minimum number of signatures to garner a place on the ballot, while the candidate for the party primary in Jenness did not need to supply any signatures at all to run in the primary. Both candidates were required to meet an identical filing deadline. The Court noted that the mutual filing deadline was not unreasonably early, id. at 438, 91 S.Ct. at 1974; and emphasizing the state's interest in avoiding confusion, deception, and frustration in the political process as a result of frivolous or fraudulent candidates, the court upheld the signature requirements as a means for an independent candidate to demonstrate enough support to justify including his name on the general election ballot.
In Storer v. Brown, 415 U.S. 724, 94 S. Ct. 1274, 39 L. Ed. 2d 714 (1974), a California Election Code provision denied ballot positions to prospective candidates who earlier themselves had voted for a candidate in the immediately preceding primary, or who had been registered with a political party within one year of that party's most recent primary. The so-called "disaffiliation statute" imposed a burden on the prospective independent candidate. He had to decide to seek independent ballot status at least one full year before he could submit his petition to run as an independent. *551 The plaintiffs asserted their interest in making a late rather than an early decision to run as independent candidates, but the Court found that the State's compelling interests outweighed the candidates' right to postpone their decisions. The Court considered the state's right to protect the direct primary process by discouraging any independent candidacy inspired by short term political goals, pique, or personal quarrel, and by preventing at the same time party raiding. Id. at 735, 94 S.Ct. at 1281.
Finally, in Anderson v. Celebrezze, 460 U.S. 780, 103 S. Ct. 1564, 75 L. Ed. 2d 547 (1983), the Court enunciated for the benefit of lower courts and litigants in these matters a prevailing standard by which ballot access restrictions should be judged. In that case, an independent presidential candidate, former Congressman John B. Anderson, of Illinois, first campaigned for the Presidency on the Republican ticket. He abandoned his Republican campaign and pursued an independent candidacy, but he was denied access to the ballot in Ohio by a statute which required that he file his independent candidacy by a certain deadline. That deadline was March 20, 1980, 75 days prior to the state's party primary, and approximately 230 days prior to the state's general election. The Court held that this kind of deadline would impinge on voter's rights, not only in Ohio, but in any other state. In analyzing the constitutionality of the filing deadline in Anderson, the Court first assessed the character and magnitude of the plaintiff's asserted injury. It next identified and evaluated the precise interests put forward by the state to justify the burden imposed upon the candidates by its rule. Finally, the Court measured the extent to which the state's interest in a valid election system made it necessary to burden the plaintiff's right to run. Id. at 789, 103 S.Ct. at 1570.
In examining the injury resulting to the election system's filing deadline, the Court's primary concern lay not with the candidate, but with the voters who chose to associate together and who desired to cast their votes effectively. Id. at 806, 103 S.Ct. at 1579. The Ohio deadline completely barred Anderson from the general election ballot; the Court did not mention the availability of another access to the ballot by way of a new party. Because the Court found that a write-in option, also available in Illinois, alone was insufficient to allow an effective candidacy and therefore an effective vote, held that the harm sustained by the candidate and the voters was greater than any benefit that could obtain to the election system by retaining the filing date.
The state identified three interests to justify its early filing deadline for independent presidential candidates: voter education, equal treatment for partisan and independent candidates, and political stability. Id. at 796, 103 S.Ct. at 1573. In measuring the strength of these interests, the Court found that advances in communication technology now permit adequate voter education in a relatively short time. Id. at 797, 103 S.Ct. at 1574. The Court observed that the filing deadline did not promote equal treatment, because a democratic or republican presidential nominee could appear on the general election ballot even if he failed to meet the primary deadline in Ohio but was thereafter nominated at the national convention. An independent candidate would receive no such second chance. Id. at 799, 103 S.Ct. at 1575. As to the political stability interest, the Court noted that the Ohio deadline did not serve as either a "sore loser" or a "disaffiliation" statute, that it did not enable the primary election to narrow the field of candidates for the general election, and that it was not precisely drawn to protect the parties from "intra-party feuding." Id. at 804-05, 103 S.Ct. at 1578-79. Under the circumstances, the Court found that the Anderson March deadline did not materially advance the state's interest in political stability.
Because that deadline did not materially advance the state's asserted interest, and because it denied Anderson any access to the ballot, thus effectively denying the First and Fourteenth Amendment rights of the voters who wished to vote for him, the Court concluded that the early filing date *552 statute for independent candidates unnecessarily burdened the rights asserted by the plaintiff, and held the statute unconstitutional.
In the instant case, Mr. Stevenson and the other plaintiffs contend that the outcome in the Anderson case should control the outcome here. However, as the Supreme Court stated in Anderson, constitutional challenges to state election laws "cannot be resolved by any litmus-paper test." Id. at 789, 103 S.Ct. at 1570. This Court recognizes that on a factual basis Anderson is different from the instant case. Anderson involved a national election in which the timing of candidacy requirements, such as filing petitions, differ among the 50 states of the Union. And in the instant case we are concerned with the election laws of one state only. In Anderson the Court had to be concerned with causing Ohio as closely as possible to fit in a general pattern embracing all of the states. Indeed, in analyzing Ohio's asserted interests in its filing deadline, the Court minimized those interests principally in the context of a national presidential election. This court may not merely mechanically adopt the outcome in that case for a decision here. Instead, I am expected by case analysis only to accept for guidance the standards, the reasoning, and the guidelines followed by the Supreme Court in the Anderson case in analyzing the specific facts in this case for arriving at a proper determination here. And this, of course, cannot be done without first understanding the Illinois Election Code.
The Illinois Election Code provides a potential candidate with three avenues for obtaining access to the ballot: 1) nomination by an established political party; 2) independent candidacy, and 3) formation of a new political party. In addition, as in Ohio, a candidate may also make a "declaration-of-write-in-candidacy," and he then becomes eligible to receive write-in votes which would be counted on his or her behalf. The filing deadline for a candidate seeking nomination by an established political party is identical to that for an independent candidate. Filing is allowed between 92 and 99 days prior to the date of the primary elections. A new political party candidate must submit his slate and file between 92 and 99 days at any time prior to the general election. In order for a voter to write in a candidate's name, that candidate must have filed a declaration of intent to run as a write-in candidate not later than the Friday immediately preceding the November general election.
In order for a candidate to run in the November election as a member of an established political party, he must have filed his nomination papers by the December deadline and must have won that party's primary. An established political party candidate who has lost in the primary may not run in the November general election as an independent candidate because his filing date has passed, and Section 10-2 prevents his running as a new party candidate. His only recourse is to be elected as a write-in candidate. This case presents for the very first time, as far as case law on elections reveals, the situation in which a candidate proposes to run in the November general election, who was nominated in his party's primary, but then resigned from the ticket. Such candidate proposes to run, not as a member of a newly-formed party nor as a write-in candidate, either of which is possible under the Illinois Code, but as an independent candidate. This recourse is not available to him under the present applicable filing requirement of the Illinois Election Code.
A person seeking at this time to form a new political party need not and may not file before 99 days prior to the November general election. Such candidate, if seeking to run for governor, must include in his nomination petition a complete list of candidates of this new party for all of the offices to be filled in the state election. As stated above, a candidate seeking to campaign for the governorship as a write-in need only file his declaration on or before the Friday immediately preceding the November general election.
*553 It is in the context of this election scheme that the Court in this case is called upon to compare the relative benefits and inequities to the plaintiffs on the one hand, with the elective responsibilities of the state on the other. Plaintiffs who sue as voters are not disenfranchised by Section 10-3 of the Election Code because their candidates as yet have access to the ballot. In Rosario v. Rockefeller, 410 U.S. 752, 93 S. Ct. 1245, 36 L. Ed. 2d 1 (1973), a New York election code required voter enrollment thirty days before a general election in order for such voter to be entitled to vote in his party's next party primary. The Court held that the time deadline which the voters chose to disregard did not constitute an absolute prohibition on their associational and franchise rights, and therefore did not violate the Constitution. Finding that the plaintiff's situation was not caused by the statutory deadline but rather by the plaintiff's compliance with the statute, the Court noted that the filing deadline was tied to the legitimate state purpose of prescribing the integrity of the ballot process. Cf. Dunn v. Blumsteim, 405 U.S. 330, 92 S. Ct. 995, 31 L. Ed. 2d 274 (1979) (finding one year durational requirement unnecessarily burdensome as it completely denied access to the ballot.) The plaintiff voters here have not entirely lost the right to vote for the candidate of their choice, should their candidates avail themselves of the remaining ballot access measures, to wit, the formation of a new party. This avenue also apparently was unavailable to Anderson.
Because the prospective candidates before this Court have existing ballot access measures available to them, the magnitude of their injury is to be reflected only in the difference between being able to run as an independent on the one hand, and running as a new political party candidate on the other. The difference does reflect measurable burdens on the candidates but, unlike Anderson, the plaintiffs here still have opportunities to appear on the ballot, though those opportunities are less desirable to them than running independent candidacies.
In support of the independent filing deadline, the state correctly notes that it has a substantial and legitimate interest in regulating its election procedures. Storer v. Brown, 415 U.S. 724, 94 S. Ct. 1274, 36 L. Ed. 2d 714 (1974). One such interest is to prevent splintered parties and unrestrained factionalism. Id. at 735, 94 S.Ct. at 1281. Anderson v. Celebrezze, 460 U.S. at 803, 103 S.Ct. at 1577. As has been stated before, the Supreme Court in Storer recognized as legimitate the state's goal of discouraging independent candidacies prompted by short-term political goals, pique, or personal quarrel. Storer, at 735, 94 S.Ct. at 1281; Anderson, at 803, 103 S.Ct. at 1577. Splintered parties and unrestrained factionalism may do significant damage to the fabric of government. See The Federalist, No. 10 (Madison). There are further substantial state interests at stake: encouraging compromise and political stability; attempting to ensure that the election winner will represent a majority of the community; and providing the electorate with a ballot that will eliminate voter confusion. Williams v. Rhodes, 393 U.S. 23, 89 S. Ct. 5, 21 L. Ed. 2d 24 (1968); Bullock v. Carter, supra, at 145, 92 S.Ct. at 856.
The Supreme Court went further in Storer and recognized that the general election ballot should be reserved for major struggles and should not provide a forum for continuing intra-party feuds. 415 U.S. at 735, 94 S.Ct. at 1281. To this extent, the simultaneous filing deadline precludes a partisan candidate from assessing his chances of securing the nomination as slight, then quitting an established political party to run anyway as an independent. The identical filing deadline acts automatically to dissuade the "sore loser" from dividing the members of the established party by running as an independent. To the extent that this filing deadline in Illinois prohibits a person initially committed to the party's primary from abandoning his commitment and running as an independent candidate, the statute works as an equivalent to the California disaffiliation statute, and discourages factionalism in the *554 party by discouraging intra-party disputes to continue beyond the primary on into the general election, and forces a true independent to file no later than an established party candidate. The Supreme Court decisions in Anderson, supra; Storer, supra; Rosario, supra; and Jenness, supra, all support the position taken herein. Accordingly, the interests of ballot integrity, political stability, and voter representation all reflect legitimate state interests to be advanced by statute.
Finally, the Anderson guideline requires the Court to determine the extent to which the state's interests make it necessary to burden the plaintiffs' rights. The rights asserted are the plaintiffs' associational freedoms and equal protection. Because the filing deadline does not bar the candidates' access to the ballot, neither is the plaintiffs' associational freedom impaired to the extent presented in Anderson. While there is some question whether the disaffiliation function of the filing deadline might be more narrowly tailored to the asserted state interest, it is no more onerous than the statute upheld by the Supreme Court in Jenness. 403 U.S. at 438-39, 91 S.Ct. at 1974-75. As in Georgia, the Illinois state election code provides an "open" system for ballot access. On balance, the injury sustained by the constraints on associational freedoms is not sufficient to overcome the substantial state interests involved.
The plaintiffs' equal protection claim rests on the separate filing deadlines required of independent candidates and newly formed parties. The plaintiffs argue that independent candidates should be treated as new parties for the purpose of establishing a filing deadline. The Supreme Court in Storer recognized, however, that independent candidates and new party candidates are dissimilar and do not represent interchangeable rights. Storer, at 745-46, 94 S.Ct. at 1286-87. An independent candidacy allows an individual to campaign alone without the necessity of establishing a new political organization. Like a partisan primary candidate, the independent is predominantly concerned with his individual campaigning, and does not need unilaterally to create an entire party platform. A person seeking to establish a new party, on the other hand, abdicates independence and individuality to create a distinct political organization. This candidate runs with a slate and has responsibilities which extend beyond those contemplated by an independent.
Furthermore, the political function fulfilled by the two candidacies is different. The relative freedom to run as an independent in Illinois requires reaching an early decision to seek running status. This burden exists to protect the state's goal of maintaining a ballot access with integrity. But once this deadline passes, the balance of state interest shifts to that of a guardian of political stability. A relatively more burdensome option is allowed to the new party candidate. This burden in turn is balanced by the later filing date. This new party mechanism provides the flexibility to allow the system to adjust for the changing circumstances from which political opportunities arise throughout the election process. Anderson, supra, at 791, 103 S.Ct. at 1571. If the new political parties were required to file at the same time as the independent and partisan candidates, the Illinois system would be less able to reflect emerging issues. And because the new parties require more organizational cohesion, they are less likely to arise from "short term political goals, from pique, or from personal quarrel," the things which could prompt such candidate precipitously to separate from his party, disruptively, fractionalizingly. Storer, at 735, 94 S.Ct. at 1281. Anderson, at 803, 103 S.Ct. at 1577. The different filing deadlines are not capricious. They are reasonably tied to their particular functions. The plaintiff's equal protection argument fails for the reasons discussed to disturb the constitutionality of the statute.
Finally and in summary, the Court finds it has subject-matter jurisdiction in that the Eleventh Amendment of the United States Constitution is not a bar to this Court's considering the matter of the constitutionality *555 of Section 10-3 of the Illinois Election Code. The Court finds that plaintiffs have standing to bring this case and that there is a sufficient case and controversy setting, based on the facts alleged in the complaint and stipulated to by the parties. In this respect, the Court concludes that to require the plaintiffs to tender their petitions and be denied access to the ballot as independent candidates is unnecessary as a futile and formalistic gesture.
The Court finds that the case of John B. Anderson v. Celebrezze is substantially and fundamentally different from the case now before the Court primarily because it involved a candidate in a presidential election whereas this case is limited to the State of Illinois. However, the Court finds that the Supreme Court in the Anderson case laid down the considerations and guidelines to be followed by lower courts in deciding challenges to election laws particularly with regard to the perennial problems of access of candidates to the voters through the ballot and the problem of the deadline for filing declarations of candidacy. The Court follows Anderson v. Celebrezze, not as to its decision in the election in Ohio, but as to its teaching on how to measure the competing interests of the state in maintaining a fair and democratic election procedure, and the constitutional rights of voters and candidates alike to freedom of association under the First Amendment, and Equal Protection of the laws under the Fourteenth Amendment.
In following the Supreme Court's guidelines in this case, the Court concludes that the statute in question Section 10-3 of the Election Code strikes a fair and reasonable balance between these two competing interests. The Court is not unmindful of the special, even unique, circumstances presented by this case. Mr. Stevenson is not before the Court as a candidate defeated in a party primary; he is not a "sore loser" but is before the court as a candidate constrained by the Illinois State Constitution to run with a person whose views he finds intolerable, should Mr. Stevenson have chosen to remain on the democratic ticket. This singular problem presented here, though substantial, is still not serious enough to strike down the statute, particularly in light of the availability of equally palatable means of access to the ballot. Mr. Stevenson's problem was not created by the statute, but by circumstances which, to be corrected, would need to be addressed by the state legislature, by the political parties, or by the candidates themselves.
The judicial precedent established by a long list of cases culminating in the Anderson decision convinces the Court that the statute challenged here is not unconstitutional. The plaintiffs' rights in this case are not burdened to the extent of those plaintiffs in Bullock, supra, Williams, supra, or Anderson, supra. The defendants' interests in this case are more substantial than the defendants' interests asserted in those cases, and are similar in weight to those asserted in Storer, supra, and Jenness, supra. Section 10-3 of the Illinois Revised Code is not unconstitutional.
In light of all of the foregoing, I enter the following determinations and orders:
1. I have subject-matter jurisdiction in that the Eleventh Amendment of the United States Constitution is not a bar to this action;
2. The plaintiffs have standing to bring this case, and there is sufficient case and controversy setting, based upon the facts alleged in the complaint and in the stipulation of facts, and I conclude that any further steps that might be required to be taken by the plaintiffs are a formalistic gesture and do not bar this action;
3. That though the facts in the Anderson case are substantially different from those here, the Supreme Court guidelines are to be followed;
4. That Section 10-3 of the Election Code strikes a fair and reasonable balance between the competing interests under the circumstances and is not unconstitutional on its face or as applied;
5. That the plaintiffs' motion for summary judgment should be and by the same hereby is denied; and that the motions by *556 the defendants should be and by the same hereby is allowed;
6. That all other issues raised by the parties and not addressed herein are moot and, subject to appeal, that hereupon the case should be dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1987367/ | 37 N.J. 19 (1962)
179 A.2d 1
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
SYLVESTER JOHNSON, STANLEY CASSIDY AND WAYNE GODFREY, DEFENDANTS-APPELLANTS.
The Supreme Court of New Jersey.
Argued February 19, 1962.
Decided February 26, 1962.
Mr. Norman Heine, Camden County Prosecutor, argued the cause for plaintiff-respondent.
Mr. M. Gene Haeberle argued the cause for defendants-appellants.
The opinion of the court was delivered
PER CURIAM.
The defendants were convicted of murder committed in the course of the robbery of their victim, and *20 the jury not having recommended life imprisonment, they were sentenced to death. The judgments were affirmed. State v. Johnson, 31 N.J. 489 (1960).
Subsequently defendants sought a new trial on the ground of newly discovered evidence, consisting of a claim that in truth there was no holdup; that the victim was a peddler of narcotics; that one of the defendants called upon the deceased to collect moneys due him in connection with the narcotics business, the other defendants merely accompanying him on that peaceful mission; and that the shooting arose out of a scuffle between the deceased and his creditor. Defendants had not testified at the trial, and their confessions which were there received told the story of a killing in the course of a robbery. Defendants in fact had been granted pretrial inspection of their confessions. State v. Johnson, 28 N.J. 133 (1958). The new factual theme, thus advanced on the motion for a new trial, was a palpable fabrication. The motion was denied.
Defendants appealed from the denial of that motion, and on the appeal advanced additional contentions. One was that defendants should be granted a new trial to the end that they may offer "background" evidence under the holding of State v. Mount, 30 N.J. 195 (1959), which was decided after the trial of the indictments in the present case. As the issue was presented, we had no occasion to consider whether Mount should receive retroactive application. In fact counsel could not suggest at the oral argument what evidence he had in mind. The denial of the motion was affirmed, 34 N.J. 212 (1961), and on December 4, 1961 the United States Supreme Court dismissed an appeal to it for want of a substantial federal question and denied certiorari. 368 U.S. 145, 933, 82 S.Ct. 247, 370, 7 L.Ed.2d 188, 195.
Thereafter defendants again sought a new trial, upon the basis of affidavits setting forth what they would prove under the Mount opinion. The trial court denied the motion. 71 N.J. Super. 506 (Law Div. 1962). This appeal followed.
*21 We authorized the State to move to dismiss the appeal for want of merit and directed written and oral argument upon the merits. We approved that course to expedite the matter. We have experienced in this and in other capital cases a procession of post-conviction applications which seek to present, usually in piecemeal fashion, ideas conceived by successive counsel. The procedural steps, appropriate for the review of a judgment of conviction, here lead to inordinate delay which contributes nothing to a fair determination of the cause. The State's motion perhaps should, more accurately, be described as one to affirm the order below, rather than to dismiss the appeal, and since there has been full argument upon the merits, we will so treat the motion.
The problem of retroactive application of judicial decisions is exceedingly difficult. No definitive formula is possible. The issue is one of fairness under the total circumstances. The decision in Mount dealt with the reception of evidence in an area heavily laden with judicial discretion. We were aware of conflicting views at both the trial and appellate levels with respect to the amount of background material which should be received for consideration by the jury on the question of punishment. In Mount proof in that category had been rejected at the trial. We reversed the conviction for other reasons, and since a retrial would follow, we expressed our disapproval of the limitations upon the jury's consideration as to punishment which had been stated in State v. Wise, 19 N.J. 59, 107 (1955).
The issue thus dealt with in Mount does not involve the constitutional concept of a fair trial or the jurisdiction of the court. The Legislature could decree that punishment be determined solely upon the story of the murder itself. The question was whether the Legislature contemplated that some evidence might be offered as well upon the issue of punishment. We knew that some background evidence was routinely accepted by trial judges notwithstanding State v. Wise. We recognized room for reasonable dispute upon the breadth of such proof, and our preference for a wider latitude *22 in a trial judge by no means meant that a different view of the situation could be said to spell out fundamental unfairness.
Not every change in a principle of law is so fundamental in its reach that all completed criminal trials must or should be reopened. See Hill v. United States, 368 U.S. 424, 428, 82 S.Ct. 468, 471, 7 L.Ed.2d 417, 421 (1962); Sunal v. Large, 332 U.S. 174, 181, 67 S.Ct. 1588, 91 L.Ed. 1982, 1989 (1947). Recently, in another situation, a majority of this court expressed a preference for a new approach to the charge to the jury with respect to confessions. We directed that course for the future but declined to reverse the conviction under review. State v. Smith, 32 N.J. 501, 557-558 (1960), certiorari denied 364 U.S. 936, 81 S.Ct. 383, 5 L.Ed.2d 367 (1961).
Whether any conviction prior to Mount should be upset to permit the introduction of background material, we need not now decide. We need not, for the reason that upon the total circumstances we are not persuaded that justice here requires a retrial, even if that change of law were a possible basis for retrial.
The evidence proffered upon this motion falls broadly into four categories. One is the conventional testimony as to good reputation. That evidence was clearly admissible prior to Mount. The second is evidence of the use of marihuana just prior to the murder. That evidence, too, was plainly admissible prior to Mount. The third consists of evidence of poor early environment. Unlike Mount where the defendant was 18 years of age at the time of the homicide and the proof was intimately involved in the psychiatric testimony, here defendants were adults at the time of the crime and this evidence is minimized in its conceivable impact by the testimony as to good repute, to which we first referred. Finally, there is an offer of psychiatric examinations made after three years in the death house. These reports do not, even as of that time, reflect any discernible mental illness.
*23 It is perfectly plain that prior to the main trial, defendants and their counsel debated whether any evidence at all should be offered, and decided against it. Some of the evidence, for example, the use of marijuana just prior to the murder, probably could have been given effectively only by the defendants themselves. As to the remaining proof now suggested, there is nothing to indicate that counsel then believed some or all of it would not be received, although we add, lest we be misunderstood, that if such testimony by counsel were advanced, it would not affect the result we here reach. At any rate, no offer of proof was made. The appeal from the conviction was argued six months after Mount was decided, but nothing was said or done to project the present issue. When new counsel sought a new trial upon the defendants' fabrication that the victim was a dope peddler, still no mention was made of this question. It was not until the appeal from the order of denial (argued about 18 months after Mount was decided) that counsel first offered the question and even then, as we have already said, counsel was unable to indicate what proof was available.
If Mount had been decided prior to the trial, defense counsel would have been hard put to decide whether an excursion into the background of these men would have been the prudent course. Surely if defendants then asserted (as they later did) that their confessions were false, and that the visit was not to rob, but rather to collect a debt from the victim, there would be the practical problem of offering evidence as to punishment while maintaining innocence. Both horses perhaps can be ridden when sanity is in issue, but that is not this case. Moreover, the use of marihuana could suggest the purpose was to rob the deceased to obtain funds for its purchase, without the palliation which may be found in the case of advanced addiction in which the addict robs to obtain moneys under the compulsion of excruciating withdrawal pain. The psychiatric testimony would add nothing of substantial consequence. Further, the *24 criminal records of two of the defendants would have been revealed, and the door would have been opened for the State to rebut the reputation testimony.
For these reasons defense counsel would have had a most difficult decision. The decision of the defense either way would have been irreversible, for, quite obviously, a court could not order retrial to determine whether another course would be more productive. We mention the problem in terms of the advice of trial counsel, not to suggest that their answer can be the touchstone of our decision today, but rather to emphasize our conclusion that the total picture does not persuade us that it is a miscarriage of justice to deny a new trial.
Hence we agree with the determination of the trial court. Its order denying a new trial is affirmed. Mandate shall issue forthwith.
For granting motion for affirmance Chief Justice WEINTRAUB, and Justices JACOBS, FRANCIS, PROCTOR, HALL, SCHETTINO and HANEMAN 7.
For denying motion for affirmance None. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2457235/ | 895 S.W.2d 766 (1995)
CITY OF GARLAND, Texas, Appellant,
v.
Frank R. BOOTH, et al., Appellees.
No. 05-93-00134-CV.
Court of Appeals of Texas, Dallas.
January 27, 1995.
Rehearing Denied March 21, 1995.
*767 Brad Neighbor, Dorothy G. Palumbo, Charles M. Hinton, Jr., First Asst. City Atty. and Asst. City Atty., The City of Garland, Tex., Garland, for appellant.
Schuyler B. Marshall, Beverly Ray Burlingame, Thompson & Knight, P.C., Dallas, for appellees.
Before THOMAS, C.J.,[1] and OVARD and BARBER, JJ.
OPINION
THOMAS, Chief Justice.
This appeal presents two basic issues. First, we must decide whether a party can assign its legal malpractice claims to its adversary in the underlying litigation. Second, we must determine whether attorneys' fees expended to disqualify an opponent's attorney are recoverable in a separate malpractice action. The City of Garland appeals a summary judgment rendered in favor of attorneys Frank R. Booth and Bernard D. "Skip" Newsom and their firm, Booth & Newsom P.C. (collectively, appellees). In six points of error, Garland contends generally that (i) legal malpractice claims can be assigned in Texas and (ii) fact issues exist precluding summary judgment on its direct claims. We affirm in part and reverse and remand in part.
FACTUAL BACKGROUND
In 1977, Garland entered into contracts with the cities of Rowlett and Sachse to treat their wastewater. Robin Lloyd, a partner in a predecessor firm to Booth & Newsom, negotiated and drafted the sewer contracts on behalf of Garland. Frank Booth was a partner in the firm. In 1984, the firm split. Lloyd formed a new firm, and Booth formed Booth & Newsom. Lloyd's firm continued to represent Garland.
In 1988, a dispute arose over the rates Garland charged to treat the wastewater. Garland filed a declaratory judgment action against Sachse and Rowlett, seeking a declaration of rights and obligations under the *768 contracts. Sachse and Rowlett hired appellees to represent them and counterclaimed against Garland. Garland sought to disqualify appellees on the basis that they formerly represented Garland in a substantially related matter, i.e., drafting of the contracts in dispute. Following a ten-day hearing, the trial court disqualified appellees. Nine months later, the three cities settled the underlying litigation. As part of the settlement, Rowlett and Sachse assigned to Garland any of their causes of action against appellees and waived the attorney-client privilege.
Subsequently, Garland sued appellees, alleging it was forced to spend $675,000 in attorneys' fees to disqualify appellees from representing Rowlett and Sachse. Garland asserted disqualification was necessary to protect confidential information disclosed to appellees during the former representation and to prevent appellees from using that information against Garland in the wastewater litigation. Garland alleged direct claims of malpractice, breach of fiduciary duty, and unconscionable conduct under the Deceptive Trade Practices Act (DTPA). As damages, Garland claimed its attorneys' fees and costs associated with both the disqualification proceeding and being prevented from entering settlement negotiations until the dispute over legal representation was resolved.
Additionally, Garland, as assignee of Rowlett and Sachse, sued appellees for breach of contract/restitution, negligence, breach of fiduciary duty, and DTPA violations of breach of express warranty and unconscionability. As damages, Garland sought the attorneys' fees and costs incurred by Rowlett and Sachse in the disqualification proceeding.
The trial court granted summary judgment in favor of appellees. The court specifically granted summary judgment on the assigned claims on the basis that legal malpractice claims are not assignable in Texas. As to Garland's direct claims, the court found there were no genuine issues of material fact. We will address the arguments presented under each set of claims.
SUMMARY JUDGMENT
The function of a summary judgment is not to deprive a litigant of the right to a full hearing on the merits of any real issue of fact but to eliminate patently unmeritorious claims and untenable defenses. Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952). In reviewing a summary-judgment record, this Court applies the following standards:
1. The movant for summary judgment has the burden of showing there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
2. In deciding whether there is a disputed fact issue precluding summary judgment, we must take the evidence favorable to the nonmovant as true.
3. We indulge every reasonable inference in favor of the nonmovant and resolve any doubts in its favor.
See Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).
The purpose of the summary-judgment rule is not to provide either a trial by deposition or a trial by affidavit. Rather, its purpose is to provide a method of summarily terminating a case when it clearly appears only a question of law is involved and no genuine issues of fact remain. Port Distrib. Corp. v. Fritz Chem. Co., 775 S.W.2d 669, 671 (Tex.App.Dallas 1989, writ dism'd by agr.).
