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https://www.courtlistener.com/api/rest/v3/opinions/1448215/ | 918 F. Supp. 168 (1995)
ALLSTATE INSURANCE COMPANY, Plaintiff
v.
Rudy LEWIS, Administrator of the Estate of Alvin B. Johnson, Deceased, Intervenor.
Rudy LEWIS, Administrator of the Estate of Alvin B. Johnson, Deceased, Plaintiff
v.
Leon BLACKMON, Defendant
and
Allstate Insurance Company, Garnishee Defendant.
Civil A. Nos. 3:93-cv-700WS, 3:94-cv-282WS.
United States District Court, S.D. Mississippi, Jackson Division.
March 30, 1995.
Wilburn Hyche, Rainer & Hyche, Brandon, MS, for Allstate Insurance.
Ross Robert Barnett, Jr., J. Tayloe Simmons, Jr., Barnett Law Firm, Jackson, MS, for Leon Blackmon.
Paul D. Snow, Law Offices of Paul Snow, Jackson, MS, for Rudy Lewis.
MEMORANDUM OPINION AND ORDER
WINGATE, District Judge.
Before the court are the motions of the various parties for summary judgment pursuant *169 to Rule 56,[1] Federal Rules of Civil Procedure. These two consolidated civil actions both spring from the same episode, namely Alvin B. Johnson's unfortunate death, caused by a bullet fired from a gun held by Leon Blackmon ("Blackmon"), the insured of Allstate Insurance Company ("Allstate"). In civil action number 3:93-cv-700WS, plaintiff Allstate seeks a declaratory judgment under Rule 57[2] of the Federal Rules of Civil Procedure exonerating it from any obligation to pay to the estate of Alvin Johnson ("Johnson") any of the proceeds of Allstate's policy of insurance issued to Blackmon. In civil action number 3:94-cv-282WS, Rudy Lewis, the administratrix of the estate of Johnson, filed a wrongful death action against Blackmon in the Circuit Court of the First Judicial District of Hinds County, Mississippi, after Blackmon pleaded guilty to voluntary manslaughter. Under a reservation of rights, Allstate provided a defense for Blackmon. On May 2, 1994, the state court entered a $100,000.00 judgment in favor of Lewis. The following day, Lewis filed her Suggestion for Writ of Garnishment action against Allstate in state court. Thereafter, Lewis was allowed to intervene in Civil Action No. 3:93-cv-700WS. Subsequently, Allstate removed the state garnishment action from state court to this court where it has been consolidated with Civil Action No. 3:93-cv-700WS. Allstate argues here that under the undisputed facts it is entitled to a grant of summary judgment in its favor. Included among the provisions of Allstate's policy of insurance with Blackmon is a Criminal Act Exclusion which purports to exclude from coverage any criminal acts committed by an insured which result in bodily injury to another. Allstate contends that this exclusion is clear, valid and precludes any recovery by the estate of Johnson against the Allstate policy since Blackmon, Allstate's insured, pleaded guilty to a criminal indictment for manslaughter in the death of Johnson. Rudy Lewis on behalf of the Johnson estate opposes Allstate's motion and has filed a cross-motion for summary judgment. This court, however, agrees with Allstate for the reasons which follow.
This court has jurisdiction of this lawsuit pursuant to diversity of citizenship, 28 U.S.C. § 1332,[3] all parties being diverse to each other.[4] Since this court's jurisdictional base is founded upon diversity of citizenship, this court is obligated to follow the substantive law of Mississippi, which is the situs of the events shaping this dispute. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). Thus, when the substantive law of Mississippi is clear, this court pursuant to Erie is required to apply it. On the other hand, when an issue of substantive law is not clear, or has not been addressed, this court must make an educated guess how *170 the Mississippi courts would rule on the issue. Over the years, the situation has been termed the "Erie-guess." All parties agree that this issue is one of first impression for Mississippi and that this federal court must resort to an "Erie-guess."
The procedural trail this court must follow in considering the Rule 56 motion is not a new one; rather, the procedural character of Rule 56 is well known. Rule 56(e) provides that "[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered." See also Celotex Corporation v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986) (holding that in response to a motion for summary judgment, the non-moving party must make a showing sufficient to establish an element essential to its case).
The key facts of this lawsuit are undisputed. On Christmas night 1992, Leon Blackmon discharged a firearm killing Alvin B. Johnson. A Hinds County, Mississippi, Grand Jury indicted Leon Blackmon for manslaughter under Miss.Code Ann. § 97-3-35 (1972 as amended).[5] On October 11, 1993, Leon Blackmon pleaded guilty to the charge of manslaughter. At the time of the shooting, Leon Blackmon had in force and effect a policy of homeowner's insurance with Allstate Insurance Company, which policy included the following exclusion:
Losses we do not cover:
We do not cover bodily injury or property damage resulting from:
a) A criminal act or omission; or
b) An act or omission which is criminal in nature and committed by an insured person who lacked the mental capacity to appreciate the criminal nature or wrongfulness of the act or omission or to conform his or her conduct to the requirements of the law or to form the necessary intent under the law.
This exclusion applies regardless of whether the insured person is actually charged with, or convicted of, a crime.
If the above exclusion is valid, this court's task is simply to determine (1) whether a criminal act was committed by an insured, and (2) whether bodily injury to someone resulted therefrom. Unquestionably, Blackmon's act of discharging the firearm was criminal. Blackmon pleaded guilty to a manslaughter indictment in the case of State of Mississippi v. Leon Blackmon, Cause No. 93-1-417CRH, Circuit Court of the First Judicial District of Hinds County, Mississippi. That conviction is still valid, still of record. While the attorney for the Johnson estate argues that the facts of the shooting would show that Blackmon's trigger finger was accidentally nudged during a struggle with two other individuals, and that a jury should decide whether Blackmon's act was criminal, the fact remains that he has been convicted. That still-viable conviction is an adjudicated fact here which a civil jury would be obliged to respect. "[A] plea of guilty to a criminal charge of conduct material in the present case comes in against the party as an admission." Dunham v. Pannell, 263 F.2d 725, 728 n. 3 (5th Cir.1959).
So, if Allstate's Criminal Act Exclusion be valid under Mississippi law and is to be applied literally, this court's holding is certainly predictable: Blackmon admitted he killed Johnson; the act was criminal; Blackmon was insured under an Allstate policy of insurance which contained a criminal act exclusion; the Johnson estate, thus, cannot recover against the policy.
The question now is to determine whether under Mississippi law, this Criminal Act Exclusion is valid, or whether it offends public policy and should be construed other than literally. As this court stated earlier in this opinion, this question appears to be an issue *171 of first impression in Mississippi, and this court must resort to an "Erie-guess."
First, this court finds that the Criminal Act Exclusion at issue is clear and unambiguous. The exclusion denies coverage for bodily injury or property damage resulting from the criminal act or omission of an insured. The policy further provides that "This exclusion applies regardless of whether the insured person is actually charged with, or convicted of, a crime." Clearly, the exclusion purports to exclude all coverage in these circumstances, no matter the character of the criminal act, no matter whether a formal conviction has been had, so long as there exists the proper nexus between the crime and the onset of injury.
It is a general rule of law in Mississippi that when an insurance contract is plain and unambiguous, it cannot be rewritten by the court. Davenport v. St. Paul Fire and Marine Ins. Co., 978 F.2d 927 (5th Cir.1992), and see Aero Intern. v. United States Fire Ins. Co., 713 F.2d 1106 (5th Cir.1983). Furthermore, without an affirmative expression of an overriding public policy by the Mississippi courts or legislature, this court is constrained to enforce the agreement according to its plain meaning. Id. Aero Intern., at 1109. In Foreman v. Continental Cas. Co., 770 F.2d 487 (5th Cir.1985), the Court stated that "no rule of construction requires or permits the court to make a contract differing from that made by the parties themselves, or to enlarge an insurance company's obligation where the provisions of the policy are clear. Under Mississippi law, `... insurance contracts, like all other contracts, where clear and unambiguous, must be construed exactly as written.'" Id. at 489.
To escape the thrust of an "as-written" construction premised on lack of ambiguity, the Johnson estate relies upon holdings in Tower Ins. Co. v. Judge, 840 F. Supp. 679 (D.Minn.1993), where the court addressed similar criminal exclusion act provisions and held them to be against public policy and in need of judicial modification to conform to the reasonable expectation of the insureds. In Tower, the heirs of Christopher M. Meyer brought a wrongful death suit against Richard B. Balster, John B. Judge, Jacen J. Axelrod, and Chad A. Mann following the electrocution death of their son. Meyer was electrocuted when Balster, Judge, Axelrod, and Mann attempted to awaken him by jolting him with electrical currents. Criminal charges were brought against Judge, Balster, and Mann, all of whom pleaded no contest to second degree reckless homicide, endangering safety by use of a dangerous weapon, and battery. After the criminal action culminated, Meyer's estate brought suit against Balster and Judge. Balster and Judge, both of whose parents had homeowners' insurance, tendered the defense of the wrongful death action to their respective insurance companies. 840 F.Supp. at 683.
The insurance companies undertook to defend Balster and Judge in the wrongful death action under a reservation of rights. Both insurance companies filed declaratory judgments seeking declarations that their policies excluded coverage for Meyer's death. Id. at 685. The Balsters were insured by Secura Insurance Company ("Secura"). The Balsters' original policy with Secura specifically excluded "bodily injury ... which is expected or intended by the insured." After issuing a policy with that exclusion to the Balsters, Secura amended its policy to provide an exclusion for bodily injury that "... (3) results from the criminal acts of an insured."
The Minnesota Court refused to apply the exclusion and concluded that in that case the "denial of coverage would conflict with the reasonable expectations of the insureds." Id. at 693. The Court also stated that public policy favored a narrow construction of the criminal act exclusion. Id. "This Court is convinced that it would be bad policy to find that the exclusion applies in this case just because the state of Wisconsin decided to pursue criminal charges." Id.
In footnote 7, the Court also noted that the criminal act exclusion was added to the Balsters' insurance policy by way of amendment. The Court stated:
In Minnesota, when an insurer reduces coverage, the insurer has a duty to point out the reduction in coverage to the insured and offer to explain to the insured the significance of the changes. An insurer *172 should not be able to take advantage of hidden and unexplained gaps in coverage created by amendment to the policy. If the insurer does not adequately fulfill its duty of disclosure, any question of coverage shall be determined in accordance with the terms of the original policy prior to the amendment. In this case, there is no evidence that Secura made any effort to explain, much less point out, to the Balsters the reduction in their coverage. (citations omitted)
Id. at 693.
The plaintiff also cited Allstate Ins. Co. v. Zuk, 78 N.Y.2d 41, 571 N.Y.S.2d 429, 574 N.E.2d 1035 (1991), Country Mutual Ins. Co. v. Duncan, 794 F.2d 1211 (7th Cir.1986), and Green v. Allstate Ins. Co., 177 A.D.2d 871, 576 N.Y.S.2d 639 (3 Dept.1991), for similar instances where courts have construed provisions in insurance policies for the benefit of the insured.
This court, taking an Erie -guess, holds that the public policy holdings in Tower would not, in this circumstance, enjoy the same vitality and vigor under Mississippi law. This court recognizes that there are circumstances where public policy considerations have moved Mississippi courts to set aside or rewrite clauses in insurance policies. See Brown v. Blue Cross Blue Shield Miss., 427 So. 2d 139 (Miss.1983); Nationwide Mut. Ins. Co. v. Garriga, 636 So. 2d 658 (Miss.1994); and In re Koestler for Benefit of Koestler, 608 So. 2d 1258 (Miss.1992).
The Court in Brown determined that although the insurance contract was a group policy made between the employer and the insurer and was cancelled pursuant to an agreement between those two, that did not relieve the insurer from all obligations to the employees insured under the policy who relied on the policy then in full force and effect and expected hospital and medical benefits thereunder, and who were, as a result of said reliance, denied any opportunity to obtain insurance elsewhere. It should be noted that in Brown, while the employer purchased the group policy, the policy was purchased specifically for its employees, including Jerry Brown and his dependent wife, Linda L. Brown. The distinctions between Brown and the case at bar are numerable; however, the most important is that Brown involved questions pertaining to the first party coverage. The deceased in the case at bar had no reasonable expectation of coverage under the terms of the policy. The policy at issue was purchased by Blackmon. The premium charged was based on the risk involved which was based on the exclusions set forth therein. Insurance policies are privately made contracts and except as limited by public law, Mississippi courts respect the right of the insurer and the insured to contract freely with one another. Nationwide Mut. Ins. Co. v. Garriga, 636 So. 2d 658 (Miss.1994), and In re Koestler for Benefit of Koestler, 608 So. 2d 1258 (Miss.1992). In Koestler and Nationwide, the issue was the effect of policy provisions applied against the uninsured motorists statute. In each case, the Court considered public policy arguments asserted in light of what the legislature had required. In our particular case, there is no legislative restriction on the terms and conditions of the criminal act exclusion in the homeowners' policy at issue. Hence, this court is not persuaded that these case authorities show that Mississippi is prepared to extend a public policy argument to the criminal act exclusion at issue, where the dispute is waged by a third party to the policy who had no reasonable expectation of coverage.
Rather, this court is convinced that in this instance, the Mississippi courts would follow the dictates of Allstate v. Norris, 795 F. Supp. 272 (S.D.Ind.1992), which appears to be the only reported case involving the exact same policy and clause at issue. The facts of Norris are as follows. In Norris, the insured was fired upon by an unidentified man. The gunshots erupted after the two engaged in an argument in front of the insured's home. The insured escaped injury by running into his home. When he re-emerged, the insured had his .30 caliber, semi-automatic rifle which was loaded with twenty rounds of ammunition. The insured began shooting in the direction of the unidentified man. The unidentified man was not hit, but two other people in a nearby house were struck.
The insured was subsequently arrested and charged with two counts of attempted *173 murder and, by amended information, a third count of felony criminal recklessness. Norris entered a plea of guilty to the charges and was sentenced to eight years in prison. Soon thereafter, one of the shooting victims, Jeana Duane, and her mother brought suit against the insured seeking damages for assault and battery, mental and emotional distress, and negligence. That lawsuit prompted Norris' homeowner's liability insurer, Allstate, to file an action seeking a declaration that it was not liable under Norris' homeowner's policy for any damages suffered by the shooting victim and her mother. The court observed that it was unable to find any cases which "have held that insurance policies as a matter of public policy cannot exclude coverage for injuries resulting from unintentional criminal acts." Id. at 276. The court in Norris then noted that in other jurisdictions such exclusions had been regularly upheld. The court also stated that it was unable to find any decision which invalidated, on public policy grounds, an exclusion for injuries caused by "less-than-intentional conduct." Id. Finding no public policy argument against the application of the criminal act exclusion, the court in Norris concluded that the policy must be enforced according to its terms.
The Mississippi Supreme Court has from time to time addressed the issue of public policy involving first party insurance coverage (i.e., uninsured motorist and hospitalization); however, it appears that there are no cases which have addressed a public policy argument regarding homeowners' liability coverage which is third-party liability coverage. In this case, the question is whether a stranger to the contract has a right to claim an extension of coverage beyond that which the parties to the agreement contemplated both by the express language of the policy and the premium charged. To hold that the criminal act exclusion as set forth in the policy means, by public policy or otherwise, something other than its literal interpretation which clearly and unambiguously excludes coverage under these circumstances, would be to rewrite the contract in contravention of the agreement of the parties to the contract.
Accordingly, based on the foregoing findings and conclusions, this court finds that Allstate's motion for summary judgment is well taken and should be and is hereby granted, and Allstate is entitled to a declaratory judgment relieving it of any liability on the subject insurance policy. Contrariwise, this court finds that the cross-motion for summary judgment of Rudy Lewis, Administratrix of the Estate of Alvin B. Johnson, deceased, must be denied. A separate judgment will be entered in accordance with Rule 58 of the Federal Rules of Civil Procedure.
SO ORDERED AND ADJUDGED.
NOTES
[1] Rule 56(a) and (b) of the Federal Rules of Civil Procedure provides:
(a) For Claimant. A party seeking to recover upon a claim, counterclaim, cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party's favor upon all or any part thereof.
(b) For Defending Party. A party against whom a claim, counterclaim or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part thereof.
[2] Rule 57 of the Federal Rules of Civil Procedure provides:
The procedure for obtaining a declaratory judgment pursuant to Title 28, U.S.C., § 2201, shall be in accordance with these rules, and the right to trial by jury may be demanded under the circumstances and in the manner provided in Rules 38 and 39. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate....
[3] Title 28 U.S.C. § 1332 provides in pertinent part:
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $50,000, exclusive of interest and costs, and is between
(1) citizens of different States; ...
[4] The parties in the original action in this court were Allstate and Blackmon. Allstate is a corporation organized under the laws of the State of Illinois. Blackmon is an adult resident of Hinds County, Mississippi. The intervenor, Lewis, is an adult resident of Hinds County, Mississippi. Where jurisdiction of subject matter has once been acquired, federal courts have jurisdiction over intervenors and substituted parties. East v. Crowdus, 302 F.2d 645 (8th Cir.1962).
[5] Mississippi Code Annotated § 97-3-35 provides that "[t]he killing of a human being, without malice, in the heat of passion, but in a cruel or unusual manner, or by the use of a dangerous weapon, without authority of law, and not in necessary self-defense, shall be manslaughter." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2517006/ | 185 P.3d 571 (2008)
219 Or. App. 665
IN RE MARRIAGE OF NAYLOR.
No. A13066
Court of Appeals of Oregon.
May 7, 2008.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1727605/ | 290 S.W.2d 353 (1956)
PACIFIC INDEMNITY CO., Appellant,
v.
BOWLES & EDENS SUPPLY CO., Limited, et al., Appellees.
No. 15058.
Court of Civil Appeals of Texas, Dallas.
March 30, 1956.
Rehearing Denied April 27, 1956.
*355 Allen Wight and Touchstone & Bernays, Dallas, for appellants.
A. George Biggs, Alto B. Cervin, Sanders, Nolen, Dees & Stevenson, and Saner, Jack, Sallinger & Nichols, Dallas, for appellees.
YOUNG, Justice.
This suit was under Articles 5160-5164, V.A.C.S., against the surety Company on a performance bond given in connection with construction of a public swimming pool, for unpaid claims by way of labor performed and material furnished; brought by Bowles & Edens Supply Company, with Childers Concrete Company and Hawes Electric Service intervening. On trial to the court, judgment was for full amount of the respective claims (except as to Hawes Electric Service), plus attorney fees. Findings of fact and conclusions of law were filed at request of defendant; and this appeal followed the court's overruling of its motion for new trial.
The record reflects the following general facts: That on or about February 17, 1953, the City of Dallas entered into a contract with Texas Pool Corporation for the construction of a swimming pool in Martin Weiss Park, within municipal limits. Contemporaneously appellant Indemnity Company executed a performance bond whereby it became surety and bound to pay the unpaid claims of "all persons, firms and corporations, who may furnish material for * * * the buildings, structures, or improvements referred to in the `contract between the Texas Pool Corporation and the City of Dallas.'" The project was placed in operation on or about July 24, 1953; the Pool Corporation, however, not being able to pay all its debts inclusive of those owing to appellees, was thereafter adjudged a bankrupt with this suit resulting under Art. 5160 for recovery on the contractor's bond. Plaintiff and interveners are individuals doing business under trade names and will be referred to herein as Bowles & Edens, Hawes Electric Service, and Childers Concrete Company.
Article 5160, under which appellees filed their claims, provides for the right of laborers and materialmen to intervene in a suit on a performance bond, required by the same statute to be furnished by the contractor on a public works project. Arts. 5161 through 5164 are kindred statutes, with no questions raised as to them; Art. 5160, only, being involved in this appeal. It recites in part: "Provided further, that all claims for labor and material furnished to said contractor, and all claims for labor and material furnished to any contractor shall be itemized and sworn to as required by Statutes as to mechanic's lien claims, and such claims shall be filed with the County Clerk of the County, in which said work is being prosecuted, within ninety days from the date of the delivery of said material and the performance of said work." (Emphasis ours.) The mechanic's lien statutes referred to are 5453 through 5456; Art. 5453 providing in part that: "Within ninety days after such indebtedness accrues, each person, firm or corporation who furnished material to or performed labor for a contractor * * * shall give written notice to the owner * * * of each and every item furnished * * *, and shall file with the county clerk of the county in which such property is located * * * an itemized account of his or their claim * * *." (Emphasis ours.) Arts. 5455 and 5456 set out forms to be used. Thus for what is meant by itemization of claims under Art. 5160, we must look to the mechanic's lien statutes and interpretation accorded thereto by the courts; at the same time bearing in mind the distinction between Art. 5160 and Art. 5453 as to beginning of the ninety-day period of limitation. Under the former, it is the date of delivery of material and the performance of said work that is controlling; under the latter statute the period begins upon accrual of the debt.
Points of appeal may be summarized, viz.: The trial court's error (1) in rendering judgment for appellees, furnishers of labor and (or) material on a public job *356 against defendant surety on the contractor's bond, in that the claims as filed with the County Clerk were not properly itemized as required by Art. 5160, Texas Revised Statutes; (2) "in holding that the claims of appellees as filed were sufficient to disclose to interested parties how much, if any, of the material furnished or labor done was done or furnished within ninety days prior to the filing of the claim"; (3) in rendering judgment for Bowles & Edens and Childers Concrete Company, "in that the evidence showed clearly and conclusively that the major portion of the material furnished was furnished more than ninety days prior to the filing of the claim"; (4) in rendering judgment for Bowles & Edens, the evidence failing completely "to show that merchandise of the value of the judgment was delivered to the contractor in question within ninety days prior to the filing of the claim"; (5) in rendering any judgment in favor of Hawes Electric Service, "in that the evidence is wholly insufficient to show that any of the labor and material was furnished within ninety days prior to the filing of the claim and before July 22, 1953"; (6) in rendering judgment in favor of appellees for attorneys' fees. Appellees answer by counter-points, in effect, that their verified claims are in sufficient compliance with the statutes.
Facts relevant to these claims are as follows: (Bowles & Edens) On March 18, 1953, Texas Pool Corporation issued to them its purchase order for material consisting of several pumps, motors, and component parts, invoiced and arriving at job site on or about May 27, 1953. Two of the electric motors, valued at $607.42, were found not according to specifications, and turned back to the factory; balance of material permittedly left on the site, crated, until arrival of replacements on July 3, when all material was assembled and installed by July 20. About August 31, 1953, the Pool Corporation paid to Bowles & Edens $1,000 on account, leaving a balance of $1,242.50 which it was never able to pay. The affidavit of Bowles & Edens was filed for record on September 14, 1953, with the material listed as in purchase order; the only reference to date of delivery, however, appearing as follows: "Delivery and performance by us on 7-20-53." Compliance with statute required delivery of material on and after June 16, 1953, which date was within ninety days preceding September 14, 1953.
On or about June 1, 1953, Texas Pool Corporation issued its purchase order to Childers Concrete Company for pouring of concrete walks at Weiss Park pool, payment at $0.45 per square foot; entire job (labor and material) amounting to $3,111.78; they receiving on account by August 25 the sum of $2,800.60, leaving an unpaid balance of $311.18. On October 8, 1953, the Concrete Company filed its affidavit of claim, not setting out date or dates upon which labor was performed or material furnished; the claim reciting in such respect, "and the same remaining unpaid, became due and payable on July 13, 1953." With their affidavit filed on October 8, 1953, the ninety days preceding that date within which to perform labor and furnish material was on and after July 10, 1953.
Under date of April 22, 1953, the Pool Corporation issued its purchase order to Hawes Electric Service for material and labor in total amount of $2,669.06 for use in performance of the contract to build the pool. Attached to the affidavit of Mr. Duval for the Service Company, filed October 15, 1953, were eight listed groups of material furnished and labor performed as to each (a copy of the original estimate). No payments were made on this account by Texas Pool Corporation, with $2,669.06 as the total amount due on their claim as filed; and relative to dates of the various items, only the following statement is made at end of the list: "That all of the above labor and materials were furnished and delivered to the Texas Pool Corporation from on or about May 20, 1953, to on or about July 22, 1953." Bearing in mind aforesaid October 15th filing of the Hawes affidavit, the ninety-day period preceding that date within which to furnish the material *357 and perform labor was July 17, 1953 and thereafter.
Materialmen and laborers seeking to recover under the provisions of Art. 5160 must establish by sworn itemized account that the material was furnished and labor performed within the statutory period; and without the required showing they are not entitled to its benefits. Metropolitan Casualty Ins. Co. of New York v. Texas Sand & Gravel Co., Tex.Civ.App. 68 S.W.2d 551. The lien is a creature of the statute and persons entitled to the security afforded must comply strictly with its provisions. McClellan v. Haley, Tex. Com.App., 250 S.W. 413; Union Indemnity Co. v. Rockwell, Tex.Com.App., 57 S.W.2d 90. In this connection, the statutes, relevant to itemization, in terms of Art. 5160 (that the claim must be filed within 90 days from date of delivery of material and performance of work), have long since received consistent interpretation by Texas Courts. Attention is directed to several of these holdings.
In Ball v. Davis, 118 Tex. 534, 18 S.W.2d 1063, 1064, a leading case, the Supreme Court had this to say: "The sufficiency of the itemization must be determined, in view of the objects and purposes of the statute. The evident purpose of the statute here involved is to provide the owner of the property with such particulars as will enable him to ascertain whether or not the account is correct, and show the facts necessary to the establishment of a lien, not only for the benefit of the owner, but of third parties as well, who may be or might become interested or affected thereby. To accomplish these purposes the account must show the facts required by the statute to establish the lien. Unless the affidavit and account are sufficiently definite to show that labor has been performed, that a sum certain is due therefor, and the date when due, it is insufficient to accomplish the purpose of the statute to show and fix a lien." (Emphasis ours.) The opinion then follows with a statement from 18 Ruling Case Law, p. 926, viz.: "`Mechanics' liens being purely statutory, there is no intendment in their favor, and they must show upon their face all the statutory requisites to their validity. They are incipient or inchoate until completed or perfected by compliance with the statute, and are lost utterly if those acts required for their completion be not done in the manner and within the time required by statute. In many cases it is said that a strict compliance with the statute must be shown, but this doubtless means that all the statutory steps must be taken, and that the notice or statement of the lien shall contain all the averments required by the statute.'"
Further applicable and with especial reference to provisions of Art. 5160, it is held in Trinity Universal Ins. Co. v. Woitaske, Tex.Civ.App., 148 S.W.2d 235, 236, that: "Applying to the facts of this case the rule laid down by the cases cited above, we are of the opinion that the claim of Woitaske was not sufficiently itemized to meet the requirements of Article 5160. It was not itemized either as to the dates on which the material was delivered, or on which the labor was performed; nor was it itemized as to the various items or quantities of material actually delivered." Above requirements of itemization are the same today; see Houston Fire & Cas. Ins. Co. v. Col-Tex Refining Co., Tex.Civ.App., 231 S.W.2d 468, 470, where the Court, in holding the account properly itemized, stated: "All that is required of the itemization is that it show with reasonable certainty the character and amount of materials furnished, dates when, and places where furnished and the value of same."
Manifestly, the sworn claims of appellees are lacking in one or more of the particulars discussed in the foregoing cases, not showing upon their face "the facts required by the statute to establish the lien." Ball v. Davis, supra. For while, in each instance, the listing of material furnished is seen to be adequate, no itemized dates of delivery are seen, nor detail of labor done in amounts and dates of performance. Further discussion will be made of these claims separately.
*358 Bowles & Edens
Their first invoice of listed material sold is in amount of $1,973, the second of $269.50, a total of $2,242.50; with balance due in affidavit of $1,275.25. Under the testimony and stipulations, all material arrived at the job site on May 27, 1953, and except for the two motors, remained there until installeda time well beyond the 90 day period of limitation. "The plain language of the statute with reference to materials is that the claim must be filed within 30 days (now 90) `from the date of the delivery of said materials.' This must be held to be the actual physical delivery of the various items or consignments of material and not a technical legal delivery based on the provisions of the contract." (Emphasis ours.) Aetna Casualty & Surety Co. v. Hawn Lumber Co., 128 Tex. 296, 97 S.W.2d 460, 463.
But appellants contend that their material was designed for a specific job; that, under the testimony, the contractor simply permitted the crated parts to lie on the ground until rectification and return of motors, with no actual delivery of any items thereof until accepted and job completed on or about July 20. They say that "actual delivery" must be interpreted according to the law of sales; and that property "is delivered, consummating sale, whenever the seller has done everything necessary to be done to put property completely and unconditionally at the disposal of the buyer," citing Shearman v. Poe, Tex.Civ.App., 9 S.W.2d 762; Fox v. Young, Tex.Civ.App., 91 S.W.2d 857; 37 T.J. 361. They contend further that on basis of May 27 as date of delivery, they would then be in the "astounding position" of attempting to establish a lien when no debt existed. This Court sustained a like contention (made by Dallas Plumbing Company) in the Aetna-Hawn case, supra, but was reversed.[1]
We conclude appellees' theory of delivery according to the law of sales to be inapplicable. Under the construction already given to Art. 5160 by the courts, true date of delivery of this material must be regarded as controlling, even though use of a part thereof be conditioned upon later arrival of proper motors; in short, a delivery by installments. The following conclusion in National Surety Co. v. United Brick & Tile Co., Tex.Civ.App., 71 S.W.2d 937, 941, was approved by our Supreme Court in Aetna Casualty & Surety Co. v. Hawn Lumber Co., viz.: "We believe the requirement of article 5160 that verified itemized statement of materials furnished should be filed within ninety days after such materials have been delivered, even though such materials necessary to complete the work are to be delivered in installments, is mandatory and conclusive."
Childers Concrete Company
In first counter-point intervener attacks appellant's answer as insufficient, constituting neither a general nor special denial of liability. To the contrary such defensive pleading clearly appears to put in issue appellee's compliance with the statute.[2]
The Childers Concrete affidavit and Exhibit 1 attached, show no dates on which labor was performed or material furnished, merely closing with "The amount remaining unpaid became due and payable to affiant on July 13, 1953." The ninety-day *359 period of limitation began on July 10. Under the testimony, this concern poured the concrete contracted for between June 29 and July 8, 1953, engaging only in corrective work on July 9 and 10. The chart of labor performed (placed in evidence by intervener) runs from day to day, not detailing amount of labor done on the last day (July 10) which, at least, was lienable. It is intervener's theory that in this, an indivisible and lump sum contract, the ninety-day period began on completion of the jobobviously conformable to the statutes on mechanic's liens, but a wholly insufficient compliance with Art. 5160, as the courts have uniformly held. Needless to say, intervener's single authority of Republic Nat. Bank & Trust Co. v. Massachusetts Bonding & Ins. Co., 5 Cir., 68 F.2d 445 (an earlier case), is in conflict with Aetna Casualty & Surety Co. v. Hawn Lumber Co., supra; and under the law of this later case intervener's entire claim must fall.
Hawes Electric Service
Intervener's purchase order was for $2,669.06; the trial court finding that between the dates of July 18 and August 8, 1953, material and labor in the amount of $1,797.59 were supplied. The only reference to dates in the claim filed is in the statement "that all of the labor and materials were furnished and delivered to Texas Pool Corporation from on or about May 20, 1953 to July 22, 1953." The 90 day period of Art. 5160 would apply to all items supplied prior to July 17, 1953. Therefore if any part of this claim is secured, it must be for labor done and material furnished during the six-day period of July 17 through July 22, 1953; and items amounting to $1,797.59 were thus sought to be proven by the witnesses Duval and Williby. Their testimony as to hours and value of labor for this interval was only estimated, with a segregation of material furnished between such dates of approximately $1,036. But as observed by appellant, "it is not possible to cure an insufficient verified account on file by showing the itemization and dates of delivery by evidence adduced at a trial of the cause. All of the authorities already cited speak of the sufficiency of the filed verified accounts, and not of the sufficiency of evidence. If this were not true, it would be pointless to require anything in the affidavit." It is argued that no one interested could possibly have been misled by the affidavit in content; it detailing truthfully all items for which a lien is claimed. However, such is not the test. "`Mechanics' liens being purely statutory, there is no intendment in their favor, and they must show upon their face all the statutory requisites to their validity. They * * * are lost utterly if those acts required for their completion be not done in the manner and within the time required by statute.'" Ball v. Davis, supra. Bowles & Edens could have fixed a valid lien as regards the two motors delivered on July 3, had the account named these items, their value and date of delivery. So also of Childers Concrete, had the value of material furnished and labor performed between July 17 and 22, 1953, truly appeared in the claim as filed. This procedure was not followed, however, the parties choosing to list their entire amount of material and labor as furnished and performed on July 20 and July 13 respectively; a showing quite satisfactory under Art. 5453 on mechanics' liens, but amounting to an insufficient itemization under Art. 5160 as held in the cited cases.
From the record, these are honest accounts, with all items furnished to the contractor by appellees in good faith and at fair value. The statute has absolutely assured them of payment in full for their goods and services; in turn, only requiring a strict compliance with its provisions in the fixing of an involuntary lien.
Above conclusions render unnecessary any ruling on the trial court's allowance of attorneys' fees under Art. 2226, V.A.C.S.; that is, whether same are proper items of recovery in a cause of action based on Art. 5160.
Judgment of the trial court as to each appellee is reversed and judgment here rendered in favor of appellant Indemnity Company.
*360 On Rehearing.
Above rendition is without prejudice to the right of claimants herein of recourse upon the City of Dallas for any funds of the defunct Texas Pool Corporation actually retained by the city pursuant to Article 5472a, V.A.C.S. Otherwise, motions of appellees for rehearing are overruled.
NOTES
[1] See Aetna Casualty & Surety Co. v. Hawn Lumber Co., Tex.Civ.App., 62 S.W.2d 329, 332, 334, where, discussing Article 5160, we held (mistakenly, it appears) that: "It is not believed that the Legislature intended to require the doing of the useless work of filing of a verified statement for a claim that had not accrued, and the necessity for filing same might never exist."
[2] A paragraph of defendant's pleading so criticized reads: "For further answer herein, if need be, this defendant says that neither plaintiff nor such interveners, within the time required by the law, and particularly Art. 5160 of the Civil Statutes of this State, filed an itemized and sworn statement of their claim with the County Clerk of Dallas County." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1147952/ | 37 Cal. 2d 815 (1951)
HARRY E. CHAMPION, Appellant,
v.
FREDERICK A. BENNETTS et al., Respondents.
L. A. No. 22036.
Supreme Court of California. In Bank.
Oct. 19, 1951.
Sheppard, Mullin, Richter & Balthis, Gordon F. Hampton and E. Talbot Callister for Appellant.
Charles E. Beardsley, Bodkin, Breslin & Luddy, Henry G. Bodkin, Richard L. Oliver, Fred Girard, Hirson & Horn, Theodore A. Horn, Edward Feldman, Belli, Ashe & Pinney, Melvin M. Belli, Ryan & Ryan, Thomas C. Ryan, Mancuso, Herron & Winn, John W. Herron, J. F. Shirley, Vernon W. Humber and James F. Boccardo, as Amici Curiae on behalf of Appellant.
Reed & Kirtland and Henry E. Kappler for Respondents.
EDMONDS, J.
Dr. Frederick Bennetts, with Dr. Glen Gummess assisting him, performed a surgical operation upon Harry Champion at the California Lutheran Hospital. Charging that a rubber tube negligently was left in the incision with resulting injury which required the removal of the left testicle, Champion sued the hospital and the surgeons, claiming damages for the asserted malpractice. The appeal of Champion is from a judgment entered against him notwithstanding the verdict of a jury in his favor against Dr. Bennetts.
Champion alleges that he consulted Dr. Bennetts concerning severe pain in the scrotum. Dr. Bennetts diagnosed the ailment as varicocele, and advised an operation. In the course *817 of performing the operation, Dr. Bennetts "negligently and carelessly deposited and left a rubber tube within the scrotum of plaintiff, and negligently and carelessly closed said incision and sutured the same." Because of the tube, Champion suffered severe pain, hysteria, and a swelling and splitting of the scrotum both at the incision and otherwise. The complaint further states that the negligent enclosure of the tube caused an infection in the scrotum which required the removal of the left testicle, with consequent shortening of life expectancy and sterility. Damages are also sought for loss of earnings during Champion's incapacity.
By his answer, Dr. Bennetts admits that he operated upon Champion. He states that a rubber tube was placed in the scrotum, but he denies the other facts alleged in the complaint.
The record shows evidence tending to prove the following facts:
Dr. Bennetts diagnosed Champion's difficulty as varicose veins and he advised surgery for the removal of them. Dr. Bennetts said, "It is a simple operation, you will be confined from three to seven days, your total convalescence should not be over three weeks." Champion stated that he did not wish to lose his left testicle. Dr. Bennetts assured him that, "If the testicle is healthy there will be no occasion for that; you will have to leave that up to me, however."
The operation was performed by Dr. Bennetts, assisted by Dr. Gummess. Dr. Bennetts made a 4-inch incision in the left upper scrotum, dissected certain varicose veins and removed them. Following the operation, Dr. Bennetts told Champion's mother that the left testicle was "a little smaller than the other one but it appeared healthy and he did not take it out."
The notes of the nurse attending Champion show that on the following day he complained of considerable pain and the scrotum had begun to swell. The tape holding the operative dressings was severed to relieve the pressure.
On the next day, the swelling had increased to such an extent that it was necessary for an interne to remove the operative dressings, replacing them with a small pad or cloth over the scrotum. Champion testified that he could then see the scrotum "very plainly." He described it as swollen and discolored, and in a position of elevation over the abdomen. The operative incision was sewed tightly, he said; there was no drainage from the scrotum, and nothing protruded from it. *818
Administration of penicillin was then begun and dosages were continued for two days. Two witnesses who observed Champion during this time testified that they saw no wound other than the main operative incision with nothing protruding from the scrotum.
Six days after the operation, Dr. Bennetts told Champion that he had decided to probe the wound for the purpose of establishing drainage. When asked what the trouble was, the doctor stated that "nothing was wrong"; "it could be a thrombosis." He probed the incision by inserting surgical forceps, and ordered Champion to take sitz baths.
A witness testified that he assisted Champion in taking the recommended sitz baths. He told the jury that he then observed the entire scrotum. The opening which had been established through probing was on the left side of it and gave off an odor. As he described the operative area, there was only the one wound on the entire scrotum with nothing protruding from it.
After two weeks in the hospital Champion was taken to his home. He was instructed to continue taking sitz baths, use hot compresses, and to walk as much as possible. His mother helped him to take sitz baths and cleaned and dressed the operative incision. She saw no opening in the scrotum other than that established through probing, and did not observe anything protruding from it. Her description of the incision was substantiated by the testimony of a neighbor.
About a month after the operation, Champion was examined by Dr. Bennetts in the latter's office. When questioned about a red area at the top of the scrotum, the doctor stated that he thought an abscess was developing. He instructed Champion to apply hydrogen peroxide to the wound and to cleanse it with swab sticks. Two days later, while cleansing pus from the probe wound, Champion and his mother noticed, deep in the wound, the edge of a substance which resembled "a muscle." Upon touching this substance with the swab stick, about an inch of white rubber tube protruded.
On the following morning, the rubber tube stuck to a dressing and came out. Champion and his mother described it as being "very wet and full of pus." This was the first time either Champion or his mother knew that a rubber tube had been inserted in his scrotum. Champion immediately telephoned Dr. Bennetts who said: "That is fine. I left it for a drain. I am glad you found it." *819
On the following day, Dr. Bennetts examined Champion and stated, "That is the first time that ever happened to me." He then advised Champion that a further operation would be necessary; the left testicle would have to be removed. About a week later Dr. Bennetts again examined Champion and said, "This kind of thing hasn't happened to me before," and again urged an operation.
Dr. Bennetts, assisted by Dr. Gummess, performed the second operation. The left testicle was removed, a drainage tube was inserted, its presence being indicated on the operative report. Several days later, the drain was removed and Champion left the hospital.
Concerning the first operation, Dr. Bennetts testified that he had placed a rubber tube in Champion's scrotum for drainage purposes. He described it as being attached to the wall of the scrotum by sutures, part of the tube protruding from a "stab wound" made in the lowest part of the scrotum. He admitted, however, that he told no one except Dr. Gummess of the tube. He did not tell the internes or nurses of its presence, and "overlooked" mention of the tube or stab wound in making his operative report, although it called for pertinent information on drainage. When asked whether the tube might have slipped entirely inside the scrotum, Dr. Bennetts replied that such was "... within the realm of possibility ..."
Dr. Gummess substantiated Dr. Bennetts' testimony as to the insertion of the tube but said that he did not see it at any time when he examined the patient following the operation. As a practicing specialist in urology, Dr. Gummess was asked whether "... in an operation for the removal of a varicocele, under proper medical and surgical practice here, would a physician and surgeon intentionally permit a wound to close, leaving a rubber tube within the scrotum, with no part of the rubber tube protruding?" He replied, "No, he would not."
It was further established, by expert testimony, that drainage of scrotal wounds is a mandatory rule because "proper drainage will prevent infection." Two experts identified the pain and other symptoms of disease in Champion's scrotum after the operation as "classical signs" and "indications" of infection, which indicates bacterial attack upon living tissue. Dr. Bennetts admitted that there was infection present in the incision which was draining; that the draining involved the testicle, the spermatic cord and scrotum. Such infection, he said, can make tissue become necrotic. *820
Upon this evidence the jury returned a verdict in favor of Champion against Dr. Bennetts, exonerating Dr. Gummess and the hospital. Subsequently, the motion of Dr. Bennetts for judgment notwithstanding the verdict as to him was granted. The appeal of Champion challenges only the ruling of the court as to Dr. Bennetts; no complaint is made in regard to the judgments in favor of the other parties to the action.
[1] A defendant's motion for judgment notwithstanding the verdict "... may properly be granted only when, disregarding conflicting evidence and indulging in every legitimate inference which may be drawn from plaintiff's evidence, the result is a determination that there is no evidence sufficiently substantial to support the verdict." (Devens v. Goldberg, 33 Cal. 2d 173, 177-178 [199 P.2d 943].) Relying upon this rule, Champion contends that the evidence, disregarding conflicts, and the legitimate inferences to be drawn from it furnishes sufficient support for the jury's implied finding that Dr. Bennetts was negligent in performing the varicocelectomy, which negligence proximately caused the subsequent removal of the testicle with resulting damages.
[2] The record fully supports Champion in this regard. From the evidence presented by the respective parties the jurors reasonably might have concluded that the rubber tube was completely enclosed within the scrotum at the time of the operation, and the incision tightly sutured. If, however, they chose to believe that Dr. Bennetts left the tube protruding, there is ample evidence tending to prove a failure to fasten it so as to prevent withdrawal into the scrotum, a possibility admitted by Dr. Bennetts.
Under either view of the evidence, it shows a surgical procedure which permitted the operative incision to become tightly closed, leaving the rubber tube completely within the scrotum. Dr. Rosenbloom testified that "It is a rule, it is a mandatory rule, that we always drain scrotal wounds ..." The evidence would justify a conclusion that Dr. Bennetts violated this "mandatory rule" by failing to drain the scrotum during the period following the surgery, either because he made no provision for drainage or because he permitted the drainage tube to slip into the scrotum and the operative incision to close completely.
[3a] There is no merit to the contention that the evidence fails to establish a causal relation between the failure to properly provide for drainage and the subsequent necessity *821 for removal of the testicle. [4] "The law does not require that negligence of the defendant must be the sole cause of the injury complained of in order to entitle the plaintiff to damages therefor. All that is required ... is that the negligence in question shall be a proximate cause of the injury ..." (Griffith v. Oak Ridge Oil Co., 190 Cal. 389, 392 [212 P. 913].) [3b] It was shown that at the time of the first operation Champion's testicle was healthy and for that reason Dr. Bennetts did not take it out. Yet, 42 days later, it was in such condition that removal was deemed necessary. Although Dr. Bennetts argues to the contrary, the jury's implied finding that a causal relationship existed was not purely speculative. According to the medical testimony, the reason for the "mandatory rule" of drainage is the danger of infection. That testimony also characterized Champion's symptoms following the operation as "classical signs" and "indications" of infection and unquestionably it was a necrotic condition which necessitated the second operation.
The judgment entered upon the order granting judgment notwithstanding the verdict of the jury is reversed with directions to the trial court to enter judgment upon the verdict in favor of Champion.
Gibson, C.J., Shenk, J., Carter, J., Traynor, J., Schauer, J., and Spence, J., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1194811/ | 38 Cal. 3d 824 (1985)
700 P.2d 1280
215 Cal. Rptr. 278
E.S. BILLS, INC., Plaintiff and Respondent,
v.
DANIEL TZUCANOW et al., Defendants and Appellants.
Docket No. L.A. 31839.
Supreme Court of California.
June 24, 1985.
*826 COUNSEL
Gregg A. Johnson, Russell M. De Phillips and Milberg, Johnson, De Phillips & Lamson for Defendants and Appellants.
Paul B. Wells, Richard H. Benes, Linda Cory Allen and Procopio, Cory, Hargreaves & Savitch for Plaintiff and Respondent.
Pillsbury, Madison & Sutro, Walter R. Allan, James O'M. Tingle, Bruce McDiamond and Kirk S. Schumacher as Amici Curiae on behalf of Plaintiff and Respondent.
OPINION
REYNOSO, J.
In this unlawful detainer action, defendant lessees appeal from a judgment awarding possession of a gasoline service station, together with back rent and attorney fees, to plaintiff lessor, a petroleum distributor. Code of Civil Procedure section 1174, subdivision (a) (section 1174(a)) provides generally that a petroleum distributor may not recover possession from a gasoline dealer in an unlawful detainer action without establishing good cause under Business and Professions Code section 20999.1 (section 20999.1) for termination or nonrenewal of the gasoline dealer's franchise.[1] The latter section defines "good cause" to include (1) failure to "comply with essential and reasonable requirements of the franchise agreement," (2) *827 failure to "act in good faith in carrying out the terms of the franchise," or (3) "other legitimate business reasons" (with qualifications).[2]
The trial court, sitting without a jury, found that plaintiff terminated defendants' franchise solely because they refused to continue purchasing gasoline at the prices set by plaintiff, thereby violating their written obligation to buy the gasoline at plaintiff's "applicable Dealer Purchase Price." The issue on appeal is whether, in light of (1) sections 1174(a) and 20999.1, and (2) the usually summary nature of unlawful detainer actions, it was error for the trial court to refuse to receive and consider certain evidence offered by defendants to show that plaintiff's prices did not comply with the agreement. We shall conclude that the evidence was admissible, that the error was prejudicial, and that accordingly the judgment must be reversed.
On April 20, 1979, the parties executed a lease and two gasoline purchase agreements by which defendants became the lessees and dealer at plaintiff's service station in Vista (San Diego County), California, selling gasoline that plaintiff supplied under an "independent" brand (Regal) controlled by plaintiff. (Plaintiff was not the refiner of the gasoline.) The lease was for a primary term of one year with an automatic extension of two more years, subject to termination on thirty days' notice by either party. No cash rent was required, but defendants undertook to purchase the gasoline from plaintiff at plaintiff's "applicable Dealer Purchase Price" in effect at the time of sale to defendants' customers. Those arrangements constituted a "franchise" for purposes of section 20999.1.[3]
*828 Defendants operated the station as a family business from April 20, 1979, the date of the lease, until November 15, 1981, just before the date set by the trial judge for the plaintiff's retaking possession. In mid-1980 there was a sharp drop in defendants' gasoline sales and gross profits, and defendants' counsel wrote to plaintiff complaining of the latter's "pricing practices." Defendants' sales did not improve, and in April 1981 they filed a superior court action against plaintiff and two of its officers, seeking damages for breach of contract, treble damages for violation of the antitrust laws, and a declaration that the plaintiff's "applicable Dealer Purchase Price" specified in its agreement with defendants meant a wholesale price consistent with prices at which other distributors in the area sold to gasoline dealers.[4]
On June 8, 1981, defendants' counsel wrote to plaintiff, protesting that plaintiff was charging defendants more for gasoline than it charged the public at its own stations. The letter asserted that the "applicable Dealer Purchase Price" which defendants had contracted to pay for gasoline was "a reasonable wholesale or distributor price to be set by [plaintiff]" and cited the following provisions of the California Uniform Commercial Code as pertinent to the determination of the price: A price to be fixed by the seller means one fixed in good faith (§ 2305, subd. (2)) and in accordance with *829 reasonable commercial standards of fair dealing in the trade (§ 2103, subd. (1)(b)); and in determining the price of goods regularly sold in an established commodity market, price quotations in official or trade journals or in generally circulated newspapers or magazines are admissible in evidence (§ 2724). The letter then stated that as of June 19, 1981, defendants would purchase plaintiff's gasoline at the "current Arco rack price," as reported in the Lundberg letter, plus 2 cents per gallon to cover plaintiff's delivery costs and profit. (A "rack price" generally is understood to mean the price charged by the refiner for delivery in tanker-load lots.)
On June 19, defendants refused to purchase more gasoline from plaintiff except on the terms stated in that letter, and plaintiff refused to sell except at its own dealer purchase prices. On June 23, defendants commenced purchasing gasoline from another supplier, whereupon plaintiff served them with a notice that its gasoline purchase agreement with defendants was immediately terminated, and that the lease would be terminated in 30 days. Defendants continued to operate the station, selling gasoline obtained from the other supplier, until November 15.
On July 29, 1981, plaintiff commenced the present unlawful detainer action, alleging, inter alia, that there were "good cause and legitimate business reasons" to terminate the lease. Defendants denied that allegation and pleaded as an affirmative defense that plaintiff did not have good cause for termination within the meaning of sections 1174 and 20999.1, "as this action was brought in retaliation for Defendants' exercise of their rights in a separate superior court action."
At the trial, which was held on November 5 and 9, 1981, the parties submitted a written stipulation establishing the foregoing facts. The principal issue tried, with respect to plaintiff's right to repossession, was whether defendants had given plaintiff good cause to terminate their franchise by refusing to pay plaintiff's "applicable Dealer Purchase Price" within the meaning of the contract. Defendants contended that plaintiff had demanded illegally excessive prices in order to drive them out of business and enable plaintiff to operate the station directly. Early in the trial the court announced that on that issue defendants would be allowed to introduce evidence only of (1) dealings between the parties and (2) prices that plaintiff charged other lessee-dealers selling independent-brand gasoline.[5] Plaintiff's vice-president, Robert Bills, testified that there were only four such other dealers, all situated in Long Beach (some 70 miles from where defendants' station was *830 located), and that plaintiff charged defendants less for gasoline than it charged those other dealers, because defendants were "in a little more competitive area than the other stations were." Defendants were allowed to cross-examine Bills on how plaintiff assessed the "competitive" nature of defendants' situation and on other factors, such as plaintiff's costs, taken into account in setting the prices charged defendants.
Objections were sustained, however, to the following other evidence offered by defendants to show that the prices plaintiff charged were excessive: (1) retail gasoline prices at stations operated directly by plaintiff (which defendants claimed were less than the dealer prices plaintiff charged defendants); (2) prices charged a large-volume consumer (also claimed to be lower than prices charged defendants); (3) a published Lundberg report showing refinery prices on June 19, 1981; (4) prices for gasoline furnished to major-branded stations operated by plaintiff or its lessee-dealers (examples of major brands being Shell, Chevron, and Texaco); (5) profits of the lessee who had operated the station just prior to defendants' lease; (6) one defendant's opinion of the reasons for the station's decline in business in 1980; and (7) plaintiff's awareness of the retail prices charged by defendants' competitors. The trial court's position, distilled from numerous statements explaining its rulings, appears to have been that defendant could not assert that plaintiff's prices were excessive, as a defense in this unlawful detainer action, except by showing either (1) that plaintiff charged defendants more than it charged other dealers similarly situated or (2) that plaintiff set the prices with intent to drive defendants out of business and take over the station. In the absence of such discrimination or predatory intent, in the trial court's view, illegally excessive prices might well give defendants a cause of action for damages but would not entitle them to retain possession of the station while refusing to purchase their gasoline from plaintiff at plaintiff's prices.
Underlying the trial court's position was an understandable concern for the summary nature of unlawful detainer proceedings. (1) Because the purpose of such proceedings is timely restoration of possession, issues extrinsic to the possessory right are generally excluded even though they otherwise arise out of the subject matter of the action. (Green v. Superior Court (1974) 10 Cal. 3d 616, 632-634 [111 Cal. Rptr. 704, 517 P.2d 1168].) A defense of retaliatory eviction is permitted "if on balance, the public policies furthered by protecting a tenant from eviction outweigh the state's interest in ensuring that unlawful detainer proceedings are truly summary." (Barela v. Superior Court (1981) 30 Cal. 3d 244, 250 [178 Cal. Rptr. 618, 636 P.2d 582]; accord, S.P. Growers Assn. v. Rodriguez (1976) 17 Cal. 3d 719, 728-729 [131 Cal. Rptr. 761, 552 P.2d 721].) Thus, prior to enactment of section 20999.1 and the pertinent provisions of section 1174(a), it was *831 held in Union Oil Co. v. Chandler (1970) 4 Cal. App. 3d 716 [84 Cal. Rptr. 756], that a service station operator could not assert as a defense in an unlawful detainer action that the lessor oil company was terminating the lease because of the lessee's refusal to participate in a price-fixing scheme prohibited by the antitrust laws. The Court of Appeal explained: "When we weigh the complex and protracted nature of antitrust cases in the light of the adequate remedies and damages afforded an aggrieved party in such cases against the interest in preserving the summary nature of an unlawful detainer action, we believe the latter to be of paramount importance." (Id., at p. 726.)
(2) In the present case, however, the lack of good cause under section 20999.1 to terminate a gasoline dealer's franchise is not simply a defense to be balanced against the policy of preserving the summary nature of unlawful detainer proceedings. Instead, section 1174(a) now includes the existence of such good cause as a prerequisite to an unlawful detainer judgment for restoration of a defendant gasoline dealer's premises to a plaintiff petroleum distributor. Thus, the issue now determinative of plaintiff's right to repossession was joined in the pleadings not by the defendants' retaliatory eviction defense but by the complaint's allegation of good cause for termination, and the denial of that allegation in the answer.[6]
We should endeavor to apply those provisions of section 1174(a) in a way that will best carry out the policies of section 20999.1 that the amendment to section 1174(a) was designed to implement. In enacting section 20999.1, the Legislature expressly declared the public interest in preventing disruption in the marketing of gasoline.[7] The amendments to section 1174(a) seem intended to assure the gasoline dealer of a day in court on the merits of the dealer's and distributor's respective rights under the franchise before the distributor is allowed to retake possession of the service station. The amendments *832 contain two safeguards for the petroleum distributor: First, the right to a writ of possession against an absent or inaccessible defendant upon the filing of an undertaking (Code Civ. Proc., § 1166a) is expressly preserved. Second, the court may "require the tenant to make rental payments into the court, for the lessor, at the contract rate, pending the resolution of the action" (§ 1174(a)). Apart from those two safeguards, neither of which was invoked here, section 1174(a) directs that in unlawful detainer proceedings by petroleum distributors against gasoline dealers, the ordinarily summary nature of the unlawful detainer proceeding must give way to the policy of assuring that the petroleum distributor indeed had good cause for terminating the franchise.
The trial court concluded that plaintiff had such good cause. The issue here is whether the evidence from which it reached that conclusion was erroneously and prejudicially restricted.
The key findings on plaintiff's reasons for terminating defendants' franchise are these: "9. Plaintiff served defendants with the notice of termination because defendants refused to purchase any more gasoline from plaintiff at plaintiff's Dealer Purchase Price. [¶] 10. Plaintiff did not terminate or seek to terminate defendants' lease or supply agreement for any reason other than defendants' refusal to continue to purchase gasoline from plaintiff...." Those findings provide crucial support for the trial court's conclusions that plaintiff had good cause for termination in that defendants "failed to comply with essential and reasonable requirements of the franchise agreement" and "failed to act in good faith in carrying out the terms of the franchise" (see § 20999.1, subds. (a), (b)).[8]
*833 The evidence excluded by the trial court was relevant to those findings in that it was probative of whether the prices plaintiff was charging defendants for each grade of gasoline complied with plaintiff's contractual obligation to charge its "applicable Dealer Purchase Price." The contract must be interpreted in light of the following provisions of the California Uniform Commercial Code: "A price to be fixed by the seller or by the buyer means a price for him to fix in good faith." (§ 2305, subd. (2).) "`Good faith' in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." (§ 2103, subd. (1)(b).) "`Merchant' means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction...." (§ 2104, subd. (1).)
Defendants' theory was that under prevailing marketing conditions, and in light of the statutory standards, plaintiff was required to charge prices that would enable defendants to compete with other stations in the area and earn a reasonable profit. The trial court erroneously excluded evidence offered to support that theory. Thus, defendants were not permitted to show the retail prices charged at the service stations operated directly by plaintiff, or the prices charged by plaintiff to a large-volume consumer, even in the face of defendants' offers of proof in both instances that the prices in question were less than those that plaintiff was charging defendants. Also excluded was a published Lundberg report of current refiner's prices (seemingly admissible under Cal. U. Com. Code, § 2724). The court further excluded evidence of wholesale prices charged by the suppliers of major-brand gasoline to other stations owned or operated by plaintiff, of the profitability of defendants' station under their predecessor, of the reasons for the station's decline in business, and of plaintiff's awareness of retail prices charged by defendants' competitors. All of this excluded evidence seems relevant to whether plaintiff fixed the prices charged defendants in accordance with reasonable commercial standards of fair dealing in the trade.
The trial court recognized the relevance of the excluded evidence to the issue of whether plaintiff's prices accorded with the contract yet deemed it not relevant to plaintiff's right to repossession of the service station. That view was incorrect. If plaintiff failed to offer defendants gasoline except at prices in excess of those permitted by the contract, defendants' refusal to purchase the gasoline at those prices was neither a "fail[ure] to comply with essential and reasonable requirements of the franchise agreement" nor a "fail[ure] to act in good faith in carrying out the terms of the franchise" (§ 20999.1, subds. (a), (b)). In that event, there was no showing of good cause for terminating the franchise, and section 1174(a)'s prerequisites for restoring possession to plaintiff petroleum dealer were not met.
*834 Plaintiff contends that defendants are precluded from complaining about plaintiff's prices at the time of their refusal to purchase because (as found by the trial court) on June 8, 1981, defendants informed plaintiff that as of June 19, they would purchase plaintiff's gasoline only at 2 cents per gallon over published Arco "rack" prices. According to plaintiff the prices specified by defendants were unreasonably low.[9] But the contract gave plaintiff, not defendants, the right and duty of setting the prices to be paid by defendants, so that the question of good cause turns primarily, if not wholly, on the propriety of plaintiff's prices. If those prices were proper, defendants would be in breach, and there would be good cause to terminate the franchise, regardless of whether defendants counteroffered a lower price or responded with a flat refusal to purchase from plaintiff. On the other hand, if plaintiff's prices were too high to conform to the contract, a notice by defendants that they would pay only prices that were too low to conform would not necessarily put defendants in breach, at least in the absence of reliance by plaintiff sufficient to excuse plaintiff's failure to tender proper performance.
The trial court erroneously excluded evidence that was crucial to defendants' ability to disprove the good cause requisite to a judgment for plaintiff under sections 1174(a) and 20999.1. Accordingly, the judgment is reversed.
Kaus, J., Broussard, J., Grodin, J., and Lucas, J., concurred.
MOSK, J.
I concur.
The majority opinion reaches the correct result on the issues raised and discussed. My concern, however, has been with the validity of Business and Professions Code section 20999.1. If the section is constitutionally infirm it would have no effect whatever on this unlawful detainer action.
Section 20999.1 provides, in substance, that no petroleum refiner or distributor franchisor "shall terminate, cancel, or fail to or refuse to renew any existing franchise without good cause," and defines "good cause" to mean: (a) the franchisee has failed to comply with essential and reasonable requirements of the franchise agreement; (b) the franchisee has failed to act in good faith toward the franchisor; (c) the franchisor is withdrawing from the franchisee's marketing location; and (d) any other legitimate business reason, provided that if the franchisor terminates, cancels, or fails or refuses to renew in order to assume operation of the franchisee's business, the *835 franchisor must pay the franchisee reasonable compensation for the value of the franchise. At the present time 24 other states have statutes similar to section 20999.1. (15 Glickman, Business Organizations: Franchising (1985) § 3.03[1] at pp. X-XX-X-XX, and statutes cited.)
"Good cause" statutes such as section 20999.1 spring from the economic and social importance of franchising in the United States and the potential and actual abuses associated with this business relationship.
Franchising combines the efficiencies of big business at the national or regional level (e.g., economies of scale and access to capital) with the efficiencies of small business at the local level (e.g., the ability to quickly determine and respond to customers' desires). (See Ungar v. Dunkin' Donuts of America, Inc. (3d Cir.1976) 531 F.2d 1211, 1222-1223, cert. den., 429 U.S. 823 [50 L. Ed. 2d 84, 97 S. Ct. 74]; Brown, Franchising: Realities and Remedies (1982) § 7.04[1]-[2] at pp. X-XX-X-XX [hereafter Brown].) Franchising also decreases economic concentration in integrated enterprises and as franchisors invariably claim in their marketing efforts allows individuals who otherwise would not have been able to become independent businessmen to do so. (See Ungar, supra, at pp. 1222-1223; Brown, supra, § 1.01[2] at p. 1-3.) The franchisee, as it has been recognized, develops goodwill for the franchise through the investment of his time, labor, and money. (See, e.g., Milsen Company v. Southland Corporation (7th Cir.1971) 454 F.2d 363, 366.) Not surprisingly then, his interest in the goodwill of his franchise in his own locality has achieved recognition under the common law (see, e.g., Shell Oil Co. v. Marinello (1973) 63 N.J. 402 [307 A.2d 598, 601-602, 67 A.L.R. 3d 1291] cert. den. (1974) 415 U.S. 920 [39 L. Ed. 2d 475, 94 S. Ct. 1421]), and under statutes (see, e.g., Bus. & Prof. Code, § 20000 et seq.; Corp. Code, §§ 31101, 31119, 31125).
Franchising, I note in passing, has become a significant economic phenomenon. In 1980, for example, franchised businesses had only recently recovered from a severe slump and nevertheless accounted for $385 billion in annual sales, 24 percent of the GNP, and 38 percent of all retail sales in the United States. (Brown, supra, § 1.01[1] at p. 1-2, citing U.S. Dept. of Commerce (1980) Franchising in the Economy 1979-1981.)
Franchising involves the unequal bargaining power of franchisors and franchisees and therefore carries within itself the seeds of abuse. Before the relationship is established, abuse is threatened by the franchisor's use of contracts of adhesion presented on a take-it-or-leave-it basis. (See, e.g., Ungar, supra, 531 F.2d at pp. 1222-1223; Semmes Motors, Inc. v. Ford Motor Company (2d Cir.1970) 429 F.2d 1197, 1207; see generally Note, Fairness in Franchising: The Need for a Good Cause Termination Requirement *836 in California (1980) 13 U.C. Davis L.Rev. 780, 785, fn. 18, and authorities cited [hereafter Good Cause Termination Requirement].) Indeed, such contracts are sometime so one-sided, with all the obligations on the franchisee and none on the franchisor, as not to be legally enforceable. (Brown & Cohen, Franchising: Constitutional Considerations for "Good Cause" State Legislation (1978) 16 Hous.L.Rev. 21, 33 [hereafter Brown & Cohen].) After the relationship is established, abuse is threatened by the very nature of franchise agreements as contracts of adhesion: "[T]hey contain provisions which are extremely difficult for franchisees to comply with. The result is that franchisees are constantly in peril of non-compliance ...." (Good Cause Termination Requirement, supra, at p. 785, fn. 19; see, e.g., FTC v. Texaco (1968) 393 U.S. 223, 226-229 [21 L. Ed. 2d 394, 397-399, 89 S. Ct. 429].) The seeds of abuse, moreover, have not remained dormant: abuse has sprung up, and sprung up often. (E.g., Good Cause Termination Requirement, supra, at p. 781, fn. 4, and authorities cited; see, e.g., Ungar, supra, 531 F.2d at p. 1222.)
Set against this background, the purpose of good cause legislation, such as section 20999.1, is manifestly to protect the franchisee's interest in his business without denying the franchisor the right to terminate, cancel, or fail or refuse to renew when he has legitimate business reasons to do so. (See, e.g., Brown, supra, § 7.04[1]-[2] at pp. X-XX-X-XX.) Such protection has not effectively been provided by substantive legal remedies. (E.g., Good Cause Termination Requirement, supra, 13 U.C. Davis L.Rev. at pp. 788-803.)
Section 20999.1, like other state good cause statutes, is subject to scrutiny under the contracts clause (U.S. Const., art. I, § 10, cl. 1), the supremacy clause (id., art. VI, cl. 2), the due process clause (id., Amend. XIV, § 1), the equal protection clause (ibid.), and the commerce clause (id., art. I, § 8, cl. 3). The provision appears to survive scrutiny under each clause.
First, section 20999.1 appears not to impair the obligation of contracts. Such a conclusion follows when, as here, the statute is given prospective effect. (Union Oil Co. v. Moesch (1979) 88 Cal. App. 3d 72, 77-78 [151 Cal. Rptr. 517]; accord, Phillips Petroleum Co. v. Paradee Oil Co., Inc. (Del. 1975) 343 A.2d 610, 611-612.) Such a conclusion, moreover, is arguably not barred even if the statute is given retroactive effect. Although the weight of authority is against the permissibility of retroactive application (e.g., Mobil Oil Corp. v. Handley (1978) 76 Cal. App. 3d 956, 964-965 [143 Cal. Rptr. 321]; accord, Globe Liquor Co. v. Four Roses Distillers Company (Del. 1971) 281 A.2d 19, 21, cert. den., 404 U.S. 873 [30 L. Ed. 2d 117, 92 S. Ct. 103]), better reasoned analysis would allow such application, at least in some situations (Good Cause Termination Requirement, supra, 13 *837 U.C. Davis L.Rev. at p. 783, fn. 12 ["Retroactive application alone should not be sufficient to invalidate the legislation. Retroactivity is only one factor the court considers in determining whether the state has unconstitutionally impaired an existing contract. [Citations.] One could argue that when a good cause requirement is applied to existing contracts it is not a retroactive impairment of contracts but merely the reasonable regulation of an ongoing business relationship. Cf. New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 106 (1978) (California's regulation of the number of automobile franchises in an area upheld as a reasonable state regulation of a business relationship)."]; Brown & Cohen, supra, 16 Hous.L.Rev. at pp. 51-53 ["Although `good cause' legislation may be couched in the language of agreements, such statutes are more the regulation of competition than a contractual proscription." (Fn. omitted.)]).
Second, section 20999.1 appears not to be preempted by any federal law dealing with its subject matter broadly defined. As the parties agree and the majority opinion correctly concludes, the Petroleum Marketing Practices Act (15 U.S.C. § 2801 et seq.) is not preemptive. Further, the Lanham Act (id., § 1051 et seq.), the federal trademark law, is not preemptive. (E.g., C.A. May Marine Sup. Co. v. Brunswick Corp. (5th Cir.1977) 557 F.2d 1163, 1167; Mariniello v. Shell Oil Company (3d Cir.1975) 511 F.2d 853, 856-859.) Finally, the federal antitrust laws are not preemptive. (See In re Clark Oil & Refining Corp., etc. (E.D.Wis. 1977) 422 F. Supp. 503, 516 [approval of master settlement agreement providing for, inter alia, termination only for cause].)
Third, section 20999.1 appears not to violate the due process clause. The statutory standard of good cause is not impermissibly vague. (E.g., C.A. May Marine Sup. Co. v. Brunswick Corp., supra, 557 F.2d at p. 1167 [claim is "patently frivolous"]; Globe Liquor Co. v. Four Roses Distillers Company, supra, 281 A.2d at pp. 21-22 [upholding against a void-for-vagueness attack a statute that merely provided that a failure to renew is unjust if made "without good cause or in bad faith," without defining either phrase].) Further, it is within the police power of the Legislature to protect franchisees from the arbitrary exercise of the right to terminate, cancel, or fail or refuse to renew on the part of franchisors. (Cf. New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co. (1978) 439 U.S. 96, 106-108 [58 L. Ed. 2d 361, 373-375, 99 S. Ct. 403] ["the California Legislature was empowered to subordinate the franchise rights of automobile manufacturers to the conflicting rights of their franchisees where necessary to prevent unfair or oppressive trade practices"].)
Fourth, section 20999.1 appears not to violate the equal protection clause. In light of the Legislature's not unreasonable finding and declaration of the *838 necessity of the legislation in question (Stats. 1975, ch. 640, § 2, p. 1390), the classifications made do not appear to "do[] violence to common sense" and thus do not contravene the equal protection clause. (Globe Liquor Co. v. Four Roses Distillers Company, supra, 281 A.2d at p. 23 [statute limiting coverage to wholesaler-franchisees and to retailer-franchisees dealing in no more than three trademark or trade name products held not violative of the equal protection clause].)
Finally, section 20999.1 appears not to violate the commerce clause. (Cf. Exxon Corp. v. Governor of Maryland (1978) 437 U.S. 117, 125-129 [57 L. Ed. 2d 91, 99-102, 98 S. Ct. 2207] [upholding against a commerce-clause attack a state statute prohibiting oil companies from operating gasoline stations or other retail outlets: although the statute has the effect of making a major change in the distribution system of an interstate industry, it neither discriminates against interstate goods nor favors local producers or refiners and thus does not unduly burden interstate commerce].)
For the foregoing reasons, I conclude that section 20999.1 is valid. Therefore I agree with the majority that the judgment should be reversed.
Bird, C.J., concurred.
Respondent's petition for a rehearing was denied August 1, 1985.
NOTES
[1] The second and third paragraphs of section 1174(a) which took effect January 1, 1978, provide as follows: "Except as provided in Section 1166a, in any action for unlawful detainer brought by a petroleum distributor against a gasoline dealer, possession shall not be restored to the petroleum distributor unless the court in the unlawful detainer action determines that the petroleum distributor had good cause under Section 20999.1 of the Business and Professions Code to terminate, cancel, or refuse to renew the franchise of the gasoline dealer. [¶] In any action for unlawful detainer brought by a petroleum distributor against the gasoline dealer, the court may, at the time of request of either party, require the tenant to make rental payments into the court, for the lessor, at the contract rate, pending the resolution of the action."
[2] Section 20999.1 was added as of January 1, 1976. As amended effective January 1, 1979 (but prior to further amendment effective Jan. 1, 1982), it provided in pertinent part: "Notwithstanding the terms of any franchise, no franchisor shall terminate, cancel, or refuse to renew any existing franchise without good cause. [¶] As used in this section good cause is limited to the following:
"(a) The gasoline dealer or petroleum distributor failed to comply with essential and reasonable requirements of the franchise agreement;
"(b) the gasoline dealer or petroleum distributor failed to act in good faith in carrying out the terms of the franchise; or
".... .... .... .... .... .... .
"(d) For other legitimate business reasons (except that a termination, or cancellation of a franchise for the purpose of enabling the petroleum distributor or manufacturer to assume operation of the distributor's or gasoline dealer's business shall not be considered to be a legitimate business reason unless the gasoline dealer or distributor is paid reasonable compensation for the value of his franchise, including a reasonable amount for goodwill)."
[3] Business and Professions Code section 20999, as adopted along with section 20999.1, effective January 1, 1976, provided until January 1, 1982, as follows:
"As used in this chapter, the term:
"(a) `Petroleum distributor' means any person engaged in the sale, consignment, or distribution of petroleum products to retail outlets which it owns, leases, or otherwise supplies.
"(b) `Gasoline dealer' means any person engaged in the retail sale of petroleum products in this state under a franchise or contractual agreement entered into with a petroleum distributor.
"(c) `Franchise' means any agreement between a petroleum distributor and a manufacturer or between a gasoline dealer and a petroleum distributor under which the petroleum distributor or the gasoline dealer is granted the right to use a trademark, trade name, service mark, or other identifying symbol or name owned by the manufacturer or distributor, or an agreement between a petroleum manufacturer or distributor or dealer under which the petroleum distributor or the gasoline dealer is granted the right to occupy premises owned, leased, or controlled by the other party to the agreement, for the purpose of engaging in the retail or wholesale sale of petroleum products."
As of January 1, 1982, the foregoing section 20999 was replaced by similar but more elaborate provisions in a new section of the same number. Had the parties' contractual arrangement been entered into after that date, provisions in the new section specifying control of the trademark by the "refiner" as a component of a "franchise" would raise questions, not presented here, about the applicability of sections 1174a and 20999.1. (See fn. 4, post.)
[4] We are advised by counsel that this action later was voluntarily dismissed and refiled in a federal district court, which dismissed a portion of the complaint that claimed relief under the federal Petroleum Marketing Practices Act (15 U.S.C. § 2801 et seq.) (PMPA). The parties agree that the PMPA did not apply to their contractual arrangement because the trademark under which defendants were required to market the gasoline supplied by plaintiff was not owned or controlled by the refiner, and therefore the arrangement did not constitute a "franchise" under PMPA section 101(1) (15 U.S.C. § 2801(1)).
Plaintiff contends, however, that because the PMPA has been held to preempt certain portions of California's section 20999.1 (California Arco Distributors, Inc. v. Atlantic Richfield Co. (1984) 158 Cal. App. 3d 349 [204 Cal. Rptr. 743]), that section should be deemed inoperative here. The contention is meritless, "for if the PMPA has no applicability to this case then no issue of preemption is presented" (id., at p. 365). PMPA itself provides for preemption of state law only "[t]o the extent that any provision of this subchapter applies to the termination ... of any franchise, or to the nonrenewal ... of any franchise relationship." (15 U.S.C. § 2806(a).)
[5] A "Dealers Sale and Security Agreement," one of the two gasoline purchase agreements executed by the parties along with the lease, provided that defendants would buy gasoline at plaintiff's "posted delivered price for each grade of gasoline in effect for the date, the buyer's class of trade and the marketing area in which the buyer's service station is located."
[6] Because the present lease and franchise were executed on April 20, 1979, subsequent to the effective dates of section 20999.1 and the pertinent provisions of section 1174(a) (see fns. 1, 2 ante), we need not consider the questions of their retroactive effect addressed in Mobil Oil Corp. v. Rossi (1982) 138 Cal. App. 3d 256 [187 Cal. Rptr. 845]; Witt v. Union Oil Co. (1979) 99 Cal. App. 3d 435 [160 Cal. Rptr. 285]; Union Oil Co. v. Moesch (1979) 88 Cal. App. 3d 72 [151 Cal. Rptr. 517]; and Mobil Oil Corp. v. Handley (1978) 76 Cal. App. 3d 956 [143 Cal. Rptr. 321].
[7] The statute that first enacted section 20999.1 contained this additional provision: "The Legislature finds and declares that distribution and sales through franchise arrangements of gasoline in the State of California affects the general economy of the state, the public interest and the public welfare. Competition and nondiscriminatory practices are essential to the fair and efficient functioning of a free market economy. Gasoline and other petroleum products should be marketed in the manner most beneficial to the consumer, and to prevent the disruption of vital energy sources. To prevent such disruptions it is necessary to define the relationships and responsibilities of parties to gasoline franchise agreements, and provide a remedy to gasoline dealers whose franchises are terminated, or not renewed." (Stats. 1975, ch. 640, § 2.)
[8] The court also concluded that plaintiff had "other legitimate business reasons" for terminating the franchise, but the findings do not support a conclusion that plaintiff had any reason other than defendants' refusal to buy plaintiff's gasoline at plaintiff's applicable dealer purchase price.
Plaintiff argues that defendants' purchases of gasoline from an alternate supplier, following the breakdown in agreement on the propriety of the price being charged by plaintiff, was an additional reason for termination because such purchases violated defendants' contractual obligation to "sell all gasoline supplied hereunder under brands, trademarks and names supplied by [plaintiff] without adulteration." But there is no evidence that defendants passed off gasoline from the other supplier under plaintiff's brand name; further, plaintiff's formal notice of termination specified as a reason only defendants' failure to purchase gasoline from plaintiff at plaintiff's applicable dealer purchase price.
The stipulation of facts, submitted at the trial, states that defendants operated a flower shop on the premises beginning August 1, 1980, from which they netted about $1,400 per year. Plaintiff argues that that operation violated the provision in paragraph 6 of the lease that "Lessee acknowledges that said premises are leased for the sole and exclusive purpose of conducting thereon a gasoline service station business and that said premises shall not be used for any other purpose without lessor's written consent." But there is no evidence that the flower-shop operation, even if it be deemed to have given rise to a legally sufficient reason for termination of the franchise under section 20999.1, subdivision (c), was ever invoked by plaintiff as a reason for terminating the lease.
[9] The trial court found that plaintiff's overhead and administrative costs exceeded 2.5 cents per gallon but did not make a finding on the prices paid by plaintiff to acquire the gasoline furnished defendants. Plaintiff's vice president testified that plaintiff did pay the Arco rack price, but defendants assert in their briefs that the published rack price was often discounted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1732350/ | 435 So. 2d 1064 (1983)
ASIAN INTERNATIONAL, LTD.
v.
MERRILL LYNCH, PIERCE, FENNER AND SMITH, INC., et al.
No. 82 CA 0614.
Court of Appeal of Louisiana, First Circuit.
June 28, 1983.
Rehearing Denied August 23, 1983.
*1065 Floyd J. Falcon, Jr., Baton Rouge, for plaintiff-appellee Asian Intern., Inc.
Michael O. Hesse, St. Francisville, and Donald Beckner, Baton Rouge, for defendant-appellee Ben F. Fort, Jr.
John S. Thibaut, Jr., Baton Rouge, for defendant-appellee H. Grady Smith, Jr.
Lee C. Kantrow, Baton Rouge, for defendant-appellant Merrill Lynch, Pierce, Fenner and Smith, Inc.
Ronald Mason, Jr., Lafayette, for defendant-appellee Edward C. McCallum.
Before LOTTINGER, COLE and CARTER, JJ.
CARTER, Judge.
This is a suit by Asian International, Ltd. (Asian) against Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), Ben F. Fort, Jr. (Fort) and H. Grady Smith, Jr. (Smith),[1] claiming ownership of certain accounts in the name of Fort with Merrill Lynch and seeking relief for tortious conversion of a $200,000.00 check, together with additional damages for the loss of corporate opportunity. Merrill Lynch filed various reconventional and third party demands and then filed a rule to show cause why a concursus proceeding should not be invoked.
Pursuant to the hearing to show cause, the rule was denied, and the trial court held that Merrill Lynch was not entitled to invoke a concursus under the circumstances then existing.
Merrill Lynch appealed this decision and subsequently filed a motion for summary judgment, which was granted by the trial court. The trial court dismissed Merrill Lynch as a defendant from the suit, after finding that Merrill Lynch was a holder in due course of the instrument and that as such it took the check free from all claims and defenses on the part of any person. Fort then filed a motion to dismiss Merrill Lynch's appeal concerning the concursus.
MOTION TO DISMISS APPEAL
Fort's motion to dismiss the appeal was referred to the merits. The basis of the motion to dismiss is essentially that Merrill Lynch's right to appeal the trial court's refusal to invoke a concursus proceeding has become moot because Merrill Lynch has been dismissed, as a defendant, from the suit pursuant to summary judgment granted in its favor.
A motion to dismiss an appeal must be based on alleged irregularities in proceedings related to the appeal, occurring either in the trial court or in the appellate court, or on want of jurisdiction in one or both courts. It should not be based on matters relating to the merits of the controversy. McConnell v. Pasley, 39 La.Ann. 1097, 3 So. 484 (1887); Town of Kinder v. Beauregard Elec. Co-op., Inc., 339 So. 2d 891 (La.App. 3rd Cir.1976). When a motion to dismiss an appeal is based on issues which *1066 go to the merits of the case, those issues should not be determined on such a motion, but instead they should be resolved on appeal. Gulf States Utilities Co. v. Dixie Elec. Mem. Corp., 248 La. 458, 179 So. 2d 637 (1965); State v. Home Realty Inv. Co., 214 La. 45, 36 So. 2d 633 (1948); Town of Kinder v. Beauregard Co-op., Inc., supra; Mares v. Louisiana Wildlife and Fisheries Com'n., 228 So. 2d 694 (La.App. 4th Cir.1969).
Fort's motion to dismiss is based on issues which relate to the merits, and accordingly, the motion is denied.
MOTION FOR SUMMARY JUDGMENT
In a related appeal, bearing Docket No. 82 CA 0216, Asian strenuously opposed the trial court's granting of summary judgment in favor of Merrill Lynch.
The trial court granted summary judgment based on its finding that Merrill Lynch had proved its status as a holder in due course, which allowed it to take the check free of all claims and defenses, and that there were no genuine issues of material fact with reference to Merrill Lynch's status as a holder in due course. On appeal, we affirmed the trial court's ruling. Asian International, Ltd. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., 435 So. 2d 1058 (La.App. 1st Cir.1983).
CONCURSUS PROCEEDING
Merrill Lynch, as plaintiff-in-reconvention and third party plaintiff, filed a rule to show cause why certain property held by Merrill Lynch in an account for Ben F. Fort, Jr. and his wife, Allyne E. Fort, should not be deposited into the registry of the court pursuant to a concursus proceeding. From a procedural standpoint, a concursus proceeding can be invoked by means of a reconventional demand, if the substantive requirements of a concursus proceeding are otherwise present, vis., two or more conflicting claims of ownership of property sought to be deposited into the registry of the court, a grant of relief to a stakeholder from further or multiple liability, and a single judgment adjudicating all issues between the parties.
A concursus proceeding is defined in LSA-C.C.P. art. 4651, which provides that:
"A concursus proceeding is one in which two or more persons having competing or conflicting claims to money, property, or mortgages or privileges on property are impleaded and required to assert their respective claims contradictorily against all other parties to the proceeding."
The property held by Merrill Lynch, presently in the name of Fort, includes:
(1) $27,683.82 in CMA Money Fund; and
(2) $70,000.00 principal amount of Intermountain Power Agency Utah Power Supply Revenue Bonds (14%) due July 1, 2021.
Merrill Lynch argues that the required "conflicting claims of ownership" necessary to invoke a concursus proceeding have been asserted with respect to the above described property. Merrill Lynch contends that Asian claims ownership of the $200,000.00 check deposited with Merrill Lynch or proceeds derived therefrom and, therefore, claims the balance of monies currently on deposit in the name of Fort at Merrill Lynch.
Asian claims two items of damages from Merrill Lynch, Smith, and Fort. Asian is seeking $200,000.00 for tortious conversion of a $200,000.00 check payable to Asian, but endorsed and negotiated by Smith to Fort and renegotiated to Merrill Lynch. As part of this claim, Asian contends that the converted funds were utilized and deposited in the various accounts with Merrill Lynch, said accounts standing in the name of Fort, and that in fact these accounts "properly belong" to Asian.[2] Fort has made repeated *1067 requests on Merrill Lynch to return the monies he placed on deposit, specifically the CMA Money Fund and the Revenue Bonds. Despite these requests, Merrill Lynch has refused to release the contested funds.
Since Asian and Fort are each claiming ownership of the $27,683.82 CMA Money Fund and the $70,000.00 Revenue Bonds (Asian at least claims the funds are identifiable as having been purchased with converted funds), the requirement of competing or conflicting claims of ownership necessary to invoke a concursus proceeding is clearly present in the case sub judice.
LSA-C.C.P. art. 4658 provides that:
"With leave of court, the plaintiff may deposit into the registry of the court money which is claimed by the defendants, and which plaintiff admits is due one or more of the defendants.
"When sums of money due one or more of the defendants accrue from time to time in the hands of the plaintiff after the institution of the proceeding, with leave of court he may deposit the money as it accrues into the registry of the court.
"After the deposit of money into the registry of the court, the plaintiff is relieved of all liability to all of the defendants for the money so deposited."
The primary purpose of this remedial proceeding is to protect the stakeholder from multiple liability, from conflicting claims, and from the vexation attending involvement in multiple litigation in which the stakeholder may have no direct interest. LSA-C.C.P. arts. 4651-4662; Louisiana Intrastate Gas Corporation v. Muller, 290 So. 2d 888 (La.1974). Concursus contemplates a proceeding which leads to a single judgment adjudicating all issues between the parties. Johnson v. Lemons, 157 So. 2d 752 (La.App. 2d Cir.1963). In a concursus proceeding, the jurisdiction of the court is limited to disposing of the funds on deposit and relieving the stakeholder from further liability to the impleaded claimants arising out of or as a result of the stakeholder's ownership or possession of the fund. LSA-C.C.P. arts. 4651-4662.
The articles of the Louisiana Code of Civil Procedure governing concursus suits are to be construed liberally and given a broad application. Damson Oil Corp. v. Sarver, 346 So. 2d 1304 (La.App. 3rd Cir. 1971), writ refused, 350 So. 2d 896 (La.1977); Placid Oil Company v. Young, 246 So. 2d 306 (La.App. 3rd Cir.1971).
The purposes of a properly invoked concursus proceeding, viz., relief from further liability to impleaded claimants, avoidance of double or multiple liability, and relief from vexation of multiple litigation are properly served in the instant case. Although Merrill Lynch is no longer a party defendant in this proceeding and is relieved from liability to Asian as a result of the summary judgment granted in its favor, Merrill Lynch remains liable to someone (Asian or Fort) for the funds on deposit. Asian International, Ltd. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., supra. Furthermore, Merrill Lynch's liability to the impleaded claimants as to the funds on deposit will cease upon depositing the money into the registry of the court pursuant to a concursus proceeding, wherein the proper owner of the deposited funds will be determined.
Fort argues in brief that the "approval of the requested proceeding will not avoid the vexation of involvement in multiple litigation on the part of Merrill Lynch since it will remain a party defendant in the lawsuit against it by Fort for damages for Merrill Lynch's refusal to release the funds on account in his name to him." However, an exhaustive examination of all pleadings in the record does not reveal any such pleading wherein Fort is asking for damages from Merrill Lynch, and in fact Fort *1068 has not made Merrill Lynch a defendant in any capacity.[3]
Fort relies upon Landry & Passman Rlty., Inc. v. Beadle, S., W. & A., Inc., 303 So. 2d 761 (La.App. 1st Cir.1974), writ refused 307 So. 2d 631 (La.1975), in support of its contention that a concursus is inappropriate in the instant case. We disagree and find that Fort's reliance on this case is misplaced for several reasons. First, any allowance of the concursus in the instant case does not violate Louisiana Code of Civil Procedure articles pertaining to venue. In Landry & Passman, supra, this court stated at p. 764:
"Admittedly a claimant to a fund may be impleaded in a concursus proceeding in any court of competent jurisdiction, irrespective of which court may be the proper venue for bringing an ordinary action against him. However, to allow assertion of a claim of this nature against a claimant in a concursus proceeding, in a court which would not ordinarily be the proper venue for prosecution of the claim, would do violence to our general venue laws. In this instance, for example BS&W would, without its consent and over its express objection, be required to defend an action against it on a claim totally unrealted to the concursus fund or the matter out of which the fund arose, in a court which would ordinarily not be the proper venue."
Secondly, in Landry & Passman, supra, one of the claimants to the proceeds sought to be deposited in the concursus merely asserted an unliquidated claim as an unsecured creditor arising out of a transaction foreign to that which generated the concursus fund.[4] In the case sub judice, all claims arise out of the original negotiation of a single $200,000.00 check and each of the competing claimants claims ownership of the funds that are the object of the concursus proceedings.[5] All matters in litigation and all claims arise from one source, the $200,000.00 check.
Summarizing, Merrill Lynch properly and appropriately sought to invoke this concursus proceeding so as to be protected from multiple liability from conflicting claims and from the vexation attending involvement in multiple litigation in which the stakeholder has no direct interest. We have previously determined that Merrill Lynch (stakeholder) is an innocent third party possessing funds, admittedly belonging to or owned by another. The funds are claimed by both Asian and Fort. The conflicting claims, although not required to have a common origin, in the instant case do have a common origin and arise from one source.
For the above and foregoing reasons, the judgment of the trial court is reversed and the case is remanded to allow Merrill Lynch *1069 to deposit the contested accounts into the registry of the court to be held until the respective claims of Asian and Fort are determined and a final judgment rendered.
REVERSED AND RENDERED.
NOTES
[1] For some unexplained reason, Edmund C. McCallum, Secretary-Treasurer of Asian and co-endorser of the check, was not made a defendant in the original suit filed by Asian.
[2] Paragraphs 6 and 7 of Asian's petition allege:
Paragraph 6: On information and belief, plaintiff avers that defendant Fort received all or part of the funds into a securities, checking or trading account under the control of Merrill Lynch in the name of Fort or one of his companies or related entities.
Paragraph 7: Defendant Fort accepted and received the benefit of the funds credited to such securities, checking or trading account and is currently holding and utilizing, or has utilized, these funds properly belonging to Asian.
[3] Fort did assert a claim for damages against Asian for Merrill Lynch's refusal to release the funds in his account; however, Merrill Lynch was not made a defendant.
[4] In the Landry & Passman case, supra, a real estate salesman employed by Beadle, Swart-wood, Wall, & Associates (B.S. & W.) was claiming two real estate commissions from two sales of different properties by Landry & Passman. Landry & Passman and B.S. & W. had agreed to split the sales commission 50-50, and B.S. & W. had agreed to pay its salesman (Carson Davis) 30% of its fifty percent commission on each transaction.
Landry & Passman and B.S. & W. split the commission on the first sale, and before the commission was divided on the second sale, the B.S. & W. salesman made a claim against Landry & Passman for the commission allegedly due him on both transactions. Landry & Passman sought to invoke a concursus proceeding, impleading B.S. & W., its salesman, and a third party, who subsequently disclaimed any interest in the funds.
B.S. & W. answered conceding its indebtedness to its salesman as concerns the second transaction (the funds Landry & Passman held and which had not been distributed to B.S. & W.). B.S. & W. contested its salesman's right to litigate in the concursus proceeding the claim relating to the prior and totally unrelated sale of property. This court affirmed the trial court's dismissal of the concursus proceeding of this prior unrelated claim since it arose from a source different in origin from the transaction which generated the deposited funds.
Claimant was asserting an unliquidated claim as an unsecured creditor, which claim arose out of a transaction completely foreign to that which generated the funds involved in the concursus proceeding.
[5] See Footnote 2. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1376764/ | 467 F.Supp. 513 (1979)
MUNRO DRYDOCK, INC., Plaintiff
and
United States of America, Plaintiff-Intervenor
v.
M/V HERON, her engines, equipment, tackle, apparel and furniture and Associated Marine Services, Inc., Defendants.
Civ. A. No. 77-2329-T.
United States District Court, D. Massachusetts.
March 22, 1979.
Esdaile, Barrett & Esdaile, Charles W. Barrett, Jr., Charles J. Murray, Boston, Mass., for plaintiff.
Kneeland, Kydd & Handy, Frank H. Handy, Jr., Boston, Mass., for Marine Power and Equipment Corp.
Mary Brennan, Asst. U. S. Atty., Boston, Mass., and Emmett B. Lewis, Trial Atty., Admiralty & Shipping Section, Dept. of Justice, Washington, D. C., for the U. S.
Edward F. Harrington, New Bedford, Mass., for Edward Sanchez, Jr.
OPINION
TAURO, District Judge.
By remand of the Court of Appeals this court has been mandated to review *514 its September 15, 1978 order confirming the auction sale of the M/V Heron.[1] Consistent with that mandate, this court held an extensive evidentiary hearing in order to establish a precise record of the facts leading up to the sale and confirmation. Among those who testified were two appraisers called by the Government and one person appointed by this court as an impartial appraiser. As shall be demonstrated below, that hearing established that there was no basis for the material factual representations made to and relied upon by the Court of Appeals in issuing its remand order. This is particularly so with respect to the likelihood of an upset bid being filed.[2] Moreover, this court finds that the appraisal report presented to the Court of Appeals was unreliable.[3]
Under these circumstances, a detailed exposition of the facts established at hearing is both appropriate and necessary.
I.
Government's Representation as to an Upset Bid
On order of this court, the M/V Heron was offered for sale at public auction on September 12, 1978. Three bidders were among the approximately 10 persons present at the sale. The highest bid was proffered by one Edward Sanchez, Jr. (Sanchez) in the amount of $7500.
Two days later, on September 14, 1978, the United States, a preferred mortgagee, moved for a one week continuance of the confirmation hearing that had been scheduled for September 15, 1978. A hearing on the government's motion to continue was held on September 15, 1978. At that hearing, the Assistant United States Attorney acknowledged that there was no defect in any of the procedures leading up to the September 12, 1978 auction. The Government's request for a continuance was premised on the amount of the successful bid, "together with the fact that we have had representation made that there is a substantial possibility of an increased bid which will be substantially in excess of the appraised value . . .." (emphasis supplied).[4]
To that contention, this court responded:
Ten people disagree. The people who had to put their money up disagree. We deal with appraisers all the time. What it comes down to is the market price controls. The appraisers help us short of a sale. The best evidence of what value is, is when you get an arm's length purchase and sale. That's the best evidence of value I know.
In response, the Assistant U. S. Attorney stated:
[W]e're merely asking for a continuance to determine whether we should or should not object to the confirmation.
This court rejected the request for continuance, stating in part:
This bidder evidently went down there in good faith, took his chances with ten *515 other people who bid, and he got it. Now the fact that an appraiser had different ideas as to value than the ten people who had to put their own money up is interesting but not controlling. If you get any indication that there was some fraud or chicanery, . . . let me know and I think I would have the inherent power to set aside a sale that was fraudulent. If it is a fact that someone went down there and got a heck of a bargain, that's not a basis to set aside. He's entitled to rely on the representations made to him; if he bid fair and square he'd get it if he were the high bid, and he did and he got it.
The Government appealed, and on September 19 successfully sought a stay of this court's confirmation order from the Court of Appeals. On September 20, 1978, Judge Campbell held a hearing on behalf of the Court of Appeals in a conference room, during which a number of factual representations were made to him by counsel. Referring to that hearing, Judge Campbell's September 29, 1978, remand opinion stated:
[I]t was represented by the Government that a party who did not attend the judicial sale, having now inspected the vessel, had made a firm offer of $50,000 for it. . . . The upset bidder purportedly did not submit a bid at the auction because he did not develop a need for a vessel of this type until the last minute . . ..
585 F.2d at 14.
The Government's representation was contrary to fact. At the time of the hearing before Judge Campbell, no firm offer in any amount, let alone $50,000, had been made for the M/V Heron after the $7500 bid by Sanchez. Contrary to the representations made to Judge Campbell, therefore, there was no "upset bidder."
Further, there was no representation by the Government to this court at the confirmation hearing that "subject to an inspection currently underway, it had a likely upset bid in excess of $25,000." 585 F.2d at 15 (emphasis supplied). The Government's representation to this court at hearing was that "there is a substantial possibility of an increased bid which will be substantially in excess of the appraised value . . .."[5]
As a matter of fact, there was no alternate bid for the Heron, in any amount from any source, prior to the confirmation hearing on September 15, 1978. The only bids received by the Government, as alternates to that of Sanchez, were filed on September 30 and October 9 for $25,000 and $30,000 respectively. These bids postdated this court's confirmation order by more than two weeks and were filed after the Court of Appeals remand order.[6]
The underlying facts concerning the so-called upset bid are as follows.
On September 12, 1978, David Kaplan, an attorney experienced in maritime law, appeared before this court to request that the sale of the M/V Heron scheduled for that day be continued. Kaplan represented that certain foreign investors might be interested in bidding on the vessel. This court agreed to a continuation of the sale, subject to the assent of all parties to the foreclosure proceedings and all bidders at the sale. Kaplan went to the site of the sale and inquired whether there was any objection to a postponement. Sanchez objected. The sale took place as scheduled. Sanchez turned out to be the high bidder for $7500. Immediately thereafter, Kaplan asked Sanchez if he would be interested in selling the vessel. Sanchez responded affirmatively.
During the afternoon of the 12th, Kaplan telephoned Emmet Lewis, an attorney from *516 the U. S. Department of Justice representing the Government in this matter. Kaplan had spoken with Lewis earlier in the day to determine whether the Government objected to a continuance of the sale. The purpose of his second conversation of the day with Lewis was to inform him that Kaplan's principals were still interested in purchasing the Heron, but that a firm figure could not be proffered until his principals had a chance to inspect the vessel. The following day, September 13, an associate of Kaplan's informed Lewis that Kaplan authorized the Government to represent to this court that his principals would be prepared to bid substantially in excess of $25,000 for the Heron, assuming an inspection proved satisfactory.
At the September 15 confirmation hearing, the conversation between Lewis and Kaplan's associate served as the foundation for the Government's assertion that "we have had representation made that there is a substantial possibility of an increased bid which will be substantially in excess of the appraised value . . .." This court was unpersuaded by the Government's eleventh hour proffer of a possible improved bid. The Government's request for a continuance was denied, and the sale was confirmed.
Following the confirmation, Sanchez towed the Heron from Boston to his dock in New Bedford. Sometime thereafter, Sanchez told Kaplan that he was about to begin cutting up the vessel for scrap. Perturbed by these remarks, Kaplan hastened to New Bedford to try to negotiate a deal with Sanchez, having been forewarned by Lewis that the Government had requested a stay of the confirmation from the Court of Appeals. On the afternoon of September 19, 1978, Kaplan telephoned Lewis and advised, "I have just bought the vessel for $50,000." This conversation occurred shortly after the Court of Appeals had granted a 24 hour stay, and had scheduled a further hearing for September 20, 1978.
At the September 20 hearing, the Government represented to Judge Campbell that a firm $50,000 bid for the Heron had been made. 585 F.2d at 14. The alleged $50,000 bidder was Kaplan. In fact, however, Kaplan had not made a firm bid to either the Government or Sanchez for the Heron. What Kaplan had done was to pay Sanchez $5000 for an option to purchase the Heron for $50,000. That option agreement was in writing. It was available at the time of Judge Campbell's September 20, 1978, hearing, but was not brought to his attention.[7]
Further, the Government's brief, presented to Judge Campbell for his September 20 hearing, represented that, 1) a prospective purchaser had offered to buy the vessel from Sanchez; 2) that prior to this time, the same prospective purchaser had promised the Government that he would submit a firm written bid "substantially in excess of $25,000," assuming that the vessel was in satisfactory condition; and 3) that the vessel had been appraised for $25,000 scrap and $100,000 for use as a drilling ship.
All of these factors were emphasized by Judge Campbell in his opinion.
At the hearing on the stay, it was represented by the Government that a party who did not attend the judicial sale, having now inspected the vessel, had made a firm offer of $50,000 for it.
585 F.2d at 14.
Given an appraised value 200% greater than the sale price and the likelihood of an upset bid at least three times larger than the sale price (now appearing to be seven times greater), the district court exceeded its discretion in refusing even a *517 modest extension and in confirming the sale without further inquiry.
585 F.2d at 16.
Contrary to the assertions made orally and by brief to Judge Campbell, the evidence presented at hearing is uncontroverted that there was never an offer of $50,000, or any other price, made to either the Government or Sanchez for the Heron. All that Kaplan did was pay Sanchez, not the Government, $5000 for an option to purchase the Heron for $50,000. Kaplan was, and is, under no obligation to consummate the purchase.
Moreover, the record now establishes clearly that the Government's representation to this court on September 15, as to the possibility of an upset bid, was evasive and certainly inconsistent with representations made to Judge Campbell. At the hearing on the confirmation of the sale on September 15th, the Assistant United States Attorney told this court there was "a substantial possibility of an increased bid which will be substantially in excess of the appraised value . . .." Language contained in the motion to continue the confirmation date, filed September 14, stated that if a survey of the vessel indicated it to be in acceptable condition, interested purchasers would be prepared to make a firm upset bid of $25,000. This language suggested a greater likelihood of an upset bid than the representations of the Assistant United States Attorney made the next day at the confirmation hearing.
The record is now clear that the Government did not represent to this court on September 15, 1978, that "within a week's time it would be able to present the court with an `upset' bid in excess of $25,000." 585 F.2d at 14. Nor was it represented that "subject to an inspection currently underway, it had a likely upset bid in excess of $25,000." 585 F.2d at 15. To the contrary, the evidence demonstrates that any possible upset bid was not conditioned simply upon a favorable inspection of the vessel. Kaplan's principals inspected the Heron on September 14 and September 15, a circumstance this court was not informed of at the September 15 hearing. Despite these apparently favorable inspections, Kaplan, the "likely upset bidder," has yet to come forward with a firm offer at any price, let alone either $25,000 or $50,000.
As of September 15, the date of the confirmation hearing, the Government's only basis for predicting an upset bid was the vague oral statement of a former law partner of an attorney who was attempting to purchase the vessel for certain undisclosed foreign buyers. As Judge Campbell suggested in his remand opinion, an evasive upset bid, coupled with an undocumented appraisal, would not be sufficient to set aside a confirmation of sale. Judge Campbell cited a recent 5th Circuit case, Wong Shing v. M/V Mardina Trader, 564 F.2d 1183 (5th Cir. 1977), as an example of a case involving an "evasive" upset bid.
In Wong Shing, the court declined to set aside a district court's confirmation of an auction sale to the highest bidder ($610,000). There had been some evidence of a potential upset bid more than twice that of the successful bid, and that the fair market value of the vessel was three times greater than the successful bid. Central to the 5th Circuit's decision was the evasive character of the potential upset bid. There, an attorney representing an undisclosed syndicate, had indicated that, subject to an inspection, his clients would be willing to pay "in excess" of a million and a half dollars for the vessel. 564 F.2d at 1188. That factual pattern is materially indistinguishable from the underlying circumstances in this case.
This court concludes, therefore, that there was never a likely upset bid for the Heron. At most, there was an expression of interest in the Heron after it had already been sold to the high bidder at a public auction that was conducted without defect. Any evidence of an upset bid which the Government could have presented in support of its motion to continue would have been evasive under the Wong Shing analysis.
II.
The Appraised Value
An additional factor relied on by Judge Campbell in his remand opinion was the *518 facial disparity between the Government's presale appraisal of the Heron and the high bid at auction sale.
[T]here was a substantial disparity both between the appraisal and the sale price, and between the likely upset bid and sale price.
585 F.2d at 15.
In March of 1978, this court, at the Government's request, appointed Mr. Raymond Kershaw to appraise the M/V Heron in preparation for its judicial sale. Kershaw valued the Heron at $25,000 for scrap and $100,000 as an operating vessel. At the time of his appraisal, Kershaw was unaware that the Heron had formerly been part of the National Defense Reserve, and was consequently subject to certain use restrictions: 1) a buyer could not use the vessel as a means of transporting passengers or cargo; or 2) a buyer, within twenty-four months after the date of delivery, would have to scrap the hulls of the vessel.
The Government had also been unaware that the Heron was subject to these restrictions and, on August 18, 1978, moved this court to impose them as a condition of the sale scheduled for September 12, 1978. The motion was granted. There is no dispute that the vessel was sold subject to the restrictions.
It is now clear, after hearing, that the Heron has no value as an operating ship. In fact, the government concedes that it is doubtful whether there is an active market for the vessel for this purpose. Consequently, the Heron has practical value only as scrap.
Three appraisers testified as to value. Kershaw and Harold Chait were called for the Government. Robert Vorel was appointed by this court as an impartial expert. Before evaluating their testimony, it is helpful to consider several relevant characteristics of the the ship scrapping industry.
The process of buying, scrapping and marketing the saleable parts of a ship like the Heron is referred to in the trade as "ship-breaking." In order to make a profit, a ship-breaker must have the resources to purchase, remove, scrap and market. Sanchez, the high bidder, had these resources to at least some degree. The number of shipbreaking operations having comparable resources necessary to scrap a vessel like the Heron is extremely limited. Kershaw could only recall one operation in the Boston area that scrapped vessels, and he was not entirely sure that it was still in the shipbreaking business. In fact, there is only one company on the East Coast Boston Metals of Baltimore, Maryland that is in the business of scrapping, advertising and selling on a national scale.
Ship-breaking is a speculative business. Chait, an employee of Boston Metals, was the Government's second appraiser. He testified that he estimates scrap value "by the seat of my pants," and that an appropriate measure of fair market value for a vessel like the Heron would be a sum that would yield a rate of return of 200% after the scrapped parts had been resold.
The speculative character of ship-breaking is also underscored by the absence of a predictable market for the scrapped materials that are to be resold. As noted above, Boston Metals is the largest ship-breaker on the East Coast. It has a national marketing and advertising program and an international reputation. Yet even Chait, an employee of Boston Metals, was not prepared to state that his company, if notified, would have been prepared to make a bid for the Heron. As he stated: "It would depend on market conditions." Vorel, the appraiser appointed by this court, felt that it was "purely speculative" as to whether there was any market for some of the equipment on the Heron. Kershaw felt the sale of some of the Heron salvage "would be slow." Chait acknowledged that some of the equipment might have to be held for a year and a half.
Kershaw estimated a scrap value of $25,000 for the Heron. By his own admission, this was a "rough figure." Unlike the other two appraisers in this case, Kershaw did not break down his estimate on an item by item basis. Additionally, he did not factor in the cost of taking the vessel apart, keeping *519 it in a berth until all scrap was sold,[8] and, if necessary, sinking the hull. Although Kershaw felt that a $25,000 purchaser might be able to sell the scrap of the Heron at a healthy profit, his testimony on this point was vague. All in all, the court was not persuaded by Kershaw's testimony and, therefore, rejects his scrap appraisal figure of $25,000.
Chait, executive vice-president and general manager of Boston Metals, appraised the Heron's scrap value at $33,000[9] after a one-hour inspection on the morning of November 14, 1978. He concluded that the Heron's machinery could be put in good working order with minor repairs. Chait, however, did not conduct any tests of the machinery.
While Mr. Chait's figure of $33,000 might well be indicative of what a large company like Boston Metals might pay for the Heron, it is not a reliable indicator of fair market value at a judicial sale. First, Chait's analysis did not include any allowance for storage costs. As he stated: "I can absorb the storage." While Boston Metals, the largest ship-breaker in the east, might well be able to "absorb" the storage costs, a smaller scale bidder would more likely arrive at a reasonable bidding price by factoring in some cost of storage.
Second, Chait's figures included the scrap value ($31,800) of the ferrous and nonferrous metals on the Heron. It is clear that this figure included the scrap value of the deck and hull, which Chait obviously felt could be sold profitably. In this respect, his testimony conflicts with the two other appraisers who testified that it would be unprofitable to cut up and scrap the deck and hull. This court finds it unlikely that any ship-breaker, other than Chait's company, could profitably cut up and scrap the deck and hull.
Finally, it is clear that Chait's appraisal was referenced primarily to what his large company could expect to make in profits from scrapping the Heron. He conceded that scrappers smaller than Boston Metals would not have the capacity to market the machinery with comparable success. Toward the end of his testimony, he expressed some doubt whether a ship-breaker like Sanchez could get the same prices he could, stating, "Mr. Sanchez basically is not in the marketing business."
Fair market value has been defined as what "a willing buyer would pay in cash to a willing seller." United States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 280, 87 L.Ed. 336 (1943). If the term is to have any meaning at all, it is clear that unique attributes of a particular potential purchaser may not be considered in determining fair market value.[10] To hold otherwise would restrict the pool of purchasers at judicial sales to only the largest or most sophisticated concerns. In the area of ship-breaking, the number of possible purchasers might well be limited to one Boston Metals. The court finds that Chait's appraisal was too limited by its reliance on what profit Boston Metals could make on the Heron to be a sound basis for a finding of value by this court. It is, therefore, rejected.
*520 Vorel's testimony was most persuasive. His five page report evidenced a detailed knowledge of the value of marine equipment in general, as well as a careful analysis of the Heron in particular. Vorel concluded that the Heron had no value as an operating vessel. He also concluded that, under all the circumstances, the scrap value of the Heron was what a prudent purchaser was willing to offer on a given day. The approximate range of its scrap value, he felt, was between $7255.80 and $16,500.00. The low figure was based upon an analysis of scrap values on a per tonnage basis of several vessels listed in the June 15, 1978, Marine Engineering Log. The high figure was based upon an itemization of the value of the Heron's machinery.
Vorel's appraisal contained analysis not found in the reports of the other two appraisers. Unlike Chait, he felt that the condition of the machinery was "at best poor." Vorel arrived at this conclusion after learning that the vessel had been unattended for the past three years with no winterization or preventive maintenance having been performed. Facts such as these, to which a bidder at a judicial sale might well have access, are highly significant in determining fair market value in the setting of an auction sale where there is usually no opportunity for a bidder to start the machinery to see if it is functional. The parties have stipulated that there was no opportunity to test the equipment at the Marshal's sale of the Heron on September 12.
Additionally, Vorel noted in his report that during the three years that the Heron was stored at the Munro Drydock yard, it was continually advertised for sale and that only one party expressed any interest. His report also stated that if Munro Drydock, a company intimately familiar with the Heron, had the time to invest in a ship-breaking project, it would have been prepared to enter a bid of $10,000.[11]
An analysis of the three reports of appraisal leads this court to the following conclusions. Ship-breaking is a highly speculative venture with success dependent on such uncertain factors as unpredictable day to day need for used machinery, as well as the actual condition of the machinery on the vessel to be scrapped. Because of the speculative nature of ship-breaking, even the most sophisticated concern anticipates a 200% rate of return when deciding upon a reasonable bid. Additionally, the number of ship-breakers is extremely limited in light of the fact that the breaker must be in a position to provide a number of services, including towing, storage, scrapping and marketing. The court finds that Sanchez's bid was well within the range of expected bids for a vessel of this type, given the uncertain condition of its equipment. The court also concludes that the most accurate indicator of market value under the circumstances unique to this specialized field is exactly what the highest prudent bidder would be willing to offer on a given day.[12]
III.
In summary, therefore, this court determines that the September 12, 1978 judicial *521 sale was conducted properly; that Sanchez was the high bidder at $7500; that there was no upset bidder prior to confirmation; that Government representations as to an upset bid were inaccurate and evasive; that the Government's presale appraisal was unreliable; that Sanchez's bid was not in substantial disparity with the fair market value of the Heron at the time of the auction sale.
As Judge Campbell stated:
The policy of inspiring confidence in sales under supervision of the court favors confirmation of a sale made to the highest bidder at a fairly conducted public auction.
585 F.2d at 14. Indeed, for this court to deny confirmation under the circumstances of this case, established after evidentiary hearing, might well be an abuse of discretion. See In re Gil-Bern Industries, 526 F.2d 627, 629 (1st Cir. 1975).
The order of sale to Edward Sanchez, Jr. is confirmed.
An order will issue.
NOTES
[1] We therefore vacate the order of confirmation and remand this case to the district court for action not inconsistent herewith. Most probably such action will take the form of ordering a new sale but we refrain from giving explicit directions, since we think the district court should retain discretion to take appropriate action, not inconsistent herewith, in light of any changes in circumstances or additional facts that may be brought out.
Munro Drydock, Inc. v. M/V Heron, 585 F.2d 13, 16 (1st Cir. 1978).
[2] An upset bid is a bid which is filed following the first judicial sale and which is in excess of the highest bid offered at that sale. In most instances the bid is filed prior to the hearing to confirm the sale. See, e. g., Wong Shing v. M/V Mardina Trader, 564 F.2d 1183, 1188 (5th Cir. 1977) ("Until confirmation, a sale in admiralty may be set aside at any time, . . .."); American Tramp Shipping & Development Corp. v. Coal Export Corp., 276 F.2d 570 (4th Cir. 1960).
[3] The standard relied upon by the Court of Appeals in vacating the court's confirmation order was that "if there are very major disparities between the high bid at the sale and both the appraised value and upset bid, confirmation should be withheld . . .." 585 F.2d at 16.
[4] Neither the Government nor any other creditor elected to protect themselves by bidding in at the sale.
[5] The term "likely" is synonymous with "probable." That there is a substantive difference between a probability and a possibility is clear beyond the necessity for citation.
[6] This court views its duty upon remand as essentially retrospective to determine if there was even a substantial likelihood of an upset bid at the time the Government requested that confirmation be postponed. To do otherwise would be to ignore the reasonable expectations of the high bidder, thereby impairing public confidence in the regularity of judicial sales. As Judge Campbell noted, "It is important, in the ordinary case, to honor the expectations of those bidding at the sale." 585 F.2d at 16. There is nothing extraordinary about this case.
[7] In relevant part, the contract between Sanchez and Kaplan stated:
"Kaplan" agrees to pay five thousand ($5,000) dollars upon the signing of this agreement to be credited to the selling price if "Kaplan" takes title to the said vessel in or within fifteen (15) days.
If "Kaplan" elects not to take title to the vessel as stated above, the $5000 deposit shall be retained by "Sanchez" as liquidated damages and no further cause of action shall be brought by either Party.
[8] The cost of keeping the Heron in a berth is substantial. When it was berthed in Boston, the charge was $50 per day.
[9] Chait arrived at a scrap appraisal figure of $33,000. He did so by estimating the gross revenue from the sale at $129,750 and subtracted therefrom $38,500, his estimate of what it would cost to reduce the vessel to scrap. This left a figure of $91,250. He then applied a profit factor of approximately 200% to that figure in order to determine fair market value.
[10] In United States v. Miller, supra, the Court set up guidelines for the determination of fair market value in the eminent domain area.
The Court noted:
[S]trict adherence to the criterion of market value may involve inclusion of elements which, though they affect such value, must in fairness be eliminated in a condemnation case, as where the formula is attempted to be applied as between an owner who may not want to part with his land because of its special adaptability to his own use, and a taker who needs the land because of its peculiar fitness for the taker's purposes. These elements must be disregarded by the fact finding body in arriving at "fair" market value.
317 U.S. at 375, 63 S.Ct. at 280.
[11] The court discounts any reliance placed by Vorel on the purchase by Boston Metals of three other vessels similar to the Heron at an average price of $12,000. Vorel's information, received from a source at Boston Metals, was apparently inaccurate, through no fault of his own. Chait testified that Boston Metals actually paid $26,666, $28,666 and $33,666 for these three vessels. There was no indication that these three vessels were left unattended for the same length of time as the Heron. In any event, Vorel's appraisal had sufficient independent basis to stand, irrespective of any reliance he may have placed on the figures given to him in error by Boston Metals.
[12] In light of this finding, the Government's contention that the sale to Sanchez should not be confirmed because it now has two higher bids has no merit. Judge Campbell's opinion specifically stated that confirmation should be withheld only if "there are very major disparities between the high bid at the sale and both the appraised value and upset bid, . . .." 585 F.2d at 16 (emphasis supplied). There was no disparity between Sanchez's timely bid and the only appraisal this court finds reliable, that of Vorel. The fact that higher bids were submitted long after confirmation is irrelevant to the issues of this case. See also In re Gil-Bern Industries, 526 F.2d 627, 629 (1st Cir. 1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1878174/ | 285 So.2d 113 (1973)
In re Robert LEE
v.
Myra LAYTON.
Ex parte Myra LAYTON.
SC 488.
Supreme Court of Alabama.
September 20, 1973.
Ralph Slate, Decatur, for petitioner.
No brief for respondent.
McCALL, Justice.
Petition of Myra Layton for Certiorari to the Court of Civil Appeals to review and revise the judgment and decision of that Court in Lee v. Layton, 51 Ala.App. , 285 So.2d 108.
Writ denied.
HEFLIN, C. J., and COLEMAN, BLOODWORTH and JONES, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2062667/ | 629 A.2d 496 (1993)
James COWAN, Appellant,
v.
UNITED STATES, Appellee.
No. 90-CF-327.
District of Columbia Court of Appeals.
Argued November 16, 1992.
Decided July 29, 1993.
*497 Richard S. Greenlee, Public Defender Service, with whom James Klein, Public Defender Service, was on the brief, for appellant.
Mary-Patrice Brown, Asst. U.S. Atty., with whom Jay B. Stephens, U.S. Atty. at the time the brief was filed, and John R. Fisher, Asst. U.S. Atty., were on the brief, for appellee.
Before ROGERS, Chief Judge, and SCHWELB and SULLIVAN, Associate Judges.
SCHWELB, Associate Judge:
Cowan was convicted by a jury of felony murder while armed, D.C.Code §§ 22-2401, -3202 (1989), second degree murder, id.,[1] § 22-2403, carrying a pistol without a license (CPWOL), id. § 22-3204, and attempted distribution of cocaine, id., § 33-541(a)(1) (1988). He seeks reversal of all of these convictions, primarily on the ground that the trial judge refused to instruct the jury on self-defense and defense of a third person. Cowan never requested an instruction as to that defense with respect to second-degree murder, CPWOL, or attempted distribution; indeed, on this record, such an instruction has no conceivable application to the latter two offenses. Cowan did request the judge to instruct the jury on self-defense and defense of another with respect to felony murder, but sought these instructions only if the judge also instructed on aiding and abetting, as requested by the prosecution. The judge never gave an aiding and abetting instruction, and the condition under which Cowan had requested the instructions on self-defense and defense of a third person never materialized. We conclude that the judge's refusal to instruct on these defenses was not "plain error," and that even if the issue had been preserved, any error would have been harmless.
We note, sua sponte, that "[w]hen there is only one killing, the defendant may not be convicted of more than one murder." Thacker v. United States, 599 A.2d 52, 63 (D.C.1991). Accordingly, we must remand the case for resentencing, with directions that the trial court vacate one of Cowan's two murder convictions. In all other respects, we affirm.
I.
THE FACTS
In the early morning hours of November 20, 1986, in this city's macabre drug underworld, one young life was snuffed out, and two others were effectively ruined. James ("Wop") Cowan was then eighteen years of age. Sammie Giles, Cowan's codefendant, who later entered a plea of guilty to second-degree murder and became the prosecution's lead witness, was only sixteen.
Giles' account of the relevant events at Cowan's trial was a testament to the cheapness of life in the milieu in which he and *498 Cowan moved;[2] the banality of the episode underlines its unremitting horror. Two teen-agers walked out into the streets of the city with cocaine to sell and a loaded pistol to guard their drugs and money. Their victim, a prospective buyer, was apparently shot dead because he argued with Giles and placed his hand in his pocket. Realistically, we are told, he who draws last in such an encounter may not survive.
According to Giles, he and Cowan were at Giles' apartment, watching the movie "Scarface" and packaging crack cocaine for sale. They left the apartment to market the crack in the courtyard of the complex. Giles carried the drugs; Cowan, who was there to provide protection, was armed with a loaded .38 caliber revolver. The decedent, Anthony Knox, approached Giles and asked for cocaine. A dispute apparently arose over the price (or possibly the quality) of the drugs. Knox reached in his pocket and said "give me everything." Giles testified that Cowan told him to "duck, soldier," and then shot Knox.[3] According to Giles, the two youths fled; Cowan then stuck a revolver in Giles' mouth and threatened to shoot Giles if he reported what had occurred.
There was additional testimony to support the prosecution's theory that Cowan, and not Giles, shot Knox. Sixteen-year-old Tina Duvall, Giles' cousin and Cowan's former girlfriend, testified that the two young men had left the apartment together, with Cowan carrying a revolver. Upon their return following the shooting, according to Ms. Duvall, Cowan said that he "shot the guy because he was getting ready to stick up one of [my] soldiers." Lillian Holcomb testified that, although high on drugs, she had witnessed the shooting and that Cowan had shot the decedent after "the guy" put his hand in his pocket.
The defense presented no evidence, but vigorously attacked the credibility of the prosecution witnesses and attempted to show, through their testimony, that it was Giles, and not Cowan, who shot Knox. Giles was impeached with alleged discrepancies between his trial testimony and the accounts which he had provided to the grand jury and to the judge who took his plea; he also acknowledged that he sometimes carried a handgun.[4] The murder weapon had been recovered under a mattress in Giles' apartment; according to Ms. Duvall, however, both Giles and Cowan stayed in the room where it was found.
Ms. Holcomb was impeached with her grand jury testimony that it was Giles who did the shooting and with other alleged inconsistencies in her accounts. Her credibility was also challenged on the basis of her drug use and her possible motivation to curry favor with the government in connection with pending drug charges. Ms. Duvall was also impeached with allegedly inconsistent prior statements; she, too, admitted that she used cocaine in November 1986 and that Sammie Giles sometimes supplied her with drugs.
At the conclusion of the prosecution's case, defense counsel moved for a judgment of acquittal (MJOA). The defense argued, with respect to the murder charges, that Cowan had acted in self-defense. The judge denied the motion as to all counts except first-degree murder. With respect to that charge, the judge ruled that the prosecution had not proved premeditation. He granted the MJOA, but referred the lesser-included offense of second-degree murder to the jury.
*499 Prior to closing argument, the court and counsel had extensive discussions, which are described in detail in Part II of this opinion. With respect to the felony murder count, the judge agreed to instruct the jury, as requested by the government, on aiding and abetting, essentially on the theory that if Cowan participated in the attempted distribution, he could be convicted of felony murder even if it was Giles who shot Knox. The judge also agreed to the defense request that, if (but only if) an aiding and abetting instruction were given, the jury be instructed on self-defense and defense of a third person.
When counsel presented their closing argument, however, Cowan's attorney made no mention of self-defense or defense of a third person. Indeed, he focused entirely on the theory that Giles, not Cowan, was the shooter. After further discussion, the judge decided that he would not instruct the jury either with respect to aiding and abetting or with respect to self-defense or defense of a third person. Cowan was convicted on all four remaining counts. This appeal followed.
II.
THE DEFENSE REQUEST FOR INSTRUCTIONS ON SELF-DEFENSE AND DEFENSE OF A THIRD PARTY
A. Background
In order to determine whether Cowan has preserved for appeal the question whether the jury should have been instructed on self-defense or defense of a third person, it is necessary to set forth the context in which the issue arose and the respective strategies employed by counsel for both sides.
The prosecution's basic theory, as we have seen, was that Cowan shot Knox; Giles was viewed as an aider and abettor. Cowan's defense, on the other hand, was that Giles was the shooter, that Cowan was innocent, and that the prosecution had not proved that Cowan was even present on the scene. The government countered this defense with an alternative theory that, even if Giles was the person who shot Knox, Cowan was aiding and abetting Giles in the attempted distribution of cocaine, and was thus guilty of felony murder. Based on this alternative theory, which was applicable only to the felony murder count, the prosecutor requested the judge to instruct the jury with respect to the law of aiding and abetting.
Cowan's attorney objected, not without reason, that the prosecution's alternative theory had not been presented to the grand jury and could not now be invoked at trial. Counsel also requested that if, but only if, the judge instructed on aiding and abetting, that he also instruct the jury, with respect to the felony murder count, as to self-defense and defense of a third person. In the absence of an instruction on aiding and abetting, the defense wanted no instruction whatever on self-defense or defense of a third person.
There were obvious strategic reasons which dictated defense counsel's caution. Cowan's attorneys understandably apprehended that, if these defenses were emphasized, the jury might assume that Cowan was the shooter, and that this might dilute and detract from the basic defense theory that it was Sammie Giles who shot the decedent. Indeed, one of Cowan's attorneys candidly acknowledged her concern:
I think the problem with that is it makes the defense sound like we're telling you we didn't do it, but if you think we did it then we have another reason, and that sounds bad.
* * * * * *
[Self defense] shouldn't be put as being our theory, because it makes it look like we're trying to pull the wool over the jury's eyes.
(Emphasis added.)
To avoid this impression, the defense had to tread very cautiously. Counsel therefore made two important strategic decisions. First, the defense would seek the instructions on self-defense and defense of a third person only if the prosecutor's request for an aiding and abetting instruction *500 was granted, and even then, only as to felony murder; this was because the prosecutor's aiding and abetting request was based on the theory that Giles did the shooting, and was thus potentially helpful to Cowan's basic defense. Second, Cowan's attorneys did not want the judge to include self-defense or defense of a third person in his instruction on the defense theory of the case; rather, they wanted this issue to appear to emanate from the judge, not from the defense.
B. Discussions Prior to Closing Argument
It was the government's secondary theory that Cowan was guilty of felony murder as an aider or abettor even if Giles did the shooting that triggered defense counsel's limited request for instructions on self-defense and defense of another:
THE COURT: Well, they are asking for self-defense.
MR. COBB [prosecutor]: I don't know.
THE COURT: They are.
MS. SUPLER [defense counsel]: Your Honor, that would only be if the court allows the government to argue and give the instruction of the aiding and abetting theory for a felony murder. If the court doesn't then no. Our theory is that we did not do the shooting, therefore, we're not guilty for that reason alone. And we wouldn't need the self-defense or a defense of other instruction. Because, remember, we are asking the Court not to couch it in that the defendant used self-defense, but if the shooter used self-defense. See, that's perfectly consistent with our theory. If the court doesn't allow the aiding and abetting argument by the government, then we don't need those instructions because our defense is that we weren't the shooter. It was Sammy Giles.
(Emphasis added).
When the judge expressed some bewilderment, Cowan's attorney explained that "if Mr. Giles shot in self-defense, and we can also be guilty because of his shooting, then we get the transferred self-defense intent." Counsel continued as follows:
James Cowan did not have a gun in his possession and did not participate in a drug transaction. And, then, if the and only if the court is going to allow the government the aiding and abetting theory on the felony murder, then we'll ask for the three instructions in the order I presented with the language I presented.
(Emphasis added).
The trial judge fully understood, and counsel for both parties agreed, that the government's request for an aiding and abetting instruction was limited to the felony murder count, and that the request for instructions on self-defense and defense of a third person were similarly limited (and also conditioned on the aiding and abetting instruction):
THE COURT: Second degree murder only if the jury finds beyond a reasonable doubt that it was Cowan that did the shooting.
MR. COBB: Yes.
THE COURT: Now, insofar as the felony murder, I will give aiding and abetting on it, government's theory that Cowan did the shooting, the defendant's theory that Giles did the shooting, but in any event, in any event, if Giles did the shooting or whoever did the shooting, it was done in self-defense, either of the person or of the other person.
All right?
MS. SUPLER: That's correct.
(Emphasis added).
At no time prior to closing argument did the defense ask for an instruction on self-defense or defense of a third person with respect to any offense other than felony murder. Moreover, Cowan's attorney emphasized several times that she did not want these instructions to be given if the court did not instruct on aiding and abetting. This was the posture of the case when counsel delivered their closing arguments.
*501 C. The Closing Arguments and the Discussions that Followed
During his closing argument, the prosecutor argued that Cowan shot Knox. He also told the jurors, however, that the judge was going to instruct them on the defense theory that Giles was the shooter. On that hypothesis, the prosecutor explained that if the two defendants were working in concert, Cowan could be guilty of felony murder as an aider an abettor. In spite of the earlier exchanges between court and counsel about self-defense and defense of a third person, however, Cowan's attorney mentioned neither of these theories when it was his turn to present his final argument.
Upon the completion of the closing arguments, the judge and the attorneys revisited the question of the instructions. Cowan apparently[5] takes the position that, during the course of these post-argument discussions, his attorneys changed their earlier position and asked unconditionally for instructions on self-defense and defense of a third person, whether or not the judge ultimately instructed on aiding and abetting. The record does not bear him out.
Cowan's attorney suggested to the judge, in connection with the felony murder instruction, that "the court should say purposefully kills a human being without justification because of our possible self-defense case." The judge responded that "I don't know where you got self-defense...." He complained that
I don't know what you're saying. The guy wasn't there, that he didn't do anything, and that Giles did it. I just don't know what your position is.
Cowan's attorney explained that
we would ask for the self-defense instruction that we asked and [the] government asked after the theory of defense instruction.
(Emphasis added). Evidently, the defense request remained the same as it had been prior to closing argument.
The prosecutor complained, however, that Cowan's attorneys had not mentioned self-defense in closing argument, but that they were nevertheless inconsistently seeking an instruction on that theory. Defense counsel immediately countered with the same position which she had taken prior to closing argument:
MS. SUPLER: Your Honor, our position is that Sammy Giles did the shooting. Now the jury can find either that we weren't out there in which case they are not going to need to worry about self-defense. But they could find that [we] were out there. They could find that we're guilty of the attempt distribution but find that Sammy Giles had a self-defense claim and, therefore, we should have the right to that as well.
(Emphasis added).
The judge then indicated that, if there was to be a self-defense instruction, it should be a part of the defendant's theory of the case. Defense counsel demurred, because
the jury could find that they could not believe our theory of the defense. And if they choose not to believe our theory of defense that Sammy, Sammy Giles shot it, then they could also believe that our client shot in self-defense....
(Emphasis added). The italicized phrase represents the first occasion in which a self-defense claim was articulated by the defense outside the context of aiding and abetting.
The judge, however, was not persuaded. He indicated that if the defense attorneys did not want self-defense and defense of a third person to be a part of the defendant's theory of the case, he would not instruct on those defenses. Cowan's attorney remonstrated that since she was contending that Giles was the shooter, it would "sound *502 bad" to make self-defense an alternative defense theory of the case. The attorney then made the argument on which Cowan now primarily relies as proof that his point was preserved:
MS. SUPLER: No, Your Honor, because when there when self-defense is raised in a case, when the defense has met [its] prima facie burden, which we have here, because we have a right to the instruction, then it becomes an element the government has to disprove. So it doesn't have to be our theory of defense. But they still have to disprove it, because it has been raised. And, so, the court shouldn't say that it's our, that it's an alternative theory. Because it's not. It's an element that the government must disprove. And, so, it should be almost like another element.
(Emphasis added).
If this passage stood alone, one might reach the conclusion that counsel had changed her previous position and was now asking for self-defense and defense of a third person instructions for second-degree murder as well as for felony murder, and that she wanted the judge to give those instructions independently of any question of aiding and abetting. On the very next page of the transcript, however, Cowan's attorney dispelled any such notion, and reiterated that her request was limited to felony murder and was still conditioned on the judge's also instructing the jury on aiding and abetting. She stated that proof that the shooting was not done in self-defense or defense of another has become "another element to the felony murder, not to the second degree murder because we aren't claiming self-defense at all there...." (Emphasis added). The judge ultimately decided not to instruct at all on self-defense or defense of a third person. He also declined to instruct on aiding and abetting.
D. Legal Considerations
Rule 30 of the Superior Court's Rules of Criminal Procedure provides in pertinent part as follows:
No party may assign as error any portion of the charge or omission therefrom unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which that party objects and the grounds of the objection.
In the absence of a timely objection, a conviction may be reversed only for plain error. Watts v. United States, 362 A.2d 706, 708-09 (D.C.1976) (en banc). Plain error contemplates a clear showing of a miscarriage of justice. Hunter v. United States, 606 A.2d 139, 141 (D.C.1992).
There is no evidence that Cowan ever requested an instruction on self-defense or defense of another with regard to the charges of second-degree murder, attempted distribution of cocaine, or CPWOL. Such instructions have no conceivable relevance to the drug and weapons counts, and Cowan's attorneys repeatedly disclaimed any interest in self-defense or defense of a third person in relation to the second-degree murder charge. Cowan's request that we reverse these three convictions is totally lacking in merit.
His position is not appreciably more persuasive with respect to his felony murder conviction. On several occasions prior to closing argument,[6] defense counsel unambiguously stated that they were requesting instructions on self-defense and defense of a third person only if the judge gave an "aiding and abetting" instruction on felony murder. In doing so, Cowan's attorneys invited the judge not to instruct *503 on self-defense and defense of a third party if no aiding and abetting instruction was given. Courts are especially reluctant to reverse for plain error when it is "invited." United States v. Mangieri, 224 U.S.App. D.C. 295, 305, 694 F.2d 1270, 1280 (1982).
After closing argument, Cowan's attorneys essentially reiterated the position which they had taken previously. At the very least, they did not clearly change it. On one occasion, to be sure, counsel spoke about self-defense even if Cowan was the shooter, but she did not revise her prior request to charge. She also suggested that a showing that a defendant did not act in self-defense or in defense of another is in effect an element which the prosecution must prove. On the very next page of the transcript, however, counsel reiterated that she was not seeking a self-defense instruction for second-degree murder, an offense which did not involve aiding or abetting.
Rule 30 precludes reversal of Cowan's conviction for alleged instructional error unless he stated his thesis in the trial court distinctly. See Britton v. United States, 112 U.S.App.D.C. 207, 208, 301 F.2d 531, 532 (1962) (per curiam). Cowan having clearly and unambiguously linked self-defense and defense of a third person with aiding and abetting, it was surely incumbent upon his attorneys, if they were changing their position, to make that change plain and unambiguous, so that the judge could readily understand it. As we recently noted in Hunter, supra, 606 A.2d at 144,
[o]bjections must be made with reasonable specificity; the judge must be fairly apprised as to the question on which he is being asked to rule. Points not asserted with sufficient precision to indicate distinctly the party's thesis will normally be spurned on appeal.
Nowhere in this record did Cowan's attorneys state "distinctly," with "reasonable specificity," or with "sufficient precision" that their initial (and carefully conceived) position had become inoperative, and that they were now requesting self-defense and defense of a third person instructions unconditionally and across the board. Since the judge never gave an aiding or abetting instruction, the event upon which Cowan's instructional request was conditioned never materialized. Accordingly, his objections in this court to the charge as given must fail, for "parties may not assert one theory at trial and another on appeal." Hackes v. Hackes, 446 A.2d 396, 398 (D.C.1982).[7]
III.
HARMLESS ERROR ANALYSIS
Even if Cowan had adequately preserved as an issue the judge's failure to instruct on self-defense or defense of another which he did not we are satisfied that, under the unique circumstances of this case, any error would have been harmless.
Cowan's attorney did not mention these defenses during his entire closing argument. If the judge had instructed as the defense conditionally requested, the jurors would have heard no more than a recitation of principles of self-defense or defense of a third person, with no presentation from counsel as to how these principles applied to the present case. Given the position taken by Cowan's attorneys, the discussion would in all probability have appeared to the jurors to be essentially irrelevant to the controversy as defined by the parties.
Moreover, as our discussion in Part II of this opinion reveals, Cowan's attorneys recognized that the subject of self-defense and defense of another was a dangerous one for them because it compromised their basic position that Cowan did not shoot Knox, and that perhaps he was not even on the scene. In other words, in the absence of an aiding and abetting instruction, defense counsel themselves wished, at least initially, to avoid any instructions on self-defense or defense of another because of the danger *504 that such instructions would hurt, rather than help, Cowan's case. The defense was conducted by experienced and able attorneys from the Public Defender Service, whose own repeated disavowal of the proposed instructions which Cowan now claims the judge should have given itself suggests that the failure to give them was harmless. See Hunter, supra, 606 A.2d at 145; Parks v. United States, 451 A.2d 591, 613 (D.C. 1982), cert. denied, 461 U.S. 945, 103 S.Ct. 2123, 77 L.Ed.2d 1303 (1983).
Accordingly, even if the judge's refusal to give the instructions at issue had been error, we are able to say "with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error." Kotteakos v. United States, 328 U.S. 750, 765, 66 S.Ct. 1239, 1248, 90 L.Ed. 1557 (1946).[8] We, therefore, also affirm on this alternative ground.
IV.
RESPONSE TO DISSENT
Our dissenting colleague accuses the majority of selectively quoting "isolated passages" from the record and, in particular, of ignoring the existence of the two competing scenarios that preoccupied counsel at the time jury instructions were being discussed, the first scenario being that Cowan shot Knox and the second being that Giles was the shooter. Curiously, she also invokes as support for her position comments made by defense counsel not at the time jury instructions were being discussed, but at the time the defense successfully moved for a judgment of acquittal as to first-degree murder.
With respect to the allegations of selective quotation, the majority opinion includes a discussion of everything of which we are aware that defense counsel said on the critical subjects, namely whether the instruction on self-defense and defense of a third party were being sought conditionally or unconditionally and whether counsel wanted these instructions to apply to any charge other than felony murder. Chief Judge Rogers claims somewhat vaguely that the positions of counsel evolved as the trial proceeded, but her opinion does not contain a single passage from the record in which Cowan's attorneys clearly (or even implicitly) requested these instructions at all for second-degree murder, or unconditionally for felony murder. If an unconditional request for such instructions existed, it would surely appear prominently in the dissent.
Contrary to our colleague's suggestion, the majority has not ignored the fact undisputably a critical one that counsel were focusing, in making their requests for jury instructions, on the existence of two different hypotheses as to the identity of the shooter. See the discussion at pp. 499-500, supra. Indeed, as we have endeavored to show, it was the defense attorneys' concern that their prime theory ("Giles did it") must not be compromised that led them to condition so narrowly their requests for instructions on self-defense and on defense of a third party.
Finally, the dissent states, citing Supp. Rec. 6, Tr. 88-89, that Cowan's attorneys "argued that appellant had acted in self-defense and was entitled to a self-defense instruction" at the time they moved, successfully, for a judgment of acquittal on the charge of first-degree murder. That discussion, however, was not about jury instructions, but about the MJOA. We have found no indication in the cited transcript pages (or anywhere else in the argument *505 on the MJOA) that Cowan's counsel requested a self-defense jury instruction.[9] The position of Cowan's attorneys in the circumstances under which they sought such an instruction was articulated at the time instructions were discussed, and is set forth exhaustively in Part II of this opinion.
V.
CONCLUSION
For the foregoing reasons, the case is remanded to the trial court, which is directed to vacate one of Cowan's two murder convictions. In all other respects, Cowan's convictions must be and each is hereby
Affirmed.[10]
ROGERS, Chief Judge, dissenting in part and concurring in part:
The majority's analysis is, in my view, most critically flawed because it fails to come to grips with the two factual scenarios presented to the jury: one presented by the government in which appellant was the shooter of Knox, the drug purchaser, and a second scenario presented by the defense in which Giles, the seller of drugs, was the shooter. By extracting isolated portions of the transcript, the majority concludes that appellant tied his request for self-defense instructions to the government's request for an aiding and abetting instruction with regard to felony murder. Majority opinion at 502. Yet the evolution of the parties' positions as the trial progressed shows, as the trial judge recognized, that each side came to realize that the other side's scenario might prevail with the jury, and accordingly, requested corresponding instructions. While the majority concludes that defense counsel's position regarding self-defense instructions was "clear[]" and "unambiguous[]," see majority opinion at 503, the majority ignores the trial judge's view of defense counsel's position. See infra at 509-510. Accordingly, I respectfully dissent.
I.
To understand the evolution of the two scenarios, a more complete review of the facts and the proceedings is required than that presented by the majority opinion. The charges arose out of a sale of cocaine that went awry, resulting in the prospective buyer's death. As the defense position became clear, the government adjusted its position and the defense, in turn, reacted.
The government presented four important witnesses, of which Samuel Giles was the key witness. Giles testified that in the early morning hours of November 20, 1986, he and appellant were together at Giles' apartment watching the movie "Scarface" and counting money. After watching some *506 of the movie, they left the apartment, with Giles carrying the cocaine and appellant carrying the gun "[f]or protection." Once on the street, a man named Knox approached them and called out Giles' name. When Giles turned around, Knox asked him if he had any cocaine, and Giles responded that he did. Knox asked for two bags, and after Giles had given them, Knox asked for two more. At this point Giles said to Knox, "Either you've got $98 or you've got $100 bill." Knox said he had the money, and Giles told him to give it to him. Shortly thereafter, Knox reached into his pocket and said either "Give me anything" or "Give me everything." According to Giles, at that point appellant yelled, "Duck, Soldier," and shot Knox.[1]
Giles ran, went home, and later found appellant on his porch. According to Giles, appellant put the gun in Giles' mouth and told him he would kill him if he told anyone what had happened. On cross-examination, Giles admitted that he had pleaded guilty to second-degree murder of Knox and another man, and that the prosecutor had spoken on his behalf at that proceeding. Giles' testimony was impeached with three earlier versions of the events that he had given to the police, to the judge who accepted Giles' pleas, and to the grand jury.[2]
Lillian Holcomb, who was on her way to her grandmother's house after getting high on drugs, testified that she saw Giles, appellant, and another man talking to a guy in the breezeway of an apartment building. After that guy put his hand in his pocket, appellant pulled out a gun and shot him. Appellant and the other person ran together while Giles ran in another direction. On cross-examination, she was impeached with her grand jury testimony that appellant had actually been standing at the end of the breezeway and did not shoot, and that Giles and the person standing next to him looked like they had guns.[3]
Officer Dicks of the Metropolitan Police Department testified that when he arrived on the scene of the shooting he found Knox lying on the pavement. Knox's hand was in his left front jacket pocket and a hammer handle was protruding from that pocket.[4]
Tina Duvall, Giles' first cousin and appellant's former girlfriend, testified that appellant had left the apartment on the morning in question with cocaine and a gun, and that three to five minutes after he and Giles departed, she heard a gunshot. Upon running to the window, she saw the victim staggering through the breezeway. According to Duvall, when Giles and appellant returned to the apartment, Giles had a $100 bill and appellant stated that he shot the guy because he was getting ready to stick up one of his soldiers. She also identified the gun and shoulder holster recovered in the bedroom shared by Giles and appellant as belonging to appellant. On cross-examination, Duvall was impeached with her prior statements, including her statement to the police that when appellant had returned to the apartment he had said that he *507 thought Knox was going to rob them and that it looked like Knox was going into his pocket to get a gun.[5]
The government rested, and the defense moved for a judgment of acquittal notwithstanding the evidence.[6] At this point, as relevant to this appeal, the two scenarios emerged appellant as the shooter and Giles as the shooter.
First, the defense requested self-defense instructions on the basis of the government's theory that appellant was the shooter. During discussion of the defense motion, in response to the prosecutor's argument that there was evidence of premeditation to support the first-degree murder charge, defense counsel argued that appellant had acted in self-defense and was entitled to a self-defense instruction. The trial judge questioned whether the defense was entitled to a self-defense instruction in a felony murder drug distribution case and asked both counsel to prepare memoranda. At the next court session, after further discussion about self-defense, the judge granted the defense motion for a judgment of acquittal on first-degree murder and decided to instruct the jury on second-degree murder since the jury could find that appellant was the shooter.
Self-defense was also discussed in connection with the defense theory that Giles was the shooter. Concerned that the jury might conclude, contrary to the government's theory of the case, that Giles had been the shooter, the prosecutor requested that the judge give an aiding and abetting instruction on felony murder in response. The prosecutor's request for aiding and abetting on the felony murder count also prompted a corresponding reaction from the defense. Defense counsel objected, and argued that if the judge did instruct on aiding and abetting, then appellant was entitled to instructions on self-defense and defense of another. The defense theory was that if the jury did find Giles was the shooter, then Giles was entitled to use force to defend himself or appellant, and that under the principle of transferred intent, appellant could not be found guilty of aiding and abetting. Defense counsel submitted proposed written instructions on self-defense and defense of another, and the trial judge tentatively agreed to give them.[7]
After closing arguments, the discussion of the jury instructions continued.[8] Defense counsel made two requests; first, that the trial judge instruct the jury on the primary defense theory that Giles was the shooter, and second, that the trial judge include instructions on self-defense and defense of another with the rest of the instructions, and not as an alternative defense theory. Defense counsel expressly argued that if the jury rejected the defense theory that Giles was the shooter and found instead that appellant had been the shooter, the jury should be instructed that the government had the burden to disprove self-defense. Defense counsel also declined to advise the judge whether the defense claimed that appellant had not been at the scene of the shooting.
The trial judge was concerned that defense counsel had not argued self-defense during closing argument and also did not wish the jury to be instructed that the alternative defense to the government's theory was that appellant had acted in self-defense. In addition, based on what he *508 deemed to be inconsistencies in the various defense theories, the judge reversed his earlier decision and declined to give the self-defense instructions. Later, the judge also reversed his earlier decision to give an aiding and abetting instruction on the felony murder count.
II
The government makes four arguments in support of the trial judge's refusal to give the self-defense instruction. Upon examination, they are unpersuasive.[9]
Linkage. The government maintains, and the majority agrees, that defense counsel waived the request for a self-defense instruction. Contrary to the majority's reconstruction of the record and its reliance on isolated excerpts, the record of the trial refutes the contention that the trial judge properly refused to give the requested instructions because they had been linked to the government's aiding and abetting instruction, which was ultimately not given.[10]
As previously noted, the discussion of self-defense arose in two contexts: first, under the government's theory that appellant was the shooter, and second, under the defense theory that Giles was the shooter. These two scenarios make clear that the self-defense instructions applied to both contexts, and that waiving such an instruction in one context was not tantamount to waiving it in the other. The defense first requested the self-defense instruction at the close of the government's case when the defense asked for the instruction in response to the government's theory that appellant was the shooter. A second request for self-defense instructions was made by the defense in response to the government's request for the aiding and abetting instruction on the felony murder charge. When, as the majority's excerpts from the record point out, defense counsel waived the request for self-defense instructions in connection with the defense theory that Giles was the shooter, however, defense counsel did not also waive the request in connection with the government theory that appellant was the shooter.[11]*509 Defense counsel argued to the trial judge that once self-defense is raised by the evidence, it becomes an element that the government has to disprove and it does not have to be a theory of the defense. Defense counsel, therefore, sought to have the trial judge give the self-defense instructions without stating that self-defense was an alternative defense theory.[12] As was true when defense counsel argued in support of the motion for judgment of acquittal, at this point the requests for the self-defense and defense of another instructions were no longer tied to the aiding and abetting instruction.
To recapitulate: The defense first raised a self-defense claim in moving for a judgment of acquittal on all counts at the close of the government's case-in-chief. Specifically, in addressing the premeditated murder charge, the defense argued that "all of the Government's witnesses suggest the possibility of a self-defense claim. Even if the Court credits all the witnesses that it was Mr. Cowan that fired the shot." The prosecutor argued that self-defense was a question for the jury. The trial judge granted the defense motion for acquittal on first-degree murder and decided to instruct on second-degree murder on the basis that the jury could find that appellant was the shooter.
After the judge granted the defense motion on first-degree murder, the prosecutor requested an aiding and abetting instruction on felony murder if the jury found in accordance with the principal defense theory that Giles had been the shooter. This request focused on the defense theory only, the prosecutor viewing the second-degree murder and carrying a pistol counts as separate matters in which the jury would have to find that appellant was the shooter. The defense argument, in turn, that it did not need the self-defense instructions if the judge did not give the aiding and abetting instruction on felony murder, was based on two grounds: first, that would be consistent with the defense theory that Giles was the shooter, and second, that second-degree murder count should not go to the jury, only felony murder should.
Defense counsel continued, however, to press a self-defense claim in the event that the jury determined in accordance with the government's principal theory that appellant had done the shooting. The trial judge acknowledged this when he stated that he would give the aiding and abetting instruction on felony murder, a second-degree murder instruction, and a self-defense instruction regardless of who the jury found to be the shooter.[13] In the judge's words:
Now, insofar as the felony murder, I will give aiding and abetting on it, Government's theory that Cowan did the shooting, the defendant's theory that Giles did the shooting, but in any event, in any event, if Giles did the shooting or whoever did the shooting, it was done in self-defense, either of the person or of the other person.
This was where matters stood when counsel made their closing arguments to the jury.[14] Afterwards, during discussion of the jury instructions, the defense repeated that, in addition to the felony murder self-defense instruction, it wanted a self-defense instruction if the jury rejected the defense theory (that Giles was the *510 shooter) and found that appellant was the shooter. As defense counsel explained to the judge,
[W]hen self-defense is raised in a case, when the defense has met their prima facie burden, which we have here, because we have right to the instruction, then it becomes an element the Government has to disprove. So it doesn't have to be our theory of the defense. But they still have to disprove it, because it has been raised.
Clearly, the defense was no longer conditioning the request for the self-defense instruction upon the scenario that Giles had done the shooting. In view of the evidence from which a reasonable jury could find that appellant had been the shooter, the issue of aiding and abetting of felony murder was no longer relevant to the self-defense request with regard to second-degree murder.[15]
Sufficiency of evidence to warrant instruction. Second, the government maintains that there was insufficient evidence to show that appellant actually and reasonably believed that the decedent threatened to use deadly force. However, the trial judge initially found that there was sufficient evidence to warrant a self-defense instruction, and was clearly correct.[16]
As the court observed recently, in noting that "[t]he concept appears to have fairly deep roots in this jurisdiction,"
`As a general proposition, a defendant is entitled to an instruction as to any recognized defense for which there exists evidence sufficient for a reasonable jury to find in his favor.' [citations omitted] Moreover, in the Mathews [v. United States, 485 U.S. 58, 108 S.Ct. 883, 99 L.Ed.2d 54 (1988),] decision, the Supreme Court made clear that the defendant's entitlement to such an instruction is not canceled or diminished by the claim of inconsistent, or even contradictory, defenses, even those inconsistent with the defendant's testimony.
Bostick v. United States, 605 A.2d 916, 917 & n. 7 (D.C.1992) (quoting Mathews, supra, 485 U.S. at 63, 108 S.Ct. at 887, and in note 7 citing Womack v. United States, 119 U.S.App.D.C. 40, 336 F.2d 959 (1964)).[17]See Guillard v. United States, supra note 16, 596 A.2d at 62-64; Reid v. United States 581 A.2d 359, 367 (D.C.1990); Adams, supra, 558 A.2d at 349. "[S]o long as a reasonable juror acting reasonably could credit the evidence," the defendant is entitled to the requested instruction. Goddard v. United States, 557 A.2d 1315, 1316 (D.C.1989). Accordingly, the defendant "is *511 entitled to a jury instruction on any issue fairly raised by the evidence, no matter how weak that evidence may be," although no instruction need be given in the absence of a factual or legal basis for it. Doby v. United States, 550 A.2d 919, 920 (D.C. 1988) (citations omitted); Carter v. United States, 531 A.2d 956, 959 (D.C.1987) (same). See also Gray v. United States, 549 A.2d 347, 349 (D.C.1988) (requested instruction on defendant's theory of the case which negates guilt must be given where supported by any evidence, however weak) (citations omitted); Stack v. United States, 519 A.2d 147, 154 (D.C.1986) (theory of case; "any evidence") (quoting Montgomery v. United States, 384 A.2d 655, 660 (D.C.1978)). In reviewing the trial court's refusal to give a defense instruction, the court must view the evidence in the light most favorable to the defendant. Guillard, supra, 596 A.2d at 62; Adams, supra, 558 A.2d at 349. See Harling v. United States, 387 A.2d 1101, 1103 (D.C.1978) (either evidence of the defense or prosecution); Guillard, supra, 596 A.2d at 63 (testimony of government witnesses); Reid, supra, 581 A.2d at 367.
The government's contention that Knox never threatened to use deadly force, and thus there was no actual threat of imminent harm, incorrectly views the evidence in the light most favorable to the government; it is appellant's reasonable belief that he is in imminent peril of death or serious bodily harm that gives rise to a self-defense claim. McPhaul v. United States, 452 A.2d 371, 373 (D.C.1982). Under the circumstances as described by Giles and Holcomb, appellant could have reasonably believed that Knox was demanding his money back even though he had already opened one of the drug packets, and that when Giles protested, Knox's hand movement to his pocket was for a weapon. Likewise, the government's view that Knox's statement "Give me anything," and his movement to his pocket was ambiguous conduct, and that the evidence of any argument or verbal threat between Giles and Knox was weak at best, views the evidence from the government's perspective, and is inconsistent with the "weak" evidentiary showing necessary for a requested instruction.
Furthermore, the cases relied on by the government are distinguishable. In Byrd v. United States, 364 A.2d 1215, 1220 (D.C. 1975), for example, there was no evidence to support a self-defense claim since the only evidence was that the victim had not had anything in his hands when the defendant returned to the scene of an earlier argument to shoot him. Here, in contrast, there was evidence indicating that Knox was armed. Similarly, in United States v. Peterson, 157 U.S.App.D.C. 219, 483 F.2d 1222, 1232, cert. denied, 414 U.S. 1007, 94 S.Ct. 367, 38 L.Ed.2d 244 (1973), the defendant returned to the scene of a dispute with a weapon. By that time the victim had gotten into his car and was prepared to leave when the defendant loaded his pistol, commanded the victim not to leave, and dared him to enter his property. Id. at 229-30, 483 F.2d at 1233. Here, unlike Peterson, there was no evidence that appellant had instigated the trouble. A reasonable jury could find that appellant reasonably thought that Knox was reaching into his pocket for a weapon.
Other decisions more closely on point make clear that there was sufficient evidence to merit a self-defense instruction. See Gillis v. United States, 400 A.2d 311, 311 (D.C.1979) (where victim had approached defendant, accused him of being with his girlfriend, and then reached into his pocket, self-defense instruction proper); Reid, supra, 581 A.2d at 361, 367 (where police found defendant arguing with others who outnumbered him while holding a knife, and defendant yelled to police officer, "I'm going to show these motherf they don't be f ing with me. I'll f them up", a jury could reasonably find that he was trying to ward off an attack and the defendant was thus entitled to a self-defense instruction); United States v. McCrae, 148 U.S.App.D.C. 116, 118, 459 F.2d 1140, 1142 (1972) (error not to give self-defense instruction where the defendant testified that the victim had put his hands into his pockets and "was pointing something at me through his pocket," and *512 another witness testified that the victim looked like he was going to shoot).
Bizarre reconstruction. Thirdly, the government maintains that appellant's various theories of the case would have forced the jury to engage in a "bizarre reconstruction" of the evidence. However, appellant's self-defense claim was consistent with the government's principal theory that appellant was the shooter, and hence the government cannot seriously suggest that a bizarre reconstruction was required. But, even in the absence of such consistency, and to the extent that the government's argument is based on the defense refusal to state whether or not it was claiming that appellant was not present at the scene of the shooting, appellant's self-defense claim would not have required the jury to do more than doubt the credibility of the government witnesses about which man had fired the shot, a feat that was made possible by the extensive impeachment of the government's witnesses. Moreover, the jury was not even required to try to reconcile appellant's testimony with his defense since he did not testify.[18]See Bostick, supra, 605 A.2d at 917 n. 5 (fact that defendant did not claim self-defense when he testified and denied having a gun did not preclude instruction on provocation as defense to shooting by the defendant); Guillard, supra note 16, 596 A.2d at 62 (defendant's decision "to establish `different or even contradictory defenses' does not jeopardize `the availability of a self-defense jury instruction as long as self-defense is reasonably raised by the evidence'") (quoting Reid, supra, 581 A.2d at 367).[19]
The cases on which the government relies simply hold that where there is no evidence to support a lesser included offense or self-defense instruction, a defendant is not entitled to an instruction. Thus, in Anderson v. United States, 490 A.2d 1127, 1130 (D.C.1985), the defendant was denied an instruction for the lesser included offense of robbery where the government presented two eyewitnesses who testified that although they never saw the defendant with a gun, they had turned the instant they heard the shot and seen the defendant standing next to the victim the moment after the shooting; there was also medical evidence that the victim had been shot from one foot away. The defendant argued that he was entitled to an instruction because the government's evidence was compatible with a version that he had innocently (unarmed and unassociated with the assailant) stumbled upon the shooting scene, that some unidentified assailant had shot the victim, and that the defendant had then noticed the money and decided to take it and flee. Id. The court concluded that such a scenario "strain[ed] credulity to the breaking point," and would put the jurors in the position of having to effect a "bizarre reconstruction" of the evidence. Id. In the instant case, however, the government's evidence put at least two men in a position to have fired the shot. The other case cited by the government, United States v. Crowder, 177 U.S.App.D.C. 165, 170, 543 F.2d 312, 317 (1976) (en banc), cert. denied, 429 U.S. 1062, 97 S.Ct. 788, 50 L.Ed.2d 779 (1977) is also inapposite; here, it was the government's own evidence that supported the self-defense claim.[20]
*513 Despite the government's argument that instructing the jury on self-defense would have presented the jury with an "impossible task," the evidence in the instant case clearly does not require so great a leap of logic as that required in Anderson and Crowder. Giles' testimony about Knox's "Give me everything" response to Giles' demand for payment, as well as the exchange about Knox opening the seal of one drug packet, supported a reasonable inference that a dispute arose between the parties to the sale. Reasonable jurors could have fairly credited the testimony of both eyewitnesses, Giles and Holcomb, that appellant shot Knox only after Knox reached into his pocket. Coupled with the testimony of Officer Dicks and Ms. Duvall, a jury could reasonably infer that appellant was acting in defense of himself or Giles when he shot Knox.
Creation of dangerous situation. Finally, the government maintains that appellant was precluded from asserting self-defense because, by engaging in a dangerous felony, he "generated the necessity to kill." However, the cases relied on by the government are factually distinguishable, involving a defendant who found himself in a "safe harbor" removed from the conflict in which he had been engaged and who chose to return to the scene armed with a weapon and who thereafter instigated the trouble that ensued.[21] By contrast, appellant was neither the first aggressor, nor involved in any pre-existing dispute with Knox, and by leaving the apartment that morning with Giles for the purpose of selling drugs he is not viewed in law as thereby inciting or provoking an attack. The government's eyewitnesses testified that appellant did not go for his gun until Knox, who initiated the contact with Giles, put his hand in his pocket. Another government witness testified that appellant claimed that he had shot Knox because he was about to stick up one of his soldiers.
Nor are the armed robbery cases cited by the government controlling. In Taylor v. United States, 380 A.2d 989 (D.C.1977), the court held that the defendant was not entitled to a defense of another instruction where he argued that he shot the bank security guard in defense of his confederate who, all three government witnesses testified, had initiated the gunfire with the guard. 380 A.2d at 994. Because the confederate had no right of self-defense, it necessarily followed that the defendant could not claim defense of a third person.[22] Other cases relied on by the government State v. Warden, 423 F.Supp. 611 (D.Md. 1976), cert. denied, 431 U.S. 906, 97 S.Ct. 1700, 52 L.Ed.2d 390 (1977), Street v. State, 26 Md.App. 336, 338 A.2d 72 (1975), and Gray v. State, 463 P.2d 897 (Ala.1970) are *514 also distinguishable. Armed robberies, like burglaries, inherently involve aggressive conduct. The nature of illegal drug distribution is qualitatively somewhat different, at least insofar as first aggressor status is concerned, from armed robbery and burglary.
While illegal drug distribution has been designated by the Council of the District of Columbia as a dangerous crime for certain purposes,[23] the legislature has not eliminated the right to self-defense while perpetrating a felony. Moreover, in Bostick, supra, 605 A.2d at 919 n. 10, where the defendant was on the scene as an "enforcer," and he did not use his gun until he was assaulted, the court held that it was reversible error not to give a provocation instruction. The court concluded that a defendant did not forfeit the right to a provocation instruction by arming himself. 605 A.2d at 920. See also Wilson v. United States, 91 U.S.App.D.C. 135, 136, 198 F.2d 299, 300 (1952) (referring to "the exigencies of the occasion," giving rise to entitlement to a self-defense instruction). See generally Peterson, supra, 157 U.S.App.D.C. at 229 n. 61, 483 F.2d at 1232 n. 61 (observing that "[o]ne may deliberately arm himself for purposes of self-defense against a pernicious assault which he had good reason to expect," but the "true significance of the fact of arming can be determined only in the context of the surrounding circumstances") (citations omitted). As in Bostick, supra, 605 A.2d at 919-20, the evidence in the instant case was consistent with a conclusion by a reasonable jury that appellant used his weapon in response to a reasonably perceived threat of imminent harm.
Therefore, for these reasons, I conclude that the trial judge erred in refusing, ultimately, to give the requested self-defense instructions. The judge erred as a matter of law to the extent that he predicated his refusal on the ground that appellant was presenting inconsistent defenses and had failed to argue the self-defense claim to the jury during closing argument. See Mathews, supra, 485 U.S. 58 at 66, 108 S.Ct. 883 at 888; Bostick, supra, 605 A.2d at 917. Furthermore, the error was not harmless. The majority, in concluding that even if appellant had adequately preserved his request for the self-defense instruction any such error was harmless, makes no mention of the court's consistent reluctance to deem such error harmless. Although not adopting a per se reversal rule, our cases make clear that it is the rare case in which failure to instruct on a defense can constitute harmless error. See Gray, supra, 549 A.2d at 350-51 ("Although we need not adopt ... a per se rule that the failure to give an alibi instruction when one is warranted can never be harmless error, we find it difficult to imagine a case in which such an error could possibly be harmless"); Gethers v. United States, 556 A.2d 201, 204 (D.C.1989) (recognizing that it is "the extraordinary case in which Gray's strong presumption of prejudice would not apply"); Stack, supra, 519 A.2d at 154 ("reversible error when [trial court] refuses to present adequately a defendant's theory of the defense" that negates guilt); West v. United States, 604 A.2d 422, 428 (D.C.App. 1992) (same); Graves v. United States, 554 A.2d 1145, 1147 (D.C.App.1989) (same). Not only was no reference made during the jury instructions to self-defense or to the government's burden to disprove self-defense, but the government's evidence was not overwhelming in view of the substantial impeachment of the credibility of its witnesses.[24] Consequently, the government's suggestion is unpersuasive that, "to the extent appellant was acting on the mistaken *515 belief in the need to use deadly force in `self-defense,'" the trial judge's instruction on whether there were mitigating circumstances to second-degree murder sufficed to indicate that the jury necessarily rejected any provocation claim. Cf. Mathews, supra, 485 U.S. at 61, 108 S.Ct. at 885 (reversible error to deny entrapment defense instruction on ground defendant would not admit all elements of charged offense even where judge charged jury that the defendant's acts "were procurred [sic] by the overt acts of the principle [sic] witness of the government"); White v. United States, 613 A.2d 869, 877-78 (D.C. 1992) (adopting "no rational jury" standard of Carella v. California, 491 U.S. 263, 271, 109 S.Ct. 2419, 2423, 105 L.Ed.2d 218 (1989) (Scalia, J., plurality opinion) in applying harmless error standard to failure to instruct on element of offense).
Accordingly, I respectfully dissent and I would reverse appellant's convictions for felony murder and second-degree murder and remand the case for a new trial on those charges; otherwise, I concur with the majority in affirming appellant's other convictions.[25]
NOTES
[1] The trial judge had granted a defense motion for judgment of acquittal on the original charge of first degree premeditated murder.
[2] By the time of Cowan's trial, Giles had also entered a plea of guilty to a second murder, and he had a charge of armed rape pending against him in Maryland. A second murder charge against Cowan was severed from this one. The activities of Cowan and Giles during the autumn of 1986 are also described in Belton v. United States, 581 A.2d 1205 (D.C.1990).
[3] When police discovered the decedent's body, his hand was still in his pocket. Also in that pocket was a hammer.
[4] The defense contended that Giles received a favorable plea offer because he was not required to plead to any armed offense carrying a mandatory minimum penalty. Giles responded that he faced thirty years and that this was not a "sweet deal."
[5] We use the word "apparently" because, in his reply brief in this court, Cowan failed altogether to contest the government's position that the request for instructions on self-defense and defense of a third person were conditioned on the judge's giving an "aiding and abetting" instruction as to felony murder. At oral argument, however, Cowan sought to refute the government's contentions on that issue.
[6] In general, Rule 30 requires that requests for instructions be submitted prior to closing argument. Shreeves v. United States, 395 A.2d 774, 786-87 (D.C.1978), cert. denied, 441 U.S. 943, 99 S.Ct. 2161, 60 L.Ed.2d 1045 (1979); United States v. Watson, 282 U.S.App.D.C. 305, 309-10, 894 F.2d 1345, 1349-50 (1990). The judge's further discussion of instructions after argument did not constitute a waiver of the rule. Watson, supra, 282 U.S.App.D.C. at 309-10, 894 F.2d at 1349-50; see also Life Ins. Co. v. San Francisco, 84 U.S. (17 Wall) 672, 679, 21 L.Ed. 698 (1873). Even if Cowan had requested instructions after closing argument different from those which he requested prior to argument, there is at least a substantial question whether the post-argument request would have been timely.
[7] The government also argues that the evidentiary predicate for instructions on self-defense or defense of a third person was insufficient, that Cowan's position requires a "bizarre reconstruction" of the evidence, and that a drug dealer who arms himself may not claim self-defense on a record such as this one. We need not and do not reach these issues.
[8] Since Cowan's attorneys insisted with unrelenting rigor that self-defense and defense of a third person were not a part of the defendant's theory of the case, this is not a case in which the court refused to instruct on the defendant's theory. Cf., e.g., Gethers v. United States, 556 A.2d 201, 204 (D.C.1989) (instruction on defendant's theory of the case must ordinarily be given) and the other authorities for this proposition cited by our dissenting colleague. Post at 514. Indeed, the judge gave a detailed instruction on the defense theory of the case (which included assertions that Cowan did not know Knox, was not selling drugs, and did not know Giles would shoot Knox) even though there was no evidentiary predicate for a substantial part of the instruction.
[9] Given the normal sequence of events at trial, such a request at that stage of the proceedings would have been quite unusual.
[10] Cowan's remaining contentions are unpersuasive. He claims that the judge should have directed the jury to acquit him on the felony murder charge, but there was ample evidence that Cowan shot Knox while he and Giles were attempting to distribute cocaine, and the trial judge properly denied his motion for judgment of acquittal. In determining whether that motion should have been granted, we consider the evidence in the light most favorable to the government, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw reasonable inferences. Langley v. United States, 515 A.2d 729, 731 (D.C.1986). The jury could reasonably conclude that "the lethal act," i.e., the shooting of Knox, was in furtherance of the predicate offense of attempted distribution of cocaine, and that the attempted distribution was still ongoing when the fatal shot was fired. See, generally, United States v. Heinlein, 160 U.S.App.D.C. 157, 168-69, 490 F.2d 725, 736-37 (1973).
Cowan also complains that the trial judge failed to instruct the jury, in relation to the felony murder count, that the killing must be in furtherance of the felony. The judge told the jurors, instead that in order to convict Cowan, they were required to find that "the defendant killed the deceased while perpetrating or attempting to perpetrate the offense of distribution of a controlled substance." We agree with Cowan that the formulation which he now suggests is more appropriate. See, e.g., Christian v. United States, 394 A.2d 1, 49 (D.C.1978), cert. denied, 442 U.S. 944, 99 S.Ct. 2889, 61 L.Ed.2d 315 (1979). Cowan did not object to the instruction as given, however, and Super.Ct.Crim.R. 30 and the "plain error" rule preclude reversal on these facts.
[1] Giles also testified that another man, Watkins, was standing on Giles' porch a little farther away than appellant at the time of the shooting.
[2] Giles' memory was also refreshed by the fact that upon entering his pleas, he had told the judge that when Knox had asked for his money back, Giles had responded, "You done popped the seal on my bag," referring to the fact that Knox had already opened one of the bags. Knox responded "F____ that," and then reached into his pocket. Giles claimed he had not had time to give Knox his money back in response to his request. He denied thinking that Knox had reached into his pocket in order to give him (Giles) more money, but claimed that he did not know what Knox was going to do. Giles had not mentioned getting money from Knox when he had testified before the grand jury.
[3] Holcomb also admitted that being high on drugs could affect how one sees things, and that she had viewed these events from a distance of forty-two feet, not twelve to fifteen feet as she had testified on direct. In addition, she described various criminal charges she had faced after the shooting, admitting that she had been permitted to plead to lesser charges.
[4] Another officer testified that the murder weapon had been found underneath a mattress in one of the bedrooms at Giles' apartment. A firearms expert testified that the victim had been shot from a distance of more than three or four feet.
[5] Reading the statement refreshed Duvall's memory that Giles had told her when he returned to the apartment that morning that he had put the gun upstairs, and that appellant had "shot the guy."
[6] The defense did not present any evidence.
[7] The majority opinion, see majority opinion at Part IV, ignores the record which shows that defense counsel requested a self-defense instruction and provided the trial judge with a proposed written instruction.
[8] In closing argument, the prosecutor addressed both scenarios appellant as the shooter and Giles as the shooter and appellant's self-defense claim. The defense closing argument likewise addressed the two scenarios, focusing on the insufficiency of the government's evidence that appellant was the shooter and the indications that Giles was the shooter. Defense counsel did not discuss appellant's self-defense contentions during closing argument.
[9] At trial, the government did not present the legal memorandum requested by the trial judge regarding whether or not appellant was entitled to a self-defense instruction in a felony murder case.
[10] See Adams v. United States, 558 A.2d 348, 350 (D.C.1989) (rejecting the government's argument that defense counsel's statement at trial that he was "no longer requesting self-defense" precluded raising the failure to instruct on appeal).
[11] Toward the end of the discussion of the instructions to be given to the jury, the defense emphasized that it had uncoupled its request for self-defense instructions from the aiding and abetting issue:
[DEFENSE COUNSEL]: Right. But, Your Honor, he could he could still believed. And if the jury believes that Mr. Cowan was the shooter, it wouldn't even matter if Sammy Giles didn't think he had a right to self-defense because for defense of others is what the other person believes the person had. And, so, I think both of those instructions [self-defense and defense of a third person] are important for the jury to hear along with our theory of defense instruction.
THE COURT: Well, I will put it here then.
* * * * * *
[DEFENSE COUNSEL]: ... also the jury could find that they could not believe our theory of the defense. And if they choose not to believe our theory of defense that Sammy, Sammy Giles shot it, then they could also believe that our client shot in self-defense and that's why the defense instruction _____
THE COURT: Well, then I will put that in there. If you do not accept this defense, then, Cowan says that he acted in self-defense. And the that if you find that he, beyond a reasonable doubt, that he did shoot the Knox, that he did so in self defense, or if you find that, yeah, that's it. You don't believe that.
[DEFENSE COUNSEL]: I don't think the Court needs to do that extra language. I think the Court can read our theory of defense [that Giles shot Knox] and then just read the self-defense instructions.
* * * * * *
THE COURT: If they reject the theory that it was Giles.
[DEFENSE COUNSEL]: Then it's got to be Mr. Cowan acting in self-defense.
THE COURT: That's right Mr. Cowan's acting in self-defense or self-defense of the third party. And I have got to give that. If that's your theory ...
[12] Defense counsel asked the judge to instruct the jury on the defense theory that appellant did not do the shooting, but also to instruct that "there is another principle of law, ladies and gentlemen, that if a person acts in self-defense, just not even stating that it's either side's theory, or that it's a defense theory, just there is another principle and the government has the burden on that principle."
[13] Defense counsel indicated that the instructions proposed by the defense, by substituting the word "shooter" for "defendant," would fit both the defense and government theories of who was the shooter. There was no objection by the prosecutor in response to the judge's comments or defense counsel's statement.
[14] During closing argument the prosecutor argued both the government and defense theories of the case that the evidence showed appellant was the shooter (government's theory) and that if the jury found Giles was the shooter (defense theory), then appellant was guilty as an aider and abettor. The prosecutor also addressed self-defense as it applied to Giles as the shooter and as it applied to appellant as the shooter.
[15] The fact that defense counsel did not want the trial judge to instruct the jury that self-defense was an alternative defense theory cannot be dismissed as a defense ploy. The evidence entitled appellant to the self-defense instruction even if he had simply entered a general denial to the charges and offered no theory of defense other than to put the government to its proof. See Mathews v. United States, 485 U.S. 58, 65, 108 S.Ct. 883, 887-88, 99 L.Ed.2d 54 (1988). The defense closing argument took this tack.
[16] Viewing the evidence in the light most favorable to appellant as we must, see Guillard v. United States, 596 A.2d 60, 62 (D.C.1991), the government's eyewitness evidence would support a finding by a reasonable jury that appellant could have had reason to fear that Knox was about to use deadly force upon him or Giles. See Bowler v. United States, 480 A.2d 678, 682 n. 8 (D.C.1984). Giles testified that shortly after he had given Knox four bags of cocaine, Knox cursed, told Giles to "Give me everything," and reached into his pocket. At that point appellant yelled to Giles "Duck, soldier," and shot Knox. The government's other eyewitness, Lillian Holcomb, also testified that it was not until after Knox had put his hand into his pocket that the gunman shot him. Officer Dicks' testimony confirmed that Knox had his hand in his jacket pocket which contained a hammer and that the hammer handle could be seen protruding from his pocket. This evidence supported an inference that appellant was frightened by Knox's move to his pocket after demanding that Giles give him everything and that appellant had acted in self-defense. The inference was strengthened by Tina Duvall's testimony that when Giles and appellant returned to the apartment that night, appellant had stated that "he shot the guy because he was getting ready to stick up one of his soldiers."
[17] In Mathews, supra, 485 U.S. at 62, 108 S.Ct. at 886, the Court held that "even if the defendant denies one or more elements of the crime, he is entitled to an entrapment instruction whenever there is sufficient evidence from which a reasonable jury could find entrapment."
[18] Consequently, there is no reason to accept the government's invitation to adopt a rule that a defendant charged with felony murder is barred from raising a defense of self-defense where he claims he was not present at the scene of the crime. "We are simply unpersuaded by the government's suggestion," made with the concession that it can find no case authority for its suggestion, "that we should make the availability of an instruction on [self-defense] where the evidence justifies it subject to a requirement of consistency to which no other defense is subject." Mathews, supra, 485 U.S. at 66 (referring to the defense of entrapment).
[19] In Guillard, supra note 16, 596 A.2d at 62 n. 1, the court rejected the view that Hale v. United States, 361 A.2d 212 (D.C.1976), stood for the proposition that a defendant was not entitled to a self-defense instruction where he did not admit he committed the crime, noting that the government's position was contrary to Adams, supra, 558 A.2d 348.
[20] In Crowder, supra, the court upheld the denial of a proposed self-defense instruction because of the "fundamental objection" that the charge "would have contradicted Crowder's testimony and repudiated the theory of his defense." Id. at 170, 543 F.2d at 317. The defendant had testified that he had been injured in a struggle with the victim for the gun, and that another person had grabbed the gun and shot the victim. Despite his testimony that he had not been the shooter, the defendant requested a self-defense instruction. The court noted that if the jury believed his testimony, he should have been acquitted because he was not the shooter, and hence, in view of his testimony, self-defense was not raised at trial. The court was "not impressed by the effort of counsel to conjure up a case of self-defense from the theory that the defendant had perjured himself in his testimony and that a shooting in self-defense may be inferred from various wisps of evidence." Id. (citing Belton v. United States, 127 U.S.App.D.C. 201, 206, 382 F.2d 150, 155 (1967)).
[21] See, e.g., Marshall v. United States, 623 A.2d 551 (D.C.1992) (defendants returned armed to scene of earlier dispute and refused to leave); Peterson, supra, 483 F.2d 1222 (after verbal exchange, defendant went into house to retrieve and load pistol, then returned to scene of dispute and provoked victim, who was in car that was about to leave); Nowlin v. United States, 382 A.2d 14 (D.C.1978) (defendant went to complainant's home with shotgun to address pre-existing tension, allegedly drove away, stopped further down the block, got out of car and fired shot at complainant); see also Hurt v. United States, 337 A.2d 215, 217 (D.C.1975) (regarding carrying pistol without a license charge, self-defense instruction denied because it "is inapplicable where a defendant carries a gun in public for a period of time before the actual danger arises as opposed to when one actually uses it in self-defense") (citing Cooke v. United States, 107 U.S.App.D.C. 223, 224, 275 F.2d 887, 888 (1960)).
[22] In Taylor, supra, 380 A.2d at 994-95 n. 7, the court noted that there was no evidence that the person whom the defendant claimed he sought to defend had withdrawn from the confrontation with the security guard, but there was evidence that, although shot by the guard, he continued to shoot at the guard.
[23] See D.C.Code § 22-3201(g) (Supp.1992) (enhanced penalty for certain offenses committed with weapons); D.C.Code § 23-1331(3)(E) (1989 Repl.) (bail and pretrial detention).
[24] The instant case is distinguishable from cases in which the court has found harmless error. In McPhaul, supra, 452 A.2d at 373-74, for example, where the trial judge erred by refusing to instruct on the use of nondeadly force, this court, noting that the trial judge had instructed the jury on self-defense, concluded that the instructions given "adequately focused the jury's attention on the self-defense issue" because they did not leave the jury with the impression that self-defense was only permitted when the defendant is threatened with death or serious bodily injury. Id.
[25] Appellant was convicted of second degree murder, D.C.Code § 22-2403 (Repl.1989), felony murder while armed, D.C.Code §§ 22-2401 and -3202 (Repl.1989), attempted distribution of cocaine, D.C.Code § 33-541(a)(1) (Repl.1988), and carrying a pistol without a license, D.C.Code § 22-3204 (Repl.1989). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2364481/ | 843 S.W.2d 260 (1992)
COTHRON AVINATION, INC. and Truman Blankenship Appellants,
v.
AVCO CORPORATION Appellee.
No. 2-91-277-CV.
Court of Appeals of Texas, Fort Worth.
December 8, 1992.
Rehearing Overruled January 19, 1993.
*261 Gardere & Wynne, Fred J. Meier, Dallas, for appellants.
Cowles & Thompson, R. Brent Cooper, Michael W. Huddleston, and Teresa G. Bohne, Dallas, for appellee.
Before MEYERS and DAY, JJ., and CLYDE R. ASHWORTH, J. (Retired, Sitting by Assignment).
OPINION
MEYERS, Justice.
Appellants, Cothron Aviation Inc. and Truman Blankenship, and appellee, AVCO Corporation, were defendants below in a suit brought by Michael Davis Stewart and Geraldine Fallin Stewart, individually and next of friend of Mary Ada Stewart, Michael Davis Stewart Jr., and Elizabeth Anna Stewart, minors, arising out of the crash of a private airplane. Both appellants and appellee settled with the plaintiffs. Appellants brought a third-party claim against appellee. The trial court dismissed this claim by granting appellee's motion for summary judgment. Both parties appeal that ruling.
We reverse and remand in part and affirm in part.
A. PROCEDURAL HISTORY
This case arose when the Stewarts sued appellants and appellee for injuries sustained in an airplane crash. Appellant Blankenship owned the airplane. Appellant Cothron leased the airplane from appellant Blankenship and in turn leased the airplane to Michael Stewart, plaintiff below. Appellee manufactured and designed the engine in the airplane.
The crash occurred when Stewart was flying the airplane. The airplane's engine lost all power so Stewart attempted to make an emergency landing. When he did, he lost control of the airplane and it flipped over. In the crash, Stewart sustained injuries and the airplane was damaged.
After plaintiffs brought this suit against appellants and appellee, appellants filed a cross-claim against appellee for property damage of $27,596.02 to its aircraft, contribution, and indemnity. They claimed that appellee was solely responsible for the engine failure compelling the emergency landing which caused the damage to the airplane. Subsequently, the plaintiffs settled their claims with appellants and appellee.
Appellants and appellee then entered into negotiations concerning the possible settlement of appellants' claims against appellee. Letters and documents concerning the settlement were sent back and forth between the parties' attorneys. Pursuant to these letters, a settlement check for the exact amount of appellants' property damage claim was tendered to appellants although it was never cashed. Further, a witness was tendered for deposition.
Several months later, appellants brought an amended third-party action against appellee. They alleged strict liability for defective design of the engine, breach of implied warranties, negligence, property damages, and indemnity. Appellee answered with a general denial and affirmative defenses of accord and satisfaction, payment, release, and waiver. It also filed a first amended counterclaim, alleging that the negotiations resulted in a contract for settlement and release of appellants' claims against it. Appellee based these contentions on the letters and documents which discussed the settlement, the tendered check, and the deposition.
Appellants subsequently filed a motion for partial summary judgment and appellee filed a motion for summary judgment. The *262 basis of appellee's motion was the existence of a settlement agreement which satisfied Tex.R.Civ.P. 11, while the basis of appellants' motion was their denial of the existence of a valid settlement agreement satisfying rule 11. Appellants also claimed that even if there was a valid rule 11 settlement agreement, it only concerned the aircraft's hull damage.
The trial court denied appellants' motion for partial summary judgment. It granted appellee's motion for summary judgment and ordered appellants to take nothing based upon the existence of a rule 11 settlement agreement. The court ordered appellee to tender the settlement check to appellants for full release of their claims.
B. POINTS OF ERROR
Appellants bring two points of error claiming that the trial court incorrectly: 1) granted appellee's motion for summary judgment; and 2) denied their motion for summary judgment. They support their points of error by arguing that the settlement agreement was not enforceable as a consent judgment or as a contract. They also argue that even if there was a contract it only concerned hull damages or there is at least a genuine issue of material fact as to its scope. They further argue that appellee did not meet rule 11 requirements, so any settlement agreement reached is unenforceable. Next, they argue there are no equitable considerations warranting its enforcement even if it did not meet rule 11 requirements. Finally, appellants argue the trial court erroneously awarded appellee attorney's fees. Appellee's cross-point of error argues that the trial court incorrectly reduced their award of attorney's fees pursuant to appellants' motion to reduce.
We hold that because this case does not involve an agreed judgment, the summary judgment can only be upheld if there was 1) a valid settlement agreement which also meets 2) the procedural requirements of rule 11. With this in mind, we hold that there is a genuine issue of material fact as to whether the parties intended to enter into a settlement agreement before a formal contract was executed. Because there is a genuine issue of material fact as to whether the parties entered into a settlement agreement, we do not determine whether the procedural requirements of rule 11 were met or whether equity demands enforcement even if the procedural requirements of rule 11 were not met.
C. SUMMARY JUDGMENT STANDARD
We begin our review by noting our role in this process. In a summary judgment case, the issue on appeal is whether the movant met its burden for summary judgment by establishing that there exists no genuine issue of material fact and that it is entitled to judgment as a matter of law. Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); TexR.CivP. 166a. The burden of proof is on the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against it. Great American R. Ins. Co. v. San Antonio PI. Sup. Co., 391 S.W.2d 41, 47 (Tex. 1965). Therefore, we must view the evidence in the light most favorable to the nonmovants. See id. In deciding whether there is a material fact issue precluding summary judgment, all conflicts in the evidence will be disregarded and the evidence favorable to the nonmovants will be accepted as true. Montgomery v. Kennedy, 669 S.W.2d 309, 311 (Tex.1984); Farley v. Prudential Ins. Co., 480 S.W.2d 176, 178 (Tex. 1972). Every reasonable inference from the evidence must be indulged in favor of the nonmovants and any doubts resolved in their favor. Montgomery, 669 S.W.2d at 311. Evidence which favors the movant's position will not be considered unless it is uncontroverted. Great American, 391 S.W.2d at 47.
D. ENFORCING A SETTLEMENT AGREEMENT
Now we review the trial court's ruling granting summary judgment on the basis of a rule 11 settlement agreement. Rule 11 requires an "agreement between attorneys or parties touching any suit pending," to "be in writing, signed and filed with the *263 papers as part of the record, or ... made in open court and entered of record." Tex. R.CivP. 11. Appellants' first argument is that rule 11 further requires the filing of an agreement before it is disputed.
They are effectively arguing that when consent to an agreement is withdrawn before rule 11 is complied with, a judgment cannot enforce the agreement. However, we note that consent is only required for an agreed judgment. The summary judgment in this case is not an agreed judgment. See Hill v. Bellville Gen. Hosp., 735 S.W.2d 675, 678 (Tex.AppHouston [1st Dist.] 1987, no writ) (summary judgment entered without consent is not an agreed judgment).
Further, a valid settlement agreement which meets rule 11 requirements does not have to be enforced by way of an agreed judgment. See Stewart v. Matties, 528 S.W.2d 116, 118-19 (Tex.Civ.App.Beaumont 1975, no writ). Rule 11 is merely a procedural threshold to the enforcement of an agreement. Kennedy v. Hyde, 682 S.W.2d 525, 528 (Tex.1984); Massey v. Galvan, 822 S.W.2d 309, 317 (Tex.App.Houston [14th Dist.] 1992, writ denied). "Rule 11 is a minimum requirement for enforcement of all agreements concerning pending suits, including, but not limited to, agreed judgments." Kennedy, 682 S.W.2d at 528. The rule gleaned from this statement is that an agreement must be substantively enforceable, whether by consent judgment or by other method, even if it meets the procedural requirements of rule 11. In this case, the settlement agreement could be enforced in a summary judgment without consent as long as it meets rule 11 requirements and it is an enforceable contract. Stewart, 528 S.W.2d at 118-19; Ortega-Carter v. American Int'l Adjustment, 834 S.W.2d 439, 442 (Tex.App.Dallas 1992, writ denied). This is because settlement agreements are governed by contract law. Adams v. Petrade Int'l, 754 S.W.2d 696, 715 (Tex.App.Houston [1st Dist] 1988, writ denied); Hernandez v. Telles, 663 S.W.2d 91, 93 (Tex.App.El Paso 1983, no writ); Stewart, 528 S.W.2d at 118.
E. SUBSTANTIVE REQUIREMENTS OF A CONTRACT
Appellants argue that the correspondence does not form a contract, so it is not an enforceable settlement agreement. In Texas, the applicable rule of law is that "[w]here several instruments, executed contemporaneously or at different times, pertain to the same transaction, they will be read together although they do not expressly refer to each other." Board of Ins. Comm'rs v. Great S. Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803, 809 (1951); Page Airways v. Associated Radio Serv. Co., 545 S.W.2d 184, 189 (Tex.Civ.App.San Antonio 1976, writ ref'd n.r.e.). A binding agreement may be collected from various writings between parties so long as such different writings do not conflict in respect to the terms, parties, and the like. Massey, 822 S.W.2d at 315; Graham Constr. Co. v. Walker Process Equip., 422 S.W.2d 478, 482 (Tex.Civ.App.Corpus Christi 1967, writ ref'd n.r.e.).
However, the crux of appellants' argument is that the parties intended to execute a formal contract before they entered into an enforceable settlement agreement. Appellee argues that a formal writing would merely be a "convenient memorial" in this case because the parties had agreed to the terms of the contract and complied with those terms.
Appellee is correct that parties may enter into an oral contract even though they are contemplating a formal writing. Simmons & Simmons Constr. Co. v. REA, 155 Tex. 353, 286 S.W.2d 415, 417 (1955); see Scott v. Ingle Bros. Pac, 489 S.W.2d 554, 555-56 (Tex.1972) (question of fact for the jury). When this happens, the subsequent writing is merely a "convenient memorial" of the agreement. Premier Oil Ref. Co. v. Bates, 367 S.W.2d 904, 907 (Tex.Civ.AppEastland 1963, writ ref'd n.r.e.).
The "convenient memorial" doctrine is our way of determining whether an agreement between parties was to take effect only when a formal written contract had been executed. Id. "Parties rarely express a direct intention as to the moment *264 when they conceive themselves to be bound by a contract." Simmons, 286 S.W.2d at 417. "As a consequence intention is usually an inference to be drawn by the fact finder from other facts and circumstances in evidence." Id.; see Baker v. Howard, 799 S.W.2d 450, 452 (Tex.App.Waco 1990, no writ) (intent is a fact issue for the jury).
F. REVIEWING THE SUMMARY JUDMENT PROOF
We review the correspondence between the parties' attorneys to determine whether the parties intended to enter into the agreement without a formally executed contract. The first letter was sent by appellee's attorney, Mathew Witt. Dated November 3, 1989, this letter offers $15,000 to settle appellants' hull damage claim against appellee. Witt's next letter, dated November 28th, offers the tender of $27,596.02 for the hull damage claim. The letter states that the tender may be withdrawn if appellee is required to continue defending the suit or present witnesses for deposition.
On February 6, 1990, a letter of "acceptance" for this proposal was sent by appellants' attorney, Fred Meier. This letter states that "in exchange we will sign a full release of all claims with respect to our third party claim" against appellee. This "acceptance" is conditioned on appellee presenting witnesses for deposition. On February 9th, Witt notified Meier that he would send a settlement agreement in accordance with the "concerns" of Meier's letter. Witt wrote: "I am glad we were able to settle this to the mutual advantage of our clients."
The settlement documents were sent to Meier on March 5th. These documents were: an Agreed Motion for Dismissal; an Agreed Order of Dismissal; and the Compromise Settlement Agreement and Full Release of Claims. These documents released appellee from all of appellants' claims, reflecting Meier's letter of February 6th. On March 14th, Meier sent revised documents to Witt for approval. He asked appellee to prepare the settlement check in order to enable the parties to exchange the signed release documents for the check. In a letter dated March 15th, Witt asked to review the modified text; he apparently had not yet received Meier's March 14th letter. Meier's next letter, dated March 19th, informed Witt that the signed documents would be forwarded to him as soon as they were returned from appellants. On March 21st, Witt sent the check to Meier, asking that neither Meier nor appellants endorse it until appellants signed and returned the documents.
However, on May 15th, a letter from Meier indicated that Witt was aware that the proposed settlement had been under further review because of the release for the indemnity and contributions claims. The letter informed Witt that appellants decided to reject the proposed settlement. The tendered check was returned. Meier's last letter in the record is dated June 12th. This letter returns the settlement draft, stating in clear terms that the settlement had not been negotiated and would not be negotiated. The letter further revokes approval for a consent judgment.
Viewing this evidence in the light most favorable to appellants, we hold that appellee did not prove as a matter of law that a formal contract was merely a "convenient memorial." Appellee's attorney, Witt, was the first to offer to reduce the terms to writing. The documents, written by Witt, had places for the parties' signatures. Both attorneys' acts indicate that the parties' official assent to the documents was necessary. Meier requested an exchange of the check with the formally executed contract. Witt requested Meier to hold the check until the agreement was signed and delivered.
"`[A] writing is necessary only when at least one of the parties has sufficiently expressed his intention not to be bound without one.... If the reduction of the agreement to writing is thus made necessary, an assent to the writing as a sufficient one must also be manifested; this manifestation commonly consists of signing and delivery.' Corbin on Contracts, Vol. 1, §§ 31 and 32, pp. 85 and 92." Simmons, 286 S.W.2d at 418 (footnote omitted). The reasonable inference from the evidence is *265 that both parties' awaited assent to the writing through the manifestation of their signatures. We cannot hold that a settlement agreement was entered into before it was formally executed. Thus, we sustain appellants' first point of error and hold that the trial court erroneously granted summary judgment in appellee's favor. Because we have reversed the trial court's holding on this point, appellee is not entitled to attorney's fees. LaFreniere v. Fitzgerald, 669 S.W.2d 117, 119 (Tex.1984).
At this point, we consider whether the court should have granted appellants' motion for summary judgment. Reviewing the above evidence in appellee's favor, we cannot say that the evidence proves that the parties intended to execute a formal contract before they would be bound to the contract. From February 9th on, Witt refers to the settlement agreement as if it is complete and binding. Appellee tendered the check and a witness for deposition, pursuant to the agreement. The reasonable inference from these actions is that the parties' only intent with regards to a formal document was that it be a "convenient memorial."
The inferences from the evidence conflict as to whether the parties intended to enter into an agreement without a formally executed contract. Because of this, we can only conclude that there is a genuine issue of material fact as to whether the parties intended to execute a formal contract. Thus, we uphold the trial court's denial of appellants' motion for partial summary judgment. Because there is a genuine issue of material fact as to the formation of a contract, we do not determine its terms, whether it meets rule 11 procedural requirements, or whether it should be enforced as a matter of equity even if it did not meet rule 11 requirements.
There is a genuine issue of material fact as to whether the parties intended to enter into a settlement agreement before a formal contract was executed. Thus, we reverse the trial court's grant of summary judgment and attorney's fees in appellee's favor and remand to the trial court for proceedings consistent with this court's opinion; and affirm the trial court's denial of summary judgment in appellants' favor. Costs on appeal are to be divided equally between appellants and appellee. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1503830/ | 791 F. Supp. 563 (1992)
UNITED STATES of America, et al.
v.
Francis STREETT, Jr.
Civ. No. JFM-91-2184.
United States District Court, D. Maryland.
January 14, 1992.
*564 David I. Salem, Office of U.S. Atty., Baltimore, Md., for U.S.
Francis E. Streett, Jr., pro se.
MEMORANDUM
MOTZ, District Judge.
The United States of America and Lewis L. Kubiet, a revenue officer with the Internal Revenue Service, (referred to collectively as "the government"), have filed a petition pursuant to §§ 7402 and 7604 of the Internal Revenue Code (the "Code") for enforcement of an IRS summons issued to Francis E. Streett, Jr. of Parkton, Maryland. Streett has moved to quash the summons. The government's petition for enforcement will be granted and Streett's motion to quash will be denied.
I.
On February 27, 1991, Kubiet personally served Streett with an IRS administrative summons issued pursuant to § 7602 of the Code. The summons ordered Streett to appear at IRS offices in Baltimore on March 15, 1991 and produce all records in his control that reflect income he received for the years 1980 through 1989. IRS records indicate that Streett has not filed an income tax return for those years.
The summons is a Collection Summons, Form 6638 (Rev. 4-89). Form 6638 is a three-part form, each part consisting of a single page: the original summons (Part 1), an identical copy for service (Part 2) and a notice sheet for third-party recipients (Part 3). The form provides space for entering the name and address of the person summoned, the tax years for which information is sought and the time and place for appearance. At the foot of the form appears the language "Issued under the authority of the Internal Revenue Code" followed by a space for the date, under which are signature lines for the issuing officer and if applicable, the approving officer. Information entered on the face of Part 1 is transferred to Part 2 by means of carbon paper. Printed on the reverse of Part 1 is a Certificate of Service of Summons; the reverse of Part 2 contains relevant provisions of the Code for the taxpayer's reference. All three parts are joined at the top by an adhesive band.
*565 Consistent with the instructions to Form 6638, Kubiet served Streett with Part 2, bearing an accurate carbon copy of the information entered on Part 1, including Kubiet's signature. Kubiet then completed the Certificate of Service of Summons located on the reverse of Part 1. He checked the box indicating that he had "handed an attested copy of the summons to the person to whom it was directed," under which he wrote Streett's full name and address. Kubiet also entered the date and time of service and signed the certificate.
Streett contacted the IRS before the date scheduled for his appearance. By letter dated March 11, 1991, he advised Kubiet that he would not meet with any IRS official unless Kubiet or the IRS first answered a host of legal and administrative questions and provided certain information, including Kubiet's home address and telephone number. The letter was studded with various administrative, statutory and case-law citations which, in Street's opinion, cast doubt on the legality of the summons. Street closed by stating that the letter was intended as a challenge to Kubiet's authority. On April 1, 1991, district counsel for the IRS wrote to Streett and offered him a second opportunity to appear on April 15th. The letter did not provide the information requested by Streett. Streett did not appear.
On August 2, 1991, the government filed this petition for enforcement of the February 27th summons. A show-cause hearing was scheduled for September 12th. Shortly before the hearing, Streett filed his motion to quash the summons, contending that: (1) the copy of the summons that Kubiet served on him was not an "attested copy" within the meaning of § 7603 of the Code; (2) the regulations implementing the relevant provisions of the Code do not apply to him since he has not engaged in activities dealing with alcohol, tobacco or firearms; and (3) the IRS failed to notify him, as required by Treasury Order No. 24 (1986), that he was under an obligation to keep income records. Because the government had not had an opportunity to file a memorandum in opposition to Streett's motion, I set a briefing schedule at the hearing. The parties have now filed supplemental memoranda, and the case is ripe for decision.[1]
II.
Section 7602 of the Code authorizes the IRS to issue an administrative summons "[f]or the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax ..., or collecting any such liability." Section 7604 provides for enforcement of the summons by the district court for the district in which the taxpayer resides. In order to obtain judicial enforcement under § 7604, the government must show:
that the investigations will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to that purpose, that the information sought is not already within the Commissioner's possession, and that the administrative steps *566 required by the Code have been followed in particular, that the "Secretary or his delegate," after investigation has determined the further examination to be necessary and has notified the taxpayer in writing to that effect.
United States v. Powell, 379 U.S. 48, 57-58, 85 S. Ct. 248, 255, 13 L. Ed. 2d 112 (1964); Hintze v. IRS, 879 F.2d 121, 126 (4th Cir. 1989) (quoting Powell). The taxpayer may then challenge the summons on any appropriate ground. Id.
To establish a prima facie case for enforcement, the IRS need only present "`an affidavit of an agent involved in the investigation averring the Powell good faith elements.' No probable cause standard need be met." Id. (quoting Alphin v. United States, 809 F.2d 236, 238 (4th Cir.), cert. denied, 480 U.S. 935, 107 S. Ct. 1578, 94 L. Ed. 2d 768 (1987) (citations omitted)). The party challenging the summons then "assumes the heavy burden of disproving the actual existence of a valid civil tax determination or collection purpose." Id. (citing United States v. LaSalle Nat'l Bank, 437 U.S. 298, 316, 98 S. Ct. 2357, 2367, 57 L. Ed. 2d 221 (1978)). Here, the government has appended to its petition a declaration signed by Kubiet averring the Powell requirements, including proper service of the summons, and thus has met the initial burden for enforcement.
III.
Streett's principal challenge to the summons rests on the fourth Powell requirement that the IRS failed to follow the administrative steps required by the Code because the summons he received was not an "attested copy" under § 7603. Section 7603 provides that a summons issued under § 7602 "shall be served by the Secretary, by an attested copy delivered in hand to the person to whom it is directed, or left at his last and usual place of abode." Streett argues that a carbon copy of the original summons, even if an accurate copy, is not an "attested copy." In order to be "attested," he maintains, the summons must bear a separate, signed notation that it is a correct copy of the original. Since the summons was not so "attested," the government's petition for enforcement should be denied.
Neither the statute nor the regulations promulgated thereunder, Treas.Reg. § 301.7603-1, define the necessary attributes of an "attested copy." Nor is there any relevant legislative history. There is, however, a very recent Eighth Circuit decision that addresses the issue directly, Mimick v. United States, 952 F.2d 230 (8th Cir.1991). In Mimick, the court of appeals reversed the district court decision, Mimick v. United States, 91-1 U.S.Tax.Cas. ¶ 50,070 at 87, 282, 1991 WL 34445 (D.Neb. 1991), on which Streett relies to challenge enforcement of the summons.
The taxpayers in Mimick sought to quash IRS administrative summonses served on them as well as two third-party recordkeepers. The circumstances of service were, for practical purposes, identical to those here. The summonses actually served were carbon copies of the originals retained by the IRS. And the IRS agent who served the summonses certified that he had handed "attested copies" of the summonses to the taxpayers and the recordkeepers. The agent testified that he had compared the service copies with the originals to make sure that they were correct; however, the service copies bore no signed notation that they were, in fact, accurate copies of the originals. Noting the absence of any reported decisions or case law defining "attested copy" under § 7603, the district court looked to Black's Law Dictionary for guidance. According to Black's, an "attested copy" of a document is "one which has been examined and compared with the original, with a certificate or memorandum of its correctness, signed by the persons who have examined it." Although the agent had examined the copies for deviation from the originals, the court reasoned, his failure to add a signed notation to that effect meant that the summonses were not "attested copies" within the meaning of § 7603. Since an administrative step required by the Code was not followed, Powell, 379 U.S. at 58, 85 S.Ct. at 255, the district court granted the taxpayers' motion to quash and denied the *567 government's petition for enforcement. 91-1 U.S.Tax.Cas. at 87,283.
On appeal, the Eighth Circuit agreed with the district court's construction of § 7603 but provided a more sophisticated explanation for its reading. The court noted the origin of the "attested copy" requirement of § 7603 in the Act of July 13, 1866, § 9, 14 Stat. 98, 102. Citing a contemporary definition of the verb "attest," Webster's Dictionary (rev. ed. 1864), the court concluded that the 39th Congress had likely intended to require a separate attestation that the summons served was a true copy of the original. Of course, in an age when copies of original documents were handwritten, a separate, signed certificate was the only way to assure the summoned party that the copy was in fact accurate. As in this case, the government contended that the subsequent development of carbon paper and other copying technologies means that service of a carbon copy satisfies the statutory requirement today, whatever the necessity of a separate attestation in the past. However, the court declined to infer "that Congress would, if it considered it, no longer require a separate attestation of copies of the original summons especially in light of the ease with which documents may be made to appear genuine by the use of modern technology." It also noted that Congress had reenacted the provision several times without change, most recently in 1986. The court thus held that the carbon copies served by the IRS were not "attested copies" within the meaning of § 7603. Mimick, 952 F.2d at 231-32.
While the Eighth Circuit's reasoning is plausible, it is not necessarily convincing. It does seem eminently correct, as the court posited, that the 39th Congress, in enacting the original "attested copy" provision, intended that a revenue summons be served with a separate attestation. However, that fact does not necessarily mean that Congress had the same intent when it last enacted § 7603 in 1986. Presumably, the IRS was using Form 6638 and similar forms to serve "attested copies" of summonses in 1986. If that is so, although Congress failed to change the statutory language as first enacted, it also failed to direct that administrative deviation from the form of summons originally required should be corrected. Thus, the silent reenactment of § 7603 supports conflicting inferences: either Congress intended to perpetuate the original procedural requirement or tacitly endorsed what had become the prevailing procedure of using carbon copies.
I need not decide that question, however. Despite its finding that the summonses failed to comport with Code requirements, the Eighth Circuit in Mimick held that the violation did not preclude enforcement of the summonses. The court relied on its own precedent, United States v. Swanson, 772 F.2d 440 (8th Cir.1985), where it held that failure to follow the procedures set forth in an IRS delegation order did not automatically render a summons unenforceable. In Swanson, the Eighth Circuit adopted the standard for enforcement of an IRS summons applied by the Fifth Circuit in United States v. Payne, 648 F.2d 361, 363 (5th Cir.1981), cert. denied, 454 U.S. 1032, 102 S. Ct. 570, 70 L. Ed. 2d 476 (1981): the court must "`evaluate the seriousness of the [procedural] violation under all the circumstances, including the government's good faith and the degree of harm imposed by the unlawful conduct.'" 772 F.2d at 441 (quoting Payne). Applying this standard in Mimick, the court found that the failure of the IRS to comply with § 7603 was in good faith and that because the summonses were true copies, though unattested, the summoned parties had suffered no harm as a result of the government's error. Mimick, 952 F.2d at 232. Several other courts have reached the same conclusion under similar circumstances. See Payne, 648 F.2d at 363 (improper service under § 7603); Holifield v. United States, 677 F. Supp. 996, 998 (E.D.Wis.1987) (insufficient notice under § 7609); United States v. Hamilton Fed. Sav. & Loan Ass'n, 566 F. Supp. 755, 760 (E.D.N.Y.1983).
Under the standard applied in Mimick, Streett's challenge to the summons under § 7603 fails. Nothing here suggests that the failure of Kubiet to serve Streett with *568 an "attested copy" was not a good-faith error. Nor is there doubt that the IRS had legitimate reasons to investigate Streett's taxpaying history and issue the summons. The summons clearly serves the purposes of § 7602: the information sought by the IRS is necessary to determine Streett's income for the years in question and the amount of tax he might owe. See United States v. LaSalle Nat'l Bank, 437 U.S. 298, 316, 98 S. Ct. 2357, 2367, 57 L. Ed. 2d 221 (1978) (purpose of good-faith inquiry is to determine whether IRS is honestly pursuing goals of § 7602). Similarly, Streett cannot point to any material harm that he suffered as a result of the lack of a separate attestation. The service copy was a correct copy of the original summons, see Mimick, 952 F.2d at 231, and since Kubiet served Streett personally, Streett could be reasonably sure that the summons was what it purported to be.
IV.
Streett makes two subsidiary arguments. The first of his arguments is difficult to understand but apparently goes as follows: The Bureau of Alcohol, Tobacco and Firearms (ATF), an agency of the Treasury Department, has specific authority to implement §§ 7601-7606 of the Code pursuant to 27 C.F.R. § 70.22; since these regulations do not pertain to the IRS and since Streett has not engaged in activities involving alcohol, tobacco or firearms, the IRS was without power to issue the summons under § 7602.
To support this argument, Streett cites to a page from the index to the C.F.R. indicating the regulations that provide ATF with authority to implement the relevant Code sections. The patent flaw in the argument is that the cited ATF regulations are not the exclusive source of the government's authority to issue summonses under § 7602 of the Code. Section 7602 authorizes the Secretary of the Treasury to issue summonses for the purposes of determining the tax liability of "any person." Treas.Reg. § 301.7602-1 in turn authorizes the IRS to implement § 7602 with respect to "any person." Thus, the IRS had both statutory and regulatory authority to issue the summons.
Streett's second argument, although easier to understand, has no more merit than the first. He contends that pursuant to Treas.Order No. 24 (1986), he is entitled to individual notice before the IRS can require him to keep tax records. Treas.Order No. 24 authorizes the district directors of the IRS "to require any person, by notice served upon him, to keep such records as shall show whether or not such person is liable for tax under the [Code]." (Emphasis added). Streett reads the order out of all context. The government's interpretation is more persuasive: the order was intended to apply to those situations where the IRS would require special records in order to determine a specific tax liability, such as liability for windfall profits tax, that routine tax records might not reflect. Thus, the absence of notice under Treas.Order No. 24 would not relieve Street of his duty to maintain adequate records to enable him to file a tax return. See Jones v. C.I.R., 903 F.2d 1301, 1303 (10th Cir.1990) (citing 26 U.S.C. § 6001). Moreover, even if Streett's reading were correct, the treasury order would still afford little protection from the summons. The order authorizes the IRS to order a taxpayer to keep records. The summons, in contrast, merely calls for Streett to produce "[a]ll documents you possess or control that reflect income." Therefore, lack of notice under the treasury order would not excuse Streett from producing those income records in his possession that he has kept for other purposes.
For these reasons the government's petition for enforcement will be granted and Streett's motion to quash will be denied. The government is directed to submit a proposed form of order on or before January 24, 1992.
NOTES
[1] I anticipated that in the event that Streett's motion to quash was denied on the grounds that he has therefore asserted, he might invoke his Fifth Amendment privilege against self-incrimination with respect to the documents and the information called for by the summons. Therefore, I inquired of him at the hearing if he would, in fact, follow that course. He indicated that he would do so. Accordingly, I also requested the government to state in its supplemental memorandum its position concerning the Fifth Amendment issue. As to the tax years 1980 through 1984, the government contends that the statute of limitations for criminal prosecution has expired. This contention appears meritorious. In any event, assuming that (because of any tolling which has occurred) limitations have not expired, it appears that the Fifth Amendment issue has been mooted by the government's willingness (as expressed in its supplemental memorandum) to immunize Streett in connection with any documents and other information which he is compelled to provide. See United States v. Sharp, 920 F.2d 1167, 1170-71 (4th Cir.1990). Although the government has specifically stated only that it would "take appropriate formal steps ... to ensure that Mr. Streett will not be prosecuted criminally with respect to taxpayer information requested from 1985-89," presumably it has no substantive objection against taking such steps with respect to years as to which it contends that limitations have expired. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2425387/ | 867 S.W.2d 409 (1993)
Delayne Nell GARCIA, Appellant,
v.