To prevail on summary judgment, a defendant as movant must either (1) disprove at least one element of each of the plaintiff's theories of recovery, or (2) plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex.1979). A matter is conclusively established if ordinary minds cannot differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982).
When the summary judgment order does not specify the ground or grounds on which it is based, we will uphold the order on any ground asserted by the movant that is *769 meritorious. Rogers v. Ricane Enters. Inc., 772 S.W.2d 76, 79 (Tex.1989). When the order specifies the grounds on which it bases summary judgment, we limit our review to those grounds. See Delaney v. University of Houston, 835 S.W.2d 56, 58 (Tex.1992). But c.f. State Farm Fire & Casualty Co. v. S.S., 858 S.W.2d 374 (Tex.1993) (plurality op.) (in concurring and dissenting opinions, five justices indicated they would consider grounds not expressed in the trial court's order under proper circumstances).
ASSIGNABILITY OF MALPRACTICE CLAIMS
A. Negligence/Breach of Fiduciary Duty
In the first point of error, Garland asserts summary judgment was improper on the assigned claims of negligence and breach of fiduciary duty because, contrary to the trial court's ruling, legal malpractice claims may be assigned in Texas. Garland reasons that because causes of action for personal injuries may be sold or assigned and legal malpractice is a tort, such claims should be assignable.
Appellees argue in response that policy considerations and the nature of the attorney-client relationship preclude such assignments. Because we agree with appellees and the reasoning set forth in Zuniga v. Groce, Locke & Hebdon, 878 S.W.2d 313 (Tex. App.San Antonio 1994, writ ref'd), we hold that legal malpractice claims are not assignable.
In Zuniga, the court held that "assignment of a legal malpractice claim arising from litigation is invalid."[2]Zuniga, 878 S.W.2d at 318. In so holding, the court followed a majority of states that have rejected assignability of such claims, primarily on public policy grounds. See Schroeder v. Hudgins, 142 Ariz. 395, 399, 690 P.2d 114, 118 (Ct.App. 1984); Goodley v. Wank & Wank, Inc., 62 Cal. App. 3d 389, 133 Cal. Rptr. 83, 87 (1976); Roberts v. Holland & Hart, 857 P.2d 492, 495-96 (Colo.Ct.App.1993, cert. denied); Aaron v. Allstate Ins. Co., 559 So. 2d 275, 276-77 (Fla.Dist.Ct.App.) (per curiam), review denied, 569 So. 2d 1278 (1990); Brocato v. Prairie State Farmers Ins. Ass'n, 166 Ill.App.3d 986, 117 Ill. Dec. 849, 850, 520 N.E.2d 1200, 1201 appeal denied, 121 Ill. 2d 567, 122 Ill. Dec. 434, 526 N.E.2d 827 (1988); Picadilly, Inc. v. Raikos, 582 N.E.2d 338, 339-45 (Ind.1991); Bank IV Wichita, Nat'l Ass'n v. Arn, Mullins, Unruh, Kuhn & Wilson, 250 Kan. 490, 827 P.2d 758, 765 (1992); Coffey v. Jefferson County Bd. of Educ., 756 S.W.2d 155, 157 (Ky.Ct.App.1988); Moorhouse v. Ambassador Ins. Co., 147 Mich.App. 412, 383 N.W.2d 219, 221 (1985, appeal denied); Wagener v. McDonald, 509 N.W.2d 188, 191 (Minn.Ct.App.1993); Chaffee v. Smith, 98 Nev. 222, 645 P.2d 966, 966 (1982) (per curiam).[3]
The policy considerations underlying these courts' rejection of assignability of claims was perhaps best articulated by the California appellate court in Goodley. There, the court focused on the unique quality of legal services, the personal nature of the attorney's duty to the client, and the confidentiality of the attorney-client relationship. The court reasoned that to allow assignability of such claims would relegate the legal malpractice action to the marketplace and convert it to a commodity to be exploited and transferred to an economic bidder who may have had no professional relationship with the attorney.
*770 The commercial aspect of assignability of choses in action arising out of legal malpractice is rife with probabilities that could only debase the legal profession. The almost certain end result of merchandizing such causes of action is the lucrative business of factoring malpractice claims which would encourage unjustified lawsuits against members of the legal profession, generate an increase in legal malpractice litigation, promote champerty and force attorneys to defend themselves against strangers. The endless complications and litigious intricacies arising out of such commercial activities would place an undue burden on not only the legal profession but the already overburdened judicial system, restrict the availability of competent legal services, embarrass the attorney-client relationship and imperil the sanctity of the highly confidential and fiduciary relationship existing between attorney and client.
Goodley, 133 Cal.Rptr. at 87.
We agree with the Goodley court that allowing assignability would commercialize legal malpractice lawsuits. Additionally, we believe, as did the Indiana Supreme Court in Picadilly, that allowing assignment would impair attorneys' duties of loyalty and trust toward their clients. Attorneys would be put in the awkward position of, on the one hand, zealously protecting all of a client's rights and, on the other, being concerned a possible future claim of malpractice could be used to settle a client's case or debt to a stranger. The more zealous an attorney is in his representation, the more likely the client's adversary will be to strike back. Suing on an assigned claim would provide one such method of retaliation.
An equally compelling reason to reject assignment in this case is the particular concern expressed by the Zuniga court: assignments would be motivated by the plaintiff's inability to collect a judgment from an insolvent, uninsured, or financially-strapped defendant. In such an instance, the judgmentproof defendant has every motivation to look elsewhere for a source of funding. As stated by the Zuniga court:
Should the law allow the plaintiff and the defendant to make a deal and focus on the defense lawyer? If assignments are permitted, the plaintiff will have the legal right to bargain for the defendant's right to sue his lawyer. When the defendant cannot make payment, why not offer to waive collection from him in return for assignment of his right to sue his lawyer? Defense attorneys would have to conduct their defense with the knowledge that the plaintiff might make exactly this kind of offer. Defense counsel would realize that zealous advocacy might prompt opposing counsel to retaliate with the newest weapon in his arsenal: the offer to settle in return for the client's malpractice action.
Zuniga, 878 S.W.2d at 317. Ultimately, lawyers would have every reason to be reluctant to represent defendants with inadequate insurance and limited assets.
Although Garland was not a complete "stranger" to appellees, we nevertheless believe the concerns expressed above apply equally to the instant case. Garland initiated a lengthy and costly disqualification proceeding. Its opponents, Rowlett and Sachse, fought to keep appellees as their counsel in the suit. Those cities controlled the choice of who would represent them and could have, at any time, replaced appellees with different counsel. Those cities did not. Those cities took the matter to a ten-day hearing. Ultimately, the trial court disqualified appellees, and nine months later, the cities settled the case. However, the settlement did not address the huge amount of attorney's fees expended in the disqualification battle; instead, Rowlett and Sachse assigned to Garland any causes of action against appellees for not immediately withdrawing. As assignee of those claims, Garland seeks to recover as damages the attorneys' fees and expenses incurred by Rowlett and Sachse. Thus, it appears the fear expressed in Picadilly has become a reality in this case. See Picadilly, 582 N.E.2d at 343 ("If assignments were permitted, we suspect that they would become an important bargaining chip for clients without a deep pocket.") Such an abrupt switch in position by the client should not be countenanced, much less promoted.
Nevertheless, Garland argues this Court "should not allow the concept of the attorneyclient *771 relationship to be used as a shield to protect an attorney from the consequences of his malpractice." Barring assignability would not lead to such a result. Our holding does not bar the client from instituting a malpractice action against his or her attorney; it merely prevents the client from assigning such a claim to his adversary in the underlying litigation. Likewise, we decline Garland's invitation to carve out an exception allowing only governmental entities to sue on assigned claims.
Assignment should be permitted or prohibited based on the effect it will likely have on modern society and the legal system in particular. The policy considerations noted above persuade us that allowing assignability would debase the legal system and imperil the attorney-client relationship. Accordingly, we hold the assignment of a malpractice claim by a client to his adversary in the underlying litigation is invalid. We overrule the first point of error.
B. Breach of Contract/Restitution & DTPA Violations
In the second point of error, Garland maintains the trial court improperly granted summary judgment on the assigned claims of breach of contract/restitution, breach of express warranty, and unconscionability because these claims were added after appellees filed their motion for summary judgment and appellees did not amend their motion to include these claims. Thus, Garland argues these causes of action were not before the trial court when it ruled on the summaryjudgment motion.
Appellees argue that because they generally asserted malpractice claims are not assignable, their ground would extend to any assigned claims added after the motion for summary judgment was filed. We disagree. Granting a motion for summary judgment on causes of action not addressed in the motion is reversible error. See Mafrige v. Ross, 866 S.W.2d 590, 591 (Tex.1993). We therefore sustain the second point of error. Accordingly, we reverse the summary judgment as it pertains to the assigned claims of breach of contract/restitution, breach of express warranty, and unconscionability and remand these causes to the trial court.
DIRECT CLAIMS
A. Negligence
In the fourth point of error, Garland claims fact issues exist precluding summary judgment on its direct claim for negligence. Garland alleged appellees were negligent in: (i) representing Sachse and Rowlett without obtaining Garland's consent; (ii) failing to withdraw as counsel once Garland objected; (iii) failing to withdraw as counsel once the trial court entered an order of disqualification; (iv) failing to withdraw as counsel once this Court and the supreme court denied Sachse and Rowlett's requests for mandamus relief; and (v) purporting to disclose and disclosing confidential information.
Thus, Garland's claim is grounded on appellees' failure to withdraw as Rowlett and Sachse's counsel from the outset. As damages, Garland claims the amount of attorneys' fees incurred to disqualify appellees, $675,000.[4] In their motion for summary judgment, appellees argued, among other theories, that Garland's claim was barred as a matter of law because no Texas statute or case recognizes a right to recover attorneys' fees and costs for disqualifying an opponent's attorney.[5] We agree.
In Texas, attorneys' fees expended in prior litigation with third parties are not recoverable as damages: attorneys' fees are only recoverable when provided for by statute or by agreement between the parties. See Peterson v. Dean Witter Reynolds, Inc., 805 S.W.2d 541, 541 (Tex.App.Dallas 1991, no writ) (customer could not recover from *772 broker attorneys' fees incurred in defending third party's suit); Cupples Coiled Pipe, Inc. v. Esco Supply Co., 591 S.W.2d 615, 619 (Tex.Civ.App.El Paso 1979, writ ref'd n.r.e.) (attorneys' fees from prior tort or contract suits against third parties are not recoverable as damages in subsequent suits); Buck v. Johnson, 495 S.W.2d 291, 297 (Tex. Civ.App.Waco 1973, writ ref'd n.r.e.) (trial court's assessment of third-party cross-defendants' attorneys' fees as damages was error). In this case, there is no statute or agreement between the parties authorizing the recovery of attorneys' fees incurred in disqualifying Rowlett and Sachse's attorneys. Because Garland's damage element of its malpractice claim fails as a matter of law, the trial court did not err in granting summary judgment on this claim.[6]See Peterson, 805 S.W.2d at 549. Accordingly, we overrule the fourth point of error.
B. Breach of Fiduciary Duty/Unconscionability
In the third and fifth points of error, Garland asserts summary judgment was improper on the claims for breach of fiduciary duty and unconscionability because fact issues exist. Garland alleges appellees breached their fiduciary duty by representing Sachse and Rowlett when appellees had confidential information, gained in prior representation, which could be used against Garland in the sewer-contract litigation. Garland alleges appellees purported to reveal and did reveal those confidences. Such conduct, Garland asserts, is unconscionable and a violation of the DTPA. Appellees moved for summary judgment on the ground they had no confidential information relevant to the sewer contracts.[7]
On appeal, Garland maintains fact issues exist on whether appellees obtained confidential information and then later disclosed those confidences. Garland acknowledges that disclosure of such confidences is an essential element of these claims. Thus, our initial inquiry is whether there is evidence that appellees had any confidential information to disclose.
Appellees' summary-judgment evidence on this issue consisted of the affidavits of Frank Booth and Bernard D. (Skip) Newsom. Booth testified he had been an attorney with Booth & Newsom (or a predecessor or subsequent firm) since 1969. Robin Lloyd, a onetime partner in the firm, represented Garland from 1974 to 1977. Booth said he neither represented Garland nor assisted it in drafting or executing the contracts. Moreover, he said he has never discussed them with Lloyd. Booth said he obtained no confidential information from any source relevant to the contract dispute that could have been used to the advantage of Sachse and Rowlett. When Lloyd left the firm in 1984, all of Garland's files were transferred to Lloyd's new firm, and Booth & Newsom neither retained nor duplicated those files. No attorney with Booth's firm represented Garland after 1984. Booth testified his part in representing Sachse and Rowlett was limited to the disqualification proceeding and being a witness in that proceeding.
Newsom testified that he had been with Booth & Newsom (or a predecessor or subsequent firm) since 1978. Like Booth, he said he recalled no discussions with any attorneys at the firm concerning the 1977 sewer contracts. Newsom said he neither represented Garland nor drafted or executed the contracts. Newsom said he obtained no confidential information from any source relevant to the contract dispute. When the firm was hired to represent Sachse and Rowlett, Newsom said he arranged for firm members to be interviewed to determine their participation, if any, in the contracts. No existing members of the firm helped to develop the contracts *773 and none had confidential information about the contracts.
We conclude this evidence conclusively established appellees had no confidential information relative to the sewer contracts. Thus, the burden shifted to Garland to present controverting evidence to raise a fact issue. On appeal, Garland relies on a legal presumption in a disqualification proceeding to create a fact issue in this lawsuit. Specifically, Garland argues that because the trial court in the underlying litigation found a substantial relationship existed, Garland is entitled to presume in the instant suit that confidences were shared. See NCNB Tex. Nat'l Bank v. Coker, 765 S.W.2d 398, 400 (Tex.1989) (orig. proceeding) (in disqualification hearing, once trial court determines substantial relationship exists, moving party entitled to conclusive presumption that confidences and secrets were imparted to former attorney). We cannot agree with Garland on this point. The instant suit is not a disqualification proceeding; it is a malpractice action. We will not substitute a conclusive presumption, which exists for disqualification purposes, for real evidence in a malpractice lawsuit. Accordingly, because the presumption does not apply, it cannot raise a fact issue on disclosure of confidences.
In its reply brief, Garland additionally asserts fact issues were raised by: (i) a memorandum prepared by Booth & Newsom researching the law on disqualification; (ii) Garland's motion to disqualify; and (iii) documents concerning Newsom's contacts with former Garland City Attorney Pete Eckert, who withdrew from representing Rowlett and Sachse because of a conflict of interest. Our review of this evidence shows nothing to raise a fact issue on whether appellees had confidential information on the sewer contracts. Accordingly, we overrule the third and fifth points of error.
In the sixth point of error, Garland raises a general complaint that summary judgment was improper because fact issues exist. Our disposition of the previous points of error disposes of this complaint. Accordingly, we overrule the sixth point of error.
In conclusion, we hold legal malpractice claims are not assignable in Texas and affirm summary judgment as to the assigned claims of negligence and breach of fiduciary duty. Additionally, we affirm summary judgment on Garland's direct claims. As to the assigned claims of breach of contract/restitution, breach of express warranty, and unconscionability, we reverse summary judgment and remand to the trial court.
NOTES
[1] The Honorable Linda Thomas was on the original panel at the time this cause was submitted for decision. Justice Thomas was sworn in as Chief Justice on January 1, 1995.
[2] The court rejected as dictum, unsupported by reasoning or authority, a statement by the Corpus Christi Court of Appeals that "[a] part or all of a claim for legal malpractice can be assigned, just as any other negligence action." Zuniga, 878 S.W.2d at 314 (quoting Stonewall Surplus Lines Ins. Co. v. Drabek, 835 S.W.2d 708, 711 (Tex.App.Corpus Christi 1992, writ denied) (en banc)). The Zuniga court noted that on the same day the supreme court denied review in Drabek, it expressly left open the question whether a legal malpractice claim is assignable. Zuniga, 878 S.W.2d at 315 (citing American Centennial Ins. Co. v. Canal Ins. Co., 843 S.W.2d 480, 484 n. 6 (Tex.1992) & American Centennial Ins. Co., 843 S.W.2d at 486 (Hecht, J., concurring)).
[3] A few states allow assignability of malpractice claims. See Thurston v. Continental Casualty Co., 567 A.2d 922, 923 (Me.1989); Collins v. Fitzwater, 277 Or. 401, 560 P.2d 1074, 1077-78 (1977), overruled on other grounds, Lancaster v. Royal Ins. Co., 302 Or. 62, 726 P.2d 371 (1986); Hedlund Mfg. Co. v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357, 359 (1988).
[4] Garland also claims it is entitled to damages because it was prevented from entering meaningful settlement negotiations during the time of the disqualification dispute. We construe this as a claim for attorneys' fees.
[5] Appellees also challenged Garland's negligence cause of action on grounds of due process, lack of privity, res judicata, and collateral estoppel. Because we dispose of this cause of action on the attorneys' fee argument, we need not address the remaining grounds. See Rogers, 772 S.W.2d at 79.
[6] Whether Garland could have recovered its attorneys' fees from Rowlett and Sachse in the underlying declaratory judgment action is not an issue before us. Rather, the question is whether Garland can recover its litigation expenses in the prior suit from a third partyin this case, its opponents' attorneys.
[7] Appellees also argued that there was no DTPA violation because (i) the complaints do not arise from services sought or purchased in connection with the challenged conduct and (ii) asking a court to decide the disqualification issue cannot, as a matter of law, constitute unconscionable conduct. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2361491/ | 95 F. Supp. 2d 76 (2000)
Humberto PRADA-CORDERO, Petitioner,
v.
UNITED STATES of America, Respondent.
No. Civ. 96-2414(HL),
CRIM. 93-293(HL).
United States District Court, D. Puerto Rico.
May 8, 2000.
*77 *78 *79 Humberto Prada-Cordero, Yazoo, MS, pro se.
Warren Vazquez, U.S. Attorney's Office District of P.R., Criminal Division, Hato Rey, PR, for U.S.
OPINION AND ORDER
LAFFITTE, Chief Judge.
Before the Court is a pro se petition for postconviction relief under 28 U.S.C. § 2255 filed by Humberto Prada-Cordero ("Prada"). The indictment in his criminal case had two counts. The first count *80 charged him with conspiring to possess cocaine with intent to distribute, in violation of 21 U.S.C. §§ 841(a)(1) and 846. The second count charged him with possessing cocaine with intent to distribute, in violation of 18 U.S.C. § 2 and 21 U.S.C. § 841(a)(1).[1] Prada and a co-defendant went to trial. The trial lasted five days. After the third day of the trial, Prada fled the jurisdiction.[2] He did not appear for the last two days of his trial. His attorney Nelson Escalona Colón ("Escalona") continued to represent him.[3] At the close of all the evidence, the Court granted the Rule 29 motion that Escalona made on behalf of his client and dismissed the first count of the indictment.[4] The jury returned a verdict of guilty as to count two.
Because Prada had fled, he could not be sentenced. Approximately one year later, he surrendered to the United States Attorney in Florida and was removed to this jurisdiction. During the sentencing hearing held on February 22, 1995, he claimed that his counsel told him to flee the during the trial and assisted him in doing so. The Court then continued the sentencing and appointed new counsel for Prada.[5] Additionally, the United States Attorney conducted an investigation into the allegation of Escalona's complicity in his client's absconding.[6]
A new sentencing hearing was rescheduled, and Prada was represented by new counsel. The Court sentenced him to 110 months.[7] He appealed, and on September 6, 1996, the First Circuit affirmed his conviction in an unpublished opinion. See United States v. Prada Cordero, 82 F.3d 403, 1996 WL 172164 (1st Cir.1996). Prada then filed the present petition, claiming that he was denied his rights under the Sixth Amendment. He claims that his trial attorney failed to do an adequate investigation of the case; that Escalona was unable to properly understand or communicate in English; that he slept during substantial parts of the trial; that this sleeping and lack of proficiency in English was tantamount to Prada's being denied any legal representation; and that Escalona advised him to flee during the trial and assisted him in his flight. Prada also alleges that the attorney who represented him at sentencing was ineffective because he failed to raise the issue of his trial attorney's unacceptable performance. Prada further claims that his attorney on appeal was ineffective because he too failed to raise this issue and because this attorney failed to notify him that his appeal had been denied.
DISCUSSION
1. Performance of the trial attorney at trial
Because Prada is appearing pro se, the Court will broadly construe normal pleading requirements. See United States v. Michaud, 925 F.2d 37, 41 (1st Cir.1991). The Sixth Amendment guarantees a criminal defendant effective assistance of counsel in order to protect that defendant's fundamental right to a fair trial. Strickland v. Washington, 466 U.S. 668, 684-85, 104 S. Ct. 2052, 2063, 80 L. Ed. 2d 674 (1984). The Constitution does not guarantee a defendant a perfect or successful defense; rather, he is guaranteed "`reasonably effective assistance under the circumstances then obtaining.'" Lema v. United States, 987 F.2d 48, 51 (1st Cir. 1993) (quoting United States v. Natanel, 938 F.2d 302, 309-10 (1st Cir.1991)). A *81 court should evaluate the challenged conduct not with the benefit of hindsight, but from the attorney's perspective at the time of the trial. Strickland, 466 U.S. at 689, 104 S. Ct. at 2065; Lema, 987 F.2d at 51.
A petitioner must show, first, that his counsel's performance was deficient and, second, that this deficient performance prejudiced the defense. Strickland, 466 U.S. at 687, 104 S. Ct. at 2064; Bucuvalas v. United States, 98 F.3d 652, 658 (1st Cir.1996); Bonneau v. United States, 961 F.2d 17, 20 (1st Cir.1992). The petitioner has the burden of proving both prongs of this test, and the burden is a heavy one. Bucuvalas, 98 F.3d at 658. An attorney's performance is deficient if it is "`so inferior as to be objectively unreasonable.'" Id. (quoting United States v. McGill, 11 F.3d 223, 226 (1st Cir.1993)). The petitioner must show that, but for his counsel's deficient performance, the outcome would have been different. Strickland, 466 U.S. at 694, 104 S. Ct. at 2068; United States v. Hart, 933 F.2d 80, 83 (1st Cir.1991); Carsetti v. Maine, 932 F.2d 1007, 1012 (1st Cir.1991). He must show that his counsel's errors were so serious that they deprived him of a fair trial, a trial whose result is reliable. United States v. Ademaj, 170 F.3d 58, 64 (1st Cir.1999). There is a strong presumption that the counsel's performance comes within the wide range of reasonable professional assistance. Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. The defendant must overcome the presumption that his counsel's performance could "`be considered sound trial strategy.'" Id. (quoting Michel v. Louisiana, 350 U.S. 91, 101, 76 S. Ct. 158, 164, 100 L. Ed. 83 (1955)). The court's scrutiny of the attorney's performance must be highly deferential. Strickland, 466 U.S. at 689, 104 S. Ct. at 2065.
In the present case, Prada's primary claim is based on Escalona's performance at trial. Prada alleges that Escalona was unable to properly understand or make himself understood in English and that he slept during substantial parts of the trial. Prada argues that Escalona's sleeping and lack of proficiency in English was tantamount to a complete denial of legal representation during the trial. The actual or constructive denial of a defendant's right to counsel during a critical stage of his criminal trial will constitute prejudice per se and will result in the invalidation of the conviction. Curtis v. Duval, 124 F.3d 1, 4 (1st Cir.1997). A constructive denial of counsel may occur when the attorney is absent from the courtroom, there are conflicts of interest between the attorney and his client, there is official interference with the defense, or defense counsel "fails to subject the prosecution's case to meaningful adversarial testing." United States v. Cronic, 466 U.S. 648, 659 & n. 25, 662 n. 31, 104 S. Ct. 2039, 2047 & n. 25, 2048-49 n. 31, 80 L. Ed. 2d 657 (1984); Childress v. Johnson, 103 F.3d 1221, 1228 (5th Cir.1997); see also Ademaj, 170 F.3d at 62 (Prejudice is presumed when there has been an "`outright denial of counsel, a denial of the right to effective cross-examination, or a complete failure to subject the prosecution's case to adversarial testing.'") (quoting Scarpa v. DuBois, 38 F.3d 1, 12 (1st Cir. 1994)).
The Ninth Circuit has held that the conduct of an attorney who has slept through a substantial part of a criminal trial automatically constitutes prejudice per se. See Javor v. United States, 724 F.2d 831, 833 (9th Cir.1984). At least one court, however, has cautioned against such a broadly-applied rule in cases where attorneys have slept during trials. See Tippins v. Walker, 77 F.3d 682, 686 (2nd Cir.1996). Before finding that an attorney's sleeping during trial constitutes prejudice per se, a court should consider that it may not be unusual, during a long trial, for an attorney to become drowsy or fall asleep. See id. at 689. Additionally, a court should be cognizant that attorneys may use the appearance of sleep as a strategic tool to downplay the importance of an adversary's presentation. Id. at 688. *82 Moreover, a rule that required a finding of prejudice whenever an attorney slept during a trial would provide unscrupulous practitioners with a safety valve to annul trials that they feel they are at risk of losing. Id. at 688.
In the present case, the Court holds that the conduct of Prada's trial attorney does not constitute prejudice per se for the following reasons. First, the Court did not observe Attorney Escalona sleeping either for a substantial portion of the trial or to the extent that Prada alleges in his petition. The defense table was within the undersigned's line of sight and was only approximately twenty feet away. If Escalona had been sleeping as often as Prada claims, the Court would have noticed such conduct. It did not.
Second, a review of the trial transcript does not indicate that Prada was constructively denied his right to counsel. The record indicates that Escalona was paying attention to the proceedings[8] and actively participating in the trial.[9] He made objections, some of which were successful.[10] He vigorously cross-examined the Government's witnesses.[11] And he attempted to develop an alibi by portraying Prada as a legitimate businessperson.[12] He was not absent from the courtroom and he did not fail to subject the Government's case to meaningful adversarial testing.
Third, Prada's argument that Escalona's lack of proficiency in English constituted a denial of counsel cannot be squared with the Court's own observations. While the Court acknowledges that Attorney Escalona's diction certainly could have been better, it was not so bad, however, as to render him "absent" from the courtroom. And the transcript, as cited above, demonstrates that Escalona was following and understanding the proceedings.
Prada's claim that he suffered a complete denial of his right to counsel is more aptly characterized as a claim that he received ineffective assistance of counsel for which the Court should presume the existence of prejudice. Cf. Ademaj, 170 F.3d at 62. Such a presumption is warranted only in egregious circumstances. See id. For the same reasons that the Court finds that Prada was not denied completely his right to counsel, the Court finds that the circumstances of this case were not so extreme to warrant a presumption of prejudice. Thus, Prada must show that he was actually prejudiced by Escalona's performance. See Bucuvalas, 98 F.3d at 658. The record does not support such a showing. Escalona was able to successfully argue a Rule 29 motion and obtain a dismissal of the first count of the indictment after his client had fled the jurisdiction.
Prada complains that the Court reprimanded his counsel on a number of occasions during the trial and that this had an adverse effect on him before the jury. It is true that the Court did rebuke Escalona more than once during the proceedings. It is also true, however, that the Court instructed the jury not to consider these admonishments in its deliberation.[13] Often, a potential for prejudice can be remedied by a curative instruction to the jury. United States v. Freeman, 208 F.3d 332, 345 (1st Cir.2000). There is a presumption that jurors follow the instructions they are given. Richardson v. *83 Marsh, 481 U.S. 200, 206, 211, 107 S. Ct. 1702, 1707, 1709, 95 L. Ed. 2d 176 (1987); Arthur D. Little, Inc. v. Dooyang Corp., 147 F.3d 47, 53 (1st Cir.1998); United States v. Magana, 127 F.3d 1, 6 (1st Cir. 1997). Thus, the Court must presume that the jury in this case followed the instruction that it disregard the Court's reprimands of Escalona. Prada has not proffered any reason for the Court to presume otherwise.
2. Petitioner's claim regarding his flight
Prada also claims that Escalona assisted him in his flight in the middle of the trial. A defendant has been denied his Sixth Amendment right to counsel when the attorney who represents him at trial is implicated in the crimes for which the defendant is being tried. United States v. Gambino, 838 F. Supp. 749, 754 (S.D.N.Y.1993). In the present case, however, Prada's allegation does not implicate Escalona in the drug distribution offense for which he was being tried. Prada alleges only that Escalona was involved in his flight, an offense separate from the one for which he was being tried. Thus, Escalona's involvement in Prada's flight would not necessarily be sufficient by itself to establish a valid Sixth Amendment claim.
The Court finds Prada's claims on this issue unavailing for another reason. Prada first made these allegations regarding Escalona's complicity during what was supposed to be his sentencing hearing. At that hearing, Prada alleged that Escalona not only had helped him to flee, but also had advised him to do so.[14] In the face of these serious allegations, the Court continued the sentencing hearing and ordered that the Government investigate the matter. The investigation included interviews of both Prada and his wife. In his interview, Prada admitted that he lied in court when he stated that Escalona had advised him to leave Puerto Rico. Prada's wife did not corroborate his allegations, and the Government was unable to find any documentary evidence connecting Escalona to Prada's flight. A motion filed by the Government to inform the Court of the result of this investigation was inconclusive as to Escalona's involvement.[15] The Government investigation did not find any evidence to support Prada's allegations, and Prada has shown himself to be less than credible on this matter. Lastly, Prada has not shown that the outcome of his trial would have been different had he not fled the jurisdiction. Thus, the Court denies his claim of ineffective assistance based on Escalona's alleged involvement in his flight.
3. Petitioner's claim regarding his attorney's alleged failure to investigate
Prada's last claim regarding Escalona's performance is his allegation regarding a trip to Colombia that Escalona took as part of the pretrial investigation of the case. Erasto Miranda was a Government witness who testified about Prada's involvement in the drug distribution scheme. In part of his direct testimony Miranda narrated a trip he made to Venezuela and Colombia. He testified that he met up with Prada in Venezuela, that they spent a few days in Caracas before traveling to a town located next to the border with Colombia, and that at the border town Prada obtained a package of cocaine to be smuggled into Puerto Rico.[16] In a supplement to his 2255 petition Prada claims that prior to his trial, Escalona traveled to Colombia, ostensibly to investigate the places about which Miranda would be testifying. Prada asserts that instead of investigating the alleged scenes of the drug scheme, Escalona spent his time using cocaine and drinking. In support of this allegation, he has submitted the affidavit of a doctor in Colombia *84 who claims to have hosted Escalona during his trip. The doctor states that Escalona's trip lasted one day and that he was under the influence of alcohol or cocaine during the entire time he was there.[17] Prada claims that his counsel should have done a proper investigation in order to verify the testimony that Miranda would be giving.
Counsel for a criminal defendant must make a reasonable investigation in the preparation of his case. Kenley v. Armontrout, 937 F.2d 1298, 1304 (8th Cir. 1991). Counsel's assistance will be found to be ineffective if he has performed little or no investigation into the case. Id. Generally, a finding of ineffective assistance will be based on a failure to investigate where the evidence which the investigation would have produced would have made the defendant's conviction nearly impossible. Passos-Paternina v. United States, 12 F. Supp. 2d 231, 236 n. 4 (D.P.R.1998), aff'd 201 F.3d 428 (1st Cir.1999) (Table case).
In the present case, the problem with Prada's claim regarding this investigation is that the alleged drug scheme which took place in Colombia and Venezuela occurred in July 1990. This activity was covered by the first count of the indictment, which was dismissed when the Court granted Prada's Rule 29 motion at trial. The count for which he was found guilty dealt with an attempt in 1992 by Miranda, Prada, and Prada's co-defendant to transport one kilogram of cocaine from Puerto Rico to the continental United States. Miranda's version of what happened in Colombia in 1990 was irrelevant to the 1992 event. Thus, Prada has not shown that he suffered prejudice due to Escalona's alleged failure to investigate during his trip to Colombia.
With regard to all of Prada's claims against Escalona, the section 2255 petition and its supporting documentation fail to meet the exacting standards required by Strickland and its progeny to establish that an attorney did not provide effective assistance of counsel. Escalona actively participated in the trial and successfully obtained a dismissal of one of the counts against his client. In denying Prada's petition regarding the performance of the trial attorney, the Court does not hold that Escalona presented a flawless case. He committed errors. He could have argued some of his points more coherently and he could have been more adept in presenting some of his evidence. However, Prada was not entitled to a perfect defense. See Lema, 987 F.2d at 51. The representation he received satisfied the standards of Strickland. Therefore, the Court must deny his claim that his trial attorney did not provide him with effective assistance of counsel.
4. Performance of counsel at sentencing and on appeal
Prada also claims that the performance of both the attorney who represented him at sentencing and the attorney who represented him on appeal denied him effective assistance of counsel. Prada asserts that the failure by his attorney at sentencing to raise the issue of Escalona's ineffective assistance of counsel was itself ineffective assistance. A claim of ineffective assistance of counsel is generally not allowed in a criminal defendant's direct proceedings; it should be raised collaterally in a section 2255 petition, after the direct appeal process has been concluded. Ademaj, 170 F.3d at 64; United States v. Cofske, 157 F.3d 1, 2 (1st Cir.1998); Pratt v. United States, 129 F.3d 54, 60-61 (1st Cir.1997); United States v. Diaz-Martinez, 71 F.3d 946, 953 (1st Cir.1995); United States v. Lopez-Pineda, 55 F.3d 693, 697 (1st Cir.1995).
A counsel's performance will not be deficient merely because he declined to raise futile arguments that were destined to lose. Vieux v. Pepe, 184 F.3d 59, 64 (1st Cir.1999). Given the First Circuit's numerous rulings against raising ineffective *85 assistance claims before the appeals process has concluded, the failure of Prada's attorney to raise this issue at sentencing can hardly constitute a performance which is deficient or "so inferior as to be objectively unreasonable." See Bucuvalas, 98 F.3d at 658. Prada also complains that the attorney who represented him on appeal also failed to raise the issue of Escalona's alleged ineffective assistance. For the same reason that it was not deficient performance when his attorney at sentencing refused to raise this claim, so too was it not deficient for his appellant attorney to fail to raise this issue on direct appeal.
Lastly, Prada makes one other claim regarding the performance of his appellant attorney. He asserts that this attorney failed to notify him that the appeal had been dismissed. It is unclear how this failure could constitute ineffective assistance. The only possible prejudice to Prada from this lack of timely notice would be that any petition to the Supreme Court for review of the appellate court decision might be jeopardized. A criminal defendant has a right to counsel on his first appeal as of right. Penson v. Ohio, 488 U.S. 75, 79, 109 S. Ct. 346, 349, 102 L. Ed. 2d 300 (1988); United States v. Palomo, 80 F.3d 138, 141 (5th Cir.1996). This right does not, however, apply to subsequent discretionary appeals. Coleman v. Thompson, 501 U.S. 722, 756, 111 S. Ct. 2546, 2568, 115 L. Ed. 2d 640 (1991); Ross v. Moffitt, 417 U.S. 600, 612-19, 94 S. Ct. 2437, 2445-48, 41 L. Ed. 2d 341 (1974); Blankenship v. Johnson, 118 F.3d 312, 317 (5th Cir.1997). Nor does this right apply in the period between losing a direct appeal and filing for a discretionary review of the appellate decision. Wainwright v. Torna, 455 U.S. 586, 587-88, 102 S. Ct. 1300, 1301, 71 L. Ed. 2d 475 (1982); Miller v. Keeney, 882 F.2d 1428, 1432 (9th Cir. 1989). If Prada did not have a right to counsel at this post-appeal stage, then he could not have had a right to effective assistance of counsel either, and his appellant attorney's failure to notify him that the appeal had been dismissed could not have been a violation of any such right.
WHEREFORE, the Court denies Prada's claims that the performances of the attorneys who represented him at sentencing and on appeal constituted ineffective assistance. The Court also denies his claim regarding the performance of his trial attorney. Thus, the Court hereby denies Prada's section 2255 petition. Judgment shall be entered accordingly.
IT IS SO ORDERED.
NOTES
[1] Crim. no. 93-293(HL), docket no. 1.
[2] Crim. no. 93-293(HL), docket no. 53.
[3] Attorney Escalona has recently passed away.
[4] Crim. no. 93-293(HL), docket nos. 56 & 63.
[5] Crim. no. 93-293, docket no. 108.
[6] Crim. no. 93-293, docket no. 114.
[7] Crim. no. 93-293, docket no. 127.
[8] Docket no. 95, at 9, 25, 33, 44, 46, 48; docket no. 96, at 3-4, 52, 58-66, 123, 126, 133, 138; docket no. 97 at 39, 120.
[9] Docket no. 95, at 40, 44, 47, 48, 53; docket no. 96, at 3-4; docket no. 97, at 22, 30, 95, 129-45, 150-202.
[10] Docket no. 95, at 25, 46, 54, 55, 60; docket no. 96, at 52, 58-66, 67, 69, 71, 119, 121, 126, 127, 129; docket no. 97, at 120-21; docket no. 67, at 19.
[11] Docket no. 95, at 75-88; docket no. 96, at 5-49, 74-75, 163; docket no. 97, at 50-92.
[12] Docket no. 95, at 80-87; docket no. 96, at 9-10, 14; docket no. 97, at 106-12, 130, 164.
[13] Docket no. 67, at 2.
[14] Crim. no. 93-293(HL), docket no. 108.
[15] Crim. no. 93-293(HL), docket no. 114.
[16] Crim. no. 93-293(HL), docket no. 96, at 120-25.
[17] Civil no. 96-2414(HL), docket no. 9. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2468063/ | 497 S.W.2d 600 (1973)
H. M. BODDY, Appellant,
v.
Gene GRAY, Appellee.
No. 8344.
Court of Civil Appeals of Texas, Amarillo.
April 16, 1973.
Rehearing Denied April 16, 1973.
*601 Nelson, Sherrod, Carter & Oldham, Walter Nelson, Wichita Falls, for appellant.
Kolander, Templeton & Hamilton, Hal Miner, Amarillo, for appellee.
ON MOTION FOR REHEARING
ELLIS, Chief Justice.
Our original opinion is withdrawn, and the following opinion, issued subsequently to appellant's motion for rehearing, is substituted therefor:
This is an appeal from a take nothing summary judgment rendered against a plaintiff seeking relief in an action based upon the defendant's alleged breach of an agreement to purchase certain real estate from the plaintiff. Affirmed.
H. M. Boddy, plaintiff-appellant, instituted a suit against Gene Gray, defendant-appellee, seeking specific performance, or, alternatively, damages for an alleged breach by Gray of an agreement to purchase certain ranch lands owned by Boddy. Gray pleaded the statute of frauds as a defense. Also, Gray filed a motion for summary judgment alleging that the various separate writings relating to the real estate transaction failed to comply with the requirements of the statute of frauds and were therefore unenforceable. Boddy filed a motion for summary judgment pleading the existence of a binding contractual relationship between the parties for the sale of the land. The trial court granted Gray's motion for summary judgment and denied Boddy's claim for relief. From the judgment rendered, Boddy brings his appeal asserting two points of error. He challenges the judgment on the grounds that (1) the writings in evidence are sufficient as a contract to comply with the statute of frauds, or (2) even if the statute of frauds were not satisfied, promissory estoppel has been established as a bar to the defense based upon such statute.
Boddy is the owner of 1280 acres of ranch land located in Little River County, Arkansas. Also, Boddy was the lessee of certain adjacent land under a lease dated July 6, 1971, from Otis Dante and J. B. Seligson, as lessors. Following a telephone call from Gray to Boddy concerning the possible sale of the land owned by Boddy, *602 the parties met, drove over the land, and discussed the price. Subsequently, there were various conversations between the parties concerning the prospective sale and purchase of the land. On September 1, 1971, the parties signed a handwritten notation or memorandum which reads as follows:
" 9-1-7
"Price 360,000
Cash 60,000
Cash FLB 250,000
2nd lien 50,000 360,000
_______ _______
-0-
"2nd lien payable 6500 annually1st pmt 1-15-73
interest calculated at PCA+½%bal on prin.
"Texas due Oct. 1971 to be paid by Boddy. All
Equipment to go with place except 2 horses, saddles,
Ford tractor & equipment.
"Hay in barn to be paid for by Gray at 50¢
"Leases on Seligson Dante and Mr. Locke to be assigned
in so far as possible
H. M. Boddy
Gene Gray"
An application, dated September 13, 1971, was made by Gray for a loan with the Federal Land Bank Association in Texarkana, Arkansas. In the application form it was stated that the purpose of the loan was to purchase the 1280 acres of land described therein from Boddy at a purchase price of $360,000. The loan was subsequently approved, and on October 14, 1971, Gray received from the Federal Land Bank in Texarkana an attorney's title opinion showing the condition of the title. The Federal Land Bank had in its possession the necessary information and instruments to clear the title to the land by November 10, 1971, the date purportedly scheduled for closing the transaction. Also, the record contains a copy of an assignment to Gray of the Seligson-Dante lease, dated November 1, 1971, executed by Boddy and Gray. There is summary judgment evidence to the effect that Boddy had some cattle on the Little River County land that he sold and removed part of the cattle preparatory to his giving possession of the land by November 10, 1971. On approximately November 8, 1971, Gray notified the Federal Land Bank that the loan would not be closed on November 10. Also, on approximately November 8, Gray notified Boddy that he had decided not to buy the ranch, and on December 15, 1971, Gray finally advised Boddy that he would proceed no further toward closing the transaction. Boddy claims that he is entitled to specific performance, or to recover damages for losses and expenses resulting from the sale of some of his breeding cattle, the moving of other cattle and consequent interference with his ranching operations, all of which were occasioned by Gray's alleged breach of the contract.
In his first point of error, Boddy contends that the trial court erred in granting Gray's motion for summary judgment on the basis of non-compliance with the statute of frauds since Gray failed to establish as a matter of law that there was no memorandum in writing signed by Gray as required by the statute.
The Statute of Frauds, Tex.Bus. & Commerce Code Ann. § 26.01, V.T.C.A., provides in part:
"(a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
"(1) in writing; and
"(2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
"(b) Subsection (a) of this section applies to"
* * * * * *
"(4) a contract for the sale of real estate;"
Boddy contends that there are three separate writings which, when combined, serve to constitute a contract sufficient to satisfy the requirements of the statute of frauds. The first writing or memorandum, hereinabove set out, dated "9-1-7," consists of certain figures and statements, including a reference to the assignment of certain *603 leases, but there is not included within the writing any promise to buy "land," and it does not describe the parties or the land purported to be the subject of the contract. The loan application is the second writing which Boddy contends is part of the contract. Although the stated purpose of applying for the loan relates to the matter of securing part of the purchase price of the property, the application makes no reference to the above mentioned memorandum and contains no language expressly indicating the existence of a binding agreement on the part of Gray to buy the land therein described. The third writing contended to be a part of the "contract" is the assignment of the Seligson-Dante lease. It contains no promise to buy or any description of or reference to the Boddy land.
A written contract for the sale of realty is void under the statute of frauds if it does not describe the land in such a way as to identify it with reasonable certainty. Smith v. Sorelle, 126 Tex. 353, 87 S.W.2d 703 (1935); Smith v. Griffin, 131 Tex. 509, 116 S.W.2d 1064 (Tex. Com.App.1938, opinion adopted). This description must be furnished within the original writing itself, or by reference to some other existing writing. The original writing, dated "9-1-7." makes no reference to any other writing. Although it contained the initials F.L.B. with 250,000 written on the same line, we do not consider that such notation is sufficient reference to incorporate the loan application to the Federal Land Bank into the first memorandum. Wilson v. Fisher, 144 Tex. 53, 188 S.W.2d 150 (Tex.Com.App.1945, opinion adopted). Even if sufficient reference be assumed, the loan application was not in existence until September 13, 1971, which fact would preclude its incorporation. Wilson v. Fisher, supra.
In order to satisfy the requirements of the statute of frauds, the writings must be complete within themselves in every material detail and must contain all the essentials of a contract so that they may be ascertained from the writings without resort to parol testimony. Thus, we can only look to the writings for the essential elements of the alleged contract. Wilson v. Fisher, supra; Bachman Center Corp. v. Sale, 359 S.W.2d 290 (Tex.Civ.App., Dallas 1962, writ ref'd n.r.e.).
Plaintiff seeks to support its contention that each of the three writings should be considered as an integral part of the contract by the holding in Adams v. Abbott, 151 Tex. 601, 254 S.W.2d 78 (1952). Under the facts of that case, the different writings were related to each other in that they were letters communicating offers and counteroffers to the different parties of the transaction. These letters were considered to be an integral part of the contract due to the relation between them, but in the present case, the loan application is independent of any binding obligation between plaintiff and defendant. Boddy further contends that a memorandum is required by the statute of frauds, not for the purpose of obtaining a contract in writing, but merely to furnish written evidence, signed by the party to be charged, of the obligation to be enforced against him, citing Adams as authority. But it must be recognized that in the instant case, the application for a loan is not evidence of any written obligation. The making of the application was a procedure for determining whether a loan could be secured, but it did not evidence any obligation on the part of Gray to purchase the therein described land. The fact that the application form states that the purpose of the loan was to purchase 1280 acres of land for $360,000 does not bind Gray to such a purchase when there is no reference to any written promise on the part of Gray to buy such land. This case is distinguishable from Adams v. Abbott, supra, because of the absence of interrelated reference to the different instruments relied upon to constitute the contract.
Assuming the existence of a sufficient relationship between the different *604 instruments, there is no evidence of a written promise to buy or sell the particular land involved in the suit and thus no obligation on the part of either party. The writings do not disclose any written promise on the part of Gray to purchase the land in question. When the statute of frauds is asserted as a defense, it is necessary that the written memorandum show an agreement. Moore Bros. v. Kirkpatrick, 172 S.W.2d 135 (Tex.Civ.App., Eastland 1943, no writ). "(A)n instrument that creates no right and imposes no obligation is not a contract, and no right of action can be predicated on it." 13 Tex. Jur.2d Contracts § 2 (1960). Further, since the essential elements of a contract required to be in writing can never be supplied by parol evidence, Buratti and Montandon v. Tennant, 147 Tex. 536, 218 S.W.2d 842 (1949), we have concluded that the written instruments relied upon in this case are not sufficient to comply with the statute of frauds. We, therefore, overrule appellant's first point of error.
In his second point of error, Boddy contends that even if the statute of frauds had not been satisfied as a matter of law, his summary judgment proof would avoid the statute of frauds defense asserted by Gray on the theory of promissory estoppel and thereby entitle him to the relief sought in this suit. Gray joins issue and contends that the doctrine of promissory estoppel is wholly inapplicable to the facts of this case. Boddy relies upon the holding of the Texas Supreme Court in the case of "Moore" Burger v. Phillips Petroleum Co., et al., 492 S.W.2d 934 wherein the agreement sought to be enforced was not signed by the defendant, but the summary judgment evidence was sufficient to raise factual issues of promissory estoppel in avoidance of the defense of the statute of frauds. Under the summary judgment proof in "Moore" Burger, there was a definite promise upon which the plaintiff relied, that promise being that a twenty year lease, clear and definite in its terms, would be signed by the defendant's trustee if the plaintiff would not bid on the property at a public auction. The plaintiff relied upon such promise to sign the lease, the lease was not signed, and the court held that if such evidence be accepted as true, the enforcement of the statute of frauds would plainly amount to a fraud upon the plaintiff's rights. Further, the opinion sets out that promissory estoppel is to be regarded as a defensive pleaa plea in avoidance and confessionserving the function of estopping a promissor from denying the enforcibility of his promise.
We note that the original opinion in "Moore" Burger was dated October 4, 1972, and that on March 7, 1973, a supplemental opinion by the Supreme Court was issued on motion for rehearing, 492 S.W.2d 940, wherein it was stated:
"Respondents read the Court's opinion to make any promise enforceable, though within the proscription of the statute of frauds, if foreseeable action or forbearance by the promisee meets the requirements of Section 90 of the Restatement of Contracts[1] (or fulfills Section 217A of the Restatement, Second, Supp.Tent. Draft No. 4, 1969). This is not the holding.
"The promise which is determinative here is the promise to sign a written agreement which itself complies with the statute of frauds. No other promise was discussed by the Court in the recitation of the summary judgment evidence, whereas promises to sign were set forth at two points, followed by the recitation that, relying on these promises, `Moore' Burger did not bid at the sale of the City land. This is the significance of the emphasis upon Section 178, comment f, Restatement, Contracts, and the citation to Cooper Petroleum Co. v. La Gloria *605 Oil and Gas Co., 436 S.W.2d 889, 896 (Tex.1969), where `the promise was to sign a written guaranty, and a written guaranty would have been enforceable.'"
It has been held that an agreement for the sale of land cannot be specifically enforced unless the contract involved is sufficiently definite in its essential provisions. Bryant v. Clark, 163 Tex. 596, 358 S.W.2d 614 (1962). Further, contracts for the sale of real estate not in compliance with the requirements of statute of frauds not only cannot be specifically enforced, but for the same reason a claim for damages will not be enforced. See Wilson v. Fisher, supra; Robertson v. Melton, 131 Tex. 325, 115 S.W.2d 624, 118 A.L.R. 1505 (1938). Also, see the concurring opinion of Justice Greenhill in Wheeler v. White, 398 S.W.2d 93, 98 (Tex.1965).
As set out in the forepart of this opinion, the writings relied upon in the instant case, although signed by Gray, did not sufficiently constitute an enforceable written contract for the sale of the land in question as required by the statute of frauds. Thus, it is our opinion, that this case is distinguishable from "Moore" Burger v. Phillips Petroleum Co., et al., supra, for as stated in the supplemental opinion by the Supreme Court, the promise which was determinative there was the promise to sign a "written agreement which itself complies with the statute of frauds." The agreement in "Moore" Burger which the defendant's trustee promised to sign was complete as an enforceable obligation, and the promise to sign a guaranty in La Gloria was a written agreement "which would have been enforceable." In those cases the agreements were complete in all their essential terms, and only the "promised" signature was lacking. Here, the writings purporting to constitute an agreement were not sufficient as an enforceable contract for the sale of land "which itself complies with the statute of frauds." The writings, although signed by Gray, in the aggregate, contained neither a binding promise to buy nor other vital terms such as specific interest rate on the larger loan or a definite time for possession of the premises, all demonstrating that the purported contract was not complete in all essential terms.
The essential elements of the contract itself cannot be created by estoppel; rather estoppel serves to prevent a party's conduct and actions from operating as a denial of a contractual obligation already created. See Southland Life Ins. Co. v. Vela, 147 Tex. 478, 217 S.W.2d 660 (1949); Reeves v. New York Life Ins. Co., 421 S.W.2d 686 (Tex.Civ.App., Dallas 1967, writ ref'd n. r. e.). Also, see Wheeler v. White, supra.
The cases hereinabove cited demonstrate the strictness of the standards to be applied in instances wherein it is sought to avoid the defense of the statute of frauds by invoking the equitable doctrine of promissory estoppel. From a review of the summary judgment evidence submitted, we have concluded that since the terms of the purported written contract here in question were not sufficiently established as an enforceable agreement, the doctrine of promissory estoppel has no application in this case.
Thus, it is our opinion that the purported contract under which the appellant seeks relief is unenforceable by reason of noncompliance with the requirements of the statute of frauds, and that the defense asserted under the statute has not been barred by the doctrine of promissory estoppel. Accordingly, the judgment of the trial court is affirmed, and the appellant's motion for rehearing is overruled.
NOTES
[1] "A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2104743/ | 13 S.W.3d 47 (1999)
Holly RODRIGUEZ, Individually and as Heir of the Estate of Lorenzo Rodriguez, Jr., Appellant,
v.
TINSMAN & HOUSER, INC., Appellee.
No. 04-99-00177-CV.
Court of Appeals of Texas, San Antonio.
December 15, 1999.
*48 Douglas W. Alexander, Scott, Douglass & McConnico, L.L.P., Austin, for Appellant.
George H. Spencer, Clemens & Spencer, San Antonio, for Appellee.
Sitting: CATHERINE STONE, Justice, SARAH B. DUNCAN, Justice, KAREN ANGELINI, Justice.
OPINION
Opinion by: CATHERINE STONE, Justice.
Holly Rodriguez appeals from a summary judgment granted in favor of Tinsman & Houser, Inc. on her claims for legal malpractice. Judgment was granted in favor of Tinsman & Houser on its affirmative defense that Rodriguez's suit was time barred. For the following reasons, we affirm the trial court's judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In May 1992, Rodriguez's husband, Lorenzo Rodriguez, died in a plane crash. In April 1993, Rodriguez consulted with the law firm of Tinsman & Houser about potential claims and damages arising out of the crash, and was advised against pursuing a lawsuit. On July 14, 1995, more than two years after the her husband's accident, Rodriguez learned that other individuals had successfully prosecuted claims related to the 1992 crash. Armed with that information, Rodriguez pursued the instant legal malpractice suit against Tinsman & Houser for its alleged negligence in the 1993 client consultation.
Rodriguez filed suit on July 3, 1997. At that time, Lewis Miltenberger and James Jay, Rodriguez's attorneys, instructed the clerk not to issue citation for service. The attorneys decided to personally notify Tinsman & Houser about the lawsuit through written correspondence in which they would also inquire whether the law firm would waive service of citation. That intended gesture of professional courtesy, however, was never sent. Jay discovered the omission on July 29, 1997, and requested issuance of citation on July 31, 1997. Tinsman & Houser was served on August 8, 1997.
Tinsman & Houser moved for summary judgment, arguing that Rodriguez failed to exercise due diligence in procuring service of citation, and thus failed, as a matter of law, to toll the statute of limitations. In response, Rodriguez submitted an affidavit *49 from Miltenberger, in which he explained that the delay in procuring service of citation was due to miscommunication between himself and Jay; both men thought the other had sent the proposed correspondence to Tinsman & Houser. Rodriguez argued that the miscommunication between her attorneys, coupled with their prompt request of service of citation once the error was discovered, raised a fact issue regarding diligence, thereby defeating Tinsman & Houser's entitlement to judgment on the affirmative defense of limitations. The trial court granted summary judgment in favor of Tinsman & Houser.[1]
TIMELY "BRINGING SUIT"
The parties contend that Rodriguez's claims for malpractice against Tinsman & Houser accrued on July 14, 1995, the date on which she learned that she had potential claims related to her husband's death and that the statute of limitations on those claims had expired. We agree this is the latest date upon which Rodriguez's claims accrued. Thus, in order to recover for such claims, Rodriguez was required to "bring suit" no later than July 14, 1997. See TEX.CIV.PRAC. & REM.CODE ANN. § 16.003 (Vernon Supp.1999) (tort action must be brought within two years of time tort was committed); Burnap v. Linnartz, 914 S.W.2d 142, 148 (Tex.App.-San Antonio 1995, writ denied) (recognizing that malpractice claims sound in tort, and are, therefore, governed by two year statute of limitations). "Bringing suit" within a limitations period involves both filing a petition within the applicable time period and exercising due diligence in serving the defendant with citation. See Gant v. DeLeon, 786 S.W.2d 259, 260 (Tex.1990). When, as here, the plaintiff files her petition within the limitations period, but does not serve the defendant until after the statutory period has run, her suit is time barred unless it is shown that she exercised diligence in effecting service. Id. That is, the date of service will relate back to the date of the petition's filing if the plaintiff exercised diligence in effecting service. Id.
The existence of due diligence is usually a fact question determined by a two-prong test: (1) whether the plaintiff acted as an ordinarily prudent person would have acted under the same or similar circumstances; and (2) whether the plaintiff acted diligently up until the time the defendant was served. Hodge v. Smith, 856 S.W.2d 212, 215 (Tex.App.-Houston [1st Dist.] 1993, writ denied); see Liles v. Phillips, 677 S.W.2d 802, 809 (Tex. App.-Fort Worth 1984, writ ref'd n.r.e.). A lack of diligence will be found as a matter of law, however, if no valid excuse for lack of service is offered, or if the lapse of time and the plaintiff's acts, or inaction, conclusively negate diligence. Hansler v. Mainka, 807 S.W.2d 3, 5 (Tex.App.-Corpus Christi 1991, no writ). An offered explanation must involve diligence to seek service of process. Weaver v. E-Z Mart Stores, 942 S.W.2d 167, 169 (Tex.App.-Texarkana 1997, no writ). Stated differently, lack of diligence can be found even in the face of an offered explanation, if that explanation affirmatively established lack of reasonable diligence. See id. at 170.
To obtain summary judgment on the basis that an action was not served within the applicable limitations period, the movant must show that, as a matter of law, diligence was not used to effectuate service. Zale Corp. v. Rosenbaum, 520 S.W.2d 889, 891 (Tex.1975); Gant, 786 S.W.2d at 260. In deciding whether a *50 disputed material fact issue precludes summary judgment, the reviewing court will take as true all evidence favoring the non-movant. Nixon v. M.R.R. Property Management, 690 S.W.2d 546, 548-49 (Tex.1985). Every reasonable inference from the evidence will be indulged in favor of the non-movant, and any doubts will be resolved in its favor. Id. at 549.
ARGUMENT
On appeal, Rodriguez's sole contention is that the trial court improperly granted summary judgment because she filed a response to Tinsman & Houser's summary judgment motion in which the relatively short delay in effecting service was explained. Rodriguez contends that because she offered an excuse for the delay in effecting service, summary judgment was appropriate only if the lapse of time and her actions were such that they conclusively negated diligence. We disagree.
Rodriguez's argument is premised upon two erroneous assumptions, the first of which is that any offered explanation of delay raises a fact issue about diligence, thereby precluding summary judgment. In support of this contention, Rodriguez relies primarily upon Holt v. D'Hanis State Bank, 993 S.W.2d 237 (Tex.App.-San Antonio 1999, no pet.), wherein this court, in responding to the argument that a three-month delay in procuring service is not a lack of diligence as a matter of law, determined that notwithstanding the lapse of time, summary judgment was proper because no explanation of delay was offered. Holt, 993 S.W.2d at 241. This court noted that the non-movant "could have raised a fact issue by filing a response" to the summary judgment motion, but in failing to do so did not satisfy his burden of establishing due diligence. Id. (emphasis added). This language, contrary to Rodriguez's suggested reading, does not imply that the mere assertion of an explanation will raise a fact issue about diligence. Rather, this language, through the court's use of qualified terms, implicitly incorporates the general rule that a fact issue exists if the offered explanation is reasonable or valid. See e.g., Jimenez v. County of Val Verde, 993 S.W.2d 167, 168 (Tex.App.-San Antonio 1999, pet. denied) (explanation that attorney relied upon process server failed as matter of law to raise fact issue on obligation to show diligence); Weaver, 942 S.W.2d at 169-70 (explanation of delay based on ignorance of law failed as matter of law to raise fact issue on obligation to show diligence).