Glynn ANDREWS d/b/a Mo-Vac Service Company, Nick Tiller, and Mo-Vac Service Company, Inc., Appellees.
No. 13-92-224-CV.
Court of Appeals of Texas, Corpus Christi.
December 9, 1993.
*410 Jose R. Guerrero, Montalvo & Ramirez, McAllen, for appellant.
Raymond A. Cowley, David H. Jones, Jarvis & Kittleman, McAllen, for appellees.
Before SEERDEN, C.J., and KENNEDY and GILBERTO HINOJOSA, JJ.
OPINION
SEERDEN, Chief Justice.
This is an appeal from the granting of a summary judgment in favor of the defendants, where appellant's sole cause of action was for the intentional infliction of emotional distress. The appellant complains, by four points of error, of the admission of certain summary judgment evidence, that there were genuine issues of material fact presented on defendant Tiller's outrageous conduct and on appellant's severe mental anguish, that her common law action is not preempted by the Texas Commission On Human Rights Act, and that appellant was wrongfully denied the opportunity to amend her pleadings to encompass piercing of the corporate veil to reach defendant Andrews. We affirm.
Factual Background
Appellant Delayne Nell Garcia was employed by Mo-Vac from August 28, 1989, until she was discharged one month later on September 29, 1989. On May 7, 1990, appellant filed a complaint with the Texas Commission on Human Rights alleging sexual harassment and retaliation in violation of the Texas Commission on Human Rights Act (TEX.REV.CIV.STAT.ANN. art. 5221k (Vernon 1987)). On October 24, 1990, appellant abandoned her claim with the Commission and commenced this common law action for intentional infliction of emotional distress against the appellees, alleging the same facts that were asserted in her complaint to the Commission. Appellant complains of three acts committed by Tiller. On the day Mo-Vac hired her, Tiller, a corporate manager, came into the office to meet her. He was observing her from top to bottom, which made her feel as if he was undressing her, and that made her feel very uncomfortable. He did not approach her, nor stand close to her. On another occasion, when she was working alone in her office, Tiller came in and flicked the lights off and on and asked her if she did her best work in the dark. On the final occasion, Tiller spoke to her through a plexiglass reception window and inquired about the magazine she was reading. After she told him it was a woman's magazine, he told her about a woman's magazine his wife had brought home the night before which told of the different sizes and shapes of men and what they did right or wrong "in the sack." This conduct, to which the appellant never consented, left her "wordless and embarrassed." Because she asserted that Tiller acted within the course and scope of his *411 employment, Mrs. Garcia sued the remaining defendants on a theory of vicarious liability for Tiller's actions. On January 9, 1992, the trial court granted the appellees' motion for summary judgment and dismissed all of the appellant's claims. From this final judgment, Garcia now appeals.
Standard of Review
The motion for summary judgment alleged numerous grounds upon which dismissal of the cause could be based. The order granting summary judgment does not state the specific ground on which it was granted. Therefore, the summary judgment must be affirmed if any of the theories are meritorious. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989). In reviewing a summary judgment, the movant has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). Evidence favorable to the non-movant will be taken as true, and every reasonable inference must be indulged in favor of the non-movant. Id.
Evidentiary Challenge
Appellant's first point of error complains of the admission of the excerpts from her deposition. These excerpts constituted the summary judgment proof. The appellant contends that the appellees failed to comply with Rule 166a of the Texas Rules of Civil Procedure concerning use, as summary judgment proof, of discovery products that are not previously on file with the trial court. Excerpts from depositions are competent summary judgment evidence when the party offering them attaches a copy of the court reporter's certificate and his own affidavit certifying that the copy is true and correct. See Prowse v. Schellhase, 838 S.W.2d 787, 789 (Tex.App.Corpus Christi 1992, no writ). The affidavit of the Deputy Clerk of Hidalgo County verifies that the excerpts of Garcia's deposition were attached as an exhibit to appellees' summary judgment motion, and were properly accompanied by the court reporter's certification and by the affidavit of the appellees' attorney certifying the copies as true and correct. Therefore, the excerpts may constitute competent proof if the appellees have complied with the other stipulations of Rule 166a.
Because the deposition of Mrs. Garcia was not previously on file with the court, appellees must comply with section (d) of Rule 166a which stipulates in part:
Discovery products not on file with the clerk may be used as summary judgment evidence if copies of the material, appendices containing the evidence, or a notice containing specific references to the discovery or specific references to other instruments, are filed and served on all parties together with a statement of intent to use the specified discovery as summary judgment proofs: (i) at least twenty-one days before the hearing if such proofs are to be used to support the summary judgment;
TEX.R.CIV.P. 166a(d) (emphasis ours). There is no contention that the excerpts were not filed timely. The appellant asserts, however, that appellees failed to file and serve on all parties the required statement of intent to use the specified discovery as summary judgment proofs.
The appellees here timely filed their motion for summary judgment which referenced, specifically by page number, the deposition excerpts which they were offering as proof for their motion. Additionally, appellees either directly quoted, or paraphrased the substance of the deposition testimony upon which they relied. The excerpts were actually attached to the motion as "Exhibit D" and incorporated therein. Appellees did not file a separate notice of intent to use the deposition excerpts as summary judgment proof. However, numbered paragraph twenty-six of appellees' motion reads: "This motion is based upon the sworn summary judgment evidence attached hereto, and the pleadings on file with this Court." The question presented here, one of first impression, is whether the language of paragraph twenty-six, situated as it is within the text of the summary judgment motion itself, constituted a statement of intent to use the specified discovery as summary judgment proof, or whether separate notice is required. Nothing *412 in the rule requires the "statement" to be independent of the motion itself. Therefore, because the statement in the appellees' motion is unambiguous and clearly indicates, to the trial court and to the parties, that the appellees intended the attached deposition excerpts to serve as summary judgment proof, we hold that it did constitute a statement of intent. Appellant's first point of error is overruled.
Outrageous Conduct
Appellant's third point of error asserts that there are material fact issues concerning the conduct and distress elements of her claim for intentional infliction of emotional distress. To maintain such an action, appellant Garcia must show: 1) that Tiller acted intentionally or recklessly; 2) that Tiller's conduct was extreme and outrageous; 3) that Tiller's actions caused her emotional distress; and 4) that the emotional distress she suffered was severe. See Twyman v. Twyman, 855 S.W.2d 619, 734 (Tex.1993). Proving intentional conduct, even conduct meant to cause distress, is not sufficient. To maintain a cause of action, appellant Garcia must show that a fact issue exists concerning the separate essential element of "extreme and outrageous conduct." Wornick Co. v. Casas, 856 S.W.2d 732, 736 (Tex.1993). Appellant Garcia invites this Court, as a matter of public policy, to define a "reasonable woman" standard to determine what constitutes conduct that is "extreme and outrageous" in cases of intentional infliction of emotional distress in which sexual harassment occurs. We decline the invitation. Existing policy is concerned not only with safeguarding freedom of expression, but also with the even-handed disposition of all claims without regard to whether the plaintiff is a woman or a man, is young or old, or is a member of any one of numerous and varied sub-groups in our society, each, possibly, with its own standard of decency. Fairness dictates a general societal standard where liability is found only where the conduct goes "beyond all possible bounds of decency, and [is] to be regarded as atrocious and utterly intolerable in a civilized community." Id. (quoting Restatement (Second) Torts § 46 cmt. d (1965), emphasis ours). Appellant Garcia complains only of the three acts of Tiller set out above. Even assuming that the allegations of Mrs. Garcia are true, and indulging every reasonable inference in her favor, after applying the definition set out by the Supreme Court of Texas in Wornick, we hold that there is no evidence that the conduct of appellee Tiller was either extreme or outrageous. "It is for the court to determine, in the first instance, whether the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery." Wornick, 856 S.W.2d at 734. The trial court correctly granted appellees' motion for summary judgment based on the finding that, as a matter of law, Tiller's conduct was not extreme or outrageous. Appellant's third point of error is overruled.
Having affirmed the summary judgment based on the trial court's finding that there is no genuine issue of material fact on an essential element of appellant's claim, it is not necessary to reach appellant's points two and four, which deal with additional grounds submitted to the trial court in the motion for summary judgment. Tex.R.App.P. 90(a).
The judgment of the trial court is AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1507509/ | 387 S.W.2d 915 (1965)
Mrs. O. H. ROSKEY et al., Appellants,
v.
GULF OIL CORPORATION et al., Appellees.
No. 14501.
Court of Civil Appeals of Texas, Houston.
February 25, 1965.
Rehearing Denied March 18, 1965.
*916 Charles C. Smith, Jr., Cameron, and Walter M. Hilliard, Caldwell, for appellants.
Murray G. Smyth, Houston, and James A. Gray, Caldwell, for appellee Taylor Exploration Co., Inc.
W. B. Edwards, John E. Bailey and D. D. Dent, Houston, for appellee Gulf Oil Corp.
WERLEIN, Justice.
Appellants brought this suit against Gulf Oil Corporation and Taylor Exploration Company, Inc., for damages to appellants' 54 acres of land situated in Burleson County alleged to have been caused by blasting operations conducted by appellees on adjoining lands in connection with seismograph operations conducted by appellees. Appellants alleged that by reason of such operations, their water well was damaged and the water was rendered unfit for household and domestic purposes. When appellants rested their case appellees moved the court to withdraw the case from the jury and render judgment for them. This appeal is from the order of the court granting such motion.
Appellants alleged in substance that appellees entered upon land adjacent to appellants' land, drilled holes into the ground to a depth of approximately 75 feet, and inserted therein charges of dynamite or other explosives in quantities unknown to appellants, but well known to appellees, and that the location of the test holes and exploding of the charges were wholly under the control and management of appellees. Appellants further alleged that their water well was injured and damaged as a proximate result of such explosions and consequent vibrations, and that the appellees committed such acts when they knew, or by the exercise of reasonable diligence should have known, that their operations in all reasonable probability would injure or destroy appellants' water well and fixtures, and that all of such acts constituted negligence and a proximate cause of such damage. Appellants did not plead any specific acts of negligence but in the alternative to their general allegation of negligence they pleaded res ipsa loquitur.
In determining whether it was proper for the court to take the case from the jury and render judgment, we must view the evidence in the light most favorable to appellants, and indulge against the action of the court every inference that may properly be drawn from the evidence, and if the record reflects any testimony of probative force in favor of the losing party we must hold the court's action improper. White v. White, 1943, 141 Tex. 328, 172 S.W.2d 295; Texas Employers Insurance Ass'n v. Boecker, Tex.Civ.App., 53 S.W.2d 327, error *917 ref.; Hoover v. General Crude Oil Co., 1948, 147 Tex. 89, 212 S.W.2d 140.
We shall briefly set out the evidence which appears to be most favorable to appellants. Mrs. Budnik, who lived on a tract of land adjacent to appellants' property, testified in substance that about the middle of December, 1962, a man came to her saying he represented Gulf Oil Corporation and Taylor Exploration Company, and asked her consent to drill holes on her land, and agreed to pay $10.00 for each hole and any damage resulting therefrom. She was not home when the seismograph operations occurred, but when she got home she found at her door a check for $20.00 which she said appellees paid her.
Mr. Budnik's testimony was substantially the same, except that he testified the check they found was a $30.00 check from Gulf. He also testified that he found one hole about 20 feet and another hole about 5 feet from the boundary line between his land and appellants' land and that he saw a lot of mud and muddy water on the ground and all over the trees where there had been drilling. He further testified that he had not given permission to anyone except Gulf and Taylor to conduct seismographic operations on his land. He estimated the distance between the common boundary line and the Roskey home at 1000 yards. There is evidence that the well in question was located some 600 feet from the Roskey home, but there is nothing to show whether it was nearer or farther than 1000 yards from the holes drilled on the Budnik property.
Mrs. Roskey testified that she heard a terrible noise which came from the direction of the Budnik property and it shook her whole house and rattled her windows. The next morning she found that the water from her well had changed, and was dirty and not fit to use. She also testified as to the fine quality and quantity of the water before the blasting and that afterwards the water was and remained contaminated. She further testified as to the cost of the well and certain fixtures which she claimed had been ruined by the water.
Appellants' witness Hughes, who lived near the Roskey and Budnik tracts of land, testified that he knew they were conducting seismograph testing in that area; that he heard an explosion and that the vibrations caused his house to shake and the windows in his house to rattle, and that the next day after the blasting his well got all sanded up. He said his residence was approximately three-fourths of a mile from the Budnik property, and that the blast came from the general direction of the Budnik property. He also testified that he had to expend $70.00 for two filtering units to filter the sand out of his well water. He didn't know that the seismograph crew caused the blasting but he did know they were conducting seismograph operations in the general area, and that Taylor Exploration Company was doing the seismographing. He also testified that he knew the water piped in the Roskey home after the blasting was unfit for human consumption.
Mr. Nelson, who had drilled the Roskey well in May, 1961, testified the well was 277 feet deep and was equipped with a Gould's pump, and that it had good water and a lot of it; that in September, 1963, which was approximately nine months after the blasting, at the request of Mrs. Roskey, he went to the well site and that the water was then the worst water he had ever seen. It was his opinion that the changed condition in the water was due to another water coming in and that an explosion could cause another water to come in the well; and that in his opinion the sand was fractured allowing some other water to come into the sand. He also testified as to a log made when he drilled the well, the different strata penetrated, the cost of making the well and what it would cost to drill another well.
Appellants rely both upon negligence which was pleaded generally and upon the doctrine of res ipsa loquitur. In their argument before this Court appellants in effect conceded that if the decision of the San *918 Antonio Court of Civil Appeals, in Stanolind Oil & Gas Company v. Lambert, 222 S.W.2d 125, correctly enunciates the rule of law applicable to suits brought to recover damages growing out of seismograph operations, they have failed to establish liability. It is their contention, however, that the instant case falls within the holding of McKay v. Kelly, Tex.Civ.App., 229 S.W.2d 117, aff'd 149 Tex. 343, 233 S.W.2d 121, and similar cases. In the McKay case, the plaintiffs alleged negligence generally and also relied upon the doctrine of res ipsa loquitur. The Supreme Court held that there was some evidence which would sustain a finding of negligence on the defendant's part without applying the doctrine of res ipsa loquitur. The Court of Civil Appeals had indicated that such doctrine was applicable. In the McKay case the defendant used explosives in mining caliche. It was shown that simultaneously with the explosions in the defendant's caliche pit, which was between 700 and 1200 feet from the plaintiffs' premises, the whole premises were shaken, cracks appeared in the walls, chimney and fireplace of their home, objects were shaken out of a cabinet to the floor, a wall "buckled out," large "pieces of rock" fell off the rock walls of the home, and a fairly good-sized rock fell from the fireplace. Following the explosions, doors stuck, part of a wooden door was pulled apart, the floors sagged and were weakened, the garage was pulled away from the house, the corners of the downstairs rooms were pulled apart, a big crack appeared in the concrete porch, water in the wells became clouded, and the butane gas line burst.
It seems clear in the McKay case that since a tremendous amount of damage was done to the home simultaneously with the explosion some 700 to 1200 feet distant therefrom and the expert testimony was to the effect that an unnecessary amount of explosive had been used, there was some evidence which would have sustained a finding of negligence. The court held that one test of negligence in a case involving explosives is whether an excessive amount of explosives is used; that is, a quantity greater than was reasonably necessary in the blasting operations and greater than would be used by a person under the same or similar circumstances in the exercise of ordinary care in operating such a pit or quarry. Universal Atlas Cement Co. v. Oswald, 138 Tex. 159, 157 S.W.2d 636; Comanche Duke Oil Co. v. Texas Pac. Coal & Oil Co., Tex.Com.App., 298 S.W. 554.
We agree that the doctrine of res ipsa loquitur may be applied to explosion cases under certain circumstances. McKay v. Kelly, Tex.Civ.App., 229 S.W.2d 117. In Honea v. Coca Cola Bottling Co., 143 Tex. 272, 183 S.W.2d 968, 160 A.L.R. 1445, the rule is well stated as follows:
"Res ipsa loquitur is a rule of evidence whereby negligence of the alleged wrongdoer may be inferred from the mere fact that the accident happened, provided (1) the character of the accident and the circumstances attending it lead reasonably to the belief that, in the absence of negligence, it would not have occurred, and (2) the thing which caused the injury is shown to have been under the management and control of the alleged wrongdoer."
See also Yarbrough's, Inc. v. McNabb, Tex. Civ.App., 222 S.W.2d 274, writ ref., n. r. e.; Weingarten, Inc. v. Gauthier, Tex.Civ.App., 305 S.W.2d 181; Coca Cola Bottling Company v. Thomas, Tex.Civ.App., 263 S.W.2d 644, writ ref., n. r. e.; Montgomery Ward & Co. v. Scharrenbeck, Tex.Civ.App., 199 S.W.2d 830, aff'd, 146 Tex. 153, 204 S.W.2d 508.
It is our view, however, that the trial court properly refused to apply the doctrine of res ipsa loquitur under the facts and circumstances of the instant case. In this case the most that can be said is that there was a loud noise or blast and simultaneously with it appellants' house shook and the windows rattled. No damage resulted to the house, and, as far as the *919 record shows, no damage resulted immediately to appellants' well or fixtures. The next morning the water from the well was dirty. The evidence shows that the dirty water probably resulted from some other water getting into the water sand from which appellants had been pumping their water. There is no evidence as to where the sand was fractured, if it was in fact fractured. It might have been fractured near appellants' well, or, as far as the record shows, some distance therefrom. There is no evidence as to the distance from the holes drilled on the Budnik property to the Roskey well, although Mr. Budnik estimated the distance from such holes to the Roskey home at 1000 yards. There is no evidence as to the depth of the holes drilled on the Budnik property, or of the quantity or nature of the explosives used, or the depth at which such explosives were detonated. There is no expert or other testimony relative to the customary or usual manner of conducting such seismograph operations in geological structures such as involved in the present case, or as to the standard used in connection therewith, or that there was any departure from such standard. There is no evidence showing that the seismograph operations in question and the blasting were not conducted in the customary and usual manner, or according to the usual and accepted standards, or that the amount of explosives used was unreasonable or unnecessary, or that the loads of explosives used or the blasts therefrom were greater than customary, or that the accident would not have occurred in the absence of negligence on the part of appellees.
We have read the entire statement of facts and are of the opinion that the insufficiency of appellants' proof brings the present case within the rule enunciated in Stanolind Oil & Gas Co. v. Lambert, supra, wherein the court, speaking through Justice Norvell, said:
"It is in the particular mentioned that appellee's proof is deficient. We have carefully read the entire statement of facts in the case and find no evidence therein relating to the usual and ordinary course of operations in doing exploratory work with a seismograph in geological structures such as that here involved. There must be a standard shown before a departure from that standard may be inferred from occurrences which result in damage. In a case such as this, the matter is one for proof and can not be supplied by common knowledge, as it is in some res ipsa loquitur cases. We do not judicially know the details of exploratory operations by use of a seismograph, so that we can say that damage to appellee's wells indicates a departure from the norm and raises an inference of negligence. See, Comanche Duke Oil Co. v. Texas Pac. Coal & Oil Co., Tex.Com.App., 298 S.W. 554. Obviously, any attempt to do so upon the record before us would be to run counter to the holding of Indian Territory Illuminating Oil Co. v. Rainwater, Tex.Civ.App., 140 S.W.2d 491, and, in effect, hold appellant liable as an insurer."
In Klostermann v. Houston Geophysical Co., Tex.Civ.App., 315 S.W.2d 664, writ ref., the court, speaking through Justice Pope, concluded that Texas is committed to the rule that seismographic operations fall within the tort field of negligence law. The court cited Stanolind Oil & Gas Co. v. Lambert, supra; Seismic Explorations v. Dobray, Tex.Civ.App., 169 S.W.2d 739, and Universal Atlas Cement Co. v. Oswald, 138 Tex. 159, 157 S.W.2d 636. In the Lambert case the court said: "Under a proper set of fact circumstances, the doctrine (res ipsa loquitur) could undoubtedly be relied upon. 22 Am.Jur. 212, § 95, although in most cases it would afford a rather indirect approach to the fixing of liability." See also Sinclair Oil & Gas Company v. Gordon, Tex.Civ.App., 319 S.W.2d 170; Dellinger v. Skelly Oil Co., Tex.Civ. App., 236 S.W.2d 675, writ ref., n. r. e.; *920 Humble Oil & Refining Co. v. Grucholski, Tex.Civ.App., 376 S.W.2d 950, writ ref., n. r. e.
Although seismographic operations fall within the tort field of negligence, as concluded by the Court in Klostermann v. Houston Geophysical Co., supra, negligence in such cases might be established inferentially under a proper set of fact circumstances by invoking the application of the doctrine of res ipsa loquitur. In our opinion appellants' proof failed to establish a set of fact circumstances which would warrant the application of and reliance upon such doctrine.
Judgment affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1587490/ | 709 F. Supp. 120 (1987)
Linda BURKE, Individually and as Next Friend of Matthew Peschel, a minor
v.
AUSTIN INDEPENDENT SCHOOL DISTRICT, et al.
Civ. No. A-86-CA-625.
United States District Court, W.D. Texas, Austin Division.
March 18, 1987.
*121 Larry Watts, Watts & Company, P.C., Houston, Tex., for plaintiff.
James R. Raup, McGinnis, Lochridge & Kilgore, Austin, Tex., for defendants.
ORDER
NOWLIN, District Judge.
Before the Court are Defendants' Motion to Dismiss and Plaintiff's Motion to Remand. This case was originally filed in state court; Defendants removed the case to this Court on November 20, 1986. On December 1, 1986 the Defendants filed their Motion to Dismiss, arguing that Plaintiff's complaint failed to state a claim upon which relief may be granted. The Plaintiff responded to the Motion to dismiss on December 19, 1986, by arguing that Plaintiff did not intend to and did not raise a federal claim in her complaint. She thus requested the Court to remand the case to state court. The response does not address any of the substantive legal arguments supporting dismissal, but rather only seeks remand of the case to state court. The Court, having considered the motions, as well as the responses thereto, in addition to all of the pleadings on file in this cause, is of the opinion that the Motion to Remand should be DENIED and the Motion to Dismiss should be GRANTED.
I. INTRODUCTION
This is a suit to recover damages for personal injuries the Plaintiff's son suffered while in a woodwork class at Crockett High School in the Austin Independent School District. Plaintiff seeks to recover $1,000,000.00 from the woodwork instructor, the school principal, the school district, its present and former Trustees, and its Superintendent. Plaintiff argues that the Defendants' negligence and/or gross negligence states a claim for deprivation of Plaintiff's son's Fourteenth Amendment rights, and also provides her with a claim under the nuisance law of Texas.
II. MOTION TO REMAND
The Defendants removed this case on December 1, 1986, arguing that this Court has jurisdiction over this case under 28 U.S.C. §§ 1331 and 1343(a)(4), and that the case was therefore removable pursuant to 28 U.S.C. § 1441. Plaintiff responds that she "did not allege a 1983 action in her original petition. No federal question existed to predicate jurisdiction upon this Court; she was correct in filing in state court." As Defendants rightly point out, Plaintiff's original petition contains the following allegations:
Liability of Defendants
A. Civil Rights:
Plaintiff would show that her son had protected property interest and liberty interest in his bodily integrity and in the rules and regulations of the Texas Education Agency.
B. Substantive Due Process:
*122 1. Plaintiff would show that Matthew Peschel had acquired a liberty interest in his right to attend public education facilities free from improperly maintained, therefore danagerous [sic] equipment, and that said liberty interest is protectible under the Fourteenth Amendment to the Constitution of the United States.
2. Plaintiff would show that Matthew Peschel was denied that liberty interest in violation of his rights to substantive due process as secured to him by the Fourteenth Amendment to the Constitution of the United States, in that the State of Texas, pursuant to the Texas Education Code § 21.032, requires compulsory school attendance. The school failed to provide safe and properly maintained equipment for students' use and adequate classroom instruction and supervision. Said failure on the part of all Defendants was the proximate and producing cause of Matthew's injuries.
Plaintiff's Original Petition at 4-5. Technically speaking, Plaintiff is correct in her statement that she "did not allege a 1983 action," as she never invokes that statute in the petition. The petition clearly invokes, however, the Fourteenth Amendment to the United States Constitution, and argues that Plaintiff is entitled to recover damages against Defendants under the Fourteenth Amendment.
The applicable statute in this case, 28 U.S.C. § 1441(b) provides for the removal of actions "founded on a claim or right arising under the Constitution, treaties or laws of the United States." The criteria for deciding when a claim "arises under" federal law is well settled:
To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another.
Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 57 S. Ct. 96, 97, 81 L. Ed. 70 (1936) (citations omitted). See also In re Carter, 618 F.2d 1093, 1100 (5th Cir.1980), cert. denied, 450 U.S. 949, 101 S. Ct. 1410, 67 L. Ed. 2d 378 (1981); and Coleman v. Louisville Pants Corporation, 691 F.2d 762, 764-65 (5th Cir.1982). Without question, Plaintiff's petition falls within the scope of section 1441(b), as it clearly attempts to state a claim under the Fourteenth Amendment. The alleged Fourteenth Amendment rights set out in Plaintiff's petition are essential elements to Plaintiff's cause of action. Moreover, Plaintiff's claim depends upon the construction given to the Fourteenth Amendment. Thus, the Defendants' removal of the action to this Court was proper, and the Plaintiff's motion to remand will be Denied.
III. MOTION TO DISMISS
The Plaintiff elected not to respond to the merits of the Defendants' Motion to Dismiss, and the Motion is therefore uncontested. Plaintiff's petition sets out two theories of relief: (1) the action under the Fourteenth Amendment discussed above; and (2) an action under the nuisance law of the State of Texas. A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957); Reeves v. Guiffrida, 756 F.2d 1141, 1143 (5th Cir.1985).
A. Federal Claim
As noted above, the federal claim in Plaintiff's petition is a claim under the Fourteenth Amendment.[1] The Plaintiff objects that the Defendants removed this action, only to immediately seek dismissal for failure to state a claim. She aruges that "for Defendants to use the legal system of *123 this country in such tortious manner to escape litigation of their actions is inexcusable and should not be tolerated." Plaintiff's objection is not well-founded. She has no one but herself to blame for this action having been removed. Had she not pleaded a claim under the Fourteenth Amendment the case would not be in this Court. Moreover, the clear law of the federal courts allows for the removal of an action presenting a federal question, followed by the subsequent dismissal of that action for failure to state a claim. This is because jurisdiction is determined from the face of the Plaintiff's pleadings, and the issue of whether a complaint states a claim goes to the merits of the case, and not to the jurisdiction of the court. Daigle v. Opelousas Health Care, Inc., 774 F.2d 1344, 1346-47 (5th Cir.1985).
The question this Court must therefore examine is whether Plaintiff has stated a claim upon which relief may be granted against Defendants under the Fourteenth Amendment. This question is easily answered. A little more than one year ago the Supreme Court concluded that
the Due Process Clause is simply not implicated by a negligent act of an official causing unintended loss of or injury to life, liberty or property.
Daniels v. Williams, 474 U.S. 327, 106 S. Ct. 662, 663, 88 L. Ed. 2d 662 (1986). See also Davidson v. Cannon, 474 U.S. 344, 106 S. Ct. 668, 88 L. Ed. 2d 677 (1986). Moreover, although the Supreme Court has left open the question of whether gross negligence states a claim under the Fourteenth Amendment, id., 106 S.Ct. at 667, n. 3, the Fifth Circuit has clearly stated that
One does not state a constitutional claim under section 1983 merely by alleging extraordinary negligence; one must allege `the sort of abuse of government power that is necessary to raise an ordinary tort by a government agent to the statute of a violation of the Constitution' The complaint must allege state conduct which is `sufficiently egregious as to be constitutionally' tortious.
Rankin v. City of Wichita Falls, Texas, 762 F.2d 444, 447 (5th Cir.1985), citing Hull v. City of Duncanville, 678 F.2d 582, 584 (5th Cir.1982). The Court in Rankin went to great lengths to make it clear that a claim under the Fourteenth Amendment must be directed at the "abuse of power made possible only because the wrongdoer is clothed with the authority of state law." Id. at 448. Applying those principles, the Rankin court found that the Plaintiff had failed to state a claim based upon the negligent and/or grossly negligent operation of a sewer treatment facility at which the Plaintiff's son was killed. In Daniels and Davidson, the Supreme Court also focused on the "abuse of power" element required by the Fourteenth Amendment. See 106 S.Ct. at 664-65 at 670.
It is clear from a reading of Plaintiff's petition that she cannot make a claim cognizable under the Fourteenth Amendment. Like the situation in Rankin, even if the Defendants' acts here were grossly negligent, there are no allegations that the Defendants abused the power given them as a result of their positions, or that the Defendants engaged in anything that could be labeled "egregious." Indeed, like the situation in Rankin, this case presents an ordinary negligence case that occurred on public property. As the Court in Rankin noted, these facts are insufficient to state a claim under the Fourteenth Amendment.
The Plaintiff's petition therefore fails to state a federal constitutional claim against the Defendants.
B. State Claim[2]
Plaintiff also seeks relief under a nuisance theory:
*124 Plaintiff would show that the maintenance of the woodshop premises was a nuisance to students enrolled therein and the families of those children insofar as those conditions deprived both students and their families from quietly enjoying their property interests. Said failure on the part of all Defendants was the proximate and producing cause of Plaintiff's son's injuries.
Plaintiff's Original Petition at 5. The apparent reason for Plaintiff's filing under a nuisance theory and not under a negligence theory is that an independent school district is totally immune from tort liability unless a motor vehicle is involved. TEX. CIV.PRAC. & REM.CODE § 101.051 (Vernons 1986). Barr v. Bernhard, 562 S.W.2d 844 (Tex.1978). It appears that the nuisance claim is an attempt to avoid the effect of § 101.051.
The courts of Texas have already resolved the issue presented by Plaintiff's nuisance claim, rejecting the type of claim presented by Plaintiff:
In passing upon the liability of an independent school district for personal injuries suffered by a pupil in attendance upon a free public school, no distinction can be made between nuisance and negligence. What is the difference in alleging that the agents of the school district were negligent in maintaining the ligustrum tree under all the circumstances and in alleging that under all the circumstances the ligustrum tree was a nuisance and that the agents of the school were negligent in maintaining and not abating the nuisance? The question of a nuisance becomes relevant when, by the maintenance of a nuisance, private property or property rights have been involved.
Braun v. Trustees of Victoria Independent School District, 114 S.W.2d 947, 950 (Tex.Civ.App. San Antonio 1938, writ ref'd). Thus, in cases involving damage to adjoining private property, the courts have allowed recovery. E.g., Stein v. Highland Park Independent School District, 540 S.W.2d 551 (Tex.Civ.App. Texarkana 1976, writ ref'd n.r.e.). In personal injury cases brought under a nuisance theory, however, recovery has not been allowed. Braun, 114 S.W.2d at 951.
Moreover, Texas law does not allow a Plaintiff to turn a negligence suit into a nuisance suit simply by alleging that the Defendants' negligent acts constituted a nuisance. See Jones v. City of Dallas, 451 S.W.2d 271, 274-75 (Tex.Civ.App. Dallas 1970, writ ref'd n.r.e.) and cases cited at 275. In Jones, the Plaintiff was attempting to avoid the governmental immunity of a municipality by pleading a nuisance theory in a negligence case. The court held that such an effort would be unsuccessful. Id. at 275. Other courts have reached similar results in cases involving municipalities. E.g., Bragg v. City of Dallas, 605 S.W.2d 669 (Tex.Civ.App. Dallas 1980, no writ).
Applying these principles to this case, it is clear that Plaintiff has no claim against the school district under a nuisance theory. Plaintiff's claim is that the school district failed to operate the woodshop in a manner comporting with due care, and such a claim cannot be converted into a nuisance claim. Braun, 114 S.W.2d at 950; Jones, 451 S.W. 2d at 271. The immunity of the school district therefore insulates it from liability under a state law tort theory. Braun, 114 S.W.2d at 950; § 101.051.
The result is the same for the individual Defendants. TEX.EDUC.CODE ANN. § 21.912(b) (Vernon Supp.1987) provides for the immunity of public school personnel. The only exception to the immunity is in cases involving negligence or the use of excessive force in the disciplining of a student. Id. at (c); see also Barr, 562 S.W.2d at 849. The Supreme Court of Texas has recently reaffirmed this construction of section 21.912. Hopkins v. Spring Independent School District, 736 S.W.2d 617 (Tex.1987). Plaintiff's claim does not come within this exception, and the individual Defendants are immune from liability on this basis.
IV. CONCLUSION
Because the face of the Plaintiff's complaint clearly states a claim "arising under" *125 the U.S. Constitution, it was properly removed to this Court. The Court will therefore DENY Plaintiff's Motion to Remand.
Taking all the allegations in Plaintiff's complaint as true, it is beyond doubt that the Plaintiff can prove no set of facts in support of her claim which would entitle her to relief. Thus, Plaintiff's complaint fails to state a claim upon which relief can be granted under federal or state law. The Court must therefore GRANT the Defendants' Motion to Dismiss.
ACCORDINGLY, Plaintiff's Motion to Remand is DENIED, and Defendant's Motion to Dismiss is GRANTED and this case is hereby DISMISSED FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED.
NOTES
[1] Plaintiff contends in her Response to Defendants' Motion to Dismiss and Motion to Remand that she "did not allege a 1983 action in her original Petition. No federal question existed to predicate jurisdiction upon this Court...." Although this could be construed as a waiver of her federal claim, the Court will not treat it as such.
[2] Once the federal claims are dismissed, the Court maintains the discretion to decide whether or not to exercise jurisdiction over pendent state law claims. United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966); In re Carter, 618 F.2d at 1104-1105. In this case, as will be apparent from the following discussion, it would be a waste of judicial resources for the Court to dismiss the pendent state law claims without prejudice, only to force a state court to decide the clear question of whether the claims are available to the Plaintiff in this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1634227/ | 889 S.W.2d 445 (1994)
Michael B. ROOSTH, Appellant
v.
Linda Weiner ROOSTH, Appellee.
Nos. B14-93-00329-CV, B14-93-00686-CV.
Court of Appeals of Texas, Houston (14th Dist.).
September 22, 1994.
Rehearing Overruled October 20, 1994.
*449 Shawn Casey, Houston, for appellant.
Earl S. Lilly, Judy L. Warne, Leslie Werner de Soliz, Bobbie G. Bayless, Houston, for appellee.
Before SEARS, LEE and JUNELL, JJ.
OPINION
LEE, Justice.
This is an appeal from a decree of divorce and an appeal from an order for turnover, for appointment of a receiver and for injunctive relief. We have consolidated the two appeals. In the appeal from the divorce decree, Michael Roosth raises nine points of error. In his appeal from the turnover order, Michael Roosth brings six points of error. Appellee has filed a motion to dismiss the appeal which we have taken with the case and now deny. As to the divorce decree, we affirm in part and reverse and remand in part. We affirm the turnover order as modified.
MOTION TO DISMISS
Before turning to appellant's points of error, we must address appellee's motion to dismiss the appeal. The basis of this motion is Geesbreght v. Geesbreght, 570 S.W.2d 427 (Tex.App.Fort Worth 1978, writ dism'd). Appellee quotes one sentence from this case:
The proper order of an appellate court is to dismiss the appeal where an appellant is in obvious contempt of the judgment of the trial court from which the appeal has been taken.
570 S.W.2d at 429. Because appellant has not paid ordered child support, appellee asserts that we should dismiss the appeal under authority of Geesbreght.
Texas appellate courts have dismissed appeals from divorce judgments where the appellant has refused to comply with a trial court order regarding custody. See Geesbreght, 570 S.W.2d at 429 (appellant took child and left the state); Steed v. Woods, 475 S.W.2d 814, 816 (Tex.Civ.App.Amarillo *450 1972, writ dism'd) (appellant took child and left the state); Strange v. Strange, 464 S.W.2d 216, 218 (Tex.Civ.App.Fort Worth 1970, writ dism'd w.o.j.) (appellant withheld custody from appellee). Although parties have cited these cases as authority for dismissal of appeals that do not involve custody violations, none has been successful. See O'Connor v. Sam Houston Med. Hosp., Inc., 807 S.W.2d 574, 576-77 (Tex.1991) (failure to respond to post-judgment discovery orders); Goodridge v. Goodridge, 591 S.W.2d 571, 572 (Tex.Civ.App.Dallas 1979, writ dism'd) (discovery abuse). In O'Connor, the supreme court said:
We express no opinion on whether a court of appeals may ever properly dismiss an appeal because of appellant's failure to comply with a trial court order. We hold that it was an abuse of discretion to do so in this case. Cf. Goodridge v. Goodridge, 591 S.W.2d 571 (Tex.Civ.App.Dallas 1979, writ dism'd) (limiting Geesbreght to its facts).
807 S.W.2d at 576-77. Because no authority supports dismissal of an appeal where the appellant has failed to obey a trial court order regarding child support, we decline appellee's invitation to extend the Geesbreght line of authority to such a case. We deny appellee's motion.
VISITATION
In granting the divorce, the trial court appointed appellee the sole managing conservator of the four children. The court limited appellant's possession of the children as follows:
... Michael shall have possession of the children (any of them) only at times mutually agreed to in advance by the Managing Conservator, Linda Weiner, such ruling being made in view of the facts and conditions surrounding the separation and Michael's leaving the marital home and his family, and in particular the children, the inadequate support by the father, although having ability and assets, and considering the conduct of Michael since separation to date, as well as his conduct regarding visitation during this divorce proceeding, i.e. tardiness picking up and returning the children, interference in the mother's home on numerous occasions, and in particular his use of physical force with the teenage girls and the boys, and his physical attack upon Linda in the presence of the children, his lack of sensitivity in regard to school, religious, and cultural activities, failure to provide adequate physical facilities at this time to accommodate the children, although assistance was available. It is therefore the opinion and order of the Court for the best interests of the children, that any and all visitation by the father or other contact or conversation with the children, shall be only upon agreement by Linda, and at such times, places and conditions she, in her sole discretion, may determine.
In his first three points of error, appellant challenges this portion of the decree, claiming the trial court abused its discretion because (1) no good cause was shown to support deviating from the standard possession order of TEX.FAM.CODE ANN. § 14.033, (2) the court did not file findings of fact and conclusions of law in response to a proper request and appellant cannot determine the grounds upon which the court based its visitation order, and (3) the court did not give appellant a specific period of visitation that could be enforced by the court. In point of error four, appellant claims the visitation portion of the decree must be reversed because the trial court erred in not appointing an attorney ad litem to represent the best interests of the children.
Section 14.033 sets forth the standard order regarding minimum possession of a child for a parent named as possessory conservator. See TEX.FAM.CODE ANN. § 14.033 (Vernon Supp.1994). A rebuttable presumption arises in any suit affecting the parent-child relationship that this standard order is in the best interest of the child. TEX.FAM.CODE ANN. § 14.033(k) (Vernon Supp.1994). The trial court may determine, however, that application of this standard order would be unworkable or inappropriate under the circumstances. TEX.FAM.CODE ANN. § 14.033(k) (Vernon Supp.1994). If possession of a child is contested and the court sets possession of a child at variance with the standard guidelines, the court, upon request, shall state in *451 the order the specific reasons for all deviations from the standard order. TEX.FAM. CODE ANN. § 14.033(k) (Vernon Supp.1994).
The best interest of the child is the primary consideration of the court in determining questions of possession of a child. See MacCallum v. MacCallum, 801 S.W.2d 579, 582 (Tex.App.Corpus Christi 1990, writ denied). Trial courts have wide discretion in determining the best interests of the child. Id. Because the trial court's decision regarding possession of a child is a discretionary function, we may only reverse if we conclude the trial court abused its discretion. Id. The test for abuse of discretion is whether the trial court acted without reference to any guiding rules or principles. Id.
Appellant contends that the trial court's order in this case effectively denies him visitation with his children. The privilege of frequent visits with one's children should not be denied to a parent except in extreme cases of unfitness. Tuel v. Tuel, 252 S.W.2d 203, 204 (Tex.Civ.App.Fort Worth 1952, no writ). TEX.FAM.CODE ANN. § 14.03(d) precludes a trial court from denying a parent possession of or access to a child unless the court finds "that parental possession or access is not in the best interest of the child and that parental possession or access would endanger the physical or emotional welfare of the child."
Section 14.03 sets out the guidelines for the appointment of a possessory conservator and the possessory conservator's possession of and access to children. Subsection (a) provides:
If a managing conservator is appointed, the court may appoint one or more possessory conservators and set the time and conditions for possession of or access to the child by the possessory conservators and others. If ordered, the times and conditions for possession of or access to the child must be specific and expressly stated in the order, unless either party shows good cause why specific orders would not be in the best interest of the child.
TEX.FAM.CODE ANN. § 14.03(a) (Vernon 1986). Thus, a trial court has the option of appointing or not appointing a possessory conservator. If one is appointed, the trial court must enter specific orders regarding possession or access to the child unless there is good cause why specific orders would not be in the child's best interest.[1]
Certainly, the order in this case does not set out specific times and conditions for possession or access. As good cause for this lack of specificity, the trial court listed the following factors: (1) the facts and conditions surrounding the separation and appellant's leaving the home, (2) the inadequate support by appellant, and (3) appellant's conduct since the separation, including his use of physical force with the children and appellee when the children refused to go on scheduled visitation, his lack of sensitivity to school, religious, and cultural activities, and his failure to provide adequate physical facilities to accommodate the children during their visitation with him (one bedroom apartment, air mattresses instead of beds). In our opinion, while some of these factors could serve as grounds for denying appellant status as a possessory conservator, they are not good cause for refusing to enter specific orders regarding possession or access. Because the trial court granted appellant status as a possessory conservator, the trial court must have implicitly found that appellant's possession or access to the children would not endanger the physical or emotional welfare of the children. Limitations upon appellant's right to possession of or access to the children may not exceed that required to protect the children's best interest. TEX.FAM.CODE ANN. § 14.03(d) (Vernon Supp.1994). See Hopkins v. Hopkins, 853 S.W.2d 134, 138 (Tex.App.Corpus Christi 1993, no writ) (upheld trial court's limitation of access to short hours in a public place under supervision where father had drug delivery convictions, had abused the mother and children, *452 had unsanitary and unsafe living quarters, and occasionally exhibited bizarre behavior).
In Wright v. Wentzel, 749 S.W.2d 228 (Tex. App.Houston [1st Dist.] 1988, no writ), the father was granted managing conservatorship and the mother received possessory conservatorship with visitation contingent upon the father's consent. The court reversed the judgment and remanded the case for entry of specific terms and conditions of visitation because there was no showing of good cause why specific orders would not be in the child's best interest. Id. at 234. Furthermore, the court noted that there can be no denial of possession of or access to a child unless parental possession or access would endanger the physical and emotional welfare of the child. Id.
Appellant argues that the evidence is insufficient to support the court's order because the lack of enforceability of the order effectively denies appellant his right to have access to his children. To be enforceable by contempt, a judgment must set out the terms for compliance in clear and unambiguous terms. Ex Parte Brister, 801 S.W.2d 833, 834 (Tex.1990). The judgment must also clearly order the party to perform the required acts. Id. Although there has been no action yet to enforce this judgment, appellant could not successfully enforce this judgment by contempt because the judgment does not meet the standards for enforceability. The judgment does not state in clear and unambiguous terms what appellee must do to comply with the judgment. Instead, the judgment gives appellee complete discretion to determine when, where, and if appellant may have possession of or access to the children. This absolute discretion and the lack of enforceability is effectively a denial of appellant's right to visitation with his children. Under § 14.03(d), the trial court may not deny a parent access to children unless this access would endanger the children physically or emotionally. TEX.FAM. CODE ANN. § 14.03(d) (Vernon 1986). The trial court stated what it believed to be good cause for its ruling and these reasons indicate that the judge had concerns regarding physical violence and proper facilities for the children. The evidence, however, does not indicate that visitation with appellant would endanger the physical or emotional welfare of the children. Thus, we hold the trial court abused its discretion in ruling that appellant's visitation periods depended upon appellee's approval. We sustain points of error one and three. Having so ruled, we need not pass upon points of error two and four.
CHILD SUPPORT
A trial court has discretion to set child support within the parameters of the Texas Family Code. See TEX.FAM.CODE ANN. § 14.05(a) (Vernon Supp.1994); Rodriguez v. Rodriguez, 860 S.W.2d 414, 415 (Tex.1993). The trial court's judgment will not be disturbed unless appellant shows a clear abuse of this discretion. Rodriguez, 860 S.W.2d at 415. With this standard in mind, we turn to appellant's challenges to the trial court's rulings regarding child support.
In point of error five, appellant asserts the trial court erred in not filing findings of fact in the form mandated by TEX. FAM.CODE ANN. § 14.057 pursuant to appellant's request because appellant cannot ascertain upon what facts the trial court based its support orders. Section 14.057 sets forth certain findings the trial court "shall state" in the child support order. Tex.Fam.Code Ann. § 14.057 (Vernon Supp.1994). Where the amount of child support ordered varies from the amount computed by applying the percentage guidelines contained in § 14.055, "the court shall find that the application of the child support guidelines would be unjust or inappropriate and shall state" certain specified findings in the child support order. Tex.Fam.Code Ann. § 14.057(b) (Vernon Supp.1994). These findings include (1) the amount of net resources available to the obligor per month, (2) the amount of net resources available to the obligee per month, (3) the amount of monthly child support payments if the guidelines under § 14.055 were applied, (4) the percentage applied to the obligor's net resources for child support by the actual order rendered by the court, and (5) the specific reasons the amount of support ordered varies from the amount computed by applying the § 14.055 guidelines. TEX. *453 FAM.CODE ANN. § 14.057(b)(1)-(5) (Vernon Supp.1994).
In the portion of the divorce decree regarding child support, the trial court stated that application of the child support guidelines was unjust and inappropriate, as required under § 14.057(b). Other findings required by § 14.057 are set out both in the decree and in the court's Findings of Fact. As to the obligor's net resources, the court found that the amount available to appellant "was incapable of being ascertained, but exceeded $4,000.00 per month, an undetermined amount of net resources attributable to INCOME FROM SEPARATE PROPERTY, undetermined amounts of money flowing from sale of assets, an undetermined amount of `overtime pay,' and an undetermined amount of interest from other assets." (emphasis in original). As to the obligee's net resources, the trial court found that the amount available monthly to appellee was $2,500.00 plus an undetermined amount of interest from other assets. As to the amount appellant would pay if § 14.055 guidelines were applied, the court found that appellant would pay $1,400.00 per month. The trial court ordered appellant to pay a total of $3,000.00 per month in child support. As to the percentage applied to appellant's net resources by the actual order rendered, the court stated:
The percentage applied to [appellant's] child support payments cannot be accurately calculated because of factors set forth in this decree and because [appellant] did not present clear evidence of the amounts of interest he was receiving from separate property assets or other assets.
Although the trial court did not attempt to compute a percentage, it provided an explanation. The trial court also specified why the order varied from the amount appellant would have paid under the § 14.055 guidelines. Both the decree and the Findings of Fact comply with the § 14.057 requirements. Therefore, we overrule point of error five.
In point of error six, appellant contends the trial court erred in requiring him to pay child support in the amount of $750.00 per month per child, for a total of $3,000.00 per month, because the evidence is legally or factually insufficient to support this finding. Appellant claims that the total amount represents more than 80% of his net monthly salary. Appellant further asserts that this award is $500.00 more per month than appellee testified was reasonable.
Findings of fact in a case tried to the court have the same force and dignity as a jury verdict. City of Clute v. City of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ. App.Houston [14th Dist.] 1977, writ ref'd n.r.e.). The findings of fact are reviewable for legal and factual sufficiency of the evidence by the same standards applicable in reviewing the evidence supporting a jury verdict. Zieben v. Platt, 786 S.W.2d 797, 799 (Tex.App.Houston [14th Dist.] 1990, no writ).
When an appellant attacks the legal sufficiency of an adverse finding on an issue on which he did not have the burden of proof, he must demonstrate on appeal that there is no evidence to support the finding. TEX. R.APP.P. 74(d). In reviewing such points of error, we may consider only the evidence and inferences tending to support the finding, disregarding the contrary evidence and inferences. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex.1992). If there is any evidence of probative force to support the finding, the point must be overruled and the finding upheld. Southern States Transp., Inc. v. State, 774 S.W.2d 639, 640 (Tex.1989).
When an appellant attacks the factual sufficiency of the evidence, the reviewing court must consider all of the evidence. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989). The court may set aside the finding only if the evidence standing alone is so weak as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam).
The findings to which appellant objects fall into four categories: (1) findings of past and present underemployment; (2) findings of past failure to support; (3) findings supporting the court's award of $3,000.00 per month in child support; and (4) findings regarding the lifestyle of the children. Appellant addresses each of these separately, complaining *454 that none of these findings individually support the trial court's deviation from the standard guidelines.
As to employment, the court made three findings: (1) that appellant had the ability to earn in excess of $100,000.00 per year,[2] was intentionally unemployed for three years prior to the separation, and was intentionally underemployed at the time of the divorce hearing; (2) that appellant chose not to seek other employment despite his M.B.A. degree and C.P.A. license; and (3) that appellant chose to "live off the gifts of his father-in-law" instead of earning income to the extent of his capabilities. At the time of the divorce hearing, appellant was earning approximately $52,000.00 per year.
Appellant argues that, even if he did remain intentionally unemployed and lived off the gifts of his father-in-law before the separation, these are not evidentiary factors to be considered in determining whether child support should vary from the guidelines. Intentional unemployment or underemployment is, however, a factor the court can consider in determining the obligor's earning potential. TEX.FAM.CODE ANN. § 14.053(f) (Vernon Supp.1994).
Section 14.054 sets out 15 factors the court can consider, but the court is not limited to these enumerated factors. TEX.FAM. CODE ANN. § 14.054 (Vernon Supp.1994). Other factors are listed in § 14.052(b). The factors in §§ 14.052(b) and 14.054 provide bases for variance from strict application of the percentage guidelines, but only apply to the first $4,000.00 of net resources.[3]Rodriguez, 860 S.W.2d at 417.
The trial court could have made the finding of fact regarding the intentional unemployment and underemployment in determining appellant's earning potential. The finding that appellant chose to live off the gifts of his father-in-law is related to this finding of intentional unemployment. While this factor is not among the listed factors a judge can consider in varying from the standard guidelines, § 14.054 provides that the court can consider "all relevant factors," and is not limited to the enumerated factors. TEX.FAM. CODE ANN. § 14.054 (Vernon Supp.1994). Therefore, we find no abuse of discretion in the trial court's consideration of appellant's unemployment and underemployment.
In our discussion of point of error five above, we set out the findings made by the court in support of the award of child support. In summary form, these findings are (1) that appellant's net resources were incapable of being ascertained, but were in excess of $4,000.00 per month, (2) that under the guidelines of § 14.055, appellant's monthly child support payment would be in excess of $1,400.00 per month, and (3) that a percentage of child payments could not be ascertained because he provided insufficient evidence of the interest he receives on assets. As to the children's lifestyle, the trial court found that appellant accepted that lifestyle and that appellee's net resources included $2,500 per month and an undetermined amount of interest from other assets.
Because the trial court found that appellant's net resources exceeded $4,000.00 per month, § 14.055(c) governed the determination of child support. Section 14.055(c) states:
In situations in which the obligor's net resources exceed $4,000 per month, the court shall presumptively apply the percentage guidelines in Subsection (b) of this section to the first $4,000 of the obligor's net resources. Without further reference to the percentage recommended by these guidelines, the court may order additional amounts of child support as appropriate, depending on the needs of the child at the time of the order.
TEX.FAM.CODE ANN. § 14.055(c) (amended 1993). Thus, there is a presumption that the *455 trial court applied the percentage guidelines to the first $4,000 of appellant's monthly net resources.
Under the percentage guidelines set out in § 14.055(b), the percentage applicable to appellant is 35%. See Tex.Fam.Code Ann. § 14.055(b). Under the mandates of the code, we must presume the trial court awarded 35% of the first $4,000 of appellant's net monthly resources, or $1,400. We do not conclusively presume that this $1,400.00 is based on the needs of the children. See Rodriguez, 860 S.W.2d at 418. Instead, "the presumptive award is an amount that the trial court may award in lieu of making detailed findings as to the basis of the award." Id. See TEX.FAM.CODE ANN. § 14.052(b). Thus, the presumptive award rests upon a number of factors and not just the needs of the children. Rodriguez, 860 S.W.2d at 418. Under § 14.055(c), the trial court could have ordered the additional $1,600 in child support based on the needs of the children. See TEX.FAM.CODE ANN. § 14.055(c).
The record contains evidence that the children's necessary monthly expenses are $9,337.00. Certainly, this is sufficient evidence to support the trial court's additional $1,600.00 per month. As to appellant's monthly net resources, the record shows that, at the time of the divorce proceeding, appellant worked for the Resolution Trust Corporation, earning a gross monthly salary of $4,362.80. After deduction of taxes and social security, appellant's net income is $3,742.04. The record also shows that appellant has other income-producing assets.
Appellant's inventory, filed with the court and introduced as a trial exhibit, indicates an ownership interest in four real estate rental partnerships and an interest in four oil & gas production partnerships. This inventory indicates that the real estate partnerships have a total value of $97,456.00 and the oil and gas partnerships have a value of $13,050.00. Appellant testified that he receives significant tax benefits from these partnerships, but that he has also incurred some tax liability. Appellant claimed to have received total distributions of approximately $45,000.00 from these partnerships over the last seventeen years. Although his income tax records indicate some distributions, appellant contended he did not physically receive cash distributions. Instead, appellant maintained that these distributions went directly to pay off tax liabilities.
Section 14.053(e) allows a trial court to "assign a reasonable amount of `income' attributable to assets that do not currently produce income. Tex.Fam.Code Ann. § 14.053(e) (Vernon Supp.1994). Furthermore, the duty to support is not limited to a parent's ability to pay from current earnings, but extends to his financial ability to pay from any and all available sources. Giangrosso v. Crosley, 840 S.W.2d 765, 769 (Tex. App.Houston [1st Dist.] 1992, no writ); Pharo v. Trice, 711 S.W.2d 282, 284 (Tex. App.Dallas 1986, no writ); Hazelwood v. Jenkins, 580 S.W.2d 33, 37 (Tex.Civ.App. Houston [1st Dist.] 1979, no writ). Based on the evidence, we find no abuse of discretion by the trial court in requiring appellant to pay $3,000.00 per month in child support. We overrule point of error six.
ATTORNEY'S FEES
In points of error seven and eight, appellant challenges the trial court's award to appellee of $92,595.00 in attorney fees. Appellant argues that these fees were not part of the community estate and alternatively, the award caused an inequitable division of the parties' community estate. Appellant also challenges the legal and factual sufficiency of the evidence that this award represented necessaries incurred for the benefit of the minor children.
The award of attorney fees is within the trial court's sound discretion. Cohen v. Sims, 830 S.W.2d 285, 290 (Tex.App. Houston [14th Dist.] 1992, writ denied). The trial court also has discretion to tax those fees as costs. MacCallum v. MacCallum, 801 S.W.2d 579, 587 (Tex.App.Corpus Christi 1990, writ denied). See TEX.FAM. CODE ANN. § 11.18(a) (Vernon 1986). Attorney fees rendered in prosecution or defense of a suit affecting the parent-child relationship may be awarded as necessaries to the child, even where the fees are incurred by the unsuccessful party. Daniels v. Allen, *456 811 S.W.2d 278, 280 (Tex.App.Tyler 1991, no writ).
In its Findings of Fact, the trial court made the following findings regarding attorney fees:
27. To effect an equitable division of the estate of the parties, LINDA WEINER ROOSTH was granted judgment against MICHAEL B. ROOSTH in the amount of $92,595 for attorney's fees, such fees assessed as costs, and bearing interest at the rate of 10% per annum.
28. The sum of $92,595 represents necessaries incurred for the benefit of the minor children.
Appellant first cites Chiles v. Chiles, 779 S.W.2d 127 (Tex.App.Houston [14th Dist.] 1989, writ denied) in support of his argument that the trial court cannot assess fees against appellant if the funds used to pay the fees were not generated by the community estate. A panel of this court did state that a trial court's only authority for awarding attorney fees in a divorce action was the court's equitable power to divide the marital estate. Id. at 129. In Chiles, however, there was no community estate out of which attorney fees could have been awarded. Id. Furthermore, in Rodriguez v. Rodriguez, 616 S.W.2d 383, 384 (Tex.Civ.App.Houston [14th Dist.] 1981, no writ), a panel of this court held that, in addition to its authority to treat attorney fees as part of the division of the marital estate, a court may assess attorney fees as costs of court. See also Abrams v. Abrams, 713 S.W.2d 195, 197 (Tex.App.Corpus Christi 1986, no writ).
Because appellee's father paid her attorney fees during the pendency of this suit, appellant maintains that these funds were not part of the community estate or its credit. Appellee's father, Sol Weiner, testified that he "made available money for attorneys." Additionally, he testified:
A. Well, it was impossible for her to pay for attorney's fees up to here unless somebody paid them, and she certainly didn't have the ability to pay them so I paid them. I hope someday in the future she will be able to pay it back.
Mr. Weiner testified to paying approximately $89,000.00 in fees as of December 16, 1992. He admitted that he does not require his children to sign written loan agreements when he helps them.
Appellant contends the attorney fees paid by Mr. Weiner were not a community debt, but were a gift, and could not be part of the division of the community estate. The testimony, however, does indicate that appellee's father considered the fees a loan and not a gift. Thus, the trial court's finding that the award of attorney fees was part of the division of the marital estate is supported by the evidence and is not an abuse of discretion. We overrule point of error seven.
Appellant also challenges the evidence supporting the trial court's finding that these fees represented necessaries. Each spouse has a duty to support his or her minor children. Daniels v. Allen, 811 S.W.2d 278, 280 (Tex.App.Tyler 1991, no writ). Section 4.02 imposes a duty upon parents to support their minor children and imposes liability upon a parent for necessaries provided to the children by another person. Tex.Fam.Code Ann. § 4.02 (Vernon 1993). Attorney fees rendered in a suit affecting the parent-child relationship may be awarded as necessaries to the children. Daniels, 811 S.W.2d at 280. A divorce suit involves issues of custody and support. For full development of matters bearing on these issues it is necessary to employ counsel. See Drexel v. McCutcheon, 604 S.W.2d 430, 434 (Tex.Civ.App.Waco 1980, no writ). The courts have held that parties may seek a jury trial on the issue of whether the legal services were necessary for the benefit of the child. Id. at 435. Here, however, the case was tried to the court. We have reviewed the evidence regarding attorney fees and we cannot say that any of the services performed by appellee's attorneys had no relationship to the needs of the children.
Appellant also contends appellee should have segregated the attorney fees related to foreclosure of the parties' residence and to a tort claim asserted by appellee. Appellant did not object in open court to the lack of segregation and did not raise this ground in his motion for new trial. *457 Therefore, we hold that appellant did not preserve his complaint about lack of segregation of fees. See Stewart Title Guaranty Co. v. Sterling, 822 S.W.2d 1, 10 (Tex.1991); Osoba v. Bassichis, 679 S.W.2d 119, 123 (Tex. App.Houston [14th Dist.] 1984, writ ref'd n.r.e.).
Based on the evidence before us, we hold that the trial court did not abuse its discretion in awarding fees to appellee as necessaries incurred for the benefit of the minor children. We overrule point of error eight.
DIVISION OF PROPERTY
In point of error nine, appellant claims the trial court erred as a matter of law in divesting appellant of his separate property interest in certain personal property and awarding same to appellee. This complaint relates to gifts given to the couple during their marriage. The only statement in the trial court's Findings of Fact and Conclusions of Law that could relate to the property in question are conclusions nine and ten:
9. The division of property contained in the Final Decree of Divorce and Judgment is a just and right division of the property having due regard for the rights of each party and the children of the marriage.
10. At the time of the dissolution of the marriage, both parties possessed separate property and all such separate property was confirmed as their sole and separate property as set forth in the final decree of divorce and judgment.
Appellant argues that the trial court either erroneously concluded the property was community, or it erroneously awarded appellee the separate property of appellant. A review of the divorce decree indicates that the only property the court found to be separate included all trusts established by appellee's father as appellee's separate property and the Tyler, Texas partnerships as appellant's separate property. The decree confirmed these items as the parties' separate property. The remaining property was considered part of the community estate and was divided as the court found to be just and right.
No one disputes that the items listed in appellant's Exhibit 6, entitled "Engagement Gifts," were gifts to both appellant and appellee. Appellant testified that the wedding gifts were gifts to both parties. Appellee contended that her mother gave many of the items to appellee alone. Appellee's inventory does not indicate, however, which items were wedding gifts and which items were gifts to her. Appellee seems to contend, therefore, that the evidence regarding the engagement and wedding gifts was so confusing that the trial court was authorized to presume these gifts were community property. We disagree.
An attempted gift by a third party to the community estate vests each partner with a one-half undivided interest in the property as his or her separate property. McLemore v. McLemore, 641 S.W.2d 395, 397 (Tex.App.Tyler 1982, no writ). If appellant owned a one-half undivided interest in the property in question, the action of the trial court in divesting appellant of this interest and awarding it to appellee cannot stand. Id. See also Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 139-40 (Tex.1977). Even if the evidence did not clearly show exactly what items were engagement or wedding gifts, it did show the existence of a substantial number of such gifts and it was an abuse of discretion for the trial court to consider this property as part of the community estate subject to division. Thus, we sustain point of error nine.
TURNOVER ORDER
As part of this consolidated appeal, appellant also raises six points of error regarding the Order for Turnover, for Appointment of a Receiver and for Injunctive Relief. Appellee filed an application for turnover relief, complaining that appellant had failed to pay the $92,595.00 plus interest awarded as attorney fees in the original divorce decree. In her application, appellee asked the court to order appellant "to turn over to this Court, sufficient property to satisfy the judgment, together with any supporting documents which may be required, on the terms and conditions, including appropriate injunctive relief and the appointment of a receiver, *458 which may be required to safeguard Creditor's interests." In its order, the trial court appointed a receiver to receive and disburse property described in the order, ordered appellant to liquidate specified property and deliver the proceeds to the receiver by 5:00 p.m. on July 9, 1993, restrained appellant from transferring any property until the order and prior judgment were satisfied, and awarded appellee $3,500.00 in attorney fees.
The standard of review of a turnover order is whether the trial court abused its discretion. See Barlow v. Lane, 745 S.W.2d 451, 453 (Tex.App.Waco 1988, writ denied). Appellant essentially contends the trial court abused its discretion in four ways: (1) appellee was not entitled to appointment of a receiver because she did not meet the requirements of adequate notice and clear legal right to the property; (2) the property to be liquidated was exempt from execution as a matter of law; (3) appellee was not entitled to injunctive relief because she did not present a verified petition and the injunction did not contain specific findings as required by Rule 683; (4) appellee was not entitled to attorney fees since she was not entitled to injunctive or receivership relief.
Section 31.002 of the Texas Civil Practices & Remedies Code provides a method for court-ordered collection of judgments through injunction or other means to reach property of the debtor. TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(a) (Vernon 1986). Under this section, the court may: (1) order the debtor to turn over non-exempt property, (2) otherwise apply the property to the satisfaction of the judgment, or (3) appoint a receiver to take possession of the non-exempt property, sell it, and pay the proceeds to the judgment creditor. TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(b)(1)-(3) (Vernon 1986). The judgment creditor may recover attorney fees and reasonable costs. TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(e) (Vernon 1986). Furthermore, the court may enforce the order by contempt proceedings. TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(c) (Vernon 1986).
We turn first to appellant's challenge, in points of error one and two, to the appointment of a receiver. In particular, appellant contends appellee's application did not give him adequate notice of the property sought to be part of the receivership estate and that this was contrary to Texas law and in violation of appellant's due process rights. Appellant also contends appellee did not show she had a clear legal right to the property. In point of error three, appellant claims certain property included in the turnover order was exempt as a matter of law.
Regarding the alleged pleading deficit, appellant cites a number of cases that do not involve post-judgment collections under TEX. CIV.PRAC. & REM.CODE ANN. § 31.002. Therefore, we find these cases inapplicable. Traditional requirements for appointment of a receiver are not applicable to post-judgment receiverships under § 31.002. Childre v. Great Southwest Life Ins. Co., 700 S.W.2d 284, 288 (Tex.App.Dallas 1985, no writ). Accordingly, we overrule point of error one.
Section 31.002(f) provides:
A court may not enter or enforce an order under this section that requires the turnover of the proceeds of, or the disbursement of, property exempt under any statute, including Section 42.0021, Property Code. This subsection does not apply to the enforcement of a child support obligation or a judgment for past due child support.
TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(f) (Vernon Supp.1994). Appellant argues that, since appellee is seeking to recover attorney fees and not child support, there must be evidence appellant's property is not exempt. Appellant answered appellee's application for turnover relief and raised the defense that all of his property was exempt. Thus, appellant essentially claims that appellee failed to meet her burden of proof under the turnover statute.
In its order, the trial court required appellant to liquidate shares of stock, interests in partnerships, and life insurance policies. Appellant contends that the cash surrender value of life insurance policies is exempt as a matter of law under TEX.INS.CODE ANN. art. 21.22, § 1 (Vernon Supp.1994). Appellant also maintains that the property included in the turnover order with an aggregate value *459 of $30,000.00 is exempt under TEX.PROP.CODE ANN. § 42.001 (Vernon 1984).
Appellant cites Caulley v. Caulley, 806 S.W.2d 795 (Tex.1991) in support of his argument that appellee has the burden of overcoming a presumption of exemption. In Caulley, the wife had obtained a money judgment against her ex-husband and had attempted to execute. Id. at 796. The Sheriff who attempted to execute returned the writ "Nulla Bona" because a homestead exemption was on file in the county clerk's office. Id. Once a homestead exemption has been established, Caulley holds that the person claiming abandonment of the homestead exemption has the burden of proving it. Id. at 797. It does not hold, as appellant suggests, that a post-judgment creditor must prove the non-existence of an exemption.
Appellee counters appellant's arguments by asserting that appellant did not meet his burden of proving the property in question was exempt. In support of this assertion, appellee cites Rucker v. Rucker, 810 S.W.2d 793 (Tex.App.Houston [14th Dist.] 1991, writ denied). We find Rucker distinguishable. In Rucker, the appellant was ordered to turn over part of his monthly disability payments. Id. at 794. On appeal, appellant argued that TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(a)(2) exempted disbursement of pension funds from turnover orders. Id. The court noted that, under TEX.PROP. CODE ANN. § 42.0021, retirement plan payments are exempt from attachment, execution, and seizure, but that such plans are not exempt if they do not qualify under applicable provisions of the Internal Revenue Code. Id. at 795. The court then stated that the burden of proving that property is exempt is on the party claiming that exemption. Id. at 795-96. Because appellant did not prove that his retirement plan met the IRS qualifications, the court held that he failed to prove entitlement to the exemption. Id. at 796.
We believe Rucker states the general rule that a party asserting an exemption bears the burden of establishing entitlement to the exemption.[4] However, not all exemptions require proof. In Rucker, proof was required. No proof is required for the exemptions asserted by appellant to apply. No one disputes that the property included in the turnover order is personal property. Thus, TEX.PROP.CODE ANN. § 42.001 regarding the exemption available for certain types of personal property may apply. Section 42.002 lists the types of personal property eligible for the exemption. The only items included in the turnover order resembling property listed in § 42.002 are the life insurance policies.
As to life insurance policies, TEX. PROP.CODE ANN. § 42.002 provides an exemption for the following:
(12) the present value of any life insurance policy to the extent that a member of the family of the insured or a dependent of a single insured adult claiming the exemption is a beneficiary of the policy.
TEX.PROP.CODE ANN. § 42.002(12) (Vernon Supp.1994). Under the Texas Insurance Code, however, any life insurance policy, regardless of who is a beneficiary, appears to be exempt from execution. Article 21.22 provides in pertinent part:
Sec. 1. Notwithstanding any provision of this code other than this article, all money or benefits of any kind, including policy proceeds and cash values, to be paid or rendered to the insured or any beneficiary under any policy of insurance or annuity contract issued by a life, health or accident insurance company ... shall:
. . . .
(2) be fully exempt from execution, attachment, garnishment or other process;
TEX.INS.CODE ANN. art. 21.22, § 1(2) (Vernon Supp.1994).
*460 The policies included in the turnover order all indicate that the beneficiary is a testamentary trust for the benefit of the children. We believe this is sufficient to render these policies exempt under either the Property Code[5] or the Insurance Code.
We find no applicable exemption for the other property listed in the order. None of the personal property exemptions described in Tex.Prop.Code Ann. § 42.002 applies to appellant's shares of stock or to his interests in the real estate or oil and gas partnerships. Appellant cites no other authority providing an exemption for this type of property.
In the alternative, appellant appears to claim that he no longer owns all of the listed property because he contends that appellee did not prove that the property was unchanged from the time appellant filed his inventory. The burden of establishing that certain property is no longer in the debtor's possession is on the debtor. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex.1991). Appellant presented no evidence at the hearing and thus, failed to meet his burden. Therefore, we hold that appellant has not shown abuse of discretion by the trial court in ordering liquidation of the shares of stock or the partnership interests. We sustain points of error two and three only as they concern the portion of the order requiring liquidation of appellant's life insurance policies, and overrule all other parts of these points of error.
In point of error four, appellant claims the trial court abused its discretion in granting injunctive relief because appellee failed to present a verified petition in compliance with Rule 682. In point of error five, appellant contends the trial court erred in granting a temporary injunction which did not contain specific findings supporting its issuance as required by Rule 683. Case law has held, however, that the typical requirements for an injunction are not applicable to an injunction granted pursuant to TEX.CIV. PRAC. & REM.CODE ANN. § 31.002. Childre, 700 S.W.2d at 288. Accordingly, we overrule points of error four and five.
In point of error six, appellant challenges the award of attorney fees. Appellant concedes that this point of error has merit only if we find error by the trial court in appointing a receiver or granting injunctive relief. TEX.CIV.PRAC. & REM. CODE ANN. § 31.002(e) provides that a judgment creditor "is entitled to recover reasonable costs, including attorney's fees." Because we have upheld the trial court's order appointing a receiver and granting injunctive relief, except the order to liquidate certain life insurance policies, we find no error in the trial court's award of attorney fees to appellee. We overrule point of error six.
CONCLUSION
Concerning the visitation order, we hold that the trial court abused its discretion in awarding appellee sole discretion regarding appellant's possession of and access to the children. We also find that the trial court erred in awarding appellee all items received as wedding and engagement gifts because appellant has a one-half undivided interest in this property. Accordingly, we reverse these portions of the decree and remand it to the trial court for further proceedings. Except as to these two areas, we affirm the remainder of the decree.
Regarding the turnover order, we hold that the trial court abused its discretion in ordering liquidation of life insurance policies because the cash values of such policies are exempt as a matter of statutory law. Therefore, we delete from the order those policies listed in paragraph 3(a)-(g). Except as so modified, we affirm the trial court's order.
JUNELL, J., sitting by designation.
NOTES
[1] But see Hopkins v. Hopkins, 853 S.W.2d 134, 137-38 (Tex.App.Corpus Christi 1993, no writ). In Hopkins, the Corpus Christi court of appeals interpreted § 14.03 to allow a trial court to appoint a possessory conservator and deny that possessory conservator possession or access to the child.
[2] In the decree, the court found that appellant had the ability to earn in excess of $100,000; in its Findings of Fact, the court found that appellant had the ability to earn in excess of $150,000.
[3] Effective September 1, 1993, the § 14.055 percentage guidelines were amended to apply to the obligor's monthly net resources of $6,000.00, rather than $4,000.00. See Act of June 18, 1993, 73rd Leg., R.S., ch. 766, 1993 Tex.Gen.Laws 2989-2999. Because this divorce proceeding occurred before the effective date of this legislation, we apply the $4,000.00 guidelines.
[4] In Sloan v. Douglas, 713 S.W.2d 436, 441 (Tex. App.Fort Worth 1986, writ ref'd n.r.e.), however, the Fort Worth court of appeals stated that, under § 31.002, the judgment creditor must prove that the property sought cannot be readily attached or levied on and that the property is not exempt. The court then distorted this holding by stating that the judgment creditor must overcome the defense of exemption raised by the debtor. Id. Although the statute does not clearly indicate who has the burden of proving exemption, we believe the better interpretation is to hold the debtor responsible for proving that his or her property is exempt from execution.
[5] Under the Property Code, cash values of life insurance policies are exempt only up to an aggregate value of $30,000. TEX.PROP.CODE ANN. § 42.001 (Vernon 1984). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1728650/ | 868 S.W.2d 925 (1994)
GASMARK, LTD., Appellant,
v.
KIMBALL ENERGY CORP., Appellee.
No. 2-93-066-CV.
Court of Appeals of Texas, Fort Worth.
January 12, 1994.
Rehearing Overruled February 16, 1994.
*926 Butler & Harris, and Katherine L. Butler and Elizabeth J. Tepikian, Houston, for appellant.
Law, Snakard & Gambill and H. Allen Pennington, Jr., and Andrew C. Rector, Fort Worth, for appellee.
Before HILL, C.J., and FARRIS and WEAVER, JJ.
OPINION
FARRIS, Justice.
GasMark, Ltd. sued Kimball Energy Corporation to enforce an alleged four-month natural gas purchase and sale contract. Gas-Mark moved for summary judgment to enforce the contract and Kimball moved for summary judgment claiming no contract existed. The trial court granted Kimball's motion and denied GasMark's. Because no material issues of fact exist and the parties never reached or executed an agreement for multi-month purchases of gas, GasMark's points of error are overruled and the judgment is affirmed.
In its first point of error, GasMark claims because it submitted an agreement, complete on its face, the trial court erred in granting Kimball's motion for summary judgment. In so claiming, GasMark argues that under Texas law, a signed, unambiguous contract cannot be interpreted according to the parties' whims; instead, the parties are bound by the objective intent of the documents they sign. While this is a correct statement of law, it does not apply to the current dispute, which concerns the agreement process, not its terms.[1]
The summary judgment evidence is the affidavits of the personnel involved in the *927 transaction and the documents they exchanged. These documents reveal the following transpired.
(1) On November 6, 1990, Kimball's Mike Johnston sent a letter to GasMark's Will Baird, advising he would prepare an agreement, whereby Kimball would agree to purchase natural gas from GasMark. At this time Baird indicated to Johnston no security for payment would be required.
(2) On November 8, 1990, Edwin Ireland, President of GasMark, signed the November 6, 1990 letter and included a provision that the confirmation was subject to the execution of a mutually agreed formal contract. All parties initialed this added provision.
(3) On November 29, 1990, Kimball Smith of Kimball, sent a proposed escrow agreement by telecopy to GasMark's Brenda Herod.
(4) On November 30, 1990, GasMark's Brenda Herod sent the proposed escrow agreement to Kimball Smith of Kimball.
(5) On December 12, 1990, Mike Johnston sent Kimball's form Firm Gas Purchase Agreement to GasMark's Will Baird. This agreement called for 2,000 MMBtu of gas per day to be delivered at a price of $2.08 per MMBtu with payment to be made according to an escrow agreement. This agreement states the contract "embodies the entire agreement between Buyer and Seller for the purchase and sale of gas described herein, and supersedes any and all prior agreements and understandings, whether oral or written."
(6) On January 10, 1991, Kimball Smith telecopied Kimball's changes to the escrow agreement to GasMark's Brenda Herod.
(7) On January 15, 1991, GasMark's John Green called Kimball Smith and refused the January 10, 1991 changes to GasMark's form agreement and requested Kimball to provide a $370,000 letter of credit.
(8) On January 17, 1991, Kimball's Mike Johnston sent a letter to GasMark's Will Baird inquiring about the agreement he had sent on December 12, 1990. Under separate letter of the same date, Mike Johnston sent Will Baird a document entitled "Amendment to Firm Gas Purchase Agreement." This amendment changed the billing and payment arrangements, and the price and security provision.[2]
(9) On January 21, 1991, GasMark's Mary Sheffield sent the Firm Purchase Agreement of December 12, 1990, back to Kimball, but not the document of January 17, 1991, entitled "Amendment to Firm Gas Purchase Agreement." The document as sent called for a price of $2.08 per MMBtu and payment by wire transfer.
(10) On February 1, 1991, Kimball's Julie Dowler sent a second document entitled "Amendment to Firm Gas Purchase Agreement" to GasMark's John Green. This amendment called for a more expansive Force Majeure clause than that included in the Firm Gas Purchase Agreement of December 12, 1990, for payment by wire transfer, a letter of credit, and a price of $2.075 per MMBtu effective January 1, 1991.
(11) On February 11, 1991, GasMark's Mary Sheffield sent GasMark's response to Kimball's January 17, 1991 proposal. This response provided for no change in the Force Majeure clause, payment by wire transfer, a letter of credit, and a price of $2.075 per MMBtu effective February 1, 1991. Gas-Mark also sent, under the same cover, an executed copy of an amendment to escrow agreement providing for payment to be made to GasMark, not by wire transfer, but from the escrow agent.
(12) On February 18, 1991, Kimball Smith of Kimball told GasMark's John Green that Kimball was terminating the negotiations.
From December 1990 to February 1991, Kimball purchased gas from GasMark at $2.08 per MMBtu.
*928 Generally, contracts for the purchase and sale of oil and gas are governed by the Uniform Commercial Code (U.C.C.). See Tex.Bus. & Com.Code Ann. § 2.107 (Tex. UCC) (Vernon Supp.1994). However, the effect of the UCC may be varied by agreement. TEX.BUS. & COM.CODE ANN. § 1.102(c), (d) (Tex.UCC) (Vernon 1968). The parties can agree that their negotiations to enter into a binding contract are to be subject to the common-law requirements of a formal offer and acceptance, rather than the more flexible formation provisions of article 2. See id.
The parties agree the November 6, 1990 correspondence was a "letter of intent." A "letter of intent" is customarily employed to reduce to writing a preliminary understanding of the parties who intend to enter into contract. Garner v. Boyd, 330 F. Supp. 22, 25 (N.D.Tex.1970), aff'd, 447 F.2d 1373 (5th Cir.1971). In this letter, GasMark agreed to negotiate with Kimball provided it agreed to execute a "mutually agreed formal contract." By initialing this condition, Kimball accepted GasMark's offer to operate under the common-law requirements of a formal offer and acceptance rather than under article 2 of the UCC. See Tex.Bus. & Com. Code Ann. § 2.201(b) (Tex.UCC) (Vernon 1968); Great Western Sugar Co. v. Lone Star Donut Co., 721 F.2d 510 (5th Cir.1983).[3]
Formal negotiations began on December 12, 1990, when Kimball sent GasMark its form Firm Gas Purchase Agreement ("Offer One"). Kimball revoked this offer on January 17, 1991, when it sent GasMark the "Amendment to Firm Purchase Agreement" ("Offer Two"). This amendment changed the billing and payment provisions, and the price. These changes significantly altered the terms of the original offer and revoked "Offer One."
GasMark rejected "Offer Two" on January 21, 1991, when it sent a counteroffer to Kimball ("Counteroffer One"). This counteroffer contained all the terms included in "Offer One," except the billing provision. GasMark claims this correspondence was its acceptance of "Offer One." However, "Offer One" no longer existed because it was revoked by "Offer Two." In addition, this correspondence was not an acceptance of "Offer Two" because it contains a different term.[4] Under the common law, an acceptance must be identical with the offer to make a binding contract. Gilbert v. Pettiette, 838 S.W.2d 890, 893 (Tex.App.Houston [1st Dist.] 1992, no writ). If the acceptance modifies a term of the offer, there is no agreement and the modified acceptance becomes a counteroffer. MTrust Corp. N.A. v. LJH Corp., 837 S.W.2d 250, 254 (Tex.App.Fort Worth 1992, writ denied).
Kimball rejected "Counteroffer One" and revoked "Offer Two" when it sent the second "Amendment to Firm Gas Purchase Agreement" on February 1, 1991. This document became ("Counteroffer Two") and GasMark rejected it on February 11, 1991, when it sent the January 17, 1991 "Amendment to Firm Purchase Agreement" ("Counteroffer Three"). "Counteroffer Two" expanded the coverage of the Force Majeure clause, provided payment by wire transfer, secured by letter of credit, and a price of $2.075 per MMBtu effective January 1, 1991. "Counteroffer Three" called for no expansion of the Force Majeure clause and a price of $2.075 per MMBtu effective February 1, 1991. Because "Counteroffer Three" modified the terms of "Counteroffer Two," it rejected that counteroffer and became a counteroffer. Further, "Counteroffer Three" was not an acceptance of "Offer Two" because GasMark rejected it when it sent "Counteroffer *929 One." Once terminated, an original offer can never be revived. Kurio v. United States, 429 F. Supp. 42, 65 (S.D.Tex.1970).
Kimball rejected "Counteroffer Three" on February 18, 1991, when it advised GasMark it was terminating the negotiations. If parties negotiating a contract intend that the contract shall be reduced to writing and signed by the parties, as is the case here, then either party may withdraw at any time before the written agreement is drawn up and signed by both parties. See Premier Oil Refining Co. v. Bates, 367 S.W.2d 904, 907 (Tex.Civ.App.Eastland 1963, writ ref'd n.r.e.). Because Kimball properly withdrew from the negotiations prior to the formation of a contract, point of error one is overruled.
In point of error two, GasMark claims its motion for summary judgment should have been granted. Because we hold no contract existed, we overrule point of error two.
The judgment is affirmed.
NOTES
[1] Because the pertinent facts in this case are uncontested, the issue on appeal is whether an agreement existed.
[2] The price changed from $2.08 per MMBtu to $2.075 per MMBtu effective January 1, 1991, and the provision concerning the escrow agreement was deleted and replaced by a wire transfer and letter of credit provision.
[3] In Great Western Sugar Co. v. Lone Star Donut Co., the court stated:
While a mere confirmation without timely objection might have been sufficient under the "merchants exception," the trial court correctly concluded that, as the master of its offer, Great Western, the sender, had the power to require written acceptance as a prerequisite to the formation of a contract. Since it did, and since none was given, no contract arose.
Great Western Sugar Co. v. Lone Star Donut Co., 721 F.2d 510, 510-11 (5th Cir.1983).
[4] "Offer Two" provided a price of $2.075 per MMBtu effective January 1, 1991, while "Counteroffer One" provided a price of $2.08 per MMBtu. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1735410/ | 483 S.W.2d 541 (1972)
DAY & ZIMMERMANN, INC., et al., Appellants,
v.
Clifton S. STRICKLAND et ux., et al., Appellees.
No. 8042.
Court of Civil Appeals of Texas, Texarkana.
June 13, 1972.
Rehearing Denied July 25, 1972.
*542 John D. Raffaelli, Raffaelli, Hawkins & Carter, Howard Waldrop, Atchley, Russell, Hutchinson & Waldrop, Texarkana, for appellants.
Cahill Hitt, Hitt & Pesek, Texarkana, Larry Starr, Kenley, Boyland, Hawthorn, Starr & Coghlan, Longview, for appellees.
*543 RAY, Justice.
This is an explosion case. Appellees Clifton S. Strickland and wife, Margaret Strickland (plaintiffs) brought suit against Phoenix Insurance Company under a homeowner's insurance policy for claimed damages to appellees' house resulting from an explosion on August 14, 1968. Phoenix Insurance Company (also an appellant) brought in Day & Zimmermann, Inc., (the principal appellant) as a third-party defendant, claiming that the damage, if any, to appellees' house was the result of the negligence of Day & Zimmermann, Inc., in setting off excessive explosives at its plant.
The jury rendered a verdict in favor of the Stricklands against Phoenix Insurance Company and Day & Zimmermann, Inc., and in favor of Phoenix against Day & Zimmermann, Inc. The trial court entered its judgment accordingly, awarding the Stricklands damages in the sum of $7,300.00.
Day & Zimmermann, Inc., presents thirty-three points of error for consideration by this court. Phoenix Insurance Company presents four points of error in the event that Day & Zimmermann, Inc., is successful in reversing the judgment of the trial court by pointing out that, if there is no evidence to support the finding of the jury or the evidence is insufficient to support the findings of the jury against Day & Zimmermann, Inc., then the same holding would apply as between the Stricklands and Phoenix Insurance Company.
The explosion pertinent to this case occurred at Lone Star Ordnance Plant on August 14, 1968. On this occasion, appellees lived approximately seven and one-half miles from the place of the explosion. Appellee Clifton Strickland testified that his house was in good condition prior to August 14th, 1968, and that he observed no cracks in the house when he was painting it shortly before the explosion. The detonation occurred on Wednesday night and the Strickland family left town on Friday, returning the following Monday. Cracks in the outside wall were discovered on Monday when they were brought to Strickland's attention by his neighbor, Henry Forbes. Appellee Strickland testified that the water from his well near his home was good prior to August 14, 1968, and that after that date the water was muddy. Several homeowners (some of whom were neighbors of the Stricklands) testified during the trial that prior to the explosion on the night of August 14 there were no cracks or damages to their homes but that afterwards they noticed cracks and damages. Some of these witnesses also testified that prior to August 14 the water in their wells was good, and after the explosion the water was muddy.
The testimony established that at least 3,915 1bs. of "Comp B" explosive material had been placed on a "burning bed" and ignited prior to the explosion. Ordinarily, the material would burn, but on occasions it has been known to explode rather than burn. On this occasion, a portion of the material had burned and then the explosion occurred. The controversy revolved around the issue of whether or not the unexplained detonation of the explosive material caused the damage to the Strickland house.
Appellant Day & Zimmermann, Inc., undertook to prove that the detonation of the explosives on this particular occasion did not cause any damage to the Strickland house. In the course of making such proof, Day & Zimmermann offered its Exhibit No. 23, which was identified by Wayne O. Ursenbach (appellants' expert witness) as being the original of the report he wrote summarizing the findings and test results of an ordnance team that had made tests at eighteen arsenals located over the United States. Included in the arsenals studied were Red River Arsenal and Lone Star Arsenal, located in Bowie County, Texas. One of the purposes of the study was to determine what effect, if any, the detonation of explosives at the various arsenals would have on the structures in the surrounding area, as well as its effect *544 on people living in the area near the ammunition plants. The group was endeavoring to determine the upper limits of quantities of explosives that could be destroyed, both from the standpoint of not damaging any structures or premises, and keeping the psychological disturbance of the people to a minimum. The tests in Bowie County were made in 1956 and in April 1957. Three members of the team, Donald T. Bailey, Robert R. Dolley and D. M. Jackman, made the tests in Bowie County. Wayne O. Ursenbach was the project supervisor, but he was not in Bowie County when the tests were made. The three members of the team doing the testing would supply the information from the tests to Ursenbach, and at the end of the tests Ursenbach wrote a report summarizing the findings at Red River Arsenal and Lone Star Arsenal, which was offered as Day & Zimmermann, Inc.'s, Exhibit No. 23. The report also included a general discussion of the effect of air blasts and ground shock as determined by the investigations at all of the eighteen arsenals. Also included in the report was an analysis of the information obtained from the other sixteen arsenals. The tests made by the investigating team were made at the direction of Mr. Ursenbach from his office in Salt Lake City, Utah. When Exhibit 23 was offered by Day & Zimmermann as evidence under the provisions of Article 3737e, Vernon's Ann.Tex.Rev.Civ.Stats., the court refused to admit the same in evidence after objection by appellees. Appellant Day & Zimmermann, Inc., complains of the trial court's ruling to the introduction of its Exhibit 23 as its first point of error.
This case presents a narrow issue of admissibility of evidence under Article 3737e (1951) familiarly referred to as the "business records exception" to the hearsay rule. A thorough search of the cases does not reveal one which has decided the exact question presented here. The following elements were presented to the trial court for its consideration in admitting Exhibit 23:
1. The original report compiled by Wayne O. Ursenbach;
2. The testimony of Ursenbach that he prepared the report;
3. The testimony of Donald T. Bailey that he helped conduct some of the tests and forwarded the results of the tests to Ursenbach to be included in the report;
4. The tests were made in 1956 and 1957;
5. The report bears the date of December 30, 1957;
6. The report was prepared by the Explosives Research Group at the University of Utah at the request of the Chief of Ordnance of the U. S. Army;
7. The report was admittedly a summarization of the data or a reduction of the data furnished to Ursenbach by the survey team in the field.
The following elements of evidence and testimony were absent:
1. The original tapes and records which were used in preparing the report (Exhibit 23).
We have concluded that third-party defendant's Exhibit No. 23 was not admissible in evidence and that the trial court properly excluded it for the reason that it is not a memorandum or record of an act, event or condition. The report itself is hearsay, spawned and based upon hearsay. The original tapes and memoranda prepared in the field tests constitute the "memorandum or record of an act, event or condition" as contemplated by Article 3737e, and while that information itself is hearsay, it may be admitted into evidence as a business record under Article 3737e which provides a statutory exemption for such records from the hearsay rule. However, in order for such a business record to *545 be admitted into evidence it is necessary for the judge to find:
"(a) It was made in the regular course of business;
"(b) It was the regular course of that business for an employee or representative of such business with personal knowledge of such act, event or condition to make such memorandum or record or to transmit information thereof to be included in such memorandum or record;
"(c) It was made at or near the time of the act, event or condition or reasonably soon thereafter."
Article 3737e further provides that the identity and mode of preparation of the memorandum or record as a business record may be proved by the testimony of one of the following:
1. The entrant,
2. The custodian, or;
3. Other qualified witness even though he may not have personal knowledge as to the various items or contents of such memorandum or record.
In Railroad Commission of Texas v. Southern Pacific Company, 468 S.W.2d 125 (Tex.Civ.App. Austin 1971, writ ref'd, n. r. e.), the court stated:
"The Supreme Court held in 1969 that a tabulated schedule or summary of voluminous records may be admitted, in the discretion of the trial court, to expedite trial and aid of the trier of fact, but that this rule assumes that the records themselves are admissible. Cooper Petroleum Company v. LaGloria Oil and Gas Co., 436 S.W.2d 889 (Tex.Sup.1969). The summaries tend to prove nothing except the contents of the records themselves and standing alone the tabulations, or summaries, are hearsay and have no probative value."
Essentially, the court held that it was error for the trial court to admit into evidence the exhibits of the railroad company under the "business records exception" when the original documents upon which the exhibits (summaries) were based were not introduced. The railroad offered the testimony of its witness who was an expert in cost analysis for the railroad. The expert expounded upon his conclusions and opinions based upon his investigations of the records of the company. The court held that such testimony was inadmissible, and stated:
"Assuming for purposes of further examination of the evidence, that Boudreaux was qualified as an expert in making cost analyses for the railroad, if his opinions and conclusions were based substantially on agency records and central accounting records of the railroad, the records being hearsay as to the Commission should have been introduced as business records under the exception accorded by Article 3737e. Without introduction of the records, the opinions expressed as an expert are based almost entirely on hearsay. Although Boudreaux testified that he frequently visited Elsa (a railroad station) and personally observed the agent at work, his report (exhibits 13, 16 and 18) admittedly was based largely upon records at the station and central accounting records of the railroad as found in the computer sheets. He noted discrepancies between the agency records and the central accounting records which he corrected for his report. Boudreaux's summary of train stops (exhibit 15) was taken entirely from exhibit 21, the abstract of the electronically kept records which we have held were not admitted in evidence as required by Article 3737e as an exception to the hearsay rule. Hearsay will not become relevant and substantial merely because it is offered through an expert witness if the facts are not known to the witness or proved to be true."
We have reviewed the opinion of the Texas Supreme Court in Loper v. Andrews, 404 S.W.2d 300 (Tex.Sup.1966) and *546 do not think the case to be applicable. There the court held that the statute providing for reception in evidence of entries made in the regular course of business does not render hospital entries admissible without exception, but the statute does so only in those instances where it can be said that the diagnosis in the hospital record records a condition resting in reasonable certainty. There the opinion of the physician was an entry in the hospital record which was sought to be introduced into evidence under the business records exception to the hearsay rule. In the case presently under consideration, the original business records were not offered into evidence, and therefore no question has been presented as to the admissibility of an expert opinion recorded in the entries of the testing team.
In Sherwin-Williams Company v. The Perry Company, 424 S.W.2d 940 (Tex.Civ. App. Austin 1968); 431 S.W.2d 310 (Tex. Sup.1968), the Court of Civil Appeals held that the testimony of plaintiff's employee and head of plaintiff's accounting firm, based on prior examination of the employee's books and records as to the number of diving boards returned by customers and to the cost of returned boards, was inadmissible hearsay where the books were not produced in court. There was no showing that they had been kept in such manner as to make them admissible, and neither employee nor accountant had had any business connection with plaintiff at the time most of the entries were made.
We hold that because the records made by the field testing teams were not introduced into evidence, the report summarizing such data was not admissible. Further, the report contained the opinions of Mr. Ursenbach, based upon evidence that had not been made available to appellee Strickland for cross-examination purposes. If the data and records that are introduced are complicated or voluminous, an expert who has examined them may testify as to his calculations, summaries or conclusions to aid the court or jury to understand them. The testimony of the expert relative to his calculations, summaries or conclusions about records or data not introduced into evidence makes such testimony double-hearsay, since the data or records are hearsay until properly admitted as business records under Art. 3737e. Sherwin-Williams Company v. Perry, supra; Cross v. Houston Belt & Terminal Ry. Co., 351 S.W.2d 84 (Tex.Civ.App. Houston 1961, writ ref'd n. r. e.); Texas Brewing Company v. Walters, 43 S.W. 548 (Tex.Civ.App.1897, no writ); 19 A.L.R.3rd 1008, 11 A.L.R.3rd 1377, 21 A.L.R. 2d 773. See also Lewis, Savings & Loan Commissioner v. Southmore Savings Ass'n, 15 Tex.Sup. Court Journal p. 268 (April 8, 1972). The first point of appellant Day & Zimmermann, Inc., is overruled.
The second point of error presented by Day & Zimmermann, Inc., complains of the trial court's refusal to let its witness, Johnny Moore, an architect, testify to anything he observed, or to any opinion he formed from what he observed, about the condition of appellees' house when the witness examined the same at a time when neither appellee nor appellees' attorney was present. We have concluded that the trial court did not abuse its discretion in refusing to let Moore testify under the circumstances. Moore had already examined the house once, both inside and out, when appellees and their attorney were present. Appellees need not voluntarily submit their property to unlimited inspections. Rule 167, Texas Rules of Civil Procedure, "Discovery and Production of Documents and Things for Inspection, Copying, or Photographing", provides a method for the court to "order any party to permit entry upon designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying or photographing the property or any designated object or operation thereon which may be material to any matter involved in the action." Appellant Day & Zimmermann, Inc., did not make application for a court *547 order to allow Johnny Moore to further inspect appellees' dwelling, nor did it seek the voluntary permission of appellees to further inspect the house. Since appellant had no further authority to inspect the house, either voluntarily given by appellees or court ordered, it cannot now complain of the court's refusal to let its witness testify about the information he gained through the unauthorized inspection. One of the purposes of Rule 167 is to protect a party from undue annoyance, embarrassment, oppression or expense. See General Commentary, 2 Vernon's Texas Rules, Annotated 146. The law does not condone such an unauthorized inspection when the inspection in all probability could have been obtained through lawful means by making application to the court for an inspection order pursuant to Rule 167, Tex.R.Civ.P.
Mr. Moore was no more than a trespasser on appellees' property at the time he made the unauthorized inspection, and the courts of this state will not admit testimony obtained through the back door when there is provided a lawful method of entry through the front door.
Furthermore, it was admitted in appellant's brief that the proposed testimony of Mr. Moore would have been cumulative to that of appellant's witnesses Lacy and Stone.
Day & Zimmermann, Inc.'s, third and fourth points of error complain of the trial court's failure to instruct a verdict in its favor and failure to grant its motion for judgment non obstante veredicto, respectively. Appellant contends there was no evidence showing that it was guilty of any negligence in burning the powder which exploded on August 14, 1968, and that no evidence was introduced to support the findings of the jury to special issues numbered 6 through 10, wherein Day & Zimmermann, Inc., was found guilty of negligence which was the proximate cause of the damage to the appellees' house.
In considering the "no evidence" points, the evidence must be viewed in the light most favorable to the verdict and disregard that which is opposed or contrary to it. Stafford v. Thornton, 420 S.W.2d 153 (Tex.Civ.App. Amarillo 1967, writ ref'd, n. r. e.).
The evidence shows that composition B material is frequently burned, rather than detonated. However, if the material is more than three inches in diameter it is detonated in a hole covered with dirt. According to the testimony of appellant's employee Jack L. Wright, burning ground superintendent, the material in question was forwarded to the disposal area with a tag showing that it was to be detonated. However, the materials were placed on a burning bed above ground and ignited and thereafter exploded. Appellee Clifton Strickland testified that, "It was a terrific explosion, made a terrible racket." He further stated that the explosion "felt like it just picked the bed up and just slammed it back to the floor." Mrs. Roy M. Fomby, whose house was damaged, testified that, "It was a bad explosion," and that the explosion was different from the routine explosion that she normally heard. Several houses in the Strickland neighborhood were found to be damaged following the explosion. Appellee Strickland had recently painted his house and did not see any cracks in the brick walls of his dwelling prior to the detonation in question. The cracks and damage to appellees' house were found shortly after the explosion on August 14, 1968. There was testimony that water wells in the vicinity became muddy immediately following the detonation. Donald T. Bailey, a witness for appellant, testified that wind direction and cloud cover are important factors in the amount of damage that can be caused by an explosion. There was testimony that a cloud cover existed on the night of the explosion, and that sometimes an atmospheric inversion accompanies a cloud cover. Further, that if an atmospheric inversion exists, it will intensify the shock wave from *548 the explosion and occasionally the shock wave frequency will be the same as the resonant frequency of a dwelling. When this occurs, the residence will sustain a greater vibration and the damage to the house will be increased. While there was no direct testimony that such an inversion existed on this occasion, or that the shock wave was of the same resonant frequency as that of the house, there was testimony that appellant Day & Zimmermann, Inc., had failed to check the atmospheric conditions prior to the burning of the composition B material on this particular night. Mr. Bailey further testified that the conditions were less than ideal for burning the explosive material on the night in question.
Robert Lacy, another of appellant's witnesses, testified that it would be strange for a five-year old house that had no cracks or damage to it, to suddenly, overnight, have cracks and damage.
Jack L. Wright testified that "standard operating procedure" required that no more than 81 pounds of comp. B be detonated at one time.
Witnesses Bailey and Wayne O. Ursenbach agreed that if an explosion caused damage outside the Lone Star Ordnance Plant it would be from an unreasonable, excessive charge, or "a lot bigger charge than was safe to be used at that time."
In answer to special issues Nos. 6 and 7, the jury found that Day & Zimmermann, Inc., ignited an excessive quantity of explosive material on its burning pad on August 14, 1968, and that this act was a proximate cause of the damage to the Strickland house.
In answer to special issues Nos. 8, 9, and 10, the jury found that Day & Zimmermann, Inc., failed to ascertain that proper atmospheric conditions existed for the detonation of the explosive material on the night of August 14, 1968; and that such act was negligence, and was the proximate cause of the damage to the Strickland house.
It is now well settled that the Texas courts have rejected the doctrine of absolute liability espoused by Rylands v. Fletcher, 3 Law Rep. House of Lords 330, in explosion and blasting cases. Less well-settled is the rejection of the evidentiary rule concerning the doctrine of res ipsa loquitur in explosion and blasting cases.
In Kelly v. McKay, 149 Tex. 343, 233 S.W.2d 121 (1950), the Texas Supreme Court took the view that it was unnecessary for it to decide the applicability of the res ipsa loquitur doctrine, because there was some evidence offered by the plaintiffs which would reasonably sustain a judgment in their favor, without the aid of the rule of res ipsa loquitur, and, therefore, the trial court had erroneously instructed a verdict for the defendant in a caliche pit blasting case.
In Universal Atlas Cement Company v. Oswald, 138 Tex. 159, 157 S.W.2d 636 (Tex.Sup.1941), the court held that the doctrine of res ipsa loquitur was not applicable, although it is to be noted that the holding was made upon the ground that the plaintiff had gone further than alleging generally that the defendant set off the blast and that the damages proximately resulted therefrom, and had alleged specific acts of negligence. The court was of the opinion that, consequently, res ipsa loquitur was not in the case
While we see no good reason why the doctrine of res ipsa loquitur should not be applied in blasting and explosion cases, it is not necessary for us to decide that question in this case, because this suit was not tried on the theory that res ipsa loquitur applied, nor was the case tried on the theory of absolute liability.
The question here presented is whether there was any evidence presented to the jury from which they could conclude that Day & Zimmermann, Inc., had acted negligently in the disposal of 3,915 lbs. of composition B explosive material. Our review *549 of the voluminous record in this case leads us to believe there was evidence of negligence on the part of this appellant, and that the jury was justified in reaching its verdict. Day & Zimmermann, Inc., knew that composition B material was a dangerous substance, that on occasions it would detonate while in the process of burning, and that standard operating procedure required that no more than 81 pounds of the material be detonated at one time (then under soil cover). It also knew that if the atmospheric conditions were unfavorable the material would be more likely to detonate than if the wind were calm. Another known fact was that it was safer to detonate the material underground rather than on the surface, since detonation was always conducted with a soil cover over the explosive material. The rejection slip accompanying the material in question indicated that the material was to be detonated rather than burned. Appellant Day & Zimmermann, Inc., disregarded the rejection slip and proceeded to burn the material without checking the atmospheric conditions, when the wind was blowing and "under conditions less than ideal." While there was testimony that Day & Zimmermann, Inc., had followed the usual and customary procedure for burning the material and that 3,915 lbs. of the material was not an excessive amount to burn at one time, the jury chose to believe that appellant had acted negligently in burning the materials without checking the atmospheric conditions and that the amount which was ignited and subsequently exploded was excessive under the less than ideal conditions. Appellant offered no satisfactory explanation of why it failed to follow the instructions on the rejection slip, indicating that the material was to be detonated rather than burned, other than Jack Wright could make the final decision on whether to burn or detonate the waste ammunition material. Neither did appellant offer any satisfactory explanation of why it failed to check the atmospheric conditions when it knew that the material was more likely to detonate when the atmospheric conditions were unfavorable and that the likelihood of damage to property outside the confines of the plant premises would be enhanced if the atmospheric conditions were unfavorable.
We believe there was testimony which might fairly be interpreted as indicating that the burning of 3,915 lbs. of composition B explosive material was, under the attendant circumstances, dangerous to and calculated to injure appellees' property. The evidence was such that the jury might well conclude that Day & Zimmermann, Inc., was negligent in burning the 3,915 lbs. of explosive material on the occasion in question, rather than detonating it in 81 pound lots under a soil cover in compliance with the terms of the rejection slip and standard operating procedure, or waiting until the conditions for the burning of the material were ideal. 20 A.L.R. 2d 1372, 1394, 1399, 1400.
Our examination of the record leads us to the conclusion that evidence existed from which the jury could conclude that the blast of August 14, 1968, caused damage to appellees' house. The testimony shows that the house was in good condition just previous to the explosion, and that cracks were discovered in the house shortly following the explosion. Other houses in the neighborhood developed cracks following the detonation. The earth tremors attendant to the explosion were more intense than usual. Water wells in the vicinity that had previously been clear were muddy following the demolition. Lacy testified that it would be strange for a five-year old house that had no cracks or damage to it, to suddenly, overnight, have cracks and damage. In Weaver v. Benson, 152 Tex. 50, 254 S.W.2d 95 (1952), which was a suit for cracks in a wall allegedly caused by nearby blasting operations, the court stated through Justice Garwood:
"Doubtless the fact of even an atomic blast plus the bare fact that the crack exists is not evidence that the latter is due to the former, since obviously cracks *550 in walls occur more often than not for reasons other than blasts. But where there are additional circumstances in evidence tending to date the crack as coincident with the blast, the result may well be different. Surely if there were eyewitness testimony that the crack never existed before the blast and was noted for the first time the day after the blast, the degree of force of the blastits ability to have caused the crackwould be at least a circumstance to fortify or weaken the inference from the date of origin that the crack was caused by the blast .... In blast-damage cases, the fact that causation is so often impossible of proof, except through circumstantial evidence, justifies a rather liberal attitude in judging the relevance of a particular circumstance."
The jury found that an excessive amount of explosive material was detonated on this occasion and there is ample evidence to sustain the finding. We therefore believe that the testimony relative to the attendant circumstances of the terrific explosion and cracks being found in appellees' house shortly following the explosion, which were not there before the explosion, constituted sufficient evidence from which the jury could conclude that the blast was the cause of the damage to the house owned by appellee. Weaver v. Benson, supra; Kelly v. McKay, supra; Universal Atlas Cement Company v. Oswald, supra; Stafford v. Thornton, supra; and Pelphrey v. Diver, 348 S.W.2d 453 (Tex.Civ.App. Austin 1961, writ ref'd, n. r. e.). Points of error 3 and 4 of appellant Day & Zimmermann, Inc., are overruled.
It is an understatement to say that each of the issues presented in this case was hotly contested. The case was well developed by both sides and the jury chose to believe the testimony elicited by appellees and the evidence they presented rather than the opinions of the experts produced by appellant Day & Zimmermann, Inc. When all the evidence is considered, we are of the opinion there was sufficient evidence to support the jury finding appellant Day & Zimmermann, Inc., was negligent in igniting an excessive amount of explosives and that such negligence was a proximate cause of the damages to appellees' house.
We have examined the other points of error presented by Day & Zimmermann, Inc., and find them without merit in view of what we have already said. Appellant strongly urges that the damage to appellees' house, or at least some of the damage, resulted from settling, cracking, bulging, shrinkage or expansion of foundations, walls, floors, ceilings, roof structures, walks or drives that did not result from the explosion. Suffice it to say that if the house were calculated to stand indefinitely, though held together by a single strand of silk, and appellant negligently caused the house to fall apart by initiating an excessive blast, it would not mitigate the damages if the strand failed to hold. The question is whether the damage that was caused was initiated by the negligence of the appellant. The jury concluded, and we hold that the evidence was adequate to sustain the verdict, that the house was in good condition prior to the blast, and that whatever damage was caused was the result of the negligent intensive explosion of August 14, 1968. We further hold that the trial court properly charged the jury and correctly overruled appellant's objections to the charge. Finding no error in the actions of the trial court and the findings of the jury, we respectfully overrule the remainder of the points of error presented by appellant Day & Zimmermann, Inc. We further overrule the points of error presented by appellant, Phoenix Insurance Company. The judgment entered by the trial court is accordingly affirmed and the costs are taxed against Day & Zimmermann, Inc.
DAVIS, J., not participating. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1813723/ | 987 So.2d 1010 (2007)
Andrea PITTMAN, Appellant
v.
STATE of Mississippi, Appellee.
No. 2006-KA-00676-COA.
Court of Appeals of Mississippi.
November 6, 2007.
Rehearing Denied February 19, 2008.
*1014 J.M. Ritchey, attorney for appellant.
Office of the Attorney General by Stephanie Breland Wood, attorney for appellee.
Before LEE, P.J., GRIFFIS and ISHEE, JJ.
PROCEDURAL HISTORY
LEE, P.J., for the Court.
¶ 1. On March 17, 2006, a jury in the Madison County Circuit Court found Andrea Pittman guilty of one count of sale of cocaine and one count of possession of cocaine. On the sale of cocaine count, Pittman was sentenced to thirty years with fifteen years to serve in the custody of the Mississippi Department of Corrections and five years supervised probation. On the possession count, Pittman was sentenced to eight years with five years to serve in the custody of the MDOC, the last three years suspended and five years supervised probation. The sentence imposed in the possession count was to run consecutively to the sentence imposed in the sale of cocaine count. Pittman was also ordered to pay court costs in addition to a $5,000 fine.
¶ 2. Pittman then filed a motion for a new trial, which was denied. Pittman now appeals to this Court asserting numerous issues. As many of Pittman's issues are repetitive we have consolidated the issues as follows: (1) the State was unable to disprove her defense of entrapment; (2) the trial court erred in failing to grant certain jury instructions; (3) there was insufficient evidence to support both convictions; (4) the convictions were against the overwhelming weight of the evidence; (5) the trial court erred by not allowing her to introduce certain evidence; (6) the trial court erred in allowing into evidence a tape recording during rebuttal; and (7) she should have been allowed to assert her "procuring agent" defense. Finding no error, we affirm.
FACTS
¶ 3. This case concerns a drug buy in which a confidential informant, Jerry "Opie" Lee, working for the Madison County Sheriff's Department, contacted a deputy and informed him that he could make a buy from Andrea Pittman. At the time Lee and his girlfriend were living with Pittman, along with Pittman's mother, *1015 Maxine Klaas, and her daughters. Lee had overhead Pittman bragging about having a source from whom she purchased cocaine. Lee informed one of the narcotics agents, Tommy Jones, that Pittman offered to procure cocaine for him. Agent Jones informed Deputy Randy Tucker, who decided to go forward with the transaction.
¶ 4. On April 29, 2005, Lee met with Deputy Tucker and obtained $200 in cash to purchase cocaine from Pittman. During this meeting, Lee's car was searched and he was wired so the deputies could hear his conversation with Pittman. Lee, followed by the deputies, then proceeded to Pittman's place of employment. Lee spoke with Pittman, who informed him that she had to go to a house near Fortification Street in Jackson to buy the cocaine. Lee gave Pittman the money and instructed her to meet him in an hour in the parking lot of the Brookshire's grocery store in Ridgeland. Sometime later Lee called Pittman, who informed Lee that she had purchased two eight balls of cocaine and was on her way to the grocery store. Lee stated that Pittman asked him to buy her a Dr. Pepper because she had just done some cocaine and her throat was numb. Pittman arrived at the grocery store, got into Lee's car and handed him the cocaine. Pittman informed Lee that she got the cocaine "at cost" and did not make any profit off the sale. Pittman also asked Lee to leave some cocaine in her nightstand so she could have some later.
¶ 5. At this point the deputies moved in and placed Pittman under arrest. Pittman's vehicle was searched and a box was found containing cocaine and drug paraphernalia. Also, one of the twenty dollar bills, whose serial number was noted prior to the drug buy, given to Lee by Deputy Tucker, was recovered from Pittman's wallet.
DISCUSSION
I. DID PITTMAN ESTABLISH HER ENTRAPMENT DEFENSE?
¶ 6. Pittman's main issues on appeal concern whether she established her defense of entrapment. Pittman argues that she was entrapped because she was induced into committing a crime that she would not normally have committed and that the conduct by the sheriff's department was so egregious as to amount to entrapment as a matter of law. Pittman's brief identifies standard or classic entrapment as well as entrapment as a matter of law. Standard entrapment occurs "when an innocent person with no prior criminal inclination is induced through persistent entreaties by undercover law enforcement agents to commit an offense." Ealy v. State, 757 So.2d 1053, 1056(¶ 7) (Miss.Ct. App.2000). Once the defendant produces evidence that he or she was induced by a government agent to commit the criminal act and that he or she did not have a predisposition to commit the criminal act, the burden shifts to the prosecution to produce evidence of predisposition and the defendant is entitled to a jury instruction on entrapment. Walls v. State, 672 So.2d 1227, 1230 (Miss.1996). Entrapment as a matter of law occurs when the conduct by law enforcement is so offensive as to require the discharge of the defendant. Robert v. State, 756 So.2d 806, 809(¶ 12) (Miss.Ct.App.1999). A common example of entrapment as a matter of law is in a "supply and buy" scenario where law enforcement initially furnishes and later purchases the contraband with which the accused commits the crime. Ealy, 757 So.2d at 1056(¶ 7).
¶ 7. In regard to the standard entrapment claim, Pittman argues that the evidence shows she was not predisposed to *1016 commit the crime prior to the inducement by law enforcement. However, we find that the record reflects otherwise. Lee testified that Pittman bragged about getting paid by her boss to buy cocaine for him. Pittman knew where to find cocaine and admitted that she had been to the house off Fortification Street at least twice before. Pittman admitted that she had been to this house less than a month prior to her arrest in order to buy some marijuana. Pittman admitted that she asked Lee to set aside some cocaine for her after the sale. Deputy Tucker heard Pittman inform Lee that she had done cocaine prior to arriving at the grocery store parking lot. Although Pittman stated that Lee kept asking her to participate in the sale, there is no evidence that she was fearful or reluctant to participate on the day of the sale. Pittman is not excused from buying or selling cocaine simply because Lee asked her to do so. Id. at 1057(¶ 11); Tribbett v. State, 394 So.2d 878, 882 (Miss. 1981).
¶ 8. Whether a defendant is considered predisposed is a question of fact to be decided by the jury and this Court cannot challenge the jury's findings unless there is not substantial evidence to support them. Moore v. State, 534 So.2d 557, 559 (Miss.1988). "Where the jury resolves [this] point against the defendant, he is generally out of luck on appeal." Id. The jury received the entrapment defense jury instruction and was given an opportunity to determine whether Pittman was predisposed to commit the crime. In finding Pittman guilty, the jury clearly believed she was predisposed to commit both crimes.
¶ 9. In regard to the entrapment as a matter of law claim, Pittman argues that the conduct by law enforcement was outrageous and she should be discharged. Pittman has pointed this Court to nothing in the record which shows any outrageous conduct which would shock our common sensibilities. Rather, Pittman was involved in what Deputy Tucker described as a "cut and dried case." We note that the trial court refused to allow Pittman to submit instructions to the jury concerning her defense of entrapment as a matter of law. The trial court found that the facts of the case did not support Pittman's contention that law enforcement acted outrageously.
¶ 10. Pittman also claims that her situation is a "supply and buy" scenario because the State supplied the cocaine. As the State clearly did not supply the cocaine sold by Pittman, Pittman attempts to argue that having Lee supply her with the $200 is the same as if the State had supplied her with cocaine. There is no Mississippi case law to support this assertion. Rather, this Court has found no entrapment as a matter of law in situations where law enforcement provided the money to the confidential informant to make the purchase. See Lyons v. State, 766 So.2d 38, 40(¶ 10) (Miss.Ct.App.2000). Pittman further argues that her situation is similar to a "reverse sale." In a "reverse sale" law enforcement sells drugs owned by the State to suspected drug dealers. Morgan v. State, 703 So.2d 832, 838 (Miss.1997). Pittman again argues that Lee providing her with $200 to buy the cocaine is equivalent to the State furnishing her with the cocaine. We are also unpersuaded by this argument.
¶ 11. The jury did not find that Pittman had been entrapped and we find no evidence in the record to support entrapment. This issue is without merit.
¶ 12. Additionally, Pittman argues that her entrapment defense also applies to her possession conviction. However, the trial court denied a jury instruction *1017 finding that Pittman's defense in regard to the possession charge, that the cocaine was planted in her car, was in opposition to the requirements of an entrapment defense. Instead, the trial court allowed a constructive possession instruction to be submitted to the jury. An entrapment defense concedes the factual component of the underlying offense. Robert, 756 So.2d at 808(¶ 8). As Pittman contends that the cocaine was not hers, her entrapment defense does not apply to her possession conviction.
II. DID THE TRIAL COURT ERR IN FAILING TO GRANT CERTAIN JURY INSTRUCTIONS?
¶ 13. Pittman argues that the trial court erred in failing to grant jury instructions D-2, D-3 and D-8, all of which define entrapment to some extent as a matter of law. Pittman argues that, although the jury was instructed as to standard entrapment, she was entitled to submit an entrapment as a matter of law instruction to the jury. The trial court denied Pittman's requests, finding that the facts of the case did not support the submission of an entrapment as a matter of law instruction. The trial court enjoys considerable discretion regarding the form and substance of jury instructions. Clemons v. State, 952 So.2d 314, 317(8) (Miss. Ct.App.2007). The defendant is entitled to have instructions given that present her theory of the case unless an instruction "incorrectly states the law, is covered fairly elsewhere in the instructions, or is without foundation in the evidence." Livingston v. State, 943 So.2d 66, 71(14) (Miss.Ct. App.2006).
¶ 14. As previously stated, there was no evidence to support Pittman's contention that she was entrapped as a matter of law. We cannot find that the trial court erred in refusing to grant these instructions; thus, this issue is without merit.
III. WAS THE EVIDENCE SUFFICIENT TO SUPPORT BOTH CONVICTIONS?
¶ 15. Pittman argues that the evidence was insufficient to support both convictions. In reviewing sufficiency of the evidence questions, all evidence supporting the guilty verdict is accepted as true, and the State must be given the benefit of all reasonable inferences that could be reasonably drawn from the evidence. Bell v. State, 910 So.2d 640, 646(¶ 16) (Miss.Ct.App.2005). Furthermore, it is well-settled law that the jury determines the credibility of witnesses and resolves conflicts in the evidence. Evans v. State, 725 So.2d 613, 680-81 (¶ 293) (Miss.1997).
¶ 16. In regard to the sale of cocaine conviction, Pittman argues that, given the misconduct by law enforcement, no reasonable juror could have found beyond a reasonable doubt that she was guilty. Pittman again argues that the State supplied her with cocaine; thus, the trial court should have granted her motion for directed verdict or judgment notwithstanding the verdict. Reiterating that an entrapment defense concedes the factual component of the underlying offense, Robert, 756 So.2d at 808(¶ 8), there is sufficient evidence that Pittman sold cocaine. There was an audio recording of the transaction with Lee, Pittman stated that she bought the cocaine from a man whom she had visited before to buy drugs, and Pittman was caught with some of the buy money in her wallet.
¶ 17. In regard to the possession of cocaine conviction, Pittman argues that the cocaine was planted in her car by law enforcement "amounting to official misconduct that constitutes entrapment as a matter *1018 of law." However, Pittman has provided no evidence to support this contention. Pittman was the only person in her car and did not testify that someone else had been in her car that same day. The cocaine was found in a box in which Pittman admitted that she kept drugs. Pittman believes that her speculation and allegations are sufficient to require reversal. The jury was unpersuaded by these assertions and we are as well. This issue is without merit.
IV. WERE BOTH CONVICTIONS AGAINST THE OVERWHELMING WEIGHT OF THE EVIDENCE?
¶ 18. Pittman also argues that both convictions were against the overwhelming weight of the evidence. Our standard of review concerning the overwhelming weight of the evidence is well-settled: "[W]e will only disturb a verdict when it is so contrary to the overwhelming weight of the evidence that to allow it to stand would sanction an unconscionable injustice." Bush v. State, 895 So.2d 836, 844(¶ 18) (Miss.2005). The appellate court sits as a hypothetical "thirteenth juror." Id. As such, the Court weighs the evidence "in the light most favorable to the verdict." Id. If, in this position, the Court disagrees with the verdict of the jury, "the proper remedy is to grant a new trial." Id.
¶ 19. In regard to both the sale of cocaine conviction and the possession conviction, Pittman merely makes a broad assertion that her convictions were against the overwhelming weight of the evidence without offering any support. The evidence clearly established that Pittman sold and possessed cocaine. We cannot find that to allow these convictions to stand would sanction an unconscionable injustice; thus, we find this issue to be without merit.
V. DID THE TRIAL COURT ERR IN FAILING TO ALLOW PITTMAN TO INTRODUCE CERTAIN EVIDENCE?
¶ 20. In her next issue on appeal, Pittman argues that certain evidence and testimony should have been allowed into evidence. Specifically, Pittman states that the trial court should have allowed testimony showing her close emotional attachment to her mother, Maxine Klaas, and testimony about Agent Tommy Jones's grudge against her and her family. The admissibility of evidence is within the discretion of the trial court, and absent abuse of that discretion, the trial court's decision on the admissibility of evidence will not be disturbed on appeal. McCoy v. State, 820 So.2d 25, 30(¶ 15) (Miss.Ct.App.2002). When the trial court stays within the parameters of the Rules of Evidence, the decision to exclude or admit evidence will be afforded a high degree of deference. Id. Also, "the admission or exclusion of evidence must result in prejudice or harm, if a cause is to be reversed on that account." Id.
¶ 21. Pittman attempted to introduce evidence of her close relationship with her mother and evidence of any mental or emotional condition that caused her to be more vulnerable to Lee's inducement. The trial court found that Pittman's bad childhood and relationship with her mother was not relevant to the defense of entrapment. Rather, the trial court noted that the relevant issue was whether Lee threatened or coerced Pittman into selling the cocaine. The trial court did, however, let Pittman make a proffer outside the presence of the jury.
¶ 22. We cannot find that the trial court erred in disallowing this testimony. The defense of entrapment, as previously noted, is whether Pittman was predisposed to commit the crime and was induced by law *1019 enforcement to commit it. We further note that Pittman herself testified to everything on direct examination to which she claims her mother would have testified. The jury was able to hear extensive testimony from Pittman about the close relationship she had with her mother and the effect her mother's illness had on Pittman. The jury was also able to hear testimony from Klaas herself that Pittman was under much stress at the time of her arrest.
¶ 23. In regard to testimony concerning Agent Jones, Pittman argues that Klaas's refusal to sell Agent Jones a parcel of land in the year 2000 was relevant to show Agent Jones's grudge against Pittman's family and his desire to hurt her family. After hearing testimony from Agent Jones, the trial court found this evidence irrelevant, stating that it had nothing to do with whether Pittman was predisposed to sell cocaine. The trial court found that Agent Jones's offer to buy the land over five years ago would be confusing and misleading to the jury. We agree with the trial court, especially in light of Klaas's testimony that she had no direct dealings with Agent Jones concerning the land deal. We note that Agent Jones was aware of a possible conflict because he testified that since he knew Pittman he did not want to be the agent in charge of the case and turned the information over to Deputy Tucker. The testimony at trial showed that it was Deputy Tucker's decision, not Agent Jones's, to proceed with the buy. This issue is without merit.
VI. DID THE TRIAL COURT ERR IN ALLOWING A TAPE RECORDING OF A MESSAGE TO LEE LEFT BY KLAAS INTO EVIDENCE?
¶ 24. Pittman next argues that the trial court erred in allowing the jury to hear a tape recording of a message to Lee left by Klaas. On cross-examination, Klaas twice testified that she never made threats to anyone at any time. On rebuttal the State introduced a recording of a voice mail message to Lee in which Klaas threatened him with physical violence. Pittman claims that the admission of this tape violated Uniform Circuit and County Court Rule 9.04 because the State never disclosed the existence of this tape to Pittman. As previously stated, our standard of review regarding the admissibility of evidence is whether the trial court abused its discretion. McCoy, 820 So.2d at 30(¶ 15).
¶ 25. Although Pittman argues a discovery violation, we find this situation falls under Rule 608 of the Mississippi Rules of Evidence, which states that "specific instances of the conduct of a witness, for the purpose of attacking or supporting his credibility, ... may not be proved by extrinsic evidence." The supreme court stated that "specific instances of conduct... may not be proved by extrinsic evidence for impeachment purposes; they may only be inquired about on cross-examination." Jackson v. State, 645 So.2d 921, 923 (Miss.1994). In Jackson, the State attempted to impeach a defense witness with extrinsic evidence of specific instances of that witness's conduct and the supreme court found that these attempts were forbidden by Rule 608(b). Id. at 923-24. However, in Jackson, the rule violation was held to be harmless error. Id. at 924. "We are not required to reverse a case based solely upon the showing of an error in evidentiary ruling. A denial of a substantial right of the defendant must have been affected by the evidentiary ruling...." Id. (citing Newsom v. State, 629 So.2d 611, 612 (Miss.1993)).
*1020 ¶ 26. Although the introduction of the tape recording may have been improper, we find any error to be harmless and no reversal required. We cannot find where a substantial right of Pittman's was affected by the ruling. This issue is without merit.
VII. DID THE TRIAL COURT ERR BY REFUSING TO ALLOW PITTMAN TO ARGUE HER "PROCURING AGENT" DEFENSE TO THE JURY?
¶ 27. In her final issue on appeal, Pittman argues that the trial court erred by refusing to allow her to argue her "procuring agent" defense to the jury. Pittman contends that since there was no proof she received any remuneration from the transaction, she was entitled to argue that she was merely a conduit and could not have been convicted of selling the cocaine. However, our law is clear that a seller does not have to realize a profit to be guilty of the sale of a controlled substance. See Boone v. State, 291 So.2d 182, 184 (Miss.1974); Ealy, 757 So.2d at 1058(¶ 18); Edwards v. State, 878 So.2d 1106, 1109(¶ 11) (Miss.Ct.App.2004). That Pittman actively participated in an illegal drug transaction is sufficient to support her conviction without proof of benefit from the sale. See Harrell v. State, 755 So.2d 1, 1(¶ 4) (Miss.Ct.App.1999). This issue is without merit.
¶ 28. THE JUDGMENT OF THE MADISON COUNTY CIRCUIT COURT OF CONVICTION OF COUNT I, SALE OF COCAINE AND SENTENCE OF THIRTY YEARS, FIFTEEN YEARS TO SERVE, THE LAST FIFTEEN YEARS SUSPENDED AND FIVE YEARS OF SUPERVISED PROBATION; COUNT II, POSSESSION OF COCAINE AND SENTENCE OF EIGHT YEARS WITH FIVE YEARS TO SERVE, THE LAST FIVE YEARS SUSPENDED AND FIVE YEARS OF SUPERVISED PROBATION, WITH THE SENTENCE IN COUNT II TO RUN CONSECUTIVELY TO THE SENTENCE IN COUNT I, ALL IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, AND TO PAY A $5,000 FINE, IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., MYERS, P.J., IRVING, CHANDLER, GRIFFIS, BARNES, ISHEE, ROBERTS AND CARLTON, JJ., CONCUR. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1836105/ | 143 B.R. 931 (1992)
In re Walter Aaron HICKENBOTTOM, and Hazel Marie Hickenbottom, aka Hazel Marie Worrall, aka Hazel Marie Ladd, Debtors.
Bankruptcy No. 92-01903.
United States Bankruptcy Court, W.D. Washington, at Seattle.
August 31, 1992.
*932 Peter H. Arkison, Bellingham, Wash., for trustee.
Tom Lester, Tario & Associates, Bellingham, Wash., for debtors.
OPINION ON MOTION FOR SUMMARY JUDGMENT
SAMUEL J. STEINER, Chief Judge.
The debtors have claimed an exemption in their Individual Retirement Account (IRA) under Section 522(d)(10)(E) of the Bankruptcy Code. The Trustee has objected to the exemption and has moved for summary judgment. As of December 31, 1991, the balance in the account was $4,547.27. If the account is liquidated, the actual amount available after payment of penalties will be between $1,137 and $2,683.
DISCUSSION
Section 522(d)(10)(E) provides that a debtor may exempt his or her right to receive
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), 408, or 409 of the Internal Revenue Code of 1954.
. . . . .
The trustee contends that IRAs are not included under Section 522(d)(10)(E), because 1) IRAs are established by the debtor for the debtor and as such are included in the insider exception of subparagraph (i); 2) IRAs are not "similar plan[s]" under the language of the statute, because they are under the debtor's control; 3) public policy dictates that IRAs should not be exempt; and 4) the debtors in this case have not established that their IRA is reasonably necessary for their support.
Counsel have not cited nor has the Court been able to find an appellate case directly in point. However, the Bankruptcy Court for the Western District of Wisconsin has performed an exhaustive review of the case law and has reached a rational conclusion in In re Cilek, 115 B.R. 974 (Bankr. W.D.Wis.,1990). That Court concludes that IRA accounts are exempt under Section 522(d)(10)(E), to the extent reasonably necessary *933 for the support of the debtor and the debtor's dependents.
1. Are IRAs included in the insider exception of Section 522(d)(10)(E)(i)? The exemption for retirement plans is subject to an exception for plans or contracts (i) established by an insider that employed the debtor, (ii) where payments are made on account of age or length of service, and (iii) the plan does not qualify under certain provisions of the Internal Revenue Code, including Section 408. The elements of the exception are joined with a conjunction; hence all three elements must be met if the exception is to apply. Since IRA accounts are governed by Section 408 of the Internal Revenue Code, they are not disqualified from exemption under Section 522(d)(10)(E).
2. Are IRAs "similar plan[s]" under the language of the statute? The trustee suggests that the IRA should not be exempt because the debtor has control over the account.
Section 522(d)(10)(E) permits the debtor to exempt payments under "a stock bonus, pension, profit-sharing, annuity, or similar plan. . . ." (Emphasis supplied.) The legislative history characterizes the benefits included in paragraph (10) as being "akin to future earnings," the intent being to "ensure that such benefits are available for retirement purposes." In re Pauquette, 38 B.R. 170 (Bankr.D.Vt.1984). A small number of courts, including Pauquette, have concluded that IRAs do not qualify for the exemption because the debtor retains control over such funds and may thus divert them for other purposes.
The Court in In re Cilek rejects this approach, noting that the issue of control, while relevant if the asset at issue is alleged to be a spendthrift trust under Section 541, is not a factor in determining the validity of an exemption.
Control relates to the ownership of assets, not the efficacy of exemptions. The purpose of 11 U.S.C. Section 522(d) is to provide for the basic needs of discharged debtors and the concept of control does not rationally relate to a discharged debtor's basic needs. Those courts which distinguish IRAs from other retirement plans because of the debtor's control over the IRA mistakenly apply a concept helpful in determining the property of the estate under the Act to the unrelated determination of exemptions under the Code.
Accordingly, just as a claimed exemption for a homestead or a motor vehicle shall not be denied because the debtor controls his house or his car, a claimed exemption for an IRA shall not be denied because the debtor controls the IRA.
115 B.R. at 987.
The Cilek Court reasons that "similar plan" means a plan which shares characteristics in common with the four specific types of plans listed in Section 522(d)(10)(E). The four plans listed differ substantially from one another. The one important characteristic they share is that they provide a substitute for future wages. While IRAs also differ from the other plans listed, they are similar in that they are designed to provide retirement benefits to individuals. They are not merely savings accounts, in that depositors may not withdraw funds from an IRA without paying a substantial penalty of 10% in addition to the deferred income tax. Further, IRAs may be funded with stock and not merely cash. The Court concludes that IRAs are similar to pensions in the sense intended by the statute, that is, "Just as pensions were designed to function as a substitute for future earnings, so too were IRAs designed to function as a substitute for future earnings." 115 B.R. at 988.
3) Does public policy dictate that IRAs should not be exempt? The policy that is furthered by exemption statutes is that of giving honest debtors a fresh start. More specifically, the policy behind the pension exemption is to protect a debtor's future income stream. Congress' commitment to this policy is well illustrated in the favorable tax treatment given on account of funds devoted to retirement plans, as well as the anti-assignment protection afforded other ERISA-qualified plans. IRAs are often the only source of retirement funds which self-employed individuals have *934 been able to put together. By virtue of the $2,000 limitation on the amount that may be contributed to an IRA each year, such accounts are typically much smaller than other pension plans that are fully protected. To conclude that an IRA is not exemptible under Section 522 would discriminate against self-employed individuals whose marginal income and lack of sophistication preclude their participation in other, less limited plans. The need to protect creditors against debtors placing large sums into pension funds in order to avoid paying their debts is met by the need limitation contained in Section 522(d)(10)(E).
In response to a similar argument, the Cilek Court stated:
Such an argument betrays a bias against exemptions which finds no basis in the language of the Bankruptcy Code and a disdain for the legislative branch which loses sight of the purpose of the Bankruptcy courts. Debtors may plan their bankruptcies to take full advantage of the exemption laws and upon discharge debtors may do whatever they wish with their exempt property. . . . Accordingly, this Court disagrees with the argument that IRA exemptions are against public policy.
115 B.R. at 988.
4) Have the debtors met their burden of establishing that the IRA is reasonably necessary for their support? The party objecting to an exemption has the burden of proving that the exemption is not properly claimed. In this case, the trustee must establish that the $4,547.27 claimed exempt is not reasonably necessary for the support of the debtors and their dependents.
Mr. Hickenbottom is a self-employed truck driver, and Ms. Hickenbottom is an account clerk. On their Schedule I, they report $1,200 net income for Ms. Hickenbottom. Mr. Hickenbottom's monthly gross income is $4,640. Deducting $2,866 in business expense as shown on Schedule J, it appears that Mr. Hickenbottom's net income is roughly $1,774. The debtors have no dependents. They own a house which has a value of $53,220 and an encumbrance of $50,700. They own a number of vehicles, most of which are encumbered. They also own a 1973 Bayliner boat and trailer valued at $1,000. The trustee has liquidated a 1984 Western Star Tractor. The remainder of their property consists of household goods and a set of wedding rings. They are both 46 years old. They established the IRA in 1986 and have not added to it since then. They state that they will be entitled to limited social security benefits and will need the IRA to fund their limited retirement.
This Court concludes that the trustee has met his burden of showing that the $4,000 which the debtors have been able to put aside will not be reasonably necessary for their future support. Actually, such a small IRA offers little chance of becoming so large that it would generate a stream of income greater than the debtors' retirement needs.
CONCLUSION
1. The IRA accounts are exemptible by the debtors.
2. The trustee's objection should be overruled and his motion for summary judgment should be denied.
3. Pursuant to In re Palmer, 140 B.R. 765 (Bankr.C.D.Cal., 1992), summary judgment should be entered in favor of the debtors. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2440475/ | 242 F. Supp. 2d 469 (2003)
UNITED STATES of America, Plaintiff,
v.
Opal TYSON, Defendant, and
Ford Motor Company Retirement Trust, Garnishee.
United States District Court, E.D. Michigan, Southern Division.
January 14, 2003.
*470 Jacqueline M. Hotz, United States Attorney's Office, Detroit, MI, for Plaintiff.
Julia T. Baumhart, Birmingham, MI, for Garnishee (Ford Motor Co. Retirement Trust).
Pro Se, Defendant.
OPINION AND ORDER
WHALEN, United States Magistrate Judge.
This matter is before the Court on Defendant Opal Tyson's and Garnishee Ford Motor Company Retirement Trust's objection to a writ of garnishment. The matter was referred to this Magistrate Judge for hearing and determination, pursuant to 28 U.S.C. § 636(b)(1)(A). Oral argument was heard on November 19, 2002, after which the parties filed supplemental briefs.
The issue before the Court is whether the anti-alienation provisions of the Employees Retirement Income Security Act (ERISA) and the Internal Revenue Code preclude the government from obtaining a writ of garnishment against a criminal defendant's interest in a qualified pension plan, under provisions of the Federal Debt Collections Procedures Act (FDCPA), in order to enforce an order of criminal restitution. The parties acknowledged at oral argument that there is no controlling authority in this Circuit which would provide an answer to this question. However, for the reasons set forth below, I find that the FDCPA permits the garnishment of Defendant's pension plan.
I.
Defendant pled guilty to an indictment charging her with possession of stolen mail, 18 U.S.C. § 1708.[1] On June 7, 2000, the Court entered a Judgment and Commitment Order imposing a prison term of 12 months, to be followed by a two-year term of supervised release. A special condition of supervised release was that she pay restitution of $15,455.05, apportioned as follows:
State of Michigan: $7,600.00
AAA of Michigan: $3,482.90
Comerica Bank: $ 78.15
Internal Revenue Service: $4,294.00
In addition, Defendant was also ordered to pay a special assessment of $100.00. To date, she has paid $45.00 toward restitution and special assessment.
On September 23, 2002, the government obtained a writ of garnishment against Defendant's interest in the Ford Motor Company Retirement Trust (FMC Trust). FMC Trust served an answer on October 2, 2002, claiming that Defendant's pension benefits are exempt from garnishment under ERISA.
II.
The resolution of this case requires an examination and reconciliation of various provisions of three statutes: (1) ERISA, particularly 29 U.S.C. § 1056(d)(1); (2) the FDCPA, particularly 18 U.S.C. § 3613; and (3) the Internal Revenue Code, particularly 26 U.S.C. § 401(a)(13)(A).
*471 Section 206(d) of ERISA, the anti-alienation provision (29 U.S.C. § 1056(d)(1)), states, "Each pension plan shall provide that benefits provided under the plan may not be assigned or alienated." In Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365, 110 S. Ct. 680, 107 L. Ed. 2d 782 (1990), the Supreme Court recognized that absent some exception, this provision bars garnishment of pension benefits in an ERISA qualified plan. Guidry declined to endorse an implied equitable exception to the anti-alienation clause "either for employee malfeasance or for criminal misconduct." Id., 493 U.S. at 376, 110 S. Ct. 680. Pointing out that the provision "reflects a considered congressional policy choice, a decision to safeguard a stream of income for pensioners (and their dependents, who may be, and perhaps usually are, blameless), even if that decision prevents others from securing relief for the wrongs done to them," Id., the Court held that § 206(d) is to be strictly applied unless and until Congress carves an exception.[2]
At issue in Guidry was the attempt by a private creditor to enforce the terms of a civil judgment through garnishment of pension funds. After Guidry, it is clear that neither Comerica Bank, AAA of Michigan, nor any other beneficiary of the restitution order in the present case could enforce its claim against Ms. Tyson's interest in the FMC Trust, even if it had an independent civil judgment against her. However, Guidry does not address whether § 206(d) insulates pension funds against orders of restitution in criminal cases. In the present case, the government argues that 18 U.S.C. § 3613, part of the FDCPA, represents an express statutory exception to ERISA's anti-alienation provision.
§ 3613 provides as follows, in pertinent part:
"(a) Enforcement.... Notwithstanding any other Federal law ... a judgment imposing a fine may be enforced against all property or rights to property of the person fined, except that (1) property exempt from levy for taxes pursuant to section 6334(a)(1), (2), (3), (4), (5), (6), (7), (8), (10), and (12) of the Internal Revenue Code of 1986 shall be exempt from enforcement of the judgment under Federal law." (Emphasis added).
§ 3613(f) provides that "all provisions of this section are available to the United States for the enforcement of an order of restitution."
A criminal defendant's interest in an ERISA qualified pension plan does not fit within any of the exceptions listed in § 3613(a)(1), or within any other statutory exception created by the FDCPA.[3] On its face, the FDCPA would permit enforcement of a criminal restitution order against a pension fund such as the FMC Trust. The question then becomes whether § 3613 is in conflict with the anti-alienation clause of ERISA. In this regard, ERISA contains the following provision at 29 U.S.C. § 1144(a):
"Nothing in this subchapter shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States ... or any rule or regulation issued under any such law."
To the extent that the FDCPA is in conflict with ERISA, this "savings provision" *472 mandates that the conflict be resolved in favor of the FDCPA. Further buttressing this conclusion, the FDCPA, specifically 28 U.S.C. § 3003(c)(1)-(10), states that "[t]his chapter shall not be construed to supersede or modify the operation of a number of specific federal statutes. ERISA is not among those listed. In United States v. Sawaf, 74 F.3d 119, 124 (6th Cir.1996), the Sixth Circuit noted, "[I]f Congress, in enacting the FDCPA, had intended it to be subordinate to ERISA, it easily could have included ERISA among the statutes that the FDCPA does not supersede."[4] The language of both statutes unambiguously shows that in a contest between arguably inconsistent provisions, the FDCPA trumps ERISA. Hence, two basic rules of statutory construction support the conclusion that the FDCPA represents an exception to the anti-alienation clause of ERISA. First, where the terms of a statute are unambiguous, "judicial inquiry is complete," and no further construction is necessary. Burlington Northern R.R. v. Oklahoma Tax Commission, 481 U.S. 454, 461, 107 S. Ct. 1855, 95 L. Ed. 2d 404 (1987). Second, in interpreting two coordinate federal statutes (ERISA and FDCPA), the reviewing court must give full effect to both statutes. In re Lucas, 924 F.2d 597, 602 (6th Cir.1991).
In United States v. Rice, 196 F. Supp. 2d 1196, 1201 (N.D.Okla.2002), the Court specifically held that 18 U.S.C. § 3613 was a statutorily created exception to the antialienation clause of ERISA:
"The Supreme Court's decision in Guidry stands only for the proposition that ERISA's anti-alienation provision is applicable unless and until Congress determines an exception should be made. This Court finds that Congress specifically created such an exception when it passed 18 U.S.C. § 3613 and decided to limit the exemptions available to criminal defendants owing fines. With § 3613(a), Congress made all of a criminal defendant's property subject to execution to satisfy a fine, and Congress provided for minimal exemptions, which do not include an exemption for ERISA pension plan benefits. Thus, § 3613 is the type of `considered congressional policy choice' which was lacking in Guidry; it is a Congressionally created exception to ERISA's anti-alienation provision."
Accordingly, the Court in Rice approved garnishment of a criminal defendant's interest in a pension fund, pursuant to the FDCPA, in order to satisfy a criminal fine. Because § 3613(f) makes the FDCPA equally applicable to orders of restitution, the government is entitled to the same remedy in the present case.
The Fourth Circuit's decision in United States v. Smith, 47 F.3d 681 (4th Cir.1995), cited by FMC Trust, is factually inapposite. In Smith, the criminal judgment itself ordered the defendant to turn over his pension benefits each month as he received them. The government did not attempt to collect restitution through the FDCPA, and the Court did not in any way discuss the impact of the FDCPA. Indeed, the principal issue in Smith was whether the anti-alienation provision of ERISA applied to pension benefits after they had been distributed to the defendant, a question not before this Court.
FMC Trust argues that, notwithstanding the FDCPA, the Internal Revenue Code, specifically 26 U.S.C. § 401(13)(A) precludes garnishment of the pension fund *473 when read in conjunction with ERISA. § 401(13)(A) provides:
"A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that benefits provided under the plan may not be assigned or alienated."
FMT Trust accurately points out that the corresponding IRS regulation, 26 C.F.R. § 1.401(a)-13, articulates only two exceptions to the anti-alienation provision of the Internal Revenue Code relating to qualified employee pension plans: (1) enforcement of a tax levy made pursuant to 26 U.S.C. § 6331, and (2) collection by the United States on a judgment resulting from an unpaid tax assessment. FMT Trust argues, therefore, that "[t]he IRS regulations do not exempt criminal fines and restitution orders from the anti-alienation provision of Internal Revenue Code Section 401(13)(A)." Supplemental Brief of Garnishee, at 2.
If we were dealing only with the antialienation provisions of ERISA and the Internal Revenue Code, the Garnishee might have a point. However, the Garnishee fails to consider the clear language of 18 U.S.C. § 3613(c):
"... [A]n order of restitution made pursuant to sections 2248, 2259, 2264, 2327, 3663, 3663A, or 3664 of this title, is a lien in favor of the United States on all property and rights to property of the person fined as if the liability of the person fined were a liability for a tax assessed under the Internal Revenue Code of 1986."
This section of the FDCPA makes clear that an order of restitution such as Ms. Tyson's is the functional equivalent of, and to be treated precisely as, a tax liability.[5] Under the IRS regulations cited above, such tax liability is an exception to the anti-alienation provision of 26 U.S.C. § 401(13)(A). This brings a criminal fine or restitution order within the purview of United States v. Sawaf, supra, which permits garnishment of a pension fund to satisfy a tax deficiency. Thus, all three statutesERISA, FDCPA, and the Internal Revenue Codeare in perfect harmony as to the ability of the government to garnish a qualified pension plan in order to enforce either a federal income tax liability or a criminal restitution order. As the court noted in United States v. Rice, supra, 196 F.Supp.2d at 1201:
"Section 3613 and its legislative history make it clear that criminal fines are to be treated as if there were a liability for federal income taxes. Thus, if delinquent taxpayers cannot protect their pension benefits, criminals owing a fine may not do so either. A contrary result would seem anomalous, and that fact probably accounts for the legislature's decision to equate criminal fines with tax deficiencies."
Finally, FMC Trust argues that a 1994 amendment to ERISA limits any criminal judgment exception to the anti-alienation clause to conduct which inflicts injury on the retirement plan itself. The amendment, 29 U.S.C. § 1056(d)(4), states that the anti-alienation provision "shall not apply to any offset of a participant's benefits provided under an employee pension benefit plan against an amount that the participant is ordered or required to pay to the plan if ... the order or requirement to pay arises ... under a judgment of conviction for a crime involving such plan." This amendment, enacted after the Supreme Court's decision in Guidry, creates an exception *474 which allows a private entity, specifically, a pension plan, to offset its losses caused by criminal conduct directed against the plan. Before this amendment, Guidry precluded even this limited remedy. Both Guidry and the 1994 amendment to ERISA deal with the rights of private creditors vis-a-vis qualified pension plans, not with the right of the government to proceed against a pension plan pursuant to the FDCPA. Section 1056(d)(4) is therefore irrelevant to the issue before this Court.
Accordingly, this Court holds that 18 U.S.C. § 3613 is an express statutory exception to the anti-alienation provision of ERISA found at 29 U.S.C. § 1056(d)(1) as well as the corresponding provision of the Internal Revenue Code found at 26 U.S.C. § 401(13)(A). In order to enforce the criminal restitution order in Ms. Tyson's case, the government is therefore entitled to a writ of garnishment against her interest in the Ford Motor Company Retirement Trust. However, because § 3613 is, by its terms, limited to criminal fines and orders of restitution, the government is not entitled to garnish any portion of Ms. Tyson's pension funds to satisfy the $100.00 special assessment imposed at sentencing.
IT IS SO ORDERED.
NOTES
[1] United States v. Opal Tyson, E.D. Mich. No. 99 CR 80692.
[2] Guidry resolved a conflict among the Circuits. In United Metal Products v. National Bank of Detroit, 811 F.2d 297 (6th Cir.1987), the Sixth Circuit held that there is no implied fraud exception to ERISA.
[3] The only pension payments excepted are those defined by § 6334(a)(6) of the Internal Revenue Code, which cover annuity or pension payments under the Railroad Retirement Act, and military pensions.
[4] In Sawaf, the Court held that the anti-alienation provision of ERISA does not preclude the government from garnishment of pension funds under the FDCPA in order to satisfy income tax deficiencies.
[5] The order of restitution in Ms. Tyson's case falls within at least two enumerated sections of Title 18: § 3663(a)(3)(order of restitution agreed to in a plea agreement) and §§ 3663A(c)(1)(A)(ii) and (B)(order of restitution involving an offense against property in which an identifiable victim or victims suffered pecuniary loss). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2457260/ | 895 S.W.2d 469 (1995)
Christina VINCENT, Appellant,
v.
WEST TEXAS STATE UNIVERSITY, Thomas Kale, Marvin Patton, Ed Dempsey, Ray Blevins, and Ray Turman, Appellees.
No. 07-94-0171-CV.
Court of Appeals of Texas, Amarillo.
March 14, 1995.
*470 Law Offices of Charles W. Crow, Charles Crow, Amarillo, for appellant.
Atty. Gen. of Texas, Asst. Atty. Gen., General Litigation Division, Jose M. Rangel, Austin, for appellee.
Before REYNOLDS, C.J., and DODSON and QUINN JJ.
QUINN, Justice.
Christina Vincent (Vincent) appeals from an Order Granting Defendants' Plea to the Jurisdiction and Order Granting Defendants' Motion for Summary Judgment. In five points of error, she contends that abatement rather than dismissal was the proper remedy, that dismissal deprived her of due process *471 in claiming damages under the Texas Tort Claims Act and the theory of wrongful discharge, that summary judgement was improper due to existing issues of law and fact, and that dismissal violated public policy and 42 U.S.C. § 1983. We disagree and, therefore, overrule each point.
FACTS
According to the second amended petition, Vincent sued West Texas State University (WTS), and WTS employees Thomas Kale, Marvin Patton, Ed Dempsey, Ray Blevins and Ray Turman (collectively referred to as the Employees) for sexual harassment, retaliation, denial of "free speech" accorded by the Texas Constitution, violation of the "Texas Constitution, Article 3a," and wrongful termination. Each allegation arose from the sexually harassing conduct of Dempsey, Blevins and Turman, her co-employees at WTS. Furthermore, she averred that her superiors, Kale and Patton, did nothing to end the misbehavior, that her job performance underwent unjust criticism, and that her eventual discharge violated official policy and procedure.
Vincent never complained of her treatment to the Equal Employment Opportunity Commission (EEOC) nor the Texas Human Rights Commission (Commission). Instead, she notified the WTS president of her grievance.
Eventually, suit was filed on August 23, 1991. The Appellees joined issue by answer and amended their pleading on June 8, 1992, to allege sovereign and quasi-judicial immunity. Approximately seventeen months later, on November 10, 1993, WTS and the Employees moved for summary judgment. They believed themselves entitled to same not only because of the immunity accorded a sovereign but also their opponent's failure to exhaust administrative remedies. Twelve days later, Vincent filed her first amended petition which, for the most part tracked the original. However, on November 30, 1993, approximately four days before the pending summary judgment motion was heard, a second amended petition was filed. It too focused upon the conduct and causes of action underlying her first two pleadings. Added, however, were allegations complaining of her termination in violation of established policy and procedure, denial of "free speech to complain about [the sexually harassing] conduct... [in] violation of the Texas Constitution, Article 1, § 8," denial of her "right to be free of sexual harassment and to complain and receive relief as assured by Texas Constitution, Article 3a [sic]," and wrongful discharge "for exercising her right of free speech to complain about the Defendants' failure to follow procedures and policies...."
Accompanying the second amended pleading was Vincent's response to the motion for summary judgment. In it, she suggested that the proceeding should be abated while she secured legislative permission to sue the State for sexual harassment, that only the claim of sexual harassment would require legislative approval, that she could, in the alternative, immediately proceed under the Texas Tort Claims Act, that the motion was tantamount to a special exception, and that she complied with the administrative review procedures demanded by the Texas Commission on Human Rights Act.
The trial court ultimately entered both an "Order Granting Defendants' Plea to Jurisdiction" and an "Order Granting Defendants' Motion for Summary Judgment." The former dismissed the suit to the extent that it averred claims against the Employees "in their official capacities." The latter mentioned no specific basis but simply ordered that Vincent "take nothing" from her six antagonists.
ABATEMENT V. DISMISSAL
In point one, Vincent contends that the court erred in dismissing rather than abating her action. Abatement would have afforded her an opportunity to secure legislative approval to pursue her claim for sexual harassment against the State, preserve her work product developed to date, and avoid the need to file another suit. We disagree and overrule the point for several reasons.
a. Argument Untimely
First, the argument initially appeared in Vincent's response to the motion for summary *472 judgment. The latter, like her second amended petition, was filed four days before the December 3rd summary judgment hearing and in violation of the deadline prescribed by Texas Rule of Civil Procedure 166a(c). The record does not reveal whether she obtained leave of court to so act belatedly. Under this circumstance, we may not consider the response or its contents. Washington v. City of Houston, 874 S.W.2d 791, 794 (Tex.App.Texarkana 1994, no writ); Atchley v. NCNB Texas Nat'l Bank, 795 S.W.2d 336, 337 (Tex.App.Beaumont 1990, writ denied); Goswami v. Metropolitan Sav. & Loan Ass'n, 751 S.W.2d 487, 490 n. 1 (Tex.1988); accord, Equisource Realty Corp. v. Crown Life Ins. Co., 854 S.W.2d 691, 694-95 (Tex.App.Dallas 1993, no writ) (holding that the legality of the summary judgment therefore depends solely upon the sufficiency of the movant's evidence and authorities).[1]
b. No Need for Legislative Consent
Even had Vincent timely urged abatement rather than dismissal, the trial court, nevertheless, acted properly. Contrary to her suppositions, sovereign immunity did not pretermit recovery for sexual harassment. The bar was waived when the legislature passed the Commission on Human Rights Act (CHRA). That statute forbade an employer from discriminating. Furthermore, the term "employer" encompassed political subdivisions, state agencies and instrumentalities, as well as public institutions of higher learning. Tex.Rev.Civ.Stat.Ann. art. 5221k, 2.01(5). WTS fell within, at the very least, the latter category and was subject to private suit. Id. at §§ 6.01(a) & (e) & 7.01(a) & (g).[2] Therefore, granting Vincent abatement to secure legislative approval to do that already permitted by statute would have been meaningless.
WRONGFUL DISCHARGE AND THE TORT CLAIMS ACT
In points of error two and three, Vincent protests the trial court's decision to dismiss, for lack of jurisdiction, those portions of the suit invoking the Tort Claims Act (the Act) and "wrongful discharge". In doing so, it purportedly violated her due process rights. Through point four the Appellant objects to summary judgment since the Act allegedly negated the Appellees' sovereign immunity. We again disagree and overrule each point.
a. Claims against WTS and the Employees in Their Official Capacities
To the extent that Vincent sued WTS and the Employees in their official capacities, she sued the State of Texas. Tyrell v. Mays, 885 S.W.2d 495, 499 (Tex.App.El Paso 1994, writ dism'd); Alcorn v. Vaksman, 877 S.W.2d 390, 403 (Tex.App.Houston [1st Dist.] 1994, no writ). That implicated the doctrine of sovereign immunity which deprived the court of subject-matter jurisdiction. State v. Lain, 162 Tex. 549, 349 S.W.2d 579, 582 (1961). Thus, dismissal was mandatory unless Vincent could show that the state somehow waived the bar. Id.; Pickell v. Brooks, 846 S.W.2d 421, 424-25 (Tex.App.Austin 1992, writ denied). She attempted to do so by invoking the Tort Claims Act.
The Act constitutes a limited waiver of sovereign immunity. To invoke it, though, the injury complained of must relate to or be caused by a "condition or use of tangible personal property or real property." Tex. Civ.Prac. & Rem.Code Ann. § 101.021(2). Furthermore, only those items having a "corporeal, concrete, and palpable existence" are considered tangible. University of Texas Med. Branch v. York, 871 S.W.2d 175, 178 (Tex.1994). Thus, it was incumbent upon Vincent to illustrate how a condition or use of tangible property injured her.[3]
*473 The tangible items at bar, according to the Appellant, were WTS' student newspaper and a job discrepancy form. With regard to the newspaper, she purportedly suffered embarrassment and stress from an article describing the harassment inflicted upon her by her co-workers. With regard to the job form, it allegedly injured her by incorporating false information.
Had either paper item come in physical contact with her body in a manner resulting in injury, then Vincent would have stood on firm ground. Yet, the item which actually injured her, assuming injury resulted, was not the physical documents but the information printed on them. Furthermore, information is intangible; it lacks the "corporeal, concrete, and palpable" existence required by the Act. University of Texas Med. Branch v. York, 871 S.W.2d at 178-79; Washington v. City of Houston, 874 S.W.2d 791, 795-96 (Tex.App.Texarkana 1994, no writ). That someone may affix the information on to a tangible item, such as a record, does not by trick of alchemy render it corporeal. Id. Thus, and as a matter of law, neither the WTS newspaper article nor the discrepancy form satisfied the Act's prerequisites. The wall of sovereign immunity stood.
To the extent that Vincent may now alternatively argue that the Commission on Human Rights Act (CHRA) waived the immunity as described above, relief, nevertheless, would remain unavailable. She did not satisfy the statute's administrative perquisites.
The CHRA, Tex.Rev.Civ.Stat.Ann. art. 5221k, § 1.01 (Vernon 1987), recodified, Tex.Labor Code Ann. § 21.001 (Vernon Pamp.1995), proscribes various types of discriminatory practices.[4] The type pertinent here concerns sexual discrimination. Tex.Labor Code Ann. § 21.051(1). Within its prenumbra lies sexual harassment. Ewald v. Wornick Family Foods Corp., 878 S.W.2d 653, 658 (Tex.App.Corpus Christi 1994, writ denied) (defining sexual harassment as discrimination for purposes of the Act); Syndex Corp. v. Dean, 820 S.W.2d 869, 870-71 (Tex.App.Austin 1991, writ denied) (holding that sexual harassment is universally accepted as unlawful employment discrimination). Thus, employees victimized by sexual harassment have a viable, statutory cause of action against private and governmental employers.
Nonetheless, before the grievant may sue for redress, he must tender his complaint with the Commission on Human Rights (Commission) within 180 days of the suspected misconduct. Tex.Labor Code Ann. §§ 21.201(a) & 21.202(a); Schroeder v, Texas Iron Works, Inc., 813 S.W.2d 483, 485 (Tex. 1991). This affords the Commission opportunity to investigate the allegation, informally eliminate any discrimination, and minimize costly litigation. Id. at §§ 21.203, 21.204(a) & 21.207(a); Stinnett v. Williamson County Sheriff's Dept., 858 S.W.2d 573, 577 (Tex. App.Austin 1993, writ denied). Indeed, the requirement is of such import that failing to comply with it deprives the court of subject-matter jurisdiction. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d at 485-89. In other words, unless and until an employee timely submits his grievance to the Commission, the courts of Texas are barred from adjudicating it. Id.; Stinnett v. Williamson County Sheriff's Dept., 858 S.W.2d at 576; Ridgway's Inc. v. Payne, 853 S.W.2d 659, 663 (Tex.App.Houston [14th Dist.] 1993, no writ).
Additionally, one cannot avoid the exhaustion prerequisite by pursuing the claims under some related theory. Stinnett v. Williamson County Sheriff's Dept., supra. The *474 Stinnett case involved an employee who complained of age discrimination and retaliation for reporting same. Though he initially filed his complaint with the Commission, he later sued under the "Whistle Blower Act," Tex. Rev.Civ.Stat.Ann. art. 6252-16a, now Tex. Gov.Code Ann. § 554.001 et seq. (Vernon 1994). His ex-employer protested, contending that the CHRA afforded the exclusive means of redress. The appellate court agreed. Stinnett v. Williamson County Sheriff's Dept., 858 S.W.2d at 576-77. It compared the two acts and their underlying purposes; both were concerned with unlawful retaliation in the workplace. Then it considered the purpose underlying the extensive administrative scheme created by the CHRA. Upon completing this process, it concluded that denying the CHRA preemptive status undermined the "policy of Title VII to use administrative procedures to promote conciliation and persuasion rather than litigation." Id. at 577. "Just as this goal is promoted by requiring exhaustion ... it is furthered by placing the exclusive forum for resolution of violations of the Human Rights Act in the Commission." Id. Accordingly, the CHRA subsumed recovery under the Whistle Blowers Act when the activity complained of entailed conduct prohibited by the CHRA.
Here, Vincent admitted that she did not submit her grievance to either the Commission or its federal cousin the Equal Employment Opportunity Commission (EEOC). More importantly, the window granted her to do so closed long ago. Thus, the immunity piercing remedies provided by the CHRA were lost.
We do not agree with Vincent's suggestion that by tendering the complaint to the WTS president she exhausted her administrative remedies. The CHRA states that the reports may be submitted to the "Commission". Tex.Rev.Civ.Stat.Ann. art. 5221k, § 6.01(a). The commission referred to is the Commission on Human Rights. Id. at § 2.201(2). That statutorily created body has the duty to investigate, conciliate, and litigate acts of discrimination. Id. at §§ 6.01 & 7.01. Save for the EEOC, the only other entity allowed to perform these functions are "local commissions." Id. at § 4.01 et seq. Yet, only "political subdivisions" comprise such commissions, and only counties and incorporated cities and towns comprise such subdivisions. Id. at §§ 2.01(9) & (13). Neither universities, their presidents, nor their administrative personnel are encompassed by the definitions. Ignoring that fact and adopting Vincent's position amounts to eviscerating the comprehensive administrative scheme established by the CHRA, a result which this court will not condone.
Having failed to vest the trial court with jurisdiction or to create a material issue of fact concerning the application of the Tort Claims Act, Vincent's allegations against WTS and the Employees in their "official" capacity had to be dismissed. Moreover, in so dismissing them, the trial court denied no one due process. Gay v. State, 730 S.W.2d 154, 158 (Tex.App.Amarillo 1987, no writ).
b. Suit Against the Employees in Their Individual Capacities
To the extent that Vincent sued the Employees in their "individual" or "personal" capacities, sovereign immunity is not an obstacle.[5] However, other matters are. For instance, in failing to exhaust her administrative remedies, she denied the court jurisdiction to assess liability against the Employees for sexual harassment in any capacity. The omission also barred her "wrongful discharge" claim. Specifically, the latter involved retaliation for her reporting sexually harassing activity. The CHRA proscribes such retaliation and, in doing so, preempts suit under related theories. Stinnett v. Williamson County Sheriff's Dept., supra. Thus, any attempt to redress the supposedly *475 wrongful termination had to comport with administrative requirements of the CHRA.
Next, City of Beaumont v. Bouillion, 896 S.W.2d 143 (Tex.1995) pretermits Vincent's monetary recovery for the purported violations of article I, sections 3a and 8 of the Texas Constitution. There the Supreme Court eschewed the opportunity to create private rights of action for constitutional torts involving the Texas Constitution. Id. at 147. Though only article I, § 8 of the Constitution was involved, the court's reasoning is equally applicable to damage actions under article I, § 3a. In either case, the provision grants no private right of action for damages.[6]
42 U.S.C. § 1983
In her last point of error, Vincent states that because the case "evolved into ... complaints of misconduct and professional abuse... by Appellee's agents who acted under the apparent authority granted them as [S]tate employees ... [s]uch conduct may be construed by a fact finder as violations of 42 U.S.C. § 1983 if tried." We again disagree and overrule the point.
First, as noted by Appellees during oral argument, the point lacks case citation and substantive development. That alone provides ample basis to reject it.
Second, Vincent's live pleading mentions nothing of 42 U.S.C. § 1983. Nor does it cite any federal statute, federal common law or federal constitutional right which was violated. The only references to constitutional infringement concerned article 1, §§ 3a and 8 of the Texas Constitution, and a § 1983 suit cannot be founded upon violation of state law by state actors.
Accordingly, we affirm the summary judgment and order dismissing for lack of jurisdiction.
NOTES
[1] Like treatment is not accorded Vincent's belated second amended petition. We must deem it timely. Goswami v. Metropolitan Sav. & Loan Ass'n, 751 S.W.2d 487, 490 (Tex.1988).
[2] In discussing those subject to investigation and suit, the CHRA uses the term "respondent". Tex. Rev.Civ.Stat.Ann. art. 5221k, §§ 6.01(a) & 7.01(a). "Respondent", means "person". Id. at § 6.01(a). And, "person" includes the State and agencies of the State. Id. at § 2.01(11). Thus, WTS was a "respondent" potentially culpable for sexual harassment.
[3] To require Vincent to allege in her petition facts satisfying the Tort Claims Act is quite appropriate. The Act vests the court with subjectmatter jurisdiction, and it was her burden to aver the presence of such jurisdiction via the face of the petition. Green Int'l Inc. v. State, 877 S.W.2d 428, 437 (Tex.App.Austin 1994, no writ); Liberty Mutl. Ins. Co. v. Sharp, 874 S.W.2d 736, 739 (Tex.App.Austin 1994, writ denied); Texas Ass'n Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). Alternatively, the Appellants expressly asserted in their motion for summary judgment that she could not prove the elements of the Act. As will be shown below, the factual allegations in the second amended petition, were indeed deficient to establish each element of the Act.
[4] In 1993, article 5221k, § 1.01 et seq. of the Texas Revised Civil Statutes was recodified in § 21.001 et seq. of the Texas Labor Code. However, because the incidents here pertinent arose in 1991 and because the acts are for all practical purposes identical, we cite to the original statute rather than the Labor Code.
[5] The Appellees understood the likelihood that Vincent's suit could involve the individual defendants in both their official and personal capacities. Indeed, they specially excepted to the pleading defects regarding capacity and expressly asserted the affirmative defense of quasi-judicial/qualified immunity. The latter had no application save to defend against "personal" capacity liability. Under these circumstances, and given the liberality of current pleading requirements, the court may assume that Vincent sued the Employees in both capacities. See e.g. Kolar v. Sangamon, 756 F.2d 564, 568 (7th Cir.1985).
[6] The motion for summary judgment did not expressly address the two constitution arguments because neither were alleged at the time. It could be argued that this precludes any effort to consider them as encompassed by the summary judgment, which, in turn, would warrant remand of the two issues to the trial court for disposition. Yet, under Bouillion the trial judge would be compelled to deny the claims. Rather than prolong this inevitable result, we dispense with them on appeal and thereby avoid "judicial wheelspinning". | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1974462/ | 627 F. Supp. 523 (1986)
J.B. COURTNEY, II, et al.
v.
William L. BENEDETTO, et al.
Civ. A. No. 85-450-B.
United States District Court, M.D. Louisiana.
January 24, 1986.
*524 John N. Gallaspy, Gallaspy & Paduda, Bogalusa, La., John W. DeGravelles, Dué Dodson, de Gravelles, Robinson, & Caskey, Baton Rouge, La., for plaintiffs.
F.W. Middleton, Taylor, Porter Brooks & Phillips, Baton Rouge, La., Vickie Crochet, A.R. Christovich, Jr., Christovich & Kearney, New Orleans, La., for defendants.
POLOZOLA, District Judge.
On April 22, 1985, the plaintiffs filed this suit in the Twenty-First Judicial District for the Parish of St. Helena against William L. Benedetto, Clarence Bailey, Ed Cryer, Walter Jones, Richards Company and Gulf States Utilities Company ("GSU") to recover damages allegedly caused to their property by the construction of a high voltage electricity line. GSU, a Texas corporation, was served on April 26, 1985; Benedetto, Bailey and Jones, all Louisiana residents, were served on April 29, 1985; and Edward Cryer, a citizen of Texas, was served pursuant to the Louisiana "Long Arm" Statute, Louisiana Revised Statute 13:3204. The Richards Company was never served. On April 29, 1985, one week after the suit was originally filed, the plaintiffs filed a supplemental and amending petition naming CLECO, a Louisiana corporation, as an additional defendant. CLECO was served with this supplemental and amended petition on May 7, 1985; Benedetto, Bailey and Jones were served with the amended petition on May 8, 1985; and GSU was served with the amended complaint on May 14, 1985. The Richards Company was never served. On May 10, 1985, four days before GSU had been served with the supplemental and amending petition, but eleven days after it had been filed, GSU and Cryer filed a petition for removal, alleging in their petition that the defendants Benedetto, Bailey and Jones were nominal parties joined solely to defeat diversity. As stated previously, the Richards Company was never served with either the original or the supplemental and amending petition and, therefore, did not join the petition for removal. On July 3, 1985, GSU and Cryer filed a supplemental petition for removal alleging that CLECO was a nominal party joined solely to defeat diversity. The supplemental petition for removal also stated that the status of CLECO had not been addressed in the original petition for removal because GSU and Cryer had no notice at the time the original removal had been filed that CLECO had been added as a defendant.
On July 9, 1985, CLECO filed a motion for summary judgment on the ground that it has no connection with the activities of GSU with regard to the transmission lines at issue. On August 22, 1985, Benedetto, Bailey and Jones also moved for summary judgment contending that they are nominal parties who, as a matter of law, have no liability to the plaintiffs. The movers in both motions for summary judgment allege that they were named as defendants in the present suit solely for the purpose of defeating diversity.
Thereafter, the plaintiffs filed a motion to remand contending that this court lacks subject matter jurisdiction because complete diversity between all defendants and plaintiffs was not present. A motion to continue the hearings on defendants' motions for summary judgment until the court decided the motion to remand was also filed by the plaintiffs and denied by the court because the court concluded that it was necessary to consider the merits of these motions in ruling on the motion to remand. In opposition to the motions for summary judgment, the plaintiffs filed the affidavit of John W. Gravelles, attorney for the plaintiffs, stating that: (1) no discovery had been conducted in the case because the plaintiffs did not want to waive the right to file a motion to remand; and, (2) the plaintiffs needed additional time to pursue discovery regarding certain enumerated issues so that they could adequately oppose the motions for summary judgment. Subsequently, the plaintiffs filed a motion for a continuance of all three motions so that *525 discovery could be conducted, which was granted by the court. At the end of the discovery period, the plaintiffs filed a supplemental opposition to the motions for summary judgment stating that they had "reconsidered their position with regard to the taking of additional discovery" and requested that the court decide all three motions based upon the record now before the court.
The plaintiffs' motion to remand is based upon two grounds. First, the plaintiffs contend that complete diversity, as required by Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L. Ed. 435 (1806), is lacking. Since diversity jurisdiction is the only basis for subject matter jurisdiction asserted by the defendants, and it is obvious that complete diversity does not exist in this case, the defendants improperly removed this case to the federal court.[1] Defendants contended in their original and supplemental petitions of removal that Benedetto, Bailey, Jones and CLECO were fraudulently joined and, therefore, the citizenship of these parties should not be considered when diversity is determined. However, the plaintiffs contend that: (1) such allegations, with no factual basis set forth in the petition, is insufficient; and, (2) they have demonstrated that a valid cause of action exists against all non-diverse defendants.[2] The plaintiffs also contend that the procedure employed by GSU and Cryer to remove the present action was defective. More specifically, the plaintiffs allege that: (1) CLECO did not join the original petition for removal; (2) there was no allegation in such petition why CLECO had not joined the petition for removal; and (3) the amended or supplemental petition for removal which asserted that CLECO was a nominal party joined solely to defeat diversity was untimely filed because it was filed more than 30 days after any party had been served with the supplemental and amending state court petition naming CLECO as an additional defendant.[3]
Courts have consistently construed 28 U.S.C. § 1446(a)[4] to require that all defendants either join the petition for removal or to consent to such removal. See, e.g., Northern Illinois Gas Co. v. Airco Industrial Gases, 676 F.2d 270, 272 (7th Cir.1982); Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325 (5th Cir.1970); Lontheir v. Northwest Insurance Company, 599 F. Supp. 963 (W.D.La.1985); Mason v. International Business Machines & RTKL, 543 F. Supp. 444, 446 (M.D.N.C.1982) and Baldwin v. Perdue, Inc., 451 F. Supp. 373, 376 (E.D.Va. 1973). Furthermore, defendants mandated by 1446(a) to either join the petition for removal or to consent to such removal must do so within thirty (30) days of notice *526 or service of process.[5]Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325; Brooks v. Rosiere, 585 F. Supp. 351 (E.D.La.1984); Albonetti v. GAF CorporationChemical Group, 520 F. Supp. 825 (S.D.Tex.1981) and Intercoastal Refining Co., Inc. v. Jalil, 487 F. Supp. 606 (S.D.Tex.1980). The exceptions to the general rule that all defendants join or consent to the petition for removal exist when: (1) the non-joining defendant has not been served with service of process at the time the removal petition is filed;[6] (2) the non-joining defendant is merely a nominal or formal party;[7] and, (3) the removed claim is a separate and independent claim as defined by 28 U.S.C. § 1441(c).[8] See Mason v. International Business Machines & RTKL, 543 F.Supp. at 446, n. 1 and Albonetti v. GAF Corporation Chemical Group, 520 F.Supp. at 827. A necessary corollary to 1446(a) which requires the petition for removal contain "a short and plain statement of the facts which entitle him or them to removal" is that the removal petition must set forth the reason why a defendant named in such action has not joined the petition for removal. Lewis v. Rego Co., 757 F.2d 66 (3rd Cir.1985); P.P. Farmers' Elevator Co. v. Farmers Elevator Mutual Ins. Co. & New Amsterdam Casualty Co., 395 F.2d 546 (7th Cir.1968); Wright v. Missouri Pac. R. Co., 98 F.2d 34 (8th Cir.1938); Hardesty v. General Foods Corp., 608 F. Supp. 992 (N.D.Ill.1985); Lontheir v. Northwest Insurance Company, 599 F. Supp. 963 (W.D. La.1985); Romashko v. Avco Corp., 553 F. Supp. 391 (N.D.Ill.1983); and DiCesare-Engler Productions, Inc. v. Mainman, Ltd., 421 F. Supp. 116 (W.D.Pa.1976). A petition for removal filed by less than all defendants is considered defective if it does not contain an explanation for the non-joinder of those defendants. Id. In Romashko v. Avco Corp., 553 F. Supp. 391, 392 (N.D.Ill.1983), the court stated that "[i]t is the defendant's burden under the removal statute (28 U.S.C. § 1446(a)) to explain affirmatively the absence of co-defendants in the petition for removal, and failure to set out such explanation renders the removal petition defective."
In the present case, the original petition for removal contained explanations as to why the Richards Company, Benedetto, Bailey and Jones had not joined the petition for removal,[9] although it contained no explanation as to why CLECO had not joined.[10] Four days after the petition for removal was filed in this court, GSU was served with the supplemental and amending petition naming CLECO as an additional defendant in the state court action. The defendants, however, did not amend the original petition for removal to "affirmatively *527 explain the absence" of CLECO until it filed a supplemental petition for removal alleging that CLECO was a nominal party joined solely to defeat diversity on July 3, 1985, some 50 days after GSU had been served with the supplemental and amending state court petition, 54 days after the original petition for removal had been filed, 57 days after CLECO had been served, and 65 days after the supplemental and amending petition had been filed in state court.
Therefore, the question before the court is whether this supplemental petition for removal filed substantially after the thirty day limitation set forth by 28 U.S.C. § 1446(b) which sets forth the reason why CLECO had not joined in the original petition for removal can cure the defective original petition for removal. This court finds that the supplemental petition was not timely filed and, therefore, cannot cure the procedurally defective original petition.
A removal petition may be amended freely within the thirty day period set forth in 1446(b). Northern Illinois Gas Co. v. Airco Industrial Gases, 676 F.2d 270. However, after the thirty day period has lapsed, amendments to remedy "defective allegations of jurisdiction" are permitted pursuant to 28 U.S.C. § 1653.[11] This right to amend removal petitions pursuant to § 1653 after the thirty day period set forth in 28 U.S.C. § 1446(b) is considered limited and cannot be used to cure "a substantial defect in removal proceedings." Mason v. International Business Machines & RTKL, 543 F.Supp. at 446. The Mason court refused to allow an amendment, after the thirty day period had lapsed, to allege that a non-joining party consented to removal, stating that such "failure to join in or consent to removal [was] a substantial defect in the removal proceeding." Id. Furthermore, in Cook v. Robinson, 612 F. Supp. 187, 190 (D.C.Va.1985), the court refused to allow an amendment under § 1653 to allege that the original petition for removal was timely stating that "[d]efendants did not defectively allege the timeliness of their petition, but rather failed to make any allegation at all concerning the timeliness of the petition. Therefore, 28 U.S.C. § 1653 is inapplicable."[12]
In conclusion, this court finds that while the requirement for timely filing the petition for removal is not jurisdictional, it is mandatory. Mason v. International Business Machines & RTKL, 543 F.Supp. at 446. Furthermore, the untimely filing or amending of a petition for removal has been classified as a defect causing "improvident" removal within the purview of 28 U.S.C. § 1447(c) which provides, in pertinent part, that "[i]f at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs." Royal v. State Farm Fire & Casualty Co., 685 F.2d 124 (5th Cir.1982). Therefore, since the original petition was defective and failed to allege why CLECO had not joined the petition for removal, this defect could not be, and, consequently, was not cured by the untimely filing of the supplemental petition for removal on July 3, 1985. Thus, this case was improvidently removed and must be remanded to state court.
Since the court has based its decision to remand the present action to state court for the reasons set forth above, it is not necessary for the court to determine whether there was a fraudulent joinder of *528 parties. In addition, the court finds that since the case is to be remanded to state court, it would be more appropriate for the state court to decide the motions for summary judgment.
Therefore:
IT IS ORDERED that the motion of the plaintiffs, J.B. Courtney, II, Norman Durnin and T.E. Davis, Jr., to remand the present case to the Twenty-First Judicial District Court, Parish of St. Helena, State of Louisiana, be and it is hereby GRANTED.
Judgment shall be entered accordingly.
NOTES
[1] See 28 U.S.C. § 1441(a), which defines actions that are removable as follows:
Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
[2] In Bobby Jones Garden Apartments, Inc. v. Suleski, 391 F.2d 172, 177 (5th Cir.1968) the Fifth Circuit, in addressing the issue of fraudulent joinder, stated that a court must determine "whether there is arguably a reasonable basis for predicting that state law might impose liability on the facts involved." In Green v. Amerada Hess Corp., 707 F.2d 201, 205 reh. denied 714 F.2d 137 (5th Cir.1983) and cert. denied 464 U.S. 1039, 104 S. Ct. 701, 79 L. Ed. 2d 166 (1984) the Fifth Circuit reiterated that
[t]he burden of proving a fraudulent joinder is a heavy one. The removing party must prove that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court, or that there has been outright fraud in the plaintiff's pleadings of jurisdictional facts.
[3] See 28 U.S.C. § 1446(b).
[4] 28 U.S.C. § 1446(a) provides that:
A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a verified petition containing a short and plain statement of the facts which entitle him or them to removal together with a copy of all process, pleadings and orders served upon him or them in such action.
[5] 28 U.S.C. § 1446(b) provides, in pertinent part, that:
The petition for removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, which ever period is shorter.
[6] This is commonly referred to as the non-served defendant exception. Pullman Co. v. Jenkins, 305 U.S. 534, 540-41, 59 S. Ct. 347, 350, 83 L. Ed. 334 (1939); Albonetti v. GAF CorporationChemical Group, 520 F. Supp. 825 (S.D. Tex.1981).
[7] See Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325 (5th Cir.1970).
[8] 28 U.S.C. § 1441(c) provides that:
Whenever a separate and independent claim or clause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.
[9] The Richards Company did not join the removal because it had never been served. Benedetto, Bailey and Jones were not joined because they were nominal parties.
[10] The original petition for removal was filed eleven (11) days after the amending petition naming CLECO as an additional defendant was filed in state court and three (3) days after CLECO was served with such petition.
[11] 28 U.S.C. § 1653 provides that "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts."
[12] The defendants argue that the CLECO's motion for summary judgment on the basis that there is no viable claim against it in the present action should be considered as its consent to the removal. Therefore, it is asserted that the filing of this motion should cure any procedural defect in the removal petition caused by CLECO's failure to join in such. Without making any decision with regard to whether the filing of such motion for summary judgment would be sufficient to convey consent to removal, this court notes that such motion was filed on July 9, 1985, and, therefore, for the reasons just stated in the text, this "consent" is also untimely to cure the defect in the petition caused by CLECO's failur to join in such. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2425649/ | 620 S.W.2d 847 (1981)
John BASS, et al., Appellants,
v.
Susan DUFFEY, Appellee.
No. A2690.
Court of Civil Appeals of Texas, Houston (14th Dist.).
August 5, 1981.
Jacalyn D. Scott, Bonham, Carrington & Fox, T. Turner Pope, Kamp & Pope, Houston, for appellants.
Steve Bairstow, Houston, for appellee.
Before J. CURTISS BROWN, C. J., and PAUL PRESSLER and JUNELL, JJ.
JUNELL, Justice.
This is an appeal by writ of error from a default judgment rendered against the defendant/appellant after his answer was ordered stricken for failure to timely file answers to plaintiff's interrogatories. Appellant contends the court abused its discretion in striking his answer and rendering the interlocutory default judgment because answers to the interrogatories were on file at the time the court took such action. He also contends that the court erred in rendering the final default judgment by failing to notify appellant of the hearing on damages. We disagree with appellant's first contention, but we agree with the second one and reverse and remand for trial on the sole issue of damages.
*848 Appellee, Susan Duffey, filed suit against appellant, John Bass, d/b/a Park Avenue Careers (Bass), for unpaid commissions due Duffey for employment counseling and placement services. Bass's answers contained a general denial and allegations that Park Avenue Careers is a Texas corporation, not an assumed name under which John Bass was doing business, and that Bass was not personally liable. On September 26, 1979, plaintiff filed and properly served extensive interrogatories, the answers to which were due within thirty days. In addition to general background questions concerning Bass and Duffey's employment at Park Avenue Careers, the interrogatories included 11 questions, each with numerous subparts, regarding placement of specific job applicants and 69 questions relating to the corporate organization of Park Avenue Careers and Bass's involvement with the corporation and its financial dealings.
On January 11, 1980, Duffey filed a motion for sanctions for Bass's failure to timely file his answers to the interrogatories. On January 14, 1980, answers to the interrogatories were filed. It appeared that Bass had made a good faith attempt to answer most of the interrogatories. With respect to certain questions regarding specific job applicants Bass responded that those interrogatories would be fully answered pursuant to an audit of Duffey's account. Several others were answered in a somewhat less-than-complete fashion. On February 25, 1980, the court heard the motion for sanctions; and on March 17, 1980, the court signed an agreed order requiring additional answers to sixteen questions by March 26, 1980, and ordering Bass to pay $100.00 attorney's fees to Duffey's attorney. Bass did not file any additional answers by March 26, 1980. On April 7, 1980, plaintiff filed another motion for sanctions because of Bass's failure to comply with the order of March 17, 1980. In response Bass on May 22, 1980, filed a motion for continuance of the hearing on the motion for sanctions scheduled for May 26, 1980. In the motion for continuance Bass's attorney stated under oath that information sought in ten of the remaining interrogatories had to be obtained by defendant from third parties, that the third parties had failed to furnish such information, that repeated requests therefor had been made and defendant expected to get the information by June 5, 1980. The attorney further stated that Bass had been in Japan on a business trip since May 2, 1980, and would not return to the United States until about June 7, 1980, and that upon his return Bass would be advised of the information needed and would complete his answers to the interrogatories.
On May 27, 1980, the court heard the motion for sanctions and on June 13, 1980, signed another agreed order allowing Bass until June 16, 1980, to answer the remaining interrogatories and ordering another $100.00 paid in attorney's fees to Duffey's attorney. Again Bass filed no answers by the due date, June 16, 1980, and on June 19, 1980, the plaintiff filed a third motion for sanctions alleging that the required answers had not been filed. However, on the same date, June 19, 1980, Bass filed additional answers to the interrogatories. Nevertheless, the court heard the third motion for sanctions on August 4, 1980, and on August 8, 1980, signed an order striking Bass's pleadings. Also on August 8, 1980, the court rendered an interlocutory default judgment on liability against Bass. In the interlocutory judgment the court made the following order:
"It is further ordered that the trial of this cause be and the same is postponed, to set for hearing on writ of inquiry, at which time a final judgment shall be entered finalizing this interlocutory judgment as the defaulting defendant, John Bass."
A certificate of defendant's last known address was filed with the court at the time the court rendered the interlocutory judgment. This was in compliance with the requirements of Tex.R.Civ.P. 239a.
On August 14, 1980, without any notice to the defendant or his attorney, a hearing was had on damages and final default judgment was rendered for Duffey.
*849 Appellant contends in his first two points of error that the court abused its discretion in striking his answer and in rendering the interlocutory default judgment against him because the answers to the interrogatories were on file with the court on the date of the court's action.
The imposition of penalties or sanctions for failure or refusal of a party to comply with discovery rules being directed to the sound discretion of the trial court, such imposition can be set aside only upon a showing of clear abuse of discretion. Young Companies, Inc. v. Bayou Corp., 545 S.W.2d 901, 902 (Tex.Civ.App.-Beaumont 1977, no writ); Meyer v. Tunks, 360 S.W.2d 518 (Tex. 1962).
On the record before us we are unable to conclude that there was an abuse of discretion by the trial court. The defendant made no attempt to answer any of the interrogatories until 78 days after answers were due and until three days after the plaintiff filed her first motion for sanctions. Although defendant agreed to a court order requiring additional answers to the interrogatories by March 26, 1980, the defendant did nothing until after plaintiff's second motion for sanctions was filed. The trial court exhibited a great amount of patience with defendant by again granting defendant additional time to file the answers; and once again defendant failed to file additional answers by the due date. The answers as finally filed still left two interrogatories completely unanswered and three subparts of seven other interrogatories with answers which were totally unresponsive. Furthermore, not once did the defendant take action before the due date for filing answers to request additional time and undertake to show the court reasons why an extension should be granted. In each instance the defendant sat back and did nothing until the threat of a motion for sanctions hung over his head. On this record it is not surprising that the trial court finally imposed the sanctions of striking the defendant's answer and rendering an interlocutory default judgment on liability. It is not enough for the defendant to now say that the trial court abused it discretion merely because the answers were on file when the court acted to impose the sanctions. The Beaumont court of Civil Appeals in two cases, Young Companies, Inc. v. Bayou Corp., 545 S.W.2d 901, (Tex.Civ.App.-Beaumont 1977, no writ); and Illinois Emp. Ins. Co. of Wausau v. Lewis, 582 S.W.2d 242, (Tex.Civ.App.-Beaumont) writ ref'd n.r.e. per curiam, 590 S.W.2d 119 (Tex. 1979), has held that the granting of such sanctions was a clear abuse of discretion when the answers to the interrogatories were on file with the court at the time the sanctions were imposed and when the defendant had fully complied with the court's order as to discovery. In each of those cases, however, it appeared that the defendant had fully answered all of the interrogatories, which is not true in the instant case. Furthermore, all of the circumstances existing up to the imposition of sanctions must be examined in determining the abuse of discretion question, and the circumstances in the instant case were not similar to those in the two Beaumont cases.
The sanctions imposed were within the court's authority, and under the record before us we cannot say they were unreasonable or unjust. Southern Pac. Transp. Co. v. Evans, 590 S.W.2d 515 (Tex.Civ.App.-Houston [1st Dist.] 1979, writ ref'd n.r.e.).
In his third point of error appellant asserts that the trial court erred in rendering the final default judgment against him because the appellant was not given notice of the hearing on damages and thus was denied his right to a trial thereon. We agree for the reasons set forth below.
The court's imposition of the sanctions of striking the defendant's answer and rendering an interlocutory judgment on liability did not dispense with the necessity of evidence of plaintiff's unliquidated damages. Tex.R.Civ.P. 243; Illinois Emp. Ins. Co. of Wausau v. Lewis, supra; Rainwater v. Haddox, 544 S.W.2d 729 (Tex.Civ.App.-Amarillo 1976, no writ). Upon inquiry into the amount of unliquidated damages after a default judgment, the defendant has the right to be present, to interpose objections *850 to testimony offered by the plaintiff's witnesses and to cross-examine them in order that, by the exclusion of improper evidence, a proper judgment may be rendered on competent evidence. Illinois Emp. Ins. Co. of Wausau v. Lewis, supra; Rainwater v. Haddox, supra. He may in effect even defeat the action by showing that no damages were caused to the plaintiff by the matters alleged. Maywald Trailor Co. v. Perry, 238 S.W.2d 826, 827 (Tex.Civ.App.-Galveston 1951, writ ref'd n.r.e.).
Appellee argues that once appellant's pleadings were stricken, the only party present in the lawsuit was appellee and, hence, appellant was not entitled to notice of the trial on the issue of damages. We reject this argument. This case is unlike one in which a defendant has been served with citation and has wholly failed to make any appearance in the case. In that case no notice of the hearing on damages would be required. However, in the instant case the defendant had duly made his appearance in the case. "Appearance" ordinarily means the submission by a person against whom a suit has been commenced to the jurisdiction of the court. 3 Tex.Jur.3rd, Appearance, § 1 (1980). Having made his appearance defendant was still present in the law suit after the sanctions were imposed and, thus, was entitled, to notice of the trial on damages. Once the defendant's answer was stricken and the interlocutory default judgment on liability was rendered, the only thing remaining to be done before rendition of a final judgment was a final trial on the merits of the one remaining issue, damages. Under the Rules of the District Courts of Harris County Texas for the Trial of Civil Cases appellee was required to request a setting on the general docket and serve the appellant and/or his attorney with a copy of the setting request. Without the notice thus furnished to appellant, his right to be present and participate in the trial on damages would be an empty one, indeed. It matters not whether the appellant had requested a jury trial by a payment of a jury fee. Final trials on the merits in both jury and non-jury cases must be set in Harris County on the general docket pursuant to rules which require notice of such settings to all adverse parties. We reverse the judgment of the court below and remand the case to that court with instructions that a trial be held on the sole issue of damages after each party is given notice of such trial setting.
Reversed and remanded with instructions. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2435644/ | 359 S.W.2d 897 (1962)
V. L. WARE, Petitioner,
v.
J. S. PAXTON et al., Respondents.
No. A-8818.
Supreme Court of Texas.
July 11, 1962.
Rehearing Denied October 3, 1962.
George M. Elliott and Allen Melton, Dallas, for petitioner.
Fritz & Vinson, Dallas, for respondents.
GREENHILL, Justice.
This case has a long history. It has been twice tried to a jury. Ware, a lender of money, sued Paxton and his wife on a promissory note. The Paxtons brought a cross action in which they alleged that Ware had charged them usurious interest and that they had been damaged by the unreasonable collection efforts. Upon the first trial, the jury found that Ware had not used unreasonable collection methods. In the second trial, the jury found that unreasonable collection methods had been exercised by Ware. It awarded both actual and exemplary damages against Ware for that reason. As this second appeal reaches us, the main question is whether there is any evidence to support the jury finding awarding the Paxtons exemplary damages because of Ware's collection methods. The Court of Civil Appeals found that there was evidence to support the jury's finding. 352 S.W.2d 520. We granted the writ of error on this point.
*898 This suit was begun in 1951 when Ware sued the Paxtons upon a note for $3,048 and 10% interest thereon. The cross action of the Paxtons for usurious interest was based on Art. 5073, Vernon's Texas Civil Statutes, which provides for a double recovery of usurious interest paid. Based on fact findings that the Paxtons had paid $936.40 of usurious interest, and after allowing proper credits, judgment was entered for the Paxtons for $181.84. As stated above, the jury verdict was for Ware on the unreasonable collection methods issues. On the first appeal, the Eastland Court of Civil Appeals reversed and remanded the case for a further development of the amount of usurious interest actually paid by the Paxtons during the two-year period. 266 S.W.2d 218 (error refused, n.r.e., 1954).
The second trial of the case, likewise to a jury, resulted again in judgment for the Paxtons on the usury point. The trial court, after finding that the Paxtons paid $690 in usurious interest in the two-year period prior to the suit, entered a judgment for them of $861.66 double damages for usurious interest after offsets and credits. Based on other favorable special issue findings of unreasonable collection methods in attempts by Ware to collect the note of December 29, 1950, and of malice in connection with those attempts, the trial court awarded the Paxtons $15,000 actual damages and $10,000 exemplary damages. On the second appeal, the Dallas Court of Civil Appeals affirmed that judgment but required a remittitur of $5,000 on the exemplary damages for excessiveness, thus reducing the exemplary damages to $5,000. 352 S.W.2d 520.
The contentions of the parties and the rather involved facts of the financial transactions between them are set out at length in the Court of Civil Appeals opinion in the first appeal on pages 221-227 of 266 S.W.2d and in the Court of Civil Appeals opinion in the second appeal on pages 521-522 of 352 S.W.2d. They need not be repeated here except to state that the Paxtons received no cash from the $3,048 note of December 29, 1950. It was given instead to cover unpaid balances due on previous loans made by Ware to the Paxtons in a long series of notes and renewal notes dating from 1947 to 1950. The jury answered every special issue presented to them inquiring into the various service charges made on various loans from 1947 to 1950 that no services were performed in return for such charges. We have examined the record and have concluded that there is evidence to support these jury findings of usury and therefore affirm the judgments of the courts below in this respect.
There is no point of error in Ware's appellant's brief or in his motion for rehearing in the Court of Civil Appeals complaining that there is "no evidence" to support the jury findings of unreasonable collection efforts and the actual damages awarded therefor. That point is therefore not before us. Rule 418, Texas Rules of Civil Procedure.
Ware's point of error of "no evidence" to support the jury findings of malice and exemplary damages awarded as a result is before us. The evidence concerning the collection efforts of Ware is accurately presented in detail in the Court of Civil Appeals opinion, 352 S.W.2d 520, on pages 522-526, and we need not repeat all of it here. After a consideration of the facts in the record which are alleged to be some evidence of malice, we have concluded that there is no evidence to support the jury verdict in this regard.
The charge to the jury given by the trial court contained the following definitions of malice and exemplary damages:
"By the term `malice' as used in this charge is meant ill will or bad or evil motive or such gross indifference of the rights of another as will amount to a willful or wanton act done intentionally and without just cause or excuse.
"By the term `exemplary damages' as used in this charge is meant such damages *899 as may be allowed where acts complained of are wantonly and maliciously done with intent to injure the complaining party or with a reckless disregard of the injurious consequences of his acts to others. Such damages may include compensation for inconvenience, reasonable attorneys' fees, and other losses too remote to be considered under actual damages." [Tr. 67]
In Jones v. Ross, 141 Tex. 415, 173 S.W.2d 1022 (1943), we quoted with approval the following discussion of exemplary damages from 25 C.J.S. Damages § 123, p. 726 and we repeat it here as a guidepost to our consideration of the evidence in this case:
"The fact that an act is unlawful is not of itself ground for an award of exemplary or punitive damages. The act complained of not only must be unlawful but also must partake of a wanton and malicious nature, or, as sometimes stated, somewhat of a criminal or wanton nature, and an act will not be deemed malicious, and so warranting punitive damages, merely because it is unlawful or wrongful." [173 S.W.2d 1022, 1024]
Definitions of malice and the grounds for exemplary damages are necessarily general and do not provide precise limits for the decision of cases. Where the collection methods of a lender cease merely being unreasonable and take on the character of malicious and wanton conduct is a matter of degree. To determine whether Ware's actions are of such a nature that it can properly be said that they evidence maliciousness and wantonness, we must compare the facts of this case with others where the conduct of the lender was extreme enough to be considered malicious, wanton, and indicating a reckless disregard for the injurious consequences of his acts to others.
In Duty v. General Finance Company, 154 Tex. 16, 273 S.W.2d 64 (1954), the lender carried on a campaign of continuous harassment against the borrowers from the first time the borrowers missed a payment on any of their loans. This campaign consisted of the following extreme methods:
"* * * Daily telephone calls to both Mr. and Mrs. Duty, which extended to great length; threatening to blacklist them with the Merchants' Retail Credit Association; accusing them of being deadbeats; talking to them in a harsh, insinuating, loud voice; stating to their neighbors and employers that they were deadbeats; asking Mrs. Duty what she was doing with her money; accusing her of spending money in other ways than in payments on the loan transaction; threatening to cause both plaintiffs to lose their jobs unless they made the payments demanded; calling each of the plaintiffs at the respective places of their employment several times daily; threatening to garnishee their wages; berating plaintiffs to their fellow employees; requesting their employers to require them to pay; calling on them at their work; flooding them with a barrage of demand letters, dun cards, special delivery letters, and telegrams both at their homes and their places of work; sending them cards bearing this opening statement: `Dear Customer: We made you a loan because we thought that you were honest.'; sending telegrams and special delivery letters to them at approximately midnight, causing them to be awakened from their sleep; calling a neighbor in the disguise of a sick brother of one of the plaintiffs, and on another occasion as a stepson; calling Mr. Duty's mother at her place of employment in Wichita Falls long distance, collect; leaving red cards in their door, with insulting notes on the back and thinly-veiled threats; calling Mr. Duty's brother long distance, collect, *900 in Albuquerque, New Mexico, at his residence at a cost to him in excess of $11, and haranguing him about the alleged balance owed by plaintiffs." [273 S.W.2d 64, 65]
While classifying the lender's conduct as "outrageous," this Court went on to say:
"* * * we do not hold that by reasonable efforts to collect usury a creditor runs the risk of liability for damages. A decision of the case before us does not require that we undertake to outline the limits to which such a creditor may go, but we do hold that resort to every cruel device which his cunning can invent in order to enforce collection when that course of conduct has the intended effect of causing great mental anguish to the debtor, resulting in physical injury and causing his loss of employment, renders the creditor liable to respond in damages." [273 S.W.2d 64, 66]
The borrowers apparently sought only actual damages in the Duty case, but it has application to our case because it was considered necessary that the lender carry on a campaign of harassment in order to entitle the borrowers to actual damages, much less exemplary damages.
In Industrial Finance Service Co. v. Riley, Tex.Civ.App., 295 S.W.2d 498 (1956), affirmed 157 Tex. 306, 302 S.W.2d 652 (1957), where the facts were held to support an award of both actual and exemplary damages, the conduct complained of was similar to that of the lender in the Duty case:
"Upon failure of appellees to keep up their payments, appellants began a bombardment of collection letters, telegrams, and telephone calls, in daytime and nighttime, at appellees' home and at their places of employment. In addition the company's collectors called in person at appellees' home and places of business. There is testimony that the methods employed by appellants were `nasty, harsh and loud,' and sometimes contained implied threats. The evidence in our opinion amply supports the jury finding that appellants' collection efforts were unreasonable and were made with malice and with reckless disregard of appellees' health and welfare." [295 S.W.2d 500, 502]
Likewise, in Wright v. E-Z Finance Co., Tex.Civ.App., 267 S.W.2d 602 (error refused, n. r. e., 1954), actual and exemplary damages were upheld where the conduct of the lender was of a similar nature:
"The record here most favorable to the judgment rendered by the trial court is: (1) The pleading alleged a conspiracy by all appellees to wrongfully harass him; in connection with the common ownership of groups of the companies or loan offices, or signle individuals appellees by contemporaneous and malicious collection methods by six of the seven loan companies resulting collectively in severe mental and physical damage; that appellant was called and harassed daily by one loan office after another in an almost identical manner; each reported to the Retail Merchants Credit Association claiming a debt but not describing the debt to be in part usurious interest; from all of which appellant and wife suffered both mental and resultant personal harm." [267 S.W.2d 602, 607]
The facts of the case at bar do not show a campaign of harassment and intimidation of the sort held to support exemplary damages in the foregoing cases. In the two-year period 1949-1951, the Paxtons testified that they received several telephone calls from Ware. Mr. Paxton could only remember the substance of one of these calls: a call on December 5, 1950. He testified that on that occasion Ware told him he was behind on his payments and that he might have to send the sheriff out to pick up everything he had. The evidence indicates that Mr. Paxton may have suffered a heart attack immediately following this *901 call; that he was in general bad health in the years following the call; and that, following this call, he was unable to do the work which he had previously done. However, there is no evidence that Ware used abusive or insulting language or anything of that nature in the conversation of December 5, 1950, nor is there any evidence that Ware knew that a telephone call reminding Mr. Paxton that he was behind on his payments and threatening to send the sheriff out would have such injurious consequences on Paxton's health, if in fact it were the cause of that condition.
Mrs. Paxton testified that during the same two-year period, 1949 to 1951, she received several telephone calls from Ware but she could not remember how many. She likewise could recall the substance of only one of these calls. Mrs. Paxton stated that on that occasion Ware asked where her husband was, what he was doing, and how he could reach him, and that the effect of this was to make her "real nervous." She admitted that Ware did not use abusive, vulgar, or indecent language in any conversation with her, nor did he threaten any violence. The most critical comment she made as to Ware's language or tone of voice during all of the calls made to her was that it was "sarcastic." The evidence shows that Mrs. Paxton was in a bad state of health prior to Ware's telephone calls, but she stated that all of her old symptoms of head and back aches and a nervous condition returned following these calls. There was testimony by her doctor that "half a dozen calls by a bill collector might very well cause a nervous breakdown" and that her nervous tension might well have been increased thereby. But Mrs. Paxton admitted that she had not informed Ware of her condition and that there was no way he could have known she was "nervous."
Mrs. Paxton further testified that, although her old symptoms had returned following Ware's 1949-1951 telephone calls to her, she had almost recovered when Ware visited her at her home in January, 1956. Mrs. Paxton said she thought "this thing was over with and he said it wasn't over with and would not be until he got $3,000 out of it." She stated that Ware stated that he wanted to see Mr. Paxton and that he could put him in jail but he didn't want to do that. She said Ware also suggested that the Paxtons come see his lawyer; and when she told him they had a lawyer of their own, he said their lawyer wasn't going to represent them anymore. She admitted that Ware did not use abusive language or threaten any violence during this visit. She testified that following this visit all of her old symptoms returned and that she developed additional health complications. This is the only personal visit by Ware to the Paxtons' home shown by the record.
In addition to the phone calls and the one personal visit, Mrs. Paxton testified that Ware had sent "numerous letters" since 1949. Mrs. Paxton could not recall the contents of any of the letters, and she stated that the number received from Ware was "probably" four a month.
Counsel for the Paxtons argues that the Paxtons were poor and uneducated people and that they were therefore more susceptible to the collection methods employed by Ware. Although any collection efforts of a lender would undoubtedly upset most borrowers behind on their debt payments, his position is that Ware's collection efforts toward the Paxtons indicated malice and wantonness in view of their greater susceptibility. However, even taking into account their greater susceptibility, the record here does not reflect that Ware acted with a reckless disregard of the injurious consequences of his acts toward the Paxtons. There is no evidence that Ware carried on a campaign similar to any of the cases previously cited. There is no evidence of telephone calls at all hours of the day and night or the use of abusive language. The record does not show that Ware informed the Paxtons' neighbors, friends, employers, or other creditors that they were behind on their payments or that he even contacted them. There was no attempt to blacklist *902 the Paxtons with other creditors. There is no evidence of a constant barrage of threatening or insulting letters and telephone calls calculated to harass the Paxtons into paying their debts.
We conclude therefore that there is no evidence to support the jury findings of malice and the trial court's award of exemplary damages.
The judgment of the trial court is therefore affirmed as to the award of $861.66 damages for usury and $15,000 actual damages, but reversed and rendered for petitioner Ware as to the award of $5,000 exemplary damages. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3097468/ | Martha
Fourth Court of Appeals
San Antonio, Texas
July 14, 2014
No. 04-13-00792-CV
Richard LARES,
Appellant
v.
Martha FLORES,
Appellee
From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CI-15663
Honorable Solomon Casseb, III, Judge Presiding
ORDER
The motion to substitute counsel is granted. The motion for extension of time to file
appellee’s brief is granted. We order appellee’s brief due July 28, 2014.
_________________________________
Luz Elena D. Chapa, Justice
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said
court on this 14th day of July, 2014.
___________________________________
Keith E. Hottle
Clerk of Court | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/3097473/ | NO. 07-12-0251-CR
NO. 07-12-0252-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
SEPTEMBER 19, 2012
______________________________
THE STATE OF TEXAS,
Appellant
v.
DISHON ALFRED RALEIGH,
Appellee
_______________________________
FROM THE 47TH DISTRICT COURT OF POTTER COUNTY;
NOS. 62,426-A and 62,427-A; HONORABLE DAN A. SCHAAP, JUDGE
_______________________________
On Motion to Dismiss
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
Appellant, The State of Texas, by and through its attorney, has filed a motion to dismiss
these appeals because there no longer exist sufficient grounds to pursue a successful appeal
in each case. Without passing on the merits of the case, we grant the motions to dismiss
pursuant to Texas Rule of Appellate Procedure 42.2(a) and dismiss the appeals. Having
dismissed the appeals at appellant=s request, no motion for rehearing will be entertained, and our
mandates will issue forthwith.
Do not publish. Per Curiam | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1767301/ | 883 F. Supp. 632 (1995)
Ronald E. BROOKS, Plaintiff,
v.
PROTECTIVE LIFE INSURANCE COMPANY; Alabama Power Company, Defendants.
Civ. A. No. 92-D-1577-E.
United States District Court, M.D. Alabama, Eastern Division.
March 21, 1995.
*633 Lister Hill Proctor, Sylacauga, AL, for plaintiff.
Leslie McCafferty Allen, David R. Boyd, Montgomery, AL, John Richard Carrigan, Birmingham, AL, for defendants.
MEMORANDUM OPINION
DE MENT, District Judge.
Plaintiff, Ronald E. Brooks (hereinafter "Brooks"), brings this action against his former employer, Alabama Power Company (hereinafter "APCo") and Protective Life Insurance Company (hereinafter "Protective"), the claims administrator of APCo's long-term disability plan (hereinafter the "Plan"), to reinstate Plaintiffs benefits under the Plan. The Plan is governed by the Employee Retirement Income Security Act (hereinafter "ERISA"), 29 U.S.C. § 1001 et seq. Brooks alleges that his long-term benefits were wrongfully terminated by APCo and Protective, both of whom are express fiduciaries under the Plan. Plaintiff asserts that the benefits should be reinstated, and judgment entered for the arrearage, attorney's fees and costs.
This case was submitted to the court on the parties' pleadings. Plaintiff filed a brief and evidence in support of his claim on November 15, 1994. On December 5, 1994, Defendants filed a brief and supporting evidence in opposition thereto.
JURISDICTION
Jurisdiction is proper under 28 U.S.C. § 1331 because Plaintiff alleges a violation of 29 U.S.C. § 1001, et seq., ERISA. Personal jurisdiction and venue are not contested.
FINDINGS OF FACT
Brooks worked for Defendant, APCo, from 1961 until 1983. During the course of his twenty-two year tenure with APCo, Brooks performed various jobs including meter reading in Pell City and Talladega, Alabama. As an APCo employee, Brooks chose to participate in APCo's 1981 Long Term Disability Plan (the "Plan").
In 1983, Brooks suffered a nonwork-related injury. Subsequently, Brooks filed a total disability claim and was deemed totally disabled. Consistent with the Plan's terms, Protective awarded Brooks total disability benefits in the amount of four hundred sixty-eight and 14/100 dollars ($468.14) commencing March 15, 1984, for a period of thirty *634 months.[1] Protective relied upon medical records produced by Plaintiff's treating physician, Dr. David Hensleigh to make its determination that Brooks could not perform his assigned lineman duties.[2] Dr. Walter C. Woodall (hereinafter "Dr. Woodall") performed a lumbar disc laminectomy on Brooks in March, 1983, and was Brooks' attending physician at all relevant times.
Brooks' initial thirty months of benefits expired September 15, 1985. Protective determined that Brooks qualified for total disability for all jobs for which Plaintiff was "reasonably fitted by education, training or experience." Plaintiff contends, and Defendants do not rebut, that Protective continued to award Brooks disability benefits based on the medical reports and advice of Dr. Woodall.
Patrick J. West (hereinafter "West"), assistant manager of medical and disability claims for Defendant Protective, became involved with claims administration following revision of the Plan.[3] Protective, with the advice and assistance of West and other claims adjusters, determined whether a claimant was disabled and, thus, entitled to receive long-term disability benefits under the Plan.[4] From 1987 to January, 1991, West reviewed Plaintiff's claim file and approved monthly benefits for Brooks based solely on two (2) physician statements from Dr. Woodall.[5]
APCo revised its long-term disability plan in 1987, and the amended version became effective January, 1990. The revised plan granted Protective the authority to terminate a participant's benefits if such participant refused to cooperate with Protective in job placement and vocational rehabilitation.[6] At about this time, APCo allegedly advised Protective to review all long-term disability claim files to determine if APCo could reinstate able workers. According to West, he could not remember APCo requesting that he review all the long-term disability claim files, prior to January, 1991.[7] West also stated that APCo's desire to remove persons from the list of persons eligible for long-term disability benefits was the impetus behind APCo amending the Plan.[8] West also remarked that he took APCo's position into consideration when determining Brooks' continued eligibility under the Plan.