The second erroneous assumption in Rodriguez's argument is that her proffered explanation of delay constitutes a valid explanation. The proffered explanation of miscommunication is not valid because it does not involve diligence to seek service of process. See Weaver, 942 S.W.2d at 169. A plaintiff's duty to use diligence continues from the date suit is filed until the date the defendant is served. Hodge, 856 S.W.2d at 215. Here, at the time suit was filed, Miltenberger and Jay expressly directed the clerk not to issue citation for service. Although this instruction was based on a well-intended gesture of a professional courtesy to obtain a waiver of service, a valid alternative to formal process, Miltenberger and Jay failed to take any steps beyond the conception of the idea to accomplish their goal. Miltenberger and Jay's inactivity distinguishes the instant case from Hodge, Valdez v. Charles Orsinger Buick Co., 715 S.W.2d 126 (Tex.App.-Texarkana 1986, no writ), and Saenz v. Keller Indus. of Texas, Inc., 951 F.2d 665 (5th Cir.1992), cases upon which Rodriguez relies to argue that inadvertent attorney conduct provides a valid excuse for delay in service.
In Hodge, the plaintiff's attempt to effect service on the defendant by publication was rendered ineffective due to counsel for plaintiff's inadvertent failure to sign a supporting affidavit. Hodge, 856 S.W.2d at 216. Despite the defect, the district clerk published the citation and provided postcard notice that the defendant had been served. Id. Relying on the invalid *51 citation by publication, counsel for plaintiff delayed in obtaining personal service for many months. Id. The Hodge court reversed the defendant's summary judgment based on limitations, finding that the attorney's explanation constituted a valid excuse of delay because the attorney had reason to believe he had effected service by publication. Id. at 217.
In Valdez, the plaintiff sued two defendants. Valdez, 715 S.W.2d at 127. When suit was filed, the fee paid to issue citation of service was insufficient payment for service on both defendants. Id. at 128. The insufficient payment was due to miscommunication between the law firm's secretary and the clerk's office; the secretary believed the fee would cover both defendants and the clerk's office assumed only one citation was to be issued. Id. Consequently, only one defendant was timely served; the other defendant was not served until eight months after the limitations period had expired. Id. at 127. The Valdez court reversed the defendant's summary judgment, finding that the proffered excuse of miscommunication between the law firm and the clerk's office was sufficient to raise a fact issue as to whether the plaintiff exercised reasonable diligence. Id. at 128.
In Saenz, issuance and service of process were obtained after the expiration of the limitations period. Saenz, 951 F.2d at 666-67. Counsel for plaintiff's failure to submit a required summons request form at the time suit was filed occasioned the delay. Id. at 667. The omission was due to the attorney's miscommunication with the clerk's office coupled with his failure to observe local rules. Id. at 666-67. Reversing the defendant's summary judgment based on limitations, the Fifth Circuit concluded that the attorney's inadvertence was not enough to conclusively negate due diligence. Id. at 668.
The instant case, however, unlike Hodge, Valdez, and Saenz, does not involve miscalculated attempts to effect service that, due to miscommunication or inadvertence, were not discovered until after the expiration of the limitations period. Rather, the instant case involves inactivity or complete failure to attempt service that was due to miscommunication. While the former scenarios may involve fact issues on diligence, thereby making summary judgment improper, the latter scenario does not. It does not because there are no efforts from which to evaluate the reasonableness or diligence of the actor.
Here, Miltenberger and Jay directed the clerk not to issue citation. Although they discussed a certain course of action to accomplish notice and service, it is undisputed that they did not take steps in furtherance of that plan until after the limitations period had run. That is, it is not as if the planned correspondence was mailed to the wrong address; it simply was never sent. Thus, notwithstanding the well-intended gesture of professional courtesy, it cannot be said that Miltenberger and Jay exercised diligence or continual diligence in attempting to serve Tinsman & Houser from the time suit was filed until service was accomplished. See Hodge, 856 S.W.2d at 215. Because Rodriguez's proffered excuse does not involve diligence in attempting to effectuate service, we find that her explanation is not valid, and therefore, it fails to raise a fact issue on diligence. See Weaver, 942 S.W.2d at 170. An invalid explanation of delay, like no explanation for delay, constitutes lack of diligence as a matter of law. See Jimenez, 993 S.W.2d at 168. It matters not, therefore, that service in the instant case was accomplished within a relatively short of time after the expiration of the limitations period. See Perkins v. Groff, 936 S.W.2d 661, 668 (Tex.App.-Dallas 1996, writ denied) (upholding summary judgment based on expiration of limitations because plaintiff failed to explain eighteen-day delay between expiration of limitations and service). We thus conclude that the trial court correctly determined that the limitations period was not tolled and the suit was barred by the statute of *52 limitations. Rodriguez's sole point of error is overruled.
The judgment of the trial court is affirmed.
NOTES
[1] In July 1998, the Honorable Michael Peden granted Tinsman & Houser's motion for summary judgment in part on Rodriguez's claims alone. That July order, which did not dispose of Rodriguez's daughter's claims, was rendered final in December 1998, when the Honorable David Berchelmann, Jr. signed a summary judgment disposing of Rodriguez's daughter's claims. The instant appeal concerns only the propriety of the July 1998 summary judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2901771/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
ANA L. CONTRERAS AND FELIPE
MEDINA BOTH INDIVIDUALLY
AND D/B/A MILLENNIUM
ELECTRICAL CONTRACTORS,
Appellants,
v.
CRESCENT ELECTRIC SUPPLY
COMPANY,
Appellee.
§
§
§
§
§
No. 08-05-00163-CV
Appeal from the
County Court at Law No. 3
of El Paso County, Texas
(TC#2004-4591)
MEMORANDUM OPINION
Pending before the Court is the Appellants’ motion to affirm the appealed judgment
pursuant to Tex. R. App. P. 42.1(a)(1), which states:
(a) On Motion or By Agreement. The appellate court may dispose of an appeal as
follows:
(1) On Motion of Appellant. In accordance with a motion of appellant,
the court may . . . affirm the appealed judgment . . . unless disposition
would prevent a party from seeking relief to which it would otherwise
be entitled.
The Appellants have complied with the requirements of Rule 42.1(a)(1). Appellants
have requested that the Court grant their motion to affirm the appealed judgment pursuant
to Texas Rules of Appellate Procedure Rule 43.2(a) because the parties have successfully
mediated and settled the underlying action. Texas Rules of Appellate Procedure Rule 43.2(a)
provides that the appellate court may affirm the trial court’s judgment. The Court has
considered this cause on the Appellants’ motion and concludes the motion should be granted
and the trial court’s judgment be affirmed. The costs shall be borne by the party incurring
same.
RICHARD BARAJAS, Chief Justice
August 18, 2005
Before Barajas, C.J., McClure, and Chew, JJ. | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2901648/ | Criminal Case Template
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
ROBERTO CASTOR,
Appellant,
v.
THE STATE OF TEXAS,
Appellee.
§
§
§
§
§
No. 08-05-00329-CR
Appeal from the
41st District Court
of El Paso County, Texas
(TC# 20020D01892)
O P I N I O N
This is an attempted appeal from a judgment of conviction for the offense of
aggravated assault. The issue before us is whether Appellant timely filed his notice of
appeal. We conclude that he did not and dismiss the attempted appeal for want of
jurisdiction.
The record reflects that the trial court imposed sentence in open court on October 7,
2004. Appellant filed an untimely motion for new trial on November 15, 2004. He filed his
notice of appeal on February 25, 2005. A timely notice of appeal is necessary to invoke this
Court’s jurisdiction. Olivo v. State, 918 S.W.2d 519, 522 (Tex. Crim. App. 1996). Tex. R.
App. P. 26.2(a) prescribes the time period in which notice of appeal must be filed by the
defendant in order to perfect appeal in a criminal case:
(a) By the Defendant. The notice of appeal must be filed:
(1) within 30 days after the day sentence is imposed or suspended in open court, or
after the day the trial court enters an appealable order; or
(2) within 90 days after the day sentence is imposed or suspended in open court if the
defendant timely files a motion for new trial.
Therefore, a defendant’s notice of appeal is timely if filed within thirty days after the
day sentence is imposed or suspended in open court, or within ninety days after sentencing
if the defendant timely files a motion for new trial. See Tex. R. App. P. 26.2(a); Olivo, 918
S.W.2d at 522. Rule 26.3 allows for an exception: A court of appeals may grant an
extension of time to file notice of appeal if the notice is filed within fifteen days after the last
day allowed and, within the same period, a motion is filed in the court of appeals reasonably
explaining the need for the extension of time. See Tex. R. App. P. 26.3; Olivo, 918 S.W.2d
at 522. Under Rule 26.3, a late notice of appeal may be considered timely so as to invoke a
court of appeals’ jurisdiction if (1) it is filed within fifteen days of the last day allowed for
filing, (2) a motion for extension of time is filed in the court of appeals within fifteen days
of the last day allowed for filing the notice of appeal, and (3) the court of appeals grants the
motion for extension of time. Olivo, 918 S.W.2d at 522.
When a defendant appeals from a conviction in a criminal case, the time to file notice
of appeal runs from the date sentence is imposed or suspended in open court, not from the
date sentence is signed and entered by the trial court. See Rodarte v. State, 860 S.W.2d 108,
109 (Tex. Crim. App. 1993); George v. State, 883 S.W.2d 250, 251 (Tex. App.--El Paso
1994, no pet.); Reyes v. State, 883 S.W.2d 291, 292 (Tex. App.--El Paso 1994, no pet.). As
the motion for new trial was not timely, the last date allowed for timely filing of the notice
of appeal was November 6, 2004, thirty days after the day the sentence was imposed in open
court. See Tex. R. App. P. 26.2(a)(1). No motion for extension of time pursuant to Rule 26.3
was filed. Because Appellant did not file his notice of appeal until February 25, 2005, and
he failed to file a motion for extension of time, he failed to perfect this appeal. Accordingly,
we dismiss the appeal for want of jurisdiction.
RICHARD BARAJAS, Chief Justice
November 3, 2005
Before Barajas, C.J., McClure, and Chew, JJ.
(Do Not Publish) | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2901532/ | COURT OF APPEALS
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
ERNESTO
POBLANO,
Appellant,
v.
THE STATE OF
TEXAS,
Appellee.
'
'
'
'
'
No. 08-03-00529-CR
Appeal from the
41st District Court
of El Paso County, Texas
(TC#20030D02688)
MEMORANDUM
OPINION
On December 30, 2003, this Court gave
notice to appellant that it appears there was no appealable
order or judgment entered by the trial court and therefore this Court lacks
jurisdiction. This Court gave appellant
until January 16, 2004 to show grounds for continuing the appeal, or this Court
would dismiss for want of jurisdiction.
This Court has not received a response.
Therefore, the case is hereby dismissed for want of jurisdiction.
SUSAN
LARSEN, Justice
February 12, 2004
Before Panel No. 1
Larsen, McClure, and Chew,
JJ.
(Do Not Publish) | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2159056/ | 802 A.2d 285 (2002)
In re INFINITY BROADCASTING CORPORATION SHAREHOLDERS LITIGATION
No. 594, 2001, 595, 2001.
Supreme Court of Delaware.
Submitted: April 17, 2002.
Decided: June 27, 2002.
Brian P. Glancy of Hughes, Sisk & Glancy, P.A., Wilmington, Delaware; Michael G. Brautigam, pro hac vice (argued) for Proposed Intervenor Objector Below, Appellant.
William L. Garrett, Jr., Wilmington, Delaware; Richard B. Brualdi, pro hac vice (argued) for Appellants Linda Juarez and Anne M. Pezza-Fiorillo.
Norman M. Monhait of Rosenthal, Monhait, Gross & Goddess, P.A., Wilmington, Delaware; Pamela S. Tikellis of Chimicles & Tikellis LLP, Wilmington, Delaware; Arthur N. Abbey, pro hac vice (argued) for Plaintiffs Below-Appellees.
A. Gilchrist Sparks, III and Jon E. Abramczyk (argued) of Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware for Appellees-Defendants David J. McLaughlin, William S. Levine, Arturo R. Moreno, Bruce S. Gordon, Jeffrey Sherman, George H. Conrades, Robert Downs Walter, Mel Karmazin, Farid Suleman, Sumner Redstone, Infinity Broadcasting Corporation and Viacom Inc.
Before WALSH, HOLLAND and STEELE, Justices.
*287 PER CURIAM.
In October 2001, the Court of Chancery approved a settlement reached between Appellees, defendants-below, Infinity Broadcasting and Viacom, Inc. and Appellees, plaintiffs-below, Infinity shareholders in response to litigation challenging the fairness of a tender offer by Viacom. Before the merger, Viacom owned approximately 64 percent of the outstanding equity in Infinity. In August 2000, Infinity announced that Viacom had offered to acquire the remaining shares of Infinity common stock in return for Viacom common stock. The proposed exchange ratio was 0.564 shares of Viacom stock for each share of Infinity stock.
Almost immediately after the announcement, a number of Infinity's minority stockholders filed eleven separate actions in the Court of Chancery, each challenging the fairness of the Viacom offer. In addition, several similar suits were filed in other jurisdictions, including two suits filed by Appellants, intervenors-below, Linda Juarez and Anne M. Pezza-Fiorillo in the New York Supreme Court for New York County, which is the principal place of business for both Infinity and Viacom. Although the Delaware cases were consolidated into a single action, Juarez and Pezza-Fiorillo chose not to intervene here until they filed their challenge to the Court of Chancery's approval of a settlement of the consolidated suit and their petition for a portion of the Chancellor's award of attorneys' fees. The latter is at the heart of the appeal before us.
Less than three months after the announcement of the offer, the Delaware plaintiffs entered into a global settlement with Infinity on behalf of a class consisting of Infinity shareholders. Appellant, objector-below, *288 Len Fernandes[1] objected to the settlement in the Court of Chancery on the grounds that its terms were unfair and tainted by inadequate class representation. He now appeals the Chancellor's decision overruling his objection. Appellants Juarez and Pezza-Fiorillo raise a separate issue on appeal, namely that the Chancellor erred in his allocation of an award of 2.25 million dollars in attorneys' fees to counsel appearing in the Delaware Action. Juarez and Pezza-Fiorillo contend that they conferred a substantial benefit to the class as a result of their prosecution of the New York litigation and that the Chancellor wrongly denied their counsel a share of that award. After considering those arguments, we find that the Chancellor based his decision on the correct interpretation and application of Delaware law and that his factual findings have ample support in the record. Therefore, we affirm the judgment of the Court of Chancery.
The Delaware Action and Settlement
After Infinity shareholders filed eleven substantially identical complaints in the Court of Chancery, the court quickly consolidated the separate suits into a single action.[2] Each of these putative class actions alleged that Infinity, its board of directors, and Viacom breached their respective fiduciary duties of loyalty and care arising out of the factual assertion that the amount of Viacom stock offered as consideration for the merger was inadequate. In each instance, the proposed class consisted of all holders of Infinity common stock, excluding, of course, the defendants. The plaintiffs sought to enjoin the merger and to recover both compensatory and punitive damages, as well as attorneys' fees and costs. Once the court had consolidated the cases, the Chancellor appointed the law firms of Milberg Weiss Bershad Hynes & Lerach, LLP and Abbey Gardy & Squitieri as co-lead counsel and the Delaware firms of Chimicles & Tikellis and Rosenthal Monhait Gross & Goddess, P.A. as co-liaison counsel to oversee the prosecution of the Delaware Action.
Concurrent to the litigation, and similarly in response to Viacom's offer, Infinity appointed a special committee of independent directors to provide recommendations to its board of directors concerning the proposed merger and to conduct any necessary negotiations with Viacom's representatives. The record reveals that the special committee and Viacom engaged in extensive talks concerning the terms of the tender offer. Among the most highly contested issues was the exchange ratio, which the special committee actively sought to increase. Class counsel in the Delaware Action also engaged in negotiations with Viacom's representatives concerning the need for an increase in the exchange ratio as part of any potential settlement. In late October, Delaware counsel reached a settlement with the defendants that, inter alia, increased the exchange ratio from the 0.564 shares of Viacom stock it proposed at the outset of its bid to 0.592 shares per Infinity share. During that same period of time, the special committee and Viacom's representatives were reaching an identical resolution. On October 30, 2000, on the advice of its financial advisors,[3] the committee voted to *289 recommend that the Infinity board of directors approve the merger at the same exchange ratio of 0.592 shares of Viacom stock per Infinity share. Shortly thereafter, the parties to the Delaware Action presented the settlement to the Court. In turn, the Chancellor approved it.
The Fernandes Objection
Initially, we address Appellees' contention that Appellant Fernandes lacked standing to object to the settlement in the Court of Chancery. The transcript of the settlement hearing indicates that the parties chose not to present the issue of standing to the Chancellor during that proceeding. Although class counsel stated for the record that he was unwilling to concede Fernandes' standing, he admitted that the trial court did not necessarily need to decide the issue. Because counsel did not pursue the issue at that hearing and the record reveals no further inquiry into the standing issue, we find that it was not fairly presented to the Court of Chancery for decision. This Court generally will not address the merits of any issue not presented to the trial court and we find no compelling reason to depart from that standard in our consideration of this appeal.[4]
Any decision of the Court of Chancery regarding the fairness of a proposed settlement is within the discretion of that court and requires an application of its own business judgment.[5] This Court will review a decision regarding fairness only to the limited extent of determining whether "the findings and conclusions of the trial judge are supported by the record and [are] the product of an orderly and logical deductive process, [if so] they will be accepted."[6] We will not substitute our own business judgment for that of the Court of Chancery.[7] Fernandes contends that the Chancellor abused his discretion by approving a settlement that was unfair to the articulated class of Infinity shareholders. His principal argument rests on the notion that close scrutiny of the facts in the record reveals that the settlement provided nothing more than an illusory benefit that failed to adequately protect the rights of the class members. Specifically, he claims that this Court should hold that the illusory benefit is insufficient to extinguish the individual claims of members of the class and that it also precludes the Chancellor's award of any substantial attorneys' fees.
Fernandes argues that this Court need not look farther than the actual monetary value of the Viacom shares to find that alleged benefit to be, in essence, a sham. Because of a dramatic drop in the price of Viacom stock after the tender offer was announced, the actual cash value for Infinity's stockholders at the time of settlement was significantly reduced. In turn, he contends, this should have triggered an increase in the exchange ratio to maintain the cash-equivalent benefit conveyed to the stockholders.[8] This would be a persuasive *290 argument, however, only if we were to consider the cash price at settlement to be the proper measure of the benefit conferred in a challenged stock-for-stock merger. In fact, our courts have found that the Court of Chancery need not limit itself to an examination of the immediate tangible results to a corporation or its shareholders in determining the fairness of a settlement agreement.[9] The probable long-term benefits of the settlement are also properly considered.[10] Indeed, mergers like that at issue in this appeal are undertaken primarily in the anticipation of long-term benefits. Assuming a rational decision-making process, Viacom would only have tendered its offer for outstanding Infinity stock if it believed that the merger would produce a net increase in value. A short-term fluctuation in stock price does nothing to alter this extended outlook. Moreover this is a benefit that Infinity shareholders can reasonably expect to reap as new holders of Viacom stock. Therefore, it could fairly be concluded that the increase in the number of Viacom shares allotted to each class member as a result of the settlement produces a long-term benefit even where there is no triggered increase in the exchange ratio to reflect an updated market price fluctuation.
Having established that the benefit received by the increase in stock ratio as a result of negotiation was more than illusory, we now turn to the question of whether the terms of this settlement should properly include an award of attorneys' fees. As Fernandes is quick to point out, the timeline in the record shows that the Infinity special committee actively advocated an increased exchange ratio at the same time that class counsel sought an increase in the exchange ratio in the Delaware Action. The inference he suggests we must draw from this fact is that the special committee's work solely resulted in the benefit to the Infinity shareholders and that class counsel's efforts can fairly be considered redundant, insignificant or superficial. This disregards our well-established case law that, in the absence of evidence that the litigation did not result directly in a cognizable benefit to the class, we recognize a presumption that there is a causal relationship between the benefit and a timely filed suit.[11] Moreover, the settlement stipulation in the case at bar specifically states that Viacom "took into account the desirability of satisfactorily addressing the claims asserted in the [Delaware] Action in agreeing to increase the consideration to be conveyed to Infinity's public stockholders ... and as such the Action was a positive contributing factor in Viacom's decision to increase the Merger consideration." Even though this suggests that the Delaware Action was only a partial cause of the benefit received as a result of the increase, counsel applying for attorneys' fees do not need to show that they were the sole cause of a benefit conferred by settlement in order to have earned a fair, adequate and reasonable fee for their work on behalf of the class.[12]
Fernandes also appeals the Chancellor's determination that the named *291 plaintiffs adequately represented the class as required by Court of Chancery Rule 23(a)(4) and implied in Rule 23.1.[13] We have held that the Court of Chancery's determination of the adequacy of a class representative is an "essential component" of the settlement approval process.[14] The Chancellor clearly addressed this issue both from the bench and in his final order approving the settlement, explicitly stating that the shareholder class had been adequately represented. Although Fernandes cites deposition testimony taken from class counsel that suggests limited contact and substantially passive involvement by certain named plaintiffs, a nominal plaintiff's lack of personal familiarity with an action is not determinative of that representative's adequacy.[15] Our case law requires little more than that a representative be generally familiar with the litigation.[16] Indeed, our legal system has long recognized the appropriateness of an attorney taking the dominant role in derivative proceedings.[17] Therefore, the mere fact that class counsel undertook the dominant role in this litigation in no way suggests that the class representatives must be found to have inadequately represented the class. We find that sufficient evidence exists in the record to support the Chancellor's conclusions on the adequacy of the named plaintiffs' representation.
The Challenge to the Award of Attorneys' Fees
Juarez and Pezza-Fiorillo, on the other hand, do not, in this appeal, challenge the adequacy of the settlement or an award of fair, adequate and reasonable fees. Instead, they claim that the Chancellor erred as a matter of both law and fact by failing to assign or allocate a portion of the attorneys' fees actually awarded to counsel who solely participated in the New York litigation. Appellants first contend that the Chancellor based his ruling on an inaccurate interpretation of Delaware law. Juarez and Pezza-Fiorillo argue that the Chancellor ruled as a matter of law that only counsel who litigated before him in the Court of Chancery were entitled to a portion of the attorneys' fees, regardless of any benefit that may have been conferred by actions pursued in other jurisdictions. We fully agree that, had the Chancellor, in fact, ruled as alleged by Appellants, he would have incorrectly stated the law. Counsel pursuing litigation in any jurisdiction is entitled to a share of attorneys' fees in a settlement of a Delaware action if their efforts elsewhere conferred a benefit realized as part of the Delaware settlement.[18] Nevertheless, we do not read the Chancellor's final order and remarks from the bench to be an asserted deviation from or variation on a well-established principle of our corporate law. We find it clear on this record that *292 the basis for his ruling that New York counsel would not share in the fee award was not because they had failed to appear in the Delaware Action, but because the New York litigation neither promoted or influenced the global settlement in any meaningful way nor resulted directly in any benefit to the shareholder class.
We do not assign the same importance as Juarez and Pezza-Fiorillo to the Chancellor's comment from the bench that the only way counsel can be assured of a part of the award is to appear before the Court of Chancery and petition to become class counsel or co-counsel in Delaware litigation. Indeed, this is hardly a new statement of law. Instead we read it simply as a common sense statement of a readily observable fact, specifically intended for the future reference of counsel to whom he was denying fees. At no point does the Chancellor suggest that this was the basis for his decision. He merely voiced the rather obvious reality that the only sure way for any judge to know if, and to what extent, counsel have conferred a benefit in shareholder litigation is if they have actively appeared in front of him throughout the litigation. This in no way excludes any proper application for fees, including those arising from litigation in other fora, so long as counsel can substantiate that their involvement and efforts in other litigation resulted in a benefit to the class derived from the settlement.
Juarez and Pezza-Fiorillo allege that the language of the Chancellor's cover letter to his final order supports their claim that the Chancellor misstated the law. The single sentence to which they point in that brief letter states: "If New York counsel want to apply for counsel fees in the New York cases, that is up to them." First, we note that the cover letter accompanying an order is hardly the definitive place for a party to seek the legal underpinnings of a judge's ruling, especially when that actual ruling can be found in a detailed written order, supplemented by extensive comment from the bench on the ruling. To avoid other misguided inferences that some might seek to draw from the Chancellor's statement, we restate that our law allows counsel pursuing litigation in other jurisdictions to seek attorneys' fees in Delaware so long as their efforts elsewhere have conferred a benefit that contributed to the settlement of similar suits here. Here, the suggestion that the Chancellor ruled that the New York court was the sole forum in which counsel litigating there could seek a fee award is misleading. We conclude in light of the record in this case and the Chancellor's comments both from the bench and in his final order, that he neither based his ruling upon the premise asserted by Juarez and Pezza-Fiorillo, nor did he intend that the parties consider it to be the law of the case.
This Court cannot state with any assurance what prompted the Chancellor's almost tangential comment in that letter. However, we can speculate that it was in part a result of the frustration that accompanies chimeric claims for awards of attorneys' fees. As we discuss infra, counsel for Juarez and Pezza-Fiorillo offered no substantial evidence to support their claim that they conferred a benefit on the class by positively affecting the settlement in Delaware which could entitle them to an allocation of the fee award. Despite invitations to join the Delaware litigation and represent the interests of their clients before the Court of Chancery, counsel chose not to intervene until the time arose to allocate a fee. While our courts welcome the intervention of any party, including attorneys with valid claims for attorneys' fees, we can certainly understand the Chancellor's impatience with hollow claims, *293 especially in light of the tendency for those claims to consume our limited judicial resources.
Since we find it clear that the Chancellor applied the correct legal standard, this Court must now turn to the secondary question of whether the Chancellor abused his discretion by determining that counsel for the New York litigants were not entitled to a share of the fee award. Juarez and Pezza-Fiorillo's claim that their attorneys are entitled to a portion of the fee award requires an analysis of the impact that the New York litigation had on the settlement of the Delaware Action. The determination of any award is a matter within the sound judicial discretion of the Court of Chancery.[19] A careful study of the record indicates that the Chancellor's decision not to award fees to counsel for the New York litigants is fully supported by the evidence that was before him and that, therefore, he did not abuse his discretion.
We have articulated several factors that the Court of Chancery must consider in determining any award of attorneys' fees. They include: (1) the results accomplished for the benefit of the shareholders; (2) the efforts of counsel and the time spent in connection with the case; (3) the contingent nature of the fee; (4) the difficulty of the litigation; and (5) the standing and ability of counsel involved.[20] All of the Sugarland factors are contingent upon the benefit at issue being causally related to the efforts of counsel in pursuing their action.
A number of factors in the record support the Chancellor's conclusion that counsel for the New York litigants failed to confer a benefit upon the class that would entitle them to an award of attorneys' fees. Because Juarez and Pezza-Fiorillo failed to participate in the Delaware litigation in any meaningful way, any evidence of a benefit must result from the impact of the New York litigation itself. When determining the amount and distribution of an award, the mere pendency of litigation alone does not establish the causal connection between counsel's efforts and changes in the merger terms that benefit the shareholder class. In this appeal, the record is devoid of evidence that the New York litigation in any way influenced the settlement approved by the Court of Chancery.
Juarez and Pezza-Fiorillo conceded at the settlement hearing that their counsel did not take part in any settlement negotiations with the special committee or the directors of the defendant corporations as part of their prosecution of their claims. More importantly, the record belies Appellants claims that they actively pursued the litigation in the New York Supreme Court. The mere fact that Juarez and Pezza-Fiorillo served document requests does not necessarily demonstrate "a seriousness of purpose and an intent to litigate hard" that would move the defendants to settlement, as Appellants contend; nor does their briefing and argument of a motion for expedited discovery. When it denied that motion, the New York Supreme Court made clear that it considered the proper forum for resolving this dispute to be the Court of Chancery. This is consistent with our reading of New York case law, which favors the resolution of corporate governance disputes in the state of incorporation, under the "internal affairs doctrine."[21] Although the record does not *294 indicate that there was a formal stay in the New York proceedings, it is clear not only that the case was not actively prosecuted during the existence of the Delaware litigation, but that it presented a threat so insubstantial that it is unlikely to have had meaningful influence on the decision of Viacom and Infinity to settle the Delaware Action. We find that the Chancellor did not abuse his discretion when he denied Juarez and Pezza-Fiorillo's counsel a percentage of the attorneys' fees award under these circumstances.
The judgment of the Court of Chancery is affirmed.
NOTES
[1] By order of this Court dated June 18, 2002 and pursuant to Supreme Court Rule 31, Sally Fernandes has been substituted for Appellant, objector-below, Les Fernandes in the above captioned appeal.
[2] Hereinafter the "Delaware Action."
[3] At an October 30, 2000 special committee meeting, the financial advisors informed the committee that they believed the negotiated exchange ratio to be fair, from a financial point of view, to the non-Viacom holders of outstanding Infinity Class A common stock. They later confirmed these opinions in writing.
[4] Supr. Ct. R. 8.
[5] Rome v. Archer, 197 A.2d 49, 54 (Del.1964).
[6] Polk v. Good, 507 A.2d 531, 536 (Del.1986) (citing Levitt v. Bouvier, 287 A.2d 671, 673 (Del.1972)).
[7] Rome, 197 A.2d at 54.
[8] It is apparent from the record that the terms of the offer were not subject to an adjustment that would require a change in the exchange ratio to reflect the ongoing price of Viacom stock. Even if there had been, the record reveals that a general dip in the market similarly devalued Infinity and other companies.
[9] Prince v. Bensinger, 244 A.2d 89, 95 (Del.Ch. 1968).
[10] Id.
[11] McDonnell Douglas Corp. v. Palley, 310 A.2d 635 (Del.1973)
[12] In re Resorts Int'l S'holders Litig., Del. Ch., Civ. A. Nos. 9470, 9605, 1990 WL 154154, Hartnett, V.C. (October 11, 1990).
[13] See Goodrich v. E.F. Hutton Group, Inc., 681 A.2d at 1039, 1045 (Del.1996) (Rule 23.1 includes an implicit requirement that the named plaintiffs in a settlement class have adequately represented the class as a whole).
[14] Id.
[15] In re Fuqua Indus., Inc. S'holder Litig., 752 A.2d 126 (Del.Ch.1999)
[16] Id.
[17] Id. In fact, as the Chancellor noted in In re Fuqua Indus., allowing private attorneys to bring suits on behalf of nominal shareholder is vital to the functioning of our partially privatized enforcement mechanism for policing fiduciaries. Id.
[18] See, e.g., Sanders v. Wang, Del. Ch., 2001 WL 599901, C.A. No. 16640, Steele, V.C. (May 29, 2001) (let.op.) (denying attorneys fees to counsel who filed suit in New York on grounds that the New York action failed to contribute to the beneficial results of the Delaware litigation).
[19] Johnston v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542, 547 (Del.1998).
[20] Sugarland Industries Inc. v. Thomas, 420 A.2d 142, 149 (Del.1980).
[21] Hart v. GMC citing Mantei v. Creole Petroleum Corp., 61 A.D.2d 910, 402 N.Y.S.2d 822 (N.Y.App.Div.1978). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2407170/ | 511 S.W.2d 362 (1974)
Maxine Montgomery MORGAN et al., Appellants,
v.
Donald G. STOVER, Appellee.
No. 4690.
Court of Civil Appeals of Texas, Eastland.
May 17, 1974.
Rehearing Denied June 7, 1974.
*363 Upton, Shannon, Porter & Johnson, Craig Porter, San Angelo, T. P. Robinson, Jr., Eldorado, for appellants.
J. R. Black Jr., Scarborough, Black, Tarpley & Scarborough, Abilene, W. B. Wright, Cisco, for appellee.
RALEIGH BROWN, Justice.
Maxine Montgomery Morgan, J. A. Montgomery, Jr., Arthur A. Montgomery, Lawrence Calvin Montgomery and Jack Elder, individually and as Independent Executor of the Estate of Elizabeth Montgomery Elder, deceased, brought suit in the form of trespass to try title against Donald G. Stover seeking to recover possession of lands located in Eastland and Callahan Counties and to quiet title to same. The plaintiffs are the heirs of J. A. Montgomery who died in March of 1969, and Annie Montgomery, who died in September of 1968.
Stover answered by a plea of not guilty and by cross-action sought a decree of specific performance that he might purchase the land under an option contained in a lease contract.
The Montgomery heirs pled defensively to the cross-action that a 1967 document was without consideration, was unilateral and without mutuality of obligation and could form no basis for an extension of the option to purchase the lands as provided in the original lease. Additionally, they pled the doctrine of equitable estoppel *364 prevents Stover from relying upon the 1967 document.
The record reflects that on March 20, 1963, J. A. and Annie Montgomery entered into a written lease of the lands with Donald G. Stover as lessee. The agreement provided in part for a term commencing January 1, 1964 and ending January 1, 1970, an annual rental of $400, a requirement that the premises would be used for farming and grazing purposes only, that Stover could not sub-let the premises without the consent of the Montgomerys in writing, and included an option to purchase the lands during the term of the lease at a price of $70 per acre to be paid cash. On March 6, 1967, J. A. and Annie Montgomery executed the following instrument, which was not signed by Stover:
"WHEREAS, on the 20th day of March A.D. 1963, J. A. Montgomery and wife, Annie Montgomery, did make, execute and deliver to D. G. Stover a certain surface lease recorded in Vol. 347, page 636, Deed Records of Callahan County, Texas, covering the following described land.
202.5 acres of land, belonging to J. A. Montgomery, Abst. No. 884, W. J. Bryson Surv. 1564, O. J. Burks Sur. and E. R. Milles Sur. 1870, and being more fully described in the Deed Records of Callahan County, Texas.
AND WHEREAS, J. A. Montgomery and wife, Annie Montgomery, are desirous of having the term of the aforesaid lease extended to read Jan. 1, 1972, and we thereby ratify and confirm the above lease, and all other conditions of said lease to remain the same."
Stover notified the Montgomery heirs in December of 1971, that he was exercising his option to purchase the land. The Montgomery heirs refused to execute instruments of conveyance. They contend such action came too late since the option to purchase was not a right provided by the document of 1967. A jury trial resulted.
At the conclusion of all the evidence, the trial court granted a motion for an instructed verdict favoring Stover. Judgment for specific performance requiring the Montgomery heirs to convey by general warranty deed the title to the lands to Stover was entered. The Montgomery heirs appeal.
The thrust of the appeal of the heirs is primarily two-fold: first, they maintain the document of 1967 was invalid and could not authorize the option to purchase and second, they argue the trial court erred in failing to submit issues comprising their defense of equitable estoppel to the cross-action.
We do not agree with the Montgomery heirs in their contention that the document was invalid and did not authorize an option to purchase. The record reflects that during the term of the original lease, J. A. and Annie Montgomery executed the 1967 document. It was delivered to Stover and by him filed of record. He made rental payments and improvements on the land subsequent to the delivery of the document.
There can be no dispute that parties to an existing agreement have the right to modify it. As stated by this court in Upshur County v. Heydrick, 221 S.W.2d 326 (Tex.Civ.App.Eastland 1949, writ ref. n.r.e.):
"The power to make a contract carries with it the right to modify or change the contract so made."
See also 13 Tex.Jur.2d, § 267, at page 496.
Stover was not required to sign the 1967 document to give it validity. It was announced in Rubin v. Polunsky, 366 S.W.2d 234 (Tex.Civ.App.San Antonio 1963, writ ref. n.r.e.):
"The rule in Texas is, that a contract in writing signed by one party and expressly accepted orally by the other, or the terms thereof performed and the benefits *365 thereof accepted, is in law the written contract of the parties and binding on both. Martin v. Roberts, 57 Tex. 564; Chavez v. Goodman, Tex.Civ.App., 152 S.W.2d 826, no writ history; Burke v. Shafer, Tex.Civ.App., 189 S.W.2d 444, writ ref. w.o.m." (emphasis added)
Stover performed under the terms of the lease, accepted the benefits of the extended term, and became obligated to pay rents for an additional two years.
The issue becomes whether the modification was based on a sufficient consideration. It is said generally that the rules that govern the sufficiency of contracts also govern the sufficiency of the consideration for the modification of an existing contract. In the case at bar reciprocal obligations are imposed upon the parties by the 1967 amendment.
Our Supreme Court in Texas Gas Utilities Company v. Barrett, 460 S.W.2d 409, stated:
"In speaking of mutual reciprocal obligations as consideration, the rule was stated in Clement v. Producers' Refining Co., 277 S.W. 634 (Tex.Comm.App.1925) that `where no other consideration is shown, mutual obligations by the parties to the agreement will furnish a sufficient consideration to constitute a binding contract.' See also Johnson v. Breckenridge-Stephens Title Co., 257 S.W. 223 (Tex.Comm.App.1924) and Roberts v. Anthony, 185 S.W. 423, (Tex. Civ.App.Amarillo 1916, no writ.)"
Continuing in the same case, the court said further:
"It is presumed that when parties make an agreement they intend it to be effectual, not nugatory. Portland Gasoline Co. v. Superior Marketing Co., Inc., 150 Tex. 533, 243 S.W.2d 823 (1951). A contract will be construed in favor of mutuality, Carpenter Paper Co. v. Calcasieu Paper Co., Inc., 164 F.2d 653 (5th Cir. 1947). The modern decisional tendency is against lending the aid of courts to defeat contracts on technical grounds of want of mutuality. Armstrong v. Southern Production Co., Inc., 182 F.2d 238 (5th Cir. 1950)."
We hold the 1967 document to be a valid enforceable modification of the 1963 lease. Its effect is an extension of the term of the 1963 lease and all its provisions including the option to purchase.
The trial court having instructed a verdict in favor of Stover, to be correct there must be no evidence having probative force upon which a jury could have made findings of equitable estoppel. Anderson v. Moore, 448 S.W.2d 105 (Tex.Sup.1969). To make this determination all evidence must be considered in the light most favorable to the Montgomery heirs and every reasonable inference deductible from the evidence is to be indulged in their favor. Seideneck v. Cal Bayreuther Associates, 451 S.W.2d 752 (Tex.Sup.1970); Triangle Motors of Dallas v. Richmond, 152 Tex. 354, 258 S.W.2d 60 (1953).
The heirs contend that an exchange of letters between J. A. and Annie Montgomery and Stover prior to the Montgomerys' execution of the document of 1967 was some evidence of probative force from which the elements of equitable estoppel could be found.
The letters indicate a course of negotiations between the Montgomerys and Stover, concerning an extension of the 1963 lease and also the possible sale of the land for other than cash.
On April 13, 1966, J. A. Montgomery wrote Stover as follows:
"After a conference with our children about the sale of the farm, we have decided that we will not sell it except for cash. And further, we do not care about selling it at this time, unless you exercise your option.
In the future if we ever decide to sell the place, the renter would have first choice to buy it."
*366 By letter of January 27, 1967, the Montgomerys wrote Stover in part as follows:
"The contract will be on its way in a few days . . . You can have a 5 year lease on it and fix the land like you want it and have the option on buying it if we have to sell it. We hope we haven't caused you too much trouble."
Then on March 13, 1967, Donald Stover wrote the Montgomerys in part as follows:
"I guess I didn't make my self clear about the lease on the place. What I wanted was an extension on the lease that I now have. I am sending the lease like I wanted. It is a three year extension on the lease that I now have. If this is alright with you have a Notary come to your house if you would like, and I will pay for it. The reason I want this extension is because I want to do quiet a bit of improvements on the place. The reason that I did not sign the lease that I am sending is because the person that fixed it up for me said there wasn't any use because it is just an extension on the lease that I now have. Will need both of your signatures on the lease extension. I am sending a copy that you may keep.
The work that I will do will not cost you anything. I am going to do it myself.
I am sending the lease back that you sent."
Our Supreme Court discussing the elements of equitable estoppel in Gulbenkian et all. v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952) stated:
"`In order to constitute an equitable estoppel or estoppel in pais there must exist a false representation or concealment of material facts; it must have been made with knowledge, actual or constructive, of the facts; the party to whom it was made must have been without knowledge or the means of knowledge of the real facts; it must have been made with the intention that it should be acted on; and the party to whom it was made must have relied on or acted on it to his prejudice.' 31 C.J.S., Estoppel, § 67 page 254."
See also Rio Delta Land Company v. E. W. Johnson, 475 S.W.2d 346 (Tex.Civ.App. Corpus Christi 1972, writ ref. n.r.e.); Echols v. Bloom, 485 S.W.2d 798 (Tex. Civ.App.Houston 1972, writ ref. n.r.e.).
By indulging every reasonable inference deducible from the evidence in favor of the Montgomery heirs, we hold there is no probative evidence of equitable estoppel. The 1967 document executed by the Montgomerys, after the negotiations with Stover, extended the term of the original lease "to read Jan. 1, 1972." It further provided "we hereby ratify and confirm the above lease to remain the same." The Stover letter of March 13, 1967, transmitting the 1967 document to the Montgomerys contains no false representations or concealment of material facts. The point of error is overruled.
We have considered all points of error and overrule each.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2429130/ | 986 S.W.2d 241 (1998)
Leonard Uresti ROJAS, Appellant,
v.
The STATE of Texas, Appellee.
No. 72475.
Court of Criminal Appeals of Texas.
September 23, 1998.
*243 Dick Turner, Cleburne, for appellant.
David W. Vernon, Asst. DA, Cleburne, Matthew Paul, State's Atty., Austin, for State.
OPINION
MEYERS, Judge, delivered the opinion of the Court in which McCORMICK, Presiding Judge, and MANSFIELD, KELLER, PRICE, HOLLAND and WOMACK, Judges, joined.
Appellant was convicted of capital murder for an offense committed on or about December 27, 1994. TEX. PENAL CODE ANN. § 19.03(a)(2). The jury affirmatively answered the punishment question set forth in Texas Code of Criminal Procedure Article 37.071 § 2(b)(1) and negatively answered the *244 question in Article 37.071 § 2(e).[1] The trial judge sentenced appellant to death pursuant to Article 37.071 § 2(g). Direct appeal to this Court is automatic. Article 37.071 § 2(h). Appellant raises twelve points of error. We will affirm.
In appellant's first, second, and third points of error, he contends the trial court erred in denying his Motion for Instructed Verdict and Motion for New Trial because a fatal variance existed between the indictment and proof at trial. Appellant asserts this fatal variance resulted in a failure to provide adequate notice to appellant of the charges against him, a failure to afford him adequate protection against re-prosecution for the same offense, and rendered the evidence insufficient to sustain the conviction. In points of error four and five, appellant argues the trial court erred in denying his Motion for New Trial because the evidence presented at trial was legally and factually insufficient to support the jury's guilty verdict. These points of error necessitate a review of the facts of the case.
On the evening of December 27, 1994, Fabian Narvaez took his sons, Adrian and Eric Narvaez, to a Texaco station in Arlington, Texas, to meet their mother, Jo Ann Reed (Narvaez's ex-wife). The boys had just completed a Christmas holiday visit with their father and were scheduled to meet their mother at 7:00 p.m. at the Texaco station, the usual exchange point agreed to by Narvaez and Reed. When Reed had not appeared and could not be reached by 8:05 p.m., Adrian called his aunt, Linda Hancks (Reed's sister). Hancks drove to the Texaco, picked up the boys, and took them to her house. After trying unsuccessfully to reach Reed, she called her sister, Terry Ceballos. Ceballos informed Hancks that she had been calling Reed all day and had repeatedly encountered a busy signal. The two sisters then drove together to the area of Johnson County, where Reed lived with appellant (her boyfriend or common law husband), his brother, David Rojas, and Reed's two sons in a double-wide trailer.
When Hancks and Ceballos arrived at the home at approximately 9:20 p.m., appellant's car was parked in the driveway and the trailer was completely dark. After pushing past two large trash cans which were blocking the back door, they discovered Reed's bloody body buried under a pile of sheets, blankets and pillows on the bed in the master bedroom. A white plastic bag was tied tightly around Reed's head. With some effort, Hancks was able to pry off the bag, then discovered that Reed had a gunshot wound in the center of her forehead and seemed to have been dead for some time. Hancks also noticed a .32 caliber weapon lying on the bed. Ceballos later discovered David Rojas' body in the second bathroom. Rojas had apparently been shot multiple times.
The sisters called 9-1-1 and were told to leave the trailer. The police arrived and began investigating the murders. At some point, officers on the scene received a call notifying them that Dallas police were holding a man who had apparently confessed to these killings to security guards in a bus station. Johnson County officers traveled to Dallas where they were introduced to appellant who immediately began confessing his actions to them and had to be stopped so officers could read him his Miranda[2] rights.
At approximately 2:00 a.m., December 28, 1994, appellant willingly gave Johnson County officers a written statement in which he admitted killing Reed and his brother and explained the events leading up to the murders. The Johnson County police then took appellant back to the scene of the crime, where he made a videotaped statement in which he toured the house explaining the events. Police took an additional statement from appellant at around 1:00 p.m. on the 28th after appellant had eaten breakfast and rested to verify the accuracy of the first two statements. When compared, the three statements contain minor inconsistencies but recount substantially the same events.
*245 Appellant stated that he and the victims, Reed and David Rojas, had stayed up all night playing dominoes and using drugs (marijuana, cocaine, and methamphetamine). According to appellant, at around 9:30 a.m. on the morning of the 27th following this allnight binge, he was in the kitchen making coffee and saw Reed emerge from Rojas' bedroom. Appellant confronted Reed because he suspected that she had been sleeping with Rojas. Reed denied this accusation. Appellant and Reed went to the master bedroom, then Reed removed her clothing. She offered to perform fellatio on appellant and appellant accepted her offer. Appellant claims that, after completing this act, Reed told him she had met a new man (apparently not David Rojas) and asked appellant to move out of the house. Appellant angrily refused to move out and Reed told him that they would make him leave. Appellant reached under the dresser, retrieved his gun (a .32 caliber Smith and Wesson) and shot Reed between the eyes. He then put on his robe, knocked on the bathroom door, and asked Rojas to come out of the bathroom. When Rojas opened the door, appellant shot him three times.
After shooting Rojas, appellant noticed that Reed was still breathing. Ostensibly in order to end her suffering, appellant tied a plastic bag tightly over her head. Appellant then covered the bodies, sat down in the kitchen, and drank a cup of coffee. He thought about what he had done and decided he would have to leave the house. During this period, Lisa Gonzales, a friend of Reed's, called twice on the telephone, and Pam Raby, a coworker of Reed's, called once. Appellant told both of them that Reed was ill and could not talk on the phone. He told Raby that Reed could not come to work. He took the four empty shells out of the gun and threw them in a trash can by the pool table. He prepared to leave, but could not find his car keys. After searching for the keys for some time in vain, appellant left the house on foot. He hitchhiked to the Fort Worth bus station, then bought a bus ticket to Atlanta, Georgia. He only made it as far as Dallas, where he confessed to security guards.
Assistant Medical Examiner Dr. Marie Araneta testified that Reed had a gunshot wound to the forehead. Bullet fragments were found in her head. Gunpowder residue indicated the gun was within one inch of her head when fired. Reed's urine tested positive for metabolites of marijuana, cocaine, and nicotine. Her blood tested negative for these substances. Dr. Araneta also discovered dried blood around Reed's anal opening and vagina and a contusion of the groin, indicating some kind of trauma such as penetration by a foreign object (no sperm was detected). David Rojas received several gunshot wounds to the chest, leg, head, and neck. His urine tested positive for metabolites of marijuana, cocaine, caffeine, and nicotine. His blood was also negative. Dr. Araneta opined that the cause of death of both victims was the gunshots wounds they received, although she noted that Reed's cause of death could have been compounded by asphyxiation with the plastic bag.
Dan Dykes testified that appellant appeared at his house at 3:30 or 4:00 p.m. on December 27th. Appellant asked for a ride to the bus station or to the house of some friends. Dykes agreed to take appellant to the friends' house but they were not home. Appellant then asked for a ride from some people driving by in a pickup truck and left with them. Gonzales confirmed that she had called the house twice looking for Reed and appellant had told her she was ill. Raby stated she had called the house at around 3:20 p.m. to see if Reed would be working her shift, which started at 3:00. Appellant told her Reed was sick and would not be working her shift. In addition, police found four shell casings in the family room trash can consistent with the .32 caliber weapon found at the house.
Appellant's first, second, and third points of error turn on the question of whether a fatal variance existed between the indictment and the proof at trial. Appellant points out that the indictment charged him with causing the death of Reed by shooting her with a firearm. He cites at length the trial testimony of Dr. Araneta, arguing that it presents evidence of a cause of death different from the cause named in the indictment, *246 i.e., the trial testimony showed asphyxiation via a plastic bag being tied over the victim's head. He asserts that, when the State alleges specific information which is descriptive of an essential element of the offense, the State must prove that descriptive matter. Thus, the State was required to prove beyond a reasonable doubt that appellant caused Reed's death by shooting her with a gun, not suffocating her with a plastic bag. He claims this fatal variance between the indictment and the proof at trial deprived him of notice and subjected him to re-prosecution.
When an indictment facially alleges a complete offense, the State is bound by the theory alleged in the indictment, as is the reviewing court in its sufficiency analysis. Montoya v. State, 906 S.W.2d 528, 529 (Tex. Crim.App.1995); Fisher v. State, 887 S.W.2d 49, 57 (Tex.Crim.App.1994). And, a variance between the indictment and the evidence at trial may be fatal to a conviction, because Due Process guarantees the defendant notice of the charges against him. Stevens v. State, 891 S.W.2d 649, 650 (Tex.Crim.App.1995); Ward v. State, 829 S.W.2d 787, 794 (Tex. Crim.App.1992). However, not every variance between the evidence at trial and the indictment is fatal. Only a material variance is fatal. Stevens, supra. A variance between the charging instrument and the proof at trial is material only if it operated to the defendant's surprise or prejudiced his rights. Id.; Human v. State, 749 S.W.2d 832, 837 (Tex.Crim.App.1988). In this case, however, there was no variance, material or otherwise. The evidence supported the indictment.
Testimony at trial showed Reed's official cause of death as determined by the medical examiner was a gunshot wound to the head the same cause of death specified in the indictment. In response to a hypothetical question, Dr. Araneta conceded that Reed's immediate cause of death could also have been asphyxiation from the plastic bag. This observation was based on the assumption that Reed was still breathing and alive when the plastic bag was placed over her head.[3] However, Dr. Araneta emphasized that the asphyxiation would merely have compounded the existing injury to the respiratory control center of the brain caused by the gunshot. She noted that, even in the hypothetical situation posed, she would consider the gunshot wound to be an equally important cause of death to the plastic bag due to the cumulative effect from the weakened respiratory control center. The proof at trial was consistent with the indictment's allegation that the victim was killed by a gunshot to the head and this was the theory presented to the jury in its charge; appellant has not shown a fatal variance between the indictment and the proof at trial. Cf. Wright v. State, 388 S.W.2d 703, 706 (Tex.Crim.App.1965)(evidence sufficient to sustain allegation in indictment that victim killed by shooting with pistol, where act of shooting contributed to death, though there were other concurring causes). Appellant's first three points of error are overruled.[4]
In his fourth and fifth points of error challenging the sufficiency of the evidence, appellant argues the State failed to sufficiently prove its case on two points: Appellant's intent and the manner and means of death. First, appellant contends that his intoxication at the time of the offense made him incapable of forming the necessary intent. Further, appellant asserts that evidentiary sufficiency is measured against the charge that was actually given to the jury. He argues the charge in his case only listed one means of death of Reed (shooting with firearm), while the evidence showed Reed could have died due to asphyxiation. Thus, he insists, the evidence does not conform to the instructions given and is insufficient as a matter of law.
In performing a legal sufficiency analysis, we review the evidence in the light most *247 favorable to the verdict, and ask whether any rational trier of fact could have rendered the jury's findings beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560; Barnes v. State, 876 S.W.2d 316, 321-22 (Tex.Crim.App.), cert. denied, 513 U.S. 861, 115 S. Ct. 174, 130 L. Ed. 2d 110 (1994). When performing a factual sufficiency analysis, all the evidence is viewed without the prism of "in the light most favorable to the prosecution" and set aside the verdict only if it is "so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust." Clewis v. State, 922 S.W.2d 126, 129 (Tex.Crim.App. 1996). A clearly wrong and unjust verdict is "manifestly unjust," "shocks the conscience," or "clearly demonstrates bias." Santellan v. State, 939 S.W.2d 155, 164 (Tex.Crim.App. 1997); Jones v. State, 944 S.W.2d 642, 647-48 (Tex.Crim.App.1996), cert. denied, ___ U.S. ___, 118 S. Ct. 100, 139 L. Ed. 2d 54 (1997).
In addressing appellant's sufficiency claims, we first generally observe that, viewed in the most favorable light, the evidence supports the jury's guilty verdict. Further, even when all of the facts contrary to the jury's result are considered, the verdict does not appear to be clearly wrong and unjust. We now address applicant's specific arguments:
With regard to appellant's intent argument, we note that under Texas Penal Code, Section 8.04, voluntary intoxication cannot constitute any defense to the commission of a crime. Taylor v. State, 885 S.W.2d 154, 156 (Tex.Crim.App.1994). Appellant's argument that his intoxication made him incapable of forming the necessary intent is not viable under a legal or factual sufficiency analysis. It is clear under section 8.04 that voluntary intoxication is not to an excuse to commission of any crime, and therefore may not be considered as having negated an element of an offense.
Appellant also argues the evidence of Reed's cause of death does not conform with the instructions given to the jury that appellant intentionally caused the death of the victims with a firearm during the same criminal transaction. Appellant does not dispute the evidence that David Rojas was killed by several shots from a firearm, that Reed was shot in the head with a firearm, and that the victims were killed in the same criminal transaction; the only question appears to involve Reed's immediate cause of death (i.e., asphyxiation or gunshot wound).
The State presented ample evidence that Reed was killed by a shot to the head with a.32 caliber firearm fired by appellant. Also, the official cause of death determined by the medical examiner was a gunshot wound to the head. As noted above, Dr. Araneta conceded that the immediate cause of death could have been asphyxiation if Reed was still alive when the plastic bag was placed over her head. Dr. Araneta also recognized the remote possibility that Reed could have survived the gunshot wound in some limited capacity if given immediate medical attention. However, she stated that Reed would have died from the gunshot wound eventually, and the gunshot wound would be an equally important cause of death even if the asphyxiation had been the immediate catalyst, because a fragment of the bullet had struck and damaged the respiratory control center of Reed's brain. Viewing the evidence in the light most favorable to the verdict, a rational trier of fact could have found that Reed's death was ultimately caused by the gunshot to the head, whether she died before or after appellant placed the plastic bag over her head. And, even if the evidence favorable to appellant's arguments is examined without the prism of "in the light most favorable to the prosecution," the jury's verdict is not clearly wrong or unjust. We overrule appellant's fourth and fifth points of error.
Point of error six represents a claim that the evidence is factually insufficient to support the jury's answer to the future dangerousness special issue. This Court has declined to perform a factual sufficiency analysis of this special issue. A factual sufficiency review of a jury's determination of the probability of future dangerousness is not possible and not required by the Texas Constitution. McGinn v. State, 961 S.W.2d 161, 166-69 (Tex.Crim.App.1998). Point six is overruled.
*248 In appellant's seventh point of error he contends the trial court abused its discretion in allowing the jury to separate for an extended period of time during the punishment phase of trial (approximately seven days). He contends that, pursuant to Articles 35.23[5] and 36.29,[6] reversal is required if the jury is permitted to separate (without the personal consent of the defendant) after the guilt/innocence charge is read to the jury, unless the State successfully rebuts the presumption of harm. Appellant argues he was prejudiced by the trial court's action because the jurors were "free to be influenced by anyone or anything" for the seven days they were apart.
On May 23, 1996, after the jury had rendered their guilty verdict but before the presentation of evidence at the punishment phase of trial, the trial judge received a phone call from a juror's sister notifying him that the mother of the juror was critically ill and was not expected to live. The sister stated that all family members needed to come immediately to the hospital in Memphis, Tennessee. The trial judge asked the attorneys for comments on his potential courses of action. The defense objected to recessing the jury and later reconvening it, arguing the juror in question would be distracted and the remedy provided by statute in this type of situation is the permanent discharge of the jury. The judge nevertheless recessed the jury until the following week. Prior to separation, the judge strictly instructed the jury to not read anything about the case, not listen to anything about the case, and not discuss the case with anyone (even another juror). On May 30, 1996, the jury reconvened. The judge questioned the juror whose mother was ill. The juror indicated that his mother's condition had improved, and stated he could give full consideration to the case and continue serving as a juror without being distracted by his mother's illness.
Under the pre-1989 version of Article. 35.23, the jury was not permitted to separate after the reading of the court's charge until a verdict was rendered or the jury was discharged unless the defendant consented to the separation. Harris v. State, 738 S.W.2d 207, 212 (Tex.Crim.App.1986), cert. denied, 484 U.S. 872, 108 S. Ct. 207, 98 L. Ed. 2d 158 (1987) ("The statute requires reversal if the jury is allowed to separate after the court's charge has been given unless the defendant consents"); see also Gregg v. State, 881 S.W.2d 946, 950 (Tex.App.Corpus Christi 1994, pet. ref'd). Post-1989, Article 35.23 forbids separation of jurors after the charge is read if the court sequesters the jury (on the motion of a party or on its own motion) "until a verdict has been rendered or the jury finally discharged." Article 35.23; Gregg, 881 S.W.2d at 950.