Helen Spollen (hereinafter "Spollen"), coordinator of disability management services for APCo, stated that Brooks' claim for benefits would be controlled by the Plan, not by the revised plan of 1990. Plaintiff, therefore, contends that neither APCo nor Protective could use the new provision on rehabilitation to take action against a long-term disability *635 recipient, such as Brooks, if he refused vocational training/rehabilitation services. On January 24, 1991, Mrs. Debra Waldrep (hereinafter "Waldrep"), a Protective claims examiner, solicited Dr. Woodall for Plaintiff's medical records covering 1989 through January, 1991.[9] A copy of Waldrep's letter was delivered to APCo, as well. Dr. Woodall examined Brooks on February 27, 1991, and noted that there was no change in Brooks' status and that Brooks could not tolerate standing for more than 20-30 consecutive minutes. Dr. Woodall also stated that he saw no reason to change Brooks' status at that time. Subsequently, Protective, by Waldrep, requested more specific information regarding Brooks' disability and Dr. Woodall responded to the inquiry on March 15, 1991.[10] Based on these assessments, West acknowledged that Brooks met the definition of total disability under the Plan.[11] However, on April 10, 1991, West requested that Brooks undergo a medical examination by an independent physician to determine Brooks' physical limitations and tolerances.
Protective arranged for Crawford and Company (hereinafter "C & C") to arrange the independent medical examination. C & C in turn procured the services of Dr. Patrick Ryan (hereinafter "Dr. Ryan") to perform the examination. Dr. Ryan met with Brooks on June 12, 1991. Brooks asserts that the documents sent to Dr. Ryan did not include a definition of total disability under the Plan. Plaintiff contends that the records only consisted of Dr. Woodall's medical notes dated February 27, 1991, November 7, 1989, and a radiologist's report dated November 15, 1989.[12]
Dr. Ryan's examination lasted approximately fifteen minutes and entailed bending at the waist and tapping on Brooks' heel, knee and ankle. Dr. Ryan did not have Dr. Hensleigh's medical records, or Brooks' Social Security disability records, nor a complete set of medical notes. Plaintiff also mentions that Dr. Ryan did not have any of the physician supplemental medical statements from Dr. Woodall, nor did he possess Dr. Woodall's report of March 15, 1991, which showed Brooks to be totally disabled under the Plan.[13] Dr. Ryan did not espouse any recommendations concerning activity restrictions for Brooks neither did he perform a functional capacity evaluation (hereinafter "FCE"). However, Dr. Ryan's examination did reveal that Plaintiff suffered from lumbar radiculitis with lumbar nerve root involvement, atrophy of the left leg, loss of sensation in the left leg, diminished reflexes and progressive pain which intensifies with prolonged activity.
In his report to Protective, Dr. Ryan stated that he thought Brooks could only perform sedentary tasks, such as working at a desk.[14] Dr. Ryan also noted that Brooks could not perform the task of meter reader and recommended a work hardening program and vocational rehabilitation for Brooks before placing him in any job.[15] After receiving Dr. Ryan's report, C & C wrote Protective on June 25, 1991, and recommended that Protective look into a position for Brooks at APCo. The letter also recommended that a job analysis be presented to Brooks' physician for his approval. West states that he never pursued this course of action. C & C also told West that a work hardening program might be needed, as Brooks had not worked since 1983. According to West, no one pursued this course of action either.
Brooks asserts that on July 1, 1991, West wrote Bill Warren at APCo and stated that, based upon Dr. Ryan's evaluation, it appeared *636 that Brooks may be able to return to work. West also requested a job search. In this letter, West noted that Brooks could possibly return to work after a vocational assessment. Brooks contends that on July 1, 1991, West possessed a copy of Dr. Woodall's statement declaring Brooks disabled for all occupations.
Plaintiff also avers that as of July 1, 1991, West did not have an FCE, a vocational evaluation, or a job description. Plaintiff contends that West's opinion as of July 1, 1991, was that Brooks could read meters. Waldrep and West then wrote Brooks on July 9, 1991, and July 11, 1991, respectively, stating that Protective and APCo would assess his physical capabilities, in order to determine whether he (Brooks) could return to work.[16]
Brooks underwent an FCE on July 23, 1991. Plaintiff claims that this was conducted without benefit of specific job descriptions. The examiner recommended a work hardening program with a specific job to which Brooks would return. Although the evaluator could not assess Brooks' work restrictions, so Plaintiff contends, the evaluator affirmatively expressed that Brooks should avoid prolonged activity that aggravated his back and leg pain, including squatting, bending, sitting and standing.
In October, 1991, Betty Logan of C & C administered Brooks' vocational evaluation and reported the following to Protective:
It is felt that since this man has been out of work for over eight years, that he may need some type of reconditioning prior to him [sic] returning back into the work force. This reconditioning could come in the form of some type of work hardening should he move in that direction ... it would be difficult to push him back into the job market at this time and ask him to participate successfully in a job without conditioning.
In November, 1991, Dr. Woodall reported to Protective that Brooks was totally disabled as a lineman, but he could attempt full-time employment only after Brooks underwent a vocational training regime.
Protective did not contact Brooks again until June 30, 1992. Via a letter from Waldrep, Protective stated that it heard that Brooks was returning to work with APCo as meter reader on July 13, 1992, and that Protective was terminating his long-term disability benefits on July 12, 1992. According to West, the decision to discontinue Brooks' long-term disability benefits was based upon the information in Brooks' claim file, which consisted of medical records, the FCE, and the vocational evaluation. West possessed no job description, job assessment, or evaluation of physical limitations which correlated with the relevant job requirements. Brooks did not undergo the recommended work hardening. West stated that his July 30, 1992, decision was also based on his interpretation of the Plan and that he did not have conclusive proof that Brooks was totally disabled for all occupations as defined under the Plan.
APCo terminated Brooks' employment on July 18, 1992, after Brooks refused to take a job as a meter reader. Protective discontinued Brooks' monthly benefit check of $468.14 as of July 19, 1992. Subsequently, Brooks brought the above-styled action alleging that Protective, as claims administrator, violated ERISA. Plaintiff contends that Protective acted arbitrarily and capriciously in discontinuing his benefits.
According to § 5 of the Plan, the participant must provide Protective with proof of continued total disability in order to remain *637 eligible for benefits under the Plan. Section 5.03 reads:
Proof of continued total disability must be furnished to the Claims Administrator at least every six months after furnishing of the initial proof of Total Disability or more frequently if determined by the Claims Administrator to be necessary to establish continued Total Disability. Such proof must include a report in writing from the Participant's attending physician or surgeon fully stating the condition of the Participant and the possible duration of his disability.
All parties agree that the employee benefit plan at issue is governed by the constructs of ERISA, 29 U.S.C.A. § 1001 et seq.
"[e]xcept as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they.... relate to any employee benefit plan described in.... this title and not exempt under.... this title."
29 U.S.C.A. § 1144. Therefore, any and all contrary state substantive law and standards are inapplicable because the United States Supreme Court has held that ERISA preempts state law as to claims made under plans such as the one at issue. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S. Ct. 1549, 95 L. Ed. 2d 39 (1987).
SCOPE OF REVIEW
When a beneficiary is denied benefits and he or she challenges that decision under 29 U.S.C. § 1132(a)(1)(B),[17] that decision is to be reviewed under a de novo standard unless the benefits plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989); Kirwan v. Marriott Corporation, 10 F.3d 784, 788 (11th Cir.1994).[18] In Bruch, the United States Supreme Court subjected Firestone's denial of benefits to de novo review because the Court found ".... no evidence that under Firestone's ... plan the administrator has the power to construe the uncertain terms or that eligibility determinations should be given deference." Bruch, 489 U.S. at 115, 109 S.Ct. at 957. If an employee benefit plan confers discretionary authority upon a fiduciary to make eligibility determinations, said fiduciary's decisions will be reviewed under the arbitrary and capricious standard. Lee v. Blue Cross/Blue Shield of Alabama, 10 F.3d 1547, 1549-50 (11th Cir. 1994) [citations omitted].
APCo's coordinator of employee benefits services, Helen Spollen, affirmed that Brooks' eligibility would be determined or assessed according to the 1981 Plan. According to this plan, Protective, as claims administrator, possessed specific authority to determine whether Brooks' disability qualified for long-term benefits. Pursuant to the 1981 Plan,
[t]he claims administrator shall be responsible for determining eligibility for benefits under the plan and payment of such benefits.
Art. 6.02(c), 1981 Plan.[19] Clearly, the Plan vested the authority to determine eligibility *638 for long term disability benefits in the claims administrator, Protective. Therefore, the court must determine whether Protective's decision was arbitrary and capricious.
Under this standard, the scope of the court's review is narrow and the court is not to substitute its judgment for that of Protective. See Motor Vehicle Mfrs. Ass'n v. State Farm Mutual, 463 U.S. 29, 43, 103 S. Ct. 2856, 2866, 77 L. Ed. 2d 443 (1983). To survive scrutiny under the arbitrary and capricious standard, Protective must articulate a satisfactory explanation for action including a rational connection between the evidence before it and its decision. See Motor Vehicle Mfrs., 463 U.S. at 43, 103 S.Ct. at 2866 (quoting Burlington Truck Lines, Inc., v. United States, 371 U.S. 156, 168, 83 S. Ct. 239, 245-46, 9 L. Ed. 2d 207 (1962)).
DISCUSSION
In applying the arbitrary and capricious standard, the court is required "to look only to the facts known to the administrator at the time the decision was made" to discontinue Brooks' long-term disability benefits. Lee, 10 F.3d at 1550 (citing Jett v. Blue Cross & Blue Shield of Alabama, Inc., 890 F.2d 1137, 1139 (11th Cir.1989)). The court must determine whether a reasonable basis existed for the decision, based on the facts as known to Protective at the time it made the determination. Jett, 890 F.2d at 1139, see also Brown v. Retirement Committee of Briggs & Stratton Retirement Plan, 797 F.2d 521, 532 (7th Cir.1986), cert. denied, 479 U.S. 1094, 107 S. Ct. 1311, 94 L. Ed. 2d 165 (1987); Denton v. First National Bank of Waco, Texas, 765 F.2d 1295, 1304 (5th Cir.1985); Berry v. Ciba-Geigy Corp., 761 F.2d 1003, 1007 (4th Cir.1985).
Plaintiff contends that the report (from Dr. Ryan) upon which West relied pales in comparison to the eight years of records produced and examinations administered by Dr. Woodall. Plaintiff avers that Protective has no reasonable basis or rational explanation for no longer relying on the reports and recommendations of Dr. Woodall. Apparently, Plaintiff believes that West's response to APCo's desire for Protective to review the files of employees receiving long-term disability benefits with the express purpose of returning such persons back to work evinces an abuse of discretion.
The Eleventh Circuit has rejected the argument that a treating physician's opinion should be accorded substantial weight by a plan fiduciary in determining eligibility for employer-provided benefits. In Jett, the Eleventh Circuit found that the decision by a claims administrator not to contact an employee's treating physician before denying benefits cannot be said to constitute abuse of discretion. Jett, 890 F.2d at 1139-40. The court reasoned that a treating physician's economic interest in an ERISA-governed employee health plan offsets the weight given to opinions of treating physicians in the context of social security. See id.
Plaintiff places extreme emphasis on the knowledge West possessed on July 1, 1991; however, no decisions were made to resume Brooks' employment, in any capacity, until after the FCE and vocational rehabilitation program had been performed. This was the advice given by Brooks' treating physician, Dr. Woodall. However, Plaintiff alternatively contends that there is no evidence that Protective or APCo relied upon the information contained in the FCE or vocational evaluation in determining whether to reactivate Brooks.
Plaintiff also attacks West's "educational deficiency." Brooks points out that West's educational background in business is not suited for determining the eligibility of persons for long-term disability benefits, which is steeped in medical familiarity. Moreover, Protective did not provide any special training for West in assessing and evaluating the physical fitness of claimants generally, and *639 Brooks specifically. Essentially, Plaintiff contends that the decision to discontinue Brooks' long-term disability benefits was APCo's decision and not that of Protective.
As previously noted, Plaintiff relies heavily on the fact that Protective abruptly ceased to accord Dr. Woodall's prognosis full faith, and, instead depended whole-heartedly on Dr. Ryan's results, which were the product of an alleged cursory examination. Plaintiff urges the court to conclude that Protective should not have considered APCo's desire to place able-bodied persons back into the workplace.
However, Protective, as claims administrator, only determines whether an employee is totally disabled for all occupations, given a claimant's education, experience and training. If its conclusion is negative, Protective is obliged to discontinue the benefits or not grant them in the first instance, depending on the phase of inquiry. Protective's function is not to determine the most suitable job for Brooks, but, rather, to determine whether Brooks was totally disabled.
The court's ultimate determination is whether Protective, at the time it determined that Brooks no longer qualified for long-term disability benefits, acted in an arbitrary and capricious fashion. This touchstone determination hinges on whether a reasonable basis existed for Protective's decision to discontinue Brooks' benefits. The United States Supreme Court has stated that:
a decision is arbitrary and capricious if the decision maker "entirely failed to consider an important aspect of the problem [or] offered an explanation for its decision that runs counter to the evidence...."
Motor Vehicle Manufacturers Ass'n. v. State Farm Mutual, 463 U.S. 29, 43, 103 S. Ct. 2856, 2866, 77 L. Ed. 2d 443 (1983).
In Duhon v. Texaco, Inc., 15 F.3d 1302 (5th Cir.1994), the plaintiff challenged the fiduciary's conduct in discontinuing his long-term disability benefits. There, the United States Fifth Circuit Court of Appeals held that the fiduciary's conduct was not arbitrary and capricious. The court finds that Duhon presents a strikingly similar factual scenario as the case at bar.[20]
In Duhon, the plaintiff was approved for initial disability benefits through the first twenty-four months following the plaintiff's injury. After the preliminary twenty-four month period, three doctors examined the plaintiff to determine whether the claimant qualified for continued benefits. Two of the three examining physicians concluded that the plaintiff was physically unable to resume his regular occupation as a truck driver and that the plaintiff's condition was permanent. Dr. Thomas Ford determined that Duhon suffered from degenerative lumbar disc disease which severely limited his physical capacity. According to Dr. Thomas' results, Duhon could not squat, stoop, bend, or lift more than twenty-five pounds. Dr. Thomas concluded that although the plaintiff could not return to truck driving, he was capable of doing sedentary to light work. The court also notes that Dr. Thomas intervened at the defendant Texaco's request which is the situation regarding APCo and Dr. Ryan in the instant action. Duhon, 15 F.3d at 1304. Subsequently, the plan administrator and the defendant's chief medical officer reviewed the relevant documents and determined that Duhon did not qualify for continuing long term benefits beyond the initial twenty-four month period. Id. Subsequently, Duhon appealed to the plan administrator, but the appeal was unsuccessful.
The Fifth Circuit rejected Duhon's argument that additional information was needed to determine his eligibility. Specifically, Duhon argued that merely because a medical doctor had resolved that sedentary to light work was within physical tolerance did not necessarily mean that he was "qualified by training, education or experience" to perform *640 any job.[21]Duhon, 15 F.3d at 1305. The court found that because the plan administrator possessed sufficient medical evidence to support the view that Duhon could perform "sedentary to light work," the fiduciary had not abused its discretion.
The Duhon court also rejected the plaintiff's argument that the evidence of disability was insufficient because the testimony of a vocational rehabilitation expert was essential in determining whether he was capable of performing, given his training, education and experience. Duhon, 15 F.3d at 1308. The court chose not to focus on whether the evidence before the plan administrator was sufficiently weighty, but, rather, whether the plan administrator abuse its discretion in determining, without expert testimony, that the plaintiff qualified as permanently disabled.
In the case at bar, Brooks places far too much emphasis on the immaterial issue of whether the occupation APCo asked Brooks to perform accommodates his "disability." Clearly, Plaintiff has confused the issues. The issue is not whether Brooks could perform the job of reading meters, but, rather, whether Protective, based on the information presented to it, acted arbitrarily and capriciously in discontinuing Brooks' long-term benefits. Protective, as claims administrator, was not under any legal duty to concern itself with the occupational position for which Brooks was best-suited. Protective's sole function was to determine eligibility.
Dr. Ryan concluded that Brooks could perform a light duty job. The court finds that at that point Protective could have lawfully removed Brooks from the APCo long term benefit list. Of course, Brooks had recourse to appeal following APCo's determination as to which occupation it would assign Plaintiff.
The court also finds that the results of the FCE and the vocational training program substantiates Protective's decision to terminate Brooks' long-term disability benefits. Plaintiff complains that the persons/entities performing these examinations possessed insufficient knowledge about Brooks to render a competent and intelligent determination regarding Brooks' physical capacity. Even assuming this is true, the issue remains: "Whether Protective possessed sufficient knowledge to justify discontinuing Brooks' long-term disability benefits (i.e, whether Protective acted arbitrarily and capriciously in discontinuing Brooks' benefits under the Plan)." Plaintiff has not proven that Protective actually knew and, ultimately, failed to consider the ignorance of the persons and/or entities administering the FCE and the vocational training program.
Moreover, Protective had been informed that Brooks would be returning to work. Certainly, if Protective reasonably believed that Brooks had agreed to return to work, he would hardly qualify as being totally disabled for all occupations for which he was qualified. The court also notes that Plaintiff's argument that APCo overreached and improvidently assumed Protective's Plan-granted authority is likewise without merit. Plaintiff does not demonstrate to the court's satisfaction that APCo, and not Protective, made the final determination to discontinue Plaintiff's long term disability benefits.
CONCLUSION
The court finds that, in light of the evidence before it at the time it decided to discontinue Brooks' long-term disability benefits, Protective's decision cannot be characterized as arbitrary and capricious. Furthermore, the Court is not authorized to supplant the reasonable judgment of Protective Life Insurance Company, the claims administrator of the ERISA plan at issue, with that of its own.
A judgment in accordance with this memorandum opinion shall be entered separately.
NOTES
[1] The Plan provides benefits to any participant who suffers a covered total disability, which is defined in Section 1.16 of the Plan as follows:
.... in the case of a Participant whose primary occupation is other than piloting or action as a member of the crew of an aircraft, a condition of being disabled by bodily sickness or disease if
(a) during the first thirty months of any Period of Total Disability, such participant is unable to perform all the duties of his occupation; and
(b) during continuation of the Period of Total disability beyond thirty months, such Participant is unable to engage in any business or occupation or to perform any work for compensation, gain or profit for which he is reasonably fitted by education, training or experience.
[2] See Attending Physician's Statement, dated (Plaintiff's Exh. 2).
[3] West depo. pp. 6, 7.
[4] West depo. pp. 10, 11.
[5] West depo. pp. 54, 55.
[6] Pursuant to Section 6.02 of the Revised Plan, entitled Allocation of Responsibilities:
Responsibility shall be allocated among the Named Fiduciaries as follows:
(c) The claims administrator shall be responsible for determining eligibility for benefits under the Plan and the payment of such benefits. Additionally, the Claims Administrator may under appropriate circumstances assist Participants in returning to gainful employment and obtaining all disability benefits for which they are eligible through (1) rehabilitation coordination and counseling; (2) Social Security counseling; and job placement services. If the Participant fails to cooperate with the Claims Administrator's provisions of such counseling and services, the Participant's eligibility for benefits under the Plan will cease....
[7] West depo., pp 40-42.
[8] West depo. p. 47.
[9] In her letter, Mrs. Waldrep requested a copy of Brooks' patient notes in order to properly document his claim file.
[10] According to this report, Brooks could not: 1) sit for periods exceeding 30-40 consecutive minutes; stand for 15-20 consecutive minutes, bend, or walk distances greater than one block. Moreover, Dr. Woodall stated that he considered Brooks disabled for his occupation and totally disabled for all occupations.
[11] West depo. pp. 62-66.
[12] Ryan depo. pp. 8-9.
[13] Ryan depo. pp. 6, 10-14.
[14] Ryan depo. pp. 37-38.
[15] Ryan depo. pp. 46-50.
[16] According to the correspondence dated July 9, 1991, Protective desired that Brooks undergo vocational evaluation in order to determine Brooks' education, training and experience. The letter also expressed that "[b]ased upon this information, Crawford and Company may be able to determine specific employment opportunities" for a person in Brooks' physical condition.
The July 11, 1991, letter stated that APCo was "taking steps wherever possible to modify positions to re-employ individuals receiving benefits under the Long Term Disability Plan." West, the drafter of the correspondence, stated that Brooks was required to undergo an FCE administered by the Montgomery Rehabilitation Hospital in order to accurately define Brooks' limitations and physical condition. According to this letter, APCo and Protective were to assess the outcome of Brooks' FCE and vocational evaluation, which would clarify the issue of Brooks' eligibility for re-employment.
[17] Subsection (B) of 29 U.S.C. § 1132(a)(1) provides:
A civil action may be brought by a participant or beneficiary to recover benefits due to him under the terms of his plan, or to clarify his rights to future benefits under the terms of the plan.
29 U.S.C. § 1132(a)(1)(B).
[18] See also, Moon v. American Home Assurance Company, 888 F.2d 86, 88 (11th Cir.1989) ("the circuit courts which have found that particular ERISA plans granted discretion to plan administrators or fiduciaries, in cases after Firestone, have uniformly rested this finding upon express language of the ERISA plan before them"); Baker v. Big Star Division of the Grand Union Company, 893 F.2d 288, 292 (11th Cir.1989) (noting that a panel of the Eleventh Circuit may have determined that express language of discretionary authority is necessary before the arbitrary and capricious standard is evoked); Guy v. Southeastern Iron Workers' Welfare Fund, 877 F.2d 37, 38-39 (11th Cir.1989) (benefit determination "must be reviewed de novo unless the plan expressly gives the administrator discretionary authority to make eligibility determinations or to construe the plan's terms").
[19] Article 6.02 of the 1981 Plan, entitled "Allocation of Responsibilities," enunciates the relationship between the fiduciaries and the scope of their authority.
The Company (APCo), the plan administrator, the claims administrator, (Protective) and the trustee each shall be a Named Fiduciary of the plan. Each fiduciary shall have only those specific powers, duties responsibilities and obligations as are specifically given to it under the plan and trust. Each shall be responsible for the proper exercise of its own powers, duties and responsibilities and obligations under the plan and trust.... (bold and italics added).
[20] In Duhon, the long-term disability benefit plan at issue bore a striking resemblance to the Plan. The plan in Duhon provided that "an employee may receive disability payments for the first twenty-four months after the disability begins if the employee is unable to perform the normal duties of his regular job assignment or a comparable one." Duhon, 15 F.3d at 1304. The plan in Duhon also contained a provision identical in scope to the continued disability benefits prong of the Plan. Following the initial twenty-four month benefit period, disability payments cease "if the employee is unable to perform any job for which he or she is, or may become, qualified by training, education, or experience." Id.
[21] Duhon persuaded the district court, which granted summary judgment in favor of Duhon. However, the appellate court reversed the district court's grant of summary judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2300889/ | 40 A.3d 207 (2011)
IN RE ESTATE OF MILLER[44].
No. 1915 MDA 2010.
Superior Court of Pennsylvania.
December 30, 2011.
Affirmed.
NOTES
[44] Petition for reargument denied March 26, 2012. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1131569/ | 765 So. 2d 1087 (2000)
SCHIRO-DEL BIANCO ENTERPRISES, INC.
v.
NSL, INC., Steven A. Bogdanoff and Arthur C. Stern.
No. 99-CA-1237.
Court of Appeal of Louisiana, Fourth Circuit.
May 24, 2000.
Rehearing Denied July 28, 2000.
*1088 W. Lee Kohler, Terrence L. Brennan, Deutsch, Kerrigan and Stiles, L.L.P., New Orleans, LA, Counsel for Defendants/Appellants (NSL, Inc. and Cynthia House).
F. M. Stoller, Ethan N. Penn, McCloskey, Langenstein and Stoller, LLP, New Orleans, LA, Counsel for Appellees (Steven Bogdanoff And Arthur Stern).
(Court composed of Chief Judge ROBERT J. KLEES, Judge WILLIAM H. BYRNES, III, Judge MICHAEL E. KIRBY).
KIRBY, Judge.
STATEMENT OF THE FACTS
In 1996, Arthur Stern and Steven Bogdanoff (Stern and Bogdanoff) contacted NSL, Inc., a general contractor, about performing renovations to their future home. They described to the owner of NSL, Cynthia House, a general scope of work desired and, although the testimony is conflicting, advised her that they had a budget of between twenty and thirty thousand dollars. NSL prepared an estimate based upon the general scope of work described. Because Stern and Bogdanoff were concerned about keeping track of the cost, NSL proposed to perform work on a costplus basis, billing Stern and Bogdanoff weekly to allow them to keep track of the expenses as they were incurred.
*1089 NSL and Stern and Bogdanoff never entered into any written agreement.
Stern and Bogdanoff paid all but the last few weekly invoices, all of which clearly revealed the cost plus an additional "10% MARK UP" charge, or in one instance "10% P and O" charge.
Throughout most of the work period on the house, Stern and Bogdanoff requested changes or specific materials that were of higher quality and more costly. Among other things, these changes included: requesting more expensive bathroom fixtures, moving the locations of bathroom fixtures, running a new gas line to feed a clothes dryer in a closet on the third floor, applying sheetrock mud on exposed ceiling beams to give them a smoother appearance, repainting the entire apartment due to a color change requested by Stern and Bogdanoff, upgrading the electrical system to install more expensive light fixtures and three-way switches, installation of a built-in stereo system, requesting more expensive tile and countertops, and requesting more expensive entry door. Cynthia House, president of NSL, claims that Stern and Bogdanoff were made aware at all times when requesting these upgrades and additions that their requests would increase the cost of the job. Stern and Bogdanoff claim that House assured them that even with the changes, the work could be done within their budget. House admitted that she never gave specific information to Stern and Bogdanoff.
Stern and Bogdanoff visited the jobsite often and were aware of the work being performed. They were billed weekly for work actually performed and the invoices revealed in detail all expenditures made and costs.
After the sixth invoice had been paid, Stern and Bogdanoff had paid NSL slightly over $26,000 for the renovation work. Stern and Bogdanoff allowed NSL to work another two weeks on the job, but then refused to pay the seventh invoice when it was submitted for that two week period of work. On August 31, 1996, NSL reported to the jobsite only to discover that the locks had been changed. Stern and Bogdanoff refused NSL access to complete the work.
Upon locking out NSL, Stern and Bogdanoff paid other contractors to finish the work, alleging defective work was done by NSL.
Schiro del Bianco, a subcontractor which supplied granite countertops and floor tile, originally filed suit against Stern and Bogdanoff and NSL to recover on a Private Works Act Lien filed by Schiro del Bianco in the amount of $7,140.00. NSL filed a cross-claim against Stern and Bogdanoff for $21,907.85, the amount it claims it was owed for the work it performed or had performed for it by subcontractors, but which had not been paid. This amount included Schiro del Bianco's claim. Stern and Bogdanoff filed a cross-claim against NSL for the amounts incurred in completing the work.
The trial court judgment awarded $14,767.85 to NSL for work performed by it and its subcontractors. The trial court judgment also awarded $15,000 to Stern and Bogdanoff for work performed defectively and for the cost to finish the work. The trial court did not rule on the nature of this contract, but implicit in its judgment is the fact that it was not viewed as a cost plus percentage contract.
LEGAL ANALYSIS
This Court must decide the following issues: (1) What was the nature of the contract entered into by the parties? (2) Was NSL's work defective? (3) Can NSL recover on behalf of their subcontractors? And (4) Is NSL entitled to interest from the dates its unpaid invoices became due?
Nature of the Contract
Louisiana jurisprudence recognizes three basic types of construction contracts: lump sum contracts; cost plus percentage of the cost contracts (percentage contracts); and cost plus a fixed fee contract. M. Carbine Restoration, Ltd. v. *1090 Sutherlin, 544 So. 2d 455 (La.App. 4 Cir. 1989); Joe Bonura, Inc. v. Hiern, 419 So. 2d 25 (La.App. 4 Cir.1982); Standard Oil Co. of Louisiana v. Fontenot, 198 La. 644, 4 So. 2d 634 (1941). In a percentage contract, or cost plus percentage of the cost contract, the owner reimburses the contractor for the costs of the material and labor while paying the contractor a percentage of the total cost of the project for his profit or gain. Standard Oil Co. of Louisiana v. Fontenot, supra.
Here, Stern and Bogdanoff claim this was a fixed price contract, while NSL claims that this was a cost plus percentage contract. This court has held that a building or renovation contract which provided an agreed price, but required the contractor to document his material and labor costs before receiving payment was a cost plus percentage contract. M. Carbine Restoration, Ltd. v. Sutherlin, supra; Wendel v. Maybury, 75 So. 2d 379 (La.App. Orl.1954); Planning Systems Corp. v. Murrell, 374 So. 2d 719, 721 (La.App. 4 Cir.1979), writ denied 376 So. 2d 319 and 377 So. 2d 843 (La.1979).
In reaching that conclusion in the Wendel case, the court considered the fact that the owners were allowed to make a number of changes in the project after the agreed price had been set and the fact that the owners were allowed to select various materials after the project was started. (Citation omitted.) The court noted that the owners would have had no interest in the cost of materials and costs had the contract been for a stipulated price and stated that "no contractor, after agreeing on a fixed price, would have permitted the owner to select materials which might cost more than those contemplated when the contract was entered into." (Citation omitted.)
M. Carbine Restoration, Ltd. v. Sutherlin, 544 So. 2d 455, 458 (La.App. 4 Cir.1989).
The facts of this case are very similar. The parties never agreed upon a fixed price. Stern and Bogdanoff were never presented with a written estimate of the cost of the work. The parties did not have a written contract. Stern and Bogdanoff never testified that they had a fixed price contract. Bogdanoff testified only that they had a budget, of which they claim to have advised NSL. Cynthia House testified that she told Stern and Bogdanoff that the work could probably be done for about $27,000 based on her understanding of the general scope of work, with the caveat that a number of items still remained to be priced.
The parties did not have a clearly defined scope of work. The parties toured the house, and Stern and Bogdanoff generally explained what they wanted done. There were no written plans nor any specification of the materials and fixtures to be used in the renovation.
During the course of the work, the scope of work changed based on requests by Stern and Bogdanoff for additional items of work and the selection, after the work had begun, of more expensive fixtures and materials. In fact, Bogdanoff testified as to three specific changes, which by themselves increased the price of the work by more than $3,000.
NSL's invoices were submitted weekly to Stern and Bogdanoff on a cost plus percentage basis and included all of NSL's invoices for materials and labor. Stern and Bogdanoff paid NSL's invoices without complaint and without questioning why they were being submitted on a cost plus percentage basis.
Therefore, following the rationale of the Wendel[1] and M. Carbine Restoration[2] cases, we hold that the parties had a cost plus percentage contract. It follows that any damages awarded Stern and Bogdanoff for "cost to complete the work" must be reversed, because in a cost plus *1091 percentage contract "cost to complete the work" is not recoverable. Joe Bonura, Inc. v. Hiern, 419 So. 2d 25 (La.App. 4 Cir.1982). The owner can never recover the cost to complete the work in a cost plus percentage contract because the contractor is responsible for, and only receives payment for, work actually performed. Joe Bonura, Inc., supra.
Under a cost plus contract, the contractor is hired in a supervisory capacity and when the owner cancels the contract, the contractor is entitled to reimbursement for labor and materials and the profit thereon at the time of cancellation. (Citation omitted.) Likewise, the owner is not entitled to recover for the cost of completion upon cancellation of the contract. Kerner v. Gilt, 296 So. 2d 428 (La.App. 4 Cir.1974), writ denied 300 So. 2d 185. The rationale for such denial is that the contractor has been paid commensurate with the progress of the work done, therefore, presumably neither the contractor nor the owner has sustained any loss. (Citation omitted.) (Emphasis added.)
Joe Bonura, Inc. v. Hiern, 419 So.2d at 29.
The trial court's judgment, insofar as it awards damages to NSL for work performed, is affirmed. The sum total for work performed by NSL is $7,637.63 [$14,767.85 $7,130.22 (money owed non-party subcontractors)].
Defective work
Because, as a matter of law, we find this renovation agreement to be a cost plus percentage contract, NSL is entitled to payment for work performed minus the cost of repair for any defective work. Thus, in order for Stern and Bogdanoff to recover the cost of correcting alleged defective work, they had to prove, by preponderance of the evidence, that NSL had not fulfilled its obligation of workmanlike and professional performance. La. C.C. Art. 2769.
While Stern and Bogdanoffs expert testified that things were "misaligned" and "improperly done," at best his testimony uses ambiguous terms to describe the work of NSL, i.e. the terms used may imply defective work or may imply simply unfinished work. Stern and Bogdanoff's expert uses the term "deficient work" rather than "defective work." Nothing in the expert testimony, or in the record, causally connects the "deficient work" the expert spoke of with unworkmanlike performance, any more than with the fact that NSL was not permitted to finish working on the project. There is contradictory testimony that this was not due to unworkmanlike performance, but rather due to the fact that Stern and Bogdanoff did not allow NSL to complete their work, i.e. by locking them out of the premises.
The record contains an abundance of estimates of the cost of the work, however it does not offer anywhere in the expert testimony an estimate of just the cost to repair the alleged defective work. Not only is a finding of defective work not supported in the record, but there is even evidence to the contrary in a letter from Arthur Stern to Cynthia House complementing NSL on their workmanship on the tile and granite. Because Stern and Bogdanoff did not meet their burden of proving that NSL performed in an unworkmanlike manner, they cannot recover any cost of repairing alleged defective work. Therefore, we reverse the judgment of fifteen thousand dollars ($15,000) in favor of Stern and Bogdanoff.
Can NSL recover for its subcontractors?
The trial court allowed NSL to recover for subcontractors Spectrum Systems and Northside Electric, respectively in the amounts of $4,922.00 and $2,208.22, based on a theory of unjust enrichment. Between these subcontractors and Stern and Bogdanoff, there is no privity of contract. These subcontractors did not avail themselves of the remedies provided in the Private Works Act, LSA-R.S. 9:4801 et sequitur, nor are they a party to this litigation. Moreover, NSL has not paid *1092 these subcontractors, they have simply submitted bills from Spectrum Systems and Northside Electric. Because NSL has not incurred any actual damages, i.e. no actual expenses, they cannot recover on behalf of said subcontractors. As a matter of law NSL cannot recover for these subcontractors based upon a theory of unjust enrichment, because they cannot meet one requirement of the unjust enrichment theory, i.e. that there be no other remedy at law. Minyard v. Curtis Products, Inc., 251 La. 624, 205 So. 2d 422 (1967).[3] Here there is another remedy at law. The contractual obligation between NSL and these subcontractors has not prescribed, the subcontractors can still bring a suit to collect from NSL. In this scenario NSL could then bring a third party demand against Stern and Bogdanoff, in which case NSL could collect from Stern and Bogdanoff for the amounts they owe the subcontractors. Spectrum Systems and Northside Electric have not asserted any claims in this action, and the record does not show NSL has paid them. Therefore, NSL cannot collect for Spectrum Systems and Northside Electric and their recovery is reduced by $7,130.22 ($4,922.00 + $2,208.22).
Interest Due
La. Civil Code Art.2000 provides that "damages for delay in performance are measured by the interest on that sum from the time it is due, ... at the rate of legal interest as fixed by Article 2924." Therefore, NSL is entitled to recover interest on the amounts of its unpaid invoices from the dates those invoices became due. La.C.C. Art.2000; Ken's Construction Co., Inc. v. Liles, 560 So. 2d 103, 106 (La.App. 3 Cir.1990); National Roofing and Siding Co. v. Gros, 433 So. 2d 403 (La.App. 4 Cir.1983).
In an action on a building contract, interest is recoverable from the time the debt becomes due unless otherwise stipulated. Calhoun v. Louisiana Materials, Co., 206 So. 2d 147 (La.App. 4th Cir. 1968), writ refused, 251 La. 1050, 208 So. 2d 324 (1968); Teledyne Movible Offshore v. C & K Offshore, 376 So. 2d 357 (La.App. 3rd Cir.1979).
National Roofing, 433 So.2d at 405.
The contract was terminated by Stern and Bogdanoff on September 1, 1996 when they locked NSL out of the job and refused to grant it further access to the premises. NSL's two unpaid invoices were issued on August 29, 1996 in the amount of $20,280.21[4] and September 6, 1996 in the amount of $1,627.64. Payment on these invoices was due no later than the date on which the contract was terminated or the date on which the last invoice was submitted, i.e. September 6, 1996. Interest is owed, at the legal rate, on the amount awarded to NSL ($7,637.63) from September 6, 1996.
In summary, the judgment is affirmed insofar as it awards damages to NSL for work it performed. However, the award of $14,767.85 is reduced by the sum of the two subcontractors' bills, ($4,922.00 + $2,208.22 = $7,130.22) which leaves a total of $7,637.63 that NSL will recover with interest. We reverse the judgment of $15,000 to Stern and Bogdanoff.
AFFIRMED IN PART; REVERSED IN PART.
NOTES
[1] Supra.
[2] Supra.
[3] The five elements of unjust enrichment are: (1) there must be an enrichment, (2) there must be an impoverishment, (3) there must be a connection between the enrichment and resulting impoverishment, (4) there must be an absence of `justification' or `cause' for the enrichment and impoverishment, and finally (5) the action will only be allowed when there is no other remedy at law, i.e., the action is subsidiary or corrective in nature. 36 Tul. L.Rev. 605, 610; Minyard, supra.
[4] This invoice included several subcontractors charges: Schiro del Bianco, $7,140.00 (who received payment and is no longer a party to this suit.); Spectrum Systems, $2,208.25; and Northside Electric, $4,922.00. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3356890/ | [EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]
MEMORANDUM RE MOTION TO COMPEL ARBITRATION
The plaintiff seeks an order directing the defendant to proceed with arbitration. It is undisputed that the arbitration process was initiated by the plaintiff and that the defendant participated to the extent that arbitrators were appointed and various hearing dates scheduled and cancelled by both parties prior to October 25, 1990. The matter was scheduled on October 25, 1990 when the defendant's attorney was notified on October 24, by telephone from the plaintiff's attorney's office that the hearing would not proceed the following day and that the plaintiff intended to withdraw the matter. The defendant promptly corresponded with the plaintiff on October 31, 1990 seeking to confirm from him that the reason the hearing was cancelled was that he intended to withdraw the matter. Receiving no reply to his correspondence of October 31, the defendant again wrote to the plaintiff's attorney on December 31, 1990 seeking the courtesy of a reply to his letter of October 31, and informing him that if he did not hear from him he would close his file. The defendant's attorney next heard from the plaintiff on August 27, 1991, when the plaintiff's attorney, because of a CT Page 2921 change in the existing law, attempted to notify the arbitrators previously appointed, to reschedule the arbitration hearing. The defendant refused to proceed with the arbitration and resists the plaintiff's motion to compel arbitration and now is relying on the doctrine of estoppel to thwart the plaintiff's attempt to renew the arbitration process. The defendant claims that he relied on the plaintiff's representation that he intended to withdraw the matter, to his detriment. The defendant argues that because of this reliance he did not, of his own accord, proceed with arbitration at a time when the state of the existing law favored his position — all to his detriment.
"Estoppel rests on the misleading conduct of one party to the prejudice of the other." Novella v. Hartford Accident Indemnity Co., 163 Conn. 552, 563. This court is unable to determine, without an evidentiary hearing, whether there exists the necessary factual basis to warrant the invocation of this doctrine. Whether the plaintiff's attorney intended to postpone the hearing or withdraw it or agree not to pursue it under any circumstances and whether the defendant was misled or should have been misled to his detriment are factual questions that this court cannot decide on the affidavits submitted and arguments of counsel. This defense will undoubtedly be asserted at both the arbitration hearing and at the hearing to confirm an award if the plaintiff is successful. The court will grant the plaintiff's motion to compel arbitration without prejudice to the defendant's rights to assert the defense of estoppel at arbitration and in future court proceedings if appropriate.
JOSEPH H. PELLEGRINO, JUDGE | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1669773/ | 627 S.W.2d 517 (1982)
Max POYNOR, Appellant,
v.
BOWIE INDEPENDENT SCHOOL DISTRICT, Appellee.
No. 2-81-018-CV.
Court of Appeals of Texas, Fort Worth.
January 20, 1982.
Rehearing Denied February 18, 1982.
*518 The Montgomery Law Firm and Elton M. Montgomery, Graham, for appellant.
Perdue, Brandon, Blair & Fielder, J. Roland Jeter, Fort Worth, for appellee.
Before MASSEY, C. J., and SPURLOCK and HOLMAN, JJ.
OPINION
HOLMAN, Justice.
This appeal is from an order dismissing and overruling a plea of privilege in a suit for delinquent ad valorem taxes.
We affirm.
Both parties concede that this is the second suit between them upon the identical subject matter. Both suits were filed in Montague County, to recover allegedly delinquent ad valorem taxes levied against appellant's land in that county.
The prior suit was in 1978, seeking to recover the same 1973 and 1974 taxes that are the subject of the present suit.
When appellant filed a plea of privilege in the 1978 suit, appellee neglected to controvert, and the trial court sustained the plea of privilege, ordering the cause transferred to the District Court of Jack County, where appellant resides.
No further action was taken in that cause, until a voluntary nonsuit by appellee in the District Court of Jack County, February 26, 1981.
On June 29, 1981, appellee filed the present suit in Montague County, and appellant responded with a plea of privilege to be sued in Jack County.
Appellee's controverting plea relies upon Tex.Rev.Civ.Stat.Ann. art. 7345b-1; art. 1995, subd. 30 as grounds for conferring venue on the District Court in Montague County.
Art. 7345b-1 provides:[1]
"All actions or suits for the collection of delinquent ad valorem taxes on either real or personal property due the State of Texas or any political subdivisions thereof, shall be brought in a Court of competent jurisdiction in the County in which such taxes were levied."
Subdivision 30 provides:
"Special venue.Whenever in any law authorizing or regulating any particular character of action, the venue is expressly prescribed, the suit shall be commenced in the county to which jurisdiction may be so expressly given."
Appellant's plea of privilege was heard by the court and was overruled and dismissed September 23, 1981.
In his points of error, appellant contends (a) that the appellee's failure to file a controverting plea in the prior lawsuit waived the right to contest venue in the present suit; (b) the order which sustained appellant's plea of privilege in the prior suit is res judicata in this suit; and (c) there is no evidence that venue in Montague County is proper under the circumstances.
While art. 7345b-1 may be a special venue statute, its essential effect is jurisdictional. Rhodes v. City of Austin, 584 S.W.2d 917 (Tex.Civ.App.Tyler 1979, writ ref'd n. r. e.); 1 McDonald, Texas Civil Practice, sec. 4.02 (1981).
While Rhodes, supra, was not a venue appeal, we agree with its reasoning as to *519 the jurisdictional effect and meaning of art. 7345b-1. That court's opinion quotes the legislative intent as stated in the bill which became art. 7345b-1. Clearly that intent was to remove delinquent ad valorem tax collection suits from the scope of the general venue statute, art. 1995, and plea of privilege procedures.
Not all separate statutes which provide for venue are controlled by art. 1995. State v. Harry Cloud Transport, Inc., 505 S.W.2d 798 (Tex.1974); Traders & General Ins. Co. v. Curby, 103 S.W.2d 398 (Tex.Civ.App. Waco 1937, no writ).
We hold that venue of the present suit is controlled by art. 7345b-1 and not by the exceptions of art. 1995.
Appellee is a political subdivision of the State of Texas, and its suit to recover ad valorem taxes must be adjudicated in a district court. Tex.Rev.Civ.Stat.Ann. art. 1906 (1965).
In the present suit, art. 7345b-1 confers exclusive jurisdiction of the subject matter on the District Court of Montague County, in which the allegedly delinquent taxes were levied.
Art. 7345b-1 is a component of Tex.Rev. Civ.Stat.Ann. title 122, governing assessment, levy and collection of ad valorem taxes.
In a statutory cause of action, the mandatory and exclusive provisions of the statute must be complied with in all respects or the action is not maintainable. McGregor v. Clawson, 506 S.W.2d 922 (Tex. Civ.App.Waco 1974, no writ).
The court in McGregor states, at 923:
"Where a statute creates a right and provides remedy for its enforcement, the remedy is exclusive and where it confers jurisdiction upon particular court, that jurisdiction is exclusive." (emphasis added).
Appellant argues that when a plea of privilege is sustained and the cause is transferred to the county of defendant's residence, a nonsuit by the plaintiff becomes res judicata as to venue if he asserts the same cause of action against the defendant in a subsequent suit.
That is the general rule. Knapp v. Knapp, 386 S.W.2d 630 (Tex.Civ.App.Austin 1965, no writ); Southwestern Investment Company v. Gibson, 372 S.W.2d 754 (Tex.Civ.App.Fort Worth 1963, no writ).
However, when a jurisdictional statute such as art. 7345b-1 governs the cause, a trial court order which purports to transfer venue under the general venue statute, art. 1995, is void. The transferee court has no power to hear the case, even by agreement of the parties. Gambill v. Town of Ponder, 494 S.W.2d 808 (Tex.1973); and subsequent per curiam opinion in 497 S.W.2d 454 (Tex.Civ.App.Fort Worth 1973).
Sua sponte, we conclude that the order of the trial court sustaining appellant's uncontroverted plea of privilege in the prior suit was void. Gambill, supra.
A void judgment is not res judicata in a subsequent suit involving the same parties and subject matter. Dews v. Floyd, 413 S.W.2d 800 (Tex.Civ.App.Tyler 1967, no writ); Commander v. Bryan, 123 S.W.2d 1008 (Tex.Civ.App.Fort Worth 1938, no writ).
Since art. 7345b-1 vests exclusive jurisdiction of this case in the District Court of Montague County, neither the parties nor the trial court were empowered to waive that jurisdiction. Wilkinson v. Wilkinson, 419 S.W.2d 226 (Tex.Civ.App.Dallas 1967, no writ); Gibbs v. Melton, 354 S.W.2d 426 (Tex.Civ.App.Dallas 1962, no writ); Armstrong v. West Texas Rig Company, 339 S.W.2d 69 (Tex.Civ.App.El Paso 1960, writ ref'd n. r. e.).
We are not unmindful of the provisions of Tex.R.Civ.P. 86, for we recognize that an uncontroverted plea of privilege, such as that filed by appellant in the prior suit, generally imposes on the trial court a duty to transfer venue to the county of defendant's residence. Eagle Life Ins. Co. v. Owens, 549 S.W.2d 243 (Tex.Civ.App. Texarkana 1977, writ dism'd.).
*520 No such duty exists, however, if its performance would compel the court to transfer the cause to another court that has no jurisdiction. Rhodes, supra.
Even though controverted in the present suit, appellant's plea of privilege was an inappropriate plea, for in a suit controlled by a jurisdictional statute (art. 7345b-1), a plea of privilege only serves to confront the trial court with the illusion of a duty it has no power to perform. Gambill, supra; Rhodes, supra.
That situation entitles the trial court to strike the plea of privilege on its own motion or on special exception. 1 McDonald, Texas Civil Practice, sec. 4.46.1, p. 481 (1981).
We hold that art. 7345b-1 is not a "law authorizing or regulating [a] particular character of action" within the meaning of subdivision 30, art. 1995, and the trial court correctly dismissed appellant's plea of privilege in the present suit.
Appellant's points of error are overruled.
Judgment of the trial court is affirmed.
NOTES
[1] Art. 7345b-1 is repealed, effective January 1, 1982. Acts 1979, 66th Legislature, p. 2329, ch. 841 sec. 6(a)(1). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1790778/ | 600 S.W.2d 803 (1980)
O. D. PLATTER, Appellant,
v.
The STATE of Texas, Appellee.
No. 59570.
Court of Criminal Appeals of Texas, Panel No. 3.
May 14, 1980.
As Corrected On Rehearing Denied July 16, 1980.
*804 Thomas C. Railsback and Ben Henderson, Dallas, for appellant.
Henry M. Wade, Dist. Atty., John H. Hagler, Michael R. Gillett and James G. Walker, Asst. Dist. Attys., Dallas, Robert Huttash, State's Atty., Austin, for the State.
Before PHILLIPS, TOM G. DAVIS and DALLY, JJ.
OPINION
PHILLIPS, Judge.
This is an appeal from a conviction for the felony offense of failure to remain at the scene of a motor vehicle accident and give required information. Article 6701d, §§ 38 and 40, V.A.C.S. Punishment was assessed at imprisonment for three years.
Appellant raises eight grounds of error. We affirm.
In his first ground of error, appellant contends that the trial court erred in denying his motion to quash the indictment. Appellant claims that the indictment unlawfully enhanced an offense for which a specific penalty applies.
The penalty provision for the offense of failure to remain at the scene of a *805 motor vehicle accident and give required information is found in Article 6701d, § 38(b), V.A.C.S., and provides as follows:
Any person failing to stop or to comply with said requirements under such circumstances shall upon conviction be punished by imprisonment in the penitentiary not to exceed five (5) years or in jail not exceeding one (1) year or by fine not exceeding Five Thousand ($5,000.00) Dollars, or by both such fine and imprisonment.
V.T.C.A. Penal Code, § 1.03(b) provides in part that Titles 1-3 of the Penal Code "apply to offenses defined by other laws, unless the statute defining the offense provides otherwise." The statute defining the offense of failure to remain at the scene of a motor vehicle accident and give required information does not provide otherwise with respect to enhancement. This statute has its own penalty provision, but it does not speak to the question of enhancement. Under V.T.C.A. Penal Code, § 12.41(1), the offense of failure to remain at the scene of a motor vehicle accident and give required information is classified as a felony of the third degree. V.T.C.A. Penal Code, § 12.42, which pertains to enhancement and is found in Title 3 of the Penal Code, applies to the offense of failure to remain at the scene of a motor vehicle accident and give required information. See Young v. State, 552 S.W.2d 441 (Tex.Cr.App.1977). We therefore conclude that it was not improper to enhance this offense, and the trial court did not err in refusing to quash the indictment.
Appellant's reliance on Edwards v. State, 166 Tex. Crim. 301, 313 S.W.2d 618 (1958) is misplaced. In that case the statute under consideration provided that "for each and every subsequent such violation" the person convicted shall be punished by a specific penalty. The statute in the present case does not contain such a provision. Edwards, supra, clearly is distinguishable. Appellant's first ground of error is overruled.
In his second ground of error, appellant contends that the trial court erred in refusing to quash the indictment because the two convictions alleged for enhancement had relied on a void judgment. Both enhancement paragraphs alleged the felony offense of driving a motor vehicle while intoxicated on a public highway. See Article 6701l-(2), V.A.C.S. These two felony convictions relied on the conviction in Cause No. 6505-B for the misdemeanor offense of driving a motor vehicle while intoxicated on a public highway. See Article 6701l-(1), V.A.C.S. Appellant contends that the judgment in the misdemeanor case is void, which in turn renders void the two felony convictions that relied on that judgment.
Appellant argues that the judgment in Cause No. 6505-B is void because it recites that he was convicted of "driving while intoxicated," which is not an offense under the laws of Texas. See Keding v. State, 140 Tex. Crim. 299, 144 S.W.2d 1104 (1940); Herring v. State, 117 Tex. Crim. 211, 35 S.W.2d 737 (1930). Although the information in Cause No. 6505-B correctly alleges the offense, appellant contends that the judgment and information cannot be read together because the judgment does not refer to the information. See Skaggs v. State, 167 Tex. Crim. 254, 319 S.W.2d 310 (1958); Frazier v. State, 159 Tex. Crim. 263, 262 S.W.2d 501 (1953).
This Court has held that the judgment in a misdemeanor case is not required to describe the offense for which the defendant was adjudged guilty. Compas v. State, 451 S.W.2d 487 (Tex.Cr.App.1970); LaDuke v. State, 166 Tex. Crim. 160, 312 S.W.2d 242 (1958); Stephens v. State, 161 Tex. Crim. 407, 277 S.W.2d 911 (1955). In the present case both the judgment and the information upon which it was based were admitted into evidence, and both instruments bear the Cause No. 6505-B. The judgment was not void. Stephens, supra. Appellant's second ground of error is overruled.
In his third ground of error, appellant complains of the trial court's refusal to dismiss the indictment because of prosecutorial vindictiveness. The record reflects that after the defendant rejected the State's offer for a plea bargain, the prosecutor returned to the grand jury and *806 obtained a new indictment that included enhancement counts. The record further reflects that during plea negotiations the prosecutor told defense counsel that if the defendant refused to plead guilty the prosecutor would seek a new indictment that included enhancement counts. Appellant contends that the prosecutor's conduct was vindictive and therefore improper. The question raised by appellant was presented to the Supreme Court in Bordenkircher v. Hayes, 434 U.S. 357, 98 S. Ct. 357, 54 L. Ed. 2d 604 (1978), and the Court answered the question adverse to appellant's contention. This ground of error is overruled.
In his fourth ground of error, appellant contends that the trial court erred in overruling his motion to suppress the two felony convictions relying on the judgment in Cause No. 6505-B because this judgment was void. As explained in appellant's second ground of error, the judgment was not void. This ground of error is overruled.
In his fifth, sixth, and seventh grounds of error, appellant contends that the trial court erred in admitting into evidence State's Exhibit Nos. 13, 14, and 19. Appellant claims that these three items were obtained as a result of an illegal search and seizure.
State's Exhibit Nos. 13 and 14 were photographs of the underside of appellant's car. These photographs showed dark spots that allegedly were blood. State's Exhibit No. 19 was a sample scraped from appellant's car. This sample was later shown to be blood that was consistent with the blood of the child allegedly struck by appellant's car.
Assuming that these three items of evidence were the fruit of an illegal search and seizure, we nevertheless conclude that the error in their admission was harmless beyond a reasonable doubt. This evidence was incriminating in that it tended to show that appellant's car was the same car that struck the child, and it also tended to show that the child was seriously injured. There was a substantial quantity of other evidence, however, that tended to establish the identical facts.
Dolores Ann Fugitt testified that the child was hit by a black and white Ford. Before this car left the scene of the accident, Fugitt was able to get the number of the license plate. She further testified that this information was communicated to the police. When a police officer ran a registration check on the license number, he found that it was registered in appellant's name.
Greg H. Burke testified that he was at the scene of the accident, and he identified appellant as the driver of the car that struck the child. Burke also identified State's Exhibit No. 10 as a photograph of the car that struck the child. This exhibit was a photograph of appellant's car.
Judy Guerra also was at the scene of the accident, and she was able to get the first letter and the three numbers of the license plate of the car that struck the child. This letter and these numbers were identical to those on the license plate of appellant's car.
Approximately one hour after the accident a Dallas police officer observed appellant's car parked across the street from a bar. B. J. Martin, a police officer, testified that he looked under appellant's car before it was impounded by the police, and he saw spots that he believed to be blood.
Based on the foregoing evidence, we hold that any error in the admission of State's Exhibit Nos. 13, 14, and 19 was harmless beyond a reasonable doubt.
In his eighth ground of error, appellant contends that the trial court erred in denying his motion to quash the indictment because the indictment was duplicitous. Appellant claims that the indictment alleges three offenses in one count by alleging the following: (1) failure to give name, (2) failure to give address, and (3) failure to give the registration number of the vehicle. A reading of the statute reveals that it requires all three items of information to be given. See Article 6701d, §§ 38 and 40, V.A.C.S. Thus, contrary to appellant's contention, the indictment alleges only one offense and is not duplicitous. This ground of error is overruled.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2901809/ | Becker v. State
COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
)
JOHN FOX, ) No. 08-04-00361-CV
)
Appellant, ) Appeal from
)
v. ) 327th District Court
)
JOE WARDY, MAYOR, SUSAN AUSTIN, ) of El Paso County, Texas
JOSE A. LOZANO, JOHN F. COOK, )
DANIEL S. POWER, PAUL J. ESCOBAR, ) (TC# 2003-4511)
VIVIAN ROJAS, and )
ANTHONY W. COBOS, )
)
Appellees. )
O P I N I O N
John Fox appeals from an order transferring the case from the 171st District Court to the
327th District Court. We dismiss the appeal for want of jurisdiction.
FACTUAL SUMMARY
Fox has filed several suits related to the condemnation of an apartment complex owned by
him. In this case, Fox filed a negligence suit in cause number 2003-4511 (171st District Court)
against the mayor and members of the city council. The 171st District Court entered an order
transferring the case to the 327th District Court with the consent of the judge of that court. Fox filed
a notice of appeal stating his intent to appeal the transfer order. On appeal, Fox raises a single issue
challenging the transfer order.
INTERLOCUTORY APPEAL
Appellate courts generally have jurisdiction over final judgments and such interlocutory
orders as the legislature deems appealable. Tex.Civ.Prac.&Rem.Code Ann. § 51.012 (Vernon
1997) and § 51.014 (Vernon Supp. 2004-05); Ruiz v. Ruiz, 946 S.W.2d 123, 124 (Tex.App.--El Paso
1997, no writ). A judgment is final and appealable if it disposes of all parties and all issues. Ruiz,
946 S.W.2d at 124. Section 51.014 of the Civil Practice and Remedies Code authorizes an
interlocutory appeal in the following instances: (1) appointment of a receiver or a trustee; (2)
overruling a motion to vacate an order that appoints a receiver or a trustee; (3) certification or refusal
to certify a class; (4) granting or refusing to grant a temporary injunction or overruling a motion to
dissolve a temporary injunction; (5) denial of a motion for summary judgment that is based on an
assertion of immunity by an individual who is an officer or employee of the state, or a political
subdivision of the state; (6) denial of a motion for summary judgment based in whole or in part on
a claim against or defense by a member of the electronic or print media that arises under the First
Amendment to the United States Constitution, Article I, § 8 of the Texas Constitution, or Chapter 73
of the Civil Practice and Remedies Code; (7) granting or denying a special appearance under Rule
120a except in a suit brought under the Family Code; (8) granting or denying a plea to the
jurisdiction by a governmental unit; (9) denying all or part of the relief sought by a motion under
Section 74.351(b); and (10) granting relief sought by a motion under Section 74.351(l). Tex.Civ.
Prac.&Rem.Code Ann. § 51.014(a).
The trial court has not entered a final judgment. Further, Section 51.014 does not authorize
the interlocutory appeal of a transfer order. Therefore, we dismiss this interlocutory appeal for want
of jurisdiction.
July 28, 2005
ANN CRAWFORD McCLURE, Justice
Before Panel No. 5
Barajas, C.J., McClure, and Parks, JJ.
Parks, J. (sitting by assignment) | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1908439/ | 42 B.R. 232 (1984)
In re GENERAL OFFICE FURNITURE WHOLESALERS, INC., Debtor.
GENERAL OFFICE FURNITURE WHOLESALERS, INC., Plaintiff,
v.
U.S. FURNITURE INDUSTRIES, INC., Defendant.
Bankruptcy No. 82-00457-A, Adv. No. 82-0481-A.
United States Bankruptcy Court, E.D. Virginia, Alexandria Division.
August 17, 1984.
*233 Merrill Cohen, Bethesda, Md., for debtor.
Edward F. Rodriguez, Jr., Boothe, Prichard & Dudley, Fairfax, Va., for defendant.
Richard J. Stahl, Stahl & Buck, P.C., Annandale, Va., trustee in bankruptcy.
MEMORANDUM OPINION
MARTIN V.B. BOSTETTER, Jr., Bankruptcy Judge.
An involuntary petition for relief under Chapter 7 of the Bankruptcy Reform Act of 1978 ("the Code") was filed against the debtor, General Office Furniture Wholesalers, Inc., ("debtor") on April 8, 1982.[1] A Complaint to Recover Preferential Payments was filed December 6, 1982. The complaint was amended at the December 12, 1983 trial to include recovery of post-petition payments. The controversy is over eight payments made by debtor to U.S. Furniture Industries, Inc. ("USFI") against the latter's invoices for USFI merchandise sold by debtor to the federal government.[2] The payments were made between January 27, 1982 and April 20, 1982 and total $171,716.30. The issue before the Court is whether debtor's payments were made using "property of the debtor." 11 U.S.C. § 547(b).
Debtor was in the furniture wholesaling business, selling both to commercial clients and, through the General Services Administration ("GSA"), to federal government agencies. Defendant in this action, USFI, is a furniture manufacturer. Debtor began selling USFI merchandise to the government when debtor acquired on April 9, 1979, Contract Distributors, Inc. ("CDI"), through which USFI had theretofore sold its merchandise to the government. The history of CDI's relationship with USFI is a necessary background to understanding the present circumstances. That relationship was spelled out in a February 8, 1979 Memorandum of Agreement which the presidents of both companies signed. See Appendix. According to the testimony of an officer of USFI who attended the meeting at which the agreement was produced, the agreement was prompted by the upcoming merger of CDI into debtor and a desire of the parties to continue the same arrangement post-merger.
CDI and USFI conducted their financial transactions through a "lockbox" account managed by a bank in High Point, North Carolina. GSA payments for USFI merchandise sold by CDI were made into this account, whereupon the bank would draw two checks on the account. The checks represented the moneys due USFI for the merchandise and CDI for selling the furniture. Authorized signatories for CDI and USFI would exchange the checks, countersigning each one. CDI then would keep the check on which it was payee and USFI would keep the check on which USFI was payee. This arrangement enabled USFI to secure payment to itself upon GSA's payment to CDI.
Undisputed evidence was adduced at trial that in February 1979, at a meeting between USFI, CDI, and the debtor, the president of USFI advised debtor that if debtor wanted to do business with USFI, debtor would have to agree to the lockbox account. This procedure differed from debtor's usual practice of factoring its accounts receivable by assigning them to Lazere Financial Corporation ("Lazere"). Under the factoring process, debtor would assign an *234 account receivable to Lazere and ship the order to the customer. Debtor would also invoice the customer through Lazere. The foregoing arrangement allowed debtor to draw from Lazere up to 85% of the face value of the invoice. Customer payments were sent either directly to Lazere or first to debtor and then by debtor to Lazere. USFI, however, did not want debtor to factor any accounts receivable generated from USFI merchandise. Debtor's agreement to abide by USFI's wishes is evidenced by a February 16, 1979 letter to USFI's president from debtor's principal who had attended the February meeting between USFI, CDI, and debtor:
As per our discussion, I am reiterating our commitment that we will not factor any government receivables for merchandise manufactured by United States Furniture Industries that we or any of our subsideries [sic] hold under a GSA contract.
Debtor, therefore, established an account at Virginia National Bank ("VNB") exclusively for payments received on debtor's non-assigned, non-factored, USFI-generated accounts receivable. The direct testimony of an officer of debtor described the operation as being the same as that which had existed between USFI and CDI.
Debtor, however, sometimes received a single GSA payment covering both USFI and non-USFI merchandise. In such cases, debtor would deposit the lump payment in the non-assigned account and then draw a separate check, over its signature only, in order to transfer the non-USFI portion of the payment to Lazere.
The complaint lists as preferential a total of twelve payments made by debtor to USFI. USFI concedes that four of the twelve, made with checks drawn on a "sole account" of debtor pursuant to debtor's "outright purchases" from USFI, were preferential. The remaining eight payments were made with checks drawn on the non-assigned account pursuant to debtor's sales of USFI merchandise to the government and GSA's subsequent payment to debtor for that merchandise. With respect to seven of the eight payments, trustee proceeds under section 547 of the Code, which allows avoidance of "any transfer of property of the debtor" if all of five enumerated conditions are met. 11 U.S.C. § 547(b); see In re General Office Furniture Wholesalers, Inc., 37 B.R. 180, 182 (Bankr.E.D.Va.1984). With respect to the eighth payment, trustee asserts as authority section 549 of the Code, which deals with postpetition transactions and allows avoidance of "a transfer of property of the estate" if two conditions are met, subject to exceptions. 11 U.S.C. § 549(a). The seven pre-petition payments sought to be avoided under section 547 will be addressed first.
The preamble to section 547(b) embodies two conditions for avoiding a payment: that the payment constitute a "transfer" and that the transfer be of "property of the debtor." The Code defines "transfer" as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property." 11 U.S.C. § 101(41). USFI does not dispute that debtor's payments, made by check from the non-assigned account, constituted "transfers." Thus, the issue in the case at bar is whether the funds drawn from the non-assigned account to make the seven payments sought to be avoided were "property of the debtor."
Trustee argues for debtor that (1) debtor's role in the billing and receipt process giving rise to the non-assigned account funds, and particularly (2) debtor's access to and control over the funds, make the funds property of the debtor. USFI, on the other hand, characterizes debtor's payments as improper distributions of USFI's share of the proceeds from furniture sales to GSA. USFI maintains that debtor had no rights to the funds except to the portion representing debtor's commission.
The Code does not define "property" as used in section 547(b), "but the various things which constitute the estate of a debtor are enumerated in section 541." 4 Collier on Bankruptcy, ¶ 547.08[2], at 547-32 (15th ed. 1984). Section 541's definition *235 of property of the debtor's estate is useful to determine what constitutes property of the debtor under section 547 for two reasons: (1) as sections 541(a) and 301 indicate, property of the debtor is property of the estate upon filing of the bankruptcy petition subject to any exemptions claimed under section 522; and (2) the principle of section 547 is to avoid "only those preferential transfers that result in a depletion of the debtor's estate and that do not fall within one of the exceptions listed in section 547(c)." 4 Collier on Bankruptcy, ¶ 547.21, at 547-79 to 547-85 (15th ed. 1984) (emphasis added).
Section 541(a) of the Code defines a debtor's estate broadly to include "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1). This definition presents the problem of defining an "interest" in property. "[T]he existence and nature of the debtor's interest in property . . . are determined by non-bankruptcy law. Neither the Code nor the Bankruptcy Act provides any rules for determining whether the debtor has an interest in property." 4 Collier on Bankruptcy, ¶ 541.02[1], at 541-10 (15th ed. 1984). The Code of Virginia is silent regarding the issue before the Court.[3] However, "[w]here parties contract lawfully and their contract is free from ambiguity or doubt, the agreement between them furnishes the law which governs them." Russell Co. v. Carroll, 194 Va. 699, 703, 74 S.E.2d 685 (1953); Mercer v. South Atlantic Life Ins. Co., 111 Va. 699, 702, 69 S.E. 961 (1911).
The only direct evidence of the contract between the parties with respect to the non-assigned VNB account is that introduced into evidence as the "signature card" for the account. The Title of Account is listed as "Contract DistributorsA Division of General Office Furniture Wholesalers, Inc." and the account address and telephone number is that of debtor's business office. The card bears three signatures those of Stanley R. Taylor, Arthur Hirst, and Lucy Pattersonin the spaces denominated president, vice president, and secretary, respectively. Those individuals were, in fact, the president, vice president, and treasurer of defendant USFI. The card is dated "4-19-79."
The card does not indicate whether the three signatories were the only authorized signatories for the account or how many of the three signatures were needed in order to draw on the account. On the face of the arrangement between the bank and the parties, therefore, the evidence as to account ownership is completely ambiguous. The account was in the name of one business while the account signatories were principals of another.
However, "when ambiguous contractual provisions are at issue, extrinsic evidence is available to discern the intention of the parties." Dart Drug Corp. v. Nicholakos, 221 Va. 989, 993, 277 S.E.2d 155 (1981). Another writing was introduced at trial to evidence the intent of the parties regarding ownership of the non-assigned VNB account and specifically the funds therein. One of debtor's vice presidents clarified debtor's understanding of the financial arrangement between debtor and USFI in an October 7, 1980 letter to USFI's vice president, reading in pertinent part as follows:
The original agreement between USFI and Contract Distributors was [that] the government's payment address was the bank in High Point [the lockbox account] and when USFI was paid, Contract Distributors *236 was paid. When Contract Distributors was purchased by GOFW, at a meeting in his office Mr. Taylor [USFI's president] reiterated the same conditions and further reiterated that we were to NEVER factor or finance any sale of USFI products to the government. GSA contract problems necessitated a change to a bank up here, but the basic arrangement has remained unchanged.
(Emphasis in original.) The "basic arrangement" included that described above as the High Point, North Carolina "lockbox" account whereby the funds, before being made available to any one party, were divided to represent those moneys due USFI for the merchandise and those moneys due debtor for selling the goods. Most importantly, the "basic arrangement" included the provisions of the February 8, 1979 Memorandum of Agreement between USFI and Contract Distributors, among which was the condition that "all funds in connection [with GSA payments to the account] are the sole property of U.S.F.I., save and except the commissions that are due CONTRACT DISTRIBUTORS".[4] Under this provision, debtor's payments to USFI cannot be considered transfers of "property of the debtor".
Trustee argues, however, that the parties' conduct reflected their intent and should be held to constitute a modification of: (1) the lockbox arrangement; (2) the February 8, 1979 Memorandum of Agreement between USFI and CDI; and (3) the understanding expressed in debtor's October 7, 1980 letter to USFI.[5] USFI insists that a variation of the lockbox arrangement was in "full force and effect" between USFI and debtor and that the February 8, 1979 Memorandum of Agreement evidenced the intent of the parties respecting ownership of the funds in the non-assigned account.
It is well established in Virginia case law that "[w]hen the terms of an agreement are doubtful or uncertain, the interpretation placed thereon by the parties themselves is entitled to great weight and will be followed if that may be done without violating applicable legal principles." American Realty Trust v. The Chase Manhattan Bank, 222 Va. 392, 403, 281 S.E.2d 825 (1981), quoting Dart Drug v. Nicholakos, 221 Va. 989, 995, 277 S.E.2d 155 (1981). While a written contract may be modified by subsequent conduct of the parties relating to the same subject matter, modification requires the assent of all parties to the contract and may not be unilateral. See Carlucci v. Duck's Real Estate, Inc., 220 Va. 164, 167, 257 S.E.2d 763 (1979) (per curiam); 4B M.J. Contracts, § 54, at 82-83 (Repl. vol. 1974); 17 Am.Jur.2d, Contracts, § 465 (1964). Furthermore,
The party asserting a modification of a contract carries the burden of proof and he must demonstrate that the minds of the parties definitely met on the alteration. It is not sufficient to show that the adverse party failed to protest the change. But where there is a duty to object or protest the obvious ignoring of specific provisions of a contract, such silence may result in the waiver of one's rights under the provision.
4B M.J., Contracts, § 54, at 84-85 (Repl. vol. 1974) (footnotes omitted); see also Geoghegan Sons & Co. v. Arbuckle Bros., 139 Va. 92, 102-04, 123 S.E. 387 (1924); American Manganese Co. v. Virginia Manganese Co., 91 Va. 272, 283-84, 21 S.E. 466 (1895); 17 Am.Jur.2d, Contracts, § 465, at 935 (1964). Trustee does not suggest that the parties' minds met on a modified agreement under which debtor owned *237 the account and the funds therein. Therefore, to prevail trustee must establish not only that USFI failed to protest the asserted modification but also that USFI had a duty to object to or protest an "obvious" ignoring of specific contract provisions.
Trustee presents several circumstances to demonstrate a modified arrangement: debtor, itself, deposited GSA's payments into the non-assigned account; debtor, itself, drew the checks on the account; there was no requirement that at least one signature on a check be that of a USFI representative; and debtor could, and did, draw checks on the account without USFI's countersignature and deposit such checks in debtor's general operating account. These circumstances are not persuasive in view of trustee's burden of showing debtor's "obvious" ignoring of contract provisions. An examination of debtor's representations and actions reveals that USFI could not have been put on notice thereby.
Debtor never suggested to USFI that changing from the High Point, North Carolina lockbox account to the VNB non-assigned account contravened the February 8, 1979 Memorandum of Agreement provision that all funds in connection with USFI merchandise were the sole property of USFI save and except debtor's commissions. To the contrary, debtor had requested the change in accounts because its contract negotiators were in Virginia and debtor apparently concluded that having a payment schedule in North Carolina as well as in Virginia would detract from debtor's credibility in the eyes of GSA. In its October 7, 1980 letter to USFI, debtor accepted no responsibility for the change in accounts by stating that "GSA contract problems necessitated a change to a bank up here." Not only were debtor's express reasons for changing accounts insufficient to put USFI on notice of any modifications but debtor went so far as to reassure USFI that despite the change in accounts, "the basic arrangement has remained unchanged."
At all times, debtor's actions in connection with the VNB non-assigned account were consistent with the October 7, 1980 letter. In fact, debtor's actions reflect active compliance with the February 8, 1979 Memorandum of Agreement and the principle of the lockbox arrangement. Although a High Point, North Carolina bank previously had managed the lockbox account, debtor later managed the VNB non-assigned account as though it were the lockbox account. Following the established procedure, debtor would draw two checks on the account representing the moneys due USFI for the merchandise and due debtor for making the sale. The checks were then sent to USFI for its countersignature. USFI kept the check payable to itself and returned to debtor the check on which debtor was payee.
Trustee notes that debtor was receiving GSA payments and making deposits to the non-assigned account rather than such payments being made directly into the account under the lockbox arrangement. Debtor's receipt of payments was to be expected insofar as it was pursuant to payment instructions debtor gave to GSA. More significant is the manner in which debtor acted upon receipt of a GSA payment belonging in the non-assigned account. Debtor would deposit such a payment in the non-assigned account except to the extent, if any, that the payment was for non-USFI merchandise and should more properly go to Lazere.
Trustee notes also that debtor drew checks on the non-assigned account without obtaining USFI's countersignature and deposited those checks in debtor's general operating account. The evidence demonstrates, however, that debtor was not by such action asserting ownership of the non-assigned account funds but, to the contrary, carefully segregating funds generated by sales of USFI merchandise from all other funds. Funds drawn from the non-assigned account over debtor's signature alone and deposited in debtor's general operating account were portions of GSA payments covering non-USFI merchandise. In fact, trustee's own evidence demonstrates that no creditor, other than USFI, ever *238 received a check from the non-assigned account.
Trustee notes, however, that nothing restricted debtor from depositing GSA payments for USFI merchandise in debtor's general operating account and using those funds to pay other creditors. This circumstance and the fact that debtor never took advantage of it certainly support the original February 8, 1979 Memorandum of Agreement rather than any asserted modification of that agreement. Debtor took pains to comply with the provisions of the agreement as closely as possible. Trustee cannot now argue that because debtor might have gotten away with less compliance, debtor should not be bound by the agreement.
The evidence does not justify, legally or equitably, reading a modification into the clear provisions of the February 8, 1979 Memorandum of Agreement between USFI and CDI, the company debtor acquired. The funds in the non-assigned account were "the sole property of USFI, save and except the commissions that are due [debtor]." Trustee does not dispute that the payments at issue were due USFI rather than debtor. Therefore, the funds with which the payments were made were not property of the debtor within the meaning of § 547(b) and the payments may not be avoided.
The Court's findings and conclusion regarding trustee's claim under section 547 also dispose of the claim under section 549. The trustee may avoid postpetition transfers only of "property of the estate." 11 U.S.C. § 549(a). "Property of the estate" is defined, inter alia, as property in which the debtor has "legal or equitable interests . . . as of the commencement of the case." 11 U.S.C. § 541(a)(1). As has been demonstrated, debtor had no such interest in the fund from which the postpetition payment at issue was made. Trustee has therefore failed to meet an essential requirement for avoiding such payment.
Thus, as a result of the foregoing, the relief prayed for in the complaint to recover preferential payments must be denied in that the funds sought to be recovered were not property of the debtor, nor of the debtor's estate, as required by sections 547(b) and 549(a) of the Code.
An appropriate Order will enter.
APPENDIX TO MEMORANDUM OPINION
The Memorandum of Agreement between U.S. Furniture Industries, Inc. and Contract Distributors, Inc. reads, in pertinent part:
WITNESSETH:
WHEREAS U.S.F.I. has in the past and will continue to do so in the future sell its merchandise to GENERAL SERVICES ADMINISTRATION (GSA), by and through CONTRACT DISTRIBUTORS; and
WHEREAS CONTRACT DISTRIBUTORS is agent for U.S.F.I., and as such, bills G.S.A. for U.S.F.I.'s merchandise directly;
WHEREAS CONTRACT DISTRIBUTORS is at all times agent for U.S.F.I.;
NOW THEREFORE, the parties do mutually agree:
1. On all merchandise delivered by U.S.F.I. on billings to G.S.A., title to said merchandise shall remain at all times in U.S.F.I.; and
2. CONTRACT DISTRIBUTORS is at all times, in the handling of all sales to G.S.A. of U.S.F.I.'s merchandise, agent for U.S.F.I., and it is not intended between the parties or otherwise that CONTRACT DISTRIBUTORS is the owner of the merchandise delivered by U.S.F.I. for G.S.A.; and
3. CONTRACT DISTRIBUTORS acts solely as agent for U.S.F.I. on all sales to G.S.A.; and
4. Heretofore and the same shall continue, G.S.A. shall make payment on all such merchandise furnished by U.S.F.I. and billed under the name of CONTRACT DISTRIBUTORS to High Point Bank and Trust Company, High Point, North Carolina, in the name of CONTRACT DISTRIBUTORS; *239 but that all funds in connection wherewith are the sole property of U.S.F.I., save and except the commissions that are due CONTRACT DISTRIBUTORS. U.S.F.I. shall, from said account, pay itself the amount due U.S.F.I. and the remainder of each payment by G.S.A. represents commissions due CONTRACT DISTRIBUTORS and are to be retained by CONTRACT DISTRIBUTORS for that purpose and for that purpose only; and
5. This arrangement may not be changed orally and shall continue until modified in writing by both U.S.F.I. and CONTRACT DISTRIBUTORS.
NOTES
[1] On April 21, 1982, the Court entered an Order for Relief nunc pro tunc and granted debtor's motion to convert the case to a case under Chapter 11 of the Code. On February 15, 1983, upon debtor's motion, the Court reconverted the case to a case under Chapter 7. A Trustee in Bankruptcy has since pursued this action.
[2] The complaint lists twelve payments as being preferential. USFI concedes that four payments were preferential for reasons which will be discussed.
[3] The Virginia Banking Act does address multiple-party account ownership. 1950 Code of Virginia § 6.1-125.1 to 6.1-125.16 (Repl. vol. 1978). At first glance, the statute would appear to solve the issue before the Court by providing that "[a] joint account belongs . . . to the parties in proportion to the net contributions by each to the sums on deposit." Id. at § 6.1-125.3. Initially, however, "party" is defined as a person who has a right to payment from a multiple-party account. Id. at 6.1-125.1(7): Secondly, "multiple-party account" is defined to exclude "accounts established for deposit of funds of a partnership, joint venture or other association for business purposes." Id. at 6.1-125.1(5). The Virginia statute, therefore, does not apply to the non-assigned account with which we are concerned.
[4] It should be noted that when the merger between debtor and CDI became effective, debtor became liable for all of CDI's liabilities and obligations, including those memorialized in the February 8, 1979 Memorandum of Agreement between CDI and USFI. 1950 Code of Virginia § 13.1-74(e) (Repl. vol. 1978).
[5] The trustee argues that the burden of persuasion lies with USFI on the "property of the debtor" element of § 547(b). The burden of persuasion on this element, as with all elements of an action to avoid a preferential transfer under § 547(b), is on the trustee. 4 Collier on Bankruptcy, ¶ 547.55, at 547-160.17 to 547-164 (15th ed. 1984). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2594796/ | 351 F. Supp. 1087 (1972)
ECON, INC., an Illinois corporation, for and on behalf of Itself and all others similarly situated as a common class, Plaintiff,
v.
ILLINOIS BELL TELEPHONE COMPANY, a corporate public utility chartered by the State of Illinois, Defendant-Third Party Plaintiff,
v.
UNITED STATES of America, Third-Party Defendant.
No. 72 C 744.
United States District Court, N. D. Illinois, E. D.
November 27, 1972.
James R. Madler, Chicago, Ill., for plaintiff.
Robert V. R. Dalenberg, Chicago, Ill., for defendant-third-party plaintiff.
S. R. Waxman, Asst. U. S. Atty., Chicago, Ill., for third-party defendant.
MEMORANDUM OF DECISION
TONE, District Judge.
This action was filed by the plaintiff, Econ, Inc., against the defendant, Illinois Bell Telephone Company in the Circuit Court of Cook County, Illinois. Illinois Bell removed the case to this Court and joined the United States as a third party defendant. The plaintiff asserts that it is a common carrier and seeks, on its own behalf and as representative of a class of all other Illinois common carriers, the return of monies collected by the defendant and remitted to the United States as a federal excise tax on certain *1088 telephonic communications. Plaintiff alleges that there is no statutory authority for collecting an excise tax from common carriers who make long distance calls and calls of two or more units of service.
The United States has moved to dismiss the complaint on the ground that this Court lacks subject matter jurisdiction of the controversy, and Illinois Bell has answered the complaint with the same contention.
At issue in the case is the proper construction of Sections 4251-4253 of the Internal Revenue Code. Section 4251 imposes a federal excise tax on the charges for telephone service, defined and subject to exemptions as follows:
"§ 4252. Definitions.
. . . . . .
"(b) Toll telephone service.For purposes of this subchapter, the term `toll telephone service' means
"(1) a telephonic quality communication for which (A) there is a toll charge which varies in amount with the distance and elapsed transmission time of each individual communication and (B) the charge is paid within the United States, and
"(2) a service which entitles the subscriber, upon payment of a periodic charge (determined as a flat amount or upon the basis of total elapsed transmission time), to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with this service is located."
"§ 4253. Exemptions.
. . . . . .
"(f) Common carriers and communications companies.No tax shall be imposed under section 4251 on the amount paid for any toll telephone service described in section 4252(b) (2) to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such."
Econ's claim is based upon the contention that the service provided to it falls within Section 4252(b)(2) rather than 4252(b)(1) and is therefore exempt from taxation. The telephone company and the Government argue to the contrary.
The defendants say that the plaintiff primarily seeks a refund of a federal tax, with incidental injunctive and declaratory relief. They argue, and plaintiff appears to concede in its reply brief, that plaintiff cannot sue for a tax refund in either a federal or a state court without first filing a claim for a refund with the Internal Revenue Service, 26 U.S.C. § 7422. There is no allegation in the complaint that a claim for refund was filed. If this is indeed a suit to recover a federal tax refund, the absence of such an allegation is a fatal jurisdictional defect. 26 U.S.C. § 7422 (a); England v. United States, 261 F.2d 455 (7th Cir. 1958); Agron v. Illinois Bell Telephone Co., No. 67 C 2041, decided August 4, 1969 (N.D.Ill.). Moreover, a state court has no jurisdiction to entertain an action to recover federal tax payments, because the United States has waived its sovereign immunity from suit only for tax refund actions brought in the federal district courts or the Court of Claims. 26 U.S.C. § 7422, 28 U.S.C. § 1346. Removal from the state court does not cure the jurisdictional defect. Minnesota v. United States, 305 U.S. 382, 388, 59 S. Ct. 292, 83 L. Ed. 235 (1939).
Plaintiff contends, however, that this action seeks not the refund of a federal tax but the recovery of "an exaction merely in the guise of a tax" and an injunction against future "exactions" of this kind. Plaintiff relies on Enochs v. Williams Packing Co., 370 U.S. 1, 82 S. Ct. 1125, 8 L. Ed. 2d 292 (1962), which holds that where, "under the most liberal *1089 view of the law and the facts, the United States cannot establish its claim" that the monies paid to the United States constitute a valid tax, and where plaintiff has no adequate remedy at law, the provision proscribing suits for injunctive relief restraining the collection of federal taxes, 26 U.S.C. § 7421 (a), is inapplicable. We need not reach the question whether the Enochs rule permits recovery of past "exactions" in addition to an injunction. The Enochs case has no application here because it cannot be said "that, under the most liberal view of the law and the facts" the exaction was not authorized by the Internal Revenue Code. Rather, it appears that the defendants may very well establish their claim that 26 U.S.C. § 4253(f) does not exempt common carriers from the federal excise tax on the telephone service in question, which is ordinary long distance calls and calls of two or more units of service. Indeed, without attempting to decide finally the substantive question of statutory construction, the ordinary, common-sense meaning of the words of the statute seem to lend support to the Government's interpretation. At any rate, the payments in question here were clearly collected by Illinois Bell and remitted to the United States in good faith as excise taxes. The issue in the case is whether they were properly collected as excise taxes, and there is enough basis in the statute to assume that their collection may have been proper as excise taxes to make this action essentially a suit for a federal tax refund and not a suit for recovery of "an exaction merely in the guise of a tax." The case must therefore be governed by the jurisdictional requirement of 26 U.S. C. § 7422. If the plaintiff wishes an authoritative determination by a federal court of his asserted exemption, he may have one by filing a claim for a refund with the Internal Revenue Service and, upon its denial, instituting a suit in the district court against the United States directly as the real party in interest. Agron v. Illinois Bell Telephone Co., supra, 325 F. Supp. 487, 488 (N.D.Ill.1970), rev'd on other grounds, 449 F.2d 906 (7th Cir. 1971).
The motion to dismiss is granted and the cause is dismissed for lack of subject matter jurisdiction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2355267/ | 529 F. Supp. 1234 (1982)
CITY OF NEW ORLEANS, Through NEW ORLEANS AVIATION BOARD
v.
VICON, INC., et als.
Civ. A. Nos. 79-4878, 79-4987, 80-281 and 80-3409.
United States District Court, E. D. Louisiana.
January 4, 1982.
*1235 *1236 Michael R. Fontham, New Orleans, La., for plaintiff.
Wm. H. Reinhardt, Jr., Metairie, La., Harry Pastuszek, Jos. Ward, Dale Poindexter, Harvey C. Koch, Henry L. Klein, Kurt S. Blankenship, New Orleans, La., Bernard L. Balkin, Kansas City, Mo., for defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
BEER, District Judge.
To the extent that the following findings of fact contain conclusions of law, or the conclusions of law contain findings of fact, they are so adopted.
Findings of Fact
1. These suits involve claims brought by the City of New Orleans acting through New Orleans Aviation Board ("NOAB"). Basically, the claims relate to certain asphalt overlay projects performed at separate but closely related times on the North-South and East-West runways at New Orleans International Airport. The North-South project began in 1976 and continued through September, 1977. The East-West project began in late 1977 and continued into November, 1978.
2. NOAB initially sued Vicon, Inc. ("Vicon"), the contractor on both projects, and its surety, Reliance Insurance Company ("Reliance"), in state court. Those proceedings were removed to this court in December, 1979, and January, 1980.
3. Thomas B. Catchings and Associates, succeeded by Laurence L. Lambert and Associates, and, thereafter, succeeded by Laurence L. Lambert, C. E. ("Lambert"), were the engineering firms successively (and continuously) *1237 engaged to perform services as project engineer on both projects.
4. Delta Testing and Inspection, Inc. ("Delta") designed the so-called "job mix" with respect to the asphalt and was generally responsible for performing various testing services and functions on both projects.
5. Southland Oil Company, Inc. ("Southland") supplied the liquid asphalt used by Vicon in the preparation of the asphalt mix on both projects.
6. During the course of this litigation, various insurers were added as defendants. These include Northbrook Insurance Company ("Northbrook"), the insurer of Lambert, Independent Laboratories Assurance Company, Ltd. ("Independent"), the insurer of Delta, and Fidelity & Casualty of New York ("Fidelity"), the insurer of Southland.
7. The Federal Aviation Administration ("FAA"), which provided grant funds to finance portions of each runway project pursuant to the Airport and Airway Development Act of 1970, 49 U.S.C. § 1701, et seq., was sued as a third party defendant by the original defendants.
8. In September, 1976, the City advertised for bids for the restoration of the pavement on the North-South runway. In conjunction with this action, Lambert was retained as the engineer on the project under a contract between Lambert and the NOAB. Detailed plans and specifications were prepared by the engineer consistent with current FAA specifications. These were then made available to bidders and ultimately became part of the construction contract. Vicon was the successful bidder for a proposed price of $1,601,024.13 based in part on estimates of the quantities of asphalt materials to be supplied. The contract between Vicon and NOAB was executed October 22, 1976. Delta was appointed the testing laboratory for the project under the provisions of a separate contractual agreement with NOAB.
9. In September, 1977, NOAB accepted bids for the restoration of the pavement on the East-West runway. In conjunction with this action, Lambert was retained as the engineer on the project under a contract between Lambert and NOAB. Detailed plans and specifications were prepared by the engineer consistent with current FAA specifications. These were then made available to bidders and ultimately became part of the construction contract. Vicon was the successful bidder for a proposed price of $3,378,545.89 based in part on estimates of the quantities of asphalt materials to be supplied. The contract between Vicon and NOAB was executed September 13, 1977. Delta was appointed the testing laboratory for the project under the provisions of a separate contractual agreement with NOAB.
10. Reliance provided performance and payment bonds in behalf of Vicon on the North-South and East-West runway projects. Those bonds were executed as integral parts of the contracts and were at risk in the amounts provided for in the contracts.
11. On the North-South runway job, the plans and specifications called for the placement of an asphalt base course, an asphalt wearing course and a covering porous friction course. On the East-West runway, a base course and wearing course were specified. On both jobs, the liquid asphalt that was specified was furnished by Southland.
12. Premature failures occurred on both the North-South and East-West runways which rendered the runways unfit to provide the service required under applicable safety regulations and considerations. The failure on each runway became apparent shortly after the acceptance of the jobs. Although failures occurred on both the runways, the mechanisms by which the runways failed were, in some ways, different. Failures occurred primarily in the wearing courses or P-401 layer of each runway.
13. The porous friction course ("pfc") was the top layer of asphalt mixture placed by Vicon on the North-South runway. It was designed to provide traction for takeoffs and landings and to facilitate the runoff of rainfall. Immediately after the completion of the North-South runway job, problems developed in the pfc. When airplanes *1238 landed on the runway, aggregate in the pfc would be dislodged by the airplane wheels and created a dangerous condition to jet aircraft. This failure of the aggregate to remain part of the pavement could be described as "ravelling," a situation in which the aggregate becomes separated from the asphalt. This loose aggregate on the runway created a hazard because the loose material could be ingested into a jet engine. In an attempt to correct this problem, an emulsion was laid on a portion of the runway in October, 1977. The problem of aggregate pick-up subsided sometime after the emulsion was placed on the pfc, although the lessening of the problem was due, in part, to the onset of cooler weather.
14. The North-South runway developed further problems in the summer of 1978. When aircraft took off from the runway, the blasts of jet engines were responsible for blowing quantities of asphalt out of the runway, leaving potholes several inches deep. These holes began to appear in July, 1978, and their appearance increased in frequency thereafter. In addition, depressions began to appear in the pfc, evidencing a lack of cohesion in the asphalt mixture below the surface. It was discovered that sections of the wearing course (below the pfc) had deteriorated to the point where the consistency of the wearing course was that of loose aggregate held down only because of the presence of the porous friction course.
15. The material below the pfc was wet or damp, and it was essentially confirmed that "stripping," a process in which the asphalt is stripped from the aggregate in the presence of water, had occurred. The NOAB was required, thereupon, to institute daily inspection and repair operations because of the frequent appearance of depressions and potholes on the runway.
16. Very soon after the East-West runway was completed and accepted, "ravelling" began to occur on that runway. Loose rocks broke apart from the asphalt pavement in the trafficked areas. More or less continuous sweeping operations became necessary. Thus, a studied consideration of the reasons for the apparent deterioration condition of the asphalt was required almost immediately after it went into service.
17. The asphalt on the East-West runway appeared brown, rather than black. Aggregate was ravelling out of the surface. The ravelling was accelerated at joints between lanes and the joints could be observed as deteriorating along the entire length of the runway. Foreign material, including sticks, roots, pieces of metal, bolts, a beer can, and clay balls ravelled out of the asphalt. Small holes developed where clay balls were washed away by rain.
18. Asphalt concrete is a composition of various mineral aggregates and asphalt cement. The aggregate includes gravel, crushed rock or similar sized material, coarse and fine sand, and "filler" material. These materials are mixed in specific proportions and heated in an asphalt plant to a specified temperature. The asphalt mixture is thereafter conveyed to the job site, where it is laid with the use of spreaders in lanes of designated width and thickness and compacted with the use of rollers.
19. The specifications permitted Vicon to select certain of the materials to be included in the asphalt mixture, so long as the general requirements of the specifications were complied with. Vicon chose to use a Louisiana "chert" gravel in the mix. In addition, the specifications generally mandated the use of asphalt cement of a certain grade, but permitted the contractor to obtain the asphalt cement from any source so long as it complied with the minimum requirements of the specifications. Vicon purchased the asphalt cement that was incorporated into the mixture from Southland.
20. The various materials selected by the contractor were to be submitted to the testing laboratory, Delta, for testing. The results of these tests were to be reported to the contractor, the engineer, the NOAB, and the FAA. The tests were required to determine whether the runway materials satisfied the minimum requirements of the specifications.
*1239 21. The specifications on both jobs provided the boundaries of the proportions of the materials that could be specified in the job mix design. As to any size aggregate or the proportion of liquid asphalt, the engineer and testing laboratory were permitted to choose a proportion falling within these boundaries. Once percentages were established in the job mix design, the specifications required that the asphalt mix be produced in those percentages, but allowed deviations according to "tolerances" established in the specifications.
22. The bid documents and specifications were changed to allow the substitution of a drum dryer mixer rather than a batch plant for mixing the asphalt as long as the results were consistent with the job specifications. The same arrangement covered the East-West runway job. In a drum dryer mixer, the process of heating, drying and mixing the aggregates occurs simultaneously with the introduction and mixing of the liquid asphalt. The aggregates are transported on belts, in appropriate proportions, to an entry point at the head of a large turning drum. Flites within the drum lift the aggregates and drop them through a flame that shoots into the drum from a burner that is located at the head. Asphalt is introduced into the mixture at a point somewhat removed from the flame through a pipe that enters the drum. The asphalt and aggregates are mixed in the turning drum, heated to specified temperatures, exit the drum and are conveyed to a storage silo. The mixture remains in the silo until it is dumped into trucks for weighing and transportation to the job site.
23. Vicon obligated itself to perform the work in reasonable conformity with the plans and specifications. The plans and specifications were made a part of the contract. The specifications set forth a number of requirements applicable to the process of mixing and heating the asphalt mixture, which were applicable to batch plants or continuous plants.
24. The mixture was to be of aggregates and asphalt in quantities that complied with the specified tolerances. The mixture was to have no more than .5 per cent moisture content. The aggregate used in the mixture was required to be free from clay balls, organic matter, and other deleterious substances. The pavement was required to be compacted to a specified density and to be of uniform texture. Joints were to be constructed to the same density and texture as other areas of the pavement. Field density tests were to be performed at least twice daily. To ensure that these criteria were satisfied, Vicon provided a guarantee of the work to the NOAB. The guarantee in each contract stated:
ARTICLE 7. GUARANTEE
All work as herein specified and/or as indicated on the plans shall be guaranteed against defects in materials and workmanship for a period of one (1) year, unless otherwise noted, from the date of final acceptance of the work. The Contractor shall, within a reasonable time after receipt of written notice thereof, make good any defects in materials or workmanship which may develop during said one year period, and any damage to other work caused by such defects or the repairing of same, at his own expense and without cost to the owner.
25. Identical contracts were executed between the NOAB and Lambert for engineering services on both runway projects. These contracts set forth the responsibilities of the engineer. Among these requirements was the obligation of Lambert to "(p)repare detailed construction drawings (and) specifications ... based on guides furnished the engineer by the Owner and the FAA...." The specifications were to be prepared using "the application of sound engineering principles with a high degree of economy...." Additionally, in the construction phase of the contract, Lambert was to perform the duties and discharge the responsibilities stated in project specifications after receiving written authorization to proceed with constructions. The specifications, prepared by Lambert using the FAA guide, provided:
50-01 AUTHORITY OF THE ENGINEER. The engineer shall decide any *1240 and all questions which may arise as to the quality and acceptability of materials furnished, work performed, and as to the manner of performance and rate of progress of the work. He shall decide all questions which may arise as to the fulfillment of the contract on the part of the contractor, and the rights of different contractors on the project. The engineer shall determine the amount and quality of the several kinds of work performed and materials furnished which are to be paid for under the contract.
26. Lambert had the authority and the responsibility to determine the compliance of the material with the plans and specifications. He could accept or reject the material. He was required to determine the acceptable quantities of work completed by the contractor based on measurements taken by the engineer or his assistants. The engineer could require the removal and replacement of any pavement not conforming to the specifications. All material not in conformity with the specifications was to be deemed unacceptable and removed unless the engineer determined them to be acceptable, documented his determination and recommended that acceptance provide for an adjustment in the contract price pertaining to the affected portion.
27. The testing laboratory was responsible for the preparation of the job mix designs, testing of raw materials, and testing of the asphalt mixture produced at the plant. Delta was obligated to test and record the temperature of the material in selected trucks leaving the plant and going to the job site. Samples of the material were to be taken from various trucks and analyzed in an "extraction test" to determine whether the percentage composition of the ingredients was within tolerance. "Briquettes" were compacted under a specified procedure known as the Marshall method in the plant laboratory. Tests were run on these briquettes, including a specific gravity test to determine the densities that could be achieved with the mix. Field cores taken from the job site were tested for density and compared to the briquettes. The specifications required that these cores have densities at least 98 per cent as great as the compacted briquettes. The other tests performed on the briquettes were designed to determine the compliance of the mix with other specification requirements, such as the percentage of air voids in the compacted briquettes. The test results were to provide a basis for quality control. Written test reports were to be submitted to the engineer and were also to be sent to the contractor, Vicon, the FAA and the NOAB. Neither oral nor written results of the tests were available immediately since several hours were required to complete the tests.
28. Delta's test reports indicated that Vicon essentially achieved the 98 per cent density requirement on the North-South runway and on much of the base course laid on the East-West runway. The reports indicated that an average density of about 96.5 per cent was achieved on the wearing course of the East-West runway. These results misrepresented the densities actually achieved on the runways.
29. To ensure that the test results appeared to comply with the specifications, Vicon employees used a machine to locate spots on the runway from which the field cores were then extracted. Sound construction practice required that these locations should have been selected on a random basis. Vicon employees selected approximately five field cores per day from the areas having the greatest density. If areas of the pavement were designated by representatives of the engineer for coring, and the pavement in these areas appeared to be poorly compacted, those cores were discarded.
30. Delta did not report the results of all of the density tests run on the samples submitted to it. A Delta employee who performed the tests ran density tests on all of the field cores delivered by the contractor, but reported only the two best results. The results of tests run on the remaining samples were discarded. Thus, the reports submitted to the engineer, the FAA and the NOAB did not accurately depict the densities achieved on the pavements.
*1241 31. Density tests run on samples from the pavements by various laboratories during the investigation of the failures established that the densities were lower than reported by Delta. On the East-West runway wearing course, the average density of field samples was 94.2 per cent of the average Marshall briquette density reported by Delta. A number of samples had densities that were less than 90 per cent of the average briquette density. On the North-South runway wearing course, the densities of field samples tested subsequent to the jobs was about 95 per cent.
32. The maximum air void content allowed by the specifications for the briquettes made with the mixture to be used in the wearing courses was exceeded on relatively numerous occasions so that the briquette density values used to determine compliance with the density specification were unreliable.
33. Failure to achieve proper densities was a cause of the serious problems on both runways. Air voids in the pavement promoted weathering and aging, thus permitting the intrusion and passage through the pavement of water. This action decreased the resistance of the pavement to stripping, ravelling and deformation under load. The low densities were a cause of the runway failures.
34. Laboratory tests on field samples showed that the pavement was outside the specifications on the asphalt content of the mixture. With respect to the East-West runway wearing course, a majority of samples were outside the specifications. On the East-West runway base course, a substantial per cent of the field samples were outside the applicable tolerance. On the North-South runway wearing course, about one-third of the field samples were outside the tolerance. On the base course of the North-South runway, about two-thirds of the samples were outside the tolerance.
35. The Delta daily reports also indicated that the tolerances required for the asphalt content were outside of compliance. In this respect, the asphalt mix was, for at least part of the time, out of control.
36. In view of the fact that the asphalt content is an important factor in determining the quality of the mix, non-compliance with the specifications for the asphalt content was a cause of the failures.
37. Ravelling occurred in the joints on the East-West runway. Compaction was poor. Cores could not be taken from the joints due to the fact that the pavement being cored crumbled during the coring operation. These defects were due to faulty joint construction. Faulty joint construction was a part of the runway failures.
38. Roots, sticks, pieces of wire and pieces of metal in excessive amounts formed part of the pavement. Holes developed in the surface of the East-West runway because of the presence of clay balls in the mixture, which were dissolved after being exposed to rain. These factors were a part of the runway failures.
39. The asphalt cement used in the runway jobs was excessively hardened. The material had hardened more than would ordinarily be expected. This excessive hardening is attributable to overheating at the plant. The excessive hardening of the asphalt was a cause of failures of both runways.
40. Unacceptable asphalt mixture was laid when it arrived at the job and was, thereafter, covered over, leaving an unstable base.
41. Louisiana "chert" aggregate was used without an antistripping agent. Chert aggregate has a known tendency to strip. Lambert knew of the need for an antistrip agent, thought but did not check on the fact that antistrip agent had been used, and learned, after the completion of the jobs, that an antistrip agent was not used.
42. A cause of the failure on the North-South runway was excessive moisture in the pavement, leading to the widespread stripping in the layer below the pfc. The reason for the presence of this moisture was the failure of Vicon to remove the moisture from the aggregates in the mixing and heating process. Production from a drum dryer mixer needs to be reduced when the *1242 cold aggregates contain excessive moisture. Vicon failed to reduce the moisture content to comply with the specifications.
43. Vicon's failure to meet the specifications was attributable to inefficiencies in the Vicon plant operation and the mixing process inside the drum dryer mixer.
44. The East-West runway pavement was of an inadequate density, had inadequate asphalt content, an improper percentage of crushed aggregate, and an excessive amount of foreign material. This information was made available to representatives of Reliance and Vicon.
45. Except for the porous friction course on the North-South runway, Vicon was paid for asphalt placed on the runways according to the weight of the materials delivered. Thus, the contract price varied with the quantity of asphalt mixture required to construct the pavements.
46. Vicon obtained overpayments for asphalt from NOAB. The weigh ticket printing machine at the Vicon plant permitted the scale operator to turn the key in a way that caused the machine to print a net weight on the weight ticket that was greater than the actual weight of the asphalt in the truck. Manipulation of the ticket printing machine was routine. Vicon submitted and was paid for tickets for nonexistent deliveries. Representatives of the engineer participated in this scheme.
47. In connection with the scheme noted above, Lambert's representative received cash payments and other gifts.
48. Lambert failed to maintain proper quality control. He knew or should have known of significant and frequent deviations in the asphalt content of the mix and that the asphalt content was out of specification.
49. The unacceptability of the job mix was obvious to Lambert's employees at the laydown site. Yet, no satisfactory action was taken by Lambert to correct the problems. Lambert did not ensure that the joints were properly constructed. The onsite inspectors employed by Lambert were unsatisfactory.
50. Representatives of Lambert were required to choose the location of field cores to be tested for density. They permitted the selection of unrepresentative samples. Lambert did not ensure that the cores were marked to show the locations from which they were extracted.
51. Lambert was obligated to certify the quantities of material delivered to the job site. However, an accurate record of deliveries was not kept. Fraudulent tickets were purposely accepted and approved by the engineer's supervisor. On the East-West runway, Lambert accepted estimates provided by Vicon and approved partial payments for approximately 105,000 tons of asphalt, when the total amount ultimately claimed as delivered by Vicon, including the fraudulent claims, was approximately 92,000 tons.
52. Lambert relied on others rather than properly perform the duties he was employed to perform.
53. Delta was employed to prepare the job mix designs, test the materials to be used in the job, and perform certain tests at the plant site on behalf of the NOAB. Delta was to perform under the supervision of Lambert and was to report to Lambert.
54. Delta employees engaged in testing procedures and reporting procedures that misrepresented the densities achieved on the pavement.
55. Southland products were not a cause of the runway failures.
56. The FAA guidelines did not fully conform to all of the most recent technological advances in asphalt pavement construction but were fully sufficient to produce a well constructed airport runway.
57. Reliance was aware of the deterioration and threatened failure of the North-South and East-West runways at about the same time that Vicon was placed in default. Reliance executed a joint control agreement with Vicon in the fall of 1978 after Vicon experienced financial difficulties. Through an agent, Reliance participated in the Vicon operation on an ongoing basis. Reliance knew of the premature failure on the *1243 North-South runway shortly after it began to occur. Reliance was involved in the operation of Vicon when the East-West runway experienced premature deterioration beginning in November, 1978.
58. By the time that the runway failures became apparent, Reliance was in joint control of Vicon.
Conclusions of Law
1. Removal jurisdiction exists pursuant to 28 U.S.C. § 1441. Original jurisdiction exists as to any claim on a bond required under a law of the United States. 28 U.S.C. § 1352. The bond furnished by Reliance was required under regulations promulgated pursuant to the Airport and Airway Development Act of 1970, 49 U.S.C. § 1701, et seq. Pendent jurisdiction exists as to the other claims asserted by the NOAB. Ancillary jurisdiction exists as to third party claims and cross-claims.
2. Construction contracts are to be performed in a skillful, careful, diligent and good workmanlike manner. Hebert v. Pierrotti, 205 So. 2d 888 (La.App. 2nd Cir. 1968). Failure to comply with these obligations result in contractor liability for damages suffered by the owner. LSA-C.C. arts. 2762, 2769. Article 2762 expressly provides for the liability of a contractor when a building he has constructed is defective. It is applicable to a project for the construction of asphalt pavement. Town of Winnsboro v. Barnard & Burk, Inc., 294 So. 2d 867, 874 (La.App. 2nd Cir.), cert. denied, 295 So. 2d 445 (1974); Murphy Corporation v. Petrochem Maintenance, Inc., 180 So. 2d 716, 721 (La.App. 1st Cir.), reh. denied, (1965).
3. The NOAB has demonstrated by a preponderance of the evidence that the failures occurring on both runway projects were due to defects in the workmanship or materials provided by the contractor. A & M Pest Control Service, Inc. v. Fejta Construction Co., 338 So. 2d 946, 949 (La.App. 4th Cir. 1976). The defective performance of the contractor included its failure to comply with the specifications dealing with the density of the pavement and the asphalt content of the mix, the improper construction of joints, the excessive hardening of the asphalt cement, the contamination of the mix, and failure to adequately remove moisture from the mix.
4. The runway failures occurred within a year of the acceptance of the jobs and were caused by defective materials and workmanship.
5. The failures resulted from faulty workmanship and inadequate materials, not from a defect in the specifications. LSA-R.S. 9:2771, et seq. does not operate to relieve the contractor of liability who is incompetent, negligent, or fails to perform in accordance with the specifications. Pittman Construction Co. v. Board of Levee Comm'r., 169 So. 2d 192 (La.App. 4th Cir. 1964), cert. denied, 247 La. 345, 170 So. 2d 865 (1965). Counsel for Vicon and Reliance refer the court to Pittman Construction Co. v. Housing Authority of New Orleans, 169 So. 2d 122 (La.App. 4th Cir.), reh. denied, (1964), writs refused, (1965). I find this case inapposite to the present factual pattern. The plans provided by the FAA were neither "defective, inadequate or insufficient."
6. When defective materials are involved in a job, the contractor is ordinarily liable. Manzanares v. American International Forest Products, Inc., 389 So. 2d 1142, 1147 (La.App. 3rd Cir. 1980); A & M Pest Control Service, Inc. v. Fejta Construction Co., 338 So. 2d 946, 951 (La.App. 4th Cir. 1976). Moreover, the contractor can be relieved of liability only "where those materials are specifically called for by the plans and where the contractor has no knowledge that the materials are defective." West Bros. of DeRidder, Louisiana, Inc. v. Morgan Roofing Co., 376 So. 2d 345, 348 (La. App. 3rd Cir. 1979). In those cases where the contractor is relieved of liability, the agent or owner specifically selected the faulty materials. Clean Sweep, Inc. v. Delta Container Corporation, 354 So. 2d 1062, 1063 (La.App. 4th Cir. 1978). In this case, Vicon selected the asphalt and the chert aggregates used in the job. To the extent that these materials contributed to the runway *1244 failures, Vicon cannot avoid liability. This conclusion is also mandated by the undertaking of Vicon to guarantee all materials used in the project. New Orleans Unity Society v. Standard Roofing Co., 224 So. 2d 60, 63 (La.App. 4th Cir.), app. denied, 254 La. 811, 227 So. 2d 146 (1969). Consequently, Vicon is liable under the guarantee for the damage incurred by the NOAB as a result of the failure of the materials. Id.
7. The fact that the NOAB employed an engineer and a testing lab does not relieve the contractor of liability. Town of Winnsboro v. Barnard & Burk, Inc., 294 So. 2d 867 (La.App. 2nd Cir.), cert. denied, 295 So. 2d 445 (1974), states:
The fact that an owner has an engineer and testing laboratory on the job does not relieve a contractor of the contractor's duty to perform the work in a workmanlike manner in accordance with the plans and specifications.
* * * * * *
The defects here resulted from the manner in which the work was done. That the engineering firm and testing laboratory may have also failed in their obligations of inspections and supervision owed to the Town does not relieve the contractor of its obligations to the Town. Id. at 875.
8. The final "acceptance" of the work by the engineer does not exonerate the contractor of liability. The acceptance was designated merely to begin the running of lien periods. The "waiver" result is specifically precluded by the terms of the contract. The waiver clause provides:
70-18 NO WAIVER OF LEGAL RIGHTS. Upon completion of the work, the owner will expeditiously make final inspection and notify the contractor of final acceptance. Such final acceptance, however, shall not preclude or estop the owner from correcting any measurement, estimate, or certificate made before or after completion of the work, nor shall the owner be precluded or estopped from recovering from the contractor or his surety, or both, such overpayment as may be sustained, or by failure on the part of the contractor to fulfill his obligations under the contract. A waiver on the part of the owner of any breach of any part of the contract shall not be held to be a waiver of any other subsequent breach. The contractor, without prejudice to the terms of the contract, shall be liable to the owner for latent defects, fraud, or such gross mistakes as may amount to fraud, or as regards the owner's rights under any warranty or guaranty.
The acceptance did not constitute a waiver because latent defects existed in the work and the test results did not fully or accurately reflect the extent to which Vicon deviated from the specifications. The evidence supports the NOAB's contention that it was never made aware of the true test results during the course of construction and, thus, had insufficient knowledge regarding the product delivered. Michel v. Efferson, 223 La. 136, 65 So. 2d 115, 119 (1953); C-B Construction Co. v. Kilpatrick, 366 So. 2d 990, 992 (La.App. 1st Cir. 1978), reh. denied, (1979).
9. Lambert failed to discharge his responsibilities under the engineering contract and the specifications. The engineer is liable for the damages ensuing from his failure to adequately perform the engineering contract. Article 1930 states that "(t)he obligations of contract (contracts) extending to whatsoever is incident to such contracts, the party who violates them, is liable, as one of the incidents of his obligations, to the payment of the damages, which the other party has sustained by his default." This principle is applicable to architects and undertakers in connection with construction contracts. LSA-C.C. arts. 2762, 2769.
10. The NOAB argues that because the engineer undertook to perform a contract under FAA guide specifications that are used nationally, expert testimony from outside the immediate locality has probative weight. The court, however, finds it unnecessary to adopt this standard in light of the evidence, and, thus, the same locality rule is applicable. Maloney v. Oak *1245 Builders, Inc., 224 So. 2d 161, 168 (La.App. 4th Cir.), reh. denied, (1969). Lambert's conduct during both runway projects was substantially below what normally would be expected under local practice. The experts called by Northbrook testified that it would be unusual for a testing lab to usurp any of the engineer's responsibilities or for the engineer's inspectors to receive tonnage tickets in the field from the contractor's representatives. Local practice also mandates that the project engineer have the ultimate responsibility to accept or reject the materials. Lambert did not exercise this authority. Lambert failed to ensure that all tests were conducted in accordance with the specifications.
11. The terms of the engineering contract and the specifications incorporated therein are binding on Lambert. The court rejects assertions by Lambert that the written engineering contract was varied by any subsequent oral agreement of the parties. The burden was on Lambert to prove a modification of the written contracts, but Lambert failed to provide any evidence in support of this claim other than his own uncorroborated testimony, which was denied by other principals in the case. The contract constitutes the law between the parties. LSA-C.C. art. 1945; Miller v. Lancer Pools Corp., 207 F. Supp. 809, 812 (E.D.La.1962); Liberto v. Villard, 386 So. 2d 930, 934 (La.App. 3rd Cir. 1980).
12. The misrepresentations of asphalt deliveries which occurred during both projects on a per ton basis resulted in overpayments to Vicon. Vicon is liable for the overpayments in addition to the other damages incurred by NOAB. The two categories of loss are independent. Lambert is also responsible to the NOAB for the overpayments. All work completed under the contract was to be measured by the engineer. The quantities measured formed the basis for payment unless revisions were made by the engineer. The final payment was based in part on the estimates of quantities actually delivered. Lambert's representative, while acting in the course and scope of his employment, participated in a scheme to knowingly receive and certify the fraudulent tickets for payment. As to "phantom" tickets that were unknowingly accepted by Lambert inspectors, there was a failure in his duty to exercise reasonable supervision over the asphalt operation to certify the quantities delivered.
13. Delta failed in its contractual obligation to properly perform the testing function for the NOAB. Delta misrepresented the densities achieved on the North-South and East-West pavements by improperly selecting results to be reported, failed to perform and/or report certain materials tests and failed to promptly report results that were out of specification. The failures, omissions and improper actions of Delta subject it to liability under its agreement with the NOAB and under Louisiana law. Town of Winnsboro v. Barnard & Burk, Inc., 294 So. 2d 867 (La.App. 2nd Cir.), cert. denied, 295 So. 2d 445 (La.1974).
14. The evidence did not establish that the Southland asphalt was latently defective or that it was not fit for the purposes for which it was sold. Thus, the Southland product was not a cause of the runway failures.
Damages
1. A party injured by a contractual breach is entitled to be placed in the same position as he would have been in had the contract been properly performed. LSA-C.C. art. 2769; Harelson v. Parish of East Baton Rouge, 272 So. 2d 382, 385 (La. App. 1st Cir. 1972). The damages assessable for the runway failures include amounts expended to properly complete the work in excess of the contract price. Keating v. Miller, 292 So. 2d 759, 763 (La.App. 4th Cir. 1974), amended and aff'd after remand, 339 So. 2d 955 (La.App. 4th Cir. 1976), writ refused, 341 So. 2d 904 (1977); Keating v. Miller, 339 So. 2d 955, 956 (La.App. 4th Cir. 1976), writ refused, 341 So. 2d 904 (1977); Moore v. Usrey & Usrey, 52 So. 2d 551, 554 (La.App. 2nd Cir. 1951).
2. Damages are assessable against Vicon, Reliance, Lambert and Delta in solido *1246 for both runway projects. Northbrook and Independent are liable in solido with their principals. Town of Winnsboro v. Barnard & Burk, Inc., 294 So.2d at 883-86.
3. The cost of renovating the North-South runway was $2,879,434.98. The NOAB is also entitled to recover the sum of $73,748.58, which represents the cost of emergency repairs necessitated by the failure of the runway.
4. Defendants are entitled to the following set-offs:
Centerline lights $418,415.00
Engineering services for centerline
lights 29,289.00
Salvage value of asphalt removed
from the runway 70,000.00
___________
$517,704.00.
The total amount recoverable for the failure of the North-South runway is $2,435,479.56.
5. Vicon, Reliance, Lambert and his insurer, Northbrook, Delta and its insurer, Independent, are liable in solido for the damages sustained by the NOAB due to the failure of the East-West runway. The cost of renovation was $1,502,788.84.
6. Defendants are entitled to the following set-offs:
Grooving of the runway $105,700.00
Salvage value of rotomilled
asphalt 36,600.00
Retainage 161,021.00
___________
$303,321.00.
The total amount recoverable on the East-West runway project is $1,199,467.84.
7. Vicon, Reliance, Lambert and Lambert's insurer, Northbrook, are liable in solido to the NOAB for the sum of $250,000.00. This sum represents my best effort to determine the overpayments made to Vicon as the result of the shortweighing and other schemes.
8. The terms of the contract and construction bond on both of the runway projects provided that the NOAB be protected "from all loss or expense of any kind, including costs of court and attorneys' fees, made necessary or arising from the failure, refusal or neglect of the aforesaid Vicon, Incorporated (to comply with its obligations)." Thus, Vicon and Reliance are obligated for the attorneys' fees and legal expenses incurred in this case.[1]
9. NOAB maintains that under Louisiana law, the refusal of an insurer to pay a claim within 60 days, without probable cause, subjects the insurer to the imposition of a penalty. LSA-R.S. 22:658. However, this statutory provision requires that the failure to pay must be arbitrary, capricious and without probable cause. McManus v. Travelers Ins. Co., 360 So. 2d 207, 211 (La.App. 3rd Cir.), reh. denied, (1978). I find that these elements are not proven by a preponderance of the evidence.
Counsel for NOAB is directed to prepare a judgment consistent with these findings and conclusions.
NOTES
[1] In view of this conclusion, all counsel may be able to stipulate to attorneys' fees and court costs. If counsel are unable to agree to such a stipulation, then this aspect of the case will be referred to the Magistrate for further proceedings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2411892/ | 839 S.W.2d 880 (1992)
LAKE LBJ MUNICIPAL UTILITY DISTRICT, Appellant,
v.
Bennett COULSON & C.A.E., Inc., Appellees. Bennett COULSON, Appellant,
v.
LAKE LBJ MUNICIPAL UTILITY DISTRICT, Appellee.
Nos. 14,130, 14,131.
Court of Appeals of Texas, Austin.
August 12, 1992.
Rehearing Overruled October 21, 1992.
*882 Randall D. Wilkins, Houston, for appellant.
Charles Dippel, Houston, for appellees.
Before POWERS, ABOUSSIE and KIDD, JJ.
ON REMAND
ON MOTION FOR REHEARING [MJ] POWERS, Justice.
We grant the motions for rehearing of Lake LBJ Municipal Utility District and Bennett Coulson and C.A.E., Inc. We therefore withdraw the opinion and judgment of August 30, 1991, and substitute this opinion.
Bennett Coulson and C.A.E., Inc. recovered judgment on a jury's verdict in their suit against the Lake LBJ Municipal Utility District for sums allegedly due under a written contract to furnish the District various engineering services.[1] We have twice reversed the trial-court judgment and remanded the cause for a new trial based on errors assigned by the District; in each instance, the Supreme Court of Texas has reversed our judgment and remanded the cause for our further consideration. See Lake LBJMun. Util. Dist. v. Coulson, 692 S.W.2d 897 (Tex.App.1985) Coulson I), rev'd, 734 S.W.2d 649 (Tex.1987) (Coulson II), on remand, 771 S.W.2d 145 (Tex.App. 1988) (Coulson III), rev'd, 781 S.W.2d 594 (Tex.1989) (Coulson IV). We refer the reader to these earlier opinions for a description of the controversy.
In its original brief in this Court, the District assigned thirty-two points of error to the trial-court judgment. The Engineer brought three cross-points as well. In its opinions, the supreme court decided eight of those points of error. This Court decided sixteen additional points of error. Eleven points of error remain to be decided. Because the procedural history of this case is so complex, however, we will discuss all of the issues to a greater or lesser extent so the reasons for our holdings will be readily apparent.
THE JURY QUESTIONS
In its first eight points of error, the District complains of the jury questions submitted by the trial court. In our first opinion in this cause, we held the trial court committed reversible error when it refused to supply in the charge, by definition, instruction, or the phrasing of the first question, a reasonable standard of skill and diligence that would have enabled the jury to determine whether the Engineer's plans *883 and specifications met that standard and therefore established his right to recover on the contract. Coulson I, 692 S.W. at 907. The supreme court held the submitted issues "properly placed the respective burdens and fairly submitted the respective claims of Coulson and the District." Coulson II, 734 S.W.2d at 652.
On remand, we again reversed the judgment and remanded the cause to the trial court based on, among other reasons, our holding that the first question constituted an impermissible comment on the weight of the evidence. Coulson III, 111 S.W.2d at 150-51. The supreme court again reversed our judgment, holding the question did not impermissibly comment on the weight of the evidence. Coulson IV, 781 S.W.2d at 597.
It is our understanding that the supreme court's two opinions dispose of the first eight points of error. In those points, the District complains the trial court erred by (1) submitting question number one and (2) omitting the District's requested questions on whether the Engineer substantially complied with the terms of the contract and performed in a good-and-workmanlike manner. We believe the supreme court rejected these claims by its holding that the submitted issues "properly placed the respective burdens and fairly submitted the respective claims" of the parties. We conclude, therefore, that the supreme court overruled the District's first eight points of error.
In its twenty-ninth, thirtieth and thirtyfirst points of error, the District complains the trial court also erred by refusing to submit requested questions concerning work for which the District had already paid the Engineer. According to the District, the trial court erred in refusing to submit questions by which the District sought to establish that: (1) the Engineer failed to perform the contract in a goodand-workmanlike manner with respect to the projects for which the Engineer had been paid; (2) the payments previously made to the Engineer were made in reliance upon the Engineer's false representations that his plans substantially complied with the contractual requirements; and (3) the value of plans and specifications, for which the Engineer had previously been paid by the District, was unreasonably low.
We reject these contentions. In its first opinion, the supreme court said, "We are unable to discern any real differences between the District's claim that Coulson's efforts were not good and workmanlike and did not meet the standards of reasonable engineering practice and its claim that Coulson was negligent in his performance of professional services." Coulson II, 734 S.W.2d at 651. The supreme court held that question number six, as submitted, resolved the question whether the Engineer was negligent in providing plans and specifications. It follows that question number six also resolved the question whether the Engineer performed in a goodand-workmanlike manner.
The District argues that its good-andworkmanlike-manner argument survives as a separate issue, despite the supreme court's pronouncement in Coulson II, because the District also filed a counterclaim against the Engineer to recover amounts already paid. We believe this distinction is unimportant. On appeal, the District's only assignment of error with respect to the counterclaim is that the trial court did not submit the requested questions. The District does not attack the jury's answers by legal- or factual-sufficiency points. In light of our holding that question number six properly presented the District's theory of the case, the issue whether the question represented the District's defense or its counterclaim is irrelevant. Question number six placed the burden of proof on the District and did not distinguish between plans for which the District had previously paid the Engineer and those for which the Engineer had received no payment. Therefore, we believe question number six resolved the question whether the Engineer performed in a good-and-workmanlike manner with respect to both the Engineer's claim against the District and the District's counterclaim against the Engineer.
Question number eight asked the jury whether the Engineer designed and *884 planned part of the water, sewer and drainage systems in excess of the reasonable needs of the District. It also asked whether the Engineer in bad faith misrepresented the need for these systems, and, if so, whether the District relied on these misrepresentations. The jury answered "No." We believe this question sufficiently presented the District's complaints that (1) it detrimentally relied on the Engineer's false representations that his plans substantially complied with the contract requirements and (2) the value of plans and specifications for which the Engineer had previously been paid by the District was unreasonably low. We overrule the District's twenty-ninth, thirtieth, and thirty-first points of error.
SUFFICIENCY OF THE EVIDENCE
In its ninth point of error, the District contends the trial court erred in overruling the District's motion for new trial because the evidence is factually insufficient to support a finding that the Engineer substantially performed the contract. Question number one asked as follows:
Do you find from a preponderance of the evidence that during the time in question [the Engineer] furnished the [District] with sufficient plans and specifications for construction of a water system, a sanitary sewer system and drainage for the needs of such District, and to secure approvals from appropriate governmental agencies, under the circumstances then existing?
In our first opinion in the cause, we held the trial court committed reversible error when it refused to supply in the charge a reasonable standard of skill and diligence that would have enabled the jury to determine whether the Engineer's plans and specifications met that standard and thus established his right to recover on the contract. Coulson I, 692 S.W.2d at 907. In that connection, the District had complained the charge omitted the controlling or ultimate question of fact: whether the plans and specifications were done "in a good and workmanlike manner" or "in accordance with appropriate standards of engineering practice." In reference to this complaint, we said, "The evidence adduced at trial would support a finding either way on the issue of whether the Engineer's plans and specifications were sufficient to meet either standard of skill and diligence suggested by the standard." Id. at 904. Nevertheless, the supreme court remanded the cause to this Court for the express purpose of determining whether the evidence was sufficient to support the jury's finding. Coulson IV, 781 S.W.2d at 597.
Contrary to the supreme court's view, we believe we did explicitly decide the evidence was factually sufficient to support the jury's affirmative answer to question number one, although we did not detail the evidence suggesting that conclusion. It is our understanding that we were not obliged to do so:
In order that [the supreme court] may... determine if a correct standard of review of factual insufficiency points has been utilized, courts of appeals, when reversing on insufficiency grounds, should, in their opinions, detail the evidence relevant to the issue in consideration and clearly state why the jury's finding is factually insufficient.... Further, those courts, in their opinions, should state in what regard the contrary evidence greatly outweighs the evidence in support of the verdict.
Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986) (emphasis added). Because we were not "reversing on insufficiency grounds" the trial-court judgment, we concluded there was no necessity for discussing in detail the evidence pertinent to question number one.
To finally dispose of the issue, however, we will examine the District's factual-sufficiency point of error now. When reviewing a jury verdict to determine the factual sufficiency of the evidence, we must consider and weigh all the evidence, and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). To give content to the rather vague standard of "clearly wrong and unjust," we look to the practical suggestions *885 set out in W. St. John Garwood, The Question of Insufficient Evidence on Appeal, 30 Tex.L.Rev. 803 (1952): In reviewing a complaint that the evidence is insufficient to support a jury's verdict, the reviewing court must first ask whether it would reach the same verdict if it were the trier of fact. Id. at 811-12. If so, the verdict stands. If the answer is "No," the court should ask whether the jury must have been actuated by prejudice, sympathy, or some other incorrect motive, and, if so, why? Id.
We cannot say that we would have reached a different result than did the jury, based on the evidence adduced at trial and shown in our record. Both the Engineer and the District produced expert testimony on the issue whether the plans and specifications sufficiently complied with the contract. The District witnesses testified that the Engineer's plans were so general as to be virtually worthless to potential bidders; they also testified that the Engineer improperly designed some of the facilities. The Engineer's witnesses testified that the Engineer's plans were adequate, and, in fact, were innovative and economical. It is within the province of the jury to determine the credibility of the witnesses and the weight to be given their testimony. Rego Co. v. Brannon, 682 S.W.2d 677, 680 (Tex.App.1984, writ ref'd n.r.e.). We hold the evidence is not factually insufficient.
In the District's supplemental brief in this Court, it acknowledges our statement from Coulson I: "The evidence adduced at trial would support a finding either way on the issue of whether the Engineer's plans and specifications were sufficient to meet either standard of skill and diligence suggested by the District." Therefore, the brief concedes, the District "will not now try to argue that the evidence was factually insufficient to support a finding that the Engineer met the proper standard of care."
Instead, the District argues under its insufficiency point that the quality and quantity of the evidence adduced will not allow a reasonable fact finder to conclude that the Engineer's plans and specifications were sufficient "for construction" of the planned structures, even though the evidence would permit the fact finder to conclude that the plans and specifications met a good-and-workmanlike standard or some other implied standard. The words "for construction" are taken from the language of question number one.
The District reasons as follows: Certain evidence in the record shows that the Engineer prepared his plans and specifications based upon a master plan that had been prepared by a firm of landscape architects. The master plan was subsequently changed, but the Engineer's plans and specifications were not changed to conform to these changes in the master plan. Therefore, any construction work could not be done according to the Engineer's plans and specifications alone, but only under the personal supervision of the Engineer in the construction phase as he adjusted the plans and specifications to meet the changes in the master plan. Thus, the evidence pertaining to question number one may be viewed as "sufficient" to support the jury's finding only on a theory that the District bound itself to employ the Engineer in the construction phase, if and when the bonds were sold. But this interpretation of the parties' contract is impermissible because such a contract would be against public policy. See City of Big Spring v. Ward, 140 Tex. 609, 169 S.W.2d 151, 154 (Tex. 1943). Consequently, one may interpret the parties' contract to mean only that they intended that the Engineer would supply plans and specifications that were sufficient in themselves to permit construction according to the master plan. The District argues that the evidence is overwhelming that this was not done, and in consequence the evidence is insufficient to permit the jury to find that the Engineer supplied the District with sufficient plans and specifications for construction.[2]
*886 The argument is able but we must reject it under the previous opinions of the supreme court in this cause. In its first opinion, the supreme court held expressly that questions one and six "properly placed the respective burdens and fairly submitted the respective claims of [the Engineer] and the District." Coulson II, 734 S.W.2d at 652. We have quoted above the terms of Question Number One, submitting the Engineer's claim that he had performed his contract and was, therefore, entitled to payment. Question number six, on the other hand, asked the jury as follows: "Do you find from a preponderance of the evidence that [the Engineer] was negligent in failing, if it did, to furnish adequate plans and specifications to obtain reasonable competitive bid prices for the construction work ..., proximately causing higher costs for such construction to the District?" The jury answered, "No."
In holding that questions one and six fairly presented the parties' respective claims, the supreme court noted expressly that it agreed with the Engineer's argument "that once he proves compliance with the express requirements of the contract, he is entitled to a presumption that the work performed was `good and workmanlike' and not negligently performed until the contrary is proven" by the District.
It appears to us that question number six presented the District's theory that the Engineer's plans and specifications did not comport with the contract because they would not, in and of themselves, provide a sufficient guide for construction. The evidence is undisputed that the Engineer complied with the contract in the sense, at least, of furnishing a set of plans and specifications as expressly required by the contract. If they were insufficient in their particulars to permit construction thereunder, that is a matter lying within the scope of question number six. We overrule the District's ninth point of error.
COMPUTATION OF COSTS
In points of error ten through fourteen, the District complains the trial court erred in allowing the Engineer to use 1979 estimates of competitive-bid costs in calculating his compensation. We sustain these points of error for the reasons set out in Coulson III, 771 S.W.2d at 153-54.[3]
FEE PERCENTAGES
In points of error seventeen through twenty, the District complains the trial court erred by awarding the Engineer 100% of the fees specified in the contract because the District terminated the Engineer's employment before the projects were completed. We agree, and sustain the District's points of error seventeen through twenty for the reasons set out in Coulson III, 771 S.W.2d at 151-53. Both parties have assailed footnote two of Coulson III, however, arguing that it incorrectly limits the amount in controversy. We therefore do not confine the district court's determination of the amount in controversy to the amount stated in that footnote.
HORSESHOE BAY WEST PAYMENTS
In its twenty-first point of error, the District contends the trial court erred in awarding fees to the Engineer for engineering services related to projects in Horseshoe Bay West. The District argues as follows: The contract, as amended, authourized *887 the Engineer to prepare plans and specifications for the area as it existed in 1973;[4] the District did not annex Horseshoe Bay West until 1976, however, so the contract did not provide for payment for services rendered by the Engineer for Horseshoe Bay West; because the Engineer sued only on the contract, and not in quantum meruit or implied contract, there were no pleadings to support a recovery for services rendered with respect to Horseshoe Bay West.
The original contract provided that the Engineer was "to handle all future engineering matters during the life of this contract... for the entire District." The contract therefore contemplated that the Engineer might be required to provide services that were not defined in the original or amended contract. After the annexation of Horseshoe Bay West, it became a part of "the entire District" and came within the scope of the contract.
When parties to a contract make a valid modification of their contract and exchange consideration, the terms of the latest contract control. INA v. Leonard, 714 S.W.2d 414, 416 (Tex.App.1986, writ ref'd n.r.e.). The 1973 amendment provided that the Engineer would provide engineering services for the area described in an appendix to that agreement. It did not, however, provide that the area specified in the appendix constituted the only area subject to the contract. From the language in the 1973 amendment we cannot infer that the parties meant to nullify the broader language in the earlier contract.
We hold that the Engineer properly pleaded to recover fees for the Horseshoe Bay West plans and specifications. We overrule the twenty-first point of error broughht by the District.
PREJUDGMENT INTEREST
In its twenty-second point of error, the District contends the trial court erred by awarding the Engineer prejudgment interest from September 23, 1979, to the date of trial. According to the parties' agreement, the Engineer was due payment on September 23, 1979, for certain elements of his design work. The District argues, however, that the contract amount was not ascertainable on September 23, 1979, and therefore prejudgment interest did not begin accruing until the Engineer provided an estimate of construction prices.[5] According to the District, interest did not begin to run on the estimate amounts until January 3, 1980, because the Engineer first provided cost estimates on December 3, 1979.[6]See Tex.Rev.Civ.Stat.Ann. art. 5069-1.03 (1987) (providing that a party is entitled to six-percent interest on contracts "ascertaining the sum payable, commencing on the thirtieth (30th) day from and after the time when the sum is due and payable").
A sum is ascertainable when the measure of recovery, although not necessarily the amount of recovery, is fixed by conditions existing at the time of injury. Commonwealth Lloyd's Ins. Co. v. Thomas, 678 S.W.2d 278, 297 (Tex.App.1984, writ ref'd n.r.e.). The contract set the Engineer's fee as a percentage of construction costs. To the extent the parties knew what the costs were for completed work, we believe the District could compute the amounts due and payable from the contract percentage and the amount of construction costs. See USX Corp. v. Union Pac. Resources *888 Co., 753 S.W.2d 845, 857 (Tex.App. 1988, no writ) (stating that the sum payable was ascertainable when the contract fixed a measure of damages as the prevailing price in cents per pound of cumene); see also La Sara Grain Co. v. First Nat'l Bank, 673 S.W.2d 558, 567 (Tex.1984) (stating that the requirement that a contract set out a sum payable is liberally construed). Therefore, we reject the District's complaint that the trial court erred in assessing interest from September 1979 on those amounts arising from completed construction work.
If there were other amounts that were not ascertainable at that time, we believe any error committed by the trial court was harmless. Since the District first presented this point of error to this Court, the supreme court has held that, when the amount of damages is not ascertainable from the face of the contract, the interest rate set out in article 5069-1.05 applies. Perry Roofing Co. v. Olcott, 744 S.W.2d 929, 930-31 (Tex.1988). Perry Roofing applies to all cases "in the judicial process" at the time it was decided, which means that the rule applies to this case. Id. at 931. When the contract does not specify a rate, the minimum interest rate is ten percent. Tex.Rev.Civ.Stat.Ann. art. 5069-1.05(2) (Supp.1992). Therefore, we believe the District suffered no harm: Either it accepts the six-percent rate assessed from September 23, 1979, or, based on its theory of unascertained sums, it is liable for at least ten-percent interest on those unascertained sums from January 3, 1980, until the date of judgment. We conclude the judgment awarded the Engineer the lesser of the two amounts. See Tex.R.App. P.Ann. 81(b) (Pamph.1992). We overrule the twenty-second point of error.
In its twenty-third point of error, the District argues that, by the terms of the contract, certain fees were not due and payable until five years after the Texas Water Commission approved the bonds. The Water Commission had not approved the bonds when the Engineer filed this suit and the five-year period had not elapsed by the time the trial court rendered judgment in this case. Consequently, the District argues, the fees were not yet due and payable at the time of the judgment, and so the court below erred by awarding the Engineer prejudgment interest on those fees. We disagree with this reasoning.
The District breached the contract on April 12, 1979, by notifying the Engineer that it would not perform its contractual obligations. See Mar-Len, Inc. v. Gorman-Rupp Co., 795 S.W.2d 880, 887 (Tex. App. 1990, writ denied). This action constituted an anticipatory repudiation of the contract, thereby allowing the Engineer to elect among various remedies. See Dunn v. Reliance Life & Accident Ins. Co., 405 S.W.2d 389, 391 (Tex.Civ.App.1966, writ ref'd n.r.e.). The Engineer did not sue immediately, however; instead, he chose to wait until after the first bond payment was due in September 1979. The District did not pay the Engineer at that time, and the Engineer sued in February 1980. In his suit, the Engineer prayed for recovery of those amounts due on September 20, 1979, as well as for recovery of other amounts due after that date. The District contends the Engineer had no right to seek recovery for those amounts which were not yet due under the contract.
When a party who is obligated by a contract to make future payments of money to another repudiates absolutely the obligation, without excuse, the obligee is entitled to maintain at once an action for damages for the entire breach. Taylor Publishing Co. v. Systems Mktg., Inc., 686 S.W.2d 213, 217 (Tex.App.1984, writ refd n.r.e.); see Universal Life & Accident Co. v. Sanders, 129 Tex. 344, 102 S.W.2d 405, 406 (1937). The Engineer was therefore entitled to sue for the entire amount owed him, regardless of whether the five-year period had elapsed. The interest on that amount accrued from the date the District breached the contract, April 12, 1979. See CKB & Assocs., Inc. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577, 587 (Tex. App.1991, writ denied) (stating that prejudgment interest begins accruing on the date of the breach of contract). Because the trial court awarded prejudgment interest *889 from September 23, 1979, the District suffered no harm from the trial court's action. See Tex.R.App.P.Ann. 81(b) (Pamph.1992). We overrule the twentythird point of error.
ISSUANCE OF WRIT OF MANDAMUS
In its twenty-fourth, twenty-fifth, twenty-sixth and twenty-seventh points of error, the District contends the trial court erred by granting the Engineer a writ of mandamus ordering the District to take certain actions with respect to payment of the judgment. We sustain these points of error for the reasons set out in Coulson III, 111 S.W.2d at 154-57.
CREATION FEE
In its twenty-eighth point of error, the District contends the trial court erred in failing to award the District a $120,000 offset because the contractual provisions allowing for the "creation fee" payments to the Engineer were void as a matter of law. We sustain this point of error for the reasons set out in Coulson III, 111 S.W.2d at 157-59. We also overrule the Engineer's first two cross-points of error, as we did in the earlier opinion. See id. at 159.
RETENTION OF OVERPAYMENT
In its final point of error, the District complains the trial court erred in awarding the Engineer additional fees for the design of facilities known as "Chaney Change Order Number One for Horseshoe Bay South, Mobile Home Area." The District contends the evidence conclusively established that the Engineer had already been paid the design fees due for that area. The record reflects that the Engineer estimated the construction costs for the mobile-home area at $307,315. Chaney Construction Company submitted the low bid of $260,300.58 to construct facilities in the area. The District paid the Engineer a fee based on a percentage of the higher amount, and now asserts that it should be credited with the payment.
The Engineer responds with two arguments. First, he justifies the fee he received by arguing that it represented compensation for the District's use of his plans to construct facilities added by change order to the contract.[7] We do not believe this argument is responsive. The District does not contend the change order was unnecessary and that it should not have to pay for the plans prepared for the area specified in the change order. We understand the District to argue that assessing an additional fee was error because the trial court should have offset the fee attributable to the change order by the amount the Engineer had been overpaid for his original plans.
The Engineer's second response is the District deleted certain items from the plans before submitting them for bids from contractors, thereby insuring that the bid amount would be lower than the estimated amount. The Engineer argues that he is entitled to receive compensation for designing facilities, even if the District deleted items from the plans before or during construction.
The contract provided: "The cost of construction for application on fee percentage shall be based upon the total competitive bid cost. If competitive bids are not obtained, then the ... Engineer's estimate of reasonable competitive construction bid prices shall be used to determine the construction cost and the applicable percentage fee." The District obtained a competitive bid for the amount of $260,300.58. Thus, the issue presented is whether the Engineer can recover based on his estimate of costs, instead of on competitive bid costs, because the District unilaterally deleted certain items from the Engineer's plans before submitting the plans to prospective bidders.
We believe that in absence of a rule of law or a contract provision forbidding the
*890 District from deleting items from the plans and then accepting bids based on the altered plans, the Engineer was contractually limited to a fee based on a percentage of the bid amount. The Engineer cites no authority for his assertion that he was entitled to a percentage based on his estimate regardless of the District's alteration of the plans, and we have found none.
We hold that the trial court erred in failing to offset the amount due the Engineer for the Chaney change order number one by the amount overpaid to him for the mobile-home area. We sustain the District's thirty-second point of error.
ATTORNEY'S FEES
In response to question number five, the jury found the Engineer's reasonable attorney's fees were $42,000 for the trial-court proceedings, $25,000 if the case was appealed to the court of appeals, and an additional $8000 if the case was appealed to the supreme court. On the District's motion, the trial court set aside these findings as immaterial because it determined that the District was a public corporation and therefore not subject to liability for attorney's fees. The Engineer complains in his third cross-point that the trial court erred by failing to award him attorney's fees.
The District responds that it is not liable for the Engineer's attorney's fees because no statute provides for recovery of attorney's fees against the District.[8] Attorney's fees are recoverable only when there is an explicit contractual or statutory basis for recovery; the "necessary statutory basis for an award of attorney's fees may not be supplied by implication." Knebel v. Capital Nat'l Bank, 518 S.W.2d 795, 804 (Tex.1974); see also Texas Dep't of Human Servs. v. Methodist Retirement Servs., Inc., 763 S.W.2d 613, 614 (Tex.App. 1989, no writ).
At the time of the trial in this cause, a party's entitlement to recovery of attorney's fees was governed by article 2226, which provided that "[a]ny person, corporation, partnership, or other legal entity having a valid claim against a person or corporation for ... suits founded on oral or written contracts ... may, if represented by an attorney, ... recover, in addition to his claim and costs, a reasonable amount as attorney's fees." 1979 Tex.Gen.Laws, ch. 314, § 1, at 718 (Tex.Rev.Civ.Stat.Ann. art. 2226, since repealed and codified as amended at Tex.Civ.Prac. & Rem.Code Ann. § 38.001 (1986)) (emphasis added). The legislature also suggested that the statute be liberally construed. Id. The Engineer contends a liberal construction of article 2226 dictates that he receive attorney's fees.
Article 2226 granted four classes of litigants a right to recover attorney's fees: persons, corporations, partnerships, and "other legal entities." Only two of these classes were subject to liability for attorney's feespersons and corporations. The District argues that if the legislature intended to bring governmental units within the attorney's fees statute at all, it did so by adding the phrase "other legal entities" instead of including governmental units within the term "persons" or "corporations." This interpretation, of course, allows governmental units to recover attorney's fees under article 2226 without a corresponding liability for attorney's fees under that statute.
The Engineer contends the foregoing construction of the statute is (1) incorrect because the legislature intended to include a municipal utility district within the definition of "person" or "corporation," or (2) unconstitutional under the Fourteenth Amendment because equality must exist between the class entitled to recover and the class subject to recovery. See U.S. *891 Const, amend. XIV, § 2. We will address each of these contentions.
Status of Municipal Utility District
The Engineer is entitled to recover attorney's fees under article 2226 if the District falls within the definition of "person" or "corporation." We hold it does not.
Meaning of "Person"
First, we do not believe the word "person" as used in article 2226 includes a governmental unit. The successor to article 2226 is section 38.001 of the Civil Practice and Remedies Code, which provides that "[a] person may recover reasonable attorney's fees from an individual or corporation...." Tex.Civ.Prac. & Rem.Code
Ann. § 38.001 (1988) (emphasis added). Although the codification of the attorney'sfees statute changed the class subject to recovery of attorney's fees from "a person or corporation" to "an individual or corporation," the Act codifying the attorney's fees statute was "intended as a recodification only, and no substantive change in the law" was intended. 1985 Tex.Gen.Laws, ch. 959, § 10, at 3322.[9] Therefore, we conclude cases construing section 38.001 apply as well to article 2226.
Construing section 38.001, this Court has held that neither the state nor a subdivision of the state is an "individual" subject to liability for attorney's fees. State v. Bodisch, 775 S.W.2d 73, 75 (Tex.App.1989, writ denied). Because "person" in article 2226 corresponds to "individual" in section 38.001, we conclude that under Bodisch a governmental unit is not a "person" under article 2226. Another court of appeals has held that a governmental unit is not a "person" within the meaning of article 2226. See Commissioners Court v. Rodgers, 691 S.W.2d 753, 757 (Tex.App.1985, no writ) ("A liberal interpretation of [article 2226] does not authorize us to expand the meaning of `person' obviously used in [the] article in accordance with its commonly understood meaning of `an individual human being' to include a county or commissioners court.") (footnote omitted).
We recognize that one court of appeals has held a governmental entity is a "person" within the meaning of article 2226 and is therefore liable for attorney's fees in a breach-of-contract action. Wickersham Ford, Inc. v. Orange County, 701 S.W.2d 344, 349 (Tex. App. 1985, no writ). We decline to follow Wickersham Ford because we believe the reasoning of the court of appeals is flawed. The court ignored the plain language of the statute when it held that a political subdivision of the state should not be able to claim the benefits of article 2226 without also exposing itself to liability for attorney's fees. Wickersham Ford, 701 S.W.2d at 348. The statute, which was identical to the version being applied in the present case, explicitly created dissimilar classes: It allowed persons, corporations, partnerships and other legal entities to recover attorney's fees, but exposed only persons and corporations to liability for attorney's fees. If the view adopted by the Wickersham Ford court were correct, "partnerships and other legal entities" would be meaningless. We may not adopt such a construction. See Ex parte Pruitt, 551 S.W.2d 706, 709 (Tex. 1977) ("Statutes should be read as a whole and construed to give meaning and purpose to every part."). Moreover, the Wickersham Ford court misread the primary case it relied on, Garwood Irrigation Co. v. Lower Colorado River Authority, 387 S.W.2d 746 (Tex.Civ.App.1965, writ refd n.r.e.). In Garwood Irrigation, the governmental subdivision was the party seeking to recover attorney's fees, not the party resisting recovery. Therefore, we decline *892 to follow the reasoning in Wickersham Ford.
Meaning of "Corporation"
The Engineer argues that, because article 2226 imposes liability for attorney's fees on a municipal corporation, the trial court erred by denying him attorney's fees. The Engineer's argument assumes, of course, that the District is a municipal corporation; we believe this is a doubtful assumption.[10] We need not decide explicitly whether the District is a municipal corporation outside the context of governmental immunity, however, because we do not believe the Engineer is entitled to recover attorney's fees even if we indulge his assumption that the District is a municipal corporation.
The Engineer can recover attorney's fees under article 2226 only if the legislature intended to include in the word "corporation" a governmental unit performing governmental functions.[11]See Gates v. City of Dallas, 704 S.W.2d 737, 740 (Tex.1986). Without a clear indication of legislative intent that the word "corporation" include the District, the Engineer's argument must fail. See Knebel, 518 S.W.2d at 804.
To determine the legislature's intended meaning of the word "corporation," we look to the law existing when the disputed version of the statute was enacted. In the context of an antitrust statute, the supreme court stated in 1942 that "as a general rule the word `corporation' is construed to apply only to private corporations and does not include municipal corporations, unless the statute expressly so provides." State v. Central Power & Light Co., 139 Tex. 51, 161 S.W.2d 766, 768 (Tex. 1942). Subsequent decisions applied this rule to article 2226. See, e.g., Willis v. City of Lubbock, 385 S.W.2d 617, 618 (Tex. Civ.App. 1965, writ ref'd n.r.e.); City of Houston v. L.J. Fuller, Inc., 311 S.W.2d 285, 291 (Tex.Civ.App. 1958, no writ). The legislature is presumed to have been aware of this judicial construction of the word "corporation" when it reenacted article 2226 in 1979. See McBride v. Clayton, 140 Tex. 71, 166 S.W.2d 125, 128 (1942) (presuming that in using a particular term the legislature intended it to mean what courts had theretofore said it meant). We infer, *893 then, that the legislature intended "corporation" to apply only to private corporations.
In 1986 the supreme court analyzed article 2226 and expanded the meaning of the word "corporation" to include a municipality. See Gates, 704 S.W.2d at 740.[12] The court, however, based its decision on the home-rule municipality's broad powers of self-government, factors not applicable here. The District is a conservation and reclamation district organized and existing under authority of article XVI, section 59 of the Texas Constitution and created pursuant to the provisions of chapter 54 of the Water Code; therefore, it constitutes a political subdivision of the state and operates as a governmental agency performing exclusively governmental functions. See Clear Lake City Water Auth. v. Clear Lake Util. Co., 549 S.W.2d 385, 391 (Tex. 1977); Dillard v. Austin Indep. Sch. Dist, 806 S.W.2d 589, 596 (Tex.App.1991, writ denied) (only municipalities possess both governmental and proprietary functions); see also Tex.Water Code Ann. § 54.119(a) (1972); cf. Bennett v. Brown County Water Improvement District No. 1, 153 Tex. 599, 272 S.W.2d 498, 502 (Tex.1954) (applying the law governing counties, rather than cities, to water improvement district). Because the District is not a municipality performing proprietary functions, Gates does not control the case at bar.
By negative implication, however, Gates leads to the conclusion that article 2226 does not impose liability for attorney's fees on a governmental unit performing governmental functions. The court stated that article 2226 "places no limitation on the broad powers of self-government of a home rule municipal corporation when acting in a proprietary capacity." Gates, 704 S.W.2d at 740. This implies that a governmental subdivision performing governmental functions is not subject to the same analysis. Because Gates provides no authority for the assessment of attorney's fees against a governmental subdivision performing governmental functions and because the statute provides no explicit authority for the assessment of attorney's fees, we cannot conclude the legislature intended the word "corporation" in article 2226 to include the District. See City of Houston v. Lyons Realty, Ltd., 710 S.W.2d 625, 630 (Tex.App. 1986, no writ) (denying attorney's fees to party with claim against municipal utility district because district engaged in governmental rather than proprietary functions).
We recognize that the court in Gates discounted the broad rule of Central Power, stating that a court seeking to ascertain legislative intent should instead consider "the old law, the evil, and the remedy." Gates, 704 S.W.2d at 740 (quoting Tex. Gov't Code Ann. § 312.005 (1988)). In Gates, however, the court applied the provisions of article 2226 to the municipality just as if it had been a private citizen. Id. at 739. Because the City of Dallas in Gates was performing a proprietary function and therefore stood on the same footing as a private citizen, the court justified its decision with the same policy rationale it would apply to private citizensto encourage contracting parties to pay their debts and to discourage litigation. Id. That policy has never applied to a governmental unit performing governmental functions. Even when a governmental unit performing governmental functions would clearly be liable if it were a private citizen, the claimant must still point to a statute waiving immunity from suit or obtain from the legislature consent to suit and to liability. Therefore, although the evil is the same, the remedy differs when the party subject to recovery is a governmental unit performing governmental functions.
Moreover, we find nothing in the "old law" to support recovery of attorney's fees against a governmental unit performing governmental functions. When the legislature first enacted an attorney's fee statute *894 in 1909,[13] governmental units performing governmental functions enjoyed immunity from suit and from liability for actual damages, as they do today. See City of Galveston v. Posnainsky, 62 Tex. 118, 127-28 (1884). It follows that, if a governmental entity enjoyed immunity from suit, it enjoyed immunity from liability for attorney's fees as well. This remained the state of the law in 1979, when the legislature enacted the version of article 2226 at issue here. See 1979 Tex.Gen.Laws, ch. 314, § 1, at 718 (since repealed and codified as amended at Tex.Civ.Prac. 38.001 (1986)). We find nothing in the statute or the cases interpreting the statute to suggest that the legislature intended to change the state of the law to hold a governmental unit performing governmental functions liable for attorney's fees, and we are not free to impute such an intent.[14]See Knebel, 518 S.W.2d at 804. Nor does the legislature's directive that the statute be liberally construed dictate a broader construction. See First City BankFarmers Branch, Texas v. Guex, 677 S.W.2d 25, 30 (Tex.1984) ("[A]n award of attorney's fees may not be supplied by implication but must be provided for by the express terms of the statute in question.").
This Court held in Bodisch that neither the State nor an agency of the State is a corporation as that term is used in section 38.001. Bodisch, 775 S.W.2d at 75; see also Washington v. Walker County, 708 S.W.2d 493, 497 (Tex.App.1986, writ refd n.r.e.) (holding that a county and its officials, "in their official capacities, are not a `corporation' under the ordinary meaning of the term"). We see no reason to apply a different rule in cases applying article 2226.
We hold the District is not a corporation within the meaning of article 2226; therefore, the necessary statutory authority to recover attorney's fees against the District is lacking. See Bodisch, 775 S.W.2d at 75.
Constitutional Analysis
The Engineer also argues that article 2226 violates the equal-protection guarantee of the Fourteenth Amendment if it allows a governmental unit to recover attorney's fees from an private party, while forbidding a private party to recover attorney's fees from the governmental unit. In effect, the Engineer contends the class entitled to recover attorney's fees must be identical to the class subject to liability for attorney's fees, or an unconstitutional classification results. To avoid such a classification, the Engineer argues, we should construe article 2226 in such a way as to infer a legislative intent to include a governmental unit within the meaning of "person" or "corporation."
A careful reading of article 2226 indicates that the legislature could not have intended that the class entitled to recover be identical to the class subject to recovery. The class entitled to recover included "persons, corporations, partnerships or other legal entities." The class subject to liability consisted of only persons and corporations. If these classes were meant to be identical, "partnerships or other legal entities" would be superfluous. A court must give effect to all the words of a statute and not treat any statutory language as surplusage. Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex.1987). We conclude the legislature did not intend for the classes to be identical.
The next question, then, is whether article 2226 is unconstitutional as written. The Engineer does not contend that any fundamental interest or suspect class is involved. Therefore, the applicable standard is whether the statutory classification and different treatment bear a "rational relationship" to a legitimate state interest which the statute was designed to further. Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 96 S. Ct. 2562, 49 L. Ed. 2d 520 (1976). We may not overturn the statute *895 unless "the varying treatment of different groups or persons is so unrelated to the achievement of any combination of legitimate purposes that we can only conclude the legislature's actions were irrational." Massachusetts Indent. & Life Ins. Co. v. Texas State Bd. of Ins., 685 S.W.2d 104, 110 (Tex.App.1985, no writ) (quoting Vance v. Bradley, 440 U.S. 93, 108, 99 S. Ct. 939, 948, 59 L. Ed. 2d 171 (1979)).
The Engineer argues, "There is no conceivable rational basis to support allowance of attorney's fees to a successful governmental entity pursuing a contract claim yet prevent recovery against such an entity in favor of others on identical claims." We disagree. We find a rational basis for the legislature's creation of incongruent classes in article 2226. Presumably, the legislature intended to preserve the funds of the state. See Tarrant County Hosp. Dist. v. Ray, 712 S.W.2d 271, 273 (Tex.App. 1986, writ ref'd n.r.e.). Were this not a legitimate state interest, the entire doctrine of governmental immunity would be constitutionally invalid.
Rejecting an equal-protection attack on the predecessor statute to article 2226, the United States Supreme Court said:
[T]he 14th Amendment does not require that state laws shall be perfect; and we cannot judicially denounce this act as based upon arbitrary distinctions, in view of the wide discretion that must necessarily reside in a state legislature about resorting to classification when establishing regulations for the welfare of those for whom they legislate.
Missouri, K. & T. Ry. v. Cade, 233 U.S. 642, 650, 34 S. Ct. 678, 680, 58 L. Ed. 1135 (1914); see also McGowan v. Maryland, 366 U.S. 420, 426, 81 S. Ct. 1101, 1105, 6 L. Ed. 2d 393 (1961) (stating that state legislatures are presumed to have acted within their constitutional power even though their laws create some unequal distinctions). We conclude article 2226 does not violate the Fourteenth Amendment. We overrule the Engineer's third cross-point.
DISPOSITION OF THE CASE
We reverse the judgment and remand this cause to the trial court for further proceedings in accordance with this opinion. On remand, the trial court should determine the amount of damages due the Engineer in light of our holdings that:
1. the Engineer is entitled to compensation based on prices estimated by the Engineer at the time he submitted plans for approval, not on 1979 price estimates;
2. the Engineer is entitled only to the design-phase fees, not the constructionphase fees;
3. the Engineer is entitled to recover for Horseshoe Bay West plans and specifications;
4. the District is entitled to an offset for payments previously made to the Engineer as part of the "creation fee";
5. the District is entitled to an offset for overpayments to the Engineer for plans for the Horseshoe Bay South mobile-home area;
6. the Engineer is entitled to prejudgment interest accrued from September 1979; and
7. the Engineer is not entitled to attorney's fees.
NOTES
[1] In our discussion hereafter, we shall refer to Coulson and C.A.E., Inc. as "the Engineer" and to Lake LBJ Municipal District as "the District."
[2] In its supplemental brief, the District complains the verdict is "against the great weight and preponderance of the evidence." Because the Engineer had the burden of obtaining jury findings in his favor and did so, the District must argue that the evidence was insufficient to support the verdict. The District would argue the evidence was against the great weight and preponderance of the evidence if it were complaining of the jury's failure to find a fact on which the District had the burden of proof. See William Powers, Jr. & Jack Ratliff, Another Look at "No Evidence" and "Insufficient Evidence," 69 Tex.L.Rev. 515, 519 (1991).
[3] Because we have held that 1979 cost estimates were improper, we need not address the District's points of error fifteen and sixteen, which complain the evidence was insufficient to support the jury's answer to question number three. Should the supreme court disagree with our disposition of points of error ten through fourteen, however, we hold in the alternative that the evidence was sufficient to support the jury's answer to question number three. Both parties presented evidence as to the reasonableness of the Engineer's estimates of costs. Considering all the evidence presented on the issue, we cannot say the jury's verdict is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (Tex.1951).
[4] According to the original contract, the Engineer was to prepare plans and specifications for projects within the initial 2335-acre area of the District. In 1972 the District annexed Horseshoe Bay South, enlarging the District to 3010 acres. In 1973 the parties amended the contract to authorize the Engineer to prepare plans and specifications for water, sewage and drainage facilities "to serve all of the area of the District described in the metes and bounds description" attached to the contract. The attachment described only the 3010-acre area. overrule the twenty-first point of error brought by the District.
[5] We cannot determine from the District's brief whether it challenges the award of prejudgment interest on all sums awarded in the judgment, or whether it challenges only those sums awarded on the basis of the Engineer's estimates. We will address both possibilities.
[6] The Engineer apparently provided in August 1979 an invoice demanding payment for his services; the invoice was based on 1973 cost estimates. When the District refused to pay, the Engineer submitted an invoice in December 1979 and based his estimates on 1979 prices.
[7] The record reflects that the District and Chaney Construction Company entered into an agreement whereby Chaney was to "commence and complete the construction of certain improvements described as follows: Off-Site Water Distribution System to serve Horseshoe Bay West." The agreement also provided that Chaney was to follow the plans and specifications prepared by "Coulson & Associates Engineers, Inc."
[8] The District cannot avoid liability for attorney's fees solely on the basis of claimed governmental immunity because in its pleadings the District did not set forth governmental immunity as an affirmative defense. See Davis v. City of San Antonio, 752 S.W.2d 518, 519 (Tex.1988); County of El Paso v. Boy's Concessions, Inc., 772 S.W.2d 291, 293 (Tex.App.1989, no writ). Even if the District waived any possible immunity defense it might have had, however, the Engineer still may not recover attorney's fees unless a statute so provides. State v. Bodisch, 775 S.W.2d 73, 75-76 (Tex.App. 1989, writ denied).
[9] Section 311.005 of the Code Construction Act, which does not apply to article 2226, see Tex. Gov't Code Ann. § 311.002 (1988), defines "person" to include, among other entities, a "government or governmental subdivision or agency." Id. § 311.005. The revisor's note to section 38.-001, however, says that "[section 38.001] does not use `person' in the reference to an opposing party because the Code Construction Act definition of `person' is broader than the source law meaning of the term." Tex.Civ.Prac. & Rem. Code Ann. § 38.001, revisor's note (2) (1988). This suggests that "person," as used in the source law, article 2226, did not include governmental units.
[10] Considerable controversy exists regarding exactly what constitutes a "municipal corporation." See generally George D. Braden, The Constitution of the State of Texas: An Annotated and Comparative Analysis 672-74 (1977) (discussing the confusion arising from the imprecise use of "municipal corporation" in article XI of the Texas Constitution). The term "municipal corporation" has great significance in the field of governmental immunity because of the supreme court's landmark 1884 decision in City of Galveston v. Posnainsky, 62 Tex. 118 (1884). Posnainsky concluded that home-rule municipalities were not immune from liability when they performed proprietary functions. Id. at 127-28. This Court, accordingly, has stated that "[i]n the context of governmental immunity, we believe that the word `municipal corporation' is a term of art properly limited to municipalities." Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589, 595 n. 7 (Tex.App. 1991, writ denied).
The supreme court has stated that conservation and reclamation districts such as the District "are not classed with municipal corporations, but are held to be political subdivisions of the State, performing governmental functions, and standing upon the same footing as counties and other political subdivisions established by law." Willacy County Water Control & Improvement Dist. No. 1 v. Abendroth, 142 Tex. 320, 177 S.W.2d 936, 937 (Tex. 1944). The supreme court adhered to this view in the face of a strong, scholarly dissent in Bennett v. Brown County Water Improvement Dist. No. 1, 153 Tex. 599, 272 S.W.2d 498, 503 (Tex. 1954).
Exactly what constitutes a "municipal corporation" for nongovernmental immunity purposes continues to vex the courts. If the District is not a municipal corporation, however, it is clear that the Engineer cannot recover attorney's fees because no statutory authority would exist for such an award. See Knebel, 518 S.W.2d at 795.
[11] Although governmental immunity is important as a framework in which to ascertain legislative intent, it is not a valid basis for deciding this case. Rather, the dispositive issue is whether the legislature provided statutory authority for the Engineer to recover attorney's fees. We therefore disagree with the analysis in Hill v. Ector County, 825 S.W.2d 180 (Tex.App. 1992, writ granted). In Hill, the court of appeals held that the county was liable for attorney's fees because it failed to plead governmental immunity as a defense. Id. at 182. We believe this misstates the issue; a county need not plead the governmental-immunity defense if no statute affirmatively provides authority for recovery of attorney's fees.
[12] In 1987 the legislature statutorily overruled Gates by providing that a municipality may not be considered a corporation under a statute unless that statute expressly so provides. See 1987 Tex.Gen.Uws, ch. 342, § 1, at 1761 (Tex. Rev.Civ.Stat.Ann. art. 1269J-13, since repealed and codified as amended at TexXoc.Gov't Code Ann. § 5.904 (Supp.1992)).
[13] See 1909 Tex.Gen.Laws, ch. 47, § 1, at 93 (repealed and codified as amended at Tex.Rev. Civ.Stat.Ann. art. 2226, since repealed and codified as amended at Tex.Civ.Prac. & Rem.Code Ann. 38.001 (Supp.1992)).
[14] Gates is not inconsistent with such a construction because a municipality performing a proprietary function has no immunity. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1517549/ | 848 S.W.2d 170 (1992)
JOHN MASEK CORPORATION and John A. Masek, Appellants,
v.
Marvin DAVIS and Bilo Zarif, Appellees.
No. 01-92-00135-CV.
Court of Appeals of Texas, Houston (1st Dist.).
November 19, 1992.
Rehearing Denied March 11, 1993.
*172 Duane H. Guy, Houston, for appellants.
W. Wendell Hall, San Antonio, for appellees.
Before OLIVER-PARROTT, C.J, and WILSON and O'CONNOR, JJ.
OPINION
O'CONNOR, Justice.
This Court is asked whether the trial court erred in entering a judgment non obstante veredicto ordering the plaintiff take nothing. We find it did not and affirm.
Fact summary
The plaintiffs, John Masek and John Masek Corporation (Masek Corp.), sued Marvin Davis, Marvin Davis Corporation (Davis Corp.), John Aylsworth, and Bilo Zarif for breach of fiduciary duty, tortious interference with contract, civil conspiracy, and piercing the corporate veil. The plaintiffs' claims relate to the liquidation of Davis Trading Company (Davis Trading).
Masek and Davis had a long history of professional and personal relationships. In 1986, Davis, Masek, Glen Natiello, and Gerald Gray created Davis Trading. Each of the four formed a Subchapter "S" corporation to shield themselves from any personal liability that might arise from the affairs of Davis Trading. The four individuals formed Davis Trading with their Subchapter "S" corporations as the members. Davis Trading was a high-risk company whose financial outlook was dependent upon two types of speculative'transactions: (1) cash market transactions, which invoivea the iuture acquisition, transport, and/or delivery of refined petroleum products; and (2) trading of futures contracts for crude oil and refined petroleum products on the New York Mercantile Exchange.
Davis Corp, Davis' Subchapter "S" corporation, contributed $10,000,000 to Davis Trading (all of Davis Trading's capital), assumed financial responsibility for all of Davis Trading's losses, and owned 46 percent of the shares of Davis Trading. Davis Corp. also paid Natiello a $1,000,000 bonus. Because Davis Corp. was the only entity in Davis Trading that contributed money and the only one that bore any financial risk, the partnership agreement forming Davis Trading provided Davis Corp. had the contractual right to withdraw its capital from Davis Trading, liquidate the business of Davis Trading at any time, and remove Masek as the managing partner. Each partner's employment agreement repeated the provisions giving Davis Corp. unilateral rights to liquidate the business. Natiello's employment agreement stated, "Davis Corp. shall have the absolute discretion and authority to terminate [Natiello's] employment with Davis Trading or discontinue the business of Davis Trading Company at any time for any reason." All the parties are in agreement the contract granted Davis Corp. the right to liquidate.
After Davis Trading was formed, Davis sent Aylsworth, a Davis Corp. vice-president and accountant, and Bilo Zarif, Davis' son-in-law, to survey Davis Trading. Both Aylsworth and Zarif acknowledged they were at Davis Trading because Davis asked them to be there. Aylsworth was there as an accountant, and Zarif was there to learn about Davis Trading.
From the beginning, the partners disagreed how the company should be run. The financial reporting and accounting for the company was behind, and it wa difficult to reduce the backlog, because of the high volume of transactions. In August 1986, Aylsworth expressed his concern and suggested the traders slow down the volume of trades, but they did not. As a result of the backlog, it was impossible to *173 get an accurate reading 01 tne company s financial situation.
In October 1986, Aylsworth tried once more to get the traders to reduce the number of trades. Aylsworth made the suggestion after Chase Manhattan, Davis Trading's bank, expressed concern over the possible "churning" of the accounts and the liberties taken with the credit limit. In January 1987, the partners met, and Davis told the traders to reduce the volume of trades to give the accounting department an opportunity to catch up.
According to the plaintiffs, there were rumors Zarif was not at Davis Trading just to observe. He told one of the employees he was planning to kick Masek out and remove Natiello. Later, Masek told Zarif he was not qualified to represent Davis Corp. in Davis Trading's transactions and asked him to leave. Zarif told Davis that Masek had asked him not to return. Masek alleges Davis offered him $1,000,000 for his interest in Davis Trading, or he would shut down the company.
In February 1987, Davis Trading posted a $1,000,000 loss, and Davis decided to exercise Davis Corp.'s option under the partnership agreement to withdraw its capital. Aylsworth was sent by Davis to tell the other partners. Davis did not choose to exercise its option to liquidate the company, But it was scheduled to withdraw its $10,000,000 in capital and give Masek and Natiello a chance to sell the company or find another partner. In April 1987, Davis Trading was liquidated after Masek and Natiello chose not to continue running the company. Masek gave his written consent to liquidate.
The trial court directed a verdict in favor of Aylsworth on the plaintiffs' tortious interference claim and agency claim and in favor of Davis on the plaintiffs' claim for piercing the corporate veil. The trial court also declined to submit the conspiracy claim to the jury. Following a verdict against Davis and Zarif, but not Davis Corp., the trial court entered judgment notwithstanding the verdict in favor of Davis and Zarif. in tms appeal, tne piaintuis claim uavis breached fiduciary duties by withdrawing capital and winding down Davis Trading.
The JNOV
A motion to disregard jury findings and for JNOV should be granted: (1) when the evidence is conclusive, and one party is entitled to recover as a matter of law, Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 227 (Tex. 1990); or (2) when a legal principle precludes recovery. See, e.g., Stevenson v. Koutzarov, 795 S.W.2d 313, 319-20 (Tex.App.Houston [1st Dist] 1990, writ denied) (a judgment on the verdict on one of the causes of action was precluded because it was barred by the statute of limitations); Graphilter Corp. v. Vinson, 518 S.W.2d 952, 953 (Tex.App.Dallas 1975, writ ref'd n.r.e.) (in a suit for breach of contract, a judgment on the verdict was precluded because the evidence showed the contract was illegal).
For a trial court to disregard a jury's findings and grant a motion for JNOV on the evidence, it must determine either there was no evidence to support an issue, or the converse, that the evidence established an issue as a matter of law, and the jury was not free to make a contrary findings. Exxon Corp. v. Quinn, 726 S.W.2d 17, 19 (Tex.1987); Navarette v. Temple Indep. School Dist, 706 S.W.2d 308, 309 (Tex. 1986); Gerdes v. Mustang Exploration Co., 666 S.W.2d 640, 642 (Tex. App.Corpus Christi 1984, no writ). If there is more than a scintilla of competent evidence to support the jury's findings, the JNOV will be reversed. Navarette, 706 S.W.2d at 309.
This Court will review the record in the light most favorable to the jury's findings, considering only the evidence and inferences supporting the finding and reject the evidence and inferences contrary to the findings. Navarette, 706 S.W.2d at 309. The trial court has no authority to substitute its findings for those of the jury. Gerdes, 666 S.W.2d at 642.
*174 1. Davis' liability
Estoppel
In points of error one, two, three, four, and nine, the plaintiffs challenge the trial court's order disregarding the jury's answers to questions four, five, and nine. In answering those questions, the jury found Davis and Masek had a fiduciary relationship, and Davis breached that relationship. In reply to these points of error, the defendants argue the plaintiffs are estopped from holding Davis individually liable for the actions of the corporation. The plaintiffs counter that the doctrine of estoppel does not apply because this case involves a suit against a corporate officer for individual wrongdoing as opposed to a corporate obligation.
In response to question six, the jury found "John Masek knew of the relationship between Davis Corp. and Marvin Davis and chose freely and voluntarily to deal with Davis Corp. through Masek Corp. in connection with the Davis Trading Company." The plaintiffs did not object to this question or to the jury's finding. This finding is binding on the parties in this Court. Crain v. Hill County, 613 S.W.2d 367, 369 (Tex.App.Waco 1981, writ ref'd n.r.e.); Lewis v. Isthmian Lines, Inc., 425 S.W.2d 893, 894-95 (Tex.App.Houston [14th Dist.] 1968, no writ). We hold the plaintiffs are estopped from holding Davis liable in his individual capacity when they knowingly chose to contract with the corporation. See Atomic Fuel Extraction v. Slick's Estate, 386 S.W.2d 180, 190-91 (Tex.App.San Antonio 1964, writ ref'd n.r.e.).
During the trial, the court granted the defendants' motion for directed verdict, refusing to pierce the corporate veil of the Davis Corp. The plaintiffs do not challenge that ruling in this appeal. In the absence of Masek raising the issue, we are constrained to agree with the trial court's ruling. See Central Education Agency v. Burke, 711 S.W.2d 7, 8 (Tex.1986) (the appellate court is not authorized to reverse trial court's judgment in the absence of properly assigned error). Thus, that unchallenged order bars a judgment against capacity as the president of Davis Corp.
In addition, the trial court properly instructed the jury that:
[P]ersons who are in a fiduciary relationship of trust and confidence with each other owe each other a duty of utmost good faith and scrupulous honesty in their mutual endeavor. This fiduciary duty, however, does not extend so far as to create duties in derogation of the express terms of the partnership agreement.
There is no dispute Davis Corp., under the partnership agreement, had a unilateral contractual right to withdraw capital and liquidate Davis Trading.
We find the jury's answer to question six and the trial court's uncontested ruling refusing to pierce the corporate veil, support the trial court's JNOV as it relates to Davis, individually. In addition, we find that to hold Davis personally liable for Davis Corp.'s permitted action would clearly be in derogation of Davis Corp.'s rights under the partnership agreement. See Exxon Corp. v. Atlantic Richfield Co., 678 S.W.2d 944, 947 (Tex.1984) (there can be no implied covenant about a matter specifically covered by the written terms of a contract).
Finding the trial court properly disregarded the jury findings that Davis breached a fiduciary duty, it is unnecessary for this Court to address the remaining jury questions relating to damages and malice.
Waiver
The defendants also argue the plaintiffs waived any complaint against the judgment entered in favor of Davis. After the jury's verdict was returned, the plaintiffs' second memorandum in support of judgment proposed a form judgment which provided the plaintiffs would take nothing from Davis, but recover from Zarif in accordance with the jury's verdict. Relying on Litton Industrial Products, Inc. v. Gammage, 668 S.W.2d 319, 322 (Tex.1984), the defendants assert the submission of a proposed judgment constitutes a waiver. *175 in Liiuon, tne court, aisapprovea oi a party's attempt to induce the trial court on one hand to render a judgment, but reserve in a brief, the right to attack the judgment if granted. Id. at 322. That is not the situation here. Here, the plaintiffs merely provided a draft judgment to conform to what the court had announced would be its judgment.
We overrule points of error one, two, three, four, and nine.
2. Zarifs liability
In points of error five, six, seven, eight, and 10, the plaintiffs challenge the trial court's order disregarding the jury's answers to questions 10, 11, 12, 13. In answering those questions, the jury found Zarif tortiously interfered with the partnership agreement, which proximately caused damages.
The defendants argue Zarif was acting as an agent of Davis Corp, and because there is no evidence showing he acted in furtherance of personal objectives, the trial court correctly entered judgment in favor of Zarif on the tortious interference claim.
Texas law protects existing, as well as prospective, contracts from interference. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex.1989); CF & I Steel Corp. v. Pete Sublett & Co., 623 S.W.2d 709, 715 (Tex.App.Houston [1st Dist.] 1981, writ ref'd n.r.e.). Not all interferences with contractual relations are tortious in nature. Victor M. Solis Underground Util. & Paving Co. v. City of Laredo, 751 S.W.2d 532, 535 (Tex.App.San Antonio 1988, writ denied).
The elements of a cause of action for tortious interference with contractual relations are: (1) there was a contract subject to interference; (2) the act of interference was willful and intentional; (3) such intentional act was a proximate cause of the plaintiff's damages; and (4) actual damage or loss occurred. Juliette Fowler Homes, Inc. v. Welch Associates, 793 S.W.2d 660, 664 (Tex.1990); Sterner, 767 S.W.2d at 689. It is well established an agent cannot be liable for tortious interference witn its principal's contracts, Baker v. Welch, 735 S.W.2d 548, 549 (Tex.App. Houston [1st Dist] 1987, no writ). The agent and the principal are treated as one, because the agent is the principal's alter ego, and their financial interest is the same. Id.
The plaintiffs argue Zarif is not an agent, because he did not have the authority to act on behalf of Davis Corp. This is an irrelevant distinction. Zarif was the agent of Davis, individually, and Davis controlled Davis Corp. Zarifs rights were derived from Davis. Just as Davis, individually, could not be guilty of breach of a fiduciary duty in his dealing with his corporation, neither could his agent, Zarif.
A person who is in a confidential relationship with a party to a contract is privileged to induce the breach of such a contract. Russell v. Edgewood, 406 S.W.2d 249, 252 (Tex.App.San Antonio 1966, no writ) (superintendent of school was not liable for inducing trustees to breach their contract with plaintiff); see also McDonald v. Trammell, 163 Tex. 352, 356 S.W.2d 143, 145 (1962) (a wife could not be held liable for attempting to persuade her husband not to carry out an unenforceable contract); Tinkle v. McGraw, 644 F.Supp. 138, 140 (E.D.Tex. 1986) (defendant was not liable for causing his aunt and former client to breach contract for sale of property). Communications between family members are confidential and cannot form the basis for a tortious interference claim by third parties. Zarif was Davis' son-in-law, and thus a family member.
In order for the jurors to have answered jury question 10 affirmatively, they must have either decided Zarif was not an agent or if he was indeed an agent, he must have acted in furtherance of personal objectives. We find there is no evidence Zarif was anything other than Davis' agent.
Setting the agent/third-party argument aside, the jurors must also have found Zarif "deprived Masek Corp. of its interest in Davis Trading Company." There is no evidence Masek Corp. was "deprived" of anything. When Davis Corp. decided to withdraw *176 its capital investment, as it was contractually permitted, it did not affect Masek Corp.'s interest in Davis Trading. Masek Corp. was given the option of liquidating the company or finding another partner to replace Davis Corp.
Finding the trial court properly disregarded the jury findings that Zarif tortiously interfered, it is unnecessary for this Court to address the remaining questions relating to damages.
We overrule points of error five, six, seven, eight, and 10 and affirm the JNOV. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1597147/ | 638 So.2d 275 (1994)
Thelma COLLINS
v.
Ronald ESTRADE, Nora Livingston and Motors Insurance Corporation.
No. 93-CA-977.
Court of Appeal of Louisiana, Fifth Circuit.
May 11, 1994.
Rehearing Denied July 18, 1994.
*276 Robert T. Hughes, New Orleans, for plaintiff-appellee Thelma Collins.
Scott W. McQuaig, W. Chad Stelly, McQuaig & Solomon, Metairie, for defendant-appellant Ronald Estrade.
Before KLIEBERT, BOWES and WICKER, JJ.
BOWES, Judge.
On August 17, 1987, plaintiff, Thelma Collins, filed suit for damages incurred as a result of an automobile accident. Ms. Collins alleged that her vehicle and another automobile were involved in an intersectional collision. Named as defendants were Ronald Estrade, driver of the vehicle; Nora Livingston, owner of the vehicle and Motors Insurance Corporation, who is Ms. Livingston's automobile liability insurer and also Collins' uninsured/underinsured liability insurer.
Sometime thereafter, plaintiff settled with Nora Livingston and Motors Insurance Company for $22,000.00.
On October 4, 1989, more than two years later, plaintiff filed a motion for preliminary default against Estrade which was signed by the trial court. On March 17, 1993, after passage of some three and one-half years, a hearing was had to confirm the default. The trial court rendered judgment in favor of plaintiff for general damages of $50,000.00 and special damages (medical expenses) of $13,488.00. Estrade now appeals. We amend, and as amended, affirm the judgment of the trial court.
*277 ANALYSIS
On appeal, Estrade presents three assignments of error; namely that:
(1) Thelma Collins failed to present a prima facie case;
(2) That plaintiff's actions in confirming a default some six years after filing of suit constituted an "ill practice"; and
(3) The trial court erred in assessing damages as it failed to credit amounts previously paid to plaintiff by other solidary obligors.
1. Prima Facie Case
LSA-C.C.P. art. 1701 A provides that:
A. If a defendant in the principal or incidental demand fails to answer within the time prescribed by law, judgment by default may be entered against him. The judgment may be obtained by oral motion in open court or by written motion mailed to the court, either of which shall be entered in the minutes of the court, but the judgment shall consist merely of an entry in the minutes.
LSA-C.C.P. art. 1702 states in pertinent part:
A. A judgment of default must be confirmed by proof of the demand sufficient to establish a prima facie case. If no answer is filed timely, this confirmation may be made after two days, exclusive of holidays, from the entry of the judgment of default.
* * * * * *
B.(2) When a demand is based upon a delictual obligation, the testimony of the plaintiff with corroborating evidence, which may be by affidavits and exhibits annexed thereto which contain facts sufficient to establish a prima facie case, shall be admissible, self-authenticating, and sufficient proof of such demand. The court may, under the circumstances of the case, require additional evidence in the form of oral testimony before entering judgment.
* * * * * *
D. When the demand is based upon a claim for a personal injury, a sworn narrative report of the treating physician or dentist may be offered in lieu of his testimony.
It is well established that in obtaining a default judgment, the plaintiff must present competent evidence to support each element of his causes as fully as though each of the allegations in his petition were denied by defendant. Hollis v. Norton, 586 So.2d 656 (La.App. 5 Cir.1991).
In reviewing a judgment of default, the appellate court is restricted to a determination of whether the record contains sufficient evidence to support a prima facie case. Foret v. Terrebonne, Ltd., et al., 621 So.2d 855 (La.App. 5 Cir.1993).
In confirming the default judgment, plaintiff presented her own testimony, the sworn deposition of her treating physician, Dr. Watermeier, and the medical bills from St. Charles Hospital and from Metairie Physical Therapy.
The defendant alleges that this evidence is insufficient to present a prima facie case for several reasons. First, he argues that only a "portion" of the deposition was used and this "portion" of deposition of plaintiff's physician is insufficient to comply with LSA-C.C.P. art. 1702(D).
The record before us (which was also available to counsel for appellant) reflects that plaintiff's attorney offered into evidence the complete sworn deposition of the treating physician, Dr. Watermeier in the federal suit, consisting of thirty-eight pages, and certified by the court reporter. This deposition was taken in conjunction with a suit filed in the United States District Court for disability benefits by the same Ms. Collins arising from the same accident and involving the exact same medical treatment as is the basis of this suit.
A reading of defendant's brief leads us to believe that defendant's attorney was under a mistaken impression, or did not adequately or accurately read the record, when he says several times that only a "portion" of the deposition was introduced into evidence and that the deposition was taken in an "unrelated" matter and was "unverified" as these statements are not correct. The record before us reflects unquestionably that the entire deposition, which was taken under oath and was certified by a court reporter, was *278 placed into evidence and is present now in the exhibits filed in this Court. It is difficult to understand how this entire, ample document could have been overlooked or misconstrued.
In addition, the federal court suit was certainly not an "unrelated matter" as it was filed by the identical plaintiff, Ms. Collins, concerning the identical accident and the identical injuries and medical expenses as are the subject of the suit before us.
We are of the opinion, as the trial judge also ruled, and hold that a certified deposition, taken under oath, under the circumstances mentioned above when the doctor was subject to cross examination (and was, in fact, vigorously cross-examined by opposing counsel in the federal suit) is sufficient to constitute a sworn narrative report and to comply with the requirements of LSA-C.C.P. art. 1702 D. In fact, it is much stronger evidence than a narrative report.
It may be argued that the deponent was not subject to cross-examination by opposing counsel in this suit. But, then a narrative report is subject to cross-examination by no oneso this argument has no merit.
Estrade also alleges that Dr. Watermeier's testimony, through his deposition, fails to show a causative link between plaintiff's injuries and the automobile accident.
In his deposition, Dr. Watermeier testified that Ms. Collins suffered from back problems prior to the accident, and had undergone surgery in 1985. Prior to the accident, plaintiff complained of lower back pain. Immediately after the accident, plaintiff was admitted into the hospital and she was hospitalized for almost two weeks. During hospitalization, plaintiff received morphine injections for her severe pain. Tests run during this hospitalization revealed, among other things, a ruptured disc and/or nerve impingement at the L5-S1 vertebrae. Plaintiff had continued under treatment for two and one-half years when it was suggested that she undergo additional testing and further surgery. Finally, Dr. Watermeier stated in his deposition that he felt this accident aggravated her previous condition.
In addition, plaintiff testified that she was admitted to the hospital immediately after the accident, where she remained for eleven days. To date, she remains under a doctor's care for the results of these injuries.
Next, defendant alleges that Ms. Collins failed to lay a proper foundation to allow the trial court to accept into evidence the medical bills from St. Charles Hospital and/or Metairie Physical Therapy.
However, these medical bills are admissible to support plaintiff's testimony that she was admitted into the hospital and underwent therapy, and the costs incurred as a result, although it is inadmissible to show that these services were necessary. Campbell v. Kendrick, 556 So.2d 140 (La.App. 5 Cir.1990); Andres v. Liberty Mut. Ins. Co., 568 So.2d 651 (La.App. 3 Cir.1990). However, we feel that Dr. Watermeier's testimony, construed in conjunction with plaintiff's testimony, sufficiently shows the necessity of these services as a result of this accident.
2. Fraud and Ill Practice
In his second argument, Estrade alleges that plaintiff's actions, in confirming a default some six and one-half years after filing of suit amounted to fraud or ill practice.
In Kem Search v. Sheffield, 434 So.2d 1067 (La.1983), the Louisiana Supreme Court said:
According to article 2004 of the Code of Civil Procedure, any final judgment obtained by fraud or ill practices may be annulled. Our jurisprudence sets forth two criteria to determine whether a judgment has been obtained by actionable fraud or ill practices: (1) when the circumstances under which the judgment was rendered show the deprivation of legal rights of the litigant who seeks relief, and (2) when the enforcement of the judgment would be unconscionable and inequitable. Smith v. Cajun Insulation, Inc. 392 So.2d 398 (La.1980). Johnson v. Jones-Journet, 320 So.2d 533 (La.1975). Furthermore, although our courts do not sanction negligence or laches, they have not hesitated to afford relief against such judgments regardless of any issue of inattention or neglect. C.C.P. art. 2004, Official Comment *279 (b); Alonso v. Bowers, 222 La. 1093, 64 So.2d 443 (1953); Succession of Gilmore, 157 La. 130, 102 So. 94 (1924); City of New Orleans v. LeBourgeois, 50 La.Ann. 591, 23 So. 542 (1898); Comment, The Action of Nullity Under Louisiana Code of Civil Procedure Article 2004, 38 La.L.Rev. 806 (1978). Thus, the article is not limited to cases of actual fraud or intentional wrongdoing, but is sufficiently broad to encompass all situations wherein a judgment is rendered through some improper practice or procedure which operates, even innocently, to deprive the party cast in judgment of some legal right, and where the enforcement of the judgment would be unconscionable and inequitable. Chauvin v. Nelkin Ins. Agency, Inc. 345 So.2d 132 (La.App. 1st Cir.1977), writ denied, 347 So.2d 256 (La.1977); Schoen v. Burns, 321 So.2d 908 (La.App. 1st Cir.1975); St. Mary v. St. Mary, 175 So.2d 893 (La.App. 3d Cir.1965); Tapp v. Guaranty Finance Co., 158 So.2d 228 (La.App. 1st Cir.1963), writ denied, 245 La. 640, 160 So.2d 228 (1964).
Conduct which prevents an opposing party from having an opportunity to appear or to assert a defense constitutes a deprivation of his legal rights. Thus, when a party fails to defend a suit because of the failure of the opposing party to warn him that a default would be taken, this judgment may be annulled when the parties had an agreement to give notice of any action taken on the suit, or the defaulted party relied on facts which he reasonably believed created such an agreement, and the enforcement of the judgment would be unconscionable and inequitable. Estelle Wilson Mortuary, Inc. v. Waker, 244 So.2d 630 (La.App. 4th Cir.1971); Engeran v. Consolidated Companies, Inc., 147 So. 743 (La.App. 1st Cir.1993); Hutton v. Fisher, 359 F.2d 913 (C.A.3rd 1966); Orange Theatre Corp. v. Rayherstz Amusement Corp., 130 F.2d 185 (C.A.3rd 1942); Moran v. Mitchell, 354 F.Supp. 86 (D.C.Va.1973); Selznick v. New York [39 A.D.2d 597], 331 N.Y.S.2d 725 (1972).
Defendant, Estrade, here argues the following. Shortly after suit was filed, the plaintiff entered into a settlement with the co-defendant, Nora Livingston, and the insurer, to the extent of all policy limits. The petition was served on defendant's mother at defendant's place of residence. Not until two and one-half years later was a preliminary default taken. The default was not confirmed until the passage of another three and one-half years. Prior to this time, plaintiff made no contact with defendant/appellant. This inaction, between the settlement and the preliminary default, and between the preliminary default and the confirmation hearing, reasons plaintiff, constitutes an improper practice or procedure which operated to deprive him of his day in court and resulted in judgment against him. Therefore, enforcement of the judgment would be unconscionable and inequitable.
We disagree. There is nothing in this record which indicates in any manner that plaintiff led appellant to believe that a default would not be taken. While it may be argued that the settlement may have led Estrade to believe the matter was completely compromised, he was put on notice that such was not the case when he was not dismissed as party to the suit. Estrade was given more than ample time to file responsive pleadings and there appears to be no excuse for not filing an answer, even a general denial, or an exception, etc.; he failed to do so; and plaintiff legally obtained a default against him in full compliance with all applicable laws. Then, too, we must not lose sight of the fact that the accident was caused through the fault and negligence of defendant, Estrade (see transcript of plaintiff's testimony) and that plaintiff was seriously injured and underwent much pain and suffering. Therefore, it would be unconscionable to deny plaintiff's recovery if this judgment was legally obtained in accordance with lawand we believe that it was.
3. Offset
In his last assignment of error, the defendant alleges that the award of damages against him should have been offset by the amount of the settlement plaintiff entered into with Motors Insurance Company. We agree.
We note that under the circumstances presented here, Estrade and Motors Insurance *280 Company, as the primary insurer of the vehicle driven by Estrade, and also as the uninsured/underinsured motorist liability insurer of Ms. Collins, are liable, in solido, for the damages sustained by plaintiff. LSA-C.C. art. 1794.
Estrade is fully bound because of his negligent actions and Motors Insurance, as Nora Livingston's insurer, is bound up to the amount of the policy limits. Likewise, Motorist, as plaintiff's uninsured/underinsured liability insurer, is conditionally bound, as its obligation is conditioned on a tort feasor's total or partial lack of liability insurance, the type of damages caused, and the policy limitations allowed by law. Egros v. Pempton, 606 So.2d 780 (La.1992).
In the present case, the trial court offered no reasons, oral or written, for judgment. A reading of the record reflects that Ms. Collins settled with Motors Insurance Company for $22,000.00broken down as follows: $10,000.00 pursuant to Ms. Collins' policy limits for uninsured/underinsured motorist coverage; $10,000.00 pursuant to Ms. Livingston's policy limits for liability and $2,000.00 pursuant to Ms. Livingston's policy limits for medical payment coverage. However, we note that the trial court awarded full recovery for past medical expenses, without crediting the $2,000.00 paid pursuant to the medical payment provisions of the insurance policy. Thus, without any reasons from the trial judge, we are forced to conclude that the trial court likewise awarded to plaintiff the full award of general damages without reducing that amount already received from Motors Insurance Company for the limits of the policies and in partial settlement of the plaintiff's claims.
For the above discussed reasons, the judgment of the trial court is amended to award the sum of $28,000.00 for general damages ($50,000.00 awarded less the $22,000.00 previously paid by the co-defendants, who were solidary obligors). In all other respects, the judgment rendered by the trial court is to remain unchanged and is affirmed.
Each party is to bear his own costs.
AMENDED, AND AS AMENDED, AFFIRMED.
WICKER, J., concurs in the decree. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1132013/ | 57 Cal. 2d 633 (1962)
ERNEST MOODY BEST, Petitioner,
v.
THE STATE BAR OF CALIFORNIA, Respondent.
L. A. No. 26609.
Supreme Court of California. In Bank.
May 15, 1962.
Ernest Moody Best, in pro. per., for Petitioner.
Garrett H. Elmore for Respondent.
THE COURT.
This is a proceeding to review a recommendation of the Board of Governors of the State Bar of California that petitioner be disbarred.
Petitioner contends:
First: That the evidence is insufficient to sustain the findings that he (a) violated rules 2 and 3 of the Rules of Professional Conduct relating to the solicitation of professional employment (52 Cal. 2d 893, 896) and (b) wilfully breached his oath as an attorney "never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law" (Bus. & Prof. Code, 6068, subd. (d)).
[1] In a disciplinary proceeding against an attorney, findings of fact by local administrative committees and the Board of Governors are not binding on the Supreme Court, which will weigh and pass upon the sufficiency of the evidence to sustain the findings of the board. (Rock v. State Bar, 55 Cal. 2d 724, 726 [1] [12 Cal. Rptr. 857, 361 P.2d 585].)
[2] Also, the burden is upon one seeking a review of a recommendation of the Board of Governors to show that its findings are not supported by the evidence or that its recommendation is erroneous or unlawful. (Rock v. State Bar, supra, 726 [2].)
[3] In accordance with the foregoing rules, we have examined the record in the instant case and find that the findings and conclusions of respondent are sustained by the evidence, the record disclosing as follows:
After being arrested in New Mexico on a narcotics charge, Tony Campa escaped and fled to Los Angeles, where he was rearrested and confined in the Hall of Justice. His wife, Elena Campa, and his mother, Cecelia Flores, went to see him there. While they were at the Hall of Justice, one Lugo, a bondsman, whom neither of the women had ever seen before, approached them and asked what was wrong. After they told him, he stated that he knew a very good lawyer who could help them. He took them across the street to the United States Post Office Building, where he arranged for petitioner to meet them. [fn. *]*636
Lugo informed petitioner that Tony was "in for transporting narcotics." Petitioner told the women that he would help them but that he would charge $3,000, representing that his services would assure that Tony would either be freed or would be placed under the Youth Authority for not more than 18 months as punishment. He also stated that out of the $3,000 he would have to make payments to the government of New Mexico and the judge who would sentence Tony, and he told them to come to his office the next day.
The two women went to petitioner's office the next day, accompanied by Tony's brother, Martin Campa. Lugo appeared at the same time, and both petitioner and Lugo represented to the Campa family that charges of escape and suspicion of murder were pending against Tony and that such charges necessitated the professional services of an attorney. From the record, however, it seems clear that no such charges were pending.
Petitioner was later employed by the Campa family to represent Tony for an agreed fee of $3,000, of which $1,500 was paid, the balance to be paid in 30 days.
In order that venue might properly be acquired by the United States District Court for the Southern District of California in Los Angeles, Tony had, several weeks before his family employed petitioner, formally declared his intention to plead guilty to the charges against him, in accordance with rule 20 of the Federal Rules of Criminal Procedure. Although petitioner claims he did not know this, it is clear that he knew from the very beginning that the alleged offense had occurred in New Mexico and that Tony would have to be returned to that state for trial if he entered a not guilty plea.
When Tony later asked petitioner what fee arrangement he had made with the family, petitioner at first informed him that his total fee would be between $250 and $300. Some time later he admitted to Tony that the total would be $3,000, of which $1,500 had been paid. Upon learning this, Tony threatened to tell the judge.
After Tony pleaded guilty in the United States District Court in Los Angeles to the offense charged against him, a court hearing was set for his sentencing. At that hearing petitioner represented to Honorable William M. Byrne, who was presiding, that Tony had never been in trouble before. As a matter of fact, Tony had previously, to petitioner's knowledge, been convicted on a drunk driving charge. Tony was then given a six-year sentence but with the recommendation that *637 he be sent to an available medical facility for treatment of the narcotics habit.
At the hearing Tony, after obtaining permission to make a statement, asked questions about the fee arrangement with petitioner. In seeking to justify a $3,000 fee for representing a defendant who had previously signed a rule 20 consent, petitioner told Judge Byrne, among other things, that there were pending against Tony charges of escape and suspicion of murder, to which petitioner had devoted his services as an attorney at law.
Although petitioner claimed to have no knowledge of Lugo's activities since he was publicly reproved by the Board of Governors for Lugo's "solicitation" activities in 1958, the evidence in the present case indicates that between May 1959 and Thanksgiving 1959 Lugo had approached three other women in or around the Hall of Justice and recommended petitioner and that petitioner was personally identified with some later act in each matter.
Clearly the foregoing evidence sustains the questioned findings of the Board of Governors, and no useful purpose would be served by setting forth conflicting evidence or further testimony which tends to support the board's findings.
Second: That since Mr. Lugo and petitioner after a criminal trial were acquitted of conspiracy to commit grand theft and grand theft, predicated upon the facts set forth above, the State Bar was divested of jurisdiction, under sections 6075 et seq. of the Business and Professions Code, to discipline petitioner.
This contention is devoid of merit. [4] It is the general rule that the acquittal of an attorney in such a criminal proceeding constitutes no bar to the institution of disbarment proceedings based upon the same acts. (In re Lincoln, 102 Cal. App. 733, 742 [3] [283 P. 965] [hearing denied by the Supreme Court]; see also Note 123 A.L.R. 779; 7 C.J.S. (1937) Attorney and Client, 21, subd. d, p. 740.)
[5] It is apparent that the purposes of the two proceedings are vastly different. A criminal proceeding has for its purpose the punishment of the accused if he is found guilty. A disciplinary proceeding against an attorney is not intended for his punishment, but is for the protection of the public, the courts, and the legal profession. (In re Rothrock, 16 Cal. 2d 449, 454 [2] [106 P.2d 907, 131 A.L.R. 226]; Light v. State Bar, 14 Cal. 2d 328, 338 [5] [94 P.2d 35]; Johnson v. *638 State Bar, 10 Cal. 2d 212, 217 [4] [73 P.2d 1191]; In re Vaughan, 189 Cal. 491, 496 [209 P. 353, 24 A.L.R. 858].)
This conclusion is in accordance with the views of the state Legislature, which has provided in the State Bar Act, as follows: "The commission of any act involving moral turpitude, dishonesty or corruption, whether the act is committed in the course of his relations as an attorney or otherwise, and whether the act is a felony or misdemeanor or not, constitutes a cause for disbarment or suspension."
"If the act constitutes a felony or misdemeanor, conviction thereof in a criminal proceeding is not a condition precedent to disbarment or suspension from practice therefor." (Italics added.) (Bus. & Prof. Code, 6106.)
(Cf. In re Phillips, 17 Cal. 2d 55, 61 [6] [109 P.2d 344, 132 A.L.R. 644]; In re Hatch, 10 Cal. 2d 147, 151 [5] [73 P.2d 885].)
[6] Third: That it was error for the trial committee to permit an investigator for the State Bar to be present during certain of their hearings relative to the charges against petitioner.
This contention is likewise devoid of merit. Rule 8 of the Rules of Procedure of the State Bar provides: "Unless otherwise ordered by the board or requested by the respondent, the hearing of a formal disciplinary proceeding shall not be public." (Italics added.)
In the present case petitioner made no timely motion to exclude the investigator during the first set of the trial committee hearings. When he did so at a later hearing, the investigator left. Clearly petitioner waived any right he might have had to object to the presence of the investigator.
Also, it is to be noted that the State Bar investigator was an employee of the State Bar and bound to maintain in confidence any information which he might receive. Therefore, his presence did not make the "hearing" a "public one."
Finally, there is a total absence of any showing that petitioner was in any way prejudiced by the presence of the investigator.
[7] Fourth: That the penalty recommended by the Board of Governors is excessive.
There is no merit to this contention. The Board of Governors imposed a public reproval upon petitioner in September 1958 for alleged unprofessional conduct connected with "solicitation" activities of the same Mr. Lugo who is involved in the present proceedings. In reaching its decision in the *639 present case, the board took into consideration not only the fact that petitioner had previously been reprimanded for soliciting, but also the fact that he had made false representations to Judge Byrne. (Cf. Mayer v. State Bar, 2 Cal. 2d 71, 75 [3] [39 P.2d 206].) The penalty recommended by the Board of Governors--disbarment--is not excessive.
It is ordered that Ernest Moody Best be disbarred and that his name be stricken from the roll of attorneys of this state, this order to become effective 30 days after the filing of this opinion.
NOTES
[fn. *] *. On September 26, 1958, petitioner was given a public reproval by the Board of Governors for alleged unprofessional conduct connected with "solicitation" activities of this same Mr. Lugo. (In the Matter of Ernest Moody Best, Attorney at Law, No. L. A. 1455.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/894687/ | 175 S.W.3d 253 (2005)
In re LIVING CENTERS OF TEXAS, INC., d/b/a Wharton Manor, Relator.
No. 04-0176.
Supreme Court of Texas.
Argued September 9, 2004.
Decided October 14, 2005.
*254 Brandon David Mosley, Thomas C. Cowan and Tammy Savidge-Moore, Preston & Cowan, LLP, Houston, TX, for relator.
Bernard Klimist and Robert K. Piwetz, Law Office of Bernard T. Klimist, TX, Mark Anthony Davis, Law Office of Mark A. Davis, Vicotria, TX, for real party in interest.
*255 Joanne Summerhays, Clark, Thomas, Winters & Newton, Austin, TX, for Amicus Curiae Health Care Association.
Kevin H. Dubose, Alexander Dubose Jones & Townsend LLP, Houston, TX, for Amicus Curiae Brenda and Gerald Jeffcoat.
Justice GREEN delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice HECHT, Justice O'NEILL, Justice WAINWRIGHT, Justice BRISTER, Justice MEDINA and Justice JOHNSON joined.
In this original mandamus proceeding, the relator Living Centers challenges the trial court's order to produce documents Living Centers argues are privileged. We hold the trial court abused its discretion when it determined that all documents were discoverable on the basis that the documents were not marked by Living Centers as privileged or the names of the documents, alone, did not indicate privilege. We conditionally grant the petition for writ of mandamus.
Faye Clepper was admitted to Wharton Manor Nursing Home (Living Centers) in 2001. In 2002, Ms. Clepper was transferred to the hospital where she died. Lee Cline, Ms. Clepper's survivor, sued Living Centers for medical malpractice under the Texas Wrongful Death Act and the Texas Survival Statute, alleging Ms. Clepper expired due to negligent nursing home care. After Cline served Living Centers with discovery, including requests for production, Living Centers withheld several documents, asserting the medical peer review privilege and the quality assessment and assurance (QA & A) privilege. Cline filed a motion to compel production.
To preserve and prove its privileges, Living Centers submitted four items to the trial court: a privilege log; the affidavit of Ms. Ross, the director of nursing; a representative sample of the documents to be reviewed in camera; and the QA & A Plan of the nursing home. Living Centers's privilege log began with a general statement that all listed documents were "[d]ocuments regarding the competency of the healthcare provider and the quality of care rendered." Each withheld document was also listed individually with the applicable privilege and a brief name, such as `employee performance evaluation,' `quality of care memo to committee,' etc. Ms. Ross's affidavit outlined the activities and responsibilities of Living Centers's medical peer review and QA & A committees and explained that the privilege log documents were of two types: (1) information and reports prepared for the committees to review; and (2) reports generated by the committees themselves. Living Centers's QA & A Plan stated that documents prepared or reviewed by the QA & A committee should be stamped with a confidentiality statement: "This report has been generated as part of the facility's quality assessment and assurance process and constitutes confidential Quality Assessment and Assurance Committee records." However, not all the documents submitted for in camera review were stamped with this required indicia.
The trial court ordered Living Centers to produce any of the in camera documents that lacked a QA & A privilege stamp, as well as any of the privilege log documents that did not have the word "committee" in the name. The court of appeals, in a per curiam opinion, denied Living Centers's request for mandamus relief.
I
Living Centers contends mandamus relief is appropriate when privileged documents are made discoverable by the trial court. We agree. In Texas, a person *256 may obtain mandamus relief from a court action only if (1) the trial court clearly abused its discretion and (2) the party requesting mandamus has no adequate remedy by appeal. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex.2004); In re Kuntz, 124 S.W.3d 179, 180 (Tex.2003); Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). Mandamus is appropriate to protect confidential documents from discovery. See Mem'l Hosp.-The Woodlands v. McCown, 927 S.W.2d 1, 12 (Tex.1996); Barnes v. Whittington, 751 S.W.2d 493, 496 (Tex.1988)(vacating, by mandamus, a protective order covering non-privileged documents). Since the documents at issue are alleged to be privileged, mandamus is appropriate if we conclude that they are privileged and have been improperly ordered disclosed.
IIA
There are four privileges implicated by Living Centers: the medical committee privilege, the medical peer review committee privilege, the nursing peer review committee privilege, and the quality assessment and assurance privilege. TEX. HEALTH & SAFETY CODE § 161.032; TEX. OCC.CODE §§ 160.007, 303.006; 40 TEX. ADMIN. CODE § 19.1917 (1995)(Dep't of Aging and Disability Servs.).[1]
The medical committee privilege states:
The records and proceedings of a medical committee are confidential and are not subject to court subpoena.
. . .
(f) This section and Subchapter A, Chapter 160, Occupations Code, do not apply to records made or maintained in the regular course of business....
TEX. HEALTH & SAFETY CODE § 161.032. A "medical committee" "includes any committee" of health care entities including an extended care facility. Id. § 161.031(a)(5). The medical peer review privilege states:
(a) Except as otherwise provided by this subtitle, each proceeding or record of a medical peer review committee is confidential, and any communication made to a medical peer review committee is privileged.
TEX. OCC.CODE § 160.007. A "medical peer review" committee is defined as:
a committee of a health care entity ... that operates under written bylaws approved by the policy-making body or the governing board of the health care entity and is authorized to evaluate the quality of medical and health care services or the competence of physicians....
Id. § 151.002(a)(8). "Health care entity" includes nursing homes. Id. § 151.002(a)(5)(B). "Medical peer review" is defined as:
"Medical peer review" or "professional review action" means the evaluation of medical and health care services, including evaluation of the qualifications of professional health care practitioners and of patient care provided by those practitioners....
Id. § 151.002(a)(7). "Practitioner" is defined in the Occupations Code to "include physicians and surgeons." TEX. OCC.CODE § 151.002(b).[2] Section 151.052, entitled *257 "Exemptions," specifically excludes from the coverage of this subtitle (sections 151-165) nurses, dentists, optometrists, chiropractors, podiatrists, psychologists, and physical therapists. TEX. OCC.CODE § 151.052(a). Applying both statutes shows that any "records or proceedings" of a medical committee (including a medical peer review committee) are confidential, but the privilege of the medical peer review committee also includes "any communication made to" the committee. Id. § 160.007(a).
This Court has analyzed the records, proceedings, and communications language of the medical committee privilege and the medical peer review committee privilege under Health & Safety Code section 161.032. McCown, 927 S.W.2d at 3; Irving Healthcare Sys. v. Brooks, 927 S.W.2d 12, 16 (Tex.1996); In re Univ. of Tex. Health Ctr., 33 S.W.3d 822, 825 (Tex.2000) (per curiam).[3] In McCown, we discussed both the medical committee privilege and the medical peer review privilege, holding "the confidentiality provision of [the medical committee privilege] extends to initial credentialing by medical committees." McCown, 927 S.W.2d at 3-5. Other confidential documents under the medical peer review privilege are those "generated" by a committee or "prepared by or at the direction of the committee for committee purposes." Id. at 10. Privileged documents in McCown included the "minutes and recommendations" of medical committees, the hospital's inquiries about a physician to other sources and the sources' responses, and communications between the physician and the hospital. Id. at 11; see Brownwood Reg'l Hosp. v. Eleventh Court of Appeals, 927 S.W.2d 24, 27-28 (Tex. 1996) (per curiam) (holding the minutes of the board of trustees and the credentialing and subsequent review of physicians were privileged, but "the bylaws, rules, and regulations" of the hospital staff were not).