In the instant case, appellant does not assert that he made a motion for sequestration or that the jury was, in fact, sequestered at the immediate point of the separation. Further, we have not located a motion to sequester in the trial record. However, upon separation, the trial court stated in the record: "[t]his means the jury will be released from sequestration." Thus, the jury may have been sequestered at that time. Nevertheless, as noted above, the separation occurred after the jury had rendered its guilty verdict and before it commenced punishment deliberations or even heard any punishment testimony (i.e., before the punishment charge had been read). Under Article 35.23, although the jurors had not been finally discharged, *249 "a verdict ha[d] been rendered." The relevant phase of trial was then the punishment phase and the punishment charge had not yet been given to the jury.[7] Thus, Article 35.23 did not prohibit the trial judge from allowing the jurors to separate at this point, even without appellant's consent.
As for Article 36.29, that statute only mandates that the jury be discharged if a juror's circumstances prevent the jury from being kept together "[a]fter the charge of the court is read to the jury." Again, because the guilt/innocence phase of the bifurcated trial had been completed and the punishment charge had not yet been given, no violation of the statute occurred. See Sanchez v. State, 837 S.W.2d 791, 795 (Tex.App.Hous. [14th Dist.] 1992, pet. ref'd); Campbell v. State, 644 S.W.2d 154, 162, 165 (Tex.App.Austin 1982, pet. ref'd). We overrule appellant's seventh point of error.
Appellant argues, in his eighth point of error, that the trial court erred in admitting State's Exhibits Thirteen through Sixteen, when their prejudicial effect outweighed their probative value. TEX.R.CRIM. EVID. 403. Appellant claims these photographs of the victims' bodies were gruesome, close-up and in color. He complains of one photograph in particular (State's Exhibit Sixteen) which depicts injuries to Reed's pelvic area, maintaining that this photo did not demonstrate the victim's cause or manner of death. He alleges this picture was introduced to confuse the issues and mislead the jury "as evidence was never presented that appellant caused any trauma to the victim's vagina." Appellant also complains that the judge made a ruling on appellant's objections to these photographs prior to appellant making any objections to the pictures and failed to review all of the necessary elements in making his decision.
Rule 403 requires an admissible photograph to possess "some probative value and that its probative value not be substantially outweighed by its inflammatory nature." Long v. State, 823 S.W.2d 259, 272 (Tex.Crim.App.1991), cert. denied, 505 U.S. 1224, 112 S. Ct. 3042, 120 L. Ed. 2d 910 (1992). Relevant factors in making this determination include: the number of exhibits offered, their gruesomeness, their detail, their size, whether they are black and white or color, whether they are close-up shots, whether the body is naked or clothed, the availability of other means of proof, and other circumstances unique to the individual case. Santellan, 939 S.W.2d at 172. The admissibility of photographs over a challenge is within the sound discretion of the trial judge. Sonnier v. State, 913 S.W.2d 511, 518 (Tex.Crim.App. 1995). Autopsy photographs are generally admissible unless they depict mutilation of the victim caused by the autopsy itself. Santellan, supra; Burdine v. State, 719 S.W.2d 309, 316 (Tex.Crim.App.1986), cert. denied, 480 U.S. 940, 107 S. Ct. 1590, 94 L. Ed. 2d 779 (1987).
The first three photos complained of are autopsy pictures depicting the gun shot wounds received by David Rojas. The pictures are approximately five by seven inches in size, are moderate, but not extreme, close-ups, and were originally color photographs (the trial record contains black-and-white reproductions). No clothing is visible in the pictures. These photos focus on the various entrance and exit wounds of the bullets and are not unnecessarily gruesome. State's Exhibit Sixteen is a picture of Reed's unclothed body with her legs spread apart, which displays trauma to her pelvic area. It is also approximately five-by-seven inches in size, was originally in color, and is not a close-up (Reed's torso and head are visible in the picture). Again, the photo does not appear unnecessarily gruesome or intrusive, given the wound being illustrated. None of the photos reveal any injuries due to autopsy procedures.
Contrary to appellant's assertion, other evidence on the subject matter of *250 State's Exhibit Sixteen was presented at trial. Dr. Araneta testified concerning dried blood around Reed's anal opening and vagina and a contusion of the groin, indicating some kind of trauma such as penetration by a foreign object. This photo was used to show that the blood from Reed's head wound did not travel down her torso to her groin area (i.e., the dried blood in the groin region indicated a separate injury). Although the groin injury was not the direct cause of Reed's death, the evidence suggested that appellant inflicted it during the same continuous transaction. See Santellan, 939 S.W.2d at 168-70; Brown v. State, 696 S.W.2d 913, 914 (Tex.Crim.App.1985). Evidence of this additional injury was probative of appellant's mental state at the time of the murder, the specific circumstances of the murder, and the fact that appellant omitted some information from his statements to the police. Appellant has not shown that the prejudicial impact of State's Exhibits thirteen through Sixteen outweighed their probative value.
Finally, we address appellant's claim that the trial court prematurely ruled on appellant's objections to the photographs and did not correctly perform the Rule 403 balancing test. Although the judge accidentally ruled before appellant's objections to the photographs had been explicitly articulated (the judge was apparently confused by appellant's objection to a leading question), he immediately corrected his mistake and allowed appellant to fully articulate his objections to the pictures before overruling them. This Court has held that the trial court is required to perform the Rule 403 balancing test when the offering party makes the appropriate objection. Santellan, 939 S.W.2d at 173; Long, 823 S.W.2d at 271. However, where nothing in the record shows the trial judge did not perform the balancing test, we have found no error when the judge simply listened to the defendant's objections, then overruled them. Santellan, supra. In the instant case there is nothing to indicate the judge did not perform the required balancing test. In fact, the judge held a hearing outside the presence of the jury to obtain the necessary information to make this decision. Appellant's eighth point of error is overruled.
Appellant next contends the trial court erred in denying his motion for mistrial after sustaining his objection to the testimony of a State's witness. At the guilt/innocence phase of trial, Texas Ranger George Turner made the following statement in response to a question about whether Turner believed the version of events given by appellant in his confession:
I believe that she wanted him to move out. She knew because of his past anger, his past violence that that was the only way
Defense counsel objected and moved for a mistrial because the comment was not responsive to the question, beyond any evidence presented at trial, prejudicial and inflammatory, and a violation of appellant's due process rights. The trial court sustained the objection and instructed the jury to disregard Turner's comment, but denied appellant's motion for mistrial.
A witness's inadvertent reference to an extraneous offense is generally cured by a prompt instruction to disregard. Kipp v. State, 876 S.W.2d 330, 339 (Tex.Crim.App. 1994); Nobles v. State, 843 S.W.2d 503, 514 (Tex.Crim.App.1992). An exception exists where the reference was clearly calculated to inflame the minds of the jury or was of such damning character as to suggest it would be impossible to remove the harmful impression from the jurors' minds. See Kipp, supra; Barnes, 876 S.W.2d at 327; Kemp v. State, 846 S.W.2d 289, 308 (Tex.Crim.App.1992), cert. denied, 508 U.S. 918, 113 S. Ct. 2361, 124 L. Ed. 2d 268 (1993).
In the instant case, Turner's response reflects a misunderstanding of the question on the part of the witness which was not anticipated by the State. Also, Turner's comment was not a concrete reference to an extraneous offense, but merely vague speculation. Due to defense counsel's timely objection, Turner was prevented from elaborating on the mentioned extraneous conduct. Moreover, the trial judge's prompt sustaining of counsel's objection conveyed the appropriate message that the witness's comment was not supported by the evidence and was not to be considered. Therefore, the trial judge's instruction to disregard cured any error and the judge did not abuse his discretion in *251 overruling appellant's motion for mistrial. We overrule appellant's ninth point of error.
In point of error ten, appellant claims the trial court abused its discretion by denying his motions for mistrial after three prospective jurors' comments allegedly tainted the entire venire panel. Specifically, appellant calls our attention to veniremembers' testimony concerning a comment allegedly made by a prospective juror which was something like, "they should just take him out and shoot him." A different veniremember heard another prospective juror make the comment, "[i]f they did the crime they need to be punished." Also, the record shows another prospective juror may have said something like they should "fry him automatically."
It is within the discretion of the trial judge to determine jury misconduct. Rousseau v. State, 855 S.W.2d 666, 683 (Tex. Crim.App.1993), cert. denied, 510 U.S. 919, 114 S. Ct. 313, 126 L. Ed. 2d 260 (1993). The trial court is the sole judge of the credibility of the testifying jurors. Lewis v. State, 911 S.W.2d 1, 7 (Tex.Crim.App.1995). In the absence of any evidence that any of the trial jurors made, heard, or could have been influenced by the complained-of remarks, no prejudice is shown. Freeman v. State, 556 S.W.2d 287, 308 (Tex.Crim.App.1977), cert. denied, 434 U.S. 1088, 98 S. Ct. 1284, 55 L. Ed. 2d 794 (1978); see also Nelson v. State, 881 S.W.2d 97, 102 (Tex.App.Hous.[1st Dist] 1994, pet. ref'd) ("[a]bsent any evidence in the record that members of the jury heard the remark, the appellant was not harmed by it").
The trial court, defense counsel, and the prosecutor questioned the five members of the venire panel who could be identified as have made or heard a prejudicial comment. One of these five admitted to making a comment (that murderers should be prosecuted) and four were identified as having heard a comment (versions of the comment varied). The court excused two of the five, appellant exercised peremptory challenges against two more, and jury selection was completed before the remaining individual was reached in the sequence of individual voir dire examination. Appellant contends that at least twenty-eight prospective jurors, in addition to the five who testified, heard one of the prejudicial comments. The record includes neither evidence of the identity of those additional prospective jurors nor evidence that any person who actually served on the jury heard the comments. Appellant has not shown that any of the trial jurors made, heard, or could have been influenced by the complained-of remarks. We overrule appellant's tenth point of error.
In his eleventh point of error, appellant claims the trial court erred in admitting evidence of extraneous offenses at the punishment phase when proper notice was not given as required by Article 37.07 § 3(g). The trial court overruled appellant's extraneous offense objections. To support those objections applicant cites the reasonable notice requirement contained in Rule 404(b) of the Texas Rules of Criminal Evidence and Article 37.07's notice requirement. Rule 404(b) does not govern the admissibility of character evidence at the punishment stage of trial. Vuong v. State, 830 S.W.2d 929, 942 (Tex.Crim.App.1992), cert. denied, 506 U.S. 997, 113 S. Ct. 595, 121 L. Ed. 2d 533 (1992). The appropriate governing provision is Rule of Criminal Evidence 404(c), which does not contain a notice provision. Id. Further, Article 37.07 does not apply to capital murder cases. And, Article 37.071, the statute governing punishment phase procedure in a capital murder case, contains no notice requirement. Id. Point of error eleven is overruled.
In appellant's last point of error, he argues the trial court erred in denying his motion to voir dire the prospective jurors on the law regarding parole (i.e., the meaning of a life sentence) in a capital case. We have held repeatedly that parole is not an issue applicable to a capital murder case and, therefore, the trial court does not err in disallowing voir dire questions concerning parole. See, e.g., Collier v. State, 959 S.W.2d 621, 623-24 (Tex.Crim.App.1997), pet. for cert. filed (U.S. May 12, 1998) (No. 97-9054); Eldridge v. State, 940 S.W.2d 646, 651 (Tex. Crim.App.1996); see also Smith v. State, 898 S.W.2d 838 (Tex.Crim.App.) (plurality op.), cert. denied, 516 U.S. 843, 116 S. Ct. 131, 133 *252 L.Ed.2d 80 (1995) and Broxton v. State, 909 S.W.2d 912, 919 (Tex.Crim.App.1995) (adopting reasoning in Smith plurality opinion). Appellant's twelfth point of error is overruled.
Finding no reversible error, we affirm the judgment of the trial court.
KELLER, J., filed a concurring opinion, joined by McCORMICK, P.J., and OVERSTREET, J., dissented to points of error six and twelve.
BAIRD, J., not participating.
KELLER, J., concurring.
Art. 36.29 requires that a jury be discharged if a juror becomes disabled so that he is unable to continue his duty or if the jury is prevented from being kept together "under circumstances under which the law requires that they be kept together." The "disabled" language seems to contemplate a permanent disability from continuing one's duty as a juror. Juror Smith was not "disabled" under Art. 36.29 because he was able to continue his duty, albeit after a delay. The question then becomes whether Art. 36.29 required discharge of the jury because "the law required" that the jury be kept together. Art. 35.23 allows a jury to be sequestered after the charge is given. The majority understands Art. 35.23 to require sequestration for the period beginning with the charge on guilt/innocence and ending with the verdict of guilty, and for the period beginning with the charge on punishment and ending with the verdict on punishment, but not for the period between the guilty verdict and the charge on punishment. I think this is a reasonable reading of the statute, but even if it is not there was no reversible error in this case.
Art. 35.23 states that after the charge is given, a trial court may sequester a jury on his own motion but must sequester a jury on motion of either party. I think the jury had been sequestered in this case. However, the record does not show a motion to sequester the jury. Thus, the sequestration could have been on the court's own motion. If the jury is sequestered on the court's own motion, the "law requires" that it be kept together. But since sequestration after the charge is permissive rather than mandatory if it is on the court's own motion, it appears plain that the court that ordered sequestration could, in effect, dissolve that order and allow the jury to separate.
The same is true if the sequestration was on the State's motion. The State's request to allow the jury to separate would be, effectively, a request to withdraw its motion, which the court could allow.
If the sequestration was on motion of the defense, then "the law required" that the jury be kept together. We have held that in such cases the defendant is entitled to reversal unless the State successfully rebuts the presumption of harm raised by the improper jury separation. Reed v. State, 595 S.W.2d 856 (Tex.Crim.App.1980). But although a harm analysis is appropriate, see Cain v. State, 947 S.W.2d 262 (Tex.Crim.App.1997), harm should no longer be assessed by the standard used in Reed. Because any error is statutory (failure to comply with Art. 35.23) rather than constitutional, the proper test for harm is provided by R. 44.2(b) of the Texas Rules of Appellate Procedure: any error in allowing the separation of the jury that did not affect substantial rights must be disregarded. Here, the record shows that prior to the separation the trial court instructed the jury not to read anything about the case, not to listen to anything about the case, and not to discuss the case with anyone. On this record, any error in allowing the jury to separate was harmless.
With these comments, I join the opinion of the Court.
McCORMICK, P.J., joins.
NOTES
[1] Any further reference to articles will be to those in the Texas Code of Criminal Procedure in effect at the time of the offense unless otherwise noted.
[2] Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).
[3] This fact scenario was suggested by appellant's statement to police, but was not apparent from the medical evidence alone.
[4] Further, we note that appellant's argument pertaining to his second point of error on protection against re-prosecution consists primarily of the bare assertion, "Had the jury returned a verdict of not guilty, Appellant could have been charged with, indicted for, and retried for the offense of capital murder, with the manner and means of Jo Ann Reed's death being alleged as asphyxiation." Appellant fails to support this assertion with legal authority or argument.
[5] Article 35.23 in effect at the time of the offense provides in relevant part:
The court may adjourn veniremen to any day of the term. When jurors have been sworn in a felony case, the court may, at its discretion, permit the jurors to separate until the court has given its charge to the jury. The court on its own motion may and on the motion of either party shall, after having given its charge to the jury, order that the jury not be allowed to separate, after which the jury shall be kept together, and not permitted to separate except to the extent of housing female jurors separate and apart from male jurors, until a verdict has been rendered or the jury finally discharged.
[6] Article 36.29 provides in relevant part:
(c) After the charge of the court is read to the jury, if any one of them becomes so sick as to prevent the continuance of his duty, or any accident of circumstance occurs to prevent their being kept together under circumstances under which the law or the instructions of the court requires that they be kept together, the jury shall be discharged.
[7] Appellant contends that the term "charge" as used in the statute refers only to the guilt/innocence charge and any separation after that charge had been read was error. We disagree. "Since this was the second phase of a bifurcated trial, in which a completely different charge is given to the jury," the term "charge" in the statute logically refers to the charge at the punishment phase. See Sanchez v. State, 837 S.W.2d 791, 795 (Tex.App.-Hous. [14th Dist.] 1992, pet. ref'd); Campbell v. State, 644 S.W.2d 154, 162, 165 (Tex.App.Austin 1982, pet. ref'd). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2441258/ | 944 S.W.2d 731 (1997)
Joseph J. DiGRAZIA and Thomas J. DiGrazia, Appellants,
v.
ATLANTIC MUTUAL INSURANCE COMPANY, Appellee.
No. 06-96-00068-CV.
Court of Appeals of Texas, Texarkana.
Argued April 8, 1997.
Decided April 18, 1997.
*732 Stephen T. Arnold, for Appellants.
Melvin Wilcox III, Smead, Anderson, Wilcox, Dunn, Longview, Robert W. Weber, Atchley, Russell, Waldrop, Hlavinka, Texarkana, for Appellee.
Before CORNELIUS, C.J., and GRANT and ROSS, JJ.
OPINION
ROSS, Justice.
Joseph J. DiGrazia and Thomas J. DiGrazia appeal from a summary judgment granted in favor of Atlantic Mutual Insurance Company. We sever and affirm the summary judgment as to the appellants' DTPA and Insurance Code claims, but reverse the summary judgment on the appellants' fraud claim and remand for trial.
Many of the facts of this case were set out in a previous opinion of this Court. DiGrazia v. Old, 900 S.W.2d 499 (Tex.App.-Texarkana 1995, no writ). The appellants owned a two-year-old thoroughbred filly, Greatmate, which they delivered to Ray Shumake's racehorse training farm in Bowie County. On May 24, 1991, Shumake took the horse to veterinarian Gary Old for treatment of a tendon problem. Old treated the horse with a procedure known as pin firing and returned the horse to Shumake. On June 1, 1991, Shumake returned the horse to Old because the skin on the horse's legs was sloughing. The horse remained at the veterinary hospital until June 5, 1991, when an electrical storm occurred in the area. That evening, Old found the horse dead in her stall. The appellants were quickly informed of Greatmate's death. Old prepared a necropsy report, stating that the horse probably died either of electrocution due to the storm or septicemia (blood poisoning). The report stated that septicemia was the more probable cause of death.
Old informed his liability insurer, the appellee, of the incident. When the appellants asked about the necropsy results, Old told them that the records had been forwarded to the appellee. The appellants asked the appellee about the report, but were told that the report was being evaluated and was unavailable. The appellee did not tell the appellants that there was a possible cause of death other than electrocution. Finally, on November 30, 1991, the appellants received a copy of the necropsy report.
The appellants filed a negligence action against Old and Shumake on November 8, 1993. The trial court granted summary judgment in favor of the defendants because the suit was barred by a two-year statute of limitations. See TEX.CIV.PRAC. & REM.CODE Ann. § 16.003 (Vernon 1986). On appeal, the appellants contended that the summary judgment was erroneous because they had raised the affirmative defense of fraudulent concealment. On June 13, 1995, this Court reversed the summary judgment in favor of Old because he had not conclusively negated fraudulent concealment. However, we affirmed the summary judgment in favor of Shumake because there was no evidence that Shumake actually knew that septicemia was the probable cause of death or that Shumake purposefully concealed this fact from the appellants.
On November 20, 1995, the appellants filed a first amended petition, adding the appellee as a defendant. The appellants asserted fraud, DTPA, and Insurance Code claims, alleging that the appellee affirmatively misrepresented that electrocution was Greatmate's cause of death, thereby preventing the appellants from asserting a cause of action against Shumake. On June 13, 1996, the *733 appellee filed a motion for summary judgment, arguing that it owed no duties on which to predicate liability, that the DTPA and Insurance Code were inapplicable, that there was no independent cause of action for fraudulent concealment, and that the appellee's actions did not proximately cause the appellants' damages. On August 6, 1996, the trial court granted summary judgment in an order that also severed the appellants' claims against the appellee from the appellants' claims against Old.
The appellee has the burden of showing this Court that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX.R.CIV.P. 166a(c); Wilcox v. St. Mary's Univ., 531 S.W.2d 589, 592-93 (Tex.1975). In granting summary judgment, the trial court did not limit its ruling to any of the particular grounds urged by the appellee. Therefore, we must affirm the summary judgment for any cause of action for which any of the theories advanced in the summary judgment motion was meritorious. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993).
The appellee's summary judgment evidence consists solely of an affidavit of one of its employees, noting that the appellants are not insured by the appellee. This affidavit is not relevant to the issues before us. Therefore, the appellee has presented no summary judgment evidence. However, appellate review is not precluded if the summary judgment motion was granted based on a point of law, with undisputed facts. Segrest v. Segrest, 649 S.W.2d 610, 611 (Tex.1983); Sandler v. Bufkor, Inc., 658 S.W.2d 289, 292 (Tex. App.-Houston [1st Dist.] 1983, no writ); Gupta v. Ritter Homes, Inc., 633 S.W.2d 626, 628 (Tex.App.-Houston [14th Dist.] 1982), aff'd in part & rev'd in part on other grounds, 646 S.W.2d 168 (Tex.1983).
The appellants' brief does not contravene the appellee's summary judgment argument that the Insurance Code and DTPA provisions are inapplicable. We consider unargued bases for reversing a summary judgment, if the appellant challenges the summary judgment with a single general point of error. Stevens v. State Farm Fire and Cas. Co., 929 S.W.2d 665, 669-70 (Tex.App.-Texarkana 1996, writ denied). In this case, the appellants specifically challenge the arguments that fraud was not actionable, that the appellee owed no duties to the appellants, and that there was no proximate cause. Because the appellants do not argue on appeal that the trial court incorrectly determined that the Insurance Code and DTPA were inapplicable, this Court need not consider such an argument as a ground for reversal. We cannot reverse a summary judgment based on a ground not assigned as a point of error. San Jacinto River Auth. v. Duke, 783 S.W.2d 209, 209-10 (Tex.1990); Central Educ. Agency v. Burke, 711 S.W.2d 7, 8 (Tex.1986). Therefore, we review only the granting of summary judgment on the fraud claim.
The appellee first argues that "[i]n essence, Appellants are trying to use fraudulent concealment as a cause of action to recover for the statute of limitations against a nonparty in the suit." Because fraudulent concealment equitably estops a party claiming the statute of limitations, Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex.1983), the appellee argues that it cannot be the basis of an independent cause of action. The appellee's argument mischaracterizes the appellants' case. The appellants plead common-law fraud, claiming that the appellee "represented that the sole cause of death of Plaintiffs' horse was electrocution...." Therefore, we must ask whether a party may be held liable in fraud for misrepresentations that caused another party to delay suing a third party until after the running of the statute of limitations. Relevant Texas case law is sparse. In Wichita Falls & S.R. Co. v. Durham, 132 Tex. 143, 120 S.W.2d 803 (1938), the plaintiff was injured on the job and settled with his employer. Subsequently, he twice sued his employer for negligence under the Federal Employers' Liability Act (FELA). The Act provided that "[n]o action shall be maintained under this chapter unless commenced within two years from the day the cause of action accrued." Id. at 803. The first suit was voluntarily dismissed. The second suit was dismissed because it was not *734 filed within two years of accrual. The plaintiff subsequently filed a third suit, alleging that he lost his cause of action as a result of fraud by the employer. On these facts, the Texas Supreme Court held that the plaintiff could not maintain an action for fraud. The court noted that FELA's time bar, unlike most statutes of limitations, was not tolled by fraudulent concealment. Instead, it was an absolute bar to suit once two years had passed. Therefore, the plaintiff's suit sought an end around FELA's bar. The court concluded that such an end-around could not be permitted:
No fact has been pointed out either by the Court of Civil Appeals or by defendant in error of any damages suffered by defendant in error, Durham, in this case, by reason of the alleged fraud, except such as flowed proximately from the alleged negligent act of the company, and which admittedly died at the end of two years from the date of the accident.
Of the three cases filed by defendant in error, the factual basis, as we view it, for each was essentially the same. The first and second admittedly could not be maintained. Nor could the third, which is the present case, unless proof was made of damages separate and apart from his original case of negligence. If such a case is ever maintainable, it could be only upon a basis differing in some of its essentials from the one already dead and effectually released by law. If he could make such proof, none such appears here. He depended in this case upon proof of the original negligence, the consequent damages and the fraud, which was exactly his original cause of action, which the law precludes.
Id. at 804.
Durham is distinguishable from the instant case. In this case, the original cause of action was subject to a traditional statute of limitations that could be overcome by a showing of fraudulent concealment. Therefore, we cannot say that the appellants seek an end around the statute. For example, if Shumake had fraudulently concealed the cause of the horse's death, the appellants could have maintained a negligence action against him, even though it was filed more than two years after accrual. As a result, in this case, it is more inconsistent not to allow the action against the appellee. Such a holding would provide plaintiffs a recovery if defrauded by the original tortfeasor, but not if defrauded by another party.
Thomas J. Griffin, Annotation, Fraud and Deceit: Liability in Damages for Preventing Bringing of Action Before Its Being Barred by Statute of Limitations, 33 A.L.R. 3d 1077, 1080 (1970), discusses whether "one fraudulently prevented from bringing an action until after such time as it becomes barred by a statute of limitations may maintain an action based on fraud and deceit to recover damages for the loss thus occasioned." Usually, the answer is yes:
It is noted, however, that while under the particular circumstances of several cases a negative position has been taken with respect to the maintainability of such an action, the courts therein variously reasoning, for example, that to allow an action for fraud on such grounds would be to permit the recovery of speculative damages or the accomplishment by indirection of that which cannot be done directly, the majority of those courts considering diverse cases of attempted recovery by persons allegedly duped into permitting their right of action to become so barred apparently regard as fully applicable thereto those rules and principles relating to fraud actions generally, and have, in consonance therewith, held or recognized that where one having an enforceable legal right is fraudulently prevented from bringing an action thereon until barred by a statute of limitations, a cause of action will lie for the loss suffered in consequence.
Id. at 1082 (footnotes omitted). The appellee offers no explanation why the reasoning of these cases would not permit a plaintiff to sue a party whose fraud caused the plaintiff to lose its cause of action against a third party. Absent any precedent, we decline to hold that the appellants may not maintain a cause of action in fraud against the appellee.
The appellee argues that, as a matter of law, it did not defraud the appellants because it did not have a duty to tell them *735 about the necropsy report. The appellee again is confusing fraudulent concealment and fraud based on affirmative misrepresentation. A party can be held liable for fraud if it breaches a duty to disclose, usually created by a fiduciary or confidential relationship. Emerald Texas, Inc. v. Peel, 920 S.W.2d 398, 403 (Tex.App.-Houston [1st Dist.] 1996, no writ); Swanson v. Schlumberger Tech. Corp., 895 S.W.2d 719, 732 (Tex.App.-Texarkana 1994, writ granted). However, duty is not an element of fraud by affirmative misrepresentation. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983) (listing the six elements of fraud by affirmative misrepresentation). The appellants do not allege that the appellee merely concealed Greatmate's cause of death. Instead, they allege that the appellee affirmatively misrepresented to them that the sole cause of death was electrocution. Therefore, they need not show that the appellee owes any duty to them.
The appellee also contends that, as a matter of law, it did not cause the appellants' damages because it provided the necropsy report to the appellants nineteen months before the statute of limitations ran. The appellants argue that there is no causation required to maintain a fraud cause of action. This argument is unavailing. To recover for fraud, a party must plead and prove that he suffered a pecuniary loss as a result of the false representation upon which he relied. The measure of damages is the actual amount of the complainant's loss resulting directly and proximately from fraud. C & C Partners v. Sun Exploration and Prod. Co., 783 S.W.2d 707, 718-19 (Tex.App.-Dallas 1989, writ denied). "Pecuniary losses that could not reasonably be expected to result from the misrepresentation are, in general, not legally caused by it and are beyond the scope of the maker's liability. This means that the matter misrepresented must be considered in the light of its tendency to cause those losses and the likelihood that they will follow." RESTATEMENT (SECOND) OF TORTS § 548A cmt. b (1977).
The appellants also argue that:
[I]t is axiomatic that there is a causal connection between Defendant Atlantic Mutual's conduct and the loss of the cause of action by limitations against former Defendant Shumake, because the Sixth Court of Appeals has already held that the limitations period may be tolled concerning the cause of action against Defendant Old.
Now it is the appellants who are confusing common-law fraud and fraudulent concealment. "Fraudulent concealment ... tolls or suspends the running of the limitations period after it has commenced because the defendant has concealed from the plaintiff facts necessary for him to know that he has a cause of action against the defendant." DiGrazia, 900 S.W.2d at 504. In other words, fraudulent concealment does not have to cause the plaintiff's failure to file within the limitations period. Instead, fraudulent concealment operates to extend the limitations period. In contrast, fraud requires a showing of causation.
Nevertheless, the summary judgment was erroneous because we have before us no summary judgment evidence. Therefore, we cannot say that the appellee conclusively proved that its actions did not cause the appellants' damages. Therefore, we sever and affirm the summary judgment on the appellants' DTPA and Insurance Code claims, but reverse the summary judgment on the appellants' fraud claim and remand for trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1891128/ | 66 B.R. 454 (1986)
In re Wallace Stine BEAN, SSN: XXX-XX-XXXX and Mattie Mae Bean, SSN: XXX-XX-XXXX, Debtors.
Bankruptcy No. 86 B 06788 J.
United States Bankruptcy Court, D. Colorado.
October 16, 1986.
John A. Cimino, Cimino & Gonzales, Denver, Colo., for debtors.
Frank O. Bowman, III, Deputy Dist. Atty., Denver, Colo., for the People of the State of Colo.