This Court held similarly in Brooks, adding that simply passing a document through a peer review committee does not make it privileged. Brooks, 927 S.W.2d at 17, 18. Once again discussing both the medical committee privilege and the medical peer review privilege, in In re University of Texas Health Center, we held that evidence that "all of [the records] were created by or at the request of the committee in connection with its evaluation of medical care" was sufficient to make all of the documents privileged. In re Univ. of Tex. Health Ctr., 33 S.W.3d at 825.
A statutory business records exception to both the medical committee and medical peer review committee privileges appears in Health & Safety Code section 161.032(f). TEX. HEALTH & SAFETY CODE § 161.032(f); see Brooks, 927 S.W.2d at 17, 18. It states, "This section and Subchapter A, Chapter 160, Occupations Code, do not apply to records made or maintained in the regular course of business by a hospital,... or extended care facility." Id. § 161.032(f). "The reference to [§ 160.007 and § 161.032] in section 161.032 is a clear signal that records should be accorded the same treatment under both statutes in determining if they are made `in the regular course of business.'" McCown, 927 S.W.2d at 11. Thus, business records excepted from the privileges include a "patient's medical records" and "business and administrative files and papers apart from *258 committee deliberations." See Brooks, 927 S.W.2d at 18; McCown, 927 S.W.2d at 10.
While the medical privileges are important in promoting free discussion in the evaluation of health care professionals and health services, the right to evidence is also important, and therefore privileges must be strictly construed. McCown, 927 S.W.2d at 7 ("privileges are to be narrowly construed"); Univ. of Penn. v. Equal Employment Opportunity Comm'n, 493 U.S. 182, 189, 110 S. Ct. 577, 107 L. Ed. 2d 571 (1990) (privileges contravene the public's right to hear evidence and must be strictly construed).
Like other privileges, the medical peer review privilege will be strictly interpreted. Because the definition of "practitioner" under the Occupations Code is so narrowly drawn, we hold the medical peer review privilege, insofar as employment evaluation is concerned, only applies to physicians. See TEX. OCC.CODE, §§ 151.002(b), 151.052.
In addition to employment evaluation, a medical peer review committee has the broader authority "to evaluate the quality of medical and health care services...." Id. § 151.002(a)(8). We construe this statement to allow medical peer review committees to retrospectively review health-care services provided by non-physicians as well, such as the administration of drugs by a nurse at the instruction of a physician. The purpose of medical peer review, as the plain language of the statutes makes clear, is protection of an evaluative process, not mere records.[4]Cf. Jordan v. Fourth Court of Appeals, 701 S.W.2d 644, 649 (Tex.1985) (holding that documents "not shown to be `records and proceedings' of a hospital committee" are discoverable); McCown, 927 S.W.2d at 9 ("[T]he statutory privilege attaches to an investigation, review, `or other deliberative proceeding' of a medical committee.") (citation omitted).
B
Separate from the medical committee and the medical peer review committee, a "nursing peer review committee" is the entity authorized to engage in nurse peer review. See TEX. OCC.CODE § 303.001(4). To qualify as a nursing peer review committee, nurses must comprise at least three-fourths of the membership of the committee. Id. § 303.003(a). The nursing home may only assert the nursing peer review privilege if the committee meets the narrow and rigorous membership requirements of section 303.003(b). According to Living Centers's QA & A Plan, its nursing review committee consists of the "Administrator, Director of Nursing, the Medical Director or other designated physician, a social service representative, a dietary representative, and a Certified Nursing Assistant, at a minimum. The Administrator may assign other facility staff to the council, if appropriate." Living Centers did not prove that three-fourths of this membership consists of nurses as required by section 303.003(b); accordingly, the nursing peer review privilege does not apply in this case.
C
Nursing facility QA & A committees are required by the Texas Administrative Code. Their membership requirements do not correspond with those of nursing peer review committees. 40 TEX. *259 ADMIN. CODE § 19.1917(a)(1995)(Dep't of Aging and Disability Servs.). A nursing facility QA & A committee must consist of: "(1) the director of nursing services; (2) a physician designated by the facility; and (3) at least three other members of the facility's staff." Id. Because it is a committee in a health care entity and authorized to evaluate the quality of health care services, the QA & A committee also qualifies as a medical committee under the Texas Health and Safety Code, similar to a medical peer review committee. As a medical committee, QA & A committee documents are privileged, except as limited by the business records exception. TEX. HEALTH & SAFETY CODE §§ 161.031, 161.032.[5] According to Living Centers's bylaws, its QA & A committee membership meets the requirements of section 19.1917(a).
III
Living Centers argues that the various review committee privileges apply to nursing homes. We agree. Section 161.032(f) of the Health and Safety Code includes "extended care facility" in the list of facilities covered by the business records exception to the peer review privilege. TEX. HEALTH & SAFETY CODE § 161.032. We also note that "nursing home" is specifically designated as a "health care entity" under Occupations Code section 151.002(a)(5)(B). TEX. OCC. CODE § 151.002(a)(5)(b). Moreover, it was suggested in Gulf Health Care v. Lerner that the peer review privilege applies in the nursing home context. 932 S.W.2d 488, 488 (Tex.1996) (per curiam) (holding that nursing home privilege case should be reexamined in light of the 1996 privilege cases). Given the statutory language and our decision in Lerner, we hold that nursing homes are protected by the medical committee, medical peer review, and nursing peer review privileges to the same extent as hospitals.
IV
Living Centers argues all its privilege log documents are privileged and the privileges cover credentialing and employment of all employees, including non-physicians. We disagree.
A
Many of the documents at issue appear to fall outside the range of documents we have previously declared protected by the medical committee and medical peer review privileges. The categories of documents withheld by Living Centers include documents that concern licensing and investigation by state agencies of non-physicians and physicians, documents such as incident logs and reports referencing Ms. Clepper, governing body meeting minutes, personnel records including documentation of training of non-physicians and physicians, and documents used by Wharton Manor to resolve rule changes.
*260 The peer review privilege is intended to extend far enough to foster candid internal discussions for the purpose of making improvements in the quality of care, but not so far as to permit the concealment of "routinely accumulated information." Whittington, 751 S.W.2d at 496 ("the statute protects only the deliberative process"). "[T]he privilege [does] not prevent discovery of material that ha[s] been presented to a hospital committee if it [is] otherwise available and `offered or proved by means apart from the record of the committee.'" McCown, 927 S.W.2d at 10 ("[T]he privilege [does] not prevent discovery of material that ha[s] been presented to a hospital committee if it [is] otherwise available and `offered or proved by means apart from the record of the committee.'") (quoting Texarkana Mem'l Hosp., 551 S.W.2d at 36).
However, the source of nonprivileged material cannot be the peer review committee or any other entity or individual included within the protections of the committee privileges. Rather, a party must seek the documents and communications from a nonprivileged source. Brooks, 927 S.W.2d at 18. Brooks is properly read to privilege only the withholding of the fact that ordinary business records were reviewed by the committee, not the ordinary business records themselves. The peer review privilege protects the products of the peer review process: reports, records (including those produced for the committee's review as part of the investigative review process), and deliberations.
B
We now address the status of the documents in the representative sample.
i
Cline contends Living Centers waived its claim of privilege by failing to follow its own bylaws in not stamping a QA & A privilege statement on all documents claimed to be privileged. We disagree. Under the current rules of discovery, inadvertent disclosure does not automatically waive a claim of privilege. TEX.R. CIV. P. 193.3(d) & cmt. 4. Similarly, we hold a party's inadvertent failure to utilize its own internal procedure for identifying privileged documents does not automatically waive the privilege.
However, the absence of the QA & A stamp as called for in the bylaws and the reason for its absence could be relevant. Therefore, the trial court would not abuse its discretion by weighing the lack of indicia, including the reason for its absence, along with Ross's testimony, the privilege log, and the sample documents, in determining whether Living Centers met its burden to demonstrate that the documents at issue were part of the peer review process. See In re Carbo Ceramics, Inc., 81 S.W.3d 369, 373 (Tex.App.-Houston [14th Dist.] 2002, orig. proceeding) (noting that under Rule 193.4(a), if the trial court requires more than affidavits or evidence from a hearing, the party asserting privilege must produce the documents for in camera inspection).
ii
Of all the sample documents submitted to this court, the only ones that may be privileged are the Incident Report QA & A logs and the Weekly Pressure Ulcer QA & A logs. As discussed, because the trial court limited its in camera review of the submitted documents to whether the documents were marked with a QA & A committee stamp, further review of the documents is needed. We leave the final determination of privilege for the sample Incident Report logs and Weekly Pressure Ulcer logs to the trial court.
*261 The remaining documents submitted are clearly outside the privilege because: (1) they do not pertain to physicians; (2) they pertain to nurses, but Living Centers did not establish a nurse peer review committee consistent with the statutory requirement; or (3) they are contemporaneous patient records made in the ordinary course of treatment and not created for committee review, evaluation, or investigation.
The trial court's evidentiary determinations are reviewed for abuse of discretion and a trial court abuses its discretion when it fails to conduct an adequate in camera inspection of documents when such review is critical to evaluation of a privilege claim. In re E.I. DuPont de Nemours and Co., 136 S.W.3d 218, 222 (Tex. 2004)(per curiam). We find such an abuse of discretion in this case and direct the trial court to conduct further in camera review of those documents that may be privileged pursuant to this opinion.
V
Notwithstanding the applicable privileges in this case, Cline argues that Living Centers failed to meet its burden of proof and waived its claim of privilege by providing only a sample of the documents for in camera inspection. We disagree. A party may assert a privilege by withholding documents and stating in its response to a discovery request: "(1) information or material responsive to the request has been withheld, (2) the request to which the information or material relates, and (3) the privilege or privileges asserted." TEX.R. CIV. P. 193.3(a). Upon request, the withholding party must serve a privilege log describing the withheld materials, without revealing privileged information, and asserting a specific privilege for each withheld item. Id. In addition to the privilege log, a prima facie case for the privilege must be established by testimony or affidavit. A prima facie case is required to prevent trial judges from being compelled to inspect untold numbers of documents. In re E.I. DuPont de Nemours, 136 S.W.3d at 223. Thereafter, if the trial court determines an in camera inspection is required, the court may order the documents tendered or the party asserting the privilege may, on its own initiative, tender the documents to the trial court.
In short, Texas law recognizes that a party asserting privilege may initiate its claim and establish a prima facie case of privilege by submitting evidence short of tendering each and every document. In this case, Living Centers produced a privilege log, along with a supporting affidavit, and tendered a representative sample of documents, which the trial court reviewed. Consequently, we conclude Living Centers satisfied its burden in asserting privilege by providing a representative sample of the documents at issue. This is not to say, however, that a representative sample of documents would be appropriate in every case and we leave that determination to the discretion of the trial court.
VI
In this case, the trial court considered only the name of the documents or whether the documents were stamped with the QA & A indicia, and failed to consider other determining factors, including the purpose for which the documents were created. Upon further review, the trial court must determine: (1) whether the existing evidence establishes the privileged status of any documents without the need for an in camera inspection; (2) whether to conduct an in camera inspection of additional documents or categories of documents in light of this opinion; (3) whether the additional documents, if furnished, are *262 privileged; and (4) whether Living Centers, by failing to produce all documents for in camera inspection, failed to satisfy its burden to prove privilege. See TEX.R. CIV. P. 193.4; In re DuPont de Nemours, 136 S.W.3d at 223 (the burden to prove documents are privileged remains on the party asserting the privilege).
We conclude Living Centers is entitled to mandamus relief because the trial court abused its discretion by using only superficial indicators to deny Living Centers's privilege claim as to nearly all the documents at issue. We direct the trial court to vacate its discovery order of December 15, 2003, with respect to the requests for production and determine whether, upon further examination, any documents withheld by Living Centers may be privileged. We are confident the trial court will promptly comply. Our writ will issue only if it does not.
Justice WILLETT did not participate in the decision.
NOTES
[1] Occupations Code sections 151.002, 303.001 and 303.006 were amended in 2003, but these amendments did not change the provisions applicable to this case. See Act of June 10, 2003, 78th Leg., R.S., ch. 202, § 1, 2003 Tex. Gen. Laws 833; Act of June 20, 2003, 78th Leg., R.S., ch. 876, § 11, 2003 Tex. Gen. Laws 2683; Act of June 20, 2003, 78th Leg., R.S., ch. 553, § 2.018, 2003 Tex. Gen. Laws 1893.
[2] Chapters 151-165 are under the Subtitle "Physicians," also known as the "Medical Practice Act." Chapters 101-110 are under the previous Subtitle "Provisions Applying to Health Professions Generally." See TEX. OCC. CODE chs. 101-110, 151-165.
[3] The pertinent language in Health & Safety Code section 161.032 and Occupations Code section 160.007(formally art. 4495b) has not materially changed since the 1996 cases. See Act of May 21, 1999, 76th Leg., R.S., ch.909, §§ 5-6, 1999 Tex. Gen. Laws 3622, 3623-24.
[4] Although apparently not at issue in this case, we note that contemporaneous records of deliberations by the peer review committee itself, including discussions about prospective committee operating procedures, would fall within the medical peer review privilege. These are the "proceedings" of a peer review committee.
[5] An additional privilege attaches to QA & A committees under the Texas Administrative Code: "Texas or the Secretary of Health and Human Services may not require disclosure of the records of the [QA & A] Committee except insofar as such disclosure is related to the compliance of the committee with the requirements of subsection (b) of this section." Id. § 19.1917(c). Subsection (b) requires quarterly meetings and development and implementation of plans to identify and correct quality deficiencies. Id. § 19.1917(b). This administrative code privilege was adopted effective May 1, 1995, 20 Tex. Reg. 2393 (1995), and was authorized by Health and Safety Code Chapter 242, Human Resources Code, Title 2, Chapters 22 and 32, and Texas Civil Statutes, Article 4413(502), § 16.19 Tex. Reg. 8401 (1994). The privilege bolsters the administrative code's stricture that "[g]ood faith attempts by the committee to identify and correct quality deficiencies may not be used as a basis for sanctions." 40 TEX. ADMIN. CODE § 19.1917(d). | 01-03-2023 | 06-06-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2441298/ | 967 N.E.2d 6 (2012)
TRUST NO. 6011, LAKE COUNTY TRUST COMPANY, Trustee, Simon Beemsterboer, and Victoria J. Beemsterboer, Appellants-Defendants,
v.
HEIL'S HAVEN CONDOMINIUMS HOMEOWNERS ASSOCIATION, Appellee-Plaintiff.
No. 43A05-1108-PL-433.
Court of Appeals of Indiana.
April 17, 2012.
*8 Karl L. Mulvaney, Shannon D. Landreth, Bingham Greenebaum Doll LLP, Indianapolis, IN, Michael E. Armey, Warsaw, IN, Sheldon L. Lebold, Orland Hills, IL, Attorneys for Appellants.
*9 Stephen R. Snyder, Randall L. Morgan, Snyder Morgan LLP, Syracuse, IN, Attorneys for Appellee.
OPINION
CRONE, Judge.
Case Summary
Simon and Victoria J. Beemsterboer reside on property ("the Beemsterboer Property") owned by Trust No. 6011, Lake County Trust Company, Trustee. Victoria is the beneficiary of the Trust. The Beemsterboer Property shares a border with Heil's Haven Condominiums. When the condominiums were developed, several agreements were executed between the Heil's Haven Condominiums Homeowners Association ("the Association") and the previous owners of the Beemsterboer Property, granting various easements to each to use portions of the others' property. The Beemsterboers attempted to develop their property in a manner that allegedly infringed on the easements originally granted to the Association. The Association filed suit against the Trust and the Beemsterboers (collectively referred to as "the Beemsterboers") seeking to enjoin the Beemsterboers from improving their property in a manner that infringed on the easements, and the trial court granted the requested relief.
The Beemsterboers appeal, arguing that the trial court erred in granting injunctive relief because (1) one of the agreements has terminated; (2) the improvements can be made in a manner that does not infringe upon the Association's existing easements to use the Beemsterboer Property; and (3) the Association's encroachment is greater than that permitted by agreement. We conclude that one agreement has terminated and that the improvements can be made in a manner that does not infringe upon the Association's continuing easements. We further conclude that the trial court's order deals effectively with the Association's encroachment. Therefore, we affirm in part and reverse in part.
Facts and Procedural History
The Beemsterboer Property is located in Kosciusko County, west of and adjacent to property occupied by Heil's Haven Condominiums. These properties extend roughly from Hatchery Road on the south to Lake Wawasee on the north. The properties were once a single parcel owned by James and Jane Fry. The Frys lived in a residence on the west side of the property and operated a motel on the east side. In the 1980s, the Frys converted the motel into Heil's Haven Condominiums and divided the single parcel into two parcels, each with frontage on Lake Wawasee: a western parcel with the personal residence and an eastern parcel for the condominiums. Ultimately, the Frys' western parcel came into the possession of the Beemsterboers.
When Heil's Haven was developed, the Frys and the Association executed several written agreements creating easements for the shared use of property and an agreement granting the Association an easement over a portion of the Frys' property.[1]*10 All relevant documents were duly recorded. Two are titled "Cross License Agreement," one dealing with the use of a water pump and a sidewalk ("the Water and Walkway Easement"), and the other dealing with a septic system shared by the two parcels ("the Septic Easement"). Exs. A and B. Two other agreements grant an easement to the Association only ("the Replacement Walkway Easement" and "the Encroachment Agreement"). Exs. C and D.
The Water and Walkway Easement granted the Frys, and their successors and assigns, "a license for use of the pump and utility house, mechanical equipment therein and lines connecting said pump and utility house to [the Frys' property]" and granted the Association, and its successors and assigns, the use of a paved sidewalk running along the east side of the Frys' property (now the Beemsterboer Property) for "ingress and egress" to Lake Wawasee. Ex. B. at 3. The walkway easement granted in the Water and Walkway Easement is identified in a 2010 Survey as "Cross License Agreement-Ingress and Egress." Plaintiff's Ex. S. The Water and Walkway Easement provided in relevant part,
3. Use of License Premises. Use of [the sidewalk] is confined to the present uses of [the Association], the present buildings thereon and the present lack of access to the lakefront of [the Association] by direct walkway.....
4. Use of License Premises. Use of [the pump and utility house, etc.] is confined to present uses of [the Frys], the present buildings thereon, and the present lack of individual water well [on the Frys' property].....
....
6..... Should the water lines connecting said pump and utility house with [the Frys' property] fail to such an extent that a water supply is not available to [the Frys' property], then this Cross License Agreement shall terminate, ten (10) days after such failure, and all rights granted hereunder shall terminate.
7. Termination of License. The licenses granted herein may be terminated by agreement of the parties, duly recorded, or shall terminate automatically as hereinabove described or such shall also terminate [a]utomatically at such time as [the Association] has walkway access to the lakefront portion [of the Association's property] by means other than [the sidewalk].
Ex. B. at 3 (emphases added).
In the event the Water and Walkway Easement terminated, the Frys and the Association had a backup plan: the Replacement Walkway Easement. Specifically, the Replacement Walkway Easement granted an easement to the Association to use a three-foot-wide area on the Frys' property (now the Beemsterboer Property) when "the current License for ingress and egress to the lakefront of the Heil's Haven [Condominiums] no longer exists and at such time the [replacement walkway area] may be used for installation of a concrete sidewalk to be used by owners of Units in the Heil's Haven Condominiums or their guests." Ex. D. at 2.
*11 The Septic Easement granted an easement to both the Frys and the Association to use a common septic and filter bed system. One septic tank is on the Association's property and the other is on the Beemsterboer Property. The Septic Easement granted each party "a license for the location and use of two (2) septic tanks, one (1) sewage pump and one (1) filter bed." Ex. A. at 3. The Septic Easement further provided that "[e]xclusive use of the [licensed area] to either Fry or [the] Association is not hereby granted," and that "[t]he license granted herein may be terminated by agreement of the parties, duly recorded." Id. (emphasis added). Presently, the Beemsterboers do not require the use of the septic system, but the Association does.
Finally, the Encroachment Agreement permitted the Association to maintain a deck that encroached onto the Frys' property (now the Beemsterboer Property) "for so long as the wooden deck which constitutes such encroachment is not expanded, altered or modified in any manner and continues to be used as part of the [property] known as Heil's Haven Condominiums." Ex. C. at 2.[2] The 2010 Survey shows that the deck's encroachment is greater than that described in the Encroachment Agreement.[3] Ex. S. However, the deck has not been expanded, altered, or modified since the Encroachment Agreement was executed.
Subsequent to the development of Heil's Haven, the Frys sold their residence, and it was eventually purchased/inherited by Garry Bickel, the owner immediately prior to the Beemsterboers. During Bickel's ownership, a fire destroyed the residence and the water lines to the pump and utility house mentioned in the Water and Walkway Easement. Bickel built a new residence with its own water supply on his property. Bickel also installed a new sidewalk that he intended the condominium owners to use in the same manner as they had used the old sidewalk. Bickel believed that the new sidewalk was located wholly within the area licensed to the Association in the Water and Walkway Easement. Bickel later learned, however, that the new sidewalk extended farther onto his property than provided for in the Water and Walkway Easement. Currently, the sidewalk installed by Bickel is the only paved path that runs from Heil's Haven's parking lot to the lakefront. The condominium owners use the sidewalk to transport paddleboats, sailboats, and other equipment from the parking lot to the lakefront.
In 2008, Bickel sold the property to the Trust, and the Beemsterboers began residing there. In a March 2010 letter, Simon Beemsterboer informed the Association of his intent to install a fence along the parties' common property line. Plaintiff's Ex. Q. The proposed fence would enclose the Beemsterboers' yard, including the sidewalk installed by Bickel and the easement granted to the Association in the Water and Walkway Easement. Id. The fence would also enclose one of the septic tanks referred to in the Septic Easement.
Also that spring, the Beemsterboers began constructing a stairway from their second story deck. The stairway and its supporting posts lie wholly within the Beemsterboer Property. In other words, the stairway and posts are not in the walkway *12 area described in the Water and Walkway Easement. Tr. at 24, 105, 114. However, the construction of the Beemsterboers' stairway resulted in the removal of a portion of the edge of the sidewalk and degrades the usable width of the sidewalk. Apparently, this occurred because, as previously mentioned, the sidewalk installed by Bickel extended farther onto the Beemsterboer Property than the walkway area described in the Water and Walkway Easement.
On June 2, 2010, the Association filed a complaint for preliminary and permanent injunctions against the Beemsterboers seeking to enjoin them from constructing the fence and continuing construction of the staircase. That same day, the trial court issued a temporary restraining order granting the requested relief. On July 13, 2010, following an evidentiary hearing, the trial court entered a preliminary injunction prohibiting the Beemsterboers from constructing a fence or other structure obstructing the areas described in the Water and Walkway Easement and the Septic Easement. The Beemsterboers filed a counterclaim, alleging that the Water and Walkway Easement and the Septic Easement no longer served any purpose and/or were terminated and that Heil's Haven's deck encroachment should be removed because it is outside the encroachment area described in the Encroachment Agreement.
The trial court conducted a bench trial, ordered the parties to submit proposed findings of fact and conclusions thereon, and took the matter under advisement. The trial court adopted the Association's proposed findings of fact and conclusions thereon and entered a judgment ("the Judgment") that provides in relevant part as follows:
FINDINGS OF FACT
....
9. By letter dated March 19, 2010, [] Simon Beemsterboer, notified Condominium Association of his intent to install a fence along the common property line of the parties which, if installed, would prevent access of [the Association] over the ingress/egress license running from Condominium's roadside parking area to Condominium's lakefront over the area depicted as "Cross License AgreementIngress and Egress [ ]" on the [2010 Survey]. Exhibit Q.
10. The fence proposed by [the Beemsterboers] would also prevent access to a septic tank lid shown on [the 2010 Survey] which access is needed for the purpose of cleaning the septic tank which constitutes a part of the system utilized by Condominium for its connection to the Turkey Creek Regional Sewer District sewer line adjacent to Condominium property. Exhibit Q.
....
12. In the Spring of 2010, [the Beemsterboers] undertook a construction project by which a staircase from a second story deck on [their] property was relocated from the west side of the deck to the east side of the deck. This construction resulted in a destruction of a portion of the sidewalk utilized by Condominium owners and the east side staircase encroaches into the sidewalk area intended for use by Condominium owners and as reconstructed by Bickel. The newly constructed staircase prevents access by Condominium owners to the Condominium lakefront and in particular, obstructs the usable width of the sidewalk for the purpose of transporting items from the lakefront on the Condominium to the parking area of the Condominium. Exhibits K-P; Exhibit S.
*13 13. Condominium owners have no means of access from the roadside of Condominium property to the lakefront of Condominium property other than over and across [the license granted in the Water and Walkway Easement].
14. It is impractical for Condominium owners to relocate the two septic tanks partially on [the Beemsterboers'] property, which tanks are utilized for the connection by Condominium to the Turkey Creek Regional Sewer District sewer line.
15. With the exception of the portion of [the Water and Walkway Easement] providing for the sharing of the water supply and utility building, which terminated when a new well was installed on the Beemsterboer [P]roperty by Bickel, none of the other agreements have terminated.
CONCLUSIONS OF LAW
....
2. The fence proposed by [the Beemsterboers] would violate the provisions of [the Water and Walkway Easement and the Septic Easement].
3. The staircase installed by [the Beemsterboers] interferes with [the Association's] use of [the Water and Walkway Easement].
4. [The Association] is entitled to utilize, for ingress and egress purposes, the sidewalk reconstructed by Bickel on the Beemsterboer [P]roperty to its full extent even though such sidewalk may be shown to be slightly outside the boundaries of [the Water and Walkway Easement] as shown by [the 2010 Survey].
5. [The Beemsterboer Property] is subject to the terms and provisions of [the Water and Walkway Easement, the Septic Easement, the Encroachment Agreement, and the Replacement Walkway Easement], excepting only those provision of [the Water and Walkway Easement] which pertain to a water supply to the Beemsterboer [P]roperty.
JUDGMENT
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED:
1. [The Beemsterboers], and their successors and assigns, are permanently enjoined from obstructing [the Association's] use of the areas described in [the Water and Walkway Easement and the Septic Easement]. [The Beemsterboers] shall not place a fence which in any fashion blocks [the Association's] access to or use of such areas.
2. [The Beemsterboers] shall remove the staircase depicted on the [2010 Survey] and shall repair those portions of the sidewalk removed for the purpose of constructing such staircase.....
3. [The Beemsterboers] shall not in any fashion interfere with [the Association's] use of the reconstructed sidewalk, installed by Garry Bickel ... including that portion of the sidewalk immediately adjacent to [the Water and Walkway Easement] located outside the boundaries thereof.
4. [The Beemsterboers] and their successors and assigns are permanently enjoined from in any fashion interfering with [the Association's deck], the subject of [the Encroachment Agreement], even though the actual location of the deck encroachment may vary slightly from the description contained in the [the Encroachment Agreement].
Appellants' App. at 11-14.
The Beemsterboers filed a motion to correct error and a motion to stay the judgment. The trial court denied the first and granted the latter. The Beemsterboers appeal.
*14 Discussion and Decision
Standard of Review
When, as here, issues are tried upon the facts by the court without a jury, Trial Rule 52 provides that a trial court "shall find the facts specially and state its conclusion thereon" either "[u]pon its own motion" or upon "the written request of any party filed with the court prior to the admission of evidence." "Our standard of review on judgments under Trial Rule 52 differs slightly depending upon whether the entry of specific findings and conclusions comes sua sponte or upon [written] motion by a party." Argonaut Ins. Co. v. Jones, 953 N.E.2d 608, 614 (Ind.Ct.App. 2011), trans. denied (2012). According to the record before us, neither party filed a written request for findings of fact and conclusions thereon, and therefore the trial court entered findings and conclusions sua sponte.
Where the trial court enters specific findings sua sponte, [] the specific findings control our review and the judgment only as to the issues those specific findings cover. Where there are no specific findings, a general judgment standard applies and we may affirm on any legal theory supported by the evidence adduced at trial.
Id.
We apply the following two-tier standard of review to sua sponte findings and conclusions: whether the evidence supports the findings, and whether the findings support the judgment. Findings and conclusions will be set aside only if they are clearly erroneous, that is, when the record contains no facts or inferences supporting them. A judgment is clearly erroneous when a review of the record leaves us with a firm conviction that a mistake has been made. We consider only the evidence favorable to the judgment and all reasonable inferences flowing therefrom, and we will neither reweigh the evidence nor assess witness credibility.
Barkwill v. Cornelia H. Barkwill Revocable Trust, 902 N.E.2d 836, 839 (Ind.Ct. App.2009) (citations and quotation marks omitted), trans. denied. "[W]hile we defer substantially to findings of fact, we do not do so to conclusions of law." McCauley v. Harris, 928 N.E.2d 309, 313 (Ind.Ct.App. 2010) (citation omitted), trans. denied (2011). "We evaluate questions of law de novo and owe no deference to a trial court's determination of such questions." Id.
I. The Water and Walkway Easement
The Beemsterboers argue that the trial court erred in finding that one, but not both, of the easements granted in the Water and Walkway Easement remains in effect. They challenge Finding 15 and Conclusions 2 through 5 and ask us to reverse Paragraphs 1 through 3 of the Judgment. Appellants' App. at 12-14. The trial court found that the easement granted to the Frys, and their successors and assigns, to use the pump and utility house, etc., had terminated but that the easement for ingress and egress granted to the Association had not. The Beemsterboers contend that, pursuant to its express terms, the Water and Walkway Easement terminated in its entirety when the fire burned down Bickel's residence.
To resolve this issue we must construe the terms of a written contract, a pure question of law. Therefore, our standard of review is de novo. Drees Co., Inc. v. Thompson, 868 N.E.2d 32, 38 (Ind.Ct. App.2007), trans. denied. Fundamental rules of construction guide us here. "Unless the terms of a contract are ambiguous, they will be given their plain and ordinary meaning." Tanton v. Grochow, 707 *15 N.E.2d 1010, 1013 (Ind.Ct.App.1999). "The terms of a contract are not ambiguous merely because controversy exists between the parties concerning the proper interpretation of terms." Id. "Where the language is not uncertain or ambiguous the intention of the parties is determined by a proper construction of the language of the instrument." GTA v. Shell Oil Co., 171 Ind.App. 647, 650, 358 N.E.2d 750, 752 (1977).
More specifically, we have said:
"The nature, extent and duration of an easement created by an express agreement or grant must be determined by the provisions of the instrument creating the easement. An easement is an interest in land and may be held in fee. A fee simple or lesser estate in land may be created so as to be defeasible. While an easement is normally held in fee, it is well established that an easement, like any other estate in land, may be held as a determinable fee. An easement which is held as a determinable fee will terminate upon the happening of the event upon which its existence is conditioned without any action by the grantor of the estate or his successors in interest."
Larry Mayes Sales, Inc. v. HSI, LLC, 744 N.E.2d 970, 972-73 (Ind.Ct.App.2001) (quoting Erie-Haven, Inc. v. First Church of Christ, 155 Ind.App. 283, 289, 292 N.E.2d 837, 841 (1973)) (emphasis added).
Paragraph 6 of the Water and Walkway Easement states, "Should the water lines connecting said pump and utility house with [the Frys' property] fail to such an extent that a water supply is not available to [the Frys' property], then this Cross License Agreement shall terminate." Ex. B. at 3 (emphasis added). The Association asserts that "this" refers only to the topic of Paragraph 6; namely, the water easement. We disagree. "This" obviously refers to "Cross License Agreement," which is the title of the instrument and thus encompasses both easements granted therein.
This construction is consistent with the rest of the instrument. Paragraph 7 governs termination and applies to the "licenses" granted in the Water and Walkway Easement. Paragraph 7 sets forth three events that will terminate both easements:
The licenses granted herein may be terminated by agreement of the parties, duly recorded, or shall terminate automatically as hereinabove described or such shall also terminate [a]utomatically at such time as [the Association] has walkway access to the lakefront portion [of the Association's property] by means other than [the sidewalk].
Id. One of the events that terminates the "licenses" is "as hereinabove described," which clearly refers to the immediately preceding paragraph, the only other place termination is addressed.
We conclude that the Water and Walkway Easement automatically terminated by its own express terms when the Bickel residence burned down and the water supply failed. Therefore, we conclude that the trial court clearly erred in determining in Finding 15 that the provisions of the Water and Walkway Easement pertaining to the Association's easement for ingress and egress are still in effect.[4] Further, *16 Conclusions 3 and 4 are clearly erroneous, as are 2 and 5 to the extent that they are based on Finding 15. Accordingly we reverse the following: the portion of Paragraph 1 of the Judgment that permanently enjoins the Beemsterboers from obstructing the Association's use of the walkway easement described in the Water and Walkway Easement and from placing a fence that blocks the Association's access to or use of that area; Paragraph 2 of the Judgment, ordering the Beemsterboers to remove the staircase and repair the sidewalk; and Paragraph 3 of the Judgment, prohibiting the Beemsterboers from interfering with the reconstructed sidewalk.[5] Appellants' App. at 13-15.
II. The Septic Easement
The Beemsterboers also contend that the trial court clearly erred in determining in Finding 10 that their proposed fence would prevent the Association's access to a septic tank lid. Finding 10 underlies both Conclusion 2, in which the trial court concluded that the fence would violate the Septic Easement, and part of Paragraph 1 of the Judgment, in which the trial court permanently enjoined the Beemsterboers from obstructing the Association's use of or placing a fence which in any fashion blocks the Association's access to the easement area described in the Septic Easement. The Beemsterboers do not argue that the Septic Easement terminated, but rather that the Septic Easement does not require that the septic system be maintained in an unfenced area. The Beemsterboers further argue that the Association would have access to the easement area described in the Septic Easement either through a gate opening, a removable piece of fence, or other accommodation presented at trial. Appellants' Br. at 26 (citing Tr. at 31, 112-13). The Association baldly asserts that the fence would prevent access to the septic tank and do not address whether the accommodations offered by the Beemsterboers would provide adequate access.
In resolving this issue we observe that
[i]t is well established that easements are limited to the purpose for which they are granted. The owner of an easement, known as the dominant estate, possesses all rights necessarily incident to the enjoyment of the easement. The dominant estate holder may make repairs, improvements, or alterations that are reasonably necessary to make the grant of the easement effectual. The owner of the property over which the easement passes, known as the servient estate, may use his property in any manner and for any purpose consistent with the enjoyment of the easement, and the dominant estate cannot interfere with the use. All rights necessarily incident to the enjoyment of the easement are possessed by the owner of the dominant estate, and it is the duty of the servient owner to permit the dominant owner to enjoy his easement without interference. The servient owner may not so use his land as to obstruct the easement or interfere with the enjoyment thereof by the owner of the dominant estate. Moreover, the owner of the dominant estate cannot subject the servient estate to extra burdens, any more than the holder of the servient estate can materially impair or unreasonably interfere with the use of the easement.
*17 McCauley, 928 N.E.2d at 314 (citations and quotations omitted).
Our review of the record before us reveals that at trial, a condominium owner testified that the Association would have access to the septic tank on the Beemsterboer Property if a gate was built into the Beemsterboers' proposed fence. Tr. at 31. In its appellee's brief, the Association does not cite to any evidence in the record that supports the trial court's finding that the fence would block access to the septic tank. The Association does not argue that the accommodations offered by the Beemsterboers would be insufficient. Accordingly, we conclude that Finding 10 and Conclusion 2 are clearly erroneous. Nevertheless, we observe that Paragraph 1 of the Judgment permanently enjoins the Beemsterboers from "obstructing" the use of the area described in the Septic Easement and prohibits them from placing "a fence which in any fashion blocks" the Association's access to or use of the area described in the Septic Easement. A fence that provides ready access to the septic tank would not obstruct or block the Association's access to the area described in the Septic Easement. However, a fence that does not provide ready access to the septic tank would obstruct and block the Association's access. Therefore, we need not reverse this portion of the Judgment.
III. The Encroachment Agreement
Finally, we turn to the Beemsterboers' challenge to Paragraph 4 of the Judgment, in which the trial court permanently enjoined them "from in any fashion interfering with the [Association's] deck, ... even though the actual location of the deck encroachment may vary slightly from the description contained in [the Encroachment Agreement]." Appellants' App. at 14. The Beemsterboers present two arguments. First, they assert that it was error for the trial court to grant the Association the right to encroach upon their property beyond that described in the Encroachment Agreement. However, they "only request that the deck be cut back to conform to the easement in the event the order to remove the stairway is affirmed." Appellants' Br. at 28; Appellants' Reply Br. at 15. Because we have reversed the trial court's order to remove the stairway, we need not address this issue.
Second, the Beemsterboers argue that Paragraph 4 permanently enjoins them from "any" interference with the deck "in all circumstances." Appellants' Br. at 27. They note that the Encroachment Agreement permits the Association to maintain the deck "for so long as the wooden deck which constitutes such encroachment is not expanded, altered or modified in any manner and continues to be used as part of the [property] known as Heil's Haven Condominiums." Ex. C. at 2. The Beemsterboers' reading of the trial court's order is overly expansive. We read the trial court's order as restricting the Beemsterboers from interfering with the deck based on the fact that its current and historical encroachment is somewhat greater than that described in the Encroachment Agreement. The trial court's order does not affect the terms of the Encroachment Agreement. Accordingly, we affirm Paragraph 4 of the Judgment.
Conclusion
We affirm the portion of Paragraph 1 of the Judgment pertaining to the Septic Easement, as well as Paragraph 4. We reverse the portion of Paragraph 1 pertaining to the Water and Walkway Easement, as well as Paragraphs 2 and 3.
Affirmed in part and reversed in part.
FRIEDLANDER, J., and BAILEY, J., concur.
NOTES
[1] Although these agreements use the term "license," the interests conveyed therein are effectively easements, and the parties treat them as such. See 25 Am.Jur.2d Easements and Licenses § 2 (2012) ("While it has been said to be difficult to distinguish an easement from a license in real property, easements and licenses are distinct in principle. An easement is more than a mere personal privilege in that it is a grant of limited use of land which burdens the servient estate for the benefit of the dominant estate, whereas a license merely confers a personal privilege to do some act or acts on the land.") (footnotes omitted); Id. at § 117 ("A license in real property is the permission or authority to engage in a particular act or series of acts upon the land of another without possessing an interest therein. It is a personal, revocable, and unassignable privilege, conferred either by writing or parol."); Indus. Disposal Corp. of Am. v. City of E. Chicago, Dep't of Water Works, 407 N.E.2d 1203, 1205-06 (Ind. Ct.App.1980) ("To distinguish the legal relationship `license' from the more substantial relationship `easement,' license should be limited to a revocable relationship. Under such a classification, an irrevocable relationship would constitute an easement ..., no matter how created, because an irrevocable license in legal effect is no different than an easement.") (citation omitted).
[2] An earlier encroachment agreement contains the same description of the Frys' property encroached upon by Heil's Haven's deck. Plaintiff's Ex. X. The record does not indicate why a second identical agreement was executed, but it is not relevant to our analysis.
[3] The Association argues that the Frys were aware of the deviation and consented to it. Tr. at 52-53.
[4] The Association argues that the two easements granted in the Water and Walkway Easement are unrelated. That argument disregards that the parties chose to combine the easements in one agreement entitled "Cross License Agreement." The Association also argues that the Frys would not have been able to develop the condominiums if the condominiums did not have access to the lakefront. Although the necessity of a walkway illuminates the purpose of the Water and Walkway Easement, it does not affect the construction of its termination provisions.
[5] We observe that the Replacement Walkway Easement grants the Association an easement to install a concrete sidewalk for purposes of ingress and egress to the lakefront. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2102701/ | 108 Ill. App. 3d 301 (1982)
438 N.E.2d 1305
THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,
v.
LEOTIS BEASLEY, Defendant-Appellant.
No. 80-1257.
Illinois Appellate Court First District (4th Division).
Opinion filed July 29, 1982.
Rehearing denied August 25, 1982.
*302 Frederick F. Cohn, of Chicago, for appellant.
Richard M. Daley, State's Attorney, of Chicago (Michael L. Shabat, Casimir J. Bartnik, and Raymond F. Brogan, Assistant State's Attorneys, of counsel), for the People.
Judgment affirmed.
JUSTICE LINN delivered the opinion of the court:
Defendant, Leotis Beasley, was charged by indictment with rape and robbery (Ill. Rev. Stat. 1977, ch. 38, pars. 11-1, 18-1). Following a jury trial in the circuit court of Cook County, defendant was found guilty of rape and not guilty of robbery. He was sentenced to six years in the Illinois State Penitentiary.
On appeal, defendant contends that (1) the State deprived him of *303 a fair trial by failing to request an instruction informing the jury that a prior inconsistent statement used at trial for impeachment purposes could not be considered as substantive evidence; and that (2) the trial judge should have recused himself.
We affirm defendant's conviction.
FACTS
Evidence presented at trial disclosed that on January 11, 1979, at about 1 a.m., the 18-year-old victim, a ward of the State, was walking home from the CTA elevated train stop at Addison and Lincoln following a visit that evening with her caseworker. As she walked, a male pedestrian on the opposite side of the street followed her for a few blocks, then suddenly crossed the street, stopped and questioned her, threatened her with a gun, and robbed her.
While the victim was attempting to empty her pockets, two other men approached, one from a nearby alley and the other down the middle of the street. Two of the men then took her by the arms, forced her through a gangway between two buildings, pushed her to the ground in an open courtyard area, and threatened to kill her if she screamed. The victim testified that as one of the two men held her down, the other pulled down her pants and raped her. After a few minutes the two men changed places. As the second man finished, he cut the side of her throat with a knife. The victim screamed, and the two men ran.
The victim then attempted to get help by running from door to door along the back of the apartment building, trying to awaken someone. Thomas Garcia, the occupant of the first floor apartment, heard her screams and let her in. He immediately called the police, and the victim called her caseworker. The police arrived within minutes, took a description of the two alleged rapists from the victim, and broadcast it to all patrol cars in the area. Using the description the victim provided, the police apprehended a black man on the Addison elevated train platform and brought him to the sidewalk in front of the Garcia apartment for a showup. The victim, looking through the window, positively identified him as one of the two men who had raped her.
Two policemen then took the victim and her caseworker to the emergency room of Ravenswood Hospital, where she was examined and treated for a knife wound to the neck, abdominal abrasions, and possible sexual assault. Examination of specimens taken by the attending physician revealed the presence of nonmotile sperm, and the attending physician recovered one foreign hair from the surface of *304 her abdomen. The victim was released about one hour later, whereupon the two policemen drove her to the area police station in order to file a complaint and view a lineup.
At the first six-man lineup, held on January 11, 1979, within four hours of the assault, the victim positively identified Stanley Williams, originally a co-defendant in this case, and Johnny Hunt as two of the three men involved in the rape and robbery. On the following day, January 12, 1979, the victim viewed a second six-man lineup and picked out defendant Beasley as the other man who had raped her. Acting on information gained after the arrest of Williams, the police had obtained an arrest warrant and had arrested Beasley at his apartment early on the morning of January 12, 1979.
Williams and Beasley were subsequently charged by indictment with the rape and robbery of the victim (Ill. Rev. Stat. 1977, ch. 38, pars. 11-1, 18-1). Following several pretrial hearings at which several witnesses were extensively questioned and cross-examined, the trial judge denied defendants' motions to quash the arrest, to suppress evidence, to suppress identification, and to grant them both free transcripts.
Approximately one month after the denial of the last pretrial motion, Williams's attorney learned that the trial judge's close relative was the complaining witness in an unrelated case in which a black man was accused of raping a young white woman. Claiming that the judge was prejudiced and biased, alleged proof of which was his denial of all defendants' pretrial motions, attorneys for both defendants filed a motion to dismiss the charges or, in the alternative, to vacate all the previous rulings and to substitute judges. After a hearing, the trial judge also denied this motion. At this point, defendant Williams withdrew his not-guilty plea, entered a plea of guilty, and was sentenced to concurrent terms of 13 years for rape and 7 years for robbery.
At defendant Beasley's trial, the State's case-in-chief began with testimony from personnel at Ravenswood Hospital establishing the laboratory procedures by which sperm was discovered in a sample of vaginal fluid taken from the victim and a hair found on her abdomen was determined to be of the same type as Williams's pubic hair. Police officers then testified about the procedures used to photograph the physical evidence, the transfer of evidentiary material to the police crime lab, and the specific steps taken in both the arrest of defendant Beasley and the conduct of his lineup. The victim related the story of the robbery, the rape, her attempts to get help, the showup outside the Garcia apartment, and the two lineups. Although cross-examined at length about the placement of the porch lights in the courtyard *305 area, she maintained that during the 20 minutes of the double rape, sufficient bright light came from one or more porch lights to enable her to have a clear, continuous look at both men.
The defendant's case-in-chief consisted of testimony by Beasley, his fiancee Cynthia Patrick, with whom he was living, and his friend, Troy Burks. In their testimony, Beasley, Patrick, and Burks all said that Beasley had spent the evening of January 11, 1979, at Patrick's apartment eating dinner, playing chess, and discussing the Bible for a report he was writing for a class at Kennedy-King College. Patrick testified that Beasley's cousin, Johnny Hunt, was temporarily living with them. She also stated that Beasley and Williams, formerly close associates, were no longer friends.
To counter Beasley's alibi evidence, the State called Williams as a rebuttal witness. When asked the identity of the two companions who had participated in the rape and robbery with him, Williams named Johnny Hunt and one Michael Smith. Thereupon, the State requested and was granted leave to question Williams as a hostile witness pursuant to Supreme Court Rule 238 (73 Ill.2d R. 238). The State then produced a transcript of the testimony Williams had given during his guilty plea hearing and proceeded to ask him if he remembered each of five specific questions and answers in which he had named Johnny Hunt and Leotis Beasley as his companions in the rape and robbery of the victim. Williams repeatedly answered that he did not remember the testimony he had given at his plea hearing. Following the State's attempted impeachment of Williams, the defense rested.
On the following day, both sides presented closing arguments. The jury was then read the instructions previously agreed upon at the instruction conference, and they retired to deliberate. On the following afternoon, they returned a verdict finding Beasley not guilty of robbery and guilty of rape. Beasley was then sentenced to the Illinois State Penitentiary for a term of six years.
OPINION
Defendant's first contention is that the prosecution committed reversible error by failing to offer an instruction informing the jury that a prior inconsistent statement introduced to impeach a witness's in-court testimony may not be considered as substantive evidence of guilt. In the instant case, Williams, originally Beasley's co-defendant, had told the attorneys for both defense and prosecution that he would testify in the same way he had testified at his guilty plea hearing, i.e., naming Beasley as the co-participant in the rape. It is clear that Williams's actual rebuttal testimony surprised the prosecution by naming *306 as the third participant in the rape and robbery one Michael Smith instead of Beasley. Williams, when confronted with his prior testimony naming Beasley as the second rapist, simply stated that he didn't remember what he had previously said under oath. Beasley now claims that because the jury was never instructed to use the impeachment testimony only to judge the credibility of the witness, the jurors improperly regarded Williams's prior statement as substantive evidence of Beasley's guilt.
1, 2 As a general rule of law, a defendant who neither offers his own jury instruction nor objects to the State's instruction waives his right to raise that claim of error on appeal. (People v. Garza (1981), 92 Ill. App. 3d 723, 415 N.E.2d 1328.) Beasley admits that he did not offer an instruction, he did not object to the State's offered instruction, and he did not mention the omission of a limiting instruction in his post trial motion. However, the appellate court has authority by rule to recognize plain errors or defects affecting substantial rights even though they were not brought to the attention of the trial court. (73 Ill.2d R. 615(a).) Our initial determination, therefore, must be to decide whether the omission of a limiting instruction in this case was so prejudicial that it amounted to plain error. In such a case, the defendant will not be held to have waived his claim of error on appeal by failing to raise that issue before the trial court in a timely fashion.
3, 4 The underlying reason for disqualifying witnesses' prior inconsistent statements as direct evidence of defendants' guilt is that such statements are usually unsworn hearsay and thus have no substantive testimonial value. (See People v. Paradise (1964), 30 Ill. 2d 381, 196 N.E.2d 689.) While impeachment of a witness by use of a prior contradictory statement is acceptable, it "has never been entirely satisfactory because of the difficult mental operation it imposes upon the jurors * * * [by requiring them to] `consider [the statement] for one purpose but avoid being influenced by it for another purpose.'" (People v. Tate (1964), 30 Ill. 2d 400, 403-04, 197 N.E.2d 26, 28, quoting Annot., 133 A.L.R. 1454, 1466 (1941).) In order for us to ascertain whether in the instant case the inadequately limited impeachment evidence resulted in reversible as opposed to harmless error, we must make the key determinations of (1) whether the prior statement bears any independent indicia of reliability, and (2) whether sufficient competent evidence had already been admitted reasonably to insure that the incompetent evidence did not have a prejudicial influence on the minds of the jury.
In support of his argument that the failure to give a limiting instruction amounted to plain error, defendant Beasley presents several *307 cases in which the same omission was held to be so grossly prejudicial that reversal of those defendants' convictions was necessary. In each of those cases, however, the prior contradictory statement was either unsworn or insufficiently corroborated by other competent evidence so that it appeared probable that the jurors had relied on the incompetent evidence in reaching their decision. The unqualified impeachment evidence judged to be reversible error in most of these cases involved prior unsworn statements, some allegedly coerced, made by co-defendants (People v. Tate (1964), 30 Ill. 2d 400, 197 N.E.2d 26; People v. Tunstall (1959), 17 Ill. 2d 160, 161 N.E.2d 300; People v. Taylor (1978), 66 Ill. App. 3d 907, 384 N.E.2d 558; People v. Fields (1975), 31 Ill. App. 3d 458, 334 N.E.2d 752; People v. Dandridge (1970), 120 Ill. App. 2d 209, 256 N.E.2d 676) or informers (People v. Paradise (1964), 30 Ill. 2d 381, 196 N.E.2d 689). Further, in Fields, Tunstall, and Tate, the information in the prior inconsistent statement was dwelt on excessively, read into the record more than once, emphasized in the closing statement, or some combination of these. None of the prior statements used to impeach in these cases had any independent indicia of reliability.
The second reason reversals were granted in some of the cases cited by defendant Beasley is that the weakness of the rest of the prosecution's case rendered it highly probable that the jury would not have returned a verdict of guilty unless they had been improperly influenced by the prior contradictory statement, which had been introduced ostensibly only to impeach a witness's credibility. In People v. Fields (1975), 31 Ill. App. 3d 458, 334 N.E.2d 752, the victims could not identify the defendant; the only corroboration of the defendant's participation in the crime, other than the impeaching statement, came from an "undisclosed" police informant. In People v. Taylor (1978), 66 Ill. App. 3d 907, 384 N.E.2d 558, the defendant's identification as a burglary suspect came through the prior inconsistent statement of one co-defendant that corroborated only one of the versions of the story given by a second co-defendant.
Also in this second category of cases, those in which insufficient competent evidence was present to support a guilty verdict beyond a reasonable doubt, two cases cited by defendant Beasley need special examination. In People v. Riley (1978), 63 Ill. App. 3d 176, 379 N.E.2d 746, and People v. Wright (1965), 65 Ill. App. 2d 23, 212 N.E.2d 126, the extrajudicial statements in question were not prior inconsistent statements used to impeach a witness's credibility, but instead were occurrence witnesses' hearsay statements repeated in police officers' testimony. In each case, the only evidence involving the *308 defendant in the crime was the testimony of the complaining witness. At trial, the police officers who had participated in the arrests testified that the complaining witness had told them the defendant had committed the crime. "The effect of such additional statements was to give the impression to the jury that the evidence against defendant was corroborated." (People v. Wright (1965), 65 Ill. App. 2d 23, 28, 212 N.E.2d 126, 128.) The court held that the officers' statements were inadmissible hearsay and their admittance prejudicial error.
It appears clear to us that the situation in the instant case is significantly different from that in all the cases presented by defendant as authoritative precedent. The pivotal differences are that Williams's prior inconsistent statement bears independent indicia of reliability in that it was sworn testimony given under oath in a judicial proceeding. Further, the statement was neither long, repeated, nor dwelt on by the prosecution. (See People v. Tate (1964), 30 Ill. 2d 400, 197 N.E.2d 26; People v. Fields (1975), 31 Ill. App. 3d 458, 334 N.E.2d 752.) Finally, we believe that sufficient competent evidence had been presented for a jury to find defendant Beasley guilty of rape.
At oral argument, counsel for defendant Beasley concluded by saying, "Your Honors, we stand on People v. Wright [(1965), 65 Ill. App. 2d 23, 212 N.E.2d 126]." It appears clear to us that Wright is inapposite, dealing as it does with a totally uncorroborated identification by the complaining witness. Defendant Beasley would have us believe that the identification by the victim, the complaining witness in the instant case, is equally uncorroborated. A review of the two cases reveals the key difference: whereas in Wright, the hearsay which appeared to corroborate the victim's identification was merely a verbal repetition of that same victim's identification, the identification by the victim here was corroborated through another source entirely, namely Williams's prior judicial testimony.
5, 6 In summary, we find that although trial error was committed by omitting an instruction limiting the jury's consideration of Williams's prior contradictory statement to the matter of his credibility, that error was harmless in light of the reliability of the statement and the other competent evidence offered. Consequently, we further hold that defendant Beasley's failure to raise the issue in a timely fashion results in waiver of the issue on appeal.
The second issue raised on appeal is whether the trial judge should have recused himself, and thereby granted defendant's motion for a substitution of judges. Defendant Beasley claims that because the trial judge's relative had been the victim of rape by a black man some four years previously, the trial judge is presumptively biased and *309 was unable to maintain judicial impartiality during the instant proceedings. We disagree.
7 First, "[t]he court itself is in the best position to determine whether it may be prejudiced against the defendant." (People v. Campbell (1975), 28 Ill. App. 3d 480, 487, 328 N.E.2d 608, 614.) Here the trial judge by denying the motion ostensibly asserted his lack of bias. Second, the trial judge's denial of the other pretrial motions in no manner indicates that he rendered any rulings that were contrary to established law. Third, we question the timeliness of defendant's motion where it was made after the trial judge had already ruled on the merits of several issues in the case and where the incident concerning the trial judge's relative had been a matter of public record since 1975, four years prior to the trial here. See People v. Massarella (1979), 80 Ill. App. 3d 552, 400 N.E.2d 436; People v. Perry (1975), 35 Ill. App. 3d 50, 340 N.E.2d 585.
8 The cases cited by defendant in support of his recusal argument involve jurors, not judges, who were presumed to be prejudiced because experiences in their personal background were nearly identical to those at issue in the trial to which they had been assigned. (See Jackson v. United States (D.C. Cir.1968), 395 F.2d 615.) It is clear to us that these cases are inapposite, for while the presumption in a jury trial is that predisposition of a juror will prevent him from being sufficiently impartial to be a fair juror, the "sound presumption [is] that the court in a bench trial relies only on proper evidence in reaching a determination on the merits." (People v. Berland (1978), 74 Ill. 2d 286, 310, 385 N.E.2d 649, 660, cert. denied (1979), 444 U.S. 833, 62 L. Ed. 2d 42, 100 S. Ct. 63.) Indeed, the presumption is so strong that "ordinarily the fact that a judge has ruled adversely to a defendant in * * * a * * * [prior] case does not disqualify that judge from sitting in subsequent * * * cases in which the same person is a party." People v. Vance (1979), 76 Ill. 2d 171, 178, 390 N.E.2d 867, 870.
9, 10 "The appellate court has repeatedly indicated that the burden of establishing actual prejudice [of the trial judge in a situation such as presented here] rests on the defendant." (People v. Vance (1979), 76 Ill. 2d 171, 178, 390 N.E.2d 867, 870.) In the instant case, defendant Beasley has been unable to indicate even one incident as an example of the trial judge's alleged bias. Our careful review of the complete record in this case leads us to the obvious conclusion that the trial judge acted with all due fairness and objectivity, and in conformity with all required judicial standards. Since the defendant has made no effort to show any examples of actual prejudice on the part of the trial judge, we necessarily conclude that defendant's claim is *310 without merit. (People v. Wright (1974), 56 Ill. 2d 523, 309 N.E.2d 537.) We note that a trial judge is presumed "to disregard all evidence heard except that which is competent and relevant, and is considered to possess such legal discernment when * * * [making his determination]." People v. Grabowski (1957), 12 Ill. 2d 462, 467, 147 N.E.2d 49, 52.
11 Finally, in response to Beasley's claim that he would have chosen a bench trial if the judge had recused himself, we note that Beasley requested a jury trial from the very outset of the case, long before he claims he learned of the trial judge's personal connection with a similar rape incident. It is clear to us that Beasley's allegation that he was forced to choose a jury trial against his wishes and was thereby prejudiced is directly contradicted by the record.
For all the reasons discussed above, the judgment of the trial court is affirmed.
Affirmed.
JOHNSON, P.J., and ROMITI, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2657914/ | IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs February 25, 2014
LOREN JANOSKY v. STANTON HEIDLE, WARDEN
Appeal from the Circuit Court for Bledsoe County
No. 2013-CR-29 Thomas W. Graham, Judge
No. E2013-02284-CCA-R3-HC - Filed March 26, 2014
The petitioner, Loren Janosky, appeals from the denial of his petition for writ of habeas
corpus, which challenged his 2003 convictions of aggravated rape and especially aggravated
kidnapping. Discerning no error, we affirm.
Tenn. R. App. P. 3; Judgment of the Circuit Court Affirmed
J AMES C URWOOD W ITT, JR., J., delivered the opinion of the Court, in which J OSEPH M.
T IPTON, P.J., and D. K ELLY T HOMAS, J R., J., joined.
Loren Janosky, Pikeville, Tennessee, pro se.
Robert E. Cooper, Jr., Attorney General and Reporter; and Ahmed A. Safeeullah, Assistant
Attorney General, for the appellee, State of Tennessee.
OPINION
The petitioner pleaded guilty in 2003 to two counts of aggravated rape and one
count of especially aggravated kidnapping. The trial court sentenced the petitioner as a
standard, violent offender and imposed 18-year sentences for each conviction, to be served
concurrently for a total effective sentence of 18 years’ incarceration. The petitioner did not
file a direct appeal.
In 2004, the petitioner filed a petition for post-conviction relief, which petition
he subsequently withdrew, and the post-conviction court dismissed the petition with
prejudice. On June 28, 2006, the petitioner filed motions to withdraw his guilty pleas and
to re-open his 2004 petition for post-conviction relief as well as a new petition for post-
conviction relief. The post-conviction court denied the petitioner’s motions and his petition
for post-conviction relief, and this court affirmed the denial of relief. See Loren Charles
Janosky v. State, No. M2006-01559-CCA-R3-PC, slip op. at 1 (Tenn. Crim. App., Nashville,
Apr. 19, 2007), perm. app. denied (Tenn., Aug. 20, 2007). On November 5, 2007, the
petitioner filed, pro se, an application seeking a federal writ of habeas corpus in the Western
District of Tennessee, which court transferred the action to the Middle District where it was
subsequently dismissed.1 Apparently, the dismissal was affirmed by the Sixth Circuit Court
of Appeals. The petitioner then sought habeas corpus relief in State court, claiming that his
guilty pleas were not knowingly and voluntarily entered, and, on August 20, 2012, the habeas
corpus court denied relief. The petitioner did not appeal the denial to this court.
On July 15, 2013, the petitioner again sought habeas corpus relief, alleging that
the trial court failed to inform him that he had been sentenced to community supervision for
life, that his pleas were not knowingly and voluntarily entered, that his especially aggravated
kidnapping conviction was improper, and that his confession had been coerced. The habeas
corpus court again denied relief on all grounds.
In this appeal, the petitioner claims that his pleas were not entered knowingly
and voluntarily because he was not advised that he would be placed on community
supervision for life or that he would be required to register as a sex offender. In addition, the
petitioner argues that his especially aggravated kidnapping conviction is improper under
State v. White, 362 S.W.3d 559 (Tenn. 2012). The State counters that the habeas corpus
court correctly denied the petition because the petitioner failed to state a cognizable claim
for habeas corpus relief.
“The determination of whether habeas corpus relief should be granted is a
question of law.” Faulkner v. State, 226 S.W.3d 358, 361 (Tenn. 2007) (citing Hart v. State,
21 S.W.3d 901, 903 (Tenn. 2000)). Our review of the habeas corpus court’s decision is,
therefore, “de novo with no presumption of correctness afforded to the [habeas corpus]
court.” Id. (citing Killingsworth v. Ted Russell Ford, Inc., 205 S.W.3d 406, 408 (Tenn.
2006)).
The writ of habeas corpus is constitutionally guaranteed, see U.S. Const. art.
1, § 9, cl. 2; Tenn. Const. art. I, § 15, but has been regulated by statute for more than a
century, see Ussery v. Avery, 432 S.W.2d 656, 657 (Tenn. 1968). Tennessee Code Annotated
section 29-21-101 provides that “[a]ny person imprisoned or restrained of liberty, under any
pretense whatsoever, except in cases specified in § 29-21-102, may prosecute a writ of
habeas corpus, to inquire into the cause of such imprisonment and restraint.” T.C.A. §
1
The District Court’s memorandum opinion was not reported in the Federal Supplement. However,
the opinion was accessed through Westlaw at Janosky v. Tennessee, No. 3:08-0104, 2011 WL 1106717
(M.D. Tenn. Mar. 23, 2011).
-2-
29-21-101 (2006). Despite the broad wording of the statute, a writ of habeas corpus may be
granted only when the petitioner has established a lack of jurisdiction for the order of
confinement or that he is otherwise entitled to immediate release because of the expiration
of his sentence. See Ussery, 432 S.W.2d at 658; State v. Galloway, 45 Tenn. (5 Cold.) 326
(1868). The purpose of the state habeas corpus petition is to contest a void, not merely a
voidable, judgment. State ex rel. Newsom v. Henderson, 424 S.W.2d 186, 189 (Tenn. 1968).
A void conviction is one which strikes at the jurisdictional integrity of the trial court. Archer
v. State, 851 S.W.2d 157, 164 (Tenn. 1993); see State ex rel. Anglin v. Mitchell, 575 S.W.2d
284, 287 (Tenn. 1979); Passarella v. State, 891 S.W.2d 619, 627 (Tenn. Crim. App. 1994).
We agree with the habeas corpus court that the petitioner has failed to state a
cognizable ground for habeas corpus relief. The petitioner’s claim that his pleas were not
knowingly and voluntarily entered, even if true, would render the judgments voidable rather
than void. See Archer, 851 S.W.2d at 163-64; Passarella, 891 S.W.2d at 627. With respect
to the petitioner’s claim that his conviction of especially aggravated kidnapping was
improper, he contends that, pursuant to White, he is entitled to present to a jury the facts
pertaining to that charge. See White, 362 S.W.3d at 577-78. The petitioner’s reliance on
White is misplaced. Not only is White, which was decided in 2012, inapplicable to the
petitioner’s 2003 convictions, see id. at 578 (holding that its decision does not “require
retroactive application”); see also State v. Cecil, 409 S.W.3d 599, 608 (Tenn. 2013), White
requires jury instructions on especially aggravated kidnapping and is therefore wholly
inapplicable to the petitioner’s case in which he pleaded guilty to especially aggravated
kidnapping. To the extent the petitioner’s argument questions the sufficiency of the evidence
against him, “[t]he law is settled beyond question that habeas corpus . . . proceedings may
not be employed” to challenge the sufficiency of the convicting evidence. Gant v. State, 507
S.W.2d 133, 136 (Tenn. Crim. App. 1973). Because the petitioner failed to state a
cognizable ground for relief, denial of his petition was appropriate.
Accordingly, the judgment of the habeas corpus court is affirmed.
_________________________________
JAMES CURWOOD WITT, JR., JUDGE
-3- | 01-03-2023 | 03-26-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/2985037/ | Order filed, January 14, 2014.
In The
Fourteenth Court of Appeals
____________
NO. 14-13-00997-CV
____________
ROBERT M. PRIMO, Appellant
V.
SCOTT ROTHENBERG, Appellee
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Cause No. 2012-68391
ORDER
The reporter’s record in this case was due January 06, 2014. See Tex. R.
App. P. 35.1. The court has not received a request to extend time for filing the
record. The record has not been filed with the court. Because the reporter’s record
has not been filed timely, we issue the following order.
We order Darlene Stein, the official court reporter, to file the record in this
appeal within 30 days of the date of this order.
PER CURIAM | 01-03-2023 | 09-22-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1632693/ | 552 So. 2d 565 (1989)
Ricky Wayne MASSEY, et al, Plaintiffs-Appellants,
v.
CENTURY READY MIX CORPORATION, et al, Defendants-Appellees.
Nos. 20879-CA, 21248-CA.
Court of Appeal of Louisiana, Second Circuit.
November 1, 1989.
Writ Denied January 5, 1990.
*566 Leger & Mestayer by Franklin G. Shaw, Walter J. Leger, Jr., New Orleans, for plaintiffs-appellants.
Luffey, Deal & Norris by Philip T. Deal, Monroe, Cotton, Bolton, Hoychick & Doughty by John Hoychick, Jr., Rayville, Blackwell, Chambliss, Hobbs & Henry by Larry Arbour, Monroe, for defendants-appellees.
Before HALL, MARVIN and SEXTON, JJ.
SEXTON, Judge.
This is an action brought by plaintiffs, Ricky Wayne Massey and Donna Lively Massey, individually and on behalf of their minor children, Richard Zachary Massey and Jacob Deshea Massey, against defendants, Century Ready Mix Corporation (Century), Commercial Union Insurance Company (Commercial Union), Ohio General Insurance Company (Ohio General), Lincoln Builders of Ruston, Inc. (Lincoln), United States Fidelity & Guaranty Company (USF & G), and Tifton Aluminum Co., Inc. (Tifton), for damages due to Mr. Massey's personal injuries suffered on July 14, 1987, at the Tifton Aluminum Plant in Delhi, Louisiana.
At the time of the accident, plaintiff was employed as an iron worker and steel erector by Ranger Erectors, Inc. (Ranger). Ranger was engaged in erecting a steel building at a plant in Delhi, Louisiana. Tifton, the owner of the plant, had contracted with Lincoln to install an addition to its remelt facility. Lincoln had then arranged to have Ranger provide the necessary iron work.
The accident in question occurred when an 18-wheel tractor trailer truck, owned by Century and driven by one of its employees, backed onto an access road on the construction site and into a column of the partially erected building, knocking the plaintiff and another iron worker off the *567 structure some 40 feet to the ground below. Plaintiff suffered severe skull fractures, a broken clavicle, fractured ribs, and a fractured pelvis. Plaintiff remained hospitalized from July 14, 1987, to September 12, 1987, initially in a comatose state, and has undergone intensive neurologic rehabilitation since that time.
The case was set for a jury trial to begin on March 20, 1989. On September 15, 1988, however, Ohio General, the comprehensive general liability insurer of Century, filed a motion for summary judgment, contending that it did not provide coverage for the liabilities asserted against its insured because of an automobile exclusion in its policy. This motion for summary judgment was subsequently granted, and judgment was entered on October 6, 1988.
After the granting of the motion for summary judgment, plaintiff's claims against Century and Commercial Union, with whom Century had obtained a business auto policy, were settled for the policy limit of $600,000 per accident plus legal interest, reserving all rights against Ohio General.
On November 15, 1988, Lincoln and its liability insurer, USF & G, filed a motion for summary judgment, alleging tort immunity as the plaintiff's statutory employer. Additionally, on January 10, 1989, Tifton filed a motion for summary judgment, alleging that it had no duty as owner of the premises to plan and supervise construction or to oversee safety, which it argued was the legal obligation of the general contractor, Lincoln. On January 26, 1989, these motions were also granted.
Plaintiffs now appeal the three adverse summary judgments.
I.
JUDGMENT IN FAVOR OF OHIO GENERAL
(General Liability Insurer of Century Employer of Truck Driver causing accident)
Plaintiffs' claims against Ohio General revolve around the automobile exclusion in its policy, which reads in part as follows:
This insurance does not apply:
....
(b) to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of
(1) Any automobile or aircraft owned or operated by or rented or loaned to any insured, or
(2) Any other automobile or aircraft operated by any person in the course of his employment by any insured....
Plaintiffs have conceded that the driver of the Century truck who backed into the column from which the plaintiff fell would be excluded from coverage under Ohio General's automobile exclusion, if such exclusion is found applicable, because his actions involved the use of an automobile.[1] However, plaintiffs allege that the accident was caused in part by the independent negligence of another Century driver who had previously made a delivery to the soon-to-be accident site and who failed to warn the driver of the vehicle which struck the column of the dangerous situation or assist him by acting as a flagman. Plaintiffs claim that this first driver's negligence did not involve the use of an automobile and would therefore not fall under the Ohio General automobile exclusion. We disagree.
Even if we were to assume that this first driver was negligent in not warning or assisting the second driver, this negligence would not be covered under the Ohio General policy. Louisiana jurisprudence has consistently held that liability insurers such as Ohio General avoid coverage due to automobile exclusions which are the same or similar to the one quoted above in circumstances similar to the instant case. The leading Louisiana case is Picou v. Ferrara, 412 So. 2d 1297 (La.1982). In Picou, plaintiff was injured when his motorcycle was struck by an automobile being operated *568 by Ferrara, while Ferrara was on an errand for his employer. Plaintiff, in addition to allegations of negligence in the operation of the vehicle by Ferrara, also alleged that the employer had negligently entrusted the vehicle to his employee. On the basis of this later allegation, the employer sued Lumbermans Mutual Casualty Company (Lumbermans), its general liability insurer. Lumbermans filed a motion for summary judgment seeking dismissal based upon the policy's exclusion of liability for damages arising out of the use of a motor vehicle. The exclusionary language in Lumbermans' policy was identical to the exclusionary language in Ohio General's policy.
The trial court and the court of appeal had denied Lumbermans' motion for summary judgment, reasoning that the employer had sent an employee on an errand when it knew or should have known of physical infirmities that affected the employee's ability to safely operate a vehicle. However, the Louisiana Supreme Court reversed, finding that the damages the plaintiff incurred clearly arose out of the use of an automobile. The court held:
Liability for all injuries arising out of the use of automobiles is excluded (except for parking or nonowned cars on the premises). Liability for injuries arising out of automobile deliveries are therefore excluded, even though one cause of the injury might have been the negligent choice of the deliveryman who drove the car, and another might have been the employer's responsibility for the employee's acts. The use of the automobile, a risk excluded from the policy, is a common and essential element in each theory of liability.
Picou v. Ferrara, supra, at 1300.
In its inquiry as to whether the harm arose out of the use of an automobile, the court focused on a single question: Was the use of the automobile an essential element in the theory of liability? It found that, whether the theory of liability was the negligence of the driving employee, the negligence of the employer in choosing the driver, or the employer's vicarious liability for the employee's acts, each theory revolved around the use of the automobile. Likewise, the use of the truck in causing the accident in this case was a common and essential element in all of the plaintiffs' theories of liability, whether the theory is based on the negligence of the driver of the truck who hit the column, or the negligence of the first driver in failing to warn or assist the driver of the second truck.
Shortly after Picou, in Carter v. City Parish Government of East Baton Rouge, 423 So. 2d 1080 (La.1982), the Louisiana Supreme Court provided a two-prong test to be used in analyzing whether conduct arises out of the use of an automobile under an automobile liability policy. The court stated that the proper analysis was to consider two separate questions:
(1) Was the conduct of the insured of which the plaintiff complains a legal cause of the injury?
(2) Was it a use of the automobile?
The court held that coverage would exist under an automobile liability policy if both of these questions were answered affirmatively.
Plaintiffs quote the following language from Carter v. City Parish Government of East Baton Rouge, supra, in an effort to support their contention that the first driver's conduct did not involve the use of the truck in this case.
On the other hand, if the insured's conduct of which the plaintiff complains, is not the actual operation of the vehicle, whether it constitutes use of the vehicle may be a much more difficult question than whether it was a legal cause of the plaintiff's injury.
Although this language does state that it may be more difficult to find the use of a vehicle when the insured is not operating the vehicle, it certainly does not preclude such a finding. For example, in Jones v. Louisiana Timber Company, Inc., 519 So. 2d 333 (La.App. 2d Cir.1988), an independent contractor sued a timber company, its president, and the company's general liability insurer, arising out of an accident in which the cable on the trailer owned or leased by the timber company snapped and *569 threw the contractor to the ground. The court held that the timber company's conduct in negligently maintaining the trailer with an unsafe cable attachment for the contractor's use was within the general liability policy's exclusion for damages arising from the "use" or "maintenance" of an automobile, despite the fact that no timber company personnel were operating the trailer.[2] Relying on Carter, supra, this court reasoned as follows:
In order for the conduct to arise out of use, the automobile must be essential to the theory of liability; the specific duty breached by the insured must flow from use of the automobile. If the duty existed independently of the automobile, then liability does not arise out of use even though the duty could have been discharged by the use of an automobile.
Jones, supra, at 336 (emphasis ours).
Plaintiffs strongly rely on LeJeune v. Allstate Insurance Co., 365 So. 2d 471 (La. 1978). In LeJeune, the comprehensive general liability insurer of the sheriff's department was held liable when the sheriff's deputy failed to secure an intersection through which a funeral procession could safely proceed. Plaintiffs quote the following language from LeJeune in support of their position:
An exclusion clause in a liability policy is strictly construed against the insurer and in favor of coverage, if more than one interpretation is possible.... Consonant with this principle, the decisions we could find hold that, where the automobile use exclusion clause is sought to be applied so as to avoid coverage for injuries otherwise covered by a general liability policy, the exclusion clause does not apply where the insured's act is a result of negligence independent of, even though concurring with, his use of an automobile.
LeJeune, supra, at 479 (citations omitted).
Plaintiffs claim that the first driver's negligence was independent of, even though concurring with, the use of the Century truck by the second driver. However, plaintiffs fail to note other language in LeJeune which does not support their position. The court held in that case that the automobile exclusion in the law enforcement officers' professional liability policy did not exclude coverage of the deputy's negligence causing the collision, stating:
Although he could and should have used his police car to block the intersection and warn approaching drivers of the dangerous situation, it was not any use or abuse of his vehicle itself that led to his liability. Rather, it was his failure to supersede the automatic traffic signal and warn traffic approaching on the right-of-way highway that a funeral procession was going to pass through it, a function of his duties as law enforcement officer.
The basis of Deputy Smith's liability is his negligent failure to perform this law enforcement duty, the risk specifically insured by Western World's policy. The circumstance that the deputy was to use his automobile in the performance of this duty was incidental to the breach of this law enforcement duty. His liability is not based upon the negligent use of his vehicle, but rather upon his negligence in failing to secure the intersection so as to alert approaching traffic of the danger involved. The damages to the injured victim arose out of the deputy's breach of his law enforcement duties, not from the deputy's use of his automobile.
LeJeune, supra, at 479 (emphasis ours).
We believe that the LeJeune case can be distinguished from the instant case. In LeJeune, the deputy's liability arose not from the use of his vehicle but from his negligent failure to perform his law enforcement duties. In fact, the Picou court specifically distinguished LeJeune as follows:
This court held Western World's liability arose, not from the use of an automobile, *570 but from the deputy's breach of his law enforcement duties in failing to secure the intersection to allow the cortege to proceed safely. The deputy could have protected the intersection with or without the use of his vehicle. He could have parked the car on the roadside and personally directed traffic, or he could have blocked the intersection with the car. It was his failure to guard the intersection that resulted in the collision, not the use or nonuse of the automobile.
Picou v. Ferrara, supra, at 1299.[3]
In the instant case, the first driver could not have breached his duty to flag or warn the second driver had the second driver not been using the Century vehicle. Because this first driver's duty depended on the use of the Century vehicle, the vehicle is a common and essential element in the plaintiff's theory of liability, and therefore excluded under Ohio General's auto exclusion. In the terms of our Carter, the duty at issue is "not independent" of the vehicle that caused the accident.
Plaintiffs also make the argument that the driver of the first Century truck was a separate "insured," and that his independent acts of negligence should not be excluded from coverage under Ohio General's policy because his negligence did not involve the use of an automobile. They base this argument on the language of the auto exclusion itself which requires that the damage arise out of the use of an automobile "owned or operated by or rented or loaned to any insured" or any automobile "operated by any person in the course of his employment by any insured." They then note that the term "insured" as defined in the policy means any person or organization qualifying as an insured in the "Persons Insured" provision of the policy, and that "[t]he insurance afforded applies separately to each insured against whom claim is made or suit is brought...." Appellants submit that in order to find that coverage is excluded, the automobile must have been being utilized by "an insured," and that, because the insurance applies separately to each insured, only the use of the "insured" operating the truck which hit the column is excluded from the policy.
This contention fails for basically the same reasons outlined above with respect to the previous contention. The fact that the insurance afforded applies separately to each insured is irrelevant. The definition of an "insured" in the policy simply makes each driver a separate insured in the context of the exclusion. Any asserted negligence on the part of the second driver (by failing to warn or to flag) is dependent on the use of the truck which hit the column and cannot, in our judgment, be separated from it.
Plaintiffs also contend that Century is liable because of its negligence in not providing a backup alarm or a flagman, as required by the Occupational Safety and Health Administration regulations, 29 C.F.R. § 1926.601(b)(3) and (4). Plaintiffs claim that this alleged negligence is independent of negligence involving the use of an automobile and that it should not be excluded from coverage by Ohio General's policy under the automobile exclusion.
This same argument was addressed in United States Fidelity and Guaranty Company v. Employers Casualty Company, 672 F. Supp. 939 (E.D.La.1987), affirmed, 857 F.2d 289 (5th Cir.1988). In that case, an independent contractor's truck backed over and killed a worker. As in the instant case, the truck did not have backup warnings, nor was a flagman present. The general contractor had in effect at the time of the accident both an automobile liability policy, issued by USF & G, and a general liability policy, issued by Employers, whose pertinent policy provisions were identical to those of Ohio General and Commercial Union in this case. On motion for summary *571 judgment, the court found that the general liability insurance automobile exclusion mandated that the general liability insurer be found not to provide coverage for the general contractor's negligence in violating OSHA regulations, despite the plaintiffs' argument that, since the general contractor was being held liable on grounds of not providing a safe workplace to the decedent, his liability did not arise out of the use of an automobile within the meaning of the exclusion. The court held:
The insuring language of USF & G's Policy and the excluding language of Employers' Policy are written not in terms of the applicable standard of care, but in terms of the nature of the risk and resulting injury. The issue, for purposes of interpreting Employers' exclusion, is not why T & J's conduct was faulty, but whether T & J's liability for Freeman's death arose out of the use of the truck. Common sense and Louisiana case law require this Court to find that T & J's liability did arise out of the use of the truck.... In sum, T & J's breach of duty did not exist independent of the use of Varnado's truck, for without use of the truck, there would be no need for a back-up alarm or flagman.
United States Fidelity and Guaranty Company v. Employers Casualty Company, supra, at 942-943 (emphasis ours).
Similarly, even assuming that Century was negligent in violating safety regulations, such negligence could certainly not be found to exist independent of the use of the Century truck, and would be excluded from coverage by the Ohio General automobile exclusion.
Plaintiffs contend alternatively that the Ohio General automobile exclusion is not applicable in this case. They base this contention on the fact that the Ohio General policy is a "broad form" comprehensive general liability policy. They note the first exclusion in the policy reading as follows:
This insurance does not apply:
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality of the named insured's product or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner....
They further note the definition of "incidental contract" in the Ohio General policy as follows:
I. CONTRACTUAL LIABILITY COVERAGE
(A) The definition of incidental contract is extended to include any oral or written contract or agreement relating to the conduct of the named insured's business.
Finally, plaintiffs note that the auto exclusion in the policy does not apply to this contractual liability coverage:
I. CONTRACTUAL LIABILITY COVERAGE
....
(C) The following exclusions applicable to Coverages A (Bodily Injury) and B (Property Damage) do not apply to this Contractual Liability Coverage: (b), (c)(2), (d), and (e).
Plaintiffs claim that these provisions expand the scope of coverage for which liability may be imposed upon the insured arising out of damage pursuant to a business contract, and that they specifically provide that the automobile exclusions are inapplicable when dealing with such a contract. We disagree.
We determine coverage does not exist under this theory because there is no contract between Century and plaintiffs to which these provisions could apply. Century did not assume any liability to the public generally or to the plaintiffs in particular under its contract with Lincoln to furnish materials to the job site. The elimination of the automobile exclusion applies only to liability assumed by contract. Therefore, the automobile exclusion remains applicable to the basic coverage.
For the reasons aforesaid, the summary judgment in favor of Ohio General is affirmed.
*572 II.
SUMMARY JUDGMENT IN FAVOR OF LINCOLN
(General Contractor of Improvements)
AND USF & G (Lincoln's General Liability Insurer)
Plaintiffs claim on appeal that the trial court erred in finding Lincoln to be Mr. Massey's statutory employer because the steel erection work in which he was engaged at the time of the accident was specialized per se. They claim that because the steel erection work was specialized and thus by definition was work that Lincoln was unable to perform, the work was not part of Lincoln's trade, business, or occupation which it had contracted to perform, or work which it undertook to execute, as required by LSA-R.S. 23:1032 and 23:1061 to avoid tort liability.[4]
Plaintiffs also attempt to rebut the defendants' argument that the summary judgment was proper under the "two-contract" statutory employer defense. They argue that the Louisiana Supreme Court, in Berry v. Holston Well Service, Inc., 488 So. 2d 934 (La.1986), intended to abolish the "two contract" rule, since to do otherwise would shield the general contractor from both tort liability and liability for worker's compensation, the latter being covered by the subcontractor.
These two contentions, that the work of the subcontractor was specialized and that Berry rejected the two-contract statutory employer defense, were recently resolved adversely to the plaintiff by this circuit in Bradford v. Village Insurance Co., 548 So. 2d 106 (La.App. 2d Cir.1989). In that case this circuit held:
The holding of Berry does not apply to the "two contract" defense since Berry involved an owner rather than a general contractor. Additionally, this argument by the plaintiff is in direct conflict with the written reservation of the "two contract" defense by the Court in footnote three:
3. The discussion throughout the remainder of this opinion does not deal with what may be called the "two contract" statutory employer defense. La.R.S. 23:1032, 1061. In that situation, an owner contracts with a general contractor to do a job. The general contractor in turn contracts with a subcontractor for the "sub" to do the whole or a part of the total job contracted by the "general." Under this contractual relationship, the contract work of the "sub" has been held in *573 decisions of the intermediate courts to be automatically within the trade, business or occupation of the "general." See Lewis, [v. Exxon Corp., 441 So. 2d 192 (La.1983) ] supra (in dicta); Borne v. Ebasco Services, Inc., 482 So. 2d 40 (La.App. 5th Cir.1986); Thornton v. Avondale Shipyards, Inc., 479 So. 2d 7 (La.App. 5th Cir.1985); Brown v. Ebasco Services, Inc., 461 So. 2d 443 (La. App. 5th Cir.1984), writ denied in part 462 So. 2d 1235 (La.1985); McCorkle v. Gulf States Utilities Co., 457 So. 2d 682 (La.App. 1st Cir.1984); Juris v. Lama Drilling Co., Inc., 457 So. 2d 135 (La.App. 2d Cir. [1984]), writ denied 460 So. 2d 1045 (La.1984); Certain v. Equitable Equipment Co., 453 So. 2d 292 (La.App. 4th Cir. [1984]), writ denied 459 So. 2d 535 (La.1984); Richard v. Weill Construction Co., Inc., 446 So. 2d 943 (La.App. 3rd Cir. [1984]), writ denied 449 So. 2d 1356 (La.1984).
....
The general contractor was deemed to be immune from tort liability and named the statutory employer of the employee of its subcontractor in Williams v. Metal Building Products Co., Inc., 522 So. 2d 181 (La.App. 5th Cir.1988). The Supreme Court denied writs in Williams, 530 So. 2d 82 (La.1988), and stated, "There is no error of law."
Bradford v. Village Insurance Co., supra, at 107, 108.
Thus, Bradford points out that Berry did not obviate the "two-contract" concept of statutory employment. The question of whether the subcontractor's work is specialized is irrelevant in the context of "two-contract" cases. Bradford v. Village Insurance Co., supra; Rogers v. Gervais Favrot Co., Inc., 537 So. 2d 381 (La.App. 4th Cir.1988). Cf. Juris v. Lama Drilling Company, Inc., 457 So. 2d 135 (La.App. 2d Cir.1984), writ denied, 460 So. 2d 1045 (La. 1984). We therefore agree with the trial court that Mr. Massey was the statutory employee of Lincoln and affirm the summary judgment in Lincoln's favor.
III.
SUMMARY JUDGMENT IN FAVOR OF TIFTON
(Owner of the Premises)
The trial court found that Tifton had no duty as owner of the premises to plan and supervise construction or to oversee safety, these duties being those of the general contractor, Lincoln.
Indeed, a property owner is not liable to third parties for the negligence of a contractor where the owner simply furnishes plans and specifications and possesses only the right to insist that the job be performed in accordance with those plans and specifications. Verrett v. Louisiana World Exposition, Inc., 503 So. 2d 203 (La. App. 4th Cir.1987), writ denied, 506 So. 2d 1229 (La.1987); Smith v. Crown Zellerbach, 486 So. 2d 798 (La.App. 1st Cir.1986), writ denied, 489 So. 2d 246 (La.1986).
Plaintiffs do not disagree with the aforesaid proposition but contend that there are two exceptions to this rule. Citing Grammer v. Patterson Services, Inc., 860 F.2d 639 (5th Cir.1988), cert. denied, ___ U.S. ___, 109 S. Ct. 3190, 105 L. Ed. 2d 698 (1989), they contend that a principal may not avoid liability if it contracts out inherently or intrinsically dangerous work or retains "operational control" of the contract work. In so arguing, they concede that the instant work is not inherently or intrinsically dangerous. Thus, they argue that Tifton is liable because it retained operational control over the work.
We have no difficulty determining that the contract between the parties establishes Lincoln as an independent contractor, the terms of which did not give Tifton operational control. A document entitled "Engineering Standard, Construction Department 33.052," made part of the contract between Tifton and Lincoln for the instant construction, does call for adequate reverse signal alarms on trucks or for the use of flagmen in the absence of such alarms. However, other portions of the contract specifically delegate responsibility for the general management of the construction *574 operation and for safety concerns to Lincoln.
Article 11 of the general conditions of the contract between Tifton and Lincoln states: "Contractor shall be an independent contractor, and Owner will have no right to exercise supervision as to the manner or method of doing the Work." Similarly, Article 14A of the general conditions reads as follows:
A. Contractor shall take all necessary precautions for the safety of employees, shall comply with such regulations as Owner may from time to time establish, including, without limitation, Alcoa Engineering Standard 33.052, Safety and Health, Fire Protection and Security Procedures for Outside Contractors and Subcontractors, and Work site regulations, and shall comply with all federal, state and local safety laws and regulations, including without limitation, Occupational Safety and Health Act standards for the construction industry, and Mine Safety and Health Act standards.
(emphasis ours.)
Finally, Paragraph 24, bearing the title "Evaluation of Contractor" from the aforementioned Engineering Standard 33.052 states as follows:
The Owner's safety representative or the Owner's field construction manager has the right (but not the obligation) to determine if the Contractor is performing in accordance with the regulations set forth in this Standard. The items presented in Alcoa Standard 33.052.1 may be used to evaluate Contractors. Evaluations may be made at least once a month and also before the completion of a contract. Deficiencies shall be corrected. Continued unsatisfactory evaluation and injury experience may serve to disqualify the Contractor for further work from the Owner.
(emphasis ours.)
Moreover, the record establishes that Tifton did not, as a matter of fact, exercise operational control over Lincoln. Mr. Nathaniel Mixon, project manager for Lincoln, stated in his deposition that the work of coordinating subcontractors during the project, the long-range planning, as well as the day-to-day scheduling of operations, was the responsibility of Lincoln personnel. He stated that when Lincoln met with its various subcontractors, Tifton personnel were not involved. He also stated that the primary purpose of any Tifton personnel being at the construction site was to insure quality control in order that the remelt facility would be built in accordance with the plans and specifications provided to Lincoln.
Additionally, Paul Jarell, remelt superintendent for Tifton, stated that he visited the construction site but acted only as a liaison between Tifton and Lincoln Builders should any questions arise concerning the specifications or modifications. He stated that he did not attempt to supervise construction or safety as he was not employed for that purpose and was not knowledgeable in that area. He never inspected the plans for construction, and no one from Tifton that he knew of was designated to follow construction on a daily basis. His employment or expertise was as superintendent of production which was to take place in the completed remelt facility. He was not assigned to any functions regarding construction of the remelt facility.
Moreover, we believe we would be remiss if we did not point out that Grammer v. Patterson Services, Inc., supra, may misstate the Louisiana law on the subject. In correctly pointing out that it is a well-settled rule of law in Louisiana that a principal is not liable for the offenses of its independent contractor, Grammer asserts that there are two exceptions to this rule. These are said to be that (1) a principal cannot escape liability by contracting out ultrahazardous activity, and (2) a principal may be liable for the acts of an independent contractor "over which it has exercised operational control or which it has expressly or impliedly authorized." Grammer v. Patterson Services, Inc., supra, at 641. It is the characterization of the exceptions which causes us concern.
Grammer relies squarely on Hawkins v. Evans Cooperage Co., Inc., 766 F.2d 904 (5th Cir.1985), as authority for the two *575 exceptions. Hawkins does indeed state the two exceptions as asserted by Grammer. For this proposition, Hawkins cites Wallace v. Oceaneering International, 727 F.2d 427 (5th Cir.1984); McCormack v. Noble Drilling Corporation, 608 F.2d 169 (5th Cir.1979); and Ewell v. Petro Processors of Louisiana, Inc., 364 So. 2d 604 (La.App. 1st Cir.1978), writ denied, 366 So. 2d 575 (La.1979).
Wallace does not support the proposition, however. It is simply a Jones Act case involving the question of the operational control which a Gulf of Mexico well owner retained over its drilling contractor. McCormack also involves the same question.
Ewell v. Petro Processors of Louisiana, Inc. is, from our research, the cornerstone of the Louisiana law on the subject. However, it must be emphasized that Ewell does not speak in terms of two exceptions. Likewise, none of the source provisions cited by Ewell speak in terms of two exceptions, or "operational control." See Ewell, supra, at 607, 608, and the citations contained therein.
Ewell, in espousing the general concept that a principal is not liable for the offenses of an independent contractor occurring during the course of the contract, goes on to point out that an "important exception to this rule ... is that if the work is inherently or intrinsically dangerous...." Ewell, supra, at 606. Ewell then notes that where there is an available safe method using "adequate precautions" to perform the inherently or intrinsically dangerous activity, but the work is nevertheless done in an unsafe manner, then the principal will be liable if he has "expressly or impliedly authorized the particular manner which will render the work unsafe and not otherwise." Ewell, supra, at 606, 607.
Thus it seems clear that the point in Ewell was that if there are certain precautions which will make an inherently dangerous job safe, and yet the work is done in an unsafe manner, the principal is liable if he expressly or implicitly authorizes the particular unsafe method of performing the work. The express or implicit authorization, then, is part and parcel of, or a corollary to, the idea that the work must be inherently or intrinsically dangerous in the first instance. Said more simply, it appears that there is only one exception per Ewell, and if the work is not inherently dangerous in the first place, the question of what actions the principal may have expressly or implicitly authorized is of no moment. Guillory v. Conoco, Inc., 521 So. 2d 1220 (La.App. 3rd Cir.1988), writ denied, 526 So. 2d 801 (La.1988).
It is important to recall that a work is not considered inherently or intrinsically dangerous if it can be made safe when performed in a proper and workmanlike manner. Smith v. Crown Zellerbach, supra; Guillory v. Conoco, Inc., supra. There is no doubt that the work at issue here could be made safe by being performed in a proper and workmanlike manner. Indeed, the plaintiffs have conceded that the instant work is not inherently or intrinsically dangerous. Thus, it is our view that this concession is fatal to plaintiffs' position because if the work is not inherently dangerous, then the question of express or implicit authorization (or operational control) of an unsafe method of operation is not at issue as pertains to an independent contractor.[5]
*576 It is thus our view that under the traditional Louisiana approach as espoused by Ewell, Louisiana first considers the question from the standpoint of whether the contractor is truly independent. If the principal retains operational control, then the contractor is not an independent one. If the contractor is independent, then the principal is not liable for the contractor's actions unless the work undertaken is inherently or intrinsically dangerous. As part of this exception, if there are precautions that can render the dangerous work more safe, but yet the work is done without these precautions, then the principal is liable if he expressly or implicitly authorizes the fashion of doing the work which rendered it more unsafe. Ewell, supra.
For the foregoing reasons, then, the summary judgment in favor of Tifton is affirmed.
CONCLUSION
In conclusion, for the reasons aforesaid, we affirm the three summary judgments herein in favor of Ohio General Insurance Company, the general liability insurer of Century Ready Mix Corporation (the employer of the truck driver who precipitated the accident); Lincoln Builders of Ruston, Inc., the general contractor on the construction project; and Tifton Aluminum Company, Inc., the owner of the premises, all at appellants' costs.
AFFIRMED.
HALL, C.J., concurs with written reasons.
HALL, Chief Judge, concurring.
I concur to state that I do not fully subscribe to the majority opinion discussion and criticism of the rule enunciated by Grammer v. Patterson Services, Inc., 860 F.2d 639 (5th Cir.1988), and other cases, that a principal may be liable for the acts of an independent contractor "over which it has exercised operational control or which it has expressly or impliedly authorized." This seems to be a fair and correct statement of the law, not inconsistent with cases decided by Louisiana state courts.
However the lack of specific factual allegations by plaintiffs and lack of contravention by plaintiffs of the facts established by the contract, affidavits and depositions supporting Tifton's motion for summary judgment, make it clear that there are no material issues of fact that would support a finding that Tifton exercised operational control over or authorized specific construction activity that caused the accident, or that Tifton was independently negligent. Tifton is, therefore, entitled to summary judgment as a matter of law.
NOTES
[1] Plaintiff has received some compensation for this driver's negligence through its settlement with Commercial Union, with whom Century had a business automobile liability policy.
[2] The court found both that the tying together of a cable that was attached to the trailer was a form of repairing it and amounted to maintenance of the trailer, and that the furnishing of a defective cable causing the accident was a form of strict liability predicated upon the use of a vehicle "owned or rented by the insured."
[3] See also Lucey v. Harris, 490 So. 2d 416 (La. App. 5th Cir.1986), writ denied, 496 So. 2d 327 (La.1986); Topole v. Eidson, 464 So. 2d 406 (La. App. 1st Cir.1985); Tolleson v. State Farm Fire and Casualty Company, 449 So. 2d 105 (La.App. 1st Cir.1984), writ denied, 450 So. 2d 968 (La. 1984); and Curry v. Iberville Parish Sheriff's Office, 405 So. 2d 1387 (La.App. 1st Cir.1981), writ denied, 410 So. 2d 1130 (La.1982), writ denied, 410 So. 2d 1135 (La.1982), for other cases finding liability for acts independent of the use of an automobile.
[4] The worker's compensation law found at LSA-R.S. 23:1032 and LSA-R.S. 23:1061 read in pertinent part as follows:
§ 1032. Exclusiveness of rights and remedies; employer's liability to prosecution under other laws
The rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights and remedies of such employee, his personal representatives, dependents, or relations, against his employer, or any principal or any officer, director, stockholder, partner or employee of such employer or principal, for said injury, or compensable sickness or disease. For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.
....
§ 1061. Principal contractors; liability
Where any person (in this section referred to as principal) undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person (in this section referred to as contractor) for the execution by or under the contractor of the whole of any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him; and where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Chapter reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the employer by whom he is immediately employed.
....
[5] Williams v. Gervais F. Favrot Co., 499 So. 2d 623 (La.App. 4th Cir.1986), writ denied, 503 So. 2d 19 (La.1987), likewise (just as Grammer v. Patterson Services, Inc., supra, and Hawkins v. Evans Cooperage Co., Inc., supra) stated that there were two exceptions to the rule that a principal is not liable for the work of an independent contractor and cited Ewell v. Petro Processors of Louisiana, Inc., supra, for the position. This is the first instance that we have located in which a Louisiana court spoke of "two exceptions" to the general rule of non-liability on the part of principals for the work of independent contractors. The only other reference we have located is in Herron v. Lincoln Property Company, 525 So. 2d 1189 (La.App. 5th Cir.1988), which cites Williams v. Gervais F. Favrot Co. for the proposition. We located no other such references.
We thus believe that the Ewell concept has been misstated, perhaps beginning with federal application in Hawkins v. Evans Cooperage Co., Inc., and believe the question is more accurately approached in Louisiana as we have here suggested.
That is to say that any question of operational control or express/implicit authority is more correctly considered in the context of whether the contractor is in fact an independent one, rather than in the context of an exception to the general rule that principals are not liable for the negligence of their independent contractors. It may be suggested that the distinction we make here is too fine and is one simply of semantics. Indeed, as in the instant case, the result will most likely be the same whether the independent contractor question is considered first per Ewell or secondarily as an exception. However, we do suggest that the fashion in which we have approached the question is not only the more traditional but is simpler. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1686918/ | 485 So. 2d 274 (1986)
James R. STRINGER
v.
STATE of Mississippi.
No. 54580.
Supreme Court of Mississippi.
January 15, 1986.
Rehearing Denied April 9, 1986.
Denise Sweet-Owens, Jackson, James E. Ostgard, II, St. Paul, Mn., for appellant.
Edwin Lloyd Pittman, Atty. Gen. by Marvin L. White, Jr., and Amy D. Whitten, Sp. Asst. Attys. Gen., Jackson, for appellee.
En Banc.
ANDERSON, Justice, for the Court:
MOTION TO VACATE OR SET ASIDE JUDGMENT AND SENTENCE
Petitioner James R. Stringer was convicted of capital murder and sentenced by a jury of the Circuit Court of the First Judicial District of Hinds County to suffer the death penalty. The conviction and sentence were affirmed unanimously by this Court on July 11, 1984, and rehearing was denied on August 15, 1984. The facts in this case and the ruling thereon are set forth in Stringer v. State, 454 So. 2d 468 (Miss. 1984).
Stringer filed a petition for writ of certiorari in the United States Supreme Court which was denied on February 19, 1985, in Stringer v. Mississippi, ___ U.S. ___, 105 S. Ct. 1231, 84 L. Ed. 2d 368 (1985).
Petitioner then filed this motion to vacate or set aside judgment and sentence on June 17, 1985, in accordance with the Mississippi Uniform Post Conviction Relief Act [collateral relief act, Mississippi Code Annotated, Section 99-39-1, et seq. (Supp. 1984)].
CLAIM
Petitioner was deprived of his right to effective assistance of counsel due to trial counsel's representation of multiple defendants.
At the time of Petitioner's trial, Petitioner had hired Sam Wilkins to represent Petitioner, Petitioner's son "Jimbo" and Petitioner's girlfriend, Tammy Williams, all charged with capital murder arising out of the same incident. Petitioner now alleges that trial counsel's improper representation of several defendants in the same case constituted a conflict of interest which rendered the assistance of counsel ineffective.
*275 This Court readily recognizes the rule that effective assistance of counsel encompasses the right to representation by an attorney who does not owe conflicting duties to other defendants as set forth in Glasser v. U.S., 315 U.S. 60, 62 S. Ct. 457, 86 L. Ed. 680 (1942). However, the Court has repeatedly held that joint representation of co-defendants is not per se violative of the Sixth Amendment right to effective assistance of counsel. Holloway v. Arkansas, 435 U.S. 475, 98 S. Ct. 1173, 55 L. Ed. 2d 426, (1978); Beran v. U.S., 580 F.2d 324 (8th Cir.1978); U.S. v. Lawriw, 568 F.2d 98 (8th Cir.1977).
In Cuyler v. Sullivan, 446 U.S. 335, 350, 100 S. Ct. 1708, 1719, 64 L. Ed. 2d 333, 348 (1980), the court stated:
We hold that the possibility of conflict is insufficient to impugn a criminal conviction. In order to demonstrate a violation of his Sixth Amendment rights, a defendant must establish that an actual conflict of interest adversely affected his lawyer's performance.
The Court in Irving v. Hargett, 518 F. Supp. 1127 (N.D.Miss. 1981), set forth the necessary determination of whether counsel in fact, slighted the defense of one defendant for that of another in order to establish a conflict. It has been firmly established that a potential for conflict or hypothetical or speculative conflicts will not suffice for reversal. The conflict must be actual. U.S. v. Alvarez, 580 F.2d 1251 (5th Cir.1978); Cuyler, supra. Therefore, we need not consider speculative possibilities of conflicts in attempts to plea bargain or use other possible defenses that were not raised at trial.
The petitioner in this case was tried first and all three defendants testified for the defense. Each defendant had similar interests and each consistently asserted the theory of alibi as a defense. Petitioner failed to show any instance where any of the three were in any adversarial or conflicting position during or as a result of the joint representation during either the guilt or sentencing phase of the trial.
In Thomas v. State, 472 So. 2d 428 (Miss. 1985), petitioners argued that their guilty pleas should be set aside because of a conflict of interest which existed because they were both represented by the same attorney. This Court held that since both appellants insisted on sticking together and entering the same plea, there was no actual conflict of interest.
It is the opinion of this Court that the petitioner in this case has also failed to show any actual conflict of interest or prejudice as a result of the joint representation of multiple defendants.
This Court has carefully considered each of the petitioner's claims for relief and finds that all issues raised on direct appeal have been addressed and final determination made. Each of petitioner's claims were raised on direct appeal or they were not appealed at all, or were not raised at the trial level, rendering them procedurally barred or res judicata and are not subject to further review. Dufour v. State, 483 So. 2d 307 (Miss. 1985); Tokman v. State, 475 So. 2d 457 (Miss. 1985); Leatherwood v. State, 473 So. 2d 964 (Miss. 1985). We further find that the claims brought forth in this petition are without merit. Therefore, petitioner's Motion to Vacate or Set Aside Judgment and Sentence is denied.
PATTERSON, C.J., WALKER and ROY NOBLE LEE, P.JJ., and HAWKINS, DAN M. LEE, PRATHER, ROBERTSON, and SULLIVAN, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1874573/ | 889 So.2d 82 (2004)
BROWN v. STATE
No. 5D04-3502
District Court of Appeal of Florida, Fifth District
December 21, 2004.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/250128/ | 274 F.2d 853
Erwin Allison SHOOK, Appellant,v.STATE OF OHIO, and David C. Jenkins, Judge, and Thomas A. Beil, Prosecutor, et al., Appellees.
No. 13915.
United States Court of Appeals Sixth Circuit.
February 4, 1960.
Erwin A. Shook, pro se.
Thomas A. Beil, Pros. Atty., Loren E. Van Brocklin, Asst. Pros. Atty., Youngstown, Ohio, for appellees.
Before McALLISTER, Chief Judge, MILLER, Circuit Judge, and BROOKS, District Judge.
McALLISTER, Chief Judge.
1
Appellant filed a petition for a writ of habeas corpus in the District Court in which he set forth that the Grand Jury of Mahoning County, Ohio, had returned two indictments against him; that he had entered a plea of guilty to the charges in the first indictment, and had been sentenced to prison, being committed to the Ohio State Penitentiary on the charge in that indictment; and that no proceedings had ever been taken as to trial on the second indictment. But he alleged that the prosecuting official in charge had placed a warrant in the hands of the warden of the penitentiary to which he was committed, to be served at a future time for a further prosecution.
2
Since appellant has been confined in the penitentiary, he has sought to bring about his trial on the charges against him, as set forth in the second indictment, to which he pleaded not guilty. With this objective, he filed in the Court of Common Pleas of Mahoning County a motion to quash the second indictment on the ground that he was being denied a right to a speedy trial which was guaranteed to him under the provisions of the Constitution of the State of Ohio. The Court of Common Pleas denied appellant's motion to quash and upon denial thereof, appellant filed a petition for a writ of mandamus in the Court of Appeals of the Seventh Ohio Appellate District Court. The Court of Appeals dismissed appellant's petition for a writ of mandamus, without prejudice, because of appellant's failure to cause summons to be issued. Upon dismissal of the writ of mandamus by the Ohio Court of Appeals, appellant sought leave to appeal to the Supreme Court of Ohio, which refused to docket the petition for leave to appeal, because of appellant's failure to pay the docket fee, which is the practice of that court, even in the case of paupers. Thereupon, appellant filed his petition for a writ of habeas corpus in the United States District Court for the Northern District of Ohio, Eastern Division. In the petition, which is ten pages in length, it is nowhere alleged that appellant is unlawfully restrained of his liberty. The obvious reason for the failure to make such allegation is that he is presently serving a lawful sentence on his plea of guilty to the charge in the first indictment. Appellant does not question the proceedings in that case, the validity of his plea, the legality of the sentence, or his present confinement for the crime of an admitted rape upon a woman, which occurred after he had forced his way into his victim's home.
3
Appellant claims that the State of Ohio is unlawfully delaying trial on the second indictment which charges him with armed robbery. He is seeking a trial on this pending indictment in the state court. He thus seeks to bring about such trial by the present petition for a writ of habeas corpus in the federal court; but makes no allegations anywhere that he is being illegally restrained and imprisoned at the present time.
4
The District Court dismissed appellant's petition for a writ of habeas corpuson two grounds: first, because appellant had not exhausted his remedies in the state courts; and, second, because he was not seeking release from unlawful imprisonment, or unlawful restraint of his liberty.
5
As to the first ground, the District Court held that the inability of appellant to comply with the Ohio Supreme Court rules does not operate to give a Federal District Court jurisdiction of a petition for a writ of habeas corpus; that before a state prisoner may be permitted to file a petition for a writ of habeas corpus in a Federal District Court, it must appear that, following denial by the Ohio Supreme Court, the petitioner has applied for, and has been denied, certiorari to the United States Supreme Court, from the state court's denial of his petition for leave to appeal. Unless a prisoner has followed such procedure, the District Court held, he had not exhausted his remedies in the state courts, and a Federal District Court would not have jurisdiction of a petition for a writ of habeas corpus arising out of such proceedings. In its decision in this regard, the District Court relied upon Ex parte Hawk, 321 U.S. 114, 116, 118, 64 S.Ct. 448, 88 L.Ed. 572; Darr v. Burford, 339 U.S. 200, 208-217, 70 S.Ct. 587, 94 L.Ed. 761; Rowan v. People, 6 Cir., 147 F.2d 138; and McCrea v. Jackson, 6 Cir., 148 F.2d 193.
6
Since the decision of the District Court in the instant case, the United States Supreme Court has held that denial of a petition for leave to appeal on the ground that a docket fee in the Ohio Supreme Court has not been paid by an indigent appellant is in violation of the due process and equal protection clauses of the Fourteenth Amendment. Burns v. Ohio, 360 U.S. 252, 79 S.Ct. 1164, 3 L.Ed.2d 1209. It was said in the opinion of the Supreme Court that it was confident that the State of Ohio would provide corrective rules to meet the problem which the case laid bare. But if such corrective rules were not provided, it would seem that an indigent prisoner, who was unable to pay a docket fee for the filing of a petition for leave to appeal to the Supreme Court of Ohio, would have then exhausted his remedies in the state courts, and would, accordingly, be authorized to file a petition for a writ of habeas corpus in the Federal District Court. Some nine years ago, in Dolan v. Alvis, 186 F.2d 586, 587, this court held, in a case involving a conviction in the state courts of Ohio: "If a prisoner is without funds or unable to obtain them, and may not present his case on appeal to a state court or file a petition for a writ of habeas corpus without prepayment of fees that he is unable to make, he would not be precluded from filing a petition for a writ of habeas corpus in a federal court on the ground that he has not exhausted his remedies in the state courts, for in such a case, he must be held to have exhausted such remedies." We are of the opinion that the rule above announced in the Dolan case would be applicable in the case of a prisoner seeking release from unlawful imprisonment, and that he could properly file a petition for a writ of habeas corpus in a Federal District Court, if the Supreme Court of Ohio had denied him the right to file a petition for leave to appeal because of failure to pay a docket fee, which he could not pay on account of his indigence.
7
Whatever the impact of Burns v. Ohio, supra, on the case of an indigent prisoner seeking to file a petition for leave to appeal to the Ohio Supreme Court upon denial of a petition for a writ of habeas corpus, and meeting with refusal of that court to permit the filing of such petition for leave to appeal because of failure to pay the docket fee, we are not faced with such a case here.
8
In the controversy before us, the prisoner seeks a writ of habeas corpus in a Federal District Court while he is, admittedly, serving a lawful sentence of imprisonment. He does not allege that he is illegally restrained and imprisoned. His only objective in resorting to a petition for a writ of habeas corpus is to secure a trial on another indictment charging him with armed robbery. Habeas corpus is not a proper proceeding for such a purpose. The Great Writ is available to prisoners who are unlawfully restrained of their liberty but not to those who are serving a lawful sentence of imprisonment. McNally v. Hill, 293 U.S. 131, 55 S.Ct. 24, 79 L.Ed. 238. See also Macomber v. Hudspeth, 10 Cir., 115 F.2d 114; Dunlap v. Swope, 9 Cir., 103 F.2d 19.
9
Appellee quite properly points out that appellant's relief, if any, may be by way of mandamus in the state courts. As heretofore stated, appellant had filed a petition for a writ of mandamus in the Ohio Court of Appeals, but after it was dismissed without prejudice — because of his failure to cause summons to be issued — he never refiled the petition.
10
In granting the certificate of probable cause and right to proceed in forma pauperis, Judge Jones, in his opinion dismissing appellant's petition for the writ of habeas corpus in the District Court, said:
11
"The relief sought in a habeas corpus proceeding is release from incarceration on the ground that the petitioner is unlawfully imprisoned by the judgment of the State court. The petitioner here seeks no such remedy, he is not unlawfully imprisoned, he is under a sentence of imprisonment as to which there is no illegality charged. What he seeks is a trial under another pending indictment in Mahoning County, or a dismissal of the same. His only relief or remedy, if he has one, lies in a mandamus action in the State court to require the Mahoning County authorities to act, by proceeding with a trial under the pending indictment, or its dismissal. The real remedy and relief sought by the petitioner is under the Constitution and laws of the State of Ohio. It is my opinion that no substantial federal question is presented in this proceeding and that the jurisdiction of this court cannot be invoked under the circumstances relied upon by the petitioner."
12
With the view as above expressed by Judge Jones, we concur. The order of the District Court dismissing the petition for the writ of habeas corpus is, accordingly, affirmed. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2249516/ | 907 F.Supp. 239 (1995)
UNITED STATES of America, Plaintiff,
v.
Gregory BOUTTE, Boutte, Elmore & Company, CPAs, Defendants.
No. 1:94-CV-0102.
United States District Court, E.D. Texas, Beaumont Division.
October 25, 1995.
*240 Olen Kenneth Dodd, Asst. U.S. Atty., Beaumont, TX, Michael F. Hertz, U.S. Department of Justice, Washington, DC, for plaintiff.
Norman M. Bonner, Austin, TX, for defendants.
MEMORANDUM OPINION
COBB, District Judge.
Before the Court is the Plaintiff's Motion for Summary Judgment against Gregory Boutte, filed by the United States. The United States claims that the defendants, Gregory Boutte and Boutte, Elmore & Company, committed twenty-three acts in violation of the False Claims Act, 31 U.S.C. § 3729, et seq. For the reasons stated below, this Court finds that the United States of America should prevail against Mr. Boutte as a matter of law on all its claims. Finding there to be no issues of material fact in dispute, this Court GRANTS Plaintiff's motion.
BACKGROUND
On July 20, 1992, after a criminal jury trial in this Court, Defendant Gregory Boutte was convicted of twenty-three counts of criminal fraud arising from claims submitted to the Department of Commerce's Minority Business Development Agency ("MBDA").
The MBDA develops and coordinates a nationwide program to assist minority business enterprise. To this end, the MBDA awards grant monies for the employment of Minority Business Development Center staff. In turn, the Minority Business Development Centers are required to provide business development services to established minority firms and potential minority entrepreneurs. So that the Department of Commerce can monitor progress toward the program's stated objectives, each Minority Business Development Center is required to submit a Quarterly Narrative Report for each quarter of every grant year.
In 1987, Mr. Boutte applied for and was awarded a Cooperative Grant for the purpose of operating the Triplex Minority Business Development Center in the offices of his accounting firm in Beaumont, Texas. Based upon Mr. Boutte's submission of the Quarterly Narrative Reports, the MBDA approved continued funding to the Beaumont center for 1989, 1990, and 1991. These reports indicated that the center had provided assistance to several Beaumont area construction companies resulting in the receipt of millions of dollars of construction contracts and surety bonds.
The total federal funds awarded for the Beaumont center to Boutte, Elmore & Company from 1988 through 1991 was $603,255. Defendant's Answer at 19. At Mr. Boutte's 1992 criminal trial, however, it was established that he and his accounting firm had committed twenty-three fraudulent acts in connection with MBDA grant requests and reports. Two of the accounting firm's employees *241 whose salaries were funded by federal grant monies were substantially utilized in private matters for the firm.
The United States contends that the criminal proceeding determined as a matter of law the predicate facts necessary to find Mr. Boutte liable for committing twenty-three violations of the False Claims Act. The defendant responds that two issues should foreclose summary judgment in this case. First, Mr. Boutte asserts that the facts litigated in the criminal proceeding do not establish violations of the False Claims Act. Second, relying on United States v. Halper, Mr. Boutte argues that there are insufficient facts in the record to allow this court to determine whether the Double Jeopardy Clause is implicated. 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989).
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when the moving party is able to demonstrate that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Where the record could not lead a rational trier of fact to find for the non-moving party, there exists no genuine issue for trial. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986).
The Court must view the evidence introduced and all factual inferences from the evidence in the light most favorable to the party opposing summary judgment. Eastman Kodak v. Image Technical Services, 504 U.S. 451, 112 S.Ct. 2072, 2077, 119 L.Ed.2d 265 (1992); Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356. However, this favorable presumption for the nonmovant exists only when the nonmovant presents an actual controversy of fact.
ANALYSIS
1. Previously Litigated Acts of Fraud
The False Claims Act provides for liability against:
Any person who
(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.
31 U.S.C. § 3729(a). Mr. Boutte cannot challenge issues material and necessary to his criminal conviction in an attempt to defeat liability under the False Claims Act. See, e.g., Montana v. United States, 440 U.S. 147, 155-58, 99 S.Ct. 970, 974-76, 59 L.Ed.2d 210 (1979).
The doctrine of collateral estoppel forecloses a party from re-litigating issues which were necessary to the result of a previous proceeding. See, e.g., Lawlor v. National Screen Service Corp., 349 U.S. 322, 326, 75 S.Ct. 865, 867, 99 L.Ed. 1122 (1955). Collateral estoppel is particularly appropriate when the prior proceeding was a criminal action. United States v. Thomas, 709 F.2d 968, 972 (5th Cir.1983), later proceeding, 768 F.2d 686 (1985) cert. denied, 475 U.S. 1014, 106 S.Ct. 1194, 89 L.Ed.2d 309 (1986); United States v. Killough, 848 F.2d 1523, 1528 (11th Cir.1988). "Because of the existence of a higher standard of proof and greater procedural protection in a criminal prosecution, a conviction is conclusive as to an issue arising against the criminal defendant in a subsequent civil action." Thomas, 709 F.2d at 972.
Section 3731(d) of the False Claims Act instructs trial courts to give conclusive collateral estoppel effect to criminal convictions in any civil action arising under the Act:
Notwithstanding any other provision of law, the Federal Rules of Criminal Procedure, or the Federal Rules of Evidence, a final judgment rendered in favor of the United States in any criminal proceeding charging fraud or false statements, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the *242 defendant from denying the essential elements of the offense in any action which involves the same transaction as in the criminal proceeding and which is brought under subsection (a) or (b) of section 3730.
The present action is precisely the type of companion civil proceeding this statutory language addresses. See, e.g., United States v. O'Connell, 890 F.2d 563 (1st Cir.1989); Berdick v. United States, 222 Ct.Cl. 94, 612 F.2d 533 (1989); Sell v. United States, 336 F.2d 467 (10th Cir.1964). The convictions of Mr. Boutte clearly establish the necessary facts to satisfy twenty-three violations of subsections (a) and (b) of section 3730 of the False Claims Act.
Once liability is established, section 3729(a) of the Act requires the imposition of a civil penalty of "not less than $5,000 and not more than $10,000" for each violation. The same subsection of the Act requires the court to award plaintiffs three times the amount of damages actually sustained by the United States due to such frauds.
Although the government would have us place the United States' actual loss at $540,070, this court in 1992 found that the government's loss was proven only to the extent of $301,627. Of course, an order of restitution is not equivalent to a judicial determination of damages. United States v. Barnette, 10 F.3d 1553 (11th Cir.1994). In fashioning an appropriate restitution figure, which is an equitable remedy, a judge is free to consider factors such as a defendant's ability to pay. Even so, in 1992, this Court did more than merely award a restitution amount. In the judgment, the Court explained that it was finding the government's loss to be $301,627.
Although this loss figure is not equivalent to damages, it is the base number the Court will use in this proceeding for determining treble "damages." Hence, Mr. Boutte is liable to the government under the False Claims Act for $904,881. Furthermore, the False Claims Act tacks on a penalty ranging from $5,000 to $10,000 for each violation of the act. Because the plaintiff has not presented any evidence of why the fine should not be higher than the statutory minimum, this Court believes it is only authorized to assess a $5,000 fine for each of the twenty-three violations. See United States v. Fliegler, 756 F.Supp. 688 (E.D.N.Y.1990). In addition, it is unclear how developed the record needs to be in False Claims Act cases, before a court can award a sum certain at the summary judgment stage. This Court, however, is confident that no mitigating circumstances which could be alleged by Mr. Boutte would make a fine of $5,000 for each of his violations excessive. Cf. United States v. Gilbert Realty Co., Inc., 840 F.Supp. 71 (E.D.Mich.1993).
When one adds this $115,000 penalty to the $904,881, the sum is $1,019,881. Although it will not alter the total award to the plaintiff, the Court notes that any amount Mr. Boutte pays on his criminal restitution award will offset his civil liability in this case pursuant to 18 U.S.C. 3663(e)(2)(A).
2. Double Jeopardy Concerns
Mr. Boutte argues that assessing him with treble damages and civil penalties for the same conduct for which he is currently serving a sentence of incarceration implicates the Double Jeopardy Clause of the Fifth Amendment. That provision protects against three permutations of overreaching: a second prosecution for the same offense after an acquittal, a second prosecution for the same offense after a conviction, and multiple punishments for the same offense. North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656 (1969). In this case, it is this third type of abuse, multiple punishments, which Mr. Boutte alleges.
Mr. Boutte correctly cites United States v. Halper for the proposition that a civil penalty can constitute punishment if it bears no rational relation to the total damage caused to the government. 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989). Hence, if an individual is convicted criminally for fraud, and the same conduct is later "punished" in a civil action, the Double Jeopardy Clause has been violated.
The controlling question, then, is what distinguishes a mere penalty from a punishment? Any civil award has both a *243 remedial aspect for the plaintiff and a deterrent effect on a class of defendants. It is impermissible in the calculation of the civil award to take into account the deterrent effect on the class of defendants to do so would be functionally equivalent to assessing a punishment. It is appropriate, however, in the accomplishment of "rough justice" to assess an amount greater than the actual damages suffered by the plaintiff. Halper, 490 U.S. at 449, 109 S.Ct. at 1902.
The question in this case is whether an award of $1,019,881 for a loss of $301,627 is a punishment? The award would be approximately 3.38 times the proven direct loss to the government. However, that ratio of award-to-damages would be decreased if one factored in, for example, the costs the government has incurred in prosecuting and investigating the criminal and civil actions to date.
This Court is uncertain how abrasive the fit between proven damages and statutory awards can be before a formal accounting is necessitated. Nonetheless, given the case law in this area, this Court is confident that the justice it is dispensing today is not so rough as to call for a hearing on damages. An award of $1,019,881 in this case is not punishment; rather, it bears a rational relationship to the remediation of the government.
CONCLUSION
The United States has succeeded in proving there to be no genuine issue of material fact regarding its claims in this case. The plaintiff has shown as a matter of law why it should prevail against the defendant Gregory Boutte. It is therefore ORDERED that Plaintiff's Motion for Summary Judgment be GRANTED consistent herewith. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1765989/ | 814 F.Supp. 553 (1993)
The OAKS PSYCHIATRIC HOSPITAL, INC. d/b/a The Oaks Treatment Center, Plaintiff,
v.
AMERICAN HERITAGE LIFE INSURANCE COMPANY, Defendant.
No. A 92 CA 654.
United States District Court, W.D. Texas, Austin Division.
January 22, 1993.
*554 Dennis K. Powell, Powell & Jackson, no pro hac vice, Houston, TX, for plaintiff.
Andrew G. Jubinsky, Figari & Davenport, Dallas, TX, for defendant.
ORDER
SPARKS, District Judge.
Before the Court is Defendant's Motion to Dismiss, filed November 30, 1992. Having considered this motion, Plaintiffs Response, filed December 18, 1992, and the pleadings in this cause, the Court finds Defendant's motion is meritorious and should be granted and further finds that all of Plaintiff's causes of action, not merely those enumerated in Defendant's Motion to Dismiss, are preempted by the Employee Retirement Income Security Act ("ERISA").
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff, the Oaks Psychiatric Hospital, Inc. d/b/a the Oaks Treatment Center ("the Oaks" or "Plaintiff"), rendered in-house medical services to Matthew Goode ("Matthew") from March 15, 1990 until his discharge on April 1, 1991. According to Plaintiff, an employee of Defendant confirmed and verified the extent of Matthew's coverage under Gloria Auvenshine's (Matthew's mother) policy with Defendant prior to Matthew's admittance to the Oaks. On March 15, 1990, Ms. Auvenshine assigned her benefits under her policy to the Oaks. Defendant paid a portion of the $325,635.06 billed to Matthew's account, but, according to Plaintiff, still owes $201,712.82.
Seeking to recover the unpaid $202,712.82, the Oaks filed suit in the 345th Judicial District Court, Travis County, Texas, on October 26, 1992. According to the Oaks, Defendant misrepresented the amount of coverage it would provide for Matthew's treatment, and, as a result, the Oaks incurred substantial damages. In its original petition, the Oaks alleges the following causes of action: (1) negligent verification and misrepresentation; (2) breach of common law duty of good faith; (3) breach of contract; (4) promissory estoppel; (5) violation of Texas Insurance Code Article 21.21 § 4(1); and violation of the Texas Business and Commerce Code § 17.46 ("DTPA violation").
On November 23, 1992, Defendant removed the suit to the United States District Court of the Western District of Texas, Austin Division on the grounds that Plaintiff's claims all relate to an employee benefit plan and are, therefore, covered by the Employee Retirement Income Security Act of 1974 ("ERISA"). See Notice of Removal, at 1, para. 2 (Nov. 23, 1992) (citing Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)) (remaining citations omitted).
Accordingly, on November 30, 1992, Defendant filed its motion to dismiss on the grounds that Plaintiff's causes of action are preempted by ERISA.[1]See 29 U.S.C. *555 § 1144(a) (1985). Plaintiff filed its response to Defendant's motion to dismiss on December 18, 1992, in which it did not contest the existence of an ERISA plan,[2] Matthew Goode's coverage under that plan, or preemption of its claims for breach of common law duty of good faith, breach of contract, and promissory estoppel. Rather, Plaintiff only argued that its claims for negligent verification and misrepresentation, violations of article 21.21, and violations of the DTPA were not preempted under ERISA.
II. ERISA PREEMPTION
ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan...." See 29 U.S.C. § 1144(a). "The term `State law' includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State." Id. § 1144(c). Accordingly, the Supreme Court and Fifth Circuit Court of Appeals have held claims based in tort, contract, and equity and statutory causes of action preempted under ERISA. See e.g., Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987)) (citing Pilot Life Ins. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987)) (common law contract and tort claims preempted); Williams v. Bridgestone/Firestone, Inc., 954 F.2d 1070, 1072-73 (5th Cir.1992) (equitable estoppel preempted); Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1290 (5th Cir.1988) ("Hermann I") (breach of fiduciary duty, negligence, equitable estoppel, breach of contract, and fraud preempted); Hogan v. Kraft Foods, 969 F.2d 142, 144-45 (5th Cir. 1992) (Texas DTPA and breach of duty of good faith and fair dealing preempted); Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 763-64 (5th Cir.1989) (violations of article 21.21 of Texas Insurance Code preempted). Thus, it is clear that all of Plaintiffs causes of action in this case would, without question, be preempted under ERISA if they had been brought by Gloria Auvenshine or Matthew Goode.
The Oaks, however, argues that it is an independent health care provider not covered under ERISA and that its claims for negligent verification and misrepresentation, violation of article 21.21 of the Texas Insurance Code, and violation of the Texas DTPA are not sufficiently related to an ERISA plan to warrant preemption. See Plaintiff's Response to Defendant's Motion to Dismiss, at 4-5, 7 (Dec. 18, 1992) (citing Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir.1990). The Oaks argues that finding these causes of actions preempted would shield welfare plan fiduciaries "from the consequences of their deceptive and misleading conduct toward non-ERISA participants ... and would undermine the purpose of ERISA in promoting the interests of employees and their beneficiaries." Id. at 8. In addition, the Oaks states "[i]f health care providers have no effective recourse under either ERISA or state law against plans which wrongfully deny health benefit claims, providers will be reluctant to accept the risk of non-payment and may require up-front payment from plan beneficiaries before offering treatment." Id. at 2.
This issue has already been decided by this Court. In Brown Schools, Inc. v. Florida Power Corporation, 806 F.Supp. 146 (W.D.Tex.1992), this Court held that when, as here, payments have been made under the ERISA plan to the provider, so that the extent of, but not existence of, coverage was in dispute, a provider which had been assigned the beneficiary's benefits under the ERISA plan could pursue claims under ERISA, but not under state law. See id. at 150-51; see also Hermann Hosp. v. MEBA Medical & Benefits Plan, 959 F.2d 569, 576 (5th Cir.1992) ("Hermann II") (hospital assigned beneficiary's benefits under ERISA plan has standing to sue under ERISA); Psychiatric Inst. of Wash., D.C., Inc. v. Wells, 1992 WL 237368, at *3 (D.D.C. Aug. 31, 1992) (all claims of provider who was assigned beneficiary's benefits in contract, in tort, and in equity were preempted by *556 ERISA). This holding promotes, not defeats, Congress's intent in passing ERISA. As previously stated by this Court,
[a]llowing Plaintiff to assert state law claims which would otherwise be preempted under ERISA could ... altogether defeat the purposes of ERISA in cases involving medical coverage as beneficiaries could simply always assign their rights to medical providers, who would then not be bound by the preemption provision of ERISA. This Court does not believe that was the intent of the Fifth Circuit in Memorial.
Brown, 806 F.Supp. at 150; see also Hermann I, 845 F.2d at 1290.
Furthermore, Plaintiff's analogy of its situation to that of Memorial Hospital is inapposite as in Memorial the beneficiary whose benefits had been assigned to Memorial Hospital was not covered by the ERISA plan at all. Thus, standing in the shoes of its assignor/beneficiary, Memorial could not sue under ERISA and would have been denied any avenue of relief had all of its state claims been preempted. See Brown, 806 F.Supp. at 150-51; see Memorial 904 F.2d at 246-47. Plaintiff's avenues for recourse, however, are not cut off entirely, rather Plaintiff is limited to the same means of recovery under ERISA available to Gloria Auvenshine, who assigned her benefits to Plaintiff.
III. CONCLUSION
Plaintiff's causes of action are all related to an ERISA plan. Plaintiff as assignee of the benefits under the ERISA plan can sue Defendant under ERISA, but cannot assert claims unavailable to the ERISA beneficiary/assignor who assigned those rights to Plaintiff. Therefore, because ERISA preempts each of the state causes of action brought by Plaintiff, and because Plaintiff has not asserted a claim under ERISA, this Court has no subject matter jurisdiction and so enters the following orders:
IT IS ORDERED that Defendant's Motion to Dismiss is GRANTED.
IT IS FURTHER ORDERED that ALL causes of action in the above-styled and numbered case are DISMISSED.
IT IS FINALLY ORDERED that Plaintiff has ten (10) days from the date this order is filed to file an amended complaint including a claim under ERISA.
NOTES
[1] Defendant only asked that Plaintiff's claims for breach of contract, breach of the duty of good faith, promissory estoppel, and attorneys' fees be dismissed.
[2] In any case, the copy of Winn Dixie's (Ms. Auvenshine's employer) benefits program, attached as an exhibit to an affidavit attached to Defendant's Motion to Dismiss, leaves no room for dispute that Ms. Auvenshine's insurance policy with Defendant is maintained under Winn Dixie's employee welfare benefit plan, an ERISA plan. See 29 U.S.C. § 1002(1) (1985). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2524381/ | 953 N.E.2d 92 (2008)
352 Ill. Dec. 156
PEOPLE
v.
TRIMBY.
No. 4-06-0790.
Appellate Court of Illinois, Fourth District.
January 9, 2008.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2391036/ | 585 S.W.2d 674 (1979)
HENRY S. MILLER COMPANY, Petitioner,
v.
TREO ENTERPRISES et al., Respondent.
No. B-8096.
Supreme Court of Texas.
July 25, 1979.
*675 Wynne & Jaffe, Harold Hoffman, Dallas, for petitioner.
Kasmir, Willingham & Krage, Ben L. Krage, Dallas, for respondent.
McGEE, Justice.
The Henry S. Miller Company brought this action against Treo Enterprises, Sidney S. Smiley, Richard C. Smiley and Leo T. Hyman (hereinafter Treo) to recover the sum of $11,250.00 due under a promissory note. Treo answered and also brought a counterclaim against Miller seeking cancellation of the note and the return of all monies paid thereunder. After a trial to a jury, the trial court rendered judgment that both sides take nothing. Miller appealed, and the court of civil appeals affirmed. 573 S.W.2d 553. We affirm the judgment of the court of civil appeals.
In February of 1975 Miller obtained from the Jones Lake Company the exclusive right to sell a certain warehouse located in Dallas County, Texas. This arrangement was facilitated by the execution of a "CONTRACT OF SALE." This contract named Jones Lake Company as seller and Henry S. Miller, "trustee and/or assigns," as buyer. The instrument also named Henry S. Miller as principal agent with the seller expressly agreeing to pay $15,000 upon closing. According to the plan, Miller would acquire an assignee of its purchase rights under the contract of sale.
Subsequent to the execution of the contract, an employee of the Miller Company, Jerry McCutchin, solicited Treo to purchase the warehouse as Miller's assignee. To finance the $285,000 purchase price, Treo borrowed $60,000 and assumed Jones Lake Company's current mortgage of approximately $205,000. In order to further reduce the cash outlay, Jones Lake, Miller, and Treo agreed that Treo could deduct the $15,000 commission from the purchase price, and give Miller a promissory note in that same amount. Treo put up $5,000 cash and the transaction was closed on April 15, 1975.
Treo made three payments on the note and then advised Miller that it would not make further payments because of certain misrepresentations that Miller had made concerning the property. Miller, in turn, brought this suit on the note. Trial was to a jury, which found that the note was made for the purpose of paying a real estate commission to Miller. It further answered special issues concerning fraud and misrepresentation in Miller's favor. Judgment was rendered that both sides take nothing, and Miller appealed.
The court of civil appeals affirmed the judgment of the trial court. It held that Miller was precluded from recovering its commission because it failed to plead and prove that it was a duly licensed broker as required by the Real Estate License Act, Tex.Rev.Civ.Stat.Ann. art. 6573a, § 20(a). We granted Miller's application for writ of error to consider whether article 6573a is applicable to the present suit, and if so, whether Miller complied with its provisions.
It is settled that the Real Estate License Act, Tex.Rev.Civ.Stat.Ann. art 6573a, is a valid exercise of the State's police power to regulate a private business which affects the public interest. The purpose of the statute is to eliminate or reduce fraud that might be occasioned on the public *676 by unlicensed, unscrupulous, or unqualified persons. Hall v. Hard, 160 Tex. 565, 571, 335 S.W.2d 584, 589 (1960); Gregory v. Roedenbeck, 141 Tex. 543, 547, 174 S.W.2d 585, 586-87 (1943); Justice v. Willard, 538 S.W.2d 651, 653 (Tex.Civ.App.Amarillo 1976, no writ). See generally Williston on Contracts § 1765, at 247 (3d ed. 1972); Andur, The Real Estate License ActSynopsis, Elaboration and Comments, 12 S.Tex. L.J. 269, 270-72 (1970) (brief history of the Act).
The Act generally binds those persons or business entities which engage in the real estate business. Tex.Rev.Civ.Stat. Ann. art. 6573a, § 1; Macphee v. Kinder, 523 S.W.2d 509, 511 (Tex.Civ.App.San Antonio 1975, no writ). Specifically, the Act makes it unlawful for a person to act in the capacity of a real estate broker or salesman within this state without first obtaining a real estate license from the Texas Real Estate Commission.[1] Tex.Rev.Civ. Stat.Ann. art 6573a, § 1; Id. § 20(a) (criminal penalties imposed.) Section 20(a) further provides:
A person may not bring or maintain an action for the collection of compensation for the performance in this state of an act set forth in Section 2 of this Act without alleging and proving that the person performing the brokerage services was a duly licensed real estate broker or salesman at the time the alleged services were commenced, or was a duly licensed attorney at law in this state or in any other state.
Id. Texas courts have consistently required a strict compliance with the terms of the Act, where applicable, if a real estate broker or salesman is to use the court for the recovery of fees. Hall v. Hard, 160 Tex. 565, 572, 335 S.W.2d 584, 589 (1960); Raybourn v. Lewis, 567 S.W.2d 908, 911 (Tex.Civ. App.San Antonio 1978, writ ref'd n.r.e.); Elrod v. Becker, 537 S.W.2d 84, 86 (Tex.Civ. App.Beaumont 1976, writ ref'd n.r.e.); Macphee v. Kinder, 523 S.W.2d 509, 512 (Tex.Civ.App.San Antonio 1975, no writ).
Miller concedes that it neither plead nor proved that it was a licensed broker but argues that the Real Estate License Act is inapplicable to the present case. Miller reasons that its suit is not an action seeking the recovery of a real estate commission; rather it is an action on a promissory note representing a partial financing of the purchase price of the warehouse. We disagree.
For the purposes of determining the applicability of the Real Estate License Act and the necessity of a license to recover a fee, the substance of the contract is the controlling question, not the form which the transaction ultimately takes. Lehman Brothers, Inc. v. Sugarland Industries, Inc., 537 S.W.2d 121, 123 (Tex.Civ.App.Houston [14th Dist.] 1976, writ ref'd n.r.e.). To hold otherwise would encourage unlicensed entities to develop ingenious devices or other *677 indirections to evade the salutary purposes of the Act. See Coastal Plains Development Corp. v. Micrea, Inc., 572 S.W.2d 285, 289 (Tex.1978); Breeding v. Anderson, 152 Tex. 92, 94-95, 254 S.W.2d 377, 378-79 (1953); Justice v. Willard, 538 S.W.2d 651, 654-57 (Tex.Civ.App.Amarillo 1976, no writ).
In our opinion this is an action to recover a fee in exchange for brokerage services. Our legislature has recognized that attempts to recover compensation for real estate services may take different forms, including the performance of brokerage services "on the promise of receiving or collecting a fee, commission, or other valuable consideration from another person." Tex.Rev.Civ.Stat.Ann. art. 6573a, § 2(2). (Emphasis added). In the trial court Miller prayed for recovery of the unpaid portion of the note, and singularly alleged: "Rather than pay a cash brokerage fee, Defendants [Treo, et al.] executed a promissory note ("note") payable to Henry S. Miller Company for a sum of $15,000." (Emphasis added). In its motion for judgment Miller further alleged: "It is undisputed that the remaining unpaid balance on the promissory note representing the real estate commission due and owing from Treo Enterprises to Henry S. Miller Company is $11,250." (Emphasis added). Under these pleadings, Miller cannot be heard to say at this time that this is a suit on a note representing a partial financing of the purchase price. A case will not be reviewed on a theory different from that on which it was pleaded and tried. American Mutual Liability Insurance Co. v. Parker, 144 Tex. 453, 460, 191 S.W.2d 844, 848 (1945); Askey v. Power, 36 S.W.2d 446, 449 (Tex.Com.App. 1931, holding approved); Phillips v. Inexco Oil Co., 540 S.W.2d 546, 550 (Tex.Civ.App. Tyler 1976, writ ref'd n.r.e.).
Miller also argues that there is no evidence to support the jury's finding that the promissory note was made for the purpose of paying a real estate commission. When a party asserts that there is no evidence to support a jury finding, we must review the evidence in its most favorable light, considering only the evidence and inferences which support the finding, and rejecting the evidence and inferences contrary to the finding. Rourke v. Garza, 530 S.W.2d 794, 799 (Tex.1975); Martinez v. Delta Brands, Inc., 515 S.W.2d 263, 265 (Tex.1974); Langlotz v. Citizens Fidelity Insurance Co., 505 S.W.2d 249, 251 (Tex.1974). Although the evidence in this case is somewhat conflicting, there is some evidence to support the jury's answer to this special issue. The Miller Company agent in charge of the warehouse account testified that the note Treo executed represented a real estate commission to the Miller Company. He further testified that if the Miller Company prevailed in the present suit he would receive his part of the commission out of the award. Richard Smiley, an officer of Treo, similarly testified that the note was executed for the purpose of paying the commission out over a period of time.
Miller directs our attention to Miller v. Aaron, 413 S.W.2d 426 (Tex.Civ.App.Dallas 1967, writ ref'd n.r.e.) and McCall v. Johns, 294 S.W.2d 869 (Tex.Civ.App.San Antonio 1956, writ ref'd n.r.e.) for the proposition that the Act is not applicable to the present suit. These cases are distinguishable. In Aaron the court held the Act inapplicable because the summary judgment proof conclusively established that the vendee's two promissory notes payable to the vendor represented "not a broker's commission but a part of the purchase price of land." 413 S.W.2d at 430. On substantially different facts, the note in the present case was found to represent the payment of a real estate commission. The McCall case was a suit by an unlicensed vendee against the real estate agent to enforce an agreement to refund one-half of the commission. The court held the Act inapplicable because the vendee had not performed any real estate services in purchasing the land for himself. 294 S.W.2d at 871. There is no similar issue in the present suit.
We therefore hold that the Real Estate License Act is applicable to the present suit. Miller was required to plead and prove that it was a duly licensed real estate broker in *678 order to recover on the note representing its commission.
In its second point of error Miller alternatively contends that it complied with the Real Estate License Act. Miller points out that the undisputed evidence shows that its employee, the person actually performing the brokerage services, was a licensed broker. This argument was foreclosed by our recent opinion in Coastal Plains Development Corp. v. Micrea, Inc., 572 S.W.2d 285 (Tex.1978). In that case Micrea contended that it had complied with the Act since its president, who performed the brokerage services, was duly licensed at all relevant times. Without expressing an opinion as to whether this fact constituted substantial compliance, we held that substantial compliance would not suffice. We concluded: "An entity seeking to recover compensation for any of the services listed in § 4(1) [amended § 2(2)] of the Act must strictly comply with § 19 [amended § 20(a)] in order to use the courts of this State." Id. at 289 [citing Hall v. Hard, 160 Tex. 565, 335 S.W.2d 584 (1960); Elrod v. Becker, 537 S.W.2d 84 (Tex.Civ.App.San Antonio 1976, writ ref'd n.r.e.); Macphee v. Kinder, 523 S.W.2d 509 (Tex.Civ.App. San Antonio 1975, no writ).
In this case Miller plead that: "The property was sold to Treo Enterprises with Henry S. Miller Company acting as selling agent, ..." (emphasis added). Miller is the entity whose name appears as principal agent in the contract of sale. Moreover, Miller by this suit seeks to recover the real estate commission in its own name. We therefore hold that Miller failed to comply with Section 20(a) of the Real Estate License Act when it proved that its employee was a licensed broker.
The judgment of the court of civil appeals is affirmed.
NOTES
[1] A "real estate broker" is statutorily defined as:
... a person who, for another person and for a fee, commission, or other valuable consideration, or with the intention or in the expectation or on the promise of receiving or collecting a fee, commission, or other valuable consideration from another person:
(A) sells, exchanges, purchases, rents or leases real estate;
(B) offers to sell, exchange, purchase, rent, or lease real estate;
(C) negotiates or attempts to negotiate the listing, sale, exchange, purchase, rental, or leasing of real estate;
(D) lists or offers or attempts or agrees to list real estate for sale, rental, lease, exchange, or trade;
(E) appraises or offers or attempts or agrees to appraise real estate;
(F) auctions, or offers or attempts or agrees to auction, real estate;
(G) buys or sells or offers to buy or sell, or otherwise deals in options on real estate;
(H) aids, attempts, or offers to aid in locating or obtaining for purchase, rent, or lease any real estate;
(I) procures or assists in the procuring of prospects for the purpose of effecting the sale, exchange, lease, or rental of real estate; or
(J) procures or assists in the procuring of properties for the purpose of effecting the sale, exchange, lease, or rental of real estate.
Tex.Rev.Civ.Stat.Ann. art. 6573a, § 2(2) (Vernon Supp.1978-1979). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/102797/ | 300 U.S. 577 (1937)
HENNEFORD ET AL.
v.
SILAS MASON CO., INC. ET AL.
No. 418.
Supreme Court of United States.
Argued December 14, 15, 1936.
Reargued March 1, 2, 1937.
Decided March 29, 1937.
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF WASHINGTON.
*578 Mr. R.G. Sharpe, Assistant Attorney General of Washington, with whom Mr. G.W. Hamilton, Attorney General, was on the brief, for appellants.
Mr. B.H. Kizer, with whom Mr. W.G. Graves was on the brief, for appellees.
MR. JUSTICE CARDOZO delivered the opinion of the Court.
A statute of Washington taxing the use of chattels in that state is assailed in this suit as a violation of the commerce clause (Constitution of the United States. Article I, § 8) in so far as the tax is applicable to chattels purchased in another state and used in Washington thereafter.
*579 Plaintiffs (appellees in this court) are engaged either as contractors or as subcontractors in the construction of the Grand Coulee Dam on the Columbia River. In the performance of that work they have brought into the state of Washington machinery, materials and supplies, such as locomotives, cars, conveyors, pumps, and trestle steel, which were bought at retail in other states. The cost of all the articles with transportation expenses added was $921,189.34. Defendants, the Tax Commission of Washington (appellants in this court) gave notice that plaintiffs had become subject through the use of this property to a tax of $18,423.78, two per cent of the cost, and made demand for payment. A District Court of three judges, organized in accordance with § 266 of the Judicial Code (28 U.S.C. § 380), adjudged the statute void upon its face, and granted and interlocutory injunction, one judge dissenting. 15 F. Supp. 958. The case is here upon appeal. 28 U.S.C. § 380.
Chapter 180 of the Laws of Washington for the year 1935, consisting of twenty titles, lays a multitude of excise taxes on occupations and activities. Only two of these taxes are important for the purposes of the case at hand, the "tax on retail sales," imposed by Title III, and the "compensating tax," imposed by Title IV on the privilege of use. Title III provides that after May 1, 1935, every retail sale in Washington, with a few enumerated exceptions,[1] shall be subject to a tax of 2% of *580 the selling price. Title IV, with the heading "compensating tax," provides (§§ 31, 35) that there shall be collected from every person in the state "a tax or excise for the privilege of using within this state any article of tangible personal property purchased subsequent to April 30, 1935," at the rate of 2% of the purchase price, including in such price the cost of transportation from the place where the article was purchased. If those provisions stood alone, they would mean that retail buyers within the state would have to pay a double tax, 2% upon the sale and 2% upon the use. Relief from such a burden is provided in another section (§ 32) which qualifies the use tax by allowing four exceptions. Only two of these exceptions (b and c) call for mention at this time.[2] Subdivision (b) provides that the use tax shall not be laid unless the property has been bought at retail. Subdivision (c) provides that the tax shall not *581 apply to the "use of any article of tangible personal property the sale or use of which has already been subjected to a tax equal to or in excess of that imposed by this title whether under the laws of this state or of some other state of the United States." If the rate of such other tax is less than 2%, the exemption is not to be complete (§ 33), but in such circumstances the rate is to be measured by the difference.
The plan embodied in these provisions is neither hidden nor uncertain. A use tax is never payable where the user has acquired property by retail purchase in the state of Washington, except in the rare instances in which retail purchases in Washington are not subjected to a sales tax. On the other hand, a use tax is always payable where the user has acquired property by retail purchase in or from another state, unless he has paid a sales or use tax elsewhere before bringing it to Washington. The tax presupposes everywhere a retail purchase by the user before the time of use. If he has manufactured the chattel for himself, or has received it from the manufacturer as a legacy or gift, he is exempt from the use tax, whether title was acquired in Washington or elsewhere. The practical effect of a system thus conditioned is readily perceived. One of its effects must be that retail sellers in Washington will be helped to compete upon terms of equality with retail dealers in other states who are exempt from a sales tax or any corresponding burden. Another effect, or at least another tendency, must be to avoid the likelihood of a drain upon the revenues of the state, buyers being no longer tempted to place their orders in other states in the effort to escape payment of the tax on local sales. Do these consequences which must have been foreseen, necessitate a holding that the tax upon the use is either a tax upon the operations of interstate commerce or a discrimination against such commerce obstructing or burdening it unlawfully?
*582 1. The tax is not upon the operations of interstate commerce but upon the privilege of use after commerce is at an end.
Things acquired or transported in interstate commerce may be subjected to a property tax, non-discriminatory in its operation, when they have become part of the common mass of property within the state of destination. Wiloil Corp. v. Pennsylvania, 294 U.S. 169, 175; Cudahy Packing Co. v. Minnesota, 246 U.S. 450. 453; Brown-Forman Co. v. Kentucky, 217 U.S. 563, 575; American Steel & Wire Co. v. Speed, 192 U.S. 500, 519; Woodruff v. Parham, 8 Wall. 123, 137. This is so, indeed, though they are still in the original packages. Sonneborn Bros. v. Cureton, 262 U.S. 506; American Steel & Wire Co. v. Speed, supra; Woodruff v. Parham, supra. For like reasons they may be subjected, when once they are at rest to a non-discriminatory tax upon use or enjoyment. Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 267; Edelman v. Boeing Air Transport, Inc., 289 U.S. 249, 252; Monamotor Oil Co. v. Johnson, 292 U.S. 86, 93. The privilege of use is only one attribute, among many, of the bundle of privileges that make up property or ownership. Nashville, C. & St. L. Ry. Co. v. Wallace, supra; Bromley v. McCaughn, 280 U.S. 124, 136-138; Burnet v. Wells, 289 U.S. 670, 678. A state is at liberty, if it pleases, to tax them all collectively, or to separate the faggots and lay the charge distributively. Ibid. Calling the tax an excise when it is laid solely upon the use (Vancouver Oil Co. v. Henneford, 183 Wash. 317; 49 P. (2d) 14) does not make the power to impose it less, for anything the commerce clause has to say of its validity, than calling it a property tax and laying it on ownership. "A nondiscriminatory tax upon local sales . . . has never been regarded as imposing a direct burden upon interstate commerce and has no greater or different effect upon that commerce than a general property tax to which all those enjoying the protection of the *583 State may be subjected." Eastern Air Transport, Inc. v. South Carolina Tax Comm'n, 285 U.S. 147, 153. A tax upon the privilege of use or storage when the chattel used or stored has ceased to be in transit is now an impost so common that its validity has been withdrawn from the arena of debate. Nashville, C. & St. L. Ry. Co. v. Wallace, supra; Edelman v. Boeing Air Transport, Inc., supra; Monamotor Oil Co. v. Johnson, supra. Cf. Vancouver Oil Co. v. Henneford, supra.
The case before us does not call for approval or disapproval of the definition of use or enjoyment in the rules of the Commission. Those rules inform us that "property is put to use by the first act after delivery is completed within the state by which the article purchased is actually used or is made available for use with intent actually to use the same within the state. The term `made available for use' means and includes the exercise of any right or power over tangible personal property preparatory to actual use within the state, such as keeping, storing, withdrawing from storage, moving, installing or performing any act by which dominion or control over the property is assumed by the purchaser." A tax upon a use so closely connected with delivery as to be in substance a part thereof might be subject to the same objections that would be applicable to a tax upon the sale itself. If the rules are too drastic in that respect or others, the defect is unimportant in relation to this case. Here the machinery and other chattels subjected to the tax have had continuous use in Washington long after the time when delivery was over. The plaintiffs are not the champions of any rights except their own.
2. The tax upon the use after the property is at rest is not so measured or conditioned as to hamper the transactions of interstate commerce or discriminate against them.
Equality is the theme that runs through all the sections of the statute. There shall be a tax upon the use, but subject *584 to an offset if another use or sales tax has been paid for the same thing. This is true where the offsetting tax became payable to Washington by reason of purchase or use within the state. It is true in exactly the same measure where the offsetting tax has been paid to another state by reason of use or purchase there. No one who uses property in Washington after buying it at retail is to be exempt from a tax upon the privilege of enjoyment except to the extent that he has paid a use or sales tax somewhere. Every one who has paid a use or sales tax anywhere, or, more accurately, in any state, is to that extent to be exempt from the payment of another tax in Washington.
When the account is made up, the stranger from afar is subject to no greater burdens as a consequence of ownership than the dweller within the gates. The one pays upon one activity or incident, and the other upon another, but the sum is the same when the reckoning is closed. Equality exists when the chattel subjected to the use tax is bought in another state and then carried into Washington. It exists when the imported chattel is shipped from the state of origin under an order received directly from the state of destination. In each situation the burden borne by the owner is balanced by an equal burden where the sale is strictly local. "There is no demand in . . . [the] Constitution that the State shall put its requirements in any one statute. It may distribute them as it sees fit, if the result, taken in its totality, is within the State's constitutional power." Gregg Dyeing Co. v. Query, 286 U.S. 472, 480. If the sales tax were abolished, the buyer in Washington would pay at once upon the use. He would have no longer an offsetting credit. While the sales tax is in force, he pays upon the sale, and pays at the same rate. For the owner who uses after buying from afar the effect is all one whether his competitor is taxable under one title or another. This common sense conclusion has ample precedent behind it. Alabama laid a tax on *585 the sale of spirituous liquors, the products of sister states. Comparing the tax with others applicable to domestic products, the court upheld the statute. The methods of collection were different, but the taxes were complementary and were intended to effect equality. Hinson v. Lott, 8 Wall. 148. Louisiana laid a tax in lieu of local taxes on rolling stock operated within the state but belonging to corporations domiciled elsewhere. The court compared the tax with the local taxes upon residents, and found discrimination lacking. General American Tank Car Corp. v. Day, 270 U.S. 367, 372, 373. South Carolina laid a tax on the storage of gasoline brought from other states and held for use in local business. The statute was interpreted by the state court as covering "all gasoline stored for use and consumption upon which a like tax has not been paid under other statutes." Upon comparison of all the statutes, the impost was upheld. The taxpayers had "failed to show that whatever distinction there existed in form, there was any substantial discrimination in fact." Gregg Dyeing Co. v. Query, supra.
Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, is invoked by appellees as decisive of the controversy, but the case is far apart from this one. There a statute of New York had made provision for a minimum price to be paid by dealers in milk to producers in that state. Cf. Nebbia v. New York, 291 U.S. 502; Hegeman Farms Corp. v. Baldwin, 293 U.S. 163. The same statute provided that when milk from another state had been brought into New York, the dealer should be prohibited from selling it at any price unless in buying the milk from the out-of-state producer he had paid the price that would be necessary if he had bought within the state. New York was attempting to project its legislation within the borders of another state by regulating the price to be paid in that state for milk acquired there. She said in effect to farmers in Vermont: your milk cannot be sold by dealers to whom you ship it in *586 New York unless you sell it to them in Vermont at a price determined here. What Washington is saying to sellers beyond her borders is something very different. In substance what she says is this: You may ship your goods in such amounts and at such prices as you please, but the goods when used in Washington after the transit is completed, will share an equal burden with goods that have been purchased here.
We are told that a tax upon the use, even though not unlawful by force of its effects alone, is vitiated by the motives that led to its adoption. These motives cause it to be stigmatized as equivalent to a protective tariff. But motives alone will seldom, if ever, invalidate a tax that apart from its motives would be recognized as lawful. Magnano Co. v. Hamilton, 292 U.S. 40, 44; Fox v. Standard Oil Co., 294 U.S. 87, 100, 101. Least of all will they be permitted to accomplish that result when equality and not preference is the end to be achieved. Catch words and labels, such as the words "protective tariff," are subject to the dangers that lurk in metaphors and symbols, and must be watched with circumspection lest they put us off our guard. A tariff, whether protective or for revenue. burdens the very act of importation, and if laid by a state upon its commerce with another is equally unlawful whether protection or revenue is the motive back of it. But a tax upon use, or, what is equivalent for present purposes, a tax upon property after importation is over, is not a clog upon the process of importation at all, any more than a tax upon the income or profits of a business. The contention would be futile that Washington in laying an ownership tax would be doing a wrong to non-residents in allowing a credit for a sales tax already borne by the owner as a result of the same ownership. To contend this would be to deny that a state may develop its scheme of taxation in such a way as to rid its exactions of unnecessary oppression. In the statute in dispute such a scheme has *587 been developed with sedulous regard for every interest affected. Yet a word of caution should be added here to avoid the chance of misconception. We have not meant to imply by anything said in this opinion that allowance of a credit for other taxes paid to Washington made it mandatory that there should be a like allowance for taxes paid to other states. A state, for many purposes, is to be reckoned as a self-contained unit, which may frame its own system of burdens and exemptions without heeding systems elsewhere. If there are limits to that power, there is no need to mark them now. It will be time enough to mark them when a taxpayer paying in the state of origin is compelled to pay again in the state of destination. This statute by its framework avoids that possibility. The offsetting allowance has been conceded, whether the concession was necessary or not, and thus the system has been divested of any semblance of inequality or prejudice. A taxing act is not invalid because its exemptions are more generous than the state would have been free to make them by exerting the full measure of her power.
Finally, there is argument that the tax now in question, though in form upon the use, was in fact upon the foreign sale, and not upon the use at all, the form being a subterfuge. The supposed basis for that argument is a reading of the statute whereby the use shall not be taxable if the chattel was manufactured by the user or received as a legacy or acquired in any way except through the medium of purchase, and a retail one at that. But the fact that the legislature has chosen to lay a tax upon the use of chattels that have been bought does not make the tax upon the use a tax upon the sale. One could argue with as much reason that there would be a tax upon the sale if a property tax were limited to chattells so acquired. A legislature has a wide range of choice in classifying and limiting the subjects of taxation. Bell's Gap R. Co. v. *588 Pennsylvania, 134 U.S. 232, 237; Ohio Oil Co. v. Conway, 281 U.S. 146, 159. The choice is as broad where the tax is laid upon one or a few of the attributes of ownership as when laid upon them all. Flint v. Stone Tracy Co., 220 U.S. 107, 158, 159. True, collections might be larger if the use were not dependent upon a prior purchase by the user. On the other hand, economy in administration or a fairer distribution of social benefits and burdens may have been promoted when the lines were drawn as they were. Such questions of fiscal policy will not be answered by a court. The legislature might make the tax base as broad or as narrow as it pleased.
The interlocutory injunction was erroneously granted, and the decree must be
Reversed.
MR. JUSTICE McREYNOLDS and MR. JUSTICE BUTLER dissent.
NOTES
[1] "Sec. 19 The tax hereby levied shall not apply to the following sales:
"(a) Casual and isolated sales by a person who is not engaged in the business of selling tangible personal property at retail;
"(b) Sales made by persons in the course of business activities with respect to which tax liability is specifically imposed under title V of this act, when the gross proceeds from such sales must be included in the measure of the tax imposed under said title V;
"(c) The distribution and news stand sale of newspapers;
"(d) Sales which the State of Washington is prohibited from taxing under the constitution of this state or the constitution or laws of the United States;
"(e) Sales of motor vehicle fuel taxable under chapter 58 of the Laws of 1933, section 5 (being Rem. Rev. Stat., section 8327-5);
"(f) Sales made on relief vouchers issued by the department of public welfare or by any county or city or other welfare agency;
"(g) Sales of fresh sweet milk, raw unprocessed fruits and vegetables, butter, eggs, cheese, canned milk and unsweetened bread in loaf form (including rolls and buns), sold for consumption off the premises."
[2] For greater certainty exceptions (a) and (d) are stated in this note;
"The provisions of this title shall not apply:
"(a) In respect to the use of any article of tangible personal property brought into the State of Washington by a non-resident thereof for his or her use or enjoyment while within the state;
"(d) In respect to the use of tangible personal property purchased during any calendar month, the total purchase price of which is less than twenty ($20.00) dollars." | 01-03-2023 | 04-28-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/1902056/ | 390 So. 2d 556 (1980)
Robert M. McHALE, Plaintiff and Appellee-Appellant,
v.
LAKE CHARLES AMERICAN PRESS et al., Defendants and Appellants.
No. 7756.
Court of Appeal of Louisiana, Third Circuit.
October 8, 1980.
Rehearings Denied December 1, 1980.
*557 Jones, Patin, Tete, Nolen & Hanchey, William M. Nolen, Lake Charles, Frank W. Middleton, Jr., of Taylor, Porter, Brooks & Phillips, Baton Rouge, for defendants and appellants.
Christopher J. Roy, Alexandria, McHale, Bufkin & Dees, Michael K. Dees, Lake Charles, for plaintiff and appellee-appellant.
Before CULPEPPER, DOMENGEAUX and CUTRER, JJ.
CULPEPPER, Judge.
The plaintiff, Robert M. McHale, sues the defendant, Lake Charles American Press, and its publisher, W. Hugh Sherman, for damages caused by a defamatory editorial. The trial judge awarded plaintiff compensatory damages in the sum of $150,000, but rejected plaintiff's claim for punitive damages and attorney's fees under LSA-C.C. Article 2315.1A. The defendants appeal. Plaintiff also appeals, seeking punitive damages and attorney's fees.
*558 The district judge has written a thorough opinion with which we agree, except for the denial of attorney's fees on the grounds that plaintiff is himself an attorney. With the exception noted, we adopt as our own the following opinion of the trial judge:
"This is a defamation action arising out of an editorial published by the Lake Charles American Press on July 21, 1977. Entitled `What's story behind McHall reappointment?', the editorial attacked the reappointment of Robert M. McHale as City Attorney of Lake Charles. It made a number of statements critical of him. In his petition, McHale alleged several statements were actionably defamatory. At the beginning of trial, he announced he would concentrate on but one. The Court does likewise. That statement is:
"No bond buyer would buy a nickel's worth of securities on McHale's opinion.
"Plaintiff McHale is an attorney. Defendant Lake Charles American Press, Inc., is the corporate owner of the newspaper `American Press'. Defendant W. Hugh Shearman is the publisher. He is also the author of the above quoted statement.[1]
"McHale has practiced law in Lake Charles since 1956 when he graduated from Tulane University Law School and was admitted to practice in Louisiana. In 1965 he was appointed City Attorney for Lake Charles. Two years later he became attorney for the Lake Charles Harbor and Terminal District, representing the Port of Lake Charles. One of his duties for these public bodies was legal advice in public finance. As such, he was involved in numerous issues of certificates of indebtedness, paving certificates and sewerage certificates issued by the City, and certificates of indebtedness issued by the Port. Most of these securities were sold to investment buyers on the strength of his opinion alone, but for the larger issues he associated the services of a law firm in Baton Rouge, Benton, Benton & Benton, whose sphere of recognition as bond specialists was broader than his.
"In his petition against these defendants, filed five days after the editorial, McHale alleged that the statement attacked his professional competence, particularly his competence in his specialty legal field of bonds and other public securities; that the publication caused him loss of reputation, respect and integrity, both in his private and in his professional life; and that the publication was made with actual knowledge of its falsity or with reckless disregard of whether or not it was false. He asked for damages.
"Defendants responded with the defense that the statement was true, or substantially so, and, in the alternative, they denied that they were culpably aware of its falsity or in reckless disregard of whether or not it was false.
"The editorial is here reproduced in its entirety. The statement sued on appears at the end of the fifth paragraph.
*559 What's story behind McHale reappointment?
The reappointment of Robert M. McHale as Lake Charles city attorney smells to high heaven. Is it any wonder that the public has lost faith in persons who hold offices of public trust?
We are appalled that Mayor William Boyer, who became the city's chief executive with a reputation for public spirit, could see fit to cram McHale's appointment down the throats of taxpayers.
McHale has lived well at the public trough for over a decade, reaping thousands of dollars in personal wealth from fees he has been paid for bond issues, legal opinions and other assorted fees.
Boyer has promised to make a full accounting of all fees, salaries and expenses paid to McHale by the city over the past 10 years. We expect him to hold to this promise.
We will not be content to rest until we have determined to the penny how much McHale has been paid by the city. It is a matter of public record and the public deserves the full story. The bond fees are totally unnecessary and are a waste of taxpayers' money. No bond buyer would buy a nickel's worth of securities on McHale's opinion.
Boyer's image has been badly tarnished by his cozy relationship with McHale and his stubborn refusal to name someone else city attorney. The city is loaded with legal talent and we will never understand why Boyer is so determined to give the post to a controversial attorney.
McHale is the man, you may recall, who teamed with three other persons with political clout to wring over a million dollars in profits from the state when the group leased the former Sears building on the downtown mall.
As if that wasn't political favoritism at its worst, we now have to listen to Woody Watson, president of the Lake Charles City Council, defend the "sweet deal" lease. Watson, by the way, is a business associate of Boyer's.
McHale was just a good businessman, Watson said, and if the state paid too much rent money, that was the state's problem. Just who does Watson think the state really is? The state is you and me and we don't like to be suckered by anybody.
American Press Editorial
We wonder how much longer the taxpayers will stand for public funds being siphoned off for the benefit of politicians and their cohorts.
McHale has also promised he will give the public the full story of how much he has earned as city attorney. We wonder if his report will include the names of other local citizens who have shared in the tax funds he has received from the city and a list of funds he may have received from others who have performed work for the city.
Meanwhile, the people of Lake Charles are waiting for Boyer and Watson to explain the reasons for their unqualified support of McHale. The voters put both men in office and they have a right to demand what's behind the McHale reappointment. We are waiting impatiently for answers, fellows.
What are you up to now?
*560 "LAW
"McHale was a public official. This case must accordingly be decided on the principles established by New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964). The Louisiana Supreme Court in Kidder v. Anderson, 354 So. 2d 1306, at 1308 (La.1978), states the New York Times standard regulating recovery of damages by a public official claiming defamation:
"A public official may not recover damages for a defamatory statement, even if false, relating to his official conduct `unless he proves that the statement was made with "actual malice"-that is, with knowledge that it was false or with reckless disregard of whether it was false or not'. New York Times Company v. Sullivan, 376 U.S. 254, 279-80, 84 S. Ct. 710, 726, 11 L. Ed. 2d 686 (1964). Moreover the public official plaintiff must meet this burden not merely by a preponderance of the evidence, but with `clear and convincing proof'. Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S. Ct. 2997, 3008, 41 L. Ed. 2d 789 (1974)."
"The United States Supreme Court recently said in Herbert v. Lando, 441 U.S. 135, 99 S. Ct. 1635, at 1645, 60 L. Ed. 2d 115 (1979):
"[I]n the 15 years since New York Times, the doctrine announced by that case, which represented a major development and which was widely perceived as essentially protective of press freedoms, has been repeatedly affirmed as the appropriate First Amendment standard applicable in libel actions brought by public officials and public figures. Curtis Publishing Co. v. Butts [388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094] supra; St. Amant v. Thompson [390 U.S. 727, 88 S. Ct. 1323, 20 L. Ed. 2d 262] supra; Gertz v. Robert Welch, Inc., supra; Time, Inc. v. Firestone, 424 U.S. 448, 96 S. Ct. 958, 47 L. Ed. 2d 154 (1976). At the same time, however, the Court has reiterated its conviction-reflected in the laws of defamation of all of the States-that the individual's interest in his reputation is also a basic concern. Time, Inc. v. Firestone, supra, at 455-457, 96 S. Ct., at 966; Gertz v. Robert Welch, Inc., 418 U.S., at 348-349, 94 S. Ct., at 3011."
"There are no concrete guidelines applicable to specific fact situations by which proof of knowing or reckless falsity can be measured. Reckless disregard will depend for its ultimate definition on the marking out of its outer limits through a case by case adjudication. St. Amant v. Thompson, 390 U.S. 727 at 730, 88 S. Ct. 1323, 20 L. Ed. 2d 262 (1968). `[T]here must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of its publication.' Id., 88 S.Ct., at 1325. Neither negligence nor failure to investigate on the one hand, nor ill will, bias, spite, or prejudice on the other, standing alone, are sufficient to establish either a knowledge of the falsity of, or a reckless disregard of the truth or the falsity of the materials used. But evidence of negligence, of motive and intent, may be adduced for the purpose of establishing by accumulation and by appropriate inferences, the fact of a defendant's recklessness or of his knowledge of falsity. Curtis Publishing Company v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967), Goldwater v. Ginzberg, 414 F.2d 324 (2nd Cir. 1969), cert. denied 396 U.S. 1049, 90 S. Ct. 701, 24 L. Ed. 2d 695 (1970). Herbert v. Lando, supra, discusses at length the range of permissible evidence going to prove knowledge or reckless disregard: `Courts have traditionally admitted any direct or indirect evidence relative to the state of mind of the defendant and necessary to defeat a conditional privilege or enhance damages'. 99 S. Ct., at 1643. Also, `to be liable the alleged defamer of public officials ... must know or have reason to suspect that his publication is false' and the `proof of the necessary state of mind [can] be in the form of objective circumstances from which the ultimate fact [can] be inferred'. 99 S. Ct., at 1641.
"The Court will now proceed to discuss this `state of mind' evidence, remembering as mandated by Kidder v. Anderson, 354 *561 So.2d 1306, at 1308 (La.1978) that state of mind must be judged:
"... not on the basis of an evaluation of sworn testimony at a trial (after full opportunity to rebut accusations) but rather on the basis of information available to the [news personnel] at the time of publication."
"THE EVIDENCE
"The elements of plaintiff's case are (1) publication, (2) defamation, and (3) knowing or reckless falsity.
"The first two elements, publication and defamation, present no difficulty.
"There is no question that the statement was published, that is, actually communicated to others. The American Press is a daily newspaper with wide circulation throughout the southwest area of Louisiana where plaintiff is engaged in the practice of law.
"The defamatory effect of the statement is apparent with equally convincing clarity. No one could dispute this. No witness did. According to the testimony of attorneys, bankers, investment experts, public officials, a clergyman, and others, McHale enjoyed a good reputation generally, and a good reputation specifically in the field of public finance. The statement `No bond buyer would buy a nickel's worth of securities on McHale's opinion' directly attacked and damaged his reputation within his profession. It articulated as a fact a condemnation that portrayed him as a totally incompetent bond attorney.
"What would this sentence in context convey to the ordinary reader? It was inevitable, in my opinion, that the great majority of readers interpreted it exactly for what it said, that McHale's opinion on securities was worthless to any bond buyer. Since he had been identified in the editorial earlier as an attorney who `has lived well at the public trough ... reaping thousands ... in personal wealth from fees he has been paid for bond issues, legal opinions and other assorted fees', I believe the average reader got the impression that not only was he an incompetent attorney, whose opinions on securities were worthless, but that there was also some dishonesty connected with his acceptance of fees for bond issues and legal opinions without having rendered a legal service. The statement was defamatory.
"Most of the evidence in the case focused on the third element, knowing or reckless falsity. Before going into a point by point analysis of the evidence as it bears on conduct and state of mind, it is necessary to briefly discuss the editorial's subject matter and the history of that subject matter.
"A year and a half before this editorial was written, McHale had resigned his post as City Attorney, retaining his job as Port Attorney but otherwise devoting himself full time to his private law practice. In 1974 he had been under considerable fire from the newspaper because of a transaction in which a corporation owned by him and four friends had business dealings with the State of Louisiana. This corporation, Ryan St. Properties, Inc., leased from its owners a building on the downtown mall of Lake Charles formerly occupied by Sears, Roebuck. Knowing that the State was interested in moving its scattered welfare offices to one location, the corporation succeeded in negotiating a lease with the State to house this office in the Sears building. The Press criticized this transaction in a series of some 19 news articles during 1974, on the ground that since the five owners, including McHale, were political figures, political influence was apparent, and also on the ground that the lease rate to the State was excessive. This transaction will hereafter be referred to as the `Sears lease'. It is one of the stated editorial reasons for the Press' opposition to McHale's reappointment, which occurred by appointment of the Mayor and approval of the City Council on July 6, 1977.
"The editorial, it can be seen, sets out two basic reasons for the newspaper's opposition to plaintiff's reappointment: the first, in the language of the editorial itself, was the `fees he has been paid for bond issues, legal opinions and other assorted fees'; the other, his involvement in the Sears lease.
*562 "To prove that the defamers knew or had reason to suspect that the editorial statement was false, plaintiff's evidence focused on conduct and state of mind, and objective circumstances from which the ultimate fact might be inferred. The evidence of knowing or reckless falsity may be grouped into the following categories:
"1. The news articles published earlier about the Sears lease.
2. The publisher's knowledge of exculpatory information (the appraisals) about the Sears lease which he failed to disclose to his editors or the reading public.
3. An American Press reporter's personal interview with McHale one or two days before the editorial was published, and the contents of a related news article published in the same edition of the paper as the editorial on July 21, 1977.
4. The preparation of the editorial and its contents.
5. Numerous prior legal advertisements in the newspaper naming McHale as having rendered the approving legal opinion on a number of offerings of securities.
6. The publisher's personal knowledge based on his membership on the Board of Directors of a local bank, and
7. Other evidence.
"The Court will proceed now to a discussion of these seven categories.
"1. The Sears Lease
"The Sears lease came to light in early 1974. It was exhaustively treated in news articles throughout that year. The difference between the rent paid and the rent obtained suggested a substantial profit. The rent paid was $3,000 a month. The rent from the State called for $17,000 a month. Calculated on a ten year primary term, the square foot rent obtained was $5.50 per year. Among other conditions of this recorded lease, the company bound itself to completely renovate the building in accordance with detailed plans and specifications, pay base rate utilities, and purchase land to provide a parking lot for 200 cars.
"Beginning January 23, 1974 and continuing through August 27, 1974, the American Press published 19 news articles about this lease. Sixteen named McHale and the others. These articles suggested that the State paid too much rent based on the visible disparity between the square foot rental paid by the lessors and what the State paid them. There was also the suggestion of political patronage because the five lessors were supporters of the Governor of Louisiana. The headlines employed words like `sweet deal', `skullduggery', `robbery' and `fraud'.
"Plaintiff offers these articles as the first evidence of state of mind. He says that although they appear as news articles, they clearly reveal the Press' opinion of the Sears lease and its design to impress that opinion on its readers. He urges that this design was achieved by slanting, the deliberate and repetitious use of facts favoring its interpretation of the lease, and the suppression of equally known facts which had they been published, would have given the reader a choice of what to believe.
"The Court has carefully read these 19 news articles. Most of them appear to be somewhat lacking in objectivity. They partake more of the style of an advocate than that of an unprejudiced journalist. One gets the impression that by emphasis, connotation and repetition, the authors were intent on developing a precise theme, that the transaction was fraught with politics and a cheat to the public fisc. At the trial, when asked to explain what hard evidence existed of political manipulation and excessive rent charged to the State, the answers by defense witnesses were uniform: all five lessors were known to be political supporters of the Governor and the lease to the State on its face showed a large profit when compared to the price originally paid by the investors. Beyond that, these witnesses were either unable or unwilling to state facts which reasonable minds would expect to exist to bridge the gap between *563 suspicion of wrongdoing and wrongdoing itself.
"However slanted these news articles may have been, they are First Amendment protected.
"It should also be observed that McHale was not singled out for special treatment in any of these 19 articles. The condemnation of political influence and excessive rent was leveled equally on all five of the participants.
"2. The Appraisals
"Three years later the editorial of July 21, 1977 was published and it said:
"McHale is the man, you may recall, who teamed with three [sic] other persons with political clout to wring over a million dollars in profits from the State when the group leased the former Sears building on the downtown mall.
When this language was penned, W. Hugh Shearman knew something that neither his editors nor the reading public knew. He knew there existed three real estate appraisals which unanimously indicated that the rent was not excessive, but that in fact it was representative of fair market lease value.[2]
"These appraisals came about in the following manner: Back in 1974 these five investors, smarting under the pain of the 19 news articles and wanting to prove that the lease was not unfair to the State, suggested that appraisals be obtained by all interested parties. The evidence convinces the Court that the Governor, the investors, and the Press agreed that each would procure an appraisal. Appraiser Richard Pease of Lake Charles completed one for James Sudduth (one of the investors) on October 28, 1974. Leroy Cobb, an MAI of Baton Rouge, delivered one to the Governor on November 20, 1974. Holley Heard, an appraiser of Lake Charles, completed one for the American Press on January 14, 1975. These were reduced to writing in formal appraisal reports. In each case, the appraiser undertook to evaluate the lease in terms of fair market value as of January, 1974. Each supported the view that the square foot rate paid by the State represented the fair market lease value of the property.
"The proof falls short of establishing that Shearman and the Press agreed to any specific use of the appraisals. Some purpose was envisioned, obviously, otherwise the agreement would have been pointless. It was the testimony of the lessors that they had bound themselves to rewrite the lease to conform to the appraisals, had there been a difference.
"Shearman admitted that shortly after January 14, 1975, he was aware of the contents of all three appraisals. The evidence also shows that he did not make known their existence to any of his editors until one week before the trial of this case. He insisted, at trial, as did the editor who learned about the appraisals one week before the trial, that the appraisals made no difference in their evaluation of the lease.
"There is no evidence, aside from Shearman's personal opinion, that these appraisers' views are anything but correct. Even so, their significance is not so much their accuracy as it is their suppression. Their disclosure, though not enlightening about the possible political connections, would at least have been relevant to whether or not the State paid too much rent money. As it turned out, failure to disclose them left the reading public no choice except to continue believing the version espoused by the Press in its 19 news articles in 1974 and rekindled in the editorial of July 21, 1977.
"The Press' failure to give any credence to these appraisals or even acknowledge them, is offered as evidence that, once having taken a position, it was unwilling to retreat from that position despite evidence to the contrary and that it continued to pursue its preconceived plan to discredit McHale by convincing its readers that the Sears lease was politically obtained and unfair to the taxpayers.
*564 "The Court at this point wishes to emphasize that neither the news coverage of the Sears lease in 1974, nor the language of its repetition in the editorial of July 21, 1977, nor the failure to disclose the appraisals-singly or collectively, rise to the dimension of an actionable defamation. All of this conduct lies safely, and properly, under the protection of the First Amendment. Nor is the Court saying that the lease was good and the Press wrong in its criticism, or that the appraisals were right and the Press wrong in not disclosing them. Who's right and who's wrong is not before the Court for decision. Even if it was, the evidence before the Court is insufficient to make such a determination. What evidence there is, however, suggests that there were in fact two sides to the controversy and that the Press, in 1974 and in 1977, presented only one side.
"This has inferential significance in McHale's proof of actual malice. These factors are weights to put on the scales when the inquiry is whether there was knowing or reckless falsity, because they suggest that the Press had obdurately made up its mind McHale was a bad man and he ought to be exposed and put down.
"3. The Interview
"McHale resigned as City Attorney in January of 1976. He stayed on as attorney for the Harbor and Terminal District. He was reappointed City Attorney on July 6, 1977. Several days before the meeting of the City Council, upon learning his reappointment was on the council agenda, the Press did two things: (1) it dispatched a reporter to McHale's office to find out about the money he had made as City Attorney, and (2) the entire editorial staff was assigned the preparation of the editorial condemning his reappointment.
"The reporter, Bill Shearman, son of the publisher-defendant, met with McHale by appointment on July 19th or 20th and spent an hour in McHale's office discussing salaries, fees, and time spent in representation of the City. There is a dispute about what happened at this interview. McHale and his secretary testified they went over transcripts of proceedings for previous issuances of paving certificates, sewerage certificates, and certificates of indebtedness. They testified they explained the details of one paving transcript page by page, and how the attorney's fee was calculated at three percent of the total paving contract. Included among the contents explained in detail was McHale's legal opinion, a prerequisite to the sale of the bonds. McHale told young Shearman that the transcripts were there for every fee he had earned as City Attorney, and that the fees could be calculated in accordance with that mathematical formula. He invited Shearman to make the calculations for himself; he did not volunteer to do it for him.
"Shearman made notes of this interview and subsequently turned them over to an editor for the Press. According to the young Shearman, these notes and the interview formed the basis for the news article which was published on the same day as the editorial, July 21. This news article contained the statements,
"As City Attorney, McHale gets a commission on bonds the city sells. He said Tuesday that his `normal commission' was three percent."
"Young Shearman at trial could not remember having had a transcript explained to him. His notes were not available, having been destroyed a few months after suit was filed (July 26, 1977). The above quoted news statements, however, support McHale's and his secretary's versions of the disclosures made at the interview.
"The information supplied the young Shearman at this interview, which took place one or two days before the editorial was written, suggests that the Press had actual knowledge that city bonds had sold on the strength of McHale's opinion.
"4. The Editorial
"The four members of the editorial staff individually drafted a proposed editorial. The date on one of them is July 13, 1977, showing that the editorial's preparation covered a period of at least eight days before *565 its publication. It was not `hot' news.[3] These drafts were reviewed by the defendant Shearman, and it was his determination that the final draft include the statement `No bond buyer would buy a nickel's worth of securities on McHale's opinion'.
"These drafts speak often of bonds and McHale's fees, and show that the drafters were aware he was paid fees for bond issues and legal opinions. In particular, the employment of the following language has significant weight in establishing actual knowledge or reckless disregard for the truth as it relates to the value of McHale's bond opinions:
"McHale has lived well at the public trough for over a decade, reaping thousands of dollars in personal wealth from fees he has been paid for bond issues, legal opinions and other assorted fees.
"We will not be content to rest until we have determined to the penny how much McHale has been paid by the city. It is a matter of public record and the public deserves the full story. The bond fees are totally unnecessary and are a waste of taxpayers' money."
"Accusatory language employed elsewhere in the editorial is said to be further evidence of actual malice, like `reappointment... smells to high heaven', `cram McHale's appointment down the throats of taxpayers', `controversial attorney', `The State is you and me and we don't like to be suckered', and `public funds being siphoned off'.
"Shearman perused all four drafts, added the statement to the final draft that McHale's opinion on securities was not worth anything to bond buyers, and sent it on its way for publication.
"5. The Legal Advertisements
"The issue being whether defendant Shearman should be held inferentially knowledgeable of the fact that bond buyers had brought securities on McHale's opinion before this defamatory utterance, the question arises as to whether the Court can accept his denial of knowledge of numerous legal advertisements that had been run in the paper for years, publicizing in express language the sale of securities on McHale's opinion.
"The evidence reveals that there had been 23 securities offered for sale-certificates of indebtedness, paving certificates and sewerage certificates-totalling in excess of $2½ million, between the years 1971 and 1977, all of which sold on McHale's sole opinion. The transcript of a typical paving project was introduced in evidence. It shows that 18 legal advertisements were run a total of 25 times. Three of these expressly identify McHale as the attorney whose approving legal opinion would underwrite the offerings. Since there were 23 of these projects, it can be calculated that between the years 1971 and 1977 the Press ran 575 such legal advertisements, 69 of which showed that the securities were offered on the approving opinion of McHale. Shearman himself signed the affidavit of publication on at least one of these on August 2, 1976.
"In addition, there were several million dollars worth of bonds in the form of certificates of indebtedness of the Port of Lake Charles and sewerage certificates of the City that were sold on the joint opinion of McHale and Benton, Benton & Benton, before July, 1977. All of these were likewise advertised the required number of times in the Press.
"While Shearman denied knowledge of the contents of these advertisements, saying that no one, including himself, ever read them, it is difficult to believe that this could have gone unnoticed for so long a period of time. They were there for six years before the editorial and during the eight days of its preparation. They related directly to the subject matter of the editorial. In First Amendment cases perhaps the less the publisher knows, the better, but *566 this does not mean that the publisher can disclaim knowledge of evidence ready at hand. While failure to investigate, standing alone, is not proof of reckless disregard, failure to investigate coupled with other evidence, is relevant to that inquiry. The Court has no hesitation to consider this as another element in the probable awareness or reckless disregard category.
"6. Shearman's Personal Knowledge Outside of the Newspaper
"The evidence also reveals that one month before the editorial, Shearman was put in touch with McHale's opinion on the sale of a public security in a connection outside the newspaper. On June 20, 1977, McHale wrote President Boyer of Gulf National Bank of Lake Charles advising that there would be an offering of $350,000 in certificates of indebtedness of the City of Lake Charles to fund a portion of the costs of acquisition of property for the City. As a member of the Board of Directors of this bank, and a member of the Loan Committee of that Board, whose function it was to approve large loans by the bank, Shearman was present at a committee meeting on June 24, 1977 when the bank's bid on the $350,000 of certificates of indebtedness was approved. The official bid form reflected that the securities would be offered over the approving legal opinion of McHale. Shearman never denied in his trial testimony that he was aware of this. The president of the bank testified that it was not customary to furnish the bank committee with that kind of detail.
"7. Other Evidence
"The Court does not give any consideration to the testimony that Shearman had vocalized his intent to `get McHale'.
"There was three such pieces of evidence. One was a statement made to a witness by a reporter of the American Press in 1974. That reporter was not employed by the Press at the time of the trial. Although the testimony was admitted under Code of Civil Procedure Article 1634, the Court does not give it any particular weight. The other similar remarks attributed to Shearman were testified to by Mayor William Boyer and Port Director Sudduth as having been said to them. The Court cannot consider the statements as relevant evidence under Kidder v. Anderson, supra, because they were uttered in 1978, a year after the editorial, in connection with a new series of front page news articles attacking McHale which were then being published.
"For the same reason, the Court does not believe that it is authorized to consider the front page news articles critical of McHale that were published in 1978 as `other defamatory publications', guided by Kidder v. Anderson, supra.
"DEFENSES
"Although the word `defenses' heads up this portion of the opinion, the Court is mindful that it is not defendants' burden under New York Times and other relevant decisions to prove the truth of the statement, nor is it defendants' burden to prove, if the statement was false, that it had a sound factual basis for it and that it was not made knowingly or with reckless disregard, but in good faith. However, there was considerable testimony offered at the trial by defendants regarding what Shearman intended to say, his actual beliefs, and the basis for those beliefs. This testimony, along with the rest of the evidence, must be considered in determining whether McHale has ultimately sustained his burden of proof.
"The first defense is that the statement was true. The second is that if it should be found to be technically false, it was not made with knowledge or reckless disregard. The third is that it was the expression of an opinion, not a statement of fact.
"Shearman's belief in the truthfulness of the statement was based on his experience as a member of the Louisiana Board of Commerce and Industry over a period of 10 years between 1966 and 1976. One of the functions of this Board was to approve general obligation and revenue bond issues across the State that were being considered for industrial inducement purposes. The *567 Board conducted hearings to determine the feasibility of the projects the bonds financed. In this experience, he had noticed that there were three law firms in the State who appeared routinely in connection with bond issues before the Board. Shearman testified that he had observed this to be a general practice, that local counsel would involve special counsel on these bonds, and that the special counsel were always the same three law firms in the State. Benton, Benton & Benton was one. McHale's firm was not. This, according to him, gave him the impression first, that bonds would not sell except on the opinion of one of these bond firms and second, that the word `bonds' meant general obligation or revenue bonds issued for industrial inducement purposes. Since large industrial inducement bonds were the limit of his experience, and McHale, although he had appeared before the Board with Benton on one occasion as co-counsel, had never appeared individually, Shearman declared he thought it was true that McHale's opinion would not stand alone. Finally, his impression was that while certificates of indebtedness, paving certificates and sewerage certificates might be securities, they were not bonds in the limited sense in which he intended the word `bonds', and the word `securities' was intended as a synonym only in the narrow sense that he meant the use of the word `bonds'. He deliberately chose the word `securities' in the sentence that he added to the editorial because this was a synonym for `bonds',[4] and it is good journalistic style to avoid too much repetition of the same word which had already been used three times previously in the editorial.
"He declared that this was his state of mind at the time he penned the offending language and that he believed it to be true and still believes it to be true in this light. Even if the statement was technically incorrect, he urged his good faith belief in its truth at the time he uttered it, as well as a factual basis for that belief, regretting only the failure to make it clear that it was McHale's sole opinion that would not be acceptable.
"The Court does not believe this explanation alters the statement's meaning and intent, or the understanding of readers of what was written.
"The meaning intended by the use of the word `bonds' by the writers on the day that the editorial and related news article were published is clear. No securities of the City of Lake Charles ever went before the Board of Commerce and Industry during the defendant Shearman's 10 year tenure, yet the plain language of the editorial-indeed one of its prominent subjects-was McHale's fees for his legal opinions for city bonds as City Attorney. Since Shearman's only contribution was the one sentence, the use of `bonds' theretofore in the editorial was not his choice of language, but that of the editors whose experience and knowledge of the terminology employed was not based on membership on the Board of Commerce and Industry. Also, the young Shearman who looked at a paving transcript in McHale's office before this editorial was written and visually inspected a McHale legal opinion, and two days later used `bonds' in the news article, knew bonds meant paving certificates. Defendant Shearman, having read the drafts of the editorial he helped to write, must have been aware that when reference was made to McHale's bond fees and opinions for the City, this meant what it said.
"Both `bonds' and `securities' were words appropriate in the context. That bonds means securities in the sense of certificates of indebtedness, paving certificates, and sewerage certificates is consistent with customary usage.
"`Securities' is a synonym for `bonds', and vice versa. Defendant's brief correctly states that `securities' can have many different meanings in different contexts. The same is true of `bonds'. The first of many definitions of the term in Black's Law Dictionary, *568 4th Ed.Rev. (1968) is: `a certificate or evidence of debt'.
"According to the testimony of an expert bond attorney, Fred Benton, paving certificates technically are not bonds. The distinction is a technical one only, however, as he further testified that bond attorneys, including himself, and bondbuyers routinely call such certificates bonds.
"At the trial witnesses repeatedly used the words interchangeably.
"One investment underwriter when asked what he called paving certificates said: `We consider them municipal bonds. To a bondbuyer, it's all the same.'[5]
"Interestingly, the official bid form in use by the City of Lake Charles for its paving certificates, routinely published for years in the paper, uses the word `bonds' four times, `certificates' three times, and `issue' once-all meaning the same thing.
"The Court's conclusion is that McHale's opinion had a value on the bond market, that `securities' includes certificates evidencing public debt, whether referring to regular certificates of indebtedness, or paving or sewerage certificates, and that `bonds' are generally understood in investment circles to include all these. The Court is convinced that the newspaper intended to use the words as synonyms, that readers understood the words as intended, and that the statement is incapable of an innocent construction on the facts. It was false throughout.
"Defendant's final argument is that this was an expression of opinion and not a statement of fact. Letter Carriers v. Austin, 418 U.S. 264, 284, 94 S. Ct. 2770, 2781, 41 L. Ed. 2d 745, 761 (1974) says `[B]efore the test of reckless or knowing falsity can be met, there must be a false statement of fact.'
"The grammatical test of whether a statement is an opinion or a fact is not simply how the declarant says he meant it. The better test is how readers understand it. The best test is a reflection of what is an opinion and what is a fact. A fact, says Webster's, is a thing that has actually happened, or is true. It can be checked and agreement on whether or not it is true can easily be reached. An opinion, says Webster's, is what one thinks-a judgment-about some person or thing. No one can prove whether a statement of opinion is true or false. It remains an opinion. Comparatively, a statement of the author's taste of food was found in Mashburn v. Collin, 355 So. 2d 879 (La.1977), to be an opinion. The statement here involved was a statement of fact. Whether any bond buyer would buy securities on McHale's opinion is a statement which can be proved true or false.
"LIABILITY
"The statement was false.
"The Court believes that the evidence with convincing clarity shows that it was made while the writer was surrounded by a multitude of facts and circumstances compelling the inference of knowledge. The Court concludes that actual knowledge has been proved, or at least a reckless disregard for the truth. Defendants were in possession of knowledge so completely at odds with the published statement that only a reckless disregard of the truth can account for its utterance.
"Freedom of expression of public questions and issues was not served by this base and groundless attack on McHale. `Freedom of the press under the First Amendment does not include absolute license to destroy lives and careers' said Chief Justice Warren in his concurrence in Curtis Publishing Co. v. Butts, supra, 87 S. Ct., at 1999.
"DAMAGES
"The American Press has a circulation of 35,000.
"Unquestionably these defamatory words greatly injured McHale's reputation as an attorney, and impaired his standing in the community.
*569 "He has been severely humiliated and embarrassed, and has suffered considerable mental distress.
"The effect on his mental health was confirmed by several doctors, some of whom saw him professionally and others as friends or relatives. There was evidence of personality changes. His personal activities have been reduced and appearances in public curtailed. The mental reaction has required intermittent medical attention and medication.
"Loss of income was alleged but not proved. There was evidence by a preponderance that the defamatory words contributed to his second resignation as City Attorney in January of 1979. Income from bond fees from that source will decrease, but the dollar value of this loss cannot be fixed with reasonable accuracy. He is still the attorney for the Port of Lake Charles. He has not suffered any loss from that source.
"In Kennedy v. Item Co., 213 La. 347, 34 So. 2d 886 (1948), the Louisiana Supreme Court recognized that, due to the difficulty of proving pecuniary damages in a defamation action, the amount of damages is left largely to the discretion of the trier of fact.
"In Gertz v. Robert Welch, Inc., supra, the U. S. Supreme Court stated:
"[A]ctual injury is not limited to out of pocket loss. Indeed, the more customary types of actual harm inflicted by defamatory falsehood include impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering. Of course, ... all awards must be supported by competent evidence concerning the injury, although there need be no evidence which assigns an actual dollar value to the injury." 94 S. Ct., at 3012.
"In arriving at the amount of damages, the Court has been influenced by the decision of the La. Court of Appeal in Kidder v. Anderson, 345 So. 2d 922 (La.App.1 Cir. 1977), reversed on other grounds, 354 So. 2d 1306 ([La.]1978). That Court, in reducing a jury award from $400,000 to $100,000, stated:
"We are persuaded that an award in such amount would have a `chilling effect' upon the legitimate exercise of the rights of freedom of the press and would lead to undesirable self-censorship, the prevention of which has been the object and purpose of the United States Supreme Court since New York Times Company v. Sullivan." 345 So.2d, at 942.
"After a careful consideration of all the evidence in the case, and mindful of the above quoted Kidder language, the Court concludes that an award of $150,000 is appropriate.
"Punitive damages are permissible under La.Civil Code Art. 2315.1A. I would be inclined to grant punitive damages here but for the above quoted expression from the Court of Appeal Kidder case. This is the only Louisiana appellate court I know of that has expressed an opinion on the `chiling effect' of the damage award itself.[6]
"For the reason that plaintiff is himself an attorney, the Court declines to award attorney fees authorized by Civ.Code Art. 2315.1A."
In his appeal, plaintiff seeks punitive damages and attorney's fees under LSA-C.C. Article 2315.1A, which was in effect at the time of the defamation at issue here, but was repealed by Act 324 of 1980. Article 2315.1A reads as follows:
"In addition to general and special damages, the plaintiff who obtains a judgment because of having been defamed, libeled, or slandered may be awarded punitive damages and reasonable attorneys fees, if it is proved that the defamatory, libelous, or slanderous statement on which the action is based was made with knowledge of its falsity or with reckless disregard of whether it was false or not."
*570 PUNITIVE DAMAGES
The trial court declined to impose punitive damages against defendants, although he had the discretion to do so under Article 2315.1A. Punitive damages have been imposed in some 19th century defamation cases, but following Vincent v. Morgans Louisiana & Texas Railroad and Steamship Company, 48 La.Ann. 933, 74 So. 541 (1912), Louisiana jurisprudence has consistently held that punitive damages are not recoverable at civil law. 37 La.L.Rev. 113. This was legislatively changed in 1976 by the enactment of Civil Code Article 2315.1. Despite the legislative change, no reported Louisiana case has awarded punitive damages in a defamation case.
Civil Code Article 2315.1A incorporates the U. S. Supreme Court test of Gertz v. Welch, 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974), which held that states may permit a recovery of punitive damages in defamation cases when liability is based on a showing of knowledge of falsity or reckless disregard for the truth. Thus, after Gertz, states were free to enact statutes allowing punitive damages where there is a showing of actual malice as defined by New York Times v. Sullivan. Absent actual malice, only compensatory damages may be awarded.
Other jurisdictions have allowed punitive damages in addition to compensatory damages. Most notable is Curtis Publishing Company v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1964) in which the Supreme Court approved an award of $400,000 in punitive damages. The courts have generally left the amount of punitive damages to the discretion of the jury. Goldwater v. Ginzberg, 414 F.2d 324 (2d Cir. 1969) and Reynolds v. Pegler, 223 F.2d 429 (2d Cir. 1955). Other jurisdictions have expressed concern over an award of punitive damages despite its sanction in Gertz v. Welch. This concern is illustrated in Sprouse v. Clay Communication, Inc., 211 S.E.2d 684 (W.Va.1975), where the Supreme Court of West Virginia stated:
"It would appear that the penumbra of protection of the First Amendment is such that punitive damages may only be recovered in cases where the award of actual damage is insufficient to dissuade others in like circumstances from committing similar acts in the future. The policy embodied in the First Amendment of encouraging broad dissemination of public information forecloses an award of punitive damages which jeopardize the existence of a newspaper when such damages are unnecessary to protect the public from similar conduct in the future or to make possible the vindication of plaintiff's rights in the absence of demonstrable actual damages. An award of $750,000 would have a chilling effect upon the legitimate exercise of First Amendment rights and would lead to the type of self-censorship which has been the object and purpose of the United States Supreme Court to prevent since New York Times v. Sullivan."
In view of the substantial award for actual damages in the present case, an additional award of punitive damages may well have a chilling effect, as noted by the trial court in its written opinion. We find no manifest error in this conclusion.
ATTORNEY'S FEES
LSA-C.C. Article 2315.1A provides that reasonable attorney's fees "may be awarded" where the defamatory statement was made with knowledge of its falsity or with reckless disregard of whether it was false or not. The article makes the award of attorney's fees discretionary with the trial court. Thus, in the present case the trial judge had the discretion to award reasonable attorney's fees or not.
In his written reasons quoted above, the trial judge stated that he declined to award attorney's fees for the reason that the plaintiff is himself is an attorney. We do not agree that this is a valid reason to deny attorney's fees under statutes permitting such awards.
We find two Louisiana cases holding that an attorney who represents himself cannot recover attorney's fees. See Westenberger *571 v. Bernard, 160 So. 2d 312 (La.App. 4th Cir. 1964), which cites Ealer v. McAllister & Company, 19 La.Ann. 21. Plaintiff cites two Texas cases which allowed an attorney-plaintiff, who did not represent himself, to recover attorney's fees upon successful completion of his suit. Youngblood v. Wilson & Cureton, 321 S.W.2d 887 (Tex.Civ. App.1959) and Urschel v. Crow, 314 S.W.2d 423 (Tex.Civ.App.1958). 20 Am.Jur.2d Sec. 77 indicates cases from other jurisdictions are divided on the issue of whether an attorney-plaintiff who represents himself can claim attorney's fees. However, we find no authority in Louisiana or any other jurisdiction for a rule that an attorney who employs another attorney to represent him cannot claim attorney's fees if he is successful in his suit, and if such fees are authorized by statute.
In the present case, plaintiff contracted with three other attorneys to represent him. He agreed to pay one of these attorneys a contingent fee of 30% of the award of damages. This agreement is a factor to be considered but is not binding on the courts. A reading of the record shows the attorneys employed are highly skilled and experienced. The amount of pretrial work is extensive. The trial took four days. The record on appeal includes 17 volumes containing 2,586 pages. The attorneys were successful in obtaining a judgment for compensatory damages in the sum of $150,000. We conclude plaintiff is entitled to an award of $25,000 for attorneys' fees.
For the reasons assigned, the judgment appealed is amended to increase the award by the sum of $25,000, representing reasonable attorneys' fees under LSA-C.C. Article 2315.1A. Otherwise, the judgment is affirmed. All costs of this appeal are assessed against the defendant-appellant.
AFFIRMED, AS AMENDED.
NOTES
[1] A third defendant, Thomas B. Shearman, was dismissed by the Court at the conclusion of plaintiff's evidence, as having no tort relationship to the case.
[2] One of these appraisers, Leroy Cobb, writing on November 20, 1974, said `if inflation continues at its present rate, this will be a very poor lease for the lessors at the end of the fifth year.' (McHale Exhibit No. 11).
[3] Curtis Publishing Company v. Butts, 388 U.S. 130, 157, 875 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967).
[4] Roget's Thesaurus was introduced to establish the synonymity of the words. Shearman did not testify he consulted this authority while writing, but he did say he then thought the words were the same.
[5] Lee Murphy deposition, p. 27 (McHale Exhibit No. 7).
[6] At least two cases outside this state show a concern for First Amendment implications of libel awards: Sprouse v. Clay Communication, Inc., 211 S.E.2d 674, at 692 (W.Va.1975), cert. denied, [423 U.S. 882] 96 S. Ct. 145 [46 L. Ed. 2d 107] (1975), and Airlie Foundation Inc. v. Evening Star Newspaper Co., 337 F. Supp. 421 (D.D.C.1972). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2410457/ | 704 S.W.2d 36 (1985)
Amelia ALVARADO, Appellant,
v.
The STATE of Texas, Appellee.
No. 61666.
Court of Criminal Appeals of Texas, En Banc.
December 4, 1985.
Rehearing Denied February 26, 1986.
William E. Sterling, Jr., Cedar Park, for appellant.
Edward J. Walsh, Dist. Atty., Edgar A. Nooning, III, Asst. Dist. Atty., Georgetown, and Robert Huttash, State's Atty., Austin, for the State.
Before the court en banc.
OPINION ON APPELLANT'S MOTION FOR REHEARING
CLINTON, Judge.
On original submission of this cause, a panel composed of two judges rejected eight contentions advanced by appellant *37 and affirmed the judgment of conviction in an unpublished opinion, 653 S.W.2d 822. Among appellant's grounds of error was the complaint that the trial court erred in refusing four specially requested instructions offered by appellant for inclusion in definitional portions of the court's charge to the jury.
Specifically, in this injury to a child case,[1] appellant argued the focus of the pertinent culpable mental states in the statute, is on the "result of conduct," here, "serious bodily injury."[2] She accordingly requested that the trial court limit the definitions of the culpable mental states to that which relates in each to the "result" of the offense as follows:
"A person acts intentionally, or with intent, with respect to a result of his conduct when it is his conscious objective or desire to cause the result."
"A person acts knowingly, or with knowledge, with respect to a result of his conduct when he is aware that his conduct is reasonably certain to cause the result."
The trial judge denied these charges because they "lack everything that is in the definition in the Code," and instead charged the jury in the entire language of §§ 6.03(a) and (b).[3]
In his final argument to the jury, defense counsel stressed the fact that in order to find his client guilty of Count I the jury must find it was her conscious objective or desire to cause serious bodily injury to the child or that she was aware that putting the child in the water was reasonably certain to cause serious bodily injury to the child.[4] In response, the district attorney pointed out to the jury that what defense counsel had said was a misstatement of the court's charge; he urged the jury to read the charge and observed that a finding that appellant had engaged in the conduct of putting the child in "hot water" knowingly or intentionally was sufficient for a conviction.
On appeal, the two judge panel cited Branch's Texas Annotated Penal Statutes, § 22.04 at 195 (3rd ed. 1974) as recommending the charge given; the panel asserted that the language of § 22.04, supra, (which includes the phrase "engages in conduct,") "clearly focuses on the conduct and the result of that conduct" [emphasis original]. However, without addressing the contention that the court's charge allowed conviction if appellant had requisite culpability as to either the result or the conduct alone, the panel overruled Beggs v. State, 597 S.W.2d 375 (Tex.Cr.App.1980) [hereinafter Beggs ], and perforce, appellant's ground of error.
*38 Appellant was granted leave to file a motion for rehearing in order for the en banc Court to consider the propriety of overruling Beggs.
I.
In Beggs the Court held:
"... [N]otwithstanding the phrase `engages in conduct that,' Section 22.04 is focused on the result of the suspect's conduct. This is important because it determines the definitions of the culpable mental states, which in turn affect the defense of mistake of fact.
* * * Because injury to a child focuses on the result of the suspect's conduct, the allegation in the indictment that the appellant did `[1] intentionally and [2] knowingly engage in conduct that caused serious bodily injury' was an allegation (1) that it was her conscious objective or desire to cause serious bodily injury and (2) that she was aware that her conduct was reasonably certain to cause serious bodily injury."
597 S.W.2d at 377.
In reaching this conclusion we observed in Beggs that § 22.04 has a different legislative history than the other assaultive offenses contained in Chapter 22, which accounts for the vestigial phrase "engages in conduct that" in the former. See generally Phillips v. State, 588 S.W.2d 378 (Tex.Cr.App.1979) (Opinion Dissenting). We acknowledged that the significance of § 22.04 is that it creates a stiffer penalty if the victim of an assault is a child and reasoned that it would not make sense "to conclude that, by retaining the phrase `engages in conduct,' the Legislature intended to focus the statute on the nature of a suspect's conduct rather than on the harm which the statute seeks to prevent." 597 S.W.2d at 377.
The panel on original submission in no way assailed this reasoning.
The concurring opinion in Lugo-Lugo v. State, 650 S.W.2d 72 (Tex.Cr.App.1983) recognized that the 1974 Penal Code's scheme for allocating culpable mental states would be revealed by a reading of Chapter 6 as a whole. That chapter clearly distinguishes three types of "conduct elements" to which culpable mental states apply: "the nature of conduct," "the circumstances surrounding the conduct" and "the result of conduct." Graham v. State, 657 S.W.2d 99 (Tex.Cr.App.1983); Lugo-Lugo, supra; Beggs.
In addition to culpable mental states, Chapter 6 provides:
"(a) A person commits an offense only if he voluntarily engages in conduct, including an act, an omission, or possession."
V.T.C.A. Penal Code, § 6.01.
The significance of this provision in the context of Chapter 6 is that it distinguishes culpable mental states from the requirement of voluntary conduct, a distinction which was often blurred or lost under the 1925 Penal Code. See generally Williams v. State, 630 S.W.2d 640 (Tex.Cr.App.1982). An additional significance of § 6.01 in the instant case is that it superimposes an "engage in conduct" requirement onto every offense; this, however, is relevant to the voluntariness of acts or omissions, and not the subject of a culpable mental state. Accordingly, we hold the "engage in conduct" phrase contained in § 22.04 is merely an expression of the voluntary act requirement of § 6.01(a) and will be so treated.
Furthermore, all the culpable mental states do not apply to all possible "elements of conduct." Section 22.04 provides an offense is committed if a person intentionally, knowingly, recklessly or with criminal negligence causes injury to a child, but, as was acknowledged in Lugo-Lugo, supra, at 87, "[a] person cannot be reckless or negligent with respect to the `nature of conduct.'" See §§ 6.03(c) and (d).[5] The only "element of conduct" which *39 can be the object of all four of the culpable mental states is, "result of conduct." See §§ 6.03(a), (b), (c) and (d). Indeed, experience teaches that when all four culpable mental states have been prescribed by the Legislature in defining an offense, it is a strong indication that the offense is a "specific result" type of crime.
Finally, it is usually a simple matter to look at a penal proscription and determine whether the Legislature intended to punish "specified conduct" as opposed to a "specified result." For example, before 1983 amendments, V.T.C.A. Penal Code, § 21.02(a) prohibited a person from "having sexual intercourse with a female" when certain "circumstances surrounding" the intercourse were extant.[6] By specifying the "nature of the conduct" prohibited (having sexual intercourse) the Legislature indicated rape is a "nature of conduct" crime and the required culpability must go to that element of conduct.
By contrast, the injury to a child statute, like the homicide and other assaultive proscriptions, does not specify the "nature of conduct." Clearly then, the "nature of conduct" in these offenses is inconsequential (so long as it includes a voluntary act) to commission of the crimes. What matters is that the conduct (whatever it may be) is done with the required culpability to effect the result the Legislature has specified.
In sum, we have found nothing in legislative history, the penal code as a whole and particularly Chapter 6, nor in the public policy behind proscribing assaultive offenses, which would indicate anything other than that Beggs was correctly decided; the panel erred in overruling it and we adhere to it today.
II.
The instructions appellant requested the trial court to give the jury in the instant case are practically mirror images of what the Beggs Court found are correct statements. See ante at p. 37. It is therefore apparent the trial judge erred in refusing them.
On original submission the panel stated that even if the trial court erred in refusing appellant's request, no harm was apparent because appellant made "what amounted to a confession on the witness stand." The panel then cited other evidence, presumably from which the jury could have inferred scienter on the part of appellant.
Our reading of the record, however, discloses the appellant steadfastly denied through the trial that she knew the water was hot enough to cause burning as serious bodily injury is defined, even though she admitted she was angry at the child for resisting his bath and refusing to disrobe, and placed him, fully clothed, into the water, without first testing it. In other words, the issue of appellant's mental culpability was contested.
But the court's charge permitted the jury to convict appellant if they found she knowingly *40 or intentionally placed the child in "a tub of hot water," without requiring a finding that she intended or knew serious bodily injury would result.[7]
No matter how incredible appellant's defense may have appeared to the panel, the accused was entitled to have the jury properly instructed on all matters affecting that defense. And in view of her specially requested instructions, the trial court's failure to limit its charge on the applicable culpable mental states to those appropriate to this case, constituted reversible error.
Accordingly, this cause is reversed and remanded to the trial court.
ONION, P.J., and W.C. DAVIS and McCORMICK, JJ., dissent.
NOTES
[1] At the time appellant was alleged to have committed the offense, V.T.C.A. Penal Code, § 22.04 proscribed it as follows in relevant part:
"(a) A person commits an offense if he intentionally, knowingly, recklessly or with criminal negligence engages in conduct that causes serious bodily injury, serious physical... deficiency ... to a child who is 14 years of age or younger."
(All emphasis is supplied throughout by the writer of this opinion unless otherwise indicated.)
[2] Appellant was charged in two counts, the first of which alleged she "intentionally and knowingly... caused serious bodily injury [to the child] by ... placing [him] in a tub of hot water."
The second count alleged appellant "recklessly and with criminal negligence ... caused serious bodily injury and serious physical deficiency to [the child] by ... omitting to provide medical attention for [the child]...."
Since the jury found appellant guilty of the first count, no verdict was returned on the second count. Accordingly, our discussion will hereafter be limited to matters affecting the count on which appellant was convicted.
[3] "A person acts intentionally, or with intent, with respect to the nature of her conduct or to a result of her conduct when it is her conscious objective or desire to engage in the conduct or cause the result."
"A person acts knowingly, or with knowledge, with respect to the nature of her conduct or to circumstances surrounding her conduct when she is aware of her conduct or that the circumstances exist. A person acts knowingly, or with knowledge, with respect to a result of her conduct when she is aware that her conduct is reasonably certain to cause the result."
[4] Appellant raised the defense of mistake of fact, claiming she was not aware the bath water was so hot it would severely injure the child.
[5] Thus, under the rationale of the panelthat the pertinent culpable mental state goes to the "nature of conduct"neither "recklessly" or "with criminal negligence" could be utilized.
In Graham, supra, a contention advanced was similar to the holding of the panel here. There, the appellants contended the evidence failed to show their conduct was a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the actor's standpoint in a criminally negligent homicide case.
We observed that V.T.C.A. Penal Code, § 19.07(a) contains neither "circumstances surrounding conduct," nor a specified "nature of conduct."
"Therefore, the `required culpability' of the statute goesconsonant with all homicidesto the `required result:' death of an individual.
Conceptualized in this fashion, the burden of proof on the State was to show that appellants ought to have been aware of a substantial and unjustifiable risk that death of an individual would occur as a result of their conduct; that the failure to perceive the risk of a resulting death was a gross deviation from the standard of care that an ordinary person would exercise under all circumstances as viewed from appellants' standpoint.
In short, it is the `failure to perceive' the risk of a resulting death which must rise to the level of a `gross deviation' from an ordinary standard of care." [Emphasis original]
657 S.W.2d at 101. The defect in the argument rejected in Graham, supra, is also present in the rationale of the panel in the instant case.
[6] Those circumstances are, of course, that the female is not the actor's wife and the female has not consented.
[7] The prosecutor's argument certainly compounded this error. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1847540/ | 775 N.W.2d 256 (2009)
WOLFE
v.
GRAMS.
No. 2009AP0870-W.
Supreme Court of Wisconsin.
July 16, 2009.
Petition for Review Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3354734/ | [EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION RE: MOTION TO DISMISS
Suisman, Shapiro, Wool, Brennan Gray for plaintiff.
Faulkner Boyce for defendant.
By complaint dated March 8, 1994, the plaintiff, NFS-Radiation Protection Systems, Inc. ("NFS-R"), brought an action against the defendant, Dan A. Preston, for damages arising out an alleged breach of an employment contract. The following facts are alleged.
Ecotek, Inc. ("Ecotek") is the parent corporation of NFS-R. On or about April 10, 1992, the defendant entered into an employment agreement with Ecotek, in which the parties agreed that said agreement was binding upon Ecotek's successors and assigns. The defendant was aware that under the terms said agreement, he CT Page 6859 had access to Ecotek's confidential and proprietary data; thus, the defendant agreed that because he held a position of trust and confidence in Ecotek, Ecotek would be entitled to protect its interest through, inter alia, specific performance and injunctive relief.
On or about August 10, 1993, said agreement was assigned to NFS-R. On or about August 24, 1993, the defendant began working for NFS-R. On or about November 19, 1993 and December 8, 1993, the defendant acted in direct contravention of said employment agreement. On or about December 14, 1993, the defendant's contract for employment was terminated.
Count one contains allegations that the defendant breached his employment contract. Count two contains allegations that the defendant's actions were in violation of the Uniform Trade Secrets Act, General Statutes § 35-50, et seq. Count three contains allegations that the defendant's actions were in violation of the Connecticut Unfair Trade Practices Act, General Statutes § 41-110b,et seq. Count four contains allegations that the defendant's actions constituted a breach of his implied obligation of good faith and fair dealing to the plaintiff. The plaintiff seeks money damages, costs, interest, injunctive relief, attorney's fees, punitive damages, orders protecting the plaintiff's trade secrets, and any other appropriate relief.
On April 22, 1994, the defendant filed a motion to dismiss the plaintiff's complaint based upon the prior pending action doctrine. In his supporting memorandum of law, the defendant argues that dismissal of the plaintiff's present action is appropriate because of a previously filed Tennessee action between NFS-R against the defendant, dated December 30, 1993. The defendant alternatively seeks to stay the plaintiff's action pending resolution of the prior action. On May 12, 1994, the plaintiff filed an objection to the defendant's motion to dismiss accompanied by a supporting memorandum of law.
"A motion to dismiss `properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court.'" (Citation omitted.) Gurliacci v. Mayer, 218 Conn. 531,544, 590 A.2d 914 (1991). "[J]urisdiction is the power in a court to hear and determine the cause of action presented to it." (Citations omitted.) Chrysler Credit Corporation v. FairfieldChrysler-Plymouth, Inc., 180 Conn. 223, 229, 429 A.2d 478
(1980). Although the prior pending action doctrine does not truly CT Page 6860 implicate the subject matter jurisdiction of a court; Halpern v.Board of Education, 196 Conn. 647, 652 n. 4, 495 A.2d 264
(1985); "`[i]t has long been the rule that when two separate lawsuits are virtually alike" the second action is amenable to dismissal by the court.'" (Citations omitted.) H.C. Tedford Associatesv. 1718 Boston Post Road Limited Partnership, 8 Conn. Super. Ct. 250,251 (January 14, 1993, Curran, J.), citing Beaudoin v. Town OilCo., 207 Conn. 575, 583, 542 A.2d 1124 (1988).
In support of his prior pending action doctrine argument, the defendant relies upon a Tennessee action filed by the plaintiff against the defendant. See Nuclear Fuel Services, Inc. v. Preston, Civil Action No. 5675. The defendant argues for dismissal of the present action because of the identical facts in both actions and because there are common issues pending in Tennessee. In opposition, the plaintiff argues that the prior pending action doctrine has no application to the present case because the two cases involve different parties and different issues.
The pendency of a prior suit of the same character, between the same parties, brought to obtain the same end or object, is, at common law, good cause for abatement. It is so, because there cannot be any reason or necessity for bringing the second, and, therefore, it must be oppressive and vexatious. This is a rule of justice and equity, generally applicable, and always, where the two suits are virtually alike, and in the same jurisdiction.
(Internal quotation marks omitted.) Department of Utilities v.Carothers, 28 Conn. App. 674, 679, 613 A.2d 316 (1992), quotingHalpern v. Board of Education, supra, 652-53. A trial court "must examine the pleadings to ascertain whether the actions are `virtually alike.'" (Citation omitted.) Halpern v. Board of Education, supra, 653.
The rule that the pendency of a prior action between the same parties and to the same ends is grounds for dismissal has efficacy only where the actions are pending in the same jurisdiction. The pendency of an action in one state is not a ground for abatement of a later action in another state. Schaefer v. O.K Tool Co., Inc., 110 Conn. 528, 535, 148 A. 330 (1930); 1 Stephenson, Conn. Civ. Proc. 104(a).
Sauter v. Sauter, 4 Conn. App. 581, 584, 495 A.2d 1116 (1985). CT Page 6861
Because the pendency of an action in Tennessee is not a ground for dismissal of a later action in Connecticut, "[i]t is not necessary to resolve this claim by a comparison of the two cases."Babouder v. Abdennur, 41 Conn. Super. Ct. 258, 263, 566 A.2d 457
(1989, Fuller, J.). The defendant's motion to dismiss the plaintiff's complaint is denied.
The defendant alternatively argues that this court stay the plaintiff's action pending the resolution of the Tennessee action. The plaintiff argues that because both cases involve neither the same parties nor the same issues, the court need not stay the present action.
"[W]here an action is pending in one state, the court of another state in which another action, involving the same parties and subject matter, is brought, may grant a stay of proceedings in the latter action. . . ." Sauter v. Sauter, supra, 585, quoting 1 C.J.S., Actions § 133, p. 1410. "[S]uch a stay is not a matter of right and is not required, but rests within the discretion of the court in the exercise of which it must see that injustice is not done. . . ." Id.
The plaintiff argues that the two actions do not involve the same parties. In support thereof, the plaintiff submits an affidavit of Donald B. Pratt, controller of NFS-R, in which Pratt attests that NFS-R "is not a party to the action currently pending in the Federal District Court in Tennessee. . . ." Pratt further attests that the plaintiff in the Tennessee action "is a separate and distinct corporate entity from [NFS-R]." Such a statement is further supported by the pleadings filed in the two actions: the present action contains allegations that Ecotek is the parent corporation of the plaintiff while the Tennessee action contains allegations that Ecotek is a subsidiary corporation of the plaintiff.
The court finds that the two actions do not involve the same parties, the plaintiff's present action need not be stayed pending resolution of the Tennessee action. The defendant's request to stay the plaintiff's present action is denied.
AUSTIN, JUDGE CT Page 6862 | 01-03-2023 | 07-05-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1328665/ | 548 S.E.2d 745 (2001)
Audrey Joyner GIBSON, Plaintiff,
v.
Idael MENA and Carreta Transport, Inc., Defendants.
No. COA00-143.
Court of Appeals of North Carolina.
June 5, 2001.
George M. Anderson, G. Henry Temple, Jr. and Stephen W. Petersen, Raleigh, for plaintiff-appellant.
Anderson, Johnson, Lawrence, Butler & Bock, L.L.P., by Steven C. Lawrence, Fayetteville, for defendant-appellees.
JOHN, Judge.
Plaintiff Audrey Joyner Gibson appeals the trial court's 29 September, 1999 order (the Order) setting aside a default judgment entered *746 against defendants Idael Mena and Carreta Transport, Inc. (collectively "defendants"; individually Mena and Carreta) in favor of plaintiff. We reverse the trial court.
The instant action was instituted by complaint filed 18 November 1997. Plaintiff alleged defendants' negligence arising out of an automobile collision occurring 25 July 1996 on Interstate Highway 95 in Robeson County. Service upon defendants, out-of-state individuals or entities, was effected through the North Carolina Department of Motor vehicles pursuant to N.C.G.S. § 1-105 (1999). Specifically, copies of the summons and complaint were personally served upon Janice Faulkner, North Carolina Commissioner of Motor Vehicles (the Commissioner), who, through her agent, mailed notice of summons and complaint along with copies thereof to each defendant on 2 December 1997. The set of documents for Mena were mailed to an address in Syracuse, New York, but were returned to the Commissioner undelivered. Carreta's documents were directed to the care of Orlando Silva, statutory service agent, as well as to the "President of Carreta Transport, Inc." The documents sent to Carreta's president were delivered and received 5 December 1997. In addition, Notice of Service of Process by Publication on defendants appeared in The Robesonian, a newspaper published in Robeson County, on 14, 21 and 28 December, 1998. Defendants neither filed answer, nor requested an extension of time in which to answer, nor otherwise plead in response to the complaint.
On 5 April 1999, plaintiff moved for entry of default and default judgment, and notice of hearing of the motions was mailed to Mena and Carreta on 25 and 26 March 1999 respectively. Following an 8 April 1999 entry of default, the trial court entered default judgment (the Judgment) against defendants on 3 May 1999 in the amount of $950,000.00 plus costs and interest.
Defendants thereafter filed a 29 July 1999 motion (defendants' motion) to set aside the Judgment on grounds defendants had acted with excusable neglect. However, defendants sought to contest only the issue of compensatory damages.
Attached to defendants' motion were affidavits from Evelio Prieto (Prieto), owner of Carreta, Michaele J. Grove (Grove), senior claims supervisor for John Deere Transportation Services (John Deere), defendants' insurance carrier, and Anthony Thomas Foley (Foley), a certified adjuster retained by John Deere.
Inter alia, defendants' motion asserted as follows:
9. That neither the Defendants nor John Deere was aware of the Motion for Default Judgment (see attached Affidavits of Foley and Grove and supplementary Affidavit of Evelio Prieto);
...
12. That the failure of Defendants and John Deere to retain defense counsel upon the filing and service of this action based on John Deere's desire to first evaluate the case to determine if it could be settled prior to proceeding with litigation, constituted excusable neglect[.]
After a hearing, both plaintiff and defendants submitted proposed orders to the trial court. Plaintiff's submission, entitled "Plaintiff's Proposed Findings of Fact and Conclusions of Law," included findings of fact. Subsequently, the trial court entered the Order, stating
the failure of Defendants to file answer or otherwise plead or appear in this action was due to excusable neglect, and good cause exist [sic.] for setting aside the default judgment[.]
The Order included no supporting findings of fact. Plaintiff appeals.
Initially, we note the appealed Order set aside the Judgment and that orders setting aside default judgments are interlocutory and ordinarily not appealable. Bailey v. Gooding, 301 N.C. 205, 208-09, 270 S.E.2d 431, 433 (1980). Notwithstanding, we elect in our discretion to treat plaintiff's purported appeal as a petition for certiorari pursuant to North Carolina Rule of Appellate Procedure 21, and to grant the writ and address the merits. See N.C.G.S. § 7A-32(c) (1999) (Court of Appeals has jurisdiction to issue writ of certiorari "in aid of its own jurisdiction"); N.C.R.App. P. 21(a)(1) ("writ of certiorari *747 may be issued in appropriate circumstances by either appellate court to permit review of ... orders of trial tribunals when... no right of appeal from an interlocutory order exists"); and Munn v. Munn, 112 N.C.App. 151, 154, 435 S.E.2d 74, 76 (1993) (it is "within [the] prerogative" of this Court to treat an "appeal as a petition for writ of certiorari and grant the writ").
Plaintiff first contends the trial court erred by failing to set out findings of fact in the Order. Plaintiff also maintains the trial court abused its discretion in setting aside the Judgment because the evidence was insufficient to support the court's ruling. We consider plaintiff's arguments ad seriatim.
N.C.G.S. § 1A-1, Rule 60(b) (1999) allows a party, on motion to the trial court, to seek relief from a final judgment on the grounds of mistake, inadvertence, surprise or excusable neglect. A Rule 60(b) motion is addressed to the sound discretion of the trial court and its ruling will not be disturbed absent an abuse of that discretion. Vuncannon v. Vuncannon, 82 N.C.App. 255, 258, 346 S.E.2d 274, 276 (1986). Rendition of findings of fact is not required of the trial court in ruling upon a Rule 60(b) motion absent the request of a party, "although it is the better practice to do so." Grant v. Cox, 106 N.C.App. 122, 125, 415 S.E.2d 378, 380 (1992); see also N.C.G.S. § 1A-1, Rule 52(a)(2) (1999).
In the case sub judice, the trial court entered no findings of fact upon which to base its legal conclusion of excusable neglect. Plaintiff asserts its proposed order contained a request for findings of fact as follows:
Plaintiff, Audrey Joyner Gibson, respectfully submits to the Court pursuant to Rule 52 of the North Carolina Rules of Civil Procedure and hereby moves that Findings of fact and Conclusions of Law be included in its Order on Defendants' Motion to Set Aside Judgment heard by Honorable Robert F. Floyd, Jr., on August 16, 1999, as follows:
....
Subsequently, twenty-three findings of fact and nine conclusions of law were delineated. [Petition for Writ of Certiorari].
Although plaintiff's proposed order arguably might be construed, as she contends, as a generalized Rule 52 request for findings of fact in support of the court's subsequent Order as opposed to requested specific findings, we are unable to resolve this question conclusively in plaintiff's favor. The Order therefore is not subject to being vacated due to the absence of findings of fact.
However, a Rule 60(b) order without findings of fact must be reversed unless there is evidence in the record sustaining findings which the trial court could have made to support such order. See Grant, 106 N.C.App. at 125, 415 S.E.2d at 380 (where trial court renders no findings of fact in order denying Rule 60(b) motion, "the question on appeal is `whether, on the evidence before it, the court could have made findings of fact sufficient to support its legal conclusion' " (citation omitted)).
In short, the issue before us is whether, given the evidence presented to the trial court, that court could have made findings of fact sufficient to support its legal conclusion that excusable neglect had been shown. See id.
While there is no clear dividing line as to what falls within the confines of excusable neglect as grounds for the setting aside of a judgment, what constitutes excusable neglect depends upon what, under all the surrounding circumstances, may be reasonably expected of a party in paying proper attention to his case. Excusable neglect must have occurred at or before entry of judgment and must be the cause of the default judgment being entered.
Thomas M. McInnis & Assoc., Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554-55 (1986) (citations omitted).
In materials presented to the trial court, defendants explained the failure to retain counsel as being based upon their insurance carrier's "desire to first evaluate the case to determine if it could be settled prior to proceeding with litigation[.]" In his affidavit dated 30 July 1999, for example, Prieto stated,
[a]lthough I was aware of the lawsuit prior to April of 1999, I assumed that my company's *748 insurance carrier, John Deere Transportation Services, was handling this matter.
....
[p]rior to several weeks ago, I have never received nor been made aware of any Motions for Default or Default Judgments being entered against my company.
Grove's affidavit related that, in his capacity as senior claims adjuster for John Deere, he became aware of the 1996 accident within one week thereafter, that he assigned the case to an adjuster who attempted to resolve plaintiff's bodily injury claim, and that the adjuster could not obtain all pertinent medical bills and records and closed plaintiff's file in January, 1997. Grove stated he had notified plaintiff's attorney that John Deere would like to settle plaintiff's claim. Grove also expressed his April, 1998 understanding that entry of default had been directed against defendants as to liability only, but that no default judgment had been entered.
Foley submitted an affidavit stating John Deere had accepted liability for the collision involving plaintiff and had authorized him to attempt to settle all viable claims. After plaintiff had resolved her daughter's claim and the property damage claim, Foley continued, he requested plaintiff's medical bills in January, 1997. When Foley received no response from plaintiff, he closed her file in April, 1997.
Upon careful review, we hold the foregoing evidence before the trial court was insufficient as a matter of law to show excusable neglect. Defendant Carreta was aware of the pending litigation prior to the Judgment, and John Deere, Carreta's insurance carrier, knew in April, 1998, that entry of default had been rendered against Carreta, yet failed to give defense of the lawsuit that attention usually given to important business in the exercise of ordinary prudence. See Financial Corp. v. Mann, 36 N.C.App. 346, 350, 243 S.E.2d 904, 907 (1978) (no excusable neglect where "defendant simply did not give to his defense the attention which a man of ordinary prudence usually gives his important business"). Further, the record is devoid of any evidence excusing defendant Mena.
In sum, the trial court abused its discretion in allowing defendants' motion for relief from default judgment, and the Order setting aside the Judgment is therefore reversed. See id. ("[b]ecause defendant presented insufficient evidence to support the trial court's conclusion of excusable neglect, the order setting aside the judgment" must be reversed).
Reversed.
Judges WYNN and McGEE concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1358467/ | 521 P.2d 434 (1974)
Robert BASSETT, Appellant,
v.
Earl Eugene BASSETT, a minor under the age of 21 years, Appellee.
No. 46368.
Court of Appeals of Oklahoma, Division No. 2.
March 26, 1974.
Jerome H. Blumenthal, Oklahoma City, for appellant.
Kent Fleming, Watts, Looney, Nichols, Johnson, & Hayes, Oklahoma City, for appellee.
*435 BACON, Judge.
This appeal challenges the propriety of the trial court's ruling that appellant could not maintain a suit against his 20-year-old son for negligently driving into and killing appellant's horse. Among the legal issues here raised is one attacking the constitutionality of the Oklahoma statute in effect at the time which defined minors as females under 18 years of age and males under 21 years of age.
On November 16, 1971, 20-year-old Earl Bassett (appellee) was living in his parents' home and not contributing any money to his parents for housing or food. On this date, while driving a pickup truck, Earl collided with and killed an expensive horse owned by his father, Robert Bassett (appellant). Appellant filed suit alleging appellee was negligent and the trial court ultimately sustained appellee's motion for summary judgment. In sustaining appellee's motion for summary judgment, the trial court concluded appellee, being an unemancipated minor under the laws of Oklahoma, was immune from a suit in tort by his parent.[1]
Appellant urges two propositions for reversal. First, appellant urges Oklahoma reject the doctrine of "intrafamily immunity" or at least as it would apply to torts to personal property. Second, appellant challenges the constitutionality of the controlling statute at the time this cause of action arose which made minors females under 18 years and males under 21 years.[2] The statute was amended[3] in 1972, effective August 1, 1972, defining "Minors, except as otherwise provided by law, are persons under eighteen (18) years of age... ." (emphasis ours)
We agree with appellant's second proposition which challenged the constitutionality of § 13 before it was amended, and note such proposition went unanswered in appellee's answer brief. We will only discuss appellant's second proposition, because a finding that § 13 prior to amendment was unconstitutional will render the intrafamily immunity issue immaterial in this case.
Appellant challenges § 13 urging it is unconstitutional because it is violative of the equal protection clause of the Fourteenth Amendment to the Constitution of the United States. We agree. The following discussion will point up the constitutional aspects of a legislative classification based upon sex which has no fair or substantial relation to the object of the legislation, which is the test for constitutionality.
Probably one of the most cited cases is Reed v. Reed, 404 U.S. 71, 92 S. Ct. 251, 30 L. Ed. 2d 225 (1971), wherein the high court held an Idaho statute unconstitutional which provided that as between persons *436 equally qualified to administer estates, males should be given preference to females. In Reed, the court said:
"... § 15-314 provides that different treatment be accorded to the applicants on the basis of their sex; it thus establishes a classification subject to scrutiny under the Equal Protection Clause."
Section 13, as indicated, defines minors (thus entitling them to certain rights, powers, privileges and immunities) and classifies them by sex, i.e. females under 18, males under 21. Such classification would be subject to scrutiny under the equal protection clause of the United States Constitution according to the Reed case.
In Reed the Court goes on to say:
"In applying that clause, this Court has consistently recognized that the Fourteenth Amendment does not deny to States the power to treat different classes of persons in different ways. Barbier v. Connolly, 113 U.S. 27, 5 S. Ct. 357, 28 L. Ed. 923 (1885); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 31 S. Ct. 337, 55 L. Ed. 369 (1911); Railway Express Agency v. New York, 336 U.S. 106, 69 S. Ct. 463, 93 L. Ed. 533 (1949); McDonald v. Board of Election Commissioners, 394 U.S. 802, 89 S. Ct. 1404, 22 L. Ed. 2d 739 (1969). The Equal Protection Clause of that amendment does, however, deny to States the power to legislate that different treatment be accorded to persons placed by a statute into different classes on the basis of criteria wholly unrelated to the objective of that statute. A classification `must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.' Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S. Ct. 560, 561, 64 L. Ed. 989 (1920). The question presented by this case, then, is whether a difference in the sex of competing applicants for letters of administration bears a rational relationship to a state objective that is sought to be advanced by the operation of §§ 15-312 and 15-314.
......
"... To give a mandatory preference to members of either sex over members of the other, merely to accomplish the elimination of hearings on the merits, is to make the very kind of arbitrary legislative choice forbidden by the Equal Protection Clause of the Fourteenth Amendment; and whatever may be said as to the positive values of avoiding intrafamily controversy, the choice in this context may not lawfully be mandated solely on the basis of sex.
"... The objective of § 15-312 clearly is to establish degrees of entitlement of various classes of persons in accordance with their varying degrees and kinds of relationship to the intestate. Regardless of their sex, persons within any one of the enumerated classes of that section are similarly situated with respect to that objective. By providing dissimilar treatment for men and women who are thus similarly situated, the challenged section violates the Equal Protection Clause. Royster Guano Co. v. Virginia, supra."
In a still more recent case by the United States Supreme Court, Frontiero v. Richardson, 411 U.S. 677, 93 S. Ct. 1764, 36 L. Ed. 2d 583 (1973), Mr. Justice Brennan quotes and paraphrases from Reed and then discusses the traditional reasons for sex discrimination against women. The Court in Frontiero states that both Congress and the United States Supreme Court have concluded that classifications based upon sex are inherently invidious. Such classifications based upon sex, says the Court, are "like classifications based upon race, alienage, and national origin, are inherently suspect and must therefore be subjected to close judicial scrutiny." There can be little doubt in the present case that § 13 would be unconstitutional if *437 instead of saying males under 21 and females under 18 are minors, the statute said blacks under 18 are minors, and whites under 21 are minors. It would clearly be an unreasonable and arbitrary classification based upon race, which, as classifications based upon sex, would be subjected to strict judicial scrutiny and violative of the equal protection clause of the Fourteenth Amendment under Reed.
Sex, like race or origin, is an immutable characteristic determined solely by birth, and to legislate certain rights, powers, privileges and immunities on members of a particular sex, because of their sex, would be violative of the basic concept of our system that such emoluments should bear some relationship to individual responsibility. To distinguish on the basis of sex alone is to completely ignore, say, the intelligence, physical ability and responsibility of an established individual 20-year-old male and yet the instant his sister is born of the other class she is entitled to the rights, powers, privileges and immunities solely because of her birth. Had appellee's sister hit the horse after attaining age 18, the parent could have brought suit to regain his loss, but he could not sue to recover his loss from his son if the son was under 21 years of age.
It is clear then, under the cited cases herein, the classification "must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike." Reed v. Reed, supra. The object of § 13 was to define minors, and in classifying by sex, the classification would be unreasonable, arbitrary and not upon grounds of difference fairly and substantially related to a definition of a minor. We therefore find § 13 prior to the 1972 amendment to be unconstitutional because it was violative of the equal protection clause of the United States Constitution.
The case is reversed and remanded to the trial court with instructions to vacate the summary judgment and proceed accordingly.
Reversed and remanded.
BRIGHTMIRE, P.J., and NEPTUNE, J., concur.
NOTES
[1] Oklahoma has generally followed the doctrine of "intrafamily immunity" and thus denies a parent the right to sue an unemancipated minor child. Workman v. Workman, Okl., 498 P.2d 1384 (1972); Hill v. Graham, Okl., 424 P.2d 35 (1967); Hampton v. Clendinning, Okl., 416 P.2d 617 (1966); Tucker v. Tucker, Okl., 395 P.2d 67 (1964).
[2] 15 Ohio St. 1971 § 13:
"Minors except as otherwise provided by law are:
1. Males under twenty-one years of age.
2. Females under eighteen years of age. The periods thus specified must be calculated from the first minute of the day on which persons are born to the same minute of the corresponding day completing the period of minority."
[3] 15 Ohio St. 1972 Supp. § 13. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1542910/ | 93 F.2d 652 (1937)
TOMLINSON et al.
v.
UNITED STATES.[*]
No. 6987.
United States Court of Appeals for the District of Columbia.
Decided November 22, 1937.
Rehearing Denied December 13, 1937.
*653 James A. O'Shea, John H. Burnett, and Alfred Goldstein, all of Washington, D. C., for appellant Tomlinson.
Francis J. Kelly, of Washington, D. C., for appellant Pratt.
Leslie C. Garnett, U. S. Atty., and Samuel F. Beach and Charles B. Murray, Asst. U. S. Attys., all of Washington, D. C.
Before ROBB, GRONER, and MILLER, Associate Justices, and WHEAT, Chief Justice of District Court.
MILLER, Associate Justice.
The appellants were convicted in the District Court under an indictment charging them and Charles Henry Bass with the crime of robbery. They challenged the sufficiency of the indictment on the grounds that there was a misjoinder of offenses and that it charged no offense against appellants.
The offense of robbery is defined by the statute of the District of Columbia, as follows: "Whoever by force or violence, whether against resistance or by sudden or stealthy seizure or snatching, or by putting in fear, shall take from the person or immediate actual possession of another anything of value, is guilty of robbery." Section 810, D.C.Code 1924; section 34, Tit. 6, D.C. Code. 1929.
*654 The indictment, containing a single count, charged, in part, the commission of the offense "by force and violence, and against resistance, and by putting in fear, and by sudden and stealthy seizure and snatching." This was a proper and sufficient charge to support the conviction. Turner v. United States, 57 App.D.C. 39, 16 F.2d 535.
The appellants concede that the indictment charged the offense of robbery, but insist that it contained additional language which made it defective. The additional language complained of reads as follows: "* * * said defendants being then and there armed with a certain pistol held in the hand of the said Phillip John Pratt. * * *" At most this was surplusage and was so regarded by the lower court in overruling a demurrer to the indictment. See United States v. Noveck, 271 U.S. 201, 203, 46 S. Ct. 476, 70 L. Ed. 904, Ford v. United States, 273 U.S. 593, 602, 47 S. Ct. 531, 534, 71 L. Ed. 793; Clifton v. United States, 54 App.D.C. 104, 295 F. 925; Miller v. United States, 6 App. D.C. 6. The evidence clearly disclosed that one of the defendants was armed with a pistol at the time of the robbery. The allegation of the means used for the commission of the offense, while unnecessary under present-day simplified pleading (Hagner v. United States, 285 U.S. 427, 52 S. Ct. 417, 76 L. Ed. 861), was entirely proper and was in no way prejudicial to the defendant.
It was further contended that the language last quoted was intended to bring the indictment within the terms of sections 116a and 116b, Tit. 6, D.C.Code Supp. II, sections 1 and 2, Act of July 8, 1932, c. 465, 47 Stat. 650, in order to increase the punishment which might be imposed in the event of a verdict of guilty. The lower court expressly declined to consider it for that purpose, so there is no reason for complaint in any event. There is nothing in the indictment to indicate such a purpose upon the part of the government. We are concerned only with the indictment itself. It is sufficient on its face and that is enough.
After the government had made its opening statement to the jury, Bass, a codefendant, was permitted to change his plea from not guilty to guilty and his case was thereupon referred to the probation officer. Appellants claim that this was done in the presence of the jury and that they were prejudiced thereby. The government contends that the change of plea and reference to the probation officer occurred out of the presence of the jury. The record is ambiguous regarding the matter. A general exception was taken to the action of the court in permitting the change of plea the ground of the exception not being stated. In his charge to the jury, to which no exception was taken, the trial judge pointed out that the case as to Bass had been disposed of "upon his plea of guilty in this court." Bass testified for the government and fully and clearly revealed his participation in the crime. An application by a defendant to change his plea is addressed to the sound discretion of the court, and the action of the court will not be disturbed, unless there has been an abuse of that discretion. Assuming in the present case that Bass' change of plea was made in the presence of the jury, no abuse of discretion was shown upon the part of the court below. Brown v. United States, 56 App.D.C. 326, 13 F.2d 298.
Error was assigned on account of the refusal of the court to exclude the testimony of witness Smallwood concerning conversations with Tomlinson which occurred three or four months before the commission of the crime. This testimony was to the effect that Tomlinson solicited Smallwood to rob the same man at the same place as was later done by Bass and Pratt, who were jointly charged with Tomlinson; and, moreover, that Tomlinson outlined to Smallwood a plan for the commission of the proposed crime which conformed closely to the plan eventually followed. It is obvious that this evidence tended strongly to prove Tomlinson's plan, purpose, and intent. We have held that evidence of this character is admissible, even though it consists of proof of another crime committed by the defendant, if it is so connected with the crime charged as to establish a common scheme or purpose, so associated that proof of one tends to prove the other. Borum v. United States, 61 App.D.C. 4, 56 F.2d 301, 303, certiorari denied Logan v. United States, 285 U.S. 555, 52 S. Ct. 459, 76 L. Ed. 944. In that case we said: "The ground on which such evidence is allowed is that both crimes are connected with a single purpose and in pursuance of a single object."
Smallwood's testimony revealed a single purpose and the pursuance of a single object on the part of Tomlinson. Clearly *655 there is even less reason for excluding it than if it had proved the commission of another crime.
On direct examination Tomlinson testified that "he met Smallwood one time when he was brought into Mr. Tomlinson's office by a client and he was asked to represent Smallwood if he ever got into trouble; that he gave Smallwood one of his cards." No further testimony was given by the witness concerning the "client," and no disclosure made of conduct or transactions of the client. On cross-examination Tomlinson was asked the name and business of his client and required by the court to answer, over his objection and claim of privilege. This did not constitute error. Appellant, himself, opened the inquiry on direct examination, and thus subjected himself to searching cross-examination. Reagan v. United States, 157 U.S. 301, 305, 15 S. Ct. 610, 39 L. Ed. 709; Fitzpatrick v. United States, 178 U.S. 304, 315, 20 S. Ct. 944, 44 L. Ed. 1078. Questions as to the name and business of a person referred to voluntarily, on direct examination, are routine, preliminary questions, on cross-examination. Generally speaking, a disclosure of the name and occupation of a client does not constitute the violation of a privileged communication. See Chirac v. Reinicker, 11 Wheat. 280, 295, 6 L. Ed. 474; Catalog Ass'n v. A. Eberly's Sons, 60 App.D.C. 216, 50 F.2d 981; Ann.Cas. 1913A, 28, 29; 28 R.C.L. 563, § 153; Thornton, Attorneys, § 124. The case of Elliott v. United States, 23 App.D.C. 456, relied upon by appellants, is an example of the type of exceptional situation under which such a disclosure would violate the privilege. In that case the attorney had already revealed the fact that he had prepared for the client in question a memorandum for a will. To reveal his name, therefore, would disclose the whole relationship and the facts which he had solemnly promised not to disclose. The rule in the Elliott Case is properly limited to cases involving such exceptional circumstances. See 5 Wigmore, Evidence, 2d Ed., § 2314; United States v. Lee, C.C., 107 F. 702. To apply it to prevent normal cross-examination in such a case as the present would unnecessarily encourage deception, and defeat the purpose of cross-examination. "The court has a right to know that the client whose secret is treasured is actual flesh and blood, and demand his identification, for the purpose, at least, of testing the statement which has been made by the attorney who places before him the shield of this privilege." United States v. Lee, supra, 107 F. 702, at page 704.
The refusal of the trial court to instruct the jury that the witness Smallwood was an accomplice was not error. This court has defined an accomplice as anyone who knowingly and voluntarily co-operates with, aids, assists, advises, or encourages another in the commission of a crime, regardless of the degree of his guilt. Egan v. United States, 52 App.D.C. 384, 390, 287 F. 958, 964. The witness Smallwood did not co-operate with, aid, assist, advise, or encourage the appellants, or any one else, to commit the crime for which appellants have been convicted. Instead he declined to have anything to do with it, although urgently solicited by Tomlinson to do so. See Bird v. United States, 187 U.S. 118, 132, 23 S. Ct. 42, 47 L. Ed. 100.
The appellant Tomlinson requested several instructions on "alibi," which were properly refused by the court. Other instructions given at the request of Tomlinson and by the court on its own motion were adequate upon this point. The defense of alibi is an attempt to prove that the defendant was not present at the time and place of the offense and hence could not have committed it. It was not the contention of the government in this case that Tomlinson was physically present at the time and place of the offense, but that he was guilty as a principal, nevertheless, under section 908 of the D.C.Code 1924; Section 5, Title 6, D.C.Code 1929; Maxey v. United States, 30 App.D.C. 63, 72. The issue in dispute was whether, prior to the robbery, Tomlinson had advised, incited, connived at, aided, or abetted the commission of the offense. The evidence upon this point was that Tomlinson had met the witness Smallwood and his codefendants, Bass and Pratt, at various times and places; had discussed with them the possibility of committing the robbery, together with plans for its commission, and for the distribution of the loot; had furnished suits to be cleaned by Saritanos, who later became the victim of the robbery, in order to gain entrance into his place of business; had furnished a blackjack and revolver for the commission of the offense, and had driven, in his automobile, around the place to be robbed, while instructing the actual principals concerning his plans for the robbery. *656 Tomlinson denied all of these allegations generally, and in addition produced evidence intended to prove that he was at places other than those claimed by the government's witnesses, at the times when they claimed such events transpired. Appellant contends that the court should have instructed the jury specifically concerning his presence or absence at the times and places stated by the government's witnesses. This was not necessary. The issue of fact which the jury was required to decide was whether Tomlinson aided, advised, incited, abetted or connived at the offense charged. In deciding this question, it was required to consider all of the evidence before it. The court so instructed the jury, and further instructed that the burden was upon the government to prove such participation by Tomlinson beyond a reasonable doubt; failing in which the jury must give him the benefit of the doubt and acquit him.
Appellants further assign as error the argument of government counsel concerning Tomlinson's reputation and character. Tomlinson not only took the stand in his own behalf but called a number of witnesses who put his reputation and character in issue. Having done so, they became proper subjects for comment (see Greer v. United States, 245 U.S. 559, 38 S. Ct. 209, 62 L. Ed. 469); and the statements of the prosecutor, which are set out in the record, are not objectionable.
Finally, the appellant Tomlinson contends that counsel for the government was guilty of misconduct in commenting upon his failure to testify before the grand jury. Even though the fact were as appellant contends, his conclusion would not follow. In Raffel v. United States, 271 U.S. 494, 46 S. Ct. 566, 70 L. Ed. 1054, the Supreme Court held that it was not error to require the defendant, who offered himself as a witness upon a second trial, to disclose that he had not testified as a witness in his own behalf upon the first trial. The court said (271 U.S. 494, at page 499, 46 S. Ct. 566, 568, 70 L. Ed. 1054): "The safeguards against self-incrimination are for the benefit of those who do not wish to become witnesses in their own behalf, and not for those who do. There is a sound policy in requiring the accused who offers himself as a witness to do so without reservation, as does any other witness. We can discern nothing in the policy of the law against self-incrimination which would require the extension of immunity to any trial, or to any tribunal other than that in which the defendant preserves it by refusing to testify."
However, the argument, properly considered, was not comment upon the failure of the defendant to appear and testify before the grand jury, but comment upon the testimony of the defendant, voluntarily given on direct examination, as to why he did not appear before the grand jury. The privilege of the defendant against self-incrimination and its corollary, the prohibition against comment by counsel for the government upon his failure to testify, have been jealously protected by the courts. But, when the defendant elects, voluntarily, to testify, he waives his privilege, subjects himself to cross-examination and impeachment, and makes comment upon his testimony entirely proper.
The only additional point urged on behalf of the appellant Pratt is that the trial court erred in refusing to grant a continuance of the case. The supposed error is grounded on the fact that Pratt's attorney was appointed to defend him only four days before the date of trial and had insufficient time to prepare his defense. This is a matter within the discretion of the trial court. Baker v. United States, 4 Cir., 21 F.2d 903; Crono v. United States, 9 Cir., 59 F.2d 339. There is no showing of an abuse of discretion here. Moreover, Pratt had the advantage of the work done at the trial and preceding it, by counsel for appellant Tomlinson. He states in his brief that he adopts the statement of facts and the points of law outlined in the brief filed in behalf of Tomlinson assigning only the one additional error. This is in itself convincing evidence that he was not prejudiced by the court's refusal to grant a continuance.
Affirmed.
NOTES
[*] Writ of certiorari denied 58 S. Ct. 645, 82 L.Ed. ___. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2428127/ | 827 S.W.2d 361 (1992)
Ginette K. HORTON, Appellant,
v.
MONTGOMERY WARD & CO., INC., Appellee.
No. 04-91-00060-CV.
Court of Appeals of Texas, San Antonio.
January 8, 1992.
Rehearing Denied February 18, 1992.
*362 Harry J. Skeins, Jr., Skeins & Williamson, San Antonio, for appellant.
Dennis P. Duffy, George P. Parker, Jr., John A. Ferguson, Jr., Matthews & Branscomb, San Antonio, for appellee.
Before BUTTS, CHAPA and BIERY, JJ.
*363 OPINION
BIERY, Justice.
Ginette K. Horton, appellant/plaintiff, sued Montgomery Ward & Co., Inc. for $1,000,000, alleging mental anguish because a fellow employee, James Lancaster, threw a paper wad at her. The trial court granted Montgomery Ward's motion for summary judgment. We affirm.
In 1975, Ms. Horton began working for Montgomery Ward as a secretary in the Product Services Unit in San Antonio, Texas. In September of 1987, she was promoted to the managerial position of Operations Supervisor. A co-worker in the Product Services Unit, James Lancaster, was also classified as a supervisor with the same level of authority as Ms. Horton. About a week after her promotion, Ms. Horton entered Mr. Lancaster's office to discuss a customer complaint. Ms. Horton stated she had been instructed by Howard Ward, the Product Service Manager, to request Lancaster's assistance with this particular customer. A discussion between Horton and Lancaster ensued during which Horton wanted to give Mr. Lancaster a note, written on a four-inch by six-inch piece of paper, she had prepared concerning the customer's complaint. Lancaster responded that the complaint was not his problem and shook his finger at Horton saying, "get out of [my] office dummy." Although Lancaster made it clear he did not want Horton to leave the note with him, she placed it on his desk and returned to her office. Moments later, Lancaster walked into her office, wadded up the complaint note, and tossed the note at Horton stating, "Don't dump your shit on me." The note allegedly hit Horton on the arm and landed on her desk.[1] Horton then responded she would handle the complaint to which Lancaster replied, "Good." Ms. Horton also stated she has not spoken to Lancaster since the incident. The record is clear that there were problems between Lancaster and Horton. This appeal, however, is limited to the employer's (Montgomery Ward) intent to injure Horton.
Ms. Horton initially filed suit in December of 1987. After her first suit was dismissed, for Horton's failure to appear for the continuation of her deposition, Horton refiled her cause of action by filing a second amended original petition. A motion for summary judgment, directed at the allegations in Horton's second original petition, was filed by Montgomery Ward.[2] Horton filed a response to Montgomery Ward's motion and on the same date, filed her third amended petition in which she dropped one of the named defendants,[3] dropped her slander allegation, and added allegations of intentional infliction of emotional distress, breach of contract, and misrepresentation. The court denied Montgomery Ward's first motion for summary judgment which was "directed to Plaintiff's Second Amended Original Petition" only. Approximately one year later, Montgomery Ward filed its second motion for summary judgment which was granted. Horton then filed a motion for nonsuit, dismissing Lancaster as a defendant. After the court entered its final judgment, Montgomery Ward filed its motion for attorney's fees and sanctions pursuant to Rule 13, Texas Rules of Civil Procedure. The court agreed with Montgomery Ward that two of Horton's claims were frivolous but stated it would not impose sanctions if Horton were to drop the offending claims from the complaint. Horton did file a fourth amended original petition which omitted the two frivolous. *364 claims.[4] Horton asserts two points of error in which she contends the court erred in granting the summary judgment and in forcing her to amend her petition.
In her first point of error, Horton contends the court erred in granting Montgomery Ward's summary judgment and final judgment. In order to obtain a summary judgment, each element of the defense must be proved conclusively by the defendant or at least one element of each of plaintiff's claims must be negated. Overstreet v. Home Indem. Co., 678 S.W.2d 916 (Tex.1984). Once a defendant has negated the elements as a matter of law, plaintiff then has the burden of introducing evidence which raises issues of fact with respect to the elements negated by the defendant's summary judgment evidence. Eckler v. General Council of the Assemblies of God, 784 S.W.2d 935, 938 (Tex.App.San Antonio 1990, writ denied). When an affirmative defense is established by the movant as a matter of law, the burden is placed on the nonmovant to adduce evidence raising a fact issue if the nonmovant wishes to defeat the affirmative defense and avoid the summary judgment. "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936-37 (Tex.1972); Yzaguirre v. Medrano, 786 S.W.2d 88, 90 (Tex.App.San Antonio 1990, no writ). The standard for reviewing a motion for summary judgment is as follows:
1. The movant for summary judgment has the burden of showing that 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 material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true.
3. Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.
Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Elam v. Yale Clinic, 783 S.W.2d 638, 641 (Tex. App.Houston [14th Dist.] 1989, no writ).
In its motion for summary judgment, Montgomery Ward made the following assertions: (1) that Horton's claims arising out of the alleged assault and battery were barred by the exclusivity provisions of the Texas Workers' Compensation Act, and that none of the alleged acts or omissions which produced the alleged injury rose to the level of an intentional act by Montgomery Ward; (2) that Horton's claims for intentional infliction of emotional distress for acts occurring since the assault were barred because Montgomery Ward's alleged wrongful conduct was not "extreme and outrageous" as a matter of law, and that these claims were also barred by the exclusivity provisions of the Texas Workers' Compensation Act; (3) that Horton failed to establish a cause of action for breach of an alleged oral or implied employment contract because it was undisputed that Horton was an "at-will" employee, and the employment manual and other employment policies of Montgomery Ward did not constitute an enforceable employment contract as a matter of law; that Horton expressly acknowledged in writing her atwill status, and Montgomery Ward's personnel policies, upon which Horton relies, specifically disclaim any contract rights and preserve Montgomery Ward's right to change employment conditions at will; and (4) that Horton failed to establish a cause of action for intentional misrepresentation because she failed to identify any facts showing intentional misrepresentation by Montgomery Ward, and the personnel policies allowed Montgomery Ward to change employment conditions with or without notice to the plaintiff.
The Texas Workers' Compensation Act provides the exclusive remedy for injuries sustained by employees in the course of their employment and exempts employers from common law liability claims based on negligence or gross negligence except in death cases. Castleberry *365 v. Goolsby Bldg. Corp., 617 S.W.2d 665, 666 (Tex.1981). The Act does not, however, exempt employers from common law liability for intentional injuries. Id. Direct assaults by an employer on the employee fall within the intentional injury exception. Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985). The primary difference between a negligent or grossly negligent injury and an intentional injury is the specific intent to inflict the injury. Id. "The Restatement of Torts defines intent to mean that `the actor desires to cause the consequences of his act, or that he believes that the consequences are substantially certain to result from it.'" Id. The court in Reed held that the intentional failure to furnish a safe place to work does not rise to the level of an intentional injury except when the employer believes his conduct is substantially certain to cause the injury. Id. at 407. Gross negligence, on the other hand, is established if it is shown that the actor knew the conduct posed substantial risk to others but acted with conscious indifference to the rights, welfare, and safety of the others. Burk Royalty Co. v. Walls, 616 S.W.2d 911, 920 (Tex.1981). What lifts ordinary negligence into gross negligence is the mental attitude of the defendant. Id. at 922. To be classified as gross negligence, it must be shown that the actor knew about the peril but "his acts or omissions demonstrated that he didn't care. Such conduct can be active or passive in nature." Id.
A review of the summary judgment evidence indicates that Horton admitted in her deposition testimony that the paper wad "assault" occurred in the course and scope of a work-related argument.[5] She stated that as a result of the incident, she started having severe headaches and experiencing tension in her neck. An injury similar to the one alleged by Horton has been found to be compensable under the Workers' Compensation Act. See Director, State Employees Workers' Compensation Div. v. Camarata, 768 S.W.2d 427, 429 (Tex.App.El Paso 1989, no writ) (mental trauma may produce accidental injury as long as proof of definite time, place, and cause exists). Horton admits, however, that she has no evidence that Montgomery Ward requested or otherwise directed Lancaster to assault her. Evidence of such a request or direction has been held to fall within the narrow exception to the Workers' Compensation Act. Richardson v. The Fair, Inc., 124 S.W.2d 885, 886 (Tex.Civ.App.Beaumont 1939, writ dism'd judgmt cor.). The court in Richardson allowed the employee to recover because the employer hired the appellee for the express purpose of assaulting the employee, but the court went on to state that "if an employee is injured while in the course of his employment by an unprovoked assault on his person inflicted by a co-employee, the employee is entitled to compensation under the Texas Workmen's Compensation Act." Id. We also recognize that an injured person's lack of awareness of another's intent to injure him does not by itself establish a non-existent intent as a matter of law. Rodriguez v. Naylor Indus., 763 S.W.2d 411, 413 (Tex.1989). Here, the evidence presented does not raise even a fact question as to any intent on the part of Montgomery Ward to injure Ms. Horton.
In support of her intent claim, Horton not only relies on her own affidavit and the affidavits of four other Montgomery Ward *366 employees, but also on the deposition testimony of Howard Ward. Mr. Ward, Montgomery Ward's Product Service Department manager, admitted having behavior problems with Lancaster but stated that Lancaster would be counseled and at times, reports were placed in his personnel file. Ms. Horton asserts that because of Montgomery Ward's knowledge of these behavior problems, Montgomery Ward knew with substantial certainty that she would be injured by Mr. Lancaster. While there is no doubt that Horton and the four other present and former Montgomery Ward employees claim that Lancaster yelled at them, intimidated them, used abusive language, and harassed them, there is no evidence which raises a fact question as to whether Montgomery Ward directed Lancaster's actions and intended to harm Horton or that Montgomery Ward knew with substantial certainty that she would be harmed. The affidavits by the other employees indicate that they had encounters with Lancaster, that Lancaster was not reprimanded as much as they would have liked, and that it was the affiant's opinion that Lancaster was used to harass and intimidate employees. The evidence may raise a fact question as to whether Montgomery Ward may have been grossly negligent in failing to reprimand Lancaster for his antics and in supervising his behavior, but "[a]n injury caused by willful negligence or willful gross negligence is not an intentional injury necessary to avoid the effect of the Workers' Compensation Act." Castleberry, 617 S.W.2d at 666.
Horton's next assertion is that summary judgment should not have been granted as to her claim for intentional infliction of emotional distress. The elements to prove this cause of action are: (1) Montgomery Ward acted intentionally or recklessly; (2) the conduct was extreme and outrageous; (3) the actions of Montgomery Ward caused plaintiff emotional distress; and (4) the emotional distress suffered by Horton was severe. Tidelands Auto. Club v. Walters, 699 S.W.2d 939, 942 (Tex.App.Beaumont 1985, writ ref'd n.r.e.). Ms. Horton cites nine instances in her affidavit which she contends rises to the level of extreme and outrageous conduct:
1. Montgomery Ward assaulted her and committed battery upon her on September 22, 1987.
2. Montgomery Ward frightened her and humiliated her by placing rattlesnake rattlers on her desk.[6]
3. Montgomery Ward continued to promote name calling against her for almost two years after the September 22, 1987, incident.
4. Montgomery Ward caused her personal property to be pilfered and vandalized.
5. Montgomery Ward caused other employees to ostracize her from a normal business relationship with them.
6. Montgomery Ward defamed her by mutilating her photographs that were displayed on a bulletin board along with the photos of other employees (the eyes were scratched out).
7. Montgomery Ward purposely directed her to order Lancaster to repair a customer's air conditioner, knowing that the direction would result in harm to her (this order was given to *367 her after the September 22, 1987, incident).[7]
8. Montgomery Ward wrongfully disciplined her for reporting incidents that she was duty bound to report.[8]
*368 9. Montgomery Ward damaged her personal property located in her office.
In addition, in her answers to interrogatories she responded that she based her intentional infliction claim upon the following events:
1. Horton's supervisor refused to discipline Lancaster regarding the paper wad incident.
2. Howard Ward called Horton into his office and reprimanded her for telling her husband about the paper wad incident, and Ward told her husband that whatever happened to Horton while she was at work was none of his business.
3. Ron Lager, a manager in Montgomery Ward's Houston office, promised Horton that there would be a complete and thorough investigation into the paper wad incident, but he appointed Howard Ward to investigate the situation that Horton believed Mr. Ward created.
4. On July 8, 1988, Mr. Lager called Horton from his Houston office and ordered her to "get involved" in taking care of a customer complaint, even if it meant her sending Mr. Lancaster to the customer's residence to fix the customer's air conditioner.
5. Mr. Ward failed to advise her on what action she should take regarding incidents in which an employee she supervised failed to wear his uniform to work, took a company truck home without previous approval, and referred to Horton as a "fucking bitch" on one occasion to another supervisor, Mr. Byford.
6. Rick Ricken, a manager in the Chicago corporate office, failed to take prompt action regarding her complaint concerning Mr. Ward and Mr. Lancaster.
7. Howard Ward made the comment that as soon as this lawsuit was over with, she would be gone (meaning "fired").
8. Howard Ward failed to take appropriate action against Jim Lancaster for Lancaster's "unprofessional conduct" toward her.
9. On April 4, 1988, Lancaster and Richard Byford, Horton's coworkers, refused to assist a fellow employee, Dan Velasquez, who needed their help as a supervisor, which allegedly caused her workload to increase.
10. A few days before April 6, 1988, a fellow employee told Horton that Lancaster had given her the nickname of "rattlesnake."
11. On April 6, 1988, Horton discovered a set of rattlesnake rattlers on her desk.
12. On various other occasions, Horton observed that pictures of her children and of her husband were turned face down or were turned facing the wall of her office, that glass on a picture frame was broken, and that pictures of herself, along with other associates that were displayed in the hallway, had her eyes scratched out and moustaches drawn on her mouth.
Montgomery Ward contends that none of Horton's claims rise to the level of extreme and outrageous conduct as a matter of law. Montgomery Ward asserts that these incidents *369 show nothing more than petty conflicts between Horton and her coworkers, in particular James Lancaster, and Horton's belief that management was indifferent as to her complaints or inept in its handling of the situations. In addition, Montgomery Ward claims that Horton's claim is barred by the exclusivity provisions of the Texas Workers' Compensation Act because her claim arose from incidents committed by Montgomery Ward's employees at work and during the course and scope of Horton's employment.
Liability for outrageous conduct has been found "only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case in which outrageous conduct is found is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, `Outrageous!'" RESTATEMENT (SECOND) OF TORTS Section 46, Comment d (1965). The Restatement further explains that liability does not extend to "mere insults, indignities, threats, annoyances, petty oppression, or other trivialities." Id. It is also recognized that the "rough edges of our society are still in need of a good deal of filing down, and in the meantime plaintiffs must necessarily be expected and required to be hardened to a certain amount of rough language, and to occasional acts that are definitely inconsiderate and unkind." Id. "There is no occasion for the law to intervene in every case where some one's feelings are hurt. There must still be freedom to express an unflattering opinion, and some safety valve must be left through which irascible tempers may blow off relatively harmless steam." Id. It is for the court to first determine whether the conduct may reasonably be regarded as so extreme and outrageous as to allow recovery. Id. at Comment h.
Incidents in which a Texas court has determined the conduct to be extreme and outrageous in the employer/employee setting are few. In Dean v. Ford Motor Credit Co., 885 F.2d 300, 308 (5th Cir.1989), the attempt by the employer to set up a totally innocent employee as a target for a criminal charge simply because she opposed an illegal employment practice was found to be an intentional infliction of emotional distress. The Fifth Circuit made it clear that "fact that the `check incidents' occurred (the placing of checks in the employee's purse in order to make it appear she was a thief or putting her in fear of criminal charges for theft) and that the defendant was responsible for them is precisely what takes this case beyond the realm of an ordinary employment dispute and into the realm of an outrageous one. Such conduct simply will not be tolerated." Id. at 307. Had it not been for the check incidents, the other conduct, not considering the employee for a position she was qualified for, transferring her from desk to desk, calling upon the employee to do more work, subjecting her to unfair harassment, and subjecting her to special reviews not given to the other employees, would not have been outrageous.
Another Texas case in which the employee recovered for intentional infliction of emotional distress was Bushell v. Dean, 781 S.W.2d 652 (Tex.App.Austin 1989), rev'd on other grounds and writ denied, 803 S.W.2d 711 (Tex.1991). In Bushell, the employee claimed that she was sexually harassed for approximately four months by her supervisor, and the supervisor denied only a few of the employee's statements depicting his conduct. The conduct consisted of buying small things for the employee, calling her "My Sweet Mary", telling her he liked her slit skirt, remarking about the shape of her body, telling her on several occasions that he loved her and desired a sexual encounter, and becoming more demanding after she publicly spurned him and expecting her to complete her duties more quickly and thoroughly. The jury agreed with the employee that the events were humiliating and embarrassing. Id. at 658.
The record in this case indicates that the conflicts between Horton and Lancaster arose after the paper wad incident and *370 were nothing more than an exchange of insults, indignities, annoyances, and other trivialities which, as a matter of law, do not rise to a level of extreme and outrageous conduct. It is also possible that Horton's cause of action is barred by the Workers' Compensation Act because "[wjhen the person who intentionally injures the employee is not the employer in person nor a person who is realistically the alter ego of the corporation, but merely a foreman, supervisor or manager, both the legal and moral reasons for permitting a commonlaw suit against the employer collapse, and a substantial majority of modern cases bar a damage suit against the employer." A. LARSON, THE LAW OF WORKMEN'S COMPENSATION § 68.21 (1990). Here, Lancaster and Horton were on the same management level; Lancaster was not Horton's supervisor, much less an alter ego of the corporation.
Horton's next contention is that Montgomery Ward breached its oral employment contract with her by failing to provide her with a safe working environment pursuant to Tex.Rev.Civ.Stat.Ann. art. 5182a, § 3 (Vernon 1987). Horton asserts in her affidavit that she had an oral employment contract with Montgomery Ward, and that she realized, in 1987, that Montgomery Ward had violated its legal duty to provide her with a safe place to work because Montgomery Ward knew that Jim Lancaster had assaulted, abused, intimidated, and terrorized other employees over a period of years. Knowing this, Montgomery Ward exposed her to Lancaster's abuse and failed to warn her of the danger involved in talking with him or making any contact with him. In her opinion, Montgomery Ward failed to provide her with a safe place to work and this failure constituted a breach of her employment contract.
A review of the record indicates that Horton was an at-will employee as evidenced by the following statement she signed upon receiving her employment manual:
I have read and fully understand the rules governing my employment with Montgomery Ward. I agree that I will conform to these rules and regulations and, further understand and agree that my employment is for no definite period and may, regardless of the time and manner of payment of my wages and salary, be terminated at any time by Montgomery Ward or me, with or without cause, and without any previous notice.
Under Texas law, an employee handbook does not constitute an employment contract and may not impose contractual restrictions on an employer absent agreement between the employer and employee. Benoit v. Polysar Gulf Coast, Inc., 728 S.W.2d 403, 406 (Tex.AppBeaumont 1987, writ ref'd n.r.e.). The Montgomery Ward personnel handbook and manager's guide, relating to the disciplinary program, clearly state that it does not represent a contract of employment and employment with Montgomery Ward could be terminated at will for any reason, with or without cause.
Horton also asserts that she had a right to be provided with a safe working environment pursuant to statute. Section 3 of the article 5182a provides:
Every employer shall furnish and maintain employment and a place of employment which shall be reasonably safe and healthful for employees. Every employer shall install, maintain, and use such methods, processes, devices, and safeguards, including methods of sanitation and hygiene, as are reasonably necessary to protect the life, health, and safety of such employees, and shall do every other thing reasonably necessary to render safe such employment and place of employment.
Tex.Rev.Civ.Stat.Ann. art. 5182a, § 3 (Vernon 1987). The duty of an employer to provide a safe place to work has been confined to the construction, physical condition, and equipment of the premises, and not with regard to acts of fellow employees. Gonzales v. Lubbock State School, 487 S.W.2d 815, 817 (Tex.Civ.App.Amarillo 1972, no writ). We do not read the *371 above statute to pertain to acts by fellow employees.
In her fourth cause of action, Horton claims that Montgomery Ward "through its contract of employment with [Horton] and through its disciplinary policies applicable to its employees, including Plaintiff, intentionally misrepresented material facts or failed to disclose material facts, knew them to be false when they were made and continued in the course of her employment, and intended Plaintiff to rely upon the representations." In her affidavit, filed in response to Montgomery Ward's motion for summary judgment, Horton claims that she was specifically told she could expect the following:
1. To enjoy a safe working environment;
2. Could expect uniform and corrective actions in the event disciplinary actions became necessary;
3. Montgomery Ward would investigate, evaluate, and report misconduct and administer discipline fairly, appropriately, and properly;
4. Montgomery Ward would try to correct disciplinary problems in good faith;
5. Montgomery Ward would not avoid enforcement of its announced and printed disciplinary policies;
6. Montgomery Ward would conduct its investigations of misconduct fairly and objectively;
7. Montgomery Ward would not tolerate sexual harassment; and
8. Montgomery Ward would not tolerate offensive and degrading remarks cast upon employees or physical abuse of employees.
When Montgomery Ward asked Horton, by way of interrogatories, the facts which supported her misrepresentation claim she responded that Montgomery Ward knew that Lancaster did not conduct himself in a professional manner, that Lancaster yelled at fellow associates, that Lancaster had never once before been placed on report prior to the paper wad incident, that Lancaster had assaulted another employee years before the paper wad incident, that despite Montgomery Ward's knowledge of slanderous and derogatory remarks made by Lancaster about fellow associates, Lancaster still does as he wishes, that Montgomery Ward commented that as soon as the lawsuit was over Horton would be gone, Horton was reprimanded for telling her husband about the paper wad incident, when Horton called Ron Lager about the incident, he appointed Howard Ward to investigate and Mr. Ward downplayed the incident, and Horton was told to send Lancaster to a customer's residence after the paper wad incident.
To establish a claim for intentional misrepresentation there must be evidence that (1) a material representation of fact was made; (2) it was false; (3) the speaker knew it was false when it was made or the speaker made it recklessly without knowledge of its truth; (4) the representation was made with the intention that it should be acted upon by the party; (5) the party acted in reasonable reliance upon it; and (6) the party suffered injury. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983). There is no evidence in the record which identifies any specific false representation of fact attributed to Montgomery Ward.
Throughout her brief, Horton claims her affidavit and the affidavits of four other employees presented triable issues of fact. However, the affidavits are filled with legal conclusions, unsupported statements, and nothing which raises a fact issue regarding any intent on the part of Montgomery Ward to injure her. Affidavits in opposition to a motion for summary judgment must set forth facts, not legal conclusions. Mercer v. Daoran Corp., 676 S.W.2d 580, 583 (Tex.1984). Rule 166a(f) of the Texas Rules of Civil Procedure provides that opposing affidavits "shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Having failed to comply with the above rule, the trial court could properly ignore Horton's affidavits. The first point of error is overruled.
Because the overruling of the first point of error results in an affirmance, it is unnecessary *372 to address the Rule 13 sanction point.
The judgment of the trial court is affirmed.
NOTES
[1] Horton testified in her deposition that she did not try to move out of the path of the oncoming paper wad because she did not think it would hit her.
[2] The allegations were that Lancaster harassed and humiliated her, cursed at her, and committed assault and battery against her by hurling his arms at her as if to hit her and by actually striking her with a wadded up piece of paper, without her consent; that Montgomery Ward was negligent in the hiring of Lancaster; that Montgomery Ward was grossly negligent because it was consciously indifferent to the rights and welfare of Horton. Horton also alleged a cause of action for slander.
[3] Defendant Howard Ward was added in Horton's second amended original petition but was dropped as a defendant in Horton's third amended petition. The remaining defendants were Montgomery Ward and James Lancaster.
[4] The court found that Horton's claims for breach of contract and misrepresentation were frivolous.
[5] Horton's deposition testimony was as follows:
Q: The argument that ensued between yourself and Mr. Lancaster on September 22, 1987, at approximately 10:50 a.m. related to some work-related business; isn't that correct? .
A: Yes, sir.
Q: The note, in fact, was a note relating to a customer that had to be serviced by either Mr. Lancaster or someone on behalf of Montgomery Ward is that true?
A: Yes, that's true.
Q: Was there anything to the discussion between yourself and Mr. Lancaster from 10:50 in the morning until you left for lunch that day on September 22, 1987? Is there anything that was being done between the two of you that was related to some personal dispute that the two of you had?
A: Personal dispute?
Q: As opposed to any business of Montgomery Ward & Company, namely, this customer, for example, or taking messages for customer work?
A: No, sir, not that I am aware of.
[6] Ms. Horton's memorandum concerning this incident read in part: On Monday morning (April 4, 1988) at approximately 7:50 A.M., I arrived at work at the Product Service DepartmentSan Antonio, Texas. As usual, I went directly to my office, unlocked the door, and walked in; I walked around to the backside of my desk and pulled out my chair to sit down; as I went to place my purse on the floor beside my desk, I jumped back with fright when I saw this strange looking object (rattlesnake rattlers) only inches from my face! I took a pencil from my desk and moved the object around and discovered that it was a set of `rattlesnake rattlers'. Strangely enough, the first thing that went through my mind was that this was almost like some of the things that happened to Charlie Edwards several years ago; certain individuals played `jokes' and `pranks' on him until they drove him to retirement. I'm very thankful that the rattlesnake wasn't attached to this set of rattlers!
[7] Ms. Horton explains this incident in a memorandum to Mr. Howard Ward which is dated July 11, 1988, and reads in part as follows: Before 11:00 A.M.FridayJuly 8, 1988, I received a Corporate complaint call from Kathy Baretta from the Chicago office. She seemed very concerned because a customer... had just contacted Mr. Brennan regarding his central air conditioning unit.... [The customer] stated that Montgomery Ward Service Department had been to their house on six (6) service calls since March of this year and that their central air unit was out again. Kathy Baretta asked me who `Lancaster' was and I informed her that Mr. Jim Lancaster was also another Technical Supervisor; Kathy Baretta herself told me that Mr. Jim Lancaster has an `ATTITUDE PROBLEM' because he had told the customer that he didn't care who they ... called concerning his A/C problem consequently [the customer] called the Corporate Office in Chicago and talked with Mr. Brennan himself....
Shortly after I had returned from lunch, Mr. Ron Lager called me concerning this Corporate complaint from Chicago regarding the [customer's] air conditioning problem. I informed Mr. Lager as to the conversation with Kathy Baretta and myself and also informed him as to the details as to whom was being dispatched to the [customer's] residence to work on and repair the a/c unit. I also explained to Mr. Lager that the [customer's] air conditioning unit was over nineteen (19) years old and that the unit was still under our service contract. Mr. Lager asked me to `flag' the file N/S and also asked me to get involved, even if it meant me sending Jim Lancaster to the customers residence with the technician or contacting another company to repair the a/c unit; Mr. Lager further stated that Mr. Brennan's office had already received two (2) calls from the customer!
In my opinion, this Corporate complaint involving Mr. Brennan as well as Mr. Lager was unnecessary and most definitely could have been prevented. Perhaps only `some' people are not required to practice `Focus On The Customer' and this AGAIN clearly proven by Mr. Lancaster by his leaving work early that day at 3:30 P.M. and once again leaving his `work' and `complaining customer' to be cared for and handled by one of his associates.... I do not understand why Mr. Lager as well as Kathy Baretta from the Chicago office called and requested that I check into this customer's Corporate complaint regarding the [customer's] air conditioning problem. Do we have or Do we NOT have a capable Technical Supervisor over the Air Conditioning and Refrigeration Department who could have and most definitely should have handled this problem?; Evidently NOT! AGAIN, Mr. Lancaster has shown a `total' disregard for the customer's feelings and can be easily verified by [the customer] and also through Kathy Baretta in Mr. Brennan's Corporate Office in Chicago!
I most certainly do not understand Mr. Lager's comment to me that `if need be, he wanted me to send Mr. Lancaster to the [customer's] residence with the technician to repair the a/c unit'; Not only do I not understand Mr. Lager's request that would place me in a very uncomfortable situation but I sincerely do not appreciate Mr. Lager's request in the least.
[8] The written reprimand read as follows:
For the past several months (3-17-88, 4-4-88, 4-6-88, 6-16-88, 7-11-88) you have written a number of memos complaining about alleged misconduct and poor job related attitude on the part of Jim Lancaster. Your most recent complaint is also directed at me and Ron Lager. We have investigated your various allegations and found them to be unsubstantiated or petty and exaggerated in nature, and in some instances (for example, Jim's `gum popping' and alleged refusal to go to Corpus Christi) not even matters of legitimate concern to you as operation supervisor. In two instances, you even refused to cooperate by providing information to assist us in investigating your complaints. For example, you refused to give any cooperation to Rick Ricken in his attempt to investigate the very serious allegation contained in your memo of April 6, 1988. I can only conclude that your motives are not to provide constructive criticism or lodge legitimate complaints, but instead are a vindictive attempt, for whatever reason you may have, to attack and discredit Jim Lancaster. You seem to take pleasure in reporting any unsubstantiated rumor about Jim so that you can support your own conclusions and criticisms of his performance and then disseminating your unsubstantiated report to hightest [sic] levels of Montgomery Ward management. As an example from your latest memo dated 7-11-88 regarding a corporate complaint from Mr. Jonas, you stated that `you had heard' that Mr. Lancaster had hung up on Mr. Jonas, and also that Mr. Jonas had talked to Mr. Brennan himself. For your information, in my conversation with Mr. Jonas on July 11, 1988, Mr. Jonas stated to me that he had hung up on Jim and had called the corporate office and had talked to one of Mr. Brennan's assistants. You also related your feelings that `my lengthy talk with Mr. Lancaster in Byford's office' on June 24, 1988, `did a tremendous amount of good', which was sarcastic and not a constructive comment. You also questioned why Cathy Barettaor Ron Lager would call you to check into corporate complaints on an air conditioner. It is proper for the corporate office to contact the Operations Supervisor or any other available supervisor to assist in the prompt resolution of a customer complaint.
We consder [sic] your conduct to be unbusinesslike conduct as defined in our progressive discipline procedure. Your conduct has been both disruptive to the team spirit that must exist in the Product Service Center and counterproductive to officiate operations. Montgomery Ward will not tolerate continued conduct of this nature in the form of petty criticism, circulation of unfounded rumors, refusal to cooperate with management, or interjection of yourself into matters that are not properly part of your supervisory responsibilities or in which you are not directly involved and do not have a legitimate interest. If future incidents of this nature do occur, it will result in futher [sic] discipline, including possible termination. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2456618/ | 403 S.W.2d 168 (1966)
CITY OF SAN ANTONIO et al., Appellants,
v.
Bill POULOS, Appellee.
No. 14471.
Court of Civil Appeals of Texas, San Antonio.
April 20, 1966.
Rehearing Denied May 18, 1966.
*169 Sam S. Wolf, City Atty., J. Bruce Aycock, William R. Ward, Asst. City Attys., San Antonio, for appellants.
Jack Paul Leon, San Antonio, for appellee.
BARROW, Justice.
Appellants, City of San Antonio, its Fire and Police Civil Service Commission, and Chief of Police, George W. Bichsel, appeal from a judgment of the 166th District Court setting aside the Commission's order of permanent dismissal of appellee, Bill Poulos.
On March 5, 1965, the Chief indefinitely suspended Poulos and served written charges upon him, as required by Art. 1269m, § 16, Vernon's Ann.Civ.St. On March 23, 1965, the Commission heard Poulos' appeal from the suspension, and by a split vote found that the charges were true and ordered Poulos dismissed. Poulos appealed to the district court and, after a full hearing, the trial court found that the charges failed to allege a specific violation of any Civil Service rule, and further that the Commission's order of dismissal was not reasonably supported by substantial evidence.
The written charges made against Poulos were that he had violated Rule XX, Sec. 120, of the personnel rules of the City of San Antonio, which provides that an officer may be removed for: Neglect of duty; Failure or refusal to carry out instructions, and Violation of any of the Rules and Regulations of the Department. Poulos was charged with violating Rules 16, 17, and 29 of the Police Department.[1] Following *170 these charges specific acts were alleged in detail.
It is seen that the Chief first stated the general charge and then specified the acts which support the charge. This form of preferring charges under the Civil Service Act has been upheld by this Court. Bolieu v. Firemen's & Policemen's Civil Service Comm., Tex.Civ.App., 330 S.W.2d 234, wr. ref. n. r. e.; Harless v. Bichsel, Tex.Civ.App., 327 S.W.2d 791, no wr. hist.
Poulos asserted, both before the Commission and the trial court, that the charges together with the acts alleged in support thereof were legally insufficient to allege a violation of any civil service rule. It is settled law that the original charges brought against the officer must be legally sufficient and that the Chief is restricted to his original written statement and charge. Art. 1269m, § 16; Bichsel v. Carver, 159 Tex. 393, 321 S.W.2d 284 (1959).
The specific allegations set forth in the Chief's charges are substantially as follows: Detective Poulos exhibited to Detective Gomez, for the purpose of sale, a Model 21, Winchester 12-gauge shotgun, with extra set of barrels, and with a serial number beginning with "147". This was done under very suspicious circumstancesa piece of adhesive tape covered a part of the breech and Gomez was advised by Poulos not to look under the tape; Poulos advised that a friend could re-engrave over anything; and Poulos told Gomez he would not give a written receipt for the purchase. Gomez did not purchase, but subsequently checked the police burglary records and discovered the report of a burglary of Dr. Cowles' residence and theft of a similar shotgun, which is a very expensive and, therefore, somewhat rare model, with serial number "14767" and with the name "A. C. Cowles" engraved upon the breech. Gomez told Poulos of this burglary, but Poulos said he did not believe the gun he had was the same gun and filed no official report concerning the shotgun in his possession.
It was further alleged that Poulos was subsequently questioned and said that "Norman Spears" had given the gun to him for sale, although he later said "Earl M. Brooks" had asked him to sell the gun. The shotgun was returned to Brooks by Poulos, and Brooks returned it to Charlie Powers of Austin, who had initially requested sale of the gun.
It is seen that the crux of these allegations is that Poulos had in his possession and was attempting to resell a shotgun which had been stolen from the residence of Cowles. These allegations, if proven, would justify dismissal under either rule 16 or Rule 17 of the police department regulations. Obviously a police officer, if he is to deal in guns or other property, should be required to exercise great diligence to ascertain that he is not acting as a fence for stolen property. Poulos was required to look under the tape, and if the gun was engraved with "Cowles'" name, or any other name, he was required to ascertain the source of the gun and to advise his superiors of any suspected violation. It is our opinion that the charges brought against Poulos were sufficient to justify a dismissal.
The primary question before us on this appeal is whether or not the finding of the Commission that these charges were proven has reasonable support in substantial evidence introduced in the trial court. The Commission having upheld these charges, it was the duty of the trial court to sustain and not set aside such findings, if *171 they were reasonably supported by substantial evidence. Board of Firemen's Relief & Retirement Fund Trustees of Houston v. Marks, 150 Tex. 433, 242 S.W.2d 181, 27 A.L.R. 2d 965; Railroad Commission v. Shell Oil Co., 139 Tex. 66, 161 S.W.2d 1022; Stowe v. City of Corpus Christi, Tex.Civ. App., 358 S.W.2d 409, wr. ref. n. r. e.; Firemen's & Policemen's Civil Service Commission v. Shaw, Tex.Civ.App., 306 S.W.2d 160, wr. ref. n. r. e.
Although the crux of the allegations against Poulos was that he was fencing stolen property in attempting to sell this expensive shotgun, the appellants wholly failed to prove that the shotgun Poulos was attempting to sell was stolen from Cowles or from any other person. In fact, appellants' counsel stated: "We are not even claiming it was the identical gun." Therefore, Poulos' evidence that the gun did not have "Cowles" engraved on it, and that he did not have information regarding a felony or any other suspected violation, stands uncontradicted.
The finding of the Commission must therefore be supported, if at all, by the charge that Poulos violated Rule 29 by falsely stating that Spears had given the gun to him for sale, when in truth it had been Brooks. The evidence showed that about two weeks after Poulos showed the gun to Gomez, Poulos was called into the office of Captain Benfer, who was directly in charge of the detective division, and was interviewed concerning his resale of many guns, including the shotgun in question. This interview was characterized by all participants as an informal hearing. It is undisputed that Poulos was very evasive during this interview, and in connection with the shotgun involved in this trial, when pinned down, said this shotgun came from Spears. Captain Benfer was not satisfied with the answers of Poulos and ordered him to make a formal report. Poulos was not happy with the intimation that he was involved in a burglary, and on the following day went to see the Inspector over Captain Benfer and the Chief of Police. Poulos was told by the Chief to file the report, which he did later that day, and in this written report he identified Earl Brooks as the person who gave him the gun for resale. Captain Benfer testified that Brooks corroborated Poulos and apparently all of Poulos' other sales were also satisfactorily checked.
The question is thus presented as to whether the false statement made to Captain Benfer was a violation of Rule 29. It is our opinion that it cannot be so considered. This rule is restricted by its express terms to willful misrepresentations, false official statements or reports, perjury, or false testimony before "any court, grand jury, board or commission." Undoubtedly there are other regulations which authorize a superior officer to interview his subordinates relative to their conduct as members of the force. If not, common sense would dictate the wisdom of such a regulation. Rule 29 does not apply, however, to a situation as presented here, where the officer made a false statement or is evasive during the course of an informal interview with his superior officer. Clearly, we have no authority to amend the rule or to construe the unambiguous language of same, regardless of the desirability of such a rule. A. M. Servicing Corp. of Dallas v. State, Tex. Civ.App., 380 S.W.2d 747, no writ.
Appellants further complain of the exclusion of official police records showing the report of the burglary of the Cowles residence as well as the testimony of Dr. Cowles that his shotgun was stolen. The reports of this burglary were properly proven up by the custodian and were admissible in evidence. Art. 3731a, Sec. 1, Vernon's Ann.Civ.St.; Statler Hotels v. Herbert Rosenthal Jewelry Corp., Tex.Civ.App., 351 S.W.2d 579, wr. ref. n.r.e. The testimony of Dr. Cowles was admissible as original evidence. It is our opinion that the exclusion of this evidence was harmless in view of appellants' admission that the shotgun *172 exhibited by Poulos was not the shotgun stolen from Dr. Cowles.
The trial court did not err in refusing to permit appellants to impeach their witness Gomez by his prior inconsistent statement made to the Chief, where appellants admitted they were not surprised by his testimony. McCormick & Ray, Texas Law of Evidence, § 632; Morgan v. Stringer, 120 Tex. 220, 36 S.W.2d 468.
The trial court correctly held that substantial evidence was not introduced to support the finding of the Commission that Poulos violated any of the rules and regulations of the San Antonio Police Department as charged by the Chief of Police.
The judgment is affirmed.
NOTES
[1] "Rule 16: Officers shall report promptly (all violations coming to their attention, as well as) all information they may receive about any violation or suspected violation. (However, if the offense is committed in the officer's presence, and he can make a legal arrest, he shall take this action and make proper report.)"
"Rule 17: Officers having information regarding any felony (or any person wanted for a felony charge), and immediate action is not required, shall give all details to his Superior Officer and submit a written report as specified in the Reporting Regulations."
"Rule 29: No member of the Department shall wilfully misrepresent any matter, sign any false official statement or report, (perjure himself, or give false testimony, before any court, grand jury, board, hearing or commission)."
The parts set off by parentheses were not included in the charges against Poulos. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1943312/ | 174 B.R. 955 (1994)
In re ENVIRODYNE INDUSTRIES, INC., et al., Debtors.
Bankruptcy Nos. 93 B 310, 93 B 312, 93 B 316, 93 B 318 and 93 B 319.
United States Bankruptcy Court, N.D. Illinois, Eastern Division.
September 26, 1994.
*956 Allan S. Brilliant of Holleb & Coff, Chicago, IL, for debtors.
James E. Spiotto and Steven E. Garcia (local counsel) of Chapman & Cutler, Chicago, IL, Edwin G. Schallert and Steven R. Gross of Debevoise & Plimpton, New York City, for Official Committee of Bondholders.
MEMORANDUM OF DECISION:
THE MOTION FOR ENTRY OF AN ORDER RELEASING AND DISCHARGING THE MEMBERS OF AND PROFESSIONALS TO THE OFFICIAL BONDHOLDERS' COMMITTEE
JOHN D. SCHWARTZ, Chief Judge.
I. Introduction
On November 8, 1993, the confirmation hearing on the Debtors' First Amended Plan of Reorganization as Twice Modified ("Plan") commenced. On that day, the Official Committee of Bondholders of Envirodyne Industries, Inc. ("Official Bondholders' Committee") filed a motion ("Limited Release Motion") *957 seeking an order directing the Debtors to incorporate the following provision into the confirmation order, if one were to issue:
releasing and discharging the members of the [Official] Bondholders' Committee and its professionals from known and unknown claims of any nature that any creditor or equity security holder of the Debtors has, had or may have against the [Official] Bondholders' Committee and its respective present and former members and professionals, other than the claims that arise after the effective date of the [Plan] or claims that do not arise from a relationship of the applicable released entity to the [Official] Bondholders' Committee. (emphasis added.)[1]
Alternatively, the Official Bondholders' Committee asks this court to retain jurisdiction to hear and determine any claims, rights or causes of action asserted against the parties it sought to release and to liquidate, if necessary, any claims asserted against these parties for acts or omissions related to the Debtors' bankruptcy cases.
At the time the Limited Release Motion was filed, a lawsuit was pending in the United States District Court for the Southern District of New York entitled M.D. Sass Re/Enterprise Partners, L.P., et al. v. Cargill Financial Services, et al., No. 93 Civ. 7414 (S.D.N.Y. filed Oct. 27, 1993).[2] In this lawsuit, two members of the Official Bondholders' Committee, joined by two non-members, alleged that other members of the Official Bondholders' Committee breached their fiduciary duties as committee members.
The plaintiffs in that suit were members of the unofficial committee composed of 13½% noteholders ("Unofficial 13½% Noteholders' Committee") in the above captioned bankruptcy proceeding. The Unofficial 13½% Noteholders' Committee was one of the parties objecting to the Plan and it filed a response objecting to the Limited Release Motion. The response stated that the eve of a contested confirmation hearing was not the appropriate time to, in effect, seek a modification of the plan of reorganization. Additionally, the Unofficial 13½% Noteholders' Committee stated that it was not then in a position to conduct discovery or to research and brief the issues presented by the Limited Release Motion. It requested more time in order to fully investigate the matter and brief the issues.
The court agreed that the eve of the confirmation hearing was not the proper time to consider the Limited Release Motion as it would materially change the Plan and thus, violate the modification procedures of § 1127.[3] The Plan had already been described in an approved disclosure statement and two approved supplements thereto which were sent to the creditors, and the Plan had been voted upon and the results tallied. Furthermore, the parties in interest who planned to appear at the confirmation hearing had already prepared and submitted exhibits and other materials for the hearing and were not prepared for the Limited Release issue. Based on the schedule the court had set, it would have been an imposition on *958 all of the parties to delay the hearing to allow yet another modification of the Plan and vote. Neither the Debtors nor the Official Bondholders' Committee requested such a delay.[4] The court decided to address the Limited Release Motion as a matter separate from the confirmation of the Plan and consider the motion after the close of the hearing. A briefing schedule was established giving those who received notice sufficient time to respond.[5]
The confirmation hearing ended on November 30, 1993. On December 8, 1993, after the confirmation hearing, but before the issuing of the court's findings of fact and conclusions of law and order of confirmation, the Debtors filed a written joinder supporting the issuing of a release to the extent that the Plan was confirmed. The release language the Debtors sought was that the court enter an order:
releasing, waiving, and discharging all known and unknown claims of any nature that any creditor or equity security holder has, had or may have against the [Official] Bondholders' Committee Members and the [Official] Bondholders' Committee Professionals and their respective agents and former stockholders, members, directors, officers, employees, agents, attorneys, accountants, investment bankers, financial advisors, and other representatives, other than claims that arise after the Effective Date of the [the Plan] or claims that did not arise from a relationship of the applicable released entity to the Official Bondholders' Committee Members and the [Official] Bondholders' Committee Professionals (the "Limited Release"). (emphasis added)[6]
The Debtors also asked that the Limited Release be expanded to include the "Trade Committee Members" and "Trade Committee Professionals" and emphasized that the Limited Release would exclude claims for "willful misconduct." In addition, the Debtors sought an order discharging the duties and responsibilities of the Bondholders' Committee.
Also on December 8th, the United States Trustee filed a response to the Limited Release Motion which expressed its concern regarding the issuing of the Limited Release. On the same date, the Unofficial 13½% Noteholders' Committee filed a supplemental response which stated that the Limited Release Motion should be denied for various substantive and procedural reasons. Additionally, the Official Bondholders' Committee filed a supplemental memorandum on that date which further supported the Limited Release Motion and which, among other issues, addressed some concerns allegedly raised by the Securities & Exchange Commission about the scope of the proposed Limited Release.[7]
On December 13, 1993, the court conducted a hearing on the Limited Release Motion and requested additional briefs addressing the history of creditors' committees as the court felt that this history could be of some guidance. Also, on December 13th, the court entered its Memorandum Opinion for Hearing on Confirmation of Debtors' First Amended Joint Plan of Reorganization as Twice Modified ("Memorandum Opinion") concurrently with its Findings of Fact and Conclusions of Law for Hearing on Confirmation of Debtors' First Amended Joint Plan of Reorganization as Twice Modified ("Findings and Conclusions").[8] The court found *959 that it would confirm the Plan if the Debtors made some nonmaterial modifications to it. The court subsequently approved the Debtors' nonmaterial alterations to the Plan.[9] On December 17, 1993, the court entered Order No. 164 Confirming Debtors' First Amended Joint Plan of Reorganization As Twice Modified ("Confirmation Order").[10] The court then entered its Amended Findings of Fact and Conclusions of Law for Hearing on Confirmation of Debtors' First Amended Joint Plan of Reorganization as Twice Modified ("Amended Findings and Conclusions").[11] Neither the Plan, Confirmation Order, Memorandum Opinion, or the Amended Findings and Conclusions made any reference to the Limited Release or the Limited Release Motion.
In compliance with the court's earlier request, the Official Bondholders' Committee then filed a brief addressing the history of creditor committees. The Unofficial 13½% Noteholders' Committee responded and the Official Bondholders' Committee filed a reply to the response.
The court takes judicial notice of the fact that appeals were filed from two court orders denominated as Orders No. 153 and 164. The Confirmation Order (No. 164) overruled the objections of the Unofficial 13½ % Noteholders' Committee to the Plan and its confirmation. Order No. 164 encompassed Order No. 153 which resolved the issue of subordination among the different levels of public debt of Envirodyne Industries, Inc. Both the District Court[12] and the Seventh Circuit[13] have affirmed Orders 153 and 164. The Seventh Circuit notes that the Plan was effectuated on December 31, 1993.
Subsequent thereto, the Official Bondholders' Committee has moved for an order discharging it, its members and its professionals. On August 17 1994, this court entered Order 213 disbanding the committee and discharging its members from their collective fiduciary duties.
II. Discussion
The Official Bondholders' Committee asserts that its motion merely seeks a release for its members and professionals for their work in connection with the committee, except for any such acts or omissions that are considered "willful misconduct," and that the Limited Release Motion merely seeks a "comfort order" in that it articulates the qualified immunity that the courts already recognize for official committees, its members, and retained professionals. Further, it argues that the history of official committees supports the issuing of the Limited Release and that these factors negate the need for expansive notice of the Motion. The Debtors' joinder seeks to extend the Limited Release to the Official Trade Creditors' Committee and its professionals and additionally, seeks an order discharging the Official Bondholders' Committee. Both believe that the *960 "willful misconduct" standard of liability is appropriate for official committees.
The issues raised by the parties responding to the Limited Release Motion are summarized as follows:
The U.S. Trustee has expressed three concerns regarding the Limited Release Motion: (1) whether it is appropriate for the court to exercise its jurisdiction in this matter; (2) whether the notice given for the motion was sufficient; and (3) whether the "willful misconduct" standard is the appropriate standard of qualified immunity.
The Securities & Exchange Commission expressed its reservations about the Limited Release by suggesting that Bankruptcy Code section 1125(e) requires a narrower release than is proposed.
In outright opposition to the Limited Release Motion, the Unofficial 13½% Noteholders' Committee argues that: (1) the Limited Release Motion should be denied as moot, (2) this court may not have any jurisdiction to retain with regard to a suit against members of an official committee, (3) the Limited Release binds non-consenting creditors in violation of the law of the Seventh Circuit, and (4) the Limited Release acts to divest another court of its jurisdiction.
A. Jurisdiction of the Bankruptcy Court to consider the Limited Release Motion.
A bankruptcy court has the power to determine the legality of a release incorporated into a reorganization plan. In re Specialty Equipment Companies, Inc., 3 F.3d 1043, 1045 (7th Cir.1993); see also In re Energy Cooperative, Inc., 886 F.2d 921, 930 (7th Cir.1989); 28 U.S.C. § 157(b)(2)(L). However, the proposed release provision before the court was not part of a proposed reorganization plan. Nevertheless, the court has jurisdiction over the Limited Release Motion as it involves matters relating to the confirmation of a plan and the administration of the bankruptcy estate. See 28 U.S.C. § 157(b)(2)(A), (L). Further, the Limited Release Motion is a core matter because it is a provision that was sought to be included in a confirmation order. See Diamond Mortgage Corp. of Ill. v. Sugar, 913 F.2d 1233, 1239 (7th Cir.1990) (stating that a proceeding is core if it invokes a substantive right provided by Title 11 or if it is a proceeding that, by its nature, could only arise in the context of a bankruptcy case), cert. denied, 498 U.S. 1089, 111 S. Ct. 968, 112 L. Ed. 2d 1054 (1991). The alternative relief sought by the Official Bondholders' Committee involves the question of the court's retaining jurisdiction over actions filed against members of an official committee as a result of their actions as committee members. Therefore, the Limited Release Motion is a matter relating to the confirmation of a plan and the administration of the estate over which this court has core jurisdiction.
B. Mootness of Limited Release Motion.
In objecting to the Limited Release Motion, the Unofficial 13½% Noteholders' Committee argues that the Limited Release Motion is moot because no relief is available. It asserts that because the confirmation order has been entered, all the court can do at this date is to issue a declaration of immunity. They further assert that this declaration would be improper, as it amounts to a declaratory judgment and declaratory judgments require the filing of adversary proceedings. The Official Bondholders' Committee sought its release by motion.
Any matter that is disputed and not specifically listed under one of the types of adversary proceedings under Fed.R.Bankr.P. 7001 falls under the catch-all term "contested matter." See Fed.R.Bankr.P. 9014; Fed. R.Bankr.P. 9014 Advisory Committee Note (1983) ("Whenever there is an actual dispute, other than an adversary proceeding, before the bankruptcy court, the litigation to resolve that dispute is a contested matter"). A contested matter differs from an adversary proceeding in that it is instituted by a motion, rather than a complaint. Compare Fed. R.Bankr.P. 9014 with Fed.R.Bankr.P. 7001.
It is correct that the court cannot issue a binding declaratory judgment with regard to any of the proceedings listed under Rule 7001 without conducting an adversary proceeding. See Fed.R.Bankr.P. 7001(1)(10). *961 However, the Limited Release Motion does not fall within the scope of Rule 7001.
The court does not interpret the Limited Release Motion as asking it to issue a declaratory judgment. Instead, the form of the Limited Release Motion is one that asks this court to issue an order causing the creditors to release their claims against parties other than the Debtors, being the Released Parties. The substantive purpose of the Limited Release is to have this court issue an order stating what the standard of liability is for the Released Parties with regard to a suit filed against them in conjunction with this bankruptcy case. The validity and effect of such an order is another matter. Therefore, the mere fact that the movants and the court have not treated this matter as an adversary proceeding under Part VII of Federal Rules of Bankruptcy Procedure does not warrant the denial of the Motion.[14]
The movants' request that the Intended Release be incorporated into the Confirmation Order does not act to make the Limited Release Motion moot. Although the court has already issued the Confirmation Order (Order No. 164), the court could, in theory, provide some relief on the Limited Release Motion. A matter is considered moot when a court is unable to fashion a form of relief that would be of benefit to the party seeking it. See Church of Scientology v. United States, ___ U.S. ___, ___, 113 S. Ct. 447, 449, 121 L. Ed. 2d 313 (1992). If partial relief is at least possible, then the matter is not considered moot. See Envirodyne, 29 F.3d at 303; but see In re Andreuccetti, 975 F.2d 413, 418 (7th Cir.1992) (stating that mootness involves an individualized assessment to determine if judicial relief is available as a practical matter). In theory, the court could issue an order releasing the Released Parties or declaring what the standard of liability is for acts taken by the Released Parties in conjunction with this bankruptcy case. The court may also be able to amend its confirmation order to include the Limited Release. However, the propriety and effect of such actions are another matter and addressed elsewhere. Certainly, the alternative relief requested by the Limited Release Motion the retention of jurisdiction over any claims, rights or causes of action asserted against the Released Parties for acts or omissions related to their individual or collective failures to act during the Debtors' bankruptcy cases and if necessary, the liquidation of such claims, is not moot. These bankruptcy cases have not been closed and the court may consider whether such relief is warranted and the proper. The conceivable availability of some form of relief allows the court to consider the merits of the Limited Release Motion.
The Seventh Circuit recognizes that, in theory, a plan of reorganization, even one that has been consummated, can be disturbed under some circumstances. See Envirodyne, 29 F.3d at 303; In re UNR, Inc., 20 F.3d 766, 769 (7th Cir.), cert. denied, ___ U.S. ___, 115 S. Ct. 509, 130 L. Ed. 2d 416 (1994) (No. 94-366). What those circumstances are is a different inquiry than one of mootness. That is, after deciding that a party is entitled some form of relief, the court must ask whether it should use its equitable powers to grant that relief. See Envirodyne, 29 F.3d at 304. Until the Seventh Circuit rejected the term, this concept was called "equitable mootness." Id.; UNR, 20 F.3d at 768. (J. Easterbrook) (banishing the use of the term "equitable mootness" because its title is a misnomer). In the reorganization context, the equity inquiry focuses on whether it would be prudent for a court to modify an implemented plan when that modification will affect third parties. See Envirodyne, 29 F.3d at 304 (stating that if the modification of an implemented plan would unduly bear on the legitimate expectations of innocent third parties, such modification may be refused); UNR, 20 F.3d at 769 (stating that the term "equitable mootness" really involves the question of whether it is prudent to upset a plan of reorganization as *962 opposed to the mootness analysis of whether there still exists the ability by the court to provide some form of relief). Because the merits of the Limited Release Motion would not cause the court to issue an order amending its Confirmation Order, it need not decide whether such action would be equitable.
C. Propriety of Notice.
The Official Bondholders' Committee gave notice of the Limited Release Motion to those listed on the service list for the confirmation hearing. It did not give notice of the Limited Release Motion to all of the creditors of Envirodyne or even to all of the Official Bondholders' Committee's constituents. At one point, the court questioned in open court whether the Official Bondholders' Committee wished to serve additional parties with notice of the motion. It responded that notice was adequate and that it would stand on the notice already given.
In the case of the Limited Release Motion, those affected by it should have been given notice and an opportunity to be heard. See Fed.R.Bankr.P. 9014 (stating that reasonable notice and an opportunity for hearing must be afforded to the party against whom relief is being sought). The Official Bondholders' Committee should have served the Limited Release Motion on all the parties it sought to bind, which are purported to be "any creditor or equity security holder of the Debtors." See Fed.R.Bankr.P. 9014. The Official Committee's failure to give notice to these parties warrants the denial of the Limited Release Motion.
Additionally, since the Limited Release is fashioned as a release by creditors of parties other than the Debtor, then the creditors should have been given, at the onset, the opportunity to vote on the Limited Release as part of the plan acceptance process. The mere fact that the Limited Release was sought to have been incorporated into the confirmation order is one of form not substance amending the confirmation order in this manner has the effect of amending the Plan, which would trigger the amendment procedures. The Limited Release could have been proposed as a term of the proposed reorganization plan and addressed in an approved disclosure statement. The Limited Release would then bind those creditors specifically voting for the relief. See Specialty Equipment, 3 F.3d at 1047.[15]
In their briefs, the Official Bondholders' Committee asserted that the Limited Release conforms with the standard of liability already adopted by the courts with regard to suits against official committees. They argue that the Limited Release is a "comfort order" giving them what they already have and that this acts to negate the need for expansive notice. Even if the Limited Release was a comfort order, this does not negate the need for notice. The Official Bondholders' Committee is free to assert what the proper standard of liability at the time it is sued and in front of the court hearing the suit. See, e.g., Luedke v. Delta Air Lines, Inc., 159 B.R. 385, 387-89 (S.D.N.Y.1993) (analyzing qualified immunity as an affirmative defense to a suit against official committee members); In re Tucker Freight Lines, Inc., 62 B.R. 213, 215, 218 (Bankr.W.D.Mich.1986) (denying committee members' motion for summary judgment on the issue of immunity and leaving such issue for final resolution in the District Court in which the suit was initiated). It would not be proper for this court issue a binding order declaring a standard of liability when the parties that would be affected by such an order have not been given proper notice nor an opportunity to be heard. What the proper standard of qualified immunity should be is therefore left for another day.
D. Propriety of a Post-Confirmation Order Imposing a Release.
A proposed reorganization plan may contain a release as part of its provisions. See Specialty Equipment, 3 F.3d at 1047; Energy Cooperative, 886 F.2d at 930. Such releases are proper if they are consensual and non-coercive. Specialty Equipment, 3 F.3d at 1047 (citing In re AOV Industries, Inc., 792 F.2d 1140, 1145 (D.C.Cir.1986); In re Monroe Well Service, *963 Inc., 80 B.R. 324 (Bankr.E.D.Pa.1987)). These releases are interpreted as binding only those creditors voting in favor of the plan. Specialty Equipment, 3 F.3d at 1046. However, the Official Bondholders' Committee did not propose to include the Limited Release as part of the reorganization plan. Instead, they sought to include the Limited Release as part of a confirmation order and then later as a post-confirmation order.
That distinguishes this case with those cited by the Official Committee. In published opinions where releases have been issued, the plan acceptance process has been followed and the releases were treated as a provision of the proposed plan, binding only those who voted in favor of the plan. See In re Boston Harbor Marina, 157 B.R. 726, 730-31 (Bankr.D.Mass.1993) (release is limited to the creditors who accept the plan provision containing the release); In re Apex Oil Co., 118 B.R. 683, 701 (Bankr.E.D.Mo.1990); In re Orlando Investors, L.P., 103 B.R. 593, 597 (Bankr.E.D.Pa.1989). The Official Committee did not cite, nor could the court locate, any cases in which nonconsenting creditors were bound by a release provision in the plan.
The Official Committee has cited several bankruptcies where court orders confirming plans have provided for the release and/or indemnification of committee members. However, these bankruptcy cases apparently involve unpublished decisions. Besides lacking copies of the actual confirmation orders, the court is unaware of the history of these cases and the reasoning behind the issuing of such orders.
Besides circumventing the whole plan approval process and the limiting language of the Seventh Circuit in its Specialty Equipment opinion, 3 F.3d 1043, the court can see no practical difference between issuing the release as part of a confirmation order and the incorporation of the provisions into a proposed reorganization plan. The uneasiness the court has with the Limited Release is exacerbated by the fact that Plan has been confirmed and the Confirmation Order has already been issued. The Confirmation Order would have to be amended to incorporate the Limited Release or more correctly, the reorganization Plan amended and put out for approval. This possible modification is further complicated by the fact that the Plan has been substantially consummated.
As stated in its mootness discussion above, the Seventh Circuit recognizes that in certain special circumstances, a court may modify a consummated reorganization plan. See Envirodyne, 29 F.3d at 302; UNR, 20 F.3d at 769. The court interprets this power as deriving from its equitable power to modify its confirmation order and, in effect, modify the plan. However, the court is not yet aware of the special circumstances necessary for it to use this power. Because the court decides that the lack of notice given on the Limited Release Motion and the method by which the movants sought to impose the Limited Release warrants the denial of their motion, the court denies the Motion on its merits. It need not decide whether special circumstances are present here so as to allow it to modify the Confirmation Order.
E. Retention of Jurisdiction.
Order No. 164 provides that the Official Bondholders' Committee and the Official Trade Committee will continue to exist until the court orders otherwise. Order No. 164 at 12. Further, the order retains jurisdiction to allow the court to enter a final decree closing the bankruptcy cases. Order No. 164 at 3. Although the court has since discharged the Official Bondholders' Committee, it retains jurisdiction over the Limited Release Motion as well as all other matters related to the administration of the estate. 28 U.S.C. § 157(b)(2)(A). This provision, along with 11 U.S.C. § 105,[16] allows the court to retain its jurisdiction in this case and consider the Limited Release Motion. Further, in accordance with the Confirmation Order, it retains jurisdiction of the Official Bondholders' Committee.
*964 Finally, under the Bankruptcy Code, the court has jurisdiction over the acts of official committee members in conjunction with their status as committee members. Although neither counsel nor the court have located a cow case (one on all fours), it is the court's opinion that its jurisdiction over committee members is similar to that it has over trustees. In re Elegant Equine, Inc., 155 B.R. 189 (N.D.Ill.1993) (adversary proceeding against the former Chapter 11 trustee for his alleged breach of fiduciary duty in connection with the sale of assets of the estate was a core proceeding); In re American Solar King, 142 B.R. 772 (Bankr.W.D.Tex.1992) (suit alleging misconduct of trustee in administering the debtor's estate was a core proceeding). Both trustees and official committees are the creation of the Code and their duties are governed under the Code. See §§ 1102-1104, 1106. In addition, both trustees and members of official committees owe fiduciary duties to their respective constituencies. In re Marchiando, 13 F.3d 1111, 1115 (7th Cir.) ("the high standard of loyalty and care that the law imposes on [bankruptcy] trustees is encapsulated in the term `fiduciary duty.'"), cert. denied sub nom., Illinois Department of Lottery v. Marchiando, ___ U.S. ___, 114 S. Ct. 2675, 129 L. Ed. 2d 810 (1994); In re L.F. Rothschild Holdings, Inc., 163 B.R. 45, 49 (S.D.N.Y.1994) (section 1103 implies a fiduciary duty to committee members); In re Drexel Lambert Group, Inc., 138 B.R. 717, 720 (Bankr.S.D.N.Y.) (same), aff'd, 140 B.R. 347 (S.D.N.Y.1992). Accordingly, if the bankruptcy court has jurisdiction in actions against a trustee for its improper actions in connection with administering the estate, then it must also have jurisdiction over actions alleging improper actions taken by members of an official committee. Whether that jurisdiction is exclusive is another matter. In the first instance, it is the court which receives a suit against official committee members for such actions or inactions which must answer that question.
III. Conclusion
For the reasons stated above, the court concurs with the Official Bondholders' Committee that it has core jurisdiction to hear the Limited Release Motion and that the matters presented in it are not moot. Notwithstanding this, the court denies the Official Bondholders' Committee's Limited Release Motion as well as the release proposed by the Debtors in their joinder thereto. The Limited Release was not included as part of the Plan and the creditors that would be bound by the release were not given proper notice nor an opportunity to accept or reject the proposed relief.
With respect to the actions taken by members of the Official Bondholders' Committee in their capacity as Committee members, to the extent such actions were improper and an action is brought, this court would have core jurisdiction over such matters. If and when such an action is brought, is time enough for the court to determine what the standard of qualified immunity is for the members of the committee.
NOTES
[1] On November 8th, the Debtors orally stated that they joined in the motion. See the November 8, 1993 Transcript of the Proceedings at 10.
[2] Subsequent to the filing of the Limited Release Motion, venue for the lawsuit was changed to the Northern District of Illinois and then voluntarily dismissed. The dismissal occurred before an answer was filed, so the parties agree that, in theory, the suit could be brought again until the period prescribed by the appropriate statute of limitations expires.
[3] Unless otherwise indicated, all section references are to the Bankruptcy Code (codified in 11 U.S.C.).
Section 1127(a) provides, in relevant part, that "the proponent of a plan may modify such plan at any time before confirmation, but may not modify such plan so that such plan as modified fails to meet the requirements of sections 1122 and 1123 of this title." Section 1127(c) provides that "the proponent of a modification shall comply with section 1125 of this title with respect to the plan as modified."
Section 1125(c) requires that an approved disclosure statement and a copy of the proposed plan or a summary of such plan be submitted to an holder of a claim before that holder's acceptance or rejection of a proposed plan is solicited. Hence, modifying the plan to include the Limited Release would have necessitated the sending of an approved supplement to the disclosure statement to those affected by the Limited Release. Since the Limited Release seeks a waiver from "all creditors," all of the creditors of record would have to have been re-solicited.
[4] As discussed below, the court finds that the Limited Release affects all of the creditors of Envirodyne and that the Limited Release, as written, should have been part of the proposed Plan of reorganization for disclosure and voting purposes.
[5] As discussed below, the court also has serious reservations about the notice given for the Limited Release Motion.
[6] Hereinafter, the proposed orders seeking to release the official committees, their members, and their professionals are referred to as the "Limited Release." The parties sought to be released are generally referred to as the "Released Parties." The term "Limited Release Motion" is deemed to also include the relief sought in the Debtors' joinder.
[7] The SEC did not file any formal response to the Limited Release Motion.
[8] See In re Envirodyne Industries, Inc., et al. (Memorandum Opinion for Hearing on Confirmation of Debtors' First Amended Plan of Reorganization as Twice Modified), 1993 WL 566566 (Bankr.N.D.Ill. Dec. 13, 1993); In re Envirodyne Industries, Inc. (Findings of Fact and Conclusions of Law for Hearing on Confirmation of Debtors' First Amended Joint Plan of Reorganization as Twice Modified), Docket Under Case No. 93 B 319 (Bankr.N.D.Ill. Dec. 13, 1993) (Docket Entry No. 811).
[9] See In re Envirodyne Industries, Inc. (Order No. 160 Authorizing Certain Modifications To Debtors' First Amended Joint Plan of Reorganization as Twice Modified), Docket Under Case No. 93 B 319 (Bankr.N.D.Ill. Dec. 15, 1993) (Docket Entry No. 818).
[10] In re Envirodyne Industries, Inc. (Order No. 164 Confirming Debtors' First Amended Joint Plan of Reorganization as Twice Modified), Docket under Case No. 93 B 319 (Bankr.N.D.Ill. December 17, 1993) (Docket Entry No. 824).
[11] See In re Envirodyne Industries, Inc., et al. (Amended Findings of Fact and Conclusions of Law for Hearing on Confirmation of Debtors' First Amended Plan of Reorganization as Twice Modified), 1993 WL 566565 (Bankr.N.D.Ill. Dec. 20, 1993).
[12] See Unofficial Committee of 13.5% Noteholders of Envirodyne Industries, Inc. v. Envirodyne Industries, Inc. (In re Envirodyne Industries, Inc.), No. 93 C 7680 (N.D.Ill. December 28, 1993 (J. Holderman)) (affirming Orders No. 153 and 164); see also Unofficial Committee of 13½% Noteholders of Envirodyne Industries, Inc. v. Envirodyne Industries, Inc. (In re Envirodyne Industries, Inc.), No. 93-CV-7502 (N.D.Ill. December 22, 1993 (J. Alesia)) (dismissing the appeal of Order No. 153 as moot in light of the concurrent appeal of Order No. 164 before J. Holderman).
[13] In re Envirodyne Industries, Inc., 29 F.3d 301 (7th Cir.1994).
[14] Even if the Limited Release were considered a declaratory judgment, this does not mean that an adversary proceeding would have been required, as Fed.R.Bankr.P. 7001 does not define all proceedings seeking declaratory judgments as being adversary proceedings. Only proceedings seeking a declaratory judgment with respect to the other types of proceedings listed in rule 7001 are automatically subject to Part VII of the Federal Bankruptcy Rules.
[15] The court further addresses the proper method of instituting a non-debtor release in its discussion of the propriety of a post-confirmation order imposing a release. See infra part D.
[16] Section 105 provides that the court may issue any order that is necessary or appropriate to carry out the provisions of the Bankruptcy Code. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2005973/ | 381 F. Supp. 503 (1974)
Richard IVY, Petitioner,
v.
STATE OF ALABAMA, Respondent.
Civ. A. No. 74-324-H.
United States District Court, S. D. Alabama, S. D.
September 12, 1974.
*504 Richard Ivy, pro se.
Charles N. Parnell, III, Asst. Atty. Gen., Montgomery, Ala., for respondent.
ORDER
HAND, District Judge.
The petitioner, Richard Ivy, a State prisoner at No. 4 Honor Camp, Montgomery, Alabama, filed on August 5, 1974 a petition for Writ of Habeas Corpus pursuant to Title 28, U.S.C., Section 2254. Respondent, State of Alabama, filed on September 10, 1974 its return and answer with exhibits in support thereof.
Upon consideration of the pleadings, exhibits and the law, the Court finds that the petitioner, Richard Ivy, was convicted in the State Court of Alabama and sentenced to three (3) years on October 27, 1972. He was subsequently paroled on October 29, 1973. On February 1, 1974 the petitioner was declared delinquent. On March 1, 1974 he was recaptured and placed in custody pursuant to a parole violation warrant. Thereafter a parole revocation hearing was conducted on March 19, 1974 and a decision rendered in regard thereto on April 2, 1974, which said decision revoked the parole.
By State law the time spent on parole is credited to one's prison term. Summers v. State, 31 Ala.App. 264, 15 So. 2d 500. Such was done in petitioner's case. However, once a parolee is declared delinquent he is no longer serving his sentence in any capacity. Anderson v. Corall, 263 U.S. 193, 44 S. Ct. 43, 68 L. Ed. 247.
Title 42, Section 12, Code of Alabama, 1940, requires that time owed by a parolee on his sentence shall be computed from the date of delinquency. The issue now narrows as to when does the time begin to run again on the sentence. The respondent, State of Alabama, would have the Court hold that the time begins to run from the date the decision revoking the parole is rendered.
Before this question can be answered the Court must first decide if it has the authority to issue this Writ of Habeas Corpus.
Title 28, U.S.C., Section 2254 granted the District Court authority to entertain an application for a Writ of Habeas Corpus only on the ground that petitioner is in custody in violation of the Constitution or laws or treaties of the United States.
In 1966 Congress passed legislation requiring that a federal convict shall be given credit toward the service of his sentence for any days spent in custody in connection with the offense or acts for which the sentence was imposed. 18 U. S.C., Section 3568. Such credit was not viewed as an absolute Constitutional right, for if it was, there would have been no necessity for the legislation. See Cobb v. Bailey, 5 Cir., 469 F.2d 1068.
The State contends that if a parole revocation hearing is required, a parolee can endure a reasonable period of confinement awaiting determination of his delinquency without receiving credit for said period of confinement on his sentence. We agree. This action does not reach Constitutional proportions. It is only when an unreasonable delay occurs between the date of respondent obtaining custody and control over parolee and the date of parole revocation decision that a claim may become cognizable on a federal Writ of Habeas Corpus. There was no unreasonable delay in this incident; therefore, it is
Ordered, adjudged and decreed that this cause stands dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1688482/ | 476 So. 2d 896 (1985)
Fredrick DUNCAN, Plaintiff-Appellant,
v.
Rosa Nabors GORDON, Defendant-Appellee.
No. 17193-CA.
Court of Appeal of Louisiana, Second Circuit.
September 25, 1985.
William E. Armstrong, Monroe, for plaintiff-appellant.
Sharp & Sharp, by James Sharp, Jr., Monroe, for defendant-appellee.
Before JASPER E. JONES, FRED W. JONES, Jr. and SEXTON, JJ.
SEXTON, Judge.
Plaintiff appeals a trial court judgment rejecting his demands in a suit to rescind a written fifty percent contingency fee contract entered into with the defendant. Finding merit in plaintiff's contention that the defendant engaged in the unauthorized practice of law, we reverse.
The record reveals that on June 1, 1984, plaintiff, who was then 19 years old, was a passenger in an automobile driven by Patrick Nabors and owned by Emmit Nabors. The evidence shows that the abovementioned vehicle was on Winnsboro Road in Monroe, Louisiana making a left turn when it was struck in the rear by a vehicle driven by Billy Cage and owned by Israel Cage. Plaintiff suffered injuries to his back as a result of this accident.
*897 Plaintiff and Patrick Nabors were good friends, and the defendant, Rosa Nabors Gordon, was Patrick Nabors' sister. By virtue of this relationship, defendant had knowledge of the accident on the day of its occurrence. On that day she advised the plaintiff, Patrick, and Yolanda Pollard, the other occupant in the Nabors' vehicle to go see a doctor the next day to determine whether or not they were injured. That evening plaintiff and defendant agreed that the defendant would represent plaintiff in trying to obtain a settlement from Cage's insurer for the personal injuries which plaintiff suffered. The next day the defendant took the plaintiff to St. Francis Hospital to be examined.
On September 17, 1984, a written fifty percent contingency fee contract was executed and signed by the plaintiff and the defendant. The contract stated that defendant would represent plaintiff in negotiating a possible settlement with Cage's insurer for the injuries which plaintiff suffered in the June 1, 1984 automobile accident. In return for her services, defendant would receive fifty percent of any settlement received from the insurance company. At all times pertinent to this litigation, defendant was the owner of a construction company and not licensed to practice law.
Pursuant to this contract, defendant selected a doctor for plaintiff and she and her father drove plaintiff to this doctor on every appointment plaintiff had, except for one occasion when plaintiff walked to the doctor. The defendant contacted Marty Thompson, the insurance adjuster, on nine different occasions to conduct settlement negotiations on behalf of plaintiff. The insurance adjuster was under the mistaken belief that the defendant was conducting such negotiations because she was a relative of the plaintiff.
The negotiations between the defendant and the insurance adjuster resulted in plaintiff's claim ultimately being settled for $3,000. Upon receiving the settlement draft, defendant obtained plaintiff's endorsement thereon and deposited that draft into her construction company's account. After the draft cleared, defendant gave plaintiff $1,500 from which defendant deducted $100 for gas expenses resulting from transporting plaintiff to and from the doctor's office. Out of his portion of the settlement, plaintiff also paid $795.50 in medical expenses, leaving plaintiff with the sum of $604.50 out of the $3,000 settlement.
Plaintiff, being disgruntled with this disbursement, then filed the present suit seeking to have the contingency fee contract declared invalid on the basis that the contract was illegal and against the public policy of this state because the services rendered by the defendant constituted the unauthorized practice of law.
Subsequent to trial, the trial court rejected the plaintiff's demands and ruled in favor of the defendant. The court held that the contract was valid and did not constitute the unauthorized practice of law because at no time did the defendant ever hold herself out as an attorney at law. The trial court reasoned that the purpose of the statute precluding the unauthorized practice of law was to prevent persons who were not attorneys from holding themselves out as such.
Plaintiff initially contends on appeal that the trial court erred in holding that defendant was not engaged in the unauthorized practice of law, and therefore the contingency contract was illegal and against the public policy of this state.
It is unlawful for a natural person who has not been first duly and regularly licensed and admitted to practice law by the Supreme Court of this state, to engage in the practice of law in this state. LSA-R.S. 37:213. Any contracts made by a non-lawyer to render services in violation of this provision are for an unlawful cause. Consequently, they are against public policy and absolutely null. LSA-C.C. Arts. 1893, 1895.[*]Succession of Humes, 467 So. 2d 25 (La.App. 1st Cir.1985); Andrus v. *898 Guillot, 160 So. 2d 804 (La.App. 3d Cir. 1964); Meunier v. Bernich, 170 So. 567 (Orl.App.1936).
It is not disputed that the defendant is not licensed to practice law in Louisiana. Therefore, the issue to be resolved in this case is whether the services performed by the defendant pursuant to the contingency fee contract, i.e., representing plaintiff in his personal injury claim against Billy Cage, constitute the practice of law. If the services performed by defendant under the contract constitute the practice of law, then the contract between plaintiff and defendant is an absolute nullity because it is in contravention of LSA-R.S. 37:213.
The practice of law is defined in LSA-R.S. 37:212, as follows:
§ 212. "Practice of law" defined
A. The practice of law means and includes:
(1) In a representative capacity, the appearance as an advocate, or the drawing of papers, pleadings or documents, or the performance of any act in connection with pending or prospective proceedings before any court of record in this state; or
(2) For a consideration, reward, or pecuniary benefit, present or anticipated, direct or indirect;
(a) The advising or counseling of another as to secular law;
(b) In behalf of another, the drawing or procuring, or the assisting in the drawing or procuring of a paper, document, or instrument affecting or relating to secular rights;
(c) The doing of any act, in behalf of another, tending to obtain or secure for the other the prevention or the redress of a wrong or the enforcement or establishment of a right; or
(d) Certifying or giving opinions as to title to immovable property or any interest therein or as to the rank or priority or validity of a lien, privilege or mortgage as well as the preparation of acts of sale, mortgages, credit sales or any acts or other documents passing titles to or encumbering immovable property.
B. Nothing in this Section prohibits any person from attending to and caring for his own business, claims, or demands; or from preparing abstracts of title; or from insuring titles to property, movable or immovable, or an interest therein, or a privilege and encumbrance thereon, but every title insurance contract relating to immovable property must be based upon the certification or opinion of a licensed Louisiana attorney authorized to engage in the practice of law. Nothing in this Section prohibits any person from performing, as a notary public, any act necessary or incidental to the exercise of the powers and functions of the office of notary public, as those powers are delineated in Louisiana Revised Statutes of 1950, Title 35, Section 1, et seq.
C. Nothing in this Section shall prohibit any partnership, corporation, or other legal entity from asserting any claim, not exceeding twelve hundred dollars, or defense pertaining to an open account or promissory note, or suit for eviction of tenants on its own behalf in the courts of limited jurisdiction on its own behalf through a duly authorized partner, shareholder, officer, employee, or duly authorized agent or representative. No partnership, corporation, or other entity may assert any claim on behalf of another entity or any claim assigned to it.
The practice of law relates to the rendition of services for others that call for the professional judgment of a lawyer. The essence of the professional judgment of the lawyer is his educated ability to relate the general body and philosophy of law to a specific legal problem of a client. Model Code of Professional Responsibility, EC3-5 (1982).
Pursuant to the contract, defendant selected and took the plaintiff to the doctor who treated him and to the hospital; she conducted all negotiations with the insurance adjuster regarding the settlement of plaintiff's claim; she picked up the settlement draft and deposited it into her company's account; and she retained fifty percent of the plaintiff's settlement funds. In short, defendant, in return for compensation, *899 took all of the necessary steps in order for the plaintiff to obtain redress for the personal injuries he suffered.
Thus, in the performance of her contract, defendant had to advise plaintiff concerning the redress of a legal wrong. Defendant was not qualified to give this advice because she did not possess the legal training required by the Supreme Court of this state. By contracting to represent plaintiff in negotiating a settlement with the insurance company, defendant attempted to function as and perform the duties of a duly licensed attorney.
The only Louisiana case we have been able to locate directly dealing with the settling and adjusting of a personal injury claim by one who is not an attorney is the 1936 Orleans Appeals case of Meunier v. Bernich, supra. We agree with the Meunier court that such actions constitute the practice of law and likewise hold that by representing plaintiff in the negotiation and settlement of his personal injury claim for consideration pursuant to the contingency fee contract, Rosa Gordon engaged in the practice of law as defined by LSA-R.S. 37:212. Since the defendant was not authorized to practice law in this state, the contingency fee contract authorizing her to perform these services was in violation of LSA-R.S. 37:213. As such, the contingency fee contract between plaintiff and defendant is an absolute nullity.
The trial court, in its reasons for judgment, stated that the purpose of LSA-R.S. 37:213 was to prevent persons who are not lawyers from holding themselves out to the public as lawyers. While this statement by the trial court is correct, there is another equally important evil the statute was designed to prevent. That evil is to prevent laymen from rendering services to the public which only lawyers are qualified to render. It is only by preventing such conduct that the general public will be protected from laymen dabbling into areas in which they are incompetent. Thus, the fact that at no time did defendant ever hold herself out to be a lawyer does not mean that she did not engage in the unauthorized practice of law. The defendant rendered services which she was not competent to give, one of the evils the statute was designed to prevent. Therefore, this statute is applicable to the defendant's conduct.
In light of the ruling on plaintiff's first contention of error, it becomes unnecessary to discuss plaintiff's second contention that the fee was excessive. Also, appellant makes no issue before us of certain items of damages sought in the trial court and these are therefore not considered by us.
Thus, finding merit in plaintiff's initial contention, the judgment of the trial court is hereby reversed and we will render appropriate judgment in favor of the plaintiff. There should be judgment in favor of the plaintiff for the fifty percent fee charged by the defendant, $1,500, and for the $100 expenses deducted in furtherance of this illegal contract.
Accordingly, it is hereby ordered, adjudged and decreed that there be judgment herein in favor of the plaintiff, Fredrick Duncan, and against the defendant, Rosa Nabors Gordon, in the full sum of $1,600, together with legal interest from judicial demand, and for all costs of this litigation.
REVERSED AND RENDERED.
NOTES
[*] Act No. 331 of 1984 revised the Obligations articles of the Civil Code and Articles 1893 and 1895 are now designated as Articles 1966 and 1968, respectively. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1731245/ | 153 So. 2d 346 (1963)
Louis N. POKRESS, Appellant,
v.
TISCH FLORIDA PROPERTIES, INC., a Florida corporation, Americana Hotel, Inc., a Florida corporation, Americana Hotel Operating Corp., a Florida corporation, and Kratter corporation, a Delaware corporation, authorized to do business in the State of Florida, Appellees.
No. 62-532.
District Court of Appeal of Florida. Third District.
May 14, 1963.
Rehearing Denied June 7, 1963.
*347 Thomas A. Horkan, Jr., Miami, for appellant.
Williams, Salomon, Kenney & Lindzon, Miami, Kommel & Rogers, Miami Beach, for appellees.
Before PEARSON, TILLMAN, C.J., and CARROLL and HENDRY, JJ.
PEARSON, TILLMAN, Chief Judge.
The plaintiff, Louis N. Pokress, a registered real estate broker, brought suit against the several defendants claiming a real estate commission for the sale of certain property which he alleges the defendants, Tisch Florida Properties, Inc. and Americana Hotel, Inc., employed him to sell. A second count set forth that the plaintiff was deprived of his commission by the fraud and conspiracy of all the defendants, which had the effect of barring him from the negotiations for the sale which was thereafter completed. The trial judge dismissed the plaintiff's first complaint and then his amended complaint. This appeal followed.
The order dismissing appellant's first complaint was explicit as to the ground upon which it was entered:
"Basically, the Court is concerned with law which has been cited to it which stands for the proposition that where Co-Brokers are involved, the failure of one to be licensed in the state where the cause of action was pending *348 is fatal to the rights of all of them to recover; and the Court must treat the failure of the Plaintiff to allege that his Co-Brokers, whoever they were (in addition to the two mentioned in the complaint), were so licensed in Florida as equivalent to an allegation that they were not; or, at least, the failure of the complaint to contain such an allegation renders the complaint subject to the motion to dismiss for want of a material allegation, the averment and proof of which is essential to the Plaintiff's right to recover. The Court is of the opinion that such Doctrine of Law is sound and that it applies to and governs this case.
"In view of the Court's position, it becomes unnecessary to pass upon the numbers of other grounds urged by the Defendants other than the Defendant, KRATTER CORPORATION as to the insufficiency of the complaint and it likewise becomes unnecessary to rule upon the motion of such other Defendants for more definite statement."
Thereafter, the amended complaint was filed. The significant portions of the amended complaint are as follows:
* * * * * *
"Count I
* * * * * *
"3. During and prior to August, 1957, the Defendants, TISCH FLORIDA PROPERTIES, INC., and AMERICANA HOTEL, INC., acting through their President and principal officer, Laurence A. Tisch, employed the Plaintiff to effect a sale of the AMERICANA HOTEL property and business on Miami Beach, Florida, on certain terms and conditions, which terms and conditions included a lease back to the sellers or their nominees of the said property and business.
"4. Pursuant to such employment, and to both direct and implied authority thereunder, the Plaintiff employed the services, as subagents, of H. Michael Ryan, a licensed real estate broker in the State of Virginia, and C. Joshua Grossman, a licensed real estate broker in New York. The said H. Michael Ryan and C. Joshua Grossman were the only persons having anything to do with the matters alleged herein, who were not duly licensed real estate brokers or salesmen in the State of Florida.
"5. As a result of the combined efforts of the Plaintiff, and his said subagents, the Plaintiff effected a sale of the said AMERICANA HOTEL property and business to the Defendant, KRATTER CORPORATION, on the terms and conditions which had been offered by the Plaintiff pursuant to his said contract of employment.
* * * * * *
"Count II
* * * * * *
"10. Pursuant to such employment, the Plaintiff acting through the efforts of his co-brokers, including H. Michael Ryan and C. Joshua Grossman, offered the said property for sale to Marvin Kratter the President of the Defendant, KRATTER CORPORATION, and furnished to him certain information concerning the hotel, including the terms and conditions of the sale and lease-back arrangement. The said offering and furnishing of information to the said Marvin Kratter was made during the month of August, 1957. Thereafter, the aforesaid Laurence A. Tisch, and the aforesaid Marvin Kratter, acting in collusion and conspiracy to defraud the Plaintiff and his co-brokers of their commission, represented to the Plaintiff and his co-brokers that the Plaintiff was not authorized to offer the property for sale at any time in the future, that the property and business were not for sale, that the Defendant sellers and the Defendant KRATTER CORPORATION, *349 were not carrying on any negotiations for the sale and purchase of the said property and business. These representations were made for the purpose of inducing the Plaintiff and his subagents to abandon any and all efforts to further negotiate or deal with the said property and business, and to induce them to terminate and cease all negotiations between the Defendant sellers and the Defendant purchaser, and to thereby forfeit or abandon their just commission herein. These representations were false, in that the property actually was for sale, and that the Defendant sellers and the Defendant purchaser were actually carrying on secret negotiations for the sale of this property, together with a lease-back to the sellers, and were secretly negotiating and dealing between themselves in this connection, and in connection with making a public offering of stock in the Defendant, KRATTER CORPORATION. As a result of such negotiations and dealings, which were continuous, the parties entered into such a sale and leaseback of the property in February of 1960, the total purchase price being $15,900,000.00."
The court dismissed plaintiff's amended complaint without leave to amend and without indicating the ground or grounds upon which the dismissal was entered.
It appears that the controlling question involved is whether a Florida broker may recover for services rendered in the sale of property located in Florida when it affirmatively appears from the complaint that he, in turn, employed out-of-state brokers, licensed in their state but not licensed in the State of Florida, to assist him in finding a purchaser in the states in which they are licensed. The position of the appellant is that the Florida statutes do not contain a prohibition against a Florida broker using the services of duly licensed brokers in other states provided the services in the State of Florida are performed by the principal broker who is licensed here.
On the other hand, appellees maintain that § 475.01, Fla. Stat., F.S.A.,[1] taken into conjunction with § 475.41, Fla. Stat., F.S.A.,[2] prohibits payment of a commission *350 for a property sale in Florida in which brokers not licensed in the State of Florida have actively participated.
Counsel have been unable to cite a case in this jurisdiction bearing directly on this question. We think that the most helpful case is Wegmann v. Mannino, 253 F.2d 627 (5th Cir.1958), which originated in Florida. In that case the plaintiff entered into a contract with the defendants whereby the defendants were to purchase certain land, and the plaintiff "as agent" was to perform certain services for the owners. These services included the preparation of the land for sale and the responsibility for the operation and conduct of the business of selling the land. The plaintiff sued for his compensation. The district court dismissed plaintiff's complaint because the service required of him included acts which could be performed only by a registered broker, which plaintiff was not. In affirming the decision of the trial court, the circuit court held that the plaintiff's inability to recover was not changed by the fact that he had employed salesmen and brokers who were themselves legally licensed.
Even though the court in the Wegmann case denied the broker his commission, we think that the reasoning of that case centered on the capacity of the plaintiff to sue as determined by the position of the plaintiff himself. In the instant case, there is no question but that the plaintiff, Pokress, has the capacity to sue for a commission; and such right to sue would not be questioned if he were the only broker involved.
We are concerned here with the dual considerations of statutory interpretation and public policy. Appellees-defendants contend that to permit a broker who is licensed in this state to use the services of those outside the state who are unlicensed here would result in this state losing its ability to supervise persons performing brokerage services within its borders. It is thus argued that out-of-state brokers would be able to perform services here without responsibility under the Florida Real Estate License Law.
From a public policy standpoint, we do not think this situation requires the violent remedy suggested. It is not unusual under modern conditions for a seller and potential buyers to be separated by many miles and several states. To hold that a Florida real estate broker is barred from the assistance of his fellow brokers in other states would be to require Florida brokers to be limited and provincial in their scope. Public policy is best served by those interpretations of the law which stimulate rather than depress commerce. We, therefore, decline to follow the proposition urged by the appellees to the effect that public policy requires that the plaintiff be barred from recovery because he has used the services of brokers licensed in other states, but not licensed in Florida. Our conclusion is limited to the situation where the assisting brokers are licensed in the states in which their services are performed. We believe that we are supported by cases in several jurisdictions. See Philbrick v. Chase, 95 N.H. 82, 58 A.2d 317, 3 A.L.R. 2d 526 (1948); Folsom v. Young and Young, Inc., 216 F.2d 352 (5th Cir.1954).
In addition to what we have just stated regarding the public policy aspects of this situation, there is one other that commands our attention. In Bell v. United Farm Agency, Inc., 296 P.2d 149, 152 (Okla. 1956), the Supreme Court of Oklahoma had the following to say involving a real estate brokerage commission for a plaintiff not licensed in Oklahoma:
"* * * The obvious purpose of the Act in question was to protect the public from being forced to deal with dishonest or unscrupulous real estate operators, rather than to permit one party to gain an unconscionable advantage by avoiding a just obligation which he has contracted to pay."
Although involving a distinguishable factual situation, we find the above-quoted remarks appropriate to the situation here considered.
*351 We need now turn our attention to the applicable provisions of Chapter 475 of the Florida Statutes, F.S.A., which encompasses the real estate licensing laws of this state. Section 475.01(2) thereof sets forth those activities which are deemed to be those of a "real estate broker" and for which, consequently, a license is required. It could be argued that under the wording of this section (set forth in footnote 1 above) the activities for which a person is required to be registered as a real estate broker are only those which take place in this state. If this be the case, it would not be a violation under § 475.25(1) (f), as it existed prior to 1961, to pay a commission for securing a purchaser out of the state, nor would § 475.41 invalidate a contract for commission for such an act.[3]
Appellee, Kratter Corporation, maintains that in order for the appellant to succeed on the basis of the conspiracy alleged in Count Two of the complaint, he must first establish the cause of action on the contract set forth in Count One. Since we have determined that the first count is sufficient, we must consider appellees' further argument that the second count is deficient in that it fails to set forth sufficient facts to constitute an action for fraud and deceit.
We think that this objection is well taken; however, we hold that the plaintiff should not be precluded at this time from an effort to state a cause of action on this count. Therefore, the order dismissing the second count without leave to amend was error.
Ordinarily, appellate courts will not allow amendment where the file does not affirmatively show that the plaintiff requested leave to amend and was denied. In this case, it appears that the order of the trial court was based upon the ground of plaintiff's presumed incapacity to sue; therefore, we feel that the ends of justice require that the plaintiff be given an opportunity to amend his second count.
For the reasons stated, the order dismissing plaintiff's second amended complaint is reversed and the cause is remanded for further proceedings.
Reversed.
NOTES
[1] § 475.01 is in part as follows:
"(2) Every person who shall, in this state, for another, and for a compensation or valuable consideration directly or indirectly paid or promised, expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefor, appraise, auction, sell, exchange, buy or rent, or offer, attempt or agree to appraise, auction or negotiate the sale, exchange, purchase or rental of any real property, or any interest in or concerning the same, including mineral rights or leases; or who shall advertise or hold out to the public by any oral or printed solicitation or representation that such person is engaged in the business of appraising, auctioning, buying, selling, exchanging, leasing or renting real estate, or interests therein, including mineral rights or leases, of others; and every person who shall take any part in the procuring of sellers, purchasers, lessors or lessees of the real property, or interests therein, including mineral rights or leases, of another; or who shall direct or assist in the procuring of prospects, or the negotiation or closing of any transaction which does, or is calculated to, result in a sale, exchange, or leasing thereof, and who shall receive, expect, or be promised any compensation or valuable consideration, directly or indirectly therefor; and all persons who are members of partnerships or officers or directors of corporations engaged in performing any of the aforesaid acts or services; each and every such person shall be deemed and held to be a `real estate broker' or a `real estate salesman,' as hereinafter classified * * *."
[2] § 475.41 provides:
"475.41 Contracts of unregistered person for commissions invalid. No contract for a commission or compensation for any act or service enumerated in subsection (2) of § 475.01 shall be valid unless the broker or salesman shall have complied with this chapter in regard to registration and renewal of the certificate at the time the act or service was performed."
[3] It is to be noted that in 1961 (subsequent to all acts in question here) § 475.25 was amended to provide that "* * * a registered real estate broker of this state may pay a referral fee or share a real estate brokerage commission with a real estate broker duly licensed, or registered, under the laws of a foreign state so long as said foreign broker does not violate any law of this state." In this connection see Bell v. United Farm Agency, Inc., 296 P.2d 149 (Okla. 1956). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1747210/ | 953 F. Supp. 145 (1996)
Tony TILLMAN, Plaintiff,
v.
CITY OF WEST POINT, MISSISSIPPI, Defendant.
Civ. A. No. 1:95CV198-D-D.
United States District Court, N.D. Mississippi, Eastern Division.
September 10, 1996.
*146 Jim Waide, Tupelo, Mississippi, for Plaintiff.
Hal S. Spragins, Oxford, Mississippi, for Defendant.
MEMORANDUM OPINION
DAVIDSON, District Judge.
Presently before the court is the motion of the defendant for the entry of summary judgment on its behalf. Finding that the motion is well taken, the court shall grant the same.
I. FACTUAL BACKGROUND[1]
The plaintiff Tony Tillman was employed by the defendant City of West Point as a police officer from on or about May 5, 1987. The defendant West Point suspended him on or about May 16, 1995, and later terminated his employment on March 12, 1996. Both the suspension and termination apparently arise out of the plaintiff's friendship with Robert Rupert, who is currently serving a sentence in the Mississippi State penitentiary in Parchman, Mississippi. In 1994, the West Point police department began investigating Rupert as a potential suspect in the murder of local man, Carlos Carr. The investigating officers were also aware of Tillman's friendship with Rupert.
In August of 1994, West Point police chief Bill Ladd asked Tillman to take a polygraph examination concerning Tillman's relationship with Rupert. Tillman initially agreed, but upon advice of counsel later refused to take the exam unless it was administered by persons outside of the West Point police department. The investigation of Rupert and his association with Tillman continued.
*147 On May 9, 1995, Chief Ladd suspended Tillman without pay "based upon the status of the current internal investigation," and informed Tillman that a recommendation would be made to the West Point Board of Selectmen to terminate his employment with the city. A related hearing was set for May 16, 1995. Tillman employed counsel, who appeared at the meeting on his behalf. At this hearing, the Board entered an executive session to discuss the matter, and heard from Chief Ladd, the plaintiff and his counsel. Plaintiff's counsel objected to the board entering executive session to hear the request, and asked that the meeting remain open. The board remained in executive session, and did not take any formal action on the request at this hearing. An article concerning this portion of the board meeting subsequently appeared in the local paper. Officer called before board, DAILY TIMES LEADER (West Point, Mississippi), May 18, 1995, at 1.
The plaintiff subsequently took a polygraph examination in June of 1995. A report of the examination was submitted to the city in August of 1995. It was the opinion of the examiner that the plaintiff was deceptive with regard to his negative answers to questions concerning involvement in drug dealing in West Point and in the murder of Carlos Carr. In February of 1996, the plaintiff was informed by letter that his discharge from the police department would be recommended to the board, and that the recommendation would be heard by the board at the next regularly scheduled meeting on March 12, 1996. Tillman appeared at the March 12 meeting without counsel, and after being asked if he had anything to say, responded that he did not.[2] The board of selectmen then voted unanimously to terminate the plaintiffs employment. This action followed.
II. SUMMARY JUDGMENT STANDARD
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 a judgment as a matter of law." F.R.C.P. 56(c). The party seeking summary judgment carries the burden of demonstrating that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Once a properly supported motion for summary judgment is presented, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986); Brothers v. Klevenhagen, 28 F.3d 452, 455 (5th Cir.1994). "Where the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986); Federal Sav. & Loan Ins. v. Kralj, 968 F.2d 500, 503 (5th Cir.1992). The facts are reviewed drawing all reasonable inferences in favor of the party opposing the motion. Matagorda County v. Russell Law, 19 F.3d 215, 217 (5th Cir.1994).
III. THE PLAINTIFF'S CLAIMS
A. DEPRIVATION OF PROCEDURAL DUE PROCESS
An individual's "right to hold specific private employment and to follow a chosen profession free from government interference comes within the `liberty' and `property' concepts of the Fifth Amendment." Vander Zee v. Reno, 73 F.3d 1365, 1370 (5th Cir.1996) (quoting Greene v. McElroy, 360 U.S. 474, 492, 79 S. Ct. 1400, 1411, 3 L. Ed. 2d 1377 (1959)); see also Meyer v. Nebraska, 262 U.S. 390, 399, 43 S. Ct. 625, 626, 67 L. Ed. 1042 (1923) (noting "liberty" within the meaning of Fourteenth Amendment "denotes not merely the freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life ..."). However, mere injury to reputation or the impairment of future *148 employment prospects fails to independently state constitutionally cognizable claims. Siegert v. Gilley, 500 U.S. 226, 233-34, 111 S. Ct. 1789, 1793-94, 114 L. Ed. 2d 277 (1991); State of Texas v. Thompson, 70 F.3d 390, 392 (5th Cir.1995). When interrelated, however, they can in tandem create a claim:
[D]amage to an individual's reputation as a result of defamatory statements made by a state actor, accompanied by an infringement of some other interest, is actionable under § 1983.
Thompson, 70 F.3d at 392 (citing Paul v. Davis, 424 U.S. 693, 710-12, 96 S. Ct. 1155, 1164-66, 47 L. Ed. 2d 405 (1976)). In this case, the plaintiff claims that he was denied a meaningful name-clearing hearing in violation of this due process right to pursue his chosen profession. In order to establish his claim, Mr. Tillman must prove all of the following elements:
1) that he was discharged;
2) that defamatory charges were made against him in connection with the discharge;
3) that the charges were made public;
4) that the charges were false;
5) that he requested a name-clearing hearing in which to clear his name;
6) that the request was denied; and
7) that no meaningful public hearing was conducted before the discharge.
Gillum v. City of Kerrville, 3 F.3d 117, 121 (5th Cir.1993); Arrington v. County of Dallas, 970 F.2d 1441, 1447 (5th Cir.1992); Rosenstein v. City of Dallas, 876 F.2d 392 (5th Cir.1989). The parties do not dispute that the plaintiff was discharged in this case, but it appears that the parties' agreement ends there.
1. THE FALSITY OF THE CHARGES
The plaintiff claims that false charges were made against him in two respects. First, he claims that false statements were made against him in a newspaper article concerning his suspension hearing of May 16, 1995. Particularly, the plaintiff directs the court to the first sentence of the article, which reads "[a] West Point police officer has been charged with violating departmental procedures by associating with a known criminal and refusing a polygraph." Exhibit "F" to the Plaintiff's Response, Officer called before board, DAILY TIMES LEADER (West Point, Mississippi), May 18, 1995, at 1. The article goes on to identify that officer as the plaintiff. This statement cannot serve as a basis to entitle the plaintiff to a name-clearing hearing, as the plaintiff does not dispute that it is true. After looking to the evidence before the court, it appears without serious doubt that the City of West Point did in fact make these charges against the plaintiff. See, e.g., Exhibit "C" to the Plaintiff's Response, Letter from Bill Ladd; Exhibit "E" to the Plaintiff's Response, Transcript of the May 16, 1995 Hearing. The plaintiff does indeed dispute the veracity of the charges themselves, but the newspaper article does not state that the charges are accurate. Rather, it only states that the plaintiff has been charged with certain conduct. As there is no genuine issue of material fact as to the truth of this statement, it cannot serve as a "false and defamatory charge" which would entitle the plaintiff to a name-clearing hearing.
2. WERE THE REMAINING CHARGES DEFAMATORY?
Secondly, the plaintiff asserts that numerous defamatory statements were made against him by two law enforcement investigators, Bill Gibson and Larry Butler. Before the court are affidavits from three individuals Willie Harris, Tiffany Jefferson and J.J. McFarland. Each of the affiants state that they were questioned by Gibson and Butler sometime during 1994 about the plaintiff Tillman. The relevant portions of these affidavits are as follows:
Gibson and Butler came to my home and told me that they wanted to question me about Carlos Carr's death, and Tony Tillman and Robert Rupert being involved in drugs.
Exhibit "4" to the Plaintiff's Response, Affidavit of J.J. McFarland.
Sometime during 1994, two law enforcement officers (I believe one of them was named Butler) came to me and asked me if I knew if Tony Tillman was involved in *149 drugs, and if I knew if Tony Tillman was involved in the death of Carlos Carr. The way I was questioned made me think that they believed that Tony was guilty, and they wanted me to say that I knew it was true.
Exhibit "3" to Plaintiff's Response, Affidavit of Tiffany Jefferson.
The officers asked me questions making me think that they thought that Tony was involved in drugs or some type of illegal activity. They wanted me to give a statement saying I knew the same thing.... The officer's questions made me think that they were claiming that Tony was involved in drugs with Robert Rupert, and that Tony was involved in the murder of Carlos Carr.
Exhibit "2" to Plaintiff's Response, Affidavit of Willie Harris.
Initially, the court notes that language's confinement in a question does not prevent that language from being classified as defamatory. "The form of the language used is not controlling and a defamatory meaning may be conveyed by means of a question." Lutz v. Watson, 136 A.D.2d 888, 889, 525 N.Y.S.2d 80 (citing W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 111, at 780 (5th Ed.1984)).
A question can conceivably be defamatory, though it must reasonably be read as an assertion of a false fact; inquiry itself, however embarrassing or unpleasant to its subject, is not an accusation.
Partington v. Bugliosi, 56 F.3d 1147, 1157 (9th Cir.1995); Chapin v. Knight-Ridder, Inc., 993 F.2d 1087, 1093 (4th Cir.1993). Nevertheless, the language must indeed be defamatory. The precise questions asked of these affiants by the investigating officers is not before the court. While such may not be absolutely necessary, it is most difficult to glean a defamatory meaning without at least some idea of what was said. Even taking the facts contained in these affidavits as true, the court cannot find sufficient evidence that would support a jury finding that the officers' questions in this matter were anything beyond mere inquiry. That the affiants were left with an "impression" that the investigators "believed" these charges against the plaintiff to be true is not sufficient. That the officers may have expressed an opinion as to the plaintiffs culpability is also not enough. Meridian Star, Inc. v. Williams, 549 So. 2d 1332, 1335 (Miss.1989) (citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 339, 94 S. Ct. 2997, 3007, 41 L. Ed. 2d 789 (1974)); but see Johnson v. Delta-Democrat Pub. Co., 531 So. 2d 811, 814 (Miss.1988) (Opinion statements actionable if they clearly and unmistakably imply allegation of undisclosed false or defamatory facts as the basis for opinion) (citing Ferguson v. Watkins, 448 So. 2d 271, 276 (Miss.1984)). The affiants do not state that the officers' questions were equivalent to a false statement of fact, i.e., that the officers asserted within their questions that the charges were in fact true. The undersigned is of the opinion that the plaintiff, when faced with a properly supported motion for summary judgment, has failed to come forward with sufficient evidence that would lead a reasonable juror to find that false and defamatory statements were made in connection with his discharge. There is no genuine issue of material fact as to this matter and the defendant is entitled to the entry of a judgment as a matter of law on this claim of the plaintiff.
B. FIRST AMENDMENT RIGHT OF ASSOCIATION
In order for the plaintiff to have a viable claim under § 1983, it is axiomatic that he possess a right, privilege or immunity secured "by the Constitution and [Federal] laws." 42 U.S.C. § 1983. Indeed, it is the violation of such a right, privilege or immunity that is actionable under the civil rights statute. In this case, Tillman alleges that he was terminated from his employment as a West Point police officer "because he exercised his freedom of association rights as guaranteed by United States Constitution Amendment One." Plaintiff's Complaint, ¶ XII.[3] A necessary first step in this court's *150 analysis, then, should be to determine if the plaintiff actually has a constitutionally protected interest in the association involved in this case.
Contrary to the assertions of the plaintiff in this matter, the First Amendment does not contain a "generalized right of `social association.'" City of Dallas v. Stanglin, 490 U.S. 19, 25, 109 S. Ct. 1591, 1595, 104 L. Ed. 2d 18 (1989); Wallace v. Texas Tech. Univ., 80 F.3d 1042, 1051 (5th Cir.1996). Rather, the United States Supreme Court has determined that the First Amendment encompasses two categories of protection in this regard: 1) "intimate association"; and 2) "expressive association." City of Dallas, 490 U.S. at 23-25, 109 S.Ct. at 1594-95; Board of Directors of Rotary Int'l v. Rotary Club of Duarte, 481 U.S. 537, 544, 107 S. Ct. 1940, 1945, 95 L. Ed. 2d 474 (1987); Roberts v. United States Jaycees, 468 U.S. 609, 617-18, 104 S. Ct. 3244, 3249-50, 82 L. Ed. 2d 462 (1984). The right of "expressive association" protects the rights of individuals to associate "for the purpose of engaging in those activities protected by the First Amendmentspeech, assembly, petition for the redress of grievances, and the exercise of religion." City of Dallas, 490 U.S. at 24, 109 S.Ct. at 1594, 104 L.Ed.2d at 25 (quoting Roberts, 468 U.S. at 617-18, 104 S.Ct. at 3249-50). There is no evidence before the court to indicate that this type of associational protection is that which the plaintiff claims has been violated by the defendant, and the plaintiff has not even asserted such.[4]
The right of "intimate association," also referred to by some courts as the right of "private association," is an entirely different animal. Its purpose is to protect against unjustified government interference with an individual's right to enter into and maintain certain intimate human relationships, and is protected as an element of personal liberty. City of Dallas, 490 U.S. at 24, 109 S.Ct. at 1594-95, 104 L.Ed.2d at 25 (quoting Roberts, 468 U.S. at 617-18, 104 S.Ct. at 3249-50); Wallace, 80 F.3d at 1051; Louisiana Deb. and Lit Ass'n v. City of New Orleans, 42 F.3d 1483, 1493 (5th Cir.1995). This associational right most closely fits the contours of the plaintiff's claim in this cause. The relationships to which courts have extended this protection include that of marriage, the bearing of children, child rearing and education, and the cohabitation with familial relatives. Wallace, 80 F.3d at 1051 (citing Rotary Club, 481 U.S. at 545, 107 S.Ct. at 1945-46). A bright line determination of familial relationship does not establish the right, however, and other relationships may suffice. Particularly, relationships can give rise to a protected right if they are of the kind:
that presuppose "deep attachments and commitments to the necessary few other individuals with whom one shares not only a special community of thoughts, experiences, and beliefs but also distinctively personal aspects of one's life."
Id. (citing Rotary Club, 481 U.S. at 545, 107 S.Ct. at 1946); see, e.g., Louisiana Deb. and Lit. Ass'n, 42 F.3d at 1493 (association with private club found sufficient). Whether the *151 right does in fact extend to relationships outside of the familial context depends upon the extent to which those attachments share qualities distinctive to family relationships. Id. at 1494 (enumerating factors considered in determination of associational rights of an organized club).
In this case, the plaintiff claims that he was fired because of his friendship with Robert Rupert. The full extent of the evidence before this court is that the plaintiff and Mr. Rupert were only "friends," and that they had known each other for quite a long time. Nothing indicates that they were "best friends," or had more than occasional contact with one another. In sum, there is nothing before the court to indicate that they shared the requisite affinity to create for the plaintiff a constitutionally protected associational right under the First Amendment. See White v. Florida Hwy. Patrol, 928 F. Supp. 1153, 1159 (M.D.Fla.1996). As the court finds that the evidence is insufficient to establish a protectable First Amendment associational right in the relationship between the plaintiff and Mr. Rupert, the court need not address whether West Point's termination of the plaintiff's employment was an unconstitutional infringement of his First Amendment right as a public employee. The defendants are entitled to the entry of a judgment as a matter of law on this claim of the plaintiff.
VI. CONCLUSION
"When faced with a properly supported motion for summary judgment, a non-movant, such as plaintiff, cannot merely `sit back and wait for trial.'" Hinton v. Teamsters Local Union No. 891, 818 F. Supp. 939 (N.D.Miss.1993) (quoting Page v. De Laune, 837 F.2d 233, 238 (5th Cir.1988)). In this case, the plaintiff has failed to come forward with sufficient evidence in support of the fact that defamatory charges were made against him in connection with his discharge. As the plaintiff has insufficient evidence in support of this fact, he cannot prevail on his claim that he was entitled to a name-clearing hearing under the due process clause of the Fourteenth Amendment to the United States Constitution.
As to the plaintiff's freedom of association claim, this court is of the opinion that friendships can indeed rise to such a level as to create a protected intimate First Amendment association under the circumstances proscribed by the United States Supreme Court. However, not all friendships will do so, and nothing in this case suffices to raise a genuine issue of material fact as to whether such a friendship existed between the plaintiff and Robert Rupert.
There are no genuine issues of material fact as to the plaintiffs claims, and the defendant is entitled to the entry of a judgment as a matter of law. A separate order in accordance with this opinion shall issue this day.
NOTES
[1] In ruling on a motion for summary judgment, the court is not to make credibility determinations, weigh evidence, or draw from the facts legitimate inferences for the movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2513-14, 91 L. Ed. 2d 202 (1986). Rather, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513-14. The court's factual summary is so drafted.
[2] "When I arrived at the meeting, someone asked me whether I had anything to say. I told them that I did not have anything to say, since my attorney was not present and I did not know what I was supposed to talk about." Exhibit "1" to Plaintiff's Response, Affidavit of Tony Tillman.
[3] Apparently, the defendant terminated the plaintiff's employment at least in part pursuant to policy of the West Point police department, which states:
Association: Members and employees shall avoid regular or continuous associations or dealings with persons under criminal investigation or indictment, or who have a reputation in the community of the Department for present involvement in felonious or criminal behavior, except as necessary to the performance of official duties, or where unavoidable because of personal relationships of the officers.
Defendant's Exhibit I, West Point Police Department Policy Manual, Section 2.21.15. The plaintiff has not made a challenge to the facial validity of this regulation, and therefore the issue is not before the court. Such an attempt by the plaintiff in this case could lead to a question of standing. Nonetheless, it appears that the regulation could indeed be void on the ground that it is unconstitutionally vague or over broad. See, e.g., Dunn v. McKinney, 622 F. Supp. 259, 261 (D.C.Wyo.1985) (finding similar prohibition void). For example, would an officer be prohibited from having a regular association with one who merely had a "reputation in the community" for the involvement in the "criminal" behavior of driving her automobile in excess of the speed limit?
[4] Both the plaintiff and defendant, however, provide the court with a legal analysis that courts have traditionally employed to address claims involving the infringement of an individual's right to association for political purposesi.e., "political patronage" cases. See, e.g., Branti v. Finkel, 445 U.S. 507, 518, 100 S. Ct. 1287, 1295, 63 L. Ed. 2d 574 (1980); Garcia v. Reeves County, Texas, 32 F.3d 200, 204 (5th Cir.1994); Coughlin v. Lee, 946 F.2d 1152, 1158 (5th Cir.1991). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1809222/ | 681 So.2d 1292 (1996)
TERREBONNE FUEL & LUBE, INC.,
v.
PLACID REFINING COMPANY.
No. 93-CA-2364.
Court of Appeal of Louisiana, Fourth Circuit.
October 2, 1996.
*1294 C. Berwick Duval, II, Duval, Funderburk, Sundbery & Lovell, L.L.P., Houma, for Plaintiff.
James G. Burke, Jr. and Robert D. Hoffman, Jr., Burke & Mayer, New Orleans, for Defendant.
Before BARRY, LOBRANO and ARMSTRONG, JJ.
ARMSTRONG, Judge.
This case comes before us for the second time. On a previous appeal, we held that the plaintiff's claim was barred by res judicata. The Supreme Court reversed (See Terrebonne Fuel & Lube, Inc. v. Placid Refining Company, 95-0654 (La.1/16/96), 666 So.2d 624, held that the plaintiff's claim was not barred by res judicata, and remanded to us for consideration of the merits.) We now address the merits.
This case involves an alleged wrongful foreclosure. Defendant Placid Refining Company ("Placid") sold diesel fuel, on credit, to plaintiff, Terrebonne Fuel and Lube, Inc. ("Terrebonne") pursuant to a contract titled "Diesel Fuel Purchase and Credit Agreement" (Plaintiff's Exhibit 1, "the Fuel Agreement"). The credit sales were secured by several security instruments which gave Placid liens on Terrebonne's principal bank account, its accounts receivable and its diesel inventory. At or just prior to the expiration of the one-year term of the Fuel Agreement, at a time when Terrebonne was admittedly late on $298,599 it owed to Placid, Placid caused Terrebonne's principal bank account to be frozen and sent notices to Terrebonne's account debtors to make payments directly to Placid. Although Placid never actually withdrew money from Terrebonne's principal bank account or collected many of Terrebonne's accounts receivable, Placid's actions to begin enforcement of its security rights caused Terrebonne to file for Chapter XI bankruptcy reorganization with resulting adverse financial and business consequences for Terrebonne.
Terrebonne brought the present action and alleges that Placid breached the Fuel Agreement by enforcing its security rights as it did. Placid filed a reconventional demand and alleges that Terrebonne misrepresented the amount of its collateral in order to obtain additional credit.
After a bench trial, the trial court found that Placid had breached the Fuel Agreement by enforcing its security rights without first giving five days written notice to Terrebonne. The trial court rejected Terrebonne's contention that, with the five days notice, it could have refinanced its delinquent debt to Placid and so avoided Chapter XI bankruptcy reorganization but, nevertheless, fixed damages for the failure to give the five-day written notice at $500,000. The trial court also found that Terrebonne had not misrepresented the amount of its collateral and so dismissed Placid's reconventional demand.
We hold that Placid did not breach the Fuel Agreement by enforcing its security rights without first giving five days written notice to Terrebonne. Also, we are unpersuaded by Terrebonne's other arguments that Placid acted wrongfully when it enforced its security rights. Further, even if Placid had breached the Fuel Agreement by not giving five days notice, the trial court's finding of fact that Terrebonne could not have *1295 refinanced its delinquent debt in five days precludes the possibility of any damages being caused by such lack of notice. As to Placid's reconventional demand, the trial court's finding of fact that Terrebonne did not misrepresent the amount of its collateral is not clearly wrong or manifestly erroneous. Thus, as to the principal demand, by Terrebonne against Placid, we reverse the judgment of the trial court. As to Placid's reconventional demand, we affirm the judgment of the trial court.
The interpretation of a contract is the determination of the intent of the parties to the contract, La. Civil Code Art. 2045, but: "When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent." La. Civil code art. 2046. The issue of whether the words of a contract are "clear and explicit", or are instead ambiguous, is a question of law and, as such, is subject to de novo consideration on appeal. Welsh v. Paul Revere Life Ins. Co., 95-CA-0954 (La.App. 4th Cir. 11-30-95), 665 So.2d 142, 144-45, writ denied, 96-C-0403 (La. 3-22-96), 669 So.2d 1214, McCrory v. Terminix Service Co., 609 So.2d 883, 886 (La.App. 4th Cir.1992). As we will discuss in detail below, we find that the Fuel Agreement provisions at issue are "clear and explicit" and are not ambiguous.
"When the meaning of the words [of a contract] are clear then the courts should look no further in determining the intent of the parties.... Where the meaning of a contract is to be determined solely from the words upon its face, without the necessity of extrinsic evidence, the appellate courts are as competent to review the evidence as the trial court, and no special deference is usually accorded the trial court's findings." Schroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342, 345 (La. 1991). Thus, as the Fuel Agreement provisions at issue are clear and explicit, their meaning is determined by us de novo. As we will discuss in detail below, those provisions gave Placid the right to enforce its security rights without giving prior notice to Terrebonne.
The Fuel Agreement was entered into on April 29, 1985 and had a one-year term. In it, Placid agreed to sell to Terrebonne up to 50,000 barrels of diesel per month. Placid was to invoice Terrebonne for each delivery of diesel and payment was "due and owing" sixty-five days after delivery. If any payment were late, it would bear interest. Payment could be made by offset of amounts owed by Placid's corporate parent, Placid Oil Company, to Terrebonne. (It was contemplated, and it in fact occurred, that Placid Oil Company's vessels in the Gulf of Mexico would be purchasing diesel from Terrebonne.) If Terrebonne paid any invoices early, i.e. less than sixty-five days after the delivery of the diesel, then Terrebonne would be given a credit to be calculated pursuant to a formula set out in the Fuel Agreement.
Section 2.05 of the Fuel Agreement made a number of provisions for security for the extension of credit to Terrebonne by Placid. It provided that: (1) Placid would be given a first lien position on Terrebonne's accounts receivable arising after the beginning of the Fuel Agreement; (2) Terrebonne would establish a bank account to which Terrebonne's account debtors would send payment and that Placid would have "signatory rights" on that bank account (i.e. the right to make withdrawals) as well as, apparently, a lien over the cash in that bank account as proceeds of the liened Terrebonne accounts receivable; and (3) a first lien position on Terrebonne's inventory acquired after the beginning of the Fuel Agreement. All three of these security rights were to be, and in fact were, documented by separate security instruments. Terrebonne's credit, i.e. the total credit that could be outstanding at any one time, was limited by the amount of the collateral subject to the three security rights. Thus, Section 2.06 of the Fuel Agreement provides for certain reports to be made by Terrebonne to Placid as to the collateral.
Section 2.05 of the Fuel Agreement, with its various provisions for the security to be given Placid for the credit extended to Terrebonne, does not contain any provision that Placid should give five days written notice to Terrebonne before enforcing its security rights. In fact, Section 2.05 does not provide *1296 for Placid to give any notices to Terrebonne at all. Nor do the three separate security instruments provide for Placid to give Terrebonne five days written notice, or any other notice, prior to enforcing its security rights due to late payment by Terrebonne. Instead, Section 2.05 of the Fuel Agreement, after providing for the liens on Terrebonne's accounts receivable, bank account and inventory, states as follows:
SELLER (Placid) shall not take any action to execute on these liens for the payment of any invoice covering Product [diesel] delivered hereunder until after sixty-five (65) days from the date [of delivery].
Thus, under Section 2.05 of the Fuel Agreement, and the three security instruments, Placid could enforce its security rights, without prior notice, if Terrebonne did not pay for diesel by the sixty-fifth day after delivery. Terrebonne admits that, at the time Placid began to enforce its security rights, $298,599 was owed by Terrebonne to Placid for diesel delivered more than sixty-five days earlier, i.e. $298,599 was late.
Section 4.01 of the Fuel Agreement makes various provisions giving each party certain rights to terminate the agreement prior to expiration of its one-year term due to defaults of the other party. Among those various provisions is one, sub-Section 4.01(c), which is at issue here:
In the event BUYER [Terrebonne] fails to make payment on any invoice as it may become due, SELLER [Placid], at its sole option, may terminate this agreement if BUYER fails to cure the failure to pay within five (5) days of written notice by SELLER to BUYER. (emphasis added)
Thus, under sub-section 4.01(c), Placid must give Terrebonne written notice, and a five day opportunity to cure, prior to terminating the Fuel Agreement for Placid's failure to make timely payment. There is no mention in sub-Section 4.01(c) of Placid's security rights. Instead, sub-Section 4.01(c) deals solely with termination of the Fuel Agreement prior to its expiration.
Terrebonne advances two arguments that Placid was required to give Terrebonne five days written notice prior to Placid's enforcing its security rights. First, Terrebonne argues that, under the security instruments, a default must exist before Placid can enforce its security rights. Terrebonne then points out that Article IV of the Fuel Agreement is titled "Defaults and Remedies" and that sub-Section 4.01(c) is contained within Article IV. Evidently, Terrebonne is implying that, because sub-Section 4.01(c) with its five day written notice requirement for termination for late or non-payment is included within an Article titled "Defaults and Remedies", there must be a five day written notice prior to the exercise of any "remedy" for the default of late or non-payment. Terrebonne is stretching the language of the Fuel Agreement beyond reason. Article IV as a whole deals only with termination of the Fuel Agreement and, of course, sub-Section 4.01(c) deals only with termination for late or non-payment. Placid's security rights are dealt with in Article II, specifically Section 2.05, and are not even mentioned in Article IV. Lastly, as to this point, to the extent that this argument of Terrebonne is based upon the title of Article IV, it is unsound because Section 5.08 of the Fuel Agreement provides: "The titles of the Articles and Sections hereof are not a part of this Agreement, and shall not be deemed to affect the meaning or construction of any of its provisions."
Next, Terrebonne argues that Placid's beginning to enforce its security rights constituted a de facto "termination" of the Fuel Agreement. Apparently, what Terrebonne means by this is that, as a practical matter, once Placid began to enforce its security rights, Terrebonne could not continue in business without filing for Chapter XI bankruptcy reorganization to free up its bank account and accounts receivable from Placid. This argument is without merit. The five-day written notice requirement of sub-Section 4.01(c) clearly applies to an actual termination of the entire Fuel Agreement, including Placid's obligation to continue to sell and deliver up to 50,000 barrels of diesel per month, done pursuant to that sub-Section 4.01(c). Placid's security rights, and the restriction on their enforcement (i.e. enforcement only if there is late or nonafter sixty-five days), are dealt with in an entirely different portion of the Fuel Agreement. *1297 There is nothing in the Fuel Agreement which remotely purports to extend sub-Section 4.01(c)'s five day written notice requirement to the enforcement of Placid's security rights under any circumstances.
Terrebonne does not argue that the Fuel Agreement's provisions allowing Placid to enforce its security rights without prior notice to Terrebonne lead to "absurd consequences", La. Civil Code art. 2046, and no such absurd consequences are apparent. Placid was extending a great deal of credit, sometimes millions of dollars, to a small and newly-independent company for periods of time, sixty-five days from delivery, which all witnesses at trial agreed was much longer than the industry standard of about ten or eleven days. Further, it was undisputed at trial that Placid's only collateral consisted of non-permanent "liquid assets" (accounts receivable, cash in a bank account and diesel inventory) while all of Terrebonne's "fixed assets" (plant, equipment, etc.) were mortgaged to a bank and thus unavailable to Placid. It is unsurprising that the Fuel Agreement would give Placid the right to enforce its security rights immediately in the event of late or non-payment. No witness testified at trial that this right of Placid varied from the industry practice or was commercially unreasonable.
Terrebonne had its own internal comptroller and chief accountant, Mr. Talbot, who kept track of Terrebonne's accounts payable and so Terrebonne was aware of the amount and due date of its debts to Placid. Terrebonne's President, Mr. Songy, who was himself an accountant, had many years of experience in the industry and was familiar with the terms of the Fuel Agreement. There can be no doubt that Terrebonne was at all times aware of the possible consequences of late or non-payment.
There is no reason to construe the Fuel Agreement strictly against Placid and in favor of Terrebonne. "In case of doubt that cannot otherwise be resolved, a provision in a contract must be interpreted against the party who furnished its text." La. Civil Code art. 2056. As we see no ambiguity in the Fuel Agreement's provisions for Placid's security rights (Section 2.05) or in its provisions for termination for late or non-payment (sub-Section 4.01(c)), Article 2056's rule of interpretation is not implicated. Even if this rule of contract interpretation were implicated, there is no evidence as to which party, Placid or Terrebonne, "furnished the text" of Section 2.05 or sub-Section 4.01(c). The testimony of Mr. Theriot, who was Terrebonne's CPA and business advisor at the time the Fuel Agreement was prepared, and who was one of Terrebonne's expert witnesses at trial, shows that the text of the Fuel Agreement was negotiated through multiple drafts. In fact, Mr. Theriot, on behalf of Terrebonne, worked with an attorney in that drafting process.
Nor is there any evidence, or even any assertion by Terrebonne, that the terms of the Fuel Agreement resulted from any inequality in bargaining power. The testimony of Mr. Songy and others shows that the Fuel Agreement arose out of a larger, more complex transaction involving several parties in addition to Terrebonne and Placid and it appears that all parties were sophisticated and had substantial bargaining power.
Terrebonne argues that, even if the Fuel Agreement did not require that Placid give notice to Terrebonne prior to Placid's enforcing its security rights, a "course of dealing" between Placid and Terrebonne established such a notice requirement. The trial court, in its Reasons For Judgment, did not make any findings as to such a "course of dealing".
Terrebonne points out that Placid's assistant credit manager, Mr. Reynolds, began to keep track of which invoices to Terrebonne were not paid by sixty-five days after delivery, the interest accrued on those invoices, and credits due to Terrebonne because of early payment of some invoices. Apparently, Mr. Reynolds began to prepare periodic written reports of these figures and shared those reports with Terrebonne. Terrebonne argues that "Placid, through its own [assistant] credit manager, had supplanted the [Fuel] Agreement by the accounting for invoices due". In effect, Terrebonne argues that, because Placid was aware of and kept track of late payments for some months, and did *1298 not move to enforce its security rights for some months, Placid waived its contractual right to enforce its security rights without prior notice to Terrebonne.[1]
The record does not support Terrebonne's argument. During the first six or seven months of the twelve month term of the Fuel Agreement, there were only about two late payments and those were but a few days late. Beginning about the seventh or eighth month of the term of the Fuel Agreement, the payment situation began to change radically as Terrebonne began to be late on more and more invoices and the periods of lateness became longer and longer. Apparently, this resulted from a dramatic downturn in the oil and gas industry beginning during the seventh or eighth month of the term of the Fuel Agreement. In any event, Placid did not passively tolerate the late payments but, instead, almost immediately began to pressure Terrebonne about its debt to Placid. Beginning about the eighth month of the term of the Fuel Agreement and continuing right up to the enforcement of Placid's security rights just prior to the expiration of the Fuel Agreement at the end of the twelfth month, there were several meetings of Placid and Terrebonne to discuss the debt. Placid made apparent its displeasure with both the overall size of Terrebonne's debt and with Terrebonne's increasingly delinquent payments. In light of the short (five months or less) history of significant late payments, and Placid's objections to those late payments, it can hardly be said that Placid waived its contractual right to enforce its security rights due to non-payment simply because its assistant credit manager kept track of the late payments and shared his reports with Terrebonne. Moreover, Section 5.05 of the Fuel Agreement provides that no "change" or "waiver" of any provision of the Fuel Agreement is effective unless it is in a writing signed by Placid and Terrebonne. Cf. R.S. 10:1-205(4) ("course of dealing" cannot override express contractual provision).
Next, Terrebonne argues that Placid acted negligently, and committed a tort, by enforcing its lien rights against more collateral than was necessary to collect the delinquent $298,599. The trial court, in its Reasons For Judgment, made no findings as to this contention.
Placid caused Terrebonne's principal bank account to be frozen and sent notices to Terrebonne's account debtors to make payment directly to Placid. It is undisputed that the amount on deposit in the bank account (apparently, roughly $120,000) was far from adequate to pay the delinquent $298,599. Thus, it was certainly reasonable for Placid to enforce its security rights against Terrebonne's accounts receivable as well.[2]
Apparently, the total of the Terrebonne accounts receivable greatly exceeded the roughly $180,000 (the delinquent amount less the amount of the bank account) necessary to pay the delinquent debt. However, to the *1299 extent that the amount of the accounts receivable collected by Placid exceeded the amount of the delinquent debt, Placid would have been required to account to Terrebonne for the surplus. La. R.S. 10:9-502(2) and 10:9-504(2). Thus, Terrebonne would have received the proceeds of the accounts receivable less the deduction necessary to satisfy the delinquent debt. This result is not only in accordance with the statute, which contemplates that assignees of accounts receivable (like Placid) will enforce their rights against accounts receivable more in amount than the debt they secure, but is reasonable because the assignee of accounts receivable (such as Placid) will not know in advance which accounts receivable will prove to be collectable or how quickly each will be collected.
Also, in addition to the delinquent $298,599, Terrebonne owed Placid over $700,000 more which, while not yet due at the time the security rights were enforced, was all due in less than sixty-five days and a substantial portion of which was due much sooner. The total amount of Terrebonne's debt to Placid, and the total amount of Terrebonne's bank account and accounts receivable (assuming no bad debt allowance), were each somewhat over $1,000,000. Assuming that Terrebonne's accounts receivable would have been collected over the course of a month or two, and that Terrebonne's debt to Placid would all be coming due over that same period of time, it is apparent that Placid's enforcement of its security rights was not grossly disproportionate to the debt.
Because Placid would have had to account to Terrebonne for any surplus accounts receivable collected by Placid, because Placid's actions were within the contemplation of the statute, and because Placid's enforcement of its security rights was fairly proportionate to the debt, we do not believe Placid acted unreasonably under the circumstances. Certainly there was no tort by Placid.[3]
Although we have held that there is no liability of Placid to Terrebonne, we also will address the damages issue. That issue is not one of quantum of damages but, rather, whether Terrebonne was damaged at all by the lack of a five-day notice prior to Placid enforcing its security rights. Terrebonne's theory of damages is that, if it had received a five-day notice, it could have refinanced its debt with some third partyi.e. raised enough money to pay off the delinquent $298,599 within five days and to pay off the other more than $700,000 owed to Terrebonne as it became due over the following month or two. That way, Terrebonne argues, it could have avoided Chapter XI bankruptcy reorganization and the various adverse consequences of that process.
Terrebonne presented the testimony of two expert witnesses, Mr. Theriot and Mr. Neeble, in support of its contention that its debt could have been refinanced in five days. However, the trial court, in its Reasons For Judgment, expressly rejected the testimony of those two expert witnesses as "unduly optimistic". The trial court, in its Reasons For Judgment, found that it would be "simply unrealistic" to conclude that Terrebonne could have refinanced its debt in five days. The trial court's Reasons For Judgment allude to the fact that Terrebonne had been looking for new financing for about four months with no success. In fact, Terrebonne had fruitlessly contacted thirty or more lenders including virtually every bank in New Orleans. The damages argument of Terrebonne's brief, like the testimony of its expert witnesses at trial, focuses to a great extent on the contention that Terrebonne could have "factored" its accounts receivablei.e. sold them to a third party at a substantial discount from their face valuebut this contention runs up against the obstacles that Placid had a first lien on all the accounts receivable, that the debt owed to Placid (over $1,000,000) was close to the face value (no bad debt allowance) of all the collateral, and that a *1300 bank to which Terrebonne owed a multimillion dollar debt had a second lien on the accounts receivable. Considering the record as a whole, the trial court had ample reason to find that Terrebonne would not have been able to refinance in five days, and that finding is certainly not clearly wrong or manifestly erroneous. See Stobart v. State, DOTD, 617 So.2d 880, 882-83 (La.1993); Rosell v. ESCO, 549 So.2d 840 (La.1989).
However, despite its factual finding that Terrebonne would not have been able to refinance in five days, i.e. despite its rejection of Terrebonne's damages theory, the trial court awarded Terrebonne damages of $500,000:
Nonetheless, Placid's precipitous exercise of its security devices deprived Terrebonne of the opportunity to attempt survival. This opportunity had value. The question is how much was this opportunity worth. At this point two contradictory rules of law compete for application. The first says plaintiffs must prove their damages, and such proof must not be speculative. The second rule says that where damage has occurred, a plaintiff must not be penalized because he can not prove with any precision, the extent of the damage. I think under the circumstances of this case, the second rule should be applied. The damage suffered in this case, i.e., the loss of the opportunity to seek a lender, is estimated to be $500,000.00.
Apparently, the "second rule" referred to is Civil Code Article 1999 which provides: "When damages are insusceptible of precise measurement, much discretion shall be left to the court for the reasonable assessment of damages". (emphasis added). Article 1999 obviously contemplates proof that there has been some damage, i.e. that damage has actually occurred, before there is discretion to assess the amount of damages. This is made even clearer by Civil Code Article 1994 which provides: "An obligor is liable for damages caused by his failure to perform a conventional obligation". (emphasis added). If the obligor's failure did not cause any damages, there is no liability.
Here, Terrebonne's only claim as to how the lack of five-days notice caused Terrebonne any damage is the claim that, in five days, Terrebonne could have refinanced. But, the trial court expressly found as a matter of fact that Terrebonne could not have refinanced in five days, so it cannot be said that the lack of five days notice caused Terrebonne to lose the opportunity to refinance. As the lack of five days notice did not cause any damage, no amount of damages can be awarded.
Placid's reconventional demand is based upon alleged misrepresentations by Terrebonne as to the amount of collateral. The Fuel Agreement limited the amount of credit that would be extended to Terrebonne at any one time to the total of the collateral (cash, accounts receivable and inventory, subject to certain percentage limitations and conditions). Pursuant to the Fuel Agreement, Terrebonne made periodic written reports to Placid as to the amount of collateral.
Terrebonne also was indebted to a bank and, as a result, sent periodic financial statements to that bank. There were variances between those financial statements sent to the bank, and the periodic reports as to collateral sent to Placid, with regard to the amount of cash that Terrebonne had at various times. In particular, the financial statements sent to the bank showed Terrebonne having less cash than was being reported to Placid. Consequently, Placid alleges that Terrebonne was overstating the amount of collateral in its reports to Placid.
The testimony presented at trial by Terrebonne was to the effect that Terrebonne would write (or its computer would print) a large number of checks at one time for the payment of Terrebonne's accounts payable. Some of those checks would be put, unsigned, into a drawer and would not actually be mailed until ten days or more later. However, in the financial statements sent to the bank, the amount of Terrebonne's cash immediately would be reduced by the amount of checks written or printed even though those checks were not to be mailed for some time. In contrast, in the reports to Placid, the amount of Terrebonne's cash was not reduced by checks which had been written or *1301 printed but which were not to be mailed for some time.
The trial court, in its Reasons For Judgment, accepted as credible the above-described testimony. The trial court found that the financial statements sent to the bank were in error and that the reports sent to Placid were accurate. In any event, in light of the testimony accepted as credible by the trial court, the variances between the financial statements to the bank and the reports to Placid were satisfactorily explained, and the reports to Placid were not misleading. Placid presented accounting testimony to attempt to rebut Terrebonne's explanation, but the Placid accounting testimony was shown on cross-examination to be based upon some assumptions and conjecture, and the trial court reasonably could choose to credit the testimony presented by Terrebonne over that presented by Placid.
The trial court's determinations of credibility and findings of fact will not be disturbed on appeal so long as they are reasonable in light of the record as a whole. Stobart, supra; Rosell, supra. The trial court's finding that there was no misrepresentation by Terrebonne is reasonable.
For the foregoing reasons, we reverse the judgment of the trial court on the principal demand (Terrebonne v. Placid) and render judgment dismissing Terrebonne's claims against Placid. We affirm the judgment of the trial court as to Placid's reconventional demand.
REVERSED IN PART; AFFIRMED IN PART; RENDERED.
BARRY, J., concurs with reasons.
BARRY, Judge, concurring with reasons.
The majority correctly notes that security instruments referenced in Section 2.05 of the Diesel Fuel Purchase and Credit Agreement do not require written notice and five days to cure the failure to pay. However, at least one assignment provides: "In the event of default...." Default is not defined or explained in the instrument. It is necessary to look to the Fuel Purchase Agreement to determine what constitutes a default.
Section 2.02 provides that payment is due 65 days after the date of title transfer. According to Section 1.05, title and risk of loss and liability for the delivered product passes to Terrebonne when the product passes through the flange connecting Placid's refinery with Terrebonne's tank truck, boat or barge.
Therefore, Terrebonne was constructively in default when it did not pay on the 65th day after delivery, and Placid had authority to execute based on the assignments. Under Section 2.05 Placid could not take action to execute on the liens until 65 days from the date that title transferred upon delivery. After that Placid was within its authority to act upon the assignments.
NOTES
[1] The statute cited by Terrebonne as establishing "course of dealing" as a legal concept, La. R.S. 10:1-205(1), does not have any literal application to the present issue. That statute defines "course of dealing" as "a sequence of previous conduct between the parties to a transaction" (emphasis added) whereas, as to the present issue, Terrebonne relies upon conduct after the signing of and during the term of the Fuel Agreement. "Course of dealing under [1-205] Subsection (1) is restricted, literally, to a sequence of conduct between the parties previous to the agreement." UCC Official Comment 2 to 1-205. Nevertheless, we understand the substance of Terrebonne's argument as being based upon the course of performance of the Fuel Agreement during its term, and we will address it on that basis.
[2] Section 202(b) of the Fuel Agreement provides that credit purchases of diesel from Terrebonne by Placid Oil Company will be offset against Terrebonne's debt to Placid. Terrebonne's brief states that, shortly after Placid began to enforce its security rights, Placid Oil Company sent its vessels to Terrebonne's fuel docks to draw diesel. Presumably, Terrebonne is implying that this was a sort of "seizure" of the diesel inventory over which Placid had a lien. The record shows that, at about the time of Placid's enforcement of its security rights, Placid Oil Company vessels purchased diesel from Terrebonne. Even assuming that these were credit (not cash) purchases, these purchases would have created offsets that reduced Terrebonne's debt to Placid, so they certainly did no harm to Terrebonne. In any case, the parties obviously contemplated that Placid Oil Company would purchase diesel on credit from Terrebonne, because the Fuel Agreement provides for offsets from such credit purchases, so Placid Oil Company's credit purchases of diesel certainly did not violate the Fuel Agreement.
[3] Terrebonne claimed at trial, and mentions in its brief, that Placid "curtailed" deliveries of diesel to Terrebonne. Under the Fuel Agreement Section 1.03, Placid was obligated to sell and deliver to Terrebonne no more than 50,000 barrels of diesel per month. Terrebonne does not argue on appeal that Placid failed to sell and deliver at least 50,000 barrels of diesel per month. In any case, there was no testimony or other evidence at trial that Terrebonne failed to sell and deliver at least 50,000 barrels per month. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4220292/ | People ex rel. Silberman v Department of Corr. (2017 NY Slip Op 07969)
People v Department of Corr.
2017 NY Slip Op 07969
Decided on November 14, 2017
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on November 14, 2017
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
L. PRISCILLA HALL, J.P.
SYLVIA O. HINDS-RADIX
JOSEPH J. MALTESE
ANGELA G. IANNACCI, JJ.
2017-11365 DECISION, ORDER & JUDGMENT
[*1]The People of the State of New York, ex rel. Debora Silberman, on behalf of Mordecai Omatiga, petitioner,
vDepartment of Corrections, et al., respondents.
Brooklyn Defender Services, Brooklyn, NY (Debora Silberman pro se of counsel and Kramer Levin Naftalis & Frankel LLP [Alejandro G. Ortega], of counsel), for petitioner.
Eric Gonzalez, Acting District Attorney, Brooklyn, NY (Jingu Chong of counsel), for respondents.
Writ of habeas corpus in the nature of an application to release the defendant on his own recognizance or for bail reduction upon Kings County Indictment No. 01154/17.
ADJUDGED that the writ is sustained, without costs or disbursements, to the extent that bail on Kings County Indictment No. 01154/17 is reduced to the sum of $50,000 which may be posted in the form of an insurance company bail bond in that sum or by depositing the sum of $25,000 as a cash bail alternative, and the writ is otherwise dismissed; and it is further,
ORDERED that upon receipt of a copy of this decision, order and judgment together with proof that the defendant has given an insurance company bail bond in the amount of $50,000 or has deposited the sum of $25,000 as a cash bail alternative, the Warden of the facility at which the defendant is incarcerated, or his or her agent, is directed to immediately release the defendant.
HALL, J.P., HINDS-RADIX, MALTESE and IANNACCI, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court | 01-03-2023 | 11-14-2017 |
https://www.courtlistener.com/api/rest/v3/opinions/2901735/ | COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
)
LELA CLARK, ) No. 08-04-00291-CV
)
Appellant, ) Appeal from
)
v. ) 120th District Court
)
HCA, INC. d/b/a DEL SOL ) of El Paso County, Texas
REHABILITATION HOSPITAL, )
EL PASO HEALTH CARE SYSTEMS, LTD. ) (TC# 2003-3787)
d/b/a/ DEL SOL REHABILITATION )
HOSPITAL, DEL SOL REHABILITATION )
HOSPITAL, ROBERT MORENO, M.D., and )
MARIANO PALACIOS, M.D., )
)
Appellees. )
O P I N I O N
Lela Clark appeals the dismissal of her medical malpractice suit against Dr. Robert Moreno,
Dr. Mariano Palacios, and Del Sol Rehabilitation Hospital (Del Sol). At issue are the qualifications
of the expert witness and the adequacy of his report. Finding no abuse of discretion, we affirm.
FACTUAL SUMMARY
The following discussion is taken from the narrative contained within the expert report at
issue. On or about May 7, 2003, Clark was evaluated at Del Sol Medical Center Emergency
Department for chest pain, cardiac problems, nausea, and stomach pain. She was subsequently
admitted to the Inpatient Rehabilitative Program at Del Sol Rehabilitation Hospital. “Physicians
verbal orders” prescribed the twice daily 66 mg subcutaneous administration of Lovenox, an
anticoagulant often used for deep venous thrombosis (DVT) prophylaxis in patients at risk. Lovenox
is contraindicated for elderly patients with hypertension and renal insufficiency. Clark was 79 years
old, suffered from hypertension, and was post-nephrectomy as a result of renal cancer.
On May 13, Clark had bruising in her abdominal area and large palpable lumps allegedly
caused by the Lovenox. On May 17, she complained about pain in her right arm, and a bump was
discovered in front of her right elbow. A vascular Doppler ultrasound of the right arm was negative
for DVT, but a large amount of fluid was found in the right antecubital fossa.
On May 19, Clark was transferred to the acute care facility at Del Sol Medical Center under
the supervision of Dr. Enrique Porras. The discharge summary from the rehabilitation facility
indicated that the “patient developed compartment syndrome . . . .” Dr. Porras noted that Clark had
a significant amount of pain and decreased range of motion. He diagnosed a hematoma of the right
arm and hypertensive crisis due to pain and anxiety. His recommendation was to administer Vitamin
K on a daily basis for three days, to continue the Lovenox, and to apply heat packs to the swelling.
On May 20, a CT scan was consistent with the clinical suspicion of a hematoma.
On May 21, Dr. Maria Angelina Halsted evaluated Clark and suspected an infected
hematoma. She noted that Clark was unable to extend her right arm, but there was no motor deficit
in the right hand. Dr. Halstead recommended incision and drainage with decompression to ensure
that Clark had not developed compartment syndrome. This procedure was performed the next day
and revealed a large hematoma but “no evidence of compartment syndrome . . . with complete
function of the hand and muscle on inspection.” Clark was discharged on May 29, 2003. There was
no mention of her range of motion upon discharge.
THE PLEADINGS
On August 29, 2003, Clark sued HCA, El Paso Healthcare Systems, Del Sol Rehabilitation
Hospital, Dr. Moreno, and Dr. Palacios on a medical malpractice claim. The basis of the suit against
all defendants was pled in the following particulars:
HCA and El Paso Healthcare Systems own and operate Del Sol. The nurses and staff
at Del Sol had a duty [to] monitor the status of Plaintiff for indications of an adverse
reaction to the medications being administered by them. They had a further duty to
administer all medications properly as instructed by the treating physicians.
Dr. Moreno and Dr. Palacios had a duty to properly assess Plaintiff, to properly
review the medical history of Plaintiff and properly prescribe medications that are not
contraindicated for a patient with Plaintiff’s history. As a result of the failures of the
nursing staff of Del Sol, and most particularly, because of the failure of Dr. Moreno
and Dr. Palacios to properly assess Plaintiff’s medical history and properly prescribe
medications, Plaintiff was forced to endure a painful condition which required
subsequent painful surgery and is left with an 80%-90% paralysis of her right hand.
Plaintiff has lost all independence and has been forced to remain in a long term care
facility in order to receive appropriate care.
Clark timely filed an expert report and curriculum vitae from Dr. Elmer Pacheco. Dr. Pacheco
reviewed the medical care provided to Clark at Del Sol Medical Center and Del Sol Rehabilitation
Hospital in rendering his opinion.
On May 24, 2004, Dr. Palacios filed a motion challenging the adequacy of the expert report
and seeking dismissal of the claim. He argued that the report did not demonstrate that Dr. Pacheco
was qualified to render an expert opinion. He also alleged that the report did not (1) support the
plaintiff’s allegations, (2) set out the standard of care applicable to him or how he breached it, or (3)
explain how the breach caused Clark’s injury. On May 25, Dr. Moreno also filed a motion
challenging the adequacy of the expert report and seeking dismissal on the same grounds. Del Sol
filed its motion on July 19.
Clark filed a response supported by her attorney’s affidavit. Counsel explained that he
believed Dr. Pacheco was qualified to render an opinion because he was a board certified internist.
In his view, Pacheco properly discussed the standards of care, the standards breached, the results of
the breach, and damages. Counsel thus believed that the report met the requirements of the Act but
opined that if it did not, then it was the result of accident or mistake. He then sought a thirty-day
grace period in which to file an amended report. The trial court granted the motions challenging the
report and dismissed the suit with prejudice.
THE MEDICAL LIABILITY AND INSURANCE IMPROVEMENT ACT
The Medical Liability and Insurance Improvement Act (“the Act”) was enacted by the Texas
Legislature to curtail frivolous claims. Hart v. Wright, 16 S.W.3d 872, 876 (Tex.App.--Fort Worth
2000, pet. denied); Horsley-Layman v. Angeles, 968 S.W.2d 533, 537 (Tex.App.--Texarkana 1998,
no pet.). In order to encourage the screening of medical malpractice claims by an expert prior to
filing, the Act requires a plaintiff to provide each defending physician or health care provider with
one or more expert reports relating to liability and causation. Wood v. Tice, 988 S.W.2d 829, 830
(Tex.App.--San Antonio 1999, pet. denied); see Act of May 1, 1995, 74th Leg., R.S., ch. 140, § 1,
sec. 13.01(d), 1995 Tex.Gen.Laws 985, 987 (repealed 2003).
The expert report, along with a
curriculum vitae of each expert, must be furnished to the defendant not later than the 180th day after
the date on which a health care liability claim is filed or the last day of any extended period as
permitted under the statute. Id. Where an expert report is tendered, the defendant may challenge the
adequacy of the report via a motion to dismiss. Id. § 13.01(l); Hart, 16 S.W.3d at 876. A report
authored by a person who is not qualified to testify cannot constitute an adequate report. In re
Samonte, 163 S.W.3d 229 (Tex.App.--El Paso 2005, orig. proceeding). A challenge to the adequacy
of a report may be based on a claim that it fails to demonstrate the person rendering the opinion is
qualified to testify, as well as on other claims of its inadequacy. Id.
The trial court must grant the motion only if it appears to the court, after hearing, that the
report does not represent a good faith effort to comply with the definition of an expert report. See
Act of May 1, 1995, 74th Leg., R.S., ch. 140, § 1, sec. 13.01(l), 1995 Tex.Gen.Laws 985, 987
(repealed 2003); American Transitional Care Centers of Texas, Inc. v. Palacios, 46 S.W.3d 873, 878
(Tex. 2001). An expert report is defined as a fair summary of the expert’s opinions regarding: (1)
applicable standards of care, (2) the manner in which the care rendered by the physician or health
care provider failed to meet the standards, and (3) the causal relationship between that failure and
the injury, harm, or damages claimed. Id. § 13.01(r)(6). In determining whether the report
represents a good faith effort, the trial court’s inquiry is limited to the four corners of the report. See
Act of May 1, 1995, 74th Leg., R.S., ch. 140, § 1, sec. 13.01(r)(6), 1995 Tex.Gen.Laws 985, 987
(repealed 2003); Palacios, 46 S.W.3d at 878. To constitute a “good faith effort,” the report must:
(1) inform the defendant of the specific conduct the plaintiff has called into question, and (2) it must
provide a basis for the trial court to conclude that the claims have merit. Palacios, 46 S.W.3d at 879.
To inform the defendant of the specific conduct the plaintiff has called into question, the report must
support the cause of action alleged by the plaintiff in her pleadings. Windsor v. Maxwell, 121
S.W.3d 42, 50 (Tex.App.--Fort Worth 2003, pet. denied).
The report need not marshal all of the plaintiff’s proof, but it must include the expert’s
opinion on each of the three elements identified by the Act: standard of care, breach, and causal
relationship. A report cannot merely state the expert’s conclusions about these elements. Rather,
the expert must explain the basis of his statements to link his conclusions to the facts. Id. Likewise,
a report that omits any of the statutory requirements does not constitute a good faith effort. Palacios,
46 S.W.3d at 879.
STANDARD OF REVIEW
We review a trial court’s dismissal under former Article 4590i, section 13.01(r)(6) under an
abuse of discretion standard. American Transitional Care Centers of Texas, Inc. v. Palacios, 46
S.W.3d 873, 877 (Tex. 2001). Under this standard, we determine whether the trial court acted
arbitrarily and without reference to any guiding rules or principles when it struck Clark’s expert
report and dismissed her case. Walker v. Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003). We may not
reverse a trial court’s discretionary ruling simply because we might have decided it differently. Id.
EXPERT QUALIFICATIONS
In Point of Error One, Clark contends that Dr. Pacheco was qualified to render an opinion
on the standard of care. Several courts of appeals have recognized that to comply with Section
13.01(d) and (r)(6), the expert report must establish, on its face, that the purported expert is qualified.
See Estate of Allen v. Polly Ryon Hospital Authority, No. 01-04-00151-CV, 2005 WL 497291 at *3
(Tex.App.--Houston [1st Dist.] March 3, 2005, no pet. h.)(not reported); Hansen v. Starr, 123
S.W.3d 13, 20 (Tex.App.--Dallas 2003, pet. denied); Chisholm v. Maron, 63 S.W.3d 903, 907
(Tex.App.--Amarillo 2001, no pet.); Schorp v. Baptist Memorial Health System, 5 S.W.3d 727, 732
(Tex.App.--San Antonio 1999, no pet.).
Former Article 4590i, section 14.01 sets out the requirements for an expert witness in a suit
against a physician. A person may qualify as an expert witness on the issue of whether the physician
departed from accepted standards of medical care only if the person is a physician who: (1) is
practicing medicine at the time such testimony is given or was practicing medicine at the time the
claim arose; (2) has knowledge of accepted standards of medical care for the diagnosis, care, or
treatment of the illness, injury, or condition involved in the claim; and (3) is qualified on the basis
of training or experience to offer an expert opinion regarding those accepted standards of medical
care. See Act of May 1, 1995, 74th Leg., R.S., ch. 140, § 2, sec. 14 .01(a), 1995 Tex.Gen.Laws 985,
988 (repealed 2003). The report itself must establish the expert’s qualifications on the basis of
training and experience. See In re Windisch, 138 S.W.3d 507, 511 (Tex.App.--Amarillo 2004, orig.
proceeding).
In determining if an expert is qualified on the basis of training and experience, the court is
to consider whether, at the time the claim arose or the testimony is given, the witness is board
certified or has other substantial training or experience in an area of practice relevant to the claim
and is actively practicing medicine in rendering medical care services relevant to the claim. See Act
of May 1, 1995, 74th Leg., R.S., ch. 140, § 2, sec. 14.01(c), 1995 Tex.Gen.Laws 985, 988 (repealed
2003). Because of the increasing specialization of medicine, “there is no validity, if there ever was,
to the notion that every licensed medical doctor should be automatically qualified to testify as an
expert on every medical question. . . . [T]he proponent of the testimony has the burden to show that
the expert ‘possess[es] special knowledge as to the very matter on which he proposes to give an
opinion.’” Broders v. Heise, 924 S.W.2d 148, 152-53 (Tex. 1996). Thus, the issue is the specific
subject matter and the expert’s familiarity with it. Broders, 924 S.W.2d at 153.
Dr. Pacheco’s curriculum vitae (CV) reveals that he is board certified in internal medicine,
oncology, and nuclear medicine. He completed an internal medicine internship and residency at
University District Hospital, Medical Sciences Campus in Rio Pierdas, Puerto Rico from 1981 until
1984. He was on active duty with the United States Army Medical Corps from 1984 until 1988.
Between 1988 and 1990, he pursued a medical oncology fellowship at M.D. Anderson Cancer Center
in Houston. His nuclear medicine fellowship was obtained at William Beaumont Army Medical
Center in El Paso from 1992 until 1994. He remained at Fort Bliss in El Paso until 1996, serving
as teaching staff and a staff physician in nuclear medicine and hematology-oncology. He then
launched his private practice. His CV indicates he practiced as a physician in Laredo and El Paso,
Texas; Sioux Falls, South Dakota; Wausau and Sheboygan, Wisconsin; Grand Junction, Colorado,
and Thomasville, Georgia. Most recently he was employed as a “[p]hysician with Pacific Coast
Hematology/Oncology.” All of the Appellees allege that at the time of Clark’s treatment, Dr.
Pacheco was engaged in the practice of oncology. Clark has not professed otherwise.
The expert report makes no mention of Dr. Pacheco’s training, experience, or familiarity with
Lovenox, anticoagulant medications, deep venous thrombosis, diagnosis and treatment of
compartment syndrome, or the causes and results of hematoma. Dr. Pacheco merely quotes a few
medical reference materials with no supporting information concerning the qualifications or
expertise of the authors. We are left then with his CV. Dr. Pacheco’s specialty in hematology may
well qualify him to render an opinion, but the record is silent as to his current role as a hematologist
or his experience with anticoagulation therapy. While the CV lists a one-year membership on the
Pharmacy Utilization Committee at Archbold Memorial Hospital in Thomasville, Georgia, the record
does not establish his awareness of the common usage of Lovenox, contraindications of its usage,
or whether he is familiar with the treatment required in the event of an adverse reaction. See
Broders, 924 S.W.2d at 153. Because we cannot conclude that the trial court abused its discretion
in finding that Dr. Pacheco was not qualified to testify as an expert, we overrule Point of Error One. ADEQUACY OF THE REPORT
In Point of Error Two, Clark complains that the trial court erred in finding that the expert
report was inadequate. In their motions challenging the expert report, Appellees argued that the
report did not properly set out the standard of care, breach, or causation.
The Report
Dr. Pacheco reviewed the medical records from Del Sol Rehabilitation Hospital from May 7
until May 19 and the records from Del Sol Medical Center from May 19 until May 29. We have
already detailed his narrative of events in our factual summary. After narrating this sequence of
events, Dr. Pacheco turned to the standard of care. Rather than stating his personal knowledge of
the applicable standard of care, he set out nine text boxes containing excerpts from different
publications. Because of the unusual format, we quote it verbatim:
STANDARD OF CARE
A recently published Hospital Medicine Consensus Reports issued a consensus panel statement
on the ‘Prophylaxis of Venous Thromboembolism (VTE) in the Hospitalized Medical Patient.’
It states that all medical inpatients should be screened and considered for VTE prophylaxis.
Subsequently, there follows a risk factor assessment based on whether the patient has restricted
mobility AND at least one VTE risk factor (such as age greater than 40, heart failure, chronic
lung disease). If these criteria are met then pharmacologic prophylaxis for VTE is indicated
provided there are no exclusion criteria for such. Possible exclusion criteria include
uncontrolled hypertension, significant renal insufficiency (creatinine clearance < 30 ml/minute),
among others. If the patient is a candidate for prophylaxis the recommended enoxaparin
(Lovenox®) dosage is 40 mg SQ once daily.
Melde SL. Enoxaparin-induced retroperitoneal hematoma. Ann Pharmacother 2003; 37(6):
822-4
Alford et al reported on the occurrence of a ‘...a compartment syndrome caused by a hematoma
which resulted from noninvasive blood pressure monitoring during thrombolytic therapy...’
Alford JW, Palumbo MA, Barnum MJ. Compartment syndrome of the arm: a complication of
noninvasive blood pressure monitoring during thrombolytic therapy for myocardial infarction. J
Clin Monit Comput 2002. 17 (3-4):13-6
On the diagnosis of compartment syndrome of the upper extremity, Seiler et al commented that
‘...careful attention to the details of the history and physical examination can assist in the
development of a usaeful working diagnosis. Testing ITPs (Intracompartmental Pressure) is the best
method available to help confirm the diagnosis...’
Seilar JG, Casey PJ, Binford SH. Compartment syndromes of the upper extremity. J South Orthop
Association 2000 Winter. 9(4):233-47
‘...Accute compartment syndrome can have disastrous consequences... unusual pain may be the only
symptom of an impending problem...after 8 hrs, the damage (to the muscle) is irreversible
...fasciotomy generally should be done when tissue pressure rises past 20 mmHg below diastolic
pressure...’
Whitesides TE, Heckman MM. Acute compartment syndrome: Update on Diagnosis and Treatment.
J AM Acad Orthop Surg 1996; 4(4):209-218
Kam et al “Evaluated the accuracy of commonly accessed medical textbooks in their description
of the presenting sign/symptoms of acute compartment syndrome... (and found that) ... there are
only three (symptoms) pain, paresthesia, paresis which are important...
Kam JL, Hu M, Peiler LL, Yamamoto LG. Acute compartment syndrome signs and symptoms
described in medical textbooks. Hawaii Med J 2003; 62(7):142-4
‘...High clinical suspicion is of paramount importance in evaluating the hand or wrist for an
evolving compartment syndrome. A detailed history coupled with a thorough physical examination
form the basis for the diagnosis. The use of techniques to measure compartment pressures forms
the objective foundation to assist in formulating the correct treatment plan... great fault can be
assigned to the clinician who chooses to ignore an evolving compartment syndrome that
unnecessarily places the patient at risk of permanent disability. Here, the cosmetic benefit of
avoiding the fasciotomy is overwhelmed by the often-devastating dysfunction created by ischemic
damage to the contents of the affected compartments...’
Ortiz JA, Berger RA. Compartment syndrome of the hand and wrist. Hand Clin
1998;14(3):405-18
The creatinine clearance (on 5/8/03) in this case can be calculated in several ways (patient age 79,
serum creatinine 1.5 mg/dL, weight 55.3 kg, height 172 cm, and BSA 1.65m2:
1. Using the Cockcroft and Gault equation (Nephron 1976;16(1):31-41): 26.4 ml/min
2. Sanaka
CAUSAL RELATIONSHIP BETWEEN FAILURE TO MEET
STANDARD OF CARE AND INJURY, HARM, OR DAMAGES
CLAIMED
As of the date of this report, and my review of the above described records, it is my
opinion that Del Sol Rehabilitation Hospital, Robert Moreno, M.D. and Mariano
Palacios, M.D. failed to meet the above described standards of care by failing to
properly assess, monitor and timely treat the complications which developed as a
result of the improper use of Lovenox. By failing to meet the standard of care, based
on a reasonable medical probability, the development of the acute, compartment
syndrome created the ‘devastating dysfunction created by ischemic damage’ causing
the complete loss of use of Lela Clark’s right arm.
Standard of Care
“Identifying the standard of care is critical: Whether a defendant breached his or her duty
to a patient cannot be determined absent specific information about what the defendant should have
done differently.” Palacios, 46 S.W.3d at 880. Dr. Pacheco’s report quoted several sources that all
inpatients should be screened and considered for venous thromboembolism prophylaxis based on
a risk factor assessment. If pharmacologic prophylaxis is indicated, Lovenox (enoxaparin) should
be given unless other exclusion criteria apply. He then referenced five articles in which
compartment syndrome was discussed. At no point did he indicate that he was personally familiar
with the standard of care or that the authors of the various articles had sufficient expertise.
Breach of the Standard of Care
Dr. Pacheco opined that the standard of care was breached by Dr. Moreno, Dr. Palacios, and
Del Sol since they failed to properly assess, monitor, and timely treat the complications which
developed as a result of the improper use of Lovenox. A physician verbally ordered administration
of 66 mg of Lovenox twice daily, and Clark’s home medications for hypertension were also
continued. Dr. Pacheco did not specify which physician ordered the administration of the Lovenox.
He did note that Dr. Porras continued the Lovenox even after Clark was transferred from Appellees’
care. Clark arguably met the exclusion criteria for use of Lovenox since she was 79 and suffered
from congestive heart failure, hypertension, and renal disease. But Dr. Pacheco did not state that the
defendants failed to properly recognize the risk factors for venous thromboembolism or the exclusion
criteria for use of Lovenox. He did not address whether Lovenox was administered due to an
indication of pharmacologic prophylaxis for venous thromboembolism. He didn’t even say that
Lovenox was contraindicated; he merely asserted that Clark met the exclusion criteria. There was
no discussion of risk vs. benefit. Instead, Dr. Pacheco focused on the symptoms of compartment
syndrome although the medical records were unclear as to whether Clark actually suffered from
compartment syndrome. And he concluded, without detailing the factual basis for his conclusion,
that Clark indeed had compartment syndrome. Finally, Dr. Pacheco failed to state what each of the
defendants should have done differently.
Causation
The report also fails to adequately address causation, primarily because of a large analytical
gap. Stated simply, Dr. Pacheco opined that Appellees failed to treat the complications resulting
from the improper use of Lovenox. He then jumped to the conclusion that “the acute, compartment
syndrome created the ‘devasting dysfunction created by ischemic damage’ causing the complete loss
of use of Lela Clark’s right arm.” The missing link is not that compartment syndrome caused
devastating dysfunction. The missing link is that the improper use of Lovenox caused compartment
syndrome. We conclude that Dr. Pacheco’s expert report was inadequate. Point of Error Two is
overruled.
GOOD FAITH EFFORT
In Point of Error Three, Clark complains that the trial court erred in finding that the report
was not a good faith effort to comply with the requirements of Article 4590i. To constitute a
good-faith effort, an expert report must discuss the standard of care, breach, and causation with
sufficient specificity to inform the defendant of the conduct the plaintiff has called into question and
to provide a basis for the trial court to conclude that the claims have merit. Palacios, 46 S.W.3d at
875. To inform the defendant of the specific conduct the plaintiff has called into question, the report
must support the cause of action alleged in the plaintiff’s petition. Windsor, 121 S.W.3d at 50.
When the expert report’s conclusory statements do not put the defendant or the trial court on notice
of the conduct complained of, the trial court no discretion but to find that the report does not
represent a good faith effort. Palacios, 46 S.W.3d at 880. Since the report did not discuss the
standard of care and breach with sufficient specificity, it cannot constitute a good faith effort. See
Palacios, 46 S.W.3d at 875. Moreover, the report does not support the cause of action Clark alleged
in her pleadings. She alleged that Appellees breached the standard of care by failing “to properly
assess Plaintiff’s medical history and properly prescribe medications.” In other words, the standard
of care was breached by the administration of Lovenox. Dr. Pacheco, on the other hand, opined that
the standard of care was breached by “failing to properly assess, monitor and timely treat the
complications . . . of Lovenox.”
Since the report did not represent a good faith effort to comply with the statutory
requirements, the trial court had no discretion but to dismiss Clark’s claim with prejudice. See
Palacios, 46 S.W.3d at 880. We overrule Point of Error Three and affirm the judgment of the trial
court.
August 25, 2005
DAVID WELLINGTON CHEW, Justice
Before Barajas, C.J., McClure, and Chew, JJ.
(McClure, J., not participating) | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2901982/ | COURT OF APPEALS
COURT
OF APPEALS
EIGHTH
DISTRICT OF TEXAS
EL
PASO, TEXAS
TED MEINERT, )
)
No. 08-04-00326-CV
Appellant, )
) Appeal from the
v. )
)
120th District Court
GOSA LTD, A Texas Limited
Partnership, )
)
of El Paso County, Texas
Appellee. )
) (TC# 2003-754)
)
MEMORANDUM OPINION
Pending before the
Court on its own initiative is the dismissal of this appeal for want of
prosecution. See Tex.R.App.P. 42.3.
Finding no Appellant=s
brief has been filed, we dismiss the appeal.
This Court
possesses the authority to dismiss an appeal for want of prosecution when an
appellant in a civil case fails to timely file its brief and gives no
reasonable explanation for such failure.
Tex.R.App.P. 38.8(a)(1).
On November 1,
2004, Appellant timely filed a notice of appeal in this cause. The clerk=s
record was filed on December 7, 2004. It
appearing that no reporter=s
record would be filed, Appellant=s
brief was due thirty days after the filing of the clerk=s
record, that is, January 6, 2005. On
January 24, 2005, this Court=s
clerk sent a letter to the parties indicating our intent to dismiss the case
for want of prosecution absent a response from any party within ten days to
show grounds for continuing the appeal.
On February 7, 2005, Appellant filed a motion for an extension of time
in which to file the brief. That same
date, the Court=s clerk
informed Appellant that it could not act on his motion because he failed to
comply with Rules 9 and 10 of the Texas Rules of Appellate Procedure. The Court requested that Appellant file an
amended motion immediately so that the motion could be acted upon. Subsequently, the Court denied Appellant=s February 7 motion without written
order on February 24, and that same day informed the parties again of the Court=s intent to dismiss for want of
prosecution. No further response has
been received as of this date.
Accordingly, pursuant to Tex.R.App.P.
42.3(b) and (c), we dismiss the appeal for want of prosecution.
March
31, 2005
DAVID WELLINGTON
CHEW, Justice
Before Barajas, C.J., McClure, and Chew, JJ. | 01-03-2023 | 09-09-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1973076/ | 855 F. Supp. 897 (1994)
METROPLEX INFUSION CARE, INC., Plaintiff,
v.
LONE STAR CONTAINER CORP., New World Services, Ltd., New World Claims Services, Ltd. and International Rehabilitation Associates, Inc., Defendants.
Civ. A. No. 3:CV-94-0327-P.
United States District Court, N.D. Texas, Dallas Division.
June 13, 1994.
*898 Marilyn K. Lahr, Dallas, TX, for plaintiff Metropolitan Infusion Care, Inc.