MEMORANDUM OPINION AND ORDER
ROLAND J. BRUMBAUGH, Bankruptcy Judge.
THIS MATTER comes before the Court on the Motion for Relief from Stay filed by the People of the State of Colorado ("State"). This matter constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(G), and this Court recognizes jurisdiction pursuant *455 to 28 U.S.C. § 1334. A hearing was held on the motion on October 16, 1986.
The debtors are the sureties on an appearance bond posted in the case of People v. Quintin Wortham, Case no. 85 CR 1575. The debtors posted the $10,000.00 bond so that Quintin Wortham, their son, could remain free while appealing a conviction for first-degree criminal trespass. As security for the bond, the debtors pledged their Denver, Colorado residence.
Wortham failed to appear in Denver District Court on June 13, 1986, as ordered by Judge Roger Cisneros. On that same date, Judge Martin Steinberg forfeited the bond and issued an order to show cause why judgment should not be entered on the forfeiture. At a hearing on July 14, 1986, Wortham had still not appeared, and Judge Edward E. Carelli ordered that judgment enter on the forfeiture. Judge Carelli stayed the execution of the order for fourteen days, to allow the debtors time to produce Wortham. On July 28, 1986, the debtors filed their bankruptcy petition.
In deciding the instant motion, the Court must address two issues. First, the Court must determine if the automatic stay applies in a case where the state seeks to execute a judgment on the forfeiture of collateral for a personal appearance bond. Second, if the automatic stay applies to this case, the Court must consider whether the facts of the case warrant granting of relief from stay under § 362(d) of the Bankruptcy Code.
Section 362(a) of the Bankruptcy Code provides that a petition in bankruptcy operates as a stay of
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title; . . .
§ 362(b) specifies that the filing of a petition does not operate as a stay
. . . (4) under subsection (a)(1) of this section, of the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power;
(5) under subsection (a)(2) of this section, of the enforcement of a judgment, other than a money judgment, obtained in an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power; . . .
Under these sections, the automatic stay will apply to the judgment rendered against the debtors in this case, unless the State's actions fall within the exemptions of §§ 362(b)(4) and (5). The legislative history of §§ 362(b)(4) and (5) indicates that § 362(b)(4) "is intended to be given a narrow construction in order to permit governmental units to pursue actions to protect the public health and safety and not to apply to actions by a governmental unit to protect a pecuniary interest in property of the debtor or property of the estate." [124 Cong.Rec. H 11, 092 (Sept. 28, 1978); S 17, 409 (Oct. 6, 1986)] If a governmental unit sues a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or if the governmental unit seeks to fix damages for such violations, the stay does not apply. [House Report No. 95-595, 95th Cong., 1st Sess. 342-3 (1977); Senate Report No. 95-989, 95th Cong., 2d Sess. 51-2 (1978)], U.S. Code Cong. & Admin.News 1978, p. 5787. However, § 362(b)(5) provides that while entry of an injunction, enforcement of an injunction, or entry of a money judgment are exempt from stay, enforcement of a money judgment is not, to avoid according a governmental unit preferential treatment to the detriment of other creditors. Id.
The Eight Circuit has held the term "police or regulatory power" to refer to "the enforcement of state laws affecting health, *456 welfare, morals, and safety, but not regulatory laws that conflict directly with the control of the res or property by the bankruptcy court." Missouri v. United States Bankruptcy Court, 647 F.2d 768, 776 (8th Cir.1981), cert. denied, 454 U.S. 1162, 102 S. Ct. 1035, 71 L. Ed. 2d 318 (1982). The bankruptcy court in the Eastern District of New York noted that the operation of § 362(b)(4) is limited to exercises of police powers which are urgently needed to protect the public health & welfare. Matter of IDH Realty, Inc., 16 B.R. 55, 57 (Bankr.E. D.N.Y.1981); citing, King Memorial Hospital, Inc. v. Dept. of Health and Services, State of Florida, 4 B.R. 704 (Bankr.Fla. 1980). More recently, the District Court for the Eastern District of New York offered the following guidelines: "Whether governmental action falls within these exemptions depends on whether the government is protecting its pecuniary interest in the property of the debtor, or its interest in the public health and safety." United States v. Caro, 47 B.R. 995, 996 (E.D.N.Y. 1985); citing, Missouri v. United States, supra.
The operative factor would seem to be, then, whether the government action protects its own pecuniary welfare, or the health, safety, and welfare of the community. If the government proceeds against a pecuniary interest, it must necessarily be seeking money or property from the debtor. This trespasses on the assets of the estate, which are the sole province of the bankruptcy court. To provide additional defense of the court's exclusive territory, § 362(b)(5) prohibits the execution of a money judgment.
However, while this analysis forms a helpful conceptual starting point, and may offer guidance to the determination of very clear-cut cases, it breaks down under the complexity of the factual and policy issues of the instant case. In exercising its police or regulatory power to protect the public health, welfare, and safety, there is often little action that a governmental unit may take, short of arresting someone, which does not involve some sort of pecuniary interest. There may be cases, such as the one at bar, where the line between public welfare and pecuniary interest is so nebulous, and the policy consequences so grave, that the Court cannot easily classify the government's action. Instead, it must carefully weigh all the circumstances before determining whether that action was directed towards the debtors' property, or rather was to achieve protection of the public health, safety, and welfare.
An example of the dilemma that can arise appears in In re Smith, 58 B.R. 78 (Bankr.E.D.Penn.1986). The Smith court found that the Pennsylvania Department of Transportation did not violate the automatic stay when it instituted post-petition license revocation proceedings on a pre-petition citation for a minor infraction by the debtor, as this constituted exercise of a governmental unit's police or regulatory powers and was therefore exempt from the stay under § 362(b)(4). The court noted: "The fact that a fine is the only criminal sanction typically imposed for a minor violation of traffic laws does not transform the criminal action under scrutiny into a civil proceeding beyond the scope of a government's police or regulatory power." Id., at 80.
In the case at bar, the State is proceeding in the only logical manner open to it following a defendant's failure to appear. It is causing the collateral securing the posted bond to be forfeited.
This action affects the debtors' property in a serious and tragic way, but this effect is secondary to the public welfare objectives served by the State's action. The system of bail serves several functions. First, a defendant needs time to prepare for a case being tried or appealed, and so may be freed on bond. Second, the public safety demands an incentive for a person out on bail to appear at trial, hence a bond must be posted as an incentive. Further, permitting defendants to leave jail on an appearance bond helps eliminate overcrowding in jails, and reduces the occurrence of incarcerating an untried defendant for a lengthy period. The concept of bail is *457 fundamental to Anglo-American law and central to our modern criminal procedure.
However, this entire system could be undermined or destroyed if those persons who post appearance bonds may simply discharge their obligations under the protection of the Bankruptcy Code. Much, if not all, of the incentive value of posting a bond would be lost, and judges would be far less likely to free defendants on bail. In addition, the prospect of losing some or all of the money put up for bond would cause bail bondsmen to be extremely hesitant about writing bonds, and courts to be extremely apprehensive about accepting bonds, whether secured or unsecured. Eventually, freedom on bail would be restricted to those defendants who could pay cash up front, i.e., wealthy defendants only. Poor and middle class defendants would be forced to languish in overcrowded jails. The end results would be the virtual destruction of our system of bail, dangerous overcrowding of jails with pre-trial detainees, and inequitable discrimination against those defendants not fortunate enough to possess thousands of dollars in ready cash.
Weighing the circumstances in this case, therefore, the Court must conclude that the overriding objective of the State in executing on the judgment is to promote the crucial public welfare goal of preserving the integrity of the State's bail system. That the government must do this in a way which affects property of the debtor does not, without more, remove the action from the scope of the exemption contained in § 362(b)(4), or place it in the restriction against the enforcement of money judgments contained in § 362(b)(5). The State's proceeding against the debtors' collateral is an exercise of its legitimate police powers, and the automatic stay does not apply. It is, therefore,
ORDERED that the State's Motion for Relief from Stay is denied as moot because the stay is inoperative as to its contemplated action.
FURTHER ORDERED that the State may continue proceedings as to the bond posted by the debtors, including execution on the judgment of forfeiture. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1126178/ | 776 So.2d 1 (2000)
Denny Raymond FROMENTHAL and Carol Jean Fromenthal, Wife of Denny Raymond Fromenthal
v.
DELTA WELLS SURVEYORS, INC.
No. 98-CA-1525.
Court of Appeal of Louisiana, Fourth Circuit.
October 4, 2000.
Opinion Granting Rehearing December 20, 2000.
Writ Denied March 16, 2001.
*2 John M. Holahan, Metairie, Counsel for Plaintiffs/Appellants.
Daniel E. Knowles III, Brien J. Fricke, Burke & Mayer, New Orleans, Counsel for Defendant/Appellee.
(Court composed of Judge WILLIAM H. BYRNES, III, Judge STEVEN R. PLOTKIN, Judge MIRIAM WALTZER, Judge JAMES F. McKAY, Judge DENNIS R. BAGNERIS, Sr.)
*3 PLOTKIN, Judge.
Plaintiffs Denny Raymond and Carol Jean Fromenthal appeal a trial court judgment on a jury verdict awarding them $65,808.53 in damages and assigning 73 percent comparative fault to Mr. Fromenthal for injuries incurred when he fell off a ladder while leaving a barge at a marine facility owned and operated by defendant Delta Well Surveyors, Inc. For the reasons explained below, we vacate the lower court judgment, and perform a de novo review. Following our review, we assign liability 50 percent to Mr. Fromenthal and 50 percent to Delta Well. Moreover, we award the Fromenthals a total of $444,724.19 in damages.
I. FACTS
Mr. Fromenthal suffered a fractured right hip on September 23, 1994, when he fell from an aluminum ladder while performing a sales call on Delta Well premises. Mr. Fromenthal testified that he arrived on the premises of Delta Well sometime after noon and parked in the parking lot. Mr. Fromenthal, who was a diesel mechanic, regularly visited the premises as a part of his employment duties for Eckstein Marine; he was seeking contract work. E.J. Adolph, Delta Well's mechanic was his contact at Delta Well; he had been told on his first visit to Delta Well some six to eight weeks before the accident that Mr. Adolph was the only person who would know if contract mechanic work was available. Mr. Fromenthal had been visiting Delta Well approximately once a weekusually on Thursday or Fridaysince his first visit; he always talked to Mr. Adolph. In fact, he had previously received work from Delta Well through Mr. Adolph. The record contains two invoices from Detroit Specialists Corp., Eckstein Marine's subsidiary, to Delta Wellone for repair of a blower dated August 26, 1994, and one for various types of work on a head, cam shafts, and injectors, dated August 11, 1994.
Once Mr. Fromenthal arrived on the premises on the day of the accident, someone in the office informed him that Mr. Adolph was working on board a vessel, the M/V Able Queen. Mr. Fromenthal proceeded to that vessel and climbed a ladder that was leaning against the side of the vessel; the vessel was a jack-up barge that was elevated approximately 12 to 15 feet at the time that Mr. Fromenthal arrived. Once he reached the deck, Mr. Fromenthal found Mr. Adolph, who was working below deck inside the hull of the barge, and discussed business with him. He then proceeded to climb down the ladder. While he was descending the ladder, it slid on the concrete deck, causing him to fall into the adjacent bayou. As a result of his fall, Mr. Fromenthal underwent emergency surgery requiring the placement of five pins to stabilize his fractured right hip. At the time of trial in February 1997, Mr. Fromenthal had not returned to work. As explained in more detail below, the parties gave conflicting versions of other facts concerning the events surrounding the accident.
A four-day trial on the matter was held before a jury, after which the jury returned a verdict awarding the Fromenthals a total of $65,808.53. Moreover, the jury apportioned fault 73 percent to Mr. Fromenthal and 27 percent to Delta Well. The Fromenthals appeal, setting forth a number of legal and procedural errors, and seeking review of both the liability findings and the quantum award.
II. LEGAL AND PROCEDURAL ERRORS
The Fromenthals claim that the trial court made the following legal and procedural errors: (1) failing to allow testimony from their proffered expert in marine operations, (2) allowing repeated references to Mr. Fromenthal's workers' compensation claim in violation of La. C.E. art. 414, (3) removing the owner of the barge, P & S Well Service, Inc., from the jury interrogatories, and (4) failing to transcribe the voir dire of the jury, as well as other *4 significant portions of the trial court proceedings. This court has previously found as follows:
[T]he cumulation of trial judge errors in evidentiary rulings, coupled with other improper circumstances occurring at trial, may be so prejudicial as to deprive the parties of a fair trial, and thus may constitute reversible error, even if none of the errors considered alone would be sufficient to rise to the level of reversible error.
Dixon v. Winn-Dixie Louisiana, Inc., 93-1627, p. 3 (La.App. 4 Cir. 5/17/94), 638 So.2d 306, 312, citing Clement v. Griffin, 91-1664 (La.App. 4 Cir. 5/17/94), 634 So.2d 412, writs denied, 94-0717, 94-0777, 94-0789, 94-0791, 94-0799, 94-0800 (La.5/20/94), 637 So.2d 478, 479. Thus, we will consider whether the legal and procedural errors alleged by the Fromenthals demand de novo review of the record in this case.
A. Exclusion of Commander Cole's testimony
The Louisiana Third Circuit Court of Appeal has held as follows:
Generally, an appellate court is precluded from reviewing a jury's finding of fact in the absence of manifest or clear error. However, when a trial court erroneously instructs the jury in law, or makes a consequential error in the exclusion of evidence, the trial court judgment which implements the jury verdict should not be accorded any weight. When an appellate court has all of the facts before it in such situations, it has the constitutional duty to review questions of law as well as facts presented and should render judgment on the record.
Jaffarzad v. Jones Truck Lines, Inc., 561 So.2d 144, 152 (La.App. 3 Cir.1990), writ denied, 561 So.2d 144 (La.App. 3d Cir. 1990), citing McLean v. Hunter, 495 So.2d 1298 (La.1986) (citations omitted; emphasis added). The McLean and Jaffarzad cases are particularly instructive in our review of the instant case because the courts found in both cases that a trial court's exclusion of expert testimony so prejudiced the jury's verdict that "judgment on the record" (or de novo review) was appropriate. In the instant case, the only expert testimony concerning marine operations offered by any party was the testimony of retired Coast Guard Commander David E. Cole, which was offered by the Fromenthals. Thus, we will first consider whether the trial court properly excluded Commander Cole's testimony, and, if so, whether the exclusion of that evidence was prejudicial to the Fromenthals.
Following an initial period of questioning of Commander Cole outside the presence of the jury, Delta Well objected to the admission of his testimony by characterizing the case as one "about authorization to board a vessel, permission to board a vessel, and a simple climbing of a ladder to board a vessel" and by asserting that "there's no scientific or technical knowledge required." In excluding Commander Cole's testimony, the trial court stated as follows:
I find the Commander is a credible person. I have, I don't think there was objection passed when he testified. This is the first time this objection has been raised. I feel constrained to sustain the objection. I am going to charge the jury with the standard. Now I expect you to prepare that for me. I will charge them because I think that is more in the area of law that deals with the art of the statement of law than it is a statement of fact. I will make this testimony outside the presence of the jury a proffer for the record. If you have anything else to put on the proffer at this time I'll let you do that.
On appeal, the Fromenthals assert that, contrary to Delta Well's objection at trial, they laid an adequate foundation for Commander Cole's testimony by showing that marine facilities and operators, like Delta Well, are required to possess specialized *5 knowledge of particular regulations and standards. On appeal, Delta Well continues to assert that Commander Cole's testimony would not have assisted the jury in determining any fact at issue in the litigation.
Under Louisiana law, the admission of expert witness testimony is controlled by La. C.E. art 702, which provides as follows:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.
The trial court expressly found that Commander Cole was credible. Moreover, the record supports the Fromenthals' assertion that Commander Cole possessed specialized knowledge concerning the regulations and standards applicable to marine operations, like Delta Well. Commander Cole stated that he performed marine inspections for 18 years while he was a member of the Coast Guard. He described the duties of a marine inspector as follows: "[I]nspecting vessels to determine if they comply with the appropriate rules and regulations that apply to them and consist of the licensing of merchant marine personnel." Commander Cole also stated that he received training in ladder safety through various service schools and that he had investigated many ladder accidents.
On appeal, Delta Well claims that the exclusion of Commander Cole's testimony was proper for three reasons: (1) the issues presented by the case "required no scientific or technical knowledge," (2) Commander Cole intended to testify concerning an "ultimate issue" in the case, and (3) Commander Cole's proffered testimony was not admissible under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).
First, Delta Well claims as follows: "It was the intention of the plaintiff to introduce the testimony of Cole as `authority' on very simple issues such as whether a tied ladder is more secure than an untied ladder and how to climb a ladder." However, the proffer of Commander Cole's testimony indicates that his testimony would have addressed a number of other issues, such as the following: (1) the substance of OSHA and ANSI standards applicable to marine operations, (2) whether Delta Well violated any of those regulations, and (3) whether those violations contributed to Mr. Fromenthal's accident and injury.
Second, Delta Well complains that Commander Cole's might have suggested that Delta Well was liable in this case for its failure to comply with OSHA and ANSI standards. However, the fact that Commander Cole's testimony might have addressed an ultimate issue in the case is not grounds for objection. La. C.E. art. 704, relative to expert opinion on an ultimate issue, expressly provides, in pertinent part, as follows:
Testimony in the form of an opinion or inference otherwise admissible is not to be excluded solely because it embraces an ultimate issue to be decided by the trier of fact.
(Emphasis added.)
Third, Delta Well claims that Commander Cole's testimony was properly excluded under the standards enunciated by the United States Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), which was adopted by the Louisiana Supreme Court in State v. Foret, 628 So.2d 1116 (La.1993). We disagree. Our review of the proffer reveals no reason to question either the scientific reliability of the testimony or the reasoning or methodology underlying the testimony. Moreover, the testimony does not involve scientific experimentation; therefore, neither the known or potential rate of failure, the existence of standards controlling the technique's operation, the technique's "reputability" *6 or testability, or general acceptance in the scientific community are a concern. Commander Cole's proposed testimony is not scientific; rather, it is purely technical. Nothing in the record indicates that Commander Cole's proposed testimony violated the principles established by Daubert.
Moreover, the exclusion of Commander Cole's testimony in this case was unquestionably prejudicial to the Fromenthals. As previously noted, Commander Cole's testimony was in fact the only expert testimony offered in this case. Additionally, review of the proffer reveals that Commander Cole intended to testify concerning OSHA and ANSI regulations and standards applicable to all marine operations, including Delta Well. No other witness testified to those standards; thus, the jury did not hear any evidence concerning the existence of the standards and regulations. Such evidence is relevant to this case, which the Fromenthals claim involves an injury caused by violation of those exact standards and regulations. Accordingly, we find that the trial court's exclusion of this evidence was prejudicial to the Fromenthals' case. Moreover, under the rule enunciated in McLean and Jaffarzad, de novo review is appropriate solely because of this "consequential error in the exclusion of evidence." Jaffarzad, 561 so.2d at 152.
B. References to worker's compensation case
Our conclusion that de novo review is appropriate in this case is further supported by the fact that the record reveals that the trial court allowed repeated references to Mr. Fromenthal's workers' compensation claim, in violation of La. C.E. art. 414, which provides as follows:
Evidence of the nature and extent of a worker's compensation claim or of payment of past or future worker's compensation benefits shall not be admissible to a jury, directly or indirectly, in any civil proceedings with respect to a claim for damages relative to the same injury for which the worker's compensation benefits are claimed or paid. Such evidence shall be admissible and presented to the judge only.
The Fromenthals claim that Delta Well's attorney repeatedly referred to Mr. Fromenthal's workers' compensation claim. Our review of the record indicates that the workers' compensation issue was directly introduced by Delta Well's attorney when he asked Mr. Fromenthal the following question: "The question was, is there going to come a time when your compensation benefits run out, do you know?" Moreover, Delta Well's attorney made several references to the "State's" report during its questioning of Mr. Fromenthal. Delta Well argues that the Fromenthals' attorney also asked questions concerning the workers' compensation issue, implying that those questions should prevent the Fromenthals from raising the issue on appeal. However, the record clearly reveals that the references made by the Fromenthals' attorney came after the introduction of the issue by Delta Well's attorney and that they were designed to explain testimony already elicited by Delta Well's attorney. The admission of this improper evidence also provides support for our decision to perform a de novo review of this case.
C. Other legal and procedural errors
Because the trial court's exclusion of the expert testimony of Commander Cole, especially when coupled with the admission of testimony concerning Mr. Fromenthal's workers' compensation suit, requires de novo review of the trial court record in this case, we pretermit discussion of the other two alleged legal and evidentiary errors committed by the trial judge. We hereby vacate the trial court judgment on liability, and perform a de novo review of the record evidence.
III. LIABILITY
Like a trial court, an appellate court performing a de novo review in a case involving competing allegations of liability *7 must consider two issues: (1) the defendant's liability; and (2) the plaintiff's comparative liability.
A. Delta Well
The most recent decision of the Louisiana Supreme Court considering the liability of a landowner for injuries caused by a dangerous condition on his property is Pitre v. Louisiana Tech University, 95-1466, 95-1487 (La.5/10/96), 673 So.2d 585, writ denied, 95-1466 (La.5/10/96), 673 So.2d 585. Under the principles enunciated in Pitre, the liability of a landowner is governed by La. C.C. arts. 2315 and 2316, "which make all persons responsible for damages caused by their `negligence.'" Id. at 8, 673 So.2d at 589. The analysis adopted by Louisiana courts to determine whether liability exists under La. C.C. arts. 2315 and 2316 is called the "duty/risk analysis." Id.; Howard v. Derokey, 98-0893 (La.App. 4 Cir. 2/10/99), 729 So.2d 654, 656. In order to determine liability under the duty/risk analysis, a court must consider the following "relevant inquiries":
(1) Was the conduct of which the plaintiff complains a cause-in-fact of the resulting harm?
(2) What, if any, duties were owed by the respective parties?
(3) Whether the requisite duties were breached?
(4) Was the risk, and harm caused, within the scope of protection afforded by the duty breached?
(5) Were actual damages sustained?
Pitre at 8, 673 So.2d at 589-90.
The Fromenthals claim that Delta Well is liable for Mr. Fromenthals' accident and injury for two reasons: (1) failure to secure the ladder by properly tying it off after setting it up, and (2) failure to warn or protect Mr. Fromenthal of the dangerous condition presented by the unsecured ladder. We will analyze each of those claims under the duty-risk analysis.
1. Failure to secure ladder
First, the Fromenthals claim that Delta Well is liable for Mr. Fromenthal's accident and injury because it failed to secure the ladder safe by properly tying it off after setting it up.
a. Cause in fact
Under Pitre, the first question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to secure the ladder by tying it off is whether that failure was a cause in fact of the accident and injury. That question is easily answered in the affirmative because the record evidence clearly reveals that a ladder that is properly tied off will not fall, even if it slips. Tom Danley, Delta Well's port captain, testified that he had climbed on ladders that had started to slip, but did not fall because they were tied off. Thus, we find that Delta Well's failure to tie off the ladder was a cause-in-fact of Mr. Fromenthal's injuries.
b. Duty to secure ladder
The second question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to secure the ladder by properly tying it off is whether Delta Well had a duty to secure the ladder by properly tying it off. Relative to that question, Commander Cole testified that both OSHA regulations and ANSI regulations require marine facilities to provide an adequate means for getting on and off a vessel. When a ladder is used, Commander Cole stated, it must be secured, meaning that the ladder should be tied at the top and the bottom to prevent slippage. Commander Cole also indicated that ladders should have slip-resistant footings for the same reason. Marine facilities, such as Delta Well, should be aware of those regulations, Commander Cole stated. Moreover, Delta Well's employees admitted that the ladder should have been tied off if anyone was climbing on it. Accordingly, *8 we find that Delta Well had a duty to properly tie off the ladder.
c. Breach of duty to tie off the ladder
It is undisputed that the ladder in question was neither tied off nor fitted with slip-resistant footings at the time of Mr. Fromenthal's accident and injury. Delta Well claims however that the failure to tie the ladder off at the time of Mr. Fromenthal's accident was not a breach of duty because of the circumstances surrounding their decision not to tie it off. Because the vessel had been jacked up and down several times on the day in question, Delta Well claims that it was impractical to tie and untie the ladder every time the vessel was moved. Delta Well claims that the duty to secure the ladder applies only when someone is actually climbing on the ladder and that its employees knew that they should tie off the ladder prior to climbing on it. However, as discussed in more detail below, under the circumstances presented by this case, Delta Well allowed access to the ladder to a person who did not know that he needed to tie off the ladder prior to climbing on it. Accordingly, we find that Delta Well breached its duty to properly tie off the ladder.
d. Scope of protection
The fourth question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to secure the ladder by properly tying it off is whether the risk and the harm caused were within the scope of protection afforded by Delta Well's duty to secure the ladder by tying it off. Like the cause-in-fact, question, this question is easily answered in the affirmative. The risk that Mr. Fromenthal would fall from the ladder and the harm that he would be injured in that fall are squarely within the scope of protection afforded by a duty to secure the ladder by tying it off.
e. Damages
The fifth, and final, question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to secure the ladder by tying it off is whether Mr. Fromenthal sustained actual damages as a result of Delta Well's breach of that duty. As discussed above, and in more detail in the "Damages" section below, Mr. Fromenthal suffered a fractured right femur, requiring emergency surgery and other circumstances. Thus, we find that Mr. Fromenthal did sustain actual damages as a result of Delta Well's breach of its duty to secure the ladder by tying it off.
2. Failure to warn or protect
Second, the Fromenthals claim that Delta Well is liable for Mr. Fromenthal's accident and injury because it failed to either warn Mr. Fromenthal of the danger of climbing on the unsecured ladder or protect him from the danger by preventing him from climbing on it.
a. Cause in fact
The first question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to warn or protect is whether that failure was a cause in fact of the injury. The record evidence is clear that neither the accident nor the injury would have occurred had Mr. Fromenthal not climbed on the ladder in question. Moreover, nothing in the record suggests that Mr. Fromenthal would not have heeded any warnings given by Delta Well employees concerning the dangerous nature of the ladder. Accordingly, we find that Delta Well's failure to warn or protect was a cause-in-law of Mr. Fromenthal's accident and injury.
b. Duty to warn or protect
The second question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to warn or protect is whether Delta Well had a duty to warn or protect Mr. Fromenthal of the dangerous condition of the unsecured ladder. Concerning a landowner's duties, the court stated as follows in Pitre: "A landowner owes a plaintiff a duty to discover *9 any unreasonably dangerous condition and to either correct the condition or warn of its existence." Id. at 9, 673 So.2d at 590. In the instant case, there is no real question that the danger presented by climbing an unsecured ladder leaning against a marine vessel and resting upon a concrete deck was unreasonable.
Moreover, Delta Well acknowledged the existence of the duty to warn and protect. Dwayne Briggs, Delta Well's vice-president, testified that all Delta Well employees were considered responsible for the safety of visitors on the premises, and that any employee seeing an unauthorized person about to climb on a ladder had a duty to stop the person. The question of authority to be on the premises was to be decided on a case-by-case basis, Mr. Briggs stated. Thus, we find that Delta Well did have a duty to warn or protect Mr. Fromenthal from the danger presented by the unsecured ladder.
c. Breach of duty
The second question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to warn or protect is whether Delta Well breached that duty. Relative to that question, both Mr. Briggs and Mr. Danley stated that they saw Mr. Fromenthal on the premises the day of the accident. In fact, Mr. Briggs admitted that Mr. Fromenthal came into the office just prior to the accident, asking about Mr. Adolph's whereabouts, while Mr. Danley said that he saw Mr. Fromenthal on the premises, walking toward the vessel, as close as 30 to 40 feet away. Both men stated that they recognized Mr. Fromenthal and knew that he was looking for Mr. Adolph, because Mr. Adolph was his contact. Both Mr. Briggs and Mr. Danley also knew that Mr. Adolph was working on the M/V Able Queen at the time. In fact, Mr. Danley said could see Mr. Adolph's head sticking up from the "hole" at the time he saw Mr. Fromenthal headed in that direction.
Nevertheless, neither Mr. Briggs nor Mr. Danley warned Mr. Fromenthal that he should not climb on the ladder in order to access the M/V Able Queen. Mr. Briggs stated that he assumed that Mr. Fromenthal would simply leave the premises once he learned that Mr. Adolph was on board a vessel and therefore unavailable. Moreover, after Mr. Fromenthal completed his business with Mr. Adolph, neither Mr. Adolph nor his co-worker on the vessel, Henry Kramer, warned Mr. Fromenthal concerning the dangerous condition of the ladder before Mr. Fromenthal started his descent.