Robert H. Mow, Gregory S. Weiss, Hughes & Luce, Dallas, TX, for defendants New World Services, Ltd. and New World Claims Services, Ltd.
Douglas D. Haloftis, Dallas, TX, for defendant Lone Star Container Corp.
James L. Johnson, Dallas, TX, for defendant International Rehabilitation Associates, Inc.
ORDER DENYING MOTION TO REMAND
SOLIS, District Judge.
Now before the Court is Plaintiff's Motion for Remand and Brief in Support of Plaintiff's *899 Motion for Remand, filed March 18, 1994.
I. Background Facts
In 1992, Maria DeLeon was diagnosed with metastic renal cell cancer of the bone. At the time, she was an eligible beneficiary under a self-insured group medical plan provided by Defendant Lone Star Container Corporation ("Lone Star") to her husband, Raphael DeLeon. The Plan was administered by Defendants New World Services, Limited ("New World Services") and New World Claims Services, Limited ("New World Claims Services"). New World Claims Services had engaged Defendant International Rehabilitation Associates, Inc. (misidentified in the Original Petition as "Intracorp Medical Case Management") ("Intracorp") as its case management company.
Ms. DeLeon hired Plaintiff, Metroplex Infusion Care, Inc. ("Metroplex"), to administer a series of chemotherapy treatments by means of home infusion care beginning on May 2, 1992. Prior to initiating treatment, Metroplex contacted Lone Star to verify Ms. DeLeon's benefits and eligibility and was referred to New World Services. Metroplex alleges that New World Services confirmed coverage but referred Metroplex to Intracorp in order to negotiate the rates for the drugs and services to be provided Ms. DeLeon. Metroplex further asserts that New World and International agreed to pay the costs of Ms. DeLeon's treatment but subsequently made payment on only a portion of Metroplex' bill.
Metroplex filed the instant lawsuit against Defendants, alleging causes of action for breach of contract, fraud, and quantum meruit. Defendants thereafter removed this action on the basis that Plaintiff's state law claims are preempted by ERISA in that they must be treated as a claim for benefits under an ERISA-regulated plan over which this Court has federal question jurisdiction. 29 U.S.C. § 1144(a). Plaintiff responded by filing its motion to remand which the Court now considers.
II. Standards Applicable to Motion for Remand
A motion for remand lies where there is no diversity of citizenship, or the claim does not in fact "arise under" federal law. Such defects go to the court's subject matter jurisdiction and can be raised at any time. 28 U.S.C. § 1447(c); Fed.R.Civ.P. 12(h)(3); American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S. Ct. 534, 95 L. Ed. 702 (1951). Plaintiff's motion for remand effectively forces Defendants, the parties who invoked the federal court's removal jurisdiction, to prove whatever is necessary to support the existence of diversity or federal question jurisdiction. B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir.1981).
Where the parties in a case are not diverse, removal normally is justified only if federal question jurisdiction is apparent from the plaintiff's petition. Gully v. First Nat'l Bank, 299 U.S. 109, 57 S. Ct. 96, 81 L. Ed. 70 (1936); Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S. Ct. 2841, 2846, 77 L. Ed. 2d 420 (1983). A narrow exception to the "well-pleaded complaint" rule, however, is created by the complete preemption doctrine, which permits federal courts to exercise jurisdiction over state law claims that have been completely preempted by Congress. Thus, federal courts may exercise removal jurisdiction over cases raising state law claims that are preempted by ERISA even though the petition does not on its face reflect the existence of any federal question. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987). If, on the other hand, the plaintiff's state law causes of action are not subject to ERISA preemption, no federal question appears on the face of the plaintiff's complaint, and the federal court lacks jurisdiction over the case.
III. Discussion
ERISA's preemption clause specifies, in pertinent part, that the provisions of ERISA "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan."[1] ERISA *900 § 514(a), 29 U.S.C. § 1144(a); Christopher v. Mobil Oil Corp., 950 F.2d 1209, 1217 (5th Cir.1992), cert. denied, ___ U.S. ___, 113 S. Ct. 68, 121 L. Ed. 2d 35 (1992). The Supreme Court has repeatedly stressed that this "relate to" standard must be interpreted expansively, and that the words are to be given their "broad common-sense meaning." Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S. Ct. 478, 483, 112 L. Ed. 2d 474 (1990); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 739, 105 S. Ct. 2380, 2389, 85 L. Ed. 2d 728 (1985). Any state law which has a connection with or reference to an employee benefit plan is generally preempted. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S. Ct. 2890, 77 L. Ed. 2d 490 (1983). However, "[s]ome state actions may affect employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law `relates to' the plan." Id. at 100, 103 S. Ct. at 2901. Lawsuits against ERISA plans for "run-of-the-mill" state law claims, including certain tort actions, are therefore not preempted by ERISA, despite the fact that they plainly affect and involve employee benefit plans. See Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 833, 108 S. Ct. 2182, 2187, 100 L. Ed. 2d 836 (1988).
As a general proposition, state common-law contract and tort claims that relate to an employee benefit plan and that are based upon laws of general application (that is, not specifically related to insurance, employee severance, or discrimination) are preempted by ERISA. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S. Ct. 1542, 95 L. Ed. 2d 55 (1987); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 107 S. Ct. 1549, 95 L. Ed. 2d 39 (1987); Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Cir.1992); Cefalu v. B.F. Goodrich Co., 871 F.2d 1290 (5th Cir.1989). ERISA's preemptive and civil enforcement provisions operate to "recharacterize" such claims into actions arising under federal law. Degan v. Ford Motor Company, 869 F.2d 889, 893 (5th Cir.1989). Thus, it is settled law that ERISA preempts state law claims brought by a plan participant or beneficiary alleging improper processing of a claim for plan benefits. Pilot Life, 481 U.S. at 48, 107 S. Ct. at 1553. Furthermore, because an assignee of benefits under ERISA is a statutory beneficiary of the plan, LaFuria v. Louisiana Health Service Indem. Co., 826 F. Supp. 1017, 1019 (W.D.La.1993), claims brought by a health care provider in its capacity as assignee of a beneficiary's ERISA plan rights are subject to ERISA preemption to the same extent as if they had been brought by the beneficiary.
Plaintiff, however, points out that it has initiated the instant action in its independent capacity, rather than as an assignee of Ms. DeLeon, the plan beneficiary. Plaintiff argues that this fact effectively takes its claims out of ERISA coverage and renders them ordinary, "run-of-the-mill" state law claims which do not give rise to federal jurisdiction. In support of its position, Plaintiff relies upon the Fifth Circuit's holding in Memorial Hosp. System v. Northbrook Life Ins. Co., 904 F.2d 236, 248-49 (5th Cir.1990). There, the court ruled that a health care provider's state law claim for negligent misrepresentation of insurance coverage was not subject to ERISA preemption because it did not directly affect the relationship between the traditional ERISA entities (namely, the employer, the plan and its fiduciaries, and the participants and beneficiaries).
The Court disagrees with Plaintiff's analysis. Memorial is distinguished from the case at bar in one critical respect, for it involved an action for misrepresentation regarding the existence of coverage, rather than merely its nature or extent. Id. at 246. Thus the Fifth Circuit pointed out that
Memorial neither seeks benefits from the plan nor claims that the plan acted improperly in processing and denying Memorial's claim. The claim is thus independent of the plan's actual obligations under the terms of the insurance policy and in no way seeks to modify those obligations.
Id. at 250. The court's primary intent in Memorial, therefore, was to allow the provider *901 a remedy where recovery under ERISA would not have been possible because ERISA coverage had been denied altogether. Brown Schools, Inc. v. Florida Power Corp., 806 F. Supp. 146, 150-51 (W.D.Tex.1992); accord, Hospice of Metro Denver, Inc. v. Group Health Ins. of Oklahoma, 944 F.2d 752 (10th Cir.1991); but see Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272 (6th Cir. 1991), cert. dism'd, ___ U.S. ___, 113 S. Ct. 2, 120 L. Ed. 2d 931 (1992).
This case, in contrast, more closely resembles the factual circumstances of Hermann Hosp. v. MEBA Medical & Benefits Plan, 959 F.2d 569 (5th Cir.1992) ("Hermann II") in which the Fifth Circuit reaffirmed its prior ruling in Hermann Hosp. v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1291 (5th Cir.1988) ("Hermann I") that a third party medical provider's state law misrepresentation claims were indeed preempted under ERISA. The apparent contradiction between the Hermann cases and Memorial may be resolved in light of their underlying factual differences: whereas there was no ERISA coverage in Memorial, so that the hospital would have had no recourse under either ERISA or state law had its state law claims been preempted, in Hermann ERISA coverage did exist but had allegedly been improperly denied. Brown Schools, 806 F.Supp. at 150-51.
A number of district courts faced with the issue subsequent to the Hermann II decision have successfully reconciled the Hermann cases with the court's holding in Memorial by concluding that representations made to a health care provider regarding coverage "relate to" an ERISA plan for purposes of ERISA preemption if they concern the nature of the coverage under the plan, but not if they concern the availability of coverage. Oaks Psychiatric Hosp., Inc. v. American Heritage Life Ins. Co., 814 F. Supp. 553, 555 (W.D.Tex.1993); Forest Springs Hosp. v. Illinois New Car & Truck Dealers Ass'n Employees Ins. Trust, 812 F. Supp. 729, 732 (S.D.Tex.1993), citing Parkside Lutheran Hosp. v. R.G. Zeltner & Assoc., Inc., 788 F. Supp. 1002 (N.D.Ill.1992). This reasoning, moreover, is consistent with Congress' intent in passing ERISA, for allowing a third party provider to maintain state law claims which would otherwise be preempted under ERISA would permit the provider not only to expand the limited rights granted a plan beneficiary but also to circumvent the enforcement provisions of ERISA altogether simply by filing suit in state court under state law. Brown Schools, 806 F.Supp. at 149.
Metroplex has made no allegation that any Defendant ever denied the availability of coverage for Ms. DeLeon. Indeed, Metroplex admits that it received payments for services under the plan but seeks additional payment on the basis of Defendants' alleged representations regarding the extent of coverage and their subsequent processing of Metroplex' claims. Its state law claims therefore "relate to" the ERISA plan and are subject to preemption even though they were brought by Metroplex in its independent capacity. See Hermann II, 959 F.2d at 578. Plaintiff's causes of action are more than "run-of-the-mill" state law claims which fall outside of the scope of ERISA.
Because ERISA preempts Plaintiff's claims, this Court may properly exercise jurisdiction over them. Plaintiff's Motion for Remand must therefore be denied.
IV. Conclusion
IT IS THEREFORE ORDERED that Plaintiff's Motion for Remand is hereby DENIED.
IT IS SO ORDERED.
NOTES
[1] "State law" is broadly defined in ERISA § 514(c)(1) as "all laws, decisions, rules, regulations, or other State action having the effect of law" and hence includes state common law. 29 U.S.C. § 1144(c)(1). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1975709/ | 153 Ill. App. 3d 176 (1987)
505 N.E.2d 1067
SYLVIA PEREZ, Plaintiff-Appellee,
v.
THE CIVIL SERVICE COMMISSION et al., Defendants-Appellants.
No. 86-0004.
Illinois Appellate Court First District (4th Division).
Opinion filed February 11, 1987.
Rehearing denied March 30, 1987.
*177 Neil F. Hartigan, Attorney General, of Springfield (Roma Jones Stewart, Solicitor General, and Imelda R. Terrazino, Assistant Attorney General, of Chicago, of counsel), for appellants.
Alan Rhine, of Chicago, for appellee.
Reversed and remanded.
JUSTICE LINN delivered the opinion of the court:
The Illinois Civil Service Commission (the Commission) and the Department of Registration and Education (the Department) bring this appeal seeking reversal of a trial court's ruling that the Commission lost jurisdiction and could not, as a result, conduct a hearing on the merits of plaintiff Sylvia Perez' discharge from employment. Perez had previously been discharged from her position with the Department for, inter alia, allegedly falsifying official time report documents. Following her discharge from the Department, Perez requested a hearing before the Commission.
Prior to the hearing, Perez made a discovery request for over 500 documents that were in the Department's possession. Several months *178 later, while the documents were still being gathered, Perez filed suit in the circuit court of Cook County asking the trial court to enjoin the Commission from continuing with Perez' discharge hearing. Perez claimed that the Department had failed to comply with her discovery request and that this failure resulted in her hearing being unreasonably delayed in violation of the Personnel Code (Code) (Ill. Rev. Stat. 1985, ch. 127, par. 63b101 et seq.).
Following a hearing on the matter, the trial court agreed with Perez that her rights under the Personnel Code had been violated and that as a result, the Commission's jurisdiction to hold a hearing on the merits of Perez' discharge was terminated. That being the case, the trial court barred the Commission from continuing with Perez' discharge hearing and ordered the Department to reinstate her with full back pay and benefits.
The Commission now appeals contending that the trial court erred in ruling that the Commission lost its jurisdiction to conduct a hearing on the merits of Perez' discharge.
We reverse the ruling of the trial court and remand this matter to the Commission for a hearing on the merits of Perez' discharge.
BACKGROUND
Plaintiff, Sylvia Perez, was employed by the Department as a certified licensing investigator from August 1975 until June 29, 1984. On June 29, 1984, Perez was suspended for, inter alia, allegedly falsifying official time report documents and for violating time limitations for completing reports.
On August 3, 1984, Perez filed a request with the Commission seeking a hearing on the merits of her discharge. A hearing date was set for August 21, 1984. On August 10, 1984, however, Perez filed a discovery request with the Department. The discovery request asked for over 500 documents and sought interviews with six employees of the Department. In addition, however, Perez requested that the August 21, 1984, hearing be continued to a future date.
The Department objected to the continuance. Nevertheless, the Commission granted Perez' request and continued the hearing to October 17, 1984. Subsequently, pursuant to the Department's request, the hearing was continued to January 15, 1985. The Department asked for the continuance in order to fully comply with Perez' previous discovery request.
By agreement of both parties, the hearing was again continued to March 13, 1985. Prior to that date, on March 11, 1985, however, Perez filed a motion to dismiss with the Commission. In her motion, Perez *179 claimed that the Department had failed to comply with her discovery request within a reasonable period of time and that this justified the dismissal of the Department's case against Perez.
A hearing on Perez' motion to dismiss was held before a hearing officer on March 13, 1985. Soon thereafter, on April 11, 1985, the Department notified Perez that all of the documents she had previously requested were now available for her inspection.
On May 6, 1985, the hearing officer determined in a written memorandum that the Department had not been diligent in complying with Perez' discovery request. The hearing officer also recommended that Perez' motion to dismiss be granted.
Both parties thereafter filed briefs with the Commission regarding the Hearing Officer's recommended decision. On May 15, 1985, the Commission entered a decision rejecting the hearing officer's recommendation. The Commission determined that Perez' leaving had not been unreasonably delayed. In addition, the Commission ordered that a full hearing on the merits of Perez' discharge be held on June 14, 1985.
On May 23, 1985, Perez filed this lawsuit in the trial court. Perez sought: (1) a preliminary injunction barring the Department and the Commission from holding the June 14, 1985, hearing on the merits of her discharge; (2) a determination that the Commission was without jurisdiction to proceed with the discharge hearing; and (3) an order reinstating Perez to her former position with full back pay and benefits.
However, on May 28, 1985, while her civil lawsuit was still pending, Perez filed a motion with the Commission requesting the Commission to continue the hearing set for June 14, 1985, to a later date.
On July 1, 1985, the trial court entered an order finding: (1) that the Department's failure to comply with Perez' discovery request had unreasonably delayed Perez' hearing before the Commission in violation of the Personnel Code; (2) that as a result, the Commission was without jurisdiction to hold Perez' hearing; (3) that the Commission, in not accepting the hearing officer's recommendation (to dismiss the charges against Perez), had acted arbitrarily and without justification; and (4) that Perez should be reinstated with full back pay and benefits.
The Commission now appeals claiming that the trial court erred in ruling that the Commission had lost its jurisdiction to conduct a hearing on the merits of Perez' discharge.
OPINION
I
1 The determinative issue in this appeal is whether, under the *180 facts present in the case at bar, the Commission complied with the Personnel Code (Ill. Rev. Stat. 1985, ch. 127, par. 63b111.) As a court of review, our function is to determine whether the Commission's decision (that Perez' hearing was not unreasonably delayed) was contrary to the manifest weight of the evidence. Crittenden v. Board of Fire & Police Commissioners (1985), 139 Ill. App. 3d 154, 487 N.E.2d 115.
The relevant portion of the Personnel Code provides:
"No officer or employee under jurisdiction B, relating to merit and fitness, who has been appointed under the rules and after examination, shall be removed, discharged or demoted, or to be suspended for a period of more than 30 days, in any 12 month period, except for cause, upon written charges approved by the Director of Personnel, and after an opportunity to be heard in his own defense if he makes written request to the Commission within 15 days after the serving of the written charges upon him. Upon the filing of such a request for a hearing, the Commission shall grant a hearing within 30 days." Ill. Rev. Stat. 1985, ch. 27, par. 63b111.
2 The purpose of the Personnel Code is to establish a system of personnel administration based on merit. (Ragano v. Illinois Civil Service Com. (1980), 80 Ill. App. 3d 523, 400 N.E.2d 97.) Consistent with this purpose, employees governed by the Code possess certain procedural protections when they are being considered for discharge, demotion, or suspension. (McReynolds v. Civil Service Com. (1974), 18 Ill. App. 3d 1062, 311 N.E.2d 308.) The right to a hearing following an employee's suspension is one of those procedural protections.
3 The Code's provisions reveal an attempt to balance the interests of the employee (in being free from suffering monetary injury) with the interests of the State (in removing unproductive employees). (See Ragano v. Illinois Civil Service Com. (1980), 80 Ill. App. 3d 523, 400 N.E.2d 97; McReynolds v. Civil Service Com. (1974), 18 Ill. App. 3d 1062, 311 N.E.2d 308.) The interests of the employee as well as those of the State are best served when the uncertain status of the employee remains as short a period as possible. (18 Ill. App. 3d 1062, 1066, 311 N.E.2d 308.) To this end, the employee is given a statutory right to have a hearing before the Commission within 30 days of filing his request. Ill. Rev. Stat. 1985, ch. 127, par. 63b111.
4 An employee's right to a hearing within 30 days of requesting one cannot, however, be construed as being totally unqualified. (Holliday v. Civil Service Com. (1984), 121 Ill. App. 3d 763, 460 N.E.2d 358.) In Holliday, for example, an employee requested a hearing pursuant to the Personnel Code. Before that hearing commenced, however, the employee *181 filed a voluminous discovery request with his employer. Subsequently, at the scheduled hearing, the employer informed the Commission that it had not yet been able to gather all of the information requested by the employee and asked for a continuance.
The Commission granted the continuance and rescheduled the employee's hearing. The rescheduled date, however, was more than 30 days after the employee had filed his request for a hearing. Because of the delay, the employee filed a civil suit claiming that his rights under the Personnel Code had been violated.
The Holiday court found that because the delay in the hearing was caused by the employee's discovery request, the employee's statutory rights were not infringed. The court determined that an employee has no absolute right to a hearing within 30 days (of requesting one) where the hearing's delay is attributable to the employee's conduct. (121 Ill. App. 3d 763, 769, 460 N.E.2d 358.) Consequently, because the hearing's delay was a result of the employee's actions, the Commission retained jurisdiction over the dispute.
The position espoused by the Holliday court is supported by other cases involving the interpretation of statutes similar to the Personnel Code. In each instance, the statute involved, like the Personnel Code, requires that a hearing be held within 30 days of an employee's request.
In Massingale v. Police Board (1986), 140 Ill. App. 3d 378, 488 N.E.2d 1289, for example, the court reviewed the 30-day hearing requirement contained within section 10-2.1-17 of the Illinois Municipal Code (Ill. Rev. Stat. 1983, ch. 24, par. 10-2.1-17). The Massingale court found where a hearing is originally scheduled within the 30-day period but is thereafter continued at the request of the employee, the board's jurisdiction to hear the dispute is not terminated. Thus, even though the statute in Massingale required that a hearing be "commenced within 30 days" (Ill. Rev. Stat. 1983, ch. 24, par. 10-2.1-17) after the employee requested, the court nevertheless determined that the time requirement is suspended where it is the employee who requests a continuance. Massingale v. Police Board (1986), 140 Ill. App. 3d 378, 381, 88 N.E.2d 1289.
Likewise, in Riggins v. Board of Fire & Police Commissioners (1982), 107 Ill. App. 3d 126, 437 N.E.2d 327, the court, in reviewing the same statute, found that an employee's statutory right to a hearing within 30 days is not unbridled. In Riggins, a hearing was originally scheduled pursuant to an employee's request within the 30-day period. Prior to the hearing date, however, the employee filed a discovery request asking the employer for certain documents. This discovery request *182 delayed the hearing from proceeding. However, because the commencement of the hearing was delayed as a result of the employee's discovery request, the Riggins court found that the employee's statutory right to a hearing within 30 days had not been violated and that the board retained jurisdiction over the matter. 107 Ill. App. 3d 126, 129, 437 N.E.2d 327.
Furthermore, other courts reviewing statutes with similar 30-day hearing provisions have consistently held that where a delay in a hearing is attributable to an employee, no violation of the applicable statute occurs. See, e.g., Jones v. Board of Fire & Police Commissioners (1984), 127 Ill. App. 3d 793, 469 N.E.2d 393; Carrigan v. Board of Fire & Police Commissioners (1984), 121 Ill. App. 3d 303, 459 N.E.2d 659; Finin v. Board of Fire & Police Commissioners (1981), 98 Ill. App. 3d 879, 424 N.E.2d 976.
5 We agree with the position taken by the authority set forth above. Clearly, the 30-day hearing requirement contained within the Personnel Code cannot be read to be so inflexible that an employee, by merely requesting a continuance or asking for the discovery of certain documents, is thereby able to divest the Commission of jurisdiction over a particular dispute. To the contrary, we believe that the Commission retains jurisdiction where a hearing (originally scheduled by the Commission to be heard within 30 days after the employee's request) is delayed by conduct attributable to the employee. Such conduct can take the form of a voluminous discovery request (see, e.g., Riggins v. Board of Fire & Police Commissioners (1982), 107 Ill. App. 3d 126, 129, 437 N.E.2d 327) or can arise from the employee's own request for a continuance of the hearing date. See, e.g., Massingale v. Police Board (1986), 140 Ill. App. 3d 378, 381, 488 N.E.2d 1289.
Regardless of the exact cause, we believe the key inquiry is whether the employee's right to a hearing within 30 days has been delayed as a result of the employee's own behavior or, in the alternative, as a consequence of the employer's (or the Commission's) failure to properly pursue the matter without providing a good cause for the delay. In the former situation, the Commission retains authority over the dispute, whereas in the latter circumstance, the Commission may, depending on the facts, lose its jurisdiction to hear the matter.
In the case at bar, the Commission originally scheduled Perez' hearing on August 21, 1984, 18 days after Perez first filed her appeal with the Commission. On August 10, 1984, Perez filed her discovery request for certain documents possessed by the Department. Perez' discovery request included demands for the following information:
"(i) All charges for discharge filed by the Department of Registration *183 and Education filed since January 1, 1980 against any employee for falsifying or improperly completing Technical Time Reports;
(j) All files of any hearing before the Civil Service Commission of the State of Illinois concerning employees of the Department of Registration and Education held since January 1, 1984." (Emphasis added.)
Clearly, by making such a voluminous demand, Perez must have known that it would take the Department a substantial period of time to gather together all of the requested documents. Indeed, a party cannot, on the one hand, request the production of hundreds of documents (spanning a period of four years) and then, on the other hand, complain that a hearing has been unreasonably delayed where the hearing's delay is a direct result of the party's own discovery request. Accord, Riggins v. Board of Fire & Police Commissioners (1982), 107 Ill. App. 3d 126, 437 N.E.2d 327.
Moreover, the record discloses that the Commission has been diligent in its efforts to provide Perez with the hearing to which she is entitled. As set forth previously, it was Perez who first asked that the hearing be continued from August 21, 1984, to October 17, 1984. Perez also voluntarily agreed to continuing the hearing from January 15, 1985, to March 13, 1985. In addition, it was Perez who requested to have the hearing continued from May 28, 1985, to June 14, 1985. Thus, of the four continuances granted by the Commission, two were specifically requested by Perez and the third was consented to by her.
6 Based on this record, it is evident that Perez' hearing before the Commission was delayed not because of a failure on the part of the Commission or Department, but, rather, as a result of her own actions. Her discovery request, because of its magnitude, is by itself sufficient justification for the Commission's delay in holding Perez' hearing. However, when combined with the continuances which she requested and/or acquiesced to, it is evident that the hearing's delay was attributable to Perez. That being the case, Perez' statutory rights under the Personnel Code were not violated and the Commission retains its jurisdiction over this dispute. Thus, we rule that the Commission's decision that the delay in Perez' hearing was attributable to her actions was not against the manifest weight of the evidence and the trial court's ruling to the contrary is reversed.
Perez strenuously argues that the case of Ragano v. Illinois Civil Service Com. (1980), 80 Ill. App. 3d 523, 400 N.E.2d 97, is directly on point (with the facts of this case) and that, therefore, the ruling in Ragano is "controlling precedent." A review of the Ragano opinion, however, *184 discloses that our decision in the present case is completely consistent with the position taken by the Ragano court.
In Ragano, a hearing before the Commission was properly scheduled within 30 days after the employee filed his request. However, because key evidence (a trial transcript) was not available until a later date, the hearing was continued. The hearing was finally held 140 days after the employee first filed his request.
In finding that the Commission had lost jurisdiction over the matter, the Ragano court noted that the Department of Personnel had failed to show good cause as to why the hearing had to be postponed for 140 days. (80 Ill. App. 3d 523, 529, 400 N.E.2d 97.) The court pointed out that the transcript became available October 1, 1976, but that the hearing was not held until February 18, 1977. Neither the Department nor the Commission could explain why such a lengthy delay had occurred. Consequently, because the hearing was delayed as a result of the Department of Personnel's conduct, and not the fault of the employee, the Ragano court determined that the employee's statutory rights under the Personnel Code were violated and that as a result, the Commission lost its jurisdiction over the matter. 80 Ill. App. 3d 523, 529, 400 N.E.2d 97.
Our ruling in the case at bar is not in conflict with the Ragano decision. Like the Ragano court, we believe that if an employee's hearing is delayed beyond 30 days by the employer (in this case the Department) and without good cause, the employee's statutory rights under the Personnel Code are violated and the Commission's jurisdiction over the dispute is properly terminated. Here, however, the hearing's delay was not the fault of the Department, but rather arose from Perez' own conduct. Accord, Riggins v. Board of Fire & Police Commissioners (1982), 107 Ill. App. 3d 126, 437 N.E.2d 327.
CONCLUSION
Accordingly, for the reasons set forth above, the ruling of the circuit court of Cook County is reversed and this matter is remanded to the Civil Service Commission for a hearing on the merits of Perez' discharge.
Reversed and remanded.
McMORROW, P.J., and JIGANTI, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2371649/ | 902 S.W.2d 68 (1995)
TRUCK INSURANCE EXCHANGE, Appellant,
v.
Calvin N. MUSICK, Appellee.
No. 2-94-121-CV.
Court of Appeals of Texas, Fort Worth.
June 8, 1995.
Rehearing Overruled July 27, 1995.
*69 Michael J. Catania, Bennett & Hall, Fort Worth, for appellant.
Carol Ann Carson, Rickey J. Brantley, Jose, Henry & Brantley, Fort Worth, for appellee.
Before ANNETTE STEWART and PAUL COLLEY, JJ. (Retired) (Sitting by Assignment).
OPINION
STEWART, Justice (Retired).
The controlling issue before this court is the validity of the "fellow employee" exclusion in a standard form Texas Motor Vehicle liability policy. Appellant, Truck Insurance Exchange ("Truck") sought a declaratory judgment, contending that the fellow employee exclusion relieved it of any duty to defend appellee, Calvin Musick, in an underlying personal injury action. In three points of error, Truck asserts the trial court erred in holding the fellow employee exclusion partially unenforceable, in holding that Truck has a duty to defend Musick in the underlying personal injury suit, and in holding that Truck has an obligation to make payment under its policy. We reverse the trial court's judgment and render judgment for Truck.
FACT SUMMARY
Musick purchased from Truck a Texas Business Auto Policy covering his 1984 Ford one-half ton pickup truck. The policy coverage period began November 30, 1988 and ended November 30, 1989. On February 24, 1989, Musick and Luis Melesio Quilo were both employed by J.D. Abrams, Inc. ("Abrams"), a construction company, when Musick accidentally backed his pickup truck over Quilo. Quilo died as a result of a traumatic head injury, and in December 1990, his family filed suit against Abrams and Musick, alleging that Musick's negligent operation of his vehicle caused Quilo's death. Truck and Musick stipulated that Musick and Quilo were both employees of Abrams and were both performing their job duties in the course and scope of their employment for Abrams at the time of the accident.
Musick requested coverage under the liability policy issued by Truck, but Truck denied coverage, citing the fellow employee exclusion within the policy. Truck then filed for declaratory relief, seeking a declaration that it was not under a duty to provide a defense to Musick in the underlying personal injury suit. The cause was submitted to the trial court on stipulated facts, the testimony of the medical examiner, and trial briefs.
The trial court rendered judgment for Musick and concluded that the "fellow employee" exclusion is partially unenforceable, that Truck has an obligation to provide a defense to Musick, and that Truck has an obligation to make payment under its policy.
At the outset, we note that declaratory judgments are reviewed under the same standards as other judgments and decrees. See TEX.CIV.PRAC. & REM.CODE ANN. § 37.010 (Vernon 1986). The trial court's conclusion, being one of law, will be upheld on appeal if it can be sustained on any legal theory supported by the evidence. In re W.E.R., 669 *70 S.W.2d 716, 717 (Tex.1984). If reversal is warranted, we render judgment unless a remand is necessary for further proceedings. See Lone Star Gas Co. v. Railroad Comm'n of Texas, 767 S.W.2d 709, 710 (Tex.1989).
POINT OF ERROR ONE
In its first point of error, Truck complains that the trial court erred in holding that the "fellow employee" exclusion in the instant policy is partially unenforceable. Musick's policy contained the following provisions:
A. COVERAGE
We will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership; maintenance or use of a covered auto.
However, we have no duty to defend suits for bodily injury or property damage not covered by this Coverage Form....
B. EXCLUSIONS
This insurance does not apply to any of the following:
5. FELLOW EMPLOYEE
Bodily injury to any fellow employee of the insured arising out of and in the course of the fellow employee's employment.
If an insurance company seeks to invoke an exception or limitation to the insurance provided under the policy, Texas law requires stringent construction of any exception. Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex.1987) (citing General American Indem. Co. v. Pepper, 161 Tex. 263, 339 S.W.2d 660, 661 (Tex.1960)). It is well-established that if the language of an insurance policy is susceptible to more than one construction, the policy must be construed strictly against the insurer and in favor of the insured. Barnett, 723 S.W.2d at 666 (citing Glover v. National Ins. Underwriters, 545 S.W.2d 755, 761 (Tex.1977)). Any intent to exclude coverage must be expressed in clear and unambiguous language. National Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991).
We conclude that the plain language of the exclusion expresses the insurer's intent clearly and unambiguously. The parties to the instant suit have stipulated that Musick and Quilo were fellow employees of Abrams and that the bodily injury suffered by Quilo arose out of and in the course and scope of his employment. Thus, under the plain language of the exclusion, Truck has no duty to provide coverage.
Truck asserts the trial court apparently relied on National County Mutual Fire Ins. Co. v. Johnson, 879 S.W.2d 1 (Tex.1993) in holding the fellow employee exclusion partially unenforceable. In Johnson, the Texas Supreme Court considered whether the "family member" exclusion was invalid because it was inconsistent with the legislative purpose of ensuring that every motor vehicle is covered by an automobile liability policy to protect all claimants against losses arising out of the operation of the vehicle. Id. at 2. The Texas Supreme Court then held the family member exclusion invalid, stating:
The exclusion prevents a specific class of innocent victims, those persons related to and living with the negligent driver, from receiving financial protection under an insurance policy.
Id. at 3.
Truck argues that, unlike the family member exclusion, which is inconsistent with state law requiring liability coverage, the fellow employee exclusion is specifically authorized by the Texas Motor Vehicle Safety Responsibility Act ("the Act"), which in relevant part, reads:
(e) Such motor vehicle liability policy shall not insure:
1. Any obligation for which the insured or any company as his insurer may be held liable under any workmen's compensation law.
See TEX.REV.CIV.STAT.ANN. art. 6701h, § 21(e)(1) (Vernon 1977). Additionally, Truck argues that the policy reasons for holding the family member exclusion invalid are not present for the fellow employee exclusion because Quilo's family is not left without *71 a remedy as a result of this exclusion. The family can sue under the applicable workers' compensation laws.
Musick replies that section 21(e)(1) must be read in conjunction with the entire Act and its purpose. He maintains that the Legislature did not intend that Texas drivers could circumvent the mandatory insurance requirement by carrying worker's compensation insurance and that had the Legislature intended to make worker's compensation insurance an acceptable substitute for motor vehicle coverage, it would have seen fit to include such language in the Act.
Musick also relies on Westchester Fire Ins. Co. v. Tucker, 512 S.W.2d 679, 685 (Tex.1974) and American Liberty Ins. Co. v. Ranzau, 481 S.W.2d 793 (Tex.1972), where the Supreme Court held that exclusions contrary to the statute requiring mandatory insurance are ineffectual. He observes that the Supreme Court reaffirmed these holdings in Johnson, and he argues that under its rationale, the fellow employee exclusion is invalid because it conflicts with the provisions of the Act and with the public policy underlying the Act. Johnson, 879 S.W.2d at 5.
We agree with Truck. Musick's authorities all rely on the exclusion at issue being "contrary to" or "in conflict with" the statute, but, here, the fellow employee exclusion is consistent with the statute in this case if Musick or his insurer may be held liable under the applicable worker's compensation statute, Tex.Rev.Civ.Stat.Ann. art. 8306 (Vernon 1989),[1] for Quilo's personal injury and/or death.[2]
The Worker's Compensation Act specifically provides that recovery of worker's compensation benefits is the exclusive remedy for personal injury sustained by an employee in the course of his employment and that the employee has no right of action against his employer or against an employee of his employer for damages for such personal injury. See TEX.REV.CIV.STAT.ANN. art. 8306, § 3 (Vernon 1989) (repealed);[3]Aranda v. Insurance Co. of North Am., 748 S.W.2d 210, 214 (Tex.1988). The parties have stipulated that Musick and Quilo were fellow employees of Abrams and that Quilo was injured while performing job duties in the course and scope of his employment for Abrams. Under these facts, the Legislature has determined that the worker's compensation statute provides the exclusive means of redress to Quilo's family.
Further, by enacting section 21(e)(1), of the Texas Safety Responsibility Act, the Legislature's clear intent was to avoid conflict with the specific provisions of the Worker's Compensation Act and to leave the compensation scheme embodied in the latter act undisturbed. Hence, the fellow employee exclusion is not against public policy; it is an expression of it.
We hold the fellow employee exclusion is valid and enforceable. We sustain Truck's first point of error.
POINTS OF ERROR TWO AND THREE
Truck complains next that, because the trial court erred in holding the "fellow employee" exclusion partially unenforceable, it committed additional error by requiring Truck to defend Musick in the underlying personal injury suit (point of error two) and to make payment under the policy should a judgment be rendered in the underlying suit (point of error three).
Our ruling on point of error one disposes of points two and three. Because we have ruled that the fellow employee exclusion is enforceable under our facts, Musick's motor vehicle policy does not provide coverage for *72 the underlying personal injury suit. Consequently, Truck has no duty to defend Musick. Fidelity & Guar. Ins. Underwriters v. McManus, 633 S.W.2d 787, 788 (Tex.1982), and, the duty to pay under the policy never arises. We sustain points two and three.
We reverse the judgment of the trial court and we render judgment for Truck.
PAUL COLLEY, J. (Retired) (Sitting by Assignment), concurs without opinion.
NOTES
[1] The citations in this opinion are to the version of the statute in effect at the time of Quilo's injury in February 1989. See Harris v. Varo, Inc., 814 S.W.2d 520 (Tex.App.Dallas 1991, no writ) (provisions of Worker's Compensation Act in effect at the time of injury determine rights and duties of the parties.)
[2] Although the parties did not stipulate regarding whether Abrams and Musick were covered by worker's compensation insurance, both parties assume so in their briefs. Accordingly, for purposes of this opinion, we likewise assume that, under the facts of this case, section 21(e)(1) is applicable here.
[3] Repealed by Act of December 13, 1989, 71st Leg., 2d C.S., ch. 1, 1989 Tex. Gen. Laws 114. (current version at Tex.Lab.Code § 401.001 (Vernon Pamph.1995)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2081801/ | 862 F. Supp. 1567 (1994)
Jerry B. HODGEN and Bobbie Sue Hodgen
v.
FOREST OIL CORPORATION, Ronald J. Doucet, A & A Boats, Inc. and C & G Marine Service, Inc., et al.
Civ. A. No. 93-0322.
United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
September 15, 1994.
*1568 *1569 Jerry G. Jones, Jones & Alexander, Cameron, LA, for plaintiff and intervenor-defendant Jerry B. Hodgen.
Donald Coleman Brown, Todd M. Ammons, Woodley, Williams, Fenet, Palmer, Boudreau & Norman, Lake Charles, LA, for defendants, cross-claimants, third party plaintiffs and intervenors-defendants Forest Oil Corp., in its capacity as platform owner, and Ronald J. Doucet.
D. Kirk Boswell, Stephen E. Mattesky, Terriberry, Carroll & Yancey, New Orleans, LA, for third-party defendant Commercial Union Ins. Co. and defendants, cross-defendants, intervenor-defendants and third-party plaintiffs A & A Boats, Inc. and C & G Marine Service, Inc.
James R. Sutterfield, Bonnie M. Steiner, Nathan L. Schrantz, Hoffman, Sutterfield, Esenat & Bankston, New Orleans, LA, for third-party defendants Chancellor Ins. Co., Ltd., Yorkshire Ins. Co., Ltd., Cornhill Ins. PLC, Allianz Intern. Ins. Co., Ltd., and Ocean Marine Ins. Co., Ltd.
Edward F. LeBreton, III, Cindy T. Matherne, Rice, Fowler, Kingsmill, Vance, Flint & Booth, New Orleans, LA, for third-party defendant and third-party plaintiff Albany Ins. Co.
Kevin J. Koenig, Raggio, Cappel, Chozen & Berniard, Lake Charles, LA, for intervenor Aetna Cas. and Sur. Co.
Carl James Hebert, Michael W. Mallory, Evans & Co., New Orleans, LA, for defendant, intervenor-defendant, cross-claimant and third-party plaintiff Forest Oil Corp. in its capacity as time-charterer.
James A. Cobb, Jr., John F. Emmett, Emmett, Cobb, Waits & Kessenich, for cross-defendants, intervenor-defendants, and third-party plaintiffs A & A Boats, Inc. and C & G Marine Service, Inc.
*1570 Paul B. David, Richard J. Guidry, Broussard, David & Daigle, Lafayette, LA, for cross-defendant and third-party defendant Operators and Consulting Services, Inc.
Muriel O. Van Horn, Lenfant & Associates, New Orleans, LA, for third-party defendant Aetna Cas. & Sur. Co.
MEMORANDUM RULING
PUTNAM, Senior District Judge.
This matter arises out of injuries sustained by plaintiff, Jerry B. Hodgen, on May 5, 1991 while making a swing rope transfer from a fixed platform onto a vessel in the Gulf of Mexico. In written reasons dated April 26, 1994, and amended April 28, 1994, we found that defendants Forest Oil Corporation, in its capacity as time charterer of the M/V "Miss Deborah" (hereinafter "Forest"), and A & A Boats, Inc. and C & G Marine Service, Inc. (hereinafter "A & A/C & G") were both negligent in causing plaintiff's injuries based on general maritime court principles embodied in 33 U.S.C. § 905(b). We awarded damages in the amount of $2,402,990.19 and apportioned defendants' fault at 85% for Forest and 15% for A & A/C & G. We also found that Forest was not at fault in its capacity as platform owner, and that plaintiff was Forest's borrowed employee at the time of the accident.[1]
Subsequent to that ruling, on May 27, 1994, 862 F. Supp. 1560 the Court issued a ruling on motion for reconsideration, whereby we dismissed Forest's and A & A/C & G's claims for contractual indemnity against plaintiff's employer, Operators and Consulting Services, Inc. (hereinafter "OCS") pursuant to the Louisiana Oilfield Indemnity Act ("Anti-Indemnity Act"), LSA-R.S. 9:2780.[2] In that ruling, we left open the question of whether Forest and A & A/C & G were entitled to coverage as additional assureds under OCS's insurance policies.
In an order dated June 10, 1994, the Court directed the parties to submit memoranda, documents and deposition transcripts with respect to all remaining claims in the case. Those claims are as follows:
1. Cross-claim by Forest against OCS for defense costs;
2. Forest and A & A/C & G's third-party complaint against OCS's underwriters for status as additional assureds;
3. Third-party complaint by Albany Insurance Company against Aetna Casualty and Surety Company for declaration that coverage provided by Aetna's policy primes that of Albany's;
4. Intervention by Aetna Casualty and Surety Company to recover medical expenses and wage replacement benefits that it has paid to plaintiff;
5. Claims by Forest and A & A/C & G that they are entitled to limitation of liability;
6. Third-party complaint by Forest against Albany Insurance Company and Commercial Union Insurance Company for coverage against plaintiff's claims; and
7. Cross-claim by Forest against A & A/C & G for breach of contract.
With that background, this ruling will address those remaining issues.
Cross-claim by Forest against OCS for Defense Costs
The Forest/OCS contract provides that OCS will indemnify, defend, and save harmless Forest from any and all claims brought against it which arise out of the performance of the contract. Although we have already dismissed its claims for indemnity, Forest now makes a claim for defense costs under Meloy v. Conoco, 504 So. 2d 833 (La.1987).
In Meloy, the La. Supreme Court held that the Anti-Indemnity Act is a complete prohibition to any demand for indemnification arising out of negligence and/or strict liability of a contractual indemnitee (Forest). However, the Meloy Court also noted that the Act prohibits indemnity for costs of defense only where there is "negligence or fault *1571 (strict liability) on the part of the indemnitee", and that the Act is not applicable where there has been a judicial finding that the indemnitee is free from fault.[3]
Forest argues that in light of the Court's finding that it was not at fault in its capacity as platform owner, it can now assert a Meloy claim for defense costs. Although we found Forest at fault in its capacity as time charterer of the vessel, Forest argues that it can maintain a Meloy claim by virtue of its lack of fault in its capacity as platform owner.
We find Forest's argument to be unpersuasive. The Anti-Indemnity Act does not make an exception if an indemnitee is found to be at fault in one capacity, and free of fault in another capacity. Regardless of whether Forest can be at fault in two different capacities for the purposes of plaintiff's tort claim against it, the fact remains that Forest is one entity, and the Court has made a judicial determination that this one entity was at fault in causing plaintiff's injuries. Accordingly, Forest's Meloy claim for defense costs is denied.
Forest and A & A/C & G's Cross-Claim Against OCS's Underwriters for Status as Additional Assureds
The Forest/OCS contract also contained a provision requiring OCS to name the Forest Group (Forest and A & A/C & G) as additional assureds under various marine insurance coverages, including the Longshore and Harbor Workers' Compensation Act, Maritime Employers Liability, in rem claims against vessels, and comprehensive general (CGL) coverage for maritime liabilities arising in connection with vessels furnished by the Forest Group. The contract also provided that this coverage would be primary insurance and exclusive of any other valid and collectible insurance.
In our previous ruling, in which we found that the Anti-Indemnity Act was applicable to the Forest/OCS contract, we held that the above provision was void and unenforceable under the Act unless the indemnitee (Forest Group) paid its share of the premiums for such insurance.[4] Noting that neither the Forest Group nor OCS and its underwriters had produced any evidence to support or refute this, we left the record open to allow the parties to conduct discovery to determine whether the Forest Group did in fact pay its share of premiums to be named as additional assureds.
A review of the evidence submitted on this point establishes that the Forest Group can produce no evidence that it paid any material portion of OCS's insurance premiums or reimbursed it therefor.[5] On the other hand, OCS and its underwriters have submitted cancelled checks for the premiums that it paid for such insurance, as well as the affidavit of Charles Dupuis, head of administrative services for OCS, who confirms that OCS paid 100% of the costs of such insurance, which was never reimbursed by the Forest Group.[6]
A & A/C & G makes much of the fact that OCS paid a premium for a blanket additional assured endorsement which did not change from year-to-year depending on for whom OCS worked. Since there was no premium that could be traced to the Forest Group in particular, A & A/C & G argues that there was no shifting of the economic burden of insurance coverage or liability insurance to OCS, and therefore the Anti-Indemnity Act is not implicated. This argument is without merit. Our sole inquiry is whether any material part of the cost of insuring the Forest Group was borne by OCS, which in fact is the case since OCS alone paid the insurance premiums.
In addition, Forest cites the deposition testimony of Ken Smith, a former Forest attorney, who testified that Forest had a "working policy" whereby contractors like OCS understood that they could factor in the cost of procuring such insurance when they submitted bids to work for Forest. However, Mr. Smith also conceded that a contractor could lose its contract if this factoring resulted *1572 in a bid that was higher than competitors.[7]
At any rate, we find that this so-called policy of Forest does not amount to a shift in the economic burden of carrying such insurance as was contemplated by the Marcel exception.
The Court in Marcel expressly adopted the exception to the Anti-Indemnity Act formulated by the Court in Patterson v. Conoco, 670 F. Supp. 182 (W.D.La.1987). The Marcel court characterized the contract in Patterson as follows:
Under the agreement at issue in Patterson, the employer of the injured plaintiff was required to provide insurance coverage indemnifying a third party,.... [t]he agreement provided, however, that the indemnitee would reimburse the employer for the insurance premiums. The indemnitee produced evidence documenting its payment of these premiums over a period of approximately 18 months. Based upon this reimbursement, the Court concluded that the agreement was not void because the indemnitee had paid for its own insurance. Marcel, 11 F.3d at 569.
Unlike the contract in Patterson, the Forest/OCS contract required OCS to alone bear the cost of paying such insurance premium. Accordingly, Forest's argument is without merit. In light of the foregoing, the cross-claims by Forest and A & A/C & G for additional assured status under OCS's CGL policy are dismissed.
Third-Party Complaint by Albany Insurance Co. Against Aetna
Albany Insurance Company is the excess Protection and Indemnity (P & I) insurer of A & A/C & G. It filed a third-party complaint against OCS's workers compensation and employers liability carrier, Aetna Casualty Company (hereinafter "Aetna"), alleging that because plaintiff was Forest's borrowed employee on the date of the accident, Forest is covered under OCS's policy, and such insurance primes Albany's excess policy pursuant to the terms of the Forest/OCS contract.
A review of the Aetna policy indicates that Forest was not named as an additional assured under the Aetna policy. Therefore, Forest is not covered under the policy. However, assuming arguendo that Forest in fact was an additional assured under the Aetna policy, this would be unenforceable under the Anti-Indemnity Act because OCS was required in the contract to procure and maintain this insurance at its sole expense. See supra.[8]
Aetna's Intervention to Recover Medical Expenses and Wage Replacement Benefits
Aetna provided statutory worker's compensation insurance coverage to Mr. Hodgen's employer, OCS. Pursuant to that policy, Aetna paid to, or on behalf of plaintiff, $219,712.11 as of July 29, 1994. Of this amount, $158,369.71 was paid for medical expenses incurred, and $61,342.40 for wage replacement indemnity benefits. Aetna contends that by virtue of its policy, it has subrogation rights to recover from Forest and A & A/C & G those medical expenses and benefits that it has paid.
Plaintiff argues that Aetna has waived its subrogation rights in the policy, and that he is thus entitled to retain in full his award for past lost wages and past medical expenses. Accordingly, we must first determine whether Aetna waived its subrogation rights, and, if so, what are the consequences.
Did Aetna Waive its Subrogation Rights?
Aetna initially provided workers compensation coverage to OCS for the policy year beginning March 17, 1989.[9] It was sent to OCS by OCS's broker, Frank B. Hall, on July 6, 1989. That policy, numbered 94 C *1573 463092 CAA, initially did not contain a waiver of subrogation endorsement. In a letter dated July 6, 1989 from Bonnie Rogers, an account executive for Frank B. Hall, to T.J. Johnson, OCS's president, she stated that she was "waiting on approval of `blanket waivor (sic) of subrogation' in order to comply with many of your [OCS's] contracts."[10]
In October of 1989, a waiver of subrogation endorsement (WC 00 03 13) was added to the policy, and made effective retroactively to July 5, 1989.[11] OCS was charged an additional premium of $862.00 for the above waiver of subrogation.
On May 23, 1990, Ms. Rogers sent a copy of the Aetna policy for policy year beginning March 17, 1990 to Charlie Dupuis, manager of administrative services for OCS. This policy had a different policy number than the previous policy, and therefore was not a renewal policy. In her letter of transmittal, Ms. Rogers stated as follows, to wit:
"... There are several endorsements pending which I have requested from Aetna. They are as follows:
... (3) blanket waivor [sic] of subrogation pr [sic] expiring policy...."[12]
A review of this policy shows there was no waiver of subrogation endorsement.[13] However, on July 31, 1990, Clint Rogers, a senior vice-president with Frank B. Hall, sent a certificate of insurance to Forest Oil. In that document, Mr. Rogers certified that the Aetna policy "waived subrogation against Forest Group and its insurers....".[14]
On February 26, 1991, OCS received a notice from Aetna that its policy, numbered 94 C611484 CAA, would expire on March 17, 1991. The notice advised OCS that if it wished to renew its policy, the estimated premium would be $220,150.00, with a deposit of $55,040 and eleven payments of $15,010.[15] Attached to this notice was a breakdown of the estimated annual premium. This breakdown did not mention any premium charge for a waiver of subrogation. Mr. Dupuis testified that he noticed that the breakdown did not contain a charge for waiver of subrogation, but felt that there was no need to request that Aetna endorse the policy to include a waiver because it followed from the first year [March 17, 1989 through March 17, 1990].[16] However, Mr. Dupuis also admitted that a waiver of subrogation endorsement was not put into the policy in previous years when it was not included in the "breakdown of quote".[17] He did not know if his agent at Dwight Andrus, James Sonnier, made such a request.[18]
On March 8, 1991, Dwight Andrus Insurance Agency faxed Mr. Dupuis a certificate of insurance dated March 8, 1991, which indicated that OCS's workers compensation policy for the policy year beginning March 17, 1991 contained a blanket waiver of subrogation. On March 11, 1991, Mr. Sonnier faxed a letter to Mark Ripple at Aetna. There is a hand-written message in that letter stating as follows:
"Per our conversation of this p.m., please issue renewal as proposed in your correspondence of 2/91. Please advise new policy no. Regards, Jim Sonnier." (Emphasis added).[19]
A review of the Aetna policy for the policy year beginning March 17, 1991 indicates no blanket waiver of subrogation was included.[20]
*1574 On March 28, 1991, Mr. Dupuis sent Mr. Ripple a check in the amount of $119,718.00. In his letter of transmittal, Mr. Dupuis notes that $55,040.00 of that amount is for the deposit premium covering the renewal of Policy No. 94-C-611484-CAA. He also attached the "breakdown of quote" and transmittal letter that was sent by Mr. Ripple in February of 1991, which did not contain a charge for a waiver of subrogation. In his letter, Mr. Dupuis also says that the remaining $64,678.00 is to settle Aetna's audit of Policy No. 94-C-463092-CAA, for the March 17, 1989 through March 17, 1990 policy.[21]
Plaintiff's accident happened on May 5, 1991. The policy for the March 17, 1991 through March 17, 1992 policy year was issued on June 26, 1991, without a waiver of subrogation endorsement.
Mr. Hodgen argues that Aetna unilaterally deleted the waiver of subrogation clause, even after receiving the March 8, 1991 certificate of insurance from Mr. Sonnier showing there was a waiver of subrogation. However, while the testimony of Mr. Dupuis and Mr. Sonnier establishes that Frank Hall and Dwight Andrus were agents for OCS, it is not at all clear that they also acted on behalf of Aetna. Additionally, although Mr. Sonnier testified that it was standard practice to send certificates of insurance to the insurers, there is no proof that the certificate was sent to Aetna in this instance.[22] Finally, in light of the fact that the March 17, 1990 through March 17, 1991 policy did not contain a waiver of subrogation endorsement, and a charge was not included in the breakdown of the estimated premium therefor,[23] OCS and Dwight Andrus should have been put on notice that the endorsement would not be included in the March 17, 1991 through March 17, 1992 policy unless they requested it.
Mr. Hodgen argues that the premium paid at the beginning of the policy is only a deposit, and that the actual premium is not determined until an audit is done at the end of the term, when actual payroll is known, and that OCS is still prepared to pay the premium for the waiver. While we do not disagree with this assessment, we find that the fact that an estimated premium for the waiver was not included in the initial "breakdown of quote" should have put OCS on notice that the waiver endorsement would not be included in the policy. Furthermore, after OCS actually received the policy on June 8, 1991, there is no evidence to suggest that it requested the blanket waiver of subrogation endorsement. Mr. Sonnier did however request a specific waiver of subrogation for Stone Petroleum, which waiver became effective on August 26, 1991.
In light of the above, we find that there was a unilateral error on the part of OCS and/or Dwight Andrus in failing to obtain the blanket waiver of subrogation for the March 17, 1991 through March 17, 1992 policy. Therefore, that policy may not be reformed. Accordingly, since Aetna did not waive its subrogation rights in the policy, we find that it is entitled to its intervention for the medical expenses and wage replacement indemnity benefits that it has paid on Mr. Hodgen's behalf.
Claims by A & A/C & G and Forest for Limitation of Liability A & A/C & G
46 U.S.C. § 183(a) provides that the liability of a shipowner for "any act, matter, or thing, loss, damage, or forfeiture, done, occasioned or incurred without the privity or knowledge of such owner, shall not exceed the amount or value of the interest of such owner in such vessel, and her freight then pending."[24] The parties stipulate that A & A owned the vessel and that the value of the vessel and freight on the date of the accident was $490,125.00. Therefore, the question is whether the negligent acts done by Captain Flanders were done without the privity or knowledge of A & A.
*1575 The burden of proof as to privity or knowledge is upon the petitioning shipowner. When the shipowner is a corporation, we must look to the privity or knowledge of the managers of a corporate enterprise who are vested with discretion and authority.[25]
Albert Cheramie, the president of A & A Boats, testified that he knew that A & A's boat captains were allowing swing rope transfers onto the vessels in 7 to 9 foot seas[26] when requested by the time charterer, that he had no problem with it, and expected his captains to follow the charterers' orders in such conditions.[27] He also admitted that A & A provided no training to its captains on how to properly accomplish a swing rope transfer operation.[28] Under these circumstances, we find that A & A Boats had privity and knowledge of the unsafe practices which led to plaintiff's accident, and therefore hold that it is not entitled to limitation of liability.
Forest Oil Corporation
In its amended answer to plaintiff's complaint, Forest Oil sought to limit its liability to the extent that it is held liable for "vessel related negligence". As previously mentioned, we held Forest liable to plaintiff for acts that it committed in its capacity as time-charterer of the vessel. Accordingly, Forest is liable for vessel-related negligence only.[29]
In order to benefit from the Limitation of Liability Act, a charterer must be able to prove both that he has an actual charter, oral or written, and that under such charter he is the party who "mans, victuals, and navigates" the vessel.[30]
At trial, the evidence was clear that only employees of A & A/C & G actually navigated the vessel. While Forest had authority to determine where the vessel would go, its employees did not operate the vessel and therefore the charter between Forest and A & A/C & G was clearly a time charter. Accordingly, Forest is not entitled to limitation of liability.[31]
Third-Party Demands by Forest Against Albany Insurance Company and Commercial Union Insurance Company
In the charter agreement between Forest Oil and A & A Boats, A & A agreed to procure and maintain insurance in accordance with Forest's minimum insurance requirements. Included in these requirements was A & A's obligation to name Forest as an additional insured on a P & I policy of insurance. The charter contained no provision as to whether this insurance would be primary or secondary to any other applicable insurance.[32] Pursuant to the charter, A & A named Forest as an additional assured on a P & I policy issued by Commercial Union Insurance Co.[33] That policy had limits of $500,000, subject to a $1,000 deductible. A & A also obtained a follow-form[34] P & I policy from Albany providing excess P & I coverage with limits in the amounts of 4.5 million dollars.
Since Forest's liability stems from "vessel-related negligence", Forest filed a third-party complaint against Commercial Union and Albany seeking coverage under the P & I *1576 policies for its portion of plaintiff's damages ($2,402,990.19 × 85% fault).
Commercial Union and Albany do not deny that P & I policies provide coverage for "vessel-related negligence" by a time-charterer such as Forest.[35] However, they argue that pursuant to the "other insurance" clause in their policies, Forest's claims are not covered because Forest was also covered by a worker's compensation and employers liability policy issued by Insurance Company of North America (hereinafter "INA"), as well as a charterer's liability policy issued by certain insurance companies subscribing to a package policy evidenced by cover note no. A-0080-H (hereinafter referred to as "Storebrand policy").[36] Accordingly, to determine the import of the "other insurance" clause, we must first determine whether plaintiff's claims are covered by the INA and/or Storebrand policies.
Coverage under the INA Policy
Commercial Union and Albany argue that because plaintiff was Forest's borrowed employee on the date of his accident, the employers liability policy issued by INA covers this claim.
The policy provides coverage for bodily injury arising out of the course of an injured employee's employment by Forest.[37] Since plaintiff was clearly within the course and scope of his employment with Forest at the time of his accident, we find that plaintiff's claim against Forest is covered by the INA policy.
Coverage under the Store-Brand Policy
Forest admits that the Heath Oil & Gas Ltd. slip commencing July 1, 1990,[38] the Heath Oil and Gas Ltd. slip commencing December 31, 1990,[39] and the Burke-Daniels Co., Inc. cover note commencing December 31, 1990[40] constitute all documents evidencing the terms and conditions of Forest's charterer's liability insurance and excess liability insurance on the day of plaintiff's accident (the Store-brand policy).[41] Counsel for Forest also admits that the slips state the terms and conditions which apply to 100% of the coverage.[42]
The three documents evidence various types of coverage, including oil, depreciation, deductible, redrilling, penalty premium protection, business interruption, excess liabilities and onshore/offshore transit risks. Section (vii) provides excess liability or umbrella coverage on the London 1971 form in the amount of $50 million dollars. Endorsement No. 8 to Section (vii) provides:
Effective at the inception and in consideration of the premium charged, it is understood and agreed that notwithstanding of (sic) paragraph 14, UNCOVERED BY UNDERLYING INSURANCE, contained in Section (vii), Endorsement No. 1, this insurance will respond excess of a self insured retention of U.S. $25,000 each and every loss in respect of charterer's legal liability.
Therefore, the charterer's liability policy covers Forest's liabilities in excess of $25,000.00 to $50,000,000.00.
EFFECT OF COVERAGE UNDER INA POLICIES AND CHARTERER'S LIABILITY POLICY
Commercial Union and Albany argue that by virtue of the "other insurance clause" contained in the Commercial Union policy and incorporated into the Albany policy, plaintiff's claims against Forest are not covered under their policies. The Commercial Union policy contains a classic "escape clause". It provides as follows:
*1577 Provided that where the assured [Forest] is, irrespective of this insurance, covered or protected against any loss or claim which would otherwise have been paid by the underwriters under this policy, there shall be no contribution or participation by the underwriters on the basis of excess, contributing, deficiency, concurrent, or double insurance or otherwise. (Emphasis added).
Since neither Forest's employer's liability nor charterer's liability policies contain a similar escape clause, we find that plaintiff's claims against Forest are not covered by the primary and excess P & I policies issued by Commercial Union and Albany.[43] Accordingly, Forest's third-party complaint against Commercial Union and Albany is dismissed.
Cross-Claim by Forest Against A & A/C & G
In the schedule of underlying coverages attached to the time-charter agreement between A & A and Forest, A & A agreed to delete the "other than owner" clause from its protection and indemnity policies, but failed to do so. The relevant policy language is as follows:
Subject to all exclusions and other terms of this policy, these underwriters agree to indemnify the assured for any sums which the assured, as owner of the vessel shall have become liable to pay, and shall have paid, in respect of any casualty or occurrence during the currency of the policy but only in consequence of the matters set forth hereunder, PROVIDED, however, that if the interest of the assured is or includes interests other than the owner of the vessel, the underwriters liability shall not be greater than if the assured was the owner entitled to all defenses and limitations of liability to which a shipowner is entitled: ... (Emphasis added)
The emphasized language is often referred to as the "other than owner" clause of a marine P & I policy.
The intent of the "other than owner" clause is to limit the underwriter's liability to an amount no greater than that to which the assured would be entitled to limit liability if that assured were the owner.[44] Therefore, deleting the "other than owner" clause simply waives the insurer's right to limit its liability to that of the shipowner, who possesses the statutory right to limit liability to the value of its vessel and pending freight.[45]
In its cross-claim, Forest contends that it has been damaged by A & A's failure to delete the "other than owner" clause from its P & I policies. However, in light of our previous holdings that neither A & A nor Forest are entitled to limitation, and that Forest is not covered under the policies, Forest's cross-claim is dismissed as moot.
Conclusion
In light of the foregoing, we dismiss:
(1) Forest's cross-claim against OCS for defense costs;
(2) Forest and A & A/C & G's third-party complaint against OCS's underwriters for status as additional assureds;
(3) Albany's third-party complaint against Aetna for a declaration that the coverage provided by Aetna's policy primes that of Albany's;
*1578 (4) Forest's and A & A's claim for limitation of liability;
(5) Forest's third-party complaint against Albany Insurance Company and Commercial Union Insurance Company for coverage under those policies; and
(6) Forest's cross-claim against A & A/C & G for breach of contract.
We grant Aetna's petition for intervention to recover medical expenses and wage replacement benefits that it has paid to plaintiff.
Counsel are ordered to submit to the Court within twenty (20) days of this date a judgment, approved as to form, encompassing this ruling, as well as all previous rulings which have been rendered by the Court. A final judgment will not be entered until such judgment is signed.
NOTES
[1] This finding did not affect Forest's liability in its capacity as time charterer.
[2] Forest has filed a motion for reconsideration of this ruling, which motion is hereby denied.
[3] Meloy, 504 So.2d at 839.
[4] Marcel v. Placid Oil, 11 F.3d 563, 569-70 (5th Cir.1994).
[5] See OCS and Underwriters Exhibits 4 & 5.
[6] See OCS and Underwriters Exhibits 1 & 2.
[7] See OCS Exhibit A, Deposition of Ken Smith, p. 57.
[8] Forest has filed a motion for leave to file a third-party complaint against OCS, its CGL Underwriters and Aetna. This pleading makes allegations similar to those made by Albany. For the reasons outlined above, the allegations made in Forest's cross-claim are without merit, and leave to file the cross-claim is hereby denied.
[9] See Exhibits 1 & 2 to Deposition of Charles Dupuis.
[10] See Exhibit 5 to Deposition of Charles Dupuis.
[11] See Exhibit 7 to Deposition of Charles Dupuis.
[12] See Exhibit 2 to Deposition of Charles Dupuis.
[13] See Exhibit 2 to Deposition of Charles Dupuis.
[14] See Exhibit 2 to Deposition of Charles Dupuis.
[15] See Exhibit 9 to Deposition of Charles Dupuis.
[16] See Deposition of Charles Dupuis, p. 26.
[17] Ibid, pp. 26-27.
[18] Id. p. 28.
[19] See Exhibit 1 to Deposition of James Sonnier, p. 27.
[20] See Exhibit 3 to Deposition of Charles Dupuis.
[21] See Exhibit 3 to Deposition of Charles Dupuis.
[22] See Deposition of James Sonnier, pp. 130-131.
[23] See Exhibit 2 to Deposition of Charles Dupuis.
[24] 3 Benedict on Admiralty, § 41 (7th Ed.1993).
[25] Ibid.
[26] The height of the seas when plaintiff's accident happened.
[27] See Deposition of Albert Cheramie, pp. 47, 51.
[28] Ibid, p. 48.
[29] Helaire v. Mobil Oil Co., 709 F.2d 1031 (5th Cir.1983).
[30] 3 Benedict on Admiralty (supra) at § 44.
[31] Petition of Skibs A/S Jolund, 250 F.2d 777 (2d Cir.1957).
[32] See Albany Exhibit M, Blanket Time Charter and attachments thereto.
[33] See Commercial Union Exhibit C.
[34] The Albany policy adopted the terms and conditions of the Commercial Union policy in paragraph 2(a). It provides as follows:
(a) These underwriters agree to indemnify the assured [A & A/C & G and Forest] for all liability, loss, damage or expense insured against under the P & I policies described in the schedule of underlying insurances (hereinafter referred to in the section and in the general conditions as the "primary policies" [Commercial Union]).... See Albany Exhibit D.
[35] Randall v. Chevron, 13 F.3d 888 (5th Cir. 1994)
[36] See Commercial Union Exhibit B.
[37] See Part 2, Employers Liability Insurance, par. A(1).
[38] See Albany Exhibit G.
[39] See Albany Exhibit H.
[40] See Albany Exhibit I.
[41] See Albany Exhibit F, Forest's response to Albany's Request for Production.
[42] See Albany Exhibit K, Letter dated July 14, 1994 from Carl J. Hebert to Edward LeBreton, III.
[43] A review of the INA and Store-brand policies indicates that the INA policy has a "pro-rata" other insurance clause, and the Store-brand policy has an "excess" other insurance clause. An escape clause renders a policy in which it is contained completely inapplicable if other insurance exists, an excess clause renders a policy excess to other insurance, and a pro-rata clause provides that the two policies contribute to the loss in proportion to their limits of liability. Offshore Logistics Services v. Mutual Marine Office, 462 F. Supp. 485, 493 (E.D.La.1978).
Since neither clause is mutually repugnant from the Commercial Union/Albany "escape" clause, we find that the escape clause may be enforced. See Viger v. Geophysical Services, Inc., 338 F. Supp. 808 (W.D.La.1972), aff'd 476 F.2d 1288 (5th Cir.1973); Lodrigue v. Montegut, 1978 A.M.C. 2272 (E.D.La.1977).
[44] See Randall v. Chevron USA, 788 F. Supp. 1398, 1402 (E.D.La.1992); citing A. Parks The Law and Practice of Marine Insurance and Average, 1024 (1987).
[45] Ibid. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2597138/ | 902 F. Supp. 259 (1995)
John B. HAYES, Plaintiff,
v.
Donna SHALALA, Defendant.
Nos. 93-1504, 94-1645 and 95-1334.
United States District Court, District of Columbia.
October 13, 1995.
*260 *261 *262 David H. Shapiro, Swick & Shapiro, Washington, DC, for plaintiff.
Stacy M. Ludwig, Assistant U.S. Attorney, Washington, DC, for defendant.
OPINION
PAUL L. FRIEDMAN, District Judge.
John Blair Hayes, an African American male, has worked at the Department of Health and Human Services ("HHS"), Administration for Children and Families, Division of Acquisition Management, since 1975. He is currently a Level IV Contracts manager and a GS-14 step 10. In the mid-1980s, Mr. Hayes brought an employment discrimination action against HHS. In 1989, he and HHS entered into a settlement agreement which included an agreement to promote Mr. Hayes to his current GS-14 level, backpay and injunctive relief. In 1992, Mr. Hayes was denied promotion to a GM-15 supervisory position. The job was given to Barbara Twombly, a white female from outside HHS.
Mr. Hayes brought suit (Civil Action No. 93-1504, Hayes I), alleging violations of Title VII, namely, that he was not selected for the supervisory position because of racial discrimination and also in retaliation for his previous Title VII suit and settlement. Two years later, after having served under the supervision of Ms. Twombly, Mr. Hayes brought another suit (Civil Action No. 94-1645, Hayes II) alleging various instances of race and sex discrimination and retaliation, including denial of credit hours, unfair performance ratings, the instigation of a frivolous investigation against him, a groundless reprimand, and the use of abusive language. These consolidated cases are now before the Court on defendant's motion for summary judgment with respect to Civil Action Nos. *263 93-1504 and 94-1645 and plaintiff's opposition thereto.[1]
I. SUMMARY JUDGMENT STANDARD
Under Rule 56, Fed.R.Civ.P., summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Rule 56(c), Fed.R.Civ.P. Material facts are those that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In considering a summary judgment motion, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255, 106 S. Ct. at 2513; see also Washington Post Co. v. United States Dep't of Health and Human Services, 865 F.2d 320, 325 (D.C.Cir.1989).
The non-moving party's opposition, however, must consist of more than mere unsupported allegations or denials and must be supported by affidavits or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. Rule 56(e), Fed.R.Civ.P.; Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). The non-moving party is "required to provide evidence that would permit a reasonable jury to find" in its favor. Laningham v. United States Navy, 813 F.2d 1236, 1242 (D.C.Cir. 1987). If the non-movant's evidence is "merely colorable" or "not significantly probative," summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50, 106 S. Ct. at 2511.
In an employment discrimination case, the plaintiff carries the initial burden of showing that the employer's actions, if unexplained, were more likely than not based on illegal discriminatory criteria. Furnco Construction Corp. v. Waters, 438 U.S. 567, 576, 98 S. Ct. 2943, 2949, 57 L. Ed. 2d 957 (1978); see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05, 93 S. Ct. 1817, 1824-26, 36 L. Ed. 2d 668 (1973). To establish a prima facie case of discriminatory nonselection, a plaintiff must show that (1) he or she belongs to a statutorily protected group, (2) he or she applied and was qualified for a job for which the employer was seeking applications, (3) despite his or her qualifications, he or she was rejected, and (4) the position remained open. McDonnell Douglas Corp. v. Green, 411 U.S. at 802, 93 S. Ct. at 1824; see, e.g., Garrett v. Lujan, 799 F. Supp. 198, 199-200 (D.D.C.1992). Once plaintiff has made out this prima facie case, the burden of production shifts to the defendant employer to articulate a legitimate, nondiscriminatory reason for its conduct. McDonnell Douglas Corp. v. Green, 411 U.S. at 802-05, 93 S. Ct. at 1824-26. The burden then shifts back to the plaintiff to provide some evidence, either direct or circumstantial, that the articulated reason for the defendant's conduct is merely pretextual. Id.
In order to establish a prima facie case of retaliation, a plaintiff must show that (1) he or she has engaged in statutorily protected behavior, (2) he or she was subject to adverse personnel action by an employer, and (3) a causal connection existed between the two. Mitchell v. Baldrige, 759 F.2d 80, 86 (D.C.Cir.1985) (citations omitted). As in a discrimination case, once the plaintiff has made out a prima facie case, the burden of production shifts to the employer to articulate a legitimate nondiscriminatory reason for the action, after which point the burden is on the plaintiff to demonstrate that the proffered reason is pretextual. Id. at 87-88.
Summary judgment in discrimination cases must be approached with special caution and the Court "must be extra-careful to view all the evidence in the light most favorable" to plaintiff. Ross v. Runyon, 859 F. Supp. 15, 21-22 (D.D.C.1994). Nevertheless, Mr. Hayes is not relieved of his burden to support his allegations of discrimination, retaliation and, ultimately, of pretext with affidavits or other competent evidence showing that there is a genuine issue for trial. In order to defeat a motion for summary judgment *264 in a discrimination case such as this one, a plaintiff cannot rest on mere allegations of pretext but must point to genuine issues of material fact in the record. See Johnson v. Digital Equipment Corp., 836 F. Supp. 14, 15 (D.D.C.1993). Evidence of discrimination or pretext that is "merely colorable" or "not significantly probative" cannot prevent the issuance of summary judgment. Id.
Defendant relies on St. Mary's Honor Center v. Hicks, ___ U.S. ___, 113 S. Ct. 2742, 125 L. Ed. 2d 407 (1993), in which the Supreme Court described the plaintiff's final burden of persuasion. See Barbour v. Merrill, 48 F.3d 1270, 1277 (D.C.Cir.1995) ("According to Hicks, a plaintiff need only establish a prima facie case and introduce evidence sufficient to discredit the defendant's proffered reasons; at that point, the factfinder, if so persuaded, may infer discrimination.") (citations omitted). While Hicks holds that the factfinder at trial is not compelled to infer discriminatory pretext even when the plaintiff has discredited the employer's proffered reasons, at the summary judgment stage it is inappropriate for the Court to make that factual determination. If, on the basis of the probative evidence submitted in opposition to summary judgment under Rule 56(e), Fed.R.Civ.P., a reasonable factfinder could infer discrimination, summary judgment is inappropriate.
II. HAYES I
In Hayes I, plaintiff alleges both discrimination and retaliation in his nonselection for the supervisory GM-15 position. Plaintiff has made out his prima facie case on both claims. With respect to his discrimination claim, plaintiff has shown that he was a member of a protected class, that he was a qualified applicant, and that he was rejected for the job which was subsequently given to someone not in the protected class. See McDonnell Douglas Corp. v. Green, 411 U.S. at 802, 93 S. Ct. at 1824. With respect to the retaliation claim, plaintiff has shown that he has engaged in protected behavior and that he was subject to adverse action by his employer. Mitchell v. Baldrige, 759 F.2d 80, 86 (D.C.Cir.1985). Defendant argues, however, that plaintiff has not demonstrated the requisite causal link between the protected activity (his 1989 lawsuit) and the adverse action (his nonselection in 1992). Id. The Court disagrees.
"The causal connection component of the prima facie case may be established by showing that the employer had knowledge of the employee's protected activity, and that the adverse personnel action took place shortly after that activity." Mitchell v. Baldrige, 759 F.2d at 86. In this case, Robert Stovenour, Mr. Hayes' supervisor who failed to recommend him for the promotion in 1992, knew about and implemented the terms of the 1989 settlement. While the nonselection took place three years after the protected activity, plaintiff argues that since he applied for no other job in the interim, this was the first time he was vulnerable to retaliation. See Globus v. Skinner, 721 F. Supp. 329, 334-35 (D.D.C.1989) (two year lag between protected activity and personnel action was sufficient to support inference of reprisal where plaintiff's participation in litigation lasted until shortly before she was laid off). In light of Mr. Stovenour's duty to enforce the terms of the settlement agreement and his supervisory role, the Court cannot preclude the inference of causality for purposes of the prima facie case. But see Garrett v. Lujan, 799 F. Supp. 198, 202 (D.D.C.1992) (one year lag between protected activity and nonselection was too great to support an inference of reprisal).
Having concluded that plaintiff has made out a prima facie case of both discrimination and retaliation, the Court next looks at the employer's proffered reasons and at the issue of pretext. Defendant has articulated legitimate nondiscriminatory reasons for plaintiff's nonselection in response to both Mr. Hayes' discrimination and retaliation claims. Mr. Stovenour states that he recommended Mr. Twombly because she was an outsider, because of her experience in implementing automated activities in contracts offices, because of her supervisory experience, and because she had four excellent references.
*265 Mr. Hayes disputes Ms. Twombly's credentials and Mr. Stovenour's reliance on them. Specifically, Mr. Hayes offers as rebuttal the following evidence: none of the final four candidates for consideration were African American and at least two other African American candidates besides Mr. Hayes were passed over; Mr. Hayes had good recommendations and qualifications; subsequent to Mr. Hayes' nonselection, Mr. Stovenour wrote Mr. Hayes a highly laudatory recommendation letter; automation was not a stated factor in the job search; Mr. Stovenour appears to have relied on only one, not four, of Ms. Twombly's references; Ms. Twombly required a year of training after she was hired to acquire the credential that Mr. Hayes already had; and finally, Mr. Stovenour's assertion that Ms. Twombly was a "people person" is contradicted by affidavits from other employees.
The Court finds that Mr. Hayes has raised genuine issues of material fact for trial on the issue of pretext and that a reasonable jury could infer discrimination and/or retaliation from defendant's conduct. See Barbour v. Merrill, 48 F.3d at 1277; Lindahl v. Air France, 930 F.2d 1434 (9th Cir.1991). Defendant's motion for summary judgment with respect to Hayes I therefore will be denied.
III. HAYES II
A. Plaintiff's Claims
Mr. Hayes alleges that after he was passed over for promotion in favor of Barbara Twombly and filed his complaint for discriminatory and retaliatory nonselection in 1992, Ms. Twombly, then his supervisor, engaged in discriminatory and retaliatory actions against him. Specifically, he alleges that Ms. Twombly: (1) denied plaintiff accrual and use of credit hours; (2) unfairly charged him with one hour of AWOL; (3) gave him a less than Outstanding performance rating for 1992; (4) initiated a frivolous investigation into charges that plaintiff used abusive language; (5) required plaintiff but not other employees to submit a work plan; (6) officially reprimanded plaintiff on bogus charges of insubordination; (7) used abusive and offensive language toward him; (8) denied plaintiff's annual leave request for pre-paid summer vacation; (9) caused plaintiff's annual leave request to be approved late; and (10) caused an Inspector General report to contain retaliatory and intimidating language about plaintiff. Mr. Hayes further states that these discriminatory and/or retaliatory acts violated the 1989 court order enjoining HHS from discriminating and retaliating against him.
Defendant argues that plaintiff has offered no evidence that anyone else outside his protected group was treated differently in any of these areas and therefore that he has not made out a prima facie case of discrimination. Defendant also argues that Mr. Hayes has failed to exhaust his administrative remedies with respect to the tenth claim. Finally, defendant asserts that many if not all of these claims are nonactionable, intermediate employment decisions that do not qualify as adverse "personnel actions" under section 717 of Title VII, 42 U.S.C. § 2000e-16.
B. The Prima Facie Case
With respect to his discrimination claims, defendant has failed to allege that anyone not in his protected group was treated differently with respect to any of the alleged actions. He therefore has failed to make out a prima facie case of discrimination. He has, however, alleged sufficient facts to make out a prima facie case of retaliation. He engaged in protected behavior by filing his 1992 action; he has alleged adverse action by his employer, Ms. Twombly; and there is sufficient evidence to support an inference of causality. Protected conduct followed by adverse action can sometimes justify an inference of retaliatory motive, particularly if the length of time between the two occurrences is short. Mitchell v. Baldrige, 759 F.2d at 86. In this case, Mr. Hayes' protected conduct the filing of Hayes I immediately preceded Ms. Twombly's alleged conduct as his supervisor; indeed his claim was based on Ms. Twombly having gotten the job instead of Mr. Hayes. Furthermore, plaintiff has submitted affidavit evidence that, if believed, could suggest animus between Ms. Twombly and Mr. Hayes. See Declaration of Dolores Lancaster ("Lancaster Decl.") ¶¶ 7-9; Declaration *266 of Kimberly Marshall ("Marshall Decl.") ¶¶ 2-6.
Defendant has proffered legitimate nondiscriminatory reasons for each of the actions taken against Mr. Hayes. The burden thus shifts to Mr. Hayes to rebut these asserted reasons and to create the basis for an inference that Ms. Twombly acted out of illegal retaliatory motives. Mr. Hayes has presented affidavit evidence from which a reasonable factfinder could infer that Ms. Twombly was hostile to Mr. Hayes and that there was a causal connection between Mr. Hayes' protected activities and that hostility. See Lancaster Decl. ¶¶ 7-9; Marshall Decl. ¶¶ 2-6; Hayes Decl. ¶¶ 8-16; cf. Twombly Decl. ¶¶ 24-30, 33-36. Since the credibility of these witnesses itself raises a genuine issue of fact that might determine the outcome of this case, it would be inappropriate to grant summary judgment on this basis.
C. Failure to Exhaust
Defendant argues that Mr. Hayes failed to exhaust his administrative remedies with respect to his tenth claim regarding the Inspector General's report. While plaintiff did file an EEO claim and, subsequently, this action in a timely manner, defendant asserts that plaintiff frustrated the administrative process by failing to provide clarification to the administrative agency when requested to do so. See Decision Letter from HHS to John Hayes (May 18, 1994); Pack v. Marsh, 986 F.2d 1155, 1158 (7th Cir.1993).
Assuming, arguendo, that plaintiff failed to exhaust his administrative remedies when he did not respond to HHS's request for further clarification, plaintiff's tenth retaliation claim nevertheless survives. A plaintiff may raise a retaliation claim, although not a claim of discrimination, for the first time in federal court and need not exhaust his or her administrative claims. Nealon v. Stone, 958 F.2d 584, 590 (4th Cir. 1992) (all circuits that have considered the matter agree that plaintiff need not exhaust administrative remedies for a retaliation claim); Webb v. District of Columbia, 864 F. Supp. 175, 184 (D.D.C.1994) (requiring plaintiff to refile every new instance of discrimination would serve only to invite further retaliation and erect needless procedural barriers) (citing Nealon v. Stone, 958 F.2d at 590).
D. Personnel Actions under Section 717
Defendant asserts that many if not all of Mr. Hayes' claims in Hayes II are nonactionable under section 717 of Title VII, 42 U.S.C. § 2000e-16, because they are not final "personnel actions." Defendant relies on Page v. Bolger, 645 F.2d 227 (4th Cir. 1981), in which the Fourth Circuit held that Section 717 addresses discrimination only in "ultimate employment decisions such as hiring, granting leave, discharging, promoting and compensating ... [and not] the many interlocutory or mediate decisions having no immediate effect upon employment conditions." Id. at 233; see also Debose v. Stone, 1993 WL 475487, *5, 1993 U.S. Dist. LEXIS 16720, *14 (E.D.La.1993) (following Page). The Court in Page concluded that the racial composition of a review commission did not constitute an actionable personnel action. Defendant argues that many of Mr. Hayes' claims are aimed at similarly mediate supervisory decisions that did not affect the conditions of his employment.
First it should be noted that many of Mr. Hayes' allegations, if believed, might have affected the terms of his employment and thus have been actionable even under the analysis in Page. The inability to accrue credit hours, a reprimand, an unwarranted performance rating, and the Inspector General's report, all would have directly affected Mr. Hayes' work record or the terms of his compensation.
Even if some of plaintiff's claims did not directly affect his employment conditions, the Court rejects defendant's interpretation of Section 717. As a general matter, Section 717 extends the same protections to government employees as to employees in the private sector. Wagner v. Taylor, 836 F.2d 566, 574 (D.C.Cir.1987) (citing Douglas v. Hampton, 512 F.2d 976, 981 (D.C.Cir. 1975)). Moreover, Title VII claims are not limited to final employer actions or decisions that have a lasting effect on an employee's record. Hostile work environment claims, *267 for example, need not allege tangible or economic losses because, as the Supreme Court has reasoned, the language of "`terms, conditions, or privileges of employment' evinces a congressional intent to strike at the entire spectrum of disparate treatment of men and women." Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 64, 106 S. Ct. 2399, 2404, 91 L. Ed. 2d 49 (1986). The Supreme Court has further held that
[a] discriminatorily abusive work environment, even one that does not seriously affect employees' psychological well-being, can and often will detract from employees' job performance, discourage employees from remaining on the job, or keep them from advancing their careers. Moreover, even without regard to these tangible effects, the very fact that the discriminatory conduct was so severe or pervasive that it created a work environment abusive to employees because of their race, gender, religion, or national origin offends Title VII's broad rule of workplace equality.
Harris v. Forklift Systems, Inc., ___ U.S. ___, ___ _ ___, 114 S. Ct. 367, 370-71, 126 L. Ed. 2d 295 (1993); see also West v. Philadelphia Electric Co., 45 F.3d 744, 753 n. 7 (3d Cir.1995) ("The Court has recognized no difference in standards applicable to racially and sexually hostile work environments.") (citations omitted). This broad reading of Title VII's terms and purpose defeats defendant's suggestion that "personnel actions" in Section 717 should be interpreted narrowly.
This Circuit has not directly addressed the holding in Page. Where it has spoken, it has adopted a broader interpretation of actionable "personnel actions" than that of the Fourth Circuit. In Palmer v. Shultz, 815 F.2d 84, 97 (D.C.Cir.1987), for example, the D.C. Circuit began its discussion of Section 717 by stating that "[a] plaintiff may bring a Title VII claim for alleged discrimination with respect to any employment decision by an agency of the federal government." Id. at 97 (emphasis added). After noting that the Foreign Services Act provided its own extremely broad definition of personnel actions, the court reasoned that "the Supreme Court ... interpreted an analogous Title VII provision applying to private employers to encompass a claim of sex discrimination for sexual harassment even if the sexual harassment caused no tangible or economic loss." Id. at 97 (citing Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S. Ct. 2399, 91 L. Ed. 2d 49 (1986)). The court then noted that "the language of 42 U.S.C. § 2000e-16 ... is even broader, covering `all personnel actions' based on sex, regardless of whether the personnel action affects promotions or causes other tangible or economic loss." Palmer v. Shultz, 815 F.2d at 98. Section 717 thus should be read to encompass all personnel actions, not only those with an impact on the employee's permanent employment record.[2]
This Court finds that Mr. Hayes' claims in Hayes II are "personnel actions" for the purposes of Section 717 of Title VII. Mr. Hayes must be permitted to argue that the totality of actions taken by his employer collectively created a harassing and retaliatory environment, even if individual actions may not have left a permanent paper trail or may even have been "mediate" employment decisions as identified by the Fourth Circuit in Page. Given this Circuit's more expansive reading of Section 717, this Court will not isolate and eliminate Mr. Hayes' individual personnel actions one by one where a reasonable jury might find that, taken together, those personnel actions constituted illegal retaliation.
IV. CONCLUSION
Mr. Hayes has identified genuine issues of material fact with respect to his claim of discriminatory and retaliatory nonselection in Hayes I. He has also identified genuine issues of material fact with respect to his claims of retaliation in Hayes II. The retaliation claims in Hayes II are not barred by a failure to exhaust, and they are actionable personnel actions under 42 U.S.C. § 2000e-16. Accordingly, for the reasons stated in *268 this Opinion, the Court denies defendant's motion for summary judgment with respect to plaintiff's discrimination and retaliation claims in Hayes I and with respect to plaintiff's retaliation claims in Hayes II. Summary judgment is granted with respect to plaintiff's discrimination claims in Hayes II. A separate Order consistent with this Opinion has been filed this same day.
SO ORDERED.
ORDER
These consolidated cases came before the Court on Defendant's Motion to Dismiss or for Summary Judgment and plaintiff's opposition thereto. The Court heard oral argument on August 29, 1995.
Based upon the papers submitted and the arguments of counsel, and for the reasons stated in the accompanying Opinion issued this same day, it is hereby
ORDERED that Defendant's motion for summary judgment with respect to plaintiff's discrimination and retaliation claims in Civil Action No. 93-1504 (Hayes I) is DENIED; it is
FURTHER ORDERED that defendant's motion for summary judgment in Civil Action No. 93-1645 (Hayes II) is GRANTED in part and DENIED in part. Summary judgment is granted with respect to plaintiff's discrimination claims and denied with respect to plaintiff's retaliation claims.
SO ORDERED.
NOTES
[1] Mr. Hayes' third claim, Civil Action No. 95-1334 (Hayes III), will be addressed separately.
[2] In Brown v. Secretary of the Army, 918 F.2d 214, 218-19 (D.C.Cir.1990), the court's narrower reading of "personnel action" stemmed directly from the statutory language of the Back Pay Act itself, which by its terms applies only to those personnel actions that result in the withdrawal or reduction of pay. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8326580/ | Lemire, James R., J.
This action arises out a dispute between family members with interests in the same business entities. The plaintiff, Ernest S. Hayeck (“Ernest”), formed several partnerships with his late brother, George N. Hayeck (“George N.”), for the purpose of holding and managing an apartment complex in Worcester, Massachusetts. Both before and after George N.’s death, the defendants allegedly engaged in wrongful conduct regarding the business entities. In a complaint and supplemental complaint, Ernest asserts the following claims against the defendants: (1) fraud (Count I); (2) deceit (Count II); (3) self-dealing (Count III); (4) breach of fiduciary duty (Count IV); (5) negligence (Count V); (6) breach of fiduciary duly (Count VI); and (7) unjust enrichment (Count VII). The action is now before the court on the defendants’ motion to dismiss and motion to strike. For the following reasons, the motion to dismiss is ALLOWED in part and DENIED in part, and the court takes no action on the motion to strike.
BACKGROUND
The facts, taken from the complaint and the supplemental complaint and viewed in the light most favorable to him, are as follows.
I. The Complaint
On May 18, 1971, Ernest and George N. formed Fruit Sever Associates (“Fruit Associates”), a partnership. George N. was the general partner and both he and Ernest were the limited partners. The two brothers formed Fruit Associates to hold a multi-unit apartment building project in Worcester, Massachusetts (“Project”), which the United States Department of Housing and Urban Development (“HUD”) financed. At the same time that they formed Fruit Associates, Ernest and George N. formed Concord Management, also a partnership, which was to mange the Project and collect management fees pursuant to HUD regulations. Ernest and George N. agreed at the time of these entities’ formations that the Project’s management fees would be split evenly between them. Going forward, Ernest and George N. used the fees Concord Management collected to offset the personal tax liabilities they incurred for their investments in the Project.
In May of 1996, George N. learned that he was terminally ill with cancer. He was scheduled to travel with Ernest to Bethesda, Maryland on August 3, 1996 for cancer treatments. The night before, on August 2, 1996, one of George N.’s sons, defendant Paul G. Hayeck *635(“Paul”), presented to Ernest legal documents that he (Paul) or one of his firm’s other attorneys drafted. The documents added defendant Fruit Sever Realty Corporation (“Fruit Corporation”) as a general partner to Fruit Associates. Fruit Corporation had been formed on August 1, 1996, and George N. was its sole officer and director. George N. and Paul represented to Ernest that the addition of Fruit Corporation was only temporary and intended to protect Fruit Associates by avoiding its dissolution should George N. die while in Maryland. Ernest agreed to sign the documents in return for a promise from George N. and Paul that a limited liability company would be formed to act as general partner. Partnership interests in Fruit Associates following the amendment were as follows: Fruit Corporation held a two percent interest as general partner, George N. held a three percent interest as general partner, Ernest held a fifty percent interest as limited partner, and George N. held a forty-five percent interest as limited partner.
George N. survived the trip to Maryland. In August 1996, he unilaterally terminated Concord Management and hired Fruit Corporation to manage the Project.2 Fruit Corporation thereafter received all of the management fees on the Project. Ernest did not know of, nor did he give his authorization or consent to, the change in management companies.
In May of 1997, Ernest contacted George N. to discuss Fruit Associates and to demand the formation of a limited liability company, as George N. and Paul had promised would occur. George N. agreed to meet with Ernest, but the meeting never took place and the limited liability company was never formed. George N. died on July 4, 1997. Since his death, his widow, defendant Helen L. Hayeck (“Helen”), has received the management fees and other payments generated through Fruit Associates.
By letter dated December 14, 1997, defendant Albert G. Hayeck (“Albert”), another of George N.’s sons, informed the HUD that the individuals managing Fruit Associates were committing fraud in various ways. The letter stated that Ernest, a limited partner of Fruit Associates, did not know of the wrongdoing. According to the complaint, Albert was involved in managing Fruit Associates up until early December 1997. Ernest also alleges that George E. Hayeck (“George E.”) was involved in managing Fruit Associates, and that he knew of George N. and Paul’s scheme to add Fruit Corporation as a general partner to Fruit Associates and was in collusion with them.
Counts I-IV are based on these allegations.
II. The Supplemental Complaint A. Procedural background
Before a scheduled trial on the claims Ernest asserted in the complaint, the parties went to mediation in July 2006. At the mediation, they entered into a Memorandum of Understanding (“MOU”), which envisaged Ernest purchasing the defendants’ interests in the Project, subject to due diligence. During such due diligence, despite the efforts of Fruit Corporation, George E., and Helen to restrict Ernest’s access to the Project’s property and records—including instructing Project employees not to speak with Ernest—Ernest discovered substantial issues with the Project’s maintenance and condition. He therefore declined to purchase the defendants’ interests at the price the parties previously settled on. They were then unable to negotiate a purchase price acceptable to both sides.
The defendants moved to enforce the MOU in November 2006. The court allowed the motion and Ernest appealed. The Appeals Court reversed the court’s order on August 28, 2008, remanding the matter to the court for a resolution of the following factual question: whether Ernest declined to purchase the defendants’ interests in the Project based on new and material information brought to light during due diligence, or whether he was simply attempting to avoid his obligation under the MOU. See Hayeck v. Fruit Sever Realty Corp., 2008 WL 3925646 at *2 (Mass.App.Ct. 2008) (unpublished Rule 1:28 decision). After a bench trial, the court found that Ernest’s decision not to purchase the defendants’ interests was based on new and material information. Accordingly, the claims in Ernest’s complaint would proceed to trial.3
B. Factual allegations
Helen currently owns the stock of Fruit Corporation, and she and George E. are now the corporation’s officers, directors, and/or managers.
During the appeal process described above, Ernest had identified buyers interested in purchasing the Project at a price that would result in proceeds to the defendants similar to those they would have received under the MOU. Fruit Corporation, George E., and Helen prevented Ernest and the interested buyers from accessing and inspecting the project’s property, and they obstructed sale of the Project.
Ernest further asserts that Fruit Corporation, George E., and Helen have overcharged Ernest for managing the Project; violated the HUD’s regulations by permitting George E. to operate businesses distinct from the Project; violated the Project’s deed and mortgage by conveying Fruit Associates’ personal property to the Project’s management company; fraudulently manipulated the Project’s financial statements, budgets, and expenditures; imposed fake income on Ernest; deprived Ernest of cash distributions as a limited partner; and failed to provide Ernest with an accounting.
Counts V-VH are based on these allegations.
DISCUSSION
I. Motion to Dismiss Standard
When evaluating the legal sufficiency of a complaint pursuant to Mass.RCiv.P. 12(b)(6), the court accepts as true all of the factual allegations of the complaint, and draws all reasonable inferences from the complaint in *636favor of the plaintiff. See Nader v. Citron, 372 Mass. 96, 98 (1977), abrogated on other grounds by Iannacchino v. Ford Motor Co., 451 Mass. 623 (2008). To survive a motion to dismiss, a complaint must set forth the basis for the plaintiffs entitlement to relief with “more than labels and conclusions.” Iannacchino, 451 Mass. at 636, quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While factual allegations need not be detailed, they “must be enough to raise a right to relief above the speculative level. . . [based] on the assumption that all the allegations in the complaint are true (even if doubtful in fact) . . .” Id. At the pleading stage, Mass.R.Civ.P. 12(b)(6) requires that the complaint set forth “factual ‘allegations plausibly suggesting (not merely consistent with)’ an entitlement to relief . : .” Id., quoting Bell Atl. Corp., 550 U.S. at 557.
II. Analysis4
Rather than challenging the sufficiency of the allegations supporting each of Ernest’s claims, the defendants make several broad arguments that apply to more than one claim. The court will address each argument.5
A. Ernest’s standing to assert claims
The defendants assert that Ernest does not have standing to bring his claims directly because they are derivative claims based on harm to Fruit Associates.6 The court disagrees.
A derivative claim is brought to remedy harm to an entity, not harm to the entity’s shareholders or members. See Jackson v. Stuhlfire, 28 Mass.App.Ct. 924, 925 (1990), quoting J.W. Smith & H.B. Zobel, Rules Practice §23.1.1 (1975) (“The derivative action seeks ... to redress a wrong to a corporation or association . . . [OJnly the corporation itself suffers the direct wrong”). Any harm to individuals in a derivative action is indirect only. See id. If, however, one or more individual shareholders or members suffer direct harm, but the entity as a whole suffers no harm, the individuals may maintain an action in their own names rather than bring a derivative action in the name of the entity. See Fronk v. Fowler, 456 Mass. 317, 332 n.23 (2010) (“The availability of suits on behalf of individual partners (or stockholders) is premised on the difficulty of proving harm to the partnership (or corporation) as a whole because only one or a handful of partners have been harmed”).
Here, Ernest’s claims are based on direct harm to him. Due to the structure of the partnership interests of Fruit Associates, the defendants’ allegedly wrongful conduct harmed only Ernest. In other words, Ernest is the only Fruit Associates partner not involved in or benefitting from the alleged wrongdoing. Thus, Fruit Associates as a whole has not been harmed, and derivative claims on its behalf are unnecessary to vindicate its rights. See id. (“When the alleged wrong committed by a partner harms the partnership rather than another partner individually, the appropriate approach is to file a derivative claim”); Smyth v. Field, 40 Mass.App.Ct. 625, 629 (1996) (in derivative claim, “[r]ecoveiy must be for the benefit of the limited partnership”). Only the rights of Ernest, one of the three partners of Fruit Associates, need be vindicated. See Fronk, 456 Mass. at 332 n.23. As such, the court concludes that the claims asserted in the complaint and the supplemental complaint are not derivative.7
B. Timeliness of claims
The defendants also argue that several statutes of limitations bar Ernest’s claims. First, as to claims asserted against Paul and Helen as the executors of George N.’s estate, the defendants cite G.L.c. 197, §9, which provides that “an executor or administrator shall not be held to answer to an action by a creditor of the deceased unless such action is commenced within one year after the date of death of the deceased.’’8 Here, George N. died on July 4, 1997, and Ernest did not file his complaint until September 20, 2000. The court concludes, however, that Ernest is not a “creditor” of George N.’s estate for purposes of G.L.c. 197, §9.
While the term “creditor” “has been given a broad and comprehensive meaning and includes one having a claim not only in contract but also in tort against the estate . . . [t]he statute does not apply to suits to enforce equitable interests in property of a decedent in the possession of an executor.” New England Trust Co. v. Spaulding, 310 Mass. 424, 429-30 (1941). Where Ernest asserts that he was deprived of management fees and the opportunity to purchase the defendants’ interests in Fruit Associates by virtue of the defendants’ fraud, breach of fiduciary duty, and other wrongful conduct, the defendants may hold property belonging to Ernest in a constructive trust. See Stevens v. Nagel 64 Mass.App.Ct. 136, 140 (2005), quoting Fortin v. Roman Catholic Bishop of Worcester, 416 Mass. 781, 789 (1994) (“Under Massachusetts law, a court will declare a pariy a constructive trustee of properly for the benefit of another if he acquired the property through fraud, mistake, breach of duty, or in other circumstances indicating that he would be unjustly enriched!.]”); see also Kelly v. Kelly, 358 Mass. 154, 156 (1970). As such, by bringing claims against Paul and Helen as executors, Ernest seeks to enforce an equitable interest in George N.’s estate, not a debt against the estate. See Feeney v. Feeney, 335 Mass. 534, 538 (1957) (G.L.c. 197, §9 did not bar claim seeking trust property held by executrix); New England Trust Co., 310 Mass. at 430-31 (bank not creditor of deceased’s estate where seeking to enforce equitable interest in stock over which it had right of option to purchase).
The defendants also cite G.L.c. 260, §11 as a bar to Ernest’s claims against Paul and Helen as executors of George N.’s estate. That statute requires that claims “founded on any contract made or act done, if made or done by any person acting as the executor ... of the estate of a deceased person, shall be brought within one year . . . after the right of action accrues.” Ernest has not, however, asserted any claims against Paul and Helen based on their conduct as the executors of George *637N.’s estate. Rather, he alleges fraud committed during George N.’s lifetime, mismanagement of Fruit Associates’ business, and other misconduct, none of which relates to Paul and Helen’s conduct in administering George N.’s estate. See Director of Liquidations v. Exchange Trust Co., 313 Mass. 351, 354 (1943) {“[General Laws c. 260, §11] seems to have been designed primarily to shorten the period of limitation with respect to new obligations incurred in the course of the administration of an estate or of a trust”); see also Reilly v. Whiting, 332 Mass. 745, 747 (1955) (G.L.c. 260, §11 applied to contract entered into by defendant as executrix).
Finally, the defendants cite G.L.c. 260, §2A, the three-year statute of limitations applicable to the accrual of tort claims.9 They assert that Count I (fraud), Count II (deceit), Count III (self-dealing), and Count IV (breach of fiduciary duty) accrued at or before George N.’s death on July 4, 1997, rendering the claims untimely because Ernest did not file them until September 20, 2000. “A motion to dismiss under Mass.R.Civ.P. 12(b)(6) . . . lies against a complaint which shows on its face that the statute of limitations has run prior to the date the action was commenced.” Babco Indus., Inc. v. New England Merchants Nat'l Bank, 6 Mass.App.Ct. 929, 929 (1978). While the face of the complaint shows that more than three years elapsed between George N.’s death and the filing of the complaint, the court finds that George N.’s death is not the determinative date for the purposes of G.L.c. 260, §2A as applied to Counts I-IV.
The defendants argue that as of George N.’s death, Ernest would have realized that the promised limited liability company had never been formed and would therefore never be formed. The defendants, however, overlook Ernest’s allegation that both George N. and Paul promised to form the limited liability company. Thus, taking this allegation as true and drawing a reasonable inference in Ernest’s favor, it is possible that he believed the formation of a limited liability company to act as Fruit Associates’ general partner could still happen after George N.’s death. The complaint is not clear as to when Ernest learned that he had been harmed by the defendants’ conduct.10 See Doe No. 4 v. Levine, 77 Mass.App.Ct. 117, 119-20 & n.11 (2010) (“The time at which a cause of action arises is fixed: an event occurred that concurrently or at a later date caused an injury. The discovery of that injury marks the time at which the cause of action accrues” (emphasis in original)). Thus, the court concludes that questions regarding whether Counts I-IV are timely under G.L.c. 260, §2A can be more appropriately addressed at a later proceeding after the development of a factual record. See Donovan v. Philip Morris USA, Inc., 455 Mass. 215, 228 (2009) (“Application of a statute of limitations usually involves a question of fact to be decided by a jury”).
C. Particularity of fraud allegations
A claim of fraud/deceit requires the plaintiff to “allege and prove that the defendant made a false representation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff relied upon the representation as true and acted upon it to [her] damage.”11 Masingill v. EMC Corp., 449 Mass. 532, 540 (2007) (citation omitted). The defendants argue that the complaint “fails to state with the required particularity [of Mass.R.Civ.P. 9(b)] the details of the alleged misrepresentation and/or reliance.” The court disagrees.
The complaint thoroughly outlines the alleged scheme that George N., Paul, and George E. undertook in order to amend Fruit Associates’ membership. George N. and Paul presented documents for Ernest to sign, stating that the addition of Fruit Corporation as a general partner was only temporary. They falsely promised that a limited liability company would be formed to act as the new general partner. Ernest agreed to sign the amendment papers in return for and in reliance on this promise. As a result of the amendment, George N. terminated Concord Management’s role as the Project’s management company, thereby diverting management funds away from Ernest and to the defendants via Fruit Corporation.12
All of the elements of a fraud claiming having been asserted in the complaint, Counts I and II will not be dismissed for failure to state a claim upon which relief can be granted.
D. Sufficiency of allegations regarding individual defendants
The defendants argue that neither the complaint nor the supplemental complaint assert any individual misconduct by Paul, Helen, Albert, and George E. that would permit Ernest to recover against them. The court disagrees for the most part.
1. The complaint
As to Paul, Ernest alleges in the complaint that he was involved in the fraudulent scheme to add Fruit Corporation as a general partner of Fruit Associates. According to the complaint, Paul may have drafted the amendment documents and he made misrepresentations about the nature of the amendment and the intention to form a limited liability company to act as general partner of Fruit Associates.
As to George E., the complaint alleges that he was in collusion with George N. and Paul regarding the fraudulent scheme discussed above.
As to Albert, the complaint alleges that he actively participated in the operation of Fruit Associates until early December 1997, a time period during which those managing Fruit Associates allegedly committed fraud. If he occupied a position of trust and confidence, he may have owed a fiduciary duty to Fruit Associates, see Chelsea Indus., Inc. v. Gaffney, 389 Mass. 1, 11 (1983), and any breach of that duty harmed Ernest as the only Fruit Associates partner not participating in or benefiting from the defendants’ misconduct. While the court finds that it is a close question whether Albert may be individ*638ually liable to Ernest, taking the complaint’s allegations as true and drawing all reasonable inferences in his favor, it concludes that there is a sufficient basis for liability at this stage of the proceedings.
Finally, the court agrees with the defendants that the complaint fails to allege any conduct by Helen that could give rise to liability under Counts I-IV. Ernest argues that she is properly named as a defendant in the complaint because equitable relief may be available against her as the allegedly wrongful recipient of management fees. See Brown v. Accredited Home Lending, Inc., 2009 WL 6297594 at *3 (Mass.Super. 2009) [26 Mass. L. Rptr. 559] (declining to dismiss claims against mortgage loan servicer where, although “(a]dmittedly, most of the counts do not contain allegations specific to” the servicer, servicer is necessary party for rescission). If it should appear at some future time that Helen is a necessary party or a party-in-interest, Ernest may move to join her under Mass.RCiv.P. 19. Otherwise, the court concludes that it is inappropriate to maintain Counts I-IV against Helen where Ernest has failed to allege in the complaint that she did anything unlawful.
2. The supplemental complaint
Under the supplemental complaint, Helen and George E. may be individually liable as officers of Fruit Corporation, which allegedly breached the fiduciary duly of “utmost good faith and loyalty” it owed to Ernest as a co-partner in Fruit Associates. Meehan v. Shaughnessy, 404 Mass. 419, 433 (1989). While “(o]fficers and employees of a corporation do not incur personal liability for torts committed by their employer merely by virtue of the position they hold in the corporation... [they] are liable for torts in which they personally participated.” Lyon v. Morphew, 424 Mass. 828, 831-32 (1997); see also Addis v. Steele, 38 Mass.App.Ct. 433, 440 (1995) (“An officer of a corporation who takes part in the commission of a tort by the corporation is personally liable for resulting injuries” (citation omitted)). The supplemental complaint alleges that Helen and George E. have personally participated in misconduct such as mismanagement of the Project and restricting Ernest’s access to the Project’s property and records.
' As for Paul and Albert, the court has already determined that the supplemental complaint fails to state claims against them upon which relief can be granted. See supra note 5.
ORDER
Based on the foregoing, it is hereby ORDERED that the defendants’ motion to dismiss be ALLOWED as to Count I, Count II, Count III, and Count IV as asserted against Helen L. Hayeck; be ALLOWED as to Count V, Count VI, and Count VII as asserted against Paul G. Hayeck as executor of George N. Hayeck’s estate, Helen L. Hayeck as executor of George N. Hayeck’s estate, Paul G. Hayeck individually, and Albert G. Hayeck; and be DENIED as to the remaining claims. The court takes no action on the defendants’ motion to strike.
According to the supplemental complaint, it was not until after George N.’s death that Concord Management was replaced. Further, in the supplemental complaint, Ernest alleges that it was replaced with Fruit Corporation and/or Concord Apartment Management Corporation, of which Helen and George E. are the officers, directors, and/or managers.
By order dated October 25, 2010, the court allowed Ernest to file a supplemental complaint pursuant to Mass.R.Civ.P. 15(d).
The court takes no action on the defendants’ motion to strike, which seeks, pursuant to Mass.R.Civ.P. 56(e), to strike portions of Ernest’s affidavit submitted in support of his opposition to the motion to dismiss and corresponding allegations in the complaint and supplemental complaint. The affidavit is outside the pleadings for purposes of Mass.R.Civ.P. 12(b)(6) and the court will therefore not consider it.
As an initial matter, the court notes that the supplemental complaint appears to assert Counts V-VII against all of the defendants, despite the fact that it only alleges wrongdoing by Fruit Corporation, Helen, and George E. To the extent that Ernest asserts Counts V-VII against Paul and Helen as executors of George N.’s estate, Paul as an individual, and Albert, those counts are dismissed for failure to state claims upon which relief can be granted.
The defendants also argue that Ernest cannot bring his claims derivatively because he failed to comply with the provisions of G.L.c. 108, §58 and Mass.R.Civ.P. 23.1. Where the court finds Ernest’s claims to be direct, he need not have complied with these procedural requirements.
The court notes that it was a close question as to whether certain claims in the supplemental complaint should have been brought derivatively. The defendants did not provide an analysis of the distinction between claims brought in the complaint and in the supplemental complaint, however, and the court therefore deemed it appropriate to maintain all the claims at this stage of the litigation.
General Laws c. 197, §9 was repealed as of July 1, 2011. See St. 2008, c. 521, §§16, 44. Given that the court concludes that the statute does not apply here, the repeal is immaterial.
In the heading of their argument regarding G.L.c. 260, •§2A, the defendants also cite laches as a bar to Ernest’s claims. They did not actually argue laches, though, and the court therefore does not consider the doctrine.
In the affidavithe submitted in support of his opposition to the motion to dismiss, Ernest provides information about when his claims accrued. As noted earlier, however, see supra note 4, the court may not consider this affidavit on a motion to dismiss.
Fraud and deceit are different names for the same claim. See Equipment & Sys. for Indus., Inc. v. Northmeadows Constr. Co., 59 Mass.App.Ct. 931, 931-32 (2003) (referring to deceit and fraud interchangeably); Nota Constr. Corp. v. Keyes Assocs., 45 Mass.App.Ct. 15, 16 (1998) (same).
The defendants assert that Ernest would have had no expectation of receiving management fees through Concord Management after George N.’s death on July 4, 1997, which served to dissolve that partnership. Even if this were the case, the complaint alleges that George N. terminated Concord Management’s services in August 1996. Almost ayear passed between this termination and Concord Management’s dissolution upon George N.’s death. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/2596444/ | 795 F. Supp. 272 (1992)
ALLSTATE INSURANCE COMPANY, Plaintiff,
v.
James E. NORRIS, Mary E. Houser, and Jeana Duane, Defendants.
No. IP 91-427-C.
United States District Court, S.D. Indiana, Indianapolis Division.
July 9, 1992.
*273 John W. Hammel, Yarling Robinson Hammel & Lamb, Indianapolis, Ind., for plaintiff.
James E. Norris, pro se.
Barbara J. Germano, Price & Shula, Indianapolis, Ind., for defendants Mary E. Houser and Jeana Duane.
ORDER ON MOTION FOR SUMMARY JUDGMENT
McKINNEY, District Judge.
Plaintiff Allstate Insurance Co. ("Allstate") has moved for summary judgment in this action, which seeks a declaration that Allstate is not liable to pay for injuries sustained by defendant Jeana Duane when she was shot by Allstate's insured, defendant James E. Norris, on March 22, 1990. Jurisdiction and venue are proper. For the reasons discussed below, the Court GRANTS Allstate's motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
The material facts are undisputed. Allstate, an Illinois corporation with its principal place of business in Northbrook, Illinois, issued a homeowners' insurance policy to Norris that was effective from March 30, 1989 to March 30, 1990, and covered his residence at 5038 West Minnesota Street in Indianapolis, Indiana. On March 22, 1990, Norris had an argument with an unidentified man in front of his house. This unidentified man ended the argument by firing two pistol shots at Norris, running across the street in a southeast direction, then crouching behind an automobile that was parked on the west side of the home at 5021 West Minnesota. In the meantime, Norris ran into the bedroom of his house, where he kept a .30 caliber, semi-automatic rifle. Norris took the rifle, which was loaded with twenty rounds of ammunition, and began shooting in the direction of the man. Norris fired a total of nine shots in attempting to "pin down" the man until sheriff's deputies could arrive. Because Norris was aiming at and over the car, he never hit the man, who eventually escaped.
Norris did hit Jeana Duane, however. Duane was one of several teenagers in the house at 5021 West Minnesota at the time Norris did his shooting. Duane was standing near the front (north) window of the house, holding an eighteen-month-old baby, when she was struck in the wrist by one of Norris's shots. The bullet shattered Duane's wrist and caused her to drop the baby, who also was hit by a bullet. Over the course of one to two minutes, a total of six shots entered the house, through either the front window or the side (west) window. One bullet struck the car behind which Norris's unknown assailant had crouched, and two struck a tree near the car.
Norris subsequently was arrested and charged with two counts of attempted murder and, by amended information, a third count of felony criminal recklessness. Norris pleaded guilty to count three on July 3, 1990, and admitted on the record that he "repeatedly [shot] a rifle into and through the house" at 5021 West Minnesota, although without "hitting anyone intentionally."[1] Transcript of Plea Hearing at 4, 8. At Norris's sentencing hearing on July 31, 1990, his lawyer attempted to clarify the meaning of Norris's earlier admission:
[Mr. Norris] meant to indicate ... that he did not intentionally fire shots into the house. It is stated [in the transcript of the plea hearing] he did not fire shots into the house. It's very clear that shots were fired into the house, and we would admit that. Mr. Norris admitted that in the factual basis taken by the Court. What he meant to say was that the shots were fired at, around, and into the house, but not intentionally at anyone who was in the house .... [T]here's no question Mr. Norris wants to tell the *274 Court today that shots were fired into the house.
Transcript of Sentencing Hearing at 3-4 (emphasis added). Norris told the court that this interpretation of his admission was correct, and he stated that his intent in firing had been to "scare" people, although it is not clear to what "people" he was referring. Id. at 5-6, 12. Norris was sentenced to eight years in prison.
Duane and her mother, defendant Mary Houser, filed a state civil complaint against Norris shortly after the shooting, seeking damages for assault and battery, mental and emotional distress, and negligence. Allstate initiated this action on April 22, 1991, asking for a declaration that it is not liable under Norris's homeowner's policy for any of Duane's or Houser's claims. Allstate moved for summary judgment on April 24, 1992. Houser and Duane timely responded to this motion on June 3, 1992; Allstate did not reply, and the motion became ripe for resolution on June 13, 1992.
II. SUMMARY JUDGMENT STANDARD
Motions for summary judgment are governed by Rule 56(c) of the Federal Rules of Civil Procedure. Rule 56(c) provides in relevant part:
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.
When the standard embraced in Rule 56(c) is met, summary judgment is mandatory. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S. Ct. 2505, 2510-11, 91 L. Ed. 2d 202 (1986). As stated in Celotex, summary judgment is not a disfavored procedural shortcut, but rather is an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action. Celotex, 477 U.S. at 327, 106 S. Ct. at 2554-55. Decisions of the Seventh Circuit are in conformity with this view. See, e.g., Patrick v. Jasper County, 901 F.2d 561, 565 (7th Cir. 1990); Spellman v. Commissioner, 845 F.2d 148, 151-52 (7th Cir.1988).
Moreover, the mere existence of a factual dispute is not by itself sufficient to bar summary judgment; the disputed fact must be outcome determinative. Anderson, 477 U.S. at 248, 106 S. Ct. at 2510; International Bhd. of Boilermakers v. Local D354, 897 F.2d 1400, 1406 (7th Cir.1990). The party opposing a motion for summary judgment bears an affirmative burden of presenting evidence that a disputed issue of material fact exists. Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991); Harris v. City of Zion, 927 F.2d 1401, 1407 (7th Cir.1991). Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute. Clampitt v. Ft. Wayne, 682 F. Supp. 401 (N.D.Ind.), aff'd, 864 F.2d 486 (7th Cir.1988).
III. DISCUSSION
Allstate has advanced three grounds upon which it says its policy does not cover Duane's injuries: (1) her injuries were not the result of an "accident," which is a prerequisite to recovery; (2) they were caused by acts that Norris "intended or expected" to cause bodily injury; and (3) they resulted from a "criminal act" by Norris. Because the first and third grounds both are dispositive, the Court will not address the second.
A. Accident
The policy issued by Allstate to Norris contains two coverage provisions that are implicated by Duane's and Houser's state law claim. Coverage X provides liability protection as follows:
Subject to the terms, limitations and conditions of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an accident and covered by this part of the policy.
*275 Allstate Deluxe Homeowners Policy (7/89), at 23 (emphasis added). Coverage Y delineates guest medical protection:
Allstate will pay the reasonable expenses incurred for necessary medical, surgical, x-ray and dental services; ambulance, hospital, licensed nursing and funeral services; and prosthetic devices, eye glasses, hearing aids and pharmaceuticals. These expenses must be incurred and the services performed within three years from the date of an accident causing bodily injury covered by this part of the policy.
Id. at 26 (emphasis added). Each provision clearly indicates the first expressly, and the second by necessary implication that Norris's homeowner's policy will pay for injuries only if they result from accident. Allstate claims that Duane's injuries do not fall into this category.
The Seventh Circuit, in Red Ball Leasing v. Hartford Accident & Indemnity Co., 915 F.2d 306 (7th Cir.1990), evaluated the meaning of the word "accident" as it is used in insurance provisions that define the scope of coverage. In that case, Red Ball repossessed four trucks that belonged to Luttrell and in which it held security interests. Red Ball's records indicated that Luttrell was behind on his payments; Red Ball therefore thought it was entitled to take the trucks. Red Ball was wrong; Luttrell's payments were current. Sometime after the repossession, Luttrell sued Red Ball for conversion and breach of contract, and Red Ball requested that its insurer, Hartford, defend it in the action. Red Ball theorized that its conversion of the trucks constituted an "accident" under its policy, and therefore that Hartford was bound to defend it, because the repossession, though intentional, was made under an erroneous belief that it was lawful. Hartford refused to get involved, so Red Ball sued. Red Ball, 915 F.2d at 307-08.
The court of appeals held that Red Ball's conversion of the trucks was not an accident, and therefore was not covered under the policy. The court drew a clear distinction between an event that is unexpected or unintended (which is an accident), and an event or act that is intended, but causes unexpected consequences (which is not). Under this distinction, a volitional act which is always intended does not constitute an accident, even where the results may be unexpected or unforeseen. Id. at 309-11 & n. 1.[2] Accordingly, Red Ball's intentional taking of the trucks, whatever the consequences, was no accident. Id. at 311-12.
Under the Red Ball analysis, Duane's injuries here clearly did not result from an accident, and therefore are not covered under Norris's policy. This result obtains even if one assumes that Norris did not fire his gun at anyone in particular, because it is undisputed that he meant to fire his gun, and that he meant to fire it in the direction of the house where Duane was standing. Norris's actions therefore were volitional, and clearly not accidental, whether or not their consequences were unforeseen. Thus, Duane's injuries are not covered.
B. Criminal Act
Another ground supports Allstate's motion. Norris's policy expressly does not cover injuries that result from any "criminal act or omission" by an insured. See Allstate Deluxe Homeowners Policy (7/89), at 24 (Coverage X), 26 (Coverage Y). Norris's shooting constituted criminal recklessness a class C felony in Indiana, see Ind. Code § 35-42-2-2(c)so under the plain and ordinary meaning of the exclusion, Duane's injuries, which resulted from that shooting, are not covered by the policy. See Southbend Escan Corp. v. Federal Ins. Co., 647 F. Supp. 962, 966-67 (N.D.Ind. 1986); Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind.1985), cert. denied, 479 U.S. 1060, 107 S. Ct. 940, 93 L. Ed. 2d 990, 991 (1987); City of Muncie v. United Nat'l Ins. Co., 564 N.E.2d 979, 982 (Ind.App.1991).
Duane and Houser do not seriously deny the effect of this exclusion, but they *276 attack it as being invalid as a matter of public policy. See City of Muncie, 564 N.E.2d at 982. In essence, they argue that while an insurance contract may exclude coverage for intentional criminal acts, it may not exclude coverage for unintentional criminal acts i.e., those that are merely reckless. According to this argument, any policy which "excludes all criminal acts regardless [of] whether those acts resulted from intended, expected, or merely reckless conduct" is void. Defendants' Opposing Brief at 17.
This claim has no basis in the law. Duane and Houser have cited no cases, and the Court knows of none, which have held that insurance policies as a matter of public policy cannot exclude coverage for injuries resulting from unintentional criminal acts.[3] In other jurisdictions, such exclusions have regularly been upheld. See, e.g., Hooper v. Allstate Ins. Co., 571 So. 2d 1001, 1003 (Ala.1990); Allstate Ins. Co. v. Schmitt, 238 N.J.Super. 619, 570 A.2d 488, 492-94 (1990); Allstate Ins. Co. v. Sowers, 97 Or. App. 658, 776 P.2d 1322, 1323 (1989); see also Allstate Ins. Co. v. Freeman, 432 Mich. 656, 443 N.W.2d 734, 748-49 (1989).[4] Similarly, no court appears to have invalidated, on public policy grounds, an exclusion for injuries caused by less-than-intentional conduct. As a result, Norris's policy must be enforced according to its terms, even though the result is that Duane's injuries are not covered. See Southbend Escan, 647 F.Supp. at 966.
IV. CONCLUSION
For the reasons discussed above, Allstate's motion for summary judgment is GRANTED.
SO ORDERED.
ENTRY OF JUDGMENT
The Court has granted summary judgment to plaintiff Allstate Insurance Co. against the defendants in this action. Accordingly, plaintiff is not liable to pay or settle any claims by defendants Jeana Duane or Mary Houser which stem from the events involving its insured, James Norris, on March 22, 1990. Similarly, plaintiff is not obligated to defend Norris, or to contribute funds toward his defense, with regard to any such claims. This cause is DISMISSED WITH PREJUDICE.
NOTES
[1] Pursuant to a plea agreement, counts one and two were dismissed.
[2] Indiana's definition is in accord. See National Mut. Ins. Co. v. Eward, 517 N.E.2d 95, 100 (Ind.App.1987) ("accident" means "an unexpected happening without an intention or design").
[3] Duane and Houser have cited two cases, each of which fails to support their position. The provision in Bolin v. State Farm Fire & Casualty Co., 557 N.E.2d 1084 (Ind.App.1990), excluded coverage for "bodily injury ... which is expected or intended by an insured." The court held that "intended" embodies a higher culpability level than "reckless," so that criminally reckless conduct was not necessarily excluded from coverage under the policy. Id. at 1088-89. This holding, however, says nothing about whether public policy requires a minimum culpability level for criminal act exclusions. No such exclusion was even at issue there.
The case of Allstate Insurance Co. v. Schmitt, 238 N.J.Super. 619, 570 A.2d 488 (1990), actually cuts against the defendants' argument, because it held that a provision excluding coverage for reckless but unintentional criminal conduct did not violate public policy. The defendants argue that this holding was premised on a definition of "reckless" different from the one recognized in Indiana, but the language actually used in Schmitt tends to rebut this contention. Compare Schmitt, 570 A.2d at 493 (defining recklessness under New Jersey law) with Bolin, 557 N.E.2d at 1088 (quoting the Indiana statutory definition).
[4] One might argue that these cases dealt with exclusions that are sufficiently different as to render them inapplicable here. For example, the clause in Schmitt excluded "any bodily injury ... which may reasonably be expected to result from the intentional or criminal acts of an insured person...." Schmitt, 570 A.2d at 490 (emphasis deleted). These differences tend to reinforce the validity of the exclusion in Norris's policy, however. The Schmitt clause required analysis of whether the insured reasonably could have expected the results of his acts. The provision in Norris's policy, by contrast, does not mention the insured's expectation. If the injury results from a criminal act, it is excluded, regardless of what results Norris actually or should have expected. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1113866/ | 652 So. 2d 1090 (1995)
SOUTH CENTRAL BELL TELEPHONE COMPANY
v.
SEWERAGE AND WATER BOARD OF NEW ORLEANS.
Nos. 94-CA-1648, 94-CA-1649.
Court of Appeal of Louisiana, Fourth Circuit.
March 16, 1995.
Writ Denied May 19, 1995.
*1092 R. Henry Sarpy, Jr., L. Barbee Ponder, IV, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, and Ronald W. Tweedel, New Orleans, for plaintiff-appellee.
Brian A. Ferrara, John D. Lambert, Jr., Jacob Taranto, III, New Orleans, for defendant-appellant.
Before LOBRANO, WALTZER and MURRAY, JJ.
WALTZER, Judge.
STATEMENT OF THE CASE
Defendant, Sewerage and Water Board of New Orleans (SWB), appeals from a judgment of the Civil District Court for the Parish of Orleans granting the motion for summary judgment filed on behalf of plaintiff, South Central Bell Telephone Company (Bell). The summary judgment awarded Bell $26,302.82 for damages sustained to certain of Bell's underground and overhead cables damaged by SWB's excavation and negligent operation of overhead machinery. We find no error in the trial court's action and affirm.
DAMAGE TO OVERHEAD CABLE LOCATED AT EADS AND INDUSTRY STREETS
Gilmore W. Alexander, III, Bell's supervisor of network operations, testified by affidavit that he investigated and supervised repair of an aerial telephone cable located at the Sewerage and Water Board facility at Eads and Industry Streets, and was told by an SWB employee that an SWB co-employee struck Bell's aerial cable while moving a piece of heavy equipment. Richard Richardson, Bell's staff manager of claims, testified by affidavit that the cost incurred by Bell in repairing the damage to the aerial cable was $636.57. SWB submitted no evidence disputing these material facts.
Appellate courts review summary judgments de novo, using the same criteria applied by trial courts to determine whether summary judgment is appropriate. Reynolds v. Select Properties, Ltd., 93-1480 (La. 4/11/94), 634 So. 2d 1180, 1183; Schroeder v. Board of Supervisors of Louisiana State University, 591 So. 2d 342, 345 (La.1991). While a motion for a summary judgment is not to be used as a substitute for trial on the merits, Oller v. Sharp Elec., Inc., 451 So. 2d 1235 (La.App. 4th Cir.1984), writ denied 457 So. 2d 1194 (La.1984), a summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and that the mover is entitled to *1093 judgment as a matter of law. La.C.Civ.P. art. 966(B).
To satisfy his burden, the party moving for the summary judgment must meet a strict standard by showing that it is quite clear as to what the truth is, and that excludes any real doubt as to the existence of material fact. Vermilion Corp. v. Vaughn, 397 So. 2d 490, 493 (La.1981); Dibos v. Bill Watson Ford, Inc., 622 So. 2d 677, 680 (La. App. 4th Cir.1993).
A fact is material if it is essential to a plaintiff's cause of action under the applicable theory of recovery and without which plaintiff could not prevail. Generally, material facts are those that potentially insure or preclude recovery, affect the litigant's ultimate success, or determine the outcome of a legal dispute. Prado v. Sloman Neptun Schiffahrts, A.G., 611 So. 2d 691, 699 (La.App. 4th Cir.1992), writ not considered 613 So. 2d 986 (La.1993).
All evidence and inferences drawn from the evidence must be construed in the light most favorable to the party opposing the motion. Carr v. City of New Orleans, 622 So. 2d 819, 822 (La.App. 4th Cir.1993), writ denied 629 So. 2d 404 (La.1993). The papers supporting the position for the party moving for the summary judgment are to be closely scrutinized while the opposing papers are to be indulgently treated, in determining whether mover has satisfied his burden. Vermilion Corp. v. Vaughn, 397 So.2d at 493.
Where the trial court is presented with a choice of reasonable inferences to be drawn from subsidiary facts contained in affidavits and attached exhibits, reasonable inferences must be viewed in the light most favorable to the party opposing the motion. Duvalle v. Lake Kenilworth, Inc., 396 So. 2d 1268, 1269 (La.1981).
When a motion for summary judgment is made and supported with affidavits, depositions and/or answers to interrogatories, the adverse party may not rest merely on the allegations or denials contained in the pleadings. Poydras Square Associates v. Suzette's Artique, Inc., 614 So. 2d 131, 132 (La.App. 4th Cir.1993). Similarly, argument of counsel and briefs, no matter how artful, are not sufficient to raise a genuine issue of material fact. Despite the presence of disputed facts, summary judgment will be granted as a matter of law if the contested facts present no legal issues. Davenport v. Amex Nickel, Inc., 569 So. 2d 23, 27 (La. App. 4th Cir.1990), writ denied 572 So. 2d 68 (La.1991). Allegations without substance will not preclude a summary judgment. Id.
Mindful of these standards, we find the trial court correctly granted the motion for summary judgment as to this claim. The only verified allegation made by SWB with respect to this damage claim was a notation contained in interdepartmental correspondence that SWB performed no excavation at the site on the date in question. Since this claim is for damage to overhead cable, existence of excavation operations is irrelevant. SWB failed to offer sworn evidence to place in issue any material fact.
DAMAGES TO UNDERGROUND INSTALLATIONS
A person such as SWB performing excavation work in an area where underground cables are located is under the positive duty to inform himself of the location of such cables in order to prevent damaging them. This duty arises independently of any contractual relationship between the parties. Whether or not SWB was obliged to give oral notice to Bell is not relevant to the inquiry herein. South Cent. Bell Telephone Co. v. Louisiana Power & Light Co., 501 So. 2d 869, 872 (La.App. 5th Cir.1987).
In Roberts v. Benoit, 605 So. 2d 1032 (La.1991), the Louisiana Supreme Court held that in order to prevail on a negligence claim under La.C.C. articles 2315 and 2316 a plaintiff must prove 5 separate elements: (1) the defendant had a duty to conform his conduct to a specific standard (the duty element); (2) the defendant failed to conform his conduct to the appropriate standard (the breach of duty element); (3) the defendant's substandard conduct was a cause-in-fact of the plaintiff's injuries (the cause-in-fact element); (4) the defendant's substandard conduct was a legal cause of the plaintiff's injuries *1094 (the scope of liability or scope of protection element); and (5) actual damages (the damages element.) To meet the cause-infact element, a plaintiff must prove only that the conduct was a necessary antecedent of the accident, that is, but for the defendant's conduct, the incident probably would not have occurred. The critical test in Louisiana is phrased in terms of the "ease of association" which melds policy and foreseeability into one inquiry: Is the harm which befell the plaintiff easily associated with the type of conduct engaged in by the defendant? The essence of the legal cause inquiry is whether the risk and harm encountered by the plaintiff fall within the scope of protection of the duty.
The scope of the duty inquiry is ultimately a question of policy as to whether the particular risk falls within the scope of the duty. Rules of conduct are designed to protect some persons under some circumstances against some risks. The scope of protection inquiry asks whether the enunciated rule extends to or is intended to protect this plaintiff from this type of harm arising in this manner.... In determining the limitation to be placed on liability for defendant's substandard conduct, the proper inquiry is often how easily the risk of injury to plaintiff can be associated with the duty sought to be enforced. Faucheaux v. Terrebonne Consolidated Government, 615 So. 2d 289, 293-294 (La.1993).
Applying this standard to Bell's claims, it is clear that the risk of damage to underground cable is clearly associated with the negligent act of failing to ascertain prior to commencement of excavation whether the cable is present.
Duty is a question of law. Simply put, the inquiry is whether the plaintiff has any law-statutory, jurisprudential or arising from general principles of faultto support his claim. Faucheaux v. Terrebonne Consolidated Government, 615 So. 2d 289, 292 (La.1993). The jurisprudence is clear that an excavator has a legal duty to inform himself of the location of underground cables. South Cent. Bell Telephone Co. v. Louisiana Power & Light Co., supra; South Cent. Bell Tel. Co. v. Southern Excavation, Inc., 401 So. 2d 468 (La.App. 2d Cir.1981); Southern Bell Tel. & Tel. Co. v. Roy Cook & Sons, Inc., 218 So. 2d 404 (La.App. 2d Cir.1969).
The trial judge determined as a matter of law that SWB's failure to notify Bell of its proposed excavations violated the provisions of La.R.S. 40:1749.11 et seq., the "Louisiana Underground Utilities and Facilities Damage Prevention Law." La.R.S. 40:1749.11 B. sets forth Louisiana's public policy to promote "the protection of property, workmen, and citizens in the immediate vicinity of an underground facility or utility from damage, death, or injury and to promote the health and well-being of the community by preventing the interruption of essential services which may result from ... damage to, underground facilities or utilities." La.R.S. 40:1749.13 requires excavators such as SWB to serve at least 48 hours' telephonic notice of intent to excavate to a regional notification center serving the area in which the proposed excavation is to take place. The only exception to the 48 hour minimal notice requirement is for "emergency excavation to ameliorate an imminent damage to life, health or property." La.R.S. 40:1749.15 (Emphasis added). In the event of such an emergency, the excavator is mandated to give oral notice of the emergency excavation "as soon as practicable" to the regional center or to each underground operator having facilities located in the area and, "if necessary, emergency assistance shall be requested from each operator in locating and providing immediate protection to its underground facilities." Id.
Bell's affidavits and depositions of SWB employees John R. Huerkamp and Brian Keith Jones establish that SWB excavated and failed to give the required 48 hour notice with respect to the following locations at which Bell's underground installations were damaged: 4851 Shalimar, 2120 South Gayoso, 52 Pratt, 1818 Franklin Avenue, 1500 Aviators, the intersection of Texas Drive and General DeGaulle, and the intersection of Old Gentilly Road and Poche Court. Log sheets prepared by SWB and by the regional notification center were attached to the affidavits and depositions, and reflect the absence of the required notice.
*1095 SWB submitted Huerkamp's affidavit that "maintenance of the sewer, water and drainage systems are of an emergency nature because immediate action is required to repair sites in order to prevent the interruption of those services." This affidavit does not set forth any "imminent damage to life, health or property" as required by the statute to justify emergency excavation without 48 hour notice. The conclusory language of the affidavit does not put at issue any fact material to the dispute between these parties, and cannot serve as the basis for denial of Bell's motion for summary judgment.
QUANTUM
The affidavit of Richard Richardson, as to which there is no contradictory evidence of record, establishes damages attributable to each of the foregoing excavations:
4851 Shalimar: $ 1,699.51
1500 Aviators: 2,255.37
1818 Franklin Avenue: 404.41
52 Pratt 1,246.68
Poche and Old Gentilly 6,189.84
Texas and DeGaulle 1,239.17
James F. Perot, Jr., Bell's staff manager for claims, testified by affidavit that the cost to repair the damage to the Bell installation at 2120 South Gayoso was $12,631.27.
Applying Louisiana's standard for review of the trial court's action on motion for summary judgment, we find no error below and affirm.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1411817/ | 209 F. Supp. 249 (1962)
In the Matter of the Arbitration between STEF SHIPPING CORPORATION, Petitioner,
and
NORRIS GRAIN CO., under Charter Party dated September 17, 1959, Respondent.
United States District Court S. D. New York.
October 4, 1962.
*250 Poles, Tublin & Patestides, New York City, for petitioner, Christ Stratakis, New York City, of counsel.
McGovern, Vincent, Connelly & Soll, New York City, for respondent, Hugh P. Mullen, New York City, of counsel.
DAWSON, District Judge.
This is a motion by petitioner Stef Shipping Corporation, brought pursuant to 9 U.S.C. § 10, seeking to vacate an arbitration award in the above proceedings on the following grounds:
(1) Respondent's arbitrator was guilty of misconduct and evident partiality.
(2) The arbitration majority exceeded their authority by making an award without the participation of the arbitrator selected by petitioner.[1]
In September 1959 petitioner and respondent entered into a charter party involving the use of a Liberian flag vessel owned by petitioner. Certain disputes arose between the parties growing out of this transaction and the matter was referred to arbitration pursuant to provisions in the charter party. The charter party included a typical arbitration clause providing for a tripartite arbitration board to be selected, one each by the disputants and the third by the two arbitrators *251 so chosen.[2] Petitioner designated Captain George Stam and respondent Mr. Henry J. Dahl as their respective arbitrators; the nominated arbitrators being unable to agree mutually upon the third member the petitioner obtained an order of this court appointing John H. Norris to act as the third arbitrator.
The first arbitration meeting was held on November 14, 1961, with all three arbitrators attending, as well as counsel representing both sides. It was at this meeting, petitioner charges, that arbitrator Dahl showed an inability "to conduct himself in an unbiased and impartial manner" thereby rendering himself ineligible to participate further in the arbitration proceedings. Petitioner's contentions as to this first point are based on a series of statements made by Mr. Dahl which indicate, they claim, that Mr. Dahl was partial and biased in favor of his nominators,[3] and that in addition he received evidence improperly from respondent prior to the arbitration.[4]
Counsel for petitioner made several objections to Mr. Dahl's conduct. It should be noted here, however, that although petitioner's counsel severely criticized Mr. Dahl they never requested that he resign or asked the arbitration board to take action to remove him at that time. The first formal demand that Mr. Dahl step out of the proceedings was made by letter dated December 20, 1961, some eight days after the arbitration proceedings were mutually agreed closed, except for the limited purpose of submitting certain documents.
Petitioner's second point grows out of the following circumstances: It appears that relations between the parties became more acrimonious as the hearings progressed, with counsel for each side accusing his opponent's arbitrator of misconduct. Finally, on February 14, 1962, Mr. Norris, the court appointed third arbitrator, called a meeting at which he strongly urged all parties concerned to refrain from their attacks on the arbitrators. *252 There is some dispute as to the exact phraseology of Mr. Norris' remarks, but they were apparently to the effect that if such attacks did not cease the arbitrators might or would be constrained to resign. He also recommended that the parties attempt to settle the entire matter during the next week. Mr. Dahl was not present at this meeting.
On February 16, 1962 counsel for respondent wrote to Mr. Norris demanding an opportunity to examine Captain Stam to determine his impartiality. Some two weeks later Captain Stam proffered his resignation, giving as his reason the continuation of attacks on his impartiality reflected in the aforesaid letter of February 16th.
Despite this resignation, however, Mr. Norris and Mr. Dahl met together and issued an award on May 24, 1962. This award allowed $154.08 on petitioner's original claim of almost $3,000.
Petitioner asserts that the foregoing action was invalid because the arbitration board exceeded its authority in issuing such award after the resignation of one of its members, allegedly pursuant to an agreement or commitment made on behalf of the board by Mr. Norris that all arbitrators would resign if the attacks on the arbitrators continued.
The Court will examine this latter contention first. It is true apparently that Mr. Norris, in attempting to calm the proceedings, made some mention of the board resigning if personal attacks on the arbitrators did not cease. But even assuming, arguendo, that Mr. Norris did positively state at the February 14th meeting that the entire panel would resign if the attacks were renewed, this was not the type of binding commitment which required the resignation of all the arbitrators in the event of further attacks. To the contrary, it seems to be a statement made during an informal meeting which was meant to emphasize Mr. Norris's intentions to proceed with the hearings with a minimum of recriminations and controversy. The statement alone, without a further meeting of the parties or the arbitration panel, was no justification for Captain Stam's unilateral decision to resign, and certainly he had no reason to believe that the other arbitrators were bound to follow suit. The respondent's letter of February 16th, which was ostensibly the stimulus for Captain Stam's resignation, was merely a conditional demand for examination of Captain Stam's impartiality "in the event * * * that there is no withdrawal by the claimant of the unjustified attack upon the arbitrator designated by the respondent." (Monroe letter dated February 16, 1962 Exhibit G of petitioner's moving affidavit). Whether this can be called a renewal of the attack is open to question, and in any event it certainly was not operative to automatically bring about the resignation of the entire board without further consultations. Whether Captain Stam's sensibilities are of so delicate a nature that he could not withstand a slur on his professional competence, or whether he resigned for other reasons, is not for this Court to decide. If he felt that the February 16th letter constituted an attack on his impartiality and was grounds for the board's resignation pursuant to Mr. Norris's warning, then he should have requested a meeting of the entire board, stated his belief, and have it take whatever action it felt appropriate. He chose not to do this. The board made no decision to resign en masse and his unilateral decision to do so was not justified. Petitioner's contention, therefore, that the remaining two arbitrators exceeded their authority by rendering an award in the absence of Captain Stam is without merit.[5]
*253 Petitioner urges as a separate ground for vacating the award that Mr. Dahl was guilty of "evident partiality" in favor of his nominator, thus rendering the award a nullity. The Court must disagree. The burden of proving an arbitrator guilty of conduct such as would require a court to vacate an otherwise valid arbitration award lies with the moving party. American Almond Products Co. v. Consolidated Pecan Sales Co., Inc., 144 F.2d 448, 154 A.L.R. 1205 (2d Cir. 1944). Petitioner points to colloquy in the record as an indication that Mr. Dahl took a partisan position in favor of the respondent. (Footnotes 3 and 4 supra). Conceding that Mr. Dahl was partisan and predisposed in respondent's favor, this is not sufficient grounds to disqualify him. Petitioner relies upon the older view, that each member of an arbitration panel must be completely neutral and impartial. More recent pronouncements on the conduct of arbitrators are somewhat more realistic. They recognize that in a tripartite arrangement, where each party to a dispute is given the right to select an arbitrator and the third member is selected by them or by a disinterested party, the arbitrator selected by the disputants cannot be expected to play a wholly impartial part. They are partisans once removed from the actual controversy. The situation has been well summarized in a recent New York case, Astoria Medical Group v. Health Insurance Plan, 11 N.Y.2d 128, 227 N.Y.S.2d 401, 182 N.E.2d 85 (1962), in which the court stated:
"Arising out of the repeated use of the tripartite arbitral board, there has grown a common acceptance of the fact that the party-designated arbitrators are not and cannot be `neutral', at least in the sense that the third arbitrator or a judge is. * * *
"In short, usage and experience indicate that, in the type of tripartite arbitration envisaged by the contract before us, each parties' arbitrator `is not individually expected to be neutral' [Citing authorities]." At pp. 404-405 of 227 N.Y.S. 2d, at p. 87, of 182 N.E.2d.
See also Petition of Dover Steamship Co., 143 F. Supp. 738 (S.D.N.Y.1956).
It has been adjudicated that the right to select an arbitrator is a valuable one. Matter of Lipschutz v. Gutwirth, 304 N.Y. 58, 106 N.E.2d 8. The court, in Astoria Medical Group v. Health Insurance Plan, supra, commenting upon this decision, said:
"* * * The right to appoint one's own arbitrator, which is of the essence of tripartite arbitration and which was vindicated in the Lipschutz case, would be of little moment were it to comprehend solely the choice of a `neutral'. It becomes a valued right, which parties will bargain for and litigate over, only if it involves a choice of one believed to be sympathetic to his position or favorably disposed to him." At p. 135 of 11 N.Y.2d, at p. 405 of 227 N.Y.S.2d, at p. 188 of 182 N.E.2d.
Petitioner nowhere urges that Mr. Dahl's determination was based on fraud or corruption, and it fails to point out wherein the majority award itself was improper due to the partiality of Mr. Dahl. It has directed its efforts at attempting to show Mr. Dahl's lack of impartiality, but has neglected to prove or even allege that the award was defective by reason of such partiality. The attacking party must show more than partisanship; it must show some overt misconduct. Astoria Medical Group v. Health Insurance Plan, supra. The fact that Mr. Dahl consulted with his nominator prior to the arbitration hearings is not shocking. It would be unrealistic to expect a party engaged in an arbitration dispute to nominate an arbitrator without telling him what the dispute is about. It must be pointed out that there is no evidence that the award itself was based upon evidence or documents not before the arbitration panel, only that Mr. Dahl had conferred with respondent prior to the start of the arbitration hearings.
*254 Courts have been very hesitant to override arbitration awards, unless the award is shown clearly to be invalid under section 10 of 9 U.S.C.A. Amicizia Societa Navigazione v. Chilean Nitrate & Iodine Sales Corp., 274 F.2d 805 (2d Cir. 1960). This is not the type of irregularity which the statute contemplates as being sufficient to vacate an otherwise valid arbitration award. The motion is denied.
NOTES
[1] "In either of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration
"(a) Where the award was procured by corruption, fraud, or undue means.
"(b) Where there was evident partiality or corruption in the arbitrators, or either of them.
"(c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
"(d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." 9 U.S.C.A. § 10.
[2] The arbitration clause in the charter party reads as follows:
"* * * Should any dispute arise between Owners and the Charterers, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The Arbitrators shall be commercial men."
[3] "MR. DAHL: * * * Under the circumstances, since the owners have apparently got to the point of having this put in on a legal basis, I feel I would like to ask a postponement so that I could have the benefit of legal advice in preparing a counter-statement.
"MR. POLES [Petitioner's Counsel]: What do you mean by `preparing a counter-statement'?
"MR. DAHL: Counter to this here." (S.M. p. 6).
* * * * *
"MR. DAHL: Excuse me. Should we take these items up one by one, or should he complete his statement?
"CHAIRMAN NORRIS: I think he should be allowed to complete his statement.
"MR. DAHL: And then counteract that?" (S.M. p. 14)
[4] "MR. DAHL: With regards to the question of whether there is demurrage at Duluth or not, is a question of whether there isn't any dispatch at Duluth. I have evidence to submit that there is dispatch due rather than demurrage due at Duluth.
* * * * *
"MR. DAHL: But I have evidence here that is in disagreement with the statement here with regard to the claim for demurrage.
* * * * *
"MR. POLES: I am asking a question now. How do you have evidence? You just stated on the record that you have evidence contrary to what the petitioner is presenting. How do you have this evidence come into your possession?
"MR. DAHL: From Norris Grain Company copies from the charterers. Copies of the letters, and weather reports official weather reports.
"MR. POLES: Norris Grain gave you these?
"MR. DAHL: That's right.
"MR. POLES: When did they give you this?
"MR. DAHL: At the time they asked me to act as Arbitrator." (S.M. p. 15)
[5] It is well established, and apparently not contended otherwise by the petitioner, that a determination of two of the three members of an arbitration panel is sufficient to constitute a valid award, assuming that the absent arbitrator's failure to join in the award was not due to the misconduct of the majority. Marine Transit Co. v. Dreyfus, 284 U.S. 263, 52 S. Ct. 166, 76 L. Ed. 282 (1931); Cia De Navigacion "Julia", S. A. v. P. D. Machessini & Co., 170 F. Supp. 214 (S.D.N.Y.1959). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1122737/ | 672 P.2d 406 (1983)
In the Matter of INTEREST ON LAWYERS' TRUST ACCOUNTS.
No. 19266.
Supreme Court of Utah.
October 25, 1983.
C. Jeffrey Paoletti, Salt Lake City, for Utah State Bar Ass'n.
PER CURIAM:
This petition invokes the Court's constitutional original jurisdiction to regulate the legal profession. See generally In re Utah State Bar Petition, Etc., Utah, 647 P.2d 991 (1982).
The Utah Bar Foundation and the Board of Commissioners of the Utah State Bar seek approval to implement a program under which interest accrued on certain lawyers' accounts held in trust for clients would be paid to the Foundation, a nonprofit corporation, to support law-related charitable objects such as legal aid for the disadvantaged, law reform, and the administration of justice. Interest on lawyers' trust accounts (I.O.L.T.A.) programs have now been adopted in about fifteen states and in Canada and Australia. The concept has been endorsed by the Conference of Chief Justices, by the Board of Governors of the American Bar Association, and by other interested organizations.
Published opinions describing the history and affirming the legality, tax clearance, and ethical acceptability of I.O.L.T.A. programs include: Matter of Interest on Trust Accounts, Fla., 402 So. 2d 389 (1981); Petition of Minnesota State Bar Association, Minn., 332 N.W.2d 151 (1982); Petition of New Hampshire Bar Association, 122 N.H. 971, 453 A.2d 1258 (1982); Rev.Rul. 81-209, 1981-2 C.B. 16 (interest earned on I.O.L.T.A. account and paid to Bar Foundation not taxable to client); ABA Comm. on Ethics and Professional Responsibility, Formal Op. 348, 68 A.B.A.J. 1502 (1982) (ethical for lawyers to participate *407 in I.O.L.T.A. program). On the authority of these precedents, we approve the petition, with the following comments for clarification.
1. The program involves only lawyers' deposits of clients' funds that are nominal in amount or expected to be held for only a short period of time. Professional ethics forbid lawyers from receiving the interest on such accounts. ABA Comm.Op. No. 348, 68 A.B.A.J. at 1503-04. Currently, such funds are usually pooled and held in noninterest-bearing accounts since the separate balances do not yield enough interest to cover the expense of computing, remitting, and reporting to the Internal Revenue Service the amounts attributable to each client. This program will allow noninterest-bearing lawyers' trust accounts to be switched to interest-bearing accounts whose pooled earnings will be paid to a charitable organization that will use them for the public benefit.
2. Where client funds are of sufficient amount or are held for a sufficient period that the lawyer can reasonably be expected to foresee that they will yield enough interest to be of significant benefit to the client after transaction costs, the lawyer will continue to be obligated to make the funds produce income for the benefit of the client. Minnesota, 332 N.W.2d at 157-58; New Hampshire, 453 A.2d at 1261; cf. 2 A. Scott, The Law of Trusts §§ 180.3, 181 (3d ed. 1967 and Supp. 1981).
3. The program will be voluntary as defined here.[1] By written notice to the Foundation, any lawyer or law firm may affirmatively elect not to participate, but the program will apply to all lawyers and law firms not giving this notice.
4. The I.O.L.T.A. program is not conditioned upon the approval of clients. Indeed, if client approval were required, the Internal Revenue Ruling cited above would probably require that clients be taxed on the earnings on their respective balances in the pooled account, which would require computations, notices, and forms whose costs would render the whole program impractical.
5. It is unnecessary to notify individual clients whose funds are pooled in interest-bearing accounts in the I.O.L.T.A. program, but lawyers and law firms are encouraged to assure that their clients understand the nature and limitations of the I.O.L.T.A. program, especially the fact that it does not deprive clients of any interest income previously available to them from the investment of their funds. Lawyers should also help their clients and the public at large to understand that the I.O.L.T.A. program is expected to result in substantial public benefits. The following statements of the Florida and Minnesota Supreme Courts illustrate the policy considerations:
We urge the Bar to encourage participation in this program, and in furtherance of that end to assist Florida financial institutions and Florida attorneys with as much information and aid as may be necessary to establish and maintain simple and inexpensive compliance procedures. The foremost objective of our 1978 program was to enhance the capability of the legal profession to deliver legal services to the poor. The broad delivery of legal services has long been a cherished commitment of this Court. At a time in this nation when existing governmental resources for this purpose are drastically threatened, our revisitation to this program provides a propitious occasion to reemphasize our commitment and to revalidate our methodology.
Florida, 402 So.2d at 396 (footnotes omitted).
Since it is not possible as a practical matter to credit the interest to individual clients, we approve of the proposed concept of allowing such funds to be used for *408 tax-exempt public purposes rather than to allow the interest to be lost.
Minnesota, 332 N.W.2d at 157.[2]
6. For the reasons adequately explained in the Florida, Minnesota, and New Hampshire opinions cited above, we see no federal or state constitutional impediment to the I.O.L.T.A. program as proposed in the petition and as elaborated in this opinion.
7. The program will become effective thirty days after the Foundation has received a favorable ruling from the Internal Revenue Service and has mailed implementation materials to the active members of the Utah State Bar.
8. See generally Rivlin, "I.O.L.T.A. Gains Momentum Nationwide" 69 A.B.A.J. 1036 (1983); Boone, "A Source of Revenue for the Improvement of Legal Services," 10 St. Mary's L.J., 539, 11 id. 113 (1979); Gonser, Almond, & Ziegler, "Financing Public Services Activities with Interest-Bearing Attorney Trust Accounts," 15 Idaho L.Rev. 219 (1979).
An order will issue accordingly.
STEWART, Justice: (Separate opinion)
I would approve the petition if clients were informed beforehand that interest earned from their trust funds is to be paid to the Utah Bar Foundation, and they are given a choice not to participate. In my view, the objectives of the Foundation are altogether laudable; but I do not believe, as appealing as it is, that that view is an adequate justification for dealing with other people's money in the manner proposed. Nor do I think it is a sufficient justification that if a client's consent is required the program would be jeopardized because of administrative complications caused by the Internal Revenue Service. See In re Interest on Lawyer's Trust Accounts, 279 Ark. 84, 648 S.W.2d 480 (1983). Without giving a client the right to choose, I am unable to agree to the petition as presently formulated.
NOTES
[1] We note that the Minnesota and California programs are mandatory for all lawyers in those states, Minnesota, supra; Cal.Bus. & Prof.Code § 6210-6228 (West 1983), but that other state programs are voluntary.
[2] The Arkansas Supreme Court is one of the few courts that has denied a petition for an I.O.L.T.A. program, and the only court that has published an opinion giving the reasons for its denial. In re Interest on Lawyers' Trust Accounts, 279 Ark. 84, 648 S.W.2d 480 (1983). While the court affirmed its support for the basic concept of I.O.L.T.A., it stated that participation must be conditioned upon notice to and approval by the clients whose funds are so used, even though this notice would make the program impractical under the present tax law. Otherwise, the court reasoned, the program could be the occasion of diminished public confidence in the legal profession. The court urged the Bar to work for an amendment to the tax law. We prefer to rely on the informational efforts of the Bar and the understanding of the public to counteract such an effect. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1529851/ | 901 F. Supp. 1091 (1995)
Elizabeth HOWZE, Plaintiff,
v.
VIRGINIA POLYTECHNIC and State University, et al., Defendants.
Civ. A. No. 94-1059-R.
United States District Court, W.D. Virginia, Roanoke Division.
July 12, 1995.
*1092 *1093 Sa'ad El-Amin, El-Amin & Crawford, P.C., Richmond, VA, for plaintiff.
Kay Kurtz Heidbreder, Virginia Polytechnic Institute & State University, Blacksburg, VA, Jerry D. Cain, Commonwealth of Virginia, Special Assistant Attorney General, Blacksburg, VA, for defendants.
MEMORANDUM OPINION
KISER, Chief Judge.
This case is before the Court on the defendants' motion to dismiss. The parties have fully briefed the issues involved and the Court has heard oral argument. Thus, the motion is ripe for disposition. Based upon the reasons contained herein, I am of the opinion that the defendants' motion should be granted in part and denied in part.
FACTS:
This suit is brought under 42 U.S.C.A. § 1983 (West 1993) and Title VII. Plaintiff claims that the defendants engaged in numerous instances of sex discrimination and retaliation for statutorily protected activities. Plaintiff also alleges that the defendants violated her right to free speech. Plaintiff has another case pending in this district before Judge Turk. See Howze v. VPI, Civ. Action No. 91-234 (W.D.Va. April 5, 1991) [the 1991 lawsuit]. The allegations in that complaint are similar to those here, but involve actions occurring prior to the actions involved here. The defendants, with the exception of Virginia Polytechnic Institute ("VPI"), are also different.
The plaintiff is an associate professor of education at VPI. The defendants include VPI itself; Fred Carlisle, formerly the provost; Paul Torgersen, professor of engineering at times relevant to the suit; Judith Jones, associate director of the Virginia Cooperative Extension; and Janine Hiller, professor of business law. The individuals are sued only in their individual capacities.
The allegations of discrimination revolve around two primary events. The first is the tenure process initiated in the plaintiff's division Health and Physical Education ("HPE") and the second involves a Special Panel Report ("SPR") issued in August, 1993. To evaluate candidates for tenure, the HPE division established, in November 1991, a Promotion and Tenure Committee ("P & T Committee"). On December 13, 1991, the HPE P & T Committee recommended against plaintiff's promotion. One member gave as a reason plaintiff's 1991 lawsuit against VPI in which she named a graduate *1094 student as a defendant. The primary reason given was plaintiff's lack of "collegiality."
The next step of the tenure process required that the College of Education ("COE") P & T Committee consider plaintiff's candidacy. On January 22, 1992, the COE P & T Committee did not recommend plaintiff for promotion. The reason cited was plaintiff's lack of collegiality. The Dean of the COE concurred with the P & T Committee recommendation.
Plaintiff appealed that decision to defendant Carlisle, who granted plaintiff's appeal. Thus, plaintiff's candidacy was taken up by the University's P & T Committee. This committee did recommend plaintiff for promotion on April 10, 1992. VPI's Board of Visitors approved that promotion on November 16, 1992, after the Board failed to act on the promotion at an earlier meeting. Notwithstanding the lack of Board action, plaintiff's salary and rank were changed to associate professor effective August 16, 1992. Plaintiff alleges that these actions constituted sex discrimination and retaliation for her prior lawsuit over other allegedly discriminatory acts.
The second primary event was the SPR. On August 7, 1992, the Washington Post published a column by Judy Mann, in which plaintiff's history of alleged sexual discrimination at VPI was detailed. On September 15, 1992, a similar, but more detailed, article appeared in a publication called the Collegiate Times. Following these events, defendant Carlisle appointed a three-person special panel to investigate the plaintiff's claims of discrimination. The other three defendants in this lawsuit were the members of that special panel. The panel completed its report in August 1993 and plaintiff received a copy on September 16, 1993. The report criticized the plaintiff by name for using unprofessional methods to pursue her concerns about sex discrimination. The report also found that others acted unprofessionally and inappropriately, but declined to name those individuals. Plaintiff alleges this action was in retaliation for her prior activities.
Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") for the promotion events on January 23, 1993. Prior to this time, plaintiff filed an EEOC Intake Questionnaire and an affidavit on June 16, 1992. With respect to the events surrounding the SPR, plaintiff sent a letter to the EEOC on March 13, 1994. There is no evidence on when this letter was received. The formal charge with respect to the SPR events was filed on April 22, 1994.
DISCUSSION:
Timeliness Issues
To maintain a sex discrimination lawsuit, a plaintiff must file a charge of discrimination with the EEOC within 180 days of the allegedly discriminatory act. 42 U.S.C.A. § 2000e-5(e)(1) (West 1994). This requirement is akin to a statute of limitations and is therefore subject to equitable modification, such as tolling or estoppel, in appropriate circumstances. English v. Pabst Brewing Co., 828 F.2d 1047, 1049 (4th Cir. 1987), cert. denied, 486 U.S. 1044, 108 S. Ct. 2037, 100 L. Ed. 2d 621 (1988). The 180-day clock begins to run on the day that the discrimination occurred, without regard to the date on which the plaintiff discovered the discriminatory act. Hamilton v. 1st Source Bank, 928 F.2d 86, 88 (4th Cir.1990) (en banc).
The first step in addressing the timeliness issue is to determine the date on which the 180-day period began to run. With respect to the promotion and tenure process, there are two potential dates. The first is December 13, 1991. This was the initial unfavorable determination by the HPE P & T Committee. The second is March 3, 1992, the date on which the COE's dean concurred in the findings of the COE P & T Committee. If it is the former date, then the plaintiff did not timely file a charge, even if the June 16, 1992 contact with the EEOC satisfies the charge requirement. See Delaware State College v. Ricks, 449 U.S. 250, 261, 101 S. Ct. 498, 505, 66 L. Ed. 2d 431 (1980) (subsequent appeals or requests for reconsideration do not restart 180-day clock). The defendant does not, however, base its argument on this *1095 question.[1] Instead, it argues, without citation to case law, that the June 16, 1992 EEOC contact is insufficient.
I disagree. On June 16, 1992, plaintiff alleges that she filed an affidavit and Intake Questionnaire with the EEOC. This is sufficient to satisfy the charge requirement found in 42 U.S.C.A. § 2000e-5(b), (e)(1). This position is consistent with EEOC regulations concerning the contents of a charge. See 29 C.F.R. § 1601.12(b) (1994) (any "written statement sufficiently precise to identify the parties, and to describe generally the action or practices complained of" is a sufficient charge); id. § 1601.9 (charge must be signed and verified). This position also finds support in judicial interpretation. See Waiters v. Robert Bosch Corp., 683 F.2d 89 (4th Cir.1982) (affidavit filed with EEOC satisfies "charge" requirement); see also Philbin v. General Elec. Capital Auto Lease, Inc., 929 F.2d 321, 323 (7th Cir.1991) (holding that Intake Questionnaire that is later verified constitutes a "charge" in some circumstances). Any question about the affidavit's sufficiency vis-a-vis statutory or regulatory requirements or the dictates of Waiters is a question of fact, appropriately resolved at trial or on summary judgment.
The SPR presents a somewhat more difficult issue. First, it is not clear on what date the 180-day clock should start. The report was issued in August. The plaintiff, however, alleges she did not receive a copy until September 16, 1993. No reason is given in the complaint for the delay. Plaintiff relies upon the March 13, 1994 letter as the "charge" that stops the 180-day clock, thus implicitly maintaining that September 16 is the date on which the clock started. However, this position ignores the well-established principle that the date of the alleged unlawful act is the date that marks the time from which the 180 days are counted. Hamilton, 928 F.2d at 88; see also English, 828 F.2d at 1048; Morse v. Daily Press, Inc., 826 F.2d 1351 (4th Cir.), cert. denied, 484 U.S. 965, 108 S. Ct. 455, 98 L. Ed. 2d 395 (1987); Felty v. Graves-Humphreys Co., 785 F.2d 516 (4th Cir.1986); Price v. Litton Business Sys., Inc., 694 F.2d 963 (4th Cir.1982). Clearly, the SPR itself is what plaintiff claims is the unlawful act, and thus the date of its issuance is the date of the unlawful act. Even if the SPR was issued on the last day of August, the March 13 letter would not be timely.
This delay, however, could be excused under the equitable tolling or estoppel doctrines. Equitable tolling applies when the defendant has wrongfully deceived or misled the plaintiff to conceal the existence of a cause of action. English, 828 F.2d at 1049. Equitable estoppel applies when the defendant attempted to mislead the plaintiff and the plaintiff reasonably relied upon the misrepresentation by not filing a timely charge. Id. Under these doctrines, all of which require the consideration of facts not presently in the record, the 180-day clock could be delayed until September 16, 1993.
If the plaintiff succeeded in tolling or estopping defendant until September 16, the question of the March 13 letter's sufficiency arises. Only the first page of the letter appears in the record to date, thus any attempt at determining the letter's sufficiency against statutory or regulatory requirements is premature. It appears to be lacking the verification requirement of 29 C.F.R. § 1601.9, but without the entire letter, one cannot be sure.[2] Also, there is a question, *1096 discussed at length in oral argument, about the date on which the EEOC received this letter. While the plaintiff has several significant hurdles to overcome on the timeliness issue, I cannot say that there is no set of facts under which the plaintiff could not recover. Thus, denying the motion to dismiss is appropriate. See Mylan Lab., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993), cert. denied, ___ U.S. ___, 114 S. Ct. 1307, 127 L. Ed. 2d 658 (1994).
Title VII Individual Defendants
Defendants argued that the individual defendants could not be held liable for two reasons: (1) they were not named in the charge; and (2) Birkbeck v. Marvel Lighting Corp., 30 F.3d 507 (4th Cir.) (individual supervisor not an employer in age discrimination case), cert. denied, ___ U.S. ___, 115 S. Ct. 666, 130 L. Ed. 2d 600 (1994), precludes such liability. The plaintiff concedes on brief that it does not press Title VII claims against the individuals. The defendants concede on brief that VPI may be sued under Title VII. Accordingly, the individuals will be dismissed as defendants from Title VII claims, which will proceed only against VPI.[3]
Title VII Retaliation
The statutory basis for plaintiff's claim is 42 U.S.C.A. § 2000e-3(a). That provision makes it unlawful for an employer "to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice" by Title VII or "because he has made a charge" of discrimination. To state a claim for Title VII retaliation, a plaintiff must prove that: (1) she engaged in protected activity; (2) that her employer took adverse employment action against her; and (3) that a causal connection existed between the protected activity and the adverse action. Ross v. Communications Satellite Corp., 759 F.2d 355, 365 (4th Cir.1985); Boarman v. Sullivan, 769 F. Supp. 904, 911 (D.Md.1991). The requirement of "adverse employment action," then, helps determine if the employer has engaged in the discrimination the statute requires. Defendant argues that plaintiff fails to satisfy the second element. Defendant notes that plaintiff ultimately received her promotion and that her pay was adjusted to reflect that promotion at the same time as every other person who received a promotion in the same time period. Plaintiff responds that her allegations of emotional distress, etc., in light of the Civil Rights Act of 1991, constitute adverse employment action.
Plaintiff's claim of retaliation on the basis of the tenure process must fail for the lack of any "adverse employment action." In the promotion and tenure process, the plaintiff was initially faulted for filing the 1991 lawsuit. This statement reveals that the denial of promotion or tenure may have been, in part, motivated by a desire to punish plaintiff for protected actions. However, the final layer of review, the University P & T Committee and defendant Carlisle, reversed the prior determinations. Plaintiff was ultimately awarded her promotion and tenure and given pay and rank increases at the same time as other promotees. In these circumstances, plaintiff has not suffered an adverse employment action. Cf. Dennis v. County of Fairfax, 55 F.3d 151, 153 (4th Cir.1995) (holding that employer corrective action consisting of removing a written reprimand from file and elevating disputed performance scores, both after filing of employee grievances, was not a confession of discrimination); Boarman, 769 F.Supp. at 910-11 (holding that plaintiff who was promoted, but not to the position she desired, suffered no adverse employment action). To hold otherwise opens the door to endless litigation of intermediate steps in an employment decision-making process that have no effect on the ultimate outcome.[4] It would also discourage employers from responding to allegations *1097 of discrimination. See Dennis, 55 F.3d at 154-55.
Thus, in the case at bar, where the tenure decision was following the chain of appeal, each decision along the way is not actionable. Only the final decision is the ultimate act. In essence, there has been no legal effect from the initial actions. Indeed, there is no allegation in the complaint that the plaintiff is considered a "second-class" associate professor, or has only "half-tenure." Rather, it appears from the face of the complaint that the plaintiff is fully tenured and is equal to her peers as a result of the tenure process.[5]
The same result does not accrue, however, with respect to the SPR. Defendant argues that an "adverse employment action" requires an "ultimate employment decision" such as hiring, granting leave, discharging, promoting, and the like. See Page v. Bolger, 645 F.2d 227, 233 (4th Cir.), cert. denied, 454 U.S. 892, 102 S. Ct. 388, 70 L. Ed. 2d 206 (1981); Ward v. Johns Hopkins Univ., 861 F. Supp. 367, 377 (D.Md.1994) (relying on Page); Lucas v. Cheney, 821 F. Supp. 374, 375 (D.Md.1992) (same), aff'd, 991 F.2d 790 (4th Cir.1993) (table). Page, however, is inapposite to the present case. First, it was not a retaliation case, but rather addressed an attempt to rewrite the prima facie case requirements in a failure to promote case. Page, 645 F.2d at 232. Second, the court was defining the term "personnel actions" in 42 U.S.C.A. § 2000e-16(a), dealing with discrimination in federal employment. The court also addressed other "comparable provisions of Title VII, most notably ... 42 U.S.C. § 2000e-2(a)(1)." Id. at 233. However, both of the referenced provisions, and thus the likely meaning of "comparable provisions," focus upon the "substantive" anti-discrimination provisions of Title VII. There is no indication that the Fourth Circuit intended this definition to apply to the retaliation provision in section 2000e-3(a).
To the extent Page is applicable, it stands only for the proposition that where the effects of the adverse action have not yet been felt by the plaintiff, the action is mediate and therefore does not constitute employment action. See Jensvold v. Shalala, 829 F. Supp. 131, 136-37 (D.Md.1993) (distinguishing Page on similar grounds). Page involved a black male who alleged that the racial composition of a review panel formed to recommend individuals for promotion constituted discrimination in personnel actions under section 2000e-16(a). Steps in the process to a final decision, the court held, are merely mediate decisions that do not provide a basis for liability. Page, 645 F.2d at 233; see Dennis, 55 F.3d at 156 ("Where an employer has taken prompt and effective corrective measures to redress alleged incidents of racial harassment, the employer is not liable because its final act was not of a discriminatory nature.").
Not so with plaintiff's retaliation claim. Certainly, if the retaliation claim was subject to a grievance process, the above rule would apply, i.e., no harm is felt until the final decision. Thus, if the SPR had been subject to review and it was retracted and in no way became part of plaintiff's employment record, then there would be no actionable retaliation claim because there was no adverse employment action. On the face of the complaint, however, such a process does not exist. Rather, it appears that the SPR was the final word from VPI regarding plaintiff's actions. Thus, it could be an adverse employment action. See Jensvold, 829 F.Supp. at 139 (holding that retaliation prima facie case satisfied where supervisor made threats to discourage plaintiff from filing formal complaint, attempted to thwart attainment of different position, refused to perform needed lab work, and refused to name plaintiff on papers she allegedly co-authored).
Authority outside the circuit provides an additional ground on which to distinguish the Page case. Adverse employment *1098 actions certainly include ultimate employment decisions. But the term also includes actions that would adversely affect one's professional reputation or ability to gain future employment, whether or not there was an ultimate employment decision. See Nelson v. Upsala College, 51 F.3d 383, 387 (3d Cir. 1995) (listing cases); Passer v. American Chem. Soc'y, 935 F.2d 322, 331 (D.C.Cir. 1991) (cancellation of symposium in honor of plaintiff an adverse action where plaintiff alleged that cancellation humiliated him amongst peers and made procurement of future employment more difficult). Applying that standard in the present case, the SPR could constitute adverse employment action. It is conceivable that the SPR's contents could hinder the plaintiff in obtaining research grants, endowed professorships, publications, and other similar accoutrements of a tenured professor. Plaintiff pleads, albeit not in Count I with the retaliation claim, that her professional reputation has suffered as a result of the SPR. This allegation is sufficient for the plaintiff to survive defendants' motion to dismiss.
First Amendment Claim
Plaintiff maintains in Count II that the SPR was in retaliation for her First Amendment activities. She maintains that the SPR contents were intended to punish her for her complaints about sex discrimination, harassment, academic misconduct, "tenure fraud," and cover-up of fraud. The defendants respond on three different fronts. The argument I find well-taken is defendant's claim to qualified immunity.[6]
Resolving the qualified immunity inquiry at the earliest possible stage of the litigation ensures that government actors get the full benefit of the doctrine. Schultea v. Wood, 47 F.3d 1427, 1432 (5th Cir.1995); DiMeglio v. Haines, 45 F.3d 790, 795 (4th Cir.1995). Indeed, in recognition of the importance of qualified immunity, the Fourth Circuit has adopted a heightened pleading standard in actions against government officials. Dunbar Corp. v. Lindsey, 905 F.2d 754, 764 (4th Cir.1990). But see Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, ___, 113 S. Ct. 1160, 1161, 122 L. Ed. 2d 517 (1993) (heightened pleading standard may not be applied in cases alleging municipal liability). The purpose of the requirement is to provide sufficient factual detail early in the litigation so that discovery may be avoided. Dunbar, 905 F.2d at 764; see Schultea, 47 F.3d at 1433-34 (relying upon reply authorized by Fed.R.Civ.P. 7). Whether some heightened pleading standard survives in the Fourth Circuit after Leatherman and in what form need not detain me here. See Jordan by Jordan v. Jackson, 15 F.3d 333, 339 n. 5 (4th Cir. 1994); Collin v. Board of Visitors of Univ. of Va., 873 F. Supp. 1008, 1014-15 (W.D.Va. 1995). The plaintiff's complaint in this case contains sufficient detail to allow the qualified immunity analysis to proceed.
Government officials exercising discretionary functions are entitled to qualified immunity if the officer's conduct "does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 2738, 73 L. Ed. 2d 396 (1982). In a qualified immunity inquiry, the court must engage in a three-step process. First, the court must identify the specific right allegedly violated. Second, the court must determine if the right was clearly established at the time the defendants acted. Third, if the right was clearly established, then the court must determine whether a reasonable person in the official's position would have known that his actions violated that right. Pritchett v. Alford, 973 F.2d 307, 312 (4th Cir.1992). Government officials are not liable for bad guesses in gray areas. Maciariello v. Sumner, 973 F.2d 295, 298 (4th Cir.1992), cert. denied, ___ U.S. ___, 113 S. Ct. 1048, 122 L. Ed. 2d 356 (1993).
The right violated in this case is the right to be free of retaliatory action for the exercise of First Amendment rights. There *1099 are two components of this right: the retaliation component and the First Amendment component. Both must be clearly established for the right as a whole to be clearly established. See Tindal v. Montgomery County Comm'n, 32 F.3d 1535, 1539 (11th Cir.1994). I will assume for the sake of argument that protection from retaliatory action, less than a firing or demotion, for First Amendment conduct is a clearly established right. See Connick v. Myers, 461 U.S. 138, 103 S. Ct. 1684, 75 L. Ed. 2d 708 (1983); Holland v. Rimmer, 25 F.3d 1251, 1254 (4th Cir.1994); Huang v. Board of Governors of Univ. of N.C., 902 F.2d 1134, 1140 (4th Cir. 1990).[7] Accordingly, the defendants' entitlement to immunity rests upon the nature of the plaintiff's speech.
Initially, I note a fairly recent Supreme Court decision with a potential impact on this case. In Waters v. Churchill, ___ U.S. ___, 114 S. Ct. 1878, 128 L. Ed. 2d 686 (1994), the Supreme Court addressed whether the test in Connick, for determining what employee speech the First Amendment protects, should be applied to what the government employer thought the employee said or what the trier of fact ultimately determines to have been said. Although Waters has potentially far-reaching effects in employee speech cases, see Jeffries v. Harleston, 52 F.3d 9 (2d Cir.1995), it is not applicable here. Because this case is at the motion to dismiss stage, all facts are taken as alleged. There can be, therefore, no dispute as to what was said and thus no need to apply Waters in this case. See Feldman v. Philadelphia Hous. Auth., 43 F.3d 823, 831 (3d Cir.1994); Spiering v. City of Madison, 863 F. Supp. 1065, 1075 (D.S.D.1994).
In determining whether speech is protected by the First Amendment, the court examines whether the speech qualifies as a matter of public concern and the effect of the speech on the efficiency, discipline and proper administration of the work place. Holland, 25 F.3d at 1254. A case-by-case approach is required. Id. at 1255. The "content, form and context of a given statement" is relevant in deciding whether the statement is one of public concern. Connick, 461 U.S. at 147-48, 103 S.Ct. at 1690-91. An employee's attempt to expose actual or potential wrongdoing or a breach of the public's trust in government affairs is speech on a matter of public concern. Cf. Jurgensen v. Fairfax County, 745 F.2d 868, 879 (4th Cir.1984). However, an employee's complaint about her own employment is not a matter of public concern. Huang, 902 F.2d at 1140.
Applying these principles to this case, it appears that the nature of plaintiff's speech was sufficiently clouded so as to justify the conclusion that its protected status was not clearly established at the time of the incident. Plaintiff's speech had components of both matters of public concern and matters of private grievances. For example, plaintiff's allegations of fraud and cover-up of fraud at one of Virginia's largest public universities is certainly a matter of public concern. See Feldman, 43 F.3d 823, 829 (3d Cir.1994) (highlighting improprieties and fraud in a government agency is a matter of public concern).
On the other hand, the allegations of sex discrimination seem to be directed more towards the plaintiff's individual grievances. Generally, discrimination is a matter of public concern. Seemuller v. Fairfax County Sch. Bd., 878 F.2d 1578, 1582-83 (4th Cir. 1989) (holding that public school teacher's letter in response to student's allegations of sexual discrimination in physical education classes was a matter of public concern); Arvinger v. Mayor & City Council of Baltimore, 862 F.2d 75 (4th Cir.1988) (holding *1100 that employee's testimony at hearing in coemployee's sexual discrimination case was not public concern because it did not address a public debate over employment discrimination); Berger v. Battaglia, 779 F.2d 992, 999 (4th Cir.1985) (race issues are matters of public concern), cert. denied, 476 U.S. 1159, 106 S. Ct. 2278, 90 L. Ed. 2d 720 (1986); see Marshall v. Allen, 984 F.2d 787, 795 (7th Cir.1993) (sex discrimination in a public agency is a topic of public concern). In 1992 and 1993, then, it could be safely concluded that when an employee speaks out on behalf of other employees who have suffered discrimination, the speech is a matter of public concern. See Tindal, 32 F.3d at 1539-40 (denying qualified immunity defense for events in 1989); Marshall, 984 F.2d at 795 (denying qualified immunity defense).
But this case involves discrimination plaintiff is alleged to have personally suffered. The amended complaint alleges that both the Washington Post and the Collegiate Times articles published accounts of her experiences in gaining tenure. The plaintiff took steps to make the charges of discrimination public, an important factor, Holland, 25 F.3d at 1255-56; Morgan v. Ford, 6 F.3d 750, 755 (11th Cir.1993), cert. denied, ___ U.S. ___, 114 S. Ct. 2708, 129 L. Ed. 2d 836 (1994), but the charges she made public were apparently focused on the plaintiff's own experiences. It was not clearly established in 1992 or 1993 whether these actions were protected. Indeed, later cases suggest that when an employee speaks out about discrimination suffered personally, the speech is not a matter of public concern. Tindal, 32 F.3d at 1539 (no First Amendment protection for speech that, for personal benefit, exposes personally suffered discrimination). The component of personal gain that accompanies the speech makes the difference. Morgan, 6 F.3d at 755. When these considerations join with the fact that a case-by-case inquiry is required, in which "subtle judgment" is necessary, Berger, 779 F.2d at 999, I believe the officials at VPI acted in a gray area of constitutional law.
This conclusion is buttressed when the balancing required under Connick and Holland is considered. As the Fourth Circuit has recently noted: "[O]nly infrequently will it be `clearly established' that a public employee's speech on a matter of public concern is constitutionally protected, because the relevant inquiry requires a `particularized balancing' that is subtle, difficult to apply, and not yet well-defined." DiMeglio v. Haines, 45 F.3d 790, 806 (4th Cir.1995). Even if the speech at issue here was a matter of public concern, it was not, and is not now, clearly established that the interest of the plaintiff outweighed the interest of VPI in running an effective academic atmosphere. Given plaintiff's failure to come forward with a case that is sufficiently similar to this one, see id., and thereby show that the right she claims protection for was "clearly established" in 1992 and 1993, the individual defendants are entitled to qualified immunity.[8]
CONCLUSION:
The following claims survive the defendants' motion: (1) Title VII claims against VPI under Counts I and IV; (2) section 1983 claim for injunctive relief against VPI under Count II; And (3) section 1983 claims against VPI and the individual defendants under Count III. For the reasons stated above, the plaintiff's other claims fail.
An appropriate order will be entered.
ORDER
For the reasons stated in the memorandum opinion issued contemporaneously herewith, it is hereby ADJUDGED and ORDERED that the defendants' motion to dismiss be GRANTED in part and DENIED in part. Specifically:
1. the individual defendants are DISMISSED from any Title VII liability;
*1101 2. defendant Virginia Polytechnic is DISMISSED from any liability for money damages under 42 U.S.C.A. § 1983;
3. Count II of the complaint is DISMISSED as to the individual defendants;
4. Count I of the complaint is DISMISSED insofar as it is based upon acts occurring in the tenure and promotion process.
NOTES
[1] Indeed, if the tenure process is viewed as a whole, as it will be for purposes of plaintiff's retaliation claim, then the clock must start to run at the time of the final decision. See infra note 5. This view is consistent with the facts in Ricks. In Ricks, several faculty committees gave the plaintiff negative recommendations for tenure. 449 U.S. at 252, 101 S.Ct. at 501. The Board of Trustees then officially acted upon those recommendations by voting to deny plaintiff tenure. Plaintiff was informed of this action on June 26, 1974. The Court held that this was the date from which the statute of limitations would run even though plaintiff filed a grievance with the Board almost immediately. Id. at 261-62, 101 S.Ct. at 505-07.
The important distinction between Ricks and this case is the nature of the process. In Ricks, the employer made a final decision and the employee chose to dispute that final decision. In the case at bar, the employer made an interim decision and the employee simply continued along in the process.
[2] Philbin reveals the possibility, however, that even this defect would not warrant barring plaintiff's claim because, in some cases, subsequent verification may cure the defect.
[3] The section 1983 claim does not keep the individuals in this action for Title VII violations. When a federal statute provides a cause of action, section 1983 does not serve to duplicate it. Zombro v. Baltimore City Police Dep't, 868 F.2d 1364, 1370 (4th Cir.), cert. denied, 493 U.S. 850, 110 S. Ct. 147, 107 L. Ed. 2d 106 (1989) (Age Discrimination in Employment Act cannot be used as basis for § 1983 claim).
[4] Furthermore, I reject the plaintiff's attempt to use the damages provisions of the Civil Rights Act of 1991 to create a new basis for liability.
[5] To the extent the tenure process is viewed as a whole, it must be the end of that process that marks the date from which the 180-day filing period runs. Title VII requires that the EEOC complaint be filed within 180 days after the unlawful practice "occurred." 42 U.S.C.A. 2000e-5(e)(1). Cf. Hamilton, 928 F.2d at 87. If "adverse employment action" requires action with a final, binding, legal effect, then action "occurs" on the date the action with the legal effect occurs. Here, it would be the date on which the review process finally concluded.
[6] I note in passing that Judge Turk previously denied a motion to dismiss on similar grounds in the 1991 lawsuit. Plaintiff makes great weight of this fact. The problem is the lack of a written opinion in the 1991 lawsuit. Judge Turk entered only a one-page order denying defendants' motion. Thus, the basis for his decision is not clear.
[7] This is another weakness in plaintiff's position. While not the primary ground for my opinion, an independent basis for the qualified immunity defense is the lack of a clearly established constitutional protection of the harm plaintiff allegedly suffered. Where the plaintiff has not suffered demotion, dismissal, or a denial of promotion or transfer, the plaintiff has not been deprived of a valuable constitutional right. DiMeglio v. Haines, 45 F.3d 790, 806 (4th Cir.1995) (holding that in 1990, reassignment or reprimand in retaliation for protected speech was not clearly established). Even today, actions less than demotion are probably not sufficiently adverse to implicate the First Amendment. Id. at 807; see Dorsett v. Board of Trustees, 940 F.2d 121, 123 (5th Cir. 1991) (where professor suffered adverse decisions such as adverse teaching assignments, pay increases, and other administrative matters, there was no constitutional deprivation).
[8] I do not decide definitively whether the speech is indeed a question of public concern. As I read the plaintiff's complaint, there is a request for injunctive relief against VPI for the First Amendment violations. Thus, the ultimate determination will have to await further factual development. For qualified immunity purposes, however, the record is sufficient to hold that, even if the speech is ultimately decided to be protected, that right was not clearly established in 1992 and 1993. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1471480/ | 851 S.W.2d 238 (1993)
Pedro Cruz MUNIZ, Appellant,
v.
The STATE of Texas, Appellee.
No. 69602.
Court of Criminal Appeals of Texas, En Banc.
January 6, 1993.
Rehearing Denied February 10, 1993.
*242 Ian Inglis, Austin, for appellant.
Ken Anderson, Dist. Atty., Georgetown, Robert Huttash, State's Atty., Austin, for the State.
Before the court en banc.
OPINION
CAMPBELL, Judge.
After a trial held in February 1986, a Williamson County jury found appellant, Pedro Cruz Muniz, guilty of the December 20, 1976,[1] capital slaying of a female, J__ B__. The aggravating element of the murder was appellant's aggravated rape of J__ B__.[2] At the trial's punishment phase, the *243 jury answered affirmatively the punishment issues set forth in Article 37.071(b) of the Texas Code of Criminal Procedure,[3] and appellant was sentenced to death. Direct appeal to this Court was then automatic under Article 37.071(h).[4] We will affirm.
In eighteen points of error, appellant challenges: the application of the capital punishment statute to his situation; the sufficiency of the evidence to support the jury's verdict concerning both his guilt and the affirmative answer to the second punishment issue; the validity of his arrest; the admission in evidence of his confession; the trial court's refusal to submit to the jury a charge regarding the voluntariness of appellant's confession and a definition of the term "deliberately" contained in the first punishment issue; the trial court's admission, at the punishment phase, of evidence of appellant's two prior misdemeanor convictions; the trial court's refusal to instruct the jury at the punishment phase to consider all mitigating evidence; the constitutionality of Texas' capital punishment statute both facially and as it was applied to appellant's case; the second[5] prosecution of this case as a violation of the double jeopardy provisions of the Texas and United States constitutions; the exclusion of Mexican-Americans from the grand jury that indicted appellant; and the adequacy, under the Texas and United States constitutions, of his counsel's assistance throughout the course of the trial. After addressing appellant's points of error which challenge the application of the capital punishment statute to his situation and the sufficiency of the evidence pertaining to both his conviction and the affirmative answer to the second punishment issue, we will address the remainder of appellant's points of error in the order in which they occurred during the course of the trial.
In point of error one, appellant argues that the evidence at trial was insufficient to sustain his conviction because the evidence proved that his "act of causing serious bodily injury or attempting to cause death was one and the same with his act of causing the victim's death." According to appellant's argument, the State relied upon a single act to prove both J__ B__'s murder and the aggravating element of the rape. Appellant contends that this conduct by the State "constitutes an improper use of the felony murder statute." Therefore, before addressing appellant's sufficiency point, we must interpret the applicable statute.
At the time of the offense, the pertinent portions of Texas Penal Code § 19.03(a)(2) read "[a] person commits [a capital] offense if he commits murder [by intentionally or knowingly causing the death of an individual] in the course of committing or attempting to commit kidnapping, burglary, robbery, aggravated rape, or arson;..."[6] See 1973 Tex.Gen.Laws 1123. In order to commit aggravated rape, the pertinent *244 portions of Texas Penal Code § 21.03[7] required that a person commit rape and cause "serious bodily injury ... in the course of the same criminal episode." See 1973 Tex.Gen.Laws 883. The penal code defines "serious bodily injury" as bodily injury that causes death, creates a substantial risk of death, or causes serious permanent disfigurement or protracted loss or impairment of the function of any bodily member or organ. Texas Penal Code § 1.07(34).
Reading penal code §§ 1.07(34), 19.03(a)(2) and 21.03[8] in conjunction, in order to obtain a capital murder conviction, the State must prove that the accused:
(1) raped the victim, and
(2) caused serious bodily injury ... in the course of the same criminal episode, and
(3) killed the victim in the course of committing or attempting to commit the rape.
Appellant interprets the statutes involved so as to require the State to prove that a murder was committed temporally separate from the aggravated rape. Appellant contends that the statute was improperly applied to him because the State could not prove an aggravated rape of J__ B__ separate from the murder of J__ B__.
When we interpret any statute, we try "to effectuate the `collective' intent or purpose of the legislators who enacted the legislation." Boykin v. State, 818 S.W.2d 782, 785 (Tex.Cr.App.1991). Normally, we will accomplish this goal simply by focusing our attention on and discerning the objective meaning of the statute's literal text at the time of its enactment. Id. In the majority of situations, this exercise will yield an end result of effectuating the intent of the Legislature by giving effect to the statute's plain language. Id.
We will not, however, give effect to a statute's plain meaning when such an interpretation produces absurd results. Id.; Faulk v. State, 608 S.W.2d 625, 630 (Tex.Cr.App.1980). The rationale underlying this exception to the "plain meaning" rule is our refusal to attribute to the Legislature a desire to reach absurd results. Boykin, 818 S.W.2d at 785. If a statute may reasonably be interpreted in two different ways, a court may consider the consequences of differing interpretations in deciding which interpretation to adopt. 82 C.J.S. Statutes § 326 (1953). Moreover, if one reasonable interpretation of a statute yields absurd results and another interpretation yields no such absurdities, the latter interpretation should be preferred.
In this situation, we conclude that the statute is susceptible to two reasonable interpretations. We also conclude, however, that interpreting the statute in the manner advanced by appellant would lead to absurd results. Three hypothetical examples will precisely illustrate such absurd consequences. First, consider the example of a person charged with a combination of aggravated rape and murder. Appellant's interpretation would require that the conduct which makes the rape aggravated in nature be proven separate from the conduct that caused death.
While such an interpretation is facially attractive, a concrete example demonstrates the absurd consequences such an interpretation yields. Consider the situation where the police find a beaten and raped body and eventually discover the identity of the rapist-murderer. Even though the State could prove that a rape had been committed, that serious bodily injury had been inflicted, and that the victim had been murdered, under appellant's interpretation, the State would never be able to obtain a conviction for capital murder on such facts simply because the evidence could show only that a rape and murder had occurred within a short interval of time. We refuse to believe that the Legislature intended such an absurd result.
The combination of robbery and capital murder also presents problems under the interpretation appellant would have us *245 adopt. The pertinent language of the penal code reads:
§ 29.02 Robbery
(a) A person commits an offense if, in the course of committing theft as defined in Chapter 31 of this code and with the intent to obtain of maintain control of the property, he:
(1) intentionally, knowingly, or recklessly causes bodily injury to another; ...
Should the State's evidence show only that a convenience store clerk was killed by a single gun shot wound to the back, that property had been taken, and that the defendant had fired the fatal shot, the State still could not obtain a capital murder conviction under appellant's interpretation of the statute, absent some surviving witness or videotape of the incident. The State would be precluded from obtaining a capital murder conviction because it would be impossible to prove the elements of the robbery separate from the elements of the murder. The only bodily injury that the State could prove would be the same wound which killed the clerk. Under appellant's interpretation, this single act could not constitute an element of both the robbery and the murder, and the State would be precluded from prosecuting the defendant under the capital murder statute. We do not believe that the Legislature meant to restrict the State's ability to prosecute such a defendant for capital murder.
A similar absurd result is produced if appellant's position is taken to its logical end and arson and murder are combined. At the time of the offense, the pertinent language of the penal code's arson section read:
§ 28.02 Arson
(a) A person commits an offense if he starts a fire or causes an explosion:
(1) without the effective consent of the owner and with intent to destroy or damage the owner's building or habitation; or
(2) with intent to destroy or damage any building or habitation to collect insurance for the damage or destruction.
1973 Tex.Gen.Laws 924. Suppose the State's evidence showed that the defendant had intentionally killed the victim by burning the victim's home. Moreover, suppose that before igniting the fire, the defendant had bound the victim so securely that no possibility existed that the victim would escape the burning building. According to appellant's interpretation, the State could not pursue a capital murder prosecution because the State could never prove conduct to satisfy the requirements of murder, separate from the conduct which constituted the offense of arson. Under this interpretation of the statute, the State could pursue a capital murder prosecution only if it could prove the murder occurred totally independent from the arson. We cannot believe that the Legislature intended to insulate from a capital murder prosecution a defendant who had committed arson and murder in the above-described manner.
Interpreting the statute thusly yields absurd results in situations where a capital murder is combined with aggravated rape, robbery, and arson. Therefore, we reject appellant's interpretation of Tex.Penal Code § 19.03(a)(2). Instead, we adopt an interpretation of the statute that allows the State to seek a capital murder conviction in cases similar to those we have already elaborated upon. The fact that appellant's murder and aggravated rape of J__ B__ occurred contemporaneously does not preclude a prosecution under the capital murder statute.
In cases where the State can show that an aggravated rape and a murder were committed by the same person within a short time period, a capital murder prosecution will not be barred because of the mere fact that the two offenses occurred in such a manner that proof of two totally separate crimes is impossible. We conclude that in such situations, the elements of the aggravated rape and the murder may overlap. Since the elements may overlap, the conduct which serves as an element of the murder may also serve as an element of the aggravated rape.
This interpretation of the statute is in accord with the decisions of this court issued *246 in two analogous cases. In Barnard v. State, 730 S.W.2d 703 (Tex.Cr.App.1987), a convenience store clerk was shot in the face during a robbery. The State used the shooting as an element of both the robbery and the capital murder. Writing for this Court, Presiding Judge McCormick noted that the pecuniary motive behind a robbery-murder renders the crime an atrocity worthy of the death penalty. Id. at 709. Moreover, in light of this legislative purpose, it became irrelevant that the robbery and the murder might have had a shared element. Id., quoting Randle v. State, 697 S.W.2d 13, 16-17 (Tex.App.-Houston [14th Dist.] 1985, no pet.).
The actual or threatened violence of the aggravated rape, which forces a person to submit to the most intimate kind of physical contact possible, in combination with the murder of the person renders the act worthy of the law's ultimate sanction. In light of this rationale, it is immaterial which one of the nine blows to J__ B__'s head, or which combination thereof, served as the aggravating factor in her rape and which one or ones ultimately caused her death.
More support for this position is found in Wooldridge v. State, 653 S.W.2d 811 (Tex. Cr.App.1983), a case with facts similar to the instant case. In Wooldridge, we could discern no material difference between the rapist who killed his victim after completing the rape and the fleeing bank robber who shot his victim in an effort to dispose of the only witness to his crime. Id. at 816. Likewise, we discern no substantive difference between the fleeing robber described above and a rapist who commits murder in such a way that the best scientific evidence can state with confidence only that a rape and murder occurred close in time, but which cannot distinguish which conduct aggravated the rape and which conduct solely caused the victim's death. "[W]e believe that this is the very conduct the Legislature sought to proscribe as a capital offense in § 19.03(a)(2), ..." Id. Accordingly, we conclude that the facts in appellant's case constituted a proper subject for prosecution under the capital murder statute.
Having so concluded, we now address appellant's sufficiency challenge. In assessing the sufficiency of the evidence, we must consider all of the evidence in the record in the light most favorable to the jury's verdict, and decide whether any reasonable jury could have found from that evidence every element of the offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); Geesa v. State, 820 S.W.2d 154, 158-159 (Tex.Cr. App.1991). In conducting this review, we do not reevaluate the weight and credibility of the evidence, but act only to ensure that the jury reached a rational decision. Moreno v. State, 755 S.W.2d 866, 867 (Tex.Cr. App.1988).
Appellant was charged with, and found guilty of, violating Tex.Penal Code § 19.03(a)(2). The State presented eighteen witnesses during the trial's guilt/innocence phase in an attempt to prove appellant's guilt. Appellant presented four witnesses. Viewed in the light most favorable to the jury's verdict, the testimony adduced at trial established the following:
On Monday morning, December 20, 1976, Georgetown resident Andrea Garcia, a friend of J__ B__'s, returned J__ B__ to J__ B__'s dormitory on the campus of Southwestern University. According to Garcia, J__ B__ was planning to board a bus at five or six o'clock in the evening to travel to Austin to visit her relatives for Christmas. In the dormitory, Randy Burt, J__ B__'s roommate, talked with J__ B__ about her plans for the holidays. Around 6:15 p.m. that evening, Professor Jack Harris saw J__ B__ on the university campus. Later that evening, J__ B__ disappeared and was reported missing.
At approximately 11:00 p.m. that evening, Georgetown resident George Hurtado responded to a radio announcement which sought any information concerning J__ B__'s disappearance. Hurtado told the Georgetown police that while driving his car near the end of the San Gabriel River bridge at 7:00 p.m. that evening, he saw a young red-haired woman walking in front of appellant on the bridge's sidewalk. Appellant *247 was walking faster than the young lady, shortening the distance between himself and her.
Hurtado noticed appellant because appellant was wearing only a white undershirt and jeans in freezing weather. The street lamps on the bridge and the headlights of Hurtado's car provided sufficient light for him to identify appellant. Hurtado knew appellant's surname and had seen him around Georgetown on numerous occasions. Hurtado also noticed that the young lady was wearing some kind of heavy, wrap-around coat and carrying a handbag.
A second witness, Mike Maldonado, also saw appellant in the same general area later that same evening. At about 8:30 p.m., Maldonado had driven by his son's home where he saw appellant walking through the yard. Maldonado circled two blocks and returned to his son's house, where he again saw appellant. Maldonado recognized appellant's face when he saw it illuminated in his automobile's headlights because appellant had once approached him about buying a car. Like Hurtado, Maldonado also noticed that appellant was wearing only a white undershirt in extremely cold weather. Unlike Hurtado, however, Maldonado noticed that appellant's undershirt was dirty.
Another witness also saw appellant around 8:30 p.m. on December 20, 1976. Herbert Jackson, a friend of appellant's, encountered him at Monroe's Cafe, which is in the general vicinity where the crime occurred. Appellant approached Jackson, who was talking with two other friends. Jackson noticed that appellant had a cut on his forehead, a knot on his wrist, and blood on his undershirt and forehead. Additionally, the lower portions of appellant's pants legs were wet.
According to Jackson, appellant claimed that two men had accosted him and that he had escaped by running through the river. Jackson drove appellant to the home of appellant's sister and then drove back to Monroe's Cafe without appellant. A short time later, appellant returned to Monroe's Cafe and asked Jackson whether anyone had been by looking for appellant. After Jackson informed appellant that no one had made any such inquiry, appellant told Jackson that if anyone did inquire about appellant's whereabouts, Jackson should say that he had not seen appellant.
On December 21, 1976, Steve Williams found a Bible, poncho, shoes, greeting card, and purse near the northern end of the San Gabriel River bridge. Williams also found a deposit slip with J__ B__'s name on it and called the police. Williams noted that he believed that a struggle had occurred at the area where he found the objects because of the broken section of the nearby hedge and the presence of the objects.
Georgetown police officer Robert Hernandez investigated the area where Williams discovered the objects. After searching the area of the river unsuccessfully, Hernandez resumed his search on December 22, 1976, with another officer and bloodhounds. Eventually the officers searched an abandoned swimming pool and bathhouse located near the area of the bridge.
Within the bathhouse, Hernandez found the dirt on the floor disturbed, as if something had been dragged across the floor. Outside the bathhouse, Hernandez found more marks which indicated that something had been dragged over the ground. By following the trail of those marks, Hernandez and Officer Jessie Labit found blood, and finally found J__ B__'s naked body, buried underneath a pile of driftwood. Additionally, Hernandez found pieces of panty hose and a blue belt. At trial, that piece of belt was shown to match a piece of belt found by the police in the area where Maldonado had seen appellant.
Late on the evening of December 23, 1976, highway patrolman Victor Mahagan went to Jarrell to conduct surveillance of the home of appellant's brother. In response to a radio communication from the Georgetown police, Mahagan stopped a car that had been to the home of appellant's brother. In that car, Mahagan found appellant's brother Paul Muniz and appellant's sister-in-law. Mahagan followed Muniz home and entered Muniz's house with Muniz's permission. Muniz said that *248 if appellant were present, he would turn his brother over to Mahagan.
Inside Muniz's home, appellant's wife was sitting on a sofa. In response to a question about appellant, appellant's wife nodded toward the door to another room. Muniz entered that room, went immediately to a closet, and motioned for appellant to come out. Mahagan handcuffed appellant and took him to the patrol car. By radio transmission, Mahagan informed the Georgetown police that appellant was in custody. The police told Mahagan that an arrest warrant had been issued for appellant, so Mahagan informed appellant of his Miranda[9] rights.
Mahagan delivered appellant to Wallace Spillar, an officer with the Department of Public Safety (DPS). Spillar took appellant before Magistrate Bill Hill, who arraigned appellant and informed him of his rights. Spillar watched appellant sign a document stating that Magistrate Hill had informed appellant of his rights. After Spillar himself read appellant his Miranda rights, appellant signed a document granting his consent for the police to conduct a search. Appellant accompanied the police back to Jarrell where he retrieved an undershirt and pair of jeans.
After returning from Jarrell, the police placed appellant in the Williamson County Jail. At some point during the early morning hours of December 23, 1976, police officer William Shirley fingerprinted appellant. In addition to taking appellant's "mug shot," Shirley took some photographs of appellant's body, because appellant "had quite a few scratches, marks, [and] bruises on him at the time, [including] swollen knuckles and scratches over his cheek and eye, ..." At 11:00 a.m. on December 23, Shirley retrieved appellant from the jail and took him to the police station for interrogation. Police Chief Travis Thomas spoke with appellant for approximately an hour, during which time he again informed appellant of his rights. Thomas stated that appellant indicated he understood his rights, but made no effort to exercise them.
Sometime around noon, Shirley again informed appellant of his rights and then proceeded to question him. During the course of the interrogation, appellant wrote out an incriminating statement. The statement, written on forms which contained the Miranda warnings, read as follows:
I first seen this girl Monday night walking by the bridge. Me and my brother and cousin were at my Uncle Alvin Cruz house by the jailhouse. I got off and followed her toward the Sonic Drive inn. I remember her wearing big dark coat and carrying a small purse.
I grab her and told to come with me. She said where. I said don't worry about that. Then she said o.k.
We walked across the river and went up on side of the hill. I stretched the fence. She went arcoss. I then cross. So went to the shed and we had intercourse.
I can't really remember but the way it must have been was that I knock her uncoious and drag her body down by the fence next to the fence and then throw some logs on her and then I left.
I left the body, went back arcoss the dam, went up to the ridge and I seen Herbert Jackson, Larry Drake, Gilbert Gonzales, and I asked them to give a ride home. I told them I had a fight and I needed a ride to Jarrell and would pay for gas. and then they took straight home. My wife asked me what happened. I told her I had a fight. Then I change clothes. Then I put my pants under the sink in the bathroom. I had put my shirt in my bedroom on my little girl bed. Then I change my clothes then told my sister-in-law to take me to Georgetown so they would think had a fight. We road around for a while then I told her to take me back home, my wife was with us when we road around, and *249 we saw my friends who gave me a ride home.[10]
After obtaining this statement, the police continued to search the area around the bridge. On December 24, 1976, the police retrieved a sweater, slip, brassiere, and pair of women's underpants from the river. At trial, Garcia identified these garments which J__ B__ had been wearing on December 20, 1976. J__ B__'s mother also identified the poncho, Bible, shoes, and purse as J__ B__'s property.
At trial, the State also introduced the testimony of a DPS chemist/toxicologist, Charles Smith, and Dr. Joseph Jachimczyk, who performed an autopsy on J__ B__'s body. Smith analyzed appellant's undershirt and jeans, appellant's and J__ B__'s blood types, and numerous articles from the crime scene. Smith stated that appellant's undershirt and jeans contained traces of blood. While Smith could not determine the type of blood on the jeans, the traces on the undershirt matched appellant's blood type.
Smith also analyzed cotton fibers that had been scraped from the fingernails of J__ B__'s body. While Smith could not definitively state that these fibers came from appellant's jeans, he did say that they could have come from those jeans. Smith also analyzed strands of J__ B__'s hair and hair found on the fragment of the blue belt. The two samples of hair had similar characteristics.
The testimony of Jachimczyk established that J__ B__ had been struck nine times in the head. J__ B__'s hands exhibited "defense contusions," which the doctor described as wounds sustained while trying to cushion or avoid an oncoming blow. Jachimczyk noted that J__ B__'s brain had swollen and concluded that she died from a fractured skull sustained in association with a forced rape. Jachimczyk based his conclusion of rape upon the tearing of J__ B__'s hymen, the damage to J__ B__'s vaginal orifice, the significant blood flow from J__ B__'s vagina, and the presence of seminal fluid in J__ B__'s vagina. Jachimczyk testified that the blows to J__ B__'s head had been inflicted a few moments before or after the rape.
Appellant's defensive evidence was limited to testimony that: the area at the northern end of the bridge did not appear to have been the scene of a struggle, that appellant was not hiding in a closet at his brother's house, that appellant's hand was swollen because he had broken it well before December 20, that only appellant's forehead had sustained a cut, and that positive identification of people's faces while driving across the bridge was impossible. Viewed in the light most favorable to the jury's verdict, the evidence clearly supported the jury's finding of guilt beyond a reasonable doubt. Having concluded that appellant's case was a proper subject for prosecution under the capital punishment statute and that the evidence is sufficient to sustain his conviction, we overrule appellant's first point of error.
Appellant contends in point of error sixteen that the evidence is insufficient to support an affirmative answer to punishment issue two concerning his future dangerousness. Again, in assessing the sufficiency of the evidence, we must view the evidence in the light most favorable to the jury's finding, and then determine whether any rational jury could have found beyond a reasonable doubt an affirmative answer to the second punishment issue. Harris v. State, 738 S.W.2d 207, 225-226 (Tex.Cr. App.1986).
At the punishment phase, the State introduced the testimony of five witnesses, and documentary evidence of appellant's two prior misdemeanor convictions. The testimony of C__ S__ established that appellant raped her only seven months before he raped and murdered J__ B__. Georgetown police officer Welton Watson testified that he had investigated the earlier rape and had found C__ S__ hysterical and disheveled. Magistrate Hill and Williamson County Sheriff Jim Boutwell both testified *250 that appellant's reputation as a peaceable, law-abiding citizen was bad. Williamson County Attorney Billy Ray Stubblefield testified that appellant was the same person who had pled guilty to resisting arrest and escape just five months prior to the rape and murder of J__ B__. Stubblefield also identified the documents bearing appellant's signature wherein he pled guilty to the two offenses.
Appellant's evidence at the punishment phase consisted of the testimony of six witnesses and a number of pictures appellant had drawn while in jail. By this evidence, appellant sought to establish that he had not been violent in the past and that he had improved himself. A number of witnesses stated that appellant had matured, had become more religious, and that he loved his children and relatives. Appellant argues that the State's evidence is insufficient because it concerns only conduct that occurred at the time of the murder, whereas his evidence pertains to his good behavior and improvement over the intervening ten years.
The State's burden of proof on the second punishment question required the State to prove that appellant would, more likely than not, commit violent criminal acts in the future so as to constitute a continuing threat to society whether in or out of prison. Smith v. State, 779 S.W.2d 417, 421 (Tex.Cr.App.1989). The jury may consider the evidence presented during the trial's guilt/innocence and punishment phases in answering the second punishment question. Valdez v. State, 776 S.W.2d 162, 166-167 (Tex.Cr.App.1989). Moreover, the facts and circumstances of the case being prosecuted may constitute sufficient evidence of future dangerousness. Farris v. State, 819 S.W.2d 490, 498 (Tex.Cr.App.1990); Muniz v. State, 573 S.W.2d 792, 795 (Tex.Cr.App.1978).
Appellant's sixteenth point of error is without merit. Viewed in the light most favorable to the jury's affirmative answer, the evidence shows that appellant raped another woman only seven months before he raped and murdered J__ B__. Appellant had also pled guilty to two misdemeanor offenses only five months before he attacked J__ B__. Moreover, appellant's attack upon J__ B__ was brutal, as evidenced by the nine blows inflicted to her skull. On this record, we conclude that a rational jury could have found beyond a reasonable doubt that appellant constituted a continuing threat to society and overrule appellant's sixteenth point of error.
In points of error ten and eleven, appellant argues that his confession should have been suppressed because it was the product of an illegal arrest. In his tenth point of error, appellant contends that the admission of his confession violated the Fourth Amendment to the United States Constitution and Article 1, § 9 of the Texas Constitution because there was no probable cause to arrest him. In his eleventh point of error, appellant contends that in addition to violating the United States and Texas constitutions, his confession was excludable under Article 38.23, "in that there was no showing that appellant was about to escape as required by" Article 14.04.
The thrust of appellant's arguments under his tenth and eleventh points of error is that the police had no probable cause to arrest him. He contends that he was not "about to escape" as that term is found in Article 14.04. We will, however, address appellant's points by analyzing them in light of Article 14.03(a)(1), which states:
(a) Any peace officer may arrest, without warrant:
(1) persons found in suspicious places and under circumstances which reasonably show that such persons have been guilty of some felony or breach of the peace, or threaten, or are about to commit some offense against the laws; ...
We interpret this statute as "the functional equivalent of probable cause." Johnson v. State, 722 S.W.2d 417, 421 (Tex.Cr.App. 1986), overruled on other grounds, McKenna v. State, 780 S.W.2d 797, 800 (Tex.Cr. App.1989). Therefore, if appellant's arrest meets the requirements of 14.03(a)(1), we can dispose of appellant's contentions concerning a lack of probable cause and need not reach the issue of whether sufficient *251 grounds existed to support the belief that appellant was a threat to escape.
Probable cause exists "when the facts and circumstances within an officer's personal knowledge and of which he has reasonably trustworthy information are sufficient to warrant a person of reasonable caution in the belief that, more likely than not," a particular suspect has committed the crime. Castillo v. State, 818 S.W.2d 803, 805 n. 4 (Tex.Cr.App.1991). In determining whether probable cause existed for the arrest, we examine the cumulative information known to all the officers who cooperated in the arrest. Woodward v. State, 668 S.W.2d 337, 344 (Tex.Cr.App. 1982).
Before Mahagan arrested appellant, the authorities had substantial information implicating appellant as the perpetrator of the crime. The police had already found the body of J__ B__ and had known that she had been missing as of Monday, December 20. The police knew that Hurtado had seen a young lady fitting J__ B__'s description walking at about 7:00 p.m. toward the northern end of the San Gabriel River bridge, being followed by appellant, who was wearing only an undershirt and jeans in freezing weather. The police had already found numerous objects, including a deposit slip with J__ B__'s name on it near the northern end of the bridge. The police had reason to believe that a struggle had occurred at that end of the bridge because of the scattered objects and the broken limbs of the nearby hedge.
The police also knew that Maldonado had driven past his son's home around 8:30 p.m. on December 20 and observed appellant crossing the yard. This happened near the San Gabriel River bridge, and appellant was still dressed in only an undershirt and jeans in spite of the weather conditions. Finally, the police knew that appellant was out on bond for a rape he had committed only seven months earlier.
We next consider whether appellant was found in a suspicious place. Rarely is any place suspicious per se. Johnson, 722 S.W.2d at 421. Additional facts and reasonable inferences therefrom, however, may justifiably render a place suspicious from a police officer's perspective. Id. In this case, Mahagan knew before he approached appellant's brother that appellant was the prime suspect in the murder of J__ B__. Appellant's brother told Mahagan that if appellant were in the house, he would be turned over to Mahagan.
At the house, though, after appellant's wife nodded toward the bedroom, appellant's brother went directly to the closet in that room, opened the closet door, and motioned for appellant to come out. Mahagan testified that appellant was hiding in the closet, a reasonable inference on these facts. Based on this record, we conclude that appellant was arrested upon probable cause in a suspicious place, under circumstances that reasonably show he had committed some felony. We overrule appellant's tenth and eleventh points of error.
In points of error seven and eight, appellant argues that the admission in evidence of his confession violated his right against self incrimination as contained in the Fifth Amendment to the United States Constitution and Article 1, § 10 of the Texas Constitution. The basis of appellant's complaint in point of error seven is that the police ignored his repeated requests for an attorney. In point of error eight, appellant argues that his confession was involuntary on the basis of threats and promises made by the police.
Before addressing the substance of appellant's seventh and eighth points of error, we conclude that we need not address appellant's Texas constitutional claims. Appellant has proffered no argument or authority concerning the protection provided by the Texas Constitution or how that protection differs from the protection provided by the United States Constitution. State and federal constitutional claims should be argued in separate grounds, with separate substantive analysis or argument provided for each ground. Heitman v. State, 815 S.W.2d 681, 690-691 n. 23 (Tex.Cr.App.1991); Morehead v. State, 807 S.W.2d 577, 579 n. 1 (Tex.Cr. App.1991); Tex.R.App.Proc. 74 and 210. *252 We will not make appellant's state constitutional arguments for him.
Concerning the seventh point of error, appellant emphasizes that the record shows that, during custodial interrogation, he requested an attorney at least two different times. Appellant admits that the testimony shows that in response to one of his requests for an attorney, Officer Shirley began to dial the telephone number of an attorney, but stopped when, according to Shirley, appellant told him "No, I will talk to him later." Even though the trial judge dictated into the record findings of fact which found that appellant had voluntarily confessed and waived his right to counsel, appellant argues in his brief that the admission constituted error because "the State was obliged to address each instance in which Appellant invoked his right to counsel."
As shown by this quotation from the brief, the thrust of appellant's argument is that the State failed to directly rebut appellant's testimony that he repeatedly asked for an attorney. In support of his position, appellant directs our attention to a portion of Shirley's testimony from the original trial in 1977.[11] In response to a question inquiring whether appellant had asked to speak with an attorney, Shirley stated, "At a couple of periods of time, yes, there were a couple of times he asked to talk to an attorney, yes." On the basis of the State's failure to rebut his claim of repeated requests for counsel, appellant argues that his confession should have been suppressed because the State failed to prove that it was given voluntarily.
At a hearing to determine the voluntariness of a confession, the State need not rebut appellant's assertions, but only controvert them. Dunn v. State, 721 S.W.2d 325, 333 (Tex.Cr.App.1986). When the case presents a controverted issue to the trial court, the trial court acts exclusively as the factfinder, assessing the credibility of the witnesses and the weight to be accorded their testimony. Gentry v. State, 770 S.W.2d 780, 790 (Tex.Cr.App.1988). If the trial court's resolution of a controverted issue is supported by the record, a reviewing court should not disturb the trial court's decision. Dunn, 721 S.W.2d at 336.
The State's evidence contradicted appellant's assertions. While Shirley did state in 1977 that appellant asked to talk to an attorney "a couple of times," he also stated in 1977 that appellant had requested an attorney only "at one period." Shirley added that he told appellant that he could have an attorney present even after appellant had said "No, I will talk to him later." Still, appellant did not seek to exercise his right to counsel. Shirley also stated at both trials that the police did not deny appellant any of his rights, including his right to an attorney. All the other peace officers who testified stated that appellant was not denied his right to an attorney because appellant never invoked that right in their presence. Whether appellant repeatedly requested an attorney was a question for the trial judge. On this record, we conclude that the trial judge, acting as the factfinder, decided a controverted question in a manner supported by the record. We must, however, analyze whether appellant's single request for an attorney renders his confession inadmissible.
In Minnick v. Mississippi, 498 U.S. 146, 111 S.Ct. 486, 112 L.Ed.2d 489 (1990), the Supreme Court reiterated its holding from Edwards v. Arizona, 451 U.S. 477, 101 S.Ct. 1880, 68 L.Ed.2d 378 (1981), that once the accused invoked his right to counsel, interrogation had to cease until counsel had been made available to the accused, unless the accused himself initiated any further communication. Minnick, 498 U.S. at 151-52, 111 S.Ct. at 490. This rule seeks to ensure "that any statement made in a subsequent interrogation is not the result of coercive pressures." Id. at 149-50, 111 S.Ct. at 489. Minnick, however, failed to alter the rule that an accused may still waive the Fifth Amendment right to counsel *253 even after having already invoked it. Id. at 154-56, 111 S.Ct. at 492.
To establish a waiver, the State must demonstrate that the accused intentionally relinquished a right of which he was aware. Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938). Whether a waiver is shown "must depend, in each case, upon the particular facts and circumstances surrounding the case, including the background, experience, and conduct of the accused." Id. If the State's evidence shows nothing more than that the accused responded to further police-initiated custodial interrogation, a valid waiver is not shown. Smith v. Illinois, 469 U.S. 91, 98, 105 S.Ct. 490, 494, 83 L.Ed.2d 488 (1984).
In Smith, the Supreme Court held that the State may not rely upon an accused's subsequent responses to police interrogation in order to cast doubt upon the adequacy of the accused's initial request for counsel. Id. at 100, 105 S.Ct. at 495. The Court expressly refused to decide, however, "the circumstances in which an accused's request for counsel may be characterized as ambiguous or equivocal as a result of events preceding the request or of nuances inherent in the request itself, nor... the consequences of such ambiguity." Id.
This case presents a prime example of a direct request for counsel that was rendered at least ambiguous by appellant's subsequent statement that he would talk to the attorney later. From the record before the trial judge, it appears that appellant did request an attorney, but withdrew his request as Shirley was dialing the phone number to contact that attorney. Appellant's withdrawal of his request was not the product of further interrogation, but a voluntary act on appellant's part. See Granviel v. Lynaugh, 881 F.2d 185 (5th Cir.1990), cert. denied, 495 U.S. 963, 110 S.Ct. 2577, 109 L.Ed.2d 758 (1990). The record reveals that appellant had dealt with the police only months before the incident involved here and was well aware of his right to consult with counsel. The police respected appellant's wishes, and appellant's statements after he withdrew his request for counsel were not the product of coercive pressures. After applying the test set out in Johnson v. Zerbst, supra, we conclude that appellant knowingly relinquished his right to consult with an attorney. Having concluded that appellant's confession was admissible because he had waived his right to have an attorney present, we overrule appellant's seventh point of error.
Concerning appellant's eighth point of error, in which he claims that his confession was the result of threats and/or promises, appellant testified that no peace officer read him his rights and that all of the officers involved ignored his repeated requests for an attorney. Appellant stated that Shirley cursed him, hit him with a drinking glass, threatened to shoot him, told him what to write in his confession, and promised him leniency if he would confess. Appellant also alleges that Shirley promised to help appellant's pregnant wife and sick mother.
The State's evidence contradicted appellant's testimony in many respects. As noted, each officer who interrogated appellant testified that he informed appellant of his rights before commencing any interrogation. Shirley stated that he never cursed, threatened, or struck appellant. Shirley admitted offering to contact charitable agencies or the proper authorities who might be able to give assistance to appellant's mother and wife.
Shirley also admitted discussing with appellant a case where a murderer confessed and received a term in a mental institution. Relative to this subject, Shirley testified that he told appellant "that in some cases leniency is shown if people, if suspects give a statement, yes, sometimes there are leniencies." Shirley denied that he told appellant what to write or that he promised appellant leniency in return for a confession.
Before addressing the substance of appellant's arguments concerning promises allegedly made by the police, we note that the State controverted all of appellant's allegations that he had been threatened or *254 coerced. Therefore, the trial court, as the exclusive judge of witness credibility, acted well within its authority in disbelieving appellant's assertions. Gentry, 770 S.W.2d at 790. The issue of promises as an inducement for the confession, however, requires further analysis.
Before a promise will render a confession inadmissible, it must be shown that the promise induced the confession. Jacobs v. State, 787 S.W.2d 397, 399 (Tex.Cr. App.1990). In order to induce the confession, the promise must be (1) positive, (2) made or sanctioned by someone in authority, and (3) of such an influential nature that a defendant would speak untruthfully in response thereto. Id.
Concerning the discussion about leniency, the record shows that Shirley stated that leniency was sometimes shown when a defendant confessed. This was simply a statement of fact. Appellant has failed to demonstrate that the party in authority positively and unequivocally promised leniency in return for a confession. The conversation about leniency fails to rise to the level of a promise.
Regarding the discussion of providing aid to appellant's family, Shirley did promise to contact the proper charitable authorities. Also, Shirley, as a peace officer, constitutes a person in a position of authority. Appellant's argument fails, however, on the third requirement listed above. We fail to see how a promise to contact the proper charitable authorities could influence a person to untruthfully confess to the heinous crime involved here. Since anyone, even appellant's own family, could have contacted those authorities, we cannot conclude that Shirley's offer induced appellant's confession. We overrule appellant's eighth point of error.
In his eighteenth point of error, appellant complains of the systematic exclusion of Mexican-Americans from the grand jury that indicted him. In our original opinion, this Court concluded that appellant had failed to preserve any error concerning the array of the grand jury. Muniz, 573 S.W.2d at 796. In accord with the "law of the case" doctrine, we refuse to depart from our original disposition of this point of error. See Jordan v. State, 576 S.W.2d 825, 827-828 (Tex.Cr.App.1978). We overrule appellant's eighteenth point of error.
In his ninth point of error, appellant contends that the trial court erred in refusing to submit to the jury a question about whether he had confessed voluntarily or only as the result of coercion and/or promises. Appellant did not testify before the jury. Appellant did cross-examine the State's witnesses concerning his arrest and interrogation. Appellant argues that the evidence before the jury showed that he had been arrested late at night, had gotten little sleep, had been ignored when he requested an attorney, had been denied food, and had been exposed to the State's theory of the case, including photographs of J__ B__'s body.
When evidence from any source raises a defensive issue, and the defendant properly requests a jury charge on that issue, the trial court must submit the issue to the jury. Moore v. State, 574 S.W.2d 122, 124 (Tex.Cr.App.1978). The evidence which raises the issue may be either strong, weak, contradicted, unimpeached, or unbelievable. Sanders v. State, 707 S.W.2d 78, 80 (Tex.Cr.App.1986), limited on other grounds, Willis v. State, 790 S.W.2d 307, 314 (Tex.Cr.App.1990). When the evidence fails, however, to raise a defensive issue, the trial court commits no error in refusing a requested instruction. Kunkle v. State, 771 S.W.2d 435, 444 (Tex.Cr.App. 1986).
In Hughes v. State, 562 S.W.2d 857, 863 (Tex.Cr.App.1978), which also involved a trial court's refusal to charge the jury on the voluntariness of appellant's confession, this Court wrote "Appellant did not testify before the jury and did not call any witnesses on the issue of voluntariness. There was no evidence before the jury which raised that issue. Thus, the court did not err in refusing the charge."
Likewise in this case, appellant did not testify or call any witnesses on the issue of voluntariness. The vast majority of appellant's *255 "evidence" consisted of leading questions propounded to peace officers, questions which implied that appellant was coerced into confessing. Each witness answered these questions in the negative, expressly refuting the implication of coercion.
Appellant's only affirmative evidence on these issues concerned the facts that he was arrested late at night, did not eat until after he confessed, and had been exposed to the State's theory of the case, including pictures of J__ B__'s body. The witnesses, however, disputed appellant's assertions that he was denied food, denied an attorney, or denied sleep. On this record, we conclude that no evidence before the jury raised the issue of the voluntariness of appellant's confession.[12] Therefore, the trial court committed no error in refusing appellant's requested instruction. We overrule appellant's ninth point of error.
Appellant's second through sixth points of error are interrelated. In his second point of error, appellant complains of the trial court's refusal to instruct the jury about the differing definitions of the terms "deliberately" and "intentionally," which are contained in the first punishment issue. While acknowledging that the trial court is not normally required to define "deliberately," See Morin v. State, 682 S.W.2d 265, 270 (Tex.Cr.App.1983), appellant asserts that his case presents a situation different in nature from those previously addressed by this Court. Appellant claims that his trial counsel made comments which effectively informed the jury that "deliberately" and "intentionally" were synonyms.
Based on this misinformation, appellant argues in his third and sixth points of error that he was convicted in violation of the due process of law and due course of law provisions of the United States and Texas constitutions, respectively. Also, based upon this alleged confusion regarding the definition of "deliberately," appellant in his fourth and fifth points of error contends that his death sentence violates the proscriptions against cruel and unusual punishment contained in the United States and Texas constitutions.
Appellant's points of error two through six lack merit. We refuse to depart from our holding that the trial court need not define the term "deliberately." Russell v. State, 665 S.W.2d 771, 780 (Tex.Cr.App. 1983). Moreover, even if any error was committed, appellant presents nothing for review concerning the jury charge on punishment. Appellant's counsel requested no instruction regarding the term "deliberately" and lodged no objection to the court's punishment charge. A failure to object can waive even an error involving constitutional rights. Id. at 777. We overrule appellant's points or error two through six.
In his twelfth point of error, appellant complains of the trial court's admission in evidence, during the trial's punishment phase, of the documents pertaining to his two prior misdemeanor convictions. Appellant argues that his "prior convictions were void" because they reflect that appellant was not represented by counsel and do not indicate that appellant "knowingly and intelligently waived his right to counsel." Accordingly, appellant contends that the convictions should have been suppressed.
Both documents in which appellant waived his right to trial and pled guilty contain the statement "I do not wish to have a lawyer represent me at this hearing and will represent myself." Despite appellant's contentions to the contrary, his convictions are valid and his waiver of counsel is clear enough. Valid prior convictions may be admitted at the punishment phase of a capital trial. Hawkins v. State, 660 S.W.2d 65, 82 (Tex.Cr.App.1983). Appellant *256 further waived any error by failing to object to their admission. Bacon v. State, 500 S.W.2d 512, 515 (Tex.Cr.App.1973). We overrule appellant's twelfth point of error.
In his fifteenth point of error, appellant argues that the trial court erred in failing to instruct the jury at the punishment phase "that the jury in its deliberations should consider all evidence of mitigating circumstances presented to it." At the punishment phase, appellant introduced evidence that he (1) was raised in poverty by his mother alone, (2) was religious, (3) was generous and loving to his family and relatives, (4) was a good son and had been a good sibling, (5) had been involved in church activities in his youth, and (6) had developed his artistic abilities. Appellant claims that the "relevance of this evidence went beyond the scope of the second special issue [and that jurors] who thought that someone with [these] character qualities... was less morally culpable than someone without ... simply did not have a way of expressing that distinction under the two special issues submitted in this case." In support of this position, appellant directs our attention to the case of Penry v. Lynaugh, 492 U.S. 302, 109 S.Ct. 2934, 106 L.Ed.2d 256 (1989).
As we have interpreted Penry, a capital sentencing scheme offends no federal constitutional provisions if the scheme both allows the jury to consider relevant mitigating evidence and provides the jury some means of expressing a reasoned moral response to that evidence in making an individualized assessment of punishment. Goss v. State, 826 S.W.2d 162, 165 (Tex.Cr. App.1992). In analyzing a Penry-type claim, we look to see if the evidence presented at trial is specifically relevant to a defendant's "moral culpability," i.e. whether the evidence provides a basis for concluding that the defendant is less deserving of capital punishment. Id. at 165. If the relationship between the particular case's evidence and the special issues is such that the special issues provide no means for the jurors to respond in a morally reasoned way, the statute is unconstitutional as applied. Id. From this, a defendant is entitled to an additional instruction only if the evidence is relevant to the case in a manner that is beyond the scope of the special issues. Id.
The capital punishment statute is not unconstitutional as applied to appellant's case. Except for the evidence pertaining to appellant's development of his artistic faculties, all of appellant's evidence fell within the ambit of the second special issue. The evidence that appellant had been a good family man, had treated his mother and siblings well, had taken part in church activities as a youth, had been raised in poverty, and had not been violent, all pertain to appellant's character and propensity for constituting a future danger to society. Goss, 826 S.W.2d at 166; Earhart v. State, 823 S.W.2d 607, 632 (Tex.Cr.App. 1991); Ex Parte Baldree, 810 S.W.2d 213, 217 (Tex.Cr.App.1991).
Concerning appellant's artistic abilities, we conclude that in this case the evidence adduced "is otherwise irrelevant to an individualized assessment of the deathworthiness of appellant." Lackey v. State, 819 S.W.2d 111, 134 (Tex.Cr.App.1989). Unlike Penry's evidence of child abuse and brain damage, appellant's evidence "does not tend to excuse or explain his criminal act,..." Id. Therefore, we conclude that appellant was not entitled to an additional instruction regarding mitigating evidence. The jury's assessment of all of appellant's relevant evidence could be expressed through the second special issue. We overrule appellant's fifteenth point of error.
In his fourteenth point of error, appellant argues that the Texas capital punishment statute is unconstitutional on its face. Appellant argues that the statute fails to satisfy the requirements of Lockett v. Ohio, 438 U.S. 586, 98 S.Ct. 2954, 57 L.Ed.2d 973 (1978), "because its second special issue 1) restricts the jury's role to that of a factfinder rather than as a body whose duty it is to assess or recommend a punishment, and 2) asks the jury to make a single determination that renders much mitigating evidence irrelevant, or worse, actually turns such evidence against the defendant." *257 (Emphasis in appellant's brief.) The core contention of appellant's argument is that evidence which produces a mitigating effect by evoking sympathy can also produce an aggravating effect when viewed in the context of the second punishment issue.[13]
Appellant's argument is devoid of merit. The Texas statute failed to offend the United States Constitution in 1976. Jurek v. Texas, 428 U.S. 262, 96 S.Ct. 2950, 49 L.Ed.2d 929 (1976). The Supreme Court failed to find the statute facially unconstitutional in 1988. Franklin v. Lynaugh, 487 U.S. 164, 108 S.Ct. 2320, 101 L.Ed.2d 155 (1988). Moreover, in 1989, the statute was found to offend the Constitution only as it applied to a particular petitioner. Penry v. Lynaugh, 492 U.S. 302, 109 S.Ct. 2934, 106 L.Ed.2d 256 (1989). The Texas statute suffers from no facial invalidity. We overrule appellant's fourteenth point of error.
In his seventeenth point of error, appellant contends that his prosecution under the capital punishment statute in the instant case violated the double jeopardy clauses of both the United States and Texas constitutions. The substantive argument underlying this point of error was advanced and disposed of in our original opinion.[14]Muniz, 573 S.W.2d at 794. In accord with the "law of the case" doctrine, we adhere to our original disposition of this point of error. See Jordan, 576 S.W.2d at 827-828. We therefore overrule appellant's seventeenth point of error.
In his thirteenth point of error, appellant claims that he received ineffective assistance of counsel in violation of the Sixth Amendment to the United States Constitution and article 1, § 10 of the Texas Constitution. Appellant directs our attention to numerous instances where his counsel performed deficiently. Appellant first complains that during the individual voir dire, his trial counsel misinformed three jurors of the definition of "deliberately," effectively conveying the false impression that "deliberately" and "intentionally" were synonyms. Appellant claims that the effect of this misinformation was "to wholly nullify issue one as a consideration for the jury at the punishment phase of the trial."
Appellant also complains of his attorney's failure to challenge peremptorily three members of the venire who allegedly exhibited a clear bias in favor of the State. Appellant complains that venirepersons Berry Sullivan, Donna Rhode, and Mary Harbin should have been the subject of his attorney's three remaining peremptory challenges. Appellant bases his complaint against Sullivan upon Sullivan's comment to the effect that he would have to be fifty-one percent certain or more before he could return affirmative answers to the punishment issues. Appellant bases his complaint against Rhode upon her statement that she would be biased against someone charged with the combination of rape and capital murder, as opposed to someone charged with the combination of robbery and capital murder. Appellant bases his complaint against Harbin upon her knowledge of appellant's past conviction for the instant offense and her two statements, one to the effect that she could not definitely state that her knowledge would have absolutely no effect upon her and one to the effect that prison inmates obtained parole too easily.
As further grounds for his claim of ineffective assistance, appellant complains of his counsel's interrogation of a witness at the trial's punishment phase which "opened the door for the State to introduce otherwise inadmissible evidence that Appellant had been on death row since his first trial." The record reflects that appellant's counsel asked Sheriff Boutwell if he had had any problems with appellant since 1978. After Boutwell answered that he had not, the *258 prosecutor asked Boutwell where appellant had been during most of that time. Boutwell answered that appellant had been "on death row in Huntsville."
Appellant's final example of his attorney's alleged deficiency concerns the admission in evidence of appellant's two prior misdemeanor convictions. Appellant argues, as per his twelfth point of error, that the convictions were void and inadmissible, and that "an objection from counsel could have prevented their admission in evidence."
Based upon all of the aforementioned instances, appellant contends that his attorney's performance fell below the constitutionally mandated standards set out in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). Appellant contends that the combination of these acts resulted in a "breakdown in the adversarial process sufficient to call into question the fundamental fairness of the proceedings."
In order to prevail upon a claim of ineffective assistance of counsel, an appellant must meet the requirements of a two-prong test. Id. at 687, 693, 104 S.Ct. at 2064, 2067; Hernandez v. State, 726 S.W.2d 53, 56-57 (Tex.Cr.App.1986). An appellant must first demonstrate that his attorney's performance "fell below an objective standard of reasonableness." Strickland, 466 U.S. at 688, 104 S.Ct. at 2064. Additionally, an appellant must demonstrate "a reasonable probability that, but for counsel's errors, the result of the proceeding would have been different." Id. at 694, 104 S.Ct. at 2068. In this regard, a probability is reasonable only if it is "sufficient to undermine confidence in the outcome." Id.
We begin our analysis of appellant's specific complaints by noting that we have already concluded in our discussion of his twelfth point of error that the trial court committed no error in admitting the evidence of appellant's two prior misdemeanor convictions. As the documents were admissible, the attorney's failure to object to them constituted no error.
The same is true of counsel's failure to exercise his peremptory challenges against venirepersons Sullivan, Rhode, and Harbin. After reviewing the entire voir dire of these individuals, we cannot agree with appellant's assertion that they "clearly were biased in favor of the State."
Sullivan did say that he would have to be fifty-one percent certain or more before he could return affirmative answers to the punishment issues. We interpret this statement to be his internal conception of what "beyond a reasonable doubt" would mean. Sullivan agreed with the prosecutor's comment at voir dire that the State's burden was "more than just a tipping of the scale." Sullivan stated that he would hold the State to its burden of proof, that he would have to have no reservations about his decision, and that he based his decisions upon his own independent analysis of the facts presented.
Venireperson Rhode did state that she would have an immediate, tremendous prejudice against someone charged with rape and capital murder, as opposed to someone charged with robbery and capital murder. She also stated, however, that she would not apply this prejudice to appellant. When asked if she could give appellant the presumption of innocence, she answered "certainly." She also indicated that she agreed with the legal propositions that the State had the burden of proof, that appellant need not present any evidence, and that he had no duty to testify. Concerning this final proposition, Rhode stated that she would not hold it against appellant if he did not testify.
With respect to venireperson Harbin, it is true that she admitted that she had some knowledge of appellant's prior conviction and felt that parole was too easily obtainable. While she could not positively state that her knowledge of the past conviction would have absolutely no effect upon her in the instant case, she also made comments to the effect that she would be hesitant to vote in favor of the death penalty because it would be difficult on appellant's nephew, whom she knew. On the basis of this final statement alone, the State would have been warranted in the *259 belief that Harbin might be biased in appellant's favor.
In short, our review of the entire voir dire of each venireperson reveals no bias against appellant. Counsel's failure to challenge peremptorily these three venirepersons constitutes no basis for a claim of ineffective assistance of counsel.
We now address appellant's complaints based upon defense counsel's remarks about the definitions of "deliberately" and "intentionally." To venireperson Ronald Ballenger, counsel said that "in most cases you can sort of derive the answer from [sic] that first question from what happened in the guilt or innocence stage, ..." To venireperson Tanya Pavliska, counsel said that "if you find him guilty, it pretty much follows that it was deliberate." To venireperson Jessie South, counsel stated that the "first question normally is fairly easily answered ... because if it wasn't deliberate, you probably wouldn't have convicted him in the first place."
Counsel's comment to Ballenger presented no error. In almost all cases, the evidence constituting deliberation will be adduced during the trial's guilt/innocence phase. As for the other two comments, we disagree with appellant's characterization of the effect of counsel's remarks: counsel's statements did not necessarily have the effect of informing the jurors that "deliberately" was a synonym for "intentionally." Counsel did, however, discount the difference between the two terms. Given the facts of this case, such a strategy does not appear to have been unreasonable.
Finally, we address appellant's contention concerning defense counsel's question which "opened the door" for the State to elicit testimony that appellant had been on death row for approximately ten years. Appellant's counsel did "open the door" by asking a question which implied that appellant had presented no problems in the community over the course of the preceding decade. Counsel's conduct in asking the question invited the Sheriff's adverse response.
We conclude, however, that this conduct fails to require a reversal of appellant's conviction. A reversal is required only if our confidence in the outcome is undermined. Strickland, 466 U.S. at 694, 104 S.Ct. at 2068. The State introduced considerable evidence during both phases of the trial. The jury knew that appellant had raped another woman and had pled guilty to two offenses only months before the instant offense. The jury also knew that appellant's reputation as a peaceable, law-abiding citizen was bad.
Beyond the strength of the State's case, the record also reflects that counsel performed his duty in a professional and zealous manner. Counsel vigorously cross-examined witnesses, repeatedly objected to the introduction of appellant's statement, and presented evidence at the trial's punishment phase concerning appellant's artistic abilities and past conduct. On this record, we cannot conclude that counsel's one obvious mistake which allowed the State to introduce evidence of appellant's death row incarceration negated an otherwise wholly commendable performance. Appellant was not denied effective assistance of counsel. We overrule appellant's thirteenth point of error.
The judgment of the trial court is AFFIRMED.
MEYERS, J., not participating.
CLINTON, Judge, dissenting.
Appellant was first convicted in 1977 of the offense of murder in the course of committing aggravated rape. See V.T.C.A. Penal Code, § 19.03(a)(2), as it read prior to amendment by Acts 1983, 68th Leg., ch. 977, p. 5317, § 6, eff. September 1, 1983. On direct appeal this Court affirmed his conviction. Muniz v. State, 573 S.W.2d 792 (Tex.Cr.App.1978). Subsequently, however, the Fifth Circuit Court of Appeals granted federal habeas corpus relief, and ordered a new trial. Muniz v. Procunier, 760 F.2d 588 (CA5 1985). Appellant was retried under the same indictment in 1986, was again convicted and sentenced to death, and is once again before us on direct appeal. Article 37.071(h), V.A.C.C.P.
*260 In his first point of error appellant contends his conviction for capital murder on the facts presented "constitutes an improper use of the capital murder statute." From the evidence presented at trial, he argues, it is apparent the State was bound to rely upon the very act of killing his victim to establish the aggravating element that raises the underlying felony to the level of aggravated rape as required for conviction under § 19.03(a)(2), supra.[1] In essence, although he does not specifically pray for an acquittal, appellant thus attacks the sufficiency of the State's evidence to show capital murder in this cause.
I.
Viewed in the light most favorable to the verdict, the evidence shows that shortly after 7:00 p.m. on the evening of December 20, 1976, appellant was seen following close behind Janis Carol Bickham, a Southwestern University co-ed, on a bridge crossing the North San Gabriel River in Georgetown. The temperature at the time was sub-freezing. At 10:00 a.m. the next morning, December 21, 1976, a surveyor found Bickham's Bible, shoes, open purse, poncho and a greeting card bearing her handwriting, apparently scattered about the ground on the other side of a trimmed hedge at the end of the bridge.[2] "[S]everal of the hedges were broken over[,]" with limbs apparently strewn about, and "the dirt was scuffed up like somebody had been tussling." The next day, December 22, 1976, the police brought in dogs. The dogs followed the scent obtained from Bickham's shoes down to the river bottom, where they lost it. The water was, at that time, "about knee deep or a little higher." On the opposite side of the river the police found a wire fence that had recently been bent down and apparently crossed over. Up the riverbank from the fence was an abandoned swimming pool and a roofless bathhouse. Inside the bathhouse police found that "the debris had been scattered around ... like a scuffle had taken place there." It appeared to police that the scattering of debris had been a recent event.[3] There was an area within the bathhouse that looked "like somebody had been laying down[.]" There was no evidence of blood in the bathhouse, however. Drag marks in the grass and a trail of broken twigs led to where Bickham's nude body was ultimately found, about fifty feet away, in the direction of the river, under a pile of driftwood. Along the way police found pantyhose and a portion of a belt. They also found "a lot of blood" that testimony showed was at a spot about three feet in diameter and "roughly" twenty feet from the body. A diagram admitted into evidence but not appearing in our appellate record reportedly described what we take to be this same area as "blood spots in struggle, approximately 15 feet to body[.]" Also, "some drops of blood" described as "minor" were observed at a separate location near the body.[4] Investigating officers could recall observing no other blood along the evidentiary trail leading from the bathhouse to the body. After the body was removed, police found a piece of driftwood close by with a blood stain on it. The stain on the driftwood showed a pattern that *261 was subsequently found to match the pattern of Bickham's turtleneck sweater, later recovered from the riverbed. Also found in various parts of the river were Bickham's bra, panties and slip.
About 8:30 p.m. on the night of December 20, 1976, an acquaintance of appellant saw him in a bloody T-shirt,[5] apparently coming from the direction of the scene of the offense.[6] Appellant had a cut on his forehead and a knot on his right wrist. Asked what had happened, appellant told his acquaintance that he had been jumped from behind and "[t]hat they had fought down there by the bridge, and he had put his hand inyou know, put his hand in his [assailant's] mouth and it pulled his jaw loose." Appellant further opined that he may have killed his assailant. The bottoms of appellant's pants were wet, and he explained that he had run through the river. Later that night appellant reappeared and asked his acquaintance whether anyone had been looking for him. Informed that nobody had, appellant told his acquaintance to tell anyone who might inquire that he had not seen appellant that night.
When he was arrested on the night of December 23, 1976, appellant had "fresh" bruises and abrasions on his arms and upper body, and scrapes on his kneecaps. The next day appellant gave a statement to police in his own handwriting. In relevant part the statement reads:
"I first seen this girl monday night walking by the bridge me and my brother + cousin were at my uncle Alvin Cruz house by the jail house. I got off and followed her toward Sonic Drive inn.
I remember her waring big dark coat and carring a small purse.
I grab her and told to come with me she said where I said don't worry about that.
We walked across the river and went up on side of the hill. I stretched the fence she went across I then cross so went to the shed and we had intercoarse. * * * I knock her incocous[7] and drag her body down by the fence next to the fence and then throw some logs on her and then I left. [sic passim]"
Appellant told police that for a weapon he had used a rock, and that he had thrown the rock, along with Bickham's clothing, into the river. He also related that "he had thrown something away when he had reached the street." A witness saw appellant on a residential street near the river at about 8:30 p.m. on the night of the killing. A portion of belt matching that found at the scene of the killing, with a hair consistent with Bickham's caught on the buckle, was recovered from the street.
The autopsy revealed that Bickham suffered nine blows to the head, one of which broke her jaw. Her eyes had been blacked. Her vaginal orifice was traumatized, and semen was discovered therein. The pathologist further testified:
"A.... The torso showed both on the front side and the back side, but more pronounced on the front side, linear or line like abrasions and surrounding contusions and bruising. We refer to them as brush-burn abrasions. They more commonly are known I would suspect as scrape marks. If a body is dragged, for example, you will see those kinds of marks on the body. Those were on the front side of the torso and the anterior right thigh and also to a lesser extent, not as pronounced on the back as they were on the front.
And then there were so-called defense type contusions or bruises over the dorsum, which is the top side of the hands, and the forearms.
*262 Q. Could you explain to us what a defense type wound is?
A. A defense type wound is that type of wound that is characterized as being the result of something or someone striking a part of the body where the victim would either tend toif he or she is aware of a blow or blows, to either cushion the blow or ward it off. They can happen either way."
On one of Bickham's breasts was a "semicircular linear mark ... [t]hat is consistent with the upper part of her bra[.]" The pathologist agreed that this would "tend to indicate a bra being worn while being dragged[.]" All of the head wounds were of a type that their infliction would "tend to splatter blood," although "not necessarily" in "a shower of blood" as with arterial bleeding. As to specifically when the various wounds were inflicted, the autopsy was inconclusive. The pathologist testified on cross-examination:
"Q. Could you tell from your examination, Doctor, whether the blows that you have described to the head were struck at the time of theof intercourse, after or before?
A. The best I could say was at or about the same time. It could have been a few minutes before. It might have been a few minutes after.
Q. Okay. So, there could have been intercourse before any of the blows were inflicted?
A. Yes, sir.
* * * * * *
Q.... Thethe eyes, the trauma to the eyes, in your opinion, did that come from blows to the eyes or can that result also from striking of the head somewhere else?
A. It can come under some circumstances for [sic] trauma to the blood elsewhereI'm sorry, trauma to the head elsewhere. But in this particular instance, it's my opinion that it was from direct blows because of the distribution type and nature of the hemorrhage.
Q. And there isis there any way that you can tell whether all of these injuries occurred at the same time?
A. The best, again, that I can say is at or about the same time. They were recent injuries, which means that within a very short interval prior to death.
Q. Very short interval prior to death?
A. Yes, sir.
Q. And you don't know with a great deal of specificity what that interval might have been?
A. I can't be more specific than say a matter of a few minutes or up to as long as 12 hours, but that would be the remote likelihood.
Q. Okay. So, I guess what I am getting at, and I don't know quite how to ask the question is, you're not saying that the black eyes occurred at one time and the striking of the head occurred at a different time oryou just can't tell?
A. That's correct."
II.
Coupled with appellant's confession, the circumstantial evidence in this cause is more than sufficient to show appellant raped and killed Bickham. We know that appellant accosted Bickham at the end of the North San Gabriel River bridge, and that a "tussle" took place at the hedge there. Appellant evidently used some level of force or threat to take Bickham across the river, over a fence, and into the bathhouse, where another "struggle" ensued. Appellant had intercourse with Bickham and then somehow rendered her unconscious. He then dragged her at least partially clad body down toward the river, bludgeoned her there, apparently with a rock, and covered her naked body with driftwood. He threw her sweater and undergarments, along with the murder weapon, into the river.
Appellant concedes that he is susceptible to conviction for either murder or aggravated rape as those offenses were defined in 1976. He nevertheless argues that he should not have been convicted of capital murder. His argument is twofold. First he argues that, consistent with ordinary rules of statutory construction, § 19.03(a)(2), supra, cannot be read to permit *263 conviction for capital murder whenever the act comprising the killing is all that is available to serve also as the aggravating factor elevating simple rape to aggravated rape. Second, he maintains that on the state of the present record the killing itself is in fact the only evidence available to aggravate the rape. I shall address these contentions in turn.
A.
The indictment alleges appellant intentionally caused the death of Bickham and "was then and there in the course of committing and attempting to commit aggravated rape[.]" Conformably with the statutory definitions of rape and aggravated rape extant in 1976, the trial court authorized the jury to convict should it find appellant killed Bickham in the course of committing or attempting to commit aggravated rape as defined in the jury charge, viz:
"Our law provides that a person commits rape if he intentionally or knowingly has sexual intercourse with a female not his wife without the female's consent.
The intercourse is without the female's consent if he compels her to submit or participate by force that overcomes such earnest resistance as might reasonably be expected under the circumstances; or, if he compels her to submit or participate by any threat communicated by actions, words, or deeds, that would prevent resistance by a woman of ordinary resolution, under the same or similar circumstances, because of a reasonable fear of harm.
A person commits aggravated rape if he commits rape, as defined above, and he:
(a) causes serious bodily injury or attempts to cause death to the victim or another in the course of the same criminal episode; or
(b) compels submission to the rape by threat of death or serious bodily injury to be imminently inflicted on anyone."
See former V.T.C.A. Penal Code, §§ 21.02 & 21.03, prior to amendment of the latter by Acts 1981, 67th Leg., ch. 96, p. 203, § 1, eff. September 1, 1981. "Serious bodily injury" was defined in the charge, consonant with V.T.C.A. Penal Code, § 1.07(34), as "bodily injury that creates a substantial risk of death or that causes death, serious permanent disfigurement, or protracted loss or impairment of the function of any bodily member or organ."[8]
The question is whether the statutory language, reflected in the charge, admits of a prosecution for capital murder on facts that show no more than a simple rape followed by a murder. On its face the statute would seem to demand more, insofar as it requires an intentional murder in the course of an aggravated rape. An argument that a simple rape followed by a murder nevertheless constitutes capital murder can certainly be made. But it seems to me that such an argument could only proceed as follows: To commit capital murder under § 19.03(a)(2), supra, one must "commit murder as defined by Section 19.02(a)(1) of" the Penal Code, which is to say, one must have "cause[d] the death of an individual[.]" Moreover, under § 19.03(a)(2) the killer must have "intentionally commit[ted] the murder[.]" Manifestly, one who has intentionally caused the death of another has also intentionally or knowingly caused "serious bodily injury" under § 1.07(34), supra, since "serious bodily injury" may be "bodily injury ... that causes death." In short, an intentional killing in the course of rape would also qualify, a fortiori, as an aggravated rape.[9] But *264 therein lies the problem. For by this theory every rape followed by a murder will constitute capital murder. The word "aggravated" becomes wholly superfluous. This runs counter to the presumption, honored elsewhere in our capital murder jurisprudence, that in promulgating a statute the Legislature intends its entire enactment to be effective. Heckert v. State, 612 S.W.2d 549, at 552-53 (Tex.Cr.App.1981). See V.T.C.A., Government Code § 311.021(2).
The State cites Barnard v. State, 730 S.W.2d 703 (Tex.Cr.App.1987), for the proposition that conviction for capital murder is appropriate even though the killing might be all that aggravates the rape. See also Fearance v. State, 771 S.W.2d 486 (Tex.Cr. App.1988). In Barnard the State alleged that the killing of the victim was the assaultive conduct which raised simple theft to the level of a robbery. Expressly relying upon Garrett v. State, 573 S.W.2d 543 (Tex.Cr.App.1978), Barnard argued that the State could not be permitted to use the killing both to elevate theft to robbery, under V.T.C.A. Penal Code, § 29.02(a)(1), and to supply the intentional murder. The Court held that Garrett does not support Barnard's argument. Garrett had been indicted and prosecuted for murder under the felony-murder provision in V.T.C.A. Penal Code, § 19.02(a)(3).[10] Under this theory of murder an intentional or knowing killing is not required; intent to commit the underlying felony offense will provide the culpable mental state necessary to convict for murder. The State alleged that Garrett had caused the death of his victim in the course of committing aggravated assault against him. Following "the vast majority of jurisdictions throughout the United States [that hold] that a felonious assault resulting in death cannot be used as the felony which permits application of the felony murder rule to the resulting homicide[,]" 573 S.W.2d at 545, the Court held that intent to commit the aggravated assault could not supply the necessary culpable mental state for murder under § 19.02(a)(3), supra. The Court found a source for this imposition of the so-called "merger doctrine" in the language of the statute itself. Because aggravated assault is a lesser included offense of voluntary manslaughter, and because voluntary manslaughter is expressly excluded under § 19.02(a)(3) as a basis for application of § 19.02(a)(3), supra, the Court held that Garrett could not be prosecuted for murder. "The legislative prohibition against resting a Sec. 19.02(a)(3) prosecution on voluntary manslaughter necessarily includes a prohibition against resting such a prosecution on offenses statutorily includable in voluntary manslaughter. To hold to the contrary would render the statute meaningless and its effect nil." 573 S.W.2d at 546.
Not surprisingly, the Court rejected Garrett as a foundation for relief in Barnard. The Court reasoned:
"V.T.C.A., Penal Code, Section 19.03(a)(2) provides that a person commits capital murder if he commits a murder in the course of committing a robbery. V.T.C.A., Penal Code, Section 19.02(a)(1) provides that murder occurs when a person intentionally or knowingly causes the death of another individual. Unlike the felony murder provision, V.T.C.A., Penal Code, Section 19.02(a)(3), there is no transferred intent from a lesser to a greater offense under our capital murder statute. Rather under the capital murder statute, the commission of robbery is simply one of the circumstances which our legislature deemed to make the murder more deserving of the death penalty."[11]*265 730 S.W.2d at 709. See also Fearance v. State, supra, at 493. In short, Garrett construed § 19.02(a)(3), supra. It does not dictate our construction of § 19.03(a)(2), supra. It is simply inapposite to the question here.
Although he alludes to it by way of analogy, however, appellant does not rely on Garrett. Instead he relies upon ordinary principles of statutory construction, much as I do today. Another circumstance the Legislature deemed sufficient to make an intentional murder susceptible to the death penalty is the commission, not of simple rape, but of aggravated rape. "Every word of a statute is presumed to have been used for a purpose, and a cardinal rule of statutory construction requires that each sentence, clause, phrase and word be given effect if reasonably possible." Morter v. State, 551 S.W.2d 715, at 718 (Tex.Cr.App. 1977), quoting Eddins-Walcher Butane Company v. Calvert, 156 Tex. 587, 591, 298 S.W.2d 93, 96 (1957). See also Polk v. State, 676 S.W.2d 408, at 410 (Tex.Cr.App. 1984); Childress v. State, 784 S.W.2d 361, at 364 (Tex.Cr.App.1990). Cf. Boykin v. State, 818 S.W.2d 782, at 786 (Tex.Cr.App. 1991) (statutes should not be read in such a way as to render a portion "essentially superfluous."). To allow the killing itself to supply "serious bodily injury" so as to elevate rape to aggravated rape for purposes of prosecution for capital murder under § 19.03(a)(2), supra, effectively reads the word "aggravated" out of the statute.[12] It is possible, however, to interpret the requirement of "aggravated" rape in a way which gives purpose to the word. Accordingly, I would hold that in order to convict an accused for capital murder on a theory that he intentionally caused the death of the deceased in the course of committing or attempting to commit aggravated rape, the State must prove either that he caused serious bodily injury apart from the specific conduct that caused the death of the deceased, that by discrete conduct he attempted to cause the death of the deceased, or that he compelled submission to the rape by a threat of death or serious bodily injury to be imminently inflicted on anyone.[13] See former § 21.03, supra.
I therefore agree with the first step of appellant's argument that the State must prove aggravation of the rape by some conduct apart from the killing itself.[14] I *266 turn to the second step of his argument and address whether the evidence here failed to establish any such conduct.
B.
It is almost too elemental to reiterate that serious bodily injury "must be proven by evidence in order to substantiate and support a verdict." Williams v. State, 696 S.W.2d 896, at 898 (Tex.Cr.App.1985). Any evidence of aggravation of the rape apart from the killing itself is wholly circumstantial here. Thus, the evidence must be such as to discount every reasonable alternative hypothesis but that by an act discrete from the killing itself appellant caused serious bodily injury or attempted to cause the death of Bickham, or that he compelled her submission to the rape by threat of death or serious bodily injury to be imminently inflicted on anyone. See Carlsen v. State, 654 S.W.2d 444 (Tex.Cr.App.1983) (Opinion on State's motion for rehearing); Butler v. State, 769 S.W.2d 234 (Tex.Cr.App.1989).[15]
The circumstantial evidence does not show that appellant attempted to kill Bickham or inflicted serious bodily injury to her prior to dragging her unconscious body from the bathhouse and apparently bludgeoning her to death. Although there were signs of struggle both beside the hedge at the end of the bridge and in the bathhouse, no blood was found at either location, or anywhere in between. Nor do we find any other concrete evidence in the record to indicate appellant used force sufficient to cause death or create a substantial risk thereof, or to cause permanent disfigurement or protracted loss or impairment of any bodily member or organ. See § 1.07(34), supra.
Although by his own confession appellant knocked Bickham unconscious, the act of rendering a victim unconscious, by manner and means unknown, is not sufficient evidence of serious bodily injury. Fierro v. State, 626 S.W.2d 597 (Tex.App.-El Paso 1981, pet. ref'd). Cf. Sanchez v. State, 543 S.W.2d 132, at 134 (Tex.Cr.App.1976) (where defendant rendered his victim unconscious and amnesic by some unknown means, "it is highly questionable that the evidence is sufficient to show serious bodily injury to constitute the felony offense charged."). It is conceivable on the evidence that appellant may have blacked Bickham's eyes and/or broken her jaw in the bathhouse or earlier, injuries which would not necessarily have produced a discernible residue of blood. Certainly the defensive wounds, bruises only, on Bickham's hands and forearms indicate she suffered some level of assaultive conduct while she was still conscious. Whether or not inflicted in the bathhouse, however, black eyes, without more, do not establish serious bodily injury. Cf. Pickering v. State, 596 S.W.2d 124, at 128 (Tex.Cr.App. 1980) (bruises and burns do not show serious bodily injury per se). As for the broken jaw, there was no specific testimony about the nature or extent of this injury; no testimony it would have constituted a "protracted" impairment of a bodily member. See Moore v. State, 739 S.W.2d 347, at 352 (Tex.Cr.App.1987) (Plurality opinion).
Moreover, the pathologist could not tell the chronology of Bickham's injuries. It is as consistent with the State's evidence and the evidence as a whole that these injuries were caused during the final, fatal assault as that they occurred earlier. The record provides no substantial basis to prefer either theory. Thus we are left to speculate, and even "accepting the inculpatory circumstances... there is a reasonable hypothesis other than guilt which also would account for the circumstances." Girard v. *267 State, 631 S.W.2d 162, at 164 (Tex.Cr.App. 1982). The State has failed to establish more than a suspicion that appellant caused serious bodily injury or attempted to cause death by conduct discrete from the killing itself. "The law deems such level of proof to be insufficient to support a conviction upon circumstantial evidence." Pickering v. State, supra, at 129.
Nor is there evidence of a threat of death or serious bodily injury which compelled Bickham to submit to the rape. The record contains no indication of an express threat at all.[16] Certainly the bruises on Bickham's hands and forearms tend to show a response to acts or deeds that must have conveyed some level of threat. However, under this Court's construction of § 21.03(a)(2), supra, as that provision read in 1976, "absent an express verbal threat, evidence was sufficient to prove aggravated rape ... only when a gun, knife, or a deadly weapon was used, or serious bodily injury was in fact inflicted." Rucker v. State, 599 S.W.2d 581, at 586 (Tex.Cr.App. 1979). Here there is no evidence that a verbal threat was made, that a weapon was used, or that serious bodily injury was inflicted prior to or during the commission of the rape. Thus I would hold there is a failure of proof of a threat sufficient to show the rape was aggravated. Rucker v. State, supra.[17]
Accordingly we should hold that the evidence is insufficient to establish appellant's guilt for the offense of murder committed in the course of aggravated rape. In keeping with Burks v. United States, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978) and Greene v. Massey, 437 U.S. 19, 98 S.Ct. 2151, 57 L.Ed.2d 15 (1978), we should therefore reverse the judgment of the trial court and remand the cause for entry of a judgment of acquittal. Holding instead that the elements of aggravated rape and of murder may "overlap," op. at 246, the majority does not. I respectfully dissent.
BAIRD, J., joins this opinion.
BAIRD, Judge, dissenting.
Because the majority fails to follow our policy of statutory interpretation established in Boykin v. State, 818 S.W.2d 782 (Tex.Cr.App.1991), I respectfully dissent. See page 245. Judge Clinton is correct; a conviction for capital murder based upon the commission of aggravated rape requires conduct that causes serious bodily injury separate from that which causes the complainant's death. At 248 (Clinton, J., dissenting). For the following reasons, I join Judge Clinton's dissent.
I.
The majority states the general rule of statutory interpretation as follows:
When we interpret any statute, we try "to effectuate the `collective' intent or purpose of the legislators who enacted the legislation." Boykin v. State, 818 S.W.2d 782, 785 (Tex.Cr.App.1991). Normally, we will accomplish this goal simply by focusing our attention on and discerning the objective meaning of the statute's literal text at the time of its enactment. Id. In the majority of situations, this exercise will yield an end result of effectuating the intent of the Legislature by giving effect to the statute's plain language. Id.
*268 Majority opinion at 244. According to the majority, an exception to this general rule occurs when a literal reading of a statute produces "absurd results." Id. at 244. Finding our capital punishment statute "susceptible to two reasonable interpretations," the majority concludes the only reasonable interpretation which fails to produce an absurd result is the prosecution of capital murder for the commission of murder wherein any rape occurred. Id. at 245-246.
In Boykin, we established a policy of statutory interpretation. In the formulation of that policy we stated:
When attempting to discern the collective legislative intent or purpose, we necessarily focus our attention on the literal text of the statute in question and attempt to discern the fair, objective meaning of that text at the time of its enactment. We do this because the text of the statute is the law in the sense that it is the only thing actually adopted by the legislators, probably through compromise, and submitted to the Governor for her signature. We focus on the literal text because the text is the only definitive evidence what the legislators (and perhaps the Governor) had in mind when the statute was enacted into law.
* * * * * *
If the plain language of a statute would lead to absurd results, or if the language is not plain but rather ambiguous, then and only then, out of absolute necessity, is it constitutionally permissible for a court to consider, in arriving at a sensible interpretation, such extra textual factors as executive or administrative interpretations of the statute or legislative history.
Boykin, 818 S.W.2d at 785-786 (emphasis in original).
Therefore, under the policy established in Boykin, we must view the literal text of the statute. If the plain language of the statute is clear and unambiguous, and would not lead to absurd results, we accept the literal text of the statute. However, if we determine the text is ambiguous, or would lead to an absurd result, we consider the legislative history and other interpretations of the statute. Id. At that point, we may turn to Tex.Gov't Code Ann. § 311.023 for assistance.[1]
II.
At the time of the commission of this offense, the relevant portions of Tex.Penal Code Ann. § 19.03 provided:
(a) A person commits an offense if he commits murder as defined under Section 19.02(a)(1) of this code and:
(2) the person intentionally commits the murder in the course of committing or attempting to commit kidnapping, burglary, robbery, aggravated rape, or arson;[2]
The majority finds the literal text of the statute would lead to an "absurd" result if, in the instant case, we were to require the conduct that caused the serious bodily injury be separate from the conduct that caused the complainant's death. The majority sets forth three hypothetical situations wherein they conclude the Legislature must have intended § 19.03 to apply but would not apply if the literal text was followed. Majority opinion at 244-245. However, the majority does not provide any authority for that conclusion, nor is there an analysis of the "executive or administrative *269 interpretations of the statute or legislative history" to determine whether the Legislature intended the capital murder statute to apply to the hypothetical situations created by the majority. Likewise, I have found no authority to support the majority's conclusion.
At the time of the enactment of § 19.03, the penal code provided for the aggravated commission of three of the offenses listed within § 19.03(a)(2): kidnapping and aggravated kidnapping (See, Tex.Penal Code Ann. § 20.03 and § 20.04); robbery and aggravated robbery (See, Tex.Penal Code Ann. § 29.02 and § 29.03); and, rape and aggravated rape (See § 21.02 and § 21.03).[3] Clearly, the Legislature could have required proof of aggravated kidnapping and aggravated robbery but refused to do so. The majority offers no explanation for Legislature's decision to specifically require proof of an aggravated rape to support a conviction of capital murder.
Rather, the majority fails to recognize that § 19.03 was enacted in the wake of Furman v. Georgia, 408 U.S. 238, 92 S.Ct. 2726, 33 L.Ed.2d 346 (1972) (decided in conjunction with Branch v. Texas). Branch was sentenced to death for the offense of rape by force wherein the complainant was not murdered. Branch v. State, 447 S.W.2d 932 (Tex.Cr.App.1969). In Branch, the Supreme Court struck down our previous capital murder statute and mandated a statute that narrowed the class of crimes punishable by death. Branch v. Texas, 408 U.S. at 310-311, 92 S.Ct. at 2763 (White, J., concurring). In light of § 19.03 being enacted the term following Branch, we can only assume the Legislature specifically chose to require proof of aggravated rape in order to limit the number of death eligible offenses. Indeed, § 19.03, although amended by the Legislature in other forms, still requires proof of an aggravated sexual assault.[4] Today the majority, by permitting the imposition of death for the offense of aggravated rape which was not committed in the course of murder as required by § 19.03, thwarts the legislative efforts to narrow the class of crimes punishable by death.
Because the majority abandons our established policy of statutory interpretation, I respectfully dissent. With these comments, I join Judge Clinton's dissent.
NOTES
[1] Appellant was originally tried and convicted for this offense in 1977. This Court affirmed the trial court's judgment and sentence of death. Muniz v. State, 573 S.W.2d 792 (Tex.Cr.App.1978). Subsequently, the Fifth Circuit Court of appeals granted habeas corpus relief and ordered a new trial. Muniz v. Procunier, 760 F.2d 588 (5th Cir.1985). Appellant was retried in 1986 under the original indictment, and again received a sentence of death.
[2] The relevant language from the indictment read that appellant "did then and there intentionally cause the death of an individual, [J__ B__], by hitting and striking her with an object, the description of which is unknown to the Grand Jury; and that said Pedro Cruz Muniz was then and there in the course of committing and attempting to commit aggravated rape, against the peace and dignity of the State."
[3] At the time of appellant's trial, Article 37.071 provided in relevant part:
(b) On conclusion of the presentation of the evidence [at the punishment phase], the court shall submit the following three issues to the jury:
(1) whether the conduct of the defendant that caused the death of the deceased was committed deliberately and with the reasonable expectation that the death of the deceased or another would result;
(2) whether there is a probability that the defendant would commit criminal acts of violence that would constitute a continuing threat to society; and
(3) if raised by the evidence, whether the conduct of the defendant in killing the deceased was unreasonable in response to the provocation, if any, by the deceased.
(c) The state must prove each issue submitted beyond a reasonable doubt, and the jury shall return a special verdict of "yes" or "no" on each issue submitted.
The record reflects that only issues (b)(1) and (b)(2) were submitted to the jury with respect to appellant's conduct in murdering J__ B__.
[4] Unless otherwise indicated, all article references are to the Texas Code of Criminal Procedure.
[5] See footnote one, supra.
[6] The only change in the current version of the penal code section involves the term "aggravated rape," which is now addressed as "aggravated sexual assault." See 1983 Tex.Gen.Laws 5315.
[7] Tex.Penal Code § 22.021 addresses aggravated sexual assault now.
[8] See now Texas Penal Code § 22.01(a)(1).
[9] In this opinion, Miranda refers to Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).
[10] All grammatical and spelling errors contained herein appear in appellant's handwritten statement.
[11] The same judge presided over both trials. At the second trial, the judge took judicial notice of all of the former testimony and proceedings.
[12] This conclusion should not be construed as a requirement that an accused must testify before the jury or call any witnesses before the issue of the voluntariness of a confession will be raised by the evidence. In cases such as this, however, where the overwhelming majority of the appellant's evidence is in the form of leading questions, and the witnesses expressly deny the implications contained in the questions and directly negate any inferences of coercion, no evidence is presented which raises the issue of voluntariness such that the trial court is required to submit a jury instruction pertaining to that issue.
[13] As an example, appellant argues that a defendant's youth may evoke sympathy from the jury, but may also simply be taken by the jury to mean that a defendant "has more time to continue his violent criminal career."
[14] In the former appeal of this case, appellant argued that the jury returned an answer which operated as an implied acquittal concerning capital punishment. This court rejected appellant's argument in 1978 and we find no ground for reconsidering the contention now.
[1] Prior to the 1983 amendment, § 19.03(a)(2) read:
"(a) A person commits an offense if he commits murder as defined under Section 19.02(a)(1) of this Code and:
* * * * * *
(2) the person intentionally commits the murder in the course of committing or attempting to commit kidnapping, burglary, robbery, aggravated rape, or arson[.]"
[2] A diagram of the area showing the location of these items was admitted into evidence, but is not included in the appellate record.
[3] One officer testified, "And you could tell that the thing was freshly done because of the way you could tell by the way it was done." He later testified that he considered the marks to be fresh because they were similar to the footprints the police themselves made on the dirty bathhouse floor. Judging solely from the xeroxed copies of photographs that were introduced into evidence showing the inside of the bathhouse, it is not apparent that a scuffle took place at all, much less a recent one.
[4] Again, because the diagram is not in the appellate record, we cannot be sure of the precise location of these blood drops in relation to the body of the deceased or the spot where "a lot of blood" was found.
[5] The blood type on the T-shirt appellant later surrendered to police was his, not the deceased's. There is some intimation that this was not, however, the shirt he wore during the offense.
[6] Again, although this time there is an aerial photograph in the appellate record, the witness's allusion is utterly ambiguous on a cold record:
"Q.... Show the direction from which Pete Muniz came.
A. From this way, that way (indicating)."
[7] This is my best guess at appellant's spelling of this word. His handwriting at this point is practically indecipherable. In reading appellant's statement to the jury, the prosecutor interpreted the word to be "unconscious." In context, that seems the most likely interpretation.
[8] All emphasis supplied unless otherwise indicated.
[9] This is the very argument the State made in Alexander v. State, 740 S.W.2d 749, at 760 (Tex. Cr.App.1987). The State also made the alternative argument in that cause that the evidence was sufficient to convict even assuming that aggravation of the rape apart from the killing itself was necessary. Without specifically embracing either of the State's arguments, the Court in Alexander merely observed that "[t]he jury is the trier of the facts," and summarily held the evidence sufficient. Thus, notwithstanding West's headnote number 2, see 740 S.W.2d at 750, it is not at all clear that Alexander held that "[e]vidence of sexual intercourse and of serious bodily injury causing death was sufficient to support jury finding that murder was committed in course of committing or attempting to commit aggravated rape, so as to elevate intentional murder to capital murder."
[10] This provision reads:
"(a) A person commits an offense if he:
* * * * * *
(3) commits or attempts to commit a felony, other than voluntary or involuntary manslaughter, and in the course of and in furtherance of the commission or attempt, or in immediate flight from the commission or attempt, he commits or attempts to commit an act clearly dangerous to human life that causes the death of an individual."
[11] Emphasis in the original.
[12] Even assuming that the rape victim and the murder victim are separate individuals, the word "aggravated" would nevertheless be superfluous. Under § 21.03(a)(1), supra, a rape may be aggravated where the defendant "causes serious bodily injury or attempts to cause death to the victim or another in the course of the same criminal episode[.]" A defendant who, in the course of committing an otherwise simple rape against one victim, intentionally causes the death of "another," has a fortiori committed aggravated rape of the first victim by virtue of having killed the second. Thus, every rape followed by an intentional murder, even the murder of "another," will result in a prosecution for capital murder, and the word "aggravated" still serves no purpose. Accordingly, although I agree with the ultimate disposition in Crawford v. State, 632 S.W.2d 800 (Tex.App.-Houston [14th] 1982, pet. ref'd), I cannot endorse its rationale.
[13] Because it is necessary that the threat compel submission to the rape, see former § 21.03(a)(2), supra, any theory of prosecution proceeding upon a threat of death or serious bodily injury must show a threat occurring before or contemporaneous with the rape. See Rucker v. State, 599 S.W.2d 581, at 582 (Tex.Cr.App.1979) (panel opinion on original submission); Church v. State, 552 S.W.2d 138, at 140 (Tex.Cr.App. 1977). Unless we are to hold that a dead body can be raped, see Gribble v. State, 808 S.W.2d 65, at 72, n. 16 (Tex.Cr.App.1990), it must also, perforce, precede the killing.
[14] The majority contends that this construction of the statute must be rejected because it leads to "absurd results." As I understand the argument, because of difficulties of proof, the State will obtain fewer convictions for capital murder, and will have to settle in many instances for separate convictions for the offenses of rape and murder. Op. at 244-245. That a particular construction may yield fewer convictions, however, hardly seems a basis to conclude it is absurd. Indeed, to give our capital murder statute its strictest interpretation would seem to be in keeping with the Eighth Amendment requirement that states narrowly circumscribe the class of death-eligible defendants. E.g., McCleskey v. Kemp, 481 U.S. 279, at 305, 107 S.Ct. 1756, at 1774, 95 L.Ed.2d 262, at 287 (1987). That a majority finds the narrow construction distasteful does not, except by fiat, make it absurd.
Moreover, the majority cites Barnard v. State, supra, and Wooldridge v. State, 653 S.W.2d 811 (Tex.Cr.App.1983), as authority for its construction of the statute. But the argument made in Barnard was quite different than that made here. As I said in the text, ante at 247, Barnard is inapposite. And in Wooldridge the evidence clearly demonstrated that serious bodily injury occurred well before the conduct that caused the death. 653 S.W.2d at 816, n. 9. To quote our belief that "this is the very conduct the Legislature sought to proscribe as a capital offense" while ignoring the footnote, and then champion this revisionist view of Wooldridge as support for its construction today is, to be kind, disingenuous.
[15] Our recent abandonment of the Carlsen/Butler "analytical construct" in Geesa v. State, 820 S.W.2d 154 (Tex.Cr.App.1991), was expressly made applicable only to cases tried after issuance of mandate in that cause.
[16] In Harrison v. State, 686 S.W.2d 220, at 222 (Tex.App.-Houston [1st] 1984, pet. ref'd), it was held that threatening to "knock out" a victim was sufficient to "place [her] in fear of serious bodily injury" under § 21.03, supra, as it read after the 1981 amendment. See Acts 1981, 67th Leg., ch. 96, p. 203, § 1, eff. September 1, 1981. Here there is no evidence of a verbal threat to knock Bickham out.
[17] The opinion on rehearing in Rucker carried only a plurality of the Court, and drew a vigorous dissent from the instant writer. Nevertheless, the holding in Rucker was followed in Holder v. State, 643 S.W.2d 718 (Tex.Cr.App. 1983). Although Holder was a panel opinion, with one judge dissenting, the Court later denied rehearing en banc. § 21.03 was amended in 1981, see Acts 1981, 67th Leg., ch. 96, p. 203, § 1, eff. September 1, 1981, the effect being to legislatively "remove Rucker from the jurisprudence of the State." Richardson v. State, 753 S.W.2d 759, at 765 (Tex.App.-Dallas 1988, no pet.). It was the version of § 21.03 in effect when Rucker was decided, however, that applies in the instant case.
[1] Although the majority does not cite Tex.Gov't Code Ann. § 311.023, use of this provision is appropriate when the statute under consideration is ambiguous or would lead to an absurd result. Boykin, 818 S.W.2d at 786. § 311.023 provides:
In construing a statute, whether or not the statute is considered ambiguous on its face, a court may consider among other matters the:
(1) object sought to be attained;
(2) circumstances under which the statute was enacted;
(3) legislative history;
(4) common law or former statutory provisions, including laws on the same or similar subjects;
(5) consequences of a particular construction;
(6) administrative construction of the statute; and
(7) title (caption), preamble, and emergency provision.
[2] All emphasis herein is supplied by the author unless otherwise indicated.
[3] Appellant was charged with committing this offense on December 20, 1976 and was originally tried and convicted in 1977. Therefore, all references to the Penal Code herein will be to the code as it existed at that time.
[4] It should be noted the Legislature effectively expanded the class of death eligible offenses in 1983 and 1987 by amending our statutes related to aggravated rape, renaming the offense "aggravated sexual assault." Acts 1983, 68th Leg., p. 5312, ch. 977, § 3, eff. Sept. 1, 1983; Acts 1987, 70th Leg., ch. 573, § 1, eff. Sept. 1, 1987; and, Acts 1987, 70th Leg., 2nd C.S., ch. 16, § 1, eff. Sept. 1, 1987. Therefore, the instant offense could be properly prosecuted as a capital murder had it occurred after September 1, 1983. However, those amendments are not retroactive. Lindsey v. State, 672 S.W.2d 892 (Tex.App.-Dallas 1984). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2262511/ | 900 F.Supp. 803 (1995)
Grace WILSON, Plaintiff,
v.
SOUTHERN NATIONAL BANK OF NORTH CAROLINA, INC., Defendant.
No. 3:93-CV-274-P.
United States District Court, W.D. North Carolina, Charlotte Division.
March 9, 1995.
*804 *805 Shelly Blum, Charlotte, NC, Ronald L. Chapman, Murphy & Chapman, Charlotte, NC, for plaintiff.
Philip M. Van Hoy, Van Hoy, Reutlinger, & Taylor, Charlotte, NC, for defendant.
MEMORANDUM OF DECISION and ORDER
ROBERT D. POTTER, Senior District Judge.
THIS MATTER is before the Court on cross motions for summary judgment.
Procedural History
On August 20, 1993, the Plaintiff filed a complaint asserting the Defendant is liable for 1). sexual harassment in violation of Title VII, 2). retaliation in violation of Title VII, and 3). intentional infliction of emotional distress.
On January 13, 1995, the Defendant filed a motion for summary judgment, along with a supporting memorandum and depositions.
On February 7, 1995, the Plaintiff moved for an extension of time to respond. Although the Plaintiff's motion was not in compliance with the standard Pretrial Order filed in this case, the motion was granted and the Plaintiff was given until February 17, 1995, to respond. Counsel for the Plaintiff was *806 admonished that all further filings must be in compliance with the Pretrial Order.
On February 21, 1995, the Plaintiff filed a memorandum in support of motion for summary judgment and in opposition to the Defendant's motion. This memorandum was unaccompanied by a motion. Further, although the memorandum contains multiple references to various depositions, the Plaintiff did not file a single deposition.
On February 23, 1995 a full five days after the February 17, 1995 deadline imposed by the Court the Plaintiff filed a motion for summary judgment but no depositions.
The Defendant, after being granted an extension, filed a reply on March 7, 1995.
SUMMARY JUDGMENT STANDARD
Federal Rule of Civil Procedure 56(c) provides,
... judgment ... shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c) (West 1993).
Summary judgment must be granted when there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Id., Barwick v. Celotex Corp., 736 F.2d 946, 958 (4th Cir.1984). To attain summary judgment, the movant bears an initial burden of demonstrating no genuine issues of material fact are present. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-moving party who must point out specific facts which create disputed factual issues. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986), Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). The non-moving party may not rest on "mere allegations or denials," but must set forth specific facts "by affidavits or as otherwise provided in [Rule 56]." Federal Rule of Civil Procedure 56(e). In evaluating a summary judgment motion, district courts must consider the evidence in the light most favorable to the non-moving party and draw all reasonable inferences from those facts in favor of the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). Those facts which the moving party bears the burden of proving are facts which are material. "[T]he substantive law will identify which facts are material. Only disputes over facts which might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.
An issue of material fact is genuine when, "the evidence ... create[s] [a] fair doubt; wholly speculative assertions will not suffice. A trial, after all, is not an entitlement. It exists to resolve what reasonable minds could recognize as real factual disputes." Ross v. Communications Satellite Corp., 759 F.2d 355, 364 (4th Cir.1985). Thus, summary judgment is appropriate only where no material facts are genuinely disputed and the evidence from the entire record could not lead a rational fact finder to rule for the non-moving party. Matsushita Electric Industrial Co., 475 U.S. at 587, 106 S.Ct. at 1356. Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).
Facts
The Plaintiff in this case was a female employee of the Defendant bank from March 13, 1991, to June 17, 1993. The Plaintiff alleges that while she was employed at the Defendant bank, she was sexually harassed by a male co-worker in her department, which created a "hostile work environment." The Plaintiff further alleges that when she reported some of the alleged harassing incidents to her supervisors, her co-workers retaliated. The Plaintiff contends that the Defendant bank should be liable for the alleged harassment and retaliation. The Plaintiff also contends that the harassment and retaliation amounted to intentional infliction of emotional distress.
Most of the facts material to this case are genuinely disputed. The Plaintiff and the Defendant have substantially differing accounts as to what occurred in the workplace. Nevertheless, if the Court accepts the Plaintiff's *807 version of the facts as true, the Defendant is entitled to summary judgment as a matter of law. The Court will proceed with its analysis gleaning the Plaintiff's version of the facts from the portions of her deposition which were submitted by the Defendant.[1] As for any material fact not addressed in the Plaintiff's deposition, the Court will look to the unopposed depositions filed by the Defendant.
A). The Hand-On-Hip and Rubber Band Incidents.
The Plaintiff alleges that in October or November of 1991, a co-worker in her department Eric Wright put his hand on the Plaintiff's hip, licked his lips, and said: "umm.. I'd like to have some of that." (Wilson Depo. at 13-14.) The Plaintiff turned around and said to Wright: "don't do that.... keep your hands off of me." (Wilson Depo. at 17.) Wright then threw his hands up in a surrendering motion and said: "oh, oh, oh." (Wilson Depo. at 17-18.) This alleged incident occurred in the work place. (Wilson Depo. at 14.) Later that day, the Plaintiff told Wright that she did not "want anyone, guys or, you know, anyone putting their hands on [her] hips," that she "just [does not] play like that," and asked him "please don't ever do that again." (Wilson Depo. at 18.) Wright responded: "okay, okay, okay." (Wilson Depo. at 18.) The Plaintiff did not report this incident to a supervisor at the time. (Wilson Depo. at 19.) Wright never did this to her again. (Wilson Depo. at 36.)
Later in the week, Wright shot the Plaintiff in the hip with as many as three rubber bands. (Wilson Depo. at 19.) The Plaintiff returned fire. (Wilson Depo. at 19.) Other workers, all female, also shot rubber bands. (Wilson Depo. at 21-22.)
About a week after the hand-on-hip incident, the Plaintiff complained about the hand-on-hip and rubber band incidents to her department supervisor, Richard Burch. (Wilson Depo. at 25.) Burch, within four days of the Plaintiff's complaint, wrote a memo and held a meeting (with Wright present) where he told the department that the bank is a workplace and he wanted everyone to stop "cutting up" at work. (Wilson Depo. at 25; Complaint at 2.) The Plaintiff alleges no subsequent rubber band shooting or hand-on-hip incidents.
B). The Hiked Pants, Dirty Cartoons, and "Older Women" Incidents
The Plaintiff alleges that, after the meeting with Burch, Wright would "yank up his pants as high as he could get them so that [the outline of] his genitals would show and then he would get in front of your face." (Wilson Depo. at 26.) However, the Plaintiff makes inconsistent claims about how many times this occurred. In her complaint she alleges this occurred on "several occasions." (Complaint at 2.) In her deposition she alleges it occurred "25 to 30 times." (Wilson Depo. at 35.) The Plaintiff would "turn away and ... say `Eric, please don't do that.'" (Wilson Depo. at 35.) The Plaintiff never reported this to any member of management. (Wilson Depo. at 28.)
The Plaintiff also alleges that, after the meeting with Burch, some of her co-workers would show her "dirty cartoons." Wright brought in one of these cartoons, but a majority of them were brought in by Van Ervin a female co-worker. (Wilson Depo. at 28, 33.) The department, both male and female, was generally "laughing and joking" about the cartoons. (Wilson Depo. at 32.) When Wright showed the Plaintiff a cartoon, the Plaintiff turned away. (Wilson Depo. at 26.) When Tish Jones a female co-worker showed the Plaintiff a cartoon, the Plaintiff said she did not want to see it. (Wilson Depo. at 28.) Burch was shown a cartoon and appeared to think it was funny. (Wilson Depo. at 32.) The Plaintiff never complained to management about the cartoons. (Wilson Depo. at 32.)
The Plaintiff alleges that Wright, who is half the Plaintiff's age, told the Plaintiff on two occasions he "preferred older women." (Wilson Depo. at 40.) Both times this occurred, Wright was telling the Plaintiff about how his girlfriend was young and very interested in getting married and having a baby. *808 (Wilson Depo. at 39-40.) The Plaintiff never complained about this to management. (Wilson Depo. at 40.)
C). The Clipboard Incident
The Plaintiff alleges that on June 22, 1992, Wright "finished a session of holding up his pants, ..." while singing a song that is played on the radio "about hips and butts and things like that." (Wilson Depo. at 47-48, 54.) Then, as the Plaintiff was leaning over an office machine that had jammed, Wright "wacked" her in the hip with a clipboard. (Wilson Depo. at 48.) The "wack" "felt like bee stings" and the Plaintiff was "stunned," "fell into the machine," "saw stars" and "had tears running from [her] eyes." (Wilson Depo. at 48.) Other coworkers, mostly women were present. (Wilson Depo. at 49.) The Plaintiff "could hear people laughing." (Wilson Depo. at 48.)
The Plaintiff did not seek medical attention until about a week later, but even then, did not actually see a doctor because she did not have a worker's compensation report and did not want to pay the doctor herself. (Wilson Depo. at 51, 56.) The Plaintiff ultimately saw a doctor six or seven weeks after the clipboard incident. (Wilson Depo. at 55.)
When the clipboard incident originally occurred, the Plaintiff did not report it to management because "[Burch] was out of town." (Wilson Depo. at 60.) The Plaintiff subsequently reported the incident to Burch. (Wilson Depo. at 61.) The Plaintiff tried three times to relate the incident to Burch's supervisor Sheila Ezell but was unable to contact her. (Wilson Depo. at 61.) On the recommendation of Burch, the Plaintiff told Renita Barton, who works as an Affirmative Action Coordinator in the Defendant's Personnel Department, that "[she] had been hit [and she] had a bruise on [her] hip." (Wilson Depo. at 61.) Barton asked if she wanted to file a worker's compensation claim, but the Plaintiff declined at that time. (Wilson Depo. at 61.) Burch took Eric Wright into his office and told him that "in no circumstances should [he] ever touch another employee, and that there certainly shouldn't be any hitting of another employee" and "actions of that sort at some point could lead to him losing his job."[2] (Burch Depo. at 62-63.) Burch does not remember the exact date of this reprimand, but does remember it being when Personnel first became aware of the clipboard incident. (Burch Depo. at 63.)
After the clipboard incident, the Plaintiff felt that Tish Jones (a female co-worker) and Eric Wright were teasing her because she complained to management. In response to the Plaintiff's concerns, Burch transferred the Plaintiff to another department where she worked in a separate room with only one other person. (Wilson Depo. at 65.) The Plaintiff also received a raise as a result of this transfer. (Wilson Depo. at 68.) The Plaintiff was "overjoyed" and "really appreciated" the transfer. (Wilson Depo. at 65, 68.)
After the Defendant's transfer, Jones "would come to the door, shut the door behind her and ask [the Plaintiff] what [she] was doing" and why she would not talk to Wright or Jones. Jones would also "get closer and closer to" the Plaintiff until the Plaintiff "would get up, open the door and leave." (Wilson Depo. at 66.) Wright would "do the same thing" and would sometimes "come and lean over top [sic] of [the Plaintiff]." (Wilson Depo. at 66.) Burch told Jones and Wright not to go into the room where the Plaintiff was working and to leave her alone. (Wilson Depo. at 66.) Subsequently, Wright only entered the room one more time for a business purpose not to harass. (Wilson Depo. at 66.) Jones continued to enter the room, but Burch "physically opened the door and pulled [Jones] out and told her in her face don't come in here any more bothering ..." (Wilson Depo. at 66.)
At some point Burch told the Plaintiff that she was too slow and needed to pick up the pace of her work. (Wilson Depo. at 66.) The Plaintiff admits that she was not keeping up with her work. (Wilson Depo. at 76.) The Plaintiff missed 26-28 scheduled work *809 days in the one and a half to two years she worked for the Defendant. (Wilson Depo. at 127.) The Plaintiff resigned from her position by giving two weeks notice. The Plaintiff does not say why she resigned. The first week of her notice she spent on vacation. (Wilson Depo. at 89.) When she returned for her second and final week, the Plaintiff took a sick day, but ran into another employee of the Defendant when she was out shopping. (Wilson Depo. at 127.) The Plaintiff was fired, but was paid for the second week. (Wilson Depo. at 89.)
Analysis
1). Sexual Harassment
The Supreme Court first recognized Title VII's prohibition against "hostile environment" sexual harassment in Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). "For sexual harassment to be actionable, it must be sufficiently severe or pervasive `to alter the conditions of [the victim's] employment and create an abusive working environment'" Id. (Quoting Henson v. Dundee, 682 F.2d 897 (1982) (alteration in original)). "To prove a hostile work environment claim under Title VII, the plaintiff must show (1) that the conduct in question was unwelcome, (2) that the harassment was based on sex, (3) that the harassment was sufficiently severe or pervasive to create an abusive working environment, and (4) that some basis exists for imputing liability to the employer." Paroline v. Unisys Corp., 879 F.2d 100, 105 (4th Cir.1989) (citing Swentek v. USAIR, Inc., 830 F.2d 552, 557 (1987)). In evaluating the case at bar, the Court must determine if the facts alleged by the Plaintiff satisfy each of these four elements.
First, with the possible exception of the rubber band incident, it is undeniable that the conduct complained of was "unwelcome." When Wright put his hand on the Plaintiff's hip, she responded "don't do that.... keep your hands off of me." (Wilson Depo. at 17.) When the Plaintiff was shown a cartoon or when Wright hiked his pants, the Plaintiff would "turn away." The clipboard incident caused the Plaintiff physical pain. Accordingly, the Court finds that the Plaintiff has met the first element.
Second, the alleged conduct could reasonably be found to have been based on sex. The hand on hip, hiked pants, and cartoon incidents, if they occurred as alleged by the Plaintiff, clearly have sexual overtones. Moreover, the older women, rubber band, and clipboard incidents, especially when looked at as being committed by a male and as occurring along with the hand on hip, hiked pants, and cartoon incidents, could reasonably be seen as based on sex. In short, a reasonable fact finder could find that the alleged behavior is based on sex. Accordingly, the Plaintiff has met the second element for summary judgment purposes.
Third, the alleged conduct could reasonably be found to be severe or pervasive. "Whether ... [the alleged conduct] is sufficiently severe or pervasive is quintessentially a question of fact. Summary judgment [is] inappropriate unless, accepting [the Plaintiff's] evidence as true and drawing all justifiable inferences in her favor, a fact finder could not reasonably conclude [the conduct] was so severe or pervasive as to create an abusive work environment." Paroline v. Unisys Corp., 879 F.2d 100, 105 (4th Cir. 1989). Moreover, the severity and pervasiveness are in an inverse ratio. Ellison v. Brady, 924 F.2d 872 (9th Cir.1991). That is, the more severe the conduct, the less pervasive it need be to be actionable. Conversely, the more pervasive the conduct, the less severe it need be to be actionable. In the case at bar, the alleged conduct is more than an isolated incident (therefore possibly pervasive) and involved physical contact (therefore possibly severe). Hence, a reasonable fact finder could find that the alleged conduct is sufficiently "severe or pervasive" to be actionable. The Plaintiff has satisfied the third element for summary judgment purposes.
Fourth, no basis exists for holding the Defendant bank liable for any harassment committed by its employees. The alleged harassment was not committed by a supervisor, but by a fellow employee Eric Wright. "In a hostile environment claim such as we have here, an employer is liable for one employee's sexual harassment of another worker if the employer had `actual or *810 constructive knowledge of the existence of a sexually hostile working environment and took no prompt and adequate remedial action.'" Id. at 106 (quoting Katz v. Dole, 709 F.2d 251, 255 (4th Cir.1983)).
By the Plaintiff's own testimony, the Defendant never had actual knowledge of the hiked pants, the cartoons,[3] or the "older women" incidents because she did not complain about them to her supervisors. Accordingly, the Defendant had no actual knowledge of any hostile work environment which may have arisen out of the incidents the Plaintiff failed to complain about. Further, these incidents were not so pervasive or obvious as to give the Defendant constructive knowledge.
The only incidents the Plaintiff complained to management about that could create a hostile environment were the hand-on-hip, rubber band, and clipboard incidents. Accordingly, the Defendant had actual knowledge of any hostile work environment which may have arisen out of the hand on hip, rubber band, and clipboard incidents.
However, when the Defendant learned of these incidents, it did not "`acquiesce in a practice of sexual harassment." Katz v. Dole, 709 F.2d 251, 254 (4th Cir.1983) (quoting Garber v. Saxon Business Products, Inc., 552 F.2d 1032 (4th Cir.1977). Instead, the Defendant took prompt remedial action that was "reasonably calculated to end the harassment." Id. at 256. By the Plaintiff's own account, her complaint to Burch about the hand on hip (which the Plaintiff waited a week to complain about) and rubber band incidents precipitated within four days a meeting with the department and a memo. Although holding a meeting and issuing a memo are not the most forceful remedial actions, it is unquestionably an appropriate first response to behavior that was initially relatively mild and isolated. In fact, there were no more hand-on-hip or rubber band incidents. No reasonable fact finder could find that the Defendant did not take prompt remedial action which was reasonably calculated to end the rubber band and hand-on-hip type of behavior that the Plaintiff complained of.
As for the clipboard incident, the Plaintiff did not report it right away, but instead waited for Burch to come back from out of town. Then, after about a week, the incident was referred to the Personnel department. At the direction of Personnel, Burch took Eric Wright into his office[4] and told him that "in no circumstances should [he] ever touch another employee, and that there certainly shouldn't be any hitting of another employee" and "actions of that sort at some point could lead to him losing his job."[5] (Burch Depo. at 62-63.) Burch does not remember the exact date of this reprimand, but does remember that it was when Personnel first became aware of the clipboard incident (i.e. about a week after the incident). Further, the Plaintiff was ultimately separated from her alleged harasser when she was transferred to another department. This transfer was welcomed by the Plaintiff and even included a raise. When Wright continued to bother the Plaintiff in a non-sexual manner in her new work area, he was told to stay out of her new work area and leave her alone. Wright did not bother the Plaintiff again. In sum, all the evidence submitted in this case shows that the Defendant did not just sit on its hands when the Plaintiff complained. Instead, the Defendant attempted to remedy the situation by reprimanding Eric Wright individually, and ultimately by separating him from the Plaintiff. The Defendant clearly took prompt remedial action reasonably calculated to end the alleged harassment.
*811 Therefore, the Plaintiff is unable to establish that the Defendant is liable for any hostile work environment which may have been created by the actions of a co-worker, and her sexual harassment claim fails. Summary judgment will be granted for the Defendant on this issue.
Retaliation
Title VII prohibits an employer from discriminating against an employee in retaliation for that employee's opposition to, or complaint about, an unlawful employment practice. 42 U.S.C. § 2000e-3. In her complaint, the Plaintiff alleges that the Defendant retaliated against her in violation of title VII because:
"[t]he conduct of the Defendant's employees in responding to the complaint of sexual harassment was demeaning, disrespectful, emotionally destructive to the Plaintiff and was deliberately done in retaliation for the very report of the conduct by the Plaintiff."
(Complaint at 4.) The Plaintiff amended her complaint to include an allegation that:
[a]s part of its retaliation to the Plaintiff's charges of sexual harassment and employment discrimination, defendant [sic] was subjected to a working atmosphere which ratified and continued the harassment she reported. Defendant failed to protect her from further harassment. Plaintiff was compelled to resign to attempt to protect her own well being.
(Amended Complaint at 1-2.) The Court, however, finds this claim meritless.
Preliminarily, the Court notes that the actual existence of an unlawful employment practice (sexual harassment) is not necessary for the Plaintiff to prevail on a Title VII retaliation claim, so long as the Plaintiff reasonably believed that the Defendant was engaged in an unlawful employment practice. See, e.g., Payne v. McLemore's Wholesale & Retail Stores, 654 F.2d 1130 (5th Cir.1981) (cert. denied 455 U.S. 1000 (1982)). Therefore, the Court's grant of the Defendant's summary judgment motion on the claim of sexual harassment is not in itself fatal to the Plaintiff's claim of retaliation.
For the Plaintiff to prevail on a claim of retaliation, she must show that 1). the employee engaged in protected activity; 2). the employer took adverse employment action against the employee; and 3). a causal connection existed between the protected activity and the adverse action. Ross v. Communications Satellite Corp., 759 F.2d 355 (1985). In the case at bar, the Plaintiff clearly engaged in protected activity by complaining to management about Wright's actions. However, the Defendant did not take adverse employment action against the Plaintiff. The Plaintiff contends that the Defendant's alleged failure to protect the Plaintiff from retaliatory teasing and badgering by Wright and Jones satisfies the adverse employment action element of the retaliation claim. However, as noted above, the Defendant did not fail to protect the Plaintiff, but instead took prompt remedial action reasonably calculated to end the alleged retaliatory harassment by Wright and Jones. Therefore, the Plaintiff cannot establish the second element of her retaliation claim and summary judgment must be entered in favor of the Defendant on this issue.
Finally, the Court notes that the Plaintiff only complains of retaliation by the Plaintiff's co-workers. The Plaintiff does not complain that management took any direct retaliatory action against her such as her transfer or her discharge. Therefore, this issue is not properly before the Court. Nevertheless, the Defendant has submitted ample uncontradicted evidence showing that the Plaintiff's transfer was not retaliation, but was welcomed by the Plaintiff and accompanied by a pay raise, and that the Plaintiff's discharge was not in retaliation, but for good cause.
Intentional Infliction of Emotional Distress
To prevail on a claim of intentional infliction of emotional distress, the Plaintiff must show 1). that the Defendant engaged in extreme and outrageous conduct; 2). that the conduct was intended to cause severe emotional distress; and 3). that the conduct does in fact cause severe emotional distress. Waddle v. Sparks, 331 N.C. 73, 414 S.E.2d 22 (1992). "It is extremely rare to find conduct in the employment context that *812 will rise to the level of outrageousness necessary to provide a basis for recovery for the tort of intentional infliction of emotional distress." Cox v. Keystone Carbon, 861 F.2d 390 (3rd Cir.1988). In the case at bar, the Plaintiff has not alleged facts sufficient to support an intentional infliction of emotional distress claim. Moreover, the Defendant has submitted ample uncontested evidence showing that the Plaintiff cannot establish even one of the elements. This is a frivolous claim and summary judgment must be entered for the Defendant on this issue.
NOW, THEREFORE, IT IS ORDERED that the Defendant's motion for summary judgment be, and hereby is, GRANTED.
IT IS FURTHER ORDERED that the Plaintiff's motion for summary judgment be, and hereby is, DENIED.
This action will be dismissed in a separate Judgment filed simultaneously with this Order.
NOTES
[1] The Court again notes that the Plaintiff submitted no supporting depositions.
[2] This testimony comes from Burch's deposition, which was submitted by the Defendant. The Plaintiff does not in her deposition affirm or deny that Burch reprimanded Wright in this manner. In fact, the Plaintiff has not submitted any evidence that disputes Burch's account of the reprimand. Accordingly, that Burch so reprimanded Wright is an undisputed material fact.
[3] The Court notes that Burch did see these cartoons, that he remembers them depicting "two people joking comments back and forth to each other," and that he does not "really remember anything obscene." (Burch Depo. at 8.) However, even assuming the cartoons were in fact offensive, there is no evidence that Burch knew these cartoons were actually or more than likely shown to the Plaintiff or that he knew the Plaintiff was offended.
[4] Burch likewise reprimanded Jones, who apparently was also involved in the clipboard incident.
[5] This testimony comes from Burch's deposition, which was submitted by the Defendant. The Plaintiff does not in her deposition affirm or deny that Burch reprimanded Wright in this manner. In fact, the Plaintiff has not submitted any evidence that disputes Burch's account of the reprimand. Accordingly, that Burch so reprimanded Wright is an undisputed material fact. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1608619/ | 973 F.Supp. 372 (1997)
Engin YESIL, Petitioner,
v.
Janet RENO, Attorney General, et al., Respondents.
No. 96 Civ. 8409(DC).
United States District Court, S.D. New York.
July 14, 1997.
*373 Michael P. DiRaimondo, Marialaina L. Masi, New York City and Thomas E. Moseley, Newark, NJ, for Petitioner.
Mary Jo White, U.S. Atty. for Southern District of New York by James A. O'Brien III, Sp. Asst. U.S. Atty., Diogenes P. Kekatos, Pierre M. Gentin, Asst. U.S. Attys., New York City, for Respondents.
Lucas Guttentag, Lee Gelernt, Laura L. Ho, New York City, for Amicus Curiae American Civil Liberties Union Foundation, Immigrants' Rights Project.
Helaine Barnett, Scott Rosenberg, New York City and Manuel D. Varas, New York City, for Amicus Curiae Legal Aid Society of New York City.
*374 OPINION
CHIN, District Judge.
On February 27, 1997, I issued an opinion in this case granting Engin Yesil's petition for a writ of habeas corpus. Yesil v. Reno, 958 F.Supp. 828 (S.D.N.Y.1997). I held that sections 401(e) and 440(a) of the Antiterrorism and Effective Death Penalty Act of 1996 (the "AEDPA") did not deprive the district courts of habeas corpus jurisdiction to review final orders of deportation of aliens in custody in violation of the Constitution or laws of the United States. I granted the petition because I concluded that the Board of Immigration Appeals (the "BIA") had erred in holding that Yesil was ineligible to be considered for a waiver of deportation under section 212(c) of the Immigration and Nationality Act, as amended (the "INA"), 8 U.S.C. § 1182(c), because he had not been a lawful permanent resident for seven years at the time he applied.
On March 10, 1997, the Government moved for reconsideration of my opinion based on a decision of the Attorney General of the United States issued on February 21, 1997. Matter of Soriano, slip op. (Atty.Gen. Feb. 21, 1997). Reversing an en banc decision of the Board of Immigration Appeals (the "BIA"), Interim Decision No. 3289, 1996 WL 426888 (BIA June 27, 1996), the Attorney General held in Soriano that section 440(d) of the AEDPA applies to applications for section 212(c) relief submitted prior to April 24, 1996, the effective date of the AEDPA. Section 440(d), as amended by section 306(d) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Pub.L. No. 104-208 (the "IIRIRA"), renders ineligible for section 212(c) relief aliens convicted of certain crimes, including aggravated felonies.
The Government argues in essence that the issues addressed in my February 27, 1997 opinion are irrelevant and that, in accordance with the Attorney General's decision in Soriano, Yesil as a convicted aggravated felon is ineligible under section 440(d) for section 212(c) relief, no matter how many years he has been a lawful permanent resident, no matter how many consecutive years he has been a lawful domicile. The Government takes this position even though section 440(d) did not become law until more than two years after deportation proceedings had been commenced against Yesil, and even though Yesil would have been considered for section 212(c) relief before the AEDPA took effect had the Immigration Judge (the "IJ") and BIA not erroneously declared him ineligible on other grounds during the deportation proceedings. The Government argues that because section 440(d) renders Yesil statutorily ineligible for section 212(c) relief, Yesil cannot show a "threat of a fundamental miscarriage of justice" entitling him to habeas corpus relief.
In its reply memorandum, the Government further argues in a display of sheer arrogance that even if I were to deny its present motion for reconsideration, the Immigration and Naturalization Service ("INS") could nonetheless proceed to deport Yesil on grounds that the Government has yet to raise. Even though the Government has moved for reconsideration on the basis of Soriano, the Government suggests in its reply memorandum that all of the issues now before me would be academic if I were to reject its arguments because "regardless of the Attorney General's decision in Soriano" INS could simply terminate the instant deportation proceedings and "reinitiate removal proceedings" against Yesil pursuant to section 309(c)(3) of the IIRIRA. (Govt. Reply Mem. at 28). Hence, the Government is suggesting that it is holding in reserve yet another card, a card that it will play if its present motion for reconsideration is denied.
The Government's arguments are rejected. Yesil has shown a "threat of a fundamental miscarriage of justice," and I hold that section 440(d) of the AEDPA may not be lawfully applied to applications for section 212(c) relief pending when the AEDPA was signed into law. Moreover, the Government may not circumvent my rulings by now relying on section 440(d), even if it may be applied to pending cases generally, or section 309 of the IIRIRA or any other newly enacted provision of law. Yesil is entitled to a hearing on the merits on his section 212(c) application. Accordingly, the motion for reconsideration is denied in all respects.
*375 BACKGROUND
A. Facts and Procedural History
The facts and procedural history are set forth in detail in my February 27, 1997 opinion and will not be repeated here.
In my February 27th opinion, I held that this Court had personal jurisdiction over the district director of INS in Louisiana, that the abuse of writ doctrine was not a bar to Yesil's seeking relief in these proceedings, that sections 401(e) and 440(a) of the AEDPA did not deprive the district courts of subject matter jurisdiction to entertain challenges to final deportation orders brought by petitions for writ of habeas corpus pursuant to 28 U.S.C. § 2241, and that the IJ and BIA had erred in holding that Yesil was not eligible to be considered for section 212(c) relief because he had not been a lawful permanent resident for seven years. In the latter respect, I held that Yesil was eligible to be considered because he had been lawfully domiciled in the United States for seven continuous years and was a lawful permanent resident at the time of his application.
The issues raised by the present motion for reconsideration were not reached in my February 27th opinion because, as the Government stated at page 43, footnote 15 of its January 30, 1997 memorandum of law in opposition to the petition, the Attorney General was still then "considering whether to apply AEDPA § 440(d) to 212(c) applications filed before April 24, 1996."
The Attorney General decided that question when she issued her opinion in Soriano on February 21, 1997, six days prior to the issuance of my opinion in this case. The United States Attorney's Office for the Southern District of New York, however, did not learn of the Attorney General's decision until March 3, 1997. The Government filed the instant motion for reconsideration on March 10, 1997.
B. Section 440(d)
The AEDPA was signed into law by the President on April 24, 1996. Section 440(d) of the AEDPA amended section 212(c) of the INA, a long-standing "humane provision" of law that gave lawful permanent residents the right to seek relief if they became subject to deportation because they were convicted of a crime. Lok v. INS, 548 F.2d 37, 39 (2d Cir.1977). In applying for a section 212(c) waiver, a lawful permanent resident could point to factors such as ties to the United States, the effect of deportation on the individual's family, proof of rehabilitation, service to the community, and other evidence of good character.
Section 440(d) sharply limited section 212(c) by barring relief for individuals who were deportable because they had committed certain categories of offenses,[1] including: (1) an aggravated felony; (2) a controlled substance violation; (3) a firearm offense; (4) one of various miscellaneous crimes; or (5) two or more crimes involving "moral turpitude." Hence, lawful permanent residents *376 convicted of one of these offenses were no longer eligible for section 212(c) relief, no matter how many years they had been lawfully domiciled in this country.[2]
Section 440(d) is silent as to whether it applied to pending cases. INS took the position, however, that section 440(d) applied to all deportation cases pending when the AEDPA took effect, as well as, of course, to deportation cases subsequently commenced. This set the stage for the resolution of the issue in Matter of Soriano.
C. Soriano
1. The BIA's Decision
Bartolome Jhonny Soriano arrived in the United States as a lawful permanent resident in March 1985. In May 1992, he was convicted of attempted criminal sale of a controlled substance. On the basis of that conviction, INS commenced deportation proceedings against him. During the course of the proceedings, Soriano applied for section 212(c) relief. In October 1995 the IJ found that Soriano was eligible for section 212(c) relief, but denied the application in the exercise of his discretion.
Soriano appealed to the BIA. Thereafter, while the appeal was pending, the AEDPA became law. Although Soriano had been eligible for section 212(c) relief when he requested the waiver, under section 440(d) he would no longer be eligible because his conviction fell within one of the categories covered by section 440(d). INS took the position before the BIA that section 440(d) applied to pending applications and thus it argued that Soriano was barred from seeking section 212(c) relief.
The six-member majority disagreed. First it concluded, however, that Congress did not expressly provide for an effective date for section 440(d). Matter of Soriano, Interim Decision No. 3289, 1996 WL 426888 (BIA June 27, 1996) (hereafter cited as "Int. Dec."). Because Congress had expressly provided for a delayed effective date for other provisions of the AEDPA, the majority held that Congress had intended that section 440(d) be applied immediately upon enactment of the AEDPA, including as a general matter to aliens already in deportation proceedings at the time. (Int. Dec. at 4-5).
The next question addressed by the majority was whether section 440(d) applied to aliens already in deportation proceedings who had applications for section 212(c) relief pending on April 24, 1996. The majority determined that Congress had not intended for section 440(d) to apply to pending applications. The majority relied on the fact that section 413 of the AEDPA, which barred alien terrorists from seeking most forms of relief from deportation, expressly provided that it applied to "applications filed before, on, or after" the effective date of the AEDPA, so long as "final action" had not been taken. AEDPA § 413(g). The majority concluded that the presence of this language in section 413(g) together with the absence of comparable language in section 440(d) showed that Congress had not intended for section 440(d) to apply to applications filed before the AEDPA was enacted. (Int. Dec. at 6-7).
The majority also drew support from the Supreme Court's admonition in Landgraf v. USI Film Products, 511 U.S. 244, 265, 114 S.Ct. 1483, 1497, 128 L.Ed.2d 229 (1994), that "settled expectations should not be lightly disrupted." The majority held that "[b]y applying section 440(d) of the AEDPA to only those applications for section 212(c) relief filed on or after the date of enactment of the AEDPA, the unique expectations of aliens whose applications for section 212(c) *377 relief were pending prior to the enactment of the AEDPA are not disrupted." (Int. Dec. at 7). The majority concluded that these aliens had the "expectation that although they were deportable under various provisions of the [INA], they would be able to present evidence of favorable social and humane considerations that might countervail evidence of their undesirability as lawful permanent residents." (Id.).
Finally, on the merits of the appeal, the majority concluded that the IJ had properly exercised his discretion in denying Soriano's application for section 212(c) relief. (Int. Dec. at 8-9).
One member of the BIA concurred in part and dissented in part. Board Member Lory D. Rosenberg concurred in the majority's holding that section 440(d) was not applicable to pending applications for section 212(c) relief. She dissented, however, from the majority's conclusion that section 440(d) could otherwise be applied to deportation proceedings commenced before April 24, 1996, where the alien had not yet applied for section 212(c) relief. (Int. Dec. at 10, 12, 20).
The five dissenting members disagreed with the majority's conclusion that section 440(d) applied to pending applications. The dissent was of the view that a section 212(c) application is an "ongoing application" and that an applicant for such relief had to qualify under the law in existence "at the time the application is finally considered." (Int. Dec. at 22). The dissent also concluded that "[l]ike injunctive relief, relief from deportation under section 212(c) of the [INA] is prospective in nature." (Id. at 23). Hence, the dissent was of the view that section 440(d) did not operate "retroactively." (Id. at 22-23). The dissent also held that "applying the amended section 212(c) provisions to pending applications does not offend any of the concerns underlying the retroactive operation of new statutes." (Id. at 23).
2. The Attorney General's Decision
The Commissioner of INS referred the Soriano decision to the Attorney General for review pursuant to 8 C.F.R. § 3.1(h)(iii). On September 12, 1996, the Attorney General issued an order vacating the BIA's decision in Soriano and accepting the matter for review. On February 21, 1997, the Attorney General issued her decision, reversing the BIA and holding that section 440(d) was to be applied to section 212(c) applications pending on April 24, 1996. Matter of Soriano, slip op. (Atty.Gen. Feb. 21, 1997) (hereafter cited as "Atty. Gen. Dec.").
The Attorney General decision began its analysis with a discussion of Landgraf. As to the threshold question of whether Congress had "expressly prescribed the statute's proper reach," Landgraf, 511 U.S. at 280, 114 S.Ct. at 1505, the Attorney General wrote:
nothing in the language of the newly enacted statute, AEDPA § 440(d), specifies either that it is to be applied in pending deportation proceedings, or that it is not to be.
(Atty. Gen. Dec. at 3). The Attorney General's decision does not analyze any of the text of the AEDPA or its legislative history.
The Attorney General then proceeded to discuss whether "the statute would be given retroactive effect if applied in pending deportation proceedings." (Atty. Gen. Dec. at 3). The Attorney General concluded that it would not, because "[t]he relief sought in a section 212(c) application ... is prospective in nature." (Id. at 5). The Attorney General expressed her view that section 440(d), by eliminating her discretion to grant relief in certain cases, merely had the effect of removing jurisdiction. (Id.). Because a section 212(c) waiver was "purely discretionary relief from the immigration consequences of a prior criminal conviction," the Attorney General stated that it could not be properly characterized as a "substantive right." (Id. at 5-6). Hence, the Attorney General concluded that because section 440(d) merely altered jurisdiction and limited the availability of "future relief," it should be applied to pending applications for section 212(c) relief. (Id. at 5). Finally, to address the concern that certain aliens might have conceded deportability before the AEDPA was passed in reliance on the availability of section 212(c) relief, the Attorney General held that aliens with a colorable defense to deportability could petition *378 to reopen cases for the limited purpose of contesting deportability. (Id. at 8).
DISCUSSION
A. Applicable Legal Standards
In Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994), the Supreme Court reiterated the long-standing principle that laws generally should not be given retroactive effect, as it confirmed that "the presumption against retroactive legislation is deeply rooted in our jurisprudence, and embodies a legal doctrine centuries older than our Republic." Id. at 265, 114 S.Ct. at 1497. At the same time, the Court acknowledged the "apparent tension" between the axiom that "`[r]etroactivity is not favored'" and the rule that "`a court is to apply the law in effect at the time it renders its decision.'" Id. at 264, 114 S.Ct. at 1496 (quoting Bradley v. School Bd. of City of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974), and Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208, 109 S.Ct. 468, 471-72, 102 L.Ed.2d 493 (1988)).
Landgraf and other Supreme Court decisions suggest a three-step analysis for determining whether a newly enacted statute is to be applied to a pending case. First, the court "is to determine whether Congress has expressly prescribed the statute's proper reach." 511 U.S. at 280, 114 S.Ct. at 1505. If so, the inquiry need proceed no further and the court need not "resort to judicial default rules." Id.
Second, if "the statute contains no such express command, the court must determine whether the new statute would have retroactive effect." Id. The court does so by "ask[ing] whether the new provision attaches new legal consequences to events completed before its enactment," id. at 269-70, 114 S.Ct. at 1499, and by examining "whether [the statute] would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed." Id. at 280, 114 S.Ct. at 1505. In making this inquiry, "familiar considerations of fair notice, reasonable reliance, and settled expectations offer sound guidance." Id. at 270, 114 S.Ct. at 1499. If the statute would operate "retroactively" under this analysis, then "our traditional presumption teaches that it does not govern absent clear congressional intent favoring such a result." Id.
Third, if a new statute does not have new legal consequences that have a "genuinely `retroactive' effect," a presumption arises in favor of applying the new law to pending matters; that presumption, however, may be overcome if applying the new law "would result in manifest injustice or there is statutory direction or legislative history to the contrary.'" Landgraf, 511 U.S. at 277, 114 S.Ct. at 1503 (quoting Bradley, 416 U.S. at 711, 94 S.Ct. at 2016).
The Court in Landgraf also emphasized that in considering whether a new law should be applied to pending matters, a court should keep in mind that "application of new statutes passed after the events in suit is unquestionably proper in many situations." Id. at 273, 114 S.Ct. at 1501. Indeed, when the new statute "authorizes or affects the propriety of prospective relief," its application is "not retroactive." Id. Likewise, statutes "conferring or ousting jurisdiction" that "`speak to the power of the court rather than to the rights or obligations of the parties'" generally do not raise concerns about retroactivity. Id. at 274, 114 S.Ct. at 1501-02 (quoting Republic Nat'l Bank of Miami v. United States, 506 U.S. 80, 99, 113 S.Ct. 554, 565, 121 L.Ed.2d 474 (1992) (Thomas, J., concurring)). Finally, "[c]hanges in procedural rules may often be applied in suits arising before their enactment" without violating the principle against retroactivity. Id. at 275, 114 S.Ct. at 1502. In reviewing these permissible applications of new laws to pending cases, however, the Supreme Court reaffirmed "the traditional presumption against applying statutes affecting substantive rights, liabilities, or duties to conduct arising before their enactment." Id. at 278, 114 S.Ct. at 1504.
Judge Weinstein recently applied Landgraf to the precise question of whether section 440(d) applies to applications for section *379 212(c) relief pending when the AEDPA became law. In Mojica v. Reno, Nos. 97 CV 1085, 97 CV 1869(JBW), 1997 WL 357808 (E.D.N.Y. June 24, 1997), Judge Weinstein held that section 440(d) may not be applied to pending cases.[3]
For the reasons set forth in Judge Weinstein's thorough and scholarly opinion, and for the reasons set forth below, I likewise hold that section 440(d) may not be applied to applications for section 212(c) relief pending when the AEDPA was signed into law.[4] First, the text of the AEDPA and its legislative history demonstrate that Congress did not intend for section 440(d) to apply to pending cases. Second, under the "judicial default" rules, section 440(d) would have retroactive effect, for it does attach new legal consequences to completed events and it disrupts the settled expectations of long-time lawful permanent residents. Third, even assuming section 440(d) does not have retroactive effect, it would be manifestly unjust to apply section 440(d) to Yesil, for his section 212(c) application would have been considered on the merits prior to the passage of the AEDPA had the IJ and the BIA not ignored well-settled Second Circuit law. Finally, the Government's argument that the Attorney General's decision is entitled to great deference is simply not persuasive.
B. Congressional Intent
In trying to ascertain whether Congress intended for section 440(d) to apply to pending cases, we must look first at the text of the AEDPA and then at its legislative history. In her decision, the Attorney General did not discuss the language of the statute, other than to conclude in one sentence that "nothing in the language of the newly enacted statute, AEDPA § 440(d), specifies either that it is to be applied in pending deportation proceedings, or that it is not to be." (Atty. Gen. Dec. at 3). The decision fails to discuss the legislative history of the AEDPA at all.
1. The Text
Although the Attorney General correctly observes that section 440(d) contains no language addressing its applicability to pending cases, other provisions of the AEDPA do provide guidance. Most notably is section 413, entitled "Denial of Other Relief for Alien Terrorists," which eliminates certain relief from deportation for alien terrorists. Subsection (g), entitled "Effective Date," provides:
The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to applications filed before, on, or after such date if final action has not been taken on them before such date.
AEDPA § 413(g), 110 Stat. 1269 (emphasis added). Hence, when Congress wanted the provisions of section 413 to apply to an alien terrorist whose application for relief from deportation had been filed "before" the effective date of the AEDPA, it said so explicitly.
Section 440(d) is similar to section 413 in that it also limits the ability of an alien convicted of certain crimes to obtain relief from deportation. Although, as section 413(g) demonstrates, Congress obviously knew how to make explicit its desire to apply provisions of the new law to pending cases, it chose not to do so with respect to section 440(d).
Congress also expressly elected to make section 401, which enacted new alien terrorist removal procedures, applicable to prior conduct and events. Section 401(f) expressly provides that section 401 "shall take effect on the date of enactment of this Act and shall apply to all aliens without regard to the date of entry or attempted entry into the United States." AEDPA § 401(f), 110 Stat. 1268. Congress also made several other provisions *380 applicable to proceedings initiated on or after the date of enactment, thus clearly providing that the proceedings could be based on conduct or events occurring before the AEDPA took effect. See, e.g., AEDPA §§ 421(b), 435(b), 440(f), 441(b), 110 Stat. 1270, 1275, 1278, 1279. See Mojica v. Reno, Nos. 97 CV 1085, 1869(JBW), 1997 WL 357808, at *45-46 (E.D.N.Y. June 24, 1997). Yet, Congress included no comparable or similar language in section 440(d).
The Supreme Court's most recent discussion of the principles to be applied in determining the retroactive effect of new statutes is instructive, particularly since it concerned the very statute before us the AEDPA. In Lindh v. Murphy, ___ U.S. ___, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997), the Court was confronted with the issue of whether the amendments to Chapter 153 of Title 28 of the United States Code, enacted by sections 101 to 106 of the AEDPA, applied to cases pending when the AEDPA was enacted. The Court held that they did not, largely because section 107(c) of the AEDPA, which created a new set of rules for habeas corpus proceedings in capital cases (Chapter 154 of Title 28), expressly provided that "Chapter 154 ... shall apply to cases pending on or after the date of enactment." AEDPA § 107(c), 110 Stat. 1226. The Court held:
We read this provision of § 107(c), expressly applying chapter 154 to all cases pending at enactment, as indicating implicitly that the amendments to chapter 153 were assumed and meant to apply to the general run of habeas cases only when those cases had been filed after the date of the [AEDPA].
___ U.S. at ___, 117 S.Ct. at 2063 (emphasis added). The Court concluded:
We hold that the negative implication of § 107(c) is that the new provisions of chapter 153 generally apply only to cases filed after the [AEDPA] became effective.
Id. at ___, 117 S.Ct. at 2068.
Here, the "negative implication" of sections 401(f), 413(g), 421(b), 435(b), 440(f), and 441(b) is that section 440(d) applies only to applications filed after the AEDPA became effective. If Congress had intended for section 440(d) to apply to pending applications, it is reasonable to assume that Congress would have expressly provided for section 440(d) to apply to pending applications. Moreover, the AEDPA was enacted just two years after the Supreme Court decided Landgraf. Hence, it is reasonable to assume that Congress was well aware of the teachings of Landgraf including its admonition that Congress should be explicit when it intended a new law to apply to pending cases when it elected not to explicitly make section 440(d) applicable to pending cases. See Lindh, ___ U.S. at ___-___, 117 S.Ct. at 2063-64 (Congress "could have taken" Landgraf as "counseling the wisdom of being explicit if it wanted [the new section 2254(d) ] to be applied to cases already pending").
The Government contends that the negative implication argument is "meritless," pointing out in its reply brief that certain provisions of the AEDPA mandate only prospective application. (Govt. Reply Mem. at 6) (citing AEDPA sections). The Government's suggestion that the negative implication argument is "meritless" is simply wrong, as Lindh makes clear. Indeed, in its reply brief, which was filed before the Supreme Court decided Lindh, the Government relies on the Seventh Circuit's decision reversed by the Supreme Court in Lindh. Lindh v. Murphy, 96 F.3d 856 (7th Cir.1996), rev'd, ___ U.S. ___, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997). Moreover, the Government's argument ignores the deep-rooted tradition against retroactivity that the Court reaffirmed, once again, in Lindh in discussing the very statute at issue here the AEDPA. See also Hughes Aircraft Co. v. United States ex rel. Schumer, ___ U.S. ___, ___-___, 117 S.Ct. 1871, 1874-75, 138 L.Ed.2d 135 (1997) (also reaffirming the "`presumption against retroactive legislation [that] is deeply rooted in our jurisprudence'") (quoting Landgraf).
In sum, the text of the AEDPA demonstrates Congress's clear intent that section 440(d) not be applied to pending cases.
2. The Legislative History
To the extent that any doubt remains after an analysis of the text of the AEDPA, *381 that doubt is eliminated by an examination of its legislative history, which shows that Congress specifically considered but ultimately rejected a provision that would have made section 440(d) applicable to pending cases.
On May 25, 1995, one month after the Oklahoma City bombing, Senators Dole and Hatch introduced S. 735, the "Comprehensive Terrorism Prevention Act of 1995." The Act contained a number of provisions relating to immigration, including what would eventually become section 440(d). See 141 Cong. Rec. at S. 7559 (daily ed. May 25, 1995). Section 303(f) of that Act provided that "amendments made by this section shall ... apply to cases pending before, on or after" the date of enactment. Id. at S. 7863 (daily ed. June 7, 1995). Thus, the Senate's version of section 440(d) explicitly provided that it would apply to pending cases.
The House of Representatives adopted its own anti-terrorist legislation H.R. 2703 in response to the Oklahoma City bombing. The House's version of section 440(d) also limited section 212(c) relief but it did not contain language making the section applicable to cases pending before its enactment. See 142 Cong. Rec. at H. 2295 (daily ed. March 14, 1996). Moreover, when the House considered the Senate's bill, the House insisted that its language limiting section 212(c) relief be substituted for the Senate's version and requested a conference on the point.
Thus, two competing versions of legislation limiting section 212(c) relief went to conference one fully applicable to pending applications for section 212(c) relief, and the other containing no such provision. What emerged from conference, and what was ultimately passed as section 440(d) of the AEDPA, however, was a version of the bill that did not contain the Senate's explicit language of retroactivity. Although other changes were made to the Senate's version and other compromises were struck, the retroactivity language was considered and rejected.
Taken together, the text of the AEDPA and its legislative history demonstrate unequivocally that Congress did not intend for section 440(d) to be applied to pending cases.
C. Retroactive Effect
Under Landgraf, the inquiry need proceed no further, as Congress's intent is clear. Nonetheless, application of the "judicial default" rules only confirms that section 440(d) does have "retroactive effect" and that it may not be applied to pending cases. See generally Mojica, 1997 WL 357808, at *46-54.
Section 440(d) has retroactive effect. It attaches new legal consequences to events completed before its enactment, and it impairs important rights possessed by aliens at the time they acted and significantly increases their liability for that past conduct.
Prior to the passage of section 440(d), aliens who became deportable for committing certain crimes knew that there existed the possibility that if they mended their ways and turned over a new leaf, they might be able to obtain relief from deportation. Aliens who were, or with the passage of time would become, eligible for section 212(c) relief knew that if they could rehabilitate themselves, they would have the opportunity to seek relief from the harsh consequences of deportation.[5] Section 212(c) offered these individuals a concrete mechanism for obtaining relief; indeed, statistics submitted by The Legal Aid Society, as amicus curiae, show that in the six-year period from FY 1989 through FY 1994, section 212(c) applications were granted more often than they were denied.[6] Hence, section 212(c) offered these individuals a very real incentive to become productive members of society. Now, despite whatever efforts they might have made in reliance on the availability of *382 section 212(c) relief, despite whatever "expectations" they might have had, the possibility of obtaining relief from deportation would be foreclosed completely if the Government's interpretation of section 440(d) is accepted.
The availability of relief from deportation even the possibility thereof is a critical factor to an alien who is considering whether to enter into a guilty plea. See United States v. Del Rosario, 902 F.2d 55, 61 (D.C.Cir.1990) (Mikva, J., concurring) ("The possibility of being deported can be and frequently is the most important factor in a criminal defendant's decision how to plead ...."), cert. denied, 498 U.S. 942, 111 S.Ct. 352, 112 L.Ed.2d 316 (1990); Mojica, 1997 WL 357808, at *49 ("For a non-citizen, the choice to forego trial and plead guilty is often critically dependent on information regarding possible immigration consequences."). An alien who decided to plead guilty to a crime that rendered him deportable might very well have done so with the expectation that if he rehabilitated himself and showed that he was deserving of a second chance, he would have the opportunity to seek relief from deportation by way of a section 212(c) application. On the other hand, if he had known that there was no possibility of relief from deportation, if he had known that it was a certainty that he would be banished from this country and separated from his family and friends, he might very well have come to a different conclusion.[7]
In Soriano, the Attorney General concluded that applying section 440(d) to pending cases would not have "retroactive effect" because section 212(c) relief is "purely discretionary relief" and not "a substantive right," and that section 440(d) is jurisdictional and prospective in nature. These arguments are rejected.
A right to discretionary relief is still a substantive right, and the elimination of even the possibility of obtaining relief thus has a retroactive effect. See Warden, Lewisburg Penitentiary v. Marrero, 417 U.S. 653, 663, 94 S.Ct. 2532, 2538, 41 L.Ed.2d 383 (1974) (indicating that a statute taking away parole eligibility for offenses for which parole was available under the law in existence at the time the offenses were committed could be found to be constitutionally impermissible as an ex post facto law); Lindsey v. Washington, 301 U.S. 397, 401, 57 S.Ct. 797, 799, 81 L.Ed. 1182 (1937) (holding that a statute changing a maximum sentence to a mandatory sentence for offense committed prior to statute's enactment is an impermissible ex post facto law); see Hincapie-Nieto v. INS, 92 F.3d 27, 30 n. 2 (2d Cir.1996) (in dictum, stating: "We express no view as to the permissibly retrospective application of Section 440(d), which eliminates what is arguably a substantive right, albeit a right only to discretionary relief."). The simple fact is that many cases that would have resulted in a waiver of deportation before April 24, 1996 would have a different outcome under section 440(d) certain deportation. Surely this is a substantive change.
Nor is section 440(d) merely jurisdictional in nature, and the Attorney General's argument to that effect is meritless. In this context, a jurisdictional change is one that changes the forum, or jurisdiction, for obtaining relief. A change that eliminates the only forum for obtaining the relief, that eliminates eligibility for obtaining the relief all together, cannot be merely jurisdictional. See Landgraf, 511 U.S. at 274, 114 S.Ct. at 1501-02 ("Application of a new jurisdictional rule usually `takes away no substantive right but simply changes the tribunal that is to hear the case.'") (quoting Hallowell v. Commons, 239 U.S. 506, 508, 36 S.Ct. 202, 203, 60 L.Ed. 409 (1916)); accord Hughes Aircraft Co., ___ U.S. at ___-___, 117 S.Ct. at 1878-79 (jurisdictional statutes "merely address[] which court shall have jurisdiction," and "[s]uch statutes affect only where a suit may be brought, not whether it may be brought at all").
*383 The Attorney General also concluded that because section 212(c) relief is "prospective in nature" and deportation is akin to an injunction, application of section 440(d) to pending cases is permitted under Landgraf. (Atty. Gen. Dec. at 5). The reference in Landgraf to injunctive relief, however, was to injunctive relief "in futuro," such as an ongoing injunction restraining unions from picketing. 511 U.S. at 273-74, 114 S.Ct. at 1501-02. This case is different. Section 440(d) does not affect injunctive relief with respect to future activity; to the contrary, it would alter the "legal consequences" of actions taken by Yesil some ten years ago.
Under the Attorney General's reasoning, any law that affects relief would act prospectively only, as the relief whether an injunction or damages or relief from deportation would be imposed or awarded in the future. This interpretation cannot be correct, as Landgraf itself demonstrates. Landgraf involved compensatory and punitive damages under the Civil Rights Act of 1991 to be awarded in the future. Yet, the Court held that the new law could not be applied to pending cases because it acted retroactively. 511 U.S. at 281-82, 114 S.Ct. at 1505-06.
Finally, as the inquiry here is essentially one of fairness, it is important to consider, from the Government's point of view, the rationale for applying section 440(d) to pending cases. In her decision, however, the Attorney General identified no such purpose; indeed, she made no effort to explain the purpose to be served by construing section 440(d) to apply to pending cases. Mojica, 1997 WL 357808, at *42-44. Nor does the Government now, on its motion for reconsideration, identify the purpose to be served by applying section 440(d) to pending cases, other than to state in a footnote in its reply brief that "insofar as the Government clearly has a legitimate interest in protecting society from criminal aliens, section 440(d) is a plainly rational means of furthering that interest." (Govt. Reply Mem. at 11 n. 2). While that general statement is true as far as it goes, it does not purport to articulate any rational basis for applying retrospectively a provision of law that cuts off an alien's ability to show that he or she has reformed and eliminates his or her incentive to do so. On the other hand, as discussed above, there are compelling reasons not to apply section 440(d) to pending cases. Hence, application of the judicial default rules enunciated in Landgraf shows that section 440(d) has retroactive effect.
D. Manifest Injustice
Even assuming section 440(d) does not have retroactive effect and that it should be applied to pending cases in general, it would be manifestly unjust to apply section 440(d) to Yesil. When the BIA issued its final order of deportation in March 1995, Yesil was eligible for section 212(c) relief under well-settled Second Circuit law. Yet, the IJ and BIA erroneously held that he was not. If they had applied the law properly, Yesil's section 212(c) application would have been considered on the merits before the AEDPA became law on April 24, 1996 or certainly before the Attorney General issued her decision on February 21, 1997 holding that section 440(d) should be applied to pending cases. Hence, fairness requires that Yesil be returned to the position he would have been in had the law properly been applied by the IJ and BIA. If my initial decision is affirmed, regardless of the applicability of section 440(d) to pending cases as a general matter, fairness requires that Yesil's application be considered on the merits as it should have been in 1995.
E. Deference
Finally, the Government contends that this Court's review of the Attorney General's decision must be limited by the deference courts owe to administrative tribunals in their interpretations of statutory law. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 2782-83, 81 L.Ed.2d 694 (1984); see Scheidemann v. INS, 83 F.3d 1517, 1523 (3d Cir.1996). While I agree with the proposition that administrative agencies should be accorded deference in their interpretation of statutes they are charged with implementing, that proposition has no bearing on the issue at hand.
*384 The Attorney General's opinion in this matter involved no "statutory interpretation." The Attorney General did not analyze the text of the AEDPA or discuss its legislative history in deciding that section 440(d) should apply to pending section 212(c) applications. Indeed, the Attorney General came to the conclusion that "nothing in the language of ... § 440(d) specifies that it is to be applied in pending deportation proceedings, or that it is not to be." (Atty. Gen. Dec. at 3).
Instead, the Attorney General purported to apply judicially created default rules. Rather than interpret the statute, the Attorney General simply applied or interpreted Supreme Court case law. The Attorney General is not in a better position than this Court, however, to apply judicial default rules. Accordingly, the deference normally accorded to agency interpretation of statutes is wholly inappropriate in this case. See Mojica, 1997 WL 357808, at *55-57; Vargas v. INS, 938 F.2d 358, 363 (2d Cir.1991) (administrative agency decision not involving statutory interpretation, but instead involving post-hoc rationalizations of prior decisions, cannot command Chevron deference); Akins v. Federal Election Comm'n, 101 F.3d 731, 740 (D.C.Cir.1996) (rejecting Chevron deference for agency interpretation of Supreme Court ruling).
CONCLUSION
In my February 27th opinion, I commented on the "inexplicable fervor" with which the Government seemed to be proceeding against Yesil. I rejected the Government's arguments, accepted Yesil's, and granted the petition. Rather than simply take an appeal, the Government moved for reconsideration, arguing that a statute that did not become law until April 1996 should be applied to Yesil even though the only reason his section 212(c) application was not considered prior to the passage of the new law was that the IJ and BIA erroneously declared him ineligible in 1995. Moreover, even as it was moving for reconsideration on the basis of section 440(d), the Government announced that if its motion for reconsideration were denied and its arguments with respect to section 440(d) rejected, it could regardless of this Court's rulings proceed on yet another basis (section 309 of the IIRIRA) to deport Yesil.
The Government's mean-spirited relentlessness is difficult to comprehend, in view of the equities of the case.
From the Government's point of view, what is at stake is nothing more than giving Yesil a hearing, an opportunity to say "I deserve another chance," an opportunity to present evidence to an Immigration Judge who will fairly examine the circumstances and decide whether Yesil is in fact deserving of a second chance. The Government has not identified any compelling public interest that would be undermined by giving Yesil this simple chance to be heard.
On the other hand, from Yesil's point of view, much more is at stake. If he is not given an opportunity to be heard on his section 212(c) application, he will be exiled. He will be banished from what has become his country and home and he will be separated from his family and friends. He will be deported back to a country that he left some 18 years ago, when he was only 16 years old. And the efforts that he has made since he committed his crime in 1987 acknowledging his mistake, pleading guilty, cooperating with law enforcement authorities, risking his life to infiltrate a drug ring, providing leads to a number of arrests and the confiscation of drugs, establishing two legitimate businesses employing hundreds of people, and otherwise becoming a productive and positive member of society will be swept aside, for no rational purpose and to no apparent end.
The law, the facts, and the equities all point to one result: Motion denied.
On remand, the Government is ordered to provide Yesil a hearing on his section 212(c) application and to consider the application on its merits. The Government may not use section 440(d) of the AEDPA or section 309 of the IIRIRA or any other newly-enacted provision of law to deport him, and the Government is hereby enjoined from doing so.
SO ORDERED.
NOTES
[1] Section 440(d) amended section 212(c) to read as follows:
Aliens lawfully admitted for permanent residence who temporarily proceeded abroad voluntarily and not under an order of deportation, and who are returning to a lawful unrelinquished domicile of seven consecutive years, may be admitted in the discretion of the Attorney General. ... Nothing contained in this subsection shall limit the authority of the Attorney General to exercise the discretion invested in [her] under section 211(b). This section shall not apply to an alien who is deportable by reason of having committed any criminal offense covered in section 241(a)(2)(A)(iii), (B), (C), or (D), or any offense covered by section 241(a)(2)(A)(ii) for which both predicate offenses are, without regard to the date of their commission, otherwise covered by section 241(a)(2)(A)(i).
INA § 212(c), as amended by AEDPA § 440(d), as further amended by IIRIRA § 306(d) (emphasis added). The underscored language replaced language disqualifying from section 212(c) relief aliens convicted of aggravated felonies for which they had served a term of imprisonment of at least five years. The boldfaced language was added by section 306(d) of the IIRIRA in what was labelled a "technical amendment." Pub.L. 104-208, Div. C, 110 Stat. 3009-612(Sept. 30, 1996).
Section 212(c) was repealed, effective April 1, 1997, by section 304(b) of the IIRIRA. The IIRIRA replaced section 212(c) relief with a new form of relief for lawful permanent residents, called Cancellation of Removal, designated section 240A(a) of the INA. See IIRIRA § 304(a)(3).
[2] Under these provisions, "a legal permanent resident convicted of one minor drug possession charge, or two misdemeanor petty theft or public transportation fare evasion charges turnstile jumping in the New York City subway system leading to a `theft of services' misdemeanor conviction is considered a crime of `moral turpitude' is now subject to automatic deportation without any opportunity to [apply for section 212(c) relief]." Mojica v. Reno, Nos. 97 CV 1085, 97 CV 1869(JBW), 1997 WL 357808, at *3 (E.D.N.Y. June 24, 1997).
On July 3, 1997, Judge Weinstein issued an amended opinion amending and superseding his June 24, 1997 opinion. The July 3, 1997 opinion is not yet available on-line. The Court has been advised, however, that the changes are entirely nonsubstantive in nature and thus it will rely on the June 24, 1997 version.
[3] Cf. Buitrago-Cuesta v. INS, 7 F.3d 291, 294-95 (2d Cir.1993) (holding that section 511(a) of the Immigration Act of 1990, which amended section 212(c) to eliminate eligibility for aliens convicted of aggravated felonies who served at least five years in prison, applied retroactively, because "plain language of the statute indicates a congressional intent that § 511 apply retroactively," and in view of fact that failure to apply section 511(a) retroactively would yield absurd result that the provision would not take effect until three or five years after its enactment).
[4] Accordingly, I do not reach plaintiff's equal protection argument.
[5] The Government's assertion that Yesil could not have had a "vested right" or "settled expectation" in section 212(c) relief for these purposes when he pled guilty in August 1990 (Govt. Mem. at 11) is rejected. Yesil certainly could have expected then that if he acknowledged his mistakes, pled guilty, cooperated with the Government to help atone for his crimes, and became a law-abiding and productive member of society, he could seek section 212(c) relief once he was lawfully domiciled for seven continuous years.
[6] Of the approximately 20,000 applications during that time frame, some 8400 were granted and some 8100 were denied. The remainder fell into an "Others" category. (Legal Aid Mem., Exh. F).
[7] See Mojica, 1997 WL 357808, at *51 ("The importance of immigration consequences of pleas in criminal cases cannot be underestimated. Deportation to a country where a legal permanent resident of the United States has not lived since childhood; or where the immigrant has no family or means of support; or where he or she would be permanently separated from a spouse, children and other loved ones, is surely a consequence of serious proportions that any immigrant would want to consider in entering a plea."). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1971238/ | 110 B.R. 341 (1990)
In re Donald Ray GADLEN and Brenda Joyce Gadlen, Debtors.
Bankruptcy No. 89-11209-B.
United States Bankruptcy Court, W.D. Tennessee, E.D.
February 1, 1990.
*342 David H. Jones, Memphis, Tenn., for Leader Federal Bank for Sav.
Lloyd A. Utley, Jackson, Tenn., for debtors.
Ernie H. Gray, Jackson, Tenn., George Stevenson, and George Emerson, Memphis, Tenn., Chapter 13 Trustees.
MEMORANDUM OPINION AND ORDER ON DEBTORS' MOTION TO INCLUDE HOME MORTGAGE, ON LEADER FEDERAL'S MOTION TO DISMISS OR OBTAIN RELIEF FROM THE AUTOMATIC STAY AND ON LEADER FEDERAL'S OBJECTION TO DEBTORS' MOTION TO ADD THE HOME MORTGAGE
WILLIAM H. BROWN, Bankruptcy Judge.
The debtors filed their Chapter 13 case on July 24, 1989, and their Chapter 13 statement indicates that this is their first bankruptcy filing. The statement also schedules Leader Federal Bank for Savings (hereinafter "Leader Federal") as being the holder of a first mortgage lien on the debtors' residence. The original plan filed by the debtors showed no arrearage to Leader Federal and provided that Leader Federal would be paid directly by the debtors. The Chapter 13 plan was confirmed, with the direct payment provisions as to Leader Federal, on September 6, 1989. On October 30, 1989, the debtors filed their motion to include the ongoing mortgage payment in the Chapter 13 plan and to add $1,920.00 in postpetition arrearages at 10% interest and at $48.00 per month in the plan. On November 3, 1989, Leader Federal filed its motion to dismiss and/or obtain relief from the automatic stay, saying that the debtors were in default for August, September and October, 1989, in an amount of $486.20 per month plus late charges and attorney's fees. This motion sought dismissal under § 1307(c)(6) of the Bankruptcy Code. On November 14, 1989, Leader Federal also filed its written objection to the debtors' motion to add this creditor to the Chapter 13 plan.
ISSUES PRESENTED
The issues presented in this contested matter are whether the debtors may accomplish a postconfirmation modification, when that modification amounts to the adding of plan payments to a creditor secured by a first mortgage on the debtors' principal residence, which modification also includes the adding of postpetition mortgage arrearages, said modifications being over the objection of the secured creditor. The issues raise interpretations of § 1322 and § 1329 of the Bankruptcy Code and present core issues under 28 U.S.C. § 157(b)(2)(L). The following constitutes findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052.
BANKRUPTCY CODE
Applicable portions of § 1322 provide as follows:
(b) Subject to subsections (a) and (c) of this section, the plan may
(2) modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence, or of holders of unsecured claims, or leave unaffected the rights of holders of any class of claims;
*343 (3) provide for the curing or waiving of any defaults;
(5) notwithstanding paragraph (2) of this subsection, provide for the curing of any default within a reasonable time and maintenance of payments while the case is pending on any unsecured claim or secured claim on which the last payment is due after the date on which the final payment under the plan is due;
The Code provisions concerning postconfirmation modification are found in § 1329, which provides as follows:
§ 1329. Modification of plan after confirmation.
(a) At any time after confirmation of the plan, but before the completion of payments under such plan, the plan may be modified, upon request of the debtor, the trustee, or the holder of an allowed unsecured claim, to
(1) increase or reduce the amount of payments on claims of a particular class provided for by the plan;
(2) extend or reduce the time for such payments; or
(3) alter the amount of the distribution to a creditor whose claim is provided for by the plan, to the extent necessary to take account of any payment of such claim other than under the plan.
(b)(1) Sections 1322(a), 1322(b) and 1323(c) of this title and the requirements of section 1325(a) of this title apply to any modification under subsection (a) of this section.
(2) The plan as modified becomes the plan unless, after notice and a hearing, such modification is disapproved.
(c) A plan modified under this section may not provide for payments over a period that expires after three years after the time that the first payment under the original confirmed plan was due, unless the court, for cause, approves a longer period, but the court may not approve a period that expires after five years after such time.
FINDINGS AND CONCLUSIONS
The Court notes that this same creditor objected to a postconfirmation modification of a Chapter 13 plan, in a similar setting, in the case of In re Walter Davis and Jimmye Davis, 110 B.R. 834 (Bankr.W.D.Tenn.1989). In that case, Leader Federal's objection apparently was primarily based upon its claim that § 1322(b)(2) statutorily prohibited such postconfirmation modifications. Chief Judge David S. Kennedy overruled the creditor's objection in a written opinion, supplementing oral findings and conclusions, which written opinion this Court finds persuasive and adopts verbatim. In that opinion, Judge Kennedy quoted from In re McCollum, 76 B.R. 797 (Bankr.Ore.1987), which Court found that § 1322(b)(2) did not preclude a debtor's amendment to a Chapter 13 plan when the amendment cured postpetition and postconfirmation defaults in payments secured only by the Chapter 13 debtor's principal residence. As the McCollum Court noted, Chapter 13 has a goal of rehabilitating debtors while protecting creditors' interest, and § 1329, in its provision for modifications of confirmed plans, does not deviate from that goal in its recognition that changed circumstances may require modification. 76 B.R. at 800.
This Court has previously recognized, in its own unpublished opinion, that § 1329 permits postconfirmation modification, and this Court had indicated that it would require strict compliance with § 1329 in that all affected creditors must be noticed. See, In re Lynch and In re Woods, 109 B.R. 792 (Bankr.W.D.Tenn. 1989). In that opinion, this Court observed that "the incurring of postpetition mortgage arrearages may present difficult problems for debtors and mortgage creditors as to whether those postpetition arrearages constitute a modification of the home mortgages in violation of § 1322(b)(2) or in violation of the requirements of § 1322(b)(5) that ongoing mortgage payments be maintained `while the case is pending.'" In re Lynch and Woods, at p. 796. It is certainly true that in a given case, a debtor's attempted postconfirmation modification may not be justified as a change of circumstance but may instead be *344 an attempt by the debtor to avoid the anti-modification provisions of § 1322(b)(2), and the bankruptcy court must conduct a judicial inquiry in each case to ascertain the real purpose behind an attempted postconfirmation modification.
As the McCollum Court observed, the inclusion of a plan modification provision curing postpetition defaults does not necessarily constitute a modification of the creditor's rights in contravention of § 1322(b)(2). As in McCollum, these debtors' modification does not alter the term of the original trust deed as to payment of future installments. In re McCollum, 76 B.R. at 800-801. If, on the other hand, a debtor attempted to modify basic terms of the original mortgage deed of trust, through a postconfirmation modification, § 1322(b)(2) would likely be offended and such a modification attempt should be rejected.
Here, the Court has examined the proof presented and finds that there was a change of circumstance in that the debtor, Mr. Gadlen, who has owned this home since 1984, and who has seen its market value rise to $50,000.00, according to his testimony, suffered personal and family problems causing financial difficulties around the time of the bankruptcy filing and thereafter. Mr. Gadlen has steady employment, having been with the same employer for eleven years, and the debtor. Mrs. Gadlen is also employed. Mr. Gadlen has suffered, however, a pay cut during the fall after his bankruptcy filing. A sufficient change in circumstance has been presented to explain why the debtors have become delinquent, postpetition, in their mortgage payments. This is not to excuse the delinquency nor to say that the debtors may in the future freely fall behind in their mortgage payments, since a pattern of delinquency in the mortgage payments would violate the requirements of § 1322(b)(5) that ongoing payments be maintained "while the case is pending."
It may be argued that § 1329 does not permit modification in this instance because the provisions of § 1329 do not specifically address the adding of a mortgage obligation to the plan payments or the adding of the mortgage arrearage. Section 1329(a)(1) provides that payments to a "particular class provided for by the plan" may be modified. The Court finds and concludes that Leader Federal was provided for by this plan, in that the original plan, as confirmed, contained a provision that the ongoing payments to Leader Federal would be paid directly by the debtors. It is not necessary that a creditor be paid by the Chapter 13 trustee in order to be provided for by the plan. See, e.g., In re Wright, 82 B.R. 422 (Bankr.W.D.Va.1988). Leader Federal, having been provided for by this plan in the form of direct payments by the debtor, is now subject to modification in that the debtor seeks to alter the plan and now provide that payments be made by the Chapter 13 trustee, both as to ongoing payments and as to postpetition arrearages.
Section 1322(b)(5) does permit, as an exception to § 1322(b)(2), that defaults may be cured "within a reasonable time." Leader Federal argues that this Code provision is limited to prepetition arrearages. However, the Code is not so limited in its language. In re Walter Davis and Jimmye Davis, unpub. opinion supra at p. 5. Also, § 1322(b)(3) permits the curing of any default. That Code provision has been interpreted to permit curing within the life of the plan. In re Ford, 84 B.R. 40, 43-44 (Bankr.E.D.Pa.1988). The Ford Court recognized that some courts had placed certain limits on the debtor's ability to cure postpetition defaults either under § 1322(b)(3) or (5). For example: (1) A debt already matured prior to filing may not be cured. See, e.g., In re Seidel, 752 F.2d 1382 (9th Cir.1985). (2) Suspension of all payments in the plan in order to permit a curing has been frowned upon. See, e.g., In re Gavia, 24 B.R. 573 (9th Cir. BAP 1982). (3) An unreasonable period of time to cure postpetition arrearages would offend § 1322(b)(5) as would excessive delays in making consistent payments. See, e.g., In re Parker, 46 B.R. 106 (Bankr.N.D.Ga. 1985). (4) At least one court has held that confirmation, by virtue of § 1327, revested *345 the property in the debtor, created a new mortgage obligation, and precluded the automatic stay from having any effect on postpetition arrearages. See, In re Nicholson, 70 B.R. 398 (Bankr.D.Col.1987). (Both the Ford Court and this Court disagree with the Nicholson rationale).
This Court is aware that some courts have held that the debtor may not utilize § 1329 to modify the plan so as to cure postpetition arrearages. See, e.g., In re Hollis, 105 B.R. 1003 (N.D.Ala.1989) (mortgagee filed motion for relief from stay, debtor failed to respond and no § 1329 modification was sought); In re Cotton, 102 B.R. 891 (Bankr.D.Ga.1989) (debtor assumed mortgage postconfirmation); In re Sensabaugh, 88 B.R. 95 (Bankr.E.D.Va.1988) (material breach dictated dismissal under § 1307(c)(6)). However, after an examination of these opinions, this Court finds that their facts differ from the Gadlen facts, and this Court is not persuaded that a blanket rule prohibiting postconfirmation modification for the purpose of curing postpetition mortgage arrearages is either mandated or wise. The critics of such modification appear to find § 1322(b)(2) and (5) controlling, and this Court does not quarrel with the effect of those statutes. However, those statutes do not prohibit, by their clear language, a postconfirmation modification of this nature. They, coupled with § 1329, simply require the court to examine any postconfirmation modification to be certain that it complies with both § 1322(a) and § 1322(b), as well as § 1323(c) and § 1325(a). This Court has conducted such an examination and finds that the modification sought by the Gadlens does comply with the applicable Code sections.
However, the Court notes that the modification sought by the Gadlens proposes to add an arrearage of $1,920.00, at $48.00 per month and at 10% interest. Testimony at the hearing indicated that the debtors were now delinquent from August through November, 1989; therefore, the postpetition arrearage will be higher than indicated by the debtors. The plan, as confirmed by the Court, is a sixty month plan, beginning on the date of confirmation, September 6, 1989. There was no proof presented of the contractual rate of interest nor of a market rate of interest for similar loans. Therefore, the Court can only conclude that these debtors must pay the postpetition arrearage at the contractual rate, whatever it may be, pursuant to the promissory note between the debtors and Leader Federal, or at 10%, as proposed by the debtors, whichever rate is higher. In re Colegrove, 771 F.2d 119 (6th Cir.1985). The Court will not at this time pass upon the $48.00 per month payment proposed by the debtors; rather, the Court will hear further proof on the length of term necessary for payment of the postpetition arrearage, if the parties are unable to agree upon a satisfactory term. Insufficient proof was presented for the Court to make a determination of whether the $48.00 per month would pay out over a reasonable time, as required by § 1322(b)(5).
The creditor is protected in part in this case by the fact that the payments, to be made now through the Chapter 13 trustee, are from a payroll deduction. The Court had ordered, after oral hearing on November 29, 1989, that the debtors begin to pay their proposed mortgage arrearage at the $48.00 per month to the Chapter 13 trustee; therefore, some payments should have accumulated for immediate disbursement to the creditor, along with the ongoing mortgage payments now being paid through the plan. Should the debtors default in future plan payments, so that additional postmodification arrearages accumulate, the creditor is free to move the court for appropriate relief, which would trigger another examination of § 1322(b)(5) and § 1307(c). However, at this time, the Court finds that the debtors' modification, so as to cure postpetition arrearages and make ongoing mortgage payments, overcomes the creditor's request for dismissal under § 1307(c)(6).
CONCLUSION
The debtors' motion to modify their confirmed Chapter 13 plan so as to add ongoing mortgage payments to Leader Federal *346 Bank for Savings to the plan to be disbursed by the Chapter 13 trustee should be granted, and the debtors' motion to add postpetition arrearages should be granted, with the creditor having the right to file a claim for its postpetition arrearages which postpetition arrearages shall be paid at the contractual rate or at 10% proposed by the debtor, whichever interest rate is higher.
The Court reserves, for later determination, the term of payment of the postconfirmation arrearage, to allow the parties to consult to see if they may agree. However, the Court notes that the United States Bankruptcy Court for the Western District of Tennessee, through its Chief Judge, and the United States District Court for the Western District of Tennessee, in an affirmation of the Bankruptcy Court, has recognized authority for permitting Chapter 13 debtors to modify confirmed plans in order to pay off postconfirmation arrearages over the term of the plan. See, In re Lois J. Bailey, 111 B.R. 151, unpub. opinion case no. 83-20623-K (Bankr.W.D. Tenn. Dec. 23, 1986), aff'd, unpub. opinion 87-2042-4A (W.D.Tenn., Judge Robert M. McRae, August 26, 1988).
The objection to the debtors' modification is denied for the reasons stated hereinabove and the motion to dismiss or obtain relief from the automatic stay filed by Leader Federal is denied.
Leader Federal may file, as a part of its arrearage claim, a claim for attorney's fees. See, 11 U.S.C. § 506(b). Of course, the debtors or Chapter 13 trustee may object to the proof of claim. See Bankruptcy Rule 3007.
SO ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2003680/ | 237 Minn. 332 (1952)
IN RE APPLICATION OF GENEVRA BINGENHEIMER AND OTHERS TO REGISTER TITLE TO CERTAIN LANDS IN ITASCA COUNTY
v.
DIAMOND IRON MINING COMPANY AND OTHERS.
STATE OF MINNESOTA, OBJECTOR.[1]
No. 35,767.
Supreme Court of Minnesota.
July 25, 1952.
*333 H.P. Clarke, W.H. Crago, Donald D. Harries, and James F. Murphy, for appellants.
*334 J.A.A. Burnquist, Attorney General, and Victor J. Michaelson and G.L. Ware, Special Assistant Attorneys General, for the State of Minnesota.
W.K. Montague and Nye, Montague, Sullivan, Atmore & McMillan filed a brief as amici curiae in support of the contention of appellants.
MAGNEY, JUSTICE.
The applicants[2] in this proceeding to register title[3] to the SE 1/4 of NE 1/4 of section two, township 55 north, range 25 west of the fourth principal meridian, in Itasca county, Minnesota, appeal from the decree of registration adjudging that they are owners in fee simple of the tract described, excepting the land underlying a body of water located on the tract and known as Pond A, lying and being below the ordinary low-water mark of the pond on May 11, 1858 (elevation 1310.5, sea-level datum).
In the registration proceeding the state was made a party defendant. It filed an answer (all other defendants being in default) claiming an interest in two parcels, described by metes and bounds, as parts of the bed of certain claimed navigable public lakes known as Chain Lakes; hence, that said parcels are owned by the state in its sovereign capacity for the benefit of the public.
The district court on August 24, 1950, held that the bodies of water located on the land (identified in these proceedings as Ponds A, B, and C) were not navigable at the date of admission of the state of Minnesota to the Union, and that title to the entire 40-acre tract was conveyed by the state to the Taylor's Falls & Lake Superior Railroad Company, and by subsequent conveyances to the applicants. Motions for amended findings and conclusions or a new trial were made both by the state and by applicants, and on December 3, 1951, the district court filed amended findings and *335 conclusions. In these amended findings, the district court held that one of the ponds, identified as Pond A, was navigable at the time of admission of the state to the Union, that the title acquired by virtue of the navigability of the pond has not been conveyed by the state, and that the state is not barred by the doctrine of estoppel or the statute of limitations from asserting its title.
A decree pursuant to the terms of the amended findings, registering title to the tract in question, but excepting from the registration the lands underlying Pond A, was entered December 17, 1951. An amended decree was entered January 14, 1952. The applicants seek reversal of the decree insofar as it limits registration of title in them to less than a full 40 acres, and they seek modification of the decree by removal of the exception. The sufficiency of the evidence to support the findings of fact is not challenged.
The applicants make four principal assertions which, if sustained on this review, would require a modification of the decree:
(1) Pond A was not navigable at the time of the admission of the state of Minnesota to the Union on May 11, 1858.
(2) Even if Pond A was navigable at that time, title to the entire 40-acre tract was conveyed by the state to the Taylor's Falls & Lake Superior Railroad Company pursuant to Sp. L. 1875, c. 51, and by mesne conveyances to the applicants.
(3) In any case, the state is estopped to deny that title to the bed of Pond A was conveyed by the state to the remote grantors of the applicants.
(4) The state is barred from asserting a claim to the land underlying Pond A by the statute of limitations.[4]
Three bodies of water, sometimes called Chain Lakes but in these proceedings called Ponds A, B, and C, are located in part on the subdivision of land sought to be registered. Ponds B and C lie to the south of Pond A. The ponds are located in a horseshoe-shaped catchment basin of 1.15 square miles. A high ridge extends along the north, east, and south sides of the ponds, reaching a crest about *336 a mile distant from the ponds. To the west, a swampy and marshy area extends for some distance in a northwesterly direction. The level of the outflow or control point or natural outlet of Ponds B and C at the time of admission of the state to the Union was in the southwest corner of Pond C, where it drains in the direction of Prairie River, a navigable tributary of the Mississippi River; in a state of nature at that time, a channel extended from said control point in the direction of Prairie River, less than a mile away, and certain portions thereof were well defined. Such control point in 1858 was at 1311.8, sea-level datum. The mouth of the run-out in the state of nature was 20 feet wide.
For a better understanding of the features of the area in question as they exist today, exhibit AAA, a sketch thereof, is shown herewith.
The district court found that on May 11, 1948, the water level of Pond A was 1305, sea-level datum. Pond A has a present area of approximately 25 acres, with a maximum depth of 20.5 feet. Ponds B and C are located in a marshy area with slightly sloping ground, so that the area of Ponds B and C varies greatly with changes in the water level, but they are shallow at all probable levels of water. In times of high water, Ponds B and C would be joined as one body of water.
The trial court found, and the evidence amply supports the finding, that Pond A was of sufficient area and depth in 1858 to float logs. But it does not necessarily follow that the pond was navigable from the fact that it would float logs. Navigable waters are waters which are used or usable as highways of commerce. It is quite apparent that no practical commercial purpose would have been or would be served by rafting or driving logs from one shore to the other in this small pond or lake.
Evidence was introduced to show that large pine trees, more than 100 years old, stand around Pond A above an elevation of 1313, but that no large trees stand below that elevation, nor are there stumps of large trees. There are at present birch trees of a maximum age of 40 years growing below elevation 1313. Upon the
*337
*338 basis of this and other evidence, particularly the various surveys made of the area in early years, the trial court found, and the finding is not attacked by the applicants, that on May 11, 1858, when Minnesota became a state, the water level of Pond A was elevation 1313. It was also found that the water remained at that level for a sufficient time to prevent growth of trees until about 40 years ago, when, by reason of removal of timber from the area, the construction of a railroad along the west side of the lakes and of an off-take ditch from the outlet of Pond C, the water level of the ponds was lowered substantially. The off-take ditch constructed by the railway company had a cut 7.5 feet in the first 100 feet southwest of Pond C. It had its point of beginning within the bed of Pond C. The ditch tapered in depth to a point where the grade of the bottom of the ditch coincided with the natural ground. It would seem that this ditch lowered the point of outflow 7 1/2 feet. The lower level has been maintained since that time.
The trial court also found that the water remained at elevation 1313 during the spring runoff and during times of unusually heavy precipitation. Ordinary low-water mark was at elevation 1310.5. At elevation 1313, approximately 155 acres were submerged by the increased size of Ponds B and C; Ponds B and C at that elevation were one body of water, with a channel connecting them to Pond A, which at this water level covered between 35 and 40 acres. Water at that control point to the channel leading to the Prairie River was 1.2 feet deep.
Evidence still exists of old logging roads extending from the ridges and hills to the east, west, and south of the ponds toward Pond A and terminating at the pond, but there is no evidence of any logging roads leading from the ponds toward the Prairie River. The evidence also shows that the property had been drilled and that roads would be used for carrying drills, equipment, and ore and possibly for the construction and maintenance of camps. Before the area was logged, there were approximately 10,000,000 feet of Norway and white pine timber on the slopes and ridges adjacent to the ponds. There is no evidence that the ponds had *339 ever been used for water travel or transportation prior to the admission of the state to the Union; and, except for the purpose of floating logs, the ponds were not suitable for commerce. Aside from the existence of old logging roads, there was no evidence that the ponds had ever in fact been used for floating logs, and the court made no finding that they were so used. However, it was found that Pond A was of sufficient size and depth to float logs. The following facts, very important in the determination of the issue in this case, are best stated in the language of the court:
"* * * that during the spring run-off in years of normal precipitation and during times of unusually heavy precipitation, it was feasible to float logs from Pond A and through the channel connecting the same with Pond C, and thence down through the outlet channel to Prairie River, but only with the use of such artificial improvements as dams and sluiceways; that the length of time that such operations in floating logs down to Prairie River with such artificial aids could be conducted each year depended upon the amount of water available and the rapidity with which such operations of floating logs was carried on; that in such operations water could be discharged at the rate of 100 second feet, and that at such rate the said operations could be carried on for a period of three days during ordinary spring run-offs; that at such rate more than one million feet of logs could be floated down to Prairie River in one day, but that such period of operations could be considerably lengthened by reducing the rapidity of the operations, both as to the amount of water discharged and the number of logs floated down to Prairie River; that considerable difficulty would accompany such operations; that except for the purpose of floating logs as herein found, the said lakes had no suitability for commerce; that there is no evidence that, prior to the admission of the State of Minnesota into the Union, the said lakes had ever been used for water travel or transportation; that because of such feasibility of Pond A for the floating of logs as herein found, said Pond A, at the time of Minnesota's admission to the Union, was a navigable and public body of water."
*340 The proposed "artificial aids" "as dams and sluiceways," as referred to by the court, were described by S.A. Frellsen, a hydrological engineer, a witness for the state. He testified:
"Why, what I had in mind was the deepening of the channel across the bar between the lakes, what we call 3 [Pond A] and 1 [Pond C], in that area, so that saw logs could be either pushed through or driven through, or by an additional head of water impounded in that part of the lake, could be sluiced through into Lake 1 [Pond C].
"Q. To what extent would you consider deepening, widening that channel?
"A. Oh, a couple of feet, and maybe only six feet wide.
"Q. For what distance?
"A. Oh, less than 100 feet.
* * * * *
"Q. The deepening of two feet and widening of six feet would be in this narrow neck between what has been referred to as Lake 3 [Pond A] and Lake 1 [Pond C]?
"A. Yes. You see the channel at present is a `V' shaped channel. What I had in mind was to widen out the bottom and deepen it so as to get water from Lake 3 [Pond A] to Lake 1 [Pond C] more readily than would flow there, starting at 1313 it would be a foot and two inches deep over the bar and at the outlet. Likewise by deepening the channel the water in the upper storage stored in the upper lake, the upper parts of it, could be conserved for more beneficial use in sluicing the logs down the outlet and the creek."
As to the deepening and widening of the channel at the so-called control point at the outlet, Mr. Frellsen testified:
"Well, I had in mind the construction of a sluice way, just a narrow six-foot wide or so, about two between two feet lower than the natural outlet, and controlled by a gate and a little short dyke on either side so as to control the outflow from the lake into the creek. I believe in that way it would be practical to sluice the logs down to the creek.
*341 "Q. That is it would be of some aid to accelerate the sluicing of logs down to the Prairie River?
"A. Yes, and it would prevent the waste of water, if that was important.
* * * * *
"Q. Now, Mr. Frellsen, by the improvement of the channel such as you have now described, to what extent would that increase the outflow from the lake over what the outflow would be in a state of nature at the same water elevation, 1313?
"A. That would make it possible to get sufficient volume of water at the lower stages to float, I believe, at least a three- to four-foot saw-log.
* * * * *
"I think by adapting the sluice way and deepening an[d] improving the channel down stream from the sluice way structure itself, the water regulating structure, and improving of that channel by digging it out a little bit, would be a simple matter and assist in getting the timber down."
The outflow would cease from artificial construction at 1311.8. He was asked:
"Q. Then in three days what would be the situation at that rate of flow [100 cubic feet per second]?
"A. In three days that would mean the lake would be three feet lower.
"Q. Well, then you wouldn't have any outflow then?
"A. Not after three days, if there were no inflow."
Adolph Meyer, another hydrologist called by the state, testified:
"The lake could be used for moving the logs and sluicing them down to the Prairie River, using the large arm to the west mainly as a body for storing the water and using the Lake 3 [Pond A], and 2 and 1 [Ponds B and C] for moving the logs bodily on the lakes, with a control at the outlet.
"Q. That is, by placing a control at the outlet of the lake 3 [Pond A]?
*342 "A. Both at the outlet of Lake 3 [Pond A], and at the outlet of the Chain of lakes.
* * * * *
"Q. What type of improvements did you have in mind that would improve the usefulness of the lake for the purpose of floating logs?
"A. Mainly the control of the outflow with a very small log dam and log sluice at the outlet."
He doubted whether it would be necessary to have any control between Pond A and Pond C.
By the use of appropriate hand-operated devices for removing and installing stop logs in the control structure, if the water at the outlet were raised to 1313, sea-level datum, an area of 155 acres, including Ponds B and C, would be submerged.
In all transactions concerning the subdivision in question, it has been treated as a full 40-acre tract. Since the land was first placed upon the tax rolls in 1892, it has been taxed as 40 acres.
1. Whether a body of water is navigable for the purpose of determining title is a federal question, and the federal, not the state, tests of navigability must be applied. United States v. Holt State Bank, 270 U.S. 49, 46 S. Ct. 197, 70 L. ed. 465; State v. Longyear Holding Co. 224 Minn. 451, 29 N.W. (2d) 657.
2. States organized in the public domain, as was Minnesota, became vested upon admission to the Union with title to the beds of all waters then navigable and not previously granted by the United States, subject, of course, to the paramount power of the United States over such waters by virtue of its power to regulate commerce. Pollard's Lessee v. Hagan, 3 How. (U.S.) 212, 11 L. ed. 565; Barney v. Keokuk, 94 U.S. 324, 24 L. ed. 224; Shively v. Bowlby, 152 U.S. 1, 14 S. Ct. 548, 38 L. ed. 331; United States v. Holt State Bank, 270 U.S. 49, 46 S. Ct. 197, 70 L. ed. 465; Economy Light & Power Co. v. United States, 256 U.S. 113, 41 S. Ct. 409, 65 L. ed. 847.
3. The fact that the ponds were not meandered by the United States survey does not establish that the waterway was not in fact *343 navigable at the time of the survey, since surveying officers have no power to settle questions of navigability. Oklahoma v. Texas, 258 U.S. 574, 42 S. Ct. 406, 66 L. ed. 771; Harrison v. Fite (8 Cir.) 148 F. 781, 784, where the court said:
"The action of the government surveyors in meandering a body of water or in surveying its bed is to be considered as evidence upon the question of its navigability or unnavigability at the time; but it is not conclusive. The surveyors are invested with no power to foreclose inquiry into the true character of the water."
4. Applicants contend that the finding that it was feasible during the spring runoff and at times of unusually heavy precipitation to float logs from Pond A to Prairie River, but only with the use of such artificial improvements as dams and sluiceways, and that because of such feasibility Pond A was navigable, presents for decision the question whether the findings support a judgment that Pond A, at the time of admission of Minnesota to statehood, was navigable under the federal rule governing title to land under water. For the purposes of this appeal, applicants are not questioning the findings of fact, but do contend that the findings of fact do not support the conclusions of law. As they put it: "The basic question presented is: `Do the findings sustain the judgment?'" Nor do they quarrel with the proposition that if a waterway is feasible for the floating of logs in commerce it is navigable and that the lake bed below the low-water mark belongs to the state.
We must therefore first consider whether the findings of the trial court support the conclusion that the waters of Pond A were navigable on May 11, 1858, under the federal criteria of navigability.
Before considering the case of United States v. Appalachian Elec. Power Co. 311 U.S. 377, 61 S. Ct. 291, 85 L. ed. 243, upon which the trial court placed its reliance when it changed its mind as to the navigability of the waters here involved, it seems desirable and necessary to make an examination of most of the prior decisions of the United States Supreme Court in which the question of navigability was involved. In the order of their decision they are: United *344 States v. Rio Grande D. & I. Co. 174 U.S. 690, 19 S. Ct. 770, 43 L. ed. 1136; Oklahoma v. Texas, 258 U.S. 574, 42 S. Ct. 406, 66 L. ed. 771; Brewer-Elliott Oil & Gas Co. v. United States, 260 U.S. 77, 43 S. Ct. 60, 67 L. ed. 140; United States v. Holt State Bank, 270 U.S. 49, 46 S. Ct. 197, 70 L. ed. 465; United States v. Utah, 283 U.S. 64, 51 S. Ct. 438, 75 L. ed. 844; United States v. Oregon, 295 U.S. 1, 55 S. Ct. 610, 79 L. ed. 1267. In United States v. Rio Grande D. & I. Co. supra, the court said (174 U.S. 698, 19 S. Ct. 773, 43 L. ed. 1140):
"* * * Examining the affidavits and other evidence introduced in this case, it is clear to us that the Rio Grande is not navigable within the limits of the Territory of New Mexico. The mere fact that logs, poles, and rafts are floated down a stream occasionally and in times of high water does not make it a navigable river. * * *
"* * * Its use for any purposes of transportation has been and is exceptional, and only in times of temporary high water. The ordinary flow of water is insufficient. It is not like the Fox River, which was considered in The Montello, in which was an abundant flow of water and a general capacity for navigation along its entire length, and although it was obstructed at certain places by rapids and rocks, yet these difficulties could be overcome by canals and locks, and when so overcome would leave the stream in its ordinary condition susceptible of use for general navigation purposes." (Italics supplied.)
In a footnote, the court in the Appalachian case, in referring to the Rio Grande case, said (311 U.S. 407, 61 S. Ct. 299, 85 L. ed. 253):
"* * * the record contained reports of army engineers that improvements necessary to make the river navigable would be financially, if not physically, impracticable because of the many millions of dollars that would be required. The supreme court of the Territory of New Mexico observed that `the navigability of a river does not depend upon its susceptibility of being so improved by high engineering skill and the expenditure of vast sums of money, but *345 upon its natural present conditions' * * *. This Court agreed that too much improvement was necessary for the New Mexico stretch of the river to be considered navigable."
In Oklahoma v. Texas, suit was brought to determine among other things proprietary claims to 43 miles of the southerly half of the bed of the Red River, the common boundary between the states. The United States intervened and set up a claim to the river bed as against both states. Oklahoma claimed ownership of the entire bed of the river within the state, and Texas claimed the southerly half of the stretch indicated. Oklahoma contended that the river throughout its course in the state was navigable, and therefore that upon admission of the state into the Union in 1907 the title to the river bed passed from the United States to the state. The real question in this connection was whether the river was navigable in Oklahoma. In disposing of the question, the court said (258 U.S. 586, 42 S. Ct. 411, 66 L. ed. 776):
"We find nothing in any of the matters relied on which takes the river in Oklahoma out of the settled rule in this country that navigability in fact is the test of navigability in law, and that whether a river is navigable in fact is to be determined by inquiring whether it is used, or is susceptible of being used, in its natural and ordinary condition as a highway for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.
"* * * The evidence also discloses an occasional tendency to emphasize the exceptional conditions in times of temporary high water and to disregard the ordinary conditions prevailing throughout the greater part of the year."
The evidence showed that the river flows through a region where the rainfall is light, is confined to a relatively short period each year, and quickly finds its way into the river. Because of this, the river in the western half of the state does not have a continuous or dependable flow of water. It has a fall of three feet or more per mile, and for long intervals the greater part of its extensive *346 bed is dry sand interspersed with irregular ribbons of shallow water and occasional deeper pools. Only for short intervals, when the rainfall is running off, are the volume and depth of the water such that even very small boats could be operated therein. The river then is swift and turbulent and occasionally overflows its banks. The rises usually last from one to seven days and in the aggregate seldom cover as much as 40 days a year. In holding that part of the river not navigable, the court said (258 U.S. 591, 42 S. Ct. 413, 66 L. ed. 778):
"* * * we think it establishes that trade and travel neither do nor can move over that part of the river, in its natural and ordinary condition, according to the modes of trade and travel customary on water; in other words, that it is neither used, nor susceptible of being used, in its natural and ordinary condition as a highway for commerce. Its characteristics are such that its use for transportation has been and must be exceptional, and confined to the irregular and short periods of temporary high water. A greater capacity for practical and beneficial use in commerce is essential to establish navigability."
In Brewer-Elliott Oil & Gas Co. v. United States, 260 U.S. 77, 86, 43 S. Ct. 60, 63, 67 L. ed. 140, 145, where the question involved was the ownership of the river bed of part of the Arkansas River in Oklahoma, the court, in disposing of the question, defined a navigable river in these words:
"A navigable river in this country is one which is used, or is susceptible of being used in its ordinary condition, as a highway for commerce over which trade and travel are or may be conducted in the customary modes of trade and travel on water." It depends "upon the fact whether the river in its natural state is such that it affords a channel for useful commerce."
United States v. Holt State Bank, 270 U.S. 49, 46 S. Ct. 197, 70 L. ed. 465, involved ownership of the bed of a lake. Mud Lake in Minnesota in its natural condition covered an area of almost 5,000 acres, was three to six feet deep, and was traversed by Mud *347 River, which was both navigable in itself and directly connected with other navigable streams. Boats were used on its waters for travel and bringing in supplies. A ditch 30 miles long and deeper than the lake effectively drained it in 1912. Defendants insisted that the lake in its natural condition was navigable, that the state upon its admission to the Union became the owner of the lake bed, and that defendants as owners of the surrounding tracts of land had succeeded to the right of the state. The United States insisted that the lake never was more than a mere marsh and that the state never acquired any right to the lake bed. The court in holding the lake navigable said (270 U.S. 57, 46 S. Ct. 199, 70 L. ed. 469):
"* * * True, the navigation was limited, but this was because trade and travel in that vicinity were limited. In seasons of great drought there was difficulty in getting boats up the river and through the lake, but this was exceptional, the usual conditions being as just stated. Sand bars in some parts of the lake prevented boats from moving readily all over it, but the bars could be avoided by keeping the boats in the deeper parts or channels. Some years after the lake was meandered, vegetation such as grows in water got a footing in the lake and gradually came to impede the movement of boats at the end of each growing season, but offered little interference at other times."
The court cited and approved the rule of The Montello case, 87 U.S. (20 Wall.) 430, 439, 22 L. ed. 391, 393, and stated (270 U.S. 56, 46 S. Ct. 199, 70 L. ed. 469):
"The rule long since approved by this Court in applying the Constitution and laws of the United States is that streams or lakes which are navigable in fact must be regarded as navigable in law; that they are navigable in fact when they are used, or are susceptible of being used, in their natural and ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water; and further that navigability does not depend on the particular mode in which such use is or may be had whether by steamboats, *348 sailing vessels or flatboats nor on an absence of occasional difficulties in navigation, but on the fact, if it be a fact, that the stream in its natural and ordinary condition affords a channel for useful commerce."
In United States v. Utah, 283 U.S. 64, 76, 51 S. Ct. 438, 441, 75 L. ed. 844, 849, the United States brought action to quiet title to certain portions of the beds of three rivers in Utah. The court stated that the test of navigability had frequently been stated by the court, and it quoted from The Daniel Ball case, 77 U.S. (10 Wall.) 557, 563, 19 L. ed. 999, 1001, where the court said:
"* * * Those rivers must be regarded as public navigable rivers in law which are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water."
It also cited The Montello case and United States v. Holt State Bank, supra, which we have already quoted herein. The court in holding the rivers in question navigable said (283 U.S. 87, 51 S. Ct. 445, 75 L. ed. 855):
"* * * Each determination as to navigability must stand on its own facts. In each of the cases to which the Government refers it was found that the use of the stream for purposes of transportation was exceptional, being practicable only in times of temporary high water. [Rio Grande case, Oklahoma v. Texas, and Brewer-Elliott Oil & Gas Co. case, supra.] In the present instance, with respect to each of the sections of the rivers found to be navigable, the master has determined upon adequate evidence that `its susceptibility of use as a highway for commerce was not confined to exceptional conditions or short periods of temporary high water, but that during at least nine months of each year the river ordinarily was susceptible of such use as a highway for commerce.'"
In United States v. Oregon, 295 U.S. 1, 55 S. Ct. 610, 79 L. ed. 1267, the United States claimed that certain lakes in Oregon, some *349 large in area but shallow in depth, were nonnavigable and that title to the lake beds therefore was not in the state. The court said (295 U.S. 6, 15, 55 S. Ct. 612, 616, 79 L. ed. 1270, 1274):
"* * * If the waters were navigable in fact, title passed to the State upon her admission to the Union." The special master found: "`neither trade nor travel did then [1859] or at any time since has or could or can move over said Divisions, or any of them, in their natural or ordinary conditions according to the customary modes of trade or travel over water; nor was any of them on February 14, 1859, nor has any of them since been used or susceptible of being used in the natural or ordinary condition of any of them as permanent or other highways or channels for useful or other commerce.' It is not denied that this finding embodies the appropriate tests of navigability as laid down by the decisions of this Court."
The trial court was of the opinion that the later case of United States v. Appalachian Elec. Power Co. 311 U.S. 377, 61 S. Ct. 291, 85 L. ed. 243, modified or changed the test of navigability as laid down in the cases which we have cited and quoted above. In the Appalachian case, the court recognized that navigability to determine ownership of land under water is fixed at the time of admission of the state to the Union, but that navigability for purpose of regulation of commerce may arise later, by reason of shifts and changes in population, industry, and engineering practice. The case involved the question of the necessity of acquiring a license required by the Federal Power Commission for the construction of a hydro-electric dam in the New River, which flows through Virginia and West Virginia. Such licenses are required for the construction of hydroelectric dams in navigable rivers of the United States. The navigability of the New River was, therefore, a primary question. The court said (311 U.S. 404, 61 S. Ct. 297, 85 L. ed. 251):
"* * * The legal concept of navigability embraces both public and private interests. It is not to be determined by a formula which fits every type of stream under all circumstances and at all times. Our past decisions have taken due account of the changes and complexities *350 in the circumstances of a river. We do not purport now to lay down any single definitive test."
The court stated that the basic concept of navigability was laid down by the court in United States v. Rio Grande D. & I. Co. supra; Brewer-Elliott Oil & Gas Co. v. United States, supra; United States v. Holt State Bank, supra; United States v. Utah, supra; and United States v. Oregon, supra, all of which we have already cited and commented upon. But, the court continued (311 U.S. 406, 61 S. Ct. 299, 85 L. ed. 252):
"* * * Each application of this test, however, is apt to uncover variations and refinements which require further elaboration.
* * * * *
"To appraise the evidence of navigability on the natural condition only of the waterway is erroneous. Its availability for navigation must also be considered. `Natural and ordinary condition' refers to volume of water, the gradients and the regularity of the flow. A waterway, otherwise suitable for navigation, is not barred from that classification merely because artificial aids must make the highway suitable for use before commercial navigation may be undertaken. * * * [Italics supplied.]
"Of course there are difficulties in applying these views. Improvements that may be entirely reasonable in a thickly populated, highly developed, industrial region may have been entirely too costly for the same region in the days of the pioneers. * * * There has never been doubt that the navigability referred to in the cases was navigability despite the obstruction of falls, rapids, sand bars, carries or shifting current. * * * In determining the navigable character of the New River it is proper to consider the feasibility of interstate use after reasonable improvements which might be made.
"Nor is it necessary for navigability that the use should be continuous. The character of the region, its products and the difficulties or dangers of the navigation influence the regularity and extent of the use. Small traffic compared to the available commerce *351 of the region is sufficient. Even absence of use over long periods of years, because of changed conditions, the coming of the railroad or improved highways does not affect the navigability of rivers in the constitutional sense. It is well recognized too that the navigability may be of a substantial part only of the waterway in question. Of course, these evidences of nonnavigability in whole or in part are to be appraised in totality to determine the effect of all."
Although the Appalachian case involved the question of the necessity of a license required by the Federal Power Commission for the construction of a hydroelectric dam in navigable waters of the United States, the court did discuss the question of navigability in general, and we not agree with the court in Strand v. State, 16 Wash. (2d) 107, 132 P. (2d) 1011, when it states that the United States Supreme Court in applying the rule for navigability specifically excluded cases involving title and riparian rights. In our opinion, the court intended to and did discuss navigability as applied to cases involving title and riparian rights. We are not permitted to draw distinctions between navigability for different purposes when the United States Supreme Court has not done so.
The federal criteria undoubtedly prescribe a satisfactory method for determination of the federal power under the commerce clause. But where the question presented is one of title to land, as it is here, where certainty and definiteness are highly desirable, they are not so plain and clear cut. It would be desirable, if it were possible, to suggest a test that would fit every type of stream under all circumstances and at all times. The court in the Appalachian case found it impossible to lay down any single determinative test, and in United States v. Utah, 283 U.S. 64, 87, 51 S. Ct. 438, 445, 75 L. ed. 844, 855, it said:
"* * * Each determination as to navigability must stand on its own facts."
Under the decisions of the United States Supreme Court prior to the Appalachian case, it is clear to us that the waterway in question was nonnavigable. We have discussed these cases in detail, but a *352 brief summary may be helpful. In the Rio Grande D. & I. Co. case, 174 U.S. 690, 19 S. Ct. 770, 43 L. ed. 1136, the court held that the mere fact that logs, poles, and rafts are floated down a stream occasionally and in times of high water does not make it a navigable river; that its use for any purposes of transportation has been and is exceptional and only in times of temporary high water, and that the ordinary flow of water was insufficient. In Oklahoma v. Texas, 258 U.S. 574, 42 S. Ct. 406, 66 L. ed. 771, supra, the court held that the part of the river in question was nonnavigable because its characteristics are such that its use for transportation has been and must be exceptional and confined to the irregular and short periods of temporary high water, and that a greater capacity for practical and beneficial use in commerce is essential to establish navigability. In the Brewer-Elliott Oil & Gas Co. case, 260 U.S. 77, 43 S. Ct. 60, 67 L. ed. 140, supra, the court said that a navigable river is one which is used or susceptible of being used in its ordinary condition, as a highway for commerce over which trade and travel are or may be conducted in the customary modes of trade and travel on water. In the Holt State Bank case, 270 U.S. 49, 46 S. Ct. 197, 70 L. ed. 465, the court held that Mud Lake was navigable even though in seasons of great drought there was difficulty in getting boats up the river and through the lake, but that this condition was exceptional; and that the fact that sand bars in some parts of the lake prevented boats from moving readily all over it, which bars could be avoided by keeping boats in the deeper channels, and that water weeds impeded the movement of boats at the end of each growing season but offered little interference at other times, did not make it nonnavigable. In United States v. Utah, 283 U.S. 64, 51 S. Ct. 438, 75 L. ed. 844, supra, in holding certain sections of rivers navigable, the court adopted the findings of the master, when he determined that the susceptibility of the waterway for commerce was not confined to exceptional conditions or to short periods of temporary high water, but that during at least nine months of the year the river was susceptible of such use as a highway for commerce. In United States v. Oregon, *353 295 U.S. 1, 55 S. Ct. 610, 79 L. ed. 1267, supra, where the court held certain lakes nonnavigable, it adopted the facts as found by the special master, that neither trade nor travel did in 1859, or at any time since, had or could move over the lakes or any of them in their natural or ordinary conditions according to the customary modes of trade or travel over water, nor were any of them in 1859, nor had any of them since, been used or susceptible of being used in their natural or ordinary conditions as permanent or other highways or channels for useful or other commerce.
5. In the instant case, the waterway in question in its natural and ordinary condition at elevation 1313 had no flow at all from Pond A to Prairie River that would float logs, which is the only use claimed for the waterway. If there was any water at all that entered the so-called outflow, it was of small amount and for only a short period of time. Without artificial structures as proposed by the state, it was not usable for any purpose of commerce. It is therefore evident that in its natural and ordinary condition it was nonnavigable. With the improvements proposed the deepening and widening of the channels from Pond A to Pond C and from Pond C to the draw or channel, and the building of sluiceways and control gates logs could be floated out of the lake when raised to a sufficient height by the captured or impounded water for a period of three days out of a year. Under the decisions prior to the Appalachian case, 311 U.S. 377, 61 S. Ct. 291, 85 L. ed. 243, supra, this three-day feature alone would be sufficient to make this waterway nonnavigable. The use of the waterway for purposes of transportation would be exceptional and only in times of temporary high water, the ordinary flow of water being insufficient. A greater capacity for practical and beneficial use would be essential to establish navigability. The susceptibility of this waterway for use as a highway of commerce for only that short period of time did not qualify it as navigable water under the earlier cases.
The question then arises whether the Appalachian decision warrants or compels a different result. The court in that case said, and we are repeating (311 U.S. 407, 61 S. Ct. 299, 85 L. ed. 252):
*354 "To appraise the evidence of navigability on the natural condition only of the waterway is erroneous. Its availability for navigation must also be considered. `Natural and ordinary condition' refers to volume of water, the gradients and the regularity of the flow. A waterway, otherwise suitable for navigation, is not barred from that classification merely because artificial aids must make the highway suitable for use before commercial navigation may be undertaken."
A wholly artificial waterway which would have sufficient volume of water, the proper gradient, and regularity of flow, of course, would not qualify as a navigable waterway with the legal incidents of ownership of bed or riparian rights, such as is involved in the cases which have been cited. But a natural waterway, under the Appalachian decision, which has sufficient volume of water, proper gradient, and regularity of flow, is not barred from the classification as being navigable, if otherwise suitable, merely because artificial aids must be installed to make the highway suitable for commercial navigation. With that formula in mind, we must analyze our facts.
Here, the proper gradient from the outflow point does not now exist. There must be a deepening. To create a sufficient supply of water for the floating out of logs, the water will have to be captured and impounded at the time of the spring thaw and rains from a watershed of only 1.15 square miles or 725 acres and which has a yield of only three-tenths of one cubic foot per second from all sources precipitation, seepage, and percolation and in many years the water supply would not suffice to offset evaporation. A waterway otherwise suitable for navigation is not barred from the classification because artificial aids are needed to make it suitable for uses of commerce, but there must exist a volume of water sufficient to render it capable of use as a highway of commerce, and a natural gradient, and a regularity of flow. The state suggests that artificial aids do not destroy navigability. They do not. But can they create navigability where the waterway itself is not otherwise suitable for commerce? The Appalachian decision by its facts involved improvement *355 within a waterway otherwise suitable for navigation. In that decision, the findings show that the volume of water passing through the New River over an extended period would be sufficient for the purposes of substantial navigation, provided other conditions should make it available for that purpose.
Here, the purpose of the dam would be primarily to capture and impound the water from the 725-acre catchment in order to get a sufficient supply to float out logs for three days a year. It would seem that the situation is no different than if Pond A had been just a saucer-like depression and that water from spring thaws and freshets would be impounded in sufficient quantity to float out logs with or without artificial aids.
If in this proceeding the title to the bed of the draw or channel between the runoff point and the Prairie River were the only property involved, the situation would be more apparent. The state admits that the whole stretch of the so-called waterway from Pond A down to Prairie River must be classified as navigable. It seems unreasonable to assert that the channel is otherwise suitable for navigation, and that the installation of artificial aids does not bar it from the classification of navigability. The usefulness of the waterway from Pond A to the Prairie River depends on construction which would not only reduce the barriers but would also completely transform the waterway, in fact, create it. We conclude that a waterway which on May 11, 1858, had a capacity for floating logs only at high water, impounded from spring thaws and freshets, and then only with the aid of dams and sluiceways, and in that event only with difficulty for three days in a normal year, was not navigable, and that the title to the bed of Pond A did not vest in the state by virtue of its admission to the Union.
In view of our determination as above, there is no necessity to discuss or decide the other issues raised.
That part of the amended order and decree of registration appealed from is reversed.
*356 UPON APPEAL FROM CLERK'S TAXATION OF COSTS.
On September 5, 1952, the following opinion was filed:
PER CURIAM.
In the case at bar, the state was asserting title to a lake bed and the iron ore lying thereunder upon the theory that the waters of the lake or pond (known as Pond A) were navigable at the time this state was admitted to the Union.
This was a registration proceeding in which the state was named as a party defendant and elected to file an answer asserting title to the bed of Pond A. We held that Pond A was not navigable at the determinative time and that the state had no title to the bed of the pond.
The clerk of this court took the position that the state was involved in the case in its proprietary, not its sovereign, capacity and, upon application, taxed costs and disbursements against the state.
In our opinion, the case falls clearly within the rule announced in State v. McCoy, 228 Minn. 420, 425, 38 N.W. (2d) 386, 389, our latest adjudication upon the subject, in which we held that costs and disbursements were taxable against the state where it was, as here, acting in its proprietary capacity in unsuccessfully claiming title to certain bank deposits which it alleged had been abandoned by the depositors and which it claimed had, consequently, escheated to the state. We held there, following State v. Buckman, 95 Minn. 272, 104 N.W. 240, 289, and State v. Fullerton, 124 Minn. 151, 144 N.W. 755, that, in cases where the state unsuccessfully asserted its proprietary interests, costs and disbursements were taxable against it. In the Buckman case, the state unsuccessfully sought recovery for alleged trespass on lands it alleged were owned by it. In the Fullerton case, it unsuccessfully sought recovery of funds from the secretary and treasurer of the board of medical examiners.
In State ex rel. Smiley v. Holm, 186 Minn. 331, 243 N.W. 133, Mr. Chief Justice Wilson, speaking for the court, held that the secretary of state was there acting for the state in its sovereign *357 capacity, but discussed at length the distinction between the state's proprietary and sovereign capacity and cited and discussed all the cases theretofore decided by this court. He there said (186 Minn. 332, 243 N.W. 133):
"* * * It is only in exceptional cases that the state is liable for costs and disbursements. While acting in its sovereign character it is immune; but when it descends to the level of those with whom it associates and interests itself in property and proprietary rights as distinguished from governmental prerogatives, it subjects itself to the same liability for costs and disbursements as any litigant. The statute which allows costs and disbursements `in every action,' G.S. 1923 (2 Mason, 1927) § 9473, is subject to this exception in favor of sovereignty." (Italics supplied.)
This language was quoted with approval in State v. McCoy, supra, our latest pronouncement of the rule.
State, by Peterson, v. Bentley, 224 Minn. 244, 28 N.W. (2d) 179, 770, cited by the state, was a condemnation proceeding where M.S.A. 117.20 (2) was not applicable and the state was acting in its sovereign, not its proprietary, capacity.
The clerk's taxation is affirmed.
NOTES
[1] Reported in 54 N.W. (2d) 912.
[2] Genevra Bingenheimer and Emma M. Wilkinson each claims an undivided one-quarter interest in the entire 40-acre tract, and Oliver Iron Mining Company claims an undivided one-half interest.
[3] Under the Torrens Act, M.S.A. 508.01, et seq.
[4] L. 1943, c. 529, as amended, L. 1945, c. 124 (M.S.A. 541.023). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2003686/ | 54 N.W.2d 521 (1952)
In re TODD'S ESTATE.
No. 48078.
Supreme Court of Iowa.
July 28, 1952.
Clyde E. Herring, John E. Sarbaugh, of Des Moines, for appellant.
Henry T. McKnight, Des Moines, for appellee.
MANTZ, Justice.
Lucy A. Todd, of Des Moines, Iowa, died at Clarinda, Iowa, May 27, 1950. She was the widow of a Spanish American War veteran and as such drew a pension following his death. The pension was paid regularly thereafter. Some years before her death she became insane and was placed under guardianship and was taken to the State Hospital at Clarinda. Thereafter the expense of her care and keep were paid by Polk County, Iowa. After her death her estate was opened in Polk County and an administratrix appointed. At the time of the death of Mrs. Todd the guardian had on hand the sum of $1376.11, all proceeds of her pension. The guardianship was closed and this sum was turned over to the administratrix. Polk County made a claim against her estate for expenses paid for such care and keep. The administratrix resisted such claim on the ground that such sum having been received from her pension was exempt from the claims of creditors. She filed a final report showing payment of all claims except that of Polk County for the expense of decedent at said hospital. Polk County objected to said final report and asked that its claim be allowed. The trial court sustained such resistance holding the funds not liable for such claim. Polk County has appealed.
According to the records Lucy A. Todd, after being adjudicated an insane person was taken to the Clarinda State Hospital on March 28, 1947 and remained there until her death on May 27, 1950. During the period of her guardianship Polk County paid her expenses while so confined and on December 29, 1949, filed a claim in the guardianship for expenses already paid by said county and also for current future expenses. This claim was resisted by the Veteran's Administration on the grounds that the guardianship funds were exempt from creditor's claims on account of being derived from a United States pension.
After hearing upon said claim the court ordered the guardian to pay to Polk County *522 the current needs of the ward while in Clarinda, starting July 1, 1949, and thereafter whenever demand was made therefor by Polk County.
On June 21, 1951, the administratrix filed a final report in the estate which showed that all of the heirs of Lucy A. Todd were collateral. Said report failed to show that she had anyone dependent upon her. It further showed that there had been received from said guardian from the Veteran's Administration a sum total of $1376.11; that there had been paid out by the administratrix as estate expenses $505.08, leaving a balance on hand of $871.03. She asked that certain sums be allowed for attorney fees and costs of administration and that any balance remaining be distributed to the heirs at law of Lucy A. Todd, and that thereafter the administratrix be discharged and the estate closed. Polk County objected to the final report and again asked for allowance of its claim. Its denial is the basis of this appeal.
1. The question here involved is whether or not, under the Federal Statutes, the funds in the hands of the administratrix are exempt from the claims of the creditors of Lucy A. Todd, and particularly of Polk County, the claimant herein.
Both parties in brief and argument state that the only issue in the case is:
"Did Congress in enacting Section 454a, Chapter 10, Title 38, U.S.C.A., exempt the proceeds from a Federal Government pension paid to a widow of a Spanish American War Veteran, from the claims of her creditors after her death while the proceeds are in her estate?"
The applicable parts of 38 U.S.C.A. § 454a are as follows:
"Assignability and exempt status of payments of benefits. Payments of benefits due or to become due shall not be assignable, and such payments made to, or on account of, a beneficiary under any of the laws relating to veterans shall be exempt from taxation, shall be exempt from the claims of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. Such provisions shall not attach to claims of the United States arising under such laws nor shall the exemption herein contained as to taxation extend to any property purchased in part or wholly out of such payments."
Prior to the enactment of Sec. 454a there was in the Statutes of the U. S. what was designated "World War Veterans' Act, 1924" (Sec. 454) the applicable part being as follows:
"Assignability and exempt status of compensation, insurance, and maintenance and support allowances. The compensation, insurance, and maintenance and support allowance payable under Parts II, III, and IV, respectively, shall not be assignable; shall not be subject to the claims of creditors or any person to whom an award is made under Parts II, III, or IV; and shall be exempt from all taxation. Such compensation, insurance, and maintenance and support allowance shall be subject to any claims which the United States may have, under Parts II, III, IV, and V, against the person on whose account the compensation, insurance, or maintenance * * * is payable.
"The provisions of this section shall not be construed to prohibit the assignment by any person to whom converted insurance shall be payable under Part III of this chapter of his interest in such insurance to any other member of the permitted class of beneficiaries."
In providing for pensions for veterans of the Spanish American War Congress enacted 38 U.S.C.A. § 364a, to persons in order of precedence to the unmarried widow, and in some cases to the minor and disabled children, and the dependent parents of a deceased veteran regardless of the cause of the death of the veteran, but to no other persons. (Italics supplied).
When Sec. 454a above set forth was enacted there was in the statutes of the U. S.
*523 (Revised Statutes) Sec. 4747, 38 U.S.C.A. § 54, which is as follows: "No sum of money due, or to become due, * * * shall be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, whether the same remains with the Pension-Office, or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto, but shall inure wholly to the benefit of such pensioner."
In the case of Appanoose County v. Carson, 210 Iowa 801, 229 N.W. 152, the court had before it the question of the exemption from seizure of the proceeds of pension money. After quoting the above statute, (Sec. 4747 Revised U.S. Statutes) the Iowa court in support of its holding that the pension was for the benefit of the veteran quoted from the case of McIntosh v. Aubrey, 185 U.S. 122, 22 S.Ct. 561, 563, 46 L.Ed. 834, wherein the U. S. Court, speaking of such section, held that pension funds in the hands of an administrator of the estate of such pensioner within the terms of the statute were not funds to "become due" nor were they "in the course of transmission". That they were in the hands of the representative in the estate and were the proceeds of sums paid for the personal benefit of the pensioner. The Iowa opinion then said [210 Iowa 801, 229 N.W. 154]: "It would be doing violence to the obvious language and plain meaning of the statute to hold that, after the decease of the pensioner and after the funds had been delivered to the administrator, they were then being held by the administrator `in the course of transmission to the pensioner.'"
The opinion in Appanoose County v. Carson, supra, proceeded to consider the act of March 2, 1895 (28 Statutes at Large 964) dealing with pensions accrued at the death of the pensioner holding such funds to be exempt from claims of creditors, etc., and should not be considered a part of the estate, nor be liable for his debts, but should inure for the benefit of the widow or children.
In the case of Tama County v. Kepler, 187 Iowa 34, 173 N.W. 912, said section was considered. It appeared that the pensioner had been adjudged insane, had been confined to a hospital and the county had expended money for his care and support. The pensioner died intestate leaving no spouse or direct heirs. There had been a guardian and at the death of the pensioner the guardian was appointed administrator. This court held that the funds on hand, being in the hands of the guardian were not part of the pensioner's estate.
In Appanoose County v. Carson, supra, the court reexamined the holding in Tama County v. Kepler, supra, and held that "accrued funds" as the term was used in the statute meant funds in the hands of the guardian were not a part of the pensioner's estate and were not liable to creditors. In so doing the opinion in Appanoose County v. Carson stated: "Notwithstanding the pronouncement in the Tama County Case, we are now of the opinion that the said statute has no application whatever to pension funds that have wholly accrued during the life of the pensioner and have been in fact paid into the hands of the guardian of said pensioner during the pensioner's lifetime, and have been allowed to accumulate in his hands and have subsequently been turned over to the administrator of the pensioner's estate. We think there is a clear distinction between `accrued pensions' under said act of Congress, and accumulated or amassed pension funds which have been paid in full to the pensioner or his guardian and have been allowed to accumulate, collect, or amass in his hands, and have been turned over to the administrator of the pensioner's estate."
Further the court said: "We are constrained to hold that our conclusion in the Tama County Case, applying the rule with respect to the funds of a pensioner in the hands of a guardian to the funds of a deceased pensioner in the hands of his administrator, was erroneous, and it must be and is overruled."
The administratrix relies upon the provisions of Section 454a, already set forth, as supporting her claim that the funds in her hands arising out of the pension of Lucy A. Todd are exempt from claims of creditors. We have held that exemption of property from the payment of debts is *524 purely statutory and courts may not enlarge the exemptions. Exemptions are statutory and while it is true that such grants are to be liberally construed, yet the grant must appear in the statute, or no exemption can exist. It is not for the court to say that the legislation intended a larger grant of exemptions than is given in the plain wording of the statute. Voris v. West, 180 Iowa 138, 162 N.W. 836; Morgan & Hunter v. Rountree, 88 Iowa 249, 55 N.W. 65; Dunbar v. Spratt-Snyder, 208 Iowa 490, 226 N. W. 22, 63 A.L.R. 1016.
In the case of Carrier v. Bryant, 1939, 306 U.S. 545, 59 S.Ct. 707, 83 L.Ed. 976, the issue before the court was whether U. S. bonds purchased out of a veteran's benefits and held as investments were subject to execution by a creditor of the veteran. In construing Sec. 454a, 38 U.S.C.A. the court refused to infer an exemption of such bonds from the claims of creditors.
In the case of McIntosh v. Aubrey, supra, there was an ejectment action by Aubrey who was a grantee in a sheriff's deed of the McIntosh land sold in 1897 on a creditor's judgment against Mrs. McIntosh. She had acquired the land with pension money as a widow of a Civil War Veteran and she contended that the land was exempt from execution under R.S. Sec. 4747. The Pennsylvania Common Pleas Court held against her. Aubrey v. McIntosh, 10 Pa.Super. 275. The U. S. Supreme Court affirmed and in so doing held that when the pension money had been paid to him it inured wholly to his benefit and was liable to seizure as opportunity presented itself. See also Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398,94 L.Ed. 424.
This same matter was discussed at length in In re Guardianship of Bagnall, 238 Iowa 905, 29 N.W.2d 597. Therein, Bliss, J., discussed the rules and cases at length with reference to exemptions under U. S. Statutes, Sec. 454.
As heretofore stated Section 454 was repealed and Section 454a enacted in its stead. It would seem that the latter was enacted to clarify and make more definite the matters dealt with in the two sections. In the case of Lawrence v. Shaw, 300 U. S. 245, 57 S.Ct. 443, 445, 81 L.Ed. 623, the court had before it the question of whether compensation and insurance benefits should be exempt from all taxation. In discussing the matter the court said: "This more detailed provision was substituted for that of the earlier act and was expressly made applicable to payments theretofore made. We think it clear that the provision of the later act was intended to clarify the former rather than to change its import and it was with that purpose that it was made retroactive."
Consequently the question presents itself: Were the funds in the estate exempt under the provisions of the Federal law, Sec. 38 U.S.C.A. § 454a. This statute has been hereinbefore set forth.
It is the claim of appellant that when congress enacted laws relating to veteran's compensation, pensions, bonuses and relief were intended to benefit the veteran and his immediate family and to benefit no other persons.
The record and the final report of the administratrix showed that Lucy A. Todd died intestate and at her death was a patient at the Clarinda State Hospital and that her expenses there had been paid by Polk County; that the only money on hand came from her pension as the widow of a Spanish American War Veteran; that she left surviving two sisters and a brother, all adults. No claim has been made by the administratrix of anyone dependent upon the deceased. The resistance to the claim of Polk County, Iowa, is that the fund on hand is not liable to the claims of creditors.
However, the record shows that before the death of Lucy A. Todd, and while she was an inmate of said Clarinda State Hospital and under guardianship, Polk County filed a claim against said guardianship for its reimbursement for sums paid for her support in said institution and for current future support. The Veteran's Administration resisted such claim on the ground that such pension fund was exempt from such claim. After hearing the court ordered future current expense to be paid therefrom and to start July 1, 1949 and to continue in the future. No appeal was taken from said order. Lucy A. Todd remained in said hospital until her death May *525 27, 1950. It will be noted that the administratrix in the present proceedings set up the same defense against the claim of Polk County as was urged by the Veteran's Administration in the guardianship proceeding, the only difference being that on July 29, 1949, Lucy A. Todd was living.
In the instant case the court held the immunity granted by the U. S. Statute, 38 U.S.C.A. § 454a, above quoted and construed such exemption of the Spanish War pension not only to the pensioner and her guardian but after her decease to collateral heirs, to wit, sisters and a brother and denied the claim of Polk County for its expenditure for the benefit of the pensioner. This holding grants immunity of said pension in the hands of the administratrix and in favor of those not mentioned in the exemption statute 454a, and the statute it succeeded, Sec. 454. We hold that such holding is directly contrary to that of Appanoose County v. Carson, supra; In re Guardianship of Bagnall, supra; Walker v. Queener, 174 Tenn. 129, 124 S.W.2d 236; Auditor General v. Olezniczak, 302 Mich. 336, 4 N.W.2d 679; In re Buxton's Estate, 246 Wis. 97, 16 N.W.2d 399; In re Guardianship of Letourneau, 238 Wis. 473, 300 N.W. 248; Carrier v. Bryant, supra; Iowa Methodist Hospital v. Long, 234 Iowa 843, 12 N.W.2d 171, 150 A.L.R. 440; Howard v. Davis, 192 Ga. 505, 15 S.E. 865.
In In re Guardianship of Bagnall, supra, Bliss, J., made a full and complete analysis of various U. S. statutes dealing with pensions, compensation and benefits of veteransstatutes dealing with exemption from taxation or seizure by creditors. In that case the divorced wife of a veteran sought to reach pension funds to pay alimony awarded her in the divorce decree. The court held that investments from pensions were not exempt from seizure for such alimony. Many cases were cited and discussed. It was there stated that section 454a was simply to make certain and definite Section 454.
Most of the holdings of the various courts are to the effect that the legislation as to pensions, compensation and the like is to afford economic security for servicemen and their dependents. We hold that while the exemption statutes are to be liberally construed and in keeping with the purpose of the legislative enactment they are not to be enlarged. Morgan & Hunter v. Rountree, supra; McIntosh v. Aubrey, supra; Tompkins v. Tompkins, 132 N.J. L. 217, 38 A.2d 890. The holding in the Bagnall case referred to the prior holding in the case of Appanoose Co. v. Carson, supra, to the effect that under both state and federal statutes pension funds paid by a guardian to an administrator are not exempt from the debts of deceased pensioner when in the hands of such administrator.
We have examined the cases which the trial court cited in behalf of its ruling; also, various ones cited by the administratrix in her briefs. We recognize that there are various holdings which seem to uphold the contention of the administratrix. Said administratrix places emphasis upon In re McCormick's Estate, 169 Misc. 672, 8 N.Y. S.2d 179 (Surrogate's Court). This involved a U. S. policy of War Risk Insurance. The assured made the policy to his father. At the death of assured payments were made to his father. The father died and it was sought by a creditor to reach the unpaid part for payment of expenses incurred in taking care of the deceased veteran. The court refused to allow the claim. The court and the administratrix both cite Pagel v. Pagel, 291 U.S. 473, 54 S.Ct. 497, 78 L.Ed. 921. This case likewise involved insurance and in its opinion the U. S. Court ruled that under Sec. 454 the exemption did not extend beyond the insured and the beneficiary. In the instant case the administratrix argues that as Congress later enacted Sec. 454a the above ruling did not apply to the instant case. The basic argument of the administratrix is that Sec. 454a repealed Sec. 454 and enlarged the operation as to U. S. pensions, compensation and benefits.
We are satisfied that the purpose behind the granting of pensions and other benefits was the welfare of the veteran and others designated by statute. In many of the cases coming before the courts it has been said that the primary purpose was to protect the pensioner and others designated by *526 statute. Pensions are granted to provide for the care and support of such pensioners in order to prevent them from becoming public charges. They are purely statutory. In short, the pension granted is for pensioner and his dependents. When such need ends the necessity ends and the unexpended accumulations properly become a part of the pensioner's estate, and are to be disposed of according to law. Appanoose County v. Carson, supra. It seems to us that to allow remote and collateral heirs to become recipients of the pension bounty would be contrary to the spirit and purpose of pension enactments.
In re McCormick's Estate, supra, relied upon by the administratrix, a surrogate court of King's County, New York, dealt with an exemption of insurance benefits and therein construed U.S.C.A. § 454a. It was the claim there that such section broadened the exemption of section 454 to cover funds after the death of the beneficiary. This decision was not passed upon by the appellate court of New York. We think that it was contrary to the opinion of the United States Supreme Court in Lawrence v. Shaw, supra, wherein that court said that section 454a "was intended to clarify the former [provision] rather than to change its import". Also, the surrogate court did not have the benefit of a later decision of the U. S. Supreme Court, Carrier v. Bryant, supra.
Attention is further called to a holding of the New York court following the Mc-Cormick case in the Matter of the Stevens Estate, 1941, 261 App.Div. 48, 24 N.Y.S.2d 786. The McCormick case was decided in 1938. In the Stevens Estate the appellate court, in reversing a holding of the surrogate court, held that creditors of a deceased widow of a veteran of the Civil War can reach assets of the deceased widow, which assets were proceeds of the widow's pension. This was a fact situation almost identical with the instant case.
We hold that neither statute, 454 nor 454a was intended to extend the exemption to Lucy A. Todd beyond her death. We hold that such construction is just, fair and reasonable, and in keeping with the spirit of pension legislation as construed by the supreme court of Iowa and by the United States supreme court.
Attention is called to the hearings in Congress at the time of the enactment of 38 U.S.C.A. § 454a. Some of these are shown by footnotes appended to the legislative enactment, to set out the purpose of such enactment. Footnote No. 11 deals with pensions to Widows and Children after May 1, 1926, and, in substance states that the unmarried widow of a veteran of the Spanish American War shall be placed upon the pension roll and that each child until it reaches the age of 16 shall be eligible to such pension. Such footnote is appended as explanatory to the enactment. Obviously it was the purpose of Congress to benefit the widow and children under 16 years of a deceased Spanish American War veteran. There is no mention therein of benefits extending to collateral heirs such as those of Lucy A. Todd.
We do not think it necessary to elaborate further or review cited cases. We hold that the trial court erred in not sustaining the objections made by Polk County to the final report of the administratrix. The pension received by Lucy A. Todd was for her support as a widow of a veteran of the Spanish American War. This was paid only in part by her guardian and not at all by the administratrix of her estate. We hold that Polk County should be repaid so far as the funds in the hands of the administratrix will go.
Reversed and remanded.
MULRONEY, C. J., and SMITH, BLISS, OLIVER, WENNERSTRUM and HAYS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2126538/ | 740 N.W.2d 534 (2007)
276 Mich. App. 165
PEOPLE of the State of Michigan, Plaintiff-Appellee,
v.
Kenneth D. SCHUMACHER, Defendant-Appellant, and
Alternative Fuels, L.C., Defendant.
Docket No. 267624.
Court of Appeals of Michigan.
Submitted June 5, 2007, at Grand Rapids.
Decided June 28, 2007, at 9:00 a.m.
Released for Publication October 11, 2007.
*538 Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Heather S. Meingast, Assistant Attorney General, for the people.
Foster, Swift, Collins & Smith, P.C. (by Webb A. Smith and Pamela C. Dausman), Lansing, for Kenneth D. Schumacher.
Before: KIRSTEN FRANK KELLY, P.J., and MARKEY and SMOLENSKI, JJ.
MARKEY, J.
Defendant Kenneth D. Schumacher appeals by leave granted the circuit court's order affirming his conviction after a jury trial on a charge of unlawful disposal of scrap tires.[1] The trial court sentenced defendant as a second or subsequent offender to 270 days in jail and a $10,000 fine. MCL 324.16909(3). Although the circuit court affirmed defendant's conviction, it granted defendant bail pending appeal and otherwise stayed the sentence. We affirm.
Defendant was convicted of violating § 16902(1) of the Natural Resources and Environmental Protection Act (NREPA), MCL 324.101 et seq., which is set forth in part 169 of that act, MCL 324.16901 et seq. At the time of the offense,[2] § 16902(1), MCL 324.16902(1), provided:
*539 A person shall deliver a scrap tire only to a collection site registered under section 16904, a disposal area licensed under part 115, an end-user, a scrap tire processor, a tire retailer, or a scrap tire recycler, that is in compliance with this part.
Defendant first argues that the prosecution presented insufficient evidence to sustain his conviction. This claim requires that we review de novo the trial evidence in a light most favorable to the prosecution and determine whether a rational trier of fact could have found that all the elements of the offense were proved beyond a reasonable doubt. People v. Tombs, 472 Mich. 446, 459, 697 N.W.2d 494 (2005). Circumstantial evidence and reasonable inferences therefrom may be sufficient to prove all the elements of an offense beyond a reasonable doubt. People v. Nowack, 462 Mich. 392, 400, 614 N.W.2d 78 (2000). Moreover, in reviewing a sufficiency-of-the-evidence claim, we must defer to the fact-finder by drawing all reasonable inferences and resolving credibility conflicts in support of the jury verdict. Id.
First, defendant argues that there was insufficient evidence to prove beyond a reasonable doubt that he knowingly violated the statute. The parties dispute whether § 16902(1) imposes strict liability or requires proof of scienter, i.e., that a person knowingly violated its terms, before a conviction may be sustained. Second, defendant argues on the basis of his interpretation of § 16902(1) and part 115 of NREPA, MCL 324.11501 et seq., that he did not violate the statute. Defendant's arguments raise issues of statutory interpretation, which are questions of law that this Court reviews de novo. Tombs, supra at 451, 697 N.W.2d 494. The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. People v. Williams, 475 Mich. 245, 250, 716 N.W.2d 208 (2006). If the statutory language is unambiguous, we presume that the Legislature intended the meaning expressed, and the statute must be enforced as written. People v. Morey, 461 Mich. 325, 330, 603 N.W.2d 250 (1999). "We must give the words of a statute their plain and ordinary meaning, and only where the statutory language is ambiguous may we look outside the statute to ascertain the Legislature's intent." Id.
We address first whether the statute requires as an element necessary for criminal liability that the accused knowingly violate its terms: Does the statute require proof of mens rea, or is it a strict-liability offense? "As a general rule there can be no crime without a criminal intent." Tombs, supra at 466, 697 N.W.2d 494 (TAYLOR, C.J., concurring), citing People v. Roby, 52 Mich. 577, 579, 18 N.W. 365 (1884) (COOLEY, C.J.). Nevertheless, "[a]lthough strict-liability offenses are disfavored, the Legislature has firmly rooted authority to create such offenses." People v. Adams, 262 Mich.App. 89, 91, 683 N.W.2d 729 (2004). Furthermore, the Legislature has no constitutional obligation to require proof of mens rea before imposing criminal liability for certain conduct. People v. Quinn, 440 Mich. 178, 185, 487 N.W.2d 194 (1992). Thus, the focus of our inquiry into whether § 16902(1) imposes strict liability is to ascertain what mental culpability the Legislature intended for a conviction for its violation. Id.
The requirement of having mens rea, or criminal intent, to establish criminal culpability has deep roots in our common-law tradition. Morissette v. United States, 342 U.S. 246, 250-252, 72 S.Ct. 240, 96 L.Ed. 288 (1952). "The contention that an injury can amount to a crime only when inflicted by intention is no provincial or transient notion." Id. at 250, 72 S.Ct. 240. Thus, *540 when state legislatures began codifying common-law offenses, courts held that criminal intent was a necessary element even if the statute was silent on the subject. Id. at 252, 72 S.Ct. 240. But the Morissette Court recognized exceptions to this rule of statutory construction: for example, "sex offenses, such as rape, . . . [and] offenses of negligence, such as involuntary manslaughter or criminal negligence and the whole range of crimes arising from omission of duty." Id. at 251 n. 8, 72 S.Ct. 240. The Morissette Court also approved strict liability for so-called "public welfare offenses" that had "very different antecedents and origins" than the common law. Id. at 252, 255, 72 S.Ct. 240. These criminal laws instead grew out of the need to regulate modern society after the Industrial Revolution. Id. at 252-256, 72 S.Ct. 240. The growth of society and technology "engendered increasingly numerous and detailed regulations which heighten the duties of those in control of particular industries, trades, properties or activities that affect public health, safety or welfare." Id. at 254, 72 S.Ct. 240. The Morissette Court opined that many so-called public-welfare offenses "do not fit neatly into . . . accepted classifications of common-law offenses, . . . but are in the nature of neglect where the law requires care, or inaction where it imposes a duty." Id. at 255, 72 S.Ct. 240. Further, the Court recognized that "[m]any violations of such regulations result in no direct or immediate injury to person or property but merely create the danger or probability of it which the law seeks to minimize." Id. at 255-256, 72 S.Ct. 240. Thus,
whatever the intent of the violator, the injury is the same, and the consequences are injurious or not according to fortuity. Hence, legislation applicable to such offenses, as a matter of policy, does not specify intent as a necessary element. The accused, if he does not will the violation, usually is in a position to prevent it with no more care than society might reasonably expect and no more exertion than it might reasonably exact from one who assumed his responsibilities. [Id. at 256, 72 S.Ct. 240.]