Delta Well claims however that its employees did not need to warn Mr. Fromenthal directly because numerous signs were posted around the premises forbidding trespassing and restricting access to certain areas, including the dock where the M/V Able Queen was being repaired, to authorized personnel. Mr. Fromenthal admitted at trial that no one gave him express permission to climb the ladder or to go aboard the M/V Able Queen; however, he also testified that he did not notice the signs. Moreover, Mr. Briggs admitted both that Mr. Fromenthal had been authorized to enter the premises to talk to Mr. Adolph and that he had on previous occasions been allowed to enter some of the restricted areas posted with the signs. Under the circumstances, we find that Delta Well breached its duty to warn or protect Mr. Fromenthal from the dangerous condition of the ladder.
d. Scope of protection
The fourth question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to warn or protect is whether the risk and the harm caused was within the scope of protection afforded by Delta Well's duty to warn or protect. Obviously, both the risk and the harm were within the scope of protection afforded by that duty. The risk that Mr. Fromenthal would fall from the ladder and the harm that he would be injured in that *10 fall are squarely within the scope of protection afforded by a duty to warn of or protect against the dangerous condition of an unsecured ladder.
e. Damages
The fifth, and final, question to be answered in order to determine whether Delta Well is liable for Mr. Fromenthal's accident and injury because of its failure to warn or protect is whether Mr. Fromenthal sustained actual damages as a result of Delta Well's breach of that duty. As stated above and explained in more detail below, Mr. Fromenthal suffered a fractured right femur, requiring emergency surgery and other circumstances. Thus, Mr. Fromenthal did sustain actual damages as a result of Delta Well's breach of its duty to warn or protect.
3. Result of duty/risk analysis
As revealed by the above analysis, Delta Well is legally liable to the Fromenthals for the accident and injuries sustained by Mr. Fromenthal both on the basis of its failure to warn or protect Mr. Fromenthal from the dangerous condition of the ladder and on the basis of its failure to tie off the ladder. In fact, it is the breach of both those duties at the same time which makes the actions of Delta Well so egregious in the instant case. Had Delta Well fulfilled either of those duties, the accident would not have occurred and Mr. Fromenthal would not have been injured, even if Delta Well had breached the other duty.
In its brief to this court, Delta Well cites Shipley v. Shipley, 30,283 (La.App. 2 Cir. 2/25/98), 709 So.2d 901, and Shaw v. Fidelity & Casualty Insurance Co., 582 So.2d 919 (La.App. 2 Cir.1991), as authority for relieving it of all or most of the liability for Mr. Fromenthal's accident. In both those cases, the court found that landowners were not responsible for injuries incurred when the plaintiffs fell from ladders located on their premises. However, both Shipley and Shaw are factually distinguishable from the instant case because of one very important factnothing in either case indicates that the defendant landowner set up the unsecured ladder in the location where the fall occurred. In fact, the Shaw case indicates that the plaintiff himself set up the ladder. 582 So.2d at 921. The Shipley case does not identify the person who set up the ladder, but indicates that it was not the defendant landowner. In the instant case, the record is clear that the ladder had been set up by Delta Well's employees. Accordingly, we find no merit in Delta Well's arguments based on Shaw and Shipley.
B. Mr. Fromenthal
Having determined that Delta Well is legally liable for Mr. Fromenthal's accident and injury on the basis of the duty/ risk analysis, we now turn to the comparative liability of Mr. Fromenthal. The comparative fault of a plaintiff in a tort action is governed by La. C.C. art. 2323, which states, in pertinent part, as follows:
If a person suffers injury, death, or loss as a result partly of his own negligence and partly as a result of the fault of another person or person, the amount of damages recoverable shall be reduced in proportion to the degree or percentage of negligence attributable to the person suffering the injury, death, or loss.
Id. at 974, applied recently by this court in Guerra v. White, 97-2391 (La.App. 4 Cir. 6/16/99), 755 So.2d 894.
Delta Well claims that Mr. Fromenthal should be held liable for his own injuries under the facts of this case because of the following circumstances: (1) he ventured into a restricted area without authorization, (2) he failed to tie off the ladder prior to climbing on it, (3) he climbed the ladder improperly, and (4) he did not need to climb the ladder in order to converse with Mr. Adolph.
Concerning Delta Well's first claim, the testimony elicited at trial indicates that numerous signs were posted on Delta Well's premises forbidding trespassing and restricting certain areas of the premises to authorized personnel. Mr. Briggs stated *11 that the signs had successfully prevented accidents prior to Mr. Fromenthal's fall. Mr. Fromenthal admitted at trial that no one gave him permission to climb the ladder or to go aboard the M/V Able Queen. However, as noted above, Mr. Fromenthal testified that he did not notice the signs. Moreover, Mr. Briggs admitted that Mr. Fromenthal had been authorized to enter the premises to talk to Mr. Adolph and that he had on previous occasions been allowed to enter some of the restricted areas.
Concerning Delta Well's second claim, the evidence indicates that Delta Well's employees routinely tied off the ladder prior to climbing on it. Mr. Fromenthal stated at trial that some pieces of rope had been attached to the ladder; he described them as "a messed up tangled up piece of a rope, all wadded up." Mr. Fromenthal stated that he did not notice whether the ladder was tied up before climbing on it. He said that he assumed that the ladder was safe because he knew that Mr. Adolph was on the boat, and he thought that he had climbed up that ladder.
Concerning Delta Well's third claim, Delta Well theorizes that the only reasonable explanation for the accident is found in its theory that Mr. Fromenthal placed too much weight on the portion of the ladder sticking up above the ship railing. When Mr. Fromenthal "overloaded" the top of the ladder, the ship railing functioned like a fulcrum, which in turn caused the bottom of the ladder to slide away from the boat and fall on the concrete dock. However, Mr. Fromenthal testified at trial that he climbed the ladder in exactly the same way as Delta Well's employees were climbing in pictures introduced at trial. Moreover, Delta Well's theory concerning the only reasonable explanation for the accident is pure speculation, not supported by record evidence.
Concerning Delta Well's fourth claim, Delta Well's port captain, Tom Danley, testified that he had conversed with Mr. Adolph from the safety of the dock on several occasions on the day of the accident. Moreover, when asked a direct question at trial, Mr. Fromenthal admitted that nothing prevented him from calling to Mr. Adolph from the dock. However, Mr. Fromenthal asserted, Mr. Adolph might not have heard him.
The factors to be considered by appellate courts to determine the allocation of fault to a plaintiff were established as follows in Watson v. State Farm Fire & Casualty Insurance Co., 469 So.2d 967 (La.1985):
(1) whether the conduct resulted from inadvertence or involved an awareness of the danger, (2) how great a risk was created by the conduct, (3) the significance of what was sought by the conduct, (4) the capacities of the actor, whether superior or inferior, and (5) any extenuating circumstances which might require the actor to proceed in haste, without proper thought. And, of course, as evidenced by concepts such as last clear chance, the relationship between the fault/negligent conduct and the harm to the plaintiff are considerations in determining the relative fault of the parties.
Applying the Watson factors to Mr. Fromenthal's actions in the instant case, we find that Mr. Fromenthal should be assigned 50 percent of the liability for causing his own accident and injury. First, it appears that Mr. Fromenthal's conduct was inadvertent, and did not involve an awareness of the danger. Second, his conduct created a great risk of danger since he was unfamiliar with the ladder he chose to climb on without investigating whether it was secure. Third, the consideration for Mr. Fromenthal's decision to climb the ladder was to seek contract work for his employer, which is a fairly significant consideration. Fourth, Mr. Fromenthal's capacity for making the ladder safe was inferior to Delta Well's capacity; however, his capacity for avoiding the danger presented by the ladder was superior to Delta Well's capacity. Fifth, the record indicates no *12 circumstances that required Mr. Fromenthal to proceed in haste, without proper thought or concern for his safety.
Accordingly, we apportion the fault for Mr. Fromenthal's accident 50 percent to Mr. Fromenthal and 50 percent to Delta Well.
IV. DAMAGES
Like the liability issue, the damages suffered by the Fromenthals must be determined by this court on the record before us. In Jones v. Hyatt Corp., 94-2194 (La. App. 4 Cir. 7/26/95), 681 So.2d 381, this court performed a de novo review of damages in a case involving an improper jury instruction, stating as follows: "we cannot say that the erroneous jury charge did not prejudice the amount of damages awarded by the jury." Id. at 7, 681 So.2d at 393. In the instant case, we are presented with an even stronger reason for performing a de novo review of the damages because the amount of the damages awarded by the jury, viewed in light of the record evidence, clearly reveals the prejudice to the jury caused by the trial court's legal and procedural errors. Accordingly, as in Jones, we vacate the trial court award on damages and assess the damages based on the record before us.
A. General damages
Because general damages do not have a common denominator, courts are to award them on a case by case basis. Williams v. Golden, 95-2712, p. 20 (La. App. 4 Cir. 7/23/97), 699 So.2d 102, 113, writ denied, 97-2788 (La.1/30/98), 709 So.2d 708. General damage awards are designed to compensate an injured plaintiff for the following factors: physical and mental pain and suffering, inconvenience, loss of intellectual gratification or physical enjoyment, and other factors that affect a victim's life. Id. The severity and duration are to be considered by courts assessing quantum for pain and suffering. Id.
In the instant case, Mr. Fromenthal, who was 55 years old at the time of the accident, testified that he was experiencing pain at the time he was pulled out of the bayou by Delta Well's employees immediately after the accident. Although he allowed the Delta Well's employees to take care of some of his minor injuries, he did not allow them to look at his hip. Instead, he returned to his company truck and drove from Delta Well's premises in Plaquemines Parish to Eckstein Marine's office in Jefferson Parish. Once he reached his office, his son, Steve, who was also an employee of Eckstein Marine, and some other mechanics helped him move from the company truck to his personal truck. From Eckstein Marine, Mr. Fromenthal passed by his house to pick up his wife, then went straight to the emergency room at East Jefferson General Hospital, by which time the pain was so severe that several people were required to get him out of the truck.
Once in the emergency room, x-rays taken revealed that Mr. Fromenthal had suffered a subcapital fracture of the right hip. He was examined by Dr. Gordon P. Nutik, who diagnosed a small cut on his right elbow, a small abrasion on the outside of his right ankle, hip pain, and slight external rotation of the right hip. Dr. Nutik testified at trial by video deposition that Mr. Fromenthal's hip fracture was apparent, and that the x-rays revealed a displacement of the fracture, indicated by a loss of position and some possible rotational changes. His major concern after examining Mr. Fromenthal and reviewing the x-ray was maintaining the bone in a way that would give Mr. Fromenthal the longest service from the joint. Other concerns arose from the possibility that the hip joint might develop arthritis and from the fact that Mr. Fromenthal was a diabetic, meaning he had a higher than average chance of infection. Dr. Nutik discussed several treatment options with the Fromenthals, warning him that he might be required to perform a hip-joint replacement during surgery to repair the hip fracture.
*13 Mr. Fromenthal underwent surgery the morning after the accident. Although a hip-joint replacement was not necessary, the surgery did require the placement of five canulated screws. Moreover, Dr. Nutik advised the Fromenthals after the surgery that a hip-joint replacement might still prove necessary within two years of the original surgery because of the possibility that Mr. Fromenthal might develop arthritis or infection at the site of the fracture. After one week in the hospital, Mr. Fromenthal was released, with instructions that he walk only with the aid of a walker.
Over a period of about four months after the accident and injury, Mr. Fromenthal progressed from walking with the walker to a cane and finally to walking without assistance, but with a slight limp that he still possessed at the time of the trial in this case, some two and one-half years after the accident and injury. Mr. Fromenthal underwent months of physical therapy, but had problems with some of the exercises because of pain in his right hip. Mr. Fromenthal testified that over the first six-month period after the accident, he had to learn to do a lot of things, like getting out of bed, in a different way.
When he saw Dr. Nutik on August 31, 1995, Mr. Fromenthal complained for the first time of lower back pains, which Dr. Nutik eventually determined were caused by aggravation of a degenerative condition. Mr. Fromenthal also stated on August 31, 1995, that he experienced pain in his right hip while walking. Those complaints were still present on September 19, 1995. Dr. Nutik eventually determined that the leg pain was probably caused by polyneuropathy, perhaps associated with Mr. Fromenthal's diabetes.
Dr. Carl Kitziger, an orthopedic surgeon, examined Mr. Fromenthal twice. The last time he saw Mr. Fromenthal was February 7, 1997, two and one-half years after the accident and injury. At that time, Mr. Fromenthal complained of constant pain, difficulty walking, some numbness in his feet (possibly related to his diabetic neuropathy), and chronic low back pain. Dr. Kitziger testified that the low back pain might be caused by the hip injury aggravating the pre-existing degenerative disc disease. Mr. Fromenthal had reached maximum medical improvement on February 7, 1997, Dr. Kitziger said.
Mr. Fromenthal stated that he has been unable to perform many activities he regularly performed around the house after the accident. He was unable to replace glass, cut grass, do plumbing or electrical work, or perform any other types of repairs around the house. One reason he cannot do a lot of those chores is his inability to climb a ladder. Because of his hip pain, he is unable to sleep, Mr. Fromenthal said. Because of his back pain, he is unable to drive, he said. Moreover, Mr. Fromenthal testified that his relationship with his wife has been a lot more strained since his injury because of his irritability.
Mrs. Fromenthal testified that her husband had always been a hard worker and that the family, which included five children, had always relied on him for support. Three of the Fromenthals' children and two grandchildren were living in their home at the time of the trial. Mrs. Fromenthal testified at length about the added burden of caring for Mr. Fromenthal during the first few months following his injury. She stated that a lot of things about their lives changed when her husband was injured. She confirmed Mr. Fromenthal's statements about the strained nature of their relationship, saying that things had been stressful for both of them and that Mr. Fromenthal is irritable and short-tempered with her and with their children and grandchildren. Moreover, Mrs. Fromenthal testified that she often sees her husband in pain. Mrs. Fromenthal stated that she and her husband depleted their savings, and that she was forced to return to work.
*14 Considering the above facts and circumstances, we award the Fromenthals $250,000 in general damages to compensate for Mr. Fromenthal's past, present, and future physical and mental pain and suffering.
B. Medical expenses
The parties stipulated that Mr. Fromenthal had incurred $28,680.53 in medical expenses related to his injury by the time of trial. Thus, he is hereby awarded that amount for past medical expenses.
Concerning future medical expenses, Dr. Kitziger recommended annual x-rays for three years, then semi-annual radiographs for ten years. We also recognize that Mr. Fromenthal will require medications to control his pain during the remaining years of his life. Thus, we award the Fromenthals $20,000 for future medical expenses.
C. Lost wages
Mr. Fromenthal suffered a heart attack in the summer of 1993, and underwent two bypass surgeries. At that time, he missed a couple of months of work; otherwise, he had worked all his adult life. Moreover, Steve Richoux, Mr. Fromenthal's supervisor at Eckstein Marine, testified that Mr. Fromenthal had returned to his pre-heart attack job prior to the injury at Delta Well.
Dr. Nutik testified that soon after the surgery, he was concerned that Mr. Fromenthal would never return to his pre-injury occupation as a diesel mechanic. Dr. Nutik ultimately determined that Mr. Fromenthal would be able to do only sedentary work in the future. Dr. Nutik stated in his deposition that Mr. Fromenthal had reached maximum medical improvement by February of 1996, and that he would never return to work as a diesel mechanic. Dr. Kitziger agreed that Mr. Fromenthal would never return to his pre-injury occupation, opining that he may be able to do sedentary or light-duty work.
Mr. Fromenthal stated at trial that he would be willing to go back to work anytime, if he could find a job. Moreover, he testified that he called every person on the lists given him by the vocational people. He also looked in the telephone book and want ads, and he called many other people seeking work and applying for jobs. However, he said, because of his injuries no one ever even called him for a job interview.
Mr. Fromenthal was evaluated by Robert Gisclair, a vocational rehabilitation counselor, who testified that Mr. Fromenthal was motivated to get back to work, and that he had cooperated on all the tests. Mr. Gisclair agreed with the medical experts that Mr. Fromenthal would never return to work as a diesel mechanic. Moreover, Mr. Gisclair stated that Mr. Fromenthal was not a good candidate for retraining because he had the following "vocational barriers": age, educational or functional level, and physical condition. Mr. Gisclair testified that Mr. Fromenthal's skill level was an asset; however, he said it would be difficult to transfer those skills. Also an asset was Mr. Fromenthal's employment access in the location where he lives. He described Mr. Fromenthal from a vocational point of view as follows: "an older individual who has less than a high school education who has some what I consider significant deficits." Moreover, he said the sedentary category to which Mr. Fromenthal is limited has the fewest amount of jobs of all categories, only 11 percent, and many of those jobs require higher educational skills than those possessed by Mr. Fromenthal.
Mr. Gisclair testified that the median national average of hourly wages for diesel mechanics is $13.30, for an average annual salary of $27,666. Wages actually run from a low of $12 per hour to a high of $17.50 per hour, he said. Thus, he said, Mr. Fromenthal could have conceivably earned as much as $35,000 per year in his work life. As a sedentary worker, Mr. Gisclair estimated that Mr. Fromenthal's *15 wages would be restricted to the $5 to $6 per hour range.
Dr. Ken Boudreaux testified as an expert in the field of forensic economics. He testified that Mr. Fromenthal was earning $518 per week at the time of the injury, and that his average salary for the years 1991 through 1994 was $24,000 to $26,000. On the basis of those figures, he estimated Mr. Fromenthal's lost wages between the accident and the trial as $63,408.66.
Concerning Mr. Fromenthal's future lost wages, Dr. Boudreaux testified that Mr. Fromenthal's work life expectancy was 6.1 years on the date of trial. In order to average $26,000 per year, Mr. Fromenthal would have to receive $142,407 to be invested in safe investments. In order to make allowances for raises, Mr. Fromenthal would have to receive between $137,000 and $148,000, depending on interest rates and rate of wage increase; that number includes no fringe benefits. Assuming that Mr. Fromenthal could earn minimum wages of $10,700 per year, Dr. Boudreaux estimated his future lost wages at $84,635. When he assumed that Mr. Fromenthal could have gotten a job on the "top end" for diesel mechanics, earning $35,000 per year, Dr. Boudreaux estimated his lost future wages at $190,4000, or $132,000 if he gets a job at minimum wage. Considering the above facts and circumstances, we award the Fromenthals $84,635 for Mr. Fromenthal's lost future wages, in addition to past lost wages of $63,408.66
V. CONCLUSION
Following our de novo review of the record in this case, we find that Delta Well is liable for Mr. Fromenthal's accident and injury. Moreover, we assign 50 percent comparative liability for the accident to Mr. Fromenthal. Finally, we award the following damages to the Fromenthals:
General Damages $ 250,000.00
Past Medical expenses 26,680.53
Future Medical expenses 20,000.00
Past Lost Wages 63,408.66
Future Lost Wages 84,635.00
------------
TOTAL $ 444,724.19
Accordingly, we enter judgment in favor of the Fromenthals and against Delta Well for 50 percent of the damages, or $ 222,362.09.
VACATED AND RENDERED.
BYRNES, J., DISSENTS WITH REASONS.
BYRNES, J., Dissenting with Reasons.
I respectfully dissent. The decision to admit or exclude the testimony of an expert witness is within the discretion of the trial judge. The decision to exclude the testimony of Commander Cole is reversible only for an abuse of that discretion. The record does not support a finding of such abuse. The substance of Commander Cole's profered testimony was simply that the ladder should have been secure according to OSHA regulations (incorporating A.N.S.I.standards). Commander Cole, who is also a lawyer, opined as to the applicability of OSHA standards to vessels. The applicability of OSHA regulations to vessels is a matter of law, a matter not to be determined by the testimony of Commander Cole. The OSHA regulations should speak for themselves. Regardless, the use of the ladder is a matter requiring no scientific or technical knowledge. The jurors' common sense and knowledge of the world is sufficient. Moreover the trial judge gave the following jury charge which conveyed in authoritative form all that would have been conveyed by the profered testimony of Commander Cole:
The American National Safety Institute Standard and the Code of Federal Regulations provide that the base section of a portable ladder must be placed with a secure footing. The Code of Federal Regulations also provides that in a ship requiring facility, ... portable ladders should be latched, blocked or otherwise secured to prevent their being displaced.
The decision of the majority to do a de novo review is based on "the cumulation of trial judge errors in evidentiary rulings, coupled with other improper circumstances *16 occurring at trial" citing Dixon v. Winn-Dixie Louisiana, Inc., 93-1627, p. 3 (La. App. 4 Cir. 5/17/94); 638 So.2d 306, 312. The "cumulation of trial judge errors in evidentiary rulings" relied on by the majority consists of only the exclusion of Commander Cole's testimony and the allowance by the trial court of references to plaintiffs workers' compensation claim, in violation of La. C.C. art 414.
As the exclusion of Commander Cole's testimony was not an abuse of the trial judge's discretion, there is no "cumulation" of reasons in support of the majority's decision to do a de novo review. There remains only the allowance of references to plaintiffs worker's compensation claim. And to the extent that the reference to plaintiffs worker's compensation claim was error, such error was rendered harmless by the curative jury instruction of the trial court.[1]Longman v. Allstate Ins. Co., 93-0352 (La.App. 4 Cir. 3/29/94); 635 So.2d 343
Therefore, a de novo review by this Court is not warranted.
As to damages, especially general damages, this Court should be particularly cautious in second guessing the great and vast discretion of the jury. Youn v. Maritime Overseas Corp., 623 So.2d 1257 (La.1993), cert. den. 510 U.S. 1114, 114 S.Ct. 1059, 127 L.Ed.2d 379 (1994). I share the view of the majority that the jury award was low, and were this a Court of first instance or a de novo review I would be inclined to join with the majority on the question of damages. However, as this is not a Court of first instance and a de novo review is not called for, I cannot say that the jury decision on damages is without reasonable support in the record as a whole or that it is so low as to shock the conscience or offend right reason. Taylor v. Tulane Medical Center, 98-1967 (La.App. 4 Cir. 11/24/99); 751 So.2d 949, 965. As this Court declared recently in Comeaux v. C.F. Bean, 99-CA-0924, p. 11 (La.App. 4 Cir. 12/15/99); 750 So.2d 291, 298-299:
The awards are not obviously the result of passion or prejudice and they bear a reasonable relationship to the elements of the proved damages. Many rational triers of fact could have decided that a [higher] award is more appropriate, but [one] cannot conclude from the entirety of the evidence ... that a rational trier of fact could not have fixed the awards of general damages at the level set by the trial judge or that this is one of those "exceptional cases where such awards are so gross as to be contrary to right reason."
Accordingly, I would affirm the judgment of the trial court.
ON APPLICATION FOR REHEARING
We grant rehearing for the limited purpose of addressing Mrs. Carol Jean Fromenthal's loss of consortium damages, interest, and costs.
The trial court originally granted Mrs. Fromenthal $12,000 for her loss of consortium damages resulting from Mr. Fromenthal's injuries. On appeal, we vacated the trial court judgment in its entirety and performed a de novo review. Although we addressed Mrs. Fromenthal's loss of consortium in our decision, we failed to make an award. Our original decision stated as follows:
Mrs. Fromenthal testified at length about the added burden of caring for Mr. Fromenthal during the first few months following his injury. She stated that a lot of things about their lives changed when her husband was injured. She confirmed Mr. Fromenthal's statements *17 about the strained nature of their relationship, saying that things had been stressful for both of them and that Mr. Fromenthal is irritable and short-tempered with her and with their children and grandchildren. Moreover, Mrs. Fromenthal testified that she often sees her husband in pain. Mrs. Fromenthal stated that she and her husband depleted their savings, and that she was forced to return to work.
We agree with the trial court that Mrs. Fromenthal is entitled to $12,000 in loss of consortium damages, to be reduced by Mr. Fromenthals comparative negligence to $6,000.
Moreover, the Fromenthals are entitled to judicial interest on the judgment from the date of judicial demand, as authorized by La. C.C.P. art 1921 and LSA-R.S. 13:1403. Finally, the costs of this appeal are to be split between the parties in the percentage of their liability, with the Fromenthals responsible for 50 percent of the costs and Delta Wells responsible for 50 percent.
REHEARING GRANTED; JUDGMENT AMENDED.
BYRNES, J., would deny rehearing.
NOTES
[1] The trail court gave the following jury instruction:
The law does not permit you to consider any payments to or on behalf of Mr. Fromenthal by any other source. Specifically if you decide to make an award of damages you are not to make any deductions from that amount for any workers compensation benefits that have been paid to or on behalf of Mr. Fromenthal. [Emphasis added.] | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2614727/ | 604 P.2d 25 (1979)
Fidel A. PEREA, Petitioner,
v.
The DISTRICT COURT In and For the SIXTH JUDICIAL DISTRICT, and Oakley Wade, one of the Judges thereof, Respondents.
No. 79SA487.
Supreme Court of Colorado, En Banc.
December 17, 1979.
Rehearing Denied December 24, 1979.
J. Gregory Walta, Colorado State Public Defender, Harvey Palefsky, Deputy State Public Defender, Denver, for petitioner.
Craig S. Westberg, Dist. Atty., Sixth Judicial Dist., Durango, for respondents.
ERICKSON, Justice.
Fidel A. Perea petitioned for a writ of mandamus to compel the district court to grant him credit for 101 days presentence confinement time. We issued a rule to show cause and now discharge that rule.
Perea was arrested and charged with first and second-degree assault. Sections 18-3-202, 203, C.R.S.1973 (now in 1978 Repl. Vol. 8). Because he was indigent and unable to make bail, Perea was incarcerated for a period of 101 days prior to the imposition of a jail sentence. At trial Perea was convicted of the lesser included offense of reckless endangerment. Section 18-3-208, C.R.S.1973 (now in 1978 Repl. Vol. 8). The crime of reckless endangerment provides for a maximum period of incarceration of six months and does not permit the imposition of the longer jail sentences set forth in the assault statutes. Section 18-1-106, C.R.S.1973 (now in 1978 Repl. Vol. 8).
When Perea was sentenced, he requested that he be given credit for 101 days of *26 presentence confinement. The trial judge refused the request on the ground that granting credit for presentence confinement was within his discretion and was not a matter of right. Section 16-11-306, C.R. S.1973 (now in 1978 Repl. Vol. 8). The maximum sentence of six months was imposed on Perea with no credit for presentence confinement.
In People v. Martinez, 192 Colo. 388, 559 P.2d 228 (1977). We recognized that there is no constitutional right to credit for presentence confinement. See People v. Johnson, 185 Colo. 285, 523 P.2d 1403 (1974); People v. Nelson, 182 Colo. 1, 510 P.2d 441 (1973); People v. Coy, 181 Colo. 393, 509 P.2d 1239 (1973); People v. Scott, 176 Colo. 86, 489 P.2d 198 (1971); People v. Jones, 176 Colo. 61, 489 P.2d 596 (1971). In the absence of statutory authority to the contrary, the trial judge is not required to grant credit for presentence incarceration.
Section 16-11-306(3), C.R.S.1973 (1978 Supp.) provides:
"If the maximum sentence imposed is longer than the statutory maximum for the offense less the amount of allowable presentence confinement, it shall be presumed that the judge did not consider the presentence confinement."
That statute requires an initial presumption that the judge did not consider the period of presentence confinement where the total period of confinement exceeds the statutory maximum.[1] Here the record shows that the trial judge recognized the presentence confinement and determined that credit should not be given. His recognition, as shown in the record, clearly rebuts the statutory presumption.
Accordingly, the rule is discharged.
DUBOFSKY, J., dissents.
DUBOFSKY, Justice, dissenting:
I respectfully dissent.
Credit for presentence confinement in the circumstances of this case is a matter of constitutional right, and the defendant's request for credit should have been granted by the trial court.
When, as here, a defendant is incarcerated before sentence because he cannot afford bail and, subsequently, he receives a maximum sentence without credit for his presentence confinement, he is serving a sentence which a richer person would not serve. This violates the basic principle enunciated in Williams v. Illinois, 399 U.S. 235, 90 S.Ct. 2018, 26 L.Ed.2d 586 (1970). There, the United States Supreme Court held that a class of people could not be subject to a conviction beyond the statutory maximum solely on the basis of indigency. See also Tate v. Short, 401 U.S. 395, 91 S.Ct. 668, 28 L.Ed.2d 130 (1971).
The basic premise of these cases is that the burden of incarceration falls disproportionately upon the indigent, violating equal protection. Anglin v. State, 90 Nev. 287, 525 P.2d 34 (1974); In re Young, 32 Cal. App.3d 68, 107 Cal.Rptr. 915 (1973); Ham v. North Carolina, 471 F.2d 406 (4th Cir. 1973); King v. Wyrick, 516 F.2d 321 (8th Cir. 1975); Johnson v. Prast, 548 F.2d 699 (7th Cir. 1977). To prevent disproportionate sentences served by indigents, credit for time served should be given in all cases where there is presentence incarceration for failure to make bond. King v. Wyrick, supra; Johnson v. Prast, supra.
Therefore, I would make the rule absolute and remand the case to the district court to grant credit for presentence confinement.
NOTES
[1] The general assembly has recently amended section 16-11-306, C.R.S.1973 to provide credit for presentence confinement:
"Credit for presentence confinement. A person who is confined prior to the imposition of sentence is entitled to credit against the term of his sentence for the entire period of such confinement. At the time of sentencing, the court shall make a finding of the amount of presentence confinement to which the offender is entitled and shall include such finding in the mittimus. Such period of confinement shall be deducted from the sentence by the department of corrections."
Colo. Session Laws 1979, Ch. 157, 16-11-306 at 665. That section, however, does not apply to offenses committed prior to July 1, 1979, and is not applicable in this case. | 01-03-2023 | 10-30-2013 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.