See, also, Roby, supra at 579, 18 N.W. 365 ("Many statutes which are in the nature of police regulations . . . impose criminal penalties irrespective of any intent to violate them; the purpose being to require a degree of diligence for the protection of the public which shall render violation impossible.").
In Quinn, our Supreme Court applied Morissette to MCL 750.227c to determine if the statute required proof of knowledge that the firearm was loaded as well as knowledge of its possession to sustain a conviction for transporting or possessing in a vehicle a loaded firearm other than a pistol. The Court first noted that if, as in this case, "the offense in question does not codify a common-law offense and the statute omits the element of knowledge or intent," the intent of the Legislature controls whether the offense requires proof of criminal intent. Quinn, supra at 186, 487 N.W.2d 194. The Court concluded that the Legislature intended that criminal culpability could arise "regardless of the actor's intent" and that the Court's construction of the statute "comports with the purpose of public welfare regulation to protect those who are otherwise unable to protect themselves by placing `the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger.'" Id. 186-187, 487 N.W.2d 194 (citation omitted).
In Adams, this Court analyzed MCL 750.165 to determine whether felony nonsupport is a strict-liability offense. The Adams Court noted several factors to consider in determining whether the Legislature intended an otherwise silent statute to *541 nevertheless require fault as a predicate to guilt:
(1) whether the statute is a codification of common law; (2) the statute's legislative history or its title; (3) guidance to interpretation provided by other statutes; (4) the severity of the punishment provided; (5) whether the statute defines a public-welfare offense, and the severity of potential harm to the public; (6) the opportunity to ascertain the true facts; and (7) the difficulty encountered by prosecuting officials in proving a mental state. [Adams, supra at 93-94, 683 N.W.2d 729.]
Applying the Adams factors to § 16902(1), we conclude that even if the Legislature did not intend to create true strict liability, § 16902(1) at most requires only that the prosecution prove that defendant "purposefully or voluntarily performed the wrongful act. . . ." See People v. Lardie, 452 Mich. 231, 241, 551 N.W.2d 656 (1996) (discussing "the distinction between a strict-liability crime and a general-intent crime"), overruled on other grounds by People v. Schaefer, 473 Mich. 418, 703 N.W.2d 774 (2005).
First, § 16902(1) does not codify a common-law crime. Rather, NREPA is a comprehensive statutory scheme containing numerous parts, all intended to protect the environment and natural resources of this state. See Neal v. Wilkes, 470 Mich. 661, 674, 685 N.W.2d 648 (2004) (CAVANAGH, J., dissenting), and Genesco, Inc. v. Michigan Dep't of Environmental Quality, 250 Mich.App. 45, 52-53, 645 N.W.2d 319 (2002). Part 169 of NREPA is itself a comprehensive regulatory measure to protect the public health, safety, and welfare from the increasing dangers of fire hazards and environmental damage attributed to growing stockpiles of scrap tires in our motor-vehicle-based society. Also, a violation of part 169 is only a misdemeanor with relatively minor penalties ranging from "imprisonment for not more than 90 days or a fine of not less than $200.00 or more than $500.00, or both," for a violation involving fewer than 50 tires, to "imprisonment for not more than 180 days or a fine of not less than $500.00 or more than $10,000.00, or both," for violations involving 50 or more tires. MCL 324.16909(1) and (2). Only second or subsequent offenders, such as defendant, may be punished by "imprisonment for not more than 1 year or a fine of not less than $1,000.00 or more than $25,000.00, or both. . . ." MCL 324.16909(3). Therefore, the offense contained in § 16902(1) fits the description of a public-welfare offense discussed by the United States Supreme Court in Morissette.
Second, the Legislature has nowhere included in part 169 a requirement that criminal culpability depend on the actor "knowingly" violating its terms. We note that in Tombs, Justice KELLY, writing for a majority on this issue, opined: "Absent some clear indication that the Legislature intended to dispense with the requirement, we presume that silence suggests the Legislature's intent not to eliminate mens rea" in the statute involved. Tombs, supra at 456-457, 697 N.W.2d 494. But the Court did not rely entirely on this presumption in holding that MCL 750.145c(3), which makes the distribution or promotion of child sexually abusive material a 20-year felony, "requires that an accused be shown to have had criminal intent to distribute or promote." Tombs, supra at 448, 697 N.W.2d 494. Rather, the Court held that the Legislature had affirmatively required criminal intent by using the words "distribute" and "promote." Discussing the meaning of these words, Justice KELLY wrote:
The most applicable dictionary definition of "distribute" implies putting items *542 in the hands of others as a knowing and intentional act. Likewise, the terms "promote" and "finance," and the phrase "receives for the purpose of distributing or promoting" contemplate knowing, intentional conduct on the part of the accused.
The use of these active verbs supports the presumption that the Legislature intended that the prosecution prove that an accused performed the prohibited act with criminal intent. [Id. at 457, 697 N.W.2d 494.]
In contrast, § 16902(1) contains no language from which it may be inferred that guilty knowledge is a required element for offending its mandate, which provides that "[a] person shall deliver a scrap tire only to a collection site registered under section 16904, a disposal area licensed under part 115, an end-user, a scrap tire processor, a tire retailer, or a scrap tire recycler, that is in compliance with this part." MCL 324.16902(1). Likewise, § 16909 states merely that a person "who violates this part" may be punished as specified previously. MCL 324.16909(1) and (2).
In the present case, the evidence was sufficient for a rational fact-finder to conclude that defendant knowingly and voluntarily caused more than 500 scrap tires to be delivered to Robinson Farms. Defendant admitted as much to Department of Environmental Quality (DEQ) investigator Terrance Hartman, who testified that defendant indicated that he had directed 9 or 10 loads of scrap tires to the location. Further, Alternative Fuels operations manager Mashelle Sager testified that defendant was the fuel coordinator who made sure that "tires come in and fuel goes out[.]" On the other hand, Sager testified that, although she did not believe that Robinson Farms was a licensed scrap-tire facility under part 169, she did believe that it "was a landfill under Part 115." Similarly, Kamala Robinson testified that she believed that Robinson Farms was "legal" and that when defendant asked her if she was allowed to take the tires, she told him: "Yes. I'm a dump." Thus, defendant's claim is not that he did not cause the scrap tires to be delivered to Robinson Farms, but that he did not realize his actions were illegal. Consequently, this case is factually distinguishable from Tombs because the defendant in that case never expected that the child sexually abusive material on the laptop he returned to his employer would be viewed by anyone; he thought it would be erased. See People v. Hill, 269 Mich.App. 505, 521-523, 715 N.W.2d 301 (2006) (distinguishing Tombs because the defendant intentionally created compact discs containing child sexually abusive material but claimed he did not realize his acts were illegal). "Tombs does not stand for the proposition that ignorance of the law supports a reduction or dismissal of charges." Id. at 523, 715 N.W.2d 301.
The plain language of § 16902(1) places the burden on the person delivering scrap tires to determine that the recipient site is one of the enumerated lawful places to dispose of scrap tires. Rather than relying on Kamala Robinson's assurances, defendant could easily have discovered that the site's last license for accepting waste expired in 1972 and that neither the local health department nor the state of Michigan had issued a permit for the site for almost 30 years. Thus, defendant had "the opportunity to ascertain the true facts," and this case demonstrates "the difficulty encountered by prosecuting officials in proving a mental state." Adams, supra at 94, 683 N.W.2d 729. Accordingly, we conclude that the Legislature intended in § 16902(1) to establish a so-called public-welfare offense: the only intent necessary to establish its violation is that the *543 accused intended to perform the prohibited act. Morissette, supra at 253-256, 72 S.Ct. 240; Roby, supra at 579, 18 N.W. 365. The evidence presented at trial was more than sufficient for a rational jury to find that defendant knowingly and voluntarily caused more than 500 scrap tires to be delivered to Robinson Farms, which was not "a collection site registered under section 16904, a disposal area licensed under part 115, an end-user, a scrap tire processor, a tire retailer, or a scrap tire recycler, that is in compliance with" part 169 of NREPA. MCL 324.16902(1).
Defendant next argues that he did not violate § 16902(1) because Robinson Farms could lawfully operate without a license as a "Type B" transfer station under part 115 of NREPA. Defendant relies on § 11529(1) of part 115 of NREPA, which provides in pertinent part:
A disposal area that is a solid waste transfer facility is not subject to the construction permit and operating license requirements of this part if either of the following circumstances exists:
(a) The solid waste transfer facility is not designed to accept wastes from vehicles with mechanical compaction devices.
(b) The solid waste transfer facility accepts less than 200 uncompacted cubic yards per day. [MCL 324.11529(1).]
Defendant equates the fact that Robinson Farms could lawfully operate without a license as a "Type B" transfer station under part 115 with being "a disposal area licensed under part 115" within the meaning of § 16902(1). (Emphasis added.) We reject defendant's interpretation of § 16902(1) as being contrary to its plain terms. Although a solid-waste transfer facility may be a "disposal area" under part 115, MCL 324.11503(4)(a), Robinson Farms' ability to operate lawfully under § 11529(1) without a license to receive small-scale solid waste does not confer on it a license to do so. Rather, Robinson Farms is exempted from the licensing requirements of part 115, providing that it limits its activity to that specified in § 11529(1) and otherwise complies "with the operating requirements of this part and the rules promulgated under this part." MCL 324.11529(2). In sum, the evidence at trial established that Robinson Farms was not licensed under part 115 of NREPA, and no evidence that Robinson Farms could do certain things lawfully without a license changes that fact. Because Robinson Farms was not licensed under part 115, it was not "a disposal area licensed under part 115" within the meaning of MCL 324.16902(1). Defendant's sufficiency-of-the-evidence argument based on his construction of the statute fails.
Next, defendant argues that he was denied due process by the prosecution's failure to provide him exculpatory information until after his trial. Due process requires the prosecution to disclose evidence in its possession that is exculpatory and material, regardless of whether the defendant requests the disclosure. Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); People v. Stanaway, 446 Mich. 643, 666, 521 N.W.2d 557 (1994). We review de novo defendant's constitutional due process claim. People v. Izarraras-Placante, 246 Mich. App. 490, 493, 633 N.W.2d 18 (2001).
Defendant argues that a posttrial, January 31, 2005, letter from the DEQ to Alternative Fuels advising that the DEQ would grant Alternative Fuels' application for registration as a scrap-tire hauler establishes that the DEQ was satisfied with the status of the Robinson Farms site. Defendant contends the letter demonstrates that the Robinson Farms site satisfied § 16902(1) because the letter stated: "Disposal of tires at a *544 sanitary landfill must comply with Part 115, Solid Waste Management, of the NREPA." We disagree with defendant's reading of the January 31, 2005, letter. The letter nowhere indicates that Robinson Farms is or was at the time of the violation "a disposal area licensed under part 115 . . . that is in compliance with" part 169 of NREPA. MCL 324.16902(1). Consequently, defendant has failed to establish any of the elements necessary to prove a Brady violation, which are "(1) that the state possessed evidence favorable to the defendant; (2) that the defendant did not possess the evidence nor could the defendant have obtained it with any reasonable diligence; (3) that the prosecution suppressed the favorable evidence; and (4) that had the evidence been disclosed to the defense, a reasonable probability exists that the outcome of the proceedings would have been different." People v. Cox, 268 Mich.App. 440, 448, 709 N.W.2d 152 (2005).
Next, defendant argues that he was denied his constitutional right to not be compelled to be a witness against himself in a criminal trial. U.S. Const., Am. V ("No person shall be . . . compelled in any criminal case to be a witness against himself. . . ."); see, also, Const. 1963, art. 1, § 17 ("No person shall be compelled in any criminal case to be a witness against himself. . . ."). The essence of defendant's argument is that he was forced to choose between either testifying to rebut the prosecution's theory of the case that defendant and Alternative Fuels were one and the same or exercising his right to not testify. Alternatively, defendant argues that he was denied a fair trial by the prosecutor's misconduct. Because defendant failed to object at trial to the prosecution's argument and evidence regarding this issue, our review is for plain error affecting defendant's substantial rights. People v. Carines, 460 Mich. 750, 763-764, 597 N.W.2d 130 (1999).
Defendant offers no argument on how his situation differs from that of every other person against whom the government brings criminal charges, nor does he offer any authority to support his novel claim that the dilemma an accused faces in deciding whether to testify implicates the constitutional guarantee prohibiting compelled self-incrimination. "`An appellant may not merely announce his position and leave it to this Court to discover and rationalize the basis for his claims, nor may he give only cursory treatment [of an issue] with little or no citation of supporting authority.'" People v. Watson, 245 Mich. App. 572, 587, 629 N.W.2d 411 (2001), quoting People v. Kelly, 231 Mich.App. 627, 640-641, 588 N.W.2d 480 (1998). Accordingly, defendant has abandoned his constitutional claim. Watson, supra at 587, 629 N.W.2d 411.
Likewise, defendant's argument that the prosecutor engaged in misconduct is without merit. The prosecutor presented evidence from which an inference could be drawn that defendant controlled Alternative Fuels, even if he was not an owner or member. The prosecutor stated at the beginning of the trial, "I would argue to you or submit to you at this time that the evidence will show that really, Ken Schumacher is Alternative Fuels." In closing argument, the prosecutor stated:
You heard two witnesses from the State that they believed all right through their all their dealings with Alternative Fuels that who is and what is Alternative Fuels? Ken Schumacher is Alternative Fuels. He's the one calling the shots over there. We find out that . . . he determines what tires are coming in and what tires are going out.
*545 Although a prosecutor may not make a statement of fact to the jury that is unsupported by the evidence, Stanaway, supra at 686, 521 N.W.2d 557, he or she is free to argue the evidence and all reasonable inferences arising from it as they relate to the prosecution's theory of the case, People v. Bahoda, 448 Mich. 261, 282, 531 N.W.2d 659 (1995); Watson, supra at 588, 629 N.W.2d 411. Consequently, defendant has failed to establish that plain error affected his substantial rights. Carines, supra at 763-764, 597 N.W.2d 130.
Defendant next contends that the prosecution improperly elicited legal opinions from DEQ investigator Hartman regarding whether the Robinson Farms site complied with parts 115 and 169 of NREPA, i.e., whether it was a lawful place to dispose of scrap tires. Defendant argues that the testimony invaded the province of the trial court to instruct the jury regarding the law, see People v. Drossart, 99 Mich.App. 66, 75-76, 297 N.W.2d 863 (1980), and caused juror confusion. Defendant failed to object to Hartman's testimony at trial, and so we review this issue for plain error affecting defendant's substantial rights. Carines, supra at 763-764, 597 N.W.2d 130.
In general, a witness may not testify on questions of law because it is the trial court's responsibility to determine the applicable law. People v. Dewald, 267 Mich.App. 365, 377, 705 N.W.2d 167 (2005). Hartman was the DEQ's chief investigator and the instigator of the criminal charges against defendant. The testimony that defendant finds objectionable was Hartman's explanation why he believed that § 16902(1) had been violated. We conclude that this testimony did not affect defendant's substantial rights for several reasons. First, we have already rejected defendant's interpretation of § 16902(1): that Robinson Farms ability to operate as an unlicensed "Type B" transfer station authorized it to receive scrap tires. Second, defendant was permitted to cross-examine Hartman regarding his, and the prosecution's, theory of the case. Furthermore, defendant was allowed to present his own public-health expert to testify regarding the pertinent statutory provisions. Defendant does not contend that the trial court improperly instructed the jury, which was free to accept or reject any witness's testimony. See Dewald, supra at 377, 705 N.W.2d 167. Finally, from the fact that criminal charges were instituted, the jury was already aware that Hartman must have believed that the disposal of more than 500 scrap tires at Robinson Farms was unlawful. See People v. Dobek, 274 Mich.App. 58, 71, 732 N.W.2d 546 (2007). For all these reasons, we conclude that defendant has not established that plain error affected his substantial rights. Carines, supra at 763-764, 597 N.W.2d 130.
Last, defendant argues that the prosecution improperly introduced defendant's alleged confession into evidence before establishing the corpus delicti of the charged offense. Because defendant did not contemporaneously object to Hartman's testimony regarding defendant's statements, our review is limited to whether plain error affected defendant's substantial rights. MRE 103(a) and (d); People v. Ish, 252 Mich.App. 115, 116, 652 N.W.2d 257 (2002).
In a criminal prosecution, proof of the corpus delicti of a crime is required before the prosecution may introduce a defendant's inculpatory statements. People v. McMahan 451 Mich. 543, 548, 548 N.W.2d 199 (1996). "The corpus delicti rule is designed to prevent the use of a defendant's confession to convict him of a crime that did not occur." People v. Konrad, 449 Mich. 263, 269, 536 N.W.2d 517 *546 (1995). Under the corpus delicti rule, "a defendant's confession may not be admitted unless there is direct or circumstantial evidence independent of the confession establishing (1) the occurrence of the specific injury . . . and (2) some criminal agency as the source of the injury." Id. at 269-270, 536 N.W.2d 517. Proof of the identity of the perpetrator of the crime is not part of the corpus delicti. Id. at 270, 536 N.W.2d 517. Moreover, the corpus delicti rule does not bar admissions of fact that do not amount to a confession of guilt. People v. Rockwell, 188 Mich.App. 405, 407, 470 N.W.2d 673 (1991). "If . . . the fact admitted does not of itself show guilt but needs proof of other facts, which are not admitted by the accused, in order to show guilt, it is not a confession, but an admission. . . ." People v. Porter, 269 Mich. 284, 290, 257 N.W. 705 (1934).
At trial, the prosecution's first witness was Rhonda Zimmerman, chief of DEQ's solid-waste-management unit. Zimmerman testified that Robinson Farms, at the time of the offense, was neither a registered scrap-tire collection site under part 169 nor a disposal area licensed under part 115 of NREPA. Next, Hartman testified that he went to Robinson Farms in response an anonymous tip that scrap tires were being improperly disposed of at the site. Hartman testified that, at the site, he observed several dumpsters and a pile of debris on the ground; he followed fresh tire tracks to the back of the property, where he found a large truck with a sign that said "Alternative Fuels," behind which was a large pile of tires. Hartman stated that Carl Allbee was the driver of the truck and was unloading scrap tires. Hartman testified that he went to the office of Alternative Fuels and introduced himself to defendant. He asked defendant why he was delivering scrap tires to the Robinson Farms site. According to Hartman, defendant stated that he was under a contract to take the tires to the property for the purpose of building a road and that there had been 9 or 10 loads of tires delivered to the site. Later in his testimony, Hartman stated that there were more than 500 scrap tires at the Robinson Farms site.
This record demonstrates that, before Hartman testified regarding defendant's admissions, the prosecution had introduced direct and circumstantial evidence independent of the admissions "establishing (1) the occurrence of the specific injury . . . and (2) some criminal agency as the source of the injury." Konrad, supra at 270, 536 N.W.2d 517. Specifically, from the testimony of Zimmerman and Hartman, apart from defendant's statements, it could be inferred that a large quantity of scrap tires had been deposited at a site that was neither a registered scrap-tire collection site under part 169 nor a disposal area licensed under part 115 of NREPA. Defendant's admissions went more to establishing his identity as a person responsible for the offense rather than being a confession of guilt. Konrad, supra at 270, 536 N.W.2d 517. Further, to the extent that defendant's statement provided evidence regarding the quantity of scrap tires at Robinson Farms site before Hartman testified about his own observations, the issue is one only of the mode and order of presenting the evidence. Had defendant raised a contemporaneous objection, the prosecution could have easily presented the additional independent evidence before presenting Hartman's testimony regarding defendant's admissions. Accordingly, defendant has failed to establish that plain error affected his substantial rights. Carines, supra at 763-764, 597 N.W.2d 130.
We affirm.
NOTES
[1] The circuit court reversed the conviction of Schumacher's codefendant, Alternative Fuels, L.C., on the basis of a lack of service, and it is not a party to this appeal. Consequently, our reference to "defendant" in this opinion is to Schumacher.
[2] We refer to the versions of the statutes in effect at the time of the offense, which was in September 2003. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2150922/ | 666 F.Supp. 1278 (1987)
Trolene DODD; Chris Boerner by His Next Friend, Fred Boerner; Beth Haynes, by Her Next Friend Larry Haynes; Margie Williams, by Her Next Friend Bettye Williams; Catherine Elsken, by Her Next Friend Mary Elsken; David A. Crook, by His Next Friend S.L. Crook; Arlis N. Young, by His Next Friend Arlis Young; Robert L. Ledbetter, by His Next Friend Larry Murry; Janice Baker, by Her Next Friend William Campbell; Wendell "Dirk" Brantley, by His Next Friend Dorothy Brantley, and Natalie Brown, by Her Next Friend Viola Brown, Plaintiffs,
v.
FORT SMITH SPECIAL SCHOOL DISTRICT NO. 100, Richard L. Mulloy, Jackie M. Farrar, and the William O. Darby Memorial Book Foundation, Defendants.
Civ. No. 87-2090.
United States District Court, W.D. Arkansas, Fort Smith Division.
July 27, 1987.
*1279 Douglas M. Carson, Daily, West, Core, Coffman & Canfield, Fort Smith, Ark., for plaintiffs.
Betsy Hall, of Hardin, Jesson & Dawson, P.K. Holmes, of Warner and Smith, Fort Smith, Ark., for defendants.
MEMORANDUM OPINION
H. FRANKLIN WATERS, Chief Judge.
The court has before it a motion for preliminary injunction or temporary restraining order. This case presents a very unique factual situation one which cannot be properly appreciated from an examination of the pleadings and other documentation in the file. A hearing on the motion was held June 10, 1987.
The controversy at hand emanates from a manuscript entitled "Portrait of a Hero, William Orlando Darby" and a derivative work allegedly "created" from it entitled "William Orlando Darby: A Man to Remember." William Orlando Darby was born and reared in Fort Smith, Arkansas. Darby was ranked among the most outstanding and brilliant combat commanders of World War II. He was responsible for organizing the 1st Ranger Battalion that was activated in June, 1942, and became known as Darby's Rangers. Darby Junior High bears his name to pay tribute to his outstanding military career.
There is no dispute that the original idea for the book came from Trolene Dodd, one of the plaintiffs in this action. From that point on, however, almost every aspect of *1280 the creation of the book is contested by the parties which resulted in the present lawsuit being filed on May 18, 1987.
Ms. Dodd conceived the idea to create a book on Darby shortly after being hired by the Fort Smith Special School District to act as a journalism and speech teacher at Darby Junior High. The idea of creating a book as a type of student effort was presented to Principal Mulloy. Principal Mulloy approved of the idea but allegedly informed Ms. Dodd that no school money could be committed to the project and that it would have to be entirely self-supporting.
At the beginning of the 1985-86 school year, Ms. Dodd presented the idea to her journalism class, telling the students that it would involve a considerable amount of effort and would require work above and beyond regular classroom assignments. Ms. Dodd and her students felt it was important that the students at Darby Junior High and members of the community become aware of some of the history of Darby.
According to the testimony given at the hearing, the project was looked on as a student enterprise. The students, with the supervision and a considerable amount of help from Ms. Dodd, set about raising the necessary funds and gathering information on the life of Darby. The necessary funding was raised by selling advertising space to area merchants. The spaces were sold with the promise that the ads would be placed throughout the book rather than being grouped together giving the advertisers the best "buy" for their money. Once the advertising space was sold, the students created the ads from information conveyed by the advertisers. The testimony showed that Principal Mulloy was aware of the student funding activity. In fact, it was agreed that Ms. Dodd could present an award to the student selling the most space. The money that was raised was placed in the journalism activity account which was accessed through the school secretary. This account had a zero balance at the beginning of the school year prior to the ad selling campaign.
The students and Ms. Dodd began a series of activities to collect information about Darby. The focus of the book was to be on the childhood and young adulthood of Darby prior to his becoming a war hero. This was partly because of the existence of several other books and a film which covered Darby's war years. This process of collecting the necessary information included public service announcements on radio and television, personal interviews with various members of the community who had known Darby, television appearances on a local show, gathering and in some cases taking photographs, researching pre-existing materials, and gathering information from various places where Darby had lived and worked.
Once the information was gathered, the students and Ms. Dodd began the process of compiling, creating, and editing the various works. Toward the last few weeks of school, Ms. Dodd and the student editors compiled the manuscript and selected a title. At this time the manuscript was handwritten.
Defendants contended Principal Mulloy had made it a condition that the Rangers approve the manuscript prior to publication and that the Rangers had rejected the manuscript. However, the testimony at the hearing established that at some point in the summer, Ms. Dodd forwarded the new materials the students had gathered to a member of the Ranger Foundation who found nothing objectionable in the new materials. Ms. Dodd felt that this was not a condition but rather a gesture of courtesy to the members of the Ranger Foundation and stated that she had a high regard for their opinion. As later testimony showed, when Mulloy and Farrar presented the manuscript to the Rangers seeking funding, a member of the Rangers expressed a desire to omit the ads and perhaps make some other changes if the Ranger Foundation was to fund the project. There was no rejection of the manuscript. The suggestions were made in the context of the Rangers providing funding.
After the materials were returned, Ms. Dodd arranged for the manuscript to be *1281 typed. She was later reimbursed for this expenditure from the funds placed in the activity fund. Several more steps were necessary prior to the manuscript being print ready. Once it was completed, Ms. Dodd placed the manuscript in a printer's hands to receive estimates. The plan was to have as many copies printed as there was money left from the ad campaign. Printing was to begin in the first part of October.
During the summer months, Ms. Dodd had resigned from her position with the school for personal reasons. At this point, after the book had been given to the printers, Principal Mulloy and Ms. Farrar approached Ms. Dodd and asked to see the book. Ms. Dodd got the manuscript back from the printer and allowed Mulloy and Farrar to look it over. Mulloy expressed dissatisfaction with the ads and especially with their being scattered throughout the book. When Ms. Dodd informed Mulloy and Farrar that the available money would only cover the cost of printing approximately 150 copies of the book, they expressed the desire to have at least 1,000 copies made. Some of the copies would be taken to Italy during a visit planned with Fort Smith's sister city, Cisterno, Italy.
Mulloy presented what appeared to be a solution to the funding problem. The suggestion was that he and Farrar would take the manuscript around and get some estimates of printing costs and solicit donations. Ms. Dodd agreed on the condition that she be allowed a final proof reading prior to printing. The only change discussed was the possibility of moving all the ads to the back of the book. Ms. Dodd was to get an estimate from her printer for 1,000 copies which she did and this estimate was verbally communicated to Farrar.
From this time on, the manuscript was out of the hands of Ms. Dodd and the students. Approximately one month later, Ms. Dodd contacted Mr. Mulloy and was told the ads would be left out altogether. Upon hearing this, Ms. Dodd suggested it would be necessary to contact the advertisers and offer their money back. Around the first part of December, Ms. Dodd first became aware that substantive changes were being made in the manuscript. It had been given to Mr. Altieri (an ex-Darby Ranger) for proofreading and he was also writing a section to be added to the book. Early in February Ms. Dodd was informed that the book was at the printers. Ms. Dodd testified that she had been informed by several people of changes in the book and that she became alarmed when she learned of an article appearing in the Southwest Times Record on April 24, 1987, in which an award was presented to Ms. Farrar for helping to preserve the historical heritage of Fort Smith. This same article stated that Ms. Farrar authored a book, "William Orlando Darby: A Man to Remember."
Ms. Dodd contacted Dr. Owen, the school's assistant superintendent, and expressed her concern that she and the students had authored the book and were not being given credit. Ms. Dodd further informed him that she was going to speak with Principal Mulloy that day. At this meeting, Ms. Dodd expressed her concern that the students were not being given proper credit. Mr. Mulloy felt that it was too late in the printing process and too expensive at this point to alter the author page in the book.
There was some additional discussion concerning the fact that the students had not been listed as authors in the original manuscript. In the manuscript what is considered the author page stated: "The 1985-86 Darby Journalism staff contributed many hard hours compiling this booklet." Below this statement the students' names were listed. In the printed book, "William Orlando Darby: A Man to Remember," the author page states it was "prepared and edited by Ms. Jackie Marie Farrar." Ms. Farrar's name is also listed on the spine of the book. A declaratory statement appears on page V which states the 1985-86 class under the direction of Ms. Dodd, "began the project of compiling a booklet on Bill Darby." A comparison of the manuscript and printed book reveals that much of the printed book has been "lifted" from the manuscript.
*1282 At Mulloy's suggestion, Ms. Dodd talked to Farrar concerning the lack of authorship credit being given to the students; little was accomplished at this meeting. According to Ms. Dodd's testimony, when she requested the original manuscript back, she was informed that it had been thrown away or destroyed. To date, Ms. Dodd has not received back her copy of the original manuscript.
As a result of Ms. Dodd's concern, and with the aid of Ms. Kramer, the president of the Fort Smith Classroom Teachers Association, a meeting was arranged with Dr. Goodin, the Superintendent, at which time Ms. Dodd was allowed to express her concern over the lack of credit being given to the students. Dr. Goodin directed Dr. Owen to prepare and insert a supplemental page into the printed book listing the students by name. This was done by inserting a sticker into the book containing the names of the students and the statement that the original idea and sponsor was Trolene Dodd.
It should be noted that the printed version of the book has been copyrighted in the name of the William O. Darby Memorial Book Fund. The "copyright holder" is apparently a non-existent entity in that it is merely the name of the checking account from which the printer was paid.
Ms. Dodd and the students who are plaintiffs in this action feel that they are not being given proper "authorship" credit for the creation of the book. In the words of one student who testified at the hearing, the credit given makes it "sound like we were just helpers, there to run errands." The complaint alleged that this course of conduct constituted a violation of the Copyright Act, 17 U.S.C. § 502, the Lanham Act, 15 U.S.C. § 1125, and 42 U.S.C. § 1983. A state law claim for conversion or misappropriation was also alleged.
At the conclusion of the hearing discussed above, the court, having some doubts as to whether subject matter jurisdiction existed in this case, requested the parties to brief several issues. This court, after having examined the briefs of the parties, has determined for the reasons stated below that subject matter jurisdiction is proper under the Lanham Act but not under the Copyright Act or section 1983.
I. Subject Matter Jurisdiction
Under the Copyright Act, 17 U.S.C. § 101 et seq., registration of the copyright, while not a prerequisite to having a protectable interest, is a jurisdictional prerequisite to the initiation of an infringement suit in federal court. 17 U.S.C. §§ 408(a) and 411. An infringement suit is any suit brought to enforce or protect the exclusive rights granted to copyright owners under the act. These exclusive rights include reproduction, adaptation, distribution, performance and display. 17 U.S.C. § 106. This Act has preempted all common law copyright protection that is equivalent to the protection granted by the Act. 17 U.S.C. § 301(a).
Since registration is a prerequisite to an infringement suit, subject matter jurisdiction in this suit cannot be premised on the Copyright Act as neither Ms. Dodd nor her students have registered their alleged copyright. Admittedly, this lack of registration is a result of the defendants' retention of the only copy of the manuscript, however, the Copyright Act does not provide any exceptions from the registration requirement.
A somewhat more complex question was presented by plaintiffs' assertion that they have been deprived under color of state law of a property and/or liberty interest and therefore have a cause of action based on 42 U.S.C. § 1983. Plaintiffs argue that a 1983 claim is appropriate, based on the deprivation of a property right, i.e., the unregistered copyright held by them, and a denial of the right of access to the courts premised on the retention by the defendants of the only copy of the manuscript thereby denying them access to federal court for copyright infringement.
The framework for analysis of 1983 claims premised on violations of federal statutory law has developed since Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 *1283 L.Ed.2d 555 (1980). In Thiboutot, the Supreme Court made clear that section 1983 encompassed claims based on purely statutory violations of federal law. Id. at 5, 100 S.Ct. at 2504.
The practical effect of Thiboutot was later limited by the Supreme Court in Middlesex County Sewerage Authority v. National Sea Clammers Association, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981), and Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981). These cases and their progeny direct the court to examine whether Congress intended the statutory enactment to be the exclusive vehicle through which the rights granted are enforced and, if this hurdle is passed, whether the statute at issue was the kind that created enforceable "rights" under section 1983.
In making the initial determination, i.e., whether the statute provides the exclusive remedies, it must be discerned whether the parties are attempting to enlarge or circumvent existing remedies and enforcement schemes or whether the claim presented constitutes a separate and distinct constitutional claim. Smith v. Robinson, 468 U.S. 992, 1005, 104 S.Ct. 3457, 3464-65, 82 L.Ed.2d 746 (1984); Moore v. Warwick Public School Dist. No. 29, 794 F.2d 322 (8th Cir.1986).
Plaintiffs assert that the governmental actions constitute interference even apart from the infringement of the literary material. An examination of the Copyright Act reveals that it was the intent of Congress to do away with the dual system of copyright that existed under the old act. Under the Copyright Act of 1976 protection is extended to unpublished works. Fixation is now the trigger mechanism which terminates common law copyright and activates federal statutory copyright. 17 U.S.C. § 301(b)(1). Under section 301(a), Congress provided for the preemption of all state and common law rights that are the "equivalent to any of the exclusive rights within the general scope of copyright." 17 U.S.C. § 301(a). Chapter 5 of the Act provides a comprehensive enforcement scheme and remedies for infringement of copyright. 17 U.S.C. § 501 et seq.
An examination reveals that the gravamen of the complaint is premised on a violation of the exclusive rights granted a copyright holder under the Copyright Act. The complaint alleges that defendants without consent created a derivative work from "Portrait of a Hero," reproduced the work, wrongfully identified the author, and announced the intention to distribute the work (in fact, after the complaint was filed some copies were distributed). When "a state official is alleged to have violated a federal statute which provides its own comprehensive enforcement scheme, the requirements of that enforcement procedure may not be bypassed by bringing suit directly under section 1983." Sea Clammers at 20, 101 S.Ct. at 2626 (quoting the dissenting opinion of Justice Stewart in Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 673 n. 2, 99 S.Ct. 1905, 1945 n. 2, 60 L.Ed.2d 508 (1979)).
In reaching this decision the court is mindful of the explosion of causes of action under section 1983. It should also be noted that the Eighth Circuit has previously warned against the broad expansion of section 1983. First Nat. Bank of Omaha v. Marquette Nat. Bank, 636 F.2d 195 (8th Cir.1980), cert. denied, 450 U.S. 1042, 101 S.Ct. 1761, 68 L.Ed.2d 240 (1981). Although such a decision seems harsh in this case, Congress' clear intent was to bring all copyright actions within the provisions of the Copyright Act. At the same time registration was made a jurisdictional prerequisite to an infringement action in federal court. To allow this suit under section 1983 would provide a method whereby plaintiffs could bypass the registration requirement.
Plaintiff, Ms. Dodd, also asserts a deprivation of property and/or liberty interest in her reputation. The Supreme Court in Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976), rejected the view that an individual had a liberty or property interest in their reputation alone. Reputation alone "apart from some more tangible interest such as employment," is *1284 neither a "liberty" nor "property" interest by itself sufficient to invoke the procedural protection of the Due Process Clause. Id. at 701, 96 S.Ct. at 1160. Here the plaintiff has failed to demonstrate such a tangible interest.
Similarly, we reject the plaintiffs' argument that they have been denied access to the courts. The right to access has been premised on various sources under the constitution including the first amendment, the due process clause, and the privileges and immunities clause of Article 4. It is regarded as "one aspect of the right of petition." California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611, 30 L.Ed.2d 642 (1972). This right, however, is limited by the prescribed procedures for initiating the action. Id. at 515, 92 S.Ct. at 614.
The right has never been extended to give plaintiffs access to courts in all situations. Every wrong does not bring with it the right to litigate in federal court. Based on the foregoing discussion, this court believes that it does not have subject matter jurisdiction under section 1983.
Plaintiffs' third alleged basis for jurisdiction is a violation of the Lanham Act. 15 U.S.C. § 1125(a). Section 43(a), now codified at 15 U.S.C. § 1125(a), provides in pertinent part:
Any person who shall affix, apply, or annex, or use in connection with any goods or services, ... a false designation of origin, or any false description or representation, ... and shall cause such goods or services to enter into commerce ... shall be liable to a civil action ... by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.
Initially, the court had some reservations concerning the applicability of the Lanham Act to a case where there was no trademark and no market competition involved. However, after a closer examination, the court has altered its position. The purpose of this particular section is to protect the consumers or any person who is likely to be damaged by its use from a false designation of origin or a false description. See PPX Enterprises, Inc. v. Audiofidelity Enterprises, Inc., 818 F.2d 266 (2d Cir. 1987); Smith v. Montoro, 648 F.2d 602 (9th Cir.1981); Marling v. Ellison, 218 U.S.P.Q. 702 (S.D.Fla.1982); Nature's Bounty, Inc. v. Basic Organics, 432 F.Supp. 546 (E.D.N. Y.1977). The basic aim being to prevent consumer deception.
In fact, the existence of a trademark is not necessary or controlling in an action brought under section 43(a). Black Hills Jewelry Mfg. Co. v. Gold Rush, Inc., 633 F.2d 746 (8th Cir.1980); New West Corp. v. NYM Co. of California, Inc., 595 F.2d 1194 (9th Cir.1979); Unital, Ltd. v. Sleepco Mfg., Ltd., 627 F.Supp. 285 (W.D.Wash. 1985); Potato Chip Institute v. General Mills, Inc., 333 F.Supp. 173 (D.Neb.1971), aff'd, 461 F.2d 1088 (8th Cir.1972).
Likewise, courts have held that there need not be any direct market competition. PPX Enterprises, Inc. v. Audiofidelity Enterprises, Inc., 818 F.2d 266 (2d Cir. 1987); Springs Mills, Inc. v. Ultracashmere House, Ltd., 724 F.2d 352 (2d Cir. 1983); CNA Financial Corp. v. Local 743 of Int'l Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 515 F.Supp. 942 (N.D.Ill.1981). As noted by the court in Black Hills, "section 43(a) creates a federal statutory tort sui generis and does not merely codify the common law principles of unfair competition." Black Hills Jewelry Mfg. Co. v. Gold Rush, Inc., 633 F.2d 746 (8th Cir. 1980).
Somewhat similar circumstances were addressed by the court in Smith v. Montoro, which concerned an actor whose name was left off the film credits and another actor's name substituted prior to distribution of the film in the United States. Smith v. Montoro, 648 F.2d 602 (9th Cir. 1981). In finding the existence of a Lanham Act violation the court relied on the concept of reverse palming off. Reverse palming off consists of conduct whereby the defendant purchases or otherwise obtains the plaintiff's goods, removes plaintiff's name and replaces it with his own. Id. at 606. As a result of such reverse palming off, "the ultimate purchaser (or *1285 viewer) is deprived of knowing the true source of the product and may even be deceived into believing that it comes from a different source." Id. at 607.
Marling v. Ellison, 218 U.S.P.Q. 702 (S.D.Fla.1982), involved a false designation of authorship. There plaintiff argued that Ellison had falsely represented that he was the author of his infringing works and, therefore, had violated section 43(a) of the Lanham Act. The court noted that the books stated on the back cover that Ellison was the author even though they were in considerable part the result of the copying of the plaintiff's work. Id. at 714. One well-known treatise has suggested that any author may claim a violation of section 43(a) of the Lanham Act if his work is published without his name. M. Nimmer, Nimmer on Copyright § 8.21(e).
The plain meaning of the statute supports the court's finding of jurisdiction in this matter. Section 43(a) gives a cause of action to "any person who believes that he is or is likely to be damaged by the use of any such false description or representation." The challenged false representation in the case at hand is the credit given to Ms. Farrar as being the preparer and editor of the book. Clearly plaintiffs fall within the scope of section 43(a).
II. Injunction
The issuance of a preliminary injunction is governed by the four-part standard outlined by the Eighth Circuit in Dataphase Systems, Inc. v. C.L. Systems, Inc., 640 F.2d 109 (8th Cir.1981) (en banc). An injunction is regarded as an extraordinary remedy which should not be granted unless the movant demonstrates: (1) a threat of irreparable harm; (2) that the state of balance between the harm likely to be suffered by the movant and the injury the injunction will inflict on other parties favors the movant; (3) a probability that the movant will succeed on the merits; and (4) that the public interest favors the granting of the injunction.
"At base, the question is whether the balance of equities so favors the movant that justice requires the court to intervene to preserve the status quo until the merits are determined." Id. at 113. No single one of the factors is dispositive and the court's approach must be "flexible enough to encompass the particular circumstances of each case." Id.
In addition to the guidance given courts by the Dataphase case, the Eighth Circuit has reviewed the propriety of an injunction under the Lanham Act. Black Hills Jewelry Mfg. Co. v. Gold Rush, Inc., 633 F.2d 746 (8th Cir.1980). "To obtain an injunction under section 43(a) appellees need only show that the falsities complained of had a tendency to deceive. (citations omitted). A finding of tendency to deceive satisfies the requisite of irreparable harm." Id. at 753.
The congressional policy behind this section of the Lanham Act was protection of the public from false and misleading information. An injunction serves to protect not only the plaintiff but also potential consumers. See Black Hills at 753 n. 7. This case differs from what might be considered the typical Lanham Act case. The confusion here is not caused by a comparison of two products both in the public domain. Here the "confusion" is the result of the alleged false representation of Ms. Farrar as the preparer and editor of the work in question. Undoubtedly, the public would have no reason to doubt or question the statement in the book that Ms. Farrar was responsible for these activities. Ms. Farrar would be receiving credit or at least part of the credit rightfully belonging to others.
For the foregoing reasons, this court finds that it has subject matter jurisdiction and that the defendants should be and hereby are enjoined from distributing or further advertising the book entitled "William Orlando Darby: A Man to Remember" until a trial on the merits has resolved the disputed issues. A separate order in accordance herewith will be entered contemporaneously with the filing of this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2219753/ | 413 Mass. 90 (1992)
595 N.E.2d 762
ATLANTIC MUTUAL INSURANCE COMPANY
vs.
WENDY McFADDEN & others.[1]
Supreme Judicial Court of Massachusetts, Suffolk.
April 6, 1992.
July 14, 1992.
Present: LIACOS, C.J., WILKINS, ABRAMS, NOLAN, & O'CONNOR, JJ.
Richard L. Neumeier for the plaintiff.
Lee H. Kozol (Lowry E. Heussler with him) for Dime Real Estate Services-Massachusetts, Inc., & another.
Robert J. Doyle, for Wendy McFadden, submitted a brief.
NOLAN, J.
Atlantic Mutual Insurance Company (Atlantic) commenced an action in the Superior Court, seeking a declaration of its rights and obligations under a comprehensive general liability policy issued to Dime Real Estate Services-Massachusetts, Inc., and Dime Savings Bank of New York, FSB (collectively, Dime). Specifically, Atlantic sought to determine *91 whether it had a duty under the policy to defend Dime in an action for damages arising out of the lead poisoning of two children in property allegedly owned or controlled by Dime and leased to Wendy McFadden and her children. Relying primarily on a provision in the policy entitled "Pollution Exclusion," Atlantic alleged in its amended complaint, the relevant portions of which are set forth in the Appendix, that it did not have to defend or to indemnify Dime in the suit.
The judge determined that the pollution exclusion did not exclude coverage for the McFaddens' claims. The judge ruled that there is no language in the policy which even suggests that lead in paint, putty, or plaster is a "pollutant" within the meaning of the provision. To the extent that the provision can be read to imply that lead in paint is a pollutant for which coverage is excluded under the policy, the judge held that the provision is ambiguous and the ambiguity must "be resolved against the insurer." Quincy Mut. Fire Ins. Co. v. Abernathy, 393 Mass. 81, 83 (1984). The judge entered summary judgment for Dime and issued a judgment for declaratory relief, ordering Atlantic to defend and to indemnify Dime in the action filed by Wendy McFadden. Atlantic appealed. We granted Atlantic's application for direct appellate review.
On appeal, Atlantic challenges only the judge's ruling regarding the inapplicability of the pollution exclusion provision.[2] Atlantic maintains that lead in paint, putty, or plaster, although not specifically listed in the pollution exclusion as a "contaminant" or "irritant," certainly falls within either or both of those categories and therefore is properly classified as a "pollutant" for purposes of the exclusion provision.[3] We do not agree with Atlantic's interpretation.
*92 When construing language in an insurance policy, we "consider what an objectively reasonable insured, reading the relevant policy language, would expect to be covered." Hazen Paper Co. v. United States Fidelity & Guar. Co., 407 Mass. 689, 700 (1990), and cases cited. We conclude that an insured could reasonably have understood the provision at issue to exclude coverage for injury caused by certain forms of industrial pollution, but not coverage for injury allegedly caused by the presence of leaded materials in a private residence. See West Am. Ins. Co. v. Tufco Flooring East, 104 N.C. App. 312, 321-326 (1991) (construing substantially same pollution exclusion). There simply is no language in the exclusion provision from which to infer that the provision was drafted with a view toward limiting liability for lead paint-related injury. The definition of "pollutant" in the policy does not indicate that leaded materials fall within its scope. Rather, the terms used in the pollution exclusion, such as "discharge," "dispersal," "release," and "escape," are terms of art in environmental law which generally are used with reference to damage or injury caused by improper disposal or containment of hazardous waste. West Am. Ins. Co., supra at 324.
For these reasons, we hold that the judge properly awarded summary judgment to Dime on the issue of the pollution exclusion provision.[4]
Judgment affirmed.
*93 APPENDIX.
The relevant portions of the amended complaint and of the policy are as follows:
"Introduction
"1. This is an action for declaratory relief filed by the Atlantic Mutual Insurance Company against its insureds and two third-party claimants which seeks a determination of the rights and responsibilities of the parties under a contract of insurance.
"The Parties
"2. The Atlantic Mutual Insurance Company (`Atlantic') is an insurance company incorporated in the State of Connecticut and is duly licensed to sell insurance policies in the Commonwealth of Massachusetts.
"3. Dime Real Estate Services-Massachusetts, Inc. (`Dime Real Estate') is a foreign corporation doing business in the County of Suffolk, Massachusetts.
"4. Dime Savings Bank (`Dime Bank') is a foreign corporation doing business in the County of Suffolk, Massachusetts.
"5. Sanders McFadden is a minor (date of birth: May 8, 1987) residing at 29 Howard Street, No. 3, Brockton, Massachusetts 02401. The defendant, Wendy McFadden, is the mother and next friend of Sanders McFadden.
"6. Windell McFadden is a minor (date of birth: January 16, 1986) residing at 29 Howard Street, No. 3, Brockton, Massachusetts 02401. The defendant, Wendy McFadden, is the mother and next friend of Windell McFadden.
"7. At all material times, [Dime] Real Estate and [Dime] Bank (`The Dimes') were alleged to be owners of 29 Howard Street, No.3, Brockton, Massachusetts 02401, as defined in [105] C.M.R. 460.100(B).
"Facts
"A. The Underlying Claim.
"8. On or about January 14, 1988, Sanders and Windell McFadden became tenants at 29 Howard Street, Brockton, Massachusetts 02401 (`the premises').
*94 "9. On information and belief, at the inception of the McFadden[s]'s tenancy and throughout that tenancy, the premises had a level of lead in the paint, plaster and/or other accessible materials (collectively referred to hereinafter as `lead paint') of the interior and exterior surfaces that was hazardous to the health and well-being of its inhabitants.
"10. Both Sanders and Windell McFadden claim to have been diagnosed as being lead poisoned.
"11. On or about December 6, 1988, an inspection of the premises documented the presence of lead paint in the interior and exterior surfaces of the premises.
"12. On or about August 11, 1989, Wendy McFadden, as mother and next friend of Sanders and Windell McFadden, brought a civil action (Plymouth C.A. No. 89-1477B) against, among others, the Dimes, to recover damages suffered by them as a result of lead poisoning.
"13. The McFadden v. Lemoine, et al, Plymouth Civil Action No. 89-1477[B] (Jan. 29, 1990) First Amended Complaint states in pertinent part:
"`Introduction
"`This is an action to recover damages suffered by the plaintiffs as a result of the lead poisoning of the minor plaintiffs,....'
"`...
"B. Atlantic's Insurance Coverage of the Dimes.
"16. Atlantic issued its Comprehensive General Liability (CGL) policy no. XXX-XX-XXXX to the Dimes effective in 1983 and renewed it thereafter. On or about October 25, 1983 the Atlantic policy was amended by an endorsement adding property at 29 Howard Street, Brockton, Massachusetts 02401. The Atlantic CGL policy provided insurance coverage for bodily injury liability and property damage liability as follows:
"`I. COVERAGE A - BODILY INJURY LIABILITY AND COVERAGE B - PROPERTY DAMAGE LIABILITY
"`The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
"`A. Bodily injury or
"`B. Property damage
*95 "`to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the obligations of the suit are groundless[,] false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the Company's liability has been exhausted by payment of judgments and settlements.
"`The Atlantic policy defines "occurrence" as follows:
"`"Occurrence" means "an accident, including conditions or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured."'
"17. The policy further provides that:
"`It is agreed that the exclusion relating to the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalies, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants is replaced by the following:
"`(1) to bodily injury or property damage arising out of the actual, alleged or threatened discharge, [dispersal], release or escape of pollutants;
"`(a) at or from premises owned, rented or occupied by the named insured.
"`(b) at or from any site or location used by or for the named insured or other for the handling, storage, disposal, processing or treatment of waste;
"`(c) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for the name insured or any person or organization for whom the named insured may be legally responsible; or
"`(d) at or from any site or location in which the named insured or any contractors or subcontractors working directly or indirectly on behalf of the named insured are performing operations;
*96 "`(i) if the pollutants are brought on or to the site or location in connection with such operations; or
"`(ii) if the operations are used to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants.
"`(2) to any loss, cost or expense arising out of any governmental direction or request that the named insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.
"`Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalies, chemicals and wastes. Waste includes materials to be recycled, reconditioned or reclaimed.'
"...
"Count I
"20. Atlantic realleges paragraphs 1 through 19 and incorporates them herein.
"21. There is no coverage afforded under the Atlantic policy and there is no duty to defend or indemnify the Dimes because:
"...
"(b) the lead paint contamination at the premises and the alleged bodily injury to Sanders and Windell McFadden was expected from the standpoint of the Dimes, and does not constitute an `occurrence' within the meaning of the Atlantic policy; ...
"WHEREFORE, the plaintiff, Atlantic, prays for a judgment declaring that Atlantic does not have a duty to defend or indemnify its insured, the Dimes and for such other and further relief as this Court deems appropriate."
NOTES
[1] Sanders McFadden and Windell McFadden, the minor children of Wendy McFadden, Dime Real Estate Services-Massachusetts, Inc., and Dime Savings Bank of New York, FSB.
[2] Atlantic does not appeal from the judge's decision with respect to other issues raised in the motion for summary judgment. Therefore, those issues are deemed waived. Mass. R.A.P. 16 (a) (4), as amended, 367 Mass. 921 (1975).
[3] The term "pollutant" is defined in the policy as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed."
[4] That part of the judgment which orders Atlantic to indemnify is premature but no argument on this issue has been advanced on appeal and, therefore, we do not reach it. However, Atlantic is not entitled to a declaration which it seeks that it has no obligation to defend or to indemnify. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1551248/ | 142 F.2d 798 (1944)
HEFLIN
v.
SANFORD.
No. 11009.
Circuit Court of Appeals, Fifth Circuit.
May 26, 1944.
*799 No appearance for appellant.
M. Neil Andrews, U. S. Atty., and Harvey H. Tisinger, Asst. U. S. Atty., both of Atlanta, Ga., for appellee.
Before SIBLEY, McCORD, and LEE, Circuit Judges.
SIBLEY, Circuit Judge.
Appellant, being subject to the Selective Training and Service Act of 1940, 50 U.S. C.A.Appendix, § 301 et seq., was classified by his local board in IV-E as a conscientious objector, and ordered to report to a designated camp for work of national importance under civilian direction. He did not so report and was indicted, convicted, and imprisoned in the penitentiary. He seeks release by writ of habeas corpus on the broad ground that his conviction is unconstitutional in that the order to which he refused obedience exacted involuntary servitude contrary to the Thirteenth Amendment. The district judge discharged the writ on the authority of Falbo v. United States, 320 U.S. 549, 64 S. Ct. 346, and this appeal followed.
We do not think Falbo's case settles this one. Appellant is not contesting the classification given him by the local board, or seeking any review of its action. He simply says that he was ordered to do something prohibited by the Constitution and his refusal cannot be made a crime. If his contention is correct, his imprisonment is unlawful because the law under which he was indicted would be unconstitutional thus applied. The constitutional validity of the conviction can be questioned by habeas corpus.
But his contention is not correct. He lays much stress on the fact that he was to be paid little, if anything, for his work at the camp, and had a child to support; whereas even prisoners of war are paid substantially when they are put to work. The status of prisoners of war is fixed by international agreements, pursuant to which they may work and are paid. It throws no light on the status of a citizen of the United States under the Constitution. Whether appellant was to be paid much, or little or nothing, is not the question. It is not uncompensated service, but involuntary servitude which is prohibited by the Thirteenth Amendment. Compensation for service may cause consent, but unless it does it is no justification for forced labor.
The answer to appellant's complaint lies in the broad principle that the Thirteenth Amendment has no application to a call for service made by one's government according to law to meet a public need, just as a call for money in such a case is taxation and not confiscation of property. Where by law able-bodied male persons between 25 and 45 years were required to labor on the highways of the county for six days each year, failure being punished as a crime, and such a person was convicted and on habeas corpus contended there was violation of the Thirteenth Amendment, it was held that such service, like compulsory service in the army, on juries, and the like, was no violation of the Amendment. Butler v. Perry, Sheriff, 240 U.S. 328, 36 S. Ct. 258, 60 L. Ed. 672. During the First World War convictions for refusing army service were attacked as violations of this Amendment. The contention was overruled without being dignified by being argued. Arver v. United States, 245 U.S. 366, 38 S. Ct. 159, 62 L. Ed. 349, L.R.A. *800 1918C, 361, Ann.Cas. 1918B, 856. The service required here is "work of national importance", that is to say it is of a public nature. It is in lieu of army service which might have been required of appellant, the substitution being allowed as of grace because of conscientious objection to military service. The present war is described by its authors as "total war," meaning that every means of destruction will be used, and men, women and children alike killed. It means also that total effort may be necessary to resist it, men, women and children all doing what they can. Such a total call has not yet been made by the United States, but is within its power under those parts of the Constitution which authorize Congress to declare war and raise and equip armies. There can be no doubt whatever that Congress has the constitutional power to require appellant, an able-bodied man, to serve in the army, or in lieu of such service to perform other work of national importance. The Thirteenth Amendment abolished slavery and involuntary servitude, except as a punishment for crime, but was never intended to limit the war powers of government or its right to exact by law public service from all to meet the public need.
The judgment discharging the writ is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1422565/ | 398 F. Supp. 300 (1975)
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff,
v.
C & D SPORTSWEAR CORPORATION, Defendant.
Civ. A. No. 75-1-VAL.
United States District Court, M. D. Georgia, Valdosta Division.
June 3, 1975.
Motion for Costs Granted July 14, 1975.
*301 Alfonso McGhee, Associate Regional Atty., Equal Employment Opportunity Commission, Atlanta, Ga., for plaintiff.
John M. Capron, Fisher & Phillips, Atlanta, Ga., for defendant.
OPINION AND ORDER
ELLIOTT, Chief Judge.
This is an action brought by Plaintiff Equal Employment Opportunity Commission (hereinafter EEOC) against Defendant C & D Sportswear Corporation (hereinafter C & D). The EEOC contends that the discharge by C & D of one Gladys Thomas, in 1969, constituted a violation of Section 704(a) of Title VII of the Civil Rights Act, as amended, 42 U.S.C. Section 2000e-3(a). C & D has moved to dismiss the action or, in the alternative, for summary judgment. At the request of both parties, the Court heard oral argument on C & D's motions on April 25, 1974.
For the reasons set forth below the Court will grant Defendant's Motions. Based on the Complaint, and the numerous attachments to the Briefs submitted by both parties, and the hearing, it appears there is no dispute as to the following facts:
On the 20th of May, 1969, there was an altercation on the floor of C & D's plant between Gladys Thomas and the then-president of the Company, Ben Dinnerman. The next day Dinnerman's son, Irving Dinnerman, sent Mrs. Thomas home pending investigation of the dispute. The following Monday, May 26, Irving Dinnerman interviewed Thomas. During that interview Thomas stated that it was her opinion that Dinnerman had sent her home the previous week because he (Dinnerman) was a racist. Dinnerman was incensed at this accusation of racism and discharged her therefor.
Thomas then filed charges with the Equal Employment Opportunity Commission, complaining that she had been discharged because of her race. Nearly *302 three years later, on February 3, 1972, Eduardo Pena, the Commission's Director of Compliance, issued a decision, reportedly on behalf of the Commission, holding that there was reasonable cause to believe that C & D had violated Title VII by discharging Thomas because "she opposed practices made unlawful by Title VII". He found there was not reasonable cause to believe that Thomas was discharged because of her race.
Conciliation efforts were apparently undertaken, but to no avail, and, by letter dated June 28, 1972, Thomas was advised of the failure of conciliation, and of her right to bring action against C & D within 90 days of the receipt of the letter. By letter of even date, C & D was advised that an action could be brought against it within 90 days of Thomas' receipt of her letter.
Thomas failed to bring any action against C & D.
The EEOC brought this action on January 2, 1975.
In support of its Motion to Dismiss, or In the Alternative, Motion for Summary Judgment, C & D makes the following arguments:
(1) This action is not timely brought;
(2) Having issued a right-to-sue notice to the Charging Party, the EEOC is barred from bringing this action;
(3) The EEOC improperly delegated to subordinated officials its statutory authority to make the determination as to reasonable cause, the determination that conciliation had failed, and the decision to bring suit;
(4) The EEOC denied Defendant procedural due process;
(5) The EEOC had not complied with its own procedural regulations, more specifically Section 1601.23; and
(6) As a matter of law C & D's conduct did not constitute retaliation within the meaning of Section 704(a) of the Act.
I am persuaded by arguments (1), (2) and (6) and therefore find it unnecessary to rule on arguments (3), (4) and (5).
The State Statute of Limitations
In Equal Employment Opportunity Commission v. Griffin Wheel, 511 F.2d 456, (5 Cir., 1975), it was held that applicable state statutes of limitation (in this case Georgia Code Annotated § 3-704, providing that all actions for the recovery of wages shall be brought within two years after the right of action shall have accrued) may bar any recovery of back pay in actions brought by the EEOC.
Since the last actionable conduct occurred on the date of Thomas' discharge, more than five and one-half years prior to the bringing of this action, the EEOC may not recover any back pay for Thomas.
Griffin Wheel also held that the state statute of limitations does not bar the EEOC's actions insofar as it sought injunctive relief. However, the Court indicated at footnote 5 of its Opinion that the doctrine of laches would remain applicable. In order that the EEOC's action be barred by laches, inexcusable delay, resulting in prejudice to the Defendant, must appear. Akers v. State Marine Lines, Inc., 344 F.2d 217 (5 Cir. 1965). Both are present here.
A review of the EEOC Decision dated February 2, 1972, indicates that, at the time of the discharge, Ben Dinnerman, whose testimony, of necessity, would play a role in the trial of this cause, was 70 years of age. It is entirely likely that the elder Dinnerman's recollection of events which occurred 6 years prior to any testimony would not be entirely reliable. Indeed, no one's memory would be entirely reliable. Moreover, the EEOC's own regulations, appearing at Section 1602.14 permit the destruction of all pertinent records after the expiration *303 of the Charging Party's right to bring any action.
Finally, the June 28, 1972 notice from the EEOC to C & D gave no indication whatsoever that the EEOC could bring its own action. The only reference to the possibility of suit was the statement that ". . . a civil action may be brought against the respondent . . . within ninety (90) days after the receipt of [the notice to Thomas]". C & D could quite reasonably have concluded that upon the expiration of that period, no action could be brought.
Accordingly, I find that the EEOC's inexplicable delay in bringing this action has prejudiced C & D in its ability to defend itself, and therefore, I find that this action is barred by the doctrine of laches.
The Effect of the Issuance of the Right-to-Sue Notice
C & D argues that the EEOC, having issued Thomas the notice of her right to sue, is barred from thereafter maintaining an action on her behalf.[1]
Under Defendant's theory, when the EEOC issues a Charging Party notice of his or her right to sue (other than at the specific request of the Charging Party), the EEOC has necessarily made the determination that the case is not of such public importance to warrant the EEOC's maintenance of its own action on the charge. This argument finds support in the statute, the policy against "duplicitous lawsuits" and the EEOC's own regulations.
Under the statutory scheme set forth in Section 706(f), if the EEOC has been unable to conciliate the dispute within thirty days of the filing of the charge, the EEOC is given the authority to bring an action against Respondent. Thereafter the person or persons aggrieved may, if they wish, intervene in that action. If after 180 days from the filing of the charge, it has not brought an action, or if it has not secured a conciliation agreement, the statute then requires the EEOC to notify the person aggrieved.[2] There is no provision in Section 706(f)(1) for the filing of an independent EEOC lawsuit after the reference to the right-to-sue notice. Following the provision for the issuance of the right-to-sue letter, the statute speaks only in terms of permissive intervention by the EEOC, upon certification that the case is of general public importance.
It would appear, therefore, that the statutory scheme is as follows. First, the EEOC is given the opportunity to negotiate a settlement. If no settlement is reached, the EEOC then considers whether it wishes to institute a civil action. If it does determine to file a suit, the person aggrieved is given a right to intervene. If it determines that no EEOC suit is to be filed, the person aggrieved is then notified of the failure of conciliation and that the EEOC has not sued on his or her behalf, and the aggrieved party then has the right to bring an action within 90 days of the receipt of that notice.
If, while the EEOC is pondering the importance of the issue, the charging party grows impatient, he or she may, 180 days after the filing of the charge, request a "right-to-sue" notice. In such a case, however, the EEOC may still determine that the case is of sufficient public importance to warrant intervention, upon a certification that the case is of general public importance.
Defendant has submitted an Affidavit by Thomas W. McPherson, District Director of the Atlanta District Office *304 of the EEOC, wherein Mr. McPherson testified that once conciliation efforts have been exhausted, his office refers the file to the Regional Litigation Center in order that a judgment may be made as to whether that case represents an appropriate vehicle for litigation. He testified that only in the event the Regional Litigation Center returns the file, or if the Charging Party so requests, will he issue a notice of right to sue to the aggrieved individual. The "right-to-sue" notice in this case issued following failure of conciliation. There is no suggestion that Thomas requested the notice.
While the EEOC denies the validity of the McPherson Affidavit, the EEOC's Field Manual, at Section 82.3, lends credence to C & D's interpretation:
Upon failure of conciliation
When the District Director determined that conciliation efforts have failed, he/she will notify the parties as provided in Section 1601.23 of the Commission's regulations. The District Director shall then refer the entire case file to the Regional Attorney, using the transmittal memorandum of Exhibit 32A. For cases of particular interest, the District Director shall attach a memorandum describing the reason for wishing to have the case litigated and providing any other information which may assist the Regional Attorney in making a determination. The District Director will not issue the notice of right-to-sue at this time except at the request of the person aggrieved. (Emphasis supplied.)
It would appear, therefore, that prior to issuing the "right-to-sue" notice the EEOC had already made the determination that the case was not an appropriate vehicle for litigation. Accordingly, if Thomas had brought her own individual action, the EEOC could not intervene in the action, since Congress has required a certificate of general public importance in such a case.
Quite obviously, this is not a case of "general public importance". The EEOC's counsel stated in chambers that this is simply a "one on one" dispute. Indeed, it would appear from the McPherson affidavit, from the quoted section of the EEOC's field manual, and from the statutory scheme discussed above, that the determination has already been made that this is not a case of general public importance. If it had been, Thomas would not, except at her specific request, have received her notice of her right to sue. I cannot believe that Congress intended the EEOC to maintain an action on its own behalf under circumstances which would preclude it from intervening in a private action. It is equally unlikely that Congress intended that the EEOC's right to litigate in a given case would depend on whether the Charging Party exercised the right to sue immediately upon receipt of the right-to-sue notice. Thus, if the issuance of the right-to-sue notice did not cut off the EEOC's right to maintain its own action it could bring a civil action on that charge up until the charging party filed. If charging party does file, however, the EEOC could intervene only if the case were certified to be one of general public importance. Congress could not have intended that the EEOC's standing to litigate depends on the outcome of a "race to the Courthouse" between the EEOC and the Charging Party.
Finally, if the EEOC were permitted to maintain this action now, it would completely negate the specific statutory prohibition against a private party's maintenance of an action on his or her charge more than 90 days after the receipt of the right-to-sue notice. The statute provides that where the EEOC has brought an action, the person aggrieved may intervene. If the EEOC's ability to maintain the action survives the issuance of the right-to-sue notice and the expiration of the charging party's right to maintain an action, Thomas would now be able to intervene in this action. Such an interpretation would be repugnant to the statute.
*305 In any event, I note that in EEOC v. Huttig Sash & Door, 511 F.2d 453 (5 Cir., 1975), the Court held that the EEOC could not maintain an action on behalf of one particular person where that person previously filed a lawsuit and then dismissed the action. In Huttig, the charging party filed, within the time allowed, a lawsuit against Huttig. Thereafter his attorney moved for leave to dismiss the action. I can see no difference between voluntary dismissal of an action and a voluntary failure to bring an action within the time allowed.
Accordingly, I find that the EEOC's issuance of a "right-to-sue" notice, without being requested to do so, and Thomas' failure to bring an action within the time allowed, extinguished the right of the EEOC to maintain an action on her behalf.
An Unwarranted Accusation of Racism, Unless Part and Parcel of the Process of Filing Charges with the EEOC, Does Not Constitute "Opposition to Unlawful Employment Practices" Within the Meaning of Title VII
Section 704(a), 42 U.S.C. § 2000e-3(a) provides:
It shall be an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted or participated in any manner in an investigation, proceeding, or hearing under this subchapter.
The EEOC's decision found there was no reasonable cause to believe that C & D had discharged Thomas because of her race. However, it is apparently the position of the EEOC that employees are free to accuse their employer of racism regardless of whether that accusation is well-founded. There is no contention on the part of the EEOC that she was discharged as retaliation for filing charges, since the discharge antedated her filing of the charge.
The issue, therefore, is whether an employee is free to make unfounded accusations of racism against his or her employer, without recourse to the EEOC's processes.
In Pettway v. American Cast Iron Pipe Company, 411 F.2d 998 (5 Cir. 1969), an employee was discharged for filing baseless charges against his employer with the EEOC. Although the Court held that the accusation was protected, it held that protection was required in order to protect the employee's right to file charges.
We hold that where disregarding the malicious materials contained in a charge . . . the charge otherwise satisfies the liberal requirements of a charge, the charging party is exercising a protected right under the Act. 411 F.2d at 1007. (Emphasis supplied.)
Thus, baseless accusations may very well be protected, but only as a means of protecting access to the Commission.
In Ripp v. Dobbs Houses, 366 F. Supp. 205 (W.D.Ala.1973), the court interpreted Pettway in just this fashion, and dismissed a complaint based on "retaliation" where the plaintiff made no contention that the defendant interfered with his access to the EEOC.
In Ammons v. Zia, 448 F.2d 117, 3 EPD ¶ 8329 (9 Cir. 1971), the plaintiff was discharged because, among other reasons, "she constantly complained of low pay based on her sex". After determining that she had failed to prove that this disparity of wages was due to her sex, the court held that her discharge was not actionable.
Certainly, access to the EEOC must be protected. On the other hand, accusations of racism ought not to be made lightly. Unfounded accusations might well incite racism where none had previously existed. Were employees free to make unfounded accusations of racism against their employers and fellow employees, racial discord, disruption, and disharmony would likely ensue. This *306 would be wholly contrary to Congress' intention that race be removed, as far as possible, as an issue in employment.
Accordingly, the only reasonable interpretation to be placed on Section 704(a) is that where accusations are made in the context of charges before the EEOC, the truth or falsity of that accusation is a matter to be determined by the EEOC, and thereafter by the courts. However, where accusations are made outside the procedures set forth by Congress that accusation is made at the accuser's peril. In order to be protected, it must be established that the accusation is well-founded. If it is, there is, in fact, an unlawful employment practice and he has the right, protected by Section 704(a), to oppose it. However, where there is no underlying unlawful employment practice the employee has no right to make that accusation in derogation of the procedures provided by statute. In cases arising under the National Labor Relations Act, there is a similar result. If, during the term of a no-strike agreement, employees strike to protest an unfair labor practice and their employer is, in fact, guilty of an unfair labor practice, the striking employees may not be disciplined for such a protest. However, if there is no underlying unfair labor practice, the employee loses his protection under Section 7 of the Act and may be discharged. See, generally, Mastro Plastics, Inc. v. NLRB, 350 U.S. 270, 76 S. Ct. 349, 100 L. Ed. 309 (1956). Even if there is no contract, the striker is subject to permanent replacement. NLRB v. Pepsi Cola Co. of Lumberton, Inc., 496 F.2d 226 (4 Cir. 1974). In short, the unfair labor practice striker acts at his peril. If the National Labor Relations Board finds there is an underlying unfair labor practice, the striker is entitled to reinstatement upon his offer to return to work. If the National Labor Relations Board does not find an underlying unfair labor practice, however, the striker is subject to discharge or replacement. NLRB v. Cactus Petroleum, 355 F.2d 755 (5 Cir. 1966).
In the instant case the EEOC did not find any underlying unlawful employment practice. Accordingly, I find that as a matter of law Thomas' unwarranted accusation was not protected by, and C & D did not violate, Section 704(a) of the Act.
Attorneys' Fees
C & D has requested that the Court exercise its discretion provided in Section 706(k), 42 U.S.C. Section 2000e-5(k) and award it reasonable attorneys' fees to be taxed against the EEOC, citing Van Hoomissen v. Xerox Corp., 497 F.2d 180 (9 Cir. 1974). C & D's motion for attorney's fees was not discussed at the hearing on its motion to dismiss. Accordingly, the parties will be granted twenty (20) days following the entry of judgment within which to present argument and evidence on the issue of the propriety of granting attorneys' fees to C & D and the amount thereof.
It is the Order of this Court that the Complaint in this matter be dismissed in its entirety, with prejudice.
MEMORANDUM OPINION AND ORDER ON DEFENDANT'S MOTION FOR AWARD OF ATTORNEY'S FEES AS PART OF COSTS
By opinion and order filed June 3, 1975 the Court determined that the complaint in this matter should be dismissed in its entirety, with prejudice, and reserved for later consideration the Defendant's motion for an award of attorney's fees. Counsel for the parties have now submitted briefs on this question and an affidavit has also been submitted in support of the Defendant's motion.
Section 706(k) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-5(k) provides as follows:
"In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee as part of the costs, and the Commission *307 and the United States shall be liable for costs the same as a private person."
Thus, the applicable law clearly provides that the prevailing party in a case of this nature is entitled to recover attorney's fees if the Court in the exercise of its discretion determines that such an award is appropriate, and such awards have been held proper against the Commission. Van Hoomissen v. Xerox Corporation, 503 F.2d 1131 (9 Cir. 1974).
As was noted in the opinion previously filed, the Congress intended that the Commission commit its litigation resources only to cases of "general public importance". The primary purpose of the agency was to be conciliation and not litigation, and certainly the Congress did not intend that the Commission enter into litigation lightly, asserting causes of action with little or no substance. The Court makes no determination with regard to whether this litigation was instituted by the Commission in bad faith, not finding it necessary to do so. What the Court does determine is that this was clearly not necessary litigation dictated by any substantial public interest. In this case the Commission sued to redress an alleged unlawful employment practice which occurred more than five and one-half years prior to the institution of suit, and the alleged practice was not a "systemic" one which affected a number of employees nor was it one of a series of alleged unlawful employment practices. Instead, it affected only one individual who, having been given notice of her right to sue years ago, nevertheless failed to pursue it. Finally, the undisputed facts show that the Defendant did not violate the statute in the first place. Indeed, the Court has had some difficulty in discerning the reason for the institution of this suit. The complaint was based on a stale charge and stale facts and did not relate to a matter of general public importance, but instead was so unimportant that the only person allegedly wronged had apparently forgotten about it or at least did not have sufficient interest in it to ever institute a suit in her own behalf.
Although the complaint has been dismissed, the Defendant was nevertheless required to defend itself against the action, and in asserting its defense it was necessary for the Defendant to incur the expense of substantial attorney's fees and other costs. The Court concludes that this is clearly an appropriate case for the award of attorney's fees.
The affidavit of Defendant's counsel shows that counsel spent at least sixty-two hours in connection with the representation of the Defendant in this matter, and, based on this affidavit, the Court determines that the Defendant should be awarded attorney's fees in the amount of $2,170.00. Additional out-of-pocket litigation expenses were incurred by the Defendant in the amount of $211.26, which amounts the Defendant is likewise entitled to recover. It is, therefore, ordered that judgment be entered in favor of the Defendant and against the Plaintiff for total costs in the amount of $2,381.26.
NOTES
[1] At the hearing, Counsel for the EEOC admitted that this was a "one on one" situation, i. e., the EEOC does not seek relief for any other person or persons.
[2] C & D argues that the Commission may not maintain this action more than 180 days after the filing of the charge, but, in its brief, recognizes that I am bound by the decision of the United States Court of Appeals for the Fifth Circuit in L & N Railroad Co., FEP Cases 1316 (5 Cir. 1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1618746/ | 615 So. 2d 289 (1993)
Audrey D. FAUCHEAUX, Individually and as Administratrix of the Succession of Clay J. Faucheaux, and for and in Behalf of her Children, Clay A., Eric J. and Neal J. Faucheaux
v.
TERREBONNE CONSOLIDATED GOVERNMENT, et al.
No. 92-C-0930.
Supreme Court of Louisiana.
February 22, 1993.
Rehearing Denied March 25, 1993.
*290 Eldon E. Fallon, Elizabeth Rue Bridgeman, Gainsburgh, Benjamin, Fallon, David & Ates, New Orleans, Johnny X. Allemand, Thibodaux, for applicant.
Robert A. Chaisson, Chaisson & Chaisson, Destrehan, C. Berwick Duval, II, Duval, Funderburk, Sundbery & Lovell, Houma, for respondents.
HALL, Justice.[*]
Clay J. Faucheaux died of a heart attack as a result of physical and mental stress he experienced when the fishing boat he was operating in a canal was struck by a descending gate which blocked the canal. His wife and children brought suit for survival and wrongful death damages against the Terrebonne Parish Consolidated Government and Terrebonne Parish Water District No. 1 (hereafter collectively called Terrebonne *291 Parish), owner and operator of the gate. After trial, judgment was rendered in favor of the defendants, dismissing plaintiffs' suit. The judgment was affirmed on appeal. Faucheaux v. Terrebonne Consol. Gov., 597 So. 2d 503 (La. App. 1st Cir.1992). We granted writs, 599 So. 2d 305 (La.1992), and now reverse.
The facts are accurately set forth in the court of appeal opinion:
"On September 14, 1985, at about 5:10 a.m. Clay J. Faucheaux picked up his nephew, Bernard Faucheaux at Nicholls State University in Thibodeaux where he was a student, to go on a fresh water fishing trip. They drove to Cannon's Landing, where at about 5:45 a.m. just as daylight was breaking, they launched Clay J. Faucheaux's 16½ foot bass boat. Clay Faucheaux was at the controls which were located at the approximate center of the boat. Bernard was seated in the rear. They left the launch, turned right and proceeded on Black Bayou for 400 or 500 hundred yards to the highway 90 bridge where they turned left under the bridge into Minor's Canal. They were travelling at idle speed estimated to be about 5 knots. Located 400 feet down Minor's Canal from the bridge there is a levee structure which closes off the entire canal except for an opening measuring approximately 8×8. This opening can be closed by what is termed a Tainter gate. When closed this gate prevents salt water from intruding through Minor's Canal. The gate, which is a solid metal structure, is opened and closed by being raised and lowered by an electric motor. The gate has three positions; locked open which means the gate is up, locked closed which means the gate is down in the water and can be opened only by T.P. personnel, and `on the button' which means the gate is down but can be opened by pressing a button which is located on the bottom of the levee to the right when approaching from the Highway 90 bridge. The button can be pressed from a boat. When pressed the gate opens and remains open for 1½ minutes when it automatically closes again. It closes very slowly at 1.1 inches per second.
"Bernard Faucheaux had never been through the gate prior to that morning with his uncle. He saw the structure when the boat turned into Minor's Canal at the bridge. He noted another boat going through. He then proceeded to arrange his fishing equipment and without looking further. He did not look back up until he heard his uncle exclaim, `That sucker's coming down!' He then looked up and saw the boat already in the passageway where the gate was located. At that time the gate was about 4 to 6 inches above the front of the boat, coming down. His uncle left his position, went to the front of the boat and tried to push it back from the gate by pushing against the side of the levee. Bernard followed suit. When that effort did not accomplish its purpose they decided to exit the boat. They did so by going to the back and getting out on the levee on the left side.
"After they exited the boat the gate kept descending, pushing it under. Their equipment was floating on the water. His uncle asked for directions to the button from people in another boat. He then proceeded up the levee to a bridge which crossed the opening containing the gate. He crossed the bridge, walked down the levee on the other side and pressed the button. He then collapsed and died.
"Clay J. Faucheaux had a history of heart trouble including a prior heart attack. The undisputed cause of death was ventricular fibrillation brought on by the excitement and stress of the incident with the gate." Id., at 505.
The evidence also established that there were no horns, whistles, colored lights or other warnings to indicate that the gate was descending. There was one white light near the top of the structure designed to come on when the gate is closing. Further, there was no warning to indicate whether the gate was in the locked open position or "on the button." The gate was kept in the locked open position at least ninety percent of the time. There was *292 evidence that Clay Faucheaux had fished in this area before, but there was no evidence to show whether he was familiar with the manner in which the gate operated or whether he had ever seen the gate in the down or "on the button" position.
Throughout this litigation, plaintiffs have sought to recover on the basis of the parish's negligence in failing to provide adequate warnings when the gate was descending. The trial court found that Mr. Faucheaux should have seen the descending gate and that the accident was solely his fault in not keeping a proper lookout. The court of appeal correctly found that the parish's duty in regard to traffic on the canal was similar to that of a governing authority with jurisdiction over a street or highway. There is a duty to provide warnings sufficient to warn travelers of any unusual obstacles, perilous conditions or defects that entail danger to the physical safety of those proceeding on such routes. The court of appeal also found, erroneously as applied to this case, that in order for the parish to have a duty to provide warnings, the parish must have knowledge of the existence of a dangerous condition, and that the evidence in this case did not establish such knowledge.
A duty-risk analysis is helpful in resolving a negligence case such as this. In making the requisite analysis, four questions are to be considered:
(1) Was the conduct in question a cause-in-fact of the resulting harm?
(2) What, if any, duties were owed by the respective parties?
(3) Were the requisite duties breached?
(4) Was the risk and harm caused within the scope of protection afforded by the duty breached?
Mart v. Hill, 505 So. 2d 1120 (La. 1987). For plaintiff to recover on a negligence theory, all four inquiries must be affirmatively answered.
CAUSE-IN-FACT
Cause-in-fact is generally a "but for" inquiry; if the plaintiff probably would not have sustained the injuries but for the defendant's substandard conduct, such conduct, is a cause-in-fact. Fowler v. Roberts, 556 So. 2d 1, 5 (La.1989). To the extent that the defendant's actions had something to do with the injury the plaintiff sustained, the test of a factual, causal relationship is met. Hill v. Lundin & Associates, Inc., 260 La. 542, 256 So. 2d 620, 622 (1972).
It is clear that the parish's failure to provide adequate warningsblinking red lights or blast of a horn, or even a large signwas a cause-in-fact of the accident and resulting death of Mr. Faucheaux. The accident would not have happened but for the failure to warn. The presumption is that the boat operator would have heeded such a warning; the operator's attention would have been called to the hazard, the closing gate.
The medical evidence is clear that the stress of the incident, particularly the mental or emotional stress, precipitated the heart attack, ventricular fibrillation. Although decedent was in a high risk category, according to the medical testimony he would not have died that day, at that time and place, except for the incident.
Thus, the defendant's conduct complained of was the cause-in-fact of the accident and resulting heart attack.
DUTY
Duty is a question of law. Simply put, the inquiry is whether the plaintiff has any lawstatutory, jurisprudential, or arising from general principles of faultto support his claim. Green, The Causal Relation Issue and Negligence Law, 60 Mich. L.Rev. 543, 562-63 (1962).
Plaintiffs urge that the parish was under a duty to provide blinking lights and horn blasts pursuant to Coast Guard regulations dealing with obstruction to navigation. Plaintiffs assert that failure to comply with these regulations was "negligence per se." The terminology "negligence per se" has been rejected in Louisiana. See Weber v. Phoenix Assurance Company of New York, 273 So. 2d 30 (La. 1973). The violation of a statute or regulation does not automatically, in and of itself, impose civil liability. Civil responsibility is imposed *293 only if the act in violation of the statute is the legal cause of damage to another.
In any event, the court of appeal correctly found that plaintiffs failed to establish that a Corps of Engineers permit was required or that the Coast Guard regulations were applicable to this gate on this waterway. Nevertheless, the testimony by plaintiffs' expert in marine safety that this gate constituted an obstruction to navigation and should have had proper markings and warning devices such as horns and blinking lights to indicate when the gate was closing, is significant evidence on the issue of the defendant's duty under general negligence or fault principles. Regardless of whether the waterway was considered navigable for Corps of Engineer or Coast Guard purposes, the canal was used extensively by boat traffic, and the gate, when closed or closing, certainly represented an obstruction to the safe navigation of the canal by boat operators.
The court of appeal correctly analogized the duty of the parish in maintaining the gate on the well-traveled canal as being similar to the duty of a governmental authority in maintaining streets and highways. The parish had the duty to provide adequate signing, marking and warnings to alert boat operators traveling on the canal to unusual, perilous and unexpected hazards. Forest v. State Through Louisiana Department of Transportation, 493 So. 2d 563 (La. 1986). The court of appeal erroneously determined, however, that the parish had no duty to provide warnings in this instance because it was not proved that the parish had knowledge of any danger presented by the gate and its manner of operation. Cited as authority were cases where defects developed after construction of the facility, such as where a sign had been removed or where a defect developed over a period of time. These cases and their requirement of knowledge are not applicable where the need to provide warnings arises from a danger inherent in the design and construction of the facility. A public body charged with maintaining a public route cannot claim lack of knowledge of the need to provide warnings where the danger is obvious and inherent in the design and construction of the facility. A public body is held to know of the danger of an unmarked intersection, or a sharp curve, or a draw bridge, or, as in this case, a gate that raises and lowers automatically so as to block a canal used by boat operators. Likewise, the public authority must provide adequate warnings of unusual obstructions or perilous conditions so as to make the route reasonably safe for those traveling on it.
Although only two prior accidents were established by the evidence, the danger presented by the gate, particularly in the dark or semi-darkness, is apparent and is amply demonstrated by the video tape in evidence. Certainly the gate can be seen descending by a boat operator keeping a proper lookout, but presents a danger to one who is unfamiliar with the operation of the gate or who is inattentive or distracted. The governmental authority owes a duty to an inattentive traveler as well as to an attentive one. Molbert v. Toepfer, 550 So. 2d 183 (La.1989).
As constructed and operated, the gate, absent warnings, presented an unreasonable risk of injury to persons operating boats on the canal, particularly those who were not familiar with the manner of operation of the gate. A person who did not know that the gate automatically lowered while "on the button," would have no reason to direct special attention to the passageway or to anticipate that the gate would lower in the face of oncoming boat traffic. The need for warning devices and the duty of the parish to provide them is apparent.
BREACH OF DUTY
This question in the duty-risk analysis is easily answered. The parish failed to install warning devices and thereby breached its duty to those operating boats on the canal.
SCOPE OF DUTY
The scope of the duty inquiry is ultimately a question of policy as to whether the particular risk falls within the scope of the duty. Rules of conduct are designed *294 to protect some persons under some circumstances against some risks. Gresham v. Davenport, 537 So. 2d 1144, 1147 (La. 1989); Malone, Ruminations on Cause-in-Fact, 9 Stan.L.Rev. 60, 73 (1956). The scope of protection inquiry asks whether the enunciated rule extends to or is intended to protect this plaintiff from this type of harm arising in this manner. Crowe, The Anatomy of a Tort-Greenian, As Interpreted by Crowe Who Has Been Influenced by MaloneA Primer, 22 Loy. L.Rev. 903 (1976). In determining the limitation to be placed on liability for defendant's substandard conduct, the proper inquiry is often how easily the risk of injury to plaintiff can be associated with the duty sought to be enforced. Hill, supra.
The duty to warn of the danger presented by the descending gate weighing several thousand pounds clearly encompassed the risk that a boat might collide with or be caught by the descending gate and that property damage and personal injury might result from the collision. The duty imposed is designed to prevent a collision between a boat operator and the gate and any injuries resulting therefrom.
Defendant argues that the decedent's heart attack was an unforeseeable event and therefore not within the scope of its duty, citing Todd v. Aetna Casualty and Surety Company, 219 So. 2d 538 (La.App. 3d Cir. 1969), writ denied, 254 La. 13, 222 So. 2d 66 (1969). In Todd, the court found that the defendant's duty not to collide with a parked car did not encompass the risk that the owner of the car, who was not in the car at the time of the collision, would later experience a fatal heart attack. Todd can be distinguished from the present case by the fact that Mr. Faucheaux was in the boat when the accident occurred, was himself placed in a potentially perilous situation, and the heart attack occurred during ongoing immediate efforts to extricate the boat from the perilous situation.
The accident and resulting injury to the decedent is easily associated with the duty to warn of the descending gate and falls within the scope of that duty.
All four duty-risk questions being answered in the affirmative, it follows that defendant is liable to the plaintiff for its negligence which resulted in the death of Mr. Faucheaux.
COMPARATIVE NEGLIGENCE
Because the trial and appellate courts found Terrebonne Parish owed no duty to warn, they never reached the question of apportionment of fault between defendant and the decedent under LSA-C.C. Art. 2323.
As discussed above, defendant breached a duty owed to Faucheaux, resulting in his death. Mr. Faucheaux's inattentiveness while steering his boat was also a major cause of the accident. Because both parties were at fault, fault must be apportioned between the two parties. In assessing the negligent conduct of the two parties, various factors may influence the degree of fault assigned to each:
"(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." Watson v. State Farm Fire and Casualty Insurance Co., 469 So. 2d 967, 974 (La.1985).
Mr. Faucheaux's negligence arose from his inadvertence. At an estimated speed of five knots per hour, it would have taken Faucheaux 48 seconds to travel from the Highway 90 bridge to the opening of the gate. He was about 292 feet from the gate when it began to close. This left him with about the length of a football field to notice the gate was closing and avoid a collision.
Had he been keeping a proper lookout, he would have seen the gate descending and could have taken steps to avoid colliding with the descending gate. However, Mr. Faucheaux's negligence in not seeing the lowering gate was not as great as it might seem at first blush. The gate stayed in the locked open position more than ninety percent of the time and it was not established *295 that Mr. Faucheaux was familiar with the fact that the gate would automatically close when in the "on the button" position. After seeing that the gate was open and watching a preceding boat go through the gate, Mr. Faucheaux, if he was not familiar with the automatic operation, could have assumed that the gate would remain open, and he would have no reason to keep a special lookout directed toward the gate.
On the other hand, the parish's negligence involved an awareness of the danger, a substantial risk was created by the failure to provide warnings when the gate was automatically descending, and the risk could have been easily and inexpensively avoided by the furnishing of warnings.
Considering the Watson factors, we apportion fault sixty percent to the parish and forty percent to Mr. Faucheaux.
DAMAGES
The issue of the amount of damages was not argued or briefed in this court. The case will be remanded to the court of appeal to make a determination of the amount of damages due.
DECREE
For the reasons assigned, the judgment of the district court, as affirmed by the court of appeal, is reversed, and judgment is hereby rendered in favor of the plaintiffs and against the defendants declaring that the defendants were negligent and are liable, and apportioning fault sixty percent to the defendants and forty percent to the decedent. The case is remanded to the Court of Appeal, First Circuit for a determination of the amount of damages.
REVERSED, RENDERED AND REMANDED.
NOTES
[*] Justice Luther Cole was assigned to participate in this case, having been on the Court when it was argued. For the procedure employed in cases argued after January 1, 1993, see the footnote in State v. Kip Barras, et al., 615 So. 2d 285, decided on this date. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1568123/ | 300 S.W.2d 68 (1957)
T. I. M. E., Inc., Petitioners,
v.
MARYLAND CASUALTY COMPANY, a Corporation, Respondent.
No. A-6075.
Supreme Court of Texas.
March 13, 1957.
Rehearing Denied April 17, 1957.
*69 Burges, Scott, Rasberry & Hulse, William F. Smith, El Paso, for petitioner.
Kemp, Smith, Brown, Goggin & White, El Paso, for respondent.
CALVERT, Justice.
In this case and on this appeal there are two major legal problems, one substantive and one procedural, as follows: Was Alphonse Munroe an insured within the terms of a policy of garage liability insurance issued by respondent? If he was not, did respondent insurer lose its right to assert that fact as a defense to a suit on the policy by failing to plead that he was not? The trial court and the Court of Civil Appeals have held that Munroe was not an insured and that respondent did not lose its right to assert that fact as a defense. See 294 S.W.2d 746. We agree with the first holding but disagree with the second.
Respondent's policy of insurance was issued to Citizens Finance Co., Inc., DBA El Paso Motor Company, as the principal insured. The insurance was written on a policy form of "Garage Liability Policy", extended by rider as follows: "Automobile Dealer or Repair shop is extended to include Finance Company and all operations on the premises or elsewhere which are necessary and incidental thereto."
The policy contained four "Coverages" as follows: "A. Bodily Injury Liability", "B. Property Damage Liability", "C. Automobile Medical Payments', and "D. Property of others in Charge of Named Insured". Provision was made in the policy for an insured to purchase "Coverages" against any one or all of three "Hazards": "1. Premises-Operations-Automobiles", "2. Premises-Operations-Automobiles Not Owned or Hired", and "3. Elevators". The principal insured purchased and paid for coverages A and B against the hazard "Premises-Operations-Automobiles".
By coverage A respondent agreed: "To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the hazards hereinafter defined". By coverage B respondent agreed: "To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined."
Under a section of the policy captioned "Definition of Hazards" is the following paragraph: "Division 1Premises-Operations-Automobiles. The ownership, maintenance or use of the premises for the purpose of an automobile dealer, repair shop, service station, storage garage or public parking place, and all operations necessary or incidental thereto; and the ownership, maintenance or use of any automobile in connection with the above defined operations, and the occasional use for other business purposes and the use for nonbusiness purposes of any automobile owned by or in charge of the named insured and used principally in the above defined operations."
The policy insured certain classes of persons other than the principal insured under the following provision:
*70 "III. Definition of Insured.
"With respect to the insurance under Coverages A, B and D the unqualified word `insured' includes the named insured and also includes (1) any partner, employee, director or stockholder thereof while acting within the scope of his duties as such, and any person or organization having a financial interest in the business of the named insured covered by this policy, and (2) any person while using an automobile covered by this policy, and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission. This policy does not apply:
"(a) To any employee with respect to injury to or sickness, disease or death of another employee of the same employer injured in the course of such employment in an accident arising out of the business of such employer; * * *."
On the evening of March 31st, in El Paso, Texas, a Ford automobile covered by the policy was involved in a collision near a street intersection. The Ford was being used and driven by Alphonse Munroe who was employed by El Paso Motor Company but at the time was on a purely private mission. The Ford was so badly damaged that it would not run and Munroe left it over night at the scene of the accident, partly in a traffic lane. The following morning John T. McConnell, El Paso Motor Company's general manager, went to the scene of the accident to make an investigation. While McConnell was sitting in his automobile the driver of one of petitioner's trucks undertook to negotiate a turn into the street at an excessive rate of speed, struck the standing Ford automobile and overturned on the automobile in which McConnell was sitting, injuring him. McConnell sued petitioner (formerly known as Southwestern Freight Lines) for damages for personal injuries, and petitioner brought Munroe into the suit as a third party defendant. Respondent declined to defend the suit on behalf of Munroe. Judgment was rendered that McConnell recover of petitioner the sum of $3,750 and, by way of indemnity, that petitioner recover over against Munroe. See Southwesten Freight Lines v. McConnell, Tex.Civ.App., 254 S.W.2d 422, writ refused, and Southwestern Freight Lines v. McConnell, 269 S.W.2d 427, writ refused, n. r. e. Petitioner paid the judgment in full.
This suit by petitioner against respondent, with Munroe as an involuntary plaintiff, was brought on the theory that respondent is liable for the sum Munroe is obligated to pay. Respondent is not liable if Munroe was not an insured and if it did not lose its right to defend on that ground. We will first consider whether Munroe was an insured within the terms of the policy.
We can find in the language of the policy no basis for holding that Munroe was an insured as to the injuries inflicted on McConnell. Section III of the policy, above quoted, defines and specifies who is an insured. In addition to the named insured, the policy specifies two classes of persons who are insureds. Munroe was not in the first class because, although an employee of the named insured, he was not "acting within the scope of his duties as such." The evidence is undisputed that he was on a private mission at the time of his accident. On the other hand, Munroe was in the second class because his use of the automobile was with permission of the named insured. The jury found, on conflicting evidence, that he had implied permission to use the automobile for the purpose for which he was using it. But there is another relevant provision of Section III. The language immediately following the two classes limits their scope. It provides, in substance and in effect, that an employee is not an insured when he injures a fellow employee if the fellow employee at the time of the injury is acting in the *71 course of his employment and is injured in an accident arising out of the business of the employer. The record discloses, indisputably, that McConnell was an employee of El Paso Motor Company at the time of his injury, and the parties have stipulated that at such time he was engaged in performing duties of his employment. The language of the policy thus appears clearly to exclude Munroe as an insured under the facts surrounding the injury to McConnell.
Petitioner contends that Munroe was not excluded as an insured because in driving the Ford automobile he was not acting in the course of his employment. The argument made is that although Munroe was employed by the named insured he was, nevertheless, not an "employee" of the named insured within the meaning of paragraph (a) unless his use of the automobile was within the scope of his employment. In support of this contention petitioner cites Lumber Mutual Casualty Ins. Co. of New York v. Stukes, 4 Cir., 164 F.2d 571; Svitak v. Sun Indemnity Co., 136 Neb. 303, 285 N.W. 604, and Hoosier Casualty Co. v. Miers, 217 Ind. 400, 27 N.E.2d 342. Lumber Mutual Casualty Ins. Co. of New York v. Stukes involved a policy provision similar to that in the instant policy. One of the crucial questions was whether at the time of injury to an employee of the named insured, occurring in the course of his employment, the driver of an insured truck was an employee of the named insured or was an independent contractor driving the truck with permission of the principal insured. The court did not hold that the driver, if employed by the principal insured, was not an employee within the meaning of the exclusionary clause of the policy if he was not in the course of his employment. As a matter of fact, the court's opinion indicates a contrary view. The last two cases cited deal with the status of the injured person and not with the status of the operator of the automobile. We do not regard any of the cited cases as analagous.
As heretofore noted, Section III makes one employed by the principal insured an insured as to all injured persons in two fact situations: (1) while driving an insured automobile within the scope of his duties, and (2) while actually using the automobile outside of the scope of his duties with permission of the principal insured. As to injuries to fellow employees in the course of their employment, petitioner's interpretation would eliminate as an insured one employed by the principal insured only in the first fact situation. That is hardly the fair import of the language of the exclusionary clause. Paragraph (a) is introduced by the words "This policy does not apply", thus indicating that what is to follow in paragraph (a) is intended to eliminate one employed by the principal insured as an insured in both fact situations. It seems to us that the obvious purpose of paragraph (a) is to relieve the insurer of all liability when one employee of the principal insured is injured in the course of his employment in an accident arising out of his employer's business, by another employed by the same employer, whether such other's use of the automobile is within the scope of his duties or is outside of the scope of his duties with his employer's permission. That purpose would not be accomplished if we gave paragraph (a) the interpretation for which petitioner contends.
If in the writing of paragraph (a) it had been the intention to eliminate as insureds only those employees acting within the scope of their duties it would have been a simple matter to insert limiting language to that effect after the word "employee". Limiting language of that very character was used to qualify insureds of class (1) and was used again to qualify insured fellow employees in paragraph (a). In the absence of any such limiting language the word "employee" as used in paragraph (a) will be given its usual and ordinary meaning and will be held to refer to one who is employed by the principal insured.
*72 Our interpretation of paragraph (a) accords with Appelman's statement of the purpose of such provisions. Insurance Law and Practice, Vol. 7, Sec. 4416, p. 240. It accords also with petitioner's own interpretation of the policy as a basis for this suit, it having alleged in its petition that Munroe was, on March 31st, "an employee of El Paso Motor Company" and that he was driving and operating the Ford automobile "while an employee of said Motor Company."
Petitioner contends that respondent lost its right to urge as a defense that Munroe was not an insured because it did not specifically allege in its answer that he was not an insured under the terms of the policy and did not assert that fact as a defense to the suit until it filed its second motion for judgment notwithstanding the jury's verdict. The question is governed by Rule 94, Texas Rules of Civil Procedure. That Rule requires affirmative pleading of certain defenses and continues: "Where the suit is on an insurance contract which insures against certain general hazards, but contains other provisions limiting such general liability, the party suing on such contract shall never be required to allege that the loss was not due to a risk or cause coming within any of the exceptions specified in the contract, nor shall the insurer be allowed to raise such issue unless it shall specifically allege that the loss was due to a risk or cause coming within a particular exception to the general liability; provided that nothing herein shall be construed to change the burden of proof on such issue as it now exists."
Respondent argues that the matter of who is insured under a policy of insurance is a part of the insurer's "basic promise", and that it was not the purpose of the quoted provisions of Rule 94 to require an insurer to allege that the person inflicting an injury was not covered by the basic promise. In support of its argument respondent cites Alamo Cas. Co. v. Richardson, Tex.Civ.App., 235 S.W.2d 726, writ refused, n. r. e. and Preferred Life Ins. Co. v. Stephenville Hospital, Tex.Civ.App., 256 S.W.2d 1006, no writ history. The case first cited undoubtedly lends support to respondent's position. Petitioner, on the other hand, argues that the quoted provisions of Rule 94 require an insurer to plead specifically all exceptions to its "general liability" under a policy and that paragraph (a) of Section III provides an exception to respondent's general liability. In support of its argument petitioner cites National Security Life & Casualty Co. v. Benham, Tex.Civ.App., 233 S.W.2d 334, writ refused, n. r. e.; Camden Fire Ins. Ass'n v. Moore, Tex.Civ.App., 206 S.W.2d 104, writ refused, n. r. e., and National Life & Accident Ins. Co. v. Leverett, Tex. Civ.App., 215 S.W.2d 939, writ dism. We do not regard any of the cases cited by the parties as binding on this Court in its construction and application of the Rule and consequently see no need to analyze them.
Before the adoption in 1941 of our present Rules of Civil Procedure a system of pleading had developed in this state in which there was much "sand-bagging" of courts as well as of opposing litigants. The pleading device known as a "general demurrer" coupled with the general denial method of putting in issue rebuttal defenses and defenses based on exceptions and exclusions led to innumerable reversals, interminable delays and unnecessary expense. In adopting the Rules of Civil Procedure this Court sought to eliminate these roadblocks to a sound administration of justice. The general demurrer was abolished. Rule 90, Texas Rules of Civil Procedure. By Rule 279 a party was denied the right to a submission of special issues on rebuttal defenses in the absence of special pleading. Luther Transfer & Storage, Inc., v. Walton, Tex.Sup., 296 S.W.2d 750. In the same spirit the quoted provisions of Rule 94 were intended to eliminate hidden defenses to liability based on exceptions contained in insurance policies. The ultimate object of all of these changes in rules of pleading was to require a litigant, in so far as was *73 reasonably possible, to put openly in issue on the trial of a case all of the reasons, in fact and in law, why the other party should not prevail.
Before the adoption of the Rules of Civil Procedure one suing on or for benefits under a policy of insurance was required to negative, in his pleading as well as in his proof, all of the policy exceptions to liability. Failure to do so was fatal. Pelican Fire Ins. Co. v. Troy Co-op. Ass'n, 77 Tex. 225, 13 S.W. 980 (Exceptions to liability on a fire insurance policy); Travelers' Ins. Co. v. Harris, Tex.Com.App., 212 S.W. 933 (Exceptions to liability on an accident insurance policy); Washington Fidelity Nat. Ins. Co. v. Williams, Tex.Com.App., 49 S.W.2d 1093 (Exceptions to liability on an automobile accident insurance policy); International Travelers Ass'n v. Marshall, 131 Tex. 258, 114 S.W.2d 851 (Exceptions to liability on an accident insurance policy). The quoted provisions of Rule 94 were intended to supersede this rule of pleading established by court decisions.
Rule 94 requires an insurer, on penalty of waiving the issue, to allege specifically that the loss was due to a risk or cause coming within a particular exception to its general liability. The exceptions which the insurer must specifically plead are those which limit its general liability for loss caused by the general hazards covered by the policy. In this case the general hazard covered by the policy, as applied to the facts, was the hazard of accidental injuries inflicted on persons through the use of the Ford automobile. Respondent's general liability was to pay on behalf of Munroe all sums he became obligated to pay as damages for such accidental injuries. By paragraph (a) of Section III respondent limited its general liability by providing, in effect, that the hazard of accidental injury to a fellow employee, in the course of his employment, arising out of the business of the employer was not covered by the policy. It thus appears that the provision limiting respondent's liability contained in paragraph (a) was precisely the type of limiting provision which respondent was required to plead on penalty of waiving its right to urge that provision as a defense to the suit.
Respondent argues, ultimately, that whether an exclusionary clause is a part of the "basic promise" which the insurer is not required to plead or is an exception to general liability which the insurer is required to plead is "usually entirely up to the draftsman" of the policy, and depends on the section of the policy under which the clause is placed. Under that theory the quoted provisions of Rule 94 could be nullified by including all exceptions to general liability under the definition of an insured. We cannot approve a theory that would accomplish that result.
The judgments of the Court of Civil Appeals and trial court are reversed and the cause is remanded to the trial court for the entry of judgment for petitioner. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1794989/ | 893 F. Supp. 476 (1995)
Kipling Delano FORBES, Plaintiff,
v.
Attorney General Janet RENO, and the United States Department of Justice, Equal Employment Opportunity Commission, William Miller, Director Office of Inspector General Equal Employment Opportunity Commission, Chairman & Commissioners, Equal Employment Opportunity Commission, Eugene V. Nelson, EEOC Pittsburgh Area Director, Joseph Hardiman, III, EEOC Supervisor, and Alan Archer, EEOC Investigator, Defendants.
Civ. A. No. 94-1225.
United States District Court, W.D. Pennsylvania.
June 27, 1995.
*477 *478 *479 *480 Kipling Delano Forbes, Monroeville, PA, pro se.
EEOC Office of Legal Counsel, Richard E. Dunlop, Washington DC, U.S. Attys. Office, Ryan Kennedy, Pittsburgh, PA, for defendants.
OPINION and ORDER OF COURT
AMBROSE, District Judge.
Plaintiff Kipling Delano Forbes ("Forbes"), acting pro se, has filed this action seeking damages for alleged statutory and constitutional violations arising out of the investigation of charges of discrimination filed with Defendant Equal Employment Opportunity Commission ("EEOC"). In addition to the EEOC, Forbes has named as defendants United States Attorney General Janet Reno and the United States Department of Justice (together, the "Government Defendants"), as well as various individual officers and employees of the EEOC. To this date, Forbes has filed a Complaint (Docket #: 1), an Amended Complaint (Docket #: 3), and a Supplemental and Amended Complaint (Docket #: 30), (collectively, the "Complaint"), totalling 149 pages of fact, argument and case citations detailing the various federal statutes and constitutional provisions allegedly violated by Defendants. Pending before the Court are Motions to Dismiss the Complaint for lack of subject matter jurisdiction and for failure to state a claim pursuant to Fed.R.Civ.Proc. 12(b)(1) and 12(b)(6). After carefully considering the contentions of the parties, the Motions will be granted for the following reasons, and the Complaint will be dismissed in its entirety.
Despite the length of the Complaint, the factual averments forming the basis of this action are few and straightforward. Forbes is a black, 45-year-old male with advanced degrees in philosophy and psychology, and he was apparently employed as a professor at a state university. The Complaint does not specify what adverse employment action Forbes suffered in his employment, but apparently Forbes felt at some point that he was the victim of discrimination at the hands of the university, because he filed charges of race and age discrimination with the EEOC against the university in November of 1990 and in April and October of 1993. Forbes filed an additional charge of unlawful retaliation against the university in October 1993.
The EEOC began investigating these charges. Forbes entered into a settlement of the November 1990 charge, allegedly because "Defendant forced settlement of that charge ... by threatening to find no violation." (Complaint, Docket #: 1, ¶ 4.) The EEOC investigation with respect to the 1993 charges went forward and apparently continued for more than 180 days without a decision being reached by the EEOC and without Forbes being notified that 180 days had passed and that he could at that point choose to bring a private action in a court of law rather than letting the EEOC continue to investigate his charge. Our understanding of the Complaint indicates that Forbes claims that Defendants' actions violated his rights under statutory and constitutional law in three distinct ways. First, Forbes claims that Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e(5)(f), requires the EEOC to automatically issue notice to a complainant of his right to sue his employer in a court of law once the EEOC investigation has been pending for 180 days, regardless of whether the EEOC has completed its investigation and regardless of whether the complainant has requested a right-to-sue letter. Second, Forbes claims that the EEOC failed to properly and thoroughly investigate his charges of discrimination and used improper methods in its evaluation of his charges so as to amount to fraudulent conduct by Defendants. *481 Third, Forbes contends that because his former employer was in essence a state government, Title VII required the EEOC to relinquish jurisdiction of his charge to the Government Defendants once 30 days had passed without a reconciliation having been reached with the university. Forbes contends that the EEOC's failure to automatically issue the right-to-sue notice after 180 days and/or its failure to inform him that he had a right to sue in a court of law after 180 days, as well as its inadequate or improper investigation of his charges of discrimination and its failure to relinquish jurisdiction of his charge to the Government Defendants violated Title VII, the Age Discrimination in Employment Act, the Administrative Procedures Act, the Federal Tort Claims Act, and his rights under the Fifth, Thirteenth and Fourteenth Amendments to the U.S. Constitution. Forbes also contends that Defendants conspired and fraudulently colluded with a state (here, presumably his former employer) to deprive him of his Fifth Amendment Due Process rights and his constitutional right to access to the courts. Forbes seeks money damages against Defendants in excess of $50,000 as well as injunctive relief.
We first consider whether the doctrine of sovereign immunity precludes this Court from exercising jurisdiction over Forbes' Title VII claims against the EEOC, the Department of Justice, and the individual defendants in their official capacities, and we conclude that it does. A federal court is without jurisdiction to entertain a suit for money damages against the United States or its agencies unless sovereign immunity has expressly been waived. United States v. Mitchell, 445 U.S. 535, 538, 100 S. Ct. 1349, 1351, 63 L. Ed. 2d 607 (1980); United States v. Testan, 424 U.S. 392, 399, 96 S. Ct. 948, 953, 47 L. Ed. 2d 114 (1976). The doctrine of sovereign immunity applies to individual officers sued in their official capacity, because an official capacity suit is "only another way of pleading an action against an entity of which an officer is an agent." Kentucky v. Graham, 473 U.S. 159, 165, 105 S. Ct. 3099, 3104, 87 L. Ed. 2d 114 (1985). Although Forbes contends that this Court has jurisdiction pursuant to 28 U.S.C. § 1331, that section is not a waiver of sovereign immunity. B.K. Instrument, Inc. v. United States, 715 F.2d 713, 724 (2d Cir.1983). Moreover, Title VII does not contain a waiver of sovereign immunity. Forbes' arguments to the contrary are not persuasive. Forbes' claims against the official defendants pursuant to Title VII will accordingly be dismissed for lack of jurisdiction.
We note that both the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671 et seq. ("FTCA"), and the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 701-706, constitute limited waivers of the federal government's sovereign immunity to suit. The FTCA requires that a claimant first present an administrative claim to the appropriate federal agency before commencing suit in federal court. 28 U.S.C. § 2675. This is a jurisdictional requirement that cannot be waived and that must be strictly construed. Livera v. First National State Bank of New Jersey, 879 F.2d 1186, 1194 (3d Cir.1989); Pennsylvania v. National Association of Flood Insurers, 520 F.2d 11 (3d Cir.1975), overruled on other grounds, 659 F.2d 306 (3d Cir.1981). Nothing in the Complaint indicates that Forbes has complied with this jurisdictional prerequisite, and thus Forbes' claims pursuant to the FTCA will accordingly be dismissed for lack of jurisdiction.
Moreover, a claim for money damages is not within the sovereign immunity waiver of the Administrative Procedures Act. 5 U.S.C. § 702; Id. at 719. Forbes' claims for monetary relief against the EEOC, the Department of Justice, and the individual defendants in their official capacities under the APA are also barred by the doctrine of sovereign immunity.
Forbes has asked for injunctive relief pursuant to the APA, but this claim is also precluded because of lack of jurisdiction. The APA provides for judicial review of final agency action when no other adequate relief is available. 5 U.S.C. § 704. "Final" for purposes of the APA must include some determination of the legal rights and obligations of the parties. Georator Corp. v. Equal Employment Opportunity Commission, 592 F.2d 765, 768 (4th Cir.1979). Although *482 Forbes insists otherwise, nothing that the EEOC did or failed to do in this case constituted the "final" action necessary to grant this Court jurisdiction over the APA claims because the EEOC investigation cannot impose liability nor does it make any determination on the rights and obligations of either Forbes or his former employer. Id.; Stewart v. Equal Employment Opportunity Commission, 611 F.2d 679, 683 (7th Cir.1979). As one Court aptly stated, "[s]tanding alone, [the EEOC investigation] is lifeless, and can fix no obligation nor impose any liability on the plaintiff. It is merely preparatory to further proceedings." Georator, 592 F.2d at 768. Moreover, Forbes' right to bring a de novo right of action after 180 days of filing his charge of discrimination constitutes an adequate remedy under the APA. Ward v. EEOC, 719 F.2d 311 (9th Cir.1983); Stewart, 611 F.2d at 684-84. Because there is no final agency action here and because Forbes had an otherwise adequate remedy, this Court lacks jurisdiction over Forbes' claims pursuant to the APA.
Because there is no basis for a waiver of sovereign immunity, Forbes' attempts to assert a cause of action directly against the United States for alleged violation of the Fifth, Thirteenth and Fourteenth Amendments against the EEOC, the Department of Justice, and the individual Defendants in their official capacities also fail for lack of jurisdiction. See Jaffee v. United States, 592 F.2d 712, 717 (3d Cir.1979) (doctrine of sovereign immunity precludes suit for monetary and equitable relief brought directly against the United States for alleged constitutional violations).
Forbes also seeks monetary relief against the individual defendants in their individual capacities under Title VII, the Age Discrimination in Employment Act ("ADEA"), and the Fifth, Thirteenth and Fourteenth Amendments, as well as for fraud and for conspiracy to deprive him of his constitutional right to access to the courts. In a 12(b)(6) motion to dismiss, the Court must "accept as true all allegations in the complaint and all reasonable inferences that can be drawn from them after construing them in the light most favorable to the non-movant." Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir.1994). Moreover, we cannot dismiss a case pursuant to Rule 12(b)(6) unless it clearly appears that no relief can be granted under any set of facts that could be proved consistent with the allegations in the Complaint. Id. Even under this liberal pleading standard, however, we conclude that Forbes has failed to state a claim under any of the statutes or constitutional provisions named in the Complaint. We consider each in turn.
1. Title VII. Title VII does not grant a plaintiff either an express or an implied right to bring suit against the EEOC for inadequate or improper investigations of a plaintiff's charge of discrimination. See, e.g., Ward, 719 F.2d at 314; Scheerer v. Rose State College, 950 F.2d 661, 663 (10th Cir. 1991); Francis-Sobel v. University of Maine, 597 F.2d 15, 18 (1st Cir.1979); Gibson v. Missouri Pacific Railroad, 579 F.2d 890, 891 (5th Cir.1978). Stewart, 611 F.2d at 683. The remedy afforded to a complainant who is dissatisfied with the EEOC's handling of his charge is to bring a de novo action in a court of law. Stewart, 611 F.2d at 682. For the same reasons that Forbes has no right of action against the EEOC, we conclude that there is no implied right of action under Title VII against Attorney General Reno for her alleged failure to automatically "assert jurisdiction" over the EEOC investigation after 30 days had passed. Moreover, Title VII does not require the EEOC to conclude its investigations within 180 days or to automatically issue a notice of right-to-sue at 180 days if its investigation is still pending at that time. Id. citing Occidental Life Ins. Co. v. E.E.O.C., 432 U.S. 355, 361, 97 S. Ct. 2447, 2452, 53 L. Ed. 2d 402 (1977); Turner v. Texas Instruments, Inc., 556 F.2d 1349, 1352 (5th Cir.1977); Williams v. Southern Union Gas Co., 529 F.2d 483, 487 (10th Cir.1976). See also 29 C.F.R. § 1601.28 (1994) (notice of right-to-sue when investigation is still pending after 180 days is issued only upon complainant's request in writing). For these reasons, the Complaint fails to state a claim under Title VII.
2. ADEA. The same reasons that dictate that Title VII does not provide *483 Forbes with a cause of action in this case also apply to Forbes' claims under the ADEA. The ADEA does not create an express or implied right of action for a complainant's dissatisfaction with the EEOC's handling of a charge. Becker v. Sherwin Williams, 717 F. Supp. 288, 294 (D.N.J.1989). As in Title VII, Congress granted ADEA plaintiffs an express remedy of bringing a de novo action in a court of law once a charge of discrimination has been pending more than sixty days with the EEOC. Id. Forbes' claim pursuant to the ADEA will accordingly be dismissed for failure to state a claim.
3. Fifth Amendment. Forbes contends that Defendants' actions deprived him of his due process rights to a de novo trial of his charges of discrimination. Where an agency does not adjudicate or make binding determinations which directly affect the legal rights of individuals, the due process considerations of the Fifth Amendment do not attach. Francis-Sobel, 597 F.2d at 18; Georator, 592 F.2d at 768. The EEOC's function is investigative, and thus the EEOC does not make determinations affecting the legal rights of individuals because those individuals retain the right to a de novo review of their charges of discrimination in a court of law. See Georator, 592 F.2d at 768; Francis-Sobel, 597 F.2d at 18; Connor v. EEOC, 736 F. Supp. 570, 572 (D.N.J.1990). Forbes' Fifth Amendment rights were not implicated here and he has thus failed to state a claim under the Fifth Amendment.
4. Thirteenth Amendment. Forbes argues that "[a]bsent the right to trial de novo as a matter of law, Plaintiff finds the grant of recourse to the courts in his case arbitrary, capricious and a feudalistic gesture which carries with it those "badges of slavery" proscribed by the Thirteenth Amendment. (See Pl.Br.Opp., Docket #: 20 at 27.) This argument is devoid of merit. We simply fail to see how the constitutional amendment proscribing slavery and involuntary servitude applies to the facts alleged in the present case, and we find that Forbes has failed to state a claim under the Thirteenth Amendment.
5. Fourteenth Amendment. By its very terms, the Fourteenth Amendment can be violated only by conduct that may be fairly characterized as "state action." Lugar v. Edmondson Oil Co. Inc., 457 U.S. 922, 102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982). Forbes insists that the EEOC, by its actions, "entered into a `symbiotic relationship' with a State government involved in State actions of discrimination and unconstitutional deprivations of Fifth Amendment liberty and property interests, and was thereby accountable for its `significant involvement' in such discriminatory and unconstitutional State actions" under the Fourteenth Amendment. See Pl.Br., Docket #: 14 at 41. We find this argument entirely without merit. The facts alleged in the Complaint refer to actions taken by federal officials of a federal agency pursuant to a duty prescribed by federal law. Nothing in the Complaint suggests that state action was involved here, and Forbes' Fourteenth Amendment claims will also be dismissed.
6. Conspiracy. Forbes alleges that Defendants conspired and fraudulently colluded to deprive Forbes of his due process rights under the Fifth Amendment and of his right to meaningful access to the courts. Although Forbes does not specifically cite to 42 U.S.C. § 1985(3) as the basis of this claim, we understand his arguments as attempting to state a claim pursuant to that statute. We have carefully considered both the factual averments of the Complaint as well as the "evidence of fraud, and fraud by collusion and conspiracy" set forth by Forbes in his brief. See Pl.Br., Docket #: 20 at 24-25. We conclude that the Complaint fails to set forth any facts from which a conspiratorial agreement among Defendants and Forbes' former employer can be inferred, and we find that the "facts" asserted by Forbes amount to nothing more than vague and conclusory assertions and argument regarding the existence of a conspiracy or fraud. Conclusory allegations of fraud are insufficient to state a § 1985(3) claim. D.R. by L.R. v. Middle Bucks Area Vo. Tech. School, 972 F.2d 1364, 1377 (3d Cir.1992).
7. Common Law Fraud. To the extent that Forbes is attempting to state a common law fraud claim against the individual defendants, we decline to exercise supplemental jurisdiction over such a claim. See 28 U.S.C. § 1367(c)(3).
*484 In sum, the entire Complaint will be dismissed in its entirety for lack of jurisdiction and for failure to state a claim pursuant to Fed.R.Civ.Proc. 12(b)(1) and 12(b)(6). The Complaint will be dismissed with prejudice, since Forbes has already amended his Complaint twice and has been afforded ample opportunity to state a legally sufficient basis for his lawsuit. To allow him further opportunity to amend would be futile. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2159312/ | 860 F. Supp. 1170 (1994)
James L GRAEF and John P McClain, Plaintiffs,
v.
CHEMICAL LEAMAN TANK LINES, et al, Defendants.
No. 1:94-CV 0216.
United States District Court, E.D. Texas, Beaumont Division.
August 4, 1994.
*1171 John Fritz Barnett, Glickman & Barnett, Houston, for plaintiffs.
V. Scott Kneese, Elizabeth Hall, Bracewell & Patterson, Houston, J. Anthony Messina, Raymond A. Kresge, Pepper Hamilton & Scheetz, Philadelphia, PA, for defendants.
MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS' MOTION TO REMAND
COBB, District Judge.
Defendants removed this case asserting federal question jurisdiction arising out of the preemptive force of the Labor Management Relations Act (LMRA). Plaintiffs have moved to remand asserting that the LMRA does not preempt their state law causes of action. For the following reasons, the motion to remand is DENIED.
I. FACTS
At all relevant times, plaintiffs Graef and McClain were employed by Chemical Leaman Tank Lines (Chemical Leaman) as truck drivers. The plaintiffs originally sued Chemical Leaman and other defendants in Texas state court arising out of an employment dispute.[1]
*1172 In the original petition, plaintiff Graef alleged that on December 21, 1990, he was injured on the job while driving a truck for Chemical Leaman. Graef then filed a workers' compensation claim. According to Graef, his doctor issued a release to return to work in November, 1993. However, Graef alleges that Chemical Leaman refused to permit him to return to work. The petition further alleges that "[t]he defendant corporations first claimed that they needed to evaluate [Graef's] medical condition and receive more medical information from his physician." Later, Chemical Leaman requested a physical exam. However, Graef claims Chemical Leaman was simply stalling until December 21, 1993, when his DOT certificate was scheduled to expire. After his DOT certificate expired, Chemical Leaman terminated Graef on December 28, 1993.
Similarly, plaintiff McClain alleged that he suffered an on-the-job injury. He, too, filed a worker's compensation claim. Although he has not been terminated, he alleges that the defendants have stated their intention not to allow him to return to work.
Plaintiffs claim that the defendants' conduct gives rise to various state law causes of action. Their petition alleges that the conduct vests each plaintiff with claims against each defendant for (1) wrongful discharge pursuant to Tex.Rev.Civ.Stat. § 8307c; (2) intentional infliction of emotional distress; and (3) fraud and conspiracy to defraud. (See Plaintiff's Original Petition p. 4).
On April 15, 1994, defendants removed the case, asserting LMRA preemption. In support of removal, the defendants pointed out that Graef and McClain are members of the Teamsters Union Local 988 (Union). At the time of the events in question, a collective bargaining agreement (CBA) had been reached by Chemical Leaman and the Union. According to defendants, the detailed CBA governed a wide spectrum of conduct touching on the employment relationship between management and the workers. In particular, defendants pointed to specific provisions governing (1) workers' compensation benefits; (2) the right of Chemical Leaman to select an independent medical examination; (3) the grievance procedures; and (4) seniority rights. The defendants urged that the state law claims were preempted by the LMRA because resolution of the claims required interpretation of certain provisions contained in the CBA. The defendants further asserted that certain Department of Transportation (DOT) regulations required Graef to submit to a DOT-approved physical before the defendants could release Graef to work. Finally, the defendants maintained that Graef was currently pursuing claims identical to those involved in this case in a labor grievance.
On May 17, thirty-two days after the defendants filed their notice of removal, plaintiffs filed their motion to remand this case to state court.[2]
II. DISCUSSION
The legal question presented by this case is whether the LMRA preempts any of plaintiffs' state law claims. If the answer is yes, the case arises under federal law by virtue of the doctrine of "complete preemption," and the defendants' removal was proper. See generally Avco Corp. v. Aero Lodge No. 735, Int'l Ass'n of Machinists & Aerospace Workers, 390 U.S. 557, 88 S. Ct. 1235, 20 L. Ed. 2d 126 (1968).
Of course, the touchstone of the court's preemption analysis is the statute. Section 301 of the LMRA provides: *1173 Suits for violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
29 U.S.C. § 185(a).
Broadly interpreting section 301, the Supreme Court has concluded that "if the resolution of a state-law claim depends upon the meaning of a collective-bargaining agreement, the application of state law (which might lead to inconsistent results since there could be as many state-law principles as there are States) is preempted and federal labor-law principles necessarily uniform throughout the Nation must be employed to resolve the dispute." Lingle v. Norge Division of Magic Chef, 486 U.S. 399, 405-06, 108 S. Ct. 1877, 1881, 100 L. Ed. 2d 410 (1986). Consequently, each of the plaintiffs' state law claims must be considered under applicable Supreme Court law as interpreted by the Fifth Circuit.
A. Retaliatory Discharge.
The plaintiffs' first cause of action is for retaliatory discharge. The plaintiffs claim that they were terminated (or in McClain's case, threatened to be terminated) in violation of Tex.Rev.Civ.Stat. art. 8307c. Although that statute has recently been codified at Tex.Labor Code Ann. § 451.001, its substance remains the same. Section 451.001 precludes an employer from discharging or in any other manner discriminating against an employee because the employee has in good faith filed a workers' compensation claim. Tex.Labor Code Ann. § 451.001. The Fifth Circuit has held that, generally, the resolution of such a claim does not require an interpretation of the collective bargaining agreement. Jones v. Roadway Express, Inc., 931 F.2d 1086 (5th Cir.1991), reh'g denied, 936 F.2d 789 (5th Cir.1991).
Jones began by examining the elements of the cause of action. The court noted that the plaintiff asserting such a cause of action need not prove that he was discharged solely because of his proceeding with his worker's compensation claim; he need only prove that his claim was a determining factor in his discharge. Jones, 931 F.2d at 1090. According to the court, "the trial court has to ascertain if retaliation was among the reasons for which [the employer] dismissed [the employee]." The court noted that the employer may have had other reasons, even reasons which the CBA justified, for firing the employee. But if retaliation was a factor, then for purposes of an art. 8307c claim, an interpretation of the CBA is not inextricably intertwined with the state law claim. Id.
Consequently, the general rule is that a claim that an employer retaliated against an employee for filing a workers' compensation claim is not preempted by the LMRA. Id.; see also Anderson v. American Airlines, Inc., 2 F.3d 590, 596 (5th Cir.1993). The Fifth Circuit has further noted that although the claim is not preempted, "either party may still use the CBA to support the credibility of its claims." Jones, 931 F.2d at 1090. In other words, although the present employers "may defend against [plaintiffs'] article 8307c claim by arguing that [their] actions were justified by the CBA and its rules ...," this fact does not transform the claim into one which requires an interpretation of the CBA. Anderson, 2 F.3d at 596-97.
Defendants argue that the plaintiffs are, in reality, complaining about the operation of the CBA's seniority provisions. The defendants rely on Medrano v. Excel Corp., 985 F.2d 230 (5th Cir.1993). In Medrano, however, the plaintiff alleged that a specific provision of the CBA itself discriminated against certain employees who settled their workers' compensation claims. Medrano, 985 F.2d at 234. Therefore, the Fifth Circuit concluded that resolution of the claim required an interpretation of the collective bargaining agreement, and the claim was preempted.[3]
*1174 Medrano does not support the defendants' position. In the present case the plaintiffs have not challenged the validity of any specific provision of the CBA. The plaintiffs allege that they were retaliated against for filing a compensation claim. Although the defendants may argue that their actions were justified in light of the CBA's provisions, according to Jones, this does not convert the claim into one which is preempted by the LMRA. Consequently, the plaintiffs' claims for retaliatory discharge are not preempted by the LMRA.
B. Intentional Infliction of Emotional Distress
However, as noted at outset, if any of the plaintiffs' claims are preempted by the LMRA, federal question jurisdiction exists. The plaintiffs here do not confine their case to a claim for retaliatory discharge as did the plaintiffs in Jones.[4] The present plaintiffs have also sued for intentional infliction of emotional distress.[5]
The Fifth Circuit recently analyzed a claim for intentional infliction of emotional distress under the rubric of LMRA preemption and concluded that the determination whether the employer acted wrongfully in the way it transferred the employee, required him to take different tests, and ultimately terminated him required an analysis of the employer's obligations under the collective bargaining agreement. Burgos v. Southwestern Bell Tel. Co., 20 F.3d 633, 636 (5th Cir.1994). Burgos relied in part on the Fourth Circuit's en banc decision in McCormick v. AT & T Technologies, Inc., 934 F.2d 531 (4th Cir. 1991), cert. denied, ___ U.S. ___, 112 S. Ct. 912, 116 L. Ed. 2d 813 (1992).
Burgos and McCormick reasoned that the plaintiff pursuing a claim for intentional infliction of emotional distress has the burden of proving wrongful conduct on the part of the defendant. The plaintiff must establish not that the defendant's conduct was wrongful in some abstract sense, but wrongful under the circumstances. Burgos, 20 F.3d at 636. Critically, the court stated that "the circumstances that must be considered in examining management's conduct are not merely factual, but contractual, and the collective bargaining agreement is a crucial component of these circumstances." Id.
In the present case, plaintiff Graef essentially alleges that Chemical Leaman intentionally inflicted emotional distress upon him by refusing to reinstate him pending an independent medical examination. Moreover, Graef claims that "the defendants' conduct was outrageous and intended to cause serious mental anguish to the plaintiff and his family, especially during the Christmas holiday when a family seeks peace and security." As the defendants point out, the CBA reserves to the employer the right to select an independent medical examination should the employer desire a second opinion. Although Graef alleges the employer was simply "stalling" until Graef's DOT certificate expired, the collective bargaining agreement reserved to the employer a right to obtain an independent medical. Graef's claim is, in essence, that the employer did not have the right to delay returning him to work, and that assuming the employer did have such a right, that the delay was unreasonable and wrongfully motivated.
The court's interpretation of Graef's suit is amplified by statements made by Graef in his *1175 labor grievance petition (which currently pends). In his grievance, Graef states that the CBA has been breached by Chemical Leaman for numerous reasons, including a "contract violation under Article 12, section 12.1." Article 12, section 12.1 is the provision of the CBA reserving to the employer the right to select its own medical examiner or physician. To determine whether the employers' actions in "stalling" under that provision amounted to an intentional infliction of emotional distress, the court will need to assess the scope of the employer's rights under that provision. According to Burgos, evaluation of the claim for intentional infliction of emotional distress requires an examination of an employer's conduct allegedly taken pursuant to a specific term of the collective bargaining agreement. This state law claim is therefore preempted, and this court has federal question jurisdiction over this case. The defendants' removal was proper. See also Brown v. Southwestern Bell Tel. Co., 901 F.2d 1250, 1253 (5th Cir. 1990).
C. Fraud and Conspiracy to Defraud
The plaintiffs' fraud and conspiracy to defraud claims are inartfully pleaded. The plaintiffs do not allege which, if any, misrepresentations form the basis of these claims.[6] Without knowing what statements were allegedly made and in what context, it is difficult, if not impossible, to determine whether the plaintiffs are alleging that statements contained within or in connection with the CBA form the basis of these claims. Consequently, at this point, a preemption analysis, which involves determination of whether the claim requires interpretation of the CBA, is impossible. However, the analysis is also unnecessary at this stage of the litigation. The court has concluded that the intentional infliction claim is preempted by the LMRA, and the court is satisfied that the defendants have discharged their burden of proving that removal was proper. Assuming the plaintiffs desire to pursue these fraud claims, the plaintiffs are ordered to replead these claims with particularity, in accordance with FED. R.CIV.P. 9. This will allow a determination whether resolution of these claims depends on an interpretation of the CBA.
D. Loose Ends
Because plaintiffs' claims for intentional infliction of emotional distress are preempted, the claims present federal questions. The question remains whether the court may exercise supplemental jurisdiction over the retaliatory discharge claim, which is not preempted, in light of 28 U.S.C. § 1445(c). Section 1445(c) generally precludes removal of actions arising under state workers' compensation laws.
Although the Fifth Circuit has held that a retaliatory discharge claim "arises under" the workers' compensation laws of the state of Texas, and, therefore, is not ordinarily removable, see Jones, 931 F.2d at 1092, the plaintiffs have waived this procedural defect by not timely filing a motion to remand. Williams v. AC Spark Plugs, 985 F.2d 783 (5th Cir.1993).[7] Having waived the objection, *1176 the only question is whether the case could originally have been filed in federal court. Plainly, the 8307c claim is supplemental to the intentional infliction claim, and the court could have taken jurisdiction over the supplemental claim had the plaintiffs filed suit here originally. Baris v. Sulpicio Lines, 932 F.2d 1540 (5th Cir.1991). Moreover, the federal courts are empowered to hear claims arising under workers' compensation law, provided a jurisdictional predicate is met. See Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 81 S. Ct. 1570, 6 L. Ed. 2d 890 (1961); Northbrook National Ins. Co. v. Brewer, 493 U.S. 6, 110 S. Ct. 297, 107 L. Ed. 2d 223 (1989). In this case, the predicate is 28 U.S.C. § 1367 (authorizing the exercise of supplemental jurisdiction over all other claims that are so related to claims in the action within the court's original jurisdiction that they form part of the same case or controversy under Article III). Consequently, 28 U.S.C. § 1445(c) does not compel remand of the retaliatory discharge claim.
III. CONCLUSION
The LMRA preempts the plaintiffs' claims for intentional infliction of emotional distress, and the claims, therefore, present federal questions. This court has jurisdiction over the case, and it was properly removed. Although the retaliatory discharge claims are not preempted and are ordinarily not removable due to the statutory limitation contained in 28 U.S.C. § 1445(c), the plaintiffs waived this objection by not timely moving to remand. Therefore, the retaliatory discharge claims were properly removed pursuant to the court's supplemental jurisdiction over those claims. As to the remaining claims for fraud and conspiracy to defraud, a detailed preemption analysis is, at this point, premature, and the plaintiffs are ORDERED to replead those claims under FED.R.CIV.P. 9 should they wish to pursue them.
It is therefore ORDERED that plaintiffs' motion to remand is DENIED.
NOTES
[1] The other defendants include Chemical Leaman Corporation, John Gallagher, Gary Bailey, and Dennis Copeland. Gallagher is Chemical Leaman Tank Lines' terminal manager. Dennis Copeland is the Vice President of Human Resources and Labor Relations for Chemical Leaman Tank Lines, Inc. The plaintiffs' disclosures identify Bailey as a person with knowledge of Chemical Leaman's pattern and practice of terminating workers who file a compensation claim.
[2] The court notes that the clerk's filestamp on the plaintiffs' motion to remand reflects a date of May 19, 1994. However, the certificate of service states that the remand motion was served on May 17, 1994. Evidently, defendants do not take issue with the plaintiffs assertion that the motion to remand was filed thirty-two, rather than thirty-four, days after the notice of removal was filed. However, as demonstrated infra, the motion to remand was untimely regardless of whether it was made thirty-two or thirty-four days after the filing of the defendants' notice of removal.
[3] The Medrano decision emphasized from the outset that the case "[presented] a little twist in the basic question of whether a state claim for retaliatory discharge under workers' compensation law is pre-empted pursuant to a collective bargaining agreement." Medrano, 985 F.2d at 231.
[4] In Jones the court noted that the plaintiff "amended his complaint to assert solely a cause of action under article 8307c." Jones, 931 F.2d at 1088. Indeed, the district judge in Jones emphasized that the plaintiff in Jones had expressly withdrawn certain section 301 allegations and was instead reasserting his article 8307c claim. Id. The plaintiffs in the present case pleaded three independent causes of action. This case is, therefore, distinguishable from Jones in that the plaintiffs have never abandoned their claims for intentional infliction of emotional distress.
[5] At the hearing on this motion, counsel for plaintiff characterized his suit as a simple one for retaliatory discharge. This inaccurate characterization fails to account for the fact that the plaintiffs' petition alleges three independent causes of action. Although the three state law claims seem to stem from the same conduct allegedly committed by the defendants, the preemption analysis focuses, pragmatically, on the elements which the plaintiff must prove to satisfy each of his pleaded causes of action.
[6] At oral argument on this matter, counsel for plaintiffs argued that the fraud claims were based on a theory known as "forced disclosure." That theory is premised on the idea that when a discharged employee seeks work elsewhere, the employee will be forced to disclose the reason for his prior termination. According the plaintiffs, the disclosure will amount to the making of a false statement, and gives rise to a claim for fraud. However, the pleadings do not bear out the specifics of this cause of action.
[7] The plaintiffs argue that the motion to remand was timely under 28 U.S.C. § 1447(c) because the notice of removal was served on plaintiffs by mail, and FED.R.CIV.P. 6(e) should allow them three extra days, for a total of thirty-three days in which the motion to remand may be filed.
Accepting the premise that the motion to remand was filed thirty-two days after the filing of the notice of removal, Rule 6(e) only enlarges time limits by three additional days in circumstances in which "a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon the party and the notice or paper is served upon the party by mail." 28 U.S.C. § 1447(c) requires a motion to remand for procedural defects be made within 30 days after the filing of the notice of removal, rather than after service of the notice of removal. See Carr v. Veterans Administration, 522 F.2d 1355 (5th Cir.1975); accord Rashid v. Schenck Const. Co. Inc., 843 F. Supp. 1081, 1084 (S.D.W.Va. 1993); but see Chott v. Cal Gas Corp., 746 F. Supp. 1377 (E.D.Mo.1990).
The court need not consider the situation where a notice of removal is filed but never served, or served after an unreasonable delay upon the opposing party. Equitably, a party should not be deemed to have waived procedural defects in removal when the party has no notice or knowledge of the filing of the notice of removal. However, there is no indication of such circumstances in this case. The plain languages of Rule 6(e) and 28 U.S.C. § 1447(c) conflict with the plaintiffs' argument on this issue. Consequently, the court agrees with the defendants that the plaintiffs' motion to remand was not timely. The objection to the non-removability of the retaliatory discharge claim has been waived. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2301906/ | 625 F. Supp. 1431 (1986)
BONANZA INTERNATIONAL, INC.
v.
RESTAURANT MANAGEMENT CONSULTANTS, INC., et al.
Civ. A. No. 83-0241.
United States District Court, E.D. Louisiana.
January 8, 1986.
*1432 *1433 Frederick J. Plaeger, II, Milling, Benson, Woodward, Hillyer, Pierson & Miller, New Orleans, La., for plaintiff.
Matt Greenbaum, New Orleans, La., for defendants.
OPINION
LIVAUDAIS, District Judge.
Plaintiff, Bonanza International, Inc. ("Bonanza"), a corporation incorporated under the laws of the State of Nevada and having its principal place of business in Texas, filed the above captioned civil action against defendants, Restaurant Management Consultants, Inc. ("RMC"), a Louisiana corporation with its principal place of business in Louisiana, Michael Kiene and Paul Kiene, both domiciliaries of Louisiana, seeking the recovery of unpaid royalties from sales by Bonanza Family Restaurants in the southern Louisiana area. Defendants, counterclaimed for damages based on Bonanza's alleged unjust termination of RMC's Area Distributor's Agreement and alleged unjust enrichment. Diversity jurisdiction is proper in this action under 28 U.S.C. § 1332, as the amount in controversy in both the main demand and the counterclaim exceeds the sum of $10,000.00, exclusive of interest and costs and is between citizens of different states.
On July 31, 1981, Michael Kiene purchased all property constituting the Bonanza Family Restaurant business formerly owned and operated by Dixie Stewart d/b/a Stewart Investments, Inc.[1] This sale included the transfer to Mr. Kiene of real estate, lease-hold interests and restaurant fixtures, as well as Stewart's interests and obligations under Bonanza's Area Distributor's Agreement for Southern Louisiana and various Bonanza franchise license agreements. (Plaintiff's Exhibits 1, 2 and 34).
*1434 Bonanza[2] consented to the assignment of the area distributor and franchise license contracts on the conditions that: a) Paul Kiene would guarantee in favor of Bonanza, all obligations under the Bonanza franchise license agreements and Area Distributor's Agreement (see Plaintiff's Exhibit 3) and; b) Michael Kiene would agree as Area Distributor, to pay all franchise royalties from his and other restaurants in the southern Louisiana area on a weekly basis and would agree to pay, at the closing of the Stewart sale, all monies owed to Bonanza by Stewart. (Plaintiff's Exhibit 15C). Bonanza also required Michael Kiene to participate in a five week training program prior to the closing. (Plaintiff's Exhibit 15A). Mr. Kiene declined the training, advising Bonanza that he had employed Bob McGee who had previously worked as an employee of Stewart and as regional training manager for Bonanza. (Plaintiff's Exhibit 15B).
In accordance with these provisions, Bonanza granted its consent to the assignment of the Franchise, License and Area Distributor's Agreements.[3]
The Area Distributor's Agreement, and the Bonanza Area Distributor General Operating Policies incorporated therein by reference, required Michael Kiene, as Area Distributor, to collect 4.8 percent[4] of gross sales from all Bonanza Family Restaurants in the southern Louisiana area and to remit, as royalties, one-half of this amount to Bonanza. Under the agreement, Bonanza's share of royalties was to be paid in full by check each week by Mr. Kiene. (Plaintiff's Exhibit 1 [Bonanza Sirloin Pit Area Distributor's Agreement for Southern Louisiana, Paragraph 5B and General Operating Policies for Bonanza Sirloin Pit Area Distributor's Page 3, Paragraph 2]).
In addition to his obligation to collect royalties from licensees and to remit one-half of these royalties on a weekly basis to Bonanza, Michael Keine, as Area Distributor, was also required to enforce operating standards of cleanliness and uniform quality for all Bonanza licensees in the area in accordance with the licensing agreement and operating policies between Bonanza and each licensee.
Section 14 of the Area Distributor's Agreement, states that the Agreement, "shall terminate automatically ... if the AREA DISTRIBUTOR shall fail to meet any obligations provided for in this agreement, or in the general operating policies applicable to all AREA DISTRIBUTORS, where such defaults shall continue for thirty days or more following the sending of written notice by IFC (Bonanza) to the AREA DISTRIBUTOR, or if he shall fail to take effective legal action against any defaulting BONANZA licensee within his area within a period of thirty days from discovery or notification of any default, infraction or violations of the licensing agreement or General Operating Policies." (Plaintiff's Exhibit 1).
In addition to his obligations as Area Distributor, Michael Kiene was also responsible, as franchise licensee, for the operation of five Bonanza Family Restaurants in the New Orleans area. (B-144, 4517 Veterans Hwy.; B-146, 131 St. Charles Avenue; B-150, 701 Veterans Hwy.; B-154, 9300 I-10 Service Road; and B-156, 4338 St. Charles Avenue). The license agreements for Bonanza Family Restaurants Nos. 144, *1435 146 and 150 provided for the situation where the Area Distributor was also a franchise licensee within his own area. Instead of requiring the licensee to remit a 4.8 percent royalty to the Area Distributor and the Area Distributor to remit one-half of that royalty to Bonanza, these license agreements simply provided for the licensee/area distributor to pay directly to Bonanza a royalty equaling 2.4 percent of each of his restaurant's gross weekly receipts. The licensee/area distributor was required under the agreements to complete a royalty report at the close of business each Sunday and to mail the report, together with the royalty check, to Bonanza each week. (Plaintiff's Exhibits 2B, 2C and 2E [Paragraphs VI G]).
The remaining two license agreements for B-154 and B-156 were standard license agreements which required the licensee to remit 4.8 percent royalty payment each week, together with a royalty remittance report, to the Area Distributor. It was also required that a copy of the royalty remittance report be sent to Bonanza. The Area Distributor, under its agreement with Bonanza, would in turn remit the 2.4 percent royalty to Bonanza (Plaintiff's Exhibits 2H and 2I [Paragraph VI G]).
In addition to being obligated to pay weekly royalties, Mr. Kiene, as licensee, was required under the licensing agreements to operate his restaurants in compliance with all applicable laws, including state health codes, and in compliance with the operational requirements of Bonanza, as described in the Bonanza operations and procedures manual, particularly with respect to restaurant cleanliness and food quality. (Plaintiff's Exhibits 2B, 2C, 2E, 2H and 2I [Paragraph IV, VI B, VI(I) and VII]).
The Bonanza Operations and Procedures Manual detailed Mr. Kiene's obligations to remit weekly royalties and maintain sanitary conditions, and it set out procedures for fulfilling these obligations. (Plaintiff's Exhibit 33).
Each of Mr. Kiene's five license agreements with Bonanza provided that Bonanza had the right to terminate the agreements, upon notice in writing to the licensee, in the event the licensee defaulted in the performance of the duties or obligations provided for therein, "including, but not limited to, the failure to make payment of royalties as herein provided, where such defaults shall continue for ten days or more following the sending of written notice...." The agreements further provided for termination in the event the licensee "... shall fail to adhere to the Bonanza Operation and Procedures Manual...."
Plaintiff alleges that despite Bonanza's efforts to support Mr. Keine and Restaurant Managment Consultants, Inc., they failed to comply with the terms and conditions of the applicable Area Distributor's Agreement and franchise license agreements.
Evidence adduced at the trial of this matter supports Bonanza's position that RMC, et al failed to honor the terms of the Area Distributor's and Franchise license agreements.
Beginning with cleanliness, the General Operating Policies for the Area Distributorship (Plaintiff's Exhibit 1) provides:
Enforcement of Standards
Because your franchise is an extremely valuable asset and in order to protect both your investment as well as the investments of all other AREA DISTRIBUTORS and Licensees, IFC reserves the right to police each and every BONANZA Sirloin Pit, directly or through the AREA DISTRIBUTOR, and specifically with regard to cleanliness of kitchen, dining area, exterior and food quality. An improperly or poorly maintained BONANZA or one serving inferior foods or functioning with substandard furnishings, equipment, signs or decor will injure or even seriously damage the reputation of any other BONANZAS, and we must protect this vital element of the profit picture of our DISTRIBUTORS and licensees; to this extent repeated or deliberate disregard of our standards may lead to franchise termination.
*1436 If the AREA DISTRIBUTOR is aware of or is called upon to correct any violations of chain policy (as enunciated in this and in the BONANZA General Operating Policies) with specific regard to Standards as outlined above, he will take immediate action to enforce the correction of such violation, including, if necessary, the prompt institution of legal proceedings against any improperly functioning BONANZA licensee. All such legal proceedings shall be coordinated with IFC's General Counsel. Similarly, DISTRIBUTOR shall, if necessary or if called upon, take prompt action to terminate the franchise of any delinquent or defaulting licensee and shall enforce all of the termination and post-termination clauses provided in the BONANZA License Agreements.
In addition, the individual Area Distributor Bonanza Sirloin Pit License Agreements, (See Plaintiff's Exhibit 2e for example), state:
"The operation of the AREA DISTRIBUTOR'S BONANZA Sirloin Pit shall be in strict conformity with the terms of this agreement and with the BONANZA Operating and Procedures Manual, which is specifically incorporated herein by reference and made a part of this agreement. In order to protect the good will and reputation of the BONANZA Sirloin Pit chain, BONANZA INTERNATIONAL reserves the right to inspect the subject BONANZA Sirloin Pit, particularly with regard to cleanliness of kitchen, dining area, exterior, menu, and food quality, and to insist that uniformity in these areas be maintained. The failure to maintain the required standards in the subject BONANZA Sirloin Pit to the satisfaction of BONANZA INTERNATIONAL shall be grounds for termination of this license as herein provided in paragraph XIV."
Paragraph XIV provides:
BONANZA INTERNATIONAL shall have the right to terminate this License Agreement upon notice in writing to AREA DISTRIBUTOR upon the occurrence of any of the following events:
In the event AREA DISTRIBUTOR shall fail to adhere to the BONANZA Operating and Procedures Manual, including all supplements, amendments and revisions thereto issued by BONANZA INTERNATIONAL.
Under the topic of "Sanitation" in the Bonanza Operations and Procedure Manual several factors are listed as important in outbreaks of food-borne illness. For example: "Improper food storage ... Uncovered foods on refrigerator shelves; raw foods stored directly on shelves or against refrigerator walls; raw foods in direct contact with prepared foods ... Insects and rodents ... Failure to eliminate breeding or entry areas; failure to eliminate grime, spilled food and trash which became food, breeding and nesting attractions for pests; failure to report and take control action when pests or evidence of pests are noted." In addition to this list, the manual sets forth procedures to be followed: For example: "Cover all food items; keep the kitchen clean of debris and sanitized; store food off the floor in sealed containers; control pests; keep corners and floors free of debris and wetness; etc." The manual specifically addresses methods of proper maintenance such as "cleaning stainless steel." Lastly, it recommends a detailed weekly checklist on Housekeeping and Maintenance procedures which should be followed.
In accordance with rights reserved in the License Agreements, Bonanza International conducted periodic inspections of the Bonanza Restaurants. In early 1982, Bonanza conducted an inspection of Mr. Kiene's restaurants and found them to be generally unclean and poorly managed.
Ralph Messer, a Bonanza Field Service Representative, prepared a Quality Assurance Evaluation which specified the various operational deficiencies. Mr. Messer discussed this evaluation with Mr. Kiene and his assistant, Harvey Hays. (Plaintiff's Exhibits 10A and 10B). Mr. Messer was particularly concerned that B-144 had received *1437 a "commendable" rating when operated by Stewart and that, after six months of operation by Mr. Kiene, the restaurant dropped two rating levels to "marginal." Mr. Messer advised Mr. Kiene that his restaurants would have received "commendable" ratings had he simply corrected the "soap and water" problems through routine cleaning. Following these evaluations, Mr. Kiene was warned in writing by Bonanza Vice-President, Robert Hacker, that his failure to immediately correct the various operational deficiencies could result in the termination of his franchise agreements. (Plaintiff's Exhibit 15P).
Shortly after Bonanza's unfavorable evaluation of Mr. Kiene's restaurants, the Orleans Parish Department of Health and Human Resources cited Mr. Kiene for twelve violations of the Louisiana Health Code at Bonanza Family Restaurant No. 146. (Plaintiff's Exhibit 12A).
The sanitary and operational conditions of Mr. Kiene's restaurants continued to decline. On May 19, 1982 and again on June 10, 1982, the Louisiana Health and Human Resources Department cited Mr. Kiene for more than ten violations of the State Health Code at Bonanza Family Restuarant No. 146, including three violations deemed "critical." (Plaintiff's Exhibits 12B and 12C). Enforcement proceedings were instituted by the Health Department and subsequently compromised based on Mr. Kiene's assurances that he would correct all violations within one month. (Plaintiff's Exhibits 12D and 12E). Mr. Kiene made some temporary improvements to the sanitary conditions of his restaurants, but soon thereafter allowed these conditions to again decline.
On October 10, 1982, the state health officials again cited Mr. Kiene for health code violations (Plaintiff's Exhibit 12H), and on October 28, 1982, Bonanza Field Service Representative, David Ledford, conducted an inspection of Mr. Kiene's restaurants, at which time Bonanza Family Restaurants Nos. 144 and 146 received the lowest possible rating of "provisional" (i.e. "far below all acceptable standards, immediate action required for improvement"). Mr. Ledford particularly noticed evidence of rodents and roaches and found the restaurants to be unclean. A Quality Assurance Evaluation detailing the many deficiencies was prepared for each restaurant and discussed with the restaurant managers. An "Action Plan" was developed to rectify the problems within a specified time frame, not to exceed thirty days. As with the previous evaluation performed by Mr. Messer, it was noted by Mr. Ledford that many of the problems could be rectified with "soap and water". (Plaintiff's Exhibits 10B and 10E).
As stated previously, one of the specified occurrences upon which Bonanza International could terminate a License Agreement upon notice in writing to the Area Distributor was the failure of the Area Distributor to adhere to the Bonanza Operating and Procedures Manual. Another occurrence upon which Bonanza International could terminate a License Agreement provides:
"In the event Area Distributor shall default in the performance of the duties or obligations provided for in this agreement, specifically including, but not limited to, the failure to make payment of royalties as herein provided, where such default shall continue for ten (10) days or more following the sending of written notice by Bonanza International to Area Distributor." (Bonanza International has the right to terminate the License Agreement).
(Plaintiff's Exhibit 2e).
In addition to improperly maintaining his restaurants, Mr. Kiene had become increasingly delinquent in remitting royalty payments to Bonanza. Royalty payments for November and December, 1981 sales were not remitted until March, 1982. This included royalties due from both Mr. Kiene's restaurants and from other restaurants in the southern Louisiana area.
Testimony at trial supported Bonanza's contention that they repeatedly attempted to contact Mr. Kiene to discuss the delinquent royalty payments but their calls went unanswered. Virginia Waldvogel, an *1438 employee of Mr. Kiene, testified that during the Spring of 1982, Mr. Kiene avoided calls from creditors and instructed her to advise Bonanza and the other creditors that he was unavailable.
Bonanza's Regional Marketing Manager, John Bill, after numerous unsuccessful attempts to telephone Mr. Kiene, wrote to him on May 27, 1982 about his lack of communication with Bonanza and the excessive delinquency in the payment of his National Creative Group advertising dues. (Plaintiff's Exhibit 15AA).
On June 2, 1982, Bonanza sent notice to Mr. Kiene that he was in default under his Area Distributor's Agreement due to the nonpayment of royalties from sales by his and other restaurants in his area for the months of March, April and May. He was notified that the failure to cure the default within ten days could result in the termination of his Area Distributor's Agreement with Bonanza. (Plaintiff's Exhibit 16). Within three days of receiving this letter, Mr. Kiene mailed a check to Bonanza for royalties through the month of April (Plaintiff's Exhibits 17A and 17B).
Mr. Kiene continued to be delinquent in the payment of all royalties. On October 20, 1982 he remitted to Bonanza royalties based on sales for the week ending July 11, 1982. This was the last royalty payment ever received by Bonanza for any of Mr. Kiene's five restaurants[5] (Plaintiff's Exhibits 25 and 32). Mr. Kiene acknowledged at trial that he remitted no royalty payments to Bonanza from licensee restaurants owned and operated by him, after July 11, 1982.
Gregg Simmons, Bonanza's Director of Credit and Collections, testified at trial that he made numerous attempts during October to telephone Mr. Kiene to discuss his non-payment of royalties. After Mr. Kiene failed to return his calls, Simmons reported Mr. Kiene's lack of cooperation to Bonanza management.
Bonanza representatives testified that after considering Mr. Kiene's four month delinquency in the payment of royalties from his restaurants, his prior default for non-payment of royalties, his total lack of cooperation or communication with Bonanza, his continued failure to maintain two of his restaurants in accordance with Bonanza standards and state health laws, and his failure to promptly remit to Bonanza royalties which he had collected from other restaurants in his area, Bonanza management determined that Mr. Kiene should be placed in default under his Area Distributor's Agreement and license agreements with Bonanza.
On November 5, 1982, Bonanza sent written notice of default under the Area Distributor's Agreement to Mr. Kiene as President of Restaurant Management Consultants, Inc. and separate written notices of default under each license agreement to Mr. Kiene as licensee. These notices were all sent to the proper addresses by certified mail, return receipt requested, and all detailed the reasons for the defaults under the agreements. (Plaintiff's Exhibits 7A-7F). The notices sent to RMC (Plaintiff's Exhibit 7A), and the notices sent to Mr. Kiene at B-144 and B-156 (Plaintiff's Exhibits 7E and 7F), were returned to Bonanza marked "refused". Defendant, Michael Kiene, personally received the remaining three default notices.
All three letters received by Mr. Kiene demanded repayment of royalties from sales after July 11, 1982, and the notices for B-144 and B-146 further demanded that he cure the operational defaults described in the October Quality Assurance Evaluations performed by Mr. Ledford. (Plaintiff's Exhibits 7B, 7C and 7D). All notices warned Mr. Kiene that his agreements with Bonanza would be terminated if his contractual defaults were not cured *1439 within the contractually specified period of time.
Subsequently, Mr. Kiene telephoned Mr. Simmons and said that he would send Bonanza approximately $23,000.00, Bonanza's portion of royalties collected by Mr. Kiene from other licensees in the southern Louisiana area. Mr. Simmons informed Mr. Kiene that in addition to the $23,000.00 in royalties from sales by other licensees, he would also have to remit approximately $13,000.00 in royalties from sales by his restaurants within a week (Plaintiff's Exhibit 17C).
On November 22nd, Bonanza received from Mr. Kiene some of the royalties owing from other licensees in Mr. Kiene's area but they did not receive any royalty payments owed by any of Mr. Kiene's five restaurants.
Becoming concerned with Mr. Kiene's lack of cooperation, Mr. Ledford reinspected Bonanza Restaurants Nos. 144 and 146 on November 28, 1982. Mr. Ledford found that the operational and sanitary deficiencies noted during his previous inspection had not only not been corrected but had actually worsened. (Plaintiff's Exhibits 10C and 10F). Mr. Ledford took photographs of the restaurants and delivered these photographs, together with copies of the Quality Assurance Evaluations, to Bonanza management. (Plaintiff's Exhibits 11A and 11B).
On December 9, 1982, following defendants' continued failure to remit royalties to Bonanza from the operations of Mr. Kiene's five restaurants for over a five-month period and the continued failure to correct the sanitary and operational violations in B-144 and B-146 within thirty days of the notice of default, Bonanza sent notice to Mr. Kiene that the Area Distributor's Agreement and the five franchise license agreements had been terminated in accordance with the terms of such agreements. Michael Kiene received notice of the terminations on or about December 13, 1982. (Plaintiff's Exhibits 8A-8F). These letters further advised Mr. Kiene to discontinue holding his restaurants out to the public as being Bonanza restaurants and to remove all signs, trademarks and advertising which would associate his restaurants with Bonanza.
Bonanza also alleges that dispite this notice, Mr. Kiene continued to operate his restaurants as Bonanza restaurants and therefore in addition to past royalties owed, Mr. Kiene also is indebted to Bonanza for any benefit he received from the use of the Bonanza trademarks and name following the termination of his license agreements. Evidence produced at trial did not support Bonanza's claim that Mr. Kiene did indeed benefit from the use of the Bonanza trademark and name after the termination of said agreements. Considering this factor and the fact that Bonanza had previously terminated the Area Distributor's and the five franchise license agreements, Bonanza's claim for amounts due from December 9, 1982-1983, lacks merit.
Mr. Kiene eventually discontinued operating his restaurants during 1983 (Plaintiff's Exhibit 6). The former B-146 was sold to his attorney, Bill Ryan, for a stated price of $250,000.00. According to Mr. Kiene, the remaining restaurants were sublet or assigned for an initial sum in excess of $350,000.00. He continues to receive monthly rents from three of the restaurants and receives a percentage of monthly sales from those restaurants leased to Alvin Copeland (which are operated as Copeland's Restaurants).
Mr. Kiene and RMC did not remit to Bonanza royalties which they received from other licensees in the southern Louisiana area both prior and subsequent to the termination of the Area Distributor's Agreement. These royalties were mostly for sales made before the effective date of termination. (Plaintiff's Exhibit 9). Defendants admitted at trial that the last payment for royalties for the other restaurants was made in late November of 1982.
It is axiomatic in all jurisdictions that written agreements have the effect of law on the parties who have legally formed them and that the courts are required to adjudicate the parties' rights in accordance *1440 with the terms of such written agreements. La.C.C. Art. 1983, as amended (formerly La.C.C. Art. 1901). National Bench Advertising, Inc. v. Parish of Jefferson, 458 So. 2d 179 (La.App. 5th Cir.1984); Laba v. Carey, 29 N.Y.2d 302, 308, 277 N.E.2d 641, 644, 327 N.Y.S.2d 613, 618 (1971). The "law between the parties" in the present case is clearly set forth in the Area Distributor's Agreement and Franchise License Agreements. (Plaintiff's Exhibits 1 and 2).
Paragraph 2 of the General Operating Policies for Bonanza Sirloin Pit Area Distributors, which was incorporated by reference into the Bonanza Sirloin Pit Area Distributor's Agreement for Southern Louisiana, provided for Bonanza and Mr. Kiene to equally share all royalties for gross sales by the Bonanza restaurants in his territory and for Mr. Kiene to pay to Bonanza its portion of the royalties "in full by check to Bonanza each week." Mr. Kiene testified at trial that he breached this term of the agreement and that no royalty payments whatsoever were remitted to Bonanza from sales by his five restaurants after July 11, 1982. RMC's bookkeeper, Julianne Carmen, also testified that she was responsible for keeping records of royalty payments by RMC to Bonanza and that, based on such records, the last royalty payment ever remitted to Bonanza by RMC for Mr. Kiene's five restaurants was for the week ending July 11, 1982. Both the business records of Bonanza and the testimony of its Director of Credit and Collections, Gregg Simmons, verify defendants' breach of their obligation to make royalty payments to Bonanza. (Plaintiff's Exhibits 25 and 32).
In addition to the language cited earlier contained in the Area Distributor Bonanza Sirloin Pit License Agreement (Plaintiff's Exhibit 2E), with regard to "Bonanza International's Right to Terminate", section 14B of the Area Distributor's Agreement states that the agreement "shall terminate automatically in the event" that the Area Distributor "shall fail to meet any obligation provided for in this agreement, or in the General Operating Policies applicable to all Area Distributors, where such default shall continue for thirty days or more following the sending of written notice" by Bonanza to the Area Distributor. (Plaintiff's Exhibit 1). Based on the uncontradicted evidence, Mr. Kiene and RMC failed to meet their obligation to make royalty payments each week to Bonanza. Bonanza's associate counsel, Kevan Dilbeck, sent written notice to Mr. Kiene and RMC on November 5, 1982 that they were in default under the Area Distributor's Agreement due to the non-payment of royalties. At that time, defendants were approximately four months delinquent in royalty payments for Mr. Kiene's five restaurants. None of these royalties were remitted to Bonanza within thirty days following the sending of such notice and, have never been remitted to Bonanza. Such non-payment resulted in the automatic termination of the Area Distributor's Agreement. Notice of this termination was sent to Mr. Kiene on December 9, 1982 with an effective date of December 15, 1982. (Plaintiff's Exhibit 8).
The courts have repeatedly stated that termination clauses agreed upon by the parties shall be enforced as written. Inabnet v. Pan American Life Insurance Company, 267 So. 2d 774 (La.App. 2nd Cir. 1972); Noah v. L. Daitch & Company, 22 Misc. 2d 649, 192 N.Y.S.2d 380 (S.Ct.N.Y. 1959). See Niagara Mohawk Power Corporation v. Graver Tank and Manufacturing Company, 470 F. Supp. 1308 (N.D. N.Y.1979); Newfield v. General Motors Corporation, 84 A.D.2d 548, 443 N.Y.S.2d 239 (1981). Mr. Kiene's admitted non-payment of royalties and Bonanza's compliance with the notice provision of the contract alone justify the automatic termination of the Area Distributor's Agreement.
Defendants submitted at trial that Bonanza had verbally agreed to consider royalty payments remitted within eight weeks as timely. While Bonanza admitted that it would not take steps to exercise its termination rights under the agreements if it received royalty payments from an Area Distributor within eight weeks of the sales *1441 week, there was no evidence that Bonanza agreed to any oral modification of the contract. Paragraph 15 of the contract specifically provides that any modifications must be in writing and executed by a Bonanza officer. Defendants do not contend that any such written modification exists in the present case and, in fact, Bonanza never modified, orally or in writing, the requirement of weekly royalty payments by the Area Distributor.
Even if the contract had been properly modified to permit royalty payments to Bonanza within eight weeks of a franchisee's sales week, the evidence presented in this case proved that Mr. Kiene was substantially more than eight weeks delinquent in royalty payments at the time of the November 6, 1982 default.
Gregg Simmons testified at trial that the usual procedure he followed when royalty payments were not timely remitted was to: (1) allow a short grace period; (2) phone the Area Distributor to see where the payments were; (3) attempt to work out a 560 day payment plan (depending on the amount of the debt outstanding) and ultimately if none of the proceeding produced acceptable results; (4) contact the legal department about sending out a notice of default. Mr. Simmons further testified that in June of 1982 when Mr. Kiene failed to remit his royalty payments timely, Simmons contacted Mr. Kiene, they resolved a dispute over what amount was owed and payment was accepted. However, when Mr. Kiene failed to timely remit his payments again, Mr. Simmons resorted to having the legal department send out a default because Mr. Kiene never returned his calls or attempted to work out an acceptable payment plan.
In addition to their breach of the royalty payment provisions of the Area Distributor's Agreement, Mr. Kiene and RMC committed other breaches which independently provided grounds for termination of the contract. Paragraph 14B provides for termination if the Area Distributor fails to take effective legal action against any defaulting Bonanza licensee within his area within "thirty days from discovery or notification of any default, infraction or violation of licensing agreement or general operating policies." Mr. Kiene admittedly received the November 5, 1982 default notices for B-144, B-146 and B-150 advising him of defaults in royalty payments for all three restaurants and of operations defaults, as specified in a copy of Mr. Ledford's October 28, 1982 Quality Assurance Evaluation for B-144 and B-146, which was enclosed with the default notice. (Plaintiff's Exhibits 7B, 7C and 7D). He took no action to cure these licensee defaults.
Mr. Kiene wrote to Bonanza on December 28, 1982 (six weeks after the default and two weeks after the termination of the Area Distributor's and Franchise License Agreements) and advised Bonanza that he had received no payments from his own stores since July 11, 1982 and requested that Bonanza contact him to discuss instituting lawsuits against the licensees. The deceptiveness of this letter and the falsity of the statements contained therein were highlighted by the evidence at trial which showed that in fact, Mr. Kiene was receiving daily receipts of all revenues from his five restaurants after July 11, 1982. (Plaintiff's Exhibit 18b). As Area Distributor, Mr. Kiene was obligated under the Area Distributor's Agreement to take action to collect royalties from all licensees, including himself, within thirty days of notification of non-payment. This procedure was obviously not followed in the present case.
In addition, Mr. Kiene and RMC took no action to enforce Bonanza's operating policies and standards for cleanliness with regard to B-144 and B-146. The enforcement of such policies and standards were required under the Area Distributor's Agreement. (Plaintiff's Exhibit 1, Paragraph 5C of the Area Distributor's Agreement and Page 1 (Paragraphs 5 and 6), Page 4-5 (Paragraph 6) of the General Operating Policies for Bonanza Sirloin Area Pit Distributors; and Plaintiff's Exhibit 33). Mr. Kiene acknowledged at trial *1442 that it was the duty of an area distributor to see that the stores were properly maintained in accordance with Bonanza's policies.
Also, the General Operating Policies, (Plaintiff's Exhibit 1) at paragraph 6, cited earlier, reserves Bonanza's right to monitor every Bonanza restaurant, "... specifically with regard to cleanliness of kitchen, dining area, exterior and food quality." The policy further provided "if the Area Distributor is aware of or is called upon to correct any violations of chain policy (as enunciated in this and in the Bonanza General Operating Policies) with specific regard to standards as outlined above [cleanliness of kitchen, dining area, etc.], he will take immediate action to enforce the correction of such violation, including, if necessary, the prompt institution of legal proceedings against any improperly functioning Bonanza licensee."
Evidence through photographs, testimony of witnesses and quality evaluation checklists, was presented at trial establishing the sub-standard operating and sanitary conditions of B-144 and B-146 and Mr. Kiene and RMC's failure to remedy these violations after receiving notification of same. On January 12, 1982 and January 29, 1982, within six months of having purchased the Bonanza Area Distributorship, Mr. Kiene was provided written notification of the various infractions of the Bonanza General Operating Policies. (See Plaintiff's Exhibits 10A, 10D and 15P).
At approximately the same time and continuing through the time the agreements were terminated, the Louisiana Office of Health Services and Environmental Quality repeatedly notified Mr. Kiene that B-144 and B-146 were in serious violation of state health laws. Agency enforcement proceedings were instituted on several occasions to compel Mr. Kiene's compliance with these laws. Each time Mr. Kiene would agree to remedy the sanitary problems, but, soon after the enforcement proceedings, would allow the sanitary conditions to again deteriorate. (Plaintiff's Exhibit 12 in globo).
David Ledford, a former Bonanza employee, testified about the deplorable conditions of B-144 and B-146 immediately prior to Bonanza's sending of the notices of default and immediately prior to the termination of the agreements. He completed Quality Assurance Evaluations on October 27 and October 28, 1982 which made specific references to the sections of the Bonanza Operations and Procedures Manual containing instructions on how to remedy the various problems. (Plaintiff's Exhibits 10B, 10E and 33). The operational deficiencies were discussed with the restaurant manager, who was also given a copy of the Quality Assurance Evaluation. A copy of the Quality Assurance Evaluation was also sent to Mr. Kiene with the default notices for B-144 and B-146. (Plaintiff's Exhibits 7B and 7C).
When Mr. Ledford reinspected the two restaurants thirty days later, he found a further deterioration of the operational and sanitary conditions of the restaurants. (Plaintiff's Exhibits 10C and 10F). He verified some of these violations through photographs which were identified and explained at trial. (Plaintiff's Exhibit 11 in globo).
At trial, Mr. Kiene claimed that the various operational and sanitary violations would have required a substantial outlay of capital to correct. However, this assertion was refuted by Mr. Ledford's testimony that routine cleaning with soap and water would have raised both stores' rating within acceptable ranges.
Shortly after his November 29, 1982 inspection, Mr. Ledford received notice from the Louisiana Health Department that administrative enforcement proceedings had been instituted against Mr. Kiene with respect to both B-144 and B-146 based on violations of the state sanitary code. (Plaintiff's Exhibits 12J, 12K, 12P, 12U and 12V). These enforcement proceedings further evidenced the seriousness of the problems and the validity of Mr. Ledford's ratings.
Mr. Kiene and RMC clearly violated paragraph 14B of the Area Distributor's *1443 Agreement by failing to take effective action to correct operational and sanitary defaults within thirty days following the sending of written notice by Bonanza to the Area Distributor and also violated Paragraph 14C by failing to adhere to the Bonanza and Area Distributor General Operating Policies. The same actions which constituted breaches of the Area Distributor's Agreement constituted breaches of the franchise license agreements for each of Mr. Kiene's five restaurants. (Plaintiff's Exhibits 2B, 2C, 2E, 2H and 2I [Paragraphs IV, VI B, VI G and VII]). Additionally, each of the license agreements required that Mr. Kiene operate his restaurants "... in strict compliance with all applicable laws, ordinances, regulations and other requirements of any federal, state, county, municipality or other government. ..." (Plaintiff's Exhibit VI(I)). Mr. Kiene violated this provision, as evidenced by the Health Department Inspection Reports conducted both before and after the sending of the default notices. (Plaintiff's Exhibit 12, in globo). All such breaches constituted cause for the termination of the five license agreements inasmuch as the breaches continued for ten days or more following the sending of written notice. (Plaintiff's Exhibits 2B, 2C and 2E [Paragraph XIV(A) and (B)]; Plaintiff's Exhibits 2H and 2I [Paragraphs XIV(A) and (B) and XV(A)]; Plaintiff's Exhibits 7B, 7C, 7D, 7E and 7F).
In summary, Mr. Kiene and RMC breached its obligation to Bonanza by 1) failing to remit royalty payments timely, if at all; and 2) failing to adhere to the standards of sanitation and cleanliness of the Area Distributorship Agreement, The License Agreements and the General Operating Policies for Bonanza Sirloin Pit Area Distributors. Mr. Kiene was given various warnings through letters and quality assurance evaluations and ultimately on November 5, 1982 default notice. By November 29, 1982 Mr. Kiene had not attempted to remit owed royalties, work out an acceptable payment plan or improve the condition of his restaurants which had received "provisional" ratings. Finally on December 9, 1982, following defendants' failure to remit any royalties to Bonanza from the operations of Mr. Kiene's five restaurants for over a four month period and the failure to correct violations of Bonanza's restaurant cleanliness and food quality requirements in Bonanza Sirloin Pit Nos. 144 and 146 within thirty days of the notice of default, Bonanza justifiably and in keeping with the terms of the Area Distributor and Franchise Agreements terminated the Area Distributor's Agreement of RMC, Inc. and the five Franchise License Agreements held by Michael Kiene.
The terms of the Area Distributorship specifically provide that in the event of termination, the Area Distributor is not relieved of any of its obligations. (Plaintiff's Exhibit 1, Paragraph 14).
Under the license agreements for B-144, B-146 and B-150, Michael Kiene, as area distributor/licensee was obligated to pay 2.4 percent of the restaurants' gross weekly receipts to Bonanza as royalties. (Plaintiff's Exhibits 2B, 2C and 2E, Paragraphs VI(G)). Under the license agreements for B-154 and B-156, Mr. Kiene, as licensee, was obligated to pay 4.8 percent of weekly gross sales to RMC, the area distributor. (Plaintiff's Exhibits 2H and 2I, Paragraph VI(G)). RMC, under their area distributor's agreement, was required to remit one-half of the royalties from B-154 and B-156 to Bonanza. (Plaintiff's Exhibit 1).
When Michael Kiene assigned his interest in the area distributor's agreement to RMC, he personally guaranteed that he would carry out the terms of the area distributor's agreement in the event of a default by RMC. (Plaintiff's Exhibit 4). Accordingly, under both the franchise license agreements and the assignment of the Area Distributor's Agreement, Michael Kiene is personally liable to Bonanza for royalty payments by his five restaurants during the term of the Area Distributor and Franchise License Agreements.
RMC is also liable to Bonanza for all unpaid royalties collected from Mr. Kiene's five restaurants. Mr. Kiene admitted at *1444 trial that daily revenues from his five restaurants were deposited into an RMC checking account. Paragraph 2 (Page 3) of the General Operating Policies incorporated by reference into the area distributor's agreement provides that the area distributor is to collect royalties from all Bonanza restaurants "whether licensed, owned or operated by the distributor...." The same provision requires that one-half of these royalties be remitted to Bonanza.
It is undisputed that no royalties were paid to Bonanza from sales by any of Mr. Kiene's restaurants after July 11, 1982. It was further established at trial that these restaurants continued to operate and receive revenues after July 11, 1982 from which royalty payments were due. (See Plaintiff's Exhibits 24 and 32). Accordingly, defendant's must remit to Bonanza all outstanding royalties equalling 2.4 percent of gross sales receipts by B-144, B-146, B-150, B-154 and B-156 during the period of July 11, 1982 through December 15, 1982, the effective date of termination of the agreements.
Bonanza is further entitled to recover royalties collected by Mr. Kiene from other licensees in the southern area distributorship.
It is undisputed that, after the termination of the Area Distributor's Agreement for Southern Louisiana, Mr. Kiene received royalty payments from other licensees in the southern Louisiana area based on sales which occurred prior to the effective date of the termination. (Plaintiff's Exhibit 9, in globo). These royalties were earned by Bonanza when the Area Distributor's Agreement was in full force and effect and are payable to Bonanza regardless of when they were received by Mr. Kiene.
If Mr. Kiene received royalties from other licensees from sales made after the termination of the Area Distributor's Agreement, he clearly would not be entitled to retain these funds. Under the terms of the Agreement, all rights of the area distributor revert to Bonanza upon the termination of the Area Distributor's Agreement. (Plaintiff's Exhibit 1, Paragraph 14E).
Accordingly, Bonanza is entitled to judgment in its favor and against RMC and Michael Kiene for a sum equalling Bonanza's one-half portion of all sales royalties collected by Mr. Kiene and RMC from other licensees within his Area Distributorship.
As an inducement for Bonanza's consent to the sale by Stewart, Paul Kiene agreed to assume, as guarantor, all rights, duties and obligations under the area distributor's agreement and franchise license agreements at issue in this case. (Plaintiff's Exhibit 3). This guaranty agreement remains in full force and effect. Following Michael Kiene's and RMC's failure to remit royalty payments to Bonanza, demand was made upon Paul Kiene, as guarantor, for the payment of such royalties. No payments were ever made.
Upon being joined as a defendant in the present action, Paul Kiene asserted that his guarantee agreement was void due to alleged mental incapacity at the time of the signing. However, no evidence was adduced at trial of any alleged mental incompetence.
A party raising the defense of mental incapacity has the burden of proving that he was deprived of reason at the time of contracting and that the other party knew or should have known of such incapacity. La.C.C. Art. 1925. Meadors v. Pacific International Petroleum Company, Inc., 449 So. 2d 26 (La.App. 1st Cir.1984); Mashia v. Pollard, 442 So. 2d 1249 (La.App. 5th Cir.1983); First National Bank of Shreveport v. Williams, 346 So. 2d 257 (La.App. 3rd Cir.1977) (presumption of contractual capacity not easily overcome).
In the absence of evidence to the contrary, this Court finds that Paul Kiene was mentally competent to enter into the guarantee agreement in favor of Bonanza.
Bonanza has taken no action which would in any way impair Paul Kiene's subrogation rights or which would operate to limit or discharge Paul Kiene's obligations *1445 as guarantor. La.C.C. Art. 3059 et seq. Accordingly, Paul Kiene is liable to Bonanza for all royalty payments owed by Michael Kiene under the area distributor's and franchise license agreements.
Additionally, Louisiana Revised Statute 9:2781 provides that when a person fails to pay an "open account" within thirty days after receipt of written demand setting forth the amount owed, with a copy of the supporting invoices, the person shall be liable for reasonable attorney's fees for the prosecution and collection of the claim when judgment is rendered in favor of the claimant.
"Open account" is defined by the statute as any account for which a part or all of the balance is past due, whether or not the account reflects one of more transactions or whether or not at the time of contracting the parties expected future transactions La.R.S. 9:2781(C).
In the present case, Michael Kiene admits to the receipt of written demand for royalties from B-144, B-146 and B-150. (Plaintiff's Exhibits 7B, 7C and 7D). Each of these demands included an invoice correctly setting forth royalties which are due and owing and have never been paid to Bonanza. The written notices to the remaining two restaurants and to the area distributor contain similar information but were "refused" when delivery was attempted by the United States Postal Service. (Plaintiff's Exhibits 7A, 7E and 7F). Under La.R.S. 9:2781(B), a court may find that there has been written demand on the debtor for purposes of the recovery of attorney's fees if there is sufficient evidence of due diligence in the delivery of the written demand. Bonanza's introduction into evidence of the refused demands bearing the official notations of attempted delivery by the post office clearly constitutes sufficient evidence of due diligence and delivery. Additionally, Mr. Kiene testified at trial that he later requested and received after the date of termination, copies of the previously refused default letters.
Accordingly, Bonanza has complied with the provisions of La.R.S. 9:2781 and is entitled to judgment in its favor requiring the payment by defendants of reasonable attorney's fees incurred in connection with the prosecution of this action.
In defense to the claims made by Bonanza and in the form of counterclaims, Mr. Kiene asserts several arguments. First he alleges Bonanza unjustifiably terminated the Area Distributor and Franchise Agreements. As earlier stated, defendant's first allegation that the terms of the contract with respect to the termination clause, had been orally modified, was not substantiated at trial. Mr. Kiene's contention that Bonanza agreed it would not default and/or terminate any contract where royalties or other debts were outstanding unless a payment plan could not be worked out, lacks merit. Primarily, because the terms of the contract could not be modified unless reduced to writing and agreed on by all parties and secondly, had such an agreement been reached, Mr. Kiene did not comply with the new requirements, i.e. he failed to conscientiously work out a payment plan with Bonanza or even return Bonanza's efforts to contact him.
Secondly, defendants allege that Bonanza's actions constituted a breach of Good Faith and Fair Dealing. This claim is divided into two parts: a) selective enforcement of the default and termination; and b) intentional failure to provide a reasonable amount of training and assistance.
In every contract there is an implied covenant that neither party will do anything which will prevent the other party from performing his obligations under the contract. This implied obligation is commonly referred to as the implied covenant of "good faith and fair dealing". See La.C.C. Art. 1983; Uniform Commercial Code, Section 1-201(19) and 1-203. Crossland v. Canteen Corporation, 711 F.2d 714, 728 (5th Cir.1983); Corenswet, Inc. v. Amana Refrigeration, Inc., 594 F.2d 129 (5th Cir. 1979); Niagara Mohawk Power Corporation v. Graver Tank and Manufacturing Company, 470 F. Supp. 1308 (N.D.N.Y. 1979). However, any such implied covenant cannot properly be used to override or *1446 strike express contract terms. Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480 (5th Cir.1984); Corenswet, Inc. v. Amana Refrigeration, Inc., supra. See Murphy v. American Home Products Corporation, 58 N.Y.2d 293, 448 N.E.2d 86, 461 N.Y.S.2d 232 (1983).
Mr. Kiene avers that Bonanza did not fulfill its contractual obligations to him with regard to training, assistance, guidance, and advice in every step of his normal operations as Area Distributor, as that provision had been interpreted to him by Bonanza officials, as well as under any reasonable interpretation of that provision. Moreover, Mr. Kiene avers that Bonanza did not fulfill its contractual obligations with regard to "promoting and publicizing the Bonanza program on a regional and national level wherever Bonanzas are located", thus preventing defendants from fulfilling their contractual obligations to Bonanza. Defendants submit that Bonanza's non-support prevents its enforcement of the termination provisions under the contract. The Area Distributor's Contract provides:
IFC (Bonanza) will train and offer assistance, guidance and counsel to Area Distributor in Licensing, location, selection, construction, finance, equipment, advertising, grand opening, publicity, public relations, operations, budgets, supply coordination and every other phase of Distributors operation.
This intensive training will be free of charge to Distributor ..., and IFC (Bonanza) shall pay or provide room and board for one person for one full week in order to accomplish this training. Training shall take the form of "on the job" experience and exposure to all facets of a Distributor's business.
Distributor shall work with IFC's (Bonanza's) experienced sales personnel in order to observe franchise sales techniques, and with executives of the various operating departments.
IFC (Bonanza) agrees:
B. To provide Area Distributor with training, assistance, guidance, and advice in every step of his normal operation as Bonanza Sirloin Pit Area Distributor. E. To aggressively promote and publicize the Bonanza program on a regional and national level wherever Bonanza's are located.
(Plaintiff's Exhibit 1).
Mr. Kiene submits that Bonanza did not fulfill its obligations under the agreement, to train and lend assistance to him, as an Area Distributor. However, testimony adduced at trial did not support this position.
On July 3, 1981, prior to the closing of the sale from the Stewarts to Mr. Kiene, Mr. Kiene declined Bonanza's offer for him to participate in their five week training program. Also in opposition to defendant's assertion that Bonanza failed to train and lend assistance to Mr. Kiene, Bonanza established that its marketing personnel visited with Mr. Kiene in New Orleans and corresponded with him on a regular basis with suggestions for advertising and increasing restaurant sales. Mr. Kiene received extensive promotional and advertising materials from the National Creative Group, a non-profit organization funded through annual fees from licensees and matching funds from Bonanza. Bonanza field marketing representatives offered suggestions on the best ways to utilize advertising and to promote restaurant sales. According to Virginia Waldvogel, who was hired by Mr. Kiene to handle the promotion and advertising of his five Bonanza restaurants, a week would seldom pass without defendants receiving some form of communication from Bonanza on marketing matters. (See e.g. Plaintiff's Exhibits 15D, 15H, 15M, 15N, 15Q, 15U, 15V, 15W, 15X, 15AA, 15CC, 15DD and 15EE).
Field operations personnel of Bonanza also provided advice to Mr. Kiene on ways to improve the operations of his restaurants. Glenn L. Williams, Director of Field Operations, visited with Mr. Kiene in New Orleans during 1981 and 1982 to discuss various problem areas which needed to be rectified by Kiene. Mr. Williams followed-up these matters with written recommendations. *1447 (Plaintiff's Exhibits 15G, 15M and 15T).
Field Service Representatives, Ralph Messer and David Ledford, visited Mr. Kiene's restaurants to conduct Quality Assurance Evaluations. These evaluations detailed those operational areas needing improvement and referenced the sections of the Bonanza Operations and Procedures Manual which explained the methods for making such improvements. (Plaintiff's Exhibits 10A-10F).
Both Mr. Messer and Mr. Ledford spent time discussing these evaluations with Mr. Kiene and/or his managers and other Bonanza officials offered suggestions to Mr. Kiene in writing on ways to improve his restaurant operations. (See Plaintiff's Exhibits 15G, 15N, 15T and 15AA).
Ed Kosan, Director of Franchise Operations, maintained continual contact with Mr. Kiene and offered suggestions on ways Mr. Kiene could attract new licensees to his area. In this regard, Bonanza conducted advertising in national publications, such as the Wall Street Journal, and at trade shows in an effort to generate public interest in opening new Bonanza franchises.
In summary, Bonanza made numerous good faith attempts to assist Mr. Kiene in all areas of his operations. Numerous Bonanza officials, including John Bill (Regional Marketing Manager), Glenn Williams (Director of Field Operations), Dianne Young (Director of Training), Ed Kosan (Vice-President of Franchise Development), Gregg Simmons (Director of Credit and Collections), Tom Keyser (Franchise Training Specialist), Bill Eder (Field Operations Representative), Ralph Messer (Field Operations Representative) and David Ledford (Field Operations Representative) traveled to New Orleans and personally visited with Mr. Kiene and/or his staff to offer suggestions and assistance in all facets of his operations as licensee and Area Distributor. The extensive nature of this help is highlighted by the fact that many of these individuals came to New Orleans on more than one occasion during the seventeen month period in which the contracts were in force. These and other Bonanza officials also communicated in writing and by telephone with Mr. Kiene and his staff on a regular basis. (See e.g. Plaintiff's Exhibit 15, in globo). Accordingly, defendants' assertion that Bonanza failed to fulfill its obligation under the Area Distributor's Agreements to train and assist Mr. Kiene is unsupported by the evidence.
From a legal standpoint, it appears that defendants are attempting to override the termination provisions of the Area Distributor's Agreement through the use of the implied obligation of good faith and fair dealing. The jurisprudence is clear that implied covenants cannot override express contractual provisions, as in this case where the Area Distributor's Agreements specifically provides for termination upon the occurrence of certain events. See Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 485 (5th Cir.1984); Corenswet, Inc. v. Amana Refrigeration, Inc., 594 F.2d at 138 (5th Cir.1979).
Defendants further allege that Bonanza breached the implied obligation of good faith and fair dealings by "unequal" treatment, i.e. not exercising its right to terminate other Area Distributorship Agreements throughout the United States, for failure to timely pay royalties and maintain their restaurants in accordance with Bonanza General Operating Policy Standards.
As previously stated herein, every contract contains an implied covenant that neither party will do anything which will hinder or prevent the other party from performing that particular contract. By definition, compliance or non-compliance with this covenant can only be determined by reviewing the actions of the particular parties in relation to each other under the particular contract at issue. Whether or not Bonanza treated defendants differently than other area distributors has no bearing on whether Bonanza acted fairly and in good faith in their treatment of defendants under the Area Distributor's Agreement. See Bergen Rambler, Inc. v. American *1448 Motors Sales Corporation, 30 F.R.D. 334 (D.N.J.1962).
Regardless of the relevancy or irrelevancy of Bonanza's dealings with third parties, any evidence of good faith and fair dealing cannot be used to override express provisions of the written contract.
It is well established in Louisiana, New York and other jurisdictions that, where the express intention of contracting parties is clear, a contrary intent will not be created by implication. The implied covenant of good faith and fair dealing cannot give contracting parties rights which are inconsistent with those set out in the contract. Broad v. Rockwell International Corporation, 642 F.2d 929, 957 (5th Cir. 1981). See also Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 485 (5th Cir.1984); Corenswet, Inc. v. Amana Refrigeration, Inc., 594 F.2d 129, 138 (5th Cir.1979). The Area Distributor's Agreement for southern Louisiana specifically and clearly provided for termination of the agreement in the event of non-payment of royalties and certain operational violations, among other things. These termination provisions cannot be "read out of the contract" through any implied agreement, if such an agreement was indeed violated.
Furthermore, the instances cited by defendants can easily be distinguished from defendant's situation. For example, with respect to Stewart, Bonanza described its long standing, successful relationship with the Stewarts, which included the timely payment of royalties, and explained that the delinquent royalty payments referred to by Mr. Kiene were those payments which had accrued during the time Stewart was negotiating with Mr. Kiene to sell the Area Distributorship. Stewart had advised Bonanza that all royalties would be paid at the time of the closing of the sale and remained in communication with Bonanza each time the closing date was rescheduled. Stewart, thereafter, paid these royalties at the July 31, 1981 closing of the sale.
With respect to Steaks of U.S.A., Bonanza showed that they were sent notice of default for non-payment of royalties when those royalties became one month overdue and that, within ten days of the notice of default, all delinquent royalties were paid in full.
Accordingly, defendants have not established that Bonanza failed to fulfill its contractual obligations under the Area Distributor's Agreement in good faith.
Mr. Kiene further asserts that Bonanza was unjustly enriched through the termination of the Area Distributor's and Franchise License Agreements. The prerequisites that must be satisfied to succeed in an action for unjust enrichment or actio de in rem verso in Louisiana are:
1. there must be an enrichment,
2. there must be an impoverishment,
3. there must be a connection between the enrichment and the impoverishment,
4. there must be an absence of justification or cause for the enrichment and impoverishment, and
5. there must be no other remedy at law available to the plaintiff.
Creely v. Leisure Living, Inc., 437 So. 2d 816 (La.1983); Pan American Import Co., Inc. v. Buck, 440 So. 2d 182 (La.App. 4th Cir.1983); City Bank & Trust Co. v. White, 434 So. 2d 1299 (La.App. 3 Cir.1983); Ranna v. Ranna, 427 So. 2d 584 (La.App. 5 Cir.1983).
The prerequisites under New York law are quite similar: the plaintiff must establish that the defendant was enriched, that such enrichment was at the plaintiffs' expense, and that the circumstances were such that, in equity and good conscience, the defendant should make restitution. Dolmetta v. Uintah Nat. Corp., 712 F.2d 15 (2nd Cir.1983); Chase Manhattan Bank v. Banque Intra S.A., 274 F. Supp. 496 (S.D.N.Y.1967).
Defendant's contend that Bonanza received the value of the Area Distributor's Agreement and of Mr. Kiene's five franchise license agreements when it exercised its termination rights. They further contend that Bonanza received an additional *1449 2.4 percent royalty from other licensees in the southern Louisiana area following the termination of the Area Distributor's Agreement.
As admitted by defendants in their post trial brief, "... Bonanza made no specific contractual promise to pay or reimburse Mr. Kiene for the value of the distributorship upon termination...."
When Bonanza terminated the five franchise license agreements and the area distributor's agreement following the various defaults under those agreements by defendants, Bonanza, in fact, lost royalty revenues from the operation of Mr. Kiene's five restaurants and lost the services of an area distributor for the southern Louisiana territory. There has been no area distributor for southern Louisiana and no new Bonanza franchise licenses sold in southern Louisiana since the termination of Mr. Kiene's agreement. Since no new franchise licensees were established in the New Orleans area following the termination of Mr. Kiene's five franchise licenses, Bonanza in essence lost the entire New Orleans market. Additionally, Bonanza has had to perform the functions of area distributor with respect to the remaining licensees in Louisiana.
The Area Distributor's Agreement for Southern Louisiana specifically provides that all functions; rights and duties of the area distributor "... shall cease and revert to [Bonanza]" ... upon the termination of the area distributor's agreement. (Plaintiff's Exhibit 1, Paragraph 14E). Bonanza had just cause to terminate the agreement, and, under the terms of the agreement, Mr. Kiene relinquished any rights which he had in and to such agreement.
An enrichment is unjust only when there is no justification in law or contract. New Hotel Monteleone v. First National Bank of Commerce, Inc., 423 So. 2d 1305 (La. App. 4th Cir.1982); McDonald v. Champagne, 340 So. 2d 1025 (La.App. 1st Cir. 1976). Defendants, through their breach of the area's distributor's agreement gave Bonanza contractual justification to terminate such agreement. Through defendant's actions, and under the terms of the agreement, all former rights of Mr. Kiene ceased and reverted to Bonanza and, accordingly, defendants cannot now claim that such cessation or reversion, or the resultant right of Bonanza to enter into a new area distributor agreement with another party, is "unjust".
Additionally, any "enrichment" by Bonanza through the receipt of 4.8 percent royalties from other licensees in defendants' former area distributorship instead of the 2.4 percent royalties received prior to the termination of the area's distributor's agreement is also justified by contract. The license agreements with the other licensees provided that in the event the area distributor's agreement "is terminated for any reason during the term of this agreement, until such time as a new area distributor is appointed by Bonanza International, all duties and obligations of the licensee to the area distributor, hereunder, specifically including, but not limited to, all royalty payments and reporting, shall be made directly to Bonanza International." (Plaintiff's Exhibits 2D, 2F, 2G, 2J, 2K, 2L and 2M, Paragraph XV(B)). Following the justified termination of the area distributor's agreement, Bonanza had legal cause under the various license agreements to require a 4.8 percent royalty payment from the licenssees in Mr. Kiene's former area distributorship. Furthermore, Bonanza has earned this increase by assuming the duties and obligations which were supposed to be performed by the area distributor. Any "enrichment" through increased royalty payments was not "unjust".
Bonanza had a justified cause for terminating the Area Distributorship Agreement and the resultant rights to enter into a new area distributorship with another party and/or require a 4.8 percent royalty payment from the licensees in Mr. Kiene's former area distributorship. Accordingly, if indeed any enrichment was acquired, it was not unjustified and the attempt by defendant to invoke the claim of unjust enrichment must fail. See Creely, supra at 822.
Lastly, Mr. Kiene submits that Bonanza breached its obligation under the *1450 Area Distributor Agreement by failing to submit its disputes regarding the defaults in question to arbitration prior to defaulting and/or terminating the Area Distributor Agreement, thus violating the "Area Distributor's" Agreement provision 16. Defendants waived their right to arbitration by asserting counterclaims, conducting extensive pre-trial discovery and proceeding to trial without at any time requesting that this action be stayed pending arbitration.[6]Weiland v. Pyramid Ventures Group, 511 F. Supp. 1034 (M.D.La.1981).
The right to arbitrate may be waived either by express words or by necessary implication. The institution of a counterclaim by one party seeking damages for the alleged breach of a contract and the trial of such suit is incompatible with a later demand for arbitration and constitutes a waiver of the party's right to demand arbitration. I.D.C., Inc. v. McCain-Winkler Partnership, 396 So. 2d 590 (La. App. 3rd Cir.1981).
Additionally, Mr. Kiene admitted that he at no time requested, verbally or in writing, that Bonanza submit any matter under his area distributor's agreement to arbitration. This inaction by Mr. Kiene, together with his extensive use of the litigation machinery, prevents his post-trial assertion of the right to arbitrate. See E.C. Ernst, Inc. v. Manhattan Construction Company of Texas, 559 F.2d 268 (5th Cir.1977); Burton-Dixie Corporation v. Timothy McCarthy Construction Company, 436 F.2d 405 (5th Cir.1971). Accordingly, defendant's assertion that Bonanza's failure to submit this matter to arbitration, should prevent them from succeeding in the claims at issue, lacks merit.
In conclusion, Michael Kiene and RMC failed to pay royalties and to comply with operational requirements under the agreements at issue in this case. Bonanza properly exercised its right to terminate the agreements and is now entitled to recover royalties due and owing under such agreements.
Bonanza fulfilled its contractual obligations to defendants and did not breach an implied obligation of good faith and fair dealing in the termination of the agreements. Furthermore, Bonanza's exercise of its termination rights under the agreements did not result in an "unjust enrichment."
Lastly, defendant's non-payment of their open account to Bonanza after proper written demand makes them further liable to Bonanza for the payment of reasonable attorney's fees.
Accordingly;
IT IS ORDERED that judgment be entered in favor of Bonanza and against Michael Kiene, Paul Kiene and RMC imposing liability on defendants for the payment of royalties and attorney's fees in an amount to be determined through a quantum hearing.
IT IS FURTHER ORDERED that there be judgment in favor of Bonanza and against Michael Kiene, Paul Kiene and RMC on all of the counterclaims asserted by defendants.
NOTES
[1] The name of Dilly Corp., a party to the Area Distributor's Agreement, was changed to Stewart Investments, Inc. on the Area Distributor's Agreement by agreement of February 28, 1966.
[2] International Franchise Corporation, (IFC), a named party in the Area Distributor's Agreement, merged with Diversa, Inc. on December 29, 1965. Diversa, Inc. assigned its interest in the Area Distributor's Agreement to plaintiff, Bonanza International, Inc. on April 25, 1966.
[3] Michael Kiene subsequently formed and became president of Restaurant Management Consultants, Inc. ("RMC"), a Louisiana business corporation, and on November 15, 1981 assigned to the corporation his rights and interest in and to the Area Distributor's Agreement. As part of this assignment, Michael Kiene personally guaranteed that RMC would carry out all the terms and conditions of the Area Distributor's Agreement. (Plaintiff's Exhibit 4).
[4] The 2.8 percent royalties provided for in the original Bonanza General Operating Policy were increased to 4.8 percent by written agreement with Stewart on April 18, 1967 following Bonanza's discontinuance of meat commission payments to Area Distributor's. (See April 18, 1967 Agreement attached to Plaintiff's Exhibit 1).
[5] In November and December, 1982, following Mr. Kiene's receipt of default letters from Bonanza, Mr. Kiene remitted Bonanza's portion of some of the royalties collected from restaurants other than his restaurants. None of these payments included any royalties from Mr. Kiene's five restaurants and, to this date, Bonanza has not received royalties from Mr. Kiene's restaurants for sales made after July 11, 1982. (Plaintiff's Exhibit 25).
[6] Mr. Kiene raised by means of a counterclaim that Bonanza failed to submit this matter to arbitration, however, he never requested arbitration proceeding nor did he request that this action be stayed pending arbitration. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1213850/ | 897 P.2d 905 (1995)
Robert W. LEWIS, Petitioner,
v.
SCIENTIFIC SUPPLY CO., INC.; The Industrial Claim Appeals Office of the State of Colorado; and Colorado Compensation Insurance Authority, Respondents.
No. 94CA1228.
Colorado Court of Appeals, Div. II.
May 18, 1995.
*906 Alexander & Ricci, William A. Alexander, Jr., Colorado Springs, for petitioner.
Paul Tochtrop, Colorado Compensation Ins. Authority, Denver, for respondents Scientific Supply Co., Inc. and Colorado Compensation Ins. Authority.
No appearance for respondent Indus. Claim Appeals Office of State of Colorado.
Opinion by Judge CRISWELL.
This case presents the issue whether an Administrative Law Judge (ALJ) in a workers' compensation proceeding has inherent authority to provide a remedy for a fraudulent claim by ordering the claimant to repay the benefits fraudulently procured. The Industrial Claim Appeals Office (Panel) ruled that the ALJ has such inherent authority, and consequently, it affirmed the ALJ's order requiring Robert Lewis (claimant) to repay approximately $140,000 in benefits. We affirm in part, for reasons different from those relied upon by the Panel, and set aside in part.
Claimant filed a claim for benefits in May 1984, alleging that he was injured in a single car accident while performing duties for his employer, Scientific Supply Company, Inc. The employer and its insurer, Colorado Compensation Insurance Authority (respondents), contested liability, and the matter proceeded to hearing in November 1984. The ALJ credited claimant's sworn testimony that he "lost the brakes in his motor vehicle," causing the vehicle to leave the road and crash down a cliff. He was awarded benefits for ongoing total temporary disability and medical expense.
Based on the ALJ's previous determination that claimant suffered injuries arising out of and in the course of his employment, in September 1988, the respondents filed a final admission of liability, terminating claimant's temporary disability benefits and admitting liability for permanent total disability benefits.
Four and one-half years later, in April 1993, respondents filed a "Motion to Withdraw the Admission of Liability." This motion asserted that respondents had learned that claimant was imprisoned in the State of Missouri after pleading guilty to charges of arson and second degree murder. The motion also alleged that, when claimant confessed to committing arson and murder, he also admitted to police that he had "faked" the 1984 Colorado workers' compensation claim in order to defraud respondents. Claimant told police that he had deliberately pushed his car over a cliff, injuring himself in the process.
Following an evidentiary hearing, the ALJ found that the claim for benefits was "fraudulent *907 ab initio" and ordered claimant to repay all benefits, which totalled slightly less than $140,000. On review, the Panel affirmed the order.
I.
Claimant initially argues that the ALJ and the Panel have no authority under the Workers' Compensation Act to order him to reimburse respondents. He contends that respondents are required to bring a separate action in district court, where he would be entitled to a jury trial and other rights not accorded him before an administrative tribunal. We agree that the ALJ has no authority to remedy the fraud by ordering claimant to repay past benefits; however, we conclude that the ALJ is authorized to terminate future benefits under the reopening provisions of the Workers' Compensation Act.
A.
Before addressing the substantive issues presented here, it is necessary for us to consider a threshold procedural matter.
In affirming the ALJ's order, the Panel relied on Vargo v. Industrial Commission, 626 P.2d 1164 (Colo.App.1981). There, a division of this court held that, if an employer's admission of liability is induced by fraud, the admission is void "ab initio" and subject to "retroactive" withdrawal. However, there is a significant difference between the procedural posture in Vargo and that evidenced here.
In Vargo, there had been no prior adjudication of liability nor any final admission of liability. Here, in contrast, there have been both. The ALJ initially determined liability in 1984; then, in 1988, the respondents filed a final admission of liability, admitting liability for permanent total disability.
Under the law applicable to this claim, the 1988 admission, which was uncontested, became a "final" award which could not be reopened except pursuant to statute. See Colo.Sess.Laws 1988, ch. 50, § 8-53-102 at 385-86 (effective July 1, 1988) (now codified as § 8-43-203(2), C.R.S. (1994 Cum.Supp.)).
That statute provides, in pertinent part:
[I]f the claimant does not contest the final admission in writing within sixty days of the date of the final admission the case will be automatically closed as to the issues admitted in the final admission.... Once a case is closed pursuant to this subsection (2), the issues closed may only be reopened pursuant to section 8-43-303.
However, respondents did not file a petition to reopen the claim under consideration here. And, none of the proceedings were conducted pursuant to the reopening statute, § 8-43-303, C.R.S. (1994 Cum.Supp.).
Apparently in reliance on Vargo v. Industrial Commission, supra, respondents concluded that it was sufficient to file a "Motion to Withdraw the Admission of Liability." Although such a motion would be appropriate if the case had remained open, when, as here, a claim has been closed, it is necessary for an employer or its carrier to seek a reopening under § 8-43-303. See J & D Masonry, Inc. v. Kornegay, 224 Va. 292, 295 S.E.2d 887 (1982).
Nevertheless, in the interest of judicial and administrative economy, we will treat the respondents' Motion to Withdraw the Admission of Liability as the substantive equivalent of a petition to reopen the claim, and we will consider the administrative orders as granting a request to reopen. In doing so, we note that, inasmuch as claimant had been receiving weekly permanent total disability benefits through December 16, 1991, a petition to reopen the claim would have been timely under § 8-43-303(2)(a), C.R.S. (1994 Cum.Supp.).
B.
Relying on Vargo v. Industrial Commission, supra, the Panel held that the ALJ had "inherent" authority to remedy the prior fraud by ordering claimant to repay the fraudulently procured benefits. We disagree with the Panel. We conclude, rather, that the ALJ does not possess any such "inherent" authority.
As indicated above, Vargo is inapposite because it was not necessary in that case to reopen any final award. In contrast, an administrative adjudication or award of *908 workers' compensation benefits, like any judgment, is generally immune from collateral attack, except when the award is, for some reason, wholly invalid. State Compensation Insurance Fund v. Luna, 156 Colo. 106, 397 P.2d 231 (1964); Wait v. Jan's Malt Shoppe, 736 P.2d 1265 (Colo.App.1987).
If the award in this case were a civil judgment entered by a court, respondents would be limited to the relief afforded under C.R.C.P. 60(b) or, alternatively, to an independent action in equity to have the award set aside. Both of these remedies are subject to strict limitations. See Southeastern Colorado Water Conservancy District v. Cache Creek Mining Trust, 854 P.2d 167 (Colo.1993).
Likewise, the administrative tribunals which adjudicate workers' compensation claims are created by statute, and the jurisdiction, powers, duties, and authority of these tribunals are limited to that provided by statute. Maryland Casualty Co. v. Industrial Commission, 116 Colo. 58, 178 P.2d 426 (1947).
Accordingly, we conclude that an ALJ has no inherent authority to remedy fraud. Rather, the authority to do so must rest upon some provision of the statutes granting to the ALJ jurisdiction over the subject.
C.
Section 8-43-303 authorizes the ALJ to review and reopen any award on the grounds of "an error, a mistake, or a change in condition." The word "mistake" as used in this section means any mistake of law or fact. Ward v. Azotea Contractors, 748 P.2d 338 (Colo.1987). Perjured testimony resulting in an erroneous finding of fact concerning the cause of any injury or the nature or extent of an employee's disability comes squarely within the realm of a "mistake" of fact. See Contes v. Metros, 113 Colo. 1, 153 P.2d 1000 (1944); see also Williams v. Jones, 11 F.3d 247 (1st Cir.1993).
Hence, we agree that the ALJ could reopen the claim on the basis of claimant's confession to police that he had "faked" the 1984 auto accident. However, we do not agree that the ALJ could, on that basis, order claimant to reimburse the respondents for almost $140,000 in past benefits.
Section 8-43-303(1) explicitly provides that, if an order to reopen a claim on the grounds of error, mistake, or change in condition is entered:
compensation and medical benefits previously ordered may be ended, diminished, maintained, or increased. No such reopening shall affect the earlier award as to moneys already paid. (emphasis added)
Thus, in ordering a reimbursement of past benefits, the ALJ violated the express statutory prohibition against affecting "the earlier award as to moneys already paid." This is not to say, of course, that the administrative tribunal is powerless to provide any remedy for the fraud; obviously, under the reopening statute, the ALJ has the power to terminate all future benefits payable under the award.
This conclusion is bolstered by a comparison of the Workers' Compensation Act to the Unemployment Act. Under the Unemployment Act, the agency is specifically authorized to recoup benefits procured by fraud:
If by reason of fraud, mistake, or clerical error a claimant receives moneys in excess of benefits to which he is entitled ... the division shall recoup such moneys....
Section 8-74-109(2), C.R.S. (1986 Repl.Vol. 3B). However, no analogous provision is to be found in the Workers' Compensation Act.
We note that, effective July 1, 1994, the General Assembly has specifically allowed a workers' compensation carrier to take credit for, or to offset, "previously paid" benefits against further payments, if the claimant "admits" obtaining the previous payments through fraud, or if there has been a previous "civil judgment or criminal conviction" entered, establishing the claimant's fraud. Section 8-43-304(2), C.R.S. (1994 Cum. Supp.). That statutory provision is not applicable here, however, and we need not decide whether it has the effect either of enlarging or of limiting the authority which we here determine the ALJ possessed prior to that statute's effective date.
In summary, then, we conclude that the ALJ could properly reopen the claim in this *909 case on the basis of fraud and that he could terminate any future benefits because of such fraud. However, the ALJ exceeded his authority under § 8-43-303 in ordering the claimant to reimburse the respondents for past benefits.
II.
Claimant's final two arguments relate to the ALJ's factual finding that he staged the 1984 accident and claimant's assertion that respondents waived their right to obtain any relief from any fraud. These arguments lack merit.
The ALJ is the sole trier of fact in workers' compensation proceedings, and consequently, if the findings of fact are supported by substantial evidence in the record, they are binding on review. Sections 8-43-301(8) & 8-43-308, C.R.S. (1994 Cum.Supp.); Martinez v. Regional Transportation District, 832 P.2d 1060 (Colo.App.1992). Here, there is ample support for the ALJ's findings with respect to the claimant's fraudulent misrepresentations, his perjury, and the voluntariness of his subsequent confession. Levy v. Everson Plumbing Co., 171 Colo. 468, 468 P.2d 34 (1970). These findings, in turn, fully support the termination of future benefits.
Further, the record reveals that claimant did not raise the issue of respondents' alleged waiver before the ALJ. Hence, the issue of waiver was itself waived and will not be considered on review. See Monolith Portland Cement v. Burak, 772 P.2d 688 (Colo.App.1989).
That portion of the Panel's order requiring the claimant to repay nearly $140,000 in past benefits is set aside. The remainder of the order is affirmed insofar as it terminates future benefits to the claimant. The cause is remanded to the Panel with directions to enter an order stating that the previous award was reopened pursuant to § 8-43-303 and that all future benefits to the claimant were terminated.
BRIGGS and ROY, JJ., concur. | 01-03-2023 | 10-30-2013 |
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